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 fourth 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'll 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 fourth quarter earnings call. The press release and the supplemental materials document can be found on our IR website at investors.troweprice.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 our 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. Discussions 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 December 31st, 2025. Now I'll turn it over to Rob.

Thank you, Lindsley, and thank you all for joining today's call. 2025 brought a third straight year of strong global market returns, though it remains a narrow market dominated by a handful of mega cap stocks and with riskier names outperforming quality and value. While this market growth served as a tailwind for our assets under management and investment advisory revenue, it was not an environment that was highly conducive to fundamental research, active management, and long-term investing. But we did see some evidence of a market broadening in the fourth quarter, which would be a positive for fundamental research-driven active management. We closed the year with $1.78 trillion in assets under management, up over 10% from the start of the year, despite $56.9 billion in net outflows. Net outflows were concentrated in our equity and mutual fund business, with $75 billion of net outflows from equity, and on a vehicle basis, almost $64 billion from mutual funds in 2025. Importantly, we saw an increase in gross sales, which were higher than 2024 and up over 40% from 2023. Offsetting these higher growth sales were redemptions that were greater than anticipated and were driven by performance shortfalls in certain strategies and from portfolio rebalancing due to elevated equity markets. We generated over $2 billion of free cash flow in 2025 and returned nearly $1.8 billion of cash to our stockholders. We also extended our long history of increasing our regular dividend, marking our 39th consecutive year of increases since our IPO in 1986. We are building momentum across our strategic initiatives. I remain confident in our plan and our people, and I look forward to what's ahead. With that, I'll turn to investment performance. We are seeing improvement in the performance of several key strategies and continue to have strong long-term performance across a range of strategies and asset classes. While we're headed in the right direction, there remains room for further improvement. About half of our funds beat their peer groups across the time periods, with 49, 56, 46, and 61% outperforming on the 1, 3, 5- and 10-year time periods, respectively. For the 3-, 5-, and 10-year time periods, asset-weighted performance is stronger, with 72%, 54%, and 79% of fund assets beating their peer groups for the respective periods. For the 1-year time period, 42% of fund assets beat their peer groups. On an asset-weighted basis, over half of our equity funds beat their peer groups on a 3- and 5-year basis, and over 70% beat their peers for the 10-year time period. Fixed income continued to deliver strong performance, with over 75% of fund assets beating their peer groups across the 1, 3, 5, and 10-year time periods. Long-term performance in our target date franchise remained strong, with 81%, 55%, and 98% of fund assets outperforming the 3, 5, and 10-year time periods, respectively. Several very strong quarters in 2020 that have been rolling off have been a recent drag on the five-year performance numbers. Returns for the one-year time period were weaker, with 29% of fund assets outperforming peers. This was driven by a slightly lower weight to international equities than some peers and by security selection in some of the underlying portfolios, primarily in the second and third quarters of 2025. Across alternatives, performance for the quarter was generally strong amid a more discerning credit backdrop. Credit selection continued to be highly effective as it successfully avoided any exposure to widely publicized frauds or failures. Beyond investment performance, in 2025, we continued to make progress on our strategic initiatives. We established a strategic collaboration with Goldman Sachs, to pursue opportunities in wealth and retirement through co-developed public-private offerings and advice solutions. And in the fourth quarter, we launched the first co-branded model portfolios, including four portfolios that are now live on the GeoWealth platform and a fifth expected in the first half of 2026. In January, we launched one of the model series, the Goldman Sachs T. Rowe Price Dynamic ETF Portfolio, on the Morgan Stanley platform. We extended our retirement leadership globally with a subadvised retirement date fund series in partnership with a Japanese asset manager and two new retirement allocation funds with a strategic partner in Asia, marking the first time a U.S. asset manager offered retirement-focused products to retail investors in Hong Kong and Singapore. Additionally, we saw growth in the Canadian target date series we launched in 2024. We maintained our position as an industry leader in active target date solutions, building on over 20 years of product innovation and surpassing $560 billion in assets under management across a diverse suite of solutions. We also helped clients navigate change and achieve better outcomes with a breadth of retirement solutions, including the launch of our innovative Social Security Analyzer tool. We grew our active ETF business with the recent launch of two new active core ETFs, one focused on the U.S. and one on international. These active core strategies combine quantitative and fundamental research for alpha generation, and we believe this approach will compete effectively with passive. We also expanded our fixed income ETF range with three new muni strategies and one multi-sector ETF. All told, we launched 13 ETFs in 2025, bringing our total to 30, and we grew assets under management to over $21 billion a year end. We continued to expand our alternatives business. At the start of January 2026, we had the first close for a T. Rowe Price Managed Private Equity Fund. This strategy is a closed-end drawdown fund and seeks to create a portfolio of approximately 25 category-leading private companies. T. Rowe Price has exceptional access to late-stage private companies given our successful 18-year track record of investing over $24 billion across approximately 300 private companies and our reputation for being thoughtful, long-term, and value-added shareholders well beyond the IPO. OHA enjoyed a second consecutive record fundraising year with over $16 billion of capital raising across the platform led by private lending strategies. Private credit deployment experienced a strong finish to the year, reflecting increased sponsor activity and looking ahead, there continues to be an expectation of an acceleration in deal volume as the pipeline of pending private credit transactions remains robust. We made key organizational changes, including the creation of the technology data and operations function to focus on integrating digital capabilities, data strategy, and enterprise operations to accelerate execution, and the global strategy function to sharpen our strategic vision, integrate corporate development and product strategy, and support our growth agenda. We advanced our use of artificial intelligence across the firm, amplifying our investment professionals' capabilities without replacing their judgment, improving the speed and personalization of client service, and adopting new technologies with disciplined governance and thoughtful onboarding. The momentum we built in 2025 carried into 2026 with our announcement in January of a new strategic partnership with First Abu Dhabi Bank. Leveraging our collective's strengths and capabilities, Our partnership with FAB aims to deliver world-class investment solutions across public and private markets, tailored to meet the needs of investors throughout the Middle East. While we have had an institutional business in the Middle East for some time, this is our first strategic partnership in the region, and it reflects our commitment to growing and diversifying our business through innovative global partnerships. This partnership, and all the progress we made in 2025, is a reflection of our associates' steadfast commitment to our clients, and I want to thank each of them for their dedication. And now, Jen will share an update on our financial results.