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KKR Shares Slip as Weak ANI Outlook Overshadows Q1 Earnings Beat
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Key Takeaways
KKR beat Q1 earnings estimates as revenues climbed 22.4% y/y on higher AUM and transaction fees.
KKR said market volatility reduced visibility, making $7-per-share less likely this year.
KKR's fee-paying AUM rose 16.8% to $614.8B, while management fees jumped 30%.
KKR & Co. Inc. (KKR - Free Report) reported first-quarter 2026 net income per share of $1.39, surpassing the Zacks Consensus Estimate of $1.28 and rising from $1.15 in the prior-year quarter. Total segmental revenues amounted to $1.47 billion, which increased 22.4% on a year-over-year basis and beat the Zacks Consensus Estimate of $1.43 billion.
Results primarily reflect impressive growth in assets under management (AUM) and transaction fees for the capital markets business. However, despite a solid first-quarter performance, KKR shares fell nearly 2% since the release of the results, as the company stated that market volatility had dimmed its 2026 adjusted net income (ANI) per share growth outlook.
During the first-quarter earnings call, chief financial officer Robert Lewin stated, "While we continue to generate very strong outcomes, we do have modestly less visibility today than what our budget would have suggested at this point in the year. As a result, if you are handicapping our ability to reach 2026 ANI of $7 per share, we do think it is more likely that we land below that level.”
Nonetheless, KKR feels confident in its ability to exceed targets for fundraising, strategic holdings’ operating earnings and fee-related earnings on a per-share basis. The company is also targeting more than $100B AUM over time with Arctos Partners, which it acquired in May 2026.
Higher AUM Drives KKR’s Revenue Growth
The primary driver for the increase in KKR’s top line was a rise in the AUM balance, which grew 14.1% year over year to $757.9 billion.
AUM growth remained broad-based. Private Equity AUM increased to $231 billion, Real Assets reached $197.9 billion, and Credit and Liquid Strategies climbed to $328.9 billion, underscoring balance across the platform.
More importantly for fee durability, fee-paying AUM rose to $614.8 billion, increasing 16.8% from the prior-year quarter. Perpetual capital totaled $326 billion, up 17% year over year, representing 43% of AUM and 51% of fee-paying AUM.
KKR's Profitability Metrics Stay on an Upswing
KKR generated fee-related earnings of $1 billion, or $1.13 per adjusted share, up 23.5% year over year. Total operating earnings were $1.3 billion, or $1.47 per adjusted share, increasing 19.1%.
At the segment level, total segment earnings rose to $1.63 billion from $1.39 billion a year ago. The mix continued to lean toward recurring earnings streams, with fee-related earnings supported by management fees and transaction-related revenues.
KKR Fee Growth Offsets Expense Climb
Management fees increased 30% year over year to $1.19 billion, reflecting higher fee-paying assets and broader fundraising momentum across strategies. Transaction and monitoring fees, net, were $252.7 million, while fee-related performance revenues were $23.8 million.
Costs also moved higher as KKR continued to invest in its platform. Fee-related compensation totaled $257.2 million and other operating expenses were $195.4 million. Total segment expenses increased 19.9% year over year to $452.6 million.
This Zacks Rank #4 (Sell) stock also declared a quarterly dividend of 19.5 cents per share of common stock, representing a 5.4% increase from the previous quarterly dividend of 18.5 cents per share.
T. Rowe Price Group, Inc.’s (TROW - Free Report) first-quarter 2026 adjusted earnings per share of $2.52 surpassed the Zacks Consensus Estimate of $2.37. Nevertheless, the bottom line increased 13% year over year.
TROW's results benefited from higher investment advisory fees and a rise in AUM. Positive capital allocation-based income was also encouraging. However, higher expenses acted as headwinds.
Franklin Resources Inc. (BEN - Free Report) reported second-quarter fiscal 2026 (ended March 31, 2026) adjusted earnings of 71 cents per share, which surpassed the Zacks Consensus Estimate of 55 cents. Also, the bottom line compared favorably with 47 cents in the year-ago quarter.
BEN’s results benefited from higher revenues. However, a slight decline in AUM and elevated expenses remained headwinds.
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KKR Shares Slip as Weak ANI Outlook Overshadows Q1 Earnings Beat
Key Takeaways
KKR & Co. Inc. (KKR - Free Report) reported first-quarter 2026 net income per share of $1.39, surpassing the Zacks Consensus Estimate of $1.28 and rising from $1.15 in the prior-year quarter. Total segmental revenues amounted to $1.47 billion, which increased 22.4% on a year-over-year basis and beat the Zacks Consensus Estimate of $1.43 billion.
KKR & Co. Inc. Price, Consensus and EPS Surprise
KKR & Co. Inc. price-consensus-eps-surprise-chart | KKR & Co. Inc. Quote
Results primarily reflect impressive growth in assets under management (AUM) and transaction fees for the capital markets business. However, despite a solid first-quarter performance, KKR shares fell nearly 2% since the release of the results, as the company stated that market volatility had dimmed its 2026 adjusted net income (ANI) per share growth outlook.
During the first-quarter earnings call, chief financial officer Robert Lewin stated, "While we continue to generate very strong outcomes, we do have modestly less visibility today than what our budget would have suggested at this point in the year. As a result, if you are handicapping our ability to reach 2026 ANI of $7 per share, we do think it is more likely that we land below that level.”
Nonetheless, KKR feels confident in its ability to exceed targets for fundraising, strategic holdings’ operating earnings and fee-related earnings on a per-share basis. The company is also targeting more than $100B AUM over time with Arctos Partners, which it acquired in May 2026.
Higher AUM Drives KKR’s Revenue Growth
The primary driver for the increase in KKR’s top line was a rise in the AUM balance, which grew 14.1% year over year to $757.9 billion.
AUM growth remained broad-based. Private Equity AUM increased to $231 billion, Real Assets reached $197.9 billion, and Credit and Liquid Strategies climbed to $328.9 billion, underscoring balance across the platform.
More importantly for fee durability, fee-paying AUM rose to $614.8 billion, increasing 16.8% from the prior-year quarter. Perpetual capital totaled $326 billion, up 17% year over year, representing 43% of AUM and 51% of fee-paying AUM.
KKR's Profitability Metrics Stay on an Upswing
KKR generated fee-related earnings of $1 billion, or $1.13 per adjusted share, up 23.5% year over year. Total operating earnings were $1.3 billion, or $1.47 per adjusted share, increasing 19.1%.
At the segment level, total segment earnings rose to $1.63 billion from $1.39 billion a year ago. The mix continued to lean toward recurring earnings streams, with fee-related earnings supported by management fees and transaction-related revenues.
KKR Fee Growth Offsets Expense Climb
Management fees increased 30% year over year to $1.19 billion, reflecting higher fee-paying assets and broader fundraising momentum across strategies. Transaction and monitoring fees, net, were $252.7 million, while fee-related performance revenues were $23.8 million.
Costs also moved higher as KKR continued to invest in its platform. Fee-related compensation totaled $257.2 million and other operating expenses were $195.4 million. Total segment expenses increased 19.9% year over year to $452.6 million.
This Zacks Rank #4 (Sell) stock also declared a quarterly dividend of 19.5 cents per share of common stock, representing a 5.4% increase from the previous quarterly dividend of 18.5 cents per share.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Asset Managers
T. Rowe Price Group, Inc.’s (TROW - Free Report) first-quarter 2026 adjusted earnings per share of $2.52 surpassed the Zacks Consensus Estimate of $2.37. Nevertheless, the bottom line increased 13% year over year.
TROW's results benefited from higher investment advisory fees and a rise in AUM. Positive capital allocation-based income was also encouraging. However, higher expenses acted as headwinds.
Franklin Resources Inc. (BEN - Free Report) reported second-quarter fiscal 2026 (ended March 31, 2026) adjusted earnings of 71 cents per share, which surpassed the Zacks Consensus Estimate of 55 cents. Also, the bottom line compared favorably with 47 cents in the year-ago quarter.
BEN’s results benefited from higher revenues. However, a slight decline in AUM and elevated expenses remained headwinds.