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JANUS HENDERSON GROUP PLC (JHG)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was solid: GAAP revenue and adjusted EPS both beat S&P consensus; AUM hit a record $483.8B with sixth consecutive quarter of positive net inflows ($7.8B) and ~7% organic growth .
  • Adjusted diluted EPS of $1.09 vs $1.00 consensus (+$0.09) and GAAP revenue $700.4M vs $696.0M consensus (+$4.4M); EBITDA trailed consensus reflecting mix and one‑time items tied to the Aladdin transition .
  • Management maintained FY25 cost and tax guidance (comp/revenue 43–44%, non‑comp high single‑digit growth, tax 23–25%) and flagged ~1% adjusted operating cost step-ups in 2026–2027 from moving to Aladdin, with efficiencies from 2028 onward .
  • Potential stock catalysts: continued ETF/fixed‑income inflows, near‑term Q4 performance fees “at or above” last year, and the non‑binding $46/share acquisition proposal from Trian/General Catalyst under special committee review .

What Went Well and What Went Wrong

What Went Well

  • Net inflows of $7.8B, sixth consecutive positive quarter; AUM reached $483.8B (+6% q/q, +27% y/y), with organic growth ~7% and 74%/64%/65% of AUM outperforming on 3/5/10‑year horizons .
  • Adjusted diluted EPS rose to $1.09 (+21% q/q, +20% y/y) on higher average AUM and improved performance fees; adjusted operating margin expanded to 36.9% (+200 bps y/y) .
  • ETF and fixed‑income momentum: active fixed‑income ETFs delivered >$5B net inflows; five ETFs logged ≥$100M inflows (JAAA, JMBS, JSI, JBB, VNLA); positive firm‑wide organic net new revenue .

Management quote: “This quarter marks our sixth consecutive quarter of positive net flows, with a 7% organic growth rate…Our assets under management reached a record high of US$483.8 billion” .

What Went Wrong

  • Equities net outflows of $3.3B; UK outflows (primarily a single event) and tougher active equity backdrop; one‑year equity performance dipped due to weak Q4 last year despite strong YTD and long‑term metrics .
  • Net management fee margin declined to 42.7 bps (expected) given lower‑fee Guardian AUM integration; pipeline depletion from several fundings implies Q4 net flows likely below Q3 run rate .
  • GAAP included ~$28M Aladdin transition charge; adjusted operating expenses rose 6% q/q to $350M on higher profit‑based comp/LTI and strategic investments .

Financial Results

Core Financials vs prior periods and estimates (oldest → newest)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
GAAP Revenue ($USD Millions)624.8 621.4 633.2 700.4
Adjusted Revenue ($USD Millions)488.1 486.5 497.9 554.8
GAAP Operating Margin (%)26.4% 24.7% 25.9% 24.6%
Adjusted Operating Margin (%)34.9% 32.2% 33.5% 36.9%
Diluted EPS (GAAP, $)0.17 0.77 0.95 0.92
Adjusted Diluted EPS ($)0.91 0.79 0.90 1.09
Closing AUM ($USD Billions)382.3 373.2 457.3 483.8

Actual vs S&P Global Consensus (oldest → newest)

MetricQ3 2024Q2 2025Q3 2025
Adjusted EPS ($) Actual vs Consensus0.91 vs 0.7841*0.90 vs 0.8346*1.09 vs 1.0014*
GAAP Revenue ($M) Actual vs Consensus624.8 vs 599.8*633.2 vs 618.1*700.4 vs 696.0*
EBITDA ($M) Actual vs Consensus170.2* vs 167.4*172.3* vs 170.2*189.5* vs 207.2*

Values retrieved from S&P Global.*

Segment and Flow Detail (Q3 2025)

CapabilityNet Sales/(Redemptions) ($USD Billions)Average AUM ($USD Billions)
Equities(3.3) 249.1
Fixed Income9.7 147.6
Multi‑Asset~0.0 56.8
Alternatives1.4 16.0
Total7.8 469.5

KPIs (Q3 2025)

KPIValue
Performance Fees ($USD Millions)15.8
Net Management Fee Margin (bps)42.7
Adjusted Comp/Revenue Ratio (%)43.3
Dividend Declared (per share, $)0.40
Buybacks (Q3, $USD Millions / Shares)~$67 / ~1.5M
Cumulative Share Count Reduction since 2018~23%
Cash & Cash Equivalents ($USD Millions)996.9
Long‑Term Debt ($USD Millions)395.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Comp/Revenue RatioFY 202543–44% 43–44% Maintained
Non‑Comp Operating Expense GrowthFY 2025 vs FY 2024High single‑digit % High single‑digit % Maintained
Effective Tax Rate (Adjusted)FY 202523–25% 23–25% Maintained
Performance Fees OutlookQ4 2025N/AAt or above Q4 2024 total (dependent on performance) Raised vs neutral
Aladdin Transition – Adjusted Operating CostsFY 2026–2027N/A~+1% of adjusted operating costs in each of 2026–2027; efficiencies from 2028+ New (increase)
Share RepurchaseThrough AGM next year$200M program authorized ~$83M remaining; plan to complete by AGM next year Maintained plan
DividendQ3 2025$0.40/quarter $0.40 declared Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
AI/Technology InitiativesAnnounced Guardian partnership; ETF platform expansion Launched global AI ETF (JHAI) and EU CIT ETF JTXX; data‑driven distribution Expanding product breadth
Aladdin Platform TransitionNot discussed in Q1; no cost guidance in Q2Multi‑year transition; ~1% adj. opex increase 2026–27; efficiencies 2028+ Investment for scalability
Product Performance & MixQ2: strong fixed income/ETF inflows (Guardian) Fixed income +$9.7B; ETFs >$5B; U.S. mutual fund perf fees best in >10 yrs Strength in fixed income/ETFs
Regional FlowsQ2: U.S. intermediary gains; institutional + U.S. & APAC positive; EMEA mixed; UK outflows (single event) U.S. strength; selective EMEA
Regulatory/StrategicQ2: Guardian partnership ramp Special committee reviewing $46 cash proposal from Trian/GC Potential corporate action
EquitiesQ2: challenging active equity backdrop (3.3)B net outflows; near‑term underperformance tied to prior Q4; long‑term solid Near‑term headwinds persist

Management Commentary

  • “Sixth consecutive quarter of positive net flows…AUM reached a record high of US$483.8 billion, a 6% increase over the previous quarter and a 27% rise from a year ago.” — Ali Dibadj (CEO) .
  • “We anticipate an approximately 1% increase in adjusted operating costs for 2026 and 2027 from this transition [to Aladdin]…In 2028 and beyond, we expect…ongoing operational improvements and efficiencies.” — Prepared remarks .
  • “Adjusted diluted EPS was $1.09, up 20% from…Q3 2024…the increase…reflects higher operating income and operating leverage.” — Roger Thompson (CFO) .
  • “We returned nearly $130 million this quarter through dividends and share buybacks…shares outstanding reduced by almost 23% since 2018.” — Prepared remarks .

Q&A Highlights

  • Flows drivers: U.S. intermediary +$5.1B (9% organic growth); institutional +$3.1B (fourth consecutive positive quarter); improved gross sales across ETFs and fixed income, supported by data‑driven distribution and incentives .
  • Equity performance: one‑year dip attributed to poor Q4 last year; YTD and long‑term ahead of benchmarks/peers; market remains tricky for active equities .
  • Costs & Aladdin ROI: disciplined ROI framework; ~1% adj. opex uplift in 2026–27; focus on client service, future efficiencies; 2026 guidance next quarter .
  • Capital return and M&A: $200M buyback plan proceeding; ~$83M outstanding; 10b5‑1 plan unaffected by proposal; liquidity allows continued organic/inorganic investment .
  • CLO/bank loan volatility: active management reduced index exposure to stressed names; AAA/BBB CLO ETFs serve as price discovery; no signs of contagion in spreads .

Estimates Context

  • Q3 2025 beat on revenue ($700.4M vs $696.0M*) and adjusted EPS ($1.09 vs $1.0014*) . EBITDA missed ($189.5M* vs $207.2M*), reflecting mix (lower‑fee Guardian AUM) and a ~$28M Aladdin transition charge excluded from adjusted results .
  • Prior quarters also showed beats on revenue/EPS vs consensus, reinforcing estimate momentum; analysts may temper EBITDA forecasts and fee margin assumptions as Guardian AUM scales and Aladdin costs phase in .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Flow momentum broadened beyond Guardian: $7.8B net inflows, record AUM, and positive organic net new revenue signal durable distribution/product traction .
  • Earnings quality improved: adjusted operating margin 36.9% (+200 bps y/y) and adjusted EPS +20% y/y; revenue/adjusted EPS beats vs consensus support near‑term estimate revisions .
  • Mix shifts matter: net management fee margin fell to 42.7 bps with Guardian integration; model lower fee yields alongside expanding fixed‑income/ETF franchises .
  • Near‑term caution: management guided Q4 net flows below Q3 run rate due to pipeline depletion; performance fees likely strong but flows may normalize .
  • Cost outlook: plan for ~1% adjusted opex uplift in 2026–27 from Aladdin transition, with efficiency payback from 2028—factor into medium‑term margin trajectories .
  • Equity headwinds are cyclical: one‑year equity underperformance tied to prior Q4; long‑term track record remains competitive—watch active equity flow stabilization .
  • Event risk: special committee reviewing $46/share non‑binding bid could anchor valuation near proposal terms; ongoing buybacks/dividends provide downside support .

Appendix: Additional Data Points

  • Performance fees (Q3): $15.8M; U.S. mutual fund performance fees >$3M—the best in over 10 years .
  • Capital stewardship (Q3): Dividend $0.40, buybacks ~$67M (~1.5M shares); cash $997M vs debt $395M .
  • Investment performance: 74%/64%/65% of AUM outperforming on 3/5/10‑year; mutual fund AUM in top two Morningstar quartiles 83%/74%/82% across 3/5/10‑year .