Sixth Street Specialty Lending

TSLX Q1 2025 Earnings

Reported Apr 30, 2025 at 4:05 PM ET · SEC Source

Q1 25 EPS

$0.58

BEAT +4.77%

Est. $0.55

Q1 25 Revenue

$116.3M

MISS 0.30%

Est. $116.7M

vs S&P Since Q1 25

-46.6%

TRAILING MARKET

TSLX -15.2% vs S&P +31.5%

Market Reaction

Did TSLX Beat Earnings? Q1 2025 Results

Sixth Street Specialty Lending posted a modest earnings beat in Q1 2025, reporting adjusted net investment income of $0.58 per share, ahead of the $0.55 consensus estimate by 4.77%, even as revenue of $116.35 million came in just 0.30% below expectat… Read more Sixth Street Specialty Lending posted a modest earnings beat in Q1 2025, reporting adjusted net investment income of $0.58 per share, ahead of the $0.55 consensus estimate by 4.77%, even as revenue of $116.35 million came in just 0.30% below expectations despite surging 28.9% year over year. The headline story, however, was a sharp decline in net income per share to $0.39, down from $0.55 in Q4 2024 and $0.53 in Q1 2024, driven by $21.86 million in net unrealized losses tied to widening credit spreads and $11.04 million in foreign currency translation losses on the portfolio. NAV per share slipped to $17.04 from $17.16 at year-end, reflecting the spread-related markdowns. On a brighter note, the company strengthened its balance sheet with a $300 million unsecured notes issuance and extended $1.52 billion in revolving credit commitments to March 2030, while the board declared a Q2 base dividend of $0.46 per share alongside a $0.06 supplemental dividend for Q1.

Key Takeaways

  • Lower reference rates reduced both investment income and interest expense, with net benefit to earnings
  • Higher activity-based fee income partially offset lower interest income
  • Widening credit spreads negatively impacted portfolio valuations by $0.06 per share
  • Reversal of unrealized gains from paydowns and sales reduced NAV by $0.13 per share
  • Net unrealized foreign currency translation losses of $11.0 million
  • Non-accrual rate remained low at 1.2% of portfolio at fair value
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TSLX YoY Financials

Q1 2025 vs Q1 2024, source: SEC Filings