Gladstone Investment Corporation Reports Financial Results for its Second Quarter Ended September 30, 2026

Lower investment income and higher expenses reduced quarterly earnings, while unrealized appreciation lifted net asset value.

Rhea-AI Summary

Gladstone Investment (Nasdaq: GAIN) reported second-quarter net investment income of $0.12 per share for the period ended September 30, 2026. Investment income fell 14.8% to $24.163 million from the June quarter, while net expenses rose 55.4% to $19.314 million. Net investment income declined 69.6% to $4.849 million; adjusted income per share fell to $0.18 from $0.26.

Net assets from operations increased $17.063 million, versus an $11.855 million decrease previously, supported by $12.214 million of unrealized appreciation. Net asset value rose to $16.43 per share from $16.24. Quarterly investments included new positions in DHE and Extrude Hone and acquisition funding for existing holdings. After quarter-end, Gladstone received $54.6 million from SFEG debt repayment and invested $56.1 million in McFarlane Toys. Monthly distributions remain $0.08 per share through December.

15 points · 0 major

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0 major · 9 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointNet assets from operations increased $17.063 million, versus an $11.855 million decrease in the June quarter.
• Moderate pointDHE investment of $56.4 million comprised $40.3 million secured first-lien debt and $16.1 million preferred equity. 9.5% of market cap
• Moderate pointExtrude Hone investment of $58.6 million comprised $43.2 million secured first-lien debt and $15.4 million preferred equity. 9.9% of market cap
• Moderate pointSeptember Global GRAB acquisition funding of $15.8 million comprised $12.5 million first-lien debt and $3.3 million preferred equity. 2.7% of market cap
• Moderate pointDetroit Defense acquisition funding of $18.6 million comprised $14.4 million first-lien debt and $4.2 million preferred equity. 3.1% of market cap
• Moderate pointSFEG debt repayment at par generated $54.6 million in October, plus $0.5 million of success fee income. 9.2% of market cap
• Moderate pointMcFarlane Toys investment of $56.1 million comprised $41.8 million secured first-lien debt and $14.3 million preferred equity. 9.5% of market cap

8 minor points

• Minor pointNet asset value rose 1.2% to $16.43 per share from $16.24 at June 30, 2026.
• Minor pointNet unrealized appreciation reached $12.214 million, versus $18.782 million of depreciation in the June quarter.
• Minor pointNo net realized loss was recorded, versus a $9 million loss in the June quarter.
• Minor pointJuly Global GRAB acquisition funding of $5.1 million comprised $1.5 million first-lien debt and $3.6 million preferred equity.
• Minor pointSmart Chemical Solutions received $3.7 million of additional secured first-lien debt funding for an acquisition in October.
• Minor pointInterest-bearing investment yield increased to 13.0% from 12.9% in the June quarter.
• Minor pointTotal distributable earnings rose 4.5% to $167.568 million, or $4.21 per share, from June 30.
• Minor pointAdjusted credit facility availability was $80.4 million at September 30, after collateral-related constraints.

Negative

• Moderate pointNet investment income fell 69.6% to $4.849 million; per-share income fell to $0.12 from $0.40 quarter over quarter.
• Minor pointInvestment income declined 14.8% to $24.163 million, with lower success fees partly offset by higher interest income.
• Minor pointNet expenses rose 55.4% to $19.314 million, primarily reflecting higher incentive-fee accruals and borrowing-related interest expense.
• Minor pointAdjusted net investment income per share fell 30.8% to $0.18 from $0.26 in the June quarter.
• Minor pointCredit facility borrowings were $299.8 million at September 30, bearing 30-day SOFR plus 2.85%.

4 minor points

• Minor pointNotes payable totaled $421.05 million, with coupons ranging from 4.875% to 7.875% and maturities from 2028 through 2031.
• Minor point. Forward-looking: it has not happened yet and may not happen.SFEG equity proceeds remain subject to final dissolution and escrow settlements; distribution is expected in fiscal Q3 or Q4.
• Minor pointInvestment fair value as a percentage of cost fell to 121.1% from 122.7% at June 30.
• Minor pointEstimated spillover fell 11.3% to $19.924 million; per-share spillover declined to $0.50 from $0.56.

News Explained

In the reported quarter, GAAP net investment income included a $2.4 million capital-gains incentive-fee accrual that was not contractually due; the adjusted measure excludes those fees, while a $5.6 million drop in success-fee income also reduced investment income.

Key Figures

Net investment income: $4.8 million Net investment income per share: $0.12 per weighted-average common share Total investment income: $24.2 million +5 more

Net investment income

$4.8 million

Quarter ended September 30, 2026; $15.9 million in the prior quarter

Net investment income per share

$0.12 per weighted-average common share

Quarter ended September 30, 2026; $0.40 in the prior quarter

Total investment income

$24.2 million

Quarter ended September 30, 2026; $28.4 million in the prior quarter

Total expenses, net of credits

$19.3 million

Quarter ended September 30, 2026; $12.4 million in the prior quarter

Adjusted net investment income per share

$0.18 per weighted-average common share

Quarter ended September 30, 2026; $0.26 in the prior quarter

Net asset value per common share

$16.43

As of September 30, 2026; $16.24 as of June 30, 2026

Net unrealized appreciation

$12.2 million

Quarter ended September 30, 2026

Cash distribution per common share

$0.24

Quarter ended September 30, 2026

Previous Earnings Reports

1 past event · Latest: Aug 06

Same Type 1 event

1. Aug 06

   earnings report

   24h Move

   -1.6%

   Prior quarter reported higher net investment income, providing a sequential earnings baseline for this quarter.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

sofr, paid-in-kind, first lien debt, non-gaap financial measure

4 terms

sofr financial

"The Credit Facility bears interest at 30-day Term Secured Overnight Financing Rate"

The Secured Overnight Financing Rate (SOFR) is a market benchmark that measures the cost of borrowing cash overnight using U.S. Treasury securities as collateral. Investors watch SOFR because it acts like a speedometer for short-term interest costs—affecting loan rates, bond yields and the pricing of interest-rate contracts—so movements change borrowing expenses, cash returns and the value of interest-sensitive investments.

paid-in-kind financial

"we did not have any loans with a paid-in-kind interest component"

Paid-in-kind describes an arrangement where a borrower pays interest or returns not with cash but by issuing more of the same security (extra bonds or shares) or by increasing the loan balance. For investors this matters because it conserves the issuer’s cash but can dilute ownership or increase debt over time, changing expected cash payments, risk and the real value of an investment much like being paid with an IOU instead of cash.

first lien debt financial

"in the form of $40.3 million of secured first lien debt"

First lien debt is a loan secured by specific company assets that gives the lender the top legal claim on those assets if the borrower defaults or is liquidated — like a first mortgage on a house. Investors care because first-lien holders have a higher likelihood of being repaid and thus lower risk (and usually lower interest) than unsecured or later-ranking creditors, which affects recovery prospects and the overall risk profile of the company’s capital structure.

non-gaap financial measure financial

"a financial measure that is calculated and presented on a basis of methodology other than in accordance with GAAP"

A non-GAAP financial measure is a way companies present their financial results that excludes certain expenses or income to show how they believe their core business is performing. It matters because it can give a clearer picture of how the company is really doing, but it can also be used to make results look better than they actually are.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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MCLEAN, VA / ACCESS Newswire / November 9, 2026 / Gladstone Investment Corporation (Nasdaq:GAIN) (the "Company") today announced earnings for its second fiscal quarter ended September 30, 2026. Please read the Company's Quarterly Report on Form 10-Q, filed today with the U.S. Securities and Exchange Commission (the "SEC"), which is available on the SEC's website at www.sec.gov or the investors section of the Company's website at www.gladstoneinvestment.com.

Summary Information: (dollars in thousands, except per share data (unaudited)):

		September 30, 2026				June 30, 2026				Change				% Change
For the quarter ended:
Total investment income		$	24,163			$	28,355			$	(4,192	)			(14.8	)%
Total expenses, net(A)			19,314				12,428				6,886				55.4	%
Net investment income(A)			4,849				15,927				(11,078	)			(69.6	)%
Net realized loss			-				(9,000	)			9,000			NM
Net unrealized appreciation (depreciation)			12,214				(18,782	)			30,996			NM
Net increase (decrease) in net assets resulting from operations(A)		$	17,063			$	(11,855	)		$	28,918			NM
Net investment income per weighted-average common share(A)		$	0.12			$	0.40			$	(0.28	)			(70.0	)%
Adjusted net investment income per weighted-average common share(B)		$	0.18			$	0.26			$	(0.08	)			(30.8	)%
Net increase (decrease) in net assets resulting from operations per weighted-average common share(A)		$	0.43			$	(0.30	)		$	0.73			NM
Cash distribution per common share from net investment income(C)		$	0.24			$	0.24			$	-				-	%
Cash distribution per common share from net realized gains(C)		$	-			$	-			$	-				-	%
Weighted-average yield on interest-bearing investments			13.0	%			12.9	%			0.1	%			0.8	%
Total dollars invested		$	156,493			$	600			$	155,893			NM
Total dollars repaid and collected from sales and recapitalization of investments		$	19,862			$	-			$	19,862			NM
Weighted-average shares of common stock outstanding - basic and diluted			39,821,967				39,821,967				-				-	%
Total shares of common stock outstanding			39,821,967				39,821,967				-				-	%
As of:
Total investments, at fair value		$	1,430,865			$	1,282,020			$	148,845				11.6	%
Fair value, as a percent of cost			121.1	%			122.7	%			(1.6	)%			(1.3	)%
Number of portfolio companies			31				29				2				6.9	%
Net assets		$	654,319			$	646,813			$	7,506				1.2	%
Net asset value per common share		$	16.43			$	16.24			$	0.19				1.2	%
Total distributable earnings		$	167,568			$	160,359			$	7,209				4.5	%
Total distributable earnings per common share		$	4.21			$	4.03			$	0.18				4.5	%
Estimated spillover		$	19,924			$	22,472			$	(2,548	)			(11.3	)%
Estimated spillover per common share		$	0.50			$	0.56			$	(0.06	)			(10.7	)%

NM = Not Meaningful

(A)		Inclusive of $2.4 million, or $0.06 per weighted-average common share, of capital gains-based incentive fees accrued during the three months ended September 30, 2026 and a reversal of $5.6 million, or $0.14 per weighted-average common share, of capital gains-based incentive fees during the three months ended June 30, 2026, respectively. These fees were accrued in accordance with United States generally accepted accounting principles ("U.S. GAAP"), where such amounts were not contractually due under the terms of the investment advisory agreement for the respective periods. Also see discussion under Non-GAAP Financial Measure - Adjusted Net Investment Income below.
(B)		See Non-GAAP Financial Measure - Adjusted Net Investment Income, below, for a description of this non-GAAP measure and a reconciliation from Net investment income to Adjusted net investment income, including on a weighted-average per share basis. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes it is useful to investors as an additional tool to evaluate ongoing results and trends for the Company.
(C)		Estimates of tax characterization made on a quarterly basis may not be representative of the actual tax characterization of distributions for the full year. Estimates made on a quarterly basis are updated as of each interim reporting date.

Highlights for the Quarter: During the quarter ended September 30, 2026, the following significant events occurred:

• Portfolio Activity:
  • In July 2026, we invested $56.4 million in a new portfolio company, DHE Computer Systems Acquisition, Inc. ("DHE"), in the form of $40.3 million of secured first lien debt and $16.1 million of preferred equity. DHE, headquartered in Centennial, Colorado, is a full-service technology solutions provider serving the education, state and local government, and commercial markets.
  • In July 2026, we invested an additional $5.1 million, in the form of $1.5 million of secured first lien debt and $3.6 million of preferred equity, in Global GRAB Technologies, Inc. ("Global GRAB") to fund an add-on acquisition.
  • In September 2026, we invested an additional $15.8 million, in the form of $12.5 million of secured first lien debt and $3.3 million of preferred equity, in Global GRAB to fund an add-on acquisition.
  • In September 2026, we invested an additional $18.6 million, in the form of $14.4 million of secured first lien debt and $4.2 million of preferred equity, in Detroit Defense, Inc. to fund an add-on acquisition.
  • In September 2026, we invested $58.6 million in a new portfolio company, Extrude Hone LLC ("Extrude Hone"), in the form of $43.2 million of secured first lien debt and $15.4 million of preferred equity. Extrude Hone, headquartered in Irwin, Pennsylvania, is a provider of precision surface-finishing solutions used in mission-critical applications.
• Distributions and Dividends:
  • Paid an $0.08 per common share distribution to common stockholders in each of July, August and September 2026, totaling $0.24 for the quarter.

Second Quarter Results: Net investment income for the quarter ended September 30, 2026 was $4.8 million, or $0.12 per weighted-average common share, compared to net investment income of $15.9 million, or $0.40 per weighted-average common share, for the quarter ended June 30, 2026. This decrease was a result of an increase in total expenses, net of credits, primarily due to an increase in accruals for capital gains-based incentive fees, and a decrease in total investment income in the current quarter.

Total investment income for the quarters ended September 30, 2026 and June 30, 2026 was $24.2 million and $28.4 million, respectively. The decrease quarter over quarter was primarily due to a $5.6 million decrease in success fee income, the timing of which can be variable. This was partially offset by a $1.4 million increase in interest income.

Total expenses, net of credits, for the quarters ended September 30, 2026 and June 30, 2026 was $19.3 million and $12.4 million, respectively. The increase quarter over quarter was primarily due to an $8.0 million increase in accruals for capital gains-based incentive fees in the current quarter, as a result of the net impact of realized and unrealized gains and losses and an increase of $1.0 million in interest expense, due to increased borrowings on the Credit Facility. The increase was partially offset by a $0.5 million decrease in other expenses.

Net asset value per common share as of September 30, 2026 was $16.43, compared to $16.24 as of June 30, 2026. The increase quarter over quarter was primarily due to net unrealized appreciation of investments of $12.2 million, or $0.31 per common share, and $4.8 million, or $0.12 per common share, of net investment income. These increases were partially offset by $9.6 million, or $0.24 per common share, of distributions paid to common shareholders.

The following table provides relevant information related to our notes payable and Credit Facility as of September 30, 2026:

		Interest Rate				Aggregate Principal Amount
Notes Payable
4.875% 2028 Notes		4.875%				$	134,550
7.875% 2030 Notes		7.875%					126,500
6.875% 2028 Notes		6.875%					60,000
7.125% 2031 Notes		7.125%					100,000
Total Notes Payable						$	421,050
Credit Facility (A)
Commitment amount		SOFR + 2.85%				$	405,000
Borrowings outstanding at cost						$	299,800
Availability(B)						$	105,200
Percentage of borrowings at:(C)
Fixed rate							58.4	%
Floating rate							41.6	%

(A)		The Credit Facility bears interest at 30-day Term Secured Overnight Financing Rate ("SOFR").
(B)		Availability is subject to various constraints, characteristics and applicable advance rates based on collateral quality under our Credit Facility, which equated to an adjusted availability of $80.4 million as of September 30, 2026.
(C)		The percentage uses the Credit Facility borrowings outstanding at cost as of September 30, 2026. The fixed rate borrowings consist of the outstanding notes payable. The floating rate borrowings consist of the Credit Facility borrowings outstanding at cost.

The following table presents certain selected information regarding the debt investments of our portfolio companies as of September 30, 2026:

	September 30, 2026(A)(B)
Weighted average interest rate of debt investments			13.1	%
Weighted average interest rate floor of debt investments			12.3	%
Current percentage of debt investments at interest rate floor			59.6	%
Weighted average interest rate of debt investments assuming:
50 basis points increase in SOFR			13.4	%
25 basis points increase in SOFR			13.3	%
25 basis points decrease in SOFR			13.0	%
50 basis points decrease in SOFR			12.9	%

(A)		Debt investments presented exclude line of credit commitments and all debt investments on non-accrual status as of September 30, 2026. The weighted average interest rate is based on the cost balance of the debt investments.
(B)		As of September 30, 2026, 100.0% of our debt investments are variable rates with a floor and are indexed to 30-day SOFR. The interest rate is the greater of the floor or the total of SOFR plus a spread. As of September 30, 2026, we did not have any loans with a paid-in-kind interest component.

Subsequent Events: After September 30, 2026, the following significant events occurred:

• Significant Investment Activity:
  • In October 2026, SFEG Holdings, Inc. ("SFEG") sold its subsidiary, Specialized Fabrication Equipment Group LLC. In connection with the transaction, we received $0.5 million of success fee income and $54.6 million from the repayment at par of our debt investment. Subject to final dissolution and escrow settlements, proceeds for our remaining equity investment in SFEG, including the return of our capital and related capital gains, are expected to be distributed to us during the third or fourth quarter of the current fiscal year.
  • In October 2026, we invested an additional $3.7 million, in the form of secured first lien debt, in Smart Chemical Solutions, LLC to fund an add-on acquisition.
  • In November 2026, we invested $56.1 million in a new portfolio company, McFarlane Toys, Inc. ("McFarlane Toys"), in the form of $41.8 million of secured first lien debt and $14.3 million of preferred equity. McFarlane Toys, headquartered in Tempe, Arizona, has been a leading designer, producer, and distributor of collectible licensed action figures and statues since 1994. The Company partners with leading entertainment studios, video game publishers, sports organizations, and other intellectual property owners to develop highly detailed products across entertainment, gaming, comics, anime and sports.
• Distributions and Dividends:
  • In October 2026, our Board of Directors declared the following monthly distributions to common stockholders:

Record Date		Payment Date		Distribution per Common Share
October 23, 2026		October 30, 2026		$ 0.08
November 19, 2026		November 30, 2026		0.08
December 21, 2026		December 31, 2026		0.08
		Total for the Quarter:		$ 0.24

• Director Changes:
  • On October 22, 2026, Walter H. Wilkinson Jr. resigned from our Board of Directors, effective immediately. The Board of Directors elected George "Chip" Stelljes, III to succeed Mr. Wilkinson as Lead Independent Director, effective October 26, 2026. Following Mr. Wilkinson's resignation, the Board of Directors fixed the number of directors at seven, effective October 26, 2026.

Non-GAAP Financial Measure - Adjusted Net Investment Income: On a supplemental basis, the Company discloses Adjusted net investment income, including on a weighted-average per share basis, which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with GAAP. Adjusted net investment income represents net investment income, excluding capital gains-based incentive fees. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends for the Company. The Company's investment advisory agreement provides that a capital gains-based incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized appreciation) to the extent such realized capital gains exceed realized capital losses and unrealized depreciation on investments for such year. However, under GAAP, a capital gains-based incentive fee is accrued if realized capital gains and unrealized appreciation of investments exceed realized capital losses and unrealized depreciation of investments. Refer to Note 4 - Related Party Transactions in our Quarterly Report on Form 10-Q for further discussion. The Company believes that Adjusted net investment income is a useful indicator of operations exclusive of any capital gains-based incentive fees, as net investment income does not include realized or unrealized investment activity associated with the capital gains-based incentive fee.

The following table provides a reconciliation of net investment income (the most comparable GAAP measure) to Adjusted net investment income for the periods presented (dollars in thousands, except per share amounts; unaudited):

		For the quarter ended
		September 30, 2026								June 30, 2026
		Amount				Per Share Amount				Amount				Per Share Amount
Net investment income		$	4,849			$	0.12			$	15,927			$	0.40
Capital gains-based incentive fee			2,443				0.06				(5,566	)			(0.14	)
Adjusted net investment income		$	7,292			$	0.18			$	10,361			$	0.26
Weighted-average shares of common stock outstanding - basic and diluted							39,821,967								39,821,967

Adjusted net investment income may not be comparable to similar measures presented by other companies, as it is a non-GAAP financial measure that is not based on a comprehensive set of accounting rules or principles and therefore may be defined differently by other companies. In addition, Adjusted net investment income should be considered in addition to, not as a substitute for, or superior to, financial measures determined in accordance with GAAP.

Conference Call: The Company will hold its earnings release conference call on Tuesday, November 10, 2026, at 8:30 a.m. Eastern Time. Please call (866) 373-3416 to enter the conference call. An operator will monitor the call and set a queue for any questions. A replay of the conference call will be available through November 17, 2026. To hear the replay, please dial (877) 660-6853 and use the playback conference number 13762360. The replay will be available after the call concludes. The live audio broadcast of the Company's quarterly conference call will also be available online at www.gladstoneinvestment.com. The event will be archived and available for replay on the Company's website.

About Gladstone Investment Corporation: Gladstone Investment Corporation is a publicly traded business development company that seeks to make secured debt and equity investments in lower middle market businesses in the United States in connection with acquisitions, changes in control and recapitalizations. Information on the business activities of all the Gladstone funds can be found at www.gladstonecompanies.com.

To obtain a paper copy of our Quarterly Report on Form 10-Q, filed today with the SEC, please contact the Company at 1521 Westbranch Drive, Suite 100, McLean, VA 22102, ATTN: Investor Relations. The financial information above is not comprehensive and is without notes, so readers should obtain and carefully review the Company's Form 10-Q for the quarter ended September 30, 2026, including the notes to the consolidated financial statements contained therein.

Investor Relations Inquiries: Please visit ir.gladstoneinvestment.com or call (703) 287-5893.

Forward-looking Statements:

The statements in this press release regarding potential future distributions, earnings and operations of the Company are "forward-looking statements." These forward-looking statements inherently involve certain risks and uncertainties in predicting future results and conditions. Although these statements are based on the Company's current plans that are believed to be reasonable as of the date of this press release, a number of factors could cause actual results and conditions to differ materially from these forward-looking statements, including those factors described from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or otherwise, except as required by law.

SOURCE: Gladstone Investment Corporation

View the original press release on ACCESS Newswire

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Gladstone Investment's earnings for the quarter ended September 30, 2026?

Gladstone Investment earned $4.849 million in net investment income, or $0.12 per weighted-average common share. That compares with $15.927 million, or $0.40 per share, in the June quarter. Adjusted net investment income per share, which excludes capital gains-based incentive fees, was $0.18 versus $0.26.

What monthly dividend did GAIN declare for October through December 2026?

Gladstone Investment declared monthly common-share distributions of $0.08 per share for October, November and December 2026, totaling $0.24 for the quarter. Payment dates are October 30, November 30 and December 31, respectively.

How do interest-rate floors affect Gladstone Investment's debt portfolio?

At September 30, 2026, 59.6% of debt investments were at their interest-rate floor, the minimum rate payable. Excluding credit-line commitments and debt on non-accrual status, the weighted-average interest rate was 13.1% and the weighted-average floor was 12.3%. A 50-basis-point SOFR decrease would put the weighted-average rate at 12.9%; an equivalent increase would put it at 13.4%.