10-Q: Invesco Reports Q1 2025 Results, Announces Preferred Stock Repurchase

Invesco Ltd. reports a mixed Q1 2025 with increased operating revenues but a decrease in net income attributable to Invesco Ltd., while also announcing an agreement to repurchase \$1 billion of preferred stock from MassMutual.

Summary

• Invesco Ltd. reported its Q1 2025 financial results, showing an increase in operating revenues to \$1,529.2 million compared to \$1,475.3 million in Q1 2024.
• Net income attributable to Invesco Ltd. increased to \$171.1 million, or \$0.38 per diluted share, compared to \$141.5 million, or \$0.31 per diluted share, in the same period last year.
• The company's AUM stood at \$1,844.8 billion at the end of March 2025.
• Invesco announced an agreement to repurchase \$1 billion of its Series A Preferred Stock from MassMutual, funded by new term loans.
• The company's board approved a dividend increase from \$0.205 to \$0.21 per share, starting in Q2 2025.
• During Q1 2025, Invesco repurchased 1.5 million common shares for \$25 million.
• The company's effective tax rate decreased to 22.5% for the three months ended March 31, 2025 compared to 24.3% for the three months ended March 31, 2024.
• The company's minimum regulatory capital requirement was \$333.5 million as of March 31, 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While revenue and AUM increased, there are concerns about declining revenue yields and global market volatility. The preferred stock repurchase is a positive move for capital structure.

Positives

• Operating revenues increased by 3.7% year-over-year.
• Net income attributable to Invesco Ltd. increased from \$141.5 million to \$171.1 million year-over-year.
• The company is actively managing its capital by reinvesting in the business, maintaining a strong balance sheet, and returning capital to shareholders.
• The company is delivering on its commitment to improve its leverage profile and maintain a strong balance sheet.
• The company's board approved an increase in our quarterly dividend from \$0.205 to \$0.21 per share beginning with the dividend that will be paid to holders of common shares in the second quarter of 2025.

Negatives

• Net revenue yield excluding performance fees and Invesco QQQ Trust declined to 28.3 basis points (bps) for the three months ended March 31, 2025 from 30.7 bps for the three months ended March 31, 2024.
• Accrued compensation and benefits decreased from \$1,029.2 million at December 31, 2024 to \$542.9 million at March 31, 2025.

Risks

• Global markets have experienced significant volatility, largely driven by escalating trade tensions throughout April 2025.
• The global economic outlook remains uncertain and geopolitical risks are continuing to shape market dynamics.
• If our revenue and operating income are adversely impacted by unfavorable market conditions or if there is a significant decline in our stock price for an extended period of time, an impairment of goodwill and intangible assets may occur in future periods.

Future Outlook

The company believes it is well-positioned to navigate changing market conditions due to its breadth and scale of products delivered through a diverse and global footprint.

Management Comments

• We continue to be highly focused on our capital deployment priorities including investing in our growth initiatives, regular share repurchases, and modest dividend increases.
• We are delivering on our commitment to improve our leverage profile and maintain a strong balance sheet.
• With the breadth and scale of our products delivered through a diverse and global footprint, we believe we are well-positioned to navigate these changing market conditions.

Industry Context

The report highlights the impact of global market volatility and geopolitical risks on the company's performance, reflecting broader industry challenges. Secular shifts in client demand are also noted, impacting revenue yields.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or benchmarks beyond the peer group used for TSR calculation in the equity incentive plan.
• The peer group for TSR calculation includes Alliance Bernstein, Bank of New York Mellon, BlackRock, Franklin Resources, Janus Henderson, Lazard, Northern Trust, State Street, and T. Rowe Price.
• The document does not provide specific comparisons to industry standards or benchmarks beyond the peer group used for TSR calculation in the equity incentive plan.

Legal Proceedings

• The company is from time to time involved in pending or threatened litigation relating to claims arising in the ordinary course of its business.
• The company and certain related entities have in recent years been subject to various regulatory inquiries, reviews and investigations and legal proceedings, including civil litigation, regulatory investigations and enforcement actions.

Related Party Transactions

• MassMutual owns approximately 18.2% of the common stock of the company and owns substantially all of the outstanding \$4.0 billion in perpetual, non-cumulative preferred shares as of March 31, 2025.
• The company entered into an agreement with MassMutual to repurchase \$1 billion of Invesco's Series A Preferred Stock for cash.

Stakeholder Impact

• Shareholders will benefit from the increased dividend and share repurchase program.
• Employees are subject to new equity incentive plans with time and performance-based vesting.
• Clients may be impacted by changes in AUM and investment performance.

Next Steps

• Complete the repurchase of preferred stock in May 2025.
• Pay the first quarter 2025 dividend of \$0.21 per common share on June 3, 2025.
• Continue to monitor and manage capital deployment priorities.

Key Dates

Keywords

Invesco, AUM, financial results, preferred stock, share repurchase, dividend, asset management, equity incentive plan, restricted stock units, performance vesting, time vesting, UCITS