Great Elm Capital's Q2 2025: Contradictions Unveiled on Maverick Gaming and CoreWeave Investments

Maverick Gaming investment status, CoreWeave investment returns, investment focus: corporate debt vs. CLO equity, Maverick Gaming outlook and bankruptcy status are the key contradictions discussed in Great Elm Capital Corporation's latest 2025Q2 earnings call.



Strong Financial Performance and Investment Income Growth:
- GECC reported the highest total investment income in its history at $14.3 million for Q2 2025, with cash TII comprising approximately 90% of total investment income.
- The 14% increase in TII from the prior quarter and nearly 50% year-over-year growth was driven by the success of the growing CLO platform and income from other cash-generating investments.

NAV and NII Growth:
- GECC's NAV per share increased by over $0.60 from the previous quarter to $12.10 as of June 30, 2025.
- Net investment income (NII) per share was $0.51, compared to $0.40 in the prior quarter, primarily due to a timely cash distribution on preference shares and higher income from the CLO JV.

CoreWeave Investment and Portfolio Performance:
- GECC's investment in CoreWeave's convertible preferred equity resulted in unrealized gains, contributing significantly to the increase in NAV per share.
- The portfolio's diversification and focus on senior secured investments positioned GECC to weather dynamic macroeconomic environments and generate sustainable returns.

Specialty Finance Business Repositioning:
- Great Elm Specialty Finance (GESF) completed the rebranding of Sterling to Great Elm Commercial Finance and exited final equipment lease holdings, enhancing focus and profitability.
- This strategic transformation is expected to grow GESF's income and distributions, aligning the platform with long-term growth objectives.

Tariff Impact and Portfolio Resilience:
- GECC maintained broad diversification with a predominantly domestic focus, mitigating direct impacts from tariffs.
- The company actively monitors the changing macroeconomic landscape and evaluates potential second and third-order effects of tariffs and shifting trade dynamics to ensure portfolio resilience.