How did T. Rowe Price perform in the first quarter of 2024?

GAAP net income attributable to T. Rowe Price was $573.8 million, or $2.49 per diluted share, compared with $421.5 million, or $1.83 per diluted share, in Q1 2023. On an adjusted basis, diluted EPS was $2.38, compared with $1.69 a year earlier. Net revenues were $1,750.2 million.

What happened to client assets during the quarter?

Assets under management rose $97.7 billion to $1.54 trillion. Net client outflows were $8.0 billion, while net market appreciation and income added $105.7 billion. The company said the outflows were about half the level of Q1 2023 outflows.

What does the company expect for outflows and fees going forward?

The CEO said outflows will persist in 2024 but that there will be substantial improvement this year, driven by higher sales and lower redemptions. The effective fee rate fell to 42.1 basis points from 42.7 basis points in Q1 2023, which the company attributed to outflows and client transfers shifting assets toward lower-fee vehicles.

How is the company returning capital to shareholders?

The company returned $365 million to stockholders in the quarter through its recurring quarterly dividend and stock repurchases. It increased its quarterly dividend for the 38th consecutive year, to $1.24 per share from $1.22.

What drove the change in operating expenses and tax rate?

GAAP operating expenses rose 10.5% from Q1 2023, mainly due to higher compensation and benefit costs. Adjusted operating expenses rose 4.8%. The effective tax rate was 23.5% in Q1 2024, down from 28.7% a year earlier, mainly because of lower valuation allowances. The company estimates a full-year 2024 effective tax rate of 23% to 27% on a GAAP basis and 23% to 26% on a non-GAAP basis.

TROW 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed April 26, 2024. Cited figures are marked; the original filing is the authoritative source.

T.

Rowe Price Group, Inc. filed this Form 8-K on April 26, 2024 to furnish its first-quarter 2024 earnings release (Exhibit 99.1) and an earnings release supplement (Exhibit 99.2) used on the earnings call. GAAP net income attributable to T. Rowe Price was $573.8 million^a, or $2.49 per diluted share, compared with $421.5 million, or $1.83 per diluted share, in Q1 2023.

Adjusted diluted EPS was $2.38^b, compared with $1.69 a year earlier. Net revenues rose 13.8% year over year to $1,750.2 million, driven by higher investment advisory fees on higher average AUM, higher performance-based fees, and higher capital allocation-based income. GAAP operating expenses increased 10.5% to $1,163.6 million.

Assets under management ended the quarter at $1.54 trillion^c, up from $1.34 trillion at March 31, 2023, with market appreciation of $105.7 billion offsetting net client outflows of $8.0 billion. The company said these outflows were about half the level of its Q1 2023 outflows and expects outflows to persist in 2024, with substantial improvement later in the year driven by higher sales and lower redemptions. The effective fee rate declined to 42.1 basis points from 42.7 basis points a year earlier, which the company attributed to a mix shift toward lower-fee vehicles.

The company returned $365 million^d to stockholders through its recurring quarterly dividend and share repurchases and increased the quarterly dividend for the 38th consecutive year, to $1.24 per share. The filing also gives a full-year 2024 effective tax rate estimate of 23% to 27% on a U.S. GAAP basis and 23% to 26% on a non-GAAP basis. The financial results are unaudited.

02—Key points

Key Highlights

Q1 2024 GAAP diluted EPS was $2.49, up from $1.83 in Q1 2023; adjusted diluted EPS was $2.38, up from $1.69.
Net revenues were $1,750.2 million, an increase of 13.8% from Q1 2023 and 6.6% from Q4 2023.
Ending assets under management were $1.54 trillion at March 31, 2024, with net client outflows of $8.0 billion in the quarter.
The investment advisory effective fee rate was 42.1 basis points, down from 42.7 basis points in Q1 2023, due to a mix shift toward lower-fee vehicles.
Target date retirement AUM was $443 billion, with $6.8 billion of net new flows in Q1 2024.
The company returned $365 million to stockholders and increased its quarterly dividend for the 38th consecutive year to $1.24 per share.
Management expects 2024 outflows to persist but to improve substantially, and guided the full-year 2024 effective tax rate to 23% to 27% (GAAP) and 23% to 26% (non-GAAP).

03—Questions

Frequently Asked Questions

How did T. Rowe Price perform in the first quarter of 2024?
GAAP net income attributable to T. Rowe Price was $573.8 million, or $2.49 per diluted share, compared with $421.5 million, or $1.83 per diluted share, in Q1 2023. On an adjusted basis, diluted EPS was $2.38, compared with $1.69 a year earlier. Net revenues were $1,750.2 million.
What happened to client assets during the quarter?
Assets under management rose $97.7 billion to $1.54 trillion. Net client outflows were $8.0 billion, while net market appreciation and income added $105.7 billion. The company said the outflows were about half the level of Q1 2023 outflows.
What does the company expect for outflows and fees going forward?
The CEO said outflows will persist in 2024 but that there will be substantial improvement this year, driven by higher sales and lower redemptions. The effective fee rate fell to 42.1 basis points from 42.7 basis points in Q1 2023, which the company attributed to outflows and client transfers shifting assets toward lower-fee vehicles.
How is the company returning capital to shareholders?
The company returned $365 million to stockholders in the quarter through its recurring quarterly dividend and stock repurchases. It increased its quarterly dividend for the 38th consecutive year, to $1.24 per share from $1.22.
What drove the change in operating expenses and tax rate?
GAAP operating expenses rose 10.5% from Q1 2023, mainly due to higher compensation and benefit costs. Adjusted operating expenses rose 4.8%. The effective tax rate was 23.5% in Q1 2024, down from 28.7% a year earlier, mainly because of lower valuation allowances. The company estimates a full-year 2024 effective tax rate of 23% to 27% on a GAAP basis and 23% to 26% on a non-GAAP basis.

04—Continue

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