Saratoga Investment (SAR) Q2 2026 earnings summary

Executive summary

• Net asset value (NAV) increased 3.6% sequentially to $410.5 million, with NAV per share at $25.61, and only one non-accrual investment representing 0.2% of fair value, reflecting strong portfolio quality and outperformance versus industry averages.

• Return on equity (ROE) for the last twelve months was 9.1%, above the industry average of 7.3%, and the quarterly dividend was $0.75 per share, up 1% year-over-year, with a transition to monthly payments.

• Adjusted net investment income (NII) per share was $0.58, down 56.4% year-over-year and 12.1% sequentially, reflecting lower rates, repayments, and non-recurring prior year income.

• Portfolio fair value reached $995.3 million, diversified across 39 industries and geographies, with 84.3% in first lien loans and a weighted average current yield of 10.4%.

• Dividend yield was 12.3%, and LTM total return was 22%, far exceeding the BDC index.

Financial highlights

• Total investment income for the quarter was $30.6 million, down 28.8% year-over-year, mainly due to lower interest income and non-recurring items.

• Adjusted NII was $9.1 million, down 50.1% year-over-year and 10.5% sequentially, with an adjusted NII yield of 9.0%.

• Net realized gains for six months were $3.0 million, compared to net realized losses of $54.6 million in the prior year.

• Portfolio fair value increased by $3.8 million during the quarter, with core non-CLO portfolio marked up by $3.9 million.

• Weighted average interest rate on the core portfolio was 11.3%, down from 12.6% last year.

Outlook and guidance

• Management expects to deploy significant available capital ($407 million) as deal flow improves, aiming to close the gap between NII and dividend.

• Pipeline remains healthy, with $52.3 million in new originations and $12.8 million in repayments expected post quarter-end.

• Management remains focused on disciplined growth, maintaining credit quality, and leveraging available financing to drive NAV, ROE, and EPS growth.