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AG

Apollo Global Management, Inc. (APO)·Q3 2025 Earnings Summary

Executive Summary

  • Record combined fee and spread earnings drove Adjusted Net Income of $1.357B ($2.17 per share), up versus Q2 and prior year; FRE reached a record $652M and SRE was near-record at $871M .
  • EPS beat consensus: Primary EPS came in at $2.17 vs S&P Global consensus of ~$1.90, while reported revenue far exceeded S&P’s “Revenue Consensus Mean” series; management emphasized robust origination ($75B) and strong inflows ($82B) powering the beat .
  • Guidance raised/clarified: FY25 SRE growth now ~8% vs mid-single-digit target; Q4’25 SRE ex-notables guided to ~$880M with net spread ~125 bps; 2026 outlook reiterated at 20%+ FRE growth and ~10% SRE growth; FRE=SRE mix crossover pulled forward to 2028 from 2029 .
  • Strategic catalysts: announced $6.5B Hornsea 3 JV with Ørsted, launched Apollo Sports Capital, and continued wealth expansion; capital return remained active with a $0.51 dividend and $356M buybacks in Q3 .

What Went Well and What Went Wrong

What Went Well

  • Record FRE ($652M) on 22% YoY management fee growth, strong capital solutions fees ($212M), and higher fee-related performance fees; “the growth flywheel is spinning,” with AUM at $908B (+24% YoY) and inflows of $82B .
  • Retirement Services momentum: $23B organic inflows, net invested assets up 18% YoY to $286B; CFO guided Q4 SRE ex-notables ~$880M and net spread ~125 bps, with headwinds dissipating in 2026 .
  • Strategic wins: $6.5B commitment to co-own Ørsted’s Hornsea 3 (3GW) and launch of Apollo Sports Capital to scale credit/hybrid solutions in sports/live events .

Management quotes:

  • “Results in the third quarter were exceptionally strong…origination for this quarter was very strong, $75B…Record AUM $908B up 24% year over year” — Marc Rowan .
  • “We generated $75B [origination] in the quarter…bringing origination volume to over $270B for the last twelve months” — Jim Zelter .
  • “We anticipate SRE ex-noteables to be approximately…$880M…with an equivalent SRE spread of 125 bps” — Martin Kelly .

What Went Wrong

  • Net spread remained compressed: Q3 net spread 1.24% (ex-notables 1.21%), down vs prior year; management cited tight market spreads and higher cost of funds offset by origination and call income .
  • Performance fee monetizations cyclically light: Realized performance fees fell to $201M in Q3 (down 39% YoY), with monetizations prudently delayed amid an uncertain exit environment .
  • Revenue volatility: GAAP revenues rose sharply ($9.823B) versus Q2 ($6.814B), driven by investment-related gains and variable insurance items that can swing quarter-to-quarter .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Total Revenues ($USD Millions)$7,773 $6,814 $9,823
GAAP Diluted EPS ($)$1.29 $0.99 $2.78
Adjusted Net Income per share ($)$1.85 $1.92 $2.17
Fee Related Earnings (FRE) ($USD Millions)$531 $627 $652
Spread Related Earnings (SRE) ($USD Millions)$856 $821 $871
Principal Investing Income (PII) ($USD Millions)$78 $47 $50
Total AUM ($USD Billions)$733 $840 $908

Consensus vs Actual (S&P Global):

  • Primary EPS Consensus Mean (Q3 2025): ~$1.90 estimate; $2.17 actual*
  • Revenue Consensus Mean (Q3 2025): ~$1,099.7M estimate; $9,759.0M actual*
  • Primary EPS Consensus Mean (Q4 2025): ~$2.08 estimate*
  • Target Price Consensus Mean: ~$158.51*
    Values retrieved from S&P Global.

Segment breakdown

Asset Management (AM) ($USD Millions)Q3 2024Q2 2025Q3 2025
Management fees$710 $816 $863
Capital solutions fees & other, net$159 $216 $212
Fee-related performance fees$57 $63 $73
Fee-related compensation$(238) $(279) $(304)
Non-compensation expenses$(157) $(189) $(192)
Fee Related Earnings (FRE)$531 $627 $652
Retirement Services (RS) ($USD Millions)Q3 2024Q2 2025Q3 2025
Fixed income & other NII$2,806 $3,179 $3,423
Alternative NII$236 $319 $321
Strategic capital mgmt fees$27 $32 $35
Cost of funds$(1,983) $(2,470) $(2,661)
Net Investment Spread$1,086 $1,060 $1,118
SRE$856 $821 $871
Net Spread (%)1.44% 1.22% 1.24%
Net Spread ex-notables (%)1.40% 1.22% 1.21%
Principal Investing (PI) ($USD Millions)Q3 2024Q2 2025Q3 2025
Realized performance fees$331 $219 $201
Realized investment income$17 $13 $18
Principal investing compensation$(253) $(168) $(155)
Other operating expenses$(17) $(17) $(14)
PII$78 $47 $50

KPIs

KPIQ3 2024Q2 2025Q3 2025
Fee-Generating AUM ($USD Billions)$598 $638 $685
Perpetual Capital AUM ($USD Billions)$430 —$520
Inflows ($USD Billions)—$61 $82
Gross Capital Deployment ($USD Billions)—$90 $99
Origination ($USD Billions)—$81 $75
Dry Powder ($USD Billions)——$75
Net Accrued Performance Fee Receivable ($USD Millions)—$1,572 $1,805
FRE Margin (%)57.4% 57.3% 56.8%
Dividend per Common Share ($)—$0.51 $0.51
Share Repurchases ($USD Millions)$475.2 $15.7 $356.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
SRE growth (y/y)FY 2025Mid-single-digit target ~8% y/y Raised
SRE ex-notables ($)Q4 2025N/A~$880M; Net spread ~125 bps New
FRE growth (y/y)FY 202620% long-term target 20%+ for 2026 Raised/clarified
SRE growth (y/y)FY 2026~10% long-term plan ~10% for 2026 Maintained
FRE=SRE crossoverMix timing2029 plan 2028 (pulled forward) Pulled forward
Common dividendQ3 2025$0.51 $0.51 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Origination engine scaleQ1: $56B origination; record organic inflows; conservative deployment . Q2: $81B origination; record organic inflows .$75B origination; LTM >$270B; platforms driving growth .Sustained high volume, ahead of plan.
Global Wealth channelQ1: record organic inflows . Q2: strong wealth flows .$5B raised; expanding LTIFs; daily NAV initiative for partnerships .Accelerating distribution and product innovation.
Retirement Services/AtheneQ1: accelerated new business growth . Q2: SRE +16% YoY; alt return 10% .$23B organic inflows; hedging reduced float sensitivity; Q4 SRE ex-notables ~$880M .Strong volumes; headwinds easing into 2026.
European energy infrastructureN/A$6.5B JV stake in Ørsted’s Hornsea 3; prior EDF/BP/RWE deals .Scaling IG capital solutions in EU infrastructure.
Regulatory/risk discourseN/AAddressed “private letter ratings” systemic risk concerns; detailed Athene ratings profile .Active engagement; emphasis on underwriting discipline.
Technology/market-making/tokenizationN/APursuing daily NAV, transparency, market-making, tokenization to integrate privates with traditional AM .Building infrastructure for public-private convergence.

Management Commentary

  • “The growth flywheel is spinning…Robust inflows of $82B for the quarter…Record AUM $908B up 24% year over year.” — Marc Rowan .
  • “We generated $75B in the quarter…origination volume to over $270B for the last twelve months…capacity we have to scale.” — Jim Zelter .
  • “We anticipate SRE ex-noteables…approximately $880M…with an equivalent SRE spread of 125 bps.” — Martin Kelly .
  • “We expect FRE growth of 20% plus in 2026…For SRE, we anticipate 10% growth in 2026…FRE equaling SRE sometime in 2028.” — Management .

Q&A Highlights

  • Origination targets: Management is ahead of plan but will not reset five-year targets yet; momentum is durable across existing vehicles and strategies .
  • Wealth partnerships: Expect “billions at a time” via partnerships with traditional asset managers; daily NAV and transparency seen as table stakes for integration .
  • Ratings/systemic risk: Addressed concerns on private letter ratings; emphasized Athene’s multi-agency ratings and high IG asset profile, cautioning focus on underwriting quality .
  • 2026 SRE drivers: Headwinds (prepayments, COVID-era roll-off) expected to peak by 2026; SRE trajectory supported by origination and discipline .
  • 401(k) and decumulation: Pursuing guaranteed lifetime income solutions; early traction in managed accounts with more progress dependent on guidance/rulings .

Estimates Context

  • Q3 2025 Primary EPS: Actual $2.17 vs consensus ~$1.90 — beat; supported by record FRE and strong SRE with 10% alternatives returns .
  • Q3 2025 Revenue: S&P’s revenue series estimated ~$1.10B vs reported GAAP revenue $9.82B; management emphasizes non-GAAP ANI and segment earnings as primary metrics for investors .
  • Q4 2025 Primary EPS Consensus: ~$2.08; management guided Q4 SRE ex-notables ~$880M and net spread ~125 bps, implying continued earnings strength .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Earnings quality: Strong beat on Primary EPS with balanced contributions from FRE and SRE; ANI per share rose sequentially and YoY, supported by origination and inflows .
  • Asset management scaling: FRE at a record level; Bridge acquisition adds ~$300M annual fee revenues and ~$100M pre-tax FRE, enhancing synergy with Athene .
  • Retirement Services resilience: Net spread stabilizing; hedging reduced floating-rate sensitivity to ~$10–$15M per 25 bps; Q4 SRE ex-notables guided ~flat-to-up vs Q3 .
  • Capital solutions pipeline: Large IG transactions (Hornsea 3) position Apollo for secular energy/infrastructure demand; expect continued EU momentum .
  • Wealth and public-private convergence: Daily NAV and transparency initiatives aim to unlock traditional AM channels; potential step-change in distribution .
  • Capital return: $356M buybacks in Q3 and $0.51 dividend maintained; share count reflects Bridge-related issuance and repurchases .
  • 2026 setup: FRE growth 20%+, SRE ~10%; headwinds abate and mix shifts towards more durable fee earnings, with FRE=SRE expected in 2028 (pulled forward) .