Executive Summary

Solid “good boring” quarter: Adjusted NII per share was $0.39 and GAAP EPS was $0.34; NAV per share dipped 4¢ to $15.00 as unrealized losses on a small tail of underperformers offset equity gains and FX gains .
Versus estimates: EPS (primary/NII) was essentially in line (0.38 actual vs 0.382 consensus*), while revenue (total investment income) beat ($218.34M actual vs $215.47M consensus*) .
Credit quality remained strong: nonaccruals were ~0.60% of fair value, with ~90% of the book in the top two internal ratings; net investment spread held at 4.9% as lower cost of debt offset modest yield compression .
Capital actions and liquidity: $34.3M of accretive buybacks in Q3, $950M liquidity post-quarter-end actions (cash + revolvers), revolver repriced lower and GBDC 3 2022 securitization redeemed to further reduce borrowing costs .
Near-term catalysts: stable dividend coverage at $0.39, spread stabilization, selective origination uptick, and liability-side optimization; watch leverage (1.26x net at Q3) within the 0.85–1.25x target range and unrealized depreciation on underperformers .

What Went Well and What Went Wrong

What Went Well

“Good boring” quarter with resilient fundamentals: “Adjusted NII per share was $0.39… Adjusted net income per share was 34¢” (CEO) .
Spread stability despite compression: Investment income yield declined ~20 bps to 10.6%, but cost of debt fell ~20 bps to 5.7%, keeping net investment spread stable at 4.9% (CFO) .
Credit quality: Nonaccruals ~0.60% of fair value, “well below the BDC peer industry average,” and nearly 90% of portfolio in top two ratings (COO) .

What Went Wrong

Valuation headwinds: Adjusted net realized and unrealized loss of ($0.05) per share driven by underperformance in certain portfolio companies (primarily equity marks), partly offset by FX gains .
NAV down sequentially: NAV per share decreased to $15.00 from $15.04 due to unrealized depreciation .
Higher leverage within range: GAAP debt-to-equity, net rose to 1.26x at Q3 (avg 1.21x) amid muted repayments; investor questions focused on deleveraging prospects .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Total Investment Income ($USD Millions)	$220.700	$213.892	$218.344
Net Investment Income per Share ($)	$0.37	$0.37	$0.38
Adjusted Net Investment Income per Share ($)	$0.39	$0.39	$0.39
GAAP Earnings Per Share ($)	$0.42	$0.30	$0.34
Adjusted Earnings Per Share ($)	$0.42	$0.30	$0.34
Net Asset Value per Share ($)	$15.13	$15.04	$15.00

Estimates vs Actual (Q3 2025)

Values with asterisks are retrieved from S&P Global

Metric	Estimate*	Actual	Surprise
Primary EPS ($)	$0.382*	$0.38	($0.002)
Revenue / Total Investment Income ($USD)	$215.465M*	$218.344M	+$2.879M (+1.3%)*

Margins and Yield

Metric	Q1 2025	Q2 2025	Q3 2025
Investment Income Yield (%)	11.2%	10.8%	10.6%
Cost of Debt (%)	6.2%	5.9%	5.7%
Net Investment Spread (%)	5.0%	4.9%	4.9%

Segment / Asset Mix (% of fair value)

Investment Type	Q1 2025	Q2 2025	Q3 2025
Senior Secured	5.5%	5.4%	5.4%
One Stop	86.8%	86.8%	86.9%
Junior Debt	0.7%	0.7%	0.7%
Equity	7.0%	7.1%	7.0%

Key KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Nonaccruals (% of portfolio at FV)	0.50%	0.70%	0.60%
Net Leverage (Debt-to-Equity, net)	1.19x	1.16x	1.26x (avg 1.21x)
Investment Portfolio Fair Value ($B)	$8.685	$8.621	$8.962
Portfolio Companies (count)	386	393	401
New Investment Commitments ($MM)	$1,188.1	$298.95	$556.812
Dividend per Share ($)	$0.48 paid; $0.39 declared	$0.39 paid/declared	$0.39 paid/declared

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Regular Quarterly Dividend ($/share)	Q3 2025	$0.39	$0.39 declared, payable 9/29/25	Maintained
Leverage Target Range (Net)	Ongoing	0.85–1.25x (management framework)	Reiterated; Q3 at 1.26x end-period, 1.21x average	Maintained framework
Cost of Debt Outlook	Q4 CY2025 onward	N/A	Expected modest reduction from revolver repricing and GBDC 3 2022 redemption	Lower expected
Revenue/Earnings Guidance	Q3/FY25	None provided	None provided	N/A

Note: Company does not provide formal revenue/EPS guidance; management discussed levers to support dividend coverage and lower borrowing costs .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Macro/Tariffs Uncertainty	Emphasized policy uncertainty; tariff risk review; portfolio largely insulated; sector/name-by-name monitoring	CEO noted “bad consensus forecast,” economy resilience; continued caution; maintain resilient strategy	Ongoing monitoring; cautious tone
Default Cycle	Elevated defaults (~4.5% BSL) and dispersion among managers; focus on early intervention	“Protracted credit cycle to become even more protracted”; winners vs “whiners”	Stress persists; dispersion intensifying
Deal/M&A Environment	Muted; selective origination; defend incumbencies; expectation for slow improvement later in year	Expect slow improvement rest of year, faster next year; humility on timing	Gradual improvement expected
Spread Dynamics	Compression across markets; middle market more insulated; yields fell; cost of debt declined	Yield -20 bps; cost of debt -20 bps; spread stable at 4.9%	Stabilizing spreads
Dividend Coverage/Levers	100% coverage; levers include lower revolver pricing, variable liabilities, potential modest leverage increase	Reiterated coverage and balance-sheet optimization	Maintained coverage
Credit Quality	Nonaccruals 0.5–0.7%; ~90% in top ratings; strong diversification	Nonaccruals ~0.6%; ~90% top ratings; tail of underperformers	Stable/strong
AI/Software	Distinguish winners/losers; deeper expertise needed	No new developments beyond continued monitoring	Watch list topic

Management Commentary

CEO: “GBDC had another good boring quarter… Adjusted NII per share was $0.39… Adjusted net income per share was 34¢” .
CEO on outlook: “I expect what is already a protracted credit cycle to become even more protracted… We expect… very substantial dispersion in credit manager performance… the same winners to keep winning” .
COO: “Nonaccrual status remained very low at 60 basis points… earnings were supported by historically high base rates… decline in borrowing costs largely offset the sequential decline in investment income yield” .
CFO: “GBDC’s investment income yield fell 20 basis points to 10.6%… cost of debt decreased 20 basis points to 5.7%… net investment spread remained stable at 4.9%… liquidity approximately $950,000,000” .
Dividend: Board declared regular $0.39 dividend; annualized 10.4% on NAV .
Capital actions: ~$34.3M buybacks at $13.99/share; Rabbi Trust purchased $12.4M of shares in Q3 .

Q&A Highlights

Leverage trajectory: Management does not anticipate deliberate deleveraging; repayments in pipeline; remains focused on operating within target range (0.85–1.25x) despite end-period 1.26x .
Spread compression dynamics: Private credit spreads “stickier” than BSL; core middle market insulated but not immune; larger market responds faster due to BSL refinancing .
Tariff exposure subset: Sub-10% of portfolio identified for further study; expected manageable impacts; greater concern is second-order macro effects .
Refinancing/repricing: Pendulum shifting to more lender-friendly; less concern about spread-tightening refis near-term .
Liability optimization: Revolver repricing benefits and redemption of legacy securitizations expected to further lower borrowing costs .

Estimates Context

Q3 EPS (primary/NII) was essentially inline (0.38 actual vs 0.382 consensus*); Q3 revenue (total investment income) beat modestly ($218.34M actual vs $215.47M consensus*) .
Implications: Consensus may maintain NII near $0.39 given spread stability and liability-side cost declines; revenue could trend modestly higher with selective origination and portfolio growth despite ongoing macro cross-currents .
Note: Values retrieved from S&P Global.*

Key Takeaways for Investors

Defensive execution: Stable net investment spread and low nonaccruals validate underwriting discipline; diversification limits idiosyncratic risk .
Liability-side tailwind: Revolver repricing and securitization redemption support lower cost of debt and dividend coverage resilience .
Portfolio growth with selectivity: Commitments rose to $556.8M; leadership as sole/lead lender in 88% of transactions sustains pricing power .
Watch leverage and NAV: End-period net leverage above target ceiling; NAV down 4¢ on unrealized marks—monitor trajectory as repayments and originations normalize .
Macro cross-currents: Management expects a prolonged credit cycle; prioritize platforms with demonstrated early detection/intervention and sector expertise (e.g., software) .
Trading setup: Modest beat on revenue and inline NII, plus dividend continuity and cost-of-debt catalysts, should anchor near-term; risk remains in mark-to-market on tail credits and macro shocks .
Longer-term thesis: Scale, core middle-market focus, and relationship incumbency position GBDC to capture increased activity as M&A improves and dispersion benefits strong underwriters .

Footnote: *Values retrieved from S&P Global.

GOLUB CAPITAL BDC, Inc. (GBDC)·Q3 2025 Earnings Summary