SURO CAPITAL CORP. Q4 FY2024 earnings call

History

• Founded 14 years ago with the objective of providing access to market-leading private companies before IPO, capitalizing on the thesis that companies would stay private longer. Has owned marquee tech companies like Facebook, Twitter, etc.

Fourth Quarter Results

• Ended the quarter with a net asset value of $157.6 million or $6.68 per share. Top 5 positions included CoreWeave, OpenAI, Learneo, Blink Health, Whoop, accounting for ~44% of the investment portfolio at fair value; top 10 positions accounted for ~74%. Liquid assets totaled ~$23.6 million (10% of gross assets).

Portfolio Updates

• CoreWeave: Filed S-1, $25M exposure, $1.9B 2024 revenue, expects $8B 2025 revenue; signed contract with OpenAI, acquired Weights & Biases.
• OpenAI: $17.5M investment in Q3, in talks to raise $40B at $300B valuation, ~400M active users, >2M paying business customers.
• Vast Data: ~$200M ARR, cash flow positive for 3 years, NHL partnership, InsightEngine launch.
• ServiceTitan: IPO at $71 per share, closed first day at $101, above cost basis.
• Canva: ~$2.5B annualized revenue, >95% of Fortune 500 using, $32B valuation.
• Whoop: $1B follow-on investment, solidified position in wearable fitness, expanded into int'l markets.
• Liquid Death: First national Super Bowl ad, expanded product line with soda-inspired sparkling waters.
• SPAC Exits: Exited Oklo, PublicSquare with significant gains.

Segmented by seven general investment themes, the top allocation of SuRo Capital's investment portfolio at year-end was to artificial intelligence, infrastructure and applications, representing approximately 28% of the investment portfolio at fair value. Software-as-a-Service and Applications and Consumer Goods and Services were the next largest categories with approximately 24% and 14% of the portfolio, respectively. Approximately 13% of the portfolio was invested in Education Technology companies, the Logistics & Supply Chain category accounted for approximately 11% of the fair value, Financial Technology & Services accounted for 8%, and SuRo Sports accounted for 2% as of December 31st.

Forward-Looking

• Mark mentioned no specific NAV guidance, but noted math around CoreWeave and OpenAI for potential NAV indication. Reiterated confidence in portfolio's IPO potential with names like CoreWeave (hoped to IPO this month), Lime, Canva, Liquid Death, Vast as potential public names in next year.

Risks

• Market volatility that could detrimentally impact business, portfolio companies, industry, global economy. Actual results may differ from forward-looking statements due to factors including those in SEC filings.

Q: NAV declined 16% in 2024, what's the internal base case expectation for NAV growth in 2025 and legacy portfolio markdowns?

A: Mark mentioned no specific NAV guidance, but noted math around CoreWeave and OpenAI for potential NAV indication. Stated Learneo was the biggest weight on the portfolio on the downside.

Q: On the capital structure, with 6% notes repurchased and 6.5% notes issued, should we think about appetite for more converge structure?

A: Mark stated debt number stayed same after repurchasing $35M of 6% notes, comfortable with current capitalization, no immediate plan to issue more convertible securities against existing portfolio.

Q: Total dollar amount of pre-IPO investments and percent to go public next year?

A: Mark mentioned large investment in CoreWeave, hopeful CoreWeave IPO this month, with names like Lime, Canva, Liquid Death, Vast as potential public names in next year