Saratoga Investment (SAR) Q3 2026 earnings summary

Executive summary

• Net asset value (NAV) grew to $413.2 million, up 10.2% year-over-year and 0.7% sequentially, with NAV per share stable at $25.59.

• Adjusted net investment income (NII) per share increased 5.2% sequentially to $0.61, but declined year-over-year due to lower interest rates and repayments.

• Return on equity (ROE) for the last twelve months was 9.7%, consistently outperforming the BDC industry average of 6.6%.

• Portfolio quality remained high, with 99.8% of investments rated highest quality and only one non-accrual, well below the industry average.

• Announced a $0.75 per share aggregate dividend for the quarter, with a special $0.25 per share dividend paid in December.

Financial highlights

• Adjusted NII was $9.8 million, up 7.8% sequentially but down 21.3% year-over-year.

• Portfolio fair value reached $1.016 billion, up 2.1% sequentially and 5.8% year-over-year, with 83.9% in first-lien debt.

• Total investment income for the quarter was $31.6 million, down 11.8% year-over-year but up 3.3% sequentially.

• Net originations were $17.2 million, with $72.1 million in new investments and nine follow-ons.

• Weighted average shares outstanding increased to 16.1 million.

Outlook and guidance

• Management expects continued long-term AUM growth, supported by a robust pipeline and prudent underwriting.

• Four new portfolio company investments have closed or are closing in Q4, expected to further improve run-rate earnings.

• Focus remains on prudent capital deployment and maintaining strong credit quality.

• Dividend guidance for Q4 fiscal 2026 is $0.75 per share, representing a 12.9% yield.