Horizon Technology Finance Corporation

For Q2 2026, Horizon reported investment income of $25 million versus $24.5 million a year ago, and reported NII of $0.11 per share versus $0.28 per share in Q2 2025 and $0.19 per share in Q1 2026. Excluding $4.4 million of nonrecurring merger expenses, NII would have been $0.18 per share. Total expenses were $17.4 million versus $12.7 million in Q2 2025, and NAV per share was $6.23 versus $6.75 a year ago and $6.98 at March 31. The debt portfolio on a net cost basis was $682 million, up 4% from $655 million in Q1, and total portfolio value was $677 million. Looking ahead, management expects another quarter of debt portfolio growth in Q3; the board also declared regular monthly distributions of $0.06 per share and special monthly distributions of $0.03 per share for October, November and December 2026.

Mike Balkin framed the MRCC merger as a major step that significantly expanded available capital and kicked off a new growth phase for Horizon. He said management is investing in underwriting, credit, technology and origination capabilities to build a sustainable, profitable platform that can steadily grow NII and create shareholder value over time. His tone was constructive and confident, though he acknowledged the company still has work to do to execute and deploy capital prudently.

Dan Trolio highlighted a much stronger post-merger balance sheet, with $229 million of available liquidity as of June 30, including $135 million of cash and $94 million available under credit facilities. He said net leverage was 0.65:1, well below target, and potential new investment capacity was $459 million. He also noted $1.4 million shares repurchased at an average price of $4.54, and said the adviser will waive up to $4 million of base management and incentive fees, or $1 million a quarter, starting in Q3 2026. On the P&L, he emphasized that the $4.4 million of merger-related expenses reduced NII by $0.07 per share, and that the portfolio yield was 14.9% versus 15.8% a year ago.

Analysts focused on whether the Soli write-down had broader implications, and Paul Seitz said it was company-specific: the borrower faced fundraising headwinds and Horizon is working to maximize recoveries. Another question asked whether the post-merger platform would push Horizon toward larger deals or more diversification; Seitz said both are in play, including partnering with Monroe on certain deals and taking larger ticket sizes where appropriate. Management emphasized that the expanded platform should support growth, but they also stressed discipline in originating and underwriting.