Main Street Capital Q4 Earnings Beat, Shares Fall as Expenses Rise Y/Y

Main Street Capital Corporation’s MAIN fourth-quarter 2025 distributable net investment income of $1.09 per share surpassed the Zacks Consensus Estimate of $1.05. The reported figure compares favorably with $1.04 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. Given the concern, MAIN shares lost nearly 1.5% in yesterday's trading session.

Distributable net investment income (GAAP basis) was $98 million, up 6.9% from the prior-year quarter.

For 2025, the company reported distributable net investment income of $4.21 per share, which beat the Zacks Consensus Estimate of $4.19 per share. Also, the reported figure compares favorably with $4.16 per share in the year-ago period. Distributable net investment income was $375.9 million, up 4.1% year over year.

MAIN’s Total Investment Income & Expenses Rise

Fourth-quarter total investment income was $145.5 million, up 3.6% year over year. The rise was driven by an increase in dividend and fee income. Also, the top line surpassed the Zacks Consensus Estimate by 3.3%.

For 2025, total investment income was $566.4 million, up 4.7% year over year. The top line also surpassed the Zacks Consensus Estimate by nearly 1%.

Total expenses were $51.4 million, up 2.7% year over year. The increase was due to a rise in almost all the components except interest expenses.

Portfolio Activities for Main Street Capital

In the fourth quarter, the company invested $300 million in its lower middle market (LMM) portfolio. Of this amount, $241 million was invested in new portfolio companies. In comparison, the total LMM portfolio investment in the year-ago quarter was $167.6 million.

Main Street Capital completed $231.4 million in total private loan portfolio investments, up from $108 million in the prior-year quarter.

Main Street Capital’s Balance Sheet Position

As of Dec. 31, 2025, the company’s cash and cash equivalents totaled $41.9 million, which increased from $30.6 million as of Sept. 30, 2025.

The company has an aggregate unused capacity of $1.22 billion under its corporate revolving credit facility, down 20.1% from the prior quarter.

As of Dec. 31, 2025, total assets were $5.7 billion, up 7.5% from the previous quarter.

Net asset value was $33.33 per share, up from $32.78 as of Sept. 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 remains 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 fourth-quarter 2025 net investment income of 48 cents per share met the Zacks Consensus Estimate. The bottom line, however, declined 2% from the year-ago quarter.

The results of HTGC were primarily aided by an increase in the total investment income. Also, the balance sheet position remained decent, and new commitments were robust. However, a rise in operating expenses was a headwind.

Ares Capital Corporation’s ARCC fourth-quarter 2025 core earnings of 50 cents per share met the Zacks Consensus Estimate. The bottom line fell 9.1% from the prior-year quarter.

The results primarily benefited from higher total investment income. ARCC’s robust portfolio activities offered some support. However, higher expenses were the undermining factor.

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

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