8-K: Athene Holding Reports Strong Q3 2025 Earnings, Asset Growth

Athene Holding Ltd. announced robust third-quarter 2025 financial results, showcasing significant increases in net income and assets, alongside continued growth in spread related earnings.

Summary

• Net income available to AHL common stockholder for Q3 2025 was $1,223 million, a 143% increase quarter-over-quarter and 111% year-over-year.
• Return on assets (ROA) for Q3 2025 reached 1.17%, up 66 basis points quarter-over-quarter and 50 basis points year-over-year.
• Spread related earnings (SRE) for Q3 2025 were $872 million, growing 6% quarter-over-quarter and 2% year-over-year.
• Total assets as of September 30, 2025, stood at $429,915 million, an 18% increase from December 31, 2024.
• Total AHL stockholders' equity increased to $20,411 million as of September 30, 2025, up 25% from December 31, 2024.
• Gross organic inflows for Q3 2025 were $22,616 million, a 7% increase quarter-over-quarter and 13% year-over-year.
• Net flows for Q3 2025 were $11,978 million, a 14% decrease quarter-over-quarter but a 1% increase year-over-year.
• Net investment income for Q3 2025 was $4,672 million, up 5% quarter-over-quarter and 24% year-over-year.
• The leverage ratio improved to 36.5% as of September 30, 2025, down from 39.7% at December 31, 2024.

Sentiment

Score: 7

Explanation: The Q3 2025 results show strong quarter-over-quarter and year-over-year growth in key profitability metrics like net income and ROA, alongside robust asset and equity expansion. While year-to-date GAAP net income is down, the recent quarter indicates a positive trajectory. The non-GAAP spread related earnings also show consistent growth. Some increases in outflows and cost of funds are noted, but overall financial health and growth drivers appear strong.

Positives

• Net income available to AHL common stockholder for Q3 2025 significantly increased to $1,223 million, up 143% quarter-over-quarter and 111% year-over-year.
• Return on assets (ROA) for Q3 2025 improved to 1.17%, a 66 basis point increase quarter-over-quarter and 50 basis point increase year-over-year.
• Spread related earnings (SRE) for Q3 2025 grew to $872 million, a 6% increase quarter-over-quarter and 2% year-over-year.
• Total assets expanded to $429,915 million as of September 30, 2025, representing an 18% increase from December 31, 2024.
• Total AHL stockholders' equity rose to $20,411 million as of September 30, 2025, a 25% increase from December 31, 2024.
• Gross organic inflows for Q3 2025 were strong at $22,616 million, up 7% quarter-over-quarter and 13% year-over-year.
• Net investment income for Q3 2025 increased to $4,672 million, a 5% rise quarter-over-quarter and 24% year-over-year.
• The leverage ratio decreased to 36.5% as of September 30, 2025, from 39.7% at December 31, 2024, indicating improved financial stability.
• Net invested assets increased by 4% quarter-over-quarter and 18% year-over-year to $286,174 million.
• The credit quality of available-for-sale (AFS) securities remains high, with 97.1% classified as investment grade as of September 30, 2025.

Negatives

• Year-to-date 2025 net income available to AHL common stockholder decreased by 7% to $2,146 million compared to year-to-date 2024.
• Year-to-date 2025 return on assets (ROA) declined by 22 basis points to 0.72% compared to year-to-date 2024.
• Net spread for Q3 2025 decreased by 20 basis points year-over-year to 1.24%, and year-to-date 2025 net spread decreased by 14 basis points to 1.24% compared to year-to-date 2024.
• Premiums revenue for Q3 2025 significantly decreased by 70% year-over-year to $117 million, and year-to-date 2025 premiums also decreased by 70% to $351 million.
• Year-to-date 2025 income before income taxes decreased by 17% to $3,730 million compared to year-to-date 2024.
• Net flows for Q3 2025 decreased by 14% quarter-over-quarter to $11,978 million.
• Gross outflows for Q3 2025 increased significantly by 47% quarter-over-quarter and 30% year-over-year to $10,638 million.
• Maturity-driven, contractual-based outflows for Q3 2025 surged by 131% quarter-over-quarter and 139% year-over-year to $5,525 million.
• Cost of funds for Q3 2025 increased by 8% quarter-over-quarter and 34% year-over-year to $2,661 million.
• Alternative net investment income delta to long-term expectation was $37 million for Q3 2025, indicating performance below the 11% average annual return expectation.

Risks

• The information included in the financial supplement is unaudited and intended for informational purposes only.
• Non-GAAP measures should be considered supplementary to US GAAP results and not viewed as a substitute for corresponding US GAAP measures.
• There is no assurance that management's expected long-term average annual return of 11% for alternative investments will be achieved, and actual results may differ materially.
• A duration mismatch between FIA hedging derivatives and index credit reserves may lead to mismatches for accounting purposes.
• Effective January 1, 2025, new statutory accounting guidance for the principles-based bond definition requires certain debt securities to be accounted for as non-bond debt securities, which, if not designated by the NAIC, are presented as "Non-designated" (though this is not an indication of quality).

Future Outlook

The filing does not provide explicit forward-looking statements or guidance. It notes that there is no assurance that management's expected long-term average annual return for alternative investments will be achieved, and actual results may differ materially. The company undertakes no obligation to update or correct the information.

Industry Context

NA

Comparison to Industry Standards

• The company's financial strength ratings from A.M. Best, S&P Global, Fitch, and Moody's for its key insurance subsidiaries (e.g., Athene Annuity and Life Company, Athene Annuity Re Ltd.) are consistently A+ or A1, indicating strong standing within the insurance industry.
• Athene Holding Ltd.'s credit ratings for senior notes are a-/A-/BBB+/Baa1 and for subordinated notes are NR/BBB/BBB-/Baa2, which are generally considered investment grade by major rating agencies.
• The credit quality of the company's available-for-sale (AFS) securities portfolio shows 97.1% as investment grade by NAIC designation and 96.5% by NRSRO designation as of September 30, 2025, which is a strong credit profile compared to typical industry benchmarks.
• The credit quality of net invested assets also reflects a high proportion of investment-grade holdings, with 96.3% by NAIC designation and 95.4% by NRSRO designation as of September 30, 2025.

Related Party Transactions

• Athene Holding Ltd. (AHL) is a subsidiary of Apollo Global Management, Inc.
• The company has investments in related parties, including Apollo/Athene Dedicated Investment Program (ADIP I) and Apollo/Athene Dedicated Investment Program II (ADIP II), which represent noncontrolling interests in business ceded to Athene Co-Invest Reinsurance Affiliate (ACRA).
• Athene's net ownership percentage of Apollo Aligned Alternatives, L.P. (AAA) was approximately 46% as of September 30, 2025, and December 31, 2024.
• Effective October 1, 2024, ACRA 2 repurchased a portion of its shares held by Athene Life Re Ltd. (ALRe), increasing ADIP II's ownership of economic interests in ACRA 2 to 63%, with ALRe owning the remaining 37%.

Stakeholder Impact

• Shareholders: Positive impact due to significant increases in net income, return on assets, and total stockholders' equity, indicating improved profitability and balance sheet strength.
• Policyholders: The growth in net reserve liabilities to $266,451 million suggests continued expansion of policyholder obligations, while increased outflows indicate policyholder activity.
• Creditors: Improved leverage ratio to 36.5% and strong credit ratings for senior and subordinated notes suggest enhanced creditworthiness and reduced risk.
• Employees: Stock compensation expense is noted as a non-operating expense, indicating ongoing incentive plans.

Key Dates

Recommendation

While Athene Holding Ltd. demonstrated strong Q3 2025 performance with significant increases in net income, ROA, and overall asset growth, the year-to-date GAAP net income remains lower than the previous year. The non-GAAP spread related earnings show consistent positive trends, reflecting the core business's profitability. However, the notable increase in gross and maturity-driven outflows, coupled with a decline in premiums, warrants a cautious approach. The company's strong credit ratings and improved leverage ratio are positives, but the mixed year-to-date GAAP results and increased outflows suggest a 'hold' recommendation until a clearer, sustained positive trend across all key metrics, particularly GAAP profitability on a year-to-date basis, is established.

Keywords

Athene Holding Ltd., Financial Results, Q3 2025, SEC Filing, 8-K, Insurance, Annuities, Investment Income, Spread Related Earnings, Assets, Equity, Inflows, Outflows, GAAP, Non-GAAP, Financial Supplement, Apollo Global Management