Ares Capital Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• GAAP net income for the quarter ended September 30, 2026, was $319 million ($0.44 per share), compared to $404 million ($0.57 per share) in the same period of 2025.
• Core EPS was $0.46 for the quarter, down from $0.50 in the prior year period.
• Net investment income was $328 million ($0.46 per share), a decrease from $338 million ($0.48 per share) in Q3 2025.
• Net realized losses on investments were $52 million ($0.07 per share), compared to net realized gains of $162 million ($0.23 per share) in Q3 2025.
• Net unrealized gains were $43 million ($0.05 per share), compared to net unrealized losses of $96 million ($0.14 per share) in Q3 2025.
• Total assets were $30,596 million as of September 30, 2026, down from $31,235 million as of December 31, 2025.
• Stockholders' equity was $13,946 million as of September 30, 2026, down from $14,318 million as of December 31, 2025.
• Net asset value per share was $19.31 as of September 30, 2026, down from $19.94 as of December 31, 2025.
• Debt/equity ratio was 1.11x as of September 30, 2026, compared to 1.12x as of December 31, 2025.
• Debt/equity ratio, net of available cash, was 1.06x as of September 30, 2026, compared to 1.08x as of December 31, 2025.
• Portfolio investments at fair value were $29,213 million as of September 30, 2026, down from $29,485 million as of December 31, 2025.
• Total debt outstanding was $15.5 billion ($15.1 billion at carrying value) as of September 30, 2026.

Guidance and Future Outlook:

• Management noted that while the transaction environment was slower during the quarter, the investment backlog increased meaningfully from the previous quarter.
• Management expects stronger transaction activity entering the fourth quarter.
• Management cited the expected benefit from higher yields and the recently announced acquisition of MidCap Financial Investment Corporation as reinforcing strong underlying earnings power.
• Management expressed confidence in the current level of the regular quarterly dividend.

Business Segments and Product Lines:

• New investment commitments in Q3 2026 totaled $2.1 billion, with $1.6 billion funded; 71% were first lien senior secured loans, 18% were investments in Ivy Hill Asset Management, L.P. (IHAM), 7% were senior subordinated loans, 2% were second lien senior secured loans, 1% were preferred equity, and 1% were other equity.
• 85% of new commitments in Q3 2026 were floating rate debt securities, with 74% containing interest rate floors.
• The weighted average yield on debt and other income producing securities funded during Q3 2026 at amortized cost was 10.4%.
• Exits of investment commitments in Q3 2026 totaled $2.5 billion, including $1.2 billion of loans sold to IHAM or vehicles managed by IHAM.
• 95% of exited commitments in Q3 2026 were floating rate.
• As of September 30, 2026, the portfolio consisted of 636 portfolio company investments.
• 70% of the portfolio at fair value consisted of floating rate securities.
• Weighted average yield on debt and other income producing securities at fair value was 10.8% as of September 30, 2026, up from 10.3% as of December 31, 2025.
• Asset class composition as of September 30, 2026: First lien senior secured loans (58%), Ivy Hill Asset Management (10%), Other equity (9%), Preferred equity (8%), Senior subordinated loans (7%), Second lien senior secured loans (4%), and Subordinated certificates of the SDLP (4%).

Market and Competitive Landscape:

• Ares Capital is the largest publicly traded BDC by market capitalization as of September 30, 2026.
• The portfolio's weighted average grade at fair value remained stable at 3.1 as of both September 30, 2026, and December 31, 2025.
• Loans on non-accrual status represented 2.4% of total investments at amortized cost (1.4% at fair value) as of September 30, 2026.

Risks and Challenges:

• Net income can vary substantially from period to period due to factors including the level of new investment commitments, recognition of realized gains/losses, and unrealized appreciation/depreciation.
• Management noted a slower transaction environment led to a more measured pace of originations during the quarter.
• There is no assurance that Ares Capital will be able to sell all or a portion of new investment commitments or that investments in the backlog will close.

Management Commentary and Tone:

• Kort Schnabel, CEO, described results as "solid" supported by "continued healthy portfolio performance," "stable credit quality," and "historically low levels of non-accruing loans and problem assets."
• Scott Lem, CFO, stated the company "further strengthened its funding profile while maintaining significant financial flexibility."
• Management highlighted the ability to support investment activity and future growth due to approximately $7 billion of available liquidity, prudent leverage, and limited near-term maturities.

Other Key Points:

• The Board declared a fourth quarter 2026 dividend of $0.48 per share, payable on December 29, 2026, to stockholders of record as of December 15, 2026.
• A third quarter 2026 dividend of $0.48 per share (totaling approximately $346 million) was paid on September 30, 2026.
• In July 2026, Ares Capital refinanced its ADL CLO 1 term debt securitization, reducing the blended weighted average spread from 1.86% to 1.51% and extending maturity to July 25, 2038.
• In July 2026, Ares Capital repaid $1 billion in unsecured notes upon maturity.
• In September 2026, Ares Capital issued $750 million in unsecured notes maturing in 2033 at a 6.250% interest rate.
• From October 1, 2026, through October 22, 2026, Ares Capital made new investment commitments of approximately $1.1 billion and exited approximately $727 million.
• As of October 22, 2026, the investment backlog was approximately $2.5 billion.
• On October 26, 2026, Ares Capital entered into a definitive agreement to acquire MidCap Financial Investment Corporation in a cash and stock transaction.