Alaris Equity Partners Income Trust (AD-UN) Q3 2025 earnings summary

Executive summary

• Achieved a record quarter in Q3 2025, with strong fair value gains, recurring partner distributions, and expanded long-term revenue base through new capital deployment.

• Net book value per unit rose 6% sequentially to CAD 2,510 ($25.10), up 10% year-over-year, driven by record earnings and comprehensive income per unit.

• Portfolio is larger, more diversified, and performing at its best in 21 years, with 19 of 21 partners meeting or exceeding expectations.

• Total revenue and operating income rose 8% year-over-year, with a 45% increase in unrealized gains on investments.

• Active capital deployment with $73.8 million invested since Q2, totaling $228 million year-to-date across new and existing Partners.

Financial highlights

• Total revenue and operating income increased 7.8% year-over-year, supported by a CAD 47.9 million net unrealized fair value gain across nine investments.

• Partner revenue exceeded guidance at CAD 58.1 million, though total Partner revenue declined 12.3% year-over-year due to lower common distributions.

• Net distributable cash flow per unit decreased 26% in Q3 and 14% year-to-date, mainly due to variability in common distributions, tax timing, and higher transaction costs.

• Free cash flow after distributions was CAD 21.9 million in Q3 and CAD 38.9 million year-to-date, prior to NCIB repurchases.

• Cash from operations before working capital changes increased 55.8% in Q3.

Outlook and guidance

• Q4 partner revenue expected at approximately CAD 43.5 million, with ongoing evaluation of the impact from the U.S. government shutdown.

• Run Rate Revenue for the next twelve months estimated at $184 million, including $13.5 million in common distributions.

• Run Rate Payout Ratio projected between 65% and 70%, balancing distributions and reinvestment.

• Deployment outlook remains strong, with expectations to surpass previous records and a robust pipeline for new and follow-on investments.

• Some planned exits are scheduled to begin in 2026, expected to further grow book value and fund new deployments.