KKR & Co. Inc. (KKR) Q2 2025 Earnings Summary

Executive Summary

Strong quarter on recurring metrics: Fee Related Earnings $886.8M ($0.98/sh, +17% YoY), Total Operating Earnings $1.19B ($1.33/sh, +14% YoY), Adjusted Net Income $1.06B ($1.18/sh, +9% YoY); AUM rose to $685.8B (+14% YoY), FPAUM to $556.2B (+14% YoY) .
EPS beat vs SPGI consensus; Primary EPS actual $1.41 vs $1.30 estimate; revenue also above consensus, though definitions differ materially for alt managers; note SPGI methodology and caution on comparability. Values retrieved from S&P Global*.
Capital formation and deployment remained robust: $28B raised, $18B invested; dry powder at $115B; transaction fees $200M with ~50% originated in Europe .
Strategic catalysts: majority stake in Healthcare Royalty Partners (~$3B AUM, largely perpetual) and expanded digital infrastructure build with ECP; Global Atlantic third‑party capital ramp (IV sidecars ~$6B capacity) and liability elongation via ~$2.5B FABN issuance .
Dividend maintained at $0.185 per common share; issued $590M of 6.875% subordinated notes due 2065 .

What Went Well and What Went Wrong

What Went Well

Recurring earnings momentum: FRE $887M ($0.98/sh) and TOE $1.19B ($1.33/sh) with FRE margin 69% and AUM/FPAUM both +14% YoY .
Capital markets and fee growth: $200M transaction fees (diversified across infrastructure and PE; ~80% debt products); management fees $996M (+18% YoY) on NA XIV turn‑on .
Strategic and insurance flywheel: Japan Post Insurance $2B into new GA vehicle; IV sidecars near $6B capacity translating to >$60B FPAUM when deployed; FABN ~$2.5B issued with ~8‑year duration .
Quote: “We have direct line of sight to north of $800 million of monetization‑related revenue... the vast majority... performance income” .
Quote: “Our all‑in pre‑tax ROE continues to approach that 20% level” (including GA economics captured in AM segment) .

What Went Wrong

GAAP optics: GAAP net income to common fell to $472M from $668M YoY; GAAP diluted EPS $0.50 vs $0.72 YoY, reflecting insurance GAAP volatility and non‑cash items .
Investing earnings mixed: Net realized performance income declined to $109M vs $123M YoY; Strategic Holdings operating earnings down to $29M vs $41M YoY .
Insurance net cost increased with business growth and higher funding costs; NCI and preferred dividends weighed on GAAP .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenues ($USD Billions)	$3.258	$3.110	$5.089
GAAP Net Income to Common ($USD Billions)	$1.126	$(0.186)	$0.472
GAAP Diluted EPS ($)	$1.18	$(0.22)	$0.50

Non‑GAAP Per Adjusted Share	Q4 2024	Q1 2025	Q2 2025
FRE per Adjusted Share ($)	$0.94	$0.92	$0.98
TOE per Adjusted Share ($)	$1.23	$1.24	$1.33
ANI per Adjusted Share ($)	$1.32	$1.15	$1.18

Segment Earnings ($USD Millions)	Q4 2024	Q1 2025	Q2 2025
Fee Related Earnings (FRE)	$842.985	$822.603	$886.754
Insurance Operating Earnings	$249.973	$258.772	$277.932
Strategic Holdings Operating Earnings	$7.811	$31.486	$29.121
Total Operating Earnings (TOE)	$1,100.769	$1,112.861	$1,193.807

KPIs	Q4 2024	Q1 2025	Q2 2025
AUM ($USD Billions)	$637.572	$664.319	$685.806
FPAUM ($USD Billions)	$511.963	$526.045	$556.247
New Capital Raised (AUM) ($USD Billions)	$26.711	$30.540	$27.986
Capital Invested ($USD Billions)	$22.639	$18.974	$17.701
Dry Powder – Uncalled Commitments ($USD Billions)	$109.555	$115.628	$115.145
Transaction Fees ($USD Millions)	$270.296	$229.344	$199.568
Realized Investment Income ($USD Millions)	$109.823	$217.957	$153.998
Gross Unrealized Performance Income ($USD Billions)	$7.9	$8.7	$9.2

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Strategic Holdings Operating Earnings	FY 2026	$300+M	$350+M	Raised
Insurance Operating Earnings (quarterly)	Near‑term (next few quarters)	~$250M ±	~$250M ±	Maintained
FRE/TOE/ANI per share (firm‑level)	FY 2026	Prior targets (not disclosed in 8‑K)	Confident to achieve 2026 guidance	Maintained (qualitative)
Common dividend per share	Q2 2025	$0.185 (Q1)	$0.185 (Q2)	Maintained
Series D Mandatory Convertible Preferred dividend	Q1 2025	$0.7292	$0.78125 (Q2)	Raised

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
AI/digital infrastructure build	Infra flows, portfolio appreciation ; K‑Series Infra, Global Infra V raising	$50B ECP partnership; project pre‑leased; completion 4Q next year	Accelerating
Asset‑Based Finance (ABF) and private credit	ABF AUM ~$68B; alt credit performance strong	ABF Partners II final close $6.5B; ABF AUM ~$75B; secular TAM $6T→$9T	Accelerating
Private wealth (K‑Series, KFIT/KABF)	K‑Series AUM $21B (as of 3/31)	K‑Series AUM $25B; KFIT momentum; KCOP converting to KABF (proxy pending)	Growing
Insurance strategy (GA): liability duration & 3rd‑party capital	NII up; GA AUM $197B; inflows across channels	~$2.5B FABN issuance, multi‑currency; JPI $2B into GA vehicle; IV capacity ~$6B	Strengthening
Institutional fundraising cadence	$114B in 2024; diversified by asset class	$28B in Q2; “business as usual”; consolidation to fewer partners	Strong/steady
Regulatory (401(k) access to alts)	n/a	Discussed target‑date pathways; partnering with Capital Group	Emerging

Management Commentary

Prepared remarks emphasized repeatable earnings streams: “Over the last 12 months, nearly 80% of our segment earnings were driven by our more recurring earnings streams” .
Deployment and monetization pipeline: “Since the start of the year, we've deployed nearly $37 billion... we have direct line of sight to north of $800 million of monetization‑related revenue” .
Private credit/ABF strategy: “ABF... $6 trillion addressable market today, increasing to over $9 trillion over the next four years... we believe that we are already a leader in the space” .
Insurance economics and ROE: “When you include... GA... our all‑in pre‑tax ROE continues to approach that 20% level” .
2026 targets reiterated: “We continue to feel confident in our ability to achieve the 2026 guidance... across FRE per share, TOE per share, and ANI per share” .

Q&A Highlights

Private wealth momentum: K‑Series doubled YoY to $25B; KFIT adding ABF allocation; KCOP converting to KABF pending proxy; platform additions continuing .
Institutional fundraising: Ahead of pace on $300B+ (2024‑2026) target; consolidation to fewer, deeper partnerships benefiting multi‑product platform .
ABF transactions: Harley‑Davidson portfolio sale and long‑term flow partnership cited as emblematic of “capital‑light” trend across corporates .
Digital infrastructure: $50B JV with ECP; pre‑leased, construction underway; broader need spans data centers, fiber, mobile infrastructure .
Global Atlantic trajectory: Q2 insurance operating earnings $278M (variable investment income uplift); steady ~$250M ± outlook; multi‑year plan to elongate liabilities and increase alts from ~1% toward ~5% industry average .

Estimates Context

The quarter compares favorably vs SPGI consensus; caveat: vendor definitions for “revenue” in alt managers can differ materially from GAAP or segment metrics.

Metric	Latest Reported Quarter	Next Quarter
Primary EPS Consensus Mean ($)	1.2979 (estimate) vs 1.41 actual → bold beat*	1.3943 (estimate)*
Revenue Consensus Mean ($USD Billions)	2.258 (estimate) vs 7.105 actual → bold beat*	2.202 (estimate)*
EBITDA Consensus Mean ($USD Billions)	1.467 (estimate)*	1.524 (estimate)*
# EPS Estimates	17*	16*
# Revenue Estimates	4*	4*

Values retrieved from S&P Global*.
Interpretation: EPS materially ahead of consensus; revenue also ahead, but consensus likely mapped to asset‑management economics rather than consolidated GAAP insurance revenues.

Key Takeaways for Investors

Recurring earnings up double‑digits with 69% FRE margin; durable earnings now ~80% of segment total—supports multiple resilience despite GAAP volatility .
Capital formation and dry powder remain strong; fee base expanding via NA XIV turn‑on, infra and credit strategies—visibility to continued management fee growth .
Monetization pipeline >$800M performance income near‑term plus record $9.2B unrealized carry—supports investing earnings trajectory over next 4‑6 quarters .
Insurance strategy is compounding: liability duration elongation (FABN), third‑party capital scaling (IV/JPI), gradual alts mix shift—sustainable ~$250M quarterly insurance OE with option value for lift .
Strategic catalysts: HCR acquisition adds largely perpetual life sciences royalties; digital infra JV with ECP targets hyperscaler needs—incremental origination capacity across GA and credit pools .
Private wealth channel flywheel: K‑Series at $25B and expanding into ABF; expect continued platform additions and product breadth to drive incremental FPAUM .
Near‑term trading: Potential positive reaction to beats and monetization visibility; watch capital markets fee cadence and infra project execution. Medium‑term thesis: durable earnings growth via fee base, GA platform synergies, and monetization of embedded gains.

Additional detail and source documents:

Q2 2025 8‑K earnings release and exhibits .
Q2 2025 earnings call transcript .
Prior quarters’ earnings releases: Q1 2025 ; Q4 2024 .