GLADSTONE CAPITAL CORP

RESULTS OF OPERATIONS

Comparison of the Three Months Ended December 31, 2025 to the Three Months Ended December 31, 2024

NM - Not Meaningful

Investment Income

Interest income increased by 12.1% for the three months ended December 31, 2025, as compared to the prior year period. Generally, the level of interest income from investments is directly related to the principal balance of our interest-bearing investment portfolio outstanding during the period multiplied by the weighted-average yield. The weighted average principal balance of our interest-bearing investment portfolio for the three months ended December 31, 2025 was $772.3 million, compared to $642.4 million for the three months ended December 31, 2024, an increase of $129.9 million, or 20.2%. The weighted average yield on our interest-bearing investments is based on the current stated interest rate on interest-bearing investments, which decreased to 12.2% for the three months ended December 31, 2025, compared to 13.1% for the three months ended December 31, 2024, inclusive of any allowances on interest receivables made during those periods. The decrease in the weighted average yield was driven mainly by decreases in interest rates.

As of December 31, 2025, our loans to B+T Group Acquisition, Inc., Edge Adhesives Holdings, Inc., and WB Xcel Holdings, LLC were on non-accrual status with a cost basis of $28.8 million, or 3.4% of the cost basis of all debt investments in our portfolio, and a fair value of $13.2 million, or 1.6% of the fair value of all debt investments in our portfolio. As of September 30, 2025, our loans to B+T Group Acquisition, Inc., Edge Adhesives Holdings, Inc., and WB Xcel Holdings, LLC were on non-accrual status with a cost basis of $28.8 million, or 3.6% of the cost basis of all debt investments in our portfolio, and a fair value of $13.0 million, or 1.7% of the fair value of all debt investments in our portfolio.

Success fee, dividend and other income decreased by 3.9% during the three months ended December 31, 2025, as compared to the prior year period, primarily due to a decrease in prepayment fees received period over period, partially offset by an increase in success fees received period over period.

As of each of December 31, 2025 and September 30, 2025, no single investment represented greater than 10% of the total investment portfolio at fair value.

Expenses

Expenses, net of any non-contractual, unconditional and irrevocable credits to fees from the Adviser, increased $2.5 million, or 23.4%, for the three months ended December 31, 2025, as compared to the prior year period. This increase was primarily due to a $1.2 million increase in interest expense and a $1.1 million increase in the net base management fee earned by the Adviser.

Total interest expense on borrowings and notes payable increased by $1.2 million, or 25.0%, during the three months ended December 31, 2025, driven by an increase in the weighted average balance outstanding on our Credit Facility, partially offset by a decrease in the effective interest rate on our Credit Facility. Interest expense on our Credit Facility increased by $1.2 million due primarily to an increase in the weighted average balance outstanding which was $121.8 million during the three months ended December 31, 2025, as compared to $26.2 million in the prior year period, an increase of 364.9%. The effective interest rate on our Credit Facility, including unused commitment fees incurred, but excluding the impact of deferred financing costs, was 8.1% during the three months ended December 31, 2025, compared to 19.1% during the prior year period. The decrease in the effective interest rate was driven primarily by a $0.3 million decrease in unused commitment fees on the undrawn portion of the Credit Facility and a decrease in interest rates on the drawn portion of the Credit Facility during the three months ended December 31, 2025.

The net base management fee earned by the Adviser increased by $1.1 million, or 77.7%, for the three months ended December 31, 2025, as compared to the prior year period, resulting from a decrease in credits to the base management fee from the Adviser for new deal origination fees period over period and an increase in average total assets subject to the base management fee period over period.

The income-based incentive fee was largely unchanged for the three months ended December 31, 2025 as compared to the prior year period. During the three months ended December 31, 2024, our Board of Directors accepted non-contractual, unconditional and irrevocable credits from the Adviser of $0.2 million to reduce the income-based incentive fee to the extent net investment income did not cover 100.0% of distributions to common stockholders. There were no such credits during the three months ended December 31, 2025.

The base management, loan servicing and incentive fees, and associated non-contractual, unconditional and irrevocable credits, are computed quarterly, as described under“Transactions with the Adviser” in Note 4—Related Party Transactions of the Notes to Consolidated Financial Statements and are summarized in the following table:

(A)Average total assets subject to the base management fee is defined as total assets, including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings, valued at the end of the applicable quarters within the respective periods and adjusted appropriately for any share issuances or repurchases during the periods.

(B)Excludes our investment in Gladstone Alternative valued at the end of the applicable quarters within the respective periods.

(C)Reflected, on a gross basis, as a line item on our Consolidated Statements of Operations.

Net Realized Gain (Loss) on Investments

For the three months ended December 31, 2025, we recorded a net realized gain on investments of $1.7 million, which resulted primarily from a $1.8 million realized gain recognized on the redemption of our equity investment in Sokol.

For the three months ended December 31, 2024, we recorded a net realized gain on investments of $57.7 million, which resulted from a $59.3 million realized gain recognized on the sale of our investment in Antenna Research Associates, Inc. and a $2.5 million realized gain recognized on our investment in Salt & Straw, LLC, partially offset by a $4.1 million realized loss recognized on the sale of our investment in DKI Ventures, LLC.

Net Realized Gain (Loss) on Other

During the three months ended December 31, 2025, we recorded net realized losses on other of $1.4 million, due to the write-off of unamortized deferred offering costs upon the redemption of our 5.125% 2026 Notes due 2026 (the “2026 Notes”) and 7.75% Notes due 2028 (the “2028 Notes”).

Net Unrealized Appreciation (Depreciation) of Investments

During the three months ended December 31, 2025, we recorded net unrealized depreciation of investments in the aggregate amount of $5.6 million. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the three months ended December 31, 2025 were as follows:

The primary drivers of net unrealized depreciation of $5.6 million for the three months ended December 31, 2025 were the decline in the financial and operational performance of Eegee Acquisition Corp. and Lonestar EMS, LLC, and the reversal of unrealized appreciation recognized on our investment in Sokol.

During the three months ended December 31, 2024, we recorded net unrealized depreciation of investments in the aggregate amount of $41.9 million. The net realized gain (loss) and unrealized appreciation (depreciation) across our investments for the three months ended December 31, 2024 were as follows:

The primary driver of net unrealized depreciation of $41.9 million for the three months ended December 31, 2024 was the

reversal of unrealized appreciation from the exit of our investment in Antenna Research Associates, Inc., partially offset by the increase in the financial and operational performance of several of our other portfolio companies.