PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited consolidated financial statements for T. Rowe Price Group, Inc. for the quarter ended June 30, 2025 [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show total assets grew to **$14.34 billion** by June 2025, with Q2 net income at **$505.2 million** Financial Metric (in millions) | Financial Metric | 6/30/2025 | 12/31/2024 | | :--- | :--- | :--- | | **Total Assets** | $14,342.2 M | $13,472.0 M | | **Total Liabilities** | $2,529.3 M | $2,021.9 M | | **Total Stockholders' Equity** | $10,560.5 M | $10,345.4 M | Income Statement (in millions) | Income Statement (in millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | $1,723.3 | $1,733.3 | $3,487.2 | $3,483.5 | | **Net Operating Income** | $478.3 | $564.7 | $1,074.6 | $1,151.3 | | **Net Income Attributable to T. Rowe** | $505.2 | $483.4 | $995.7 | $1,057.2 | | **Diluted EPS** | $2.24 | $2.11 | $4.38 | $4.60 | Cash Flows (YTD, in millions) | Cash Flows (YTD, in millions) | 6/30/2025 | 6/30/2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $1,162.8 | $1,315.0 | | **Net Cash used in Investing Activities** | $(56.8) | $(93.4) | | **Net Cash used in Financing Activities** | $(687.3) | $(575.5) | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue breakdowns, investment holdings, and significant commitments for future product launches Revenue & AUM (Six months ended 6/30/2025) | Revenue & AUM (Six months ended 6/30/2025) | Amount | | :--- | :--- | | **Total Investment Advisory Fees** | $3,166.0 M | | Equity Fees | $1,882.8 M | | Fixed Income Fees | $209.1 M | | Multi-Asset Fees | $910.6 M | | Alternatives Fees | $163.5 M | | **Average AUM** | $1,604.5 B | - The company's investment portfolio, excluding consolidated products, totaled **$3.36 billion** at June 30, 2025, up from **$3.00 billion** at year-end 2024, with key components including investments for deferred compensation hedges (**$1.05 billion**) and discretionary investments (**$719.0 million**)[33](index=33&type=chunk) - As of June 30, 2025, the company has **$261.0 million** of unrecognized compensation expense related to stock-based awards, expected to be recognized over remaining vesting periods through 2030[57](index=57&type=chunk)[58](index=58&type=chunk) - The company has committed **$330 million** for investment in future OHA product launches through 2026, with a contingent consideration of up to **$900 million** related to the OHA acquisition potentially payable in 2026-2027, though its fair value was zero as of June 30, 2025[72](index=72&type=chunk)[73](index=73&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses the company's performance amid a challenging industry environment, highlighting AUM growth, revenue changes, and operating margin compression [Market Trends and Assets Under Management (AUM)](index=22&type=section&id=Market%20Trends%20and%20AUM) Major U.S. and international stock markets rose in Q2 2025, driving AUM growth to **$1.677 trillion** despite net cash outflows - Major U.S. stock market indexes rose in Q2 2025, with the S&P 500 Index up **10.9%** and the NASDAQ Composite Index up **17.8%** for the quarter[84](index=84&type=chunk)[88](index=88&type=chunk) AUM Change Q2 2025 (in billions) | AUM Change Q2 2025 (in billions) | Equity | Fixed Income | Multi-asset | Alternatives | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | **Beginning AUM** | $773.4 | $195.7 | $544.4 | $52.8 | $1,566.3 | | **Net Cash Flows** | $(18.1) | $1.2 | $0.9 | $1.1 | $(14.9) | | **Market Appreciation & Income** | $83.2 | $3.4 | $38.0 | $0.8 | $125.4 | | **Ending AUM** | $838.5 | $200.3 | $583.3 | $54.7 | $1,676.8 | [Investment Performance](index=25&type=section&id=Investment%20Performance) The company's long-term investment performance remains solid with **62%** of U.S. funds outperforming over 10 years, though short-term results are mixed % of U.S. Funds Outperforming Morningstar Median | % of U.S. Funds Outperforming Morningstar Median | 1 year | 3 years | 5 years | 10 years | | :--- | :--- | :--- | :--- | :--- | | **All Funds** | 35% | 54% | 50% | 62% | % of Composites Outperforming Benchmarks | % of Composites Outperforming Benchmarks | 1 year | 3 years | 5 years | 10 years | | :--- | :--- | :--- | :--- | :--- | | **All Composites** | 33% | 42% | 41% | 60% | - As of June 30, 2025, **47.2%** of the firm's rated U.S. mutual funds received an overall Morningstar rating of 4 or 5 stars, compared to **32.5%** for the broader Morningstar fund population[102](index=102&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Q2 2025 net revenues decreased **0.6%** to **$1.72 billion**, while operating expenses rose **6.5%**, compressing the GAAP operating margin to **27.8%** Financial Results (in millions, except EPS) | Financial Results (in millions, except EPS) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net Revenues** | $1,723.3 | $1,733.3 | (0.6)% | | **Operating Expenses (GAAP)** | $1,245.0 | $1,168.6 | 6.5% | | **Net Operating Income (GAAP)** | $478.3 | $564.7 | (15.3)% | | **Diluted EPS (GAAP)** | $2.24 | $2.11 | 6.2% | - The average annualized effective fee rate (excluding performance fees) declined to **39.6 basis points** in Q2 2025 from **41.1 basis points** in Q2 2024, attributed to market movements and client flows shifting AUM toward lower-fee products[104](index=104&type=chunk)[118](index=118&type=chunk) - Technology, occupancy, and facility costs rose **11.5%** YoY to **$179.4 million** in Q2 2025, driven by higher technology costs and expenses related to the new corporate headquarters occupied in March 2025[124](index=124&type=chunk)[129](index=129&type=chunk) [Capital Resources and Liquidity](index=39&type=section&id=Capital%20Resources%20and%20Liquidity) The company maintains a strong liquidity position with **$3.8 billion** in cash and discretionary investments, returning **$901.0 million** to stockholders in H1 2025 Liquidity (in millions) | Liquidity (in millions) | 6/30/2025 | 12/31/2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $3,058.9 | $2,649.8 | | **Discretionary investments** | $749.6 | $457.1 | | **Total cash and discretionary investments** | $3,808.5 | $3,106.9 | - In the first half of 2025, the company repurchased **3.4 million** shares for **$326.1 million** and paid **$574.9 million** in dividends, totaling **$901.0 million** returned to stockholders[153](index=153&type=chunk)[154](index=154&type=chunk) - Anticipated capital expenditures for the full year 2025 are approximately **$282 million**, with over **80%** designated for technology initiatives[155](index=155&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) There have been no material changes in the company's market risks from those previously disclosed in its 2024 Form 10-K Annual Report - There has been no material change in the company's market risks from those provided in the Form 10-K Annual Report for 2024[170](index=170&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[171](index=171&type=chunk) - There were no changes in internal control over financial reporting during Q2 2025 that have materially affected or are likely to materially affect such controls[172](index=172&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings.) Information on legal proceedings is referenced in the Commitments and Contingencies footnote, with management assessing a remote likelihood of material adverse outcomes - Information on legal proceedings is located in the Commitments and Contingencies footnote (Note 11) of the financial statements[174](index=174&type=chunk)[74](index=74&type=chunk) - Management believes the likelihood of a material adverse effect from pending ordinary course of business claims is remote[74](index=74&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors.) There have been no material changes to the company's risk factors from those previously disclosed in its 2024 Form 10-K Annual Report - There have been no material changes in the risk factors from those provided in the Form 10-K Annual Report for 2024[175](index=175&type=chunk) [Share Repurchases](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company repurchased **1,230,409** shares at an average price of **$89.76** in Q2 2025, with **15.0 million** shares remaining under authorization Share Repurchase Activity (Q2 2025) | Month (2025) | Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | April | 754,746 | $87.22 | | May | 261,218 | $93.63 | | June | 214,445 | $94.00 | | **Total Q2** | **1,230,409** | **$89.76** | - As of June 30, 2025, the maximum number of shares that may yet be purchased under the company's authorized programs is **15,025,865**[176](index=176&type=chunk)[178](index=178&type=chunk) [Exhibits](index=46&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed as part of the Form 10-Q report, including required certifications by executive officers and XBRL financial statements - The filing includes required certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31(i).1 and 31(i).2) and Section 1350 Certifications (Exhibit 32)[182](index=182&type=chunk)

Company Performance - T. Rowe Price reported quarterly earnings of $2.24 per share, exceeding the Zacks Consensus Estimate of $2.15 per share, but down from $2.26 per share a year ago, representing an earnings surprise of +4.19% [1] - The company posted revenues of $1.72 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.72%, and down from $1.73 billion year-over-year [2] - T. Rowe has surpassed consensus EPS estimates three times over the last four quarters but has not beaten consensus revenue estimates during the same period [2] Stock Outlook - T. Rowe shares have declined approximately 10.3% since the beginning of the year, contrasting with the S&P 500's gain of 7.8% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $2.30 for the coming quarter and $8.93 for the current fiscal year, with revenues expected to be $1.8 billion and $7.12 billion respectively [7] Industry Context - The Financial - Investment Management industry, to which T. Rowe belongs, is currently ranked in the top 19% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - The adjusted diluted earnings per share for Q2 2025 was $2.24, consistent with Q1 2025's $2.23 and slightly down from Q2 2024's $2.26 [15] - The company reported $14.9 billion in net outflows, similar to the previous quarter, primarily driven by U.S. equities [15][16] - Adjusted net revenue for Q2 2025 was $1.76 billion, flat compared to Q2 2024 and down marginally from Q1 2025 [20] - Adjusted operating expenses for Q2 2025 were slightly over $1.1 billion, up 1% from Q1 2025 and up 3.7% from Q2 2024 [20][21] Business Line Data and Key Metrics Changes - Positive net flows were observed across fixed income, multi-asset, and alternatives, with $2.5 billion in net flows into ETFs [16][11] - The target date suite surpassed $520 billion in assets under management, maintaining top quartile performance over three, five, and ten-year periods [11][12] - Fixed income performance remained strong, with a majority of funds beating peer group medians across all time horizons [10] Market Data and Key Metrics Changes - The company experienced a challenging quarter due to equity market volatility, with average equity AUM down 5% and overall average AUM down 2% from Q1 2025 [19] - The ETF franchise reached $16.2 billion in AUM as of June 30, with 11 ETFs scaling over $500 million [12] - The retirement solutions segment saw inflows of $1.7 billion in the second quarter, marking the sixth consecutive quarter of positive net flows in fixed income [49] Company Strategy and Development Direction - The company is focused on reducing expense growth while investing in capabilities and client reach, aiming for efficiency to fund future investments [6][21] - There is a strong emphasis on enhancing retirement solutions and exploring the integration of private assets into defined contribution plans [27][29] - The company is expanding its ETF product line and private market alternatives, with plans to launch additional diversified equity ETFs [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term headwinds but expressed confidence in the company's positioning to capitalize on future opportunities [6] - The company is optimistic about the potential for private investments in defined contribution plans, pending regulatory clarity [29] - Management expects outflows to continue in the second half of the year but anticipates lower levels than the first half [49] Other Important Information - The company has implemented a multi-year plan to align expense growth with anticipated revenue growth, targeting low single-digit growth in non-market driven expenses [21] - The balance sheet remains strong with $3.8 billion in cash and discretionary investments, and the company returned over $395 million to shareholders in 2025 [22][23] Q&A Session Summary Question: Update on the 401(k) business and potential for private markets - Management emphasized a client-first approach and the potential for integrating private assets into retirement solutions, with ongoing evaluations of product design and commercial viability [27][29] Question: Insights on expense initiatives and technology advancements - Management discussed a multi-year plan focused on efficiency and leveraging technology, including AI, to drive productivity and cost savings [35][36] Question: Analysis of retirement channel flows and fee rates - Management noted that the majority of flows in defined contribution have shifted towards target date funds, with less churn in retirement accounts compared to standalone strategies [50][51] Question: Impact of model delivery on AUM and growth pipeline - Management explained the decision to include model delivery assets in AUM, highlighting the growth potential and the importance of delivering value to clients [79][81] Question: Opportunities in blockchain and tokenization - Management expressed interest in digital asset investing and the potential for active management to play a role as the regulatory landscape evolves [75][76]

Financial Data and Key Metrics Changes - The adjusted diluted earnings per share for Q2 2025 was $2.24, consistent with Q1 2025's $2.23 and slightly down from Q2 2024's $2.26 [15] - The company reported $14.9 billion in net outflows, similar to the previous quarter, primarily driven by U.S. equities [15][16] - Adjusted net revenue for Q2 2025 was $1.76 billion, flat compared to Q2 2024 and down marginally from Q1 2025 [19] - Adjusted operating expenses for Q2 2025 were just over $1.1 billion, up 1% from Q1 2025 and up 3.7% from Q2 2024 [20] Business Line Data and Key Metrics Changes - Positive net flows were observed across fixed income, multi-asset, and alternatives, with $2.5 billion in net flows into ETFs [16][11] - The target date suite surpassed $520 billion in assets under management, maintaining top quartile performance over three, five, and ten-year periods [11] - Fixed income performance remained strong, with a majority of funds beating peer group medians across all time horizons [9] Market Data and Key Metrics Changes - The company experienced a challenging quarter due to equity market volatility, with average equity AUM down 5% and overall average AUM down 2% from Q1 2025 [18] - The ETF franchise reached $16.2 billion in AUM as of June 30, 2025, with significant inflows in the first half of the year [12] Company Strategy and Development Direction - The company is focused on reducing expense growth while investing in capabilities and client reach, aiming for efficiency to fund future investments [6][21] - There is a strong emphasis on expanding the ETF business and enhancing retirement solutions, with plans to integrate private assets into defined contribution plans [28][31] - The company is evaluating its global real estate footprint to optimize space usage and control occupancy expenses [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term headwinds but expressed confidence in the company's positioning to capitalize on future opportunities [6] - The outlook for the second half of the year suggests lower outflows compared to the first half, with expectations of continued growth in retirement solutions and fixed income [49] Other Important Information - The company returned over $395 million to shareholders in 2025, including $286 million for dividends and $109 million in share buybacks [22] - The company is actively exploring partnerships and acquisitions to enhance capabilities and reach new clients, particularly in the retirement space [86][89] Q&A Session Summary Question: Update on the 401(k) business and potential for private markets - Management emphasized a client-first approach and the potential for integrating private assets into retirement solutions, awaiting regulatory clarity [28][30] Question: Insights on expense initiatives and technology advancements - Management discussed a multi-year plan to drive efficiencies and the potential of AI to enhance productivity and investment solutions [35][39] Question: Analysis of equity outflows and retirement channel performance - Management noted elevated outflows in equity but highlighted strong inflows in retirement date funds and fixed income, indicating progress beneath the surface [48][50] Question: Impact of growing ETF pipeline and potential cannibalization - Management indicated that growth in ETFs is a mix of new investors and some cannibalization from legacy funds, with a focus on reaching new clients [65][70] Question: Opportunities in blockchain and tokenization - Management expressed interest in digital asset investing and the potential for active management to play a role as regulatory clarity improves [72][76] Question: Model delivery and its impact on AUM - Management explained the decision to include model delivery in AUM, highlighting its growth and the importance of delivering value to clients [77][81]

Q2 2025 Earnings Release Supplement T. Rowe Price Group, Inc. August 1, 2025 A copy of this presentation, which includes additional information, is available at investors.troweprice.com. Data as of June 30, 2025, unless otherwise noted. All figures are USD, unless otherwise noted. Forward-Looking Statement This presentation, and other statements that T. Rowe Price may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to T. Rowe Pric ...

NEWS RELEASE 1 ▪ Quarter-end assets under management (AUM) of $1.68 trillion ▪ Net client outflows of $14.9 billion ▪ Diluted earnings per common share (EPS) of $2.24; Adjusted diluted EPS of $2.24 ▪ Returned $395 million to stockholders from the recurring quarterly dividend and stock repurchases Assets Under Management During Q2 2025, assets under management (AUM) increased $110.5 billion to $1.68 trillion. The components of the change in AUM, by asset class, are shown in the table below. | | | | | | Three ...

Analysts forecast 'Net revenues- Investment advisory fees' to reach $1.56 billion. The estimate indicates a change of -1.8% from the prior-year quarter. The consensus estimate for 'Net revenues- Investment Advisory Fees- Alternatives' stands at $79.68 million. The estimate indicates a year-over-year change of -13.1%. Wall Street analysts forecast that T. Rowe Price (TROW) will report quarterly earnings of $2.11 per share in its upcoming release, pointing to a year-over-year decline of 6.6%. It is anticipate ...

Core Viewpoint - T. Rowe Price (TROW) is anticipated to report a year-over-year decline in earnings due to lower revenues, with the consensus estimate indicating a potential impact on its near-term stock price [1][3]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $2.10 per share, reflecting a year-over-year decrease of 7.1%, and revenues are projected to be $1.71 billion, down 1.4% from the previous year [3]. - A positive movement in stock price may occur if the actual earnings exceed expectations, while a miss could lead to a decline [2]. Estimate Revisions - The consensus EPS estimate has been revised 9.62% higher in the last 30 days, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for T. Rowe is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +0.99%, suggesting a bullish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy) [10]. - T. Rowe currently holds a Zacks Rank of 1, enhancing the likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, T. Rowe exceeded the expected earnings of $2.09 per share by delivering $2.23, resulting in a surprise of +6.70% [13]. - Over the past four quarters, T. Rowe has beaten consensus EPS estimates three times [14]. Industry Context - In the broader financial services sector, Blue Owl Capital Inc. is expected to report earnings of $0.21 per share, reflecting a year-over-year increase of 10.5%, with revenues projected to rise by 22.5% [18][19]. - Blue Owl Capital's Earnings ESP is -0.82%, combined with a Zacks Rank of 3 (Hold), making it challenging to predict an earnings beat [20].

Company Performance - T. Rowe Price (TROW) closed at $106.44, marking a +1.66% move from the prior day, outperforming the S&P 500's daily gain of 0.06% [1] - The stock has risen by 11.4% in the past month, leading the Finance sector's gain of 4.07% and the S&P 500's gain of 5.88% [1] Earnings Forecast - The company is scheduled to release its earnings on August 1, 2025, with projected earnings per share (EPS) of $2.1, reflecting a 7.08% decrease from the same quarter last year [2] - The consensus estimate for revenue is $1.71 billion, down 1.37% from the prior-year quarter [2] Annual Estimates - For the annual period, Zacks Consensus Estimates anticipate earnings of $8.84 per share and revenue of $7.07 billion, signifying shifts of -5.25% and -0.38% respectively from the last year [3] Analyst Estimates - Recent changes to analyst estimates for T. Rowe Price may indicate a changing landscape of near-term business trends, with positive revisions seen as a sign of optimism about the business outlook [3] Zacks Rank System - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has a track record of superior performance, with 1 stocks contributing an average annual return of +25% since 1988 [5] - T. Rowe Price currently features a Zacks Rank of 2 (Buy) [5] Valuation Metrics - T. Rowe Price holds a Forward P/E ratio of 11.84, which is a premium compared to the average Forward P/E of 11.81 for its industry [6] - The PEG ratio for TROW is currently 3.11, compared to the Financial - Investment Management industry's average PEG ratio of 1.45 [6] Industry Overview - The Financial - Investment Management industry is part of the Finance sector and currently holds a Zacks Industry Rank of 22, placing it in the top 9% of all 250+ industries [7] - The Zacks Industry Rank assesses the strength of industry groups by calculating the average Zacks Rank of individual stocks within those groups [7]

Business Operations - T Rowe Price Group Inc 正在进行全公司的裁员 [1] Industry Challenges - 该资产管理公司正面临资金外流和其他压力 [1]