Athene Holding Ltd. Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. Athene Holding Ltd. (Athene) is a leading financial services company specializing in retirement savings products, including annuities and funding agreements. The company is a direct subsidiary of Apollo Global Management, Inc. (AGM), which owns 100% of Athene's common stock. Athene operates through US and Bermuda subsidiaries, utilizing a strategy of sourcing long-duration liabilities and deploying capital into high-quality fixed income and alternative assets managed by Apollo.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $3.67 billion | $4.19 billion |
| Net Income (Loss) | $(1.48) billion | $759 million |
| Net Income (Loss) Attributable to Common Stockholders | $(1.97) billion | $420 million |
| Spread Related Earnings (SRE) | $719 million | $804 million |
| Net Investment Spread | 1.34% | 1.65% |
| Total Assets | $447.8 billion | $442.2 billion |
| Total Liabilities | $414.1 billion | $406.6 billion |
| Debt | $7.84 billion | $7.85 billion |
| Cash and Cash Equivalents | $17.85 billion | $15.00 billion |
Material Changes vs. Prior Period
- Net Loss vs. Profit: The company reported a net loss of $1.48 billion in Q1 2026 compared to a net income of $759 million in Q1 2025. This swing was primarily driven by a $1.5 billion increase in income tax expense due to a one-time valuation allowance on Bermuda deferred tax assets.
- Revenue Decline: Total revenues decreased by $518 million (12%) to $3.67 billion. This was driven by a $1.25 billion decrease in investment-related gains (losses), largely due to unfavorable fair value changes in mortgage loans and reinsurance assets caused by rising US Treasury rates.
- Operating Performance: Despite the GAAP loss, Spread Related Earnings (SRE) remained positive at $719 million, down 11% from $804 million in Q1 2025. The decrease in SRE was driven by higher costs of funds (up 33 basis points) and increased financing costs, partially offset by higher net investment earnings.
- Investment Portfolio: Total investments increased to $390.1 billion. The portfolio experienced unrealized losses of approximately $2.0 billion on Available-for-Sale (AFS) securities due to rising interest rates and credit spread widening.
Guidance, Outlook, and Risks
- Tax Impact: In January 2026, Athene revoked ACRA's election to be subject to the Bermuda Corporate Income Tax (CIT) following OECD guidance exempting US-parented groups from Pillar Two taxes. Consequently, the company recorded a full valuation allowance against Bermuda deferred tax assets, resulting in a $1.7 billion non-cash tax charge. Management expects this to have favorable long-term tax implications.
- Market Environment: Rising interest rates in Q1 2026 negatively impacted the fair value of fixed income assets and mortgage loans. However, higher rates on new investment deployments are expected to improve future net investment earned rates.
- Capital Position: As of March 31, 2026, Athene estimated approximately $6.2 billion in deployable capital, including $1.7 billion in excess equity capital and $2.7 billion in undrawn capital at ACRA. The company maintains strong liquidity with $130.0 billion in liquid assets (excluding restricted assets).
- Key Risks:
- Interest Rate Risk: A 100 basis point parallel increase in rates would decrease point-in-time income before taxes by an estimated $4.7 billion due to fair value changes.
- Equity Market Risk: Unfavorable equity performance in Q1 2026 increased the cost of hedging indexed annuity products.
- Regulatory/Tax: Uncertainty regarding the enactment of OECD Pillar Two guidance in the UK and potential changes to tax laws.
Investor Verification Checklist
- Tax Provision: Verify the sustainability of the $1.7 billion one-time tax charge and the long-term impact of revoking the Bermuda CIT election on future effective tax rates.
- Investment Valuation: Review the $13.6 billion in gross unrealized losses on AFS securities to assess credit quality and the likelihood of recovery versus forced sales.
- Cost of Funds Trend: Monitor the 33 basis point increase in cost of funds to ensure it does not compress the net investment spread further in a rising rate environment.
- Reinsurance Counterparty Risk: Assess the concentration of reinsurance recoverables, particularly related to ACRA and third-party reinsurers, given the significant reliance on reinsurance structures.
- Deployable Capital: Confirm the $6.2 billion deployable capital figure and the company's ability to execute growth strategies (organic and inorganic) despite the GAAP loss.