ARES CAPITAL CORP (ARCC): Results of Operations and Financial Condition
ARES CAPITAL CORP (ARCC) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 ARES CAPITAL CORPORATION ANNOUNCES JUNE 30, 2026 FINANCIAL RESULTS AND DECLARES THIRD QUARTER 2026 DIVIDEND OF $0.48 PER SHARE DIVIDEND DECLARATIONS New York, NY — July 29, 2026 — Ares Capital Corporation (“Ares Capital”) (NASDAQ: ARCC) announced that its Board of Di
How this was made
The 30-second read
Why it matters
The filing updates the market on income distribution (dividend amount and record/pay dates), earnings quality (Core EPS vs GAAP), and balance-sheet posture (NAV per share, debt/equity, and available liquidity).
Market read
Fresh dividend and quarterly financial/balance-sheet metrics can affect ARCC’s near-term valuation and income-demand positioning.
What to watch
Traders may underweight the significance of portfolio fair value changes, unrealized losses, and the sustainability of Core EPS versus GAAP earnings, especially in a slower transaction environment.
ARES CAPITAL CORPORATION ANNOUNCES JUNE 30, 2026 FINANCIAL RESULTS AND DECLARES THIRD QUARTER 2026 DIVIDEND OF $0.48 PER SHARE
Core EPS was $0.47 and net investment income was $359 million, while GAAP net income declined to $171 million amid $183 million of net unrealized losses. Management cited healthy portfolio performance and historically low levels of non-accruing loans and problem assets, but non-accrual status increased from December 31, 2025.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| GAAP net income per shareGAAP | $0.24 | – | – |
| Core EPSnon-GAAP | $0.47 | – | – |
| Net investment incomeGAAP | $359 million; $0.50 per share | – | – |
| Net realized gains (losses)GAAP | $(5) million; $(0.01) per share | – | – |
| Net unrealized lossesGAAP | $(183) million; $(0.25) per share | – | – |
| GAAP net incomeGAAP | $171 million; $0.24 per share | – | – |
| Gross commitmentsother | $2,592 million | – | – |
| Exits of commitmentsother | $2,915 million | – | – |
| Portfolio investments at fair valueother | $29,349 million | – | – |
| Net asset value per shareother | $19.35 | – | – |
| Debt/equity ratioother | 1.15x | – | – |
| Debt/equity ratio, net of available cashother | 1.12x | – | – |
Capital returns
- Third quarter 2026 dividend of $0.48 per share.
- The third quarter 2026 dividend is payable on September 30, 2026 to stockholders of record as of September 15, 2026.
- Dividends declared and payable were $0.48 per share in Q2-26 and $0.48 per share in Q2-25.
What drove it
- New investment commitments were approximately $2.6 billion, of which approximately $2.2 billion were funded.
- New commitments were made to 14 new portfolio companies, 41 existing portfolio companies and 3 additional existing portfolio companies purchased from the Senior Direct Lending Program.
- Of approximately $2.6 billion in new commitments, 68% were in first lien senior secured loans and 94% were in floating rate debt securities.
- The weighted average yield of debt and other income producing securities funded during the period at amortized cost was 9.4%, and the weighted average yield on total investments funded during the period at amortized cost was 9.1%.
- Ares Capital funded approximately $758 million related to previously existing unfunded revolving and delayed draw loan commitments.
- Ares Capital exited approximately $2.9 billion of investment commitments, including approximately $1.1 billion of loans sold to IHAM or certain vehicles managed by IHAM and approximately $361 million of loans sold to the SDLP.
- The weighted average yield on debt and other income producing securities at fair value was 10.5% as of June 30, 2026, compared with 10.3% as of December 31, 2025.
- First lien senior secured loans represented 59% of asset class percentage at fair value as of June 30, 2026.
Concerns
- GAAP net income was $171 million, compared with $361 million in Q2-25.
- Net unrealized losses were $(183) million, compared with $(15) million in Q2-25.
- Net realized gains (losses) were $(5) million, compared with $34 million in Q2-25.
- Core EPS was $0.47, compared with $0.50 in Q2-25.
- Loans on non-accrual status represented 2.4% of total investments at amortized cost, or 1.4% at fair value, as of June 30, 2026, compared with 1.8% at amortized cost, or 1.2% at fair value, as of December 31, 2025.
- Portfolio investments at fair value, total assets, stockholders’ equity and net asset value per share were lower as of June 30, 2026 than as of December 31, 2025.
What to watch
- Portfolio non-accrual status following the increase to 2.4% of total investments at amortized cost as of June 30, 2026.
- The effect of net unrealized gains and losses on GAAP net income.
- The pace of new investment commitments and exits in the slower transaction environment cited by management.
- Use of the commercial paper program and the January 2030 Notes as sources of financing.
- Portfolio yield, including the 10.5% weighted average yield on debt and other income producing securities at fair value.
Balance sheet and cash flow
- Portfolio investments at fair value were $29,349 million as of June 30, 2026 and $29,485 million as of December 31, 2025.
- Total assets were $30,498 million as of June 30, 2026 and $31,235 million as of December 31, 2025.
- Stockholders’ equity was $13,891 million as of June 30, 2026 and $14,318 million as of December 31, 2025.
- Net asset value per share was $19.35 as of June 30, 2026 and $19.94 as of December 31, 2025.
- Debt/equity ratio was 1.15x as of June 30, 2026 and 1.12x as of December 31, 2025.
- Debt/equity ratio, net of available cash, was 1.12x as of June 30, 2026 and 1.08x as of December 31, 2025.
- Ares Capital had $383 million in cash and cash equivalents and $15.9 billion in total aggregate principal amount of debt outstanding ($15.8 billion at carrying value) as of June 30, 2026.
- Subject to borrowing base and other restrictions, Ares Capital had approximately $6.7 billion available for additional borrowings under its existing credit facilities as of June 30, 2026.
- In May 2026, Ares Capital issued $800 million in aggregate principal amount of unsecured notes, which bear interest at a rate of 5.550% per annum and mature on January 15, 2030.
- Management stated that it raised approximately $1.2 billion of additional financing during the second quarter, including upsizing and extension of two bank-led revolving credit facilities.
- Management stated it ended the quarter with approximately $6.0 billion of available liquidity after giving effect to the repayment of unsecured notes that matured in July.
Analysis
Ares Capital reported second-quarter 2026 Core EPS of $0.47, compared with $0.50 in Q2-25, alongside net investment income of $359 million, or $0.50 per share, compared with $342 million, or $0.49 per share. The regular dividend remained $0.48 per share. Management characterized Core Earnings as consistent and cited healthy portfolio performance in a slower transaction environment.
GAAP results were materially lower than the prior-year period. GAAP net income was $171 million, or $0.24 per share, versus $361 million, or $0.52 per share, in Q2-25. The result included $(5) million of net realized gains (losses) and $(183) million of net unrealized losses, compared with $34 million of net realized gains and $(15) million of net unrealized losses in Q2-25. The filing notes that quarterly net income can vary substantially due to new investment commitments and realized and unrealized gains and losses.
Portfolio activity was active despite the transaction backdrop described by management. Gross commitments were $2,592 million and exits of commitments were $2,915 million. Approximately $2.6 billion of new commitments included 68% in first lien senior secured loans, while 94% were in floating rate debt securities. The weighted average yield on debt and other income producing securities at fair value was 10.5% as of June 30, 2026, compared with 10.3% as of December 31, 2025.
Credit quality requires attention. Loans on non-accrual status were 2.4% of total investments at amortized cost, or 1.4% at fair value, as of June 30, 2026, versus 1.8% at amortized cost, or 1.2% at fair value, as of December 31, 2025. At the same time, the weighted average portfolio grade at fair value was 3.1 at both dates. Portfolio investments at fair value were $29,349 million, compared with $29,485 million as of December 31, 2025.
The balance sheet showed $383 million in cash and cash equivalents, $15.9 billion in total aggregate principal amount of debt outstanding and approximately $6.7 billion available for additional borrowings under existing credit facilities as of June 30, 2026. The company issued $800 million of unsecured notes in May 2026 and management said it raised approximately $1.2 billion of additional financing during the quarter. No forward financial guidance was provided in the supplied filing text.
Management, verbatim
We reported solid second quarter results, supported by consistent Core Earnings, healthy portfolio performance and historically low levels of non-accruing loans and problem assets.
Kort Schnabel, Chief Executive Officer of Ares Capital
During the quarter, we also launched the first commercial paper program in the BDC sector, establishing access to a lower-cost source of capital while preserving the durability and flexibility that have long differentiated ARCC.
Scott Lem, Chief Financial Officer of Ares Capital
Not in the filing
stated, not guessed- Total revenue
- Revenue by segment
- Gross margin
- Operating income
- Operating expenses
- Income tax rate
- Operating cash flow
- Free cash flow
- Share repurchases
- Forward financial guidance
- Prior-quarter comparisons for operating results
- Percentage changes for operating results
- Complete liquidity and capital-resources disclosure, as the supplied filing text is truncated
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K with Exhibit 99.1 covering ARCC’s Q2 2026 financial results and a declared Q3 2026 dividend.
Ticker impact
ARCC declared a Q3 2026 dividend of $0.48/share and reported Q2 ended June 30, 2026 results including Core EPS and NAV per share.
Moderately positive bias, with traders focusing on dividend sustainability and NAV/leverage trajectory versus prior quarter.
The filing provides fresh, decision-relevant datapoints: declared dividend timing, Core EPS and GAAP results, NAV per share, debt/equity, and available liquidity, which are key for BDC income and credit-risk pricing.
Market effects
BDC peers may see read-across on funding costs and portfolio credit quality if ARCC’s liquidity and non-accruing levels are viewed as sector-representative.
Limited direct regional impact; primarily US credit and BDC income sentiment.
Low global relevance; impacts are mostly within US leveraged credit/BDC investor positioning.
Counterpoint
GAAP net income per share and realized/unrealized results were mixed (including net unrealized losses), so the dividend may be the main support while mark-to-market volatility remains a risk.
Key entities
- issuerAres Capital Corporation
BDC that reported Q2 2026 results and declared a Q3 2026 dividend of $0.48 per share.
- executiveKort Schnabel
CEO quoted on portfolio performance and dividend outlook.
- executiveScott Lem
CFO quoted on balance-sheet actions, financing, and liquidity.
