Goldman Sachs BDC Reports Mixed Q2 2024 Results

Goldman Sachs BDC, Inc. recently disclosed its financial results for the second quarter of 2024, showing a mixed performance. The net investment income per share saw a notable increase of 7.3%, rising to $0.59. However, the net asset value per share experienced a decline of approximately 6%, falling to $13.67. The company reported net realized and unrealized losses, largely attributed to markdowns in three key investments. Despite these challenges, GSBD maintained its dividend and highlighted strong origination activity.

### Key Takeaways
– Net investment income per share reached $0.59, up 7.3% from the previous quarter.
– Net asset value per share decreased by approximately 6% to $13.67.
– Markdowns were significant in three investments, including Lithium Technologies and Pluralsight, both of which were placed on non-accrual status.
– A dividend of $0.45 per share was declared for the third quarter.
– Total investments at fair value amounted to $3.5 billion, with $2 billion in debt and net assets of $1.6 billion.
– Adjusted net investment income, excluding asset acquisition accounting effects, stood at $0.57 per share.
– Total investment income for the quarter declined to $108.6 million, down from $111.5 million in the prior quarter.
– The target leverage profile remained at 1.25 times, with the current leverage at 1.09.

### Company Outlook
– Goldman Sachs BDC aims to enhance shareholder value through ongoing capital recycling and investment in attractive opportunities.
– The company is selective in its originations, with a focus on increasing both the number and quality of business deals.
– The Board is committed to sustaining consistent shareholder distributions.

### Bearish Highlights
– A decline in net asset value per share was observed.
– Unrealized losses were significant due to key investment markdowns.
– Total investment income decreased from the previous quarter.

### Bullish Highlights
– Robust origination activity indicates a strong pipeline for future investments.
– EBITDA growth is outpacing top-line growth, reflecting solid operational performance in underlying investments.
– The number of deals and the capital invested has significantly increased compared to the last quarter.

### Misses
– The portfolio yield, on a cost basis, declined due to the impact of non-accruals.
– PIK income as a percentage of total investment income saw a slight decrease.

### Q&A Highlights
– The significant increase in originations and improvements in business quality were emphasized.
– The company maintains a steady interest coverage ratio at 1.5 times and takes a disciplined approach to deal selection.
– GSBD remains comfortable with current PIK income levels despite a slight decrease.

In summary, Goldman Sachs BDC, Inc. has faced challenges with certain investments but continues to pursue growth through active deal origination and capital management strategies. Its steady dividend and careful investment approach highlight its commitment to shareholder value in a fluctuating market environment.