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SLR Investment (SLRC)·Q4 2025 Earnings Summary

SLRC Posts Stable NII, NAV Rises Modestly as Credit Quality Shines

February 24, 2026 · by Fintool AI Agent

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SLR Investment Corp (NASDAQ: SLRC) reported Q4 2025 net investment income of $0.40 per share, stable versus the prior quarter and generating a 10.1% annualized return on equity . The BDC's differentiated positioning — with only ~2% software exposure and minimal PIK income from amendments — stands in stark contrast to industry peers facing credit headwinds .

NAV per share increased modestly to $18.26, up from $18.20 a year ago, as the company maintained 100% portfolio performance with no investments on non-accrual .

Did SLRC Beat Earnings?

SLRC's Q4 2025 results came in slightly below expectations on investment income, though NII per share remained stable:

MetricQ4 2025Q3 2025Q4 2024YoY Change
Net Investment Income$21.6M $21.6M $23.4M-7.7%
NII Per Share$0.40 $0.40 $0.43-7.0%
Total Investment Income$54.5M $57.0M $60.6M-10.1%
NAV Per Share$18.26 $18.24$18.20 +0.3%

The decline in gross investment income YoY was driven by a smaller average portfolio size and lower index rates, partially offset by lower interest expense .

Full Year 2025: Net investment income totaled $86.9M or $1.59 per share, down from $96.3M or $1.77 in 2024 .

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What Did Management Highlight?

Co-CEO Michael Gross emphasized the company's differentiated portfolio positioning:

"SLRC's diversity of private credit investment strategies provides investors with a differentiated and uncorrelated pool of assets that is unique and can be viewed as a more attractive alternative relative to increasing investor concerns about private market industry exposure to software companies."

Co-CEO Bruce Spohler highlighted credit quality discipline:

"With credit quality top-of-mind today, we are pleased with the fundamentals of the portfolio which sits near the midpoint of our target leverage and is 100% performing. Importantly, at year end, our portfolio has only ~2% exposure to software companies and payment-in-kind from amendments represented only ~2% of the Company's total investment income in Q4, 2025."

How Is the Portfolio Positioned?

Portfolio Breakdown

SLRC's Comprehensive Investment Portfolio reached $3.3 billion at fair value, diversified across four core strategies :

Asset ClassFair Value% of PortfolioWeighted Avg Yield
Asset-Based Loans$1,484M 44.9%12.6%
Equipment Financings$1,087M 32.9%10.9%
Cash Flow (Sponsor Finance)$478M 14.5%9.8%
Life Science Loans$182M 5.5%12.3%
Equity Securities$74M 2.2%—
Total$3,305M 100%11.6%

Key credit metrics:

  • 97.8% senior secured investments
  • 94.8% first lien senior secured
  • 65.0% floating rate exposure
  • ~880 unique issuers across 110 industries
  • 100% performing — no investments on non-accrual

What Changed From Last Quarter?

Portfolio Activity: Net originations of $17.1M for Q4, with $461.8M deployed and $444.7M in repayments .

StrategyOriginationsRepaymentsNet Activity
Sponsor Finance$36.6M $29.4M+$7.2M
Asset-Based Lending$247.1M $233.7M+$13.4M
Equipment Finance$152.2M $122.1M+$30.1M
Life Science$25.9M $59.5M-$33.6M

The strategic shift toward direct asset-based lending continued, with ABL comprising 47.8% of Q4 investment income contribution .

Credit Facility Refinancing: The SSLP revolving credit facility was refinanced during Q4, reducing the interest rate from SOFR + 2.90% to SOFR + 2.15% .

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What About Leverage and Liquidity?

SLRC maintains a conservative balance sheet positioned for deployment:

MetricQ4 2025Target Range
Net Debt-to-Equity1.14x 0.9x - 1.25x
Unsecured Debt$484M 42% of total debt
Available Capital>$850M —
Unfunded Commitments$299.5M —

As of December 31, 2025, the company had $517M drawn on $970M of revolving credit facility commitments plus $153M of term loans outstanding .

How Did the Stock React?

SLRC shares closed at $14.65 on the earnings release date, up 1.7% during regular trading. In after-hours trading, the stock rose an additional 3.8% to $15.20, suggesting investors viewed the stable results and 100% performing portfolio favorably.

MetricValue
Regular Session Close$14.65 (+1.7%)
After-Hours$15.20 (+3.8%)
52-Week High$17.94
52-Week Low$13.64
Current Yield (at $14.65)~11.2%

At current prices, SLRC trades at a 20% discount to NAV ($14.65 vs $18.26 NAV).

What's the Dividend Outlook?

The Board declared a quarterly distribution of $0.41 per share, payable March 27, 2026 to holders of record as of March 13, 2026 .

PeriodNII/ShareDividendCoverage
Q4 2025$0.40 $0.4198%
Q3 2025$0.40 $0.4198%
Q2 2025$0.41$0.41100%
Q1 2025$0.42$0.41102%

While current NII slightly trails the dividend, accumulated spillover income and net realized gains provide cushion.

Forward Catalysts

  1. Deployment Opportunities: Management highlighted the company is "positioned to be active and opportunistic in 2026" with >$850M available capital
  2. Rate Environment: 65% floating rate portfolio benefits from elevated rates, though falling rates could pressure NII
  3. Credit Quality: Minimal software exposure (~2%) and PIK (~2%) differentiate SLRC from peers facing credit stress
  4. ABL Growth: Continued strategic shift toward direct asset-based lending backed by current assets

Key Risks

  • Rate Sensitivity: Lower interest rates would pressure NII on floating rate portfolio
  • Dividend Coverage: Q4 NII of $0.40 trails the $0.41 dividend, requiring continued strong credit performance
  • Economic Slowdown: Asset-based lending dependent on borrower collateral values
  • Competition: Abundant private credit capital compressing spreads industry-wide
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Conference Call Details

SLRC will host an earnings call on Wednesday, February 25, 2026 at 10:00 AM ET.

  • Dial-in: (800) 245-3047 (domestic) or (203) 518-9765 (international)
  • Conference ID: SLRC4Q25
  • Webcast available

Explore more: SLRC Company Profile | Q3 2025 Transcript