Q3 FY2026
Filed Oct 27, 2026Invesco Announces Third Quarter Diluted EPS of $0.65; Adjusted Diluted EPS of $0.72
Net revenues increased 4.0% sequentially and 16.5% year over year, adjusted operating income increased 12.8% sequentially and 38.5% year over year, and adjusted operating margin reached 40.7%. The company also reported $35.1 billion of net long-term inflows, ending AUM of $2,537.8 bn, and lower net debt.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Operating revenues, Q3-26GAAP | $1.87B | 2.6 % | 14.2 % |
| Investment management fees, Q3-26GAAP | $1,512.2 | 3.4 % | 27.6 % |
| Service and distribution fees, Q3-26GAAP | 313.2 | 1.1 % | (21.8 %) |
| Performance fees, Q3-26GAAP | 2.0 | (45.9 %) | (69.2 %) |
| Other operating revenues, Q3-26GAAP | 45.8 | (8.8 %) | (5.6 %) |
| Total operating expenses, Q3-26GAAP | 1,436.7 | (1.7 %) | 4.9 % |
| Third-party distribution, service and advisory expenses, Q3-26GAAP | 643.7 | 2.6 % | 15.3 % |
| Employee compensation expense, Q3-26GAAP | 493.8 | (9.7 %) | (5.3 %) |
| Marketing expense, Q3-26GAAP | 35.9 | (2.2 %) | 78.6 % |
| Property, office and technology expense, Q3-26GAAP | 105.9 | (3.1 %) | (3.0 %) |
| General and administrative expense, Q3-26GAAP | 149.4 | 11.9 % | (1.3 %) |
| Amortization of intangible assets, Q3-26GAAP | 8.0 | (1.2 %) | (11.1 %) |
| Operating income, Q3-26GAAP | $436.5M | 19.9 % | 61.1 % |
| Operating margin, Q3-26GAAP | 23.3 % | – | – |
| Net income, Q3-26GAAP | 355.6 | 4.9 % | (0.2 %) |
| Net income attributable to Invesco Ltd., Q3-26GAAP | $294.5M | (14.7 %) | (2.3 %) |
| Diluted EPS, Q3-26GAAP | $0.65 | (14.5 %) | (1.5 %) |
| Net revenues, Q3-26non-GAAP | $1.38B | 4.0 % | 16.5 % |
| Adjusted operating expenses, Q3-26non-GAAP | $819.4M | – | – |
| Adjusted operating income, Q3-26non-GAAP | $562.3M | 12.8 % | 38.5 % |
| Adjusted operating margin, Q3-26non-GAAP | 40.7 % | – | – |
| Adjusted net income attributable to Invesco Ltd., Q3-26non-GAAP | $326.4M | 1.3 % | 18.5 % |
| Adjusted diluted EPS, Q3-26non-GAAP | $0.72 | 1.4 % | 18.0 % |
| Effective tax rate, Q3-26GAAP | 23.3% | – | – |
| Effective tax rate on adjusted net income, Q3-26non-GAAP | 25.1% | – | – |
| Net long-term flows, Q3-26other | $35.1B | (22.2 %) | – |
| Total net flows, Q3-26other | $88.5B | 41.1 % | – |
| Annualized long-term organic growth rate, Q3-26other | 6.3% | – | – |
| Ending AUM, Q3-26other | $2.54T | 2.7 % | 19.4 % |
| Average AUM, Q3-26other | $2.51T | 6.0 % | 21.8 % |
| Ending long-term AUM, Q3-26other | $2.23T | 0.6 % | 47.4 % |
| Average long-term AUM, Q3-26other | $2.22T | 4.3 % | 53.1 % |
| Average QQQ AUM, Q3-26other | $480.3B | 6.2 % | 32.5 % |
| Headcount, Q3-26other | 7,416 | 0.1 % | (11.4 %) |
| Cash flows from operating activities, Q3-26 excluding CIPnon-GAAP | 654.6 | – | – |
| Cash flows from operating activities, nine months ended September 30, 2026 excluding CIPnon-GAAP | 1,227.1 | – | – |
Capital returns
- During the third quarter of 2026, the company repurchased 2.1 million common shares for $65 million in the open market.
- Dividends paid: $98.4 million (common); $37.0 million (preferred).
- The company is announcing a third quarter cash dividend of $0.215 per share to holders of common shares. The dividend is payable on December 2, 2026 to common shareholders of record at the close of business on November 13, 2026.
- The company is announcing a preferred cash dividend of $14.75 per share representing the period from September 1, 2026 through November 30, 2026. The preferred dividend is payable on December 1, 2026.
- Repurchased $1.5 billion of the company's outstanding Series A Preferred Stock held by MassMutual on October 26, 2026, funded through a $1.5 billion five-year floating-rate bank term loan.
- Common shares outstanding (end of period): 439.5 million.
- Diluted common shares outstanding (end of period): 451.4 million.
What drove it
- Net long-term inflows were primarily driven by ETFs and Index, QQQ, Multi-Asset/Other and China JV.
- Investment management fees increased $50.4 million sequentially, primarily driven by higher average AUM, partially offset by the Sale of the Canadian Management Agreements.
- Net revenues increased $52.6 million sequentially primarily due to higher average AUM and higher performance fees earned by the China joint venture, partially offset by the Sale of the Canadian Management Agreements.
- Employee compensation expenses decreased $52.9 million sequentially, primarily reflecting lower deferred compensation expense.
- Year-over-year investment management fees increased $327.5 million, primarily driven by management fees for QQQ following its conversion to an open-end fund ETF in the fourth quarter of 2025 and higher average AUM.
- ETFs and Index generated $28.5 billion of net long-term flows, QQQ generated $6.7 billion, Multi-Asset/Other generated $3.3 billion, and China JV generated $1.5 billion.
Concerns
- Net long-term flows of $35.1 billion were below $45.1 billion in the second quarter.
- Fundamental Fixed Income had net long-term outflows of $2.6 billion, Fundamental Equities had net long-term outflows of $1.9 billion, and Private Markets had net long-term outflows of $0.4 billion.
- Performance fees were $2.0, down (45.9 %) from Q2-26 and down (69.2 %) from Q3-25.
- Service and distribution fees were 313.2, down (21.8 %) from Q3-25.
- Net income attributable to Invesco Ltd. was $294.5 m, down (14.7 %) from Q2-26 and (2.3 %) from Q3-25.
- Market losses decreased AUM by $26.4 billion during the third quarter.
What to watch
- Net long-term flows across ETFs and Index, QQQ, Fundamental Fixed Income, Fundamental Equities and Private Markets.
- The sustainability of the 40.7% adjusted operating margin and the effect of higher average AUM on net revenues.
- The impact of the $1.5 billion five-year floating-rate bank term loan used for the October 26, 2026 preferred-stock repurchase.
- The remaining $1 billion of Series A Preferred Stock held by MassMutual.
- Money market fund flows, which were $52.9 billion during the quarter.
Balance sheet and cash flow
- Cash and cash equivalents: $965.5 million at September 30, 2026 ($915.4 million as of June 30, 2026).
- Debt: $1,281.3 million at September 30, 2026 ($1,624.0 million at June 30, 2026).
- The credit facility balance was $393.0 million as of September 30, 2026 ($736.0 million at June 30, 2026).
- Net Debt: $315.8 million at September 30, 2026 ($708.6 million at June 30, 2026).
- Cash flows from investing activities for the three months ended September 30, 2026 excluding CIP were $(51.5).
- Cash flows from financing activities for the three months ended September 30, 2026 excluding CIP were $(553.4).
- Total assets at September 30, 2026 were $27,645.5, and total liabilities were $14,017.0.
Analysis
Invesco reported stronger underlying operating results in Q3 2026. U.S. GAAP operating revenues were $1,873.2 m, up 2.6 % from Q2-26 and 14.2 % from Q3-25. Non-GAAP net revenues were $1,381.7 m, up 4.0 % sequentially and 16.5 % year over year. Higher average AUM and QQQ-related management fees supported growth, while service and distribution fees remained below the prior-year period following the elimination of QQQ pass-through service revenues after its conversion.
Profitability improved materially. GAAP operating income was $436.5 m and GAAP operating margin was 23.3 %, compared with $364.2 m and 19.9 % in Q2-26. Adjusted operating income reached $562.3 m and adjusted operating margin reached 40.7 %, versus $498.7 m and 37.5 % in Q2-26. Sequential adjusted operating expense reduction was supported by lower employee compensation expense, while adjusted marketing and general and administrative costs remained above the prior-year period due in part to QQQ advertising and outsourced administration costs.
Flows and AUM remained constructive, although long-term flows moderated sequentially. Net long-term flows were $35.1 billion, compared with $45.1 billion in Q2-26, while total net flows were $88.5 billion, including $52.9 billion of money market fund inflows. ETFs and Index, QQQ, Multi-Asset/Other and China JV were sources of long-term inflows, while Fundamental Fixed Income, Fundamental Equities and Private Markets recorded outflows. Ending AUM was $2,537.8 bn, up 2.7 % sequentially and 19.4 % from Q3-25, despite $26.4 billion of market losses in the quarter.
GAAP net income attributable to Invesco Ltd. and diluted EPS declined sequentially to $294.5 m and $0.65, respectively. The release cited other gains/(losses), net of $(34.2) million, primarily driven by market value changes in deferred compensation and other investments. Adjusted net income attributable to Invesco Ltd. increased to $326.4 m and adjusted diluted EPS increased to $0.72. The GAAP effective tax rate was 23.3%, compared with 25.6% in Q2-26, while the adjusted effective tax rate was 25.1%.
Capital allocation focused on reducing leverage and retiring preferred equity. Net debt declined to $315.8 million at September 30, 2026 from $708.6 million at June 30, 2026, alongside $65 million of common-share repurchases. On October 26, 2026, Invesco repurchased $1.5 billion of Series A Preferred Stock held by MassMutual, funded through a $1.5 billion five-year floating-rate bank term loan. The release did not provide forward financial guidance.
Management, verbatim
We generated 6% annualized organic growth, driven by $35 billion of net long-term inflows, alongside $47 billion of global liquidity net inflows. This marks our 13th consecutive quarter of net long-term inflows.
Andrew Schlossberg, President and CEO
On a sequential basis, net revenue increased 4% and operating expenses declined 1%, driving operating income growth of 13% and expanding operating margin by more than three percentage points to 40.7%.
Andrew Schlossberg, President and CEO
Not in the filing
stated, not guessed- Forward financial guidance was not provided.
- Previous-release outlook was not provided, so no comparison with prior guidance is available.
- Free cash flow was not reported.
- Gross margin was not reported.
- Revenue by reportable operating segment was not reported.
- GAAP operating cash flow for the three months ended September 30, 2026 was reported in a supplemental table, but free cash flow was not reported.
AlphAI 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.