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BLUE OWL CAPITAL INC. (OWL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered record fundraising and strong non-GAAP performance: FRE rose to $358.3M ($0.23 per adjusted share) and DE to $323.0M ($0.21), while GAAP revenues climbed 28% YoY to $703.1M; GAAP net income was $17.4M ($0.03 basic) as expenses and equity comp elevated .
  • AUM advanced to $284.1B; FPAUM to $177.5B; permanent capital reached $204.6B. AUM not yet paying fees swelled to $28.6B, implying ~$379M annual management fees upon deployment—a key forward driver of fee growth .
  • Platforms executed broadly: Credit gross originations were ~$9.7B; Real Assets saw net lease commitments of $4.2B at ~8% cap rates; Digital Infrastructure Fund III closed at $7B hard cap; alternative credit interval fund closed $850M .
  • Guidance/catalysts: FRE margin guided to 57–58% for 2025 (maintained); OTF listing to add ~$135M annual management fees when fully reflected (only ~$6M captured in Q2; NTI step-up ~$3M expected in Q3); quarterly dividend maintained at $0.225; net lease fees guided roughly flat in Q3 due to fee step-downs .

What Went Well and What Went Wrong

What Went Well

  • “Record Quarter of Capital Raising” across institutional and wealth channels; $12.1B equity raised in Q2; diversified flows across Credit ($5.8B) and Real Assets ($5.8B) .
  • Strategic momentum: Digital Infrastructure Fund III final close at $7B hard cap; net lease seventh vintage first close ~$$2.1B plus ~$$1B co-invest; strong pipeline ($41B LOI) and ~8% cap rates on ~$4.2B commitments .
  • Management emphasized secular positioning and durable, income-oriented strategies: “We intend to grow FRE management fees to over $5B and FRE to over $3B…we feel very much on track” (Co-CEO) .

What Went Wrong

  • GAAP margin compressed to 12% (vs 28% YoY) with GAAP net income down to $17.4M (from $33.9M), reflecting higher compensation, amortization and G&A; diluted EPS fell to $0.02 (from $0.06) .
  • FRE margin moderated to 57% (vs 59% YoY), with elevated FRE expenses as the firm invests in scaling distribution and new strategies .
  • Q2 only captured ~$6M of OTF’s expected ~$33M quarterly run-rate (timing), and alternative credit interval fund management fees will begin in ~12 months; net lease fee step-down tempering Q3 management fee growth (near-term headwinds to fee trajectory) .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
GAAP Revenues ($USD Millions)$549.848 $683.486 $703.106
GAAP Net Income Attributable to OWL ($USD Millions)$33.945 $7.430 $17.426
EPS — Class A Basic ($USD)$0.06 $0.01 $0.03
EPS — Class A Diluted ($USD)$0.06 $0.00 $0.02
GAAP Margin (%)28%6%12%
FRE Revenues ($USD Millions)$520.006 $620.192$646.050
Fee-Related Earnings ($USD Millions)$296.475$345.391$358.343
DE — Distributable Earnings ($USD Millions)$272.965$262.516$323.014
FRE Margin (%)59% 57%57%

Segment Revenues (GAAP)

Segment ($USD Millions)Q2 2024Q1 2025Q2 2025
Credit$288.310 $354.374 $368.016
Real Assets$42.209 $109.450 $105.427
GP Strategic Capital$135.235 $140.362 $149.926

Segment Revenues (FRE)

Segment ($USD Millions)Q2 2024Q1 2025Q2 2025
Credit$288.310 $354.374 $368.016
Real Assets$42.209 $90.131 $91.093
GP Strategic Capital$145.895 $151.478 $161.043

Key KPIs

KPIQ4 2024Q1 2025Q2 2025
AUM ($USD Billions)$251.1 $273.3 $284.1
FPAUM ($USD Billions)$159.8 $174.6 $177.5
Permanent Capital ($USD Billions)$191.5 $196.1 $204.6
AUM Not Yet Paying Fees ($USD Billions)$22.6 $23.4 $28.6
Expected Annual Mgmt Fees Once Deployed ($USD Millions)>$300 $289 ~$379
New Capital Commitments Raised ($USD Billions)$18.1 $10.7 $13.9
Total Equity Fundraise ($USD Billions)$9.5 $6.7 $12.1
Private Wealth Equity Fundraise ($USD Billions)$3.9 $3.7 $4.4
Institutional Equity Fundraise ($USD Billions)$5.6 $3.0 $7.6
Direct Lending Gross Originations ($USD Billions)$13.4 $12.8 $9.7
Direct Lending Net Deployment ($USD Billions)$2.1 $4.5 $2.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FRE MarginFY 202557–58% (prior calls) 57–58% (reiterated) Maintained
OTF Listing – Mgmt FeesRun-rate$135M annual ($33M/quarter) ~$6M realized in Q2; NTI step-up ~$3M expected in Q3 Timing clarified
Net Lease Mgmt FeesQ3 2025Not specifiedRoughly flat vs Q2 due to ORF6 step-down vs ORF7 deployment New guidance
Alternative Credit Interval Fund – Mgmt FeesNext ~12 monthsNot specifiedFees anticipated in ~12 months (waiver-like) New guidance
Dividend per Class A Share2025/Q2$0.225 in Q1 2025 $0.225 in Q2 2025; 2025 annual $0.90 (+25% YoY) Maintained quarterly; annual raised vs 2024

Earnings Call Themes & Trends

TopicQ4 2024 (Prior-2)Q1 2025 (Prior-1)Q2 2025 (Current)Trend
AI/Data Centers & Digital InfrastructureReal Assets scaling; IPI announced closing Jan-3; positioning for data center growth IPI closed; Real Assets AUM/FPAUM up sharply; net lease returns positive DI Fund III $7B hard cap closed; 3.8GW leased capacity; “best risk/reward” and wealth product planned; next vintage expected next year Accelerating
Private Wealth & 401(k) AccessWealth fundraising strong in quarter/year Wealth fundraising $3.7B; permanent capital 89% of fees Strategic partnership with Voya to bring alts into target-date structures; CIT path first Expanding access
Alternative Credit & Asset-Backed FinanceAtalaya acquisition; credit originations strong Alternative credit returns 6.1% Q1; origination/deployment active $850M interval fund closed; LendingClub forward flow upsized to $3.4B; capital solutions >200bps over public bonds Scaling
Direct Lending Activity & Credit Quality4Q returns 3.1%; net deployment $2.1B 1Q returns 3.1%; net deployment $4.5B; LTVs high 30s ~10% EBITDA growth; realized losses ~13bps; spreads and volumes stable-to-improving; early signs of pickup Stable to improving
Globalization of Flows——EMEA/APAC capital raised now 23% (vs 14% two years ago) Broadening

Management Commentary

  • “We raised $14 billion of new capital during the quarter…FRE revenues by 29%, FRE by 23%, and DE by 20% on a last 12-month basis” (Co-CEO) .
  • “We are very pleased with the results…17th consecutive quarter of management fee and FRE growth…equity raised over the last 12 months increased nearly 90% YoY” (CFO) .
  • “OTF…now the second-largest publicly traded BDC by net assets and largest tech-focused BDC…listing seamlessly amid turbulence” (Co-CEO) .
  • “We intend to grow FRE management fees to over $5 billion and FRE to over $3 billion…we are very much on track” (CFO) .
  • “Digital infrastructure…own mission-critical assets…tenants with average AA ratings…15–20-year leases…‘best risk-reward setup’ we’ve seen” (Co-CEO) .

Q&A Highlights

  • Asset-backed origination and interval fund strategy: Management outlined deep origination across sub-channels, data science capability, and broadening endpoints (interval fund), highlighting a ~$7–$10T addressable market and >200bps spread over liquid alternatives .
  • 401(k) pathway with Voya: CITs enable target-date inclusion; focus on prudent, income-oriented, low-volatility alts; multi-manager structures possible longer-term .
  • Direct lending activity/spreads: Credit quality exceptional; moderation in refinancing; signs of pickup in activity into Q3 with strong underlying EBITDA and conservative LTVs .
  • Digital infrastructure fundraising cadence: Next flagship vintage likely in market next year; DI wealth product targeted end-2025/early-2026; half of Fund III capital already soft-circled .
  • Fee trajectory mechanics: OTF listing contributed ~$6M in Q2, NTI step-up ~$3M expected in Q3; net lease fee dynamics (ORF6 step-down vs ORF7 deployment) keep Q3 fees roughly flat; interval fund fees in ~12 months; catch-up fees a little over $7M in Q2 .

Estimates Context

  • Wall Street consensus via S&P Global for quarterly EPS, revenue, and EBITDA was unavailable at time of retrieval; therefore, we cannot assess beats/misses versus consensus for Q2 2025. Values retrieved from S&P Global.*
  • Near-term sell-side models likely need to incorporate: (i) OTF ~$135M annual fee run-rate (timing ramp), (ii) ~$379M expected annual management fees tied to AUM not yet paying fees, (iii) net lease fee step-down offset by ORF7 deployment, and (iv) interval fund fees starting ~12 months out .

Key Takeaways for Investors

  • Non-GAAP engine robust: FRE and DE posted healthy sequential and YoY gains with 17th consecutive quarter of fee/FRE growth; while GAAP margin compressed, fee sustainability is anchored by permanent capital (87% LTM) .
  • Forward fee catalyst: $28.6B of AUM not paying fees implies ~$379M annual fees when deployed—an embedded driver of FRE growth over the next 12–24 months .
  • OTF and net lease cadence: OTF adds ~$135M annual fees as it ramps (partial Q2 capture; NTI step-up expected Q3). Net lease fee dynamics temper Q3 but pipeline/commitments support medium-term growth .
  • Digital infrastructure scale-up: DI Fund III $7B is active; wealth product launch next 6–12 months, with hyperscaler demand and AA-average tenant profile underpinning income-oriented, downside-protected returns .
  • Alternative credit expansion: $850M interval fund and repeat forward-flow partnerships (e.g., LendingClub $3.4B) broaden fee base with attractive spreads, complementing direct lending .
  • Globalization of flows: Institutional contributions led Q2; EMEA/APAC share up to 23%, diversifying fundraising sources and supporting scale .
  • Trading lens: Near-term, look for Q3 updates on OTF ramp and net lease fee dynamics; medium-term, deployment of AUM not paying fees, DI fundraising/deployment, and interval fund fee turn-on should support upward estimate revisions and multiple resilience .

Citations:
Press release and earnings deck:
Earnings call transcript:
Prior quarters: Q1 2025 8-K ; Q4 2024 8-K .