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TPG(TPG) - 2025 Q2 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements This section outlines the nature and inherent risks of forward-looking statements within the report, emphasizing potential material differences in actual results - The report contains forward-looking statements identifiable by words like "anticipates," "intends," "plans," and similar references to future periods, or by forecasts/projections. These statements are based on current expectations and assumptions and are subject to inherent uncertainties, risks, and changes in circumstances, which could cause actual results to differ materially8 - Important factors that could cause actual results to differ include the inability to recognize anticipated benefits from acquisitions, challenges in managing growth and executing business plans, and regional, national, or global political, economic, business, competitive, market, and regulatory conditions and uncertainties8 Website and Social Media Disclosure TPG Inc. utilizes its official website and social media as key channels for disseminating material company information to investors - TPG Inc. uses its official website (https://www.tpg.com) and various social media accounts (LinkedIn, X, Vimeo, YouTube, Instagram) as channels for distributing company information, which may be deemed material. Investors are advised to monitor these channels in addition to press releases, SEC filings, and public conference calls9 Terms Used in This Report This section defines essential terminology used throughout the Form 10-Q report to ensure consistent understanding - This section defines key terms used throughout the Form 10-Q report to ensure clarity and consistent understanding. Definitions include 'TPG,' 'Angelo Gordon' (now TPG Angelo Gordon), 'Class A common stock,' 'Class B common stock,' 'Common Unit,' 'Exchange Act,' 'Excluded Assets,' 'Founders,' 'IPO,' 'nonvoting Class A common stock,' 'our funds,' 'Reorganization,' 'Sunset,' 'Tax Receivable Agreement,' and various TPG entity names1214 Part I. Financial Information This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements of TPG Inc. for the periods ended June 30, 2025, and December 31, 2024 (for statements of financial condition) or June 30, 2025 and 2024 (for statements of operations, changes in equity, and cash flows). It includes the balance sheet, income statement, equity changes, cash flow statement, and detailed notes explaining accounting policies, acquisitions, investments, debt, taxes, and related party transactions Condensed Consolidated Statements of Financial Condition (unaudited) This statement provides a snapshot of the company's assets, liabilities, and equity at specific reporting dates Condensed Consolidated Statements of Financial Condition (unaudited) (dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :------------------ | | Assets | | | | Cash and cash equivalents | $1,112,027 | $808,017 | | Investments | $7,932,744 | $7,503,281 | | Total assets | $11,966,315 | $10,535,109 | | Liabilities and Equity | | | | Debt obligations | $1,610,589 | $1,281,984 | | Accrued performance allocation compensation | $4,507,026 | $4,376,523 | | Total liabilities | $8,406,859 | $6,943,120 | | Total equity | $3,559,456 | $3,591,989 | | Total liabilities and equity | $11,966,315 | $10,535,109 | - Total assets increased by $1,431,206 thousand (13.6%) from December 31, 2024, to June 30, 2025, primarily driven by increases in investments and deferred tax assets17 - Total liabilities increased by $1,463,739 thousand (21.1%) over the same period, mainly due to higher debt obligations, due to affiliates, and operating lease liabilities17 Condensed Consolidated Statements of Operations (unaudited) This statement details the company's revenues, expenses, and net income or loss over specific reporting periods Condensed Consolidated Statements of Operations (unaudited) (dollars in thousands) | 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 | $920,537 | $744,194 | $1,955,413 | $1,568,265 | | Total expenses | $890,131 | $776,546 | $1,837,991 | $1,612,943 | | Net income (loss) | $30,111 | $(57,578) | $117,939 | $(66,584) | | Net income (loss) attributable to TPG Inc. | $14,941 | $(13,977) | $40,334 | $1,542 | | Basic EPS | $0.03 | $(0.15) | $0.10 | $(0.08) | | Diluted EPS | $(0.05) | $(0.19) | $(0.05) | $(0.29) | - Total revenues increased by $176,343 thousand (23.7%) for the three months ended June 30, 2025, compared to the same period in 2024, and by $387,148 thousand (24.7%) for the six months ended June 30, 2025, compared to 202421 - Net income attributable to TPG Inc. significantly improved, turning from a loss of $(13,977) thousand in Q2 2024 to a profit of $14,941 thousand in Q2 2025, and from $1,542 thousand in H1 2024 to $40,334 thousand in H1 202521 Condensed Consolidated Statements of Changes in Equity (unaudited) This statement outlines the changes in the company's equity components over specific reporting periods Condensed Consolidated Statements of Changes in Equity (unaudited) (dollars in thousands) | Metric | Balance at Dec 31, 2024 | Net Income | Equity-based Compensation | Dividends/Distributions | Exchange of Common Units | Balance at Jun 30, 2025 | | :--------------------------- | :---------------------- | :--------- | :------------------------ | :---------------------- | :----------------------- | :---------------------- | | Total TPG Inc. Equity | $784,101 | $40,334 | $110,578 | $(120,717) | $46,730 | $991,875 | | Total Non-Controlling Interests | $2,807,888 | $77,605 | $294,298 | $(440,614) | — | $2,567,581 | | Total Equity | $3,591,989 | $117,939 | $404,876 | $(561,331) | $46,730 | $3,559,456 | - Total TPG Inc. Equity increased from $784,101 thousand at December 31, 2024, to $991,875 thousand at June 30, 2025, driven by net income, equity-based compensation, and common unit exchanges, partially offset by dividends/distributions31 - Non-controlling interests decreased from $2,807,888 thousand to $2,567,581 thousand, primarily due to distributions and equity reallocations, partially offset by net income and equity-based compensation31 Condensed Consolidated Statements of Cash Flows (unaudited) This statement categorizes cash inflows and outflows from operating, investing, and financing activities over specific reporting periods Condensed Consolidated Statements of Cash Flows (unaudited) (dollars in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $584,055 | $651,288 | | Net cash used in investing activities | $(9,431) | $(32,449) | | Net cash used in financing activities | $(270,616) | $(163,017) | | Net change in cash, cash equivalents and restricted cash | $304,008 | $455,822 | | Cash, cash equivalents and restricted cash, end of period | $1,125,200 | $1,134,193 | - Net cash provided by operating activities decreased by $67,233 thousand (10.3%) in H1 2025 compared to H1 2024, primarily due to changes in operating assets and liabilities, despite higher net income39 - Net cash used in financing activities increased significantly from $(163,017) thousand in H1 2024 to $(270,616) thousand in H1 2025, mainly due to higher dividends/distributions and withholding taxes on equity awards, partially offset by debt proceeds39 Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and additional information supporting the condensed consolidated financial statements 1. Organization and Summary of Significant Accounting Policies This section describes the company's structure and the key accounting principles applied in preparing its financial statements - TPG Inc. is a global alternative asset manager, consolidating management companies, general partners of pooled investment entities, and variable interest entities (VIEs) where it is the primary beneficiary. As of June 30, 2025, TPG Inc. held approximately 39% of the outstanding Common Units of the TPG Operating Group414244 - The financial statements are prepared in accordance with U.S. GAAP, requiring management estimates and assumptions. The Company assesses entities for consolidation under either the VIE model or the voting interest entity (VOE) model, consolidating VIEs where it is the primary beneficiary and VOEs where it controls through a majority voting interest434546475051 - Investments are generally recorded at fair value, with specific accounting treatments for equity method investments (performance allocations, capital interests), investments held to maturity (amortized cost), and investments held for sale (fair value option)5253555964 Revenues This section details the composition and changes in the company's revenue streams, including management fees and performance allocations Revenues (in thousands) | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Management fees | $452,531 | $413,344 | $871,482 | $820,761 | | Transaction fees | $34,613 | $37,112 | $82,067 | $73,298 | | Performance allocations | $335,789 | $200,877 | $786,349 | $490,520 | | Capital interests | $15,674 | $20,517 | $56,535 | $42,650 | | Total revenues | $920,537 | $744,194 | $1,955,413 | $1,568,265 | - Total revenues increased by $176.3 million (23.7%) for the three months ended June 30, 2025, and by $387.1 million (24.7%) for the six months ended June 30, 2025, compared to the respective prior-year periods69 - Performance allocations were a significant driver of revenue growth, increasing by $134.9 million (67%) for the three-month period and $295.8 million (60%) for the six-month period, reflecting strong cumulative fund performance69 Investment Income This section explains the sources and accounting treatment of income derived from the company's investment activities - Investment income includes gains/losses from equity method investments, investments held for sale, and equity investments, as well as interest, dividends, and other income. Income from equity method investments where the fair value option was elected includes realized and unrealized gains/losses from changes in fair value9091939495 Compensation and Benefits This section outlines the components of employee compensation, including cash, equity, and performance-based allocations - Compensation and benefits comprise cash-based compensation (salaries, benefits, cash bonuses), equity-based compensation (measured at grant-date fair value and recognized over service periods), and performance allocation compensation (portion of performance allocations allocated to employees and advisors)969798 - Performance allocation compensation and accrued performance allocation compensation are recognized in conjunction with the related performance allocations, with reversals occurring if performance allocations are reversed98 Net Income (Loss) Per Share of Class A Common Stock This section details the calculation of basic and diluted earnings per share for Class A common stock - Basic EPS is calculated by dividing net income (loss) attributable to TPG Inc. by weighted-average Class A common stock outstanding. Diluted EPS reflects the impact of all dilutive securities, including unvested restricted stock units (treasury stock method) and TPG Operating Group partnership units (if-converted method)99101 Fair Value Measurement This section describes the methodology and hierarchy used to measure the fair value of financial instruments - The Company uses a fair value hierarchy (Level I, II, III) to prioritize inputs for financial assets and liabilities. Level I uses unadjusted quoted prices in active markets, Level II uses observable inputs other than Level I, and Level III uses unobservable inputs requiring significant judgment103105106107 Fair Value of Level III Financial Instruments (in thousands) | Instrument | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :----------------------------------- | :------------------------- | :--------------------------- | | Assets | | | | Investments held for sale and other | $178,023 | $121,995 | | Liabilities | | | | Aggregate Annual Cash Holdback Amount | $91,717 | $107,991 | | Earnout Payment | $40,902 | $32,769 | | Total Level III Liabilities | $132,619 | $140,760 | Business Combinations, Goodwill and Intangible Assets This section explains the accounting for acquisitions, goodwill, and other intangible assets, including impairment considerations - Business combinations are accounted for using the acquisition method, allocating purchase price to acquired assets and assumed liabilities at fair value. Goodwill represents the excess of consideration transferred over net assets acquired and is reviewed for impairment annually114117 - Intangible assets primarily consist of future performance allocations and acquired investor relationships, amortized over estimated useful lives (2-20 years). No impairment losses were recognized on intangible assets or goodwill during the three and six months ended June 30, 2025 and 2024118159164 Intangible Assets, Net (in thousands) | Intangible Asset Type | June 30, 2025 Net Carrying Value | December 31, 2024 Net Carrying Value | | :----------------------------------- | :------------------------------- | :--------------------------------- | | Contractual performance fee allocations | $196,832 | $220,282 | | Management contracts | $229,065 | $248,320 | | Technology | $26,833 | $32,583 | | Investor relationships | $16,667 | $17,708 | | Trade name | $10,803 | $12,212 | | Other intangible assets | $1,032 | $2,602 | | Total intangible assets, net | $481,232 | $533,707 | Operating Leases This section details the company's operating lease arrangements, including liabilities, right-of-use assets, and associated costs - Operating lease liabilities are recognized at the commencement date based on the present value of lease payments. ROU assets represent the right to use the underlying asset. The Company's leases primarily consist of real estate, with terms ranging from one to 16 years, and some include extension options119122 Operating Lease Costs (in thousands) | Lease Cost Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $22,378 | $11,828 | $44,924 | $23,939 | | Short-term lease costs | $371 | $274 | $583 | $489 | | Variable lease cost | $2,575 | $2,596 | $5,656 | $5,570 | | Sublease income | $(595) | $(364) | $(1,176) | $(1,292) | | Total lease cost | $24,729 | $14,334 | $49,987 | $28,706 | Income Taxes This section outlines the company's income tax treatment and policies, including deferred tax assets and liabilities - TPG Inc. is treated as a corporation for U.S. federal and state income tax purposes and is subject to income taxes on its allocable share of taxable income from the TPG Operating Group partnerships129185 - Deferred tax assets and liabilities are recognized for temporary differences between financial statement and tax bases. As of June 30, 2025, net deferred tax assets were $899.8 million, with a valuation allowance of $113.5 million, primarily related to the investment in TPG Operating Group130186188 - The Tax Receivable Agreement liability increased to $717.6 million as of June 30, 2025, from $331.3 million at December 31, 2024, due to exchanges of Common Units for Class A common stock189 - The effective tax rate was 23.5% for Q2 2025 (vs. -63.6% in Q2 2024) and 11.7% for H1 2025 (vs. -67.3% in H1 2024), deviating from the statutory rate due to non-controlling interests, equity-based compensation effects, and local income taxes190 Recent Accounting Pronouncements This section discusses recently issued accounting standards and their potential impact on the company's financial reporting - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for the Company after December 15, 2026, requiring more detailed expense information. ASU 2024-01 (Profits Interest and Similar Awards) was adopted on January 1, 2025, with no material impact. ASU 2023-09 (Income Tax Disclosures) is effective for the 2025 Annual Report, requiring expanded income tax rate reconciliation and jurisdictional disclosures135136137 3. Acquisition This section provides details on the company's recent acquisition, including consideration and accounting treatment - On July 1, 2025, TPG Inc. completed the acquisition of Peppertree Capital Management, Inc. (the "Peppertree Transaction"). The closing consideration included an estimated $237.9 million in cash, 5,372,330 Common Units of TPG Operating Group (with equal Class B common stock), 274,300 restricted stock units, and 2,913,939 shares of nonvoting Class A common stock138 - An earnout payment of up to $300.0 million is contingent upon Peppertree achieving certain fee-related revenue and fundraising targets, payable in cash, Common Units, or a combination138 - The acquisition will be accounted for using the acquisition method (ASC 805) in the financial statements as of September 30, 2025, with the analysis currently ongoing139 4. Investments This section details the composition and valuation of the company's investment portfolio and related gains or losses Investments (in thousands) | Investment Type | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :------------------ | | Equity method - performance allocations | $6,089,273 | $5,958,079 | | Equity method - capital interests | $1,563,346 | $1,284,255 | | Loan held for sale | — | $47,880 | | Investments held to maturity, at amortized cost | $89,769 | $78,941 | | Investments held for sale and other | $178,023 | $121,995 | | Equity method - other | $12,333 | $12,003 | | Equity investments | — | $128 | | Total investments | $7,932,744 | $7,503,281 | - Total investments increased by $429,463 thousand (5.7%) from December 31, 2024, to June 30, 2025, primarily driven by increases in equity method - capital interests and investments held for sale and other141 Net Gains (Losses) from Investment Activities (in thousands) | Investment Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net gains (losses) of investments held for sale and other | — | $408 | $(2,572) | $408 | | Net losses of equity method investments, fair value option | — | $(13,076) | — | $(18,560) | | Net losses of equity method investments - other | $(997) | $(828) | $(523) | $(944) | | Net gains (losses) from equity investments | $206 | $(3,156) | $217 | $(2,754) | | Total net losses from investment activities | $(791) | $(16,652) | $(2,878) | $(21,850) | 7. Variable Interest Entities This section explains the company's involvement with and consolidation of variable interest entities - TPG consolidates Variable Interest Entities (VIEs) where it is the primary beneficiary, meaning it has the power to direct activities and the obligation to absorb losses or right to receive benefits. The assets of consolidated VIEs can only be used to satisfy their own obligations, with no recourse to TPG Inc165166 - For non-consolidated VIEs, TPG's maximum exposure to loss was $4,207,670 thousand as of June 30, 2025, and $3,795,649 thousand as of December 31, 2024. Cumulative performance allocations of $6.1 billion (June 30, 2025) and $6.0 billion (December 31, 2024) are subject to reversal in case of future losses168 - The Company also has variable interests in RemainCo (a non-consolidated VIE) through an administrative services agreement, earning an annual administration fee of 1% of RemainCo's net asset value170171 8. Debt Obligations This section details the company's outstanding debt, including terms, carrying values, and changes over the period Debt Obligations (in thousands) | Debt Type | Maturity Date | June 30, 2025 Carrying Value | December 31, 2024 Carrying Value | | :----------------------------------- | :------------ | :----------------------------- | :--------------------------------- | | Senior Unsecured Revolving Credit Facility | May 2030 | $380,000 | — | | Senior Notes | March 2034 | $594,375 | $594,051 | | Subordinated Notes | March 2064 | $390,185 | $390,058 | | Secured Notes - Tranche A | June 2038 | $196,807 | $196,683 | | Secured Notes - Tranche B | June 2038 | $49,222 | $49,192 | | 364-Day Revolving Credit Facility | April 2026 | — | $52,000 | | Subordinated Credit Facility | August 2026 | — | — | | Total debt obligations | | $1,610,589 | $1,281,984 | - Total debt obligations increased by $328,605 thousand (25.6%) from December 31, 2024, to June 30, 2025, primarily due to borrowings under the Senior Unsecured Revolving Credit Facility177 - Interest expense incurred was $24.1 million for Q2 2025 (vs. $19.5 million in Q2 2024) and $46.5 million for H1 2025 (vs. $36.6 million in H1 2024), reflecting increased borrowings182 9. Income Taxes This section provides detailed information on the company's income tax position, including deferred taxes and effective tax rates - TPG Inc. is taxed as a corporation for U.S. federal and state income tax purposes. Net deferred tax assets were $899.8 million as of June 30, 2025, primarily from excess income tax basis in the TPG Operating Group due to the Reorganization and Common Unit exchanges185186 - A valuation allowance of $113.5 million was recognized as of June 30, 2025, related to the portion of deferred tax assets not expected to be realized. The Tax Receivable Agreement liability increased by $402.2 million during H1 2025 to $717.6 million188189 - The effective tax rate for H1 2025 was 11.7%, a significant improvement from (67.3)% in H1 2024, influenced by non-controlling interests and equity-based compensation tax effects190 10. Related Party Transactions This section discloses transactions and balances with affiliated entities, partners, and employees Due From and Due To Affiliates (in thousands) | Affiliate Type | Due From Affiliates (June 30, 2025) | Due From Affiliates (Dec 31, 2024) | Due To Affiliates (June 30, 2025) | Due To Affiliates (Dec 31, 2024) | | :--------------------------- | :---------------------------------- | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Portfolio companies | $59,625 | $55,914 | $9,564 | $10,731 | | Partners and employees | $2,322 | $2,657 | $489,212 | $373,452 | | Other related entities | $53,579 | $47,606 | $82,146 | $23,715 | | Unconsolidated VIEs | $272,219 | $340,835 | $53,939 | $57,239 | | Total | $387,745 | $447,012 | $634,861 | $465,137 | - Due to affiliates increased by $169,724 thousand (36.5%) from December 31, 2024, to June 30, 2025, primarily driven by an increase in the Tax Receivable Agreement liability related to partners and employees196198 - Investment professionals and other individuals made $100.4 million in investments in TPG funds during H1 2025, up from $59.1 million in H1 2024199 11. Operating Leases This section provides further details on operating lease costs, cash flows, and lease terms Operating Lease Costs and Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Total lease cost | $49,987 | $28,706 | | Cash paid for amounts included in the measurement of lease liabilities | $28,739 | $18,170 | | Right-of-use assets obtained in exchange for new operating lease liabilities | $393,699 | — | - Total lease cost increased by $21,281 thousand (74.1%) for H1 2025 compared to H1 2024, primarily due to the commencement of the New York office lease in 2025206 - The weighted-average remaining lease term as of June 30, 2025, was 12.5 years, with a weighted-average discount rate of 5.60%206 12. Commitments and Contingencies This section outlines the company's unfunded investment commitments, potential clawback obligations, and legal proceedings - TPG had unfunded investment commitments of $554.2 million to its managed funds and other strategic investments as of June 30, 2025211 - Clawback provisions exist in fund governing agreements. As of June 30, 2025, if all investments were liquidated at current fair value, a net clawback of $2.2 million would occur. If all remaining investments were deemed worthless, the potential clawback would be $2,340.5 million212213 - The Company is involved in various legal proceedings, including ongoing lawsuits related to a 2005-2007 investment in TIM Hellas. While most New York cases have been dismissed, appeals are pending, and new claims have been filed. The Company believes these lawsuits are without merit215219221222 13. Net Income (Loss) Per Class A Common Share This section presents the detailed calculation of basic and diluted earnings per share for Class A common stock Net Income (Loss) 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 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to TPG Inc. | $14,941 | $(13,977) | $40,334 | $1,542 | | Basic EPS | $0.03 | $(0.15) | $0.10 | $(0.08) | | Diluted EPS | $(0.05) | $(0.19) | $(0.05) | $(0.29) | | Weighted-average shares of Class A common stock outstanding (Basic) | 133,404,634 | 101,690,961 | 125,450,638 | 95,402,371 | | Weighted-average shares of Class A common stock outstanding (Diluted) | 370,142,783 | 364,765,098 | 369,753,038 | 364,558,007 | - Basic EPS improved to $0.03 in Q2 2025 from $(0.15) in Q2 2024, and to $0.10 in H1 2025 from $(0.08) in H1 2024. Diluted EPS remained negative, at $(0.05) in H1 2025, but improved from $(0.29) in H1 2024230 - The Company uses the two-class method for EPS calculation, treating unvested share-based payment awards with nonforfeitable dividend rights as participating securities. Dilutive effect of TPG Operating Group partnership units is determined using the if-converted method226227 14. Equity-Based Compensation This section describes the company's equity incentive plans, award types, and associated compensation expenses - TPG Inc. grants various equity awards under its Omnibus Equity Incentive Plan, including Ordinary Service Awards, Special Purpose Service Awards (e.g., IPO Executive Service Awards, CEO Service Award), and Market and Performance Condition Awards (e.g., IPO Executive Market Condition Awards, CEO Market Conditions Award)232235236237239240244245246248 Total Restricted Stock Units Compensation Expense (in millions) | Award Type | Units Outstanding (June 30, 2025) | H1 2025 Compensation Expense | H1 2024 Compensation Expense | | :----------------------------------- | :-------------------------------- | :--------------------------- | :--------------------------- | | Ordinary Service Awards | 9.7 | $86.9 | $42.3 | | Ordinary Performance Condition Awards | 1.0 | $6.1 | $(1.7) | | Special Purpose Service Awards | 11.5 | $62.7 | $67.8 | | Special Purpose Market Condition Awards | 3.7 | $17.2 | $13.0 | | Total Restricted Stock Units | 25.9 | $172.9 | $121.4 | - Total unrecognized compensation expense related to unvested Service Awards was approximately $643.1 million as of June 30, 2025, expected to be recognized over a weighted average remaining service period of 2.9 years243 - In conjunction with the TPG Angelo Gordon acquisition, 43.8 million unvested Common Units were granted to former Angelo Gordon partners, vesting over five years and participating in distributions259 15. Equity This section details the company's capital structure, including common stock classes, outstanding shares, and dividend policies - TPG Inc. has three classes of common stock: Class A (one vote, dividends), nonvoting Class A (no voting, convertible), and Class B (ten votes, no dividends). As of June 30, 2025, 144,596,915 Class A shares and 224,858,284 Class B shares were outstanding272 Quarterly Dividends per Class A Common Share | Date Declared | Dividend per Class A Common Share | | :--------------------------- | :-------------------------------- | | May 8, 2024 | $0.41 | | August 6, 2024 | $0.42 | | November 4, 2024 | $0.38 | | February 11, 2025 | $0.53 | | May 7, 2025 | $0.41 | | August 6, 2025 | $0.59 | - During H1 2025, 30,786,354 Common Units were exchanged for an equal number of Class A common stock shares, leading to an increase in Class A shares and cancellation of Class B shares276 16. Subsequent Events This section discloses significant events that occurred after the reporting period but before the financial statements were issued - No additional events requiring recognition or disclosure have occurred since June 30, 2025, other than those already noted in the footnotes to the Condensed Consolidated Financial Statements (e.g., Peppertree acquisition, debt borrowings/repayments)278 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides a comprehensive discussion and analysis of TPG Inc.'s financial condition and results of operations for the three and six months ended June 30, 2025, compared to the same periods in 2024. It covers the company's business overview, market trends, key financial and non-GAAP measures, operating metrics, liquidity, and capital resources Overview of Business This section provides a high-level description of TPG's global alternative asset management business and investment platforms - TPG is a leading global alternative asset manager with $261.3 billion in Assets Under Management (AUM) as of June 30, 2025. The firm offers a broad range of investment strategies across private equity, credit, and real estate, structured into six multi-strategy investment platforms: Capital, Growth, Impact, TPG Angelo Gordon, Real Estate, and Market Solutions281282284 AUM by Platform (as of June 30, 2025, in billions) | Platform | AUM | | :----------------- | :---------- | | Capital | $76.2 | | Growth | $29.8 | | Impact | $28.9 | | TPG Angelo Gordon Credit | $80.2 | | TPG Angelo Gordon Real Estate | $18.7 | | Real Estate | $18.2 | | Market Solutions | $9.3 | - The Capital platform focuses on large-scale, control-oriented private equity investments across geographies and sectors, with $76.2 billion in AUM. The Growth platform, with $29.8 billion in AUM, targets growth equity and middle market investments287292293 - The Impact platform, with $28.9 billion in AUM, aims for competitive financial returns and measurable societal benefits. TPG Angelo Gordon (Credit and Real Estate) manages $80.2 billion and $18.7 billion respectively, spanning private and tradable credit and opportunistic real estate investments302303309316 - The Real Estate platform, with $18.2 billion in AUM, pursues systematic real estate investments. The Market Solutions platform, with $9.3 billion in AUM, leverages the TPG ecosystem for differentiated products, including GP-led secondaries and the newly acquired Peppertree business specializing in wireless communication towers322328333 Trends Affecting our Business This section discusses macroeconomic, market, and regulatory trends influencing the company's business operations and financial performance - Global markets experienced significant volatility in Q2 2025 due to trade policy uncertainty, Middle East conflicts, and better-than-expected economic data. Equities were particularly volatile, with the S&P 500, Nasdaq, and Dow Jones Industrial Average gaining 10.6%, 17.7%, and 5.0% respectively338339 - Inflation continued to moderate towards the Federal Reserve's 2.0% target, with U.S. CPI rising 2.3% (April) and 2.4% (May) year-over-year. The U.S. employment picture remained robust, with unemployment rates around 4.1%-4.2%340 - The Federal Reserve maintained the federal funds rate at 4.25%-4.50%. The U.S. Treasury yield curve steepened, reflecting concerns over the budget deficit and inflationary pressures. Corporate credit markets (U.S. and European high yield) generated positive performance341342343 - The Company is evaluating potential impacts from financial, regulatory, and other proposals by the current Administration and Congress, as well as the recently enacted One Big Beautiful Bill Act (OBBBA)344 Key Financial Measures (U.S. GAAP) This section analyzes the company's financial performance based on U.S. GAAP measures, including revenues, expenses, and net income - TPG Inc. consolidates financial results of TPG Inc., TPG Operating Group, and its consolidated subsidiaries, management companies, general partners of funds, and VIEs where it is the primary beneficiary. Consolidation impacts financial statement presentation by reflecting accounts on a gross basis, with third-party allocations shown as non-controlling interests347348 Consolidated Results of Operations (in thousands) | 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 | $920,537 | $744,194 | $1,955,413 | $1,568,265 | | Total expenses | $890,131 | $776,546 | $1,837,991 | $1,612,943 | | Net income (loss) attributable to TPG Inc. | $14,941 | $(13,977) | $40,334 | $1,542 | | Basic EPS | $0.03 | $(0.15) | $0.10 | $(0.08) | | Diluted EPS | $(0.05) | $(0.19) | $(0.05) | $(0.29) | - Total revenues increased by $176.3 million (23.7%) in Q2 2025 and $387.1 million (24.7%) in H1 2025, primarily driven by higher performance allocations and management fees361395 - Net income attributable to TPG Inc. improved significantly, reaching $14.9 million in Q2 2025 (from a loss of $14.0 million in Q2 2024) and $40.3 million in H1 2025 (from $1.5 million in H1 2024)360 - Total expenses increased by $113.6 million (14.6%) in Q2 2025 and $225.0 million (13.9%) in H1 2025, mainly due to higher performance allocation compensation and cash-based compensation360 Non-GAAP Financial Measures This section presents and reconciles non-GAAP financial metrics used by management to evaluate performance and distributable earnings - TPG uses non-GAAP measures like Distributable Earnings (DE), After-Tax Distributable Earnings (After-tax DE), and Fee-Related Earnings (FRE) to assess performance and amounts available for distributions. These measures adjust U.S. GAAP net income by excluding unrealized performance allocations, unrealized investment income, equity-based compensation, and amortization, among other items436438439 Fee-Related Earnings (FRE) and Distributable Earnings (DE) (in thousands) | 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 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Fee-Related Revenues | $495,119 | $458,996 | $971,383 | $910,204 | | Fee-Related Expenses | $275,602 | $257,732 | $570,304 | $526,569 | | Fee-Related Earnings | $219,517 | $201,264 | $401,079 | $383,635 | | Distributable Earnings | $278,476 | $220,759 | $476,255 | $409,765 | | After-Tax Distributable Earnings | $268,290 | $206,639 | $455,026 | $387,264 | - Fee-Related Earnings (FRE) increased by $18.3 million (9.1%) in Q2 2025 and $17.4 million (4.5%) in H1 2025, driven by higher fee-related revenues, partially offset by increased fee-related expenses445446470 - Distributable Earnings (DE) increased by $57.7 million (26.1%) in Q2 2025 and $66.5 million (16.2%) in H1 2025, primarily due to higher realized performance allocations445468492 Operating Metrics This section provides key operational statistics such as Assets Under Management, Fee-Earning AUM, and capital raised - Assets Under Management (AUM) increased by $10.7 billion in Q2 2025 and $15.5 billion in H1 2025, reaching $261.3 billion as of June 30, 2025. This growth was driven by capital raised and increases in investment value, partially offset by realizations500504505 Assets Under Management (AUM) by Platform (in millions) | Platform | June 30, 2025 | June 30, 2024 | | :----------------- | :------------ | :------------ | | Capital | $76,245 | $71,758 | | Growth | $29,771 | $26,670 | | Impact | $28,894 | $19,350 | | TPG Angelo Gordon Credit | $80,161 | $67,486 | | TPG Angelo Gordon Real Estate | $18,749 | $18,250 | | Real Estate | $18,239 | $17,322 | | Market Solutions | $9,272 | $8,138 | | Total AUM | $261,331 | $228,974 | - Fee-Earning AUM (FAUM) increased to $146.4 billion as of June 30, 2025, from $141.3 billion at December 31, 2024, primarily due to fee-earning capital raised and deployment, partially offset by realizations and reductions in fee base508512514 - Net Accrued Performance, representing unrealized and undistributed performance allocations, totaled $1,007 million as of June 30, 2025, up from $974 million at December 31, 2024516 - Capital raised totaled $11.3 billion in Q2 2025 and $17.2 billion in H1 2025, driven by fundraising activities across Growth, Impact, TPG AG Credit, and Market Solutions platforms527528 - Available Capital, representing unfunded commitments, reached $62.5 billion as of June 30, 2025, indicating significant capacity for future investments530 Liquidity and Capital Resources This section discusses the company's cash position, borrowing capacity, and primary liquidity needs and contractual obligations - As of June 30, 2025, TPG's total liquidity was $2,812.0 million, comprising $1,112.0 million in cash and cash equivalents (excluding restricted cash) and $1,700.0 million in incremental borrowing capacity across its credit facilities549 - The Senior Unsecured Revolving Credit Facility was amended in May and June 2025, extending its maturity to May 1, 2030, and increasing its size to $1.75 billion. $380.0 million was borrowed in H1 2025, and an additional $250.0 million in July 2025 for the Peppertree acquisition552 - Primary liquidity needs include working capital, operating expenses, debt service, funding new strategies and capital commitments, Tax Receivable Agreement payments, earnouts, dividends, and managing risk retention for CLOs567 Contractual Obligations (in thousands) | Obligation Type | Total | Remainder of 2025 | 2026 | 2027 | 2028 | 2029 | 2030 and Thereafter | | :--------------------------- | :---------- | :---------------- | :--- | :--- | :--- | :--- | :-------------------- | | Debt obligations | $1,630,000 | — | — | — | — | — | $1,630,000 | | Interest on debt obligations | $1,764,100 | $48,477 | $96,783 | $96,783 | $101,840 | $106,783 | $1,313,434 | | Capital commitments | $554,238 | $554,238 | — | — | — | — | — | | Operating lease obligations | $912,892 | $27,901 | $(766) | $82,555 | $87,388 | $85,085 | $630,729 | | Repurchase agreements | $88,923 | $16,224 | $16,957 | $24,860 | $30,882 | — | — | | Total contractual obligations | $4,950,153 | $646,840 | $112,974 | $204,198 | $220,110 | $191,868 | $3,574,163 | Supplemental Guarantor Financial Information This section provides summarized financial data for the Obligor Group, which guarantees certain debt obligations - The Obligor Group (Notes Issuer and Guarantors) provides full and unconditional guarantees for the 2064 Subordinated Notes and 2034 Senior Notes. Its ability to service debt depends on the results and cash flows of its consolidated subsidiaries, as it has no independent means of generating revenue584585 Summarized Obligor Group Financial Information (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :------------------ | | Assets, less receivables from non-guarantor subsidiaries | $914,135 | $448,271 | | Due from non-guarantor subsidiaries | $244,445 | $173,709 | | Liabilities, less payables to non-guarantor subsidiaries | $1,538,235 | $1,265,061 | | Net loss from Obligor Group's revenues and expenses (H1 2025) | $(92,333) | N/A | Off-Balance Sheet Arrangements This section confirms the absence of any material off-balance sheet arrangements as defined by regulatory requirements - The Company has not entered into any off-balance sheet arrangements as defined in Regulation S-K588 Critical Accounting Estimates This section reiterates the company's critical accounting estimates and the judgments involved in financial reporting - There have been no material changes to the Company's critical accounting estimates disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024. The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts, which are regularly assessed589 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section addresses TPG Inc.'s exposure to market risks, primarily related to its role as an investment advisor or general partner to its TPG funds and the impact of movements in the underlying fair value of their investments - The Company's exposure to market risks primarily stems from its role as an investment advisor or general partner to its TPG funds and the fluctuations in the fair value of their underlying investments590 - There was no material change in the Company's market risks during the three months ended June 30, 2025590 Item 4. Controls and Procedures This section details the evaluation of TPG Inc.'s disclosure controls and procedures and reports on any changes in internal control over financial reporting - Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and concluded they were effective593 - Disclosure controls are designed to ensure timely recording, processing, summarization, and reporting of information required in SEC filings591 - There has been no material change in the Company's internal control over financial reporting during the quarter ended June 30, 2025594 Part II. Other Information This part includes disclosures on legal proceedings, risk factors, equity sales, and other miscellaneous information Item 1. Legal Proceedings This section provides an update on TPG Inc.'s legal proceedings and claims incidental to its business operations, including regulatory proceedings - TPG Inc. is involved in litigation and claims incidental to its business, including regulatory proceedings. The Company is not currently subject to any pending legal proceedings expected to have a material impact on its Condensed Consolidated Financial Statements597 - However, due to the inherent unpredictability of such proceedings, an adverse outcome in certain matters could materially affect TPG's financial results in any particular period597 Item 1A. Risk Factors This section refers to the comprehensive discussion of potential risks and uncertainties affecting TPG Inc.'s business, as detailed in its Annual Report on Form 10-K - For a discussion of potential risks and uncertainties, readers are directed to 'Item 1A.—Risk Factors' in the Company's Annual Report on Form 10-K for the year ended December 31, 2024598 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports on any unregistered sales of equity securities and the use of proceeds from such sales - There were no unregistered sales of equity securities and use of proceeds to report for the period599 Item 3. Defaults Upon Senior Securities This section addresses any defaults upon senior securities - This item is not applicable for the reporting period, indicating no defaults upon senior securities600 Item 4. Mine Safety Disclosures This section provides disclosures related to mine safety - This item is not applicable for the reporting period, indicating no mine safety disclosures601 Item 5. Other Information This section includes any other information required to be disclosed that is not covered by other items - This item is not applicable for the reporting period, indicating no other information to disclose602 Item 6. Exhibits This section lists all exhibits filed or furnished as part of the Form 10-Q report, including corporate governance documents, credit agreements, compensation policies, and certifications - The exhibits include the Restated Certificate of Incorporation, Amended and Restated Bylaws, Seventh Amended and Restated Credit Agreement, Accession Agreement, Independent Director Compensation Policy, Non-Employee Director Deferral Plan, List of Notes Issuer and Guarantor Subsidiaries, and various certifications (CEO, CFO)603 Signatures This section contains the required signatures for the Form 10-Q report, certifying its submission - The report was signed on August 6, 2025, by Jack Weingart, Chief Financial Officer (Principal Financial Officer and Authorized Signatory), pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934605606