Stellus Capital Investment (SCM) Q1 2026 earnings summary

Executive summary

• Net investment income for Q1 2026 was $7.5 million ($0.26 per share), with core net investment income at $0.27 per share and net realized income at $0.29 per share.

• Portfolio at fair value was $990 million across 116 companies, with 90% in first lien debt and 9% in equity investments.

• Net asset value per share was $12.54 at March 31, 2026, down from $12.82 at year-end 2025, reflecting dividend payments exceeding earnings and net realized/unrealized losses.

• Distributions declared for Q1 2026 totaled $0.34 per share, with regular monthly dividends declared for Q2 2026.

• Realized gains of $0.8 million were recorded, with total realized income of $0.29 per share.

Financial highlights

• Total investment income for Q1 2026 was $23.3 million, primarily from interest on portfolio investments.

• Operating expenses (net of fee waivers) were $15.8 million, with management fees at $4.4 million and borrowing-related fees at $8.9 million.

• Invested $18 million in 3 new companies and had $9 million in other investment activity at par in Q1 2026; funded $28 million in new investments and received $42 million in repayments.

• Net change in unrealized depreciation was $(6.5) million, compared to $1.2 million appreciation in Q1 2025.

• Net increase in net assets from operations was $1.7 million ($0.06 per share), down from $5.0 million ($0.18 per share) in the prior year period.

Outlook and guidance

• Portfolio expected to remain around $970 million for Q2 2026, with repayments matching new fundings.

• Estimated $9 million in realizations for the remainder of 2026, with $6 million in realized gains.

• Regular monthly dividends of $0.1133 per share declared for April, May, and June 2026.

• Dividend expected to align with net investment income plus realized gains, likely at a lower level than current dividend.

• Management continues to observe macroeconomic uncertainty due to labor shortages, inflation, fluctuating rates, and geopolitical instability.