管理層發言
Welcome to the SuRo Capital's Third Quarter 2025 Earnings Call. My name is Alan, and I will be your coordinator for today's event. Please note, this call is being recorded. I will now hand you over to your host, Ben Miller, to begin today's conference. Thank you.
Thank you for joining us on today's call. I'm accompanied by Mark Klein, the Chairman and Chief Executive Officer of SuRo Capital, and Allison Green, the Chief Financial Officer. A slide presentation related to our prepared remarks is available on our website at www.surocap.com under Investor Relations, Events and Presentations. This call is being recorded and broadcast live on our website. Details for replay are included in our press release issued today. This call is the property of SuRo Capital, and unauthorized reproduction in any form is strictly prohibited. I would also like to highlight the customary disclosures in today's earnings press release regarding forward-looking information. Statements made today may include forward-looking statements related to future events or our future performance or financial condition. These statements are not guarantees of future performance and involve various risks, estimates, and uncertainties, including potential market volatility that could negatively impact our business, portfolio companies, our industry, and the global economy, leading to actual results that may differ materially from the plans and expectations indicated by those forward-looking statements. Actual results may deviate significantly due to a number of factors described from time to time in the company's SEC filings. Management does not commit to updating forward-looking statements unless required by law. For copies of SuRo Capital's SEC filings, please visit our website or the SEC's website. Now I will hand the call over to Mark Klein.
Thank you, Ben. The third quarter was another strong period for SuRo Capital, highlighting the rapid growth we've observed in public and private technology markets, especially in artificial intelligence and digital infrastructure. Even with occasional market volatility and geopolitical uncertainties, investor confidence in the AI expansion remains notably robust. As detailed in our recent white paper, AI infrastructure represents a significant mobilization of resources comparable to historic national initiatives like the New Deal and the Apollo Space program. As of September 30, 2025, our net asset value was $9.23 per share, an increase from $9.18 per share on June 30 and $8.93 on a dividend-adjusted basis, up from $6.73 per share at the end of the third quarter of 2024. Approximately 18 months ago, we made a strategic decision to concentrate on AI infrastructure, specifically in the compute, networking, and data layers essential for modern AI. This decision influenced our strategy and facilitated key investments that have proven transformative. Our journey began with CoreWeave, followed by OpenAI and VAST Data, each reflecting our belief that the demand for compute, storage, and power would grow faster than expected as AI scaled. At that time, few investors were focusing on these areas, and we recognized opportunities where others were hesitant. We invested early in teams we believed would shape the next computing wave. While some viewed CoreWeave as overly specialized and VAST Data as just another storage solution, we recognized them as foundational to a new wave of innovation, backed by exceptional technical teams and initial customer momentum. Our early conviction has been validated as these companies have emerged as vital players in the AI economy, resulting in substantial performance across our primary holdings. CoreWeave has transformed from a lesser-known entity to one of the fastest-growing infrastructure providers globally, now trading at roughly three times its IPO price. We prudently took some profits but still retain more than 40% of our position in CoreWeave. OpenAI, a driving force behind much of today's AI innovation, is reportedly considering a $1 trillion IPO, which would be over six times our initial valuation and more than three times the value we marked at the end of the third quarter. VAST Data, once operating quietly in the background, is now at the forefront of AI's data infrastructure discourse and is said to be in talks for a capital raise that would value it at more than three times our entry price. Our portfolio demonstrates a commitment to a conviction-driven strategy focused on high-impact themes like AI infrastructure and innovation, allowing investors unique access to leading companies driving this transformation. These results are a product of a disciplined, research-based, conviction-led, and patient approach. We moved forward when others hesitated, maintained confidence amid market uncertainty, and believe the prospects ahead are even more promising. Against this backdrop, I will now address how this strategy is unfolding across our portfolio, starting with our focus on AI infrastructure and foundational models. Please refer to Slide 4. In October, OpenAI underwent a significant restructuring to form OpenAI Group PBC, a public benefit corporation. This change simplified its prior capital profit model and complex share structure, enhancing transparency, governance, and future capital formation flexibility. The restructuring also positions OpenAI for greater public market participation and long-term scalability. Following this, reports from Reuters and Bloomberg indicated that OpenAI is preparing for a potential initial public offering that could value the company at up to $1 trillion, marking one of the largest in history. If realized, this offering could raise over $60 billion, significantly above the $26 billion raised by the Saudi Aramco public offering in 2019. At the potential $1 trillion valuation discussed in recent media, our stake in OpenAI could account for about one-third of our net assets on a pro forma basis, assuming no significant changes in our other holdings. For clarification, SuRo Capital's third quarter valuation reflects the previously announced $300 billion funding round, while confirmations of the higher $500 billion valuation came after the quarter's close. We regard OpenAI as one of the pivotal companies of this generation, continually setting the innovation pace while transforming global infrastructure demands. It currently ranks as the world's largest private company, rapidly expanding as AI becomes an integral part of everyday life and redefines workflows. The company's scale, reach, and capital intensity highlight the structural changes occurring in AI, and we believe our substantial exposure and other AI-related holdings provide one of the most direct avenues for public market investors to engage with and benefit from this transformative growth era. We anticipate sustained investor interest in SuRo Capital's portfolio as a unique way to gain exposure to OpenAI and the broader AI infrastructure fueling this generational change. Transitioning to infrastructure and compute, CoreWeave continues to be a key position in our portfolio and represents the largest single investment in SuRo Capital's history. As of the end of the quarter, it remains our largest position by fair value and one of the main beneficiaries of the growing demand for AI infrastructure. During the quarter, we monetized about 16.6% of our stake in CW Opportunity 2, generating $7.2 million in net proceeds and including $4.7 million in realized gains. After the quarter ended, we realized an additional $7 million in net proceeds and $5.3 million in realized gains while still holding a significant share of the position. We expect further monetization opportunities from our investments following the quarter-end distribution, as we maintain over 40% of our original investment in CoreWeave. CoreWeave has become one of the fastest-growing infrastructure providers globally, driven by record GPU demand and partnerships with major firms like OpenAI, Microsoft, and Google, including long-term supply agreements for NVIDIA's Blackwell GPUs and contracts totaling approximately $22 billion with OpenAI alone. The market continues to affirm our early conviction that AI workload growth will consistently surpass traditional cloud capacity, leading to ongoing demand for specialized infrastructure providers, supported by reports from McKinsey & Company and the U.S. Department of Energy that forecast continued growth in AI-related data center power. CoreWeave is integral to what we refer to as the great mobilization of compute. Beyond compute infrastructure, we are also witnessing innovation in emerging digital and financial systems, including a new investment we made during the quarter. Please refer to Slide 5. In line with our objective to invest early in category-defining infrastructure, we invested $5 million in HL Digital Assets, Inc. in September. This company holds a position in HYPE, the digital token of Hyperliquid, a decentralized exchange designed for fast, transparent on-chain trading of derivatives and spot markets. Hyperliquid has rapidly emerged as one of the fastest-growing decentralized exchanges by trading volume and user adoption, delivering low-latency execution and advanced liquidity. In recent weeks, HYPE has gained significant attention following its listing on Robinhood's crypto platform, resulting in increased trading volume and liquidity for the token. Reports have also indicated that Hyperliquid Strategies, a newly listed company, is aiming for a raise of around $1 billion to support its treasury holdings and token acquisition strategy, highlighting the growing institutional interest in the platform. These developments have bolstered market momentum for HYPE and reaffirm our perspective on Hyperliquid's rising significance in decentralized financial infrastructure. Hyperliquid represents the next evolution of decentralized financial infrastructure, showcasing institutional-grade performance in on-chain markets. We view this as a natural extension of our broader investment strategy, emphasizing foundational systems that facilitate the scalability of digital markets. Moving away from our infrastructure investments, our consumer and fintech portfolio companies remain a vital part of our overall investment strategy, featuring several that are progressing toward larger scales. Starting with WHOOP, which is strengthening its position in health, performance, and technology. In October 2025, WHOOP announced Advanced Labs, a new offering that combines clinician-reviewed blood tests with continuous wearable data, expanding its platform into diagnostics and precision health. This shift reflects a broader trend toward integrating biometric data with AI-driven analysis to transform health information into actionable insights. As technology advances, these integrated systems are evolving from reactive tracking to proactive, personalized, and valuable health insights, showcasing WHOOP's ability to connect hardware data and health science, enhancing engagement and expanding its target market. Turning to Canva, it remains one of the most prominent private software platforms globally, with about $3.3 billion in annual recurring revenue and over 240 million monthly active subscribers. Our initial investment granted us early access to a company revolutionizing design collaboration for teams and enterprises worldwide. Canva continues to demonstrate robust financial performance and recently completed an employer tender valuing the company at approximately $42 billion. Following Figma's IPO success, Canva's scale, growth, and profitability underline its potential to become one of the next significant public design platforms. Canva continues to excel within our portfolio, and we are closely monitoring it for potential monetization opportunities. Lastly, I want to highlight Liquid Death, an existing portfolio company for which we made a $0.25 million follow-on investment in July through a convertible note. Liquid Death is scaling its unique brand in premium beverages and has recently announced its Sparkling Energy line, set to launch in January 2026, which broadens its portfolio beyond water and tea. We are optimistic about the company's growth trajectory as it expands into new markets and strengthens its presence in the premium beverage space. With that overview of key portfolio developments, I will now address our financial and portfolio updates. In line with our commitment to enhance shareholder value, our Board of Directors took several steps this quarter to fortify our capital structure and support long-term returns. Our Board declared a $0.25 per share cash dividend for shareholders of record as of November 21, with a payment date of December 5. This decision reflects our confidence in both the strength of our portfolio and our liquidity position. Based on the anticipated size and timing of upcoming monetizations, we plan to announce and distribute additional dividends either in the fourth quarter or early in the first quarter of 2026. Furthermore, our Board approved an extension of our existing share repurchase authorization, providing ongoing flexibility for opportunistic share buybacks. Additionally, our Board authorized the repurchase of our 6% notes due December 30, 2026, enabling us to buy back the remaining outstanding notes. These measures reflect our continuous focus on optimizing our capital structure and delivering shareholder value. While these results are exciting, the journey is far from over. The AI revolution, which we refer to as the great mobilization, is still just beginning, and the opportunities ahead are among the most significant and transformative we've encountered. Every layer of the computing stack, from chips and networks to data and applications, is being reimagined. Our strategy remains unchanged: identify foundational change layers early, support the best teams working in those areas, and hold our positions with conviction as values compound over time. We are not merely celebrating our successes but positioning ourselves for what lies ahead, because while our journey has been extraordinary so far, the most thrilling phase is that we are still just getting started. Thank you for your continued support. I will now pass the call to Allison Green to discuss our financials.
Thank you, Mark. I would like to follow Mark's update with a review of our investment activity and portfolio company realizations during and subsequent to Q3, a high-level review of our investment portfolio as of quarter end, including the investment theme breakdown of our portfolio, and a more detailed review of our third quarter financial results, including our current liquidity as of September 30. I'll also touch on notable items during the third quarter and subsequent to quarter end, including our recent dividend and the declaration of an additional dividend, capital raised, and shares issued via the at-the-market offering, or ATM program and recent Board-approved updates to the note repurchase program and the share repurchase program. Please turn to Slide 6. As Mark mentioned, on September 18, we made an approximately $5 million investment in the preferred shares of HL Digital Assets, Inc. HL Digital Assets, Inc.'s primary purpose is to invest in HYPE, the digital token of Hyperliquid. The $5 million does not include prepaid expenses paid at the time of the investment or other capitalized costs of the transaction. During the quarter, we also made a $250,000 follow-on investment in Liquid Death's recent 4.12% Series S convertible notes due June 2028. This follow-on investment brings our aggregate investment in Liquid Death to approximately $10.3 million to date. During the third quarter, we received distributions from CW Opportunity 2 LP following the lifting of sales restrictions on the publicly traded CoreWeave stock held by the fund on August 15. CW Opportunity 2 LP is an SPV for which the Class A membership interest is solely invested in the Class A common shares of CoreWeave, Inc. SuRo Capital is invested in the Class A common shares of CoreWeave, Inc. through its investment in the Class A membership interest of CW Opportunity 2 LP. The two third quarter distributions totaled approximately $7.2 million and were categorized in aggregate as approximately $2.5 million return of capital and $4.7 million gain. The aggregate third quarter distribution represented approximately 16.6% of our $15 million investment in CW Opportunity 2 LP. As of quarter end, we continue to have an exposure to CoreWeave through our remaining 83.4% of our initial investment in CW Opportunity 2 LP. During the third quarter, following the successful merger of GrabAGun Digital Holdings, Inc. and Colombier Sponsor II LLC in mid-July, we sold 395,512 public warrants of GrabAGun Digital Holdings for net proceeds of approximately $660,000, resulting in a realized gain of approximately $537,000. GrabAGun public shares are anticipated to be unrestricted in January 2026. As of quarter end, we hold 1,204,488 remaining public warrants and 1,000,040 public common shares, or approximately 75% of our original position. Subsequent to quarter end to date, SuRo Capital has received two additional distributions from CW Opportunity 2 LP, totaling approximately $7 million. In aggregate, the distributions were categorized as approximately $1.7 million return of capital and $5.3 million gain. The aggregate-to-date distributions totaled $14.2 million and represent approximately 28.2% of our $15 million investment in CW Opportunity 2 LP. Currently, SuRo Capital retains approximately 71.8% of our investment in CW Opportunity 2 LP. Additionally, subsequent to quarter end, on October 16, Rebric Inc. doing business under the name Compliable, approved a plan to dissolve the company. As a result, SuRo Capital realized a loss of approximately $1 million on the position. Finally, subsequent to quarter end, we received a distribution from True Global Ventures 4 Plus Venture Capital Fund for approximately $137,000. I would now like to turn to our portfolio as of quarter end. Please turn to Slide 7. Our top 5 positions as of September 30 were CW Opportunity 2 LP, WHOOP, OpenAI, Blink Health and Learneo. These positions accounted for approximately 52% of the investment portfolio at fair value. Additionally, as of September 30, our top 10 positions accounted for approximately 75% of the investment portfolio. Please turn to Slide 8. Segmented by 7 general investment themes, the top allocation of our investment portfolio at September 30 was to artificial intelligence, infrastructure and applications, representing approximately 30% of the investment portfolio at fair value. Consumer goods and services and Software-as-a-Service were the next two largest categories with approximately 20% and 19% of our portfolio, respectively. 11% of our portfolio was invested in financial technology and services, and education technology companies accounted for approximately 10% of the fair value of our portfolio. The logistics and supply chain category accounted for approximately 8% of the fair value of our portfolio, and SuRo Capital Sports accounted for approximately 2% as of September 30. Please turn to Slide 9. We ended the third quarter 2025 with a net asset value of approximately $231.8 million or $9.23 per share, which is consistent with our financial reporting. This compares to a dividend-adjusted NAV of $8.93 per share as of June 30. The increase was driven primarily by valuation appreciation in several of our top positions. More specifically, the increase in NAV per share from $9.18 at the end of the second quarter was primarily attributable to a $0.23 per share increase driven by the net unrealized appreciation of our investment portfolio during the third quarter, a $0.21 per share increase due to net realized gain on the sale of investments and a $0.03 per share increase from the impact of stock-based compensation during the third quarter. These increases were offset by a $0.25 per share decrease due to the cash dividend declared and paid during Q3, a $0.14 per share decrease due to net investment loss, and a $0.03 per share decrease from the impact of the issuance of common stock during the quarter. During Q3, we sold 1,230,984 shares under the ATM program at a weighted average price of $8.78 per share for gross proceeds of approximately $10.8 million and net proceeds of approximately $10.6 million after deducting commissions to the agents on shares sold. As of quarter end, up to approximately $88 million in aggregate amount of the shares remain available for sale under the ATM program. At September 30, 2025, and currently, there are 25,119,091 shares of the company's common stock outstanding. Regarding our liquidity as of quarter end. We had approximately $58.3 million of liquid assets, including approximately $54.6 million in cash and approximately $3.7 million in unrestricted public securities. Not included in our unrestricted public securities are approximately $41.9 million of public securities subject to lockup or other sales restrictions as of quarter end. This represents our investment in CoreWeave via our Class A interest of CW Opportunity 2 and our currently restricted public common shares of GrabAGun. Next, I'd like to provide more detail on the recent Board-approved updates to the note repurchase program and the share repurchase program. On October 29, SuRo Capital's Board of Directors approved an extension of the discretionary note repurchase program, which allows us to repurchase up to an additional $40 million, or the remaining aggregate principal amount of our 6% notes due 2026 through open market purchases, including block purchases, in such a manner as will comply with the provisions of the Investment Company Act of 1940, as amended, and the Securities Exchange Act of 1934, as amended. As Mark mentioned earlier, SuRo Capital is committed to initiatives that enhance shareholder value. As such, on October 29, our Board of Directors authorized an extension of the company's discretionary share repurchase program until the earlier of October 31, 2026, or the repurchase of $64.3 million in aggregate amount of the company's common stock. The dollar value of shares that may yet be purchased by the company under the share repurchase program is approximately $25 million. Since the inception of the share repurchase program in August 2017, we have repurchased a total of 6 million shares of our common stock for a total deployment of approximately $39.3 million of the $64.3 million authorized by the Board. Approximately $25 million remains authorized under the share repurchase program now set to expire on October 31, 2026. Finally, I'd like to conclude with additional commentary on our recent dividend declaration. On July 3, SuRo Capital's Board of Directors declared a cash dividend of $0.25 per share paid on July 31 to the company's common stockholders of record as of the close of business on July 21. This dividend was generally attributable to the successful monetization of public securities and other promising developments in our investment portfolio. Subsequent to quarter end, on November 3, SuRo Capital's Board of Directors declared a cash dividend of $0.25 per share payable on December 5 to the company's common stockholders of record as of the close of business on November 21. The date of declaration and amount of any dividends or distributions, including any future distributions are subject to the sole discretion of SuRo Capital's Board of Directors. The aggregate amount of distributions declared and paid by SuRo Capital will be fully taxable to stockholders. The tax character of SuRo Capital's distributions cannot be finally determined until the close of SuRo Capital's taxable year, which is December 31. SuRo Capital will not report the actual tax characteristics of each year's distributions annually to stockholders. Will report the characteristics of each year's distributions annually to stockholders and the IRS on Form 1099-DIV subsequent to year-end. As a result of the $0.25 per share cash dividend paid on July 31 to stockholders of record as of the close of business on July 21, effective as of July 21, the conversion rate applicable to the 6.5% convertible notes due 2029 was adjusted to $7.53 per share or 132.7530 shares of the company's common stock for $1,000 principal amount of the 6.5% convertible notes due 2029, from the initial conversion price of $7.75 per share or 129.0323 shares of the company's common stock for $1,000 principal amount of the 6.5% convertible notes due 2029, which had been effective since issuance. The adjustment to the conversion rate of the 6.5% convertible notes due 2029 was made pursuant to the note purchase agreement governing the 6.5% convertible notes. The conversion rate will again be adjusted for the most recently declared dividend pursuant to the note purchase agreement and effective as determined by the note purchase agreement. That concludes my comments. We would like to thank you for your interest and support of SuRo Capital. Now I will turn the call over to the operator to start the Q&A session.
分析師問答
We will take our first question from Brian McKenna, Citizens.
So just a few questions on a couple of your largest investments. So on CoreWeave, it looks like you sold another $7 million thus far in the fourth quarter. What's the remaining fair value on that investment as it stands today? And then is there a way to think about the time line around monetizing the rest of CoreWeave? And then just on WHOOP, it's great to see this got marked up again. Fair value is approaching $30 million. You've probably made 2.5x plus on your investment. So what's been driving the strong outperformance here in the markups? And then is there any way to think about a potential IPO of that company?
Great questions, Brian. Thank you. Let me start with WHOOP. WHOOP continues to perform well across all metrics and trades actively in secondary markets. Its positive performance has led to changes in valuation. Regarding an IPO for WHOOP, I cannot predict when they might go public or raise more capital. One of its competitors, Oura, recently raised funds at a valuation exceeding $11 billion, which is significantly higher than the valuation we’re considering for WHOOP. As for CoreWeave, the fair value of our investments as of September 30th is approximately $37 million. This has been monetized over time by the manager of the CW Opportunity Fund, and their monetization activities can be tracked through their Form 4 filings. Thank you for your support, Brian.
We will take our next question from Marvin Fong, BTIG.
Could you share your thoughts on managing the portfolio regarding your AI exposure as CoreWeave shares are being sold? Considering WHOOP's valuation in comparison to OpenAI's potential, how are you thinking about consolidating your AI compute, data, and infrastructure investments? Are you aiming to maintain a majority of the portfolio in this area, or do you have other strategies in mind for deploying additional capital into the AI sector?
Thanks, Marvin. And again, thanks for your ongoing interest and support. You're correct. Our ongoing monetization of the CoreWeave outside of the equation, obviously, the increased value of OpenAI and what that could look like at $500 billion or now the talked about $1 trillion would make the size of that investment way disproportionate in our portfolio. We continue to spend a lot of time in the AI infrastructure space, in the application area, in the AI overlay over existing software companies, and we will continue to do so. I think some of the other areas that we are spending time are in the cybersecurity area, where we find that there are a lot of interesting companies that have increased in value, but probably not at the rate of some of the AI companies. So hopefully, that answers your question.
There are no questions on the line. I will hand over back to your host for the closing remarks.
Well, thank all of you for spending time with us this afternoon. Obviously, the markets have been a bit volatile today. I appreciate your thoughts, your ongoing support. As always, I'm available to chat with any of you. Feel free to give me a call or send an email through our IR portal. We are extremely excited about our portfolio. Hopefully, that came through in our call today. It's been a great year, and we do actually anticipate this success not only to continue but accelerate as we look into 2026. Again, thank you all very much.
Thank you for joining today's call. You may now disconnect.