Apollo Global Management (APO) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

August 3, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to Apollo Global Management's Second Quarter 2023 Earnings Conference Call. [Operator Instructions]. This conference call is being recorded.

This call may include forward-looking statements and projections, which do not guarantee future events or performance. Please refer to Apollo's most recent SEC filings for risk factors related to these statements. Apollo will be discussing certain non-GAAP measures during this conference, which management believes are relevant in assessing the financial performance of the business. These non-GAAP measures are reconciled to GAAP figures in Apollo's earnings presentation, which is available on the company's website. Also note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any Apollo fund.

I will now turn the conference over to Noah Gunn, Global Head of Investor Relations.

Noah Gunn

Great Thanks Donna and welcome again everyone to our call. We're really thankful for the opportunity to spend some time with you this morning. Earlier, we published our earnings release and financial supplement on the investor relations portion of our website. Within these documents you'll see that we generated very solid results that included record quarterly fee related earnings of $442 million or $0.74 per share, and record quarterly normalized spread related earnings of $874 million, or $1.47 per share. Together, these two earnings streams totaled $1.3 billion in the second quarter, increasing more than 40% year-over-year, demonstrating the strong, resilient and fully aligned growth characteristics of our asset management and retirement services businesses.

Combined with principal investing income and other HoldCo items, we reported normalized adjusted net income of $1.1 billion, or $1.80 per share, up 60% year-over-year.

Joining me from our team to discuss our results in further detail are Marc Rowan, CEO, Jim Zelter Co President, and Martin Kelly, CFO. And we've received some feedback from some of you that we should attempt to shorten the length of our prepared remarks. So at the risk of making a false promise, Marc himself has ensured us that we'll be endeavoring to do that today.

So with that, I'll turn it over to Marc.

Marc Rowan

Thanks Noah, and we all can wish for certain things and hope that they come through. In any event, as no Noah said it was truly a very, very strong quarter, normalized SRE and FRE of $1.3 billion for the quarter. And we are on track to earn FRE and normalize SRE of ,$5 billion plus minus for the year which Martin will detail. One thing worth calling out is just how exceptionally strong SRE has been. Just to put in context, Athene has now grown or will grow 30% SRE two years in a row, and they actually have hit their 2026 financial target as laid out in our Investor Day some two years ago, in just two years. Not only are they doing an exceptional job, but clearly Jim and Grant and the team have exceptionally sandbagged everyone, and the business continues to be very strong.