Apollos Earnings Beat Hides a 55% EPS Drop and a Bleeding Trading Strategy

Apollo Global (APO) reported fiscal 2025 Q4 earnings on Feb 09, 2026, with adjusted earnings of $2.47 per share—surpassing the $2.04 consensus estimate—on record revenue of $9.86 billion. The firm reaffirmed its guidance for 10% annual SRE growth through 2029 and 20%+ FRE expansion in 2026, aligning with its strategic focus on credit and insurance markets.

Revenue

Apollo’s total revenue surged 86.7% to $9.86 billion in Q4 2025, driven by robust performance across segments. Asset Management contributed $1.36 billion, with Management fees at $681 million and Advisory and transaction fees at $352 million. Investment income (loss) reached $207 million, while Incentive fees totaled $96 million. Retirement Services dominated with $8.49 billion in revenue, including $2.28 billion in Premiums, $5.12 billion in Net investment income, and $123 million in Investments-related gains. Additional contributors included Property management fees ($24 million), Product charges ($306 million), and Revenues from consolidated variable interest entities ($674 million).

Earnings/Net Income

Net income fell 30.2% to $1.16 billion in Q4 2025, with EPS declining 55.8% to $1.07 from $2.42 in the prior year. The sharp EPS drop reflects challenges despite strong revenue growth and record capital inflows.

Price Action

Apollo’s stock edged down 0.29% in the latest trading day but gained 0.57% for the week. Month-to-date, it fell 7.16%.

Post-Earnings Price Action Review

The strategy of buying Apollo shares after its Q4 revenue matched quarter-over-quarter levels and holding for 30 days resulted in underperformance. With a CAGR of -32.49% and total return of -77.69%, the approach lagged the benchmark return of 52.44% by -130.13%. The strategy faced a maximum drawdown of 87.45% and a Sharpe ratio of -0.64, highlighting its high-risk profile and substantial losses.

CEO Commentary

CEO Marc Rowan emphasized Apollo’s record 2025 performance, including $2.5 billion in FRE and $3.4 billion in SRE, driven by $300 billion in origination volume and $228 billion in capital inflows. He underscored strategic expansion into insurance, institutional debt/equity, and 401(k) markets, while prioritizing long-term ownership and disciplined exposure management.

Guidance

Apollo reaffirmed 10% annual SRE growth through 2029 and 20%+ FRE growth in 2026. CFO Martin Kelly outlined 10% SRE growth assuming 11% alts returns, 10% dividend hikes to $2.25/share in 2026, and FRE margin expansion of ~100 bps annually. The firm expects $85 billion in Athene inflows and $150 billion+ organic fundraising, with capital allocation prioritizing dividends, buybacks, and strategic investments.

Additional News

Apollo secured a $3.4 billion loan to finance Nvidia (NVDA) chips for Elon Musk’s xAI, part of a $20 billion strategy to expand AI infrastructure. The firm also announced a $0.51 quarterly dividend ($2.04 annualized) and a $4.0 billion share repurchase program, signaling confidence in its capital position. These moves followed record Q4 results and underscore Apollo’s focus on leveraging its credit platform and insurance synergies to drive growth.