Gladstone Capital Corporation Reports Financial Results for its Third Quarter Ended June 30, 2025

Rhea-AI Summary

Gladstone Capital Corporation (Nasdaq:GLAD) reported its Q3 2025 financial results with stable performance. Total investment income reached $21.7 million, up 0.4% quarter-over-quarter, while net investment income was $11.3 million ($0.50 per share).

The company invested $73 million during Q3, including $58.6 million in two new portfolio companies. Post-quarter, GLAD made significant investments totaling over $93.3 million across multiple companies. The credit facility was expanded to $320 million with extended terms to October 2029.

The Board declared monthly distributions of $0.165 per common share for Q3 2025. The company maintains a strong focus on secured first lien assets, representing over 70% of debt investments.

Positive

• Total investment income increased by 0.4% to $21.7 million
• Secured first lien assets maintain strong position at over 70% of debt investments
• Credit facility expanded to $320 million with extended maturity to October 2029
• Robust subsequent investments of $93.3 million across multiple companies
• Consistent quarterly dividend maintained at $0.50 per share

Negative

• Net assets decreased by $0.16 per share to $21.25
• Net realized loss of $3.62 million in Q3
• Total investments at fair value decreased by 1.5% to $751.3 million
• Weighted average principal balance of interest-bearing portfolio decreased to $647.2 million from $682.6 million

Insights

Financial Analyst

Gladstone maintains steady $0.50 per share NII despite portfolio churn; aggressive post-quarter deployment signals strong investment pipeline.

Gladstone Capital has delivered a remarkably consistent quarter with net investment income holding at $0.50 per share, precisely matching their dividend - a key sustainability metric for BDCs. The modest 0.4% increase in total investment income reflects stability despite significant portfolio activity.

The quarter's investment dynamics tell an interesting story. While the headline shows a 60% increase in new investments ($72.9 million vs $45.6 million previous quarter), this was overshadowed by $82.2 million in repayments, resulting in net portfolio contraction. This high portfolio churn is noteworthy, as it maintained a strong 12.8% weighted yield on interest-bearing investments.

The expanded credit facility (now $320 million with extended maturity to 2029) strengthens Gladstone's investment capacity. This proved timely given their remarkably aggressive post-quarter deployment of over $93 million across five investments in July/August alone. These substantial subsequent investments reflect management's confidence in their lower middle market pipeline.

While the $3.62 million realized loss is a concern, it was largely offset by unrealized appreciation, and the portfolio's fair value as a percent of cost remained steady at 96.6%. The slight NAV decline ($21.25 vs $21.41) reflects the temporary portfolio contraction that appears to be rapidly reversing with subsequent investments. The continued emphasis on secured first lien assets (over 70% of debt investments) maintains the portfolio's defensive positioning amid economic uncertainty.

MCLEAN, VA / ACCESS Newswire / August 4, 2025 / Gladstone Capital Corporation (Nasdaq:GLAD) (the "Company") today announced earnings for its third quarter ended June 30, 2025. 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 and the Investors section of the Company's website at www.GladstoneCapital.com.

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

For the Quarter Ended:		June 30, 2025				March 31, 2025				Change				% Change
Total investment income		$	21,657			$	21,569			$	88				0.4	%
Total expenses, net of credits			(10,363	)			(10,324	)			(39	)			0.4
Net investment income			11,294				11,245				49				0.4
Net investment income per common share			0.50				0.50				0.00				0.0
Cash distribution per common share			0.50				0.50				0.00				0.0
Net realized gain (loss)			(3,620	)			7,706				(11,326	)		NM
Net unrealized appreciation (depreciation)			15				(9,963	)			9.978			NM
Net increase (decrease) in net assets resulting from operations			7,448				8,797				(1,349	)			(15.3	)
Weighted average yield on interest-bearing investments			12.8	%			12.6	%			0.2	%			1.6
Total invested		$	72,952			$	45,595			$	27,357				60.0
Total repayments and net proceeds			82,205				81,274				931				1.1
As of:		June 30, 2025				March 31, 2025				Change				% Change
Total investments, at fair value		$	751,260			$	762,636			$	(11,376	)			(1.5	)%
Fair value, as a percent of cost			96.6	%			96.6	%			0.0	%			0.0
Net asset value per common share		$	21.25			$	21.41			$	(0.16	)			(0.7	)

NM - not meaningful

Third Fiscal Quarter 2025 Highlights:

• Portfolio Activity: Invested $58.6 million in two new portfolio companies and $14.4 million in existing portfolio companies.

• Portfolio Mix: Secured first lien assets continue to be over 70% of our debt investments, at cost.

• Credit Facility: Increased the total commitment to $320.0 million and extended the revolving period end date to October 2027 and the final maturity to October 2029.

Third Fiscal Quarter 2025 Results:

Total investment income increased by $88 thousand, or 0.4%, for the quarter ended June 30, 2025, compared to the prior quarter ended March 31, 2025, driven primarily by a $0.6 million increase in other income, quarter over quarter, partially offset by a $0.5 million decrease in interest income. The increase in other income was driven by higher prepayment fees and dividend income compared to the prior quarter. Interest income decreased by $0.5 million, or 2.3%, quarter over quarter. The primary reason for the decrease was a decrease in the weighted average principal balance of our interest-bearing investment portfolio to $647.2 million during the quarter ended June 30, 2025 as compared to $682.6 million during the quarter ended March 31, 2025.

Total expenses were unchanged quarter over quarter. A decrease of $0.6 million in interest expense quarter over quarter was offset by a $0.5 million increase in the net base management and net incentive fees driven primarily by a reduction in the incentive fee credit quarter over quarter partially offset by higher investment banking fee credits to the base management fee from increased deal originations.

Net investment income for the quarter ended June 30, 2025 was $11.3 million, or $0.50 per share.

The net increase in net assets resulting from operations was $7.4 million, or $0.33 per share, for the quarter ended June 30, 2025, compared to $8.8 million, or $0.39 per share, for the quarter ended March 31, 2025. The current quarter increase in net assets resulting from operations was primarily driven by $11.3 million of net investment income, partially offset by $3.6 million of net realized loss recognized during the quarter.

Subsequent Events: Subsequent to June 30, 2025, the following significant events occurred:

• Portfolio Activity:

  • In July 2025, our $3.7 million debt investment in 8th Avenue Food and Provisions, Inc. paid off at par.

  • In July 2025, we invested $25.0 million in MASSiv Brands, LLC through secured first lien debt.

  • In July 2025, we invested $15.0 million in Alsay, Inc. through secured second lien debt and preferred equity.

  • In July 2025, we invested $23.7 million in Snif-Snax, LLC through secured first lien debt and preferred equity.

  • In July 2025, we invested $13.0 million in a precision manufacturing business through secured first lien debt and common equity. We also extended this business a $4.0 million secured first lien line of credit commitment, which was unfunded at close.

  • In August 2025, we invested an additional $16.6 million in OCI, LLC, an existing portfolio company, through secured first lien debt and common equity.

• Distributions and Dividends Declared:

  • In July 2025, our Board of Directors declared the following distributions to common and preferred stockholders:

Record Date		Payment Date		Distribution per Common Share
July 21, 2025		July 31, 2025		$	0.165
August 20, 2025		August 29, 2025			0.165
September 22, 2025		September 30, 2025			0.165
		Total for the Quarter		$	0.495

Record Date		Payment Date		Distribution per Series A Preferred Stock
July 25, 2025		August 4, 2025		$	0.130208
August 27, 2025		September 5, 2025			0.130208
September 24, 2025		October 3, 2025			0.130208
		Total for the Quarter		$	0.390624

• Comments from Gladstone Capital's President, Bob Marcotte: "Over the past two quarters we have absorbed much of the anticipated surge in portfolio liquidity events and ended last quarter with a strong balance sheet and funding capacity. The underlying strength of our lower middle market deal focus was evident in the robust subsequent events fundings we reported and we are well on our way to growing the company's investment portfolio to support shareholder distributions in the coming quarters."

Conference Call for Stockholders: The Company will hold its earnings release conference call on Tuesday, August 5, 2025, at 8:30 a.m. Eastern Time. Please call (866) 424-3437 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 August 12, 2025. To hear the replay, please dial (877) 660-6853 and use playback conference number 13754182. The replay of the conference call will be available beginning approximately one hour after the call concludes. The live audio broadcast of the Company's quarterly conference call will also be available online at www.GladstoneCapital.com. The event will be archived and available for replay on the investors section of the Company's website.

About Gladstone Capital Corporation: Gladstone Capital Corporation is a publicly-traded business development company that invests in debt and equity securities, consisting primarily of secured first and second lien term loans to lower middle market businesses in the United States. Information on the business activities of Gladstone Capital and the other publicly-traded Gladstone funds can be found at www.GladstoneCompanies.com.

To obtain a paper copy of the Company's most recent Form 10-Q, 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 June 30, 2025, including the notes to the consolidated financial statements contained therein.

Investor Relations Inquiries: Please visit www.gladstonecompanies.com or (703) 287-5893.

Forward-looking Statements:

The statements in this press release about future growth and shareholder returns are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements inherently involve certain risks and uncertainties in predicting future results and conditions. Although these statements are based on our 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 our filings with the U.S. 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 Capital Corporation

View the original press release on ACCESS Newswire

FAQ

What were Gladstone Capital's (GLAD) key financial results for Q3 2025?

GLAD reported $21.7 million in total investment income (+0.4% QoQ), $11.3 million in net investment income ($0.50 per share), and net assets of $21.25 per share.

How much did Gladstone Capital (GLAD) invest in Q3 2025?

GLAD invested $73 million during Q3 2025, with $58.6 million in two new portfolio companies and $14.4 million in existing portfolio companies.

What is GLAD's dividend payment for Q3 2025?

GLAD declared monthly distributions of $0.165 per common share, totaling $0.495 for the quarter, maintaining its previous dividend level.

What changes were made to Gladstone Capital's credit facility in Q3 2025?

The credit facility's total commitment was increased to $320 million, with the revolving period extended to October 2027 and final maturity to October 2029.

What investments did GLAD make after Q3 2025 ended?

After Q3, GLAD invested over $93.3 million across multiple companies, including investments in MASSiv Brands, Alsay, Snif-Snax, a precision manufacturing business, and additional funding to OCI, LLC.