T. Rowe Price(US:TROW)2025-05-02 12:00Financial Data and Key Metrics Changes - Adjusted earnings per share for Q1 2025 was $2.23, down from $2.38 in Q1 2024 but up from $2.12 in Q4 2024 [18] - Q1 2025 net outflows were $8.6 billion, primarily driven by U.S. equities and rebalancing activity [18] - Adjusted net revenue for Q1 2025 was $1.8 billion, marginally increasing from Q1 2024 but down 3.6% from Q4 2024 [20] - Adjusted operating expenses for Q1 2025 totaled $1.1 billion, a 7.4% increase from Q1 2024 [22] Business Line Data and Key Metrics Changes - Target date franchise had net inflows of $6.3 billion, led by blend products [19] - Fixed income saw strong net inflows of $5.4 billion, primarily from institutional clients [19] - ETF business achieved net inflows of $3.26 billion, with eight ETFs each having inflows over $100 million [20] Market Data and Key Metrics Changes - The effective fee rate for Q1 2025 was 40 basis points, declining from the prior quarter and Q1 2024 due to a mix shift in assets [21] - Equity assets under management decreased from 52% to 49% of total AUM, while fixed income and multi-asset increased [63] Company Strategy and Development Direction - The company is expanding its retirement strategies beyond the U.S., including partnerships in Japan and Korea [10][11] - Focus on enhancing ETF offerings and building a robust pipeline of new products [12][36] - The company aims to leverage its capabilities in private market alternatives to meet growing client demand [49][85] Management's Comments on Operating Environment and Future Outlook - Management acknowledged policy-driven market volatility impacting assets under management and revenues [6] - The outlook for 2025 remains largely unchanged, with expectations for improved flows relative to 2024 [55] - Management is cautious about the competitive landscape in private lending and alternative investments [40][46] Other Important Information - The company maintains a strong balance sheet with $3.3 billion in cash and discretionary investments [16] - A quarterly dividend of $1.27 was announced, marking the 39th consecutive year of increases [16] - The company is being thoughtful about controllable expenses while investing in strategic initiatives [16] Q&A Session Summary Question: Steps to drive ETF success and future opportunities - Management highlighted strong performance, scaling products, and investment in sales capabilities as keys to ETF success [28][30] Question: Update on private lending and investor appetite - Private market alternatives total approximately $20 billion, with OHA seeing $54 million in flows for the quarter [40] Question: Potential for alternative investments in U.S. retirement channels - Management believes there will eventually be access to private market alternatives in defined contribution plans [45] Question: Flows and sales momentum outlook - The flow outlook for the year is largely unchanged, with expectations for improvement relative to 2024 [55] Question: Fee rate dynamics and future expectations - The decrease in effective fee rate was driven by structural shifts towards lower-cost vehicles [62] Question: Capital allocation and inorganic growth opportunities - The company is considering share buybacks and M&A opportunities, particularly in private market alternatives [81][85]