TriplePoint Venture Growth BDC Corp.

Good afternoon, ladies and gentlemen. Welcome to the Triple Point Venture Growth BDC Core First Quarter 2025 Earnings Conference Call. At this time, all lines have been placed in a listen-only mode. After the speaker's remarks, there will be an opportunity to ask questions, and instructions will follow at that time. This conference is being recorded, and a replay of the call will be available in an audio webcast on the Triple Point Venture Growth website. Company management is pleased to share with you the company's results for the first quarter of 2025. Today representing the company is Jim LeBay, Chief Executive Officer and Chairman of the Board, Sajal Srivastava, President and Chief Investment Officer, and Mike Wilhelms, Chief Financial Officer. Before I turn the call over to Mr. LeBay, I'd like to direct your attention to the customary safe harbor disclosure in the company's press release regarding forward-looking statements and remind you that during this call, management will make certain statements that relate to future events or the company's future performance or financial condition, which are considered forward-looking statements under federal securities law. You are asked to refer to the company's most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements. The company does not undertake any obligation to update any forward-looking statements or projections unless required by law. Investors are cautioned not to place undue reliance on any forward-looking statements made during the call, which reflects management's opinions only as of today. To obtain copies of our latest SEC filings, please visit the company's website at www.tpvg.com. Now I'd like to turn the conference over to Mr. LeBay.

Thank you, operator. Good afternoon, everyone, and welcome to TPBG's first quarter earnings call. Following some positive developments in the venture markets in the fourth quarter, venture capital deal-making continues to absorb and assess the uncertainties over tariffs and the broader equity market sell-off and macroeconomic volatility and the impacts that all of these have on their portfolio companies. With that said, Investment activity remains underway and we're experiencing strong demand from quality venture growth companies, some of which is fueled by this market. Given this backdrop, we continue to remain selective and capitalize on attractive lending opportunities, particularly in the sectors we're focused on, as we stay on our course of portfolio diversification and investment sector rotation. We also remain focused on proactively managing the portfolio and maintaining our strong liquidity to position TPVG for the future. Q1 signed term sheets with venture growth stage companies at our sponsor, TriplePoint Capital, finished strong and marked the second consecutive quarter of more than 300 million in signed term sheets at venture growth stage companies. It now totals almost $640 million during the last two quarters. Debt commitments to TPVG also increased in Q1, as new debt commitments to venture growth stage companies in the quarter reached two-year highs, and this strong pace continues into this quarter. Fundings for the quarter landed at $28 million. And while we're only slightly past one-third of the way into the current second quarter, we've already funded more than $50 million. The Q2 fundings to date compare favorably with our quarterly fundings guidance, and we believe starts to reflect the early results of the increases we're experiencing in these signed term sheets, commitments, fundings, and pipelines. as well as the increasing investment activity by our select venture capital investors over the last few quarters. Activity in our market is being driven both by the entrepreneurs and the investors who increasingly recognize venture lending as a strategic tool. Some drivers behind the increasing demand we're experiencing, including the mounting backlog of high-quality companies in the IPO queue waiting for public markets to reopen, quality growth stage companies pushing off timing of their next equity financing round, companies executing on their growth plans, those seeking financing for creative and opportunistic acquisitions. And given these market volatilities, quality companies previously without debt who are turning increasingly towards debt as part of their financing and capitalization strategies in this market. Going forward, we expect this strengthening demand for venture lending to continue throughout the year, fueling our expectations of renewed portfolio growth in 2025, as these venture growth companies seek strategic financing for these reasons and amid the fluctuating capital markets and macroeconomic uncertainties. During the quarter, We generated net investment income of 27 cents per share and declared our regular 30 cent per share dividend. We're pleased with the pace of our signed term sheets and fundings to date and recognize that portfolio growth as well as prepayment activity over the course of the year will have a material impact on our ability to cover our distribution. We will continue to be mindful of both as the year progresses. Turning to the portfolio, for the first quarter, there were no credit downgrades and there was one upgrade. No new companies were added to the watch list. We will continue to be vigilant during these market conditions and will discuss credit in more detail shortly. One portfolio note to address are these tariffs. which continue to be unpredictable and whose changing nature make it a difficult exercise to fully assess the impact on our portfolio. Based on our analysis of the portfolio and subject to any future tariff announcements and implementation changes, which are evolving daily and subject to country-specific negotiations, we believe we have a small handful of TPVG companies with exposure. and primarily those consumer and e-commerce businesses sourcing from overseas, which Sajal will cover in more detail. Aside from this, we've been following our well-prescribed path of portfolio diversification and industry sector rotation, continuing to actively add new borrowers in durable, high-potential sectors such as AI. Many companies we added to our portfolio this past quarter are reflective of this investor shift towards AI, including Tetra Science, ThoughtSpot, and AirDew. Tetra Science is an AI native data management solution for scientific use cases. ThoughtSpot is an AI analytics platform for all enterprises. And AirDew is accelerating the performance of large AI models in infrastructure. We're excited by the market opportunity AI presents, and believe AI will be a massive megatrend that persists for many years to come. Other companies reflecting our continued diversification and investment sector rotation include those operating in innovative and specialized software solutions, deep tech, machine learning, robotics, cybersecurity and satellite technologies, InsurTech, FinTech, HealthTech, and others. All these sectors offer exciting investment opportunities and are experiencing strong investment momentum. As we've stated on past calls, our focus in these new sectors continues to be on companies that have recently raised capital, have ample cash runways, backing from our select venture capital investors and prudent management teams with business models that have attractive unit economics and high retention rates, We continue to place an emphasis on today's stronger companies and opportunities in this market, including better capitalized growth stage companies, those with higher levels of revenues, promising growth trajectories, visibility to profitability, and business models reflective of today's venture market conditions and valuations. We also continue to factor in and consider both potential tariff issues that could be faced and the possibility of any future macroeconomic recessionary effects when evaluating prospects as well, including actively avoiding sectors that are experiencing first-order direct effects from tariffs or government spending reductions. While we'll continue to maintain our capital discipline and opt for quality over quantity, Given the market conditions and the pickup and investment activity by our select venture investors, we see increased deployment of our capital and venture growth stage investments, concentrating solely on our investment sectors of focus, as well as increasing portfolio developments through the year, all of which we believe will enable us to continue to execute on our plan to increase TPVG scale, durability, portfolio diversification, and income generating assets with the objective to grow the portfolio. With that, let me turn the call over to Sajo.

Thank you, Jim, and good afternoon. Regarding investment portfolio activity during Q1, TriplePoint Capital signed $315 million of term sheets with venture growth stage companies, compared to $130 million of term sheets in Q1 2024 and $323 million in Q4. With regards to new investment allocation to TPVG during the first quarter, we allocated $77 million in new commitments with five companies to TPVG, compared to $10 million in Q1 2024 and $72 million in Q4. 80% of the commitments made during the first quarter were to new portfolio companies in the AI and enterprise software sectors, reflecting our focus on obligor diversification and sector rotation. During the first quarter, we funded $28 million in debt investments to five companies, as compared to $14 million to three companies in Q1, and $50 million to three companies in Q4. These funded investments carried a weighted average annualized portfolio yield of 13.3%, down slightly from 13.5% in Q4. TBVG was at the low end of our guided range for fundings, primarily due to timing, with a number of fundings occurring immediately after quarter end, as demonstrated by our 50 million of fundings already here in the second quarter. During Q1, we had 17 million of loan prepayments, primarily for more season loans, resulting in an overall weighted average portfolio yield of 14.4% as compared to core portfolio yield of 14.1%, excluding prepayments, which was slightly down from core portfolio yield of 14.2%, excluding prepayments in Q4. Four portfolio companies with debt outstanding raised $137 million during the quarter, compared to six portfolio companies raising $96 million in Q4. As of quarter end, we held warrants in 102 companies and equity investments in 48 companies, with a total fair value of $117 million flat from Q4. As Jim mentioned, no new companies were added to our credit watch list during the quarter, and the weighted investment ranking of our debt investment portfolio was 2.12 as compared to 2.27 as at the end of the prior quarter. One company, Dofitteri, was upgraded from Category 3 to Category 2 as part of its announced merger with Lucchiero, where our loans were assumed in full and extended. The combined business, which will continue to focus exclusively on European markets, announced they are projected to generate over $130 million in revenues this year. We continue to have the same five companies in our Category 4 ranking. These are not new situations or reflective of our recent originations. These are companies that we generally identified years ago as challenged, and we continue to work with them and their investors to target profitability, liquidity, and or exit events. With regards to tariffs, as Jim mentioned, although the situation is evolving, we have reviewed our portfolio to identify those companies potentially impacted and continue to monitor the potential near-term and long-term impact. We have not seen any impact to our AI, software, B2B, and enterprise-focused portfolio companies and believe that the risk, if any, lies with our consumer and e-commerce companies. We benefit from the fact that many of our consumer and e-commerce companies are either European companies primarily selling in Europe or U.S. companies that source locally. The few US and European companies that we have determined may have some US tariff exposure are primarily companies that source their products throughout Asia and sell in the US. Most of them are actively working to see if there are opportunities to change their supply chains and source products in lower tariff regions, increase pricing, and or expand their sales outside of the US. We expect to know more as the administration's long-term approach is solidified, but we, as of yet, have not seen any material business impact to these few companies, but they are all preparing for it. On a more broader basis, we are seeing a significant increase in the volatility in the market and macro activity. As of yet, we have not seen material changes in venture capital equity investment activity from traditional venture capital investors. Although there was optimism earlier in the year that the IPO and M&A markets would open soon in 2025, we believe that the capital markets are closed for the time being, which is creating increased demand for investment capital, including debt financing. We expect more will be known over the course of the year, but as Jim mentioned, we continue to see and manage our pipeline in a disciplined fashion and probe prospective companies and the potential impact of these sources of volatility on their businesses as we determine whether they are worthy of our capital. As we step back, we saw improving market conditions in the venture capital market in the first quarter, both from a deal activity basis and from an equity fundraising perspective, and believe those events will bode well for the outlook for our obligors and their credit quality. But given the recent volatility and the geopolitical uncertainty, we will continue to real-time assess portfolio company performance and outlook over the course of the year and update our marks and values accordingly. During the quarter, we also participated in Revolut's secondary process, selling 2.3 million of our holdings, resulting in a realized gain of 2.3 million on our initial investment. The secondary process was originally announced in August 2024 at a $45 billion valuation, primarily for Revolut employees. We continue to hold $34.4 million of warrants and equity at fair value in Revolut. As some of our investors may be aware, Revolut just filed its annual financials in April and announced revenues of $4 billion, up 72%, and net profit of $1 billion, roughly double from 2023. In closing, we remain focused on executing our plan for position TBVG for 2025 and beyond by building overall scale, diversification, and durability, targeting well-positioned and well-capitalized new customers in attractive sectors and increasing the pace of new commitments and investment fundings. We will remain disciplined and mindful of the volatile market environment as we continue along the path with the goal of driving TPBG's earning power over the course of 2020. With that, I will now turn the call over to Mike.