PFLT · PennantPark Floating Rate Capital Ltd.

Net income for the quarter ended March 31, 2026, reached $28.7 million, a marked increase from $1.2 million in the prior-year quarter. This improvement stems primarily from the operating performance of our portfolio, influenced by changes in capital market conditions, alongside shifts in the size, cost, and yield of our debt portfolio and associated financing costs. Portfolio expansion has driven higher investment income, as the larger debt portfolio generates more revenue, though this has been tempered by rising expenses.

Expenses increased due to elevated interest costs from additional borrowings, which were undertaken to fund the growing investment portfolio. Net investment income decreased as a result of this higher interest expense combined with one-time credit facility amendment and debt issuance costs. These dynamics highlight the leverage employed to scale the portfolio, where incremental borrowing costs rise alongside investment income potential, pressuring margins but supporting overall net income through portfolio gains.

Cash flow from operating activities transformed dramatically to $172.9 million provided, reversing a $350.8 million use in the prior-year period. Operating activities reflect cash used in investment pursuits, offset by robust financing inflows. Key sources included borrowings under the Credit Facility, proceeds from the 2037 Asset-Backed debt issuance, and public offerings via the 2024 ATM Program. This financing structure enabled portfolio growth while generating positive operating cash, demonstrating effective capital deployment amid expanding scale.

Forward considerations include the ability to originate loans, maintain profitability margins, and access capital, amid market uncertainties. These factors underscore performance reliance on portfolio execution and financing efficiency.