Saratoga Investment Corp
Q2 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: −0.32%.
Did SAR Beat Earnings? Q2 2026 Results
Saratoga Investment Corp. fell short of Wall Street expectations in its fiscal second quarter, posting adjusted net investment income of $0.58 per share against analyst estimates of $0.65 and revenue of $30.63 million versus a consensus of $32.15 million, with shares sliding roughly 6% over the past three months in response to the earnings pressure. The primary culprit was a 28.8% year-over-year decline in total investment income, driven largely by the non-recurrence of $7.90 million in Knowland-related interest income recognized in the prior-year quarter, compounded by lower SOFR base rates and reduced AUM from outsized portfolio repayments. Yet the headline GAAP EPS of $0.84 told a more nuanced story, reflecting unrealized appreciation and realized gains that lifted NAV per share to $25.61 from $25.52 sequentially. Credit quality remained a relative bright spot, with 99.7% of credits in the top internal rating category and non-accruals at just 0.2% of fair value. Looking ahead, the company cited $52.30 million in post-quarter originations and $406.80 million in undrawn borrowing capacity as evidence that deployment momentum is building, while the board held its base quarterly dividend steady at $0.75 per share.
- Net originations of $22.4 million during the quarter
- Zollege investment returned to accrual status, reducing non-accrual to one investment at 0.2% of portfolio fair value
- Core non-CLO portfolio marked up by $3.9 million
- Quarterly annualized ROE of 13.8%, beating BDC industry average of 7.3%
- NAV per share increased from $25.52 to $25.61 sequentially
- 84.3% of portfolio in first lien term loans
- 99.7% of credits rated in highest internal category
“This quarter's highlights include continued NAV and NAV per share growth from the previous quarter and year, a strong return on equity beating the industry, net originations of $22.4 million, and importantly, continued solid performance from the core BDC portfolio in a volatile macro environment, including the return of our Zollege investment to accrual status reducing our non-accrual investments to just one, representing only 0.2% of portfolio fair value.”
Saratoga Investment CEO, on the earnings call
Forward Guidance & Outlook
Saratoga Investment noted that post quarter-end, it has closed or has in closing approximately $52.3 million of new originations in three new portfolio companies and two follow-ons, with two repayments of $12.8 million, resulting in an anticipated net increase in investments of approximately $39.5 million. The company declared a base quarterly dividend of $0.75 per share for fiscal Q3 2026. Management indicated the company continues to remain prudent and discerning in terms of new commitments in the current volatile environment, while noting that its pipeline remains strong and post-quarter activity is improving run rate earnings. The company has $406.8 million in total undrawn borrowing capacity to deploy.
SAR YoY Financials
Figures from SEC filings and company reports. Not investment advice.