T. Rowe Price Group, Inc.

Adjusted diluted EPS was $2.57 in Q2 2026, up from $2.52 in Q1 2026 and $2.24 in Q2 2025. Adjusted net revenue was $1.9 billion, up 2.7% sequentially and 8.5% year over year, while adjusted operating expenses were $1.2 billion, up 4.2% sequentially and 4.9% year over year. Annualized effective fee rate excluding performance-based fees was 38.1 basis points versus 38.4 basis points in Q1. The quarter ended with $1.9 trillion in AUM and $6.5 billion in net outflows; ETFs had $4.4 billion of net inflows. For the full year, adjusted operating expenses excluding carried interest expense are expected to be up 4%-7% versus 2025's $4.6 billion. Management said second-half net flows are expected to be meaningfully more challenging than the first half, and 2026 should still be a record year for gross flows.

Rob Sharps framed the quarter as a mix of market recovery and continued business repositioning. He said the firm is not de-emphasizing active equity despite pressure, but is investing in areas where client demand is stronger: lower-tracking-error active strategies, ETFs, SMAs, fixed income, alternatives, and direct/advice platforms. His tone was constructive and strategic, with repeated emphasis on organic growth, client alignment, and the potential for selective M&A if it fits the firm’s priorities.

Jen Dardis highlighted the financial lift from higher AUM and revenue, with adjusted EPS at $2.57 and adjusted net revenue at $1.9 billion. She noted that the effective fee rate slipped to 38.1 basis points from 38.4 basis points as mix shifted toward lower-fee vehicles and redemptions persisted in higher-fee equity strategies and mutual funds. She also said Q2 adjusted operating expenses were $1.2 billion and reiterated a full-year expense outlook of up 4%-7% versus 2025, while emphasizing cost discipline, buybacks of $157 million in Q2 and over $497 million year to date, and a strong balance sheet with $4.4 billion of cash and discretionary investments.

Analysts pressed management on how T. Rowe Price can reshape the business as fee rates decline and expense growth remains elevated. Sharps said the firm will keep investing in core active equity, grow fixed income and alternatives, expand ETFs and SMAs, and continue to evaluate M&A, while Dardis said controllable expenses should remain in low single digits through productivity efforts, automation, selective platform changes, and real estate rationalization. Questions also focused on digital assets, tokenization, ETF distribution, and the Goldman Sachs partnership; management said tokenization could make digital wallets an important client interface, and that Goldman/T. Rowe distribution will be joint but balanced economically.