PRICE T ROWE GROUP INC
For the period ended Jun 30, 2025. Filed Aug 1, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 1, 2025
TROW$108.41-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001113169-25-000015
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0001113169-25-000023
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 134 current paragraphs.
58 unchanged; 55 reworded; 18 added; 13 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 18 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Major U.S. stock market indexes rose in the second quarter. Equities plunged at the beginning of April in response to the U.S. reciprocal tariffs. However, the market rallied starting April 9, when the U.S. declared a 90-day pause on these tariffs for many countries. Equities continued to rise throughout May and June, as the U.S. and China agreed to a 90-day reduction in reciprocal and retaliatory tariffs while negotiating a trade deal. Stocks also overcame a short-lived spike in oil prices in June and a multi-day exchange of missile and drone attacks between Israel and Iran. As the quarter ended, investors were optimistic that trade deals with U.S. trading partners would be announced soon and hopeful that the Federal Reserve would resume lowering interest rates at some point in the months ahead.
Current report
Stocks in emerging markets also outperformed U.S. stocks in U.S. dollar terms. In the emerging Europe, Middle East, and Africa (EMEA) region, markets were broadly positive in dollar terms, though stocks in Türkiye (Turkey) lagged with a 3% gain. In emerging Asia, markets were also broadly positive in dollar terms. Equities in South Korea and Taiwan far outperformed the region, while Chinese stocks trailed with modest gains. In Latin America, markets were mostly positive in dollar terms.
Current report
For the six months ended June 30, 2025, the increase in assets under management was driven by market appreciation, net of distributions not reinvested, of $93.7 billion, offset by net cash outflows of $23.5 billion.
Current report
(2)2024 performance-based advisory fees are reported separately from investment advisory fees to align with the presentation in 2025.
Current report
Compared to the second quarter of 2024, over 65% of the increase in U.S. GAAP operating expenses was due to increases in deferred compensation liabilities from higher markets. Additionally, higher compensation and related benefits, as well as increased technology, occupancy, and facilities costs, contributed to the rise in U.S. GAAP operating expenses and were the main drivers of the increase in non-GAAP operating expenses over the 2024 quarter. As mentioned earlier, we exclude the market-related impacts on deferred compensation liabilities from our non-GAAP operating expenses measures because these liabilities are economically hedged.
Current report
Diluted earnings per share was $2.24 for the second quarter of 2025 compared to $2.11 for the second quarter of 2024. The increase was primarily driven by higher investment gains partially offset by lower operating income compared to the 2024 period. A lower effective tax rate and fewer weighted average shares outstanding also contributed to the increase.
Current report
Results Overview - Year-to-Date ended June 30, 2025
Current report
Operating expenses were $2,412.6 million in the six months ended June 30, 2025, compared with $2,332.2 million in the 2024 period. On a non-GAAP basis, our operating expenses for the six months ended June 30, 2025, increased 4.8% to $2,282.3 million compared to the 2024 period.
Current report
Compared to the six months ended June 30, 2024, the increase in U.S. GAAP and non-GAAP operating expenses was mainly due to higher technology and facility costs, compensation and related benefits costs, distribution and servicing costs, and general, administrative and other costs.
Current report
Operating margin in the six months ended June 30, 2025 was 30.8% on a U.S. GAAP basis, compared to 33.1% earned in the 2024 period. The decrease was primarily driven by operating expense growth outpacing net revenue growth.
Current report
Diluted earnings per share was $4.38 for the six months ended June 30, 2025, compared to $4.60 for 2024 period. On a non-GAAP basis, adjusted diluted earnings per share was $4.47 for the six months ended June 30, 2025, compared to $4.64 for the 2024 period. The decreases were primarily due to lower operating income partially offset by higher investment gains.
Current report
(2)2024 performance-based advisory fees are reported separately from investment advisory fees to align with the 2025 presentation.
Current report
Investment advisory fees in the second quarter of 2025 decreased 0.1% over the comparable 2024 quarter while average assets under management increased $54.8 billion, or 3.6%, to $1,588.8 billion. For the six months ended June 30, 2025, investment advisory revenues increased 2.0% over the comparable 2024 period as average assets under management increased $95.3 billion, or 6.3%, to $1,604.5 billion.
Current report
Performance-based advisory fees in the second quarter of 2025 and 2024 were earned primarily from alternative strategies, and from equity and alternative strategies for the six months ended June 30, 2025 and 2024.
Current report
Capital allocation-based income includes the change in accrued carried interest along with acquisition-related amortization and impairments. In the second quarter of 2025, the change in accrued carried interest increased net revenues by $36.5 million compared to $27.0 million in the 2024 period. For the six months ended June 30, 2025, the change in accrued carried interest decreased net revenues by $45.7 million compared to $86.5 million for the 2024 period. The change in accrued carried interest for both the second quarter and six month periods compared to the 2024 periods was due to relative market impacts and performance.
Current report
Administrative, distribution, services, and other fees in the second quarter of 2025 were $149.7 million, an increase of $2.1 million, or 1.4%, from the comparable 2024 quarter. For the six months ended June 30, 2025, these fees were $306.0 million, an increase of $9.3 million, or 3.1%, from the 2024 period. The increases for both periods were primarily due to higher average assets on which we earn revenue for non-discretionary advisory services and higher recordkeeping fees. For the second quarter of 2025, these increases were partially offset by the timing of costs to be reimbursed by the firm's U.S. mutual funds compared to the 2024 period. The offsetting expense is recognized in product and recordkeeping related costs.
Current report
Compensation, benefits, and related costs were $648.8 million in the second quarter of 2025, an increase of $13.0 million, or 2.0%, compared to the 2024 quarter. For the six months ended June 30, 2025, these costs were $1,306.7 million, an increase of $41.6 million, or 3.3%, compared to the 2024 period. The increases in both periods were primarily due to higher salaries and related benefits, as base salaries modestly increased in January 2024 and we saw higher healthcare costs, and higher stock-based compensation. These increases were partially offset by lower other employee related costs compared to the 2024 periods. For the second quarter of 2025, a lower bonus accrual also partially offset the increase compared to the 2024 period.
Current report
Product and recordkeeping related costs were $74.8 million in the second quarter of 2025, an increase of $1.8 million, or 2.5%, compared to $73.0 million in the 2024 quarter. For the six months ended June 30, 2025, these costs were $158.6 million, an increase of $10.6 million, or 7.2%, from $148.0 million recognized in the comparable 2024 period. The increases in both periods were primarily due to higher custody fees related to our trust products and recordkeeping fees.
Removed paragraphs (13)
Previous report
Major stock indexes declined in the first quarter of 2025. Early optimism about the incoming Trump administration’s likely business-friendly policies faded amid concerns that President Trump’s tariffs on imports from major trading partners would lead to higher prices of goods sold in the U.S. and contribute to inflation pressures. Investors were also concerned that some weaker-than-expected economic data and reports from various retailers warning about slowing sales or decreased consumer spending would translate into slower economic growth, if not a recession. As the quarter ended, investors were bracing for President Trump to impose “reciprocal” tariffs in early April on countries that already have tariffs or other trade barriers on imports from the U.S.
Previous report
Emerging equity markets rose but trailed stocks in developed non-U.S. markets in U.S. dollar terms. In emerging Asia, markets were mostly negative in dollar terms, but Chinese shares were lifted in part by hopes that fiscal and monetary stimulus would lead to increased consumption and stronger economic growth. In Latin America and in the emerging Europe, Middle East, and Africa (EMEA) region, markets were mostly positive in dollar terms.
Previous report
(2)In the first quarter of 2024, performance-based advisory fees were included in investment advisory fees.
Previous report
In comparison to the first quarter of 2024, higher costs across compensation and related benefits and other expense categories were nearly offset by the change in the market-related impacts on the deferred compensation liabilities. As noted above, we remove the market-related impacts on the deferred compensation liabilities in our non-GAAP operating expenses measures as the liabilities are economically hedged.
Previous report
Diluted earnings per share was $2.15 for the first quarter of 2025 compared to $2.49 for the first quarter of 2024. The decrease was primarily driven by lower investment gains compared to the 2024 period.
Previous report
(2)In the first quarter of 2024, performance-based advisory fees were included in investment advisory fees.
Previous report
Investment advisory fees in the first quarter of 2025 increased 4.0% over the comparable 2024 quarter as average assets under management increased $135.9 billion, or 9.2%, to $1,620.3 billion.
Previous report
Performance-based advisory fees in the first quarter of 2025 were in equity and alternative strategies, while they were primarily equity in the 2024 period.
Previous report
Capital allocation-based income decreased net revenues by $1.2 million in the first quarter of 2025 compared with an increase in net revenue of $47.1 million in the 2024 quarter. The decrease over prior year was largely driven by a decline in the accrued carried interest allocation from investments in affiliated investment funds compared with the 2024 period. The decline was due to lower overall market returns. The firm realized carried interest of $43.1 million in the first quarter of 2025 compared to $52.7 million in the 2024 period.
Previous report
Administrative, distribution, services, and other fees in the first quarter of 2025 were $156.3 million, an increase of $7.2 million, or 4.8%, from the comparable 2024 quarter. The increase in the first quarter was primarily due to higher reimbursable costs associated with the firm's U.S. mutual funds, and non-discretionary advisory services. The reimbursable costs from the firm’s U.S. mutual funds are offset by expenses recognized in product and recordkeeping costs.
Previous report
Compensation, benefits, and related costs were $657.9 million in the first quarter of 2025, an increase of $28.6 million, or 4.5%, compared to the 2024 quarter. The increase was primarily due to higher salaries, employee benefits, and a higher interim bonus accrual. We award base salary increases in January of each year.
Previous report
Product and recordkeeping related costs were $83.8 million in the first quarter of 2025, an increase of $8.8 million, or 11.7%, compared to $75.0 million in the 2024 quarter. The increase was primarily due to higher reimbursable costs associated with the firm's U.S. mutual funds which is offset by the expected reimbursement recognized in administrative, distribution, services and other fee revenue.
Previous report
March 31, 2025 and 2024.
Reworded paragraphs (55)
Previous wording
Our revenues and net income are derived primarily from investment advisory services provided to individual and institutional investors in a broad range of investment solutions across equity, fixed income, multi-asset, and alternatives capabilities. We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; trust services; and non-discretionary advisory services.
Current wording
Our revenues and net income are derived primarily from investment advisory services provided globally to individual and institutional investors in a broad range of investment solutions across equity, fixed income, multi-asset, and alternatives capabilities. We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; trust services; and non-discretionary advisory services.
Previous wording
The investment management industry has been evolving and industry participants are facing challenging trends including passive investments taking market share from traditional active strategies; continued downward fee pressure; demand for new investment vehicles to meet client needs; and an ever-changing regulatory landscape. In this regard, we have ample liquidity and resources that allow us to take advantage of attractive growth opportunities. We are investing in key capabilities, including investment professionals, distribution professionals, technologies, and new product offerings in order to provide our clients with strong investment management expertise and service.
Current wording
The investment management industry is evolving, facing challenging trends such as passive investments taking market share from traditional active strategies; continued downward fee pressure; demand for new investment vehicles to meet client needs; and an ever-changing regulatory landscape. In this regard, we have ample liquidity and resources that allow us to take advantage of attractive growth opportunities. Furthermore, we have developed a broad and ongoing plan to align our expense growth with anticipated revenue growth. As a result, we have initiated certain actions to reduce expense growth, realign resources, and invest in existing and future capabilities, while also helping to offset ongoing inflationary pressures on compensation and contractual spending. These investments include hiring investment professionals, distribution professionals, adopting new technologies, and offering new products to provide our clients with strong investment management expertise and services.
Previous wording
Developed non-U.S. equity markets strongly outperformed U.S. shares in U.S. dollar terms. In Europe, equity markets were mostly positive in dollar terms, helped by expectations for eurozone spending on defense and infrastructure to increase, particularly in Germany. Developed Asian markets were mixed in dollar terms, with Japanese stocks adding only about 0.5%.
Current wording
Developed non-U.S. equity markets outperformed U.S. shares in U.S. dollar terms. In Europe, equity markets were broadly positive, helped in part by short-term interest rate cuts. UK shares lagged. Developed Asian markets were also broadly positive in dollar terms, with Japanese stocks gaining more than 11%.
Previous wording
Global bond returns were mostly positive in the first quarter of 2025. In the U.S., Treasury bill yields were little changed as the Federal Reserve held short-term interest rates steady due to inflation remaining above its 2% long-term goal. Intermediate- and long-term U.S. Treasury yields declined, however, amid concerns about slowing economic growth. The 10-year U.S. Treasury note yield decreased from 4.58% to 4.23% in the first quarter.
Current wording
Global bond returns were mostly positive in the second quarter of 2025. In the U.S., Treasury bill yields were little changed, as the Federal Reserve kept the federal funds target rate in the 4.25% to 4.50% range. Intermediate-term U.S. Treasury yields generally declined, but the 10-year U.S. Treasury note yield increased from 4.23% to 4.24%. The 30-year U.S. Treasury bond yield increased to a greater degree amid concerns about U.S. debts and budget deficits, and as Moody’s downgraded U.S. sovereign debt from AAA to AA1 in May.
Previous wording
In the U.S. investment-grade universe, sector performance was broadly positive. Mortgage-backed and Treasury securities performed best, but corporate bonds and non-agency commercial mortgage-backed securities also did well. Asset-backed securities lagged with milder gains. Tax-free municipal bonds trailed the broad taxable bond market, as intermediate-term yields fell less than comparable Treasury yields, and as long-term muni yields increased during the quarter. High yield corporate bonds produced modest gains but underperformed investment-grade bonds.
Current wording
In the investment-grade universe, sector performance was broadly positive. Non-agency commercial mortgage-backed securities and corporate bonds performed best, while asset-backed and mortgage-backed securities produced milder gains. Treasuries lagged. Tax-free municipal bonds trailed the broad taxable bond market, but high yield corporate bonds produced strong gains and outperformed investment-grade bonds.
Previous wording
Bonds in developed non-U.S. markets produced positive returns in U.S. dollar terms; returns to U.S. investors were enhanced by stronger non-U.S. currencies versus the dollar. In Europe, longer-term bond yields increased in various countries, particularly in March, in response to the German government’s plans to ramp up infrastructure and defense spending. The European Central Bank reduced interest rates twice during the quarter, while the Bank of England reduced its benchmark interest rate once. In Japan, long-term government bond yields rose steadily for most of the quarter, to levels unseen in about 16 years, in anticipation of tighter monetary policy later this year. However, yields retraced some of their increase in late March amid concerns that economic growth will slow in response to U.S. tariffs on Japanese automobiles and other exports. Emerging markets bonds produced positive returns in U.S. dollar terms. Bonds denominated in local currencies generally outperformed dollar-denominated bonds in U.S. dollar terms, as most developing markets currencies appreciated versus the dollar.
Current wording
Bonds in developed non-U.S. markets produced positive returns in U.S. dollar terms in the second quarter, as major non-U.S. currencies appreciated versus the U.S. dollar. In the eurozone, longer-term bond yields declined in many countries, as the European Central Bank (ECB) reduced its benchmark interest rates twice in the second quarter. In the UK, longer-term bond yields also decreased, as the Bank of England reduced its benchmark interest rate, the Bank Rate, from 4.50% to 4.25% in May. The euro rose more than 8% versus the U.S. dollar, while the British pound rose about 6%. In Japan, long-term government bond yields were little changed, as the Bank of Japan kept its benchmark interest rate at 0.50%. The yen rose about 3.5% versus the U.S. dollar. Emerging markets bonds produced positive returns in U.S. dollar terms. Bonds denominated in local currencies strongly outperformed dollar-denominated bonds in U.S. dollar terms, as most developing markets currencies appreciated versus the dollar.
Previous wording
Assets under management ended the first quarter of 2025 at $1,566.3 billion, a decrease of $40.3 billion from December 31, 2024. The decrease in assets under management during the first quarter of 2025 was driven by market depreciation of $31.7 billion and net cash outflows of $8.6 billion.
Current wording
Assets under management ended the second quarter of 2025 at $1,676.8 billion, an increase of $110.5 billion from March 31, 2025. The increase in assets under management during the second quarter of 2025 was driven by market appreciation and income, net of distributions not reinvested, of $125.4 billion, offset by net cash outflows of $14.9 billion.
Previous wording
The following table details changes in our assets under management, by asset class, during the first quarter of 2025:
Current wording
The following tables detail changes in our assets under management, by asset class, during the three- and six-month periods ended June 30, 2025:
Previous wording
(2) The alternatives asset class includes strategies authorized to invest more than 50% of its holdings in private credit, leveraged loans, mezzanine, real assets/CRE, structured products, stressed/distressed, non-investment grade CLOs, special situations, business development companies, or that have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included. Unfunded capital commitments were $17.1 billion at March 31, 2025 and are not reflected in fee basis AUM above.
Current wording
(2) The alternatives asset class includes strategies authorized to invest more than 50% of its holdings in private credit, leveraged loans, mezzanine, real assets/CRE, structured products, stressed / distressed, non-investment grade CLOs, special situations, or have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included. Unfunded capital commitments were $18.6 billion at June 30, 2025, $17.1 billion at March 31, 2025, and $16.2 billion at December 31, 2024, and are not reflected in fee basis AUM above.
Previous wording
(3)Includes net distributions not reinvested for the first quarter of 2025 of $0.5 billion.
Current wording
(3)Includes net distributions not reinvested for the three- and six-month periods ended June 30, 2025 of $0.4 billion and $0.9 billion, respectively.
Previous wording
Investment advisory clients outside the United States account for 8.7% of our assets under management at March 31, 2025 and 8.8% at December 31, 2024.
Current wording
Investment advisory clients outside the United States account for 8.7% of our assets under management at June 30, 2025, 8.7% at March 31, 2025, and 8.8% at December 31, 2024.
Previous wording
Assets under management in our target date retirement portfolios, which are included in the multi-asset totals shown above, were $484.2 billion at March 31, 2025, compared with $475.6 billion at December 31, 2024. Net flows into these portfolios were $6.3 billion in the first quarter of 2025.
Current wording
Assets under management in our target date retirement portfolios, which are included in the multi-asset totals shown above, were $520.3 billion at June 30, 2025, $484.2 billion at March 31, 2025, and $475.6 billion at December 31, 2024. Net flows into these portfolios were $1.7 billion and $8.0 billion in the three- and six-month periods ended June 30, 2025, respectively.
Previous wording
We also provide strategic investment advice solutions to certain portfolios. These advice solutions, primarily overseen by our multi-asset division, may include strategic asset allocation, and in certain portfolios, asset selection and/or tactical asset allocation overlays. We also offer advice solutions through retail separately managed accounts and separately managed accounts model delivery. As of March 31, 2025, total assets in these solutions were $566 billion, of which $551 billion are included in our reported assets under management in the table above.
Current wording
We also provide strategic investment advice solutions to certain portfolios. These advice solutions, primarily overseen by our multi-asset division, may include strategic asset allocation, and in certain portfolios, asset selection and/or tactical asset allocation overlays. We also offer advice solutions through retail separately managed accounts and separately managed accounts model delivery. As of June 30, 2025, total assets in these solutions were $623 billion, of which $592 billion are included in our reported assets under management in the tables above.
Previous wording
We provide participant accounting and plan administration for retirement plans that primarily invest in the firm's U.S. mutual funds, collective investment trusts and funds outside of the firm's complex. As of March 31, 2025, our assets under administration were $280 billion, of which $158 billion are assets we manage.
Current wording
We provide participant accounting and plan administration for retirement plans that primarily invest in the firm's U.S. mutual funds, collective investment trusts and funds outside of the firm's complex. As of June 30, 2025, our assets under administration were $302 billion, of which $170 billion are assets we manage.
Previous wording
Strong investment performance and brand awareness is a key driver to attracting and retaining assets—and to our long-term success. Our performance disclosures include specific asset classes, assets under management weighted performance, mutual fund performance against passive peers, and composite performance against benchmarks. The following tables present investment performance for the one-, three-, five-, and 10-years ended March 31, 2025. Past performance is not a reliable indicator of future performance.
Current wording
Strong investment performance and brand awareness is a key driver to attracting and retaining assets—and to our long-term success. Our performance disclosures include specific asset classes, assets under management weighted performance, U.S. fund performance against passive peers, and composite performance against benchmarks. The following tables present investment performance for the one-, three-, five-, and 10-years ended June 30, 2025. Past performance is not a reliable indicator of future performance.
Previous wording
As of March 31, 2025, 83 of 142 (58.5%) of the firm's rated U.S. mutual funds (across primary share classes) received an overall rating of 4 or 5 stars. By comparison, 32.5% of Morningstar's fund population is given a rating of 4 or 5 stars(6). In addition, 66%(6) of AUM in the firm's rated U.S. mutual funds (across primary share classes) ended March 31, 2025 with an overall rating of 4 or 5 stars.
Current wording
As of June 30, 2025, 67 of 142 (47.2%) of the firm's rated U.S. mutual funds (across primary share classes) received an overall rating of 4 or 5 stars. By comparison, 32.5% of Morningstar's fund population is given a rating of 4 or 5 stars(6). In addition, 58%(6) of AUM in the firm's rated U.S. mutual funds (across primary share classes) ended June 30, 2025 with an overall rating of 4 or 5 stars.
Previous wording
(1)The investment performance reflects that of T. Rowe Price U.S. mutual funds and composites AUM.
Current wording
(1)The investment performance reflects that of T. Rowe Price U.S. mutual funds, ETFs, and composites.
Previous wording
(3) Source: Morningstar. Primary share class only. Excludes money market mutual funds, U.S. mutual funds with an operating history of less than one year, T. Rowe Price passive funds, and T. Rowe Price U.S. mutual funds that are clones of other funds. The top chart reflects the percentage of T. Rowe Price U.S. mutual funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the Morningstar category median. The bottom chart reflects the percentage of T. Rowe Price U.S. mutual funds AUM that has outperformed for the time periods indicated. Total U.S. Mutual Fund AUM included for this analysis includes $307B for 1 year, $300B for 3 years, $299B for 5 years, and $298B for 10 years.
Current wording
(3) Source: Morningstar. Primary share class only. Excludes money market mutual funds, funds with an operating history of less than one year, T. Rowe Price passive funds, and T. Rowe Price funds that are clones of other funds. The top chart reflects the percentage of T. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that outperformed the Morningstar category median. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $327B for 1 year, $320B for 3 years, $318B for 5 years, and $317B for 10 years.
Previous wording
(4) Passive Peer Median was created by T. Rowe Price using data from Morningstar. Primary share class only. Excludes money market mutual funds, mutual funds with an operating history of less than one year, mutual funds with fewer than three peers, T. Rowe Price passive mutual funds, and T. Rowe Price mutual funds that are clones of other funds. This analysis compares T. Rowe Price active funds with the applicable universe of passive/index open-end funds and ETFs of peer firms. The top chart reflects the percentage of T. Rowe Price mutual funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the passive peer universe. The bottom chart reflects the percentage of T. Rowe Price mutual funds AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $290B for 1 year, $284B for 3 years, $245B for 5 years, and $237B for 10 years.
Current wording
(4) Passive Peer Median was created by T. Rowe Price using data from Morningstar. Primary share class only. Excludes money market mutual funds, funds with an operating history of less than one year, funds with fewer than three peers, T. Rowe Price passive funds, and T. Rowe Price funds that are clones of a retail fund. This analysis compares T. Rowe Price active funds with the applicable universe of passive/index open-end funds and ETFs of peer firms. The top chart reflects the percentage of T. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that outperformed the passive peer universe. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $275B for 1 year, $264B for 3 years, $262B for 5 years, and $254B for 10 years.
Previous wording
(5)Composite net returns are calculated using the highest applicable separate account fee schedule. Excludes money market composites. All composites compared to official GIPS composite primary benchmark. The top chart reflects the percentage of T. Rowe Price composites with 1 year, 3 year, 5 year, and 10 year track record that are outperforming their benchmarks. The bottom chart reflects the percentage of T. Rowe Price composite AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $1,391B for 1 year, $1,385B for 3 years, $1,380B for 5 years, and $1,338B for 10 years.
Current wording
(5)Composite net returns are calculated using the highest applicable separate account fee schedule. Excludes money market composites. All composites compared to official GIPS composite primary benchmark. The top chart reflects the percentage of T. Rowe Price composites with 1 year, 3 year, 5 year, and 10 year track record that are outperforming their benchmarks. The bottom chart reflects the percentage of T. Rowe Price composite AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $1,486B for 1 year, $1,480B for 3 years, $1,475B for 5 years, and $1,429B for 10 years.
Previous wording
The following table and discussion sets forth information regarding our consolidated financial results for the first quarter of 2025 and 2024 on a U.S. GAAP basis and a non-GAAP basis. The non-GAAP basis adjusts for the impact of our consolidated investment products, the impact of market movements on the deferred compensation liabilities and related economic hedges, investment income related to certain other investments, acquisition-related amortization and costs, impairment charges, and certain nonrecurring charges and gains, if any.
Current wording
The following table and discussion sets forth information regarding our consolidated financial results for the three- and six-month periods ended June 30, 2025 and 2024 on a U.S. GAAP and a non-GAAP basis. The non-GAAP basis adjusts for the impact of our consolidated investment products, the impact of market movements on the deferred compensation liabilities and related economic hedges, investment income related to certain other investments, acquisition-related amortization and costs, impairment charges, and certain nonrecurring charges and gains, if any.
Previous wording
Operating expenses on a U.S. GAAP basis were $1,167.6 million in the first quarter of 2025, a 0.3% increase over the comparable 2024 period. On a non-GAAP basis, operating expenses were $1,135.1 million, a 5.9% increase over the comparable 2024 period.
Current wording
Operating expenses on a U.S. GAAP basis were $1,245.0 million in the second quarter of 2025, a 6.5% increase over the comparable 2024 period. On a non-GAAP basis, operating expenses were $1,147.2 million, a 3.7% increase over the comparable 2024 period.
Previous wording
Operating margin in the first quarter of 2025 was 33.8% on a U.S. GAAP basis, compared to 33.5% earned in the first quarter of 2024. The increase in our U.S. GAAP operating margin for the first quarter of 2025 compared to the 2024 period was driven by net revenue growth outpacing operating expense growth primarily due to higher investment advisory fee revenue and market-related reductions in deferred compensation liabilities.
Current wording
Operating margin in the second quarter of 2025 was 27.8% on a U.S. GAAP basis, compared to 32.6% earned in the second quarter of 2024. The decrease was driven by operating expense growth outpacing net revenue growth primarily due to higher market-related increases in deferred compensation liabilities.
Previous wording
On a non-GAAP basis, diluted earnings per share was $2.23 for the first quarter of 2025 as compared to $2.38 for the first quarter of 2024. The decrease was primarily due to lower adjusted operating income and a higher adjusted effective tax rate compared to the 2024 period.
Current wording
On a non-GAAP basis, diluted earnings per share was $2.24 for the second quarter of 2025 as compared to $2.26 for the second quarter of 2024. The decrease was primarily due to lower adjusted operating income partially offset by a lower adjusted tax rate and higher adjusted investment gains compared to the 2024 period.
Previous wording
Net revenues consist of investment advisory revenues; performance-based advisory fees; administrative, distribution, services, and other fees; and capital allocation-based income. More than 90% of our net revenues are related to investment advisory fees. Total net revenues were $1,763.9 million in the first quarter of 2025, a 0.8% increase compared to $1,750.2 million in the 2024 quarter. The increase was primarily driven by a 4.0% increase in investment advisory fee revenue as average assets under management increased 9.2%. This increase was nearly offset by a $48.3 million decline in capital allocation-based income (change in accrued carried interest) earned from certain affiliated funds.
Current wording
Net revenues consist of investment advisory revenues; performance-based advisory fees; administrative, distribution, services, and other fees; and capital allocation-based income. More than 90% of our net revenues for the six months ended June 30, 2025 are related to investment advisory fees. Total net revenues were $3,487.2 million in the six months ended June 30, 2025, a 0.1% increase over $3,483.5 million in the 2024 period. The increase was primarily driven by a 2.0% increase in investment advisory fee revenue as average assets under management increased by 6.3% and a $9.3 million increase in non-advisory revenues, partially offset by a $48.8 million decrease in capital allocation-based income (change in accrued carried interest) earned from investments in certain affiliated funds and a $17.6 million decrease in performance-based advisory fees.
Previous wording
The average annualized effective fee rate earned for the first quarter of 2025 declined from the comparable 2024 period as client flows and transfers led to a mix shift in assets under management toward lower fee asset classes and products.
Current wording
The average annualized effective fee rate earned for the three- and six-month periods ended June 30, 2025 declined from the comparable 2024 periods as market movements and client flows and transfers shifted assets under management toward lower-fee asset classes and products.
Previous wording
investment products. The corresponding expenses recognized by these products, and consolidated in our financial statements, were also eliminated from operating expenses. For the first quarter, we eliminated net revenue of $1.4 million in 2025 and $1.2 million in 2024.
Current wording
investment products. The corresponding expenses recognized by these products, and consolidated in our financial statements, were also eliminated from operating expenses. For the second quarter, we eliminated net revenue of $1.4 million in 2025 and $0.5 million in 2024. For the six months ended June 30, we eliminated net revenue of $2.8 million in 2025 and $1.7 million in 2024.
Previous wording
The firm employed 8,084 associates at March 31, 2025, a decrease of 0.9% from the end of 2024, and an increase of 2.6% from March 31, 2024.
Current wording
The firm employed 8,063 associates at June 30, 2025, a decrease of 0.3% from 8,084 associates at March 31, 2025, a decrease of 1.2% from the end of 2024, and an increase of 1.7% from June 30, 2024.
Previous wording
Distribution and servicing costs were $93.6 million in the first quarter of 2025, an increase of $11.7 million, or 14.3%, compared to $81.9 million recognized in the 2024 quarter. The increase was primarily driven by higher average assets under management distributed through intermediaries.
Current wording
Distribution and servicing costs were $92.5 million for the second quarter of 2025, an increase of $4.8 million, or 5.5%, from $87.7 million recognized in the 2024 quarter. For the six months ended June 30, 2025, these costs were $186.1 million, an increase of $16.5 million, or 9.7%, from $169.6 million recognized in the comparable 2024 period. The increases in both periods were primarily driven by higher average assets under management distributed through intermediaries.
Previous wording
Technology, occupancy, and facility costs were $167.6 million in the first quarter of 2025, an increase of $17.7 million, or 11.8%, compared to $149.9 million recognized in the 2024 quarter. The increase was primarily due to higher costs from the firm's ongoing investment in its technology capabilities, primarily hosted solutions and depreciation. Additionally, the 2024 quarter included a non-recurring cost benefit related to the firm's UK facility. We began occupying our new corporate headquarters in March.
Current wording
Technology, occupancy, and facility costs were $179.4 million in the second quarter of 2025, an increase of $18.5 million, or 11.5%, compared to the $160.9 million recognized in the 2024 quarter. For the six months ended June 30, 2025, these costs were $347.0 million, an increase of $36.2 million, or 11.6%, compared with the 2024 period. The increases in both periods were primarily due to higher technology costs, including hosted solutions and depreciation. Also contributing to the increase was higher occupancy and facility costs related to the firm’s new corporate headquarters, which was occupied in March 2025, and a non-recurring cost benefit related to the firm's UK facility in the first quarter of 2024.
Previous wording
General, administrative, and other expenses were $103.3 million in the first quarter of 2025, an increase of $10.7 million, or 11.6%, compared to $92.6 million recognized in the 2024 quarter. The increase was primarily due to higher professional fees and information services.
Current wording
General, administrative, and other expenses were $109.5 million in the second quarter of 2025, an increase of $0.8 million, or 0.7%, compared to the $108.7 million recognized in the 2024 quarter. For the six months ended June 30, 2025, these costs were $212.8 million, an increase of $11.5 million, or 5.7%, compared with the 2024 period. The increases in both periods were primarily due to higher professional fees and information services partially offset by lower external research fees.
Previous wording
Acquisition-related amortization and impairment costs primarily relate to the indefinite- and definite-lived intangible assets identified and separately recognized, at fair value, on acquisition date. In the first quarter of 2025, we recognized acquisition-related amortization and impairment costs of $28.7 million, a decrease of $1.2 million, or 4.0%, compared to $29.9 million recognized in the 2024 period. The decrease was primarily driven by lower impairment charges related to certain definite-lived intangible assets. Should conditions that led us to recognize the impairment charges deteriorate further, additional impairments may be recognized in future periods.
Current wording
Acquisition-related amortization and impairment costs primarily relate to the indefinite- and definite-lived intangible assets identified and separately recognized, at fair value, on acquisition date. For the second quarter of 2025, we recognized $31.2 million in amortization and impairments related to the definite and indefinite-lived intangible assets, compared to $43.9 million in the 2024 quarter. For the six months ended June 30, 2025, we recognized $59.9 million in amortization and impairments related to the definite and indefinite-lived intangible assets, compared to $73.8 million, in the 2024 period. The 2024 periods include impairments charges totaling $18.0 million on definite and indefinite-lived intangible assets. The decreases in both periods were primarily driven by lower impairment charges related to certain indefinite-lived intangible assets. If conditions that led us to recognize impairment charges worsen, additional impairments may be recognized in future periods.
Previous wording
Non-operating income for the first quarter of 2025 was $70.7 million compared to $188.9 million in the 2024 quarter. The following table details the components of non-operating income for both the first quarter of 2025 and 2024.
Current wording
Non-operating income for the second quarter of 2025 was $235.5 million compared to $80.3 million in the 2024 quarter. The following table details the components of non-operating income for both the three- and six-month periods ended June 30, 2025 and 2024.
Previous wording
Lower investment gains earned by our investment portfolio during the first quarter of 2025 compared to the 2024 periods were primarily due to lower overall market returns.
Current wording
Higher investment gains earned by our investment portfolio during the three- and six-month periods ended June 30, 2025 compared to the 2024 periods were primarily due to higher cash and investment holdings coupled with stronger overall market returns.
Previous wording
The GAAP effective tax rate for the first quarter of 2025 was 24.3% compared with 23.5% in the first quarter of 2024. The following table reconciles the statutory federal income tax rate to our effective tax rate on a U.S. GAAP basis for the three months ended March 31, 2025 and 2024:
Current wording
The GAAP effective tax rate for the second quarter of 2025 was 22.1% compared with 24.8% in the second quarter of 2024. These quarterly rates were the result of an overall year-to-date rate of 23.1% for 2025 and 24.1% for 2024. The following table reconciles the statutory federal income tax rate to our effective tax rate on a U.S. GAAP basis for the six months ended June 30, 2025 and 2024:
Previous wording
The adjusted effective tax rate primarily adjusts for the impact of the consolidated investment products, including the net income attributable to the redeemable non-controlling interests. Our adjusted effective tax rate for the first quarter was 24.7% in 2025 compared with 23.9% in 2024. The increase in both the U.S. GAAP and adjusted effective tax rates was primarily due to higher state taxes in the 2025 quarter.
Current wording
The adjusted effective tax rate primarily adjusts for the impact of the consolidated investment products, including the net income attributable to the redeemable non-controlling interests. The decrease in the year-to-date 2025 U.S. GAAP and adjusted effective tax rates compared to 2024 was primarily due to the reversal of a valuation allowance related to U.S. foreign tax credit carryovers.
Previous wording
Our effective tax rate will continue to experience volatility in future periods as the tax benefits recognized from stock-based compensation are impacted by market fluctuations in our stock price and the timing of option exercises. The rate also experiences volatility from the changes in deferred tax asset valuation allowances, primarily in foreign jurisdictions, based on the sufficiency of taxable income in future periods. Our U.S. GAAP rate will also be impacted by changes in the proportion of net income that is attributable to our redeemable non-controlling interests and non-controlling interests reflected in permanent equity.
Current wording
Our effective tax rate will continue to experience volatility in future periods due to tax benefits recognized from stock-based compensation being influenced by market fluctuations in our stock price, and changes in deferred tax asset valuation allowances, primarily in foreign jurisdictions, being impacted by the sufficiency of taxable income in future periods. Our U.S. GAAP rate will also be impacted by changes in the proportion of net income that is attributable to our redeemable non-controlling interests and non-controlling interests reflected in permanent equity.
Previous wording
The following schedules reconcile certain U.S. GAAP financial measures for the three months ended
Current wording
The following schedules reconcile certain U.S. GAAP financial measures to Non-GAAP financial measures for the three months ended June 30, 2025 and 2024.
Previous wording
(1) These non-GAAP adjustments remove the impact of acquisition-related amortization and costs, including amortization of intangible assets, the recurring fair value remeasurements of the contingent consideration liability, if any, amortization of acquired investment and non-controlling interest basis differences and amortization of compensation-related arrangements. We believe adjusting for these charges helps the reader's ability to understand our core operating results and increases comparability period to period.
Current wording
(1) These non-GAAP adjustments remove the impact of acquisition-related amortization of intangible assets, the recurring fair value remeasurements of the contingent consideration liability, if any, amortization of acquired investment and non-controlling interest basis differences and amortization of compensation-related arrangements. We believe adjusting for these charges helps the reader's ability to understand our core operating results and increases comparability period to period.
Previous wording
(2) This non-GAAP adjustment eliminates the compensation expense impact from market valuation changes in deferred compensation liabilities, including the supplemental savings plan and, starting in the fourth quarter of 2024, restricted fund units, and the related net gains (losses) on investments used as economic hedges against the related liabilities. The liabilities are adjusted based on the performance of hypothetical investments selected by participants. We use investment products to economically hedge the market risk associated with the supplemental savings plan liability and the expected settlement value of unvested restricted fund units. We believe it is useful to offset the non-operating investment income (loss) of the hedges against the related compensation expense and remove the net impact to help the reader's ability to understand the firm's core operating results and to increase comparability period to period.
Current wording
(2) This non-GAAP adjustment eliminates the compensation expense impact from market valuation changes in deferred compensation liabilities, including the supplemental savings plan and, starting in the fourth quarter of 2024, restricted fund units, and the related net gains (losses) on investments used as economic hedges against the related liabilities. The liabilities are adjusted based on the performance of hypothetical investments selected by participants. We use investment products to economically hedge the market risk associated with the supplemental savings plan liability and the expected settlement value of unvested restricted fund units. We believe it is useful to offset the non-operating investment income
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Current report — wording carried from elsewhere
Net revenues consist of investment advisory revenues; performance-based advisory fees; administrative, distribution, services, and other fees; and capital allocation-based income. More than 90% of our net revenues are related to investment advisory fees. Total net revenues were $1,723.3 million in the second quarter of 2025, a 0.6% decrease compared to $1,733.3 million in the 2024 quarter. The decrease was primarily driven by a decrease in performance-based advisory fees.
Current report — wording carried from elsewhere
The following schedules reconcile certain U.S. GAAP financial measures to non-GAAP financial measures for the six months ended June 30, 2025 and 2024.
Current report — wording carried from elsewhere
(loss) of the hedges against the related compensation expense and remove the net impact to help the reader's ability to understand the firm's core operating results and to increase comparability period to period.