TROW — T. Rowe Price Group, Inc.

T. Rowe Price Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Adjusted Earnings Per Share (EPS): $2.52, up 3% from Q4 2025 and 13% from Q1 2025.
• Assets Under Management (AUM): $1.71 trillion, with an average AUM of $1.78 trillion, up 9.6% year-over-year.
• Net Outflows: $13.7 billion, primarily from equity and mutual fund businesses.
• Adjusted Net Revenue: Over $1.8 billion, a 5% increase from Q1 2025.
• Investment Advisory Revenue: Approximately $1.7 billion, up 5.3% year-over-year but down 3.2% from the previous quarter.
• Effective Fee Rate: 38.4 basis points, down from Q4 2025 due to shifts in asset mix.
• Operating Expenses: $1.14 billion, a 1% increase from Q1 2025 but a 7% decrease from Q4 2025.

2. Strategic Updates and Business Highlights

• Performance: Approximately 50% of funds outperformed their peer group medians over various time frames. Fixed income funds showed strong performance, with over 75% outperforming across all time periods.
• Growth Initiatives:
  • Continued expansion of the Target Date franchise with $4.9 billion in net inflows.
  • Successful launch of two new ETFs, bringing the total to 32, with over $25 billion in AUM.
  • Progress in partnerships, including a collaboration with Goldman Sachs for model portfolios and interval funds.
  • OHA, the alternatives business, reported $112 billion in total AUM, up from $88 billion at the end of 2024.

3. Forward Guidance and Outlook

• Expense Guidance: Expected adjusted operating expenses to rise by 3% to 6% over 2025, with a focus on strategic investments despite market volatility.
• Market Positioning: T. Rowe Price aims to leverage recent market dislocations to enhance its investment strategies and capitalize on opportunities in the credit markets.

4. Bad News, Challenges, or Points of Concern

• Outflows: Continued outflows from equity and mutual fund segments, particularly in U.S. growth-oriented strategies.
• Performance Challenges: One-year performance metrics remain weak, with only 21% of fund assets outperforming peers.
• Market Volatility: The geopolitical situation, particularly the conflict with Iran, has introduced uncertainty and affected market conditions.
• Fee Compression: The shift towards lower-fee vehicles like target date funds is impacting the effective fee rate.

5. Notable Q&A Insights

• Deployment Opportunities: OHA's CEO highlighted that credit spreads have widened, creating potential for attractive risk-adjusted returns, although institutional investors remain disciplined in reallocating assets.
• ETF Growth: T. Rowe Price's ETF growth is attributed to both new client acquisition and migration from mutual funds, with a focus on innovative strategies and expanding their offerings in Europe.
• AI and Software Exposure: Concerns regarding AI disruption were addressed, emphasizing OHA's selective investment approach and rigorous underwriting process to mitigate risks associated with technological advancements.
• M&A Strategy: T. Rowe Price remains open to pursuing M&A opportunities to enhance its alternatives capabilities, while also focusing on organic growth and partnerships.

This summary encapsulates the key points from T. Rowe Price's Q1 2026 earnings call, highlighting both the positive developments and the challenges faced by the company.