Prospect Capital Corporation (PSEC) Earnings
Prospect Capital Corporation is expected to report next earnings on November 5, 2026 (in NaN days), with a consensus EPS estimate of $0.10. PSEC has beaten EPS estimates in 12 of its last 12 reported quarters (average surprise +46.7% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Aug 21, 2026 | $0.11 | $0.15 | +41.9% | $156M | +4.0% |
| May 8, 2026 | $0.11 | $0.16 | +44.3% | $150M | -8.1% |
| Nov 6, 2025 | $0.10 | $0.17 | +70.0% | $121M | -22.3% |
| Aug 26, 2025 | $0.13 | $0.17 | +30.8% | $-150M | -190.7% |
| May 8, 2025 | $0.14 | $0.19 | +35.7% | $-93M | -155.7% |
| Nov 8, 2024 | $0.17 | $0.21 | +23.5% | $-82M | -140.1% |
| Aug 28, 2024 | $0.18 | $0.25 | +38.9% | $398M | +93.6% |
| May 8, 2024 | $0.20 | $0.23 | +15.0% | $132M | -35.9% |
| Feb 8, 2024 | $0.22 | $0.24 | +9.1% | $211M | -6.1% |
| Aug 29, 2023 | $0.21 | $0.23 | +9.5% | $16M | -86.6% |
| Feb 8, 2023 | $0.26 | $0.27 | +3.8% | $82M | -61.5% |
| Nov 9, 2022 | $0.20 | $0.25 | +25.0% | $203M | +8.7% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q4 FY2026 · August 21, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
### Overall Financial Results for Q1 2026 - Net investment income (NII) was $78 million, or $0.15 per common share, consistent with the prior quarter. - Net asset value (NAV) was approximately $2.9 billion, or $5.71 per common share. - Net debt to total assets ratio was 28.6% at June 30, 2026, with 83.7% of total debt plus preferred stock consisting of unsecured debt and unsecured perpetual preferred securities. - Monthly common shareholder distributions of 3.5 cents per share were announced for September and October 2026. Cumulative distributions since IPO through October 2026 will exceed $4.8 billion, or $22.14 per share. Preferred distributions continue at contractual rates. ### Recent Exits and Investment Returns - On July 1, 2026, Prospect completed the sale of portfolio company Valley Electric for approximately $328 million in total consideration. Including expected net exit proceeds of $281 million plus prior interest, dividends and other cash flows, the investment delivered a 20.5% realized gross annualized IRR and a 4.8x multiple of invested capital, marking the 13th highest IRR among Prospect's significant investments. Pro forma for the sale and revolver repayment, drawn revolver balance would have been $323 million at June 30. ### Strategic AI Transformation - Management views AI, specifically large language models and automation tools, as a once-in-a-generation transformational opportunity to enhance profitability across all Prospect businesses and portfolio holdings, including majority-owned equity companies and properties. - Management expects these AI initiatives will generate tens of millions of dollars in annualized cash flow benefit (some already realized) from both revenue growth and cost savings, with even greater upside from valuation multiple expansion. - Prospect intends to become an industry leader in applying transformative AI tools across its operations. ### Balance Sheet Strength and Liquidity - Prospect maintains a prudent leverage profile, diversified matched-book funding, a substantial majority of unencumbered assets, a laddered liability structure extending 25 years to 2052, and no material unfunded asset commitments, resulting in strong liquidity and balance sheet resilience. - As of June 2026, prior to the Valley Electric sale, combined cash and undrawn revolving credit commitments totaled $1.6 billion, with $4.2 billion (66% of total portfolio) in unencumbered assets. - The revolving credit facility has $2.12 billion in commitments from 48 banks, matures in June 2029 (revolves until June 2028), with drawn pricing of SOFR plus 2.05%. This lender diversity is unmatched among industry peers. - In October 2025, Prospect issued $168 million in 5.5% senior unsecured notes due 2030. Weighted average cost of unsecured debt financing was 4.78% as of June 30, 2026. - Unfunded commitments to portfolio companies total ~$65 million (1% of total assets), 52 million of which are at Prospect's sole discretion (0.8% of total assets). - All unsecured debt has no asset restrictions and no cross-defaults with the revolving credit facility, and diversified funding across multiple investor types has substantially reduced counterparty risk.
Guidance
Management did not provide explicit formal forward-looking financial guidance for future periods, nor any upward, downward, or maintained guidance revisions in this call. The only forward-looking statements were qualitative expectations for AI-enabled profitability improvements, and a stated plan to redeploy future real estate exit proceeds primarily into additional first lien senior secured corporate loans with selected equity-linked investments.
Segment performance
1. Middle Market Lending: Represented 85% of total investments at cost as of June 2026, and accounted for 91% of total investment originations during the quarter. Over 22 years, exited middle market investments generated a 14.4% gross IRR on $11.5 billion of invested capital, with $14.7 billion in total exit proceeds and a 20bps annualized loss rate. As of June 2026, the segment held 91 portfolio companies across 31 industries with an aggregate fair value of $6.3 billion; 84% of the portfolio at cost was senior secured debt, with just 2.3% invested in software companies (well below the BDC average of 22%). The segment's portfolio has stronger credit metrics than peers: 4.9x net leverage (vs 6.1x for peers), 223% cash interest coverage (vs 160% for peers), and 20bps annualized net realized loss rate (vs 100bps for peers). 2. Real Estate Property (National Property Recorp, NPRC): Represented 14% of total investments at cost as of June 2026. The portfolio holds 52 developed, occupied cash-flow multifamily properties, with a 5.3% income yield in the June quarter and $185 million in unrealized gains as of June 2026. Since the segment's 2012 inception through June 2026, exited nearly 60 property investments, generating a 24% unlevered gross cash IRR and a 2.4x cash-on-cash multiple. In the full 2026 fiscal year ending June, 6 property exits generated an 18% IRR and 2.3x multiple. 3. Subordinated Structured Notes: This portfolio has been essentially fully exited as of June 2026, representing ~0% of investments at cost, down from 8.4% in June 2024. Overall Investment Income: For the 12 months ending June 2026, interest income made up 91% of total investment income. Payment-in-kind (PIK) interest income fell 53% from the 12 months ending June 2024, and accounted for 10% of total investment income in fiscal 2026. Non-accruals stood at ~0.7% of total assets (based on fair market value) as of June 2026, unchanged from the prior quarter.
Risks & headwinds
Management noted that all forward-looking statements carry inherent risk, and future results are highly likely to vary materially from expected outcomes. No specific additional operational risks, credit risks, market risks, or operational failures were discussed in detail during the call.