IVZ Tops Q1 Earnings on Revenue Growth, Partners With Barings, Stock Up

Invesco’s IVZ first-quarter 2025 adjusted earnings of 44 cents per share surpassed the Zacks Consensus Estimate of 39 cents. Moreover, the bottom line jumped 33.3% from the prior-year quarter.

Additionally, Invesco announced a collaboration with MassMutual’s global asset management subsidiary, Barings, to boost its private credit offerings. In light of these positives, Invesco’s shares jumped 4.3% in today’s pre-market trading session.

The results were primarily aided by higher adjusted net revenues. An increase in the assets under management (“AUM”) balance due to decent inflows was positive too. However, higher adjusted operating expenses were woe.

Results in the reported quarter included certain notable items. After considering those, net income attributable to common shareholders was $171.1 million or 38 cents per share compared with $141.5 million or 31 cents per share in the year-ago quarter.

Invesco’s Adjusted Revenues & Adjusted Expenses Increase

Adjusted net revenues in the quarter were $1.11 billion, up 5.3% year over year. The top line beat the Zacks Consensus Estimate of $1.10 billion.

Adjusted operating expenses were $759.2 million, up marginally on a year-over-year basis.

The adjusted operating margin was 31.5%, up from 28.2% a year ago.

IVZ’s AUM Balance Increases

As of March 31, 2025, AUM was $1.84 trillion, up 11% year over year. The average AUM at the end of the first quarter totaled $1.88 trillion, up 16.6%.

The company witnessed long-term net inflows of $17.6 billion in the reported quarter.

Invesco’s Decent Balance Sheet

As of March 31, 2025, cash and cash equivalents were $821.7 million compared with $986.5 million as of March 31, 2024.

The long-term debt was $964.8 million.

Invesco Collaborates With Barings

Invesco announced its strategic product and distribution for U.S. Wealth channels with MassMutual’s $442 billion global asset management subsidiary, Barings.

This alliance aims to focus on unique and market-leading private credit solutions for clients. It combines the global private credit and public fixed income proficiency, extensive product structuring and sophisticated asset allocation capabilities of both firms.
 
Andrew Schlossberg, president & CEO of Invesco, stated, “This partnership is special because it also allows us to further strengthen our balance sheet, delivers new solutions to clients, enhances flexibility and ultimately gives us the opportunity to meaningfully improve our overall leverage profile while also being earnings accretive. Importantly, this transaction does not preclude continued investments in our business to support growth nor our ability to maintain a regular program of share repurchases and modest increases in the common stock dividend, both of which we expect to continue to execute.”

MassMutual intends to aid this initiative with an initial investment of $650 million to boost the launch and scale products, and accelerate client adoption.

Moreover, Invesco agreed to repurchase roughly $1 billion of its Series A preferred stock. The all-cash purchase, funded by debt financing, is anticipated to close in May 2025. This is expected to be accretive to Invesco’s earnings beginning in the second half of 2025.

Our View on IVZ

A tough macroeconomic backdrop will likely keep Invesco’s net flows volatile. Further, high levels of intangible assets on the balance sheet are likely to hurt the company’s financials in the near term. Nonetheless, strategic expansion initiatives and a partnership with Barings will likely bolster AUM growth.

Invesco Ltd. Price, Consensus and EPS Surprise

Invesco Ltd. price-consensus-eps-surprise-chart | Invesco Ltd. Quote

Currently, IVZ carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Asset Managers

BlackRock’s BLK first-quarter 2025 adjusted earnings of $11.30 per share handily surpassed the Zacks Consensus Estimate of $10.43. The figure reflects a rise of 15% from the year-ago quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

BLK’s results benefited from a rise in revenues. AUM witnessed robust growth and touched a record high of $11.58 trillion, driven by net inflows and favorable forex impact, partially offset by market depreciation. However, higher expenses and lower non-operating income were headwinds.

Blackstone’s BX first-quarter 2025 distributable earnings of $1.09 per share surpassed the Zacks Consensus Estimate of $1.04. The figure reflects a rise of 11% from the prior-year quarter.

Results benefited from higher segment revenues and a surge in AUM balance. However, an increase in GAAP expenses was a headwind for BX.

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This article originally published on Zacks Investment Research (zacks.com).

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