Hercules Capital, Inc. (NYSE:HTGC) Q3 2023 Earnings Conference Call November 2, 2023 5:00 PM ET

Company Participants

Michael Hara – Managing Director-Investor Relations

Scott Bluestein – Chief Executive Officer and Chief Investment Officer

Seth Meyer – Chief Financial Officer

Conference Call Participants

Crispin Love – Piper Sandler

Christopher Nolan – Ladenburg Thalmann

Ryan Lynch – KBW

Finian O'Shea – Wells Fargo

Operator

Good day and thank you for standing by. Welcome to the Hercules Capital Q3 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to introduce your host for today's call, Michael Hara, Managing Director of Investor Relations. Please go ahead.

Michael Hara

Thank you, Justin. Good afternoon, everyone, and welcome to Hercules conference call for the third quarter 2023. With us on the call today from Hercules are Scott Bluestein, CEO and Chief Investment Officer; and Seth Meyer, CFO. Hercules' financial results were released just after today's market close and can be accessed from Hercules Investor Relations section at investor.htgc.com. An archived webcast replay will be available on the Investor Relations webpage for at least 30 days following the call.

During this call, we may make forward-looking statements based on our own assumptions and current expectations. These forward-looking statements are not guarantees of future performance and should not be relied upon in making any investment decision. Actual financial results may differ from the forward-looking statements made during this call for a number of reasons, including, but not limited to the risks identified in our annual report on Form 10-K and other filings that are publicly available on the SEC's website. Any forward-looking statements made during this call are made only as of today's date, and Hercules assumes no obligation to update any such statements in the future.

And with that, I'll turn the call over to Scott.

Scott Bluestein

Thank you, Michael, and thank you all for joining the Hercules Capital Q3 2023 earnings call. Our best-in-class venture and growth stage lending platform continued to deliver record earnings and operating performance in Q3 as well as delivering record year-to-date gross fundings of $1.29 billion, which represents an increase of over 17% year-over-year. We were able to achieve record Q3 results despite continued volatility in both the equity and credit markets as well as across the broader global macro landscape. While we are pleased with our continued record operating performance in Q3 and remain optimistic about our positioning in the asset class and our ability to capture further market share over the coming quarters, we continue to take steps to manage our business defensively while maintaining the ability to play offense as the market improves. This includes enhancing our liquidity position, maintaining very low leverage, tightening our credit screens for new underwritings and driving our first lien exposure up to over 87%, our highest level since Q1 2017.