T. Rowe Price Group — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net revenues were $2,004.9 million, an increase of 5.9% year-over-year (YoY) from $1,893.5 million in Q3 2025 and 5.1% from $1,907.4 million in Q2 2026.
• Investment advisory fees were $1,796.4 million, up 5.8% YoY and 3.0% sequentially.
• Performance-based advisory fees were $7.3 million, up 14.1% YoY and 12.3% sequentially.
• Operating expenses were $1,235.1 million, a decrease of 1.2% YoY and 9.6% sequentially.
• Adjusted operating expenses were $1,200.1 million, an increase of 5.8% YoY and a decrease of 0.3% sequentially.
• Net operating income was $769.8 million, up 19.7% YoY and 42.4% sequentially.
• Net income attributable to T. Rowe Price Group, Inc. was $612.3 million, a decrease of 5.2% YoY and 3.1% sequentially.
• Diluted earnings per share (EPS) were $2.79, down 2.8% YoY and 3.1% sequentially.
• Adjusted diluted EPS was $2.86, up 1.8% YoY and 11.3% sequentially.
• Non-operating income was $17.6 million, compared to $238.4 million in Q3 2025 and $369.1 million in Q2 2026.
• Effective income tax rate for the nine months ended September 30, 2026, was 23.7% (U.S. GAAP) and 24.0% (Adjusted).
• Cash and cash equivalents were $3,774.3 million at September 30, 2026, compared to $3,378.2 million at December 31, 2025.
• Total assets were $16,148.9 million at September 30, 2026, compared to $14,341.8 million at December 31, 2025.

Guidance and Future Outlook:

• The firm estimates its effective income tax rate for the full year 2026 will be in the range of 23.5% to 25.5% on both U.S. GAAP and adjusted bases.
• Management stated the firm is "well positioned to continue delivering long-term value for clients and stockholders" through innovative product launches, improving investment performance, and strategic partnerships.
• The firm is expanding its ETF, SMA, and model portfolio businesses to extend active investment expertise to more clients.

Business Segments and Product Lines:

• Assets under management (AUM) ended at $1.86 trillion (specifically $1,862.7 billion), down $30.7 billion from the beginning of the period.
• Net client outflows were $28.3 billion.
• Equity AUM was $896.3 billion at period end; Fixed income, including money market, was $221.8 billion; Multi-asset was $680.6 billion; Alternatives was $64.0 billion.
• Investment advisory fees by segment (YoY change): Equity up 3.5%, Fixed income up 7.8%, Multi-asset up 9.2%, Alternatives up 9.4%.
• Average AUM was $1,887.2 billion, up 9.5% YoY and 2.7% sequentially.
• Investment advisory annualized effective fee rate (EFR) excluding performance-based fees was 37.8 basis points, down 1.3 bps YoY and 0.3 bps sequentially.
• Assets under administration were $346 billion, of which $186 billion were assets the firm manages.
• Multi-asset investment division assets were $31.4 billion at September 30, 2026.
• Unfunded capital commitments for alternatives strategies were $19.0 billion at September 30, 2026.

Market and Competitive Landscape:

• Investors domiciled outside the United States accounted for 9.3% of AUM at September 30, 2026.
• Client flows and transfers drove a mix shift in AUM toward lower fee products and asset classes, partially offset by equity market appreciation.
• Rising interest rates resulted in losses on fixed income holdings, which more than offset higher dividends on cash equivalents and other fixed income holdings in the non-operating investment portfolio.

Risks and Challenges:

• The firm faces market volatility impacting AUM and investment gains/losses, as evidenced by the $30.7 billion decrease in AUM and significant fluctuations in non-operating income.
• Rising interest rates negatively impacted the firm's fixed income holdings within its discretionary investment portfolio.
• The firm notes that future results could be affected by industry or market conditions, regulatory developments, and changes in effective fee rates.

Management Commentary and Tone:

• Rob Sharps, Chair and CEO, commented: "We continue to expand our ETF, SMA, and model portfolio businesses, extending our active investment expertise to more clients through a broader range of portfolio solutions."
• Management highlighted progress on strategic partnerships and innovative product launches as key drivers for future value.
• The tone regarding expense management was proactive, noting a "broad and ongoing expense management program" to reduce expense growth and realign resources.

Other Key Points:

• The firm employed 7,640 associates at September 30, 2026, a decrease of 2.4% from 7,830 associates at September 30, 2025.
• A restructuring charge of $4.0 million was recorded in Q3 2026 related to the ongoing expense management program.
• Capital allocation-based income was $59.9 million, driven by a $63.1 million increase in accrued carried interest (primarily from a recently launched late-stage venture fund) and acquisition-related amortization/impairments of $(3.2) million.
• Deferred compensation liabilities were $1,255.4 million at September 30, 2026.
• Non-controlling interests were $1,242.1 million at September 30, 2026.
• The firm expects to file its Form 10-Q for the third quarter of 2026 with the SEC later on the release date.