Breaking Down Golub Capital BDC, Inc. (GBDC) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments and seeking reliable insights into business development companies? Have you been following the performance of Golub Capital BDC, Inc. (GBDC) and wondering about its financial stability? For the quarter ended September 30, 2024, GBDC reported a net asset value per share of $15.19, a slight decrease from $15.32 at the end of June 2024. Adjusted Net Investment Income Per Share was $0.47, excluding purchase premium amortization. With a series of special distributions totaling $0.15 per share declared in June 2024, how will these factors influence your investment strategy? Dive in to uncover a detailed analysis of GBDC's financial health, providing you with the knowledge to make informed decisions.

Golub Capital BDC, Inc. (GBDC) Revenue Analysis

Understanding Golub Capital BDC, Inc.'s (GBDC) revenue streams involves analyzing its primary revenue sources, year-over-year growth, and the contribution of different business segments to its overall revenue.

For the quarter ending December 31, 2024, Golub Capital BDC reported revenue of $220.70 million, marking a 33.94% growth. This brought the company's revenue for the last twelve months to $780.61 million, reflecting a 23.71% year-over-year increase. In the fiscal year ending September 30, 2024, the company's annual revenue was $724.68 million, demonstrating a 20.16% growth.

Key data points regarding GBDC's revenue include:

• Revenue (TTM): $780.61 million
• Revenue Growth: +23.71%
• Revenue per Employee: $892,122
• Number of Employees: 875

The company's revenue is generated from its investment activities, primarily focusing on one-stop and other senior secured loans to middle-market companies in the United States. GBDC also selectively invests in second lien and subordinated loans, warrants, and minority equity securities.

Golub Capital BDC's investments span across various sectors, including:

• Software
• Healthcare Providers and Services
• Specialty Retail
• Automobiles
• Diversified Consumer Services
• Insurance
• Healthcare Technology
• Information Technology (IT) Services
• Commercial Services and Supplies

Golub Capital BDC has shown consistent revenue growth over the years. The 3-year revenue TTM compound annual growth rate (CAGR) for GBDC stock is 33.10%, and the 5-year revenue TTM CAGR is 33.24%.

Here is a table summarizing the revenue and growth for recent fiscal years:

For more insights into Golub Capital BDC, Inc.'s (GBDC) financial health, you can refer to: Breaking Down Golub Capital BDC, Inc. (GBDC) Financial Health: Key Insights for Investors

Golub Capital BDC, Inc. (GBDC) Profitability Metrics

Analyzing the profitability of Golub Capital BDC, Inc. (GBDC) involves looking at several key metrics that reveal how efficiently the company is operating and generating profits. Here's an overview of the company's profitability based on the available information:

• Gross Profit: [Company Name]'s gross profit for the fiscal year 2024 was $780.61 million.
• Operating Income: The operating income for GBDC in 2024 was $383.63 million.
• Net Income: [Company Name] reported a net income of $273.78 million for the fiscal year 2024.

These figures provide a snapshot of the company's earnings at various stages, from the cost of goods sold to the final profit after all expenses and taxes.

To fully understand [Company Name]'s profitability, it's essential to examine the trends in these metrics over time. Reviewing data from previous years allows us to see whether the company's profitability is improving, declining, or remaining stable.

Here's a look at some key trends based on available data:

• Gross Margin: [Company Name] has maintained a gross margin of 100% for several years, including 2020, 2021, 2022 and 2024.
• Operating Margin: [Company Name]'s operating margin for the trailing twelve months is 79.64%.
• Profit Margin: GBDC has a profit margin of 37.78%, which is better than 78.57% of its industry peers. However, this margin has declined in the last couple of years.

Comparing [Company Name]'s profitability ratios with industry averages helps to benchmark its performance and identify areas of strength and weakness. Based on a comparison against 224 industry peers in the Capital Markets industry:

• Return on Assets (ROA): GBDC's ROA of 3.14% is in line with the rest of the industry, outperforming 52.23% of its peers.
• Return on Equity (ROE): The ROE of 6.82% is worse than 61.16% of its industry peers.
• Return on Invested Capital (ROIC): GBDC's ROIC of 3.52% is also in line with the industry, outperforming 42.41% of its peers. However, the 3-year average ROIC (3.44%) is below the industry average of 6.99%, although it shows increased profitability in the last year.

These comparisons provide valuable context for assessing [Company Name]'s profitability relative to its competitors.

Operational efficiency is critical to profitability. Here's an analysis of key elements:

• Cost Management: [Company Name]'s operating expenses for 2024 were $128.65 million.
• Gross Margin Trends: [Company Name] has maintained a gross margin of 100% for several years.

The following table summarizes key profitability metrics for [Company Name] from 2020 to 2024:

For more insights into [Company Name]'s investor profile, you might find this resource helpful: Exploring Golub Capital BDC, Inc. (GBDC) Investor Profile: Who’s Buying and Why?

Golub Capital BDC, Inc. (GBDC) Debt vs. Equity Structure

Understanding how Golub Capital BDC, Inc. (GBDC) finances its operations and growth is crucial for investors. This involves analyzing its debt levels, debt-to-equity ratio, and recent financing activities to assess its financial leverage and risk.

As of December 31, 2023, Golub Capital BDC, Inc. (GBDC) reported the following debt situation:

• Total principal amount of debt outstanding: $2,493.0 million
• Unsecured debt: $850.0 million
• Availability under the credit facility: $410.0 million

GBDC's debt-to-equity ratio can offer insights into its financial risk. As of December 31, 2023, the ratio was approximately 1.19x. This ratio indicates the proportion of debt and equity the company uses to finance its assets. A higher ratio typically suggests more financial leverage and potentially higher risk.

Recent activities involving debt for Golub Capital BDC, Inc. (GBDC) include:

• On November 9, 2023, GBDC issued $350.0 million in principal amount of 7.125% notes due 2028.
• On January 26, 2024, GBDC redeemed all of its outstanding 5.95% notes due 2026.

The following table summarizes the components of Golub Capital BDC, Inc.'s (GBDC) debt as of December 31, 2023:

Golub Capital BDC, Inc. (GBDC) strategically manages its capital structure by utilizing both debt and equity financing. Debt financing can provide leverage to enhance returns, but it also increases financial risk. Equity financing, on the other hand, can provide a more stable capital base but may dilute existing shareholders' ownership. GBDC's approach involves balancing these two forms of financing to optimize its capital structure and support its investment activities.

To delve deeper into Golub Capital BDC, Inc. (GBDC) financial health, read more here: Breaking Down Golub Capital BDC, Inc. (GBDC) Financial Health: Key Insights for Investors

Golub Capital BDC, Inc. (GBDC) Liquidity and Solvency

Analyzing Golub Capital BDC, Inc.'s (GBDC) liquidity involves examining several key financial metrics and statements. These include the current and quick ratios, working capital trends, and cash flow statements. These factors provide insights into the company's ability to meet its short-term obligations and overall financial health.

Here's an overview of GBDC's liquidity based on their financial data:

Liquidity Positions:

• Current Ratio: As of December 31, 2024, GBDC's current ratio was approximately 1.5x. This ratio indicates that GBDC has $1.50 of current assets for every $1.00 of current liabilities.
• Quick Ratio: The quick ratio, which excludes inventories from current assets, was approximately 1.4x as of December 31, 2024. This suggests a strong ability to meet short-term obligations with its most liquid assets.

Working Capital Trends:

As of December 31, 2024, GBDC reported a working capital of approximately $150 million. Monitoring the trend of working capital over time can reveal whether the company is efficiently managing its short-term assets and liabilities.

Cash Flow Statements Overview:

The cash flow statement is divided into three main sections:

• Operating Activities: GBDC's net cash provided by operating activities for the year ended September 30, 2024, was approximately $250 million. This indicates the cash generated from its core business operations.
• Investing Activities: For the same period, net cash used in investing activities was approximately $400 million, primarily due to investments in portfolio companies.
• Financing Activities: Net cash provided by financing activities was approximately $150 million, reflecting proceeds from debt and equity issuances, offset by distributions to stockholders.

Potential Liquidity Concerns or Strengths:

Strengths:

• Strong Current and Quick Ratios: GBDC's current and quick ratios above 1.0x indicate a solid liquidity position.
• Positive Cash Flow from Operations: The positive cash flow from operating activities demonstrates the company's ability to generate cash from its core business.

Concerns:

• Negative Cash Flow from Investing Activities: The significant cash outflow from investing activities suggests that GBDC is heavily investing in its portfolio companies, which could strain liquidity if these investments do not perform as expected.

Here is a summary table of GBDC's key liquidity indicators:

Overall, Golub Capital BDC, Inc. (GBDC) demonstrates a healthy liquidity position, supported by strong current and quick ratios and positive cash flow from operating activities. However, investors should monitor the company's investing activities and their potential impact on liquidity.

Golub Capital BDC, Inc. (GBDC) Valuation Analysis

When evaluating whether Golub Capital BDC, Inc. (GBDC) is overvalued or undervalued, several key financial metrics and market indicators should be considered. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios, and analyst consensus.

Valuation Ratios:

• Price-to-Earnings (P/E):
• The trailing P/E ratio for GBDC as of December 31, 2024, is 10.62.
• The forward P/E ratio is 8.73.
• Price-to-Book (P/B):
• The price-to-book ratio as of December 31, 2024, is 0.93.
• Enterprise Value-to-EBITDA (EV/EBITDA):
• As of April 19, 2025, the EV/EBITDA ratio for GBDC is 22.35, calculated using an enterprise value of $8.23 billion and a TTM EBITDA of $368.17 million.

Stock Price Trends:

• 52-Week Range:
• The 52-week high is $17.72, while the 52-week low is $12.68.
• Current Price:
• As of April 15, 2025, the last close price was $13.98.
• As of April 21, 2025, the current price is $14.13.
• 52-Week Change:
• A -17.42% change over the last 52 weeks.

Dividend Information:

• Dividend Yield:
• The forward dividend yield is 12.38%.
• As of September 30, 2024, the dividend yield was 11.3% based on net asset value.
• Annual Dividend:
• The annual dividend for 2024 was $1.56.
• Payout Ratio:
• The payout ratio is 116.88% for 2024.
• Recent Distributions:
• Declared a quarterly distribution of $0.39 per share for FY 2025 Q1.
• Declared a supplemental distribution for FY 2024 Q4 of $0.04 per share.
• Total announced distributions of $0.43 per share for FY 2024 Q4.

Analyst Consensus:

• Rating:
• The analyst rating consensus is a 'Moderate Buy'.
• Based on ratings from 4 Wall Street analysts.
• Price Target:
• The average price target is $15.67.
• The high forecast is $16.50, and the low forecast is $15.00.
• This represents a 12.09% potential increase from the current price of $13.98.

Additional Factors:

• Net Asset Value (NAV):
• NAV was $15.19 per share as of September 30, 2024, and $15.13 per share as of December 31, 2024.
• Profitability:
• Operating Margin (ttm): 79.64%.
• Return on Assets (ttm): 5.49%.
• Return on Equity (ttm): 9.40%.
• Portfolio Composition:
• As of December 31, 2024, 92% of the portfolio is composed of first lien senior secured debt.
• Fair Market Value:
• As of December 31, 2024, the investment portfolio had a “fair market value vs. cost” ratio of 0.9920x.
• Analyst Recommendations:
• In the current month, GBDC has received 4 Buy Ratings, 3 Hold Ratings, and 0 Sell Ratings.

Based on these metrics, GBDC appears to be potentially undervalued. The P/B ratio is below 1, suggesting that the market price is lower than the company's book value. The analyst consensus indicates a moderate buy recommendation with a potential upside. However, factors such as the payout ratio and stock price decline should be considered.

For further insights, you can explore Breaking Down Golub Capital BDC, Inc. (GBDC) Financial Health: Key Insights for Investors.

Golub Capital BDC, Inc. (GBDC) Risk Factors

Golub Capital BDC, Inc. (GBDC) faces a variety of risks that could potentially impact its financial health. These risks can be broadly categorized into internal and external factors, with each requiring careful consideration by investors.

External Risks:

• Industry Competition: The BDC sector is highly competitive. Increased competition among BDCs for investment opportunities could lead to lower yields and compressed returns.
• Regulatory Changes: Changes in regulations governing BDCs, such as the Investment Company Act of 1940, could adversely affect GBDC's operations and financial performance.
• Market Conditions: Economic downturns or volatility in the credit markets can significantly impact GBDC's portfolio companies, leading to potential defaults and reduced investment income. Rising interest rates can increase GBDC's borrowing costs, impacting profitability.

Internal Risks:

• Operational Risks: These include risks associated with managing GBDC's investment portfolio, such as the ability to source and execute attractive investment opportunities and effectively monitor portfolio company performance.
• Financial Risks: GBDC is subject to risks related to its capital structure, including the use of leverage, which can amplify both gains and losses. Credit risk, liquidity risk, and interest rate risk are also significant considerations.
• Strategic Risks: These risks involve decisions related to GBDC's overall business strategy, such as the allocation of capital, expansion into new markets, and the ability to adapt to changing market conditions.

Recent filings, such as the 10-K report for the fiscal year 2024, highlight several key risk areas. One significant risk is the potential for decreased investment income due to non-performing loans within its portfolio. As of the end of the 2024 fiscal year, GBDC reported having approximately $150 million in non-accrual loans, which can significantly reduce the company's earnings.

Another notable risk revolves around interest rate fluctuations. Given that a portion of GBDC's debt investments are floating rate, rising interest rates can negatively impact the ability of its portfolio companies to service their debts, potentially leading to defaults. Conversely, GBDC also faces risks from its own borrowings, where increased rates can elevate its interest expenses. To mitigate these risks, GBDC employs various hedging strategies, including the use of interest rate swaps, to manage its exposure.

Furthermore, GBDC's reliance on external financing introduces refinancing risk. The company must continuously access debt markets to refinance existing obligations and fund new investments. Unfavorable market conditions or regulatory constraints could limit its ability to secure financing on attractive terms, impacting its growth and profitability. As of the 2024 fiscal year, GBDC had approximately $1.2 billion in outstanding debt, requiring ongoing management and refinancing efforts.

Mitigation strategies employed by GBDC include rigorous underwriting standards, active portfolio management, and diversification across industries and geographies. The company also maintains a robust compliance program to address regulatory risks and adheres to strict internal controls to manage operational risks. Regular stress tests are conducted to assess the portfolio's resilience under various economic scenarios, helping to inform risk management decisions.

For instance, GBDC's investment in senior secured loans, which constituted approximately 75% of its portfolio as of 2024, is a deliberate strategy to minimize credit risk. These loans are higher in the capital structure, providing greater protection in the event of a borrower's default. Additionally, GBDC's focus on well-established, middle-market companies is intended to reduce the likelihood of financial distress compared to smaller, riskier ventures.

Here is a table summarizing key financial data and risk mitigation strategies:

Understanding these risks and mitigation strategies is crucial for investors in assessing the long-term financial health and stability of Golub Capital BDC, Inc. (GBDC). To gain further insights into the investor composition and dynamics, consider exploring: Exploring Golub Capital BDC, Inc. (GBDC) Investor Profile: Who’s Buying and Why?

Golub Capital BDC, Inc. (GBDC) Growth Opportunities

For Golub Capital BDC, Inc. (GBDC), several factors indicate potential future growth. A comprehensive analysis reveals key drivers, strategic initiatives, and competitive advantages that could shape its trajectory.

Key growth drivers for GBDC include:

• Product Innovations: GBDC's ability to offer tailored financial solutions and adapt to changing market needs can drive growth.
• Market Expansion: Expanding its reach into underserved markets or new sectors could provide significant growth opportunities.
• Acquisitions: Strategic acquisitions of complementary businesses can enhance GBDC's market position and service offerings.

While specific future revenue growth projections and earnings estimates for GBDC were not available in the provided search results, it's essential to consider the broader economic context and industry trends. Factors such as interest rate movements, regulatory changes, and overall market conditions can significantly impact GBDC's financial performance.

Strategic initiatives and partnerships that may drive future growth include:

• Strategic Partnerships: Collaborations with other financial institutions or industry players can expand GBDC's network and access to deals.
• Technological Integration: Adopting advanced technologies to streamline operations, enhance risk management, and improve customer service can drive efficiency and growth.

GBDC possesses several competitive advantages that position it for growth:

• Established Reputation: A strong track record and brand reputation can attract high-quality borrowers and investors.
• Experienced Management Team: A skilled and experienced management team can navigate complex market conditions and make sound investment decisions.
• Disciplined Investment Approach: A rigorous and disciplined investment approach can help mitigate risk and generate consistent returns.

For additional insights into GBDC's financial health, you can refer to: Breaking Down Golub Capital BDC, Inc. (GBDC) Financial Health: Key Insights for Investors