Great Elm Capital (GECC) Q2 2025 earnings summary

Executive summary

• Achieved record total investment income of $14.3 million for Q2 2025, with over 90% in cash income, marking the highest in company history and driving NAV per share to $12.10 as of June 30, 2025.

• Net investment income rose to $5.9 million ($0.51/share), up from $4.6 million ($0.40/share) in Q1 2025, with NII exceeding the quarterly distribution by 38%.

• NAV growth was driven by unrealized gains on CoreWeave investment and NII exceeding distributions.

• Board approved a $0.37/share Q3 2025 dividend, a 13.5% annualized yield on market price and 12.2% on NAV.

• Portfolio fair value grew to $403.3 million at June 30, 2025, with increased allocations to short-term and structured finance investments.

Financial highlights

• Total investment income for Q2 2025 was $14.3 million, up from $12.5 million in Q1 2025 and $9.5 million in Q2 2024.

• NII for Q2 2025 was $5.9 million ($0.51/share), compared to $4.6 million ($0.40/share) in Q1 2025.

• EPS for Q2 2025 was $1.02, up from $0.04 in Q1 2025.

• Net realized and unrealized gains per share were $0.51 in Q2 2025, compared to a loss of $0.36 in Q1 2025.

• Asset coverage ratio improved to 169.5% at June 30, 2025, from 163.8% at March 31, 2025.

Outlook and guidance

• Management expects Q3 2025 NII to decrease due to uneven CLO JV cash flows but anticipates a significant rebound in Q4 and full-year NII to exceed distributions.

• Targeting 17-20% annualized returns from CLO equity investments over time.

• Liquidity is sufficient to meet obligations for at least the next 12 months and beyond.