The business development company reported core earnings per share of $0.47, but this was below the $0.50 reported in the same quarter of the previous year.
As of June 30, 2026, Ares Capital’s investment portfolio totaled $29.3 billion (at fair value). This represents a slight decrease from $29.5 billion in the previous quarter but an increase from $27.9 billion in the same quarter of the prior year. The portfolio comprised 619 companies, compared with 566 in the same period of the prior year. The 15 largest holdings accounted for 26.7% of the total portfolio, with Ivy Hill Asset Management representing 9.7% and the Senior Direct Lending Program accounting for 3.9%. The remaining 604 portfolio companies accounted for 73.3% of total investments, underscoring the firm’s broad diversification in the middle-market lending sector.
However, net asset value per share fell from $19.59 in the first quarter and $19.90 in the same quarter of the prior year to $19.35, representing a decline of $0.55 per share over the past twelve months.
Portfolio performance in the second quarter reflected a more cautious market environment. Gross commitments totaled $2.6 billion, down from $3.2 billion in the first quarter, while outflows reached $2.9 billion, resulting in negative net commitments of $323 million.
Non-performing loans (at amortized cost) increased to $708 million, or 2.4% of the total investment portfolio, compared with $546 million, or 2.0%, in the prior year. At fair value, non-performing loans totaled $405 million, or 1.4%, compared to $327 million, or 1.2%, in the prior year.
Balance Sheet and Liquidity Position
Ares Capital’s balance sheet reflected increased debt and strategic debt management. Total debt as of June 30, 2026, amounted to $15.8 billion, compared to $14.1 billion in the prior year. The debt-to-equity ratio was 1.15 and 1.12, respectively (after deducting available cash), compared to 1.01 and 0.98 in the same period of the prior year.
Ares Capital has maintained the regular quarterly dividend for the third quarter of 2026 at $0.48 per share, as in recent quarters.
Dividend coverage appears secure based on current earnings and accumulated retained earnings. The company estimates that it will carry forward a surplus of taxable income of approximately $988 million, or $1.38 per share, from 2025 and distribute it to shareholders in 2026. This substantial buffer allows the company to maintain the dividend even if short-term earnings come under pressure due to market fluctuations or credit events.
Operating earnings of $0.47 per share fell slightly short of the quarterly dividend of $0.48, but this small shortfall will be easily offset by follow-on earnings and reflects the company’s long-term approach to dividend sustainability rather than seeking a quarterly adjustment.
