Detailed financial statements for Ares Capital Corporation (ARCC): income statement, balance sheet and cash-flow summary. Track margins, debt, liquidity and profitability trends year over year with up to 20 years of history.
Ares Capital Corporation (ARCC) operates as a Business Development Company (BDC), delivering diverse financing solutions predominantly to middle-market enterprises. The firm's expertise lies in facilitating various corporate actions, including funding acquisitions, recapitalizations, and leveraged buyouts.
Analysis Summary
Ares Capital Corporation reported revenue of $2.24B in the most recent fiscal year, growing at a 5-year CAGR of 21.2%. Net income reached $1.30B, with a 21.8% 5-year CAGR.
Trailing-twelve-month margins: gross margin 67.0%, operating margin 62.9%, net margin 41.5%. Free cash flow grew at 9.2% CAGR over 5 years.
At the current price of $19.37, ARCC trades at a P/E of 14.39 and an ROE of 6.78%. Market capitalisation stands at $13.9B, placing it among large-cap names.
Balance sheet quality for ARCC: current ratio of 1.7, net debt of $15.07B. A debt-to-equity below 1.0 typically signals conservative capital structure, while a current ratio above 1.5 indicates comfortable short-term liquidity.
Cash flow quality is decent: free cash flow of $1.14B represents 88% conversion of reported net income. High conversion (above 90%) suggests earnings translate cleanly into cash; lower conversion may indicate working capital tightness or accounting timing differences.
Income Statement (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $737.0M | $974.0M | $1.12B | $1.11B | $858.0M | $2.05B | $1.20B | $2.17B | $2.37B | $2.24B |
| Cost of Revenue | $167.0M | $225.0M | $240.0M | $291.0M | $317.0M | $372.0M | $455.0M | $530.0M | $659.0M | $736.0M |
| Gross Profit | $570.0M | $749.0M | $879.0M | $824.0M | $541.0M | $1.68B | $741.0M | $1.64B | $1.71B | $1.51B |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Selling, General & Admin | $56.0M | $89.0M | $42.0M | $45.0M | $38.0M | $39.0M | $38.0M | $42.0M | $43.0M | $51.0M |
| Operating Expenses | $75.0M | $63.0M | $2.0M | $15.0M | $38.0M | $82.0M | $86.0M | $94.0M | $113.0M | $108.0M |
| Operating Income | $495.0M | $686.0M | $877.0M | $809.0M | $503.0M | $1.60B | $655.0M | $1.54B | $1.59B | $1.40B |
| EBITDA | $496.0M | $687.0M | $877.0M | $809.0M | $503.0M | $1.60B | $655.0M | $1.54B | $1.59B | $1.40B |
| Interest Expense | $167.0M | $225.0M | $240.0M | $291.0M | $317.0M | $372.0M | $455.0M | $530.0M | $659.0M | $736.0M |
| Pre-tax Income | $495.0M | $686.0M | $877.0M | $809.0M | $503.0M | $1.60B | $655.0M | $1.54B | $1.59B | $1.40B |
| Income Tax | $21.0M | $19.0M | $19.0M | $16.0M | $19.0M | $29.0M | $55.0M | $20.0M | $73.0M | $99.0M |
| Net Income | $474.0M | $667.0M | $858.0M | $793.0M | $484.0M | $1.57B | $600.0M | $1.52B | $1.52B | $1.30B |
| EPS | $1.51 | $1.57 | $2.01 | $1.86 | $1.14 | $3.51 | $1.21 | $2.75 | $2.44 | $1.86 |
| EPS (Diluted) | $1.51 | $1.57 | $2.01 | $1.86 | $1.14 | $3.51 | $1.19 | $2.68 | $2.44 | $1.86 |
| Shares Outstanding (Diluted) | $314.0M | $425.0M | $426.0M | $427.0M | $424.0M | $446.0M | $518.0M | $575.0M | $624.0M | $699.0M |
Income Statement (Quarterly)
| Year | 2025-Q3 | 2025-Q4 | 2026-Q1 | 2026-Q2 |
|---|---|---|---|---|
| Revenue | $655.0M | $540.0M | $349.0M | $768.0M |
| Gross Profit | $460.0M | $344.0M | $151.0M | $595.0M |
| Operating Income | $431.0M | $319.0M | $124.0M | $581.0M |
| EBITDA | $431.0M | $319.0M | $124.0M | $758.0M |
| Net Income | $404.0M | $293.0M | $92.0M | $171.0M |
| EPS | $0.57 | $0.41 | $0.13 | $0.24 |
| EPS (Diluted) | $0.57 | $0.41 | $0.13 | $0.24 |
Balance Sheet (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Cash & Equivalents | $223.0M | $316.0M | $296.0M | $176.0M | $254.0M | $372.0M | $303.0M | $535.0M | $635.0M | $924.0M |
| Short-term Investments | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Receivables | $141.0M | $94.0M | $103.0M | $131.0M | $223.0M | $222.0M | $180.0M | $261.0M | $516.0M | $605.0M |
| Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total Current Assets | $335.0M | $409.0M | $399.0M | $307.0M | $549.0M | $708.0M | $517.0M | $825.0M | $1.15B | $1.53B |
| Property, Plant & Equipment | 0 | 0 | 0 | $94.0M | $38.0M | $27.0M | $20.0M | 0 | 0 | 0 |
| Goodwill | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Intangible Assets | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total Assets | $9.24B | $12.35B | $12.89B | $14.90B | $16.20B | $20.84B | $22.40B | $23.80B | $28.25B | $31.23B |
| Accounts Payable | $102.0M | $245.0M | $155.0M | $177.0M | $66.0M | $307.0M | $87.0M | $115.0M | $406.0M | $86.0M |
| Short-term Debt | 0 | 0 | 0 | 0 | $27.0M | $20.0M | $807.0M | $1.33B | 0 | 0 |
| Total Current Liabilities | $206.0M | $395.0M | $348.0M | $121.0M | $375.0M | $724.0M | $1.22B | $1.87B | $406.0M | $894.0M |
| Long-term Debt | 0 | 0 | 0 | $7.00B | $8.51B | $11.09B | $11.54B | $10.62B | $13.76B | $15.99B |
| Total Liabilities | $4.08B | $5.25B | $5.59B | $7.44B | $9.02B | $11.97B | $12.84B | $12.60B | $14.90B | $16.92B |
| Retained Earnings | $37.0M | -$94.0M | $127.0M | -$293.0M | -$480.0M | $315.0M | -$2.0M | $462.0M | $852.0M | $958.0M |
| Total Equity | $5.17B | $7.10B | $7.30B | $7.47B | $7.18B | $8.87B | $9.55B | $11.20B | $13.36B | $14.32B |
| Total Debt | $3.87B | $4.85B | $5.21B | $7.09B | $8.60B | $11.16B | $12.38B | $11.95B | $13.76B | $15.99B |
| Net Debt | $3.65B | $4.54B | $4.92B | $6.92B | $8.35B | $10.79B | $12.07B | $11.41B | $13.12B | $15.07B |
| Working Capital | $129.0M | $14.0M | $51.0M | $186.0M | $174.0M | -$16.0M | -$700.0M | -$1.04B | $745.0M | $635.0M |
Balance Sheet (Quarterly)
| Year | 2025-Q3 | 2025-Q4 | 2026-Q1 | 2026-Q2 |
|---|---|---|---|---|
| Cash & Equivalents | $1.04B | $924.0M | $505.0M | $383.0M |
| Total Assets | $30.81B | $31.23B | $30.68B | $30.50B |
| Total Liabilities | $16.48B | $16.92B | $16.61B | $16.61B |
| Total Equity | $14.32B | $14.32B | $14.06B | $13.89B |
| Total Debt | $15.61B | $15.99B | $15.85B | $15.77B |
Cash Flow (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net Income | $474.0M | $667.0M | $858.0M | $793.0M | $484.0M | $1.57B | $600.0M | $1.52B | $1.52B | $1.30B |
| Depreciation & Amortization | $1.0M | $1.0M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Stock-based Compensation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Working Capital | -$2.0M | $3.0M | $16.0M | -$39.0M | $78.0M | $208.0M | -$147.0M | $31.0M | $190.0M | -$82.0M |
| Operating Cash Flow | $707.0M | -$1.87B | $666.0M | $681.0M | $734.0M | $935.0M | $746.0M | $1.00B | $1.28B | $1.14B |
| Capital Expenditure | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Stock Repurchased | -$5.0M | 0 | 0 | 0 | -$100.0M | 0 | 0 | 0 | 0 | 0 |
| Dividends Paid | -$477.0M | -$642.0M | -$656.0M | -$694.0M | -$679.0M | -$694.0M | -$912.0M | -$1.03B | -$1.14B | -$1.26B |
| Free Cash Flow | 0 | -$1.87B | $666.0M | $681.0M | $734.0M | $935.0M | $746.0M | $1.00B | $1.28B | $1.14B |
Cash Flow (Quarterly)
| Year | 2025-Q3 | 2025-Q4 | 2026-Q1 | 2026-Q2 |
|---|---|---|---|---|
| Operating Cash Flow | $365.0M | $248.0M | $114.0M | $336.0M |
| Capital Expenditure | 0 | 0 | 0 | 0 |
| Free Cash Flow | $365.0M | $248.0M | $114.0M | $336.0M |
| Dividends Paid | -$320.0M | -$319.0M | -$345.0M | -$345.0M |
| Stock-based Compensation | 0 | 0 | 0 | 0 |
Growth & Margins (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue Growth (YoY) | +32.2% | +14.9% | -0.4% | -23.0% | +138.9% | -41.7% | +81.1% | +9.3% | -5.3% | |
| Net Income Growth (YoY) | +40.7% | +28.6% | -7.6% | -39.0% | +223.8% | -61.7% | +153.7% | +0.0% | -14.7% | |
| EPS Growth (YoY) | +4.0% | +28.0% | -7.5% | -38.7% | +207.9% | -65.5% | +127.3% | -11.3% | -23.8% | |
| Shares Change (YoY) | +35.4% | +0.2% | +0.2% | -0.7% | +5.2% | +16.1% | +11.0% | +8.5% | +12.0% | |
| FCF Growth (YoY) | +135.7% | +2.3% | +7.8% | +27.4% | -20.2% | +34.0% | +28.2% | -10.9% | ||
| Gross Margin | 77.3% | 76.9% | 78.6% | 73.9% | 63.1% | 81.9% | 62.0% | 75.5% | 72.2% | 67.2% |
| Operating Margin | 67.2% | 70.4% | 78.4% | 72.6% | 58.6% | 77.9% | 54.8% | 71.2% | 67.4% | 62.4% |
| EBITDA Margin | 67.3% | 70.5% | 78.4% | 72.6% | 58.6% | 77.9% | 54.8% | 71.2% | 67.4% | 62.4% |
| Net Margin | 64.3% | 68.5% | 76.7% | 71.1% | 56.4% | 76.4% | 50.2% | 70.3% | 64.3% | 57.9% |
| FCF Margin | 0.0% | -191.6% | 59.5% | 61.1% | 85.5% | 45.6% | 62.4% | 46.2% | 54.2% | 50.9% |
| Effective Tax Rate | 4.2% | 2.8% | 2.2% | 2.0% | 3.8% | 1.8% | 8.4% | 1.3% | 4.6% | 7.1% |
Per-Share Data (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| FCF Per Share | $0.00 | $-4.39 | $1.56 | $1.59 | $1.73 | $2.10 | $1.44 | $1.74 | $2.05 | $1.63 |
| Dividends Per Share | $1.52 | $1.51 | $1.54 | $1.63 | $1.60 | $1.56 | $1.76 | $1.79 | $1.83 | $1.81 |
| Shares Outstanding (Basic) | $314.0M | $425.0M | $426.0M | $427.0M | $424.0M | $446.0M | $498.0M | $554.0M | $624.0M | $699.0M |
What to look at in Financial Services
Asset managers, brokers, fintech, exchanges. They are not banks — look at AUM, fees and FCF quality.
- 5y revenue growth — Without growth, there is no long-term value creation
- Operating margin — Good asset managers have >30% margins thanks to scalability
- ROE — Quality financial services have a consistent ROE >15%
- FCF / Net Income — Earnings quality — >90% expected in capital-light businesses
- Debt / Equity — Fintech and brokers with high D/E are time bombs in crises
- P/E vs own 5y — Asset managers have stable multiples in well-known ranges
- Dividend yield + buybacks — These businesses return a lot of capital — look at total yield (div + buybacks)
Profitability
| Return on Equity | 6.78% |
| Return on Invested Capital | 1526.49% |
| Return on Assets | 3.15% |
| Gross Margin | 67.04% |
| Operating Margin | 62.93% |
| Net Margin | 41.52% |
Financial Health
| Debt / Equity | 1.14 |
| Current Ratio | 1.14 |
| Piotroski F-Score | 2 |
| Altman Z-Score | 0.79 |
Key Ratios (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| P/E | 10.92 | 10.01 | 7.75 | 10.03 | 14.82 | 6.04 | 15.26 | 7.28 | 8.97 | 10.88 |
| P/B | 1.00 | 0.94 | 0.91 | 1.07 | 1.00 | 1.07 | 0.96 | 0.99 | 1.02 | 0.99 |
| P/S | 7.03 | 6.86 | 5.93 | 7.14 | 8.35 | 4.61 | 7.69 | 5.12 | 5.77 | 6.31 |
| Gross Margin | 77.3% | 76.9% | 78.6% | 73.9% | 63.1% | 81.9% | 62.0% | 75.5% | 72.2% | 67.2% |
| Operating Margin | 67.2% | 70.4% | 78.4% | 72.6% | 58.6% | 77.9% | 54.8% | 71.2% | 67.4% | 62.4% |
| Net Margin | 64.3% | 68.5% | 76.7% | 71.1% | 56.4% | 76.4% | 50.2% | 70.3% | 64.3% | 57.9% |
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Explore sector: Financial Services · Asset Management
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