T. Rowe Price 10-Q 2025-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended June 30, 2025

OR

For the transition period from to

Commission File Number: 000-32191

T. ROWE PRICE GROUP, INC.

(Exact name of registrant as specified in its charter)

1307 Point Street, Baltimore, Maryland 21231

(Address, including Zip Code, of principal executive offices)

(410) 345-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares outstanding of the issuer’s common stock ($0.20 par value), as of the latest practicable date, July 30, 2025, is 219,715,241.

The exhibit index is at Item 6 on page 44.

PART I – FINANCIAL INFORMATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

The accompanying notes are an integral part of these statements.

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UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per-share amounts)

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OVERVIEW.

Our revenues and net income are derived primarily from investment advisory services provided globally to individual and institutional investors in a broad range of investment solutions across equity, fixed income, multi-asset, and alternatives capabilities. We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; trust services; and non-discretionary advisory services.

Investment advisory fees depend largely on the total value and composition of assets under our management. Accordingly, fluctuations in financial markets and in the composition of assets under management affect our revenues and results of operations.

We incur significant expenditures to develop new products and services and improve and expand our capabilities and distribution channels in order to attract new clients and additional investments from our existing clients. These efforts often involve costs that precede any future revenues we may recognize from an increase to our assets under management.

The investment management industry is evolving, facing challenging trends such as passive investments taking market share from traditional active strategies; continued downward fee pressure; demand for new investment vehicles to meet client needs; and an ever-changing regulatory landscape. In this regard, we have ample liquidity and resources that allow us to take advantage of attractive growth opportunities. Furthermore, we have developed a broad and ongoing plan to align our expense growth with anticipated revenue growth. As a result, we have initiated certain actions to reduce expense growth, realign resources, and invest in existing and future capabilities, while also helping to offset ongoing inflationary pressures on compensation and contractual spending. These investments include hiring investment professionals, distribution professionals, adopting new technologies, and offering new products to provide our clients with strong investment management expertise and services.

MARKET TRENDS.

Major U.S. stock market indexes rose in the second quarter. Equities plunged at the beginning of April in response to the U.S. reciprocal tariffs. However, the market rallied starting April 9, when the U.S. declared a 90-day pause on these tariffs for many countries. Equities continued to rise throughout May and June, as the U.S. and China agreed to a 90-day reduction in reciprocal and retaliatory tariffs while negotiating a trade deal. Stocks also overcame a short-lived spike in oil prices in June and a multi-day exchange of missile and drone attacks between Israel and Iran. As the quarter ended, investors were optimistic that trade deals with U.S. trading partners would be announced soon and hopeful that the Federal Reserve would resume lowering interest rates at some point in the months ahead.

Developed non-U.S. equity markets outperformed U.S. shares in U.S. dollar terms. In Europe, equity markets were broadly positive, helped in part by short-term interest rate cuts. UK shares lagged. Developed Asian markets were also broadly positive in dollar terms, with Japanese stocks gaining more than 11%.

Stocks in emerging markets also outperformed U.S. stocks in U.S. dollar terms. In the emerging Europe, Middle East, and Africa (EMEA) region, markets were broadly positive in dollar terms, though stocks in Türkiye (Turkey) lagged with a 3% gain. In emerging Asia, markets were also broadly positive in dollar terms. Equities in South Korea and Taiwan far outperformed the region, while Chinese stocks trailed with modest gains. In Latin America, markets were mostly positive in dollar terms.

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Returns of several major equity market indexes were as follows:

(1) Returns exclude dividends

Global bond returns were mostly positive in the second quarter of 2025. In the U.S., Treasury bill yields were little changed, as the Federal Reserve kept the federal funds target rate in the 4.25% to 4.50% range. Intermediate-term U.S. Treasury yields generally declined, but the 10-year U.S. Treasury note yield increased from 4.23% to 4.24%. The 30-year U.S. Treasury bond yield increased to a greater degree amid concerns about U.S. debts and budget deficits, and as Moody’s downgraded U.S. sovereign debt from AAA to AA1 in May.

In the investment-grade universe, sector performance was broadly positive. Non-agency commercial mortgage-backed securities and corporate bonds performed best, while asset-backed and mortgage-backed securities produced milder gains. Treasuries lagged. Tax-free municipal bonds trailed the broad taxable bond market, but high yield corporate bonds produced strong gains and outperformed investment-grade bonds.

Bonds in developed non-U.S. markets produced positive returns in U.S. dollar terms in the second quarter, as major non-U.S. currencies appreciated versus the U.S. dollar. In the eurozone, longer-term bond yields declined in many countries, as the European Central Bank (ECB) reduced its benchmark interest rates twice in the second quarter. In the UK, longer-term bond yields also decreased, as the Bank of England reduced its benchmark interest rate, the Bank Rate, from 4.50% to 4.25% in May. The euro rose more than 8% versus the U.S. dollar, while the British pound rose about 6%. In Japan, long-term government bond yields were little changed, as the Bank of Japan kept its benchmark interest rate at 0.50%. The yen rose about 3.5% versus the U.S. dollar. Emerging markets bonds produced positive returns in U.S. dollar terms. Bonds denominated in local currencies strongly outperformed dollar-denominated bonds in U.S. dollar terms, as most developing markets currencies appreciated versus the dollar.

Returns of several major bond market indexes were as follows:

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ASSETS UNDER MANAGEMENT.

Assets under management ended the second quarter of 2025 at $1,676.8 billion, an increase of $110.5 billion from March 31, 2025. The increase in assets under management during the second quarter of 2025 was driven by market appreciation and income, net of distributions not reinvested, of $125.

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There has been no material change in our market risks from those provided in Item 7A of the Form 10-K Annual Report for 2024.

Our management, including our principal executive and principal financial officers, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. Based on that evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures as of June 30, 2025, are effective at the reasonable assurance level to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, including this Form 10-Q quarterly report, is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive and principal financial officers, has evaluated any change in our internal control over financial reporting that occurred during the second quarter of 2025, and has concluded that there was no change during the second quarter of 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

For information about our legal proceedings, please see our Commitments and Contingencies footnote to our unaudited consolidated financial statements in Part 1 of this Form 10-Q.

There have been no material changes in the information provided in Item 1A of our Form 10-K Annual Report for 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(c) Repurchase activity during the second quarter of 2025 is as follows:

Shares repurchased by us in a quarter may include repurchases conducted pursuant to publicly announced board authorization, outstanding shares surrendered to us to pay the exercise price in connection with swap exercises of employee stock options, and shares withheld to cover the minimum tax withholding obligation associated with the vesting of restricted stock awards. Of the total number of shares purchased during the second quarter of 2025, 17,708 were related to shares surrendered in connection with employee stock option exercises and 2,701 shares were withheld to cover tax withholdings associated with the vesting of restricted stock awards.

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The following table details the changes in and status of the Board of Directors’ outstanding publicly announced board authorizations.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Not applicable.

The following exhibits required by Item 601 of Regulation S-K are filed herewith, except for Exhibit 32 that is furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on August 1, 2025.

T. Rowe Price Group, Inc.

By: /s/ Jennifer B. Dardis

Vice President, Chief Financial Officer and Treasurer

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