Franklin Resources (BEN) investor relations material

Executive summary

• Assets under management (AUM) reached a record $1.8 trillion, up 6.5% sequentially and 11.2% year-over-year, with $18.4 billion in net inflows for the quarter and $63.3 billion fiscal year-to-date, driven by positive markets and broad-based inflows across all asset classes and geographies.

• Adjusted operating income rose to $508.9 million, up 7% sequentially and 35% year-over-year, with adjusted operating margin improving to 28.0%.

• Net income for Q3 2026 was $171.5 million, up 86% year-over-year, though down sequentially.

• Investment performance remained strong, with 50% or more of mutual funds and ETFs AUM outperforming peer median across all periods.

• Ahead of five-year plan due to disciplined execution and diversified growth.

Financial highlights

• Operating revenues for Q3 2026 were $2.36 billion, up 14% year-over-year, and adjusted operating revenue was $1,816.6 million, up 3.7% sequentially and 14% year-over-year.

• Adjusted net income was $386.3 million for the quarter, up 47% year-over-year, with adjusted diluted EPS at $0.72, up 46.9% year-over-year.

• Returned $521.5 million to shareholders, including $348.1 million in share repurchases and $173.4 million in dividends.

• Dividends declared per share were $0.33, a 3% increase year-over-year.

• Catch-up fees for the quarter were $14 million.

Outlook and guidance

• Expect to end the year with $40 billion in private markets fundraising, up from the original $25–$30 billion target.

• Expenses projected to be 3–3.5% above FY2025, with margins expected to reach close to 30% in Q4 and 27%+ for FY2026; 2027 margin guidance is 29–30% assuming flat markets.

• Fiscal year 2026 expenses are expected to be slightly higher than fiscal year 2025 due to increased sales, fundraising, and incentive compensation.

• 2027 fundraising and expense guidance to be provided next quarter.

• Management remains focused on investment performance, expense management, and strategic investments in personnel and technology.