Apollo’s earnings engine accelerates despite a US$1.1 billion GAAP loss

Apollo Global Management, Inc. (NYSE:APO) produced a strikingly divided third quarter: its core operating earnings hit records while higher interest rates helped drive a US$1.057 billion GAAP loss attributable to common stockholders. The alternative asset manager reported record Fee Related Earnings of US$802 million, up 23% from a year earlier, and Adjusted Net Income of US$1.293 billion, or US$2.07 per share.

Record fee earnings and capital inflows

The operating numbers were strong. Apollo’s Fee Related Earnings margin held at 58.4%, while capital solutions fees reached a fourth consecutive quarterly record at US$290 million. Fee and Spread Related Earnings totalled US$1.646 billion, with Spread Related Earnings of US$844 million as reported, or US$909 million excluding notable items tied to Athene’s annual assumption review.

Assets under management rose 18% year on year to US$1.074 trillion, including US$880 billion of fee-generating assets. Apollo attracted US$53 billion of inflows during the quarter and US$270 billion over the last 12 months. Origination also reached a quarterly record of US$114 billion, taking the 12-month total to US$356 billion, while gross capital deployment reached US$117 billion for the quarter.

Higher rates expose the retirement services volatility

The GAAP loss came primarily from unrealised mark-to-market losses on investments in the Retirement Services segment as interest rates rose. Apollo’s quarterly investment-related losses were US$3.418 billion, although those losses do not flow through its preferred non-GAAP operating measure in the same way as recurring fee and spread earnings.

Athene’s underlying spread performance was more resilient but not without pressure. Spread Related Earnings excluding notable items rose 7% year on year, yet the net spread narrowed to 1.14% on that basis from 1.21% a year earlier. Apollo said the quarter included a 10% return from Athene’s alternative investment portfolio, below its long-term expected average annual return of 11%; matching that expectation would have added US$54 million to alternative net investment income, according to the presentation.

Tax charge deepens the reported loss

Results were also affected by a one-time US$1.7 billion tax expense in the first half of 2026 after ACRA’s election under Bermuda’s Corporate Income Tax Act 2023 was revoked following updated guidance. Apollo said the charge led to a full valuation allowance against Bermuda deferred tax assets. That item helps explain why year-to-date GAAP net loss attributable to common stockholders stood at US$1.651 billion despite Adjusted Net Income of US$3.815 billion.

Apollo declared a quarterly common-stock dividend of US$0.5625 per share and repurchased US$143 million of stock during the quarter. The company said it had returned US$1.5 billion to stockholders over the last 12 months through dividends and opportunistic buybacks, while allocating about US$748 million to strategic investments supporting future growth.