Core Insights - The Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD) is a passively managed ETF launched on November 1, 2006, providing broad exposure to the Consumer Discretionary sector [1] - The ETF has assets over $207.32 million and aims to match the performance of the S&P 500 Equal Weight Consumer Discretionary Index [3] - The ETF has an annual operating expense of 0.40% and a 12-month trailing dividend yield of 0.70% [4] Sector Overview - The Consumer Discretionary - Broad sector is ranked 11th among 16 Zacks sectors, placing it in the bottom 31% [2] - The ETF offers approximately 100% allocation in the Consumer Discretionary sector, providing diversified exposure [5] Holdings and Performance - Carnival Corp (CCL) accounts for about 2.33% of total assets, with the top 10 holdings representing approximately 21.73% of total assets [6] - The ETF has returned roughly 5.65% year-to-date and 15.50% over the past year, with a trading range between $44.09 and $56.27 in the last 52 weeks [7] Alternatives - The Invesco S&P 500 Equal Weight Consumer Discretionary ETF has a Zacks ETF Rank of 4 (Sell), indicating it may not be the best choice for investors seeking exposure to this sector [8] - Alternatives include the Vanguard Consumer Discretionary ETF (VCR) with $6.29 billion in assets and an expense ratio of 0.09%, and the Consumer Discretionary Select Sector SPDR ETF (XLY) with $22.97 billion in assets and an expense ratio of 0.08% [9]

Invesco Ltd. (NYSE:IVZ) Q2 2025 Earnings Call July 22, 2025 9:00 AM ET Company Participants Andrew Ryan Schlossberg - President, CEO & Director Gregory Wade Ketron - Head of Investor Relations & Treasury Laura Allison Dukes - Senior MD & CFO Conference Call Participants Alexander Blostein - Goldman Sachs Group, Inc., Research Division Benjamin Elliot Budish - Barclays Bank PLC, Research Division Brian Bertram Bedell - Deutsche Bank AG, Research Division Glenn Paul Schorr - Evercore ISI Institutional Equitie ...

Core Insights - Invesco's second-quarter 2025 adjusted earnings were 36 cents per share, missing the Zacks Consensus Estimate of 40 cents and reflecting a 16.3% decline from the prior-year quarter due to higher adjusted operating expenses, although adjusted net revenues increased [1][8] - The net loss attributable to common shareholders was $12.5 million or 3 cents per share, compared to a net income of $132.2 million or 29 cents per share in the same quarter last year [2] Adjusted Revenues & Expenses - Adjusted net revenues for the quarter were $1.10 billion, up 1.7% year over year, but missed the Zacks Consensus Estimate of $1.11 billion [3][8] - Adjusted operating expenses rose to $760.2 million, an increase of 1.3%, while the adjusted operating margin improved to 31.2% from 30.9% a year ago [3][8] Assets Under Management (AUM) - As of June 30, 2025, AUM reached $2 trillion, marking a 16.6% increase year over year, with average AUM at $1.9 trillion, up 13.7% [4][8] - The company experienced long-term net inflows of $15.6 billion during the quarter, primarily driven by ETFs, China joint ventures, India, and fixed income [4] Balance Sheet - As of June 30, 2025, cash and cash equivalents stood at $922.7 million, up from $878.5 million a year earlier, while long-term debt was $1.88 billion [5] Share Repurchases - In the reported quarter, Invesco repurchased 1.7 million shares for a total of $25 million [6] Market Outlook - The macroeconomic environment is expected to keep Invesco's net flows volatile, but strategic initiatives and partnerships are anticipated to support financial performance [7]

Core Insights - Invesco reported $1.1 billion in revenue for Q2 2025, a year-over-year increase of 1.7%, but the EPS decreased to $0.36 from $0.43 a year ago, indicating a decline in profitability [1] - The revenue fell short of the Zacks Consensus Estimate by -0.54%, and the EPS was -12.2% below the consensus estimate [1] Financial Performance Metrics - Invesco's shares have returned +35.3% over the past month, significantly outperforming the Zacks S&P 500 composite's +5.9% change, and the stock holds a Zacks Rank 1 (Strong Buy) [3] - Assets Under Management (AUM) for ETFs and Index reached $546.90 billion, exceeding the average estimate of $512.82 billion [4] - Total average AUM was reported at $1,897.40 billion, higher than the estimated $1,855.71 billion [4] - AUM for Fundamental Fixed Income was $301.60 billion, surpassing the estimate of $297.02 billion [4] - AUM for Private Markets was $131.20 billion, above the average estimate of $129.82 billion [4] - AUM for China JV & India was $120.20 billion, compared to the estimate of $114.48 billion [4] - AUM for Multi-Asset/Other was $64.10 billion, exceeding the estimate of $60.48 billion [4] - AUM for Global Liquidity was $196.40 billion, slightly below the estimate of $197.85 billion [4] - AUM for QQQs was $352.70 billion, significantly higher than the estimate of $314.54 billion [4] - Average AUM for ETFs & Index was $509.70 billion, above the estimate of $501.91 billion [4] Revenue Breakdown - Operating revenues from Other revenues were $48.2 million, below the estimate of $53.25 million, but showed a +2.1% year-over-year change [4] - Service and distribution fees generated $363.8 million, lower than the estimated $375.77 million, with a year-over-year change of +0.6% [4] - Performance fees were reported at $2.6 million, significantly below the average estimate of $8.99 million, reflecting a -70.1% year-over-year decline [4]

Financial Data and Key Metrics Changes - The company reported a record total assets under management (AUM) of slightly over $2,000 billion, which is $157 billion or 8% higher than the end of the first quarter and $286 billion or 17% higher than the end of the second quarter of 2024 [29] - Average long-term AUM increased by 1% over the last quarter and 12% over the second quarter of last year, reaching $1,340 billion [29] - Adjusted diluted earnings per share for the second quarter were $0.36, with net revenues of $1,100 million, which is $19 million higher than the same quarter last year [31][39] Business Line Data and Key Metrics Changes - The company generated $15.6 billion in net long-term asset inflows, representing a 4.7% annualized growth rate [11] - The global ETFs and index platform reported 10% annualized organic growth, with $12.6 billion of long-term net inflows in the quarter [12] - Fundamental fixed income garnered nearly $3 billion of net long-term inflows, while private markets experienced net outflows of $2 billion [30][24] Market Data and Key Metrics Changes - The Asia Pacific and EMEA regions accounted for 40% of overall long-term client AUM, generating $31 billion of net flows in the first half of 2025 [12] - The China joint venture and India capabilities delivered $5.6 billion of net long-term inflows, with a record high AUM of $105 billion in the China JV [23] - The company saw net outflows of $3.6 billion in fundamental equities, particularly from U.S. clients, while EMEA and Asia Pacific clients showed positive flows [24][25] Company Strategy and Development Direction - The company is focused on enhancing client outcomes, improving operating leverage, and strengthening its balance sheet [5] - A significant partnership with MassMutual and Barings aims to leverage private credit strengths and expand product offerings [6][8] - The company is pursuing a hybrid solution for its platforms, optimizing outcomes for clients and enhancing operational capabilities [42] Management's Comments on Operating Environment and Future Outlook - Management noted that the second quarter experienced pronounced market volatility, but strong momentum carried into July, leading to a global rebound for equities [11] - The company remains committed to driving profitable growth and enhancing capital returns to shareholders, with a focus on both organic and inorganic growth opportunities [61][99] - Management expressed optimism about the potential for private markets in defined contribution plans, contingent on regulatory changes [86] Other Important Information - The company repurchased $1 billion of preferred stock held by MassMutual, funded by bank term loans, which is expected to strengthen the balance sheet [31][45] - The net revenue yield for the second quarter was 23.2 basis points, indicating a smaller decline than in prior quarters, suggesting potential stabilization [35] Q&A Session Summary Question: Why is the company proposing changes to the QQQ structure now? - Management indicated that the proposal aims to modernize the structure to enhance outcomes for clients and shareholders, as the current unit trust structure has been in place since 1999 [53] Question: How will the changes impact marketing expenses and incremental margin? - The anticipated marketing budget for the trust is $60 million to $100 million, translating to 2 to 3 basis points of annual assets, with an expected addition of approximately four basis points to net revenue and operating income if approved [55] Question: How does the company balance deleveraging with growth? - Management emphasized that both growth and deleveraging are priorities, with a focus on improving operating cash flow to provide flexibility for both objectives [60] Question: What is the company's strategy for private markets? - The company is focused on partnerships and acquisitions to enhance its private markets capabilities, with a strong emphasis on organic growth as well [78] Question: What are the expectations for private markets in defined contribution plans? - Management believes there is potential for private markets in defined contribution plans, contingent on regulatory changes, and is prepared to meet market demand with existing capabilities [86]

Financial Data and Key Metrics Changes - The company reported a record total assets under management (AUM) of slightly over $2,000 billion, which is $157 billion or 8% higher than the end of the first quarter and $286 billion or 17% higher than the end of the second quarter of 2024 [28] - Average long-term AUM increased by 1% over the last quarter and 12% over the second quarter of last year, reaching $1,340 billion [28] - Adjusted diluted earnings per share were $0.36 for the second quarter, with net revenues of $1,100 million, which is $19 million higher than the same quarter last year [30][38] Business Line Data and Key Metrics Changes - The company generated $15.6 billion in net long-term asset inflows, representing a 4.7% annualized growth rate [10] - The global ETFs and index platform reported 10% annualized organic growth, with $12.6 billion of long-term net inflows in the quarter [11] - Fundamental fixed income garnered nearly $3 billion of net long-term inflows, while private markets experienced net outflows of $2 billion [29][22] Market Data and Key Metrics Changes - The Asia Pacific and EMEA regions accounted for 40% of overall long-term client AUM, generating $31 billion of net flows in the first half of 2025 [11] - The China joint venture and India capabilities delivered $5.6 billion of net long-term inflows, with a record high AUM of $105 billion in the China JV [21] - The company saw net outflows of $3.6 billion in fundamental equities, although there were positive flows from EMEA and Asia Pacific [22][23] Company Strategy and Development Direction - The company is focused on enhancing client outcomes, improving operating leverage, and strengthening its balance sheet [4] - A partnership with MassMutual and Barings aims to leverage private credit strengths and expand product offerings in the U.S. Wealth channel [6] - The company is pursuing a hybrid approach to investment management, utilizing platforms from both State Street and BlackRock to optimize outcomes for clients [40] Management's Comments on Operating Environment and Future Outlook - Management noted that the second quarter experienced pronounced market volatility, but strong momentum carried into July, leading to a global rebound for equities [10] - The company is optimistic about its ability to navigate market cycles due to a diversified asset mix and strong geographic presence [25][32] - Management emphasized the importance of improving operating cash flow to balance growth and deleveraging efforts [59][62] Other Important Information - The company completed the repurchase of $1 billion of preferred stock held by MassMutual, funded by bank term loans, which is expected to reduce preferred dividends significantly [30][44] - The company intends to continue common share repurchases and aims for a total payout ratio of near 60% from 2025 [45] - The filing of a preliminary proxy statement seeks approval to change the operational structure of the QQQ from a unit investment trust to an open-end fund ETF [35] Q&A Session Summary Question: Why is the company proposing changes to the QQQ structure now? - Management indicated that the proposal aims to modernize the structure to enhance outcomes for clients and shareholders, reflecting changes in market conditions since the QQQ was launched in 1999 [52][53] Question: How will the changes impact marketing spend and incremental margin? - The anticipated marketing budget for the trust is between $60 million to $100 million, translating to 2 to 3 basis points of annual assets, with an expected addition of four basis points to net revenue and operating income if approved [55] Question: How does the company balance deleveraging with growth? - Management stated that both growth and deleveraging are priorities, with a focus on improving operating cash flow to provide flexibility for growth initiatives [59][62] Question: What is the company's strategy for private markets? - The company is focused on partnerships and acquisitions to enhance its private markets capabilities, with a strong emphasis on organic growth as well [76] Question: How does the company view the potential for private markets in the 401(k) space? - Management believes there is promise for private markets in defined contribution plans, contingent on regulatory changes and market demand [84]

Invesco (IVZ) came out with quarterly earnings of $0.36 per share, missing the Zacks Consensus Estimate of $0.41 per share. This compares to earnings of $0.43 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -12.20%. A quarter ago, it was expected that this investment management company would post earnings of $0.39 per share when it actually produced earnings of $0.44, delivering a surprise of +12.82%.Over the last four quarter ...

Financial Performance - Ending AUM reached a record $2 trillion[9], with long-term AUM growing by 16% year-over-year[22] - Net long-term inflows were $156 billion, representing an annualized organic growth of 47%[9, 22] - Net revenues increased by 17% year-over-year, while expenses increased by 13%[22] - Adjusted operating margin improved by 30 basis points compared to the second quarter of 2024[22] - Share buybacks of $25 million, representing 17 million shares, were executed[22] Asset Flows and AUM Composition - ETFs and Index strategies saw net inflows of $126 billion[9] - Fundamental Fixed Income experienced net inflows of $28 billion, including over $4 billion from The Peoples Pension fund in the UK[9] - Fundamental Equities had net outflows of $36 billion, with positive flows from Global/Regional equities offset by outflows in emerging markets ($23 billion) and global equities ($22 billion)[9] - Private Markets experienced net outflows of $23 billion, offset by positive flows in real estate and CLOs[9] Geographic and Channel Performance - Americas accounted for 70% of total firm AUM[11] - Asia Pacific accounted for 15% of total firm AUM[11] - EMEA accounted for 15% of total firm AUM[11] - Retail channel represented 68% of total firm AUM, while the Institutional channel represented 32%[11]

Designed to provide broad exposure to the Industrials - Water segment of the equity market, the Invesco Global Water ETF (PIO) is a passively managed exchange traded fund launched on 06/13/2007.Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversi ...

[Second Quarter 2025 Overview](index=1&type=section&id=Second%20Quarter%202025%20Overview) [CEO Update & Key Highlights](index=1&type=section&id=CEO%20Update%20%26%20Key%20Highlights) In Q2 2025, Invesco achieved a record **$2.0 trillion** in AUM, driven by **$15.6 billion** in net long-term inflows, while GAAP diluted EPS was **$(0.03)** and adjusted diluted EPS was **$0.36**, reflecting strategic capital actions - CEO Andrew Schlossberg highlighted that the company's global scale and product breadth led to **$16 billion** in net long-term inflows (a **5% annualized growth rate**) and record AUM of **$2 trillion**, emphasizing controlled expenses, positive operating leverage, and a commitment to returning capital to shareholders through common and preferred stock repurchases[4](index=4&type=chunk) - Q2 2025 GAAP diluted EPS was **$(0.03)**, which includes a negative impact of **$0.35 per share** from costs related to the repurchase of preferred stock, while Adjusted diluted EPS, a non-GAAP measure, was **$0.36**[2](index=2&type=chunk)[15](index=15&type=chunk) Key Highlights | Metric | Q2 2025 Value | | :--- | :--- | | Net Long-Term Inflows | $15.6 billion | | Ending AUM | $2.0 trillion (Record High) | | AUM Increase from Prior Quarter | 8.5% | | U.S. GAAP Operating Margin | 14.1% | | Adjusted Operating Margin | 31.2% | | Common Share Repurchases | $25 million (1.7 million shares) | | Preferred Stock Repurchases | $1.0 billion | [Financial Performance](index=2&type=section&id=Financial%20Performance) [U.S. GAAP Operating Results](index=3&type=section&id=U.S.%20GAAP%20Operating%20Results) Q2 2025 GAAP operating income decreased **22.8%** sequentially to **$214.2 million** due to higher employee compensation, but increased **3.6%** year-over-year as higher revenues offset compensation rises moderated by lower G&A costs [Q2 2025 vs. Q1 2025 (GAAP)](index=3&type=section&id=Q2%202025%20vs.%20Q1%202025%20(GAAP)) Operating revenues decreased by **0.9%** to **$1,515.5 million**, while expenses rose **$49.4 million** due to deferred compensation and severance, leading to a **22.8%** drop in operating income to **$214.2 million** - Operating revenues decreased by **$13.7 million** compared to Q1 2025, with investment management fees slightly up but offset by lower service, distribution, and other fees[11](index=11&type=chunk) - Operating expenses increased by **$49.4 million** versus Q1 2025, primarily due to a **$45.8 million** rise in employee compensation, which included **$29.3 million** in mark-to-market on deferred compensation and **$16.9 million** in severance from the reorganization of fundamental equities teams[12](index=12&type=chunk) - The effective tax rate increased to **28.1%** from **22.5%** in the prior quarter, mainly due to the impact of lower pre-tax income and unfavorable changes in non-controlling interests[14](index=14&type=chunk) [Q2 2025 vs. Q2 2024 (GAAP)](index=3&type=section&id=Q2%202025%20vs.%20Q2%202024%20(GAAP)) Operating revenues grew **2.2%** year-over-year to **$1,515.5 million**, but expenses increased **$24.8 million** from higher employee compensation, partially offset by lower G&A due to a prior-year regulatory settlement, resulting in a **3.6%** rise in operating income to **$214.2 million** - Operating revenues increased by **$32.2 million** compared to Q2 2024, with investment management fees rising **$35.1 million** due to higher average AUM[16](index=16&type=chunk) - Operating expenses rose by **$24.8 million** year-over-year, with employee compensation increasing by **$58.1 million**, while General and Administrative expenses decreased by **$41.2 million**, primarily because the prior-year quarter included an expense for a regulatory settlement[17](index=17&type=chunk) - The effective tax rate rose to **28.1%** from **24.6%** in Q2 2024, attributed to tax rate changes and an unfavorable mix of income across tax jurisdictions[18](index=18&type=chunk) [Adjusted (Non-GAAP) Operating Results](index=4&type=section&id=Adjusted%20(Non-GAAP)%20Operating%20Results) Adjusted Q2 2025 net revenues were **$1,104.6 million**, with operating income at **$344.4 million**, showing slight sequential declines but year-over-year growth of **1.7%** in net revenues and **2.7%** in operating income, with adjusted diluted EPS at **$0.36** [Q2 2025 vs. Q1 2025 (Adjusted)](index=4&type=section&id=Q2%202025%20vs.%20Q1%202025%20(Adjusted)) Adjusted net revenues marginally decreased by **$4.1 million**, and operating expenses slightly increased, leading to a **$5.1 million** drop in adjusted operating income to **$344.4 million** and a **0.3 percentage point** dip in margin to **31.2%** Adjusted Operating Results Comparison | Metric | Q2-25 | Q1-25 | Change | | :--- | :--- | :--- | :--- | | Net Revenues | $1,104.6 m | $1,108.7 m | ($4.1 m) | | Adjusted Operating Income | $344.4 m | $349.5 m | ($5.1 m) | | Adjusted Operating Margin | 31.2% | 31.5% | (0.3 pts) | - The effective tax rate on adjusted net income increased to **26.5%** from **24.4%** in Q1 2025, primarily due to an unfavorable change in the mix of income across tax jurisdictions[21](index=21&type=chunk) [Q2 2025 vs. Q2 2024 (Adjusted)](index=4&type=section&id=Q2%202025%20vs.%20Q2%202024%20(Adjusted)) Adjusted net revenues increased by **$18.8 million** year-over-year, with operating expenses rising **$9.7 million**, resulting in a **$9.1 million** increase in adjusted operating income and a modest expansion of the adjusted operating margin to **31.2%** from **30.9%** in the prior-year quarter Adjusted Operating Results Comparison | Metric | Q2-25 | Q2-24 | Change | | :--- | :--- | :--- | :--- | | Net Revenues | $1,104.6 m | $1,085.8 m | +$18.8 m | | Adjusted Operating Income | $344.4 m | $335.3 m | +$9.1 m | | Adjusted Operating Margin | 31.2% | 30.9% | +0.3 pts | - The effective tax rate on adjusted net income increased to **26.5%** from **22.1%** in Q2 2024, due to tax rate changes and an unfavorable income mix across jurisdictions[24](index=24&type=chunk) [Capital Management & Shareholder Returns](index=4&type=section&id=Capital%20Management%20%26%20Shareholder%20Returns) [Capital Structure & Share Repurchases](index=4&type=section&id=Capital%20Structure%20%26%20Share%20Repurchases) In Q2 2025, Invesco increased total debt to **$1.88 billion** by taking on **$1.0 billion** in new bank loans to repurchase preferred stock, while also repurchasing **$25 million** of common shares and increasing its revolving credit facility to **$2.5 billion** Balance Sheet Items | Balance Sheet Item | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $922.7 million | $821.7 million | | Debt | $1,883.9 million | $964.8 million | - Debt increased significantly due to **$1.0 billion** in new 3-year and 5-year bank term loans used to fund the repurchase of Series A Preferred Stock on May 16, 2025[27](index=27&type=chunk) - The company repurchased **1.7 million** common shares for **$25 million** in Q2 2025 and repurchased **$1.0 billion** of its outstanding Series A Preferred Stock[28](index=28&type=chunk)[30](index=30&type=chunk) [Dividends](index=5&type=section&id=Dividends) Invesco declared a quarterly common dividend of **$0.21** per share and a preferred dividend of **$14.75** per share, having paid **$95.2 million** in common and **$56.6 million** in preferred dividends during Q2 2025 Declared Dividends | Dividend Type | Declared Amount per Share | Payable Date | | :--- | :--- | :--- | | Common | $0.21 | September 2, 2025 | | Preferred | $14.75 | September 1, 2025 | - Total dividends paid during Q2 2025 amounted to **$95.2 million** for common shares and **$56.6 million** for preferred shares[31](index=31&type=chunk) [Assets Under Management (AUM) Analysis](index=2&type=section&id=Assets%20Under%20Management%20(AUM)%20Analysis) [Overall AUM and Net Flows](index=2&type=section&id=Overall%20AUM%20and%20Net%20Flows) In Q2 2025, Invesco achieved a record **$2.0 trillion** in ending AUM, driven by **$15.6 billion** in net long-term inflows, strong market performance, and favorable foreign exchange movements, representing an **8.5%** sequential and **16.6%** year-over-year increase Net Flows Summary | Flow Type | Q2-25 (billions) | Q1-25 (billions) | Q2-24 (billions) | | :--- | :--- | :--- | :--- | | Active Net Long-Term | $3.8 | $1.5 | $2.3 | | Passive Net Long-Term | $11.8 | $16.1 | $14.4 | | **Total Net Long-Term** | **$15.6** | **$17.6** | **$16.7** | | Money Market | ($3.2) | $10.0 | $4.9 | | **Total Net Flows** | **$15.2** | **$32.6** | **$28.2** | AUM Change Drivers | Driver | Q2-25 Impact (billions) | | :--- | :--- | | Net Long-Term Inflows | +$15.6 | | Net Market Gains | +$126.4 | | Foreign Exchange Movements | +$14.0 | | Money Market Outflows | -$3.2 | | **Ending AUM** | **$2,001.4** | [AUM by Investment Approach (Active vs. Passive)](index=11&type=section&id=AUM%20by%20Investment%20Approach%20(Active%20vs.%20Passive)) Passive strategies led growth with **$11.8 billion** in net long-term inflows, complemented by **$3.8 billion** from active strategies, resulting in ending AUM of **$1.09 trillion** for Active and **$913.9 billion** for Passive Q2 2025 Net Long-Term Flows by Approach | Investment Approach | Net Long-Term Flows (billions) | | :--- | :--- | | Active | $3.8 | | Passive | $11.8 | Ending AUM by Approach | Investment Approach | Ending AUM (June 30, 2025, billions) | | :--- | :--- | | Active | $1,087.5 | | Passive | $913.9 | [AUM by Channel and Client Domicile](index=11&type=section&id=AUM%20by%20Channel%20and%20Client%20Domicile) Retail and Institutional channels contributed **$9.1 billion** and **$6.5 billion** in net long-term inflows respectively, with Asia Pacific and EMEA showing strong regional inflows, while the Americas experienced modest net long-term outflows Q2 2025 Net Long-Term Flows by Channel | Channel | Net Long-Term Inflows (billions) | | :--- | :--- | | Retail | $9.1 | | Institutional | $6.5 | Q2 2025 Net Long-Term Flows by Domicile | Region | Net Long-Term Flows (billions) | | :--- | :--- | | Asia Pacific | $9.8 | | EMEA | $6.6 | | Americas | ($0.8) | [AUM by Investment Capability](index=12&type=section&id=AUM%20by%20Investment%20Capability) Growth was driven by ETFs and Index strategies (**$12.6 billion**), China JV & India (**$5.6 billion**), and Fundamental Fixed Income (**$2.8 billion**), partially offset by outflows from Fundamental Equities and Private Markets Q2 2025 Net Long-Term Flows by Investment Capability | Capability | Net Long-Term Flows (billions) | | :--- | :--- | | **Inflows** | | | ETFs and Index | $12.6 | | China JV & India | $5.6 | | Fundamental Fixed Income | $2.8 | | Multi-Asset/Other | $0.5 | | **Outflows** | | | Fundamental Equities | ($3.6) | | Private Markets | ($2.3) | [Financial Statements and Reconciliations](index=6&type=section&id=Financial%20Statements%20and%20Reconciliations) [Condensed Consolidated Income Statements (U.S. GAAP)](index=6&type=section&id=Condensed%20Consolidated%20Income%20Statements%20(U.S.%20GAAP)) Q2 2025 U.S. GAAP income statement reported **$1,515.5 million** in total operating revenues and **$214.2 million** in operating income, but a **$159.3 million** preferred share repurchase cost led to a net loss of **$12.5 million**, or **$(0.03)** per diluted share Q2 2025 U.S. GAAP Income Statement Highlights | Line Item | Q2-25 (millions) | Q1-25 (millions) | Q2-24 (millions) | | :--- | :--- | :--- | :--- | | Total operating revenues | $1,515.5 | $1,529.2 | $1,483.3 | | Total operating expenses | $1,301.3 | $1,251.9 | $1,276.5 | | Operating income | $214.2 | $277.3 | $206.8 | | Cost of preferred share repurchase | ($159.3) | — | — | | Net income/(loss) attributable to Invesco Ltd. | ($12.5) | $171.1 | $132.2 | | Diluted EPS | ($0.03) | $0.38 | $0.29 | [Non-GAAP Reconciliations](index=7&type=section&id=Non-GAAP%20Reconciliations) This section details reconciliations from U.S. GAAP to non-GAAP measures, adjusting for items like amortization, deferred compensation changes, severance, and the significant **$159.3 million** preferred stock repurchase cost to derive Adjusted Net Income - Non-GAAP measures like Net Revenues, Adjusted Operating Income, and Adjusted EPS are used to provide insight into ongoing operational performance by excluding certain items[41](index=41&type=chunk) - Adjustments for Q2 2025 included severance costs (**$16.9M**) for reorganizing investment teams, a software impairment (**$8.0M**), and the cost of the preferred stock repurchase (**$159.3M**), which are removed to aid comparability[47](index=47&type=chunk) Q2 2025 Reconciliation of GAAP Net Income to Adjusted Net Income | Description | Amount (millions) | | :--- | :--- | | **Net (loss) attributable to Invesco Ltd., U.S. GAAP basis** | **($12.5)** | | Amortization of intangible assets | $9.7 | | Deferred compensation net market valuation changes | ($19.0) | | Severance | $16.9 | | Software impairment | $8.0 | | Tax adjustments | $2.8 | | Cost of preferred stock repurchase | $159.3 | | **Adjusted net income attributable to Invesco Ltd.** | **$165.2** | [Supplemental Information (Cash Flow & Balance Sheet)](index=16&type=section&id=Supplemental%20Information%20(Cash%20Flow%20%26%20Balance%20Sheet)) Supplemental tables provide cash flow and balance sheet data excluding Consolidated Investment Products (CIP), showing Invesco's cash and cash equivalents at **$922.7 million** and total assets of **$19.2 billion**, with total liabilities of **$5.3 billion**, as of June 30, 2025 - The supplemental information provides non-GAAP presentations of the balance sheet and cash flow statement, excluding the impact of Consolidated Investment Products (CIP), as CIP assets are not available for use by Invesco[60](index=60&type=chunk)[63](index=63&type=chunk) Balance Sheet Excluding CIP | Item | June 30, 2025 (billions) | | :--- | :--- | | Total Assets | $19.2 | | Total Liabilities | $5.3 | | Total Equity | $13.9 |