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Invesco Ltd. (IVZ)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid organic growth and profitability: net long‑term inflows of $17.6B, GAAP operating margin 18.1% and adjusted operating margin 31.5% . Adjusted diluted EPS was $0.44 and GAAP diluted EPS was $0.38 .
  • EPS beat Wall Street consensus (Primary EPS $0.386*) while revenue printed above SPGI consensus due to basis differences (GAAP operating revenues $1.53B vs consensus $1.11B*, while company’s net revenues were $1.11B—near consensus) . Values retrieved from S&P Global.
  • Capital return stepped up: common dividend raised to $0.21 and $25M of buybacks; announced $1B repurchase of preferred stock (expected May close) with $0.13 run‑rate EPS accretion post term‑loan repayment by 2029 .
  • Strategic catalysts: new private credit partnership with Barings (MassMutual subsidiary) targeting U.S. wealth channels, supported by $650M initial seed/co‑investment from MassMutual .

What Went Well and What Went Wrong

What Went Well

  • Broad-based organic growth: $17.6B net long‑term inflows (ETFs & Index +$16.3B; Fundamental Fixed Income +$8.0B; China JV & India +$2.2B), with EMEA/Americas inflows of $15.0B/$3.0B .
  • Profitability improved YoY: adjusted operating income +17.9% to $349.5M, adjusted margin up >300 bps to 31.5%; GAAP operating income +30.1% YoY . CEO: “positive operating leverage of over 500 basis points… improving our operating margin by over 330 basis points to nearly 32%” .
  • Capital actions: dividend increase to $0.21/share; $25M buybacks; $1B preferred repurchase and Barings partnership—EPS accretive and strengthens balance sheet flexibility .

What Went Wrong

  • Sequential revenue/earnings softness vs Q4: operating revenues −4.0% QoQ; GAAP operating income −11.0% QoQ; adjusted diluted EPS $0.44 vs $0.52 in Q4—seasonal performance fee decline and two fewer days impacted revenues .
  • Fundamental Equities outflows persisted (−$7.0B), and Asia Pacific posted modest net long‑term outflows (−$0.4B) on a capability basis; ETF demand cooled in late quarter/April amid volatility .
  • Net market losses reduced AUM by $42.2B in the quarter; net revenue yield ticked down with mix shift, and adjusted tax rate rose vs Q4 (24.4% vs 22.2%) .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Operating revenues ($USD Millions)$1,515.4 $1,593.0 $1,529.2
Net revenues ($USD Millions)$1,104.3 $1,157.2 $1,108.7
Operating income ($USD Millions)$100.5 $311.7 $277.3
Operating margin (%)6.6% 19.6% 18.1%
Adjusted operating income ($USD Millions)$348.8 $390.1 $349.5
Adjusted operating margin (%)31.6% 33.7% 31.5%
Diluted EPS (GAAP) ($)$0.12 $0.46 $0.38
Adjusted diluted EPS ($)$0.44 $0.52 $0.44
KPIsQ3 2024Q4 2024Q1 2025
Net long‑term flows ($USD Billions)$16.5 $25.6 $17.6
Ending AUM ($USD Billions)$1,795.6 $1,846.0 $1,844.8
Average AUM ($USD Billions)$1,742.0 $1,824.4 $1,880.8
Annualized long‑term organic growth rate5.2% 7.8% 5.3%
Headcount8,524 8,508 8,495
Net Long‑Term Flows by Capability ($USD Billions)Q3 2024Q4 2024Q1 2025
ETFs & Index+17.7 +29.6 +16.3
Fundamental Fixed Income+5.9 (0.8) +8.0
Fundamental Equities(6.3) (6.0) (7.0)
Private Markets(0.3) +0.8 (0.8)
China JV & India / APAC Managed(0.8) +3.5 +2.2
Multi‑Asset/Other+0.3 (1.5) (1.1)
Global Liquidity (Money Market)(7.9) +25.3 +8.5
QQQ (Trust flows)+2.9 +10.3 +5.1

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non‑GAAP effective tax rateQ1 2025~25% (high end of range) 24.4% actual in Q1; Q2 2025 guided 25%–26% Raised (Q2 guide)
Dividend per common shareOngoing$0.205 (Q4 2024 declared) $0.21 (Q1 2025 declared) Raised
Share repurchases2025Regular program; ~$25M in Q4 Continued regular repurchases; $25M in Q1 Maintained
Preferred stock2025 H1Ongoing discussions $1B repurchase announced; May close; term loans fund at ~5.5%–5.75%; EPS run‑rate accretion $0.13 post 2029 New transaction (accretive)
Alpha platform implementation2025~$15M/Q4 2024; 2025 +$20–$25M YoY total Alpha costs $10–$15M per quarter implementation; second wave in H2’25; benefits post 2026–2027 Maintained timetable
Capital returns (payout ratio)2025Target closer to 60% in 2025 Expect total payout ratio to move closer to 60% in 2025 Maintained

Earnings Call Themes & Trends

TopicQ3 2024 (Prev)Q4 2024 (Prev)Q1 2025 (Current)Trend
ETFs & Index momentumNear‑record inflows; factor & BulletShares strong; EMEA ETF flows ~$5B Record AUM; QQQ inflows $10B; active ETF expansion Strong Q1; U.S. QQQM near record $4B; EMEA ETFs +$8B; cooled in March/April amid volatility Still strong, some short‑term cooling
Fixed income demand+$6B inflows; institutional 70% of volume Modest outflows; stable value headwind; SMA fixed income growth +$8B inflows; SMA ~$30B AUM, 25% growth; demand for IG/munis/ultra‑short Strengthening
Fundamental equitiesOutflows moderating to ~$1–2B/qtr YoY net revenues +10% with market gains −$7.0B outflows; modest EMEA/APAC inflows; focus on performance Pressure persists
APAC/ChinaAPAC clients +$5B; IGW fee pressure; stimulus tailwinds late Q3 APAC rebound +$3.5B; China JV product launches China JV & India +$2.2B; 6 new products; resilience in April; cross‑listing QQQ in HK Improving
Alpha platformCosts rising to $15M/Q4; benefits post 2026 First small wave moved; 2025 Alpha costs +$20–$25M YoY $10–$15M/quarter in 2025; second wave H2’25; benefits in 2026–2027 On track
Capital returnsBuybacks resumed; net cash position Net cash, dividend $0.205, buybacks $25M Dividend raised; buybacks $25M; payout ~60% in 2025 Accretive actions continue
Private marketsINCREF gaining traction; institutional real estate dry powder $5B Wealth platform additions; redemptions easing New Barings partnership to scale private credit in U.S. wealth; $650M seed/co‑invest Expanding into wealth

Management Commentary

  • CEO strategic clarity and operating leverage: “We delivered over 5% long‑term organic growth… an 18% increase in operating income and positive operating leverage of over 500 basis points… improving our operating margin by over 330 basis points to nearly 32%.”
  • Capital returns and preferred repurchase: “We executed share buybacks… announced an increase in the quarterly common stock dividend… announced the $1 billion repurchase of our preferred stock… and an expanded strategic partnership… MassMutual will also provide seed capital…”
  • Barings partnership focus: “Near‑term focus… delivering differentiated… private credit‑oriented income solutions… leveraging both Invesco and Barings capabilities… MassMutual intends to support… with an initial investment of $650 million.”
  • CFO on preferred economics: “Term loans… rate in the 5.5%–5.75% range… after‑tax cost 4.2%–4.4%… saves $59M annual preferred dividends… EPS accretion reaches $0.13 on a run rate basis once loans are repaid by mid‑ to late 2029.”

Q&A Highlights

  • Preferred stock repurchase: MassMutual agreed to $1B repurchase; remaining ~$3B subject to future discussions; MassMutual capped at ~22.5% common stake under shareholder agreement .
  • Private markets rollout: Initial Barings partnership products focus on private credit; Invesco as distributor/operator; revenue sharing undisclosed; timing “quarters from now” with existing distribution infrastructure .
  • Expense discipline and variability: ~25% variable w/o intervention; 30%–35% with management actions; seasonal payroll tax ~$15M in Q1; ongoing Alpha costs $10–$15M/quarter in 2025 .
  • Regional flows/caution: Investors stayed invested but more defensive in April; fixed income shorter duration preference; Europe/Asia flows more resilient vs U.S. .
  • SMA momentum: Fixed income SMAs several dozen strategies on major platforms; AUM near $30B, 25% annualized growth .

Estimates Context

MetricQ1 2025 ConsensusQ1 2025 Actual# of Estimates
Primary EPS ($)0.386*0.44*12*
Revenue ($USD Millions)1,112.9*1,529.2*5*
  • EPS beat: Adjusted diluted EPS $0.44 vs Primary EPS consensus $0.386*; GAAP diluted EPS was $0.38 (inline with consensus), indicating the Street likely tracked adjusted EPS for “Primary” .
  • Revenue basis difference: Company emphasizes non‑GAAP net revenues ($1,108.7M) which were near the consensus $1,112.9M*, while SPGI “Revenue” actual reflects GAAP operating revenues ($1,529.2M). This creates an apparent beat on GAAP revenue vs consensus that likely intended net revenues .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Organic growth durable: $17.6B net long‑term inflows driven by ETFs, fixed income, and China JV/India offsets equity outflows; supports near‑term revenue stability despite volatility .
  • Profitability trajectory intact: Adjusted margins >31% with YoY operating leverage; seasonal Q1 softness vs Q4 but trend favorable into H2 if flows persist and markets stabilize .
  • Capital return and accretion: Dividend raised to $0.21 and regular buybacks; $1B preferred repurchase improves flexibility and is EPS‑accretive as term loans amortize (run‑rate +$0.13 post 2029) .
  • Private markets as growth engine: Barings partnership + $650M seed/co‑investment accelerates private credit offerings in wealth channels; expect product launches over coming quarters .
  • Watch Fundamental Equities: Continued outflows (−$7.0B) remain the key headwind; progress on performance and packaging (active ETFs, SMAs) will be critical to narrow outflows .
  • Regional mix: EMEA/APAC resilience and China JV product growth diversify U.S. equity headwinds; cross‑listed QQQ in Hong Kong broadens reach .
  • Risk/near‑term setup: Market volatility cooled ETF demand in late quarter/April; net revenue yield pressured by mix; near‑term trading catalysts include preferred closing and any early Barings product approvals .

Additional Data – Estimates vs Periods

MetricQ1 2025
Primary EPS Consensus Mean ($)0.386*
Primary EPS Actual ($)0.44*
Primary EPS – # of Estimates12*
Revenue Consensus Mean ($USD Millions)1,112.9*
Revenue Actual ($USD Millions)1,529.2*
Revenue – # of Estimates5*

Values retrieved from S&P Global.

Notes and Sources

  • Q1 2025 press release and detailed financials: operating results, flows, margins, EPS, AUM .
  • Q1 2025 8‑K with Exhibit 99.1 confirmed press release content and reconciliations .
  • Q1 2025 earnings call transcript: strategic commentary, Barings partnership details, preferred repurchase economics, expense/tax guidance .
  • Related press: preferred stock repurchase and Barings partnership ; AUM update .
  • Prior quarters (trend analysis): Q4 2024 press/call ; Q3 2024 press/call .