Prospect Capital (PSEC) Financials

Prospect Capital Corp (NASDAQ: PSEC) has experienced a notable financial trajectory over the last several quarters, based on the analysis of their quarterly financial statements from Q3 2022 through Q3 2025.

• Investment Securities Interest Income remains a significant contributor to total interest income, consistently around $147 million to $205 million per quarter, indicating stable interest income generation from investments.
• Total Interest Expense has been consistently zero in recent quarters, which implies cost-efficient capital structure or favorable financing terms without interest expenses.
• Net Cash From Continuing Operating Activities was positive in recent quarters, for example $78.6 million in Q3 2025 and $278.5 million in Q2 2025, illustrating operational cash flow generation.
• Issuance of Debt and Preferred Equity continues, indicating access to capital markets to fund operations and investments, with $638.5 million debt issuance in Q3 2025 and $29.8 million in preferred equity issuance in the same quarter.
• Total Assets fluctuated from about $7.7 billion in early 2023 to $6.99 billion in Q3 2025, showing some decrease but remaining at a high level.
• Total Equity has shown volatility but remains positive, with common equity around $3.2 billion as of Q3 2025 versus about $3.9 billion in early 2023.
• Net Realized & Unrealized Capital Gains on Investments showed large fluctuations, with sharp unrealized losses of -$160 million in Q3 2025 and significant gains in earlier quarters, reflecting market-driven volatility impacting reported earnings.
• Consolidated Net Income has been negative for several recent quarters, including a loss of -$139.9 million in Q3 2025 and -$134.0 million in Q1 2025, indicating net profitability challenges.
• Net Income attributable to Common Shareholders has been consistently negative in recent quarters, with EPS falling to -$0.39 per share in Q3 2025 from positive levels in early 2023, suggesting earnings pressure and dilution.
• Payments of dividends and preferred dividends remain substantial relative to net income, for example $78.3 million in dividends paid in Q3 2025 and $26.7 million in preferred dividends, which may stress cash flows in light of net losses.

In summary, Prospect Capital has maintained stable interest income with minimal interest expenses and continued solid operating cash flows, supported by capital raises via debt and equity. However, fluctuating investment gains/losses and consistent net losses have pressured profitability and shareholder returns in recent periods. The company’s balance sheet remains solid with significant assets and equity, but earnings volatility and dividend payments suggest caution and highlight the impact of market conditions on overall financial health.