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    IVZ
    Earnings call· Mar 2026(Q1 FY26)

    Invesco Q1 FY26 earnings call IVZ

    Apr 28, 2026 Source

    Executive summary

    Invesco Q1 FY26 — Strong Inflows and Operating Leverage

    Invesco delivered strong Q1 FY26 results, driven by significant net long-term inflows and robust operating leverage, with the operating margin expanding to 34.5%. The firm continues to prioritize strategic growth areas like ETFs, fixed income, and private markets, while also strengthening its balance sheet and increasing capital returns to shareholders. Management remains focused on disciplined execution and innovation to navigate evolving market conditions and drive profitable growth.

    Highlights

    5

    • Net long-term inflows of $21.8 billion, marking 11th straight quarter of inflows and 4% annualized organic growth.

    • Global liquidity inflows of $11.6 billion, ending with over $200 billion in AUM.

    • Adjusted diluted EPS of $0.57, up 30% YoY from $0.44.

    • Operating margin improved by 300 basis points YoY to 34.5%.

    • ETF and index AUM reached a record $638 billion (or over $1 trillion including QQQ), with $19 billion net inflows (11% annualized organic growth).

    Concerns

    4

    • Market volatility drove a $42 billion decline in AUM during the quarter.

    • Fundamental equity segment experienced net outflows of $2.4 billion, despite positive highlights.

    • Alternative credit saw net outflows of $400 million, driven by bank loan products.

    • Canadian business partnership expected to close end of Q2, resulting in a modest negative operating income impact of $5 million to $10 million per quarter for Q3/Q4 FY26.

    Guidance & targets

    8
    CategoryTargetConfidence
    Operating expenses
    $3.275 billion range
    high materiality
    High
    Non-GAAP effective tax rate
    25% to 26% range
    medium materiality
    High
    Total payout ratio (common dividends + share buybacks)
    near 60%
    high materiality
    High
    Hybrid investment platform implementation costs
    $10 million to $15 million range per quarter
    medium materiality
    High
    Incremental operating expense from hybrid platform AUM
    build towards $10 million a quarter
    medium materiality
    High
    Cost savings from hybrid investment platform
    at least $60 million
    high materiality
    High
    Operating expense variability
    approximately 25% variable
    medium materiality
    High
    Operating margin
    mid-30s on a path to high 30s
    high materiality
    High

    Segment performance

    8
    SegmentRevenueYoYQoQMargin
    Asia Pacific
    Produced very strong net inflows.
    Annualized organic growth: 17%
    		————
    EMEA
    Produced very strong net inflows.
    Annualized organic growth: 8%
    		————
    ETF and Index Capability
    Achieved record AUM and strong net inflows across diverse products. Launched 4 new active ETFs.
    Ending AUM: $638 billionEnding AUM (including QQQ): over $1 trillionNet inflows: $19 billionAnnualized organic growth: 11%
    		————
    Fundamental Fixed Income
    Strong attribution across geographies and channels, driven by institutional inflows in investment-grade products and fixed income SMAs.
    Net long-term inflows: $3.7 billionAnnualized organic growth: 5%
    		————
    China JV
    Demonstrated benefits of diversified platform, driven by Fixed Income Plus strategies. Launched 14 funds with $2.5 billion total AUM. Margins continue to improve.
    Record high AUM: $142 billionNet long-term inflows: $8.7 billionAnnualized organic growth: 31%Fixed Income Plus AUM: $40 billion
    		———high 50s to low 60s
    Private Markets
    Driven by direct real estate, particularly the real estate debt fund for U.S. wealth management. Modestly offset by net outflows in alternative credit ($400 million from bank loan products).
    Net inflows: $400 millionReal estate debt fund (Invesco Real Estate Income Trust) AUM: $5 billion
    		————
    Multi-asset capabilities
    Driven by institutional quantitative equity strategies.
    Net inflows: $4.7 billion
    		————
    Fundamental Equities
    Smallest net outflows in nearly 9 years. U.S. value equities turned to net inflows. Global Equity Income Fund was top-selling retail active fund in Japan. Included $1.2 billion net outflows from developing markets fund.
    Net outflows: $2.4 billionGlobal Equity Income Fund AUM: $23 billionGlobal Equity Income Fund net inflows: $3 billion
    		————

    Operational metrics

    30
    Assets Under Management (AUM)
    $2.2 trillionnearly the same level at the end of the fourth quarter
    Q1 FY26 end

    Held up well against market volatility, despite a $42 billion decline due to market weakness, offset by inflows.

    Assets Under Management (AUM)
    $2.3 trillion rangeincrease of over 5% versus quarter end
    April 2026

    Reflects strong market rebound in April, with growth across nearly all capabilities.

    Average long-term AUM
    nearly $2 trillionincrease of over $400 billion or 26% over last quarter
    Q1 FY26

    Included a full quarter of QQQ reclassification.

    Net long-term inflows
    $21.8 billion11th straight quarter of net inflows
    Q1 FY26

    Broad-based growth across active and passive strategies, wealth management and institutional channels.

    Global liquidity inflows
    $11.6 billion
    Q1 FY26
    Active net inflows
    nearly $15 billionstrongest quarter
    Q1 FY26

    Generated around the world.

    Institutional annualized organic growth
    in excess of 5%fifth consecutive quarter
    Q1 FY26

    Institutional demand remained strong.

    Active ETF platform AUM
    over $20 billion
    Q1 FY26 end

    Strengthens market position in high-demand segment.

    SMA platform AUM
    $37 billion
    Q1 FY26 end

    One of the fastest-growing SMA offerings in the U.S. wealth management market.

    Real estate debt fund AUM
    $5 billion
    Q1 FY26 end

    One of the fastest ramp-ups in the wealth channel for a commercial real estate credit product.

    Fundamental equity net outflows
    $2.4 billionsmallest we have seen in nearly 9 years
    Q1 FY26

    Included expected outflows from developing markets fund, but overall moderation.

    Active funds in top quartile
    46%
    3-year time horizon

    Based on peer performance.

    Active funds in top quartile
    nearly half
    5-year time horizon

    Based on peer performance.

    Active AUM beating benchmark
    over 70%
    5-year basis
    Net revenues
    $1.3 billion$155 million higher as compared to the same quarter last year
    Q1 FY26

    Largely from investment management fees driven by higher average AUM and QQQ reclassification.

    Adjusted operating margin
    34.5%300 basis point operating margin improvement year-over-year
    Q1 FY26

    Driven by positive operating leverage of 500 basis points.

    Adjusted diluted EPS
    $0.5730% improved mix
    Q1 FY26
    Net revenue yield
    22.9 basis pointsincreased over the fourth quarter
    Q1 FY26

    Largely due to QQQ reclassification to fee earnings, partly offset by divestitures.

    Exit net revenue yield
    22.8 basis points
    Q1 FY26 end
    Hybrid investment platform implementation costs
    $12 millionin line with our expectations and prior quarters
    Q1 FY26

    One-time costs.

    Incremental operating expense from hybrid platform AUM
    $4 million
    Q1 FY26

    Associated with AUM moved onto the hybrid platform.

    Non-GAAP effective tax rate
    close to 24%
    Q1 FY26
    Revolving credit facility drawn amount
    $1.1 billion
    Q1 FY26 end

    Driven by repurchasing $500 million of preferred stock in December and senior note redemption in January.

    Common share repurchases
    $40 millionincreasing the amount repurchased to $40 million or 1.6 million shares
    Q1 FY26

    Increased compared to prior quarters.

    Common share repurchase authorization
    $1 billion
    February 2026

    Authorized by the Board.

    Operating expense base variability
    approximately 25%
    ongoing

    In relation to changes in net revenue.

    Compensation as percent of revenue
    midpoint of that range
    FY26

    Expected for the full year.

    Third-party + distribution fees / management fees
    22.7%
    Q1 FY26

    Expected to hold with full impact of QQQ.

    Total liquidity resources
    —
    Q1 FY26

    Management expects to reduce the amount drawn on the revolver as cash flows allow, without prepayment penalties.

    Digital assets innovation
    —
    Q1 FY26

    Firm is focused on innovation across products and vehicles, such as active ETFs, SMA, models, customized solutions and digital assets.

    Product announcements

    4
    ProductTypeDetails
    4 new active ETFslaunch
    14 funds (China JV)launch
    Invesco Core+ Real Estate Trustlaunch
    QQQ (International expansion)expansion

    Deals & partnerships

    3
    BaringsInnovative partnership to further penetrate wealth management and defined contribution markets with private markets products.

    One of the recently announced partnerships to augment existing Invesco strategies.

    LGT CapitalInnovative partnership to further penetrate wealth management and defined contribution markets with private markets products.

    One of the recently announced partnerships to augment existing Invesco strategies.

    CI (Canadian business)Partnership in the Canadian business, involving a transition of AUM and a sub-advisory relationship.

    Transition of about $19 billion in AUM.

    Risks & headwinds

    6
    Heightened market volatilityQ1 FY26

    Drove a $42 billion decline in AUM during Q1 FY26.

    Mitigation: Benefits of broad scale, diversified global platform; strong net long-term inflows and liquidity inflows mostly offset market impact.

    Geopolitical uncertainty, sharp moves in energy prices, and changing interest rate expectationsQ1 FY26

    Weighed on public markets, contributing to heightened volatility.

    Mitigation: Diversified global platform helps navigate such environments.

    Competition in NASDAQ 100 ETFsOngoing

    NASDAQ expanded licensing to allow 2 additional U.S.-listed ETFs to track the NASDAQ 100.

    Mitigation: QQQ's dominant position supported by unmatched liquidity, tight spreads, deep options markets, and immense brand recognition; new competitors pay same licensing fee; belief that attention will create larger asset pool.

    Net outflows in fundamental equitiesQ1 FY26

    $2.4 billion net outflows in Q1 FY26.

    Mitigation: Smallest outflows in nearly 9 years; strong gross sales; U.S. value equities turned to net inflows; continued positive flows in global, international, and regional equities from Asia Pacific and EMEA.

    Net outflows in alternative creditQ1 FY26

    $400 million net outflows in Q1 FY26.

    Mitigation: Exclusively driven by bank loan products (BK ETF redemptions); Invesco's alternative credit platform has 0 software exposure, dry powder, diversification, and extensive experience; current turbulence has not impacted long-term views.

    Negative operating income impact from Canadian business divestitureQ3 and Q4 FY26

    $5 million to $10 million negative operating income impact per quarter.

    Mitigation: Expected to improve over time as the sub-advisory relationship with CI grows.

    What to watch in Q2 FY26

    5

    Canadian business operating income impact

    Q3 FY26
    CurrentNot yet impacted (expected to close end of Q2 FY26)
    Target$5M-$10M negative operating income impact per quarter

    Why it matters

    This will be the first quarter reflecting the financial impact of the Canadian business divestiture, which management expects to be negative initially.

    The only other thing I'd point to is just a reminder that we are entering into our partnership in the Canadian business. We expect that to close with CI at the end of the second quarter. And that is a transition of about $19 billion in AUM, and that has a modestly negative operating income impact for the last -- the third and the fourth quarter of this year is that will be a loss of operating income to the tune of kind of $5 million to $10 million, which we expect to improve over time⏳ as we continue to really execute the sub-advisory relationship with CI and grow that relationship overall.

    Q&A highlights

    7

    What are the reasonable expectations for securities lending funding from the QQQ product?

    Andrew Schlossberg stated that while securities lending is eligible for QQQ, the opportunities are not "super large" given the size and concentration of positions, and they don't see it as a huge opportunity.

    “Securities lending is definitely something we have eligible for the Q2. I mean, given the size and the concentration of some of those positions, the opportunities are there, but they're not super large. And we'll continue to evaluate ways, but that's not -- we don't see that as a huge opportunity.”

    asked by Brennan Hawken · answered by Andrew Schlossberg

    3 min read7 chapters

    Detailed Narrative

    01

    Strategic Priorities and Growth Drivers

    Invesco is focused on profitable organic growth by leveraging high-demand, scalable investment capabilities like fixed income and ETFs. The firm emphasizes its global footprint, particularly in Asia Pacific and EMEA, which collectively represent nearly $700 billion of AUM. Additionally, Invesco is expanding its private markets business into wealth management through existing strategies and new partnerships with Barings and LGT Capital, while also innovating in areas like active ETFs, SMAs, and digital assets.

    02

    First Quarter Asset Flow Performance

    Despite heightened market volatility🌐 driven by geopolitical uncertainty🌐 and changing interest rate expectations, Invesco achieved $21.8 billion in net long-term inflows, marking its 11th consecutive quarter of positive flows and an annualized organic growth rate of 4%. The firm also garnered $11.6 billion in global liquidity inflows, ending the period with over $200 billion in AUM. Growth was broad-based, spanning active and passive strategies, wealth management and institutional channels, and strong contributions from Asia Pacific (17% annualized organic growth) and EMEA (8% annualized organic growth).

    03

    ETF and Index Platform Scaling

    Invesco's ETF and index capability reached a record AUM of $638 billion, or over $1 trillion including the QQQ. The platform saw nearly $19 billion in net inflows, representing 11% annualized organic growth, driven by diverse products in equity and fixed income, including record inflows for its S&P 500 ETF and strong demand for QQQM. The firm launched four new active ETFs, expanding its active ETF platform to over $20 billion in assets, or $35 billion including index strategies.

    04

    QQQ Competitive Dynamics

    Management addressed the expansion of NASDAQ licensing for two additional U.S.-listed ETFs tracking the NASDAQ 100. Invesco asserts that its flagship QQQ fund's dominant position is protected by unmatched liquidity, tight spreads, deep options markets, and immense brand recognition built over 25 years, minimizing dependence on being the sole licensed product. The new competitor funds will pay the same 8 basis point licensing fee, and Invesco believes the increased attention will expand the overall asset pool for the benchmark.

    05

    China JV and Private Markets Momentum

    The China JV delivered another strong quarter with a record AUM of $142 billion and $8.7 billion in net long-term inflows, achieving a 31% annualized organic growth rate. This growth was primarily driven by Fixed Income Plus strategies and supported by the launch of 14 new funds. In private markets, Invesco posted $400 million in net inflows, led by direct real estate, particularly its real estate debt fund for the U.S. wealth management channel, which reached $5 billion in AUM in just over two years. The firm also launched the Invesco Core+ Real Estate Trust for U.S. defined contribution plans.

    06

    Expense Management and Operating Leverage

    Invesco demonstrated significant operating leverage, with adjusted operating income and margin showing substantial improvement year-over-year. The operating margin improved by 300 basis points to 34.5%. The firm expects FY26 operating expenses to be around $3.275 billion, with approximately 25% variability to net revenue changes. Management anticipates at least $60 million in cost savings from its hybrid investment platform in CY27, with run-rate savings building throughout the year.

    07

    Capital Management and Balance Sheet Strength

    The company continued to strengthen its balance sheet, redeeming a $500 million senior note in January. It increased common share repurchases to $40 million (1.6 million shares) in Q1, and the Board authorized an additional $1 billion in share repurchases. Invesco targets a total payout ratio of nearly 60% for FY26, combining common dividends and buybacks, and expects leverage ratios to improve as the year progresses.

    AI-generated summary of the company’s earnings call. Not investment advice.