--- title: "Oxford Square Q2 2026 Earnings: Realized Losses and Distributions Pressure NAV" type: "News" locale: "en" url: "https://longbridge.com/en/news/294512722.md" description: "Oxford Square Capital Corp. reported Q2 2026 net investment income of $5.1 million, down from $5.5 million in Q2 2025, with realized losses widening to $5.2 million. NAV declined to $1.29 per share from $1.32. Despite a $4.0 million increase in net assets from operations, distributions of $0.105 per share exceeded NII, pressuring NAV. The company raised $17.8 million via ATM offerings, increasing shares outstanding to 105.1 million." datetime: "2026-07-31T12:22:41.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294512722.md) - [en](https://longbridge.com/en/news/294512722.md) - [zh-HK](https://longbridge.com/zh-HK/news/294512722.md) --- # Oxford Square Q2 2026 Earnings: Realized Losses and Distributions Pressure NAV Oxford Square Capital Corp. (Nasdaq: OXSQ) reported Q2 2026 total investment income of $9.4 million, down from $9.5 million in Q2 2025, while net investment income per share fell to $0.05 from $0.08. Net investment income improved sequentially to $5.1 million from $4.1 million, but $5.2 million of realized losses more than offset $4.1 million of unrealized appreciation. NAV ended June 30 at $1.29 per share, down from $1.32 at March 31. ## Core Earnings Data On a year-over-year basis, the modest decline in investment income was accompanied by higher expenses. Interest expense rose to $2.8 million from $1.9 million, although a $0.5 million excise-tax reversal helped reduce total expenses from the preceding quarter. Net investment income remained sufficient to produce a $4.0 million increase in net assets from operations after accounting for realized and unrealized portfolio changes. However, the per-share result was affected by weighted average shares rising to 99.3 million from 73.2 million a year earlier. Metric Q2 2026 Q2 2025 YoY Change Total investment income $9.402 million $9.522 million Down 1.3% Total expenses $4.264 million $4.023 million Up 6.0% Net investment income $5.138 million $5.500 million Down 6.6% Net investment income per share $0.05 $0.08 Down 37.5% Net realized losses $(5.216) million $(2.367) million Loss widened about 120% Net unrealized appreciation $4.072 million $1.253 million Up about 225% Increase in net assets from operations $3.994 million $4.385 million Down 8.9% NAV per share at June 30 $1.29 $2.06 Down 37.4% ## Portfolio Income and Investment Activity Debt investments generated approximately $5.4 million of income, including $0.9 million of payment-in-kind interest. That was approximately 6.8% higher than the combined debt investment income reported a year earlier. CLO and securitization income declined approximately 9% to $3.5 million, while other income fell to $0.5 million from $0.6 million. The decline in CLO and other income more than offset the increase from debt investments, resulting in the slight reduction in total investment income. Portfolio yield indicators were mixed compared with March 31. The weighted average yield on debt investments increased to 14.9% from 14.7%, and the effective yield on CLO equity investments rose to 8.1% from 7.3%. However, the cash distribution yield on income-producing CLO equity investments declined to 12.4% from 13.6%, while the corresponding yield on senior secured notes remained at 8.0%. Oxford Square purchased approximately $19.9 million of investments during the quarter and received $0.5 million of repayments, with no sales. Preferred equity investments in one portfolio company remained on non-accrual status and had a fair value of approximately $6.9 million at quarter-end. ## Profitability and Balance Sheet Interest expense was the main source of year-over-year cost pressure, increasing approximately 45% to $2.8 million. The annualized expense ratio rose to 14.39% from 10.78%, while the ratio excluding interest expense was comparatively stable at 5.76% versus 5.70%. These ratios were adjusted for the quarter’s one-time excise-tax reversal. At June 30, total assets were $290.6 million and net assets were $135.0 million, compared with $306.7 million and $145.4 million, respectively, at December 31, 2025. Cash and cash equivalents totaled approximately $34.6 million, down from approximately $51.9 million at year-end, while the carrying amount of the two unsecured note issues totaled approximately $152.1 million. The company issued approximately 11.3 million common shares through its at-the-market program during Q2, generating $17.8 million of net proceeds. Shares outstanding reached 105.1 million at June 30, compared with 86.1 million at the end of 2025. Quarterly distributions totaled $0.105 per share, more than twice the reported net investment income of $0.05 per share. On that basis, quarterly NII covered approximately 48% of the distribution. The NAV bridge shows how the competing factors affected shareholders. Operations added $0.05 per share and share issuance contributed $0.03, while distributions reduced NAV by approximately $0.11 per share. As a result, NAV declined from $1.32 at the beginning of the quarter to $1.29 at June 30. The board maintained the monthly common-stock distribution at $0.035 per share for October, November, and December 2026, equivalent to another $0.105 for the three-month period. The final tax treatment remains undetermined: if full-year taxable earnings fall below total distributions, part of the distributions could be classified as a return of capital. ## Risks Investors Need to Watch - **Distribution coverage:** Quarterly NII of $0.05 per share was well below the $0.105 distributed. Continued undercoverage could place additional pressure on NAV or affect the tax character of distributions. - **Realized portfolio losses:** Realized losses widened to $5.2 million in Q2, while realized losses for the first six months of 2026 totaled $36.0 million. Unrealized appreciation provided only a partial offset. - **CLO cash income:** CLO equity income declined year over year, and the portfolio’s CLO cash distribution yield fell sequentially despite a higher effective yield. - **Non-accrual exposure:** Preferred equity investments with a fair value of $6.9 million were on non-accrual, limiting current income and creating further valuation risk. - **Financing costs and share growth:** Higher interest expense reduced year-over-year NII, while substantial ATM issuance increased the number of shares over which earnings must be distributed. ## Summary Oxford Square’s Q2 2026 results improved sequentially at the NII level, helped by higher investment income and lower reported expenses, but year-over-year earnings and per-share performance weakened. Debt income increased, while CLO income and cash yields declined, and realized portfolio losses remained substantial. The central issue ahead is whether portfolio income can better cover the maintained monthly distribution without further NAV erosion, particularly as financing costs remain elevated and the share count continues to grow. Find out more ### Related Stocks - [OXSQ.US](https://longbridge.com/en/quote/OXSQ.US.md) ## Related News & Research - [Oxford Square Q2 FY26 net investment income falls to $5.1 million; net investment income per share drops to $0.05](https://longbridge.com/en/news/295447477.md) - [OXSQ: NAV dipped to $1.29, NII rose to $5.1M, and $17.8M was raised from new share issuance](https://longbridge.com/en/news/294514794.md) - [Pershing Square Inc. Reports Second Quarter 2026 Results | PS Stock News](https://longbridge.com/en/news/295708731.md) - [Blaize Holdings, Inc. Class Action Lawsuit Alert: Johnson Fistel Notifies Investors of October 5, 2026 Lead Plaintiff Deadline](https://longbridge.com/en/news/295704413.md) - [Francis Van Parys Purchases 114 Shares of Oxford Nanopore Technologies (LON:ONT) Stock](https://longbridge.com/en/news/295696992.md)