Saratoga Investment (SAR) Financials

Saratoga Investment Corp. (NYSE:SAR) has displayed notable financial performance variations over the last four years, particularly from Q3 2022 through Q3 2025. Here's a summary analysis of key financial trends from its income statements, cash flow statements, and balance sheets:

• Strong Net Income Growth: The company reported a substantial net income of approximately $82.2 million in Q3 2025, a strong rebound from some prior quarters with losses or lower earnings (e.g., Q3 2024 net loss attributable to common shareholders of about -$0.31 per share).
• Robust Total Revenue: Total revenue has been healthy in recent periods, with Q3 2025 reaching nearly $47.8 million, supported by solid interest income and significant capital gains.
• Capital Gains Contribution: Net realized and unrealized capital gains showed a strong positive impact in Q3 2025 ($19.7 million), indicating successful investment activities that positively influenced non-interest income.
• Net Interest Income Improvement: After negative net interest income figures in some quarters (e.g., Q2 2025 negative $13.1 million), Q3 2025 showed positive net interest income of $26.5 million, indicating improved asset-yielding and interest expense management.
• Operating Cash Flow Strength: In Q3 2025, net cash from continuing operating activities was strong at about $94.2 million, demonstrating solid cash generation capabilities amidst fluctuations in net income.
• Stable Common Equity Base: Total common equity increased slightly to about $375 million in Q3 2025, reflecting moderate retention of earnings and capital stability.
• Increased Long-Term Debt Level: Long-term debt rose significantly from $676 million in Q3 2023 to over $1.35 billion in Q3 2025. While this may support growth or investment opportunities, it also introduces leverage risk that needs monitoring.
• Consistent Dividend Payments: The company maintained dividend payments across periods, with Q3 2025 dividend payment of approximately $8.96 million, showing a commitment to shareholder returns despite earnings volatility.
• Volatility in Non-Interest Income: Non-interest income, heavily influenced by capital gains/losses and investment banking income, showed large swings including a significant loss in Q4 2024 (-$28.4 million), indicating some exposure to market risk.
• Negative Cash Flows in Prior Quarters: Several quarters, particularly in 2024, experienced negative net cash from operating activities, such as Q1 2024 with nearly -$111 million, pointing to operational or timing challenges in cash management during those periods.

Overall, Saratoga Investment Corp. has demonstrated an ability to generate strong earnings and cash flows recently, recovering from prior volatility. However, investors should be attentive to leverage increases, fluctuations in investment gains, and occasional operational cash flow challenges that may impact future stability and growth.