NexPoint Capital Reports 18.3% Increase in Investment Income for Q2 2025

NexPoint Capital, Inc. reported its financial results for the second quarter of 2025, revealing a total investment income of $548,557, a 18.3% increase from $463,895 in the same period last year. For the six months ending June 30, 2025, total investment income rose to $1,198,573, compared to $995,930 in the prior year. The company recorded net investment income before income taxes of $215,814 for the quarter, significantly up from $93,972 in the previous year, while net investment income for the six months was $484,806, compared to $221,430 in 2024. However, the company faced substantial unrealized losses, leading to a net decrease in net assets resulting from operations of $(2,294,152) for the quarter and $(3,369,091) for the six months.

In terms of expenses, NexPoint Capital incurred total expenses of $477,906 for the quarter, a slight decrease from $498,015 in the same quarter of 2024. The company’s net expenses after taxes were $332,743, down from $369,923 in the previous year. The decrease in expenses was attributed to lower investment advisory fees, which amounted to $195,833 for the quarter, compared to $219,104 in the prior year. The company also waived or recouped expenses totaling $(145,163) during the quarter, which contributed to the overall reduction in net expenses.

Operationally, NexPoint Capital's investment portfolio as of June 30, 2025, had a total fair value of $39,599,180, down from $44,527,127 at the end of 2024. The portfolio consisted of 24 investments, with 13% in senior secured loans, 38.5% in common stocks, 27.2% in preferred stocks, and 20.8% in LLC interests. The company did not make any new long or short investments during the first half of 2025, but it generated $1,403,684 from sales and principal repayments of long investments. The weighted average cost price of the debt investments in the portfolio was $97.15, with an estimated gross annual portfolio yield of 9.7%.

Looking ahead, NexPoint Capital aims to continue focusing on generating high current income and long-term capital appreciation through investments primarily in middle-market companies, particularly in the healthcare sector. The company has emphasized its strategy of leveraging the expertise of its adviser to identify attractive investment opportunities while managing risks associated with its portfolio. The outlook remains cautious due to the potential impact of market conditions on the value of its investments, particularly in light of the significant unrealized losses reported in the current period.