Advanced Flower Capital (NASDAQ:AFCG) announced its fourth-quarter and full-year 2025 financial results on Wednesday, marking the conclusion of its transformation into a business development company.
The firm reported fourth-quarter GAAP net income of $0.9 million, or 4 cents per share, a recovery from the net losses reported earlier in the fiscal year.
However, for the full year 2025, the company recorded a GAAP net loss of $20.7 million, or 95 cents per share.
The annual deficit was primarily driven by higher credit losses and the non-accrual status of several legacy loans within its cannabis-heavy portfolio.
Distributable earnings—a non-GAAP metric used to measure cash available for dividends—totaled $8.7 million for the year, but swung to a loss of $2.8 million in the fourth quarter.
Effective January 1, 2026, the company officially converted from a mortgage REIT to a BDC.
This shift expands the company's investment universe beyond real-estate-backed loans, allowing it to target a wider range of cash-flowing businesses in the lower middle market.
Meanwhile, the company's balance sheet continues to reflect the ongoing "cleanup" of legacy positions.
As of December 31, 2025, total assets stood at $275.6 million, with a product backlog and principal outstanding of approximately $366 million.
The company's book value per share ended the year at $7.46, impacted by the $22.6 million provision for current expected credit losses (CECL).
In line with its new structure and current earnings profile, the Board of Directors declared a regular cash dividend of $0.05 per common share for the first quarter of 2026.