APO-PA — Apollo Global Management, Inc.

Summary of Apollo Global Management Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Record combined fee-related earnings (FRE) and spread-related earnings (SRE) of $5.9 billion, leading to adjusted net income of $5.2 billion, up 14% year-over-year ($8.38 per share).
• FRE for the year reached $2.5 billion, a 23% increase year-over-year.
• SRE was $3.4 billion, normalized up 9% year-over-year.
• Origination volume exceeded $300 billion, with a robust average spread of 350 basis points over treasuries.
• Capital formation achieved record inflows of $228 billion, marking the third consecutive year of record inflows.

2. Strategic Updates and Business Highlights:

• Apollo is transitioning from serving one market to six, including individuals, insurance, and 401(k) markets, which could match the size of their original institutional market.
• The individual market saw over $18 billion in inflows, while insurance contributed more than $15 billion in third-party insurance.
• The firm is focusing on a "total portfolio approach," integrating debt and equity investments into private assets.
• New partnerships, including a notable collaboration with Schroders, are expected to grow into significant revenue streams.
• The firm’s ETF, PRIV, is nearing $700 million in size and is performing well among investment-grade ETFs.

3. Forward Guidance and Outlook:

• For 2026, Apollo expects FRE growth of over 20%, with SRE growth anticipated at 10%.
• Athene is projected to see approximately $85 billion in inflows, with a strong pipeline in retirement services.
• The firm aims to maintain a FRE margin of about 57% and expects low double-digit growth in non-compensation costs.
• The outlook remains positive, with a focus on quality origination and maintaining profitability over volume.

4. Bad News, Challenges, or Points of Concern:

• The firm acknowledges increased volatility in public markets, which could impact investor sentiment and allocation strategies.
• Concerns about competition, particularly in the retail and pension risk transfer (PRT) segments, were noted, with a focus on maintaining profitability rather than volume.
• The software sector has seen significant valuation adjustments, which could pose risks if not managed carefully.
• The firm is cautious about the unpredictability of performance fees, which can fluctuate based on market conditions.

5. Notable Q&A Insights:

• Management discussed the implications of the recent ARI transaction, clarifying that while it will contribute to SRE, it is not expected to be additive beyond the previously guided growth.
• The competitive landscape in the non-traded BDC space was addressed, with management expressing confidence in ADS's positioning despite market turbulence.
• Discussions around the 401(k) market highlighted ongoing regulatory developments, with expectations for increased adoption of alternative products once clearer guidelines are established.
• Management emphasized the importance of a principal's mindset in investment decisions, focusing on long-term value creation rather than short-term gains.

Overall, Apollo Global Management reported strong financial performance in Q4 2025, with a positive outlook for continued growth driven by strategic market expansions and a focus on quality origination. However, the firm remains vigilant about market volatility and competitive pressures.