MidCap Financial Investment Corporation

Please stand by. Your meeting is about to begin. Good morning, everyone. Welcome to the earnings conference call for the period ended December 31st, 2025 for MidCap Financial Investment Corporation. At this time, all participants have been placed in a listen-only mode. The call will be open for a question and answer session following the speaker's prepared remarks. If you would like to ask a question at that time, simply press star one on your telephone. If you would like to withdraw your question, press star two. I will now turn the call over to Ms. Elizabeth Besson, Investor Relations Manager for MidCap Financial Investment Corporation. Please go ahead, ma'am.

Elizabeth Besson Thank you, operator, and thank you, everyone, for joining us today. We appreciate your interest in MidCap Financial Investment Corporation. Speaking on today's call are Tanner Powell, Chief Executive Officer, Ted McNulty, President and Kenny Seifert, Chief Financial Officer. Howard Widra, Executive Chairman, and Greg Hunt, our former CFO who currently serves as a Senior Advisor, are on the call and available for the Q&A portion of today's call. I'd like to advise everyone that today's call and webcast are being recorded. Please note that they are the property of MidCap Financial Investment Corporation and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our press release. I'd also like to call your attention to the customary safe harbor disclosure in our press release regarding forward-looking information. Today's conference call and webcast may include forward-looking statements. You should refer to our most recent filings with the SEC for risks that apply to our business and that may adversely affect any forward-looking statements we make. We do not undertake to update our forward-looking statements or projections unless required by law. To obtain copies of our SEC filings, please visit either the SEC's website at www.sec.gov or at our website at www.midcaffinancialic.com. I'd also like to remind everyone that we've posted a supplemental financial information package on our website, which contains information about the portfolio as well as the company's financial performance. Throughout today's call, we will refer to MidCap Financial Investment Corporation as either MFIC or the BDC, and we will use MidCap Financial to refer to the lender headquartered in Bethesda, Maryland. At this time, I'd like to turn the call over to Tanner Powell, MFIC's Chief Executive Officer.

Thank you, Elizabeth. Good morning, everyone, and thank you for joining us for MidCap Financial Investment Corporation's fourth quarter and year-end earnings conference call. Yesterday, after market close, we issued our press release and filed our annual form 10-K for the period ended December 31st, 2025. I'll begin today's call with an overview of MFIC's fourth quarter results, followed by a discussion of our share repurchase activity, including the board's increased authorization, as well as our dividend announcement. Following that, I'll hand the call over to Ted, who will walk through our investment activity for the quarter and provide a portfolio update, including a review of our software exposure. Kenny will then review our financial results in detail. Net investment income, or NII, per share for the quarter was $0.39. Gap net loss per share for the quarter was $0.14. This figure includes approximately $0.04 of one-time financing-related expenses. When excluding these one-time costs, GAAP net loss per share was $0.10 for the quarter. NAV per share was $14.18 at the end of December, down 3.3% compared to the prior quarter. The decline in NAV is primarily driven by a handful of investments predominantly from 2022 and earlier ventures. Despite the loss for this quarter, we believe our focus on first-lane positions Our cautious usage of PIC and low software exposure keep us well-positioned. Additionally, recent paydowns from Merckx and the full repayment of a position on non-accrual demonstrate our ability to maximize recoveries on challenge credits. During the December quarter, MFIC made $141 million of new commitments across 26 transactions. Net funded activity for the quarter was positive $25 million, which included a $7.5 million repayment from Merckx. At the end of December, MFIC's investment in Merck's totaled approximately $103 million at fair value, representing 3% of the portfolio fair value. Thus, going to quarter end in February, Merck's repaid an additional $22 million to MFIC for a total amount of $29.5 million. Let me remind you about what remains in Merck's. MFIC's remaining investment in Merck's consists of four aircraft, plus the value associated with Merck's servicing platform. Merck turns income through its servicing activities from Navigator, Apollo's dedicated aircraft leasing fund, which currently owns 38 aircraft. Having deployed its equity commitments, Navigator is in the harvest period, and as such, the fund is opportunistically monetizing assets to optimize fund-level returns. Merck receives a remarketing fee on each aircraft sale. At the end of December, the servicing business represented approximately 29% of the total value of Merck's. The servicing component of Merck's will naturally decline as servicing income is received. Moving on, Apollo's longstanding commitment has been to deliver positive outcomes in all instances where we manage investor capital. With respect to the public vehicles we manage across different asset classes, we have been active in evaluating potential strategies and options with the objective of maximizing realizable value for stockholders. During the fourth quarter, the market presented us with what we viewed as an attractive opportunity to repurchase our stock at a significant discount to NAV. purchased approximately 1.1 million shares at an average discount of 18% for an aggregate cost of $12.9 million, generating approximately $0.03 per share of NAV accretion. At these trading levels, we continue to believe allocating capital towards stock repurchases is more creative than deploying capital into new investments. Accordingly, the Board has authorized a new $100 million stock repurchase plan. which we expect to utilize aggressively in combination with a 10B51 trading plan to capitalize on what we believe is a compelling opportunity for our stockholders. This is in addition to our existing share of purchase authorization, of which approximately $7.9 million of purchase capacity remains. Accordingly, MFIC now has $107.9 million available stockholders. If the current discount continues and the trading volumes remain in their current range, we anticipate fully utilizing our current authorization by late May. Importantly, we believe MFIC's investment portfolio is extremely well positioned, consisting of primarily true first lien loans with granular position sizes and limited ticket software exposures. We remain convinced that the current market price does not appropriately reflect the intrinsic value of MFIC's high-quality investment. We do not anticipate these stock purchases will result in any material increase in our net leverage given our visibility into expected repayments. Moving to the dividend, in light of the change in space rates and other factors, we have reassessed the long-term earning power of the company, and the Board has concluded that it was prudent to adjust the dividend at this time. Accordingly, on February 25, 2026, our Board of Directors declared a quarterly dividend of $0.31 per share for stockholders' record as of March With that, I will now turn the call over to Chad.