Asked how Invesco won the Superstate tokenized treasury strategy management given the previous manager's liquidity management expertise.

Andrew Schlossberg cited Invesco's $220 billion global liquidity franchise, commitment to digital asset innovation, and vast institutional and retail distribution as key factors. “I mean we have a $220 billion global liquidity franchise. We're managing funds for decades. So we do have a lot of strength and capability in the liquidity side, so maybe it starts with that.”

Asked for an update on incremental margin or longer-term margin targets, and savings from AlphaGen (hybrid platform) implementation.

Allison Dukes stated the objective is to consistently deliver in the high 30s for operating margin. She reiterated guidance for $15 million quarterly implementation costs in H2 FY26 and incremental platform expenses building to $10 million per quarter. Post-implementation, the focus will be on further expense reduction in 2027. Andrew Schlossberg added that organic growth in ETFs, SMAs, fixed income, and cash scales well. “I would say near medium-term operating margin target is to continue to expand and consistently deliver in the high 30s. That's the focus.”

Asked about prioritization of capital return (buybacks, dividends, M&A, preferred stock reduction) given deleveraging and free cash flow.

Allison Dukes confirmed targeting a 60% payout ratio, continuing buybacks and modest dividend increases. They aim to further reduce the revolver balance before addressing more preferred stock, which requires mutual agreement with MassMutual. Organic growth opportunities are prioritized, but inorganic opportunities are always evaluated against them. Andrew Schlossberg noted $200 billion in net long-term inflows organically over 2 years and active engagement in partnerships and divestitures. “Yes, we are continuing to target a 60% payout ratio. We're doing that in an expanding sort of EPS environment.”

IVZ

Invesco (IVZ) Q2 FY26 earnings call: guidance and Q&A

Q: Asked about willingness to adjust QQQ fee given competitor products and potential expense offsets.

Management emphasized QQQ's 25-year history, brand recognition, scale, liquidity, and total cost of ownership benefits (tight bid-ask spreads, deep liquidity, $0.5 trillion notional options). They highlighted high switching costs due to low tax basis for many shareholders and noted QQM's success didn't slow QQQ growth. They stated they would not have a short-term competitive reaction and would focus on long-term client outcomes and product differentiation. Custodian fees are long-term contracts with Bank of New York. “We're not going to have a short-term competitive reaction. I think we've been in this for a long time, we're going to be in it for a long time, and we're really focused on that total client experience, as Andrew was discussing.”

Earnings call· Jun 2026 (Q2 FY26)· Financials· Jul 28, 2026

Source: earnings call transcript

Executive summary

Invesco Q2 FY26 — Record Inflows and Margin Expansion

Invesco delivered a strong quarter, achieving record net long-term inflows and AUM, driven by its diversified global platform and broad product suite. The firm demonstrated significant operating leverage, expanding its adjusted operating margin to 37.5% while continuing to strengthen its balance sheet through debt reduction and share repurchases. Strategic initiatives in ETFs, SMAs, and private markets are resonating with clients, positioning Invesco for continued profitable growth despite ongoing outflows in fundamental equities.

Highlights

Record net long-term inflows of $45.1 billion in Q2 FY26, marking the 12th straight quarter of net inflows and representing nearly 9% annualized organic growth.
Record AUM of $2.5 trillion at quarter-end, a 14% increase QoQ and 23% YoY.
Adjusted operating margin expanded by 300 bps QoQ to 37.5% in Q2 FY26, and by 630 bps YoY.
Net debt reduced by over $450 million in Q2 FY26, improving the leverage ratio (inclusive of preferred stock) by 0.04x QoQ to 1.9x.
Year-to-date net inflows of $67 billion, representing a 7% annualized organic growth rate, and 17% increase in net revenue over the same period last year.

Concerns

Fundamental equities segment remained in net outflows of $7.7 billion in Q2 FY26, despite some positive highlights.
Multi-asset capability had modest net outflows for the quarter due to balanced risk allocation strategies remaining out of favor.

Guidance & targets

Category	Target	Timeline	Confidence
Hybrid investment platform implementation costs	closer to $15 million per quarter medium materiality	H2 FY26	High
Incremental expense related to AUM on hybrid platform	build towards $10 million per quarter medium materiality	later this year · FY26	High
Non-GAAP effective tax rate	25% to 26% range medium materiality	Q3 · FY26	High
Leverage ratios	further improvement high materiality	remainder of the year · FY26	High
Total payout ratio	near 60% high materiality	going forward	High
Operating margin target	continue to expand and consistently deliver in the high 30s high materiality	near medium-term	High
Comp to revenue ratio	40% medium materiality	FY26	High
Distribution ratio	22.7% to 23% range medium materiality	going forward	High
Hybrid investment platform implementation expenses	start to taper off medium materiality	Q1 · FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
ETF and Index Offering Meaningfully scaling and diversifying platform to meet evolving client demand. Garnered net inflows across diverse products. Ending AUM: $753 billionNet inflows: $30 billionAnnualized organic growth: 17%Net inflows from Qs innovation suite, quality and momentum equity factor funds: $7 billionNet inflows in EMEA region: nearly 1/3 of total ETF net inflowsActive ETFs AUM: $25 billionActive ETFs products: >40AUM including index strategies executed by active teams: >$40 billion	—	—	—	—
QQQ Fund Attracted strong interest, reflecting competitively advantaged position, unmatched liquidity, tight spreads, and deep options/derivative markets. Net inflows: $14 billionAnnualized organic growth: 12%AUM from cross-listings in Hong Kong and Tokyo: over $10 billion	—	—	—	—
Fundamental Fixed Income (ex-ETF & China JV) Demand remained robust. When including fixed income flows from ETF and China JV, overall asset class net long-term inflows were $14 billion (11% annualized organic growth). Net inflows: $0.4 billion	—	—	—	—
U.S. Wealth Management SMA Platform One of the fastest-growing SMA offerings in the market, with growth in individual SMAs from U.S. wealth management clients. AUM: nearly $40 billionAnnualized organic growth: 23%	—	—	—	—
China JV Growth underpinned by scale and improving macro stability. Diversified product line allows adaptation to changing client needs. Record high AUM: $163 billionNet long-term inflows: $6.9 billionAnnualized organic growth: 22%New funds launched: 11Net inflows from new funds: $1.2 billion	—	—	15% (AUM)	—
Private Markets Return to demand for BKLN ETF and inflows into CLO products. Strong demand for private credit solutions globally. Organic growth opportunities amplified by partnerships. Net inflows: $1.9 billion	—	—	—	—
INCREF (Real Estate Debt Fund) Led private real estate results, continuing to gain scale and assets for U.S. wealth management clients. AUM (including leverage): over $6 billionAnnualized organic growth: 8% (Private Real Estate)	—	—	—	—
Multi-Asset Capability Continued inflows in systematic equity offset by outflows from balanced risk allocation strategies. Net outflows: modest	—	—	—	—
Fundamental Equities Positive net inflows from Asia Pacific clients, driven by global equity income fund. Second consecutive quarter of net inflows in U.S. value equity strategies. Outflows included large idiosyncratic liquidations. Net outflows: $7.7 billionNet inflows from Henley Global Equity Income Fund: nearly $3 billionHenley Global Equity Income Fund AUM: $28 billionDeveloped markets fund outflows: $0.5 billion	—	—	—	—
APAC Region Produced very strong net inflows. Annualized organic growth: 10%	—	—	—	—
EMEA Region Produced very strong net inflows. Annualized organic growth: nearly 7%	—	—	—	—

IVZ operating KPIs by quarter

IVZ operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change vs prior quarter
Long-term net inflows	$21.8B Net long-term inflows were $21.8 billion, marking the 11th straight quarter of net inflows and representing annualized organic growth of 4%. Source: earnings call transcript	$45.1B Net long-term inflows during the period were a record $45.1 billion, marking the 12th straight quarter of net inflows and representing annualized organic growth of nearly 9%. Source: earnings call transcript	+106.9%
Assets under management (AUM) Global Liquidity	$200B+ It is also worth noting that we generated $11.6 billion in global liquidity inflows and we ended the period with over $200 billion in AUM. Source: earnings call transcript	$215B Additionally, we generated $13.2 billion in global liquidity inflows ending the period with $215 billion in AUM. Source: earnings call transcript	—
Assets under management (AUM) Active ETF	$20B+ We have built a robust active ETF platform currently managing over $20 billion in assets, which increases to more than $35 [ billion ] when you include index strategies implemented by our active teams. Source: earnings call transcript	$25B We currently manage $25 billion in active ETFs across more than 40 products and the AUM base increases to more than $40 billion when including index strategies that are executed by our active investment teams. Source: earnings call transcript	—
Long-term net inflows Fundamental Fixed Income	$3.7B So let's move on to fundamental fixed income were regarded a very healthy $3.7 billion in net long-term inflows or 5% annualized organic growth with strong attribution across geographies and channels. Source: earnings call transcript	$400M While we report on this slide, net inflows of a modest $0.4 billion for the quarter, when you widen the scope to include the fixed income flows from our ETF and China JV, it expands our overall asset class net long-term inflows to $14 billion during the quarter or 11% annualized organic growth. Source: earnings call transcript	-89.2%
Assets under management (AUM) SMA	$37B Our entire SMA platform, which also includes a portion of equity assets, now stands at $37 billion in AUM. Source: earnings call transcript	<$40B Our entire US wealth management SMA platform which also includes a portion of equity assets now stands at nearly $40 billion in AUM. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
6 new active ETF launches	launch	this year
Tokenized treasury strategy	launch	—
7 new BulletShares lineup funds	launch	During the quarter
5 ETFs in EMEA region (including 2 new active funds)	launch	During the quarter
11 new funds (China JV)	launch	this quarter

Deals & partnerships

Superstate Invesco became manager of Superstate's first tokenized treasury strategy.

Leverages Invesco's global liquidity franchise and commitment to digital asset innovation.

Barings Private market partnership to accelerate growth in U.S. private wealth and defined contribution markets.

Completed first product initiatives at the beginning of this year, with more product launches expected later this year.

LGT Capital Partners Private market partnership to accelerate growth in U.S. private wealth and defined contribution markets.

More product launches expected later this year.

CI CI's acquisition of Invesco's Canadian products. long-term strategic partnership

Successfully completed during the second quarter, redefining Invesco's position in Canada from full ownership to subadvisor.

Risks & headwinds

Ongoing macroeconomic and policy uncertainty current

investor capital remaining in motion across the industry, albeit more narrowly focused

Mitigation:Broad product suite and global reach resonating with clients.

Fundamental equities net outflows Q2 FY26

$7.7 billion in Q2 FY26

Mitigation:Focus on strengthening long-term investment quality through talent, risk management, and platform tool enhancements; improved performance beginning to be seen; bringing active strategies into other formats like active ETFs.

Multi-asset net outflows Q2 FY26

modest net outflows

Mitigation:Offset by continued inflows in systematic equity offerings.

Near-term volatility and heightened headline risk in credit markets near-term

null

Mitigation:Credit fundamentals remain broadly intact, spillover risk into structured loans limited. Favorable position with dry powder, diversification, and extensive experience.

Market environment for active equities future

null

Mitigation:Improving performance and product quality, bringing active strategies into other formats like active ETFs.

What to watch in Q3 FY26

Hybrid investment platform implementation costs

H2 FY26 and Q1 FY27

Current $14 million in Q2 FY26

Target Closer to $15 million per quarter, then tapering off in Q1 FY27

Why it matters

Indicates progress on a transformational project expected to yield organizational benefits and expense savings.

Regarding the hybrid implementation platform cost for the remainder of 2026, we expect quarterly onetime implementation cost to run closer to $15 million per quarter in the second half of this year with the push to have implementation completed by year-end. ... I would expect implementation expenses to start to taper off in the first quarter.

Find out whether IVZ delivers this. Inve re-checks your case every morning.

Q&A highlights

Asked about willingness to adjust QQQ fee given competitor products and potential expense offsets.

Management emphasized QQQ's 25-year history, brand recognition, scale, liquidity, and total cost of ownership benefits (tight bid-ask spreads, deep liquidity, $0.5 trillion notional options). They highlighted high switching costs due to low tax basis for many shareholders and noted QQM's success didn't slow QQQ growth. They stated they would not have a short-term competitive reaction and would focus on long-term client outcomes and product differentiation. Custodian fees are long-term contracts with Bank of New York.

“We're not going to have a short-term competitive reaction. I think we've been in this for a long time, we're going to be in it for a long time, and we're really focused on that total client experience, as Andrew was discussing.”

asked by Patrick Davitt · answered by Allison Dukes

2 min read 6 chapters

Detailed narrative

Strategic Priorities and Innovation

Invesco is executing against strategic priorities, including product line management and innovation, with over 50 new products launched this year across regions, including 6 new active ETFs and a tokenized treasury strategy with Superstate. Partnerships with Barings and LGT Capital Partners are accelerating growth in private markets, while changes in India and Canada have enhanced focus and revenue opportunities.

These efforts contribute to a more streamlined business, driving profitability and margin expansion.

QQQ Fund Performance and Expansion

The QQQ fund, following its successful conversion, generated an incremental $130 million in net revenues in H1 FY26, with AUM growing 20% and strong organic net flow growth in Q2. Its global presence is expanding with cross-listings in Hong Kong and Tokyo, raising over $10 billion in AUM, leveraging its strong brand and liquidity.

Management emphasizes the fund's 25-year history, scale, and total cost of ownership benefits, including tight bid-ask spreads and deep liquidity.

Balance Sheet and Capital Management

The company has significantly improved its leverage ratio from 2.7x to 1.9x (inclusive of preferreds) over the last year and increased common share buybacks by 80% year-to-date. This was achieved while investing in the business and reducing debt, including preferreds, and increasing the quarterly common stock dividend to $0.215 per share.

The firm targets a total payout ratio, including common dividends and share buybacks, to be near 60%.

Hybrid Investment Platform Implementation

Invesco is implementing a transformational hybrid investment platform, with implementation costs of $14 million in Q2 FY26 and expected to be $15 million per quarter in H2 FY26, aiming for completion by year-end. Incremental operating expenses related to AUM on the platform are building towards $10 million per quarter later this year.

This platform is expected to yield benefits across the organization and for clients, with further expense reductions planned post-implementation in 2027.

Investment Performance and Active Management

The firm prioritizes achieving first quartile investment performance, with 44% of active funds in the top quartile over 3 years and nearly 70% of active AUM beating its benchmark over 3- and 5-year periods. Fundamental equities are showing improved performance, with over 40% of funds in the top quartile over 5 years.

Management is focused on strengthening fundamental equity long-term investment quality through talent, risk management, and platform tool enhancements.

SMA Growth and Real Estate Demand

The U.S. wealth management SMA platform, including equity assets, now stands at nearly $40 billion in AUM, with an annualized organic growth of 23% this quarter, driven particularly by fixed income and muni space. In private markets, demand for real estate debt, specifically INCREF, remains strong, with the fund growing to over $6 billion in AUM.

The firm has approximately $7 billion in real estate dry powder, indicating continued investment capacity.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.