T. Rowe Price 10-Q 2025-09-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended September 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, October 29, 2025, is 218,237,000.

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 our assets under 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 strategies 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 and distribution professionals, adopting new technologies, and offering new products to provide our clients with strong investment management expertise and services.

MARKET TRENDS.

Major stock indexes rose in the third quarter of 2025. Initially, equities were supported by generally favorable economic data and second-quarter corporate earnings reports, as well as some positive tariff-related news in the form of U.S. trade agreements with other nations. In August, however, a weaker-than-expected nonfarm payroll employment report for July—which included significant downward revisions to employment data for May and June—raised fears of an economic slowdown. Nevertheless, equities were buoyed by growing hopes that the Federal Reserve would resume reducing short-term interest rates; the last rate cut was in December 2024. Indeed, Fed officials decided in mid-September to reduce the fed funds target rate by 25 basis points and indicated there could be two additional rate cuts by the end of the year.

Developed non-U.S. equity markets also produced gains. Markets in several eurozone countries advanced more than 8% in U.S. dollar terms, while UK shares rose about 6%. Developed Asian markets were mostly positive in dollar terms, led by Hong Kong, Singapore, and Japan.

Stocks in emerging markets outperformed equities in developed non-U.S. markets. In emerging Asia, Chinese stocks climbed more than 20%, helped by cash-rich households seeking higher returns. In Latin America, most markets produced positive returns in dollar terms. In the emerging Europe, Middle East, and Africa (EMEA) region, markets were broadly positive. South African shares surged more than 20%, helped by rising metals prices and mining industry strength.

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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 third quarter of 2025. In the U.S., Treasury bill yields declined in anticipation of a Federal Reserve interest rate cut in mid-September. On September 17, the central bank reduced the federal funds target rate from the 4.25% to 4.50% range to the 4.00% to 4.25% range. Intermediate- and long-term U.S. Treasury yields fell to a lesser extent. The 10-year U.S. Treasury note yield decreased from 4.24% to 4.16%.

In the investment-grade bond universe, sector performance was broadly positive. Corporate bonds and mortgage-backed securities performed best, while non-agency commercial mortgage-backed securities, asset-backed securities, and Treasuries lagged. Tax-free municipal bonds and high yield corporate bonds outperformed the taxable investment-grade bond market.

Bonds in developed non-U.S. markets produced slight negative returns in U.S. dollar terms. In the eurozone, longer-term bond yields rose in many countries, while the European Central Bank (ECB) kept key interest rates steady. In the UK, longer-term bond yields also increased, but the Bank of England reduced its key interest rate in August. The euro was little changed versus the greenback, but the British pound fell close to 2% versus the dollar. In Japan, long-term government bond yields increased, but the Bank of Japan kept the benchmark interest rate at 0.50%. The yen fell more than 2% versus the dollar. Emerging markets bonds produced positive returns in U.S. dollar terms. Dollar-denominated bonds outperformed bonds denominated in local currencies, as developing markets currencies were mixed versus the U.S. dollar.

Returns of several major bond market indexes were as follows:

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ASSETS UNDER MANAGEMENT.****(1)

Assets under management ended the third quarter of 2025 at $1,767.2 billion, an increase of $90.4 billion from June 30, 2025. The increase was primarily driven by market appreciation and income, net of distributions not reinvested, of $89.1 billion, offset by net cash outflows of $7.9 billion. Beginning on July 1, 2025, assets under management include managed account - model delivery portfolios assets, which had $9.2 billion in assets as of that date, and are reflected in the increase from June 30, 2025 and December 31, 2024.

For the nine months ended September 30, 2025, the increase in assets under management was primarily driven by market ap

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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 September 30, 2025. Based on that evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures as of September 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 third quarter of 2025, and has concluded that there was no change during the third 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 third 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 third quarter of 2025, 37,662 were related to shares surrendered in connection with employee stock option exercises and no 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.

(a) On October 28, 2025, the Board of Directors approved a plan to exit two owned office buildings in Owings Mills, Maryland. This decision is expected to result in a non-cash charge of up to $100 million in the fourth quarter of 2025, primarily reflecting the carrying value of the buildings. This decision was made in connection with the firm's broad and ongoing plan to reduce expense growth and realign resources to invest in existing and future capabilities.

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 October 31, 2025.

T. Rowe Price Group, Inc.

By: /s/ Jennifer B. Dardis

Vice President, Chief Financial Officer and Treasurer

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