01—Abstract
Summary
Summary of the 10-Q filed July 26, 2024. Cited figures are marked; the original filing is the authoritative source.
T.
Rowe Price Group, Inc. reported second-quarter 2024 U.S. GAAP net revenues of $1,733.3 milliona, up 7.6% from $1,610.2 million a year earlier, driven by a 10.8% rise in investment advisory fees as average assets under management increased 13.0% to $1,534.0 billion. U.S. GAAP operating expenses rose 8.5% to $1,168.6 million, and operating margin was 32.6% versus 33.1% in the prior-year quarter. Net income attributable to T.
Rowe Price Group was $483.4 millionb, or $2.11 diluted EPS, compared with $2.06 a year earlier. Results on a non-GAAP basis were higher, with adjusted diluted EPS of $2.26 versus $2.02. For the six months ended June 30, 2024, net revenues were $3,483.5 million (up 10.7%) and diluted EPS was $4.60 (up 18.3%), with U.S. GAAP operating margin of 33.1%.
Ending assets under management reached $1,569.1 billionc, up $26.9 billion in the quarter on market appreciation of $30.6 billion, offset by net cash outflows of $3.7 billion. Cash and cash equivalents rose to $2,714.9 million from $2,066.6 million at year-end 2023, and the company returned nearly $4.1 billion to stockholders since the end of 2021 through dividends and buybacks. The quarter also included a $12.3 million impairment on the trade name intangible asset and total impairment charges of $18.0 million on definite and indefinite-lived intangibles.
Management noted that the average fee rate declined due to a mix shift toward lower-fee products, and it estimated the full-year 2024 U.S. GAAP effective tax rate at 23.5%d to 26.5%. KPMG LLP reported a review with no material modifications identified.
02—Key points
Key Highlights
- Net revenues of $1,733.3 million for Q2 2024, up 7.6% from $1,610.2 million, led by a 10.8% increase in investment advisory fees.
- Average assets under management rose 13.0% to $1,534.0 billion; ending AUM reached $1,569.1 billion.
- U.S. GAAP diluted EPS was $2.11 for Q2 2024 versus $2.06; non-GAAP adjusted diluted EPS was $2.26 versus $2.02.
- U.S. GAAP operating margin was 32.6% for Q2 2024, compared with 33.1% in Q2 2023, as operating expenses grew 8.5%.
- Recorded a $12.3 million impairment on the trade name intangible asset after a quantitative test, with total intangible impairments of $18.0 million in the quarter.
- Average annualized effective fee rate declined to 41.6 basis points from 42.3 basis points, reflecting a mix shift toward lower-fee products.
- Quarterly recurring dividend increased 1.6% to $1.24 per share; $192.4 million spent on repurchases of 1.7 million shares in the first half of 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed July 26, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $1.73B$1.61B | +7.6% |
| Operating Expenses | $1.17B$1.08B | +8.5% |
| Operating Income | $564.70M$533.50M | +5.8% |
| Net Income | $483.40M$476.40M | +1.5% |
| EPS (Basic) | $2.11$2.07 | +1.9% |
| EPS (Diluted) | $2.11$2.06 | +2.4% |
| Shares Outstanding (Basic) | 223.00M224.40M | −0.6% |
| Shares Outstanding (Diluted) | 223.50M225.20M | −0.8% |
05—Questions
Frequently Asked Questions
How did T. Rowe Price's revenue and earnings perform in the second quarter of 2024?
Net revenues rose 7.6% to $1,733.3 million, driven by higher investment advisory fees. U.S. GAAP net income attributable to T. Rowe Price Group was $483.4 million, or $2.11 per diluted share, compared with $476.4 million, or $2.06, a year earlier.
What drove the growth in assets under management?
Ending assets under management were $1,569.1 billion, up $26.9 billion in the quarter. Market appreciation and income added $30.6 billion, partly offset by net cash outflows of $3.7 billion.
Why did operating margin decline in the quarter?
The filing attributes the decline to operating expense growth outpacing net revenue growth, primarily from acquisition-related amortization and impairments and changes in the supplemental savings plan liability.
What impairments did the company record?
The company recognized a $12.3 million impairment on its trade name intangible asset after a quantitative test. Total impairment charges on definite and indefinite-lived intangible assets were $18.0 million in the second quarter of 2024.
What are the company's capital return plans and expected tax rate?
The company increased its quarterly dividend to $1.24 per share and repurchased 1.7 million shares for $192.4 million in the first half of 2024. It estimates a full-year 2024 U.S. GAAP effective tax rate of 23.5% to 26.5%.
06—Continue