Business Context and Reporting Period
Company: KKR & Co. Inc.
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Three months ended March 31, 2026
Business Overview: KKR is a global investment firm operating through three segments: Asset Management (private equity, credit, real assets), Insurance (Global Atlantic), and Strategic Holdings. The company manages approximately $758 billion in Assets Under Management (AUM) as of March 31, 2026.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $4.32 billion | $3.11 billion |
| Net Income (GAAP) | $277.5 million | $684.5 million |
| Net Income Attributable to KKR & Co. Inc. | $405.2 million | $(185.9) million |
| Net Income Attributable to Common Stockholders | $364.8 million | $(185.9) million |
| Diluted EPS (Common) | $0.38 | $(0.22) |
| Total Segment Earnings (Non-GAAP) | $1.63 billion | $1.39 billion |
| Adjusted Net Income (Non-GAAP) | $1.25 billion | $1.03 billion |
| Cash and Cash Equivalents (Total) | $19.49 billion | $18.39 billion |
| Total Debt Obligations | $53.0 billion | $53.0 billion |
Note: Debt obligations include $49.2 billion in Asset Management/Strategic Holdings and $3.8 billion in Insurance.
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased by $1.21 billion (39%) year-over-year, driven primarily by a $1.23 billion increase in Insurance revenues and a $300 million increase in Asset Management fees.
- Profitability Shift: While GAAP Net Income decreased due to investment losses and noncontrolling interest allocations, Net Income Attributable to KKR & Co. Inc. swung from a loss of $185.9 million in Q1 2025 to a profit of $405.2 million in Q1 2026.
- Investment Performance: Asset Management and Strategic Holdings reported a net loss from investment activities of $316.4 million in Q1 2026, compared to a net gain of $1.09 billion in Q1 2025. This was driven by mark-to-market losses on private equity and credit investments.
- Insurance Segment: Insurance Operating Earnings increased slightly to $260.3 million from $258.8 million, supported by higher net investment income ($1.99 billion vs. $1.78 billion) despite higher net policy benefits and claims.
- Capital Allocation: The company repurchased 2.17 million shares of common stock in Q1 2026. A dividend of $0.195 per share was declared for common stockholders.
Guidance, Outlook, and Risks
- Dividend Policy: KKR announced a quarterly dividend policy of $0.195 per share of common stock, totaling $0.78 annually. A dividend of $0.78125 per share was declared for Series D Mandatory Convertible Preferred Stock.
- Realizations Outlook: Management expects to realize at least $1.2 billion in performance and investment income from pending transactions in the remainder of 2026, with approximately 80% expected to be realized performance income.
- Acquisitions: On May 4, 2026 (subsequent to period end), KKR closed the acquisition of Arctos Partners, LP.
- Legal Proceedings:
- Kentucky Matter: Ongoing litigation involving the Commonwealth of Kentucky regarding fiduciary duties. A settlement agreement reached in January 2025 terminated after the court declined to approve it. KKR continues to defend against claims.
- DOJ Antitrust: The Department of Justice filed a civil antitrust complaint in January 2025 alleging violations of the Hart-Scott-Rodino Act. KKR has filed a motion to dismiss and a counter-complaint.
- Market Risks: The company faces volatility from geopolitical tensions, trade tariffs, and interest rate fluctuations. A 10% decrease in the fair value of Level III investments could materially impact earnings.
Key Facts for Investor Verification
- Non-GAAP Reconciliations: Verify the reconciliation of Total Segment Earnings ($1.63 billion) and Adjusted Net Income ($1.25 billion) to GAAP Net Income, noting the significant impact of unrealized investment gains/losses and noncontrolling interests.
- Insurance Liability Sensitivities: Review Note 17 for sensitivity analysis on policy liabilities, particularly the $1.4 billion market risk benefit liability and its exposure to interest rate and equity market changes.
- Clawback Obligations: Note the $195 million of carried interest subject to clawback obligations if funds were liquidated at current fair values.
- Debt Covenants: Confirm compliance with debt covenants, specifically the debt-to-equity ratio for the KCM Borrowers and the debt-to-total-capitalization ratio for Global Atlantic.
- Series D Preferred Stock: Monitor the mandatory conversion date (expected March 1, 2028) and the impact of cumulative dividends on common stock distributions.