Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The discussion and analysis disclosed herein apply to material changes in the Consolidated Financial Statements for 2025 and 2024. For the comparison of 2024 and 2023, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the company’s 2024 Annual Report on Form 10-K, filed with the SEC on February 25, 2025. The following discussion and analysis of the results of operations and financial condition of Invesco should be read in conjunction with the “Forward-looking Statements” disclosure set forth before Part I and the “Risk Factors” set forth in Item 1A of Part I of this Annual Report on Form 10‑K, each of which describe our risks, uncertainties and other important factors in more detail.
Executive Overview
The following executive overview summarizes the significant trends affecting our results of operations and financial condition for the periods presented. This overview and the remainder of this management's discussion and analysis and supplements should be read in conjunction with the Consolidated Financial Statements of Invesco Ltd. and the notes thereto contained elsewhere in this Annual Report on Form 10-K. The company’s financial results are impacted by the fluctuations in exchange rates against the U.S. Dollar, as discussed in the “Results of Operations” section as applicable.
The table below summarizes the year ended December 31 returns based on price appreciation/(depreciation) of several major market indices for 2025 and 2024:
Year ended December 31,
Equity Indices - Domestic
S&P 500 Equal-Weight
S&P 500 Growth
S&P 500 Value
NASDAQ 100
Equity Indices - Global
FTSE 100 (local currency)
MSCI AC Asia Pacific
MSCI China (local currency)
MSCI Emerging Markets
MSCI Europe (local currency)
MSCI Japan (local currency)
Fixed Income Indices
Bloomberg US Aggregate Bond
Bloomberg Global Aggregate Bond (local currency)
Bloomberg China Aggregate Bond
We continued to make progress on strengthening our capital management, simplifying and focusing our organization, investing in our key capabilities, and accelerating growth to position the company for greater scale, performance and improved profitability.
We are delivering on our commitment to deleverage and maintain a strong balance sheet. We repaid in full the $500.0 million three-year Term Loan Agreement entered into in the second quarter of 2025 and ended the year with cash and cash equivalents of $1.0 billion. Additionally, on January 15, 2026, we redeemed the $500.0 million of senior notes that matured on January 15, 2026. We believe the progress we have made to build financial flexibility has Invesco well-positioned to navigate various market conditions and deliver long-term growth. We remain committed to returning capital to shareholders longer term through a combination of share repurchases and modestly increasing dividends. During the year, the company repurchased 5.4 million common shares for $100.4 million in the open market, and we expect to continue common share repurchases on a regular basis going forward. Additionally, we repurchased $1.5 billion of Invesco’s outstanding Series A Preferred Stock during the year. We also amended and restated the $2.0 billion floating rate Revolving Credit Agreement, increasing the borrowing capacity to $2.5 billion and extending the expiration date to May 16, 2030.
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In addition to our previously announced broader strategic product and distribution partnership with Barings (MassMutual's global asset management subsidiary), we also announced a new strategic partnership with LGT Capital Partners during the fourth quarter. These partnerships aim to develop a suite of multi-alternative private markets solutions focused on the U.S. wealth and retirement channels.
On December 20, 2025, Invesco QQQ Trust converted from a unit investment trust (UIT) to an open-end fund ETF. The modernized QQQ ETF provides investors with a more beneficial way to access the companies of the Nasdaq-100 Index, including a reduced expense ratio and enhanced operational flexibility. This change also deepens the company's ability to generate new revenues and drive profitability.
During the fourth quarter, we completed the sale of the intelliflo business as part of our efforts to sharpen our strategic focus. We also completed the sale of 60% of our interest in Invesco Asset Management (India) Private Limited to IndusInd
International Holdings Limited to enhance the revenue generation of the business by combining our asset management expertise with their domestic distribution network.
On January 13, 2026, we announced that we entered into an agreement to sell our Canadian fund management agreements to CI Global Asset Management and form a long-term strategic partnership under which we will continue to provide portfolio management services through a sub-advisory arrangement to approximately 66 of the 104 Canadian mutual funds and ETFs with approximately $9 billion of AUM.
Presentation of Management's Discussion and Analysis of Financial Condition and Results of Operations - Impact of Consolidated Investment Products (CIP)
The company provides investment management services to, and has transactions with, investment products sponsored by the company in the normal course of business. The company's investment adviser subsidiaries serve as investment managers to these products, making day-to-day investment decisions concerning the assets of the products. The company is required to consolidate certain of these managed funds from time-to-time, as discussed more fully in Part II, Item 8, Financial Statements and Supplementary Data, Note 1, "Accounting Policies -- Basis of Accounting and Consolidation." Investment products that are consolidated are referred to in this Report as CIP. The company's economic risk with respect to each investment in CIP is limited to its equity ownership, unfunded equity commitments and any uncollected management and performance fees.
The majority of the company's CIP balances are CLO-related. The collateral assets of the CLOs are held solely to satisfy the obligations of the CLOs. The company has no right to the benefits from, nor does it bear the risks associated with, the collateral assets held by the CLOs beyond the company's direct investments in, and management and performance fees generated from, the CLOs. If the company were to liquidate, the collateral assets would not be available to the general creditors of the company, and as a result, the company does not consider these assets to be company assets. Likewise, the investors in the CLOs have no recourse to the general credit of the company for the notes issued by the CLOs. The company therefore does not consider this debt to be a company liability.
Due to the significant impact that CIP has on the presentation of the company’s Consolidated Financial Statements, the company has elected to deconsolidate these products in its non-GAAP disclosures (among other adjustments). See "Schedule of Non-GAAP Information" for additional information regarding these adjustments. The following discussion therefore combines the results presented under U.S. Generally Accepted Accounting Principles (U.S. GAAP) with the company’s non-GAAP presentation.
To assess the impact of CIP on the company's Results of Operations and Balance Sheet Discussion, refer to Part II, Item 8, Financial Statements and Supplementary Data, Note 18, "Consolidated Investment Products."
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Summary Operating Information
Wherever a non-GAAP measure is referenced, a disclosure will follow in the narrative or in the note referring the reader to the Schedule of Non-GAAP Information, where additional details regarding the use of the non-GAAP measure by the company are disclosed, along with reconciliations of the most directly comparable U.S. GAAP measures to the non-GAAP measures. To enhance the readability of the Results of Operations section, separate tables for each of the revenue, expense and other income and expenses sections of the income statement introduce the narrative that follows, providing a section-by-section review of the company’s income statements for the periods presented.
Summary operating information for 2025, 2024 and 2023 is presented in the table below.
(in millions, other than per common share amounts, operating margins and AUM)
Year ended December 31,
U.S. GAAP Financial Measures Summary
Operating revenues
Operating income/(loss)
Operating margin
Net income/(loss) attributable to Invesco Ltd.
Diluted earnings per share (EPS)
Non-GAAP Financial Measures Summary (1)
Net revenues
Adjusted operating income
Adjusted operating margin
Adjusted net income attributable to Invesco Ltd.
Adjusted diluted earnings per share (EPS)
Assets Under Management
Ending AUM (billions)
Average AUM (billions)
(1) Net revenues, Adjusted operating income (and by calculation, Adjusted operating margin), and Adjusted net income (and by calculation, Adjusted diluted EPS) are non-GAAP financial measures, based on methodologies other than U.S. GAAP. See “Schedule of Non-GAAP Information” for a reconciliation of the most directly comparable U.S. GAAP measures to the non-GAAP measures.
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Investment Capabilities Performance Overview
Among Invesco's strategic objectives is a commitment to deliver the excellence our clients expect, which includes strong investment performance over the long-term for our clients. The table below presents investment performance of our actively managed investment products measured by the percentage of our AUM in the first and second quartile compared to our peers and above benchmark for the investment capabilities for which peer and benchmark data are available. (1)
1 st Quartile
2 nd Quartile
Above Benchmark
Overall
Fundamental Equities
Fundamental Fixed Income
Multi-Asset
(1) Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, UITs, fund of funds with component funds managed by Invesco, stable value building block funds and collateralized debt obligations. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision.
AUM measured in the one, three and five year quartile rankings represents 35%, 34% and 33% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three and five year basis represents 44%, 43%, and 42% of total Invesco AUM as of 12/31/2025. Peer group rankings are sourced from a widely-used third-party ranking agency in each fund’s market (Morningstar, IA, Lipper, eVestment, Mercer, Galaxy, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties. Rankings are calculated against all funds in each peer group. Rankings for the primary share class of the most representative fund in each composite are applied to all products within each composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.
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Assets Under Management
Movements in global capital market levels, net inflows (or outflows), and changes in the mix of investment products between and within asset classes and geographies may materially affect our revenues from period to period.
The AUM tables and the discussion below refer to certain AUM as long-term. Long-term inflows and the underlying reasons for the movements in this line item include investments from new clients, existing clients adding new accounts/funds or contributions/subscriptions into existing accounts/funds. Long-term outflows reflect client redemptions from accounts/funds and include the return of invested capital upon maturity. We present net flows into money market funds separately because shareholders of those funds typically use them as short-term funding vehicles and the flows are particularly sensitive to short-term interest rate movements.
Changes in AUM were as follows:
(in billions)
Total AUM
Total AUM
Total AUM
Beginning Assets (January 1)
Long-term inflows
Long-term outflows
Net long-term flows (1)
Net flows in non-management fee earning AUM (1)
Net flows in money market funds
Total net flows
Reinvested distributions
Market gains and losses
Dispositions
Foreign currency translation
Ending Assets (December 31)
Average AUM
Average long-term AUM
Average AUM
Average QQQ AUM
Revenue yield (bps)
U.S. GAAP gross revenue yield (2)
Net revenue yield ex performance fees (3)
(1) Non-management fee earning flows include Invesco QQQ Trust’s flows prior to its restructuring from an UIT to an open-end fund ETF on December 20, 2025. Net long-term flows include Invesco QQQ Trust’s flows beginning on December 20, 2025.
(2) U.S. GAAP g ross revenue yield on AUM is equal to U.S. GAAP annualized total operating revenues divided by average AUM, excluding IGW A UM. The average AUM for IGW was $109.0 billion in 2025 (2024: $88.6 billion, 2023: $87.2 billion). It is appropriate to exclude the average AUM of IGW as the revenues resulting from these AUM are not pr esented in our U.S. GAAP operating revenues. Th e U.S. GAAP gross revenue yield is not a good measure b ecause the numerator excludes the management fees earned from CIP, although the denominator of the measure includes the AUM of these investment products. Net revenue yield metrics include the Net revenues and average AUM of IGW and CIP. See “Schedule of Non-GAAP Information” for a reconciliation of operating revenues to net revenues.
(3) Performance fees are earned when defined performance metrics are achieved. Therefore, net revenue yield is calculated excluding performance fees. Net revenue yield includes net revenues from Invesco QQQ Trust beginning on December 20, 2025.
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Flows
There are numerous drivers of AUM inflows and outflows, including individual investor decisions to change investment preferences, fiduciaries and other gatekeepers making broad asset allocation decisions on behalf of their clients, and reallocation of investments within portfolios. We are not a party to these asset allocation decisions, as the company does not generally have access to the underlying investors' decision-making process, including their risk appetite or liquidity needs. Therefore, the company is not in a position to provide meaningful information regarding the drivers of inflows and outflows.
Market Returns
Market gains and losses include the net change in AUM resulting from changes in market values of the underlying securities from period to period. The table in the “Executive Overview” section of this Management's Discussion and Analysis summarizes returns based on price appreciation/(depreciation) of several major market indices for the years ended December 31, 2025 and December 31, 2024.
Foreign Exchange Rates
During the year ended December 31, 2025, we experienced an increase in AUM of $17.0 billion due to changes in foreign exchange rates (December 31, 2024: AUM decreased $16.3 billion; December 31, 2023: AUM decreased $0.4 billion).
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Total AUM by Channel (1)
(in billions)
Total
Retail
Institutional
Total
Retail
Institutional
Total
Retail
Institutional
Beginning Assets (January 1)
Long-term inflows
Long-term outflows
Net long-term flows
Net flows in non-management fee earning AUM
Net flows in money market funds
Total net flows
Reinvested distributions
Market gains and losses
Transfers
Dispositions
Foreign currency translation
Ending Assets (December 31)
Total AUM by Client Domicile (2)
(in billions)
Total
Americas
APAC
EMEA
Total
Americas
APAC
EMEA
Total
Americas
APAC
EMEA
Beginning Assets (January 1)
Long-term inflows
Long-term outflows
Net long-term flows
Net flows in non-management fee earning AUM
Net flows in money market funds
Total net flows
Reinvested distributions
Market gains and losses
Transfer
Dispositions
Foreign currency translation
Ending Assets (December 31)
See accompanying notes immediately following these AUM tables.
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Total AUM by Investment Capability (3)
Twelve months ended December 31, 2025
(in billions)
Total
ETFs and Index (4)
Fundamental Fixed Income (5)
Fundamental Equities (6)
Private Markets (7)
China JV (8)
Multi-Asset/ Other (9)
Global Liquidity (10)
QQQ (11)
Beginning Assets (January 1)
Long-term inflows
Long-term outflows
Net long-term flows
Net flows in non-management fee earning AUM
Net flows in money market funds
Total net flows
Reinvested distributions
Market gains and losses
Dispositions
Foreign currency translation
Ending Assets (December 31)
Average AUM
Twelve months ended December 31, 2024
(in billions)
Total
ETFs and Index (4)
Fundamental Fixed Income (5)
Fundamental Equities (6)
Private Markets (7)
China JV (8)
Multi-Asset/ Other (9)
Global Liquidity (10)
QQQ (11)
Beginning Assets (January 1)
Long-term inflows
Long-term outflows
Net long-term flows
Net flows in non-management fee earning AUM
Net flows in money market funds
Total net flows
Reinvested distributions
Market gains and losses
Foreign currency translation
Ending Assets (December 31)
Average AUM
See accompanying notes immediately following these AUM tables.
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Twelve months ended December 31, 2023
(in billions)
Total
ETFs and Index (4)
Fundamental Fixed Income (5)
Fundamental Equities (6)
Private Markets (7)
China JV (8)
Multi-Asset/ Other (9)
Global Liquidity (10)
QQQ (11)
Beginning Assets (January 1)
Long-term inflows
Long-term outflows
Net long-term flows
Net flows in non-management fee earning AUM
Net flows in money market funds
Total net flows
Reinvested distributions
Market gains and losses
Dispositions
Foreign currency translation
Ending Assets (December 31)
Average AUM
See accompanying notes immediately following these AUM tables.
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Invesco Ltd.
Footnotes to the Assets Under Management Tables
(1) Channel refers to the internal distribution channel from which the AUM originated. Retail AUM represents AUM distributed by the company’s retail sales teams. Institutional AUM represents AUM distributed by our institutional sales teams. This aggregation is viewed as a proxy for presenting AUM in the retail and institutional markets in which the company operates.
(2) Client domicile groups AUM by the domicile of the underlying clients.
(3) Investment capabilities are descriptive groupings of AUM by investment strategy.
(4) ETFs and Index includes ETFs and Indexed Strategies and excludes Invesco QQQ Trust.
(5) Fundamental Fixed Income includes Fixed Income products, including certain ETFs managed within this capability.
(6) Fundamental Equities includes Equity products.
(7) Private Markets includes Private Credit and Real Estate investments comprised primarily of Real Estate, CLOs, Private Credit and listed real assets, including certain ETFs managed within this capability.
(8) China JV includes AUM managed by IGW. Comparative periods have been recast to align with the current period’s investment capability presentation.
(9) Multi-Asset/Other includes Global Asset Allocation, Invesco Quantitative Strategies, Global Targeted Returns, Solutions, UITs, including certain ETFs managed within this capability, and AUM managed by Invesco Asset Management (India) Private Limited until the October 31, 2025 sale. Comparative periods have been recast to align with the current period’s investment capability presentation.
(10) Global Liquidity is comprised mainly of Money Market funds.
(11) QQQ includes Invesco QQQ Trust.
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Results of Operations for the Year Ended December 31, 2025 compared to December 31, 2024
The discussion below includes the use of non-GAAP financial measures. See “Schedule of Non-GAAP Information” for additional details and reconciliations of the most directly comparable U.S. GAAP measures to the non-GAAP measures.
Operating Revenues and Net Revenues
The main categories of revenues, and the dollar and percentage change between the periods, are as follows:
Years ended December 31,
(in millions)
$ Change
% Change
$ Change
% Change
Investment management fees
Service and distribution fees
Performance fees
Other
Total operating revenues
Revenue Adjustments:
Investment management fees
Service and distribution fees
Other
Total Revenue Adjustments (1)
Invesco Great Wall
CIP
Net revenues (2)
(1) Total Revenue Adjustments remove pass through investment management fees, service and distribution fees, and other revenues and equal the same amount as the Third-party distribution, service and advisory expenses.
(2) See “Schedule of Non-GAAP Information” for additional important disclosures regarding the use of net revenues.
Our revenues are directly influenced by the level and composition of our AUM. Therefore, movements in global capital market levels, net inflows (or outflows), and changes in the mix of investment products betwe en and within asset classes and geographies may materially affect our revenues from period to period. See the company’s disclosures regarding the changes in AUM during the year ended December 31, 2025 and December 31, 2024 in the “Assets Under Management” section above for additional informati on. In addition, as fee rates differ across geographic locations, changes to the mix of AUM between geographies and exchange rates have an impact on operating revenues and net revenue yields.
Average AUM was $2,000.1 billion for the year ended December 31, 2025 as compared to $1,712.2 billion for the year ended December 31, 2024. As secular shifts in client demand continue, our broad set of investment capabilities have allowed us to capture evolving client product preferences, including products that have lower net revenue yields. As a result, net revenue yield excluding performance fees declined to 23.0 basis points (bps) for the year ended December 31, 2025 from 25.4 bps for the year ended December 31, 2024.
Investment Management Fees
Investment management fees were $4,615.3 million for the year ended December 31, 2025 as compared to $4,342.3 million for the year ended December 31, 2024. The impact of foreign exchange rate movements increased Investment management fees by $35.9 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. After allowing for foreign exchange movements, Investment management fees increased by $237.1 million as a result of higher average AUM. See discussion above on how AUM changes impact our Investment management fees.
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Service and Distribution Fees
For the year ended December 31, 2025, Service and distribution fees were $1,518.1 million as compared to $1,479.7 million for the year ended December 31, 2024. After allowing for foreign exchange movements, Service and distribution fees increased by $31.9 million due to higher distribution fees of $61.4 million resulting from higher average AUM, partially offset by lower fund-related service fees.
Performance Fees
For the years ended December 31, 2025, Performance fees were $41.5 million as compared to $46.4 million for the year ended December 31, 2024. Performance fees for the years ended December 31, 2025 and 2024 were primarily generated from multi-asset/other, private markets and fundamental equities products.
Other Revenues
For the year ended December 31, 2025, Other revenues were $202.2 million as compared to $198.6 million for the year ended December 31, 2024.
Invesco Great Wall
The company’s most significant joint venture is our investment in IGW. The company reflects 100% of IGW's results in its Net revenues and Adjusted operating expenses because it is important to evaluate the contribution that IGW is making to the business. The company’s non-GAAP operating results reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income attributable to Invesco Ltd. is reduced by the amount of earnings attributable to the noncontrolling interests. See “Schedule of Non-GAAP Information” for additional disclosures regarding the use of Net revenues.
Net revenues from IGW were $364.0 million and average AUM was $109.0 billion for the year ended December 31, 2025 (Net revenues were $318.1 million and average AUM was $88.6 billion, for the year ended December 31, 2024). The increase in IGW revenues was primarily due to higher average AUM partially offset by the shift in AUM toward lower yield products.
CIP
Management believes that the consolidation of investment products may impact a reader's analysis of our underlying results of operations and could result in investor confusion or the production of information about the company by analysts or external credit rating agencies that is not reflective of the underlying results of operations and financial condition of the company. Accordingly, management believes that it is appropriate to adjust operating revenues for the impact of CIP in calculating Net revenues. As Investment management and Performance fees earned by Invesco from the CIP are eliminated upon consolidation of the CIP, management believes that it is appropriate to add these Operating revenues back in the calculation of Net revenues. See “Schedule of Non-GAAP Information” for additional disclosures regarding the use of Net revenues.
Investment management and Performance fees earned from CIP were $44.5 million in the year ended December 31, 2025, as compared to $41.0 million for the year ended December 31, 2024.
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Operating Expenses
The main categories of operating expenses, and the dollar and percentage changes between periods, are as follows:
Years ended December 31,
(in millions)
$ Change
% Change
$ Change
% Change
Third-party distribution, service and advisory
Employee compensation
Marketing
Property, office and technology
General and administrative
Transaction, integration and restructuring (1)
Amortization and impairment of intangibles
Total operating expenses
The table below sets forth these expense categories as a percentage of total Operating expenses and Operating revenues, which we believe provides useful information as to the relative significance of each type of expense.
(in millions)
% of Total Operating Expenses
% of Total Operating Revenues
% of Total Operating Expenses
% of Total Operating Revenues
% of Total Operating Expenses
% of Total Operating Revenues
Third-party distribution, service and advisory
Employee compensation
Marketing
Property, office and technology
General and administrative
Transaction, integration and restructuring (1)
Amortization and impairment of intangibles
Total operating expenses
( 1) Transaction, integration and restructuring charges were primarily restructuring costs relating to our strategic evaluation which we completed in the first quarter of 2023.
Operating expenses increased $1,837.9 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024 and included a $1,794.9 million non-cash impairment of our indefinite-lived intangible assets related to prior acquisitions of management contracts of U.S. retail mutual funds. Excluding the intangible asset impairment, Operating expenses increased $43.0 million. The impact of foreign exchange rate movements increased operating expenses by $36.9 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
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Third-Party Distribution, Service and Advisory
Third-party distribution, service and advisory expenses include periodic “renewal” commissions which are paid to brokers and independent financial advisors for providing services to their client accounts while they are invested in an Invesco product. Renewal commissions are calculated based upon a percentage of the AUM value and apply to much of the company's non-U.S. retail operations. The revenues from the company’s U.S. retail operations include 12b-1 distribution fees, which are largely passed through to brokers who sell the funds as third-party distribution expenses along with additional marketing support distribution costs. Both the revenues and the costs are dependent on the underlying AUM of the brokers' clients. The upfront distribution commissions are amortized over the redemption period. Also included in Third-party distribution, service and advisory expenses are sub-transfer agency fees that are paid to third parties for processing client common share purchases and redemptions, call center support and client reporting. These costs are reimbursed by the related funds.
Third-party distribution, service and advisory expenses were $2,127.1 million for the year ended December 31, 2025 as compared to $2,025.6 million for the year ended December 31, 2024. The impact of foreign exchange rate movements increased third-party expenses by $13.8 million for the year ended December 31, 2025 as compared for the year ended December 31, 2024. After allowing for foreign exchange rate changes, the increase in expenses was $87.7 million primarily due to higher average AUM, partially offset by lower fund related costs. See "Schedule of Non-GAAP Information" for additional disclosures.
Employee Compensation
Employee compensation includes salary, cash bonuses and long-term incentive plans designed to attract and retain the highest caliber employees. Employee staff benefit plan costs and payroll taxes are also included in Employee compensation.
Employee compensation was $2,002.8 million for the year ended December 31, 2025 as compared to $2,014.2 million for the year ended December 31, 2024. The impact of foreign exchange rate movements increased Employee compensation by $13.6 million for the year ended December 31, 2025 as compared for the year ended December 31, 2024. After allowing for foreign exchange rate changes, there was a decrease in Employee compensation of $25.0 million. The decrease primarily resulted from a net decrease of $122.9 million in expense related to common share-based awards and other long-term awards (collectively, Long-Term Awards) due to changes to the retirement criteria for vesting adopted in the third quarter of 2024, partially offset by higher variable compensation costs of $51.4 million primarily driven by higher revenues. The decrease was also offset by higher benefits and payroll taxes of $22.0 million and $16.9 million of severance expense related to the reorganization of the fundamental equities investment teams.
Headcount at December 31, 2025 was 7,499 (December 31, 2024; 8,508). The decrease in headcount was primarily due to the sale of the intelliflo business and the sale of 60% of our interest in Invesco Asset Management (India) Private Limited that were completed in the fourth quarter of 2025.
Marketing
Marketing expenses include the cost of direct advertising of our products through trade publications, television and other media, and public relations costs, such as the marketing of the company's products through conferences or other sponsorships.
Marketing expenses were $84.0 million for the year ended December 31, 2025 as compared to $81.3 million for the year ended December 31, 2024.
Property, Office and Technology
Property, office and technology expenses include rent and utilities for our various leased facilities, depreciation of company-owned property, equipment and software, and other technology expenses including maintenance and licensing fees.
Property, office and technology expenses were $450.0 million for the year ended December 31, 2025 as compared to $474.3 million for the year ended December 31, 2024. The decrease was primarily due to lower property and technology costs, partially offset by an $8.0 million software impairment related to a strategic change to the company's fixed income investment platform in the second quarter of 2025.
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General and Administrative
General and administrative expenses include information service subscriptions, irrecoverable indirect taxes, employee travel, professional fees, recruitment and training costs as well as costs for outsourced services such as technology, middle office and back office management services.
General and administrative expenses were $576.5 million for the year ended December 31, 2025 as compared to $594.7 million for the year ended December 31, 2024. After allowing for foreign exchange rate changes, General and administrative expenses decreased by $25.1 million. The decrease was primarily due to a $52.5 million expense related to the settlement of certain regulatory matters in the year ended December 31, 2024, partially offset by higher costs of $22.6 million in the year ended December 31, 2025 related to newly launched CIP.
Amortization and impairment of intangible assets
Amortization and impairment of intangible assets was $1,832.4 million for the year ended December 31, 2025 as compared to $44.8 million for the year ended December 31, 2024. The increase was primarily due to a $1,794.9 million non-cash impairment of our indefinite-lived intangible assets related to management contracts of U.S. retail mutual funds.
Operating Income, Adjusted Operating Income, Operating Margin and Adjusted Operating Margin
Operating loss was $(695.7) million for the year ended December 31, 2025, as compared to an operating gain of $832.1 million for the year ended December 31, 2024. Operating margin (operating income divided by operating revenues) decreased to (10.9)% for the year ended December 31, 2025 from 13.7% in the year ended December 31, 2024 primarily as a result of the $1,794.9 million intangible asset impairment as discussed above.
Adjusted operating income increased to $1,557.8 million for the year ended December 31, 2025 from $1,370.7 million for the year ended December 31, 2024. Adjusted operating margin increased to 33.4% for the year ended December 31, 2025 from 31.1% for the year ended December 31, 2024. See “Schedule of Non-GAAP Information” for a reconciliation of Operating revenues to Net revenues, a reconciliation of Operating income to Adjusted operating income and additional important disclosures regarding Net revenues, Adjusted operating income and Adjusted operating margin.
Other Income and Expenses
The main categories of other income and expenses, and the dollar and percentage changes between periods are as follows:
Years ended December 31,
(in millions)
$ Change
% Change
$ Change
% Change
Equity in earnings of unconsolidated affiliates
Interest and dividend income
Interest expense
Other gains and losses, net
Other income/(expense) of CIP, net
Total other income and expenses
Equity in earnings of unconsolidated affiliates
Equity in earnings of unconsolidated affiliates increased to $104.8 million for the year ended December 31, 2025 as compared to $43.0 million for the year ended December 31, 2024. The increase was primarily driven by an increase in income of $28.9 million from our private markets real estate investments and $27.7 million from our joint venture investment in IGW.
Interest and dividend income
Interest and dividend income was $53.9 million for the year ended December 31, 2025 as compared to $58.9 million for the year ended December 31, 2024. The decrease was primarily due to a decrease in interest income earned from Cash and cash equivalents, partially offset by higher dividend income earned on our private markets investments.
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Interest expense
Interest expense was $82.5 million for the year ended December 31, 2025 as compared to $58.0 million for the year ended December 31, 2024. The year ended December 31, 2025 included interest expense related to the new Term Loan Agreements entered into on May 16, 2025.
Other gains and losses, net
Other gains and losses, net was a gain of $55.9 million for the year ended December 31, 2025 as compared to a net gain of $47.7 million for the year ended December 31, 2024. The net gains for the years ended December 31, 2025 and 2024 included net market gains on deferred compensation related investments and hedging instruments of $55.1 million and $39.7 million, respectively.
Other income/(expense) of CIP, net
Other income/(expense) of CIP, net includes interest and dividend income, interest expense, and realized and unrealized gains and losses on the underlying investments and debt owned by CIP. For the year ended December 31, 2025, net interest income of CIP was $116.3 million as compared to $139.5 million for the year ended December 31, 2024. The decrease in net interest income was primarily a result of a newly consolidated investment product in the year ended December 31, 2024 which was deconsolidated in the year ended December 31, 2025 as well as lower net interest income earned by the CLOs. For the year ended December 31, 2025, other gains and losses of CIP were a net gain of $67.9 million as compared to a net loss of $57.9 million for the year ended December 31, 2024. The net gain for the year ended December 31, 2025 was attributable to market-driven gains on investments held by consolidated funds. The net loss for the year ended December 31, 2024 was attributable to market-driven losses on investments held by consolidated funds.
Net impact of CIP and related noncontrolling interests in consolidated entities
The adjustment to Net income for the Net income/(loss) attributable to noncontrolling interests in consolidated entities removes the income/(expense) of CIP which is attributable to third-party investors. Therefore, the consolidation of investment products did not have an impact on Net income attributable to Invesco for the years ended December 31, 2025 and 2024. Also, the net income or loss of CIP is taxed at the investor level, not at the product level; therefore, a tax provision is not reflected in the net impact of CIP.
Income Tax Expense
The income tax provision was a benefit of $(204.6) million for the year ended December 31, 2025, compared to an expense of $252.9 million for the year ended December 31, 2024, resulting in effective tax rates of 53.9% and 25.2% for the years ended December 31, 2025 and 2024, respectively. The net benefit for the year ended December 31, 2025 was primarily due to the federal and state income tax benefit related to the loss before income taxes which was further increased by the favorable resolution of an income tax matter, including the impact of a decrease in the deferred income tax rate and the reversal of a reserve for uncertain tax positions, and the favorable impact of the net income attributable to non-controlling interests in consolidated entities and equity method investments in corporate joint ventures. For additional income tax information, please refer to Note 14, “Taxation,” in Part II, Item 8, Financial Statements and Supplementary Data.
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Schedule of Non-GAAP Information
We utilize the following non-GAAP performance measures: Net revenue (and by calculation, Net revenue yield on AUM), Adjusted operating income, Adjusted operating margin, Adjusted net income attributable to Invesco and Adjusted diluted EPS. The company believes the adjusted measures provide valuable insight into the company’s ongoing operational performance and assist in comparisons to its competitors. These measures also assist the company’s management with the establishment of operational budgets and forecasts. The most directly comparable U.S. GAAP measures are Operating revenues (and by calculation, Gross revenue yield on AUM), Operating income, Operating margin, Net income/(loss) attributable to Invesco and Diluted EPS. Each of these measures is discussed more fully below.
The following are reconciliations of the U.S. GAAP measures to the non-GAAP measures. The non-GAAP measures should not be considered as substitutes for any U.S. GAAP measures and may not be comparable to other similarly titled measures of other companies. Additional reconciling items may be added in the future to the non-GAAP measures if deemed appropriate. The tax effects related to the reconciling items have been calculated based on the tax rate attributable to the jurisdiction to which the transaction relates. Notes to the reconciliations follow the tables.
Reconciliation of Operating revenues to Net revenues:
(in millions)
Operating revenues, U.S. GAAP basis
Revenue adjustments: (1)
Investment management fees
Service and distribution fees
Other
Total revenue adjustments
Invesco Great Wall (2)
CIP (3)
Net revenues
Reconciliation of Operating income/(loss) to Adjusted operating income:
(in millions)
Operating income/(loss), U.S. GAAP basis
Invesco Great Wall (2)
CIP (3)
Transaction, integration and restructuring (4)
Amortization and impairment of intangible assets (5)
Compensation expense related to market valuation changes of deferred compensation
liabilities (6)
One-time acceleration of compensation expense for outstanding Long-Term Awards (7)
Severance (8)
Software impairment (9)
General and administrative (10)
Adjusted operating income
Operating margin (11)
Adjusted operating margin (12)
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Reconciliation of Net income/(loss) attributable to Invesco to Adjusted net income attributable to Invesco:
(in millions, except per common share data)
Net income/(loss) attributable to Invesco Ltd., U.S. GAAP basis
Adjustments (excluding tax):
Transaction, integration and restructuring (4)
Amortization and impairment of intangible assets (5)
Deferred compensation net market valuation changes (6)
One-time acceleration of compensation expense for outstanding Long-Term Awards (7)
Severance (8)
Software impairment (9)
General and administrative (10)
Total adjustments excluding tax
Impact of deferred income tax rate change (13)
Tax adjustment for amortization of intangible assets and goodwill (14)
Tax adjustment for impairment of intangible assets (15)
Other tax effects of adjustments above
Cost of preferred stock repurchase (16)
Adjusted net income attributable to Invesco Ltd.
Average common shares outstanding - diluted
Diluted EPS
Adjusted diluted EPS (17)
(1) Revenue adjustments: The company calculates Net revenues by reducing Operating revenues to exclude fees that are passed through to external parties who perform functions on behalf of, and distribute, the company’s managed funds. The Net revenue presentation assists in identifying the revenue contribution generated by the company, removing distortions caused by the differing distribution channel fees and allowing for a fair comparison with U.S. peer investment managers and within Invesco’s own investment units. Additionally, management evaluates Net revenue yield on AUM, which is equal to Net revenues divided by Average AUM during the reporting period, as an indicator of the Net revenues we receive for each dollar of AUM we manage.
Investment management fees are adjusted by renewal commissions and certain administrative fees. Service and distributions fees are primarily adjusted by distribution fees passed through to broker dealers for certain share classes and pass through fund-related costs. Other revenues are primarily adjusted by transaction fees passed through to third parties.
(2) Invesco Great Wall: The company reflects 100% of IGW in its Net revenues and Adjusted operating income (and by calculation, Adjusted operating margin ) . The company’s non-GAAP operating results reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income is reduced by the amount of earning attributable to the noncontrolling interests.
(3) CIP: See Item 8, Financial Statements and Supplementary Data, Note 18, “Consolidated Investment Products,” for a detailed analysis of the impact to the company’s Condensed Consolidated Financial Statements from the consolidation of CIP. The company believes that the CIP may impact a reader’s analysis of our underlying results of operations and could result in investor confusion or the production of information about the company by analysts or external credit rating agencies that is not reflective of the underlying results of operations and financial condition of the company. Accordingly, the company believes that it is appropriate to adjust Operating revenues and Operating income for the impact of CIP in calculating the respective Net revenues and Adjusted operating income (and by calculation, Adjusted operating margin).
(4) Transaction, integration and restructuring: The company believes it is useful to adjust for the Transaction, integration and restructuring charges in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS, as this will aid comparability of our results period to period, and aid comparability with peer companies that may not have similar acquisition and restructuring related charges. Transaction, integration and restructuring charges were primarily restructuring costs relating to our strategic evaluation which we completed in the first quarter of 2023.
(5) Amortization and impairment of intangible assets: The company removes amortization and non-cash impairment expense related to acquired assets in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income and Adjusted diluted EPS, as this will aid comparability of our results period to period, and aid comparability with peer companies that may not have similar acquisition-related charges.
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(6) Market valuation changes related to deferred compensation plan liabilities: Certain deferred compensation plan awards provide a return to the employee linked to the appreciation (depreciation) of specified investments. The company economically hedges the exposure to market movements on these deferred compensation liabilities. Since these liabilities are economically hedged, the company believes it is useful to remove the market movements related to the deferred compensation plan liabilities from the calculation of Adjusted operating income (and by calculation, Adjusted operating margin) and to remove the net impact of the economic hedge in arriving at Adjusted net income (and by calculation, Adjusted diluted EPS) to produce results that will be more comparable period to period.
(7) One-time acceleration of compensation expense for outstanding Long-Term Awards: In the third quarter of 2024, the company recorded a one-time acceleration of Compensation expense of $147.6 million resulting from changes to the retirement criteria for vesting of outstanding Long-Term Awards. Due to the non-recurring nature of this item, the company removed this expense in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS as this will aid comparability of our results period to period.
(8) Severance: In the second quarter of 2025, the company removed the severance expense related to the reorganization of its fundamental equities investment teams. The company removed this expense in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS, as this will aid comparability of our results period to period and aid comparability with peer companies that may not have similar reorganization related charges.
(9) Software impairment: In the second quarter of 2025, the company removed the non-cash software impairment related to a strategic change in our fixed income investment platform. The company removed the expense in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS as this will aid comparability of our results period to period.
(10) General and administrative: In 2024, the company removed the expense related to the settlement of regulatory matters. In 2023, the company removed insurance recoveries related to fund-related losses incurred in prior periods. Due to the non-recurring nature of these items, the company removed these expenses in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income and Adjusted diluted EPS as this will aid comparability of our results period to period.
(11) Operating margin is equal to Operating income divided by Operating revenues.
(12) Adjusted operating margin is equal to Adjusted operating income divided by Net revenues.
(13) Impact of deferred income tax rate change: In the third quarter of 2025, the company removed a non-cash income tax benefit of $39.0 million related to the revaluation of the deferred tax liabilities for indefinite-lived intangible assets as a result of a decrease in the tax rate. The company removed this discrete tax benefit in arriving at Adjusted net income and Adjusted diluted EPS as it does not have a cash flow impact and will aid comparability of our results period to period.
(14) Tax adjustment for amortization of intangible assets and goodwill: The company reflects the tax benefit realized on the tax amortization of goodwill and intangible assets in Adjusted net income. The company believes it is useful to include this tax benefit in arriving at Adjusted net income and Adjusted diluted EPS measure.
(15) Tax adjustment for impairment of intangible assets: The company removed the non-cash income tax benefit related to the impairment of our indefinite-lived intangible assets. The company removed this discrete tax benefit in arriving at Adjusted net income and Adjusted diluted EPS as it does not have a cash flow impact and will aid comparability of our results period to period.
(16) Cost of preferred stock repurchase: In 2025, the company repurchased $1.5 billion of the company’s outstanding Series A Preferred Stock held by MassMutual. The company removed the costs associated with the repurchase in arriving at Adjusted net income (and by calculation, Adjusted diluted EPS) as this will aid comparability of our results period to period and aid comparability with peer companies that may not have similar repurchase related charges.
(17) Adjusted diluted EPS is equal to Adjusted net income attributable to Invesco Ltd. divided by the weighted average number of common and restricted common shares outstanding.
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Balance Sheet Discussion (1)
The following table represents a reconciliation of the balance sheet information presented on a U.S. GAAP basis to the balance sheet information excluding the impact of CIP for the reasons outlined in footnote 1 to the table:
December 31, 2025
December 31, 2024
Balance sheet information
(in millions)
U.S. GAAP
Impact of CIP
Excluding CIP
U.S. GAAP
Impact of CIP
Excluding CIP
ASSETS
Cash and cash equivalents
Investments
Goodwill and intangible assets, net
Other assets (2)
Investments and other assets of CIP (3)
Total assets
LIABILITIES
Debt
Other liabilities (4)
Debt and other liabilities of CIP
Total liabilities
EQUITY
Total equity attributable to Invesco Ltd.
Noncontrolling interests (5)
Total equity
Total liabilities and equity
(1) This table includes non-GAAP presentations. Assets of CIP are not available for use by Invesco. Additionally, there is no recourse to Invesco for CIP debt.
(2) Amounts include Accounts receivable, Property, equipment and software, and Other assets.
(3) Amounts also include Cash and cash equivalents, Accounts receivable, and Other assets of CIP.
(4) Amounts include Accrued compensation and benefits, Accounts payable and accrued expenses, and Deferred tax liabilities.
(5) Amounts include Redeemable noncontrolling interests in consolidated entities and Equity attributable to nonredeemable noncontrolling interests in consolidated entities.
Cash and cash equivalents
Cash and cash equivalents increased $51.0 million from $986.5 million at December 31, 2024 to $1,037.5 million at December 31, 2025. See “ Cash Flows Discussion” below within this Management's Discussion and Analysis for additional discussion regarding the movements in cash flows during the periods. See Item 8, Financial Statements and Supplementary Data - Note 1, “Accounting Policies - Cash and Cash Equivalents,” regarding capital adequacy requirements in certain jurisdictions.
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Investments
Investments are comprised primarily of the equity method investment in IGW, seed capital and co-investments in affiliated funds, and investments related to the company’s deferred compensation plans.
As of December 31, 2025 and December 31, 2024, the company had $1,166.3 million and $1,125.6 million in seed capital and co-investments, respectively, including direct investments in CIP. The following table reconciles the Investment balance to the total seed capital and co-investment balance.
(in millions)
December 31, 2025
December 31, 2024
Investments
Net investment in CIP
Less: Investments related to deferred compensation plans, joint ventures, and other investments
Total seed capital and co-investments (1)
(1) Included in the total seed and co-investment balance as of December 31, 2025 is $477.8 million of seed capital and $688.5 million of co-investments (December 31, 2024: $414.0 million of seed capital and $711.6 million of co-investments).
Goodwill and intangible assets, net
Goodwill and intangible assets, net decreased to $12,404.4 million at December 31, 2025 from $14,067.4 million at December 31, 2024. The decrease was due to a $1,794.9 million non-cash impairment of our indefinite-lived intangible assets related to prior acquisitions of management contracts of U.S. retail mutual funds, $71.6 million impact from the sale of the intelliflo business and the sale of 60% of our interest in Invesco Asset Management (India) Private Limited, and amortization expense of $37.5 million, partially offset by foreign exchange impacts of $241.0 million. See "Critical Accounting Policies and Estimates” and Item 8, Financial Statements and Supplementary Data - Note 1, “Accounting Policies,” for additional information.
Liquidity and Capital Resources
Our capital structure, together with available cash balances, cash flows generated from operations, existing capacity under our Revolving Credit Agreement and further capital market activities, if necessary, should provide us with sufficient resources to meet present and future cash needs, including operating expenses, debt and other obligations as they come due and anticipated future capital requirements.
Sources of Liquidity by Type
(in millions)
December 31, 2025
December 31, 2024
Cash and cash equivalents
Available Revolving Credit Agreement
Total sources of liquidity by type
The Revolving Credit Agreement was amended and restated on May 16, 2025 increasing borrowing capacity from $2.0 billion to $2.5 billion and extending the expiration date from April 26, 2028 to May 16, 2030. As of December 31, 2025, the balance on the $2.5 billion Revolving Credit Agreement was $437.7 million.
During 2025, the company repaid in full the $500.0 million three-year Term Loan Agreement entered into on May 16, 2025.
In the ordinary course of business, Invesco enters into contracts or purchase obligations with third parties whereby the third parties provide services to or on behalf of Invesco. Purchase obligations represent fixed-price contracts, which are either non-cancelable or cancellable with a penalty. As of December 31, 2025, the company's purchase obligations totaled $1,015.2 million (December 31, 2024: $694.4 million) and primarily reflect standard service contracts for portfolio, market data, office-related services, and third-party marketing and promotional services. Purchase obligations are recorded as liabilities in the company's Consolidated Financial Statements when services are provided.
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Capital Management
Our capital management priorities have evolved with the growth and success of our business and include, in no particular order of priority: reinvestment in the business, maintaining a strong balance sheet and returning capital to shareholders longer term through a combination of share repurchases and modestly increasing dividends.
During the year ended December 31, 2025, the company repurchased 5.4 million common shares for $100.4 million in the open market. As of December 31, 2025, approximately $232.2 million remained authorized under the company’s common share repurchase authorization approved by the Board on July 22, 2016. Additionally, the company repurchased $1.5 billion of the outstanding Series A Preferred Stock held by MassMutual, reducing the outstanding balance of the Series A Preferred Stock to $2.5 billion.
Our capital process is executed in a manner consistent with our desire to maintain strong, investment grade credit ratings. As of the date of our filing, Invesco held credit ratings of BBB+/Stable, A3/Stable and A/Stable from S&P Ratings Service, Moody’s Investor Services and Fitch Ratings, respectively.
Other Items
Certain of our subsidiaries are required to maintain minimum levels of regulatory capital, liquidity, and working capital. Such requirements may change from time-to-time as additional guidance is released based on a variety of factors, including balance sheet composition, assessment of risk exposures and governance, and review from regulators. These and other similar provisions of applicable laws and regulations may have the effect of limiting withdrawals of capital, repayment of intercompany loans and payment of dividends by such entities. Our financial condition or liquidity could be adversely affected if certain of our subsidiaries are unable to distribute funds to us.
We are in compliance with all regulatory minimum net capital requirements. As of December 31, 2025, the company's minimum regulatory capital requirement was $309.9 million (December 31, 2024: $324.9 million).
We meet the regulatory liquidity and working capital requirements by holding cash and cash equivalents in the European sub-group. This retained cash can be used for general business purposes in the European sub-group in the countries where it is located. Due to the liquidity and working capital requirements, the ability to transfer cash between certain jurisdictions may be limited. In addition, transfers of cash between international jurisdictions may have adverse tax consequences.
The consolidation of $10,149.8 million and $8,967.6 million of Investments and other assets and Debt and other liabilities of CIP, respectively, as of December 31, 2025, did not impact the company’s liquidity and capital resources. See Item 8, Financial Statements and Supplementary Data - Note 18, “Consolidated Investment Products,” for additional details.
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Cash Flows Discussion
The following table represents a reconciliation of the cash flow information presented on a U.S. GAAP basis to the cash flow information, excluding the impact of the cash flows of CIP for the reasons outlined in footnote 1 to the table:
Years ended December 31,
Cash flows information (1)
(in millions)
U.S. GAAP
Impact of CIP
Excluding CIP
U.S. GAAP
Impact of CIP
Excluding CIP
U.S. GAAP
Impact of CIP
Excluding CIP
Cash and cash equivalents, beginning of the period
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Increase/(decrease) in cash and cash equivalents
Foreign exchange movement on cash and cash equivalents
Cash and cash equivalents, end of the period
Cash and cash equivalents
Cash and cash equivalents of CIP
Total cash and cash equivalents per consolidated statement of cash flows
(1) These tables include non-GAAP presentations. Cash held by CIP is not available for use by Invesco. Additionally, there is no recourse to Invesco for CIP debt. The cash flows of CIP do not form part of the company’s cash flow management processes, nor do they form part of the company’s liquidity evaluations and decisions.
Operating Activities
Operating cash flows include the receipt of Investment management and other fees generated from AUM, offset by Operating expenses and changes in operating assets and liabilities. After allowing for the change in cash held by CIP, investment activities, non-cash activity, and seasonal payments, such as bonus payments in the first quarter, our operating cash flows generally move in the same direction as our Operating income/(loss).
Cash inflows for the year ended December 31, 2025, excluding the impact of CIP, were primarily driven by operating income and changes in receivables, other assets, payables, and accrued liabilities due to the timing of receipts and payments.
Investing Activities
Cash outflows for the year ended December 31, 2025, excluding the impact of CIP, includes purchases of investments of $147.9 million (year ended December 31, 2024: $307.0 million) and property, equipment and software of $84.3 million (year ended December 31, 2024: $69.1 million), partially offset by proceeds of $156.0 million from capital distributions from equity method investees (year ended December 31, 2024: $135.9 million). Cash outflows were also partially offset by proceeds of $236.5 million from the sale of the intelliflo business and the sale of 60% of our interest in Invesco Asset Management (India) Private Limited.
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Financing Activities
Financing cash outflows during the year ended December 31, 2025 included cash outflows of $1.5 billion to repurchase the company’s Series A Preferred Stock and net cash inflows of $992.7 million related to the Term Loan Agreements entered into in the second quarter of 2025 to fund the repurchase. Financing cash outflows also included $500.0 million for the repayment of the three-year Term Loan Agreement entered into in the second quarter of 2025, $240.0 million for the premium paid on the repurchase of Series A Preferred Stock, $377.3 million of common dividend payments for dividends declared in January, April, July and October 2025 (year ended December 31, 2024: common dividends paid of $371.5 million), $204.6 million of preferred dividend payments for dividends declared in January, April, July and October 2025 (year ended December 31, 2024: $236.8 million), $100.0 million for the repurchase of common shares through the open market (year ended December 31, 2024: $49.6 million), and the payment of $23.6 million to meet employees' withholding tax obligations on common share vestings (2024: $29.7 million). Financing cash inflows included net borrowings under the Revolving Credit Agreement of $437.7 million during the year ended December 31, 2025 (year ended December 31, 2024: zero). Financing cash outflows during the year ended December 31, 2024 also included a $600.0 million redemption of senior notes.
Dividends
When declared, Invesco pays dividends on a quarterly basis in arrears. Holders of our preferred shares are eligible to receive dividends at an annual rate of 5.9% of the liquidation preference of $1,000 per share, or $59 per share per annum. The preferred stock dividend is payable quarterly on a non-cumulative basis when, if and as declared by our Board. However, if we have not declared and paid or set aside for payment full quarterly dividends on the preferred stock for a particular dividend period, we may not declare or pay dividends on, redeem, purchase or acquire our common stock or other junior securities in the next succeeding dividend period. In addition, if we have not declared and paid or set aside for payment quarterly dividends on the preferred stock for six quarterly periods, whether or not consecutive, the number of directors of the company will be increased by two and the holders of the preferred shares shall have the right to elect such two additional members of the Board.
On January 26, 2026, the company declared a fourth quarter 2025 cash dividend of $0.21 per common share to the holders of common shares. The dividend is payable on March 3, 2026, to common shareholders of record at the close of business on February 13, 2026, with an ex-dividend date of February 13, 2026.
On January 26, 2026, the company declared a preferred dividend of $14.75 per preferred share representing the period from December 1, 2025 through February 28, 2026. The preferred dividend is payable on March 2, 2026.
The declaration, payment and amount of any future dividends will depend upon, among other factors, our earnings, financial condition and capital requirements at the time such declaration and payment are considered. The company has a policy of managing dividends in a prudent fashion, with due consideration given to profit levels, overall debt levels and historical dividend payouts.
Common Share Repurchase Plan
During 2025, the company repurchased 5.4 million shares for $100.4 million in the open market as compared to 2.9 million shares for $49.6 million during 2024. At December 31, 2025, approximately $232.2 million remained authorized under the company's common share repurchase authorization approved by the Board on July 22, 2016 (December 31, 2024: $332.6 million).
Preferred Stock Repurchase
During 2025, the company repurchased $1.5 billion of the $4.0 billion outstanding Series A Preferred Stock held by MassMutual for $1.74 billion.
Debt
The carrying value of our debt at December 31, 2025 was $1,825.1 million (December 31, 2024: $890.6 million), See Item 8, Financial Statements and Supplementary Data, Note 8, “Debt,” for additional disclosures.
For the year ended December 31, 2025, the company's weighted average cost of debt was 4.81% (year ended December 31, 2024: 4.64%).
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Financial covenants under the Revolving Credit Agreement and Term Loan Agreements (collectively, Credit Agreements) include: (i) the quarterly maintenance of an Adjusted debt/Earnings before income tax, depreciation, amortization, interest expense, common share-based compensation expense, unrealized (gains)/losses from investments, net, and unusual or otherwise non-recurring gains and losses (Covenant Adjusted EBITDA) leverage ratio, as defined in the Credit Agreements, of not greater than 3.25:1.00, and (ii) an interest coverage ratio (Covenant Adjusted EBITDA, as defined in the Credit Agreements, divided by interest expense for the four consecutive fiscal quarters ended on or immediately prior to the date of determination) of not less than 4.00:1.00. As of December 31, 2025, we were in compliance with our financial covenants. At December 31, 2025, our leverage ratio was 0.73:1.00 (December 31, 2024: 0.25:1.00), and our interest coverage ratio was 20.34:1.00 (December 31, 2024: 26.84:1.00).
The December 31, 2025 and 2024 coverage ratio calculations are as follows:
(in millions)
December 31, 2025
December 31, 2024
Net income/(loss) attributable to Invesco Ltd.
Dividends on preferred shares
Interest expense
Tax expense/(benefit)
Amortization/depreciation/impairment (1)
Common share-based compensation expense
One-time acceleration of compensation expense for outstanding Long-Term Awards (2)
Severance (2)
Regulatory matters (2)
Cost of preferred stock repurchase (2)
Unrealized (gains)/losses from investments, net (3)
Covenant Adjusted EBITDA (4)
Adjusted debt (4)
Leverage ratio (Adjusted debt/Covenant Adjusted EBITDA - maximum 3.25:1.00)
Interest coverage (Covenant Adjusted EBITDA/Interest expense - minimum 4.00:1.00)
(1) Includes the 2025 $1,794.9 million non-cash impairment of our indefinite-lived intangible assets and the impairment of software implementation costs.
(2) Unusual or otherwise non-recurring gains and losses, as defined in our C redit Agreements, are adjusted for in the determination of Covenant Adjusted EBITDA. Severance expense related to the reorganization of the company’s fundamental equities investment teams and costs associated with the repurchase of the company’s outstanding Series A Preferred Stock in 2025 were non-recurring expenses and have been removed from Covenant Adjusted EBITDA. Adjustments to Covenant Adjusted EBITDA in 2024 included the one-time acceleration of expense related to changes to the criteria for retirements for Long-Term Awards and the settlement of regulatory matters.
(3) Adjustments for unrealized gains and losses from investments, as defined in our Credit Agreements, may also include non-cash gains and losses on investments to the extent that they do not represent anticipated future cash receipts or expenditures.
(4) Covenant Adjusted EBITDA and Adjusted debt are non-GAAP financial measures that are used by management in connection with certain debt covenant calculations under our Credit Agreements. The calculation of Covenant Adjusted EBITDA above (a reconciliation from Net income attributable to Invesco Ltd.) is defined by our Credit Agreements, and therefore Net income attributable to Invesco Ltd. is the most appropriate GAAP measure from which to reconcile to Covenant Adjusted EBITDA. The calculation of 2025 Adjusted debt is defined in our Credit Agreements and equals debt of $1,825.1 million plus $3.6 million in letters of credit less $600.0 million of excess unrestricted cash (cash and cash equivalents less the minimum regulatory capital requirement, not to exceed $600 million (2024: $500.0 million).
On January 15, 2026, Invesco Finance PLC, a wholly-owned indirect subsidiary of the Parent, paid in full the outstanding balance of the $500.0 million senior notes which matured on January 15, 2026. The redemption was primarily funded by the Revolving Credit Agreement which had an outstanding balance of $790.0 million on January 31, 2026.
The discussion that follows identifies risks associated with the company's liquidity and capital resources. The Item 1. Business - Risk Management section contains a broader discussion of the company's overall approach to risk management.
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Credit and Liquidity Risk
The company manages its capital by reviewing annual and projected cash flow forecasts and by monitoring credit, liquidity and market risks, such as interest rate and foreign currency risks (as discussed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk”).
Credit Risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to meet an obligation. The company is primarily exposed to credit risk through its cash and cash equivalent deposits, which are held by external firms. The company invests its cash balances in its own institutional money market products, as well as with external high credit-quality financial institutions. These arrangements create exposure to concentrations of credit risk. As of December 31, 2025, our maximum exposure to credit risk related to our Cash and cash equivalent balance is $1,037.5 million, of which $477.9 million is invested in affiliated money market funds. See Item 8, Financial Statements and Supplementary Data - Note 2, "Fair Value of Assets and Liabilities" for information regarding Cash and cash equivalents invested in affiliated money market funds.
Liquidity Risk
Liquidity risk is the risk that the company will encounter difficulty in meeting obligations associated with its financial liabilities as the same become due. The company is exposed to liquidity risk through its $1,825.1 million in total debt. The company actively manages liquidity risk by preparing cash flow forecasts for future periods, reviewing them regularly with senior management, maintaining a committed Revolving Credit Agreement, scheduling significant gaps between major debt maturities and engaging external financing sources in regular dialogue.
Effects of Inflation
Inflation can impact our organization primarily in two ways. First, inflationary pressures can result in increases in our cost structure, especially to the extent that large expense components such as compensation are impacted. To the degree that these expense increases are not recoverable or cannot be counterbalanced through pricing increases due to the competitive environment, our net income could be negatively impacted. Secondly, the value of the assets that we manage may be negatively impacted when inflationary expectations result in a rising interest rate environment. A decline in the value of AUM could lead to reduced revenues as management fees are generally calculated based upon the value of AUM.
Off Balance Sheet Commitments
See Item 8, Financial Statements and Supplementary Data - Note 17, “Commitments and Contingencies,” for more information regarding undrawn capital commitments.
Critical Accounting Policies and Estimates
Our significant accounting policies are disclosed in Part II, Item 8, Financial Statements and Supplementary Data - Note 1, “Accounting Policies." Critical accounting policies and estimates are those that require complex management judgment regarding matters that are highly uncertain at the time policies were applied and estimates were made. Different estimates reasonably could have been used in the current period that would have had a material effect on these Consolidated Financial Statements, and changes in these estimates are likely to occur from period-to-period in the future. The discussion below provides information on the significant judgments and assumptions applied in each area and should be read in conjunction with the significant accounting policies footnote previously referenced.
Intangible Assets
Management has the option to first assess indefinite-lived intangible assets for qualitative factors to determine whether it is necessary to perform a quantitative impairment test. Definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable (i.e., the carrying amount exceeds the fair value of the intangible asset). In addition, management's judgment is required to estimate the period over which definite-lived intangible assets will contribute to the company's cash flows and the pattern in which these assets will be consumed. A change in the remaining useful life of any of these assets, or the reclassification of an indefinite-lived intangible asset to a definite-lived intangible asset, could have a significant impact on the company's amortization expense.
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Intangible assets not subject to amortization are tested for impairment annually as of October 1 or more frequently if events or changes in circumstances indicate that the asset might be impaired. If a quantitative assessment is required, the impairment test consists of a comparison of the fair value of an intangible asset to its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Management used an income approach to value indefinite-lived intangible assets related to acquired management contracts of U.S. retail mutual funds. An income approach includes assumptions for current market conditions, including the asset’s updated forecasts of AUM to take into consideration market gains or losses, net long-term flows and the corresponding changes in revenue and expenses. The most sensitive assumptions used in the income approach are the revenue forecast, the long-term growth rate and the discount rate applied to the cash flow forecast to determine present value. The revenue forecast for the U.S. retail mutual funds incorporated market conditions, management judgment and other economic indicators, as well as industry growth projections. The revenue projections used reflect declines ranging from 3% to 9% over the forecast period. Taking into consideration the AUM mix, the long-term growth rate was determined using the historical returns of the S&P 500 index, treasury bonds and treasury bills. The long-term growth rate used by management in the annual impairment test was 2.0% which decreased from the long-term growth rate used in the prior year of 2.5% due to sustained net long-term outflows of AUM related to U.S. retail mutual funds. The discount rate is an estimate of the weighted average cost of capital for the investment management sector reflecting the overall industry risks associated with future cash flows and considers an applicable size premium for the intangible asset. The discount rate used by management was 13.0%, which increased 12 bps from the prior year primarily due to an increase in the risk-free rate. We continued to factor an asset-specific risk premium into the discount rate to account for the uncertainty around future AUM flows given the continued shift in investor preferences away from actively managed funds. We assessed the reasonableness of the estimated fair value of the intangible assets by considering applicable market data.
Based on our annual impairment analysis as of October 1, 2025, we determined that the carrying value of the indefinite-lived intangible assets related to acquired management contracts of U.S. retail mutual funds of $4,571.7 million exceeded the estimated fair value. As such, a $1,794.9 million impairment was recorded in Amortization and impairment of intangibles expense in the Consolidated Statements of Income which reduced the carrying value to $2,776.8 million. The impairment was driven by a decrease in the long-term growth rate and lower projected earnings as a result of lower revenues for these management contracts. While the company believes all assumptions utilized in our assessment are reasonable and appropriate, changes in these estimates could produce different fair value amounts which could drive impairment in future periods. For example, assuming all other assumptions remain static, a decrease to the revenue forecast of 2% would result in an incremental impairment of $56 million. A decrease to the long-term growth rate of 25 bps would result in an incremental impairment of $46 million. Also, an increase to the discount rate of 15 bps would result in an incremental impairment of $36 million. The impairment does not impact the company’s liquidity or capital resources.
Our annual impairment reviews of our other indefinite-lived intangible assets determined that there was not an impairment of these intangibles. The classifications of indefinite-lived and definite-lived intangible assets remain appropriate, and no changes to the expected lives of definite-lived intangible assets were required.
Goodwill
Management has the option to first assess goodwill for qualitative factors to determine whether it is necessary to perform a quantitative impairment test. For our annual impairment tests in 2025 and 2024, management performed the optional qualitative approach which indicated that a quantitative assessment of the goodwill impairment test was not necessary. The qualitative impairment analysis indicated that it is more likely than not that the estimated fair value of the reporting unit was greater than the carrying value.
The company cannot predict the occurrence of future events that might adversely affect the reported value of goodwill of $8,477.1 million at December 31, 2025. Such events include, but are not limited to, strategic decisions made in response to economic and competitive conditions or a significant and prolonged decline in our revenue and operating income or a sustained decrease in our stock price. However, an impairment in the future would not impact the company’s liquidity or capital resources.
Income Taxes
The company files U.S. federal, state and numerous foreign income tax returns. The income tax laws are complex and subject to different interpretations by the taxpayer and the relevant taxing authorities. Significant judgment is required in the determination of our annual income tax provision, which includes the assessment of deferred tax assets and uncertain tax positions, as well as the interpretation and application of existing and newly enacted tax laws, regulation changes and new judicial rulings. Therefore, it is possible that actual results will vary from those recognized in our Consolidated Financial Statements due to changes in the interpretation of applicable guidance or as a result of examinations by taxing authorities.
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Deferred tax assets, net of any associated valuation allowance, have been recognized based on management's belief that taxable income of the appropriate character, more likely than not, will be sufficient to realize the benefits of these assets over time. In the event that actual results differ from our expectations, or if our historical trends of positive operating income changes, we may be required to record a valuation allowance on some or all of these deferred tax assets, which may have a significant effect on our financial condition and results of operations. In assessing whether a valuation allowance should be established against a deferred income tax asset, the company considers all available evidence, which includes the nature, frequency and severity of recent losses, forecasts of future profitability and the duration of statutory carry back and carry forward periods, among other factors.
In the assessment of uncertain tax positions, significant judgment is required to estimate the range of possible outcomes and determine the probability, on a more likely than not basis, of favorable or unfavorable outcomes upon ultimate settlement of an issue. Changes in the estimate of uncertain tax positions occur periodically due to changes in interpretations of tax laws, the status of examinations by tax authorities and new regulatory or judicial guidance that could impact the relative merits and risk of tax positions. These changes, when they occur, impact tax expense and can materially impact results of operations. The company recognizes any interest and penalties related to unrecognized tax benefits (UTBs) on the Consolidated Statements of Income as components of income tax expense.
CIP
The company consolidates certain investment products in which it has a controlling financial interest, either through a majority voting interest or as the primary beneficiary of a variable interest entity (VIE). Assessing if an entity is a VIE or voting interest entity (VOE) involves judgment and analysis on a structure-by-structure basis. Factors assessed as part of the analysis include the legal organization of the entity, the company's contractual involvement with the entity and any related party or de facto agent implications of the company's involvement with the entity. If the entity qualifies as a VIE and the company is deemed to have the power to direct the activities of the fund that most significantly impact the fund's economic performance and the obligation to absorb losses/right to receive benefits from the fund that could potentially be significant to the fund, then the company is deemed to be the fund's primary beneficiary and is required to consolidate the fund. Assessing if the company has the power to direct the activities that most significantly impact the fund’s economic results may involve significant judgment.
Recent Accounting Standards
See Item 8, Financial Statements and Supplementary Data - Note 1, “Accounting Policies - Accounting Pronouncements Recently Adopted and Pending Accounting Pronouncements.”
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