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- **Revenue Growth**: FY 2025 AUM $1.66T (-1%), but average AUM +2.6%. Adjusted operating revenue +2.1% to $6.7B, driven by performance fees and higher AUM.
- **Alternative Momentum**: 2026 alternative fundraising target $25-30B, with tokenized AUM +75% YoY to $1.7B.
- **Expense Efficiency**: 2026 cost savings to offset market volatility, with net expenses flat or lower vs. 2025.
- **AI & Innovation**: 100%+ employees using AI tools, tokenized money market funds with intraday yields, and Binance crypto exchange partnerships.
- **Infrastructure Expansion**: $94T global infrastructure funding need, with perpetual funds launching in 2026 for wealth channel.

**【CEO Summary Section】**
- **Strategic Progress**: Achieved strong momentum in the first year of the 5-year plan, with alternatives, ETFs, and Canvas ahead of targets. AUM growth of 13%, 56%, and 71% respectively in retail SMAs, ETFs, and Canvas.
- **Investment Performance**: Over 50% of mutual funds, ETFs, and composites outperformed peers. AI-driven initiatives across investment management, operations, and sales are accelerating scale and efficiency.
- **Innovation**: Launched tokenized money market funds with intraday yield calculations, and expanded partnerships like Binance for crypto exchange integration. AI partnerships with Microsoft and Wand AI are driving measurable productivity gains.
- **Private Markets Expansion**: Acquired Apera Asset Management to boost private credit AUM to $95 billion. Infrastructure partnerships with Actis, DigitalBridge, and Copenhagen Infrastructure aim to capture $94 trillion in global funding needs.
- **Digital Assets Growth**: Tokenized AUM reached $1.7 billion, up 75% YoY, with first-of-kind features like on-chain mutual fund tokenization.

**【CFO Financial Commentary】
- **Q4 2025 Results**: Adjusted operating revenue $1.82 billion (+13.9%), net income $357.5 million (+35.7%), and EPS $0.67 (+36.7%). Higher performance fees and AUM drove margin expansion to 26%.
- **FY 2025 Performance**: Adjusted operating income $1.64 billion (-4.3%), net income $1.2 billion (-6.3%), and EPS $2.22 (-7.5%). Cost management offset headwinds from Western Asset outflows.
- **FY 2026 Guidance**: Target $200 million in cost savings, with expenses flat or lower vs. 2025. EFR expected to remain stable at ~37.5 bps, with potential upside from flagship funds.
- **Capital Management**: Returned $930 million to shareholders via dividends and buybacks. Maintained balance sheet flexibility with $2.8 billion in co-investments for new strategies.

**【Q&A Highlights】
- **Alternatives Growth**: 2026 fundraising target $25-30 billion, with Lexington flagship fund expected to close first half 2026. Private wealth AUM target to double by 2029.
- **Expense Efficiency**: 2026 cost savings to fund strategic initiatives, with net expenses flat or lower despite market volatility.
- **Infrastructure Strategy**: Partnerships with Actis, DigitalBridge, and Copenhagen to launch perpetual infrastructure funds for wealth channel, targeting $1 trillion+ retail alternatives market.
- **AI Impact**: Majority of employees using approved AI tools, with measurable productivity gains in operations and client service.
- **ETF Distribution**: Active ETFs account for 50% of flows, with Canvas platform expanding to 500+ partners and 1,100+ financial advisers.
- **Risk Management**: Minimal exposure to problem credits, with direct lending focused on lower middle market Europe post-Apera acquisition.

Franklin Resources, Inc. (BEN) Q4 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

BEN

BEN fundamentals

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