KKR Gains on Q1 Earnings Beat as Revenues & AUM Rise, Expenses Up Y/Y

KKR & Co. Inc.’s KKR first-quarter 2025 adjusted net income per share of $1.15 surpassed the Zacks Consensus Estimate of $1.13. The bottom line increased from 97 cents reported in the prior-year quarter.

Shares of KKR rallied 1.6% in pre-market trading on better-than-expected performance.

Results primarily reflected impressive growth in assets under management (AUM) and record transaction fees for the capital markets business. However, an increase in expenses acted as a headwind.

Net loss attributable to the company (GAAP basis) was $185.9 million against net income of $682.2 million in the year-ago quarter.

KKR’s Total Revenues Rise, Expenses Up

Total segment revenues amounted to $1.2 billion, jumping 21.6% on a year-over-year basis. The rise was driven by higher management fees, fee-related performance revenues and transaction and monitoring fees. The top line also beat the Zacks Consensus Estimate of $1.19 billion.

Total segment expenses increased 18.8% to $377.5 million.

As of March 31, 2025, total AUM grew 14.8% year over year to $664.3 billion. Further, fee-paying AUM summed $526 billion, which increased 11.7% from the year-ago quarter.

KKR Total Operating Earnings & Fee-Related Earnings Rise

Total operating earnings rose 15.6% year over year to $1.11 billion. The upside was driven by growth in fee-related earnings.

The company posted fee-related earnings of $822.6 million, up 23% year over year.

Our Viewpoint on KKR

KKR will continue utilizing lucrative investment opportunities on the back of its efficient fund-raising capability in the quarters ahead. Significant growth in fee-related earnings and total operating earnings is aiding the company’s financials. However, due to the company’s continuous expansion of its global footprint, expenses are likely to remain elevated. Also, the current tough operating environment is a concerning factor.
 

KKR & Co. Inc. Price, Consensus and EPS Surprise

KKR & Co. Inc. price-consensus-eps-surprise-chart | KKR & Co. Inc. Quote

Currently, KKR carries a Zacks Rank #5 (Strong Sell).

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

Performance of KKR’s Peers

Blackstone’s BX first-quarter 2024 distributable earnings of $1.09 per share surpassed the Zacks Consensus Estimate of $1.04. The figure reflects a rise of 11% from the prior-year quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

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

Federated Hermes, Inc.’s FHI first-quarter 2025 adjusted earnings per share of $1.10 topped the Zacks Consensus Estimate of 91 cents. The bottom line grew 23.6% from the year-ago quarter.

Increased net administrative service fees and net investment advisory fees are major driving factors for FHI’s quarterly results. The company’s total managed assets touched a record level. A rise in revenues and a decline in expenses were added advantages.

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

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