Great Elm Capital Corp. reported its third‑quarter 2025 results on November 4, 2025, showing a sharp decline in net asset value (NAV) to $10.01 per share from $12.10 at the end of Q2. Net investment income (NII) fell to $2.4 million, or $0.20 per share, missing analyst expectations of $0.2625 per share, while revenue of $10.6 million slightly beat the consensus estimate of $10.59 million. The company posted a net loss of $1.79 million, translating to an earnings per share of ($1.79).
The drop in NAV was driven primarily by the bankruptcy of First Brands, which created substantial unrealized losses in Great Elm’s portfolio. In addition, uneven cash flows from the company’s CLO joint‑venture (JV) distributions further eroded NII, and the absence of a preference‑share dividend removed a key source of income that had supported the previous quarter’s performance. These factors combined to produce the largest quarterly decline in NAV since the company’s inception.
Despite the earnings miss, Great Elm strengthened its balance sheet. The firm raised $27 million in equity through an at‑the‑market offering and a private placement, and it refinanced its high‑cost 8.75 % GECCZ notes with new 7.75 % GECCG notes, saving roughly $0.4 million in annual interest expense. The company also doubled its revolving credit facility to $50 million and lowered the interest rate, providing greater liquidity for future deployments. A $10 million share‑repurchase program was authorized, underscoring management’s confidence in the company’s long‑term value.
CEO Matt Kaplan said the company expects NII to rebound in Q4 as CLO JV distributions normalize and new investments generate income. He highlighted the company’s “ample liquidity” and a debt‑to‑equity ratio of about 1.5×, noting that the equity raise and debt refinancing have positioned Great Elm to deploy capital into additional cash‑generating opportunities. Kaplan also emphasized that the company is actively managing portfolio risk and has begun realizing distributions on non‑yielding CoreWeave equity investments.
Investors have responded positively to the company’s proactive balance‑sheet actions. The maintenance of a $0.37 quarterly dividend and the authorization of a share‑repurchase program, coupled with the debt refinancing and credit‑facility expansion, have helped sustain investor confidence despite the earnings miss and NAV decline. The company’s outlook for a recovery in NII and its focus on deploying capital into high‑return investments signal a strategic path toward restoring shareholder value.
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