FRANKLIN RESOURCES INC (BEN): Results of Operations and Financial Condition
FRANKLIN RESOURCES INC (BEN) filed an SEC Form 8-K — Results of Operations and Financial Condition. EXHIBIT 99.1 Contact: Franklin Resources, Inc. Investor Relations: Selene Oh (650) 312-4091, selene.oh@franklintempleton.com Media Relations: Jeaneen Terrio (212) 632-4005, jeaneen.terrio@franklintempleton.com investors.franklinresources.com FOR IMMEDIATE RELEASE Franklin Resourc
How this was made
The 30-second read
Why it matters
Key decision inputs for traders are the quarterly earnings and adjusted EPS, AUM and long-term net inflows, and the announced capital return via share repurchases. The name change is a branding/corporate identity update with stated no effect on capital structure or trading ticker (BEN remains).
Market read
Fresh quarterly financials and flow data plus a scheduled corporate name change provide near-term catalysts for BEN, with buybacks and record AUM supporting sentiment.
What to watch
Western outflows are mentioned as partially offsetting cash management net outflows; traders may also scrutinize the size of the won-but-unfunded pipeline ($28.6B) for conversion risk.
Franklin Resources reported third-quarter operating revenues of $2,358.4 million, while GAAP operating income declined sequentially and adjusted operating income increased.
Operating revenues rose 14% year over year and long-term net inflows were $18.4 billion, but GAAP operating income declined 33% sequentially to $215.8 million and GAAP net income attributable to Franklin Resources declined 36% sequentially to $171.5 million.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Operating revenuesGAAP | $2,358.4 million | 3 % | 14 % |
| Investment management feesGAAP | $1,866.2 million | 3 % | 14 % |
| Sales and distribution feesGAAP | $404.5 million | 2 % | 15 % |
| Shareholder servicing feesGAAP | $74.3 million | 8 % | 24 % |
| Other operating revenuesGAAP | $13.4 million | 34 % | 18 % |
| Compensation and benefitsGAAP | $958.5 million | (1 %) | 6 % |
| Sales, distribution and marketingGAAP | $555.4 million | 2 % | 16 % |
| Information systems and technologyGAAP | $160.8 million | 2 % | (1 %) |
| OccupancyGAAP | $71.4 million | 6 % | 3 % |
| Amortization of intangible assetsGAAP | $50.7 million | 0 % | (55 %) |
| Impairment of intangible assetsGAAP | $33.0 million | NM | NM |
| General, administrative and otherGAAP | $312.8 million | 67 % | 70 % |
| Total operating expensesGAAP | $2,142.6 million | 9 % | 12 % |
| Operating incomeGAAP | $215.8 million | (33 %) | 40 % |
| Operating marginGAAP | 9.2 % | – | – |
| Investment and other income, netGAAP | $131.0 million | 134 % | 460 % |
| Interest expenseGAAP | $(23.5) million | 18 % | (9 %) |
| Investment and other income of consolidated investment products, netGAAP | $54.8 million | (43 %) | 53 % |
| Expenses of consolidated investment productsGAAP | $(7.2) million | (29 %) | (35 %) |
| Other income, netGAAP | $155.1 million | 27 % | 589 % |
| Income before taxesGAAP | $370.9 million | (17 %) | 110 % |
| Taxes on incomeGAAP | $115.6 million | 17 % | 93 % |
| Net incomeGAAP | $255.3 million | (26 %) | 119 % |
| Net income attributable to Franklin Resources, Inc.GAAP | $171.5 million | (36 %) | 86 % |
| Diluted earnings per shareGAAP | $0.31 | (37 %) | 107 % |
| Adjusted operating incomenon-GAAP | $508.9 million | 7 % | 35 % |
| Adjusted operating marginnon-GAAP | 28.0 % | – | – |
| Adjusted net incomenon-GAAP | $386.3 million | 0 % | 47 % |
| Adjusted diluted earnings per sharenon-GAAP | $0.72 | 1 % | 47 % |
| Ending assets under managementother | $1,791.6 billion | 7 % | 11 % |
| Average assets under managementother | $1,750.0 billion | 3 % | 12 % |
| Long-term net flowsother | $18.4 billion | – | – |
| Dividends declared per shareGAAP | $0.33 | 0% | 3 % |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Investment management feesNot separately disclosed. | $1,866.2 million | 3 % | 14 % |
| Sales and distribution feesNot separately disclosed. | $404.5 million | 2 % | 15 % |
| Shareholder servicing feesNot separately disclosed. | $74.3 million | 8 % | 24 % |
| OtherNot separately disclosed. | $13.4 million | 34 % | 18 % |
Capital returns
- Returned $521.5 million to shareholders during the quarter.
- Repurchased 10.4 million shares of common stock for a total cost of $348.1 million during the quarter ended June 30, 2026.
- Dividends declared per share were $0.33.
What drove it
- Total AUM increased by $109.5 billion during the quarter due to the positive impact of $98.0 billion of net market change, distributions, and other and $18.4 billion of long-term net inflows, partially offset by $7.0 billion of cash management net outflows.
- Long-term net inflows included $4.1 billion of long-term reinvested distributions.
- Alternative AUM reached a record $294.2 billion.
- The Company fundraised $11.8 billion, including $10.3 billion in private market strategies.
- Fiscal year-to-date private markets fundraising reached $33.0 billion.
- The institutional won-but-unfunded pipeline grew to a record $28.6 billion.
- International markets reached a record approximately $525 billion in AUM.
Concerns
- GAAP operating income declined 33% sequentially to $215.8 million.
- GAAP operating margin was 9.2%, compared with 14.1% in the previous quarter.
- Net income attributable to Franklin Resources, Inc. declined 36% sequentially to $171.5 million.
- General, administrative and other expense increased 67% sequentially to $312.8 million.
- The Company recorded $33.0 million of impairment of intangible assets during the quarter.
- Cash management net outflows were $7.0 billion, and Western had $1.1 billion of long-term net outflows.
What to watch
- Long-term net flows following $18.4 billion of quarterly inflows and $63.3 billion of fiscal year-to-date long-term net inflows.
- AUM development after ending AUM reached $1,791.6 billion.
- Alternative AUM and private markets fundraising following alternative AUM of $294.2 billion and $33.0 billion of fiscal year-to-date private markets fundraising.
- GAAP operating margin after the sequential decline to 9.2%.
- The corporate name change from Franklin Resources, Inc. to Franklin Templeton, Inc., effective August 17, 2026.
Balance sheet and cash flow
- Cash and cash equivalents and investments were $5.4 billion at June 30, 2026.
- Cash and cash equivalents and investments, including the Company’s direct investments in consolidated investment products, were $6.5 billion at June 30, 2026.
- Total stockholders’ equity was $12.9 billion at June 30, 2026.
- The Company had 507.5 million shares of common stock outstanding at June 30, 2026.
Analysis
Franklin Resources reported operating revenues of $2,358.4 million for the quarter ended June 30, 2026, up 14% from $2,064.0 million in the prior-year quarter and 3% from $2,294.9 million in the previous quarter. Investment management fees were $1,866.2 million, up 14% year over year and 3% sequentially. Sales and distribution fees, shareholder servicing fees, and other operating revenues also increased year over year and sequentially.
Flow and asset data were constructive. Ending AUM was $1,791.6 billion, up 7% from the prior quarter and 11% from the prior-year quarter. The Company reported $18.4 billion of long-term net inflows, including $4.1 billion of long-term reinvested distributions. It stated that the quarterly AUM increase reflected $98.0 billion of net market change, distributions, and other, together with long-term net inflows, partially offset by $7.0 billion of cash management net outflows.
GAAP profitability weakened sequentially despite the revenue increase. Operating income was $215.8 million, down 33% from $323.3 million in the previous quarter, and operating margin declined to 9.2% from 14.1%. Total operating expenses rose 9% sequentially to $2,142.6 million, with general, administrative and other expense increasing 67% to $312.8 million and impairment of intangible assets of $33.0 million. Net income attributable to Franklin Resources, Inc. was $171.5 million, down 36% sequentially, and diluted earnings per share were $0.31, down 37%.
The adjusted results presented a different sequential trend. Adjusted operating income was $508.9 million, up 7% from $474.6 million, while adjusted operating margin was 28.0% compared with 27.1%. Adjusted net income was $386.3 million, compared with $384.5 million in the prior quarter, and adjusted diluted earnings per share increased to $0.72 from $0.71.
Capital allocation remained active. The Company returned $521.5 million to shareholders, including $348.1 million spent to repurchase 10.4 million shares. Cash and cash equivalents and investments were $5.4 billion, or $6.5 billion including direct investments in consolidated investment products, and total stockholders’ equity was $12.9 billion. The filing did not provide forward financial guidance. Management also announced that the corporate name will change to Franklin Templeton, Inc. effective August 17, 2026, while the NYSE ticker will remain BEN.
Management, verbatim
Our third quarter results reflect the successful execution of our strategy and the strength of Franklin Templeton's diversified global platform,
Jenny Johnson, Chief Executive Officer of Franklin Resources, Inc.
We delivered $18.4 billion in long-term net inflows across public and private assets, bringing fiscal year-to-date long-term net inflows to $63.3 billion.
Jenny Johnson, Chief Executive Officer of Franklin Resources, Inc.
This quarter, we returned $521.5 million to shareholders, including $348.1 million in share repurchases.
Jenny Johnson, Chief Executive Officer of Franklin Resources, Inc.
Not in the filing
stated, not guessed- Forward revenue guidance
- Forward gross-margin guidance
- Forward operating-expense guidance
- Forward tax-rate guidance
- Prior outlook for comparison
- Gross margin
- Cash flow from operations
- Free cash flow
- Debt balance
- Full AUM and flows table, which is truncated in the provided filing text
- Written CFO commentary
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC 8-K (Item 2.02) with Exhibit 99.1 announcing Franklin Resources’ third quarter results for the quarter ended June 30, 2026, and announcing a corporate name change to Franklin Templeton effective Aug. 17, 2026.
Ticker impact
Franklin Resources reported Q3 results with net income $171.5M, adjusted EPS $0.72, and $18.4B long-term net inflows, plus a planned name change to Franklin Templeton.
Moderate positive bias for the next session, with follow-through dependent on how investors weigh adjusted earnings versus the drop in GAAP net income.
The filing provides fresh quarterly datapoints (income, adjusted measures, AUM, net flows) and a concrete capital return figure ($348.1M repurchases). The name change is explicitly stated as not affecting capital structure, limiting fundamental impact.
Market effects
Asset manager sentiment may improve if flows and AUM growth are interpreted as resilient demand for active and alternatives.
International AUM reaching about $525B could support broader global asset-management risk appetite.
Record AUM and private markets fundraising signals continued global allocation to alternatives, relevant for cross-border wealth and institutional flows.
Counterpoint
GAAP net income and operating income fell quarter-over-quarter, so the stock reaction may fade if investors focus on the GAAP decline rather than adjusted metrics.
Key entities
- public_companyFranklin Resources, Inc.
Reported Q3 results, record AUM, long-term net inflows, and announced a corporate name change to Franklin Templeton effective Aug. 17, 2026.
- executiveJenny Johnson
CEO quoted on strategy execution, net inflows, and shareholder returns.
