Hercules Capital Reports Increased Investment Income and Asset Growth in Q2 2025

Hercules Capital, Inc. reported a significant increase in its financial performance for the second quarter of 2025, with total investment income reaching $137.5 million, up from $125.0 million in the same period last year. For the six months ended June 30, 2025, total investment income was $257.0 million, compared to $246.6 million for the first half of 2024. The company's net investment income for the quarter was $88.7 million, a rise from $82.4 million year-over-year, while net investment income for the six-month period was $166.2 million, slightly up from $161.5 million in 2024. The net increase in net assets resulting from operations was $78.9 million for the quarter, compared to $41.9 million in the prior year, and $129.2 million for the six months, down from $132.8 million.

The company’s total assets increased to $4.3 billion as of June 30, 2025, compared to $3.8 billion at the end of 2024. This growth was primarily driven by an increase in investments at fair value, which rose to $4.2 billion from $3.7 billion. Hercules Capital's debt obligations also increased, with total liabilities reaching $2.1 billion, up from $1.8 billion at the end of the previous fiscal year. The net asset value per share increased to $11.84, compared to $11.66 at the end of 2024, reflecting a positive trend in the company's financial health.

Strategically, Hercules Capital has been active in expanding its investment portfolio, with total investment commitments originating at $2.0 billion for the first half of 2025, compared to $1.6 billion in the same period of 2024. The company reported net total debt commitments of $1.6 billion, with new portfolio company investments contributing significantly to this figure. Additionally, Hercules Capital has maintained a strong focus on sectors such as software, drug discovery, and healthcare services, which collectively represented a substantial portion of its investment portfolio.

Operationally, Hercules Capital's portfolio remains robust, with approximately 97.8% of its debt investments linked to floating interest rates, providing a hedge against rising interest rates. The company also reported a weighted average cost of debt of 5.0% for the quarter, consistent with the previous year. As of June 30, 2025, Hercules Capital had approximately $785.6 million in available liquidity, including cash and cash equivalents, and a significant borrowing capacity under its credit facilities.

Looking ahead, Hercules Capital expressed optimism about its ability to navigate the current macroeconomic environment, which includes challenges such as inflation and geopolitical tensions. The company plans to continue leveraging its strong liquidity position to pursue new investment opportunities while managing its existing portfolio effectively. The board has declared a cash distribution of $0.40 per share, along with a supplemental cash distribution of $0.07 per share, reflecting the company's commitment to returning value to its shareholders.