Franklin Resources Reports Decline in Revenue and Net Income for Q3 FY 2025

Franklin Resources, Inc. reported its financial results for the third quarter of fiscal year 2025, revealing a decline in both revenue and net income compared to the same period last year. For the three months ended June 30, 2025, the company generated total operating revenues of $2,064.0 million, a decrease of 3% from $2,122.9 million in the prior year. Net income attributable to Franklin Resources, Inc. was $92.3 million, down 47% from $174.0 million in the same quarter of 2024. Diluted earnings per share also fell to $0.15 from $0.32, reflecting a 53% decline.

In terms of year-to-date performance, Franklin's operating revenues increased by 3% to $6,427.0 million for the nine months ended June 30, 2025, compared to $6,266.8 million in the previous year. However, net income for the nine-month period decreased by 26% to $407.3 million from $549.5 million. The decline in profitability was attributed to a combination of factors, including a decrease in average assets under management (AUM) and lower performance fees, particularly in the fixed income asset class.

Strategically, Franklin Resources has been active in expanding its portfolio through acquisitions. The company completed the acquisition of Putnam on January 1, 2024, which contributed to an increase in operating expenses due to integration costs. Additionally, Franklin announced plans to acquire a majority interest in Apera Asset Management for approximately €70 million, with potential additional payments based on revenue targets. This acquisition is expected to close in the first quarter of fiscal year 2026.

Operationally, Franklin's total AUM as of June 30, 2025, was $1,611.8 billion, a decrease of 4% from $1,678.6 billion at the beginning of the fiscal year. The company experienced long-term net outflows of $85.5 billion during the nine months, which were partially offset by positive market changes and cash management inflows. The firm’s workforce also saw a reduction, with employee headcount decreasing to approximately 10,100 from 10,300 a year earlier.

Looking ahead, Franklin Resources remains focused on navigating a complex economic and regulatory environment while emphasizing investment performance and client service. The company plans to continue investing in technology and personnel to enhance its operational capabilities. Despite the challenges, management expressed confidence in the firm's ability to adapt and grow, although they acknowledged that market conditions and regulatory changes could impact future performance.