Executive Summary

Ares delivered a clean top-line and EPS beat: Q1 revenue was $1.09B vs $0.86B consensus and Primary EPS (after-tax realized income per Class A share) was $1.09 vs $0.94 consensus, aided by record management fees, higher fee-related performance revenues (FRPR), and a lower realized tax rate; GAAP EPS rounded to $0.00 due to preferred dividends and share count but is not the investor focus . Consensus from S&P Global marked with asterisks; see tables.
AUM surpassed the half-trillion milestone to $545.9B (+27% y/y) and FPAUM to $335.1B; dry powder remained substantial with $142.0B available capital and $99.2B of AUM not yet paying fees (including $81.5B deployable), positioning Ares for continued fee growth through deployment .
Integration of GCP International progressed well, lifting Real Assets scale and “other fees”; FRE margin held at 41.5% despite a modest GCP drag, with management reiterating 0–150 bps of potential margin expansion this year as synergies build and data center vehicles launch .
Management reaffirmed 2025 European-style net realized performance income (NRPI) of $225–$275M and guided a lower realized tax rate range of 8–12% for 2025; both support cash earnings durability and dividend coverage at the newly set $1.12 quarterly dividend .
Stock drivers: visible multi-year fee growth (record “shadow AUM”), strong wealth inflows resilience in April, and expanding Real Assets/data center opportunity from the GCP deal should underpin estimate revisions; watch macro/tariff volatility and tempo of capital deployment vs. M&A pipeline normalization .

What Went Well and What Went Wrong

What Went Well

Management fee and FRE momentum: management fees hit a record $818M (+18% y/y), FRE rose 22% y/y to $367M; FRPR improved to $28M (vs $4M in Q1’24) as APMF and a European direct lending SMA contributed .
Scale and fundraising breadth: AUM reached $545.9B; Ares raised $20.2B in Q1 with $31.4B deployed, and crossed $0.5T AUM; management highlighted record first-quarter fundraising and broad contributions beyond Credit .
GCP integration and Real Assets expansion: closed March 1; bolsters logistics, digital infrastructure, and Japan presence; “other fees” nearly doubled y/y due to GCP development/leasing/property management fees, supporting diversified revenue streams .

Selected quotes:

“We reported strong first quarter results…assets under management…surpassed a half a trillion dollars.” – CEO Michael Arougheti .
“Other fees nearly doubled year-over-year as development fees from several GCP funds were additive in the quarter.” – CFO Jarrod Phillips .
“We have a record amount of dry powder…well positioned to make attractive investments in a volatile market environment.” – CFO Jarrod Phillips .

What Went Wrong

Sequential revenue and FRE softness vs. Q4 seasonality: Q1 revenue of $1.09B declined from Q4’s $1.26B; FRE decreased from $396M in Q4 to $367M in Q1 as seasonality and integration costs weighed .
FRE margin slightly below prior-year level: 41.5% in Q1’25 vs 42.1% in Q1’24, with GCP temporarily dilutive; management expects synergies and fund launches to offset over 12–24 months .
GAAP EPS optics: GAAP net income attributable to Ares was $47.2M and GAAP EPS rounded to $0.00 due to share count/preferred dividends, though this is less relevant vs. Ares’ primary cash earnings metric (after-tax realized income per Class A share) .

Financial Results

Headline P&L and EPS vs. Estimates, Prior Quarter, Prior Year

Metric	Q1 2024	Q4 2024	Q1 2025 Actual	Q1 2025 Consensus*	Result
Total Revenues ($B)	$0.707	$1.259	$1.089	$0.860*	Beat
Primary EPS (After-tax RI per Class A share) ($)	$0.80	$1.23	$1.09	$0.94*	Beat
GAAP Net Income Attrib. to Ares ($M)	$73.0	$177.3	$47.2	n/a	—
GAAP EPS (Basic/Diluted) ($)	$0.33	$0.72	$0.00	n/a	—
FRE ($M)	$301.7	$396.2	$367.3	n/a	—
FRE Margin (%)	42.1%	40.9%	41.5%	n/a	—

Note: Consensus values (*) retrieved from S&P Global (see Estimates Context).

Observations:

Revenue up sharply y/y ($1.089B vs $0.707B) on higher management fees and carried interest/incentive fees; sequentially lower vs Q4 seasonality .
Primary EPS beat (actual $1.09 vs $0.94*) benefited from revenue mix, FRPR, and an 8.1% realized tax rate (with 8–12% guide for the year) .

Segment and Platform KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
AUM ($B)	$463.8	$484.4	$545.9
FPAUM ($B)	$286.8	$292.6	$335.1
Available Capital ($B)	$125.3	$133.1	$142.0
AUM Not Yet Paying Fees ($B)	$85.2	$95.0	$99.2
AUM NYPF Available for Future Deployment ($B)	n/a	$81.0	$81.5
Gross New Capital Raised ($B)	n/a	$28.3	$20.2
Net Inflows ($B)	n/a	$26.9	$19.6
Gross Deployment ($B)	n/a	$32.1	$31.4

AUM and FPAUM by Segment (Q1 2025)

Segment	AUM ($B)	FPAUM ($B)
Credit	$359.1	$218.2
Real Assets	$124.2	$76.4
Private Equity	$24.7	$11.4
Secondaries	$31.3	$23.5
Other Businesses (Insurance/Other)	$6.6	$5.6
Total	$545.9	$335.1

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
European-style Net Realized Performance Income (NRPI)	FY 2025	$225–$275M (Q4’24 call)	Reaffirmed $225–$275M	Maintained
European-style NRPI	FY 2026	“Considerably grow vs 2025” (Q4’24 call)	“Materially higher…in 2026”	Maintained/Positive bias
Realized Tax Rate	FY 2025	11%–15% (Q4’24 call)	8%–12% (lowered)	Lowered
FRE Margin Expansion	FY 2025	0–150 bps potential (Investor Day/Q4)	Reaffirmed 0–150 bps	Maintained
Quarterly Dividend	2025	$1.12 (set in Q4)	Declared $1.12 for Q1 (paid 6/30/25)	Maintained

Earnings Call Themes & Trends

Topic	Q3 2024 (Prev-2)	Q4 2024 (Prev-1)	Q1 2025 (Current)	Trend
Fundraising breadth	“Record YTD; expecting record year”	$28.3B in Q4; $92.7B in FY’24; raising floor via wealth/SMAs/insurance	$20.2B in Q1; record first-quarter fundraising, >45% outside Credit	Broadening and resilient
Deployment/M&A	Improving tone; near-record Q3 deployment	$32.1B in Q4; up 60% y/y in 2024 despite soft M&A	$31.4B in Q1; pipelines steady; opportunistic credit/secondaries to benefit if M&A subdued	Robust, opportunistic tilt
Wealth channel	Building momentum	$3.1B Q4 equity; $10B+ FY equity; Jan >$1B	Record $3.7B Q1 equity; April equity $1.2B; redemptions stable	Strong and resilient
Tariffs/macro	—	Optimism into 2025	Volatility post-April 2 tariffs; private markets gaining share; modest direct exposure	Macro swing but well-positioned
GCP/data centers	Announced; pre-close	Expect close Q1; ~$4B data center fund raises in 1H’25	Closed Mar 1; “other fees” up; data center pipeline intact	Strategic positive
Credit quality	—	Low nonaccruals at ARCC; strong coverage	U.S. LTV ~42%, Europe ~48%; ARCC nonaccruals 1.5%; coverage ~2x	Stable/defensive
Spreads/pricing	—	—	Early April widening ~50–75 bps normalized somewhat; fee+spread widened during price discovery	Slightly wider spreads

Management Commentary

Strategy and resilience: “We operate a management fee-centric…asset-light business model…Our fund structures are designed so that we are not a forced seller of assets.” – CEO Michael Arougheti .
Growth vectors: “We surpassed $0.5 trillion in AUM…build our future management fee and performance fee potential.” – CFO Jarrod Phillips .
GCP integration: “Other fees nearly doubled…GCP enhances our vertically integrated capabilities in real estate.” – CFO Jarrod Phillips .
Tax and cash earnings: “Effective tax rate on realized income was 8.1%…expect 8%–12% for the remainder of the year.” – CFO Jarrod Phillips .

Q&A Highlights

Private credit health: Portfolio LTVs ~42% (U.S.) and ~48% (Europe) with ARCC nonaccruals at 1.5%; management sees no spike in defaults, citing deep equity subordination and sponsor support .
Wealth channel durability: April equity inflows ~$1.2B with no uptick in redemptions at CADC; distribution footprint broadening across regions/products .
FRE margin outlook: Despite near-term GCP drag, 0–150 bps expansion still expected in 2025; core G&A flat to down excluding acquisitions .
Deployment/spreads: In early April, fees and spreads widened ~100 bps band during discovery; settling at ~50–75 bps wider vs pre-April, supportive for returns .
European opportunity: Strengthening LP demand and Ares’ share gains in a fragmented market; European direct lending deployment trending higher .

Estimates Context

S&P Global consensus vs. actuals:
- Q1 2025 Primary EPS: $1.09 vs $0.94* → Beat .
- Q1 2025 Revenue: $1.089B vs $0.860B* → Beat .
Forward estimates: Q2 2025 consensus Revenue ~$0.971B*; Primary EPS ~$1.09* (actuals posted alongside) — trajectory implies potential upward revisions given Q1 outperformance and reiterated NRPI outlook [GetEstimates: Q2 2025, Q3 2025 data].

Values with asterisks (*) are retrieved from S&P Global.

Key Takeaways for Investors

High-visibility fee growth: $99.2B of AUM not yet paying fees, including $81.5B readily deployable, provides embedded base fee growth as capital is put to work .
Durable cash earnings: Reaffirmed European-style NRPI for 2025 ($225–$275M) and a lower 8–12% realized tax rate support cash earnings and dividend capacity at $1.12/share quarterly .
GCP accelerant: GCP integration adds fee streams (development/leasing/property management) and expands Real Assets and data center pipeline; expect margin drag to fade with synergies and fund launches .
Wealth engine resilience: Record Q1 wealth equity commitments and stable April flows underscore channel durability even amid volatility .
Macro positioning: Private credit’s share gains in risk-off liquid markets and slightly wider spreads support return outlook; watch tariff/macro volatility .
Near-term watch items: Pace of deployment vs. net (gross-to-net) improvement, FRPR seasonality (Q4 weighted), and progress on data center and logistics fundraising post-GCP .

Appendix: Additional Detail

Drivers of the Beat (Why)

Revenue/Primary EPS beat driven by: record management fees (+18% y/y), higher FRPR ($28M vs $4M), “other fees” uplift from GCP integration, and an 8.1% realized tax rate vs typical mid-teens; management sees FRPR skew to Q4 seasonally and reiterated NRPI range despite potential payment timing shifts .
AUM/FPAUM expansion supports forward estimates via deployment ramp across direct lending, secondaries, and Real Assets, with GCP enhancing sector breadth (logistics, data centers) .

Select KPI and Segment Data (Q1 2025)

Credit: FRE $408.6M; realized income $431.9M; gross deployment $24.6B (U.S. direct lending $13.8B; alternative credit $4.2B; Europe direct lending $2.4B) .
Real Assets: FRE $74.3M; realized income $87.6M; gross deployment $5.2B; management/other fees +54% y/y largely from GCP .
Secondaries: FRE $40.6M; realized income $39.7M; gross deployment $1.6B; APMF momentum sustained .

All citations:

Q1 2025 press release and 8-K/presentation: .
Q1 2025 earnings call transcript: .
Prior quarters (trend): Q4 2024 PR/8-K/call: . Q3 2024 PR: .
Related Q1 2025 press releases: GCP close (Mar 1) ; ACE VI €17.1B close ; Aspida $2.3B equity raise .

Estimates note: Values with asterisks (*) are retrieved from S&P Global.

Ares Management Corp (ARES)·Q1 2025 Earnings Summary