Gladstone Capital Corp (NASDAQ:GLAD) Tops Q4 Earnings and Revenue Estimates

Gladstone Capital Corporation (NASDAQ:GLAD) has released its financial results for the fourth quarter and fiscal year ended September 30, 2025. The report reveals a performance that exceeded analyst expectations on key profitability metrics, a development that appears to have been met with cautious optimism in the market.

Earnings and Revenue Performance Versus Estimates

The company's core profitability, as measured by net investment income per share, came in stronger than anticipated for the quarter. This key metric, which is closely watched by income-focused investors in business development companies, surpassed the consensus forecast.

• Reported Q4 EPS (NII per share): $0.52
• Estimated Q4 EPS: $0.5129
• Reported Q4 Total Investment Income: $23.94 million
• Estimated Q4 Revenue: $23.03 million

Gladstone Capital outperformed on both the top and bottom lines. The beat on total investment income was particularly notable, coming in approximately $0.9 million above estimates. For the full fiscal year 2025, net investment income was reported at $45.2 million, or $2.02 per share.

Market Reaction and Price Action

Following the earnings release, the market's initial reaction has been positive. The stock has experienced an after-market gain of approximately 2.3%. This upward move suggests that investors are rewarding the company for its stronger-than-expected quarterly results. This positive sentiment stands in contrast to the stock's performance over the past month, which had seen a slight decline of about 1.8%.

Key Highlights from the Quarterly Report

The earnings press release detailed several significant developments beyond the headline numbers. The company demonstrated robust portfolio activity and took strategic steps to manage its capital structure.

• Significant Origination Activity: During the fourth quarter, Gladstone Capital invested $126.6 million, a substantial increase of 73.6% from the prior quarter. This included $106.7 million invested in five new portfolio companies.
• Strengthened Balance Sheet: The company issued $149.5 million in 5.875% Convertible Notes due 2030. Subsequently, in October 2025, it redeemed $207 million of higher-cost debt (the 7.75% 2028 Notes and 5.125% 2026 Notes), which is expected to reduce future interest expenses.
• Increased Shareholder Distributions: The quarterly cash distribution was raised to $0.59 per common share, up from $0.50 in the previous quarter. For the full fiscal year, distributions totaled $2.48 per share, a 25.3% increase over the prior year.
• Portfolio Quality: The fair value of the company's investments stood at 98.0% of cost as of September 30, 2025, improving from 96.6% at the end of the previous quarter. Secured first lien assets continued to represent over 70% of the debt investment portfolio at cost.

Looking Ahead

While the press release did not provide a specific quantitative financial outlook for the coming periods, company President Bob Marcotte struck an optimistic tone. He stated that the company's investment focus, combined with its recent debt refinancing and modest leverage, has "positioned us well to deliver continued asset growth and sustain our net interest income in support of future shareholder distributions."

Analysts currently estimate revenue of $24.43 million and EPS of $0.50 for the first quarter of fiscal year 2026. The full-year 2026 estimates project sales of $103.89 million and earnings of $2.01 per share.

For a more detailed breakdown of historical earnings and future analyst estimates for Gladstone Capital, you can review the data here.

Disclaimer: This article is for informational purposes only and is not intended as investment advice. The analysis is based on publicly available data and should not be construed as a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.