Saratoga Investment (SAR) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 NAV increased 6.1% year-over-year to $392.7 million, with AUM at $978.1 million, up 1.9% sequentially but down 14.1% year-over-year.

• Portfolio quality remains high, with 99.7% of credits in the top rating and only two non-accruals, both restructured.

• Transitioned to a monthly dividend structure, increasing the base dividend to $0.75 per share for Q1 FY26, reflecting a 12.1% yield.

• Return on equity for the last 12 months was 7.5%, below the industry average of 8.9%.

• Maintained strong liquidity with $428 million in investment capacity, including $204.7 million in cash.

Financial highlights

• Adjusted NII for FY25 was $53.0 million ($3.81/share), up 2.1% year-over-year; Q4 adjusted NII was $8.0 million ($0.56/share), down 37.2% year-over-year.

• NAV per share at year-end was $25.86, down from $27.12 last year.

• AUM at fair value reached $978.1 million, invested across 48 companies, one CLO, and one JV.

• Realized gains of $7.2 million from three equity realizations in Q4; net realized gains and unrealized depreciation totaled $7.6 million.

• LTM total return was 26%, outperforming the BDC index at 13%.

Outlook and guidance

• Management expects long-term AUM growth, supported by a robust pipeline, available capital, and disciplined asset selection.

• Dividend policy will be reviewed quarterly, with spillover levels above $3 per share providing flexibility for special distributions.

• Cautious approach to new commitments in a volatile macro environment, with focus on risk-adjusted returns.