Executive Summary

Q3 2025 delivered broad-based strength: adjusted diluted EPS of $0.61 and GAAP diluted EPS of $0.66, driven by net long‑term inflows of $28.9B, record ending AUM of $2.125T, and adjusted operating margin expansion to 34.2% .
Results beat Wall Street consensus on adjusted EPS and revenue; EBITDA lagged consensus, reflecting mix and non‑operating items; impairment of intelliflo reduced EPS by ~$0.08, but tax favorability lowered the non‑GAAP tax rate to 11.2% .
Momentum remains strong across ETFs/Index, Fundamental Fixed Income, and China JV & India; fundamental equities posted outflows, consistent with secular headwinds; management cited continued positive operating leverage and balance sheet deleveraging (repayment of $260M term loans; plan to repay remaining $240M by month‑end; intent to redeem $500M note in Jan 2026) .
Near‑term catalysts: the adjourned QQQ modernization vote (Dec 5) with overwhelming favorable participation; expected ~4 bps net revenue/operating income uplift upon conversion; continued Barings partnership scaling private market offerings for U.S. wealth .

What Went Well and What Went Wrong

What Went Well

Strong organic growth: net long‑term inflows of $28.9B (7.9% annualized), with breadth across ETFs & Index (+$21.4B), China JV & India (+$8.1B), and Fundamental Fixed Income (+$4.1B); record AUM reached $2.125T .
Margin expansion and operating leverage: adjusted operating margin rose to 34.2% (from 31.2% in Q2), with adjusted operating income up 17.9% QoQ and 16.4% YoY, reflecting higher average AUM and disciplined expenses .
Strategic execution and balance sheet strength: repaid $260M bank term loans; zero revolver balance; continued share buybacks ($25M); plan to repay remaining $240M three‑year term loans by end of month and redeem $500M senior note in Jan 2026 .
“We reached record assets under management of $2.1 trillion with strong net long‑term inflows of nearly $29 billion... We continued to generate significant positive operating leverage and operating margin improvement...” — Andrew Schlossberg, CEO .

What Went Wrong

EBITDA miss vs consensus (see Estimates Context), driven by non‑operating items (e.g., $35.9M non‑cash impairment on intelliflo) and mix; GAAP operating margin remains below adjusted margin, reflecting pass‑through and classification effects .
Fundamental equities outflows of $5.0B, including accelerated redemptions from the developing markets fund (-$4.5B), amid U.S. secular headwinds in active equities .
Net revenue yield pressure continued (though stabilizing), as asset mix tilts toward ETFs/Index and fixed income; management noted overall net revenue yield of 22.9 bps with exit yield ~22.8 bps .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025	Q3 2025
Operating revenues ($USD Millions)	$1,593.0	$1,529.2	$1,515.5	$1,640.4
Net revenues (Non‑GAAP, $USD Millions)	$1,157.2	$1,108.7	$1,104.6	$1,186.3
GAAP diluted EPS ($)	$0.46	$0.38	($0.03)	$0.66
Adjusted diluted EPS ($)	$0.52	$0.44	$0.36	$0.61
Operating margin (%)	19.6%	18.1%	14.1%	16.5%
Adjusted operating margin (%)	33.7%	31.5%	31.2%	34.2%
Ending AUM ($USD Billions)	$1,846.0	$1,844.8	$2,001.4	$2,124.8

Segment flows (Q3 2025)

Investment Capability	Net Long‑Term Flows ($USD Billions)
ETFs & Index	21.4
Fundamental Fixed Income	4.1
Fundamental Equities	(5.0)
Private Markets	0.6
China JV & India	8.1
Multi‑Asset/Other	(0.3)
Global Liquidity (Money Market)	(6.5)
QQQ	2.3

KPIs (Q3 2025)

KPI	Value
Net long‑term inflows ($USD Billions)	28.9
Total net flows ($USD Billions)	26.1
Annualized long‑term organic growth rate (%)	7.9%
Average AUM ($USD Billions)	2,060.4
Average QQQ AUM ($USD Billions)	365.1
Headcount	8,368
Cash & Equivalents ($USD Millions)	973.1
Total Debt ($USD Millions)	1,624.6
Share repurchases	1.2M shares; $25M
Common dividend declared per share ($)	$0.21

Notes: EPS was reduced ~$0.08 by the $35.9M non‑cash impairment related to the intelliflo divestiture (closing expected in Q4) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Non‑GAAP effective tax rate	Q4 2025	N/A; Q3 guide ~26% (from Q2 call)	25–26%	Lower vs prior quarter’s indication
Alpha/Hybrid platform implementation costs	Q4 2025	$10–$15M (from Q2 call)	$10–$15M	Maintained
Three‑year term loans repayment	Oct 2025	“May begin repaying in H2 2025”	Repay remaining $240M by end of month	Accelerated
Senior note redemption	Jan 2026	N/A	Intent to redeem $500M	New
Total payout ratio (dividends + buybacks)	2025, 2026	Near 60% in 2025	Near 60% in 2025 and 2026	Extended
Common dividend	Q3 2025	$0.21 (Q2 2025)	$0.21	Maintained
QQQ structure and fee allocation	Post‑vote	~4 bps net uplift (prelim.)	~4 bps net uplift; vote adjourned to Dec 5	Maintained; timing updated

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025, Q1 2025)	Current Period (Q3 2025)	Trend
ETFs/Index growth	Q2: +$12.6B ETFs/Index ; Q1: +$16.3B	+$21.4B ETFs/Index; platform >$1T AUM milestone	Accelerating
Fixed income flows	Q2: +$2.8B fundamental; ~+$10B incl. ETFs/JV ; Q1: +$8.0B	+$4.1B fundamental; ~+$13B including ETFs & China JV fixed income	Improving breadth
China JV & India	Q2: +$5.6B ; Q1: +$2.2B	+$8.1B; China JV AUM $122B; 12 product launches	Strengthening
Private markets	Q2: mixed; private credit net outflows early; INCREF growth ; Q1: direct RE +$1.1B	+$0.6B; three CLO launches; INCREF >$4B with leverage	Stabilizing/up
Fundamental equities	Q2: (3.6)B outflows ; Q1: (7.0)B	(5.0)B outflows; developing markets fund repositioning	Negative; mixed
QQQ modernization	Q2: prelim. proxy; ~4 bps uplift ; Q1: HK cross‑listing	Dec 5 vote adjournment; overwhelming favorable votes	Progressing
Balance sheet deleveraging	Q2: anticipated loan repayments in H2	$260M repaid; plan to repay $240M by month‑end; redeem $500M senior note	Advancing
Alpha/Aladdin hybrid	Q2: Q3 costs $15–$20M; Q4 $10–$15M	Q3 costs ~$11M; Q4 $10–$15M; completion by end‑2026	On track
India transaction	—	$140–$150M proceeds; JV accounting shift	Repositioning

Management Commentary

“We delivered another strong quarter of broad-based progress… streamlin[ing] our business, driv[ing] profitability and margin expansion, build[ing] a stronger balance sheet, and continue to enhance shareholder returns.” — Andrew Schlossberg, CEO .
“Adjusted operating margin increased to 34.2%… We continued to strengthen the balance sheet… repaid $260 million of the three-year bank term loan… We intend to redeem the $500 million senior note in January.” — Allison Dukes, CFO .
On China JV: “Flows… were led by fixed income plus and our ETF funds… We launched 12 new products… including our first fixed income ETF.” — Andrew Schlossberg .
On QQQ: “Under the new structure… 18 bps fee will be recognized as investment management fees… Approximately 12 bps… will be recognized as third-party expense. Expected net impact to adjusted operating income of approximately 4 bps of QQQ AUM is unchanged.” — Allison Dukes .

Q&A Highlights

QQQ vote/process: Management cannot disclose quorum specifics but noted an overwhelming majority voting in favor; marketing and proxy solicitation expenses accrue in the fund and reclassification has no impact on operating income (~4 bps uplift unchanged) .
Expense dynamics: Variable expenses ~25% naturally; with management action, variability can reach ~30–35%, and non‑comp lines could be modestly higher in Q4 due to seasonality .
Fixed income/credit: October saw some softening in bank loans amid credit jitters, but overall demand and CLO pipeline remain healthy; Asia/EMEA driving longer‑duration demand .
Divestitures & capital allocation: India sale (cash proceeds $140–$150M) and intelliflo ($~100M proceeds) provide flexibility to delever and invest in growth (private markets, ETFs/active ETFs), with payout ratio near 60% in 2025–2026 .
Private markets partnership: Invesco/Barings launched the Invesco Dynamic Credit Opportunity Fund; MassMutual to support with up to $650M; targeting U.S. wealth channel interval structure; distribution built on Invesco’s platforms .

Estimates Context

Metric	Q4 2024	Q1 2025	Q2 2025	Q3 2025
Adjusted EPS – Consensus Mean ($)	0.474*	0.386*	0.403*	0.443*
Adjusted EPS – Actual ($)	0.52	0.44	0.36	0.61
Revenue – Consensus Mean ($USD Millions)	1,150.9*	1,112.9*	1,102.3*	1,183.9*
Revenue – Actual ($USD Millions)	1,593.0	1,529.2	1,515.5	1,640.4
EBITDA – Consensus Mean ($USD Millions)	400.7*	360.5*	384.1*	419.2*
EBITDA – Actual ($USD Millions)	358.3*	318.8*	271.2*	309.2*

Q3 2025: Adjusted EPS beat consensus ($0.61 vs $0.443)* and revenue beat ($1,640.4M vs $1,183.9M); EBITDA missed ($309.2M vs $419.2M). Impairment and classification effects (CIP/Great Wall adjustments) and mix contributed to EBITDA variance .
Values retrieved from S&P Global*.

Key Takeaways for Investors

Strong beat on adjusted EPS and revenue, coupled with margin expansion and record AUM, suggests estimate revisions higher for EPS and net revenues; watch for EBITDA recalibration given non‑operating items* .
Flows breadth is a positive structural narrative: ETFs/Index, China JV & India, and Fundamental Fixed Income are the growth engines; fundamental equities remain a headwind—monitor recovery initiatives and performance alpha .
Balance sheet de‑risking is a tangible catalyst: accelerated term loan repayment and planned senior note redemption improve leverage metrics and cash flow to equity .
QQQ modernization is a near‑term binary catalyst (Dec 5); upon conversion, expect ~4 bps uplift to net revenue/operating income from fee re‑allocation—no change to economics; marketing expense becomes a fund expense line .
Private markets distribution into U.S. wealth should scale (Barings partnership, INCREF traction); expect incremental AUM/fee diversification as platforms onboard .
Tax rate normalization: non‑GAAP effective tax rate expected to revert to 25–26% in Q4 (vs unusually low 11.2% in Q3 due to discrete items) .
Near‑term trading: stock sensitive to QQQ vote progress, flow momentum in ETFs/fixed income, and continued deleveraging; medium term thesis anchored on margin durability at ~low‑mid 30s adjusted levels and diversified flow engines .

Additional context: Preliminary month‑end AUM was $2,124.8B on Sept 30, 2025, with $11.9B net long‑term inflows in the month—supporting Q3 run‑rate strength .

Invesco Ltd. (IVZ)·Q3 2025 Earnings Summary