Saratoga Investment Earnings Call Transcripts
Fiscal Year 2027
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Adjusted NII was $0.46 per share, with record $1.15B AUM and $37.1M net originations. Credit markdowns reduced NAV, while refinancing and post-quarter asset sales addressed near-term debt maturities and non-accruals.
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Net positive originations and AUM growth offset portfolio markdowns, with credit quality remaining strong and non-accruals well below industry averages. Management expects improving spreads and robust deal flow to help close the NII-dividend gap over the next several quarters.
Fiscal Year 2026
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Strong originations and disciplined underwriting drove AUM growth and robust credit quality, with only 1.2% of assets on non-accrual and a 9.1% ROE, more than double the industry average. Liquidity and capital strength support continued portfolio expansion.
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NAV grew 10.2% year-over-year to $413 million, with adjusted NII per share up sequentially but down year-over-year due to lower rates and repayments. Portfolio quality remains strong, with only one non-accrual, and management is cautiously deploying significant available capital amid a competitive and volatile market.
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NAV and portfolio value increased sequentially and year-over-year, while adjusted NII and yields declined due to lower rates and repayments. Credit quality remains strong with minimal non-accruals, and significant liquidity is available for future investments. Dividend is maintained, with management focused on long-term growth and disciplined underwriting.
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Adjusted NII per share rose 17.9% sequentially, with NAV and return on equity both increasing and outperforming industry averages. Portfolio quality remains high, liquidity is strong, and management is focused on disciplined growth amid a challenging lower middle market environment.
Fiscal Year 2025
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Q4 saw net positive originations, strong realized gains, and a resilient portfolio despite lower NII and subdued deal flow. Liquidity remains robust, with a transition to monthly dividends and continued focus on disciplined growth and risk management.
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Sequential adjusted NII growth (excluding one-time items), strong portfolio quality, and robust liquidity offset by lower yields and lumpy repayments. Dividend coverage remains solid, with long-term growth expected despite subdued M&A and unpredictable repayments.
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NAV per share increased to $27.07, with strong adjusted NII growth and robust dividend coverage. All watchlist investments were resolved, and liquidity remains high, positioning the company for future growth despite a slow M&A market.
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Adjusted NII per share rose 12% sequentially, with strong dividend coverage and high portfolio quality. No new investments were made, but $39 million in follow-ons supported existing companies. Restructurings of Zollege and Pepper Palace are nearly complete, and liquidity remains robust.