Apollo Global Management, Inc. Q2 FY26 Earnings Analysis

- Origination volumes showed strong momentum, reaching $71 billion in the quarter with expectations for an even stronger Q2, potentially approaching the record $97 billion (Page 2). - Pipeline is broader and deeper than previous totals, indicating sustained origination growth (Page 7). - Capital formation was very strong at $115 billion in the quarter, including $50 billion organic inflows; Asset Management contributed $30 billion, Athene $20 billion (Page 2, 7). - Reaffirmed 26% outlook for fee-related earnings (FRE) growth, 20% for annual FRE growth, and 10% for share-related earnings (SRE) growth (Page 2). - Direct lending pricing around SOFR +450 bps; opportunities remain for good quality loans with robust business models (Page 16). - Retail annuities volumes are expected around base levels, with competition easing somewhat and April showing strength (Page 16). - Long-term wealth opportunities remain unchanged with demand growing structurally globally (Page 7).

- Fee-Related Earnings (FRE) growth outlook reaffirmed at 20%+ for the year. - Spread Related Earnings (SRE) growth guided at 10%, assuming an 11% alternative investments return. - Expect incremental management fee growth from Athora's PIK acquisition as balance sheet is repositioned. - Maintaining $120 million to $125 million spread range for the year, aligned with prior guidance. - Quarterly momentum strong with record FRE of $728 million (up 30% YoY) and total adjusted net income of $1.2 billion. - Earnings per share (EPS) growth reflected in declared dividend increase of 10% year-on-year. - Strategic focus on defensive investing with capital deployment aimed at protecting capital and positioning for growth. - Continued strong organic growth across core businesses expected to drive earnings expansion.

- Apollo is actively involved in financing next-generation AI infrastructure with transactions totaling over $8 billion, supporting data center acquisitions and leases for large investment-grade clients. - AI infrastructure CapEx investment among the five primary hyperscalers is estimated to exceed $800 billion this year and nearly $1 trillion next year. - Apollo focuses on "picks and shovels" investments in AI infrastructure, including data centers, power, and chips, as part of a broader global industrial renaissance (energy transition, defense, advanced manufacturing). - They emphasize investment-grade private credit opportunities in the industrial renaissance sectors and are methodical in underwriting, aiming for structures with principal protection. - Europe is expected to be a strong region for investment-grade private markets, with Apollo engaging with quasi-governmental entities on major infrastructure projects like nuclear plants and grid upgrades. - Apollo highlights that new technology enables them to redeploy margin and people, deciding quarterly between growth reinvestment or additional margin capture.

- In Q1, the firm generated $115 billion of total inflows, including $65 billion from the PIC acquisition of Athora. - Of the $50 billion organic inflows, Asset Management delivered $30 billion and Athene added $20 billion. - Hybrid value funds saw strong interest, closing a $1.5 billion round in Q1, reaching a final close of $6.5 billion, with about one-third from new investors. - Athora closed $3.5 billion of new equity commitments with strong institutional support. - The Global Wealth business raised $4 billion in a challenging environment, with consistent inflows in semi-liquid and drawdown offerings. - The firm is accessing diverse demand sources including fixed income replacement, the wealth channel, third-party insurance, traditional asset managers, and DC 401(k) proposals. - There is ongoing momentum in capital formation supported by broad investor interest in credit and equity strategies.

- The current origination for the quarter was $71 billion, characterized as particularly high quality. - The pipeline for origination is broader and deeper than the totality of what has been done to date. - There is an expectation that Q2 origination will be even stronger, with the potential to approach the record quarter of $97 billion. - Capital formation in the quarter totaled $115 billion, including $65 billion from the Pension Investment Corp. transaction. - Organic inflows were $50 billion, with $30 billion from Asset Management and $20 billion from Athene. - The institutional investor demand remains high despite a volatile backdrop, with active engagement globally. - Funding agreement flows in Retirement Services were resilient despite spread dynamics; however, no public funding agreements were done in Q1 due to spreads. - Retail annuity flows have been light but showed improvement in April, with competition easing somewhat.