Franklin Resources Inc (0RT6.L) Q3 2025 Earnings Report

Franklin Resources Inc (0RT6.L) reported QQ3 2025 results with a modest top-line decline but sustained margins and strong cash generation. Revenue came in at 2.064 billion USD, down 2.77% year over year and 2.24% quarter over quarter. Gross margin remained robust at approximately 79.25%, supporting an operating margin of about 7.47% and an operating income of 154.1 million USD. Net income totaled 79.0 million USD, representing a 54.6% YoY decline and a 47.8% QoQ decline, with earnings per share of 0.15 USD. The quarter underscores the typical asset-management earnings dynamic: revenue is sensitive to net fee-related inflows and market activity, while cost discipline and non-operating items influence bottom-line earnings.

Operating cash flow was strong at 1.282 billion USD, delivering free cash flow of 1.269 billion USD. This liquidity enabled substantial capital allocation flexibility, including dividend payments of 339.4 million USD and investing cash outflows of 880.7 million USD. The company ended QQ3 with a solid balance sheet: cash and cash equivalents of 3.958 billion USD, total assets of 32.55 billion USD, and stockholders’ equity of 12.204 billion USD. Net debt stood at 9.289 billion USD on debt of 13.246 billion USD, highlighting leverage considerations that investors should monitor in a high-rate environment.

Looking ahead, management commentary on QQ3 was not captured in the provided dataset, limiting explicit forward-looking guidance. The investment thesis hinges on durable fee revenue from managed assets, continued cash flow generation, and the ability to manage debt levels while navigating industry fee pressure and market volatility. The near-term catalysts include stabilizing or growing net inflows, product diversification, and cost discipline to preserve margins amid commoditization of asset-management fees.