T. Rowe Price Reports Q1 2025 Financial Results with Decrease in Net Income

T. Rowe Price Group, Inc. reported its financial results for the first quarter of 2025, revealing a net income of $490.5 million, a decrease of 14.5% from $573.8 million in the same period last year. The company's diluted earnings per share fell to $2.15, down from $2.49 in the first quarter of 2024. Total net revenues increased slightly to $1.763 billion, a 0.8% rise from $1.750 billion in the prior year, primarily driven by a 4.0% increase in investment advisory fees, which reached $1.598 billion, compared to $1.536 billion in the previous year.

The decline in profitability was attributed to a significant drop in performance-based advisory fees, which fell by 40.9% to $10.4 million, and a substantial decrease in capital allocation-based income, which reported a loss of $1.2 million compared to a gain of $47.1 million in the prior year. Operating expenses remained relatively stable, increasing by just 0.3% to $1.168 billion, with notable reductions in compensation and related costs, which decreased by 6.3% to $664.5 million.

In terms of operational metrics, T. Rowe Price's assets under management (AUM) totaled $1.566 trillion at the end of March 2025, reflecting a decrease of $40.3 billion from the previous quarter, driven by market depreciation of $31.7 billion and net cash outflows of $8.6 billion. The average AUM for the quarter was $1.620 trillion, a 9.2% increase year-over-year. The firm also reported a slight decrease in employee headcount, with 8,084 associates as of March 31, 2025, down 0.9% from the end of 2024.

Strategically, T. Rowe Price has continued to invest in its capabilities, including technology and new product offerings, to enhance its service to clients. The firm has committed $357 million for future product launches through 2026 and has also been active in returning capital to shareholders, repurchasing $215.2 million worth of common stock and increasing its quarterly dividend by 2.4% to $1.27 per share. Looking ahead, T. Rowe Price anticipates that its revenues and results will continue to fluctuate based on market conditions and the composition of its assets under management, while maintaining a focus on strategic growth opportunities.