Prospect Capital Announces Financial Results for December 2025

Rhea-AI Summary

Prospect Capital (NASDAQ: PSEC) reported quarter ended December 31, 2025 results: Net investment income of $90.9M ($0.19/share) and net loss applicable to common shareholders of $(6.6)M ($(0.01)/share). The company declared monthly common distributions of $0.045/share for Feb–Apr 2026 and reported $1.647B of cash plus undrawn credit commitments.

Portfolio shifts continued toward first‑lien middle‑market loans (71.4% at cost), issued ~$167.6M of 5.5% Series A notes due 2030, repurchased and called certain notes, and reported NAV per common share of $6.21 as of 12/31/2025.

Positive

• Net investment income +14.6% sequentially to $90.9M
• Balance sheet liquidity of $1.647B (cash + undrawn revolver)
• First‑lien loan mix increased to 71.4% at cost, signaling asset rotation
• Issued ~$167.6M of 5.5% Series A senior unsecured notes due 2030
• Senior management ownership ~27.9% of common shares aligns interests

Negative

• Net income (loss) to common shareholders swung to $(6.6)M from $48.1M sequentially
• NAV per common share declined to $6.21, down ~20.8% year‑over‑year

Key Figures

Net Investment Income: $90,888K NII per share: $0.19 Net income to common: $(6,576K) +5 more

8 metrics

Net Investment Income $90,888K Quarter ended December 31, 2025

NII per share $0.19 Quarter ended December 31, 2025

Net income to common $(6,576K) Quarter ended December 31, 2025

NAV per common share $6.21 As of December 31, 2025

Distributions per common share $0.135 Quarter ended December 31, 2025

Monthly distribution $0.0450 Declared for Feb–Apr 2026

Total assets $6,534,578K As of December 31, 2025

DRIP discount 5% Shares issued at 95% of market price

Market Reality Check

Price: $2.61 Vol: Volume 3,578,763 is sligh...

normal vol

$2.61 Last Close

Volume Volume 3,578,763 is slightly below the 20-day average of 3,951,928. normal

Technical Shares trade below the 200-day MA, with price at 2.64 versus MA 2.96, and well below the 52-week high of 4.47.

Peers on Argus

PSEC rose 0.38% while peers were mixed: MFIC up 0.13%, CSWC up 0.52%, PX up 0.69...

PSEC rose 0.38% while peers were mixed: MFIC up 0.13%, CSWC up 0.52%, PX up 0.69%, OCSL down 0.33%, and GSBD flat. Moves do not indicate a unified sector trend.

Previous Earnings Reports

5 past events · Latest: Nov 06 (Neutral)

Same Type Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Nov 06	Quarterly earnings	Neutral	+0.4%	Reported Sept 2025 NII, NAV and maintained $0.135 distributions.
Aug 26	Annual results	Neutral	+2.5%	Released Q4 and FY 2025 results with NII of $79.04M.
May 08	Quarterly earnings	Neutral	-2.2%	Reported Q1 2025 NII decline and significant net loss.
Feb 10	Quarterly earnings	Neutral	+2.9%	Announced Dec 2024 NII of $86.4M and lower NAV per share.
Nov 08	Quarterly earnings	Neutral	-14.5%	Highlighted shift toward first lien loans and NII of $89.9M.

Pattern Detected

Recent earnings releases have produced modest, directionally inconsistent price moves, suggesting no clear pattern of strong buying or selling on results.

Recent Company History

Over the past year, PSEC’s earnings updates have highlighted steady Net Investment Income alongside recurring net losses and declining NAV per share. Prior quarters, such as the September 2025 and December 2024 results, showed NII in the $79M–$86M range with NAV per share moving down from $7.84. The latest December 2025 quarter continues this pattern: NII remained solid while NAV per share fell to $6.21 and net income to common was a small loss, with distributions maintained.

Historical Comparison

earnings

-2.2 %

Average Historical Move

Historical Analysis

In the last five earnings releases, PSEC’s average one-day move was about -2.2%. The current earnings-day change of +0.38% is milder and directionally different from that average, indicating a relatively subdued reaction versus prior quarters.

Typical Pattern

Earnings releases have shown stable NII but persistent net losses and NAV erosion, with NAV per share moving from $7.84 in the Dec 2024 quarter to $6.21 in the Dec 2025 quarter while distributions at $0.045 monthly and $0.135 quarterly have been maintained.

Market Pulse Summary

This announcement details steady Net Investment Income of $90,888K and NII per share of $0.19, along...

Analysis

This announcement details steady Net Investment Income of $90,888K and NII per share of $0.19, alongside a small net loss and lower NAV per share of $6.21. The company maintained quarterly distributions of $0.135 per share and declared monthly dividends of $0.045 through April 2026, while continuing to rotate toward first lien senior secured middle-market loans. Investors may track future NAV trends, credit performance, and portfolio mix shifts relative to prior earnings releases.

Key Terms

net investment income, net asset value, internal rate of return, ebitda, +1 more

5 terms

net investment income financial

"Net Investment Income (“NII”) | $90,888 | $79,350 | $86,431"

Net investment income is the money an investor or fund actually keeps from its investments after subtracting the costs of running those investments (like management fees, interest, and losses). Think of it as your paycheck from owning assets: gross returns minus the bills needed to earn them. Investors watch it because it shows how profitable the investment activities are, influences dividend payouts and cash available for growth, and helps compare true performance across funds or companies.

net asset value financial

"Net Asset Value (“NAV”) to Common Shareholders | $2,958,755..."

Net asset value is the total value of an investment fund's assets minus any liabilities, divided by the number of shares or units outstanding. It represents the per-share worth of the fund, similar to how the value of a house is determined by its total worth after debts are subtracted. Investors use it to gauge the true value of their holdings and to compare different investment options.

internal rate of return financial

"resulted in an investment level exited gross internal rate of return ("IRR") of approximately 12%"

A percentage that represents the annualized yield an investment would earn, taking into account the timing and amount of all cash inflows and outflows; mathematically it is the rate that makes the discounted sum of future cash flows equal the initial cost. Investors use it to compare different projects or deals the way they compare interest rates — a higher internal rate of return suggests a stronger potential payoff, but it does not by itself show risk, scale, or timing nuances.

ebitda financial

"middle market lending to companies with less than $50 million of EBITDA"

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company's profitability by focusing on the money it makes from its core operations, ignoring expenses like taxes and accounting adjustments. Investors use EBITDA to compare how well different companies are performing financially, as it provides a clearer picture of operational success without the influence of financial structure or accounting choices.

dividend reinvestment plan financial

"We have adopted a dividend reinvestment plan (also known as our “DRIP”)"

A dividend reinvestment plan lets shareholders automatically use cash dividends to buy more shares of the same company instead of receiving the money. It matters to investors because it turns regular payouts into a steady way to grow ownership and take advantage of compound returns—like having your savings automatically buy additional slices of a pie over time—while often reducing transaction costs and smoothing purchase timing.

AI-generated analysis. Not financial advice.

NEW YORK, Feb. 09, 2026 (GLOBE NEWSWIRE) -- Prospect Capital Corporation (NASDAQ: PSEC) (“Prospect”, “our”, or “we”) today announced financial results for our fiscal quarter ended December 31, 2025.

FINANCIAL RESULTS

All amounts in $000’s except per share amounts (on weighted average basis for period numbers)	Quarter Ended	Quarter Ended	Quarter Ended
	December 31, 2025	September 30, 2025	December 31, 2024
Net Investment Income (“NII”)	$90,888	$79,350	$86,431
NII per Common Share	$0.19	$0.17	$0.20
Interest as % of Total Investment Income	84.7%	96.7%	91.0%
Net Income (Loss) Applicable to Common Shareholders	$(6,576)	$48,087	$(30,993)
Net Income (Loss) per Common Share	$(0.01)	$0.10	$(0.07)
Distributions to Common Shareholders	$63,894	$62,393	$65,554
Distributions per Common Share	$0.135	$0.135	$0.15
Cumulative Paid and Declared Distributions to Common Shareholders(1)	$4,699,764	$4,633,799	$4,445,060
Cumulative Paid and Declared Distributions per Common Share(1)	$21.93	$21.79	$21.39
Total Assets	$6,534,578	$6,641,870	$7,234,855
Total Liabilities	$1,952,326	$2,012,561	$2,164,305
Perpetual Preferred Stock	$1,623,497	$1,624,519	$1,630,514
Net Asset Value (“NAV”) to Common Shareholders	$2,958,755	$3,004,790	$3,440,036
NAV per Common Share	$6.21	$6.45	$7.84
Balance Sheet Cash + Undrawn Revolving Credit Facility Commitments	$1,647,216	$1,524,462	$1,879,738
Net of Cash Debt to Total Assets	28.2%	28.2%	28.1%
Net of Cash Debt to Total Equity Ratio(2)	39.9%	39.9%	39.8%
Net of Cash Asset Coverage of Debt Ratio(2)	350%	350%	351%
Interest Coverage(3)	426%	339%	363%
Unsecured Debt + Perpetual Preferred Equity as % of Total Debt + Perpetual Preferred Equity	85.3%	80.8%	91.9%
Unsecured and Non-Recourse Debt as % of Total Debt	100.0%	100.0%	100.0%

⁽¹⁾   Declared dividends are through the April 2026 distribution. February 2026 through April 2026 distributions are estimated based on shares outstanding as of 2/6/2026.
⁽²⁾   Including our perpetual preferred stock as equity.
⁽³⁾   Calculated as (Net Investment Income + Interest Expense + Incentive Fees) / Interest Expense.

CASH COMMON SHAREHOLDER DISTRIBUTION DECLARATION

Prospect is declaring distributions to common shareholders as follows:

Monthly Cash Common Shareholder Distribution	Record Date	Payment Date	Amount ($ per share)
February 2026	2/25/2026	3/19/2026	$0.0450
March 2026	3/27/2026	4/21/2026	$0.0450
April 2026	4/28/2026	5/19/2026	$0.0450

Taking into account past distributions and our current share count for declared distributions, since inception through our April 2026 declared distribution, Prospect will have distributed $21.93 per share to original common shareholders, aggregating approximately $4.7 billion in cumulative distributions to all common shareholders.

Since Prospect’s initial public offering in July 2004 through December 31, 2025, Prospect has invested over $22 billion across over 450 investments, exiting over 350 of these investments.

Since Prospect's initial public offering in July 2004 through December 31, 2025, Prospect's exited investments resulted in an investment level exited gross internal rate of return ("IRR") of approximately 12% (based on total capital invested of approximately $13.1 billion and total proceeds from such exited investments of approximately $16.7 billion).

In Prospect’s primary business of middle market lending over the same more than 21-year time period, Prospect’s exited investments resulted in an investment level exited gross IRR of approximately 14.5% (based on total capital invested of approximately $11.2 billion and total proceeds from such exited investments of approximately $14.3 billion), with an annualized realized loss rate of 0.2%.

In Prospect’s core targeted business of middle market lending to companies with less than $50 million of EBITDA over the same more than 21-year time period, Prospect’s exited investments resulted in an investment level exited gross IRR of approximately 17.2% (based on total capital invested of approximately $6.3 billion and total proceeds from such exiting investments of approximately $8.3 billion), with an annualized net realized loss rate of 0.1%.

Prospect’s EBITDA to interest coverage for our primary business of middle market lending is approximately 210%, which grows to approximately 230% for Prospect’s core targeted middle market lending to companies with less than $50 million of EBITDA.

Middle-Market Lending Track Record	Overall	< $50 Million EBITDA	> $50 Million EBITDA
Investments	379	215	164
Total Capital Invested	$17.3 billion	$9.8 billion	$7.5 billion
Total Proceeds	$18.7 billion	$10.7 billion	$8.1 billion
Amount Remaining(1)	$5.3 billion	$3.0 billion	$2.3 billion
Total	$24.0 billion	$13.6 billion	$10.4 billion
Exited Track Record Since Inception
Investments	292	161	131
Total Capital Invested	$11.2 billion	$6.3 billion	$4.9 billion
Total Proceeds	$14.3 billion	$8.3 billion	$6.0 billion
Exited Gross IRR(2)	14.5%	17.2%	10.3%
Annualized Net Realized Loss Rate(3)	0.2%	0.1%	0.3%
Middle Market Lending Portfolio Cash Interest Coverage(4)	210%	230%	179%

⁽¹⁾   Amount remaining represents the fair value of investments and any additional interest receivable, net.
⁽²⁾   See "Internal Rate of Return" definition.
⁽³⁾   See "Annualized Net Realized Loss Rate" definition.
⁽⁴⁾   See "Middle Market Lending Portfolio Company EBITDA and Cash Interest Coverage".

Drivers focused on optimizing our business include:

(1) rotation of assets into and increased focus on our core business of first lien senior secured middle market loans (with our first lien mix increasing 728 basis points to 71.4% (based on cost) from June 2024), with selected equity linked investments, focusing on new investments in companies with less than $50 million of EBITDA, including companies with smaller funded private equity sponsors, independent sponsors, and no third party financial sponsors;

(2) reduction in our second lien senior secured middle market loans (with our second lien mix decreasing 371 basis points to 12.7% (based on cost) from June 2024);

(3) exit of our subordinated structured notes portfolio (with our subordinated structured notes mix decreasing 818 basis points to 0.2% (based on cost) from June 2024);

(4) exit of targeted equity linked assets, including real estate properties (with five additional properties sold in the current fiscal year) and certain corporate investments (such as the sale of significant assets within Echelon Transportation, LLC in July 2025 and December 2025), with other potential exits targeted;

(5) enhancement of portfolio company operating performance; and

(6) utilization of our cost efficient revolving floating rate credit facility (which significantly matches our majority floating rate assets).

In our middle market lending strategy, which represented 85% of our investments at cost as of December 31, 2025, we continued our focus on first lien senior secured loans during the quarter. Middle market investments comprised 100% of our $80.4 million of originations during the December 2025 quarter. Investments during the quarter included follow-on investments in existing portfolio companies to support acquisitions, working capital needs, organic growth initiatives, and other objectives.

As of December 31, 2025, our portfolio included 2.8% (based on cost) of investments in software companies, which is significantly less than the 22% average across business development companies with publicly traded unsecured bonds included in a February 2, 2026 Barclays fixed income research report.

Our real estate property portfolio at National Property REIT Corp. (“NPRC”) totaled 14.1% of our investments at cost as of December 31, 2025 and continued its focus on already developed and occupied cash flow multifamily investments. Since the inception of this strategy in 2012 and through December 31, 2025, we have exited 56 property investments that have earned an unlevered investment-level gross cash IRR of 24% and cash on cash multiple of 2.4 times. We exited four property investments in the current fiscal year through December 31, 2025 that earned an unlevered investment-level gross cash IRR of 21% and cash on cash multiple of 2.4 times. NPRC exited one additional property investment after December 31, 2025, and has multiple additional properties in various stages of sale processes. The remaining real estate property portfolio as of December 31, 2025 included 54 properties and paid us an income yield of 5.4% for the quarter ended December 31, 2025, thereby providing opportunities to exit certain such investments and recycle into more and higher yielding first lien senior secured loans with selected equity linked investments. Our aggregate investment in NPRC included a $270 million unrealized gain as of December 31, 2025.

Our senior management team and employees own 27.9% of all common shares outstanding or approximately $0.8 billion of our common equity as measured at NAV.

PORTFOLIO UPDATE AND INVESTMENT ACTIVITY

All amounts in $000’s except per unit amounts	As of	As of	As of
	December 31, 2025	September 30, 2025	December 31, 2024
Total Investments(1)	$6,389,615	$6,532,842	$7,025,705
Total Investments(2)	$6,441,536	$6,513,456	$7,132,928
Number of Portfolio Companies	91	92	114
Number of Industries	32	32	33
First Lien Debt	71.4%	71.1%	67.5%
Second Lien Debt	12.7%	13.5%	13.6%
Total Senior and Secured Debt	84.1%	84.6%	81.1%
Unsecured Debt	0.1%	0.1%	0.1%
Subordinated Structured Notes	0.2%	0.3%	6.9%
Equity Investments	15.6%	15.0%	11.9%
Total Investments(1)	100.0%	100.0%	100.0%
First Lien Debt	67.0%	67.6%	64.9%
Second Lien Debt	9.9%	9.9%	10.2%
Total Senior and Secured Debt	76.9%	77.5%	75.1%
Unsecured Debt	0.1%	0.1%	0.1%
Subordinated Structured Notes	0.2%	0.3%	5.8%
Equity Investments	22.8%	22.1%	19.0%
Total Investments(2)	100.0%	100.0%	100.0%
Non-Accrual Loans as % of Total Assets(2)	0.7%	0.7%	0.4%

⁽¹⁾   Calculated at cost.
⁽²⁾   Calculated at fair value.

During the September 2025 and December 2025 quarters, investment originations (including follow on investments in existing portfolio companies) and repayments were as follows:

All amounts in $000’s	Quarter Ended	Quarter Ended
	December 31, 2025	September 30, 2025
Total Originations	$80,434	$91,567
Middle-Market	100.0%	71.7%
Real Estate	—%	27.9%
Other	—%	0.4%
Total Repayments and Sales	$79,266	$234,660
Originations, Net of Repayments and Sales	$1,168	$(143,093)

For additional disclosure see “Primary Origination Strategies” at the end of this release.

CAPITAL AND LIQUIDITY

Our multi-year, long-term laddered and diversified historical funding profile over our more than 21 year history has included our current $2.1 billion revolving credit facility (aggregate commitments with 48 current lenders), program notes, institutional bonds, convertible bonds, listed preferred stock, and program preferred stock. We have retired multiple upcoming maturities, including the redemption of our remaining outstanding 3.706% Notes due January 2026 in June 2025 (original principal amount $400.0 million). During the quarter ended December 2025, we called $20.7 million of program notes maturing in 2026 with a weighted average interest rate of 6.41%, repurchased $32.5 million of our 3.364% 2026 Notes due November 2026 (with an additional $2.7M repurchased pending delivery from broker) and repurchased $20.3 million of our 3.437% Notes due October 2028 (average purchase price of 96.8% and 89.5%, respectively). Our next institutional bond maturity is $267.5 million in November 2026.

On October 30, 2025, we successfully completed the institutional issuance of approximately $167.6 million in aggregate principal amount of senior unsecured 5.5% Series A Notes due 2030 (the "Notes"), which mature on December 31, 2030.

Our unfunded eligible commitments to portfolio companies aggregate approximately $34.2 million, of which $22.6 million are considered at our sole discretion, representing 0.5% and 0.3% of our total assets as of December 31, 2025, respectively.

	As of	As of
All amounts in $000’s	December 31, 2025	September 30, 2025
Net of Cash Debt to Total Assets Ratio	28.2%	28.2%
Net of Cash Debt to Total Equity Ratio(1)	39.9%	39.9%
% of Interest-Bearing Assets at Floating Rates	75.3%	75.7%
Unsecured Debt + Perpetual Preferred Equity as % of Total Debt + Perpetual Preferred Equity	85.3%	80.8%
Balance Sheet Cash + Undrawn Revolving Credit Facility Commitments	$1,647,216	$1,524,462
Unencumbered Assets	$4,194,628	$4,170,538
% of Total Assets	64.2%	62.8%

⁽¹⁾   Including our perpetual preferred stock as equity.

We currently have three separate unsecured debt issuances aggregating approximately $718.6 million outstanding, not including our program notes, with laddered maturities extending through December 2030. At December 31, 2025, $637.2 million of program notes were outstanding with laddered maturities through March 2052.

At December 31, 2025 our weighted average cost of unsecured debt financing was 4.68%.

We have raised significant capital from our existing $2.25 billion perpetual preferred stock offering programs. The perpetual preferred stock provides Prospect with a diversified source of programmatic capital without creating scheduled maturity risk due to the perpetual term of multiple preferred tranches.

DIVIDEND REINVESTMENT PLAN

We have adopted a dividend reinvestment plan (also known as our “DRIP”) that provides for reinvestment of our distributions on behalf of our shareholders, unless a shareholder elects to receive cash. On April 17, 2020, our board of directors approved amendments to the Company’s DRIP, effective May 21, 2020. These amendments principally provide for the number of newly-issued shares pursuant to the DRIP to be determined by dividing (i) the total dollar amount of the distribution payable by (ii) 95% of the closing market price per share of our stock on the valuation date of the distribution (providing a 5% discount to the market price of our common stock), a benefit to shareholders who participate.

HOW TO PARTICIPATE IN OUR DIVIDEND REINVESTMENT PLAN

Shares held with a broker or financial institution

Many shareholders have been automatically “opted out” of our DRIP by their brokers. Even if you have elected to automatically reinvest your PSEC stock with your broker, your broker may have “opted out” of our DRIP (which utilizes DTC’s dividend reinvestment service), and you may therefore not be receiving the 5% pricing discount. Shareholders interested in participating in our DRIP to receive the 5% discount should contact their brokers to make sure each such DRIP participation election has been made through DTC. In making such DRIP election, each shareholder should specify to one’s broker the desire to participate in the "Prospect Capital Corporation DRIP through DTC" that issues shares based on 95% of the market price (a 5% discount to the market price) and not the broker's own "synthetic DRIP” plan (if any) that offers no such discount. Each shareholder should not assume one’s broker will automatically place such shareholder in our DRIP through DTC. Each shareholder will need to make this election proactively with one’s broker or risk not receiving the 5% discount. Each shareholder may also consult with a representative of such shareholder’s broker to request that the number of shares the shareholder wishes to enroll in our DRIP be re-registered by the broker in the shareholder’s own name as record owner in order to participate directly in our DRIP.

Shares registered directly with our transfer agent

If a shareholder holds shares registered in the shareholder’s own name with our transfer agent (less than 0.1% of our shareholders hold shares this way) and wants to make a change to how the shareholder receives dividends, please contact our plan administrator, Equiniti Trust Company, LLC by calling (888) 888-0313 or by mailing Equiniti Trust Company LLC, PO Box 10027, Newark, New Jersey 07101.

EARNINGS CONFERENCE CALL

Prospect will host an earnings call on Tuesday, February 10, 2026 at 9:00 a.m. Eastern Time. Dial 888-338-7333. For a replay after February 10, 2026 visit www.prospectstreet.com or call 855-669-9658 with passcode 5803677.

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except share and per share data)
		December 31, 2025			June 30, 2025
		(Unaudited)
Assets
Investments at fair value:
Control investments (amortized cost of $3,364,482 and $3,416,244, respectively)	$	3,695,903		$	3,696,367
Affiliate investments (amortized cost of $12,835 and $11,735, respectively)		33,902			27,057
Non-control/non-affiliate investments (amortized cost of $3,012,298 and $3,265,522, respectively)		2,711,731			2,950,092
Total investments at fair value (amortized cost of $6,389,615 and $6,693,501, respectively)		6,441,536			6,673,516
Cash and cash equivalents (restricted cash of $3,562 and $4,282, respectively)		38,059			50,788
Receivables for:
Interest, net		22,035			25,144
Other		6,782			1,642
Deferred financing costs on Revolving Credit Facility		16,466			18,842
Due from Prospect Administration		5,448			—
Due from broker		2,730			33,393
Prepaid expenses		985			1,488
Derivative Assets, at fair value		484			—
Due from Affiliate		53			125
Total Assets		6,534,578			6,804,938
Liabilities
Revolving Credit Facility		512,343			856,322
Public Notes (less unamortized discount and debt issuance costs of $12,462 and $6,556, respectively)		706,103			593,444
Prospect Capital InterNotes® (less unamortized debt issuance costs of $7,982 and $8,687, respectively)		629,250			638,545
Due to Prospect Capital Management		48,968			41,757
Dividends payable		29,783			28,836
Interest payable		15,800			15,116
Due to broker		6,047			5,639
Accrued expenses		2,876			3,490
Due to Prospect Administration		—			2,602
Derivative Liabilities, at fair value		968			—
Other liabilities		188			515
Total Liabilities		1,952,326			2,186,266
Commitments and Contingencies
Preferred Stock, par value $0.001 per share (847,900,000 and 847,900,000 shares of preferred stock authorized; 70,562,640 and 70,915,937 issued and outstanding, respectively)		1,623,497			1,629,900
Net Assets Applicable to Common Shares	$	2,958,755		$	2,988,772
Components of Net Assets Applicable to Common Shares and Net Assets, respectively
Common stock, par value $0.001 per share (1,152,100,000 and 1,152,100,000 common shares authorized; 476,461,879 and 455,902,826 issued and outstanding, respectively)		476			456
Paid-in capital in excess of par		4,300,694			4,242,196
Accumulated other comprehensive income (loss)		(3,759)			—
Distributions in excess of earnings		(1,338,656)			(1,253,880)
Net Assets Applicable to Common Shares	$	2,958,755		$	2,988,772
Net Asset Value Per Common Share	$	6.21		$	6.56

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (Unaudited)
	Three Months Ended December 31,					Six Months Ended December 31,
		2025			2024		2025			2024
Investment Income
Interest income (excluding payment-in-kind (“PIK”) interest income):
Control investments	$	58,329		$	57,386	$	117,545		$	109,768
Non-control/non-affiliate investments		75,575			87,159		153,337			182,069
Structured credit securities		—			4,054		—			8,233
Total interest income (excluding PIK interest income)		133,904			148,599		270,882			300,070
PIK interest income:
Control investments		12,490			13,884		24,284			33,594
Non-control/non-affiliate investments		2,654			6,315		6,276			19,749
Total PIK Interest Income		15,144			20,199		30,560			53,343
Total interest income		149,048			168,798		301,442			353,413
Dividend income:
Control investments		17,038			4,387		17,915			4,387
Affiliate investments		985			—		985			141
Non-control/non-affiliate investments		5,961			2,574		8,657			4,843
Total dividend income		23,984			6,961		27,557			9,371
Other income:
Control investments		392			8,416		746			15,383
Non-control/non-affiliate investments		2,578			1,291		3,881			3,607
Total other income		2,970			9,707		4,627			18,990
Total Investment Income		176,002			185,466		333,626			381,774
Operating Expenses
Base management fee		32,932			37,069		66,549			75,675
Income incentive fee		16,035			13,632		17,269			29,312
Interest and credit facility expenses		32,790			37,979		66,477			77,739
Allocation of overhead from Prospect Administration		23			5,708		5,547			11,416
Audit, compliance and tax related fees		(239)			80		660			1,800
Directors’ fees		150			150		300			300
Other general and administrative expenses		3,423			4,417		6,586			9,224
Total Operating Expenses		85,114			99,035		163,388			205,466
Net Investment Income		90,888			86,431		170,238			176,308
Net Realized and Net Change in Unrealized Gains (Losses) from Investments
Net realized gains (losses)
Control investments		(66,216)			3		(65,369)			6,370
Non-control/non-affiliate investments		(75,087)			(46,656)		(77,825)			(153,393)
Net realized gains (losses)		(141,303)			(46,653)		(143,194)			(147,023)
Net change in unrealized gains (losses)
Control investments		37,117			30,419		51,298			(143,829)
Affiliate investments		1,982			(1,446)		5,746			2,002
Non-control/non-affiliate investments		32,208			(69,053)		14,862			(22,020)
Net change in unrealized gains (losses)		71,307			(40,080)		71,906			(163,847)
Net Realized and Net Change in Unrealized Gains (Losses) from Investments		(69,996)			(86,733)		(71,288)			(310,870)
Net realized gains (losses) on extinguishment of debt		2,896			236		2,819			484
Net realized gains (losses) from derivative instruments and foreign currency transactions		(224)			—		(224)			—
Net change in unrealized gains (losses) from derivative instruments and foreign currency transactions		155			—		155			—
Net Increase (Decrease) in Net Assets Resulting from Operations		23,719			(66)		101,700			(134,078)
Preferred Stock dividends		(26,740)			(26,228)		(53,507)			(53,385)
Net gain (loss) on redemptions of Preferred Stock		(1,349)			(906)		(2,711)			1,398
Gain (loss) on Accretion to Redemption Value of Preferred Stock		(2,206)			(3,793)		(3,971)			(9,997)
Net Increase (Decrease) in Net Assets Resulting from Operations applicable to Common Stockholders	$	(6,576)		$	(30,993)	$	41,511		$	(196,062)

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES ROLLFORWARD OF NET ASSET VALUE PER COMMON SHARE (in actual dollars)
	Three Months Ended December 31,						Six Months Ended December 31,
		2025			2024			2025			2024
Per Share Data(10)
Net asset value per common share at beginning of period	$	6.45		$	8.10		$	6.56		$	8.74
Net investment income		0.19			0.20			0.36			0.41
Net realized and change in unrealized gains (losses)(1)		(0.15)			(0.21)			(0.17)			(0.74)
Net increase (decrease) from operations(10)		0.04			(0.01)			0.20	(7)		(0.33)
Distributions of net investment income to preferred stockholders		(0.06)	(4)		(0.06)	(3)		(0.11)	(4)		(0.12)	(3)
Total distributions to preferred stockholders(10)		(0.06)			(0.06)			(0.11)			(0.12)
Net increase (decrease) from operations applicable to common stockholders		(0.02)			(0.07)			0.09			(0.45)
Distributions of net investment income to common stockholders		(0.14)	(4)		(0.15)	(3)		(0.27)	(4)		(0.31)	(3)(6)
Return of capital to common stockholders		—	(4)		—	(3)		—	(4)		(0.02)	(3)(6)
Total distributions to common stockholders		(0.14)			(0.15)			(0.27)			(0.33)
Effect of other comprehensive income(8)		—	(9)		—			—	(9)		—
Common stock transactions(2)		(0.08)			(0.04)			(0.16)			(0.13)
Net asset value per common share at end of period	$	6.21	(7)	$	7.84		$	6.21		$	7.84	(7)

(1)   Realized gains (losses) is inclusive of net realized losses (gains) on investments, realized losses (gains) from extinguishment of debt and realized gains (losses) from the repurchases and redemptions of preferred stock.

(2)   Common stock transactions include the effect of our issuance of common stock in public offerings (net of underwriting and offering costs), shares issued in connection with our common stock dividend reinvestment plan, common shares issued to acquire investments, common shares repurchased below net asset value pursuant to our Repurchase Program, and common shares issued pursuant to the Holder Optional Conversion of our 5.50% Preferred Stock and 6.50% Preferred Stock.

(3)   Tax character of distributions is not yet finalized for the respective fiscal period and will not be finalized until we file our tax return for our tax year ending August 31, 2025.

(4)   Tax character of distributions is not yet finalized for the respective fiscal period and will not be finalized until we file our tax return for our tax year ending August 31, 2026.

(5)   Diluted net decrease from operations applicable to common stockholders was $0.01 for the three months ended December 31, 2025. Diluted net decrease from operations applicable to common stockholders was $0.07 for the three months ended December 31, 2024. Diluted net increase from operations applicable to common stockholders was $0.09 for the six months ended December 31, 2025. Diluted net decrease from operations applicable to common stockholders was $0.45 for the six months ended December 31, 2024.

(6)   The amounts reflected for the respective fiscal periods were updated based on tax information received subsequent to our Form 10-Q filing for December 31, 2024. Certain reclassifications have been made in the presentation of prior period amounts.

(7)   Does not foot due to rounding.

(8)   Effect of other comprehensive income is related to income/(loss) deemed attributable to instrument specific credit risk derived from changes in fair value associated with liabilities valued under the fair value option (ASC 825.)

(9)   Effect is less than $0.01 per share.

(10)   Per share data amount is based on the basic weighted average number of common shares outstanding for the year/period presented (except for dividends to stockholders which is based on actual rate per share).

INTERNAL RATE OF RETURN

Internal Rate of Return (“IRR”) is the discount rate that makes the net present value of all cash flows related to a particular investment equal to zero. IRR is gross of general expenses not related to specific investments as these expenses are not allocable to specific investments. Investments are considered to be exited when the original investment objective has been achieved through the receipt of cash and/or non-cash consideration upon the repayment of a debt investment or sale of an investment or through the determination that no further consideration was collectible and, thus, a loss may have been realized. Prospect’s gross IRR calculations are unaudited. Information regarding internal rates of return are historical results relating to Prospect’s past performance and are not necessarily indicative of future results, the achievement of which cannot be assured.

All track record data herein is as of 12/31/2025, unless otherwise noted. Middle-market lending track record segmentation by EBITDA represents EBITDA at the date of initial investment.

ANNUALIZED NET REALIZED LOSS RATE

Annualized net realized loss rate defined as realized gains/(losses) on investments as a percentage of total invested capital since inception, divided by the number of years since inception for the respective investments. Numbers may not add up to precise totals due to rounding.

PRIMARY ORIGINATION STRATEGIES

Our primary investment strategy is investing in private, middle-market companies in the U.S. in need of capital for refinancings, acquisitions, capital expenditures, growth initiatives, recapitalizations and other purposes. Typically, we focus on making investments in middle-market companies with annual revenues of less than $750 million and enterprise values of less than $1 billion. These private, middle-market companies are primarily owned by private equity funded and independent sponsors or us, as well as by a portfolio company’s management team, founder(s), or other investors. Our typical investment involves a senior and secured loan of less than $250 million.

Our investments in senior and secured loans are generally senior debt instruments that rank ahead of unsecured debt and equity of a given portfolio company. These loans also have the benefit of security interests on assets of the applicable portfolio company, which often rank ahead of any other security interests. We also make equity and equity-linked investments with capital-appreciation potential (such as senior and secured convertible debt, preferred equity, common equity and warrants).

We also invest a lesser amount of our assets in senior and secured debt and controlling equity positions in real estate investment trusts (“REIT” or “REITs”). The real estate investments of National Property REIT Corp. (“NPRC”) are in various classes of developed and occupied real estate properties that generate current yields, including multi-family properties and other tenant-diversified properties; historically, NPRC made investments in structured credit (primarily debt tranches). We historically invested in structured credit (primarily equity tranches).

We may also invest in other strategies and opportunities from time to time that the Investment Adviser views as attractive. The Investment Adviser may continue to evaluate other origination strategies in the ordinary course of business with no specific top-down allocation to any single origination strategy.

We directly originate the significant majority of our investments through our long-term relationships with private equity funded and independent sponsors, financial intermediaries, and management teams, as well as other sources. We seek to maximize returns, including both current yield and capital-appreciation potential, and minimize risk for our investors by applying rigorous credit and other analyses and cash-flow and asset-based lending techniques to originate, close, and monitor our investments.

We are consistently pursuing multiple investment opportunities. There can be no assurance that we will successfully consummate any investment opportunity we pursue. If any of these opportunities are consummated, there can be no assurance that investors will share our view of valuation or that any assets acquired will not be subject to future write downs, each of which could have an adverse effect on our stock price.

MIDDLE MARKET LENDING PORTFOLIO COMPANY EBITDA AND CASH INTEREST COVERAGE

Middle Market Lending Portfolio Company Cash Interest Coverage (“Middle Market Portfolio Cash Interest Coverage”) provide clarity into the underlying capital structure of PSEC’s middle-market loan portfolio investments and the likelihood that such portfolio will make interest payments and repay principal. Investments in real estate, subordinated structured notes, and equity (for which principal repayment is not fixed) and for which EBITDA is not available, negative or de minimis are not included in the calculations.

Middle Market Portfolio Cash Interest Coverage reflects the simple average cash interest coverage of each of PSEC’s middle-market loan portfolio investments. The cash interest coverage for each middle-market loan portfolio investment is calculated based on the portfolio company’s cash interest and adjusted EBITDA.

Middle Market Portfolio Cash Interest Coverage generally indicates a portfolio company’s ability to make interest payments and repay principal. Adjusted EBITDA provides PSEC with insight into profitability and scale of the portfolio companies within PSEC's middle-market loan portfolio.

These calculations include addbacks and adjustments that are often negotiated and documented in the applicable investment documents, including but not limited to transaction costs, share-based compensation, management fees, foreign currency translation adjustments, and nonrecurring transaction expenses. Consumer finance companies are adjusted to treat third-party receivables financing as a cost of goods sold (rather than financing) because consumer finance companies typically rely on such financing to fund their lending activities.

Middle Market Portfolio Cash Interest Coverage assist PSEC in assessing the likelihood that PSEC will timely receive interest and principal payments. However, these calculations are not meant to substitute for an analysis of PSEC’s underlying portfolio company debt investments, but to supplement such analysis.

About Prospect Capital Corporation

Prospect is a business development company that primarily lends to and invests in middle market privately-held companies. Prospect’s investment objective is to generate both current income and long-term capital appreciation.

Prospect has elected to be treated as a business development company under the Investment Company Act of 1940. Prospect has elected to be treated as a regulated investment company under the Internal Revenue Code of 1986.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under our control, and that we may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from any forward-looking statements. Such statements speak only as of the time when made, and we undertake no obligation to update any such statement now or in the future.

For additional information, contact:

Grier Eliasek, President and Chief Operating Officer
grier@prospectcap.com 
Telephone (212) 448-0702

FAQ

What were Prospect Capital (PSEC) results for the quarter ended December 31, 2025?

Prospect reported NII of $90.9M ($0.19/share) and a net loss to common of $(6.6)M. According to the company, NAV per common share was $6.21 and cash plus undrawn revolver commitments totaled $1.647B as of 12/31/2025.

How much is Prospect Capital (PSEC) paying in common shareholder distributions for Feb–Apr 2026?

Prospect declared monthly cash distributions of $0.045 per share for February, March, and April 2026. According to the company, these payments are scheduled with record and payment dates listed for each month and reflect its stated ongoing distribution policy.

Did Prospect Capital (PSEC) issue or repurchase debt in the December 2025 quarter?

Yes. Prospect issued approximately $167.6M of 5.5% Series A senior unsecured notes due 2030 and repurchased/called various program and institutional notes. According to the company, the actions reshaped the unsecured debt ladder and reduced near‑term maturities.

What portfolio strategy changes did Prospect Capital (PSEC) report for December 2025?

Prospect continued rotating into first‑lien senior secured middle‑market loans, increasing first‑lien mix to 71.4% at cost. According to the company, originations during the quarter were 100% middle‑market and focused on companies with < $50M EBITDA.

How does Prospect Capital's (PSEC) DRIP (dividend reinvestment plan) work and what discount is available?

Prospect's DRIP issues new shares at 95% of the closing market price (a 5% discount) for reinvested distributions. According to the company, shareholders must elect the DRIP through their broker/DTC to receive the discounted share issuance rather than a broker's synthetic plan.