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 ...

分组1 - Franklin Resources reported quarterly earnings of $0.7 per share, exceeding the Zacks Consensus Estimate of $0.55 per share, and showing an increase from $0.59 per share a year ago, resulting in an earnings surprise of +28.21% [1] - The company achieved revenues of $2.33 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 8.45%, and up from $2.25 billion year-over-year [2] - Franklin Resources has outperformed the S&P 500 with an 8.3% increase in share price since the beginning of the year, compared to the S&P 500's gain of 1.8% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.57 on revenues of $2.13 billion, and for the current fiscal year, it is $2.46 on revenues of $8.58 billion [7] - The Zacks Industry Rank for Financial - Investment Management is in the bottom 31% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - Operating revenues for the three months ended December 31, 2025, were $2,327.1 million, reflecting a 3% increase compared to $2,251.6 million in the same period of 2024[69]. - Net income attributable to Franklin Resources, Inc. for the same period was $255.5 million, a significant 56% increase from $163.6 million in the prior year[69]. - The company’s diluted earnings per share increased by 59% to $0.46 from $0.29 year-over-year[69]. - The adjusted operating income for the three months ended December 31, 2025, was $437.3 million, a 6% increase from $412.8 million in the prior year[69]. - Total operating revenues increased by 3% to $2,327.1 million for the three months ended December 31, 2025[84]. - Adjusted net income rose to $378.4 million in Q4 2025, compared to $320.5 million in Q4 2024, marking an increase of 18.0%[123]. - Diluted earnings per share increased to $0.46 in Q4 2025 from $0.29 in Q4 2024, a growth of 58.6%[123]. Assets Under Management (AUM) - Total assets under management (AUM) as of December 31, 2025, reached $1,684.0 billion, a 1% increase from September 30, 2025, and a 7% increase from December 31, 2024[66]. - Average AUM for the three months ended December 31, 2025, was $1,676.1 billion, a 3% increase from $1,634.5 billion in the same period of 2024[71]. - AUM by asset class showed a 12% increase in equity to $697.2 billion, while fixed income decreased by 7% to $437.7 billion[70]. - AUM in the United States increased by 8% to $1,195.7 billion as of December 31, 2025[77]. - Long-term inflows increased by 22% to $118.6 billion compared to the prior period, driven by higher inflows in equity open-end funds and alternative private funds[75]. - Long-term outflows decreased by 38% to $90.6 billion, primarily due to lower outflows across multiple fixed income vehicles[75]. Expenses and Cost Management - Total operating expenses for the three months ended December 31, 2025, were $2,046.1 million, a 1% increase from $2,032.6 million in 2024[1]. - Compensation and benefits expenses rose to $1,030.7 million, reflecting a 4% increase from $991.4 million in the prior year, driven by higher incentive compensation and annual salary increases[1][2]. - Sales, distribution, and marketing expenses totaled $540.9 million, a 6% increase from $512.3 million, mainly due to a rise in asset-based expenses[1][4]. - The company remains focused on expense management while investing strategically in systems and technology to support its evolving business[68]. Cash Flow and Investments - Operating cash flows for Q4 2025 were $(255.1) million, compared to $(145.2) million in Q4 2024, indicating a decline in cash flow[124]. - Cash and cash equivalents decreased to $2,636.6 million as of December 31, 2025, down from $3,050.1 million at September 30, 2025[127]. - The company has $500.0 million of short-term commercial paper available for issuance under an uncommitted private placement program[135]. - The total aggregate commitments under the Credit Agreement increased by $400.0 million to $1.5 billion as of December 31, 2025[133]. - The investment portfolio included $451.9 million in alternative investments, $344.1 million in equity investments, and $211.6 million in fixed income investments[143]. Acquisitions and Strategic Initiatives - The acquisition of Apera Asset Management, a pan-European private credit firm, was completed on October 1, 2025[67]. - The acquisition of Apera Asset Management was completed for €65.2 million, with potential additional payments of up to €125.0 million based on revenue targets[140]. Tax and Other Income - The effective income tax rate decreased to 23.2% from 25.9%, primarily due to excess tax benefits related to stock-based compensation and a higher proportion of foreign earnings in lower-tax jurisdictions[1][7]. - Other income, net increased to $170.8 million, an 81% rise from $94.2 million, largely due to gains on investments and a strategic investment dividend[1][6]. - Dividend and interest income increased by 27% to $54.6 million, driven by a dividend from a strategic investment[1][9]. Workforce and Employment - The global workforce decreased to approximately 9,900 employees from 10,100 in the prior year, reflecting cost-saving initiatives[1][8].

Financial Performance - Net income for the quarter ended December 31, 2025, was $255.5 million, or $0.46 per diluted share, representing a 117% increase from the previous quarter and a 56% increase year-over-year[3] - Adjusted net income was $378.4 million, with adjusted diluted earnings per share at $0.70, reflecting a 6% increase from the previous quarter and an 18% increase year-over-year[3] - Operating income for the quarter was $281.0 million, a 229% increase from the previous quarter and a 28% increase year-over-year[3] - Net income attributable to Franklin Resources, Inc. increased by 117% to $255.5 million from $117.6 million in the prior quarter[14] - The company reported a total operating revenue of $2,327.1 million for the three months ended December 31, 2025[25] - Adjusted net income for the same period was $378.4 million, compared to $357.5 million in the previous quarter and $320.5 million a year ago, reflecting a year-over-year increase of 18%[26] - Diluted earnings per share increased to $0.46 from $0.21 in the previous quarter and $0.29 a year ago, while adjusted diluted earnings per share rose to $0.70 from $0.67 and $0.59 respectively[26] Assets Under Management (AUM) - Total Assets Under Management (AUM) reached $1,684.0 billion, up $22.8 billion during the quarter, driven by $28.0 billion in long-term net inflows[7] - Average assets under management (AUM) for the three-month period was $1,676.1 billion, reflecting a 3% increase from $1,633.7 billion in the previous quarter[16] - Ending AUM as of December 31, 2025, was $1,684.0 billion, up 1% from $1,661.2 billion at the end of the previous quarter[16] - Total Assets Under Management (AUM) increased to $1,684.0 billion as of December 31, 2025, up from $1,661.2 billion at September 30, 2025, representing a growth of 1.4%[18] - The AUM at October 1, 2025, was $1,661.2 billion, with equity accounting for $686.2 billion, fixed income $438.7 billion, and alternatives $263.9 billion[18] Long-term Net Flows - Long-term net inflows included $28.9 billion of long-term reinvested distributions, with record AUM and positive flows across equity, multi-asset, and alternatives strategies[3] - Long-term net flows for the quarter were $28.0 million, a significant improvement compared to a net outflow of $50.0 million in the same period last year[15] - Long-term inflows for the three months ended December 31, 2025, totaled $118.6 billion, while long-term outflows were $90.6 billion, resulting in a net inflow of $28.0 billion[18] Fundraising and Investments - Alternatives fundraising contributed significantly, raising $10.8 billion during the quarter, including $9.5 billion in private market assets[4] - The company’s retail SMA AUM increased to over $170 billion, with $2.4 billion in net inflows[6] - The acquisition of Apera Asset Management contributed $6.1 billion to AUM, enhancing direct lending capabilities in Europe[5] Operational Efficiency - The operating margin improved to 12.1% from 3.6% in the prior quarter, indicating enhanced operational efficiency[14] - Adjusted operating income for the three months ended December 31, 2025, was $437.3 million, an increase from $412.8 million in the same period last year[25] - Adjusted operating margin for the three months ended December 31, 2025, was 25.0%, compared to 24.5% in the same period last year[25] Shareholder Returns - The company declared a dividend of $0.33 per share, a 3% increase from $0.32 per share in the previous quarter[14] - The company repurchased 1.8 million shares of common stock for a total cost of $41.9 million during the quarter[8] Market Conditions and Risks - Forward-looking statements indicate potential risks including market volatility and competition, which may impact future performance[30] - The company anticipates continued focus on strategic partnerships and innovation to align with clients' goals and navigate market changes[28]

Company Overview - Franklin Resources, Inc. (BEN) has a market capitalization of $13.4 billion and operates primarily through its flagship brand Franklin Templeton, managing a diverse range of investment products for individual, institutional, and high-net-worth investors globally [1] Stock Performance - Over the past year, BEN shares have increased by 29.1%, significantly outperforming the S&P 500 Index, which has risen by 15.4%. However, in the last six months, BEN's stock has only climbed 5.3%, underperforming the S&P 500's 9.4% increase [2] - BEN has also outperformed the iShares U.S. Financial Services ETF (IYG), which gained 8.8% over the past year and 3.4% over the past six months [3] Recent Developments - On January 22, Franklin Resources shares rose by 1.2% following the launch of the Templeton Emerging Markets Debt ETF (TEMD), which aims to provide income and capital appreciation from emerging market debt while managing currency risk [4] Earnings Expectations - For the current fiscal year ending in September, analysts expect BEN's earnings per share (EPS) to improve by 10.8% year over year to $2.46. The company has a strong earnings surprise history, having beaten or matched consensus estimates in the last four quarters [5] Analyst Ratings - The consensus rating among 12 analysts covering BEN stock is a "Hold," consisting of three "Moderate Buys," four "Holds," one "Moderate Sell," and four "Strong Sells" [5] - Barclays analyst Benjamin Budish raised his price target on Franklin Resources to $25 from $22, representing a 13.64% increase, while maintaining an "Underweight" rating [6]

Core Insights - Franklin Resources Inc. (BEN) is expected to report a decline in both earnings and revenues for the first quarter of fiscal 2026, with earnings estimated at 56 cents per share, down 5.1% year-over-year, and sales projected at $2.15 billion, reflecting a 4.5% decline from the previous year [1][3][9] Financial Performance - In the last reported quarter, Franklin's earnings exceeded the Zacks Consensus Estimate, driven by higher revenues and improved assets under management (AUM), alongside lower expenses [1][2] - The average earnings surprise for BEN over the last four quarters has been 7.74%, with three quarters beating estimates and one matching [2] Market Conditions - The S&P 500 Index gained approximately 3.1% during the October-December quarter, indicating moderate market performance, which likely benefited Franklin's results through healthy equity returns and steady fixed-income inflows [6] - Despite favorable market conditions, BEN is anticipated to have continued experiencing net outflows, with preliminary AUM as of December 31, 2025, reported at $1.68 trillion, a slight increase from $1.67 trillion in November, but still reflecting long-term net outflows of $1 billion [7] Revenue Estimates - The consensus estimate for investment management fees is $1.7 billion, indicating an 8.7% sequential decline, while sales and distribution fees are estimated at $371 million, reflecting a 2.9% decline [8][10] - Shareholder servicing fees are projected at $62.8 million, suggesting a significant 20.7% decline from the previous quarter [10] Strategic Developments - In November 2025, Franklin partnered with Wand AI to implement agentic AI across its global platform, enhancing investment research and operational efficiency [4] - The acquisition of Apera Asset Management in October 2025 expanded BEN's alternative credit assets under management by over $90 billion, strengthening its capabilities in the European lower middle market [5]

Company Overview - Franklin Templeton's U.S. and European alternative credits businesses, Benefit Street Partners and Alcentra, have merged under the brand Benefit Street Partners (BSP) [1] - The integration aims to unify the two credit firms acquired in 2019 and 2022, enhancing their global platform [1] Strategic Goals - BSP plans to pursue both inorganic and organic growth over the next five years, with a focus on acquisitions in attractive areas of the alternative credit landscape [2] - The firm is considering expansion into new markets such as Asia and the Middle East [2] Market Insights - A recent study by BSP revealed that 47% of respondents plan to increase their exposure to infrastructure debt over the next 12 months, followed by 39% for direct lending and 35% for asset-based lending [3] - Among 135 global institutional investors surveyed, 93% intend to either maintain (42%) or increase (51%) their exposure to alternative credit by 2026, driven by the potential for higher returns and greater diversification [4] Asset Management - BSP currently manages $92 billion in assets, including those from Apera Asset Management, which was acquired in October 2025 [5] - The firm oversees strategies such as private debt, real estate debt, structured credit, and liquid loans [5]

Group 1 - Franklin Resources, Inc. (NYSE:BEN) has been included among the 15 Best High Yield Stocks to Buy [1] - Barclays raised its price target on Franklin Resources to $25 from $22 while maintaining an Underweight rating, driven by updates to asset manager models and factoring in full quarterly fund flows [2] - Preliminary month-end AUM for Franklin Resources was reported at $1.68 trillion as of December 31, 2025, reflecting a slight increase from $1.67 trillion at the end of November, supported by long-term net inflows of $28 billion [3] Group 2 - For the full quarter ending December 31, 2025, preliminary AUM reflected long-term net inflows of $27 billion, with $29 billion from reinvested distributions, although Western Asset Management reported $7 billion in long-term net outflows [4] - Franklin Resources operates as a global investment management firm under the Franklin Templeton umbrella, serving clients in over 150 countries [5]

Company Overview - Franklin Resources (BEN) is headquartered in San Mateo and operates in the Finance sector, with a stock price change of 8.71% since the start of the year [3] - The company currently pays a dividend of $0.33 per share, resulting in a dividend yield of 5.08%, which is significantly higher than the Financial - Investment Management industry's yield of 2.63% and the S&P 500's yield of 1.34% [3] Dividend Analysis - The current annualized dividend of Franklin Resources is $1.32, reflecting a 3.1% increase from the previous year [4] - Over the past 5 years, the company has increased its dividend 5 times, achieving an average annual increase of 3.38% [4] - The current payout ratio is 58%, indicating that the company paid out 58% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Franklin Resources' earnings per share for 2026 is $2.51, representing a year-over-year growth rate of 13.06% [5] - The company is viewed as a strong dividend play, appealing to income investors due to its solid earnings growth and attractive dividend yield [6] Investment Considerations - Established firms with secure profits are typically seen as the best dividend options, while high-growth businesses and tech start-ups rarely offer dividends [6] - Franklin Resources is positioned as a compelling investment opportunity, especially for income investors, and currently holds a Zacks Rank of 3 (Hold) [6]

Core Viewpoint - Franklin Resources, Inc. is adapting to the evolving financial landscape by preparing its institutional money market funds for tokenized finance, which includes integrating digital assets and blockchain technology [2][6]. Group 1: Company Overview - Franklin Resources, Inc., also known as Franklin Templeton, is a global investment management organization offering a variety of financial services such as mutual funds, retirement planning, and institutional asset management [1]. - The company competes with major asset managers like BlackRock and Vanguard [1]. Group 2: Recent Developments - Barclays has adjusted its rating for Franklin Resources to "Underweight" while maintaining a "hold" action, with the stock currently priced at $25.63 [1][6]. - Barclays has raised the price target for Franklin Resources from $22 to $25, reflecting confidence in the company's strategic initiatives [2][6]. Group 3: Financial Performance - As of December 31, 2025, Franklin Resources reported a rise in assets under management (AUM) to $1.68 trillion, driven by net inflows of $28 billion, including $26 billion from reinvested distributions [4]. - The company experienced gains across various asset classes, with equity assets rising to $696.7 billion and fixed income AUM reaching $437 billion, although $1 billion in net outflows at Western Asset Management partially offset these gains [4]. Group 4: Upcoming Announcements - Franklin Resources is set to announce its first-quarter operating results on January 30, 2026, with a written commentary available on their investor relations website [3].