Executive Summary

Q3 2025 delivered double‑digit growth and broad-based strength: revenue rose 14% year over year to $437.6M, adjusted EBITDA increased 16% to $110.8M, and adjusted diluted EPS reached $0.28; GAAP diluted EPS was $0.19 .
Results beat S&P Global consensus on revenue and EPS: revenue of $437.6M vs. $423.5M*, adjusted EPS $0.28 vs. $0.225*; adjusted EBITDA was near consensus at $110.8M vs. $107.0M* (beats in bold below). Values retrieved from S&P Global*.
Management expects Q4 revenue growth to moderate to mid-single digits year over year and flagged a one-time ~$16M non‑cash stock comp charge in Q4 tied to IPO vesting; annual guidance will begin with Q4 reporting for 2026 .
Catalysts: deleveraging post‑IPO ($525M paydown; IPO‑adjusted net leverage ~3.1x) and term loan repricing (SOFR+225), implying ~$46M annualized interest savings; product/digital launches (55‑lb stack tumbler, Scan‑Pay‑Wash) underpin volume and mix support .

What Went Well and What Went Wrong

What Went Well

Strong consolidated growth and margin expansion: revenue +14% YoY to $437.6M; adjusted EBITDA +16% to $110.8M; adjusted EBITDA margin expanded 40 bps to 25.3% .
Robust segment performance: North America revenue +14% to $330.7M and segment adj. EBITDA +13% to $95.4M; International revenue +12% to $106.9M and segment adj. EBITDA +9% to $25.7M .
Balance sheet reinforcement and cost of capital improvement: $525M post‑IPO debt repayment driving ~3.1x IPO‑adjusted net leverage and ~$46M annualized interest savings; term loan repriced to SOFR+225; credit outlooks upgraded (S&P to B+, Moody’s to positive) .
Management quote (strategy and industry resilience): “Commercial laundry is an incredible, vibrant, and growing industry… We have long demonstrated an ability to deliver a best‑in‑class financial profile, strong margins, and solid growth” .

What Went Wrong

International margin mixed: Q3 International segment adj. EBITDA margin declined modestly year over year (24.0% vs. 24.7%) due to product/customer mix and early Stax‑X launch dynamics .
Tariffs were a headwind: ~$3.5M tariff impact in North America (mostly offset by pricing), indicating ongoing cost pressure despite mitigation .
Q4 growth decel: management guided mid‑single‑digit YoY revenue growth in Q4, normalizing after two years of low double‑digit growth, and flagged a ~$16M non‑cash stock comp charge, which will affect GAAP optics (added back in adjusted metrics) .

Financial Results

Consolidated Performance vs. Prior Periods and Estimates

Metric	Q3 2024 (YoY base)	Q1 2025	Q2 2025	Q3 2025	Consensus (Q3 2025)
Revenue ($USD Millions)	$384.3	$406.2*	$406.2*	$437.6	$423.5*
GAAP Diluted EPS ($)	$(0.04)	$0.138*	$0.138*	$0.19	N/A
Adjusted Diluted EPS ($)	$0.19	N/A	N/A	$0.28	$0.225*
Operating Income ($USD Millions)	N/A	$84.17*	$84.17*	$85.49	N/A
Adjusted EBITDA ($USD Millions)	$95.9	$107.1*	$107.1*	$110.8	$107.0*
Net Income ($USD Millions)	$(6.3)	$24.13*	$24.13*	$32.9	N/A
Adjusted EBITDA Margin (%)	24.9%	25.61%*	25.61%*	25.3%	N/A
Net Income Margin (%)	(1.6)%	5.77%*	5.77%*	7.5%	N/A

Values retrieved from S&P Global*.

Highlights vs. estimates:

Revenue: $437.6M vs. $423.5M* — beat.
Adjusted EPS: $0.28 vs. $0.225* — beat.
Adjusted EBITDA: $110.8M vs. $107.0M* — modest beat.

Segment Breakdown (Q3 2025 vs. Q3 2024)

Segment	Q3 2024 Revenue ($M)	Q3 2025 Revenue ($M)	YoY %	Q3 2024 Segment Adj. EBITDA ($M)	Q3 2025 Segment Adj. EBITDA ($M)	Margin Q3 2024	Margin Q3 2025
North America	$289.2	$330.7	+14%	$84.2	$95.4	29.1%	28.9%
International	$95.1	$106.9	+12%	$23.4	$25.7	24.7%	24.0%

KPIs and Balance Sheet

KPI	Q3 2025	Prior/Reference
IPO‑adjusted net leverage (Net Debt / Adj. EBITDA)	~3.1x	4.3x at 9/30 (pre‑IPO adjustment)
Term loan spread	SOFR + 225 bps	Potential further 25 bps tightening
Annualized interest savings	~$46.0M	N/A
Tariff impact (Q3 NA)	~$3.5M (mostly offset by pricing)	N/A
Scan‑Pay‑Wash transactions	>90,000 in ~90 days	Launch in Q3

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue Growth YoY	Q4 2025	N/A	Mid‑single‑digit growth	New directional commentary
One‑time Non‑cash Stock Comp	Q4 2025	N/A	~$16M; added back to adjusted metrics	New disclosure
Annual Guidance Policy	FY 2026	N/A	To be provided with Q4 results	New disclosure
CapEx as % of Net Revenue	Ongoing	~3% target reiterated	~3% target maintained	Maintained
Deleveraging cadence	Ongoing	0.5–1.0x per year organically	Reaffirmed	Maintained
Capital returns	Medium/Long term	Potential buybacks/dividends	Near‑term buybacks possible; dividend considered longer term	Clarified
Term loan rate	Ongoing	Repriced	SOFR+225, potential further 25 bps tightening	Improved cost of debt

Earnings Call Themes & Trends

Topic	Previous Mentions (Q‑2 and Q‑1)	Current Period (Q3 2025)	Trend
Digital/IoT initiatives	No public Q1/Q2 transcripts; company was private	Scan‑Pay‑Wash launched; >90k transactions; focus on data/analytics over near‑term SaaS dollars	Building momentum
Supply chain	Not publicly disclosed	No meaningful issues; adequate inventory and alternate sourcing; steady readiness	Stable
Tariffs/macro	Not publicly disclosed	~$3.5M tariff impact in NA; competitor pricing responses limited to date; pricing actions offset costs	Manageable via pricing
Product performance	Not publicly disclosed	55‑lb stack tumbler; Stax‑X regional launch (Thailand); strong CIH demand with long lead times	Positive mix tailwinds
Regional trends	Not publicly disclosed	Double‑digit growth in Europe/APAC; LATAM vended strength; MEA timing variability (Saudi)	Broad‑based strength with pockets of lumpiness
Balance sheet/ratings	Not publicly disclosed	IPO; $525M paydown; leverage ~3.1x; S&P upgrade to B+ positive; Moody’s positive outlook	Strengthening
Capital allocation	Not publicly disclosed	Focus on deleveraging; selective tuck‑ins; potential buybacks, dividend later	Disciplined, shareholder‑friendly

Management Commentary

CEO perspective on industry resilience: “Commercial laundry is an incredible, vibrant, and growing industry… We have long demonstrated an ability to deliver a best‑in‑class financial profile, strong margins, and solid growth” .
On pricing and tariffs: “We did announce price increases in Q3, and there are some smaller ones that take place in Q4… meant to offset our cost increases, primarily related to tariffs” .
On digital focus: “We’re more focused on the analytics… several hundred thousand [connected machines] out there… ScanPayWash… over 90,000 transactions [in ~90 days]… early days” .
On Q4 normalization: “This is two years of consecutive double‑digit growth… it is really just reverting to a more normalized growth rate… strongest quarter comp” .
On CIH demand: “Demand is extraordinary… if you wanted to order a product today, you would be waiting” .

Q&A Highlights

Tariffs and competitive dynamics: Limited observed competitor pricing changes; ALH implemented price increases to offset Section 232 tariff impacts; management does not anticipate price givebacks even if tariffs ease .
International margins: Temporary dilution from customer/product mix and early product launch; long‑term parity with NA maintained; year‑to‑date international margin improved >100 bps .
Capital allocation and deleveraging: Target organic deleveraging of 0.5–1.0x per year; flexibility for buybacks near term and potential dividends longer term .
Digital/data strategy: Emphasis on connected fleet data/analytics; Scan‑Pay‑Wash traction; insights platform supports multi‑site operators’ revenue optimization .
Q4 outlook: Mid‑single‑digit YoY revenue growth; one‑time ~$16M non‑cash charge; visibility into demand steady, culture of conservatism in setting expectations .

Estimates Context

Metric (Q3 2025)	Actual	Consensus	Surprise
Revenue ($USD Millions)	$437.6	$423.5*	+$14.1M (beat)
Adjusted EBITDA ($USD Millions)	$110.8	$107.0*	+$3.8M (beat)
Adjusted Diluted EPS ($)	$0.28	$0.225*	+$0.055 (beat)

Values retrieved from S&P Global*. Note: GAAP diluted EPS was $0.19 ; S&P “Primary EPS” tracks normalized/adjusted EPS for estimate comparisons.

Where estimates may adjust:

Upward revisions to FY 2025 adjusted EPS/EBITDA given Q3 beats and lower interest run‑rate (~$46M annualized savings), partly offset by Q4 normalization and ~$16M non‑cash IPO charge added back in adjusted metrics .

Key Takeaways for Investors

Broad‑based demand across Vended, OPL, and CIH, plus pricing actions, drove robust growth and margin expansion; tariff headwinds are being actively offset .
Balance sheet materially strengthened post‑IPO; deleveraging and repriced term loan lower interest burden, enhancing equity value capture .
Product innovation and digital initiatives (Scan‑Pay‑Wash; largest stack tumbler; Stax‑X) support mix, replacement cycles, and recurring revenue opportunities, particularly for multi‑site operators .
Near‑term setup: Expect Q4 revenue growth to normalize to mid‑single digits with a one‑time ~$16M non‑cash charge (excluded from adjusted metrics); watch for initial 2026 guidance with Q4 .
Trading lens: The combination of beats versus consensus*, deleveraging, and interest savings are positive catalysts; monitor International margin trajectory and tariff developments; pricing actions should sustain profitability .
Medium‑term thesis: Durable end‑market fundamentals, scale advantages, local‑for‑local manufacturing insulating tariffs, and disciplined capital allocation (tuck‑ins, potential buybacks/dividends) underpin sustained high‑20s EBITDA margins and cash generation .

Values retrieved from S&P Global* where indicated.

Alliance Laundry Holdings Inc. (ALH)·Q3 2025 Earnings Summary