Q2 FY2026
Filed Jul 31, 2026T. Rowe Price Group Reports Second Quarter 2026 Results
Net revenues increased 10.7% from Q2 2025, GAAP net income increased 25.1%, adjusted diluted EPS increased 14.7%, and ending AUM reached $1.9 trillion. However, the firm recorded net client outflows of $6.5 billion, its effective fee rate declined, and fundamental active equity remained under pressure.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Investment advisory feesGAAP | $1,744.8 million | 3.7% | 11.3% |
| Capital allocation-based incomeGAAP | $11.9 million | – | – |
| Administrative, distribution, servicing, and other feesGAAP | $144.2 million | 4.2% | (3.7)% |
| Net revenuesGAAP | $1,907.4 million | 2.7% | 10.7% |
| Performance-based advisory feesGAAP | $6.5 million | (13.3)% | 1.6% |
| Operating expensesGAAP | $1,366.9 million | 16.2% | 9.8% |
| Net operating incomeGAAP | $540.5 million | (20.6)% | 13.0% |
| Non-operating income (loss)GAAP | $369.1 million | – | – |
| Net income - T. Rowe Price Group, Inc.GAAP | $632.0 million | 26.9% | 25.1% |
| Diluted earnings per common shareGAAP | $2.88 | 29.1% | 28.6% |
| Total adjusted operating expensesnon-GAAP | $1,203.2 million | 4.2% | 4.9% |
| Operating expenses, excluding accrued carried interest related compensationnon-GAAP | $1,194.9 million | 4.6% | 5.4% |
| Net operating incomenon-GAAP | $709.1 million | 0.4% | 15.4% |
| Non-operating income (loss)non-GAAP | $38.5 million | 24.6% | (18.3)% |
| Net income - T. Rowe Price Group, Inc.non-GAAP | $565.0 million | 0.5% | 11.5% |
| Diluted earnings per common sharenon-GAAP | $2.57 | 2.0% | 14.7% |
| Average assets under managementother | $1,837.7 billion | 3.5% | 15.7% |
| Ending assets under managementother | $1,893.4 billion | 10.7% | 12.9% |
| Investment advisory annualized effective fee rate without performance-based feesother | 38.1 bps | (0.3) | (1.5) |
| Investment advisory annualized effective fee rate with performance-based feesother | 38.2 bps | (0.4) | (1.5) |
| Compensation, benefits, and related costsGAAP | $675.9 million | 3.2% | 4.2% |
| Acquisition-related retention agreementsGAAP | $14.2 million | —% | 0.7% |
| Capital allocation-based income compensationGAAP | $6.8 million | (40.4)% | – |
| Market-related change in deferred compensation liabilitiesGAAP | $126.5 million | – | – |
| Total compensation and related costsGAAP | $823.4 million | 24.8% | 13.2% |
| Distribution and servicingGAAP | $106.1 million | 6.8% | 14.7% |
| Advertising and promotionGAAP | $20.3 million | 10.3% | (32.1)% |
| Product and recordkeeping related costsGAAP | $83.1 million | 11.8% | 11.1% |
| Technology, occupancy, and facility costsGAAP | $205.9 million | 0.7% | 5.6% |
| General, administrative, and other costsGAAP | $104.9 million | 13.5% | 11.7% |
| Acquisition-related amortization and impairment costsGAAP | $16.5 million | (8.3)% | (47.1)% |
| Restructuring chargeGAAP | $6.7 million | – | – |
| Change in accrued carried interestother | $15.2 million | $(16.1) million | $(21.3) million |
| Acquisition-related amortization and impairmentsother | $(3.3) million | $(0.1) million | $33.6 million |
| Net cash flowsother | $(6.5) billion | – | – |
| Net market appreciation (depreciation) and incomeother | $190.2 billion | – | – |
| Change during the periodother | $183.7 billion | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Equity investment advisory feesClient flows and transfers drove a mix shift in assets under management toward lower fee products and asset classes, partially offset by market appreciation. | $1,011.9 million | 3.8% | 9.6% |
| Fixed income, including money market investment advisory feesClient flows and transfers drove a mix shift in assets under management toward lower fee products and asset classes, partially offset by market appreciation. | $113.5 million | 1.5% | 7.6% |
| Multi-asset investment advisory feesClient flows and transfers drove a mix shift in assets under management toward lower fee products and asset classes, partially offset by market appreciation. | $529.5 million | 4.0% | 16.1% |
| Alternatives investment advisory feesPerformance-based fees earned in all periods were primarily in alternatives strategies. | $89.9 million | 2.9% | 8.8% |
Capital returns
- Returned $441 million to stockholders from the recurring quarterly dividend and stock repurchases.
What drove it
- AUM increased $183.7 billion during Q2 2026, driven by $190.2 billion of net market appreciation (depreciation) and income, partly offset by net cash flows of $(6.5) billion.
- Equity AUM had net cash flows of $(13.5) billion, while fixed income, including money market, multi-asset, and alternatives had net cash flows of $4.6 billion, $0.4 billion, and $2.0 billion, respectively.
- The Q2 2026 effective fee rate declined because client flows and transfers shifted AUM toward lower fee products and asset classes, partially offset by market appreciation.
- Compensation, benefits, and related costs increased primarily due to a higher interim bonus accrual, partially offset by lower salaries and related benefits.
- The decrease in administrative, distribution, servicing, and other fees from Q2 2025 primarily reflected a reporting change implemented in Q3 2025.
- The changes in accrued carried interest from Q2 2026 and Q1 2026 were primarily driven by weaker relative performance in related credit strategies.
Concerns
- The firm reported net client outflows of $6.5 billion.
- Fundamental active equity remained under pressure.
- The investment advisory annualized effective fee rate without performance-based fees declined to 38.1 basis points from 39.6 basis points in Q2 2025 and 38.4 basis points in Q1 2026.
- Equity net cash flows were $(13.5) billion.
- GAAP operating expenses increased 16.2% from Q1 2026, including a $126.5 million market-related change in deferred compensation liabilities.
What to watch
- Whether positive flows in May and June continue and offset the quarter's net client outflows of $6.5 billion.
- The trajectory of fundamental active equity demand and equity net flows.
- The investment advisory annualized effective fee rate following the mix shift toward lower fee products and asset classes.
- Progress expanding the ETF and SMA business and advancing strategic partnerships.
- The effect of weaker relative performance in related credit strategies on accrued carried interest.
Balance sheet and cash flow
- Assets under management at June 30, 2026: $1,893.4 billion.
- Unfunded capital commitments were $21.0 billion at June 30, 2026 and $20.9 billion as of March 31, 2026.
- Investors domiciled outside the United States account for 9.1% of the firm's AUM at June 30, 2026, 8.6% at March 31, 2026 and 8.8% at December 31, 2025.
- Assets under administration were $349 billion as of June 30, 2026, of which $192 billion were assets the firm manages.
- Assets in multi-asset advisory solution portfolios were $31.1 billion at June 30, 2026, compared with $27.8 billion at March 31, 2026.
Analysis
T. Rowe Price reported Q2 2026 GAAP net revenues of $1,907.4 million, up 10.7% from $1,723.3 million in Q2 2025 and 2.7% from $1,857.0 million in Q1 2026. Investment advisory fees were $1,744.8 million, up 11.3% year over year and 3.7% sequentially. Each reported investment advisory fee asset class increased from the prior-year quarter, led by multi-asset fees, which rose 16.1% to $529.5 million.
AUM ended the quarter at $1,893.4 billion, up 12.9% from Q2 2025 and 10.7% from Q1 2026. The $183.7 billion quarterly increase reflected $190.2 billion of net market appreciation and income, while net cash flows were $(6.5) billion. Equity had $(13.5) billion of net cash flows, offset in part by positive net cash flows in fixed income, including money market, multi-asset, and alternatives. Management stated that flows were positive in May and June, while also noting continuing pressure in fundamental active equity.
Fee realization declined despite higher AUM and advisory fees. The investment advisory annualized effective fee rate excluding performance-based fees was 38.1 basis points, compared with 39.6 basis points in Q2 2025 and 38.4 basis points in Q1 2026. The company attributed the decrease to client flows and transfers shifting AUM toward lower fee products and asset classes, partially offset by market appreciation. Capital allocation-based income was $11.9 million, with changes in accrued carried interest primarily driven by weaker relative performance in related credit strategies.
GAAP operating expenses increased 9.8% year over year to $1,366.9 million and increased 16.2% sequentially. Adjusted operating expenses increased more modestly, rising 4.9% year over year and 4.2% sequentially to $1,203.2 million. Compensation, benefits, and related costs increased primarily because of a higher interim bonus accrual, while total compensation and related costs also reflected a $126.5 million market-related change in deferred compensation liabilities. GAAP net income rose 25.1% year over year to $632.0 million, and adjusted net income increased 11.5% to $565.0 million.
GAAP diluted EPS was $2.88, up 28.6% from Q2 2025 and 29.1% from Q1 2026. Adjusted diluted EPS was $2.57, up 14.7% year over year and 2.0% sequentially. The company returned $441 million to stockholders through the recurring quarterly dividend and stock repurchases. No forward financial guidance was included in the provided filing text.
Management, verbatim
We ended the quarter with a record $1.9 trillion in assets under management and positive flows in May and June reflected client demand in areas where we are investing for growth.
Rob Sharps, chair and CEO
We continue to expand our ETF and SMA business and advance our strategic partnerships.
Rob Sharps, chair and CEO
While fundamental active equity remains under pressure, I am confident that the progress we are making positions us to deliver long-term value for clients and stockholders.
Rob Sharps, chair and CEO
Not in the filing
stated, not guessed- Forward guidance for revenue, gross margin, operating expenses, tax rate, EPS, AUM, flows, or capital returns.
- Prior-period outlook for comparison.
- Gross margin.
- Cash balance.
- Debt balance.
- Operating cash flow.
- Free cash flow.
- Dividend amount and stock repurchase amount separately.
- Tax rate.
- Diluted weighted-average shares outstanding.
- Detailed balance sheet and cash flow statement.
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.