Loading...
01/11 03:36
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary reveals mixed signals: while NAV and cash available have increased, adjusted NII and NAV per share have declined significantly. The Q&A session highlights management's inability to provide specifics on pipeline strength and their cautious approach to debt management. The decline in ROE and adjusted NII, coupled with management's vague responses, suggest a lack of confidence in short-term growth. Despite a strong total return, the overall sentiment leans negative, as the market may react unfavorably to declining financial metrics and unclear future guidance.
Quarterly Dividend $0.74 per share declared and distributed for Q4 2025, reflecting a 1% increase over the past year and a 7% increase over the past two years.
Adjusted NII $0.56 per share, down 35.4% from $0.94 last year and down 37.8% from $0.90 last quarter, primarily due to a $2.4 million annual excise tax expense and lower total investment income from decreased interest rates and AUM.
Adjusted NII Yield 8.4% this quarter, down from 14% last year and from 13.3% last quarter, reflecting lower base interest rates.
NAV $329.7 million, up 6.1% from $370.2 million last year and up 4.7% from $374.9 million last quarter, due to ATM sales of 1.2 million shares at NAV for net proceeds of $32.4 million.
NAV per Share $25.86, down from $27.12 last year and down from $26.95 last quarter, primarily due to special dividends and write-downs.
Total Portfolio Value $978 million, with a fair value now 2.2% below cost, reflecting markdowns in four portfolio companies.
Realized Gains $7.2 million from three equity realizations this quarter, continuing a history of healthy realized gains.
Cash Available $205 million at year-end, available for investments or debt repayment.
Return on Equity (ROE) 7.5%, up from 2.5% last year but down from 9.2% last quarter, slightly below the industry average of 8.9%.
Weighted Average Interest Rate on Core BDC Portfolio 11.5%, down from 12.6% last year and 11.8% last quarter, reflecting decreases in SOFR base rates.
Total Expenses (excluding interest and debt financing expenses) $1.4 million, down from $1.9 million last year and down from $2.8 million last quarter.
Investment Capacity $428 million, including $136 million from SBIC III license, $87.5 million from revolving credit facilities, and $205 million in cash.
Total Return for Last 12 Months 26%, outperforming the BDC index's 13% for the same period.
New Portfolio Companies: One new portfolio company originated in the quarter and two new companies since quarter end.
Dividend Structure Change: Transition to a monthly dividend structure, increasing quarterly base dividend by $0.01 per share to $0.25 per share per month.
Market Positioning: Saratoga continues to be favorably situated for potential future economic opportunities as well as challenges.
M&A Activity: Early stages of a potential increase in M&A in the lower middle market reflected in multiple equity realizations in Q4.
Cash Available for Investments: $205 million of cash available at year-end to be deployed accretively in investments or to repay existing debt.
Portfolio Performance: Core non-CLO portfolio marked down by $3.4 million this quarter, but overall financial performance remains steady.
Business Development Initiatives: Expanding business development efforts to build relationships in the lower middle market.
Investment Strategy: Focus on high-quality assets and maintaining high underwriting standards despite market challenges.
Regulatory Issues: Challenges posed by current tariff discussions could impact portfolio companies, although most are in sectors less affected by tariffs.
Economic Factors: Volatility in the broader macro environment has affected deal volumes and investment activity, with elevated interest rates making debt financing more expensive.
Supply Chain Challenges: The impact of tariffs and economic uncertainty has created challenges in sourcing quality new investments and maintaining deal flow.
Competitive Pressures: Historically low M&A volumes and an abundant supply of capital are causing spreads to tighten, making it difficult to find quality new platform investments.
Portfolio Performance: Significant challenges were encountered in four portfolio companies, requiring decisive actions such as sales and restructurings.
Credit Quality: Despite a steady credit quality rating, two investments remain on non-accrual status, indicating potential risks in the portfolio.
Investment Strategy: The management team emphasizes a disciplined approach to investment decisions amidst a challenging asset deployment climate.
Dividend Structure: Transition to a monthly dividend structure, increasing quarterly base dividend by $0.01 per share to $0.25 per month, totaling $0.75 for Q1 FY 2026.
Investment Strategy: Focus on high-quality assets, maintaining strict underwriting standards, and expanding business development efforts to enhance deal flow.
Portfolio Management: Active management of existing portfolio companies, with a focus on supporting growth and addressing challenges in a few credits.
Market Positioning: Positioned to capitalize on potential economic opportunities and challenges, with a strong balance sheet and liquidity.
Asset Deployment: Continued deployment of capital into existing portfolio companies and new investments, with $428 million of investment capacity available.
Future Revenue Expectations: Expect to steadily increase portfolio size, quality, and investment performance over the long term.
Financial Projections: Total return for the last 12 months was 26%, outperforming BDC indexes, with a long-term return on equity at 1.5 times the industry average.
NAV Growth: NAV per share has increased over the long term, with a focus on maintaining growth despite recent challenges.
Investment Capacity: $428 million available for investment, allowing for significant growth without external financing.
Dividend Growth: Board to evaluate dividend levels quarterly, considering economic factors and earnings impact.
Quarterly Dividend: $0.74 per share declared and distributed for the fiscal fourth quarter.
Monthly Dividend Structure: Transition to a monthly dividend structure, increasing the quarterly base dividend by $0.01 per share to $0.25 per share per month, totaling $0.75 per share for the first quarter of fiscal 2026.
Dividend Yield: Annualized first quarter dividend of $0.75 per share implies a 12.1% dividend yield based on the stock price of $24.86 on May 6, 2025.
Share Repurchase Program: None
The earnings call summary shows a mixed but generally positive outlook: strong ROE, portfolio performance, and cash position, despite some declines in NII and yields. The Q&A suggests optimism about M&A activity and capital deployment, though management was vague on some risks. The dividend guidance and pipeline strength are positive indicators. Given these factors, and assuming a moderate market cap, a positive stock price movement of 2% to 8% is likely in the next two weeks.
The company has a strong dividend plan with an 11.8% yield, significant cash reserves, and prudent capital deployment strategies. They are expanding business development to increase deal flow and maintain disciplined asset selection. Portfolio growth is supported by strong underwriting standards. Investment in CLO debt securities offers enhanced yields. Management is confident in navigating economic challenges and maintaining dividends. The Q&A revealed positive sentiment with management addressing concerns about competition, CLO investments, and dividend sustainability. Overall, the company's strategic initiatives and financial health suggest a positive outlook for stock price movement.
The earnings call presents mixed signals: financial performance shows both positive (NAV growth, increased ROE) and negative aspects (decline in NII per share). The Q&A highlights cautious optimism but lacks clarity on future growth and M&A activity. The dividend increase is a positive, but unclear management responses and unpredictable market conditions suggest limited short-term stock movement. Overall, the sentiment is neutral, with no strong catalysts for significant price change.
The earnings call summary reveals mixed signals: while NAV and cash available have increased, adjusted NII and NAV per share have declined significantly. The Q&A session highlights management's inability to provide specifics on pipeline strength and their cautious approach to debt management. The decline in ROE and adjusted NII, coupled with management's vague responses, suggest a lack of confidence in short-term growth. Despite a strong total return, the overall sentiment leans negative, as the market may react unfavorably to declining financial metrics and unclear future guidance.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
