T. Rowe Price Group Inc.

04/30/2026 | Press release | Distributed by Public on 04/30/2026 10:42

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
OVERVIEW.
Our revenues and net income are derived primarily from investment advisory services provided globally to individual and institutional investors in a broad range of investment solutions across equity, fixed income, multi-asset, and alternatives capabilities. We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; trust services; and other advisory services.
Investment advisory fees depend largely on the total value and composition of our assets under management. Accordingly, fluctuations in financial markets and in the composition of assets under management affect our revenues and results of operations.
We incur significant expenditures to develop new products and services and improve and expand our capabilities and distribution channels in order to attract new clients and additional investments from our existing clients. These efforts often involve costs that precede any future revenues we may recognize from an increase to our assets under management.
The investment management industry is evolving, facing challenging trends such as passive strategies taking market share from traditional active strategies; continued downward fee pressure; demand for new investment vehicles to meet client needs; and an ever-changing regulatory landscape. In this regard, we have ample liquidity and resources that allow us to take advantage of attractive growth opportunities. Furthermore, we have developed a broad and ongoing plan to align our expense growth with anticipated revenue growth. As a result, we have initiated certain actions to reduce expense growth, realign resources, and invest in existing and future capabilities, while also helping to offset ongoing inflationary pressures on compensation and contractual spending. These investments include hiring investment and distribution professionals, adopting new technologies, and offering new products to provide our clients with strong investment management expertise and services.
MARKET TRENDS.
Global financial markets experienced increased volatility during the first quarter of 2026. In the U.S., equity markets produced mixed results during the quarter. Equity prices advanced early in the quarter amid solid corporate earnings and generally favorable economic data. Later in the quarter, heightened geopolitical tensions disrupted global energy supply conditions, leading to a sharp increase in oil prices and a corresponding reassessment of inflation risks. This shift contributed to increased market volatility and downward pressure on equity valuations, particularly toward the end of the quarter.
Performance varied across market capitalizations and investment styles. Small- and mid-capitalization stocks outperformed large-cap stocks, and value-oriented equities outperformed growth equities across capitalization ranges. Energy stocks significantly outperformed amid higher commodity prices along with materials and utilities. In contrast, consumer discretionary, financials, information technology, and communication services underperformed.
Developed international and emerging equity markets were modestly negative for the quarter. Early gains were offset by late-quarter declines as higher energy costs weighed on growth expectations, particularly in regions dependent on imported energy.
Returns of several major equity market indexes were as follows:
Three months ended
Index 3/31/2026
S&P 500 Index (4.3)%
NASDAQ Composite Index(1)
(7.1)%
Russell 2000 Index 0.9%
MSCI EAFE (Europe, Australasia, and Far East) Index (1.1)%
MSCI Emerging Markets Index (0.1)%
(1) Returns exclude dividends
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Global bond returns were modestly negative in the first quarter of 2026. In the U.S., fixed income markets were relatively flat during the quarter. Earlier gains were reversed later in the period as rising energy prices contributed to upward pressure on inflation expectations. Heightened geopolitical uncertainty increased interest rate volatility and complicated expectations regarding the duration of restrictive monetary policy. The Federal Reserve maintained its policy rate during the quarter, reflecting a continued data-dependent stance amid evolving economic and geopolitical conditions.
Mortgage-backed and asset-backed securities outperformed, while corporate bonds underperformed as credit spreads widened later in the quarter. Treasury securities posted modest losses. The U.S. dollar weakened early in the quarter amid shifting global capital flows before strengthening later as risk aversion increased.
International fixed income markets posted negative returns for the quarter, driven primarily by rising sovereign yields late in the period. Earlier gains supported by easing inflation trends were offset as geopolitical developments led to sharp increases in energy prices and a broad reassessment of inflation outlooks and anticipated central bank policy actions across major regions.
Emerging market bonds also declined during the quarter. Hard-currency sovereign bonds were negatively affected by widening credit spreads as investors reassessed sovereign credit risk amid tighter global financial conditions. Local-currency emerging market debt experienced additional pressure from rising domestic yields and currency depreciation later in the period, reflecting increased risk aversion and U.S. dollar strength. Earlier supportive conditions for emerging market fixed income were outweighed as geopolitical risks intensified toward quarter-end.
Returns of several major bond market indexes were as follows:
Three months ended
Index 3/31/2026
Bloomberg Barclays U.S. Aggregate Bond Index (0.1)%
J.P. Morgan Global High Yield Index (0.2)%
Bloomberg Barclays Municipal Bond Index (0.2)%
Bloomberg Barclays Global Aggregate Ex-U.S. Dollar Bond Index (1.9)%
J.P. Morgan Emerging Markets Bond Index Plus (0.5)%
Bank of America US High Yield Index (0.6)%
Credit Suisse Leveraged Loan Index (0.5)%
ASSETS UNDER MANAGEMENT.(1)
Assets under management ended the first quarter of 2026 at $1,709.7 billion, a decrease of $65.9 billion from December 31, 2025. The decrease was driven by market depreciation of $52.2 billion and net cash outflows of $13.7 billion.
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The following table details changes in our assets under management, by asset class, during the first quarter of 2026:
Three months ended 3/31/2026
(in billions) Equity Fixed income, including money market
Multi-asset(2)
Alternatives(3)
Total
Assets under management at beginning of period $ 878.5 $ 211.6 $ 627.0 $ 58.5 $ 1,775.6
Net cash flows prior to manager-driven distributions (22.6) 3.5 4.1 2.2 (12.8)
Manager-driven distributions - - - (0.9) (0.9)
Net cash flows (22.6) 3.5 4.1 1.3 (13.7)
Net market appreciation (depreciation) and income(4)
(45.4) (0.5) (6.1) (0.2) (52.2)
Change during the period (68.0) 3.0 (2.0) 1.1 (65.9)
Assets under management at March 31, 2026 $ 810.5 $ 214.6 $ 625.0 $ 59.6 $ 1,709.7
(1) Includes fee earning assets in which T. Rowe Price and its affiliates have full discretionary authority along with managed account - model delivery assets.
(2) The underlying assets under management of the multi-asset portfolios have been aggregated and presented in this category and not reported in the equity and fixed income columns.
(3) The alternatives asset class includes strategies authorized to invest more than 50% of its holdings in private credit, leveraged loans, mezzanine, real assets/CRE, structured products, stressed / distressed, non-investment grade CLOs, special situations, private equity, or have absolute return as its investment objective. Generally, only those strategies with longer than daily liquidity are included. Unfunded capital commitments were $20.9 billion at March 31, 2026 and $21.6 billion at December 31, 2025 and are not reflected in fee basis AUM above.
(4) Includes net distributions not reinvested for the first quarter of 2026 of $0.6.
Investment advisory clients outside the United States account for 8.6% of our assets under management at March 31, 2026 and 8.8% at December 31, 2025.
Assets under management in our target date retirement products, which are included in the multi-asset totals shown above, were $561.3 billion at March 31, 2026, compared with $561.4 billion at December 31, 2025. Net flows into these portfolios were $4.9 billion in the first quarter of 2026.
Our multi-asset investment division provides advisory solutions that include investment insights, strategic asset allocation design, tactical asset allocation recommendations, and portfolio rebalancing services. The assets in these solutions, predominantly in the United States, were $27.8 billion at March 31, 2026 and December 31, 2025.
We provide participant accounting and plan administration for defined contribution retirement plans that primarily invest in our U.S. mutual funds, collective investment trusts and funds managed outside of our complex. As of March 31, 2026, our assets under administration were $314 billion, of which $176 billion are assets we manage.
INVESTMENT PERFORMANCE.(1)
Strong investment performance and brand awareness is a key driver to attracting and retaining assets-and to our long-term success. Our performance disclosures include specific asset classes, assets under management weighted performance, U.S. fund performance against passive peers, and composite performance against benchmarks. The following tables present investment performance for the one-, three-, five-, and 10-years ended March 31, 2026. Past performance is not a guarantee nor a reliable indicator of future performance.
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% of U.S. funds that outperformed Morningstar median(2),(3)
1 year 3 years 5 years 10 years
Equity 35% 50% 44% 58%
Fixed income 59% 55% 55% 57%
Multi-asset 27% 62% 30% 62%
All funds 39% 56% 43% 59%
% of U.S. funds that outperformed passive peer median(2),(4)
1 year 3 years 5 years 10 years
Equity 19% 37% 40% 39%
Fixed income 47% 58% 48% 56%
Multi-asset 26% 47% 21% 52%
All funds 28% 46% 36% 47%
% of composites that outperformed benchmarks(5)
1 year 3 years 5 years 10 years
Equity 17% 25% 24% 45%
Fixed income 55% 61% 55% 69%
All composites 34% 40% 36% 54%
AUM Weighted Performance
% of U.S. funds AUM that outperformed Morningstar median(2),(3)
1 year 3 years 5 years 10 years
Equity 21% 63% 41% 73%
Fixed income 84% 77% 81% 77%
Multi-asset 11% 90% 52% 93%
All funds 23% 71% 46% 78%
% of U.S. funds AUM that outperformed passive peer median(2),(4)
1 year 3 years 5 years 10 years
Equity 6% 40% 25% 42%
Fixed income 72% 77% 80% 58%
Multi-asset 11% 67% 16% 94%
All funds 10% 49% 26% 56%
% of composites AUM that outperformed benchmarks(5)
1 year 3 years 5 years 10 years
Equity 13% 33% 18% 39%
Fixed income 63% 60% 55% 67%
All composites 23% 38% 26% 44%
As of March 31, 2026, 68 of 140 (48.6%) of the firm's rated U.S. mutual funds (across primary share classes) received an overall rating of 4 or 5 stars. By comparison, 32.5% of Morningstar's fund population is given a rating of 4 or 5 stars(6). In addition, 61.0%(6) of AUM in the firm's rated U.S. mutual funds (across primary share classes) ended March 31, 2026 with an overall rating of 4 or 5 stars.
(1) The investment performance reflects that of T. Rowe Price U.S. mutual funds, ETFs, and composites.
(2) Source: © 2026 Morningstar, Inc. All rights reserved. The information contained herein: 1) is proprietary to Morningstar and/or its content providers; 2) may not be copied or distributed; and 3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
(3) Source: Morningstar. Primary share class only. Excludes money market mutual funds, funds with an operating history of less than one year, T. Rowe Price passive funds, and T. Rowe Price funds that are clones of other funds. The top chart reflects the percentage of T. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that outperformed the Morningstar category median. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $306B for 1 year, $294B for 3 years, $293B for 5 years, and $292B for 10 years.
(4) Passive Peer Median was created by T. Rowe Price using data from Morningstar. Primary share class only. Excludes money market mutual funds, funds with an operating history of less than one year, funds with fewer than three peers, T. Rowe Price passive funds, and T. Rowe Price funds that are clones of a retail fund.This
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analysis compares T. Rowe Price active funds with the applicable universe of passive/index open-end funds and ETFs of peer firms. The top chart reflects the percentage of T. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that outperformed the passive peer universe. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $293B for 1 year, $244B for 3 years, $239B for 5 years, and $231B for 10 years.
(5) Composite net returns are calculated using the highest applicable separate account fee schedule. Excludes money market composites. All composites compared to official GIPS composite primary benchmark. The top chart reflects the percentage of T. Rowe Price composites with 1 year, 3 year, 5 year, and 10 year track record that are outperforming their benchmarks. The bottom chart reflects the percentage of T. Rowe Price composite AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $1,501B for 1 year, $1,494B for 3 years, $1,487B for 5 years, and $1,453B for 10 years.
(6) The Morningstar Rating™ for funds is calculated for funds with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. Morningstar gives its best ratings of 5 or 4 stars to the top 32.5% of all funds (of the 32.5%,10% get 5 stars and 22.5% get 4 stars). The Overall Morningstar Rating™ is derived from a weighted average of the performance figures associated with a fund's 3, 5, and 10 year (if applicable) Morningstar Rating™ metrics.
RESULTS OF OPERATIONS.
The following table and discussion sets forth information regarding our consolidated financial results for the first quarter of 2026 and 2025 on a U.S. GAAP and a non-GAAP basis. The non-GAAP basis adjusts for the impact of our consolidated investment products, the impact of market movements on the deferred compensation liabilities and related economic hedges, investment income related to certain other investments, acquisition-related amortization and costs, impairment charges, and certain nonrecurring charges and gains, including the restructuring charges.
Three months ended Q1 2026 vs. Q1 2025
(in millions, except per-share data) 3/31/2026 3/31/2025 $ Change
% Change(1)
U.S. GAAP basis
Investment advisory fees $ 1,683.0 $ 1,598.4 $ 84.6 5.3 %
Capital allocation-based income(2)
$ 28.1 $ (1.2) $ 29.3 n/m
Net revenues $ 1,857.0 $ 1,763.9 $ 93.1 5.3 %
Operating expenses $ 1,176.5 $ 1,167.6 $ 8.9 0.8 %
Net operating income $ 680.5 $ 596.3 $ 84.2 14.1 %
Non-operating income (loss) $ (48.3) $ 70.7 $ (119.0) n/m
Net income to T. Rowe Price Group $ 498.2 $ 490.5 $ 7.7 1.6 %
Diluted earnings per common share $ 2.23 $ 2.15 $ 0.08 3.7 %
Weighted average common shares outstanding assuming dilution 217.6 222.6 (5.0) (2.2) %
Adjusted basis(3)
Operating expenses $ 1,155.2 $ 1,135.1 $ 20.1 1.8 %
Operating expenses, excluding accrued carried interest related compensation $ 1,142.3 $ 1,131.2 $ 11.1 1.0 %
Net operating income $ 706.1 $ 640.6 $ 65.5 10.2 %
Non-operating income (loss) $ 30.9 $ 35.5 $ (4.6) (13.0) %
Net income to T. Rowe Price Group $ 562.0 $ 509.3 $ 52.7 10.3 %
Diluted earnings per common share $ 2.52 $ 2.23 $ 0.29 13.0 %
Assets under management (AUM) (in billions)
Average AUM $ 1,775.8 $ 1,620.3 $ 155.5 9.6 %
Ending AUM $ 1,709.7 $ 1,566.3 $ 143.4 9.2 %
Investment advisory annualized effective fee rate (EFR) (in bps)
EFR without performance-based fees 38.4 40.0 (1.6) (4.0) %
EFR with performance-based fees 38.6 40.3 (1.7) (4.2) %
(1) n/m - the percentage change is not meaningful.
(2) Capital allocation-based income represents the change in accrued carried interest.
(3) See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.
Results Overview - Quarter ended March 31, 2026
Net revenues consist of investment advisory revenues; performance-based advisory fees; administrative, distribution, servicing, and other fees; and capital allocation-based income. More than 90% of our net revenues are related to investment advisory fees. Total net revenues were $1,857.0 million in the first quarter of 2026, a 5.3% increase over $1,763.9 million in the first quarter of 2025. The increase was primarily driven by a 5.3% increase in investment advisory fee revenue as higher overall markets increased average assets under management by 9.6% and a $29.3 million increase in capital allocation-based income (change in accrued carried interest) earned from investments in certain affiliated funds.
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Investment advisory fees are generally earned based on the value and composition of our assets under management, which change based on fluctuations in financial markets and net cash flows. As our average assets under management increase or decrease in a given period, the level of our investment advisory fee revenue for that same period generally fluctuates in a similar manner. Our annualized effective fee rates can be impacted by market or cash flow related shifts among asset classes and products, including those with tiered-fee structures, along with price changes we make in existing products.
Capital allocation-based income will fluctuate quarter-to-quarter to reflect the adjustment to accrued carried interest for the change in value of certain affiliated funds assuming the funds' underlying investments were realized as of the end of the period.
Operating expenses on a U.S. GAAP basis were $1,176.5 million in the first quarter of 2026, a 0.8% increase over the comparable 2025 period. On a non-GAAP basis, adjusted operating expenses were $1,155.2 million, a 1.8% increase over the comparable 2025 period.
Compared to the first quarter of 2025, the increase in U.S. GAAP and adjusted operating expenses was driven by higher technology, occupancy, and facilities costs. Also, U.S. GAAP expenses were impacted by lower mark-to-market related to our deferred compensation liabilities and lower acquisition-related amortization costs, partially offset by the restructuring charge. These costs are not included in our non-GAAP operating expenses. See the GAAP to non-GAAP reconciliation at the end of the Results of Operations section of this Management's Discussion and Analysis.
Operating margin in the first quarter of 2026 was 36.6% on a U.S. GAAP basis, compared to 33.8% earned in the first quarter of 2025. The increase in our operating margin for the first quarter of 2026 compared to the 2025 period was driven by net revenue growth outpacing operating expense growth primarily due to higher investment advisory fees.
Diluted earnings per share was $2.23 for the first quarter of 2026 compared to $2.15 for the first quarter of 2025. The increase was primarily driven by a lower tax rate and lower weighted average shares outstanding compared to the 2025 period.
On a non-GAAP basis, diluted earnings per share was $2.52 for the first quarter of 2026 compared to $2.23 for the first quarter of 2025. The increase was primarily due to higher adjusted operating income and lower weighted average shares outstanding compared to the 2025 period.
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Net revenues
Three months ended Q1 2026 vs. Q1 2025
(in millions) 3/31/2026 3/31/2025 $ Change
% Change(1)
Investment advisory fees
Equity $ 974.7 $ 959.2 $ 15.5 1.6 %
Fixed income, including money market 111.8 103.6 8.2 7.9 %
Multi-asset 509.1 454.7 54.4 12.0 %
Alternatives 87.4 80.9 6.5 8.0 %
1,683.0 1,598.4 84.6 5.3 %
Performance-based advisory fees 7.5 10.4 (2.9) (27.9) %
Capital allocation-based income
Change in accrued carried interest 31.3 9.2 22.1 n/m
Acquisition-related amortization and impairments (3.2) (10.4) 7.2 n/m
28.1 (1.2) 29.3 n/m
Administrative, distribution, servicing, and other fees
Administrative and other fees 116.6 134.7 (18.1) (13.4) %
Distribution and servicing fees 21.8 21.6 0.2 0.9 %
138.4 156.3 (17.9) (11.5) %
Net revenues $ 1,857.0 $ 1,763.9 $ 93.1 5.3 %
Average AUM (in billions):
Equity $ 861.2 $ 826.3 $ 34.9 4.2 %
Fixed income, including money market 213.7 191.6 22.1 11.5 %
Multi-asset 641.8 549.7 92.1 16.8 %
Alternatives 59.1 52.7 6.4 12.1 %
Average AUM $ 1,775.8 $ 1,620.3 $ 155.5 9.6 %
Ending AUM (in billions) $ 1,709.7 $ 1,566.3 $ 143.4 9.2 %
Investment advisory annualized effective fee rate (EFR) (in bps)
EFR without performance-based fees 38.4 40.0 (1.6) (4.0) %
EFR with performance-based fees 38.6 40.3 (1.7) (4.2) %
(1) n/m - the percentage change is not meaningful.
Investment advisory fees in the first quarter of 2026 increased 5.3% over the comparable 2025 quarter as average assets under management increased $155.5 billion, or 9.6%, to $1,775.8 billion.
The average annualized effective fee rate earned for the first quarter of 2026 declined from the comparable 2025 period due to client flows and transfers creating a mix shift in assets under management toward lower fee products and asset classes.
Performance-based advisory fees in the first quarter of 2026 were primarily earned from alternative strategies, whereas in the 2025 comparative period fees were earned across equity and alternative strategies.
Capital allocation-based income includes the change in accrued carried interest along with acquisition-related amortization and impairments. For the 2026 quarter, accrued carried interest increased net revenues by $31.3 million, compared to $9.2 million in 2025, reflecting relative investment performance. The decrease in acquisition-related amortization and impairments from the comparable 2025 period primarily reflects amortization and impairments recognized over time, which reduced the remaining carrying value of the acquired-assets. We realized carried interest of $41.0 million in the first quarter of 2026 compared to $43.1 million in the 2025 period.
A portion of the capital allocation-based income is passed through to certain associates as compensation and the related expense is recognized in compensation and related costs with the unpaid amount reported as non-controlling interest on the unaudited consolidated balance sheet.
Administrative, distribution, servicing, and other fees in the first quarter of 2026 were $138.4 million, a decrease of $17.9 million, or 11.5%, from the comparable 2025 quarter. The decrease primarily reflects the reporting change implemented in Q3 2025, in which revenue earned from managed account - model delivery assets and certain other
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advisory services began being reported within investment advisory fees, as well as the timing of cost reimbursements from the U.S. mutual funds.
Our net revenues reflect the elimination of advisory and administrative fee revenue earned from our consolidated
investment products. The corresponding expenses recognized by these products, and consolidated in our financial statements, were also eliminated from operating expenses. For the first quarter, we eliminated net revenue of $1.1 million in 2026 and $1.4 million in 2025.
Operating expenses
Three months ended Q1 2026 vs. Q1 2025
(in millions) 3/31/2026 3/31/2025 $ Change
% Change(1)
Compensation, benefits, and related costs $ 655.1 $ 657.9 $ (2.8) (0.4) %
Acquisition-related retention agreements 14.2 14.2 - - %
Capital allocation-based income compensation(2)
11.4 (0.4) 11.8 n/m
Market-related change in deferred compensation liabilities (21.0) (7.2) (13.8) n/m
Total compensation and related costs 659.7 664.5 (4.8) (0.7) %
Distribution and servicing costs 99.3 93.6 5.7 6.1 %
Advertising and promotion costs 18.4 26.1 (7.7) (29.5) %
Product and recordkeeping related costs 74.3 83.8 (9.5) (11.3) %
Technology, occupancy, and facility costs(3)
204.4 181.2 23.2 12.8 %
General, administrative, and other costs(3)
92.4 89.7 2.7 3.0 %
Acquisition-related amortization and impairment costs 18.0 28.7 (10.7) (37.3) %
Restructuring charge 10.0 - 10.0 n/m
Total operating expenses $ 1,176.5 $ 1,167.6 $ 8.9 0.8 %
Total adjusted operating expenses(4)
$ 1,155.2 $ 1,135.1 $ 20.1 1.8 %
(1) n/m - The percentage change is not meaningful.
(2) Capital allocation-based income compensation represents the change in accrued carried interest compensation along with acquisition-related, non-cash amortization and impairments.
(3) In Q1 2026, we began reporting technology-related professional fees and servicing costs from general, administrative, and other costs to technology, occupancy, and facilities costs to better align with the nature of the expenses following the outsourcing and expansion of our technology capabilities through trusted vendor partnerships. Prior periods were recast to reflect this change. The amount reclassified for the first quarter of 2025 was $13.6M.
(4) See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.
Compensation, benefits, and related costs were $655.1 million for the first quarter of 2026, a decrease of $2.8 million, or 0.4%, compared to the 2025 quarter. The decrease was primarily due to lower salaries and related benefits, partially offset by higher long-term incentive compensation.
The firm employed 7,507 associates at March 31, 2026, a decrease of 3.4% from the end of 2025 and a decrease of 7.1% from March 31, 2025. The average associate headcount for the first quarter of 2026 was 7,617, a decrease of 6.0% compared to the 2025 period.
Distribution and servicing costs were $99.3 million for the first quarter of 2026, an increase of $5.7 million, or 6.1%, from $93.6 million recognized in the 2025 quarter. The increase was primarily driven by higher average assets under management distributed through intermediaries.
The costs in this expense category include amounts paid to third-party intermediaries that source the assets of certain share classes of our U.S. mutual funds, ETFs, and our international products, such as our Japanese ITMs and SICAVs. These costs are offset entirely by the investment advisory revenue we earn from these products, or in the case of the Advisor and R share classes of the U.S. mutual funds, are recognized in administrative, distribution, servicing, and other fees.
Advertising and promotion costs were $18.4 million in the first quarter of 2026, a decrease of $7.7 million, or 29.5%, compared to the $26.1 million recognized in the 2025 quarter. The decrease was primarily due to timing of media spend and events.
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Product and recordkeeping related costs were $74.3 million in the first quarter of 2026, a decrease of $9.5 million, or 11.3%, compared to the 2025 quarter. The decrease was primarily due to the timing of costs reimbursed by our U.S. mutual funds. The offsetting reimbursement is recognized in administrative, distribution, servicing, and other fees revenue.
Technology, occupancy, and facility costs were $204.4 million in the first quarter of 2026, an increase of $23.2 million, or 12.8%, compared to the $181.2 million recognized in the 2025 quarter. The increase from the 2025 quarter was primarily due to higher technology costs, including cloud services, depreciation, and our decision in the prior year to outsource certain technology capabilities.
General, administrative, and other expenses were $92.4 million in the first quarter of 2026, an increase of $2.7 million, or 3.0%, compared to the $89.7 million recognized in the 2025 quarter. The increase was primarily due to higher external research and other general and administrative costs.
Acquisition-related amortization and impairment costs. As part of the purchase accounting for our acquisitions, we identified and separately recognized, at fair value, certain intangible assets. During the first quarter of 2026, we recognized $18.0 million in amortization and impairments compared to $28.7 million in the 2025 period. The decrease primarily reflects amortization and impairments recognized over time, which reduced the remaining carrying value of the related definite-lived intangibles.
Restructuring charge of $10.0 million in the first quarter of 2026 relates to actions taken under our previously announced broad and ongoing expense management program, which is designed to reduce expense growth and realign resources to support investment in existing and future capabilities. The charge reflects compensation-related costs, primarily severance.
Non-operating income (loss)
The following table details the components of non-operating income (loss) for both the first quarter of 2026 and 2025.
Three months ended
(in millions) 3/31/2026 3/31/2025
Net gains (losses) from non-consolidated investment products
Cash and discretionary investments
Dividend income $ 34.2 $ 30.4
Market-related gains (losses) and equity in earnings (losses) (3.3) 4.2
Total cash and discretionary investments 30.9 34.6
Seed capital investments
Dividend income 1.0 0.2
Market-related gains (losses) and equity in earnings (losses) (11.2) (11.3)
Total seed capital investments (10.2) (11.1)
Total cash, discretionary, and seed investments 20.7 23.5
Net gains (losses) recognized upon deconsolidation 0.2 -
Investments used to hedge the deferred compensation liabilities (32.6) (10.7)
Total net gains (losses) from non-consolidated investment products (11.7) 12.8
Other investment income 5.6 19.1
Net gains (losses) on investments (6.1) 31.9
Net gains (losses) on consolidated investment products (41.4) 31.9
Other gains (losses), including foreign currency gains (losses) (0.8) 6.9
Non-operating income (loss) $ (48.3) $ 70.7
Adjusted non-operating income (loss)(1)
$ 30.9 $ 35.5
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(1) See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.
On an adjusted basis, non-operating income (loss) consists of investment gains/losses generated from our cash and discretionary investment portfolio. Lower investment gains earned by our investment portfolio during the first quarter of 2026 compared to the 2025 period was primarily due to overall lower market returns, partially offset by higher dividend income from higher cash and investment balances.
The table above includes the net investment income of the underlying portfolios included in the consolidated
sponsored investment products and not just the net investment income related to our ownership interest in the products. The table below shows the impact that the consolidated investment products had on the individual lines of our unaudited consolidated statements of income and the portion attributable to our interest:
Three months ended
(in millions) 3/31/2026 3/31/2025
Operating expenses reflected in net operating income $ (2.7) $ (2.5)
Net investment income (loss) reflected in non-operating income (41.4) 31.9
Impact on income before taxes $ (44.1) $ 29.4
Net income (loss) attributable to our interest in the consolidated investment products $ (30.0) $ 14.8
Net income (loss) attributable to redeemable non-controlling interests (unrelated third-party investors) (14.1) 14.6
Impact on income before taxes $ (44.1) $ 29.4
Provision for income taxes
The following table reconciles the statutory federal income tax rate to our effective tax rate on a U.S. GAAP basis for the three months ended March 31, 2026 and 2025:
Three months ended
3/31/2026 3/31/2025
Statutory U.S. federal income tax rate 21.0 % 21.0 %
State income taxes, net of federal income tax benefits 2.2 2.7
Net (income) losses attributable to redeemable non-controlling interests(1)
(0.2) (0.4)
Net excess tax benefits from stock-based compensation plans activity (0.2) (0.3)
Valuation allowances (0.2) 0.4
Other items 0.8 0.9
Effective income tax rate 23.4 % 24.3 %
Adjusted effective tax rate 23.7 % 24.7 %
(1) Net income attributable to redeemable non-controlling interests represents the portion of earnings held in our consolidated investment products that are not taxable to the us despite being included in pre-tax income.
The adjusted effective tax rate primarily adjusts for the impact of the consolidated investment products, including the net income attributable to redeemable non-controlling interests. Our adjusted effective tax rate was 23.7% in the first quarter of 2026 compared with 24.7% in 2025. The decrease in both the U.S. GAAP and adjusted effective tax rate is primarily due to lower state taxes resulting from prior period settlements and the reversal of certain deferred tax asset valuation allowances. The impact of these decreases on the U.S. GAAP effective tax rate were partially offset by a lower impact related to the net income attributable to redeemable noncontrolling interests.
We currently estimate that our effective tax rate for the full year 2026, on a U.S. GAAP and adjusted basis, will be in the range of 23.0% to 26.0%.
Our effective tax rate will continue to experience volatility in future periods due to, among other things, the impact market fluctuations in our stock price have on stock-based compensation tax benefits, changes in the mix of our earnings among countries with differing tax laws or rates, and changes in the valuation allowances of foreign-based deferred tax assets.
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NON-GAAP INFORMATION AND RECONCILIATION.
We believe the non-GAAP financial measures below provide relevant and meaningful information to investors about our core operating results. These measures have been established in order to increase transparency for the purpose of evaluating our core business, for comparing current results with prior period results, and to enable more appropriate comparison with industry peers. However, non-GAAP financial measures should not be considered a substitute for financial measures calculated in accordance with U.S. GAAP and may be calculated differently by other companies.
The following schedules reconcile certain U.S. GAAP financial measures to non-GAAP financial measures for the three months ended March 31, 2026 and 2025.
Three months ended 3/31/2026
Operating expenses Net operating income Non-operating income (loss)
Provision (benefit) for income taxes(6)
Net income attributable to T. Rowe Price Group, Inc.
Diluted earnings per share(7)
U.S. GAAP Basis (FS line item) $ 1,176.5 $ 680.5 $ (48.3) $ 148.1 $ 498.2 $ 2.23
Non-GAAP adjustments:
Acquisition-related:
Investment and NCI amortization and impairments(1) (Capital allocation-based income and Compensation and related costs)
1.5 1.7 - 0.5 1.2 0.01
Acquisition-related retention arrangements(1) (Compensation and related costs)
(14.2) 14.2 - 4.2 10.0 0.04
Intangible assets amortization and impairments(1)
(18.0) 18.0 - 5.3 12.7 0.06
Total acquisition-related (30.7) 33.9 - 10.0 23.9 0.11
Deferred compensation liabilities(2) (Compensation and related costs)
21.0 (21.0) 32.6 3.5 8.1 0.04
Restructuring charge(3)
(10.0) 10.0 - 3.0 7.0 0.03
Consolidated investment products(4)
(1.6) 2.7 41.4 8.9 21.1 0.09
Other non-operating income(5)
- - 5.2 1.5 3.7 0.02
Adjusted Basis $ 1,155.2 $ 706.1 $ 30.9 $ 175.0 $ 562.0 $ 2.52
Three months ended 3/31/2025
Operating expenses Net operating income Non-operating income (loss)
Provision (benefit) for income taxes(6)
Net income attributable to T. Rowe Price Group, Inc.
Diluted earnings per share(7)
U.S. GAAP Basis (FS line item) $ 1,167.6 $ 596.3 $ 70.7 $ 161.9 $ 490.5 $ 2.15
Non-GAAP adjustments:
Acquisition-related:
Investment and NCI amortization and impairments(1) (Capital allocation-based income and Compensation and related costs)
4.3 6.1 - 1.2 4.9 0.02
Acquisition-related retention arrangements(1) (Compensation and related costs)
(14.2) 14.2 - 3.0 11.2 0.05
Intangible assets amortization and impairments(1)
(28.7) 28.7 - 5.9 22.8 0.10
Total acquisition-related (38.6) 49.0 - 10.1 38.9 0.17
Deferred compensation liabilities(2) (Compensation and related costs)
7.2 (7.2) 10.7 0.7 2.8 0.01
Consolidated investment products(4)
(1.1) 2.5 (31.9) (3.1) (11.7) (0.05)
Other non-operating income(5)
- - (14.0) (2.8) (11.2) (0.05)
Adjusted Basis $ 1,135.1 $ 640.6 $ 35.5 $ 166.8 $ 509.3 $ 2.23
(1) These non-GAAP adjustments remove the impact of acquisition-related amortization of intangible assets, the recurring fair value remeasurements of the contingent consideration liability, if any, amortization of acquired investment and non-controlling interest basis
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differences and amortization of compensation-related arrangements. We believe adjusting for these charges helps the reader's ability to understand our core operating results and increases comparability period to period.
(2) This non-GAAP adjustment eliminates the compensation expense impact from market valuation changes in deferred compensation liabilities, including the supplemental savings plan and restricted fund units, and the related net gains (losses) on investments used as economic hedges against the related liabilities. The liabilities are adjusted based on the performance of hypothetical investments selected by participants. We use investment products to economically hedge the market risk associated with the supplemental savings plan liability and the expected settlement value of unvested restricted fund units. We believe it is useful to offset the non-operating investment income (loss) of the hedges against the related compensation expense and remove the net impact to help the reader's ability to understand the our core operating results and to increase comparability period to period.
(3) This non-GAAP adjustment removes the impact of actions taken as part of our broad and ongoing plan to reduce expense growth and realign resources to invest in existing and future capabilities. We believe this adjustment helps the reader's ability to understand our core operating results and increases comparability period to period.
(4) This non-GAAP adjustment removes the impact of the consolidated investment products by adding back their operating expenses and subtracting their investment income. The operating expense adjustment represents their operating expenses net of related investment advisory and administrative fees. The adjustment to net income attributable to T. Rowe Price Group represents the consolidated investment products' net income, net of redeemable non-controlling interests. We believe this adjustment helps the reader's ability to understand our core operating results and increases comparability period to period.
(5) This non-GAAP adjustment removes non-operating income (loss) earned on those investments that are not economic hedges for the deferred compensation liabilities and are not part of the cash and discretionary investment portfolio. We retain gains from cash and discretionary investments in our non-GAAP measures, as they are considered part of our core operations. We believe adjusting for the remaining non-operating income (loss) helps the reader's ability to understand our core operating results and increases comparability period to period. Additionally, we do not emphasize this portion of non-operating income (loss) when assessing our performance.
(6) The income tax impacts were calculated in order to achieve an overall year-to-date non-GAAP effective tax rate. As such, the non-GAAP effective tax rate for the three months ended March 31, 2026 and 2025 was 23.7% and 24.7%, respectively.
(7) This non-GAAP measure was calculated by applying the two-class method to adjusted net income attributable to
T. Rowe Price Group divided by the weighted-average common shares outstanding assuming dilution. The calculation of adjusted net income allocated to common stockholders is as follows:
Three months ended
3/31/2026 3/31/2025
Adjusted net income attributable to T. Rowe Price Group, Inc. $ 562.0 $ 509.3
Less: adjusted net income allocated to outstanding restricted stock and stock unit holders 14.1 12.9
Adjusted net income allocated to common stockholders $ 547.9 $ 496.4
CAPITAL RESOURCES AND LIQUIDITY.
Sources of Liquidity
We have ample liquidity, including cash and investments in T. Rowe Price products, as follows:
(in millions) 3/31/2026 12/31/2025
Cash and cash equivalents $ 3,729.8 $ 3,378.2
Discretionary investments 459.5 463.7
Total cash and discretionary investments 4,189.3 3,841.9
Redeemable seed capital investments 1,133.9 1,144.1
Investments used to hedge the deferred compensation liabilities 1,243.0 1,317.3
Total cash and investments in T. Rowe Price products attributable to T. Rowe Price Group $ 6,566.2 $ 6,303.3
Our discretionary investment portfolio is comprised of short duration bond funds, which typically yield higher than money market rates. Our subsidiaries outside the United States held cash and discretionary investments of $826.1 million at March 31, 2026 and $730.6 million at December 31, 2025. Given the availability of our financial resources and cash expected to be generated through future operations, we do not maintain an available external source of additional liquidity.
Our seed capital investments are redeemable, although we generally expect to be invested for several years for the products to build an investment performance history and until unrelated third-party investors substantially reduce our relative ownership percentage.
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The cash and investment presentation on the unaudited consolidated balance sheet is based on the accounting treatment for the cash equivalent or investment item. The following table details how T. Rowe Price Group, Inc.'s interests in cash and investments relate to where they are presented on the unaudited consolidated balance sheet as of March 31, 2026.
(in millions) Cash and cash equivalents Investments
Net assets of consolidated investment products(1)
Total
Cash and discretionary investments $ 3,729.8 $ 459.5 $ - $ 4,189.3
Redeemable seed capital investments - 335.4 798.5 1,133.9
Investments used to hedge the deferred compensation liabilities - 1,169.8 73.2 1,243.0
Total cash and investments in T. Rowe Price products attributable to T. Rowe Price Group 3,729.8 1,964.7 871.7 6,566.2
Investments in affiliated private investment funds(2)
- 682.1 29.1 711.2
Investments in affiliated collateralized loan obligations - 23.3 - 23.3
Investment in UTI and other investments - 497.0 - 497.0
Total cash and investments attributable to T. Rowe Price Group 3,729.8 3,167.1 900.8 7,797.7
Redeemable non-controlling interests - - 940.2 940.2
As reported on the consolidated balance sheet at March 31, 2026 $ 3,729.8 $ 3,167.1 $ 1,841.0 $ 8,737.9
(1) The consolidated T. Rowe Price investment products are generally those products we provided seed capital at the time of their formation and we have a controlling interest. These products generally represent U.S. mutual funds, ETFs, and funds regulated outside the U.S. The $900.8 million represents the total value at March 31, 2026 of our interest in the consolidated T. Rowe Price investment products. The total net assets of the T. Rowe Price investment products at March 31, 2026 of $1,841.0 million includes assets of $1,954.5 million, less liabilities of $113.5 million as reflected in our unaudited consolidated balance sheets.
(2) Includes $157.6 million of non-controlling interests in consolidated entities and represents the portion of these investments, held by related parties, that we cannot sell in order to obtain cash for general operations.
Our unaudited consolidated balance sheet reflects the cash and cash equivalents, investments, other assets and liabilities of those investment products we consolidate, as well as redeemable non-controlling interests for the portion of these investment products that are held by unrelated third-party investors. Although we can redeem our net interest in these investment products at any time, we cannot directly access or sell the assets held by the products to obtain cash for general operations. Additionally, the assets of these investment products are not available to our general creditors. Our interest in these sponsored investment products is generally used as initial seed capital and is recategorized as discretionary when it is determined by management that the seed capital is no longer needed. We assess the discretionary investment products and, when we decide to liquidate our interest, we seek to do so in a way as to not impact the product and, ultimately, the unrelated third-party investors.
Uses of Liquidity
We increased our quarterly recurring dividend per common share in February 2026 by 2.4% to $1.30 per common share from $1.27 per common share. Further, we expended $340.4 million in the first quarter of 2026 to repurchase 3.7 million shares of our outstanding common stock, at an average price of $92.16 per share. These dividends and repurchases were expended using existing cash balances and cash generated from operations. While opportunistic in our approach to stock buybacks, we will generally repurchase our common stock over time to offset the dilution created by our equity-based compensation plans.
Since the end of 2023, we have returned nearly $3.9 billion to stockholders through stock repurchases and regular quarterly dividends, as follows:
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(in millions) Recurring dividend Stock repurchases Total returned to stockholders
2024 $ 1,135.2 $ 334.5 $ 1,469.7
2025 1,143.4 624.6 1,768.0
Three months ended March 31, 2026
288.4 340.4 628.8
Total $ 2,567.0 $ 1,299.5 $ 3,866.5
We anticipate property, equipment, software and other capital expenditures, including internal labor capitalization, for the full-year 2026 to be about $270 million of which nearly all is planned for technology initiatives. We expect to fund our anticipated capital expenditures with operating cash flows and other available resources.
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Cash Flows
The following table summarizes the cash flows for the three months ended March 31, 2026 and 2025, that are attributable to T. Rowe Price Group, Inc., our consolidated investment products, and the related eliminations required in preparing the statement.
Three months ended
3/31/2026 3/31/2025
(in millions) Cash flow attributable to T. Rowe Price Group, Inc. Cash flow attributable to consolidated sponsored investment products Elims As reported Cash flow attributable to T. Rowe Price Group, Inc. Cash flow attributable to consolidated sponsored investment products Elims As reported
Cash flows from operating activities
Net income (loss) $ 498.2 $ (44.1) $ 30.0 $ 484.1 $ 490.5 $ 29.4 $ (14.8) $ 505.1
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation, amortization and impairments of property, equipment and software 68.8 - - 68.8 63.6 - - 63.6
Amortization and impairment of acquisition-related assets and retention agreements 33.9 - - 33.9 49.0 - - 49.0
Fair value remeasurement of contingent liability - - - - - - - -
Stock-based compensation expense 49.1 - - 49.1 50.3 - - 50.3
Net (gains) losses recognized on investments 43.6 - (30.0) 13.6 (23.1) - 14.8 (8.3)
Total non-cash adjustments 195.4 - (30.0) 165.4 139.8 - 14.8 154.6
Net redemptions in sponsored investment products used to economically hedge supplemental savings plan liability 39.2 - - 39.2 45.9 - - 45.9
Net change in trading securities held by consolidated sponsored investment products - (168.9) - (168.9) - (163.0) - (163.0)
Other changes 233.5 73.9 (2.9) 304.5 95.7 (3.5) (1.9) 90.3
Net cash provided by (used in) operating activities 966.3 (139.1) (2.9) 824.3 771.9 (137.1) (1.9) 632.9
Net cash provided by (used in) investing activities 18.7 (0.5) 41.4 59.6 (95.6) 3.7 44.1 (47.8)
Net cash provided by (used in) financing activities (633.4) 169.9 (38.5) (502.0) (489.4) 120.2 (42.2) (411.4)
Effect of exchange rate changes on cash and cash equivalents of consolidated sponsored investment products - (2.8) - (2.8) - 0.9 - 0.9
Net change in cash and cash equivalents during period 351.6 27.5 - 379.1 186.9 (12.3) - 174.6
Cash and cash equivalents at beginning of year 3,378.2 39.1 - 3,417.3 2,649.8 63.1 - 2,712.9
Cash and cash equivalents at end of period $ 3,729.8 $ 66.6 $ - $ 3,796.4 $ 2,836.7 $ 50.8 $ - $ 2,887.5
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Operating Activities
Operating activities attributable to T. Rowe Price Group during the first quarter of 2026 provided cash flows of $966.3 million, an increase of $194.4 million from $771.9 million provided during the 2025 period. The increase was primarily driven by a $137.8 million increase in cash flows related to timing differences associated with the cash settlement of our assets and liabilities, a $55.6 million increase in the add-back for non-cash items as detailed in the table above, and a $7.7 million increase in net income. These increases were partially offset by a $6.7 million decrease in proceeds received from net redemptions of investments that economically hedge our supplemental savings plan liability compared to the 2025 period. The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products' underlying portfolios.
Our interim operating cash flows does not include the cash impact of variable compensation that is accrued throughout the year before being substantially paid out in December.
Investing Activities
Net cash provided by investing activities that were attributable to T. Rowe Price Group totaled $18.7 million in 2026 compared with net cash used in investing activities of $95.6 million in 2025. During 2026, we had net proceeds from the sale of investments of $30.9 million compared to $2.1 million during the 2025 period. In 2026, we had net proceeds of $49.8 million in other investing activity compared to net investments of $15.7 million in the 2025 period. The 2026 period includes proceeds from the sale of certain buildings in our real estate portfolio. Additionally, our property and equipment expenditures decreased by $20.0 million compared to the 2025 period primarily due to the completion of our corporate headquarters build out in 2025. We eliminate our capital in those investment products we consolidate in preparing our consolidated statements of cash flows. The remaining change in reported cash flows from investing activities of $4.2 million is primarily related to the net cash removed from our unaudited consolidated balance sheet from consolidating and deconsolidating investment products.
Financing Activities
Net cash used in financing activities attributable to T. Rowe Price Group totaled $633.4 million in 2026 compared with $489.4 million in the 2025. In 2026, we used $333.5 million to repurchase 3.7 million shares compared to $217.5 million to repurchase 2.1 million shares in the 2025. Cash flows generated from common stock issued under stock compensation plans decreased by $15.1 million during 2026 compared to 2025. Additionally, the $0.4 million decrease in dividends paid in 2026 was a result of share repurchases over the last year reducing shares outstanding, partially offset by a 2.4% increase in our quarterly dividend per share over prior year. The remaining change in reported cash flows from financing activities was primarily attributable to a $53.4 million increase in net subscriptions from redeemable non-controlling interest holders of our consolidated investment products during 2026.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES.
The preparation of financial statements often requires the selection of specific accounting methods and policies from among several acceptable alternatives. Further, significant estimates and judgments may be required in selecting and applying those methods and policies in the recognition of the assets and liabilities in our unaudited consolidated balance sheets, the revenues and expenses in our unaudited consolidated statements of income, and the information that is contained in our significant accounting policies and notes to the unaudited consolidated financial statements. Making these estimates and judgments requires the analysis of information concerning events that may not yet be complete and of facts and circumstances that may change over time. Accordingly, actual amounts or future results can differ materially from those estimates that we include currently in our unaudited consolidated financial statements, significant accounting policies, and notes.
There have been no material changes in the critical accounting policies previously identified in our 2025 Annual Report on Form 10-K.
NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE.
See Note 1 - Basis of Preparation and Summary of Significant Accounting Policies within Item 1. Financial Statements for a discussion of newly issued but not yet adopted accounting guidance.
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FORWARD-LOOKING INFORMATION.
From time to time, information or statements provided by or on behalf of T. Rowe Price, including those within this report, may contain certain forward-looking information, including information or anticipated information relating to: our revenues, net income, and earnings per share of common stock; changes in the amount and composition of our assets under management; our expense levels; our effective tax rate; legal or regulatory developments; geopolitical instability; interest rates and currency fluctuations; and our expectations regarding financial markets, future transactions, dividends, stock repurchases, investments, new products and services, capital expenditures, changes in our effective fee rate, and other industry or market conditions. Readers are cautioned that any forward-looking information provided by or on behalf of T. Rowe Price is not a guarantee of future performance. Actual results may differ materially from those in forward-looking information because of various factors including, but not limited to, those discussed below and in Item 1A, Risk Factors, included in our Form 10-K Annual Report for 2025. Further, forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events.
Our future revenues and results of operations will fluctuate primarily due to changes in the total value and composition of assets under our management. Such changes result from many factors, including, among other things: client-related cash inflows and outflows in our products, performance fees, capital allocation-based income, fluctuations in global financial markets that result in appreciation or depreciation of the assets under our management, our introduction of new investment products, and changes in retirement savings trends relative to participant-directed investments and defined contribution plans.
Our ability to attract and retain investors' assets under our management is dependent on investor sentiment and confidence; the relative investment performance of the T. Rowe Price mutual funds and other managed investment products compared to competing offerings and market indexes; the ability to maintain our investment management and administrative fees at appropriate levels; the impact of changes in interest rates and inflation; competitive conditions in the mutual fund, asset management, and broader financial services sectors; our level of success in implementing our strategy to expand our business; and our ability to attract and retain key personnel. Our revenues are substantially dependent on fees earned under contracts with the T. Rowe Price funds and could be adversely affected if the independent directors of one or more of the T. Rowe Price funds terminated or significantly altered the terms of the investment management or related administrative services agreements. Non-operating investment income will also fluctuate primarily due to the size of our investments, changes in their market valuations, and any other-than-temporary impairments that may arise or, in the case of our equity method investments, our proportionate share of the investees' net income.
Our future results are also dependent upon the level of our expenses, which are subject to fluctuation for the following or other reasons: changes in the level of our advertising and promotion expenses in response to market conditions, including our efforts to expand our investment advisory business to investors outside the U.S. and to further penetrate our distribution channels within the U.S.; the pace and level of spending to support key strategic priorities; variations in the level of total compensation expense due to, among other things, bonuses, restricted stock units and other equity grants, other incentive awards, our supplemental savings plan, changes in our employee count and mix, and competitive factors; any goodwill, intangible asset or other asset impairment that may arise; fluctuation in foreign currency exchange rates applicable to the costs of our international operations; expenses and capital costs, such as technology assets, depreciation, amortization, and research and development, incurred to maintain and enhance our administrative and operating services infrastructure; the timing of the assumption of all third party research payments, unanticipated costs that may be incurred to protect investor accounts and the goodwill of our clients; and disruptions of services, including those provided by third parties, such as fund and products recordkeeping, facilities, communications, power, and the mutual fund transfer agent and accounting systems, as a result of extreme events, cyberattacks or otherwise.
Our business is also subject to substantial governmental regulation, and changes in legal, regulatory, accounting, tax, and compliance requirements may have a substantial effect on our operations and results, including, but not limited to, effects on costs that we incur and effects on investor interest in investment products and investing in general or in particular classes of mutual funds or other investments.
T. Rowe Price Group Inc. published this content on April 30, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 30, 2026 at 16:42 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]