Core Insights - Franklin Resources, Inc. (BEN) reported preliminary assets under management (AUM) of $1.71 trillion as of January 31, 2026, reflecting a 1.3% increase from the prior month, driven by market performance and long-term net inflows of $1.5 billion, despite $1.5 billion of long-term net outflows at Western Asset Management [1][10] Group 1: AUM Growth and Composition - The company recorded sequential growth across most asset classes, with equity assets rising 1.7% to $709.2 billion, fixed income AUM increasing slightly to $440.1 billion, alternative AUM rising nearly 1% to $276.2 billion, and multi-asset AUM growing 3.3% to $205.3 billion, while cash management balances declined marginally to $76 billion [2] - Franklin has experienced a steady rise in AUM over the years, with a compound annual growth rate (CAGR) of 3.1% over the last five fiscal years, despite declines in fiscal 2022 and fiscal 2025, continuing into the first month of fiscal 2026 [3] Group 2: Strategic Initiatives - The company is strengthening its asset management franchise through acquisitions and partnerships, including the acquisition of Apera Asset Management in October 2025, which added over $5.4 billion in AUM and expanded its global alternative credit platform [4] - Franklin's partnerships with Copenhagen Infrastructure Partners, DigitalBridge, and Actis in September 2025 broadened its private infrastructure offerings, while a partnership with Japan's SBI Holdings in July 2024 enhanced its ETF and digital asset capabilities [5] - The acquisition of Putnam Investments in January 2024 accelerated growth in the retirement space, increasing defined contribution AUM to over $100 billion, broadening BEN's reach in separately managed accounts [5] Group 3: Market Position and Competitors - Franklin's focus on alternatives and multi-asset offerings, along with a regionally focused distribution model, supports favorable non-U.S. net flows, positioning the company for sustained AUM growth [6] - Competitors such as Invesco Ltd. (IVZ) and T. Rowe Price Group (TROW) are also witnessing steady AUM growth, with Invesco achieving a five-year CAGR of 10% and T. Rowe Price registering a CAGR of 3.8% over the past five years [7][9]

Company Overview - Franklin Resources, Inc. is a global investment management company headquartered in San Mateo, CA, primarily generating revenue from investment management services for retail mutual funds, institutional, and high-net-worth investors worldwide [11]. Zacks Rank and Style Scores - Franklin Resources has a Zacks Rank of 3 (Hold) and a VGM Score of B, indicating a moderate investment outlook [12]. - The company has a Momentum Style Score of A, with shares increasing by 7.5% over the past four weeks [12]. - For fiscal 2026, three analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate rising by $0.03 to $2.54 per share [12]. - Franklin Resources has an average earnings surprise of +11.7%, suggesting a positive trend in earnings performance [12]. Investment Considerations - With a solid Zacks Rank and strong Momentum and VGM Style Scores, Franklin Resources is recommended for investors' consideration [13].

Financial Performance - Franklin Resources, Inc. reported adjusted earnings per share of $0.70 for Q1 2026, exceeding the average estimate of $0.55 by $0.15 [1] - The company's revenue reached $2.37 billion, significantly above the consensus forecast of $1.71 billion and up 3% from $2.25 billion in the same period last year [1] Net Inflows and Growth - Long-term net inflows, excluding Western Asset Management, totaled $34.6 billion, a substantial increase from $17.9 billion in the year-ago quarter, indicating strong organic growth [3] - The alternatives business was a key growth driver, raising $10.8 billion in the quarter, which included $9.5 billion in private market assets [4] Assets Under Management - Franklin's ETF platform achieved an all-time high of $58 billion in assets under management, with $7.5 billion in net flows during the quarter [4] - The company operates globally under the Franklin Templeton umbrella, serving clients in over 150 countries [4]

Group 1 - The article highlights Ian Bezek's background as a former hedge fund analyst and his expertise in Latin American markets, particularly Mexico, Colombia, and Chile [2] - Ian Bezek specializes in identifying high-quality compounders and growth stocks at reasonable prices in the US and other developed markets [2] - The investing group led by Ian, called Ian's Insider Corner, offers features such as a Weekend Digest, trade alerts, and direct access to Ian for members [2] Group 2 - The article does not provide any specific financial data or performance metrics related to companies or industries [3][4]

Core Insights - Franklin Templeton reported record long-term inflows of $118.6 billion, a 40% increase from the prior quarter and a 22% increase from the prior-year quarter, with long-term net inflows of $28 billion and AUM reaching $1.68 trillion [1][7] - The firm is experiencing a trend where clients are engaging across multiple asset classes rather than purchasing individual products in isolation, reflecting a consolidation among asset managers [2] - CEO Jenny Johnson noted that investors are navigating a "continued transition" marked by global market turbulence, leading clients to seek partners that can help construct diversified portfolios [3][4] Financial Performance - Franklin Templeton achieved strong long-term inflows and record AUM across several categories, with management highlighting progress on cost savings and operating margin goals despite a volatile macro backdrop [4] - The company reiterated a $200 million cost-savings target, with about 20% achieved in Q1, and expects operating margin expansion to the high twenties by Q3/Q4 under flat markets [5][18] - Adjusted Operating Income was reported at $437.3 million, attributed to lower performance fees and higher average AUM [16] Asset Management and Fundraising - Alternatives remain a significant growth driver, with alternative AUM hitting $274 billion and the firm raising $10.8 billion during the quarter, including $9.5 billion in private markets [6][9] - In public markets, equity, multi-asset, and alternatives generated $30.4 billion of positive net flows, with equity net inflows of $19.8 billion [8] - The firm reported continued growth in ETFs, with the ETF platform reaching $58 billion in AUM and delivering $7.5 billion in net flows for the quarter [12] Product and Platform Developments - Franklin Templeton Private Markets generated over $1 billion in sales during the quarter, with notable contributions from Lexington, Benefit Street Partners, and Clarion Partners [10] - The firm has incorporated private assets into traditional mutual funds for over a decade, managing approximately 60 products with about $160 billion in traditional mutual fund assets exposed to private markets [11] - In digital assets, the firm reported $1.8 billion in AUM, including about $900 million in tokenized funds and $800 million in crypto ETFs [14] Strategic Outlook - CFO Matthew Nicholls indicated that 35% to 40% of expenses are variable, providing flexibility in case of market declines, and guided for margin expansion primarily in the third and fourth quarters [18] - The firm highlighted the successful closing of Lexington Co-Investment Partners VI with $4.6 billion in committed capital and the acquisition of Apera Asset Management, enhancing European direct lending capabilities [19]

Core Insights - Franklin Resources Inc. reported first-quarter fiscal 2026 adjusted earnings of 70 cents per share, exceeding the Zacks Consensus Estimate of 55 cents per share and improving from 59 cents in the same quarter last year [1][10] - The company's shares rose by 1.7% in early trading following the release of these results [1] Financial Performance - Total operating revenues increased by 3.3% year over year to $2.33 billion, surpassing the Zacks Consensus Estimate of $2.15 billion [3] - Investment management fees rose by 2.7% year over year to $1.85 billion, while sales and distribution fees increased by 3.5% to $388.7 million [4] - Shareholder-servicing fees saw an 11.6% year-over-year increase to $70.9 million, and other revenues surged by 47.4% to $19.6 million [4] - Total operating expenses increased nearly 1% year over year to $2.05 billion, with the rise attributed to various components except for occupancy costs and amortization of intangible assets [4] - The operating margin improved to 12.1% compared to 9.7% in the year-ago quarter [5] Assets Under Management (AUM) - As of December 31, 2025, total AUM was $1.68 trillion, reflecting a 1.4% sequential increase [6][10] - Long-term net inflows were $28 billion in the reported quarter, a significant improvement from an outflow of $11.9 billion in the prior quarter [6][10] - The average AUM increased by 2.6% on a sequential basis to $1.67 trillion [6] Capital Position and Distribution - As of December 31, 2025, cash and cash equivalents and investments totaled $6.2 billion, while total stockholders' equity was $13.1 billion [7] - In the reported quarter, the company repurchased 1.8 million shares for $41.9 million [8] Strategic Developments - In October 2025, the company completed the acquisition of Apera Asset Management, significantly expanding its alternative credit assets under management by over $90 billion [11][12] - This acquisition enhances Franklin's global alternative credit platform, broadening its geographic reach and private credit expertise [12] Overall Assessment - Franklin's rising AUM, improved revenues, and disciplined expense management indicate steady operational progress [13] - The company's efforts to diversify through acquisitions and strengthen its distribution platform support long-term growth [13]

Financial Data and Key Metrics Changes - The company reported record long-term inflows of $118.6 billion, up 40% from the prior quarter and 22% from the prior year quarter [7] - Assets under management (AUM) ended the quarter at $1.68 trillion, reflecting an increase due to long-term net inflows and the acquisition of Apera [8] - Adjusted Operating Income was $437.3 million, influenced by lower performance fees and higher average AUM [19] Business Line Data and Key Metrics Changes - Long-term net inflows were $28 billion, with record AUM and positive net flows across equity, multi-asset, and alternative strategies [8] - Public markets generated positive net flows totaling $30.4 billion, with equity net inflows of $19.8 billion for the quarter [9] - Private markets saw $10.8 billion raised during the quarter, including $9.5 billion in private market assets [10] Market Data and Key Metrics Changes - The institutional pipeline of long, but unfunded mandates remains strong at $20.4 billion, indicating sustained demand for investment capabilities [9] - The ETF platform reached a new high with $58 billion in AUM, generating $7.5 billion in net flows, marking its 17th consecutive positive quarter [15] - Digital assets AUM is $1.8 billion, including approximately $900 million in tokenized funds and approximately $800 million in crypto ETFs [17] Company Strategy and Development Direction - The company is focused on delivering integrated solutions and long-term strategic relationships, aligning with client needs for resilience in portfolios [4][6] - M&A activities are aimed at filling product gaps and enhancing distribution capabilities, with a focus on alternatives and high net worth segments [36][37] - The company is leveraging advancements in technology, including AI and blockchain, to enhance operational efficiency and client offerings [17][88] Management's Comments on Operating Environment and Future Outlook - Management noted significant market turbulence and economic uncertainty, emphasizing the need for resilience in investment portfolios [4] - The company is confident in its diversified business model and global scale to capture long-term trends reshaping the industry [20] - Management highlighted the importance of AI in driving efficiency and potential consolidation in the asset management industry [76][80] Other Important Information - The company has been recognized as one of the best places to work in money management, reflecting its commitment to employee engagement [20] - The firm is actively expanding its private credit platform and has seen strong momentum in fundraising across various asset classes [11][13] Q&A Session Summary Question: Cost Flexibility and Savings - Management indicated that expenses are expected to be in line with 2025, with a focus on achieving $200 million in cost savings [22][23] Question: M&A Activity and Contingent Liabilities - Management confirmed that contingent consideration related to recent transactions is minimal, with no significant liabilities expected [26][27] Question: Long-term Margin Expectations - Management projected operating margins to exceed 30% by fiscal 2027, with ongoing efforts to streamline operations and integrate acquisitions [46][47] Question: AI's Impact on Consolidation - Management discussed how AI could drive consolidation in the asset management industry, emphasizing the need for scale to compete effectively [76][78] Question: Blockchain and Tokenization Strategy - Management highlighted the efficiency of blockchain technology and its potential to reduce operational costs significantly, while also discussing the hurdles to broader adoption [86][88]

Financial Data and Key Metrics Changes - The company reported record long-term inflows of $118.6 billion, up 40% from the prior quarter and 22% from the prior year quarter [7] - Long-term net inflows were $28 billion, with assets under management (AUM) ending the quarter at $1.68 trillion, reflecting an increase due to long-term net inflows and the acquisition of Apera [8] - Adjusted Operating Income was $437.3 million, influenced by lower performance fees and higher average AUM [19] Business Line Data and Key Metrics Changes - Public markets generated positive net flows totaling $30.4 billion, with equity net inflows of $19.8 billion for the quarter [9] - Fixed Income delivered its eighth consecutive quarter of positive net flows, with net inflows of $2.6 billion driven by Franklin Templeton Fixed Income [9] - Private markets saw $274 billion in alternative AUM, with $10.8 billion raised during the quarter, including $9.5 billion in private market assets [10] Market Data and Key Metrics Changes - The institutional pipeline of long, but unfunded mandates remains strong at $20.4 billion, indicating sustained demand for investment capabilities [9] - The ETF platform reached a new high with $58 billion in AUM, generating $7.5 billion in net flows, marking its 17th consecutive positive quarter [15] - Multi-asset AUM is nearly $200 billion, with net inflows of $4 billion during the quarter, reflecting clients' increasing preference for diversified solutions [14] Company Strategy and Development Direction - The company is focused on delivering integrated solutions and long-term strategic relationships, aligning with client needs for resilience in portfolios [6] - Recent M&A activity emphasizes the importance of alternative assets, with strategic acquisitions aimed at enhancing capabilities and geographic reach [12] - The company aims to double the size of fiduciary services in its five-year plan, focusing on both organic and inorganic growth [36] Management's Comments on Operating Environment and Future Outlook - Management highlighted the ongoing transition for investors amid significant market turbulence and economic uncertainty, emphasizing the need for durable returns and risk management [4] - The company is well-positioned to capture long-term trends reshaping the industry across public and private markets, with a focus on innovation and efficiency [20] - Management expressed confidence in achieving a margin of over 30% by fiscal 2027, supported by disciplined expense management and strategic investments [46][66] Other Important Information - The company is advancing its AI initiatives, including the launch of Intelligence Hub, aimed at modernizing distribution and enhancing client experience [17] - Digital assets are becoming increasingly important, with $1.8 billion in digital asset AUM, including tokenized funds and crypto ETFs [17] - The company has been recognized as one of the best places to work in money management, reflecting its commitment to employee engagement and client service [20] Q&A Session Questions and Answers Question: Cost Flexibility and Savings - Management indicated that expenses are expected to remain in line with 2025 guidance, with ongoing cost savings initiatives contributing to margin expansion in the latter half of the year [23][24] Question: M&A Activity and Contingent Liabilities - Management confirmed that contingent consideration related to recent transactions is minimal, with no significant liabilities expected from closed deals [27][30] Question: Long-term Margin Expectations - Management projected that operating margins could exceed 30% by fiscal 2027, with ongoing integration efforts and strategic initiatives contributing to profitability [46][66] Question: AI's Impact on Consolidation - Management noted that AI could drive consolidation in the asset management industry, as smaller managers may struggle to compete without the scale and data resources required for effective model training [76][80] Question: Blockchain and Tokenization Strategy - Management highlighted the efficiency of blockchain technology, noting significant cost savings compared to traditional systems, and expressed optimism about the future adoption of tokenized funds [86][88]

Financial Data and Key Metrics Changes - The company reported record long-term inflows of $118.6 billion, up 40% from the prior quarter and 22% from the prior year quarter [5] - Assets under management (AUM) ended the quarter at $1.68 trillion, increasing from the prior quarter due to long-term net inflows and the acquisition of Apera [6][7] - Adjusted Operating Income was $437.3 million, reflecting lower performance fees and the impact of higher average AUM [18] Business Line Data and Key Metrics Changes - Long-term net inflows were $28 billion, with record AUM and positive net flows across equity, multi-asset, and alternative strategies [6] - Public markets generated positive net flows totaling $30.4 billion for the quarter, with equity net inflows of $19.8 billion [8] - Private markets saw $274 billion in alternative AUM, with $10.8 billion raised during the quarter, including $9.5 billion in private market assets [9] Market Data and Key Metrics Changes - The institutional pipeline of long, but unfunded mandates remains strong at $20.4 billion, indicating sustained demand for investment capabilities [8] - The ETF platform reached a new high with $58 billion in AUM, generating $7.5 billion in net flows, marking its 17th consecutive positive quarter [14] - Multi-asset AUM is nearly $200 billion, with net inflows of $4 billion during the quarter, marking the 18th consecutive quarter of positive net flows [12] Company Strategy and Development Direction - The company is focused on deepening client partnerships, broadening investment capabilities, and strengthening its global platform [5] - There is a strategic emphasis on integrated solutions and long-term relationships, reflecting a shift in client expectations [4] - The company aims to grow its fiduciary business and expand its private credit platform, with a focus on geographic and capability enhancements through M&A [10][35] Management's Comments on Operating Environment and Future Outlook - Management noted significant market turbulence and economic uncertainty, leading to a need for resilience in portfolios [3] - The company is well-positioned to capture long-term trends reshaping the industry across public and private markets [19] - Management expressed confidence in achieving a margin of over 30% by fiscal 2027, with ongoing investments in growth and innovation [44][46] Other Important Information - The company has been recognized as one of the best places to work in money management, highlighting its commitment to employee satisfaction [19] - The digital asset AUM is $1.8 billion, including approximately $900 million in tokenized funds and $800 million in crypto ETFs [16] Q&A Session All Questions and Answers Question: How much flexibility does the company have to reduce expenses if markets come under pressure? - Management indicated that expenses are expected to be in line with 2025, with key investments offset by expense savings [23] Question: Can you provide an update on potential contingent consideration liabilities from recent M&A activity? - Management confirmed that the contingent consideration around specific transactions is very low at this stage, with no additional liabilities to report [26][28] Question: What are the company's expectations for EFR in the coming quarters? - Management expects EFR to be stable in the next quarter, with potential upside based on fundraising around alternative assets [39] Question: How does the company view long-term profitability and margin targets? - Management aims for margins to exceed 30% by fiscal 2027, with ongoing efforts to streamline products and integrate acquisitions [44][46] Question: How is AI expected to impact the asset management industry and the company's M&A strategy? - Management believes that AI will drive consolidation in the industry, making it difficult for smaller managers to compete due to the scale required for data acquisition and model training [72][74]

First Quarter 2026 Results Franklin Resources, Inc. January 30, 2026 | Investor Presentation Jenny Johnson Chief Executive Officer Daniel Gamba Co-President Chief Commercial Officer Matthew Nicholls Co-President CFO & COO Forward-looking statements and non-GAAP financial information This commentary contains forward-looking statements that involve a number of known and unknown risks, uncertainties and other important factors. This commentary also contains non-GAAP financial measures. For the reconciliations ...