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Introduction & Market Context
Invesco Ltd (NYSE:IVZ) released its first quarter 2025 results on April 22, showcasing continued momentum in asset gathering and improved profitability. The asset manager reported $17.6 billion in net long-term inflows, representing a 5.3% annualized organic growth rate. The company’s stock was up 5.14% in premarket trading following the release, building on its recent performance after a strong Q4 2024 that saw the stock rise 7.04%.
President and CEO Andrew Schlossberg and CFO Allison Dukes presented the results, highlighting the company’s advantaged position as a diversified, client-centric asset manager with a strategy focused on delivering for shareholders through prioritized growth initiatives.
Quarterly Performance Highlights
Invesco reported total assets under management (AUM) of $1,844.8 billion as of March 31, 2025, representing a $182.1 billion or 10.9% increase year-over-year. The company’s adjusted operating income reached $349.5 million, up $53.0 million or 17.9% from the same period last year, while adjusted operating margin expanded to 31.5%, an improvement of 3.3 percentage points.
As shown in the following comprehensive overview of Invesco’s Q1 2025 business highlights, ETFs and fixed income strategies drove the majority of inflows:
The company’s ETF and Index business continued its strong momentum with $16.3 billion in net long-term flows, bringing total ETF and Index AUM to $491.0 billion. Fundamental Fixed Income also performed well with $8.0 billion in net inflows, while Fundamental Equities experienced $7.0 billion in outflows, reflecting ongoing industry-wide challenges in active equity strategies.
Invesco’s growth was geographically diversified, with positive flows across all three regions. The following chart illustrates this balanced growth across geography, investment approach, and distribution channel:
Investment performance showed improvement, with approximately half of Invesco’s funds performing in the top quartile of peers across 1, 3, and 5-year time horizons. Additionally, two-thirds of AUM is beating respective benchmarks over all measurement periods. Fixed income performance remained particularly strong, with approximately 40% of funds in the top quartile on a 3-5 year basis.
Strategic Initiatives
A key strategic development announced in the presentation is a partnership between Invesco, MassMutual, and Barings to accelerate growth in the US Private Wealth Market. This collaboration aims to leverage each entity’s expertise to offer custom solutions and meet clients’ diverse income needs, with an initial focus on private credit and income opportunities. MassMutual intends to support the initiative with a $650 million initial investment.
Invesco also announced plans to repurchase $1 billion (25%) of its outstanding preferred stock, expected to be executed in May 2025. The repurchase will be financed with committed bank term loans ($500 million 3-year tenor and $500 million 5-year tenor). This transaction is expected to provide several financial benefits, including replacing non-tax-deductible dividends with tax-deductible loans, earnings accretion, and annual preferred stock dividend savings of $59 million.
The financial impact of this preferred stock repurchase is expected to be meaningfully positive for shareholders, with projected EPS accretion increasing from $0.02 in 2025 to $0.13 at run-rate. The company’s leverage ratios are projected to remain manageable, with debt laddered and lower over time.
Detailed Financial Analysis
Invesco’s financial performance in Q1 2025 showed improvement across key metrics. Net revenues increased to $1,108.7 million, up $55.5 million or 5.3% year-over-year. Adjusted operating expenses were well controlled at $759.2 million, up just $2.5 million or 0.3% from Q1 2024, demonstrating the company’s disciplined expense management.
The following slide provides a comprehensive summary of Invesco’s Q1 2025 financial highlights:
The company’s revenue mix continues to evolve with changing client demand and asset mix. Net revenue yield trends vary across different asset classes, with Fundamental Equities commanding the highest yields (61-63 bps) and QQQ generating the lowest (0 bps). The following chart illustrates these trends and the impact of changing client demand on asset mix:
A detailed breakdown of revenues and expenses shows the drivers of Invesco’s financial performance. Net revenue of $1,109 million in Q1 2025 and adjusted operating expenses of $759 million contributed to the improved operating margin:
Capital Management
Invesco continued to strengthen its balance sheet and return capital to shareholders. The company returned $177 million to shareholders in Q1 2025, and its leverage ratio improved to under 1.0x. The following chart illustrates Invesco’s capital management strategy:
This focus on capital management builds on the momentum from Q4 2024, when the company ended the quarter in a net cash position with cash and cash equivalents exceeding debt by nearly $100 million. During the Q4 earnings call, CFO Allison Dukes indicated the company’s intention to continue regular share buybacks, with a target total payout ratio of approximately 60% in 2025.
Forward-Looking Statements
Looking ahead, Invesco is focused on several key strategic priorities to drive growth and enhance shareholder value. These include delivering active equity performance, driving profitable organic growth, growing high-demand private markets, embedding next-generation technology, and strengthening financial flexibility.
The partnership with MassMutual and Barings represents a significant opportunity to accelerate growth in the US Private Wealth Market, particularly in private credit strategies. The company also sees continued growth potential in its ETF platform, which has demonstrated strong momentum across all three regions.
While challenges persist in fundamental equities, Invesco remains committed to improving investment performance and gaining market share in key categories. The company’s diversified business model, with strength across geographies, investment approaches, and distribution channels, positions it well to navigate market cycles and capitalize on evolving client preferences.
The preferred stock repurchase is expected to enhance earnings and provide additional financial flexibility for strategic investments and capital returns to shareholders. With a solid foundation of AUM growth, improved margins, and strategic initiatives, Invesco appears well-positioned to continue its positive trajectory through 2025.
Full presentation:
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