Franklin Resources(BEN)2025-01-31 13:47Financial 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].