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Main Street Capital Q2 Earnings Meet Estimates, Expenses Rise Y/Y
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Key Takeaways
{\"0\":\"Main Street Capital\'s Q2 income rose 9% y/y to $143.9M, driven by higher dividend income.\",\"1\":\"Total expenses climbed 12.9% y/y to $50.6M, with increases across all expense categories.\",\"2\":\"LMM portfolio investments grew to $209.3M from $154.5M in the prior-year quarter.\"}
Main Street Capital Corporation’s (MAIN - Free Report) second-quarter 2025 adjusted net investment income of 99 cents per share matched the Zacks Consensus Estimate. However, the reported figure compares unfavorably with $1.01 per share in the year-ago quarter.
The results benefited from an improvement in the total investment income. However, an increase in expenses acted as a spoilsport.
Distributable net investment income (GAAP basis) was $94.3 million, up 6% from the prior-year quarter.
MAIN’s Total Investment Income & Expenses Rise
Second-quarter total investment income was $143.9 million, up 9% year over year. The rise was driven by an increase in dividend income. However, the top line missed the Zacks Consensus Estimate by 4.9%.
Total expenses were $50.6 million, up 12.9% year over year. The increase was due to a rise in all the components of expenses.
Portfolio Activities for Main Street Capital
In the second quarter, the company invested $209.3 million in its lower middle market (LMM) portfolio. Of this amount, $110.3 million was invested in new portfolio companies. In comparison, the total LMM portfolio investment in the year-ago quarter was $154.5 million.
Main Street Capital completed $188.6 million in total private loan portfolio investments, down from $323.8 million in the prior-year quarter.
The net decrease in the total cost basis of the middle market investment portfolio was $17.6 million compared with $66.1 million in the year-ago quarter.
Main Street Capital’s Balance Sheet Position
As of June 30, 2025, the company’s cash and cash equivalents totaled $86.9 million, which decreased from $109.2 million as of March 31, 2025.
The company has an aggregate unused capacity of $1.26 billion under its corporate revolving credit facility, up 5.9% from the prior quarter.
As of June 30, 2025, total assets were $5.3 billion, marginally up from the previous quarter.
Net asset value was $32.30 per share, up from $32.03 as of March 31, 2025.
Our Take on MAIN
Growth in total investment income is expected to continue in the coming quarters, driven by increased demand for customized financing. Higher investment commitments are anticipated to continue boosting the company’s financial performance. However, an increase in the expense base is a near-term concern.
Main Street Capital Corporation Price, Consensus and EPS Surprise
Hercules Capital Inc.’s (HTGC - Free Report) second-quarter 2025 net investment income of 50 cents per share surpassed the Zacks Consensus Estimate of 47 cents. However, the bottom line declined 2% from the year-ago quarter.
HTGC’s results were primarily aided by an increase in total investment income. Also, the portfolio activity was robust in the quarter. However, an increase in expenses hurt the results to some extent.
Ares Capital Corporation’s (ARCC - Free Report) second-quarter 2025 core earnings of 50 cents per share missed the Zacks Consensus Estimate by a penny. The bottom line reflected a decline of 18% from the prior-year quarter.
ARCC’s results were primarily hurt by a decline in total investment income and higher expenses. Nonetheless, the company’s robust portfolio activities offered some support.
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Main Street Capital Q2 Earnings Meet Estimates, Expenses Rise Y/Y
Key Takeaways
Main Street Capital Corporation’s (MAIN - Free Report) second-quarter 2025 adjusted net investment income of 99 cents per share matched the Zacks Consensus Estimate. However, the reported figure compares unfavorably with $1.01 per share in the year-ago quarter.
The results benefited from an improvement in the total investment income. However, an increase in expenses acted as a spoilsport.
Distributable net investment income (GAAP basis) was $94.3 million, up 6% from the prior-year quarter.
MAIN’s Total Investment Income & Expenses Rise
Second-quarter total investment income was $143.9 million, up 9% year over year. The rise was driven by an increase in dividend income. However, the top line missed the Zacks Consensus Estimate by 4.9%.
Total expenses were $50.6 million, up 12.9% year over year. The increase was due to a rise in all the components of expenses.
Portfolio Activities for Main Street Capital
In the second quarter, the company invested $209.3 million in its lower middle market (LMM) portfolio. Of this amount, $110.3 million was invested in new portfolio companies. In comparison, the total LMM portfolio investment in the year-ago quarter was $154.5 million.
Main Street Capital completed $188.6 million in total private loan portfolio investments, down from $323.8 million in the prior-year quarter.
The net decrease in the total cost basis of the middle market investment portfolio was $17.6 million compared with $66.1 million in the year-ago quarter.
Main Street Capital’s Balance Sheet Position
As of June 30, 2025, the company’s cash and cash equivalents totaled $86.9 million, which decreased from $109.2 million as of March 31, 2025.
The company has an aggregate unused capacity of $1.26 billion under its corporate revolving credit facility, up 5.9% from the prior quarter.
As of June 30, 2025, total assets were $5.3 billion, marginally up from the previous quarter.
Net asset value was $32.30 per share, up from $32.03 as of March 31, 2025.
Our Take on MAIN
Growth in total investment income is expected to continue in the coming quarters, driven by increased demand for customized financing. Higher investment commitments are anticipated to continue boosting the company’s financial performance. However, an increase in the expense base is a near-term concern.
Main Street Capital Corporation Price, Consensus and EPS Surprise
Main Street Capital Corporation price-consensus-eps-surprise-chart | Main Street Capital Corporation Quote
Main Street Capital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other MAIN’s Peers
Hercules Capital Inc.’s (HTGC - Free Report) second-quarter 2025 net investment income of 50 cents per share surpassed the Zacks Consensus Estimate of 47 cents. However, the bottom line declined 2% from the year-ago quarter.
HTGC’s results were primarily aided by an increase in total investment income. Also, the portfolio activity was robust in the quarter. However, an increase in expenses hurt the results to some extent.
Ares Capital Corporation’s (ARCC - Free Report) second-quarter 2025 core earnings of 50 cents per share missed the Zacks Consensus Estimate by a penny. The bottom line reflected a decline of 18% from the prior-year quarter.
ARCC’s results were primarily hurt by a decline in total investment income and higher expenses. Nonetheless, the company’s robust portfolio activities offered some support.