Core Earnings Per Share: Reported at $0.59 for Q1 2024, which is a 3.5% increase from the previous year, surpassing the $0.48 per share dividend.
Net Asset Value (NAV): Grew 6% year-over-year, setting a new record at $19.53 per share.
GAAP Net Income Per Share: Stood at $0.76 for Q1 2024 compared to $0.52 in the first quarter of 2023.
Investment Income: Primarily driven by the benefits of higher base rates and structuring fees, a reflection of an improving investment environment.
Future Guidance
Dividend Announcement: A second-quarter 2024 dividend of $0.48 per share is declared.
Taxable Income Spillover: Estimated to end 2023 with approximately $635 million, or $1.05 per share, for distribution to stockholders in 2024, which provides more than 2x the current regular quarterly dividend support.
Capital Raising and Financing Maneuvers: Over $7 billion of financing amended, extended, or raised for ARCC, aiming to boost the investment opportunities and secure a stable capital structure.
Trends, Market Conditions, Sentiment
Competitive Market Conditions: Despite an increasingly competitive environment, ARCC’s direct origination capabilities remain a strong asset. The market sees a pick-up in transaction activity with $1.2 billion of commitments already closed in the second quarter.
Bank Activity Increase: A renewed activeness from banks is observed, generating a positive effect on capital availability, M&A activity, and overall market confidence.
Interest Rates and Credit Spreads: The beneficial impact of higher base rates and attractive credit spreads has contributed significantly to earnings and valuation momentum.
Credit Fundamentals: Portfolio companies demonstrated organic EBITDA growth over the last 12 months of 10%, indicating health and strength across ARCC’s investments.
Notable Quotes
”Our core earnings per share increased 3.5% from the prior year and were well above our first-quarter regular dividend.” - Reflects the company’s robust financial performance and growth.
”In these environments, we believe that our expansive direct origination capabilities become even more valuable.” - Highlights ARCC’s competitive advantage amidst market challenges.
”Our portfolio companies showed organic EBITDA growth over the last 12 months of 10% which is remarkable in today’s economic environment.” - Demonstrates the strength and resilience of ARCC’s portfolio in a challenging economic backdrop.
”So far this year, we’ve been active as an issuer in the unsecured notes market and the secured bank and CLO markets.” - Shows the company’s proactive approach in navigating the financing landscape and securing attractive capital costs.
”We continue to find compelling investments with attractive risk-adjusted returns despite some more competitive market conditions.” - Indicates ARCC’s continued capability to identify and capitalize on investment opportunities even in a tough market environment.
