Blue Owl Capital Inc. (OWL) Earnings & Analysis

Latest quarter

Blue Owl reported Q3 FY2026 revenue of $806.5 million, up 10.8% from $728.0 million a year earlier. On the basis used for the consensus comparison, revenue was $752.6 million, above the $704.0 million estimate; adjusted EPS of $0.24 also exceeded the $0.22 consensus.

The company reported diluted EPS of $0.11, compared with $0.01 a year earlier. Operating margin rose to 18.3% from 15.5%, while free cash flow increased to $601.4 million from $422.5 million.

The filing attributes the increase in management fees to fundraising and deployment in Real Assets and fundraising in GP Strategic Capital. Credit management fees declined, principally because direct lending fees fell as business development companies earned lower income-based fees; alternative credit fees partly offset that decline. The filing also says administrative, transaction and other fees increased, primarily because of capital markets services and reimbursements from funds for compensation expenses.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Co-CEO Marc Lipschultz said institutional fundraising came from a range of strategies, investors and geographies. CFO Alan Kirshenbaum said private wealth inflows rose sequentially, while requests to redeem shares in OCIC declined for a second consecutive quarter. Lipschultz said Blue Owl had “seen recovery in gross inflows from May levels while redemption requests continue to decline.”

Lipschultz said higher base rates allow existing floating-rate loans to reprice and offer higher yields on new direct lending deals. He said that can increase income for investors and income-based fees for Blue Owl. He also described opportunities to acquire fixed-rate assets on better terms and generate excess spread for insurance clients.

Asked about deployment, Lipschultz said “Net deployment was modestly negative this quarter” because repayments increased alongside gross originations. He said repayments could be redeployed into loans at higher spreads, but rapid net deployment was unlikely until merger and acquisition activity increases.

Kirshenbaum said assets not yet paying fees represent approximately $400.0 million of expected annual management fees once deployed. He also pointed to more than $140.0 billion of near-term opportunities across net lease and digital infrastructure. Asked about digital infrastructure, Lipschultz said Blue Owl focuses on large data centers leased to hyperscalers under long-term agreements, rather than assets with unleased capacity or near-term re-leasing needs.

On capital markets fees, Kirshenbaum said transactions across real assets contributed to the quarter’s fees, but cautioned against treating the quarter as a continuing run rate. Asked about the next quarter, he expected transaction and capital markets fees to return toward first- and second-quarter levels. On institutional fundraising, he said investors remained supportive but should not expect a similar quarter in Q4.

Guidance

Kirshenbaum expects transaction and capital markets fees to return toward first- and second-quarter levels in Q4, followed by growth in FY2027 as Blue Owl expands its capabilities. He also expects total stock-based compensation in FY2027 to be lower than in FY2026, with other stock-based compensation growing more slowly than revenue.