Franklin Resources (BEN) Q1 2026 earnings summary

Executive summary

• Assets under management (AUM) reached a record $1.68 trillion, up 1.4% from the prior quarter and 7% year-over-year, driven by $118.6 billion in long-term net inflows and the Apera Asset Management acquisition.

• Net income for the quarter was $255.5 million ($0.46 per diluted share), up 117% sequentially and 56% year-over-year; adjusted net income was $378.4 million ($0.70 per diluted share), up 6% sequentially and 18% year-over-year.

• Record long-term inflows of $118.6 billion, up 40% sequentially and 22% year-over-year, with positive net flows across equity, multi-asset, alternatives, ETFs, retail SMAs, and Canvas platforms.

• Diversified platform, innovation in technology (AI, blockchain), and strategic acquisitions fueled growth and deepened global client partnerships.

• Over half of mutual fund/ETF and strategy composite AUM outperformed peers and benchmarks over 3-, 5-, and 10-year periods.

Financial highlights

• Adjusted operating income was $437.3 million, up 6% year-over-year, with adjusted operating margin at 25.0% (up from 24.5% prior year); adjusted diluted EPS was $0.70, up 19% year-over-year.

• Operating revenues were $2,327.1 million, up 3% year-over-year; adjusted net income rose 18% to $378.4 million.

• Dividends of $0.33 per share were declared, a 3% increase year-over-year; 1.8 million shares were repurchased for $41.9 million.

• Cash and investments totaled $6.2 billion at quarter-end; senior debt outstanding was $2.2 billion.

• Effective investment management fee rate (excluding performance fees) was 40.6 bps; effective income tax rate was 23.2%.

Outlook and guidance

• Expenses are expected to remain flat year-over-year in 2026, with cost savings offsetting investments; margin expansion is targeted for the second half of the year, aiming for high-20s percent by year-end and 30%+ by fiscal 2027, assuming flat markets.

• Management remains focused on expense discipline, strategic investments in technology, and scaling solutions, ETFs, and Canvas to drive higher margins as AUM grows.

• Regular dividends and opportunistic share repurchases are expected to continue, with a focus on investing in business growth and seed capital.