Saratoga Investment (SAR) Financials

Saratoga Investment (NYSE:SAR) - Financial Performance Overview (Q3 2022 to Q3 2025)

Analyzing Saratoga Investment's financial statements over the past four years reveals several key trends in revenue, earnings, expenses, and balance sheet strength. The company’s quarterly income statements, cash flow statements, and balance sheets highlight its evolving profitability, capital structure, and cash management.

• Consistent Net Income Growth: Saratoga Investment has displayed an overall uptrend in quarterly net income continuing operations, increasing from approximately $8.3 million in Q3 2022 to about $88.3 million in Q3 2025, signaling improved profitability.
• Strong Capital Gains Contribution: Net realized and unrealized capital gains have significantly boosted total non-interest income in various quarters, notably $19.7 million in Q3 2025 and $24.1 million in Q2 2025, supporting top-line growth.
• Rising Total Assets: Total assets have grown moderately from approximately $974 million in Q2 2023 to nearly $1.22 billion by Q3 2025, indicating asset base expansion.
• Increasing Cash and Equivalents: Cash on hand has grown substantially from around $3 million in Q2 2023 to $147.6 million in Q3 2025, strengthening liquidity.
• Equity Expansion: Common equity has increased from roughly $337 million in Q2 2023 to $374.9 million in Q3 2025, reflecting retained earnings growth and possibly equity issuances.
• Stable Interest Expense: Long-term debt interest expense has remained fairly consistent in the $12 to $13 million range per quarter, indicating steady debt servicing costs.
• Consistent Operating Expenses: Other operating expenses have held steady, about $1 million to $9 million quarterly, suggesting controlled overhead costs.
• Positive Operating Cash Flow Trend: Net cash from operating activities moved from negative territory in 2022 and 2023 quarters (e.g., -$80 million in Q1 2023) to strong positive cash flows, reaching $94.2 million in Q3 2025.
• Moderate Financing Activity: Saratoga manages financing activities with both debt issuance and repayments; however, net cash from financing ranged both negative and positive, indicating active capital structure management.
• Volatility in Non-Interest Income: Fluctuations in net realized and unrealized capital gains have caused volatile total revenues across quarters, including occasional negative contributions (such as -$28.4 million in Q4 2024), which may add earnings unpredictability.
• High Leverage: Long-term debt figures are quite substantial, exceeding $1.35 billion by Q3 2025, indicating a highly leveraged balance sheet that may elevate financial risk.
• Dividend Payments and Share Issuances: The company regularly pays dividends and participates in equity issuances, affecting cash flows and shareholder value dynamics.

Summary: Saratoga Investment has demonstrated notable improvement in profitability and cash flow generation since 2022, driven by strong capital gains and operational performance. The expanding asset base and increased liquidity bolster financial stability. However, volatility in investment income and high leverage levels remain key risk factors for investors to watch. The company’s steady management of expenses and financing activities is a positive sign of disciplined financial stewardship.