Golub Capital BDC, Inc.

Adjusted net income per share was $0.22 for the quarter, versus an $0.18 per share loss last quarter. Adjusted NII per share was $0.34, flat sequentially, and adjusted NII ROE was 9.5%; adjusted ROE was 6.2%. Adjusted net realized and unrealized losses were $0.12 per share, improving from $0.52 per share last quarter. NAV per share declined to $14.25 from $14.35, and the company paid a $0.33 per share distribution that was fully covered by adjusted NII. Investment income yield was 9.9% annualized, borrowing costs were 5.3% annualized, and net investment spread widened to 4.6%. Nonaccruals were 1.9% of fair value, and net debt-to-equity leverage ended at 1.23x. Looking ahead, the board declared another $0.33 per share distribution for the fourth fiscal quarter of 2026; management did not provide formal next-quarter EPS guidance. Liquidity ended at approximately $2 billion, including cash and undrawn commitments, and the company said that provides more than 1.3x coverage of unfunded commitments and upcoming note maturities.

David Golub framed the quarter as better than last quarter but still below the firm’s long-run standard, saying the results were “better than it looks” because the losses came mainly from a small number of junior debt and equity positions rather than the core debt portfolio. He emphasized that GBDC remains in a credit cycle with elevated stress, and said he expects industry-wide “bumpiness” and greater dispersion between managers. He was constructive on the market backdrop, saying direct lending has shifted more lender-friendly and that GBDC is positioned to benefit through first-lien focus, early problem-credit identification, and disciplined underwriting.

Chris Ericson said net investment spread widened modestly to 4.6% annualized as investment income yield rose to 9.9% and borrowing costs stayed at 5.3%. He highlighted a strong liquidity position of about $2 billion and said this covered more than 1.3x of unfunded commitments and upcoming 2026 and 2027 note maturities. He also noted the May issuance of $500 million in 5-year unsecured notes swapped to SOFR plus 218 basis points, and said the revolver maturity was extended to July 2031 with approximately $2 billion of total commitments and an accordion up to $3 billion.

Analysts focused on capital allocation, credit deterioration, software exposure, and dividend policy. Management said slower new investing this quarter reflected the trade-off between share repurchases, modest deleveraging, and new originations, and that higher expected payoffs should create more flexibility ahead. On software, David Golub said AI is a real and continuing factor, but GBDC’s portfolio has managed exposure because it emphasizes embedded, mission-critical enterprise software; he said the internal review found less than 10% of software holdings at elevated AI risk and the third-party review found fewer than 3%. On the dividend, he said higher base rates and wider spreads help, but policy remains a balance between shareholder payout consistency and steady NAV.