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BLUE OWL CAPITAL INC. (OWL)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered resilient growth: GAAP revenue rose 28% year over year to $631.4M, GAAP EPS was $0.03, and non-GAAP Fee-Related Earnings (FRE) were $340.3M ($0.23 per adjusted share) while Distributable Earnings (DE) were $315.2M ($0.21 per adjusted share) .
  • AUM reached $251.1B (+52% YoY) with permanent capital at $191.5B; AUM not yet paying fees was $22.6B, implying >$300M of future annual management fees once deployed .
  • Fundraising momentum remained strong: $9.5B equity raised in Q4 (record quarter), $27.5B in 2024; firm highlighted accelerating private wealth and institutional channels plus new strategies (European net lease, GP-led secondaries, alt credit) .
  • 2025 outlook reaffirmed: management guided upper-20%+ FRE revenue growth, mid-to-upper-20% FRE growth, ~20% FRE per share growth, and an annual dividend of $0.90; effective tax rate expected in mid-to-high single digits, rising gradually over time .
  • Near-term catalysts: expected listing of the software lending BDC ($135M annual fee uplift), deployment of $22.6B AUM not yet paying fees (>$300M annual fees), and continued scale in digital infrastructure following IPI acquisition .

What Went Well and What Went Wrong

What Went Well

  • “Record quarter of fundraising” with $9.5B equity raised; diversification across channels and strategies including alt credit, European net lease, and GP-led secondaries .
  • Strong credit performance: direct lending gross returns 3.1% in Q4 and 13.9% LTM; portfolio quality stable (high-single-digit underlying revenue/EBITDA growth, low LTVs, limited nonaccruals/amendments) .
  • Strategic scale and innovation: closing of IPI (digital infrastructure), Atalaya integration (alternative credit), and progress toward largest tech-focused BDC via OTF+OTF II merger; management emphasized “purpose-built model” with predictable cash flows .

What Went Wrong

  • GAAP margin contracted to 12% in Q4 vs 17% in Q4 2023, reflecting higher G&A and amortization; management noted G&A up 41% in 2024 due to distribution and acquisition integration, with FRE margin guidance stepping down to 57–58% in 2025 .
  • Quarter-over-quarter Part I fees were “effectively flat” to slightly down (~$2M), tempering fee growth; gross-to-net deployment conversion was lower in Q4 amid elevated refis in a more open syndicated market .
  • Administrative, transaction and other fees declined 13% YoY in Q4, and FRE administrative fees fell 50% YoY; management framed the mix shift as consistent with product evolution and new strategies ramping .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
GAAP Revenues ($USD Millions)$494.0 $600.9 $631.4
GAAP EPS – Basic ($)$0.04 $0.05 $0.03
GAAP EPS – Diluted ($)$0.03 $0.04 $0.03
GAAP Margin (%)17%19%12%
FRE Revenues ($USD Millions)$468.8 $568.3 $595.7
FRE ($USD Millions)$279.4 $326.9 $340.3
FRE per Adjusted Share ($)$0.20 $0.22 $0.23
DE ($USD Millions)$262.3 $301.0 $315.2
DE per Adjusted Share ($)$0.18 $0.20 $0.21
FRE Margin (%)61%59%59%

Segment GAAP Revenue Breakdown

SegmentQ4 2023Q4 2024
Credit ($USD Millions)$249.3 $350.3
GP Strategic Capital ($USD Millions)$128.3 $152.3
Real Assets ($USD Millions)$33.0 $54.5
Total ($USD Millions)$494.0 $631.4

Key KPIs

KPIQ4 2023Q4 2024
AUM ($USD Billions)$165.7 $251.1
FPAUM ($USD Billions)$102.7 $159.8
Permanent Capital ($USD Billions)$130.1 $191.5
AUM Not Yet Paying Fees ($USD Billions)N/A$22.6
Expected Annual Mgmt Fees from AUM Not Yet Paying Fees ($USD Millions)N/A>$300
Quarterly Dividend per Class A Share ($)$0.18 $0.18

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FRE Revenue GrowthFY 2025Upper 20%+ (Q3 call) Upper 20%+ (reaffirmed) Maintained
FRE GrowthFY 2025Mid–upper 20s% (Q3 call) Mid–upper 20s% (reaffirmed) Maintained
FRE per Share GrowthFY 2025~20% (Q3 call) ~20% (reaffirmed) Maintained
Effective Tax RateFY 2025Under ~4% achieved for 2024 Mid–high single digits; gradual increase in coming years Raised vs 2024 actual
Dividend per ShareFY 2025$0.72 in 2024 annualized (implied $0.18/qtr) $0.90 annual, $0.225/quarter Raised
Software Lending BDC Listing Fee UpliftPost-listingN/A~$135M annual mana­gement fee increase New
AUM Not Yet Paying Fees Deployment~12 monthsN/A>$300M annual mgmt fees upon deployment; most within ~1 year New/Expanded detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q2 2024)Current Period (Q4 2024)Trend
Fundraising momentum & diversificationSecond-strongest quarter; $7.9B equity; broad sources incl private wealth; new strategies ramping Not available in document setRecord Q4 fundraising ($9.5B equity), >30% from new products; strong wealth/institutional flows Improving breadth and scale
Alternative Credit (Atalaya)Atalaya closed; platform expansion underway Not available in document setForward flow agreements (Upstart), demand from large platforms; new alt-credit retail product in 2025 Scaling integration and products
Digital Infrastructure (IPI) & AI demandAnnounced agreement to acquire IPI Not available in document setIPI closed; ~$14B AUM & ~$11B FPAUM added; hyperscaler capex plans underpin growth Accelerating platform with secular tailwinds
Credit performance & deploymentRobust direct lending; stable quality, LTVs; strong wealth flows Not available in document set3.1% Q4 gross return; 13.9% LTM; high refi activity; net deployment moderated Strong performance; mix shift via refis
FRE margin & expense trajectoryFRE margin ~59% LTM; investment in growth platforms Not available in document set2025 FRE margin guided 57–58%; G&A elevated from acquisitions/distribution Stable–slightly lower margins as scale investments continue

Management Commentary

  • “We capped off a highly successful year… total equity raise in 2024 to $27.5 billion… raised over $47,000,000,000 also a record for us… record $52,000,000,000 in gross deployment in credit, driving 26% FRE growth for the year.” .
  • “With the full suite of capabilities… closed the merger of OBDC and OBDE… working towards the proposed merger of OTF and OTF2… largest technology focused BDC… highest quarter fundraising… $9.5 billion of equity.” .
  • “Alternative credit… announced a sizable forward flow agreement with Upstart… significant demand from large lending platforms… launching a new alternative credit product for both wealth and institutional markets.” .
  • “Effective tax rate… under 4% [2024]… for 2025… mid to high single digits… few percent per year thereafter… dividend for 2025 is $0.90 per share.” .
  • On AI/data centers: “Meta… $65B; Microsoft… $80B; Amazon… ~$80B; Google… $75B… our client base… near sovereign-like credit ratings… DeepSeek suggests AI adoption happens faster… picks and shovels infrastructure is the way to play.” .

Q&A Highlights

  • Gross-to-net deployment and refis: Management emphasized incumbency benefits and credit enhancement during refis; Q4 gross-to-net conversion lower due to elevated refinancings in an open syndicated market, not demand weakness .
  • Fundraising outlook: Both CEOs/CFO are “very bullish” for 2025 fundraising across flagship and new platforms; expect meaningful increase from 2024 levels .
  • Expenses/margins: 2025 FRE margin guided at 57–58%; G&A ~12% of revenue and comp ~30–31% expected; 2024 G&A elevated due to acquisitions and distribution .
  • Real Assets fee rate and IPI blend: IPI fee-paying AUM ~$11B at ~115 bps, potentially a bit higher forward; Prima fully reflected in rates .
  • BDC strategy: OBDE+OBDC merger completed (second-largest public BDC); OTF+OTF II merger on track to close early Q2 with listing shortly after; listing adds ~$135M annual management fees .

Estimates Context

  • S&P Global consensus EPS and revenue estimates for Q4 2024 were unavailable due to system request limits at the time of retrieval; as a result, explicit consensus comparisons cannot be shown (S&P Global data access limit encountered). Where estimates are needed, we recommend refreshing S&P Global consensus after limit reset and updating the tables accordingly.

Key Takeaways for Investors

  • High-visibility earnings growth: >$300M annual fees from deploying $22.6B AUM not yet paying fees plus ~$135M from the expected software BDC listing underpin 2025 growth (roughly 20%+ uplift to 2024 management fees) .
  • Secular tailwinds: Digital infrastructure (IPI) leverages hyperscaler megacapex; Blue Owl’s “picks and shovels” approach offers durable cash flows with high-credit counterparties .
  • Private wealth/institutional scale: Robust and diversified channels with new products (European net lease, GP-led continuation, alt credit) drive fundraising beyond legacy strategies .
  • Margin trajectory: FRE margin guided modestly lower (57–58%) as investments scale; monitor G&A normalization and integration synergies through 2025 .
  • Credit quality: Consistent performance and low loss rates strengthen underwriting narrative; watch gross-to-net as refi cycle moderates and M&A activity potentially rebounds .
  • Dividend policy: Fixed $0.90 annual dividend signals confidence in cash generation and payout stability .
  • Near-term catalysts: Software BDC listing, Investor Day strategy update, and acceleration in alt credit forward flows could drive sentiment and rerating .

Appendix: Source Documents

  • Q4 2024 Form 8-K earnings press release and deck (Item 2.02, exhibits): .
  • Q4 2024 earnings call transcript: .
  • Other Q4 2024 press releases: Q3 2024 results press release (Oct 31, 2024) .
  • Prior quarter references: Q3 2024 call and 8-K excerpts .