Palmer Square Capital BDC Inc (NYSE:PSBD) Reports Mixed Q3 2025 Results, Beats on Revenue but Misses on EPS

Palmer Square Capital BDC Inc (NYSE:PSBD) has released its financial results for the third quarter of 2025, presenting a performance that narrowly surpassed analyst revenue expectations while delivering earnings per share that were slightly below consensus estimates. The market's initial reaction appears muted, reflecting a mixed financial report characterized by solid income generation but offset by portfolio valuation pressures.

Earnings and Revenue Versus Estimates

The company's third-quarter financial performance presented a nuanced picture when measured against Wall Street expectations. Total investment income, a key revenue metric for BDCs, came in ahead of forecasts, while core profitability on a per-share basis fell just short.

• Reported Revenue: $31.7 million
• Estimated Revenue: $30.3 million
• Reported EPS (Non-GAAP): $0.43
• Estimated EPS (Non-GAAP): $0.4403

The revenue beat of approximately 4.6% suggests the company's portfolio continued to generate healthy cash flow from its investments. However, the slight miss on EPS indicates that expenses or other factors slightly dampened the translation of that top-line strength to the bottom line available to shareholders.

Market Reaction

The immediate market reaction to the earnings release has been negative. In pre-market trading, the stock is indicated down approximately 1.15%. This negative drift suggests investor focus may be leaning more heavily on the EPS miss and other elements within the detailed report rather than the revenue outperformance. The stock's performance over recent weeks has also been soft, declining around 3.2% over the past month.

Financial and Operational Highlights

Beyond the headline earnings figures, the earnings release detailed several key developments for the business development company.

• Net Investment Income: The company reported NII of $13.6 million, or $0.43 per share, a decrease from $15.7 million, or $0.48 per share, in the same period last year.
• Net Asset Value: The NAV per share declined to $15.39 as of September 30, 2025, down from $15.68 at the end of the previous quarter and $16.61 a year prior. This was primarily driven by total net realized and unrealized losses of $10.3 million for the quarter.
• Dividend and Liquidity: PSBD paid a cash distribution of $0.42 per share for Q3 and declared a Q4 2025 base dividend of $0.36 per share. The company maintained a debt-to-equity ratio of 1.53x and reported available liquidity of approximately $252.8 million.
• Portfolio Composition: The portfolio remains focused on senior secured loans, which constitute 95% of long-term investments. The weighted average portfolio yield stood at 10.07%, and investments on non-accrual increased to 0.40% of the portfolio at fair value, up from 0.19% in the prior quarter.

Looking Ahead

The press release did not provide a specific quantitative financial outlook for the coming quarters or the full year. This absence of formal guidance means investors must rely on the reported results and management's qualitative commentary. Christopher D. Long, Chairman and CEO, expressed satisfaction with the quarter's performance, citing a "focus on high quality assets and prudent portfolio construction," and noted an "acceleration in deal activity."

For further detail on Palmer Square Capital BDC's earnings history and future analyst estimates, you can review the information available here: PSBD Earnings and Estimates.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend buying or selling any securities. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.