Saratoga Investment (SAR) Q2 2027 Earnings
Includes $16.5 million of net unrealized depreciation on investments, primarily $13.1 million of markdowns in Madison Logic, Exigo and Chronus, and $2.1 million of realized gains from Gen4 and Modis Dental equity conversions
How Did SAR Stock React to Q2 2027 Earnings?
Did SAR Beat Earnings? Q2 2027 Results
No. Saratoga Investment reported Q2 2027 earnings of $-0.41 a share on Oct 6, 2026, missing the $0.49 consensus estimate by 183.7%. Revenue was $31.2M against a $31.5M estimate.
Saratoga Investment Corp. posted a difficult fiscal second quarter of 2027, with GAAP EPS of negative $0.41 per share as $16.5 million in net unrealized depreciation, concentrated in markdowns of Madison Logic, Exigo, and Chronus totaling $13.1 million, weighed heavily on reported results alongside higher interest expense from the company's balance sheet refinancing. Revenue rose modestly to $31.17 million from $30.78 million last quarter and $30.63 million a year ago, reflecting steady origination activity, with $76.10 million in new commitments driving AUM 2.1% higher sequentially to $1.15 billion. NAV per share slipped 4.6% to $22.15, though management emphasized the decline was credit-specific rather than a sign of broad portfolio stress, with 96.0% of holdings rated in the highest internal category. Looking ahead, the SBA's expansion of SBIC III's individual leverage limit to $250 million unlocks an additional $75 million in long-term capital, while the post-quarter sale of both remaining non-accrual positions removes a lingering overhang as the company continues its $0.25 monthly dividend.
- AUM growth of 2.1% sequentially to $1.150 billion driven by $37.1 million of net originations
- Full-quarter impact of Q1 originations and partial-quarter impact of Q2 originations increasing investment income
- Higher interest expense from balance sheet refinancing including overlap of 8.00% 2031 Notes and 6.00% 2027 Notes
- Company-specific markdowns in Madison Logic, Exigo and Chronus totaling $13.1 million
- Zollege investment appreciation of $4.5 million partially offsetting portfolio declines
- Weighted average interest rate on core BDC portfolio of 10.6%, up from 10.5% prior quarter
- Spreads on originations 220 basis points lower than the repayments they replaced
“Our second-quarter results demonstrate the resilience of our platform despite the continued pressure affecting private credit markets. We grew assets under management by 2.1% to $1.150 billion, generating $37.1 million of net originations, while adjusted NII remained relatively stable at $0.46 per share including the cost of our recently refinanced capital structure.”
Saratoga Investment CEO, on the earnings call
What Is Saratoga Investment's Outlook?
Management characterized the operating environment as uneven, citing geopolitical uncertainty, persistent inflation, interest rate volatility, and AI-related disruption concerns in the software sector. These conditions have contributed to higher default activity and declining NAVs industry-wide. However, management noted that strong BDC debt issuance, firmer values for higher-quality loans, and improving M&A activity suggest a market that is stabilizing and increasingly differentiating among managers. The company remains focused on disciplined, senior secured, first-lien underwriting and expects its well-structured balance sheet to navigate the uncertain environment. Recent SOFR base rate increases are expected to benefit future interest income. The SBA's increase of the SBIC III individual leverage limit to $250 million provides an additional $75 million of long-term capital. Post-quarter-end, both remaining non-accrual investments were sold, eliminating all non-accrual positions.
SAR YoY Financials
When Does Saratoga Investment Report Next?
Figures from SEC filings and company reports. Not investment advice.