New Mountain Finance Co. 8.250% Notes due 2028 (NMFCZ) Financials

New Mountain Finance (NASDAQ: NMFC) has shown stable earnings but faces some headwinds in recent quarters. Here is a summary of the key financial trends and notable points based on the last four years of quarterly data through Q2 2025:

• Consistent net income: NMFC reported positive net income each quarter, with Q2 2025 net income at approximately $7.9 million and full-year quarterly averages generally ranging from $14 million to $45 million over the past few years.
• Strong revenue generation: Total revenue has remained substantial and stable, with Q2 2025 revenue at $56.8 million and past quarters regularly above $80 million, including net interest income and other non-interest income contributing meaningfully.
• Operating cash flow positive in most recent quarters: Q2 2025 continuing operating activities generated $40.6 million in cash, and most recent quarters showed strong cash flow from operations (e.g., $104 million in Q1 2025), indicating solid core business cash generation.
• Total assets stable near $3.1 to $3.4 billion: The balance sheet remains stable with total assets roughly flat year-over-year, indicating a steady asset base to support income generation.
• Equity base remains sizable: Total common equity exceeds $1.3 billion in recent quarters, supporting financial stability.
• Limited or no interest expense in recent quarters: Notably, Q2 2025 reported zero interest expense, suggesting favorable funding costs or debt management.
• Dividends remain high relative to earnings: Cash dividends per share have been around $0.60-$0.70 per quarter even as earnings per share have declined from about $0.44 in early 2023 to around $0.07 in Q2 2025, which may pressure retained earnings.
• Significant non-cash adjustments and amortization fluctuations: Q2 2025 showed large non-cash adjustments ($38.5 million) and an amortization expense of about $1.4 million, reflecting potentially complex underlying accounting or portfolio valuation changes.
• Declining net income and EPS in recent quarters: Net income fell from $44.8 million in Q1 2023 to $7.9 million in Q2 2025, with diluted EPS dropping from around $0.40 down to $0.07, indicating earnings pressure potentially from lower interest income or higher operating expenses.
• High dividend payout ratio relative to earnings: Dividends paid significantly exceed quarterly net income in recent quarters, reducing retained earnings and possibly impacting future growth capacity and balance sheet strength.
• Fluctuating operating cash flow: While positive in Q1 and Q2 2025, cash flow from operations was negative in parts of 2023, reflecting operational volatility.
• High debt levels remain: Total debt (short-term plus long-term) has consistently been around $1.7-$1.9 billion, which though typical for BDCs, requires ongoing strong earnings and cash flow to service.
• Repayments of debt often exceed issuances in recent quarters: For example, in Q2 2025, repayment of $153 million vs issuance of $128 million of debt, indicating net debt reduction but also pressures on liquidity.

Summary: New Mountain Finance has maintained positive profitability and a strong asset base but has seen a marked decline in earnings and EPS over the last two years, combined with a high dividend payout that exceeds net income. Operating cash flows are positive but have fluctuated, and the company carries significant debt which it actively manages with frequent refinancing and repayments. Investors should watch quarterly earnings trends and dividend policy closely, as sustainability of dividend payments and managing declining income could be potential challenges. Overall, NMFC remains a stable finance company with some near-term pressure on earnings and payout ratios.