Apollo Global Management, Inc. (NYSE: NYSE:APO) Q3 2024 Earnings Report

Apollo Global Management has reported strong performance for Q3 2024, featuring record fee-related earnings (FRE) and near-record spread-related earnings (SRE). The adjusted net income reached $1.1 billion, with ambitious targets for the next five years including growth in FRE and SRE, and a doubling of adjusted net income.

Key Takeaways

• Apollo's FRE reached a record $531 million and SRE was $856 million in Q3 2024.
• The company has set five-year targets for 20% annual FRE growth and 10% SRE growth.
• $62 billion in originations for the quarter, focusing on four major trends for future growth.
• Optimism persists about growth in fundraising and retirement services.
• Jeff Jacobs becomes CEO of Apollo's third-party insurance business, emphasizing its strategic importance.

Company Outlook

• Apollo aims for both FRE and SRE to reach $10 billion by 2029, with adjusted net income doubling to $15 per share.
• Investment in the third-party insurance business is essential for doubling its capacity in the next five years.
• The firm is focused on capitalizing on opportunities in the private investment grade sector.

Bearish Highlights

• A compression in spreads has been noted, currently ranging from 375 to 390 basis points, down from about 410 a year ago.

Bullish Highlights

• Record FRE fueled by credit management fees and diversified origination pipeline.
• The retirement services sector showed robust organic growth with $20 billion this quarter contributing to improved profitability.
• Principal investing income saw benefits from successful monetizations, with a net accrued performance fee balance of $1.4 billion.

Missed Expectations

• No significant misses were reported after earnings discussions.

Q&A Highlights

• CEO Marc Rowan discussed transparency in metrics and touched on retail platform development, focusing on high-net-worth clients and family offices.
• Martin Kelly addressed concerns about rising distribution costs, clarifying that they have not experienced significant margin pressure.

InvestingPro Insights

Detailed insights from InvestingPro highlighted Apollo's strong Q3 2024 performance. The company has a market capitalization of $84.35 billion. The P/E ratio of 15.94 indicates investors are optimistic about Apollo's earnings potential, with revenue for the last twelve months reaching $25.96 billion and a gross profit margin of 37.18%.

InvestingPro noted that Apollo has maintained dividend payments for 14 consecutive years, showcasing financial stability and commitment to shareholder returns. Notably, Apollo's stock is trading near its 52-week high, further signaling investor confidence.

Full Transcript Overview

The earnings conference call featured Operator Noah Gunn, who welcomed participants and discussed the financial performance. Marc Rowan, the CEO, elaborated on future growth strategies, emphasizing the importance of asset origination, retail distribution, and continued investment in the retirement services sector. The insightful dialogue during the call presented a strategic vision for Apollo's substantial growth opportunities in the coming years.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.