Invesco Ltd.

Second-quarter adjusted diluted EPS was $0.71, up from $0.36 a year ago and $0.57 in the first quarter. Net revenue was $1.3 billion, up $224 million year over year and $65 million sequentially; adjusted operating income was nearly $500 million, up 45% year over year. Adjusted operating margin was 37.5%, up 360 basis points year over year and 300 basis points sequentially. Net long-term inflows were a record $45.1 billion, and AUM ended the quarter at a record $2.5 trillion, up 23% year over year and 14% sequentially. For guidance, management said hybrid platform implementation costs should run closer to $15 million per quarter in the second half of 2026, with incremental platform expense building toward $10 million per quarter later in the year. The third-quarter non-GAAP effective tax rate is estimated at 25% to 26%, excluding discrete items. Management reiterated a target total payout ratio near 60%, including common dividends and buybacks.

Andrew Schlossberg framed the quarter as evidence that Invesco’s strategy is working: record inflows, record AUM, margin expansion, and strong operating leverage. He emphasized product innovation, noting more than 50 product launches this year across ETFs, SMAs, model portfolios, and private assets, plus partnerships such as Superstate, Barings, and LGT Capital. He was upbeat on the QQQ franchise and said Invesco will continue to lean on brand strength, global distribution, and selective expansion rather than making a short-term defensive response to competitive fee pressure.

Allison Dukes highlighted the financial upside from strong organic growth and positive markets, citing 5% sequential net revenue growth, nearly 500 basis points of positive operating leverage, and a 300 basis point margin improvement to 37.5%. She said net revenue yield was 22.4 basis points for the quarter and exit yield was 22 basis points, with mix shift in lower-fee products moderating and nearing stabilization. On capital and balance sheet, she said net debt fell by more than $450 million in the quarter, total debt fell $343 million, revolver borrowings dropped from $1.1 billion to $136 million, and leverage improved to 1.9x inclusive of preferred stock and 0.54x excluding it. She also confirmed $50 million of buybacks in Q2, a dividend increase to $0.215 per share, and a target payout ratio near 60%.

Analysts focused heavily on QQQ pricing, with management saying it will not make a short-term fee reaction and will instead rely on the franchise’s liquidity, brand, total cost of ownership, and long-term ecosystem benefits. Management also said custodial fee flexibility is limited by long-term contracts, and that marketing spend will remain targeted, including outside the U.S. and in Asia following the Hong Kong and Tokyo cross-listings. On expenses, management said the hybrid platform implementation should taper in early 2027, while the company remains focused on keeping operating margins in the high-30s and continuing deleveraging before addressing preferred shares more aggressively.