Company overview
Understand the business
TriplePoint provides debt capital to companies backed by venture investors, generally at stages where they need growth financing but may not yet have access to traditional public debt markets. Its portfolio can include secured loans and related investments, as well as warrants or other equity-linked positions. As a BDC, it is designed to pass much of its taxable income to shareholders, subject to the income it generates and the requirements of its regulated structure.
Primary earnings measures
The key recurring earnings measure is net investment income per share. For a lender such as TriplePoint, net investment income reflects interest income, fee income and other investment income after operating costs, interest expense and other recurring expenses. It is more useful than broad accounting profit for assessing ordinary distribution support because accounting results can be affected by unrealized gains and losses on investments. Credit performance, repayment activity, borrowing costs and the level of income-producing investments are major drivers of net investment income.
How the company supports its distribution
Cash available for distributions is principally generated by interest and fees from the debt portfolio. Loan repayments can return principal for reinvestment but do not by themselves create recurring income. Prepayment fees, amendment fees and gains from warrant or equity-linked investments can add to results, although these are less predictable than contractual loan interest. Falling portfolio income, rising funding costs, non-accrual loans or realized credit losses can reduce the cash-generating capacity behind distributions.