Capital Southwest (CSWC) Q2 2025 earnings summary

Executive summary

• Pre-tax net investment income was $30.0 million ($0.64 per share) for Q2 FY2025, fully covering both regular and supplemental dividends.

• Board declared a regular dividend of $0.58 and a supplemental dividend of $0.05 per share for the December quarter, totaling $0.63 per share.

• Investment portfolio at fair value reached $1.5 billion, with 98% of the credit portfolio in first-lien senior secured debt.

• $89.8 million in new commitments and $45.2 million in debt prepayments generated a 14.5% weighted average IRR.

• Net asset value (NAV) per share was $16.59 as of September 30, 2024, with regulatory debt to equity at 0.80x.

Financial highlights

• Total investment income for Q2 2025 was $48.7 million, with 95% recurring and 98% as cash income.

• Net investment income after tax was $31.2 million ($0.66 per share).

• Operating expenses (excluding interest) decreased to $6.1 million, while interest expense rose to $12.6 million.

• Loans on non-accrual represented 3.5% of the investment portfolio at fair value.

• Weighted average yield on the portfolio was 12.9%.

Outlook and guidance

• Net portfolio growth for the December quarter is expected to be significant, with $150–$200 million in net growth anticipated.

• Management expects to continue distributing supplemental dividends based on current UTI and unrealized appreciation.

• Portfolio remains diversified across industries and geographies, with a focus on risk-adjusted returns and maintaining strong dividend coverage.