Reports Fourth Quarter Net Investment Income of $0.32 per Share and Declares a First Quarter Distribution of $0.32 per Share
NEW YORK--(BUSINESS WIRE)--February 24, 2026--
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 Highlights(1)
-- 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 Yield(2) 15.7% 10.7%
December 31, 2025 September 30, 2025
------------------- --------------------
Investment Portfolio(3) $ 2,755.5 $ 2,957.1
NAV per Share $ 11.52 $ 12.06
Statutory Debt/Equity(4) 1.26x 1.26x
Statutory Debt/Equity (Net of 1.21x 1.23x
Available Cash)(4)
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 Activity(3)
As of December 31, 2025, the Company's NAV(1) 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 Cost(5) of approximately 10.5%. For the three months ended December 31, 2025, the Company originated $29.5 million of investments(6) , offset by $139.7 million of repayments(6) 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 Value(7)
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%
IT Infrastructure &
Compliance Services 2.5% Security 3.5%
Insurance & Benefits Governance, Risk &
Services 2.4% 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 Financial Services &
Services 0.7% Technology
----
Total Business Services 22.4% Financial Services 4.5%
====
Integrated Payments 1.7%
Healthcare Financial Technology 1.1%
----
Total Financial Services
Healthcare Services 11.4% & 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
--------------------------------------------------------
Fair Weighted
Risk Rating Cost Percent Value Percent Average Mark
-------- --------- -------- --------- -------------
Green(8) $2,700.0 91.8% $2,611.1 94.8% 98.6%
Yellow(3) 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 Lien(3) 104.7 3.8%
Subordinated 121.5 4.4%
Preferred Equity 232.6 8.4%
Common Equity and Other(9) 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 million(4) . 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/
CONTACT: New Mountain Finance Corporation
Investor Relations
Laura C. Holson, Authorized Representative
NMFCIR@newmountaincapital.com
(212) 220-3505
(END) Dow Jones Newswires
February 24, 2026 16:25 ET (21:25 GMT)