Ladies and gentlemen, welcome to Flow Capital's Earnings Call for Q4 and Year-end 2024. At this time, all participants are on a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has difficulties viewing the conference, you may press star zero for operator assistance at any time. I would like to remind everyone that today's discussions may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. For more information on Flow Capital's risks and uncertainties related to these forward-looking statements, please refer to the year-end 2024 company's management discussion and analysis, which is available on SEDAR.
Today's call is being recorded on Friday, May 2, 2025. I would now like to turn the meeting over to Alex Baluta, Chief Executive Officer of Flow Capital. Please go ahead.
Thank you, Joanna, and thank you, everybody, for joining or for listening to the recording. Yesterday morning, on May 1, we released our financial results for fiscal 2024 and Q4. I am joined today by my CFO, Michael Denny, and our numbers, including a recording of this call, our press release, and our financial statements can be found on our website at flowcap.com or as filed on SEDAR. Q4 was another record quarter for us, capping off a record year. I am going to keep these comments unscripted and relatively brief. I will give you an overview of what we are seeing. As usual, if you have any questions, please call us or email us at any time. For Q4, we had a 44% increase in interest revenue to CAD 2.7 million, which is a record for us on a quarterly basis.
We had a 61% increase in recurring free cash flow to CAD 545,000, and we reported CAD 0.02 per share in free cash flow per share in the quarter. For the full year, we had a 31% increase in revenue to CAD 9.3 million, an 88% increase in free cash flow to CAD 1.9 million for the year, and we reported CAD 0.06 in free cash flow per share. Our assets year-over-year increased 13% to CAD 72 million. During the year, we deployed a record CAD 28.5 million in new deployments, and our book value per share went up one penny from CAD 1.19 to CAD 1.20 per share. Some of the other numbers that you won't see in our press release or in our financial statements I'll highlight now show the long-term track record of progress.
Just as a reminder, it was in mid-2018 that we pivoted the company, changed the name to call it Flow Capital, and focused squarely on the venture debt space. We now have a six-and-a-half-year, almost seven-year, approaching seven-year track record of performance in the space. For the last 22 quarters, we've been profitable. That's five full years of recorded and reported profitability. Q4 this year represented the sixth sequential quarter in a row of revenue growth. Our longer-term track record and performance is really—we're quite proud of here. If you look at our business model, there's an awful lot of operating leverage in our model, and you're just starting to see that. OpEx in 2020 was CAD 3 million. OpEx in 2025 came in at CAD 3.4 million. Now, revenue over that time period was up 75%.
OpEx was up 13%, and recurring free cash flow from 2020 to 2025 was up 188%. You can see, in particular, in this last year where recurring free cash flow was up almost 100%, we're starting to get operating leverage in our business as we increase in scale. I will say that our management expense ratio, which is a typical metric that you'll see for asset managers, is a little different for us because we're a public company, so we're not an LPGP structure. Nevertheless, we look at it internally as a metric to manage our business by, and we're still pretty high at 5%. We feel strongly that the opportunity here for us to continue to scale our business is here. I'll talk about the market and the industry overall in a minute.
As we scale, we'll see increasing operating leverage in our business, driven primarily by the number of people that we need to manage our business, which you'll see we're starting to get that operating leverage. Management expense ratio is still high, but in spite of that, OpEx only up 13% in five years, and free cash flow up 188%. Our net interest margin continues to be good, actually getting even better now as rates are coming down more aggressively in Canada, but also in the U.S. Our asset—or I should say our balance sheet—we carry roughly almost CAD 37 million in equity and about currently about CAD 28 million in debenture or debt, both of which are directly invested into our portfolio. Half of that debt is denominated in US dollars, and half of that debt is denominated in Canadian dollars. We do get the benefit of dropping rates.
While we did offer floating loans while the rates were going up, very few companies availed themselves of that. What you see is we have a fixed—most of our portfolio is fixed interest and not floating. As rates come down, we are benefiting from some increased margins. It is not as big a benefit as the operating leverage we are seeing, but we are seeing some benefit there. Over the last five years, you have seen us work to balance kind of three different pillars of our business, including deal flow, asset to capital, and people. At any given time, we had not enough of one and too much of another. I think, I feel, and it is showing up in our numbers, that we are getting to the stage where we have, I think, a fantastic team.
We have the capacity with the current team on hand to do a lot more business than we're doing. We're also slowly increasing our average deal size from what was in the sometimes sub-CAD 1 million five years ago to, on average—we won't look at a deal now below CAD 2 million US unless it's very special. You are seeing our average deal size creep up, but we have a team that can scale to significantly more capacity. We have access to capital during the year. One of our highlights of the year was we closed a three-year line of credit, a warehouse line, we like to call it, with Triumph Bank in the U.S. I will say they're a fantastic partner, and I'll recommend them to anybody else in our business if you want a recommendation. And deal flow.
Right now, we're actually quite busy in our current pipeline, but deal flow, it's quite lumpy, actually. Sometimes it's excellent. Sometimes it's not so good. It's more a function of yield. Historically, over the last four or five years, we've been seeing about 1,000 top-of-the-funnel leads, and we've been closing on less than 1% of that. To me, that's a function of our focus on quality, frankly, and that's one of the reasons why we continue to have an excellent long-term track record. We've press released in the past. Our five-year rolling top-line performance on our portfolio is in the 24%-26% range in terms of IRR, even better if you go back six and a half years. Back to the name, the NIM is increasing as rates come down. If I look at our portfolio overall, it's in quite good standing.
We did have some right hands this year. Part of that, a big part of that, was mark-to-market on our equity portfolio. Just as a reminder for people maybe new to the story, when we do investments, they're senior-secured loans in high-growth businesses. Our value proposition is primarily directed at high-growth companies, primarily technology companies. When we do a loan, we take a cash interest, very, very little pick. It's cash interest, but the unique aspect is it's non-amortizing, which in our industry is quite unique. Along with that, we take a small sliver of warrants. It might be anywhere from 1%-2% of the company in terms of warrants, and that's really just a function of math in terms of the warrant coverage, the average size of the company. Our loans are capped. We don't do more than one-time JRR for a SaaS company.
We do not do more than 20% of the enterprise value at underwriting. When we underwrite, we get a small sliver of warrants. Our warrant portfolio now is in the mid-2020, 2022-2025. I cannot remember the exact number. Michael can tell me. Our current portfolio at the end of 2024 had 16 names in it. You are seeing us build a treasure trove of these warrant positions in these high-growth companies. Frankly, some work, some do not. On our loans, we are laser-focused on getting repaid. We did have some mark-to-market declines as valuations in our sectors, the segments that we focused on, did come down from 2021, 2022, 2023 to where they are now. They bounced a little in 2024, nevertheless, we had mark-to-market write-downs on some of our non-loan portfolio. We did have two loans that we took additional ECLs on.
They continue to be active businesses. We're working on some restructuring of those companies. You'll see that reflected in our total assets. That's why our book value per share growth was only one penny this year. Overall, our loss ratios continue to be small, and we continue to have excellent top-line performance in the portfolio over both the five and since inception perspective. By the way, again, as a reminder, while this was a turnaround of a different entity, we consider inception to be the date that we changed our name, which was early 2018, to Flow Capital and pivoted into venture debt. That's where we are using our since inception timeline from. In terms of the overall market, it's very interesting. This is a very fast-growing segment of the broader venture ecosystem. You'll see companies are staying private much longer.
I heard a stat. I can't remember exactly where it was from, but there's 4,000 fewer public companies in North America today than there was, I think it was a decade ago. Companies aren't going public. Companies are staying private longer. Certainly, in this AI boom, you're seeing incredibly large funding rounds of private companies, which, unlike anything we've seen in the past, we don't play in that rarefied air, obviously. Broadly speaking, that's applicable to the entire market. In 2024, you saw the venture debt marketplace in the United States, and it's cropped into Canada and Europe as well, grow by 95% in terms of originations. Originations were up to $53 billion in the United States, again, up 95% year-over-year in 2024. There were fewer deals, but larger deal size. You're seeing that trend.
In the space that we play, which is much more of the smaller deal size, we're doing companies with a minimum of CADCAD 3 million in revenue. Average revenue is increasing. It's close to double digits now. As I mentioned before, some of the requirements we have in terms of our types of deals we do. We're seeing more companies turn to venture debt as well. As I mentioned earlier, we've had challenges. We've always been trying to manage our people, our assets to capital in our deal flow. I think the challenge today is just continuing to see those great deals. Since we have a less than 1% close rate, you can see that we continue to be very selective. Some of the mottos here we have are we target zero-zeros, meaning zero losses in our portfolio.
We also understand how hard it is to repay a capital loss of CAD 1 million based on the net interest margin on the rest of your portfolio. We are laser-focused on doing the best quality deals we can find. In spite of that, or because of that, we're still growing profitably, and we're having excellent year-over-year performance. We do feel strongly that the opportunity here is for us to—I mean, look, we're CAD 70 million in assets in an industry that probably does CAD 60 billion in deployments. We have lots and lots of headroom. In fact, in terms of competition, I'd say it's the same. We lose some deals to other term sheets. We sometimes don't—we're in non-competitive bids. We've seen some of the industry players that we used to see leave the industry. They were funded by family offices.
They were not sort of—they were looking at this opportunistically, not as an asset class that they wanted to grow into over the next 10 years or 15 years like we do. We have actually seen some competitors leave. Some of the competitors that were more focused on revenue-based financing, you saw that blow up on the down—the original version of blow up, not the upside, the downside. They exited the industry. I think the bloom on that revenue-based financing rose is long gone. It is not as good for companies as term loans like ours, which are non-amortizing. Arguably, we are seeing less competition, but I would not say we are not seeing any. We are always trying to tailor our rates and our solutions. Frankly, as you are reminded, the way we differentiate primarily is that we are non-amortizing loans.
Most of the loans that companies are getting from competitors might have an interest holiday of six months, twelve months, and then they're amortizing. Our perspective is we pick great companies. We want to be fully deployed for longer. Also, the companies can use our capital for longer because it's non-amortizing, and they pay out in the bullet. When they pay, it's either a refi, it's an M&A transaction. You'll see in Q1, we released a couple of weeks ago, one of our companies was acquired. They'll do an equity raise, or they'll grow and they'll start paying out a cash flow. There are lots of ways for companies to pay us back. I think with that, I'll end my statements for the quarter and open it up for questions.
Thank you. Ladies and gentlemen, we will now begin the question and answer session.
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Thank you, Joanna. Thank you, everybody, for attending and/or for listening to the recording. Again, please feel free to email us or call us at any time. We'll see you in only a couple of short weeks as we report Q1 later on in May. Thank you very much.
Ladies and gentlemen.
Thank you, Operator.
Thank you. This concludes your conference call for today.
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