Franklin Resources, Inc. Announces Preliminary Fourth Quarter and Fiscal Year Results

SAN MATEO, Calif.–(BUSINESS WIRE)–Franklin Resources, Inc. (the “Company”) [NYSE: BEN ] today announced preliminary net income¹ of $117.6 million or $0.21 per diluted share for the quarter ended September 30, 2025, as compared to net income of $92.3 million or $0.15 per diluted share for the previous quarter, and net loss of $84.7 million or $0.19 per diluted share for the quarter ended September 30, 2024. Preliminary net income¹ for the fiscal year ended September 30, 2025 was $524.9 million or $0.91 per diluted share, as compared to $464.8 million or $0.85 per diluted share for the prior fiscal year. Preliminary operating income was $85.4 million for the quarter ended September 30, 2025, as compared to operating income of $154.1 million for the previous quarter and operating loss of $150.7 million for the prior year.

As supplemental information, the Company is providing certain adjusted performance measures which are based on methodologies other than generally accepted accounting principles. Preliminary adjusted net income² was $357.5 million and adjusted diluted earnings per share² was $0.67 for the quarter ended September 30, 2025, as compared to $263.4 million and $0.49 for the previous quarter, and $315.2 million and $0.59 for the quarter ended September 30, 2024. Preliminary adjusted net income² was $1,195.8 million and adjusted diluted earnings per share² was $2.22 for the fiscal year ended September 30, 2025, as compared to $1,276.7 million and $2.39 for the prior fiscal year. Preliminary adjusted operating income² was $472.4 million for the quarter ended September 30, 2025, as compared to $377.8 million for the previous quarter and $451.6 million for the prior year.

“Franklin Templeton delivered solid fourth quarter and fiscal year 2025 results, demonstrating continued growth and diversification across our global platform,” said Jenny Johnson, Chief Executive Officer of Franklin Resources, Inc. “Momentum continued in the fourth quarter with progress across key growth areas. Long-term inflows increased across every asset class to $84.6 billion, an increase of 12% from the prior quarter. Long-term net outflows totaled $11.9 billion. Excluding Western Asset Management, we had $11.4 billion in net inflows, our eighth consecutive quarter of positive flows, excluding Western Asset. Importantly, our institutional pipeline of won-but-unfunded mandates remains healthy at $20.4 billion following record fundings in the quarter.

“This fiscal year, we successfully executed on our long-term corporate priorities, delivering growth across public and private markets as clients look to us as a trusted partner for comprehensive investment solutions. Excluding Western Asset, we experienced $44.5 billion in long-term net inflows, including $25.7 billion in multi-asset and alternative strategies. We saw record growth in retail SMAs, ETFs and Canvas®, each delivering positive net flows with double-digit assets under management (“AUM”) growth rates. Alternative AUM reached a record $270 billion after closing the Apera Asset Management acquisition and strong fundraising of $26.2 billion, including $22.9 billion in private markets.

“As the industry continues to evolve, we remain disciplined in managing expenses while investing for the future. Our balance sheet continues to provide financial flexibility, with $6.7 billion in cash and investments. During the fiscal year, $930 million was returned to shareholders through dividends and share repurchases.

“As we enter fiscal 2026, we are confident that our business strategy positions us well to capture the long-term trends reshaping our industry across public and private markets. Our broad investment expertise, global scale and client-first culture allow us to create lasting value for clients and shareholders alike. I would like to thank our dedicated employees around the world for all their efforts this past year.”

Total AUM was $1,661.2 billion at September 30, 2025, up $49.4 billion during the quarter due to the positive impact of $54.1 billion of net market change, distributions, and other, and $7.2 billion of cash management net inflows, partially offset by $11.9 billion of long-term net outflows, inclusive of $23.3 billion of long-term net outflows at Western. Long-term net outflows for the quarter include $3.0 billion of long-term reinvested distributions. AUM decreased $17.4 billion during the fiscal year due to $97.4 billion of long-term net outflows, inclusive of $141.9 billion of long-term net outflows at Western, and $0.2 billion from the disposition of funds, partially offset by the positive impact of $67.6 billion of net market change, distributions, and other, and $12.6 billion of cash management net inflows. Long-term net outflows for the fiscal year include $30.4 billion of long-term reinvested distributions.

Cash and cash equivalents and investments were $5.5 billion and, including the Company’s direct investments in consolidated investment products (“CIPs”), were $6.7 billion⁴ at September 30, 2025. Total stockholders’ equity was $13.0 billion and the Company had 521.0 million shares of common stock outstanding at September 30, 2025. The Company repurchased 2.6 million shares of its common stock for a total cost of $67.1 million during the quarter ended September 30, 2025.

Conference Call Information

A written commentary on the results by Jenny Johnson, CEO; Daniel Gamba, Co-President and Chief Commercial Officer; Matthew Nicholls, Co-President, CFO and COO; and Adam Spector, CEO of Fiduciary Trust International; will be available via investors.franklinresources.com today at approximately 8:30 a.m. Eastern Time.

Ms. Johnson and Messrs. Gamba, Nicholls, and Spector will also lead a live teleconference today at 11:00 a.m. Eastern Time to answer questions. Access to the teleconference will be available via investors.franklinresources.com or by dialing (+1) (877) 407-0989 in North America or (+1) (201) 389-0921 in other locations. A replay of the teleconference can also be accessed by calling (+1) (877) 660-6853 in North America or (+1) (201) 612-7415 in other locations using access code 13756384 after 2:00 p.m. Eastern Time on November 7, 2025 through November 14, 2025, or via investors.franklinresources.com.

Analysts and investors are encouraged to review the Company’s recent filings with the U.S. Securities and Exchange Commission and to contact Investor Relations at [email protected] before the live teleconference for any clarifications or questions related to the earnings release or written commentary.

Supplemental Non-GAAP Financial Measures

As supplemental information, we are providing performance measures for “adjusted operating income,” “adjusted operating margin,” “adjusted net income” and “adjusted diluted earnings per share,” each of which is based on methodologies other than generally accepted accounting principles (“non-GAAP measures”). Management believes these non-GAAP measures are useful indicators of our financial performance and may be helpful to investors in evaluating our relative performance against industry peers.

“Adjusted operating income,” “adjusted operating margin,” “adjusted net income” and “adjusted diluted earnings per share” are defined below, followed by reconciliations of operating income (loss), operating margin, net income (loss) attributable to Franklin Resources, Inc. and diluted earnings (loss) per share on a U.S. GAAP basis to these non-GAAP measures. Non-GAAP measures should not be considered in isolation from, or as substitutes for, any financial information prepared in accordance with U.S. GAAP, and may not be comparable to other similarly titled measures of other companies. Additional reconciling items may be added in the future to these non-GAAP measures if deemed appropriate.

Adjusted Operating Income

We define adjusted operating income as operating income (loss) adjusted to exclude the following:

• Elimination of operating revenues upon consolidation of investment products.
• Acquisition-related items:
  • Acquisition-related retention compensation.
  • Other acquisition-related expenses including professional fees, technology costs and fair value adjustments related to contingent consideration assets and liabilities.
  • Amortization of intangible assets.
  • Impairment of intangible assets and goodwill, if any.
• Special termination benefits and other expenses related to workforce optimization initiatives related to past acquisitions and certain initiatives undertaken by the Company.
• Impact on compensation and benefits expense from gains and losses on investments related to deferred compensation plans, which is offset in investment and other income (losses), net.
• Impact on compensation and benefits expense related to minority interests in certain subsidiaries, which is offset in net income (loss) attributable to redeemable noncontrolling interests.

Adjusted Operating Margin

We calculate adjusted operating margin as adjusted operating income divided by adjusted operating revenues. We define adjusted operating revenues as operating revenues adjusted to exclude the following:

• Elimination of operating revenues upon consolidation of investment products.
• Acquisition-related performance-based investment management fees which are passed through as compensation and benefits expense.
• Sales and distribution fees and a portion of investment management fees allocated to cover sales, distribution and marketing expenses paid to the financial advisers and other intermediaries who sell our funds on our behalf.

Adjusted Net Income and Adjusted Diluted Earnings Per Share

We define adjusted net income as net income (loss) attributable to Franklin Resources, Inc. adjusted to exclude the following:

• Activities of CIPs.
  • Acquisition-related items:
  • Acquisition-related retention compensation.
  • Other acquisition-related expenses including professional fees, technology costs and fair value adjustments related to contingent consideration assets and liabilities.
  • Amortization of intangible assets.
  • Impairment of intangible assets and goodwill, if any.
  • Interest expense for amortization of debt premium from acquisition-date fair value adjustment.
• Special termination benefits and other expenses related to workforce optimization initiatives related to past acquisitions and certain initiatives undertaken by the Company.
• Net gains or losses on investments related to deferred compensation plans which are not offset by compensation and benefits expense.
• Net compensation and benefits expense related to minority interests in certain subsidiaries not offset by net income (loss) attributable to redeemable noncontrolling interests.
• Unrealized investment gains and losses.
• Net income tax expense of the above adjustments based on the respective blended rates applicable to the adjustments.

We define adjusted diluted earnings per share as diluted earnings per share adjusted to exclude the per share impacts of the adjustments applied to net income in calculating adjusted net income.

In calculating our non-GAAP measures, we adjust for the impact of CIPs because it is not considered reflective of our underlying results of operations. Acquisition-related items and special termination benefits are excluded to facilitate comparability to other asset management firms. We adjust for compensation and benefits expense related to funded deferred compensation plans because it is partially offset in other income (expense), net. We adjust for compensation and benefits expense and net income (loss) attributable to redeemable noncontrolling interests to reflect the economics of certain profits interest arrangements. Sales and distribution fees and a portion of investment management fees generally cover sales, distribution and marketing expenses and, therefore, are excluded from adjusted operating revenues. In addition, when calculating adjusted net income and adjusted diluted earnings per share we exclude unrealized investment gains and losses included in investment and other income (losses) because the related investments are generally expected to be held long term.

The calculations of adjusted operating income, adjusted operating margin, adjusted net income and adjust

Contacts

Franklin Resources, Inc.

Investor Relations: Selene Oh (650) 312-4091, [email protected]
Media Relations: Jeaneen Terrio (212) 632-4005, [email protected]
investors.franklinresources.com

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