Key Highlights

  • Investment income was USD 151.74 million against an estimate of USD 163.14 million and USD 157.62 million a year earlier.
  • Net Investment income was USD 0.15 per share against an estimate of USD 0.10, or USD 76.36 million in total.
  • Net asset value per common share was USD 5.36 at September 30, against USD 5.71 at June 30, 2026.
  • The revolving Credit Facility balance stood at USD 287.15 million, against USD 562.33 million at the prior fiscal year end.

Revenue

Prospect Capital Corporation (NASDAQ:PSEC) reported investment income of USD 151.74 million for the quarter ended September 30, 2026, its fiscal first quarter, against USD 157.62 million a year earlier and an estimate of USD 163.14 million. Interest income was USD 132.61 million against USD 152.39 million, Dividend income was USD 5.48 million against USD 3.57 million, and other income was USD 13.66 million against USD 1.66 million.

The annualized current Yield on performing interest bearing investments, excluding Equity and non-accrual loans, was 11.3% at September 30, against 11.8% at June 30.

Net Investment Income and Net Assets

Total operating expenses were USD 78.63 million, and after a USD 3.25 million reimbursement of administration expenses, net operating expenses were USD 75.38 million against USD 78.27 million. Net investment income was USD 76.36 million, or USD 0.15 per share, against USD 79.35 million, or USD 0.17.

Realized and unrealized results were negative in the quarter. Net realized losses from investments were USD 71.61 million and the net change in unrealized results was a loss of USD 27.03 million, so net Assets from operations decreased by USD 21.56 million. After preferred dividends of USD 26.12 million and other preferred stock items, the net decrease applicable to common stockholders was USD 53.45 million, against an increase of USD 48.09 million a year earlier.

Net asset value per common share fell to USD 5.36 from USD 5.71, and net assets applicable to common stockholders were USD 2.88 billion. Management attributed the decline mainly to the realized and unrealized losses and to dilution of USD 0.15 per share from shares issued through Dividend reinvestment and preferred conversions. Distributions to common and preferred holders of USD 81.38 million, or USD 0.16 per share, were stated alongside net investment income of USD 0.15 per share.

Cash, Debt and the Portfolio

Investments at Fair Value were USD 5.94 billion across 85 portfolio companies, against USD 6.34 billion at June 30. Gross originations in the quarter were USD 90.48 million. The cost basis of loans on non-accrual status was USD 107.35 million, with a fair value of USD 9.35 million, against USD 298.23 million of cost and USD 42.53 million of fair value at June 30.

Operating activities provided USD 381.68 million of cash, and financing activities used USD 387.19 million. The company borrowed USD 412.95 million and repaid USD 688.13 million on the revolving credit facility during the quarter. It also repurchased USD 33.95 million of its 3.437% 2028 Notes at a weighted average price of 93.92% and USD 9.92 million of its 5.50% 2030 Notes at 93.96%. The asset coverage ratio on senior securities representing indebtedness stood at 387.7%, against 339.4% at June 30.

On the equity side, 20,466,000 common shares were issued on preferred stock conversions, and shareholders authorized sales of common stock below net asset value over a 12-month period from July 7, subject to conditions.

Key Figures Side by Side

Investment income of USD 151.74 million sits alongside net investment income of USD 76.36 million, net asset value of USD 5.36 per common share and a revolver balance of USD 287.15 million. Management also stated a current yield of 11.3% on performing interest bearing investments.

Monthly common distributions of USD 0.035 per share are payable for November, December and January, on December 21, January 20 and February 17. The USD 263.22 million of 3.364% notes are due November 15, 2026.