T. Rowe Price tops Q3 profit estimates, in line on revenue

T. Rowe Price Group, Inc. (TROW) topped third-quarter profit estimates on an adjusted basis, the company said in a regulatory filing on Oct. 29. Net revenues were in line with expectations, while net client outflows reached $28.3 billion for the quarter.

Adjusted diluted earnings per share were $2.86, against a $2.70 consensus estimate compiled by Finnhub. A year earlier, adjusted diluted earnings per share were $2.81.

On a U.S. GAAP basis, diluted earnings per common share were $2.79, down from $2.87 in the third quarter of 2025. Net income attributable to T. Rowe Price Group, Inc. was $612.3 million, compared with $646.1 million a year earlier.

Here's how the company did:

• Adjusted diluted EPS: $2.86 vs. $2.81 a year earlier, $2.70 expected, according to Finnhub
• Diluted EPS, U.S. GAAP: $2.79 vs. $2.87 a year earlier
• Net revenues: $2,004.9 million vs. $1,893.5 million a year earlier, against $2.02 billion expected, according to Finnhub
• Net operating income, U.S. GAAP: $769.8 million vs. $643.2 million a year earlier
• Ending assets under management: $1,862.7 billion vs. $1,767.2 billion a year earlier

Net revenues rose 5.9% from a year earlier. Investment advisory fees were $1,796.4 million, up 5.8% from the same quarter in 2025.

Capital allocation-based income was $59.9 million, against $42.0 million a year earlier. The company said the increase was primarily driven by carried interest related to its recently launched late-stage venture fund.

Flows and assets under management

Assets under management decreased $30.7 billion during the quarter to $1,862.7 billion. Net client outflows were $28.3 billion. Average AUM was $1,887.2 billion, up 9.5% from a year earlier.

The investment advisory annualized effective fee rate, excluding performance-based fees, was 37.8 basis points, down from 39.1 basis points in the third quarter of 2025. The company said client flows and transfers drove a mix shift toward lower-fee products and asset classes, partially offset by equity market appreciation.

Chair and CEO Rob Sharps said, "We continue to expand our ETF, SMA, and model portfolio businesses, extending our active investment expertise to more clients through a broader range of portfolio solutions."

Expenses

Operating expenses under U.S. GAAP were $1,235.1 million, down 1.2% from a year earlier. Adjusted operating expenses were $1,200.1 million, up 5.8% from $1,134.4 million in the third quarter of 2025.

The company recorded a restructuring charge of $4.0 million, related to actions under its previously announced expense management program. It employed 7,640 associates at Sept. 30, 2026, down 2.4% from 7,830 a year earlier.

Tax rate outlook

The company estimates its effective income tax rate for the full year 2026, on both a U.S. GAAP and adjusted basis, will be in the range of 23.5% to 25.5%. Its year-to-date U.S. GAAP effective income tax rate was 23.7%.

The company said it expects to file its Form 10-Q for the third quarter later on Oct. 29. The financial results in the release are unaudited.