Franklin Resources, Inc. (NYSE: BEN), the parent of Franklin Templeton, reported preliminary fiscal Q4 2025 results before the bell Friday, posting GAAP revenue of $2.34 billion and adjusted diluted EPS of $0.67, topping pre‑earnings consensus that had centered around $0.57 EPS and $2.12 billion in revenue. Quarter‑end assets under management (AUM) were $1.66 trillion. The firm recorded long‑term net outflows of $11.9 billion, but net inflows of $11.4 billion excluding Western Asset Management, and highlighted a won‑but‑unfunded institutional pipeline of $20.4 billion.
At a glance (Q4 FY2025, quarter ended Sept. 30)
- GAAP revenue:$2.34B (↑14% q/q; ↑6% y/y)
- GAAP net income / EPS:$117.6M / $0.21
- Adjusted net income / EPS:$357.5M / $0.67 (↑36% q/q; ↑14% y/y)
- Adjusted operating income / margin:$472.4M / 26.0%
- Adjusted performance fees:$177.9M (vs. $58.5M in Q3; $72.0M y/y)
- Ending AUM:$1.661T (↑3.1% q/q; ↓1.0% y/y)
- Long‑term flows:–$11.9B; ex‑Western Asset:+$11.4B
- Cash & investments:$6.7B; FY25 capital returns to shareholders:$930M (dividends and buybacks)
(All figures preliminary; adjusted metrics are non‑GAAP.)
Why it matters: The top‑line and adjusted EPS upside versus Street expectations underscores momentum in fee‑generating areas (performance fees, average AUM) and improved operating leverage—even as Western Asset outflows continue to weigh on consolidated long‑term flows.
AUM, flows and where the money moved
Quarter‑end AUM finished at $1.661T, up 3.1% from June, helped by $54.1B of positive net market change and $7.2B of cash‑management net inflows, partly offset by $11.9B of long‑term net outflows (including $23.3B of outflows at Western Asset). Ex‑Western Asset, Franklin reported eight consecutive quarters of positive long‑term net flows and a $20.4B pipeline of won but unfunded mandates.
Within vehicles, ETFs reached $49.1B AUM (↑56% y/y) with 16 straight quarters of positive net flows, retail SMAs rose to $164.5B (↑13% y/y), and Canvas® direct indexing grew to $16.3B (↑71% y/y). By asset class, the firm called out multi‑asset net inflows of $4.4B in Q4, led by the Franklin Income Fund, Canvas, Fiduciary Trust International and Franklin Templeton Investment Solutions.
October look‑through: In a separate monthly update this week, Franklin reported preliminary AUM of $1.689T as of Oct. 31, reflecting stronger markets and the October 1 closing of the Apera Asset Management acquisition. October saw $10B of cash‑management net inflows, preliminary long‑term net outflows of $2B (including $4B at Western Asset), and ex‑Western long‑term net inflows of $2B. By class, equity AUM was $697.5B, fixed income $437.1B, alternatives $269.7B, and multi‑asset $196.4B.
Alternatives and strategy updates
Franklin said alternative AUM reached a record ~$270B after closing the Apera acquisition, with FY2025 fundraising of $26.2B (including $22.9B in private markets). The firm also noted $5.7B of fee‑generating capital raised or called in Q4 and aggregate FY2025 realizations/distributions of $13.9B.
On the technology front, Franklin formalized a multi‑year partnership with Wand AI to deploy agentic AI across research, distribution and operations—moving from pilots to enterprise roll‑out. The firm says the initiative is governed by robust controls and aims to scale productivity across its platform.
Profitability drivers
Management highlighted elevated performance fees, higher average AUM, cost‑savings realization and disciplined expense management as key contributors to the quarter. Q4 adjusted effective fee rate was 37.5 bps; adjusted operating margin improved to 26.0%. For FY2025, adjusted operating revenue rose 2.1%, with adjusted operating margin at 24.5%.
Balance sheet, capital returns and dividend
Franklin ended the quarter with $6.7B in cash and investments (including direct investments in consolidated investment products). The company returned $930M to shareholders in FY2025 via dividends and share repurchases (including 2.6M shares bought for $67.1M in Q4). Dividends declared were $0.32 per share in Q4 and $1.28 for the fiscal year.
Stock reaction
By mid‑afternoon Friday, BEN traded around $22.72, down ~2.3% on the session (intraday high $24.10, low $22.31). Market commentary framed the print as a revenue/EPS beat with easing net outflows year‑over‑year.
Today’s other Franklin headlines
- Regulatory filing in the U.K.: Franklin disclosed a Form 8.3 under the U.K. Takeover Code regarding JTC plc, showing a 2.34% interest—routine for holders crossing the 1% threshold in M&A‑related situations.
- Third‑party coverage: Wire summaries characterized the quarter as stronger on adjusted metrics, with ending AUM at $1.66T and outflows narrowing versus last year.
What to watch on today’s call (11:00 a.m. ET)
- Western Asset trajectory: pace of client redemptions and performance remediation.
- Alternatives growth: fundraising cadence post‑Apera and deployment pipeline.
- Fee mix & performance fees: sustainability after a strong Q4 print.
- Agentic AI rollout: tangible productivity or revenue impacts as deployments scale.
Dial‑in and webcast details are posted on Franklin’s investor site.
Context and background
Over the past year, Franklin has diversified beyond traditional mutual funds, leaning into alternatives, ETFs, SMAs and technology—a pivot that aligns with industry shifts and its acquisition strategy. Western Asset’s outflows and earlier regulatory scrutiny had been a drag, making the ex‑Western positive flow streak and institutional pipeline key tells for FY2026.
Source documents & disclosures
- Q4 & FY2025 preliminary press release with detailed tables and commentary.
- Investor presentation (Nov. 7, 2025) with KPIs for fee rate, margins, flows, and alternatives roll‑forward.
- October 2025 AUM update (Nov. 5, 2025).
- Wand AI strategic partnership (Nov. 6, 2025).
- Consensus context (pre‑earnings) via Zacks on Nasdaq.
- Wire/press aggregation confirming key headline figures.
- SEC 8‑K furnishing the results press release.
- Live price (intraday) for BEN.
Editor’s note: Franklin characterized these figures as preliminary and provided non‑GAAP measures alongside GAAP. Investors should review the reconciliations and risk factors in the company’s materials and SEC filings.
