Franklin Resources : Q2 2025 Earnings Conference Call Investor Presentation

Franklin Resources, Inc. Second Quarter 2025 Results

May 2, 2025 | Investor Presentation

Jenny Johnson

President

Chief Executive Officer

Matthew Nicholls Executive Vice President Chief Financial Officer Chief Operating Officer

Adam Spector

Executive Vice President Head of Global Distribution

Second Quarter 2025 Business Highlights

Franklin Templeton is one of the most comprehensive global asset managers with $1.54 trillion in AUM; diversified by specialist investment manager, asset class, vehicle, and geography

Flow Trends

• Long-term inflows increased 9% from the prior quarter excluding reinvested distributions

  • Gross sales increased across all asset classes

• Long-term net outflows were $26.2 billion

  • Excluding Western Asset Management ("Western"), long-term net inflows were $7.4 billion

  • Positive net flows in Multi-Asset and Alternatives with a combined total of $9.7 billion

• Institutional pipeline of won but unfunded mandates increased by $2.3 billion to $20.4 billion

  Key Areas of Growth

• Fundraised $6.8 billion in Alternatives, of which $6.1 billion in private market assets broadly distributed across strategies

• Alternatives by Franklin Templeton: This quarter, launched Franklin Lexington Private Markets Fund ("FLEX") in the US and internationally. These perpetual funds are designed for wealth channel clients and raised $2.0 billion ($1.1 billion in the US and $0.9 billion internationally)

• ETF: $4.1 billion of net flows (14th consecutive positive quarter) with record high AUM of $37.0 billion; 10 US and 2 non-US ETFs over $1 billion

• Retail SMA AUM was $144.2 billion with net inflows of $1.5 billion and excluding Western, had record net inflows of $3.2 billion

  • Canvas®: Record net flows and AUM of $1.2 billion and $11.4 billion, respectively

• Non-US AUM of approximately $470 billion with positive net flows in EMEA and the Americas

  • Launched Putnam's flagship strategies internationally

    Investment Performance

• Over half of the mutual fund AUM is outperforming its peer median across all periods

• Over half of strategy composite AUM is outperforming its benchmark in the 3-, 5-, and 10-year periods

3

Second Quarter 2025 Financial Summary1

Key metrics

(in US$ millions, except AUM in billions and per share data)

	Q2 2025	Q1 2025	Q2 2024
Ending AUM2	$ 1,540.6	$ 1,575.7	$ 1,644.7
Average AUM2	1,570.5	1,634.5	1,581.1
Adj. revenue	1,610.2	1,682.7	1,665.1
Adj. operating income	377.2	412.8	419.6
Adj. net income	254.4	320.5	306.6
Adj. diluted EPS	0.47	0.59	0.56
Adj. effective fee rate3	38.3 bps	37.2 bps	38.5 bps
Adj. operating margin	23.4%	24.5%	25.2%

• AUM of $1.54 trillion decreased from the prior quarter due to the impact of long-term net outflows at Western and negative markets

• Adjusted effective fee rate3 ("EFR") of 38.3 bps compared to 37.2 bps in the prior quarter. The increase in the current quarter was primarily driven by Western outflows

• Adjusted operating income declined from the prior quarter primarily due to compensation expense related to the start of the calendar year and the impact of Western, partially offset by the prior quarter annual deferred compensation acceleration for retirement-eligible employees

• Adjusted net income and EPS declined from the prior quarter primarily due to lower adjusted operating income, losses on investments and foreign exchange losses in the current quarter compared to gains in the prior quarter, partially offset by a lower income tax rate due to discrete tax items

  • Includes $41 million seed investment loss related to a renewable energy investment fund which has been closed

1) For the reconciliations from US GAAP to non-GAAP measures see the appendix to this commentary and the Supplemental Non-GAAP Financial Measures section of the earnings release. For prior periods please refer to historical earnings commentaries available at franklinresources.com. 2) Excludes approximately $12.6 billion of AUM in our China joint venture. 3) The adjusted effective fee rate is annualized adjusted investment management

fees, excluding performance fees, divided by average AUM for the period. 4

Second Quarter 2025 AUM and Investment Performance