Oxford Lane Capital Q4 2026 Earnings Report

Oxford Lane Capital EPS Results

• Actual EPS: $1.03
• Consensus EPS: $2.26
• Beat/Miss: Missed by -$1.23
• One Year Ago EPS: N/A

Oxford Lane Capital Revenue Results

• Actual Revenue: $94.00 million
• Expected Revenue: $244.27 million
• Beat/Miss: Missed by -$150.27 million
• YoY Revenue Growth: N/A

Oxford Lane Capital Announcement Details

• Quarter: Q4 2026
• Date: 5/20/2026
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 19, 2026
• Conference Call Time: 9:00AM ET

Oxford Lane Capital (NASDAQ:OXLC) Corp is a closed-end, externally managed investment company that seeks to generate high current income and capital appreciation. The company invests primarily in debt and equity securities of private funds managed or advised by Oxford Finance LLC, targeting U.S. middle-market companies. Its portfolio spans senior secured loans, mezzanine debt and private equity interests, providing diversification across credit instruments and industry sectors.

Established in 2009 and based in Greenwich, Connecticut, Oxford Lane Capital commenced operations in 2012. The company’s investment activities are overseen by Oxford Lane Capital Advisor LLC, an affiliate of Oxford Finance LLC, leveraging the adviser’s long-standing expertise in direct lending and structured financings for growth-oriented businesses.

Oxford Lane Capital employs leverage through senior secured financing facilities to enhance potential returns on its investment portfolio. By focusing on middle-market sponsors with established business models, the company seeks to balance risk and reward while maintaining diversified exposure across sectors such as healthcare, technology, business services and manufacturing within the U.S. economy.

Serving institutional and individual investors, Oxford Lane Capital provides access to private credit and private equity markets through a closed-end capital structure. Under the direction of its board of directors and management team, the company regularly reviews its portfolio mix and financing arrangements to adapt to evolving market conditions while aiming to maintain consistent distributions to shareholders.

Oxford Lane Capital Q4 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: NAV fell sharply to $10.56 per share at March 31, 2026 from $15.51 in the prior quarter, reflecting a significant decline in quarter-end asset values.
• Negative Sentiment: The company reported GAAP net investment income of $54.5 million ($0.56 per share), down from $71.8 million ($0.74 per share) in the prior quarter, and core NII also declined to $1.03 per share.
• Negative Sentiment: Oxford Lane posted net unrealized depreciation of $381.4 million and realized losses of $38.4 million, driving a net decrease in assets from operations of $365.3 million, or $3.74 per share.
• Neutral Sentiment: Management said the quarter’s pressure came from a mix of loan-market weakness, tighter CLO spreads, and wider bid-ask spreads, though it noted that market conditions improved in April and that CLO equity buyers returned.
• Positive Sentiment: The board declared monthly dividends of $0.20 per share for July, August, and September 2026, and management said it remains active in the CLO market while keeping leverage at a conservative level.

Presentation

[Operator]

Hi, thank you for standing by. This is Roy, I will be your conference operator today. At this time, I would like to welcome everyone to the Oxford Lane Capital Corp announces net asset value and selected financial results for the fourth fiscal quarter 2026. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, please press Star followed by the number one on your telephone keypad.

[Operator]

If you would like to withdraw your question, please press star one again. I would now like to turn the call over back to Jonathan Cohen. You may now begin.

[Jonathan Cohen, CEO at Oxford Lane Capital]

Good morning, and welcome to the Oxford Lane Capital Corp. fourth fiscal quarter 2026 earnings conference call. I'm joined today by Saul Rosenthal, our President; Bruce Rubin, our Chief Financial Officer; and Joe Kupka, Managing Director. Bruce, could you open the call with a disclosure regarding forward-looking statements?

[Bruce Rubin, CFO at Oxford Lane Capital]

Sure, Jonathan. Today's conference call is being recorded. An audio 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 Lane 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.

[Bruce Rubin, CFO at Oxford Lane Capital]

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 you to refer to our most recent filings with the SEC for important factors that can cause actual results to differ materially from those syndicated in these projections. We do not undertake to update our forward-looking statements unless required to do so by law. During this call, we will use terms defined in the earnings release and also refer to non-GAAP measures.

[Bruce Rubin, CFO at Oxford Lane Capital]

For definitions and reconciliations to GAAP, please refer to our earnings release posted on our website at www.oxfordlanecapital.com. With that, I'll turn the presentation back to Jonathan.

[Jonathan Cohen, CEO at Oxford Lane Capital]

Thanks, Bruce. On March 31st, 2026, our net asset value per share stood at $10.56 compared to a net asset value per share of $15.51 as of the prior quarter. As of April 30th, 2026, the midpoint of the range of our estimated net asset values per share was $11.27. For the quarter ended March, we recorded GAAP total investment income of approximately $94 million, representing a decrease of approximately $23.8 million from the prior quarter. The quarter's GAAP total investment income consisted of approximately $90.8 million from our CLO equity and CLO warehouse investments and approximately $3.1 million from our CLO debt investments and from other income.

[Jonathan Cohen, CEO at Oxford Lane Capital]

Oxford Lane recorded GAAP net investment income of approximately $54.5 million or $0.56 per share for the quarter ended March, compared to approximately $71.8 million or $0.74 per share for the quarter ended December 31st. Our core net investment income was approximately $100.7 million or $1.03 per share for the quarter ended March 31st, compared with approximately $108.9 million or $1.12 per share for the quarter ended December 31st. As of the end of March, we held approximately $64 million in newly issued or newly acquired CLO equity investments that had not yet made initial distributions to Oxford Lane.

[Jonathan Cohen, CEO at Oxford Lane Capital]

For the quarter ended March, we recorded net unrealized depreciation on investments of approximately $381.4 million and net realized losses of approximately $38.4 million. We had a net decrease in net assets resulting from operations of approximately $365.3 million or $3.74 per share for the fourth fiscal quarter. As of March 31st, the following metrics applied. We note that none of these metrics necessarily represented a total return to shareholders. The weighted average effective yield of our CLO equity investments at current cost was 11.7%, down from 13.8% as of December.

[Jonathan Cohen, CEO at Oxford Lane Capital]

The weighted average cash distribution yield of our CLO equity investments at current cost was 16.7%, down from 19% as of December 31st. We note that the cash distribution yields calculated on our CLO equity investments are based on the cash distributions which we received or which we were entitled to receive at each respective period end. During the quarter ended March, we made additional CLO investments of approximately $500,000. We received approximately $82.9 million from sales and from repayments.

[Jonathan Cohen, CEO at Oxford Lane Capital]

On May 14th, our board of directors declared monthly common stock distributions of $0.20 per share for each of the months ending July, August, and September of 2026. With that, I will now turn the call over to Joe Kupka. Joe.

[Joe Kupka, Managing Director at Oxford Lane Capital]

Thanks, Jonathan. During the quarter ended March 31st, 2026, U.S. loan market performance declined versus the prior quarter. The U.S. loan price index decreased from 96.64% as of December 31st, 2025 to 94.63% as of March 31st. The decrease in U.S. loan prices led to an approximate 17-point decrease in median U.S. CLO equity net asset values. Additionally, we observed median weighted average spreads across loan pools within CLO portfolios decreased to 304 basis points compared to 311 basis points last quarter. 12-month trailing default rate for the loan index increased to 1.4% by principal amount at the end of the quarter from 1.2% at the end of December.

[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 for the quarter totaled approximately $47 billion, reflecting an approximate $8 billion decrease from the previous quarter. Additionally, the U.S. CLO market saw approximately $56 billion in reset and refinancing activity in Q1 2026, compared to approximately $74 billion in the previous quarter. Oxford Lane remained active this quarter, trading over $75 million in CLO equity and CLO warehouses.

[Joe Kupka, Managing Director at Oxford Lane Capital]

During the quarter, we also led or participated in numerous resets or refinancings, taking advantage of tightening liability spreads to lower the cost of funding and lengthen the weighted average reinvestment period of Oxford Lane CLO equity portfolio from August 2029 to October 2029. We continue to evaluate existing investments for opportunities to improve the economics of our CLO equity positions. In the current market environment, we intend to continue to utilize our opportunistic and unconstrained CLO investment strategy across U.S.

[Joe Kupka, Managing Director at Oxford Lane Capital]

CLO equity debt and warehouses as we look to maximize our long-term total return. As a permanent capital vehicle, we've 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 Lane Capital]

Thanks, Joe. Additional information about Oxford Lane's fourth fiscal quarter financial performance has been uploaded to our website at oxfordlanecapital.com. With that, operator, we're happy to poll for any questions.

[Operator]

Thank you. We will now begin the question and answer session. We'll be standing by briefly for the questions and comments. Thank you. Your first question comes from Erik Zwick with Lucid Capital Markets. Your line is now open.

[Erik Zwick, Analyst at Lucid Capital Markets]

Thank you. Good morning, all.

[Jonathan Cohen, CEO at Oxford Lane Capital]

Morning, Erik.

[Erik Zwick, Analyst at Lucid Capital Markets]

Hoping, Jonathan, to start just on a question in terms of, you know, kind of understanding the primary drivers of the unrealized appreciation in 1Q. I mean, it seems like for most of, you know, 2025, it was, you know, the tightening spread, but it seems like it may have been a little bit different, just more due to kind of reduced activity in the secondary market in 1Q. Is the perception right there? Then kinda curious if that's persisting here into 2Q at this point.

[Joe Kupka, Managing Director at Oxford Lane Capital]

Hey, Erik. Yeah, I think there were a few different factors. As you said, the loan compression on the assets continued, not quite to the extent we saw in 2025, but we did see that continuing, and CLOs did lose additional spread in Q1. Additionally, we saw, you know, the loan market sell-off driven by the decrease in tech and software names. Finally, we did see a pullback in buyers for CLO equity. Bid-ask spreads really blew out and there were just a lack of buyers. That definitely hurt the mark-to-market on our positions as well.

[Jonathan Cohen, CEO at Oxford Lane Capital]

Joe, would you say just as a follow-up to Erik's question, would you say that for this most recent quarter, technical factors, bid-ask spreads and flows of funds or more fundamental factors such as continued, U.S. indicated corporate loan spread compression, which of those two were, in your estimation, the more relevant?

[Joe Kupka, Managing Director at Oxford Lane Capital]

I would say it was a combination of those. Definitely the NAV sell-off hurt substantially, especially towards the end of the quarter when there were just a definite lack of buyers that hurt as well. Since quarter end, we've definitely seen a pause for the time being on continued loan compression, we are now seeing loans above par approach 40%-50%. There could be additional loan repricings, we've definitely seen a healthier market. April was a very strong month for CLO equity. We've seen a lot of buyers step back in, things, at least quarter to date, have stabilized for sure.

[Erik Zwick, Analyst at Lucid Capital Markets]

No, that's definitely helpful. The estimated April NAV that you provided this morning would suggest just that and sounds like it's continued through May, so that's good to hear. In terms of the deployment into new investments in the quarter, you know, $500,000 is relatively light compared to historicals. I guess some of that reflects one, just kind of the market dynamics that you talked about. There just wasn't a whole lot out there potentially for sale. I guess as, you know, things have potentially improved here in the second calendar quarter, are you seeing more opportunities to put capital to work at this point?

[Jonathan Cohen, CEO at Oxford Lane Capital]

We are, Erik. Certainly in the secondary market, liquidity has improved. Bid-ask spreads seem to have tightened fairly meaningfully. Trading activity just overall has stepped up pretty dramatically compared to a month or two ago. The answer from our perspective is certainly yes.

[Erik Zwick, Analyst at Lucid Capital Markets]

That's good to hear. Just in terms of, you know, kind of given the unrealized appreciation, you know, hopefully that continues to unwind and you see some recovery there. Just given that we don't know exactly how, you know, sustained this improvement could be, how are you thinking about leverage in the portfolio today?

[Jonathan Cohen, CEO at Oxford Lane Capital]

I'm thinking from a, I think we're all thinking, Erik, from a fairly conservative perspective. We went into this most recent downturn at a level of overall leverage that I think has proven to be reasonably manageable. In terms of a percentage of leverage or percentage of debt to equity on our balance sheet, we certainly would be not looking to increase that through the issuance of any additional debt that wasn't used to repay existing debt.

[Erik Zwick, Analyst at Lucid Capital Markets]

Gotcha. That's helpful. Last one for me, Jonathan, I missed it. I couldn't type fast enough. You mentioned the dollar amount of CLO investments that have yet to make their initial distributions. Could you just provide that for me once again?

[Jonathan Cohen, CEO at Oxford Lane Capital]

Sure. It was $64 million as of March 31st.

[Erik Zwick, Analyst at Lucid Capital Markets]

Excellent. Thank you. Well, Jonathan and Joe, thank you for taking my questions this morning.

[Jonathan Cohen, CEO at Oxford Lane Capital]

Of course, Erik. Thank you.

[Operator]

I show no further questions. With that, I will turn the call back over to Jonathan Cohen, CEO.

[Jonathan Cohen, CEO at Oxford Lane Capital]

We would like to thank very much everybody who participated in this call and everyone who's listening on the replay. We look forward to speaking to you again soon. Thanks very much.

[Operator]

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Bruce Rubin, CFO
• Joe Kupka, Managing Director
• Jonathan Cohen, CEO

Analysts

• Erik Zwick, Analyst at Lucid Capital Markets