Goldman Sachs BDC Inc. reported earnings for the third quarter of 2025 that surpassed consensus expectations. Earnings per share rose to $0.40, beating the $0.37 estimate by $0.03, an 8.1% beat. Revenue reached $91.6 million, outpacing the $88.53 million consensus by $3.07 million, a 3.5% surprise. The quarter’s results followed a decline in revenue from $110.41 million in Q3 2024 and a modest increase from $90.97 million in Q2 2025, while EPS fell from $0.58 in Q3 2024 to $0.38 in Q2 2025. The earnings beat is largely attributable to a surge in M&A activity—total dollar volume up 40.9% year‑over‑year—combined with record new investment commitments of $470.6 million across 27 portfolio companies, all first‑lien loans. Strong cost discipline and a favorable portfolio mix helped offset the decline in revenue compared to the prior year.
The company declared a base dividend of $0.32 per share and a supplemental dividend of $0.04 per share, reflecting its dividend policy for the quarter. Net asset value per share stood at $12.75, a 2.1% decline from the previous quarter, driven by net unrealized losses and markdowns on under‑performing names. The NAV drop signals a modest erosion in portfolio quality, but the company’s conservative risk profile—98.2% of assets are senior secured debt and 96.7% are first‑lien—provides a buffer against credit deterioration.
Portfolio quality remains strong, with the majority of assets held as senior secured debt and a high concentration of first‑lien positions. The firm’s proprietary framework for assessing software and AI disruption risk has been in place for over two years, helping to mitigate emerging credit risks. Non‑accrual status for investments has decreased, indicating improved portfolio performance. Management highlighted the advantage of proximity to Goldman Sachs’ investment banking franchise, which facilitates deal sourcing and underwriting expertise.
Vivek Bantwal, Global Head of Financing Group, noted that the 40.9% year‑over‑year increase in M&A dollar volume was driven by a renewed risk‑on sentiment, lower borrowing costs, and a reset in valuation expectations. He added that the firm’s new investment commitments and repayments reached the highest level since the platform’s integration in 2022, underscoring the strength of its deal pipeline. Co‑CEO David Miller reported that the $470.6 million in new commitments represented the highest level since Q4 2021, with 100% of originations in first‑lien loans. President & COO Tucker Greene emphasized the $374.4 million in repayments, highlighting the firm’s ability to generate cash from its portfolio.
Investors reacted positively to the earnings beat and dividend declaration, with analysts noting the company’s robust M&A activity and conservative risk profile as key drivers of the favorable results. The earnings beat, combined with a solid dividend payout and a strong portfolio mix, reinforced confidence in the firm’s ability to navigate a lower yield environment while maintaining income generation.
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