Saratoga Investment Corp. (SAR) Q2 2026 Financial Results Summary

2025-10-07 · Stocks · QuoteReporter

Saratoga Investment Corp. (SAR) Q2 2026 Financial Results Summary

Released on October 7, 2025, Saratoga Investment Corp. (NYSE: SAR) announced its financial results for its fiscal second quarter ended August 31, 2025. Below is a summary of the key financial metrics and updates from the report:

Summary Financial Information

Assets Under Management (AUM):
$995.3 million as of August 31, 2025
Decrease of 4.4% from $1.04 billion year-over-year
Increase of 2.8% from $968.3 million in the previous quarter
Net Asset Value (NAV):
$410.5 million as of August 31, 2025
Increase of $38.4 million or 10.3% from $372.1 million year-over-year
Increase of $14.1 million or 3.6% from $396.4 million in the prior quarter
NAV per share:
$25.61 as of August 31, 2025
Decrease of 5.4% from $27.07 year-over-year
Increase of $0.09 from $25.52 in the previous quarter
Total Investment Income:
$30.6 million for the three months ended August 31, 2025
Decrease of 28.8% from $43.0 million year-over-year
Decrease of 5.2% from $32.3 million in the last quarter
Net Investment Income (NII) per share:
$0.58, a 50.1% decrease from $1.33 year-over-year
Decrease of 12.1% from $0.66 in the previous quarter
Adjusted NII per share:
$0.58, consistent with NII per share
Earnings per share (EPS):
$0.84, down 13.4% from $0.97 year-over-year
Decrease of 7.7% from $0.91 in the prior quarter
Dividends per share (declared):
$0.75, up 1.4% from $0.74 for the same period last year
Maintained at $0.75 for the previous quarter
Return on Equity (ROE):
Last twelve months (LTM): 9.1%, up from 5.8% year-over-year
Annualized for the quarter: 13.8%, down from 14.4% year-over-year
Originations:
$52.2 million in new investments
Increase from $50.1 million in the prior quarter
Significant compared to $2.6 million year-over-year
Repayments:
$29.8 million, down from $64.3 million in the previous quarter
Increased from $60.1 million year-over-year

Investment Activity Insights

One investment, Zollege, returned to accrual status, leaving just one (Pepper Palace) on non-accrual status.
Non-accrual investments represent only 0.2% of the portfolio at fair value and 0.3% at cost.

Financial Position and Cash Resources

Cash Position:
Decreased to $200.8 million from $224.3 million in the previous quarter.
Share Repurchase Plan:
Purchased 1,035,203 shares at an average price of $22.05 totaling $22.8 million, with no new shares purchased during the current quarter.
Upcoming Dividends:
A base dividend of $0.75 per share for Q3 2026 was announced, with three monthly payments of $0.25.

Portfolio Composition

The portfolio’s fair value remains robust at $995.3 million, driven by diverse holdings in first lien debt (84.3% of the portfolio).
The company aims to maintain high-quality investments, positioning itself to manage future macroeconomic uncertainties.

Conclusion

Saratoga Investment Corp. continues to navigate through a volatile macroeconomic landscape while maintaining a stable dividend and robust investment strategy. The company indicates a commitment to delivering strong risk-adjusted returns to shareholders. The management maintains an optimistic outlook for future investments and market performance.

Consolidated Statements of Operations

($ in thousands)

For the three months ended	August 31, 2025	August 31, 2024
INVESTMENT INCOME
Interest from investments
Interest income:
Non-control/Non-affiliate investments	$ 23,697,449	$ 35,721,214
Affiliate investments	684,587	491,015
Control investments	1,191,555	1,247,256
Payment in kind interest income:
Non-control/Non-affiliate investments	121,084	1,654,044
Affiliate investments	604,880	250,346
Control investments	77,880	1,277
Total interest from investments	26,377,435	39,365,152
Interest from cash and cash equivalents	2,360,397	1,671,031
Management fee income	663,632	792,323
Dividend income:
Non-control/Non-affiliate investments	127,689	162,779
Control investments	903,439	915,590
Total dividend from investments	1,031,128	1,078,369
Structuring and advisory fee income	221,600	35,000
Other income	(28,436)	61,500
Total investment income	30,625,756	43,003,375
OPERATING EXPENSES
Interest and debt financing expenses	12,372,030	13,128,941
Base management fees	4,374,324	4,766,445
Incentive management fees expense	2,271,173	4,550,270
(benefit)
Professional fees	649,899	125,886
Administrator expenses	1,283,333	1,133,333
Insurance	74,310	77,597
Directors fees and expenses	118,500	80,000
General and administrative	412,769	821,584
Income tax expense (benefit)	(11,315)	121,921
Total operating expenses	21,545,023	24,805,977
NET INVESTMENT INCOME	9,080,733	18,197,398
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) from investments:
Non-control/Non-affiliate investments	52,691	558,701
Control investments	–	(34,007,428)
Net realized gain (loss) from investments	52,691	(33,448,727)
Net change in unrealized appreciation (depreciation) on investments:
Non-control/Non-affiliate investments	478,796	32,524,852
Affiliate investments	139,577	353,445
Control investments	3,109,340	(4,150,142)
Net change in unrealized appreciation	3,727,713	28,728,155
(depreciation) on investments
Net change in provision for deferred taxes on unrealized (appreciation)	423,998	(159,187)
depreciation on investments
Net realized and unrealized gain (loss) on investments	4,204,402	(4,879,759)
NET INCREASE (DECREASE) IN NET ASSETS	$ 13,285,135	$ 13,317,639
RESULTING FROM OPERATIONS
WEIGHTED AVERAGE – BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE	$ 0.84	$ 0.97
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – BASIC AND DILUTED	15,775,387	13,726,142

Consolidated Statements of Assets and Liabilities

($ in thousands)

August 31, 2025	February 28, 2025
ASSETS
Investments at fair value
Non-control/Non-affiliate investments (amortized cost of $886,285,227 and $886,071,934, respectively)	$ 898,724,347	$ 897,660,110
Affiliate investments (amortized cost of $50,318,387 and $38,203,811, respectively)	52,755,641	40,547,432
Control investments (amortized cost of $76,035,288 and $75,817,587, respectively)	43,815,022	39,870,208
Total investments at fair value (amortized cost of $1,012,638,902 and $1,000,093,332, respectively)	995,295,010	978,077,750
Cash and cash equivalents	105,660,178	148,218,491
Cash and cash equivalents, reserve accounts	95,144,529	56,505,433
Interest receivable (net of reserve of $244,970 and $210,319, respectively)	8,617,063	7,477,468
Management fee receivable	278,769	314,193
Other assets	1,215,885	950,522
Total assets	$ 1,206,211,434	$ 1,191,543,857
LIABILITIES
Revolving credit facilities	$ 70,000,000	$ 52,500,000
Deferred debt financing costs, revolving credit facilities	(833,266)	(1,254,516)
SBA debentures payable	170,000,000	170,000,000
Deferred debt financing costs, SBA debentures payable	(3,621,941)	(4,041,026)
8.75% Notes Payable 2025	–	20,000,000
Discount on 8.75% notes payable 2025	–	(9,055)
Deferred debt financing costs, 8.75% notes payable 2025	–	(374)
…	…	…
Total liabilities	795,711,866	798,878,389
NET ASSETS
Common stock, par value $0.001, 100,000,000 common shares authorized, 16,027,312 and 15,183,078 common shares issued and outstanding, respectively	16,027	15,183
Capital in excess of par value	434,306,847	412,913,597
Total distributable deficit	(23,823,306)	(20,263,312)
Total net assets	410,499,568	392,665,468
Total liabilities and net assets	$ 1,206,211,434	$ 1,191,543,857
NET ASSET VALUE PER SHARE	$ 25.61	$ 25.86
Asset Coverage Ratio	166.6%	162.9%