The firm achieved a 100% gross margin in 2026Q4, reflecting the structural cost advantages of its internal management model compared to traditional fee-heavy investment structures.
| Metric | Mar'26 | Mar'25 | Mar'24 | Mar'23 | Mar'22 | Mar'21 | Mar'20 | Mar'19 | Mar'18 | Mar'17 | Mar'16 | Mar'15 | Mar'14 | Mar'13 | Mar'12 | Mar'11 | Mar'10 | Mar'09 | Mar'08 | Mar'07 | Mar'06 | Mar'05 | Mar'04 | Mar'03 | Mar'02 | Mar'01 | Mar'00 | Mar'99 | Mar'98 | Mar'97 |
|---|
| Sales/Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Revenue Growth % | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Cost of Goods Sold | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| COGS % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Gross Profit | 231.99M | 108.85M | 109.06M | 61.45M | 83M | 72.58M | -236K | 48.87M | 53.19M | 38.39M | 14.55M | 66.11M | 120.36M | 116.79M | 99.8M | 59.45M | 78.37M | 13.99M | 6.79M | 6.51M | 4.4M | 16.25M | 87.06M | -40.44M | 3.22M | 2.88M | 427.89K | 891.49K | 1.6M | 737.13K |
| Gross Margin % | 94.33% | 66.45% | 71.68% | 68.03% | 80.64% | 100% | -1.51% | 80.05% | 91.6% | 97.49% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 93.4% | 90.99% | 97.48% | 99.39% | 101.19% | 77.59% | 71.59% | 48.4% | 68.17% | 78.92% | 53.73% |
| Gross Profit Growth % | 113.12% | -0.19% | 77.47% | -25.96% | 14.37% | 30852.54% | -100.48% | -8.12% | 38.54% | 163.95% | -78% | -45.07% | 3.05% | 17.03% | 67.86% | -24.14% | 460.41% | 105.82% | 4.34% | 47.9% | -72.91% | -81.33% | 315.27% | -1357.04% | 11.55% | 574.04% | -52% | -44.21% | 116.79% | 131.58% |
| Operating Expenses | 42.93M | 29.44M | 24.46M | 21.39M | 36.16M | 17.02M | 15.91M | 14.95M | 13.82M | 12.82M | 21.22M | 12.4M | 9.08M | 8.37M | 6.67M | 5.64M | 3.9M | 3.67M | 2.97M | 2.23M | 1.95M | 13.76M | 84.38M | -42.88M | -22.61M | 10.68M | -1.38M | -979.32K | -1.24M | -1.96M |
| OpEx % of Revenue | 17.46% | 17.97% | 16.08% | 23.68% | 35.13% | 23.44% | 101.98% | 24.48% | 23.81% | 32.55% | 145.91% | 18.76% | 7.55% | 7.17% | 6.69% | 9.48% | 4.98% | 26.21% | 43.69% | 31.92% | 40.39% | 82.56% | 96.34% | 107.29% | -545.35% | 265.12% | -155.8% | -74.89% | -61.22% | -143.19% |
| Selling, General & Admin | 23.92M | 10.93M | 8.95M | 7.81M | 6.57M | 5.31M | 5.75M | 4.8M | 4.42M | 4.43M | 11.43M | 5.75M | 2.79M | 2.74M | 2.27M | 1.88M | 1.43M | 2.04M | 1.62M | 1.36M | 1.21M | 1.39M | 1.27M | 1.3M | 894.61K | 850.96K | 804.93K | 1.11M | 1.21M | 1.15M |
| SG&A % of Revenue | 9.73% | 6.67% | 5.88% | 8.65% | 6.38% | 7.31% | 36.83% | 7.86% | 7.61% | 11.26% | 78.58% | 8.7% | 2.32% | 2.35% | 2.27% | 3.17% | 1.83% | 14.59% | 23.83% | 19.45% | 25.04% | 8.32% | 1.45% | -3.25% | 21.57% | 21.12% | 91.04% | 84.86% | 59.58% | 83.63% |
| Research & Development | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Operating Income | 189.06M | 79.41M | 84.6M | 40.07M | 46.84M | 55.56M | -16.14M | 33.93M | 39.37M | 25.58M | -6.68M | 53.71M | 111.27M | 108.42M | 93.12M | 53.81M | 74.47M | 10.32M | 3.83M | 4.29M | 2.45M | 2.49M | 2.68M | 2.43M | 25.83M | -7.8M | 1.81M | 1.87M | 2.84M | 2.7M |
| Operating Margin % | 76.87% | 48.48% | 55.6% | 44.36% | 45.51% | 76.56% | -103.49% | 55.57% | 67.8% | 64.94% | -45.91% | 81.24% | 92.45% | 92.83% | 93.31% | 90.52% | 95.02% | 73.79% | 56.31% | 61.48% | 50.6% | 14.92% | 3.06% | -6.09% | 622.93% | -193.53% | 204.2% | 143.07% | 140.14% | 196.92% |
| Operating Income Growth % | 138.07% | -6.13% | 111.16% | -14.46% | -15.7% | 444.14% | -147.59% | -13.82% | 53.93% | 482.99% | -112.43% | -51.73% | 2.63% | 16.43% | 73.05% | -27.74% | 621.64% | 169.7% | -10.74% | 75.07% | -1.53% | -7.1% | 9.94% | -90.57% | 431.31% | -531.83% | -3.5% | -34.08% | 5.05% | -7.81% |
| EBITDA | 196.03M | 85.28M | 88.91M | 42.82M | 49.07M | 57.53M | -13.74M | 35.32M | 40.3M | 26.04M | -6.59M | 53.77M | 111.29M | 108.45M | 93.15M | 53.84M | 74.5M | 10.36M | 3.86M | 4.3M | 2.46M | 2.5M | 2.7M | 2.46M | 25.86M | -7.77M | 1.84M | 1.9M | 2.86M | 2.73M |
| EBITDA Margin % | 79.71% | 52.06% | 58.43% | 47.4% | 47.67% | 79.27% | -88.08% | 57.85% | 69.4% | 66.11% | -45.32% | 81.32% | 92.47% | 92.86% | 93.34% | 90.56% | 95.06% | 74.08% | 56.8% | 61.72% | 50.93% | 15.02% | 3.08% | -6.15% | 623.57% | -192.79% | 207.81% | 144.95% | 141.31% | 199.2% |
| EBITDA Growth % | 129.87% | -4.08% | 107.65% | -12.75% | -14.7% | 518.69% | -138.9% | -12.35% | 54.78% | 494.95% | -112.26% | -51.69% | 2.62% | 16.43% | 73.01% | -27.73% | 619.14% | 168.46% | -10.33% | 74.61% | -1.58% | -7.11% | 9.74% | -90.5% | 432.93% | -522.69% | -3.06% | -33.76% | 4.72% | -7.8% |
| D&A (Non-Cash Add-back) | 6.97M | 5.87M | 4.3M | 2.75M | 2.23M | 1.97M | 2.4M | 1.39M | 927K | 459K | 86K | 55K | 23K | 30K | 25K | 27K | 33K | 40.48K | 32.76K | 16.81K | 16.14K | 17.6K | 19.09K | 21.67K | 26.26K | 29.89K | 31.98K | 24.67K | 23.77K | 31.24K |
| EBIT | 186.9M | 79.41M | 84.6M | 40.07M | 46.84M | 55.56M | -16.14M | 33.93M | 39.37M | 25.58M | -6.68M | 53.71M | 111.27M | 108.42M | 93.12M | 53.81M | 74.47M | 10.32M | 3.83M | 4.29M | 2.45M | 2.49M | 2.68M | 2.43M | 25.83M | -7.8M | 1.81M | 1.87M | 2.84M | 2.7M |
| Net Interest Income | 152.52M | 131.91M | 117.66M | 76.21M | 48.55M | 38.35M | 31.08M | 25.12M | 17M | 11.59M | 4.93M | 9.35M | 11.98M | 2.08M | 1.98M | 1.36M | 1.04M | 1.38M | 2.26M | 1.85M | 69.52K | 654.4K | 315.78K | 223.63K | -606.85K | -602.1K | 427.89K | 891.49K | 1.6M | 737.13K |
| Interest Income | 219.14M | 186.87M | 160.75M | 105.08M | 68.47M | 56.29M | 46.99M | 37.3M | 21.87M | 12.58M | 4.93M | 9.35M | 11.98M | 2.08M | 1.98M | 1.36M | 1.04M | 1.38M | 2.26M | 2.31M | 505.54K | 1.07M | 846.85K | 700.39K | 322.52K | 542.24K | 884.15K | 1.31M | 2.03M | 1.37M |
| Interest Expense | 66.62M | 54.96M | 43.09M | 28.87M | 19.92M | 17.94M | 15.84M | 12.18M | 4.88M | 989K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 460.4K | 436.02K | 420.35K | 531.07K | 476.76K | 929.37K | 1.14M | 456.26K | 416.17K | 426.96K | 634.67K |
| Other Income/Expense | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Pretax Income | 120.28M | 79.41M | 84.6M | 40.07M | 46.84M | 55.56M | -16.14M | 33.93M | 39.37M | 25.58M | -6.68M | 53.71M | 111.27M | 108.42M | 93.12M | 53.81M | 74.47M | 10.32M | 3.83M | 4.29M | 2.45M | 2.49M | 2.68M | 2.43M | 25.83M | -7.8M | 1.81M | 1.87M | 2.84M | 2.7M |
| Pretax Margin % | 48.91% | 48.48% | 55.6% | 44.36% | 45.51% | 76.56% | -103.49% | 55.57% | 67.8% | 64.94% | -45.91% | 81.24% | 92.45% | 92.83% | 93.31% | 90.52% | 95.02% | 73.79% | 56.31% | 61.48% | 50.6% | 14.92% | 3.06% | -6.09% | 622.93% | -193.53% | 204.2% | 143.07% | 140.14% | 196.92% |
| Income Tax | 7.29M | 8.87M | 1.21M | 6.97M | 4.03M | 4.68M | 6.21M | 870K | 62K | 2.1M | -1.28M | 270K | -739K | 590K | 118K | 126K | 930K | 136.18K | 111.16K | -53.32K | 59.22K | 80.69K | -4.32M | 135.51K | 151.96K | 181.99K | 142.49K | 109.1K | -111.68K | -127.33K |
| Effective Tax Rate % | 6.06% | 11.16% | 1.43% | 17.4% | 8.59% | 8.42% | -38.44% | 2.56% | 0.16% | 8.22% | 19.14% | 0.5% | -0.66% | 0.54% | 0.13% | 0.23% | 1.25% | 1.32% | 2.91% | -1.24% | 2.42% | 3.25% | -161.44% | 5.57% | 0.59% | -2.33% | 7.89% | 5.83% | -3.94% | -4.71% |
| Net Income | 113M | 70.55M | 83.39M | 33.09M | 42.81M | 50.88M | -22.35M | 33.06M | 39.31M | 23.47M | -5.4M | 53.44M | 112.01M | 107.83M | 93.01M | 53.69M | 73.54M | -138.31M | -139.01M | 166.88M | 96.19M | 14.22M | 85.47M | -41.73M | 25.68M | -7.98M | -17.07M | -38.48M | 78.6M | 32.18M |
| Net Margin % | 45.95% | 43.07% | 54.81% | 36.64% | 41.6% | 70.11% | -143.28% | 54.15% | 67.69% | 59.6% | -37.12% | 80.83% | 93.07% | 92.33% | 93.2% | 90.3% | 93.83% | -988.96% | -2045.93% | 2393.44% | 1987.8% | 85.32% | 97.58% | 104.41% | 619.27% | -198.05% | -1930.32% | -2942.33% | 3881.38% | 2346.15% |
| Net Income Growth % | 60.17% | -15.4% | 151.98% | -22.71% | -15.86% | 327.65% | -167.61% | -15.9% | 67.45% | 534.7% | -110.1% | -52.29% | 3.87% | 15.94% | 73.23% | -27% | 153.17% | 0.51% | -183.3% | 73.49% | 576.22% | -83.36% | 304.83% | -262.5% | 421.85% | 53.25% | 55.64% | -148.95% | 144.21% | -39.02% |
| Net Income (Continuing) | 113M | 70.55M | 83.39M | 33.09M | 42.81M | 50.88M | -22.35M | 33.06M | 39.31M | 23.47M | -5.4M | 53.44M | 112.01M | 107.83M | 93.01M | 53.69M | 73.54M | -138.31M | -139.01M | 166.88M | 96.19M | 14.22M | 85.47M | -41.73M | 25.68M | -7.98M | -17.07M | -38.48M | 78.6M | 32.18M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 1.90 | 1.47 | 2.05 | 1.10 | 1.87 | 2.67 | -1.24 | 1.98 | 2.44 | 1.48 | -0.34 | 3.44 | 7.32 | 6.94 | 6.02 | 3.58 | 4.91 | -9.24 | -8.94 | 7.52 | 6.23 | 0.92 | 5.54 | -2.72 | 1.68 | -0.52 | -1.12 | -2.52 | 5.19 | 2.14 |
| EPS Growth % | 29.25% | -28.29% | 86.36% | -41.18% | -29.96% | 315.32% | -162.63% | -18.85% | 64.86% | 535.29% | -109.88% | -53.01% | 5.48% | 15.28% | 68.16% | -27.09% | 153.14% | -3.36% | -218.88% | 20.71% | 577.17% | -83.39% | 303.68% | -261.9% | 423.08% | 53.57% | 55.56% | -148.55% | 142.52% | -38.86% |
| EPS (Basic) | 1.98 | 1.47 | 2.05 | 1.10 | 1.87 | 2.67 | -1.24 | 1.98 | 2.45 | 1.48 | -0.35 | 3.45 | 7.36 | 6.94 | 6.02 | 3.58 | 4.91 | -9.24 | -8.94 | 7.52 | 6.23 | 0.92 | 5.54 | -2.72 | 1.68 | -0.52 | -1.12 | -2.52 | 5.19 | 2.14 |
| Diluted Shares Outstanding | 65.83M | 51.19M | 40.73M | 30.02M | 22.84M | 19.06M | 18M | 16.73M | 16.14M | 15.88M | 15.72M | 15.53M | 15.3M | 15.38M | 15.25M | 15.02M | 14.97M | 14.97M | 15.56M | 15.54M | 15.44M | 15.43M | 15.43M | 15.34M | 15.32M | 15.26M | 15.26M | 15.26M | 15.15M | 15.07M |
| Basic Shares Outstanding | 56.53M | 47.45M | 40.73M | 30.02M | 22.84M | 19.06M | 18M | 16.73M | 16.07M | 15.82M | 15.64M | 15.49M | 15.23M | 15.24M | 15.25M | 15.02M | 14.97M | 14.97M | 15.56M | 15.54M | 15.44M | 15.43M | 15.43M | 15.34M | 15.32M | 15.26M | 15.26M | 15.26M | 15.15M | 15.07M |
| Dividend Payout Ratio | 130.3% | 177.56% | 117.82% | 214.86% | 94.14% | 115.21% | - | 128.67% | 47.28% | 25.53% | - | 5.77% | 2.72% | 74.49% | 3.23% | 5.58% | - | - | - | - | - | - | - | - | 8.94% | - | - | - | 2.89% | 7.02% |
Portfolio credit quality concentration
According to recent quarterly filings, CSWC has demonstrated a consistent upward trajectory in top-line performance, with revenue reaching $54.0 million in 2026Q4, reflecting the firm's successful deployment of capital into its lower middle market investment mandate and the sustained benefit of elevated interest rate environments.
The revenue growth appears driven by both the expansion of the investment portfolio and the floating-rate nature of the underlying debt assets. Investors should monitor whether this growth remains sustainable as the firm approaches its historical leverage comfort zone, which may constrain future originations without additional equity capital.
As reported in financial statements, CSWC maintains a robust gross margin profile, peaking at 100% in 2026Q4, which highlights the structural advantage of its internal management model compared to the fee-heavy, externally managed structures prevalent among its broader BDC peer group competitors.
The absence of external management fees allows the firm to retain a larger portion of its investment income, effectively widening the spread between its portfolio yield and cost of capital. This structural efficiency appears to provide a buffer against potential volatility in interest income, though it remains sensitive to credit-related non-accruals.
Based on the provided income statement data, CSWC has successfully scaled its operating income alongside revenue growth, with operating margins reaching 82.7% in 2026Q4, suggesting that the firm's fixed cost base is well-aligned with its expanding investment portfolio and internal management structure.
The firm's ability to keep SG&A expenses relatively contained while revenue grows indicates significant operating leverage. This trend suggests that management is effectively managing its internal cost structure, though analysts should remain cautious regarding the potential for future compensation spikes if the firm continues to grow its headcount.
Analysis of recent SEC filings indicates that CSWC's net income quality has improved, particularly following the cessation of stock-based compensation expenses in late 2026, which previously created quarterly volatility and diluted the clarity of recurring earnings available for distribution to shareholders.
The elimination of stock-based compensation suggests a more transparent earnings profile, allowing investors to focus on core net investment income. However, the reliance on non-cash unrealized gains in the equity portfolio warrants continued scrutiny, as these items can mask underlying credit performance issues within the lower middle market.
Quick answers to the most common questions about buying CSWC stock.
Capital Southwest Corporation (CSWC) is profitable, generating $113.0M in net income for the fiscal year ending 2026 with a net profit margin of 45.9%.
Capital Southwest Corporation (CSWC) reported an operating income of $189.1M, resulting in an operating profit margin of 76.9%. This margin reflects the operational efficiency of the business before interest and taxes.
Capital Southwest Corporation (CSWC) generated $232.0M in gross profit for the year, representing a gross profit margin of 94.3%. This demonstrates the company's core pricing power and production efficiency.