APO-PA — Apollo Global Management, Inc.

Summary of Apollo Global Management's Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Full Year Performance: 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: $2.5 billion for the year, a 23% increase year-over-year; SRE at $3.4 billion, normalized up 9% year-over-year.
• Origination Volume: Record origination volume of over $305 billion, with a consistent spread of 350 basis points over treasuries.
• Capital Formation: Record inflows of $228 billion for the year, with $42 billion in Q4 alone.
• Assets Under Management (AUM): Increased by 25% year-over-year to $938 billion.

2. Strategic Updates and Business Highlights

• Market Expansion: Apollo is expanding from serving primarily institutional portfolios to six markets, including individuals and insurance, which are expected to be as large as their original market.
• Product Development: Introduction of new strategies and partnerships, including a significant collaboration with Schroders and the launch of the PRIV ETF with State Street, which has grown to nearly $700 million.
• Origination Strategy: Emphasis on a principal's mindset in investment decisions, focusing on quality and sustainable returns rather than short-term gains.
• Athene's Growth: Athene's net invested assets grew by 18% year-over-year to $292 billion, with record inflows of $83 billion.

3. Forward Guidance and Outlook

• 2026 Expectations: Anticipated FRE growth of over 20%, with SRE growth projected at 10%. Expected inflows of approximately $85 billion in 2026, with significant contributions from new markets.
• Long-Term Growth: Continued focus on maintaining a 10% average growth in SRE through 2029, supported by a strong pipeline and origination capabilities.

4. Bad News, Challenges, or Points of Concern

• Market Volatility: Concerns about the impact of public market volatility on institutional allocations to private assets, particularly in the software sector, which has faced significant price corrections.
• Competitive Landscape: Increased competition in the retail and pension risk transfer (PRT) segments, with some competitors potentially struggling due to inadequate origination capabilities.
• Cost of Funds: Rising costs of funds may pressure margins, although Apollo believes it can maintain competitive spreads through its origination strategies.

5. Notable Q&A Insights

• ARI Transaction Impact: The acquisition of $9 billion in commercial mortgage assets is expected to enhance SRE but will not significantly add to it due to portfolio diversification.
• Software Sector Concerns: Apollo's minimal exposure to the software sector is seen as a competitive advantage, with management expressing confidence in capturing market share amidst current turbulence.
• Institutional Allocations: Discussions around the potential shift in institutional allocations towards alternatives are ongoing, with a focus on how volatility may accelerate this trend.
• 401(k) Market Opportunities: Progress in integrating private assets into 401(k) plans is noted, with expectations for significant growth once regulatory clarity is achieved.

Overall, Apollo Global Management reported a strong financial performance in Q4 2025, with optimistic growth prospects for 2026, while navigating challenges in market volatility and competition.