Why did Apollo report a GAAP net loss this quarter when its operating metrics were strong?

The GAAP net loss of $1.9 billion (or $(3.27) per share) was driven primarily by a one-time $1.7 billion income tax expense. This arose because ACRA's election under Bermuda's Corporate Income Tax Act was revoked following updated guidance, which led Apollo to record a full valuation allowance against its Bermuda deferred tax assets. Apollo's non-GAAP Adjusted Net Income of $1.2 billion excludes this item.

What drove the year-over-year decline in Spread-Related Earnings?

SRE fell 11% year-over-year to $719 million, mainly due to lower alternative net investment income, which dropped to $210 million from $315 million. The decline reflected reduced contributions from origination platforms, including Atlas, and a 6% alternative portfolio return versus management's 11% long-term expectation. The Athene net spread also compressed to 0.97% from 1.26% a year earlier, though fixed income net investment income grew 22% and LTM SRE rose 2%.

Is the $1 trillion AUM milestone translating into fee growth?

Yes. Management fees rose 24% year-over-year to $952 million, and capital solutions fees grew 60% to a record $246 million. Fee-generating AUM reached $836 billion, up 40%, though roughly $65 billion of the increase came from Athora's acquisition of PIC and $42 billion from a fee basis adjustment related to Redding Ridge, so part of the growth is inorganic or accounting-driven.

What happened to Apollo's capital return program and balance sheet?

Apollo repurchased $866 million of common stock in 1Q'26 at an average cost of $124.62, with $792 million offsetting dilution from seasonally elevated equity plan share issuances. The board terminated the prior $3.0 billion program and approved a new $4.0 billion authorization effective February 9, 2026. Net balance sheet value fell to $2.2 billion ($3.47 per share) from $2.8 billion, and HoldCo debt increased to $6.3 billion from $5.5 billion.

Apollo Global Management, Inc. 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 6, 2026. Cited figures are marked; the original filing is the authoritative source.

Apollo Global Management (NYSE: APO) reported first-quarter 2026 results on May 6, 2026, with a GAAP net loss attributable to common stockholders of $1.9 billion^a, or $(3.27) per share.

The loss was driven by a one-time $1.7 billion^b income tax expense tied to the revocation of ACRA's election under Bermuda's Corporate Income Tax Act, which led to a full valuation allowance against Bermuda deferred tax assets. Management emphasized the underlying operating results: Fee-Related Earnings (FRE) reached a record $728 million (up 30% year-over-year), Spread-Related Earnings (SRE) were $719 million, and Adjusted Net Income (ANI), Apollo's primary non-GAAP metric, was $1.2 billion, or $1.94 per share. Total assets under management crossed the $1 trillion milestone, reaching $1.03 trillion (up 31% year-over-year), supported by record total inflows of $115 billion in the quarter and $300 billion over the last twelve months.

Origination reached $71 billion^c in the quarter, and capital solutions fees hit a record $246 million. Note that quarterly SRE declined 11% year-over-year and 17% sequentially as alternative net investment income fell to $210 million, reflecting a 6% alternative return versus management's 11% long-term expectation; the quarter's Athene spread was 0.97%, down from 1.20% in 4Q'25. On capital returns, the board declared a common dividend of $0.5625 per share payable May 29, 2026, and Apollo repurchased $866 million of stock in the quarter, including $792 million to offset dilution from equity plan issuances.

Net balance sheet value per share fell to $3.47^d from $4.48, largely reflecting the tax charge and higher debt of $6.3 billion at HoldCo. Investors should weigh the strong fee-based growth against the one-time tax hit and softer spread earnings.

02—Key points

Key Highlights

GAAP net loss attributable to common stockholders of $1.9 billion, or $(3.27) per share, driven by a one-time $1.7 billion income tax expense from the ACRA Bermuda election revocation and a full valuation allowance on Bermuda deferred tax assets.
Record FRE of $728 million, up 30% year-over-year ($1.17 per share), with FRE margin of 57.7% and fee-related revenues up 29% to $1.26 billion.
Adjusted Net Income of $1.2 billion, or $1.94 per share, versus $1.82 in 1Q'25 and $2.47 in 4Q'25 (which included $227 million of Principal Investing Income).
Total AUM reached $1.03 trillion, up 31% year-over-year, with record quarterly inflows of $115 billion and LTM inflows of $300 billion; 60% of AUM is perpetual capital.
SRE of $719 million was down 11% year-over-year and 17% sequentially, as alternative net investment income fell to $210 million (a 6% return versus an 11% long-term expectation, a roughly $188 million shortfall) and the Athene net spread compressed to 0.97%.
Principal Investing Income rose to $75 million from $14 million a year earlier, driven by a significant portfolio company sale and carry distributions from Funds IX and X; performance fee-eligible AUM rose 36% to $319 billion and dry powder was $74 billion.
Capital return: $866 million of share repurchases in 1Q'26 (including $792 million for dilution offset), $1.5 billion returned over the LTM period, a new $4.0 billion repurchase authorization, and a $0.5625 quarterly common dividend.

03—Questions

Frequently Asked Questions

Why did Apollo report a GAAP net loss this quarter when its operating metrics were strong?
The GAAP net loss of $1.9 billion (or $(3.27) per share) was driven primarily by a one-time $1.7 billion income tax expense. This arose because ACRA's election under Bermuda's Corporate Income Tax Act was revoked following updated guidance, which led Apollo to record a full valuation allowance against its Bermuda deferred tax assets. Apollo's non-GAAP Adjusted Net Income of $1.2 billion excludes this item.
What drove the year-over-year decline in Spread-Related Earnings?
SRE fell 11% year-over-year to $719 million, mainly due to lower alternative net investment income, which dropped to $210 million from $315 million. The decline reflected reduced contributions from origination platforms, including Atlas, and a 6% alternative portfolio return versus management's 11% long-term expectation. The Athene net spread also compressed to 0.97% from 1.26% a year earlier, though fixed income net investment income grew 22% and LTM SRE rose 2%.
Is the $1 trillion AUM milestone translating into fee growth?
Yes. Management fees rose 24% year-over-year to $952 million, and capital solutions fees grew 60% to a record $246 million. Fee-generating AUM reached $836 billion, up 40%, though roughly $65 billion of the increase came from Athora's acquisition of PIC and $42 billion from a fee basis adjustment related to Redding Ridge, so part of the growth is inorganic or accounting-driven.
What happened to Apollo's capital return program and balance sheet?
Apollo repurchased $866 million of common stock in 1Q'26 at an average cost of $124.62, with $792 million offsetting dilution from seasonally elevated equity plan share issuances. The board terminated the prior $3.0 billion program and approved a new $4.0 billion authorization effective February 9, 2026. Net balance sheet value fell to $2.2 billion ($3.47 per share) from $2.8 billion, and HoldCo debt increased to $6.3 billion from $5.5 billion.

04—Continue

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