Invesco Ltd. Q4 FY2025 earnings call

• Recapitalized balance sheet by pulling forward $1.5 billion preferred stock, enabling deleveraging. - Made progress in moving to hybrid alpha investment platform, onboarding assets and on pace to finish by end 2025. - Completed sales of Intelliflo, majority interest in Indian asset management business, and announced strategic partnership with CI for Canadian business. - Accelerated private markets platform growth with partnerships like with Barings and LGT, launching new products. - Modernized QQQ ETF, with fund shareholders paying lower fees and earning revenue on over $400 billion AUM.

In 2025, net revenue grew 6%. ETF and index investment capability had record revenues, growing top line by 22%. Asian and EMEA regions combined revenue was up 13% for the year. Fundamental equity revenue was flat to prior year but up 4% from 2023. Fourth quarter saw strong net long-term inflows of $19 billion, resulting in AUM of $2.2 trillion. China JV reached record-high AUM of $132 billion with $8.9 billion net long-term inflows. Private markets posted $300 million net inflows driven by direct real estate. Fundamental equities had overall net outflows but some regional positive flows.

• Continue to actively manage balance sheet and return capital to shareholders, anticipate increasing common share repurchases in 2026. - Hybrid platform implementation costs are expected to trend towards 0 in 2027. - Expect operating margin to continue expanding in 2026 with positive operating leverage.

• Market dynamics changes could impact business performance. - Deployment challenges in private credit due to fewer transactions in current environment. - Short-term operating income impact from Canadian business transformation starting in third quarter.

Q: Bill Katz with TD Cowen on capital return and M&A.

A: Prioritize common share buybacks and investing in own business, open to M&A if right fit.

Q: Brennan Hawken with BMO Capital Markets on net revenue yield and expense ratio.

A: QQQ addition helps stabilize net revenue yield, comp ratio expected to be in high end of historical range.

Q: Glenn Schorr with Evercore ISI on private market strategy and branding.

A: Partnerships完善 product capability, branding with own brand mainly.

Q: Alexander Blostein with Goldman Sachs on 2026 expenses and strategic moves.

A: $3.2 billion is starting point, strategic focus on execution of existing initiatives.

Q: Daniel Fannon with Jefferies on China JV outlook.

A: China JV benefits from market dynamics, growth in balanced funds.

Q: Brian Bedell with Deutsche Bank on Canada business impact and defined contribution traction.

A: Canadian business has short-term income drag, private markets in DC has traction in non-US regions.

Q: Benjamin Budish with Barclays on Canada business cash flow and timeline.

A: Cash flow impact is immaterial, timeline shows third quarter start and improvement over time.