Gladstone Capital : Investor Presentation – March 31, 2026

Published: 2026-05-11 13:45:08 ET GLAD

Published on 05/11/2026 at 01:45 pm EDT

Investing Since 2001

Nasdaq: GLAD

(as of 03/31/2026)

Financial Results

Net Investment Income Per Share: $0.52 up from $0.50 of prior quarter

Net Asset Value Per Share: $21.36 (+$0.23 over prior quarter-end)

LTM ROE: 9.6% on net investment income

NII dividend coverage of 111% with annualized dividend yield ($1.80/share) of 8.43% on NAV

Portfolio

Total investments at fair value of $906.8 million across in 55 companies

Funded new investments of $43.6 million including 3 new investments and received repayments of $46.3 million

Weighted avg. debt yield of 11.8% which was down 40bp largely on lower average SOFR rate (1)

Asset mix unchanged with 70% in first-lien loans, 90% in secured loans and 10% equities

Maintained LMM focus with weighted average borrower EBITDA of $10.5 million(2) and average investment by obligor of $16.8 million at cost

Three obligors on non-accrual representing $13.0 million or 1.6% of debt investments (fair value)

PIK income declined to 7.4% of investment income and no software sector exposure

Debt & Liquidity

Outstanding liabilities of $407 million; quarter-end debt-to-equity ratio of 0.84x, average debt interest rate of 5.84% and with no debt maturities until May 2027

Current investment capacity in excess of $150 million including undrawn bank lines

Recent Events

Declared regular distribution of $0.15/share per month for April, May and June ($0.45 total)

Post quarter end, funded two new investments totaling $45.2 million of senior secured debt

1 Actual yields earned over the life of investments could be materially different from the yields presented herein.

2 Both exclude certain investments on the watchlist and investments with TTM EBITDA greater than $25 million.

Lending focused on growth-oriented lower middle market businesses

Experienced, long-tenured leadership and investment team

Proprietary sourcing and execution model with high degree of selectivity

Diversified portfolio of largely senior first lien loans to PE backed companies

Active portfolio management and risk monitoring

Equity like origination, underwriting and investment management to optimize investment results and team incentives aligned with shareholders

Background:

Founded in 2001 with the purpose of making loans to lower middle market U.S. businesses, Gladstone Capital's investment team is exclusively focused on this segment of the private capital market

Gladstone Capital is funded through publicly traded common stock (Nasdaq: GLAD) and is leveraged via capital markets including unsecured senior note issues, private preferred stock issue and a bank revolving credit facility

Managed by Gladstone Management Corporation, an SEC registered investment adviser managing $4.0+ billion in assets across four publicly traded yield-oriented funds

Investment Strategy:

Target direct originated secured debt investments in growth-oriented companies with revenue visibility and free cash flow to support organic deleveraging and where capital structure flexibility and lender support are valued

Target companies with operating cash flow (EBITDA) of $3-25 million and investments of $8-40 million, typically below the minimum investment threshold of most large-scale private capital funds

Majority of investments are backed by private equity sponsors (~82% of the portfolio at 03/31/26), which provide governance oversight, strategic sector insight, experience managing leveraged capital structures and access to additional investment capacity to support growth

Deal Sourcing/Diligence/Risk Management:

Leverage experienced origination team to source, structure, undertake "equity level" diligence and agent loans to control lender protections including financial maintenance covenants and remedies

Highly selective screening process where under 5% of deals reviewed ultimately close and commit senior investment resources to pro-actively manage investments via ongoing board level participation to mitigate credit losses

All investments undergo ongoing senior management review, quarterly third-party expert investment valuations in support of SEC filed financials which are subject to quarterly oversight by Gladstone Capital's audit committee and independent board members

Why focus on lower middle market ("LMM") companies

Greater industry diversity and more consistent flow of growth-oriented investment opportunities as founder or family businesses seek liquidity and PE firms attracted by the opportunity to professionalize and scale these businesses to generate equity appreciation

Lower cash flow purchase multiples in the LMM translate to reduced financial leverage, better asset collateral coverage, and the ability for lenders to structure and deliver a complete debt financing solution

Smaller investment threshold attracts less competition from larger private debt funds or commercial banks, supporting more attractive investment returns at lower relative leverage levels, often with lender-friendly documentation protections

LMM companies and PE Sponsors are more receptive to equity co-investments, offering opportunities to selectively participate in anticipated growth and equity appreciation

Proprietary origination and lead lender solution approach provide elevated diligence insight and management team access, leading to greater visibility and influence over strategy & risk mitigation

Trends Enhancing Opportunity for Non-Bank/Private Credit Lenders

PE Sponsors looking to scale LMM platform investments rely upon flexible financing solutions, often with limited amortization or requiring future funding commitments, which demand a more experienced and responsive lender capable of underwriting long-term equity strategies and agility to respond to changing conditions and new opportunities

Providing streamlined "one-stop" financing solutions accelerates transaction closings and simplifies future growth funding or facility modifications for the borrower

Shifting capital market conditions, regulatory or centralized credit controls or limited depth of commercial lending resources hamper commercial bank participation as cashflow lenders to the LMM PE sponsor community

Private Credit market increasingly concentrated by multi-billion-dollar firms prioritizing larger borrowers (>$25 million EBITDA) to align their investment capabilities with institutional capital deployment objectives and lower-fee structures

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LMM is a less competitive segment of the private credit market, offering a more attractive risk reward profile that aligns well with the flexibility of Gladstone Capital's non-bank investment platform

Originations/Portfolio Activity:

New investments totaled $43.6 million during the quarter and included three new PE Sponsored investments in the manufacturing and environmental services sectors.

Portfolio exits, amortization payments, and prepayments were $46.3 million and the fair value of the portfolio increased quarter-over-quarter due to asset appreciation.

Healthcare industry concentration declined and is expected to fall further with pending exits; notable uptick in precision manufacturing businesses related to aerospace and defense and domestic sourcing needs and no software exposure.

Portfolio Yield / Net Investment Income (NII):

Interest income for the period declined 2.9%, or $0.7 million quarter-over-quarter to $23.2 million as average earning assets rose 2.8%; however, the weighted average portfolio yield fell 40bps to 11.8% with lower average SOFR rates.

Total investment income rose by $1.5 million (6.0%) to $26.0 million, driven largely by $2.2 million higher other investment income, comprised of a $0.9 million prepayment fee and a $1.8 million dividend from an equity investment.

Total expenses rose by $0.9 million, with interest expenses declining $0.1 million, and net management fees increasing $0.9 million on reduced closing fee credits.

Net investment income for the quarter was $11.8 million or $0.52 per share and fully covered the $0.45 cash distributions.

Portfolio Performance and Valuation:

Our portfolio continues to perform well with modest leverage metrics and favorable liquidity. We ended the quarter with three non-earning debt investments (flat from prior quarter) representing 1.6% of debt investments at fair value.

Maintained our conservative asset mix with 90.0% of investments in secured loans, 70% in lower risk 1st lien loans and weighted average leverage across core proprietary loan portfolio of 4.0x.

PIK income for the quarter declined to $1.7 million or 7.4% of interest income.

Net realized losses were $0.6 million, however, unrealized gains rose to $4.8 million for the quarter, primarily concentrated in 3 positions.

Gladstone Capital Quarterly Net Investment

Despite buyout financing market volatility and significant repayment activity, LMM deal flow over the past year have lifted earning assets by $144 million or 18.9%.

Strong deal flow and healthy backlog of new investments are key to negate competitive pressures on spreads, leverage levers or the erosion of lender financing protections.

1st lien investments were 70% of the portfolio driven by recent debt position repayments.

87% of our loan portfolio is subject to floating rates with minimum SOFR floors.

We continue to make minority equity co-investments in approximately half of our new originations to selectively capitalize on the most attractive buyout opportunities.

The current portfolio valuation of $906.8 million represents 98.0% of cost as of 03/31/2026.

12/31/2024 3/31/2025 6/30/2025 9/30/2025 12/31/2025 3/31/2026

First Lien Debt

73.3%

71.0%

70.4%

72.4%

71.7%

69.5%

Second Lien Debt

15.9%

19.0%

19.2%

17.5%

18.9%

20.4%

Equity / Other

10.7%

10.0%

10.4%

10.0%

9.4%

10.1%

Consistent with GLAD's LMM focus, the core loan portfolio continues to represent companies with an average EBITDA of approx. $10.5 million and an average leverage attachment point of 4.0x EBITDA

Portfolio Metrics

*For the purposes of this presentation, certain investments have been excluded from the data used to develop the above analysis. Those exclusions include investments: (i) originated as Syndications; (ii) co-investments with GAIN; (iii) residual investments under $5 million; (iv) equity only investments; (v) investments with TTM EBITDA greater than $25 million; and (vi) three investments with a de minimis TTM EBITDA relative to total debt skewing weighted average leverage. Additionally, investment EBITDA and Leverage are weighted based on the size of the principal outstanding.

Portfolio Diversification Across 13 Industries - At 03/31/2026 Fair Value

Deal Source Composition -At 03/31/2026 Fair Value

Portfolio Characteristics As Of:

June 30, 2025

September 30, 2025

December 31, 2025

March 31, 2026

Total Portfolio - FV

751,260

859,124

902,912

906,844

# of Portfolio Companies

Average Investment Size - FV

14,731

15,620

16,721

16,488

Top 5 Investments % FV

25.3%

22.9%

23.9%

23.0%

WAVG Investment Yield**

12.8%

12.5%

12.2%

11.8%

1st Lien FV

529,149

622,371

647,576

630,527

2nd Lien FV

144,299

150,542

170,662

185,141

Equity / Other FV

77,812

86,211

79,599

91,176

Proprietary % of FV

99.5%

100.0%

Syndicated % of FV

0.5%

0.0%

Fixed Rate Debt % Cost

9.9%

13.1%

11.4%

13.4%

Variable Rate Debt % of Cost

90.1%

86.9%

88.6%

86.6%

Performing % FV (Debt)

95.9%

98.3%

98.4%

Non-Performing % FV (Debt)

4.1%

1.7%

1.6%

**Weighted average yield on interest bearing debt investments (excludes non-accruals and reserves on interest receivables) Note: $'s are in (000's)

Wings 'N More Restaurants LLC. is a proud

Texas tradition and restaurant chain that offers a diverse, value-oriented menu centered around the "buffalo style" chicken wing.

AXIOS INDUSTRIAL GROUP is a provider of scaffolding, insulation, coatings, surface preparation and specialty solutions for a broad range of industrial customers in support of turnaround, maintenance and capital projects.

Torrent Photonics Holdco LLC provides

an integrated suite of technologies to serve the security and defense, medical, industrial, semiconductor, commercial, and science and technology markets.

Pan-Am Dental Laboratory is a full-service manufacturer and distributor of high-quality custom dental products.

Engineering Manufacturing Technologies,

LLC is a precision manufacturer of close tolerance metal components used in defense, industrial, and other end markets and applications.

Encore Dredging Partners, LLC is a

premier mid-sized cutter suction and mechanical dredging services provider focusing on navigable waterways throughout the U.S.

HH-Inspire Acquisition, Inc. is a plastic

surgery and aesthetic center offering a comprehensive range of cosmetic surgeries and aesthetics treatments

Iten Defense, LLC is a leading provider of advanced composites and armor solutions used in personal protective equipment, aircraft, tactical vehicles, and maritime vessels.

Karman Missile & Space Systems is a

premier manufacturer of flight-critical and high temperature assemblies and components for space and defense end-markets with significant content on the industry's most coveted platforms.

Quality Environmental Services, Inc. is a

leading provider of environmental remediation services to private, state, and federal customers in the greater Midwest region.

Freedom Dental Health is Dental Support Organization offering a wide range of services, including general and pediatric dentistry, orthodontics and periodontal surgery.

Café Zupas is a healthy fast casual restaurant brand that serves house-made soups, salads and sandwiches from over 200 fresh ingredients.

Fix-It Group LLC is a provider of residential maintenance, repair, and replacement services.

WORKFORCEQA LLC is a leading tech-enabled Third-Party Administrator ("TPA") of employee compliance solutions focused on regulated and safety-sensitive industries.

Three Months Ended

March 31, 2025

June 30, 2025

September 30, 2025

December 31, 2025

March 31, 2026

$ 21,338

231

$ 20,835

804

$ 23,770

166

$ 23,896

615

$ 23,196

2,796

21,569

21,657

23,936

24,511

25,992

4,164

4,625

5,260

5,787

6,665

5,019

4,451

5,773

5,928

5,815

1,141

1,287

1,459

1,532

1,674

10,324

10,363

12,492

13,247

14,154

$ 11,245

$ 11,294

$ 11,444

$ 11,264

$ 11,838

22,330

22,458

22,593

22,330

$ 0.504

$ 0.506

$ 0.520

$ 0.499

$ 0.530

$ (0.101)

$ (0.161)

$ 0.127

$ (0.236)

$ 0.188

$ 0.495

$ 0.450

$ 21.41

$ 21.25

$ 21.34

$ 21.13

$ 21.36

9.8%

9.4%

9.5%

9.6%

In Thousands, except per share data

Income:

Interest Income

Other Investment Income

Total Investment Income

Expenses:

Fees to Advisor & Admin

Interest Expense

Operating Expense

Total Expenses

Net Investment Income (NII)

Weighted Average Shares*

NII Per WAVG Share

Realized/Unrealized Gains (Loss) per Share

Dividend Per WAVG Share

NAV Per Share

LTM Return on Equity (NII)**

Portfolio at Fair Value

762,636

751,260

859,124

902,912

906,844

Debt***

279,678

282,252

397,856

405,902

392,919

Net Asset Value

478,059

474,454

482,035

477,322

482,614

Debt-to-Equity

60.0%

61.4%

84.3%

85.1%

84.3%

*Total Shares outstanding total at 03/31/26 was 22,593,069

**Return on Equity (NII) defined as: LTM net investment income divided by LTM average net assets

***Debt includes Line of Credit and Long Term Debt

Note: The financial information above is not comprehensive and is without notes, so readers should obtain and carefully review GLAD's Forms 10-K and 10-Q for the corresponding reporting periods as filed with the SEC.

Capital Base and Liquidity

Total Assets increased to $925 million as of March 31, 2026, consisting of ~$907 million in investments at fair value and ~$18 million in cash and other assets.

Maintained a conservative debt level at 84.3% of NAV, well below the BDC industry average of 125.6%.

Liabilities decreased to $407 million as of March 31, 2026 (down from $416 million).

Average financing cost of 5.84% as of quarter-end with 47% at floating rates and next debt maturity of $50 million due in May 2027.

Revolving line borrowings decreased to $200 million, with additional line borrowing availability of >$150 million.

ROE Performance

Portfolio growth and performance, relatively stable investment margins and stable valuations contributed to ROE of 8.45% for LTM Mar-26 period (9.6% NII ROE).

Strong net interest income contributed to NII of $0.52 and covered monthly distributions of

$0.15 per common share ($1.80 per annum).

Reduced competitive pressures on lending spreads, the consensus expectation of fewer Fed rate cuts and continuation of our modest net asset growth are all supportive of our near-term earnings and distribution coverage.

BDC Mean/Median Source: Raymond James BDC Industry Weekly Newsletters (04/30/2026)

BDC Averages Source: Oppenheimer & Co. Financial Institutions/Business Development Companies Equity Research Industry Update (03/26/2026)

Page 15

Total Value Creation of $16.64 over the past decade

Gladstone has a demonstrated history of value creation for shareholders over the last decade through consistent, growing dividends and book value appreciation

Net Asset Value per share growth of $5.47 and cumulative dividends paid per share of $11.18, resulting in $16.64 of value creation from 6/30/2016 through 03/31/2026

$30.16

$30.89

$31.57 $31.86 $32.54

$27.44

$23.61 $23.37 $23.65 $24.55

$25.73

$21.38

$18.42

$19.60

$18.27 $19.19 $19.30 $18.10 $19.16

$16.10

$17.35 $17.82

$35.00

10-YEAR NAV PER SHARE AND CUMULATIVE DIVIDEND PER SHARE GROWTH

$30.00

$25.00

$20.00

$15.00

$10.00

$5.00

Net Asset Value per Share Cumulative Dividends Paid per Share (Regular + Special)

David Gladstone

Gladstone Capital:

B. Riley Securities

Research Coverage

Websites

Executive Officers

Chairman

Bob Marcotte

CEO & President

Nicole Schaltenbrand

Other Officers

CFO & Treasurer

Michael LiCalsi

Chief Administrative Officer, Co-General Counsel, & Co-Secretary

Erich Hellmold

Co-General Counsel & Co-Secretary

Jack Dellafiora

Chief Compliance Officer

Catherine Gerkis

Common Stock Ticker: GLAD

Nasdaq Listings

Director of Investor Relations & ESG

https://www.gladstonecapital.com

Investment Adviser:

https://www.gladstonemanagement.com

Information on all Funds:

Investor Relations

https://www.gladstonecompanies.com

1521 Westbranch Drive, Suite 100

McLean, VA 22102

(703) 287-5893

[email protected]

Sean Paul Adams

Clear Street

Mickey Schleien

Jefferies

Matthew Hurwit

Ladenburg Thalmann

Christopher Nolan

Lucid Capital Markets

Erick Zwick

Oppenheimer & Co.

Mitchel Penn

Raymond James

Robert Dodd

Corporate Headquarters

1521 Westbranch Drive, Suite 100

McLean, VA 22102

(703) 287-5800

Other Locations: Dallas & Los Angeles

Kirkland & Ellis LLP

Corporate Counsel:

Other

Transfer Agent:

Computershare Inc.

Auditors:

PricewaterhouseCoopers LLP

Disclaimer

Gladstone Capital Corporation published this content on May 11, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 11, 2026 at 17:44 UTC.