Capital Southwest (CSWC) Q4 2025 earnings summary

Executive summary

• Investment portfolio grew 21% year-over-year to $1.8 billion as of March 31, 2025, with $1.6 billion in credit and $179.4 million in equity investments.

• Q4 pre-tax net investment income was $28.5 million ($0.56/share); adjusted NII was $31.3 million ($0.61/share) excluding $2.8 million in one-time CEO departure costs.

• Paid $0.58 per share regular and $0.06 per share supplemental dividend for Q4; total FY25 dividends were $2.54 per share, with 110% LTM pre-tax NII regular dividend coverage.

• Net asset value (NAV) per share increased to $16.70 at quarter end.

• Received a second SBIC license from the SBA, expanding lending capacity.

Financial highlights

• FY25 total investment income was $204.4 million, up 15% from FY24.

• Raised $181.1 million in gross equity proceeds via ATM program at up to 142% of NAV/share.

• Issued $230 million in 5.125% convertible notes due 2029 and redeemed $140 million in January 2026 notes.

• Regulatory debt-to-equity ratio was 0.89x at quarter end, with $341 million available under credit facilities and $43 million in cash.

• Net realized and unrealized losses on investments were $10.3 million in Q4 and $47.2 million for FY25.

Outlook and guidance

• Board declared a regular dividend of $0.58 and a supplemental dividend of $0.06 per share for Q1 FY26, with intent to continue quarterly supplemental dividends based on UTI and realized gains.

• Management expects continued strong portfolio performance, ongoing equity capital raises, and $125–$150 million in originations for the June quarter.

• Run-rate operating leverage projected to improve to 1.4–1.5% by next fiscal year-end.