Saratoga Investment Corp. · NYSE:SAR
Saratoga Investment — Q1 2026 Earnings Presentation
30 slides from Saratoga Investment's earnings presentation, Jul 9, 2025
Slide 1: Saratoga Investment Corp. Fiscal First Quarter 2026 Shareholder Presentation
Saratoga Investment Corp. Fiscal First Quarter 2026 Shareholder Presentation July 9, 2025
Slide 2: Solid Performance in Q1 2026
Solid Performance in Q1 2026 Fiscal First Quarter 2026 Highlights: Continued high quality portfolio and solid portfolio performance • Investment quality remains strong o 99.7% of loan investments with highest internal rating and two residual non-accruals (0.3% of fair value / 0.6% of cost) v industr
Slide 3: Saratoga Double Digit Long-Term ROE Substantially Ahead of the BDC Industry
Saratoga Double Digit Long-Term ROE Substantially Ahead of the BDC Industry Return on Equity 25.0% 23.6% 20.0% 14.8% 15.0% 13.9% 13.2% 11.5% 10.1% 9.3% 10.2% 9.3% 9.4% 9.0% 10.0% 8.9% 8.9% 8.5% 8.5% 7.5% 7.5% 6.9% 7.2% 7.0% 6.6% 5.0% 5.0% 2.5% 0.9% 0.9% 0.6% 0.0% FY 2015 FY 2016 FY 2017 FY 2018 FY 2
Slide 4: Consistent Long-Term Asset Growth and Strong Credit Quality
Consistent Long-Term Asset Growth and Strong Credit Quality Asset Base Expansion Trend Overall Credit Quality Remains Strong $1,200 100% $1,139 $1,000 $973 $978 $968 $800 $818 $600 80% 98.3% 96.8% 98.6% 99.0% 98.5% 98.1% 99.7% 99.7% 94.2% 95.9% $554 94.1% 93.3% $486 90.5% $400 82.4% $402 $343 $284 $
Slide 5: Q1 FY26: Strong Financial Foundation and Momentum
Q1 FY26: Strong Financial Foundation and Momentum Key Performance Metrics for the Fiscal Quarter For the quarter ended and as of May 31, 2024 February 28, 2025 May 31, 2025 ($ in millions except per share) $14,000 Net investment income $14.3 $8.0 $10.1 $10,500 $7,000 $14,000 Adjusted net investment
Slide 6: Long-Term NAV and NAV Per Share Growth Despite Recent Discrete Weakness
Long-Term NAV and NAV Per Share Growth Despite Recent Discrete Weakness Net Asset Value and NAV per Share (FY 11 to Q1 FY26) NAV: 1% increase this quarter. 361% increase since Saratoga took over management. NAV/Share: 1% decrease this quarter due to 50c per share additional monthly dividends (up 1%
Slide 7: Quarterly Reconciliation of NII and NAV per Share
Quarterly Reconciliation of NII and NAV per Share (1) Reconciliation of Quarterly Adjusted NII per Share $0.09 ($0.06) $(0.02) $(0.04) $0.13 $0.56 $0.66 Adjusted NII per Increase due to Increase in Decrease in Increase in Decrease due to Adjusted NII per Share for Q4 FY25 impact of annual excise non
Slide 8: Dry Powder Remains Available
Dry Powder Remains Available Total Borrowing Available Remaining Fixed / (As of May 31, 2025) Outstanding Call Period Capacity Liquidity Maturity Period Floating Rate Encina Credit Facility $65.0 million $32.5 million $32.5 million < 1 Year - Floating Live Oak Credit Facility $75.0 million $37.5 mil
Slide 9: Portfolio Composition and Yield
Portfolio Composition and Yield Portfolio Composition – $968.3m Portfolio Yield – 10.7% (Based on Fair Values (Weighted Average as of May 31, 2025) Current Yield of Total Existing Portfolio) Structured Finance Structured Second Lien Securities Finance Common Second Lien Common Equity 0.7% 2.8% Secur
Slide 10: Yield of BDC Grew With Rising Rates – Currently Stabilized
Yield of BDC Grew With Rising Rates – Currently Stabilized Weighted Average Current Yields Annual 13.4% 14.0% 11.8% 11.8% 11.1% 10.8% 11.1% 10.7% 9.3% 9.1% 7.7% 10.7% 11.4% 10.8% 10.7% Totals1 12.6% $1,000 16.4% 13.7% 7.4% $800 8.9% $ Millions $600 11.6% 12.6% 11.4% 11.5% 11.5% $400 12.1% 14.6% 5.9%
Slide 11: Diversified Across Geography
Diversified Across Geography Investments Diversified Geographically Southwest, Northeast, 7.8% 13.2% West, 13.0% International, 2.0% Other, 6.3% Midwest, 34.4% Southeast, 23.3% 11
Slide 12: Diversified Across Industry
Diversified Across Industry Investments across 40 distinct industries Education Services, 3.0% Dental Practice Management, 3.2% Municipal Government Software, 3.1% Employee Collaboration Restaurant, 3.3% Software, 2.8% Custom Millwork Software, 3.3% Talent Acquisition Software, 2.8% Education Softwa
Slide 13: Net Realized Gains Help Protect Shareholder Capital
Net Realized Gains Help Protect Shareholder Capital Cumulative net realized gains reflect portfolio credit quality Net Realized Gains (all investments) $ in thousands $50,000 $42,877 $42,517 $40,000 $30,000 $20,000 $12,368 $13,398 $8,495 $10,000 $4,874 $3,276 $2,901 $562 $1,271 $226 $22 $154 $0 FY13
Slide 14: Exercising Disciplined Investment Judgment
Exercising Disciplined Investment Judgment SAR Debt Multiples/Deals Closed (2019-2025)(1) Portfolio leverage with non-recurring revenue underwriting is 5.22x(2)(3) Average Middle Market 12/31/2024 3/31/2025 All Senior 4.07x 3.84x 1st Lien/Mezz 4.86x 5.06x 1st Lien/2nd Lien 4.08x 5.37x Unitranche 5.6
Slide 15: Pipeline Remains Healthy But Reflects Market Slowdown
Pipeline Remains Healthy But Reflects Market Slowdown New business opportunities impacted by market opportunities last year and decreases largely offset by follow-on investments. Current pipeline strengthening as a result of recent business development initiatives LTM 2020 ∆ 2021 ∆ 2022 ∆ 2023 ∆ 202
Slide 16: Demonstrated Strong Track Record
Demonstrated Strong Track Record Realized Investments(1)(2)(3) Unrealized Investments(1)(2)(3)(4) (Gross Unlevered IRR%) (Gross Unlevered IRR%) 16% $42.8m $338.8m 20% $586.9m 13.4% 17.7% 16.9% $1,261.9m $342.4m 16% $199.2m 15.0% 12% 11.4% $1,068.6m $459.0m 10.2% 13.3% 12.8% 12% 8% $387.3m 5.7% 8% 4%
Slide 17: SBIC II Debenture Repayments Commenced - SBIC III Availability
SBIC II Debenture Repayments Commenced - SBIC III Availability(1)(2) $400 $350 $300 $136.0m debentures undrawn $250 $ Millions $200 $56.5m cash $26.4m cash $150 $100 $177.2 $171.2 $50 18% 18% $0 SBIC II SBIC III 1) SBIC III cash available for new originations and follow-ons in existing license, with
Slide 18: Long-Term Consistent Dividend Growth
Long-Term Consistent Dividend Growth • Announced shift to monthly Dividends Per Share* 6% Dividend dividend payment structure Increase Over Past starting March 2025 Two Years • Increased Q1 FY26 dividend to $0.75 per share; paid in $0.75 $0.75 $0.74 $0.74 $0.74 $0.74 $0.73 $0.72 $0.25 per share mont
Slide 19: SAR LTM Total Return Beats the BDC Index
SAR LTM Total Return Beats the BDC Index LTM Total Return (%) (June 2024 to June 2025) SAR 22% v BDC Index +3% 30.0% Hundreds 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 SAR US Equity SPBDCUT
Slide 20: BDC Total Return Comparison (1Y, 3Y, 5Y)
-30 -20 -10 0 10 20 30 40 50 100 200 300 -60 -40 -20 100 0 0 20 40 60 80 SSSS-US MAIN-US FDUS-US GLAD-US HTGC-US PNNT-US MAIN-US GLAD-US OFS-US SAR-US BXSL-US SCM-US FSK-US FDUS-US PFX-US GECC-US FSK-US HTGC-US TSLX-US SCM-US CGBD-US GAIN-US TSLX-US GLAD-US FDUS-US MFIC-US CSWC-US ARCC-US CION-US FS
Slide 21: Solid Performance as Compared to the Industry
Solid Performance as Compared to the Industry Interest % on Portfolio LTM NII Yield LTM ROE Regulatory Debt/Equity 13.0% 15% 10% 180% 9.3% 11.9% 14% 161.4% 12.0% 9% 11.5% 160% 11.2% 12.8% 8.3% 13% 11.0% 8% 140% 12% 11.5% 11.6% 7.0% 118.3% 10.0% 7% 120% 11% 113.2% 9.0% 10% 6% 100% SAR BDC BDC SAR BDC
Slide 22: Establishing Competitive Edge vs. Other BDCs
Establishing Competitive Edge vs. Other BDCs Outstanding performance characteristics Increased quarterly dividend by 241% since program launched; Latest dividend declared of $0.75 ► Strong long-term dividend per share for the quarter ended August 31, 2025, to be paid in monthly installments, up 1% o
Slide 23: Objectives for the Future
Objectives for the Future • Expand our asset base without sacrificing credit quality while benefitting from scale • Increase our capacity to source, analyze, close and manage our investments by adding to our management team and processes • Utilize benefits of fully deploying diverse and available fi
Slide 24: Questions?
Questions? & K' SARATOGA Pt INVESTMENT CORP.
Slide 25: Appendix
Appendix & K' SARATOGA Pt INVESTMENT CORP.
Slide 26: KPIs – Balance Sheet – Q1 FY26
KPIs – Balance Sheet – Q1 FY26 FMV Investment Portfolio FMV Investment Portfolio Period (in millions) (in millions) Q1-24 $ 1,084.1 $1,150.0 Q2-24 $ 1,098.9 $1,100.0 Q3-24 $ 1,114.0 $1,050.0 Q4-24 $ 1,138.8 Q1-25 $ 1,095.6 $1,000.0 Q2-25 $ 1,040.7 $950.0 Q3-25 $ 960.1 $900.0 Q4-25 $ 978.1 Q1-24 Q2-2
Slide 27: KPIs – Income Statement – Q1 FY26
KPIs – Income Statement – Q1 FY26 Net Interest Margin Net Interest Margin Excluding CLO Period (in millions) (in millions) Q1-24 $ 17.5 $28.0 Q2-24 $ 19.6 Q3-24 $ 19.8 $25.0 Q4-24 $ 20.3 $22.0 Q1-25 $ 21.0 $19.0 Q2-25 $ 25.9 $16.0 Q3-25 $ 17.4 $13.0 Q4-25 $ 13.3 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q
Slide 28: KPIs – Income Statement – Q1 FY26 (continued)
KPIs – Income Statement – Q1 FY26 (continued) EPS $1.00 Period EPS Q1-24 $ (0.02) $0.75 Q2-24 $ 0.65 Q3-24 $ (0.31) $0.50 Q4-24 $ 0.39 $0.25 Q1-25 $ 0.48 Q2-25 $ 0.97 $- Q3-25 $ 0.64 Q4-25 $ (0.05) $(0.25) Q1-26 $ 0.91 $(0.50) Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Q4-25 Q1-26 LTM ROE Period LTM
Slide 29: KPIs - SAR Net Interest Margin Grew Significantly
KPIs - SAR Net Interest Margin Grew Significantly SAR Net Interest Margin down 7% the past year but up over sixfold since taking over management Net Interest Margin $78,605 $78,963 $73,171 $52,456 $38,964 $38,127 $33,364 $30,236 $24,185 $19,460 $17,309 $18,414 $14,096 $11,904 FY13 FY14 FY15 FY16 FY1
Slide 30: SAR Non-Accruals vs. BDC Industry
SAR Non-Accruals vs. BDC Industry SAR investments on non-accrual status have remained low and steady at 0.6% of cost, while the BDC industry average has increased 0.3% this past quarter to 3.7% of cost (6x more than Saratoga) Non-Accruals at Cost 4.0% 3.7% 3.5% 3.0% 2.6% 2.5% 2.0% 1.5% 1.0% 0.6% 0.5