Gladstone Investment(US:GAIN)2026-02-03 21:05Investment Portfolio - As of December 31, 2025, the investment portfolio consisted of 71.0% in debt investments and 29.0% in equity investments, at cost[166]. - From inception through December 31, 2025, the company has invested approximately $2.2 billion in 66 companies, excluding syndicated loans[171]. - As of December 31, 2025, the company had equity investments in 29 portfolio companies with a total cost basis of $1.1 billion, up from 26 companies with a cost basis of $1.0 billion in 2024[222]. - The total investment portfolio at fair value increased to $1,222.8 million as of December 31, 2025, up from $1,072.2 million in 2024, representing a growth of approximately 14%[223]. - The entire investment portfolio was fair valued at 115.5% of cost as of December 31, 2025[200]. Financial Performance - The company generated $353.4 million in net realized gains and $45.4 million in other income from exiting 33 portfolio companies, totaling an increase of $398.8 million to net assets[173]. - Total investment income for the three months ended December 31, 2025, increased by $3.7 million, or 17.3%, to $25.1 million compared to the prior year[182]. - Interest income rose by $2.3 million, or 11.2%, to $22.8 million for the same period, driven by an increase in the weighted-average principal balance of the interest-bearing investment portfolio[183]. - Net investment loss income was $(6.5) million for the three months ended December 31, 2025, a decrease of $7.7 million compared to the prior year[181]. - Net unrealized appreciation increased by $32.9 million, or 88.1%, to $70.2 million for the three months ended December 31, 2025[181]. - Total investment income increased by $7.8 million, or 11.8%, for the nine months ended December 31, 2025, compared to the prior year period[202]. - Net investment income decreased by $14.0 million, or 67.1%, for the nine months ended December 31, 2025[201]. - The net increase in net assets resulting from operations was $102.4 million for the nine months ended December 31, 2025, compared to $47.4 million in the prior year[201]. Expenses and Fees - Total expenses, net of credits from the Adviser, increased by $11.4 million, or 56.2%, to $31.6 million for the three months ended December 31, 2025[189]. - The capital gains-based incentive fee for the three months ended December 31, 2025, was $14.7 million, compared to $7.5 million in the prior year[190]. - Total expenses, net of credits from the Adviser, increased by $21.8 million, or 48.1%, during the nine months ended December 31, 2025[208]. - Interest expense rose by $8.4 million, or 43.4%, during the nine months ended December 31, 2025, primarily due to new debt issuances and increased borrowings[210]. - The capital gains-based incentive fee for the nine months ended December 31, 2025, was $19.4 million, up from $5.3 million in the same period of 2024[209]. Debt and Financing - The company issued the 6.875% 2028 Notes for gross proceeds of $60.0 million and sold 2,984,586 shares of common stock for approximately $42.1 million during the nine months ended December 31, 2025[174]. - The company completed a public offering of the 5.00% 2026 Notes with an aggregate principal amount of $127.9 million, resulting in net proceeds of approximately $123.8 million after costs[241]. - The 4.875% 2028 Notes had an aggregate principal amount of $134.6 million, yielding net proceeds of approximately $131.3 million after costs[244]. - The 8.00% 2028 Notes were issued with an aggregate principal amount of $74.8 million, with a loss on extinguishment of debt recorded at $1.3 million[247]. - The 7.875% 2030 Notes had an aggregate principal amount of $126.5 million, resulting in net proceeds of approximately $122.4 million after costs[248]. - As of December 31, 2025, the company had $128.6 million of borrowings outstanding under its Credit Facility, with a maximum facility size of $300.0 million[236][238]. - The company anticipates issuing equity securities to obtain additional capital in the future, with a closing market price of $13.97 per share as of December 31, 2025, representing a 6.6% discount to its NAV per share of $14.95[235]. Risk Management - The company is exposed to interest rate risk due to borrowing for investments, with net investment income dependent on the difference between borrowing rates and investment rates[265]. - The company has no fixed-rate loans in its portfolio as of December 31, 2025, indicating a complete reliance on variable-rate loans[266]. - The company targets approximately 90% of its loan portfolio to be at variable rates, with all variable-rate loans linked to the current 30-day SOFR rate as of March 31, 2025[266]. - A hypothetical analysis indicates that a 150 basis point increase in interest rates could result in a net increase of $4.494 million in net assets from operations[268]. - The company may use interest rate risk management techniques, including hedging activities, to limit exposure to interest rate fluctuations[265]. - Risks associated with foreign operations include fluctuations in foreign currency exchange rates and potential tariffs, affecting some portfolio companies[269]. Cash Distributions - The company declared a total cash distribution of $0.24 per common share for the quarter ending March 31, 2026[179]. - The company declared monthly cash distributions of $0.08 per common share for nine months from April to December 2025, along with a supplemental distribution of $0.54 per common share in June 2025[226]. - The company has a policy to distribute up to 100% of its Investment Company Taxable Income to stockholders[262]. - The company intends to maintain its qualification as a RIC under Subchapter M of the Code, which requires distributing at least 90% of its Investment Company Taxable Income to stockholders[262].