Core Viewpoint - Franklin Resources Inc. reported first-quarter fiscal 2025 adjusted earnings of 59 cents per share, exceeding the Zacks Consensus Estimate of 53 cents, but down from 65 cents in the prior year [1][2] Financial Performance - Total operating revenues increased by 13% year over year to $2.25 billion, surpassing the Zacks Consensus Estimate of $2.1 billion, driven by higher investment management fees, sales and distribution fees, and shareholder servicing fees [3][4] - Investment management fees rose by 9% year over year to $1.79 billion, while sales and distribution fees increased by 27% to $376 million, and shareholder servicing fees jumped by 95% to $64 million [4] - Total operating expenses rose by 14% year over year to $2.03 billion, exceeding the estimate of $1.96 billion, resulting in an operating margin of 9.7%, down from 10.4% in the previous year [5] Assets Under Management (AUM) - As of December 31, 2024, total AUM was $1.58 trillion, a decline of 6% sequentially, with long-term net outflows of $50 billion during the quarter [6] - The average AUM decreased by 2% sequentially to $1.63 trillion [6] Capital Position and Distribution - As of December 31, 2024, cash and cash equivalents, and investments totaled $5.2 billion, while total stockholders' equity was $13.2 billion [7] - In the reported quarter, the company repurchased 0.3 million shares for $5.8 million [8] Strategic Outlook - The company's efforts to diversify its business through acquisitions and a strong distribution platform are expected to support revenue growth, although rising expenses from technological upgrades may hinder bottom-line growth [9]

Financial Performance - Operating revenues for the three months ended December 31, 2024, were $2,251.6 million, a 13% increase from $1,991.1 million in the same period of 2023[68]. - Net income attributable to Franklin Resources, Inc. for the same period was $163.6 million, a 35% decrease from $251.3 million in 2023[68]. - Adjusted operating income for the three months ended December 31, 2024, was $412.8 million, a slight decrease of 1% from $417.0 million in 2023[68]. - The operating margin for the three months ended December 31, 2024, was 9.7%, down from 10.4% in the same period of 2023[68]. - Adjusted operating margin decreased to 24.5% for the three months ended December 31, 2024, down from 27.3% in the prior year[124]. - Net income attributable to Franklin Resources, Inc. for the three months ended December 31, 2024, was $163.6 million, a decrease of 34.9% from $251.3 million in the same period of 2023[125]. - Adjusted net income for the same period was $320.5 million, slightly down from $328.5 million year-over-year[125]. Assets Under Management (AUM) - Total assets under management (AUM) as of December 31, 2024, were $1,575.7 billion, an 8% increase from $1,455.5 billion on December 31, 2023[64]. - The average AUM for the three months ended December 31, 2024, was $1,634.5 billion, a 17% increase from $1,394.2 billion in 2023[70]. - The equity asset class AUM increased by 33% to $620.0 billion from $467.5 billion in 2023[69]. - Total AUM at December 31, 2023, reached $1,455.5 billion, an 8% increase from $1,374.2 billion at October 1, 2023[75]. Inflows and Outflows - Long-term inflows for the three months ended December 31, 2024, were $97.8 billion, a 42% increase from $68.9 billion in 2023[72]. - Long-term net outflows totaled $50.0 billion, a significant increase of 900% compared to $5.0 billion in the previous year[72]. - Long-term inflows increased 42% to $97.8 billion compared to the prior year, driven by higher inflows in equity and multi-asset open-end funds[74]. - Long-term outflows increased 100% to $147.8 billion, primarily due to higher outflows from fixed income vehicles and equity open-end funds[74]. Revenue and Fees - Investment management fees rose 9% to $1,799.3 million for the three months ended December 31, 2024, due to a 17% increase in average AUM[81][82]. - Sales and distribution fees increased 27% to $375.5 million, driven by revenue from Putnam products post-acquisition[81][86]. - Total operating revenues for the three months ended December 31, 2024, were $2,251.6 million, a 13% increase from $1,991.1 million in the prior year[81]. - Performance fees decreased to $141.6 million for the three months ended December 31, 2024, down from $166.4 million in the prior year[84]. Expenses - Total operating expenses increased 14% to $2,032.6 million, influenced by the integration of the Putnam acquisition[90]. - General, administrative, and other operating expenses increased by $53.2 million, largely due to the acquisition of Putnam and higher legal and professional fees[104]. - Amortization of intangible assets increased by $26.8 million, attributed to a reduction in the remaining useful life of definite-lived intangible assets related to WAM[103]. - Occupancy expenses increased by $8.4 million for the three months ended December 31, 2024, primarily due to expenses incurred by Putnam following the acquisition[101]. Cash Flow and Liquid Assets - Operating cash flows for the three months ended December 31, 2024, were $(145.2) million, an improvement from $(251.9) million in the prior year[126]. - Total liquid assets decreased to $5,151.5 million as of December 31, 2024, from $5,664.4 million at September 30, 2024[128]. - Cash and cash equivalents at December 31, 2024, were $2,765.4 million, down from $3,261.1 million[128]. Shareholder Actions - The company declared regular dividends of $0.32 per share during the three months ended December 31, 2024, compared to $0.31 per share in the same period of 2023[138]. - During the three months ended December 31, 2024, the company repurchased 0.3 million shares at a cost of $5.8 million, compared to 2.4 million shares at a cost of $58.8 million in the prior year[139]. Workforce and Acquisitions - The global workforce increased to approximately 10,100 employees from 9,100 at December 31, 2023, mainly due to the acquisition of Putnam[97]. - The company expects to make a deferred cash payment of $100.0 million related to the acquisition of Lexington during the third quarter of fiscal year 2025[140]. - The company maintains an $800.0 million 5-year revolving credit facility, which remains undrawn as of the filing date[134]. - As of December 31, 2024, the company had $500.0 million of short-term commercial paper available for issuance under an uncommitted private placement program[135].

Financial Performance - Franklin Resources, Inc. reported net income of $163.6 million or $0.29 per diluted share for Q1 2025, compared to a net loss of $84.7 million in the previous quarter and net income of $251.3 million in Q1 2024[3]. - Adjusted net income was $320.5 million for the quarter, a slight increase from $315.2 million in the previous quarter, but down from $328.5 million in the prior year[7]. - Operating income was $219.0 million, compared to an operating loss of $150.7 million in the previous quarter and an operating income of $206.5 million in the prior year[7]. - The company reported a net income attributable to Franklin Resources, Inc. of $163.6 million for the three months ended December 31, 2024, recovering from a loss of $84.7 million in the previous quarter[26]. - Adjusted diluted earnings per share for the three months ended December 31, 2024, was $0.59, consistent with the previous quarter[26]. Revenue and Assets Under Management - Operating revenues for the quarter were $2,251.6 million, reflecting a 2% increase from the previous quarter and a 13% increase year-over-year[7]. - Total assets under management (AUM) were $1,575.7 billion at December 31, 2024, down $102.9 billion during the quarter due to $52.9 billion in net market changes and $50 billion in long-term net outflows[7]. - Average AUM for the quarter was $1,634.5 billion, a 17% increase from $1,394.2 billion year-over-year[14]. - The AUM as of December 31, 2024, was approximately $1.6 trillion, indicating a strong market presence and investment capability[29]. - Total AUM by asset class showed a decline in equity and fixed income, with equity at $620.0 billion (down 2%) and fixed income at $469.5 billion (down 16%) compared to the previous quarter[15]. Inflows and Outflows - Long-term inflows improved by 34% year-over-year, generating positive net flows of $17 billion across equity, multi-asset, and alternatives, despite long-term net outflows of $50 billion[3]. - Long-term inflows for the quarter were $97.8 billion, a 42% increase from $68.9 billion year-over-year[14]. - Long-term outflows doubled to $147.8 billion from $73.9 billion in the same period last year, resulting in long-term net flows of $(50.0) billion, a 900% decline[14]. - Long-term net flows for the three months ended September 30, 2024, were negative at $31.3 billion, driven by outflows in Fixed Income and Alternative assets[18]. Strategic Investments and Shareholder Value - The company remains committed to strategically investing in its business while managing expenses to enhance shareholder value[6]. - The company repurchased 0.3 million shares of common stock for a total cost of $5.8 million during the quarter[8]. - Fundraising in alternatives reached $6 billion, with $4.3 billion in private market assets, and the launch of a new evergreen secondaries private equity fund achieved $900 million in assets under management[4]. Market Presence and Operations - The company operates in over 150 countries, leveraging its extensive investment management expertise and technology solutions[29]. - Total reinvested distributions amount to $20.1 billion[11]. - Direct investments in CIPs total $1.1 billion, with additional third-party investments of approximately $356 million[11]. - Cash and investments related to deferred compensation plans amount to approximately $437 million[11].

Core Insights - Franklin Resources, Inc. is positioned for growth through acquisitions, solid AUM growth, and an organic growth strategy, despite facing challenges from rising expenses and concentrated revenues from investment management fees [8]. Group 1: AUM Growth and Financial Performance - Franklin has experienced solid growth in AUM, with a compound annual growth rate (CAGR) of 18.7% over the last five fiscal years, despite a decline in fiscal 2022 [2]. - The company declared a 3.2% increase in its common stock dividend in December 2024, raising it to 32 cents per share [3]. - Investment management fees, which account for 79.9% of revenues as of September 30, 2024, have shown volatility, influenced by AUM levels and service types [4]. Group 2: Strategic Initiatives and Partnerships - Franklin has pursued growth through acquisitions and partnerships, including a collaboration with Japan's SBI Holdings to focus on ETFs and emerging asset classes [9]. - The acquisition of Putnam Investments in January 2024 is expected to enhance Franklin's growth in the retirement space, increasing defined contribution AUM to over $100 billion [16]. - The company announced a share repurchase authorization of 27.2 million shares in December 2023, reflecting its commitment to capital distribution [18]. Group 3: Financial Stability and Expense Management - As of September 30, 2024, Franklin's debt stood at $2.6 billion, with a liquidity position of $6.7 billion, indicating a stable financial position [11]. - Although expenses declined in 2022, they have shown a CAGR of 12.5% over the last four years, with ongoing investments in technology and talent likely to keep expenses high [13]. - The company’s AUM is subject to market fluctuations and regulatory changes, which could impact financial performance [19].

Core Insights - Franklin Resources Inc. (NYSE: BEN) has experienced a share price decline of approximately 3.7% over the past seven months, contrasting with a 14.25% gain in the S&P 500 during the same period [1]. Company Analysis - The company is being analyzed through a combination of fundamental analysis and momentum research, utilizing software developed to track market sentiment [1]. - The investment strategy focuses on identifying companies with a higher likelihood of delivering positive surprises in the near future, based on the disconnect between market perceptions and potential outcomes [1].

Company Overview - Franklin Resources reported fourth-quarter fiscal 2024 adjusted earnings of 59 cents per share, missing the Zacks Consensus Estimate of 60 cents, and reflecting a 29.7% decrease from the prior-year quarter [2] - The company experienced a net loss of $84.7 million compared to a net income of $295.5 million in the prior-year quarter [3] - For fiscal 2024, adjusted earnings per share were $2.39, down from $2.60 in the prior year [4] Revenue and Expenses - Total operating revenues for fiscal 2024 increased by 8% year over year to $8.48 billion, surpassing the Zacks Consensus Estimate of $8.39 billion [5] - In the fiscal fourth quarter, total operating revenues rose 11.3% year over year to $2.21 billion, driven by increases in investment management fees, sales and distribution fees, and shareholder servicing fees, also exceeding the Zacks Consensus Estimate of $2.12 billion [5] - Investment management fees increased by 8.1% year over year to $1.77 billion, while sales and distribution fees rose by 20.1% to $368 million, and shareholder servicing fees surged by 80.1% to $67 million [6] - Total operating expenses rose by 43.3% year over year to $2.36 billion, attributed to increases across all components of operating expenses [6] - The operating margin was reported at negative 6.8%, a significant decline from the 17% margin in the year-ago quarter [7] Assets Under Management (AUM) - As of September 30, 2024, total AUM was $1.69 trillion, reflecting a sequential increase of 1.9% [8] - Average AUM increased by 2.1% sequentially to $1.67 trillion [10] - The company reported long-term net outflows of $31.3 billion during the reported quarter [9] Capital Position - As of September 30, 2024, cash and cash equivalents, along with investments, totaled $5.6 billion, while total stockholders' equity was $13.3 billion [11] - In the reported quarter, Franklin repurchased 4.9 million shares for $102.4 million [12] Market Performance and Outlook - The consensus estimate for Franklin Resources has trended downward, with a shift of -10.57% noted [13][14] - The company currently holds a Zacks Rank 4 (Sell), indicating expectations of below-average returns in the coming months [15] - Franklin Resources is part of the Zacks Financial - Investment Management industry, which has seen competitors like Principal Financial report a revenue increase of 5.6% year over year [16]

Group 1 - Bassett Furniture Industries, Incorporated (BSET) has been added to the Zacks Rank 5 (Strong Sell) List due to a 40% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Franklin Resources, Inc. (BEN) is also on the Zacks Rank 5 (Strong Sell) List, with a 9.8% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Hitachi Construction Machinery Co., Ltd. (HTCMY) has seen a 30.9% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days, leading to its inclusion in the Zacks Rank 5 (Strong Sell) List [2]

Core Insights - The Q3 2024 Advisor Pulse Survey indicates a significant increase in the number of financial advisors recommending digital assets, with 19% reporting that over half of their clients own such assets, up from 15% in Q2 2024 [1][2] - The survey, which included 619 financial professionals, shows a growing trend in crypto investment recommendations and allocations, with only 3% of advisors reporting no crypto ownership among clients, down from 8% in the previous quarter [2] Group 1: Advisor Recommendations - 70% of advisors have recommended crypto to at least 10% of their clients, with the most common recommendation being a 2% allocation by 26% of advisors, followed by a 5% allocation by 22% [3] - Among advisors not currently recommending crypto, 56% plan to do so, with 28% intending to start within the next six months [3] - 30% of advisors planning future allocations to crypto anticipate recommending 5% allocations, while 22% plan for 2% allocations [3] Group 2: Industry Trends - The data reflects a clear shift in the perception of digital assets among financial advisors, indicating increased confidence in this asset class [3] - The partnership between DACFP and Franklin Templeton aims to provide educational resources to help advisors stay informed about the evolving digital asset market [3] Group 3: Survey Methodology - The survey was conducted between July and September 2024, with 83% of respondents having over 10 years of experience in the financial services industry [4] - A significant portion of the advisors surveyed primarily serve clients with assets ranging from $500,000 to $3.5 million, with 11% serving clients with assets exceeding $3.5 million [4]

Core Viewpoint - Franklin Resources, Inc. (BEN) is integrating parts of its Western Asset Management Co. (Wamco) unit into its larger operations amid ongoing challenges, including an SEC investigation and significant outflows of client funds [1][6][8]. Group 1: Integration and Management Changes - BEN has decided to merge Wamco's middle office into its larger organization, which will result in job cuts within Wamco [3]. - The integration follows the replacement of Ken Leech, the former co-chief investment officer of Wamco, who left after receiving a Wells Notice from the SEC [2]. - CEO Jenny Johnson indicated that BEN is exploring ways to assist Wamco, including adjustments to economic arrangements and operational synergies [4]. Group 2: Financial Performance and Challenges - Wamco has faced continuous outflows, losing over $50 billion as clients, including pension funds, withdrew their investments due to underperformance and the SEC investigation [6]. - Even prior to the SEC probe, Wamco was experiencing client redemptions and senior employee departures due to lackluster performance [7]. - BEN's stock has declined by 10.7% over the past six months, contrasting with a 25.9% growth in the industry [9]. Group 3: Market Reactions and Future Outlook - The market is closely monitoring BEN's strategic intervention to support Wamco, with uncertainty about whether this will lead to a recovery or exacerbate existing challenges [8].

JACKSON, Wyo., Nov. 14, 2024 (GLOBE NEWSWIRE) -- Brand Engagement Network Inc. (“BEN”) (Nasdaq: BNAI), a global leader in secure and reliable conversational AI solutions, today announced its financial results and key business highlights for the third quarter ended September 30, 2024. "In the third quarter, we made significant progress in delivering secure, scalable AI solutions and advancing our mission to transform industries with intelligent technology," said Paul Chang, CEO of BEN. "As we look ahead, BEN ...