Capital Southwest (CSWC) Q4 2025 earnings summary

Executive summary

• Investment portfolio grew 21% year-over-year to $1.8 billion as of March 31, 2025, with improved debt quality and reduced non-accruals to 1.7%.

• Pre-tax net investment income for Q4 2025 was $28.5 million ($0.56/share); adjusted NII was $31.3 million ($0.61/share), excluding $2.8 million in one-time CEO departure expenses.

• Paid $0.58/share regular and $0.06/share supplemental dividend for Q4; total FY25 dividends were $2.54/share, with regular dividend increased to $2.31/share for FY25.

• Received a second SBIC license from the SBA in April 2025, expanding lending capacity.

• Affirmed BBB- ratings and upgraded secured debt to BBB+.

Financial highlights

• FY25 total investment income was $204.4 million, up 15% from FY24.

• NAV per share was $16.70 at March 31, 2025.

• Dividend coverage was 110% for the trailing 12 months.

• Regulatory debt-to-equity ratio ended at 0.89x.

• Cash and cash equivalents stood at $43.2 million at quarter end.

Outlook and guidance

• Board declared a regular dividend of $0.58 and a supplemental dividend of $0.06 per share for Q1 FY26, with intent to continue quarterly supplemental dividends based on UTI and realized gains.

• Management expects continued strong portfolio performance, ongoing equity capital raises, and run-rate operating leverage to decline to 1.4%-1.5% by next fiscal year-end.

• Anticipate $125–$150 million in originations next quarter, with fewer but higher-quality deals.