Q4 2024 Franklin Resources Inc Earnings Call Transcript
Key Points
- Franklin Resources Inc (BEN) has significantly diversified its assets under management (AUM) through organic growth and targeted acquisitions, with acquired specialist investment managers now representing 64% of AUM.
- The company has seen substantial growth in its ETF business, with assets growing by 89% in the year and positive net flows for 12 consecutive quarters.
- Franklin Resources Inc (BEN) has successfully integrated Putnam Investments, resulting in a 21% increase in AUM since acquisition and enhancing its presence in retirement and insurance markets.
- The firm has made strategic investments in AI and blockchain technologies, including a partnership with Microsoft to develop an advanced financial AI platform.
- Franklin Resources Inc (BEN) has a strong international presence, with AUM surpassing $500 billion outside the US and continued momentum in international markets.
- Western Asset Management, a part of Franklin Resources Inc (BEN), is under investigation by the DOJ, SEC, and CFTC, leading to significant outflows of $49 billion for the fiscal year.
- The company reported long-term net outflows of $32.6 billion for the fiscal year, with Western Asset Management contributing significantly to these outflows.
- Adjusted net income and adjusted diluted earnings per share decreased by 4% and 8% respectively, compared to the prior year, primarily due to the decline in operating income and a higher tax rate.
- Franklin Resources Inc (BEN) impaired an intangible asset related to Western Asset, recognizing a $389.2 million non-cash charge due to decreased AUM and lower future cash flows.
- The ongoing investigations and outflows at Western Asset have created uncertainty and potential volatility in the company's financial performance.
Welcome to Franklin Resources earnings conference call for the quarter and fiscal year ended September 30, 2024. Hello, my name is Shamali, and I will be your call operator today. As a reminder, this conference is being recorded. (Operator Instructions)
I would now like to turn the conference over to your host, Selene Oh, Chief Communications Officer and Head of Investor Relations for Franklin Resources. You may begin.
Good morning, and thank you for joining us today to discuss our quarterly and fiscal year results. Please note that the financial results to be presented in this commentary are preliminary. Statements made on this conference call regarding Franklin Resources, Inc., which are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1,995. These forward-looking statements involve a number of known and unknown risks, uncertainties, and other important factors that could cause actual results to differ materially
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