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

Executive summary

• Achieved a record quarter in Q3 2025, with net book value per unit rising 6% sequentially to CAD 2,510 (or $25.10), up 10% year-over-year, driven by strong earnings, fair value gains, and comprehensive income per unit.

• Total revenue and operating income increased 7.8% to 8% year-over-year, supported by a 45% increase in unrealized gains and strong partner performance.

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

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

• Active capital deployment with CAD 32.2 million (or $73.8 million) invested since Q2, totaling approximately CAD 228 million year-to-date across new and existing partners.

Financial highlights

• Net book value per unit increased by $1.53 in Q3 to $25.10, reflecting $1.90 per unit in earnings, offset by $0.34 per unit in distributions.

• Total revenue and operating income up 7.8% and 13.6% year-over-year, respectively, driven by strong partner performance and unrealized gains.

• Partner revenue exceeded guidance at CAD 58.1 million, including CAD 57.4 million in distributions, though total partner revenue declined 12.3% year-over-year due to lower common distributions.

• Preferred distributions rose 7.3% in Q3 and 6% year-to-date, totaling CAD 40.7 million and CAD 120.8 million, respectively.

• 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 (or $43.5 million), with ongoing evaluation of the U.S. government shutdown's impact.

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

• Deployment outlook remains vibrant, with record capital deployment anticipated for the year and strong prospects into 2026.

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

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