Blue Owl Capital Corporation Q1 FY2026 earnings call

Craig Packer highlighted strong credit performance with no new non-accruals. First quarter was challenging earnings-wise due to lower base rates and tighter spreads. Dividend reduced to $0.31 per share. Logan Nicholson discussed conservative investment activity with lighter origination and lower leverage. Portfolio credit performance stable, software borrowers had growth. Jonathan Lamm reviewed financial results with adjusted NII of $0.31 per share, NAV per share $14.41, and balance sheet activities like share repurchases and credit rating upgrade.

Credit performance remains strong with no new non-accruals. First quarter was challenging from an earnings perspective due to lower base rates and tighter market spreads. Investment activity was lighter with lower leverage. Software borrowers showed revenue and EBITDA growth. Non-accrual rate declined.

Management believes $0.31 quarterly dividend aligns with portfolio's forward earnings power. Expect better investing environment over next twelve months with potential to generate earnings in excess of dividend. Anticipate spreads to widen and base rates to stabilize, leading to improved earnings.

Risks include market uncertainty leading to slower deal environment. Spread volatility impacting asset valuations. Potential impact of AI on software borrowers' performance.

Q: On the new $0.31 quarterly dividend, should we view that as a floor in NII over the next several quarters? And since you are keeping the supplemental dividend framework in place, is there the potential for some supplemental dividends to come through later this year...

A: Craig Packer said they think $0.31 is the right level, hope it's a floor, expect better environment with potential for supplemental dividends.

Q: It looks like your headline non-accruals declined, but it looks like you marked Walker Edison on non-accrual...

A: Jonathan Lamm said Walker Edison has been on non-accrual for a significant time with realizations and no impact to NAV.

Q: On the first, kind of earnings trends going forward—three-year low in fee income, two-year low in leverage—so there are a lot of potential drivers...

A: Craig Packer said it's a mix of factors including fee income expected to be higher, refinancings, and cautious leverage.

Q: You have seen relatively strong performance in the public equity markets for software companies over the last few weeks...

A: Craig Packer said it's nice to see bounce but too soon to see different dialogue with sponsors.

Q: Just another one on the new dividend level there. Would you talk a little bit more about some of the embedded assumptions behind there...

A: Jonathan Lamm said they analyzed model, forward earnings, spreads, fee income, etc.

Q: Good morning. Thanks for taking my question. Just another one on the new dividend level there...

A: Jonathan Lamm explained the embedded assumptions in setting the dividend.

Q: Good morning. Thanks for letting me join the party today. I just had a follow-up on the software EBITDA growth...

A: Logan Nicholson explained software EBITDA growth was low double digits consistent over time.

Q: Hi, thanks for taking my questions. Most of the questions have been asked. On loan sales, there were roughly $400 million in loan sales in February according to the Q...

A: Jonathan Lamm confirmed they are the same as discussed in last quarterly call.