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- **Capital Return Focus**: Returned $52 million to shareholders via dividend and buybacks, simplifying the business to focus on high-yield loans.
- **Stable Financial Performance**: Q2 non-GAAP net income of $4.6 million reflects reduced expenses (46% YoY decline) and stable loan book.
- **Disciplined Market Approach**: Avoiding excessive risk in competitive private credit market, with cautious capital deployment.

**【CEO Summary Section】**
- Completed sale of majority royalty assets and MOD3 subsidiary for approximately book value, returning $49 million to shareholders via a $4 per share dividend and $3 million through share buybacks.
- Remaining assets include $234 million in performing loans (14.1% yield), nonperforming reorg royalties, and private warrants; GAAP book value per share is $20.23, up 11.7% year-over-year after dividend.
- Q2 non-GAAP adjusted net income of $4.6 million, with a stated run rate expectation for future quarters.
- Sold MOD3 assets to Aptar for $6.9 million, with no recurring costs post-transition services agreement (ending mid-September).

**【CFO Financial Commentary】**
- GAAP pretax net income of $4.6 million ($0.37 per share), driven by $1.2 million decrease in finance receivables revenue (due to asset sales and paydowns) and $500,000 increase in pharmaceutical segment revenue.
- Operating expenses decreased 46% year-over-year to $5.4 million, with finance segment expenses down 43% to $4.2 million (driven by $3.3 million reduction in credit loss provisions).
- Repurchased 68,000 shares for $1.3 million during and after Q2, maintaining disciplined capital allocation.

**【Q&A Key Highlights】**
- **MOD3 Transition Costs**: No recurring costs post-sale; third-quarter noise from transition services agreement will be reimbursed, with ongoing SG&A expected to stabilize at ~$2 million.
- **FDA Regulatory Impact**: Minimal portfolio exposure; specialty pharma borrowers (e.g., rare disease, cash-pay dermatology) have limited pricing risk; one CDMO sees minor impact from NIH funding cuts.
- **Private Credit Market Competition**: Maintaining disciplined deployment; added to existing borrowers and made one new loan, avoiding excessive risk in a crowded market.

SWK Holdings Corporation (SWKH) Q2 2025 Earnings Call Transcript

Finance Receivable Interest Income, Including Fees

Pharmaceutical Development

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