Oaktree Specialty Lending Corporation (OCSL) reported a GAAP net loss of $0.21 per share for its fiscal second quarter ended March 31 2026, on revenue of $70.4 million. The loss reflects a $53.3 million hit from realized and unrealized losses on software‑related investments, largely driven by a 310‑basis‑point decline in the fair value of performing software loans.
Adjusted net investment income fell to $33.7 million, or $0.38 per share, down from $36.1 million ($0.41 per share) in the prior quarter. The decline is attributed to lower reference rates, reduced fee activity, and the depreciation of certain software loans. The company’s net asset value per share dropped to $15.69 from $16.30, reflecting the write‑downs.
OCSL’s board declared a quarterly cash distribution of $0.34 per share for the quarter ending June 30 2026, consisting of a $0.30 regular dividend and a $0.04 supplemental dividend. The reduction from the $0.40 dividend paid in Q1 2026 is intended to preserve liquidity as the company continues to reduce non‑accrual investments and redeploy capital.
Management emphasized that the loss is not indicative of deteriorating fundamentals in the underlying portfolio. CEO Armen Panossian said the company is “making progress on reducing non‑accrual investments and selectively redeploying capital following investment exits, focusing on overall portfolio quality.” He added that the depreciation of software loans reflects market repricing rather than a decline in borrower credit quality.
Analysts noted that OCSL’s adjusted earnings per share beat consensus estimates of $0.36 by $0.02, while revenue missed the $73.5 million forecast by $3.1 million. The market reaction was muted, with the stock trading down 2 % after the release, driven primarily by the revenue miss and the GAAP loss.
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