PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=9&type=section&id=Item%201.%20Financial%20Statements) The company presents its unaudited condensed consolidated financial statements and accompanying notes for the period ended June 30, 2025 [Condensed Consolidated Financial Statements](index=9&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Total assets grew to $27.3 billion, with Q2 2025 revenues reaching $1.35 billion and net income of $111.8 million Condensed Consolidated Statements of Financial Condition (in thousands) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$27,264,941** | **$24,884,308** | | Goodwill | $3,436,192 | $1,162,636 | | Intangible assets, net | $2,220,065 | $975,828 | | **Total Liabilities** | **$18,425,558** | **$17,485,922** | | Debt obligations | $3,675,154 | $2,558,914 | | **Total Equity** | **$8,257,198** | **$6,824,190** | Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$1,350,128** | **$788,682** | **$2,438,933** | **$1,496,045** | | Management fees | $900,622 | $721,681 | $1,717,609 | $1,409,373 | | Carried interest allocation | $323,901 | $(51,167) | $483,909 | $(83,645) | | **Total Expenses** | **$1,137,578** | **$564,544** | **$2,151,906** | **$1,103,037** | | **Net Income** | **$225,980** | **$276,251** | **$349,481** | **$480,066** | | Net income attributable to common stockholders | $111,750 | $94,938 | $133,607 | $167,965 | | **Diluted EPS** | **$0.46** | **$0.43** | **$0.48** | **$0.76** | Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,409,904 | $1,142,217 | | Net cash used in investing activities | $(1,767,608) | $(63,309) | | Net cash used in financing activities | $(1,744,928) | $(1,125,531) | | **Net change in cash and cash equivalents** | **$(998,320)** | **$(63,829)** | [Notes to the Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the $3.9 billion GCP acquisition, an upsized credit facility, and subsequent dividend declarations - On March 1, 2025, the Company completed the acquisition of GCP International for a total consideration of **$3.9 billion**, consisting of **$1.79 billion in cash**, **$1.66 billion in equity**, and **$465 million in contingent consideration**[49](index=49&type=chunk)[50](index=50&type=chunk) GCP Acquisition Purchase Price Allocation (in thousands) | Assets Acquired / Liabilities Assumed | Fair Value | | :--- | :--- | | Total identifiable assets acquired | $1,844,322 | | Accounts payable, accrued expenses and other liabilities | $203,969 | | **Net identifiable assets acquired** | **$1,640,353** | | **Goodwill** | **$2,270,422** | | **Net assets acquired** | **$3,910,775** | - In April 2025, the company amended its revolving Credit Facility, extending the maturity to April 2030 and increasing commitments to **$1.84 billion** from $1.40 billion[93](index=93&type=chunk) - The company has contingent liabilities related to the GCP acquisition, including an earnout for the data center business (up to **$1.0 billion**) and the Japan business (up to **$0.5 billion**)[112](index=112&type=chunk) - Subsequent to the quarter end, in July 2025, the board declared a quarterly dividend of **$1.12 per share** for Class A and non-voting common stock and **$0.84375 per share** for Series B preferred stock[207](index=207&type=chunk)[208](index=208&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 performance, the GCP acquisition's impact, AUM growth, and segment results [Trends Affecting Our Business](index=56&type=section&id=Trends%20Affecting%20Our%20Business) Global markets performed well in Q2 2025 despite volatility, with the company's portfolio well-positioned - Global equity and debt markets experienced volatility but largely performed well during Q2 2025, supported by positive trade developments and resilient macroeconomic indicators[213](index=213&type=chunk) - Commercial real estate markets showed mixed performance; European markets began to recover due to interest rate cuts, while U.S. markets saw a slight decline[214](index=214&type=chunk)[215](index=215&type=chunk) - Private equity transaction volume slowed during the quarter due to macroeconomic and global trade uncertainty, leading to a heightened focus on disciplined underwriting[216](index=216&type=chunk) - As of June 30, 2025, approximately **85% of the company's debt assets** and **52% of its total assets** were floating rate instruments, positioning the portfolio for a fluctuating interest rate environment[217](index=217&type=chunk) [Managing Business Performance](index=57&type=section&id=Managing%20Business%20Performance) Key operating metrics show significant growth, with total AUM reaching $572.4 billion and FPAUM at $349.6 billion AUM and FPAUM Growth (in billions) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total AUM | $572.4 | $447.2 | | Fee Paying AUM (FPAUM) | $349.6 | $275.8 | - As of June 30, 2025, AUM not yet paying fees was **$86.8 billion**, which could generate approximately **$822.7 million** in potential incremental annual management fees[238](index=238&type=chunk) - Incentive Eligible AUM (IEAUM) was **$421.9 billion** and Incentive Generating AUM (IGAUM) was **$229.9 billion** as of June 30, 2025[240](index=240&type=chunk) [Consolidated Results of Operations](index=67&type=section&id=Consolidated%20Results%20of%20Operations) Q2 2025 revenues grew 71% to $1.35 billion, while expenses rose 102%, driven by the GCP acquisition Consolidated Revenue Breakdown (in thousands) | Revenue Type | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Management fees | $900,622 | $721,681 | 25% | | Carried interest allocation | $323,901 | $(51,167) | NM | | Administrative, transaction and other fees | $91,563 | $40,973 | 123% | | **Total revenues** | **$1,350,128** | **$788,682** | **71%** | Consolidated Expense Breakdown (in thousands) | Expense Type | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Compensation and benefits | $643,709 | $419,858 | 53% | | Performance related compensation | $234,706 | $(28,985) | NM | | General, administrative and other expenses | $232,156 | $169,432 | 37% | | **Total expenses** | **$1,137,578** | **$564,544** | **102%** | - The increase in Compensation and Benefits for Q2 2025 was significantly impacted by the GCP acquisition, which included **$40.8 million in equity-based compensation** and **$20.8 million in other cash compensation costs**[279](index=279&type=chunk) - The increase in General, Administrative and Other Expenses was also driven by the GCP acquisition, which contributed **$54.7 million** in Q2 2025[285](index=285&type=chunk) [Segment Analysis](index=76&type=section&id=Segment%20Analysis) Segment performance varied, with strong FRE growth in Real Assets and Credit, leading to a 26% overall FRE increase Fee Related Earnings (FRE) by Segment - Q2 2025 vs Q2 2024 (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Credit Group | $426,310 | $368,281 | 16% | | Real Assets Group | $113,645 | $51,643 | 120% | | Private Equity Group | $9,846 | $14,454 | (32)% | | Secondaries Group | $50,537 | $33,641 | 50% | | **Total FRE** | **$409,111** | **$324,516** | **26%** | Realized Income (RI) by Segment - Q2 2025 vs Q2 2024 (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Credit Group | $435,494 | $408,205 | 7% | | Real Assets Group | $97,648 | $41,069 | 138% | | Private Equity Group | $12,858 | $11,392 | 13% | | Secondaries Group | $48,715 | $26,544 | 84% | | **Total RI** | **$397,814** | **$363,158** | **10%** | [Liquidity and Capital Resources](index=109&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is sufficient with $509.7 million in cash and $725.0 million available under the credit facility - As of June 30, 2025, the company had **$509.7 million in cash** and cash equivalents and **$725.0 million available** under its Credit Facility, with management believing these sources are sufficient[432](index=432&type=chunk) Company Cash Flow Summary (in thousands) | Activity | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,164,527 | $879,653 | | Net cash used in investing activities | $(1,767,608) | $(63,309) | | Net cash used in financing activities | $(173,078) | $(878,127) | - The Tax Receivable Agreement (TRA) liability balance was **$508.6 million** as of June 30, 2025, with payments of **$8.1 million** for the first six months of 2025[453](index=453&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=113&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes in market risk exposures are reported for the six months ended June 30, 2025 - There have been **no material changes** in the company's market risks for the six months ended June 30, 2025[458](index=458&type=chunk)[459](index=459&type=chunk) [Item 4. Controls and Procedures](index=113&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025 - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were **effective at a reasonable assurance level**[461](index=461&type=chunk) - There were **no changes in internal control** over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, these controls[462](index=462&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=114&type=section&id=Item%201.%20Legal%20Proceedings) The company is not subject to any legal proceedings expected to have a material adverse effect - The company and its affiliates are subject to legal proceedings and regulatory investigations from time to time, but management does not expect any current matters to have a **material impact** on its financial results[463](index=463&type=chunk) [Item 1A. Risk Factors](index=114&type=section&id=Item%201A.%20Risk%20Factors) The report refers to the risk factors detailed in the company's 2024 Annual Report on Form 10-K - The report directs investors to the risk factors detailed in the company's **Annual Report on Form 10-K for the year ended December 31, 2024**, for a comprehensive understanding of potential risks[464](index=464&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=114&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities were conducted during the reporting period - **No unregistered sales of equity securities** occurred during the period covered by this report[465](index=465&type=chunk) [Item 5. Other Information](index=115&type=section&id=Item%205.%20Other%20Information) Certain executives and directors entered into Rule 10b5-1 trading plans during the second quarter of 2025 Rule 10b5-1 Trading Plans Adopted in Q2 2025 | Name and Title | Plan Date | Maximum Shares That May Be Sold | Plan Expiration Date | | :--- | :--- | :--- | :--- | | Antony Ressler, Executive Chairman & Co-Founder | May 21, 2025 | 2,000,000 | February 13, 2026 | | Naseem Sagati Aghili, General Counsel and Corporate Secretary | June 11, 2025 | 42,000 plus shares from vested RSUs | March 1, 2026 | [Item 6. Exhibits](index=116&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including key agreement amendments and certifications - Key exhibits filed with this report include **Amendment No. 13 to the Credit Agreement**, the Sixth Amended and Restated Exchange Agreement, and the Sixth Amended and Restated Limited Partnership Agreement of Ares Holdings L.P[475](index=475&type=chunk)

Financial Performance - The company reported a GAAP net loss of $11 million, equivalent to a loss of $0.20 per diluted common share[12] - Distributable Earnings (Loss) amounted to $(28) million, or $(0.51) per diluted common share[12] - Excluding realized losses of $33 million from the exit of an office (life sciences) loan, Distributable Earnings were $5 million, or $0.09 per diluted common share[12] - The book value stood at $524 million, or $9.52 per common share ($11.69 excluding CECL reserve)[12] Portfolio & CECL Reserve - The CECL reserve was $119 million, representing 9% of the outstanding principal balance for loans held for investment[12] - The CECL reserve decreased by $20 million in 2Q 2025 due to the exit of an office (life sciences) loan, loan repayments, and other loan-specific attributes[12] - 94% of CECL reserves relates to risk rated 4 and 5 loans[45] - 89% of CECL reserves relates to office and residential / condo loans[45] Strategic Initiatives & Balance Sheet - Office loans were reduced by $61 million QoQ to $524 million, a decrease of 10% QoQ and 30% YoY[12] - Available capital as of June 30, 2025, was $178 million, including $94 million of cash[12] - The company amended and extended a $150 million Morgan Stanley secured funding facility, which includes a $100 million accordion option[12] Dividend - A cash dividend of $0.15 per common share was declared for shareholders for 3Q 2025, equating to an annualized implied dividend yield of 13% to the stock price as of July 31, 2025[12]

Financial Data and Key Metrics Changes - Ares Management reported a quarterly dividend of $1.12 per share, representing a 20% increase compared to the same quarter last year [4] - The company achieved a record management fee of $900 million, reflecting a 24% year-over-year increase [33] - Fee-related earnings (FRE) for the quarter were $409 million, marking a 26% year-over-year growth, with FRE margins at 41.2% [35] Business Line Data and Key Metrics Changes - The total assets under management (AUM) increased to $572 billion, showing a quarter-over-quarter organic growth of 19% on an annualized basis [8] - Fee-paying AUM (FPAUM) rose to $350 billion, representing a quarter-over-quarter organic growth of 17% on an annualized basis [9] - The secondaries business saw a 29% increase in AUM to nearly $34 billion, with $2.5 billion raised during the quarter [16] Market Data and Key Metrics Changes - In the U.S. direct lending market, the company experienced a year-over-year comparable EBITDA growth of 13% with a low loan-to-value ratio of 43% [25] - European direct lending showed strong performance with a loan-to-value ratio of 49% and interest coverage of 2.3x, indicating healthy credit quality [70] - The company raised over $1.3 billion in infrastructure, including $850 million for its first Japan data center development fund [15] Company Strategy and Development Direction - Ares Management is focused on expanding its wealth distribution network, now partnering with over 80 firms globally, a 33% increase year-over-year [19] - The company is optimistic about the growth potential in the data center and digital infrastructure sectors, leveraging its recent GCP acquisition [30] - Ares aims to capitalize on the increasing demand for private credit and alternative investments, particularly in the wealth channel [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business amid market volatility, with strong fundraising and investment performance [7] - The company anticipates a strengthening transaction market environment in the third quarter, supported by lower short-term rates and significant private equity dry powder [28] - Management highlighted the importance of maintaining a balance between capital growth and quality deployment to mitigate risks [60] Other Important Information - The integration of GCP is progressing well, with expected synergies contributing positively to the financial outlook [32] - The company reported a net accrued performance income balance of $1.1 billion, an 8.5% increase from the previous quarter [10] - Ares Management's insurance platform, Aspida, generated over $1.9 billion in new premiums during the quarter, indicating strong demand [22] Q&A Session Summary Question: Discussion on private credit and institutional demands - Management noted that while private credit fundraising has been down sequentially, Ares continues to see institutional appetite for private credit, maintaining fee structures despite market pressures [47][49] Question: Opportunities in alternative investments - Management emphasized their commitment to democratizing access to alternative investments and readiness to offer products as the market opens [56][58] Question: Update on deployment pipelines - Management expressed confidence in the growing pipelines across various business segments, including direct lending and real estate, despite market fluctuations [64] Question: Comparison of European and U.S. direct lending markets - Management indicated that European markets are becoming more attractive due to different rate trajectories, with credit quality remaining stable across both regions [70] Question: Investment in distribution and partnerships - Management confirmed ongoing investments in product development and distribution efforts, particularly in international markets, to drive growth [76][78]

Financial Data and Key Metrics Changes - Ares Management reported a quarterly AUM increase to $572 billion, representing a quarter-over-quarter organic growth of 19% on an annualized basis [7] - The company declared a quarterly dividend of $1.12 per share, a 20% increase compared to the same quarter last year [3] - Management fees reached a record $900 million, reflecting a 24% year-over-year increase [32] - Fee-related earnings (FRE) grew by 26% year-over-year, with FRE margins at 41.2% [34] Business Line Data and Key Metrics Changes - The second quarter deployment in the U.S. was $27 billion, slightly higher than the previous year despite market pauses [8] - The FPAUM increased to $350 billion, representing quarter-over-quarter organic growth of 17% [8] - The secondaries business saw a 29% increase in AUM to nearly $34 billion [15] - The real estate segment raised $2.4 billion in capital during the quarter, primarily from non-traded REITs [12] Market Data and Key Metrics Changes - Approximately 55% of fundraising was from products, with 30% into commingled funds and 25% into SMAs [10] - International demand accounted for more than one-third of year-to-date flows, with strong traction in Europe and Asia [19] - The European direct lending strategy raised over $1.1 billion from new SMAs and $800 million in the wealth channel [12] Company Strategy and Development Direction - Ares Management is focused on scaling its fundraise and expanding its global wealth distribution network, now partnering with over 80 firms globally [19] - The company anticipates significant growth in its data center asset management business and global industrial development [9] - Ares is positioned to capitalize on the growing demand for alternative investments, particularly in the wealth channel [41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the transaction market environment strengthening into the third quarter, supported by lower short-term rates and record amounts of private equity dry powder [27] - The integration of the GCP acquisition is progressing well, with expectations of enhanced fund performance and additional revenue streams [30] - The company remains confident in its ability to generate unique investment opportunities and maintain strong deployment across various market conditions [62] Other Important Information - The net accrued performance income balance increased by 8.5% to $1.1 billion, reflecting strong investment results [9] - Ares anticipates that perpetual capital will continue to represent a significant percentage of AUM growth, providing greater visibility in revenue growth and profitability [23] - The company is experiencing strong demand for its sports media and entertainment strategy, with significant commitments raised [11] Q&A Session Summary Question: Discussion on private credit and institutional demands - Management noted that private credit fundraising has not outpaced other alternative asset classes, but they continue to see institutional appetite for private credit [49] - They emphasized that fee pressure has not been significant, and they maintain a strong position in the market [50] Question: Opportunities in the alternative market - Management expressed enthusiasm for the democratization of alternatives and is prepared to offer products as the market opens [58] Question: Update on deployment pipelines - Management indicated confidence in the growing pipelines across various business segments, including direct lending and real estate [66] Question: Comparison of European and U.S. direct lending markets - Management highlighted that European markets are becoming more attractive due to different rate trajectories and increased investor appetite [70] Question: Retail distribution and international flows - Management confirmed ongoing investments in product development and distribution, with expectations for continued growth in international markets [78]

Financial Performance - GAAP net income attributable to Ares Management Corporation was $137.1 million[1] - After-tax realized income was $367.9 million, with after-tax realized income per share of Class A common stock at $1.03[2] - Fee related earnings reached $409.1 million[2] Assets Under Management (AUM) - Total AUM reached $572.4 billion, a 28% increase year-over-year[9, 32, 35] - Total fee paying AUM was $349.6 billion, a 27% increase year-over-year[23, 32, 35] - Available capital stood at $150.8 billion[3, 23, 46] - AUM not yet paying fees available for future deployment was $86.8 billion, potentially generating $822.7 million in incremental annual management fees[23, 49] Capital Activity - Gross new capital commitments totaled $26.2 billion[23, 31] - Capital deployment amounted to $26.9 billion, including $13.0 billion by drawdown funds[23, 61, 65] Dividends - A quarterly dividend of $1.12 per share was declared for Class A and non-voting common stock[4, 23] - A quarterly dividend of $0.84375 per share was declared for the 6.75% Series B mandatory convertible preferred stock[5, 23]

Core Insights - Ares Management reported a revenue of $1.05 billion for the quarter ended June 2025, reflecting a year-over-year increase of 33.3% [1] - The earnings per share (EPS) for the quarter was $1.03, up from $0.99 in the same quarter last year, although it fell short of the consensus estimate of $1.11, resulting in an EPS surprise of -7.21% [1] Financial Performance - The reported revenue exceeded the Zacks Consensus Estimate of $1.03 billion by 1.41% [1] - The total Assets Under Management (AUM) reached $572.4 billion, surpassing the average estimate of $565.56 billion [4] - Fee-related performance revenues were reported at $16.7 million, below the average estimate of $18.1 million, marking a year-over-year decline of 22.6% [4] - Management fees amounted to $900.29 million, slightly below the average estimate of $913.48 million, but represented a 24% increase year-over-year [4] - Other fees saw a significant increase to $76.12 million, compared to the estimated $35.92 million, reflecting a year-over-year growth of 229.9% [4] Segment Performance - Realized income from the Secondaries Group was $48.72 million, exceeding the average estimate of $40.43 million, with a year-over-year increase of 53.8% [4] - Realized income from the Credit Group was $435.49 million, slightly below the estimate of $475.85 million, with a year-over-year growth of 6.8% [4] - Realized income from the Real Assets Group was reported at $97.65 million, below the average estimate of $109.73 million, but showed a substantial year-over-year increase of 131.3% [4] - Realized income from the Private Equity Group was $12.86 million, below the estimate of $17.95 million, with a year-over-year increase of 24.7% [4] Stock Performance - Ares Management shares returned +4.3% over the past month, outperforming the Zacks S&P 500 composite's +2.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

分组1 - Ares Management reported quarterly earnings of $1.03 per share, missing the Zacks Consensus Estimate of $1.11 per share, but showing an increase from $0.99 per share a year ago, resulting in an earnings surprise of -7.21% [1] - The company posted revenues of $1.05 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.41%, and compared to year-ago revenues of $786.5 million [2] - Ares Management shares have increased approximately 4.8% since the beginning of the year, while the S&P 500 has gained 7.8% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $1.14 on revenues of $1.08 billion, and for the current fiscal year, it is $5.12 on revenues of $4.78 billion [7] - The Zacks Industry Rank for Financial - Investment Management is currently in the top 19% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

[Cover Page & Notices](index=1&type=section&id=Cover%20Page%20%26%20Notices) [Financial Highlights and Statements](index=5&type=section&id=Financial%20Highlights%20and%20Statements) [Second Quarter 2025 Highlights](index=5&type=section&id=Q2%202025%20Highlights) Ares Management reported strong Q2 2025 results, with GAAP net income of $137.1 million and Fee Related Earnings (FRE) of $409.1 million, while Assets Under Management (AUM) grew to $572.4 billion | Metric | Value | | :--- | :--- | | **Financial Results** | | | GAAP Net Income (attributable to ARES) | $137.1 million | | GAAP Diluted EPS | $0.46 | | Fee Related Earnings (FRE) | $409.1 million | | Realized Income (RI) | $397.8 million | | After-tax RI per Share | $1.03 | | **Assets Under Management** | | | Total AUM | $572.4 billion | | Total Fee Paying AUM (FPAUM) | $349.6 billion | | Available Capital | $150.8 billion | | **Capital Activity** | | | Gross Capital Raised | $26.2 billion | | Capital Deployment | $26.9 billion | | **Corporate Actions** | | | Quarterly Dividend per Class A Share | $1.12 | [GAAP Statements of Operations](index=7&type=section&id=GAAP%20Statements%20of%20Operations) For Q2 2025, Ares reported total GAAP revenues of $1.35 billion, a significant increase from $788.7 million in Q2 2024, primarily driven by higher management fees and a positive swing in carried interest allocation | GAAP Metric ($ in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1,350,128 | $788,682 | +71.2% | | Management Fees | $900,622 | $721,681 | +24.8% | | Carried Interest Allocation | $323,901 | $(51,167) | Favorable | | Total Expenses | $1,137,578 | $564,544 | +101.5% | | Net Income Attributable to Ares | $137,062 | $94,938 | +44.4% | | Diluted EPS | $0.46 | $0.43 | +7.0% | [RI and Other Measures Financial Summary](index=9&type=section&id=RI%20and%20Other%20Measures%20Financial%20Summary) On a non-GAAP basis, Fee Related Earnings (FRE) for Q2 2025 grew 26% year-over-year to $409.1 million, while Realized Income (RI) increased by 10% to $397.8 million | Non-GAAP Metric ($ in thousands, except per share) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Management Fees | $900,285 | $726,111 | +24% | | Fee Related Earnings (FRE) | $409,111 | $324,516 | +26% | | Realized Income (RI) | $397,814 | $363,158 | +10% | | After-tax RI per share | $1.03 | $0.99 | +4% | | FRE Margin | 41.2% | 42.1% | -90 bps | [Capital Activity](index=11&type=section&id=Capital%20Activity) [Gross New Capital Commitments](index=11&type=section&id=Gross%20New%20Capital%20Commitments) In Q2 2025, Ares raised $26.2 billion in gross new capital commitments, with the Credit Group contributing the largest share at $18.1 billion - Total gross new capital commitments for Q2 2025 were **$26.2 billion**[14](index=14&type=chunk) | Group | Q2 2025 Gross Commitments ($B) | Key Activities | | :--- | :--- | :--- | | **Credit Group** | **$18.1** | U.S. Direct Lending ($4.6B), BDCs ($5.7B), Opportunistic Credit ($2.8B) | | **Real Assets Group** | **$3.7** | Real Estate debt funds ($1.1B), Japan DC Partners ($0.8B) | | **Secondaries Group** | **$2.5** | Credit Secondaries ($1.2B), Private Equity Secondaries ($1.1B) | | **Other Businesses** | **$1.9** | Additional managed assets from Insurance | | **Total** | **$26.2** | | [Assets Under Management (AUM) Analysis](index=13&type=section&id=Assets%20Under%20Management%20(AUM)%20Analysis) As of June 30, 2025, AUM reached $572.4 billion, up 28% YoY, while Fee Paying AUM (FPAUM) grew 27% to $349.6 billion, driven by strong fundraising, deployment, and the acquisition of GCP International | Metric ($ in billions) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total AUM | $572.4 | $447.2 | +28% | | Total FPAUM | $349.6 | $275.8 | +27% | - Perpetual Capital AUM increased by **43%** year-over-year to **$166.6 billion**, driven by perpetual wealth vehicles (BDCs, APMF), the GCP International acquisition, and insurance assets[28](index=28&type=chunk)[29](index=29&type=chunk) - AUM Not Yet Paying Fees available for future deployment stands at **$86.8 billion**, which could generate approximately **$822.7 million** in potential incremental annual management fees[42](index=42&type=chunk)[44](index=44&type=chunk) - Incentive Eligible AUM grew **17%** YoY to **$303.8 billion**, with **68%** (**$139.1 billion**) of the invested portion currently generating incentives[46](index=46&type=chunk)[47](index=47&type=chunk) [Capital Deployment](index=25&type=section&id=Capital%20Deployment) Ares deployed a total of $26.9 billion in gross capital during Q2 2025, a slight increase from $26.4 billion in Q2 2024, with deployment evenly split between drawdown funds and perpetual capital vehicles - Total gross capital deployment in Q2 2025 was **$26.9 billion**[53](index=53&type=chunk)[54](index=54&type=chunk) | Deployment Source | Q2 2025 ($B) | Q2 2024 ($B) | | :--- | :--- | :--- | | Drawdown Funds | $13.0 | $13.0 | | Perpetual Capital Vehicles | $13.9 | $12.4 | | **Total** | **$26.9** | **$25.4** | - By segment, the Credit group deployed **$20.6 billion**, Real Assets deployed **$3.0 billion**, Secondaries deployed **$1.0 billion**, and Private Equity deployed **$0.8 billion**[54](index=54&type=chunk) [Segment Performance](index=27&type=section&id=Segment%20Performance) [Credit Group](index=27&type=section&id=Credit%20Group) The Credit Group's Fee Related Earnings (FRE) increased 16% YoY to $426.3 million in Q2 2025, driven by a 16% rise in management and other fees, with AUM reaching $377.1 billion | Credit Group Metric ($ in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Management and other fees | $630,503 | $545,145 | +16% | | Fee Related Earnings | $426,310 | $368,281 | +16% | | Realized Income | $435,494 | $408,205 | +7% | | AUM ($ in billions) | $377.1 | $323.1 | +17% | - Gross capital deployment for the quarter was **$20.6 billion**, led by U.S. direct lending (**$11.1B**) and European direct lending (**$3.8B**)[67](index=67&type=chunk) [Real Assets Group](index=29&type=section&id=Real%20Assets%20Group) The Real Assets Group delivered exceptional growth in Q2 2025, with Fee Related Earnings (FRE) surging 120% YoY to $113.6 million and AUM nearly doubling to $129.8 billion, primarily driven by the acquisition of GCP International | Real Assets Group Metric ($ in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Management and other fees | $224,482 | $106,054 | +112% | | Fee Related Earnings | $113,645 | $51,643 | +120% | | Realized Income | $97,648 | $41,069 | +138% | | AUM ($ in billions) | $129.8 | $67.7 | +92% | - The significant increase in fees and earnings was primarily driven by the acquisition of GCP International[76](index=76&type=chunk) [Private Equity Group](index=31&type=section&id=Private%20Equity%20Group) The Private Equity Group's Q2 2025 performance showed mixed results, with a 32% drop in Fee Related Earnings (FRE) to $9.8 million due to lower management fees, offset by a 13% increase in Realized Income to $12.9 million | Private Equity Group Metric ($ in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Management and other fees | $32,201 | $34,019 | -5% | | Fee Related Earnings | $9,846 | $14,454 | -32% | | Realized Income | $12,858 | $11,392 | +13% | | AUM ($ in billions) | $23.8 | $24.6 | -3% | - The decrease in FRE was driven by lower management fees and higher operating expenses, while the increase in RI was due to realized net performance income[82](index=82&type=chunk) [Secondaries Group](index=33&type=section&id=Secondaries%20Group) The Secondaries Group posted strong Q2 2025 results, with Fee Related Earnings (FRE) increasing 50% YoY to $50.5 million and AUM growing 29% to $33.9 billion, fueled by a 40% rise in management fees | Secondaries Group Metric ($ in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Management and other fees | $67,444 | $48,199 | +40% | | Fee Related Earnings | $50,537 | $33,641 | +50% | | Realized Income | $48,715 | $26,544 | +84% | | AUM ($ in billions) | $33.9 | $26.3 | +29% | - Fee growth was primarily driven by capital raised by APMF and commitments to the third infrastructure secondaries fund[89](index=89&type=chunk) [Supplemental Information](index=35&type=section&id=Supplemental%20Information) [Financial Details - Segments](index=37&type=section&id=Financial%20Details%20-%20Segments) This section provides a detailed unconsolidated financial breakdown for Q2 2025 across all segments, highlighting the Credit group as the largest contributor to earnings and the Operations Management Group (OMG) as a significant cost center | Q2 2025 ($ in thousands) | Credit Group | Real Assets Group | Private Equity Group | Secondaries Group | Operations Mgt. Group | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Management Fees** | $617,141 | $175,924 | $31,767 | $61,643 | - | $900,285 | | **Fee Related Earnings** | $426,310 | $113,645 | $9,846 | $50,537 | $(195,991) | $409,111 | | **Realized Income** | $435,494 | $97,648 | $12,858 | $48,715 | $(196,244) | $397,814 | [Balance Sheet and Liquidity](index=45&type=section&id=Balance%20Sheet%20and%20Liquidity) As of June 30, 2025, Ares maintained a strong balance sheet with $1.23 billion in available liquidity and a corporate investment portfolio of $2.3 billion, while net accrued performance income increased to $1.03 billion | Financial Strength ($ in millions) | As of June 30, 2025 | | :--- | :--- | | Available Liquidity | $1,234.7 | | Cash and cash equivalents | $509.7 | | Term debt obligations | $2,560.2 | | Amount drawn on revolving credit facility | $1,115.0 | | Corporate investment portfolio (Unconsolidated) | $2,305.7 | | Net accrued performance income (GAAP) | $1,033.9 | - Net accrued performance income increased from **$957.9 million** at the end of Q4 2024 to **$1,033.9 million** at the end of Q2 2025, driven by **$129.7 million** in net change in unrealized value, offset by **$53.7 million** in net realizations[113](index=113&type=chunk)[115](index=115&type=chunk) [AUM and FPAUM Rollforwards](index=49&type=section&id=AUM%20and%20FPAUM%20Rollforwards) AUM increased by $26.5 billion quarter-over-quarter to $572.4 billion, driven by net new commitments and positive market changes, while FPAUM grew by $14.5 billion primarily due to deployment and new fee-paying commitments | Q2-25 AUM Rollforward ($ in millions) | Credit | Real Assets | Private Equity | Secondaries | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Q1-25 Ending Balance** | **$359,076** | **$124,187** | **$24,727** | **$31,312** | **$6,571** | **$545,873** | | Net new commitments | $18,083 | $3,713 | - | $2,519 | $1,921 | $26,236 | | Distributions/Redemptions | ($5,944) | ($1,850) | ($1,056) | ($200) | ($417) | ($9,467) | | Change in fund value | $9,568 | $4,060 | $114 | $246 | $22 | $14,010 | | **Q2-25 Ending Balance** | **$377,106** | **$129,774** | **$23,766** | **$33,949** | **$7,790** | **$572,385** | | Q2-25 FPAUM Rollforward ($ in millions) | Credit | Real Assets | Private Equity | Secondaries | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Q1-25 Ending Balance** | **$218,231** | **$76,425** | **$11,352** | **$23,470** | **$5,590** | **$335,068** | | Deployment/Subscriptions | $6,973 | $1,287 | $16 | $409 | - | $8,685 | | **Q2-25 Ending Balance** | **$228,153** | **$79,495** | **$10,993** | **$24,535** | **$6,381** | **$349,557** | [Appendix](index=55&type=section&id=Appendix) [Fund Performance Metrics](index=55&type=section&id=Fund%20Performance%20Metrics) This section provides detailed performance data for significant funds across all investment groups, including quarterly, YTD, and since-inception returns for non-drawdown funds, and IRR and MoIC for drawdown funds - Detailed performance metrics are provided for significant funds within the Credit, Real Assets, Private Equity, and Secondaries groups[126](index=126&type=chunk)[133](index=133&type=chunk)[136](index=136&type=chunk)[138](index=138&type=chunk) - For non-drawdown funds like ARCC (U.S. Direct Lending), the since-inception net return is **12.1%**; for drawdown funds like ACOF VI (Corporate Private Equity), the net IRR is **16.0%** and net MoIC is **1.5x**[126](index=126&type=chunk)[136](index=136&type=chunk) [GAAP to Non-GAAP Reconciliation](index=69&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) This section reconciles GAAP Income Before Taxes to the key non-GAAP metrics of Realized Income (RI) and Fee Related Earnings (FRE), detailing major adjustments for non-cash expenses and unrealized gains/losses - Reconciles GAAP Income before taxes (**$286.9M**) to Realized Income (**$397.8M**) and Fee Related Earnings (**$409.1M**) for Q2 2025[154](index=154&type=chunk) - Key reconciling items include adjustments for amortization, depreciation, equity compensation, acquisition-related expenses, and unrealized performance and investment income[154](index=154&type=chunk) [Glossary](index=83&type=section&id=Glossary) The glossary provides definitions for key terms and non-GAAP financial measures used throughout the earnings presentation, including detailed explanations of AUM, FPAUM, FRE, and RI - Defines key non-GAAP metrics used by management, such as Fee Related Earnings (FRE), which assesses core operating performance from recurring revenues, and Realized Income (RI), which evaluates performance excluding unrealized fluctuations[179](index=179&type=chunk)[185](index=185&type=chunk) - Explains the composition of various AUM metrics, including total AUM, Fee Paying AUM (FPAUM), AUM Not Yet Paying Fees, Incentive Eligible AUM (IEAUM), and Perpetual Capital[176](index=176&type=chunk)[179](index=179&type=chunk)[184](index=184&type=chunk)

Core Viewpoint - Analysts forecast Ares Management (ARES) will report quarterly earnings of $1.12 per share, reflecting a year-over-year increase of 13.1%, with revenues expected to reach $1.05 billion, a 33% increase compared to the previous year [1]. Earnings Projections - Over the last 30 days, there has been a downward revision of 0.2% in the consensus EPS estimate for the quarter, indicating a collective reconsideration by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Financial Metrics Forecast - The consensus estimate for 'Financial Details Segments- Other fees' is $35.92 million, indicating a year-over-year change of +55.7% [5]. - The estimate for 'Financial Details Segments- Fee related performance revenues' is $18.87 million, reflecting a decrease of -12.5% from the previous year [5]. - Analysts predict 'Financial Details Segments- Management fees' will reach $918.85 million, showing a year-over-year increase of +26.5% [5]. - 'Financial Details Segments- Performance income-realized' is expected to be $121.20 million, a change of +10.5% from the prior year [6]. FPAUM Rollforward Estimates - The 'FPAUM Rollforward - Ending Balance - Total' is projected to be $350.31 billion, up from $275.85 billion year-over-year [6]. - 'FPAUM Rollforward - Ending Balance - Credit Group' is expected to reach $227.22 billion, compared to $197.09 billion in the same quarter last year [7]. - The estimate for 'FPAUM Rollforward - Ending Balance - Private Equity Group' is $12.94 billion, up from $12.27 billion year-over-year [7]. - 'FPAUM Rollforward - Ending Balance - Real Assets Group' is projected at $78.91 billion, significantly up from $41.62 billion in the previous year [8]. - 'FPAUM Rollforward - Ending Balance - Secondaries Group' is expected to be $24.56 billion, compared to $20.46 billion last year [8]. AUM Rollforward Estimates - The estimated 'AUM Rollforward - Ending Balance - Total' is $566.81 billion, up from $447.23 billion year-over-year [9]. - 'AUM Rollforward - Ending Balance - Private Equity Group' is projected at $26.98 billion, compared to $24.58 billion last year [9]. - The 'AUM Rollforward - Ending Balance - Real Assets Group' is expected to reach $129.38 billion, up from $67.69 billion in the same quarter of the previous year [10]. Stock Performance - Over the past month, Ares Management shares have recorded returns of +8.2%, outperforming the Zacks S&P 500 composite's +3.6% change [11].

Core Viewpoint - Ares Management Corporation (NYSE: ARES) is rated as a Hold for investors focused on capital appreciation and long-term buy-and-hold strategies, reflecting its strong performance since going public in 2014 [1]. Group 1 - Ares Management has experienced significant growth since its IPO in 2014, indicating a robust investment opportunity for long-term investors [1]. - The company is positioned well for capital appreciation, appealing to investors looking for stable, long-term returns [1]. Group 2 - The article does not provide specific financial metrics or performance data for Ares Management, focusing instead on the overall investment strategy and outlook [1].