Executive Summary
Gladstone Investment Corporation (GAINL) delivered a solid first quarter of 2026 with robust gross margins and a positive bottom-line, supported by strong operating income and EBITDA notwithstanding meaningful debt service and one-time items. Revenue of $23.54 million generated a gross profit of $19.64 million (gross margin 83.41%), and the company reported net income of $7.77 million ($0.2106 per share). EBITDA stood at $17.18 million, with an EBITDARatio of 0.73x and an operating income of $17.18 million, underscoring earnings quality from its asset-management and middle-market credit portfolio. However, total other income/expenses net was negative at $9.41 million, contributing to a pre-tax income of $7.77 million and a net income that reflects the impact of non-operating items.
Operating cash flow was negative at $50.18 million for the period, driven by working capital movements and a notable negative line item for other non-cash charges totaling $51.23 million. The company financed activity through $40.38 million of net financing cash inflows, resulting in a net decrease in cash of $9.80 million to end the period with $5.36 million in cash on hand. From a balance-sheet perspective, total assets were about $1.054 billion, with short-term debt of $456.36 million and equity of $485.30 million, yielding a net debt position of roughly $451.00 million and an implied leverage near 0.93x. The liquidity profile is modest (cash balance low relative to current liabilities), which is typical for a collateralized lending-portfolio vehicle but highlights ongoing financing needs and the sensitivity to debt markets.
Overall, the QQ1 2026 results reflect a resilient earnings framework supported by a high gross margin and positive net income, offset by leverage intensity and cash-flow dynamics driven by the portfolio and financing structure. Management commentary is not available in the provided transcript snapshot, which limits the inclusion of forward-looking guidance or portfolio-color from the call.
Key Performance Indicators
QoQ: -3.87% | YoY:2 836.92%
QoQ: -56.52% | YoY:219.09%
QoQ: 116.33% | YoY:217.00%
Key Insights
Revenue: $23.54 million; YoY +6.15%; QoQ -8.54%
Gross Profit: $19.64 million; YoY -8.53%; QoQ +17.18%; Gross Margin ~83.41%
Operating Income: $17.18 million; YoY +2,836.92%; QoQ -3.87%
EBITDA: $17.18 million; EBITDARatio ~0.73x; Operating Margin ~0.73x
Net Income: $7.77 million; YoY +219.09%; QoQ -56.52%
EPS (Diluted): $0.2106; YoY +217.00%; QoQ +116.33%
Liquidity and Capital Structure: Cash $5.36 million; Short-term debt $456.36 million; Total debt $456.36 million; Net debt $451.00 million; Tot...
Financial Highlights
Revenue: $23.54 million; YoY +6.15%; QoQ -8.54%
Gross Profit: $19.64 million; YoY -8.53%; QoQ +17.18%; Gross Margin ~83.41%
Operating Income: $17.18 million; YoY +2,836.92%; QoQ -3.87%
EBITDA: $17.18 million; EBITDARatio ~0.73x; Operating Margin ~0.73x
Net Income: $7.77 million; YoY +219.09%; QoQ -56.52%
EPS (Diluted): $0.2106; YoY +217.00%; QoQ +116.33%
Liquidity and Capital Structure: Cash $5.36 million; Short-term debt $456.36 million; Total debt $456.36 million; Net debt $451.00 million; Total assets ~$1,053.91 million; Equity $485.30 million; Leverage ~0.93x (Debt/Equity)
Cash Flow: Operating cash flow -$50.18 million; Investing cash flow -$62.84 million; Financing cash flow +$40.38 million; Net change in cash -$9.80 million; Free cash flow -$50.18 million
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
23.54M |
6.15% |
-8.54% |
| Gross Profit |
19.64M |
-8.53% |
17.18% |
| Operating Income |
17.18M |
2 836.92% |
-3.87% |
| Net Income |
7.77M |
219.09% |
-56.52% |
| EPS |
0.21 |
217.00% |
116.33% |
Management Commentary
Transcript highlights not provided in the data set. No management quotes or guidance from an earnings call are available in the supplied materials. As a result, quotes and theme-based synthesis from the call could not be included. If you can share the transcript or key excerpts, I will extract and categorize quotes by theme (strategy, operations, market conditions) with context and significance.
Forward Guidance
No formal forward guidance is present in the supplied data. Absent explicit management targets, the outlook should be inferred from the quarter’s earnings mix and industry dynamics. Key considerations include: (1) sensitivity of net investment income to ongoing credit performance and portfolio yields, (2) financing costs and debt maturing profile given the substantial short-term debt, and (3) potential changes in rate expectations affecting borrower refinancing and the cost of capital. A prudent view is to monitor: credit quality metrics (non-performing investments, defaults, and loss provisions), portfolio yield as interest rates normalize, leverage management (debt-to-equity and net debt), and liquidity reserves. If management signals tighter underwriting standards or portfolio diversification improvements, that would be supportive of stability in NII and risk-adjusted returns.