Financial Performance - The Board of Directors approved a fourth quarter 2025 dividend of $0.26 per share[25] - Net investment income for the quarter ended September 30, 2025, was $0.32 per share[25] - Net asset value (NAV) as of September 30, 2025, was $11.10 per share, compared to $11.18 per share as of June 30, 25, a decrease of 0.8%[25, 60] - Total investment income was $72.4 million[27] - Net income was $23.6 million[27] Portfolio Composition and Performance - Total originations during the quarter were $149 million, while sales and repayments totaled $230 million, for net repayments of $81 million[25] - The weighted-average portfolio yield as of September 30, 2025, was 9.9%[25] - The investment portfolio at fair value was $2,536.3 million[27] - Non-accruals represented 0.4% of the total portfolio at fair value[25] - First lien investments accounted for 70% of the portfolio[30] - Sponsored investments accounted for 78% of the portfolio[35]

Core Insights - Barings BDC reported quarterly earnings of $0.32 per share, exceeding the Zacks Consensus Estimate of $0.27 per share, and showing an increase from $0.29 per share a year ago, resulting in an earnings surprise of +18.52% [1] - The company generated revenues of $72.4 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.45% and up from $70.85 million year-over-year [2] - Barings BDC has outperformed consensus EPS estimates two times in the last four quarters and has topped consensus revenue estimates three times in the same period [2] Earnings Outlook - The sustainability of Barings BDC's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $68.6 million, while for the current fiscal year, the estimate is $1.07 on revenues of $278.1 million [7] Industry Context - The Financial - SBIC & Commercial Industry, to which Barings BDC belongs, is currently ranked in the bottom 23% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Barings BDC's stock performance [5]

Investment Portfolio - As of September 30, 2025, the total value of the investment portfolio was $2,536.3 million, an increase from $2,449.3 million as of December 31, 2024[418] - The company had investments in 333 portfolio companies with an aggregate cost of $2,564.0 million as of September 30, 2025, compared to 328 companies and $2,522.7 million as of December 31, 2024[418] - As of September 30, 2025, the total investment portfolio fair value was $2,536.3 million, with senior debt and first lien notes comprising 70% of the portfolio[419] - The total cost of the investment portfolio as of September 30, 2025, was $2,564.0 million, with equity shares accounting for 15% of the total cost[419] - The fair value of the investment portfolio as of December 31, 2024, was $2,449.3 million, with senior debt and first lien notes also comprising 69% of the portfolio[419] Investment Performance - During the nine months ended September 30, 2025, the company made 47 new investments totaling $356.6 million and recognized a net realized loss of $27.7 million from 32 loan repayments totaling $187.0 million[420] - The company recognized a net realized gain of $3.9 million from the sale of equity investments totaling $25.9 million during the nine months ended September 30, 2025[420] - The company received $124.5 million in principal payments and sales proceeds from portfolio companies, with a net realized loss of $0.2 million on these transactions[420] - The net realized losses for the three months ended September 30, 2025, totaled $1.3 million, compared to net realized losses of $10.9 million for the same period in 2024, representing an improvement of 88.01%[450][452] - During the nine months ended September 30, 2025, net realized losses amounted to $17.5 million, a decrease from $24.3 million in the same period of 2024, reflecting a 28.68% improvement[450][459] Income and Expenses - Total investment income for the three months ended September 30, 2025, was $72.4 million, a slight increase from $70.9 million for the same period in 2024[437] - Net investment income after taxes for the three months ended September 30, 2025, was $33.6 million, compared to $30.2 million for the same period in 2024, reflecting a year-over-year increase of 8.0%[437] - Total operating expenses for the three months ended September 30, 2025, were $37.5 million, a decrease from $39.6 million in the same period of 2024[440] - Interest and other financing fees for the three months ended September 30, 2025, were $21.5 million, down from $22.6 million in the same period of 2024, primarily due to a lower weighted average interest rate[441] - Dividends from portfolio companies for the three months ended September 30, 2025, were $14.2 million, compared to $9.8 million for the same period in 2024, representing a 45.0% increase[439] Debt and Financing - The company had borrowings under the February 2019 Credit Facility of £48.6 million ($65.4 million) and €245.6 million ($288.6 million) with interest rates of 5.875% and 3.750% respectively[465] - The fair value of the borrowings outstanding under the February 2019 Credit Facility was $354.0 million as of September 30, 2025[466] - The company issued $50.0 million in Series A senior unsecured notes due August 2025 with a fixed interest rate of 4.66%[467] - The November 2020 NPA included $62.5 million in Series B senior unsecured notes due November 2025 and $112.5 million in Series C senior unsecured notes due November 2027, with fixed interest rates of 4.25% and 4.75% respectively[472] - The company entered into a $300.0 million notional value interest rate swap with a fixed rate interest of 5.20% and a payment based on SOFR plus 2.059%, maturing on September 15, 2028[502] Cash and Liquidity - As of September 30, 2025, the company had $83.2 million in cash and foreign currencies on hand, including $12.9 million of restricted cash[459] - The company experienced a net cash decrease of $8.1 million for the nine months ended September 30, 2025, driven by significant cash outflows from operating activities[459] - For the nine months ended September 30, 2025, cash used in operating activities was $44.0 million, primarily due to portfolio investments purchases totaling $561.6 million[459] - The total unused commitments to extend financing amounted to $20,000, with specific commitments including $1,031 for Accelevation LLC and $1,671 for Accurus Aerospace Corporation[538] Shareholder Returns - The company authorized a new share repurchase program on February 20, 2025, allowing for the repurchase of up to $30.0 million in common stock, effective until March 1, 2026[504] - During the nine months ended September 30, 2025, the company repurchased 250,000 shares at an average price of $9.35 per share[504] - The company intends to pay quarterly distributions, with a declared distribution of $0.26 per share payable on December 10, 2025[511] - The company has adopted a dividend reinvestment plan (DRIP) for stockholders, allowing for automatic reinvestment of dividends unless opted out[505] Risk and Valuation - The fair value of investments is determined using Level 3 inputs for privately held companies, with independent valuations performed quarterly for certain loans and equity investments[524] - The company may need to distribute income to stockholders to meet minimum distribution requirements, even for non-accrual investments[530] - The fair value of investments in certain LLCs is estimated using NAV and ownership percentage due to the lack of readily determinable fair values[526] - A hypothetical increase of 300 basis points in interest rates would result in an increase in net income by $30,692 thousand, while a decrease of 50 basis points would lead to a decrease in net income by $5,115 thousand[551]

Financial Performance - For Q3 2025, Barings BDC reported net investment income of $33.6 million, or $0.32 per share, compared to $29.8 million, or $0.28 per share in Q2 2025, reflecting a 13.4% increase in per share income [2]. - The total investment income for the quarter was $72.4 million, leading to a net increase in net assets from operations of $23.6 million, or $0.22 per share [5]. - Net investment income after taxes for the three months ended September 30, 2025, was $33,613,000, compared to $30,185,000 for the same period in 2024, representing an increase of approximately 8.05% [30]. - Total investment income for the three months ended September 30, 2025, was $72,404,000, compared to $70,851,000 for the same period in 2024, indicating a growth of about 2.18% [30]. - The net increase in net assets resulting from operations for the three months ended September 30, 2025, was $23,550,000, compared to $22,020,000 for the same period in 2024, an increase of approximately 6.95% [32]. - Net realized gains on investments for the three months ended September 30, 2025, were $1,615,000, compared to a loss of $8,543,000 in the same period of 2024, showing a significant turnaround [32]. Investment Portfolio - The investment portfolio at fair value decreased to $2,536.3 million as of September 30, 2025, down from $2,623.9 million as of June 30, 2025, representing a decline of approximately 3.3% [4]. - Barings BDC made 14 new investments totaling $78.6 million and invested an additional $70.2 million in existing portfolio companies during the quarter [7]. - The company recorded net unrealized depreciation of $8.8 million in Q3 2025, primarily due to a $17.3 million depreciation on the current portfolio [8]. - Total investments at fair value rose to $2,536,315,000, up from $2,449,272,000, marking an increase of about 3.55% [28]. Assets and Liabilities - As of September 30, 2025, Barings BDC had total assets of $2,821.9 million, an increase from $2,793.3 million as of June 30, 2025 [4]. - Total assets increased to $2,821,892,000 as of September 30, 2025, compared to $2,695,660,000 as of December 31, 2024, reflecting a growth of approximately 4.68% [28]. - Total liabilities increased to $1,655,097,000 as of September 30, 2025, from $1,505,306,000 as of December 31, 2024, reflecting a rise of about 9.93% [28]. Debt and Equity - The debt-to-equity ratio increased to 1.40x as of September 30, 2025, compared to 1.34x as of June 30, 2025, indicating a higher leverage position [4]. - Total debt (principal) as of September 30, 2025, increased to $1,628,981 thousand from $1,572,313 thousand as of June 30, 2025 [35]. - Total net debt as of September 30, 2025, was $1,464,843 thousand, reflecting a decrease from $1,516,433 thousand as of June 30, 2025 [35]. - The total net debt-to-equity ratio improved slightly to 1.26x as of September 30, 2025, compared to 1.29x as of June 30, 2025 [35]. Dividends - Barings BDC declared a quarterly cash dividend of $0.26 per share, payable on December 10, 2025 [12]. - Regular quarterly dividends per share remained stable at $0.26 for both the three months ended September 30, 2025, and 2024 [32]. - Total dividends per share increased to $0.31 for the three months ended September 30, 2025, compared to $0.26 for the same period in 2024, marking a growth of approximately 19.23% [32]. Cash Flow - Net cash used in operating activities for the nine months ended September 30, 2025, was $(43,985) thousand, a significant decrease compared to $167,318 thousand for the same period in 2024 [34]. - Cash and foreign currencies at the end of the period were $83,206 thousand, up from $65,994 thousand at the end of the same period in 2024 [34]. - Cash paid for interest during the nine months ended September 30, 2025, was $60,376 thousand, compared to $52,942 thousand for the same period in 2024 [34]. - Cash dividends/distributions paid increased to $97,906 thousand for the nine months ended September 30, 2025, from $82,606 thousand in the same period of 2024 [34]. - Purchases of portfolio investments rose significantly to $(561,582) thousand for the nine months ended September 30, 2025, compared to $(345,954) thousand for the same period in 2024 [34]. - Net realized gains on investments increased to $27,200 thousand for the nine months ended September 30, 2025, from $17,644 thousand in the same period of 2024 [34]. - Proceeds from derivative contracts increased to $25,402 thousand for the nine months ended September 30, 2025, compared to $8,296 thousand for the same period in 2024 [34].

Core Points - Barings BDC, Inc. declared a quarterly cash dividend of $0.26 per share for the quarter ending December 31, 2025 [1] - The company will report its financial results for the third quarter ended September 30, 2025, on November 6, 2025, after market close [1] - A conference call is scheduled to discuss the third quarter results [1]

Core Insights - Investors are particularly attracted to dividend stocks with ultra-high yields due to their ability to provide significant income streams and substantial total return potential [1] Summary by Category - **Investor Preferences** - Dividend stocks are favored by investors for their high yields [1] - These stocks are seen as a reliable source of income [1] - **Return Potential** - Dividend stocks not only offer income but also have the potential for substantial total returns [1]

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Financial Data and Key Metrics Changes - Net asset value per share was $11.18, reflecting a 1% decline quarter over quarter [25] - Net investment income for the quarter was $0.28 per share, an increase from $0.25 per share in the prior quarter [12][27] - The weighted average yield at fair value remained unchanged at 10.1% [14] - The net leverage ratio was 1.29 times at quarter end, up from 1.24 times as of March 31 [28] Business Line Data and Key Metrics Changes - Gross originations were nearly $200 million, with net originations of $32 million [6] - Barings originated positions now make up 95% of the BBDC portfolio at fair value, up from 76% in 2022 [13] - Non-accrual rate improved to 50 basis points at fair value, well below industry averages [13][23] Market Data and Key Metrics Changes - The portfolio consists of 74% secured investments, with approximately 71% being first lien securities [21] - Interest coverage within the portfolio was 2.4 times, above industry averages [21] Company Strategy and Development Direction - The company focuses on core middle market investments due to lower leverage and stronger risk-adjusted returns [6] - Emphasis on sectors that perform resiliently across economic environments to provide stability [6] - The company maintains a cautious optimism about the broader economy and is well-positioned to withstand various economic developments [7][16] Management's Comments on Operating Environment and Future Outlook - The economic outlook remains uncertain, but the company believes its durable portfolio construction will help navigate future challenges [16] - Management noted that macroeconomic events have not historically produced widespread defaults, with idiosyncratic risks being more significant [20] - The company expects increased M&A activity in the latter half of the year based on current market indicators [11] Other Important Information - The Board declared a third-quarter dividend of $0.26 per share, consistent with the prior quarter [14][30] - The company repurchased 100,000 shares during the quarter, totaling 250,000 shares under the current plan [31] Q&A Session Summary Question: Can you expand on the profile of sales to Jakafi and overall leverage? - Management indicated that Jakafi has ample liquidity to absorb incremental investments and that they will continue to run leverage towards the higher end of their range due to strong credit quality [35][40] Question: How does the new name ScreenVision fit into the Barings platform? - Management noted that there is significant collaboration across investment teams, with a centralized sourcing process [43][44] Question: What percentage of originations were follow-ons versus new borrowers? - Approximately 60-70% of originations were follow-ons for existing borrowers [50] Question: How is the pipeline looking after the second quarter? - Management expressed optimism about forward visibility on origination, despite the same economic outlook as previous years [52] Question: How sustainable is the dividend given the forward curve? - Management expressed confidence in earning the dividend based on the current SAFR curve, despite potential changes due to rate cuts [60][62] Question: What is the current state of credit in the cycle? - Management indicated a constructive setup for credit, with modest growth and stable inflation, but acknowledged uncertainty in the future [63] Question: How is the share repurchase program being managed? - Management explained that tactical elements and blackout periods influence share repurchase activity, but they remain focused on shareholder accretive activities [68][70] Question: Is August seeing increased deal activity? - Management noted that while the pipeline is higher, it is too early to declare August as one of the busiest months [72][75]

Financial Performance - Barings BDC's net asset value (NAV) as of June 30, 2025, was $11.18 per share, compared to $11.29 per share as of March 31, 2025, representing a 1.0% decrease[26] - The Board of Directors approved a third quarter 2025 regular dividend of $0.26 per share, along with a previously declared special dividend of $0.05 per share[26] - Net investment income for the quarter ended June 30, 2025, was $0.28 per share[26] Portfolio Composition and Activity - Total originations during the quarter were $199 million, while sales and repayments totaled $167 million, resulting in net originations of $32 million[26] - The weighted-average portfolio yield as of June 30, 2025, was 10.1%[26] - Total non-accruals represented 0.5% of the total portfolio at fair value[26] - Sponsored and Non-Sponsored corporate issuers accounted for 86% of the BBDC portfolio as of June 30, 2025[35] - The top issuer accounted for 5.9% of exposure, and the top 10 issuers accounted for 23.4% of the portfolio as of June 30, 2025[37] - Approximately 84% of the portfolio is comprised of secured assets, considering the look-through exposure of investments in Eclipse and Rocade[38] Capital Structure and Liquidity - Debt-to-equity as of June 30, 2025, was 1.34x, or 1.29x after adjusting for unrestricted cash and foreign currencies and net unsettled transactions[64] - Barings LLC made a $23 million payment during 2Q25 related to the MVC CSA termination[56] - Barings manages over $50 billion in direct lending platform[13]

Core Viewpoint - Barings BDC reported quarterly earnings of $0.28 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, but down from $0.4 per share a year ago, indicating a mixed performance in earnings despite a positive surprise this quarter [1][2]. Financial Performance - The company achieved revenues of $74.4 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 10.32%, although this is a slight decrease from $74.89 million in the same quarter last year [2]. - Over the last four quarters, Barings BDC has exceeded consensus revenue estimates three times [2]. Stock Performance - Barings BDC shares have declined approximately 2.8% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3]. - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.27 on revenues of $66.19 million, and for the current fiscal year, it is $1.04 on revenues of $262.21 million [7]. - The trend of earnings estimate revisions prior to the earnings release was mixed, indicating potential volatility in future estimates [6]. Industry Context - The Financial - SBIC & Commercial Industry, to which Barings BDC belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting a challenging environment for the sector [8].