T. Rowe Price Group, Inc.

Good morning. My name is Daniel, and I will be your conference facilitator today. Welcome to T. Rowe Price's second quarter 2025 earnings conference call. All participants will be in listen-only 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 Price'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 second quarter earnings call. The press release and a supplemental materials document can be found on our IR website at investors.teroeprice.com. Today's call will last approximately 45 minutes. Our chair, CEO, and president, Rob Sharps, and CFO, Jen Dardis, will discuss the company's results for about 15 minutes. Then we'll open it up to your questions, at which time we'll be joined by head of global investments, Eric Bile. 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 in 10Q. Discussion related to the funds is intended to demonstrate their contribution to the organization's results and are not recommendations. All investment performance references to peer groups on today's call are using Morningstar peer groups and for the quarter that ended June 30th, 2025. Now I'll turn it over to Rob.

Thank you, Lindsley, and thank you all for joining today's call. Despite a challenging quarter, we are building momentum for the long term, growing our ETF business, leveraging partnerships to extend our reach, and expanding our leadership in retirement. We have developed a broad and ongoing plan to reduce our expense growth over time while continuing to invest in capabilities and client reach. Jem will discuss these efforts in more detail in a moment. but we believe that our plan will drive efficiency to fund investment in the future of the business. While we acknowledge the short-term headwinds, we are confident that we are positioned to take advantage of the opportunities ahead. I will turn now to investment performance. Equity markets began the quarter with a sharp sell-off in April, followed by strong gains in May and June. There was a return to growth outperforming value and large cap outperforming small cap, while the margin of international outperforming U.S. narrowed from the first quarter. This environment proved a challenging quarter for some of our strategies. However, long-term performance remained solid, with over half our funds beating their peer groups for the three-, five-, and ten-year time periods. And on an asset-weighted basis, results were stronger, with 65%, 58%, and 78% of assets beating peer group medians on a three-, five-, and ten-year basis. Within our equity division, U.S. equity research, diversified mid-cap growth, international value, and integrated global equity all added to their strong 3, 5, and 10-year track records. We saw continued improvement in blue-chip growth, which is now in the top quartile versus peers over three years, and Japan equity is in the first quartile versus peers for the one-year time period. That said, a number of our value strategies underperformed this quarter. The long-term performance of our target date funds is strong. The nearer date advantages, which make up the bulk of our AUM and where our glide path approach is more differentiated than peers, continue to have top quartile performance versus peers for the three, five, and 10-year time periods. In fixed income, performance remains strong versus peers with a majority of funds beating their peer group medians over all time horizons, led by the high yield and low duration segments. Our emerging market segment had a weaker quarter versus peers, but over long time periods performed better versus the benchmark. Shifting to alternatives, where credit markets posted solid returns in the quarter, our private credit and structured credit portfolios produced strong gains, while liquid strategy portfolios performed largely in line with benchmarks. New deal flow has been muted due to limited private equity activity, however, the near-term pipeline is starting to see some positive developments. Across our business, we continue to see progress in the areas where we are investing for growth. Fixed income is growing with six consecutive quarters of positive net flows. We remain a leader in retirement. Our target date suite surpassed half a trillion dollars in assets under management, ending the quarter with over $520 billion across our broad range of offerings. We continue to see strong momentum in our retirement solutions and added 2070 vintages to our retirement suite. Outside the United States, we have seen increased client interest in our US equity research strategy after launching with a large online broker in Japan and winning a mandate from a top Swiss bank. In the first half of the year, we saw over $6 billion in inflows to our ETF products, bringing AUM and our ETF franchise to $16.2 billion as of June 30th. Eleven of our ETFs have scaled to over $500 million in AUM. We are also growing our ETF product line with the recent launch of two diversified equity ETFs, global equity and international equity research, and three sector ETFs, financials, healthcare, and natural resources. This brings our ETF range to 24 with more in the pipeline. We continue to expand private market alternatives in our wealth channel and evaluate the potential to bring private market alternatives to the retirement channel. Before I turn to Jen, I want to take a moment to recognize David Giroux. For the third time in his 19 years as a portfolio manager at T. Rowe Price, David was named U.S. Morningstar outstanding portfolio manager for the allocation category. Well done to David and the entire capital appreciation team. We are grateful for our associates steadfast focus on delivering value for our clients. It is their commitment that is powering our progress. And now, Jen will discuss our second quarter financial results.