How strong was KKR's core earnings growth in the second quarter of 2025?

Fee Related Earnings rose 17% year-over-year to $887 million, or $0.98 per adjusted share. Total Operating Earnings increased 14% to $1.2 billion, and Adjusted Net Income increased 9% to $1.1 billion. Over the trailing twelve months, FRE grew 34%, TOE grew 26%, and ANI grew 27%, which management attributes mainly to growth in management fees and operating leverage.

Why did GAAP net income decline even though non-GAAP earnings grew?

GAAP net income to KKR common stockholders was $472 million in Q2 2025, compared with $668 million in Q2 2024, and $286 million year-to-date versus $1.35 billion a year earlier. The filing shows large investment-related losses in the Insurance segment on a year-to-date basis, along with higher noncontrolling interests and preferred dividends. Non-GAAP measures such as ANI and FRE exclude many of these items, so the two sets of figures should be analyzed together.

How much capital is KKR raising and deploying, and what is its growth pipeline?

KKR raised $28 billion of new capital in Q2 2025 and $109 billion over the last twelve months, and invested $18 billion in the quarter and $83 billion over the LTM. Uncalled commitments stand at $115 billion, and $56 billion of committed capital is not yet paying fees. AUM not yet paying fees carries a weighted average management fee of roughly 90 basis points, which provides a future fee base as that capital is invested or enters its investment period.

What are the key balance sheet and capital return items?

KKR reported $7.1 billion of cash and short-term investments, $9.4 billion of asset management investments, and $9.3 billion of outstanding debt at par, for net cash and investments of $7.1 billion. The company is rated 'A' by S&P and Fitch and has a $2.75 billion undrawn revolver. It issued $590 million of 6.875% subordinated notes due 2065 in Q2, declared a $0.185 per share common dividend payable August 26, 2025, and had $459 million remaining under its share repurchase plan as of July 25, 2025.

What is the outlook for Strategic Holdings and the Insurance business?

KKR expects Strategic Holdings Operating Earnings to reach $350 million or more in 2026, $700 million or more in 2028, and $1.1 billion or more in 2030, based on dividends from its core private equity portfolio. These are forward-looking estimates that may not materialize. In Insurance, Global Atlantic's Insurance Operating Earnings were $278 million in Q2 2025 (up 10% YoY), supported by net investment income growth, and Global Atlantic's book value rose to $9.6 billion from $8.3 billion a year earlier.

KKR & Co. Inc. 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed July 31, 2025. Cited figures are marked; the original filing is the authoritative source.

KKR & Co. Inc. reported strong second-quarter 2025 non-GAAP results, driven by its recurring earnings streams.

Fee Related Earnings (FRE) rose 17% year-over-year to $887 million^a ($0.98 per adjusted share), and Total Operating Earnings (TOE), which combines FRE, Insurance Operating Earnings, and Strategic Holdings Operating Earnings, grew 14% to $1.2 billion ($1.33 per adjusted share). Adjusted Net Income (ANI) increased 9% to $1.1 billion ($1.18 per adjusted share). On a trailing twelve-month basis, FRE reached $3.6 billion (up 34%), TOE reached $4.7 billion (up 26%), and ANI reached $4.5 billion (up 27%).

Management states that about 79% of LTM total segment earnings come from the more durable and recurring components. Assets under management (AUM) rose 14% year-over-year to $686 billion^b, and fee-paying AUM rose 14% to $556 billion. New capital raised was $28 billion in the quarter and $109 billion over the LTM.

GAAP results were considerably weaker than the non-GAAP metrics. Net income attributable to KKR common stockholders was $472 million^c ($0.50 diluted) in the quarter, down from $668 million ($0.72 diluted) a year earlier, and $286 million year-to-date versus $1.35 billion in the prior-year period. The decline reflects Insurance segment investment-related losses and the impact of noncontrolling interests, so investors should weigh the non-GAAP growth against the GAAP trend.

Other developments include the post-quarter closing of a majority stake in HealthCare Royalty Partners (about $3 billion^d of AUM), a $2 billion Japan Post Insurance investment in a new Global Atlantic-sponsored vehicle, a $0.185 per share quarterly common dividend, and a $590 million issuance of 6.875% subordinated notes due 2065. Balance sheet and outlook indicators remain solid. The company reported $115 billion of uncalled commitments, $9.2 billion of gross unrealized performance income, $2.8 billion of embedded unrealized gains, and net cash and investments of $7.1 billion.

Management expects Strategic Holdings Operating Earnings to exceed $350 million in 2026, $700 million in 2028, and $1.1 billion in 2030. Management described the firm as highly constructive entering the second half of 2025. These targets are forward-looking and subject to the risks described in the filing.

02—Key points

Key Highlights

FRE of $887M in Q2 2025 (+17% YoY, $0.98 per adjusted share); LTM FRE of $3.6B (+34% YoY) with a 69% FRE margin in the LTM period
TOE of $1.2B in Q2 (+14% YoY) and $4.7B LTM (+26% YoY); ANI of $1.1B in Q2 (+9% YoY) and $4.5B LTM (+27% YoY)
AUM of $686B (+14% YoY) and fee-paying AUM of $556B (+14% YoY); new capital raised of $28B in Q2 and $109B over the LTM
GAAP net income to KKR common stockholders fell to $472M in Q2 from $668M a year earlier, and to $286M year-to-date from $1.35B, indicating a meaningful gap between GAAP and non-GAAP performance
Acquired majority stake in HealthCare Royalty Partners on July 30, 2025 (about $3B AUM), expanding biopharma royalty and credit capabilities
Japan Post Insurance announced a $2B investment in a new Global Atlantic-sponsored vehicle post-quarter; Global Atlantic AUM totals $201B
Strategic Holdings Operating Earnings targets of $350M+ (2026), $700M+ (2028), and $1.1B+ (2030); $0.185 quarterly common dividend declared, with $459M remaining under the buyback authorization

03—Questions

Frequently Asked Questions

How strong was KKR's core earnings growth in the second quarter of 2025?
Fee Related Earnings rose 17% year-over-year to $887 million, or $0.98 per adjusted share. Total Operating Earnings increased 14% to $1.2 billion, and Adjusted Net Income increased 9% to $1.1 billion. Over the trailing twelve months, FRE grew 34%, TOE grew 26%, and ANI grew 27%, which management attributes mainly to growth in management fees and operating leverage.
Why did GAAP net income decline even though non-GAAP earnings grew?
GAAP net income to KKR common stockholders was $472 million in Q2 2025, compared with $668 million in Q2 2024, and $286 million year-to-date versus $1.35 billion a year earlier. The filing shows large investment-related losses in the Insurance segment on a year-to-date basis, along with higher noncontrolling interests and preferred dividends. Non-GAAP measures such as ANI and FRE exclude many of these items, so the two sets of figures should be analyzed together.
How much capital is KKR raising and deploying, and what is its growth pipeline?
KKR raised $28 billion of new capital in Q2 2025 and $109 billion over the last twelve months, and invested $18 billion in the quarter and $83 billion over the LTM. Uncalled commitments stand at $115 billion, and $56 billion of committed capital is not yet paying fees. AUM not yet paying fees carries a weighted average management fee of roughly 90 basis points, which provides a future fee base as that capital is invested or enters its investment period.
What are the key balance sheet and capital return items?
KKR reported $7.1 billion of cash and short-term investments, $9.4 billion of asset management investments, and $9.3 billion of outstanding debt at par, for net cash and investments of $7.1 billion. The company is rated 'A' by S&P and Fitch and has a $2.75 billion undrawn revolver. It issued $590 million of 6.875% subordinated notes due 2065 in Q2, declared a $0.185 per share common dividend payable August 26, 2025, and had $459 million remaining under its share repurchase plan as of July 25, 2025.
What is the outlook for Strategic Holdings and the Insurance business?
KKR expects Strategic Holdings Operating Earnings to reach $350 million or more in 2026, $700 million or more in 2028, and $1.1 billion or more in 2030, based on dividends from its core private equity portfolio. These are forward-looking estimates that may not materialize. In Insurance, Global Atlantic's Insurance Operating Earnings were $278 million in Q2 2025 (up 10% YoY), supported by net investment income growth, and Global Atlantic's book value rose to $9.6 billion from $8.3 billion a year earlier.

04—Continue

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