Horizon Technology Finance (HRZN) Financials

Horizon Technology Finance (NASDAQ:HRZN) has shown mixed financial performance over the past four years, with trends highlighting both challenges and strengths in their operations and capital management.

• Steady net interest income: From Q3 2022 through Q1 2025, net interest income remained strong, peaking around $22 million in Q3 2023 and maintaining above $16 million in recent quarters (Q1 2025: $16.1M).
• Consistent dividend payments: The company has consistently paid quarterly dividends, typically around $0.33 to $0.38 per share, indicating stable shareholder returns despite earnings fluctuations.
• Capital raising through equity issuance: Horizon has raised capital multiple times via issuance of common equity, for example, over $11 million raised in Q1 2025 and significant equity raises in prior quarters, supporting liquidity and growth.
• Depreciation and amortization as non-cash expenses: High depreciation expense (e.g., $32 million in Q1 2025) contributes positively to cash flow from operations, partially offsetting net losses on a cash basis.
• Stable long-term debt interest expense: Interest expenses on long-term debt have ranged from approximately $5 million to $8.7 million per quarter, reflecting manageable financing costs relative to interest income.
• Volatile net realized & unrealized capital gains/losses: The company has experienced significant fluctuations with mostly negative capital gains affecting total revenue (e.g., -$32 million in Q1 2025), impacting profitability but reflecting market conditions.
• Increasing net losses in recent quarters: Horizon reported increasing net losses from continuing operations, reaching -$21.5 million in Q1 2025, compared to profits in early 2023 quarters.
• Negative total revenue trends due to investment losses: Total revenue turned negative in recent quarters driven by heavy losses on investments, e.g., -$16 million in Q1 2025 and worsening compared to prior quarters.
• Negative operating cash flows in recent periods: Cash flow from continuing operating activities notably declined, with negative $13.2 million in Q1 2025 and Q4 2024 showing -$26.1 million, indicating operational cash challenges.
• Significant net cash outflows: The company experienced large net cash declines in recent quarters, such as a $23.4 million drop in cash and equivalents in Q1 2025, reflecting challenges in liquidity management amid losses and financing activities.

Overall, Horizon Technology Finance faces headwinds primarily due to substantial investment-related losses driving net income and cash flows negative in recent quarters. However, its core lending operations generate positive net interest income, and the company maintains consistent dividend payouts supported by equity raises and manageable interest expenses. Retail investors should watch for signs of stabilizing investment income or improved operational cash flows in upcoming quarters to gauge recovery potential.