PRICE T ROWE GROUP INC
For the period ended Sep 30, 2026. Filed Oct 29, 2026.
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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.
Sep 30, 2026 · Filed Oct 29, 2026
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 2026-06-30; filed 2026-07-31.
0001628280-26-051335
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-29.
0001113169-26-000005
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 140 previous paragraphs and 138 current paragraphs.
48 unchanged; 80 reworded; 9 added; 8 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 20 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 (9)
Current report
Global equity markets generated mixed returns during the third quarter of 2026 as investors balanced resilient corporate earnings against renewed escalation in the U.S.-Iran conflict, uneven labor market data, and persistent inflation pressures. Higher energy prices and a tighter monetary policy backdrop contributed to divergent performance across regions, market capitalizations, investment styles, and sectors.
Current report
International equity markets were mixed during the third quarter as developed European markets posted gains in July and August before declining in September, while developed Asian markets increased. Japanese equities were supported by semiconductor and other artificial intelligence-related shares, as well as a weaker yen following the Bank of Japan’s July policy meeting where it held its policy rate at 1.00%. Emerging market equities were roughly flat, as strength in semiconductor-related companies in South Korea and Taiwan was offset by pressure on energy-importing markets and weakness in China related to soft domestic demand and property-sector data.
Current report
Global fixed income markets generated negative returns during the third quarter of 2026 as government bond yields moved higher and several major central banks shifted toward tighter monetary policy. Persistent inflation pressures, elevated energy costs, geopolitical uncertainty, and concerns about government debt supply weighed on bond prices across developed and emerging markets.
Current report
The Federal Reserve maintained the federal funds target range at 3.50% to 3.75% in July, with three policymakers dissenting in favor of an immediate increase. In September, the Federal Reserve unanimously raised the target range to 3.75% to 4.00%, its first increase in more than three years. Updated projections indicated that most policymakers expected another increase before year-end.
Current report
U.S. fixed income markets recorded negative returns as Treasury yields increased across the curve, with the Federal Reserve’s September rate increase, stronger economic data, and firm inflation readings leading investors to price a higher policy-rate path. Within the investment-grade bond universe, mortgage-backed securities declined the most, followed by corporate bonds and U.S. Treasuries, while non-agency commercial mortgage-backed securities and asset-backed securities also decreased.
Current report
International and emerging markets also declined during the quarter. Developed market sovereign yields rose as tighter monetary policy and higher energy costs sustained inflation concerns, while weakness in several major currencies against the U.S. dollar reduced U.S. dollar-based returns. Emerging market hard currency debt underperformed local currency debt as rising U.S. Treasury yields pressured dollar-denominated sovereign bonds, while the U.S. dollar strengthened in September, weighing on currencies in several oil-importing economies.
Current report
Diluted earnings per share was $2.79 for the third quarter of 2026 compared to $2.87 for the third quarter of 2025. The decrease was primarily driven by lower non-operating income partially offset by higher operating income and lower weighted-average shares outstanding compared to the 2025 period.
Current report
General, administrative, and other costs were $95.5 million in the third quarter of 2026, an increase of $7.9 million, or 9.0%, compared to the $87.6 million recognized in the 2025 quarter. For the nine months ended September 30, 2026, these costs were $292.8 million, an increase of $21.6 million, or 8.0%, compared to $271.2 million recognized in the 2025 period. The increases from both periods were primarily attributable to period-specific items, including a benefit recognized in the third quarter of 2025 that didn't recur in the 2026 periods, and a non-recurring cost recognized in 2026. Higher travel costs in the 2026 periods also contributed to the increase.
Current report
In August 2026, we entered into an agreement to acquire F/m Investments, LLC for about $75 million plus up to $50 million in contingent consideration that may be due as part of an earnout payment. The transaction is expected to close in the first quarter of 2027, subject to receipt of required regulatory approvals and satisfaction of other customary closing conditions, and is expected to be funded with existing cash balances.
Removed paragraphs (8)
Previous report
Global equity markets generated strong gains during the second quarter of 2026, recovering sharply from first-quarter volatility as geopolitical tensions eased, corporate earnings remained resilient, and investor enthusiasm surrounding AI and semiconductor-related companies continued to support risk assets. The quarter began with a broad rally after a series of Middle East ceasefire agreements reduced concerns about global energy and shipping disruptions, and oil prices declined from earlier highs as diplomatic progress continued through June.
Previous report
International equity markets produced strong gains during the second quarter of 2026 despite periods of volatility related to geopolitical developments, trade negotiations, and evolving monetary policy expectations. Developed markets benefited from improving Middle East conditions, declining energy prices, stronger investor risk appetite, and continued enthusiasm surrounding AI and semiconductor-related companies. Emerging market equities also generated robust returns, supported by renewed capital flows into higher-risk markets and lower oil prices, which particularly benefited many energy-importing economies. Performance varied across regions, with Taiwan benefiting from continued semiconductor demand, Chinese equities supported by stronger-than-expected economic growth, targeted policy measures, and investor sentiment improving following the summit in Beijing despite the absence of a comprehensive trade agreement.
Previous report
Global fixed income markets generated positive returns during the second quarter of 2026, although performance was volatile as investors weighed improving geopolitical conditions against persistent inflation pressures and a shifting monetary policy outlook. Easing tensions in the Middle East, lower oil prices, and several cooler-than-expected inflation readings supported bond prices early in the quarter, while subsequent moves in oil prices, stronger economic data, and evolving Federal Reserve communication periodically reshaped expectations for monetary policy.
Previous report
The Federal Reserve maintained the federal funds target range at 3.50% to 3.75% at both its April and June meetings. Policy messaging evolved during the quarter including eliminating forward guidance language and announcing a review of the Federal Reserve’s policy framework and communications practices.
Previous report
In the U.S. investment-grade bond universe, sector performance was positive in absolute terms. Corporate bonds performed best, followed by asset-backed securities, with non-agency commercial mortgage-backed securities, mortgage-backed securities, and U.S. Treasuries also recording gains. The U.S. dollar ultimately strengthened after a weak April as persistent inflation, more hawkish Federal Reserve communications, and residual geopolitical uncertainty supported renewed demand for the dollar.
Previous report
International and emerging market bonds also produced positive second-quarter returns. Developed market sovereign yields moved unevenly as initial optimism surrounding the Middle East ceasefire later gave way to renewed inflation and monetary policy concerns before stabilizing as energy prices declined. Emerging market bonds advanced across both hard currency and local currency sectors, supported by improving geopolitical conditions, tighter sovereign credit spreads, and resilient demand for risk assets, though local currency gains moderated late in the quarter as the U.S. dollar strengthened.
Previous report
Diluted earnings per share was $2.88 for the second quarter of 2026 compared to $2.24 for the second quarter of 2025. The increase was primarily driven by higher net investment gains and higher operating income compared to the 2025 period.
Previous report
General, administrative, and other expenses were $104.9 million in the second quarter of 2026, an increase of $11.0 million, or 11.7%, compared to the $93.9 million recognized in the 2025 quarter. For the six months ended June 30, 2026, these costs were $197.3 million, an increase of $13.7 million, or 7.5%, compared with $183.6 million recognized in the 2025 period. The increase was primarily due to higher travel costs and certain non-recurring administrative costs.
Reworded paragraphs (80)
Previous wording
We incur significant expenditures to develop new products and services and improve and expand our capabilities and distribution channels in order to attract new clients and additional investments from our existing clients. These efforts often involve costs that precede any future revenues we may recognize from an increase to our assets under management.
Current wording
We incur significant expenditures to develop new products and services and improve and expand our capabilities and distribution channels in order to attract new clients and additional investments from our existing clients. These efforts often involve costs that precede any future revenues we may earn from an increase to our assets under management.
Previous wording
U.S. equities advanced broadly, although market leadership varied by capitalization, investment style, and sector. Small-cap shares outperformed mid- and large-cap shares, and growth stocks outperformed value stocks across market capitalizations. Within the S&P 500 Index, information technology led sector gains, while industrials and business services, consumer discretionary, financials, health care, real estate, and communication services advanced but generally lagged the broader index. Energy declined sharply, and utilities recorded a slight loss.
Current wording
U.S. equity markets were mixed, with large-cap shares outperforming small- and mid-cap shares and value stocks outperforming growth stocks across market capitalizations. Within the S&P 500 Index, energy advanced by double-digit gains and information technology, health care, and communication services advanced, while utilities recorded double-digit losses and industrials and business services, real estate, consumer discretionary, materials, and consumer staples declined.
Previous wording
Assets under management ended the second quarter of 2026 at $1,893.4 billion, an increase of $183.7 billion from March 31, 2026. The increase was driven by market appreciation, net of distributions not reinvested, of $190.2 billion, offset by net cash outflows of $6.5 billion.
Current wording
Assets under management ended the third quarter of 2026 at $1,862.7 billion, a decrease of $30.7 billion from June 30, 2026. The decrease was driven by net cash outflows of $28.3 billion and market depreciation, net of distributions not reinvested, of $2.4 billion.
Previous wording
For the six months ended June 30, 2026, the increase in assets under management was primarily driven by market appreciation, net of distributions not reinvested, of $138.0 billion, offset by net cash outflows of $20.2 billion.
Current wording
For the nine months ended September 30, 2026, the increase in assets under management of $87.1 billion was primarily driven by market appreciation, net of distributions not reinvested, of $135.6 billion, offset by net cash outflows of $48.5 billion.
Previous wording
The following table details changes in our assets under management, by asset class, during the three- and six-month periods ended June 30, 2026:
Current wording
The following table details changes in our assets under management, by asset class, during the three- and nine-month periods ended September 30, 2026:
Previous wording
(1) Includes fee earning assets in which T. Rowe Price and its affiliates have full discretionary authority along with managed account - model delivery assets.
Current wording
(1) Firmwide AUM includes assets in which T. Rowe Price Group, Inc. and its affiliates have full discretionary authority along with managed account - model delivery assets.
Previous wording
(2) The underlying assets under management of the multi-asset portfolios have been aggregated and presented in this category and not reported in the equity and fixed income columns.
Current wording
(2) The underlying AUM of the multi-asset portfolios have been aggregated and presented in this category and not reported in the equity and fixed income columns.
Previous wording
(3) 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, private equity, or have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included. Unfunded capital commitments were $21.0 billion at June 30, 2026, $20.9 billion at March 31, 2026, and $21.6 billion at December 31, 2025, and are not reflected in fee basis AUM above.
Current wording
(3) 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, private equity or that have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included. Unfunded capital commitments that do not earn fees were $19.0 billion at September 30, 2026, $21.0 billion at June 30, 2026, and $21.6 billion at December 31, 2025, and are not reflected in the AUM above.
Previous wording
(4)Includes net distributions not reinvested for the three- and six-month periods ended June 30, 2026 of $0.6 billion and $1.2 billion, respectively.
Current wording
(4)Includes net distributions not reinvested for the three- and nine-month periods ended September 30, 2026 of $0.7 billion and $1.9 billion, respectively.
Previous wording
Investors domiciled outside the United States account for 9.1% of our assets under management at June 30, 2026, 8.6% at March 31, 2026, and 8.8% at December 31, 2025.
Current wording
Investors domiciled outside the United States account for 9.3% of our AUM at September 30, 2026, 9.1% at June 30, 2026, and 8.8% at December 31, 2025.
Previous wording
Assets under management in our target date retirement products, which are included in the multi-asset totals shown above, were $622.0 billion at June 30, 2026, $561.3 billion at March 31, 2026, and $561.4 billion at December 31, 2025. Net flows into these portfolios were $1.7 billion and $6.6 billion in the three- and six-month periods ended June 30, 2026, respectively.
Current wording
Assets under management in our target date retirement products, which are included in the multi-asset totals shown above, were $613.9 billion at September 30, 2026, $622.0 billion at June 30, 2026, and $561.4 billion at December 31, 2025. Net outflows for these portfolios were $6.5 billion and net inflows were $0.1 billion in the three- and nine-month periods ended September 30, 2026, respectively.
Previous wording
Our multi-asset investment division provides advisory solutions that include investment insights, strategic asset allocation design, tactical asset allocation recommendations, and portfolio rebalancing services. The assets in these solutions, predominantly in the United States, were $31.1 billion at June 30, 2026 and $27.8 billion at March 31, 2026.
Current wording
Our multi-asset investment division provides advisory solutions, including investment insights, strategic asset allocation design, tactical asset allocation recommendations, and portfolio rebalancing services. The assets in these portfolios, predominantly in the United States, were $31.4 billion at September 30, 2026 compared to $31.1 billion at June 30, 2026.
Previous wording
We provide participant accounting and plan administration for defined contribution retirement plans that primarily invest in our U.S. mutual funds, collective investment trusts and funds managed outside of our complex. As of June 30, 2026, our assets under administration were $349 billion, of which $192 billion were assets we managed.
Current wording
We provide participant accounting and plan administration for retirement plans that primarily invest in our U.S. mutual funds, collective investment trusts and products managed outside of our complex. At September 30, 2026, our assets under administration were $346 billion, of which $186 billion were assets we managed.
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, 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, 2026. Past performance is not a guarantee nor a reliable indicator of future performance.
Current wording
Strong investment performance and brand awareness are key drivers 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-year periods ended September 30, 2026. Past performance is not a guarantee nor a reliable indicator of future performance.
Previous wording
As of June 30, 2026, 64 of 142 (45.1%) 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, 57.0%(6) of AUM in the firm's rated U.S. mutual funds (across primary share classes) ended June 30, 2026 with an overall rating of 4 or 5 stars.
Current wording
At September 30, 2026, 64 of 142 (45.1%) 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, 57.0%(6) of AUM in the firm's rated U.S. mutual funds (across primary share classes) ended September 30, 2026 with an overall rating of 4 or 5 stars.
Previous 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 $332B for 1 year, $331B for 3 years, $315B for 5 years, and $314B 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 $319B for 1 year, $317B for 3 years, $302B for 5 years, and $299B 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, 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 $314B for 1 year, $273B for 3 years, $257B for 5 years, and $250B 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 $300B for 1 year, $259B for 3 years, $244B for 5 years, and $240B 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 $1,661B for 1 year, $1,661B for 3 years, $1,645B for 5 years, and $1,604B 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 $1,637B for 1 year, $1,635B for 3 years, $1,621B for 5 years, and $1,578B for 10 years.
Previous wording
The following table and discussion sets forth information regarding our consolidated financial results for the three- and six-month periods ended June 30, 2026 and 2025 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 non-recurring charges and gains, including the restructuring charges.
Current wording
The following table and discussion set forth information regarding our consolidated financial results for the three- and nine-month periods ended September 30, 2026 and 2025 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 non-recurring charges and gains, including the restructuring charges.
Previous wording
Net revenues consist of investment advisory revenues; performance-based advisory fees; capital allocation-based income; and administrative, distribution, servicing, and other fees. More than 90% of our net revenues are related to investment advisory fees. Total net revenues were $1,907.4 million in the second quarter of 2026, a 10.7% increase over $1,723.3 million in the second quarter of 2025. The increase was primarily driven by an 11.3% increase in investment advisory fee revenue as higher overall markets increased average assets under management by 15.7%.
Current wording
Net revenues consist of investment advisory revenues; performance-based advisory fees; capital allocation-based income; and administrative, distribution, servicing, and other fees. About 90% of our net revenues are related to investment advisory fees. Total net revenues were $2,004.9 million in the third quarter of 2026, a 5.9% increase over $1,893.5 million in the third quarter of 2025. The increase was primarily driven by a 5.8% increase in investment advisory fee revenue as higher overall markets increased average assets under management by 9.5% and by higher capital allocation-based income.
Previous wording
Investment advisory fees are generally earned based on the value and composition of our assets under management, which change based on fluctuations in financial markets and net cash flows. As our average assets under management increase or decrease in a given period, the level of our investment advisory fee revenue for that same period generally fluctuates in a similar manner. Our annualized effective fee rates can be impacted by market or cash flow related shifts among asset classes and products, including those with tiered-fee structures, along with price changes we make in existing products.
Current wording
Investment advisory fees are generally earned based on the value and composition of our assets under management, which change based on fluctuations in financial markets and net cash flows. As our average assets under management increase or decrease in a given period, the level of our investment advisory fee revenue for that same period generally fluctuates in a similar manner. Our annualized effective fee rates can be impacted by market and cash flows related shifts among asset classes and products, including those with tiered-fee structures, along with price changes we make in existing products.
Previous wording
Capital allocation-based income will fluctuate quarter-to-quarter to reflect the adjustment to accrued carried interest for the change in value of certain affiliated funds assuming the funds’ underlying investments were realized as of the end of the period.
Current wording
Capital allocation-based income will fluctuate quarter-to-quarter to reflect the adjustment to accrued carried interest for the change in value of certain affiliated funds assuming the funds’ underlying investments were realized at the end of the period.
Previous wording
Operating expenses on a U.S. GAAP basis were $1,366.9 million in the second quarter of 2026, a 9.8% increase over the comparable 2025 period. On a non-GAAP basis, adjusted operating expenses were $1,203.2 million, a 4.9% increase over the comparable 2025 period.
Current wording
Operating expenses on a U.S. GAAP basis were $1,235.1 million in the third quarter of 2026, a 1.2% decrease from the comparable 2025 period. On a non-GAAP basis, adjusted operating expenses were $1,200.1 million, a 5.8% increase over the comparable 2025 period.
Previous wording
Compared to the second quarter of 2025, about 50% of the increase in U.S. GAAP operating expenses during the second quarter of 2025 was due to higher compensation expense related to deferred compensation liabilities, as stronger markets increased the investment values the liabilities are indexed against. Additionally, higher compensation and related benefits, distribution and servicing costs, technology, occupancy and facilities costs, and general, administrative, and other costs also contributed to the increase in U.S. GAAP operating expenses and were the main drivers of the increase in adjusted operating expenses compared to the 2025 period. The market-related impacts on the deferred compensation liabilities are not included in our adjusted operating expenses as these liabilities are economically hedged which is reflected in non-operating income (loss). See the GAAP to non-GAAP reconciliation at the end of the Results of Operations section of this Management's Discussion and Analysis.
Current wording
Compared to the third quarter of 2025, market-related impacts on deferred compensation liabilities, lower restructuring charges, and lower acquisition-related amortization and impairments were the drivers of lower U.S. GAAP operating expenses during the third quarter of 2026. These decreases were partially offset by higher compensation and related benefits, distribution and servicing costs, technology and facility costs, and general, administrative, and other costs. These higher costs were the main drivers of the increase in adjusted operating expenses in the third quarter of 2026 compared to the 2025 period as market-related impacts on the deferred compensation liabilities, restructuring charge, and acquisition-related amortization and impairments are not included in our adjusted operating expenses. See the GAAP to non-GAAP reconciliation at the end of the Results of Operations section of this Management's Discussion and Analysis.
Previous wording
Operating margin in the second quarter of 2026 was 28.3% on a U.S. GAAP basis, compared to 27.8% earned in the second quarter of 2025. The increase in our operating margin for the second quarter of 2026 compared to the 2025 period was driven by net revenue growth outpacing operating expense growth primarily due to higher investment advisory fees.
Current wording
Operating margin in the third quarter of 2026 was 38.4% on a U.S. GAAP basis, compared to 34.0% earned in the third quarter of 2025. The increase in our operating margin for the third quarter of 2026 compared to the 2025 period was driven by net revenue growth together with a decrease in operating expenses.
Previous wording
On a non-GAAP basis, adjusted diluted earnings per share was $2.57 for the second quarter of 2026 compared to $2.24 for the second quarter of 2025. The increase was primarily due to higher adjusted operating income compared to the 2025 period.
Current wording
On a non-GAAP basis, adjusted diluted earnings per share was $2.86 for the third quarter of 2026 compared to $2.81 for the third quarter of 2025. The increase was primarily driven by lower weighted-average shares outstanding compared to the 2025 period.
Previous wording
Net revenues consist of investment advisory revenues; performance-based advisory fees; capital allocation-based income; and administrative, distribution, servicing, and other fees. More than 90% of our net revenues for the six months ended June 30, 2026 were related to investment advisory fees. Total net revenues were $3,764.4 million in the six months ended June 30, 2026, a 7.9% increase over $3,487.2 million in the 2025 period. The increase was primarily driven by an 8.3% increase in investment advisory fee revenue as average assets under management increased by 12.6%.
Current wording
Net revenues consist of investment advisory revenues; performance-based advisory fees; capital allocation-based income; and administrative, distribution, servicing, and other fees. More than 90% of our net revenues for the nine months ended September 30, 2026 were investment advisory fees. Total net revenues were $5,769.3 million in the nine months ended September 30, 2026, a 7.2% increase over $5,380.7 million in the 2025 period. The increase was primarily driven by a 7.4% increase in investment advisory fee revenue as average assets under management increased by 11.5%.
Previous wording
Operating expenses were $2,543.4 million in the six months ended June 30, 2026 compared with $2,412.6 million in the 2025 period. On a non-GAAP basis, adjusted operating expenses for the six months ended June 30, 2026 increased 3.3% to $2,358.4 million compared to the 2025 period.
Current wording
Operating expenses were $3,778.5 million in the nine months ended September 30, 2026 compared to $3,662.9 million in the 2025 period. On a non-GAAP basis, adjusted operating expenses for the nine months ended September 30, 2026 increased 4.2% to $3,558.5 million compared to the 2025 period.
Previous wording
Compared to the six months ended June 30, 2025, the primarily drivers of the increase in U.S. GAAP and non-GAAP operating expenses during the six months ended June 30, 2026 were higher technology and facility costs, compensation and related benefits costs, and distribution and servicing costs partially offset by lower advertising and promotion costs. The increase in U.S. GAAP operating expenses was also impacted by higher compensation expense related to the deferred compensation liabilities driven by stronger markets and the restructuring charge recognized in the second quarter of 2026. These costs are not included in our adjusted operating expenses. See the GAAP to non-GAAP reconciliation at the end of the Results of Operations section of this Management's Discussion and Analysis.
Current wording
Compared to the nine months ended September 30, 2025, the primary drivers of the increase in U.S. GAAP and non-GAAP operating expenses during the nine months ended September 30, 2026 were higher compensation and related benefits costs, technology and facility costs, distribution and servicing costs, and general, administrative, and other costs partially offset by lower advertising and promotion costs. U.S. GAAP operating expenses were also impacted by lower acquisition-related amortization and impairments compared to the 2025 period, which are not included in our adjusted operating expenses. See the GAAP to non-GAAP reconciliation at the end of the Results of Operations section of this Management's Discussion and Analysis.
Previous wording
Operating margin in the six months ended June 30, 2026 was 32.4% on a U.S. GAAP basis, compared to 30.8% earned in the 2025 period. The increase in our U.S. GAAP operating margin for the six months ended June 30, 2026 compared to the 2025 period was primarily driven by net revenue growth outpacing operating expense growth.
Current wording
Operating margin in the nine months ended September 30, 2026 was 34.5% on a U.S. GAAP basis, compared to 31.9% earned in the 2025 period. The increase in our U.S. GAAP operating margin for the nine months ended September 30, 2026 compared to the 2025 period was driven by net revenue growth outpacing operating expense growth, primarily driven by higher investment advisory fees.
Previous wording
Diluted earnings per share was $5.10 for the six months ended June 30, 2026 compared to $4.38 for the six months ended June 30, 2025. The increase was driven by higher operating income, lower weighted average shares outstanding, and higher net investment gains compared to the 2025 period.
Current wording
Diluted earnings per share was $7.89 for the nine months ended September 30, 2026 compared to $7.25 for the nine months ended September 30, 2025. The increase was driven by higher operating income and lower weighted- average shares outstanding, partially offset by lower net investment gains compared to the 2025 period.
Previous wording
On a non-GAAP basis, adjusted diluted earnings per share was $5.09 for the six months ended June 30, 2026 as compared to $4.47 for the 2025 period. The increase was primarily due to higher adjusted operating income and lower weighted average shares outstanding.
Current wording
On a non-GAAP basis, adjusted diluted earnings per share was $7.95 for the nine months ended September 30, 2026 as compared to $7.28 for the 2025 period. The increase was driven by higher operating income and lower weighted-average shares outstanding, partially offset by lower net investment gains compared to the 2025 period.
Previous wording
Investment advisory fees in the second quarter of 2026 increased 11.3% over the comparable 2025 quarter as average assets under management increased $248.9 billion or 15.7%, to $1,837.7 billion. For the six months ended June 30, 2026, investment advisory revenues increased 8.3% over the comparable 2025 period as average assets under management increased $202.4 billion, or 12.6%, to $1,806.9 billion.
Current wording
Investment advisory fees in the third quarter of 2026 increased 5.8% over the comparable 2025 quarter as average assets under management increased $164.2 billion or 9.5%, to $1,887.2 billion. For the nine months ended September 30, 2026, investment advisory revenues increased 7.4% over the comparable 2025 period as average assets under management increased $189.6 billion, or 11.5%, to $1,834.0 billion.
Previous wording
The average annualized effective fee rate earned for the three- and six-month periods ended June 30, 2026 declined from the comparable 2025 periods due to client flows and transfers creating a mix shift in assets under management toward lower fee products and asset classes partially offset by market appreciation.
Current wording
The average annualized effective fee rate earned for the three- and nine-month periods ended September 30, 2026 declined from the comparable 2025 periods driven by client flows and transfers drove a mix shift in assets under management toward lower fee products and asset classes partially offset by equity market appreciation.
Previous wording
Performance-based advisory fees in the second quarter of 2026 and 2025 were primarily earned from alternative strategies. For the six months ended June 30, 2026, fees were primarily earned from alternative strategies, while for the comparable period of 2025, they were earned on both alternative and equity strategies.
Current wording
Performance-based advisory fees in the third quarter of 2026 and 2025 were primarily earned from alternatives strategies. For the nine months ended September 30, 2026, fees were primarily earned from alternatives strategies, while for the comparable period of 2025, they were earned from alternatives and equity strategies.
Previous wording
Capital allocation-based income includes the change in accrued carried interest along with acquisition-related amortization and impairments. In the second quarter of 2026, accrued carried interest increased net revenues by $15.2 million, compared to $36.5 million in the 2025 period, reflecting weaker relative investment performance in credit strategies. Capital allocation-based income for the second quarter of 2026 also includes carried interest earned on our late stage venture fund. For the six months ended June 30, 2026, accrued carried interest increased net revenues by $46.5 million compared to $45.7 million for the 2025 period. The decrease in acquisition-related amortization and impairments from the comparable 2025 periods was due to impairments recognized in the 2025 periods that did not recur. We realized carried interest of $8.2 million and $49.2 million in the three- and six-month periods ended June 30, 2026, respectively, compared to $10.9 million and $54.0 million in the 2025 periods, respectively.
Current wording
Capital allocation-based income includes the change in accrued carried interest and acquisition-related amortization and impairments. In the third quarter of 2026, the change in accrued carried interest increased net revenues by $63.1 million, compared to $56.2 million in the 2025 period, reflecting the inclusion of our late-stage venture fund which was not included in the 2025 period. For the nine months ended September 30, 2026, the change in accrued carried interest increased net revenues by $109.6 million compared to $101.9 million for the 2025 period. The decrease in acquisition-related amortization and impairments from the comparable 2025 periods was driven by impairments recognized in the 2025 periods that did not recur. We realized carried interest of $0.1 million and $49.3 million in the three- and nine-month periods ended September 30, 2026, respectively, compared to $0.2 million and $54.2 million in the 2025 periods, respectively.
Previous wording
Administrative, distribution, servicing, and other fees in the second quarter of 2026 were $144.2 million, a decrease of $5.5 million, or 3.7%, from the comparable 2025 quarter. For the six months ended June 30, 2026, these fees were $282.6 million, a decrease of $23.4 million, or 7.6%, from the 2025 period. The decreases primarily reflect the reporting change implemented in the third quarter of 2025, in which revenue earned from managed account - model delivery assets and certain other advisory services began being reported within investment advisory fees, along with lower recordkeeping fees. For the quarterly comparison, these decreases were partially offset by the timing of cost reimbursements from our U.S. mutual funds.
Current wording
Administrative, distribution, servicing, and other fees in the third quarter of 2026 were $141.3 million, a decrease of $5.1 million, or 3.5%, from the comparable 2025 quarter. For the nine months ended September 30, 2026, these fees were $423.9 million, a decrease of $28.5 million, or 6.3%, from the 2025 period. The decrease from the third quarter of 2025 is primarily due to lower recordkeeping fees and transfer agent services. Compared to the nine months ended 2025, the decrease primarily reflects the reporting change implemented in the third quarter of 2025, in which revenue earned from managed account - model delivery assets and certain other advisory services began being reported within investment advisory fees, along with lower recordkeeping fees.
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 second quarter, we eliminated net revenue of $1.6 million in 2026 and $1.4 million in 2025. For the six months ended June 30, we eliminated net revenue of $2.7 million in 2026 and $2.8 million in 2025.
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 third quarter, we eliminated net revenue of $1.2 million in 2026 and $0.8 million in 2025. For the nine months ended September 30, we eliminated net revenue of $3.9 million in 2026 and $3.6 million in 2025.
Previous wording
(2)Capital allocation-based income compensation represents the compensation related to the change in accrued carried interest along with acquisition-related, non-cash amortization and impairments.
Current wording
(2)Capital allocation-based income compensation represents the change in accrued carried interest compensation along with acquisition-related, non-cash amortization and impairments.
Previous wording
(3) In Q1 2026, we implemented a reporting change the moved technology-related professional fees and servicing costs from general, administrative, and other costs to technology, occupancy, and facilities costs to better align with the nature of the expenses following the outsourcing and expansion of our technology capabilities through trusted vendor partnerships. Prior periods were recast to reflect this change. The amounts reclassified for the three- and six-month periods ended June 30, 2025 were $15.5 million and $29.1 million.
Current wording
(3) In Q1 2026, we implemented a reporting change that moved technology-related professional fees and servicing costs from general, administrative, and other costs to technology, occupancy, and facility costs to better align with the nature of the expenses following the outsourcing and expansion of our technology capabilities through trusted vendor partnerships. Prior periods were recast to reflect this change. The amounts reclassified for the three- and nine-month periods ended September 30, 2025 were $14.2 million and $43.3 million, respectively.
Showing the first 40 of 80 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(1)n/m - the percentage change is not meaningful.(2)Capital allocation-based income represents the change in accrued carried interest along with acquisition-related, non-cash amortization and impairments.(3)See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
(2)Capital allocation-based income represents the change in accrued carried interest.
Previous report — wording carried elsewhere
(3)See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.
Previous report — wording carried elsewhere
(1)n/m - The percentage change is not meaningful.
Previous report — wording carried elsewhere
(7) This non-GAAP measure was calculated by applying the two-class method to adjusted net income attributable to