What caused GLAD's EPS surprises in 2024?

Gladstone Capital's EPS was negatively surprised in 2024 due to a combination of factors that impacted its net investment income and overall financial performance.

1. **Decline in Total Interest Income**: The company experienced a decrease in total interest income, which fell by 7.7% to $23.714 million. This decline was primarily attributed to a decrease in other income, which negatively affected the company's earnings.
2. **Increase in Management Fees**: Gladstone Capital saw a rise in management fees, which increased to $5.7 million. This was due to the absence of new deal advisory fee credits, which had a direct impact on the company's net investment income.
3. **Underperforming Investments**: The company faced challenges with certain investments, such as DK I and EGS, which were underperforming and required increased management attention. These underperforming investments put pressure on the company's overall financial performance.
4. **Potential Impact of SOFR Rates**: There was a potential pressure from declining SOFR (Secured Overnight Financing Rate) rates, which could impact future earnings and distributions. This factor, combined with the other challenges, contributed to the company's financial challenges in 2024.

In summary, Gladstone Capital's EPS was negatively surprised in 2024 due to a combination of factors including a decline in total interest income, increase in management fees, underperforming investments and potential impact of SOFR rates. These factors combined to create a challenging environment for the company's financial performance.