New Mountain Finance Corporation Announces December 31, 2025 Financial Results
Reports Fourth Quarter Net Investment Income of $0.32 per Share and Declares a First Quarter Distribution of $0.32 per Share
New Mountain Finance Corporation (NASDAQ:NMFC) ("New Mountain," "New Mountain Finance" or the "Company") today announced its financial results for the quarter and year ended December 31, 2025.
Fourth Quarter and Recent Highlights1
- Net investment income of $33.0 million, or $0.32 per weighted average share
- Net asset value of $11.52 per share compared to $12.06 per share as of September 30, 2025
- Signed a definitive agreement (the "Secondary Sale") to sell $477 million of assets to a third party at 94% of December 31, 2025 fair value for the purposes of increasing portfolio diversification, reducing PIK income and enhancing financial flexibility
- New Mountain plans to permanently reduce NMFC's incentive fee to 15% over an 8% hurdle at the expiration of the dividend protection program, effectively making the program permanent
- ~95% of the portfolio is rated green on our internal heatmap
- Improved asset mix with senior oriented asset mix around 80%, compared to 75% as of December 31, 2024
- Declared a first quarter 2026 distribution of $0.32 per share, payable on March 31, 2026, to holders of record as of March 17, 2026
- Given continued base rate compression, lower market spreads and an increasingly senior asset mix, we expect to reduce the dividend to $0.25 per share, starting in Q2 of 2026, representing a pro forma yield of ~12% at our current stock price and ~9% yield at our estimated book value post Secondary Sale
($ in millions, except per share data) |
|
Q4 2025 |
|
Q4 2024 |
||||
Net Investment Income per Weighted Average Share |
|
$ |
0.32 |
|
|
$ |
0.32 |
|
Regular & Supplemental Dividends Paid per Share in Quarter |
|
$ |
0.32 |
|
|
$ |
0.33 |
|
Annualized Dividend Yield2 |
|
|
15.7 |
% |
|
|
10.7 |
% |
|
|
December 31, 2025 |
|
September 30, 2025 |
||
Investment Portfolio3 |
|
$ |
2,755.5 |
|
$ |
2,957.1 |
NAV per Share |
|
$ |
11.52 |
|
$ |
12.06 |
Statutory Debt/Equity4 |
|
1.26x |
|
1.26x |
||
Statutory Debt/Equity (Net of Available Cash)4 |
|
1.21x |
|
1.23x |
||
Management Comments on Fourth Quarter Performance
"In Q4, NMFC covered its dividend, despite tight credit spreads in the market generally," said Steven B. Klinsky, NMFC's Chairman and New Mountain Capital CEO. "We are taking proactive steps to strengthen NMFC, including voluntarily reducing our incentive fees, and completing asset sales at valuations meaningfully above where our stock trades. We remain committed to maintaining credit discipline and serving our shareholders."
John R. Kline, NMFC CEO, added: "We believe that the $477 million asset sale represents a positive catalyst for our business as we seek to reduce PIK income, diversify our portfolio and allocate capital to both new loans and stock buybacks. Since the end of Q3, NMFC has repurchased $30 million worth of shares and we expect repurchases to continue in 2026, underscoring our confidence in NMFC's long-term value."
Portfolio and Investment Activity3
As of December 31, 2025, the Company's NAV1 was $1,182.2 million and its portfolio had a fair value of $2,755.5 million of investments in 114 portfolio companies, with a weighted average YTM at Cost5 of approximately 10.5%. For the three months ended December 31, 2025, the Company originated $29.5 million of investments6, offset by $139.7 million of repayments6 and $55.2 million of sales.
Portfolio and Asset Quality
NMFC's mandate is to primarily target businesses in the middle market that, consistent with New Mountain's private equity platform, are high quality, defensive growth companies in industries that are well-researched by New Mountain. The Company's focus is on defensive growth businesses that generally exhibit the following characteristics: (i) acyclicality, (ii) sustainable secular growth drivers, (iii) niche market dominance and high barriers to competitive entry, (iv) recurring revenue and strong free cash flow, (v) flexible cost structures and (vi) seasoned management teams.
Portfolio Industry Composition based on Fair Value7
Business Services |
|
Software |
||||||
|
Utility & Data Center Services |
4.9 |
% |
|
|
ERP |
6.9 |
% |
|
Real Estate Services |
4.5 |
% |
|
|
Finance & Accounting |
5.3 |
% |
|
Digital Transformation |
2.6 |
% |
|
|
Human Capital Management |
4.3 |
% |
|
Compliance Services |
2.5 |
% |
|
|
IT Infrastructure & Security |
3.5 |
% |
|
Insurance & Benefits Services |
2.4 |
% |
|
|
Governance, Risk & Compliance |
1.6 |
% |
|
Misc Services |
2.4 |
% |
|
|
Commerce & Supply Chain |
0.6 |
% |
|
Data & Information Services |
1.4 |
% |
|
Total Software |
22.2 |
% |
|
|
Field Services |
1.0 |
% |
|
|
|
|
|
|
Engineering & Consulting Services |
0.7 |
% |
|
Financial Services & Technology |
|
||
Total Business Services |
22.4 |
% |
|
|
Financial Services |
4.5 |
% |
|
|
|
|
|
|
Integrated Payments |
1.7 |
% |
|
Healthcare |
|
|
Financial Technology |
1.1 |
% |
|||
|
Healthcare Services |
11.4 |
% |
|
Total Financial Services & Technology |
7.3 |
% |
|
|
Healthcare IT & Tech-Enabled Services |
5.8 |
% |
|
|
|
|
|
|
Pharma Services |
2.0 |
% |
|
Other Industries |
|
||
|
Healthcare Products |
0.4 |
% |
|
|
Consumer Services |
8.2 |
% |
Total Healthcare |
19.6 |
% |
|
|
Distribution & Logistics |
6.7 |
% |
|
|
|
|
|
|
Education |
5.0 |
% |
|
|
|
|
Packaging |
3.2 |
% |
|||
|
|
|
|
|
Other |
5.4 |
% |
|
|
|
|
|
Total Other Industries |
28.5 |
% |
||
The Company monitors the performance and financial trends of its portfolio companies on at least a quarterly basis. The Company attempts to identify any developments within the portfolio company, the industry, or the macroeconomic environment that may alter any material element of the Company's original investment strategy. As described more fully in the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission, the portfolio monitoring procedures are designed to provide a simple, yet comprehensive analysis of the Company's portfolio companies based on their operating performance and underlying business characteristics, which in turn forms the basis of its Risk Rating. The Risk Rating is expressed in categories of Green, Yellow, Orange and Red with Green reflecting an investment that is in-line with or above expectations and Red reflecting an investment performing materially below expectations.
The following table shows the Risk Rating of the Company's portfolio companies as of December 31, 2025:
(in millions) |
As of December 31, 2025 |
||||||||||||||
Risk Rating |
|
Cost |
|
Percent |
|
Fair Value |
|
Percent |
|
Weighted Average Mark |
|||||
Green8 |
|
$ |
2,700.0 |
|
91.8 |
% |
|
$ |
2,611.1 |
|
94.8 |
% |
|
98.6 |
% |
Yellow3 |
|
|
85.4 |
|
2.9 |
% |
|
|
55.5 |
|
2.0 |
% |
|
64.8 |
% |
Orange |
|
|
156.7 |
|
5.3 |
% |
|
|
88.9 |
|
3.2 |
% |
|
64.8 |
% |
Red |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
— |
|
Total |
|
$ |
2,942.1 |
|
100.0 |
% |
|
$ |
2,755.5 |
|
100.0 |
% |
|
|
|
As of December 31, 2025, nearly all investments in the Company's portfolio had a Green Risk Rating, with the exception of five portfolio companies that had a Yellow Risk Rating, nine portfolio companies that had an Orange Risk Rating. As of December 31, 2025 there were no portfolio companies that had a Red Risk Rating.
The following table shows the Company's investment portfolio composition as of December 31, 2025:
(in millions) |
|
|
|
|
||
Investment Portfolio Composition |
|
December 31, 2025 |
|
Percent of Total |
||
First Lien |
|
$ |
1,818.2 |
|
66.0 |
% |
Senior Loan Funds (SLP III & SLP IV) & NMNLC |
|
|
387.5 |
|
14.1 |
% |
Second Lien3 |
|
|
104.7 |
|
3.8 |
% |
Subordinated |
|
|
121.5 |
|
4.4 |
% |
Preferred Equity |
|
|
232.6 |
|
8.4 |
% |
Common Equity and Other9 |
|
|
91.0 |
|
3.3 |
% |
Total |
|
$ |
2,755.5 |
|
100.0 |
% |
Liquidity and Capital Resources
As of December 31, 2025, the Company had cash and cash equivalents of $80.7 million and total statutory debt outstanding of $1,492.7 million4. The Company's statutory debt to equity was 1.26x (or 1.21x net of available cash) as of December 31, 2025. Additionally, the Company's wholly owned SBIC subsidiaries had $196.2 million of SBA-guaranteed debentures outstanding as of December 31, 2025. As of December 31, 2025, the Company had $856.0 million of available capacity on its Holdings Credit Facility, NMFC Credit Facility and Unsecured Management Company Revolver.
Fourth Quarter 2025 Conference Call
New Mountain Finance Corporation will host an earnings conference call and webcast at 11:30 am Eastern Time on Wednesday, February 25, 2026. To participate in the live earning conference call, please use the following dial-in numbers or visit the audio webcast link. To avoid any delays, please join at least fifteen minutes prior to the start of the call.
- United States: +1 (877) 443-9109
- International: +1 (412) 317-1082
- Live Audio Webcast
A replay of the conference call can be accessed one hour after the end of the conference call through May 25, 2026. The full webcast replay will be available through February 25, 2027. To access the earnings webcast replay please visit the New Mountain Investor Relations website.
- United States: +1 (877) 344-7529
- International: +1 (412) 317-0088
- Access Code: 4464661
For additional details related to the quarter ended December 31, 2025, please refer to the New Mountain Finance Corporation Annual Report on Form 10-K filed with the SEC and the supplemental investor presentation which can be found on the Company's website at http://www.newmountainfinance.com.
| __________________________________________ | ||
| 1. | Excludes non-controlling interest in New Mountain Net Lease Corporation ("NMNLC"). |
|
| 2. | Dividend yield calculation uses the closing stock price of $8.15 on February 20, 2026 and $11.94 on February 24, 2025 and includes regular dividends for Q4 2025 and regular and supplemental dividends for Q4 2024. |
|
| 3. | Includes collateral for securities purchased under collateralized agreements to resell. |
|
| 4. | Excludes the Company's United States Small Business Administration ("SBA") guaranteed debentures. |
|
| 5. | References to "YTM at Cost" assume the accruing investments, including secured collateralized agreements, in the Company's portfolio as of a certain date, the ‘‘Portfolio Date'', are purchased at cost on that date and held until their respective maturities with no prepayments or losses and are exited at par at maturity. This calculation excludes the impact of existing leverage. YTM at Cost uses the Sterling Overnight Interbank Average Rate ("SONIA"), Euro Interbank Offered Rate ("EURIBOR") and Secured Overnight Financing Rate ("SOFR") curves at each quarter's respective end date. The actual yield to maturity may be higher or lower due to the future selection of SONIA, EURIBOR and SOFR contracts by the individual companies in the Company's portfolio or other factors. |
|
| 6. | Originations exclude payment-in-kind ("PIK"); originations, repayments, and sales exclude revolvers, unfunded commitments, bridges, return of capital, and realized gains / losses. |
|
| 7. | Excludes NMFC Senior Loan Program III LLC ("SLP III"), NMFC Senior Loan Program IV LLC ("SLP IV") and NMNLC. |
|
| 8. | Includes investments held in NMNLC. |
|
| 9. | Includes investments classified as structured finance obligations. |
|
New Mountain Finance Corporation |
|||||||
Consolidated Statements of Assets and Liabilities |
|||||||
(in thousands, except shares and per share data) |
|||||||
|
December 31, 2025 |
|
December 31, 2024 |
||||
Assets |
|
|
|
||||
Investments at fair value |
|
|
|
||||
Non-controlled/non-affiliated investments (cost of $2,060,391 and $2,298,083, respectively) |
$ |
2,002,306 |
|
|
$ |
2,277,352 |
|
Non-controlled/affiliated investments (cost of $131,221 and $124,254, respectively) |
|
60,702 |
|
|
|
112,776 |
|
Controlled investments (cost of $720,503 and $679,587, respectively) |
|
679,005 |
|
|
|
700,896 |
|
Total investments at fair value (cost of $2,912,115 and $3,101,924, respectively) |
|
2,742,013 |
|
|
|
3,091,024 |
|
Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively) |
|
13,500 |
|
|
|
13,500 |
|
Cash and cash equivalents |
|
80,718 |
|
|
|
80,320 |
|
Interest and dividend receivable |
|
38,549 |
|
|
|
42,379 |
|
Derivative asset at fair value |
|
5,647 |
|
|
|
— |
|
Receivable from unsettled securities sold |
|
4,138 |
|
|
|
— |
|
Receivable from affiliates |
|
381 |
|
|
|
213 |
|
Other assets |
|
17,907 |
|
|
|
19,265 |
|
Total assets |
$ |
2,902,853 |
|
|
$ |
3,246,701 |
|
Liabilities |
|
|
|
||||
Borrowings |
|
|
|
||||
Unsecured Notes |
$ |
991,585 |
|
|
$ |
978,503 |
|
Holdings Credit Facility |
|
420,063 |
|
|
|
294,363 |
|
SBA-guaranteed debentures |
|
196,205 |
|
|
|
300,000 |
|
NMFC Credit Facility |
|
81,074 |
|
|
|
27,944 |
|
2022 Convertible Notes |
|
— |
|
|
|
260,091 |
|
Deferred financing costs (net of accumulated amortization of $45,302 and $63,971, respectively) |
|
(17,875 |
) |
|
|
(24,191 |
) |
Net borrowings |
|
1,671,052 |
|
|
|
1,836,710 |
|
Payable to broker |
|
14,630 |
|
|
|
3,230 |
|
Interest payable |
|
11,892 |
|
|
|
17,109 |
|
Management fee payable |
|
9,176 |
|
|
|
10,467 |
|
Incentive fee payable |
|
3,018 |
|
|
|
8,625 |
|
Deferred tax liability |
|
1,819 |
|
|
|
1,410 |
|
Payable for unsettled securities purchased |
|
463 |
|
|
|
— |
|
Derivative liability at fair value |
|
366 |
|
|
|
7,423 |
|
Other liabilities |
|
2,181 |
|
|
|
2,436 |
|
Total liabilities |
|
1,714,597 |
|
|
|
1,887,410 |
|
Commitments and contingencies |
|
|
|
||||
Net assets |
|
|
|
||||
Preferred stock, par value $0.01 per share, 2,000,000 shares authorized, none issued |
|
— |
|
|
|
— |
|
Common stock, par value $0.01 per share, 200,000,000 shares authorized, 107,851,929 and 107,851,415 shares issued, respectively, and 102,638,388 and 107,851,415 shares outstanding, respectively |
|
1,079 |
|
|
|
1,079 |
|
Paid in capital in excess of par |
|
1,354,726 |
|
|
|
1,365,852 |
|
Treasury stock at cost, 5,213,541 and 0 shares held, respectively |
|
(51,952 |
) |
|
|
— |
|
Accumulated overdistributed earnings |
|
(121,676 |
) |
|
|
(13,592 |
) |
Total net assets of New Mountain Finance Corporation |
$ |
1,182,177 |
|
|
$ |
1,353,339 |
|
Non-controlling interest in New Mountain Net Lease Corporation |
|
6,079 |
|
|
|
5,952 |
|
Total net assets |
$ |
1,188,256 |
|
|
$ |
1,359,291 |
|
Total liabilities and net assets |
$ |
2,902,853 |
|
|
$ |
3,246,701 |
|
Number of shares outstanding |
|
102,638,388 |
|
|
|
107,851,415 |
|
Net asset value per share of New Mountain Finance Corporation |
$ |
11.52 |
|
|
$ |
12.55 |
|
New Mountain Finance Corporation |
|||||||||||
Consolidated Statements of Operations |
|||||||||||
(in thousands, except shares and per share data) |
|||||||||||
|
Year ended December 31, |
||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
2023 |
|
Investment income |
|
|
|
|
|
||||||
From non-controlled/non-affiliated investments: |
|
|
|
|
|
||||||
Interest income (excluding Payment-in-kind ("PIK") interest income) |
$ |
201,743 |
|
|
$ |
232,023 |
|
|
$ |
249,851 |
|
PIK interest income |
|
12,011 |
|
|
|
17,573 |
|
|
|
15,968 |
|
Dividend income |
|
1,382 |
|
|
|
3,987 |
|
|
|
193 |
|
Non-cash dividend income |
|
15,911 |
|
|
|
19,286 |
|
|
|
17,481 |
|
Other income |
|
5,542 |
|
|
|
7,686 |
|
|
|
4,981 |
|
From non-controlled/affiliated investments: |
|
|
|
|
|
||||||
Interest income (excluding PIK interest income) |
|
1,320 |
|
|
|
1,443 |
|
|
|
1,951 |
|
PIK interest income |
|
4,358 |
|
|
|
3,648 |
|
|
|
2,183 |
|
Non-cash dividend income |
|
2,594 |
|
|
|
5,843 |
|
|
|
4,625 |
|
Other income |
|
250 |
|
|
|
250 |
|
|
|
251 |
|
From controlled investments: |
|
|
|
|
|
||||||
Interest income (excluding PIK interest income) |
|
6,751 |
|
|
|
5,800 |
|
|
|
5,386 |
|
PIK interest income |
|
13,833 |
|
|
|
15,649 |
|
|
|
15,443 |
|
Dividend income |
|
47,991 |
|
|
|
48,640 |
|
|
|
45,905 |
|
Non-cash dividend income |
|
10,445 |
|
|
|
6,446 |
|
|
|
5,303 |
|
Other income |
|
2,953 |
|
|
|
3,392 |
|
|
|
5,315 |
|
Total investment income |
|
327,084 |
|
|
|
371,666 |
|
|
|
374,836 |
|
Expenses |
|
|
|
|
|
||||||
Interest and other financing expenses |
|
123,718 |
|
|
|
136,636 |
|
|
|
124,784 |
|
Management fee |
|
38,787 |
|
|
|
45,522 |
|
|
|
45,610 |
|
Incentive fee |
|
30,761 |
|
|
|
36,385 |
|
|
|
38,303 |
|
Professional fees |
|
4,632 |
|
|
|
4,379 |
|
|
|
3,771 |
|
Administrative expenses |
|
4,155 |
|
|
|
4,222 |
|
|
|
4,101 |
|
Other general and administrative expenses |
|
1,784 |
|
|
|
2,039 |
|
|
|
2,068 |
|
Total expenses |
|
203,837 |
|
|
|
229,183 |
|
|
|
218,637 |
|
Less: management and incentive fees waived |
|
(13,132 |
) |
|
|
(3,739 |
) |
|
|
(4,117 |
) |
Net expenses |
|
190,705 |
|
|
|
225,444 |
|
|
|
214,520 |
|
Net investment income before income taxes |
|
136,379 |
|
|
|
146,222 |
|
|
|
160,316 |
|
Income tax expense |
|
21 |
|
|
|
262 |
|
|
|
418 |
|
Net investment income |
|
136,358 |
|
|
|
145,960 |
|
|
|
159,898 |
|
Net realized (losses) gains: |
|
|
|
|
|
||||||
Non-controlled/non-affiliated investments |
|
4,260 |
|
|
|
(45,365 |
) |
|
|
(49,267 |
) |
Controlled investments |
|
38,898 |
|
|
|
2,000 |
|
|
|
16,413 |
|
New Mountain Net Lease Corporation |
|
— |
|
|
|
1,533 |
|
|
|
— |
|
Foreign currency |
|
— |
|
|
|
420 |
|
|
|
13 |
|
Net change in unrealized appreciation (depreciation): |
|
|
|
|
|
||||||
Non-controlled/non-affiliated investments |
|
(40,766 |
) |
|
|
52,581 |
|
|
|
47,956 |
|
Non-controlled/affiliated investments |
|
(59,041 |
) |
|
|
(37,242 |
) |
|
|
(19,052 |
) |
Controlled investments |
|
(62,807 |
) |
|
|
336 |
|
|
|
(18,588 |
) |
Securities purchased under collateralized agreements to resell |
|
— |
|
|
|
(3,000 |
) |
|
|
(39 |
) |
Foreign currency |
|
480 |
|
|
|
(606 |
) |
|
|
100 |
|
Provision for taxes |
|
(409 |
) |
|
|
(2,114 |
) |
|
|
(1,344 |
) |
Net realized and unrealized losses |
|
(119,385 |
) |
|
|
(31,457 |
) |
|
|
(23,808 |
) |
Net increase in net assets resulting from operations |
|
16,973 |
|
|
|
114,503 |
|
|
|
136,090 |
|
Less: Net increase in net assets resulting from operations related to non-controlling interest in New Mountain Net Lease Corporation |
|
(485 |
) |
|
|
(1,060 |
) |
|
|
(747 |
) |
Net increase in net assets resulting from operations related to New Mountain Finance Corporation |
$ |
16,488 |
|
|
$ |
113,443 |
|
|
$ |
135,343 |
|
Basic earnings per share |
$ |
0.16 |
|
|
$ |
1.06 |
|
|
$ |
1.34 |
|
Weighted average shares of common stock outstanding - basic |
|
106,150,261 |
|
|
|
106,570,782 |
|
|
|
101,118,302 |
|
Diluted earnings per share |
$ |
0.16 |
|
|
$ |
1.03 |
|
|
$ |
1.24 |
|
Weighted average shares of common stock outstanding - diluted |
|
121,093,317 |
|
|
|
125,463,389 |
|
|
|
123,488,882 |
|
Distributions declared and paid per share |
$ |
1.28 |
|
|
$ |
1.37 |
|
|
$ |
1.49 |
|
ABOUT NEW MOUNTAIN FINANCE CORPORATION
New Mountain Finance Corporation (NASDAQ:NMFC) is focused on providing direct lending solutions to U.S. upper middle market companies backed by top private equity sponsors. Our investment objective is to generate current income and capital appreciation through the sourcing and origination of senior secured loans and select junior capital positions, to growing businesses in defensive industries that offer attractive risk-adjusted returns. Our differentiated investment approach leverages the deep sector knowledge and operating resources of New Mountain Capital, a global investment firm with approximately $60 billion of assets under management.
ABOUT NEW MOUNTAIN CAPITAL
New Mountain Capital ("NMC") is a New York-based investment firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, credit and net lease investment strategies with approximately $60 billion in assets under management. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies. For more information on New Mountain Capital, please visit http://www.newmountaincapital.com.
FORWARD-LOOKING STATEMENTS
Statements included herein may contain "forward-looking statements", which relate to our future operations, future performance or our financial condition. Forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including changes in base interest rates and significant volatility on our business, portfolio companies, our industry and the global economy. Actual results and outcomes may differ materially from those anticipated in the forward-looking statements as a result of a variety of factors, including those described from time to time in our filings with the Securities and Exchange Commission or factors that are beyond our control. New Mountain Finance Corporation undertakes no obligation to publicly update or revise any forward-looking statements made herein, except as may be required by law. All forward-looking statements speak only as of the time of this press release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260224417947/en/
New Mountain Finance Corporation
Investor Relations
Laura C. Holson, Authorized Representative
NMFCIR@newmountaincapital.com
(212) 220-3505