Business development company Capital Southwest (NASDAQ: CSWC) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 18.2% year on year to $61.45 million. Its GAAP profit of $0.54 per share was 8.2% below analysts’ consensus estimates.

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In commenting on the Company’s results, Michael Sarner, President and Chief Executive Officer, stated, “The December quarter was another extremely active quarter on the origination front for Capital Southwest, with approximately $244 million of originations in eight new and 16 existing portfolio companies. Our portfolio continued to generate significant income for our shareholders, producing $0.60 of pre-tax net investment income per share. During the quarter, the Board of Directors again declared a regular monthly dividend of $0.1934 for each of January, February and March 2026 and a quarterly supplemental dividend of $0.06 to be paid in March 2026. On the capitalization front, we continued to efficiently raise equity capital during the quarter, raising approximately $53 million through our Equity ATM Program. Subsequent to quarter end, we formed a joint venture with another private credit asset manager, which will be an off-balance sheet private fund that primarily invests in first out senior secured debt opportunities in the lower middle market. We are excited about the opportunities this fund will provide moving forward and believe it will allow Capital Southwest to be competitive on a broader range of investment opportunities.”

Company Overview

Originally founded in 1961 as a venture capital investor that helped launch Texas Instruments, Capital Southwest (NASDAQ: CSWC) is a business development company that provides debt and equity financing to middle-market companies primarily in the United States.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Capital Southwest grew its revenue at an incredible 28% compounded annual growth rate. Its growth beat the average financials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Capital Southwest’s annualized revenue growth of 15.9% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Capital Southwest reported year-on-year revenue growth of 18.2%, and its $61.45 million of revenue exceeded Wall Street’s estimates by 5.3%.

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Key Takeaways from Capital Southwest’s Q4 Results

We enjoyed seeing Capital Southwest beat analysts’ revenue expectations this quarter. On the other hand, its EPS missed. Zooming out, we think this was a mixed quarter. The stock traded up 1.9% to $23.61 immediately after reporting.

Should you buy the stock or not? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).