Ares Capital Corporation Announces September 30, 2026 Financial Results and Declares Fourth Quarter 2026 Dividend of $0.48 Per Share Dividend Declarations

Ares Capital posts lower earnings but maintains dividend and strong liquidity position.

What the company is saying

Ares Capital Corporation reports a third quarter 2026 GAAP net income of $319 million, or $0.44 per share, down from $404 million, or $0.57 per share, a year earlier. The company highlights a fourth quarter 2026 dividend of $0.48 per share, payable December 29, 2026, and emphasizes continued healthy portfolio performance, stable credit quality, and historically low non-accruals. CEO Kort Schnabel frames the results as 'solid' despite a slower transaction environment, citing a meaningful increase in investment backlog and stronger activity entering Q4. CFO Scott Lem underscores strengthened funding through a $750 million unsecured note issuance and a $709 million CLO refinancing, as well as $7 billion in available liquidity and prudent leverage. The announcement stresses market leadership, scale, and the expected benefit from higher yields and the acquisition of MidCap Financial Investment Corporation. The tone is confident but acknowledges a measured pace of originations and a more challenging transaction environment.

What the data suggests

The data shows a year-over-year decline in key financial metrics: GAAP net income fell to $319 million from $404 million, and EPS dropped to $0.44 from $0.57. Core EPS decreased to $0.46 from $0.50, and net investment income slipped to $328 million from $338 million. Net asset value per share declined from $19.94 at year-end 2025 to $19.31 at September 30, 2026. Portfolio investments at fair value decreased slightly to $29.2 billion, with exits of commitments ($2.47 billion) outpacing new gross commitments ($2.11 billion) in the quarter. The debt/equity ratio remains elevated at 1.11x, and total assets and equity both declined. Despite these negative trends, the company maintains a high level of liquidity with $722 million in cash and $6.9 billion available under credit facilities. The portfolio remains diversified, with 70% in floating rate securities and a weighted average yield on debt and income-producing securities of 10.6% at amortized cost. The company completed significant capital markets activity, including a $750 million unsecured note issuance at 6.25% and a $709 million CLO refinancing, reducing funding costs and extending maturities. Recent new investment commitments totaled $1.1 billion in October, with $855 million funded, indicating ongoing origination activity.

Analysis

The announcement is a factual quarterly update with comprehensive disclosure of realised financial and operational metrics. Nearly all key claims are supported by hard numbers for the third quarter of 2026, including net income, EPS, net investment income, portfolio value, leverage, and dividend actions. The only forward-looking statements are general outlook comments and the declaration of a dividend payable in the near future, which is standard and not promotional. There is no exaggerated language or narrative inflation; the tone is measured and consistent with the data. Importantly, the financial direction is negative, with year-over-year declines in net income, EPS, and net asset value per share, and a higher debt/equity ratio. The company does not attempt to frame these deteriorations as positive, nor does it overstate future benefits or make aspirational claims unsupported by evidence.

Risk flags

• ●Earnings and net asset value are declining, with GAAP net income, EPS, and NAV per share all lower year-over-year. This trend, if sustained, could pressure future dividend sustainability and investor confidence.
• ●Leverage remains high, with a debt/equity ratio of 1.11x and $15.5 billion in total debt, increasing sensitivity to credit market conditions and refinancing risk.
• ●Net realized losses of $52 million and a reduction in new investment commitments versus exits suggest a less favorable origination environment and potential headwinds to portfolio growth.
• ●While liquidity is strong, continued reliance on capital markets for funding, including recent large note issuances and CLO refinancings, exposes the company to shifts in market rates and investor appetite.
• ●Management's forward-looking optimism is not yet supported by a reversal in negative financial trends, and execution risk remains around integration of acquisitions and realization of higher yields.

Bottom line

Ares Capital's third quarter update reveals weaker earnings and a declining net asset value, but the company is maintaining its $0.48 per share dividend and has ample liquidity to support operations and new investments. Management is confident in the portfolio's credit quality and points to a rebound in transaction activity, but the numbers show that exits are outpacing new commitments and leverage remains high. Recent capital markets activity has improved funding flexibility and extended maturities, but the financial trajectory is negative for now. Investors should watch for evidence of earnings stabilization or growth, successful integration of the MidCap Financial acquisition, and whether origination activity translates into improved results. The most important takeaway is that while the dividend is being maintained, underlying profitability and asset values are under pressure.

Announcement summary

(NASDAQ:ARCC) Ares Capital Corporation announced that its Board of Directors has declared a fourth quarter 2026 dividend of $0.48 per share, payable on December 29, 2026 to stockholders of record as of December 15, 2026. For the third quarter ended September 30, 2026, Ares Capital reported GAAP net income of $319 million, or $0.44 per share, compared to $404 million, or $0.57 per share, in the third quarter of 2025. Core EPS for the third quarter of 2026 was $0.46, versus $0.50 in the prior year period. Net investment income for the quarter was $328 million, or $0.46 per share, compared to $338 million, or $0.48 per share, in Q3 2025. Net realized losses for the quarter were $52 million, or $0.07 per share, while net unrealized gains were $43 million, or $0.05 per share. As of September 30, 2026, portfolio investments at fair value totaled $29,213 million, total assets were $30,596 million, and stockholders' equity was $13,946 million. Net asset value per share was $19.31 at quarter end, down from $19.94 at December 31, 2025. The debt/equity ratio was 1.11x, or 1.06x net of available cash. During the third quarter of 2026, gross investment commitments were $2,109 million, with exits of commitments totaling $2,473 million. The number of portfolio company investments was 636 as of September 30, 2026. The fair value of accruing debt and other income producing securities was $26,050 million. Approximately 70% of the portfolio at fair value was in floating rate securities. Weighted average yields on debt and other income producing securities at amortized cost were 10.6%, and at fair value were 10.8%. In the third quarter, Ares Capital made new investment commitments of approximately $2.1 billion, of which approximately $1.6 billion were funded, and funded approximately $711 million related to previously existing unfunded revolving and delayed draw loan commitments. Ares Capital exited approximately $2.5 billion of investment commitments, including approximately $1.2 billion of loans sold to Ivy Hill Asset Management, L.P. (IHAM) or certain vehicles managed by IHAM. As of September 30, 2026, Ares Capital had $722 million in cash and cash equivalents, $15.5 billion in total aggregate principal amount of debt outstanding ($15.1 billion at carrying value), and approximately $6.9 billion available for additional borrowings under existing credit facilities. In July 2026, Ares Capital's subsidiary completed a refinancing of its approximately $702 million term debt securitization with an approximately $709 million term debt securitization. In September 2026, Ares Capital issued $750 million in aggregate principal amount of unsecured notes bearing interest at 6.250% per annum and maturing on September 15, 2033. The company also entered into an interest rate swap for a total notional amount of $750 million maturing on September 15, 2033. The third quarter 2026 dividend of $0.48 per share, totaling approximately $346 million, was paid on September 30, 2026. From October 1, 2026 through October 22, 2026, Ares Capital made new investment commitments of approximately $1.1 billion, of which approximately $855 million were funded.

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