IVZ 10-K & 10-Q changes, risk factors and insider trading

Volatility and disruption in global or regional capital and credit markets, equity, debt, private and commodity markets, as well as adverse changes in the global economy, could negatively affect our AUM, revenues, net income and liquidity.

•In the event of extreme circumstances, including an economic, political or business crisis, such as widespread systemic failures or disruptions in the global or regional financial systems or failures of firms that have significant obligations as counterparties on financial instruments, we may suffer significant declines in AUM and severe liquidity or valuation issues in managed investment products in which client and company assets are invested, all of which would adversely affect our operating results, financial condition, liquidity, credit ratings, ability to access capital markets and ability to retain and attract key employees. Additionally, these factors could impact our ability to realize the carrying value of our goodwill and other intangible assets.assets and have impacted the carrying value of our intangible assets in the past.

•Uncertainties regarding geopolitical developments, such as nation state sovereignty, border disputes, diplomatic developments, social instability or changes in governmental policies, can produce volatility in global financial markets and regulatory environments. This volatility, including volatility arising from tensions between the U.S. and China, may impact the level and composition of our AUM and also negatively impact investor sentiment, which could result in reduced or negative flows. Geopolitical risks may also lead to economic sanctions, trade restrictions, or regulatory changes that adversely affect global markets and our business.

Declines in the market value of AUM in client portfolios. We cannot predict whether volatility in the markets will result in substantial or sustained declines in the markets generally or result in price declines in market segments in which our AUM are concentrated. Any of the foregoing could negatively impact the market value of our AUM, revenues and net income. Market declines may be driven by interest rate volatility, foreign exchange fluctuations, geopolitical instability, or other macroeconomic factors.

Our revenues and net income from money market and other fixed income assets may be harmed by interest rate volatility, prolonged high or low rates, liquidityliquidity, and credit volatility.

While inflation declinedremained relatively flat in 2024,2025, our business is exposed to risks associated with inflation and fluctuations in interest rates shouldincluding theyrapid increasechanges or uncertainty in therate future.direction. Certain institutional investors using money market products and other short-term duration fixed income products for cash management purposes may shift these investments to direct investments in comparable instruments in order to realize higher yields. These redemptions would reduce AUM, thereby reducing our revenues and net income. If securities within a money market portfolio default or investor redemptions force the portfolio to realize losses, there could be negative pressure on its net asset value (NAV). Although money market investments are not guaranteed instruments, the company might decide, under such a scenario, that it is in its best interest to provide support in the form of a support agreement, capital infusion or other methods to help stabilize a declining NAV, which may have an adverse impact on our profitability. Additionally, we have investments, including collateralized loan obligations (CLOs), real estate-related loans, commercial loansloans, income based products inclusive of private strategies, and seed capital in fixed income funds, the valuation of which could vary with changes in interest and default rates.rates as well as credit quality deterioration. Declines in the values of AUM could lead to reduced revenues and net income as management fees are generally calculated based upon the size of AUM.

The largest component of our net assets, revenues and expenses, as well as our AUM, is presently denominated in U.S. Dollars. However, we have a large number of subsidiaries outside of the U.S. whose functional currencies are not the U.S. Dollar. As a result, fluctuations in the exchange rates to the U.S. Dollar impact our reported financial results. Consequently,Currency significantmovements can also directly affect the value of AUM and related fee revenues when client assets are denominated in non-U.S. currencies. Significant strengthening of the U.S. Dollar relative to the United Kingdom (U.K.) Pound Sterling, Euro, Chinese RMB, Japanese Yen or Canadian Dollar, among other currencies, could have a material negative impact on our reported financial results.

The asset management industry is facing transformative pressures and trends from a variety of different sources, including increased fee pressure; a continued shift away from actively managed fundamental equities and fixed income strategies towards alternatives, passive index and smart beta strategies; increased demands from clients and distributors for client engagement and services; a trend towards institutions concentrating on fewer relationships and partners and reducing the number of investment managers they work with; consolidation among distributors and competitive pricing pressures; growth in private markets and alternatives requiring new capabilities; increased regulatory activity and scrutiny of many aspects of the asset management industry, including ESG practices and related matters, transparency/unbundling of fees, inducements, conflicts of interest, capital, liquidity, solvency, leverage, operational risk management, controls and compensation; divergent global regulatory requirements and evolving sustainability disclosure mandates; addressing the key emerging markets in the world, such as China and India, which often have populations with different needs, preferences and horizons than the more developed U.S. and European markets; advances in technology and digital wealth and distribution tools and increasing client interest in interacting digitally with their investment portfolios; cybersecurity, data privacy, and integration of artificial intelligence (AI) into investment and client service processes; and growing cryptodigital asset markets that remain subject to substantial volatility and significant regulatory uncertainty. As a result of these trends and pressures, the asset management industry is facing an increased level of disruption. If we are unable to adapt our strategy and business to adequately address these trends and pressures, we may be unable to satisfactorily meet client needs, our competitive position may weaken, and our AUM, revenues, and net income may be adversely affected.

Our competitors include many investment management firms and other financial institutions. Some of these institutions have greater capital and other resources, and offer more comprehensive lines of products and services, than we do. There are relatively few barriers to entry by new investment management firms, and the successful efforts of new entrants around the world have also resulted in increased competition. Further, our competitors may increase their market share to our detriment by reducing fees. Failure to achieve scale or operational efficiencies in response to these pressures could further compress margins and negatively impact profitability. The increasing size and market influence of certain distributors of our products and of certain direct competitors may have a negative impact on our ability to compete at the same levels of profitability in the future. Competitive pressures may affect our economics in multiple ways, including forcing us to reduce the fees we charge clients and increasing the cost of delivering our products through higher or more expansive revenue share, all of which could adversely impact our profitability.

In addition, technology is subject to rapid advancements and changes and our competitors may, from time to time, implement newer technologies or more advanced platforms for their services and products, including digital advisers, low cost, high speed financial applications and services and investment platforms based on AI and other advanced electronic systems, which could adversely affect our business if we are unable to remain competitive. Nontraditional competitors, including fintech firms and global platforms, may accelerate these trends and intensify pricing pressure.

•exposure to stringent and complex foreign, federal, state and local laws, ordinances and regulations, including those related to private fund advisers, financial crime, permits, government contracting, conservation, exploration and production, lending, tenancy, housing affordability, occupational health and safety, employment law and regulation, foreign investment and environmental protection;

These risks could also result in direct liability for us by exposing us to losses, regulatory sanctions or litigation, including claims for compensatory or punitive damages. In addition, market conditions may change during the course of real estate development projects in which our investment products and clients invest that make such developments less attractive than at the time it was commenced and potentially harm the investment returns of our investment products, our clients and, to the extent of our investment in such investment products, us.

The revenues and profitability of investment products, clients and, to the extent of our investment in such investment products, us are adversely affected when borrowers and counterparties default, in whole or in part, on their obligations or when there is a significant deterioration in the credit quality of the loan portfolio or decline in the value of collateral. In the event of a default, investment returns will depend on the ability to foreclose and liquidate the collateral. Certain debt-related holdings may be difficult or impossible to dispose of readily at what we believe to be a fair price. Investment products and clients can have exposure to lower-rated instruments and securities, which generally reflects a greater possibility that adverse changes in the financial condition of the borrower or in general economic conditionsconditions, (including, for example, a substantial period ofincluding rising interest ratesrates, inflation, geopolitical instability, or decliningsector-specific earnings), or both,stress, may impair the ability of the borrower to make payment of principal and interest.

Our financial performance depends, in part, on our ability to develop, market and manage new investment products and services. The development and introduction of new products and services requires continued innovative efforts on our part and may require significant time and resources as well as ongoing support and investment. Substantial risk and uncertainties are associated with the introduction of new products and services, including the implementation of new and appropriate operational controls and procedures, technology integration, shifting client and market preferences, the introduction of competing products or services and compliance with regulatory requirements. New products often must be in the market place for three or more years in order to generate the track records required to attract significant AUM inflows. Increasingly, clients and intermediaries are looking to investment managers to be able to deliver investment outcomes tailored to particular circumstances and needs, and to augment traditional investment management products and services with additional value-added services. A failure to continue to innovate and introduce successful new products and services or to manage effectively the risks associated with such products and services may impact our market share relevance and may cause our AUM, revenues and net income to decline.

Many competitors offer similar products to those offered by us, and the failure or negative performance of competitors’ products could lead to a loss of confidence in similar Invesco products, irrespective of the performance of our products. Any loss of confidence in a product type could lead to withdrawals, redemptions and liquidity issues in such products, and may also increase regulatory focus and compliance costs, which could have a material adverse effect on our AUM, revenues and net income or liquidity.

Retaining highly skilled investment management and other personnel in-high demand personnel is important to our ability to attract and retain our clients. The market for skilled investment management professionals and other key personnel is highly competitive. Our policy has been to provide our investment management professionals and other key personnel with a supportive professional working environment and compensation and benefits that we believe are competitive with other leading investment management firms. However, we may not be successful in retaining our investment management professionals and other key personnel, and the loss of significant investment professionals or other key personnel could reduce the attractiveness of our products and services to potential and current clients and could, therefore, adversely affect our AUM, revenues and net income.

Substantially all our revenues are derived from investment management agreements. Investment management agreements are generally terminable upon 30 or fewer days' notice. Agreements with U.S. registered funds may be terminated with notice,notice or terminated in the event of an “assignment” (as defined in the U.S. Investment Company Act of 1940, as amended), and must be renewed and approved annually by the disinterested members of each fund's Board of Trustees or Directors, as required by law. In addition, the Boards of Trustees or Directors of certain other funds generally may terminate these investment management agreements upon written notice for any reason. Open-end registered fund and unit trust investors may generally withdraw their funds at any time without prior notice. Institutional clients may elect to terminate their relationships with us or reduce the aggregate amount of AUM, generally on short notice. Any termination of or failure to renew a significant number of these agreements, or any other loss of a significant number of our clients or AUM, would adversely affect our revenues, net income, and liquidity.

Disclosure requirements and expectations related to sustainability or ESG are increasing and evolving. Our inability to meet these requirements and expectations could cause regulatory or reputational harm and affect our ability to attract and retain clients.

Requirements and expectations related to commitment to and disclosures around sustainability or ESG topics continue to increaseevolve globally. These requirements are distinct from typical financial reporting constructs, given their focus on the disclosure of future sustainability or ESG related goals and targets, the strategy and governance designed to achieve those targets, and reporting of relevant metrics delineating progress towards those targets. Additionally, sustainability or ESG related disclosure requirements may use different definitions of materiality than those used for financial statement disclosures, including a focus on so-called “double materiality,” which can evaluate a sustainability or ESG matter as material, regardless of its direct impact on us, based on broader societal impacts.

Given evolving requirements and the associated standards, methodologies, processes, and controls related to sustainability and ESG related requirements and disclosures that may impact us or our clients, diverging requirements across jurisdictions, and distinct definitions and standards for materiality that could result in conflicting disclosures across frameworks, we may make disclosures that are incorrect or incomplete or fail to make required disclosures, which may result in regulatory or reputational consequences or that may directly or indirectly impact our ability to attract and retain clients. Meeting these requirements may require significant investment in data collection, verification, and reporting systems, and reliance on third-party data providers introduces additional risk.

Further, fiduciary, anti-competitive, voting power, governance, and other concerns with ESG investment strategies continue to be the subject of legislative and regulatory debate globally, particularly at both the federal and state levels in the U.S., the outcomes of which could impact both our asset management business and our clients, as well as, potentially, our investment activities more broadly. Certain U.S. officials have suggested that sustainability or ESG related investing practices may result in violations of law, including antitrust laws, and breaches of fiduciary duty. Views on sustainability or ESG practices, particularly those related to climate issues, have also become part of political discourse, which can amplify the reputational and business risks associated with such allegations. Further risks related to ESG investment strategies include negative market perception and diminished sales effectiveness and regulatory and litigation consequences associated with greenwashing claims or driven by association with certain clients, industries or products that may be inconsistent with our other clients’ ESG priorities.

Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. We, and the client portfolios that we manage, have exposure to many different industries and counterparties, and routinely execute transactions with counterparties in the financial services industry. Many of these transactions expose us or such client portfolios to credit risk in the event of default of their counterparties. While we regularly conduct assessments of such risk posed by counterparties, an event of default may occur due to market factors, such as sudden swings in the financial and credit markets that may occur swiftly and without warning. SuchCounterparty event of defaultdefaults could produceresult ain financial losslosses for the companyus or theour clientclients, portfoliosregulatory wescrutiny, manage.and reputational harm.

In recent years, several financial services firms suffered cyber-attacks launched both domestically and from abroad, resulting in the disruption of services to clients, loss or misappropriation of confidential data, litigation and regulatory enforcement actions and reputational harm. Cyber security incidents and cyber-attacks have been occurring globally at a more frequent and severe level. Our status as a global financial institution and the nature of our client base may enhance the risk that we are targeted by such cyber threats. Although we take protective measures, including measures to effectively secure information effectively through system security technology, have many controls, processes, digital backup and recovery processes in place, and seek to continually monitor and develop our systems to protect our technology infrastructure and data from misappropriation or corruption, our technology systems may still be vulnerable to unauthorized access as a result of an external attack, actions by employees or vendors with access to our systems, computer malware or other events that have a security impact and that result in the disclosure or release of confidential information inadvertently or through malfeasance, or result in the loss (temporarily or permanently) of data, applications or systems. The third parties with which we do business or which facilitate our business activities, including financial intermediaries and technology infrastructure, data storage and service providers, are also susceptible to the foregoing risks (including those related to the third parties with which they are similarly interconnected or on which they otherwise rely), and our or their business operations and activities may therefore be adversely affected, perhaps materially, by failures, terminations, errors or malfeasance by, or attacks or constraints on, one or more financial, technology or infrastructure institutions or intermediaries with whom we or they are interconnected or conduct business. Further, third-party service providers may have limited indemnification obligations to us in the event a cyber incident causes us to incur loss or damages.

A breach of our technology systems could damage our reputation and could result in the unauthorized disclosure or modification or loss of sensitive or confidential information (including client data); unauthorized disclosure, modification or loss of proprietary information relating to our business; inability to process client or company transactions and processes; breach and termination of client contracts; liability for stolen assets, information or identity; remediation costs to repair damage caused by the breach, including damage to systems and recovery of lost data; additional security costs to mitigate against future incidents; regulatory actions (including fines and penalties, which could be material); and litigation costs resulting from the incident. Such consequences could have a negative effect on our AUM, revenues and net income.

Our continued success in effectively managing and growing our business depends on our ability to integrate our varied accounting, financial, information and operational systems on a global basis. Moreover, adapting or developing the existing technology systems we use to meet our internal needs, as well as client needs, industry demands and new regulatory requirements, is also critical for our business. The introduction of new technologies, such as our StateAlpha/Hybrid Street Alphainvestment platform, presents new challenges and new potential risks to us. On an ongoing basis, we need to upgrade and improve our technology, including our data processing, financial, accounting, shareholder servicing and trading systems. Implementing any such upgrades, updates or other changes or replacements for our systems may be expensive and time-consuming, could divert management’s focus away from core business activities and may adversely affect our business if additional or unanticipated time or resources are necessary to complete any such changes to our systems. If the updated or new systems, such as our StateAlpha/Hybrid Street Alphainvestment platform, do not operate as anticipated or if other unforeseen issues arise with the transition to the new or updated systems, our business may be adversely affected. Further, we also must be proactive and prepared to implement new technology when growth opportunities present themselves, whether as a result of a business acquisition or rapidly increasing business activities in particular markets or regions. These needs could present operational issues or require significant capital and may require us to reevaluate the current value and/or expected useful lives of the technology we use, which could negatively impact our AUM, revenues, net income and liquidity.

If we were to experience a man-made or natural disaster, severe weather event, health crisis or pandemic, such as new variant of COVID-19, or other business continuity problem, our continued success will depend, in part, on the availability of our personnel, our office facilities and the proper functioning of our computer, telecommunication and other related systems and operations. In such an event, we believe our operational size, multiple office locations and our existing back-up systems should mitigate adverse impacts. Nevertheless, given our global presence, we could still experience near-term operational problems with regard to particular areas of our operations. Although we seek to regularly assess and improve our existing business continuity plans, a major disaster, a disaster that affected certain important operating areas, or our inability to successfully recover should we experience a disaster or other business continuity problem, could materially interrupt our business operations and cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability.

The extent to which our business, revenues, AUM and net income are affected by a future pandemic or a new variant of COVID-19 will largely depend on new events or future developments,events, which cannot be accurately predicted and are uncertain,predicted, including the duration, severity and the length of time it will take for the economy to recover from the negative impacts on human capital and potentially more permanent impacts on how we operate and serve our clients.operate.

The trading price of an ETF’s shares or units fluctuates continuously throughout trading hours. While an ETF’s creation/redemption feature and the arbitrage mechanism are designed to make it more likely that the ETF’s shares or units normally will trade at prices close to the ETF’s NAV, exchange prices may deviate significantly from the NAV. ETF market prices are subject to numerous potential risks, including significant market volatility; imbalances in supply and demand; trading halts invoked by a stock exchange; and inability or unwillingness of market makers, authorized participants, settlement systems or other market participants to perform functions necessary for an ETF’s arbitrage. Operational disruptions, technology failures, or cybersecurity incidents affecting exchanges, clearing systems, or third-party service providers could further impair ETF trading and settlement. Regulatory changes or restrictions on arbitrage or liquidity requirements may also negatively impact ETF pricing and functioning.

If market events lead to instances where an ETF trades at prices that deviate significantly from the ETF’s NAV or indicative value, or trading halts are invoked by the relevant stock exchange or market, investors may lose confidence in ETF products and sell their holdings, which maycould result in reputational harm and cause our AUM, revenue and net income to decline.

We or our third-party vendors, clients or counterparties have developed,developed and may continue to develop or incorporate AI technology in certain business processes, services or products. The development and use of AI present a number of risks and challenges to our business. The legal and regulatory environment relating to AI is uncertain and rapidly evolving, in the U.S., E.U., and internationally, and includes regulation targeted specifically at AI technology, including the EU AI Act, portions of which have already come into force with more to follow this year and in future years, as well as provisions in intellectual property, privacy, consumer protection, employment and other laws applicable to the use of AI. Global divergence in AI regulations and evolving standards could create conflicting requirements across jurisdictions, increase compliance costs, and heighten enforcement risk. These evolving laws and regulations could require changes in our implementation of AI technology, increase our compliance costs and the risk of non-compliance, and restrict or impede our ability to develop, adopt and deploy AI technologies efficiently and effectively. If not appropriately governed, managed and controlled, AI models, particularly generative AI models, may produce output or take action that is incorrect or outdated, that result in the release of personal, confidential or proprietary information, that reflect biases included in the data on which they are trained or introduced during the training or fine tuning process, that infringe on the intellectual property rights of others, or that is otherwise harmful. In addition, theThe complexity and limited transparency of many AI models makesmake it challenging to understand why they are generatinggenerate particular outputs.outputs, Thisincreasing limited transparency increases the challenges associated with assessing the proper operation of AI technology, understandinggovernance and monitoring therisks. capabilitiesUse of thethird-party AI technologymodels developedmay byintroduce thirdadditional partiesrisk, and,as we may have limited visibility into their training data, validation processes, and controls to thatprevent extent,unauthorized areor dependentharmful in part on the manner in which those third parties develop and train their models.content. This results in potential risks arising from the inclusion of any unauthorized material in the training data for their models, and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited visibility. Further, AI tools, whether embedded in third party systems or in tools that we develop, that are used to support regulated activities such as investment decision making and client reporting present unique risks, including errors in algorithms or assumptions, data quality issues, and potential bias, that could adversely affect investment performance and increase business and compliance risks. Any of these risks could expose us to liability or adverse legal or regulatory consequences and harm our reputation and the public perception of our business or the effectiveness of our security measures. In addition to our use of AI technologies, we are exposed to risks arising from the use of AI technologies by bad actors to commit fraud and misappropriate funds and to facilitate cyberattacks. Generative AI,AI ifmay usedbe exploited to perpetratecreate fraudsophisticated phishing schemes, ransomware attacks, or launchother cyberattacks,cyber threats, which could result in financial losses, liquidity outflows, or othersystemic adversemarket effects at a particular financial institution or exchange.disruptions. If our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability.

We have goodwill and indefinite-lived intangible assets on our balance sheet that are subject to annual impairment reviews. We also have definite-lived intangible assets on our balance sheet that are subject to impairment testing. Goodwill and intangible assets totaled $8,318.1$8,477.1 million and $5,749.3$3,927.3 million, respectively, at December 31, 2024.2025. We recorded a non-cash impairment of $1,248.9$1,794.9 million related to our indefinite-lived intangible assets related to acquired management contracts of U.S. retail mutual funds during the year ended December 31, 2023,2025, and we may not realize the full value of our remaining goodwill and indefinite-lived intangible assets. We perform impairment reviews of these assets on an annual basis, or more frequently if impairment indicators are present. A variety of factors can result in impairment. Should the fair value be less than the carrying amount of either the goodwill or intangible assets, a write-down of the related assets would occur, adversely affecting our net income for the period. See Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies - Goodwill” and “- Intangibles,” for additional details of our impairment analysis process.

Our revolvingCredit creditAgreements agreement imposesimpose operating covenants that impact our ability to conduct certain activities and, if amounts borrowed under itour Credit Agreements were subject to accelerated repayment, we might not have sufficient assets or liquidity to repay such amounts in full.

Our revolvingCredit creditAgreements agreement requiresrequire us to maintain specified financial ratios, including maximum debt-to-earnings and minimum interest coverage ratios. The revolvingCredit credit agreementAgreements also containscontain customary affirmative operating covenants and negative covenants that, among other things, restrictlimit certain of our subsidiaries' ability to incur debt and restrict our ability to transfer assets, merge, make loans and other investments and create liens. The breach of any covenant could result in a default under the revolvingapplicable creditCredit agreement. Compliance with these covenants may be affected by factors outside our control, including market volatility, declines in AUM or revenues, increased regulatory or operational costs, and adverse macroeconomic conditions. In the event of any such default, lenders that are party to the revolvingRevolving creditCredit agreementAgreement could refuse to make further extensions of credit to us and require all amounts borrowed under the revolvingCredit credit agreement,Agreements, together with accrued interest and other fees, to be immediately due and payable. If any indebtedness under the revolvingCredit credit agreementAgreements were subject to accelerated repayment, and if we had at that time a significant amount of outstanding debt under the revolvingCredit credit agreement,Agreements, we might not have sufficient liquid assets to repay such indebtedness in full.

We issued perpetual preferred stock having a value of approximately $4 billion, of which approximately $2.5 billion remains outstanding, which could adversely affect our ability to raise additional capital and may limit our ability to fund other priorities.

We issued approximately $4 billion of 5.9% fixed rate perpetual preferred stock in connection with the acquisition of OppenheimerFunds Inc.Inc., and we repurchased $1.5 billion of such preferred stock in 2025, leaving approximately $2.5 billion remaining outstanding. This issuance may limit our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes, may restrict our ability to pay dividends to holders of common shares in certain circumstances, may increase our vulnerability to general economic and industry conditions, and will require a significant portion of cash flow from operations to make required dividend payments to preferred shareholders.

Our ability to meet anticipated cash needs depends upon a number of factors, including our creditworthiness and ability to generate operating cash flows. Failure to maintain adequate liquidity could lead to unanticipated costs and force us to revise existing strategic and business initiatives. Liquidity needs may also arise from unexpected client redemptions, collateral requirements for derivatives or financing arrangements, or obligations related to seed capital and fund support. Our access to equity and debt markets on reasonable terms may be limited by adverse market conditions, including tax and interest rates, a reduction in our long- or short-term credit ratings, or changes in government regulations. Inadequate liquidity could force us to sell assets at unfavorable prices or limit our ability to invest in growth initiatives. Failure to obtain funds and/or financing, or any adverse change to the cost of obtaining such funds and/or financing, may cause our AUM, revenues and net income to decline, curtail our operations and limit or impede our prospects for growth.

Distribution of earnings of our subsidiaries may be subject to limitations, including regulatory net capital requirements.

Substantially all of our operations are conducted through our subsidiaries. As a result, our cash flow and ability to fund operations are dependent upon the earnings of our subsidiaries and the distribution of earnings, intercompany loans or other payments by our subsidiaries to us. Any payments to us by our subsidiaries could be subject to statutory, regulatory or contractual restrictions and are contingent upon our subsidiaries' earnings and business or regulatory considerations. For example, certain of our subsidiaries are required under applicable laws and regulations to maintain appropriate levels of capital. Our financial condition or liquidity could be adversely affected if certain of our subsidiaries are unable to distribute funds to us.

We regularly review, and from time-to-time engage in strategic transactions, some of which may be material. Strategic transactions also pose the risk that any business we acquire may lose customers or employees or could underperform relative to expectations. We could also experience financial or other setbacks if potential or actual acquisitions or divestitures encounter unanticipated problems, including problems related to closing or integration. Transactions may also involve unexpected costs or delays in achieving anticipated synergies. Following the completion of a strategic acquisition, we may have to rely on the seller to provide administrative and other support, including financial reporting and internal controls, to the acquired business for a period of time. There can be no assurance that such sellers will do so in a manner that is acceptable to us.

MassMutual is entitled to designate an individual to serve on our board so long as it beneficially owns at least (i) 10% of our issued and outstanding shares of common stock; or (ii) 5% of our issued and outstanding shares of common stock and $2.0 billion in aggregate liquidation preference of our Series A preferred shares. Additionally, we are not permitted to take certain actions without the prior written approval of MassMutual, including making certain changes in our capital structure or our organizational documents, adopting a shareholder rights plan or effectuating certain business combination transactions. MassMutual’s level of ownership and influence may make some transactions (such as those involving mergers, material share issuances or changes in control) more difficult or impossible without the support of MassMutual, which in turn could adversely affect the market price of our shares of common stock or prevent our shareholders from realizing a premium over the market price for their shares of our common stock. The interests of MassMutual may conflict with the interests of other shareholders.

We operate in an industry that is highly regulated in most countries, and any enforcement action or proceeding against us or significant changes in the laws or regulations governing our business or industry could damage our reputation or decrease our AUM, revenues, net income andor liquidity.

AsLike with allother investment management companies, our activities are highly regulated in nearly every country in which we conduct business. The regulatory environment in which we operate frequently changes, and in recent years we have seenobserved a significant increase in both regulatory changes and enforcement actions and proceedings brought by governmental agencies and self-regulatory authorities against financial services companies. Laws and regulations generally grant governmental agencies and industry self-regulatory authorities broad administrative discretion over our activities, including the power to require registrations or licenses, limit or restrict our business activities, conduct examinations, risk assessments, investigations and capital adequacy reviews and impose remedial programs to address perceived deficiencies. As a result of regulatory oversight, we could face requirements, actions or proceedings that negatively impact the way in which we conduct business, delay or deny approval for new products or service offerings, cause or contribute to reduced sales of or increased redemptions of our existing products or services, impair the investment performance of certain of our products or services, impact our product mix, increase our compliance costs and/or impose additional capital requirements. Our regulators likewise have the authority to commence enforcement actions or proceedings that could lead to penalties and sanctions up to and including the revocation of registrations or licenses necessary to operate certain businesses, the suspension or expulsion from a particular jurisdiction or market of any of our business organizations or their key personnel or the imposition of fines and censures on us or our employees. Further, regulators across borders can coordinate actions against us as issues arise resulting in impacts on our business in multiple jurisdictions. Judgments or findings of wrongdoing or non-compliance with applicable lawlaws or regulationregulations by governmental authorities or industry self-regulatory authorities, or in private civil litigation against us, could affect our reputation, increase our costs of doing business and/or negatively impact our revenues. Any of the effects discussed above could have a material negative impact on our AUM, revenue,revenues, net income or liquidity.

A substantial portion of the products and services we offer in the U.S. are regulated by the SEC, Financial Industry Regulatory Authority, Commodity Futures Trading Commission, the National Futures Association, Department of Labor (DOL) and/or the Texas Department of Banking andBanking, in the U.K. are regulated by the Financial Conduct Authority (FCA), and in Hong KongKong, China, and ChinaJapan are regulated by the Securities and Futures Commission of Hong Kong (SFC) andKong, the China Securities Regulatory Commission, and the Financial Services Agency, respectively. Subsidiaries operating in the EU and the products and services they provide are mainly regulated by the Commission de Surveillance du Secteur Financier in Luxembourg,Luxembourg theand Central Bank of Ireland, theand Bundesanstalt für Finanzdienstleistungsaufsicht in Germany andby the European Securities and Markets Authority (ESMA).Authority. Such subsidiaries are also subject to various EU Directives, which generally are implemented by member state national legislation and by EU Regulations. Our operations elsewhere in the world are regulated by similar agencies and authorities.

•Regulations that place restrictions on certain outbound investments,investments from the United States or by U.S. persons to companies operating in certain countries and/or industries perceived to be adverse to national security interests of the United States, such as the U.S. Department of Treasury’s Outbound Investment ScreeningSecurity Program Rule that became effective earlierin this year,2025, may impede our ability to provide certain products and/or make certain investments and add complexity to our compliance program with heightened regulatory requirements.

•Regulations pertaining to the privacy and the use, security,protection, transfer and management of personal data with respect to clients, employees and business partners. Privacy regulationslaws, such as the European and U.K. General Data Protection RegulationRegulation, (GDPR)U.S. instate Europeprivacy laws and financial sector regulations, India’s Digital Personal Data Protection Act, China’s Personal Information Protection Law and Bermuda's Personal Information Protection Act, have strengthened privacy rulesrequirements for organizations handling personal data, granted individuals more rights and control over the use of their personal data,data and greatly increased penalties for non-compliance. In many other jurisdictions similar regulations, such as the California Consumer Privacy Act, India’s Digital Personal Data Protection Act, China’s Personal Information Protection Law and the Bermuda Personal Information Protection Act (PIPA), have been adopted. In addition, rules and legal requirements for international transfers of personal data from Europe and Asia,Asia create additional complexity and risk, particularly regarding integrated global cloud-based systems and business services employed by us. An emerging risk is the use of personal data in AI systems, including privacy regulations related to automated decision making based on personal data.

•Regulations aimed at addressing concerns regardingassociated with open-end funds thatmaking are investinginvestments in less liquid asset classes. RegulatorsFinancial regulators in the U.S., U.K. and EU have periodically expressed concern that the daily redeemability features of these funds may create a “liquidity mismatch” with the assets in which they invest, and that this mismatch can give rise to investor dilution and systemic risk, especially in times of financial market stress. In the EU, recent amendments to the Undertakings for the Collective Investment in Transferable Securities (UCITS) and Alternative Investment Fund Managers (AIFMD) directive frameworks introduce new rules regarding the use of certain liquidity management tools (e.g., swing pricing and side pockets) by UCITS funds and AIFs. InRegulations the U.S., the SEC has proposed changesintended to theaddress regulationssuch governingperceived liquidity risk management programs for registered open-end funds (including ETFs) that, if finalized without change, could impede our ability to sponsorprovide mutualcertain types of investment strategies in open-end funds andor ETFsimpair thatthe investinvestment inperformance of certain assetof classes,our includingexisting syndicatedopen-end bankfund loans.products.

•Regulations pertaining to the integration of ESG factors in asset management. These regulations have materially impacted the asset management industry in the EU and U.K.U.K in recent years. In particular, these regulations have required the integration of sustainability risks,risks thewithin investment management processes and imposed enhanced disclosure of informationrequirements on the ESG characteristics of EU products and the integration of investors’ ESG preferences at the point of sale have had a significant impact on the features of EU products and onU.K. investment management activities. In the U.K., the FCA published a new regime on sustainability disclosure requirements, including product sustainability labels, that became applicable in 2024.products. In the EU, ESMA published in 2024 new guidelines on fund naming aimed at avoiding greenwashing practices. Separately, severalproposed changes to the Sustainable Finance Disclosure Regulation (SFDR)were arereleased beingin considered,2025 includingand will lead to significant changes to the currentfunds’ ESG disclosure templatesfeatures and longer-termcategorizations. amendments to the broader SFDR framework. On top of the disclosure obligations applying to the financial sector, theThe EU Corporate Sustainability Reporting Directive sets out new ESG disclosure requirements for EU undertakings based on new European standards. The new regime will have an impact on EU domiciled companies and on non-EU groups having substantial activities in the EU,EU including(like us.we Thedo) SECbased andon othernew regulatorsEuropean instandards. theCertain U.S. states are pursuing similar initiativesinitiatives, albeit with varying requirements,requirements. andFurther, the SEC duringin the recent past several years has increased its enforcement activity relating to ESG disclosures and practices of asset managers.managers and may do so again. Equally, a number ofseveral Asian jurisdictions are introducing climate-related risk and reporting requirements as well as ESG product disclosure standards. Varying or inconsistent ESG-related regulations across multiple jurisdictions in which we operate can adversely impact the types of investment products and services that we can provide, increase our compliance costs and increase the risk that we could be subject to enforcement actions or proceedings for ESG-related compliance failures.

•The application of antitrust, change in bank control and similar competition laws and regulations to the asset management industry, including proposed amendments to these laws and regulations that could require large asset managers tolike us to, in certain circumstances, make pre-acquisitionacquisition notification filings or requests for approval with the U.S. Federal Trade Commission, Department of Justice and/or U.S. banking regulators before we acquire securities for the accounts of our clients, and the potential for antitrust regulators to promulgate regulations limiting common ownership of competitive companies by a single fund or by affiliated funds in a single fund complex. Developments in these laws and regulations and their application to our business could impede our ability to provide certain products or limit the AUM of certain investment strategies that we provide.

We cannot predict the full impact of legal and regulatory changes, changes in the interpretation of existing laws and regulations or possible enforcement actions or proceedings on our business. Such changesmatters have imposed, and are likely to continue to impose, new compliance costs and/or capital requirements or impact us in other ways that could have a material adverse impact on our AUM, revenues, net income or liquidity. Moreover, certain legal or regulatory changes could require us to modify our strategies, businessesbusinesses, product portfolios or operations, and we may incur other new constraintscosts or costs,impacts, including the investment of significant management time and resourcesresources, to satisfy new regulatory requirements or to compete in a changed businessregulatory environment. In recent years, certain regulatory developments have also added to downward pressures on our fee levels.

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.

We also remain highly focused on our capital priorities, investing in our key capabilities, efficiently allocating resources, and simplifying and streamlining the organization to position the company for greater scale, performance and improved profitability. We are delivering on our commitment to improve our leverage profiledeleverage and maintain a strong balance sheet. We redeemedrepaid ourin $600full the $500.0 million seniorthree-year notes,Term thatLoan wereAgreement dueentered oninto Januaryin 30,the 2024,second quarter of 2025 and we ended the year with cash and cash equivalents of $1$1.0 billionbillion. and a zero balanceAdditionally, on ourJanuary revolving15, credit2026, facility.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 2.95.4 million common shares for $49.6$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.

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 (non-operating income/expense) 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.

Among Invesco's first strategic objectiveobjectives 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)

AUM measured in the one, three and five year quartile rankings represents 37%,35%, 37%34% and 37%33% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three and five year basis represents 48%,44%, 47%,43%, and 45%42% of total Invesco AUM as of 12/31/2024.2025. Peer group rankingrankings are sourced from a widely-used third partythird-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.

Changes in Active and Passive AUM were as follows:

(12) U.S. GAAP gross revenue yield on AUM is equal to U.S. GAAP annualized total operating revenues divided by average AUM, excluding IGW AUM. The average AUM for IGW was $88.6$109.0 billion in 20242025 (2024: $88.6 billion, 2023: $87.2 billion, 2022: $93.5 billion). It is appropriate to exclude the average AUM of IGW as the revenues resulting from these AUM are not presented in our U.S. GAAP operating revenues. Additionally, theThe U.S. GAAP gross revenue yield is not a good measure because the numerator excludes the management fees earned from CIP;CIP, however,although the denominator of the measure includes the AUM of these investment products. Net revenue yield metrics include the netNet revenues and average AUM of IGW and CIP. See “Schedule of Non-GAAP Information” for a reconciliation of operating revenues to net revenues.

(23) Performance fees are earned when certaindefined performance metrics are achieved; Invesco QQQ Trust does not earn net revenues.achieved. Therefore, net revenue yield is calculated excluding performance feesfees. andNet revenue yield includes net revenues from Invesco QQQ Trust AUM.beginning Passiveon netDecember revenue20, yield is calculated excluding Invesco QQQ Trust AUM.2025.

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 investor'sinvestors' 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.

During the year ended December 31, 2024,2025, we experienced aan decreaseincrease in AUM of $16.3$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; December 31, 2022: AUM decreased $26.1 billion).

(9) Multi-Asset/Other includes Global Asset Allocation, Invesco Quantitative Strategies, Global Targeted Returns, Solutions, Intelliflo, and UITs, including certain ETFs managed within this capability.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 excluding APAC Money Market funds.

(11) QQQ represents assets held withinincludes Invesco QQQ Trust.

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 between 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, 20242025 and December 31, 20232024 in the “Assets Under Management” section above for additional information. 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 werewas $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 compared to $1,500.6 billion for the year ended December 31, 2023.2024. 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. DueAs toa this change in the mix of AUM,result, net revenue yield excluding performance fees and Invesco QQQ Trust declined to 30.223.0 basis points (bps) for the year ended December 31, 20242025 from 32.425.4 bps for the year ended December 31, 2023.2024.

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, 20242024. asThe comparedimpact toof $4,106.0foreign exchange rate movements increased Investment management fees by $35.9 million for the year ended December 31, 20232025 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 partially offset by the shift in AUM toward lower yield products.AUM. See discussion above on how AUM changes impact our Investment management fees.

For the year ended December 31, 2024,2025, Service and distribution fees were $1,479.7$1,518.1 million as compared to $1,374.6$1,479.7 million for the year ended December 31, 2023.2024. TheAfter increaseallowing wasfor primarilyforeign drivenexchange movements, Service and distribution fees increased by $31.9 million due to higher distribution fees of $91.2 million and administrative fees of $12.9$61.4 million resulting from higher average AUMAUM, topartially whichoffset theby feeslower apply.fund-related service fees.

For the years ended December 31, 2024,2025, Performance fees were $46.4$41.5 million as compared to $46.7$46.4 million for the year ended December 31, 2023.2024. Performance fees for the years ended December 31, 20242025 and 20232024 were primarily generated from multi-asset/other, private markets real estate and fundamental equities products.

For the year ended December 31, 2024,2025, Other revenues were $198.6$202.2 million as compared to $189.1$198.6 million for the year ended December 31, 2023. The increase in Other revenues was primarily driven by higher front end fees of $10.0 million and real estate transaction fees of $4.1 million, partially offset by lower other transaction fees of $4.6 million.2024.

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 billionbillion, for the year ended December 31, 2024 (Net revenues were $368.3 million and average AUM was $87.2 billion, for the year ended December 31, 2023). The decreaseincrease in IGW revenues was primarily drivendue to higher average AUM partially offset by the shift in AUM toward lower yield products and the introduction of regulatory mandated fee reductions in China in August 2023.products.

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 ManagementInvestment management and Performance fees earned by Invesco from the consolidated productsCIP are eliminated upon consolidation of the investment products,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.

ManagementInvestment management and Performance fees earned from CIP were $41.0$44.5 million in the year ended December 31, 2024,2025, as compared to $51.2$41.0 million for the year ended December 31, 2023.2024.

Operating expenses decreasedincreased $916.3$1,837.9 million for the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024 The year ended December 31, 2023and included a $1,248.9$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. The year ended December 31, 2024 included a one-time acceleration of $147.6 million in Employee compensation expense resulting from changes to the retirement criteria for vesting of currently outstanding common share-based awards and other long-term awards (collectively, Long-term awards). Excluding the intangible asset impairmentimpairment, chargeOperating 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, 2023 and the acceleration of Employee compensation expense for the year ended December 31, 2024, Operating expenses for the year ended December 31, 2024 increased $185.0 million2025 as compared to the year ended December 31, 2023.2024.

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, 20242024. asThe comparedimpact toof $1,825.2foreign exchange rate movements increased third-party expenses by $13.8 million for the year ended December 31, 2023.2025 Theas 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 increases of $112.9 million in service costs and $86.3 million in administrative and other third-party management fees resulting from higher average AUMAUM, andpartially offset by lower fund related costs. See "Schedule of Non-GAAP Information" for additional disclosures.

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, 20242024. asAfter compared to $567.6 millionallowing for theforeign yearexchange endedrate Decemberchanges, 31,General 2023.and administrative expenses decreased by $25.1 million. The increasedecrease 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 lowerhigher professional feescosts of $28.1$22.6 million.million in the year ended December 31, 2025 related to newly launched CIP.

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, 20242024. asThe comparedincrease was primarily due to $49.9 million for the year ended December 31, 2023. The year ended December 31, 2023 included a $1,248.9$1,794.9 million non-cash impairment of our indefinite-lived intangible assets related to management contracts of U.S. retail mutual funds.

Operating incomeloss was $832.1 million in the year ended December 31, 2024, as compared to an operating loss of $434.8$(695.7) million for the year ended December 31, 2023.2025, 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) increaseddecreased to 13.7%(10.9)% for the year ended December 31, 20242025 from (7.6)%13.7% in the year ended December 31, 2023.2024 Theprimarily operatingas lossa forresult of the year ended December 31, 2023 was primarily due to the $1,248.9$1,794.9 million intangible asset impairment as discussed above.

Equity in earnings of unconsolidated affiliates decreasedincreased to $104.8 million for the year ended December 31, 2025 as compared to $43.0 million for the year ended December 31, 2024 as compared to $71.3 million for the year ended December 31, 2023.2024. The decreaseincrease was primarily driven by aan decreaseincrease in income of $13.5$28.9 million from our private markets real estate investments and $27.7 million from our joint venture investment in IGW and $9.6 million from our private markets real estate investments.IGW.

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 as compared to $47.8 million for the year ended December 31, 2023.2024. The increasedecrease was primarily due to ana increasedecrease in dividend income earned on our private markets, deferred compensation and seed capital investments and higher interest income earned from Cash and cash equivalents.equivalents, partially offset by higher dividend income earned on our private markets investments.

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, 20242024. as compared to $70.5 million for theThe year ended December 31, 20232025 asincluded ainterest resultexpense ofrelated to the decreasenew inTerm outstandingLoan debt.Agreements entered into on May 16, 2025.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes thereto, which appear elsewhere in this Report. Except for the historical financial information, this Report may include statements that constitute “forward-looking statements” under the United States (U.S.) securities laws. Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow, capital expenditures, and AUM that could differ materially from actual results due to known and unknown risks and other important factors, including, but not limited to, industry or market conditions, geopolitical events including wars, global trade tensions, tariffs, natural disasters, and pandemics or health crises and their respective potential impact on the company, acquisitions and divestitures, debt and our ability to obtain additional financing or make payments, regulatory developments, demand for and pricing of our products, the prospects for certain legal contingencies, and other aspects of our business or general economic conditions. In addition, when used in this Report or such other documents or statements, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. None of this information should be considered in isolation from, or as a substitute for, historical financial statements.

The table below summarizes returns based on price appreciation/(depreciation) of several major market indices for the three and six months ended MarchJune 31,30, 2026 and 2025:

Our diversified platform, global scale, and breadth of products were integral to continued strongrecord net long-term inflows of $21.8$45.1 billion for the quarter, primarily driven by ETFs and Index, QQQ, China JV, Fundamental Fixed income, and Multi-Asset/Other.Private Markets. We also had $11.5$16.9 billion of net inflows into money market funds. Average AUM werewas $2.2$2.4 trillion for the quarter,second quarter of 2026, an increase of $338.1$471.4 billion,billion or 18%,24.8%, compared to the same quarter in the prior year. Ending AUM was $2.5 trillion reflecting year-over-year growth of 23.4%.

We remain prudent and diligent in our approach to capital management. Our priorities are balanced with a focus on supporting future growth and maintaining the strength of our balance sheet, while returningcontinuing excessto cashreturn capital to shareholders. During the quarter, the Board approved an increase in our quarterly dividend from $0.21 to $0.215 per share beginning with the dividend that will be paid to holders of common shares inIn the second quarterquarter, ofwe 2026.reduced debt by $342.7 million. Additionally, the company repurchased 1.61.9 million common shares for $40.0$50.0 million in the open market. On February 18, 2026, the Board authorized the repurchase of up to $1.0 billion of the company’s outstanding common stock with no stated time limit or expiration date. Also, we redeemed the $500.0 million of senior notes that matured on January 15, 2026.

The majority of the company’s CIP balances are related to collateralized loan obligations (CLOs).CLOs. 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 any of the CLO debt to be a company liability.

Summary operating information for three and six months ended MarchJune 31,30, 2026 and 2025 is presented in the table below:

(1) Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts (UITs),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%,33%, 35%33% and 34%32% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three and five year basis represents 46%,43%, 44%,41%, and 43%40% of total Invesco AUM as of 3/31/June 30, 2026. 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.

Movements in global capital market levels, net inflows (or outflows),levels and changes in the mix of investment productsAUM between and within asset classes and geographies may materially affect our revenues from period to period.

(1) For three and six months ended MarchJune 31,30, 2026, Net long-term flows include Invesco QQQ Trust’s (QQQ)QQQ’s flows due tofollowing its conversion to an open-end fund ETF on December 20, 2025. For the three and six months ended MarchJune 31,30, 2025, Net flows in non-management fee earning AUM include QQQ’s flows.

(2) U.S. GAAP gross revenue yield on AUM is equal to U.S. GAAP annualized total operating revenues divided by average AUM, excluding Invesco Great Wall Fund Management Company Limited’s (Invesco Great Wall or IGW) AUM. The average AUM for IGW in the three months ended March 31, 2026 is $142.3 billion (three months ended March 31, 2025: $96.5 billion). It is appropriate to exclude the average AUM of IGW as the revenues resulting from these AUM are not presented in our U.S. GAAP operating revenues. The U.S. GAAP gross revenue yield is not a good measure because 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.

(4) Net revenue yield is equal to Net revenues divided by Average AUM during the reporting period. For the three and six months ended MarchJune 31,30, 2026, QQQ’s net revenues and average AUM are included in the calculation of Net revenue yield. For the three and six months ended MarchJune 31,30, 2025, the calculation of Net revenue yield includes QQQ’s average AUM but does not include QQQ’s net revenues.

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 three and six months ended MarchJune 31,30, 2026 and 2025.

During the three and six months ended MarchJune 31,30, 2026, we experienced an increase in AUM of $0.7 billion and a decrease in AUM of $2.1$1.4 billion, respectively, due to changes in foreign exchange rates (three and six months ended MarchJune 31,30, 2025, AUM increased $7.4$14.0 billion and $21.4 billion, respectively).

(910) 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 sale of 60% of our interest in the entity on October 31, 2025 sale.2025.

Results of Operations for the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025

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 between 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 three and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 in the “Assets Under Management” section above for additional information. In addition, as fee rates differ across geographic locations, changes to the mix of AUM between geographies and exchange rates have an impact on revenues and net revenue yields.

Average AUM was $2,218.9$2,293.9 billion for the threesix months ended MarchJune 31,30, 2026 as compared to $1,880.8$1,889.1 billion for the threesix months ended MarchJune 31,30, 2025. 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 22.922.7 bps for the threesix months ended MarchJune 31,30, 2026 from 23.523.4 bps for the threesix months ended MarchJune 31,30, 2025.

Investment management fees were $1,382.2$1,461.8 million for the three months ended MarchJune 31,30, 2026 as compared to $1,100.3$1,100.9 million for the three months ended MarchJune 31,30, 2025. The impactincrease of foreign exchange rate movements increasedin Investment management fees bywas $26.6 million during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. After allowing for foreign exchange movements, Investment management fees increased by $255.3 millionprimarily driven by newQQQ’s investment management fees related to QQQ following its conversion to an open-end fund ETF and higher average AUM. See discussion above on how AUM changes impact our Investment management fees.

For the three months ended MarchJune 31,30, 2026, Service and distribution fees were $301.8$309.9 million as compared to $370.9$363.8 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily due to the elimination of QQQ's pass-through service revenues after its conversion and the sale of the intelliflo business in the fourth quarter of 2025.conversion.

For the three months ended March 31, 2026, Performance fees were $11.3$2.6 million asand compared to $3.5$6.1 million for the three and six months ended MarchJune 31,30, 20252025, respectively, and were earnedgenerated primarily from fundamental fixed income, private markets and multi-asset/other products.

For the three months ended MarchJune 31,30, 2026, Other revenues were $49.2$50.2 million as compared to $54.5$48.2 million for the three months ended MarchJune 31,30, 2025 due to lower transaction fees.2025.

Net revenues from IGW were $110.8$121.8 million and average AUM was $142.3$155.2 billion for the three months ended MarchJune 31,30, 2026 (Net revenues were $78.2$79.2 million and average AUM was $96.5$99.7 billion for the three months ended MarchJune 31,30, 2025). The increase in IGW revenues was primarily due to higher average AUM.

Investment management and Performance fees earned from CIP were $10.4$8.8 million for the three months ended MarchJune 31,30, 2026 (three months ended MarchJune 31,30, 2025: $10.3$10.6 million).

During the three months ended MarchJune 31,30, 2026, Operating expenses increased $159.4$160.1 million compared to the three months ended MarchJune 31,30, 2025. The impact of foreign exchange rate movements increased operating expenses by $24.0 million during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

Third-party distribution, service and advisory expenses were $601.4$627.1 million for the three months ended MarchJune 31,30, 2026 as compared to $509.0$500.7 million for the three months ended MarchJune 31,30, 2025. After allowing for foreign exchange rate changes, Third-party distribution, service and advisory expenses increased $82.1 million,2025, primarily due to the new third-party costs for QQQ and higher average AUM.

Employee compensation was $512.7$546.7 million for the three months ended MarchJune 31,30, 2026 as compared to $464.6$510.4 million for the three months ended MarchJune 31,30, 2025. After allowing for foreign exchange rate changes, Employee compensation expenses increased $38.9 million. The increase was primarily due to thehigher accelerationemployee variable compensation costs of $33.0$43.0 million ofprimarily expensedriven relatedby tohigher newly granted common share-based awardsrevenues and othera long-term awards to retirement-eligible employees and an $8.6$18.7 million increase related toin the mark-to-market adjustment on deferred compensation liabilities. These increases were partially offset by lower salaries of $12.4 million primarily due to the divestitures in the fourth quarter of 2025, and $16.9 million of severance expense related to the reorganization of the fundamental equities investment teams in the second quarter of 2025.

Headcount at MarchJune 31,30, 2026 was 7,4217,405 (MarchJune 31,30, 2025: 8,4958,407). 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 in the fourth quarter of 2025.

Marketing expenses were $37.4$36.7 million for the three months ended MarchJune 31,30, 2026 as compared to $17.0$23.1 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to higher advertising costs, including advertisingcosts for QQQ following its conversion to an open-end fund ETF.

Property, office and technology expenses were $104.6$109.3 million for the three months ended MarchJune 31,30, 2026 as compared to $113.9$118.2 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily due to loweran technology$8.0 costs.million software impairment in the second quarter of 2025 related to a strategic change to the company's fixed income investment platform.

General and administrative expenses were $147.1$280.6 million for the threesix months ended MarchJune 31,30, 2026 as compared to $137.3$276.5 million for the threesix months ended MarchJune 31,30, 2025. AfterExcluding allowingthe forimpact of foreign exchange movements, General and administrative expenses increasedwere $6.6relatively million.flat year-over-year, as the net benefit from the Canadian sale and restructuring discussed above was largely offset by higher professional fees.

Equity in earnings of unconsolidated affiliates increased to $34.0$35.1 million for the three months ended MarchJune 31,30, 2026 as compared to $19.6$25.0 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to higher earnings from our joint venture investment in IGW and private markets real estate investments.IGW.

Interest and dividend income was $9.2$9.9 million for the three months ended MarchJune 31,30, 2026 as compared to $11.3$10.5 million for the three months ended MarchJune 31,30, 2025.

Interest expense increased to $24.3$23.6 million for the three months ended MarchJune 31,30, 2026 from $13.1$20.7 million for the three months ended MarchJune 31,30, 2025, primarily due to higher borrowings on the Revolving Credit Agreement and the five-year Term Loan Agreement entered into in the second quarter of 2025,Agreement, which was partially offset by a reduction in interest expense following the redemption of the $500.0 million of senior notes which matured on January 15, 2026.

Other gains and losses, net was a lossgain of $0.4$105.8 million for the three months ended MarchJune 31,30, 2026 as compared to a net lossgain of $24.3$59.7 million for the three months ended MarchJune 31,30, 2025. The net lossgain for the three months ended MarchJune 31,30, 2026 was primarily duedriven toby gains from market value changes ofin deferred compensation related investments, hedging instruments and seed capital investments, partially offset by a $19.9 million gain on other investments.

For the three months ended MarchJune 31,30, 2026, Other income/(expense) of CIP, net was an expense of $51.5$36.0 million (three months ended MarchJune 31,30, 2025: netan incomeexpense of $74.1$14.3 million). Interest and dividend income of CIP increasedwas $18.0 million to $147.4$127.2 million (three months ended MarchJune 31,30, 2025: $129.4$124.2 million). Interest expense of CIP increasedwas $4.6 million to $104.3$92.5 million (three months ended MarchJune 31,30, 2025: $99.7$104.9 million). Unrealized gains/(losses) of CIP were a net loss of $94.6$70.7 million (three months ended MarchJune 31,30, 2025: net gainloss of $44.4$33.6 million).

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 threesix months ended MarchJune 31,30, 2026 and 2025. Also, the net income or loss of CIP is taxed at the investor level, not at the product level; therefore, aCIP does not impact the Income tax provision is not reflected in the net impact of CIP.provision.

Our effective tax rate increasedwas to 27.0%25.6% for the three months ended MarchJune 31,30, 2026 (three months ended MarchJune 31,30, 2025: 22.5%28.1%). The increasedecrease in the effective tax rate in the first quarter of 2026 was primarily due to the unfavorablefavorable impactsdiscrete tax benefit related to the gain recognized on the sale of the netmanagement lossagreements attributableassociated towith non-controllingInvesco's interestCanadian infund consolidatedbusiness entitiesand a reduction in the firstexpense for unrecognized tax benefits in the second quarter of 2026 and the change in the mix of income across tax jurisdictions, which was partially offset by the excess tax benefits related to the vestingfavorable resolution of commoncertain sharetax basedmatters, awardsincluding recognizeda intax matter resolved during the firstsecond quarter of 2026.