Blue Owl Capital Corp

Key Figures — Q2 2026 vs. Q1 2026 (Most Recent Reported Period)

Metric	Q2 2026	Q1 2026	Change ($/abs)	Change (%)
Total Investment Income (GAAP, $m)	$401.3m	$396.8m	+$4.5m	+1.1%
Net Investment Income After Tax ($m)	$176.2m	$159.2m	+$17.0m	+10.7%
GAAP NII per Share	$0.36	$0.32	+$0.04	+12.5%
Adjusted NII per Share	$0.34	$0.31	+$0.03	+9.7%
GAAP EPS (net increase in net assets per share)	$0.13	-$0.05	+$0.18	n/m
NAV per Share	$14.26	$14.41	-$0.15	-1.0%
Dividends Declared per Share (total)	$0.33	$0.31	+$0.02	+6.5%
Annualised Dividend Yield	9.3%	~8.8%	+~50bps	—
Portfolio Fair Value ($bn)	$15.0bn	$15.3bn	-$0.3bn	-2.0%
Net Leverage (x)	1.11x	~1.19x	-0.08x	-6.7%
Non-Accruals (% of portfolio at fair value)	0.8%	1.0%	-0.2pp	-20.0%
Annualised ROE on Adjusted NII	9.6%	~8.5%	+~110bps	—
New Investment Commitments ($m)	$319m	$676m	-$357m	-52.8%
Sales & Repayments ($m)	$747m	$1,500m	-$753m	-50.2%

Summary

OBDC delivered a sequentially stronger Q2 2026, with revenue of $401.3 million (beating the $397.0 million forecast) and GAAP NII per share of $0.36, above the $0.32 forecast. The primary earnings driver was non-recurring: management attributed much of the quarter-over-quarter NII increase to the repayment of its preferred-equity investment in Mavis Tire, from which Blue Owl collected approximately $274 million in cash, including $66 million of accrued PIK interest. On the credit side, the quarter was mixed — NAV per share declined to $14.26 from $14.41 due to an isolated Loparex credit markdown, while the company intentionally reduced net leverage to 1.11x, its lowest level in over two years, to provide substantial flexibility for deployment as more attractive market opportunities emerge. For investors, the key takeaway is that OBDC is operationally sound and well-capitalised but is navigating a structurally shrinking portfolio as repayments outpace new originations, and the stock's -16% YTD decline reflects the market's concern over forward earnings power in a lower-rate, tighter-spread environment.

Q1. Financial Performance — Key Metrics (Q2 2026)

Total investment income was $401.3 million for Q2 2026, compared to $396.8 million in Q1 2026 and $485.8 million in Q2 2025, reflecting a significant year-over-year compression driven by lower base rates and a reduced portfolio size. Net investment income after taxes was $176.2 million versus $159.2 million in Q1 2026. On a per-share basis, GAAP NII per share came in at $0.36, while adjusted NII per share increased to $0.34, compared to the prior quarter's $0.31, with total dividends declared of $0.33 per share representing an annualised yield of 9.3%. GAAP earnings per share (basic and diluted) were $0.13 for the quarter, a significant recovery from the -$0.05 reported in Q1 2026. Annualised return on equity improved to 9.6% from the prior quarter, which was sufficient to cover the base dividend of $0.31 per share by 110%. Year-over-year, the revenue decline of approximately 17% reflects the dual headwind of a shrinking portfolio and a lower floating-rate base.

Q2. Top Contributors Identified by Management

Net investment income growth was primarily driven by elevated non-recurring income from the realization of the large PIK investment in Mavis Tire and higher dividend income from the LSI specialty finance vehicle. The Mavis Tire investment generated a 1.5-times multiple on invested capital, according to Senior Managing Director Logan Nicholson, and was Blue Owl's largest PIK investment realization to date, contributing approximately $0.03 per share of fee income. CFO Jonathan Lamm noted the income was recorded as fee income because of the way the preferred instrument was repurchased, rather than as interest income. On the balance sheet, the Company repurchased approximately $35 million of OBDC common stock, which was accretive to NAV per share, and amended and extended its revolving credit facility with all banking partners renewing commitments, while issuing $800 million of unsecured debt. Following the Mavis repayment, PIK income as a percentage of total investment income declined to 10.7% in Q2, down from peak levels of over 13% two years ago — notable because lower base rates had reduced the cash interest income denominator simultaneously.

Q3. Key Detractors and Explanation

The primary detractor to NAV in Q2 2026 was Loparex Group. The investment in Loparex was moved to non-accrual status and marked down after a planned transformative M&A transaction that would have recapitalized the business failed to close. The write-down was severe: roughly $130.6 million in second-lien loans were marked at 5 cents on the dollar, down from 63 cents in the prior quarter, while approximately $4.7 million in first-lien debt was marked at 34 cents on the dollar, down from 99 cents. Loparex missed its June 30 interest payment on its second-lien term loan and failed to make first-lien amortization payments, entering into a forbearance agreement with its lenders. OBDC reported $99.4 million in net unrealized losses during the quarter, led by this significant markdown on its loans to Loparex Group. At the portfolio level, OBDC reported a decline in new investment activity attributed to depressed deal flow and a marked drop in refinancing transactions, with the portfolio continuing to contract following several consecutive quarters of net repayments.

Q4. Current Market Outlook — Bullish, Cautious, or Selective?

Management's posture is best characterised as selectively cautious with an improving deployment bias. Earlier in the year, credit spreads were volatile and sentiment was more cautious. As Q2 progressed, management began to see a more normalised backdrop with spreads stabilising, the rate outlook improving, and sentiment becoming more balanced. Against that backdrop, credit performance across the portfolio remained consistently strong, with borrower fundamentals holding up well. Packer stated that "underwriting discipline continues to take precedence over deployment volume," signalling the firm will not chase volume at the expense of quality. Packer noted the forward rate curve is roughly 100 basis points higher than earlier in the year, while spreads remain wider and financing terms have become more attractive for direct lenders. The company maintains a defensive sector posture, proactively avoiding cyclical industries such as energy and consumer discretionary in favour of large, mission-critical enterprise software and service providers. The current base dividend of $0.31 per share is viewed as sustainable and aligned with the long-term earnings power of the portfolio, supported by a healthy spillover income cushion of $0.29 per share.

Q5. Notable New Positions, Exits, or Strategic Shifts

OBDC removed non-accruing loans to Walker Edison Furniture Company LLC from its portfolio during Q2, representing an exit of a prior stressed credit. The most strategically significant event was the Mavis Tire full repayment: since the initial preferred equity investment, Mavis had roughly quadrupled in size and become one of the largest tire service companies in the country; in Q2, the company fully repaid OBDC's preferred equity investment, generating approximately $274 million in cash including $66 million in accrued PIK interest. On the liability side, the company ended the quarter with net leverage at 1.11 times — its lowest level in over two years — and during the quarter issued two unsecured bonds and extended the maturity of its revolving credit facility, improving its funding profile and preserving liquidity. Future capital allocation will continue to balance opportunistic share repurchases with the maintenance of a target leverage range of 0.9x to 1.25x. OBDC's $300 million share repurchase authorisation, announced in February 2026, remains active.

Q6. Risks Flagged for the Next 6–12 Months

Management and market commentators have flagged several key risks. First, the rate environment: the base dividend was reset lower at $0.31 in Q1 2026 specifically because of declining base rates and spread compression, and management has been explicit that if base rates decline further, earnings and dividends will adjust accordingly. Second, portfolio contraction: the fair value of OBDC's portfolio has declined to roughly $15.0 billion, down from $16.9 billion one year earlier, driven by elevated repayments outpacing new originations. The pace of recovery in M&A and deal activity is therefore critical. Third, isolated credit deterioration: while management emphasises the Loparex issue is idiosyncratic, the company has not seen broad-based deterioration in borrower fundamentals, with overall portfolio performance in line with expectations and non-accruals at 0.8% at fair value, slightly below the prior quarter and below industry averages. Fourth, structural and market risks: private equity activity remains subdued (which can slow deployment in direct lending), and non-traded BDC redemptions have been a source of pressure across the sector. Finally, the stock's -16% YTD discount to NAV (current price $10.44 versus NAV of $14.26 — approximately a 27% discount) represents both a risk of continued market dislocation and, management argues, a share repurchase opportunity.

Q7. Direct URL to Earnings Release / Investor Presentation

Most Recent Results (Q2 2026, released 5 August 2026 — SEC 8-K Exhibit 99.1):
https://www.sec.gov/Archives/edgar/data/0001655888/000165588826000055/exhibit991-obdcxpressrelea.htm

Q3 2026 Earnings Release Scheduling Announcement (1 October 2026 — SEC 8-K):
https://www.sec.gov/Archives/edgar/data/0001655888/000165588826000063/exhibit991pressrelease-sch.htm

Q3 2026 results will be released on Wednesday, November 4, 2026 after market close. The earnings call will be held on Thursday, November 5, 2026 at 10:00 a.m. Eastern Time. The call will be broadcast live at the News and Events section of OBDC's website at www.blueowlcapitalcorporation.com; pre-registration is available at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=y1QV7gtA

Q8. Earnings Call Transcript / Management Commentary (Q2 2026, 6 August 2026)

Source: Q2 2026 earnings call held 6 August 2026. Excerpts sourced from Investing.com transcript service, Yahoo Finance transcript summaries, and the SEC-filed press release. The Q3 2026 call has not yet taken place (scheduled 5 November 2026). All transcript content below is from Q2 2026.

Opening — Mike Mosticchio, Head of BDC Investor Relations:
"We are very pleased with the quarter and feel good about where things stand for OBDC. We generated quarter-over-quarter NII growth, maintained strong overall credit quality, and increased our financial flexibility during the quarter. In the second quarter, adjusted NII translated into a 9.6% annualized ROE, up over 100 basis points from last quarter, and comfortably covered the dividend."

Prepared Remarks — Craig W. Packer, Chief Executive Officer:
"As you'll recall, last quarter we reset the base dividend to better align with the forward earnings power of the portfolio following the impact of lower base rates and tighter spreads. This quarter's results provided a healthy cushion above that level. We also declared a $0.02 per share supplemental dividend in accordance with our framework, allowing shareholders to benefit from incremental earnings above the base dividend."

"We ended the quarter with net leverage at 1.11 times, our lowest level in over two years, giving us substantial flexibility to deploy as attractive opportunities emerge. On the financing front, during the quarter, we issued two unsecured bonds and extended the maturity of our revolving credit facility. Together, those actions improved our funding profile and preserved liquidity, allowing us to remain patient as the investment opportunity set develops."

"Earlier this year, credit spreads were volatile and sentiment was more cautious across the market. As the second quarter progressed, we began to see a more normalized backdrop with spreads stabilizing, the rate outlook improving, and sentiment becoming more balanced. Against that backdrop, credit performance across our portfolio remained consistently strong. Borrower fundamentals held up well, and the key credit metrics we track continued to perform in line with our expectations."

"In this environment, our pipeline remains active, but underwriting discipline continues to take precedence over deployment volume. Financing markets remain open for high-quality borrowers, and our lower leverage and liquidity profile gives us additional flexibility to deploy capital into opportunities."

Portfolio Commentary — Logan Nicholson, Senior Managing Director / President:
"Starting with investment activity, our transaction activity remains muted in the second quarter. OBDC had fundings of $429 million against $747 million of repayments, resulting in ending net leverage of 1.11 times. Repayments did moderate from recent peaks but remained healthy, which gives us additional flexibility for deployment going forward."

"The most notable [realization] was the repayment of our investment in Mavis Tire, which is a strong case study of how we approach structured PIK and junior capital investments to create long-term shareholder value. As we've discussed on prior calls, the vast majority of our PIK exposure was structured that way at inception of the investment, where we saw an opportunity to enhance returns for shareholders."

"Importantly, we have not seen broad-based deterioration in fundamentals of our borrowers. The overall portfolio continues to perform in line with our expectations, and the credit metrics we track remain stable. At the end of the quarter, non-accruals were 0.8% at fair value, slightly down from last quarter and below industry averages, with one name removed and one new addition, which was Loparex."

"Portfolio company net leverage averaged 5.8 times, which has modestly declined over the past two years and is at a level we feel comfortable given the fundamental strength of our borrowers. LTVs also remained stable this quarter at 47%."

Closing — Craig W. Packer, CEO:
"In closing, we believe OBDC combines resilient credit performance, ample financial flexibility, and the discipline to selectively capitalize on improving market conditions." "We are pleased with OBDC's performance this quarter, generating strong earnings resulting in a 9.6% annualized return on adjusted net investment income and healthy dividend coverage. Portfolio company operating trends remained stable, and credit performance continued to track in line with expectations."

Q&A Session Highlights:
Analysts focused heavily on the sources of fee income, the pace of deal activity, and capital allocation. One question centred on why fee income was elevated despite low originations; management said the answer was the Mavis Tire repayment, not portfolio amendments. Analysts also asked about buybacks versus leverage and new originations. Management said it views every dollar of capital as a deployment decision and will keep balancing repurchases, leverage, and new investments based on market conditions. Blue Owl reaffirmed confidence in the sustainability of its $0.31 base dividend, pointing to 110% dividend coverage in the quarter and spillover income of approximately $0.29 per share as support for that view. The company said it has more than $10 billion of available capital across its platform and could deploy selectively as conditions improve, with Packer noting the forward rate curve is roughly 100 basis points higher than earlier in the year, while spreads remain wider and financing terms have become more attractive for direct lenders.

Note: The Q3 2026 results for the period ended 30 September 2026 are due to be released on 4 November 2026. No Q3 2026 actuals, transcript, or management commentary are yet publicly available. This report will be updated following that release and the subsequent earnings call on 5 November 2026.