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
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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
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Maintained at $0.75 for the previous quarter
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Return on Equity (ROE):
- Last twelve months (LTM): 9.1%, up from 5.8% year-over-year
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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% |
