What factors drove the changes in Prospect Capital's revenue and profit?

What guidance did Prospect Capital's management provide for the next earnings period?

What is the revenue and EPS growth rate for Prospect Capital year over year?

Did Prospect Capital beat or miss consensus estimates last quarter?

What were the key takeaways from Prospect Capital’s earnings call?

What is Prospect Capital's latest dividend and current dividend yield?

What were the key takeaways from Prospect Capital's earnings call?

What is the market's earnings forecast for Prospect Capital next quarter?

- **Strategic Repositioning**: First-lien loans now 71.1% of portfolio (+701bps), with exits from subordinated notes (now 0.3%) and real estate
- **Financial Strength**: $1.5B liquidity, 48-bank revolver, 4.54% cost of unsecured debt
- **Portfolio Performance**: 11.8% yield on investments, 23% IRR on real estate exits
- **Growth Drivers**: Lower middle market deals with 700+bps spreads, 10-12% unlevered IRR
- **Funding Innovation**: $168M 5.5% notes issuance, entry into Israeli bond market

**【Management Opening Remarks】**
- Q1 2026 NII: $79.4 million ($0.17 per share), up 12% YoY. NAV: $3 billion ($6.45 per share). Debt/Assets: 28.2%. 
- Monthly distributions of $4.5 per share for Nov-Jan 2026. Total distributions since IPO: $4.6 billion.
- Strategic repositioning: 
  - First-lien senior secured loans mix +701bps to 71.1% (vs 64.1% Q2 2024)
  - Exiting subordinated notes (-808bps to 0.3%), real estate, and equity-linked securities
  - Targeting < $50M EBITDA companies with less competition

**【CFO Financial Commentary】**
- Q1 2026 Financial Highlights:
  - Interest income: $103.2 million (11.8% yield)
  - Non-accruals: 0.7% of assets
  - Revolver utilization: $1.5 billion (SOFR +2.05% pricing)
- Capital Structure:
  - $4.2 billion unencumbered assets (63% of portfolio)
  - 48-bank revolver ($2.12 billion undrawn, maturing 2029)
  - $168 million 5.5% senior unsecured notes issued in Q1
- Weighted average cost of unsecured debt: 4.54%

**【Portfolio & Investment Update】**
- Middle Market Lending:
  - 85% of portfolio at cost in senior secured debt
  - Q1 originations: $92 million (72% middle market)
  - Repayments/exits: $235 million (net $143M)
- Real Estate Strategy:
  - 55 properties sold since 2012 (24% IRR, 2.4x CoC multiple)
  - 3 properties sold in Q1 for $59M (23% IRR)
  - Remaining portfolio: 55 properties, 5.1% income yield
- Lower Middle Market Focus:
  - 700+bps spreads vs upper middle market
  - 10-12% unlevered IRR, 15%+ levered yield

**【Balance Sheet & Funding Update】**
- Liquidity:
  - $1.5 billion cash + undrawn revolver
  - $4.2 billion unencumbered assets
- Diversified Funding:
  - 48-bank revolver
  - Unsecured bonds (convertible, non-convertible, retail)
  - 26-year liability ladder (maturities through 2052)
- Recent Actions:
  - $168M 5.5% notes due 2030
  - Israeli bond market entry

**【Q&A Highlights】**
1. Equity-linked rotation strategy:
   - Rotating out of low-yielding assets (5% real estate yield) into 15%+ senior secured loans
   - Financials book retained for tax benefits and recurring cash flows
2. Liability management:
   - Israeli bonds part of diversified funding strategy
   - No material counterparty risk with 48-bank revolver
   - 2026 maturities covered by revolver and asset sales

Prospect Capital Corporation(PSEC)-20251107-2026 Q1 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

PSEC

PSEC fundamentals

You can ask Aime