DRI Healthcare Reports Fourth Quarter and Annual 2025 Results

Executive Summary

• DRI Healthcare Trust reported record full‑year 2025 financial performance: Total income $198.6 M, Adjusted EBITDA $165.0 M (91% margin) and a comprehensive earnings gain of $9.1 M.
• The company completed internalization of its investment‑management function and returned over $36 M to unitholders while deploying $87 M of capital in Q4 2025.
• Announced pricing of $250 M aggregate principal amount of senior secured notes (two tranches: $106 M @ 5.35% due 2031; $144 M @ 5.65% due 2033) and conversion of C$108.7 M preferred securities into convertible debentures, strengthening the balance sheet.

Key Details

• Quarterly Highlights (Q4 2025)
• Total income: $61.7 M
• Adjusted EBITDA: $46.2 M (91% margin)
• Comprehensive earnings: $9.1 M
• Impairment on Omidria royalty asset: $9.7 M
• Unit repurchase: 97,352 Units at an average price of $10.66 (~$1.0 M)

• Quarterly cash distribution paid: $0.10 per Unit (Jan 20 2026)

• Full‑Year 2025 Highlights

• Total income: $198.6 M; Total Cash Receipts: $196.4 M
• Adjusted EBITDA: $165.0 M (84% margin)
• Comprehensive loss: $(51.1 M) offset by earnings gain of $9.1 M after impairments.
• Impairments on royalty assets: $23.4 M (Vonjo II & Omidria).
• Capital deployed: $87.0 M; additional contingent commitments: $115 M (Viridian deal).
• Unit repurchase: 1,449,249 Units at an average price of $9.82 (~$14.2 M).

• Total cash distributions to unitholders: $22.2 M.

• Strategic Updates

• Completed internalization of investment‑management function; projected $200 M synergies over ten years.

• KalVista’s FDA approval for Ekterly – first pre‑approval royalty acquisition; second pre‑approval royalty acquired with Viridian.

• Financing Activities (Post‑Quarter)

• Senior Secured Notes priced: $250 M aggregate principal, two‑tranche private placement.
  • Tranche 1: $106 M @ 5.35% due 2031
  • Tranche 2: $144 M @ 5.65% due 2033
• Use of proceeds: repay acquisition credit facility draws and general corporate purposes to support 2026 growth strategy.

• Conversion of 7.50% Series C preferred securities into C$108.7 M convertible unsecured subordinated debentures; closing expected Mar 19 2026 (subject to TSX approval).

• Liquidity & Capital Structure

• Cash & cash equivalents (Dec 31 2025): $42.4 M
• Outstanding credit facility balance: $381.0 M

• Preferred securities outstanding principal: $108.9 M

• Distributions

• Quarterly distribution increased to $0.11 per Unit for Q1 2026 (payable Apr 20 2026).

• Guidance & Multi‑Year Aspirations

• 2026 Adjusted EBITDA guidance: $157–$162 M (run‑rate baseline $149.2 M after non‑recurring adjustment).
• Capital deployment target (2026‑2030): $800–$1,000 M.

• Expected low‑teens CAGR in Adjusted EBITDA from 2026 to 2030.

• Conference Call

• Management call scheduled for Mar 4 2026 at 8:00 a.m. ET; webcast available via provided link.

Notable Quotes

“2025 marked a clear inflection point for DRI Healthcare… We successfully completed the internalization of our investment management function while delivering record operating results for the full year.” – Ali Hedayat, CEO

“The refinancing of the preferred securities and pricing of $250 M senior secured notes will strengthen our capital structure and provide flexibility to execute our growth agenda in 2026 and beyond.” – Ali Hedayat, CEO