Ares Management’s third quarter was marked by strong financial performance that exceeded Wall Street’s expectations, with the market reacting positively to the results. Management attributed the outperformance to robust growth in management fees, significant capital deployment, and strong investor demand across both institutional and wealth channels. CEO Michael Arougheti highlighted, “We raised more than $30 billion of new capital in the quarter, our highest quarter on record,” underscoring the firm’s fundraising strength. The quarter also saw broad-based contributions across credit, infrastructure, and real estate platforms, reflecting the diversity and scale of Ares’ investment strategies.
Is now the time to buy ARES? Find out in our full research report (it’s free for active Edge members).
Ares (ARES) Q3 CY2025 Highlights:
- Revenue: $1.14 billion vs analyst estimates of $1.11 billion (35.7% year-on-year growth, 2.5% beat)
- Adjusted EPS: $1.19 vs analyst estimates of $1.14 (4% beat)
- Adjusted Operating Income: $455.5 million vs analyst estimates of $371.4 million (40.1% margin, 22.7% beat)
- Operating Margin: 34.5%, up from 33.5% in the same quarter last year
- Market Capitalization: $33.91 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Ares’s Q3 Earnings Call
- Alexander Blostein (Goldman Sachs) asked about Ares’ positioning if real estate fundraising from institutional and wealth clients accelerates. CEO Michael Arougheti emphasized scale and vertical integration, noting, “We are coming out of a period of pretty meaningful supply constraint,” and cited Ares’ global reach as a differentiator.
- Steven Chubak (Wolfe Research) inquired about the sustainability of fundraising momentum, especially given tough year-over-year comparisons. Arougheti explained that diversification across 40+ funds and new product channels has raised the fundraising floor, reducing volatility in annual fundraising levels.
- Craig Siegenthaler (Bank of America) questioned the impact of potentially lower yields in private credit on fundraising. Arougheti responded that investor demand is driven by relative, not absolute, yield: “Private credit spreads are still offering a significant amount of excess return relative to the loan market.”
- William Katz (Cowen) sought an update on the GCP transaction and its implications for growth. CFO Jarrod Phillips discussed the expansion into data centers and global real estate, highlighting the opportunity for high-quality development projects and enhanced platform scale.
- Brian Mckenna (Citizens) asked about the importance of portfolio management in direct lending recoveries. Arougheti credited Ares’ large and experienced portfolio management team for delivering high recovery rates and noted, “We actually had 100 basis points plus of positive impact to our returns because of that phenomenon.”
Catalysts in Upcoming Quarters
In coming quarters, our analyst team is focused on (1) monitoring continued fundraising success—especially as large flagship funds reach final closes, (2) tracking the pace of deployment across credit, infrastructure, and real estate as market activity rebounds, and (3) watching for margin improvements from integration of acquisitions and scaling of new products. Progress on global wealth expansion and the impact of macroeconomic shifts on private credit demand will also be key areas of attention.
Ares currently trades at $154.09, up from $148.63 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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