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 $28.0 billion in long-term net inflows and the Apera Asset Management acquisition.

• 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.

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

• 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.

• Strong client activity and momentum across a diversified global platform, with record AUM in three of four asset classes.

Financial highlights

• Adjusted operating income was $437.3 million, up 6% year-over-year but down 7% sequentially, impacted by lower performance fees and annual deferred compensation acceleration.

• Adjusted operating margin was 25.0%, compared to 26.0% in the prior quarter and 24.5% a year ago.

• Adjusted net income rose 5.8% sequentially and 18.1% year-over-year, reaching $378.4 million.

• Adjusted diluted EPS was $0.70, up from $0.67 in the prior quarter and $0.59 a year ago.

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

Outlook and guidance

• Expenses expected to remain flat year-over-year in 2026, with cost savings offsetting investments and continued expense discipline.

• Margin expansion anticipated in the third and fourth quarters, targeting high-20s percent by year-end, and 30%+ by fiscal 2027, assuming flat markets.

• Management remains focused on expense management, strategic investments in technology, and workforce optimization.

• Continued strategic investments in growth and innovation are planned.

• The company expects to continue regular dividends and opportunistic share repurchases, with a focus on investing in business growth and seed capital.