01—Abstract
Summary
Summary of the 10-Q filed November 1, 2024. Cited figures are marked; the original filing is the authoritative source.
T.
Rowe Price Group, Inc. reported its Form 10-Q for the quarter ended September 30, 2024, filed November 1, 2024. Net revenues were $1,785.6 milliona for the three months ended September 30, 2024, up from $1,670.7 million a year earlier, and $5,269.1 million for the nine months, up from $4,818.5 million. U.S. GAAP net income attributable to T.
Rowe Price Group, Inc. was $603.0 millionb for the quarter ($2.64 diluted EPS) versus $453.2 million ($1.97) in the prior-year quarter. On a non-GAAP basis, adjusted diluted EPS was $2.57 for the quarter versus $2.17 a year earlier. Average assets under management rose 14.1% to $1,589.5 billion for the quarter, and ending AUM reached $1,630.9 billion, up from $1,346.5 billion at September 30, 2023.
Net cash outflows were $12.2 billionc for the quarter and $23.9 billion for the nine months. U.S. GAAP operating margin was 34.4% for the quarter, compared with 34.8% a year earlier, as operating expenses grew faster than net revenues, driven largely by the supplemental savings plan liability and lower capital allocation-based income. Non-operating income rose to $212.5 million from $2.8 million, reflecting stronger market returns and higher investment gains.
Cash and cash equivalents increased to $3,173.5 milliond at September 30, 2024, from $2,066.6 million at December 31, 2023. The company paid $851.0 million in dividends and repurchased $269.1 million of common stock in the first nine months. Total stockholders' equity attributable to the company was $10,249.3 million at quarter end.
The filing also records impairment charges on the trade name intangible asset of $18.8 million for the quarter and $31.1 million year to date, and an OHA contingent consideration liability reduced to zero as of September 30, 2024 because revenue targets were not expected to be met. Full-year 2024 effective tax rate guidance is 23.5% to 26.5% on a U.S. GAAP basis and 23.5% to 25.5% on a non-GAAP basis.
02—Key points
Key Highlights
- Net revenues rose to $1,785.6 million in Q3 2024 from $1,670.7 million in Q3 2023, and to $5,269.1 million year to date from $4,818.5 million.
- U.S. GAAP diluted EPS was $2.64 for Q3 2024 versus $1.97 a year earlier; non-GAAP adjusted diluted EPS was $2.57 versus $2.17.
- Average AUM increased 14.1% to $1,589.5 billion in Q3 2024, while ending AUM reached $1,630.9 billion.
- The firm recorded net cash outflows of $12.2 billion in Q3 2024 and $23.9 billion year to date, offset by $210.3 billion of market appreciation year to date.
- U.S. GAAP operating margin was 34.4% in Q3 2024 versus 34.8% in Q3 2023, pressured by supplemental savings plan expense and lower capital allocation-based income.
- Non-operating income was $212.5 million in Q3 2024 compared with $2.8 million, driven by investment gains.
- Trade name intangible impairment charges totaled $18.8 million in Q3 2024 and $31.1 million year to date; OHA contingent consideration liability was reduced to zero.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 1, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $1.79B$1.67B | +6.9% |
| Operating Expenses | $1.17B$1.09B | +7.6% |
| Operating Income | $613.60M$581.30M | +5.6% |
| Net Income | $603.00M$453.20M | +33.1% |
| EPS (Basic) | $2.64$1.98 | +33.3% |
| EPS (Diluted) | $2.64$1.97 | +34.0% |
| Shares Outstanding (Basic) | 222.30M224.10M | −0.8% |
| Shares Outstanding (Diluted) | 222.80M224.80M | −0.9% |
05—Questions
Frequently Asked Questions
How did T. Rowe Price's earnings and revenue perform in the third quarter of 2024?
Net revenues were $1,785.6 million, up 6.9% from $1,670.7 million. U.S. GAAP net income attributable to the company was $603.0 million, or $2.64 per diluted share, compared with $453.2 million, or $1.97 per diluted share, a year earlier. Investment advisory fees increased 11.5%, driven by higher average AUM.
What drove the growth in assets under management?
Ending AUM rose to $1,630.9 billion from $1,346.5 billion a year earlier. In Q3 2024, market appreciation and income of $74.0 billion more than offset net cash outflows of $12.2 billion. For the nine months, market appreciation of $210.3 billion outweighed net outflows of $23.9 billion.
Why did operating margin decline?
U.S. GAAP operating margin was 34.4% in Q3 2024 versus 34.8% in Q3 2023. The filing attributes the decline to operating expense growth outpacing net revenue growth, primarily from changes in the supplemental savings plan liability and lower capital allocation-based income. Operating expenses rose 7.6% to $1,172.0 million.
What were the company's capital returns and liquidity position?
In the first nine months of 2024, the company paid $851.0 million in dividends and repurchased $269.1 million of common stock. Cash and cash equivalents stood at $3,173.5 million at September 30, 2024, and total cash and investments in T. Rowe Price products were $5,994.3 million.
Were there any notable impairments or changes to acquisition-related items?
The company recognized impairment charges of $18.8 million on its trade name intangible asset in Q3 2024 and $31.1 million year to date. The OHA contingent consideration liability was reduced to zero as of September 30, 2024, as revenue expectations fell below the defined targets, producing a $13.4 million reduction in the quarter.
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