Apollo Global Management, Inc. Q4 FY2025 earnings call

• Record combined fee-related and spread-related earnings of $5.9 billion in 2025, with adjusted net income of $5.2 billion, up 14% year over year. - Origination volume crossed $300 billion, and capital formation had record inflows of $228 billion. - Expanded into six markets: individuals, insurance, debt/equity buckets of institutions, traditional asset managers, and 401(k) market. - Athene maintained a defensive position with $24 billion in cash, treasuries, and agencies. - Strong investment performance across credit buckets (8% to 12% growth), hybrid value (16% growth), and Fund X (22% net IRR).

For the full year, Apollo generated record combined fee-related earnings (FRE) of $2.5 billion (up 23% year over year) and spread-related earnings (SRE) of $3.4 billion (normalized plus 9% year over year), driving adjusted net income of $5.2 billion. Asset Management achieved record fee-related earnings of $2.5 billion in 2025, up 23% year over year, with AUM and fee-generating AUM increasing 25% year over year to $938 billion and $79 billion, respectively. Athene's net invested assets grew by 18% year over year to $292 billion, and it generated $865 million of SRE for the quarter.

• Expect 20%+ FRE growth in 2026, with 75% of revenue contribution from core businesses (asset-backed finance, direct lending, multi-credit, hybrid) and 25% from newer initiatives. - Anticipate 10% SRE growth in 2026, assuming an 11% alts return. - Plan to increase annual dividend per share by 10% from $2.04 to $2.25 starting in 2026.

• Increased probability of outcomes outside established market lanes, requiring consideration of risk and reward. - Software exposure concerns with potential dispersion in valuations; however, Apollo's exposure is among the lowest in the industry. - Competition in retirement services and retail markets, with some firms lacking origination and cost efficiency.

Q: Mike Brown of UBS asked about the ARI transaction's implications on SRE.

A: Marc Rowan and Martin Kelly discussed that transferring assets to Athene will not be a full net benefit with excess spread, as it will displace other forms of SRE lending but helps de-risk the year towards achieving 10% SRE growth.

Q: Alex Blostein of Goldman Sachs inquired about dynamics in the non-traded BDC space and ADS.

A: James Zelter stated that ADS's 100% senior secured, first lien positioning has resonated, with net new assets up every quarter last year, and they expect to capture greater market share by focusing on alignment and return without reaching.

Q: Glenn Schorr of Evercore ISI asked about institutional LP interactions and reallocations to privates.

A: Marc Rowan and James Zelter mentioned increased dispersion among managers, with most growth expected outside the alternative bucket in areas like fixed income replacement and PRIV, and emphasized the importance of origination and principal's mindset.