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%.