BEN

Financials

Franklin Resources

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Market Data

Financials

XBRL · SEC EDGAR

2007–2025(19yr)

Revenue

Net Income

Free CF

Metric	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$6.2B	$6.0B	$4.2B	$5.9B	$7.1B	$7.1B	$8.0B	$8.5B	$7.9B	$6.6B	$6.4B	$6.3B	$5.8B	$5.6B	$8.4B	$8.3B	$7.8B	$8.5B	$8.8B	+3.5%
Operating Income	$2.1B	$2.1B	$1.2B	$2.0B	$2.7B	$2.5B	$2.9B	$3.2B	$3.0B	$2.4B	$2.3B	$2.1B	$1.6B	$1.0B	$1.9B	$1.8B	$1.1B	$407.6M	$604.1M	+48.2%
Operating Margin	33.3%	34.8%	28.7%	33.5%	37.3%	35.4%	36.6%	37.9%	38.1%	35.7%	35.4%	33.5%	27.0%	18.8%	22.3%	21.4%	14.0%	4.8%	6.9%	+2.1pp
Net Income	$1.8B	$1.6B	$896.8M	$1.4B	$1.9B	$1.9B	$2.2B	$2.4B	$2.0B	$1.7B	$1.7B	$764.4M	$1.2B	$798.9M	$1.8B	$1.3B	$882.8M	$464.8M	$524.9M	+12.9%
Net Margin	28.6%	26.3%	21.4%	24.7%	26.9%	27.2%	26.9%	28.1%	25.6%	26.1%	26.5%	12.1%	20.7%	14.4%	21.7%	15.6%	11.2%	5.5%	6.0%	+0.5pp
Free Cash Flow	$1.6B	$1.3B	$596.2M	$1.6B	$1.5B	$987.8M	$2.0B	$2.1B	$2.2B	$1.6B	$1.1B	$2.1B	-$32.1M	$917.7M	$1.2B	$1.9B	$989.9M	$794.2M	$911.6M	+14.8%
FCF Margin	25.5%	22.2%	14.2%	27.2%	20.9%	13.9%	24.7%	24.6%	27.5%	24.6%	16.6%	33.6%	-0.6%	16.5%	13.8%	22.6%	12.6%	9.4%	10.4%	+1.0pp
EPS (Diluted)	$7.03	$6.67	$3.87	$6.33	$8.62	$8.95	$3.37	$3.79	$3.29	$2.94	$3.01	$1.39	$2.35	$1.59	$3.57	$2.53	$1.72	$0.85	$0.91	+7.1%

Total Debt$2.4B

Cash & Equiv.$4.6B

Net Cash$2.3B

3 min read

1. THE BIG PICTURE

Franklin Resources is attempting a high-stakes transition from a traditional mutual fund provider to a diversified alternatives powerhouse, using acquisitions like Apera Asset Management to buy its way into higher-fee segments. While recent results show record assets under management (AUM) and a 56% surge in net income, Franklin Resources remains plagued by the lowest profit margins among its major peers, suggesting that its "specialist manager" model is currently more expensive than it is efficient.

2. WHERE THE RISKS HIT HARDEST

Franklin’s primary strength—its economic and geographic diversity—is directly threatened by asset mix shifts because the migration toward lower-fee products like fixed income and ETFs creates structural pressure on revenue yields, regardless of total AUM growth (Risks). Furthermore, its distribution network is a point of vulnerability; Franklin relies heavily on third-party broker-dealers it does not control, and these intermediaries are increasingly recommending competing products while demanding higher distribution costs (Competitive Position). Finally, the brand reputation of its specialist managers is at risk from regulatory burdens, specifically the ongoing investigations regarding Western Asset Management (WAM), which could disrupt operations and trigger client redemptions (Recent Results).

3. WHAT THE NUMBERS SAY TOGETHER

The financial data reveals a business that is expanding in scale but struggling with fundamental efficiency. While revenue grew 3.5% (TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter), Franklin’s operating margin of 9.1% is the lowest in its peer group—trailing State Street’s 33.9% and Ameriprise’s 35.3% by a massive gap (Peer Benchmarking). This suggests that the "specialist manager" structure, while providing diversity, has yet to achieve the economies of scale seen at rivals.

The most recent quarter's 3% revenue growth is consistent with this modest trajectory, but the 7% drop in Fixed Income AUM highlights the "structural pressure" from shifting investor preferences (10-Q). Market sentiment remains wary; short interest stands at 6.4% of the float, a notable level of bearishness despite the recent earnings beat (Supplemental Signals).

4. IS IT WORTH IT AT THIS PRICE?

At a forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 8.7x, Franklin Resources trades at a modest discount to the peer median of 9.9x (Peer Benchmarking). At this multiple, the market is pricing in a long-term growth rate of just 1.0% (CAPM analysis). This low bar is justified by the fact that Franklin has the lowest net margin (7.6%) and FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin (8.1%) in its peer group. While the 5.1% dividend yield is the highest among its peers, it functions as a necessary incentive for investors to overlook Franklin Resources's status as the least efficient operator in the sector. If growth were to accelerate to a GDP-paced 2.5%, the justified multiple would rise to 10.0x, but current fundamentals—specifically the margin inferiority—provide little evidence that such a re-rating is imminent.

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if the ongoing investigations into Western Asset Management (WAM) result in significant legal liabilities or a sustained exodus of institutional capital (Recent Results).
Constructive if operating margins begin to climb toward the 20% range, proving that the integration of recent acquisitions like Putnam and Apera is finally yielding meaningful cost synergies.

6. BOTTOM LINE

Structural Advantage: A globally diversified multi-manager platform that provides retail and institutional access to high-demand alternative asset classes like private credit and real estate. Bottom Line: Franklin Resources is a high-yield turnaround play that remains a laggard on profitability, making it a bet on management's ability to finally convert massive scale into actual margins.

Source: Synthesis · LLM Analysis

3 min read

1. Top 5 Material Risks

Market Volatility and Economic Disruption: Global economic instability, including war, political unrest, and pandemics, can cause significant decreases in AUM. Because Franklin Resources derives substantially all of its operating revenues from investment management and related services, these declines directly reduce income.
Asset Mix Shifts: Investor preferences are shifting toward lower-fee products such as fixed income and ETFs, and away from higher-fee equity and alternative products. This migration negatively impacts the overall revenue yield on AUM.
Investment Performance: The success of Franklin Resources depends on maintaining superior investment performance. Poor performance relative to third-party benchmarks leads to decreased sales and stimulates redemptions, which lowers the total AUM and reduces management fees.
Operational and Third-Party Dependency: Franklin Resources relies on third-party providers for administration, technology, and transfer agency services. A failure by these providers to perform, or a successful cyberattack on their systems, could disrupt operations, cause financial losses, and damage the reputation of Franklin Resources.
Regulatory and Compliance Burdens: Franklin Resources operates in a highly regulated global environment. Failure to comply with complex, overlapping, and frequently changing rules—such as the EU’s GDPR, which carries fines of up to 4% of annual global revenues—can result in significant financial penalties, sanctions, and operational restrictions.

2. Company-Specific Risks

Strategic Transaction Integration: Franklin Resources regularly pursues acquisitions and joint ventures. These transactions carry the risk of underperformance, loss of key personnel, and the failure to realize anticipated revenue or expense synergies.
Key Personnel Dependency: The business relies on the continued contributions of portfolio managers, investment analysts, and executive officers. Competition for this talent is significant, and the departure of key investment personnel could lead to client losses.
Subsidiary Earnings Dependency: Substantially all operations are conducted through subsidiaries. Franklin Resources is dependent on these entities to distribute earnings, loans, or dividends to fund its own payment obligations, which may be restricted by local regulations or contractual agreements.
Technological Transition Risk: In July 2024, Franklin Resources selected a new third-party technology solution to unify its investment management platform. This multi-year transition period introduces operational complexity and the risk of increased capital spending.

3. Regulatory/Legal Risks

Western Asset Management (WAM) Investigations: The subsidiary WAM remains the subject of parallel investigations by the SEC and the DOJ.
Inducement Rules: Jurisdictions including Canada, the U.K., the Netherlands, and the EU have implemented or are considering regimes that ban or limit commissions and inducements to intermediaries, which may force business into less profitable channels.
Extraterritorial Compliance: Certain laws have extraterritorial application, leading to duplicative or conflicting regulatory burdens and increased costs for Franklin Resources.
Intellectual Property Litigation: Franklin Resources faces the risk of litigation if it is deemed to infringe on the intellectual property rights of third parties, or if it fails to effectively protect its own trademarks, patents, and trade secrets.

4. Financial Impact Map

Market Volatility and Economic Disruption → Investment Management Fees → Represents the majority of revenues; directly tied to AUM levels. Asset Mix Shifts → Investment Management Fees → Revenue varies by product strategy; shift to lower-fee products reduces income. Investment Performance → AUM → Poor performance leads to redemptions and lower sales, reducing the base for fee calculations. Operational and Third-Party Dependency → Operating Expenses → Potential for increased costs, regulatory fines, and remediation expenses. Regulatory and Compliance Burdens → Operating Expenses → Increased costs of doing business and potential for significant fines (e.g., up to 4% of global revenue for GDPR violations).

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
8-K	Jan 2026	—
10-Q	Jan 2026	Dec 2025
14A	Dec 2025	—
10-K	Nov 2025	Sep 2025