Abstract

KKR & CO INC 6.875% NOTES DUE 01/06/2065 USD25 will report on February 05, 2026 Pre-Market, with consensus pointing to improved quarterly revenue and stable profitability, setting expectations for modest growth against a mixed backdrop.

Market Forecast

For the current quarter, the company’s forecast indicates revenue of USD 2.04 billion, up 4.33% year over year, with EBIT of USD 1.29 billion and EPS of USD 1.17; the year-over-year EPS change is expected to be -8.73%. The model-implied gross profit margin and net profit margin trends are expected to stay broadly consistent with recent quarters, though no explicit forecast margins were provided. The main business outlook highlights steady core operating drivers with resilient fee-related income, while the most promising segment is anticipated to be investment income, supported by improving mark-to-market dynamics and selective realizations.

Last Quarter Review

Last quarter, the company recorded revenue of USD 1.74 billion, a gross profit margin of 55.49%, GAAP net profit attributable to the parent company of USD 0.90 billion, a net profit margin of 12.67%, and adjusted EPS of USD 1.41, with year-over-year adjusted EPS growth of 2.17%. A notable highlight was quarter-on-quarter net profit growth of 76.50%, reflecting stronger investment performance and disciplined cost control. Main business performance reflected stable fee-based revenues and improving investment results; specific revenue breakdowns by segment were not disclosed.

Current Quarter Outlook (with major analytical insights)

Main Business Outlook

The principal earnings engine this quarter is expected to come from fee-related activities and investment income supporting overall stability in revenue and EBIT. A forecast revenue of USD 2.04 billion suggests a moderate rebound from the prior quarter’s USD 1.74 billion, aligning with an anticipated EPS of USD 1.17. The company’s margin profile last quarter—gross profit margin at 55.49% and net profit margin at 12.67%—sets a baseline for this quarter’s profitability trajectory, with operating leverage largely dependent on realized gains and performance fees. Although the year-over-year EPS estimate indicates a decline of 8.73%, the underlying EBIT growth estimate of 8.75% implies that expense timing and mix effects, rather than core earnings power, may weigh on per-share results.

Fee-related revenue tends to be more stable and is typically driven by assets under management and management fee accruals, which likely supported last quarter’s results and should provide a buffer this quarter. The gap between forecast EBIT growth and earnings per share pressure often reflects higher interest expense, compensation accruals, or revenue mix shifts away from performance fees to steadier fee income. If performance fee generation improves relative to last quarter’s realized pace, the net margin could show incremental expansion from the 12.67% baseline, but guidance does not explicitly provide margin figures. The forecast increase in revenue by 4.33% year over year indicates the operating environment remains constructive, even as EPS faces a short-term normalization.

Most Promising Segment

Investment income appears best positioned to drive upside risk, particularly if market conditions sustain supportive valuation marks and there is a pipeline of realizations. Last quarter’s strong quarter-on-quarter net profit improvement of 76.50% highlights sensitivity to investment performance and realization timing. Against a forecast EPS of USD 1.17 and EBIT of USD 1.29 billion, a favorable realization schedule could have an outsized effect on margins, given the 55.49% gross margin benchmark. In this context, investment income’s contribution to revenue growth and profit conversion could exceed the company-wide forecast if exit activity and mark-to-market tailwinds persist.

This segment’s promise is also tied to diversification across strategies and vintages, which can reduce volatility in any single asset class during choppy markets. The quarter’s 4.33% forecast revenue growth suggests management expects sustained momentum, which often correlates with ongoing deployment and subsequent fee accruals that support investment activity. Should capital markets remain open for IPOs and strategic sales, the conversion of unrealized gains to realized performance fees could add incremental EBIT not fully captured in base forecasts.

Key Stock Price Drivers This Quarter

The most sensitive drivers for the stock price this quarter are expected realization activity, performance fees, and the trajectory of fee-related earnings relative to compensation and interest costs. EPS guidance down 8.73% year over year despite EBIT growth of 8.75% implies margin pressure from non-operating items or revenue mix, and price action is likely to react to disclosures around these line items. If management demonstrates operating discipline that preserves the 55.49% gross margin while expanding net margins from the 12.67% prior quarter level, market sentiment could skew positively even if headline EPS is below last year’s level.

Another critical driver will be the clarity around assets under management growth and fundraising updates, which underpin recurring fee revenues. The degree of mark-to-market tailwinds in the investment portfolio and the timing of monetizations will influence the volatility of quarterly results and investor confidence in full-year targets. Finally, any commentary on capital allocation—particularly balance sheet leverage and interest expenses—will be scrutinized, given the apparent EPS compression versus EBIT growth that suggests higher below-the-line costs.

Analyst Opinions

The prevailing institutional stance appears supportive, with the majority leaning toward constructive expectations for revenue stability and EBIT expansion. Consensus points to revenue of USD 2.04 billion, EBIT of USD 1.29 billion, and EPS of USD 1.17, with the year-over-year revenue growth rate at 4.33% and EBIT growth at 8.75%. Analysts emphasize execution on fee-related earnings and disciplined cost control as key to maintaining the 55.49% gross margin baseline while potentially stabilizing the net margin around recent levels.

Several research notes focus on the durability of fee revenues even as performance fees vary quarter to quarter, arguing that the forecasted decline in EPS by 8.73% is consistent with normal variability and not indicative of deteriorating fundamentals. The constructive view rests on improving investment marks and a pipeline of realizations that, if timed favorably, could lift profitability above base case. In sum, the majority outlook anticipates a steady quarter with modest top-line growth, resilient EBIT, and manageable EPS headwinds linked to mix and below-the-line items rather than core operating weakness.