TPG reported third quarter results that exceeded Wall Street’s revenue expectations, but the market responded negatively, likely due to a miss on adjusted operating income. Management attributed the quarter’s revenue growth to robust fundraising across private equity and credit, as well as record capital deployment. CEO Jon Winkelried pointed out that TPG’s capital formation was driven by strong client demand and differentiated performance, stating, “We raised a near record $18 billion of capital, up 60% from the second quarter.” Despite these positives, concerns about margin sustainability and the timing of performance-related earnings weighed on investor sentiment.
Is now the time to buy TPG? Find out in our full research report (it’s free for active Edge members).
TPG (TPG) Q3 CY2025 Highlights:
- Revenue: $512.1 million vs analyst estimates of $499.3 million (12% year-on-year growth, 2.6% beat)
- Adjusted EPS: $0.53 vs analyst expectations of $0.57 (7% miss)
- Adjusted EBITDA: $229.7 million (44.9% margin, 1,421% year-on-year growth)
- Operating Margin: 43.8%, up from 2.2% in the same quarter last year
- Market Capitalization: $8.43 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 TPG’s Q3 Earnings Call
-
Glenn Schorr (Evercore): Asked about the realization pipeline and liquidity prospects given the age of TPG’s funds. CFO Jack Weingart explained that many underlying investments are still young, but TPG is constructive on liquidity and expects future exits to drive higher performance-related earnings.
-
Craig Siegenthaler (Bank of America): Inquired about the potential for increased realizations amid rising IPO and M&A activity. CEO Jon Winkelried emphasized TPG’s intentional approach to exits, stating they remain active sellers based on portfolio and market conditions rather than forecasts.
-
Kenneth Worthington (JPMorgan): Queried risks and opportunities from AI disruption in portfolio companies. President Todd Sisitsky described TPG’s proactive AI investment strategy, noting both risks and opportunities are evaluated on a company-by-company basis with an emphasis on vertical software, fintech, and cybersecurity.
-
Alexander Blostein (Goldman Sachs): Probed credit platform growth and new product launches. Winkelried detailed the multi-strategy credit approach, highlighting increased capital formation, insurance partnerships, and upcoming product rollouts as key drivers of future credit AUM growth.
-
Steven Chubak (Wolfe Research): Asked about long-term sustainability of fee-related earnings margins. Weingart reiterated expectations for margin expansion but cautioned that ongoing investments could moderate the rate of improvement over the next few years.
Catalysts in Upcoming Quarters
As we look to upcoming quarters, our analysts will be watching (1) evidence of sustained fundraising momentum and product adoption in the private wealth and insurance channels, (2) deployment of accumulated dry powder across credit and private equity, and (3) trends in fee-related earnings margin as investments in new products and distribution scale. The pace and quality of exits from existing funds will also serve as a key indicator of TPG’s ability to convert accrued performance into realized earnings.
TPG currently trades at $55.07, in line with $54.85 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
Our Favorite Stocks Right Now
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
