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Blue Owl Capital's Q2 Earnings Beat on Strong Investment Results
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Key Takeaways
Blue Owl Capital's Q2 EPS of 40 cents beat estimates but fell 16.7% year over year.
Investment income rose 22.5% to $485.8M, driven by strong new commitments.
Expenses climbed 2.8% on higher interest, management and incentive fees.
Shares of Blue Owl Capital Corporation (OBDC - Free Report) have inched up 0.4% since it reported second-quarter 2025 results on Aug. 6. The quarterly results were aided by strong net investment income and new investment commitments. However, the upside was partly offset by an elevated expense level.
OBDC reported second-quarter 2025 adjusted earnings per share (EPS) of 40 cents, which beat the Zacks Consensus Estimate by 2.6%. However, the bottom line decreased 16.7% year over year.
Total investment income advanced 22.5% year over year to $485.8 million. The top line outpaced the consensus mark by 4.7%.
Blue Owl Capital Corporation Price, Consensus and EPS Surprise
Net investment income of $216.7 million rose 14.6% year over year and surpassed our estimate of $198.2 million. Total new investment commitments were $1.1 billion across six new portfolio companies and 19 existing ones.
Blue Owl Capital ended the second quarter with investments in 233 portfolio companies, backed with an aggregate fair value of $16.9 billion. Based on the fair value, the average investment size in each portfolio company was $72.4 million as of June 30, 2025.
Total expenses increased 2.8% year over year to $266.8 million in the second quarter, higher than our estimate of $257.8 million. The year-over-year rise was due to higher interest expenses, management fees and incentive fees.
OBDC recorded an adjusted net increase in net assets resulting from operations of $137.5 million, which improved 12.5% year over year.
Financial Update (as of June 30, 2025)
Blue Owl Capital exited the second quarter with a cash balance of $359.5 million, which declined 28.9% from the 2024-end level.
Total assets of $17.4 billion increased 25.5% from the figure at 2024-end.
Debt was $9.2 billion, up 23.7% from the figure as of Dec. 31, 2024. OBDC had $3.7 billion of undrawn capacity under its credit facilities. At the second-quarter end, net debt to equity was 1.17X.
Net operating cash flow in the first half of 2025 was $1.1 billion, while the company used $282.2 million of net cash in operations in the prior-year comparable period.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital declared a second-quarter 2025 regular dividend of 37 cents per share, to be paid on or before Sept. 30, 2025, to shareholders of record as of Oct. 15. It also provided a quarterly supplemental dividend of two cents per share.
Blue Owl Capital had the 2024 Stock Repurchase Program (expiring in 18 months from the approval date of May 6, 2024), under which it may purchase shares up to $150 million. This company did not make share repurchases under this program in the second quarter.
Of the other Finance sector players that have reported second-quarter results so far, the bottom-line results of Synchrony Financial (SYF - Free Report) , American Express Company (AXP - Free Report) and Virtu Financial, Inc. (VIRT - Free Report) beat the respective Zacks Consensus Estimate.
Synchrony Financial reported second-quarter 2025 adjusted EPS of $2.50, which surpassed the Zacks Consensus Estimate by 45.4%. The bottom line surged 61.3% year over year. Net interest income was $4.5 billion, which grew 2.6% year over year. It surpassed the consensus mark by 0.5%. Retailer share arrangements of Synchrony advanced 22% year over year to $992 million in the quarter under review.
Total loan receivables of $99.8 billion slipped 2.5% year over year. Total deposits dipped 1% year over year to $82.3 billion. Synchrony’s purchase volume fell 2% year over year to $46.1 billion. Interest and fees on loans totaled $5.3 billion, which inched up 0.5% year over year. Net interest margin improved 32 basis points (bps) year over year to 14.8% in the second quarter. Average active accounts of 68.1 million slipped 4% year over year. Home & Auto period-end loan receivables decreased 6.9% year over year in the second quarter.
American Express’ second-quarter 2025 EPS of $4.08 beat the Zacks Consensus Estimate by 5.7%. The bottom line climbed 17% year over year. Total revenues, net of interest expense, amounted to $17.9 billion, which outpaced the Zacks Consensus Estimate by 1%. The top line improved 9% year over year in the quarter under review. Network volumes of $472 billion rose 7% year over year in the second quarter. Total interest income of $6.3 billion increased 8% year over year and beat the consensus mark by 0.4%.
The U.S. Consumer Services segment’s pre-tax income of $1.7 billion improved 7% year over year in the second quarter. Total revenues, net of interest expenses, climbed 11% year over year to $8.6 billion. The Commercial Services segment recorded a pre-tax income of $905 million in the quarter under review. Total revenues, net of interest expense, amounted to $4.2 billion, which grew 7% year over year due to an increase in net interest income. The International Card Services segment reported a pre-tax income of $465 million in the second quarter, which jumped 60% year over year.
Virtu Financial reported second-quarter adjusted EPS of $1.53, which beat the Zacks Consensus Estimate by 12.5%. The bottom line soared 84.3% year over year. Adjusted net trading income of $567.7 million advanced 47.4% year over year. The top line surpassed the consensus estimate by 9.4%. Revenues from commissions, net and technology services rose 22% year over year to $153.9 million. Interest and dividend income of $128.4 million increased 19.9% year over year.
Adjusted EBITDA was $369.4 million, which climbed 69.8% year over year and came higher than our estimate of $234.2 million. Adjusted EBITDA margin improved 860 basis points year over year to 65.1%. In the Market Making segment, adjusted net trading income was $451.5 million in the second quarter, which climbed 58.1% year over year. The unit’s revenues climbed 38.1% year over year to $786.6 million. The Execution Services unit recorded an adjusted net trading income of $116.3 million in the quarter under review, which advanced 16.8% year over year.
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Blue Owl Capital's Q2 Earnings Beat on Strong Investment Results
Key Takeaways
Shares of Blue Owl Capital Corporation (OBDC - Free Report) have inched up 0.4% since it reported second-quarter 2025 results on Aug. 6. The quarterly results were aided by strong net investment income and new investment commitments. However, the upside was partly offset by an elevated expense level.
OBDC reported second-quarter 2025 adjusted earnings per share (EPS) of 40 cents, which beat the Zacks Consensus Estimate by 2.6%. However, the bottom line decreased 16.7% year over year.
Total investment income advanced 22.5% year over year to $485.8 million. The top line outpaced the consensus mark by 4.7%.
Blue Owl Capital Corporation Price, Consensus and EPS Surprise
Blue Owl Capital Corporation price-consensus-eps-surprise-chart | Blue Owl Capital Corporation Quote
OBDC’s Q2 Update
Net investment income of $216.7 million rose 14.6% year over year and surpassed our estimate of $198.2 million. Total new investment commitments were $1.1 billion across six new portfolio companies and 19 existing ones.
Blue Owl Capital ended the second quarter with investments in 233 portfolio companies, backed with an aggregate fair value of $16.9 billion. Based on the fair value, the average investment size in each portfolio company was $72.4 million as of June 30, 2025.
Total expenses increased 2.8% year over year to $266.8 million in the second quarter, higher than our estimate of $257.8 million. The year-over-year rise was due to higher interest expenses, management fees and incentive fees.
OBDC recorded an adjusted net increase in net assets resulting from operations of $137.5 million, which improved 12.5% year over year.
Financial Update (as of June 30, 2025)
Blue Owl Capital exited the second quarter with a cash balance of $359.5 million, which declined 28.9% from the 2024-end level.
Total assets of $17.4 billion increased 25.5% from the figure at 2024-end.
Debt was $9.2 billion, up 23.7% from the figure as of Dec. 31, 2024. OBDC had $3.7 billion of undrawn capacity under its credit facilities. At the second-quarter end, net debt to equity was 1.17X.
Net operating cash flow in the first half of 2025 was $1.1 billion, while the company used $282.2 million of net cash in operations in the prior-year comparable period.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital declared a second-quarter 2025 regular dividend of 37 cents per share, to be paid on or before Sept. 30, 2025, to shareholders of record as of Oct. 15. It also provided a quarterly supplemental dividend of two cents per share.
Blue Owl Capital had the 2024 Stock Repurchase Program (expiring in 18 months from the approval date of May 6, 2024), under which it may purchase shares up to $150 million. This company did not make share repurchases under this program in the second quarter.
OBDC’s Zacks Rank
Blue Owl Capital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Sector Releases
Of the other Finance sector players that have reported second-quarter results so far, the bottom-line results of Synchrony Financial (SYF - Free Report) , American Express Company (AXP - Free Report) and Virtu Financial, Inc. (VIRT - Free Report) beat the respective Zacks Consensus Estimate.
Synchrony Financial reported second-quarter 2025 adjusted EPS of $2.50, which surpassed the Zacks Consensus Estimate by 45.4%. The bottom line surged 61.3% year over year. Net interest income was $4.5 billion, which grew 2.6% year over year. It surpassed the consensus mark by 0.5%. Retailer share arrangements of Synchrony advanced 22% year over year to $992 million in the quarter under review.
Total loan receivables of $99.8 billion slipped 2.5% year over year. Total deposits dipped 1% year over year to $82.3 billion. Synchrony’s purchase volume fell 2% year over year to $46.1 billion. Interest and fees on loans totaled $5.3 billion, which inched up 0.5% year over year. Net interest margin improved 32 basis points (bps) year over year to 14.8% in the second quarter. Average active accounts of 68.1 million slipped 4% year over year. Home & Auto period-end loan receivables decreased 6.9% year over year in the second quarter.
American Express’ second-quarter 2025 EPS of $4.08 beat the Zacks Consensus Estimate by 5.7%. The bottom line climbed 17% year over year. Total revenues, net of interest expense, amounted to $17.9 billion, which outpaced the Zacks Consensus Estimate by 1%. The top line improved 9% year over year in the quarter under review. Network volumes of $472 billion rose 7% year over year in the second quarter. Total interest income of $6.3 billion increased 8% year over year and beat the consensus mark by 0.4%.
The U.S. Consumer Services segment’s pre-tax income of $1.7 billion improved 7% year over year in the second quarter. Total revenues, net of interest expenses, climbed 11% year over year to $8.6 billion. The Commercial Services segment recorded a pre-tax income of $905 million in the quarter under review. Total revenues, net of interest expense, amounted to $4.2 billion, which grew 7% year over year due to an increase in net interest income. The International Card Services segment reported a pre-tax income of $465 million in the second quarter, which jumped 60% year over year.
Virtu Financial reported second-quarter adjusted EPS of $1.53, which beat the Zacks Consensus Estimate by 12.5%. The bottom line soared 84.3% year over year. Adjusted net trading income of $567.7 million advanced 47.4% year over year. The top line surpassed the consensus estimate by 9.4%. Revenues from commissions, net and technology services rose 22% year over year to $153.9 million. Interest and dividend income of $128.4 million increased 19.9% year over year.
Adjusted EBITDA was $369.4 million, which climbed 69.8% year over year and came higher than our estimate of $234.2 million. Adjusted EBITDA margin improved 860 basis points year over year to 65.1%. In the Market Making segment, adjusted net trading income was $451.5 million in the second quarter, which climbed 58.1% year over year. The unit’s revenues climbed 38.1% year over year to $786.6 million. The Execution Services unit recorded an adjusted net trading income of $116.3 million in the quarter under review, which advanced 16.8% year over year.