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Runway Growth Finance Corp. Reports Fourth Quarter and Fiscal Year Ended 2022 Financial Results

Delivered Record Quarterly and Annual Net Investment Income of $18.4 and $59.8 Million, Respectively

Increased Core Leverage Ratio of Portfolio to 97%

Grew Investment Portfolio to Record $1.1 Billion

Conference Call Today, Thursday, March 2 at 6:00 p.m. ET

WOODSIDE, Calif., March 02, 2023 (GLOBE NEWSWIRE) -- Runway Growth Finance Corp. (Nasdaq: RWAY) (“Runway Growth” or the “Company”), a leading provider of flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2022.

Fourth Quarter 2022 Highlights

  • Total investment income of $36.8 million
  • Net investment income of $18.4 million, or $0.45 per share
  • Net asset value of $14.22 per share
  • Dollar-weighted annualized yield on debt investments of 15.5% for the quarter
  • 12 investments completed in new and existing portfolio companies totaling $327.0 million in new commitments including $232.6 million in funded loans
  • Aggregate proceeds of $16.0 million received from principal repayments
  • Declared first quarter 2023 dividend of $0.40 per share, up 11% quarter over quarter
  • Declared a first quarter 2023 supplemental dividend of $0.05 per share

2022 Fiscal Year Highlights

  • Total investment portfolio at year-end 2022 of $1.1 billion at fair value
  • Net investment income of $59.8 million, or $1.46 per share
  • Net asset value (“NAV”) at 12/31/2022 of $576.1 million, or $14.22 per share
  • Total investment fundings of $628.8 million: $401.1 million in 14 new portfolio companies and $227.7 million in 12 existing portfolio companies
  • No credit losses and industry-leading low credit loss ratio of 6 basis points per year on a gross basis and 1 basis point per year on a net (debt and equity) basis, based on cumulative commitments

“Runway Growth delivered its fifth consecutive record quarter, which we believe validates our investment strategy in high quality, late-stage companies,” said David Spreng, Founder and CEO of Runway Growth. “During 2022, Runway continued to prudently deploy leverage achieving its objective range, to unlock increasingly attractive shareholder returns while fueling minimally dilutive growth for our portfolio companies.”

Spreng continued, “Runway Growth’s success speaks to the value of our differentiated and durable model that offers sustainable yield despite market volatility. Increasingly, later-stage companies are turning to Runway Growth to embrace debt as minimally dilutive growth capital as the cost differential between equity expands. Looking to 2023, our funnel remains robust and Runway Growth is confident in our disciplined strategy to drive earnings and long-term shareholder value.”

Fourth Quarter 2022 Operating Results
Total investment income for the quarter ended December 31, 2022 was $36.8 million, compared to $17.6 million for the quarter ended December 31, 2021. The year-over-year improvement is primarily due to portfolio growth and an increase in interest income on investments resulting from the new loans originated.

Net investment income for the quarter ended December 31, 2022 was $18.4 million, or $0.45 per share, compared to $10.9 million, or $0.28 per share, for the quarter December 31, 2021.

The Company's dollar-weighted annualized yield on average debt investments for the quarter ended December 31, 2022 was 15.5%. The Company calculates the yield on dollar-weighted debt investments for any period measured as (1) total investment-related income during the period divided by (2) the daily average of the fair value of debt investments outstanding during the period.

Total operating expenses for the quarter ended December 31, 2022 were $18.4 million, compared to $6.7 million for the quarter ended December 31, 2021. The increase was driven by growing management fees, incentive fees and interest expenses.

Net realized loss on investments for the quarter ended December 31, 2022 was $2.0 million, compared to a net realized gain of $8.2 million for the quarter ended December 31, 2021.

For the quarter ended December 31, 2022, net change in unrealized appreciation on investments was $2.1 million, compared to $0.1 million for the comparable prior year period, due to the increase in fair value of our equity portfolio.

Portfolio and Investment Activity
As of December 31, 2022, Runway Growth’s investment portfolio had an aggregate fair value of approximately $1,126 million and was comprised of approximately $1,094 million in term loans, 99% of which are senior secured loans, and $32.5 million in warrants and equity-related investments in 43 portfolio companies.

During the fourth quarter of 2022, Runway Growth originated 12 investments totaling $327.0 million in commitments, including $232.6 million in funded loans, as well as six investments in new portfolio companies and six new investments in existing portfolio companies.

Total portfolio investment activity for the three and twelve months ended December 31, 2022 and 2021 was as follows:

     Three Months Ended December 31,  Fiscal Year Ended December 31,
  2022  2021  2022  2021 
  (unaudited) (unaudited) (unaudited) (unaudited)
Beginning Investment Portfolio $910,169  $646,353  $729,516  $621,827 
Purchases of Investments  229,883   187,410   622,719   424,441 
Purchases of U.S. Treasury Bills     95,002      210,002 
PIK interest  2,326   568   8,655   2,996 
Amortization of Fixed Income Premiums or Accretion of Discounts  2,287   2,202   6,863   7,742 
Sales or Repayments of Investments  (16,000)  (100,291)  (159,144)  (297,825)
Scheduled Principal Payments of Investments  (2,488)  (105)  (9,754)  (5,777)
Sales and Maturities of U.S. Treasury Bills     (110,000)  (45,000)  (234,999)
Net realized Gain (Loss) on Investments  (2,000)  8,249   (1,061)  4,154 
Net Change in Unrealized Appreciation (Depreciation) on Investments  2,132   128   (26,485)  (3,045)
Ending Investment Portfolio $1,126,309  $729,516  $1,126,309  $729,516 

Net Asset Value
As of December 31, 2022, net asset value (“NAV’”) per share was $14.22, compared to $14.12 as of September 30, 2022. Total net assets at the end of the fourth quarter of 2022 were $576.1 million, down 5% from $606.2 million in the prior year period.

For the quarter ended December 31, 2022, net increase in net assets resulting from operations was $18.5 million, or $0.46 per share, compared to a net increase of $19.3 million, or $0.49 per share, for the quarter ended December 31, 2021.

Liquidity and Capital Resources
As of December 31, 2022, the Company had approximately $93.8 million in available liquidity, including unrestricted cash and cash equivalents, and $88 million in available borrowing capacity under the Company’s credit facility, subject to existing terms, advance rates and regulatory and covenant requirements. Subsequent to quarter end, we increased our credit facility by $50 million, bringing our total available liquidity to $143.8 million, including unrestricted cash and cash equivalents, and borrowing capacity of 138 million under our credit facility and our aggregate facility commitment to $475 million.

The Company ended the quarter with a core leverage ratio of approximately 97%, compared to 60% for the quarter ended September 30, 2022.

On February 23, 2023, the Company’s board of directors declared a regular quarterly distribution of $0.40 per share for the first quarter of 2023, payable on March 21, 2023, to stockholders of record as of March 7, 2023. This dividend represents an increase of 11% over the dividend declared in the prior quarter. In addition, the Board of Directors declared a supplemental dividend of $0.05 per share for the first quarter of 2023 that is also payable on March 21, 2023, to stockholders of record as of March 7, 2023. Runway Growth intends to declare and pay a similar supplemental dividend for each subsequent fiscal quarter during 2023, subject to future approval by the Board of Directors.

Conference Call
Runway Growth will hold a conference call to discuss its fourth quarter and fiscal year ended December 31, 2022 financial results at 3:00 p.m. PT (6:00 p.m. ET) on Thursday, March 2, 2023. To participate in the conference call or webcast, participants should register online at the Runway Investor Relations website. The earnings call can also be accessed through the following links:

A live webcast will be available in the investor section of the Company’s website, and will be archived for 90 days following the call.

About Runway Growth Finance Corp.
Runway Growth is a growing specialty finance company focused on providing flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity. Runway Growth is a closed-end investment fund that has elected to be regulated as a business development company under the Investment Company Act of 1940. Runway Growth is externally managed by Runway Growth Capital LLC, an established registered investment advisor that was formed in 2015 and led by industry veteran David Spreng. For more information, please visit

Forward-Looking Statements
Statements included herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including the impact of COVID-19 and related changes in base interest rates and significant market volatility on our business, our portfolio companies, our industry and the global economy. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Runway Growth’s filings with the Securities and Exchange Commission. Runway Growth undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

IR Contacts:
Stefan Norbom, Prosek Partners,
Thomas B. Raterman, Chief Financial Officer and Chief Operating Officer,

Runway Growth Finance Corp. 
Consolidated Statements of Assets and Liabilities 
(In thousands, except share and per share data) 
     December 31, 2022    December 31, 2021 
Investments at fair value:       
Non-control/non-affiliate investments at fair value (cost of $1,126,879 and $647,449, respectively) $1,114,935  $655,384  
Affiliate investments at fair value (cost of $4,551 and $0, respectively)  2,084     
Control investments at fair value (cost of $19,172 and $34,874, respectively)  9,290   29,131  
Investment in U.S. Treasury Bills at fair value (cost of $0 and $45,001, respectively)     45,001  
Total investments at fair value (cost of $1,150,602 and $727,324, respectively)  1,126,309   729,516  
Cash and cash equivalents  5,761   4,697  
Accrued interest receivable  6,741   2,369  
Other assets  2,955   1,766  
Total assets  1,141,766   738,348  
Credit facilities  337,000   61,000  
2026 Notes  70,000   20,000  
2027 Notes  152,250     
Unamortized deferred debt costs  (10,293)  (1,511) 
Total debt, less unamortized deferred debt costs  548,957   79,489  
Reverse repurchase agreement     44,775  
Incentive fees payable  8,808   6,010  
Interest payable  6,221   249  
Accrued expenses and other liabilities  1,728   1,630  
Total liabilities  565,714   132,153  
Commitments and contingencies (Note 3)         
Net assets         
Common stock, par value  414   414  
Additional paid-in capital  605,774   606,048  
Distributable (losses)  (19,320)  (267) 
Treasury Stock  (10,816)    
Total net assets $576,052  $606,195  
Shares of common stock outstanding ($0.01 par value, 100,000,000 shares authorized)  40,509,269   41,380,614  
Net asset value per share $14.22  $14.65  


 Runway Growth Finance Corp.
 Consolidated Statements of Operations
 (In thousands, except share and per share data)
      Three Months Ended December 31,     Fiscal Year Ended December 31,
   2022  2021  2022  2021 
 Investment income               
 From non-control/non-affiliate investments:               
 Interest income $33,515  $15,684  $95,264  $63,226 
 Payment in-kind interest income  2,310   568   5,558   2,992 
 Dividend income  318   364   1,338   1,395 
 Fee Income  664   964   2,184   3,627 
 From affiliate investments:            
 Interest income        5    
 Payment in-kind interest income        96    
 Fee Income        8    
 From control investments:            
 Interest income        1,112   113 
 Payment in-kind interest income        2,985   4 
 Other income        2   1 
 Total investment income  36,807   17,580   108,552   71,358 
 Operating expenses            
 Management fees  3,394   2,342   11,882   8,989 
 Incentive fees  4,592   2,733   13,183   9,232 
 Interest expense  7,685   251   13,756   2,554 
 Professional fees  745   329   2,815   1,844 
 Overhead allocation expense  307   172   1,020   827 
 Insurance expense  210   270   1,016   339 
 Administration fee  160   159   658   579 
 Debt financing fees  779   150   3,005   1,638 
 Directors' fees  91   92   352   293 
 Tax expense  290      291   1 
 Other expenses  194   154   778   570 
 Total operating expenses  18,447   6,652   48,756   26,866 
 Net investment income  18,360   10,928   59,796   44,492 
 Realized and unrealized gain (loss) on investments            
 Realized gain (loss) on non-control/non-affiliate investments, including U.S. Treasury Bills     8,249   939   4,172 
 Realized gain (loss) on control investments  (2,000)     (2,000)   
 Net realized gain (loss) on investments  (2,000)  8,249   (1,061)  4,172 
 Net change in unrealized appreciation (depreciation) on non control/non-affiliate investments, including U.S. Treasury Bills  (4,594)  (5,252)  (18,870)  (16,231)
 Net change in unrealized appreciation (depreciation) on affiliate investments  (97)     (3,476)   
 Net change in unrealized appreciation (depreciation) on control investments  6,823   5,380   (4,139)  13,186 
 Net change in unrealized appreciation (depreciation) on investments and U.S. Treasury Bills  2,132   128   (26,485)  (3,045)
 Net realized and unrealized gain on investments  132   8,377   (27,546)  1,127 
 Net increase in net assets resulting from operations $18,492  $19,305  $32,250  $45,619 
 Net increase in net assets resulting from operations per common share $0.46  $0.49  $0.79  $1.33 
 Net investment income per common share $0.45  $0.28  $1.46  $1.30 
 Weighted-average shares outstanding  40,531,403   39,593,658   40,971,242   34,183,358 

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