Adjusted EPS Growth
Adjusted EPS of $2.52 for Q1 2026, up 13% year-over-year and up 3% sequentially from Q4 2025, driven by higher revenue from increased average AUM, lower expenses, a lower tax rate, and reduced share count.
T Rowe Price
· TROW
April 30th, 2026
Summary
- Earnings Call Date:
- 2026-04-30
- Change Since:
- +3.48%
- Next Earnings Date:
- 2026-07-23
Earnings Call Sentiment
PositiveThe call balanced solid financial and product progress—13% YoY EPS growth, 5% revenue growth, AUM up ~9.6% YoY on average, strong ETF/SMA/target-date inflows, and notable alternatives momentum—with clear near-term headwinds: meaningful net outflows of $13.7B, compression of effective fees, challenged 1-year performance in several franchises, and elevated market/credit volatility. Management emphasized cost discipline, capital returns (dividend and buybacks), and strategic investments (ETFs, alternatives, partnerships) to offset flow and fee pressures.
Company Guidance
On guidance, management reiterated that 2026 adjusted operating expenses (excluding carried interest) are expected to be up 3%–6% versus 2025 (with 2025 operating expenses ≈ $4.6 billion), said it’s too early to narrow broader full‑year guidance, and noted the expense forecast remains comfortably within that range despite year‑to‑date market volatility; they pointed to Q1 results that support this stance — adjusted EPS $2.52 (+13% YoY, +3% QoQ), adjusted net revenue >$1.8B (+5% YoY), Q1 adjusted operating expenses ex‑carried interest $1.14B (+1% YoY, −7% QoQ), average AUM $1.78T (+9.6% YoY) with period‑end AUM $1.71T and $13.7B net outflows, cash & discretionary investments >$4.1B, $340M of stock repurchases in Q1 (YTD ~4M shares for just under $400M), and a raised quarterly dividend of $1.30 (40th consecutive annual increase).
Revenue and AUM Momentum
Adjusted net revenue > $1.8 billion, up 5% versus Q1 2025. Average AUM of $1.78 trillion was nearly flat sequentially and up 9.6% versus Q1 2025; ending AUM was $1.71 trillion.
Strong Flows in Targeted Businesses
Target Date franchise net inflows of $4.9 billion in the quarter; multi-asset, fixed income and alternatives delivered positive net flows. ETFs generated over $2.8 billion in net flows in Q1 and ETF AUM surpassed $25 billion. SMA platform grew to 42 offerings with >$17 billion AUM and over $900 million in net flows.
Product and Distribution Progress
Launched 2 ETFs in the quarter (now 32 ETFs total, 8 with scaled AUM ≥ $1 billion), progressing on Goldman Sachs collaboration and new vehicles (interval fund, Target Date sister series), planning first European ETF launches, and closed first T. Rowe Price-managed CLO in April to extend floating rate capabilities.
OHA / Alternatives Momentum
OHA total AUM of $112 billion as of March 31 (up from ~$88 billion at YE2024, ~+27%), record fundraising (largest fund $17.7 billion), nearly $40 billion capital raised in 2024–2025 combined, and >$30 billion of dry powder positioning the alternatives franchise to deploy into widened spreads and opportunities.
Expense Management and Capital Return
Q1 adjusted operating expenses (ex. carried interest) were $1.14 billion (1% above Q1 2025 and down 7% from Q4 2025), reflecting cost-savings programs. Strong balance sheet with >$4.1 billion cash and discretionary investments, 40th consecutive annual dividend increase to $1.30 per share, and $340 million of stock repurchases in Q1 (year-to-date ~4 million shares ~<$400 million).
Strong Fixed Income and Long-Term Performance
Fixed income funds outperformed on an asset-weighted basis across 1-, 3-, 5- and 10-year periods (over three quarters of funds outperforming). Long-term performance across other franchises remained strong (example: target date 3-, 5-, 10-year asset-weighted outperformance of 94%, 54%, and 98% respectively).
Operator
Good morning. My name is Victor, and I'll be your conference facilitator today. Welcome to T. Rowe Price's First Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded and will be available for replay on T. Rowe Price's website shortly after the call concludes. I will now turn the call over to Linsley Carruth, T. Rowe Price's Director of Investor Relations.
Linsley Carruth
Hello, and thank you for joining us today for our first quarter earnings call. The press release and a supplemental materials document can be found on our IR website at investors.troweprice.com. We'll start the call with our Chair CEO and President, Rob Sharps and CFO, Jen Dardis discussing the company results, after which [ Glenn August ], CEO of OHA, will provide an update on our alternatives business. Then we'll open it up to your questions at which time will be joined by Head of Global Investments, Eric Veiel. We ask that you limit it to one question per participant. I'd like to remind you that during the course of this call, we may make a number of forward-looking statements and reference certain non-GAAP financial measures. Please refer to the forward-looking statement language and the reconciliations to GAAP in the supplemental materials, as well as in our press release and 10-Q. Discussions related to the funds is intended to demonstrate their contribution to the organization's results and are not recognitions.
All investment performance references to peer groups on today's call are using Morningstar [indiscernible] for the quarter that ended March 31, 2026. Now ...
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