Private equity firm Carlyle Group (NASDAQ: CG) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 15.1% year on year to $1.09 billion. Its non-GAAP profit of $0.81 per share was 18.2% below analysts’ consensus estimates.

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StockStory’s Take

Carlyle delivered a fourth quarter that was well received by the market, as both revenue and non-GAAP earnings per share came in above Wall Street’s expectations. Management credited the performance to robust global fundraising, continued strength in private equity exits, and record inflows across its platform. CEO Harvey Schwartz specifically highlighted the success of recent IPOs such as Medline and ongoing capital returns to investors, positioning the company’s portfolio for current market conditions. Fee-related earnings and margin expansion were also supported by the scale and operating discipline across key business lines.

Looking ahead, Carlyle’s management outlined a strategy focused on expanding global wealth channels, enhancing origination capabilities in private credit, and maintaining operational discipline to drive future margin growth. Management believes that recent investments in talent and technology will support further growth in asset management and credit, while diversified fundraising pipelines are expected to underpin continued inflows. CFO Justin Plouffe emphasized, “We remain focused on investing for growth and expect that margins will further expand as revenues continue to scale.”

Key Insights from Management’s Remarks

Carlyle’s management attributed the quarter’s results to strong momentum in global fundraising and successful realizations across private equity and credit, as well as expansion into new client segments and geographies.

• Global Private Equity Exits: The firm achieved notable exits through IPOs, including Medline, which was recognized as the largest sponsor-backed IPO of 2025. Other successful transactions, such as Standard Aero and Hexaware, contributed to significant capital returned to investors and demonstrated Carlyle’s ability to monetize investments in diverse regions and sectors.

• AlpInvest Platform Growth: Carlyle AlpInvest delivered record fee-related earnings and distributable earnings, supported by strong institutional and wealth fundraising. The segment closed its largest-ever secondary strategy and expanded co-investment offerings, reinforcing its scale and positioning within the private markets ecosystem.

• Credit Platform Expansion: The global credit business saw record originations, particularly in direct lending, and maintained low realized losses across the portfolio. Strategic hires, including a new head of direct lending, were made to strengthen origination and integration, while Carlyle also retained its leadership in collateralized loan obligations (CLOs), pricing 39 deals in the year.

• Wealth Channel Progress: The wealth management initiative nearly doubled evergreen wealth assets under management, supported by the soft launch of a private equity solution for individual investors. Management expanded the wealth organization, adding specialized capabilities and targeting long-term growth opportunities in retirement and retail channels.

• Margin Expansion and Operational Scale: Fee-related earnings margins reached a record 47%, reflecting successful cost management and the scalability of Carlyle’s operating model. Management credited these results to a combination of disciplined capital allocation, strategic resource investments, and the ability to leverage existing infrastructure as the business grows.

Drivers of Future Performance

Carlyle expects its momentum to continue, with emphasis on diversified fundraising, global wealth channel growth, and further advances in private credit origination underpinning its outlook for 2026.

• Fundraising and Asset Diversification: Management believes continued strength in institutional and wealth fundraising, along with the rollout of new flagship vehicles, will support further growth in assets under management. The focus on diversification by geography, client type, and product offering is expected to help mitigate market volatility and sustain inflows.

• Margin Expansion Priorities: Operational scale and discipline are expected to drive additional margin improvements. Management highlighted that ongoing investment in high-growth areas, such as global wealth and insurance solutions, should be balanced by scalable infrastructure and cost controls, supporting fee-related earnings growth.

• Credit Platform Resilience: Carlyle anticipates its credit business will remain durable through varied market cycles due to its diversified approach and recent enhancements in origination capability. Management views the credit portfolio as well-positioned for continued investor demand, with low historical loss rates and an expanded origination team providing a solid foundation for future performance.

Catalysts in Upcoming Quarters

In the quarters ahead, the StockStory team will be watching (1) whether Carlyle can maintain its pace of private equity realizations and capital returns in a shifting macro environment, (2) sustained growth and product launches in the global wealth and retirement channels, and (3) continued expansion and resilience in private credit origination and CLO issuance. Execution on operational scale and margin improvement will also be critical signposts for long-term value creation.

Carlyle currently trades at $58.83, up from $55.41 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

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