Oxford Lane Capital Q3 2025 Earnings Report

Oxford Lane Capital EPS Results

• Actual EPS: $0.28
• Consensus EPS: $0.67
• Beat/Miss: Missed by -$0.39
• One Year Ago EPS: N/A

Oxford Lane Capital Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $183.42 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Oxford Lane Capital Announcement Details

• Quarter: Q3 2025
• Date: 1/27/2025
• Time: Before Market Opens
• Conference Call Date: Monday, January 27, 2025
• Conference Call Time: 9:00AM ET

Oxford Lane Capital (NASDAQ:OXLC) is a closed-end management investment company that primarily focuses on investing in middle-market collateralized loan obligations (CLOs). The firm seeks to generate attractive risk-adjusted returns through investments in a diversified portfolio of senior secured corporate loans. Oxford Lane Capital’s strategy emphasizes both stability and income generation by acquiring CLO securities across varied tranches, with an emphasis on equity and subordinated notes that offer a higher yield profile.

The company’s investment approach centers on thorough credit analysis and active portfolio management. Leveraging a partnership with leading asset managers, Oxford Lane Capital identifies CLO structures backed by pools of broadly syndicated loans to U.S. companies. The firm allocates capital across multiple CLO managers and vintages to mitigate concentration risk and to capture market inefficiencies in the middle-market lending space. Its portfolio is designed to benefit from both current income—through the interest payments on underlying loans—and potential capital appreciation arising from credit upgrades or market volatility.

Since its inception in late 2014, Oxford Lane Capital has sought to deliver consistent distributions to shareholders. The company completed its initial public offering in November 2014 and has since evolved its portfolio mix in response to changing credit conditions and evolving regulatory environments. Oxford Lane Capital’s structure as a registered closed-end fund provides shareholders with transparent monthly reporting and a clear framework for assessing underlying asset performance.

Governance and investment oversight are provided by Oxford Lane Capital Management, LLC, together with established CLO managers that bring deep credit expertise and structuring capabilities. The board of directors comprises industry veterans with extensive backgrounds in asset management, credit markets, and corporate governance. Through this experienced leadership team, Oxford Lane Capital aims to maintain rigorous risk controls while pursuing its income-oriented investment objectives in the U.S. middle-market debt arena.

Oxford Lane Capital Q3 2025 Earnings Call Transcript

Key Takeaways

• Net asset value per share rose to $4.82 as of December 31, up from $4.76 in the prior quarter, marking sequential NAV growth.
• GAAP total investment income increased to $114.5 million (up $9.3 million QoQ), supporting net investment income of $72.4 million for the quarter.
• Weighted average yields compressed with CLO debt yields down to 16.6% (from 17.3%) and CLO equity yields down to 16.1% (from 16.5%), indicating margin pressure.
• Issued 49 million new shares via ATM for $248.9 million of net proceeds and deployed approximately $389.3 million into new CLO equity, debt and warehouse investments.
• Declared monthly common stock distributions of $0.09 per share for April, May and June 2025, underscoring the company’s income focus.

Presentation

[Operator]

Hello, everyone, and welcome to our call today. Oxford Lane Capital Corp. Announces Net Asset Value and Selected Financial Results for the 3rd Fiscal Quarter and declaration of distributions on common stock for the months ending April, May June 2025. My name is Lydia, and I'll be your operator today. After the prepared remarks, there will be an opportunity to ask questions.

[Operator]

I'll now hand you over to Jonathan Cohen, CEO to begin. Please go ahead.

[Jonathan Cohen, CEO at Oxford Square Capital]

Thank you. Good morning, everyone, and welcome to the Oxford Lane Capital Corp. 3rd fiscal quarter 2025 earnings conference call. I'm joined today by Saul Rosenthal, our President Bruce Rubin, our CFO and Joe Kopka, our Managing Director. Bruce, could you open the call with a disclosure regarding forward looking statements?

[Bruce Rubin, CFO at Oxford Square Capital]

Sure, Jonathan. Today's conference call is being recorded. In order to replay of the call will be available for 30 days. Replay information is included in our press release that was issued earlier this morning. Please note that this call is the property of Oxford Land Capital Corp. Any unauthorized rebroadcast of this call in any form is strictly prohibited. At this point, please direct your attention to the customary disclosure in this morning's press release regarding forward looking information. Today's conference call includes forward looking statements and projections that reflect the company's current views with respect to, among other things, future events and financial performance. We ask that you refer to our most recent filings with the SEC for important factors that can cause actual results to differ materially from those indicated in these projections. We do not undertake to update our forward looking statements unless required to do so by law.

[Bruce Rubin, CFO at Oxford Square Capital]

During this call, we will use terms defined in our earnings release and also refer to non GAAP measures. For definitions and reconciliations to GAAP, please refer to our earnings release as posted on our website at www.oxfordlanecapital.com. With that, I'll turn the presentation back to Jonathan.

[Jonathan Cohen, CEO at Oxford Square Capital]

Thank you, Bruce. On December 31, 2024, our net asset value per share stood at $4.82 compared to a net asset value per share of $4.76 as of the prior quarter. For the quarter ended December, we recorded GAAP total investment income of approximately $114,500,000 representing an increase of approximately $9,300,000 from the prior quarter. The quarter's GAAP total investment income consisted of approximately $107,600,000 from our CLO Equity and CLO Warehouse Investments and approximately $6,900,000 from our CLO debt investments and from other income. Oxford Lane recorded GAAP net investment income of approximately $72,400,000 or 0 point $2 per share for the quarter ended December 31 compared to approximately $67,200,000 or $0.22 per share for the quarter ended September 30.

[Jonathan Cohen, CEO at Oxford Square Capital]

Our core net investment income was approximately 99 $900,000 or $0.28 per share for the quarter ended December compared with approximately $99,400,000 or $0.32 per share for the quarter ended September. As of December 31, we held approximately $509,000,000 in newly issued or newly acquired CLO equity investments that had not yet made initial distributions to Oxford Lane. For the quarter ended December, we recorded net unrealized appreciation on investments of approximately $34,900,000 and net realized losses of approximately $3,600,000 We had a net increase in net assets resulting from operations of approximately $103,700,000 or $0.29 per share for the 3rd fiscal quarter. As of December 31, the following metrics applied. We note that none of these metrics necessarily represented a total return to shareholders.

[Jonathan Cohen, CEO at Oxford Square Capital]

The weighted average yield of our CLO debt investments at current cost was 16.6%, down from 17.3% as of September 30. The weighted average effective yield of our CLO equity investments at current cost was 16.1%, down from 16.5% as of September 30. For the December quarter, we have excluded the impact of CLO warehouse positions from this calculation. The weighted average cash distribution yield of our CLO equity investments at current cost was 23.9%, down from 24.1% as of September 30. We note that the cash distribution yields calculated on our CLO equity investments are based on the cash distributions we received or which we were entitled to receive at each respective period end.

[Jonathan Cohen, CEO at Oxford Square Capital]

During the quarter ended December, we issued a total of approximately 49,000,000 shares of our common stock pursuant to an at the market offering, resulting in net proceeds of approximately $248,900,000 During the quarter ended December, we made additional CLO investments of approximately $389,300,000 and we received approximately $33,900,000 from sales and from repayments. On January 24, our Board of Directors declared monthly common stock distributions of $0.09 per share for each of the months ending April, May June of 2025. With that, I'll turn the call over to our Managing Director, Joe Kupka.

[Joe Kupka, Managing Director at Oxford Lane Capital]

Thanks, Jonathan. During the quarter ended December 31, 2024, U. S. Loan market performance improved versus the prior quarter.

[Joe Kupka, Managing Director at Oxford Lane Capital]

The U. S. Loan price index increased from 96.71 percent as of September 30 to 97.33 percent as of December 31. The increase in U. S.

[Joe Kupka, Managing Director at Oxford Lane Capital]

Loan prices led to an approximate 5 point increase in median U. S. CLO equity net asset values. Additionally, due to elevated levels of repricing activity, we observed median weighted average spreads across loan pools within CLO portfolios decreased to 3 44 basis points compared to 3 52 basis points last quarter. The 12 month trailing default rate for the loan index increased to 0.9% by principal amount at the end of the quarter from 0.8% at the end of September.

[Joe Kupka, Managing Director at Oxford Lane Capital]

We note that out of court restructurings, exchanges and subpar buybacks, which are not captured in the cited default rate, remain elevated. CLO new issuance during the quarter totaled approximately $59,000,000,000 an increase of $18,000,000,000 from the prior quarter. CLO new issuance for the year 2024 totaled approximately $202,000,000,000 as of December, compared to approximately $116,000,000,000 in 2023. In addition, the U. S.

[Joe Kupka, Managing Director at Oxford Lane Capital]

CLO market saw over $300,000,000,000 in reset and refinancing activity in 2024. CLO new issuance and combined reset and refinancing activity set annual volume records. Oxford Lane remained active this quarter, investing over $380,000,000 of proceeds in CLO equity, debt and warehouses, while participating in opportunistic resets and refinancings. As a function of our overall activity during the quarter, we were able to lengthen the weighted average reinvestment period of Oxford Lane's CLO equity portfolio from September 2027 to February 2028. Our primary investment strategy during the quarter was to engage in relative value trading and seek to lengthen the weighted average reinvestment period of Oxford Lane's CLO equity portfolio.

[Joe Kupka, Managing Director at Oxford Lane Capital]

In the current market environment, we intend to continue to utilize an opportunistic and unconstrained CLO investment strategy across U. S. CLO equity, debt and warehouses as we look to maximize our long term total return. And as a permanent capital vehicle, we have historically been able to take a longer term view towards our investment strategy. With that, I'll turn the call back over to Jonathan.

[Jonathan Cohen, CEO at Oxford Square Capital]

Thanks, Joe. Additional information about Oxford Lane's 3rd fiscal quarter performance has been uploaded to our website at www.oxfordlanecapital.com. And operator, we're happy to open the call now for any questions.

[Operator]

Thank you. We have no questions on the line at the moment. So I'll turn you back over to Jonathan for any closing comments.

[Jonathan Cohen, CEO at Oxford Square Capital]

All right. Thanks very much. I'd like to thank everybody who participated in this call or anybody who listened to it on the replay. We thank you for your interest in Oxford Lane Capital Corp, and we look forward to speaking again soon. Thanks very much.

Participants

Executives

• Jonathan Cohen, CEO
• Joe Kupka, Managing Director

Analysts

• Bruce Rubin, CFO at Oxford Square Capital