T. Rowe Price Group (TROW) Q1 2025 earnings summary

Executive summary

• Q1 2025 net revenues were $1.76 billion, up 0.8% year-over-year but down 3.3% sequentially, with net income of $490.5 million and diluted EPS of $2.15; adjusted EPS was $2.23.

• Assets under management ended at $1.57 trillion, down $40.3 billion from the prior quarter, with net client outflows of $8.6 billion, mainly from U.S. equities, partially offset by $6.3 billion in target date inflows.

• Value equity and fixed income strategies outperformed, while target date and multi-asset products saw strong inflows; alternatives AUM was $53 billion with net outflows after manager-driven distributions.

• The firm expanded global retirement solutions, launched new products, and began occupying its new headquarters in Baltimore.

• $506 million was returned to shareholders in Q1 2025 via dividends and share repurchases, with the quarterly dividend increased to $1.27.

Financial highlights

• Adjusted EPS for Q1 2025 was $2.23, down from $2.38 in Q1 2024 but up from $2.12 in Q4 2024; net income was $490.5 million, down 14.5% year-over-year.

• Net outflows totaled $8.6 billion, primarily from U.S. equities, partially offset by inflows in target date and fixed income products.

• Adjusted net revenue was $1.8 billion, with investment advisory revenue rising 4% year-over-year to $1.6 billion.

• Adjusted operating expenses (excluding carried interest) rose 7.4% year-over-year, but fell 7.2% sequentially; adjusted operating margin was 36.4%.

• Non-operating income fell to $70.7 million from $188.9 million in Q1 2024.

Outlook and guidance

• 2025 adjusted operating expenses (excluding carried interest) are expected to rise 1%-3% over 2024, down from prior 4%-6% guidance.

• Management expects continued pressure on net flows, especially in U.S. equities, but sees opportunities in target date and alternatives; $17.1 billion in unfunded capital commitments may transition to fee-basis AUM.

• Full-year 2025 effective tax rate is expected to be 23.5%–27.5% (GAAP) and 24.0%–27.0% (adjusted); capital expenditures projected at $282 million, with 85% for technology.

• Expense growth guidance reflects market-driven adjustments and tighter management of controllable costs.

• The company remains focused on investing in key capabilities and maintaining ample liquidity to pursue growth opportunities.