Franklin Resources Inc
Q1 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −3.12%.
Did BEN Beat Earnings? Q1 2025 Results
Franklin Resources delivered a mixed fiscal first quarter, beating on earnings while falling short on revenue, as the ongoing crisis at Western Asset Management continued to cast a long shadow over the firm's results. Adjusted diluted EPS of $0.59 cleared the $0.53 consensus estimate by 11.49%, yet revenue of $2.25 billion trailed expectations by 9.59%, even as the top line grew 13.1% year over year on higher average AUM levels. The dominant pressure point was Western Asset, whose severe client redemptions drove $67.90 trillion in long-term net outflows from that unit alone, pushing total firm long-term net outflows to $50.00 billion for the quarter and pulling total AUM down to $1.58 trillion; reports indicate WAMCO has shed roughly $120 billion since August, with $17 billion leaving in January alone. CEO Jenny Johnson acknowledged the challenge and outlined plans to integrate select Western Asset corporate functions while preserving investment team independence. The firm's institutional pipeline of won-but-unfunded mandates grew to $18.10 billion, offering some basis for optimism heading into the next quarter.
- Long-term inflows improved by 34% year-over-year excluding reinvested distributions
- Positive net flows in equity ($12.5B), multi-asset ($3.4B), and alternatives ($0.8B)
- Alternatives fundraising generated $6 billion, including $4.3 billion in private market assets
- Investment management fees grew 9% year-over-year to $1.8 billion
- Average AUM increased 17% year-over-year to $1,634.5 billion
“Our first fiscal quarter results demonstrated progress across key growth areas, enabling us to meet the evolving needs of our clients, amid heightened market volatility. Long-term inflows improved by 34% from the prior year quarter (excluding reinvested distributions) and we generated positive net flows in equity, multi-asset and alternatives, totaling a combined $17 billion during the quarter. While long-term net outflows were $50 billion, excluding Western Asset Management, our long-term net inflows were $18 billion and positive in every asset class.”
Franklin Resources CEO, on the earnings call
Forward Guidance & Outlook
The company highlighted its institutional pipeline of won-but-unfunded mandates increased to $18.1 billion, diversified across asset classes and specialist investment managers. Management plans to integrate select corporate functions at Western Asset Management to create efficiencies while maintaining investment team autonomy. The company remains committed to strategically investing in the business while managing expenses and enhancing shareholder value. The firm launched its first evergreen secondaries private equity fund for the wealth channel in January, achieving its initial fundraising cap of $900 million.
BEN YoY Financials
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BEN Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.