Invesco (NYSE:IVZ) Q4 2025 Earnings call January 27, 2026 09:00 AM ET Company ParticipantsAllison Dukes - CFOAndrew Schlossberg - CEOGreg Ketron - Head of Investor RelationsConference Call ParticipantsAlexander Blostein - AnalystBenjamin Budish - AnalystBrendan Hawkins - AnalystBrian Bedell - AnalystDaniel Fannon - AnalystGlenn Schorr - AnalystWilliam Katz - AnalystOperatorWelcome to Invesco's fourth quarter earnings conference call. All participants will be in listen-only mode until the question and answer ...

Invesco (NYSE:IVZ) Q4 2025 Earnings call January 27, 2026 09:00 AM ET Company ParticipantsAllison Dukes - CFOAndrew Schlossberg - CEOGreg Ketron - Head of Investor RelationsConference Call ParticipantsAlexander Blostein - AnalystBenjamin Budish - AnalystBrendan Hawkins - AnalystBrian Bedell - AnalystDaniel Fannon - AnalystGlenn Schorr - AnalystWilliam Katz - AnalystOperatorWelcome to Invesco's fourth quarter earnings conference call. All participants will be in listen-only mode until the question and answer ...

Financial Data and Key Metrics Changes - Invesco's net revenue grew by 6% in 2025, with record revenues from ETF and index investment capabilities increasing by 22% [10][11] - Operating margin improved by 230 basis points, with a 14% growth in operating income and a 19% increase in earnings per share compared to the previous year [11][12] - Total assets under management (AUM) reached $2.2 trillion, an increase of $45 billion or 2% from the previous quarter and $324 billion or 18% year-over-year [25][26] Business Line Data and Key Metrics Changes - ETF and index capabilities generated $630 billion in AUM, with net inflows of nearly $12 billion during the fourth quarter, reflecting an 8% annualized organic growth [14][15] - Fundamental equity revenue was flat compared to the prior year but increased by 4% from 2023, with $5.5 billion in net outflows overall in this segment [10][22] - Private markets platform saw $300 million in net inflows, driven by direct real estate strategies, with INCREF now totaling $4.7 billion in assets [19][21] Market Data and Key Metrics Changes - Revenue from Asian and EMEA regions combined increased by 13% for the year, contributing to overall growth [10] - The China joint venture reached a record-high AUM of $132 billion, with net long-term inflows of $8.9 billion, marking a 36% annualized organic growth rate [17][18] - The Canadian market is becoming increasingly concentrated, prompting a strategic partnership with CI Global Asset Management [5][6] Company Strategy and Development Direction - Invesco is focusing on a hybrid alpha investment platform to streamline operations and improve profitability, with completion expected by the end of 2026 [4][33] - The company aims to accelerate growth in its $130 billion private markets platform through strategic partnerships and innovative product offerings [6][9] - Invesco's strategy includes a commitment to enhancing shareholder returns, with a target payout ratio of around 60% for 2026 [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong net inflows and a diversified product offering as key strengths [12][42] - The company is focused on maintaining a disciplined expense management approach while investing in growth opportunities [11][30] - Management highlighted the importance of achieving first quartile investment performance as a priority for maintaining market share [24] Other Important Information - Invesco repurchased $1.5 billion in preferred stock in 2025, reducing outstanding preferred stock from $4 billion to $2.5 billion [27][40] - The company expects to see a $0.20 EPS benefit from the preferred stock repurchase once associated debt is repaid [27][39] - The effective tax rate for the quarter was 21%, with expectations to return to the 25%-26% range in the first quarter of 2026 [39] Q&A Session Summary Question: Capital return priorities and potential M&A considerations - Management discussed the focus on increasing share buybacks to $40 million and the potential for further preferred stock repurchases while prioritizing debt repayment [45][46] - M&A opportunities will be considered if they align with the company's growth strategy, but the focus remains on organic growth [48][49] Question: Implementation costs and future expense outlook - Management confirmed that implementation costs for the hybrid platform are expected to decrease over time, with further guidance to be provided as 2026 progresses [51][52] Question: Net revenue yield and its future impact - Management indicated that the addition of the QQQ ETF is expected to stabilize net revenue yield, with ongoing dynamics influencing future projections [55][56] Question: Private market strategy and branding considerations - The company aims to build a comprehensive product offering through partnerships while maintaining clear branding to avoid channel conflicts [66][68]

分组1 - Invesco reported quarterly earnings of $0.62 per share, exceeding the Zacks Consensus Estimate of $0.57 per share, and up from $0.52 per share a year ago, representing an earnings surprise of +8.03% [1] - The company posted revenues of $1.26 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 1.39%, compared to year-ago revenues of $1.16 billion [2] - Invesco shares have increased approximately 9% since the beginning of the year, outperforming the S&P 500's gain of 1.5% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.59 on revenues of $1.27 billion, and for the current fiscal year, it is $2.62 on revenues of $5.24 billion [7] - The Zacks Industry Rank for Financial - Investment Management is currently in the bottom 32% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Fourth Quarter 2025 Results Andrew Schlossberg President and Chief Executive Officer Allison Dukes Chief Financial Officer January 27, 2026 Forward-Looking Statements and Important Information This presentation and comments made in the associated conference call today may include "forward-looking statements." Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow, capital expenditures and AUM and could differ materially from event ...

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Financial Performance - Invesco reported a fourth quarter diluted EPS of $(2.61) and an adjusted diluted EPS of $0.62, impacted by a non-cash intangible impairment of $1.8 billion[2][17]. - The adjusted operating margin for Q4 2025 was 36.4%, showing improvement despite the intangible impairment, while the operating margin was reported at (86.2)%[5][11]. - The company reported operating revenues of $1.692 billion for Q4 2025, a 3.1% increase from Q3 2025 and a 6.2% increase from Q4 2024[11][18]. - Adjusted net income attributable to Invesco Ltd. for 2025 was $922 million, up 17.9% from 2024, with adjusted diluted EPS increasing to $2.03[12][12]. - The company reported an operating loss of $695.7 million for 2025, compared to an operating income of $832.1 million in 2024[44]. - Net income attributable to Invesco Ltd. was a loss of $726.3 million, contrasting with a profit of $538.0 million in the previous year[44]. - Basic and diluted earnings per share (EPS) for 2025 were both $(1.60), compared to $1.18 in 2024[44]. - Adjusted operating income for the year was $1,557.8 million, up from $1,370.7 million in 2024, indicating improved operational performance[50]. - Adjusted diluted EPS for the year was $2.03, compared to $1.71 in 2024, reflecting a positive trend in adjusted earnings[51]. Assets and Liabilities - The company ended the quarter with record assets under management (AUM) of $2.2 trillion, reflecting a 2.1% increase from the prior quarter and a 17.5% increase year-over-year[4][12]. - Total assets increased to $2,169.9 billion, a 2.1% increase from the previous quarter and a 17.5% increase year-over-year[56]. - Total liabilities increased to $14,089.1 million as of December 31, 2025, from $11,340.1 million in 2024, representing a rise of 24.4%[65]. - Total equity attributable to Invesco Ltd. decreased to $12,231.0 million in 2025 from $14,559.9 million in 2024, a decline of 16.0%[65]. Cash Flow and Investments - Cash and cash equivalents reached $1,037.5 million at December 31, 2025, up from $973.1 million at September 30, 2025[31]. - Cash flows from operating activities for the year ended December 31, 2025, totaled $1,525.3 million, compared to $1,190.0 million in 2024, a growth of 28.2%[62]. - Cash flows from investing activities for the year ended December 31, 2025, were $(974.4) million, compared to $(240.0) million in 2024, indicating a significant increase in investment outflows[62]. - Cash flows from financing activities for the year ended December 31, 2025, were $(149.5) million, a decrease from $(1,661.6) million in 2024, showing a reduction in financing outflows[62]. - The company’s investments increased to $1,381.1 million as of December 31, 2025, from $1,240.0 million in 2024, reflecting an increase of 11.4%[65]. Revenue and Inflows - Invesco achieved net long-term inflows of $19.1 billion in Q4 2025, down from $28.9 billion in Q3 2025, with full-year inflows totaling $81.2 billion[5][6]. - Retail and institutional net long-term inflows were $10.2 billion and $8.9 billion, respectively, with significant contributions from ETFs and Index products[7][8]. - Long-term inflows for the twelve months ended December 31, 2025, reached $515.0 billion, a 22.9% increase compared to $419.0 billion in the previous year[56]. - Total net flows for the last quarter were $30.5 billion, a 16.9% increase from $26.1 billion in the previous quarter[56]. - Net long-term flows decreased by 33.9% to $19.1 billion in the last quarter, down from $28.9 billion in the previous quarter[56]. Operating Expenses - Total operating expenses rose significantly by 35.1% to $7,072.8 million, primarily due to a substantial increase in amortization and impairment of intangible assets[44]. - Operating expenses for Q4-25 were $3,150.1 million, an increase from $1,281.3 million in Q4-24, resulting in a year-over-year increase of 146.3%[53]. - Adjusted operating expenses for Q4-25 were $801.1 million, compared to $767.1 million in Q4-24, reflecting a 4.4% increase[53]. Market Position and Strategy - Invesco QQQ Trust converted to an open-end fund ETF on December 20, 2025, which is expected to enhance its market position[5]. - The company emphasized the importance of non-GAAP measures for assessing ongoing operational performance and making budgetary decisions[46]. - The company aims to improve net revenue yield on AUM, which is calculated as net revenues divided by average AUM during the reporting period[54].

Core Insights - Invesco reported a fourth quarter diluted EPS of $(2.61), significantly impacted by a non-cash intangible impairment of $1.8 billion, which reduced EPS by $3.01 [1][15] - The company achieved record assets under management (AUM) of $2.2 trillion, with net long-term inflows of over $19 billion, reflecting a 5% annualized organic growth [2][7] - The adjusted diluted EPS for the fourth quarter was $0.62, showing a 1.6% increase from the previous quarter and a 19.2% increase year-over-year [10][24] Financial Performance - Operating revenues for Q4 2025 were $1,692.0 million, a 3.1% increase from Q3 2025 and a 6.2% increase from Q4 2024 [10][11] - The operating income for Q4 2025 was $(1,458.1) million, compared to $270.9 million in Q3 2025 and $311.7 million in Q4 2024 [10][11] - The adjusted operating income increased to $457.8 million in Q4 2025, a 12.7% increase from Q3 2025 and a 17.4% increase from Q4 2024 [10][22] Asset Management and Flows - Net long-term inflows for Q4 2025 were $19.1 billion, down from $28.9 billion in Q3 2025, with retail inflows of $10.2 billion and institutional inflows of $8.9 billion [3][4] - The company experienced net long-term outflows from Fundamental Equities of $5.5 billion, while ETFs and Index products saw inflows of $11.9 billion [4][7] - AUM increased by 2.1% in Q4 2025, with average AUM rising by 4.9% during the same period [5][10] Capital Management - Invesco repurchased $500 million of its Series A Preferred Stock in December 2025, totaling $1.5 billion in repurchases for the year [30] - The company reduced its debt to $1,825.1 million by repaying $240 million of a bank term loan during Q4 2025 [31] - Cash and cash equivalents increased to $1,037.5 million at year-end 2025, up from $973.1 million at the end of Q3 2025 [30] Market Position and Strategy - Invesco's strategic focus on unlocking value and accelerating profitable growth has positioned the firm well for the evolving global asset management market [2] - The conversion of Invesco QQQ Trust to an open-end fund ETF on December 20, 2025, is expected to enhance revenue generation [7][10] - The company continues to prioritize deleveraging its balance sheet while returning capital to shareholders through share repurchases [2][7]

Core Viewpoint - Morgan Stanley has set a price target of $29 for Invesco, indicating a potential increase of about 2.11% from its current trading price of $28.40 [1][6] Group 1: Financial Performance - Invesco is expected to report its fourth-quarter and full-year 2025 results on January 27, with a projected 2.1% increase in assets under management (AUM), reaching $2.17 trillion [2][6] - Performance fees for Invesco are projected to rise significantly to $30.8 million, up from $6.5 million in the previous quarter, which is likely to positively impact the company's earnings [3][6] - Invesco's adjusted earnings surpassed the Zacks Consensus Estimate in the previous quarter, driven by higher adjusted net revenues and an increased AUM balance, despite facing challenges with higher adjusted operating expenses [4] Group 2: Market Activity - Invesco's stock is currently priced at $28.40, experiencing a 2.87% decrease today, with a trading range between $28.32 and $29.07 [5] - Over the past year, Invesco's stock has reached a high of $29.61 and a low of $11.60, with a market capitalization of approximately $12.64 billion and a trading volume of 4,410,950 shares [5]

Core Insights - Invesco (IVZ) is set to announce its fourth-quarter and full-year 2025 results on January 27, with expectations of year-over-year increases in earnings and revenues [1] - The company has a strong earnings surprise history, surpassing the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 11.35% [2] Financial Performance Estimates - Invesco's preliminary total assets under management (AUM) as of December 31, 2025, was $2.17 trillion, reflecting a 2.1% sequential increase driven by market returns and net long-term inflows [3] - The Zacks Consensus Estimate for investment management fees is $1.2 billion, indicating a 3.9% rise from the previous quarter [3] - Performance fees are estimated to increase significantly to $30.8 million from $6.5 million in the prior quarter [4] - Service and distribution fees are expected to grow by 4.1% to $417.1 million, while other revenues are projected to rise by 15.2% to $55.9 million [4] - The consensus estimate for earnings is 57 cents, representing a 9.6% increase year-over-year, while sales are estimated at $1.25 billion, an 8.3% increase [11] Cost and Efficiency Factors - Invesco's cost-saving initiatives are likely to enhance efficiency, but rising compensation and marketing costs may negatively impact overall expenses [5] - Management anticipates one-time implementation costs of $10-$15 million related to the Alpha initiative in Q4 2025 [5] Strategic Developments - In December 2025, shareholders approved the reclassification of Invesco QQQ into an open-end ETF, allowing it to generate revenues and profits [6] - Invesco partnered with LGT Capital Partners to enhance private market access for U.S. wealth and retirement investors, focusing on creating a multi-alternative private markets offering [7] Earnings Prediction Insights - The model indicates low chances of Invesco beating the Zacks Consensus Estimate for earnings due to a negative Earnings ESP and a Zacks Rank of 3 (Hold) [8]