Franklin Templeton Q4 Net Income Jumps 223% to $380.1M

Franklin Templeton, Inc. reported preliminary net income of $380.1 million, or $0.72 per diluted share, for the quarter ended September 30, 2026, the company announced on November 6, 2026. That compares with $171.5 million, or $0.31 per diluted share, in the prior quarter and $117.6 million, or $0.21 per diluted share, a year earlier. Total assets under management reached $1,795.1 billion at period end, up 8% year-over-year from $1,661.2 billion, while full-year long-term net inflows totaled $84.1 billion.

Context — Why Franklin Templeton's Q4 Results Matter Now

The quarterly swing is sharp against the prior three-month period. Net income rose 122% from the June quarter and 223% from the year-ago quarter, while preliminary operating income of $355.8 million was 65% above the previous quarter and 317% above the prior year. Diluted earnings per share more than tripled from $0.21 a year ago.

The full fiscal year tells a similar story. Net income for the twelve months ended September 30, 2026, was $1,075.3 million, or $1.97 per diluted share, versus $524.9 million, or $0.91 per diluted share, for the prior fiscal year — a 105% increase.

The operating margin moved from 3.6% in the year-ago quarter to 14.6%. Adjusted operating margin, a non-GAAP measure the company defines by excluding acquisition-related items, regulatory settlement charges and consolidation effects, reached 31.8% for the quarter versus 26.0% a year earlier.

What changed is the flow picture. Franklin Templeton recorded $20.8 billion in long-term net inflows during the quarter, against $11.9 billion in long-term net outflows in the same quarter last year. Every quarter of the fiscal year showed positive net flows across all regions and in both retail and institutional channels, according to the company.

The company also flagged $11.7 billion of long-term net outflows at Western Asset Management for the full year, a drag absorbed within the broader inflow total. Cash management net outflows of $6.0 billion partially offset the quarterly long-term inflows.

Data — What the Numbers Show

The headline comparison across three periods is stark. Net income: $380.1 million this quarter, $171.5 million in the June quarter, $117.6 million a year ago. Diluted EPS: $0.72, $0.31, $0.21. Operating income: $355.8 million, $215.8 million, $85.4 million.

Adjusted figures, which the company presents as supplemental non-GAAP information, show a smoother but still positive trajectory. Adjusted net income was $493.4 million and adjusted diluted EPS was $0.94 for the quarter, versus $386.3 million and $0.72 in the prior quarter and $357.5 million and $0.67 a year ago. For the full year, adjusted net income was $1,642.6 million and adjusted diluted EPS was $3.07, against $1,195.8 million and $2.22 in the prior fiscal year.

Operating revenues rose 4% year-over-year to $2,434.9 million, with investment management fees up 4% to $1,945.5 million and sales and distribution fees up 6% to $403.9 million. Total operating expenses fell 8% to $2,079.1 million, helped by a 39% drop in intangible amortization and the absence of last year's $202.2 million intangible impairment.

By asset class, equity AUM reached $763.8 billion, alternatives $304.6 billion and multi-asset $223.5 billion at quarter end. Alternatives generated $9.5 billion of long-term net inflows in the quarter, multi-asset $7.9 billion and equity $4.0 billion, while fixed income saw $0.6 billion in net outflows.

Metric	Q4 FY2026	Q4 FY2025	Change
Net income	$380.1M	$117.6M	+223%
Diluted EPS	$0.72	$0.21	+243%
Operating income	$355.8M	$85.4M	+317%
Adjusted operating margin	31.8%	26.0%	+5.8 pts
Ending AUM	$1,795.1B	$1,661.2B	+8%

Analysis — What It Means for Asset Management Peers

The margin expansion is the standout. Adjusted operating margin of 31.8% for the quarter and 28.0% for the full year came in ahead of the company's own plan, management said. For asset managers generally, the read-across is that fee revenue growth combined with cost discipline can produce margin gains even when average AUM grows at a mid-single-digit pace.

The alternatives franchise is the most exposed growth engine. Alternative AUM reached $304.6 billion with $48.7 billion in full-year fundraising, including $43.2 billion in private markets. That places Franklin Templeton among the larger listed managers with a scaled private-markets platform, competing for the same institutional allocations that flow to pure-play alternatives managers.

Exchange-traded funds are a second pressure point. ETF AUM rose 73% to $84.6 billion, retail SMA AUM grew 19% to $196.3 billion and Canvas AUM doubled to $32.6 billion. These are the vehicle categories where fee compression has been most acute across the industry, so growth here matters for revenue mix.

The limitation is the GAAP-to-adjusted gap. The $113.3 million difference between adjusted net income and GAAP net income this quarter reflects acquisition-related retention compensation, intangible amortization and consolidation effects — costs that are real even if management excludes them. A reader tracking cash economics should weight both figures.

Positioning-wise, the company returned $1.2 billion to shareholders through dividends and buybacks during the fiscal year, including 2.5 million shares repurchased for $86.1 million in the quarter. Cash and cash equivalents and investments stood at $6.0 billion, or $7.4 billion including direct investments in consolidated investment products.

Outlook — What to Watch Next

The company enters fiscal 2027 pointing to growing demand for private markets, customized solutions and alternative investment vehicles as the areas it expects to drive growth. Those are stated expectations, not results.

Three items are worth tracking. First, whether long-term net inflows stay positive after a full year of $84.1 billion; a reversal would pressure the revenue base that supports the current margin. Second, the trajectory of Western Asset Management flows, given the $11.7 billion full-year outflow the company disclosed. Third, the pace of alternative fundraising against the $48.7 billion full-year figure, since that segment carries the highest fee rates.

The institutional pipeline of won-but-unfunded mandates stood at $22.0 billion at quarter end, a figure that converts to revenue only as mandates are funded. The company did not disclose a timeline for that conversion.

Frequently Asked Questions

What does Franklin Templeton's Q4 earnings mean for retail investors in BEN stock?

The report shows net income of $380.1 million and adjusted diluted EPS of $0.94 for the quarter, with a dividend of $0.33 per share declared. For retail holders, the relevant disclosures are the 8% year-over-year AUM growth, the 31.8% adjusted operating margin and the $1.2 billion returned through dividends and buybacks. The report does not provide forward earnings guidance or a dividend policy statement.

Why did Franklin Templeton's operating income rise 317% year-over-year?

Two factors drove the increase. Operating revenues rose 4% to $2,434.9 million, while total operating expenses fell 8% to $2,079.1 million. The expense decline reflects a 39% drop in intangible amortization and the absence of the prior year's $202.2 million intangible asset impairment. Excluding those items, the improvement was driven by higher investment management fees and lower general and administrative costs.

What is Franklin Templeton's exposure to private markets and alternatives?

Alternative AUM reached $304.6 billion at September 30, 2026, with $48.7 billion in full-year fundraising, including $43.2 billion in private markets. Alternatives contributed $9.5 billion of long-term net inflows in the quarter. The company said alternative assets under management reached a record. It did not break out fee rates or revenue contribution by asset class in the release.

Bottom Line

Franklin Templeton closed fiscal 2026 with net income up 105% and $84.1 billion in long-term net inflows, though the durability of that flow momentum into fiscal 2027 remains the key variable.

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