GOLUB CAPITAL BDC, Inc.

Golub Capital BDC, Inc. (the "Company") operates as an externally managed, closed-end, non-diversified management investment company, regulated as a business development company (BDC) under the 1940 Act, and has elected to be treated as a regulated investment company (RIC) for U.S. federal income tax purposes ¹. The Company's primary business involves making investments, predominantly in one stop loans and other senior secured loans, to U.S. middle-market companies. These middle-market companies are generally defined as having earnings before interest, taxes, depreciation, and amortization (EBITDA) of less than $100.0 million annually ². The Company aims to generate current income and capital appreciation through these investments, often partnering with private equity firms.

The Company's core business model revolves around providing debt capital to U.S. middle-market companies, with a focus on senior secured and one stop loans. Revenue is primarily generated from interest income, dividend income, and other fees such as commitment, origination, structuring, diligence, and consulting fees from portfolio companies ³. The Company also selectively invests in second lien and subordinated loans, as well as warrants and minority equity securities. The investment strategy emphasizes a disciplined underwriting process and regimented credit monitoring, aiming to minimize credit losses and identify problems early.

The Company's investment portfolio is primarily composed of senior secured loans and one stop loans, typically ranging from $10.0 million to $85.0 million per investment, though larger investments are made selectively ⁴. These loans generally have maturities of three to seven years. One stop loans blend characteristics of traditional senior and junior debt, often providing stronger lender protections and superior economics. A notable sub-category within one stop loans is recurring revenue loans, extended to technology companies exhibiting strong growth, high customer retention, and diversified customer bases. The Company also makes second lien and subordinated loans, which carry higher risk and often include payment-in-kind (PIK) features, increasing credit risk exposure. Equity investments are typically direct or indirect minority co-investments, usually alongside private equity sponsors, offering additional return potential from portfolio company appreciation.

As of September 30, 2025, the Company's total investments at fair value were $8,769,389 thousand ⁵. The largest industry concentration was in Software, accounting for 27.2% of total investments at fair value, or $2,387,723 thousand ⁶. Healthcare Providers & Services represented 7.4% ($645,551 thousand) ⁷, Diversified Consumer Services 5.3% ($462,485 thousand) ⁸, Specialty Retail 5.0% ($436,744 thousand) ⁹, and Insurance 4.9% ($426,028 thousand) ¹⁰. Automobiles constituted 4.8% ($417,389 thousand) ¹¹, Healthcare Technology 4.6% ($406,376 thousand) ¹², Healthcare Equipment & Supplies 3.8% ($332,338 thousand) ¹³, Pharmaceuticals 3.7% ($322,002 thousand) ¹⁴, and IT Services 3.3% ($292,679 thousand) ¹⁵. The top ten industries collectively comprised 70.0% of total investments at fair value ¹⁶.

The Company's financial performance for the year ended September 30, 2025, included total gross investment income of $1,059,832 thousand ¹⁷. Net increase in net assets resulting from operations was $517,500 thousand ¹⁸. Diluted earnings per share for the year ended September 30, 2025, was $1.96 ¹⁹. As of September 30, 2025, cash and cash equivalents totaled $157,871 thousand ²⁰. Total debt outstanding was $6,129,315 thousand ²¹.

Comparing the fiscal year ended September 30, 2025, to September 30, 2024, total investments at fair value increased from $8,235,411 thousand ²² to $8,769,389 thousand ²³, representing a growth of $533,978 thousand. The percentage of total investments at fair value rated 4 (acceptable risk, performing as expected) increased from 85.2% ²⁴ to 87.6% ²⁵, while investments rated 3 (performing below expectations, increased risk) decreased from 11.6% ²⁶ to 9.6% ²⁷. Investments rated 2 (performing materially below expectations, materially increased risk) decreased from 1.3% ²⁸ to 1.0% ²⁹.

During the reported period, the Company completed the acquisition of Golub Capital BDC 3 (GBDC 3) on June 3, 2024, issuing an aggregate of 92,115,308 shares of its common stock to former GBDC 3 stockholders ³⁰. The Company also completed a $2,200.5 million term debt securitization on November 18, 2024, through the 2024 Issuer, which included the issuance of various classes of notes ³¹. Concurrently, the Company redeemed the $602.4 million 2018 Debt Securitization and the $908.2 million GCIC 2018 Debt Securitization on November 18, 2024 ³². The GBDC 3 2021 Debt Securitization was also redeemed on November 18, 2024 ³³. The GBDC 3 DB Credit Facility, which allowed for borrowing up to $625.0 million, was terminated on November 19, 2024 ³⁴. The GBDC 3 2022 Debt Securitization was redeemed on August 1, 2025 ³⁵, and the GBDC 3 2022-2 Debt Securitization was redeemed on December 16, 2024 ³⁶.

The Company has not provided specific revenue, margin, or EPS guidance for the upcoming period in the filing.

The Company anticipates continued growth in its target market of small and middle-market companies in the United States, with annual revenues between $10 million and $2.5 billion, which it identifies as a significant growth segment requiring substantial capital investments ³⁷. The Company expects this market segment to continue producing significant investment opportunities. A strategic focus remains on borrowers in recession-resistant industries, such as software and technology, business, financial, and healthcare services, which are believed to be insulated from economic disruptions ³⁸. The Company also expects private equity firms to continue leveraging their investments with senior secured loans and subordinated debt from sources like the Company, indicating sustained demand for debt capital ³⁹.

Operationally, the Company's investment adviser, GC Advisors, has reduced its incentive fee rates from 20.0% to 15.0% and the incentive fee cap from 20.0% to 15.0% under the Investment Advisory Agreement, effective June 3, 2024 ⁴⁰. Additionally, the base management fee rate was reduced from 1.375% to 1.0% effective July 1, 2024 ⁴¹. GC Advisors is also voluntarily excluding assets funded with secured borrowing proceeds from the management fee calculation ⁴². These changes are designed to impact the cost structure and potentially enhance investor returns.

The Company plans to continue its capital allocation strategy by primarily investing in senior secured and one stop loans, with individual investments typically ranging from $10.0 million to $85.0 million ⁴³. The JPM Credit Facility, which permits borrowings of up to $1,998 million in U.S. dollars and certain foreign currencies, remains a key financing source, with an interest rate ranging from the applicable benchmark plus 1.525% to 1.775% through its maturity date of April 4, 2030 ⁴⁴. The Company also has an Adviser Revolver line of credit with GC Advisors, allowing borrowing up to $300.0 million at the mid-term applicable federal rate ⁴⁵.

Management explicitly flagged that increased competition for direct lending to middle-market businesses could lead to less favorable pricing terms for potential investments, potentially resulting in decreased net interest income, lower yields, and increased risk of credit loss ⁴⁶. However, management believes that Golub Capital's scale, product suite, entrenched relationships, and strong market position will enable it to continue finding attractive investment opportunities ⁴⁷.

The Company faces several material risks, including those related to interest rate fluctuations, as changes in interest rates directly impact its cost of capital and net investment income, especially given its reliance on debt financing for investments ⁴⁸. The market for investment opportunities is highly competitive, which could lead to reduced returns and potential losses ⁴⁹. The Company's success is heavily dependent on GC Advisors and its access to Golub Capital's investment professionals and referral relationships with private equity sponsors; any disruption to these could adversely affect the business ⁵⁰. Potential conflicts of interest exist due to arrangements with GC Advisors and its affiliates, including the possibility of GC Advisors prioritizing transaction fees or its relationships over the Company's best interests ⁵¹. Reductions, waivers, or absorptions of fees and costs, while temporarily beneficial to investors, can mask the true cost structure ⁵². The Company is also subject to risks associated with its ability to qualify as a RIC and comply with BDC regulations, as well as risks related to its Unsecured Notes, Debt Securitizations, and Revolving Credit Facilities ⁵³. Economic recessions or downturns could impair portfolio companies, leading to defaults and harming operating results, while inflation could adversely affect portfolio companies' financial condition ⁵⁴. Investments in debt, leveraged portfolio companies, and private middle-market companies are inherently risky, carrying the potential for partial or total loss due to illiquidity, price declines, and default risk ⁵⁵. The portfolio's concentration in a limited number of companies and industries further exposes the Company to significant losses if any of these entities default or if there is an industry downturn ⁵⁶.

Management's message to shareholders conveys a focus on disciplined investment and strategic growth, particularly within the U.S. middle-market. They emphasize the importance of accessing Golub Capital's established loan origination channels, selecting investments within their core middle-market focus, partnering with experienced private equity firms, and implementing disciplined underwriting standards ⁵⁷. A key strategic priority is maintaining a portfolio primarily composed of senior secured and one stop loans, with an average investment size of $10.0 million to $85.0 million ⁵⁸. Management also highlighted the recent reduction in incentive fee rates from 20.0% to 15.0% and the incentive fee cap from 20.0% to 15.0% under the Investment Advisory Agreement, effective June 3, 2024, along with a base management fee rate reduction from 1.375% to 1.0% effective July 1, 2024 ⁵⁹. They also noted the voluntary exclusion of assets funded with secured borrowing proceeds from the management fee calculation ⁶⁰. Management acknowledges increased competition in direct lending but believes Golub Capital's scale, product suite, relationships, and market position will enable it to continue finding attractive investment opportunities ⁶¹.