We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
T. Rowe Price Q2 Earnings Beat on High AUM, Revenues Fall, Stock Down
Read MoreHide Full Article
Key Takeaways
TROW posted Q2 adjusted EPS of $2.24, which topped estimates but slipped 1% year over year.
AUM climbed 6.9% to $1.68T, driven by $125.4B market gains, partly offset by $14.9B outflows.
Net revenues dipped to $1.72B while operating expenses rose 6.5% to $1.25B in the quarter.
T. Rowe Price Group, Inc.’s (TROW - Free Report) second-quarter 2025 adjusted earnings per share (EPS) of $2.24 beat the Zacks Consensus Estimate of $2.15. However, the bottom line decreased roughly 1% year over year.
TROW's results benefited from higher assets under management (AUM). On the other hand, lower investment advisory fees, higher expenses and negative capital allocation-based income were headwinds. In light of these concerns, shares of the company declined 1.3% in the pre-market trading session.
Net income attributable to T. Rowe Price (on a GAAP basis) was $505.2 million, which rose 4.5% from the prior-year quarter. Our estimate for the metric was $431.9 million.
TROW’s Revenues Decline, Expenses Rise
Net revenues fell marginally year over year to $1.72 billion. Further, the top line missed the Zacks Consensus Estimate of $1.74 billion.
Investment advisory fees declined slightly to $1.57 billion. Our estimate for investment advisory fees was $1.54 billion.
Capital allocation-based income declined to negative $0.4 million from $0.1 million in the prior-year quarter. Our estimate for capital allocation-based income was negative $1.7 million.
Total operating expenses increased 6.5% to $1.25 billion in the reported quarter. Our estimate for the metric was $1.17 billion. On an adjusted basis, operating expenses were $1.15 billion, up 3.7%.
TROW’s AUM Rises, Liquidity Position Strong
As of June 30, 2025, total AUM grew 6.9% year over year to $1.68 trillion. Our projection was $1.55 trillion.
In the second quarter, net market appreciation and income of $125.4 billion favorably impacted T. Rowe Price’s AUM, partially offset by net cash outflows of $14.9 billion.
The company had substantial liquidity, including cash and cash equivalents of $3.06 billion as of June 30, 2025, up from $2.65 billion as of Dec. 31, 2024. This will enable TROW to keep investing.
TROW’s Capital Distribution Activities
T. Rowe Price distributed a total of $395 million to shareholders through common stock dividends and share repurchases in the second quarter.
Our View on TROW
TROW’s solid AUM balance, broadening distribution reach and efforts to diversify business through acquisitions are likely to support top-line growth. However, an elevated expense base and excessive reliance on investment advisory fees are concerns. Further, the current tough operating environment is a headwind. Nonetheless, a solid liquidity position enables sustainable capital distributions.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
Lazard Inc.’s (LAZ - Free Report) second-quarter 2025 adjusted EPS of 52 cents beat the Zacks Consensus Estimate of 38 cents. This compared favorably with earnings of 49 cents per share in the year-ago quarter.
Lazard’s results were positively impacted by increases in revenues in the financial advisory and asset management sectors. A rise in AUM balances was another positive. However, a decrease in revenues in the corporate segment and elevated operating expenses acted as a spoilsport.
Invesco’s (IVZ - Free Report) second-quarter 2025 adjusted earnings of 36 cents per share lagged the Zacks Consensus Estimate of 40 cents. Moreover, the bottom line declined 16.3% from the prior-year quarter.
IVZ’s results were adversely impacted by higher adjusted operating expenses. However, a rise in adjusted net revenues was a tailwind. An increase in AUM balance due to solid inflows was a positive too.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
T. Rowe Price Q2 Earnings Beat on High AUM, Revenues Fall, Stock Down
Key Takeaways
T. Rowe Price Group, Inc.’s (TROW - Free Report) second-quarter 2025 adjusted earnings per share (EPS) of $2.24 beat the Zacks Consensus Estimate of $2.15. However, the bottom line decreased roughly 1% year over year.
TROW's results benefited from higher assets under management (AUM). On the other hand, lower investment advisory fees, higher expenses and negative capital allocation-based income were headwinds. In light of these concerns, shares of the company declined 1.3% in the pre-market trading session.
Net income attributable to T. Rowe Price (on a GAAP basis) was $505.2 million, which rose 4.5% from the prior-year quarter. Our estimate for the metric was $431.9 million.
TROW’s Revenues Decline, Expenses Rise
Net revenues fell marginally year over year to $1.72 billion. Further, the top line missed the Zacks Consensus Estimate of $1.74 billion.
Investment advisory fees declined slightly to $1.57 billion. Our estimate for investment advisory fees was $1.54 billion.
Capital allocation-based income declined to negative $0.4 million from $0.1 million in the prior-year quarter. Our estimate for capital allocation-based income was negative $1.7 million.
Total operating expenses increased 6.5% to $1.25 billion in the reported quarter. Our estimate for the metric was $1.17 billion. On an adjusted basis, operating expenses were $1.15 billion, up 3.7%.
TROW’s AUM Rises, Liquidity Position Strong
As of June 30, 2025, total AUM grew 6.9% year over year to $1.68 trillion. Our projection was $1.55 trillion.
In the second quarter, net market appreciation and income of $125.4 billion favorably impacted T. Rowe Price’s AUM, partially offset by net cash outflows of $14.9 billion.
The company had substantial liquidity, including cash and cash equivalents of $3.06 billion as of June 30, 2025, up from $2.65 billion as of Dec. 31, 2024. This will enable TROW to keep investing.
TROW’s Capital Distribution Activities
T. Rowe Price distributed a total of $395 million to shareholders through common stock dividends and share repurchases in the second quarter.
Our View on TROW
TROW’s solid AUM balance, broadening distribution reach and efforts to diversify business through acquisitions are likely to support top-line growth. However, an elevated expense base and excessive reliance on investment advisory fees are concerns. Further, the current tough operating environment is a headwind. Nonetheless, a solid liquidity position enables sustainable capital distributions.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
T. Rowe Price Group, Inc. price-consensus-eps-surprise-chart | T. Rowe Price Group, Inc. Quote
Currently, TROW sports a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of T. Rowe Price’s Peers
Lazard Inc.’s (LAZ - Free Report) second-quarter 2025 adjusted EPS of 52 cents beat the Zacks Consensus Estimate of 38 cents. This compared favorably with earnings of 49 cents per share in the year-ago quarter.
Lazard’s results were positively impacted by increases in revenues in the financial advisory and asset management sectors. A rise in AUM balances was another positive. However, a decrease in revenues in the corporate segment and elevated operating expenses acted as a spoilsport.
Invesco’s (IVZ - Free Report) second-quarter 2025 adjusted earnings of 36 cents per share lagged the Zacks Consensus Estimate of 40 cents. Moreover, the bottom line declined 16.3% from the prior-year quarter.
IVZ’s results were adversely impacted by higher adjusted operating expenses. However, a rise in adjusted net revenues was a tailwind. An increase in AUM balance due to solid inflows was a positive too.