$TROW · PRICE T ROWE GROUP INC
T. Rowe Price reported Q3 2026 results with net revenues of $2.005B (+5.9% YoY), GAAP diluted EPS of $2.79, and adjusted diluted EPS of $2.86. Average AUM rose 9.5% YoY to $1.887T, but ending AUM fell $30.7B sequentially to $1.863T on $28.3B in net client outflows. The investment advisory effective fee rate compressed to 37.8 bps from 39.1 bps YoY.
- Adjusted diluted EPS of $2.86 vs. $2.81 YoY, up 1.8% and beating the prior quarter's $2.57 by 11.3%.
- Net revenues of $2.005B, up 5.9% YoY, driven by 9.5% higher average AUM of $1.887T.
- Net client outflows of $28.3B in Q3, with $25.6B from equity strategies alone.
- Investment advisory effective fee rate fell to 37.8 bps from 39.1 bps YoY, reflecting mix shift to lower-fee products.
- GAAP operating expenses declined 1.2% YoY to $1.235B; adjusted operating expenses rose 5.8% to $1.200B.
Extended-hours trading shows TROW at $107.07, up 2.95% vs. the regular close of $104.00, suggesting the market is rewarding the adjusted EPS beat and cost discipline despite heavy outflows.
The juxtaposition of an EPS beat against $28.3B in outflows and fee-rate compression captures the core tension in active asset management: growing AUM via market appreciation while losing client assets and pricing power.
Active asset managers continue facing structural headwinds from fee compression and passive migration. TROW's 37.8 bps effective fee rate and $28.3B quarterly outflows underscore the challenge even as the firm expands ETF, SMA, and model-portfolio offerings.
Net outflows of $28.3B — concentrated in equities at $25.6B — signal persistent client redemptions. The effective fee rate erosion from 39.1 bps to 37.8 bps YoY compounds revenue pressure even as AUM grows.