The following is a summary of the T. Rowe Price Group, Inc. (TROW) Q3 2024 Earnings Call Transcript:

Financial Performance:

• T. Rowe Price reported a Q3 2024 adjusted earnings per share of $2.57, a significant increase of over 18% from Q3 2023, driven by a rise in average AUM, higher adjusted operating income, and a lower effective tax rate.

• The company noted $12.2 billion in net outflows for the quarter, which, while an improvement from Q3 2023, was higher than the first half of 2024.

• Adjusted net revenues for Q3 amounted to $1.8 billion, reflecting a 7% increase from the previous year, driven by higher investment advisory revenue from increased average AUM. Adjusted operating expenses were up 3.6% primarily due to higher compensation and servicing fees in line with higher AUM.

Business Progress:

• T. Rowe Price is expanding its ETF business and innovating in the retirement solutions space with the introduction of new products like personalized retirement manager and managed lifetime income, designed to offer unique asset management and guaranteed monthly income for retirees.

• The firm continues to see strong growth and inflows into its target date franchise and is gaining traction in private and structured strategies, with important new capital commitments increasing by $3 billion this quarter, strengthening the firm's future growth prospects.

Opportunities:

• The firm is capitalizing on opportunities in ETFs, private credit, and retirement solutions, backed by strategic product launches and enhancements in these areas.

• Noted strong interest and upcoming strategies to expand globally, particularly in the APAC region, and to increase penetration in alternative investments and multi-asset strategies in the EMEA region.

Risks:

• Anticipates higher net outflows in Q4 2024 due to seasonal trends and specific large sub-advised variable annuity terminations, which could impact short-term asset management results. Continued challenges in the variable annuity space with expected declines in this market segment.

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