Blackrock Tcp Capital (TCPC) Financials

BlackRock TCP Capital Corp. (NASDAQ: TCPC) has shown quite a volatile financial performance over the last four years, based on its quarterly income statements, cash flow statements, and balance sheets from Q3 2022 through Q4 2024.

Positive Trends and Highlights:

• Despite fluctuations, the company recorded very strong consolidated net income continuing operations in Q4 2023 at approximately $259 million, and in Q3 2023 at $28.7 million, indicating periods of strong profitability.
• Operating cash flow remains generally positive with notable inflows in Q3 2024 ($102 million) and Q2 2024 ($87 million), suggesting solid cash generation capacity in core operations during these periods.
• The company maintains substantial cash and equivalents, e.g., $194.7 million in Q2 2024 and $120.6 million in Q1 2024, evidencing good liquidity levels.
• Total common equity has increased over the years, amounting to $953 million in Q1 2024 from $816 million in Q3 2022, showing strengthened shareholder equity base.
• The company has managed to keep total liabilities relatively stable, around $1.18 billion in Q3 2024 compared to $995 million in Q3 2022, reflecting controlled leverage use over time.
• Interest income from investment securities showed upward trends in some quarters, such as $69 million in Q2 2024 and $65 million in Q3 2024, supporting income generation potential.

Neutral or Mixed Observations:

• Net interest income experienced wide swings, including negative net interest income in Q4 2024 (-$4.8 million) versus positive income in previous periods, pointing to interest expense pressures and potential interest margin challenges.
• Weighted average shares outstanding have increased notably from approximately 57.7 million (2022/2023 periods) to around 85.1 million in late 2024, indicating possible share issuances which may dilute EPS but also raise capital.
• There are notable fluctuations in dividends paid quarterly, with sizable payments such as $37.4 million in Q4 2024, showing ongoing returns to shareholders but at levels that must be balanced against earnings.
• The company’s debt changes significantly each quarter, with both issuances and repayments ranging from tens to hundreds of millions, suggesting active debt management but also considerable refinancing activity.

Negative Aspects and Concerns:

• Q4 2024 showed a substantial consolidated net loss (-$38.5 million on the cash flow statement and a net income loss on total revenue), with a very large net realized and unrealized capital loss of about -$123 million impacting total non-interest income significantly.
• Total revenue was negative in Q4 2024 (-$127.7 million), reflecting extraordinary market or investment losses, which is a notable red flag for earnings quality.
• Earnings per share turned negative in Q4 2024 (-$0.52 basic and diluted), a sharp decline compared to positive EPS in earlier quarters, raising concerns about profitability sustainability.
• There is volatility in net income attributable to common shareholders, swinging from positive $21.7 million in Q3 2024 to negative $17.5 million in Q2 2024 and back, indicating earnings inconsistency.
• The company’s operating expenses remain high, with total non-interest expenses exceeding $94 million in Q4 2024, possibly squeezing profit margins during loss quarters.

Summary: BlackRock TCP Capital Corp has demonstrated periods of profitable operations and positive cash flow, but the recent quarter (Q4 2024) shows a significant downturn primarily due to large investment losses. The company's strategic debt and equity management, along with maintaining liquidity, are positives, but investors should remain cautious given the volatility in earnings and occasional large capital losses. Monitoring future quarters will be essential to assess recovery and earnings stability.