T. Rowe Price revenue rises but net client outflows hit $28.3 billion (NASDAQ: TROW)

Posted by Brenda Bartman on Oct 30th, 2026

What happened

T. Rowe Price Group, Inc. (NASDAQ: TROW) grew third-quarter revenue while clients withdrew a net $28.3 billion.

Net revenues reached $2.00 billion, up 5.9% from $1.89 billion in Q3 2025 and 5.1% from $1.91 billion in Q2 2026. By OptimistFi's calculation, that is $111.4 million more than a year earlier and $97.5 million more than the prior quarter.

Earnings per share split. GAAP diluted EPS was $2.79, down 2.8% from $2.87 a year earlier. Adjusted diluted EPS was $2.86, up 1.8% from $2.81. CEO Rob Sharps said the firm continues to expand its ETF, SMA and model portfolio businesses.

Key numbers

Metric	Latest	Change	Source
Net revenues	$2.00 billion	from $1.89 billion, +5.9%	SEC 8-K earnings release
Net client outflows	$28.3 billion		SEC 8-K earnings release
Ending assets under management	$1.86 trillion	from $1.77 trillion, +5.4%	SEC 8-K earnings release
Diluted EPS (GAAP)	$2.79	from $2.87, -2.8%	SEC 8-K earnings release
Adjusted diluted EPS	$2.86	from $2.81, +1.8%	SEC 8-K earnings release
Effective fee rate excluding performance-based fees	37.8 bps	from 39.1 bps, -1.3 bps	SEC 8-K earnings release

Where the outflows came from

Equity strategies drove most of the exits. Equity lost a net $25.6 billion and multi-asset lost $7.6 billion. Fixed income, including money market, gained $3.4 billion. Alternatives added $1.5 billion after $1.2 billion of manager-driven distributions.

Assets under management fell $30.7 billion in the quarter to $1.86 trillion. That is down 1.6% from June 30 and up 5.4% from a year earlier. Net market depreciation and income of $2.4 billion also weighed. That line includes $0.7 billion of net distributions not reinvested.

By OptimistFi's calculation, the net outflow equals 1.5% of assets under management at June 30. That covers one quarter only.

Stock perps: every US stock that trades as a perpetual future, by leverage, live

Why it matters

Revenue rose even as the rate the firm earns on managed assets fell. The investment advisory effective fee rate, excluding performance-based fees, was 37.8 basis points. It was 39.1 a year earlier and 38.1 in Q2. The firm said client flows and transfers moved assets toward lower-fee products and asset classes, partly offset by equity market appreciation.

Average AUM was $1.89 trillion, up 9.5% from $1.72 trillion in Q3 2025 and up 2.7% from Q2 2026. The fee rate fell over the same periods.

OptimistFi has argued that T. Rowe Price works if its active brand, retirement distribution and cash generation can offset a shift toward cheaper passive products. Equity-led net outflows and a lower fee rate test that argument, so the quarter reads as mixed for holders.

The release also gives support. About two-thirds of client assets are retirement-related. The firm manages $186 billion of the $346 billion in assets it administers for retirement plans. Cash and cash equivalents were $3.77 billion at Sept. 30, up from $3.38 billion at Dec. 31, 2025.

Why GAAP and adjusted earnings moved apart

Operating profit grew on both bases. GAAP net operating income rose 19.7% to $769.8 million and operating expenses fell 1.2%. Adjusted operating expenses rose 5.8% and adjusted net operating income rose 4.5% to $809.2 million.

The GAAP expense line carried smaller items than a year earlier. The market-related change in deferred compensation liabilities was $1.5 million versus $50.8 million. The restructuring charge was $4.0 million versus $28.5 million. The adjusted figures exclude both. Compensation, benefits and related costs rose 5.1% to $664.7 million on a higher interim bonus accrual and long-term incentive compensation.

Non-operating income was $17.6 million against $238.4 million a year earlier. GAAP net income attributable to the company fell 5.2% to $612.3 million. Adjusted non-operating income was $18.0 million versus $50.2 million, which the firm tied to losses on fixed income holdings from rising interest rates.

Some items helped the quarter. Capital allocation-based income was $59.9 million versus $42.0 million. The change in accrued carried interest from Q3 2025 was primarily driven by a recently launched late-stage venture fund. Q3 2025 included impairments that did not recur. Technology costs in Q3 2026 also reflected the reversal of about $10 million in accrued expenses for work expected to be completed in future periods.

What's next

The firm said it expected to file its Form 10-Q for the third quarter with the SEC later on Oct. 29, with more detail on unaudited results at Sept. 30. Management scheduled a webcast the same day from 8:00 to 8:45 a.m. Eastern.

The firm estimates its full-year 2026 effective income tax rate at 23.5% to 25.5% on both GAAP and adjusted bases. In the next quarterly report, another quarter of equity-led net outflows with a fee rate below this quarter's level would weaken OptimistFi's case. Net inflows and a steadier fee rate would strengthen it.