Prospect Capital (PSEC) Financials

Prospect Capital (NASDAQ: PSEC) has exhibited significant fluctuations in financial performance over the past four years, as seen in its quarterly income statements, cash flow, and balance sheets.

• Investment securities interest income generally increased from approximately $147.8 million in Q3 2022 to around $167.0 million in Q3 2025, indicating growth in income from investments.
• Trading account securities remain a major asset, demonstrating a consistent level of approximately $6.9 billion in Q3 2025, down slightly from highs near $7.8 billion; this reflects a strong asset base focused on securities.
• Net cash from continuing operating activities showed a strong positive figure of about $78.6 million in Q3 2025, indicating improving operational cash generation compared to negative operating cash flow in prior quarters.
• Total common equity, after fluctuations, remained stable around $3.2 to $3.5 billion in recent quarters, supporting a solid capital base for the company.
• The company’s total liabilities have decreased modestly from approximately $2.7 billion in Q2 2023 to about $2.1 billion in Q3 2025, suggesting some level of debt management or repayments.
• Preferred stock dividends declared have been consistently significant, around $26-33 million per quarter, reflecting ongoing financial commitments to preferred shareholders.
• Net realized and unrealized capital gains/losses on investments have varied hugely, with recent quarters showing large unrealized losses (e.g., -$160 million in Q3 2025) negatively impacting total non-interest income and overall profitability.
• The company reported consolidated net losses for several recent quarters, including a significant loss of approximately -$140 million in Q3 2025 compared to a net income of $144 million in Q3 2024, indicating earnings volatility.
• Non-interest expenses such as insurance policy acquisition costs and other operating expenses remain substantial, exceeding $87 million in Q3 2025, putting pressure on profit margins.
• Net cash used in financing activities was negative in recent quarters (e.g., -$83.8 million in Q3 2025), largely due to debt repayments and dividend payments, which may constrain liquidity if not offset by operational cash flows.

In summary, while Prospect Capital has demonstrated resilience with a solid investment income base and stable equity, its profitability has been heavily impacted by significant unrealized losses, high expenses, and notable net losses in recent quarters. The company's operational cash flow has improved recently, which is positive, but ongoing capital return obligations and debt management remain key factors to monitor.