TROW · 10-Q · 2026Q3 · Full report
Operating Expense Trends
PRICE T ROWE GROUP INC · 2026-10-29 · Importance 42 · Surprise 14 · No source text
GAAP operating expenses increased 3.2% to $3,778.5 million for the first nine months of 2026, while adjusted operating expenses rose 4.2% to $3,558.5 million; Q3 adjusted expenses increased 5.8% to $1,200.1 million. Year-to-date distribution and servicing costs rose 12.2% to $316.4 million, mainly because more average AUM was distributed through third-party intermediaries. Technology, occupancy, and facility costs increased 7.3% to $615.4 million year to date, driven by outsourced technology capabilities, cloud infrastructure, and hosted solutions; Q3 included a roughly $10 million reversal of accrued technology expenses. Average associate headcount fell 5.4% year over year to 7,584 for the first nine months, while compensation and related costs increased 3.8% to $2,186.6 million, primarily from higher interim bonus accruals and long-term incentives; restructuring charges were $20.7 million year to date, down from $28.5 million.
Key facts
- U.S. GAAP operating expenses were $1,235.1 million in Q3 2026, down 1.2% from Q3 2025; adjusted operating expenses were $1,200.1 million, up 5.8%. source
- Q3 2026 compensation, benefits, and related costs were $664.7 million, up $32.2 million (5.1%) from Q3 2025, primarily due to higher interim bonus accrual and long-term incentives, partly offset by lower salaries, benefits, and temporary personnel. source
- U.S. GAAP operating expenses were $3,778.5 million in the nine months ended September 30, 2026, compared with $3,662.9 million in 2025; adjusted expenses increased 4.2% to $3,558.5 million. source
- Technology, occupancy, and facility costs were $205.1 million in Q3 2026, up 4.0%, and $615.4 million for the first nine months, up 7.3%; increases reflected outsourced technology, cloud infrastructure, and hosted solutions. source
- Q3 2026 included reversal of about $10 million in accrued technology-related expenses for work expected to be completed in future periods. source
- Q3 2026 advertising and promotion costs were $21.7 million, up $0.4 million (1.9%) from 2025; nine-month costs were $60.4 million, down $16.9 million (21.9%), primarily due to lower media spend and agency costs. source
- General, administrative, and other costs were $95.5 million in Q3 2026, up $7.9 million (9.0%), and $292.8 million for the first nine months, up $21.6 million (8.0%). source
- Q3 2026 GAAP operating expenses decreased due to market-related impacts on deferred compensation liabilities, lower restructuring charges, and lower acquisition-related amortization and impairments; higher compensation, distribution, technology, facility, and general costs partly offset the declines. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | realized | -5.8% | U.S. GAAP operating expenses were $3,778.5 million in the nine months ended September 30, 2026, compared with $3,662.9 million in 2025;… |
| operating_income | negative | realized | -2.1% | Technology, occupancy, and facility costs were $205.1 million in Q3 2026, up 4.0%, and $615.4 million for the first nine months, up 7.3%;… |
| operating_income | positive | realized | +0.8% | U.S. GAAP operating expenses were $1,235.1 million in Q3 2026, down 1.2% from Q3 2025; adjusted operating expenses were $1,200.1 million,… |
| operating_income | positive | realized | +0.5% | Q3 2026 included reversal of about $10 million in accrued technology-related expenses for work expected to be completed in future periods. |