Invesco Revenue Tops Forecasts in Q2

Key Points

• Adjusted EPS of $0.36 missed estimates by 12.2% in Q2, while revenue exceeded consensus by 37.4%.

• Assets Under Management reached a record $2 trillion, up 16.6% year over year.

• Net long-term inflows remained positive at $15.6 billion in Q2 2025, but profitability was pressured by higher expenses and weaker performance fees.

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Invesco (NYSE:IVZ), a global asset manager offering a range of investment strategies, reported its second-quarter 2025 earnings on July 22, 2025. The headline result was a new all-time high for assets under management, driven by strong global inflows into passive products and growth in Asia and EMEA regions. Adjusted earnings per share (non-GAAP) of $0.36 fell short of the $0.41 analyst consensus in Q2 2025, a 16.3% decline from the prior-year quarter. Revenue exceeded analyst expectations at $1.10 billion on a non-GAAP basis in Q2 2025 and edged up 1.7% year over year, but higher operating costs weighed on margins. The quarter highlighted record asset growth and global diversification, but also revealed challenges in controlling costs and sustaining earnings growth.

Source: Invesco. Note: Analyst estimates for the quarter provided by FactSet.

About Invesco’s Business and Strategic Focus

Invesco is a global investment management firm that manages assets for clients in over 120 countries. It offers a full suite of active, passive, and alternative investment products, including exchange-traded funds (ETFs), index funds, separately managed accounts, and private credit and real estate investments.

In recent years, Invesco has focused on adapting to changing client preferences, especially the rising demand for low-cost passive strategies, and expanding in high-growth markets such as China and Europe. Key factors for its future success include investment performance, technology integration, global diversification, strong distribution partnerships, and developing talent to support efficiency and responsible growth.

Quarter Highlights and Financial Performance

The period saw a significant increase in assets under management, reflecting growth of 8.5% from the previous quarter and a 16.6% increase compared to Q2 2024. This expansion was fueled by net long-term inflows of $15.6 billion, though this figure dipped compared to both last quarter and the same period a year ago. Most inflows came from lower-fee passive strategies, with ETFs and index funds showing $12.6 billion in net inflows. Invesco's investments in Asia, especially its China joint venture and India operations, also contributed robustly with $5.6 billion in net inflows.

Regionally, Asia Pacific and EMEA (Europe, Middle East, Africa) markets continued to generate net long-term inflows, while the Americas saw a modest outflow of $0.8 billion in net long-term flows—a reversal from earlier quarters. Fundamental Fixed Income products brought in $2.8 billion in net long-term inflows, but actively managed Fundamental Equities and Private Markets saw net outflows of $3.6 billion and $2.3 billion, respectively. This asset mix shift—toward passive and away from higher-fee active products—has impacted the company's average revenue per asset, placing pressure on profit margins.

The revenue figure exceeded consensus, showing a 1.7% year-over-year increase in non-GAAP revenue. However, adjusted diluted EPS fell 16.3%. The lower earnings reflect increased employee compensation expenses, which rose 12.8% year over year, along with a sharp drop in performance fees—down 70.1% from the same period last year. Severance costs from ongoing investment team restructurings and continued outlays for technology modernization projects further drove up expenses. After adjusting for these unusual items, the company’s adjusted operating margin was 31.2%, slightly improved year over year, but short of meaningful expansion given asset growth.

On the capital structure side, Invesco executed a $1.0 billion repurchase of preferred stock on May 16, 2025, using new bank term loans to finance the transaction. This move is expected to lower annual preferred dividend obligations by $59 million and improve earning capacity in the coming years. However, the repurchase incurred a one-time $159.3 million cost, resulting in a net GAAP loss for Invesco Ltd. in Q2 2025. Common share buybacks totaled 1.7 million shares for $25 million. The regular quarterly dividend was maintained, amounting to $95.2 million paid out to common shareholders during Q2 2025.

Strategically, Invesco announced in April 2025 a partnership with Barings—a subsidiary of MassMutual—aimed at developing new private credit investment products for US wealth management clients. MassMutual committed up to $650 million to seed these offerings. This partnership is intended to bolster Invesco's footprint in private markets, although material revenue contributions are not expected in the immediate term, reflecting ongoing investment in Invesco's Alpha operations platform.

Looking Ahead: Guidance and Investor Themes

Management did not offer forward guidance for revenue or earnings for the next quarter or for the full year. However, it emphasized ongoing expense discipline, although it noted that fluctuations may occur depending on market conditions. The recently completed preferred stock repurchase is projected to be accretive (increase earnings per share) from the second half of fiscal 2025 onward as interest and dividend costs decline over time. No additional changes to capital return plans or regular dividend policy were announced.

For investors, Invesco’s ability to deliver margin improvement, manage compensation and project-related costs, and restore positive flows within higher-fee segments such as active equities and private markets will be important. The firm’s ability to balance expense management with continued partnership investments will be key. Global diversification and continued growth in passive product lines remain important, but profitability will depend on capturing higher-margined assets and containing expense growth.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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