OWL Q2 Earnings Meet Estimates on Revenue & AUM Growth, Stock Up 6.4%

Net income available to the company (GAAP basis) was $11.4 million, down 35% from $17.4 million in the prior-year quarter.

OWL’s FRE Revenues Improve, Expenses Rise

FRE (Fee-Related Earnings) revenues increased 7% from the prior-year quarter to $693.6 million. It beat the Zacks Consensus Estimate of $685.9 million.

Total GAAP revenues rose 7% year over year to $753.1 million. The rise was driven by an increase in management fees and administrative, transaction and other fees.

Total GAAP expenses increased 5% year over year to $636.6 million. The rise was due to increases in compensation and benefits costs and general, administrative and other expenses.

AUM Balance Increases

As of June 30, 2026, total AUM was $319 billion, up 12% year over year, primarily driven by capital raised, changes in debt and appreciation across the business, partially offset by distributions.

Fee-paying AUM of $190.6 billion as of June 30, 2026, increased 7%. The increase was driven by capital raised across the business and deployment in Credit, partially offset by distributions. Permanent Capital of $225 billion increased 10%.

In the reported quarter, Blue Owl raised $7.8 billion in new capital commitments. The company also had $31.1 billion of AUM not yet paying fees, which is expected to generate approximately $380 million in annual FRE management fees once deployed.

Total equity fundraise of $7.6 billion in the quarter was driven by $4.4 billion in Real Assets, $1.8 billion in Credit and $1.3 billion in GP Strategic Capital.

OWL’s Balance Sheet Strong

As of June 30, 2026, Blue Owl had $169 million in cash and cash equivalents and available capacity under its revolving credit facility of $1.09 billion.

At the end of the second quarter, debt obligations were $3.86 billion.

Our Viewpoint on OWL

Blue Owl’s performance is expected to continue benefiting from strong fundraising across its investment platforms and higher AUM. This will support the company’s FRE revenue growth going forward. However, near-term pressure from private-credit liquidity strains, borrower quality worries and rising expenses is expected to remain a headwind for the company.

Currently, Blue Owl carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of OWL’s Peer Stocks

KKR & Co. Inc. KKR reported second-quarter 2026 adjusted net income per share of $1.63, surpassing the Zacks Consensus Estimate of $1.42. The bottom line rose from $1.18 in the prior-year quarter.

Results have primarily reflected impressive growth in AUM and transaction fees for the capital markets business. However, an increase in expenses acted as a headwind for KKR.

Blackstone’s BX second-quarter 2026 distributable earnings of $1.52 per share outpaced the Zacks Consensus Estimate of $1.33. The figure soared 26% from the prior-year quarter.

BX’s results benefited from a rise in AUM and higher revenues. An increase in GAAP expenses was the undermining factor.

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This article originally published on Zacks Investment Research (zacks.com).

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