AI Takeaway
T. Rowe Price delivered solid Q1 FY2026 results with revenue rising 5.3% YoY to $1.86B and operating income surging 14.1% to $680.5M, driven by improved operating leverage and strong cash generation.
Revenue
$1.86B
++5.28% YoY
EPS (Basic)
$2.23
++3.72% YoY
Operating Income
$680.5M
++14.12% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Total revenue increased 5.3% YoY to $1,857.0M in Q1 FY2026 from $1,763.9M in the prior-year period, likely reflecting higher average assets under management (AUM) and improved market conditions supporting fee income.
Source: Source: 10-Q Financial Data, Income Statement
Operating margin improved significantly to 36.6% in Q1 FY2026 from 33.8% in Q1 FY2025, a gain of approximately 280 basis points YoY, indicating that revenue growth outpaced expense growth and the firm achieved meaningful operating leverage.
Source: Source: 10-Q Financial Data, Key Ratios
Operating cash flow surged 30.2% YoY to $824.3M, well above net income of $498.2M, reflecting strong cash conversion and non-cash items. This robust cash generation supports the firm's capital return program.
Source: Source: 10-Q Financial Data, Cash Flow Statement
2 more insights available
Upgrade to unlockT. Rowe Price's revenue is predominantly fee-based and tied to assets under management, making earnings highly sensitive to equity and fixed income market fluctuations. A sustained market downturn could significantly reduce AUM and compress revenue without a proportional reduction in fixed costs.
Source: Source: 10-Q Financial Data, Income Statement
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $2.52 versus the $2.40 analyst consensus — a +5.0% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $1.86B | $1.76B | +5.28% |
Operating Income | $680.5M | $596.3M | +14.12% |
Net Income | $498.2M | $490.5M | +1.57% |
EPS (Basic) | $2.23 | $2.15 | +3.72% |
EPS (Diluted) | $2.23 | $2.15 | +3.72% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $14.39B | $13.99B | +2.85% |
Total Liabilities | $2.52B | $2.46B | +2.28% |
Stockholders' Equity | $10.78B | $10.39B | +3.68% |
Cash & Equivalents | $3.73B | $2.84B | +31.48% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $824.3M | $632.9M | +30.24% |
Investing Cash Flow | $59.6M | $-47.8M | +224.69% |
Financing Cash Flow | $-502M | $-411.4M | -22.02% |
Dividends Paid | $289.1M | $289.5M | -0.14% |
Share Buybacks | $333.5M | $215.2M | +54.97% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 36.6% | 33.8% | +2.84% |
Net Margin | 26.8% | — | — |
ROE | 4.6% | — | — |
ROA | 3.5% | — | — |
Debt to Equity | $0.234 | — | — |
Other companies in Asset Management & Custody Banks
T. Rowe Price reported Q1 FY2026 revenue of $1,857.0M, up 5.3% YoY, and operating income of $680.5M, up 14.1% YoY. EPS came in at $2.23, up 3.7% from $2.15 in the prior-year period, reflecting solid operating leverage and strong cash generation.
Revenue growth of 5.3% YoY to $1,857.0M was primarily driven by higher AUM-based investment advisory fees, likely supported by improved equity and fixed income market conditions. Operating margin also expanded by approximately 280 basis points to 36.6%, indicating that cost growth was well-controlled relative to revenue.
T. Rowe Price returned approximately $622.6M to shareholders in Q1 FY2026, comprising $289.1M in dividends and $333.5M in share buybacks. Share buybacks increased 55.0% YoY, reflecting management's confidence in the firm's financial position and strong cash generation of $824.3M from operations.
T. Rowe Price's balance sheet remains very strong, with cash and equivalents of $3,729.8M (up 31.5% YoY), a low debt-to-equity ratio of 0.23, and stockholders' equity of $10,777.6M. The firm's operating cash flow of $824.3M comfortably covers its capital return commitments, indicating excellent financial health.
While operating income grew 14.1% YoY to $680.5M, net income grew only 1.6% YoY to $498.2M, suggesting significant below-the-line headwinds such as investment losses, higher taxes, or other non-operating charges. This divergence between operating and net income growth is a key area for investors to monitor in future quarters.