Gladstone Capital (GLAD) - 2025 Q2 - Quarterly Results

Financial Highlights Gladstone Capital reported stable Net Investment Income at $11.2 million, while net assets from operations significantly decreased to $8.8 million Quarterly Financial Summary (Q2 2025 vs Q1 2025) | For the Quarter Ended: | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Total investment income | $ 21,569 | $ 21,960 | $ (391) | (1.8)% | | Net investment income | $ 11,245 | $ 11,224 | $ 21 | 0.2% | | Net investment income per common share | $ 0.50 | $ 0.50 | $ 0.00 | 0.0% | | Net increase (decrease) in net assets from operations | $ 8,797 | $ 26,975 | $ (18,178) | (67.4)% | | Weighted average yield on interest-bearing investments | 12.6% | 13.1% | (0.5)% | (3.8)% | Key Balance Sheet and Portfolio Metrics (as of Q2 2025) | As of: | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Total investments, at fair value | $762,636 | $ 799,497 | $ (36,861) | (4.6)% | | Net asset value per common share | $ 21.41 | $ 21.51 | $ (0.10) | (0.5)% | - The company delivered net realized gains of $7.7 million for the quarter from successful exits[6] Detailed Financial Performance Total investment income decreased by 1.8% to $21.6 million, while net investment income remained stable at $11.2 million - Total investment income decreased by $0.4 million, or 1.8%, quarter-over-quarter, mainly due to a decline in prepayment fees received, with interest income unchanged[4] - The negative impact of declining SOFR rates (from 4.7% to 4.3% average) on interest income was offset by an increase in the weighted average principal balance of interest-bearing investments to $682.6 million from $642.4 million[7] - Total expenses decreased by $0.4 million, primarily due to a $1.4 million incentive fee credit, largely offset by a $1.3 million increase in the net base management fee[8] - The net increase in net assets from operations was $8.8 million ($0.39 per share), a significant drop from $27.0 million ($1.21 per share) in the prior quarter, though supported by a $7.7 million net realized gain[9] Portfolio Activity The company invested $45.6 million in new and existing portfolio companies, maintaining a conservative portfolio - Invested $38.3 million in two new portfolio companies and $7.3 million in existing portfolio companies during the quarter[6] - The portfolio's debt investments consist of over 70% secured first lien assets, measured at cost[6] - Subsequent to quarter-end, in April 2025, a $42.2 million debt investment in SpaceCo Holdings, LLC was paid off at par[11] - In April 2025, the investment in Eegees, LLC was restructured due to bankruptcy, resulting in a new $20.5 million investment in Eegee Acquisition Corporation[11] Subsequent Events and Outlook The Board declared monthly distributions, and the President expressed a positive outlook for future growth and distributions Distributions Declared in April 2025 | Security | Record Dates | Payment Dates | Total Distribution per Share | | :--- | :--- | :--- | :--- | | Common Stock | Apr 21, May 21, Jun 20 | Apr 30, May 30, Jun 30 | $0.495 | | Series A Preferred Stock | Apr 25, May 27, Jun 25 | May 5, Jun 5, Jul 3 | $0.390624 | - Company President Bob Marcotte stated: "...we ended last quarter with a strong balance sheet, ample funding capacity and a healthy backlog of deals to grow the company's investment portfolio and support shareholder distributions in the coming quarters"[10] Corporate and Investor Information Gladstone Capital, a BDC investing in U.S. lower middle market businesses, will host an earnings call - Gladstone Capital Corporation is a business development company that invests in debt (primarily secured first and second lien term loans) and equity securities of lower middle market businesses in the U.S[12] - An earnings conference call will be held on Wednesday, May 7, 2025, at 8:30 a.m. Eastern Time[10] - The press release contains forward-looking statements regarding future growth and returns, which are subject to risks and uncertainties detailed in SEC filings[15]