ARCC earnings analysis
What we found in ARCC's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
The supplied filing extract does not include the income statement, balance sheet, cash-flow statement, or segment tables, so reported Q2 revenue, EPS, margins, cash flow, and period-over-period comparisons cannot be verified from this material. The principal disclosed operating sensitivity is to interest rates: a 100-basis-point rate increase would add an estimated $94 million of annualized net income, while a 100-basis-point decline would subtract $93 million. No updated Item 1A risk factors or numeric earnings guidance were provided; the new May 26, 2026 advisory-fee derivative litigation is the most notable incremental disclosure.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Net income benefits from higher base rates
- ARCC's interest-rate sensitivity remains net positive: management estimates a 100-basis-point rise in base rates would increase annualized net income by $94 million, versus a $93 million reduction from a 100-basis-point decline, excluding income-based fees.
- Portfolio remains predominantly floating rate
- Variable-rate assets provide substantial asset-side rate participation: 71% of investments at fair value bore variable interest or dividends at June 30, 2026, and 96% of remaining variable-rate investments excluding SDLP Certificates had rate floors.
- Full $1.0B repurchase capacity remains
- The board extended the $1.0 billion stock-repurchase authorization through February 15, 2027; the entire $1.0 billion remained available at June 30, 2026.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Material downside if base rates fall
- ARCC estimates that a 300-basis-point decline in base rates would reduce annualized net income by $227 million, excluding income-based fees. This remains meaningful because 71% of investments at fair value carry variable rates.
- New advisory-fee litigation is unresolved
- A May 26, 2026 derivative action alleges excessive advisory fees under Section 36(b) and seeks damages, disgorgement, injunctive relief and possible rescission; management cannot estimate a loss range and states the outcome is uncertain.
- Illiquid portfolio valuation and credit risk
- Valuation risk remains elevated because substantially all portfolio investments lack readily available market values. At June 30, 2026, 9% of investments at fair value were non-income producing and 1% were on non-accrual status.
What they said about what is next.
The extracted 10-Q text contains no quantitative revenue or EPS outlook. Management instead provides interest-rate sensitivity: a 100-basis-point increase is estimated to increase annualized net income by $94 million, while a 100-basis-point decrease is estimated to reduce it by $93 million, before any income-based fee impact.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 28, 2026
- The 10-Q emphasizes interest rate and valuation risks in Ares Capital’s portfolio while disclosing portfolio composition and sizable interest-rate sensitivity scenarios. Management reports that 71% of investments at…
- 10-K · February 4, 2026
- Ares Capital (ARCC) emphasizes its scale as a leading BDC and exclusive access to the Ares platform to originate and manage middle‑market direct lending investments. The 10‑K highlights $31.2 billion of total assets and…
- 10-Q · July 30, 2024
- Ares Capital reported total investment income of $755.0 million for the quarter ended June 30, 2024, up from $634.0 million in Q2 2023. Net investment income increased to $358.0 million (Q2 2024) from $314.0 million (Q2…
- 10-Q · July 25, 2023
- Ares Capital reported investment income of $634 million for Q2 2023, up from $479 million in Q2 2022, driving net investment income of $314 million (vs $257 million). Diluted net income per share rose to $0.59 (Q2 2022:…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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