Horizon Technology Finance

Horizon Technology Finance (HRZN) Q1 2025 Earnings

Reported Apr 29, 2025 at 4:23 PM ET · SEC Source

Q1 25 EPS

$0.27

MISS 17.13%

Est. $0.33

Q1 25 Revenue

$24.5M

MISS 8.09%

Est. $26.7M

vs S&P Since Q1 25

-68.7%

TRAILING MARKET

HRZN -33.1% vs S&P +35.6%

Market Reaction

Did HRZN Beat Earnings? Q1 2025 Results

Horizon Technology Finance delivered a disappointing first quarter of 2025, missing on both the top and bottom lines as rising credit stress and portfolio yield compression weighed on results. The company posted earnings of $0.27 per share, falling s… Read more Horizon Technology Finance delivered a disappointing first quarter of 2025, missing on both the top and bottom lines as rising credit stress and portfolio yield compression weighed on results. The company posted earnings of $0.27 per share, falling short of the $0.33 consensus estimate by 17.13%, while total investment income of $24.52 million trailed expectations by 8.09%, despite representing a 31.0% increase year-over-year. The most material blow came from a sharp surge in net unrealized depreciation of $32.16 million, which drove net assets per share down to $7.57 from $8.43 at year-end 2024, with the stock touching a 52-week low of $7.55 around the time of the report. Credit quality also showed signs of strain, with high-risk loans rising from four to seven, carrying a fair value of just $15.50 million against a cost of $66.70 million. On a more constructive note, Horizon funded $100.30 million in new loans during the quarter and enters Q2 with a $236 million committed backlog, while maintaining its $0.33 quarterly distribution, supported by $1.00 per share in spillover income.

Key Takeaways

  • Lower interest income on investments from the debt portfolio drove decline in total investment income
  • Debt portfolio yield of 15.0% annualized, down from 15.6% year-over-year
  • Funded nine loans totaling $100.3 million in Q1 2025
  • Net unrealized depreciation on investments of $32.2 million ($0.80 per share) significantly impacted NAV
  • Interest expense increased by $0.5 million year-over-year
  • Five liquidity events from portfolio companies during the quarter
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HRZN YoY Financials

Q1 2025 vs Q1 2024, source: SEC Filings

“We grew our portfolio of debt investments for the third straight quarter, while further expanding our committed backlog, which provides us with high-quality opportunities to continue growing both our venture debt portfolio and our NII in the quarters ahead.”

— Robert D. Pomeroy, Jr., Q1 2025 Earnings Press Release