Yahoo Finance

• Fee Related Earnings (FRE): $559 million, up 21% year-over-year.

• Spread Related Earnings (SRE): $826 million, excluding notable items.

• Adjusted Net Income: $1.1 billion or $1.82 per share.

• Assets Under Management (AUM): Up $785 million, a 17% increase year-over-year.

• Record Inflows: $43 billion in the quarter, including $26 billion at Athene.

• Origination Volume: $56 billion, led by platforms.

• Cash Dividend: $0.51 per share, a 10% increase from the prior quarterly run rate.

• Private Equity Fund X Net IRR: 19% at the end of the quarter.

• Global Wealth Fundraising: Nearly $5 billion in the quarter, an 85% increase year-over-year.

• Net Spread (Ex-Notables): 129 basis points, declined by 8 basis points sequentially.

• Share Repurchases: Over $700 million in the first quarter.

• Bridge Investment Group Acquisition: Announced with an equity value of approximately $1.5 billion.

• Warning! GuruFocus has detected 9 Warning Signs with APO.

Release Date: May 02, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Apollo Global Management Inc (NYSE:APO) reported record fee-related earnings of $559 million, marking a 21% year-over-year increase.

• The company declared a cash dividend of $0.51 per share, representing a 10% increase from the prior quarterly run rate.

• Apollo achieved record inflows of $43 billion in the quarter, with significant contributions from Athene.

• The firm demonstrated strong investment performance, particularly in private equity, with Fund X achieving a net IRR of 19%.

• Apollo's origination activity was robust, with $56 billion in assets originated during the quarter, showcasing a 30% growth year-over-year.

Negative Points

• Apollo Global Management Inc (NYSE:APO) faces headwinds from competitive pressure in the retail channel, impacting net spread results.

• The company anticipates a mid-single-digit growth rate for 2025, down from previous expectations due to market-driven uncertainties.

• There is a noted increase in the cost of funds, up 28%, which is affecting the company's financial performance.

• The firm is experiencing higher asset prepayments, which are running above forecasted levels, creating additional financial challenges.

• Apollo's business is under-earning on the new business written in the quarter relative to its potential, due to current market conditions.

Q & A Highlights

Q: Can you break down the lower SRE and explain which part is conservative and what conditions could make you less conservative? Also, how does the higher cost of funds factor into this? A: Marc Rowan, CEO, explained that the business is underwritten on a spread and ROE basis, aiming for a mid-teens ROE. The lower SRE is due to competitive conditions not being favorable for risk-taking, leading to increased use of funding agreements and cash piling. The outlook depends on interest rates and competitive pressures, with potential upside from wider spreads and strong asset management pipelines. Martin Kelly, CFO, added that the earnings profile is influenced by predictable behaviors, assumptions about prepays, and unknowns like rates and spreads.