T. Rowe Price Group (TROW) Q2 2025 earnings summary

Executive summary

• Assets under management (AUM) reached $1.68 trillion as of June 30, 2025, up $110.5 billion from the previous quarter, driven by market appreciation despite $14.9 billion in net outflows, mainly from U.S. equities.

• Net income for Q2 2025 was $505.2 million, with diluted and adjusted EPS at $2.24, reflecting stable or slightly improved earnings year-over-year.

• Net revenues for Q2 2025 were $1.72 billion, down 0.6% year-over-year and 2.3% sequentially, with investment advisory fees comprising over 90% of net revenue.

• Management is focused on long-term growth, cost control, and expanding ETF and retirement businesses, with ongoing investment in technology and digital assets.

• $395 million was returned to shareholders in Q2 2025 through dividends and share repurchases.

Financial highlights

• Operating income for Q2 2025 was $478.3 million, down from $564.7 million in Q2 2024; operating margin declined to 27.8% from 32.6%.

• Adjusted operating expenses rose 3.7% year-over-year to $1,147.2 million, with total operating expenses at $1.25 billion, up 6.5%.

• Investment advisory fees for Q2 2025 were $1,567.6 million, nearly flat year-over-year; performance-based fees dropped 61.9% to $6.4 million.

• Non-operating income surged to $235.5 million in Q2 2025 from $80.3 million a year ago, mainly from investment gains.

• Dividend per share was $1.27, unchanged from Q1 2025 and up from $1.24 in Q2 2024.

Outlook and guidance

• Outflows are expected to remain concentrated in U.S. equities, with target date and alternatives anticipated as inflow sources; July flows were roughly flat to slightly negative.

• 2025 adjusted operating expenses (excluding carried interest) expected to rise 2–4% over 2024, with non-market-driven expense growth targeted in the low single digits for 2026 and 2027.

• Full-year 2025 effective tax rate is estimated at 23.5%–27.5% (GAAP) and 24.0%–27.0% (adjusted).

• Expense management program includes role reductions, vendor partnerships, and real estate optimization.

• Ongoing plans to reduce expense growth while investing in business capabilities and client reach.