Financial Data and Key Metrics Changes - Adjusted net investment income for Q4 was $0.52 per share, with an annualized operating return on equity of 12% [6] - Full year 2025 adjusted net investment income per share was $2.18, representing an operating return on equity of 12.7% [8] - The company reported a net income per share of $0.32 for Q4 and $1.81 for the full year [35] Business Line Data and Key Metrics Changes - In Q4, 97% of investments were in first lien loans, indicating a focus on the top of the capital structure [29] - Total commitments in Q4 amounted to $242 million, with total fundings of $197 million across five new portfolio companies [28] - The weighted average yield on debt and income-producing securities at amortized cost decreased from 11.7% to 11.3% quarter-over-quarter [30] Market Data and Key Metrics Changes - The weighted average loan-to-value (LTV) within the portfolio was approximately 41%, remaining stable year-over-year [16] - The portfolio companies demonstrated LTM revenue and earnings growth rates of approximately 9% and 12%, respectively [17] - The company’s exposure to enterprise software comprises approximately 40% of the total portfolio by fair value [19] Company Strategy and Development Direction - The company emphasizes a thematic investment approach, focusing on durable business models and the impact of AI on the market [10][12] - The formation of a joint venture, Structured Credit Partners, aims to invest in broadly syndicated loan CLOs, enhancing diversification and investment flexibility [40] - The company is positioned to capitalize on market dislocations and has significant liquidity to support investment activities [21][46] Management's Comments on Operating Environment and Future Outlook - Management believes the market is in the early stages of a gradual rebalancing of capital, with opportunities arising from market volatility [45] - The anticipated returns from the newly established joint venture are expected to support the earnings profile [42] - The company expects to target a return on equity on net investment income for 2026 of 11%-11.5% [42] Other Important Information - The company declared a base quarterly dividend of $0.46 per share and a supplemental dividend of $0.01 per share [23] - The net asset value per share at year-end was $16.98, down from $17.11 in Q3 [22] - The company maintains a disciplined credit selection process, with a focus on businesses with robust unit economics [26] Q&A Session Summary Question: How much of the portfolio has turned over since 2022? - The company has about 20%-25% of NAV from pre-2022 vintages, with the majority of the portfolio originated in 2023 and 2024 [49] Question: How do you see the deployment environment evolving with AI? - The company is thematic investors and is rotating capital to businesses that will benefit from AI, focusing on those with strong moats [52][54] Question: Will the joint venture focus on BSL CLOs? - The joint venture will primarily involve broadly syndicated loans, with no management fees at the CLO or joint venture level, enhancing shareholder returns [58] Question: What is the current investment pipeline and its impact from public software space disruptions? - The company has had many conversations with sponsors and is well-positioned to take advantage of any dislocation in the market [70] Question: What was driving the unrealized losses in the portfolio? - Unrealized losses were driven by credit spread impacts and specific reversals from portfolio companies [72]

Financial Data and Key Metrics Changes - Adjusted net investment income for Q4 2025 was $0.52 per share, exceeding the base dividend of $0.46 per share, resulting in a base dividend coverage of 113% [5][6] - Full year 2025 adjusted net investment income per share was $2.18, representing an operating return on equity of 12.7%, exceeding the top end of guidance [7][8] - Reported net asset value per share at year-end was $16.98, down from $17.11 in Q3 and $17.09 at year-end 2024 [20][34] Business Line Data and Key Metrics Changes - In Q4, 97% of investments were in first lien loans, indicating a commitment to investing at the top of the capital structure [27] - Total commitments in Q4 were $242 million, with total fundings of $197 million across five new portfolio companies and upsizes to four existing investments [26] - The weighted average yield on debt and income-producing securities at amortized cost decreased from 11.7% to 11.3% quarter-over-quarter [28] Market Data and Key Metrics Changes - The weighted average loan-to-value (LTV) within the portfolio was approximately 41%, remaining stable year-over-year [15] - The core portfolio companies demonstrated LTM revenue and earnings growth rates of approximately 9% and 12%, respectively [16][17] - The company’s liquidity represented approximately 33% of total assets, with nearly 6 times coverage on unfunded commitments [18][19] Company Strategy and Development Direction - The company is focused on maintaining a disciplined investment strategy, particularly in a tighter spread environment, and aims to capitalize on market volatility [24][25] - The establishment of a joint venture, Structured Credit Partners, aims to invest in newly issued broadly syndicated loan CLOs, enhancing diversification and expanding investment flexibility [40][41] - The company emphasizes a thematic investment approach, rotating capital to businesses with strong moats that can benefit from technological advancements, particularly in AI [50][52] Management's Comments on Operating Environment and Future Outlook - Management believes the investment environment for 2026 will be characterized by an imbalance between the supply of private capital and the demand for financing, leading to sustained competition and tight spreads [24] - The company anticipates a gradual market-correcting rebalancing as capital migrates towards managers that can consistently earn their cost of capital [44] - Management expressed confidence in the resilience of the portfolio and the ability to generate differentiated risk-adjusted returns during periods of market instability [46] Other Important Information - The company reported total investment income of $108.2 million for Q4, slightly down from $109.4 million in the prior quarter [38] - The company’s average debt-to-equity ratio was 1.17x for the full year 2025, down from 1.19x in 2024 [35] - The company has a spillover income of $1.21 per share at year-end, which will be monitored closely as part of the distribution strategy [42] Q&A Session Summary Question: How much of the portfolio has turned over since 2022? - The company indicated that about 20%-25% of NAV is from pre-2022 vintages, with the majority of the portfolio originated post the rate hiking cycle in 2023 and 2024 [48] Question: How does the company see the deployment environment evolving with AI? - The company views itself as thematic investors, rotating capital to businesses that will benefit from AI advancements, focusing on those with strong moats [50][52] Question: Will the joint venture focus on BSL CLOs? - The joint venture will primarily involve broadly syndicated loans, with no management fees at the CLO or joint venture level, enhancing returns for shareholders [56][57] Question: What is the impact of unrealized losses on the portfolio? - Unrealized losses were primarily driven by credit spread impacts and specific reversals from portfolio companies, with a noted impact from a restructuring at IRG [73] Question: What is the company's outlook on spreads for new investments? - The company has seen stable spreads throughout 2025 and anticipates this stability to continue into 2026, with hopes for widening as capital reallocates in the sector [80]

S I X T H S T R E E T S P E C I A L EARNINGS PRESENTATION Quarter Ended December 31, 2025 T Y L E N D I N G DISCLAIMER AND FORWARD-LOOKING STATEMENT References in this presentation ("Presentation") to "TSLX," "we," "us," "our" and "the Company" refer to Sixth Street Specialty Lending, Inc. OVERVIEW 14.71 14.88 14.92 15.12 15.19 15.27 15.29 15.35 15.52 15.51 15.70 15.66 15.53 15.60 15.84 15.62 15.15 15.11 15.55 15.78 15.95 16.04 16.15 16.09 16.09 16.27 16.36 16.47 16.25 16.34 16.68 16.72 16.83 15.57 16.08 16 ...

Core Insights - Sixth Street (TSLX) reported a revenue of $108.2 million for the quarter ended December 2025, reflecting a year-over-year decline of 12.5% and an EPS of $0.52 compared to $0.61 a year ago, with a revenue surprise of +0.09% over the Zacks Consensus Estimate [1] Financial Performance - The consensus EPS estimate was $0.50, resulting in an EPS surprise of +4% [1] - Total investment income from non-controlled non-affiliated investments was $105.55 million, exceeding the average estimate of $104.2 million by two analysts [4] - Total investment income from controlled, affiliated investments was $2.7 million, slightly above the average estimate of $2.67 million [4] - Investment income from controlled, affiliated investments- Interest from investments was $2.7 million, matching the average estimate of $2.67 million [4] - Investment income from non-controlled non-affiliated investments- Other income was $1.87 million, significantly below the average estimate of $6.19 million [4] Stock Performance - Shares of Sixth Street have returned -8.7% over the past month, compared to the Zacks S&P 500 composite's -0.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

分组1 - Sixth Street (TSLX) reported quarterly earnings of $0.52 per share, exceeding the Zacks Consensus Estimate of $0.50 per share, but down from $0.61 per share a year ago, representing an earnings surprise of +4.00% [1] - The company achieved revenues of $108.2 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.09%, but down from $123.7 million year-over-year [2] - Sixth Street has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates two times in the same period [2] 分组2 - The stock has underperformed the market, losing about 7.4% since the beginning of the year compared to the S&P 500's gain of 1.4% [3] - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $105.11 million, and for the current fiscal year, it is $2.00 on revenues of $414.66 million [7] - The Financial - SBIC & Commercial Industry, to which Sixth Street belongs, is currently in the top 34% of over 250 Zacks industries, indicating a favorable industry outlook [8]

Financial Performance - For the year ended December 31, 2025, net investment income per share was $2.23, and net income per share was $1.81[2] - The return on equity (ROE) for the full year 2025 was 13.1% on a net investment income basis and 10.6% on a net income basis[2] - Total investment income for the year ended December 31, 2025, was $449.1 million, down from $482.5 million in 2024[18] - Net investment income for the year ended December 31, 2025, was $210.0 million, compared to $220.0 million in 2024[41] - Net income for the year ended December 31, 2025, was $170.5 million, down from $186.6 million in 2024[41] Asset and Liability Overview - The reported net asset value (NAV) per share decreased to $16.98 at December 31, 2025, from $17.14 at September 30, 2025[4] - Net asset value per share as of December 31, 2025, was $16.98, slightly down from $17.16 in 2024[39] - Total assets as of December 31, 2025, were $3.42 billion, compared to $3.58 billion in 2024[39] - Total liabilities as of December 31, 2025, were $1.81 billion, down from $1.97 billion in 2024[39] Investment Commitments - New investment commitments for the year totaled $1,082.2 million, a decrease from $1,242.9 million in 2024[7] - For Q4 2025, new investment commitments were $242.4 million, down from $387.7 million in Q3 2025[9] - The principal amount of investments funded reached $894.0 million, up from $838.9 million in 2024, representing a 6.5% increase[43] - The number of new investment commitments in new portfolio companies increased to 65, compared to 34 in 2024, indicating a significant growth in activity[43] - The total principal amount of investments sold or repaid was $1,196.1 million, a substantial increase of 51% from $793.7 million in 2024[43] Yield and Interest Rates - The weighted average total yield of debt and income-producing securities at fair value was 11.1% as of December 31, 2025[12] - The average interest rate on debt outstanding decreased from 7.5% in 2024 to 6.2% in 2025[19] - The weighted average yield of debt and income-producing securities at fair value was 11.1% for the year ended December 31, 2025[36] - The weighted average interest rate of new investment commitments was 10.8%, slightly down from 10.9% in 2024[43] Debt Investment Characteristics - As of December 31, 2025, 96.3% of debt investments based on fair value bore interest at floating rates[12] - Percentage of debt investment commitments at floating rates was 96.3% as of December 31, 2025[36] - The percentage of new debt investment commitments at floating rates rose to 97.8%, up from 87.6% in 2024[43] Dividends - The Company declared a first quarter 2026 base dividend of $0.46 per share and a fourth quarter supplemental dividend of $0.01 per share[4] - Supplemental dividend per share for the three months ended September 30, 2025, was $0.01, down from $0.03 in the previous quarter[36] Management and Structure - Sixth Street Specialty Lending is externally managed by Sixth Street Specialty Lending Advisers, LLC, leveraging over $125 billion in assets under management[45]

Investment Overview - As of December 31, 2025, the company had made investments with an aggregate fair value of $3,347.3 million, down from $3,518.4 million as of December 31, 2024[60]. - The composition of investments at fair value included 88.9% in first-lien debt investments, 2.1% in second-lien debt investments, 1.8% in mezzanine debt investments, and 4.8% in equity and other investments as of December 31, 2025[61]. - The net unrealized gain for total investments was $24.0 million as of December 31, 2025, compared to a loss of $20.8 million as of December 31, 2024[61]. - The industry composition of investments at fair value showed that Internet Services represented 18.3% and Business Services represented 13.4% as of December 31, 2025[62]. - The geographic composition of investments indicated that the West region accounted for 29.8% and the South region for 23.2% as of December 31, 2025[65]. Risk Management - The company aims to limit downside potential by negotiating covenants that provide portfolio companies with flexibility while preserving capital[59]. - The company has a structured approach to risk assessment, grading investments on a scale of 1 to 5, with 1 indicating no concerns and 5 indicating default[55]. - The company has invested in various types of debt, including first-lien, second-lien, mezzanine, and unsecured debt, with a focus on maximizing seniority and collateral[57]. Financial Performance - Total debt as of December 31, 2025, was $2,925.0 million, with outstanding principal of $1,763.9 million[75]. - Interest expense for the year ended December 31, 2025, was $101.0 million, with total interest expense amounting to $129.6 million[78]. - The weighted average interest rate for the year ended December 31, 2025, was 6.2%[78]. - Asset coverage ratio as of December 31, 2025, was 191.5%, an increase from 182.5% in the previous year[73]. - Average debt outstanding for the year ended December 31, 2025, was $1,880.3 million[78]. Future Outlook - The company anticipates generating future cash flows from operations and issuances of common stock[72]. - The company may need to sell investments or raise additional capital to meet distribution requirements if cash flow is insufficient[156]. Competition and Market Position - The company faced competition from various capital providers, including BDCs and private equity funds[71]. Regulatory Compliance - The company is regulated as a Business Development Company (BDC) under the 1940 Act, which imposes specific regulatory requirements[119]. - The company must distribute at least 90% of its investment company taxable income and net tax-exempt income to maintain its status as a RIC[79]. - The company must derive at least 90% of its gross income from specified categories to maintain its status as a RIC[153]. - If the company fails to qualify as a RIC, all taxable income will be subject to corporate tax rates without deductions for distributions[157]. Fees and Expenses - Management Fees for the years ended December 31, 2025, 2024, and 2023 were $52.2 million, $51.8 million, and $46.4 million, respectively[91]. - The Adviser intends to waive a portion of the Management Fee on assets financed using leverage over 200% asset coverage, resulting in waived Management Fees of $1.3 million, $1.5 million, and $1.2 million for the years ended December 31, 2025, 2024, and 2023, respectively[93]. - Incentive Fees for the years ended December 31, 2025, 2024, and 2023 were $38.4 million, $40.2 million, and $47.0 million, respectively, with realized fees of $43.5 million, $45.5 million, and $42.6 million payable to the Adviser[100]. - The company incurred administrative service expenses of $3.9 million, $3.9 million, and $3.2 million for the years ended December 31, 2025, 2024, and 2023, respectively[105]. Investment Advisory Agreement - The Investment Advisory Agreement was renewed in November 2025 and will remain in effect until November 2026, subject to required approvals[102]. - The Adviser did not waive any Incentive Fees for the years ended December 31, 2025, 2024, and 2023[100]. - The Board concluded that the investment advisory fee rates are reasonable in relation to the services provided[118]. Shareholder Information - The company has a dividend reinvestment plan that automatically reinvests cash dividends for stockholders who do not opt out[80]. - The number of shares issued under the dividend reinvestment plan is determined by dividing the total dollar amount of the cash dividend by the market price per share on the payment date[84]. - The company is required to furnish stockholders with annual reports containing audited financial statements and quarterly reports[149]. Investment Valuation - The company values illiquid investments at fair value as determined by its Board, which may differ from liquidation values[542]. - As of December 31, 2025, 96.3% of the company's debt investments based on fair value bore interest at floating rates[545]. - A hypothetical increase of 300 basis points in interest rates could result in an increase of $91.5 million in interest income[546]. - The company may hedge against interest rate fluctuations using instruments such as interest rate swaps and options[547]. - The company may be exposed to currency risk from investments denominated in foreign currencies, which are translated into U.S. dollars[548].

Core Insights - The article discusses the investment potential of TRIN, highlighting a beneficial long position in its shares, indicating confidence in the company's future performance [1]. Group 1: Company Overview - TRIN has shown promising growth indicators, which may attract investors looking for opportunities in the market [1]. Group 2: Market Context - The article emphasizes that past performance does not guarantee future results, suggesting a cautious approach to investment decisions in the current market environment [2].

Group 1 - The article provides a market analysis covering several investment firms, including Gladstone Investment Corporation, FS KKR Capital Corp, Sixth Street Specialty Lending Inc, and Goldman Sachs BDC Closed End Fund [1] Group 2 - The analysis highlights the performance metrics and investment strategies of the mentioned companies, indicating their positions in the market [1]

Core Viewpoint - The article discusses the current state of Business Development Companies (BDCs), highlighting a seven-stock BDC portfolio with a yield of 13.5% that is expected to recover as the market stabilizes. Despite concerns over unemployment and economic slowdown, small businesses are reportedly thriving due to AI advancements [1][4]. Economic Overview - Small business profits are increasing, contradicting unemployment reports that suggest a slowdown. The Atlanta Fed's GDPNow estimates growth solidly over 3% [2]. - The current economic environment is characterized as an efficiency boom rather than a recession, driven by small businesses adopting AI to enhance operations [4]. BDC Market Dynamics - The BDC industry is competitive, with more losers than winners. Selecting individual BDCs is preferable to buying a fund that includes underperformers [6]. - Lower interest rates can reduce financing costs for small businesses, increasing demand for loans, which is beneficial for BDCs [7]. Specific BDC Analysis - **Sixth Street Specialty Lending (TSLX)**: Offers a 9.4% yield, focuses on companies with enterprise values between $50 million and $1 billion, and has a growing portfolio. It primarily deals in first-lien debt, with 96% being floating-rate [8][10][11]. - **Gladstone Investment (GAIN)**: Provides a 10.8% yield, focuses on lower-middle-market companies, and has a higher equity exposure than typical BDCs. Its supplemental distributions are variable [13][19][20]. - **Crescent Capital BDC (CCAP)**: Yields 12.3%, has a diverse portfolio of 187 companies, and is significantly affected by Fed rate changes due to its floating-rate debt [21][24]. - **Trinity Capital (TRIN)**: Offers a 13.5% yield, has a growth-focused portfolio of 178 companies, and is diversified in its investment types [25][28]. - **FS KKR Capital (FSK)**: Yields 14.5%, is one of the largest BDCs, and has a diversified portfolio but has faced challenges due to bad loans and a recent dividend cut [29][33]. - **Goldman Sachs BDC (GSBD)**: Yields 14.7%, has faced quality issues leading to a dividend cut, but is becoming more aggressive in deal-making [35][38]. - **BlackRock TCP Capital Corp. (TCPC)**: Offers a high yield of 19.6%, but has struggled with a significant loss since early 2023 and recently cut its dividend [39][42][43].