FS KKR Capital (FSK) Q3 2026 earnings summary

Executive summary

• Q3 net investment income was $127 million, or $0.46/share; adjusted NII was also $0.46/share. NAV was $18.28/share at September 30, versus $18.30 at June 30.

• Net increase in assets from operations was $73 million, while realized and unrealized losses totaled $54 million; nine-month operations produced a $402 million net-asset decline.

• Priorities include repurchases, deleveraging, resolving challenged assets and rotating toward more first-lien senior secured investments.

Financial highlights

• Q3 investment income was $294 million, versus $290 million in Q2 and $373 million a year earlier; reported NII was $127 million, versus $122 million in Q2 and $159 million a year earlier.

• Net expenses were $165 million versus $168 million in Q2; NII before taxes was $129 million, with $2 million of excise taxes.

• Belk’s $25 million non-recurring dividend lifted Q3 NII by $0.08/share; a $12 million incentive-fee waiver also benefited NII.

• NAV/share declined from $18.30 to $18.28: NII added $0.46 and repurchases added $0.16, offset by portfolio valuation decline of $0.19 and distributions.

Outlook and guidance

• Q4 2026 GAAP NII/share is expected to equal 8%-9% of NAV on an annualized basis; Belk’s dividend was non-recurring, while JW Aluminum is expected to contribute a ~$17 million dividend.

• Declared Q4 common distributions of $0.44/share regular and $0.20/share special; Q3 NII covered 105% of the regular distribution, excluding the special distribution.

• Quarterly distributions are expected to fluctuate with NII; the annualized dividend target remains 8%-9% of NAV/share.

• The adviser agreed to waive 50% of subordinated income incentive fees through Q1 2027; waived amounts are not recoupable.