Golub Capital BDC, Inc.

Hello, everyone, and welcome to GBDC's earnings call for the fiscal quarter and fiscal year ended September 30th, 2025. Before we begin, I'd like to take a moment to remind our listeners that remarks made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in GBDC's SEC filings. For materials we intend to refer to on today's earnings call, please visit the Investor Resources tab on the homepage of our website, which is www.golubcapitalbdc.com, and click on the Events and Presentations link. Our earnings release is also available on our website in the Investor Resources section. As a reminder, this call is being recorded. With that, I'm pleased to turn the call over to David Golub, Chief Executive Officer of GBDC.

Hello, everybody, and thanks for joining us today. I'm joined by my colleagues, Tim Topics and Chris Erickson. For those of you who are new to GBDC, our investment strategy is focused on providing first lien senior secured loans to healthy, resilient middle market companies that are backed by strong partnership-oriented private equity sponsors. Yesterday, we issued our earnings press release for the fiscal quarter and year-ended September 30th, 2025, and we posted an earnings presentation to our website. We'll be referring to that presentation during the call today. I'm going to start with headlines and a summary of performance for both the quarter and the fiscal year. Then Tim and Chris are going to go through our operating and financial performance for the quarter in more detail. And finally, I'll come back and wrap up with some observations on current market conditions and our outlook for the coming period. With that, let's jump in. So I see two primary headlines to today's news. The first, GBDC had a solid quarter and a strong end to fiscal year 2025. It was bolstered by solid credit results across our portfolio. Second, at the same time, the private credit direct lending market faces some headwinds, and GBDC is not immune from those headwinds. Let me expand and unpack each of these headlines. First, let's talk about performance. For the quarter, adjusted NII per share was $0.39, and that translates to an adjusted NII ROE of 10.4%. Adjusted net income per share was $0.36 for an adjusted ROE of 9.6%. For fiscal year 2025, GBDC paid $1.65 per share of cumulative distributions, representing 10.9% of end-of-year net asset value per share. Further, GBDC ended fiscal year 2025 with a net asset value per share of 1497. That's 34 cents above GBDC's net asset value per share at its IPO in 2010. GBDC is one of only a very small number of BDCs that have delivered NAV per share growth since IPO. GBDC's performance reflected a continuation of trends that you've heard me talk about over the last several quarters. Overall credit performance remained solid, and earnings were supported by decreasing but still attractive portfolio spreads and attractive borrowing costs. At the same time, and this is the second key headline, the direct lending market is facing some headwinds, headwinds that GBDC isn't immune to. What are those headwinds? First, spreads have narrowed. Now, this isn't just true of middle market direct lending. We've seen tighter spreads across traditional fixed income, asset-based finance, high yield, the broadly syndicated loan market. Spreads are tighter just about everywhere other than subprime. Second headwind, base rates have started to come down, and the market expects them to come down further. Third headwind, and this is the most important, We're in a credit cycle. There's an unusual level of defaults and credit stress in the leveraged loan market today. That's both the liquid leveraged loan market, including the broadly syndicated market, as well as the private credit market. This has been the case for over a year, and I anticipate it's going to continue for some time. We'll talk more about these headwinds over the course of today's call, but I want to highlight two ramifications of these headwinds. First, they're causing a spate of colorful news articles about the sector. Some of these articles are quite insightful, some less so. I'm going to talk in my closing remarks about some of the insightful ones. And second, they're causing very significant dispersion in performance among direct lending managers. Some managers are continuing to produce solid returns, mostly down a bit from last year, but still solid. And some other managers are producing poor results. I described this last quarter. as being a story about winners and whiners. And I said this pattern would continue, and it is continuing. Before I pass the mic to Tim and Chris to go over operating results in more detail, I want to comment on the decision by our board to declare a 39-cent-per-share distribution for the first fiscal quarter of 2026. In connection with this decision, the Board also determined that it would be prudent to revisit GBDC's dividend policy early next year, when we hope to have more information on the forward outlook for rates and asset spreads and financing costs. GBDC plans to approach the dividend question with the same underlying strategy we've had since our IPO. To remind those of you who haven't heard me talk about dividend strategy before, we're guided by four goals. First, we seek to maintain a stable net asset value per share over time. Second, we seek to minimize excise taxes over time. Third, we seek to adjust our base distribution level infrequently. And finally, we seek to pay as high a dividend yield on NAV as sustainable, consistent with the above goals, the three prior goals. Now, we can't always achieve all four of these goals at the same time, and at such times, we need to find the right balance. I'll have more to say in my closing remarks, but to sum up my intro, GBDC demonstrated strong and resilient earnings in fiscal 2025, despite macro surprises and despite market volatility. The market today is challenging, but based on our experience through multiple cycles over multiple decades, we believe this is the kind of environment where we and other private credit specialists outperform. Now I'll pass the call over to Tim Topics to discuss the quarter in more detail.

Thanks, David. Let's begin on slide four. GBDC's $0.39 per share of adjusted net investment income and $0.36 per share of adjusted earnings were driven by four key factors. First, overall credit performance remains solid. Approximately 90 percent of GBDC's investment portfolio at fair value remains in our highest performing internal rating categories. The $0.03 per share of adjusted net unrealized and realized losses were primarily related to the successful restructurings of certain loan investments in the quarter that were on non-accrual status, and select write-downs on a certain portion of BDC's tale of underperforming borrowers. Investments on non-accrual status decreased to a very low level, 0.3% or 30 basis points of the total investment portfolio at fair value. This level remains well below the BDC peer industry average. Second, earnings were supported by declining but still attractive spreads consistent with recent quarters. GBDC's investment income yield was 10.4%, a sequential decline of 20 basis points, primarily driven by, one, a modest decline in weighted average base rates, and two, modest compression of weighted average portfolio spread during the quarter. The headwinds were somewhat offset by a sequential increase in fee and dividend income related to certain early loan repayments. and a dividend associated with the recapitalization of one portfolio company. Third, a decline in GBDC's borrowing costs partially offset the sequential decline in investment income yield. There were two main drivers here. First, the full quarter impact of repricing GBDC's syndicated corporate revolver to a draw spread of one month SOFR plus 1.525%, with a 32.5 basis point in unused fee. Second, we elected to call the final legacy GBDC-3 debt securitization in advance of its 2030 stated maturity. The combined impact was a reduction in effective borrowing costs during the quarter to 5.6% annualized, which we believe is an industry-leading level. And fourth, earnings benefited from lower operating expenses due to GBDC's market-leading fee structure of a 1% base management fee. a 15% incentive fee, and an 8% income incentive fee hurdle, which will become increasingly relevant in a market environment characterized by lower reference interest rates and historically tight investment spreads. GBDC's investment portfolio decreased modestly quarter-over-quarter to just under $8.8 billion at fair value. The decrease was the result of $371 million in repayments and exits. net of $60 million in new investment commitments that funded in the quarter. We remain highly selective and conservative in our underwriting, closing on just 3.8% of deals reviewed in the quarter and a weighted average LTV of approximately 42%. We leaned on our existing spots of relationships and portfolio company incumbencies for approximately half of our origination volume and delivered an uptick in deal activity with new borrowers. we continued to leverage our scale to lead deals, acting as sole or lead lender in 90% of our transactions in the quarter. We focused on the core middle market, which we believe continues to offer better risk-adjusted return potential than the large borrow market. The median EBITDA for our originations in the quarter was $61 million. While larger cap opportunities are experiencing greater pressure on spreads and terms, given robust conditions in the public credit market and increased competition, The breadth of our origination capabilities allows us to flexibly seek attractive risk-adjusted returns for GBDC. For instance, in respect to the larger borrower market, in the quarter, Gallup Capital acted as its joint leader ranger on a $4.5 billion Unitron facility in support of Clear Lake's acquisition of Dun & Bradstreet, the largest private credit LBO recorded to date. While in the core middle market, we acted as lead lender and administrative agent on a new Unitronch facility to Olo Inc. to support Tomo Bravo's take private of a leading provider of mission-critical technology infrastructure to U.S. restaurant chains. Continuing on slide four, let me briefly summarize distributions paid and certain balance sheet changes in the quarter. Total distributions paid in the quarter were $0.39 per share. Net debt to equity decreased modestly quarter over quarter, ending at 1.23 times within our targeted range of 0.85 times to 1.25 times. During the quarter, we opportunistically repurchased 368,000 shares, and this brought total repurchases to 2.9 million shares, or $40.6 million in aggregate value for the fiscal year. Since quarter end, GBDC repurchased an additional 2.5 million shares at an average price of $13.69 per share. Unlike many other BDC managers who prioritize AUM goals, we approach repurchase opportunities with the goal of maximizing investor returns. I'm going to turn it over to Chris now to take us through our financial results in more detail.