FS KKR Capital (FSK) Q3 2025 earnings summary

Executive summary

• Net investment income for Q3 2025 was $159 million ($0.57 per share), down from $173 million ($0.62 per share) in Q2 2025, but in line with guidance; net asset value per share increased to $21.99 from $21.93 sequentially.

• A fourth quarter distribution of $0.70 per share was declared, with a base of $0.64 and a supplemental of $0.06 per share; a new 2026 distribution strategy targets a base of $0.45 per share plus variable supplemental amounts, aiming for a 10% yield on NAV.

• New investment fundings totaled approximately $1.1 billion, with net investment activity of $109 million, including $450 million in sales to a joint venture.

• M&A activity and deal evaluations increased 30% year-over-year, with a robust investment pipeline.

Financial highlights

• Total investment income for Q3 was $373 million, down from $398 million in Q2 and $441 million year-over-year.

• Adjusted net investment income was $159 million ($0.57 per share), compared to $168 million ($0.60 per share) in Q2 2025.

• Net expenses decreased to $210 million from $225 million sequentially, mainly due to lower interest expense.

• Net increase in net assets from operations was $214 million ($0.76 per share), rebounding from a loss of $209 million in Q2 2025.

Outlook and guidance

• For Q1 2026, total distribution is expected to be about $0.55 per share, with a base of $0.45 and a variable supplemental amount, targeting an annualized yield of about 10% on NAV.

• Q4 2025 GAAP net investment income is expected to be $0.51 per share, with adjusted NII at $0.56 per share.

• The company aims to pay out 100% of GAAP net investment income annually, with possible one-time distributions if spillover income remains.

• The amendment to the Callowhill Street Funding LLC agreement supports ongoing credit facility management and operational flexibility.