Invesco Reports Results for the Three Months and Year Ended December 31, 2024

Invesco Announces Fourth Quarter Diluted EPS of $0.46; Adjusted Diluted EPS⁽¹⁾ of $0.52

ATLANTA, Jan. 28, 2025 -- Invesco Ltd. (NYSE: IVZ) today reported financial results for the three months and year ended December 31, 2024.

• $25.6 billion of net long-term inflows for the quarter, primarily driven by ETFs and APAC Managed
• $65.1 billion of net long-term inflows for the full year 2024, primarily driven by ETFs, APAC Managed, Fundamental Fixed Income and Private Markets
• $1.85 trillion in ending AUM, an increase of 2.8% from the prior quarter and an increase of 16.4% from the prior year-end
• 19.6% operating margin in Q4 2024; 33.7% adjusted operating margin⁽¹⁾
• Continued balance sheet strength - a zero balance on our credit facility and Cash and cash equivalents of $1 billion
• Repurchased 1.4 million common shares for $25 million during the quarter

Update from Andrew Schlossberg, President and CEO

"During the fourth quarter and throughout 2024, we continued to make meaningful progress in executing our strategic priorities and leveraging our competitive advantages to drive improved business performance. We generated profitable growth, helping drive higher operating income compared to the prior quarter and the prior year. The positive operating leverage we generated in 2024 improved operating margin to nearly 34% in the fourth quarter.  

We continued to drive strong net long-term inflows, with an annualized organic growth rate of 8%. Importantly, positive flows continued across all three of our regions, with significant quarterly acceleration in EMEA and Asia Pacific. Client demand and inflows remained strong in strategically important product lines led by ETFs, SMAs, Alternative Credit strategies, and our China JV.

Balance sheet strength and enhanced return of capital to shareholders remains a priority as we continued to operate with zero net debt⁽²⁾ while repurchasing another $25 million or 1.4 million shares this quarter.

As we enter the new year, we believe our global footprint, leading distribution platform, with particular strength in wealth management, and diverse set of investment capabilities will continue to meet client demand and generate profitable growth. We have the right people and strategic focus to continue to deliver on the key performance drivers that generate value for our various constituents including our clients, shareholders and employees. I would like to thank my colleagues and the Executive Leadership Team for their efforts in delivering on our strategic priorities in 2024."

Net Flows:

Net long-term inflows were $25.6 billion for the fourth quarter as compared to $16.5 billion in the third quarter.

Retail net long-term inflows were $28.4 billion while Institutional net long-term outflows were $2.8 billion. Net long-term flows by investment capability include net long-term inflows from ETFs and Index of $29.6 billion, APAC Managed of $3.5 billion, Private Markets of $0.8 billion, partially offset by net long-term outflows from Fundamental Equities of $6.0 billion, Multi-Asset/Other of $1.5 billion, and Fundamental Fixed Income of $0.8 billion. On a geographic basis, the EMEA, Americas and Asia Pacific regions achieved net long-term inflows of $9.2 billion, $8.9 billion, and $7.5 billion, respectively.

Net market losses decreased AUM in the fourth quarter by $2.5 billion and foreign exchange rate movements decreased AUM by $20.5 billion. We had inflows of $25.1 billion from money market funds during the quarter and $10.2 billion from non-management fee earning products. Ending AUM increased 2.8% and average AUM increased 4.7% during the fourth quarter.

U.S. GAAP Operating Results:

Fourth Quarter 2024 compared to Third Quarter 2024

Operating revenues and expenses: Operating revenues increased $77.6 million in the fourth quarter of 2024 compared to the third quarter. Investment management fees increased $26.8 million, as a result of higher average AUM partially offset by the shift in AUM toward lower yield products. Service and distribution fees increased $20.5 million due to higher average AUM. Performance fees were $34.1 million and were earned primarily from multi-asset/other, private markets real estate and fundamental equities products. Other revenues decreased $1.0 million. Foreign exchange rate changes decreased operating revenues by $9.3 million in the fourth quarter.

Operating expenses decreased $133.6 million in the fourth quarter of 2024 compared to the third quarter. Third party distribution, service and advisory costs increased $27.0 million primarily due to an increase in pass-through service and distribution costs. Employee compensation expense decreased $161.6 million primarily due to a one-time acceleration of $147.6 million in expense in the third quarter resulting from changes to the retirement criteria for vesting of currently outstanding long-term awards, as well as a $31.7 million decrease in expense related to the mark-to-market on deferred compensation liabilities in the fourth quarter which was partially offset by higher variable compensation costs. General and administrative expenses decreased $5.8 million primarily due to insurance reimbursements of $13.1 million received in the fourth quarter which were partially offset by higher professional fees. Foreign exchange rate changes decreased operating expenses by $7.4 million in the fourth quarter.

Non-operating income and expenses: Equity in earnings of unconsolidated affiliates was $20.1 million, earned primarily from gains on our China joint venture and private markets investments. Interest and dividend income was $24.6 million earned from deferred compensation and seed capital investments as well as cash and cash equivalents. Other gains and losses were a net loss of $20.1 million, primarily driven by market value changes on deferred compensation and seed capital investments. Other income/(expense) of consolidated investment products (CIP) was a loss of $6.5 million, primarily driven by market losses on the underlying investments held by the funds partially offset by net interest income.

The effective tax rates was 24.8% in the fourth quarter of 2024 as compared to 28.6% in the third quarter. The decrease in the effective tax rate in the fourth quarter was primarily due to the release of certain reserves for uncertain tax positions in the fourth quarter and the increase in non-deductible executive compensation in the third quarter related to the one-time acceleration of compensation expense for long-term awards.

Diluted earnings per common share: Diluted earnings per common share was $0.46 for the fourth quarter of 2024.

Fourth Quarter 2024 compared to Fourth Quarter 2023

Operating revenues and expenses: Operating revenues increased $179.6 million in the fourth quarter of 2024 compared to the fourth quarter of 2023. Investment management fees increased $124.0 million as a result of higher average AUM partially offset by the shift in AUM toward lower yield products. Service and distribution fees increased $36.2 million due to higher average AUM. Performance fees increased $14.6 million. Other revenues increased $4.8 million.

Operating expenses increased $41.0 million excluding the $1,248.9 million non-cash intangible asset impairment recorded in the fourth quarter of 2023. Third-party distribution, service and advisory costs increased $67.2 million due to higher average AUM. Employee compensation expenses decreased $5.0 million. Property, office and technology costs increased $5.5 million. General and administrative expenses decreased $29.7 million primarily due to insurance reimbursements received in the fourth quarter of 2024 as well as lower professional fees and fund expenses related to CIP.

The tax provision was an expense of $78.7 million in the fourth quarter of 2024 as compared to a benefit of $(266.4) million in the fourth quarter of 2023, resulting in effective tax rates of 24.8% and 28.5% in the fourth quarters of 2024 and 2023, respectively. The higher effective tax rate in the fourth quarter of 2023 was primarily a result of favorable permanent tax adjustments increasing the effective tax due to the pre-tax book loss in this quarter.  Additionally, the effective tax rate in the fourth quarter of 2024 was unfavorably impacted by the net loss attributable to non-controlling interest in consolidated entities.

Adjusted⁽¹⁾ Operating Results:

Fourth Quarter 2024 compared to Third Quarter 2024

Net revenue and adjusted operating expenses: Net revenues in the fourth quarter of 2024 increased $52.9 million compared to the third quarter primarily due to higher average AUM partially offset by the shift in AUM toward lower yield products. Foreign exchange rate changes decreased operating revenues by $6.9 million in the fourth quarter.

Adjusted operating expenses in the fourth quarter 2024 increased $11.6 million compared to the third quarter. Employee compensation expenses increased primarily due to higher variable compensation costs. General and administrative expenses decreased due to insurance reimbursements received which were partially offset by higher professional fees. Foreign exchange rate changes decreased operating expenses by $4.5 million in the fourth quarter.

Adjusted operating income increased $41.3 million in the fourth quarter compared to the third quarter. Adjusted operating margin increased to 33.7% from 31.6% for the prior quarter.

Non-operating income and expenses: Equity in earnings of unconsolidated affiliates was a gain of $10.9 million. Interest and dividend income was $17.0 million.

The effective tax rate on adjusted net income was 22.2% in the fourth quarter as compared to 21.8% in the third quarter.

Adjusted diluted earnings per common share was $0.52 for the fourth quarter of 2024.

Fourth Quarter 2024 compared to Fourth Quarter 2023

Net revenues and adjusted operating expenses: Net revenue in the fourth quarter of 2024 increased $111.3 million compared to the fourth quarter of 2023 primarily due to higher average AUM partially offset by the shift in AUM toward lower yield products.

Adjusted operating expenses decreased $3.4 million compared to the fourth quarter of 2023.

Adjusted operating income increased $114.7 million in the fourth quarter of 2024 compared to the fourth quarter of 2023. Adjusted operating margin increased to 33.7% from 26.3% for the fourth quarter of 2023.

The effective tax rate on adjusted net income was 22.2% in the fourth quarter of 2024 as compared to 9.9% in the fourth quarter of 2023. The increase in the effective tax rate was primarily due to the favorable impact of the discrete tax benefits in the fourth quarter of 2023 related to the resolution of certain tax matters and the nontaxable gain on the sale of certain Hong Kong pension sponsorship rights. The effective tax rate in the fourth quarter of 2024 was also unfavorably impacted by the change in the mix of income across tax jurisdictions.

Capital Management:

Cash and cash equivalents: $986.5 million at December 31, 2024 ($1,044.9 million at September 30, 2024).

Debt: $890.6 million at December 31, 2024 ($890.3 million at September 30, 2024). The credit facility balance was zero as of December 31, 2024 and September 30, 2024.

Common share repurchases:  During the fourth quarter of 2024, the company repurchased 1.4 million common shares for $25 million in the open market.

Common shares outstanding (end of period): 448.0 million

Diluted common shares outstanding (end of period): 453.8 million

Dividends paid: $92.8 million (common); $59.2 million (preferred)

Common dividends declared: The company is announcing a fourth quarter cash dividend of $0.205 per share to holders of common shares. The dividend is payable on March 4, 2025, to common shareholders of record at the close of business on February 14, 2025, with an ex-dividend date of February 14, 2025.

Preferred dividends declared: The company is announcing a preferred cash dividend of $14.75 per share representing the period from December 1, 2024 through February 28, 2025. The preferred dividend is payable on March 3, 2025.

About Invesco Ltd.

Invesco is a global independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. Our distinctive investment teams deliver a comprehensive range of active, passive and alternative investment capabilities. With offices in more than 20 countries, Invesco managed $1.85 trillion in assets on behalf of clients worldwide as of December 31, 2024. For more information, visit invesco.com/corporate.

Members of the investment community and general public are invited to listen to the conference call today, January 28, 2025, at 9:00 a.m. ET by dialing one of the following numbers: 1-866-803-2143 for U.S. and Canadian callers or 1-210-795-1098 for international callers, using the Passcode: Invesco. An audio replay of the conference call will be available until Thursday, February13, 2025 by calling 1-800-551-8152 for U.S. and Canadian callers or 1-203-369-3810 for international callers. A presentation highlighting the company's performance will be available during a live Webcast and on Invesco's Website at invesco.com/corporate.

This release, and comments made in the associated conference call today, may include "forward-looking statements." Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow, capital expenditures, and assets under management and could differ materially from events that actually occur in the future due to known and unknown risks and other important factors, including, but not limited to, industry or market conditions, geopolitical events and pandemics or health crises and their respective potential impact on the company, acquisitions and divestitures, debt and our ability to obtain additional financing or make payments, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, words such as "believes," "expects," "anticipates," "intends," "plans," "estimates," "projects," "forecasts," and future or conditional verbs such as "will," "may," "could," "should," and "would" as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. None of this information should be considered in isolation from, or as a substitute for, historical financial statements.

Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q, filed with the Securities and Exchange Commission. You may obtain these reports from the SEC's website at www.sec.gov. We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate.