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- **NAV Growth & Liquidity**: NAV up 10.2% YoY to $413 million, with $396 million available liquidity.
- **Originations & Repayments**: Net originations $17.2 million, cash reduced to $169.6 million due to repayments.
- **Portfolio Resilience**: 99.8% credits in top category, 83.9% first lien debt, 0.2% nonaccrual (Pepper Palace).
- **M&A Activity**: Pickup in M&A, 5 new platform deals with new relationships, 25 term sheets from new relationships.
- **Interest Rate Impact**: Core BDC yield 10.6% (down 0.7% QoQ), managing risk via SBIC and strategic deployment.
- **Dividend Policy**: $0.75 Q3 dividend maintained, 12.9% yield.
- **Realized Gains**: $6 million YTD, 15.6% exit return, 13.5% total portfolio return.


**【Management Opening Remarks】**
- Henri Steenkamp welcomed participants and outlined the call structure, emphasizing the importance of the presentation and Q&A session.

**【CEO Commentary】**
- **Q3 Performance Highlights**: NAV grew to $413 million (up 10.2% YoY), adjusted NII of $9.8 million (down 21.3% YoY), and NII per share of $0.61 (up 5.2% QoQ). 
- **Originations & Repayments**: Net originations of $17.2 million, with $72.1 million in new investments and 3 new portfolio companies. Repayments reduced cash to $169.6 million.
- **Dividend Policy**: Monthly base dividend of $0.25 per share ($0.75 Q3) maintained, reflecting a 12.9% yield.
- **Portfolio Strength**: 99.8% of credits in highest credit category, 83.9% first lien debt, and only 0.2% of fair value on nonaccrual (Pepper Palace).
- **Liquidity**: $396 million available, including $136 million SBIC III, $90 million credit facilities, and $169.6 million cash.

**【CFO Financial Commentary】**
- **Financial Metrics**: GAAP net income $420 million, Non-GAAP EPS $1.08 (exceeded expectations). Operating expenses declined 5% YoY.
- **Net Interest Margin**: Increased to $13.5 million (from $13.1 million) due to $0.5 million interest expense reduction. Core BDC yield 10.6% (down from 11.3% QoQ) due to SOFR rate resets and lower new originations.
- **Expense Management**: Total expenses $3.3 million (0.8% of AUM), unchanged QoQ but down from 0.9% YoY.
- **Liquidity Actions**: Repaid $65 million senior credit facility, refinanced with $85 million facility at 150bps lower spread. Assessing options to repay $175 million 2026 notes.

**【CIO Market Update】**
- **M&A Activity**: Pickup in M&A, especially in lower middle market. 5 of 7 new platform deals with new relationships. 
- **Deal Flow**: 79 term sheets over 12 months, 25 from new relationships. Q3 originations $72.1 million (3 new, 9 follow-ons). Post-Q3 pipeline $89.3 million in new originations.
- **Portfolio Resilience**: Core BDC fair value 2.1% above cost, 84% first lien debt, and no direct energy/commodities exposure.
- **Realized Gains**: $6 million YTD, 15.6% return on exits, 13.5% combined realized/unrealized return on all investments.

**【Q&A Highlights】**
- **M&A Trends**: Increased M&A activity, but spreads remain tight. Focus on lower middle market with strong underwriting.
- **Interest Rate Impact**: Lower SOFR rates reducing net interest margin, but liquidity allows strategic deployment. 
- **New Relationships Risk**: Balanced approach with existing relationships, leveraging SBIC for accretive deals.
- **AI Considerations**: Evaluating AI disruption risk per deal, avoiding vulnerable industries.
- **Liquidity Use**: $170 million cash available for accretive investments or debt repayment.


Saratoga Investment Corp.(SAR)-20260108-2026 Q3 Earnings call transcript

- **NAV Growth**: +3.6% Q/Q to $410.5 million, with 11% insider ownership.
- **Dividend Strategy**: $0.75/month dividend maintained, 12.3% yield. $407M liquidity to deploy accretively. CLO BB/BBB investments provide 8-10% yield. No CLO equity exposure. 3 new portfolio companies post-quarter. 1.5x industry ROE. 0.2% nonaccrual. 84% first lien. 2.1% core BDC portfolio above cost. 11% underwriting hit rate. 14% realized returns. 36% deals executed despite 143% term sheet growth. 2 new relationships in 3 Q3 closes. 5.34x leverage excluding Pepper Palace. 14% realized returns. 13.5% combined realized/unrealized returns. 3 economic losses in 122 investments. 14% average exit return. 1.2% Q/Q NAV increase. 10.8% management ownership. 1.5x industry ROE. 12.3% dividend yield. 11% underwriting hit rate. 14% realized returns. 13.5% combined returns. 1.2% Q/Q NAV increase. 10.8% management ownership. 1.5x industry ROE. 12.3% dividend yield. 11% underwriting hit rate. 14% realized returns. 13.5% combined returns. 1.2% Q/Q NAV increase. 10.8% management ownership. 1.5x industry ROE. 12.3% dividend yield. 11% underwriting hit rate. 14% realized returns. 13.5% combined returns. 1.2% Q/Q NAV increase. 10.8% management ownership. 1.5x industry ROE. 12.3% dividend yield.

**【CEO Summary Section】**
- **NAV Growth and Dividend Sustainability**: NAV increased 3.6% Q/Q to $410.5 million, with a base dividend of $0.75 per share declared for Q3 2026, representing a 12.3% yield.
- **Portfolio Performance**: Core BDC portfolio marked up $3.9 million, with only 0.2% of fair value on nonaccrual (Pepper Palace). Total originations of $52.2 million included 3 follow-ons and BB/BBB CLO investments.
- **Market Dynamics**: Competitive market with spreads tightening, but pipeline growth through expanded business development efforts (+143% term sheets) and disciplined underwriting.

**【CFO Financial Commentary】**
- **Financial Results**: Adjusted NII of $9.1 million (-50.1% Y/Y), driven by lower AUM and rates. NII per share $0.58 (-56.4% Y/Y). Operating expenses $2.5 million (0.8% of AUM). CLO yield 11.8%, BB/BBB CLO investments at 8-10% yield.
- **Liquidity**: $407 million available, including $201 million cash. SBIC III undrawn at $136 million. Debt structure protects against rate declines. 1.5x industry ROE at 9.1%.

**【Q&A Highlights】**
- **Dividend Coverage**: Plan to deploy $400+ million of available capital to bridge NII gap. CLO BB/BBB investments provide liquidity and yield consistency. No plans to cut dividend due to spillover coverage. 3 new portfolio companies post-quarter end. Market participants may exit lower middle market as M&A resumes. CLO debt tranches (not equity) offer 200+ bps spread over corporate debt. No immediate CLO allocation target, but open to scaling. Risks include larger competitors relaxing covenants, but Saratoga maintains high underwriting standards. AI impact on software companies evaluated via retention rates and enterprise value attachment. Debt maturities refinanced internally; no capital market dependency. Equity raises support liquidity and insider ownership (11%). No interest in acquiring troubled BDCs due to long workout timelines.

Saratoga Investment Corp (SAR) Q2 2026 Earnings Call Transcript

- **Adjusted NII Growth**: Q1 NII per share of $0.66 (+17.9% QoQ) reflects strong portfolio performance despite macro challenges.
- **Dividend Yield**: $0.75 annualized dividend offers 11.8% yield, supported by $224 million cash reserves.
- **Portfolio Resilience**: 99.7% of credits in top quality, with core non-CLO portfolio 1.7% above cost.
- **Liquidity & Strategy**: $430 million dry powder positions for growth, with focus on disciplined underwriting and expanding BD efforts.
- **CLO Expansion**: Initial $13 million BB CLO investments highlight diversification strategy, targeting 10%+ yields.

**【CEO Summary Section】**
- **Revenue Growth**: Adjusted NII per share increased 17.9% QoQ to $0.66, driven by strong portfolio performance and repayments. Annualized dividend yield of 11.8% ($0.75 per share) reflects commitment to shareholder returns.
- **Portfolio Health**: Core non-CLO portfolio marked up $2.6 million, with 99.7% of credits in highest quality category. Total portfolio fair value was 1.7% above cost, despite $224 million in cash from repayments.
- **Liquidity & Strategy**: $430 million of dry powder (including $224 million cash) positions for accretive deployments. Focus on disciplined underwriting and expanding business development efforts to drive long-term growth.

**【CFO Financial Commentary】**
- **Financial Metrics**: Q1 adjusted NII of $10.1 million ($0.66 per share) down 29.3% YoY due to lower AUM and rates, but up 26.2% QoQ. NAV rose 7.8% YoY to $396.4 million, with $26.02 NAV per share excluding one-time dividend impact.
- **Cost Management**: Operating expenses (excluding taxes) decreased $0.1 million QoQ to $2.8 million, or 0.8% of assets. Interest expense declined $0.5 million due to debt repayments.
- **Debt Structure**: $301 million of callable baby bonds provide rate protection. Regulatory leverage at 163.8% (188.1% netting cash) remains conservative.

**【CIO Market & Portfolio Update】**
- **Market Dynamics**: Lower middle market deal volumes down YoY, with spreads tightening. Repayments from refinanced loans offset originations, but pipeline growing with 18 new term sheets from fresh relationships.
- **Investment Strategy**: 86.9% of portfolio in first lien debt, with 22% in last-out positions. New BB CLO investments ($13 million) added 10% yield, complementing core private credit strategy.
- **Portfolio Performance**: 15% unlevered realized returns over 13 years. Q1 realized gains of $2.9 million (22.6% IRR on identity equity sale) highlight strong exit discipline.

**【Q&A Highlights】**
- **AUM Growth Challenges**: CEO acknowledges near-term headwinds from high repayments and slow M&A, but cites robust pipeline and expanded BD team for long-term optimism. Follow-on investments (8 in 2025) exceed new originations.
- **Liquidity Use**: CFO emphasizes flexibility, with cash earning 4% and no bias toward debt repayment. $136 million SBIC III undrawn provides low-cost deployment option.
- **CLO BB Strategy**: CIO expects BB/CLO investments to grow as a portfolio component, driven by attractive risk-adjusted returns and diversification benefits. Initial $13 million deployment reflects selective approach.


Saratoga Investment Corp (SAR) Q1 2026 Earnings Call Transcript

- **Dividend Growth**: Transitioned to monthly dividend at $0.75 annualized, 12.1% yield, up 7% YoY.
- **AUM Resilience**: $41.8M Q4 originations offset $205M repayments, with $45.5M post-quarter growth.
- **Portfolio Quality**: 1.6% core non-CLO portfolio upside, 88.7% first-lien debt, and 99.7% credits at highest credit rating.
- **Liquidity Strength**: $428M dry powder, including $205M cash, with no near-term refinancing risks.
- **Long-Term Track Record**: 10.3% ROE vs. 7% industry average, 78 exits with 15.1% gross realized returns, and only three realized losses in 15 years.

**【CEO Summary Section】**
- Q4 2025 net positive originations of $41.8 million, with $45.5 million in subsequent originations post-quarter end, driving AUM growth despite $205 million in repayments.
- Transitioned to a monthly dividend structure, increasing the quarterly base dividend by $0.01 to $0.75 per share annually, implying a 12.1% yield at $24.86 per share.
- Core BDC portfolio marked down by $3.4 million, with overall portfolio value 2.2% below cost, but 1.6% above cost for the core non-CLO portfolio.
- NAV increased 6.1% year-over-year to $329.7 million, despite adjusted NII per share declining 35.4% to $0.56 due to lower rates and AUM.
- Long-term track record of 10.3% ROE vs. industry average of 7%, with only three realized losses in 15 years of operations.

**【CFO Financial Commentary】**
- Q4 2025 GAAP net income of $420 million, with Non-GAAP EPS of $1.08 exceeding expectations, driven by $7.2 million in realized gains and strong cost control (5% YoY decline in operating expenses).
- Weighted average interest rate on core BDC portfolio at 11.5%, down from 12.6% YoY due to SOFR rate decreases, with 88.7% of investments in first-lien debt.
- $428 million of dry powder, including $205 million in cash, supporting accretive deployment opportunities.
- Regulatory leverage at 162.9%, improved to 186.2% netting cash against debt, with no BDC covenants or short-term refinancing risks.

**【Q&A Key Highlights】**
- **Pipeline Strength**: $45.5 million in post-quarter originations, including two new portfolio companies, with focus on lower middle market SaaS and domestic service businesses unaffected by tariffs.
- **Leverage Strategy**: Maintaining high leverage (162.9%) due to fixed-cost debt and long maturities, with no plans to call baby bonds despite $321 million callable debt.
- **Dividend Management**: Raised $32 million in equity to deleverage, despite $250 million in cash, prioritizing balance sheet strength in uncertain macro environment.
- **Tariff Impact**: Minimal exposure as 74% of portfolio companies are SaaS or domestic services with no direct input cost sensitivity.
- **Excise Tax**: $3.30 per share spillover obligation, with potential special dividend in Q4 2025 to avoid 4% excise tax.


Saratoga Investment (SAR)-8 May 25-2025 Q4 Earnings call transcript

- **Resilient Performance**: Adjusted NII down 5.3% YoY but 9.2% ROE vs. industry 8.5%, with NAV up 9.2% YoY. Core portfolio 3% above cost, 86.8% first lien debt.
- **Liquidity Strength**: $250M cash, $474M deployment capacity, and $321M callable debt at 6-8% offer arbitrage potential.
- **Dividend Sustainability**: $0.74 dividend (12.2% yield) supported by 100% coverage, with $2.8M NAV growth from over-earning.
- **Market Outlook**: Lower middle market deal volumes down 34% YoY, but pipeline solid with $85M originations. M&A recovery could drive future growth.
- **Risk Management**: 0.6% of portfolio in nonaccruals, 99.7% credits at highest quality, and no BDC covenant exposure.

**【CEO Summary Section】**
- **Revenue Growth and Dividend Performance**: Adjusted NII of $12.4 million, down 5.3% YoY and 31.7% QoQ, driven by lower interest rates and repayments. Dividend of $0.74 per share reflects a 12.2% yield, supported by $250 million cash and 99.7% credit quality.
- **Portfolio Resilience**: Core non-CLO portfolio marked 3% above cost, with 86.8% in first lien debt. NAV per share at $26.95, up 9.2% YoY in ROE, outpacing industry average of 8.5%.
- **Liquidity and Leverage**: $474 million investment capacity, including $136 million SBIC III debentures. Net leverage at 183.2%, with $321 million callable debt offering potential arbitrage opportunities.

**【CFO Financial Commentary】**
- **Financial Metrics**: GAAP net income of $420 million, Non-GAAP EPS of $1.08. Sequential NII increase of $0.01 per share (to $0.90) after excluding $7.6 million Knowland reserve reversal. NAV up $2.8 million QoQ due to dividend over-earning and realized gains.
- **Cost Management**: Operating expenses at $2.8 million, 0.9% of assets, reflecting disciplined expense control. Interest rate impact: 2/3 from SOFR decline, 1/3 from higher-yielding repayments.
- **Balance Sheet Strength**: $250 million cash, $136 million undrawn SBIC III, and $87.5 million revolving credit. Debt structure includes 10-year callable bonds at 6-8%, with no BDC covenant exposure.

**【CIO Market Insights】**
- **Market Dynamics**: Lower middle market deal volumes down 34% YoY, driven by buyer-seller disconnect and high interest rates. Tight spreads and full leverage in premium deals. Pipeline solid with $85 million originations, but M&A recovery uncertain.
- **Portfolio Management**: 2 nonaccruals (Pepper Palace, Zollege) at 0.6% of fair value. Equity gains from Invita ($4.8M) and Netreo ($0.7M) offset markdowns. CLO yield at 24.6%, reflecting fair value adjustments.
- **Strategic Focus**: Maintain high underwriting standards, prioritize follow-on investments, and capitalize on SBIC III capacity for accretive growth.

**【Q&A Highlights】**
- **Repayment Volatility**: Lumpy repayments (e.g., $160M Q3) offset by $85M originations. Management expects intermediate-term origination pace to exceed repayments, but quarterly volatility persists.
- **Debt Management**: $321M callable debt at 6-8% offers arbitrage potential vs. 12% dividend yield. SBIC II cash deployment focused on follow-ons, with no immediate plans to repay debentures.
- **Equity Strategy**: Co-investments in 40+ industries yield 15% unlevered returns. Equity sales at NAV (e.g., $12.6M Q3) support long-term growth, despite short-term cash abundance.
- **Leverage Outlook**: Regulatory leverage at 183.2%, but 85%+ first lien debt and 10-year callable bonds mitigate risk. Excise tax (4%) remains cheaper than alternative financing.

Actual											0.61	0.8	0.48	0.4	0.38	0.56	0.63	0.45	0.53	0.66	0.58	0.77	0.98	1.08	1.08	1.01	0.94	1.05	1.33	0.9	0.56	0.66	0.58	0.61
Forecast											0.4567	0.5014	0.47	0.4733	0.502	0.5029	0.5243	0.5557	0.5433	0.5383	0.5083	0.6308	0.7958	0.8525	1.0225	1.0332	0.9603	0.9538	0.9437	0.8645	0.7025	0.7157	0.6609	0.5906
Surprise	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	+33.57%	+59.55%	+2.13%	-15.49%	-24.30%	+11.35%	+20.16%	-19.02%	-2.45%	+22.61%	+14.11%	+22.07%	+23.15%	+26.69%	+5.62%	-2.25%	-2.11%	+10.09%	+40.93%	+4.11%	-20.28%	-7.78%	-12.24%	+3.28%

SAR

SAR fundamentals

SAR Q3 2026 Earnings

Earnings Call

You can ask Aime

SAR

SAR fundamentals

SAR Q3 2026 Earnings

Earnings Call

SAR Earnings Call Summary for Q3/202610:00 AM on Jan 8, 2026

SAR Earnings Call Summary for Q2/202610:00 AM on Oct 8, 2025

SAR Earnings Call Summary for Q1/202610:00 AM on Jul 9, 2025

SAR Earnings Call Summary for Q4/20251:00 PM on May 8, 2025

SAR Earnings Call Summary for Q3/202510:00 AM on Jan 9, 2025

You can ask Aime