Prospect Capital (PSEC) Q2 2026 earnings summary

Executive summary

• Net investment income for the quarter was $91 million ($0.19 per share), up 5% year-over-year, with NAV at $3 billion ($6.21 per share) as of December 31, 2025.

• Net assets applicable to common shares decreased to $2.96 billion, with NAV per share declining from $6.56 to $6.21 sequentially.

• Distributions to common shareholders totaled $63.9 million for the quarter, with cumulative distributions since inception reaching $4.7 billion ($21.93 per share).

• Strategic priorities include increasing first lien senior secured loan exposure, reducing second lien and subordinated structured notes, and exiting targeted equity-linked and real estate assets.

• Portfolio rotation continues, focusing on companies with less than $50 million EBITDA and a strong emphasis on middle market lending.

Financial highlights

• Total assets as of December 31, 2025, were $6.53 billion, down from $6.80 billion at June 30, 2025.

• Net investment income for the quarter was $91 million; NAV stood at $3 billion ($6.21 per share).

• Interest income for the 12 months ending December 2025 was 92% of total investment income, indicating a strong recurring revenue profile.

• Non-accruals as a percentage of total assets were 0.7% as of December 2025.

• Investment originations in the December quarter totaled $80.4 million, all in middle market investments, with $79 million in repayments and exits.

Outlook and guidance

• Management expects continued volatility due to macroeconomic uncertainty, elevated interest rates, and geopolitical risks.

• Monthly cash distributions of $0.045 per share have been declared for February, March, and April 2026.

• Management remains focused on prudent leverage, liquidity, and balance sheet strength to capitalize on market opportunities.