New Mountain Finance (NMFC) Financials

New Mountain Finance (NASDAQ: NMFC) has shown variability in earnings and cash flow over the past several years, reflecting fluctuations in its net interest income, operating expenses, and financing activities. Below is a summary of key financial trends and highlights from the last four years, focusing on the most recent quarters and year-over-year comparisons.

• Net income has demonstrated resilience with a recent Q2 2025 net income of $7.9 million continuing operations, although it declined from Q1 2025's $23.5 million and prior quarters, indicating some quarter-to-quarter volatility.
• Total interest income remains a strong revenue driver, with Q2 2025 reporting $35.7 million, supported by consistent investment securities interest income across periods.
• The company generated positive net cash from continuing operating activities in Q2 2025 at $40.6 million, reflecting operational cash inflow despite fluctuations.
• Equity remains solid with total common equity near $1.31 billion as of Q2 2025, showing modest changes quarter-over-quarter and solid capitalization.
• Cash dividends to common shareholders are consistent, recently at $0.64 per share in Q2 2025, signaling a commitment to returning value to shareholders.
• Amortization and non-cash adjustments fluctuate significantly, impacting net income reconciliation and cash flow, which suggest accounting timing differences or mark-to-market adjustments needing close monitoring.
• Net interest expense has been minimal or zero in several recent quarters, indicating favorable financing costs, although periods like Q4 2024 showed significant interest expense ($31 million).
• The company’s cash and equivalents fluctuate, most recently decreasing by $28.5 million in Q2 2025, due partly to net cash used in financing activities.
• Significant debt repayments continue, with Q2 2025 repayments exceeding issuances ($153 million repaid vs. $128.5 million issued), reducing liquidity and possibly impacting borrowing capacity.
• Operating cash flows showed negative $162.8 million in Q2 2024 and negative $61.2 million in Q3 2024, indicating periods of operational cash outflows which may be concerning if persistent.

Income Statement Trends:

• Total revenue generally ranged between $56 million to $114 million in recent quarters, with net interest income being the major contributor.
• Non-interest income varies but remains a meaningful part of total revenue, fluctuating from $20 million to over $24 million historically.
• Non-interest expenses are substantial, ranging from approximately $48 million to upwards of $88 million, which can pressure net earnings if not managed.

Balance Sheet Highlights:

• Total assets have remained relatively stable around $3.1 to $3.4 billion, reflecting consistent asset base supported by trading account securities as the largest asset.
• Short-term and long-term debt levels have fluctuated, with total liabilities around $1.8 to $2 billion, pointing to a balanced leverage position that requires monitoring.
• Retained earnings are slightly negative in most recent quarters, suggesting cumulative earnings offsets or dividend impacts despite positive net income.

Cash Flow Highlights:

• Operating activities have frequently generated positive cash flows, with Q1 2025 showing $104 million from continuing operations, which is a healthy sign.
• Financing activities often show significant cash outflows due to debt repayments and dividend payments, e.g., $68.8 million net cash used in Q2 2025 financing activities.
• Volatility in net cash from operating activities (positive in some quarters and negative in others) underscores the importance of cash flow management for sustaining operations and dividends.

Summary: New Mountain Finance Corp has maintained a solid asset base and delivered consistent dividend payments to shareholders. However, the company faces challenges with variable quarterly earnings and operating cash flows as well as ongoing sizable debt repayments impacting net cash flows. Investors should watch for stabilization in operational cash generation and continued management of expenses to ensure sustained profitability and liquidity.