On February 4, 2025, KKR & Co Inc (KKR, Financial) released its 8-K filing detailing its financial performance for the fourth quarter of 2024. KKR, a leading global investment firm with $624.4 billion in total managed assets, reported significant growth across its core segments of asset management and insurance.
Performance Overview
KKR reported a GAAP net income attributable to common stockholders of $1.13 billion for the fourth quarter, translating to $1.18 per diluted share. This result fell short of the analyst estimate of $1.41 per share. The company's total revenues for the quarter were $3.26 billion, exceeding the estimated $1,952.43 million. However, for the full year 2024, KKR achieved total revenues of $21.88 billion, showcasing a robust year-over-year growth.
Key Financial Achievements
KKR's Fee Related Earnings (FRE) reached $843 million for the quarter, marking a 25% increase year-over-year. Total Operating Earnings (TOE) were $1.1 billion, up 19% from the previous year. Adjusted Net Income (ANI) for the quarter was $1.2 billion, a 33% increase year-over-year. These metrics are crucial as they reflect the company's ability to generate recurring revenue streams, a key indicator of stability in the asset management industry.
Segment Performance and Strategic Investments
The Asset Management segment saw a 37% increase in Fee Related Earnings for the year, driven by growth in management fees and capital markets transaction fees. KKR's Assets Under Management (AUM) grew to $638 billion, a 15% increase year-over-year, with Fee Paying AUM reaching $512 billion.
In the Strategic Holdings segment, KKR announced plans to increase its ownership in USI Insurance Services, 1-800 Contacts, and Heartland Dental by approximately $1.1 billion. This strategic move is expected to enhance the firm's financial performance in the coming years.
Financial Statements and Metrics
KKR's balance sheet remains strong, with cash and short-term investments totaling $4.23 billion. The company's net cash and investments stand at $6.67 billion, providing a solid foundation for future growth and investment opportunities.
Joseph Y. Bae and Scott C. Nuttall, Co-Chief Executive Officers, stated, "2024 was a strong year for KKR. Our key financial metrics including Fee Related Earnings, Total Operating Earnings and Adjusted Net Income all grew over 35% year-over-year as the operating backdrop continued to improve."
Analysis and Outlook
KKR's performance in the fourth quarter of 2024 highlights its robust operational capabilities and strategic foresight. The firm's ability to raise over $100 billion in capital and invest a record amount on behalf of its clients underscores its leadership in the alternative asset management space. Despite challenges in meeting revenue estimates, KKR's strong earnings growth and strategic investments position it well for continued success in 2025 and beyond.
```Explore the complete 8-K earnings release (here) from KKR & Co Inc for further details.
