PRICE T ROWE GROUP INC
For the period ended Sep 30, 2025. Filed Oct 31, 2025.
View on SEC.govAbout this filing
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, 2025 · Filed Oct 31, 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 2025-06-30; filed 2025-08-01.
0001113169-25-000023
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-31.
0001628280-25-047751
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 134 previous paragraphs and 139 current paragraphs.
66 unchanged; 56 reworded; 17 added; 11 removed; 1 previous and 0 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 (17)
Current report
Major stock indexes rose in the third quarter of 2025. Initially, equities were supported by generally favorable economic data and second-quarter corporate earnings reports, as well as some positive tariff-related news in the form of U.S. trade agreements with other nations. In August, however, a weaker-than-expected nonfarm payroll employment report for July—which included significant downward revisions to employment data for May and June—raised fears of an economic slowdown. Nevertheless, equities were buoyed by growing hopes that the Federal Reserve would resume reducing short-term interest rates; the last rate cut was in December 2024. Indeed, Fed officials decided in mid-September to reduce the fed funds target rate by 25 basis points and indicated there could be two additional rate cuts by the end of the year.
Current report
Developed non-U.S. equity markets also produced gains. Markets in several eurozone countries advanced more than 8% in U.S. dollar terms, while UK shares rose about 6%. Developed Asian markets were mostly positive in dollar terms, led by Hong Kong, Singapore, and Japan.
Current report
Stocks in emerging markets outperformed equities in developed non-U.S. markets. In emerging Asia, Chinese stocks climbed more than 20%, helped by cash-rich households seeking higher returns. In Latin America, most markets produced positive returns in dollar terms. In the emerging Europe, Middle East, and Africa (EMEA) region, markets were broadly positive. South African shares surged more than 20%, helped by rising metals prices and mining industry strength.
Current report
ASSETS UNDER MANAGEMENT.(1)
Current report
(1)Includes assets in which T. Rowe Price and its affiliates have full discretionary authority along with managed account - model delivery assets.
Current report
(4)Amount represents the net assets as of July 1, 2025 and all activity for the quarter is reflected in the lines that follow.
Current report
The firm’s 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 $25.2 billion at September 30, 2025, compared with $24.1 billion at June 30, 2025.
Current report
Operating margin in the third quarter of 2025 was 34.0% on a U.S. GAAP basis, compared to 34.4% in the third quarter of 2024. The restructuring charge was the primary driver of the decrease in the operating margin.
Current report
Diluted earnings per share was $2.87 for the third quarter of 2025 compared to $2.64 for the third quarter of 2024. The increase was primarily driven by higher operating income, higher investment gains, and fewer weighted average shares outstanding compared to the 2024 period.
Current report
Operating expenses on a U.S. GAAP basis were $3,662.9 million in the nine months ended September 30, 2025, compared with $3,504.2 million over the comparable 2024 period. On a non-GAAP basis, operating expenses were $3,416.7 million, a 4.3% increase over the comparable 2024 period.
Current report
Compared to the nine months ended September 30, 2024, the increase in U.S. GAAP operating expenses were primarily due to compensation and related costs, the restructuring charge, technology and facility costs, and distribution and servicing costs. The drivers of the increase in non-GAAP operating expenses were the same as U.S. GAAP with the exception of the restructuring charge, which is excluded from our non-GAAP operating expenses measures.
Current report
Administrative, distribution, services, and other fees in the third quarter of 2025 were $146.4 million, a decrease of $1.7 million, or 1.1%, from the comparable 2024 quarter. For the nine months ended September 30, 2025, these fees were $452.4 million, an increase of $7.6 million, or 1.7%, from the 2024 period. In the third quarter of 2025, we began reporting revenue from managed account model delivery assets and certain other advisory services in investment advisory fees, which was over $13 million in Q3 2025. This reclassification was the primary driver of the decline in administrative, distribution, services, and other fees, partially offset by higher transfer agents services compared to the 2024 period. For the nine months ended September 30, 2025, the increase was primarily due to higher recordkeeping fees and higher transfer agent services.
Current report
(2)Capital allocation-based income compensation represents the change in accrued carried interest compensation along with acquisition-related, non-cash amortization and impairments.
Current report
Compensation, benefits, and related costs were $632.5 million in the third quarter of 2025, a decrease of $0.4 million, or 0.1%, compared to the 2024 quarter. For the nine months ended September 30, 2025, these costs were $1,939.2 million, an increase of $41.2 million, or 2.2%, compared to the 2024 period.
Current report
For the third quarter of 2025, the decrease was due to lower temporary personnel, offset by higher salaries and related benefits and lower capitalized labor. For the nine months ended September 30, 2025, the increase was primarily due to higher salaries and related benefits, higher long-term incentive compensation, and lower capitalized labor. These increases were partially offset by lower temporary personnel and other employee related costs.
Current report
Restructuring charge of $28.5 million for three- and nine-month periods ended September 30, 2025 reflects compensation costs, primarily severance, incurred in connection with the July workforce action. This was related to our previously announced broad and ongoing plan to reduce expense growth and realign resources. This ongoing effort is designed to support investment in both existing and future capabilities.
Current report
(3) This non-GAAP adjustment removes compensation expenses, primarily severance, incurred as part of our broad and ongoing plan to reduce expense growth and realign resources to invest in existing and future capabilities. We believe this adjustment helps the reader’s ability to understand our core operating results and increases comparability period to period.
Removed paragraphs (11)
Previous 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.
Previous report
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 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.
Previous report
ASSETS UNDER MANAGEMENT.
Previous report
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 report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Reworded paragraphs (56)
Previous wording
Investment advisory fees depend largely on the total value and composition of assets under our management. Accordingly, fluctuations in financial markets and in the composition of assets under management affect our revenues and results of operations.
Current wording
Investment advisory fees depend largely on the total value and composition of our assets under management. Accordingly, fluctuations in financial markets and in the composition of assets under management affect our revenues and results of operations.
Previous 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.
Current wording
The investment management industry is evolving, facing challenging trends such as passive strategies 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 and distribution professionals, adopting new technologies, and offering new products to provide our clients with strong investment management expertise and services.
Previous 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.
Current wording
Global bond returns were mostly positive in the third quarter of 2025. In the U.S., Treasury bill yields declined in anticipation of a Federal Reserve interest rate cut in mid-September. On September 17, the central bank reduced the federal funds target rate from the 4.25% to 4.50% range to the 4.00% to 4.25% range. Intermediate- and long-term U.S. Treasury yields fell to a lesser extent. The 10-year U.S. Treasury note yield decreased from 4.24% to 4.16%.
Previous 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.
Current wording
In the investment-grade bond universe, sector performance was broadly positive. Corporate bonds and mortgage-backed securities performed best, while non-agency commercial mortgage-backed securities, asset-backed securities, and Treasuries lagged. Tax-free municipal bonds and high yield corporate bonds outperformed the taxable investment-grade bond market.
Previous 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.
Current wording
Bonds in developed non-U.S. markets produced slight negative returns in U.S. dollar terms. In the eurozone, longer-term bond yields rose in many countries, while the European Central Bank (ECB) kept key interest rates steady. In the UK, longer-term bond yields also increased, but the Bank of England reduced its key interest rate in August. The euro was little changed versus the greenback, but the British pound fell close to 2% versus the dollar. In Japan, long-term government bond yields increased, but the Bank of Japan kept the benchmark interest rate at 0.50%. The yen fell more than 2% versus the dollar. Emerging markets bonds produced positive returns in U.S. dollar terms. Dollar-denominated bonds outperformed bonds denominated in local currencies, as developing markets currencies were mixed versus the U.S. dollar.
Previous 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.
Current wording
Assets under management ended the third quarter of 2025 at $1,767.2 billion, an increase of $90.4 billion from June 30, 2025. The increase was primarily driven by market appreciation and income, net of distributions not reinvested, of $89.1 billion, offset by net cash outflows of $7.9 billion. Beginning on July 1, 2025, assets under management include managed account - model delivery portfolios assets, which had $9.2 billion in assets as of that date, and are reflected in the increase from June 30, 2025 and December 31, 2024.
Previous wording
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 wording
For the nine months ended September 30, 2025, the increase in assets under management was primarily driven by market appreciation, net of distributions not reinvested, of $182.8 billion, offset by net cash outflows of $31.4 billion.
Previous 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:
Current wording
The following tables detail changes in our assets under management, by asset class, during the three- and nine-month periods ended September 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, 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.
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, or have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included. Unfunded capital commitments were $22.0 billion at September 30, 2025, $18.6 billion at June 30, 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 three- and six-month periods ended June 30, 2025 of $0.4 billion and $0.9 billion, respectively.
Current wording
(5)Includes net distributions not reinvested for the three- and nine-month periods ended September 30, 2025 of $0.4 billion and $1.3 billion, respectively.
Previous 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.
Current wording
Investment advisory clients outside the United States account for 8.7% of our assets under management at September 30, 2025 and June 30, 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 $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.
Current wording
Assets under management in our target date retirement portfolios, which are included in the multi-asset totals shown above, were $552.9 billion at September 30, 2025, $520.3 billion at June 30, 2025, and $475.6 billion at December 31, 2024. Net flows into these portfolios were $2.6 billion and $10.6 billion in the three- and nine-month periods ended September 30, 2025, respectively.
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 June 30, 2025, our assets under administration were $302 billion, of which $170 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 products outside of the firm's complex. As of September 30, 2025, our assets under administration were $315 billion, of which $178 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, 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.
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 September 30, 2025. Past performance is not a guarantee nor a reliable indicator of future performance.
Previous 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.
Current wording
As of September 30, 2025, 63 of 142 (44.4%) 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, 59%(6) of AUM in the firm's rated U.S. mutual funds (across primary share classes) ended September 30, 2025 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 $327B for 1 year, $320B for 3 years, $318B for 5 years, and $317B 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 $337B for 1 year, $328B for 3 years, $326B for 5 years, and $325B 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 $275B for 1 year, $264B for 3 years, $262B for 5 years, and $254B 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 $284B for 1 year, $275B for 3 years, $269B for 5 years, and $261B 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 $1,486B for 1 year, $1,480B for 3 years, $1,475B for 5 years, and $1,429B 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 $1,567B for 1 year, $1,559B for 3 years, $1,554B for 5 years, and $1,518B 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, 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.
Current wording
The following table and discussion sets forth information regarding our consolidated financial results for the three- and nine-month periods ended September 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
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 wording
Net revenues consist of investment advisory revenues; performance-based advisory fees; administrative, distribution, services, and other fees; and capital allocation-based income. About 90% of our net revenues are related to investment advisory fees. Total net revenues were $1,893.5 million in the third quarter of 2025, a 6.0% increase compared to $1,785.6 million in the 2024 quarter. The increase was driven primarily by higher investment advisory fees on higher average assets under management and capital allocation-based income.
Previous 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.
Current wording
Operating expenses on a U.S. GAAP basis were $1,250.3 million in the third quarter of 2025, a 6.7% increase over the comparable 2024 period. On a non-GAAP basis, operating expenses were $1,134.4 million, a 3.2% increase over the comparable 2024 period.
Previous wording
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 wording
Compared to the third quarter of 2024, the increase in U.S. GAAP operating expenses was driven by a few items, including the restructuring charge, primarily compensation and related, associated with our ongoing plan to reduce expense growth and realign resources to invest in existing and future capabilities. Additionally, higher technology and facilities costs and accrued carried interest compensation 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 period. Given the non-recurring nature of the restructuring charge, we have excluded this charge from our non-GAAP operating expenses measures.
Previous 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.
Current wording
On a non-GAAP basis, diluted earnings per share was $2.81 for the third quarter of 2025 as compared to $2.57 for the third quarter of 2024. The increase was primarily due to higher adjusted operating income and fewer weighted average shares outstanding 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 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.
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 nine months ended September 30, 2025 are related to investment advisory fees. Total net revenues were $5,380.7 million in the nine months ended September 30, 2025, a 2.1% increase over $5,269.1 million in the 2024 period. The increase was primarily driven by a 2.8% increase in investment advisory fee revenue as average assets under management increased by 7.0% and a $7.6 million increase in non-advisory revenues, partially offset by a $16.8 million decrease in performance-based advisory fees and a $11.4 million decrease in capital allocation-based income (change in accrued carried interest) earned from investments in certain affiliated funds.
Previous wording
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 wording
Operating margin in the nine months ended September 30, 2025 was 31.9% on a U.S. GAAP basis, compared to 33.5% earned in the 2024 period. The decrease was primarily driven by operating expense growth outpacing net revenue growth.
Previous wording
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 wording
Diluted earnings per share was $7.25 for the nine months ended September 30, 2025, compared to $7.23 for 2024 period. On a non-GAAP basis, adjusted diluted earnings per share was $7.28 for the nine months ended September 30, 2025, compared to $7.21 for the 2024 period. The increase was primarily due to fewer weighted average shares outstanding and higher investment gains, which were partially offset by lower operating income.
Previous wording
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 wording
Investment advisory fees in the third quarter of 2025 increased 4.4% over the comparable 2024 quarter while average assets under management increased $133.5 billion, or 8.4%, to $1,723.0 billion. For the nine months ended September 30, 2025, investment advisory revenues increased 2.8% over the comparable 2024 period as average assets under management increased $108.2 billion, or 7.0%, to $1,644.4 billion.
Previous 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.
Current wording
The average annualized effective fee rate earned for the three- and nine-month periods ended September 30, 2025 declined from the comparable 2024 periods primarily due to client flows and transfers shifting assets under management toward lower-fee strategies and products.
Previous wording
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 wording
Performance-based advisory fees in the third quarter of 2025 and 2024 were earned primarily from alternatives strategies, and from alternatives and equity strategies for the nine months ended September 30, 2025 and 2024.
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 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 wording
Capital allocation-based income includes the change in accrued carried interest along with acquisition-related amortization and impairments. In the third quarter of 2025, the change in accrued carried interest increased net revenues by $56.2 million compared to $35.1 million in the 2024 period. For the nine months ended September 30, 2025, the change in accrued carried interest increased net revenues by $101.9 million compared to $121.6 million for the 2024 period. The difference in the change in accrued carried interest for the 2025 periods compared to the 2024 periods was due to relative market impacts and performance. The decrease in acquisition-related amortization and impairments for the 2025 periods from the comparable 2024 periods was primarily due to higher impairments recognized in prior periods.
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 $1.4 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.
Current wording
investment products. The corresponding expenses recognized by these products, which are consolidated in our financial statements, were also eliminated from operating expenses. For the third quarter, we eliminated net revenue of $0.8 million in 2025 and $1.3 million in 2024. For the nine months ended September 30, we eliminated net revenue of $3.6 million in 2025 and $3.0 million in 2024.
Previous 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.
Current wording
The firm employed 7,830 associates at September 30, 2025, a decrease of 2.9% from 8,063 associates at June 30, 2025, a decrease of 4.0% from the end of 2024, and a decrease of 3.4% from September 30, 2024. The decrease in associates over each period is primarily driven by the workforce action in July 2025.
Previous 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.
Current wording
Distribution and servicing costs were $95.8 million for the third quarter of 2025, an increase of $4.2 million, or 4.6%, from $91.6 million recognized in the 2024 quarter. For the nine months ended September 30, 2025, these costs were $281.9 million, an increase of $20.7 million, or 7.9%, from $261.2 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
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.
Current wording
Product and recordkeeping related costs were $78.7 million in the third quarter of 2025, an increase of $3.7 million, or 4.9%, compared to $75.0 million in the 2024 quarter. For the nine months ended September 30, 2025, these costs were $237.3 million, an increase of $14.3 million, or 6.4%, from $223.0 million recognized in the comparable 2024 period. The increases in both periods were primarily due to higher recordkeeping fees and other product related costs. Also contributing to the nine month increase was higher custody fees related to our trust products.
Previous 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.
Current wording
Technology, occupancy, and facility costs were $183.2 million in the third quarter of 2025, an increase of $19.2 million, or 11.7%, compared to the $164.0 million recognized in the 2024 quarter. For the nine months ended September 30, 2025, these costs were $530.2 million, an increase of $55.4 million, or 11.7%, 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 nine month increase was higher occupancy and facility costs related to our new corporate headquarters, which was occupied in March 2025, and a non-recurring cost benefit related to our UK facility in the first quarter of 2024.
Previous 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.
Current wording
General, administrative, and other expenses were $101.7 million in the third quarter of 2025, a decrease of $2.5 million, or 2.4%, compared to the $104.2 million recognized in the 2024 quarter. For the nine months ended September 30, 2025, these costs were $314.5 million, an increase of $9.0 million, or 2.9%, compared with the 2024 period. For the third quarter of 2025, the decrease was primarily related to a non-recurring cost recovery recognized during the quarter. For the nine months ended September 30, 2025, the increase was primarily driven by higher professional fees, information services, and other administrative costs. These increases were partially offset by the non-recurring cost recovery recognized in the third quarter of 2025 and 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. 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.
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 third quarter of 2025, we recognized $26.8 million in amortization and impairments related to intangible assets, compared to $51.5 million in the 2024 quarter. For the nine months ended September 30, 2025, we recognized $86.7 million in amortization and impairments related to intangible assets, compared to $125.3 million, in the 2024 period. For the 2024 periods, intangible asset impairment charges totaled $25.6 million for the third quarter and $59.7 million for the year-to-date period. 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 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.
Current wording
Non-operating income for the third quarter of 2025 was $238.4 million compared to $212.5 million in the 2024 quarter. The following table details the components of non-operating income for both the three- and nine-month periods ended September 30, 2025 and 2024.
Previous 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.
Current wording
Higher investment gains earned by our investment portfolio during the three- and nine-month periods ended September 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 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:
Current wording
The GAAP effective tax rate for the third quarter of 2025 was 22.1% compared with 22.5% in the third quarter of 2024. These quarterly rates were the result of an overall year-to-date rate of 22.8% for 2025 and 23.5% 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 nine months ended September 30, 2025 and 2024:
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(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.