[Management View]
Runway Growth Finance Corp. reported total investment income of $36.7 million for Q3 2025, up from $35.1 million in Q3 2024. Net investment income increased to $15.7 million from $13.9 million YoY. The fair value of the investment portfolio decreased by 7.7% to $946 million. The company announced a NAV-for-NAV merger with SWK Holdings, expected to increase healthcare and life sciences exposure to 31% from 14%.

[Outlook]
Management anticipates the SWK Holdings acquisition to close in early 2026, projecting mid-single-digit run-rate net investment income accretion and modest ROE improvements in the first full quarter post-merger. The company expects repayment activity to normalize and aims to leverage the BC Partners Credit platform for future growth.

[Financial Performance]
- Total Investment Income: $36.7 million (Q3 2025) vs. $35.1 million (Q3 2024)
- Net Investment Income: $15.7 million (Q3 2025) vs. $13.9 million (Q3 2024)
- Fair Value of Investment Portfolio: $946 million (Q3 2025) vs. $1.02 billion (Q3 2024)
- Operating Expenses: $21 million (Q3 2025) vs. $21.2 million (Q3 2024)
- Net Realized Loss on Investments: $1.3 million (Q3 2025) vs. $1.5 million (Q3 2024)

[Q&A Highlights]
Question 1: Given the expected closing date of the SWK merger in 2026, how should we think about origination and repayment activity in Q4?
Answer: Repayments are expected to be muted relative to Q3, with some repayments anticipated in Q4 having occurred in Q3. Origination will utilize the existing pipeline and the broader BC Partners credit platform.

Question 2: Can you give a sense of the yield profile between the existing portfolio and the SWK portfolio post-merger?
Answer: The SWK portfolio has a slightly higher yield than the existing portfolio. Pro formas will be available in the N-14 filing. There may be opportunities to upsize the best loans in the SWK portfolio for organic growth.

Question 3: Which portfolio companies were the main drivers of realized loss and unrealized portfolio depreciation?
Answer: Losses were mainly in the equity portfolio, driven by idiosyncratic factors such as warrant expirations and liquidation of IPO shares at less than carrying cost.

Question 4: What is driving prepayment activity, and do you expect it to continue next year?
Answer: M&A activity and refinancing options with cheaper alternatives are driving prepayments. Normal course prepayments are expected to continue.

Question 5: How do the competitive dynamics and pricing pressures in the venture debt space currently look?
Answer: There has been some spread compression, but not as significant as in broader middle markets. This trend is expected to continue in the current rate environment.

Question 6: How do you plan to integrate the SWK team into your platform?
Answer: The SWK team will assist with transition services, portfolio integration, and new originations. Future retention will depend on ongoing integration requirements.

Question 7: Are the SWK shareholders locked up post-merger?
Answer: There is no specific lockup, but a key shareholder agreement is in place as outlined in SEC filings.

Question 8: Why was there no special distribution despite net investment income per share being higher than the dividend?
Answer: The dividend decision considered the earnings power of the portfolio, anticipated prepayments, and expected interest rate decreases. The base dividend is expected to be covered by Q4 earnings.

Question 9: Can the SWK team make new loans, and do you have any say in these loans?
Answer: Interim operating covenants are in place, and any modifications to loans are worked through with Runway's investment committee.

Question 10: What characteristics made the loan added to the CADMA JV a good fit for that vehicle?
Answer: The loan is a growth loan, similar to Runway loans but better suited for the JV.

Question 11: Can you provide a breakdown of PIK income and its overall level of contribution?
Answer: PIK income is structured based on the cash flow characteristics of the borrower, with a portion of loans having a PIK toggle for one or two years.

Question 12: Do you expect the SWK deal to be accretive in 2026?
Answer: The deal is expected to be accretive in the first full quarter after closing.

Question 13: How will the shares be issued in the merger, based on NAV or share price?
Answer: The merger will be NAV for NAV, with shares issued at current NAV determined forty-eight hours before closing.

Question 14: What stage of development are the typical companies that SWK invests in?
Answer: SWK targets growth-stage companies generating meaningful revenue, similar to Runway's existing healthcare and life sciences portfolio.

[Sentiment Analysis]
Analysts were generally positive, focusing on the strategic benefits of the SWK acquisition and its impact on portfolio diversification and earnings. Management maintained a confident tone, emphasizing growth opportunities and disciplined portfolio management.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 |
|---------------------------------|---------------|---------------|
| Total Investment Income | $36.7 million | $35.1 million |
| Net Investment Income | $15.7 million | $13.9 million |
| Fair Value of Investment Portfolio | $946 million | $1.02 billion |
| Operating Expenses | $21 million | $21.2 million |
| Net Realized Loss on Investments | $1.3 million | $1.5 million |

[Risks and Concerns]
- Potential delays in the SWK merger closing due to government shutdown and SEC approval lag.
- Increased portfolio risk and loan-to-value metrics.
- Competitive dynamics and pricing pressures in the venture debt space.

[Final Takeaway]
Runway Growth Finance Corp. reported strong financial performance in Q3 2025, with significant growth in investment income and net investment income. The pending acquisition of SWK Holdings is expected to enhance portfolio diversification, particularly in the healthcare and life sciences sectors, and drive earnings growth. Management remains focused on disciplined portfolio management and leveraging the BC Partners Credit platform for future growth. While there are some risks related to the merger timeline and competitive pressures, the overall outlook remains positive.