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FRANKLIN RESOURCES INC

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Business Summary

Franklin Resources, Inc. is a global investment management organization operating in the investment management and related services industry, with over $1.6 trillion in assets under management as of September 30, 2025 . The company offers services under brand names including Alcentra, Apera, Benefit Street Partners, Brandywine Global Investment Management, Canvas, Clarion Partners, ClearBridge Investments, Fiduciary Trust International, Franklin, Franklin Mutual Series, K2, Legg Mason, Lexington Partners, O’Shaughnessy, Putnam, Royce, Templeton and Western Asset Management Company . The industry is characterized by extensive regulation, competition, and disruption from fee pressure, regulatory changes, technology, and consolidation .

The company faces strong competition from numerous investment management companies, securities brokerage and investment banking firms, insurance companies, banks, hedge fund firms and other financial management institutions . Competitive factors include business reputation, investment performance, product mix and offerings, service quality and innovation, distribution relationships, and fees charged . The company believes it is one of the more widely diversified investment managers based in the U.S. due to its equity, fixed income, alternative and multi-asset asset mix coupled with its global presence . Competitors include those with greater financial resources and broader distribution channels .

The company generates revenue primarily from providing investment management and related services to investors worldwide through sponsored funds, institutional and high-net-worth separate accounts, retail separately managed account programs, sub-advised products, and other investment vehicles . Related services include fund administration, sales and distribution, and shareholder servicing, which may be performed directly or outsourced to third parties . Investment management fees, which represent a majority of revenues, depend largely on the level and relative mix of assets under management and the types of services provided . The company delivers investment capabilities through a variety of products and vehicles and multiple points of access, including directly to investors and through financial intermediaries .

The company offers a broad product mix under equity, fixed income, alternative, multi-asset and cash management asset classes . Equity capabilities include value, deep value, core value, blend, growth and growth at a reasonable price, convertibles, sector, Shariah, smart beta and thematic investments . Fixed income capabilities include government, municipals, corporate credit, bank loans, securitized, multi-sector, and other investments . Alternative capabilities include private debt, hedge funds, private equity, real estate and infrastructure investments . Multi-asset capabilities include income, real return, balanced/hybrid, total return, target date/risk, absolute return, tactical asset allocation and managed volatility investments . As of September 30, 2025, total AUM by asset class was $686.2 billion in equity , $438.7 billion in fixed income , $263.9 billion in alternative , $193.9 billion in multi-asset , and $78.5 billion in cash management .

The company's specialist investment managers include Benefit Street Partners, Brandywine Global, Clarion Partners, ClearBridge Investments, Fiduciary Trust International, Franklin Equity Group, Franklin Income Investors, Franklin Mutual Series, Franklin Templeton Fixed Income, Franklin Templeton Investment Solutions, Lexington Partners, O’Shaughnessy Asset Management, Putnam Investments, Royce Investment Partners, Templeton Global Investments, Templeton Global Macro and Western Asset Management . Investment products include mutual funds, closed-end funds, collective investment trusts, interval funds, private funds, institutional separate accounts, retail separately managed accounts, and other products . The company also provides sub-advisory services to certain investment products sponsored by other companies . Through Fiduciary Trust International related subsidiaries, the company provides investment management and related services to high-net-worth individuals and families, family offices, foundations and institutional clients, including trust, custody and related services such as administration, performance measurement, estate planning and tax planning .

During fiscal year 2025, the company recognized an impairment of intangible assets of $226.6 million , including a $200.0 million impairment of the indefinite-lived intangible asset related to certain contracts managed by Western Asset Management and $26.6 million related to certain other indefinite-lived intangible assets related to management contracts . The company also revised the remaining useful life of certain definite-lived intangible assets related to Brandywine, Martin Currie, and WAM managed accounts, resulting in a cumulative weighted-average remaining useful life of 8.6 years for all definite-lived intangible assets as of September 30, 2025 . On April 30, 2025, the company entered into an Amended and Restated Revolving Credit Agreement with a five-year term and $1.1 billion of aggregate available borrowings . On September 5, 2025, the company repaid all of the outstanding $300.0 million borrowings at the principal amount plus accrued interest of $5.5 million . During fiscal year 2025, the company repurchased 10.7 million shares of its common stock at a cost of $240.3 million . On October 1, 2025, the company completed the acquisition of Apera Asset Management for cash consideration of €65.2 million net of closing adjustments funded from existing cash , and will pay up to €125.0 million in cash through the fifth anniversary of the closing date based on achieving revenue targets .

Total operating revenues for fiscal year 2025 were $8,770.7 million , compared to $8,478.0 million in fiscal year 2024 and $7,849.4 million in fiscal year 2023 . Operating income was $604.1 million in fiscal year 2025, compared to $407.6 million in fiscal year 2024 and $1,102.3 million in fiscal year 2023. Net income attributable to Franklin Resources, Inc. was $524.9 million in fiscal year 2025, compared to $464.8 million in fiscal year 2024 and $882.8 million in fiscal year 2023. Diluted earnings per share were $0.91 in fiscal year 2025, compared to $0.85 in fiscal year 2024 and $1.72 in fiscal year 2023. Adjusted operating income (non-GAAP) was $1,640.2 million in fiscal year 2025, compared to $1,713.1 million in fiscal year 2024. Adjusted diluted earnings per share (non-GAAP) was $2.22 in fiscal year 2025, compared to $2.39 in fiscal year 2024.

Business Outlook

The company continues to focus on the long-term investment performance of its investment products and on providing high quality service to its clients . The company continuously performs reviews of its business model and remains focused on expense management while seeking to attract, retain and develop personnel and invest strategically in systems and technology that will provide a secure and stable environment . The company will continue to seek to protect and further its brand recognition while developing and maintaining broker-dealer and client relationships .

The company is focused on expanding its international operations and intends to continue to expand its operations internationally . Growth of international operations has involved and may continue to involve near-term increases in expenses, as well as additional capital costs such as information systems and technology costs, and costs related to compliance with particular regulatory or other local requirements . The company also regularly considers potential strategic transactions, including acquisitions, dispositions, consolidations, joint ventures or similar transactions, some of which may be deemed material .

The company's adjusted operating margin (non-GAAP) was 24.5% in fiscal year 2025, compared to 26.1% in fiscal year 2024 and 29.9% in fiscal year 2023. The company continues to place a high emphasis on its pay for performance philosophy, and any changes in the underlying performance of its investment products or changes in the composition of its incentive compensation offerings could have an impact on compensation and benefits expenses going forward . The company's level of compensation and benefit expenses may increase more quickly or decrease more slowly than its revenue in order to attract and retain talented individuals .

At September 30, 2025, the company employed approximately 9,800 employees , compared to approximately 10,200 at September 30, 2024 . The company operates offices in over 30 countries . The company depends upon its key personnel to manage its business, including portfolio managers, investment analysts, sales and management personnel and other professionals as well as executive officers and business unit heads . Competition for experienced personnel is significant and from time to time the company may experience a loss of valuable personnel .

During fiscal year 2025, the company repurchased 10.7 million shares of its common stock at a cost of $240.3 million . At September 30, 2025, 19.2 million shares remained available for repurchase under the stock repurchase program authorization . The company declared regular dividends of $1.28 per share ($0.32 per share per quarter) in fiscal year 2025 , and of $1.24 per share ($0.31 per share per quarter) in fiscal year 2024 . The company currently expects to continue paying comparable regular dividends on a quarterly basis depending upon earnings and other relevant factors . The company expects that its main uses of cash will be to invest in and grow its business including through acquisitions, pay stockholder dividends, invest in its products, pay income taxes and expenses of the business, enhance technology infrastructure and business processes, repurchase shares of its common stock, and repay and service debt .

The company faces structural headwinds including continued fee pressure, regulatory changes, an increasing and changing role of technology in investment management services, the continuous introduction of new products and services, and the consolidation of financial services firms through mergers and acquisitions . The investment management industry is facing transformative pressures including a continued shift away from actively managed core equities and fixed income strategies towards alternative, passive and smart beta strategies, increased demands from clients and distributors for client engagement and services, and a trend towards institutions developing fewer relationships and partners . The company also faces risks from poor investment performance of its products, which could reduce the level of AUM or affect sales .

The company is subject to extensive, complex, overlapping and frequently changing rules, regulations, policies, and legal interpretations around the world . Regulatory reforms may add further complexity to the company's business and operations and could require it to alter its investment management services and related activities, which could be costly, impede growth and adversely impact AUM, revenues and income . The company's subsidiary, Western Asset Management Company, remains the subject of parallel investigations by the SEC and the DOJ . The company is also subject to foreign currency exchange risk through its non-U.S. operations, and fluctuations in exchange rates to the U.S. dollar have affected and will in the future affect its financial results .

Risk Factors

The company derives substantially all of its operating revenues and income from investment management fees based on AUM, and any decrease in the value or amount of AUM due to market volatility, asset outflows, or a shift in asset mix toward lower-fee products negatively impacts revenues and income . Poor investment performance of products, as has been periodically experienced by certain products, has led and could lead to decreased sales and increased redemptions, lowering AUM and reducing management fees . The company is subject to extensive and complex regulation globally, and failure to comply could result in regulatory enforcement, civil liability, criminal liability, fines, penalties, and revocation of licenses . The company's subsidiary Western Asset Management Company remains the subject of parallel investigations by the SEC and the DOJ, which may result in additional costs, monetary judgments, settlements, reputational harm, and outflows of AUM . The company faces significant competition from numerous and sometimes larger companies with greater financial resources and broader distribution channels, and increasing competition for third-party distribution channels has caused distribution costs to rise .

Management Priorities

Management's message emphasizes that despite periods of volatility driven by uncertainty regarding U.S. economic and trade policies, during fiscal year 2025, U.S. and global equity markets provided positive returns due in part to strong corporate earnings and easing of monetary policy, with the S&P 500 Index and MSCI World Index increasing 14.8% and 17.8% for the fiscal year, and the Bloomberg Barclays Global Aggregate Index increasing 7.9% for the fiscal year. Total AUM was $1,661.2 billion at September 30, 2025 , 1% lower than at September 30, 2024 , while simple monthly average AUM increased 3% during fiscal year 2025 . Management states that the company remains focused on the investment performance of its products and on providing high quality service to its clients, and continuously performs reviews of its business model . The strategic priorities emphasized are: remaining focused on expense management while seeking to attract, retain and develop personnel and invest strategically in systems and technology that will provide a secure and stable environment, and continuing to seek to protect and further brand recognition while developing and maintaining broker-dealer and client relationships .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Overview
  2. [2] Item 1, Business — Overview
  3. [3] Item 1A, Risk Factors — Market and Volatility Risks
  4. [4] Item 1, Business — Competition
  5. [5] Item 1, Business — Competition
  6. [6] Item 1, Business — Competition
  7. [7] Item 1, Business — Competition
  8. [8] Item 1, Business — Overview
  9. [9] Item 1, Business — Overview
  10. [10] Item 7, MD&A — Overview
  11. [11] Item 1, Business — Overview
  12. [12] Item 1, Business — Our Business Structure
  13. [13] Item 1, Business — Our Business Structure
  14. [14] Item 1, Business — Our Business Structure
  15. [15] Item 1, Business — Our Business Structure
  16. [16] Item 1, Business — Our Business Structure
  17. [17] Item 1, Business — AUM by Asset Class and Product Type
  18. [18] Item 1, Business — AUM by Asset Class and Product Type
  19. [19] Item 1, Business — AUM by Asset Class and Product Type
  20. [20] Item 1, Business — AUM by Asset Class and Product Type
  21. [21] Item 1, Business — AUM by Asset Class and Product Type
  22. [22] Item 1, Business — Our Investment Management Related Services and Products
  23. [23] Item 1, Business — Our Investment Management Related Services and Products
  24. [24] Item 1, Business — Overview
  25. [25] Item 1, Business — High-Net-Worth Investment Management, Trust and Custody Services
  26. [26] Item 7, MD&A — Operating Expenses
  27. [27] Item 7, MD&A — Impairment of intangible assets
  28. [28] Item 7, MD&A — Impairment of intangible assets
  29. [29] Item 7, MD&A — Critical Accounting Policies and Estimates
  30. [30] Item 7, MD&A — Liquidity and Capital Resources
  31. [31] Item 7, MD&A — Liquidity and Capital Resources
  32. [32] Item 7, MD&A — Uses of Capital
  33. [33] Item 7, MD&A — Uses of Capital
  34. [34] Item 7, MD&A — Uses of Capital
  35. [35] Item 7, MD&A — Results of Operations
  36. [36] Item 7, MD&A — Results of Operations
  37. [37] Item 7, MD&A — Results of Operations
  38. [38] Item 7, MD&A — Results of Operations
  39. [39] Item 7, MD&A — Results of Operations
  40. [40] Item 7, MD&A — Results of Operations
  41. [41] Item 7, MD&A — Results of Operations
  42. [42] Item 7, MD&A — Results of Operations
  43. [43] Item 7, MD&A — Results of Operations
  44. [44] Item 7, MD&A — Results of Operations
  45. [45] Item 7, MD&A — Results of Operations
  46. [46] Item 7, MD&A — Results of Operations
  47. [47] Item 7, MD&A — Supplemental Non-GAAP Financial Measures
  48. [48] Item 7, MD&A — Supplemental Non-GAAP Financial Measures
  49. [49] Item 7, MD&A — Supplemental Non-GAAP Financial Measures
  50. [50] Item 7, MD&A — Supplemental Non-GAAP Financial Measures
  51. [51] Item 7, MD&A — Overview
  52. [52] Item 7, MD&A — Overview
  53. [53] Item 7, MD&A — Overview
  54. [54] Item 1A, Risk Factors — Global Operational Risks
  55. [55] Item 1A, Risk Factors — Global Operational Risks
  56. [56] Item 1A, Risk Factors — Global Operational Risks
  57. [57] Item 7, MD&A — Results of Operations
  58. [58] Item 7, MD&A — Results of Operations
  59. [59] Item 7, MD&A — Results of Operations
  60. [60] Item 7, MD&A — Compensation and Benefits
  61. [61] Item 7, MD&A — Compensation and Benefits
  62. [62] Item 1, Business — Human Capital Resources
  63. [63] Item 7, MD&A — Compensation and Benefits
  64. [64] Item 1, Business — Human Capital Resources
  65. [65] Item 1, Business — Human Capital Resources
  66. [66] Item 1A, Risk Factors — Human Capital Risks
  67. [67] Item 7, MD&A — Uses of Capital
  68. [68] Item 7, MD&A — Uses of Capital
  69. [69] Item 7, MD&A — Uses of Capital
  70. [70] Item 7, MD&A — Uses of Capital
  71. [71] Item 7, MD&A — Uses of Capital
  72. [72] Item 7, MD&A — Uses of Capital
  73. [73] Item 1A, Risk Factors — Market and Volatility Risks
  74. [74] Item 1A, Risk Factors — Competition and Distribution Risks
  75. [75] Item 1A, Risk Factors — Investment Performance and Reputational Risks
  76. [76] Item 1A, Risk Factors — Legal and Regulatory Risks
  77. [77] Item 1A, Risk Factors — Legal and Regulatory Risks
  78. [78] Item 1A, Risk Factors — Legal and Regulatory Risks
  79. [79] Item 1A, Risk Factors — Global Operational Risks
  80. [80] Item 1A, Risk Factors — Market and Volatility Risks
  81. [81] Item 1A, Risk Factors — Investment Performance and Reputational Risks
  82. [82] Item 1A, Risk Factors — Legal and Regulatory Risks
  83. [83] Item 1A, Risk Factors — Legal and Regulatory Risks
  84. [84] Item 1A, Risk Factors — Competition and Distribution Risks
  85. [85] Item 7, MD&A — Overview
  86. [86] Item 7, MD&A — Overview
  87. [87] Item 7, MD&A — Overview
  88. [88] Item 7, MD&A — Overview
  89. [89] Item 7, MD&A — Overview
  90. [90] Item 7, MD&A — Overview
  91. [91] Item 7, MD&A — Overview
  92. [92] Item 7, MD&A — Overview
  93. [93] Item 8, Consolidated Statements of Income
  94. [94] Item 8, Consolidated Statements of Income
  95. [95] Item 8, Consolidated Statements of Income
  96. [96] Item 8, Consolidated Statements of Income
  97. [97] Item 8, Consolidated Statements of Income
  98. [98] Item 8, Consolidated Statements of Income
  99. [99] Item 8, Consolidated Statements of Income
  100. [100] Item 8, Consolidated Statements of Income
  101. [101] Item 7, MD&A — Results of Operations
  102. [102] Item 7, MD&A — Results of Operations
  103. [103] Item 7, MD&A — Supplemental Non-GAAP Financial Measures
  104. [104] Item 7, MD&A — Supplemental Non-GAAP Financial Measures
  105. [105] Item 7, MD&A — Supplemental Non-GAAP Financial Measures
  106. [106] Item 7, MD&A — Supplemental Non-GAAP Financial Measures
  107. [107] Item 7, MD&A — Liquidity and Capital Resources
  108. [108] Item 7, MD&A — Liquidity and Capital Resources
  109. [109] Item 7, MD&A — Liquidity and Capital Resources
  110. [110] Item 7, MD&A — Liquidity and Capital Resources
  111. [111] Item 8, Consolidated Balance Sheets
  112. [112] Item 8, Consolidated Balance Sheets
  113. [113] Item 8, Consolidated Statements of Income
  114. [114] Item 8, Consolidated Statements of Income
  115. [115] Item 7, MD&A — Compensation and Benefits
  116. [116] Item 7, MD&A — Compensation and Benefits
  117. [117] Item 8, Consolidated Statements of Income
  118. [118] Item 8, Consolidated Statements of Income
  119. [119] Item 8, Consolidated Statements of Income
  120. [120] Item 8, Consolidated Statements of Income

Analysis on 6/21/2026