Stellus Capital Investment (SCM) Q3 2025 earnings summary

Executive summary

• Investment portfolio reached $1.01 billion at fair value across 115 companies as of September 30, 2025, with a diversified mix by size, industry, and geography, and 89% in first lien debt.

• Net investment income per share was $0.32 for Q3 2025, with core net investment income at $0.34 per share and net realized income at $0.42 per share.

• Net asset value per share was $13.05 at September 30, 2025, down from $13.46 at December 31, 2024, reflecting dividend payments and net unrealized losses.

• Cumulative dividends declared since IPO total $18.15 per share, with a current annualized dividend yield of 13.4%.

• Five portfolio companies were on non-accrual status, representing 6.7% of the loan portfolio at cost and 3.7% at fair value.

Financial highlights

• Total investment income for Q3 2025 was $26.3 million, with net investment income of $9.1 million and net increase in net assets from operations of $6.7 million.

• $54 million invested in new activity during Q3 2025, with $29.8 million in repayments and $2.8 million in equity realizations.

• Weighted average yield on debt investments was 10.0% as of September 30, 2025.

• Operating expenses (net of fee waivers) were $48.4 million for the nine months ended September 30, 2025.

• Distributions declared for the nine months were $1.20 per share.

Outlook and guidance

• Regular monthly dividends of $0.1333 per share declared for October, November, and December 2025, with a $0.40 per share dividend declared for Q4.

• Portfolio expected to remain above $1 billion at year-end despite anticipated payoffs.

• Projected $5 million in equity realizations for both Q4 2025 and Q1 2026, with expected gains of $3.8 million and $3.3 million, respectively.

• Management remains focused on first lien, senior secured debt and sponsor-backed transactions in lower middle-market companies.