Franklin Templeton, Inc. — Q4 FY2026 Earnings Summary

Financial Performance

• Preliminary net income for the quarter ended September 30, 2026, was $380.1 million ($0.72 per diluted share), compared to $171.5 million ($0.31) in the previous quarter and $117.6 million ($0.21) in the prior year quarter.
• Preliminary net income for the fiscal year ended September 30, 2026, was $1,075.3 million ($1.97 per diluted share), a 105% increase from $524.9 million ($0.91) in the prior fiscal year.
• Operating income for the quarter was $355.8 million, up 317% year-over-year from $85.4 million and 65% sequentially from $215.8 million; operating margin was 14.6% compared to 3.6% prior year and 9.2% previous quarter.
• Operating income for the fiscal year was $1,175.9 million, a 95% increase from $604.1 million in the prior year; operating margin was 12.5% compared to 6.9% prior year.
• Total operating revenues for the quarter were $2,434.9 million, up 4% year-over-year and 3% sequentially; fiscal year revenues were $9,415.3 million, up 7% year-over-year.
• Adjusted net income for the quarter was $493.4 million ($0.94 per diluted share), up 38% year-over-year and 28% sequentially; fiscal year adjusted net income was $1,642.6 million ($3.07 per diluted share), up 37% year-over-year.
• Adjusted operating income for the quarter was $598.6 million, up 27% year-over-year and 18% sequentially; fiscal year adjusted operating income was $2,019.4 million, up 23% year-over-year.
• Adjusted operating margin for the quarter was 31.8% compared to 26.0% prior year and 28.0% previous quarter; fiscal year adjusted operating margin was 28.0% compared to 24.5% prior year.
• Cash and cash equivalents were $6.0 billion; including direct investments in consolidated investment products (CIPs), total cash and investments were $7.4 billion.
• Total stockholders' equity was $13.2 billion with 512.5 million shares of common stock outstanding.

Guidance and Future Outlook

• Management anticipates significant opportunities in fiscal year 2027 driven by growing demand for private markets, customized solutions, and innovative investment vehicles.
• The company aims to deliver integrated solutions as a trusted strategic partner, leveraging broad investment expertise across public and private markets and global reach.
• The company remains focused on increasing its adjusted operating margin ahead of plan while continuing to invest in the future.

Business Segments and Product Lines

• Total Assets Under Management (AUM) reached $1.8 trillion at September 30, 2026, an 8% increase year-over-year.
• Long-term net inflows for the quarter were $20.8 billion, bringing full-year long-term net inflows to $84.1 billion, with positive flows in every quarter across all regions and 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% year-over-year 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 for the fiscal year.
• Equity AUM was $763.8 billion, Fixed Income AUM was $427.6 billion, and Multi-Asset AUM was $223.5 billion.
• Institutional pipeline of won-but-unfunded mandates remained strong at $22.0 billion.

Market and Competitive Landscape

• The company reported positive net flows in every quarter of fiscal year 2026 across all regions and in both retail and institutional channels.
• Equity, multi-asset, and alternatives segments each generated net inflows and reached record AUM levels.
• The company highlighted the strength of its global distribution platform and investment capabilities.

Risks and Challenges

• The press release references standard forward-looking statement risks including market and volatility risks, investment performance, reputational risks, global operational risks, competition, distribution risks, third-party risks, technology and security risks, human capital risks, cash management risks, and legal and regulatory risks.
• Specific financial impacts mentioned include negative market changes, distributions, and other totaling $11.3 billion in the quarter and $2.8 billion in cash management net outflows for the fiscal year.

Management Commentary and Tone

• CEO Jenny Johnson 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 broad-based momentum, record AUM across key growth areas, and progress against the five-year strategic plan.
• The tone was confident, highlighting the ability to bring full breadth of investment capabilities to clients globally and create long-term value.

Other Key Points

• The company returned $1.2 billion to shareholders through dividends and share repurchases during the fiscal year.
• During the quarter ended September 30, 2026, the company repurchased 2.5 million shares of common stock for a total cost of $86.1 million.
• Dividends declared per share for the quarter were $0.33, compared to $0.32 in the prior year quarter; fiscal year dividends were $1.32 per share compared to $1.28.
• Long-term net inflows for the quarter included $3.3 billion of long-term reinvested distributions; fiscal year inflows included $39.5 billion of reinvested distributions.
• AUM increased $133.9 billion during the fiscal year, driven by $84.1 billion in long-term net inflows, $46.4 billion in net market change, distributions, and other, and $6.2 billion from acquisitions, partially offset by $2.8 billion in cash management net outflows.
• Western Asset Management (WAM) contributed $11.7 billion in long-term net outflows to the fiscal year total.
• Effective fiscal year 2026, non-fee generating uncalled capital commitments are reflected in long-term inflows in the period the capital is committed.
• Effective January 1, 2026, Asia-Pacific includes India.
• Effective fiscal year 2026, Cayman-domiciled money market fund assets are included in United States AUM.