T. Rowe Price Group, Inc.

Good morning. My name is Shannon, and I will be your conference facilitator today. Welcome to T. Rowe Price's first quarter earnings conference call. All participants will be in listening mode until the question and answer period. I will give you instructions on how to ask questions at that time. As a reminder, this call is being recorded and will be available for replay on T. Rowe's website shortly after the call concludes. I will now turn the call over to Lindsley Carruth, T. Rowe Price's Director of Investor Relations.

Hello, and thank you for joining us today for our first quarterly earnings call. The press release and a new supplemental materials document can be found on our IR website at investors.heroprice.com and from the downloads link in the upper right of the webcast platform. Today's call will last 45 minutes. Our CEO and President Rob Sharps and CFO Jen Dardis will discuss the company's results for a little over 15 minutes, and then we'll open it up to your questions. We ask that you limit it to one question per participant. I'd like to remind you that during the course of this call, we may make a number of forward-looking statements and reference certain non-GAAP financial measures. Please refer to the forward-looking statement language and the reconciliations to GAAP in the supplemental materials as well as in our press release and 10-Q. Now I'll turn it over to Rob.

Thank you, Lindsley, and welcome to everyone joining us today for our inaugural earnings call. I'd like to start by saying that In rapidly evolving market conditions like the ones we experienced this quarter, what we deliver for our clients matters more than ever. Our clients have entrusted us with over $1.3 trillion of assets, and we are deeply focused on helping them meet their long-term financial objectives. I'm pleased by how our teams have responded in these times, staying close to our clients, sharing insights, and helping them navigate uncertainty. Our first quarter shows some encouraging signs. Markets posted gains, and our investment performance showed signs of improvement. However, the market environment remains uncertain, and our flows remain under pressure. In light of this uneven backdrop, we continue to carefully manage our financials to preserve our ability to invest in long-term initiatives to support growth. I remain confident in the long-term fundamental value that a global active investment management firm like T. Rowe Price can deliver no matter the environment. With that, I'll provide an overview of the market context and our investment performance as well as an update on our strategic priorities before turning it over to Jen to review the quarterly financial results. Stocks in the U.S. and most other major equity markets recorded solid gains in the first quarter, although returns were trimmed by the banking turmoil in the U.S. and later Switzerland. Bonds also offered good returns as growth and interest rate expectations moderated. A flight to safety following the banking turmoil led to a sharp decrease in U.S. Treasury yields, especially in the two-year yield. The yield curve stayed inverted, however, which may be an indicator of a coming recession. Stock returns in the U.S. varied markedly. Turmoil in the banking sector and signs of ebbing growth and inflation pressures led to lower Treasury yields and boosted growth shares by increasing the implied value of future earnings. The NASDAQ Composite Index jumped nearly 17%, and technology shares within the S&P 500 Index returned nearly 22%, including dividends, during the first quarter. Conversely, declines in bank stocks and oil prices contributed to a modest overall decline in the small-cap Russell 2000 value index. Monetary and fiscal tightening, healing supply chains, and easing energy prices helped lower inflation in most major economies, even if not yet to central bankers' satisfaction. The annual headline inflation rate fell from 6.4% to 5% over the quarter in the U.S., and from 9.2% to 6.9% in the Eurozone, with UK inflation being an outlier in both direction and magnitude. In this choppy market environment, we saw our investment performance improve for some of our equity and fixed income strategies that struggled last year. While it was reassuring to see performance rebound in a number of key strategies in the first quarter, we are keenly aware that one quarter does not make a trend, especially in such an unsettled macro environment. Periods of market transition and elevated uncertainty can work to the advantage of quality active managers. Near-term dislocations often create long-term opportunities as the market refocuses on fundamental drivers such as valuation and earnings quality. Our firm has navigated both sides of the investment performance cycle before. We persevered by adhering to our rigorous investment process and leveraging the insights generated by our global research platform. The solid long-term track record of our target date franchise reflects these strengths, as does the performance of our value and core equity strategies last year. And I'm encouraged by the resilience of our U.S. equity research strategy, where more than 25 of our TRPA research analysts contribute to the portfolio in their focused area of expertise. As a fundamental research-driven investment organization, our deep sector expertise and longstanding engagement with management teams is pivotal to understanding the long-term strategy and goals of the companies we invest in. We are proud that among more than 330 asset management firms nominated, we came in a very close second in institutional investors' inaugural 2023 ranking of America's top asset management firms. I am pleased that so many corporate voters recognized our differentiated research and corporate access model. Despite these bright spots, net flows continue to be under pressure. As we reported, net outflows for the first quarter were $16.1 billion. The primary driver was net outflows in our large cap growth equity strategies, reflecting both continued weak industry demand and the lagging impact of investment performance challenges in these strategies. While those net outflows were broad-based, they were particularly apparent in our United States defined contribution investment only and broker-dealer channels. We continue to face headwinds with net flows to our large cap growth strategies, but we expect that they will abate with sustained investment performance and time. On the positive side, we recorded $7.5 billion of net inflows into the Target Date franchise, and over $250 million in net flows in each of global multi-sector bond, U.S. dividend growth, U.S. taxable cash management, U.S. all-cap opportunities, and U.S. short-term bond strategies during the quarter. We expect that we will return the firm to positive organic growth over time with a combination of more constructive markets, sustained improved performance in key strategies, traction with a broader range of vehicles, and continued progress with our strategic initiatives. Although excellent investment performance is central to our long term success, our industry has gotten more competitive. We're committed to investing in the areas where we have scaled businesses, such as our leading retirement franchise, and to building capabilities to support future growth. We see an opportunity to elevate our focus on areas where we have already invested resources over many years, and where we believe we have the greatest opportunity for growth and long term success. I would like to highlight some areas of focus and our progress against our strategic initiatives. We are bolstering our US intermediary wealth channel, leveraging and extending the partnerships we have built. This quarter, we were named a top tier provider to another one of the largest intermediary firms in the industry. With this decision, we are now a top tier partner with six of the 10 largest intermediary firms in this space. We are also broadening our range of products to ensure we deliver our investment strategies in the vehicle of choice. As more advisors look to do more with fewer investment management partners, we are well positioned to build on these deep partnerships. We are accelerating growth in international markets with a focus on unlocking growth in select countries where we have existing businesses that offer the greatest opportunity. During this quarter, I spent two weeks in Asia where we have 365 associates and clients representing $50 billion of assets under management. I had a chance to spend time with several of our clients and it reinforced for me the depth of relationships that we are building in the region and the opportunity that we have to do much more with them over time. In our direct retail business, we are enhancing our individual investor client experience through an improved digital experience and differentiated service offering. We recently completed the acquisition of Retiree Inc., a FinTech firm that offers innovative retirement income planning software. This acquisition will complement and expand our retirement income capabilities across our audiences with planning tools for individuals and practitioner tools for financial professionals. We expect to use the technology in our retail direct, defined contribution, and wealth management channels. Finally, we are expanding our private markets and alternatives capabilities by leveraging our distribution channels and OHA's investment capabilities. As we previously shared, we acquired OHA to accelerate our expansion into alternative investments. Our first joint co-branded product, Hero Price OHA Select Private Credit Fund, or Ocredit, is advancing. This business development company is a retail product developed to leverage OHA's private credit investment expertise with T. Rowe Price's distribution capabilities. We expect to close the seed round in the second quarter and launch Ocredit more broadly later this year. I am grateful to our associates around the world for focusing on delivering for our existing clients and for continuing to find new ways to bring what we do to a broader, more global base of clients. I will now turn to Jen to cover our financial results for Q1.