10-K – 2026-02-13 – trow-20251231.htm

Operating margin was 32.9% in 2024 compared to 30.7% in 2023. The increase is primarily driven by net revenue growth outpacing operating expense growth primarily due to higher average assets under management.

Diluted earnings per share was $9.15 in 2024 compared to $7.76 in 2023. The increase in GAAP basis diluted earnings per share was primarily due to higher operating income and a lower effective tax rate.

On a non-GAAP basis, diluted earnings per share was $9.33 in 2024 compared to $7.59 in 2023. The increase was primarily due to higher operating income and a lower effective tax rate.

See our non-GAAP reconciliations later in this Management's Discussion and Analysis section.

Net revenues

2025 compared to 2024 2024 compared to 2023
(in millions) 2025 2024 2023 $ Change % Change (1)
$ Change % Change (1)

Investment advisory fees
Equity $ 3,923.7  $ 3,864.7  $ 3,442.3  $ 59.0  1.5  % $ 422.4  12.3  %
Fixed income, including money market 433.0  410.7  400.4  22.3  5.4  % 10.3  2.6  %
Multi-asset 1,910.6  1,814.1  1,583.4  96.5  5.3  % 230.7  14.6  %
Alternatives 335.0  310.2  283.4  24.8  8.0  % 26.8  9.5  %
6,602.3  6,399.7  5,709.5  202.6  3.2  % 690.2  12.1  %

Performance-based advisory fees 37.4  59.3  38.2  (21.9) (36.9) % 21.1  55.2  %

Capital allocation-based income
Change in accrued carried interest 149.5  134.1  223.2  15.4  n/m (89.1) n/m
Acquisition-related amortization and impairments (68.3) (87.5) (61.3) 19.2  n/m (26.2) n/m
81.2  46.6  161.9  34.6  n/m (115.3) n/m

Administrative, distribution, services, and other fees
Administrative and other fees 506.3  498.8  467.5  7.5  1.5  % 31.3  6.7  %
Distribution and servicing fees 87.6  89.2  83.4  (1.6) (1.8) % 5.8  7.0  %
593.9  588.0  550.9  5.9  1.0  % 37.1  6.7  %
Net revenues $ 7,314.8  $ 7,093.6  $ 6,460.5  $ 221.2  3.1  % $ 633.1  9.8  %

Average AUM (in billions):
Equity $ 840.9  $ 804.3  $ 705.2  $ 36.6  4.6  % $ 99.1  14.1  %
Fixed income, including money market 201.0  178.6  169.3  22.4  12.5  % 9.3  5.5  %
Multi-asset 580.7  529.0  442.3  51.7  9.8  % 86.7  19.6  %
Alternatives 54.7  50.0  45.5  4.7  9.4  % 4.5  9.9  %
Average AUM $ 1,677.3  $ 1,561.9  $ 1,362.3  $ 115.4  7.4  % $ 199.6  14.7  %

Investment advisory annualized effective fee rate (EFR) (in bps)
EFR without performance-based fees 39.4 41.0 41.9 (1.6) (3.9) % (0.9) (2.1) %
EFR with performance-based fees 39.6 41.4 42.2 (1.8) (4.3) % (0.8) (1.9) %

(1) n/m - the percentage change is not meaningful.

Investment advisory fees. The relationship between the change in average assets under management and the change in investment advisory fees for 2025, 2024 and 2023 are presented above.

For 2025 and 2024, the increases in investment advisory fees were due to higher average AUM as stronger market returns and appreciation were slightly offset by net outflows in each of the last two years.

Performance-based advisory fees in each period were primarily from alternatives strategies, and the decline in 2025

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from prior periods were primarily related to lower overall market returns.

Capital allocation-based income includes the change in accrued carried interest along with acquisition-related amortization and impairments. For 2025, the change in accrued carried interest increased net revenues by $149.5 million compared to $134.1 million for 2024. The year‑over‑year change reflects relative performance and market impacts between 2025 and 2024. Additionally, the decrease in acquisition-related amortization and impairments for 2025 compared to 2024 period was primarily due to higher impairments recognized in 2024.The firm realized carried interest of $117.8 million compared to $139.6 million in 2024.

For 2024, capital allocation-based income increased net revenues by $46.6 million. This amount includes an increase of $134.1 million in accrued carried interest from investments in affiliated investment funds, partially offset by $87.5 million of non-cash amortization and impairments related to acquisition-date asset basis differences. Impairments recognized in 2024 were $36.6 million. The firm realized carried interest of $139.6 million compared to $109.8 million in 2023.

A portion of the capital allocation-based income is passed through to employees and recognized in compensation and related costs, with the unpaid amount reported as non-controlling interest in the consolidated balance sheet. In 2025, we recognized compensation expense of $30.8 million, consisting of $58.5 million related to the change in accrued carried interest offset in part by $27.7 million in amortization and impairment charges. For 2024, we recognized compensation expense of $5.4 million, consisting of $42.5 million related to the change in accrued carried interest offset in part by $37.1 million in amortization and impairment charges.

Administrative, distribution, services, and other fees in 2025 were $593.9 million, an increase of $5.9 million compared to 2024. The increase was primarily driven by higher recordkeeping and transfer agent servicing activities provided to the T. Rowe Price mutual funds. Beginning in the third quarter of 2025, revenue from managed account model delivery assets and certain other advisory services is reported in investment advisory fees. This change muted the increases mentioned above, as more than $28 million of revenue in the second half of 2025 is now reported in investment advisory fees.

For 2024, the increase was primarily driven by higher average assets on which we earn non-discretionary advisory services revenue and higher transfer agent servicing activities provided to the T. Rowe Price mutual funds.

Net revenues are presented after the elimination of $4.2 million for 2025, $3.6 million for 2024, and $2.1 million for 2023, earned from our consolidated investment products. The corresponding expenses recognized by these consolidated investment products were also eliminated from operating expenses.

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Operating expenses

2025 compared to 2024 2024 compared to 2023
(in millions) 2025 2024 2023 $ Change % Change (1)
$ Change % Change (1)

Compensation, benefits, and related costs $ 2,644.3  $ 2,603.4  $ 2,450.7  $ 40.9  1.6  % $ 152.7  6.2  %
Acquisition-related retention agreements 56.7  44.8  55.0  11.9  26.6  % (10.2) (18.5) %
Capital allocation-based income compensation (2)
30.8  5.4  44.6  25.4  n/m (39.2) n/m
Market-related change in deferred compensation liabilities 136.3  104.3  123.2  32.0  30.7  % (18.9) n/m
Total compensation and related costs 2,868.1  2,757.9  2,673.5  110.2  4.0  % 84.4  3.2  %

Distribution and servicing 383.5  354.1  289.9  29.4  8.3  % 64.2  22.1  %
Advertising and promotion 107.4  129.6  114.2  (22.2) (17.1) % 15.4  13.5  %
Product and recordkeeping related costs 312.9  297.5  291.0  15.4  5.2  % 6.5  2.2  %
Technology, occupancy, and facility costs 723.6  644.1  632.6  79.5  12.3  % 11.5  1.8  %
General, administrative, and other 441.9  433.8  421.3  8.1  1.9  % 12.5  3.0  %
Change in fair value of contingent consideration —  (13.4) (82.4) 13.4  n/m 69.0  n/m
Acquisition-related amortization and impairment costs 111.3  156.7  134.2  (45.4) (29.0) % 22.5  16.8  %

Restructuring charge 177.3  —  —  177.3  n/m —  n/m
Total operating expenses $ 5,126.0  $ 4,760.3  $ 4,474.3  $ 365.7  7.7  % $ 286.0  6.4  %

Total adjusted operating expenses (3)
$ 4,666.5  $ 4,498.8  $ 4,260.7  $ 167.7  3.7  % $ 238.1  5.6  %

(1) n/m - The percentage change is not meaningful.
(2) Capital allocation-based income compensation represents the change in accrued carried interest compensation along with acquisition-related, non-cash amortization and impairments.
(3) See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.

Compensation, benefits, and related costs were $2,644.3 million for 2025, an increase of $40.9 million, or 1.6%, compared to 2024. The increase was driven by higher salaries, benefits and long-term incentive compensation. These increases were partially offset by lower temporary personnel costs, net of capitalized labor, and other employee-related costs. The firm employed 7,773 associates at December 31, 2025, a decrease of 4.7% from the end of 2024. The average headcount for first half of 2025 was 8,089, an increase of 2.5% compared to the first half of 2024. Additionally, the average headcount for 2025 was 7,969, a decrease of 0.2% compared to 2024. The decrease in associates from 2024 was primarily driven by the workforce action in July 2025 as part of our broad plan to reduce expense growth and realign resources.

For 2024, compensation, benefits, and related costs were $2,603.4 million, an increase of $152.7 million, or 6.2%, compared to 2023. The increase was driven by a higher bonus pool on an increase in revenue and higher salaries and related benefits partially offset by higher capitalized labor and lower other employee related costs.

Distribution and servicing costs were $383.5 million for 2025, an increase of $29.4 million, or 8.3%, compared to $354.1 million in 2024. For 2024, distribution and services costs were $354.1 million, an increase of $64.2 million, or 22.1%, compared to 2023. The increases in 2025 and 2024 were primarily driven by higher average assets under management distributed through intermediaries.

The costs in this expense category include amounts paid to third-party intermediaries that source the assets of certain share classes of our U.S. mutual funds, ETFs, and our international products, such as our Japanese ITMs and SICAVs. These costs are offset entirely by the investment advisory revenue we earn from these products, or in the case of the Advisor and R share classes of the U.S. mutual funds are recognized in administrative, distribution, services, and other fees.

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Advertising and promotion costs were $107.4 million for 2025, a decrease of $22.2 million, or 17.1%, compared to 2024. The decrease was primarily driven by lower media spending from the absence of the prior year’s elevated media costs related to a specific campaign and broader marketing initiatives.

For 2024, advertising and promotion costs were $129.6 million, an increase of $15.4 million, or 13.5%, compared to 2023. The increase was primarily driven by higher media advertising.

Product and recordkeeping related costs were $312.9 million for 2025, an increase of $15.4 million, or 5.2%, compared to 2024. The increase was primarily driven by higher recordkeeping related costs and higher custody fees related to our trust products from higher assets under management.

For 2024, product and recordkeeping related costs were $297.5 million for 2024, an increase of $6.5 million, or 2.2%, compared to 2023. The increase was primarily driven by higher product related costs to be reimbursed from our sponsored investment products partially offset by lower recordkeeping related costs.

Technology, occupancy, and facility costs were $723.6 million for 2025, an increase of $79.5 million or 12.3%, compared to 2024. The increase was driven by higher technology-related costs, including hosted solutions and depreciation, as well as higher occupancy and facility costs related to our new corporate headquarters, which we began occupying in March 2025.

For 2024, technology, occupancy, and facility costs were $644.1 million, an increase of $11.5 million or 1.8%, compared to 2023. The increase was due to ongoing investment in our technology capabilities, primarily hosted solutions, partially offset by lower facility costs as 2023 included the rent cost of two London facilities until we occupied our new building in September 2023.

General, administrative, and other expenses were $441.9 million for 2025, an increase of $8.1 million or 1.9%, compared to 2024. The increase was primarily driven by higher charitable contributions and other general and administrative costs, partially offset by lower travel-related expenses and lower external research fees.

For 2024, general, administrative, and other expenses were $433.8 million, an increase of $12.5 million or 3.0% compared to 2023. The increase was primarily due to a cost recovery recognized in 2023 that did not recur in 2024, higher professional fees and travel costs. These increases were partially offset by lower external research fees and other general and administrative costs. In 2024, the firm changed its approach to paying for external research, consistent with regulations and general industry practice.

Change in fair value of contingent consideration. Our contingent consideration consists of an earnout arrangement as part of the 2021 acquisition of OHA in which additional purchase price may be due to the sellers upon satisfying or exceeding certain defined revenue targets. Each reporting period, we record the fair value of the contingent consideration due under this arrangement. Reduced revenue expectations resulted in a reduction in the fair value of the contingent consideration liability of $13.4 million in 2024 and $82.4 million in 2023. The fair value of the contingent consideration liability as of December 31, 2025 and 2024 is zero.

Acquisition-related amortization and impairment costs primarily relate to the indefinite- and definite-lived intangible assets identified and separately recognized, at fair value, on acquisition date. In 2025, we recognized acquisition-related amortization and impairment costs of $111.3 million, a decrease of $45.4 million or 29.0%, compared to 2024. The decline was largely due to impairment charges recorded in 2024 for the trade name intangible asset that did not recur in 2025, as well as lower amortization expense resulting from the reduced carrying amount of our definite‑lived intangible asset base.

For 2024, we recognized acquisition-related amortization and impairment costs of $156.7 million, an increase of $22.5 million, compared to 2023. The increase was primarily driven by impairment charges related to the trade name intangible asset.

The impairment charges in all periods were the result of reduced growth expectations for both investment management and incentive fees compared to when the acquisition closed in 2021.

The remaining weighted average amortization period for our definite-lived intangible assets is 2.8 years. Should conditions that led us to recognize impairment charges worsen, additional impairments may be recognized in future

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periods.

Restructuring charge of $177.3 million for 2025 relates to actions taken under our previously announced broad and ongoing expense management program, which is designed to reduce expense growth and realign resources to support investment in existing and future capabilities. The charge includes accelerated depreciation and impairment charges related to certain owned real estate of $127.3 million as well as compensation‑related costs, primarily severance.

Non-operating income (loss)

Non-operating activity for the years ended December 31, 2025, 2024 and 2023 are as follows:

(in millions) 2025 compared to 2024 2024 compared to 2023
2025 2024 2023 $ Change $ Change
Net gains (losses) from non-consolidated investment products
Cash and discretionary investments
Dividend income $ 143.5  $ 138.6  $ 109.1  $ 4.9  $ 29.5 
Market-related gains (losses) and equity in earnings (losses) 33.1  4.8  24.5  28.3  (19.7)
Total cash and discretionary investments 176.6   143.4   133.6   33.2   9.8  
Seed capital investments
Dividend income 3.2  2.4  1.8  0.8  0.6 
Market-related gains (losses) and equity in earnings (losses) 48.2  62.0  50.3  (13.8) 11.7 
Total seed capital investments 51.4   64.4   52.1   (13.0) 12.3  
Total cash, discretionary, and seed investments 228.0   207.8   185.7   20.2   22.1  
Net gains (losses) recognized upon deconsolidation 3.1  (0.4) —  3.5  (0.4)
Investments used to hedge the deferred compensation liabilities 142.4  96.4  123.6  46.0  (27.2)
Total net gains (losses) from non-consolidated investment products 373.5   303.8   309.3   69.7   (5.5)
Other investment income 91.4  59.4  45.9  32.0  13.5 
Net gains (losses) on investments 464.9   363.2   355.2   101.7   8.0  
Net gains (losses) on consolidated investment products 219.9  130.3  164.6  89.6  (34.3)
Other gains (losses), including foreign currency gains (losses) 1.9  (7.2) (15.7) 9.1  8.5 
Non-operating income (loss) $ 686.7   $ 486.3   $ 504.1   $ 200.4   $ (17.8)

Adjusted non-operating income (loss) (1)
$ 177.5   $ 148.7   $ 140.8   $ 28.8   $ 7.9  

(1) See the reconciliation to the comparable U.S. GAAP measures at the end of the Results of Operations section of this Management's Discussion and Analysis.

Higher average cash balances increased dividend income in 2025 despite declining money-fund yields from 2024 and 2023. Market returns remained positive, contributing to continued gains within our investment portfolio.

The table above shows the net investment income of the underlying products of the consolidated investment products, not just the income from our ownership share. The table below displays how consolidated investment products affected the individual lines of our consolidated statements of income and the portion attributable to our interest.The impact of consolidating investment products on the individual lines of our consolidated statements of income for 2025, 2024, and 2023 is as follows:

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2025 compared to 2024 2024 compared to 2023
(in millions) 2025 2024 2023 $ Change $ Change
Operating expenses reflected in net operating income $ (9.8) $ (9.8) $ (11.1) $ —  $ 1.3 
Net investment income (loss) reflected in non-operating income 219.9  130.3  164.6  89.6  (34.3)
Impact on income before taxes $ 210.1  $ 120.5  $ 153.5  $ 89.6  $ (33.0)

Net income (loss) attributable to our interest in the consolidated investment products $ 88.9  $ 84.8  $ 106.5  $ 4.1  $ (21.7)
Net income (loss) attributable to redeemable non-controlling interests (unrelated third-party investors) 121.2  35.7  47.0  85.5  (11.3)
Impact on income before taxes $ 210.1  $ 120.5  $ 153.5  $ 89.6  $ (33.0)

Provision for income taxes

The following table reconciles the statutory federal income tax rate to our effective tax rate for the years ended December 31, 2025, 2024, and 2023:

2025 2024 2023
Statutory U.S. federal income tax rate 21.0  % 21.0  % 21.0  %

State income taxes, net of federal income tax benefits 2.1  2.9  2.3 
Net (income) losses attributable to redeemable non-controlling interests (1)
(0.9) (0.3) (0.4)
Net excess tax benefits from stock-based compensation plans activity —  (0.1) 0.1 
Valuation allowances 0.4  0.2  3.3 
Other items 0.6  0.6  — 
Effective income tax rate 23.2  % 24.3  % 26.3  %

Adjusted effective tax rate 24.3  % 24.5  % 27.2  %

(1)     Net income attributable to redeemable non-controlling interests represents the portion of earnings held in the firm's consolidated investment products, which are not taxable to the firm despite being included in pre-tax income.

Our effective tax rate for 2025 was 23.2%, compared to 24.3% for 2024 and 26.3% for 2023. The decrease in our effective tax rate in 2025 from 2024 was primarily due to lower state taxes resulting from prior period settlements. Additionally, the impact of redeemable non-controlling interest contributed to the lower U.S. GAAP effective tax rate compared to 2024.

For 2024, the decrease in our effective tax rate from 2023 was primarily due to lower valuation allowances recognized in 2024. These favorable impacts were slightly offset by higher state taxes.

The non-GAAP tax rate primarily adjusts for the impact of the consolidated investment products, including net income attributable to redeemable non-controlling interests.

Our effective tax rate will continue to experience volatility in future periods due to, among other things, the impact on the stock-based compensation tax benefits recognized from market fluctuations in our stock price, changes in the mix of our earnings among countries with differing tax laws or rates, and changes in the valuation allowance of foreign-based deferred tax assets. As of December 31, 2025, total valuation allowances recorded were $130.1 million, of which nearly all is related to UK-based deferred tax assets. We intend to continue maintaining a full valuation allowance on these and future UK- based deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.

Our U.S. GAAP effective tax rate is also impacted by changes in the proportion of net income that is attributable to our redeemable non-controlling interests and non-controlling interests reflected in permanent equity.

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We currently estimate our effective tax rates for the full-year 2026 will be in the range of 23.0% to 27.0% on a GAAP basis, and 24.0% to 27.0% on a non-GAAP basis.

The Organization of Economic Co-operation and Development (OECD) has issued Pillar Two Model Rules (Pillar Two) introducing a global 15% minimum tax effective January 1, 2024 within certain countries in which we operate. In addition, on January 5, 2026, the OECD published administrative guidance (the “side-by-side package”) designed to simplify the Pillar Two tax regime for multinational enterprise groups with an ultimate parent entity in certain countries, primarily the U.S. Our current assessment is that Pillar Two should have no material impact on the company's consolidated results of operations, cash flows, and overall financial position. We will continue to evaluate the impact of Pillar Two as its rules evolve.

NON-GAAP INFORMATION AND RECONCILIATION.

We believe the non-GAAP financial measures below provide relevant and meaningful information to investors about our core operating results. These measures have been established in order to increase transparency for the purpose of evaluating our core business, for comparing current results with prior period results, and to enable more appropriate comparison with industry peers. However, non-GAAP financial measures should not be considered a substitute for financial measures calculated in accordance with U.S. GAAP and may be calculated differently by other companies.

The following schedules reconcile certain U.S. GAAP financial measures to non-GAAP financial measures for each of the last three years:

2025
(in millions, except per-share amount) Operating expenses Net operating income Non-operating income (loss) Provision (benefit) for income taxes (6)
Net income attributable to T. Rowe Price Group Diluted earnings per share (7)

U.S. GAAP Basis (FS line item) $ 5,126.0  $ 2,188.8  $ 686.7  $ 667.2  $ 2,087.1  $ 9.24 
Non-GAAP adjustments:
Acquisition-related:
Investment and NCI amortization and impairments (1) (Capital allocation-based income and Compensation and related costs)
27.7  40.6  —  8.7  31.9  0.14 
Acquisition-related retention arrangements (1) (Compensation and related costs)
(56.7) 56.7  —  12.1  44.6  0.20 

Intangible assets amortization and impairments (1)
(111.3) 111.3  —  23.7  87.6  0.39 

Total acquisition-related (140.3) 208.6  —  44.5  164.1  0.73 
Deferred compensation liabilities (2) (Compensation and related costs)
(136.3) 136.3  (142.4) (1.4) (4.7) (0.02)
Restructuring charge (3)
(177.3) 177.3  —  43.6  133.7  0.59 
Consolidated investment products (4)
(5.6) 9.8  (219.9) (21.0) (67.9) (0.30)
Other non-operating income (5)
—  —  (146.9) (29.5) (117.4) (0.52)
Adjusted Basis $ 4,666.5  $ 2,720.8  $ 177.5  $ 703.4  $ 2,194.9  $ 9.72 

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2024
(in millions, except per-share amount) Operating expenses Net operating income Non-operating income (loss) Provision (benefit) for income taxes (6)
Net income attributable to T. Rowe Price Group Diluted earnings per share (7)

U.S. GAAP Basis (FS line item) $ 4,760.3  $ 2,333.3  $ 486.3  $ 683.8  $ 2,100.1  $ 9.15 
Non-GAAP adjustments:
Acquisition-related:
Investment and NCI amortization and impairments (1) (Capital allocation-based income and Compensation and related costs)
37.1  50.4  —  10.2  40.2  0.18 
Acquisition-related retention arrangements (1) (Compensation and related costs)
(44.8) 44.8  —  10.4  34.4  0.15 
Contingent consideration (1)
13.4  (13.4) —  (1.8) (11.6) (0.05)
Intangible assets amortization and impairments (1)
(156.7) 156.7  —  32.2  124.5  0.54 

Total acquisition-related (151.0) 238.5  —  51.0  187.5  0.82 
Deferred compensation liabilities (2) (Compensation and related costs)
(104.3) 104.3  (96.4) 1.7  6.2  0.03 

Consolidated investment products (4)
(6.2) 9.8  (130.3) (17.5) (67.3) (0.29)
Other non-operating income (5)
—  —  (110.9) (23.9) (87.0) (0.38)
Adjusted Basis $ 4,498.8  $ 2,685.9  $ 148.7  $ 695.1  $ 2,139.5  $ 9.33 

2023
(in millions, except per-share amount) Operating expenses Net operating income Non-operating income (loss) Provision (benefit) for income taxes (6)
Net income attributable to T. Rowe Price Group Diluted earnings per share (7)

U.S. GAAP Basis (FS line item) $ 4,474.3  $ 1,986.2  $ 504.1  $ 654.6  $ 1,788.7  $ 7.76 
Non-GAAP adjustments:
Acquisition-related:
Investment and NCI amortization and impairments (1) (Capital allocation-based income and Compensation and related costs)
25.4  35.9  —  7.9  28.0  0.12 
Acquisition-related retention arrangements (1) (Compensation and related costs)
(55.0) 55.0  —  10.8  44.2  0.19 
Contingent consideration (1)
82.4  (82.4) —  (10.6) (71.8) (0.31)
Intangible assets amortization and impairments (1)
(134.2) 134.2  —  28.8  105.4  0.46 

Total acquisition-related (81.4) 142.7  —  36.9  105.8  0.46 
Deferred compensation liabilities (2) (Compensation and related costs)
(123.2) 123.2  (123.6) 0.5  (0.9) — 

Consolidated investment products (4)
(9.0) 11.1  (164.6) (22.3) (84.2) (0.37)
Other non-operating income (5)
—  —  (75.1) (15.8) (59.3) (0.26)
Adjusted Basis $ 4,260.7  $ 2,263.2  $ 140.8  $ 653.9  $ 1,750.1  $ 7.59 

(1)      These non-GAAP adjustments remove the impact of acquisition-related amortization of intangible assets, the recurring fair value remeasurements of the contingent consideration liability, if any, amortization of acquired investment and non-controlling interest basis differences and amortization of compensation-related arrangements. We believe adjusting for these charges helps the reader's ability to understand our core operating results and increases comparability period to period.

(2)     This non-GAAP adjustment eliminates the compensation expense impact from market valuation changes in deferred compensation liabilities, including the supplemental savings plan and, starting in Q4 2024, restricted fund units, and the related net gains (losses) on investments used as economic hedges against the related liabilities. The liabilities are adjusted

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based on the performance of hypothetical investments selected by participants. We use investment products to economically hedge the market risk associated with the supplemental savings plan liability and the expected settlement value of unvested restricted fund units. We believe it is useful to offset the non-operating investment income (loss) of the hedges against the related compensation expense and remove the net impact to help the reader's ability to understand the firm's core operating results and to increase comparability period to period.

(3)      This non-GAAP adjustment removes accelerated depreciation and impairment charges related to certain owned real estate, as well as compensation expenses, primarily severance, resulting from actions taken as part of our broad and ongoing plan to reduce expense growth and realign resources to invest in existing and future capabilities. We believe this adjustment helps the reader’s ability to understand our core operating results and increases comparability period to period.

(4)      This non-GAAP adjustment removes the impact of the consolidated investment products by adding back their operating expenses and subtracting their investment income. The operating expense adjustment represents their operating expenses net of related investment advisory and administrative fees. The adjustment to net income attributable to T. Rowe Price Group represents the consolidated investment products' net income, net of redeemable non-controlling interests. We believe this adjustment helps the reader’s ability to understand our core operating results and increases comparability period to period.

(5)      This non-GAAP adjustment removes non-operating income (loss) earned on those investments that are not economic hedges for the deferred compensation liabilities and are not part of the cash and discretionary investment portfolio. We retain gains from cash and discretionary investments in our non-GAAP measures, as they are considered part of our core operations. We believe adjusting for the remaining non-operating income (loss) helps the reader’s ability to understand the firm's core operating results and increases comparability period to period. Additionally, we do not emphasize this portion of non-operating income (loss) when assessing the firm's performance.

(6)      The income tax impacts were calculated in order to achieve an overall non-GAAP effective tax rate of 24.3% for 2025, 24.5% for 2024 and 27.2% for 2023.

(7)     This non-GAAP measure was calculated by applying the two-class method to adjusted net income attributable to
    T. Rowe Price Group divided by the weighted-average common shares outstanding assuming dilution. The calculation of adjusted net income allocated to common stockholders is as follows:

Year ended
(in millions) 2025 2024 2023
Adjusted net income attributable to T. Rowe Price Group $ 2,194.9  $ 2,139.5  $ 1,750.1 
Less: adjusted net income allocated to outstanding restricted stock and stock unit holders 53.3  56.8  43.4 
Adjusted net income allocated to common stockholders $ 2,141.6  $ 2,082.7  $ 1,706.7 

CAPITAL RESOURCES AND LIQUIDITY.

Stockholders' equity attributable to T. Rowe Price Group increased to $10.9 billion at December 31, 2025 from $10.3 billion at December 31, 2024, and tangible book value increased to $7.9 billion at December 31, 2025 from $7.3 billion at December 31, 2024.

Sources of Liquidity

We have ample liquidity, including cash and investments in T. Rowe Price products, as follows:

(in millions) 2025 2024
Cash and cash equivalents $ 3,378.2  $ 2,649.8 
Discretionary investments 463.7  457.1 
Total cash and discretionary investments 3,841.9  3,106.9 
Redeemable seed capital investments 1,144.1  1,262.3 
Investments used to hedge the deferred compensation liabilities 1,317.3  1,110.9 
Total cash and investments in T. Rowe Price products attributable to T. Rowe Price Group $ 6,303.3  $ 5,480.1 

Our discretionary investment portfolio is primarily comprised of short duration bond funds, which typically yield higher than money market rates. Of our cash and cash equivalents, $730.6 million at December 31, 2025 and $653.9 million at December 31, 2024 were held by subsidiaries located outside the U.S. Our cash and discretionary investment portfolio experienced market gains and dividends of $177.5 million in 2025 and $148.7 million in 2024.

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Given the availability of our financial resources and cash expected to be generated through future operations, we do not maintain an available external source of additional liquidity.

Our seed capital investments are redeemable, although we generally expect to be invested several years for the products to build an investment performance history and until unrelated third-party investors substantially reduce our relative ownership percentage.

The cash and investment presentation on the consolidated balance sheet is based on the accounting treatment for the cash equivalent or investment item. The following table details how T. Rowe Price Group’s interests in cash and investments relate to where they are presented on the consolidated balance sheet as of December 31, 2025.

(in millions) Cash and cash equivalents Investments Net assets of consolidated investment products (1)
Total
Cash and discretionary investments $ 3,378.2  $ 463.7  $ —  $ 3,841.9 
Redeemable seed capital investments —  324.4  819.7  1,144.1 
Investments used to hedge the deferred compensation liabilities —  1,243.3  74.0  1,317.3 
Total cash and investments in T. Rowe Price products attributable to T. Rowe Price Group 3,378.2  2,031.4  893.7  6,303.3 
Investments in affiliated private investment funds (2)
—  695.0  —  695.0 
Investments in affiliated collateralized loan obligations —  25.0  —  25.0 
Investment in UTI and other investments —  573.8  —  573.8 
Total cash and investments attributable to T. Rowe Price Group 3,378.2  3,325.2  893.7  7,597.1 
Redeemable non-controlling interests —  —  1,036.0  1,036.0 
As reported on the consolidated balance sheet at December 31, 2025 $ 3,378.2  $ 3,325.2  $ 1,929.7  $ 8,633.1 

(1) The consolidated investment products are generally those products we provided seed capital at the time of their formation and we have a controlling interest. These products generally represent U.S. mutual funds, ETFs, and funds regulated outside the U.S. The $893.7 million represents the total value at December 31, 2025 of our interest in the consolidated investment products. The total net assets of the T. Rowe Price investment products at December 31, 2025 of $1,929.7 million includes assets of $1,951.0 million, less liabilities of $21.3 million as reflected in the consolidated balance sheets in Item 8. Financial Statements of this Form 10-K.
(2)     Includes $157.1 million of non-controlling interests in consolidated entities held by related parties, which we cannot sell in order to obtain cash for general operations.

Our consolidated balance sheet reflects the assets and liabilities of those investment products we consolidate, as well as redeemable non-controlling interests for the portion of these investment products that are held by unrelated third-party investors. Although we can redeem our net interest in these investment products at any time, we cannot directly access or sell the assets held by the products to obtain cash for general operations. Additionally, the assets of these investment products are not available to our general creditors. Our interest in these investment products was primarily used as initial seed capital and is recategorized as discretionary when it is determined by management that the seed capital is no longer needed. We assess the discretionary products and, when we decide to liquidate our interest, we seek to do so in a way as to not impact the product and, ultimately, the unrelated third-party investors.

Uses of Liquidity

We paid $5.08 per share in regular dividends in 2025, an increase of 2.4% over the $4.96 per share paid in 2024. Further, we expended $624.6 million in 2025 to repurchase nearly 6.2 million shares, or 2.8%, of our outstanding common stock at an average price of $101.15 per share. These dividends and repurchases were funded using existing cash balances and cash generated from operations. While opportunistic in our approach to stock buybacks, we will generally repurchase our common stock over time to offset the dilution created by our equity-based compensation plans.

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Since the end of 2022, we have returned $4.6 billion to stockholders through stock repurchases and regular quarterly dividends, as follows:

(in millions) Recurring dividend Stock repurchases Total returned to stockholders
2023 $ 1,121.9  $ 254.3  $ 1,376.2 
2024 1,135.2  334.5  1,469.7 
2025 1,143.4  624.6  1,768.0 
Total $ 3,400.5  $ 1,213.4  $ 4,613.9 

We anticipate property, equipment, software and other capital expenditures, including internal labor capitalization, for the full-year 2026 to be about $270 million, of which more than three-quarters is planned for technology initiatives. We expect to fund our anticipated capital expenditures with operating cash flows and other available resources.

Cash Flows

The following tables summarize the cash flows for 2025, 2024 and 2023, that are attributable to T. Rowe Price Group, our consolidated investment products, and the related eliminations required in preparing the consolidated statement of cash flows.

2025
(in millions) Cash flow attributable to T. Rowe Price Group Cash flow attributable to consolidated investment products Eliminations As reported
Cash flows from operating activities
Net income (loss) $ 2,087.1  $ 210.1  $ (88.9) $ 2,208.3 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation, amortization and impairments of property, equipment and software 405.8  —  —  405.8 
Amortization and impairment of acquisition-related assets and retention agreements 199.7  —  —  199.7 

Stock-based compensation expense 216.9  —  —  216.9 

Net (gains) losses recognized on investments (541.3) —  88.9  (452.4)
Total non-cash adjustments 281.1  —  88.9  370.0 
Net (investments) redemptions in sponsored investment products used to economically hedge deferred compensation liabilities (64.6) —  72.6  8.0 
Net change in trading securities held by consolidated investment products —  (1,002.7) —  (1,002.7)

Other changes 185.9  (4.7) (11.4) 169.8 
Net cash provided by (used in) operating activities 2,489.5  (797.3) 61.2  1,753.4 
Net cash provided by (used in) investing activities 59.5  (63.1) 233.9  230.3 
Net cash provided by (used in) financing activities (1,820.6) 838.3  (295.1) (1,277.4)
Effect of exchange rate changes on cash and cash equivalents of consolidated investment products —  (1.9) —  (1.9)
Net change in cash and cash equivalents during year 728.4  (24.0) —  704.4 
Cash and cash equivalents at beginning of year 2,649.8  63.1  —  2,712.9 
Cash and cash equivalents at end of year $ 3,378.2  $ 39.1  $ —  $ 3,417.3 

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2024
(in millions) Cash flow attributable to T. Rowe Price Group Cash flow attributable to consolidated investment products Eliminations As reported
Cash flows from operating activities
Net income (loss) $ 2,100.1  $ 120.5  $ (84.8) $ 2,135.8 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation, amortization and impairments of property, equipment and software 254.1  —  —  254.1 
Amortization and impairment of acquisition-related assets and retention agreements 250.1  —  —  250.1 
Fair value remeasurement of contingent consideration liability (13.4) —  —  (13.4)
Stock-based compensation expense 247.3  —  —  247.3 

Net (gains) losses recognized on investments (425.0) —  84.8  (340.2)
Total non-cash adjustments 313.1  —  84.8  397.9 
Net (investments) redemptions in sponsored investment products used to economically hedge deferred compensation liabilities (123.2) —  30.0  (93.2)
Net change in trading securities held by consolidated investment products —  (760.4) —  (760.4)

Other changes 23.9  6.1  (24.5) 5.5 
Net cash provided by (used in) operating activities 2,313.9  (633.8) 5.5  1,685.6 
Net cash provided by (used in) investing activities (187.9) (15.8) 26.2  (177.5)
Net cash provided by (used in) financing activities (1,542.8) 637.9  (31.7) (936.6)
Effect of exchange rate changes on cash and cash equivalents of consolidated investment products —  (2.4) —  (2.4)
Net change in cash and cash equivalents during year 583.2  (14.1) —  569.1 
Cash and cash equivalents at beginning of year 2,066.6  77.2  —  2,143.8 
Cash and cash equivalents at end of year $ 2,649.8  $ 63.1  $ —  $ 2,712.9 

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2023
(in millions) Cash flow attributable to T. Rowe Price Group Cash flow attributable to consolidated investment products Eliminations As reported
Cash flows from operating activities
Net income (loss) $ 1,788.7  $ 153.5  $ (106.5) $ 1,835.7 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation, amortization and impairments of property, equipment and software 254.8  —  —  254.8 
Amortization and impairment of acquisition-related assets and retention agreements 226.8  —  —  226.8 
Fair value remeasurement of contingent consideration liability (82.4) —  —  (82.4)
Stock-based compensation expense 265.6  —  —  265.6 

Net (gains) losses recognized on investments (567.3) —  106.5  (460.8)
Total non-cash adjustments 97.5  —  106.5  204.0 
Net (investments) redemptions in sponsored investment products used to economically hedge deferred compensation liabilities (10.3) —  66.4  56.1 
Net change in trading securities held by consolidated investment products —  (1,070.3) —  (1,070.3)

Other changes 182.7  27.9  (17.0) 193.6 
Net cash provided by (used in) operating activities 2,058.6  (888.9) 49.4  1,219.1 
Net cash provided by (used in) investing activities (310.2) (56.8) 495.2  128.2 
Net cash provided by (used in) financing activities (1,437.4) 903.4  (544.6) (1,078.6)
Effect of exchange rate changes on cash and cash equivalents of consolidated investment products —  0.4  —  0.4 
Net change in cash and cash equivalents during year 311.0  (41.9) —  269.1 
Cash and cash equivalents at beginning of year 1,755.6  119.1  —  1,874.7 
Cash and cash equivalents at end of year $ 2,066.6  $ 77.2  $ —  $ 2,143.8 

Operating activities
During 2025, operating activities attributable to T. Rowe Price Group provided cash flows of $2,489.5 million, an increase of $175.6 million from $2,313.9 million provided during 2024. The increase was primarily driven by a $162.0 million increase in cash flows related to timing differences associated with the cash settlement of our assets and liabilities. Additionally, net investments in 2025 into investment products that economically hedge our deferred compensation liabilities were $58.6 million lower than made in 2024. These increases to operating cash flows were offset in part by a $13.0 million decrease in net income and a $32.0 million decrease in the add-back for non-cash items as detailed in the 2025 table above. The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying products.

During 2024, operating activities attributable to T. Rowe Price Group provided cash flows of $2,313.9 million, an increase of $255.3 million from $2,058.6 million provided during 2023. The increase was primarily driven by a $311.4 million increase in net income and a $215.6 million increase in the add-back for non-cash items as detailed in the 2024 table above. These increases to operating cash flows were offset in part by a $158.8 million decrease in cash flows related to timing differences associated with the cash settlement of our assets and liabilities. Additionally, in 2024, we made $112.9 million more net investments in sponsored investment products used to economically hedge our deferred compensation liabilities compared to 2023. The remaining change in reported cash flows from operating activities was attributable to the net change in trading securities held in our consolidated investment products’ underlying products.

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Investing activities
Net cash provided by investing activities that are attributable to T. Rowe Price Group totaled $59.5 million in 2025 compared to net cash used in investing activities of $187.9 million in 2024. In 2025, we decreased our property and equipment expenditures by $149.2 million, primarily due to the completion of our new corporate headquarters in early 2025, and decreased our other investing activity by $83.0 million. Net investing activities from our investments in sponsored investment products generated net proceeds of $422.3 million in 2025 compared to $407.1 million in 2024. We eliminate our capital in those investment products we consolidate in preparing our consolidated statements of cash flows. The remaining change in reported cash flows from investing activities of $47.3 million is related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products.

Net cash used in investing activities that are attributable to T. Rowe Price Group totaled $187.9 million in 2024 compared to $310.2 million in 2023. Net investing activities from our investments in sponsored investment products generated net proceeds of $407.1 million in 2024 compared to $36.1 million in 2023. In 2024, we increased our property and equipment expenditures by $115.5 million and our other investing activity by $133.2 million. We eliminate our capital in those investment products we consolidate in preparing our consolidated statements of cash flows. The remaining change in reported cash flows from investing activities of $41.0 million was related to the net cash removed from our balance sheet from consolidating and deconsolidating investment products.

Financing Activities
Net cash used in financing activities attributable to T. Rowe Price Group totaled $1,820.6 million in 2025 compared to $1,542.8 million in 2024. During 2025, we used $620.9 million to repurchase nearly 6.2 million shares compared to $337.2 million to repurchase 3.0 million shares in 2024. In 2025, cash flow related to common stock issued under stock compensation plans increased by $11.0 million compared to 2024. In addition, the $7.4 million increase in dividends paid in 2025 was a result of the 2.4% increase in our quarterly dividend per share. The remaining change in reported cash flows from financing activities is attributable to a $63.0 million decrease in net subscriptions from redeemable non-controlling interest holders of our consolidated investment products during 2025.

Net cash used in financing activities attributable to T. Rowe Price Group totaled $1,542.8 million in 2024 compared to $1,437.4 million in 2023. During 2024, we used $337.2 million to repurchase nearly 3.0 million shares compared to $254.4 million to repurchase 2.4 million shares in 2023. The $13.9 million increase in dividends paid in 2024 was a result of the 1.6% increase in our quarterly dividend per share. In addition, in 2024, net distributions to non-controlling interests in consolidated entities decreased by $6.6 million and cash flow related to common stock issued under stock compensation plans decreased by $15.3 million compared to 2023. The remaining change in reported cash flows from financing activities is attributable to a $247.4 million increase in net subscriptions from redeemable non-controlling interest holders of our consolidated investment products during 2024.

MATERIAL CASH COMMITMENTS.

Our material cash commitments primarily include our obligations related to our deferred compensation liabilities, facility leases, and other contractual amounts that will be due for the purchase of goods or services to be used in our operations. Some of these contractual amounts may be cancellable under certain conditions and may involve termination fees. We expect to fund these cash commitments from future cash flows from operations.

Our obligations under our deferred compensation liabilities are disclosed on our consolidated balance sheet with more information included in Note 12 and Note 18 to the consolidated financial statements. Our lease obligations are disclosed in Note 7 to the consolidated financial statements. Additionally, there are unrecognized tax benefits discussed in Note 10 to our consolidated financial statements. The note references above are in Item 8. of this Form 10-K.

While most of our other material cash commitments consist of goods and services used in our operations, these commitments primarily consist of obligations related to long-term software licensing, maintenance contracts, and outsource contracts.

We also have outstanding commitments to fund additional contributions to investment partnerships totaling $199.3 million. The vast majority of these additional contributions will be made to investment partnerships in which we have an existing investment. In addition to such amounts, a percentage of prior distributions may be called under certain circumstances.

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As part of the OHA acquisition, T. Rowe Price committed $500 million to fund OHA product launches through 2026. As of December 31, 2025, T. Rowe Price has a $287 million remaining commitment to OHA products. T. Rowe Price has also entered into certain earnout and other arrangements as part of that acquisition. For more detail on these arrangements, see Note 5 and Note 16 to our consolidated financial statements in Item 8. of this Form 10-K.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES.

The preparation of financial statements often requires the selection of specific accounting methods and policies from among several acceptable alternatives. Further, significant estimates and judgments may be required in selecting and applying those methods and policies in the recognition of the assets and liabilities in our consolidated balance sheets, the revenues and expenses in our consolidated statements of income, and the information that is contained in our significant accounting policies and notes to the consolidated financial statements. These policies and estimates are considered critical because they had a material impact or are reasonably likely to have a material impact on our consolidated financial statements and because they require management to make significant judgments, assumptions or estimates. Making these estimates and judgments requires the analysis of information concerning events that may not yet be complete and of facts and circumstances that may change over time. Accordingly, actual amounts or future results can differ materially from those estimates that we currently include in our consolidated financial statements, significant accounting policies, and notes.

We present those significant accounting policies used in the preparation of our consolidated financial statements as an integral part of those statements within this 2025 Annual Report on Form 10-K. In the following discussion, we highlight and explain further certain of those policies and estimates that are most critical to the preparation and understanding of our financial statements.

Consolidation

We consolidate all subsidiaries and investment products in which we have a controlling financial interest. We are deemed to have a controlling interest when we own the majority of the voting interest of an entity or are deemed to be the primary beneficiary of a variable interest entity (VIE). VIEs are entities that lack sufficient equity to finance its activities or the equity holders do not have defined power to direct the activities of the entity normally associated with an equity investment. Our analysis to determine whether an entity is a VIE or a voting interest entity (VOE) involves judgment and considers several factors, including an entity’s legal organization, capital structure, the rights of the equity investment holders, our ownership interest in the entity, and our contractual involvement with the entity. We continually review and reconsider our VIE or VOE conclusions upon the occurrence of certain events, such as changes to our ownership interest, changes to an entity’s legal structure, or amendments to governing documents. Our VIEs are primarily sponsored investment products and our variable interest consists of our equity ownership in and investment management fees earned from these entities.

We are the primary beneficiary if we have the power to direct the activities of the VIE that most significantly impact its economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the VIE that could potentially be significant. Our SICAV funds and other investment products regulated outside the U.S. are determined to be VIEs. We have interests in certain investment partnerships that are also considered VIEs, including entities that have interests in general partners of affiliated private investment funds, which are also VIEs. We consolidate the entities that hold the interest in the general partners; however, the entities are not the primary beneficiaries of the affiliated private investment funds.

Other-than-temporary impairments of equity method investments

We evaluate our equity method investments for impairment when events or changes in circumstances indicate that the carrying value of the investment exceeds its fair value, and the decline in fair value is other than temporary. For our investments in our affiliated private investment funds, we consider the length of time and the extent to which market value has been less than cost, any specific events that may influence the operations of the funds and our intent and ability to retain the investment for a period of time to allow for any anticipated recovery in market value. We generally believe an assessment period of four consecutive quarters of sustained market losses is a reasonable period to allow for an anticipated market recovery.

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Intangible assets

Indefinite-lived intangible assets are tested for impairment annually, in the fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the intangible asset is impaired. Management must first determine the level at which indefinite-lived intangible assets are tested for impairment (i.e., unit of account). We have concluded that the trade name and investment advisory agreement indefinite-lived intangible assets will be considered their own separate unit of account. Once the unit of account is determined, management has the option to first assess indefinite-lived intangible assets for qualitative factors to determine whether it is necessary to perform a quantitative impairment test. If a quantitative impairment test is required, the impairment test consists of a comparison of the fair value of an intangible asset with its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. If required, fair value is generally determined using a discounted cash flow analysis where estimated future cash flows are discounted to arrive at a single present value amount. This approach includes inputs that require significant management judgment, the most relevant of which include revenue growth, discount rates, and effective tax rates. Changes in these inputs could produce different fair value amounts and therefore different impairment conclusions. During 2025, we recognized $3.3 million of non-cash impairment charges on the indefinite-lived investment advisory agreements intangible asset. The maximum future impairment of indefinite-lived intangible assets that we could incur is the amount recognized in our consolidated balance sheets within intangible assets, $148.3 million as of December 31, 2025.

Definite-lived intangible assets are reviewed for impairment whenever events or circumstances indicate that the asset group's carrying amount may not be recoverable (i.e., the carrying amount is more than the undiscounted estimated future cash flows). Management must first determine the level at which definite-lived intangible assets are tested for impairment (i.e., asset group). The determination of the asset group is judgmental and the intangible assets can be grouped based on the lowest level for which identifiable cash flows are largely independent of identifiable cash flows for other groups of assets. Since each affiliated private investment fund has identifiable cash flows separate from other funds, we determined that the asset group for testing is each individual affiliated private investment fund. Once the asset group is identified, we next determine whether there are any triggering events that would cause us to believe that the carrying value would not be recoverable. If there is a triggering event, then we would perform a test of recoverability. Based on that test, if the carrying value is not recoverable, then a fair value measurement is required of the asset group to determine if the fair value is less than the asset group's carrying amount. If required, fair value would be determined using a discounted cash flow analysis where estimated future cash flows are discounted to arrive at a single present value amount. This approach includes inputs that require significant management judgment, the most relevant of which include revenue growth, discount rates, and effective tax rates. Any impairment loss would be the difference between the fair value of the asset group and its carrying amount. During 2025, we recognized immaterial non-cash impairment charges on these intangible assets.

Goodwill

We internally conduct, manage, and report our operations as one reportable business segment - investment advisory business. This reflects how the chief operating decision maker allocates resources and assesses performance. Accordingly, we have one reporting unit - our investment advisory business, consistent with our single operating segment, to which all goodwill has been assigned.

We evaluate the carrying amount of goodwill in our consolidated balance sheets for possible impairment on an annual basis in the fourth quarter of each year using a fair value approach. Goodwill would be considered impaired whenever its carrying amount exceeds the fair value of our investment advisory business. Our annual testing has demonstrated that the fair value of our investment advisory business (our market capitalization) exceeds our carrying amount (our stockholders’ equity) and, therefore, no impairment exists. Should we reach a different conclusion in the future, additional work would be performed to ascertain the amount of the non-cash impairment charge to be recognized. We must also perform impairment testing at other times if an event or circumstance occurs indicating that it is more likely than not that an impairment has been incurred. The maximum future impairment of goodwill that we could incur is the amount recognized in our consolidated balance sheets, $2.6 billion as of December 31, 2025.

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Provision for income taxes

We operate in numerous states and countries through our various subsidiaries and must allocate our income, expenses, and earnings under the various laws and regulations of each of these taxing jurisdictions. Accordingly, our provision for income taxes represents our total estimate of the liability that we have incurred in doing business each year in all of our locations. Annually, we file tax returns that represent our filing positions with each jurisdiction and settle our return liabilities. Each jurisdiction has the right to audit those returns and may take different positions with respect to income and expense allocations and taxable earnings determinations. From time to time, we may also provide for estimated liabilities associated with uncertain tax return filing positions that are subject to, or in the process of, being audited by various tax authorities. Because the determination of our annual provision is subject to judgments and estimates, actual results will vary from those recognized in our financial statements. As a result, we recognize additions to, or reductions of, income tax expense during a reporting period that pertain to prior period provisions as our estimated liabilities are revised and actual tax returns and tax audits are settled. We recognize any such prior period adjustment in the discrete quarterly period in which it is determined.

We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including
future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. We recognize a valuation allowance for any portion of the deferred tax asset that is not expected to be realized based on the available positive and negative evidence. An increase in the valuation allowances increases the provision expense and effective tax rate. Furthermore, if we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would reduce the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE.

See Note 1 - Basis of Preparation and Summary of Significant Accounting Policies within Item 8. Financial Statements for a discussion of newly issued but not yet adopted accounting guidance.

FORWARD-LOOKING INFORMATION.

From time to time, information or statements provided by or on behalf of T. Rowe Price, including those within this report, may contain certain forward-looking information, including information or anticipated information relating to: our revenues, net income, and earnings per share of common stock; changes in the amount and composition of our assets under management; our expense levels; our effective tax rate; legal or regulatory developments; geopolitical instability; interest rates and currency fluctuations; and our expectations regarding financial markets, future transactions, dividends, stock repurchases, investments, new products and services, capital expenditures, changes in our effective fee rate, and other industry or market conditions. Readers are cautioned that any forward-looking information provided by or on behalf of T. Rowe Price is not a guarantee of future performance. Actual results may differ materially from those in forward-looking information because of various factors including, but not limited to, those discussed below and in Item 1A. Risk Factors, of this Form 10-K Annual Report. Further, forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events.

Our future revenues and results of operations will fluctuate primarily due to changes in the total value and composition of assets under our management. Such changes result from many factors, including, among other things: client-related cash inflows and outflows in our products, performance fees, capital allocation-based income, fluctuations in global financial markets that result in appreciation or depreciation of the assets under our management, our introduction of new investment products, and changes in retirement savings trends relative to participant-directed investments and defined contribution plans.

The ability to attract and retain investors’ assets under our management is dependent on investor sentiment and confidence; the relative investment performance of the T. Rowe Price mutual funds and other managed investment products compared to competing offerings and market indexes; the ability to maintain our investment management and administrative fees at appropriate levels; the impact of changes in interest rates and inflation; competitive conditions in the mutual fund, asset management, and broader financial services sectors; our level of success in implementing our strategy to expand our business; and our ability to attract and retain key personnel. Our revenues are substantially dependent on fees earned under contracts with the T. Rowe Price funds and could be adversely

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affected if the independent directors of one or more of the T. Rowe Price funds terminated or significantly altered the terms of the investment management or related administrative services agreements. Non-operating investment income will also fluctuate primarily due to the size of our investments, changes in their market valuations, and any other-than-temporary impairments that may arise or, in the case of our equity method investments, our proportionate share of the investees’ net income.

Our future results are also dependent upon the level of our expenses, which are subject to fluctuation for the following or other reasons: changes in the level of our advertising and promotion expenses in response to market conditions, including our efforts to expand our investment advisory business to investors outside the U.S. and to further penetrate our distribution channels within the U.S.; the pace and level of spending to support key strategic priorities; variations in the level of total compensation expense due to, among other things, bonuses, restricted stock units and other equity grants, other incentive awards, our supplemental savings plan, changes in our employee count and mix, and competitive factors; any goodwill, intangible asset or other asset impairment that may arise; fluctuation in foreign currency exchange rates applicable to the costs of our international operations; expenses and capital costs, such as technology assets, depreciation, amortization, and research and development, incurred to maintain and enhance our administrative and operating services infrastructure; the timing of the assumption of all third party research payments, unanticipated costs that may be incurred to protect investor accounts and the goodwill of our clients; and disruptions of services, including those provided by third parties, such as fund and product recordkeeping, facilities, communications, power, and the mutual fund transfer agent and accounting systems, as a result of extreme events, cyberattacks or otherwise.

Our business is also subject to substantial governmental regulation, and changes in legal, regulatory, accounting, tax, and compliance requirements may have a substantial effect on our operations and results, including, but not limited to, effects on costs that we incur and effects on investor interest in investment products and investing in general or in particular classes of mutual funds or other investments.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

EQUITY PRICE RISK.

Certain of our investments are carried at fair value, and, as such, these investments are subject to market risk. The following table presents the equity price risk from our investments. The majority of our Investments are in mutual funds which moderate market risk as they are diversified and invest in a number of different financial instruments. T. Rowe Price manages its cash and discretionary investments exposure to market risk by diversifying its investments among various fixed income products. In addition, investment holdings may be altered from time to time in response to changes in market risks and other factors, as management deems appropriate. We do not actively hedge the market risk related to our seed capital investments.

In order to quantify the sensitivity of our investments to changes in market valuations, we have chosen to use a variant of each investments net asset value, if available, to quantify the equity price risk, as we believe the volatility in each investments net asset value best reflects the underlying risk potential as well as the market trends surrounding each of its investment objectives. The potential future loss of value, before any income tax benefits, of these investments at December 31, 2025 was determined by using the lower of each investment's lowest net asset value per share during 2025 or its net asset value per share at December 31, 2025, reduced by 10%. In considering this presentation, it is important to note that: not all investments experienced their lowest net asset value per share on the same day; it is likely that the composition of the investment portfolio would be changed if adverse market conditions persisted; and we could experience future losses in excess of those presented below.
 
Additionally, the underlying holdings of our assets under management are also subject to market risk, which may arise from changes in equity prices, credit ratings, foreign currency exchange rates, and interest rates.

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(in millions) Fair value 12/31/2025 Potential lower value Potential loss
Investment in sponsored products
Discretionary investments $ 463.7  $ 417.3  $ 46.4  10  %
Redeemable seed capital investments 316.1  273.5  42.6  13  %
Investments used to hedge the deferred compensation liabilities 1,243.3  1,028.8  214.5  17  %
Investments in affiliated collateralized loan obligations 3.2  2.9  0.3  9  %
Total $ 2,026.3  $ 1,722.5  $ 303.8  15  %
Direct investment in consolidated investment products

Redeemable seed capital investments 819.7  699.5  120.2  15  %
Investments used to hedge the deferred compensation liabilities 74.0  65.8  8.2  11  %
Total $ 893.7  $ 765.3  $ 128.4  14  %

Investment partnerships and other investments $ 154.7  $ 138.4  $ 16.3  11  %

Any losses arising from the change in fair value of our investments would result in a corresponding decrease, net of tax, in our net income attributable to T. Rowe Price Group.

The direct investment in consolidated investment products represents our portion of the net assets of the consolidated investment product. Upon consolidation of these products, our direct investment is eliminated, and the net assets of the products are combined in our consolidated balance sheet, together with redeemable non-controlling interests, which represents the portion of the products that is owned by unrelated third-party investors.

Further, we have investments that are used to economically hedge the change in our deferred compensation liabilities. Since we are hedging the liabilities, the impact on our net income attributable to T. Rowe Price Group would result from any ineffectiveness of this economic hedge.

CURRENCY TRANSLATION RISK.

Certain of our investments, including a few consolidated investment products, expose us to currency translation risk when the financial statements are translated into U.S. dollars (USD). Our most significant exposure relates to the translation of the financial statements of our equity method investment in UTI ($162.8 million at December 31, 2025). UTI's financial statements are denominated in Indian rupees (INR) and are translated to USD each reporting period. We do not use derivative financial instruments to manage this currency risk, so both positive and negative fluctuations in the INR against the USD will affect accumulated other comprehensive income (loss) and the carrying amount of our investment. We had a cumulative translation loss, net of tax, of $57.4 million at December 31, 2025, related to our investment in UTI. Given the nature of UTI’s business, should conditions deteriorate in markets in which they operate, we are at risk for loss up to our carrying amount.

We operate in several countries outside the U.S. of which the United Kingdom is the most prominent. We incur operating expenses and have assets and liabilities denominated in currencies other than USD associated with these operations, although our revenues are predominately realized in USD. The majority of our currency translation risk on our consolidated balance sheet at December 31, 2025, related to cash and non-consolidated investments of $177.6 million that are denominated in foreign currencies. We do not believe that foreign currency fluctuations materially affect our results of operations.

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Item 8. Financial Statements.
 

  Page
Index to Financial Statements:
Consolidated Balance Sheets at December 31, 2025 and 2024 58

Consolidated Statements of Income for each of the years in the three-year period ended
December 31, 2025 59

Consolidated Statements of Comprehensive Income for each of the years in the three-year period ended December 31, 2025 60

Consolidated Statements of Cash Flows for each of the years in the three-year period ended
December 31, 2025 61

Consolidated Statements of Stockholders' Equity for each of the years in the three-year period ended December 31, 2025 62

Notes to Consolidated Financial Statements
64

Report of Independent Registered Public Accounting Firm (KPMG LLP, Baltimore, MD, Auditor ID: 185 )
89

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CONSOLIDATED BALANCE SHEETS
(in millions, except share data)  

12/31/2025 12/31/2024
ASSETS
Cash and cash equivalents $ 3,378.2   $ 2,649.8  
Accounts receivable and accrued revenue 931.2   877.4  
Investments 3,325.2   3,000.5  
Assets of consolidated investment products ($ 1,596.1 million at December 31, 2025 and $ 1,555.6 million at December 31, 2024, related to variable interest entities)
1,951.0   2,044.0  
Operating lease assets 382.9   226.8  
Property, equipment and software, net 845.3   977.0  
Intangible assets, net 274.2   368.1  
Goodwill 2,642.8   2,642.8  
Other assets 611.0   685.6  
Total assets $ 14,341.8   $ 13,472.0  

LIABILITIES
Accounts payable and accrued expenses $ 352.7   $ 353.5  
Liabilities of consolidated investment products ($ 14.2 million at December 31, 2025 and $ 46.2 million at December 31, 2024, related to variable interest entities)
21.3   62.1  
Operating lease liabilities 447.2   278.7  
Accrued compensation and related costs 235.7   219.8  
Deferred compensation liabilities 1,176.8   1,020.7  

Income taxes payable 54.9   87.1  
Total liabilities 2,288.6   2,021.9  

Commitments and contingent liabilities

Redeemable non-controlling interests 1,036.0   944.0  

STOCKHOLDERS' EQUITY
Preferred stock, undesignated, $ 0.20 par value — authorized and unissued 20,000,000 shares
—   —  
Common stock, $ 0.20 par value — authorized 750,000,000 ; issued 218,565,000 shares at December 31, 2025 and 222,966,000 at December 31, 2024
43.8   44.6  
Additional capital in excess of par value —   311.9  
Retained earnings 10,866.8   10,040.6  
Accumulated other comprehensive loss ( 50.5 ) ( 51.7 )
Total stockholders' equity attributable to T. Rowe Price Group 10,860.1   10,345.4  
Non-controlling interests in consolidated entities 157.1   160.7  
Total permanent stockholders' equity 11,017.2   10,506.1  
Total liabilities, redeemable non-controlling interests, and permanent stockholders' equity $ 14,341.8   $ 13,472.0  

The accompanying notes are an integral part of these statements.
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CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per-share amounts)

2025 2024 2023
Revenues
Investment advisory fees $ 6,602.3   $ 6,399.7   $ 5,709.5  
Performance-based advisory fees 37.4   59.3   38.2  
Capital allocation-based income 81.2   46.6   161.9  
Administrative, distribution, services, and other fees 593.9   588.0   550.9  
Net revenues 7,314.8   7,093.6   6,460.5  

Operating expenses
Compensation and related costs 2,868.1   2,757.9   2,673.5  
Distribution and servicing costs 383.5   354.1   289.9  
Advertising and promotion costs 107.4   129.6   114.2  
Product and recordkeeping related costs 312.9   297.5   291.0  
Technology, occupancy, and facility costs 723.6   644.1   632.6  
General, administrative, and other costs 441.9   433.8   421.3  
Change in fair value of contingent consideration —   ( 13.4 ) ( 82.4 )
Acquisition-related amortization and impairment costs 111.3   156.7   134.2  
Restructuring charge 177.3   —   —  
Total operating expenses 5,126.0   4,760.3   4,474.3  

Net operating income 2,188.8   2,333.3   1,986.2  

Non-operating income
Net gains on investments 464.9   363.2   355.2  
Net gains on consolidated investment products 219.9   130.3   164.6  
Other gains (losses), including foreign currency gains (losses) 1.9   ( 7.2 ) ( 15.7 )
Total non-operating income 686.7   486.3   504.1  

Income before income taxes 2,875.5   2,819.6   2,490.3  
Provision for income taxes 667.2   683.8   654.6  
Net income 2,208.3   2,135.8   1,835.7  
Less: net income attributable to redeemable non-controlling interests 121.2   35.7   47.0  
Net income attributable to T. Rowe Price Group $ 2,087.1   $ 2,100.1   $ 1,788.7  

Earnings per share on common stock of T. Rowe Price Group
Basic $ 9.26   $ 9.18   $ 7.78  
Diluted $ 9.24   $ 9.15   $ 7.76  

The accompanying notes are an integral part of these statements.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)

2025 2024 2023
Net income $ 2,208.3   $ 2,135.8   $ 1,835.7  
Other comprehensive income (loss)
Currency translation adjustments
Consolidated investment products—variable interest entities 24.8   ( 14.0 ) 21.7  
Reclassification (gains) losses recognized in non-operating income upon deconsolidation of certain investment products ( 3.1 ) 0.4   —  

Equity method investments ( 9.3 ) 0.7   ( 1.6 )

Other comprehensive income (loss) before income taxes 12.4   ( 12.9 ) 20.1  
Net deferred tax (expense) benefit ( 1.4 ) 3.7   ( 1.9 )
Total other comprehensive income (loss) 11.0   ( 9.2 ) 18.2  
Total comprehensive income 2,219.3   2,126.6   1,853.9  
Less: comprehensive income attributable to redeemable non-controlling interests 131.0   30.7   59.7  
Comprehensive income attributable to T. Rowe Price Group $ 2,088.3   $ 2,095.9   $ 1,794.2  

The accompanying notes are an integral part of these statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)

2025 2024 2023
Cash flows from operating activities
Net income $ 2,208.3   $ 2,135.8   $ 1,835.7  
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, amortization and impairment of property, equipment and software 405.8   254.1   254.8  
Amortization and impairment of acquisition-related assets and retention arrangements 199.7   250.1   226.8  
Fair value remeasurement of contingent consideration liability —   ( 13.4 ) ( 82.4 )
Stock-based compensation expense 216.9   247.3   265.6  

Net gains recognized on investments ( 452.4 ) ( 340.2 ) ( 460.8 )
Net (investments) redemptions in investment products used to economically hedge deferred compensation liabilities 8.0   ( 93.2 ) 56.1  
Net change in securities held by consolidated investment products ( 1,002.7 ) ( 760.4 ) ( 1,070.3 )
Other changes in assets and liabilities 169.8   5.5   193.6  
Net cash provided by operating activities 1,753.4   1,685.6   1,219.1  

Cash flows from investing activities
Purchases of sponsored investment products ( 112.9 ) ( 100.1 ) ( 85.3 )
Dispositions of sponsored investment products 769.1   533.4   616.6  
Net cash of investment products upon deconsolidation ( 63.1 ) ( 15.8 ) ( 56.8 )
Additions to property, equipment and software ( 274.2 ) ( 423.4 ) ( 307.9 )

Other investing activity ( 88.6 ) ( 171.6 ) ( 38.4 )
Net cash provided by (used in) investing activities 230.3   ( 177.5 ) 128.2  

Cash flows from financing activities
Repurchases of common stock ( 620.9 ) ( 337.2 ) ( 254.4 )
Common share issuances under stock-based compensation plans ( 22.3 ) ( 33.3 ) ( 18.0 )
Dividends paid to common stockholders and equity-unit holders ( 1,143.0 ) ( 1,135.6 ) ( 1,121.7 )
Net distributions to non-controlling interests in consolidated entities ( 34.4 ) ( 36.7 ) ( 43.3 )
Net subscriptions from redeemable non-controlling interest holders 543.2   606.2   358.8  
Net cash used in financing activities ( 1,277.4 ) ( 936.6 ) ( 1,078.6 )

Effect of exchange rate changes on cash and cash equivalents of consolidated investment products ( 1.9 ) ( 2.4 ) 0.4  

Net change in cash and cash equivalents during year 704.4   569.1   269.1  
Cash and cash equivalents at beginning of year, including $ 63.1 million at December 31, 2024, $ 77.2 million at December 31, 2023, and $ 119.1 million at December 31, 2022, held by consolidated investment products
2,712.9   2,143.8   $ 1,874.7  
Cash and cash equivalents at end of year, including $ 39.1 million at December 31, 2025, $ 63.1 million at December 31, 2024, and $ 77.2 million at December 31, 2023, held by consolidated investment products
$ 3,417.3   $ 2,712.9   $ 2,143.8  

The accompanying notes are an integral part of these statements.
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (shares in thousands; dollars in millions)

Common shares outstanding Common stock Additional capital in excess of par value Retained earnings AOCI (1)
Total stockholders’ equity attributable to T. Rowe Price Group Non-controlling interests in consolidated entities Total permanent stockholders' equity Redeemable non-controlling interests
Balances at December 31, 2022 224,310   $ 44.9   $ 437.9   $ 8,409.7   $ ( 53.0 ) $ 8,839.5   $ 190.7   $ 9,030.2   $ 656.7  
Net income —   —   —   1,788.7   —   1,788.7   44.6   1,833.3   47.0  
Other comprehensive income, net of tax —   —   —   —   5.5   5.5   —   5.5   12.7  
Dividends declared ($ 4.88 per share)
—   —   —   ( 1,121.9 ) —   ( 1,121.9 ) —   ( 1,121.9 ) — 

Common stock-based compensation plans activity:
Shares issued upon option exercises 585   0.1   35.6   —   —   35.7   —   35.7   — 
Restricted shares issued, net of shares withheld for taxes 57   —  —  —   —   —  —   —  — 

Net shares issued upon vesting of restricted stock units 1,413   0.3   ( 54.0 ) —   —   ( 53.7 ) —   ( 53.7 ) — 

Stock-based compensation expense —   —   265.6   —   —   265.6   —   265.6   — 
Restricted stock units issued as dividend equivalents —   —   0.4   ( 0.4 ) —   —  —   —   — 
Common shares repurchased ( 2,427 ) ( 0.5 ) ( 253.8 ) —  —   ( 254.3 ) —   ( 254.3 ) — 
Net distributions to non-controlling interests in consolidated entities —   —   —   —   —   —  ( 43.3 ) ( 43.3 ) — 

Net subscriptions into T. Rowe Price investment products —  —  —  —  —  —  —  —  356.9  
Net deconsolidations of T. Rowe Price investment products —  —  —  —  —  —  —  —  ( 479.2 )
Balances at December 31, 2023 223,938   44.8   431.7   9,076.1   ( 47.5 ) 9,505.1   192.0   9,697.1   594.1  

Net income —   —   —   2,100.1   —   2,100.1   5.4   2,105.5   35.7  
Other comprehensive loss, net of tax —   —   —   —   ( 4.2 ) ( 4.2 ) —   ( 4.2 ) ( 5.0 )
Dividends declared ($ 4.96 per share)
—   —   —   ( 1,135.2 ) —   ( 1,135.2 ) —   ( 1,135.2 ) — 

Common stock-based compensation plans activity:
Shares issued upon option exercises 577   0.1   36.3   —   —   36.4   —   36.4   — 
Restricted shares issued, net of shares withheld for taxes 7   —  ( 0.3 ) —   —   ( 0.3 ) —   ( 0.3 ) — 

Net shares issued upon vesting of restricted stock units 1,415   0.3   ( 69.6 ) —   —   ( 69.3 ) —   ( 69.3 ) — 

Stock-based compensation expense —   —   247.3   —   —   247.3   —   247.3   — 
Restricted stock units issued as dividend equivalents —   —   0.4   ( 0.4 ) —   —  —   —   — 
Common shares repurchased ( 2,971 ) ( 0.6 ) ( 333.9 ) —  —   ( 334.5 ) —   ( 334.5 ) — 
Net distributions to non-controlling interests in consolidated entities —   —   —   —   —   —   ( 36.7 ) ( 36.7 ) — 

Net subscriptions into T. Rowe Price investment products —   —   —   —   —   —   —   —  592.0  
Net deconsolidations of T. Rowe Price investment products —   —   —   —   —   —   —   —  ( 272.8 )
Balances at December 31, 2024 222,966   $ 44.6   $ 311.9   $ 10,040.6   $ ( 51.7 ) $ 10,345.4   $ 160.7   $ 10,506.1   $ 944.0  

(1) Accumulated other comprehensive income

The accompanying notes are an integral part of these statements.
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (shares in thousands; dollars in millions)

Common shares outstanding Common stock Additional capital in excess of par value Retained earnings AOCI (1)
Total stockholders’ equity attributable to T. Rowe Price Group Non-controlling interests in consolidated entities Total permanent stockholders' equity Redeemable non-controlling interests
Balances at December 31, 2024 222,966   $ 44.6   $ 311.9   $ 10,040.6   $ ( 51.7 ) $ 10,345.4   $ 160.7   $ 10,506.1   $ 944.0  
Net income —   —   —  2,087.1   —   2,087.1   30.8   2,117.9   121.2  
Other comprehensive income, net of tax —   —   —   —   1.2   1.2   —   1.2   9.8  
Dividends declared ($ 5.08 per share)
—   —   —   ( 1,143.4 ) —   ( 1,143.4 ) —   ( 1,143.4 ) — 

Common stock-based compensation plans activity:
Shares issued upon option exercises 495   0.1   31.5   —   —   31.6   —   31.6   — 
Restricted shares issued, net of shares withheld for taxes —   —  ( 0.2 ) —  —  ( 0.2 ) —  ( 0.2 ) — 

Net shares issued upon vesting of restricted stock units 1,279   0.3   ( 54.2 ) —   —   ( 53.9 ) —   ( 53.9 ) — 

Stock-based compensation expense —   —   216.9   —   —   216.9   —   216.9   — 
Restricted stock units issued as dividend equivalents —  —   0.5   ( 0.5 ) —   —  —   —  — 
Common shares repurchased ( 6,175 ) ( 1.2 ) ( 506.4 ) ( 117.0 ) —   ( 624.6 ) —   ( 624.6 ) — 
Net distributions to non-controlling interests in consolidated entities —   —   —   —   —   —  ( 34.4 ) ( 34.4 ) — 

Net subscriptions into T. Rowe Price investment products —   —   —   —   —   —  —   —  556.0  
Net deconsolidations of T. Rowe Price investment products —   —   —   —   —   —  —   —  ( 595.0 )
Balances at December 31, 2025 218,565 $ 43.8   $ —   $ 10,866.8   $ ( 50.5 ) $ 10,860.1   $ 157.1   $ 11,017.2   $ 1,036.0  

(1) Accumulated other comprehensive income

The accompanying notes are an integral part of these statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

T. Rowe Price Group derives its consolidated revenues and net income primarily from investment advisory services that its subsidiaries provide to individual and institutional investors that invest in a broad range of investment solutions across equity, fixed income, multi-asset, and alternatives capabilities. We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; trust services; and non-discretionary advisory services.

The investment solutions are provided in a number of vehicles including the T. Rowe Price U.S. mutual funds (U.S. mutual funds), subadvised funds, separately managed accounts, collective investment trusts, exchange-traded funds, and other sponsored products. The other sponsored products include: open-ended investment products offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds, business development companies, an interval fund, and collateralized loan obligations.

Investment advisory fees depend largely on the total value and composition of assets under our management. Accordingly, fluctuations in financial markets and in the composition of assets under management impact our revenues and results of operations.

BASIS OF PREPARATION.

These consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States. These principles require that we make certain estimates and assumptions. Actual results may vary from our estimates.

RECENTLY ADOPTED ACCOUNTING GUIDANCE AND TAX REGULATION.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S. The OBBBA contains significant changes and modifications to federal and international tax provisions including 100% bonus depreciation and domestic research cost expensing. We believe that the impact of the OBBBA’s provisions as they become effective will not have a material impact on our financial position and results of operations.

On January 1, 2025, the Company adopted the FASB issued Accounting Standards Update No. 2023-09 - Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. We adopted the standard retrospectively and have updated prior‑period disclosures accordingly. The new required disclosures for all years presented are included in Note 10 – Income Taxes.

NEWLY ISSUED BUT NOT YET ADOPTED ACCOUNTING GUIDANCE.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03 - Income Statement- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-4): Disaggregation of Income Statement Expenses , which requires disclosures of additional information and disaggregation of certain expenses included in the income statement. The guidance is effective for the firm on January 1, 2027, and allows for either a prospective or retrospective approach on adoption. We are currently evaluating the impact the adoption will have on our financial statements and have not yet determined our transition approach.

In September 2025, the FASB issued Accounting Standards Update No. 2025-06 - Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which amends the existing internal-use software guidance. The amendment eliminates the project stage model and clarifies that capitalization of internal-use software costs commences when management has authorized and committed funding for the project and it is probable that software will be completed and used for its intended function. The amendment allows for varying transition approaches and is effective for the firm on January 1, 2028, with early adoption permitted. We are currently evaluating the impact that the adoption will have on our financial statements and have not yet determined our transition approach.
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We have considered all other newly issued accounting guidance that is applicable to our operations and the preparation of our consolidated financial statements, including those we have not yet adopted. We do not believe that any such guidance has or will have a material effect on our financial position or results of operations.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

Consolidation

Our consolidated financial statements include the accounts of all wholly-owned subsidiaries, majority-owned entities that are entitled to a disproportionate allocation of income, or carried interest, of affiliated private investment funds (carried interest entities), and investment products in which we have a controlling interest. We are deemed to have a controlling interest when we own the majority of a voting interest entity (VOE) or are deemed to be the primary beneficiary of a variable interest entity (VIE). We perform an analysis of our investments to determine if the investment entity is a VOE or a VIE. Our analysis involves judgment and considers several factors, including an entity’s legal organization, capital structure, the rights of the equity investment holders, our ownership interest in the entity, and our contractual involvement with the entity. We continually review and reconsider our VOE or VIE conclusions upon the occurrence of certain events, such as changes to our ownership interest, changes to an entity’s legal structure, or amendments to governing documents. All material accounts and transactions between consolidated entities are eliminated in consolidation.

Variable interest entities (VIE)
VIEs are entities that, by design: (i) lack sufficient equity to permit the entity to finance its activities independently or (ii) have equity holders that do not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, the obligation to absorb the entity’s losses, or the rights to receive the entity’s residual returns. We consolidate a VIE when we are the primary beneficiary, which is the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the VIE that could potentially be significant.

Our Luxembourg-based SICAV funds and other investment products regulated outside the U.S. that we provide seed capital were determined to be VIEs and are consolidated when we are the primary beneficiary. Certain of the investment partnerships we have an interest in were also determined to be VIEs and are not consolidated as we concluded that we are not the primary beneficiary.

We have determined that the carried‑interest entities are VIEs and that T. Rowe Price is the primary beneficiary. In addition, the carried‑interest entities hold interests in the general partners of certain affiliated private investment funds that are themselves VIEs; however, the carried‑interest entities are not the primary beneficiary of those funds. Accordingly, these affiliated private investment funds are not consolidated.

Redeemable non-controlling interests
We recognize redeemable non-controlling interests for the portion of the net assets of our consolidated investment products held by unrelated third-party investors as their interests are convertible to cash and other assets at their option. As such, we reflect redeemable non-controlling interests as temporary equity in our consolidated balance sheets.

Non-controlling interests in consolidated entities
We recognize non-controlling interests in the consolidated carried interest entities as a component of permanent equity in our consolidated balance sheets. The non-controlling interests represent the minority interest held by limited partnerships controlled by employees, one of which is a member of our Board of Directors. Income (loss) is allocated to these non-controlling interests based on the contractual arrangements that govern the allocation of income (loss) and recognized as compensation expense.

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Investments in T. Rowe Price money market mutual funds
We do not consider our investments in T. Rowe Price money market mutual funds when performing our consolidation analysis as the guidance provides a scope exception for interests in entities that are required to comply with, or operate in accordance with, requirements similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds.

Cash equivalents

Cash equivalents consist primarily of short-term, highly liquid investments in T. Rowe Price money market mutual funds. The cost of these funds is equivalent to fair value.

Investments

Investments held at fair value
Investments in sponsored products have been made for both general corporate investment purposes and to provide seed capital for newly formed sponsored investment products. Those investments that we do not consolidate are carried at fair value using the quoted closing NAV per share of each fund as of the balance sheet date. We also have investments in securities that are held in separately managed accounts and are each valued using quoted market prices and other observable market inputs when available.

The underlying products investments held by our consolidated investment products retain investment company specialized accounting in consolidation; are considered securities held in a trading account for cash flow reporting purposes; and are valued in accordance with the valuation and pricing policy used to value our assets under management which is further described in the Revenue Recognition policy below.

We elected to value certain interests in investment partnerships and other investments, for which market prices or quotations are not readily available, at fair value using the NAV per share as a practical expedient or the measurement alternative.

Changes in the fair values of all these investments are reflected in non-operating income in our consolidated statements of income.

Equity method investments
Equity method investments consist of investments in entities for which we have the ability to exercise significant influence over the operating and financial policies of the investee. The carrying values of these investments are adjusted to reflect our proportionate share of the investee's net income or loss, any unrealized gain or loss resulting from the translation of foreign-denominated financial statements into U.S. dollars, and dividends received. Our proportionate share of income or loss is included in non-operating income in our consolidated statements of income.

As permitted under existing accounting guidance, we adopted a policy by which we recognize our share of UTI Asset Management Company Limited’s (UTI) and other certain investment partnership earnings on a quarter lag as current financial information is not available in a timely manner. The basis difference between our carrying value and our proportionate share of UTI’s book value is primarily related to consideration paid in excess of the stepped-up basis of assets and liabilities on the date of purchase.

Investments in affiliated private investment funds - carried interest
Investments in affiliated private investment funds - carried interest represent interests in general partners of affiliated private investment funds that are contractually entitled to a disproportionate allocation of income, which is also referred to as carried interest. We account for these investments as financial instruments under ASC 323, Investments – Equity Method and Joint Ventures (ASC 323) since the general partner has significant governance rights in the investment funds in which it invests, which demonstrate significant influence. The income earned is recognized as capital-allocation based income in our consolidated statements of income. Additionally, the basis difference arising between the carrying value and fair market value of these investments upon acquisition is included in the carrying value and amortized on a straight‑line basis over each funds’ estimated useful life. This amortization reduces both the investment balance and capital allocation-based income in the consolidated statements of income.

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Held to Maturity
Investments in rated notes of certain European collateralized loan obligation funds along with the certificates of deposit are designated as held-to-maturity and carried on the balance sheet at amortized cost.

Concentration of risk

Concentration of credit risk in accounts receivable is believed to be minimal as our clients generally have substantial assets, including those in the investment products we manage for them.

Our investments held at fair value expose us to market risk, that is, the potential future loss of value that would result from a decline in the fair value of each investment or its underlying net assets. The underlying holdings of our assets under management are also subject to market risk, which may arise from changes in equity prices, credit ratings, foreign currency exchange rates, and interest rates.

Leases
We review new arrangements at inception to evaluate whether we have the right to obtain substantially all the economic benefits of and have the right to control the use of an asset. If we determine that an arrangement qualifies as a lease, we recognize a lease liability and a corresponding asset on the lease’s commencement date. The lease liability is initially measured at the present value of the future minimum lease payments over the lease term using the rate implicit in the arrangement or, if not available, our incremental borrowing rate. An operating lease asset is measured initially at the value of the lease liability less any lease incentives received and initial direct costs incurred.
Our leases qualify as operating leases and consist primarily of real estate leases for corporate offices, data centers, and other facilities. We measure our operating lease liabilities using an estimated incremental borrowing rate as an implicit rate cannot be readily determinable from any of our operating lease arrangements. Since we do not have any outstanding corporate borrowings, we estimate our incremental borrowing rate using an estimated credit rating and available market information. Additionally, certain of our leases contain options to extend or terminate the lease term that, if exercised, would result in the remeasurement of the operating lease liability.
Our operating leases contain both lease and non-lease components. Non-lease components are distinct elements of a contract that are not related to securing the use of the lease assets, such as common area maintenance and other management costs. We elected to measure the lease liability of our real estate operating leases by combining the lease and non-lease components into one single lease component. As such, we included the fixed payments and any payments that depend on a rate or index related to our lease and non-lease components in measuring the operating lease liability.
We recognize operating lease expense on a straight-line basis over the lease term as part of technology, occupancy, and facility costs in our consolidated statements of income.

Property, equipment and software

Property, equipment and software is stated at cost net of accumulated depreciation and amortization computed using the straight-line method. Provisions for depreciation and amortization are based on the following weighted-average estimated useful lives: computer and communications software and equipment, 3 years; buildings and improvements, 32 years; leasehold improvements, 11 years; and furniture and other equipment, 6 years.

Intangible assets

Intangible assets consist primarily of acquired investment advisory agreements and a trade name. The fair values of the acquired investment advisory agreements were based on the net present value of estimated future cash flows attributable to each agreement, and included significant assumptions related to revenue, discount rate, and effective tax rate.

The investment advisory agreement intangible assets are amortized using the straight-line method over their estimated useful lives unless the asset was determined to have an indefinite life as there is no foreseeable limit on the contract period. The weighted average remaining useful life of definite-lived intangibles assets is 2.8 years.

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Definite-lived intangible assets carrying value is tested when there is an indication of impairment. Impairment is indicated when the carrying value of the asset is not recoverable and exceeds its fair value. If indicators are present, we perform a recoverability test by comparing the estimated undiscounted future cash flows attributable to the asset group in question to the asset group’s carrying amount. If the undiscounted estimated future cash flows are less than the carrying amount of the asset, the asset’s cost is adjusted to fair value and an impairment loss is recognized. The fair value is determined using a discounted cash flow analysis where estimated future cash flows are discounted to arrive at a single present value amount. This approach includes inputs that require significant management judgment, the most relevant of which included revenue growth, discount rates, and effective tax rates.

The trade name fair value was determined using the relief from royalty method based on net present value of estimated cash flows, which include significant assumptions about royalty rate, revenue growth rate, discount rate and effective tax rate. Additionally, we identified the trade name intangible asset as indefinite-lived as there is no foreseeable limit on use of the acquired name.

Indefinite-lived intangible assets are tested for impairment annually in the fourth quarter or more frequently when an event occurs or circumstances change that more likely than not reduce the fair value of the indefinite-lived intangible asset below its carrying value. The fair value for each asset is determined using a discounted cash flow analysis where estimated future cash flows were discounted to arrive at a single present value amount. This approach includes inputs that require significant management judgment, the most relevant of which include revenue growth, discount rates, and effective tax rates.

Goodwill

We internally conduct, manage, and report our operations as one investment advisory business. This reflects how the chief operating decision maker allocates resources and assesses performance. Accordingly, we have one reporting unit - investment advisory business, consistent with our single operating segment, to which all goodwill has been assigned.

We evaluate the carrying amount of goodwill in our consolidated balance sheets for possible impairment on an annual basis, in the fourth quarter, using a fair value approach. Our evaluations have indicated that no impairment exists.

Revenue recognition

Our revenue is earned from investment advisory, administrative, and distribution services we provide to our clients. Each distinct service we promise in our agreements is considered a performance obligation and is the basis for determining when we recognize revenue. The fees are allocated to each distinct performance obligation and we recognize revenue when, or as, we satisfy our promises. The consideration for our services is generally variable and included in net revenues, when it is improbable that a significant reversal could occur in the future. For certain client agreements, we have the discretion to hire a third party to provide services to our clients. In these circumstances, we are generally deemed to control the services before transferring them to our clients, and accordingly present the revenues gross of the related third-party costs. The timing of when we bill our clients and related payment terms vary in accordance with agreed-upon contractual terms. For the majority of our agreements, billing occurs after we have recognized revenue, which results in accounts receivable and accrued revenue. For an insignificant portion of our contracts, billing occurs in advance of providing services, which results in deferred revenue within the accounts payable and accrued expenses line of our consolidated balance sheets.

Taxes billed to our clients based on our fees for services rendered are not included in revenues.

Investment advisory fees

The majority of our investment advisory agreements, including those with the U.S. mutual funds, have a single performance obligation as the promised services are not separately identifiable from other promises in the agreements and, therefore, are not distinct. Substantially all performance obligations for providing advisory services are satisfied over time and revenue is recognized as time passes.
Investment advisory agreements with sponsored investment products regulated outside the U.S. generally have two performance obligations; one for investment management and one for distribution. For these agreements, we allocate the management fee to each performance obligation using our best estimate of the standalone fee of each
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of these services. The performance obligation for providing investment management services, like our other advisory contracts, is satisfied over time and revenue is recognized as time passes. The performance obligation for distribution is satisfied at the point in time when an investor makes an investment into the product. Accordingly, a portion of the investment advisory fees earned from these products relate to distribution performance obligations that were satisfied during prior periods. These distribution fees are reported within the investment advisory fees line of our consolidated statements of income.
The management fee for our investment advisory agreements are based on our assets under management, which change based on fluctuations in financial markets and net cash flows from investors, and represents variable consideration. Therefore, investment advisory fees are generally constrained, and excluded from revenue, until the asset values on which our client is billed are no longer subject to financial market volatility. Investment advisory fees for certain investment products are presented net of fees waived pursuant to the contractual expense limitations of the product. Our assets under management are valued in accordance with valuation and pricing processes for each major type of investment. Fair values used in our processes are primarily determined from quoted market prices; prices furnished by dealers who make markets in such securities; or from data provided by independent pricing services that considers yield or price of investments of comparable quality, coupon, maturity, and type. Investments for which market prices are not readily available are not a material portion of our total assets under management.

We provide all services to the U.S. mutual funds under contracts that are subject to periodic review and approval by the funds’ Boards. Regulations require that the funds’ shareholders also approve material changes to investment advisory contracts.

Investment advisory fees also include fees earned from affiliated private investment funds or private accounts that are determined either monthly or quarterly and are generally based on the fund’s or account's net asset value or invested capital. Investment advisory fees earned from CLOs include senior collateral management fees and subordinated collateral management fees, which are generally determined quarterly based on the sum of collateral principal amounts and the aggregate principal amount of all defaulted obligations. If amounts distributable on any payment date are insufficient to pay the collateral management fee according to the priority of payments, any shortfall is deferred and payable on subsequent payment dates.

Performance-Based Fees

We recognize performance-based incentive fees in connection with the investment advisory agreements from certain sponsored products and separately managed and subadvised accounts. We are entitled to receive performance-based incentive fees when the return on investment assets exceeds a certain benchmark return. In such arrangements, these incentive fees are recognized at the end of the measurement period when the performance benchmark or contractual outperformance has been achieved. Performance-based incentive fees are considered a form of variable consideration, and as such, these fees are subject to potential reversal up until the end of the measurement period (which is generally one year) when the performance-based incentive fees become fixed, determinable, and are not subject to significant reversal. There are no significant judgments made when determining the performance-based incentive fees.

Administrative, distribution, servicing, and other fees

Administrative and other fees

The administrative services we provide include mutual fund transfer agent, accounting and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage; trust services; and other advisory services.

The administrative service agreements with the U.S. mutual funds for accounting oversight, transfer agency and recordkeeping services; participant recordkeeping and transfer agent services for defined contribution retirement plans; brokerage services, and trust services generally have one performance obligation as the promised services in each agreement are not separately identifiable from other performance obligations in the contract and, therefore, are not distinct. Our performance obligation in each agreement is satisfied over time and revenue is recognized as time passes. The fees for these services vary by contract and are both fixed and variable.
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Distribution and servicing fees

The agreements for distribution and servicing fees earned from 12b-1 plans of the Advisor Class, R Class, and Variable Annuity II Class shares of the U.S. mutual funds have one performance obligation, as distribution services. The distribution services are not separately identifiable from shareholder servicing promises in the agreements and, therefore, are not distinct. Our performance obligation is satisfied at the point in time when an investor makes an investment into these share classes of the U.S. mutual funds. The fees for these distribution and servicing agreements are based on the assets under management in these share classes, which change based on fluctuations in financial markets, and represent variable consideration. These fees are generally constrained, and excluded from revenue, until the asset values on which our client is billed are not subject to financial market volatility. Accordingly, the majority of the distribution and servicing revenue relates to distribution and servicing obligations that were satisfied during prior periods.

We also recognize the corresponding costs paid to the third-party financial intermediaries that distribute these funds' share classes within the distribution and servicing costs line of the consolidated statements of income. The fee revenue that we recognize from the funds and the expense that we recognize for the fees paid to third-party intermediaries are equal in amount and, therefore, do not impact our net operating income.

Capital allocation-based income

This represents the income earned from general partner investments in affiliated private investment funds with arrangements that are entitled to a disproportionate allocation of income, which is also known as carried interest. As discussed above, these investments are accounted for under ASC 323 and the income recognized in capital allocation-based income in our consolidated statements of income represents the proportionate share of the income or loss assuming the funds were liquidated as of each reporting date pursuant to the fund's governing agreements. The realization of accrued carried interest occurs over a number of years. Since this income is accounted for under ASC 323, it is outside the scope of ASC 606, Revenue Recognition. A portion of this income is allocated to non-controlling interest holders and is reflected as compensation expense.

Advertising

Costs of advertising are expensed the first time that the advertising takes place.

Long-term incentive compensation

We maintain two stockholder-approved employee long-term incentive plans (2020 Long-Term Incentive Plan and 2012 Long-Term Incentive Plan (collectively, the LTI Plans), and two stockholder-approved non-employee director plans (2017 Non-Employee Director Equity Plan and 2007 Non-Employee Director Equity Plan, collectively the Director Plans). We believe our stock-based compensation programs align the interests of our employees and directors with those of our common stockholders. As of December 31, 2025, a total of 7,947,644 shares were available for future grant under the 2020 Long-Term Incentive Plan (2020 Plan) and the 2017 Non-Employee Director Equity Plan (2017 Plan).

Under our LTI Plans, we have granted restricted stock units to employees that settle in shares of our common stock after vesting. Vesting of these awards is based on the individual continuing to render service over an average five-year graded schedule. All restricted stock unit holders receive non-forfeitable cash dividend equivalents on our dividend payable date. We are also authorized to grant qualified incentive and nonqualified fixed stock options with a maximum term of 10 years. We have not granted options to employees since 2015.

We also grant performance-based restricted stock units to certain executive officers in which the number of restricted stock units ultimately retained is determined based on achievement of certain performance thresholds. These awards have a three-year performance period followed by a two-year time-based requirement for those units that are retained. Cash dividend equivalents are accrued and paid to the holders of performance-based restricted stock units only after the performance period has lapsed and the performance thresholds have been met.

In 2024, the 2020 Plan was amended to provide certain employees the opportunity to receive 50 % of their annual long-term incentive award in the form of restricted fund units. Vesting of restricted fund units is based on the
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individual continuing to render service over an average five-year graded schedule. These awards settle in cash upon vesting.

Under the Director Plans, we have granted options with a maximum term of 10 years, restricted shares, and restricted stock units to non-employee directors. Under the 2017 Plan, awards generally vest over one year and, in the case of restricted stock units, are settled upon the non-employee directors’ departure from the Board. For restricted shares, cash dividends are accrued and paid only after the award vests. Restricted stock unit holders receive dividend equivalents in the form of unvested stock units that vest over the same period as the underlying award. We have not granted options to non-employee directors since 2016. As of December 31, 2025, the non-employee directors held 17,668 outstanding stock options, all of which will expire in 2026, 102,459 vested stock units, 14,745 unvested stock units, and 10,785 unvested restricted stock awards. The unvested awards are expected to vest over the next six months and the stock units will convert to common shares upon their separation from the Board.

Our long-term incentive equity award values are converted to restricted stock units or stock awards on the grant-date using the closing market price of our common stock. For restricted fund units, the award value is converted using the closing market price of one or more hypothetical funds selected by employees from a group of sponsored investment products prior to the grant date. We recognize the grant-date fair value of all long-term incentive awards as compensation expense ratably over the awards' requisite service period. Compensation expense recognized for performance-based restricted units includes an estimate regarding the probability of the performance thresholds being met. For restricted fund units, their value is remeasured against the hypothetical funds chosen by the unit holder each reporting period and the adjustment reported in compensation expense over the requisite service period. We account for all award forfeitures as they occur.

Earnings per share

We compute our basic and diluted earnings per share under the two-class method, which considers our outstanding restricted shares and stock units, on which we pay non-forfeitable dividends as if they were a separate class of stock.

Comprehensive income

The components of comprehensive income are presented in a separate statement following our consolidated statements of income and include net income and the change in our currency translation adjustments. The currency translation adjustments result from translating our proportionate share of the financial statements of our equity method investment in UTI, and certain consolidated investment products into U.S. dollars. Assets and liabilities are translated into U.S. dollars using year-end exchange rates, and revenues and expenses are translated using weighted-average exchange rates for the period.

The changes in accumulated balances of each component of other comprehensive income, the deferred tax impacts of each component, and information about significant items reclassified out of accumulated other comprehensive income are presented in the notes to the consolidated financial statements. The notes also indicate the line item of our consolidated statements of income in which significant reclassifications were recognized.

We reclassify income tax effects relating to currency translation adjustments to tax expense when there is a reduction in our ownership interest in the related investment. The amount of the reclassification depends on the investment’s accounting treatment before and after the change in ownership percentage.

NOTE 2 – CASH EQUIVALENTS.

Cash equivalent investments in the T. Rowe Price money market mutual funds aggregate to $ 3,049.0 million at December 31, 2025, and $ 2,309.8 million at December 31, 2024. Dividends earned on these investments totaled $ 123.8 million in 2025, $ 128.3 million in 2024, and $ 101.3 million in 2023.

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NOTE 3 – INFORMATION ABOUT RECEIVABLES, REVENUES, AND SERVICES.

Net revenues earned during the years ended December 31, 2025, 2024 and 2023, are included in the table below along with details of investment advisory revenues by underlying asset class. We also included average assets under management by asset class, on which we earn investment advisory fees.

(in millions) 2025 2024 2023
Investment advisory fees
Equity $ 3,923.7   $ 3,864.7   $ 3,442.3  
Fixed income, including money market 433.0   410.7   400.4  
Multi-asset 1,910.6   1,814.1   1,583.4  
Alternatives 335.0   310.2   283.4  
Total investment advisory fees $ 6,602.3   $ 6,399.7   $ 5,709.5  
Performance-based advisory fees 37.4   59.3   38.2  
Capital allocation-based income 81.2   46.6   161.9  
Administrative, distribution, services, and other fees 593.9   588.0   550.9  
Net revenues $ 7,314.8   $ 7,093.6   $ 6,460.5  

Average AUM (in billions) :

Equity $ 840.9   $ 804.3   $ 705.2  
Fixed income, including money market 201.0   178.6   169.3  
Multi-asset 580.7   529.0   442.3  
Alternatives 54.7   50.0   45.5  
Average AUM $ 1,677.3   $ 1,561.9   $ 1,362.3  

Total net revenues earned from sponsored investment products totaled $ 6,128.1 million in 2025, $ 5,859.8 million in 2024, and $ 5,327.9  million in 2023. Accounts receivable from these products aggregate to $ 664.2  million at December 31, 2025 and $ 602.0 million at December 31, 2024.

Investors that we serve are primarily domiciled in the U.S.; investment advisory clients outside the U.S. account for 8.8 % at December 31, 2025 and December 31, 2024 of our assets under management.

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NOTE 4 – INVESTMENTS.

The carrying values of our investments that are not consolidated investment products at December 31 are as follows:

(in millions) 2025 2024
Investments held at fair value
T. Rowe Price investment products
Discretionary investments $ 463.7   $ 258.8  
Redeemable seed capital investments 316.1   262.8  
Investments used to hedge the deferred compensation liabilities 1,243.3   992.8  
Investment partnerships and other investments 154.7   62.6  
Investments in affiliated collateralized loan obligations 3.2   6.3  
Equity method investments
T. Rowe Price investment products
Discretionary investments —   60.8  
Redeemable seed capital investments 8.3   128.8  
Investments used to hedge the deferred compensation liabilities —   88.4  
Investment in UTI Asset Management Company Limited (India) 162.8   173.5  
Investments in affiliated private investment funds - carried interest 390.3   426.9  
Investments in affiliated private investment funds - seed/co-investment 304.7   269.9  

Investment partnerships and other investments 204.9   162.1  
Held to maturity
Investments in affiliated collateralized loan obligations 21.8   61.1  
Certificates of deposit 50.4   44.7  
U.S. Treasury note 1.0   1.0  
Total $ 3,325.2   $ 3,000.5  

During each of the last three years, certain T. Rowe Price investment products in which we provided initial seed capital at the time of formation were deconsolidated, as we no longer had a controlling interest. Depending on our ownership interest, we report our residual interests in these T. Rowe Price investment products as either an equity method investment or an investment held at fair value. T he net impact on our consolidated balance sheets and statements of income as of the dates the products were deconsolidated or reconsolidated is detailed below.

(in millions) 2025 2024 2023
Net decrease in assets of consolidated investment products $ ( 1,186.4 ) $ ( 673.9 ) $ ( 663.8 )
Net decrease in liabilities of consolidated investment products $ ( 43.8 ) $ ( 20.5 ) $ ( 29.7 )
Net decrease in redeemable non-controlling interests $ ( 595.0 ) $ ( 272.8 ) $ ( 479.2 )

Net gains (losses) recognized upon deconsolidation $ 3.1   $ ( 0.4 ) $ —  

The net gains (losses) recognized upon deconsolidation were the result of reclassifying currency translation adjustments accumulated on certain consolidated investment products with non-USD functional currencies from accumulated other comprehensive income to non-operating income.

INVESTMENTS AT FAIR VALUE

The investment partnerships and other investments held at fair value are valued using net asset value (NAV) per share as a practical expedient or using the measurement alternative. Our interests in the investment partnerships are generally not redeemable and are subject to significant transferability restrictions. The underlying investments of these partnerships have contractual terms through 2034, though we may receive distributions of liquidating assets
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over a longer term. The investment strategies of these partnerships include growth equity, buyout, venture capital, and real estate.

During 2025, we recognized $ 142.6 million of net unrealized gains on investments held at fair value that were still held at December 31, 2025. For 2024, we recognized $ 51.3 million of net unrealized gains on investments held at fair value that were still held at December 31, 2024. For 2023, we recognized $ 86.7 million of net unrealized gains on investments held at fair value that were still held at December 31, 2023.

Dividends, including capital gain distributions, earned on the sponsored investment products held at fair value, totaled $ 84.6 million in 2025, $ 67.6 million in 2024, and $ 38.2 million in 2023.

VARIABLE INTEREST ENTITIES.
Our fair value and equity method investments at December 31, 2025 and 2024 include interests in variable interest entities that we do not consolidate as we are not deemed the primary beneficiary. Our maximum risk of loss related to our involvement with these entities is as follows:

(in millions) 2025 2024
Investment carrying values $ 978.7   $ 955.9  
Unfunded capital commitments 199.3   202.5  
Accounts receivable 113.3   96.2  
Maximum risk of loss $ 1,291.3   $ 1,254.6  

We have unfunded capital commitments, totaling $ 199.3 million at December 31, 2025 and $ 202.5 million at December 31, 2024, related primarily to the affiliated private investment funds and the investment partnerships in which we have an existing investment. In addition to such amounts, a percentage of prior distributions may be recalled under certain circumstances.

Investments in affiliated private investment funds - carried interest represent interests in the general partners of affiliated private investment funds that are entitled to a disproportionate allocation of income, also known as carried interest. The entities that hold these interests (carried interest entities) are considered variable interest entities and are consolidated as T. Rowe Price is determined to be the primary beneficiary. The total assets, liabilities and non-controlling interests of these carried interest entities as of December 31 are as follows:

(in millions) 2025 2024
Assets $ 438.7   $ 467.7  
Liabilities $ 5.8   $ 0.4  
Non-controlling interest $ 157.1   $ 160.7  

INVESTMENTS IN AFFILIATED COLLATERALIZED LOAN OBLIGATIONS.

These investments represent European CLOs that invest in 5 % vertical strips in each class of rated notes and subordinated notes. Certain investments in the debt tranches of the CLOs are measured at amortized cost as investments held to maturity and included in investments in our consolidated balance sheets. The subordinated note tranches of these investments are held at fair value and any gain or loss is included in non-operating income (loss) in the consolidated statements of income. Certain of the investments in the debt tranches of the CLOs have been pledged as collateral against repurchase agreements.

There is debt associated with our investments in affiliated collateralized loan obligations. The debt outstanding is related to repurchase agreements of € 18.6  million at December 31, 2025, compared to € 56.9  million at December 31, 2024 (equivalent to $ 21.8 million at December 31, 2025 and $ 59.1 million at December 31, 2024 at the respective EUR spot rates) that are collateralized by the CLO investments and reported in accounts payable and accrued expenses in our consolidated balance sheets. These repurchase agreements bear interest at rates based on EURIBOR plus the initial margin, which equals all-in rates ranging from 2.99 % to 10.88 % as of December 31, 2025. The debt matures on various dates through 2035 or if the investments are paid back in full or cancelled, whichever is sooner.

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NOTE 5 – FAIR VALUE MEASUREMENTS.

We determine the fair value of our cash equivalents and certain investments held at fair value using the following broad levels of inputs as defined by related accounting standards:

Level 1 – quoted prices in active markets for identical financial instruments accessible at the reporting date.
Level 2 – observable inputs other than Level 1 quoted prices including, but not limited to, quoted prices for similar financial instruments in active markets, quoted prices for identical or similar financial instruments in inactive markets, interest rates and yield curves, implied volatilities, and credit spreads. These inputs are based on market data obtained from independent sources.
Level 3 – unobservable inputs reflecting our own assumptions based on the best information available. The inputs into the determination of fair value require significant management judgment or estimation. Investments in this category generally include investments for which there is not an actively-traded market. There are no level 3 investments at December 31, 2025 and 2024.

These levels are not necessarily an indication of the risk or liquidity associated with our investments. The following table summarizes our investments and liabilities that are recognized in our consolidated balance sheets at December 31 using fair value measurements determined based on the differing levels of inputs. This table excludes investments held by the consolidated investment products, which are presented separately in our consolidated balance sheets and are detailed in Note 6.

2025 2024
(in millions) Level 1 Level 2 Level 1 Level 2
T. Rowe Price investment products
Cash equivalents held in money market funds $ 3,049.0   $ —   $ 2,309.8   $ —  
Discretionary investments 463.7   —   258.8   —  
Redeemable seed capital investments 258.6   57.5   209.4   53.4  
Investments used to hedge the deferred compensation liabilities 1,243.3   —   992.8   —  
 Other investments 0.3   —   0.1   —  
Investments in affiliated collateralized loan obligations —   3.2   —   6.3  
Total $ 5,014.9   $ 60.7   $ 3,770.9   $ 59.7  

The fair value hierarchy level table above does not include the investment partnerships and other investments for which fair value is estimated using their NAV per share as a practical expedient or the measurement alternative. The carrying value of these investments as disclosed in Note 4 were $ 154.4 million at December 31, 2025 and $ 62.5 million at December 31, 2024.

In 2025, 2024, and 2023, we recognized impairment charges on certain of our identified intangible assets. As part of the impairment recognition, a fair value measurement was determined for these intangible assets. See Note 9 for further discussion of the impairments.

NOTE 6 – CONSOLIDATED INVESTMENT PRODUCTS.

The investment products that we consolidate in our consolidated financial statements are generally those products we provided initial seed capital at the time of their formation and have a controlling interest. Our U.S. mutual funds and certain other products are considered voting interest entities, while those regulated outside the U.S. are considered variable interest entities.

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The following table details the net assets of the consolidated investment products at December 31:

2025 2024
(in millions) Voting interest entities Variable interest entities Total Voting interest entities Variable interest entities Total
Cash and cash equivalents (1)
$ 3.0   $ 36.1   $ 39.1   $ 7.2   $ 55.9   $ 63.1  
Investments (2)
344.3   1,541.2   1,885.5   470.8   1,465.4   1,936.2  
Other assets 7.6   18.8   26.4   10.4   34.3   44.7  
Total assets 354.9   1,596.1   1,951.0   488.4   1,555.6   2,044.0  
Liabilities 7.1   14.2   21.3   15.9   46.2   62.1  
Net assets $ 347.8   $ 1,581.9   $ 1,929.7   $ 472.5   $ 1,509.4   $ 1,981.9  

Attributable to T. Rowe Price Group $ 269.8   $ 623.9   $ 893.7   $ 348.5   $ 689.4   $ 1,037.9  
Attributable to redeemable non-controlling interests 78.0   958.0   1,036.0   124.0   820.0   944.0  
$ 347.8   $ 1,581.9   $ 1,929.7   $ 472.5   $ 1,509.4   $ 1,981.9  

(1) Cash and cash equivalents includes $ 2.5 million at December 31, 2025 and $ 4.9 million at December 31, 2024 of investments in
T. Rowe Price money market mutual funds.
(2) Investments include $ 61.7 million at December 31, 2025 and $ 9.3 million at December 31, 2024 of other T. Rowe Price investment products.

Although we can generally redeem our net interest in the consolidated investment products at any time, we cannot directly access or sell the assets held by these products to obtain cash for general operations. Additionally, the assets of these investment products are not available to our general creditors.

Since third-party investors in these investment products have no recourse to our credit, our overall risk related to the net assets of consolidated investment products is limited to valuation changes associated with our net interest. However, we are required to recognize the valuation changes associated with all underlying investments held by these products in our consolidated statements of income and disclose the portion attributable to unrelated third-party investors as net income attributable to redeemable non-controlling interests.

The operating results of the consolidated investment products are reflected in our consolidated statements of income for the year ended December 31 as follows:

2025 2024 2023
(in millions) Voting interest entities Variable interest entities Total Voting interest entities Variable interest entities Total Voting interest entities Variable interest entities Total
Operating expenses reflected in net operating income $ ( 0.6 ) $ ( 9.2 ) $ ( 9.8 ) $ ( 2.4 ) $ ( 7.4 ) $ ( 9.8 ) $ ( 3.7 ) $ ( 7.4 ) $ ( 11.1 )
Net investment income (loss) reflected in non-operating income (loss) 30.9   189.0   219.9   41.7   88.6   130.3   52.4   112.2   164.6  
Impact on income before taxes $ 30.3   $ 179.8   $ 210.1   $ 39.3   $ 81.2   $ 120.5   $ 48.7   $ 104.8   $ 153.5  

Net income (loss) attributable to T. Rowe Price Group $ 22.7   $ 66.2   $ 88.9   $ 31.4   $ 53.4   $ 84.8   $ 40.9   $ 65.6   $ 106.5  
Net income (loss) attributable to redeemable non-controlling interests 7.6   113.6   121.2   7.9   27.8   35.7   7.8   39.2   47.0  
$ 30.3   $ 179.8   $ 210.1   $ 39.3   $ 81.2   $ 120.5   $ 48.7   $ 104.8   $ 153.5  

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The operating expenses of the consolidated investment products are reflected in general, administrative and other expenses. In preparing our consolidated financial statements, we eliminated operating expenses of $ 4.2 million in 2025, $ 3.6 million in 2024, and $ 2.1 million in 2023, against the investment advisory and administrative fees earned from these products. The net investment income (loss) reflected in non-operating income (loss) includes dividend and interest income as well as realized and unrealized gains and losses on the underlying securities held by the consolidated investment products.

The following table details the impact of these consolidated investment products on the individual lines of our consolidated statements of cash flows.

2025 2024 2023
(in millions) Voting interest entities Variable interest entities Total Voting interest entities Variable interest entities Total Voting interest entities Variable interest entities Total
Net cash provided by (used in) operating activities $ ( 370.5 ) $ ( 426.8 ) $ ( 797.3 ) $ ( 239.4 ) $ ( 394.4 ) $ ( 633.8 ) $ ( 517.5 ) $ ( 371.4 ) $ ( 888.9 )
Net cash provided by (used in) investing activities 0.6   ( 63.7 ) ( 63.1 ) ( 14.7 ) ( 1.1 ) ( 15.8 ) ( 32.7 ) ( 24.1 ) ( 56.8 )
Net cash provided by (used in) financing activities 365.7   472.6   838.3   235.6   402.3   637.9   559.7   343.7   903.4  
Effect of exchange rate changes on cash and cash equivalents of consolidated investment products —   ( 1.9 ) ( 1.9 ) —   ( 2.4 ) ( 2.4 ) —   0.4   0.4  
Net change in cash and cash equivalents during period ( 4.2 ) ( 19.8 ) ( 24.0 ) ( 18.5 ) 4.4   ( 14.1 ) 9.5   ( 51.4 ) ( 41.9 )
Cash and cash equivalents at beginning of year 7.2   55.9   63.1   25.7   51.5   77.2   16.2   102.9   119.1  
Cash and cash equivalents at end of year $ 3.0   $ 36.1   $ 39.1   $ 7.2   $ 55.9   $ 63.1   $ 25.7   $ 51.5   $ 77.2  

The net cash provided by financing activities includes $ 295.1 million in 2025, $ 31.7 million in 2024 and $ 544.6 million in 2023, of net subscriptions we made into the consolidated investment products, net of dividends received. These cash flows were eliminated in consolidation.

FAIR VALUE MEASUREMENTS.

We determine the fair value of investments held by consolidated investment products using the following broad levels of inputs as defined by related accounting standards:

Level 1 – quoted prices in active markets for identical financial instruments accessible at the reporting date.
Level 2 – observable inputs other than Level 1 quoted prices including, but not limited to, quoted prices for similar financial instruments in active markets, quoted prices for identical or similar financial instruments in inactive markets, interest rates and yield curves, implied volatilities, and credit spreads. These inputs are based on market data obtained from independent sources.
Level 3 – unobservable inputs reflecting our own assumptions based on the best information available. The inputs into the determination of fair value require significant management judgment or estimation. Investments in this category generally include investments for which there is not an actively-traded market. There are no level 3 investments at December 31, 2025 and 2024.

These levels are not necessarily an indication of the risk or liquidity associated with these investment holdings. The following table summarizes the investment holdings held by our consolidated investment products using fair value measurements determined based on the differing levels of inputs as of December 31.
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2025 2024
(in millions) Level 1
Level 2
Level 1
Level 2

Assets
Cash equivalents $ 2.8   $ —   $ 6.3   $ —  
Equity securities 475.2   376.5   452.3   285.4  
Fixed income securities —   1,002.5   —   1,173.5  
Other investments 0.4   30.9   1.6   23.4  
$ 478.4   $ 1,409.9   $ 460.2   $ 1,482.3  

Liabilities $ ( 0.3 ) $ ( 5.1 ) $ ( 1.7 ) $ ( 14.5 )

NOTE 7 – LEASES.
All of our leases are operating leases and primarily consist of real estate leases for corporate offices, data centers, and other facilities.
At December 31, 2025, the weighted-average remaining lease term on our leases is 11.9 years and the weighted-average discount rate used to measure the lease liabilities is 4.0 %.

Operating lease expense was $ 56.0 million in 2025, $ 42.2 million in 2024, and $ 52.4 million in 2023. Charges related to our operating leases that are variable, including certain maintenance charges and other management-related costs, and not included in the measurement of the lease liabilities, were $ 19.4 million in 2025, $ 14.1 million in 2024, and $ 11.2 million in 2023. We made lease payments of $ 53.0 million during 2025, $ 59.6 million during 2024, and $ 42.4 million during 2023.

Our future undiscounted cash flows related to our operating leases, and the reconciliation to the operating lease liability as of December 31, 2025, are as follows:

(in millions) 2025

2026 $ 56.0  
2027 56.0  
2028 51.6  
2029 42.8  
2030 40.4  
Thereafter 317.2  
Total future undiscounted cash flows 564.0  
Less: imputed interest to be recognized in lease expense ( 116.8 )
Operating lease liabilities, as reported $ 447.2  

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NOTE 8 – PROPERTY, EQUIPMENT AND SOFTWARE.

Property, equipment and software at December 31 consists of:  

(in millions) 2025 2024
Computer and communications software and equipment $ 1,847.9   $ 1,680.3  
Buildings and improvements 466.1   493.2  
Leasehold improvements 407.1   414.0  
Furniture and other equipment 252.4   225.3  
Land 22.5   25.7  

2,996.0   2,838.5  
Less accumulated depreciation and amortization 2,150.7   1,861.5  
Total $ 845.3   $ 977.0  

Compensation and related costs attributable to the development of computer software for internal use, totaling $ 168.7 million in 2025, $ 182.0 million in 2024, and $ 156.1 million in 2023, have been capitalized.

In the fourth quarter of 2025, we executed several initiatives as part of our broad and ongoing plan to reduce expense growth and realign resources to invest in existing and future capabilities. These actions included a decision to exit two buildings, with plans to dispose of the properties in 2026, resulting in accelerated depreciation equal to their carrying value of $ 92.3  million as of December 31, 2025. We also recorded impairments on additional real estate holdings to align their carrying values with prevailing market conditions as a result of being held for sale as of December 31, 2025. In aggregate, these actions resulted in charges of $ 127  million in the fourth quarter of 2025, which were recognized in the restructuring charge of the consolidated statements of income.

NOTE 9 – GOODWILL AND INTANGIBLE ASSETS.

Goodwill and intangible assets consist of the following at December 31:

(in millions) 2025 2024
Goodwill $ 2,642.8   $ 2,642.8  
Indefinite-lived intangible assets - trade name 86.0   86.0  
Indefinite-lived intangible assets - investment advisory agreements 62.3   65.6  
Definite-lived intangible assets - investment advisory agreements 125.9   216.5  
Total $ 2,917.0   $ 3,010.9  

We evaluate the carrying amount of goodwill in our consolidated balance sheets for possible impairment on an annual basis in the fourth quarter using a fair value approach. We did no t record any impairment charges for goodwill for the years ended December 31, 2025, 2024, or 2023.

We recognized impairments of indefinite-lived intangibles of $ 3.3 million in 2025, $ 31.1 million in 2024, and no impairments in 2023. The $ 3.3 million impairment in 2025 was attributable to investment advisory agreements while the $ 31.1 million impairment in 2024 was attributable to the trade name. The impairments in 2025 and 2024 were the result of reduced growth expectations for both management and incentive fees.

Definite-lived investment advisory agreement intangible assets consisted of the following at December 31 :

(in millions) 2025 2024
Gross carrying amount $ 613.9   $ 613.9  
Accumulated amortization & impairments ( 488.0 ) ( 397.4 )
Net carrying amount $ 125.9   $ 216.5  

Remaining weighted-average estimated useful life in years 2.8 3.7

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Amortization and impairment expense for the definite-lived investment advisory agreement intangible assets was $ 90.6  million in 2025, $ 108.1  million in 2024, and $ 122.5  million in 2023, respectively. We recognized insignificant impairments of definite-lived intangibles in 2025, 2024, and 2023. Estimated amortization expense for the definite-lived investment advisory agreements intangible assets for the remaining years is as follows:

(in millions) 2025
2026 $ 54.6  
2027 39.1  
2028 11.8  
2029 8.8  
2030 and after 11.6  
$ 125.9  

NOTE 10 – INCOME TAXES.

Income before income taxes for each of the past three years was earned almost entirely in the United States.

INCOME TAX PROVISION.

The provision for income taxes consists of:

(in millions) 2025 2024 2023
Current income taxes
U.S. federal $ 434.5   $ 634.7   $ 554.0  
State and local 91.2   112.4   68.1  
Foreign 44.7   24.7   23.9  
Deferred income taxes (benefits) 96.8   ( 88.0 ) 8.6  
Total $ 667.2   $ 683.8   $ 654.6  

In 2025 and 2023, stock-based compensation plans activity increased income tax expense by $ 3.2 million and $ 3.4 million, respectively. In 2024, stock-based compensation plans activity decreased income tax expense by $ 4.5 million. These income tax impacts were recognized in the income tax provision.

The following table reconciles the statutory federal income tax rate to our effective income tax rate.  

2025 2024 2023
Amount Percent Amount Percent Amount Percent
Statutory U.S. federal income tax rate $ 603.8   21.0   % $ 592.1   21.0   % $ 523.0   21.0   %
U.S. federal
Net income (loss) attributable to redeemable non-controlling interests (1)
( 25.5 ) ( 0.9 ) ( 7.5 ) ( 0.3 ) ( 9.9 ) ( 0.4 )
Net excess tax benefits from stock-based compensation plans activity 1.4   —   ( 4.0 ) ( 0.1 ) 2.8   0.1  
Other ( 0.7 ) —   ( 0.5 ) ( 0.1 ) ( 7.8 ) ( 0.3 )
State and local income taxes, net of federal effect 58.2   2.1   79.9   2.9   55.8   2.3  

Foreign tax effects

United Kingdom: changes in valuation allowances 13.1   0.4   10.8   0.4   81.1   3.3  

Other 16.9   0.6   13.0   0.5   9.6   0.3  

Effective income tax $ 667.2   23.2   % $ 683.8   24.3   % $ 654.6   26.3   %

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(1) Net income attributable to redeemable non-controlling interests represents the portion of earnings held in the firm's consolidated investment products, which are not taxable to the firm despite being included in pre-tax income.

In each of 2023, 2024, and 2025, more than 50% of our state and local tax expense was attributable to a concentrated group of jurisdictions. For 2023 and 2025, these jurisdictions were Maryland, California, New York City, and New Jersey, and for 2024 they were Maryland, California, New York City, and New York State.

Deferred income taxes (benefits) arise from temporary differences between taxable income for financial statement and income tax return purposes. The deferred income taxes (benefits) recognized as part of our provision for income taxes is related to:

(in millions) 2025 2024 2023
Property, equipment and software $ 149.8   $ ( 60.3 ) $ ( 43.2 )
Accrued, deferred, and long-term incentive compensation ( 20.0 ) ( 14.2 ) ( 28.6 )
Operating lease assets 33.9   ( 1.7 ) ( 6.3 )
Operating lease liabilities ( 41.7 ) 5.0   3.8  
Acquisition-related liabilities ( 13.5 ) ( 9.8 ) 0.6  

Acquired investments ( 5.3 ) ( 27.9 ) ( 19.5 )
Unrealized gains (losses) recognized in non-operating income 16.6   16.8   43.8  
Net operating losses ( 15.8 ) ( 11.2 ) ( 31.5 )
Change in valuation allowances 11.2   16.1   86.4  

Other ( 18.4 ) ( 0.8 ) 3.1  
Total net deferred income taxes (benefits) $ 96.8   $ ( 88.0 ) $ 8.6  

DEFERRED TAX ASSETS (LIABILITIES).

The net deferred tax assets recognized in our consolidated balance sheets in other assets as of December 31 relate to the following:  

(in millions) 2025 2024
Deferred tax assets
Accrued, deferred, and long-term incentive compensation $ 337.7   $ 317.7  
Operating lease liability 81.5   39.8  
Acquired investments 71.7   66.4  
Net operating loss carry-forwards 64.8   53.7  

Property, equipment and software —   90.9  
Other 27.0   12.9  
Total deferred tax assets 582.7   581.4  
Valuation allowances ( 130.1 ) ( 118.9 )
Total deferred tax assets, net of valuation allowances 452.6   462.5  

Deferred tax liabilities

Operating lease assets ( 75.0 ) ( 41.1 )
Unrealized gains (losses) recognized in non-operating income ( 66.6 ) ( 50.0 )
Acquisition-related liabilities ( 64.0 ) ( 77.5 )

Property, equipment and software ( 58.9 ) —  

Other —   ( 15.9 )
Total deferred tax liabilities ( 264.5 ) ( 184.5 )
Net deferred tax assets $ 188.1   $ 278.0  

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We had operating loss carryforwards before tax of $ 211.2  million at December 31, 2025 and $ 220.0  million at December 31, 2024. The decrease in operating loss carryforwards from 2024 is primarily related to operating income generated from our Hong Kong subsidiary. Almost all of the operating loss carryforwards are attributable to the United Kingdom and do not expire. However, the amount of annual profits that can be relieved by losses carried forward is limited to 50%, subject to an annual allowance of GBP 5 million per group.

We consider the need for valuation allowances against our deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. The valuation allowances total $ 130.1  million at December 31, 2025 and $ 118.9  million at December 31, 2024. The increase of $ 11.2  million in the valuation allowances was due to the uncertainty of generating sufficient taxable income in future periods in certain foreign jurisdictions. Any additional or reversal of valuation allowances in future periods will be dependent on the generation of sufficient taxable income. The future change in the valuation allowance could materially increase or decrease our income tax expenses in future periods.

We intend to repatriate earnings of T. Rowe Price foreign subsidiaries to the U.S. in an amount not to exceed these subsidiaries' previously taxed earnings and profits (PTEP), which are estimated to be approximately $ 1,138 million at December 31, 2025. These earnings as well as our pro rata share of the earnings of foreign corporations in which T. Rowe Price owns 10 % or more were subject to the repatriation tax enacted with the U.S. tax reform and are treated as PTEP. As such, we did not record a deferred tax liability with respect to the U.S. federal or foreign withholding taxes as the PTEP should not be taxed in these jurisdictions.

OTHER DISCLOSURES.

The following table summarizes the net income taxes paid:

(in millions) 2025 2024 2023
U.S. federal taxes $ 469.8   $ 610.5   $ 529.4  
All other jurisdictions 125.6   112.7   102.6  
Total taxes paid $ 595.4   $ 723.2   $ 632.0  

Other assets include tax refund receivables of $ 50.2 million at December 31, 2025, and $ 52.4 million at December 31, 2024.

UNRECOGNIZED TAX BENEFITS.

The following table summarizes the changes in our unrecognized tax benefits.  

(in millions) 2025 2024 2023
Balance at beginning of year $ 43.0   $ 42.7   $ 35.4  
Changes in tax positions related to
Current year 2.5   4.2   7.8  
Prior years ( 18.1 ) ( 2.9 ) 0.5  
Expired statute of limitations ( 1.3 ) ( 1.0 ) ( 1.0 )
Balance at end of year $ 26.1   $ 43.0   $ 42.7  

The decrease of unrecognized tax benefits related to prior years is due to the settlements of certain state tax benefits. If recognized, these unrecognized tax benefits would affect our effective tax rate; however, we do not expect that unrecognized tax benefits for tax positions taken with respect to 2025 and prior years will significantly change in 2026. As of January 2026, the U.S. Internal Revenue Service (IRS) has concluded examinations related to federal tax obligations through the year 2023.

A net interest payable related to our unrecognized tax benefits of $ 5.6 million at December 31, 2025, and $ 8.6 million at December 31, 2024, are recognized in our consolidated balance sheets. Our accounting policy with
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respect to interest and penalties arising from income tax settlements is to recognize them as part of our provision for income taxes. Interest recognized as part of our provision for income taxes was not material.

NOTE 11 – STOCKHOLDERS' EQUITY.

SHARE REPURCHASES.

The Board of Directors has authorized the future repurchase of up to 12,201,846 common shares as of December 31, 2025.

Accounts payable and accrued expenses includes liabilities of $ 6.9 million at December 31, 2025 for common stock repurchases that settled during the first week of January 2026 and 2025 stock repurchase excise tax obligations that will impact cash flows in the first half of 2026.

RESTRICTED CAPITAL.

Our consolidated stockholders' equity at December 31, 2025 includes about $ 396 million that is restricted as to use by various regulations and agreements arising in the ordinary course of our business.

NOTE 12 – LONG-TERM INCENTIVE COMPENSATION.

SHARES AUTHORIZED FOR STOCK-BASED COMPENSATION PROGRAMS.

At December 31, 2025, a total of 14,000,868 shares of unissued common stock were authorized for issuance under our stock-based compensation plans. Additionally, a total of 2,446,539 shares are authorized for issuance under a plan whereby substantially all employees may acquire common stock through payroll deductions at prevailing market prices.

STOCK OPTIONS.

The following table summarizes the status of, and changes in, our stock options during 2025.

Options Weighted-
average
exercise
price Weighted-average
remaining
contractual
term in
years
Outstanding at December 31, 2024 661,377   $ 73.76  

Exercised ( 642,149 ) $ 73.89  

Expired ( 1,560 ) $ 79.71  
Outstanding and exercisable at December 31, 2025 17,668   $ 68.49   0.6

There was no stock option-based compensation expense in 2025, 2024, or 2023.

The total intrinsic value of options exercised was $ 21.2 million in 2025, $ 27.7 million in 2024, and $ 30.6 million in 2023. At December 31, 2025, the aggregate intrinsic value of in-the-money options outstanding was $ 0.6 million.

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RESTRICTED STOCK UNITS.

The following table summarizes the status of, and changes in, our nonvested restricted stock units during 2025.  

Restricted
stock
units Weighted-
average
fair value
Nonvested at December 31, 2024 6,001,579   $ 124.73  
Time-based grants 1,969,573   $ 104.97  
Performance-based grants 93,062   $ 105.05  
Vested (value at vest date was $ 184.6 million)
( 1,783,965 ) $ 134.70  

Forfeited ( 361,897 ) $ 125.45  
Nonvested at December 31, 2025 5,918,352   $ 114.80  

Nonvested at December 31, 2025 includes performance-based restricted stock units of 384,080 . These nonvested performance-based restricted stock units include 33,422 units for which the performance period has lapsed, and the performance threshold has been met.

Compensation and related costs includes expenses for stock-based awards of $ 216.9 million in 2025, $ 247.3 million in 2024, and $ 265.6 million in 2023.

FUTURE STOCK-BASED COMPENSATION EXPENSE.

The following table presents the compensation expense to be recognized over the requisite service period of the stock-based awards outstanding at December 31, 2025. Estimated future compensation expense will change to reflect future grants of restricted stock awards and units, future option grants, changes in the probability of performance thresholds being met and adjustments for actual forfeitures.

(in millions)
First quarter 2026 $ 53.4  
Second quarter 2026 49.0  
Third quarter 2026 43.3  
Fourth quarter 2026 37.6  
2027 81.2  
2028 through 2031 61.9  
Total $ 326.4  

RESTRICTED FUND UNITS.

We granted restricted fund units valued you at $ 102.2 million in December 2025 and $ 103.3 million in December 2024. Below is a roll forward of the restricted fund units liability, which is reported in deferred compensation liabilities on the consolidated balance sheet.

(in millions) 2025 2024
Balance at beginning of year $ 14.7   $ —  
Amortization of grant date value 54.6   14.8  
Amortization of market appreciation (depreciation) 7.9   ( 0.1 )
Forfeitures ( 0.1 ) —  
Settlements ( 22.4 ) —  
Balance at end of year $ 54.7   $ 14.7  

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The following table presents the compensation expense to be recognized over the requisite service period of the restricted fund units outstanding at December 31, 2025. Estimated future compensation expense will change to reflect future grants, changes in the market value of the restricted fund units, which is based on selected hypothetical investments and adjustments for actual forfeitures. The grants outstanding will vest by 2030.

(in millions)
First quarter 2026 $ 19.3  
Second quarter 2026 18.4  
Third quarter 2026 17.8  
Fourth quarter 2026 14.4  
2027 35.4  
2028 through 2030 31.8  
Total $ 137.1  

NOTE 13 – EARNINGS PER SHARE CALCULATIONS.

The following table presents the reconciliation of net income attributable to T. Rowe Price Group to net income allocated to our common stockholders and the weighted-average shares that are used in calculating the basic and diluted earnings per share on our common stock. Weighted-average common shares outstanding assuming dilution reflects the potential dilution, determined using the treasury stock method, that could occur if outstanding stock options were exercised and non-participating stock awards vested.

(in millions) 2025 2024 2023
Net income attributable to T. Rowe Price Group $ 2,087.1   $ 2,100.1   $ 1,788.7  
Less: net income allocated to outstanding restricted stock and stock unit holders 50.6   55.8   44.4  
Net income allocated to common stockholders $ 2,036.5   $ 2,044.3   $ 1,744.3  

Weighted-average common shares
Outstanding 220.0   222.8   224.1  
Outstanding assuming dilution 220.3   223.3   224.8  

For the past three years, no stock options have been excluded from the calculation of diluted earnings per common share they would not be anti-dilutive.

NOTE 14 – OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS.

The following table presents the impact of the components of other comprehensive income or loss on deferred tax benefits (income taxes).
 

(in millions) 2025 2024 2023
Net deferred tax benefits (income taxes) on:
Currency translation adjustments $ ( 2.8 ) $ 3.7   $ ( 2.0 )

Reclassification adjustment recognized in the provision for income taxes upon deconsolidation of investment products 1.4   —   0.1  

Total net deferred tax benefits (income taxes) $ ( 1.4 ) $ 3.7   $ ( 1.9 )

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The changes in each component of accumulated other comprehensive income (loss), including reclassification adjustments, are presented in the table below.

(in millions) Equity method investments Consolidated investment products - variable interest entities Total currency translation adjustments
Balances at December 31, 2022 $ ( 50.5 ) $ ( 2.5 ) $ ( 53.0 )

Other comprehensive income (loss) before income taxes ( 1.6 ) 9.0   7.4  

Net deferred tax benefits (income taxes) 0.2   ( 2.1 ) ( 1.9 )
Other comprehensive income (loss) ( 1.4 ) 6.9   5.5  
Balances at December 31, 2023 ( 51.9 ) 4.4   ( 47.5 )
Other comprehensive income (loss) before reclassifications 0.7   ( 9.0 ) ( 8.3 )
Reclassification adjustments recognized in non-operating income —   0.4   0.4  
Other comprehensive income (loss) before income taxes 0.7   ( 8.6 ) ( 7.9 )
Net deferred tax benefits (income taxes) 1.7   2.0   3.7  
Other comprehensive income (loss) 2.4   ( 6.6 ) ( 4.2 )
Balances at December 31, 2024 ( 49.5 ) ( 2.2 ) ( 51.7 )

Other comprehensive income (loss) before reclassifications ( 9.3 ) 15.0   5.7  
Reclassification adjustments recognized in non-operating income —   ( 3.1 ) ( 3.1 )
Other comprehensive income (loss) before income taxes ( 9.3 ) 11.9   2.6  
Net deferred tax benefits (income taxes) 1.4   ( 2.8 ) ( 1.4 )
Other comprehensive income (loss) ( 7.9 ) 9.1   1.2  

Balances at December 31, 2025
$ ( 57.4 ) $ 6.9   $ ( 50.5 )

The other comprehensive income (loss) in the table above excludes net gains of $ 9.8 million in 2025, net losses of $ 5.0 million in 2024, and net gains of $ 12.7 million in 2023 of other comprehensive income (loss) related to redeemable non-controlling interests held in our consolidated investment products.

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NOTE 15 – SEGMENT REPORTING.

We have one reportable segment: investment management services. We derive our revenue and net income globally and manage business activities on a consolidated basis.

We largely derive our revenues and net income from investment advisory services provided to individual and institutional investors. We also provide certain administrative services, including mutual fund transfer agent, fund and product accounting, distribution, and shareholder services; participant recordkeeping and transfer agent services for defined contribution retirement plans; and other advisory services. Our revenues and net income depend largely on the total value and composition of our assets under management, as such, the consideration for our services is generally variable and recognized over time.

Our chief operating decision maker (CODM) is the chief executive officer. The CODM utilizes consolidated net income attributable to T. Rowe Price Group as reported on the consolidated statements of income and certain non-GAAP metrics to assess performance and allocate resources. Based on these metrics, the CODM decides either to reinvest profits into the business based on our strategic priorities and/or return cash to stockholders through dividends and share repurchases.

We determined there are no significant segment expenses that require a separate disclosure, as the major categories of expenses regularly reviewed by the CODM to manage operations are disclosed in the consolidated statements of income. Quarterly reviews of expenses highlight those influenced by financial markets, such as distribution and servicing costs, as well as those that are both qualitatively and quantitatively significant. The measure of segment assets is reported on the consolidated balance sheet as total assets.

NOTE 16 – COMMITMENTS AND CONTINGENCIES.

COMMITMENTS.

T. Rowe Price Group has committed $ 287 million for investment in future OHA product launches through 2026.

CONTINGENCIES.

Contingent Consideration

As part of the purchase consideration for our acquisition of OHA in December 2021, there is contingent
consideration in the amount of up to $ 900 million, payable in cash, that may be due as part of an earnout payment in 2026 and 2027 upon satisfying or exceeding certain defined revenue targets. These defined revenue targets will be evaluated on a cumulative basis from 2022 through 2026. About 22 % of the earnout is conditioned upon continued service with T. Rowe Price Group and was excluded from the purchase consideration and deemed compensatory. The fair value of the earnout is remeasured each reporting period and was valued at zero as of December 31, 2025 and December 31, 2024.

Value Creation

In addition, simultaneously with the OHA acquisition, a Value Creation Agreement was entered into whereby certain employees of OHA will receive incentive payments equal to 10 % of the appreciated value of the OHA business on the fifth anniversary of the acquisition date, subject to an annualized preferred return to T. Rowe Price. This arrangement is treated as a post-combination compensation expense. This arrangement will be remeasured at fair value at each reporting date and recognized over the related service period. For the year ended December 31, 2025, 2024, and 2023, the amounts recognized as part of compensation expense in our consolidated statements of income were immaterial.

Other

Various claims against us arise in the ordinary course of business, including employment-related claims. In the opinion of management, after consultation with counsel, the likelihood of an adverse determination in one or more of these pending ordinary course of business claims that would have a material adverse effect on our financial position or results of operations is remote.

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Table of Contents                      

NOTE 17 – RESTRUCTURING CHARGE.

As separately disclosed in the consolidated statements of income, we recognized a restructuring charge of $ 177.3 million in 2025, related to actions taken under a broad and ongoing expense management program, which is designed to reduce expense growth and realign resources to support investment in existing and future capabilities. The charge includes accelerated depreciation and impairment charges related to certain owned real estate of $ 127.3  million as well as $ 50  million of compensation‑related costs, primarily severance. At December 31, 2025, we had $ 26.4  million accrued in accrued compensation and related costs. See Note 8 – Property, equipment, and software for additional details on the accelerated depreciation and impairment charges.

NOTE 18 – OTHER DISCLOSURES.

RETIREMENT PLANS.

Compensation and related costs includes expense recognized for our defined contribution retirement plans of $ 170.6 million in 2025, $ 162.0 million in 2024, and $ 152.5 million in 2023.

SUPPLEMENTAL SAVINGS PLAN.

The supplemental savings plan provides certain senior officers the opportunity to defer payment on up to 50 % of their annual cash incentive, limited to $ 2  million annually. The amounts deferred are adjusted in accordance with the hypothetical investments chosen by the officer from a list of T. Rowe Price products. The officer must specify if they would like to receive payment as a lump sum or up to ten annual installments upon separation of service. Additionally, the officer may elect to receive a lump sum payment while still employed in as little as five years .

Below is a roll forward of the supplement savings plan liability which is reported in deferred compensation liabilities on the consolidated balance sheets.

(in millions) 2025 2024
Balance at beginning of the year $ 1,006.0   $ 895.0  
Deferrals (including taxes) 68.2   53.4  
Market appreciation (depreciation), including foreign currency gains (losses) 128.6   104.3  
Distributions ( 80.7 ) ( 46.7 )
Balance at end of the year $ 1,122.1   $ 1,006.0  

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Stockholders and Board of Directors
T. Rowe Price Group, Inc.:

Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of T. Rowe Price Group, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 13, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the completeness and accuracy of assets under management data used in the calculation of investment advisory fee revenue
    
As discussed in Note 1 to the consolidated financial statements, the Company recognizes fees for its investment advisory agreements based on a percentage of its assets under management (AUM). AUM data represents a significant input to the calculation of investment advisory fees. The Company recognized $6.6 billion in investment advisory fees during the year ended December 31, 2025, which included revenue related to T. Rowe U.S. mutual funds (Funds).

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We identified the evaluation of the completeness and accuracy of AUM data for the Funds as a critical audit matter as AUM data is transmitted through multiple information technology (IT) systems used in the calculation of investment advisory fee revenue. Given the Company’s use of multiple IT systems, the nature and extent of audit effort involved in performing procedures to evaluate the completeness and accuracy of AUM data required the use of IT professionals with specialized skills and knowledge.

The following are the primary procedures we performed to address the critical audit matter. We evaluated the design and tested the operating effectiveness of certain controls over the Company’s revenue processes, including manual controls over the completeness and accuracy of AUM data. We involved IT professionals with specialized skills and knowledge, who assisted in the testing of general IT controls and the interface of data between multiple IT systems used to maintain AUM data. To assess the AUM data, we (1) compared AUM used in the calculation of a sample of investment advisory fees to the source IT systems, and (2) for a selection of Funds, compared AUM on select dates from the source IT system to the audited Fund financial statements.

/ s/ KPMG LLP

We have served as the Company’s auditor since 2001.

Baltimore, Maryland
February 13, 2026
 

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Our management, including our principal executive and principal financial officers, have evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. Based on that evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures as of December 31, 2025, are effective at the reasonable assurance level to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, including our Form 10-K annual report, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive and principal financial officers, have evaluated any change in our internal control over financial reporting that occurred during the fourth quarter of 2025, and has concluded that there was no change during the fourth quarter of 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s report on our internal control over financial reporting and the attestation report of KPMG LLP follow after Item 9C.

Item 9B. Other Information.

None .

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.
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REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Stockholders of T. Rowe Price Group, Inc.:

We, together with other members of management of T. Rowe Price Group, Inc., (the Company) are responsible for establishing and maintaining adequate internal control over the Company’s financial reporting. Internal control over financial reporting is the process designed under our supervision, and effected by the Company’s Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

There are inherent limitations in the effectiveness of internal control over financial reporting, including the possibility that misstatements may not be prevented or detected. Accordingly, even effective internal controls over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Furthermore, the effectiveness of internal controls can change with circumstances.

Management has evaluated the effectiveness of internal control over financial reporting as of December 31, 2025, in relation to criteria described in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on management’s assessment, we believe that the Company’s internal control over financial reporting was effective as of December 31, 2025.

KPMG LLP, an independent registered public accounting firm, has audited our financial statements that are included in this annual report and expressed an unqualified opinion thereon. KPMG has also expressed an unqualified opinion on the effective operation of our internal control over financial reporting as of December 31, 2025.

February 13, 2026

/s/ Robert W. Sharps
Chief Executive Officer and President

/s/ Jennifer B. Dardis
Vice President, Chief Financial Officer and Treasurer
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors
T. Rowe Price Group, Inc.:

Opinion on Internal Control Over Financial Reporting
We have audited T. Rowe Price Group, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.