Gladstone Investment Corporation Reports $38.5M Net Increase in Assets for Quarter Ended December 31, 2024

Gladstone Investment Corporation reported its financial results for the three and nine months ended December 31, 2024, revealing a net increase in net assets resulting from operations of $38.5 million for the quarter, a significant rise from $6.6 million in the same period last year. For the nine-month period, the company recorded a net increase of $47.4 million, down from $62.7 million in the prior year. The net asset value per share decreased to $13.30 from $13.43, reflecting a decline in cumulative net unrealized appreciation of investments, which fell to $50.5 million from $66.2 million.

Total investment income for the quarter decreased by 7.4% to $21.4 million, primarily due to a decline in interest income, which fell to $20.5 million from $21.7 million. The company’s interest income was impacted by a reduction in the weighted-average principal balance of its interest-bearing investment portfolio, which averaged $579.7 million during the quarter, compared to $594.3 million in the previous year. Additionally, success fee income dropped significantly, contributing to the overall decline in investment income.

In terms of operational developments, Gladstone Investment made several strategic investments during the reporting period, including $71.3 million in Nielsen-Kellerman, Inc. and $78.7 million in Ricardo Defense, Inc. The company also exited its investment in Nth Degree Investment Group, resulting in a realized gain of $42.3 million. As of December 31, 2024, the company’s investment portfolio consisted of 26 portfolio companies across 17 industries, with a fair value of $1.1 billion.

The company’s total liabilities increased to $597.7 million from $445.4 million, primarily due to higher borrowings, which rose to $546.6 million from $398.3 million. The increase in borrowings was attributed to the company’s ongoing investment strategy and capital needs. As of the end of the reporting period, Gladstone Investment had a total of 36,837,381 shares of common stock outstanding.

Looking ahead, Gladstone Investment remains focused on its investment strategy of targeting lower middle-market companies in the U.S. The company has expressed confidence in its ability to navigate market conditions and capitalize on new investment opportunities, while also managing its capital structure effectively. The outlook for the upcoming quarters will depend on market conditions, interest rates, and the performance of its portfolio companies.