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Operator: Good day, and welcome to the Fidus Investment Corporation First Quarter 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on a touch-tone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Jody Burfening. Please go ahead.

Jody Burfening: Thank you, Debbie, and good morning, everyone, and thank you for joining us for Fidus Investment Corporation’s First Quarter 2026 Earnings Conference Call. With me this morning are Edward H. Ross, Fidus Investment Corporation’s chairman and chief executive officer, and Shelby Elizabeth Sherard, chief financial officer. Fidus Investment Corporation issued a press release yesterday afternoon with the company’s quarterly financial results. A copy of the press release is available on the Investor Relations page of the company’s website at fdus.com. I would also like to call your attention to the customary safe harbor disclosure regarding forward-looking information included on today’s call. The conference call today will contain forward-looking statements including statements regarding the goals, strategies, beliefs, future potential, operating results, and cash flows of Fidus Investment Corporation.

Although management believes these statements are reasonable based on estimates, assumptions, and projections as of today, 05/07/2026, these statements are not guarantees of future performance. Time-sensitive information may no longer be accurate at the time of any telephonic or webcast replay. Actual results may differ materially as a result of risks, uncertainties, and other factors including, but not limited to, the factors set forth in the company’s filings with the Securities and Exchange Commission. Fidus undertakes no obligation to update or revise any of these forward-looking statements. With that, I would now like to turn the call over to Edward H. Ross. Good morning, Ed.

Edward H. Ross: Good morning, Jody, and good morning, everyone. Welcome to our first quarter 2026 earnings conference call. In today’s call, I will start with a review of our first quarter performance and our portfolio at quarter end, and then share with you our outlook for 2026. Shelby will cover the first quarter financial results and our liquidity position. After we have completed our prepared remarks, we will be happy to take your questions. Fidus’ first quarter results were extremely strong from an income statement perspective. With adjusted NII of 62¢ per share, our debt portfolio continued to over-earn our base dividend of $0.43 per share and to support a payout of excess earnings to shareholders. Adjusted NII grew 14.8% to $23.7 million, reflecting a 13.1% increase in interest income on higher average income-producing assets along with higher fee income than last year.

We ended the quarter with estimated spillover income of $1[inaudible] per share. Deal activity was relatively modest during the quarter, including M&A transactions completed by our portfolio companies. Overall, our portfolio remains healthy, characterized by niche market leaders with traits that provide long-term barriers to entry that ensure their value proposition and competitive positioning. Through our strict underwriting process, we ensure that we are selecting companies with proven, resilient business models that generate recurring revenue and cash flow to service debt and to provide capital for growth. We remain focused on industries we know well in the lower middle market, leveraging our established relationships with deal sponsors.

For the second quarter of 2026, the Board of Directors declared a total dividend of $0.62 per share, which consists of a base dividend of $0.43 per share and a supplemental dividend of 19¢ per share, equal to 100% of the surplus in adjusted NII over the base dividend from the prior quarter, which will be payable on 06/29/2026 to stockholders of record as of 06/16/2026. Net asset value held steady at $742 million at quarter end, or $19.55 per share. Originations in the first quarter amounted to $118.7 million, nearly all of which consisted of first lien debt investments in support of both M&A transactions and debt recapitalizations. We also invested $1.8 million in equity securities of two new portfolio companies, consistent with our investment strategy of maintaining a portfolio that is structured to produce both high levels of current and recurring income and the potential for capital gains from monetizing equity investments.

Subsequent to quarter end, we invested an additional $21.5 million in one new portfolio company. Proceeds from repayments and realizations totaled $73.1 million for the first quarter, resulting from a mix of M&A and refinancing activity. We monetized equity investments in two portfolio companies, generating $3.9 million in realized gains. Offsetting these gains was a total of approximately $15 million in realized losses in connection with the conversion of Student Connector’s debt into [inaudible]. Looking at net investment activity, which takes debt recapitalizations into account, our portfolio grew by $46 million in Q1. First lien investments comprised 87% of the debt portfolio, reflecting the ongoing migration towards first lien securities.

Combined with our $149.6 million equity portfolio, we ended the quarter with a portfolio totaling $1.4 billion on a fair value basis, equal to 102.5% of cost. Overall, the portfolio remains healthy from a credit quality perspective, supported by very solid underlying portfolio company performance. We ended the quarter with only one portfolio company on non-accrual that accounted for less than 1% of the total portfolio on both a fair value and cost basis. Our portfolio remains well diversified by industry, consisting of a mix of manufacturing, distribution, and services companies. In addition, we have a well-diversified group of software and IT services names within our portfolio that are exposed to both opportunities and risks associated with AI.

This group represents about 32% of our total portfolio on a fair value basis. We have not seen any negative impacts from AI on this portfolio. Importantly, nearly all of our debt investments in these companies are in highly structured first lien securities with at least two maintenance covenants, and all portfolio companies except for one are backed by high-quality sponsors with proven track records in the space. The weighted average loan-to-value for this portfolio was 42% this quarter, below our total portfolio weighted average loan-to-value of approximately 45% on a cost basis. In addition, the current contractual duration of our debt investments in this category is 2.2 years, enhancing our ability to manage any tougher situations we might encounter down the road.

Equity investments in software and IT services companies totaled $16.1 million, or approximately 11% of our total equity portfolio on a fair value basis. In closing, our portfolio remains well positioned to continue to generate adjusted NII in excess of our base dividend and to realize gains from monetizing equity investments. Although M&A activity is currently lackluster in light of the geopolitical and associated market volatility, our pipeline of investment opportunities is decent, and our long-standing relationships with deal sponsors and lower middle market expertise position us to identify high-quality companies that meet our rigorous underwriting standards for investment. We will, as always, manage the business for the long term, staying focused on our goals of preserving capital and generating attractive risk-adjusted returns for our shareholders.

I will now turn the call over to Shelby to provide details on our financial and operating results. Shelby?

Shelby Elizabeth Sherard: Thank you, Ed, and good morning, everyone. I will review our first quarter results in more detail and close with comments on our liquidity position. Please note, I will be providing comparative commentary versus the prior quarter, Q4 2025. Total investment income was $47.5 million for the three months ended March 31, 2026, a $5.4 million increase from Q4, primarily driven by a $1.4 million increase in interest income due to increased average debt investments outstanding and a $4.1 million increase in fee income due to a $6.9 million fee related to the refinancing of our debt investments in American Always, partially offset by lower origination and prepayment fees from investment activity. Total expenses, including tax provision, were $22.9 million for the first quarter, a $0.4 million increase versus Q4, primarily driven by a $0.4 million increase in interest expense related primarily to higher average debt balances outstanding, a $1.4 million increase in base management and income incentive fees given the increase in assets under management and higher fee income in Q1, and a $0.9 million increase in G&A expenses.

G&A expenses were higher due to the write-off of unamortized deferred financing costs and incremental legal expenses related to our new registration statement, and the timing of annual audit and tax compliance expenses incurred in Q1. These were offset by a $0.7 million decrease in the capital gains fee and a $1.8 million decrease in income tax provision related to the annual excise tax accrual in Q4. Net investment income, or NII, for the three months ended March 31 was $0.65 per share versus $0.53 per share in Q4. Adjusted NII, which excludes any capital gains incentive fee accruals or reversals attributable to realized and unrealized gains and losses on investments, was 62¢ per share in Q1 versus 52¢ in Q4. For the three months ended March 31, we recognized approximately $12.2 million of net realized losses related to a $15.8 million realized loss on the exit of our debt investments in Pseudo Connector, taking this non-accrual off our books, which was partially offset by $3.9 million in realized gains on our equity investments in CIH Intermediate and Zocd.

We ended the quarter with $682.2 million of debt outstanding, comprised of $260.5 million of SBA debentures, $325 million of unsecured notes, $85.2 million outstanding on the line of credit, and $11.6 million of secured borrowings. Our net debt-to-equity ratio as of March 31 was 0.9x. Our statutory leverage, excluding exempt SBA debentures, was 0.6x. The weighted average interest rate on our outstanding debt was 5.2% as of quarter end. Turning now to portfolio statistics, as of March 31 our total investment portfolio had a fair value of $1.4 billion. Our average portfolio company investment on a cost basis was $13.8 million, which excludes investments in seven portfolio companies that sold their operations or are in the process of winding down.

We have equity investments in approximately 85.6% of our portfolio companies, with an average fully diluted equity ownership of 2%. Weighted average effective yield on debt investments was 12.5% as of March 31, a slight decrease versus 12.6% at the end of Q4. The weighted average yield is computed using effective interest rates for debt investments at cost, including the accretion of original issue discount and loan origination fees, but excluding investments on non-accrual, if any. Now I would like to discuss our available liquidity. As of March 31, our liquidity and capital resources included cash of $50.4 million, $1.399 billion of availability on our line of credit, and $54.0 million of available SBA debentures, resulting in total liquidity of approximately $244.2 million.

I will now turn the call back to Ed for concluding comments.

Edward H. Ross: Thanks, Shelby. As always, I would like to thank our team and the Board of Directors at Fidus Investment Corporation for their dedication and hard work, and our shareholders for their continued support. I will now turn the call over to Debbie for Q&A. Debbie?

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Operator: We will now open the call for questions. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question is from Robert Dodd with Raymond James. Please go ahead.

Operator: Excuse me. I just put Christopher Nolan on the podium. My apologies. Robert will be next. Christopher Nolan with Ladenburg Thalmann, please go ahead.

Christopher Nolan: Obviously, they are preferring the person with the better look over Robert, so I am honored. Well done there. No offense, Robert. Shelby, were there any nonrecurring items in the quarter? Am I missing your comments?

Shelby Elizabeth Sherard: No. We did incur a rather large fee that I would characterize as more of a one-time fee. It was about $6.97 million related to the American Always debt refinancing. So that drove the fee income in Q1 and the beat versus consensus.

Christopher Nolan: Okay. That is really it for me. Thank you very much.

Operator: Thank you, Chris. The next question is from Robert Dodd with Raymond James. Please go ahead.

Robert Dodd: Good morning, and thank you, Chris, for letting me go second. I appreciate it. And congrats, Shelby and team, for a really good quarter. A question about that American Always fee. If I look, the position size is about $50 million now, and obviously it was smaller than that before. A $6.9 million fee on a refinancing of a position that size seems pretty high. Now, obviously, the first three last quarter was marked well above cost, so there were some odd differences in how the prior thing was structured. Is it a normal asset that just happened to repay and generate a really good fee, or was there something unusual about the structure of that asset? I am trying to get a feel—obviously it is probably not going to happen every quarter—but can this kind of outsized refinancing fee happen again in different assets?

Edward H. Ross: Sure. It is a great question, Robert. Could it happen again to this magnitude? Anything is possible, but it is a pretty healthy fee, as you highlighted, and it is not the norm for every credit by any stretch of the imagination. We have a few other investments where we have fees that can be earned on the back end. In this case, American Always has been in our portfolio for a while. There was a point in time where there was a need for capital on a relatively quick basis, and we ended up being the source of that capital. We priced that capital in accordance with what we thought the numbers should be. This is not our business going forward or anything like that. We are a solution provider, we provided a solution that was needed, and we were paid accordingly for that solution. That is the way I would think about it.

Robert Dodd: Got it. Thank you. I wonder if that was COVID-timing related because, obviously, it was before then. I appreciate that. And then more generally, you characterized the pipeline as decent, but the market is kind of lackluster, which is a theme across the space, not surprisingly with the number of macro uncertainties. Would you characterize that lackluster market as driven by these uncertainties—oil, macro, et cetera? And do you think the market needs more certainty for the PE market in your segment to show a little bit more life?

Edward H. Ross: Great question. Let me give you a little color on what we experienced in Q1. As most people in this space felt, deal flow was more modest in nature, largely due to seasonal patterns in Q1. That was prior to the geopolitical conflict in the Middle East. At that time, general expectations were for an increase in both deal flow and investment activity throughout the year. As we sit here today, we still have confidence in a pickup in activity, but the pace will be somewhat dependent upon a reduction in the current level of uncertainty in the world today. There is quite a bit of pent-up demand in M&A—nothing new there. The good news from our perspective is the fragmented nature of the lower middle market and its large overall size.

That should continue to provide ample investment opportunities for us to pursue, whether M&A picks up or not. We like that aspect of the lower middle market. There is still activity going on today, but it is not close to robust levels. We have investment opportunities with both existing portfolio companies and new opportunities. At the end of the day, we expect an okay to decent originations quarter. We expect repayments to be on the lighter side. A lot of things can change; deals that we expect to close may not close. But that would be our expectation today—some decent growth this quarter in the portfolio, but lighter on the repayment side overall.

Robert Dodd: Okay. That is helpful. Thank you. And then following on, spreads—your portfolio yield ticked down a tiny bit versus Q4. Looking forward, there has been talk in the marketplace, certainly with larger buyers, about spread expansion, maybe impacted by flows in the private perpetual vehicles. What are your thoughts on spreads in your end of the market? Do you think stability is more likely, or is there a prospect for expansion in the smaller end of the market? And I would differentiate between the overall market and what you are seeing on the software side.

Edward H. Ross: Great question. We are seeing wider spreads, but for truly great assets—great operating companies—there continues to be a high level of competition, albeit slightly better pricing relative to prior to the conflict. There is ample capital out there, so there is competition, but for the right assets we still think spreads are extremely attractive and the terms remain very strong in the lower middle market in terms of covenants, security, and so on. There are opportunities to increase spreads, but for great assets competition is still meaningful.

Robert Dodd: Got it. I appreciate it. Thank you, and again, congratulations on the quarter.

Edward H. Ross: Thanks, Robert. Good talking to you.

Operator: Please press star then 1 if you would like to ask a question. At this time, we have no further questions in the queue.

Operator: Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Edward H. Ross for closing remarks.

Edward H. Ross: Thank you, Debbie, and thank you, everyone, for joining us this morning. We look forward to speaking with you on our second quarter call in early August. Have a great day and a great weekend.

Operator: This conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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