10-Q: Apollo Global Management Reports Strong Q3 2025 Growth

Apollo Global Management announced a significant increase in Q3 2025 net income and total Assets Under Management, driven by strong fee-related revenues and strategic acquisitions.

Summary

• Total Revenues for the three months ended September 30, 2025, increased by 26.4% to $9,823 million, up from $7,773 million in the prior year period.
• Net income attributable to Apollo Global Management, Inc. common stockholders surged by 117.5% to $1,712 million for Q3 2025, compared to $787 million in Q3 2024.
• Diluted Earnings Per Share (EPS) for Q3 2025 was $2.78, a substantial increase from $1.29 in Q3 2024.
• Total Assets Under Management (AUM) reached $908.4 billion as of September 30, 2025, an 8.2% increase from June 30, 2025, and a 20.9% increase from December 31, 2024.
• Fee-Generating AUM grew to $685.0 billion as of September 30, 2025, up 7.3% from June 30, 2025, and 20.5% from December 31, 2024.
• Fee Related Earnings (FRE) for Q3 2025 increased by 22.8% to $652 million, compared to $531 million in Q3 2024.
• Spread Related Earnings (SRE) for Q3 2025 increased by 1.8% to $871 million, up from $856 million in Q3 2024.
• Principal Investing Income (PII) for Q3 2025 decreased by 35.9% to $50 million, from $78 million in Q3 2024.
• The acquisition of Bridge Investment Group Holdings Inc. was completed on September 2, 2025, contributing to AUM growth and asset management revenues.
• Net invested assets in the Retirement Services segment increased to $286.2 billion as of September 30, 2025, from $248.6 billion at December 31, 2024.
• Dry powder, representing capital available for investment, increased to $75 billion as of September 30, 2025, from $61 billion at December 31, 2024.

Sentiment

Score: 8

Explanation: The company demonstrated strong financial performance in Q3 2025 with significant revenue and net income growth, coupled with substantial AUM expansion driven by strategic acquisitions and organic inflows. While the nine-month net income showed a decline and Principal Investing Income was down, the overall trajectory and core business strength are positive.

Positives

• Significant growth in total revenues and net income for the three months ended September 30, 2025, demonstrating strong operational performance.
• Robust increase in Total AUM and Fee-Generating AUM, driven by strategic acquisitions like Bridge, strong subscriptions, and growth in retirement services client assets.
• Asset Management segment showed strong growth in management fees, advisory and transaction fees, and incentive fees.
• Net investment income in the Retirement Services segment increased significantly due to investment portfolio growth and higher rates on new deployments.
• Favorable performance of equity indices positively impacted FIA hedging derivatives, contributing to investment related gains.
• Increased dry powder to $75 billion indicates substantial capital available for future investments and growth opportunities.

Negatives

• Premiums in the Retirement Services segment decreased significantly by 69.9% for Q3 2025 and 69.8% for 9M 2025, primarily due to a decrease in pension group annuity premiums.
• Principal Investing Income (PII) decreased for both the three and nine months ended September 30, 2025, reflecting lower realized performance fees and increased principal investing compensation expense.
• Net income attributable to Apollo Global Management, Inc. common stockholders for the nine months ended September 30, 2025, decreased by 9.2% compared to the prior year period.
• Investment related gains (losses) for the nine months ended September 30, 2025, decreased by 53.9%, primarily due to unfavorable net foreign exchange impacts and changes in fair value of FIA hedging derivatives and reinsurance assets.
• An impairment loss on an equity investment and depreciation in Global Business Travel Group, Inc. investments negatively impacted net gains (losses) from investment activities for the nine-month period.
• Performance allocation losses from Athora and Fund IX for the nine months ended September 30, 2025, were noted due to reduced profits interest and investment depreciation, respectively.
• Net investment spread in Retirement Services decreased by 23 basis points for Q3 2025 and 15 basis points for 9M 2025, primarily due to higher cost of funds.

Risks

• Inflation, interest rate fluctuations, and general market conditions can significantly impact business performance, investment valuations, and income.
• International trade barriers, domestic or international political developments, and geopolitical events (e.g., conflicts in the Middle East, Ukraine/Russia) pose risks to economic stability and business operations.
• Ability to manage growth effectively in highly competitive environments is crucial for sustained performance.
• Performance of managed funds, ability to raise new funds, and variability of revenues, earnings, and cash flow are inherent risks.
• Dependence on certain key personnel and the use of leverage to finance businesses and investments.
• Athene's ability to maintain or improve financial strength ratings and the impact of reinsurers failing to meet obligations.
• Changes in the regulatory environment and tax status, including uncertainties around Pillar Two and Bermuda CIT, could affect financial statements.
• Litigation risks, including ongoing class action and derivative lawsuits, could result in significant losses or reputational damage.

Future Outlook

The company expects to continue growing its Assets Under Management and generating positive investment performance, which should lead to increased management and performance fees. The retirement services business is also expected to grow its investment portfolio. The Athora transaction remains subject to closing conditions, including regulatory approvals, and the amount funded is subject to change based on an anticipated capital raise by Athora.

Management Comments

• Management believes the company's current liquidity position and cash generated from revenues will be sufficient to meet anticipated expenses and working capital needs for at least the next 12 months.
• The company aims to align the interests of professionals and investors by providing profit-sharing interests in performance fees, incentivizing strong investment performance.
• Management actively monitors economic and market conditions, including global inflation and geopolitical developments, that could impact business operations and investment portfolios.
• The company's investment philosophy for retirement services focuses on generating spread income by sourcing long-term liabilities and originating high-quality, safe-yielding assets, emphasizing measured liquidity and complexity risk over incremental credit risk.

Industry Context

The financial results reflect a dynamic global economic environment. U.S. inflation remains elevated at 3.0% as of September 30, 2025, with the U.S. Federal Reserve implementing rate cuts. Equity markets, particularly the S&P 500 Index, showed strong performance in Q3 2025, while credit markets also saw positive trends. The U.S. dollar strengthened against major foreign currencies. Institutional investors continue to increase capital allocation to alternative investment managers, seeking attractive returns, which is a favorable trend for Apollo's asset management business.

Management Changes

Corporate Governance

Legal Proceedings

• Harbinger Capital Partners II LP et al. v. Apollo Global Management LLC, et al.: New York Supreme Court Appellate Division, First Department affirmed dismissal of the complaint as time-barred. Harbinger filed a motion for leave to appeal to the Court of Appeals on August 25, 2025, which Apollo opposed on September 22, 2025. Apollo believes the claims are without merit.
• Putative class action complaint against PlayAGS Inc. et al.: U.S. District Court for the District of Nevada dismissed all claims against underwriters and Apollo Defendants. The U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal on March 27, 2025. Plaintiffs' petition for rehearing en banc was denied on June 6, 2025, and their time to challenge has expired.
• Anguilla Social Security Board vs. Black et al.: Shareholder derivative complaint filed in Delaware Court of Chancery challenging $570 million payments to Former Managing Partners and Contributing Partners. Defendants' motion to dismiss was denied on September 20, 2024. A Special Litigation Committee (SLC) was formed on October 28, 2024, and proceedings are stayed until November 21, 2025.
• Class action complaint against AGM in Delaware Court of Chancery: Filed March 14, 2024, alleging certain provisions of the stockholders agreement violate Delaware law. Motion to dismiss stayed pending resolution of an appeal in a related case (West Palm Beach Firefighters Pension Fund v. Moelis & Co.).

Related Party Transactions

• Apollo provides investment advisory services to Athora, a strategic liabilities platform, and has equity commitments outstanding to Athora, including a conditional commitment of up to $2.0 billion for the Athora transaction.
• Athene has an equity investment in Atlas, an asset-backed specialty lender, and holds AFS securities issued by Atlas or its affiliates, with additional investment commitments of $1.4 billion.
• Athene has a strategic modco reinsurance agreement with Catalina Holdings (Bermuda) Ltd. affiliates, with a reinsurance recoverable balance of $5.9 billion.
• Athene invests in Skylign Aviation Holdings, LP, directly through notes and indirectly through AAA, with additional investment commitments of $159 million.
• Athene has investments in VA Capital Company LLC (parent of Venerable) and Venerable, including AFS securities, investment funds, and other investments, totaling $674 million.
• Athene invests in Wheels Inc. indirectly through AAA and directly holds AFS securities issued by Wheels, with additional investment commitments of $37 million.
• Apollo/Athene Dedicated Investment Programs (ADIP I and ADIP II) involve Athene's subsidiaries (ACRA 1 and ACRA 2) and third-party capital, with Athene holding investments in ADIP and commitments for additional investments.
• Tax Receivable Agreements (Apollo TRA and Bridge TRA) obligate the company to make payments to Former Managing Partners, Contributing Partners, and Bridge TRA holders based on tax benefits realized.

Stakeholder Impact

• Shareholders: Strong Q3 financial performance and AUM growth could positively impact share price and dividend prospects. Ongoing litigation and potential tax receivable agreement payments represent potential liabilities.
• Employees: Compensation and benefits expenses increased due to revenue growth and increased headcount. Equity-based compensation and profit-sharing arrangements align employee interests with company performance.
• Customers (Investors in managed funds): Continued strong investment performance in managed funds is crucial for client satisfaction and attracting new capital.
• Policyholders (Athene): Growth in deferred annuity and funding agreement business, along with higher rates on new issuances, impacts policyholder benefits and product offerings.
• Creditors: Issuance of new senior and subordinated notes, along with existing debt obligations, impacts the company's leverage and debt servicing requirements. Compliance with credit facility covenants is essential.

Next Steps

• Payment of a cash dividend of $0.51 per share of common stock on November 28, 2025.
• Payment of a cash dividend of $0.8438 per share of Mandatory Convertible Preferred Stock on January 31, 2026.
• Mandatory conversion of 6.75% Series A Mandatory Convertible Preferred Stock expected on July 31, 2026.
• Finalization of the purchase price allocation for the Bridge acquisition no later than one year from the Acquisition Date (September 2, 2025).
• Monitoring of the Athora transaction's closing conditions and anticipated capital raise.
• Continued assessment of deferred taxes related to the Bermuda Corporate Income Tax (CIT) regime.

Key Dates

Recommendation

Apollo Global Management's Q3 2025 results demonstrate robust growth, with a significant increase in net income and a substantial expansion of Assets Under Management (AUM) to over $900 billion. The Asset Management segment's Fee Related Earnings (FRE) are strong, indicating healthy core business operations. The strategic acquisition of Bridge Investment Group and increased dry powder position the company for continued future growth. While Principal Investing Income (PII) and nine-month net income show some volatility, the overall positive trends in AUM, revenue, and Q3 profitability, coupled with a strong balance sheet and strategic initiatives, suggest a favorable outlook for long-term investors. The company's ability to attract institutional capital and its diversified business model in alternative asset management and retirement services provide resilience.

Keywords

Alternative Asset Management, Retirement Services, SEC Filing, AUM Growth, Financial Performance, Investment Management, Private Equity, Credit Strategies, Annuities, SEC 10-Q, Apollo Global Management, Athene, Bridge Acquisition