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The call emphasized strong, diversified net inflows, notable growth in ETFs, China JV, fixed income, and private markets, and clear financial improvement with higher margins and EPS. Management outlined disciplined expense guidance, balance-sheet strengthening, and continued capital returns. Near-term challenges include market-driven AUM volatility, specific product outflows (fundamental equities, bank-loan ETF), short-term implementation costs for the hybrid platform, and a temporary uptick in leverage. Overall, the positive operational momentum, robust inflows across key capabilities, and margin expansion signals outweigh the cited headwinds.
In its 1Q26 call Invesco provided a detailed operating and capital guide: assets under management ended the quarter at $2.2 trillion (average long‑term AUM nearly $2.0 trillion, up ~$400 billion or 26% q/q) and have recovered into the ~$2.3 trillion range post‑quarter (up >5% vs. quarter‑end); net long‑term inflows were $21.8 billion (eleventh consecutive quarter of inflows, ~4% annualized organic growth) with $11.6 billion of global liquidity inflows; ETFs reached a record $638 billion of AUM (> $1 trillion including QQQ) with nearly $19 billion of ETF net inflows (11% annualized), active ETF AUM > $20 billion (>$35 billion including index strategies); regional and capability highlights included China JV AUM $142 billion with $8.7 billion of net inflows (31% annualized), fundamental fixed income net inflows $3.7 billion (5% annualized) or $14 billion across related capabilities, SMA AUM $37 billion (19% annualized), private markets net inflows $400 million (INCREIF at $5 billion), and institutional quantitative flows $4.7 billion; financials/guidance: Q1 net revenue $1.3 billion, adjusted diluted EPS $0.57 (up 30% YoY), adjusted operating margin 34.5% (300 bps YoY improvement; 500 bps of operating leverage), net revenue yield 22.9 bps (exit 22.8 bps), operating expenses for 2026 expected ~ $3.275 billion assuming ~ $2.3 trillion AUM, an operating expense base ~25% variable to net revenue, compensation targeted mid‑point of a 38–42% range of revenue, third‑party/distribution fees to management fees ~22–23% (22.7% this quarter), Q1 effective tax ~24% (Q2 non‑GAAP estimate 25–26%), hybrid platform implementation costs $10–15 million per quarter in 2026 with incremental platform run‑rate costs building to ~$10 million/qtr this year and at least $60 million in 2027 (ex implementation), Q1 share buybacks $40 million (1.6 million shares) with an additional $1 billion repurchase authorization and a 2026 total payout ratio target near 60%, and $1.1 billion drawn on the revolver with leverage expected to improve as the year progresses.
Net long-term inflows of $21.8B (reported ~$22B) in Q1, marking the 11th straight quarter of net inflows and representing ~4% annualized organic growth. Additionally, $11.6B of global liquidity inflows and ending AUM recovering to ~$2.2T at quarter-end and into the ~$2.3T range post-quarter as markets rebounded.
Record ETF ending AUM of $638B (over $1T including QQQ). ETF net inflows of nearly $19B in the quarter (11% annualized organic growth). Active ETF platform managing >$20B (>$35B including index strategies). Despite a short-term rotation, demand for flagship QQQ and QQQM returned in April.
China JV reached a record AUM of $142B with $8.7B of net long-term inflows in Q1, reflecting a 31% annualized organic growth rate. Launched 14 funds in the quarter with $2.5B in AUM, and fixed-income-plus strategies on the JV reached $40B.
Fundamental fixed income gathered $3.7B in net long-term inflows (5% annualized organic growth) and ~$14B when including related ETFs and China-based fixed income. SMA platform grew to $37B in AUM and generated ~19% annualized organic growth this quarter.
Private markets net inflows of $400M driven by direct real estate; INCREIF real estate debt assets with leverage reached $5B in ~2 years. Launched the Invesco Core Plus Real Estate Trust CIT for defined contribution plans and continued partnerships (Barings, LGT) to expand private markets into wealth and DC channels.
46% of active funds in the top quartile on a 3-year basis and nearly half on a 5-year basis; over 70% of active AUM outperforming respective benchmarks on a 5-year basis — supporting retention and net flows.
Net revenue of $1.3B (up $155M YoY). Adjusted operating margin improved to 34.5% (≈300 bps YoY improvement) with 500 bps of positive operating leverage. Adjusted diluted EPS of $0.57 vs $0.44 prior year (+30%).
Redeemed $500M senior note in January, increased share repurchases to $40M in Q1, and Board authorized an additional $1B in buybacks. Revolver used for short-term funding flexibility; management targets a ~60% total payout ratio for 2026 (dividends + buybacks).
Operating expense guidance for 2026 of ~$3.275B on an assumed ~$2.3T AUM exit; hybrid platform implementation costs estimated $10M–$15M per quarter in 2026 with expected run-rate incremental cost of ~$60M in 2027 (excluding implementation). Management expects continued margin expansion toward high-30s over time.
Welcome to the Invesco Ltd.'s First Quarter Earnings Conference Call. All participants will be in a listen-only mode until the question and answer session. This call will last one hour. To allow more participants to ask questions, one question and a follow-up can be submitted per participant. As a reminder, today's call is being recorded. Now I would like to turn the call over to Gregory Wade Ketron, Invesco Ltd.'s Head of Investor Relations.
Thanks, Operator, and to all of you joining us on the call today. In addition to the press release, we have provided a presentation that covers the topics we plan to address. The press release and presentation are available on our website, invesco.com. This information can be found by going to the Investor Relations section of the website. Our presentation today will include forward-looking statements and certain non-GAAP financial measures. Please review the disclosures on slide two as well as the appendix for the appropriate reconciliations to GAAP. Finally, Invesco Ltd. is not responsible for the accuracy of our earnings transcripts provided by third parties.
The only authorized webcasts are located on our website. Andrew Ryan Schlossberg, President and CEO, and Laura Allison Dukes, Chief Financial Officer, will present our results this morning and then we will open up the call for questions. I will now turn the call over to Andrew Ryan Schlossberg.
Thank you, Gregory Wade Ketron, and good morning to everyone. I am pleased to be speaking with you today. Before we review this quarter's results, I would like to reiterate our strategic ...