What changed in this filing

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Item 1. Financial Statements

2026-01-30 compared with 2025-08-01 · 108 added, 186 removed, 459 unchanged (39% of the section changed)

3 unchanged sentences

Three Months Ended

Nine Months Ended

(in millions, except per share data) 2025 2024

11 unchanged sentences

Amortization of intangible assets 55.1 112.6

Impairment of intangible assets

General, administrative and other 195.6 185.2

4 unchanged sentences

Interest expense ( 20.4 ) ( 23.1 )

Investment and other income (losses) of consolidated investment products, net 35.9 37.6 ( 14.7 ) 103.7

Investment and other income of consolidated investment products, net 124.9 114.1

Expenses of consolidated investment products ( 14.0 ) ( 7.3 )

3 unchanged sentences

Net income 346.8 232.1

net income (loss) attributable to

net income attributable to

Redeemable noncontrolling interests 39.7 49.6

9 unchanged sentences

(in millions) Three Months Ended

June 30, Nine Months Ended

2025 2024 2025 2024

Net Income $ 346.8 $ 232.1

Other Comprehensive Income (Loss)

Other Comprehensive Loss

Currency translation adjustments, net of tax ( 1.1 ) ( 105.1 )

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

Net unrealized gains on defined benefit plans, net of tax — 0.3

Total other comprehensive loss ( 1.1 ) ( 104.8 )

Total comprehensive income 345.7 127.3

comprehensive income (loss) attributable to

comprehensive income attributable to

Redeemable noncontrolling interests 39.7 49.6

5 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data) June 30,

(in millions, except share and per share data) December 31,

2025 September 30,

1 unchanged sentence

Receivables 1,445.6 1,541.7

Investments (including $ 1,080.6 and $ 838.0 at fair value at June 30, 2025 and September 30, 2024)

Investments (including $ 1,063.0 and $ 1,179.5 at fair value at December 31, 2025 and September 30, 2025)

2,439.0 2,374.0

24 unchanged sentences

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

519,974,911 and 520,951,796 shares issued and outstanding at December 31, 2025 and September 30, 2025

Capital in excess of par

17 unchanged sentences

(in millions)

for the nine months ended

June 30, 2025 Shares Amount

for the three months ended

December 31, 2025 Shares Amount

Balance at October 1, 2025 521.0 $ 52.1 $ 956.8 $ 11,516.0 $ ( 447.1 ) $ 12,077.8 $ 929.0 $ 13,006.8

Adoption of new accounting guidance 25.3 25.3 25.3

Net income 255.5 255.5 51.6 307.1

9 unchanged sentences

Net subscriptions and other 17.2 17.2

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 ( 32.2 ) ( 32.2 )

Adjustment to fair value of redeemable noncontrolling interests ( 79.1 ) ( 79.1 ) ( 79.1 )

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

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.

Balance at December 31, 2025 520.0 $ 52.0 $ 991.0 $ 11,540.1 $ ( 448.2 ) $ 12,134.9 $ 965.6 $ 13,100.5

Franklin Resources, Inc.

6 unchanged sentences

(in millions)

for the nine months ended

June 30, 2024 Shares Amount

for the three months ended

December 31, 2024 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 (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 163.6 163.6 18.9 182.5

5 unchanged sentences

Stock-based compensation 51.6 51.6 51.6

31.6 3.2 936.9 940.1 25.8 965.9

Net subscriptions and other 13.1 13.1

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

Net consolidation of investment products 4.7 4.7

Adjustment to fair value of redeemable noncontrolling interests

Balance at June 30, 2024 522.1 $ 52.2 $ 984.6 $ 12,321.3 $ ( 487.9 ) $ 12,870.2 $ 765.0 $ 13,635.2

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

See Notes to Consolidated Financial Statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

Three Months Ended

(in millions) 2025 2024

Net Income $ 346.8 $ 232.1

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Stock-based compensation 75.6 73.2

2 unchanged sentences

Amortization of intangible assets 55.1 112.6

Impairment of intangible assets

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 losses on investments 8.6 57.1

Losses (income) from investments in equity method investees ( 11.5 ) 7.6

Net gains on investments of consolidated investment products ( 67.4 ) ( 87.2 )

Net purchase of investments by consolidated investment products ( 97.7 ) ( 83.9 )

3 unchanged sentences

Decrease (increase) in receivables and other assets ( 121.9 ) 10.2

Decrease in investments, net 15.5 23.8

Decrease (increase) in investments, net ( 12.4 ) 1.1

Decrease in accrued compensation and benefits ( 562.3 ) ( 654.3 )

Decrease in income taxes payable ( 244.3 ) ( 127.8 )

Increase in income taxes payable 20.3 55.0

Increase (decrease) in accounts payable, accrued expenses and other liabilities ( 24.8 ) 95.0

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

Increase (decrease) in accounts payable and accrued expenses of consolidated investment products 2.9 ( 47.3 )

Net cash used in operating activities ( 255.1 ) ( 145.2 )

Purchase of investments ( 264.6 ) ( 458.0 )

2 unchanged sentences

Liquidation of investments by consolidated collateralized loan obligations 1,492.7 1,001.1

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)

Payments of deferred consideration liability ( 90.5 ) ( 434.9 )

Net consolidation of investment products 0.2 12.0

Proceeds from sale (additions) of property and equipment, net 9.3 ( 71.8 )

Acquisition, net of cash acquired ( 69.7 ) —

Net consolidation (deconsolidation) of investment products 2.0 ( 5.1 )

Net cash used in investing activities ( 317.2 ) ( 656.5 )

4 unchanged sentences

[Table continued from previous page]

Nine Months Ended

Three Months Ended

(in millions) 2025 2024

Issuance of common stock $ 10.2 $ 7.3

Dividends paid on common stock $ ( 170.2 ) $ ( 166.2 )

Repurchase of common stock ( 41.9 ) ( 5.8 )

Proceeds from debt

Payment on debt ( 400.0 ) —

Proceeds from repurchase agreement — 38.9

14 unchanged sentences

Cash paid for interest by consolidated investment products

Non-cash purchase of investments 20.0 —

See Notes to Consolidated Financial Statements.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

December 31, 2025

Note 1 – Basis of Presentation

9 unchanged sentences

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.

Recently Adopted Accounting Guidance

On October 1, 2025, the Company adopted an amendment to the existing intangible assets guidance issued by the Financial Accounting Standards Board.

The amendment requires eligible crypto assets to be measured at fair value, with changes recognized in net income, along with expanded disclosures.

The Company adopted the amendment using the modified-retrospective transition approach and recognized a cumulative effective adjustment resulting in an increase of $ 25.3 million in retained earnings as of October 1, 2025.

The crypto assets are presented within intangible assets, net on the consolidated balance sheets.

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 2025.

2 unchanged sentences

(in millions, except per share data) Three Months Ended

Nine Months Ended

2025 2024 2025 2024

Net income attributable to Franklin Resources, Inc.

1 unchanged sentence

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 $ 239.3 $ 148.2

1 unchanged sentence

Dilutive effect of nonparticipating nonvested stock unit awards

0.8 0.7 0.8 0.8

Weighted-Average Shares Outstanding – Diluted 518.3 518.2

2 unchanged sentences

Diluted 0.46 0.29

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.

There were no nonparticipating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been antidilutive for the three months ended December 31, 2025 and 2024.

Note 4 – Revenues

3 unchanged sentences

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

11.1 — 0.2 — 0.1 11.4

$ 1,553.9 $ 308.8 $ 82.4 $ 58.9 $ 60.0 $ 2,064.0

(in millions) United States Luxembourg Asia-Pacific Americas

States Europe,

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

35.0 — 0.6 — 0.1 35.7

$ 4,846.7 $ 947.3 $ 242.2 $ 181.4 $ 209.4 $ 6,427.0

(in millions) United States Luxembourg Asia-Pacific Americas

States Europe,

Luxembourg Total

for the three months ended June 30, 2024

for the three months ended December 31, 2025

Investment management fees

9 unchanged sentences

Luxembourg Total

for the nine months ended June 30, 2024

for the three months ended December 31, 2024

Investment management fees

6 unchanged sentences

$ 1,696.7 $ 325.3 $ 81.3 $ 63.6 $ 84.7 $ 2,251.6

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.

Operating revenues are attributed to geographic areas based on the jurisdiction of the subsidiaries that provide the services, which may differ from the regions in which the related investment products are sold and domicile of the fund vehicle or client.

Revenues earned from sponsored funds were 84 % and 83 % of the Company’s total operating revenues for the three months ended December 31, 2025 and 2024.

Note 5 – Investments

2 unchanged sentences

Investments consisted of the following:

(in millions) June 30,

(in millions) December 31,

2025 September 30,

8 unchanged sentences

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.

As of December 31, 2025 and September 30, 2025, other liabilities includes repurchase agreements of $ 196.0 million and $ 200.5 million with investments of $ 200.6 million and $ 206.4 million in carrying value pledged as collateral.

The repurchase agreements have contractual maturity dates ranging between 2030 to 2039.

5 unchanged sentences

Expedient Total

as of June 30, 2025

as of December 31, 2025

Investments, at fair value

2 unchanged sentences

Other equity and debt investments 23.0 10.0 0.2 29.6 62.8

Crypto assets 4.3 16.2 — — 20.5

Total Assets Measured at Fair Value $ 689.4 $ 283.4 $ 4.5 $ 98.1 $ 1,075.4

2 unchanged sentences

Total Liabilities Measured at Fair Value $ 156.1 $ — $ 20.4 $ — $ 176.5

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.

(in millions) Level 1 Level 2 Level 3 NAV as a

9 unchanged sentences

Total Liabilities Measured at Fair Value $ 193.7 $ — $ 20.4 $ — $ 214.1

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.

As of December 31, 2025 and September 30, 2025, there were $ 8.1 million and $ 29.0 million of other investments which were adjusted to fair value on a nonrecurring basis and excluded from the tables above.

These investments were as follows:

(in millions) June 30,

(in millions) December 31,

2025 September 30,

6 unchanged sentences

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.

Investments with known liquidation periods have an expected weighted-average life of 2.3 years and 2.2 years at December 31, 2025 and September 30, 2025.

2 Investments are redeemable on a semi-monthly, monthly and quarterly basis.

1 unchanged sentence

(in millions) Fair Value

Level June 30, 2025 September 30, 2024

Level December 31, 2025 September 30, 2025

Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value

9 unchanged sentences

The balances related to CIPs included in the Company’s consolidated balance sheets were as follows:

(in millions) June 30,

(in millions) December 31,

2025 September 30,

14 unchanged sentences

$ 13,449.6 $ 13,077.7

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 consolidation of CIPs did not have a significant impact on net income attributable to the Company during the three months ended December 31, 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.

5 unchanged sentences

Expedient Total

as of June 30, 2025

as of December 31, 2025

Cash and cash equivalents of CLOs $ 758.5 $ — $ — $ — $ 758.5

11 unchanged sentences

Total Assets Measured at Fair Value $ 865.3 $ 11,198.6 $ 610.9 $ 189.1 $ 12,863.9

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.

Investments for which fair value was estimated using reported NAV as a practical expedient consist of nonredeemable private debt and equity funds and a redeemable global hedge fund.

These investments were as follows:

(in millions) June 30,

(in millions) December 31,

2025 September 30,

6 unchanged sentences

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.

3 Of the total unfunded commitments, the Company was contractually obligated to fund $ 6.7 million and $ 5.3 million based on its ownership percentage in the CIPs, at December 31, 2025 and September 30, 2025.

Changes in Level 3 assets of equity and debt securities were as follows:

Three Months Ended

Nine Months Ended

(in millions)

2025 2024 2025 2024

Balance at beginning of period

$ 601.0 $ 550.1

Gains (losses) included in investment and other income (losses) of consolidated investment products, net ( 4.6 ) ( 29.8 ) 19.7 ( 68.0 )

Gains included in investment and other income of consolidated investment products, net 28.8 22.0

Purchases 17.4 9.2

1 unchanged sentence

Net (deconsolidations) consolidations ( 32.1 ) 3.8

Transfers into Level 3 — — 0.2 1.1

Transfers out of Level 3 ( 16.8 ) —

1 unchanged sentence

$ 595.1 $ 573.5

Change in unrealized losses included in net income relating to assets held at end of period $ ( 3.9 ) $ ( 29.8 ) $ ( 8.0 ) $ ( 67.4 )

Change in unrealized gains included in net income relating to assets held at end of period $ 34.1 $ 22.3

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 )

as of December 31, 2025 Fair Value Valuation Technique Significant Unobservable Inputs Range (Weighted Average 1 )

Equity and debt securities $ 295.9 Market pricing Private sale pricing $ 0.27 –$ 2,120.00 ($ 222.11 ) per share

7 unchanged sentences

as of September 30, 2025 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 )

Equity and debt securities $ 302.0 Market pricing Private sale pricing $ 0.27 –$ 2,120.00 ($ 176.53 ) per share

Discount for lack of marketability 5.0 %– 75.0 % ( 23.9 %)

214.5 Market pricing Private sale pricing $ 0.01 –$ 1,000.00 ($ 73.04 ) per share

225.9 Market comparable companies Enterprise value/ Revenue multiple 1.4 – 21.0 ( 9.5 )

Discount for lack of marketability 6.0 %– 11.0 % ( 8.5 %)

54.4 Discounted cash flow Discount rate 6.5 %– 13.0 % ( 6.8 %)

18.7 Option pricing model Volatility 34.0 %– 60.9 % ( 38.2 %)

Discount for lack of marketability 9.1 %– 13.5 % ( 9.4 %)

__________________

4 unchanged sentences

(in millions) Fair Value

Level June 30, 2025 September 30, 2024

Level December 31, 2025 September 30, 2025

Value Estimated

8 unchanged sentences

1 Substantially all was Level 2.

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:

Debt of CLOs totaled $ 10,862.7 million and $ 9,937.3 million at December 31, 2025 and September 30, 2025.

The debt had fixed and floating interest rates based on Secured Overnight Financing Rate (“SOFR”) ranging from 2.39 % to 12.32 % with a weighted-average effective interest rate of 6.02 % at December 31, 2025, and from 2.39 % to 12.26 % based on SOFR and Euro Interbank Offered Rate with a weighted-average effective interest rate of 6.00 % at September 30, 2025.

The contractual maturities for the debt of CLOs at December 31, 2025 were as follows:

(in millions)

5 unchanged sentences

The unpaid principal balance and fair value of the investments of CLOs were as follows:

(in millions) June 30,

(in millions) December 31,

2025 September 30,

2 unchanged sentences

Fair Value $ 10,824.7 $ 10,597.7

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.

Investments 90 days or more past due were immaterial at December 31, 2025 and September 30, 2025.

The Company recognized $ 11.2 million and $ 11.7 million of net gains during the three months ended December 31, 2025 and 2024, related to its own economic interests in the CLOs.

The aggregate principal related to the debt of CLOs was $ 10,906.8 million and $ 9,958.6 million at December 31, 2025 and September 30, 2025.

Note 8 – Redeemable Noncontrolling Interests

2 unchanged sentences

CIPs Minority Interests Total CIPs Minority Interests Total

for the three months ended June 30,

for the three months ended December 31,

Balance at beginning of period $ 289.6 $ 892.4 $ 1,182.0 $ 687.8 $ 634.0 $ 1,321.8

1 unchanged sentence

Net subscriptions (distributions) and other 160.6 ( 37.8 ) 122.8 175.6 ( 3.7 ) 171.9

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 )

Net consolidations (deconsolidations) ( 164.5 ) — ( 164.5 ) 564.2 — 564.2

— 32.8 32.8 — — —

4 unchanged sentences

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,

(in millions) December 31,

2025 September 30,

4 unchanged sentences

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.

The Company did not provide additional financial or other support to its sponsored funds assessed as VIEs during the three months ended December 31, 2025 or fiscal year 2025.

Note 10 – Commitments and Contingencies

1 unchanged sentence

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.

During the three months ended December 31, 2025, there were no significant changes from the disclosure in the Form 10‑K for the fiscal year ended September 30, 2025.

Western Asset Management Investigations and Litigation.

3 unchanged sentences

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.

Leech recently retired and is no longer with the Company.

The Company and WAM have fully cooperated with these investigations.

As previously disclosed, the CFTC informed WAM that it closed its investigation.

The Company has also previously disclosed that it was informed by the DOJ that it is prepared to resolve its investigation through a disposition that does not require the filing of any criminal charges against WAM.

The DOJ further informed the Company that as it continues the ongoing resolution discussions, which, as the DOJ noted, require additional time to complete due to circumstances not attributable to WAM, it appreciates WAM’s commitment to full cooperation with the investigation.

The Company continues to cooperate with the SEC investigation, which remains ongoing.

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.

Leech retired and is no longer with the Company, as previously disclosed.

On November 25, 2024, the SEC filed a complaint in the United States District Court for the Southern District of New York against Mr.

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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.

On December 19, 2025, Abilene Firemen’s Relief and Retirement Fund was named the lead plaintiff in the action and effective January 9, 2026, the case was transferred to the U.S.

District Court for the Central District of California.

The plaintiffs are 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.

The plaintiffs are seeking, among other things, damages, interest, and costs and expenses, including attorneys’ fees.

Franklin Templeton 401(k) Retirement Plan Litigation .

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District Court for the Northern District of California.

On November 10, 2025, the plaintiffs filed an amended complaint adding as defendants the Franklin Templeton 401(k) Retirement Plan Investment Committee and Gallagher Fiduciary Advisors, LLC.

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.

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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.

In management’s opinion, an adequate accrual has been made as of December 31, 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

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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.

In management’s opinion, no material loss was deemed probable or reasonably possible pursuant to such indemnification agreements and/or guarantees as of December 31, 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.

At December 31, 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 2025.

Note 11 – Stock-Based Compensation

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Shares Weighted-

for the nine months ended June 30, 2025

for the three months ended December 31, 2025

Nonvested balance at October 1, 2025 14,959 353 15,312 $ 22.81

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Forfeited/canceled ( 221 ) — ( 221 ) 16.67

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.

Nonvested Balance at December 31, 2025 22,738 349 23,087 $ 22.78

Total unrecognized compensation expense related to nonvested stock unit awards was $ 299.3 million at December 31, 2025.

This expense is expected to be recognized over a remaining weighted-average vesting period of 2.0 years.

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Three Months Ended

Nine Months Ended

(in millions) 2025 2024

Dividend and interest income $ 54.6 $ 43.1

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 )

Losses on investments, net ( 8.6 ) ( 57.1 )

Income (losses) from investments in equity method investees 11.5 ( 7.6 )

Losses on crypto assets, net ( 6.4 ) —

Rental income 11.3 11.2

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Investment and other income, net $ 80.3 $ 10.5

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.

Net losses recognized on equity securities measured at fair value and trading debt securities that were held by the Company were $ 12.5 million for the three months ended December 31, 2025 and $ 87.2 million for the three months ended December 31, 2024.

Note 13 – Segment and Geographic Information

The Company has one operating segment, which provides investment management and related services.

The chief operating decision maker (“CODM”), identified as the Company’s Chief Executive Officer, assesses the performance of the business and allocates resources primarily based on consolidated net income attributable to Franklin Resources, Inc.

This measure is used to support decision making activities and assess the performance of the operating segment.

The CODM regularly reviews the significant segment expenses categories that are presented on the Company’s consolidated statements of income.

Total assets on the consolidated balance sheets is the measure of segment assets.

Note 14 - Subsequent Event

On January 8, 2026, the Company borrowed $ 150.0 million under the Amended and Restated Revolving Credit Agreement, with aggregate commitments of up to $ 1.5 billion.

The borrowing remains outstanding at the time of this filing and the proceeds were used for general corporate purposes.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements