Capital Southwest (CSWC) Q2 2027 earnings summary

Executive summary

• Pre-tax net investment income was $37.2 million, or $0.58 per share; portfolio fair value reached $2.41 billion across 153 companies at September 30, 2026.

• Record originations totaled $391.0 million in commitments; $74.2 million of exits generated a 14.5% weighted average IRR.

Financial highlights

• Total investment income was $67.2 million; net investment income was $36.3 million, or $0.56 per basic share, and net increase in net assets from operations was $21.4 million.

• Net realized and unrealized investment losses were $13.4 million, including $14.6 million of debt-investment depreciation partly offset by $1.7 million of equity appreciation.

• NAV was $16.64 per share, versus $16.61 in the prior quarter; ATM issuance above NAV partly offset investment losses.

• Declared a $0.58 regular and $0.06 supplemental dividend for the quarter ending December 31, 2026; estimated UTI was $0.92 per share at September 30.

Outlook and guidance

• Management expects quarterly originations to trend toward $250 million as the expanded investment team ramps; regulatory leverage is targeted at 0.9x–1.0x, with repayments expected to rise in the December quarter.

• Management expects operating leverage to remain at 1.4%–1.5%; future supplemental-dividend decisions depend partly on UTI levels.

• Desert Star’s $25 million equity commitment is expected to be deployed over three years, targeting a 14%–16% return once fully ramped.