Assets Under Management - Assets under management decreased by $40.3 billion to $1,566.3 billion as of March 31, 2025, driven by market depreciation of $31.7 billion and net cash outflows of $8.6 billion[89]. - Target date retirement portfolios saw an increase in assets to $484.2 billion, with net flows of $6.3 billion in the first quarter of 2025[91]. - Investment advisory clients outside the United States accounted for 8.7% of total assets under management as of March 31, 2025[90]. - Average assets under management (AUM) increased by $135.9 billion, or 9.2%, to $1,620.3 billion in Q1 2025 compared to Q1 2024[110]. - Ending AUM was $1,566.3 billion in Q1 2025, reflecting a 1.6% increase from $1,542.2 billion in Q1 2024[102]. - As of March 31, 2025, total assets in strategic investment advice solutions were $566 billion, with $551 billion included in reported assets under management[92]. Financial Performance - Net revenues for Q1 2025 were $1,763.9 million, a 0.8% increase from $1,750.2 million in Q1 2024, primarily driven by a 4.0% increase in investment advisory fees[103]. - Investment advisory fees rose to $1,598.4 million in Q1 2025, up 4.0% from $1,536.4 million in Q1 2024[102]. - Performance-based advisory fees decreased by 40.9% to $10.4 million in Q1 2025 from $17.6 million in Q1 2024[102]. - Net income to T. Rowe Price Group was $490.5 million in Q1 2025, down 14.5% from $573.8 million in Q1 2024[102]. - Diluted earnings per share decreased to $2.15 in Q1 2025 from $2.49 in Q1 2024, a decline of 13.7%[108]. - The operating margin for Q1 2025 was 33.8%, slightly up from 33.5% in Q1 2024, driven by net revenue growth outpacing operating expense growth[107]. - For the three months ended March 31, 2025, the adjusted net income attributable to T. Rowe Price Group, Inc. was $509.3 million, down from $548.5 million in the same period of 2024, representing a decrease of approximately 7.1%[136]. - The diluted earnings per share for the three months ended March 31, 2025, was $2.23, compared to $2.38 for the same period in 2024, reflecting a decrease of approximately 6.3%[136]. Operating Expenses - Operating expenses on a U.S. GAAP basis were $1,167.6 million, a 0.3% increase from $1,163.6 million in Q1 2024[105]. - Total operating expenses for Q1 2025 were $1,167.6 million, a slight increase of $4.0 million or 0.3% compared to Q1 2024[117]. - Total adjusted operating expenses rose to $1,135.1 million, reflecting an increase of $63.7 million or 5.9% year-over-year[117]. - Compensation, benefits, and related costs increased by $28.6 million or 4.5% to $657.9 million in Q1 2025, primarily due to higher salaries and employee benefits[117]. - Distribution and servicing costs were $93.6 million, up $11.7 million or 14.3% compared to the previous year, driven by higher average assets under management[118]. - Technology, occupancy, and facility costs increased by $17.7 million or 11.8% to $167.6 million, attributed to ongoing investments in technology capabilities[121]. - General, administrative, and other expenses rose to $103.3 million, an increase of $10.7 million or 11.6% compared to the prior year[122]. - Product and recordkeeping related costs were $83.8 million, reflecting an increase of $8.8 million or 11.7% year-over-year[120]. Cash Flow and Investments - The total cash and discretionary investments as of March 31, 2025, amounted to $3,297.1 million, an increase from $3,106.9 million at December 31, 2024, reflecting a growth of about 6.1%[137]. - The company reported cash and cash equivalents of $2,836.7 million as of March 31, 2025, compared to $2,649.8 million at the end of 2024, indicating an increase of approximately 7.1%[137]. - Operating cash flows for the first quarter of 2025 were $771.9 million, an increase of $32.4 million from $739.5 million in 2024, primarily driven by a $165.4 million increase in non-cash items[146]. - Net cash used in investing activities totaled $95.6 million in 2025, compared to $34.4 million in 2024, with net proceeds from the sale of investments decreasing from $65.3 million to $2.1 million[148]. - Net cash used in financing activities was $489.4 million in 2025, an increase from $355.2 million in 2024, with $215.2 million used for share repurchases[149]. Shareholder Returns - T. Rowe Price increased its quarterly recurring dividend per common share by 2.4% to $1.27 in February 2025, up from $1.24[142]. - The company repurchased 2.1 million shares of its outstanding common stock for $217.5 million in the first quarter of 2025, at an average price of $101.57 per share[142]. - Since the end of 2022, T. Rowe Price has returned nearly $3.4 billion to stockholders through stock repurchases and dividends, with total cash returned in 2023 at $1,376.2 million and projected at $1,469.7 million for 2024[143]. - A 2.4% increase in quarterly dividends per share was implemented in 2025, contributing to a $3.0 million increase in dividends paid compared to the previous year[149]. Market and Economic Conditions - Major stock indexes, including the S&P 500, declined by 4.3% in the first quarter of 2025, reflecting concerns over economic growth and inflation[84]. - The 10-year U.S. Treasury note yield decreased from 4.58% to 4.23% during the first quarter of 2025 amid slowing economic growth concerns[85]. - Emerging equity markets rose but underperformed developed non-U.S. markets in U.S. dollar terms, with Latin America and EMEA showing mostly positive trends[83]. - T. Rowe Price's ability to attract and retain investor assets is influenced by market conditions, investment performance, and competitive factors in the financial services sector[155]. Regulatory and Operational Risks - Regulatory changes, including proposed Maryland sales tax on IT services, could significantly impact operations and investor interest[157]. - No material change in market risks reported since the previous Form 10-K Annual Report for 2024[158]. - Future results are dependent on fluctuations in advertising and promotion expenses to expand investment advisory business and penetrate distribution channels[156]. - Total compensation expenses may vary due to bonuses, equity grants, employee count changes, and competitive factors[156]. - Potential impairment of goodwill and intangible assets could impact financial results[156]. - Fluctuations in foreign currency exchange rates may affect costs of international operations[156].

Core Insights - T. Rowe Price reported revenue of $1.76 billion for the quarter ended March 2025, reflecting a year-over-year increase of 0.8% but a slight miss against the Zacks Consensus Estimate of $1.77 billion, resulting in a revenue surprise of -0.39% [1] - The company's EPS for the quarter was $2.23, down from $2.38 in the same quarter last year, but it exceeded the consensus EPS estimate of $2.09, leading to an EPS surprise of +6.70% [1] Financial Performance Metrics - Assets Under Management (EOP) for Equity stood at $773.4 billion, below the average estimate of $806.24 billion [4] - Multi-asset Assets Under Management (EOP) were reported at $544.4 billion, compared to the average estimate of $553.12 billion [4] - Total Assets Under Management reached $1,566.3 billion, missing the average estimate of $1,607.56 billion [4] - Total net cash inflows were negative at $-8.6 billion, contrasting with the average estimate of $9.37 billion [4] - Net revenues from capital allocation-based income were reported at -$1.20 million, significantly lower than the estimated $6.07 million, marking a year-over-year decline of -102.6% [4] - Administrative, distribution, and servicing fees generated net revenues of $156.30 million, exceeding the average estimate of $142.50 million, representing a year-over-year increase of +4.8% [4] - Investment advisory fees totaled $1.60 billion, slightly below the estimated $1.61 billion, but reflecting a year-over-year increase of +2.9% [4] - Investment Advisory Fees from Alternatives were reported at $80.90 million, surpassing the estimated $72.05 million, with a year-over-year increase of +9.2% [4] - Multi-asset Investment Advisory Fees generated $454.70 million, slightly below the average estimate of $459.77 million, with a year-over-year increase of +5.8% [4] - Fixed income Investment Advisory Fees, including money market, were reported at $103.60 million, below the average estimate of $108.38 million, with a year-over-year increase of +3% [4] - Performance-based advisory fees were reported at $10.40 million, exceeding the estimated $10.09 million [4] - Equity Investment Advisory Fees totaled $959.20 million, slightly above the average estimate of $959.01 million, with a year-over-year increase of +1% [4] Stock Performance - T. Rowe Price shares returned +2.2% over the past month, outperforming the Zacks S&P 500 composite, which declined by -0.5% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - T. Rowe Price Group, Inc. reported better-than-expected adjusted earnings per share for Q1 2025, but experienced a year-over-year decline in net income and revenues, indicating mixed performance amidst rising expenses and market challenges [1][2][3]. Financial Performance - Adjusted earnings per share for Q1 2025 were $2.23, surpassing the Zacks Consensus Estimate of $2.09, but down 6.3% from the previous year [1]. - Net income on a GAAP basis was $490.5 million, a decline of 14.5% year-over-year, compared to an estimate of $439.8 million [2]. - Net revenues increased nearly 1% year-over-year to $1.76 billion, but fell short of the Zacks Consensus Estimate of $1.77 billion [3]. Revenue Sources - Investment advisory fees rose by 4% to $1.6 billion, exceeding the estimate of $1.63 billion [3]. - Capital allocation-based income significantly dropped to negative $1.2 million from $47.1 million in the prior-year quarter, primarily due to lower market returns [4]. Expenses and Costs - Total operating expenses increased slightly to $1.17 billion, below the estimate of $1.26 billion, while adjusted operating expenses were $1.14 billion, reflecting a 5.9% increase [4]. Assets Under Management (AUM) - As of March 31, 2025, total AUM grew 1.6% year-over-year to $1.57 trillion, although it was below the projected $1.69 trillion [5]. - The AUM was negatively impacted by net market depreciation and cash outflows totaling $8.6 billion [5]. Liquidity and Capital Distribution - The company maintained a strong liquidity position with cash and cash equivalents of $2.84 billion as of March 31, 2025, up from $2.65 billion at the end of 2024 [5]. - T. Rowe Price distributed $506 million to shareholders through dividends and share repurchases in the first quarter [6]. Strategic Outlook - The company’s solid AUM balance, expanding distribution reach, and diversification efforts through acquisitions are expected to support future growth [7]. - However, concerns remain regarding elevated expenses and reliance on investment advisory fees, alongside a challenging operating environment [7].

T. Rowe Price (TROW) came out with quarterly earnings of $2.23 per share, beating the Zacks Consensus Estimate of $2.09 per share. This compares to earnings of $2.38 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 6.70%. A quarter ago, it was expected that this financial services firm would post earnings of $2.23 per share when it actually produced earnings of $2.12, delivering a surprise of -4.93%.Over the last four quarters, ...

Financial Data and Key Metrics Changes - Adjusted earnings per share for Q1 2025 was $2.23, down from $2.38 in Q1 2024 but up from $2.12 in Q4 2024 [21] - Q1 2025 adjusted net revenue was $1.8 billion, a slight increase from Q1 2024 but down 3.6% from Q4 2024 [23] - Net outflows for the quarter were $8.6 billion, primarily driven by U.S. equities and rebalancing activity [21] Business Line Data and Key Metrics Changes - Target date franchise saw net inflows of $6.3 billion, led by blend products [22] - Fixed income had strong net inflows of $5.4 billion, mainly from institutional clients [22] - ETF business achieved net inflows of $3.26 billion, with eight ETFs each receiving over $100 million in inflows [22] Market Data and Key Metrics Changes - 99% of target date assets outperformed their peer group over three, five, and ten-year periods [10] - 60% of funds beat their peer groups across one, three, five, and ten-year timeframes [8] - Mixed results were observed in alternative portfolios, with private lending strategies generating the strongest gains [12] Company Strategy and Development Direction - The company is expanding its retirement solutions internationally, including partnerships in Japan and Korea [12][13] - Focus on enhancing ETF offerings and integrating strong equity research with hedging strategies [14] - Continued emphasis on managing expenses while investing in strategic initiatives [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged policy-driven market volatility affecting assets under management and revenues [7] - The outlook for 2025 remains largely unchanged, with expectations for improved flows relative to 2024 [58] - Management is optimistic about the growth potential in ETFs and private market alternatives [35][53] Other Important Information - The company maintains a strong balance sheet with $3.3 billion in cash and discretionary investments [19] - A quarterly dividend of $1.27 was announced, marking the 39th consecutive year of increases [19] - The company is recognized for its workplace culture and investment performance, receiving multiple accolades [16][17] Q&A Session Summary Question: ETF business growth and future opportunities - Management expressed excitement about the ETF business, highlighting strong performance and plans for future offerings [30][31] Question: Update on private lending and O Credit - Management noted $20 billion in private market alternatives, with O Credit seeing slower growth but potential for improvement [42][44] Question: Access to private market alternatives in retirement plans - Management indicated that private market alternatives will eventually gain access to defined contribution plans, but the timing is uncertain [48][53] Question: Flows and sales momentum outlook - Management reported that the flow outlook for the year is largely unchanged, with expectations for improvement in 2025 [58][61] Question: Fee rate dynamics - Management explained that the decrease in effective fee rate was driven by structural shifts towards lower-cost vehicles [65] Question: Expansion of retirement solutions outside the U.S. - Management detailed various international partnerships and the tailored approach to retirement solutions in different markets [72][75]

Financial Data and Key Metrics Changes - Adjusted earnings per share for Q1 2025 was $2.23, down from $2.38 in Q1 2024 but up from $2.12 in Q4 2024 [18] - Q1 2025 net outflows were $8.6 billion, primarily driven by U.S. equities and rebalancing activity [18] - Adjusted net revenue for Q1 2025 was $1.8 billion, marginally increasing from Q1 2024 but down 3.6% from Q4 2024 [20] - Adjusted operating expenses for Q1 2025 totaled $1.1 billion, a 7.4% increase from Q1 2024 [22] Business Line Data and Key Metrics Changes - Target date franchise had net inflows of $6.3 billion, led by blend products [19] - Fixed income saw strong net inflows of $5.4 billion, primarily from institutional clients [19] - ETF business achieved net inflows of $3.26 billion, with eight ETFs each having inflows over $100 million [20] Market Data and Key Metrics Changes - The effective fee rate for Q1 2025 was 40 basis points, declining from the prior quarter and Q1 2024 due to a mix shift in assets [21] - Equity assets under management decreased from 52% to 49% of total AUM, while fixed income and multi-asset increased [63] Company Strategy and Development Direction - The company is expanding its retirement strategies beyond the U.S., including partnerships in Japan and Korea [10][11] - Focus on enhancing ETF offerings and building a robust pipeline of new products [12][36] - The company aims to leverage its capabilities in private market alternatives to meet growing client demand [49][85] Management's Comments on Operating Environment and Future Outlook - Management acknowledged policy-driven market volatility impacting assets under management and revenues [6] - The outlook for 2025 remains largely unchanged, with expectations for improved flows relative to 2024 [55] - Management is cautious about the competitive landscape in private lending and alternative investments [40][46] Other Important Information - The company maintains a strong balance sheet with $3.3 billion in cash and discretionary investments [16] - A quarterly dividend of $1.27 was announced, marking the 39th consecutive year of increases [16] - The company is being thoughtful about controllable expenses while investing in strategic initiatives [16] Q&A Session Summary Question: Steps to drive ETF success and future opportunities - Management highlighted strong performance, scaling products, and investment in sales capabilities as keys to ETF success [28][30] Question: Update on private lending and investor appetite - Private market alternatives total approximately $20 billion, with OHA seeing $54 million in flows for the quarter [40] Question: Potential for alternative investments in U.S. retirement channels - Management believes there will eventually be access to private market alternatives in defined contribution plans [45] Question: Flows and sales momentum outlook - The flow outlook for the year is largely unchanged, with expectations for improvement relative to 2024 [55] Question: Fee rate dynamics and future expectations - The decrease in effective fee rate was driven by structural shifts towards lower-cost vehicles [62] Question: Capital allocation and inorganic growth opportunities - The company is considering share buybacks and M&A opportunities, particularly in private market alternatives [81][85]

Financial Performance - The Assets Under Management (AUM) decreased to $1.57 trillion in Q1 2025, compared to $1.61 trillion in Q4 2024 [6] - Net revenues for Q1 2025 were $1.76 billion, a decrease of 33% compared to $1.82 billion in Q4 2024 [6] - Diluted earnings per share (EPS) were $2.15 in Q1 2025, compared to $1.92 in Q4 2024 [6] - Adjusted operating expenses were $1.14 billion in Q1 2025, down from $1.22 billion in Q4 2024 [6] - The dividend per share increased to $1.27 in Q1 2025, compared to $1.24 in the previous quarters [6] Asset Flows and Management - Net outflows were $8.6 billion in Q1 2025 [6] - The investment advisory effective fee rate (EFR) with performance-based fees was 40.3 bps in Q1 2025, down from 40.9 bps in Q4 2024 [6] - U S defined contribution AUM reached $713 billion, with target date AUM at $484 billion [28] Investment Performance - 61% of funds outperformed the Morningstar median over 1 year [8] - 68% of funds outperformed the Morningstar median over 10 years [8]

Financial Performance - Diluted earnings per common share (EPS) were reported at $2.15, a decrease of 13.7% compared to $2.49 in Q1 2024[2]. - Adjusted diluted EPS was $2.23, down 6.3% from $2.38 in the same quarter last year[3]. - Net revenues for Q1 2025 were $1.76 billion, reflecting a 0.8% increase year-over-year but a 3.3% decrease from Q4 2024[8]. - Net income attributable to T. Rowe Price Group, Inc. for Q1 2025 was $490.5 million, down 14.5% from $573.8 million in Q1 2024[21]. - The adjusted net income for the same period was $509.3 million, with an adjusted diluted earnings per share of $2.23, compared to $548.5 million and $2.38 for the three months ended March 31, 2024[31]. Assets and Management - Total assets under management (AUM) decreased by $40.3 billion to $1.57 trillion as of March 31, 2025[4]. - The firm manages $1.57 trillion in assets under management as of March 31, 2025, with approximately two-thirds being retirement-related[17]. - The average AUM for the quarter was $1.62 trillion, up 9.2% from $1.48 trillion in Q1 2024[8]. - As of March 31, 2025, the firm's assets under administration were $280 billion, with $158 billion managed by the firm[6]. Client Activity - Net client outflows amounted to $8.6 billion during the quarter[3]. Operating Expenses - Total operating expenses for Q1 2025 were $1,167.6 million, an increase of 0.3% from Q1 2024 and a decrease of 7.0% from Q4 2024[10]. - Adjusted operating expenses for Q1 2025 were $1,135.1 million, reflecting a 5.9% increase from Q1 2024 and a 7.2% decrease from Q4 2024[10]. - Compensation, benefits, and related costs in Q1 2025 amounted to $657.9 million, up $28.6 million from Q1 2024, primarily due to higher salaries and employee benefits[10]. - Distribution and servicing costs in Q1 2025 were $93.6 million, an increase of 14.3% from Q1 2024, driven by higher average assets under management[10]. - Total operating income for the three months ended March 31, 2025, was $161.9 million, compared to $182.1 million for the same period in 2024[29]. Taxation - The effective income tax rate for Q1 2025 was 24.3%, compared to 23.5% in Q1 2024, primarily due to higher state taxes[13]. - The firm expects its effective tax rate for the full year 2025 to be in the range of 23.5% to 27.5% on a U.S. GAAP basis[14]. - The effective tax rate for the three months ended March 31, 2025, was 24.7%, slightly higher than 23.9% for the same period in 2024[30]. Non-Operating Income - Non-operating income for Q1 2025 was $70.7 million, a decrease of 62.6% from $188.9 million in Q1 2024[11]. - The total non-operating income (loss) for the three months ended March 31, 2025, was $70.7 million, compared to $188.9 million for the same period in 2024[29]. Cash and Investments - Cash and cash equivalents at the end of Q1 2025 were $2,836.7 million, an increase from $2,649.8 million at the end of 2024[23]. - Total assets as of March 31, 2025, were $13,993.7 million, up from $13,472.0 million at the end of 2024[23]. - The balance of investments in affiliated private investment funds decreased to $382.6 million in Q1 2025 from $514.3 million in Q1 2024[25]. - Non-controlling interests in consolidated entities decreased to $160.4 million in Q1 2025 from $205.4 million in Q1 2024[25]. Shareholder Returns - The firm returned $506 million to stockholders through dividends and stock repurchases during the quarter[3].

Group 1 - The company T. Rowe Price (NASDAQ: TROW) has been identified as a strong investment opportunity due to its clean balance sheet and valuation being significantly below its historical average [1] - The investor profile indicates a focus on dividend growth investing and value, suggesting a long-term investment strategy [1] - The analyst has a beneficial long position in TROW shares, indicating confidence in the company's future performance [1]

Core Viewpoint - Analysts expect T. Rowe Price (TROW) to report quarterly earnings of $2.09 per share, reflecting a year-over-year decline of 12.2%, with revenues projected at $1.77 billion, an increase of 1.2% from the previous year [1]. Earnings Estimates - There has been a downward revision of 13.2% in the consensus EPS estimate over the last 30 days, indicating a significant reconsideration by analysts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and stock price performance [3]. Revenue Projections - Analysts estimate 'Net revenues- Capital allocation-based income' to be $6.07 million, down 87.1% year-over-year [4]. - 'Net revenues- Administrative, distribution and servicing fees' are expected to reach $142.50 million, a decrease of 4.4% from the prior year [5]. - 'Net revenues- Investment advisory fees' are projected at $1.61 billion, reflecting a year-over-year increase of 3.3% [5]. - 'Net revenues- Investment Advisory Fees- Alternatives' are expected to be $72.05 million, down 2.8% from the previous year [6]. - 'Net revenues- Investment Advisory Fees- Multi-asset' are estimated at $459.77 million, indicating a year-over-year increase of 7% [6]. - 'Net revenues- Investment Advisory Fees- Fixed income, including money market' are forecasted to reach $108.38 million, up 7.7% year-over-year [7]. - 'Net revenues- Investment Advisory Fees- Equity' are expected to be $959.01 million, reflecting a 1% increase from the previous year [7]. Assets Under Management (AUM) - 'Assets Under Management (EOP) - Equity' is estimated at $806.24 billion, up from $770.4 billion in the same quarter last year [8]. - 'Assets Under Management (EOP) - Multi-asset' is projected to be $553.12 billion, compared to $497 billion a year ago [8]. - Total 'Assets Under Management' is expected to reach $1,607.56 billion, an increase from $1,484.4 billion year-over-year [9]. - 'Assets Under Management (EOP) - Fixed income, including money market' is estimated at $195.56 billion, up from $169.5 billion last year [9]. - 'Assets Under Management (EOP) - Alternatives' is projected to be $52.65 billion, compared to $47.5 billion in the previous year [10]. Stock Performance - Over the past month, T. Rowe shares have recorded a return of -3.4%, while the Zacks S&P 500 composite has changed by -0.8% [10]. - Based on its Zacks Rank 4 (Sell), TROW is expected to underperform the overall market in the upcoming period [11].