Franklin Resources reported a mixed QQ4 2025, with revenue of $2.3437 billion reflecting YoY growth of 5.99% and QoQ growth of 13.55%. The quarter was characterized by an anomalous gross loss of $869.6 million, yielding a negative gross margin of -37.1%, despite an operating income of $85.4 million and an EBITDA of $287.6 million (EBITDA margin ~12.3%). The company still delivered net income of $117.6 million and basic EPS of $0.23 (diluted $0.21), aided by a substantial positive contribution from other income totaling $168.9 million and a favorable tax outcome. This juxtaposition creates a bifurcated earnings quality signal: top-line momentum and an improving operating footprint on one hand, versus an extraordinary gross cost drag on the other. Management commentary will be essential to determine whether the gross margin deterioration is a one-off aberration (e.g., impairment, remeasurement, or unusual charges) or indicative of a broader cost structure shift. Looking ahead, the sustainability of earnings hinges on fund inflows, fee resilience, and the normalization of gross margins, as well as the degree to which non-operating income can be replicated or replaced by core operating cash flow.