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Franklin Stock Gains as Q2 Earnings Beat Estimates, Revenues Rise Y/Y
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Key Takeaways
Franklin reported Q2 EPS of 71 cents, beating estimates; shares rose 4.1% in early trading.
BEN revenues grew 8.7% Y/Y to $2.29B, driven by higher fees, despite a slight AUM decline.
Franklin's operating margin rose to 14.1% from 6.9% a year ago, reflecting improved efficiency.
Franklin Resources Inc. (BEN - Free Report) reported second-quarter fiscal 2026 (ended March 31, 2026) adjusted earnings of 71 cents per share, which surpassed the Zacks Consensus Estimate of 55 cents per share. Also, the bottom line compared favorably with 47 cents reported in the year-ago quarter.
Shares of the company gained nearly 4.1% in the early trading session following the release of better-than-expected results. A full day’s trading session will depict a clearer picture.
BEN’s results benefited from higher revenues. However, a slight decline in assets under management (AUM) and elevated expenses remained headwinds.
Results include certain items. After considering those, net income (GAAP basis) was $268.2 million, up 77.1% year over year.
Franklin’s Revenues & Expenses Increase Y/Y
Total operating revenues increased 8.7% year over year to $2.29 billion in the fiscal second quarter. The rise was due to an increase in all the components except other revenues. Further, the reported figure outpaced the Zacks Consensus Estimate of $2.18 billion.
Investment management fees rose 8.7% year over year to $1.82 billion. Sales and distribution fees increased 8.7% year over year to $396.6 million. Shareholder-servicing fees rose 11.4% on a year-over-year basis to $69 million. Other revenues decreased 9% year over year to $10 million.
Total operating expenses increased marginally year over year to $1.97 billion. The rise was due to an increase in compensation and benefits costs, sales, distribution and marketing costs, and general, administrative and other costs.
Franklin reported an operating margin of 14.1% compared with 6.9% in the year-ago quarter.
Franklin’s AUM Declines
As of March 31, 2026, total AUM was $1.68 trillion, down marginally on a sequential basis.
Franklin’s long-term net inflows were $16.9 billion in the reported quarter compared with $28 billion in the prior quarter.
The average AUM was $1.70 trillion, which increased 1.5% on a sequential basis.
Franklin’s Capital Position
As of March 31, 2026, cash and cash equivalents and investments were $6.2 billion, while total stockholders' equity was $13.1 billion.
Franklin’s Capital Distribution
In the reported quarter, Franklin repurchased 2.3 million shares for $57.1 million.
Major Developments for Franklin
In April 2026, the company announced plans to acquire 250 Digital, a cryptocurrency investment firm spun out of CoinFund, marking a strategic step to expand its footprint in the digital assets space. The acquisition combines Franklin’s global distribution strength with 250 Digital’s crypto-native investment expertise, including the transfer of its investment team and liquid cryptocurrency strategies.
The deal is expected to strengthen BEN’s digital asset management capabilities and position it to better serve institutional clients seeking crypto exposure. Alongside this, the company launched the Franklin Crypto unit, while the use of BENJI tokens for the transaction highlights an innovative blockchain-based approach. The deal is expected to close in the second calendar quarter of 2026, subject to customary conditions.
Our View on Franklin
Franklin’s improved revenues and stable operating performance reflect steady operational progress despite a slight decline in AUM. Its efforts to diversify business through acquisitions and strengthen its distribution platform continue to support long-term growth. However, elevated expenses and pressure on AUM may weigh on near-term performance.
Franklin Resources, Inc. Price, Consensus and EPS Surprise
BlackRock’s (BLK - Free Report) first-quarter 2026 adjusted earnings of $12.53 per share handily surpassed the Zacks Consensus Estimate of $11.96. The figure reflects a 10.9% rise from the year-ago quarter.
Results benefited from a rise in revenues. AUM balance witnessed robust year-over-year growth, driven by net inflows. However, higher expenses were a headwind for BLK.
Blackstone’s (BX - Free Report) first-quarter 2026 distributable earnings of $1.36 per share surpassed the Zacks Consensus Estimate of $1.33. The figure soared 25% from the prior-year quarter.
BX’s results benefited from a rise in AUM balance and higher revenues. However, an increase in GAAP expenses was the undermining factor.
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Franklin Stock Gains as Q2 Earnings Beat Estimates, Revenues Rise Y/Y
Key Takeaways
Franklin Resources Inc. (BEN - Free Report) reported second-quarter fiscal 2026 (ended March 31, 2026) adjusted earnings of 71 cents per share, which surpassed the Zacks Consensus Estimate of 55 cents per share. Also, the bottom line compared favorably with 47 cents reported in the year-ago quarter.
Shares of the company gained nearly 4.1% in the early trading session following the release of better-than-expected results. A full day’s trading session will depict a clearer picture.
BEN’s results benefited from higher revenues. However, a slight decline in assets under management (AUM) and elevated expenses remained headwinds.
Results include certain items. After considering those, net income (GAAP basis) was $268.2 million, up 77.1% year over year.
Franklin’s Revenues & Expenses Increase Y/Y
Total operating revenues increased 8.7% year over year to $2.29 billion in the fiscal second quarter. The rise was due to an increase in all the components except other revenues. Further, the reported figure outpaced the Zacks Consensus Estimate of $2.18 billion.
Investment management fees rose 8.7% year over year to $1.82 billion. Sales and distribution fees increased 8.7% year over year to $396.6 million. Shareholder-servicing fees rose 11.4% on a year-over-year basis to $69 million. Other revenues decreased 9% year over year to $10 million.
Total operating expenses increased marginally year over year to $1.97 billion. The rise was due to an increase in compensation and benefits costs, sales, distribution and marketing costs, and general, administrative and other costs.
Franklin reported an operating margin of 14.1% compared with 6.9% in the year-ago quarter.
Franklin’s AUM Declines
As of March 31, 2026, total AUM was $1.68 trillion, down marginally on a sequential basis.
Franklin’s long-term net inflows were $16.9 billion in the reported quarter compared with $28 billion in the prior quarter.
The average AUM was $1.70 trillion, which increased 1.5% on a sequential basis.
Franklin’s Capital Position
As of March 31, 2026, cash and cash equivalents and investments were $6.2 billion, while total stockholders' equity was $13.1 billion.
Franklin’s Capital Distribution
In the reported quarter, Franklin repurchased 2.3 million shares for $57.1 million.
Major Developments for Franklin
In April 2026, the company announced plans to acquire 250 Digital, a cryptocurrency investment firm spun out of CoinFund, marking a strategic step to expand its footprint in the digital assets space. The acquisition combines Franklin’s global distribution strength with 250 Digital’s crypto-native investment expertise, including the transfer of its investment team and liquid cryptocurrency strategies.
The deal is expected to strengthen BEN’s digital asset management capabilities and position it to better serve institutional clients seeking crypto exposure. Alongside this, the company launched the Franklin Crypto unit, while the use of BENJI tokens for the transaction highlights an innovative blockchain-based approach. The deal is expected to close in the second calendar quarter of 2026, subject to customary conditions.
Our View on Franklin
Franklin’s improved revenues and stable operating performance reflect steady operational progress despite a slight decline in AUM. Its efforts to diversify business through acquisitions and strengthen its distribution platform continue to support long-term growth. However, elevated expenses and pressure on AUM may weigh on near-term performance.
Franklin Resources, Inc. Price, Consensus and EPS Surprise
Franklin Resources, Inc. price-consensus-eps-surprise-chart | Franklin Resources, Inc. Quote
Currently, Franklin carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
BlackRock’s (BLK - Free Report) first-quarter 2026 adjusted earnings of $12.53 per share handily surpassed the Zacks Consensus Estimate of $11.96. The figure reflects a 10.9% rise from the year-ago quarter.
Results benefited from a rise in revenues. AUM balance witnessed robust year-over-year growth, driven by net inflows. However, higher expenses were a headwind for BLK.
Blackstone’s (BX - Free Report) first-quarter 2026 distributable earnings of $1.36 per share surpassed the Zacks Consensus Estimate of $1.33. The figure soared 25% from the prior-year quarter.
BX’s results benefited from a rise in AUM balance and higher revenues. However, an increase in GAAP expenses was the undermining factor.