Core Insights - Gladstone Capital Corporation (GLAD) is a business development company focused on providing debt and equity capital to small and medium-sized businesses, operating within the Zacks Financial - SBIC and Commercial Industry sector [1] Financial Performance - For the quarter ending September 2025, GLAD reported earnings per share (EPS) of $0.52, surpassing the estimated $0.50 and the Zacks Consensus Estimate of $0.51, marking a +1.96% earnings surprise [2][6] - GLAD's revenue for the same quarter was approximately $23.94 million, exceeding the estimated $22.72 million and the Zacks Consensus Estimate by 5.09%, showing a slight increase from $23.71 million reported in the same quarter last year [3][6] - The company experienced a 10.5% increase in total investment income, rising from $21.7 million in the previous quarter to $23.9 million, while net investment income rose by 1.3% to $11.4 million despite a 20.5% increase in total expenses [4] Shareholder Returns - Cash distribution per common share grew by 18% to $0.59, reflecting GLAD's commitment to returning value to shareholders [4][6] Financial Metrics - GLAD's financial metrics indicate a strong position with a price-to-earnings (P/E) ratio of approximately 5.53, a price-to-sales ratio of about 4.38, and an enterprise value to sales ratio of 7.17 [5] - The company has an earnings yield of approximately 18.08% and a debt-to-equity ratio of 0.58, demonstrating a moderate level of debt and strong liquidity, as indicated by a current ratio of 4.66 [5]

Core Insights - Gladstone Capital (GLAD) reported quarterly earnings of $0.52 per share, exceeding the Zacks Consensus Estimate of $0.51 per share, and showing an increase from $0.50 per share a year ago, resulting in an earnings surprise of +1.96% [1] - The company generated revenues of $23.94 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 5.09%, and showing a slight increase from $23.71 million year-over-year [2] - The stock has underperformed significantly, losing about 32.1% since the beginning of the year compared to the S&P 500's gain of 14.5% [3] Earnings Outlook - The future performance of Gladstone Capital's stock will largely depend on management's commentary during the earnings call and the revisions of earnings estimates [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $24.18 million, and for the current fiscal year, it is $1.98 on revenues of $101.56 million [7] Industry Context - The Financial - SBIC & Commercial Industry, to which Gladstone Capital belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests that the performance of stocks is closely tied to trends in earnings estimate revisions, with a strong correlation observed [5]

Investment Income - Total investment income for Q4 2025 was $23.9 million, a 10.5% increase from $21.7 million in Q3 2025[3] - Net investment income for Q4 2025 was $11.4 million, or $0.52 per share, compared to $11.3 million, or $0.50 per share in Q3 2025, reflecting a 1.3% increase[3][8] - For the fiscal year ended September 30, 2025, total investment income was $89.1 million, a decrease of 7.8% from $96.6 million in 2024[4][10] Cash Distribution - Cash distribution per common share increased to $0.59 in Q4 2025, up 18.0% from $0.50 in Q3 2025[3] Expenses - Total expenses for Q4 2025 rose to $12.5 million, a 20.5% increase from $10.4 million in Q3 2025, primarily due to higher interest expenses[3][6] Investments - Total investments at fair value increased to $859.1 million as of September 30, 2025, a 14.4% increase from $751.3 million as of June 30, 2025[3] - The company invested $106.7 million in five new portfolio companies during Q4 2025[7] Net Assets - The net increase in net assets resulting from operations for FY 2025 was $57.2 million, or $2.56 per share, down from $94.5 million, or $4.34 per share in FY 2024[4][13] Yield - The weighted average yield on interest-bearing investments decreased to 12.5% in Q4 2025 from 12.8% in Q3 2025[3][5] Financing - The company issued 5.875% Convertible Notes due 2030, raising gross proceeds of $149.5 million[7]

Group 1 - The article does not provide any specific information or data regarding companies or industries [1]

MCLEAN, VA / ACCESS Newswire / November 17, 2025 / Gladstone Capital Corporation (Nasdaq:GLAD) (the "Company") today announced earnings for its fourth quarter and fiscal year ended September 30, 2025. Please read the Company's Annual Report on Form 10-K filed today with the U.S. Securities and Exchange Commission (the "SEC"), which is available on the SEC's website at www.sec.gov and the Investors section of the Company's website at www.GladstoneCapital.com. ...

Investment Portfolio Overview - As of September 30, 2025, the total investment portfolio had an aggregate fair value of $859.1 million, consisting of investments in 55 companies across 22 states and 16 different industries[31]. - The five largest investments at fair value totaled $196.5 million, representing 22.9% of the total investment portfolio[31]. - The investment portfolio comprised approximately 90.9% in debt investments and 9.1% in equity investments at cost[24]. - Secured first lien debt investments accounted for $646.1 million, or 73.7% of the total cost of debt investments as of September 30, 2025[32]. - The total cost of debt investments was $796.6 million, representing 90.9% of the total investments[32]. - Preferred equity investments were valued at $37.4 million, or 4.3% of total investments as of September 30, 2025[32]. - Common equity/equivalents were valued at $42.6 million, or 4.8% of total investments as of September 30, 2025[32]. - As of September 30, 2025, total investments at fair value reached $859,124 million, an increase from $796,260 million in 2024, representing a growth of 7.9%[34]. - The healthcare, education, and childcare sector accounted for 31.8% of total investments in 2025, up from 12.8% in 2024, indicating a significant strategic shift[34]. - The diversified/conglomerate manufacturing sector saw an increase in fair value from $160,264 million in 2024 to $202,466 million in 2025, representing a growth of 26.4%[34]. Investment Strategy and Focus - The investment strategy focuses on lower middle market companies with annual EBITDA between $3 million and $25 million[23]. - The company has invested in approximately 292 different companies since its initial public offering in 2001[28]. - Experienced management teams are a critical criterion for investment, with a focus on aligning management incentives with investor interests[39]. - The investment committee, comprising seasoned professionals with over 30 years of experience, plays a crucial role in the investment approval process[42]. - The company conducts extensive due diligence, including financial analysis and management assessments, to evaluate potential investments[37]. - The investment structure typically includes secured first lien debt and preferred equity, aimed at maximizing returns while managing risks[40]. Financial Management and Fees - The base management fee is set at an annual rate of 1.75%, based on the average total assets, with a potential reduction to 0.5% for syndicated loan participations[61]. - The income-based incentive fee is applicable if quarterly net investment income exceeds 1.75% of net assets, with a tiered structure for additional income[63]. - The capital gains-based incentive fee is 20% of net realized capital gains, with no fees recorded since inception through September 30, 2025, due to cumulative unrealized capital depreciation[65]. - The Adviser provides significant managerial assistance to portfolio companies, with fees credited against the base management fee[62]. - The company’s Board of Directors approved the renewal of the Advisory Agreement through August 31, 2026, considering the quality of services and investment performance[58]. Compliance and Regulatory Requirements - The company must distribute at least 90.0% of its taxable ordinary income and realized net short-term capital gains to qualify as a RIC[73]. - At least 90.0% of the company's gross income must come from specific sources to maintain its BDC status[77]. - The company must ensure that no more than 25% of its total assets are invested in the securities of one issuer[77]. - The company is required to maintain an asset coverage of at least 150% for its senior securities representing indebtedness[91]. - The company is subject to asset coverage ratio requirements under the 1940 Act, which could restrict distributions necessary to maintain RIC status[167]. Risks and Challenges - The company faces risks related to market conditions, including volatility in capital markets and potential impacts on valuations of investments[95]. - The company may experience fluctuations in results due to inflation affecting its portfolio companies[106]. - The company has significant potential conflicts of interest, which could impact investment returns[95]. - The company may face challenges in raising capital due to market volatility and credit conditions[103]. - The company is exposed to risks from investments in foreign portfolio companies, including political instability and currency fluctuations[141][142]. - The company operates in a highly competitive market for investment opportunities, facing pressure from larger entities with greater financial resources[116]. Debt and Leverage - As of September 30, 2025, the company incurred leverage through various debt instruments totaling $428.1 million at cost, with an effective annual cash interest rate of 5.6%[165]. - The company has a Credit Facility with maximum borrowings of $320.0 million, with no outstanding borrowings as of September 30, 2025[153]. - The Credit Facility requires the company to maintain a minimum net worth of $581.0 million as of September 30, 2025, and asset coverage of at least 150%[154]. - The company may issue equity to repay amounts outstanding under the Credit Facility, which could lead to substantial dilution for existing stockholders[157]. - The company has incurred leverage to generate capital for additional investments, which may be at risk if asset values decline[179]. Valuation and Performance Monitoring - The Valuation Team assesses fair value of investments quarterly, with oversight from the Board of Directors[54]. - The company’s net asset value (NAV) could be materially affected by fair value determinations of investments[57]. - The fair value of privately held securities may not be readily determinable, leading to fluctuations in reported values over time[121]. - The lack of liquidity in privately held investments may hinder the company's ability to quickly obtain cash equal to the recorded value of its investments[125]. - The company maintains ongoing monitoring of portfolio companies to ensure performance aligns with expectations and to identify best practices[50]. Distributions and Tax Implications - Distributions to U.S. stockholders attributable to Investment Company Taxable Income are generally taxable as ordinary income[79]. - The company intends to allocate capital gain distributions proportionately between common and preferred shares based on total distributions paid[80]. - The company intends to distribute at least 90.0% of its Investment Company Taxable Income to stockholders through monthly distributions[203]. - Distributions may include a return of capital, which could affect stockholders' tax liabilities and reduce the company's asset base[205][206]. - The company may not declare dividends or repurchase shares until asset coverage tests under the 1940 Act are satisfied[176].

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Core Insights - The Conservative Income Portfolio aims to target high-value stocks with significant margins of safety while utilizing well-priced options to reduce investment volatility [1] - The Enhanced Equity Income Solutions Portfolio is designed to generate yields between 7-9% while minimizing volatility [1] - Recent months have been challenging for income investors, particularly in the BDC asset class, which has seen significant declines [1] - The Covered Calls Portfolio focuses on lower volatility income investing with an emphasis on capital preservation [1] - The fixed income portfolio is centered on acquiring securities that offer high income potential and are heavily undervalued compared to peers [1] Company Overview - Trapping Value is a team of analysts with over 40 years of combined experience in generating options income while prioritizing capital preservation [2] - The Conservative Income Portfolio is managed in partnership with Preferred Stock Trader, featuring two income-generating portfolios and a bond ladder [2]

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Core Points - Gladstone Capital Corporation announced monthly cash distributions of $0.15 per share for common stock for October, November, and December 2025 [1] - The company plans to report earnings for its fourth fiscal quarter ended September 30, 2025 [1] Cash Distributions - Monthly cash distribution of $0.15 per share for common stock for each of the months: October, November, and December 2025 [1]