Franklin Templeton (BEN) investor relations material

Executive summary

• FY26 ending AUM reached $1.795 trillion, up 8.1% YoY; long-term net inflows were $84.1 billion, a $181.5 billion improvement YoY.

• Long-term organic growth was 5.3%, with positive flows in every quarter, region, and client channel; Q4 long-term net inflows were $20.8 billion.

• Adjusted operating income rose 23.1% to $2.019 billion and adjusted margin expanded 350 bps to 28.0%; year two of the five-year plan finished on or ahead of targets.

• Won-but-unfunded institutional mandates remained strong at $22.0 billion.

Financial highlights

• Q4 adjusted revenue was $1.885 billion, up 3.7% QoQ and 3.8% YoY; adjusted operating income was $598.6 million, up 17.6% QoQ and 26.7% YoY.

• Q4 adjusted net income was $493.4 million and adjusted diluted EPS was $0.94; both rose 38.0% and 40.3% YoY, respectively.

• FY26 adjusted revenue was $7.201 billion, up 7.5%; adjusted net income rose 37.4% to $1.643 billion and adjusted diluted EPS rose 38.3% to $3.07.

• FY26 reported revenue was $9,415.3 million and operating income was $1,175.9 million; reported net income was $1,075.3 million and diluted EPS was $1.97.

• FY26 adjusted performance fees were $331.9 million, down 9.0% YoY; Q4 fees were $94.0 million, down 47.2% YoY and up 26.3% QoQ.

Outlook and guidance

• FY27 Q1 guidance assumes flat markets: effective fee rate stable in the mid-37 bps range; compensation and benefits ~$975 million, including ~$50 million of accelerated deferred awards and assuming $125 million of performance fees at a 55% payout.

• FY27 Q1 expense guidance: IS&T $165 million, occupancy ~$70 million, and G&A ~$185 million; FY27 tax rate 24%–26%, with Q1 at the lower end due to discrete items.

• At October 31 AUM levels and assuming flat markets, FY27 adjusted operating expenses excluding performance-fee compensation are expected in line with or slightly above FY26 at ~$5.1 billion; adjusted margin expected at ~30%.

• FY29 targets raised to $150 billion private-markets fundraising, $200 billion ETF AUM, and $100 billion Canvas AUM; adjusted margin goal lifted to 35% by Q4 FY29, assuming flat markets.

• FY27 alternative fundraising is expected in the mid-$30 billions; estimates exclude inorganic contributions and assume no particular flagship fund in FY28–FY29.