Great Elm Capital Corp’s Record-Breaking Earnings Call

Great Elm Capital Corp ((GECC)) has held its Q2 earnings call. Read on for the main highlights of the call.

Great Elm Capital Corp’s recent earnings call painted a picture of a strong quarter, marked by record investment income, notable NAV growth, and a thriving CLO platform. Despite facing challenges such as nonaccrual investments and exposure to volatile markets, the positive developments significantly overshadowed the negatives, reflecting a robust financial performance.

Record Total Investment Income

Great Elm Capital reported its highest total investment income in history, reaching $14.3 million for Q2 2025. This represents a 14% increase from the previous quarter and nearly 50% growth year-over-year, underscoring the company’s impressive financial trajectory.

Net Asset Value Growth

The company’s NAV saw a substantial increase of over $0.60 per share from the prior quarter, reaching $12.10 per share as of June 30, 2025. This growth was driven by unrealized gains on investments and net investment income that exceeded quarterly distribution by 38%.

Significant Increase in Net Investment Income

Net investment income surged approximately 29% sequentially, with NII per share climbing to $0.51 compared to $0.40 in the previous quarter. This increase highlights the company’s effective income-generating strategies.

Strong CLO Platform Performance

The CLO platform played a crucial role in the 14% quarterly increase in total investment income, reflecting strategic enhancements in the company’s portfolio.

Positive Investment Returns

The investment in CW Opportunity 2 LP, associated with CoreWeave, generated an impressive IRR of nearly 200% since its inception, showcasing the company’s adept portfolio management.

Nonaccrual Investments in Maverick Gaming and Del Monte

Investments in Maverick Gaming and Del Monte were placed on nonaccrual status, though they comprise less than 3% of the portfolio’s fair value, minimizing their impact on overall performance.

Temporary Income Fluctuations Expected

The company anticipates a decrease in third-quarter NII per share due to uneven cash flow from the expanding CLO platform, but expects a rebound in the fourth quarter.

Exposure to Volatile CoreWeave Investment

While the CoreWeave investment has shown volatility since its IPO, it remains a positive contributor to Great Elm Capital’s portfolio.

Forward-Looking Guidance

Great Elm Capital’s forward-looking guidance remains optimistic, with expectations of continued growth in investment income and NAV. The company anticipates overcoming third-quarter income fluctuations and achieving a significant rebound in the fourth quarter. With a focus on secured debt positions and high-quality, cash-generating assets, Great Elm Capital aims to deliver sustainable returns and value to shareholders.

In summary, Great Elm Capital Corp’s earnings call highlighted a strong financial performance, with record investment income and significant NAV growth. Despite some challenges, the company’s strategic focus on high-quality investments and a robust CLO platform positions it well for future success.