Ending Assets Under Management (AUM) increased by $107.7 billion, or 6.9%, to $1,676.8 billion at June 30, 2025, compared to $1,569.1 billion at June 30, 2024. This growth was primarily driven by $125.4 billion in market appreciation and income during Q2 2025.

Despite the overall increase in AUM, the company experienced net cash outflows of $14.9 billion in Q2 2025 and $23.5 billion for the six months ended June 30, 2025. This indicates continued client redemptions or transfers, partially offsetting market appreciation.

T. Rowe Price has committed $330 million for investment in future OHA product launches through 2026 and plans $282 million in full-year 2025 capital expenditures, with over 80% allocated to technology initiatives. These investments aim to expand capabilities and support new product development.

U.S. GAAP operating expenses increased by $76.4 million, or 6.5%, in Q2 2025 compared to Q2 2024, reaching $1,245.0 million. This rise, primarily due to higher deferred compensation liabilities, compensation and benefits, and technology costs, outpaced revenue growth and compressed operating margins.

Management acknowledges challenging industry trends such as passive investment growth and fee pressure. They have initiated actions to 'reduce expense growth, realign resources, and invest in existing and future capabilities' to adapt to the evolving landscape and offset inflationary pressures.

The firm's associate count decreased by 0.3% from March 31, 2025, and 1.2% from the end of 2024, to 8,063 associates at June 30, 2025. This reduction, alongside increased compensation and benefits costs, suggests a strategic effort to optimize staffing levels while managing talent expenses.

The company stated there have been no material changes in its market risks from those provided in Item 7A of the Form 10-K Annual Report for 2024. This indicates a stable risk profile concerning general market volatility and investment performance.

The 'One Big Beautiful Bill Act' (OBBBA) was enacted on July 4, 2025, introducing significant changes to federal and international tax provisions. While the company is evaluating its impact, management believes the provisions will not be material to its financial position and results of operations.

Management highlights ongoing challenges in the investment management industry, including passive investments taking market share from active strategies and continued downward fee pressure. These factors pose an enduring threat to revenue growth and profitability.

As of June 30, 2025, 47.2% of the firm's rated U.S. mutual funds received an overall rating of 4 or 5 stars from Morningstar, significantly outperforming Morningstar's fund population where only 32.5% received such ratings. This indicates a competitive edge in fund quality.

Assets under management in target date retirement portfolios increased to $520.3 billion at June 30, 2025, from $475.6 billion at December 31, 2024. Net flows into these portfolios were $1.7 billion in Q2 2025 and $8.0 billion for the six months, indicating strong client adoption in this key segment.

The average annualized effective fee rate (EFR) declined across both three- and six-month periods ended June 30, 2025, compared to 2024. This suggests ongoing pricing pressure or a shift in AUM composition towards lower-fee products, impacting the company's revenue per dollar of AUM.

Technology, occupancy, and facility costs increased by $18.5 million (11.5%) in Q2 2025 YoY to $179.4 million, and by $36.2 million (11.6%) YTD 2025 YoY to $347.0 million. These increases are primarily due to higher technology costs, hosted solutions, depreciation, and the new corporate headquarters occupied in March 2025.

Compensation, benefits, and related costs increased by $13.0 million (2.0%) in Q2 2025 YoY to $648.8 million, and by $41.6 million (3.3%) YTD 2025 YoY to $1,306.7 million. This was mainly due to higher salaries, healthcare costs, and stock-based compensation, partially offset by lower bonus accruals.

Acquisition-related amortization and impairment costs decreased by $12.7 million (28.9%) in Q2 2025 YoY to $31.2 million, and by $13.9 million (18.8%) YTD 2025 YoY to $59.9 million. This reduction is primarily due to lower impairment charges related to certain indefinite-lived intangible assets compared to the prior year.

The company anticipates full-year 2025 capital expenditures of approximately $282 million, with over 80% specifically planned for technology initiatives. This demonstrates a strong commitment to enhancing technological capabilities and infrastructure.

Technology, occupancy, and facility costs saw an 11.5% increase in Q2 2025 YoY, primarily driven by higher technology costs, including hosted solutions. This indicates continuous investment in modernizing IT infrastructure and adopting new technologies to support operations and client services.

Higher occupancy and facility costs are partly attributed to the firm's new corporate headquarters, which was occupied in March 2025. This investment in physical infrastructure supports the company's long-term operational strategy and capacity.

The company expended $326.1 million to repurchase 3.4 million shares of common stock in the first half of 2025, compared to $195.5 million for 1.7 million shares in H1 2024. This accelerated repurchase activity, at an average price of $97.30 per share, reflects management's opportunistic approach and commitment to offsetting dilution from equity-based compensation.

The quarterly recurring dividend per common share was increased by 2.4% to $1.27 from $1.24 in February 2025. This consistent increase demonstrates a commitment to returning value to shareholders and confidence in future cash flow generation.

T. Rowe Price Group, Inc. has committed $330 million for investment in future OHA product launches through 2026. This allocation highlights a strategic focus on expanding product offerings and driving future growth, particularly in alternative capabilities.

The provided 10-Q filing for the period ended June 30, 2025, does not contain specific disclosures or updates regarding environmental commitments, social responsibility initiatives, or changes to governance practices beyond standard financial controls.

Management confirmed that disclosure controls and procedures were effective as of June 30, 2025, and there were no material changes to internal control over financial reporting during Q2 2025. This indicates adherence to established governance frameworks.

The FASB issued ASU No. 2023-09 and 2024-03, requiring enhanced disclosures for income taxes and expense disaggregation, respectively. While not yet adopted, these changes will impact future reporting transparency, aligning with evolving governance expectations for financial disclosure.

Major U.S. stock market indexes, including the S&P 500 (+10.9%), NASDAQ Composite (+17.8%), and Russell 2000 (+8.5%), rose significantly in Q2 2025. This rally was driven by a 90-day pause on U.S. reciprocal tariffs and a U.S.-China trade deal, boosting investor optimism.

Global bond returns were mostly positive in Q2 2025, with the Bloomberg Global Aggregate Ex-U.S. Dollar Bond Index up 7.3%. The European Central Bank (ECB) and Bank of England reduced benchmark interest rates twice, contributing to positive bond performance and currency appreciation against the U.S. dollar.

A short-lived spike in oil prices occurred in June due to missile and drone attacks between Israel and Iran. Management also noted 'ongoing inflationary pressures on compensation and contractual spending' as a challenge, indicating continued sensitivity to geopolitical events and macroeconomic factors.