Main Street Capital Q3 Earnings Miss Estimates, Expenses Rise Y/Y

Main Street Capital Corporation’s MAIN third-quarter 2025 adjusted net investment income of 97 cents per share missed the Zacks Consensus Estimate of $1.04. The reported figure compares unfavorably with $1 per share in the year-ago quarter.

The results benefited from an improvement in the total investment income. However, an increase in expenses acted as a spoilsport.

Distributable net investment income (GAAP basis) was $92.7 million, up 3% from the prior-year quarter.

MAIN’s Total Investment Income & Expenses Rise

Third-quarter total investment income was $139.8 million, up 2% year over year. The rise was driven by an increase in dividend and fee income. However, the top line missed the Zacks Consensus Estimate by 0.6%.

Total expenses were $50.3 million, up 2.2% year over year. The increase was due to a rise in all the components of expenses.

Portfolio Activities for Main Street Capital

In the third quarter, the company invested $106.2 million in its lower middle market (LMM) portfolio. Of this amount, $69 million was invested in new portfolio companies. In comparison, the total LMM portfolio investment in the year-ago quarter was $51.6 million.

Main Street Capital completed $113.3 million in total private loan portfolio investments, down from $309.3 million in the prior-year quarter.

The net decrease in the total cost basis of the middle market investment portfolio was $14.8 million compared with $4.3 million in the year-ago quarter.

Main Street Capital’s Balance Sheet Position

As of Sept. 30, 2025, the company’s cash and cash equivalents totaled $30.6 million, which decreased from $86.9 million as of June 30, 2025.

The company has an aggregate unused capacity of $1.53 billion under its corporate revolving credit facility, up 21.4% from the prior quarter.

As of Sept. 30, 2025, total assets were $5.3 billion, marginally down from the previous quarter.

Net asset value was $32.78 per share, up from $32.30 as of June 30, 2025.

Our Take on MAIN

Growth in total investment income is expected to continue in the coming quarters, driven by increased demand for customized financing. Higher investment commitments are anticipated to continue boosting the company’s financial performance. However, an increase in the expense base is a near-term concern.    

Main Street Capital Corporation Price, Consensus and EPS Surprise

Main Street Capital Corporation price-consensus-eps-surprise-chart | Main Street Capital Corporation Quote

Main Street Capital currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other MAIN’s Peers

Hercules Capital Inc.’s HTGC third-quarter 2025 net investment income of 49 cents per share surpassed the Zacks Consensus Estimate by a penny. However, the bottom line declined 3.9% from the year-ago quarter.

HTGC’s results were primarily driven by higher total investment income. Also, the portfolio activity was robust in the quarter. However, an increase in expenses was the undermining factor.

Ares Capital Corporation’s ARCC third-quarter 2025 core earnings of 50 cents per share met the Zacks Consensus Estimate. However, the bottom line reflected a decline of 13.8% from the prior-year quarter.

The results were primarily aided by higher total investment income. Also, ARCC’s robust portfolio activities offered some support. However, higher expenses acted as a spoilsport.

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This article originally published on Zacks Investment Research (zacks.com).

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