T. Rowe Price(US:TROW)2025-05-02 15:44Assets 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].