1) Market Overview & Strategic Initiatives - T. Rowe Price ended Q2 2026 with $1.9 trillion in assets under management (AUM) but faced $6.5 billion in net outflows. - Positive flows were noted in May and June, driven by a large sub-advisory win and demand for integrated equity and fixed income strategies. - The firm is expanding its ETF offerings, launching the T. Rowe Price Capital Appreciation Market Opportunities ETF and the T. Rowe Price Active Crypto ETF, growing its ETF business to 34 funds and $30 billion in AUM. - T. Rowe Price is also advancing its strategic alliance with Goldman Sachs, launching the T. Rowe Price Goldman Sachs Private Markets Fund.

2) Financial Performance - Adjusted diluted EPS for Q2 2026 was $2.57, up from $2.24 in Q2 2025, driven by higher average AUM and investment advisory revenue. - Q2 adjusted net revenue was $1.9 billion, an increase of 8.5% YoY. - Investment advisory revenue reached $1.7 billion, reflecting higher AUM levels. - Adjusted operating expenses were $1.2 billion, up 4.9% YoY, influenced by market-driven expenses and technology-related costs.

3) Investment Performance & Client Demand - Over half of T. Rowe Price's funds outperformed their peer groups over one, three, and ten-year periods, though five-year performance was weaker. - Fixed income funds showed strong performance, with over 75% outperforming across all reported time periods. - The firm is seeing growing interest in lower-fee strategies and integrated offerings, with $16 billion of net inflows year-to-date from these approaches.

4) Challenges & Future Outlook - The company anticipates continued pressure on active equity flows, particularly in open-ended mutual funds, and expects net flows in H2 2026 to be more challenging. - Portfolio rebalancing and a lull in target date fund flows are expected to impact performance in the latter half of the year. - Despite these challenges, T. Rowe Price expects 2026 to be a record year for gross flows, driven by strong interest in fixed income and alternatives.

5) Leadership & Operational Enhancements - Recent leadership changes include Eric Veiel becoming President and Sébastien Page as Co-Head of Global Investments. - The firm is embedding AI into business workflows, with over 130 AI solutions deployed and 70% associate adoption, aimed at enhancing operational efficiency and decision-making. - The transcript lacks specific figures on July flows and detailed guidance for the second half of 2026.

Bottom line: T. Rowe Price is navigating a challenging market environment with strategic expansions in ETFs and digital assets while facing pressure on active equity flows. The firm remains focused on leveraging its strengths in investment performance and operational efficiency to drive future growth, making it a potentially resilient investment for shareholders.