Eagle Point Income Q2 2026 Earnings Report

Eagle Point Income EPS Results

• Actual EPS: $0.37
• Consensus EPS: $0.33
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: N/A

Eagle Point Income Revenue Results

• Actual Revenue: ($3.11) million
• Expected Revenue: $12.15 million
• Beat/Miss: Missed by -$15.26 million
• YoY Revenue Growth: N/A

Eagle Point Income Announcement Details

• Quarter: Q2 2026
• Date: 8/13/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, August 13, 2026
• Conference Call Time: 11:30AM ET

Eagle Point Income (NYSE:EIC) Company (NYSE: EIC) is a closed-end management investment company that primarily invests in the equity and junior debt tranches of collateralized loan obligations (CLOs). Launched in 2019 and domiciled in Maryland, the company seeks to provide shareholders with high current income and the potential for capital appreciation by focusing on structured credit opportunities. Eagle Point Income maintains a diversified portfolio of CLO equity positions, targeting both seasoned and newly issued transactions across multiple risk profiles.

The company’s investment strategy centers on identifying mispriced or underfollowed CLO tranches, where it believes its team’s deep industry expertise can add value. Eagle Point Income may employ hedging strategies, including credit default swaps and interest rate hedges, to manage portfolio volatility and downside risk. Its investment horizon generally spans the life of the underlying CLO structures, allowing the portfolio managers to capture income distributions and reinvestment opportunities throughout market cycles.

Eagle Point Income is externally managed by Eagle Point Credit Management LLC, a specialized credit manager focused on CLO equity and other structured credit investments. The management team draws on decades of combined experience in credit analysis, structured finance and portfolio management. This partnership structure aligns the interests of the investment adviser with those of common shareholders, as incentive fees are tied to performance benchmarks and net asset value growth.

While the company principally invests in U.S. and Western European CLOs, its flexible mandate permits opportunistic allocations to other credit-related structured products. Eagle Point Income pays monthly distributions to common shareholders, reflecting its commitment to delivering consistent cash flow. As a NYSE-listed vehicle, it offers both institutional and retail investors access to a niche segment of the credit markets that has traditionally been accessible only to large, specialized funds.

Eagle Point Income Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: NAV rose 4% to $12.52 per share in the second quarter, producing a 7.1% GAAP return on equity as loan prices and CLO valuations recovered from first-quarter volatility.
• Positive Sentiment: The company deployed $39 million into new investments at a 17.9% weighted-average effective yield and rotated capital toward higher-conviction CLO and private-credit opportunities, while CLO resets and refinancings reduced financing costs by an average of 33 basis points.
• Positive Sentiment: Credit fundamentals remained resilient, with the broader loan-market default rate falling to 1.0% and EIC’s look-through exposure to defaulted loans at just 36 basis points; management also expects floating-rate CLO debt income to benefit if rates remain elevated or rise.
• Negative Sentiment: Recurring portfolio cash flows weakened, primarily because of spread compression affecting CLO equity and the timing of semiannual payments. Management expects cash flows to recover over time, but the decline represents a near-term earnings pressure.
• Neutral Sentiment: The company maintained its $0.11-per-share monthly distribution through the remainder of 2026, while preferred equity represented only 12% of assets versus a 25%–35% target range. Management plans to raise additional Series AA and AB preferred capital and may consider share repurchases, balancing the stock’s discount against limited trading liquidity.

Presentation

[Operator]

As a reminder, this conference is being recorded. It is now my pleasure to introduce Darren Daugherty from Prosek Partners. Please go ahead.

[Darren Daugherty, Managing Director at Prosek Partners]

Thank you, operator, and good morning. Welcome to Eagle Point Income Company's earnings conference call for the second quarter of 2026. Speaking on the call today are Thomas Majewski, Chairman and Chief Executive Officer of the company, Dan Ko, Senior Principal and Portfolio Manager for the company's advisor, and Lena Umnova, Chief Accounting Officer for the advisor. Before we begin, I would like to remind everyone that the matters discussed on this call include forward-looking statements or projected financial information that involve risks and uncertainties that may cause the company's actual results to differ materially from such projections. For further information on factors that could impact the company and the statements and projections contained herein, please refer to the company's filings with the Securities and Exchange Commission.

[Darren Daugherty, Managing Director at Prosek Partners]

Each forward-looking statement or projection of financial information made during this call is based on the information available to us as of the date of this call. We disclaim any obligation to update our forward-looking statements unless required by law. Earlier today, we filed our second quarter 2026 financial statements and investor presentation with the Securities and Exchange Commission. These are also available in the investor relations section of the company's website, eaglepointincome.com. A replay of this call will also be made available later today. I will now turn the call over to Thomas Majewski, Chairman and Chief Executive Officer of Eagle Point Income Company. Tom?

[Thomas Majewski, Chairman and CEO at Eagle Point Income Company]

Thank you, Darren, and good morning, everyone. We appreciate your joining the Eagle Point Income Company earnings call today. EIC had a strong second quarter. As of June 30th, our net asset value stood at $12.52 per share, which is an increase of 4% from $11.99 per share as of March 31st. For the quarter, the company generated a GAAP return on common equity of 7.1%. During the quarter, we paid an aggregate of $0.33 per share in cash distributions to our common shareholders. The improvement in NAV was driven by a meaningful recovery in loan prices and CLO valuations following the volatility experienced in the first quarter. Concerns around the potential impact of artificial intelligence on software borrowers, together with geopolitical developments, weighed on leverage loan prices and CLO valuations during the quarter.

[Thomas Majewski, Chairman and CEO at Eagle Point Income Company]

As sentiment improved during the second quarter, loan prices and CLO valuations recovered meaningfully while underlying credit fundamentals remained resilient. We believe the first quarter decline reflected a market-driven pricing pressure rather than a broad deterioration in credit. Elevated refinancing, reset, and call activity during the second quarter resulted in the early repayment of certain of our CLO debt investments. Because many of these investments were purchased at discounts to par, their repayment at par allowed us to realize convexity embedded in those investments sooner than we had originally anticipated. During the quarter, we deployed $39 million into new investments at a weighted average effective yield of 17.9%, allocating capital across CLO debt, CLO equity, and complementary credit investments where we identified what we believe to be very attractive risk-adjusted returns.

[Thomas Majewski, Chairman and CEO at Eagle Point Income Company]

We also repositioned the portfolio by rotating capital away from a certain group of underperforming CLO collateral managers towards higher conviction opportunities across CLOs and other private credit investments. While this resulted in certain losses being realized, those losses had largely been reflected as unrealized losses in prior periods, resulting in minimal incremental impact on our NAV during the quarter. Importantly, we believe the actions taken improve the portfolio's risk-adjusted return potential and enhance its long-term earnings power. Throughout the quarter, we continued to actively manage our CLO portfolio by completing one reset and two refinancings of CLO equity positions. These actions resulted in a weighted average cost savings of 33 basis points for those CLOs. In addition to lowering the debt cost, the reset position also extended its reinvestment period out to five years.

[Thomas Majewski, Chairman and CEO at Eagle Point Income Company]

While CLO junior debt remains central to EIC's strategy, we continue to selectively increase our exposure to infrastructure credit, portfolio debt securities, asset-backed securities, and other strategic credit investments. These opportunities are sourced through dedicated teams with specialized expertise across the broader Eagle Point platform. As of June 30th, CLO debt represented approximately 59% of our portfolio, and CLO equity represented about 19% of our portfolio. Non-CLO investments totaled approximately 22% of our portfolio. We believe this broader opportunity set enhances portfolio diversification and allows us to allocate capital to the most attractive risk-adjusted return opportunities we see in the credit markets. One recent example we wanted to share is our investment with Sports Illustrated Tickets, a specialty finance transaction that we originated that was secured by World Cup tickets that was originated by the Eagle Point team.

[Thomas Majewski, Chairman and CEO at Eagle Point Income Company]

Following a seven-month holding period, this investment generated a 1.2x multiple on investment capital when it was fully realized back in June. We believe Eagle Point's ability to source differentiated investment opportunities complements EIC's core CLO junior debt strategy and enhances long-term shareholder value. Turning to our capital structure, during the second quarter, we issued $1 million of our 6% Series AA Convertible Perpetual Preferred Stock. This fixed-rate perpetual financing provides an attractive source of long-term capital and additional flexibility to deploy capital when compelling opportunities arise. We see this financing as a significant competitive advantage, and we're unaware of any other public CLO debt-focused fund with a similar perpetual convertible preferred program. I'll now turn the call over to Senior Principal and Portfolio Manager Dan Ko for an update on the market.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

Thanks, Tom. I'll provide a brief update on the loan and CLO markets. The S&P UBS Leveraged Loan Index rose 1.9% in the second quarter and returned 0.8% in July. Average corporate revenue and EBITDA growth remained positive, supporting overall credit fundamentals across the broadly syndicated loan market, despite continued dispersion across sectors and issuers. The trailing 12-month loan default rate ended the quarter at 1.0%, compared with 1.4% on March 31st, and remained below its long-term average of 2.5%. EIC's look-through exposure to defaulted loans remained low at 36 basis points, significantly below the broader market average. We believe this reflects both the quality of our underlying loan holdings, our active portfolio management, and disciplined investment process.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

Software remained an area of focus during the quarter as investors continued to assess the long-term impact of AI across different sectors. AI will likely create both winners and losers, but many software businesses continue to benefit from recurring contracted revenue, sticky customer relationships, and mission-critical products. We believe the market reaction earlier this year overstated the likely impact on the broader software sector. For EIC, the diversification and structural protection within our CLO debt investments further help mitigate the impact of weakness in any individual borrower or sector. Loan prices recovered during the second quarter, although the improvement remained uneven across individual credits. At the end of the quarter, the look-through underlying loan portfolio had a weighted average market price of 95.30, providing opportunities for par building through discounted loan purchases.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

In terms of CLO market activity, new issuance totaled $33 billion during the second quarter, compared with $47 billion in the first quarter. Reset activity totaled $55 billion, compared with $32 billion in the first quarter, while refinancing activity totaled $39 billion, compared with $24 billion in the first quarter. We expect refinancing and reset activity to remain robust. For our CLO equity investments, this activity can lower liability costs and extend reinvestment periods. For CLO debt investments purchased at a discount, resets, refinancings, and calls can create additional opportunities to realize embedded gains through early repayments at par. We continue to believe CLO junior debt offers an attractive combination of floating rate income, structural protection, and low historical credit expense relative to comparably rated corporate securities.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

If interest rates remain elevated or increase over the near to intermediate term, our CLO debt portfolio is positioned to benefit from higher income. Our CLO equity investments are less sensitive to changes in benchmark rates because returns are driven primarily by the underlying loan asset spreads, less the CLO's financing costs. At the company level, the combination of predominantly floating rate investments and fixed rate preferred financing creates an attractive earnings profile in this environment. With that, I'll hand it over to our advisor's Chief Accounting Officer, Lena Umnova, to walk through our financial results.

[Lena Umnova, Chief Accounting Officer at Eagle Point Income Company]

Thank you, Dan. During the second quarter, the company generated net investment income, or NII, of $0.37 per share. NII, less realized losses from investments, was $0.29 per share. This compares to NII, less realized losses from investments, of $0.34 per share in the first quarter of 2026 and NII and realized gains of $0.39 per share in the second quarter of 2025. Including unrealized portfolio gains, GAAP net income was $20 million or $0.84 per share for the second quarter of 2026. This compares to GAAP net loss of $0.95 per share in the first quarter of 2026 and GAAP net income of $0.49 per share in the second quarter of 2025. Recurring cash flows from company's investment portfolio totaled $12 million or $0.52 per share during the quarter and exceeded the company's common stock distributions and expenses.

[Lena Umnova, Chief Accounting Officer at Eagle Point Income Company]

We paid three monthly common stock distributions of $0.11 per share during the quarter, and we declared monthly common stock distributions of $0.11 per share for the remainder of 2026. We believe the current distribution level reflects the company's near-term earnings potentials in today's interest rate environment. Looking at our capital structure as of June month-end, the company had outstanding preferred equity securities equal to 12% of total assets less current liabilities. This is below our target range of 25%-35%, where we expect to operate the company under normal market conditions. We expect leverage to increase over time as we raise additional capital through our continued offering of the Series AA and Series AB Convertible Perpetual Preferred Stock, the program that we launched early in 2026.

[Lena Umnova, Chief Accounting Officer at Eagle Point Income Company]

Looking at our portfolio activity during month of July, the company received recurring cash flows from its investments totaling $8 million. Note that some of the company's investments are still expected to make payments later in the quarter. As of July month-end, net of pending investment transactions and settlement, the company had over $53 million of cash and revolver capacity available for investment and other purposes. Management's unaudited estimate of the company's NAV as of July month-end was between $12.30 and $12.40 per share. At the midpoint, this represented a 1% decrease from June month-end. I will now turn the call back over to Thomas to provide closing remarks before we take your questions.

[Thomas Majewski, Chairman and CEO at Eagle Point Income Company]

Thanks, Lena. The second quarter demonstrated the benefits of active portfolio management and access to the full Eagle Point platform. We continue to selectively rotate capital towards higher conviction opportunities across CLO debt, CLO equity, and differentiated private credit investments while strengthening our capital structure. With healthy CLO fundamentals, a predominantly floating rate investment portfolio, and fixed rate preferred financing, we believe EIC is well-positioned to generate attractive income and long-term value for our fellow shareholders. We appreciate your continued support, and thank you for your time and interest in Eagle Point Income Company. Lena, Dan, and I will now open the call to your questions. Operator?

[Operator]

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question is from Erik Zwick with Lucid Capital Markets.

[Erik Zwick, Analyst at Lucid Capital Markets]

Thanks. Good morning again. Maybe just start with a question on the recurring cash distributions. You noted $8.3 million here to start the third quarter with a little bit more expected throughout the quarter. That rate would seem to be below what we have seen in the past couple quarters and kind of continuing a downward trend. If you could kind of just frame it in terms of how much of that is related to market factors versus the portfolio performance, and then what it would take to see an inflection point and see that start growing again. Kind of curious on your thoughts there.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

Yeah. This is Dan Ko here. A few things. On the CLO debt side, given that we are seeing or we expect rates to increase in the near to kind of intermediate term, our expectation is that the cash, or at least the income from the CLO debt portion of the portfolio, will likely increase over the next few months as base rates increase. The decrease in cash flows was probably mainly driven by the CLO equity portion of the portfolio, which has kind of faced spread compression over the past, at least during 2025. The effects of that is really being felt more now as all those loan coupons were reset. Some of it is also driven by the fact that the underlying in some of the CLOs do have semiannual paying bonds.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

There is a little bit of a sawtooth sort of payments for CLO equity in that it will be down one quarter and then up another quarter, kind of depending on how big the bond bucket is. This quarter kind of being down, I expect this quarter meaning Q2 or Q3, then the following quarter would be higher. Our expectation is that we expect it to kind of recover over time.

[Erik Zwick, Analyst at Lucid Capital Markets]

Thanks, Dan. Tom, I think on last quarter's call when you discussed the opportunity for share repurchases, I think you noted that you're not used aggressive as you had in past quarters. The NAV for the fund has recovered nicely in the past quarter, the stock price has not. I guess with the kind of discounted valuation, again, just curious if you could update your thoughts on allocating capital towards share repurchases in the next quarter or two.

[Thomas Majewski, Chairman and CEO at Eagle Point Income Company]

Yeah. The thing we grapple with, we definitely saw the increase in NAV coming, so we felt it happening as it happened, I guess. You can never say for sure you saw it coming. We're mindful of the discount on the share price balanced against the liquidity in the stock and the daily volume. One of the things I think I said on the last call was we backed off somewhat, just due to the impact we saw on the volume of the stock as we were buying it back. So we're kind of balancing the two of those. At the same time, I also point out our leverage is well below our target ratio here. So actually buying back equity might be helpful to get back in a little bit in line of our leverage category.

[Thomas Majewski, Chairman and CEO at Eagle Point Income Company]

Although we do have, I think, the revolver as of quarter end was fully undrawn. Correct, Lena?

[Lena Umnova, Chief Accounting Officer at Eagle Point Income Company]

Correct.

[Thomas Majewski, Chairman and CEO at Eagle Point Income Company]

Yeah. So we've got a couple different tools to work on, but I am mindful of the value of liquidity in the stock, which is an important piece of the puzzle that we think about. But we look at all the levers every single day.

[Erik Zwick, Analyst at Lucid Capital Markets]

I appreciate the update there. Last one from me. I just want to say I appreciate all the slides you guys put out every quarter. If I look at one of the later ones in there, slide 27, which shows annual CLO trading volume. Just looking at the year-to-date figures for 2026 would suggest that we'd see, I guess, relative to at least 2012, a record year for this chart. Curious if you could just kind of explain the dynamics leading to a very strong trading year here, kind of the general upward trend, and what that means for you managing the fund. Is having greater trading liquidity an advantage? Does it potentially bring in more competitors to the market? Just curious how you view the increase here.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

Yeah, we like the focus that others have had on CLO equity. That's a lot different from 14 years ago, I guess, nearly 14 years ago when we started the firm. Having that liquidity allowed us to kind of reposition the portfolio this past quarter in Q2, and without actually kind of better than we anticipated in terms of the levels that we were able to get. That's really due to just the liquidity that has grown within the CLO market and just there being more eyes and people that actually look at CLOs versus 2012 when we initially started. That's certainly been a benefit for the fund.

[Erik Zwick, Analyst at Lucid Capital Markets]

Thank you for taking my questions today.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

Thanks, Erik.

[Operator]

Our next question is from Timothy D'Agostino with B. Riley Securities.

[Timothy D'Agostino, Analyst at B. Riley Securities]

Yeah. Hi, good morning. Thanks for taking the questions. Regarding leverage, it is noted that it was about 12%, which is below the long-term target of 25%-35%. Could you just maybe help provide some color on why we are at 12% today, and then maybe the path and how you think about getting back in line with that leverage target? Thank you.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

Sure. We earlier this year kind of retired, I guess, our most expensive preferreds, which were, I think at 8% EIC. That there was just relative to kind of the opportunities we were seeing in CLO that did not make a ton of sense to keep outstanding. We have started a program of issuing kind of the EIC Series AA and Series AB, which are the convertible perpetual preferreds, at 6%, which we do find very, very attractive. So we expect that issuance to continue over the next several quarters, in fact. Our expectation is that as we raise money there, that we will continue to increase the leverage stats. The revolver today remains undrawn.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

That obviously, if we were to kind of fully draw that would increase the leverage and kind of get us more in line with kind of the target range over the long term.

[Timothy D'Agostino, Analyst at B. Riley Securities]

Okay, great. That's helpful. Just a second one for me. Obviously, we just had the Eagle Point Credit Company call where we talked about other investments. I guess it seems that for EIC, that is a similar focus as well, just diversifying the portfolio. Could you walk us through how that sleeve of other investments for EIC is similar and or different to what you have at ECC? Thank you.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

Sure. No, it is similar in that there's a good amount of overlap between the ECC and EIC other investments. I guess EIC, given that it's a smaller fund, maybe has a little bit less concentration in some of these, whereas ECC has a bigger position. So we expect those to merge or to have very similar. Not merge. Sorry, that's not the right word. We expect those to have a lot of overlap in positions over time in the other bucket.

[Timothy D'Agostino, Analyst at B. Riley Securities]

Okay, great. Thank you so much for taking the questions today.

[Dan Ko, Senior Principal and Portfolio Manager at Eagle Point Income Company]

Thanks, Tim.

[Operator]

Thank you. There are no further questions at this time. I would like to hand the floor back over to Thomas Majewski for any closing comments.

[Thomas Majewski, Chairman and CEO at Eagle Point Income Company]

Great. Thank you very much for joining us today. Lena, Dan, and I appreciate your interest in the call and Eagle Point Income Company. We'll be in the office later today if anyone has any follow-up questions. Thank you very much.

[Operator]

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and we thank you again for your participation.

Participants

Executives

• Thomas Majewski, Chairman and CEO
• Dan Ko, Senior Principal and Portfolio Manager
• Lena Umnova, Chief Accounting Officer

Analysts

• Darren Daugherty, Managing Director at Prosek Partners
• Erik Zwick, Analyst at Lucid Capital Markets
• Timothy D'Agostino, Analyst at B. Riley Securities