Great Elm Capital (GECC) Q1 2025 earnings summary

Executive summary

• Achieved record total investment income of $12.5 million in Q1 2025, up 40% year-over-year and 36.7% sequentially, marking the highest in company history, driven by CLO JV and new investments.

• Net investment income (NII) rose to $4.6 million ($0.40 per share), more than double the prior quarter, fully covering the increased dividend of $0.37 per share.

• Net asset value (NAV) per share declined to $11.46 from $11.79 at year-end, mainly due to unrealized losses amid market volatility.

• Portfolio fair value grew to $341.9 million, with 76 investments across 56 companies and 28 industries.

• Board approved a $0.37 per share distribution for Q2 2025, yielding 14.7% annualized on market price and 12.9% on NAV.

Financial highlights

• Total investment income for Q1 2025 was $12.5 million ($1.08/share), a 36.7% sequential increase and a record for the company.

• NII for Q1 2025 was $4.6 million ($0.40 per share), more than double the prior quarter.

• Net realized and unrealized losses per share were ($0.36) in Q1 2025.

• NAV at period end was $132.3 million ($11.46 per share), down from $136.1 million ($11.79 per share) in Q4 2024.

• Total expenses for Q1 2025 were $7.9 million, up from $5.7 million in Q1 2024.

Outlook and guidance

• Management expects NII to increase in Q2 2025 and remains confident in covering distributions for the year.

• Board set Q2 2025 distribution at $0.37 per share, to be paid in cash from distributable earnings.

• Management expects unrealized losses to reverse over time if market conditions stabilize.

• Recommend evaluating performance on a four-quarter basis due to income fluctuations from CLO distributions.