10-Q: Athene Holding Ltd. Reports Q1 2025 Results: Net Income Declines Amid Market Volatility

Athene Holding Ltd.'s Q1 2025 net income decreased due to lower investment gains, despite growth in net investment income and a decrease in benefits and expenses.

Summary

• Athene Holding Ltd. reported a decrease in net income available to common stockholders for Q1 2025, falling to $420 million from $1.147 billion in Q1 2024.
• The decline was primarily attributed to a $1.5 billion decrease in revenues, which was partially offset by a $687 million decrease in benefits and expenses and a $132 million decrease in income tax expense.
• Revenues decreased due to lower investment-related gains (losses), which shifted from a $1.677 billion gain in Q1 2024 to an $828 million loss in Q1 2025, influenced by changes in fair value of FIA hedging derivatives and foreign exchange impacts.
• Net investment income increased by $699 million to $3.991 billion, driven by growth in the investment portfolio and higher rates on new deployments.
• Benefits and expenses decreased due to lower interest-sensitive contract benefits, partially offset by increased market risk benefits remeasurement losses and higher operating expenses.
• The company's net investment spread was 1.65%, a decrease of 18 basis points compared to the same period last year.
• Net alternative investments totaled $13.0 billion, representing 5.0% of the net invested asset portfolio.
• As of March 31, 2025, the company estimates it had $8.2 billion in capital available to deploy.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While net investment income increased, the overall net income decreased significantly due to lower investment gains. The company maintains a strong capital position, but the decline in profitability is a concern.

Positives

• Net investment income increased by $699 million to $3.991 billion, driven by growth in the investment portfolio and higher rates on new deployments.
• Gross organic inflows increased $5.5 billion, or 27% from the prior year, reflecting the strength of our multi-channel distribution platform and our ability to quickly pivot into optimal and profitable channels as opportunities arise.

Negatives

• Net income available to Athene Holding Ltd. common stockholder decreased by 63% to $420 million.
• Investment related gains (losses) decreased by $2.5 billion to $(828) million.
• Net investment spread was 1.65%, a decrease of 18 basis points.

Risks

• The company is exposed to market risks, including credit, interest rate, equity price, and inflation risks.
• Economic and market conditions, including global inflation, can significantly impact the performance of the business.
• The company is subject to litigation arising in the ordinary course of business.

Future Outlook

The company expects to grow its retail channel through product launches and enhancements, and to source additional reinsurance partners to diversify its flow reinsurance channel. The company also expects to grow its institutional channel by engaging in pension group annuity transactions and programmatic issuances of funding agreements.

Industry Context

The report provides insights into Athene's performance within the broader context of the retirement services market, highlighting its position as a leading provider of annuities and its strategies for navigating the competitive landscape.

Related Party Transactions

• Substantially all of our investments are managed by Apollo.
• We have an amended and restated cooperation agreement with Athora.
• We have an equity investment in Atlas, an asset-backed specialty lender, through our investment in AAA.
• We have an investment in Apollo Rose II (B) (Apollo Rose).
• We have various investments in MidCap Financial including an investment through AAA, senior unsecured notes and redeemable preferred stock.
• We have investments in Skylign, a leading aviation finance group focused on aviation lending and leasing, both directly through notes issued by PK AirFinance, a subsidiary of Skylign, and indirectly through AAA.
• We have an agreement pursuant to which we may invest up to $2.875 billion in funds managed by Apollo entities (Strategic Partnership).
• We have a minority equity investment in VA Capital, which was $178 million and $178 million as of March 31, 2025 and December 31, 2024, respectively, that is included in related party investment funds on the condensed consolidated balance sheets and accounted for as an equity method investment.
• We invest in Wheels indirectly through our investment in AAA.
• ALRe directly owns 37% of the economic interests in ACRA 1 and all of ACRA 1s voting interests, with ADIP I, a series of funds managed by Apollo, owning the remaining 63% of the economic interests.
• AHL has an unsecured revolving promissory note with AGM which allows AGM to borrow funds from AHL.
• AHL has an unsecured revolving promissory note with AGM which allows AHL to borrow funds from AGM.

Stakeholder Impact

• The decrease in net income may negatively impact shareholder returns.
• Policyholders may be affected by changes in crediting rates and product offerings.
• Employees may be affected by changes in the company's financial performance and strategic direction.

Key Dates

Keywords

net investment income, investment gains, financial results, reinsurance, annuities, Athene, capital