Stellus Capital Investment (SCM) Q2 2025 earnings summary

Executive summary

• Net investment income for Q2 2025 was $9.6 million ($0.34 per share), with core net investment income of $10.0 million ($0.35 per share), both down year-over-year.

• Portfolio at fair value reached $985.9 million across 112 companies as of June 30, 2025, with 89% in first lien debt and 9% in equity investments.

• Net asset value per share was $13.21 at June 30, 2025, down from $13.46 at year-end, mainly due to reduction of spillover income.

• Distributions of $0.40 per share were declared for Q2 2025, consistent with the prior year.

• Asset coverage ratio was 211% as of June 30, 2025, well above the 150% regulatory minimum.

Financial highlights

• Total investment income for Q2 2025 was $25.7 million, down from $26.6 million in Q2 2024.

• $15.4 million invested in three new companies; $7.4 million in other investment activity at par.

• Received $21.7 million in full repayments and $10.4 million in other repayments at par.

• Net realized losses for the six months ended June 30, 2025 were ($6.8 million), improved from ($18.4 million) in the prior year.

• Realized $200,000 gain from one equity realization.

Outlook and guidance

• Regular monthly dividends of $0.1333 per share declared for July, August, and September 2025.

• Portfolio projected to remain around $1 billion by quarter end, with $26 million of new funding since June 30.

• Sufficient liquidity is maintained to fund $58.4 million in unfunded debt commitments as of June 30, 2025.

• Anticipate $12 million in equity realization proceeds and $10 million in gains over next five months.

• Management remains focused on maximizing total return through income and capital appreciation in lower middle-market companies.