01—Abstract
Summary
Summary of the 10-Q filed October 31, 2025. Cited figures are marked; the original filing is the authoritative source.
T.
Rowe Price Group, Inc.'s Form 10-Q for the quarter ended September 30, 2025 shows net revenues of $1,893.5 milliona for the third quarter, up from $1,785.6 million a year earlier, driven mainly by higher investment advisory fees on higher average assets under management. Average AUM rose to $1,723.0 billion from $1,589.5 billion, and ending AUM reached $1,767.2 billion. U.S. GAAP operating expenses increased 6.7% to $1,250.3 million, including a $28.5 million restructuring charge tied to a workforce action and an ongoing plan to reduce expense growth.
U.S. GAAP operating margin was 34.0% versus 34.4% a year earlier. Net income attributable to T. Rowe Price Group rose to $646.1 millionb in the quarter from $603.0 million, and diluted EPS was $2.87 versus $2.64.
On a non-GAAP basis, diluted EPS was $2.81c versus $2.57. For the nine months, U.S. GAAP diluted EPS was $7.25 compared with $7.23, with net revenues up 2.1% and operating margin at 31.9% versus 33.5%. Cash and cash equivalents increased to $3,634.8 million from $2,649.8 million at year-end 2024, and the company repurchased $483.8 million of stock in the first nine months.
Subsequent to quarter-end, the Board approved a plan to exit two owned office buildings in Owings Mills, Maryland, which is expected to produce a non-cash charge of up to $100 milliond in the fourth quarter of 2025. KPMG LLP reported that it was not aware of material modifications needed to the interim financials.
02—Key points
Key Highlights
- Third-quarter net revenues were $1,893.5 million, up from $1,785.6 million, with investment advisory fees of $1,698.7 million versus $1,627.3 million.
- U.S. GAAP operating expenses were $1,250.3 million, up 6.7%, including a $28.5 million restructuring charge primarily related to severance.
- Third-quarter U.S. GAAP diluted EPS was $2.87 versus $2.64; non-GAAP diluted EPS was $2.81 versus $2.57.
- Ending AUM was $1,767.2 billion, up from $1,630.9 billion a year earlier; the quarter's net cash outflows were $7.9 billion.
- Nine-month U.S. GAAP operating margin declined to 31.9% from 33.5%, as expense growth outpaced net revenue growth.
- Cash and cash equivalents rose to $3,634.8 million at September 30, 2025, and the company spent $483.8 million repurchasing stock in the first nine months.
- In October 2025, the Board approved exiting two Owings Mills, Maryland office buildings, with a non-cash charge of up to $100 million expected in Q4 2025.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed October 31, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $1.89B$1.79B | +6.0% |
| Operating Expenses | $1.25B$1.17B | +6.7% |
| Operating Income | $643.20M$613.60M | +4.8% |
| Net Income | $646.10M$603.00M | +7.1% |
| EPS (Basic) | $2.88$2.64 | +9.1% |
| EPS (Diluted) | $2.87$2.64 | +8.7% |
| Shares Outstanding (Basic) | 219.40M222.30M | −1.3% |
| Shares Outstanding (Diluted) | 219.70M222.80M | −1.4% |
05—Questions
Frequently Asked Questions
Why did U.S. GAAP operating expenses rise faster than non-GAAP operating expenses in the third quarter?
The $28.5 million restructuring charge, primarily severance tied to the July workforce action, is included in U.S. GAAP results but excluded from non-GAAP operating expenses. Non-GAAP operating expenses rose 3.2% to $1,134.4 million, while U.S. GAAP operating expenses rose 6.7% to $1,250.3 million.
What is the outlook for the Owings Mills office building exit?
The Board approved a plan in October 2025 to exit two owned office buildings in Owings Mills, Maryland. The company expects a non-cash charge of up to $100 million in the fourth quarter of 2025, primarily reflecting the carrying value of the buildings, recorded in the restructuring charge line.
How did assets under management change in the quarter?
Assets under management ended the quarter at $1,767.2 billion, up $90.4 billion from June 30, 2025. Market appreciation and income contributed $89.1 billion, while net cash outflows were $7.9 billion. Managed account model delivery assets of $9.2 billion were added beginning July 1, 2025.
What drove the change in the effective fee rate?
The U.S. GAAP investment advisory effective fee rate without performance-based fees was 39.1 basis points in the third quarter, down from 40.7 basis points. The filing attributes the decline primarily to client flows and transfers shifting assets toward lower-fee strategies and products.
How much capital did the company return to stockholders in 2025?
In the first nine months of 2025, the company paid $858.7 million in recurring dividends and spent $483.8 million on stock repurchases, totaling $1,342.5 million. The quarterly dividend was raised 2.4% to $1.27 per share in February 2025.
06—Continue