Executive Summary

Q3 results were solid: Total investment income rose to $782.0M, up 5% q/q and 1% y/y, Core EPS held at $0.50, and GAAP EPS increased to $0.57, driven by $247M gross realized gains and a record NAV per share of $20.01 .
Versus S&P Global consensus, ARCC was in line on Core EPS ($0.50 vs $0.503*) and beat on revenue ($782.0M vs $766.6M*), aided by higher “other income” and capital markets activity; management noted “other income” is largely non-recurring .
Credit stayed resilient: non‑accruals fell to 1.8% of amortized cost (1.0% FV) and yields remained high (10.6% at amortized cost), while gross originations accelerated to $3.9B and net deployment exceeded $1.3B .
Capital and liquidity strengthened: ~$1B of new debt raised, $650M 2031 notes issued (5.10%), leverage ~1.02x net, and Q4 dividend maintained at $0.48; management emphasized dividend sustainability supported by $1.26/share spillover income and multiple earnings levers .

Note: Values marked with * are from S&P Global consensus (GetEstimates). Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

Record NAV per share and healthy Core EPS coverage: “another record in our net asset value per share,” with Core EPS of $0.50 continuing to cover the $0.48 dividend .
Realized gain execution: $247M net realized gains (second highest quarter since inception), including ~$262M gain on Potomac Energy Center; underscores returns from restructured/equity positions .
Origination momentum and pricing: $3.9B gross commitments (+50% q/q) with first‑lien spreads about 20 bps higher than the prior 12‑month average; spread per unit of leverage highest in 12+ months .

What Went Wrong

Core earnings flat and below y/y: Core EPS of $0.50 was flat q/q and down from $0.58 y/y; dividend income softened sequentially due to exits of preferred/equity positions and fewer non‑recurring dividends .
Yield compression vs 2024: Weighted average yields on accruing assets declined to 10.6% (amortized cost) vs 11.7% a year ago, reflecting rate backdrop mix effects .
Unrealized marks: Net unrealized losses of $(96)M in Q3, partially offsetting realized gains; management also cautioned “other income” upside is largely one‑time .

Financial Results

Income statement snapshot (older → newer)

Metric	Q3 2024	Q2 2025	Q3 2025
Total Investment Income (“Revenue”) ($M)	$775	$745	$782
Net Investment Income ($M)	$361	$342	$338
Net Investment Income per Share	$0.57	$0.49	$0.48
GAAP Net Income ($M)	$394	$361	$404
GAAP EPS	$0.62	$0.52	$0.57
Core EPS (non‑GAAP)	$0.58	$0.50	$0.50
Net Realized Gains (Losses) ($M)	$(24)	$34	$162
Net Unrealized Gains (Losses) ($M)	$57	$(15)	$(96)
NAV per Share (period‑end)	$19.77	$19.90	$20.01

Q3 2025 vs S&P Global consensus

Metric	Actual	Consensus
Core EPS	$0.50	$0.503*
Revenue (Total Investment Income)	$782.0M	$766.6M*

Note: S&P Global consensus via GetEstimates. Values retrieved from S&P Global.

Profitability (derived)

Metric	Q3 2024	Q2 2025	Q3 2025
Net Income Margin = GAAP NI / Revenue	50.8% (=$394/$775)	48.5% (=$361/$745)	51.7% (=$404/$782)

Segment/Portfolio Mix (fair value)

Asset Class	Dec 31, 2024	Sep 30, 2025
First Lien Senior Secured Loans	57%	61%
Second Lien Senior Secured Loans	7%	6%
SDLP (subordinated certificates)	5%	4%
Senior Subordinated Loans	5%	5%
Preferred Equity	10%	9%
Ivy Hill Asset Management (IHAM)	7%	7%
Other Equity	9%	8%

Key Portfolio/Balance Sheet KPIs

KPI	Q2 2025	Q3 2025
Portfolio FV ($B)	$27.886	$28.693
# of Portfolio Companies	566	587
% Floating Rate (FV)	69%	71%
Weighted Avg Yield (accruing, amortized cost)	10.9%	10.6%
Weighted Avg Yield (total investments, amortized cost)	9.8%	9.6%
Non‑accruals (cost / FV)	2.0% / 1.2%	1.8% / 1.0%
Debt/Equity	1.01x	1.09x
Debt/Equity (net of cash)	0.98x	1.02x
Net Commitments (Gross – Exits) ($B)	$0.610 (=$2.573–$1.963)	$1.299 (=$3.924–$2.625)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Regular Dividend per Share	Q4 2025	$0.48 (Q3 2025)	$0.48	Maintained

Management provided no specific quantitative guidance for revenue/EPS/OpEx/tax; commentary emphasized dividend sustainability supported by spillover income and balance sheet flexibility .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Dividend sustainability & spillover	Q2: “Core earnings... in excess of our current dividend... taxable income spillover provides long term stability; est. $878M/$1.29 per share” .	$1.26/share spillover; multiple levers (leverage headroom, non‑qualifying assets, fees) to offset lower rates; dividend maintained .	Stable/Supportive
AI/software exposure	—	Detailed case that AI is more opportunity than risk for ARCC’s B2B, infrastructure‑like software borrowers (36% LTV, none on non‑accrual) .	Constructive
Tariffs/macro	Q1: Monitoring tariff exposure; portfolio skew to domestic services; low LTV; strong credit .	Healthy M&A pipeline; activity normalized as tariff/rate clarity improves .	Improving activity
Competition & spreads	—	Spreads stable overall; ARCC achieved ~20 bps wider vs 12‑mo avg; best spread per unit of leverage in 12+ months .	Slightly favorable
Receivables/off‑balance sheet risk	—	Diligence and tight baskets mitigate receivables financing risk; no exposure to high‑profile names cited .	Risk managed
Regulatory (AFFE)	—	Little new progress; momentum inconsistent over time .	Unchanged

Management Commentary

Strategy and quarter framing: “stable core earnings of $0.50 per share, exceeding our regular quarterly dividend... GAAP earnings at $0.57... robust net realized gains... another quarter of NAV growth” .
Realized gain capability: Potomac Energy Center exit produced ~$262M realized gain and ~15% IRR; equity co‑investment exits >30% gross IRR on average .
Earnings durability: “Multiple levers to expand earnings or offset headwinds… leverage around 1x (below 1.25x target), growth potential in 30% basket (IHAM/SDLP), increased velocity/fees, and $1.26/share spillover” .
Funding strength: Issued $650M notes due 2031 at 5.10% and swapped to floating; liquidity ~$6.2B, highest‑rated BDC across agencies .

Notable quotes

“We reported strong third quarter Core EPS and another record in our net asset value per share” — CEO Kort Schnabel .
“We generated $247 million of net realized gains... second highest... since inception” — CFO Scott Lem .
“Spreads... consistent with the prior quarter and actually 20 basis points higher than the prior 12‑month average” — President Jim Miller .

Q&A Highlights

Dividend support and spillover usage: Management reiterated confidence in covering the dividend across scenarios; spillover offers a “cushion,” without specifying thresholds for use .
Competitive landscape: No meaningful impact from recent headlines; private credit benefits when BSL markets wobble; ARCC’s docs/selection seen as differentiated .
Exits and fee income: Exit pace generally tracks overall transaction volume; “other income” largely transaction/amendment fees and not recurring .
ATM moderation and leverage: Reduced ATM issuance ($400–500M to ~$200M recent) given desire to move leverage modestly higher within 0.9x–1.25x range .
Receivables financing risk controls: Exhaustive diligence and tight baskets; no exposure to cited problem credits .

Estimates Context

Core EPS matched consensus: $0.50 vs $0.503*, implying in‑line delivery amid stable yields .
Revenue beat: $782.0M vs $766.6M*, helped by higher capital structuring/other income and elevated origination activity .
Street likely to nudge revenue estimates up on improved activity/backlog; EPS trajectory remains tied to rates, fees, realized gains, and modest leverage deployment .