A month has gone by since the last earnings report for Invesco (IVZ). Shares have added about 7.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Invesco due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Invesco Ltd. before we dive into how investors and analysts have reacted as of late.
Invesco’s Q1 Earnings Miss Despite Higher AUM & Revenues
Invesco’s first-quarter 2026 adjusted earnings of 57 cents per share lagged the Zacks Consensus Estimate by a penny. The bottom line increased 29.5% from the prior-year quarter.
The results primarily benefited from an increase in adjusted revenues and growth in AUM balance. However, an increase in adjusted expenses was a headwind.
Net income attributable to common shareholders (GAAP basis) was $230.4 million or 51 cents per share, up from $171.1 million or 38 cents per share in the year-ago quarter.
Adjusted Revenues Improve, Adjusted Expenses Rise
Adjusted net revenues in the quarter were $1.26 billion, up 14% year over year. The top line marginally missed the Zacks Consensus Estimate of $1.27 billion. The rise in revenues was driven by higher average AUM, favorable foreign exchange rate changes and revenues earned from Invesco QQQ Trust following its conversion.
Adjusted operating expenses were $828.3 million, up 9.1% year over year.
The adjusted operating margin was 34.5%, up from 31.5% a year ago.
AUM Balance Increases
As of March 31, 2026, AUM was a record $2.16 trillion, up 17.1% year over year. The average AUM at the end of the first quarter totaled $2.22 trillion, up 18%.
Client demand remained supportive across IVZ’s multiple investment capabilities. Net long-term inflows were led by ETFs and Index products ($18.6 billion) and the China joint venture ($8.7 billion), with additional contributions from Fundamental Fixed Income ($3.7 billion) and Multi-Asset/Other strategies ($3.6 billion). Private Markets also generated positive net inflows of $0.4 billion.
Those positives were partially offset by outflows tied to factor and product rotations. QQQ recorded net long-term outflows of $10.8 billion in the quarter, while Fundamental Equities saw net outflows of $2.4 billion.
By geography, Asia Pacific and EMEA produced net long-term inflows of $13.2 billion and $7.6 billion, respectively, while the Americas added $1.0 billion.
Decent Balance Sheet
As of March 31, 2026, cash and cash equivalents were $806.9 million compared with $1.04 billion as of Dec. 31, 2025.
The long-term debt was $1.97 billion. The redemption of $500 million of senior notes that matured in mid-January 2026 raised the credit facility balance to $1.1 billion.
Capital Distribution Updates
In the reported quarter, Invesco repurchased 1.6 million shares for $40 million.
In February, the board authorized an additional $1.0 billion common share repurchase plan with no expiration date. This reinforces management’s emphasis on ongoing capital return alongside balance sheet management.
Outlook
Management expects one-time implementation costs of the Alpha investment platform to be $10-$15 million per quarter, trending toward higher end as implementation progresses, with completion targeted by the end of 2026. Further, as more AUM transitions onto the platform during 2026, the incremental expense associated with AUM on the system is expected to build through the year, reaching approximately $10 million per quarter later in the year. Hence, the combined costs related to the hybrid platform are expected to be $20 million to $25 million higher in 2026 than in 2025.
Beginning in the third quarter of 2026, operating income is expected to be negatively impacted initially by the Canada fund deal, including an operating expense reduction of $5 million to $10 million per quarter (i.e., a cost benefit that partially offsets other headwinds). Over time, the operating expense benefit is expected to move closer to about $10 million per quarter.
Further, for 2026, the company expects $3.275 billion in operating expenses.
Non-GAAP effective tax rate is expected to be in the range of 25-26% for the second quarter of 2026.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Invesco has a nice Growth Score of B, a score with the same score on the momentum front. Following the exact same course, the stock has a score of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Invesco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Invesco belongs to the Zacks Financial - Investment Management industry. Another stock from the same industry, Cohen & Steers Inc (CNS), has gained 4.7% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.
Cohen & Steers reported revenues of $145.64 million in the last reported quarter, representing a year-over-year change of +8.3%. EPS of $0.79 for the same period compares with $0.75 a year ago.
For the current quarter, Cohen & Steers is expected to post break-even earnings per share, indicating a change of 0% from the year-ago quarter. The Zacks Consensus Estimate has changed 0% over the last 30 days.
Cohen & Steers has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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This article originally published on Zacks Investment Research (zacks.com).