T. Rowe Price Group (TROW) Q2 2024 earnings summary

Executive summary

• Assets under management (AUM) reached $1.57 trillion at June 30, 2024, up from $1.54 trillion in Q1, with net outflows of $3.7 billion in Q2, offset by market appreciation and improved flow trends.

• Adjusted diluted EPS was $2.26, up 11.9% year-over-year; diluted GAAP EPS was $2.11.

• Net revenues for Q2 2024 were $1.73 billion, up 7.6% year-over-year, driven by higher investment advisory fees.

• ETF AUM reached $5.3 billion, up from $1.2 billion a year ago, with strong inflows and rapid business growth.

• Strategic partnerships and new product launches, including ETFs and retirement solutions, expanded distribution and product reach.

Financial highlights

• Adjusted operating income rose 9.8% year-over-year to $655 million, with an adjusted operating margin of 37.2%.

• Adjusted operating expenses increased 7.8% year-over-year to $1.11 billion, mainly due to compensation and market-driven costs.

• Dividend per share was $1.24, with $761 million returned to shareholders in H1 2024 and $396 million in Q2 via dividends and buybacks.

• Investment advisory fees comprised about 90% of net revenue.

• Non-operating income was $80.3 million, down from $106.2 million in Q2 2023.

Outlook and guidance

• Management expects to substantially reduce net outflows in 2024 and aims for positive flows in 2025.

• 2024 adjusted operating expenses (ex-carried interest) are expected to rise 6%-8% over 2023, mainly due to higher equity markets.

• Full-year 2024 effective tax rate is guided to 23.5%-26.5% (GAAP) and 23.5%-25.5% (non-GAAP).

• Outflows in H2 are expected to be higher than Q2 run rate due to lumpy mandates, but well below 2023 levels.

• Continued investment in technology, distribution, and product innovation to support long-term growth.