Prospect Capital ( (PSEC) ) has released its Q4 earnings. Here is a breakdown of the information Prospect Capital presented to its investors.
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Prospect Capital Corporation is a business development company that primarily lends to and invests in middle-market privately-held companies, aiming to generate both current income and long-term capital appreciation. In its latest earnings report for the fiscal year ending June 30, 2025, Prospect Capital reported a decline in net investment income and net asset value per common share compared to the previous year. The company recorded a net investment income of $79 million for the quarter, a decrease from $102.9 million in the same quarter last year, and a net loss applicable to common shareholders of $226.4 million.
Key financial metrics showed a decrease in net asset value per common share to $6.56 from $8.74 a year ago, and total assets fell to $6.8 billion from $7.9 billion. Prospect Capital has been focusing on optimizing its portfolio by increasing its investment in first lien senior secured middle-market loans and reducing exposure to second lien loans and subordinated structured notes. The company also reported successful exits from its real estate investments, with a significant unrealized gain in its real estate property portfolio.
Prospect Capital’s strategic focus includes enhancing portfolio company performance and utilizing its revolving credit facility efficiently. Despite the challenges, the company has declared monthly cash distributions to common shareholders for the upcoming months, maintaining its commitment to returning value to shareholders.
Looking ahead, Prospect Capital’s management remains focused on its core investment strategy in middle-market lending while continuing to optimize its asset portfolio. The company aims to navigate the current economic environment by leveraging its diversified funding profile and strategic asset rotation.