Ares Capital Corp (NASDAQ:ARCC) Reports Q3 2025 Earnings, Misses EPS Estimates

Ares Capital Corporation (NASDAQ:ARCC) has released its financial results for the third quarter ended September 30, 2025, presenting a mixed performance against analyst expectations alongside a reaffirmed commitment to its shareholder dividend.

Earnings and Revenue Performance

The company's core earnings per share, a non-GAAP metric it emphasizes, came in at $0.50 for the quarter. This figure fell short of the analyst consensus estimate of $0.5124. On the revenue front, Ares Capital reported total investment income of $782 million, which was slightly below the estimated $783.97 million.

The key financial results compared to estimates are as follows:

• Core EPS: Reported $0.50 vs. Estimated $0.5124
• Total Investment Income: Reported $782M vs. Estimated $783.97M

This slight miss on both key metrics provides a primary lens through which to view the market's initial reaction.

Market Reaction and Price Action

The market's response to the earnings release has been cautiously positive in early trading. The stock is showing a modest pre-market gain of approximately 0.15%. This upward tick suggests that investors may be looking beyond the narrow earnings miss and focusing on other positive aspects of the report, such as the stable dividend and portfolio growth. The stock's performance over recent weeks has been positive, with gains of around 4.3% over the last two weeks, indicating a generally favorable sentiment leading up to the earnings announcement.

Quarterly Financial and Operational Highlights

The earnings release detailed several areas of strength for the business development company. Ares Capital declared a fourth-quarter dividend of $0.48 per share, maintaining its consistent payout. On a GAAP basis, net income was $404 million, or $0.57 per share, an increase from $394 million, or $0.62 per share, in the prior year period. The company highlighted a record net asset value per share of $20.01, up from $19.89 at the end of 2024.

Portfolio activity remained robust during the quarter. Ares Capital made new investment commitments of $3.9 billion and exited $2.6 billion of commitments. The total portfolio at fair value grew to $28.7 billion, spread across 587 portfolio companies. The company also strengthened its balance sheet, raising over $1 billion in new debt capital and ending the quarter with $1 billion in cash and approximately $5.2 billion in available borrowing capacity.

Looking Ahead

While the press release did not provide specific quantitative financial guidance for the coming quarters, management expressed a positive outlook. Chief Executive Officer Kort Schnabel stated that the company's "origination strength and rigorous credit standards position us to benefit from an improving market environment." For formal forward-looking metrics, analysts have provided estimates for the upcoming quarter and full year, which investors can use as a benchmark for future performance.

The company's recent activity, spanning from October 1 to October 23, shows continued investment momentum with new commitments of $735 million and an investment backlog of approximately $3.0 billion, suggesting a healthy pipeline for future earnings.

For a detailed breakdown of historical earnings and future analyst estimates, you can review the data available on the ARCC earnings and estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend buying or selling any security. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.