What guidance did Horizon Technology's management provide for the next earnings period?

What does Horizon Technology do and what are its main business segments?

What is the revenue and EPS growth rate for Horizon Technology year over year?

What is Horizon Technology's gross profit margin?

What were the key takeaways from Horizon Technology's earnings call?

What is Horizon Technology's latest dividend and current dividend yield?

What factors drove the changes in Horizon Technology's revenue and profit?

What were the key takeaways from Horizon Technology’s earnings call?

- **Strategic Merger**: 2026 merger with MRCC to expand assets and leverage Monroe Capital's private credit expertise, targeting larger venture loans.
- **Financial Strength**: NAV up 5% to $7.12, NII of $0.32 per share, and $151 million liquidity support growth. Floating-rate portfolio mitigates interest rate risk.
- **Portfolio Growth**: Q3 originations of $15 million and $23 million in portfolio acquisitions set stage for Q4 expansion. Monroe Capital pipeline access drives deal flow.
- **Yield Sustainability**: Industry-leading 18.6% portfolio yield with onboarding at 12.2%. Post-merger focus on $50M+ loans without yield erosion.
- **Distribution Stability**: Extended monthly distributions through March 2026, supported by $0.93 spillover and disciplined origination strategy.

**【CEO Summary Section】**
- Announced merger with MRCC (Monroe Capital) to be completed in early 2026, subject to shareholder approval. The merger will significantly increase assets under management and leverage Monroe Capital's expertise in private credit lending.
- Generated net investment income (NII) of $0.32 per share for the quarter, matching the declared distribution rate. Board extended monthly distributions of $0.11 per share through March 2026.
- Raised $40 million through issuance of 5.5% convertible notes due 2030 and $10 million via at-the-market (ATM) equity program, strengthening liquidity to $151 million.
- Portfolio yield on debt investments remained industry-leading at 18.6%, with onboarding yields of 12.2%.
- Emphasized strategic focus on originating larger venture loans to high-growth tech and life sciences companies, supported by Monroe Capital's pipeline access.

**【CFO Financial Commentary】**
- Net asset value (NAV) per share increased 5% to $7.12, driven by NII and favorable portfolio adjustments. Undistributed spillover income stood at $0.93 per share.
- Total expenses for the quarter were $12 million, stable year-over-year, with interest expense of $7.9 million and base management fee of $2.7 million.
- Portfolio net leverage ratio of 0.94:1 (below target range of 1.2-1.3x) provides capacity to grow investments by $460 million.
- Floating-rate debt investments (99% of portfolio) mitigate interest rate risk, with 60% already at rate floors.

**【Q&A Key Highlights】**
- **Prepayment Trends**: Q3 saw $61 million in prepayments, but CFO expects normalization in Q4. Exit market activity remains strong, particularly in AI and tech IPOs.
- **Portfolio Yield Sustainability**: CFO noted historical portfolio yield of 14.5-15%, with onboarding yields around 12%. High-yield strategy will continue, but one-time gains from stressed assets (e.g., Soli, Hound Labs) may not recur.
- **Merger Impact**: Post-merger, Horizon will target larger loans (e.g., $50 million+), maintaining similar yield profiles. Monroe Capital's pipeline access will enhance deal flow without diluting returns.
- **Leverage Outlook**: CFO expects net leverage to return to 1.2-1.3x within 1-2 quarters as originations exceed prepayments.
- **Distribution Policy**: Board evaluates distributions quarterly, considering spillover income and portfolio growth. Current spillover of $0.93 per share supports distribution continuity.


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