Capital Southwest (CSWCZ) Financials

Capital Southwest Corp (NASDAQ: CSWC) has demonstrated stable financial performance over the last four years, with consistent growth in revenue and earnings, alongside prudent management of its balance sheet. Here are the key insights from the latest quarterly data and historical trends:

• Steady growth in Total Interest Income: Total interest income increased from $17.7 million in Q3 2022 to $48.6 million in Q4 2025, reflecting improving core earnings from the company’s lending and investment activities.
• Increasing Net Income: Consolidated net income rose from approximately $2.5 million in Q1 2023 to $17.6 million in Q4 2025, highlighting effective expense control and stronger overall profitability.
• Solid Earnings per Share Expansion: Basic EPS grew from $0.49 in Q1 2023 to $0.54 in Q4 2025, supported by growing net income despite a modest increase in share count.
• Robust Dividends per Share Growth: Dividends paid to common shareholders have steadily increased, rising from $0.50 per share in Q2 2023 to $0.63 per share in Q4 2025, signaling confidence in cash flow and shareholder returns.
• Strong Operating Cash Flow in Recent Quarters: The company generated positive net cash from operating activities in Q1 and Q4 2025, reversing prior large negative cash flows and suggesting improving operational efficiency.
• Non-Cash Adjustments Volatility: Non-cash adjustments to reconcile net income show wide fluctuations quarter to quarter, ranging from large positive to large negative values, which affects cash flow statements and may indicate complex accounting entries or volatile investment valuations.
• Stable Total Assets and Equity: Total assets have grown from around $1.13 billion in mid-2023 to roughly $1.79 billion by late 2025, with total common equity rising accordingly, maintaining a healthy equity base over liabilities.
• Consistent Debt Issuances and Repayments: The company actively manages its financing structure with ongoing issuances and repayments of both short-term and long-term debt, balancing liquidity needs and cost of capital.
• High Operating Expenses in Certain Quarters: Some quarters exhibited high salaries, employee benefits, and other operating expenses—$28.9 million in Q4 2025—potentially compressing pre-tax income despite strong revenues.
• Negative Other Adjustments to Net Income: Negative adjustments in several quarters, reaching up to -$15 million, reduce consolidated net income and might reflect one-time costs or write-downs that investors should monitor.

Summary: Capital Southwest Corp shows a positive trajectory in revenue and profitability through 2023 to 2025, with growth in interest income, net income, and dividends. The company manages its capital structure prudently, though some volatility in non-cash adjustments and elevated operating expenses in recent periods may require attention. Overall, CSWC appears well-positioned with improving fundamentals for investors considering stable income and moderate growth exposure.