Adjusted operating expenses were $331 million, stable sequentially, with a decline in adjusted long-term incentives and an 8% increase in non-compensation expenses due to marketing, G&A, and acquisitions.
Adjusted revenue increased 2% sequentially and 9% year-over-year, driven by higher management fees on increased average AUM and improved mutual fund performance fees.
Assets under management (AUM) increased 23% to $457.3 billion, the highest quarterly AUM ever, driven by the Guardian partnership, market gains, and favorable currency adjustments.
Excluding Guardian, net flows remained positive despite market volatility, with 15 strategies including 4 ETFs each having at least $100 million of net inflows.
Investment performance improved meaningfully in the 1-year period, with at least two-thirds of assets beating benchmarks across 1-, 3-, 5-, and 10-year periods and over 70% of AUM in the top 2 Morningstar quartiles.
Janus Henderson delivered a solid second quarter 2025 with adjusted diluted EPS of $0.90, a 6% increase year-over-year.
Net inflows for the quarter were $46.7 billion, including $46.5 billion from Guardian's general account, marking the fifth consecutive quarter of positive net flows.
Net management fee margin was 47.5 basis points in Q2, down from the prior quarter due to mix shifts and one-time adjustments.
The adjusted operating margin was 33.5%, and the firm maintained a strong balance sheet with $900 million in cash and cash equivalents.
The company returned $202 million to shareholders in the first half of 2025 through dividends and share repurchases, reducing shares outstanding by over 22% since 2018.
Capital markets activity included a Fitch upgrade to BBB+ and a $450 million senior unsecured bond issuance at 5.25% coupon.
Cash same-store NOI growth for the quarter was 8.7%, driven by rental rate increases and contractual rent bumps, partially offset by lower average occupancy.
Guidance for full-year 2025 NAREIT FFO remains at a midpoint of $2.92 per share with a narrowed range of $2.88 to $2.96.
In-service occupancy at quarter end was 94.2%, down 110 basis points due to a known move-out and two developments entering service.
NAREIT funds from operations (FFO) were $0.76 per fully diluted share in 2Q 2025, up from $0.66 in 2Q 2024.
Overall cash rental rate increase for new and renewal leasing was 33%, or 38% excluding a large fixed-rate renewal.
Average deposits declined just over 1%, with non-interest bearing deposits stable at 38%.
Average loans grew almost 1% for the quarter and period-end loans increased approximately 3%.
Capitalization remained strong with an estimated CET1 ratio of 11.94%, well above the 10% strategic target.
Net charge-offs were 22 basis points, at the low end of the normal range and flat quarter-over-quarter.
Net interest income remained stable at $575 million for the third consecutive quarter.
Non-interest expenses decreased $23 million due to lower litigation expenses and salaries, with some offsetting increases in advertising and outside processing.
Non-interest income increased $20 million driven by higher loan volumes, capital markets income, and seasonal benefits.
Reported earnings per share of $1.42, a nearly 14% increase over the prior quarter.
Returned $193 million to shareholders through dividends and share repurchases, including $100 million in share repurchases in Q2.
Administrative expenses were $86 million, up 5% from prior year, representing 7.1% of premium.
Book value per share as of June 30 is $66.07 (GAAP) and $90.26 excluding AOCI, up 10% from a year ago.
Excess investment income was $35 million, down $8 million from a year ago; net investment income was $282 million, down 1%.
Health insurance premium revenue grew 8% to $378 million; health underwriting margin was down 2% to $98 million due to higher obligations at United American.
Invested assets totaled $21.5 billion, with $18.9 billion in fixed maturities, mostly investment grade rated A-.
Life Insurance premium revenue increased 3% to $840 million; life underwriting margin was $340 million, up 6%.
Net income for the second quarter was $253 million or $3.05 per share compared to $258 million or $2.83 per share a year ago.
Net operating income was $271 million or $3.27 per share, a 10% increase over $2.97 per share from a year ago.
Return on equity through June 30 is 18.8% on a GAAP basis and 14.4% excluding accumulated other comprehensive income (AOCI).
The fixed maturity portfolio has a net unrealized loss of approximately $1.6 billion due to higher market rates but is not a concern due to intent to hold to maturity.
Dafinchi