8-K: T. Rowe Price Reports Q3 2026 Results: AUM Dips, Revenue Climbs

T. Rowe Price Group announced third quarter 2026 results, reporting $1.9 trillion in assets under management, a net client outflow of $28.3 billion, and diluted earnings per share of $2.79.

Summary

• T. Rowe Price Group reported third quarter 2026 results with Assets Under Management (AUM) at $1.9 trillion, a decrease of $30.7 billion from the previous quarter.
• Net client outflows for the quarter were $28.3 billion.
• Net revenues increased by 5.9% year-over-year to $2,004.9 million.
• Operating expenses decreased by 1.2% year-over-year to $1,235.1 million.
• Net income attributable to T. Rowe Price Group, Inc. was $612.3 million, a decrease of 5.2% compared to the prior year's quarter.
• Diluted earnings per common share (EPS) were $2.79, down 2.8% year-over-year.
• Adjusted diluted EPS was $2.86, an increase of 1.8% year-over-year.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive report, with solid revenue growth and improved net operating income, though offset by a decline in net income and EPS compared to the prior year's quarter, largely due to significant non-operating income fluctuations.

Positives

• Net revenues increased by 5.9% to $2,004.9 million compared to the prior year's quarter.
• Net operating income saw a significant increase of 19.7% to $769.8 million compared to the prior year's quarter.
• Adjusted diluted EPS increased by 1.8% to $2.86 compared to the prior year's quarter.
• Investment advisory fees grew by 5.8% to $1,796.4 million.
• The firm continues to expand its ETF, SMA, and model portfolio businesses, extending active investment expertise to more clients.
• Improving investment performance and strategic partnership progress are noted by management.

Negatives

• Assets Under Management (AUM) decreased by $30.7 billion to $1.86 trillion.
• Net client outflows for the quarter were $28.3 billion.
• Net income attributable to T. Rowe Price Group, Inc. decreased by 5.2% to $612.3 million compared to the prior year's quarter.
• Diluted earnings per common share (EPS) decreased by 2.8% to $2.79 compared to the prior year's quarter.
• The investment advisory annualized effective fee rate (EFR) decreased from 39.1 bps in Q3 2025 to 37.8 bps in Q3 2026.

Risks

• The filing mentions that for a discussion concerning risks and other factors that could affect future results, see the firm's 2025 Annual Report on Form 10-K and subsequent Form 10-Q Quarterly Reports.

Future Outlook

The filing does not provide specific forward-looking guidance for future periods but refers to the firm's 2025 Annual Report on Form 10-K and subsequent Form 10-Q Quarterly Reports for a discussion of risks and factors that could affect future results. Management expresses confidence in delivering long-term value through product expansion, improving performance, and strategic partnerships.

Management Comments

• "We continue to expand our ETF, SMA, and model portfolio businesses, extending our active investment expertise to more clients through a broader range of portfolio solutions."
• "With innovative product launches, improving investment performance, and continued progress on our strategic partnerships, we are well positioned to continue delivering long-term value for clients and stockholders."

Industry Context

StockSavvy.ai notes that the asset management industry is experiencing shifts, with a continued focus on ETFs, SMAs, and model portfolios as firms like T. Rowe Price adapt to client demand for diversified solutions. Net client outflows are a common challenge across the industry, often influenced by market volatility and competition.

Stakeholder Impact

• Shareholders may see a mixed reaction due to the decrease in net income and EPS compared to the prior year, despite revenue growth and improved adjusted EPS.
• Clients may be impacted by the net client outflows and the decrease in the effective fee rate, potentially signaling shifts in product demand or pricing strategies.
• Employees may be affected by the slight decrease in total compensation and benefits costs year-over-year, although adjusted operating expenses saw a slight decrease quarter-over-quarter.

Next Steps

• The firm expects to file its Form 10-Q Quarterly Report for the third quarter of 2026 with the U.S. Securities and Exchange Commission.

Key Dates

Recommendation

The filing presents a mixed picture: revenue growth and improved adjusted EPS are positive, but net income and GAAP EPS declined year-over-year, alongside net client outflows and a lower effective fee rate. The significant impact of non-operating income volatility makes it difficult to definitively assess core operational strength. Therefore, a 'hold' recommendation is appropriate pending further clarity on sustained operational performance and AUM trends.

Keywords

asset management, assets under management, earnings, investment advisory fees, client outflows, earnings per share, financial results, investment performance