Invesco reported third-quarter results on Tuesday, showing assets under management rising to $2.1 trillion, a 6.2% increase from the previous quarter.

The company recorded $28.9 billion in net long‑term inflows during the period, driven by demand in ETFs and Index products, growth in the China and India joint ventures, Fundamental Fixed Income, and Private Markets.

The stock surged by 3% after the release. Invesco posted an operating margin of 16.5% and an adjusted operating margin of 34.2%, improving by 240 and 300 basis points from the prior quarter.

Invesco also repaid $260 million of bank term loans and ended the quarter with no balance on its revolving credit line. It bought back 1.2 million shares for $25 million. Diluted and adjusted diluted EPS took a $0.08 hit due to a $35.9 million non‑cash impairment charge tied to the upcoming sale of Intelliflo, expected to close in Q4.

“We continue to perform well against our strategic priorities,” CEO Andrew Schlossberg said, stating Invesco reached record AUM and saw 8% annualized organic growth from net inflows.

He said the inflows were “broad” and came from multiple areas and regions. He also said Invesco strengthened its balance sheet during the quarter while continuing to return capital to shareholders.

Net flows grow across products and regions

Net long‑term inflows increased to $28.9 billion, up from $15.6 billion in the second quarter. Retail clients brought in $19.7 billion, and institutional clients added $9.2 billion.

Breakdown by investment type showed $21.4 billion flowing into ETFs and Index strategies, $8.1 billion into the China and India partnerships, $4.1 billion into

Fundamental Fixed Income, and $0.6 billion into Private Markets. There were outflows of $5.0 billion from Fundamental Equities and $0.3 billion from Multi‑Asset and Other products.

By region, Asia Pacific brought in $11.4 billion, Americas $9.6 billion, and EMEA $7.9 billion. Market gains added $99.0 billion to AUM, while foreign exchange effects reduced AUM by $2.7 billion.

There were $2.6 billion in inflows from non‑management fee products and $5.4 billion in outflows from money market funds. Average AUM rose 8.6% during the quarter.

Operating revenue rose $124.9 million from Q2. Investment management fees increased $83.8 million, and service and distribution fees rose $36.9 million, both driven by higher average AUM. Performance fees were $6.5 million, mainly from private market strategies. Foreign exchange movements increased revenue by $5.9 million.

Operating expenses increased $68.2 million. Distribution and advisory costs rose $57.6 million because of higher average AUM. Employee compensation increased $11.2 million, tied to higher variable compensation and staff expenses of $28.1 million, partially offset by prior quarter severance of $16.9 million. Marketing expenses fell $3.0 million.

Property, office, and technology costs fell $9.0 million due to an $8.0 million software impairment taken in the second quarter. General and administrative costs increased $12.1 million, reflecting expenses from newly launched consolidated investment products. Foreign exchange effects added $5.4 million to expenses.

Non‑operating results, tax shift, capital actions continue

Equity earnings from unconsolidated affiliates were $34.8 million, mainly from the China joint venture. Interest and dividend income totaled $10.5 million.

Interest expense was $25.7 million from bank term loans issued earlier in the year. Other net losses totaled $0.8 million, driven by the $35.9 million intelliflo impairment, partly offset by gains in deferred compensation and seed capital investment values.

CIP generated $57.0 million in other income from net interest income and market gains in underlying investments.

The effective tax rate for the quarter was (2.8%), down from 28.1% in Q2, due to the resolution of a tax matter and reduced deferred income tax rates.

Cash and cash equivalents were $973.1 million at quarter’s end. Total debt stood at $1.6 billion, down from $1.88 billion in Q2. There were 445.1 million common shares outstanding and 453.9 million diluted shares outstanding.

Invesco paid $95.0 million in common dividends and $44.4 million in preferred dividends. A $0.21 common cash dividend and $14.75 preferred dividend were declared for the next payout cycle.

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