- NAV Growth NAV increased 10.2% YoY to $413 million and 0.7% QoQ to $410.5 million.
- Net Interest Income NII rose $0.03/share to $0.61/share (13.5% ROE), with adjusted NII up 7.8% QoQ to $9.8 million.
- Dividend Yield $0.75/share annualized dividend represents 12.9% yield at $23.19 stock price as of Jan 6, 2026.
- Portfolio Health Non-accrual rate at 0.4% of cost (8x below industry average of 3.2%), 84% in first lien debt, and fair value 2.1% above cost.
Financial Performance and Portfolio Health
The company's net asset value (NAV) was $413 million, up 10.2% from $375 million last year and up 0.7% from $410.5 million last quarter. The non-accrual rate of 0.4% of cost is 8x lower than the industry average of 3.2%, reflecting strong underwriting in growing portfolio companies. The weighted average interest rate on the core BDC portfolio was 10.6%, down from 11.8% last year and 11.3% last quarter.
Dividend and Valuation
A monthly base dividend of $0.25 per share or $0.75 per share in aggregate for the fourth quarter of fiscal 2026 was announced, representing a 12.9% yield based on the stock price of $23.19 as of January 6, 2026. The dividend yield is attractive, and with a P/E Ratio of 15.04 and a Dividend Yield of 15.21%, the company's valuation appears reasonable. The company's available liquidity allows it to grow assets by an additional 39% without external financing.
Outlook and Opportunities
The company's executives expressed optimism about the future, citing a strong pipeline with $72.1 million in originations in the quarter and $89.3 million in new originations subsequent to quarter end. The team remains focused on deploying capital into strong business models with sustainable enterprise values. As the management team has invested $2.4 billion in 125 portfolio companies with only 3 realized economic losses, their track record is impressive.
Market Conditions and Competition
The company's executives acknowledged the impact of AI on lending and are cautious about investing in industries vulnerable to AI. They also noted increased competition but are well-equipped to capitalize on opportunities. With interest rates decreasing, spreads may widen, but the company's expertise in SaaS lending and growing relationships outside of this space position it for success.