Franklin Resources, Inc. (the “Company”) (NYSE: BEN) today announced net income1 of $174.0 million or $0.32 per diluted share for the quarter ended June 30, 2024, as compared to $124.2 million or ...
SAN MATEO, Calif.: Franklin Resources, Inc. (the “Company”) (NYSE: BEN) today announced net income1 of $174.0 million or $0.32 per diluted share for the quarter ended June 30, 2024, as compared to $124.2 million or $0.23 per diluted share for the previous quarter, and $227.5 million or $0.44 per diluted share for the quarter ended June 30, 2023. Operating income was $222.5 million for the quarter ended June 30, 2024, as compared to $129.3 million for the previous quarter and $314.9 million for the prior year.
As supplemental information, the Company is providing certain adjusted performance measures which are based on methodologies other than generally accepted accounting principles. Adjusted net income2 was $326.4 million and adjusted diluted earnings per share2 was $0.60 for the quarter ended June 30, 2024, as compared to $306.6 million and $0.56 for the previous quarter, and $326.1 million and $0.63 for the quarter ended June 30, 2023. Adjusted operating income2 was $424.9 million for the quarter ended June 30, 2024, as compared to $419.6 million for the previous quarter and $476.8 million for the prior year.
“During our third fiscal quarter, we saw a number of positive developments across our business which further diversified our firm’s capabilities, and continued our focus on new technologies to optimize the client experience and support our business growth,” said Jenny Johnson, President and CEO of Franklin Resources, Inc.
“This quarter, we continued to make progress executing our long-term plan of diversification across asset classes, investment vehicles and geographies. Client demand led to positive net flows in multi-asset and alternative strategies during the quarter. We saw a strong quarter of positive net flows across our retail SMAs, Canvas® and ETF offerings. In particular, ETFs generated net inflows of over $3 billion with ending AUM of $27 billion. Our non-U.S. business saw a fifth consecutive quarter of positive net flows and finished the quarter with approximately $492 billion in AUM.
“As various aspects of the asset management industry evolve, we continue to make investments in technology across distribution, investment management and operations. This quarter, we announced that we are working with Microsoft to build an advanced financial AI platform, which will help embed artificial intelligence into our sales and marketing processes to create more personalized support for clients. We also recently announced plans to make a strategic minority investment in Envestnet, a significant industry platform. Finally, we announced the selection of a single platform to unify our investment management technologies across public market asset classes. This will support the simplification of our operation and reduce long-term capital expenditures.
“Looking ahead, we will continue to invest in the business to support our strategic priorities in asset management and wealth management for the benefit of all stakeholders.”
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| Quarter Ended |
| % Change |
| Quarter Ended |
| % Change | ||||||||||
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| 30-Jun-24 |
| 31-Mar-24 |
| Qtr. vs. Qtr. | 30-Jun-23 |
| Year vs. Year | |||||||||
Financial Results |
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(in millions, except per share data) |
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Operating revenues |
| $ | 2,122.9 |
|
| $ | 2,152.8 |
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| (1 | %) | $ | 1,969.0 |
|
| 8 | % | |
Operating income |
|
| 222.5 |
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| 129.3 |
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| 72 | % |
| 314.9 |
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| (29 | %) | |
Operating margin |
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| 10.5 | % |
|
| 6.0 | % |
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| 16.0 | % |
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Net income¹ |
| $ | 174.0 |
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| $ | 124.2 |
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| 40 | % | $ | 227.5 |
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| (24 | %) | |
Diluted earnings per share |
|
| 0.32 |
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|
| 0.23 |
|
| 39 | % |
| 0.44 |
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| (27 | %) | |
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As adjusted (non-GAAP):2 |
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Adjusted operating income |
| $ | 424.9 |
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| $ | 419.6 |
|
| 1 | % | $ | 476.8 |
|
| (11 | %) | |
Adjusted operating margin |
|
| 25.7 | % |
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| 25.2 | % |
|
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| 30.5 | % |
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Adjusted net income |
| $ | 326.4 |
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| $ | 306.6 |
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| 6 | % | $ | 326.1 |
|
| 0 | % | |
Adjusted diluted earnings per share |
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| 0.60 |
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| 0.56 |
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| 7 | % |
| 0.63 |
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| (5 | %) | |
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Assets Under Management |
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(in billions) |
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Ending |
| $ | 1,646.6 |
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| $ | 1,644.7 |
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| 0 | % | $ | 1,431.5 |
|
| 15 | % | |
Average3 |
|
| 1,632.6 |
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| 1,581.1 |
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| 3 | % |
| 1,419.6 |
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| 15 | % | |
Long-term net flows |
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| (3.2 | ) |
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| 6.9 |
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| 0.2 |
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Total assets under management (“AUM”) were $1,646.6 billion at June 30, 2024, up $1.9 billion during the quarter due to $3.0 billion of cash management net inflows and the positive impact of $2.1 billion of net market change, distributions, and other, partially offset by $3.2 billion of long-term net outflows.
Cash and cash equivalents and investments were $5.6 billion and, including the Company’s direct investments in consolidated investment products (“CIPs”), were $6.8 billion4 at June 30, 2024. Total stockholders’ equity was $13.6 billion and the Company had 522.1 million shares of common stock outstanding at June 30, 2024. The Company repurchased 4.3 million shares of its common stock for a total cost of $101.5 million during the quarter ended June 30, 2024.
Conference Call Information
A written commentary on the results by Jenny Johnson, President and CEO; Matthew Nicholls, Executive Vice President, CFO and COO; and Adam Spector, Executive Vice President, Head of Global Distribution will be available via investors.franklinresources.com today at approximately 8:30 a.m. Eastern Time.
Ms. Johnson and Messrs. Nicholls and Spector will also lead a live teleconference today at 11:00 a.m. Eastern Time to answer questions. Access to the teleconference will be available via investors.franklinresources.com or by dialing (+1) (800) 549-8228 in North America or (+1) (646) 564-2877 in other locations using access code 21080. A replay of the teleconference can also be accessed by calling (+1) (888) 660-6264 in North America or (+1) (646) 517-3975 in other locations using access code 21080# after 2:00 p.m. Eastern Time on July 26, 2024 through August 2, 2024, or via investors.franklinresources.com.
Analysts and investors are encouraged to review the Company’s recent filings with the U.S. Securities and Exchange Commission and to contact Investor Relations at investorrelations@franklintempleton.com before the live teleconference for any clarifications or questions related to the earnings release or written commentary.
FRANKLIN RESOURCES, INC. CONSOLIDATED STATEMENTS OF INCOME Unaudited | ||||||||||||||||||||||
(in millions, except per share data) |
| Three Months Ended |
| % |
| Nine Months Ended |
| % | ||||||||||||||
| 2024 |
| 2023 5 |
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| 2024 |
| 2023 5 |
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Operating Revenues |
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Investment management fees |
| $ | 1,689.9 |
|
| $ | 1,613.4 |
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| 5 | % |
| $ | 5,056.0 |
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| $ | 4,818.5 |
|
| 5 | % |
Sales and distribution fees |
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| 358.3 |
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| 304.0 |
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| 18 | % |
|
| 1,013.0 |
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| 897.3 |
|
| 13 | % |
Shareholder servicing fees |
|
| 61.8 |
|
|
| 38.8 |
|
| 59 | % |
|
| 162.3 |
|
|
| 115.5 |
|
| 41 | % |
Other |
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| 12.9 |
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| 12.8 |
|
| 1 | % |
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| 35.5 |
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| 32.0 |
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| 11 | % |
Total operating revenues |
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| 2,122.9 |
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| 1,969.0 |
|
| 8 | % |
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| 6,266.8 |
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| 5,863.3 |
|
| 7 | % |
Operating Expenses |
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