Gladstone Capital GLAD Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Thu, February 5, 2026 astatine 8:42 AM CST 22 min read

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Thursday, February 5, 2026 astatine 8:30 a.m. ET

• President — Bob Marcotte

• Chief Financial Officer — Nicole Schaltenbrand

• Chairman and Chief Executive Officer — David Gladstone

Bob Marcotte: Good morning. Thank you, Catherine. I volition screen the highlights for the 4th and reason with immoderate comments connected our near-term outlook for the company. Beginning with our past quarter's results, fundings past 4th totaled $99.1 cardinal and included 2 caller backstage equity-sponsored investments totaling $37.8 cardinal and $61.3 cardinal of further advances to existing portfolio companies. Exits and prepayments declined comparative to the past mates of quarters to $52.8 million, truthful nett originations were $46.3 cardinal for the quarter.

Interest income for the play roseate to $23.9 cardinal arsenic the summation successful mean earning assets offset the 30 ground constituent diminution successful the mean SOFR rates compared to past 4th arsenic our weighted mean indebtedness output came successful astatine 12.2% for the period. Interest and financing costs accrued $200,000 connected higher mean slope borrowings incurred to implicit the fixed-rate enactment refinancings past 4th and higher mean concern balance. In addition, nett absorption fees roseate $600,000 with the summation successful mean assets and little origination interest credits. So nett concern income came successful astatine $11.3 cardinal for the period.

Net realized gains were $300,000 arsenic the exit of our remaining equity successful Sokol much than offset the $1.4 cardinal write-off associated with the unamortized costs with the enactment refinancing completed past quarter. Unrealized losses roseate to $5.3 cardinal past 4th and were concentrated successful 3 concern positions impacted by the caller authorities shutdown oregon wherever we person replaced elder absorption and are expecting important improvements implicit the equilibrium of 2026. With respect to the portfolio, the portfolio maturation for the play did not person a worldly interaction connected our concern premix oregon dispersed illustration arsenic archetypal lien indebtedness and full indebtedness investments came successful astatine 73.91% of the portfolio outgo respectively.

As of the extremity of the quarter, our 3 non-earning plus indebtedness investments were unchanged with a outgo ground of $28.8 cardinal oregon $13.2 cardinal astatine just worth oregon 1.6%. In addition, PIK income for the 4th roseate to $2.3 cardinal oregon 9.6% of involvement income. However, we besides collected $2.8 cardinal of PIK for the period, truthful our accrued PIK equilibrium declined accordingly. Since the extremity of the quarter, we person experienced 1 important prepayment of Vets Choice successful the magnitude of $42.8 million, which besides generated a ample prepayment interest of $855,000 connected the period. And to date, we person funded an further $6 cardinal elder indebtedness concern successful a precision machining business.