10-Q · May 7, 2026
Prospect Capital Corporation reported its Q3 2026 results with notable earnings performance, achieving an EPS of $0.16, beating estimates by approximately 45% despite a revenue miss of about 8%. The company's financial…
Earnings analysis · 10-K
PSEC earnings analysis
Filed August 20, 2026 · Our reading of the company's report
The latest report
Prospect Capital returned to positive annual earnings in fiscal 2026, with $29.828 million of net income applicable to common stockholders and diluted EPS of $0.06 after a large fiscal 2025 loss. Lower debt balances,…
Read full summary
Prospect Capital returned to positive annual earnings in fiscal 2026, with $29.828 million of net income applicable to common stockholders and diluted EPS of $0.06 after a large fiscal 2025 loss. Lower debt balances, meaningful floating-rate sensitivity and the Valley Electric monetization support the recovery, but rising non-accrual exposure, distressed credits and a $5.71 NAV per common share versus $6.56 a year earlier temper the outlook. The filing provides no numeric annual guidance.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.06
- Segment
- Single operating and reporting segment; total investment income was $639.454 million
What stood out
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Returned to Positive Annual EPS
Net increase in assets applicable to common stockholders improved to $29.828 million from a $593.762 million loss in fiscal 2025, producing diluted EPS of $0.06 versus $(1.35).
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Lower Operating Expense Base
Net investment income remained substantial at $326.387 million, while total operating expenses before the $17.125 million administration-expense reimbursement declined to $330.192 million from $380.596 million.
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Positive Floating-Rate Sensitivity
Interest-rate sensitivity remains favorable under the filing’s base-case structure: a 100-basis-point increase in rates would increase annual net investment income by approximately $24.747 million, while a 100-basis-point decline would reduce it by approximately $20.385 million.
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Lower Revolver Leverage
The company reduced revolving-credit borrowings to $562.328 million from $856.322 million and increased its asset-coverage ratio on indebtedness to 339.4% from 319.4%.
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Senior-Lending Portfolio Focus
The portfolio remained concentrated in private middle-market lending and investments: fair value was $6.343 billion across 91 portfolio companies, with first-lien debt representing $4.217 billion and equity $1.466 billion.
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Valley Electric Monetization
A post-year-end realization provided a potential catalyst: on July 1, 2026, Valley Electric was sold for total consideration of $280.779 million, including repayment of $83.859 million of debt and a recorded realized gain of $131.821 million.
What to watch
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Rising Non-Accrual Exposure
Credit stress increased materially: investments on non-accrual status represented approximately 0.7% of total assets at fair value versus 0.3% in the prior year, with cost basis rising to $298.227 million from $273.713 million.
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Bankruptcy and Valuation Losses
Distressed portfolio marks remain a significant risk. First Brands’ second-lien term loan was valued at only $41 against $37.000 million of amortized cost, while STG Distribution filed Chapter 11 on January 12, 2026 and its third-out term loan had a fair value of zero at June 30, 2026.
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Rate-Cut Earnings Sensitivity
Interest-rate declines could pressure earnings because 75.96% of interest-earning investments at fair value were floating-rate; the filing estimates a 300-basis-point rate decline would reduce annual net investment income by approximately $44.997 million.
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Concentrated Portfolio Exposure
Portfolio and geographic concentration amplify downside risk: Consumer Finance and Equity REITs represented 18.1% and 17.1% of portfolio fair value, respectively, while Mississippi represented 15.1% and California 12.7%.
Management's outlook
The 10-K does not provide numeric annual earnings or revenue guidance. Subsequent-event disclosures provide declared monthly common dividends of $0.035 per share for September and October 2026.
Earlier filings 4
10-K · August 26, 2025
Prospect Capital (Prospect) is a large externally-managed BDC that primarily lends to U.S. middle‑market private companies, with approximately $7.0 billion of total assets as of June 30, 2025. The firm emphasizes…
10-K · August 28, 2024
Prospect Capital (PSEC) is a large externally-managed BDC focused on middle-market lending, control equity investments, real estate/REIT investments (NPRC) and structured credit. The 10-K discloses approximately $7.86…
10-Q · May 8, 2024
Prospect Capital reported Total Investment Income of $202,215 (as presented in the filing) for the quarter ended March 31, 2024 and diluted EPS of $0.20. Investment income declined modestly year-over-year, but a…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.