OFS Credit Q3 Non-GAAP NII Beats Estimates, Revenue Misses

OFS Credit reported Q3 Non-GAAP NII of $0.31, beating estimates by $0.08. However, interest income of $11.86M (+59.2% Y/Y) missed by $0.18M. Net asset value per common share decreased to $6.13, down $0.04 from Q2. The interest income yield of the investment portfolio was 14.38%, based on average amortized cost.

OFS Credit (NASDAQ: OCCI) has reported its third-quarter (Q3) financial results for the fiscal year ended July 31, 2025. The company's Non-GAAP Net Investment Income (NII) of $0.31 per share exceeded analysts' estimates by $0.08, demonstrating a robust performance in the quarter. However, the company missed its interest income target by $0.18 million, with interest income reaching $11.86 million, a 59.2% year-over-year (Y/Y) increase.

The company's Net Asset Value (NAV) per common share decreased to $6.13, down $0.04 from the previous quarter's NAV of $6.17. This decrease was primarily due to distributions of $0.345 per common share paid during the quarter, which exceeded the quarterly NII of $0.22 per share. The net gain on investments of $0.07 per share partially offset this decrease.

During the quarter, OFS Credit's interest income yield of its investment portfolio was 14.38%, based on average amortized cost. The company also raised $10.0 million through its At-the-Market common stock offering program and deployed $41.2 million into its investment portfolio, contributing to the increase in its portfolio yield.

OFS Credit's Chief Executive Officer, Bilal Rashid, commented on the quarter's performance, stating, "We had a solid third fiscal quarter highlighted by a 17.0% increase in net investment income compared to the prior quarter. During the quarter, we raised approximately $10.0 million of additional capital through our At-the-Market common stock offering program. We deployed $41.2 million into our investment portfolio; these new investments, which carried a weighted-average effective yield of 19.05% at period end, contributed to the increase in our portfolio yield during the quarter."

Overall, OFS Credit's Q3 results indicate a strong performance in net investment income, despite missing interest income targets and a decrease in NAV per common share. The company's focus on raising capital and deploying investments into its portfolio has contributed to an increase in its portfolio yield.