Golub Capital BDC, Inc.

Hello, everyone, and welcome to GBDC's earnings call for the fiscal quarter ended June 30, 2026. 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. This is David Golub, and I'm joined by Tim Topicz, our Chief Operating Officer, Rob Touchere, a Senior Managing Director and Officer of GBDC, and Chris Ericson, 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, companies that are backed by strong partnership-oriented private equity sponsors. Yesterday, we issued our earnings press release for the fiscal quarter ended June 30th, and we posted an earnings presentation on our website. We'll be referring to this presentation during today's call. I'm going to start with headlines and a brief summary of performance for the quarter. Then Tim, Rob, and Chris are going to walk you through our operating and financial performance in more detail. Finally, I'll wrap up with some observations on current market conditions and our outlook, and we'll take questions. So the headline for the quarter is this. GBDC's performance was much better than last quarter, not as good as we'd like, and better than it looks. So that's a lot. That's a three-parter. So let me take a few moments to unpack each of the three parts of that headline. First, GBDC's performance was much better than last quarter. That's pretty clear from the data. Adjusted net income per share was $0.22. That compares to an $0.18 per share loss last quarter, and it translates into an annualized adjusted ROE of 6.2%. The key driver of the improvement quarter over quarter was a decrease in adjusted net realized and unrealized losses. Such losses went from $0.52 per share last quarter to $0.12 per share this quarter. At the same time, adjusted NII per share remained solid and consistent with last quarter at $0.34 per share, which translates into an adjusted NII ROE of 9.5%. Finally, GBDC paid a $0.33 per share distribution. Now, for those of you who are familiar with GBDC, you can see from the data I just described why the quarter was not as good as we'd like. GBDC's delivered a 9.4% net IRR on NAV since our IPO in 2010. If we compare that to GBDC's annualized adjusted ROE for the quarter of 6.2%, it's clearly a few points below GBDC's 16-year plus average. Now, you've heard us talk for several quarters about how we're in a credit cycle, how we're in a period that's marked by sustained elevated credit stress. We've also talked, including on last quarter's call, about our view that What we're seeing fits a pattern. It's a pattern that when things shift from a borrower-friendly environment to a more lender-friendly one, we tend to see a period of bumpiness in results. So I'm not entirely surprised to see a degree of bumpiness in GBDC's results for the quarter. And my expectation is that we're going to see a large degree of bumpiness across the BDC industry as results come in. That all said, some quarters feel worse than the numbers and some quarters feel better than the numbers. This quarter feels to me better than the numbers. Why do I think that? Well, GBDC's net realized and unrealized losses for the quarter, the 12 cents per share of loss, they arose primarily from a small number of junior debt and equity positions and not from the core debt portfolio. We saw a lot of stability in the core debt portfolio. This is important because our experience is that The kinds of write-downs that we had, they're typically one-offs. Put differently, I'm encouraged by the health and resilience of the vast majority of GBDC's portfolio. I'll have more to say about that in my outlook in my closing remarks. For now, I'm going to let Tim, Rob, and Chris go into the quarter in more detail. Tim? Thanks, David.

Let's start on slide three and walk through the drivers of GBDC's earnings in the quarter. I'll start with the drivers of our $0.34 per share of adjusted net investment income and then unpack credit gains and losses that contributed to $0.22 per share of adjusted earnings. Let me start with the drivers of net investment income. There were three in the quarter. Number one, improving investment income yield. Number two, stable borrowing costs. And number three, prudent expense management. Let's go through each of these in turn. First, on investment income yield, it was 9.9% annualized, which increased modestly quarter over quarter. It was supported by a stable weighted average spread in the portfolio, consistent base rates throughout the quarter, and to a lesser extent, a modest amount of accelerated fee recognition and discount accretion tied to a handful of payoffs. On number two, borrowing costs held steady at 5.3% annualized, One of the lowest borrowing costs in the listed BDC peer group and a real competitive advantage for GBDC and its investors. And then number three, operating expenses remain low. GBDC continues to benefit from its gold standard fee structure. There's nothing new to call out here. It's just continued efficiency. Now let's unpack the drivers of GBDC's 22 cents per share of adjusted earnings. Overall credit performance remains solid, approximately 87% of our portfolio at fair value, remains in our highest performing internal rating categories. And investments on non-recrual status remain low, at just 1.9% of the portfolio at fair value. That's a level well below the average of our listed BDC peers. We did, however, recognize $0.12 per share of adjusted net realized and unrealized losses in the quarter. Here's how that breaks down. approximately $0.08 per share of unrealized losses from markdowns on junior debt and equity investments in two portfolio companies that were taken to non-accrual status or were on a non-accrual status in the quarter. Those losses were somewhat offset by unrealized gains due to a small degree of reversal of last quarter's spread driven unrealized losses. We recognized approximately $0.04 per share of net realized losses. This was driven primarily from the successful restructuring of RWAM Holco and Dolphus Meaghan, the quarter. Importantly, the realized losses resulting from these restructurings were more than fully offset by the reversal of unrealized losses in the same investments. And then lastly, and on a positive note, we recognize $4 million of net realized gains on the exit of equity investments in a couple portfolio companies. As a reminder, GBDC will in certain instances co-invest in the equity of high performing borrowers and the liquidation of these equity investments, which historically has typically happened at a gain, is one of the factors that have contributed to GBDC's top quartile credit performance since IPO. Now, regarding balance sheet changes and distributions in the quarter. NAV per share declined slightly to 14.25 per share. We racked up the quarter with net debt to equity of 1.23 times. That was down slightly from the prior quarter. while average leverage throughout the quarter was also 1.23 times. Total distributions paid in the quarter were 33 cents per share and our board of directors declared a 33 cent per share distribution for the fourth fiscal quarter of 2026. We also kept up our opportunistic share repurchase program during the quarter. The company bought back 1.1 million shares at a weighted average price of 12.90 per share or an approximate 10% discount to our March 31, 2026 net asset value. In addition, the Golub Capital Rabbi Trust purchased approximately $31 million or 2.4 million shares of GBDC during the quarter for incentive compensation purposes. This brought purchases of GBDC shares by the Trust to 70 million over the last 12 months. Golub Capital affiliates now hold about 8% of GBDC shares outstanding. That's an indication of a high degree of alignment between Golub Capital and GBDC investors. Now turning to slide seven. Here we've laid out the NAV per share bridge quarter over quarter. You can see how the earnings drivers that I just walked through translate into GBDC's June 30th, 2026 net asset value per share of 14.25. Adjusted NII per share of 34 cents fully covered the 33 cent per share distribution that was paid out during the quarter. Adjusted net realized and unrealized losses were 12 cents per share. and Share of Purchases added a penny per share of NAV accretion. Put it all together and you get a net asset value that moved down modestly from 1435 to 1425 in the quarter. So that's the earnings summary for the quarter. With that, let me hand things over to Rob to take us through our investing activity and portfolio in more detail.