DigitalBridge Group, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion should be read in conjunction with our unaudited consolidated financial statements and accompanying notes thereto, which are included in Item 1 of this Quarterly Report, as well as information contained in our Annual Report on Form 10-K for the year ended December 31, 2024, which is accessible on the SEC's website at www.sec.gov. In this Quarterly Report, unless specifically stated otherwise or the context indicates otherwise, the terms " the "Company," "DBRG," "we," "our" and "us" refer to DigitalBridge Group, Inc. and its consolidated subsidiaries. References to the “Operating Partnership,” our “Operating Company” and the “OP” refer to DigitalBridge Operating Company, LLC, a Delaware limited liability company and the operating company of the Company, and its consolidated subsidiaries. Our Business We are a leading global investment manager in digital infrastructure, deploying and managing capital across the digital ecosystem, including data centers, cell towers, fiber networks, small cells, and edge infrastructure. Our diverse global investor base includes public and private pensions, sovereign wealth funds, other asset managers, insurance companies, and endowments. At September 30, 2025, we had $40.7 billion of fee earning equity under management ("FEEUM"). We are headquartered in Boca Raton, Florida, with key offices in New York, London, Luxembourg and Singapore. At September 30, 2025, we had 310 employees. We operate as a taxable C Corporation and conduct substantially all of our activities and hold substantially all of our assets and liabilities through our Operating Company. As sole managing member, we own 97% of the Operating Company at September 30, 2025. Our Investment Management Platform Our investment management platform is anchored by our value-add funds within the DigitalBridge Partners ("DBP") infrastructure equity series. In providing institutional investors access to investments across different segments of the digital infrastructure ecosystem, our investment offerings have expanded to include core equity, credit and liquid securities. • Our DBP series of funds focus on value-add digital infrastructure, investing in and building businesses across the digital infrastructure sector. • Core Equity invests in digital infrastructure businesses and assets with long-duration cash flow profiles, primarily in more developed geographies, through our Strategic Assets Fund ("SAF"). 38 Table of Contents • DigitalBridge Credit is our private credit strategy that delivers credit solutions to corporate borrowers in the digital infrastructure sector globally through credit financing products such as first and second lien term loans, mezzanine debt, preferred equity and construction/delay-draw loans, among other products. • Our Liquid Strategies are fundamental long-only, long-short and market-neutral public equities strategies with well-defined mandates, leveraging the network and intellectual capital of our platform to build liquid portfolios of high quality, undervalued businesses across digital infrastructure, real estate, and technology, media, and telecom. • InfraBridge is focused on mid-market investments in the digital infrastructure, energy and digital adjacent areas of traditional infrastructure (predominantly transportation and logistics via the Global Infrastructure Fund ("GIF") series of funds). Significant Developments The following summarizes significant developments that affected our business and results of operations in 2025. Capital Raise • In 2025, through the third quarter, we raised $4.1 billion of capital, primarily for the third series in our flagship value-add strategy and also co-investment vehicles. Realization of Investment • In connection with our participation in a secondary sale of equity by our DataBank portfolio company in February 2025, we received proceeds of approximately $59.7 million, representing $34.0 million realized principal investment income, $24.8 million return of capital and our share of carried interest of $0.9 million. Fund Performance Metrics Certain performance metrics for our key investment funds from inception through September 30, 2025 are presented in the table below. Excluded are funds with less than one year of performance history as of September 30, 2025, funds and separately managed accounts in the liquid strategy, co-investment vehicles and separately capitalized portfolio companies. The historical performance of our funds is not indicative of their future performance nor indicative of the performance of our other existing funds or of any of our future funds. An investment in DBRG is not an investment in any of our funds and these fund performance metrics are not indicative of the performance of DBRG. ($ in millions) Inception Date (2) Total Commitments Invested Capital (3) Available Capital (4) Investment Value MOIC (8) (10) IRR (9) (10) Fund (1) Unrealized (5) Realized (6) Total (7) Gross Net Gross Net Value-Add DBP I Mar-2018 $ 4,059 $ 4,825 $ 192 $ 6,030 $ 1,451 $ 7,481 1.5x 1.4x 11.2% 8.7% DBP II Nov-2020 8,286 8,108 494 10,181 843 11,024 1.4x 1.3x 10.3% 7.7% Core SAF Nov-2022 1,110 1,045 61 1,148 40 1,188 1.1x 1.1x 6.4% 4.4% InfraBridge GIF I Mar-2015 1,411 1,504 383 982 1,449 2,431 1.6x 1.4x 9.1% 6.4% GIF II Jun-2018 3,382 3,164 192 2,095 507 2,602 0.8x 0.7x <0% <0% Credit Credit I Dec-2022 697 707 265 490 292 782 1.1x 1.1x 10.0% 6.6% __________ (1) Performance metrics are presented in aggregate for main fund vehicle, its parallel vehicles and alternative investment vehicles. (2) Inception date represents first close date of the fund, except for Credit I which is the first capital call date. The manager/general partner of the InfraBridge funds were acquired in February 2023. (3) Invested capital represents the original cost and subsequent fundings to investments. Invested capital includes financing costs and investment related expenses which are capitalized. With respect to InfraBridge funds, such costs are expensed during the period and excluded from their determination of invested capital. (4) Available capital represents unfunded commitments, including recallable capital. (5) Unrealized value represents total fair value of investments, net of outstanding balance under the fund’s credit facility, if any. (6) Realized value represents proceeds from dispositions that have closed and all earnings from both realized and unrealized investments, including interest, dividend and ticking fees. (7) Total value is the sum of unrealized fair value and realized value of investments. 39 Table of Contents (8) Total gross multiple of invested capital ("MOIC") is calculated as the limited partners' portion of the fair value of unrealized investments, net of outstanding balance funded through the fund's credit facility, if any, plus any accrued but unpaid interest and coupon payments received, and limited partner realized distributions gross of general partner carried interest, divided by total limited partner contributions, without giving effect to the allocation of management fee expense, other fund expenses and general partner carried interest (both distributed and unrealized). Total net MOIC is calculated as the limited partners' portion of the fund's NAV plus limited partner realized distributions net of carried interest, divided by total limited partner contributions, after giving effect to the allocation of management fee expense, other fund expenses and general partner carried interest (both distributed and unrealized). MOIC calculations exclude capital not subject to fees and/or carried interest, including general partner and general partner affiliate capital. MOICs are calculated at the fund level and do not reflect MOICs at the individual investor level. (9) Gross internal rate of return ("IRR") represents annualized money-weighted return on invested capital based upon total value of limited partner contributions, that is limited partner realized distributions and limited partner unrealized NAV (based upon fair value of unrealized investments), without giving effect to the allocation of management fee expense, other fund expenses and general partner carried interest (both distributed and unrealized). Gross IRR is calculated from the date of the first capital call from limited partners (and therefore taking into account the use of any credit facility at the fund level) through the date of limited partner distributions for realized investments. For funds with unrealized investments, gross IRR uses a liquidating distribution equal to the limited partners' portion of the fair value of unrealized investments, net of outstanding amounts funded through the fund's credit facility, if any. Gross IRR is calculated at the fund level and does not reflect gross IRR of any individual investor due to timing of investor level inflows and outflows, among other factors. Net IRR is gross IRR after giving effect to the allocation of management fee expense, other fund expenses and general partner carried interest (both distributed and unrealized). Net IRR is calculated at the total fee-paying limited partner level and based upon the timing and amount of fee-paying third party limited partner inflows and outflows, and excludes capital not subject to fees and/or carried interest, including the portion of capital attributable to the general partner and general partner affiliate. As fees may vary by individual investor, net IRR does not represent the return of any individual investor. With respect to funds that have utilized borrowings from a credit facility to fund portfolio investments, organization expenses, partnership expenses, management fees, or other amounts in lieu of calling capital from limited partners for such purposes, gross and net IRR of the fund differs from what the IRR would have been if such borrowings or financings had not been utilized. Because IRR is calculated based on the actual dates of capital contributions from, and distributions to, limited partners (rather than based on the timing of when investments were made, for example), the use of such borrowings and financings in lieu or in advance of calling capital delays capital contributions from limited partners, generally resulting in higher IRRs than if such borrowings or financings had not been utilized and capital was called earlier from limited partners.. (10) Our funds generally permit us to recycle certain capital distributed to limited partners during certain time periods. The exclusion of recycled capital generally causes invested and realized amounts to be lower and MOICs to be higher than had recycled capital been included. 40 Table of Contents Results of Operations Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2025 2024 Change 2025 2024 Change Revenues Fee revenue $ 93,300 $ 76,582 $ 16,718 $ 268,701 $ 228,142 $ 40,559 Carried interest allocation (reversal) (120,213) (15,799) (104,414) (290,751) 263,967 (554,718) Principal investment income 25,325 9,955 15,370 51,069 28,782 22,287 Other income 5,406 5,387 19 17,039 19,963 (2,924) Total revenues 3,818 76,125 (72,307) 46,058 540,854 (494,796) Expenses Compensation expense—cash and equity-based 49,315 43,426 5,889 142,427 146,271 (3,844) Compensation expense—incentive fee and carried interest allocation (reversal) (54,000) (8,474) (45,526) (119,676) 163,242 (282,918) Administrative and other expenses 15,118 27,193 (12,075) 42,504 78,011 (35,507) Interest expense 4,731 4,129 602 13,199 12,457 742 Transaction-related costs 956 1,771 (815) 9,585 3,202 6,383 Depreciation and amortization 7,130 8,227 (1,097) 22,941 25,491 (2,550) Total expenses 23,250 76,272 (53,022) 110,980 428,674 (317,694) Other income (loss) Other gain (loss), net 6,493 47,927 (41,434) 15,037 50,843 (35,806) Income (Loss) before income taxes (12,939) 47,780 (60,719) (49,885) 163,023 (212,908) Income tax benefit (expense) 221 (887) 1,108 (833) (2,126) 1,293 Income (Loss) from continuing operations (12,718) 46,893 (59,611) (50,718) 160,897 (211,615) Income (Loss) from discontinued operations (86) 1,439 (1,525) (2,625) (13,403) 10,778 Net income (loss) (12,804) 48,332 (61,136) (53,343) 147,494 (200,837) Net income (loss) attributable to noncontrolling interests: Redeemable noncontrolling interests 1,796 580 1,216 2,445 1,471 974 Investment entities (46,577) 34,024 (80,601) (134,244) 68,412 (202,656) Operating Company 563 (50) 613 1,638 2,038 (400) Net income (loss) attributable to DigitalBridge Group, Inc. 31,414 13,778 17,636 76,818 75,573 1,245 Preferred stock dividends 14,661 14,661 — 43,981 43,981 — Net income (loss) attributable to common stockholders $ 16,753 $ (883) 17,636 $ 32,837 $ 31,592 1,245 41 Table of Contents Revenues Total revenues were $3.8 million and $76.1 million in the three months ended September 30, 2025 and 2024, respectively, and $46.1 million and $540.9 million in the nine months ended September 30, 2025 and 2024, respectively. The large swings in total revenues were driven by significant variability in unrealized carried interest, specifically large net reversals in 2025 and net positive allocations in year-to-date 2024. Additionally, there were increases to fee revenue, driven mainly by capital raised for our third flagship fund. The key components of revenue are discussed in more detail below. Fee Revenue Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2025 2024 Change 2025 2024 Change Management fees $ 84,945 $ 71,145 $ 13,800 $ 246,647 $ 219,647 $ 27,000 Management fees—catch up (1) 8,261 4,866 3,395 20,792 3,895 16,897 Incentive fees — 291 (291) 606 2,823 (2,217) Other fee revenue 94 280 (186) 656 1,777 (1,121) $ 93,300 $ 76,582 16,718 $ 268,701 $ 228,142 40,559 __________ (1) Catch-up fees are management fees charged in any given period that pertain to prior periods. With respect to subsequent closing of commitments during the fundraising period, management fees based upon commitments are charged retroactively to the fee activation date at initial closing of the fund through the subsequent close date. Fee revenue increased $16.7 million or 22% to $93.3 million in the quarter-to-date comparison and $40.6 million or 18% to $268.7 million in the year-to-date comparison. The increases in both the quarter-to-date and year-to-date comparisons were driven by (i) additional capital raised for our third flagship fund, which contributed incremental management fees of $11.5 million and $40.6 million (of which $3.4 million and $16.9 million were incremental catch-up fees), respectively, and (ii) deployment of capital and new capital raised for co-investment vehicles, partially offset by (iii) lower management fees from InfraBridge funds, in particular the effect of a change in fee basis from committed to invested capital effective late December 2024 (decreased $3.5 million and $13.1 million, respectively). Year over year, FEEUM increased $6.6 billion or 19% to $40.7 billion at September 30, 2025 from $34.1 billion at September 30, 2024. Incentive fees in all periods were attributed to our liquid securities strategy. Carried Interest Allocation Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2025 2024 Change 2025 2024 Change Carried interest allocation Distributed $ — $ — $ — $ 2,470 $ 118 $ 2,352 Unrealized (120,213) (15,799) (104,414) (293,221) 263,849 (557,070) $ (120,213) $ (15,799) (104,414) $ (290,751) $ 263,967 (554,718) Carried interest allocation represents gross carried interest from our general partner interests in sponsored investment vehicles prior to allocations to management and a third party participation interest. Unrealized carried interest is subject to adjustments each period, including reversals, based upon the extent to which cumulative performance of the funds, which are driven by underlying investments that are measured at fair value, exceed their minimum return hurdles. See Note 3 to the consolidated financial statements. In 2025, distributed carried interest arose from a secondary equity offering by our DataBank portfolio company in February 2025, of which our share net of management allocation was $0.9 million. Unrealized carried interest reversals are generally a function of continuing accrual of preferred returns over time outpacing changes in investment fair values and the resulting effects are exacerbated given the early lifecycle of our funds. 42 Table of Contents Principal Investment Income Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2025 2024 Change 2025 2024 Change Principal investment income (loss) Realized $ 645 $ 2,647 $ (2,002) $ 1,864 $ 13,193 $ (11,329) Unrealized 24,680 7,308 17,372 49,205 15,589 33,616 $ 25,325 $ 9,955 15,370 $ 51,069 $ 28,782 22,287 Principal investment income represents the Company's proportionate share of net income (loss) from investments in its sponsored investment vehicles. Changes each period are driven predominantly by unrealized gain (loss) from changes in fair value of underlying fund investments. Realized principal investment income in both years included gains from sale or syndication of investments and distributions of interest income from our credit funds. In particular, the year-to-date period in 2025 included $34.0 million of income distribution in connection with our participation in a secondary sale of equity by our DataBank portfolio company in February 2025, offset by a $40.3 million loss from a portfolio company of an InfraBridge fund recognized in the second quarter of 2025. This loss pertained to capital funded in prior years and realization of the loss did not affect cash flows in 2025. These realizations were accompanied by a reversal of unrealized principal investment income (loss) in the periods the realizations were recognized. In 2024, realized principal investment income also included $4.2 million of previously escrowed proceeds received from the partial sale of our interest in DataBank in prior years. Other Income Other income was flat at $5.4 million in the quarter-to-date comparison and decreased $2.9 million to $17.0 million in the year-to-date comparison. The decrease was driven by lower cost reimbursements from managed investment vehicles that are presented gross as income and expense ($0.8 million) and lower dividend income from equity securities of consolidated funds ($0.7 million). Expenses Total expenses were $23.3 million and $76.3 million for the three months ended September 30, 2025 and 2024, respectively, and $111.0 million and $428.7 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease is attributed to unrealized carried interest compensation which was a higher net reversal in 2025 compared to a lower net reversal in the third quarter of 2024 and a net expense year-to-date in 2024. Additionally, 2025 had lower administrative costs. Changes in the various expense items are discussed below. Compensation Expense Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2025 2024 Change 2025 2024 Change Cash and equity-based compensation Cash compensation $ 40,488 $ 34,598 $ 5,890 $ 115,255 $ 110,588 $ 4,667 Equity-based compensation 8,827 8,828 (1) 27,172 35,683 (8,511) $ 49,315 $ 43,426 5,889 $ 142,427 $ 146,271 (3,844) Incentive fee and carried interest compensation allocation (reversal) $ (54,000) $ (8,474) (45,526) $ (119,676) $ 163,242 (282,918) Cash and equity-based compensation— The increase in cash compensation for both periods under comparison is driven by higher accruals of performance based incentive compensation. Equity-based compensation was flat in the quarter-to-date comparison, and lower in the year-to-date comparison as 2024 included performance-based awards that fully vested in 2024. Incentive fee and carried interest compensation allocation— For both quarter-to-date and year-to-date periods under comparison, the net reversal of compensation in 2025 and net expense in 2024 are consistent with the changes in carried interest, as discussed above. 43 Table of Contents Administrative and Other Expenses Administrative and other expenses decreased $12.1 million to $15.1 million in the quarter-to-date comparison and $35.5 million to $42.5 million in the year-to-date comparison. The decrease in both periods can be attributed largely to insurance recoveries in 2025 related to litigation costs incurred in prior periods ($4.0 million and $22.2 million, respectively) and lower third party professional service costs, including reimbursable costs incurred on behalf of our managed investment vehicles. The decrease in both periods were partially offset by costs incurred for potential new products ($1.1 million and $5.6 million, respectively). Interest Expense Interest expense increased $0.6 million to $4.7 million in the quarter-to-date comparison and $0.7 million to $13.2 million in the year-to-date comparison. The increase in both periods reflect $1.1 million of interest expense on fund-level debt that was consolidated in the third quarter of 2025. In the quarter-to-date comparison, this was partially offset by lower deferred financing costs ($0.5 million) following a reduction in the VFN borrowing capacity in June 2025. In the year-to-date comparison, interest expense also decreased due to the full exchange/redemption of the remaining 5.75% exchangeable senior notes in April 2024 ($0.4 million). Transaction-Related Costs Transaction-related costs decreased $0.8 million to $1.0 million in the quarter-to-date comparison and increased $6.4 million to $9.6 million in the year-to-date comparison due to unconsummated deal cost. Depreciation and Amortization Depreciation and amortization expense decreased $1.1 million in the quarter-to-date comparison and $2.6 million in the year-to-date comparison due to management contract intangibles that have a declining amortization rate over time. In the year-to-date comparison, the decrease was partially offset by accelerated depreciation of fixed assets disposed in connection with the assignment of an office lease in the second quarter of 2025. Other Gain (Loss), Net Other gain, net was $6.5 million and $15.0 million in the three and nine months ended September 30, 2025, respectively, and $47.9 million and $50.8 million in the three and nine months ended September 30, 2024, respectively, reflecting predominantly unrealized fair value changes in financial assets and financial liabilities. The net gain for both periods in 2025 was driven by net unrealized gains in marketable equity securities of consolidated funds ($5.6 million and $7.7 million, respectively) and additionally, fair value decrease of the InfraBridge contingent consideration liability in the year-to-date period ($3.7 million). The net gain for both periods in 2024 was driven by (i) net fair value increase in investments held by consolidated funds ($44.4 million and $46.0 million, respectively), (ii) net gain from substantial sale and mark-to-market of a non-core marketable equity security ($6.5 million and $9.3 million, respectively), and (iii) fair value decrease of warrant liability ($1.2 million and $4.2 million, respectively), all of which were partially offset by impairment of warehoused investments ($8.9 million and $12.5 million, respectively). Income Tax Benefit (Expense) Income tax was immaterial in all periods under comparison, with the only notable amount being a $2.1 million expense in the nine months ended September 30, 2024. The Company has operating losses and capital loss carryforwards that can be applied against current income tax expense for its domestic entities, and the deferred tax assets of these entities are currently subject to a full valuation allowance, resulting in immaterial income tax effect for its domestic entities. The Company also benefitted from various U.S state tax refunds in 2024. With respect to the Company's foreign subsidiaries, the resulting foreign income tax impact remains immaterial, driven largely by its U.K. subsidiaries. Income (Loss) from Discontinued Operations The effect of discontinued operations was immaterial in the quarter-to-date periods and in the year-to-date periods, with net losses of $2.6 million in 2025 and $13.4 million in 2024. These losses included an accrual for a state tax audit in 2025 and in 2024, loss on a guarantee related to the previous bulk sale of the Company's real estate investments. 44 Table of Contents Operating Metrics Assets Under Management and Fee Earning Equity Under Management We present below our AUM and FEEUM, which are key operating metrics in the alternative investment management industry. Our calculation of AUM and FEEUM may differ from other investment managers, and as a result, may not be directly comparable to similar measures presented by other investment managers. Assets Under Management AUM represents the total capital for which we provide investment management services and our general partner capital. AUM is generally composed of third party capital managed by the Company and its affiliates, including capital that is not yet fee earning, or not subject to fees and/or carried interest; and our general partner and general partner affiliate capital committed to our funds. AUM is largely determined based upon invested capital as of the reporting date, including capital funded through third party financing at the underlying portfolio companies; and committed capital for funds in their commitment stage. Our AUM is not based upon any definitions that may be set forth in the governing documents of our managed funds or other investment vehicles, and not calculated pursuant to any regulatory definitions. Fee Earning Equity Under Management FEEUM represents the total capital managed by the Company and its affiliates which earns management fees and/or incentive fees or carried interest. FEEUM is generally based upon committed capital, invested capital, NAV or gross asset value ("GAV"), pursuant to the terms of each underlying investment management agreement. Presented below are total AUM and FEEUM by product: (In billions) September 30, 2025 December 31, 2024 Assets Under Management $ 107.6 $ 95.6 Fee Earning Equity Under Management DBP Series $ 17.5 $ 15.9 Co-Investment Vehicles 15.3 11.5 InfraBridge 3.6 3.7 Core, Credit and Liquid Strategies 3.1 3.2 Separately Capitalized Portfolio Companies 1.2 1.2 $ 40.7 $ 35.5 The following table summarizes changes in FEEUM: Nine Months Ended September 30, 2025 (In billions) Fee Earning Equity Under Management Balance at January 1 $ 35.5 Inflows (1) 6.5 Outflows (2) (1.3) Market activity (3) — Balance at September 30 $ 40.7 ________ (1) Inflows include closing on new capital raised where fees are earned on committed capital, deployment of capital where fees are earned on invested capital, new subscriptions where fees are based on NAV, other changes in invested capital such as the effect of recapitalization and syndication, and FEEUM from acquired investment vehicles. (2) Outflows include redemptions and withdrawals in Liquid Strategies, realizations where fees are based on invested capital, other changes in invested capital such as the effect of recapitalization and syndication, change in fee basis from committed to invested capital, permanent write-down in investment values, and expiration of fee paying capital. (3) Market activity includes changes in investment value based on NAV or GAV, and the effect of foreign exchange rates. Amount was less than $30 million in 2025. FEEUM increased $5.2 billion or 15% to $40.7 billion at September 30, 2025, driven by capital raise for our third flagship fund and new co-investment vehicles, as well as deployment of previously raised capital. 45 Table of Contents Non-GAAP Supplemental Financial Measures We report the following non-GAAP financial measures attributable to the Operating Company: Fee Related Earnings (“FRE”) and Distributable Earnings (“DE”). FRE and DE are common metrics utilized in the investment management sector. We present FRE and DE at the Operating Company level, that is, net of amounts attributed to noncontrolling interests, which include (i) carried interest allocation and equity interests held by current and former employees in general partner entities of the Company's sponsored funds; (ii) participation rights held by a third party investor to a share of carried interest and economics in a sponsored fund; and (iii) limited partners of consolidated funds. We believe the non-GAAP financial measures of FRE and DE supplement and enhance the overall understanding of our underlying financial performance and trends, and facilitate comparison among current, past and future periods and to other companies in similar lines of business. We use FRE and DE in evaluating the Company’s ongoing business performance and in making operating decisions. For the same reasons, we believe FRE and DE are useful financial measures to the Company’s investors and analysts. These non-GAAP financial measures should be considered as a supplement to and not an alternative or in lieu of GAAP net income (loss) as measures of operating performance, or to cash flows from operating activities as indicators of liquidity. Our calculation of these non-GAAP measures may differ from methodologies utilized by other companies for similarly titled performance measures and, as a result, may not be fully comparable to those calculated by our peers. Fee-Related Earnings FRE is used to assess the extent to which direct base compensation and core operating expenses are covered by recurring fee revenues in our investment management business. FRE represents recurring fee revenue, including incentive fees that are not subject to realization events related to underlying fund investments, net of compensation and administrative expenses. Such expenses generally exclude non-cash equity-based compensation, carried interest compensation, and placement fee expense. Also, consistent with DE, FRE excludes non-core items, and presents costs reimbursable by our managed funds on a net basis (as opposed to a gross-up of other income and administrative expenses). Fee revenues earned from consolidated funds are eliminated in consolidation. However, because the fees are funded by and earned from third party investors in these consolidated funds who represent noncontrolling interests, our allocated share of net income from the consolidated funds is increased by the amount of fees that are eliminated. The elimination of these fees, therefore, does not affect net income (loss) attributable to DBRG. Accordingly, FRE is presented without giving effect to the elimination of fee revenue to the extent such fees meet the definition of FRE. FRE does not include distributed carried interest as these are not recurring revenues and are subject to variability given that they are dependent upon realization events related to underlying fund investments. Placement fees are also excluded from FRE as they are inconsistent in amount and frequency depending upon timing of fundraising for our funds. Other items excluded from FRE include realized principal investment income (loss); and interest, dividend and other income, all of which are not core to the investment management fee service business. Unlike DE, which is a post-tax measure, FRE is a pre-tax measure and does not incorporate the effect of income taxes. We believe that FRE is a useful measure to investors as it reflects the Company’s profitability based upon recurring fee streams that are not subject to realization events related to underlying fund investments, and without the effects of income taxes, leverage, non-cash expenses, income (loss) items that are unrealized and other items that may not be indicative of core operating results in an investment management fee service business. This allows for better comparability of the Company's profitability on a recurring and sustainable basis and relative to its peers. Distributable Earnings DE generally represents net realized earnings of the Company and is an indicative measure used by the Company to assess ongoing operating performance and in making decisions related to distributions and reinvestments. Accordingly, we believe DE provides investors and analysts transparency into the measure of performance used by the Company in its decision making. DE is an after-tax measure that reflects the ongoing operating performance of the Company’s core business by including earnings that are realized and generally excluding non-cash expenses, other income (loss) items that are unrealized and items that may not be indicative of core operating results. This allows the Company and its investors and analysts to assess its operating results on a more comparable basis period-over-period. 46 Table of Contents Realized earnings included in DE are generally comprised of fee revenue, including all incentive fees, realized principal investment income (loss), distributed carried interest, interest and dividend income. Income (loss) on principal investments is realized generally when all or a portion of an investment is disposed, redeemed or repaid or if the Company no longer retains control, or when the Company receives income such as dividends, interest or other distributions of earnings. The following items are excluded from DE: transaction-related costs; non-core items; other gain (loss); unrealized principal investment income (loss); non-cash depreciation and amortization expense, non-cash impairment charges (if any); amortization of deferred financing costs, debt premiums and discounts; our share of unrealized carried interest allocation, net of associated expense; non-cash equity-based compensation costs; and preferred stock redemption gain (loss). Transaction-related costs are incurred in connection with acquisitions and costs of unconsummated transactions. Non-core items primarily include acquisition-related compensation and certain severance costs, as well as litigation and settlement-related matters, which are presented within compensation expense—cash and equity-based, administrative and other expenses, and other gain (loss), net on the GAAP income statement. These costs, along with certain other gain (loss) amounts, are excluded from DE as they are related to discrete items, are not considered part of our ongoing operating cost structure, and are not reflective of our core operating performance. Other items excluded from DE are generally non-cash in nature, including income (loss) items that are unrealized, or otherwise do not represent current or future cash obligations such as amortization of deferred financing costs. These items are excluded from DE as they do not contribute to the measurement of DE as a net realized earnings measure that is used in decision making related to distributions and reinvestments. Income taxes applied in the determination of DE generally represents GAAP income tax related to continued operations, and includes the benefit of deductions available to the Company on certain expense items excluded from DE (for example, equity-based compensation). As the income tax benefit arising from these excluded expense items do affect actual income tax paid or payable by the Company in any one period, the Company believes their inclusion in DE is appropriate to more accurately reflect amounts available for distribution. Non-GAAP Results Results of our non-GAAP measures attributable to the Operating Company were determined as follows: Three Months Ended September 30, (In thousands) 2025 2024 Change Fee revenue (1) $ 93,524 $ 76,664 $ 16,860 Cash compensation (1) (40,166) (33,774) (6,392) Administrative and other expenses (1) (16,064) (16,736) 672 Fee-Related Earnings—attributable to Operating Company 37,294 26,154 11,140 Realized principal investment income (loss) 394 2,129 (1,735) Interest, dividend and other income 3,144 2,828 316 Interest expense and preferred dividends (18,023) (18,245) 222 Placement fees and other (1,319) (1,247) (72) Income tax benefit (expense) 221 (887) 1,108 Distributable Earnings, after tax—attributable to Operating Company $ 21,711 $ 10,732 10,979 ________ (1) These amounts are determined based upon the definition of FRE as described above and therefore, differ from those presented on the consolidated statements of operations. Fee-Related Earnings FRE was $11.1 million or 43% higher at $37.3 million in the third quarter of 2025 compared to $26.2 million in the same period in 2024. FRE margin improved to 40% compared with 34% a year ago. Fee revenue increased $16.9 million or 22%, partially offset by higher operating cost. The increase in fee revenue is attributable to capital raised for our third flagship fund, which contributed an additional $11.5 million of fees (of which $3.4 million was incremental catch-up fees), and new co-investment vehicles, as well as additional capital deployments. This was partially offset by fee decreases from our InfraBridge funds, in particular due to a change in fee basis from committed to invested capital effective late December 2024. Operating cost was $5.7 million higher, driven by higher compensation cost. 47 Table of Contents Distributable Earnings DE was $11.0 million higher at $21.7 million in the third quarter of 2025 compared to the same period in 2024, with the increase driven by the growth in FRE, as discussed above. Distributable Earnings and Fee-Related Earnings Reconciliation Three Months Ended September 30, (In thousands) 2025 2024 Net income (loss) attributable to common stockholders $ 16,753 $ (883) Net income (loss) attributable to noncontrolling interests in Operating Company 563 (50) Net income (loss) attributable to Operating Company 17,316 (933) Transaction-related costs and non-core items (1) (2,374) 9,541 Other (gain) loss, net (2) (5,821) (47,906) Unrealized principal investment income (3) (24,872) (4,415) Unrealized carried interest, net of associated expense (allocation) reversal (4) 19,808 7,658 Equity-based compensation 8,976 8,828 Depreciation and amortization expense 7,130 8,227 Amortization of deferred financing costs, debt premiums and discounts 406 524 Adjustments attributable to noncontrolling interests in investment entities (5) 1,056 30,647 OP share of (income) loss from discontinued operations (6) 86 (1,439) Distributable Earnings, after tax—attributable to Operating Company 21,711 10,732 Realized principal investment (income) loss (394) (2,129) Interest, dividend and other income (3,144) (2,828) Interest expense and preferred dividends 18,023 18,245 Placement fee and other 1,319 1,247 Income tax (benefit) expense (221) 887 Fee-Related Earnings—attributable to Operating Company $ 37,294 $ 26,154 __________ (1) Non-core items primarily include acquisition-related compensation and certain severance costs, as well as litigation and settlement-related matters, which are presented within compensation expense—cash and equity-based, administrative and other expenses, and other gain (loss), net on the GAAP income statement. (2) Comprises (i) all unrealized gains and losses; and (ii) realized gains and losses associated with consolidated funds or non-core investments. (3) Unrealized principal investment income is presented net of a third party participation interest, representing only the Operating Company's share. (4) Carried interest is presented net of expense allocation or reversal, representing only the Operating Company's share. The expense component is included within compensation expense — incentive fees and carried interest allocation (reversal), other gain (loss), and net income (loss) attributable to noncontrolling interests in investment entities on the GAAP income statement. (5) Adjustments attributable to noncontrolling interests in investment entities pertain to other gain (loss) attributed to limited partners of consolidated funds. Allocation of: (i) unrealized carried interest to management and a third party participation interest; and (ii) unrealized principal investment income to a third party participation interest, are netted against "unrealized carried interest, net of expense (allocation) reversal" and "unrealized principal investment income", respectively, for all periods presented. Allocation of unrealized principal investment income to a third party participation interest was previously presented gross in "adjustments attributable to noncontrolling interests in investment entities" and recasted for periods prior to the first quarter of 2025. (6) Discontinued operations represents residual activities from the Company's former real estate business that had been disposed. Liquidity and Capital Resources We regularly evaluate our liquidity position, and anticipated cash needs to fund our business and operations based upon our projected financial performance. Our evaluation of future liquidity requirements is regularly reviewed and updated for changes in internal projections, economic conditions, and other factors as applicable. Liquidity Needs and Sources of Liquidity Our primary liquidity needs, both short term and long term, are to fund: • our operations, including compensation and administrative costs; • our general partner and general partner affiliate commitments to our investment vehicles; • principal and interest payments on our debt; • dividends to our preferred and common stockholders; • our liability for corporate and other taxes; 48 Table of Contents • acquisitions of target investment management businesses; and • obligation for lease payments on our corporate offices. Our primary sources of liquidity are: • cash on hand; • fees received from our investment management business, including our share of realized net incentive fees and carried interest distributed; • cash flow generated from our investments, both from distributions of income and return of capital, including proceeds from full or partial realization of investments; • availability under our Variable Funding Notes ("VFN"); • issuance of additional term notes under our corporate securitization; and • proceeds from public or private equity and debt offerings. Overview At September 30, 2025, we have $173 million of available corporate cash. This generally represents cash at our OP entity after allocating cash for certain compensatory liabilities, and excludes cash held at subsidiaries of the OP, including cash maintained to satisfy regulatory capital requirements in applicable foreign jurisdictions and cash held by consolidated funds. We also have the full $100 million available to be drawn under our VFN facility. We believe we have sufficient cash on hand, and anticipated cash generated from operating activities and availability of external financing sources, to meet our short term and long term liquidity and capital requirements. While we have sufficient liquidity to meet our operational needs, we continuously evaluate alternatives to efficiently manage our capital structure and market opportunities to strengthen our liquidity and provide further operational and strategic flexibility. Significant Liquidity and Capital Activities in 2025 • In connection with our participation in a secondary sale of equity by our DataBank portfolio company in February 2025, we received proceeds of approximately $59.7 million, representing $34.0 million realized principal investment income, $24.8 million return of capital and our share of carried interest of $0.9 million. • Liquidation of an investment in our InfraBridge fund in June 2025 generated proceeds of $13.3 million, representing $8.2 million return of capital and $5.1 million realized principal investment income. • We elected to reduce the capacity under our VFN (pursuant to its terms) from $300 million to $100 million effective June 2025, which will generate annual savings of $1.0 million in unused fees. Liquidity Needs and Capital Activities Dividends Common Stock —The payment of common stock dividends and determination of the amount thereof is at the discretion of our Board of Directors. [In October 2025, our Board of Directors declared a dividend of $0.01 per share of common stock to be paid in January 2026.] Preferred Stock— We have outstanding preferred stock totaling $822 million, bearing a weighted average dividend rate of 7.135% per annum, with aggregate dividend payments of $14.7 million per quarter. Contractual Obligations, Commitments and Contingencies Debt Obligations As of the date of this filing, our corporate debt is composed of our Class A-2 Notes, as summarized below, with our VFN undrawn. ($ in thousands) Outstanding Principal Interest Rate (Per Annum) Anticipated Repayment Date Years Remaining to Maturity Class A-2 Notes $ 300,000 3.93 % September 2026 1.0 49 Table of Contents Investment Commitments Fund Commitments —As general partner, we typically have minimum capital commitments to our sponsored funds ranging from 0.02% to 0.72% of the total capital commitments of a fund at final closing, although we may elect to make additional investments in new products. With respect to our flagship value-add DBP fund series, and InfraBridge funds, we have made additional capital commitments as a general partner affiliate, generally ranging from 1.43% to 4.29%, alongside our investors. Our fund capital investments further align our interests to our investors. As of September 30, 2025, we have unfunded equity commitments to our sponsored funds totaling $189 million as general partner and general partner affiliate (including commitments attributed to the ownership by employees and former employees in our general partner entities). Generally, the timing for funding of these commitments is not known and the commitments are callable on demand at any time prior to their respective expirations. Warehoused Investments We temporarily warehouse investments on behalf of prospective sponsored investment vehicles. The warehoused investments are transferred to the investment vehicle if and when sufficient third party capital, including debt, is raised. Generally, the timing of future warehousing activities is not known. Nevertheless, investment warehousing is undertaken only if it is determined that we will have sufficient liquidity to hold the investments. Contingent Consideration — InfraBridge In connection with the Company's acquisition of InfraBridge in February 2023, contingent consideration of up to AUD 180 million may become payable based upon achievement of prescribed fundraising targets for follow-on InfraBridge flagship funds and co-investments. The current estimated fair value of the contingent consideration is $2.4 million. Carried Interest Clawback Depending upon the final realized value of all investments at the end of the life of a fund (and, with respect to certain funds, periodically during the life of the fund), if it is determined that cumulative carried interest distributions have exceeded the final carried interest amount earned (or amount earned as of the calculation date), we are obligated to return the excess carried interest received. Therefore, carried interest distributions may be subject to clawback if a decline in investment values results in the cumulative performance of the fund falling below minimum return hurdles in the interim period. If it is determined that the Company has a clawback obligation, a liability would be established based upon a hypothetical liquidation of the net assets of the fund at the reporting date. The actual determination and required payment of any clawback obligation would generally occur after final disposition of the investments of the fund or otherwise as set forth in the governing documents of the fund. If the related carried interest distributions received by the Company are subject to clawback, the previously distributed carried interest would be similarly subject to clawback. The Company withholds a portion of the distribution of carried interest to employees to satisfy their potential clawback obligation. Generally, the Company, through the OP, has guaranteed the clawback obligation of its subsidiaries that act as general partner or special limited partner of its respective sponsored funds, for the benefit of these funds and their limited partners. At September 30, 2025, the Company had no liability for clawback obligations on distributed carried interest. Lease Obligations At September 30, 2025, we had operating lease obligations of $34 million for in-place leases on currently occupied corporate offices and commitments on a future office lease of $58 million that is expected to commence in 2026 with a 10.8 year lease term. We sub-leased a portion of certain existing office space over the remaining term of the respective leases and expect to receive fixed sub-lease payments totaling $3 million over the remaining life of the sub-lease contracts. With respect to the new lease commencing in 2026, the Company will be provided with a credit to cover fixed lease payments on an existing lease that expires in September 2026 during the period the two leases overlap, and also expects to sub-lease a portion of this new office space in 2026, which will reduce its future lease obligation. The Company's lease obligations will be funded through corporate operating cash. Lease obligation amounts represent undiscounted fixed lease payments over contractual lease terms of up to 10 years, excluding any contingent or other variable lease payments, and factor in lease renewal or termination options only if it is reasonably certain that such options would be exercised. 50 Table of Contents Sources of Liquidity Debt Funding As of the date of this filing, we have $300 million of outstanding principal on our corporate debt, as discussed above under " —Debt Obligation. " Our securitized financing facility is subject to various covenants, including financial covenants that require the maintenance of minimum thresholds for debt service coverage ratio and maximum loan-to-value ratio, as defined. As of the date of this filing, we are in compliance with all of the financial covenants, and the full $100 million is available to be drawn on our VFN. Our securitized financing facility allows for the issuance of additional term notes in the future to supplement our liquidity. The decision to enter into a particular financing arrangement is made after consideration of various factors including future cash needs, current sources of liquidity, demand for the Company’s debt or equity, and prevailing interest rates. Cash From Operations Fee-Related Earnings— We generate FRE from our investment management business, generally encompassing recurring fee revenue net of associated compensation and administrative expenses. Management fee revenue is generally a predictable and stable revenue stream. Our ability to generate new management fee streams through establishing new investment vehicles and raising investor capital depends on general market conditions and availability of attractive investment opportunities as well as availability of debt capital. Incentive Fees— Incentive fees, net of employee allocations, are earned based upon the financial performance of a vehicle above a specified return threshold, which is largely driven by appreciation in value of underlying investments. Incentive fees are recognized as fee revenue when they are no longer probable of significant reversal. As investment fair values and changes thereof could be affected by various factors, including market and economic conditions, incentive fees are by nature less predictable in amount and timing. Carried Interest Distributions— Carried interest is distributed generally upon profitable disposition of an investment if at the time of distribution, cumulative returns of the fund exceed minimum return hurdles. Carried interest distributions are recognized in earnings net of clawback obligations, if any. The amount and timing of carried interest distributions received may vary substantially from period to period depending upon the occurrence and size of investments realized by our sponsored funds. Investments— Our investments in our sponsored funds as general partner and general partner affiliate generate cash largely through capital appreciation of underlying investments that are realized upon a recapitalization, syndication or liquidation event, income distributions from equity investments and interest income from credit investments. Public Offerings We may offer and sell various types of securities from time to time at our discretion based upon our needs and depending upon market conditions and available pricing. Consolidated Cash Flows The following table summarizes the activities from our consolidated statements of cash flows, including discontinued operations. Nine Months Ended September 30, (In thousands) 2025 2024 Cash, cash equivalents and restricted cash—beginning of period $ 306,298 $ 350,250 Net cash generated by (used in): Operating activities 183,770 31,418 Investing activities (97,511) (6,847) Financing activities (32,632) (77,806) Effect of exchange rates on cash, cash equivalents and restricted cash 4,025 1,461 Cash, cash equivalents and restricted cash—end of period $ 363,950 $ 298,476 Operating Activities Cash inflows from operating activities are generated primarily through fee-related earnings, distributions of our share of net carried interest, and distribution of earnings from our general partner affiliate interests in our sponsored funds. 51 Table of Contents Our operating activities generated net cash inflows of $183.8 million in 2025 and $31.4 million in 2024. Outside of recurring operating activities, cash inflows in 2025 also included distribution of earnings from the secondary sale of equity in our DataBank portfolio company of $34.0 million and $22.2 million from net insurance recoveries related to litigation costs incurred in prior periods. Investing Activities Investing activities relate largely to our consolidated liquid funds that invest in marketable equity securities, as well as our general partner and general partner affiliate investments in sponsored funds, including drawdown of commitments and return of capital from realized fund investments. Our investing activities generated net cash outflows in 2025 and 2024. • In 2025, net cash outflows of $97.5 million were driven by $102.1 million of fundings, net of distributions, for our general partner and general partner affiliate commitments in our sponsored funds and $37.9 million of investments warehoused for potential new products. This was partially offset by return of capital of (i) $24.8 million from the secondary sale of equity in our DataBank portfolio company, (ii) $12.1 million from disposition and recapitalization of investments in our InfraBridge fund, (iii) $3.6 million from our CLO subordinated notes, and (iv) $3.3 million of net inflows from the investing activities of our consolidated liquid funds that hold marketable equity securities. • Net cash outflows were lower in 2024 at $6.8 million, driven by $40.5 million of fundings, net of distributions, for our general partner and general partner affiliate commitments in our sponsored funds, that was largely offset by $35.0 million of net proceeds from sale of our non-core investments . Financing Activities We incur cash outlays primarily for payments on our corporate debt, and dividends to our preferred stockholders and common stockholders. Financing activities generated net cash outflows in 2025 and 2024. • In 2025, net cash outflows of $32.6 million were driven by common and preferred dividend payments of $49.3 million, partially offset by $21.6 million of capital contributions by limited partners in consolidated single asset funds. • The higher net cash outflows of $77.8 million in 2024 resulted from (i) cash settlement of a contingent consideration to Wafra of $17.5 million, (ii) $14.6 million of investor capital redeemed, net of contributions, in our consolidated liquid funds, and (iii) $49.0 million of common and preferred dividend payments. This was partially offset by a $6.1 million syndication of our interest in a consolidated fund, and a share of our commitments in DBP I funded by a third party participation interest. Guarantees and Off-Balance Sheet Arrangements We have no guarantees or off-balance sheet arrangements that we believe are reasonably likely to have a material effect on our financial position. Critical Accounting Policies and Estimates Our financial statements are prepared in accordance with GAAP, which requires the use of estimates and assumptions that involve the exercise of judgment and that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our critical accounting policies and estimates are integral to understanding and evaluating our reported financial results as they require subjective or complex management judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain and unpredictable. There have been no changes to our critical accounting policies since the filing of our Annual Report on Form 10-K for the year ended December 31, 2024. With respect to all critical estimates, we have established policies and control procedures which seek to ensure that estimates and assumptions are appropriately governed and applied consistently from period to period. We believe that all of the decisions and assessments applied were reasonable at the time made, based upon information available to us at that time. Due to the inherently judgmental nature of the various projections and assumptions used, and unpredictability of economic and market conditions, actual results may differ from estimates, and changes in estimates and assumptions could have a material effect on our financial statements in the future. 52 Table of Contents Recent Accounting Updates The effects of accounting standards adopted in 2025 and the potential effects of accounting standards to be adopted in the future are described in Note 2 to our consolidated financial statements in Item 1 of this Quarterly Report.