- Gladstone Investment Corporation (GAIN) reported QQ2 2025 results with total investment income of $22.6 million and adjusted net investment income (NII) of $8.9 million, or $0.24 per share, aligning with prior-quarter per-share performance despite higher non-cash costs. Revenue rose 6.4% year over year (YoY) but declined 1.34% quarter over quarter (QoQ); net income was $15.48 million, flat to positive QoQ, and EPS stood at $0.42. The quarter featured a meaningful realized gain on the exit of Nth Degree (~$42.3 million) and ongoing use of supplemental distributions tied to capital gains from exits.
- The balance sheet remains robust with substantial liquidity and low leverage. As of the report, about $160 million was available on a $200 million credit facility, and asset coverage was a comfortable 229.3%, well above the required 150%. The company maintains a disciplined balance between deploying capital in new portfolio opportunities and preserving income-producing assets to support monthly distributions (currently $0.08 per share) plus a $0.70 per share supplemental distribution paid in October. NAV per share declined to $12.49 from $13.01 due largely to distributions and some net unrealized depreciation, partially offset by realized gains and investment income.
- Management remains constructive on the operating environment, signaling a robust deal pipeline, favorable M&A liquidity, and an ongoing commitment to equity/debt deployment that supports current income with upside from capital appreciation. The company also indicated a potential for capital-raising activity (ATM program; long-term capital instruments) to fund growth while maintaining liquidity and flexibility. Investors should monitor portfolio non-accruals, leverage metrics, and cadence of supplemental distributions in light of ongoing exits and overall market valuations.