Apollo Management(US:APO)2025-08-07 11:32PART I - FINANCIAL INFORMATION Details the company's unaudited condensed consolidated financial statements and management's analysis of financial condition and operations Financial Statements Details unaudited condensed consolidated financial statements, highlighting asset growth, revenue decline, and reduced net income due to investment-related gains Condensed Consolidated Statements of Financial Condition (Unaudited) | (In millions) | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $419,550 | $377,895 | | Total Asset Management Assets | $15,060 | $15,256 | | Total Retirement Services Assets | $404,490 | $362,639 | | Total Liabilities | $385,689 | $346,915 | | Total Asset Management Liabilities | $10,167 | $9,968 | | Total Retirement Services Liabilities | $375,522 | $336,947 | | Total Equity | $33,861 | $30,964 | Condensed Consolidated Statements of Operations (Unaudited) | (In millions, except per share data) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Total Revenues | $12,362 | $13,058 | | Asset Management Revenues | $2,153 | $2,089 | | Retirement Services Revenues | $10,209 | $10,969 | | Total Expenses | $10,060 | $9,475 | | Net income (loss) | $1,780 | $2,942 | | Net income (loss) attributable to common stockholders | $1,023 | $2,231 | | Net income (loss) per share - Diluted | $1.67 | $3.64 | Condensed Consolidated Statements of Cash Flows (Unaudited) | (In millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,274 | $1,403 | | Net cash used in investing activities | $(36,517) | $(31,085) | | Net cash provided by financing activities | $32,089 | $29,976 | | Net increase (decrease) in cash | $(2,141) | $292 | Note 1. Organization Describes Apollo's structure as an asset manager and retirement services provider, including the pending acquisition of Bridge Investment Group - Apollo operates as a high-growth, global alternative asset manager with a focus on credit and equity strategies, and a retirement services provider through its Athene business34 - On February 23, 2025, Apollo agreed to acquire Bridge Investment Group Holdings Inc. in an all-stock transaction, with an expected closing in Q3 2025, subject to regulatory approvals35 Note 3. Investments Details total investments, primarily in Retirement Services, with significant growth in AFS securities and mortgage loans driving increased net investment income Total Investments by Segment (in millions) | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Asset Management | $5,885 | $6,086 | | Retirement Services | $329,599 | $291,167 | | Total Investments | $335,484 | $297,253 | Retirement Services AFS Securities Breakdown (June 30, 2025, in millions) | Asset Type | Amortized Cost | Fair Value | | :--- | :--- | :--- | | Corporate | $103,597 | $94,563 | | CLO | $30,620 | $31,388 | | ABS | $27,405 | $27,362 | | CMBS | $13,854 | $13,500 | | RMBS | $10,716 | $10,322 | | U.S. government and agencies | $10,117 | $9,023 | | Total AFS (ex. related parties) | $199,637 | $188,750 | Retirement Services Net Investment Income (in millions) | | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | AFS securities | $5,541 | $4,477 | | Mortgage loans | $2,385 | $1,704 | | Total Net Investment Income | $9,117 | $7,380 | Note 4. Derivatives Outlines the company's use of derivatives for risk management, noting substantial notional values and significant derivative liabilities, mainly from embedded derivatives Derivative Instruments Summary (June 30, 2025, in millions) | Derivative Type | Notional Amount | Fair Value - Assets | Fair Value - Liabilities | | :--- | :--- | :--- | :--- | | Derivatives designated as hedges | | $927 | $1,316 | | Foreign currency hedges | $23,125 | $683 | $1,013 | | Interest rate swaps | $33,805 | $244 | $288 | | Derivatives not designated as hedges | | $2,753 | $15,909 | | Equity options | $91,009 | $5,069 | $146 | | Foreign currency swaps/forwards | $58,206 | $697 | $3,175 | | Embedded derivatives | N/A | $(3,221) | $12,336 | | Total Derivatives | | $3,680 | $17,225 | - Athene uses equity indexed options to economically hedge its fixed indexed annuity products, which guarantee principal return and credit interest based on market index performance84 Note 5. Variable Interest Entities Explains the consolidation of VIEs and details maximum loss exposures from unconsolidated VIEs for both Asset Management and Retirement Services segments - The assets of consolidated VIEs are ring-fenced and not available to creditors of the parent company, and investors in these VIEs have no recourse to Apollo's assets95 Maximum Loss Exposure from Unconsolidated VIEs (in millions) | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Asset Management | $342 | $614 | | Retirement Services | $135,756 | $124,525 | Note 6. Fair Value Presents the fair value hierarchy for financial assets and liabilities, with Level 2 and Level 3 assets comprising the largest portions Fair Value Hierarchy of Financial Assets (June 30, 2025, in millions) | | Level 1 | Level 2 | Level 3 | NAV | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Asset Management | $3,110 | $116 | $3,055 | $340 | $6,621 | | Retirement Services | $22,254 | $179,225 | $121,035 | $18,905 | $341,419 | | Total Assets | $25,364 | $179,341 | $124,090 | $19,245 | $348,040 | Fair Value Hierarchy of Financial Liabilities (June 30, 2025, in millions) | | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | Asset Management | $— | $30 | $61 | $91 | | Retirement Services | $10 | $4,879 | $19,468 | $24,357 | | Total Liabilities | $10 | $4,909 | $19,529 | $24,448 | Note 11. Debt Details total debt outstanding across segments, including recent issuances by Athene Holding Ltd. and available credit facilities Total Debt Outstanding (June 30, 2025, in millions) | Segment | Outstanding Balance | Fair Value | | :--- | :--- | :--- | | Asset Management | $4,280 | $4,308 | | Retirement Services | $7,864 | $7,507 | | Total Debt | $12,144 | $11,815 | - In Q2 2025, Athene Holding Ltd. (AHL) issued $1.0 billion of 6.625% Senior Notes due 2055 and $600 million of 6.875% Fixed-Rate Reset Junior Subordinated Debentures due 2055214216 - The company maintains several credit and liquidity facilities, including a $1.25 billion facility for AGM and a combined $3.85 billion in facilities for AHL, all of which were undrawn as of June 30, 2025217219222223 Note 12. Equity-Based Compensation Reports equity-based compensation expense, unrecognized RSU expense, and new RSU awards for the period Equity-Based Compensation Expense (in millions) | Period | Expense | | :--- | :--- | | Three months ended June 30, 2025 | $166 | | Three months ended June 30, 2024 | $153 | | Six months ended June 30, 2025 | $315 | | Six months ended June 30, 2024 | $342 | - As of June 30, 2025, there was $840 million of estimated unrecognized compensation expense related to unvested RSU awards, expected to be recognized over a weighted-average period of 2.1 years228 Note 13. Equity Outlines share repurchase activities, dividend declarations, and details on outstanding mandatory convertible preferred stock - A new share repurchase program was approved on February 8, 2024, authorizing up to $3.0 billion in common stock repurchases242 - During the six months ended June 30, 2025, the company repurchased 1,392,000 shares of common stock for $193 million in open market transactions243 Dividends Declared per Share of Common Stock | Declaration Date | Dividend per Share | Payment Date | | :--- | :--- | :--- | | February 4, 2025 | $0.46 | February 28, 2025 | | May 2, 2025 | $0.51 | May 30, 2025 | Note 15. Related Parties Details significant transactions and balances with related parties, including investments in Athora and Atlas, and interests in strategic capital vehicles - Apollo, through ISGI, provides investment advisory services to Athora. AAM has committed up to an additional $2.0 billion to Athora, and Athene has committed up to an additional $2.5 billion, in connection with Athora's agreement to acquire a UK insurer274283 - Athene has a significant investment in Atlas, an asset-backed specialty lender, holding $4.6 billion of AFS securities issued by Atlas or its affiliates as of June 30, 2025284 - Athene's subsidiaries, ACRA 1 and ACRA 2, are partially owned by ADIP I and ADIP II, respectively, which are funds managed by Apollo. Athene's subsidiary ALRe holds a 37% economic interest in both ACRA vehicles291 Note 16. Commitments and Contingencies Summarizes unfunded capital and investment commitments, contingent performance allocation obligations, and ongoing shareholder derivative litigation - Athene had commitments to make investments totaling $33.3 billion as of June 30, 2025, primarily for capital contributions to investment funds and mortgage loans293 - The company has a contingent obligation related to performance allocations. If all existing fund investments became worthless, approximately $5.6 billion of cumulative revenues recognized through June 30, 2025 could be reversed294 - The company is involved in a shareholder derivative complaint challenging the $570 million in payments made to Former Managing Partners and Contributing Partners following the merger with Athene. A Special Litigation Committee is investigating the matter, with proceedings stayed until October 7, 2025313 Note 17. Segments Describes the company's three reportable segments and their performance, with Segment Income growing due to increased FRE and SRE - The company's three reportable segments are Asset Management, Retirement Services, and Principal Investing315 - The key performance measure used by management is Segment Income, which is the sum of Fee Related Earnings (FRE) from Asset Management, Spread Related Earnings (SRE) from Retirement Services, and Principal Investing Income (PII)317321322323 Segment Income (in millions) | | 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 Earnings | $627 | $516 | $1,186 | $978 | | Spread Related Earnings | $821 | $710 | $1,625 | $1,527 | | Principal Investing Income | $47 | $33 | $61 | $54 | | Segment Income | $1,495 | $1,259 | $2,872 | $2,559 | Unaudited Supplemental Presentation of Statements of Financial Condition Provides a supplemental disaggregation of the consolidated balance sheet, separating Apollo's core operations from consolidated funds and VIEs Supplemental Statement of Financial Condition (June 30, 2025, in millions) | | Apollo Global Management, Inc. and Consolidated Subsidiaries | Consolidated Funds and VIEs | Eliminations | Consolidated | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $409,429 | $28,240 | $(18,119) | $419,550 | | Total Liabilities | $383,170 | $3,060 | $(541) | $385,689 | | Total Equity | $26,259 | $25,180 | $(17,578) | $33,861 | Management's Discussion and Analysis of Financial Condition and Results of Operations Analyzes financial condition and results across segments, highlighting AUM growth, market conditions, and the company's strong liquidity position - As of June 30, 2025, Apollo had total AUM of $840 billion, with $690 billion in Credit and $150 billion in Equity strategies339341342 - Management noted strong equity market performance in Q2 2025, with the S&P 500 increasing by 10.6%. U.S. inflation was reported at 2.7% as of June 30, 2025, and the Federal Reserve's benchmark interest rate target remained at 4.25% to 4.50%353354 - The company maintains a strong liquidity position with $12.7 billion of unrestricted cash and cash equivalents and $5.1 billion available from credit facilities as of June 30, 2025588 Results of Operations Summarizes consolidated results, noting decreased revenues, increased expenses, and a significant drop in net income due to investment-related swings Consolidated Results of Operations Summary (in millions) | | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Total Revenues | $12,362 | $13,058 | | Asset Management | $2,153 | $2,089 | | Retirement Services | $10,209 | $10,969 | | Total Expenses | $10,060 | $9,475 | | Net Income Attributable to Common Stockholders | $1,023 | $2,231 | Segment Analysis Analyzes performance across Asset Management, Retirement Services, and Principal Investing segments, highlighting growth in FRE, SRE, and PII Segment Performance Summary (Six months ended June 30, 2025 vs 2024) | (In millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Fee Related Earnings (FRE) | $1,186 | $978 | 21.3% | | Spread Related Earnings (SRE) | $1,625 | $1,527 | 6.4% | | Principal Investing Income (PII) | $61 | $54 | 13.0% | Asset Management Operating Metrics Presents key Asset Management operating metrics, including AUM growth, fee-generating AUM, and available 'dry powder' for investment AUM Roll-Forward (Dec 31, 2024 to June 30, 2025, in billions) | | Beginning AUM | Net Flows | Realizations | Market Activity | Ending AUM | | :--- | :--- | :--- | :--- | :--- | :--- | | Total AUM | $751.0 | $70.6 | $(8.9) | $26.9 | $839.6 | Fee-Generating AUM Roll-Forward (Dec 31, 2024 to June 30, 2025, in billions) | | Beginning FG-AUM | Net Flows | Realizations | Market Activity | Ending FG-AUM | | :--- | :--- | :--- | :--- | :--- | :--- | | Fee-Generating AUM | $568.7 | $53.7 | $(3.6) | $19.6 | $638.3 | - As of June 30, 2025, the company had $72 billion of 'dry powder' available for investment525 Liquidity and Capital Resources Assesses the company's liquidity and capital resources, detailing cash position, credit facilities, and cash flow activities - The company had $12.7 billion of unrestricted cash and cash equivalents and $5.1 billion available from credit facilities as of June 30, 2025588 Cash Flow Summary (Six months ended June 30, in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Operating Activities | $2,274 | $1,403 | | Investing Activities | $(36,517) | $(31,085) | | Financing Activities | $32,089 | $29,976 | Quantitative and Qualitative Disclosures about Market Risk Affirms no material changes to market risk exposures, outlining primary risks for Asset Management and Retirement Services segments - There have been no material changes to the company's market risk exposures from those previously disclosed in the 2024 Annual Report672 Controls and Procedures Confirms the effectiveness of disclosure controls and procedures, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the period covered by the report676 - No material changes to internal control over financial reporting occurred during the most recent quarter677 PART II - OTHER INFORMATION Provides additional information on legal proceedings, risk factors, equity sales, and other miscellaneous disclosures Legal Proceedings Refers to Note 16 of the financial statements for a comprehensive summary of ongoing legal proceedings - For a summary of legal proceedings, the report incorporates by reference Note 16 to the condensed consolidated financial statements680 Risk Factors Confirms no material changes to the risk factors previously disclosed in the 2024 Annual Report - There have been no material changes to the risk factors disclosed in the 2024 Annual Report681 Unregistered Sales of Equity Securities and Use of Proceeds Details unregistered equity sales and share repurchase activities, including shares repurchased and remaining authorization Purchases of Equity Securities by the Issuer (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | | April 2025 | 160 | $149.27 | $1,050,330,659 | | May 2025 | 112,051 | $139.72 | $1,034,674,472 | | June 2025 | 0 | $— | $1,034,674,472 | | Total | 112,211 | | | Other Items (3, 4, 5, 6) Addresses non-applicable items, confirms no Rule 10b5-1 trading arrangement changes, and lists filed exhibits - Item 3 (Defaults upon Senior Securities) and Item 4 (Mine Safety Disclosures) are not applicable686687 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025688