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Mar 31
Capital Southwest Q4 2025 Earnings Report
Capital Southwest reported solid net investment income in Q4 2025, supported by strong portfolio activity and a stable yield on debt investments.
Key Takeaways
Capital Southwest generated $28,500,000 in pre-tax net investment income for Q4 2025, with adjusted NII reaching $31,300,000 after excluding one-time expenses. The company saw continued origination strength and maintained a healthy NAV per share of $16.70, despite experiencing net depreciation across its credit portfolio.
Pre-tax net investment income was $28,500,000 or $0.56 per share.
Adjusted pre-tax net investment income was $31,300,000 or $0.61 per share.
NAV per share increased to $16.70 as of March 31, 2025.
Weighted average yield on debt investments remained stable at 11.7%.
Capital Southwest
Capital Southwest
Capital Southwest Revenue by Segment
Revenue by Segment
Non-control/Non-affiliate Revenue
CapyFin.comAffiliate Investments Revenue
CapyFin.com Forward Guidance
Capital Southwest expects continued income generation from its portfolio and intends to maintain both regular and supplemental dividends, backed by its strong UTI balance and unrealized equity gains.
Positive Outlook
- Strong originations of $150 million in new commitments.
- Equity ATM program raised $68.6 million in new equity.
- Access to $175 million additional SBA leverage through new SBIC license.
- Stable dividend payout with continued supplemental dividends planned.
- Robust yield from largely 1st lien senior secured credit portfolio.
Challenges Ahead
- Net depreciation of $25.7 million in the credit portfolio during the quarter.
- One-time $2.8 million executive transition expense impacted results.
- Slight increase in interest expense due to higher average debt.
- NAV growth tempered by realized and unrealized losses.
- Equity valuation still subject to broader market conditions and fair value marks.