Higher Expenses to Hurt Apollo's Q1 Earnings, AUM Growth to Aid

Apollo Global Management, Inc. APO is scheduled to announce first-quarter 2025 results on May 2, before market open. APO’s quarterly earnings and revenues are expected to have increased from the year-ago reported levels.

In the last reported quarter, Apollo’s earnings surpassed the Zacks Consensus Estimate. Results were primarily aided by a rise in assets under management balances, along with a decline in expenses. However, lower revenues acted as headwinds in the quarter.

APO’s earnings beat the consensus estimate in two of the trailing four quarters and missed twice, the average earnings surprise being 2.69%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Apollo Global Management Inc. Price and EPS Surprise

Apollo Global Management Inc. price-eps-surprise | Apollo Global Management Inc. Quote

Apollo’s Q1 Earnings & Sales Estimates

The Zacks Consensus Estimate for APO’s earnings of $1.85 has been unchanged over the past seven days. The figure indicates a rise of 7.6% from the year-ago quarter’s actual.

The consensus estimate for sales is pegged at $961.4 million, suggesting a year-over-year rise of 14.6%.

Key Factors & Estimates for APO in Q1

Supported by overall asset inflows on the back of favorable markets, the company’s total AUM balance is expected to have improved. Also, its diversified asset classes, client bases and geographies are likely to have supported AUM growth in the quarter-to-be reported.

The Zacks Consensus Estimate for the company’s total AUM in the first quarter of 2025 is pegged at $778.7 billion, which suggests a sequential rise of 3.8%.

The consensus estimate for management fees (segment earnings) is pegged at $757.4 million, indicating a sequential rise of 2.1%.

In the first quarter of 2025, the consensus estimate for fee-related performance fees (segment earnings) is pegged at $55.8 million, indicating a rise of 5.3% from the previous quarter’s reported number.

The consensus estimate for net capital solutions fees and other (segment earnings) is pinned at $148.4 million, indicating a sequential decline of 7.2%.

On the cost front, the company’s ongoing investments in building its capital formation and credit investing teams, along with charges related to mergers, are likely to have kept the expense base elevated in the first quarter.

What Our Model Predicts for APO

Per our proven model, the chances of Apollo beating estimates this time are low. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you can see below. 

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Apollo has an Earnings ESP of 0.00%.

Zacks Rank: APO currently has a Zacks Rank of 5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Performance of Other Asset Managers

Invesco’s IVZ first-quarter 2025 adjusted earnings of 44 cents per share surpassed the Zacks Consensus Estimate of 39 cents. Moreover, the bottom line jumped 33.3% from the prior-year quarter. 

IVZ’s results primarily gained from higher adjusted net revenues. An increase in the AUM balance due to decent inflows was positive, too. However, higher adjusted operating expenses were worrisome.

Blackstone’s BX first-quarter 2025 distributable earnings of $1.09 per share surpassed the Zacks Consensus Estimate of $1.04. The figure rose 11% from the prior-year quarter.

Results benefited from higher segment revenues and a surge in the AUM balance. However, an increase in GAAP expenses was a headwind for BX.

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This article originally published on Zacks Investment Research (zacks.com).

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