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Apollo Global Management, Inc. (APO)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered record Fee Related Earnings ($627mm; $1.02/share) and strong Spread Related Earnings ($821mm; $1.33/share), driving Adjusted Net Income of $1.179bn ($1.92/share), a beat vs S&P Global EPS consensus of $1.84; FRE margin expanded ~200bps YoY to 57.3% . EPS estimates from S&P Global: $1.84 vs actual $1.92*.
  • Total firm AUM reached $840bn (+21% YoY) on $61bn gross inflows (record $49bn organic), $81bn record origination, and $90bn gross capital deployment; Fee-Generating AUM rose to $638bn (+22% YoY) .
  • Management reiterated confidence: tracking to the high end of the 15–20% FRE growth guide for 2025; SRE growth expected mid-single digits for 2025; Bridge acquisition expected to close early September with ~$100mm FRE contribution in 2026 .
  • Strategic momentum themes: investment-grade capital solutions (record $216mm fees), expanding bank partnerships, AI infrastructure financing opportunity, and broad European pipeline (e.g., £4.5bn EDF sterling financing; UK PIC via Athora) .
  • Catalysts near term: Bridge closing, continued ADS/AAA scaling, robust Q3 pipeline for Athene inflows and origination with spreads holding, and potential regulatory clarity enabling 401(k)/private markets access .

What Went Well and What Went Wrong

What Went Well

  • Record FRE ($627mm; 57.3% margin) on 21% YoY management fee growth, record $216mm capital solutions fees, and 21% YoY growth in fee-related performance fees; margin expansion ~200bps YoY reflects expense discipline .
  • Robust SRE ($821mm) on favorable alternative returns (10% alt return; only ~$36mm below long-term 11% expectation), and strong net organic growth with average net invested assets up 16.7% YoY to $268.7bn .
  • Clear strategic quotes: “The flywheel of what we do of originating, raising capital, deploying was really in full force for the quarter” and “we originated $81bn... with excess return per unit of risk,” underscoring origination-led edge .

What Went Wrong

  • Net spread slipped to 1.22% (down 2bps QoQ; down 11bps YTD vs prior year), reflecting tight market spreads, higher cost of funds on new business vs run-off, and lower floating-rate income; management expects stabilization as COVID-era vintages burn off through 2025 .
  • Principal Investing remains cyclically light (PII $47mm; comp ratio 72%), with monetizations prudently delayed amid uncertain exit environment despite some large PE realizations .
  • One-off impairment: Unrealized net gains/losses included a $257mm impairment in Q2 within asset management investment activities, weighing on GAAP line items .

Financial Results

Consolidated Results vs Prior Periods and Estimates

MetricQ4 2024Q1 2025Q2 2025Q2 2025 ConsensusNotes
GAAP Total Revenues ($USD mm)$5,283 $5,548 $6,814 $1,009.9*SPGI “Revenue” may differ in definition*
Adjusted Net Income ($USD mm)$1,360 $1,119 $1,179 —
ANI per share ($USD)$2.22 $1.82 $1.92 $1.843*Beat vs consensus*
Fee Related Earnings ($USD mm)$554 $559 $627 —Record
FRE Margin (%)58.0% 57.2% 57.3% —+~200bps YoY
Spread Related Earnings ($USD mm)$841 $804 $821 —
Net Spread (%)1.37% 1.26% 1.22% —Sequential decline

Estimates values marked with * are values retrieved from S&P Global.

YoY Comparison (Q2 2024 vs Q2 2025)

MetricQ2 2024Q2 2025
GAAP Total Revenues ($USD mm)$6,018 $6,814
Management Fees ($USD mm)$672 $816
Capital Solutions Fees ($USD mm)$208 $216
Fee-Related Performance Fees ($USD mm)$52 $63
FRE ($USD mm)$516 $627
SRE ($USD mm)$710 $821
Net Spread (%)1.24% 1.22%

Segment Breakdown – Asset Management

Metric ($USD mm unless noted)Q4 2024Q1 2025Q2 2025
Management Fees$742 $770 $816
Capital Solutions Fees & Other$160 $154 $216
Fee-Related Performance Fees$53 $54 $63
Fee-Related Compensation$(227) $(259) $(279)
Non-Compensation Expenses$(174) $(160) $(189)
Fee Related Earnings$554 $559 $627
FRE Margin (%)58.0% 57.2% 57.3%

Retirement Services – Key Metrics

MetricQ4 2024Q1 2025Q2 2025
Fixed income & other NII ($mm)$2,912 $2,914 $3,179
Alternative NII ($mm)$269 $315 $319
Cost of Funds ($mm)$(2,116) $(2,210) $(2,470)
Net Investment Spread ($mm)$1,094 $1,048 $1,060
Net Spread (%)1.37% 1.26% 1.22%
Avg Net Invested Assets ($mm)$244,796 $255,505 $268,703

KPIs

KPIQ4 2024Q1 2025Q2 2025
Total AUM ($bn)$751 $785 $840
Fee-Generating AUM ($bn)$569 $595 $638
Gross Inflows ($bn)$33 $43 $61
Origination ($bn)$61 $56 $81
Gross Capital Deployment ($bn)$63 $84 $90

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FRE growthFY 202515–20% (firm guide) Tracking to high end of range Raised bias
SRE growthFY 2025Mid-single digit (prior commentary) Confident in mid-single digit for 2025 Maintained
Bridge Investment Group FREFY 2026n/a~$100mm FRE in 2026; modest 2025 partial year New info
Dividend (Common)Q2 2025$0.4625 in Q4 2024 $0.51 declared, payable Aug 29, 2025 Increased vs 4Q24

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Origination scale and spreads$61bn origination in Q4; tight market spreads noted Record $81bn origination; excess spread vs IG/HY peers maintained Accelerating scale; spreads managed via origination edge
Capital Solutions fees$668mm record FY; strong Q4 quarter Record $216mm quarterly; ~100 transactions New quarterly high
AI infrastructure financingNot emphasized~$3tn need by decade-end; ~$800bn private credit ABF opportunity New growth vector
Global wealth (ADS/AAA)Record $12bn in 2024 ADS >$20bn AUM; AAA heading >$25bn by YE; institutional uptake (levered share class) Scaling; institutional adoption growing
Retirement Services net spreadNet spread 1.37% in Q4; pressure from cost of funds 1.22% in Q2; stabilization expected post COVID-era runoff Near-term compression, stabilization ahead
Europe/UK (PI(C) via Athora)Not highlightedPIC entry pending approvals; build GBP origination ecosystem Strategic expansion
Bank partnershipsNot highlighted12 partnerships; adding “handful” by YE 2025 (ABS, private credit, SRTs) Growing distribution
401(k)/DC access to private assetsNot highlightedExpect regulatory clarity; target-date/channel strategy Emerging access theme
Trading/tokenization/private marketsNot highlightedTransparency, liquidity, indexing could expand market size Early innings

Management Commentary

  • “The flywheel of what we do of originating, raising capital, deploying was really in full force for the quarter. The business was strong and the business is getting stronger” — Marc Rowan .
  • “We originated $81bn… generating excess spread… particularly impressive… when many areas within credit… have gravitated to… tight spreads” — Jim Zelter .
  • “For the balance of 2025… tracking to the higher end of our 15% to 20% FRE guide… we remain highly confident that we’ll achieve mid single digit [SRE] growth in 2025” — Martin Kelly .
  • “We will… create a massive pound-based origination ecosystem [with PIC]… momentum is building” — Marc Rowan .
  • “We believe we are on the cusp of serving the 401(k)… target date funds… private assets will be the perfect place for high quality private [assets]” — Marc Rowan .

Q&A Highlights

  • Credit spreads and insurance: Despite tight CLO/crossover spreads, Apollo pivoted origination to maintain ~130bps new business spreads; net spread declines expected to stabilize post COVID-era runoff through 2025 .
  • Athora PIC transaction: Management expects accretion to Athora valuation and FRE over time; strategic GBP origination build-out to serve UK market pending regulatory approvals .
  • ABC product scaling: First-mover advantage in asset-backed credit for wealth clients; strong platform approvals and origination via Atlas (300+ relationships) .
  • Platform throughput: Integrated “toolbox” across IG/non-IG, fund finance, securitization driving acceleration; 12 bank partnerships, expanding by year-end .
  • Stable value/401(k): Initial stable value issuances; broader goal of simple guaranteed lifetime income products and tech-enabled accessibility .

Estimates Context

  • EPS: Q2 2025 Adjusted EPS $1.92 vs S&P Global consensus $1.843 — beat*. Next quarter (Q3 2025) EPS consensus $1.90; Q4 2025 $2.08*.
  • Revenue: Q2 2025 actual GAAP revenue $6.814bn; SPGI “Revenue Consensus” was ~$1.00bn* — note methodology differences common for alt managers*.
  • Estimate counts: Q2 2025 EPS (16 estimates); Revenue (7 estimates)*.
    Values marked with * are values retrieved from S&P Global.

Key Takeaways for Investors

  • FRE momentum is strong and tracking to the high end of the 2025 guide; margin expansion demonstrates operating leverage — supports multiple expansion if sustained .
  • SRE trajectory remains intact despite near-term net spread compression; stabilization expected as high-profit COVID-era vintages roll off — watch Q3/Q4 net spread prints .
  • Origination-led excess spread and record Capital Solutions fees are durable advantages; pipeline breadth (AI infra, Europe/UK, ABS) underpins medium-term growth .
  • Wealth products (ADS/AAA) scaling, with increasing institutional adoption (levered share class) — positive for recurring fee mix and FGAUM sustainability .
  • Bridge (closing early Sept) adds ~$100mm FRE in 2026; near-term integration focus, modest 2025 contribution — potential upside from cross-platform synergies .
  • Regulatory shifts (401(k) access, securitization reform in Europe) could expand addressable market and fee pools; Apollo positioned as origination/solution partner .
  • Near-term trading: EPS beats, dividend increase vs 4Q24, and visible Q3 pipeline are supportive; watch macro spreads/cost of funds and realization cadence in PE as secondary catalysts .
## Appendices
### Dividend Declarations
- Common: $0.51 per share for Q2 2025, payable Aug 29, 2025 **[1858681_0001858681-25-000113_erex9912q2025.htm:0]** **[1858681_727d6e8fe0c74a8ebb0329bbba13ab8c_0]**.  
- Mandatory Convertible Preferred: $0.8438 per share payable Oct 31, 2025 **[1858681_0001858681-25-000113_erex9912q2025.htm:0]** **[1858681_727d6e8fe0c74a8ebb0329bbba13ab8c_0]**.

### Additional Data Points
- AUM roll-forward and FGAUM roll-forward detail provided (credit/equity flows, realizations, market activity) **[1858681_0001858681-25-000113_agmearningsrelease2q2025.htm:11]**.  
- Q2 notable items: none; Q1 included a 22mm notable item in SRE **[1858681_0001858681-25-000113_agmearningsrelease2q2025.htm:4]** **[1858681_0001858681-25-000045_agmearningsrelease1q2025.htm:4]**.  
- GAAP: Q2 “unrealized net (gains) losses” included a $257mm impairment **[1858681_0001858681-25-000113_agmearningsrelease2q2025.htm:17]**.