T. Rowe Price profits miss estimates as outflows hit $25B

T. Rowe Price Group (NASDAQ:TROW) reported fourth-quarter earnings that trailed Wall Street expectations, as the active management powerhouse struggled to stem a persistent tide of client withdrawals despite a supportive backdrop for equity markets.

The Baltimore-based asset manager said Wednesday that adjusted earnings for the quarter ended Dec. 31 were $2.44 per share, missing the $2.47 per share anticipated by analysts.

Total revenue for the period rose to $1.93 billion, slightly ahead of forecasts, but increased operating expenses and a challenging flow environment pressured the bottom line.

A central challenge for the firm remains net client outflows, which totaled $25.5 billion for the quarter and $56.9 billion for the full year 2025.

Like many active managers, T. Rowe has faced stiff competition from lower-cost passive index funds, particularly within its core equity offerings.

However, the firm’s total assets under management (AUM) proved resilient, rising to $1.8 trillion as of year-end.

This was driven by nearly $34 billion in market appreciation and income, which more than offset the capital leaving the firm.

Approximately two-thirds of the firm's assets remain tied to retirement-related accounts, providing a relatively stable revenue base during periods of market volatility.

During the quarter, T. Rowe Price returned $426 million to stockholders through dividends and share repurchases, bringing its total capital return for 2025 to $1.8 billion.

For 2026, the company is projecting a GAAP effective tax rate between 23% and 27%.