Golub Capital BDC, Inc.

Hello, everyone, and welcome to GBDC's earnings call for the fiscal quarter ended December 31, 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.gallupcapitalbdc.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 Tim Topics, our Chief Operating Officer, and Chris Erickson, our Chief Financial Officer. 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 and partnership-oriented private equity sponsors. Yesterday, we issued our earnings press release for the fiscal quarter ended December 31st, and we posted an earnings presentation on our website. We'll be referring to this presentation during the call today. I'm going to start, as I usually do, with headlines and a summary of performance for the quarter. Then Tim and Chris are going to walk you through our operating financial performance for the quarter in detail. And finally, I'll wrap up with some observations on current market conditions and our outlook for the coming period. Let's start with three headlines. The first headline is that despite four continuing industry headwinds, GBDC had an okay quarter. Not great, but solid given the environment. Adjusted NII per share was 38 cents, which translates to an adjusted NII ROE of 10.2%. Adjusted net income per share was 25 cents. for an adjusted ROE of 6.7%, and GBDC paid a 39 cent per share distribution. So, what are these headwinds? I described all four last quarter. First, lower base rates. Second, tighter spreads, not just in our market, but across almost every credit asset class other than subprime. Third, muted M&A activity, although the second half of calendar 25 improved relative to the first half. And fourth, continued high levels of credit stress. The second headline is that we expect these headwinds to continue for some time, and we're planning for a challenging 2026. The third headline, consistent with our comments on last quarter's call, is that our board of directors revisited GBDC's dividend policy, and after careful evaluation and in light of the headwinds I just described, the board decided to reset the company's quarterly base dividend to 33 cents per share, or about 9% of NAV per share. We also plan to maintain the quarterly variable supplemental dividend policy going forward. We believe this change is consistent with our four longstanding dividend priorities, maintaining a stable net asset value over time, minimizing excise taxes over time, adjusting our base distribution level infrequently, and paying a higher dividend yield on NAVA sustainable consistent with those goals. Now I'll pass the call over to Tim Topics to discuss operating performance in the quarter in more detail.

Thanks, David. Let's begin on slide four. GBDC's $0.38 per share of adjusted net investment income and $0.25 per share of adjusted earnings were driven by four key factors this quarter. Let me walk through each of those in turn. First, overall credit performance generally remains solid. Approximately 89% of GBDC's investment portfolio at fair value remains in our highest performing internal rating categories. Investments on non-accrual status remain very low at just 0.8% of the total investment portfolio at fair value. This level is well below that of our BDC peer industry average. And although adjusted net unrealized and realized losses increased to 13 cents per share, they were primarily related to fair value markdowns on a small tail of underperforming borrowers at GBDC, including 6 cents per share in markdowns on equity investments in these borrowers. The second key earnings driver. GBDC's investment income yield of 10% was down 40 basis points sequentially, mostly driven by lower base rates and, to a lesser extent, lower weighted average spread across the portfolio. These negative headwinds were in part offset by the third key earnings driver, a continued decline in GBDC's borrowing costs, reflecting the impact of GBDC's predominantly floating rate debt capital structure. And finally, GBDC's earnings continued to benefit from a market-leading fee structure and one of the lowest operating expense loads in the public BDC sector. Now, shifting to investment activity. GBDC's investment portfolio decreased by a modest 1.5% quarter over quarter to $8.6 billion at fair value. We remained highly selective and conservative in our underwriting. We closed on just 3.1% of the deals we were reviewed in the quarter. at a weighted average LTV of approximately 43%. We leaned on existing sponsor relationships and portfolio company incumbencies for approximately 60% of our origination volume and made loans to 18 new borrowers. We continue to leverage our scale to lead deals, acting as sole or lead lender in 96% of our transactions in the quarter. And we continue to focus on the core middle market, which we believe continues to offer better risk-adjusted returns potential than the larger borrower market. The median portfolio company EBITDA for our originations in the quarter was $81 million. 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 39 cents per share. As David mentioned at the outset, our Board of Directors has updated the base distribution level to 33 cents per share. And in addition, we'll evaluate on a quarterly basis a variable supplemental distribution that will seek to distribute 50% of the earnings in excess of 33 cents per share. Continuing on with other balance sheet updates, net debt to equity remains stable quarter over quarter, ending at 1.23 times within our targeted range as 0.85 to 1.25 times. During the quarter, we continued our opportunistic repurchasing of GBDC shares on an accretive basis. Total shares were purchased in calendar year 2025 grew to 5.5 million shares or $76.5 million in aggregate value. In the quarter, these capital management transactions resulted in one penny per share of accretion to net asset value. I'm going to turn it over to Chris now to take us through our financial results in detail.