Saratoga Investment (SAR) Q4 2025 earnings summary

Executive summary

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

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

• Transitioned to monthly dividend payments, raising the quarterly base dividend to $0.75 per share for Q1 FY26.

• ROE for the last twelve months was 7.5%, below the industry average of 8.9%, impacted by restructurings and CLO/JV markdowns.

• Liquidity and investment capacity remain substantial, supporting disciplined growth and risk management.

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.

• Portfolio fair value at $978.1 million, invested in 48 companies, one CLO, and one JV; 88.7% in first lien term loans.

• Dividend yield for Q1 FY26 is 12.1% based on a $24.86 share price; total dividends for FY25 were $3.31/share, including a $0.35 special dividend.

• Portfolio fair value is 2.2% below cost, but core non-CLO portfolio is 1.6% above cost.

Outlook and guidance

• Management expects continued portfolio growth and quality, leveraging robust pipeline, liquidity, and disciplined underwriting.

• Focus on expanding business development, supporting existing companies, and delivering risk-adjusted returns.

• Cautious approach to new commitments amid macroeconomic volatility.