Thank you, Debbie, and good morning, everyone. Thank you for joining us for Fidus Investment Corporation's first quarter 2026 earnings conference call.

With me this morning are Ed Ross, Fidus Investment Corporation's Chairman and Chief Executive Officer, and Shelby Sherard, Chief Financial Officer. Fidus Investment Corporation issued a press release yesterday afternoon with the details of 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'd 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, May 7th, 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 Ed.

Good morning, Ed.

Good morning, Jody. Good morning, everyone.

Welcome to our first quarter 2026 earnings conference call. On today's call, I'll 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'll be happy to take your questions.

Fidus's first quarter results were extremely strong from an income statement perspective. With an adjusted NII of 62 cents per share, our debt portfolio continued to overearn our base dividend of 43 cents 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 $1.14 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 and 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 62 cents per share, which consists of a base dividend of 43 cents per share and a supplemental dividend of 19 cents per share, equal to 100% of the surplus in adjusted NII over the base dividend from the prior quarter, which will be payable on June 29th, 2026 to stockholders of record as of June 16th, 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, and 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 [Suit-Kote's?] debt into equity.

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 haven't 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 approximately 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 uncertainties and associated market volatility, our pipeline of investment opportunities is decent, and our longstanding 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.

Now I'll turn the call over to Shelby to provide details on our financial and operating results. Shelby?

Thank you, Ed, and good morning, everyone. I'll 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 31st, a $5.4 million increase from Q4, primarily driven by a $1.4 million increase in interest income, driven by 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 Allwaste, partially offset by lower origination and prepayment fees from investment activity.

Total expenses, including tax provision, were $22.9 million for the first quarter, 0.4 million higher than 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, 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 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 31st was 65 cents per share versus 53 cents 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 cents per share in Q1 versus 52 cents in Q4. For the three months ended March 31st, 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 [Suit-Kote?]

, taking this non-accrual off our books, which was partially offset by $3.9 million in realized gains on our equity investments in [CAH Intermediate?] and [Zont?]

. 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 31st was 0.9 times. Our statutory leverage, excluding exempt SBA debentures, was 0.6 times.

The weighted average interest rate on our outstanding debt was 5.2% as of quarter end. Turning now to portfolio statistics.

As of March 31st, 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 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 31st, 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'd like to discuss our available liquidity.

As of March 31st, our liquidity and capital resources included cash of $50.4 million, $139.9 million of availability on our line of credit, and $54 million of available SBA debentures, resulting in total liquidity of approximately $244.2 million. Now I'll turn the call back to Ed for concluding comments.

Thanks, Shelby. As always, I'd like to thank our team and the Board of Directors at Fidus 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?

Obviously, they're preferring the person with better looks over Robert, I'm honored.

Done there.

No offense, Robert. Shelby, were there any non-recurring items in the quarter, or might I missed it your comments?

No, we did incur a rather large fee that I'd characterize as more of a one-time fee. It was about $6.97 million related to the American Allwaste debt refinancing.

That drove the fee income in Q1 and kind of beat versus consensus.

That's really it for me. Thank you very much.

Thank you, Chris.

Good morning, and thank you, Chris, for letting me go second. I appreciate it.

Congratulations, Shelby and team, for a really good quarter. A question about that American Allwaste fee.

If I look at the position size is about, just under, 50 million bucks 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 thing last quarter was marked well above cost, there was some differences in how the prior thing was structured. Are there any other 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'm just trying to get a feel, obviously probably not going to happen every quarter, but can this kind of outsized refinancing fee happen again in different assets?

Sure. It's a great question, Robert.

I think the could it happen again to a certain degree to this magnitude? Sure, anything's possible, but it's a pretty healthy fee, as you've highlighted, and it's not the norm of every credit by any stretch of imagination.

We have a few other investments where we have fees that can be earned on the back end. What I would say in this case is, obviously, American Allwaste 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 number should be, if you will.

It's not This is not, okay, this is the business going forward or anything like that. It's just, we are a solution provider.

We ended up providing a solution that was needed, and we were paid accordingly for that solution, is the way I would think about it.

Got it. Thank you.

I not asking, but I wonder if that was COVID timing-related, cuz obviously it was in before that. I appreciate that.

Then just the more general, Ed, you characterized the pipeline as decent, but the market is kind of lackluster, which obviously is a theme across the space, not surprisingly, with the number of macro uncertainties. Do would you characterize it is that that lackluster market is driven by these uncertainties?

between oil, macro, etc. Do you need more Do you think the market needs more certainty on that for the PE market in in your segment to show a little bit more life?

Sure. Great question.

Let me give you a little color on just what we've experienced in Q1 and what not. As most people in the space felt deal flow was more modest in nature and we believe largely due to seasonal patterns, and I'm talking about Q1.

Then, that was prior to the geopolitical conflict in the Middle East. Also 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 pick-up in activity, but the pace will be somewhat dependent upon a reduction in the current level of uncertainty that's in the world today. As we sit here today, there's quite a bit of pent-up demand in M&A, and that's a concept that we've it's not new, we've all heard.

The good news from our perspective, though, is the fragmented nature of the lower middle market and its large overall size. This fact should continue to provide ample investment opportunities for us to pursue no matter if M&A picks up or does not.

We really like that aspect of the lower middle market. There's still activity going on as we sit here today, but it's clearly not at anything close to robust levels.

We do have investment opportunities with both existing portfolio companies as well as new investment opportunities, but, again, more lackluster relative to robust times, if you will. At the end of the day, we expect it to be, an okay to decent originations quarter.

We expect repayments actually to probably be on the lighter side. Now I say all that, a lot of things can change, a lot of deals that we think are going to close may not close, who knows?

That would be our expectation as we sit here today is a, help some decent growth this quarter in the portfolio, but a little lighter on the repayment side overall.

Hope

that got gives you some.

Got it. That is very helpful.

Thank you. Then just kind of following on the next part of that really is spreads.

Obviously, your year portfolio yields bear down a tiny bit versus Q4, looking for And obviously, the spreads are kind of stable as well, I think. Looking forward, there's talking in the marketplace in certainly the larger players, more upmarket about spread expansion.

Maybe that's impacted by the 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 do you think there's actually a prospect for expansion in this the smaller end of the market? Obviously, I would differentiate that between the overall market and maybe what you're seeing on the software side.

Sure. Great question.

What we are seeing, what I would say is wider spreads, but I'll also say, and this is where we play the most, is, 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.

It's a situation where I think there is ample capital out there, and so there is competition and but for the right assets, obviously, we still think the spreads are extremely attractive, and the terms are also remain very strong in the lower middle market in terms of covenants, security, what have you. There is opportunities to increase, spreads, and but I would argue for great assets, the competition is still, meaningful, if you will.

Got it. I appreciate it.

Thank you.

Again, congratulations on the quarter.

Thanks, Robert. Good talking to you.

Thank you, Debbie.

Thank you, Debbie. 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.