Ares Capital Corporation reported first‑quarter 2026 results on April 28 2026, delivering net income of $92 million and earnings per share of $0.13. Adjusted earnings, or core EPS, stood at $0.47 per share, while revenue for the quarter was $763 million, slightly below the consensus estimate of $769 million and lower than the higher estimates of $776.36 million reported by some analysts.
Revenue fell short of expectations primarily because loan originations were modest and the company recorded a $412 million net unrealized loss on its portfolio, which weighed on GAAP income. The miss in core earnings was driven by the same unrealized losses, which reduced the earnings base that supports the dividend payout. Net investment income rose to $398 million from $365 million in the prior year, reflecting stronger loan performance and higher interest income.
Net income of $92 million was impacted by the $412 million unrealized loss, which also lowered the net asset value per share to $19.59 from $19.94 at the end of 2025. Despite this hit, Ares Capital’s liquidity remained robust, with approximately $6.0 billion in cash and equivalents, giving the company a solid buffer to support ongoing operations and dividend payments.
The Board declared a second‑quarter dividend of $0.48 per share, payable on June 30 2026 to shareholders of record as of June 15 2026. The dividend is fully covered by net investment income per share of $0.55, indicating that earnings from the core lending business are sufficient to sustain the payout even though core EPS was slightly below the dividend level.
Management highlighted the resilience of its portfolio and the improving market conditions. CEO Kort Schnabel said, "In an environment characterized by heightened volatility and reduced transaction activity, we are seeing improving lending conditions, including enhanced spreads and fees, lower leverage and more attractive terms and documentation." CFO Scott Lem added, "The firm raised over $1.25 billion of new debt financing during the quarter at attractive terms, including a $750 million unsecured notes issuance at 5.25% maturing in April 2031, and expanded its SMBC revolving funding facility from $1.1 billion to $1.6 billion."
Investors focused on the miss in core earnings and revenue, and the impact of the $412 million unrealized loss, which tempered enthusiasm for the dividend. The company’s strong liquidity and continued ability to generate net investment income suggest that the dividend will remain sustainable, but the earnings miss signals that headwinds from market volatility and portfolio valuation pressures remain a concern for the near term.
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