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Financial Performance - GAAP net investment income was $041 per share, and adjusted net investment income was $040 per share for the quarter ended September 30, 2025[7] - A quarterly cash distribution of $040 per share was declared[7] - NAV was $1664 per share, a slight decrease from $1676 per share in the previous quarter[7] Portfolio and Investment Activity - The portfolio's fair value was $28 billion across 143 portfolio companies[7] - The weighted average yield on debt investments was 98%[7] - 86% of the portfolio was senior secured debt, with 83% in first lien loans[7] - 91% of the debt portfolio was floating rate[7] - New investment commitments totaled $208 million, with $220 million in new investment fundings[7] - Proceeds from prepayments, exits, and sales amounted to $177 million[7] - The weighted average yield on new debt commitments was 97%[7, 15] Liquidity and Capital Structure - The net debt to equity ratio was 097x, up from 093x in the prior quarter[7] - Available liquidity was $695 million, including $80 million in cash and $615 million of undrawn capacity on the credit facility[7] - The weighted average interest rate on debt outstanding was 65%, inclusive of interest rate swaps[7]

Core Viewpoint - Oaktree Specialty Lending (OCSL) reported quarterly earnings of $0.4 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, but down from $0.55 per share a year ago, indicating a mixed performance in earnings despite a positive surprise this quarter [1][2]. Financial Performance - The company posted revenues of $77.32 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.22%, but down from $94.68 million year-over-year [2]. - Over the last four quarters, OCSL has only surpassed consensus EPS estimates once and has topped consensus revenue estimates just once as well [2]. Stock Performance - Oaktree Specialty Lending shares have declined approximately 12.8% since the beginning of the year, contrasting with the S&P 500's gain of 13.4% [3]. - The stock's immediate price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.38 on revenues of $78.42 million, and for the current fiscal year, it is $1.55 on revenues of $312.74 million [7]. - The estimate revisions trend for OCSL was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting expected outperformance in the near future [6]. Industry Context - The Financial - Miscellaneous Services industry, to which OCSL belongs, is currently ranked in the top 33% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8].

Investment Income - Total investment income for Q4 2025 was $77.3 million ($0.88 per share), an increase from $75.3 million ($0.85 per share) in Q3 2025[2] - Full year total investment income was $316.8 million ($3.68 per share), down from $381.7 million ($4.75 per share) in 2024, primarily due to lower interest income and dividend income[2] - GAAP total investment income for the year ended September 30, 2025, was $316,801,000, with a per share amount of $3.68, compared to $381,665,000 and $4.75 per share for the previous year[32] - Adjusted total investment income for the three months ended September 30, 2025, was $76,866,000, representing a per share amount of $0.87, compared to $74,297,000 and $0.84 for the same period in 2024[32] Net Investment Income - GAAP net investment income for Q4 2025 was $35.8 million ($0.41 per share), compared to $33.5 million ($0.38 per share) in Q3 2025[2] - Adjusted net investment income for Q4 2025 was $35.4 million ($0.40 per share), up from $32.5 million ($0.37 per share) in Q3 2025[11] - Adjusted net investment income for the full year ended September 30, 2025, was $151.3 million ($1.76 per share), down from $179.3 million ($2.23 per share) for the previous year, reflecting a decline of $28.0 million[12] - Net investment income for the three months ended September 30, 2025, was $35,802 million, compared to $33,481 million in the previous quarter and $44,921 million in the same quarter last year[41] Investment Commitments - The company originated $208.2 million in new investment commitments during Q4 2025, with a weighted average yield of 9.7%[2] - New investment commitments for the quarter ended September 30, 2025, totaled $208.2 million, compared to $147.2 million in the previous quarter[14] Debt and Liquidity - Total debt outstanding was $1,495.0 million as of September 30, 2025, with a total debt to equity ratio of 1.02x[2] - Liquidity included $79.6 million in unrestricted cash and $615 million in undrawn capacity under the credit facility as of September 30, 2025[2] - The Company's total debt to equity ratio was 1.02x as of September 30, 2025, up from 0.99x as of June 30, 2025[26] - The Company had $79.6 million of unrestricted cash and cash equivalents and $615.0 million of undrawn capacity on its credit facility as of September 30, 2025[25] Asset Valuation - As of September 30, 2025, the fair value of the investment portfolio was $2.8 billion, consisting of investments in 143 companies, including 124 debt investments and 35 equity investments[17] - Total investments at fair value decreased to $2,847,782 as of September 30, 2025, from $3,021,279 on September 30, 2024, a decline of 5.7%[39] - Control investments at fair value decreased to $227,748 as of September 30, 2025, from $289,404 on September 30, 2024, a decline of 21.3%[39] Earnings and Expenses - Total expenses for the three months ended September 30, 2025, were $43,146 million, down from $47,093 million in the previous quarter and $51,742 million year-over-year[41] - The company reported a net increase in net assets resulting from operations of $24,578 million for the three months ended September 30, 2025, down from $38,352 million in the previous quarter and $36,913 million year-over-year[41] - Earnings per common share for the three months ended September 30, 2025, was $0.28, compared to $0.44 in the previous quarter and $0.45 year-over-year[41] Market Outlook and Risks - The company remains disciplined in underwriting and selective in deploying capital amid an uncertain market outlook[3] - Forward-looking statements indicate potential risks including economic disruptions, changes in laws, and geopolitical conflicts that could impact future performance[36] Company Information - Oaktree Specialty Lending Corporation focuses on providing customized credit solutions to companies with limited access to capital markets[35] - The company is regulated as a business development company under the Investment Company Act of 1940[35] - The company will host a conference call on November 18, 2025, to discuss its fourth fiscal quarter and full year results[33] - Investor relations contact for Oaktree Specialty Lending Corporation is Clark Koury at (213) 830-6222[37]

Core Insights - Oaktree Specialty Lending Corporation reported financial results for the fourth fiscal quarter and full year ended September 30, 2025, showing progress in stabilizing its investment portfolio despite market challenges [1][3]. Financial Highlights - Total investment income for Q4 2025 was $77.3 million ($0.88 per share), compared to $75.3 million ($0.85 per share) in Q3 2025, while full-year total investment income was $316.8 million ($3.68 per share), down from $381.7 million ($4.75 per share) in 2024 [6][9]. - Net investment income for Q4 2025 was $35.8 million ($0.41 per share), an increase from $33.5 million ($0.38 per share) in Q3 2025, but down from $175.1 million ($2.18 per share) for the full year 2024 to $152.6 million ($1.77 per share) in 2025 [6][13]. - The company declared a quarterly distribution of $0.40 per share, payable on December 31, 2025 [3][6]. Operational Results - The company originated $208.2 million in new investment commitments and received $177.0 million from prepayments and exits during Q4 2025 [6][18]. - The weighted average yield on new debt investments was 9.7% [6][19]. - As of September 30, 2025, the fair value of the investment portfolio was $2.8 billion, consisting of investments in 143 companies [18][19]. Balance Sheet and Debt - Total debt outstanding was $1,495.0 million, with a total debt to equity ratio of 1.02x and a net debt to equity ratio of 0.97x [6][26]. - The company had $79.6 million in unrestricted cash and cash equivalents and $615 million in undrawn capacity under its credit facility [25][26]. Investment Activity - The investment portfolio included 94.6% in debt investments, with 83.5% in first lien loans [19][20]. - There were ten investments on non-accrual status, representing 6.5% of the debt portfolio at cost [20][21]. Performance Metrics - Adjusted total investment income for Q4 2025 was $76.9 million, reflecting a $2.6 million increase from Q3 2025, primarily due to higher prepayment fees and dividend income [6][9]. - Adjusted net investment income for Q4 2025 was $35.4 million ($0.40 per share), up from $32.5 million ($0.37 per share) in Q3 2025 [12][13].

Investment Portfolio - As of September 30, 2025, the company held $2,847.8 million in investments at fair value, a decrease from $3,021.3 million as of September 30, 2024, primarily due to investment repayments and net realized and unrealized losses[412] - Approximately 94.8% of total assets as of September 30, 2025, represented investments at fair value, compared to 94.5% as of September 30, 2024[413] - The investment strategy targets companies with resilient business models and strong underlying fundamentals, particularly in the middle market[400] - The investment portfolio composition at cost as of September 30, 2025 was 83.11% in senior secured debt, 5.39% in debt investments in joint ventures, and 4.53% in common equity and warrants[420] - The fair value of senior secured debt increased to 85.88% of total investments as of September 30, 2025, compared to 85.21% in the previous year[420] - The company’s investment portfolio includes loans, common and preferred equity, and warrants, with loans typically secured by a first, second, or subordinated lien on the assets of the portfolio company[418] - The industry composition of the portfolio at cost showed an increase in Application Software investments to 17.64% as of September 30, 2025, up from 16.85% in 2024[422] - The company’s investments in Health Care Services increased to 5.21% at cost as of September 30, 2025, compared to 4.77% in the previous year[422] Financial Performance - For the year ended September 30, 2025, the company originated $960.5 million of investment commitments across 43 new and 32 existing portfolio companies, funding a total of $970.8 million in investments[419] - As of September 30, 2025, the total investment income was $316.8 million, a decrease of $64.9 million or 17.0% compared to $381.7 million for the year ended September 30, 2024[439] - Net investment income for the year ended September 30, 2025 decreased by $22.4 million compared to 2024, primarily due to a decrease in total investment income[441] - The company recorded net realized losses of $17.1 million for the year ended September 30, 2025, significantly lower than the $136.4 million in losses recorded in 2024[443] - For the year ended September 30, 2025, net unrealized depreciation was $(101.2) million, compared to a net unrealized appreciation of $19.1 million in 2024[445] - Net expenses for the year ended September 30, 2025 were $163.3 million, down by $43.3 million or 21.0% from $206.6 million in 2024[440] Macroeconomic Environment - The current macroeconomic environment includes increased volatility, higher inflation, and elevated interest rates, impacting overall market supply and demand[398] - The company continues to monitor macroeconomic events and their effects on its business and portfolio companies, providing constructive solutions as necessary[399] Debt and Financing - The company had $1,495.0 million in senior securities as of September 30, 2025, with an asset coverage ratio of 197.50%[448] - The company reported total debt of $1.660 billion as of September 30, 2024, decreasing to $1.495 billion by September 30, 2025[457] - The company had $615.0 million of undrawn capacity on credit facilities as of September 30, 2025[453] - The company had $286.0 million in unfunded commitments as of September 30, 2025, with $258.9 million allocated for debt and equity financing to portfolio companies[455] - The company issued $300.0 million in aggregate principal amount of the 2029 Notes on August 15, 2023, with net proceeds of $292.9 million[484] - The company reported a minimum shareholders' equity of $1,476 million against a target value of $871 million as of June 30, 2025, indicating strong compliance with financial covenants[474] Interest Rates and Risk Management - The company reported that a 250 basis point increase in interest rates would result in a net increase in net assets from operations of approximately $24.245 million[503] - The percentage of qualified net interest income for the year ended September 30, 2025, was 93.1%[496] - The company’s risk management procedures are designed to identify and analyze financial market risks, including interest rate risk[501] - The company’s interest-bearing cash and investments as of September 30, 2025, included $938.764 million indexed to the SOFR[504] - As of September 30, 2025, 90.7% of the debt investment portfolio (at fair value) bore interest at floating rates, compared to 88.4% as of September 30, 2024[502] Shareholder Distributions - The company declared a quarterly distribution of $0.55 per share on November 8, 2023, amounting to $41.7 million in cash distribution[469] - The company declared a quarterly distribution of $0.40 per share, payable in cash on December 31, 2025, to stockholders of record on December 15, 2025[498] - The company has adopted a Dividend Reinvestment Plan (DRIP) allowing stockholders to reinvest cash distributions into additional shares of common stock[496] Management and Advisory - The company is externally managed by Oaktree, which provides investment advisory and administrative services[393] - The company has entered into related party transactions with Oaktree, which includes an Investment Advisory Agreement[497]

Core Insights - Investors are increasingly turning to dividend-yielding stocks during market turbulence and uncertainty, as these companies typically have high free cash flows and offer substantial dividend payouts [1] Company Summaries Ares Commercial Real Estate Corp (NYSE:ACRE) - Dividend Yield: 12.22% - Analyst Ratings: Keefe, Bruyette & Woods analyst Jade Rahmani maintained a Market Perform rating and raised the price target from $4.5 to $4.75 on Nov. 11, 2025, with an accuracy rate of 66% [7] - Recent Performance: Reported better-than-expected third-quarter financial results on Nov. 7 [7] Oaktree Specialty Lending Corp (NASDAQ:OCSL) - Dividend Yield: 11.70% - Analyst Ratings: Wells Fargo analyst Finian O'Shea maintained an Equal-Weight rating and cut the price target from $15 to $14 on April 28, 2025, with an accuracy rate of 63% [7] - Upcoming Events: Scheduled to report fourth fiscal quarter financial results before the opening bell on Nov. 18 [7] Starwood Property Trust Inc (NYSE:STWD) - Dividend Yield: 10.72% - Analyst Ratings: Keefe, Bruyette & Woods analyst Jade Rahmani maintained an Outperform rating and cut the price target from $22 to $21 on Nov. 12, 2025, with an accuracy rate of 66% [7] - Recent Performance: Posted mixed quarterly results on Nov. 10 [7]

Core Insights - Investors are increasingly turning to dividend-yielding stocks during market turbulence and uncertainty, as these companies typically have high free cash flows and offer substantial dividend payouts [1] Group 1: Ares Commercial Real Estate Corp (ACRE) - ACRE has a dividend yield of 12.22% [7] - Analyst Jade Rahmani from Keefe, Bruyette & Woods maintained a Market Perform rating and raised the price target from $4.5 to $4.75 on November 11, 2025, with an accuracy rate of 66% [7] - Analyst Steven Delaney from JMP Securities reiterated a Market Perform rating on April 21, 2025, with an accuracy rate of 64% [7] - ACRE reported better-than-expected third-quarter financial results on November 7 [7] Group 2: Oaktree Specialty Lending Corp (OCSL) - OCSL has a dividend yield of 11.70% [7] - Analyst Finian O'Shea from Wells Fargo maintained an Equal-Weight rating and cut the price target from $15 to $14 on April 28, 2025, with an accuracy rate of 63% [7] - Analyst Paul Johnson from Keefe, Bruyette & Woods maintained a Market Perform rating and reduced the price target from $16.5 to $15 on April 8, 2025, with an accuracy rate of 60% [7] - OCSL is set to report its financial results for the fourth fiscal quarter before the opening bell on November 18 [7] Group 3: Starwood Property Trust Inc (STWD) - STWD has a dividend yield of 10.72% [7] - Analyst Jade Rahmani from Keefe, Bruyette & Woods maintained an Outperform rating and lowered the price target from $22 to $21 on November 12, 2025, with an accuracy rate of 66% [7] - Analyst Donald Fandetti from Wells Fargo maintained an Outperform rating and reduced the price target from $23 to $22 on November 11, 2025, with an accuracy rate of 72% [7] - STWD posted mixed quarterly results on November 10 [7]

Core Viewpoint - Oaktree Specialty Lending (OCSL) has faced significant selling pressure, resulting in a 9.3% decline over the past four weeks, but analysts anticipate better earnings than previously expected, indicating a potential turnaround for the stock [1]. Technical Analysis - The Relative Strength Index (RSI) is utilized to determine if OCSL is oversold, with a current reading of 28.65 suggesting that selling pressure may be exhausting, potentially leading to a price rebound [2][5]. - RSI serves as a momentum oscillator that measures price movement speed and change, oscillating between zero and 100, with readings below 30 indicating oversold conditions [2][3]. Fundamental Indicators - There is a consensus among sell-side analysts that earnings estimates for OCSL have increased by 0.3% over the last 30 days, which typically correlates with price appreciation in the near term [7]. - OCSL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the stock's potential for a turnaround [8].

Core Viewpoint - Oaktree Specialty Lending Corporation will report its financial results for the fourth fiscal quarter and full year ended September 30, 2025, on November 18, 2025, before the market opens [1] Financial Reporting - The financial results will be discussed in a conference call scheduled for November 18, 2025, at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time [1] - Callers can access the conference call by dialing (800) 715-9871 for U.S. callers or +1 (646) 307-1963 for non-U.S. callers, referencing "Oaktree Specialty Lending" [1] Company Overview - Oaktree Specialty Lending Corporation is a specialty finance company focused on providing customized credit solutions to companies with limited access to capital markets [3] - The company's investment objective includes generating current income and capital appreciation through flexible financing solutions such as first and second lien loans, unsecured and mezzanine loans, and preferred equity [3] - Oaktree Specialty Lending is regulated as a business development company under the Investment Company Act of 1940 and is managed by Oaktree Fund Advisors, LLC, an affiliate of Oaktree Capital Management, L.P. [3]