Item 1. Financial Statements.

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Item 1. Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF INCOME

Unaudited


	Three Months Ended March 31,				Six Months Ended March 31,
(in millions, except per share data)	2026		2025		2026		2025
Operating Revenues
Investment management fees	$	1,819.3	$	1,673.6	$	3,667.2	$	3,472.9
Sales and distribution fees	396.6		364.9		785.3		740.4
Shareholder servicing fees	69.0		61.9		139.9		125.4
Other	10.0		11.0		29.6		24.3
Total operating revenues	2,294.9		2,111.4		4,622.0		4,363.0
Operating Expenses
Compensation and benefits	964.7		920.0		1,995.4		1,911.4
Sales, distribution and marketing	544.0		498.1		1,084.9		1,010.4
Information systems and technology	157.6		158.7		314.6		314.7
Occupancy	67.1		69.3		133.9		144.4
Amortization of intangible assets	50.6		112.5		105.7		225.1
Impairment of intangible assets	—		24.4		—		24.4
General, administrative and other	187.6		182.8		383.2		368.0
Total operating expenses	1,971.6		1,965.8		4,017.7		3,998.4
Operating Income	323.3		145.6		604.3		364.6
Other Income (Expenses)
Investment and other income, net	56.0		94.1		136.3		104.6
Interest expense	(19.9)		(20.8)		(40.3)		(43.9)
Investment and other income (losses) of consolidated investment products, net	96.5		(164.7)		221.4		(50.6)
Expenses of consolidated investment products	(10.2)		(11.5)		(24.2)		(18.8)
Other income (expenses), net	122.4		(102.9)		293.2		(8.7)
Income before taxes	445.7		42.7		897.5		355.9
Taxes on income	99.1		31.1		204.1		112.2
Net income	346.6		11.6		693.4		243.7
Less: net income (loss) attributable to
Redeemable noncontrolling interests	23.9		(158.4)		63.6		(108.8)
Nonredeemable noncontrolling interests	54.5		18.6		106.1		37.5
Net Income Attributable to Franklin Resources, Inc.	$	268.2	$	151.4	$	523.7	$	315.0

Earnings per Share
Basic	$	0.49	$	0.26	$	0.95	$	0.55
Diluted	0.49		0.26		0.95		0.55

See Notes to Consolidated Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited


(in millions)		Three Months Ended March 31,						Six Months Ended March 31,
	2026			2025			2026			2025
Net Income		$	346.6		$	11.6		$	693.4		$	243.7
Other Comprehensive Income (Loss)
Currency translation adjustments, net of tax		(40.8)			28.5			(41.9)			(76.6)
Net unrealized losses on defined benefit plans, net of tax		—			(3.1)			—			(2.8)

Total other comprehensive income (loss)		(40.8)			25.4			(41.9)			(79.4)
Total comprehensive income		305.8			37.0			651.5			164.3
Less: comprehensive income (loss) attributable to
Redeemable noncontrolling interests		23.9			(158.4)			63.6			(108.8)
Nonredeemable noncontrolling interests		54.5			18.6			106.1			37.5
Comprehensive Income Attributable to Franklin Resources, Inc.		$	227.4		$	176.8		$	481.8		$	235.6

See Notes to Consolidated Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS

Unaudited


(in millions, except share and per share data)	March 31, 2026		September 30, 2025
Assets
Cash and cash equivalents	$	2,571.5	$	3,088.1
Receivables	1,426.2		1,541.7
Investments (including $1,118.3 and $1,179.5 at fair value at March 31, 2026 and September 30, 2025)	2,569.7		2,374.0
Assets of consolidated investment products
Cash and cash equivalents	997.5		485.8
Investments, at fair value	13,810.2		12,278.8
Property and equipment, net	903.6		949.1
Goodwill	6,295.6		6,206.0
Intangible assets, net	4,091.4		4,166.0
Operating lease right-of-use assets	763.0		764.3
Other	681.1		514.5
Total Assets	$	34,109.8	$	32,368.3

Liabilities
Compensation and benefits	$	1,387.0	$	1,760.3
Accounts payable and accrued expenses	585.4		615.4


Debt	2,253.3		2,362.0
Liabilities of consolidated investment products
Accounts payable and accrued expenses	700.4		1,063.0
Debt	12,153.1		9,937.3
Deferred tax liabilities	337.2		261.6
Operating lease liabilities	987.7		1,000.6
Other	1,090.4		1,179.3
Total liabilities	19,494.5		18,179.5
Commitments and Contingencies (Note 10)
Redeemable Noncontrolling Interests	1,478.9		1,182.0
Stockholders’ Equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none issued	—		—
Common stock, $0.10 par value, 1,000,000,000 shares authorized; 519,620,511 and 520,951,796 shares issued and outstanding at March 31, 2026 and September 30, 2025	52.0		52.1
Capital in excess of par	999.9		956.8
Retained earnings	11,560.9		11,516.0
Accumulated other comprehensive loss	(489.0)		(447.1)
Total Franklin Resources, Inc. stockholders’ equity	12,123.8		12,077.8
Nonredeemable noncontrolling interests	1,012.6		929.0
Total stockholders’ equity	13,136.4		13,006.8
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity	$	34,109.8	$	32,368.3

See Notes to Consolidated Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Unaudited


		Franklin Resources, Inc.																Non- redeemable Non- controlling Interests		Total Stockholders’ Equity
	Common Stock					Capital in Excess of Par Value			Retained Earnings			Accum- ulated Other Compre- hensive Loss			Stockholders’ Equity
(in millions)
for the six months ended March 31, 2026	Shares		Amount
Balance at October 1, 2025		521.0		$	52.1		$	956.8		$	11,516.0		$	(447.1)		$	12,077.8	$	929.0	$	13,006.8
Adoption of new accounting guidance										25.3						25.3				25.3
Net income										255.5						255.5		51.6		307.1
Other comprehensive loss													(1.1)			(1.1)				(1.1)
Dividends declared on common stock ($0.33 per share)										(177.6)						(177.6)				(177.6)
Repurchase of common stock		(1.8)		(0.2)			(41.7)			—						(41.9)				(41.9)
Issuance of common stock		0.8		0.1			28.8									28.9				28.9
Stock-based compensation							47.1									47.1				47.1
Net subscriptions and other																		17.2		17.2
Net deconsolidation of investment products																		(32.2)		(32.2)
Adjustment to fair value of redeemable noncontrolling interests										(79.1)						(79.1)				(79.1)
Balance at December 31, 2025		520.0		$	52.0		$	991.0		$	11,540.1		$	(448.2)		$	12,134.9	$	965.6	$	13,100.5
Net income										268.2						268.2		54.5		322.7
Other comprehensive loss													(40.8)			(40.8)				(40.8)
Dividends declared on common stock ($0.33 per share)										(177.5)						(177.5)				(177.5)
Repurchase of common stock		(2.3)		(0.2)			(56.9)			—						(57.1)				(57.1)
Issuance of common stock		1.9		0.2			54.7									54.9				54.9
Stock-based compensation							11.1									11.1				11.1

Net subscriptions and other																		149.9		149.9
Net deconsolidation of investment products																		(157.4)		(157.4)
Adjustment to fair value of redeemable noncontrolling interests										(69.9)						(69.9)				(69.9)
Balance at March 31, 2026		519.6		$	52.0		$	999.9		$	11,560.9		$	(489.0)		$	12,123.8	$	1,012.6	$	13,136.4

See Notes to Consolidated Financial Statements.


		Franklin Resources, Inc.																Non- redeemable Non- controlling Interests		Total Stockholders’ Equity
	Common Stock					Capital in Excess of Par Value			Retained Earnings			Accum- ulated Other Compre- hensive Loss			Stockholders’ Equity
(in millions)
for the six months ended March 31, 2025	Shares		Amount
Balance at October 1, 2024		523.6		$	52.4		$	947.6		$	11,927.6		$	(419.5)		$	12,508.1	$	734.9	$	13,243.0

Net income										163.6						163.6		18.9		182.5
Other comprehensive loss													(104.8)			(104.8)				(104.8)
Dividends declared on common stock ($0.32 per share)										(173.6)						(173.6)				(173.6)
Repurchase of common stock		(0.3)		—			(5.8)			—						(5.8)				(5.8)
Issuance of common stock		0.7		—			21.5									21.5				21.5
Stock-based compensation							51.6									51.6				51.6
Net subscriptions and other																		13.1		13.1
Net consolidation of investment products																		4.7		4.7
Adjustment to fair value of redeemable noncontrolling interests										1.5						1.5				1.5
Balance at December 31, 2024		524.0		$	52.4		$	1,014.9		$	11,919.1		$	(524.3)		$	12,462.1	$	771.6	$	13,233.7
Net income										151.4						151.4		18.6		170.0
Other comprehensive income													25.4			25.4				25.4
Dividends declared on common stock ($0.32 per share)										(173.5)						(173.5)				(173.5)
Repurchase of common stock		(0.5)		(0.1)			(9.9)			—						(10.0)				(10.0)
Issuance of common stock		1.9		0.2			44.7									44.9				44.9
Stock-based compensation							12.7									12.7				12.7

Net subscriptions and other																		38.4		38.4
Net deconsolidation of investment products																		(13.5)		(13.5)
Adjustment to fair value of redeemable noncontrolling interests										(167.0)						(167.0)				(167.0)
Balance at March 31, 2025		525.4		$	52.5		$	1,062.4		$	11,730.0		$	(498.9)		$	12,346.0	$	815.1	$	13,161.1

See Notes to Consolidated Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited


	Six Months Ended March 31,
(in millions)	2026		2025

Net Income	$	693.4	$	243.7
Adjustments to reconcile net income to net cash used in operating activities:
Stock-based compensation	128.4		119.9
Amortization of deferred sales commissions	48.1		39.0
Depreciation and other amortization	58.2		60.7
Amortization of intangible assets	105.7		225.1
Impairment of intangible assets	—		24.4
Net losses on investments	29.3		10.3
Income from investments in equity method investees	(35.8)		(15.5)
Net (gains) losses on investments of consolidated investment products	(106.2)		101.8
Net purchase of investments by consolidated investment products	(473.4)		(230.7)
Deferred income taxes	92.3		(39.9)
Other	39.3		139.2
Changes in operating assets and liabilities:
Increase in receivables and other assets	(330.6)		(48.2)
Decrease (increase) in investments, net	(4.1)		3.3
Decrease in accrued compensation and benefits	(377.9)		(488.0)

Decrease in accounts payable, accrued expenses and other liabilities	(149.3)		(300.1)
Decrease in accounts payable and accrued expenses of consolidated investment products	(0.1)		(40.3)
Net cash used in operating activities	(282.7)		(195.3)
Purchase of investments	(633.6)		(545.1)
Liquidation of investments	456.6		480.2
Purchase of investments by consolidated collateralized loan obligations	(3,944.8)		(3,199.4)
Liquidation of investments by consolidated collateralized loan obligations	2,510.2		2,357.1
Proceeds from sale (additions) of property and equipment, net	4.5		(109.3)
Acquisition, net of cash acquired	(69.7)		—


Net consolidation (deconsolidation) of investment products	0.9		(4.1)
Net cash used in investing activities	(1,675.9)		(1,020.6)

[Table continued on next page]

See Notes to Consolidated Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

[Table continued from previous page]


	Six Months Ended March 31,
(in millions)	2026		2025

Issuance of common stock	$	13.0	$	10.2
Dividends paid on common stock	(346.6)		(339.4)
Repurchase of common stock	(99.0)		(15.8)
Proceeds from debt	500.0		300.0

Payment on debt	(600.0)		(400.0)
Proceeds from repurchase agreement	0.5		41.2
Payments on repurchase agreement	(9.8)		(32.4)
Proceeds from debt of consolidated investment products	4,601.3		3,266.5
Payments on debt of consolidated investment products	(2,687.2)		(2,596.9)
Payments on contingent consideration liabilities	—		(0.7)
Noncontrolling interests	606.3		147.6
Net cash provided by financing activities	1,978.5		380.3
Effect of exchange rate changes on cash and cash equivalents	(24.8)		(34.2)
Decrease in cash and cash equivalents	(4.9)		(869.8)
Cash and cash equivalents, beginning of period	3,573.9		4,408.9
Cash and Cash Equivalents, End of Period	$	3,569.0	$	3,539.1

Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	$	388.7	$	402.3
Cash paid for interest	47.3		49.2
Cash paid for interest by consolidated investment products	352.9		403.7
Non-cash purchase of investments	20.0		—

See Notes to Consolidated Financial Statements.

FRANKLIN RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

(Unaudited)

Note 1 – Basis of Presentation

The unaudited interim financial statements of Franklin Resources, Inc. (“Franklin”) and its consolidated subsidiaries (collectively, the “Company”) included herein have been prepared in accordance with the instructions to Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Under these rules and regulations, some information and footnote disclosures normally included in financial statements prepared under accounting principles generally accepted in the United States of America have been shortened or omitted. Management believes that all adjustments necessary for a fair statement of the financial position and the results of operations for the periods shown have been made. All adjustments are normal and recurring. Management also believes that the accounting estimates are appropriate, and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates, actual amounts may differ from these estimates. These financial statements should be read together with the Company’s audited financial statements included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (“fiscal year 2025”).

Revision to previously issued financial statements

During the quarter ended March 31, 2026, the Company identified that the amount reported in the supplemental disclosure of cash flow information in its consolidated statement of cash flows for cash paid for income taxes for the six month period ended March 31, 2025 was understated by $185.2 million, and the correct amount for that period was $402.3 million.

There is no impact on net income attributable to the Company, earnings per share, total assets, total liabilities, retained earnings, total shareholders’ equity or operating cash flow activities. There is no impact on the financial results attributable to the Company’s shareholders. The Company has determined this did not result in a material misstatement to its previously issued consolidated financial statements. Nonetheless, for comparability, the Company has revised the comparative prior period amounts included in the consolidated statements of cash flows.

Note 2 – New Accounting Guidance

Recently Adopted Accounting Guidance

On October 1, 2025, the Company adopted an amendment to the existing intangible assets guidance issued by the Financial Accounting Standards Board. The amendment requires eligible crypto assets to be measured at fair value, with changes recognized in net income, along with expanded disclosures. The Company adopted the amendment using the modified-retrospective transition approach and recognized a cumulative effective adjustment resulting in an increase of $25.3 million in retained earnings as of October 1, 2025. The crypto assets are presented within intangible assets, net on the consolidated balance sheets.

There were no other significant updates to the new accounting guidance that the Company has not yet adopted as disclosed in its Form 10-K for fiscal year 2025.

Note 3 – Earnings per Share

The components of basic and diluted earnings per share were as follows:


(in millions, except per share data)		Three Months Ended March 31,						Six Months Ended March 31,
	2026			2025			2026			2025
Net income attributable to Franklin Resources, Inc.		$	268.2		$	151.4		$	523.7		$	315.0
Less: allocation of earnings to participating nonvested stock and stock unit awards		16.3			14.3			32.5			29.7
Net Income Available to Common Stockholders		$	251.9		$	137.1		$	491.2		$	285.3

Weighted-average shares outstanding – basic		517.5			519.1			517.5			518.3
Dilutive effect of nonparticipating nonvested stock unit awards		0.7			0.8			0.8			0.7
Weighted-Average Shares Outstanding – Diluted		518.2			519.9			518.3			519.0

Earnings per Share
Basic		$	0.49		$	0.26		$	0.95		$	0.55
Diluted		0.49			0.26			0.95			0.55

There were no nonparticipating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been antidilutive for the three and six months ended March 31, 2026 and 2025.

Note 4 – Revenues

Operating revenues by geographic area were as follows:


(in millions)	United States		Luxembourg		Asia-Pacific		Americas Excluding United States		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the three months ended March 31, 2026
Investment management fees	$	1,333.6	$	246.1	$	88.6	$	62.8	$	88.2	$	1,819.3
Sales and distribution fees	266.3		111.5		8.0		10.1		0.7		396.6
Shareholder servicing fees	60.2		8.3		0.4		0.1		—		69.0
Other	9.5		—		0.4		—		0.1		10.0
Total	$	1,669.6	$	365.9	$	97.4	$	73.0	$	89.0	$	2,294.9


(in millions)	United States		Luxembourg		Asia-Pacific		Americas Excluding United States		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the six months ended March 31, 2026
Investment management fees	$	2,697.4	$	492.0	$	170.5	$	127.1	$	180.2	$	3,667.2
Sales and distribution fees	535.0		214.8		14.0		20.3		1.2		785.3
Shareholder servicing fees	122.4		16.5		0.9		0.1		—		139.9
Other	28.5		—		0.9		—		0.2		29.6
Total	$	3,383.3	$	723.3	$	186.3	$	147.5	$	181.6	$	4,622.0


(in millions)	United States		Luxembourg		Asia-Pacific		Americas Excluding United States		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the three months ended March 31, 2025
Investment management fees	$	1,272.4	$	215.9	$	71.5	$	49.2	$	64.6	$	1,673.6
Sales and distribution fees	259.2		89.6		6.4		9.6		0.1		364.9
Shareholder servicing fees	53.7		7.7		0.4		0.1		—		61.9
Other	10.8		—		0.2		—		—		11.0
Total	$	1,596.1	$	313.2	$	78.5	$	58.9	$	64.7	$	2,111.4


(in millions)	United States		Luxembourg		Asia-Pacific		Americas Excluding United States		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the six months ended March 31, 2025
Investment management fees	$	2,633.8	$	439.8	$	147.3	$	102.8	$	149.2	$	3,472.9
Sales and distribution fees	526.3		183.0		11.3		19.6		0.2		740.4
Shareholder servicing fees	108.8		15.7		0.8		0.1		—		125.4
Other	23.9		—		0.4		—		—		24.3
Total	$	3,292.8	$	638.5	$	159.8	$	122.5	$	149.4	$	4,363.0

Operating revenues are attributed to geographic areas based on the jurisdiction of the subsidiaries that provide the services, which may differ from the regions in which the related investment products are sold and domicile of the fund vehicle or client.

Revenues earned from sponsored funds were 84% of the Company’s total operating revenues for the three and six months ended March 31, 2026 and 83% for the three and six months ended March 31, 2025.

Note 5 – Investments

The disclosures below include details of the Company’s investments, excluding those of consolidated investment products (“CIPs”). See Note 7 – Consolidated Investment Products for information related to the investments held by these entities.

Investments consisted of the following:


(in millions)	March 31, 2026		September 30, 2025
Investments, at fair value
Sponsored funds and separate accounts	$	721.6	$	809.6
Investments related to long-term incentive plans	293.3		288.1
Other equity and debt investments	103.4		81.8
Total investments, at fair value	1,118.3		1,179.5
Investments in equity method investees	1,055.1		893.9
Other investments	396.3		300.6
Total	$	2,569.7	$	2,374.0

The Company has entered into repurchase agreements with a third-party financing company for certain investments held by the Company. As of March 31, 2026 and September 30, 2025, other liabilities includes repurchase agreements of $189.4 million and $200.5 million with investments of $191.8 million and $206.4 million in carrying value pledged as collateral. The repurchase agreements have contractual maturity dates ranging between 2030 to 2039.

Note 6 – Fair Value Measurements

The disclosures below include details of the Company’s fair value measurements, excluding those of CIPs. See Note 7 – Consolidated Investment Products for information related to fair value measurements of the assets and liabilities of these entities.

The assets and liabilities measured at fair value on a recurring basis were as follows:


(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of March 31, 2026
Assets
Investments, at fair value
Sponsored funds and separate accounts	$	456.2	$	224.9	$	3.3	$	37.2	$	721.6
Investments related to long-term incentive plans	270.6		0.4		—		22.3		293.3
Other equity and debt investments	15.3		12.5		1.6		28.9		58.3
Crypto assets	6.2		4.9		—		—		11.1

Total Assets Measured at Fair Value	$	748.3	$	242.7	$	4.9	$	88.4	$	1,084.3

Liabilities
Securities sold short	$	229.1	$	—	$	—	$	—	$	229.1
Contingent consideration liabilities	—		—		29.8		—		29.8
Total Liabilities Measured at Fair Value	$	229.1	$	—	$	29.8	$	—	$	258.9


(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of September 30, 2025
Assets
Investments, at fair value
Sponsored funds and separate accounts	$	463.9	$	305.2	$	2.2	$	38.3	$	809.6
Investments related to long-term incentive plans	253.4		3.3		—		31.4		288.1
Other equity and debt investments	12.4		9.4		1.8		29.2		52.8

Total Assets Measured at Fair Value	$	729.7	$	317.9	$	4.0	$	98.9	$	1,150.5

Liabilities
Securities sold short	$	193.7	$	—	$	—	$	—	$	193.7
Contingent consideration liabilities	—		—		20.4		—		20.4
Total Liabilities Measured at Fair Value	$	193.7	$	—	$	20.4	$	—	$	214.1

As of March 31, 2026 and September 30, 2025, there were $45.1 million and $29.0 million of other investments which were adjusted to fair value on a nonrecurring basis and excluded from the tables above.

Investments for which fair value was estimated using reported NAV as a practical expedient primarily consist of nonredeemable private equity, debt and infrastructure funds, and redeemable alternative credit, global equity and private real estate funds. These investments were as follows:


(in millions)	March 31, 2026		September 30, 2025
Nonredeemable investments1
Investments with known liquidation periods	$	18.0	$	19.7
Investments with unknown liquidation periods	14.5		15.2

Redeemable investments2	55.9		64.0

Unfunded commitments	12.9		13.3

1The investments are expected to be returned through distributions over the life of the funds as a result of liquidations of the funds’ underlying assets. Investments with known liquidation periods have an expected weighted-average life of 2.1 years and 2.2 years at March 31, 2026 and September 30, 2025.

2Investments are redeemable on a semi-monthly, monthly and quarterly basis.

Financial instruments that were not measured at fair value were as follows:


(in millions)	Fair Value Level	March 31, 2026				September 30, 2025
	Carrying Value	Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Assets
Cash and cash equivalents	1	$	2,571.5	$	2,571.5	$	3,088.1	$	3,088.1
Other investments
Time deposits	2	8.3		8.3		9.2		9.2
Equity securities	3	388.0		388.0		291.4		291.4

Financial Liability
Debt	2	$	2,253.3	$	1,851.2	$	2,362.0	$	1,970.9

Note 7 – Consolidated Investment Products

CIPs consist of mutual and other investment funds, limited partnerships and similar structures and collateralized loan obligations (“CLOs”), all of which are sponsored by the Company, and include both voting interest entities and variable interest entities (“VIEs”).

The balances related to CIPs included in the Company’s consolidated balance sheets were as follows:


(in millions)	March 31, 2026		September 30, 2025
Assets
Cash and cash equivalents	$	997.5	$	485.8
Receivables	108.5		313.1
Investments, at fair value	13,810.2		12,278.8
Total Assets	$	14,916.2	$	13,077.7

Liabilities
Accounts payable and accrued expenses	$	700.4	$	1,063.0
Debt	12,153.1		9,937.3
Other liabilities	16.8		17.5
Total liabilities	12,870.3		11,017.8
Redeemable Noncontrolling Interests	397.0		289.6
Stockholders’ Equity
Franklin Resources, Inc.’s interests	1,054.2		1,220.6
Nonredeemable noncontrolling interests	594.7		549.7
Total stockholders’ equity	1,648.9		1,770.3
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity	$	14,916.2	$	13,077.7

The consolidation of CIPs did not have a significant impact on net income attributable to the Company during the three and six months ended March 31, 2026 and 2025.

The Company has no right to the CIPs’ assets, other than its direct equity investments in them and investment management and other fees earned from them. The debt holders of the CIPs have no recourse to the Company’s assets beyond the level of its direct investment; therefore the Company bears no other risks associated with the CIPs’ liabilities.

Fair Value Measurements

Assets of CIPs measured at fair value on a recurring basis were as follows:


(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of March 31, 2026
Assets
Cash and cash equivalents of CLOs	$	929.2	$	—	$	—	$	—	$	929.2
Receivables of CLOs	—		82.2		—		—		82.2
Investments
Equity and debt securities	517.0		699.4		673.3		106.1		1,995.8
Loans	—		11,793.8		20.6		—		11,814.4

Total Assets Measured at Fair Value	$	1,446.2	$	12,575.4	$	693.9	$	106.1	$	14,821.6


(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of September 30, 2025
Assets
Cash and cash equivalents of CLOs	$	472.1	$	—	$	—	$	—	$	472.1
Receivables of CLOs	—		113.0		—		—		113.0
Investments
Equity and debt securities	393.2		731.5		601.0		189.1		1,914.8
Loans	—		10,354.1		9.9		—		10,364.0

Total Assets Measured at Fair Value	$	865.3	$	11,198.6	$	610.9	$	189.1	$	12,863.9

Investments for which fair value was estimated using reported NAV as a practical expedient consist of a redeemable global hedge fund and nonredeemable private debt and equity funds. These investments were as follows:


(in millions)	March 31, 2026		September 30, 2025
Redeemable investments1	$	82.4	$	74.4

Nonredeemable investments2

Investments with unknown liquidation periods	23.7		114.7

Unfunded commitments3	15.7		14.0

1Investments are redeemable on a monthly basis and liquidation periods are unknown.

2The investments are expected to be returned through distributions over the life of the funds as a result of liquidations of the funds’ underlying assets.

3Of the total unfunded commitments, the Company was contractually obligated to fund $6.7 million and $5.3 million based on its ownership percentage in the CIPs at March 31, 2026 and September 30, 2025.

Changes in Level 3 assets of equity and debt securities were as follows:


		Three Months Ended March 31,						Six Months Ended March 31,
(in millions)	2026			2025			2026			2025
Balance at beginning of period		$	595.1		$	573.5		$	601.0		$	550.1


Gains included in investment and other income (losses) of consolidated investment products, net		66.9			2.3			95.7			24.3
Purchases		27.2			10.9			44.6			20.1
Sales		(15.9)			(2.7)			(19.1)			(14.3)
Net (deconsolidations) consolidations		—			—			(32.1)			3.8
Transfers into Level 3		—			0.2			—			0.2
Transfers out of Level 3		—			(39.2)			(16.8)			(39.2)
Balance at End of Period		$	673.3		$	545.0		$	673.3		$	545.0
Change in unrealized gains (losses) included in net income relating to assets held at end of period		$	66.5		$	(17.1)		$	78.0		$	2.8

Valuation techniques and significant unobservable inputs used in Level 3 fair value measurements were as follows:


(in millions)
as of March 31, 2026		Fair Value			Valuation Technique		Significant Unobservable Inputs		Range (Weighted Average1)
Equity and debt securities		$	408.6		Market pricing		Private sale pricing		$0.01–$4,210.00 ($567.37) per share
							Discount for lack of marketability		25.0%–75.0% (34.8%)
		184.3			Market comparable companies		Enterprise value/ Revenue multiple		1.6–21.7 (7.5)
						Discount for lack of marketability		5.3%–9.6% (8.3%)
	54.2			Discounted cash flow		Discount rate		6.6%–14.3% (7.1%)
	26.2			Option pricing model		Volatility		16.8%–41.3% (30.9%)
						Discount for lack of marketability		4.7%–10.4% (7.9%)


(in millions)
as of September 30, 2025		Fair Value			Valuation Technique		Significant Unobservable Inputs	Range (Weighted Average1)
Equity and debt securities		$	302.0		Market pricing		Private sale pricing	$0.27–$2,120.00 ($176.53) per share
				Discount for lack of marketability		5.0%–75.0% (23.9%)
	225.9	Market comparable companies		Enterprise value/ Revenue multiple		1.4–21.0 (9.5)
				Discount for lack of marketability		6.0%–11.0% (8.5%)
	54.4	Discounted cash flow		Discount rate		6.5%–13.0% (6.8%)
	18.7	Option pricing model		Volatility		34.0%–60.9% (38.2%)
				Discount for lack of marketability		9.1%–13.5% (9.4%)

1Based on the relative fair value of the instruments.

If the relevant significant inputs used in the market-based valuations, other than discount for lack of marketability, were independently higher (lower), the resulting fair value of the assets would be higher (lower). If the relevant significant inputs used in the discounted cash flow, as well as the discount for lack of marketability used in the market-based valuations, were independently higher (lower), the resulting fair value of the assets would be lower (higher).

Financial instruments of CIPs that were not measured at fair value were as follows:


(in millions)	Fair Value Level	March 31, 2026				September 30, 2025
	Carrying Value	Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Asset
Cash and cash equivalents	1	$	68.3	$	68.3	$	13.7	$	13.7

Financial Liabilities
Debt of CLOs1	2 or 3	$	12,153.1	$	12,011.0	$	9,937.3	$	9,786.0

1Substantially all was Level 2.

Debt

Debt of CLOs totaled $12,153.1 million and $9,937.3 million at March 31, 2026 and September 30, 2025. The debt had fixed and floating interest rates based on Secured Overnight Financing Rate (“SOFR”) ranging from 2.39% to 11.90% with a weighted-average effective interest rate of 5.58% at March 31, 2026, and from 2.39% to 12.26% based on SOFR and Euro Interbank Offered Rate with a weighted-average effective interest rate of 6.00% at September 30, 2025.

The contractual maturities for the debt of CLOs at March 31, 2026 were as follows:


(in millions)
for the fiscal years ending September 30,	Amount
2026 (remainder of year)		$	291.4
2027		—
2028		—
2029		—
2030		—
Thereafter		11,861.7
Total		$	12,153.1

Collateralized Loan Obligations

The unpaid principal balance and fair value of the investments of CLOs were as follows:


(in millions)	March 31, 2026		September 30, 2025
Unpaid principal balance	$	12,213.6	$	10,641.0
Difference between unpaid principal balance and fair value	(99.1)		(43.3)
Fair Value	$	12,114.5	$	10,597.7

Investments 90 days or more past due were immaterial at March 31, 2026 and September 30, 2025.

The Company recognized $3.7 million and $14.9 million of net gains during the three and six months ended March 31, 2026 and $15.6 million and $27.3 million of net gains during the three and six months ended March 31, 2025, related to its own economic interests in the CLOs. The aggregate principal related to the debt of CLOs was $12,258.5 million and $9,958.6 million at March 31, 2026 and September 30, 2025.

Note 8 – Redeemable Noncontrolling Interests

Changes in redeemable noncontrolling interests were as follows:


(in millions)		2026									2025
	CIPs			Minority Interests			Total			CIPs			Minority Interests			Total
for the three months ended March 31,
Balance at beginning of period		$	311.8		$	980.1		$	1,291.9		$	1,466.5		$	639.5		$	2,106.0
Net income (loss)		12.2			11.7			23.9			(167.4)			9.0			(158.4)
Net subscriptions (distributions) and other		331.3			20.2			351.5			(50.5)			5.3			(45.2)
Net deconsolidations		(258.3)			—			(258.3)			(52.5)			—			(52.5)

Adjustment to fair value		—			69.9			69.9			—			167.0			167.0
Balance at End of Period		$	397.0		$	1,081.9		$	1,478.9		$	1,196.1		$	820.8		$	2,016.9


(in millions)		2026									2025
	CIPs			Minority Interests			Total			CIPs			Minority Interests			Total
for the six months ended March 31,
Balance at beginning of period		$	289.6		$	892.4		$	1,182.0		$	687.8		$	634.0		$	1,321.8
Net income (loss)		38.3			25.3			63.6			(128.5)			19.7			(108.8)
Net subscriptions (distributions) and other		491.9			(17.6)			474.3			125.1			1.6			126.7
Net consolidations (deconsolidations)		(422.8)			—			(422.8)			511.7			—			511.7
Acquisition		—			32.8			32.8			—			—			—
Adjustment to fair value		—			149.0			149.0			—			165.5			165.5
Balance at End of Period		$	397.0		$	1,081.9		$	1,478.9		$	1,196.1		$	820.8		$	2,016.9

Note 9 – Nonconsolidated Variable Interest Entities

VIEs for which the Company is not the primary beneficiary consist of sponsored funds and other investment products in which the Company has an equity ownership interest. The Company’s maximum exposure to loss from these VIEs consists of equity investments, investment management and other fee receivables as follows:


(in millions)	March 31, 2026		September 30, 2025
Investments	$	1,435.8	$	1,274.5
Receivables	239.2		225.1
Total	$	1,675.0	$	1,499.6

While the Company has no legal or contractual obligation to do so, it routinely makes cash investments in the course of launching sponsored funds. As it has done in the past, the Company also may voluntarily elect to provide its sponsored funds with additional direct or indirect financial support based on its business objectives. The Company did not provide additional financial or other support to its sponsored funds assessed as VIEs during the six months ended March 31, 2026 or fiscal year 2025.

Note 10 – Commitments and Contingencies

Legal Proceedings

India Credit Fund Closure Matters. During the six months ended March 31, 2026, there were no significant changes from the disclosure in the Form 10‑K for the fiscal year ended September 30, 2025.

Western Asset Management Investigations and Litigation. As previously disclosed, the Company launched an internal investigation into certain trade allocations of treasury derivatives in select Western Asset Management (“WAM”) managed accounts. WAM received notification of parallel investigations by the SEC and the U.S. Department of Justice (“DOJ”). WAM also received notice of an investigation into these trading activities by the CFTC. The Company and WAM have fully cooperated with these investigations. As previously disclosed, the CFTC informed WAM that it closed its investigation. The Company has also previously disclosed that it was informed by the DOJ that it is prepared to resolve its investigation through a disposition that does not require the filing of any criminal charges against WAM. The DOJ further informed the Company that as it continues the ongoing resolution discussions, which, as the DOJ noted, has required additional time to complete due to circumstances not attributable to WAM, it appreciates WAM’s commitment to full cooperation with the investigation. The Company continues to cooperate with the SEC investigation, which remains ongoing.

Ken Leech, the former co-Chief Investment Officer of WAM, received a “Wells Notice” from the staff of the SEC in August 2024, and was placed on administrative leave at that time. Mr. Leech retired and is no longer with the Company, as previously disclosed. On November 25, 2024, the SEC filed a complaint in the United States District Court for the Southern District of New York against Mr. Leech alleging violations of certain laws related to trade allocations. Concurrently, the DOJ filed an indictment with the United States District Court for the Southern District of New York against Mr. Leech for similar allegations and for false statements made to the SEC. The trial is scheduled to begin on June 15, 2026.

On July 3, 2025, Franklin, WAM and Ken Leech were named as defendants in a lawsuit filed by the Western PA Electrical Employees Insurance Trust Fund in the U.S. District Court for the Western District of Pennsylvania seeking class certification on behalf of shareholders of two funds managed by WAM for the period January 1, 2021 through October 31, 2023. On December 19, 2025, Abilene Firemen’s Relief and Retirement Fund was named the lead plaintiff in the action and effective January 9, 2026, the case was transferred to the U.S. District Court for the Central District of California. The plaintiffs filed an amended complaint on March 16, 2026, which, among other things, expanded the alleged class period through November 25, 2024, and named as additional defendants certain Franklin and WAM executives. The plaintiffs are pursuing claims under the Securities Exchange Act of 1934 against all defendants in connection with trade allocations made by Mr. Leech in that period that are also the subject of the investigations reported above. The plaintiffs are seeking, among other things, damages, interest, and costs and expenses, including attorneys’ fees.

Franklin Templeton 401(k) Retirement Plan Litigation. On July 22, 2025, Franklin and the Franklin Templeton 401(k) Retirement Plan Committee were named as defendants in a lawsuit filed by certain former employees in the U.S. District Court for the Northern District of California. On November 10, 2025, the plaintiffs filed an amended complaint adding as defendants the Franklin Templeton 401(k) Retirement Plan Investment Committee and Gallagher Fiduciary Advisors, LLC. The plaintiffs seek to represent a class of participants and beneficiaries of the Franklin Templeton 401(k) Retirement Plan (the “Plan”) who were invested in funds managed by the Company at any time on or after July 22, 2019. The plaintiffs are pursuing claims under the Employee Retirement Income Security Act of 1974 for alleged breaches of fiduciary duties and failure to monitor the Plan fiduciaries in connection with the Plan’s inclusion of certain proprietary funds as investment options. The plaintiffs are seeking, among other things, damages, disgorgement, removal of certain investments from the Plan, removal and replacement of the Plan’s fiduciaries, attorneys’ fees and costs, and pre-judgment interest. On April 17, 2026, the court denied the Franklin defendants’ motion to dismiss.

The lawsuits reported above against the Company are in their early stages. Management believes the claims made in the lawsuits are without merit and the Company intends to defend against them vigorously. The Company cannot predict the outcome of these lawsuits or estimate any reasonably possible loss or range of loss that may arise from any negative outcome.

Other Litigation and Regulatory Matters. The Company is from time to time involved in other litigation relating to claims arising in the normal course of business. Management is of the opinion that the ultimate resolution of such claims will not materially affect the Company’s business, financial position, results of operations or liquidity. In management’s opinion, an adequate accrual has been made as of March 31, 2026 to provide for any probable losses that may arise from such matters for which the Company could reasonably estimate an amount.

Indemnifications and Guarantees

In the ordinary course of business or in connection with certain acquisition agreements, the Company enters into contracts that provide for indemnifications by the Company in certain circumstances. In addition, certain Company entities guarantee certain financial and performance-related obligations of various Franklin subsidiaries. The Company is also subject to certain legal requirements and agreements providing for indemnifications of directors, officers and personnel against liabilities and expenses they may incur under certain circumstances in connection with their service. The terms of these indemnities and guarantees vary pursuant to applicable facts and circumstances, and from agreement to agreement. Future payments for claims against the Company under these indemnities or guarantees could negatively impact the Company’s financial condition. In management’s opinion, an adequate accrual has been made as of March 31, 2026 to provide for any probable losses pursuant to such indemnification agreements and/or guarantees.

Other Commitments and Contingencies

At March 31, 2026, there were no other material changes in the other commitments and contingencies as reported in the Company’s Annual Report on Form 10-K for fiscal year 2025.

Note 11 – Stock-Based Compensation

Stock and stock unit award activity was as follows:


(shares in thousands)	Time-Based Shares	Performance- Based Shares	Total Shares	Weighted- Average Grant-Date Fair Value
for the six months ended March 31, 2026
Nonvested balance at October 1, 2025	14,959	353	15,312	$	22.81
Granted	8,658	176	8,834	22.65
Vested	(1,973)	(180)	(2,153)	26.69
Forfeited/canceled	(273)	—	(273)	18.28
Nonvested Balance at March 31, 2026	21,371	349	21,720	$	22.42

Total unrecognized compensation expense related to nonvested stock and stock unit awards was $248.6 million at March 31, 2026. This expense is expected to be recognized over a remaining weighted-average vesting period of 1.9 years.

Note 12 – Investment and Other Income, Net

Investment and other income, net consisted of the following:


	Three Months Ended March 31,				Six Months Ended March 31,
(in millions)	2026		2025		2026		2025
Dividend and interest income	$	38.7	$	19.4	$	93.3	$	62.5
Gains (losses) on investments, net	(20.7)		46.8		(29.3)		(10.3)
Income from investments in equity method investees	24.3		23.1		35.8		15.5
Losses on crypto assets, net	(12.4)		—		(18.8)		—
Rental income	11.6		10.9		22.9		22.1
Foreign currency exchange gains (losses), net	1.5		(7.5)		(2.5)		7.0
Other, net	13.0		1.4		34.9		7.8
Investment and other income, net	$	56.0	$	94.1	$	136.3	$	104.6

Net gains (losses) recognized on equity securities measured at fair value and trading debt securities that were held by the Company were $(43.4) million and $(55.4) million for the three and six months ended March 31, 2026 and $82.7 million and $(1.0) million for the three and six months ended March 31, 2025.

Note 13 – Segment and Geographic Information

The Company has one operating segment, which provides investment management and related services.

The chief operating decision maker (“CODM”), identified as the Company’s Chief Executive Officer, assesses the performance of the business and allocates resources primarily based on consolidated net income attributable to Franklin Resources, Inc. This measure is used to support decision making activities and assess the performance of the operating segment.

The CODM regularly reviews the significant segment expenses categories that are presented on the Company’s consolidated statements of income. Total assets on the consolidated balance sheets is the measure of segment assets.

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