Saratoga Investment (SAR) investor relations material

Executive summary

• AUM grew 13.4% year-over-year to $1.109 billion, with NAV up 0.9% to $396.2 million and strong net positive originations supporting five new platforms and long-term growth despite macro volatility.

• Annual ROE reached 9.1%, more than double the BDC industry average of 4.3%.

• Maintained robust credit quality with only 0.2% of fair value and 1.2% of cost on non-accrual, well below industry averages.

• Announced a monthly base dividend of $0.25 per share for Q1 FY27, annualized at a 12.6% yield, with total FY26 distributions of $3.74 per share including a special dividend.

• Continued to expand the team, including new C-suite hires and Managing Directors, to support growth and performance.

Financial highlights

• Adjusted net investment income (NII) for FY26 was $37.5 million, down 29.2% year-over-year; Q4 adjusted NII was $8.5 million, up 6.2% year-over-year but down 12.8% sequentially.

• Adjusted NII per share for Q4 was $0.53, or $0.61 excluding a $1.7 million excise tax; FY26 adjusted NII per share was $2.37, down 37.8%.

• NAV per share at year-end was $24.42, down from $25.86 last year, reflecting excess distributions over NII.

• Portfolio marked down 1% ($9.6 million) in Q4, with net depreciation in both core and CLO/JV segments.

• Weighted average current yield on the portfolio was 9.6% at year-end, down from 11.5% last year.

Outlook and guidance

• Management expects continued pressure on yields due to tight spreads and lower base rates but aims to offset this through asset base growth and disciplined underwriting.

• Portfolio mix is shifting away from software as fewer SaaS deals meet strict underwriting standards; focus is increasing on sectors like education and healthcare.

• Significant available liquidity ($210.8 million) and SBIC III debentures support further portfolio growth without external financing.

• Management remains cautious amid macroeconomic volatility, focusing on disciplined investment and robust deal flow.