Franklin Resources(US:BEN)2025-11-07 13:41Financial Performance - Preliminary net income for Q4 2025 was $117.6 million, or $0.21 per diluted share, a 27% increase from the previous quarter and a recovery from a net loss of $84.7 million in Q4 2024[2] - Adjusted net income for Q4 2025 was $357.5 million, a 36% increase from the previous quarter, with adjusted diluted earnings per share at $0.67[6] - Net income attributable to Franklin Resources, Inc. was $117.6 million in Q4 2025, a significant recovery from a net loss of $84.7 million in Q4 2024[12] - Earnings per share (EPS) for Q4 2025 were $0.21, compared to a loss of $0.19 per share in Q4 2024[12] - Operating income for Q4 2025 was $85.4 million, a turnaround from an operating loss of $150.7 million in Q4 2024[12] - Total operating revenues for Q4 2025 reached $2,343.7 million, a 6% increase from $2,211.2 million in Q4 2024[12] - Total operating revenues for the twelve months ended September 30, 2025, were $8,770.7 million, up from $8,478.0 million in the previous year, representing a 3.4% growth[25] - Adjusted net income for the three months ended September 30, 2025, was $357.5 million, compared to $263.4 million for the previous quarter, indicating a 35.7% increase[26] - Diluted earnings per share for the twelve months ended September 30, 2025, were $0.91, up from $0.85 in the previous year, marking a 7.1% increase[26] - Adjusted diluted earnings per share for the three months ended September 30, 2025, was $0.67, compared to $0.49 for the previous quarter, reflecting a 36.7% increase[26] Assets Under Management (AUM) - Total assets under management (AUM) reached $1,661.2 billion, up $49.4 billion during the quarter, despite $11.9 billion in long-term net outflows[6] - Alternative AUM reached a record $270 billion, bolstered by the Apera Asset Management acquisition and strong fundraising of $26.2 billion[3] - Total AUM at September 30, 2025, was $1,661.2 billion, a 3% increase from $1,611.8 billion at June 30, 2025[16] - The average AUM for the three months ended September 30, 2025, was $1,633.7 billion, a 4% increase from $1,565.2 billion for the previous quarter[15] - Equity AUM increased by 5% to $686.2 billion from $656.6 billion at June 30, 2025[15] - Fixed Income AUM decreased by 1% to $438.7 billion from $441.7 billion at June 30, 2025[15] - Total international AUM decreased by 1% to $489.7 billion from $496.9 billion at June 30, 2025[16] Cash Flow and Shareholder Returns - The company returned $930 million to shareholders through dividends and share repurchases during the fiscal year[4] - Cash and cash equivalents totaled $5.5 billion, with total stockholders' equity at $13.0 billion as of September 30, 2025[7] - The company declared dividends of $0.32 per share in Q4 2025, a 3% increase from $0.31 per share in Q4 2024[12] Operating Performance - The company reported an operating margin of 3.6% for Q4 2025, down from 7.5% in the previous quarter[6] - Total operating expenses decreased by 4% to $2,258.3 million in Q4 2025, down from $2,361.9 million in Q4 2024[12] - Operating margin improved to 3.6% in Q4 2025, compared to a negative margin of 6.8% in Q4 2024[12] - The adjusted operating margin for the twelve months ended September 30, 2025, was 24.5%, compared to 26.1% in the previous year[25] Inflows and Outflows - Long-term inflows increased to $84.6 billion, a 12% rise from the prior quarter, while long-term net outflows totaled $11.9 billion[2] - Excluding Western Asset Management, the company achieved $11.4 billion in net inflows, marking the eighth consecutive quarter of positive flows[2] - Long-term inflows for the three months ended September 30, 2025, were $84.6 billion, compared to $82.5 billion for the same period in 2024[14] - Long-term net flows for the twelve months ended September 30, 2025, were $(97.4) billion, a significant increase in outflows compared to $(32.6) billion for the previous year[14] - Cash management net flows for the three months ended September 30, 2025, were $7.2 billion, a recovery from $(0.2) billion in the same period last year[14] Future Outlook - The institutional pipeline of won-but-unfunded mandates stands at $20.4 billion, indicating a healthy outlook for future funding[2] - The company is focusing on enhancing its product offerings and expanding its market presence to drive future growth[19] Impairment and Expenses - Impairment of intangible assets decreased by 48% to $202.2 million in Q4 2025, down from $389.2 million in Q4 2024[12] - Acquisition-related retention expenses for the twelve months ended September 30, 2025, totaled $162.4 million, down from $263.6 million in the previous year[26]