Gladstone Capital Reports Q1 2025 Financial Results with Increased Net Investment Income

Gladstone Capital Corporation reported its financial results for the quarter ending March 31, 2025, revealing a net investment income of $11.2 million, or $0.50 per share, compared to $10.8 million, or $0.49 per share, for the same period in 2024. Total investment income decreased by 10.1% to $21.6 million, primarily due to a decline in interest income, which fell to $21.3 million from $23.7 million year-over-year. The weighted average yield on interest-bearing investments decreased to 12.6% from 14.0%, reflecting lower interest rates. The company’s net assets increased to $478.1 million from $430.8 million as of March 31, 2024, with a net asset value per share of $21.41, up from $21.18.

In terms of operational changes, Gladstone Capital's investment portfolio saw significant activity, with total investments at fair value amounting to $762.6 million as of March 31, 2025, down from $796.3 million at the end of the previous fiscal year. The company made new investments totaling $145.4 million in eight new portfolio companies and extended $51.8 million to existing companies during the six months ended March 31, 2025. Notably, the company exited six portfolio companies, generating $246.6 million in net proceeds and principal repayments.

The company’s liabilities decreased significantly, with total liabilities at $287.0 million as of March 31, 2025, compared to $333.7 million at the end of the previous fiscal year. This reduction was largely due to a decrease in the line of credit, which fell to $25.1 million from $70.6 million. The company also reported a net realized gain on investments of $65.4 million for the six months ended March 31, 2025, compared to a mere $0.5 million in the same period last year, indicating a strong performance in asset disposals.

Looking ahead, Gladstone Capital remains focused on its investment strategy targeting lower middle-market companies, with a portfolio that is approximately 91.2% comprised of debt investments. The company has a total commitment amount of $293.7 million under its revolving credit facility, which is set to expire in October 2025. The management expressed confidence in maintaining compliance with regulatory requirements and achieving its investment objectives, despite the challenges posed by fluctuating market conditions and interest rates. The company plans to continue its strategy of making distributions to stockholders, having declared a monthly distribution of $0.165 per share for the upcoming months.