Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

BEN · Q1 2025 Earnings

Franklin Resources

Reported January 30, 2026

30-second summary

Franklin reported Q1 FY2026 revenue of $2.33B (+3% YoY, -0.7% QoQ) and non-GAAP EPS of $0.70 (+19% YoY). Long-term net inflows were $28.0B with positive flows across equity, multi-asset, alternatives, ETFs, retail SMAs and Canvas; ex-Western long-term net inflows were $34.6B, nearly double the prior-year quarter and the ninth consecutive positive quarter on that basis. Adjusted operating margin was 25.0%, reflecting a mixed trajectory: +50bps YoY (from 24.5%) but -100bps QoQ (from Q4's 26.0%). Western Asset still posted $6.6B of long-term net outflows in the quarter, and alternatives fundraising of $10.8B (including $9.5B in private markets) plus the Apera close added $6.1B of acquired AUM, supporting record total AUM of $1,684.0B. > Sourcing note: All figures in this brief are sourced from the Q1 FY2026 press release (quarter ended Dec 31, 2025). The prepared-remarks transcript provided alongside the press release corresponds to an earlier period (references $1.58T AUM, $68B Western outflows with $38B in December, ~12 months since Putnam close, DeepSeek commentary, and FY2025 expense planning) and does not match this quarter. No transcript-sourced claims are used in this brief.

Headline numbers

EPS

Q1 FY2025

$0.70

Revenue

Q1 FY2025

$2.33B

+3.0% YoY

Operating margin

Q1 FY2025

12.1%

Key financials

Q1 FY2025

Metric	Q1 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$2.33B	+3.0%	$2.34B	-0.7%
EPS	$0.70	—	$0.67	+4.5%
Operating margin	12.1%	—	3.6%	+850bps

Guidance

Company reaffirmed 30% medium-term adjusted operating margin target and disclosed $200-250M expense run-rate reductions targeted for FY2026 entry, while guiding for flat expense growth in FY2025 and margin expansion ahead.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

New guidance

Metric	Period	Guide	YoY
Adjusted Operating Expense Run-Rate Reductions	FY2026	$200 million to $250 million	—
Expense Growth	FY2025	Roughly even with prior year	—
Operating Margin Expansion	FY2026	Margin expansion expected	—

Segment performance

Q1 FY2025

Segment	Q1 FY2025	YoY
Investment Management Fees	$1.848B	+3.0%
Sales and Distribution Fees	$0.389B	+4.0%
Shareholder Servicing Fees	$0.071B	+12.0%
Equity	$0.697B	+12.4%
Fixed Income	$0.438B	-6.8%
Alternative	$0.274B	+9.9%
Multi-Asset	$0.199B	+14.1%

Other KPIs

Q1 FY2025

Segment	Q1 FY2025	YoY
United States	$1.196B	+8.4%
Europe, Middle East and Africa	$0.227B	+17.2%
Asia-Pacific	$0.167B	+1.3%
Americas, excl. U.S.	$0.094B	-17.8%
Assets Under Management (AUM)	$1,684.0 billion	—
Long-term Net Flows	$28.0 billion	—
Long-term Net Flows excl. Western Asset	$34.6 billion	—
ETF AUM	$58 billion	—
ETF Net Flows	$7.5 billion	—
Retail SMA AUM	$170 billion	—
Canvas AUM	$18 billion	—
Adjusted Operating Margin	25.0%	—

Management tone

No tone-shift analysis available for this quarter.

Recurring themes management leaned on this quarter:

Western Asset Management operational crisis and integration accelerationExpense discipline and margin recovery phased through fiscal 2026Diversification and active management re-emergenceAlternatives and perpetual vehicles expansion into wealth channelConsolidation strategy with fewer, deeper institutional partnershipsPutnam acquisition performing ahead of synergy targets

Risks management surfaced:

Western Asset Management continued outflows ($17B expected in January, $68B in December)Market volatility and geopolitical uncertainty affecting equity performanceFixed income fee compression and landscape structural changesInternational equity market pressure from trade tariff concernsRegulatory and litigious challenges to retirement channel alternatives penetration

Sources

Franklin Resources Q1 FY2026 Press Release (Exhibit 99.1): https://www.sec.gov/Archives/edgar/data/38777/000003877726000032/exhibit991q1fy26.htm

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