$ARCC · ARES CAPITAL CORP
Ares Capital Corporation filed its 10-Q for the quarter ended September 30, 2026. Net investment income was $328M ($0.44/share), down from $338M ($0.57/share) in Q3 2025. NAV per share declined to $19.31 from $19.94 at year-end 2025. Nine-month net unrealized losses ballooned to $552M vs. $174M a year ago, driving the nine-month net increase in stockholders' equity down to $582M from $1,006M.
- NAV per share declined to $19.31 at September 30, 2026, from $19.94 at December 31, 2025.
- Q3 net investment income fell to $328M from $338M YoY; total investment income dropped to $763M from $782M.
- Nine-month net unrealized losses widened to $552M vs. $174M in the prior-year period.
- Nine-month net increase in stockholders' equity from operations fell to $582M from $1,006M YoY.
- Capital structuring service fees halved to $23M in Q3 2026 from $48M in Q3 2025.
Extended-hours trading shows ARCC at $18.14, down 2.53% from the $18.61 regular close, suggesting the market is reacting negatively to the NAV erosion and earnings decline.
ARCC is the largest publicly traded BDC; a 3.2% NAV decline in nine months combined with a 42% drop in nine-month operating results signals that rate cuts are materially compressing returns.
ARCC's declining NAV and rising unrealized losses reflect the broader pressure on BDC portfolios from the rate-cutting cycle, compressing both net investment income and asset valuations.
Lower base rates are compressing the weighted average yield on the portfolio, directly reducing interest income. Unrealized depreciation of $552M over nine months signals credit stress in the underlying portfolio companies.