Item 1. Financial Statements
Item 1. Financial Statements.
FRANKLIN RESOURCES, INC.
CONSOLIDATED STATEMENTS OF INCOME
Unaudited
Three Months Ended
June 30,
Nine Months Ended
June 30,
(in millions, except per share data) 2025 2024 2025 2024
Operating Revenues
Investment management fees $ 1,640.8 $ 1,689.9 $ 5,113.7 $ 5,056.0
Sales and distribution fees 351.9 358.3 1,092.3 1,013.0
Shareholder servicing fees 59.9 61.8 185.3 162.3
Other 11.4 12.9 35.7 35.5
Total operating revenues 2,064.0 2,122.9 6,427.0 6,266.8
Operating Expenses
Compensation and benefits 901.1 893.8 2,812.5 2,890.3
Sales, distribution and marketing 480.7 481.1 1,491.1 1,366.2
Information systems and technology 162.7 156.6 477.4 442.7
Occupancy 69.5 104.8 213.9 247.7
Amortization of intangible assets 112.2 84.0 337.3 254.4
Impairment of intangible assets
— — 24.4 —
General, administrative and other 183.7 180.1 551.7 507.2
Total operating expenses 1,909.9 1,900.4 5,908.3 5,708.5
Operating Income 154.1 222.5 518.7 558.3
Other Income (Expenses)
Investment and other income, net 23.4 74.5 128.0 300.2
Interest expense ( 25.8 ) ( 25.7 ) ( 69.7 ) ( 72.2 )
Investment and other income (losses) of consolidated investment products, net 35.9 37.6 ( 14.7 ) 103.7
Expenses of consolidated investment products ( 11.0 ) ( 8.8 ) ( 29.8 ) ( 20.6 )
Other income, net 22.5 77.6 13.8 311.1
Income before taxes 176.6 300.1 532.5 869.4
Taxes on income 59.9 68.1 172.1 205.8
Net income 116.7 232.0 360.4 663.6
Less: net income (loss) attributable to
Redeemable noncontrolling interests 20.0 43.0 ( 88.8 ) 95.3
Nonredeemable noncontrolling interests 4.4 15.0 41.9 18.8
Net Income Attributable to Franklin Resources, Inc. $ 92.3 $ 174.0 $ 407.3 $ 549.5
Earnings per Share
Basic $ 0.15 $ 0.32 $ 0.70 $ 1.04
Diluted 0.15 0.32 0.70 1.03
See Notes to Consolidated Financial Statements.
3
Table of Contents
FRANKLIN RESOURCES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
(in millions) Three Months Ended
June 30, Nine Months Ended
June 30,
2025 2024 2025 2024
Net Income $ 116.7 $ 232.0 $ 360.4 $ 663.6
Other Comprehensive Income (Loss)
Currency translation adjustments, net of tax 88.3 ( 8.5 ) 11.7 21.1
Net unrealized gains (losses) on defined benefit plans, net of tax ( 2.7 ) ( 0.1 ) ( 5.5 ) 0.3
Net unrealized gains (losses) on investments, net of tax 0.1 ( 0.1 ) 0.1 —
Total other comprehensive income (loss) 85.7 ( 8.7 ) 6.3 21.4
Total comprehensive income 202.4 223.3 366.7 685.0
Less: comprehensive income (loss) attributable to
Redeemable noncontrolling interests 20.0 43.0 ( 88.8 ) 95.3
Nonredeemable noncontrolling interests 4.4 15.0 41.9 18.8
Comprehensive Income Attributable to Franklin Resources, Inc. $ 178.0 $ 165.3 $ 413.6 $ 570.9
See Notes to Consolidated Financial Statements.
4
Table of Contents
FRANKLIN RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
Unaudited
(in millions, except share and per share data) June 30,
2025 September 30,
2024
Assets
Cash and cash equivalents $ 3,253.9 $ 3,309.5
Receivables 1,723.2 1,479.1
Investments (including $ 1,080.6 and $ 838.0 at fair value at June 30, 2025 and September 30, 2024)
2,620.4 2,338.4
Assets of consolidated investment products
Cash and cash equivalents 703.1 1,099.4
Investments, at fair value 11,420.7 11,034.9
Property and equipment, net 975.4 946.4
Goodwill 6,211.6 6,211.4
Intangible assets, net 4,440.3 4,802.1
Operating lease right-of-use assets 772.0 823.3
Other 431.6 420.0
Total Assets $ 32,552.2 $ 32,464.5
Liabilities
Compensation and benefits $ 1,614.3 $ 1,801.3
Accounts payable and accrued expenses 765.8 551.5
Income taxes 162.0 406.4
Debt 2,666.7 2,780.3
Liabilities of consolidated investment products
Accounts payable and accrued expenses 1,111.3 861.3
Debt 9,577.6 9,341.5
Deferred tax liabilities 264.0 284.9
Operating lease liabilities 1,001.8 965.1
Other 953.8 907.4
Total liabilities 18,117.3 17,899.7
Commitments and Contingencies (Note 10)
Redeemable Noncontrolling Interests 1,380.5 1,321.8
Stockholders’ Equity
Preferred stock, $ 1.00 par value, 1,000,000 shares authorized; none issued
— —
Common stock, $ 0.10 par value, 1,000,000,000 shares authorized; 518,373,940 and 523,596,548 shares issued and outstanding at June 30, 2025 and September 30, 2024
51.8 52.4
Capital in excess of par
955.0 947.6
Retained earnings 11,610.3 11,927.6
Accumulated other comprehensive loss ( 413.2 ) ( 419.5 )
Total Franklin Resources, Inc. stockholders’ equity 12,203.9 12,508.1
Nonredeemable noncontrolling interests 850.5 734.9
Total stockholders’ equity 13,054.4 13,243.0
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity $ 32,552.2 $ 32,464.5
See Notes to Consolidated Financial Statements.
5
Table of Contents
FRANKLIN RESOURCES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY
Unaudited
Franklin Resources, Inc. Non-
redeemable
Non-
controlling
Interests Total
Stockholders’
Equity
Common Stock Capital
in
Excess
of Par
Value Retained
Earnings Accum-
ulated
Other
Compre-
hensive
Loss Stockholders’
Equity
(in millions)
for the nine months ended
June 30, 2025 Shares Amount
Balance at October 1, 2024 523.6 $ 52.4 $ 947.6 $ 11,927.6 $ ( 419.5 ) $ 12,508.1 $ 734.9 $ 13,243.0
Net income 163.6 163.6 18.9 182.5
Other comprehensive loss ( 104.8 ) ( 104.8 ) ( 104.8 )
Dividends declared on common stock ($ 0.32 per share)
( 173.6 ) ( 173.6 ) ( 173.6 )
Repurchase of common stock
( 0.3 ) — ( 5.8 ) — ( 5.8 ) ( 5.8 )
Issuance of common stock
0.7 — 21.5 21.5 21.5
Stock-based compensation
51.6 51.6 51.6
Net subscriptions and other 13.1 13.1
Net consolidation of investment products 4.7 4.7
Adjustment to fair value of redeemable noncontrolling interests 1.5 1.5 1.5
Balance at December 31, 2024 524.0 $ 52.4 $ 1,014.9 $ 11,919.1 $ ( 524.3 ) $ 12,462.1 $ 771.6 $ 13,233.7
Net income 151.4 151.4 18.6 170.0
Other comprehensive income 25.4 25.4 25.4
Dividends declared on common stock ($ 0.32 per share)
( 173.5 ) ( 173.5 ) ( 173.5 )
Repurchase of common stock ( 0.5 ) ( 0.1 ) ( 9.9 ) — ( 10.0 ) ( 10.0 )
Issuance of common stock 1.9 0.2 44.7 44.9 44.9
Stock-based compensation 12.7 12.7 12.7
Net subscriptions and other 38.4 38.4
Net deconsolidation of investment products ( 13.5 ) ( 13.5 )
Adjustment to fair value of redeemable noncontrolling interests ( 167.0 ) ( 167.0 ) ( 167.0 )
Balance at March 31, 2025 525.4 $ 52.5 $ 1,062.4 $ 11,730.0 $ ( 498.9 ) $ 12,346.0 $ 815.1 $ 13,161.1
Net income 92.3 92.3 4.4 96.7
Other comprehensive income 85.7 85.7 85.7
Dividends declared on common stock ($ 0.32 per share)
( 171.0 ) ( 171.0 ) ( 171.0 )
Repurchase of common stock ( 7.3 ) ( 0.7 ) ( 156.7 ) — ( 157.4 ) ( 157.4 )
Issuance of common stock 0.3 — 6.7 6.7 6.7
Stock-based compensation 42.6 42.6 42.6
Net subscriptions and other 28.1 28.1
Net consolidation of investment products
2.9 2.9
Adjustment to fair value of redeemable noncontrolling interests ( 41.0 ) ( 41.0 ) ( 41.0 )
Balance at June 30, 2025 518.4 $ 51.8 $ 955.0 $ 11,610.3 $ ( 413.2 ) $ 12,203.9 $ 850.5 $ 13,054.4
See Notes to Consolidated Financial Statements.
6
Table of Contents
Franklin Resources, Inc. Non-
redeemable
Non-
controlling
Interests Total
Stockholders’
Equity
Common Stock Capital
in
Excess
of Par
Value Retained
Earnings Accum-
ulated
Other
Compre-
hensive
Loss Stockholders’
Equity
(in millions)
for the nine months ended
June 30, 2024 Shares Amount
Balance at October 1, 2023 495.9 $ 49.6 $ — $ 12,376.6 $ ( 509.3 ) $ 11,916.9 $ 630.9 $ 12,547.8
Net income (loss) 251.3 251.3 ( 4.5 ) 246.8
Other comprehensive income 59.0 59.0 59.0
Dividends declared on common stock ($ 0.31 per share)
( 167.6 ) ( 167.6 ) ( 167.6 )
Repurchase of common stock ( 2.4 ) ( 0.2 ) ( 66.6 ) 8.0 ( 58.8 ) ( 58.8 )
Issuance of common stock 1.2 0.1 26.7 26.8 26.8
Stock-based compensation 39.9 39.9 39.9
Net subscriptions and other 9.6 9.6
Adjustment to fair value of redeemable noncontrolling interests
( 65.9 ) ( 65.9 ) ( 65.9 )
Balance at December 31, 2023 494.7 $ 49.5 $ — $ 12,402.4 $ ( 450.3 ) $ 12,001.6 $ 636.0 $ 12,637.6
Net income 124.2 124.2 8.3 132.5
Other comprehensive loss ( 28.9 ) ( 28.9 ) ( 28.9 )
Dividends declared on common stock ($ 0.31 per share)
( 169.3 ) ( 169.3 ) ( 169.3 )
Repurchase of common stock ( 0.4 ) ( 0.1 ) ( 11.6 ) — ( 11.7 ) ( 11.7 )
Issuance of common stock 0.3 — 10.7 10.7 10.7
Stock-based compensation 86.3 86.3 86.3
Acquisition
31.6 3.2 936.9 940.1 25.8 965.9
Net subscriptions and other 63.1 63.1
Net deconsolidation of investment products ( 12.6 ) ( 12.6 )
Adjustment to fair value of redeemable noncontrolling interests
( 91.9 ) ( 91.9 ) ( 91.9 )
Balance at March 31, 2024 526.2 $ 52.6 $ 1,022.3 $ 12,265.4 $ ( 479.2 ) $ 12,861.1 $ 720.6 $ 13,581.7
Net income 174.0 174.0 15.0 189.0
Other comprehensive loss ( 8.7 ) ( 8.7 ) ( 8.7 )
Dividends declared on common stock ($ 0.31 per share)
( 167.0 ) ( 167.0 ) ( 167.0 )
Repurchase of common stock ( 4.3 ) ( 0.4 ) ( 101.1 ) — ( 101.5 ) ( 101.5 )
Issuance of common stock 0.2 — 4.5 4.5 4.5
Stock-based compensation 58.9 58.9 58.9
Net subscriptions and other 29.4 29.4
Adjustment to fair value of redeemable noncontrolling interests 48.9 48.9 48.9
Balance at June 30, 2024 522.1 $ 52.2 $ 984.6 $ 12,321.3 $ ( 487.9 ) $ 12,870.2 $ 765.0 $ 13,635.2
See Notes to Consolidated Financial Statements.
7
Table of Contents
FRANKLIN RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
Nine Months Ended
June 30,
(in millions) 2025 2024
Net Income $ 360.4 $ 663.6
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation 170.0 194.6
Amortization of deferred sales commissions 58.9 43.3
Depreciation and other amortization 94.2 86.5
Amortization of intangible assets 337.3 254.4
Impairment of intangible assets
24.4 —
Net losses (gains) on investments 41.7 ( 17.3 )
Income from investments in equity method investees ( 38.5 ) ( 122.3 )
Net losses on investments of consolidated investment products 63.1 19.4
Net purchase of investments by consolidated investment products ( 87.6 ) ( 459.5 )
Deferred income taxes ( 38.3 ) ( 35.0 )
Other 188.9 135.3
Changes in operating assets and liabilities:
Decrease (increase) in receivables and other assets 24.3 ( 61.4 )
Decrease in investments, net 15.5 23.8
Decrease in accrued compensation and benefits ( 183.7 ) ( 35.0 )
Decrease in income taxes payable ( 244.3 ) ( 127.8 )
Increase (decrease) in accounts payable, accrued expenses and other liabilities 308.0 ( 55.8 )
Decrease in accounts payable and accrued expenses of consolidated investment products ( 7.5 ) ( 93.7 )
Net cash provided by operating activities 1,086.8 413.1
Purchase of investments ( 904.4 ) ( 952.0 )
Liquidation of investments 443.9 1,149.5
Purchase of investments by consolidated collateralized loan obligations ( 4,880.6 ) ( 4,099.1 )
Liquidation of investments by consolidated collateralized loan obligations 3,653.4 3,034.0
Additions of property and equipment, net ( 123.3 ) ( 107.3 )
Acquisitions, net of cash acquired (including $ 281.4 in cash and cash equivalents of consolidated investment products in fiscal year 2024)
— 175.1
Payments of deferred consideration liability ( 90.5 ) ( 434.9 )
Net consolidation of investment products 0.2 12.0
Net cash used in investing activities ( 1,901.3 ) ( 1,222.7 )
[Table continued on next page]
See Notes to Consolidated Financial Statements.
8
Table of Contents
FRANKLIN RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
[Table continued from previous page]
Nine Months Ended
June 30,
(in millions) 2025 2024
Issuance of common stock $ 10.2 $ 7.3
Dividends paid on common stock ( 512.6 ) ( 489.3 )
Repurchase of common stock ( 173.2 ) ( 172.0 )
Proceeds from debt
300.0 —
Payment on debt ( 400.0 ) —
Proceeds from repurchase agreement 98.0 —
Payments on repurchase agreement
( 48.9 ) ( 45.8 )
Proceeds from debt of consolidated investment products 5,184.0 1,617.6
Payments on debt of consolidated investment products ( 4,320.1 ) ( 609.2 )
Payments on contingent consideration liabilities ( 6.8 ) ( 5.1 )
Noncontrolling interests 233.3 202.9
Net cash provided by financing activities 363.9 506.4
Effect of exchange rate changes on cash and cash equivalents ( 1.3 ) 12.5
Decrease in cash and cash equivalents ( 451.9 ) ( 290.7 )
Cash and cash equivalents, beginning of period 4,408.9 4,402.4
Cash and Cash Equivalents, End of Period $ 3,957.0 $ 4,111.7
Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes $ 232.1 $ 357.9
Cash paid for interest 62.2 67.5
Cash paid for interest by consolidated investment products
597.4 522.2
See Notes to Consolidated Financial Statements.
9
Table of Contents
FRANKLIN RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2025
(Unaudited)
Note 1 – Basis of Presentation
The unaudited interim financial statements of Franklin Resources, Inc. (“Franklin”) and its consolidated subsidiaries (collectively, the “Company”) included herein have been prepared in accordance with the instructions to Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Under these rules and regulations, some information and footnote disclosures normally included in financial statements prepared under accounting principles generally accepted in the United States of America have been shortened or omitted. Management believes that all adjustments necessary for a fair statement of the financial position and the results of operations for the periods shown have been made. All adjustments are normal and recurring. Management also believes that the accounting estimates are appropriate, and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates, actual amounts may differ from these estimates. These financial statements should be read together with the Company’s audited financial statements included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2024 (“fiscal year 2024”).
Note 2 – New Accounting Guidance
Accounting Guidance Not Yet Adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued an amendment to the existing segment reporting guidance. The amendment requires annual and interim disclosures of significant segment expenses that are regularly provided to the chief operating decision maker by reportable segment and clarifies that single reportable segment entities are required to apply all existing segment disclosures in the guidance. The Company will adopt the annual disclosures in its Annual Report on Form 10-K for the fiscal year ending September 30, 2025 and interim disclosure in its Quarterly report on Form 10-Q for the quarter ending December 31, 2025.
There were no other significant updates to the new accounting guidance that the Company has not yet adopted as disclosed in its Form 10-K for fiscal year 2024.
Note 3 – Earnings per Share
The components of basic and diluted earnings per share were as follows:
(in millions, except per share data) Three Months Ended
June 30,
Nine Months Ended
June 30,
2025 2024 2025 2024
Net income attributable to Franklin Resources, Inc. $ 92.3 $ 174.0 $ 407.3 $ 549.5
Less: allocation of earnings to participating nonvested stock and stock unit awards
13.3 7.5 42.9 23.8
Net Income Available to Common Stockholders $ 79.0 $ 166.5 $ 364.4 $ 525.7
Weighted-average shares outstanding – basic 515.7 516.5 517.4 507.2
Dilutive effect of nonparticipating nonvested stock unit awards
0.8 0.7 0.8 0.8
Weighted-Average Shares Outstanding – Diluted 516.5 517.2 518.2 508.0
Earnings per Share
Basic $ 0.15 $ 0.32 $ 0.70 $ 1.04
Diluted 0.15 0.32 0.70 1.03
Nonparticipating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been antidilutive were not significant for the three and nine months ended June 30, 2025 and 2024.
10
Table of Contents
Note 4 – Revenues
Operating revenues by geographic area were as follows:
(in millions) United States Luxembourg Asia-Pacific Americas
Excluding
United
States Europe,
Middle East
and Africa,
Excluding
Luxembourg Total
for the three months ended June 30, 2025
Investment management fees
$ 1,240.9 $ 214.2 $ 76.6 $ 49.5 $ 59.6 $ 1,640.8
Sales and distribution fees
249.9 87.1 5.2 9.4 0.3 351.9
Shareholder servicing fees
52.0 7.5 0.4 — — 59.9
Other
11.1 — 0.2 — 0.1 11.4
Total
$ 1,553.9 $ 308.8 $ 82.4 $ 58.9 $ 60.0 $ 2,064.0
(in millions) United States Luxembourg Asia-Pacific Americas
Excluding
United
States Europe,
Middle East
and Africa,
Excluding
Luxembourg Total
for the nine months ended June 30, 2025
Investment management fees
$ 3,874.7 $ 654.0 $ 223.9 $ 152.3 $ 208.8 $ 5,113.7
Sales and distribution fees
776.2 270.1 16.5 29.0 0.5 1,092.3
Shareholder servicing fees
160.8 23.2 1.2 0.1 — 185.3
Other
35.0 — 0.6 — 0.1 35.7
Total
$ 4,846.7 $ 947.3 $ 242.2 $ 181.4 $ 209.4 $ 6,427.0
(in millions) United States Luxembourg Asia-Pacific Americas
Excluding
United
States Europe,
Middle East
and Africa,
Excluding
Luxembourg Total
for the three months ended June 30, 2024
Investment management fees
$ 1,273.7 $ 216.2 $ 71.8 $ 59.1 $ 69.1 $ 1,689.9
Sales and distribution fees
256.8 86.7 4.7 10.1 — 358.3
Shareholder servicing fees
53.2 8.1 0.5 — — 61.8
Other
12.7 — 0.2 — — 12.9
Total
$ 1,596.4 $ 311.0 $ 77.2 $ 69.2 $ 69.1 $ 2,122.9
(in millions) United States Luxembourg Asia-Pacific Americas
Excluding
United
States Europe,
Middle East
and Africa,
Excluding
Luxembourg Total
for the nine months ended June 30, 2024
Investment management fees
$ 3,819.8 $ 630.1 $ 210.2 $ 173.8 $ 222.1 $ 5,056.0
Sales and distribution fees
718.8 250.3 14.3 29.6 — 1,013.0
Shareholder servicing fees
136.8 23.6 1.8 0.1 — 162.3
Other
31.1 0.7 3.4 — 0.3 35.5
Total
$ 4,706.5 $ 904.7 $ 229.7 $ 203.5 $ 222.4 $ 6,266.8
Operating revenues are attributed to geographic areas based on the locations of the subsidiaries that provide the services, which may differ from the regions in which the related investment products are sold.
Revenues earned from sponsored funds were 83 % of the Company’s total operating revenues for the three and nine months ended June 30, 2025 and 82 % for the three and nine months ended June 30, 2024.
11
Table of Contents
Note 5 – Investments
The disclosures below include details of the Company’s investments, excluding those of consolidated investment products (“CIPs”). See Note 7 – Consolidated Investment Products for information related to the investments held by these entities.
Investments consisted of the following:
(in millions) June 30,
2025 September 30,
2024
Investments, at fair value
Sponsored funds and separate accounts $ 752.9 $ 509.1
Investments related to long-term incentive plans 261.1 271.6
Other equity and debt investments 66.6 57.3
Total investments, at fair value 1,080.6 838.0
Investments in equity method investees 1,157.9 1,219.7
Other investments 381.9 280.7
Total $ 2,620.4 $ 2,338.4
The Company has entered into repurchase agreements with a third-party financing company for certain investments held by the Company. As of June 30, 2025 and September 30, 2024, other liabilities includes repurchase agreements of $ 166.9 million and $ 111.4 million with investments of $ 167.9 million and $ 121.7 million in carrying value pledged as collateral. The repurchase agreements have contractual maturity dates ranging between 2030 to 2038.
Note 6 – Fair Value Measurements
The disclosures below include details of the Company’s fair value measurements, excluding those of CIPs. See Note 7 – Consolidated Investment Products for information related to fair value measurements of the assets and liabilities of these entities.
The assets and liabilities measured at fair value on a recurring basis were as follows:
(in millions) Level 1 Level 2 Level 3 NAV as a
Practical
Expedient Total
as of June 30, 2025
Assets
Investments, at fair value
Sponsored funds and separate accounts $ 497.2 $ 214.7 $ 3.2 $ 37.8 $ 752.9
Investments related to long-term incentive plans 227.5 2.9 — 30.7 261.1
Other equity and debt investments 11.6 9.3 1.8 27.8 50.5
Total Assets Measured at Fair Value $ 736.3 $ 226.9 $ 5.0 $ 96.3 $ 1,064.5
Liabilities
Securities sold short $ 261.7 $ — $ — $ — $ 261.7
Contingent consideration liabilities — — 21.5 — 21.5
Total Liabilities Measured at Fair Value $ 261.7 $ — $ 21.5 $ — $ 283.2
As of June 30, 2025, there were $ 16.1 million of other investments which were adjusted to fair value on a nonrecurring basis and excluded from the table above.
12
Table of Contents
(in millions) Level 1 Level 2 Level 3 NAV as a
Practical
Expedient Total
as of September 30, 2024
Assets
Investments, at fair value
Sponsored funds and separate accounts $ 306.3 $ 157.4 $ 5.2 $ 40.2 $ 509.1
Investments related to long-term incentive plans 242.5 — — 29.1 271.6
Other equity and debt investments 4.1 11.1 2.6 39.5 57.3
Total Assets Measured at Fair Value $ 552.9 $ 168.5 $ 7.8 $ 108.8 $ 838.0
Liabilities
Securities sold short $ 178.1 $ — $ — $ — $ 178.1
Contingent consideration liabilities — — 28.2 — 28.2
Total Liabilities Measured at Fair Value $ 178.1 $ — $ 28.2 $ — $ 206.3
Investments for which fair value was estimated using reported NAV as a practical expedient primarily consist of nonredeemable private equity, debt and infrastructure funds, and redeemable alternative credit, global equity, private real estate funds and alternatives. These investments were as follows:
(in millions) June 30,
2025 September 30,
2024
Nonredeemable investments 1
Investments with known liquidation periods $ 19.5 $ 32.4
Investments with unknown liquidation periods 15.3 16.1
Redeemable investments 2
61.5 60.3
Unfunded commitments 12.5 14.0
_______________
1 The investments are expected to be returned through distributions over the life of the funds as a result of liquidations of the funds’ underlying assets. Investments with known liquidation periods have an expected weighted-average life of 2.4 years and 1.9 years at June 30, 2025 and September 30, 2024.
2 Investments are redeemable on a semi-monthly, monthly and quarterly basis.
Financial instruments that were not measured at fair value were as follows:
(in millions) Fair Value
Level June 30, 2025 September 30, 2024
Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value
Financial Assets
Cash and cash equivalents 1 $ 3,253.9 $ 3,253.9 $ 3,309.5 $ 3,309.5
Other investments
Time deposits 2 9.1 9.1 9.8 9.8
Equity securities 3 372.8 372.8 270.9 270.9
Financial Liability
Debt 2 $ 2,666.7 $ 2,247.2 $ 2,780.3 $ 2,387.0
13
Table of Contents
Note 7 – Consolidated Investment Products
CIPs consist of mutual and other investment funds, limited partnerships and similar structures and collateralized loan obligations (“CLOs”), all of which are sponsored by the Company, and include both voting interest entities and variable interest entities (“VIEs”).
The balances related to CIPs included in the Company’s consolidated balance sheets were as follows:
(in millions) June 30,
2025 September 30,
2024
Assets
Cash and cash equivalents $ 703.1 $ 1,099.4
Receivables 507.9 217.5
Investments, at fair value 11,420.7 11,034.9
Total Assets $ 12,631.7 $ 12,351.8
Liabilities
Accounts payable and accrued expenses $ 1,111.3 $ 861.3
Debt 9,577.6 9,341.5
Other liabilities 14.2 39.9
Total liabilities 10,703.1 10,242.7
Redeemable Noncontrolling Interests 541.1 687.8
Stockholders ’ Equity
Franklin Resources, Inc.’s interests 928.8 1,080.9
Nonredeemable noncontrolling interests 458.7 340.4
Total stockholders’ equity 1,387.5 1,421.3
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders ’ Equity
$ 12,631.7 $ 12,351.8
The consolidation of CIPs did not have a significant impact on net income attributable to the Company during the three and nine months ended June 30, 2025 and 2024.
The Company has no right to the CIPs’ assets, other than its direct equity investments in them and investment management and other fees earned from them. The debt holders of the CIPs have no recourse to the Company’s assets beyond the level of its direct investment; therefore the Company bears no other risks associated with the CIPs’ liabilities.
Fair Value Measurements
Assets of CIPs measured at fair value on a recurring basis were as follows:
(in millions) Level 1 Level 2 Level 3 NAV as a
Practical
Expedient Total
as of June 30, 2025
Assets
Cash and cash equivalents of CLOs $ 399.3 $ — $ — $ — $ 399.3
Receivables of CLOs — 353.0 — — 353.0
Investments
Equity and debt securities 212.3 728.9 550.6 168.7 1,660.5
Loans — 9,750.3 9.9 — 9,760.2
Total Assets Measured at Fair Value $ 611.6 $ 10,832.2 $ 560.5 $ 168.7 $ 12,173.0
14
Table of Contents
(in millions) Level 1 Level 2 Level 3 NAV as a
Practical
Expedient Total
as of September 30, 2024
Assets
Cash and cash equivalents of CLOs $ 764.3 $ — $ — $ — $ 764.3
Receivables of CLOs — 149.6 — — 149.6
Investments
Equity and debt securities 229.7 889.4 550.1 187.1 1,856.3
Loans — 9,178.1 0.5 — 9,178.6
Total Assets Measured at Fair Value $ 994.0 $ 10,217.1 $ 550.6 $ 187.1 $ 11,948.8
Investments for which fair value was estimated using reported NAV as a practical expedient consist of nonredeemable private debt and equity funds, a redeemable global hedge fund and a redeemable U.S. equity fund. These investments were as follows:
(in millions) June 30,
2025 September 30,
2024
Nonredeemable investments 1
Investments with unknown liquidation periods $ 105.2 $ 49.0
Redeemable investments 2
63.5 138.1
Unfunded commitments 3
— 42.8
_______________
1 The investments are expected to be returned through distributions over the life of the funds as a result of liquidations of the funds’ underlying assets.
2 Investments are redeemable on a monthly basis and liquidation periods are unknown.
3 Of the total unfunded commitments, the Company was contractually obligated to fund $ 9.9 million based on its ownership percentage in the CIPs, at September 30, 2024.
Changes in Level 3 assets of equity and debt securities were as follows:
Three Months Ended
June 30,
Nine Months Ended
June 30,
(in millions)
2025 2024 2025 2024
Balance at beginning of period
$ 545.0 $ 591.0 $ 550.1 $ 584.9
Acquisition
— — — 29.6
Gains (losses) included in investment and other income (losses) of consolidated investment products, net ( 4.6 ) ( 29.8 ) 19.7 ( 68.0 )
Purchases 19.1 17.5 39.2 44.1
Sales
( 17.2 ) ( 0.7 ) ( 31.5 ) ( 1.2 )
Net (deconsolidations) consolidations 8.4 — 12.2 ( 12.5 )
Transfers into Level 3 — — 0.2 1.1
Transfers out of Level 3 ( 0.1 ) — ( 39.3 ) —
Balance at End of Period
$ 550.6 $ 578.0 $ 550.6 $ 578.0
Change in unrealized losses included in net income relating to assets held at end of period $ ( 3.9 ) $ ( 29.8 ) $ ( 8.0 ) $ ( 67.4 )
15
Table of Contents
Valuation techniques and significant unobservable inputs used in Level 3 fair value measurements were as follows:
(in millions)
as of June 30, 2025 Fair Value Valuation Technique Significant Unobservable Inputs Range (Weighted Average 1 )
Equity and debt securities $ 286.7 Market pricing Private sale pricing $ 0.27 –$ 1,850.00 ($ 148.20 ) per share
Discount for lack of marketability 5.0 %– 50.0 % ( 21.4 %)
205.6 Market comparable companies Enterprise value/ Revenue multiple 1.4 – 18.1 ( 9.3 )
Discount for lack of marketability 8.3 %– 16.1 % ( 12.8 %)
48.6 Discounted cash flow Discount rate 6.7 %– 6.8 % ( 6.8 %)
9.7 Option pricing model Volatility 49.1 %– 76.9 % ( 51.1 %)
Discount for lack of marketability 11.1 %– 14.7 % ( 11.3 %)
(in millions)
as of September 30, 2024 Fair Value Valuation Technique Significant Unobservable Inputs Range (Weighted Average 1 )
Equity and debt securities $ 291.6 Market comparable companies Enterprise value/ Revenue multiple 1.2 – 22.8 ( 10.9 )
Discount for lack of marketability 0.1 %– 10.4 % ( 8.1 %)
214.5 Market pricing Private sale pricing $ 0.01 –$ 1,000.00 ($ 73.04 ) per share
Discount for lack of marketability 9.8 %– 17.5 % ( 11.5 %)
44.0 Discounted cash flow Discount rate 6.8 %
__________________
1 Based on the relative fair value of the instruments.
If the relevant significant inputs used in the market-based valuations, other than discount for lack of marketability, were independently higher (lower), the resulting fair value of the assets would be higher (lower). If the relevant significant inputs used in the discounted cash flow, as well as the discount for lack of marketability used in the market-based valuations, were independently higher (lower), the resulting fair value of the assets would be lower (higher).
16
Table of Contents
Financial instruments of CIPs that were not measured at fair value were as follows:
(in millions) Fair Value
Level June 30, 2025 September 30, 2024
Carrying
Value Estimated
Fair Value Carrying
Value Estimated
Fair Value
Financial Asset
Cash and cash equivalents 1 $ 303.8 $ 303.8 $ 335.1 $ 335.1
Financial Liabilities
Debt of CLOs 1
2 or 3 $ 9,577.6 $ 9,520.5 $ 9,341.5 $ 9,167.3
__________________
1 Substantially all was Level 2.
Debt
Debt of CLOs totaled $ 9,577.6 million and $ 9,341.5 million at June 30, 2025 and September 30, 2024. The debt had fixed and floating interest rates ranging from 2.39 % to 12.38 % with a weighted-average effective interest rate of 6.08 % at June 30, 2025, and from 2.39 % to 13.73 % with a weighted-average effective interest rate of 7.36 % at September 30, 2024. The floating rates were based on the Secured Overnight Financing Rate.
The contractual maturities for the debt of CLOs at June 30, 2025 were as follows:
(in millions)
for the fiscal years ending September 30, Amount
2025 (remainder of year) $ 54.8
2026 38.2
2027 56.0
2028 44.6
2029 —
Thereafter 9,384.0
Total $ 9,577.6
Collateralized Loan Obligations
The unpaid principal balance and fair value of the investments of CLOs were as follows:
(in millions) June 30,
2025 September 30,
2024
Unpaid principal balance $ 10,056.6 $ 9,371.9
Difference between unpaid principal balance and fair value ( 117.5 ) ( 19.8 )
Fair Value $ 9,939.1 $ 9,352.1
Investments 90 days or more past due were immaterial at June 30, 2025 and September 30, 2024.
The Company recognized $ 14.0 million and $ 41.3 million of net gains during the three and nine months ended June 30, 2025 and $ 9.4 million and $ 39.9 million of net gains during the three and nine months ended June 30, 2024, related to its own economic interests in the CLOs. The aggregate principal related to the debt of CLOs was $ 9,674.5 million and $ 9,282.8 million at June 30, 2025 and September 30, 2024.
17
Table of Contents
Note 8 – Redeemable Noncontrolling Interests
Changes in redeemable noncontrolling interests were as follows:
(in millions) 2025 2024
CIPs Minority Interests Total CIPs Minority Interests Total
for the three months ended June 30,
Balance at beginning of period $ 1,196.1 $ 820.8 $ 2,016.9 $ 643.5 $ 610.4 $ 1,253.9
Net income 9.0 11.0 20.0 30.8 12.2 43.0
Net subscriptions (distributions) and other 22.1 ( 33.4 ) ( 11.3 ) 142.3 ( 26.8 ) 115.5
Net deconsolidations ( 686.1 ) — ( 686.1 ) ( 97.3 ) — ( 97.3 )
Adjustment to fair value — 41.0 41.0 — ( 48.9 ) ( 48.9 )
Balance at End of Period $ 541.1 $ 839.4 $ 1,380.5 $ 719.3 $ 546.9 $ 1,266.2
(in millions) 2025 2024
CIPs Minority Interests Total CIPs Minority Interests Total
for the nine months ended June 30,
Balance at beginning of period $ 687.8 $ 634.0 $ 1,321.8 $ 580.1 $ 446.0 $ 1,026.1
Net income (loss) ( 119.5 ) 30.7 ( 88.8 ) 60.6 34.7 95.3
Net subscriptions (distributions) and other 147.2 ( 31.8 ) 115.4 171.9 ( 42.7 ) 129.2
Net deconsolidations ( 174.4 ) — ( 174.4 ) ( 113.5 ) — ( 113.5 )
Acquisition
— — — 20.2 — 20.2
Adjustment to fair value — 206.5 206.5 — 108.9 108.9
Balance at End of Period $ 541.1 $ 839.4 $ 1,380.5 $ 719.3 $ 546.9 $ 1,266.2
Note 9 – Nonconsolidated Variable Interest Entities
VIEs for which the Company is not the primary beneficiary consist of sponsored funds and other investment products in which the Company has an equity ownership interest. The Company’s maximum exposure to loss from these VIEs consists of equity investments, investment management and other fee receivables as follows:
(in millions) June 30,
2025 September 30,
2024
Investments $ 1,411.5 $ 1,074.4
Receivables 212.3 226.0
Total $ 1,623.8 $ 1,300.4
While the Company has no legal or contractual obligation to do so, it routinely makes cash investments in the course of launching sponsored funds. As it has done in the past, the Company also may voluntarily elect to provide its sponsored funds with additional direct or indirect financial support based on its business objectives. The Company did not provide financial or other support to its sponsored funds assessed as VIEs during the nine months ended June 30, 2025 or fiscal year 2024.
Note 10 – Commitments and Contingencies
Legal Proceedings
India Credit Fund Closure Matters . During the nine months ended June 30, 2025, there were no significant changes from the disclosure in the Form 10‑K for the fiscal year ended September 30, 2024.
18
Table of Contents
Western Asset Management Investigations and Litigation. As previously disclosed, the Company launched an internal investigation into certain trade allocations of treasury derivatives in select Western Asset Management (“WAM”) managed accounts. WAM received notification of parallel investigations by the SEC and the U.S. Department of Justice (“DOJ”). WAM also received notice of an investigation into these trading activities by the CFTC. On June 30, 2025, the CFTC informed WAM that it closed its investigation. The SEC and DOJ investigations remain ongoing. The Company and WAM have fully cooperated, and will continue to fully cooperate with the SEC and DOJ investigations. Ken Leech, the former co-Chief Investment Officer of WAM, received a “Wells Notice” from the staff of the SEC in August 2024 and was placed on administrative leave at that time, as previously disclosed. Mr. Leech recently retired and is no longer with the Company. On November 25, 2024, the SEC filed a complaint in the United States District Court for the Southern District of New York against Mr. Leech alleging violations of certain laws related to trade allocations. Concurrently, the DOJ filed an indictment with the United States District Court for the Southern District of New York against Mr. Leech for similar allegations and for false statements made to the SEC.
On July 3, 2025, Franklin, WAM and Ken Leech were named as defendants in a lawsuit filed by the Western PA Electrical Employees Insurance Trust Fund in the U.S. District Court for the Western District of Pennsylvania seeking class certification on behalf of shareholders of two funds managed by WAM for the period January 1, 2021 through October 31, 2023. The plaintiff is pursuing claims under the Securities Exchange Act of 1934 against all defendants in connection with trade allocations made by Mr. Leech in that period that are also the subject of the investigations reported above. The plaintiff is seeking, among other things, damages, interest, and costs and expenses, including attorneys’ fees.
Franklin Templeton 401(k) Retirement Plan Litigation . On July 22, 2025, Franklin and the Franklin Templeton 401(k) Retirement Plan Committee were named as defendants in a lawsuit filed by certain former employees in the U.S. District Court for the Northern District of California. The plaintiffs seek to represent a class of participants and beneficiaries of the Franklin Templeton 401(k) Retirement Plan (the “Plan”) who were invested in funds managed by the Company at any time on or after July 22, 2019. The plaintiffs are pursuing claims under the Employee Retirement Income Security Act of 1974 for alleged breaches of fiduciary duties and failure to monitor the Plan fiduciaries in connection with the Plan’s inclusion of certain proprietary funds as investment options. The plaintiffs are seeking, among other things, damages, disgorgement, removal of certain investments from the Plan, removal and replacement of the Plan’s fiduciaries, attorneys’ fees and costs, and pre-judgment interest.
The lawsuits reported above against the Company are in their preliminary stages. Management believes the claims made in the lawsuits are without merit and the Company intends to defend against them vigorously. The Company cannot predict the outcome of these lawsuits or estimate any reasonably possible loss or range of loss that may arise from any negative outcome.
Other Litigation and Regulatory Matters. The Company is from time to time involved in other litigation relating to claims arising in the normal course of business. Management is of the opinion that the ultimate resolution of such claims will not materially affect the Company’s business, financial position, results of operations or liquidity. In management’s opinion, an adequate accrual has been made as of June 30, 2025 to provide for any probable losses that may arise from such matters for which the Company could reasonably estimate an amount.
Indemnifications and Guarantees
In the ordinary course of business or in connection with certain acquisition agreements, the Company enters into contracts that provide for indemnifications by the Company in certain circumstances. In addition, certain Company entities guarantee certain financial and performance-related obligations of various Franklin subsidiaries. The Company is also subject to certain legal requirements and agreements providing for indemnifications of directors, officers and personnel against liabilities and expenses they may incur under certain circumstances in connection with their service. The terms of these indemnities and guarantees vary pursuant to applicable facts and circumstances, and from agreement to agreement. Future payments for claims against the Company under these indemnities or guarantees could negatively impact the Company’s financial condition. In management’s opinion, no material loss was deemed probable or reasonably possible pursuant to such indemnification agreements and/or guarantees as of June 30, 2025.
Other Commitments and Contingencies
At June 30, 2025, there were no other material changes in the other commitments and contingencies as reported in the Company’s Annual Report on Form 10-K for fiscal year 2024.
19
Table of Contents
Note 11 – Stock-Based Compensation
Stock and stock unit award activity was as follows:
(shares in thousands) Time-Based
Shares Performance-
Based Shares Total
Shares Weighted-
Average
Grant-Date
Fair Value
for the nine months ended June 30, 2025
Nonvested balance at October 1, 2024 16,594 3,314 19,908 $ 24.03
Granted 7,972 169 8,141 20.73
Vested ( 2,314 ) ( 166 ) ( 2,480 ) 27.85
Forfeited/canceled ( 661 ) ( 297 ) ( 958 ) 23.41
Nonvested Balance at June 30, 2025 21,591 3,020 24,611 $ 22.58
Total unrecognized compensation expense related to nonvested stock and stock unit awards was $ 205.4 million at June 30, 2025. This expense is expected to be recognized over a remaining weighted-average vesting period of 1.7 years.
Note 12 – Investment and Other Income, Net
Investment and other income, net consisted of the following:
Three Months Ended
June 30,
Nine Months Ended
June 30,
(in millions) 2025 2024 2025 2024
Dividend and interest income $ 38.9 $ 39.8 $ 101.4 $ 132.6
Gains (losses) on investments, net ( 31.4 ) ( 24.3 ) ( 41.7 ) 17.3
Income from investments in equity method investees 23.0 41.0 38.5 122.3
Gains (losses) on derivatives, net ( 8.2 ) 3.1 ( 2.7 ) ( 11.5 )
Rental income 10.7 11.1 32.8 32.8
Foreign currency exchange (losses) gains, net ( 14.4 ) 1.2 ( 7.4 ) ( 7.5 )
Other, net 4.8 2.6 7.1 14.2
Investment and other income, net $ 23.4 $ 74.5 $ 128.0 $ 300.2
Net gains (losses) recognized on equity securities measured at fair value and trading debt securities that were held by the Company were $ 56.3 million and $( 3.6 ) million for the three and nine months ended June 30, 2025 and $( 6.9 ) million and $ 76.0 million for the three and nine months ended June 30, 2024.
20
Table of Contents
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.