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Ares Management Stock Falls as Q4 Earnings Miss, Expenses Rise Y/Y

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Key Takeaways

  • Ares Management posted Q4 after-tax realized income of $1.45 per share, missing estimates despite Y/Y growth.
  • ARES saw total expenses rise 27.3% year over year to $1.25B, pressuring quarterly results.
  • Ares Management's total AUM grew 28.5% year over year to $622.5B, supported by inflows and acquisitions.

Ares Management Corporation’s (ARES - Free Report) fourth-quarter 2025 after-tax realized income per share of $1.45 missed the Zacks Consensus Estimate of $1.71. However, the bottom line increased from $1.23 per share in the prior-year quarter.

Shares of the company lost nearly 7.3% in the early trading session following the release of lower-than-expected results. A full day’s trading session will depict a clearer picture.

Results were affected by an increase in expenses. Nevertheless, the higher assets under management (AUM) provided some support to the results.

Net income attributable to the company (GAAP basis) was $54.2 million compared with the $177.3 million in the year-ago quarter.

For 2025, the after-tax realized income per share was $4.76, which missed the Zacks Consensus Estimate of $5.07. Nevertheless, this compares favorably with $3.97 reported in the prior year. Net income attributable (GAAP basis) to Ares Management was $527.4 million, which rose 13.7% year over year.

ARES’s Revenues & Expenses

The company's total revenue declined 5.6% year over year to $1.17 billion. Also, it missed the Zacks Consensus Estimate of $1.63 billion.

Full-year revenues were $5.6 billion, which increased 44.1% year over year. The top line beat the Zacks Consensus Estimate of $4.8 billion.

The company’s total expenses increased 27.3% year over year to $1.25 billion from the year-ago quarter. This rise was primarily driven by an increase in all the components. 

Ares Management’s AUM Balance

The company’s fee-paying AUM increased 31.5% on a year-over-year basis to $384.9 billion. Further, the perpetual capital AUM rose 49.7% year over year to $200 billion.

As of Dec. 31, 2025, total AUM was $622.5 billion, up 28.5% from a year ago. The rise was primarily driven by commitments to drawdown funds, capital raised across perpetual vehicles, the acquisition of GCP International and additional managed assets from the insurance platform.

ARES’s Liquidity Position

As of Dec. 31, 2025, Ares Management had $488.9 million of cash and cash equivalents and $2.6 billion of debt.

ARES’ Recent Developments

Earlier this month, Ares Management completed its acquisition of BlueCove Limited, a London-based systematic fixed-income manager, to launch a newly created strategy, Ares Systematic Credit.

The integrated BlueCove business now operates within the Ares Credit Group. It expands ARES’ capabilities in systematic fixed-income investing, leveraging data-driven and technology-enabled investment processes across high-yield, investment-grade corporates, convertible bonds and other liquid credit instruments.

Our Viewpoint on Ares Management

Ares Management continues to benefit from strong AUM growth across fee-paying and perpetual capital platforms, supported by steady capital inflows and strategic acquisitions such as BlueCove and GCP International. However, elevated expenses are likely to weigh on near-term profitability.

Ares Management Corporation Price, Consensus and EPS Surprise

Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of ARES’s Peers

Invesco’s (IVZ - Free Report) fourth-quarter 2025 adjusted earnings of 62 cents per share surpassed the Zacks Consensus Estimate of 57 cents. The bottom line increased 19.2% from the prior-year quarter.

The results of IVZ have been primarily aided by an increase in adjusted revenues. Moreover, growth in the assets under management reached record levels, supporting the results to an extent. However, an increase in adjusted operating expenses was a headwind.

Blackstone’s (BX - Free Report) fourth-quarter 2025 distributable earnings of $1.75 per share handily surpassed the Zacks Consensus Estimate of $1.52. The figure rose 4% from the prior-year quarter.

BX’s results benefited from a rise in assets under management balance. However, a decrease in quarterly segment revenues and higher GAAP expenses were the undermining factors.


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