Oct 27, 2026 earnings call — Preferred repurchase and ETF growth
Invesco repurchased an additional $1.5 billion of preferred stock and reported Net revenue of $1.4 billion for the quarter.
Revenue $1.4B (est $1.4B) · EPS $0.72 (est $0.74)
Key quotes
"This morning, we announced the repurchase of an additional $1.5 billion of the preferred stock held by MassMutual."
"Our QQQ fund also attracted strong interest during the quarter, with nearly $7 billion of net inflows or 6% annualized organic growth."
"We generated over $100 billion of net long-term inflows through the first nine months of the year, representing a 6.5% annualized organic growth rate."
Analyst Q&A 10
Which businesses drive operating leverage
Q (Michael Cho · JPMorgan): He wanted to know how to think about margins and operating leverage across major AUM buckets, given mix shifts on the net revenue yield slide. He also asked if ETFs/scale could be a driver.
A: Management said they view investment capabilities and the business as a whole, and pointed to ETFs and the QQQ as places where scale is a clear difference-maker for operating margin expansion. They also called out the China JV as an area with visible high operating margins and described a global expense prioritization approach to drive leverage. They emphasized growing capabilities responsibly while remixing expenses.
"But certainly, some of those investment capabilities, scale matters. ETFs and the QQQ would be the place I would point to where you certainly can see the difference-maker of scale and the impact that's having on our overall operating margin expansion." — Allison Dukes (CFO)
Impact of recent deals on fee yields
Q (Brennan Hawken · BMO): He asked how the Canadian sale and elevated money fund flows affected net revenue yield and the net distribution tick down. He also asked about future levels for third-party plus distribution fees.
A: Management said the Canadian sale reduced net revenue yield by about 0.2 of a basis point and that roughly 0.7 was due to mix shift, including strong money market growth and ETF mix like QQQ. They said third-party expenses plus distribution fees were 22.9% this quarter and suggested thinking of that relationship around 23% going forward.
"The Canadian sale did have some impact on the net revenue yield, maybe about 0.2 of a basis point." — Allison Dukes (CFO)
Participation in AI-related financing and credit
Q (Glenn Schorr · Evercore): He wanted to know whether avoiding certain real estate types (like data centers) was team-specific or firm-wide, and how Invesco participates in large financing demand across AI-related assets. He asked about debt involvement.
A: Management said the data-center avoidance comment was specific to the real estate team and that real estate debt has been a strong grower for the firm. They noted they participate broadly: public and private fixed income plus cash total about $800 billion, and the alternative credit platform on the private side is about $50 billion across loans, direct lending, and distressed.
"You look at all of our public and private fixed income, inclusive of cash, it's about $800 billion." — Andrew Schlossberg (CEO)
Private markets growth and M&A flexibility
Q (Alex Blostein · Goldman Sachs): He asked how Invesco could accelerate private markets growth to offset active equity fee pressure and whether improved balance sheet flexibility changes M&A approach.
A: Management described the private markets profile, emphasising real assets and growth in debt and credit partnerships aimed at wealth and defined contribution markets, and said partnerships and organic focus remain key. On M&A, they said they remain opportunistic and open-minded to inorganic growth, and that improved balance sheet and stock price give more optionality but do not change the strategy.
"We are as opportunistic and open-minded to inorganic growth as we ever have been." — Allison Dukes (CFO)
Margin sustainability and platform implementation
Q (Bill Katz · TD Cowen): He asked whether the low comp ratio is durable and about longer-term margin opportunity, plus timing and run-rate for Alpha NextGen implementation costs and servicing/onboarding fees.
A: Management reiterated the annual comp-to-revenue focus and said they aim to sustain operating margins in the high 30s, while acknowledging quarters can be noisy. They said they are transitioning all AUM onto the hybrid investment platform by the end of this year, perhaps into the beginning of next year, with implementation costs of about $15 million this quarter and $15 million expected in the fourth quarter before they trend off.
"we are still working towards transitioning all of our AUM onto the platform by the end of this year, perhaps some of it into the beginning of next year." — Allison Dukes (CFO)
Tokenized funds and digital assets
Q (Brian Bedell · Deutsche Bank): He asked about Invesco's digital asset strategy and willingness to tokenize funds, and whether tokenization will be initially overseas or also in the U.S.
A: Management said tokenized funds will grow and Invesco is participating via partnerships and launches, citing their on-chain U.S. Treasury fund with Superstate of about $1 billion as the first foray. They said they are looking at stablecoin reserve money market tokenizations and potentially ETFs and traditional funds, and expect tokenization to develop both overseas and in the U.S., although it is early.
"We think the tokenized fund market is going to continue to grow, and we think it is important." — Andrew Schlossberg (CEO)
China JV flows and resilience
Q (Craig Siegenthaler · BofA): He asked how the weaker Chinese equity market affects net flow outlook for the China JV, whether fixed income/liquidity will drive flows, and about leadership changes in the JV.
A: Management said the China JV is resilient, hitting a high water mark of $166 billion of AUM this quarter, and equities are only about 15% of that AUM. They highlighted a diverse mix including ETFs (~$15 billion), balanced funds, and ongoing product launches and talent recruitment, suggesting the JV can perform well even if equity markets are not strong.
"This quarter, we hit our high water mark for assets under management ending the quarter at $166 billion." — Andrew Schlossberg (CEO)
Legacy systems sunsetting and savings
Q (Mike Brown · UBS): He asked which specific legacy systems will be sunset over 6–12 months and for sizing of expense saves into 2027 and 2028 from the hybrid platform.
A: Management said they will not disclose specific legacy systems because of many contracts and complexity, and that they will provide more guidance on 2027 expenses in January. They said some capacity savings will be reallocated and some will fall to the bottom line, and there will be a next phase of stabilization and decommissioning into 2027 and 2028.
"I think in terms of sizing of saves, we'll give more guidance around 2027 expenses when we get to January." — Allison Dukes (CFO)
EMEA organic growth and fundamental equity flows
Q (Alex Bond): He asked whether the recent strong ETF and multi-asset growth in EMEA is sustainable and for expectations for organic growth there; he also asked about outlook for fundamental equities and net flows.
A: Management said EMEA AUM is about $420 billion, roughly half in ETFs, and AUM is up about 25% year-on-year with strong ETF, systematic equity, and multi-asset inflows. On fundamental equities, they said the goal is net-flow market share gains through higher gross sales and lower redemptions via better investment performance and team alignment.
"We are up to about $420 billion of assets in EMEA, about half of that coming from ETFs." — Andrew Schlossberg (CEO)
Target operating margin and AI uses
Q (Michael Cyprys · Morgan Stanley): He asked why management targets high 30s operating margin given the nearly 41% quarter, whether any seasonality/noise explains Q3, and if investment pacing will keep margins in high 30s. He also asked where AI can change operations and financials.
A: Management said seasonality affects comp across multiple quarters and they want a margin 'cushion' so they can sustain high 30s through varied markets while still investing in growth; they would run higher than 40% if appropriate but won't starve the business. On AI, they said top opportunities are improving investment returns and client engagement, which drive revenue and may create efficiencies, applied both bottom-up and top-down.
"We are focused on making sure we're at high 30s through any market environment, and we think that gives us more cushion." — Allison Dukes (CFO)