T. Rowe Price Group Inc (TROW) Q3 2025 Earnings Call Highlights: Navigating Growth Amidst ...

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Assets Under Management (AUM): $1.77 trillion as of September 30, 2025. Adjusted Diluted Earnings Per Share (EPS): $2.81 for Q3 2025. Net Outflows: $7.9 billion in Q3 2025. Investment Advisory Fees: $1.7 billion, up over 4% from Q3 2024. Total Adjusted Revenues: $1.9 billion, up 6% over Q3 2024. Effective Fee Rate: 39.1 basis points, excluding performance-based fees. Adjusted Operating Expenses: $1.1 billion, up over 3% from Q3 2024. Cash and Discretionary Investments: Over $4.3 billion on the balance sheet. Share Buybacks: $158 million worth of shares repurchased in Q3 2025, totaling $484 million year-to-date.

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Release Date: October 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

T. Rowe Price Group Inc (NASDAQ:TROW) reported a high of $1.77 trillion in assets under management as of September 30, 2025. Long-term investment performance is solid, with over 50% of funds beating their peer groups on a 3-, 5-, and 10-year basis. The strategic collaboration with Goldman Sachs aims to deliver diversified public and private market solutions, enhancing offerings for retirement and wealth investors. Positive net flows were observed in fixed income, multi-asset, and alternatives, with strong demand for the target date franchise and ETF products. The company is actively managing expenses, with a broad expense management program in place to keep controllable expense growth in the low single digits for 2026 and 2027.

Negative Points

T. Rowe Price Group Inc (NASDAQ:TROW) experienced $7.9 billion in net outflows in Q3 2025, primarily driven by US equities. The effective fee rate decreased due to a shift to lower-priced vehicles and strategies, impacting revenue. The institutional pipeline is softer than in previous quarters, affecting future growth prospects. Performance in certain opportunistic funds was modestly below target, impacting overall results. The company incurred $28.5 million in nonrecurring costs related to severance and compensation, affecting short-term financials.

Q & A Highlights

Q: I wanted to ask about digital assets, I saw that you filed for a multi-token crypto ETF. How do you see crypto fitting into client portfolios, and what are your strategy and aspirations in the digital asset space? A: Eric Veiel, Chief Investment Officer, Head-Global Investment: We began our journey in digital assets in 2022, focusing on building expertise internally. We believe digital assets will offer both operational and investment alpha. Our upcoming ETF will be an important building block for clients. Demand for digital assets is growing, and we are confident in our innovative approach.

Story Continues

Q: Can you provide more details on the economic arrangements of the partnership with Goldman Sachs and how it might impact T. Rowe Price? A: Robert Sharps, Chairman of the Board, President, CEO: While I can't disclose specific economics, the arrangements are balanced and equitable, incentivizing both parties. T. Rowe Price will be the adviser for the sister series and multi-asset solutions, while Goldman Sachs will advise on model accounts. We are moving quickly to bring offerings to market.

Q: Could you discuss the current flow trends and expectations for the near term, particularly in US equities? A: Robert Sharps, Chairman of the Board, President, CEO: Our Q4 flow outlook is weaker, with higher equity redemptions due to rebalancing after strong market returns. However, we see positives in gross sales, strong flows in Retirement Date funds, global fixed income, and alternatives. OHA is having a record year in private credit, raising over $6 billion in commitments.

Q: Regarding the sister target series with Goldman, when will you start marketing these strategies to DC plan sponsors, and what is the expected substitution level from legacy strategies? A: Robert Sharps, Chairman of the Board, President, CEO: The sister series will launch in collective trust with initial clients. While clients understand the investment case, fees and fiduciary risk are concerns, especially among large plan sponsors. Uptake will be slow initially, but we aim to build a best-in-class product and track record as interest grows.

Q: Can you help gauge the potential sales from the co-branded, public-private, and managed account strategies? What does success look like in terms of AUM? A: Robert Sharps, Chairman of the Board, President, CEO: Wealth and retirement are large markets, and our aspirations are significantly greater than a couple of billion dollars over a few years. While initial offerings will take time to scale, we aim for substantial growth and success beyond just a few billion in AUM.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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