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KKR NYSE· KKR & Co. Inc
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KKR NYSE· KKR & Co. Inc
Earnings report Q3 2023

KKR's Revenue Surges in Latest Quarter, Driven by Strong Performance in Asset Management Segment

Segments of revenue

KKR reported total revenues of $3.32 billion for the three months ended September 30, 2023, a significant increase compared to $1.86 billion in the same period last year. The company's revenue is primarily generated from three segments: Asset Management, Capital Allocation-Based Income (Loss), and Insurance.

  • Asset Management: The Asset Management segment contributed $655.37 million in fees and other revenues, slightly lower than the $673.93 million reported in the previous year's quarter. However, the segment's overall performance remained strong, driven by solid management fees and fee-related earnings. Transaction and monitoring fees, net, amounted to $124.01 million, while fee-related performance revenues reached $20.44 million.

  • Capital Allocation-Based Income (Loss): KKR reported a significant improvement in this segment, with revenues of $1.01 billion compared to a loss of $572.86 million in the same period last year. The positive performance was primarily attributed to the impact of closing collateralized loan obligations (CLOs) and higher interest rates on floating rate investments. Additionally, a higher level of interest income from consolidated private credit funds contributed to the segment's growth.

  • Insurance: KKR's insurance segment generated $534.23 million in net premiums and policy fees, reflecting a decline compared to the $798.69 million reported in the previous year's quarter. The decrease can be attributed to various factors, including changes in the insurance market and policy dynamics.

Strengths

KKR demonstrated strong financial performance in the latest quarter, with a significant increase in total revenues. The Asset Management segment remained a key driver of revenue growth, supported by solid management fees and fee-related earnings. The company's ability to close CLOs and capitalize on higher interest rates on floating rate investments contributed to the positive performance in the Capital Allocation-Based Income (Loss) segment. Furthermore, KKR's consolidated private credit funds experienced an increase in interest income due to higher capital deployment.

Challenges

While KKR's overall performance was robust, the insurance segment faced challenges with a decline in net premiums and policy fees. This decline may be attributed to various factors, including market dynamics and changes in policy dynamics. The company should closely monitor and address these challenges to ensure sustained growth in the insurance segment.

Noteworthy

It is worth mentioning that KKR's total revenues for the quarter reached $3.32 billion, a significant increase compared to the same period last year. This growth can be attributed to the strong performance of the Asset Management segment and the improved results in the Capital Allocation-Based Income (Loss) segment. The company's ability to adapt to market conditions and capitalize on investment opportunities contributed to its noteworthy financial performance.

Summary

KKR delivered a strong financial performance in the latest quarter, with total revenues reaching $3.32 billion. The company's Asset Management segment remained a key revenue driver, supported by solid management fees and fee-related earnings. The Capital Allocation-Based Income (Loss) segment significantly improved, benefiting from the impact of closing CLOs and higher interest rates. However, the insurance segment faced challenges with a decline in net premiums and policy fees. Overall, KKR's ability to adapt to market conditions and capitalize on investment opportunities contributed to its impressive performance in the quarter.

Source documents

Form 10-Q  filed on Nov 09, 2023
41 pages scanned

Reference data

Company financials Q3 revenue 5.89B
Analyst estimates Q3 EPS beat by 9.50%
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