Abstract

Ares Management LP will report second-quarter 2026 results on July 31, 2026 Pre-MKt; this preview summarizes consensus forecasts for revenue, margins and EPS, compares them with the prior quarter, and highlights segment trends likely to drive the print and near-term stock reaction.

Market Forecast

For the June quarter of 2026, the market’s baseline view anticipates revenue of 1.20 billion US dollars, up 23.33% year over year, EBIT of 415.90 million US dollars, and EPS of 1.29, with year-over-year growth of 19.24%. The prior quarter’s actuals provide a context for margin expectations: gross margin ran at 36.08% and net profit margin at 10.21%; given the earnings mix, investors expect broadly stable to slightly firmer margins year over year, while EPS growth near 19% implies moderate operating leverage. Management fees remain the broad anchor of top line, with last quarter’s mix showing management fees at 0.99 billion US dollars, incentive fees at 0.16 billion US dollars, and balance-sheet and distribution income contributing a smaller portion; the outlook focuses on steady fee growth and measured performance fees. The segment with the largest upside potential near term is management fees, supported by higher fee-paying AUM and deployment across credit and real assets; the latest run-rate implies near-billion-dollar quarterly revenue and a healthy year-over-year increase as capital formation and deployment normalize.

Last Quarter Review

In the March quarter of 2026, Ares Management LP posted revenue of 1.40 billion US dollars, a gross profit margin of 36.08%, GAAP net profit attributable to the parent company of 0.14 billion US dollars, a net profit margin of 10.21%, and adjusted EPS of 1.24, with revenue rising 57.79% year over year and adjusted EPS up 13.76% year over year. Quarter over quarter, net profit attributable to shareholders accelerated by 162.85%. A notable operational highlight was the sizable beat on revenue relative to street expectations alongside robust EBIT growth. By line of business, management fees delivered 0.99 billion US dollars in revenue with incentive fees contributing 0.16 billion US dollars and distribution-related income at 0.15 billion US dollars, underscoring fee-based durability and performance sensitivity.

Current Quarter Outlook

Main business: Fee-related earnings trajectory and sensitivity

Management fees are positioned to drive the bulk of this quarter’s revenue, reflecting higher average fee-paying AUM, closed-end fund step-ups from deployment, and steady base fees across liquid and private credit. With consensus revenue near 1.20 billion US dollars and EPS at 1.29, fee-derived margins are expected to keep gross margin close to the mid-30s and support double-digit EPS growth. The operational backdrop—continued fundraising across flagship private credit and infrastructure vehicles and deployment into higher spread assets—supports a gradual uplift in fee-related earnings. Should performance fees materialize from realizations, EBIT could outpace revenue, but the core thesis remains anchored in dependable base fees rather than episodic carry.

Most promising business: Scaling private credit and real assets

The most compelling growth lever remains private credit and adjacent real assets strategies where Ares Management LP continues to see robust origination and deployment. As risk-free rates stabilize from peak levels, direct lending volumes and spreads remain supportive, allowing incremental fee-paying AUM growth to translate into management-fee uplift. The preceding quarter’s revenue composition—management fees of 0.99 billion US dollars and incentive fees of 0.16 billion US dollars—suggests a runway for incremental performance income if exit markets stay open, but even absent that, a larger platform underpins steady growth. The combination of new fund launches, step-ups from investment pace, and potential for increased performance fees creates optionality that can broaden EBIT expansion beyond the current forecast of 415.90 million US dollars.

Stock price drivers this quarter: Fundraising pace, deployment, and carry realization

Investors are likely to focus on three live catalysts: fundraising momentum in private credit and infrastructure, net deployment versus repayments, and the cadence of carry-generating realizations. A net-positively skewed fundraising print can sustain management-fee growth and provide visibility into 2026–2027 revenue, while deployment and origination volumes indicate how rapidly fee-paying AUM converts into revenue. Carry realization remains the wildcard; even modest upside from realizations can lift net margins above the prior quarter’s 10.21% and push EPS above the 1.29 baseline. Conversely, any slowdown in deployment or muted realizations may compress operating leverage and keep EBIT closer to forecasts.

Analyst Opinions

Across recent previews, bullish views dominate, citing durable fee growth and improving visibility into carry. Multiple sell-side voices point to sustained fundraising in private credit and real assets as the basis for revenue growth around the low-20% range and EPS growth near 20%, consistent with the 1.29 EPS projection and 1.20 billion US dollars revenue baseline. Supportive opinions highlight that fee-paying AUM continues to compound and that the firm’s diversified platform provides resilience if performance fees are volatile. The bullish majority expects stable to slightly higher margins versus the prior quarter and sees the setup favorable for upside if realizations are better than modeled.