Franklin Templeton, Inc. — Fourth Quarter and Fiscal Year 2026 Earnings Summary

Financial Performance:

• Reported preliminary net income of $380.1 million ($0.72 per diluted share) for the quarter ended September 30, 2026, compared to $171.5 million ($0.31 per share) in the previous quarter and $117.6 million ($0.21 per share) in the prior year quarter.
• Preliminary net income for the fiscal year ended September 30, 2026, was $1,075.3 million ($1.97 per share), compared to $524.9 million ($0.91 per share) in the prior fiscal year.
• Operating income was $355.8 million for the quarter (14.6% margin), up from $215.8 million (9.2% margin) in the previous quarter and $85.4 million (3.6% margin) in the prior year quarter.
• Fiscal year operating income was $1,175.9 million (12.5% margin), compared to $604.1 million (6.9% margin) in the prior year.
• Operating revenues were $2,434.9 million for the quarter (up 3% QoQ, 4% YoY) and $9,415.3 million for the fiscal year (up 7% YoY).
• Adjusted net income was $493.4 million ($0.94 per diluted share) for the quarter, compared to $386.3 million ($0.72 per share) in the previous quarter and $357.5 million ($0.67 per share) in the prior year quarter.
• Fiscal year adjusted net income was $1,642.6 million ($3.07 per share), compared to $1,195.8 million ($2.22 per share) in the prior fiscal year.
• Adjusted operating income was $598.6 million for the quarter (31.8% adjusted margin), compared to $508.9 million (28.0% margin) in the previous quarter and $472.4 million (26.0% margin) in the prior year quarter.
• Fiscal year adjusted operating income was $2,019.4 million (28.0% adjusted margin), compared to $1,640.2 million (24.5% margin) in the prior fiscal year.
• Total stockholders' equity was $13.2 billion at September 30, 2026.
• Cash and cash equivalents were $6.0 billion; including direct investments in consolidated investment products (CIPs), total cash and investments were $7.4 billion.
• The Company repurchased 2.5 million shares for $86.1 million during the quarter.

Guidance and Future Outlook:

• Management identified significant opportunities in fiscal year 2027 driven by growing demand for private markets, customized solutions, and innovative investment vehicles.
• The Company highlighted its broad investment expertise across public and private markets and global reach as positioning factors to deliver integrated solutions.
• Management noted progress against its five-year strategic plan, citing broad-based momentum across investment capabilities and global distribution.

Business Segments and Product Lines:

• Total Assets Under Management (AUM) increased 8% year-over-year to $1.8 trillion, ending the quarter at $1,795.1 billion.
• Generated $20.8 billion in long-term net inflows during the fourth quarter, bringing full-year long-term net inflows to $84.1 billion.
• Positive net flows were recorded in every quarter of the fiscal year across all regions and both retail and institutional channels.
• Alternative AUM reached a record $304.6 billion, with $48.7 billion in fundraising for the fiscal year, including $43.2 billion in private markets.
• ETF AUM increased 73% to $84.6 billion.
• Retail SMA AUM grew 19% to $196.3 billion.
• Canvas AUM doubled to $32.6 billion.
• International AUM reached approximately $525 billion, with $29.0 billion in long-term net inflows.
• Equity, multi-asset, and alternatives each generated net inflows and reached record AUM levels.
• The institutional pipeline of won-but-unfunded mandates remained strong at $22.0 billion.
• AUM by asset class at quarter-end: Equity ($763.8 billion), Fixed Income ($427.6 billion), Alternatives ($304.6 billion), Multi-Asset ($223.5 billion), and Cash Management ($75.6 billion).
• AUM by region: United States ($1,272.3 billion), Europe, Middle East and Africa ($226.1 billion), Asia-Pacific ($191.7 billion), and Americas excluding U.S. ($105.0 billion).

Market and Competitive Landscape:

• The Company demonstrated the breadth of its investment capabilities and global distribution platform through record AUM across key growth areas.
• The institutional pipeline of won-but-unfunded mandates ($22.0 billion) indicates strong competitive positioning for future funding.
• The Company noted the inclusion of India in the Asia-Pacific region effective January 1, 2026, and the reclassification of Cayman-domiciled money market fund assets to the United States effective fiscal year 2026.

Risks and Challenges:

• The press release includes a standard "Forward-Looking Statements" section warning of risks including market and volatility risks, investment performance and reputational risks, global operational risks, competition and distribution risks, third-party risks, technology and security risks, human capital risks, cash management risks, and legal and regulatory risks.
• Specific financial challenges noted in the quarter included a negative impact of $11.3 billion from net market change, distributions, and other, and $6.0 billion in cash management net outflows, which offset inflows.
• The Company incurred $100.0 million in charges related to significant regulatory settlements in the prior quarter (ended June 30, 2026), which were excluded from adjusted measures.

Management Commentary and Tone:

• Jenny Johnson, CEO, stated the Company delivered "strong fourth quarter and fiscal year 2026 results, reflecting the momentum across our business and continued execution of our strategy."
• Management emphasized being "disciplined in managing expenses while continuing to invest in the future, including strategic acquisitions to enhance our capabilities."
• The tone was confident, highlighting the achievement of record AUM across alternatives, ETFs, retail SMAs, Canvas, and the international business.
• Management expressed focus on putting clients first, delivering strong investment outcomes, and creating long-term value for clients, shareholders, and employees.

Other Key Points:

• The Company returned $1.2 billion to shareholders through dividends and share repurchases during the quarter.
• Dividends declared per share were $0.33 for the quarter and $1.32 for the fiscal year.
• The Company provided supplemental non-GAAP financial measures including adjusted operating income, adjusted operating margin, adjusted net income, and adjusted diluted earnings per share.
• Adjusted operating revenues exclude elimination of operating revenues upon consolidation of investment products, acquisition-related pass-through performance fees, and sales/distribution fees allocated to cover intermediary expenses.
• Adjusted net income excludes activities of CIPs, acquisition-related items, special termination benefits, deferred compensation plan impacts, minority interest impacts, unrealized investment gains/losses, and regulatory settlement charges.
• Conference call information was provided for management commentary and Q&A on November 6, 2026.