Saratoga Investment (SAR) Q1 2026 earnings summary

Executive summary

• Adjusted NII per share rose 17.9% sequentially to $0.66, with NAV up 0.9% to $25.52 per share and ROE reaching 14.1% for the quarter and 9.3% LTM, outperforming the BDC industry average of 7.0%.

• Portfolio quality remained high, with 99.7% of credits in the top rating category and only two non-accruals, both recently restructured, well below the industry average.

• Two new portfolio company investments, continued strong core BDC portfolio performance, and net realized/unrealized gains of $3.8 million.

• Announced a base dividend of $0.25 per share per month, totaling $0.75 for the quarter, with a transition to monthly payments and a one-time $0.50 per share NAV reduction.

• Portfolio fair value was $968.3 million, with $224.3 million in cash at quarter-end.

Financial highlights

• Adjusted NII for the quarter was $10.1 million, down 29.3% year-over-year but up 26.2% sequentially; adjusted NII per share was $0.66, down 37.1% year-over-year, up 17.9% sequentially.

• NAV at quarter-end was $396.4 million, up $28.5 million year-over-year and $3.7 million sequentially; NAV per share was $25.52.

• Total investment income for Q1 FY26 was $32.3 million, down 16.4% year-over-year but up 3.3% sequentially.

• Portfolio at fair value was $968.3 million, with 86.9% in first lien term loans and 7.9% in equity interests.

• LTM total return was 22%, significantly outperforming the BDC index.

Outlook and guidance

• Management remains confident in the ability to grow portfolio size and quality, supported by a robust pipeline, strong underwriting, and available liquidity.

• Dividend level to be evaluated quarterly, with Q2 FY26 guidance at $0.75 per share, representing an 11.8% yield.

• Focus on expanding asset base without sacrificing credit quality, leveraging $430.3 million in available liquidity and strong capital structure.