Saratoga Investment (SAR) investor relations material

Executive summary

• AUM reached $1.150B, up 2.1% QoQ and 15.6% YoY, with $37.1M of net originations; adjusted NII was $0.46/share and NAV fell to $22.15/share.

• Credit markdowns drove a $25.9M QoQ decline in net assets and negative LTM ROE; 96% of credits held the highest internal rating.

• Pepper Palace and the CLO F-Note were sold after quarter-end, eliminating remaining non-accrual investments.

• Priorities remain selective deployment, senior-secured first-lien lending, liquidity and NAV preservation amid competitive markets and macroeconomic uncertainty.

Financial highlights

• Adjusted NII was $7.428M, or $0.46/share, versus $7.6M/$0.47 QoQ and $9.1M/$0.58 YoY; reported NII was $7.3M, or $0.45/share.

• Total investment income was $31.2M, up 2.0% YoY; investment interest rose to $28.8M from $26.4M, while Q2 NII was $7.3M versus $9.1M.

• Adjusted NII yield was 8.1%, up from 7.8% QoQ and down from 9.0% YoY; core BDC net interest margin rose to $13.6M from $13.4M QoQ.

• NAV was $352.6M, down $25.9M or 6.8% QoQ; NAV/share fell $1.08, or 4.6%, to $22.15. NAV/share was $24.42 at February 28, 2026.

• Q2 net loss from operations was $6.7M, or $0.41/share; net realized gains were $2.1M, mainly from Gen4 and Modis Dental equity conversions.

Outlook and guidance

• Declared $0.75/share in aggregate dividends for the quarter ending November 30, 2026, payable in three monthly $0.25 installments; the board reviews the level at least quarterly.

• Management expects earnings to improve as the portfolio grows, CLO management fees and interest income resume, and asset-side spreads adjust; no near-term radical market shift was forecast.

• Quarter-end investment capacity of $211M could support 18% asset growth without external financing; deployment remains subject to high underwriting standards.

• Strategic priorities include asset growth without sacrificing credit quality, stronger sourcing and management capacity, and deployment of available financing; base-rate increases are expected to benefit interest income.