Apollo Global Management (APO) Q2 FY26 earnings call: guidance and Q&A

Inquired about the sustainability and growth potential of ACS fees, given strong H1 performance and the large financing needs for global industrial renaissance.

Management emphasized the durability and breadth of ACS, driven by strong origination across diverse sectors beyond AI, and the multiplier effect of serving new client ecosystems. They believe ACS will continue to broaden and deepen, behaving like a recurring revenue stream.

“The marketplace, I think, in aggregate is making a mistake by just thinking global industrial renaissance is AI and data centers. As we're sitting here in August of '26, I suspect 12 to 24 months from now, we will be talking about the onshoring re-onshoring of industrial basis of the U.S. defense, more energy transition.”

asked by Steven Chubak · answered by James Zelter

Asked for an update on M&A strategy, particularly regarding expansion in Europe/Asia post PIC and Bridge deals.

Marc Rowan stated Apollo is not a proponent of asset manager M&A, preferring to diversify into adjacencies like market making or equity business growth rather than acquiring 'more of the same.' Jim Zelter added that they aim to expand the sandbox, not just take more space within the existing one.

“Every 1 of these asset manager purchases is, yes, it can be accretive. Yes, you probably have to pay twice, both to the equity owners and then to the employees. But most importantly, it gets you more of the same.”

asked by Craig Siegenthaler · answered by Marc Rowan

Asked which pools of capital daily NAV and increased transparency would open up for Apollo and the industry.

Marc Rowan explained that daily NAV and ICE IDs make private credit more accessible to institutional debt/equity buckets, traditional asset managers, and individuals by offering public market-like transparency and settlement. This reduces the risk premium and increases acceptance, expanding the TAM significantly.

“The more we do this the more we will make ourselves acceptable to 401(k) to DC, traditional asset managers to individuals and otherwise.”

asked by Alexander Blostein · answered by Marc Rowan

Inquired about the reasons for slow monetizations despite high markets and strong retail annuity production amidst intense competition.

Marc Rowan attributed strong annuity production to competing in channels less focused on price and more on ratings/domicile, leveraging Apollo's origination strength. He noted that new entrants often lack the full competitive advantages (origination, liability structure, OpEx) and rely on regulatory arbitrage, which is being addressed by NAIC. Jim Zelter noted monetization is volatile quarter-to-quarter but strong over longer periods, and Fund XI demand is robust.

“Almost everyone who's come to this marketplace does not have anything other than capital. And so they don't have a mature origination machine to generate IG risk.”

asked by Glenn Schorr · answered by Marc Rowan

Asked if Apollo can continue to deliver margin expansion while investing heavily in technology and new initiatives.

Martin Kelly confirmed they expect to maintain margin expansion, targeting 20% FRE growth over the cycle with mid-to-high teens revenue growth and low double-digit expense growth. He emphasized prioritizing investments to support future growth while being mindful of cost efficiencies.

“You should expect that we will create 20% FRE growth over the cycle, anchored by sort of mid- to high-teens revenue growth and sort of double digit -- low double digit, low teens expense growth.”

asked by Michael Brown · answered by Martin Kelly

Asked about the potential impact of addressing regulatory arbitrage on the competitive environment and spread pressure in the annuity business.

Marc Rowan stated that cleaning up regulatory arbitrage would create a more level playing field, benefiting companies like Apollo that operate with higher capital standards. He noted that current arbitrage allows some competitors to offer lower spreads, but regulatory changes (like NAIC proposals) are likely to end this, forcing those companies to post additional capital.

“I believe this growth phase that we've seen in offshore regulatory arbitrage is coming to an end. And that companies are going to be really unhappy with the bill they're going to get from capital additional capital that they will likely be required to post.”

asked by Patrick Davitt · answered by Marc Rowan