Flow Capital Corp.

Good morning, ladies and gentlemen. Welcome to Flow Capital's earnings call for Q1 2025. At this time, all participants are NILUS in only mode. Following the presentation, we will conduct a question and answer session. Note that instructions will be provided at that time for you to queue up for questions. And if anyone has difficulties hearing the conference, you may press star zero for operator assistance at any time. I would like to remind everyone that today's discussions may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. For more information on Flow Capital's risks and uncertainties related to these forward-looking Please refer to the Q1 2025 Companies Management Discussion and Analysis, which is available on CEDAR. Today's call is being recorded on Thursday, May 15, 2025. I would now like to turn the meeting over to Alex Politic, Chief Executive Officer of Flow Capital. Please go ahead, sir.

Thank you very much, Sylvie, for that excellent intro. And thank you, everybody, for dialing in or likely listening on the recording. Yesterday after close, we released our Q1 2025 financial results. I'm joined today by my CFO, Michael Denny. You can find our results as usual. And as Sylvie said, either on our website or as filed on CEDAR, including a transcript of this call. Q1 was another very strong quarter for us. Loan interest revenue was up 45% year over year to 2.9 million. That is up .2% from Q4. And by the way, this will be a relatively short call today as we just recorded Q4 about two weeks ago for Q4 Fiscal 2024. And today is it's really a relatively benign update, other than continued growth in our revenue and profitability. No real material events happened in the quarter. Nevertheless, revenue was up 45% year over year to 2.9 million. It was up .2% sequentially. Recurring free cash flow, which I will repeat is a non IFRS metric, but it is the key metric that we use to track our business. Recurring free cash flow was up 104% to a record 847,000. I'll just point out that last year for the full year, we did about 1.9 million in recurring free cash flow. And here in Q1, we've already done 847,000. That recurring free cash flow per share is about 2.8 cents for the quarter. I will come back to that in a moment. Total assets were up 13% to 74 million. We deployed $3.2 million in Canadian dollars in new loan capital during the quarter. We had no repayments. All of that $3.2 million was into existing companies, which I think I mentioned on the past call is a fairly big trend where we continue to invest in our best performing companies as they grow because our capital is an excellent source of additional capital to fuel their growth. Our book value is up 2 cents to $1.22 per share from $1.20 in Q4. This quarter marks the seventh quarter of sequential revenue growth. As I said, up 8% from the prior quarter marks our 23rd sequential quarter of positive free cash flow. In this quarter, we reached a record 847,000. And as I talked about, I would strongly encourage you, if you're interested, to go and listen to the Q4 recording from 2024. I talked about our operating leverage increasing over time. Since 2020 in the Q4 numbers, if you look at fiscal 2020 versus fiscal 2024, revenue was up 75% over that period, but free cash flow was up 182. And we're still at about 39% over that same time period. And quite frankly, our NER on an aggregate basis is still probably double what we think we can get to in the longer term, maybe even more, which suggests that there continues to be a lot of operating leverage in our business that as we grow and scale our business, we'll see impacting our numbers. So as I mentioned on the Q4 call, it's a fantastic business. What we do, which is venture debt or growth venture debt, we focused on lending money to high growth companies. And really the key metric we look at besides intensity, diligence, quality in customers and management and all those other things is growth. We're really well suited for asset-like companies that are growing at 15% or 20% or more. So excellent quarter, no changes in the portfolio valuation from Q4 on either the loan side or on the equity side. Pipeline remains while lumpy, as I mentioned on the Q4 call, relatively robust. And we're happy with the progress of the business. One of the things I want to mention, I don't usually talk about it, but we are trading today at less than seven times free cash flow if you annualize Q1 and less than or just about three times EBITDA, again, if you're annualizing Q1 performance. And that's at a company growing over 45% on a -over-year basis. So I'm going to pause it there and see if we have any questions from our audience. But yeah, thank you. Let's just pause there.

Thank you, sir. Ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone. You will hear a prompt that your hand has been raised. And should you wish to decline from the polling process, please press

star followed by two. Please go ahead and press star one now if you have any questions. And at this time, sir, it appears we have no questions. Please proceed.

Thank you, Sylvie. Thank you, everybody, for listening to the call. Again, a very abbreviated call. We just had a very detailed call not more than two weeks ago for Q4. Q1 continues the trend of Q4. And as usual, we appreciate your following, appreciate your interest. If you have any questions, please feel free to call or email at any time. And we look forward to speaking to you again in three months with our Q2 numbers. Thank you very much, everybody, and thank you, Sylvie.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Enjoy the rest of your day.