FS KKR Capital Corp (FSK) experienced a sharp reversal to net losses in fiscal year 2025, driven by capital market volatility impacting its debt and equity portfolio valuations. The firm’s focus remains on senior secured loans to middle-market U.S. companies, but macroeconomic challenges and tighter credit conditions have strained results. Despite strong operating cash flow, dividend distributions exceeded net income generating a negative return on equity. Going forward, liquidity management and portfolio credit quality will be critical amid uncertain capital markets.