Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes thereto, which appear elsewhere in this Report. Except for the historical financial information, this Report may include statements that constitute “forward-looking statements” under the United States (U.S.) securities laws. Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow, capital expenditures, and AUM that could differ materially from actual results due to known and unknown risks and other important factors, including, but not limited to, industry or market conditions, geopolitical events including wars, global trade tensions, tariffs, natural disasters, and pandemics or health crises and their respective potential impact on the company, acquisitions and divestitures, debt and our ability to obtain additional financing or make payments, regulatory developments, demand for and pricing of our products, the prospects for certain legal contingencies, and other aspects of our business or general economic conditions. In addition, when used in this Report or such other documents or statements, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. None of this information should be considered in isolation from, or as a substitute for, historical financial statements.

Forward-looking statements are not guarantees, and involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge them to carefully consider the risks described in this Report and our most recent Form 10-K and Forms 10-Q filed with the SEC.

You may obtain these reports from the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate.

References

In this Report, unless otherwise specified, the terms “we,” “our,” “us,” “company,” “firm,” and “Invesco” refer to Invesco Ltd., a company incorporated in Bermuda, and its consolidated entities.

Executive Overview

The following executive overview summarizes the significant trends affecting our results of operations and financial condition for the periods presented. This overview and the remainder of this management’s discussion and analysis and supplements should be read in conjunction with the Condensed Consolidated Financial Statements of Invesco Ltd. and the notes thereto contained elsewhere in this Report. The company’s financial results are impacted by the fluctuations in exchange rates against the U.S. Dollar, as discussed in the “Results of Operations” section as applicable.

The company is an independent investment management firm dedicated to delivering a superior investment experience. Our comprehensive range of active, passive and alternative investment capabilities has been constructed over many years to help clients achieve their investment objectives. We draw on this comprehensive range of capabilities to provide solutions designed to deliver key outcomes aligned to client needs. One of Invesco's core strengths, and a key differentiator for the company within the industry, is our diversification across investment capabilities, distribution channels and geographies. This broad diversification helps to mitigate some of the impact of different market cycles on Invesco and enables the company to take advantage of growth opportunities in various markets and channels.

The table below summarizes returns based on price appreciation/(depreciation) of several major market indices for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30,Six months ended June 30,
Equity Indices - Domestic2025202420252024
S&P 50010.6%3.9%5.5%14.5%
S&P 500 Equal-Weight5.0%(3.1)%3.8%4.1%
S&P 500 Growth11.3%2.9%16.8%(3.6)%
S&P 500 Value2.5%(2.7)%2.2%4.6%
NASDAQ 10017.6%7.8%7.9%17.0%
Equity Indices - Global
FTSE 100 (local currency)2.1%2.7%7.2%5.6%
MSCI AC Asia Pacific11.7%2.1%12.0%6.6%
MSCI China (local currency)1.7%5.6%16.7%3.4%
MSCI Emerging Markets11.0%4.1%13.7%6.1%
MSCI Europe (local currency)1.1%(0.1)%6.5%6.9%
MSCI Japan (local currency)7.4%1.6%1.6%20.1%
Fixed Income Indices
Bloomberg US Aggregate Bond1.2%0.1%4.0%(0.7)%
Bloomberg Global Aggregated Bond (local currency)1.5%(0.2)%2.6%(0.5)%
Bloomberg China Aggregated Bond2.8%1.3%2.8%1.5%

Market volatility at the beginning of the second quarter of 2025 was pronounced; however, after a challenging start, markets ended the second quarter with strong momentum. Against this backdrop, our diversified platform, global scale, and breadth of products were integral to sustaining long-term organic inflows in the second quarter of 2025 and reaching a record $2 trillion in AUM.

We remain prudent and diligent in our approach to capital management. Our priorities are balanced with a focus on supporting future growth and maintaining the strength of our balance sheet, while returning excess cash to shareholders. In addition to paying a $0.21 dividend per common share during the second quarter of 2025, the company repurchased 1.7 million common shares for $25 million in the open market. Additionally, on May 16, 2025, we repurchased $1.0 billion of Invesco’s outstanding Series A preferred shares which was funded through $1.0 billion of floating rate 3-year and 5-year bank term loans. A premium of 15% was paid to MassMutual on the repurchase of the preferred shares which were otherwise noncallable until May 2040. We also amended and restated the $2.0 billion floating rate Revolving credit agreement, increasing the borrowing capacity to $2.5 billion and extending the expiration date from April 26, 2028 to May 16, 2030.

In line with our strategic priority to expand our private markets business, we recently announced a proposal, subject to the approval of fund shareholders, to add Barings (MassMutual's global asset management subsidiary) as a sub-advisor to an existing private credit fund we manage and MassMutual’s intention to invest $150 million into the fund. This represents the first tranche of our broader strategic product and distribution partnership with Barings which MassMutual intends to support with an initial investment totaling $650 million.

During the second quarter, we also announced a re-alignment within our fundamental equities capability and made changes to our Developing Markets and Global/International investment teams to better serve our clients’ interests. This reorganization is part of our ongoing efforts to strengthen our investment returns, elevate our top talent, and use our scale advantages to gain efficiencies.

Presentation of Management’s Discussion and Analysis of Financial Condition and Results of Operations - Impact of Consolidated Investment Products

The company provides investment management services to, and has transactions with, investment products sponsored by the company in the normal course of business. The company's investment adviser subsidiaries serve as investment managers to these products, making day-to-day investment decisions concerning the assets of the products. Investment products that are consolidated are referred to in this Report as CIP. The company’s economic risk with respect to each investment in CIP is limited to its equity ownership, unfunded equity commitments and any uncollected management and performance fees. See also Note 11, "Consolidated Investment Products," for additional information regarding the impact of the consolidation of managed funds.

The majority of the company’s CIP balances are related to collateralized loan obligations (CLOs). The collateral assets of the CLOs are held solely to satisfy the obligations of the CLOs. The company has no right to the benefits from, nor does it bear the risks associated with, the collateral assets held by the CLOs beyond the company’s direct investments in, and management and performance fees generated from, the CLOs. If the company were to liquidate, the collateral assets would not be available to the general creditors of the company, and as a result, the company does not consider these assets to be company assets. Likewise, the investors in the CLOs have no recourse to the general credit of the company for the notes issued by the CLOs. The company therefore does not consider this debt to be a company liability.

Due to the significant impact that CIP has on the presentation of the company’s Consolidated Financial Statements, the company has elected to deconsolidate these products in its non-GAAP disclosures (among other adjustments). See "Schedule of Non-GAAP Information" for additional information regarding these adjustments. The following discussion therefore combines the results presented under U.S. GAAP with the company’s non-GAAP presentation.

Summary Operating Information

Wherever a non-GAAP measure is referenced, a disclosure will follow in the narrative or in the note referring the reader to the Schedule of Non-GAAP Information, where additional details regarding the use of the non-GAAP measure by the company are disclosed, along with reconciliations of the most directly comparable U.S. GAAP measures to the non-GAAP measures. To enhance the readability of the Results of Operations section, separate tables for each of the revenue, expense and other income and expense sections of the income statement introduce the narrative that follows, providing a section-by-section review of the company’s income statements for the periods presented.

Summary operating information for three and six months ended June 30, 2025 and 2024 is presented in the table below:

(in millions, other than per common share amounts, operating margins and AUM)Three months ended June 30,Six months ended June 30,
U.S. GAAP Financial Measures Summary2025202420252024
Operating revenues$1,515.5$1,483.3$3,044.7$2,958.6
Operating income$214.2$206.8$491.5$419.9
Operating margin14.1%13.9%16.1%14.2%
Net income/(loss) attributable to Invesco Ltd.$(12.5)$132.2$158.6$273.7
Diluted EPS$(0.03)$0.29$0.35$0.60
Non-GAAP Financial Measures Summary**(1)**
Net revenues$1,104.6$1,085.8$2,213.3$2,139.0
Adjusted operating income$344.4$335.3$693.9$631.8
Adjusted operating margin31.2%30.9%31.4%29.5%
Adjusted net income attributable to Invesco Ltd.$165.2$196.2$365.7$344.6
Adjusted diluted EPS$0.36$0.43$0.80$0.75
Assets Under Management
Ending AUM (billions)$2,001.4$1,715.8$2,001.4$1,715.8
Average AUM (billions)$1,897.4$1,669.3$1,889.1$1,641.2

(1)Net revenues, Adjusted operating income (and by calculation, Adjusted operating margin), and Adjusted net income attributable to Invesco Ltd. (and by calculation, Adjusted diluted EPS) are non-GAAP financial measures, based on methodologies other than U.S. GAAP. See “Schedule of Non-GAAP Information” for a reconciliation of the most directly comparable U.S. GAAP measures to the non-GAAP measures.

Investment Capabilities Performance Overview

Invesco's first strategic objective is a commitment to deliver the excellence our clients expect, which includes strong investment performance over the long-term for our clients. The table below presents investment performance of our actively managed investment products measured by the percentage of our AUM in the first and second quartile compared to our peers and above benchmark for the investment capabilities for which peer and benchmark data are available.(1)

1****st Quartile2****nd QuartileAbove Benchmark
1yr3yr5yr1yr3yr5yr1yr3yr5yr
Overall46%50%46%21%21%24%63%67%68%
Fundamental Equities30%33%35%39%30%18%53%45%40%
Fundamental Fixed Income41%43%23%6%32%61%43%63%64%
Multi-Asset42%54%43%15%16%12%61%67%84%

(1) Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts (UITs), fund of funds with component funds managed by Invesco, stable value building block funds and collateralized debt obligations. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision.

AUM measured in the one, three and five year quartile rankings represents 37%, 37% and 37% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three and five year basis represents 47%, 46%, and 45% of total Invesco AUM as of 6/30/2025. Peer group rankings are sourced from a widely-used third-party ranking agency in each fund’s market (Morningstar, IA, Lipper, eVestment, Mercer, Galaxy, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties. Rankings are calculated against all funds in each peer group. Rankings for the primary share class of the most representative fund in each composite are applied to all products within each composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

Assets Under Management

The following presentation and discussion of AUM includes Passive and Active AUM. Passive AUM includes index-based exchange-traded funds (ETFs), UITs, non-management fee earning AUM and other passive mandates. Active AUM is total AUM less Passive AUM.

Non-management fee earning AUM includes non-management fee earning ETFs, UITs and product leverage. The net flows in non-management fee earning AUM can be relatively short-term in nature and, due to the relatively low revenue yield, these net flows can have a significant impact on overall net revenue yield.

The AUM tables and the discussion below refer to certain AUM as long-term. Long-term inflows and the underlying reasons for the movements in this line item include investments from new clients, existing clients adding new accounts/funds or contributions/subscriptions into existing accounts/funds. Long-term outflows reflect client redemptions from accounts/funds and include the return of invested capital upon maturity. We present net flows into money market funds separately because shareholders of those funds typically use them as short-term funding vehicles and the flows are particularly sensitive to short-term interest rate movements.

Changes in Active and Passive AUM were as follows:

Three months ended June 30,
20252024
(in billions)Total AUMActivePassiveTotal AUMActivePassive
Beginning Assets (April 1)$1,844.8$1,041.3$803.5$1,662.7$995.7$667.0
Long-term inflows118.759.659.197.849.748.1
Long-term outflows(103.1)(55.8)(47.3)(81.1)(47.4)(33.7)
Net long-term flows15.63.811.816.72.314.4
Net flows in non-management fee earning AUM2.8—2.86.6—6.6
Net flows in money market funds(3.2)(3.2)—4.94.9—
Total net flows15.20.614.628.27.221.0
Reinvested distributions1.01.0—1.41.4—
Market gains and losses126.433.493.027.42.924.5
Foreign currency translation14.011.22.8(3.9)(3.9)—
Ending Assets (June 30)$2,001.4$1,087.5$913.9$1,715.8$1,003.3$712.5
Average AUM
Average long-term AUM$1,343.8$829.1$514.7$1,200.5$798.9$401.6
Average AUM$1,897.4$1,053.9$843.5$1,669.3$994.6$674.7
Average QQQ AUM$319.2N/A$319.2$263.8N/A$263.8
Six Months Ended June 30,
20252024
(in billions)Total AUMActivePassiveTotal AUMActivePassive
Beginning Assets (January 1)$1,846.0$1,026.5$819.5$1,585.3$985.3$600.0
Long-term inflows240.7120.2120.5178.192.186.0
Long-term outflows(207.5)(114.9)(92.6)(155.1)(96.9)(58.2)
Net long-term flows33.25.327.923.0(4.8)27.8
Net flows in non-management fee earning AUM7.8—7.816.1—16.1
Net flows in money market funds6.86.8—5.65.6—
Total net flows47.812.135.744.70.843.9
Reinvested distributions2.02.0—2.52.5—
Market gains and losses84.229.354.995.425.470.0
Foreign currency translation21.417.63.8(12.1)(10.7)(1.4)
Ending Assets (June 30)$2,001.4$1,087.5$913.9$1,715.8$1,003.3$712.5
Average AUM
Average long-term AUM$1,335.3$823.9$511.4$1,182.3$793.3$389.0
Average AUM$1,889.1$1,048.5$840.6$1,641.2$987.8$653.4
Average QQQ AUM$319.6N/A$319.6$255.0N/A$255.0
Three months ended June 30,Six Months Ended June 30,
2025202420252024
Revenue yield (bps) (1)
U.S. GAAP Gross revenue yield33.737.534.038.0
Net revenue yield ex performance fees ex QQQ (2)27.930.428.130.5
Active net revenue yield ex performance fees34.936.735.036.8
Passive net revenue yield ex QQQ (2)13.815.014.015.2

(1) U.S. GAAP Gross revenue yield on AUM is equal to U.S. GAAP annualized total operating revenues divided by average AUM, excluding Invesco Great Wall Fund Management Company Limited (Invesco Great Wall or IGW) AUM. The average AUM for IGW in the three and six months ended June 30, 2025 was $99.7 billion and 98.1 billion (three and six months ended June 30, 2024: $87.4 billion and 85.6 billion). It is appropriate to exclude the average AUM of IGW as the revenues resulting from these AUM are not presented in our Operating revenues. The U.S. GAAP Gross revenue yield is not a good measure because the numerator excludes the management fees earned from CIP; however, the denominator of the measure includes the AUM of these investment products. Net revenue yield metrics include the Net revenues and Average AUM of IGW and CIP. See “Schedule of Non-GAAP Information” for a reconciliation of Operating revenues to Net revenues.

(2) Performance fees are earned when certain performance metrics are achieved; Invesco QQQ Trust does not earn net revenues. Therefore, net revenue yield is calculated excluding performance fees and Invesco QQQ Trust AUM. Passive net revenue yield is calculated excluding Invesco QQQ Trust AUM.

Flows

There are numerous drivers of AUM inflows and outflows, including individual investor decisions to change investments, fiduciaries and other gatekeepers making broad asset allocation decisions on behalf of their clients, and reallocation of investments within portfolios. We are not a party to these asset allocation decisions, as the company does not generally have access to the underlying investor’s decision-making process, including their risk appetite or liquidity needs. Therefore, the company is not in a position to provide meaningful information regarding the drivers of inflows and outflows.

Market Returns

Market gains and losses include the net change in AUM resulting from changes in market values of the underlying securities from period to period. The table in the “Executive Overview” section of this Management’s Discussion and Analysis summarizes returns based on price appreciation/(depreciation) of several major market indices for the three and six months ended June 30, 2025 and 2024.

Foreign Exchange Rates

During the three and six months ended June 30, 2025, we experienced an increase in AUM of $14.0 billion and $21.4 billion, due to changes in foreign exchange rates (three and six months ended June 30, 2024, AUM decreased by $3.9 billion and 12.1 billion).

Total AUM by Channel (1)

Three months ended June 30,
20252024
(in billions)TotalRetailInstitutionalTotalRetailInstitutional
Beginning Assets (April 1)$1,844.8$1,237.2$607.6$1,662.7$1,116.9$545.8
Long-term inflows118.785.233.597.873.724.1
Long-term outflows(103.1)(76.1)(27.0)(81.1)(61.6)(19.5)
Net long-term flows15.69.16.516.712.14.6
Net flows in non-management fee earning AUM2.83.2(0.4)6.66.7(0.1)
Net flows in money market funds(3.2)(0.9)(2.3)4.9(0.6)5.5
Total net flows15.211.43.828.218.210.0
Reinvested distributions1.00.90.11.41.4—
Market gains and losses126.4115.411.027.426.31.1
Foreign currency translation14.05.88.2(3.9)(1.3)(2.6)
Ending Assets (June 30)$2,001.4$1,370.7$630.7$1,715.8$1,161.5$554.3
Six Months Ended June 30,
20252024
(in billions)TotalRetailInstitutionalTotalRetailInstitutional
Beginning Assets (January 1)$1,846.0$1,265.6$580.4$1,585.3$1,042.0$543.3
Long-term inflows240.7171.669.1178.1133.744.4
Long-term outflows(207.5)(150.6)(56.9)(155.1)(115.0)(40.1)
Net long-term flows33.221.012.223.018.74.3
Net flows in non-management fee earning AUM7.88.6(0.8)16.115.70.4
Net flows in money market funds6.82.93.95.60.65.0
Total net flows47.832.515.344.735.09.7
Reinvested distributions2.01.90.12.52.5—
Market gains and losses84.271.812.495.486.09.4
Transfer—(9.5)9.5———
Foreign currency translation21.48.413.0(12.1)(4.0)(8.1)
Ending Assets (June 30)$2,001.4$1,370.7$630.7$1,715.8$1,161.5$554.3

See accompanying notes immediately following these AUM tables.

Total AUM by Client Domicile (2)

Three months ended June 30,
20252024
(in billions)TotalAmericasAPACEMEATotalAmericasAPACEMEA
Beginning Assets (April 1)$1,844.8$1,293.6$275.5$275.7$1,662.7$1,199.8$237.6$225.3
Long-term inflows118.760.035.922.897.850.428.119.3
Long-term outflows(103.1)(60.8)(26.1)(16.2)(81.1)(47.8)(17.9)(15.4)
Net long-term flows15.6(0.8)9.86.616.72.610.23.9
Net flows in non-management fee earning AUM2.82.70.7(0.6)6.65.90.20.5
Net flows in money market funds(3.2)(3.2)0.8(0.8)4.96.6(1.6)(0.1)
Total net flows15.2(1.3)11.35.228.215.18.84.3
Reinvested distributions1.00.8—0.21.41.3—0.1
Market gains and losses126.4101.95.119.427.419.82.45.2
Foreign currency translation14.01.55.27.3(3.9)(0.2)(3.4)(0.3)
Ending Assets (June 30)$2,001.4$1,396.5$297.1$307.8$1,715.8$1,235.8$245.4$234.6
Six Months Ended June 30,
20252024
(in billions)TotalAmericasAPACEMEATotalAmericasAPACEMEA
Beginning Assets (January 1)$1,846.0$1,315.5$270.2$260.3$1,585.3$1,133.9$235.5$215.9
Long-term inflows240.7119.069.752.0178.189.851.137.2
Long-term outflows(207.5)(116.8)(60.3)(30.4)(155.1)(85.2)(37.6)(32.3)
Net long-term flows33.22.29.421.623.04.613.54.9
Net flows in non-management fee earning AUM7.811.61.7(5.5)16.116.0(0.8)0.9
Net flows in money market funds6.85.22.4(0.8)5.66.3(0.5)(0.2)
Total net flows47.819.013.515.344.726.912.25.6
Reinvested distributions2.01.8—0.22.52.4—0.1
Market gains and losses84.258.54.221.595.473.47.614.4
Foreign currency translation21.41.79.210.5(12.1)(0.8)(9.9)(1.4)
Ending Assets (June 30)$2,001.4$1,396.5$297.1$307.8$1,715.8$1,235.8$245.4$234.6

See accompanying notes immediately following these AUM tables.

Total AUM by Investment Capability (3)

Three Months Ended June 30, 2025
(in billions)TotalETFs and Index (4)Fundamental Fixed Income (5)Fundamental Equities (6)Private Markets (7)China JV & India (8)Multi-Asset/ Other (9)Global Liquidity (10)QQQ (11)
Beginning Assets (April 1)$1,844.8$491.0$291.9$262.8$131.3$111.0$59.4$200.2$297.2
Long-term inflows118.747.723.911.77.524.63.3——
Long-term outflows(103.1)(35.1)(21.1)(15.3)(9.8)(19.0)(2.8)——
Net long-term flows15.612.62.8(3.6)(2.3)5.60.5——
Net flows in non-management fee earning AUM2.8—————(0.3)—3.1
Net flows in money market funds(3.2)————0.7—(3.9)—
Total net flows15.212.62.8(3.6)(2.3)6.30.2(3.9)3.1
Reinvested distributions1.0—0.50.20.2—0.1——
Market gains and losses126.440.62.926.00.21.62.8(0.1)52.4
Foreign currency translation14.02.73.52.91.81.31.60.2—
Ending Assets (June 30)$2,001.4$546.9$301.6$288.3$131.2$120.2$64.1$196.4$352.7
Average AUM$1,897.4$509.7$297.5$268.9$129.3$113.7$61.5$197.6$319.2
Three Months Ended June 30, 2024
(in billions)TotalETFs and Index (4)Fundamental Fixed Income (5)Fundamental Equities (6)Private Markets (7)China JV & India (8)Multi-Asset/ Other (9)Global Liquidity (10)QQQ (11)
Beginning Assets (April 1)$1,662.7$399.2$270.4$285.9$128.2$92.5$60.5$166.7$259.3
Long-term inflows97.843.516.38.86.620.42.2——
Long-term outflows(81.1)(30.6)(14.8)(17.4)(4.0)(11.4)(2.9)——
Net long-term flows16.712.91.5(8.6)2.69.0(0.7)——
Net flows in non-management fee earning AUM6.6—————(0.2)—6.8
Net flows in money market funds4.9————(1.7)—6.6—
Total net flows28.212.91.5(8.6)2.67.3(0.9)6.66.8
Reinvested distributions1.4—0.50.50.2—0.10.1—
Market gains and losses27.43.80.32.0(0.5)0.70.40.220.5
Foreign currency translation(3.9)0.1(2.1)(0.9)(0.3)(0.5)(0.2)——
Ending Assets (June 30)$1,715.8$416.0$270.6$278.9$130.2$100.0$59.9$173.6$286.6
Average AUM$1,669.3$402.9$268.8$278.9$128.1$96.7$59.6$170.5$263.8

See accompanying notes immediately following these AUM tables.

Six Months Ended June 30, 2025
(in billions)TotalETFs and Index (4)Fundamental Fixed Income (5)Fundamental Equities (6)Private Markets (7)China JV & India (8)Multi-Asset/ Other (9)Global Liquidity (10)QQQ (11)
Beginning Assets (January 1)$1,846.0$484.9$279.1$276.7$129.6$106.3$59.1$191.4$318.9
Long-term inflows240.799.847.623.215.448.85.9——
Long-term outflows(207.5)(70.9)(36.8)(33.8)(18.5)(41.0)(6.5)——
Net long-term flows33.228.910.8(10.6)(3.1)7.8(0.6)——
Net flows in non-management fee earning AUM7.8—————(0.4)—8.2
Net flows in money market funds6.8————2.2—4.6—
Total net flows47.828.910.8(10.6)(3.1)10.0(1.0)4.68.2
Reinvested distributions2.0—1.00.40.4—0.10.1—
Market gains and losses84.229.74.617.21.52.13.5—25.6
Foreign currency translation21.43.46.14.62.81.82.40.3—
Ending Assets (June 30)$2,001.4$546.9$301.6$288.3$131.2$120.2$64.1$196.4$352.7
Average AUM$1,889.1$505.6$290.8$272.7$130.9$110.8$60.7$198.0$319.6
Six Months Ended June 30, 2024
(in billions)TotalETFs and Index (4)Fundamental Fixed Income (5)Fundamental Equities (6)Private Markets (7)China JV & India (8)Multi-Asset/ Other (9)Global Liquidity (10)QQQ (11)
Beginning Assets (January 1)$1,585.3$363.0$270.7$274.2$130.8$91.9$57.8$166.9$230.0
Long-term inflows178.176.532.218.410.435.74.9——
Long-term outflows(155.1)(52.4)(29.6)(34.2)(6.8)(25.9)(6.2)——
Net long-term flows23.024.12.6(15.8)3.69.8(1.3)——
Net flows in non-management fee earning AUM16.1—————0.2—15.9
Net flows in money market funds5.6————(0.6)—6.2—
Total net flows44.724.12.6(15.8)3.69.2(1.1)6.215.9
Reinvested distributions2.5—1.00.80.4—0.10.2—
Market gains and losses95.430.01.222.2(3.7)0.93.70.440.7
Foreign currency translation(12.1)(1.1)(4.9)(2.5)(0.9)(2.0)(0.6)(0.1)—
Ending Assets (June 30)$1,715.8$416.0$270.6$278.9$130.2$100.0$59.9$173.6$286.6
Average AUM$1,641.2$390.5$268.4$277.6$128.3$94.3$59.0$168.1$255.0

See accompanying notes immediately following these AUM tables.

Active AUM by Channel (1)

Three months ended June 30,
20252024
(in billions)TotalRetailInstitutionalTotalRetailInstitutional
Beginning Assets (April 1)$1,041.3$513.6$527.7$995.7$514.7$481.0
Long-term inflows59.630.928.749.727.821.9
Long-term outflows(55.8)(34.2)(21.6)(47.4)(30.9)(16.5)
Net long-term flows3.8(3.3)7.12.3(3.1)5.4
Net flows in money market funds(3.2)(0.9)(2.3)4.9(0.6)5.5
Total net flows0.6(4.2)4.87.2(3.7)10.9
Reinvested distributions1.00.90.11.41.4—
Market gains and losses33.428.64.82.91.81.1
Foreign currency translation11.24.17.1(3.9)(1.0)(2.9)
Ending Assets (June 30)$1,087.5$543.0$544.5$1,003.3$513.2$490.1
Six Months Ended June 30,
20252024
(in billions)TotalRetailInstitutionalTotalRetailInstitutional
Beginning Assets (January 1)$1,026.5$517.5$509.0$985.3$501.5$483.8
Long-term inflows120.262.557.792.152.739.4
Long-term outflows(114.9)(68.1)(46.8)(96.9)(62.8)(34.1)
Net long-term flows5.3(5.6)10.9(4.8)(10.1)5.3
Net flows in money market funds6.82.93.95.60.65.0
Total net flows12.1(2.7)14.80.8(9.5)10.3
Reinvested distributions2.01.90.12.52.5—
Market gains and losses29.321.18.225.421.93.5
Transfer—(0.8)0.8———
Foreign currency translation17.66.011.6(10.7)(3.2)(7.5)
Ending Assets (June 30)$1,087.5$543.0$544.5$1,003.3$513.2$490.1

See accompanying notes immediately following these AUM tables.

Active AUM by Client Domicile (2)

Three months ended June 30,
20252024
(in billions)TotalAmericasAPACEMEATotalAmericasAPACEMEA
Beginning Assets (April 1)$1,041.3$695.0$212.5$133.8$995.7$682.8$191.3$121.6
Long-term inflows59.622.825.211.649.719.724.06.0
Long-term outflows(55.8)(30.3)(17.1)(8.4)(47.4)(26.2)(14.1)(7.1)
Net long-term flows3.8(7.5)8.13.22.3(6.5)9.9(1.1)
Net flows in money market funds(3.2)(3.2)0.8(0.8)4.96.6(1.6)(0.1)
Total net flows0.6(10.7)8.92.47.20.18.3(1.2)
Reinvested distributions1.00.8—0.21.41.3—0.1
Market gains and losses33.423.23.27.02.90.71.11.1
Foreign currency translation11.21.33.96.0(3.9)(0.1)(3.6)(0.2)
Ending Assets (June 30)$1,087.5$709.6$228.5$149.4$1,003.3$684.8$197.1$121.4
Six Months Ended June 30,
20252024
(in billions)TotalAmericasAPACEMEATotalAmericasAPACEMEA
Beginning Assets (January 1)$1,026.5$698.2$207.4$120.9$985.3$671.4$192.0$121.9
Long-term inflows120.245.847.526.992.139.040.712.4
Long-term outflows(114.9)(59.8)(39.2)(15.9)(96.9)(53.9)(28.7)(14.3)
Net long-term flows5.3(14.0)8.311.0(4.8)(14.9)12.0(1.9)
Net flows in money market funds6.85.22.4(0.8)5.66.3(0.5)(0.2)
Total net flows12.1(8.8)10.710.20.8(8.6)11.5(2.1)
Reinvested distributions2.01.8—0.22.52.4—0.1
Market gains and losses29.316.93.09.425.420.22.62.6
Foreign currency translation17.61.57.48.7(10.7)(0.6)(9.0)(1.1)
Ending Assets (June 30)$1,087.5$709.6$228.5$149.4$1,003.3$684.8$197.1$121.4

See accompanying notes immediately following these AUM tables.

Passive AUM by Channel (1)

Three months ended June 30,
20252024
(in billions)TotalRetailInstitutionalTotalRetailInstitutional
Beginning Assets (April 1)$803.5$723.6$79.9$667.0$602.2$64.8
Long-term inflows59.154.34.848.145.92.2
Long-term outflows(47.3)(41.9)(5.4)(33.7)(30.7)(3.0)
Net long-term flows11.812.4(0.6)14.415.2(0.8)
Net flows in non-management fee earning AUM2.83.2(0.4)6.66.7(0.1)
Total net flows14.615.6(1.0)21.021.9(0.9)
Market gains and losses93.086.86.224.524.5—
Transfer——————
Foreign currency translation2.81.71.1—(0.3)0.3
Ending Assets (June 30)$913.9$827.7$86.2$712.5$648.3$64.2
Six Months Ended June 30,
20252024
(in billions)TotalRetailInstitutionalTotalRetailInstitutional
Beginning Assets (January 1)$819.5$748.1$71.4$600.0$540.5$59.5
Long-term inflows120.5109.111.486.081.05.0
Long-term outflows(92.6)(82.5)(10.1)(58.2)(52.2)(6.0)
Net long-term flows27.926.61.327.828.8(1.0)
Net flows in non-management fee earning AUM7.88.6(0.8)16.115.70.4
Total net flows35.735.20.543.944.5(0.6)
Market gains and losses54.950.74.270.064.15.9
Transfer—(8.7)8.7———
Foreign currency translation3.82.41.4(1.4)(0.8)(0.6)
Ending Assets (June 30)$913.9$827.7$86.2$712.5$648.3$64.2

See accompanying notes immediately following these AUM tables.

Passive AUM by Client Domicile (2)

Three months ended June 30,
20252024
(in billions)TotalAmericasAPACEMEATotalAmericasAPACEMEA
Beginning Assets (April 1)$803.5$598.6$63.0$141.9$667.0$517.0$46.3$103.7
Long-term inflows59.137.210.711.248.130.74.113.3
Long-term outflows(47.3)(30.5)(9.0)(7.8)(33.7)(21.6)(3.8)(8.3)
Net long-term flows11.86.71.73.414.49.10.35.0
Net flows in non-management fee earning AUM2.82.70.7(0.6)6.65.90.20.5
Total net flows14.69.42.42.821.015.00.55.5
Market gains and losses93.078.71.912.424.519.11.34.1
Foreign currency translation2.80.21.31.3—(0.1)0.2(0.1)
Ending Assets (June 30)$913.9$686.9$68.6$158.4$712.5$551.0$48.3$113.2
Six Months Ended June 30,
20252024
(in billions)TotalAmericasAPACEMEATotalAmericasAPACEMEA
Beginning Assets (January 1)$819.5$617.3$62.8$139.4$600.0$462.5$43.5$94.0
Long-term inflows120.573.222.225.186.050.810.424.8
Long-term outflows(92.6)(57.0)(21.1)(14.5)(58.2)(31.3)(8.9)(18.0)
Net long-term flows27.916.21.110.627.819.51.56.8
Net flows in non-management fee earning AUM7.811.61.7(5.5)16.116.0(0.8)0.9
Total net flows35.727.82.85.143.935.50.77.7
Market gains and losses54.941.61.212.170.053.25.011.8
Foreign currency translation3.80.21.81.8(1.4)(0.2)(0.9)(0.3)
Ending Assets (June 30)$913.9$686.9$68.6$158.4$712.5$551.0$48.3$113.2

(1) Channel refers to the internal distribution channel from which the AUM originated. Retail AUM represents AUM distributed by the company’s retail sales teams. Institutional AUM represents AUM distributed by our institutional sales teams. This aggregation is viewed as a proxy for presenting AUM in the retail and institutional markets in which the company operates.

(2) Client domicile groups AUM by the domicile of the underlying clients.

(3) Investment capabilities are descriptive groupings of AUM by investment strategy.

(4) ETFs and Index includes ETFs and Indexed Strategies and excludes Invesco QQQ Trust.

(5) Fundamental Fixed Income includes Fixed Income products, including certain ETFs managed within this capability.

(6) Fundamental Equities includes Equity products.

(7) Private Markets includes Private Credit and Real Estate investments comprised primarily of Real Estate, CLOs, Private Credit and listed real assets, including certain ETFs managed within this capability.

(8) Beginning in the first quarter of 2025, products managed by Invesco Great Wall and Invesco Asset Management (India) Private Limited are included in the newly defined China JV & India investment capability. Other products previously categorized under the APAC Managed investment capability are included in the other investment capabilities based on their investment strategies. Beginning assets as of January 1, 2025 and the comparative period reflect the current period presentation.

(9) Multi-Asset/Other includes Global Asset Allocation, Invesco Quantitative Strategies, Global Targeted Returns, Solutions, Intelliflo, and UITs, including certain ETFs managed within this capability.

(10) Global Liquidity is comprised mainly of Money Market funds.

(11) QQQ represents assets held within Invesco QQQ Trust.

Results of Operations for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024

The discussion below includes the use of non-GAAP financial measures. See “Schedule of Non-GAAP Information” for additional details and reconciliations of the most directly comparable U.S. GAAP measures to the non-GAAP measures.

Operating Revenues and Net Revenues

The main categories of revenues, and the dollar and percentage change between the periods, are as follows:

Three months ended June 30,Six months ended June 30,
(in millions)20252024$ Change% Change20252024$ Change% Change
Investment management fees$1,100.9$1,065.8$35.13.3%$2,201.2$2,114.5$86.74.1%
Service and distribution fees363.8361.62.20.6%734.7738.6(3.9)(0.5)%
Performance fees2.68.7(6.1)(70.1)%6.19.5(3.4)(35.8)%
Other48.247.21.02.1%102.796.06.77.0%
Total operating revenues$1,515.5$1,483.3$32.22.2%$3,044.7$2,958.6$86.12.9%
Revenue Adjustments:
Investment management fees$(211.8)$(203.8)$(8.0)3.9%$(420.8)$(396.1)$(24.7)6.2%
Service and distribution fees(252.7)(253.5)0.8(0.3)%(512.3)(525.3)13.0(2.5)%
Other(36.2)(38.1)1.9(5.0)%(76.6)(78.0)1.4(1.8)%
Total Revenue Adjustments (1)(500.7)(495.4)(5.3)1.1%(1,009.7)(999.4)(10.3)1.0%
Invesco Great Wall79.286.1(6.9)(8.0)%157.4160.8(3.4)(2.1)%
CIP10.611.8(1.2)(10.2)%20.919.01.910.0%
Net revenues (2)$1,104.6$1,085.8$18.81.7%$2,213.3$2,139.0$74.33.5%

(1) Total Revenue Adjustments remove pass through investment management fees, service and distribution fees, and other revenues and equal the same amount as the Third-party distribution, service and advisory expenses.

(2) See “Schedule of Non-GAAP Information” for additional important disclosures regarding the use of net revenues.

Our revenues are directly influenced by the level and composition of our AUM. Therefore, movements in global capital market levels, net inflows (or outflows), and changes in the mix of investment products between and within asset classes and geographies may materially affect our revenues from period to period. See the company’s disclosures regarding the changes in AUM during the three and six months ended June 30, 2025 and June 30, 2024 in the “Assets Under Management” section above for additional information. In addition, as fee rates differ across geographic locations, changes to the mix of AUM between geographies and exchange rates have an impact on revenues and net revenue yields.

Average AUM were $1,889.1 billion for the six months ended June 30, 2025 as compared to $1,641.2 billion for the six months ended June 30, 2024. As secular shifts in client demand continue, our broad set of investment capabilities have allowed us to capture evolving client product preferences, including products that have lower net revenue yields. In addition, the impact of market volatility in the beginning of the second quarter of 2025 also negatively impacted our AUM and net revenues. As a result, net revenue yield excluding performance fees and Invesco QQQ Trust declined to 28.1 basis points (bps) for the six months ended June 30, 2025 from 30.5 bps for the six months ended June 30, 2024.

Investment Management Fees

Investment management fees were $1,100.9 million for the three months ended June 30, 2025 as compared to $1,065.8 million for the three months ended June 30, 2024. The impact of foreign exchange rate movements increased investment management fees by $15.1 million during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. After allowing for foreign exchange movements, investment management fees increased by $20.0 million as a result of higher average AUM partially offset by the impacts of secular shifts in client demand which have altered our asset mix. See discussion above on how AUM changes impact our Investment management fees.

Investment management fees were $2,201.2 million for the six months ended June 30, 2025 as compared to $2,114.5 million for the six months ended June 30, 2024. The impact of foreign exchange rate movements increased investment management fees by $6.8 million during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. After allowing for foreign exchange movements, investment management fees increased by $79.9 million as a result of higher average AUM partially offset by the impacts of secular shifts in client demand which have altered our asset mix. See discussion above on how AUM changes impact our Investment management fees.

Service and Distribution Fees

For the three months ended June 30, 2025, Service and distribution fees were $363.8 million as compared to $361.6 million for the three months ended June 30, 2024.

For the six months ended June 30, 2025, Service and distribution fees were $734.7 million as compared to $738.6 million for the six months ended June 30, 2024.

Performance Fees

Performance fees were $2.6 million and $6.1 million for the three and six months ended June 30, 2025, respectively, and were primarily generated from private markets products.

Performance fees were $8.7 million and $9.5 million for the three and six months ended June 30, 2024, respectively, and were primarily generated from private markets products.

Other Revenues

For the three months ended June 30, 2025, Other revenues were $48.2 million as compared to $47.2 million for the three months ended June 30, 2024.

For the six months ended June 30, 2025, Other revenues were $102.7 million as compared to $96.0 million for the six months ended June 30, 2024. The increase in Other revenues was primarily driven by higher transaction fees.

Invesco Great Wall

The company’s most significant joint venture is our investment in IGW. The company reflects 100% of IGW's results in its Net revenues and Adjusted operating expenses because it is important to evaluate the contribution that IGW is making to the business. The company’s non-GAAP operating results reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income attributable to Invesco Ltd. is reduced by the amount of earnings attributable to the noncontrolling interests. See “Schedule of Non-GAAP Information” for additional disclosures regarding the use of Net revenues.

Net revenues from IGW were $79.2 million and average AUM was $99.7 billion for the three months ended June 30, 2025 (Net revenues were $86.1 million and average AUM was $87.4 billion for the three months ended June 30, 2024). The decrease in IGW revenues was primarily due to lower performance fees.

Net revenues from IGW were $157.4 million and average AUM was $98.1 billion for the six months ended June 30, 2025 (Net revenues were $160.8 million and average AUM was $85.6 billion for the six months ended June 30, 2024).

CIP

Management believes that the consolidation of investment products may impact a reader's analysis of our underlying results of operations and could result in investor confusion or the production of information about the company by analysts or external credit rating agencies that is not reflective of the underlying results of operations and financial condition of the company. Accordingly, management believes that it is appropriate to adjust Operating revenues for the impact of CIP in calculating Net revenues. As Management and Performance fees earned by Invesco from the consolidated products are eliminated upon consolidation of the investment products, management believes that it is appropriate to add these Operating revenues back in the calculation of Net revenues. See “Schedule of Non-GAAP Information” for additional disclosures regarding the use of Net revenues.

Management and Performance fees earned from CIP were $10.6 million for the three months ended June 30, 2025 (three months ended June 30, 2024: $11.8 million).

Management and Performance fees earned from CIP were $20.9 million for the six months ended June 30, 2025 (six months ended June 30, 2024: $19.0 million).

Operating Expenses

The main categories of Operating expenses, and the dollar and percentage changes between periods, are as follows:

Three months ended June 30,Six months ended June 30,
(in millions)20252024$ Change% Change20252024$ Change% Change
Third-party distribution, service and advisory$500.7$495.4$5.31.1%$1,009.7$999.4$10.31.0%
Employee compensation510.4452.358.112.8%975.0925.050.05.4%
Marketing23.120.62.512.1%40.138.71.43.6%
Property, office and technology118.2116.41.81.5%232.1234.0(1.9)(0.8)%
General and administrative139.2180.4(41.2)(22.8)%276.5318.9(42.4)(13.3)%
Amortization of intangibles9.711.4(1.7)(14.9)%19.822.7(2.9)(12.8)%
Total operating expenses$1,301.3$1,276.5$24.81.9%$2,553.2$2,538.7$14.50.6%

The table below sets forth these expense categories as a percentage of total Operating expenses and Operating revenues, which we believe provides useful information as to the relative significance of each type of expense.

(in millions)Three months ended June 30, 2025% of Total Operating Expenses% of Operating RevenuesThree months ended June 30, 2024% of Total Operating Expenses% of Operating Revenues
Third-party distribution, service and advisory$500.738.5%33.0%$495.438.8%33.4%
Employee compensation510.439.2%33.7%452.335.4%30.5%
Marketing23.11.8%1.5%20.61.6%1.4%
Property, office and technology118.29.1%7.8%116.49.1%7.8%
General and administrative139.210.7%9.2%180.414.2%12.2%
Amortization of intangibles9.70.7%0.7%11.40.9%0.8%
Total operating expenses$1,301.3100.0%85.9%$1,276.5100.0%86.1%
(in millions)Six months ended June 30, 2025% of Total Operating Expenses% of Operating RevenuesSix months ended June 30, 2024% of Total Operating Expenses% of Operating Revenues
Third-party distribution, service and advisory$1,009.739.5%33.2%$999.439.4%33.8%
Employee compensation975.038.2%32.0%925.036.4%31.2%
Marketing40.11.6%1.3%38.71.5%1.3%
Property, office and technology232.19.1%7.6%234.09.2%7.9%
General and administrative276.510.8%9.1%318.912.6%10.8%
Amortization of intangibles19.80.8%0.7%22.70.9%0.8%
Total operating expenses$2,553.2100.0%83.9%$2,538.7100.0%85.8%

During the three months ended June 30, 2025, Operating expenses increased $24.8 million compared to the three months ended June 30, 2024. The impact of foreign exchange rate movements increased operating expenses by $15.5 million during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.

During the six months ended June 30, 2025, Operating expenses increased $14.5 million compared to the six months ended June 30, 2024. The impact of foreign exchange rate movements increased operating expenses by $6.5 million during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Third-Party Distribution, Service and Advisory

Third-party distribution, service and advisory expenses were $500.7 million for the three months ended June 30, 2025 as compared to $495.4 million for the three months ended June 30, 2024. The increase was primarily due to the impact of foreign exchange rate movements.

Third-party distribution, service and advisory expenses were $1,009.7 million for the six months ended June 30, 2025 as compared to $999.4 million for the six months ended June 30, 2024. The increase was primarily due to higher average AUM, partially offset by a decrease in pass-through Service and distribution fees resulting from lower fund costs.

Employee Compensation

Employee compensation was $510.4 million for the three months ended June 30, 2025 as compared to $452.3 million for the three months ended June 30, 2024. The impact of foreign exchange rate movements increased Employee compensation by $6.6 million during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. After allowing for foreign exchange rate changes, there was an increase of $51.5 million in Employee compensation expenses which was primarily due to a $22.4 million increase in expense related to the mark-to-market on deferred compensation liabilities, $16.9 million of severance expense related to the reorganization of the fundamental equities investment teams, and an increase in variable compensation and staff costs of $12.2 million.

Employee compensation was $975.0 million for the six months ended June 30, 2025 as compared to $925.0 million for the six months ended June 30, 2024. The increase was primarily due to $16.9 million of severance expense related to the reorganization of the fundamental equities investment teams and an increase in variable compensation and staff costs of $33.1 million.

Headcount at June 30, 2025 was 8,407 (June 30, 2024: 8,536).

Marketing

Marketing expenses were $23.1 million for the three months ended June 30, 2025 as compared to $20.6 million for the three months ended June 30, 2024.

Marketing expenses were $40.1 million for the six months ended June 30, 2025 as compared to $38.7 million for the six months ended June 30, 2024.

Property, Office and Technology

Property, office and technology expenses were $118.2 million for the three months ended June 30, 2025 as compared to $116.4 million for the three months ended June 30, 2024. The increase included an $8.0 million software impairment related to a strategic change to the company's fixed income investment platform, partially offset by a decrease in other technology costs.

Property, office and technology expenses were $232.1 million for the six months ended June 30, 2025 as compared to $234.0 million for the six months ended June 30, 2024.

General and Administrative

General and administrative expenses were $139.2 million for the three months ended June 30, 2025 as compared to $180.4 million for the three months ended June 30, 2024. The decrease was primarily due to the expense related to the accrual of a $50 million liability related to the settlement of certain regulatory matters in the second quarter of 2024, partially offset by higher professional fees.

General and administrative expenses were $276.5 million for the six months ended June 30, 2025 as compared to $318.9 million for the six months ended June 30, 2024. The decrease was primarily due to the expense related to the accrual of a $50 million liability related to the settlement of certain regulatory matters in the second quarter of 2024.

Other Income and Expenses

The main categories of Other income and expenses, and the dollar and percentage changes between periods, are as follows:

Three months ended June 30,Six months ended June 30,
(in millions)20252024$ Change% Change20252024$ Change% Change
Equity in earnings of unconsolidated affiliates$25.0$13.9$11.179.9%$44.6$20.8$23.8114.4%
Interest and dividend income10.511.0(0.5)(4.5)%21.823.4(1.6)(6.8)%
Interest expense(20.7)(16.3)(4.4)27.0%(33.8)(32.2)(1.6)5.0%
Other gains and losses, net59.73.656.11,558.3%35.439.5(4.1)(10.4)%
Other income/(expense) of CIP, net(14.3)40.9(55.2)N/A59.871.4(11.6)(16.2)%
Total other income and expenses$60.2$53.1$7.113.4%$127.8$122.9$4.94.0%

Equity in earnings of unconsolidated affiliates

Equity in earnings of unconsolidated affiliates increased to $25.0 million for the three months ended June 30, 2025 as compared to $13.9 million for the three months ended June 30, 2024. The increase was primarily due to higher earnings from our private markets investments and our joint venture investment in IGW.

Equity in earnings of unconsolidated affiliates increased to $44.6 million for the six months ended June 30, 2025 as compared to $20.8 million for the six months ended June 30, 2024. The increase was primarily due to higher earnings from our private markets investments and our joint venture investment in IGW.

Interest and dividend income

Interest and dividend income was $10.5 million for the three months ended June 30, 2025 as compared to $11.0 million for the three months ended June 30, 2024.

Interest and dividend income was $21.8 million for the six months ended June 30, 2025 as compared to $23.4 million for the six months ended June 30, 2024.

Interest expense

Interest expense was $20.7 million for the three months ended June 30, 2025 as compared to $16.3 million for the three months ended June 30, 2024. The second quarter of 2025 includes interest expense related to the new bank term loans entered into on May 16, 2025.

Interest expense was $33.8 million for the six months ended June 30, 2025 as compared to $32.2 million for the six months ended June 30, 2024.

Other gains and losses, net

Other gain and losses, net was a gain of $59.7 million for the three months ended June 30, 2025 as compared to a net gain of $3.6 million for the three months ended June 30, 2024. The net gain for the three months ended June 30, 2025 included net market gains of $48.2 million on deferred compensation related investments and hedging instruments and $11.5 million on other investments.

Other gain and losses, net was a gains of $35.4 million for the six months ended June 30, 2025 as compared to a net gain of $39.5 million for the six months ended June 30, 2024. The net gains for the six months ended June 30, 2025 included net market gains of $27.9 million on deferred compensation related investments and hedging instruments and $11.5 million on other investments.

Other income/(expense) of CIP, net

For the three months ended June 30, 2025, Other income/(expense) of CIP, net was a net loss of $14.3 million (three months ended June 30, 2024: net income of $40.9 million). Interest and dividend income of CIP decreased $46.0 million to $124.2 million (three months ended June 30, 2024: $170.2 million). Interest expense of CIP decreased $14.8 million to $104.9 million

(three months ended June 30, 2024: $119.7 million). Unrealized gains/(losses) of CIP were a net loss of $33.6 million (three months ended June 30, 2024: net losses of $9.6 million).

For the six months ended June 30, 2025, Other income/(expense) of CIP, net was net income of $59.8 million (six months ended June 30, 2024: net income of $71.4 million). Interest and dividend income of CIP increased $3.3 million to $253.6 million (six months ended June 30, 2024: $250.3 million). Interest expense of CIP increased $37.7 million to $204.6 million (six months ended June 30, 2024: $166.9 million). Unrealized gains/(losses) of CIP were a net gain of $10.8 million (six months ended June 30, 2024: net losses of $12.0 million).

Net impact of CIP and related noncontrolling interests in consolidated entities

The adjustment to Net income for the Net income/(loss) attributable to noncontrolling interests in consolidated entities removes the income/(expense) of CIP which is attributable to third-party investors. Therefore, the consolidation of investment products did not have an impact on Net income attributable to Invesco for the six months ended June 30, 2025 and 2024. Also, the net income or loss of CIP is taxed at the investor level, not at the product level; therefore, a tax provision is not reflected in the net impact of CIP.

Income Tax Expense

The company’s subsidiaries operate in numerous taxing jurisdictions around the world, each with its own statutory tax rate. As a result, the blended statutory tax rate will vary from year to year depending on the mix of the profits and losses from each jurisdiction.

Our effective tax rate increased to 28.1% for the three months ended June 30, 2025 (three months ended June 30, 2024: 24.6%). The increase in the effective tax rate in the second quarter of 2025 was primarily due to tax rate changes in the jurisdictions in which we operate and the unfavorable impact of the change in the mix of income across tax jurisdictions.

Our effective tax rate increased to 25.0% for the six months ended June 30, 2025 (six months ended June 30, 2024: 24.4%).

On July 4, 2025, the U.S. enacted H.R. 1, commonly referred to as the One Big Beautiful Bill Act of 2025, which includes changes to certain U.S. tax laws. The company is currently evaluating the effects of the legislation but does not expect it to have a material impact.

Schedule of Non-GAAP Information

We utilize the following non-GAAP performance measures: Net revenues (and by calculation, Net revenue yield on AUM), Adjusted operating income, Adjusted operating margin, Adjusted net income attributable to Invesco and Adjusted diluted EPS. The company believes the adjusted measures provide valuable insight into the company’s ongoing operational performance and assist in comparisons to its competitors. These measures also assist the company’s management with the establishment of operational budgets and forecasts. The most directly comparable U.S. GAAP measures are Operating revenues (and by calculation, Gross revenue yield on AUM), Operating income, Operating margin, Net income attributable to Invesco and diluted EPS. Each of these measures is discussed more fully below.

The following are reconciliations of the U.S. GAAP measures to the non-GAAP measures. The non-GAAP measures should not be considered as substitutes for any U.S. GAAP measures and may not be comparable to other similarly titled measures of other companies. Additional reconciling items may be added in the future to the non-GAAP measures if deemed appropriate. The tax effects related to the reconciling items have been calculated based on the tax rate attributable to the jurisdiction to which the transaction relates. Notes to the reconciliations follow the tables.

Reconciliation of Operating revenues to Net revenues:

Three months ended June 30,Six months ended June 30,
(in millions)2025202420252024
Operating revenues, U.S. GAAP basis$1,515.5$1,483.3$3,044.7$2,958.6
Revenue adjustments (1)
Investment management fees(211.8)(203.8)(420.8)(396.1)
Service and distribution fees(252.7)(253.5)(512.3)(525.3)
Other(36.2)(38.1)(76.6)(78.0)
Total revenue adjustments(500.7)(495.4)(1,009.7)(999.4)
Invesco Great Wall (2)79.286.1157.4160.8
CIP (3)10.611.820.919.0
Net revenues$1,104.6$1,085.8$2,213.3$2,139.0

Reconciliation of Operating income to Adjusted operating income:

Three months ended June 30,Six months ended June 30,
(in millions)2025202420252024
Operating income, U.S. GAAP basis$214.2$206.8$491.5$419.9
Invesco Great Wall (2)49.944.390.282.6
CIP (3)15.915.737.427.9
Amortization of intangible assets (4)9.711.419.822.7
Compensation expense related to market valuation changes of deferred compensation liabilities (5)29.87.130.128.7
Severance (6)16.9—16.9—
Software impairment (7)8.0—8.0—
General and administrative (8)—50.0—50.0
Adjusted operating income$344.4$335.3$693.9$631.8
Operating margin(9)14.1%13.9%16.1%14.2%
Adjusted operating margin(10)31.2%30.9%31.4%29.5%

Reconciliation of Net income/(loss) attributable to Invesco to Adjusted net income attributable to Invesco:

Three months ended June 30,Six months ended June 30,
(in millions, except per common share data)2025202420252024
Net income/(loss) attributable to Invesco Ltd., U.S. GAAP basis$(12.5)$132.2$158.6$273.7
Adjustments (excluding tax):
Amortization of intangible assets (4)$9.7$11.4$19.8$22.7
Deferred compensation net market valuation changes (5)(19.0)5.31.1(6.2)
Severance (6)16.9—16.9—
Software impairment (7)8.0—8.0—
General and administrative (8)—50.0—50.0
Total adjustments excluding tax$15.6$66.7$45.8$66.5
Tax adjustment for amortization of intangible assets and goodwill (11)4.04.48.18.8
Other tax effects of adjustments above(1.2)(7.1)(6.1)(4.4)
Repurchase of preferred stock (12)159.3—159.3—
Adjusted net income attributable to Invesco Ltd.$165.2$196.2$365.7$344.6
Average common shares outstanding - diluted455.2456.1454.6457.5
Diluted EPS$(0.03)$0.29$0.35$0.60
Adjusted diluted EPS (13)$0.36$0.43$0.80$0.75

(1) Revenue adjustments: The company calculates Net revenues by reducing Operating revenues to exclude fees that are passed through to external parties who perform functions on behalf of, and distribute, the company’s managed funds. The Net revenue presentation assists in identifying the revenue contribution generated by the company, removing distortions caused by the differing distribution channel fees and allowing for a fair comparison with U.S. peer investment managers and within Invesco’s own investment units. Additionally, management evaluates Net revenue yield on AUM, which is equal to Net revenues divided by Average AUM during the reporting period, as an indicator of the Net revenues we receive for each dollar of AUM we manage.

Investment management fees are adjusted by renewal commissions and certain administrative fees. Service and distribution fees are primarily adjusted by distribution fees passed through to broker dealers for certain share classes and pass through fund-related costs. Other revenues are primarily adjusted by transaction fees passed through to third parties.

(2) Invesco Great Wall: The company reflects 100% of IGW in its Net revenues and Adjusted operating income (and by calculation, Adjusted operating margin). The company’s non-GAAP operating results reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income is reduced by the amount of earnings attributable to the noncontrolling interests.

(3) CIP: See note 11, “Consolidated Investment Products,” for a detailed analysis of the impact to the company’s Condensed Consolidated Financial Statements from the consolidation of CIP. The company believes that the CIP may impact a reader’s analysis of our underlying results of operations and could result in investor confusion or the production of information about the company by analysts or external credit rating agencies that is not reflective of the underlying results of operations and financial condition of the company. Accordingly, the company believes that it is appropriate to adjust Operating revenues and Operating income for the impact of CIP in calculating the respective Net revenues and Adjusted operating income (and by calculation, Adjusted operating margin).

(4) Amortization of intangible assets: The company removes amortization expense related to acquired assets in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS, as this will aid comparability of our results period to period, and aid comparability with peer companies that may not have similar acquisition-related charges.

(5) Market valuation changes related to deferred compensation plan liabilities: Certain deferred compensation plan awards provide a return to the employee linked to the appreciation (depreciation) of specified investments. The company economically hedges the exposure to market movements on these deferred compensation liabilities. Since these liabilities are economically hedged, the company believes it is useful to remove the market movements related to the deferred compensation plan liabilities from the calculation of Adjusted operating income (and by calculation, Adjusted operating margin) and to remove the net impact of the economic hedge from the calculation of Adjusted net income (and by calculation, Adjusted diluted EPS) to produce results that will be more comparable period to period.

(6) Severance: In the second quarter of 2025, the company removed the severance expense related to the reorganization of its fundamental equities investment teams. The company removed this expense in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS, as this will aid comparability of our results period to period and aid comparability with peer companies that may not have similar reorganization related charges.

(7) Software impairment: In the second quarter of 2025, the company removed the non-cash software impairment related to a strategic change in our fixed income investment platform. The company removed the expense in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS as this will aid comparability of our results period to period.

(8) General and administrative: In 2024, the company removed the expense related to the settlement of regulatory matters. Due to the non-recurring nature of this item, the company removed this expense in arriving at Adjusted operating income, Adjusted operating margin and Adjusted diluted EPS as this will aid comparability of our results period to period.

(9) Operating margin is equal to Operating income divided by Operating revenues.

(10) Adjusted operating margin is equal to Adjusted operating income divided by Net revenues.

(11) Tax adjustment for amortization of intangible assets and goodwill: The company reflects the tax benefit realized on the tax amortization of goodwill and intangible assets in Adjusted net income. The company believes it is useful to include this tax benefit in arriving at the Adjusted diluted EPS measure.

(12) Repurchase of preferred stock: In the second quarter of 2025, the company repurchased $1.0 billion of the company’s outstanding Series A Preferred Stock held by MassMutual. The company removed the costs associated with the repurchase from the calculation of Adjusted net income (and by calculation, Adjusted diluted EPS) as this will aid comparability of our results period to period and aid comparability with peer companies that may not have similar repurchase related charges.

(13) Adjusted diluted EPS is equal to Adjusted net income attributable to Invesco Ltd. divided by the weighted average number of common and restricted common shares outstanding.

Balance Sheet Discussion (1)

The following table represents a reconciliation of the balance sheet information presented on a U.S. GAAP basis to the balance sheet information excluding the impact of CIP for the reasons outlined in footnote 1 to the table:

June 30, 2025December 31, 2024
Balance sheet information (in millions)U.S. GAAPImpact of CIPAs AdjustedU.S. GAAPImpact of CIPAs Adjusted
ASSETS
Cash and cash equivalents$922.7$—$922.7$986.5$—$986.5
Investments1,128.7385.11,513.81,240.0401.41,641.4
Goodwill and intangible assets, net14,334.6—14,334.614,067.4—14,067.4
Other assets (2)2,437.010.52,447.52,340.511.12,351.6
Investments and other assets of CIP (3)9,673.9(9,673.9)—8,374.5(8,374.5)—
Total assets$28,496.9$(9,278.3)$19,218.6$27,008.9$(7,962.0)$19,046.9
LIABILITIES
Debt$1,883.9$—$1,883.9$890.6$—$890.6
Other liabilities (4)3,461.6—3,461.63,596.4—3,596.4
Debt and other liabilities of CIP8,192.5(8,192.5)—6,853.1(6,853.1)—
Total liabilities$13,538.0$(8,192.5)$5,345.5$11,340.1$(6,853.1)$4,487.0
EQUITY
Total equity attributable to Invesco Ltd.$13,873.1$—$13,873.1$14,559.9$—$14,559.9
Noncontrolling interests (5)1,085.8(1,085.8)—1,108.9(1,108.9)—
Total equity14,958.9(1,085.8)13,873.115,668.8(1,108.9)14,559.9
Total liabilities and equity$28,496.9$(9,278.3)$19,218.6$27,008.9$(7,962.0)$19,046.9

(1) This table includes non-GAAP presentations. Assets of CIP are not available for use by Invesco. Additionally, there is no recourse to Invesco for CIP debt.

(2) Amounts include Accounts receivable, Property, equipment and software, and Other assets.

(3) Amounts also include Cash and cash equivalents and Accounts receivable of CIP.

(4) Amounts include Accrued compensation and benefits, Accounts payable and accrued expenses, and Deferred tax liabilities.

(5) Amounts include Redeemable noncontrolling interests in consolidated entities and Equity attributable to nonredeemable noncontrolling interests in consolidated entities.

Cash and cash equivalents

Cash and cash equivalents decreased by $63.8 million from $986.5 million at December 31, 2024 to $922.7 million at June 30, 2025. See “Cash Flows Discussion” below within this Management’s Discussion and Analysis for additional discussion regarding the movements in cash flows during the period.

Investments

Investments are comprised primarily of the equity method investment in IGW, seed capital and co-investments in affiliated funds, and investments related to the company’s deferred compensation plans.

As of June 30, 2025 and December 31, 2024, the company had $1,035.9 million and $1,125.6 million in seed capital and co-investments, respectively, including direct investments in CIP. The following table reconciles the Investments balance to the total seed capital and co-investment balance.

(in millions)June 30, 2025December 31, 2024
Investments$1,128.7$1,240.0
Net investment in CIP385.1401.4
Less: Investments related to deferred compensation plans, joint ventures, and other investments(477.9)(515.8)
Total seed capital and co-investments (1)$1,035.9$1,125.6

(1) Included in the total seed capital and co-investments balance as of June 30, 2025 is $396.6 million of seed capital and $639.3 million of co-investments (December 31, 2024: $414.0 million of seed capital and $711.6 million of co-investments).

Goodwill and intangible assets, net

Goodwill and intangible assets, net increased from $14,067.4 million at December 31, 2024 to $14,334.6 million at June 30, 2025. The increase includes foreign exchange impacts of $287.0 million, partially offset by amortization of $19.8 million. Unfavorable changes in market conditions could result in an impairment of our goodwill and/or intangible assets. A goodwill impairment may be triggered by a significant decline in our revenue and operating income or a sustained decrease in our stock price. An impairment of our intangible assets may occur if there is a significant decline in the revenue generated from the acquired management contracts associated with the intangible asset.

Liquidity and Capital Resources

Our capital structure, together with available cash balances, cash flows generated from operations, existing capacity under our Revolving credit agreement and further capital market activities, if necessary, should provide us with sufficient resources to meet present and future cash needs, including operating expenses, debt and other obligations as they come due and anticipated future capital requirements.

Sources of Liquidity by Type

(in millions)June 30, 2025December 31, 2024
Cash and cash equivalents$922.7$986.5
Available Revolving credit agreement2,500.02,000.0
Total sources of liquidity by type$3,422.7$2,986.5

The Revolving credit agreement was amended and restated on May 16, 2025 increasing borrowing capacity from $2.0 billion to $2.5 billion and extending the expiration date from April 26, 2028 to May 16, 2030. As of June 30, 2025, the balance on the Revolving credit agreement was zero.

Capital Management

Our capital management priorities have evolved with the growth and success of our business and include, in no particular order of priority: reinvestment in the business, maintaining a strong balance sheet and returning capital to shareholders longer term through a combination of share repurchases and modestly increasing dividends. During the six months ended June 30, 2025, the company repurchased 3.2 million common shares for $50 million in the open market. Additionally, on May 16, 2025, the company repurchased $1.0 billion of the $4.0 billion of outstanding Series A Preferred Stock held by MassMutual. The repurchase was funded through $1.0 billion of floating rate 3-year and 5-year bank term loans.

Our capital management process is executed in a manner consistent with our desire to maintain strong, investment grade credit ratings. As of the date of our filing, Invesco held credit ratings of BBB+/Stable, A3/Stable and A/Stable from Standard & Poor’s (S&P) Ratings Service, Moody’s Investor Services and Fitch Ratings, respectively.

Other Items

Certain of our subsidiaries are required to maintain minimum levels of regulatory capital, liquidity, and working capital. Such requirements may change from time-to-time as additional guidance is released based on a variety of factors, including balance sheet composition, assessment of risk exposures and governance, and review from regulators. These and other similar

provisions of applicable laws and regulations may have the effect of limiting withdrawals of capital, repayment of intercompany loans and payment of dividends by such entities. Our financial condition or liquidity could be adversely affected if certain of our subsidiaries are unable to distribute funds to us.

We are in compliance with all regulatory minimum net capital requirements. As of June 30, 2025, the company’s minimum regulatory capital requirement was $360.8 million (December 31, 2024: $324.9 million).

We meet the regulatory liquidity and working capital requirements by holding cash and cash equivalents in the European sub-group. This retained cash can be used for general business purposes in the European sub-group in the countries where it is located. Due to the liquidity and working capital requirements, the ability to transfer cash between certain jurisdictions may be limited. In addition, transfers of cash between international jurisdictions may have adverse tax consequences.

The consolidation of $9,673.9 million of assets and $6,784.6 million of debt of CIP as of June 30, 2025, respectively, did not impact the company’s liquidity and capital resources. See Part I, Item 1, Financial Statements - Note 11, “Consolidated Investment Products,” for additional details.

Cash Flows Discussion

The following table represents a reconciliation of the cash flow information presented on a U.S. GAAP basis to the cash flows information excluding the impact of the cash flows of CIP for the reasons outlined in footnote 1 to the table:

Cash flows information (1)Six months ended June 30, 2025Six months ended June 30, 2024
(in millions)U.S. GAAPImpact of CIPExcluding CIPU.S. GAAPImpact of CIPExcluding CIP
Cash and cash equivalents, beginning of the period$1,496.0$(509.5)$986.5$1,931.6$(462.4)$1,469.2
Cash flows from operating activities463.3(96.8)366.5434.7(112.3)322.4
Cash flows from investing activities(367.4)407.139.757.4(26.3)31.1
Cash flows from financing activities(195.5)(333.9)(529.4)(860.0)(64.9)(924.9)
Increase/(decrease) in cash and cash equivalents(99.6)(23.6)(123.2)(367.9)(203.5)(571.4)
Foreign exchange movement on cash and cash equivalents95.5(36.1)59.4(22.4)3.1(19.3)
Cash and cash equivalents, end of the period$1,491.9$(569.2)$922.7$1,541.3$(662.8)$878.5
Cash and cash equivalents$922.7$—$922.7$878.5$—$878.5
Cash and cash equivalents of CIP569.2(569.2)—662.8(662.8)—
Total cash and cash equivalents per condensed consolidated statement of cash flows$1,491.9$(569.2)$922.7$1,541.3$(662.8)$878.5

(1) These tables include non-GAAP presentations. Cash held by CIP is not available for use by Invesco. Additionally, there is no recourse to Invesco for CIP debt. The cash flows of CIP do not form part of the company’s cash flow management processes, nor do they form part of the company’s significant liquidity evaluations and decisions.

Operating Activities

Operating cash flows include the receipt of Investment management and other fees generated from AUM, offset by Operating expenses and Changes in operating assets and liabilities. After allowing for the change in cash held by CIP, investment activities, non-cash activity, and seasonal payments such as bonus payments in the first quarter, our operating cash flows generally move in the same direction as our Operating income.

Cash inflows for the six months ended June 30, 2025, excluding the impact of the consolidation of CIP, was partially offset by net outflows from changes in payables and receivables due to timing of payments and receipts.

Investing Activities

Cash inflows for the six months ended June 30, 2025, excluding the impact of the consolidation of CIP, included proceeds of $127.3 million from Capital distributions from equity method investees (six months ended June 30, 2024: $124.7 million) which were partially offset by Purchase of investments of $46.8 million (six months ended June 30, 2024: $46.0 million purchases). In addition, the company had capital expenditures of $40.9 million for the six months ended June 30, 2025 which included investment in technology projects and facility costs related to our move to our new London office (six months ended June 30, 2024: $47.7 million).

Financing Activities

Financing cash outflows during the six months ended June 30, 2025, excluding the impact of the consolidation of CIP, included net cash inflows of $992.7 million related to the new bank term loans and cash outflows of $1.0 billion to repurchase the company’s Series A Preferred Stock. Financing cash outflows for the six months ended June 30, 2025 also included the $150.0 million premium paid on the repurchase of Series A Preferred Stock, $187.7 million of common dividend payments for the dividends declared in January and April (six months ended June 30, 2024: common dividends paid of $183.4 million), $115.8 million of preferred dividend payments for dividends declared in January and April (six months ended June 30, 2024: $118.4 million), the payment of $18.6 million to meet employees’ withholding tax obligations on common share vestings (six months ended June 30, 2024: $23.1 million) and purchases of common shares through the open market of $50.0 million (six months ended June 30, 2024: none). The six months ended June 30, 2024 also included a $600.0 million redemption of our senior notes.

Dividends

When declared, Invesco pays dividends on a quarterly basis in arrears. Holders of our preferred shares are eligible to receive dividends at an annual rate of 5.9% of the liquidation preference of $1,000 per share, or $59 per share per annum. The preferred stock dividend is payable quarterly on a non-cumulative basis when, if and as declared by our Board. However, if we have not declared and paid or set aside for payment full quarterly dividends on the preferred stock for a particular dividend period, we may not declare or pay dividends on, redeem, purchase or acquire, our common stock or other junior securities in the next succeeding dividend period. In addition, if we have not declared and paid or set aside for payment quarterly dividends on the preferred stock for six quarterly periods, whether or not consecutive, the number of directors of the company will be increased by two and the holders of the preferred shares shall have the right to elect such two additional members of the Board.

On July 21, 2025, the company declared a second quarter 2025 cash dividend of $0.21 per common share to the holders of common shares. The dividend is payable on September 2, 2025, to common shareholders of record at the close of business on August 14, 2025, with an ex-dividend date of August 14, 2025.

On July 21, 2025, the company declared a preferred dividend of $14.75 per preferred share, representing the period from June 1, 2025 through August 31, 2025. The preferred dividend is payable on September 1, 2025.

The declaration, payment and amount of any future dividends will depend upon, among other factors, our earnings, financial condition and capital requirements at the time such declaration and payment are considered. The company has a policy of managing dividends in a prudent fashion, with due consideration given to profit levels, overall debt levels and historical dividend payouts.

Common Share Repurchase Plan

During the three months ended June 30, 2025, the company repurchased 1.7 million common shares for $25 million in the open market; during the six months ended June 30, 2025, the company repurchased 3.2 million common shares for $50 million in the open market (three and six months ended June 30, 2024: none). At June 30, 2025, approximately $282.2 million remains available under the share repurchase authorizations approved by the Board on July 22, 2016.

Preferred Stock Repurchase

During the three months ended June 30, 2025, the company repurchased $1.0 billion of the $4.0 billion outstanding Series A Preferred Stock held by MassMutual for $1.15 billion.

Debt

The carrying value of our debt at June 30, 2025 was $1,883.9 million (December 31, 2024: $890.6 million). See Part I, Item 1, Financial Statements - Note 4, "Debt," for additional disclosures.

For the six months ended June 30, 2025, the company’s weighted average cost of debt was 4.71% (six months ended June 30, 2024: 4.79%).

Financial covenants under the Revolving credit agreement and Term loan agreement (collectively, Credit agreements) include: (i) the quarterly maintenance of an Adjusted debt/Earnings before income tax, depreciation, amortization, interest expense, common share-based compensation expense, unrealized (gains)/losses from investments, net, and unusual or otherwise non-recurring gains and losses (Covenant Adjusted EBITDA) leverage ratio, as defined in the Credit agreements, of not greater than 3.25:1.00, (ii) an interest coverage ratio (Covenant Adjusted EBITDA/interest expense for the four consecutive fiscal quarters ended before the date of determination) of not less than 4.00:1.00. As of June 30, 2025, we were in compliance with our financial covenants. At June 30, 2025, our leverage ratio was 0.83:1.00 (December 31, 2024: 0.25:1.00), and our interest coverage ratio was 26.69:1.00 (December 31, 2024: 26.84:1.00).

The June 30, 2025 coverage ratio calculations are as follows:

(in millions)TotalQ2 2025Q1 2025Q4 2024Q3 2024
Net income/(loss) attributable to Invesco Ltd.$422.9$(12.5)$171.1$209.3$55.0
Dividends on preferred shares234.256.659.259.259.2
Interest expense59.620.713.112.413.4
Tax expense274.877.077.678.741.5
Amortization/depreciation (1)193.553.847.148.644.0
Common share-based compensation expense68.521.715.214.117.5
One-time acceleration of compensation expense for currently outstanding Long-term awards (2)147.6———147.6
Severance (2)16.916.9———
Regulatory matters (2)2.5——2.5—
Cost of preferred stock repurchase (2)159.3159.3———
Unrealized (gains)/losses from investments, net (3)10.9(33.5)23.115.95.4
Covenant Adjusted EBITDA (4)$1,590.7$360.0$406.4$440.7$383.6
Adjusted debt (4)$1,325.5
Leverage ratio as of June 30, 2025 (Adjusted debt/Covenant Adjusted EBITDA - maximum 3.25:1.00)0.83
Interest coverage ratio as of June 30, 2025 (Covenant Adjusted EBITDA/Interest expense - minimum 4.00:1.00)26.69

(1) Includes amortization and impairment of cloud technology implementation costs.

(2) Unusual or otherwise non-recurring gains and losses, as defined in our Credit agreements, are adjusted for in the determination of Covenant Adjusted EBITDA. Severance expense related to the reorganization of the company’s fundamental equities investment teams and costs associated with the repurchase of the company’s outstanding Series A Preferred Stock in the second quarter of 2025 were non-recurring expenses and have been removed from Covenant Adjusted EBITDA. Adjustments to Covenant Adjusted EBITDA in 2024 included the one-time acceleration of expense resulting from changes to the criteria for retirements for Long-term awards and the settlement of regulatory matters.

(3) Adjustments for unrealized gains and losses from investments, as defined in our Credit agreements, may also include non-cash gains and losses on investments to the extent that they do not represent anticipated future cash receipts or expenditures.

(4) Covenant Adjusted EBITDA and Adjusted debt are non-GAAP financial measures that are used by management in connection with certain debt covenant calculations under our Credit agreements. The calculation of Covenant Adjusted EBITDA above (a reconciliation from Net income attributable to Invesco Ltd.) is defined by our Credit agreements, and therefore Net income attributable to Invesco Ltd. is the most appropriate GAAP measure from which to reconcile to Covenant Adjusted EBITDA. The calculation of Adjusted debt is defined in our amended Credit agreements and equals debt of $1,883.9 million plus $3.6 million in letters of credit less $562.0 million of excess unrestricted cash (cash and cash equivalents less the minimum regulatory capital requirement, not to exceed $600 million).

Credit and Liquidity Risk

The company manages its capital by reviewing annual and projected cash flow forecasts and by monitoring credit, liquidity and market risks, such as interest rate and foreign currency risks (as discussed in Part I, Item 3, Quantitative and Qualitative Disclosures About Market Risk), through measurement and analysis.

Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to meet an obligation. The company is primarily exposed to credit risk through its cash and cash equivalent deposits, which are held by external firms. The company invests its cash balances in its own institutional money market products, as well as with external high credit-quality financial institutions. These arrangements create exposure to concentrations of credit risk. As of June 30, 2025, our maximum exposure to credit risk related to our cash and cash equivalent balances is $922.7 million, of which $448.6 million is invested in affiliated money market funds. See Part I, Item 1, Financial Statements - Note 2, "Fair Value of Assets and Liabilities," for information regarding cash and cash equivalents invested in affiliated money market funds.

Liquidity Risk

Liquidity risk is the risk that the company will encounter difficulty in meeting obligations associated with its financial liabilities as they become due. The company is exposed to liquidity risk through its $1,883.9 million in total debt. The company actively manages liquidity risk by preparing cash flow forecasts for future periods, reviewing them regularly with senior management, maintaining a committed Revolving credit agreement, scheduling significant gaps between major debt maturities and engaging external financing sources in regular dialogue.

Effects of Inflation

Inflation can impact our organization primarily in two ways. First, inflationary pressures can result in increases in our cost structure, especially to the extent that large expense components such as compensation are impacted. To the degree that these expense increases are not recoverable or cannot be counterbalanced through pricing increases due to the competitive environment, our net income could be negatively impacted. Secondly, the value of the assets that we manage may be negatively impacted when inflationary expectations result in a rising interest rate environment. A decline in the values of AUM could lead to reduced revenues as management fees are generally calculated based upon the value of AUM.

Off Balance Sheet Commitments

See Part I, Item 1, Financial Statements - Note 10, "Commitments and Contingencies - Legal Contingencies," for more information regarding undrawn capital commitments.

Critical Accounting Policies and Estimates

There have been no changes to the critical accounting policies disclosed in our most recent Form 10-K for the year ended December 31, 2024. Critical accounting policies are those that require management’s most difficult, subjective or complex judgments and would therefore be deemed the most critical to an understanding of our results of operations and financial condition.

Recent Accounting Standards

See Part I, Item 1, Financial Statements - Note 1, "Accounting Policies - Accounting Pronouncements Recently Adopted.”

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