Saratoga Investment Corp. · NYSE:SAR
Saratoga Investment — Q4 2025 Earnings Presentation
31 slides from Saratoga Investment's earnings presentation, May 8, 2025
Slide 1: Fiscal Year-End and Fourth Quarter 2025 Shareholder Presentation
Saratoga Investment Corp. Fiscal Year-End and Fourth Quarter 2025 Shareholder Presentation May 8, 2025
Slide 2: Steady Long-Term Performance in FY and Q4 2025
Steady Long-Term Performance in FY and Q4 2025 Fiscal Year-End and Fourth Quarter 2025 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
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% 10.3% 9.3% 9.4% 9.0% 10.0% 8.9% 8.9% 8.5% 8.5% 7.5% 7.5% 7.0% 7.2% 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 2019 FY 202
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 Solid $1,200 100% $1,139 $1,000 $973 $978 $800 $818 $600 80% 98.3% 96.8% 98.6% 99.0% 98.5% 98.1% 99.7% 95.9% $554 94.2% 94.1% 93.3% $486 90.5% $400 82.4% $402 $343 $284 $293 $200 $24
Slide 5: Q4 FY25: Strong Financial Foundation
Q4 FY25: Strong Financial Foundation Key Performance Metrics for the Fiscal Quarter For the quarter ended and as of February 29, 2024 November 30, 2024 February 28, 2025 ($ in millions except per share) $13,000 $10,000 Net investment income $12.8 $12.4 $8.0 $7,000 $13,000 Adjusted net investment inc
Slide 6: FY25: Strong Financial Foundation
FY25: Strong Financial Foundation Key Performance Metrics for the Fiscal Year For the year ended and as of February 28, 2023 February 29, 2024 February 28, 2025 ($ in millions except per share) $60,000 Net investment income $35.2 $56.9 $53.0 $40,000 $20,000 $60,000 Adjusted net investment income1 $3
Slide 7: 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 FY25) NAV: 5% increase this quarter. 357% increase since Saratoga took over management. NAV/Share: 4% decrease this quarter. 18% increase since FY17 with increases 22 of the last 30 qu
Slide 8: Quarterly Reconciliation of NII and NAV per Share
Quarterly Reconciliation of NII and NAV per Share (1) Reconciliation of Quarterly Adjusted NII per Share $(0.13) $(0.22) $0.90 $(0.03) $(0.03) $0.01 $0.06 $0.56 Adjusted NII per Decrease due to Decrease in Decrease in Decrease in Decrease in Decrease due to Adjusted NII per Share for Q3 FY25 impact
Slide 9: Annual Reconciliation of NII and NAV per Share
Annual Reconciliation of NII and NAV per Share (1) Reconciliation of Annual Adjusted NII per Share $0.11 $0.05 ($ $(0.03) $(0.07) $(0.37) $0.02 $4.10 $3.81 Adjusted NII per Increase in non-CLO Increase in Decrease in Decrease due to Increase in Decrease due to Adjusted NII per Share for FY24 net int
Slide 10: Dry Powder Remains Available
Dry Powder Remains Available Total Borrowing Available Remaining Fixed / (As of February 28, 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 $20.0
Slide 11: Portfolio Composition and Yield
Portfolio Composition and Yield Portfolio Composition – $978.1m Portfolio Yield – 10.8% (Based on Fair Values (Weighted Average as of February 28, 2025) Current Yield of Total Existing Portfolio) Structured Second Lien Finance Structured Common Second Lien Finance Common 0.7% Securities Equity 16.7%
Slide 12: Yield of BDC Grew With Rising Rates
Yield of BDC Grew With Rising Rates 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% Totals1 12.6% $1,000 16.4% 7.4% $800 8.9% $ Millions $600 11.6% 12.6% 11.4% 11.5% $400 12.1% 14.6% 5.9% 5.3% 21.2% 9.5% 7.6% 14.0% 6.2% 16.4% 9.
Slide 13: Diversified Across Geography
Diversified Across Geography Investments Diversified Geographically Northeast Southwest 13.2% 6.5% West 12.3% Other 6.8% Midwest 37.3% Northwest 0.0% Southeast 23.9% 13
Slide 14: Diversified Across Industry
Diversified Across Industry Investments across 40 distinct industries Municipal Government Software, 3.0% Health/Fitness Franchisor, 2.9% Cutsom Millwork Software, 3.2% Restaurant, 3.2% Education Services, 2.8% Talent Acquisition Software, 2.8% Employee Collaboration Software, 2.8% Mental Healthcare
Slide 15: 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 $ in thousands (all investments) $50,000 $42,877 $39,615 $40,000 $30,000 $20,000 $12,368 $13,398 $8,495 $10,000 $4,874 $1,271 $3,276 $562 $226 $22 $154 $0 -$10,000 -$
Slide 16: Exercising Disciplined Investment Judgment
Exercising Disciplined Investment Judgment SAR Debt Multiples/Deals Closed (2019-2025)(1) Portfolio leverage with non-recurring revenue underwriting is 5.35x(2)(3) Average Middle Market 9/30/2024 12/31/2024 All Senior 3.95x 4.07x 1st Lien/Mezz 5.40x 4.86x 1st Lien/2nd Lien 4.56x 4.08x Unitranche 5.6
Slide 17: 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 18: 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%) 25% $18.7m 16% 20.7% $361.5m 20% $560.9m $331.9m 13.1% $1,202.6m 16.8% 11.7% $1,077.5m $176.5m $446.5m 12% 15.1% 10.4% 15% 13.5% 13.0% $384.1m 7.9% 8% 10% 4
Slide 19: SBIC II Debenture Repayments Commenced - SBIC III Availability
SBIC II Debenture Repayments Commenced - SBIC III Availability(1)(2) $350 $300 $136.0 $250 debentures undrawn $36.4 cash $ Millions $200 $17.4 cash $150 $100 $189.0 $167.7 $50 19% 17% $0 SBIC II SBIC III 1) SBIC III cash available for new originations and follow-ons in existing license, with SBIC II
Slide 20: Long-Term Consistent Dividend Growth
Long-Term Consistent Dividend Growth • Announced shift to monthly Dividends Per Share* dividend payment structure starting March 31, 2025 • Increased Q1 FY26 dividend to $0.75 per share; paid in $0.75 $0.74 $0.74 $0.74 $0.74 $0.73 $0.25 per share monthly $0.72 $0.71 $0.70 $0.69 $0.68 increments begi
Slide 21: SAR LTM Total Return Beats the BDC Index
SAR LTM Total Return Beats the BDC Index LTM Total Return (%) (March 2024 to March 2025) SAR 26% v BDC Index +13% 30.0% Hundreds 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 SAR US Equity SPBDC
Slide 22: BDC Total Return Comparison
-20 20 40 60 80 0 -60 -20 100 100 200 300 400 500 20 60 0 RAND-US RAND-US CGBD-US GLAD-US MAIN-US FDUS-US MAIN-US CGBD-US PFX-US PFX-US BXSL-US PNNT-US FSK-US GLAD-US HTGC-US SAR-US HTGC-US OFS-US SLRC-US BCSF-US MAIN-US TRIN-US FDUS-US PFLT-US SCM-US SCM-US GLAD-US PNNT-US MFIC-US SAR-US ARCC-US FS
Slide 23: Short-Term Performance Impacted by Discrete Restructurings
Short-Term Performance Impacted by Discrete Restructurings Interest % on Portfolio LTM NII Yield LTM ROE Regulatory Debt/Equity 13.0% 15% 10% 180% 14.1% 9.5% 11.9% 14% 162.9% 12.0% 8.9% 160% 11.5% 9% 11.2% 13% 11.0% 12.1% 12.1% 140% 8% 12% 7.5% 10.0% 7% 120% 113.2% 115.7% 11% 9.0% 10% 6% 100% SAR BD
Slide 24: Establishing Competitive Edge vs. Other BDCs
Establishing Competitive Edge vs. Other BDCs Outstanding performance characteristics Increased quarterly dividend by 211% since program launched until Covid deferral; Latest dividend ► Strong long-term dividend declared of $0.75 per share for the quarter ended May 31, 2025, up 1% over prior year and
Slide 25: 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 26: Questions?
Questions? & K' SARATOGA Pt INVESTMENT CORP.
Slide 27: Appendix
& K' SARATOGA Pt INVESTMENT CORP.
Slide 28: KPIs – Balance Sheet – Q4 FY25
KPIs – Balance Sheet – Q4 FY25 FMV Investment Po rtfo lio FMV Investment Portfolio Perio d (in millio ns) (in millions) Q4-23 $ 972.6 $1,200.0 Q1-24 $ 1,084.1 $1,100.0 Q2-24 $ 1,098.9 Q3-24 $ 1,114.0 $1,000.0 Q4-24 $ 1,138.8 Q1-25 $ 1,095.6 $900.0 Q2-25 $ 1,040.7 Q3-25 $ 960.1 $800.0 Q4-25 $ 978.1 Q
Slide 29: KPIs – Income Statement – Q4 FY25
KPIs – Income Statement – Q4 FY25 Net Interest Margin Net Interest Margin Excluding CLO Perio d (in millio ns) (in millions) Q4-23 $ 15.3 $28.0 Q1-24 $ 17.5 Q2-24 $ 19.6 $25.0 Q3-24 $ 19.8 $22.0 Q4-24 $ 20.3 $19.0 Q1-25 $ 21.0 $16.0 Q2-25 $ 25.9 Q3-25 $ 17.4 $13.0 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25
Slide 30: KPIs – Income Statement– Q4 FY25 (continued)
KPIs – Income Statement– Q4 FY25 (continued) EPS $2.00 Perio d EPS Q4-23 $ 1.62 $1.50 Q1-24 $ (0.02) Q2-24 $ 0.65 $1.00 Q3-24 $ (0.31) Q4-24 $ 0.39 $0.50 Q1-25 $ 0.48 Q2-25 $ 0.97 $- Q3-25 $ 0.64 Q4-25 $ (0.05) $(0.50) Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Q4-25 LTM ROE Perio d LTM ROE Q4-
Slide 31: KPIs - SAR Net Interest Margin Grew Significantly
KPIs - SAR Net Interest Margin Grew Significantly SAR Net Interest Margin stabilized this year with AUM and rate decreases after increasing sevenfold since taking over management Net Interest Margin $78,963 $78,605 $52,456 $38,964 $38,127 $33,364 $30,236 $24,185 $19,460 $18,414 $17,309 $14,096 $11,9