Monroe Capital Corp Misses Earnings Estimate, Revenue Falls Short at $9.9 Million; Announces Merger with Horizon Technology Finance Corporation and Asset Sale to Monroe Capital Income Plus Corporation.

Monroe Capital Corp reported Q2 net investment income of $3.3 million, or $0.15 per share, missing analyst estimates of $0.23 per share. The company's net asset value decreased to $179.6 million, or $8.29 per share, from $186.9 million, or $8.63 per share, in the previous quarter. Despite financial headwinds, Monroe maintained a quarterly dividend of $0.25 per share and announced a merger with Horizon Technology Finance Corporation.

Monroe Capital Corp (MRCC) reported its second-quarter (Q2) 2025 results, revealing a decline in net investment income and net asset value (NAV). The company's net investment income (NII) for the quarter was $3.3 million, or $0.15 per share, falling short of analyst estimates of $0.23 per share [1]. The NAV decreased to $179.6 million, or $8.29 per share, from $186.9 million, or $8.63 per share, in the previous quarter [2].

Despite these financial headwinds, Monroe Capital maintained its quarterly dividend at $0.25 per share, representing a 14.6% annual yield [2]. The company attributed the decline in NII to lower average invested assets and effective rates, as well as a decrease in other fee income and dividend income from the MRCC Senior Loan Fund I, LLC (SLF) [2].

Monroe Capital also announced a merger with Horizon Technology Finance Corporation (HRZN), pending shareholder approvals. The merger is expected to unlock shareholder value through synergies and operating leverage benefits. The company plans to sell its investment assets at fair value to Monroe Capital Income Plus Corporation (MCIP) prior to the merger closing [2].

The merger comes at a critical juncture for Monroe Capital, as it faces deteriorating financial metrics, including a decline in NAV and portfolio quality. The company's debt-to-equity leverage improved to 1.17x from 1.45x, primarily through portfolio realizations used to pay down its revolving credit facility [2].

The stock recently traded at 9 times the next 12-month earnings, compared to a P/E of 7 three months ago. Analysts have a median 12-month price target of $8.25, about 17% above its August 8 closing price of $6.85 [1].

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_PLXD5548D:0-monroe-capital-q2-net-investment-income-falls-to-3-3-mln/
[2] https://www.stocktitan.net/news/MRCC/monroe-capital-corporation-bdc-announces-second-quarter-2025-results-fftr2zylnuno.html