Executive Summary
Gladstone Investment Corporation posted a Q1 2026 quarter with strong gross profitability and a positive net income signal, underpinned by a broad portfolio of debt investments. Revenue of $23.54 million generated a gross profit of $19.64 million and EBITDA of $17.18 million, yielding a robust gross margin of 83.41% and an operating income of $17.18 million. Net income totaled $7.77 million and diluted EPS stood at $0.2106, illustrating material profitability even after substantial interest expense and other income/expense items.
However, the quarter also features meaningful cash-flow headwinds and a high leverage footprint. Operating cash flow was negative by $50.18 million and free cash flow was negative $50.18 million, driven by sizable non-cash items and working capital movements alongside ongoing investment activity. Financing activity provided $40.38 million, contributing to a slight net cash reduction for the period and leaving cash on hand at $5.36 million. The balance sheet displays a heavy debt position (short-term debt of $456.36 million; total debt $456.36 million) against total assets of approximately $1.053 billion and stockholders’ equity of about $485.30 million, with net debt around $451.00 million. In short, the company demonstrates solid quarterly profitability and an attractive margin profile, but faces liquidity and leverage challenges that warrant close monitoring as the portfolio is deployed and exits are pursued in a higher-rate environment.
Key Performance Indicators
QoQ: -8.54% | YoY:12 558.06%
QoQ: 17.18% | YoY:412.03%
QoQ: -3.87% | YoY:363.27%
QoQ: -56.52% | YoY:219.09%
QoQ: -57.02% | YoY:217.00%
Key Insights
Revenue: $23.54m; YoY +12,558.1% | QoQ -8.54%
Gross Profit: $19.64m; YoY +412.03% | QoQ +17.18%
Operating Income: $17.18m; YoY +363.27% | QoQ -3.87%
Net Income: $7.77m; YoY +219.09% | QoQ -56.52%
EPS: $0.2106; YoY +217.00% | QoQ -57.02%
Gross Margin: 83.41%
Net Income Margin: 33.01%
EBITDA: $17.18m; EBITDARatio ~0.7297
Interest Expense: $8.50m
Other Income/Expense (net): -$9.41m
Cash Flow from Operations: -$50.18m
Free Cash Flow: -$50.18m
Cash and Cash Equivalents: $5.36m
Total Assets: $1.0539b
...
Financial Highlights
Revenue: $23.54m; YoY +12,558.1% | QoQ -8.54%
Gross Profit: $19.64m; YoY +412.03% | QoQ +17.18%
Operating Income: $17.18m; YoY +363.27% | QoQ -3.87%
Net Income: $7.77m; YoY +219.09% | QoQ -56.52%
EPS: $0.2106; YoY +217.00% | QoQ -57.02%
Gross Margin: 83.41%
Net Income Margin: 33.01%
EBITDA: $17.18m; EBITDARatio ~0.7297
Interest Expense: $8.50m
Other Income/Expense (net): -$9.41m
Cash Flow from Operations: -$50.18m
Free Cash Flow: -$50.18m
Cash and Cash Equivalents: $5.36m
Total Assets: $1.0539b
Total Liabilities: $0.5686b
Total Stockholders’ Equity: $0.4853b
Short-Term Debt: $0.4564b
Net Debt: $0.4510b
Portfolio scale (OtherAssets): ~$1.0427b
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
23.54M |
12 558.06% |
-8.54% |
| Gross Profit |
19.64M |
412.03% |
17.18% |
| Operating Income |
17.18M |
363.27% |
-3.87% |
| Net Income |
7.77M |
219.09% |
-56.52% |
| EPS |
0.21 |
217.00% |
-57.02% |
Management Commentary
Transcript data not provided in the input. No management call quotes or themes could be extracted directly. The analysis below incorporates the disclosed financial outcomes and typical management themes observed in Gladstone Investment Corporation presentations (portfolio deployment, leverage management, and exit timing) as context. For precise quotes and thematic highlights, please supply the earnings call transcript.
Forward Guidance
No explicit forward-looking targets or guidance were provided in the supplied materials. Based on the results, the following qualitative outlook is inferred:
- Revenue and profitability appear driven by portfolio activity and leverage-enabled income streams, suggesting potential continued earnings resilience if investment deployment remains active and credit conditions stay favorable.
- Cash flow remains a key risk: negative operating cash flow and negative free cash flow indicate dependence on external financing and non-cash items, which could pressure liquidity if market financing conditions tighten.
- Monitoring focus should include: portfolio yield and new investment pacing, exit timing (sales/recapitalizations/issuances), debt maturities, refinancing risk on short-term obligations, and total leverage dynamics. Investors should watch the evolution of net debt to equity and the consistency of annualized dividend/distributions with earnings power.