Ares Management (NYSE:ARES) Issues Quarterly Earnings Results, Beats Expectations By $0.01 EPS

Key Points

• Ares Management beat quarterly earnings expectations: Adjusted EPS was $1.29, up from $1.03 a year earlier and $0.01 above consensus, while revenue increased 5.8% year over year.
• Fundraising and future fee growth remain strong: Ares raised approximately $36 billion in the quarter, pushing AUM above $671 billion. The firm also reported $170 billion in dry powder and $114 billion of non-fee-paying AUM that could generate substantial future management fees.
• Risks include redemptions and credit quality concerns: Wealth-channel redemption requests may take another two to three quarters to normalize, while rising defaults and non-accruals in private-credit funds could pressure investor sentiment.

Ares Management (NYSE:ARES - Get Free Report) issued its quarterly earnings results on Friday. The asset manager reported $1.29 earnings per share for the quarter, topping the consensus estimate of $1.28 by $0.01, FiscalAI reports. Ares Management had a return on equity of 22.14% and a net margin of 10.54%.The business's revenue was up 5.8% compared to the same quarter last year. During the same period in the previous year, the business earned $1.03 EPS.

Here are the key takeaways from Ares Management's conference call:

• Record fundraising and strong earnings growth: Ares raised approximately $36 billion in the second quarter, lifting AUM and fee-paying AUM 17% year over year. Fee-related earnings rose 20% and realized income increased 31%.
• Significant future fee visibility: The firm ended the quarter with approximately $170 billion of dry powder and $114 billion of AUM not yet paying fees, which management estimates could generate roughly $828 million in incremental annual management fees if deployed.
• Investment activity and pipelines are improving: Firm-wide deployment increased to approximately $36 billion, while the forward pipeline reached a record level, up nearly 20% sequentially. Management expects stronger second-half activity, particularly in U.S. and European direct lending, infrastructure, and digital infrastructure.
• Outlook and shareholder returns remain favorable: Management reaffirmed its 2026 financial objectives, including 16%–20% FRE growth and more than 20% realized-income and dividend growth, while raising the quarterly dividend by more than 20% year over year.
• Wealth-channel redemptions remain a risk: Although redemptions from core U.S. individual investors declined, requests remain concentrated among non-U.S. family offices and smaller institutions, particularly in Asia. Ares expects the remaining redemption queue to take another two to three quarters to normalize and is considering new share-class restrictions.

Ares Management Stock Up 3.4%

NYSE:ARES traded up $4.19 on Friday, reaching $128.31. 4,174,760 shares of the stock traded hands, compared to its average volume of 3,204,200. The company has a current ratio of 0.23, a quick ratio of 0.23 and a debt-to-equity ratio of 0.96. The company has a market capitalization of $42.32 billion, a price-to-earnings ratio of 59.68, a PEG ratio of 1.11 and a beta of 1.51. Ares Management has a 12 month low of $95.80 and a 12 month high of $195.26. The company's fifty day simple moving average is $123.75 and its 200 day simple moving average is $123.94.

Institutional Trading of Ares Management

Several institutional investors have recently added to or reduced their stakes in the business. Meeder Advisory Services Inc. boosted its position in shares of Ares Management by 51.7% during the fourth quarter. Meeder Advisory Services Inc. now owns 3,274 shares of the asset manager's stock valued at $529,000 after buying an additional 1,116 shares during the last quarter. DRW Securities LLC purchased a new position in shares of Ares Management during the fourth quarter valued at approximately $497,000. Gotham Asset Management LLC bought a new position in Ares Management during the fourth quarter valued at approximately $480,000. Wealthspire Advisors LLC boosted its holdings in Ares Management by 24.2% in the fourth quarter. Wealthspire Advisors LLC now owns 2,909 shares of the asset manager's stock worth $470,000 after purchasing an additional 566 shares during the last quarter. Finally, Wedbush Securities Inc. boosted its holdings in Ares Management by 4.2% in the fourth quarter. Wedbush Securities Inc. now owns 2,030 shares of the asset manager's stock worth $328,000 after purchasing an additional 81 shares during the last quarter. 50.03% of the stock is currently owned by hedge funds and other institutional investors.

Ares Management News Roundup

Here are the key news stories impacting Ares Management this week:

• Positive Sentiment: Record fundraising supports future fee growth. Ares raised more than $36 billion during the second quarter as institutions continued allocating capital to private credit. Assets under management exceeded $671 billion at June 30, strengthening the company’s recurring management-fee base. Ares hauls record $36 billion on private credit fundraising momentum
• Positive Sentiment: Fee-related earnings and investment flows improved. Fee-related earnings reached $491.1 million, while after-tax realized income was $467.6 million, or $1.29 per share. The results indicate continued operating momentum despite mixed revenue performance. Ares Management Reports $150.6 Million Q2 Net Income
• Positive Sentiment: Earnings exceeded consensus and direct-lending activity remained robust. Second-quarter earnings of $1.29 per share were slightly above the $1.28 consensus and increased from $1.03 a year earlier. Ares also closed approximately $8.2 billion of U.S. direct-lending commitments across 69 transactions, bringing the 12-month total to about $52.3 billion. Ares Management Corporation Reports Second Quarter 2026 Results
• Neutral Sentiment: Shareholder distributions were maintained. Ares declared a quarterly common-stock dividend of $1.35 per share, payable September 30, 2026, along with a dividend on its Series B mandatory convertible preferred stock. Ares Management Reports $150.6 Million Q2 Net Income
• Negative Sentiment: Revenue missed expectations, and private-credit losses could pressure sentiment. Analysts noted that quarterly revenue fell short of estimates even as earnings met or narrowly exceeded forecasts. Separately, reports highlighted rising defaults and an uptick in non-accruals at Ares-related private-credit funds, raising concerns about portfolio credit quality as the platform expands. Ares Private-Credit Fund Reports Rising Defaults, and New Deals

Wall Street Analyst Weigh In

Several brokerages recently issued reports on ARES. The Goldman Sachs Group decreased their price target on shares of Ares Management from $165.00 to $131.00 and set a "buy" rating for the company in a research note on Tuesday, April 7th. Morgan Stanley set a $160.00 target price on shares of Ares Management in a research note on Tuesday, July 21st. TD Cowen lifted their target price on shares of Ares Management from $144.00 to $153.00 and gave the company a "buy" rating in a report on Tuesday, June 23rd. Keefe, Bruyette & Woods upgraded Ares Management to a "hold" rating in a research note on Monday, July 20th. Finally, Citizens Jmp reduced their price objective on Ares Management from $190.00 to $160.00 and set a "market outperform" rating for the company in a research report on Thursday, July 9th. One analyst has rated the stock with a Strong Buy rating, eleven have given a Buy rating and six have issued a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $158.93.

About Ares Management

Ares Management Corporation NYSE: ARES is a global alternative asset manager that provides investment solutions across credit, private equity and real estate. The firm originates and manages capital across a range of strategies including direct lending, syndicated and special situations credit, private equity buyouts and growth investments, and real estate equity and debt. Ares serves institutional investors, insurance companies, pension funds, sovereign wealth funds, and high‑net‑worth clients through both commingled funds and bespoke managed account structures.

Within credit, Ares offers strategies spanning leveraged loans, structured credit, opportunistic and distressed debt, and specialty finance, with an emphasis on underwriting, portfolio construction and active asset management.

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