JANUS HENDERSON GROUP PLC (JHG)

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q not based on historical facts are “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (“Securities Act”). Such forward-looking statements involve known and unknown risks and uncertainties that are difficult to predict and could cause our actual results, performance or achievements to differ materially from those discussed. These include statements as to our future expectations, beliefs, plans, strategies, objectives, events, conditions, financial performance, prospects or future events. In some cases, forward-looking statements can be identified by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and similar words and phrases. Forward-looking statements are necessarily based on estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of the date they are made and are not guarantees of future performance. We do not undertake any obligation to publicly update or revise these forward-looking statements.

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Various risks, uncertainties, assumptions and factors that could cause our future results to differ materially from those expressed by the forward-looking statements included in this Quarterly Report on Form 10-Q include, but are not limited to, Janus Henderson’s ability to obtain the regulatory, shareholder and other approvals required to consummate the previously announced merger transaction (the “Proposed Transaction”) and the timing of the closing of the Proposed Transaction, including the risks that a condition to closing would not be satisfied within the expected timeframe or at all or that the closing of the Proposed Transaction would not occur, the outcome of any legal proceedings that may be instituted against the parties and others related to the merger agreement, that shareholder litigation in connection with the Proposed Transaction may affect the timing or occurrence of the Proposed Transaction or result in significant costs of defense, indemnification and liability, unanticipated difficulties or expenditures relating to the Proposed Transaction, including the impact of the Proposed Transaction on Janus Henderson’s business, that the Proposed Transaction generally may involve unexpected costs, liabilities or delays, that the business of the Company may suffer as a result of uncertainty surrounding the Proposed Transaction or the identity of the purchaser, that the Company may be adversely affected by other economic, business, and/or competitive factors, including the net asset value of assets in certain of the Company’s funds, and/or potential difficulties in employee retention as a result of the announcement and pendency of the Proposed Transaction, changes in interest rates and inflation, changes in trade policies, including the imposition of new or increased tariffs, changes to tax laws, volatility or disruption in financial markets, our investment performance as compared to third-party benchmarks or competitive products, redemptions and other withdrawals from the funds and accounts we manage, and other risks, uncertainties, assumptions and factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, and this Quarterly Report on Form 10-Q under headings such as “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk,” and in other filings or furnishings made by the Company with the SEC from time to time.

Business Overview

We are an independent global asset manager, specializing in active investment across all major asset classes. We actively manage a broad range of investment products for institutional and retail investors across four capabilities: Equities, Fixed Income, Multi-Asset and Alternatives. Our strategy is based on three strategic pillars — Protect & Grow, Amplify and Diversify — and is centered on the belief that a combination of relentless focus and disciplined execution across our core business will drive future success as a global active asset manager. Specifically, our strategy lays a strong foundation for sustained organic growth and opportunistic inorganic growth to create value for all of our stakeholders, including clients, shareholders and employees. We serve a diverse clientele worldwide, comprising intermediaries, institutional investors and self-directed clients. To cater to regional needs effectively, we maintain local presence across most markets and provide investment materials tailored to local customs, preferences and languages supported by our global distribution team.

Revenue

Revenue primarily consists of management fees, shareowner servicing fees and performance fees. Management fees are generally based on a percentage of the market value of our AUM and are calculated using either the daily, month-end or quarter-end average asset balance in accordance with contractual agreements. Accordingly, fluctuations in the financial markets have a direct effect on our operating results. Additionally, our AUM may outperform or underperform the financial markets and, therefore, may fluctuate in varying degrees from that of the general market.

Performance fees are specified in certain fund and client contracts and are based on investment performance either on an absolute basis or compared to an established index over a specified period of time. These fees are often subject to a high-water mark. Performance fees are recognized at the end of the contractual period (typically monthly, quarterly or annually) if the stated performance criteria are achieved. Certain fund contracts allow for negative performance fees where there is underperformance against the relevant index.

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FIRST QUARTER 2026 SUMMARY

First Quarter 2026 Highlights

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Financial Summary

Results are reported on a U.S. GAAP basis. Adjusted non-GAAP figures are presented in the Non-GAAP Financial Measures section below.

Revenue for the first quarter 2026 was $690.0 million, an increase of $68.6 million, or 11%, compared to the first quarter 2025. The key driver of the increase was:

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Total operating expenses for the first quarter 2026 were $576.1 million, an increase of $108.3 million, or 23%, compared to the first quarter 2025. Key drivers of the increase included:

Operating income for the first quarter 2026 was $113.9 million, a decrease of $39.7 million, or (26%), compared to the first quarter 2025. Our operating margin was 16.5% in the first quarter 2026 compared to 24.7% in the first quarter 2025.

Net income attributable to JHG for the first quarter 2026 was $90.9 million, a decrease of $29.8 million, or (25%), compared to the first quarter 2025. In addition to the aforementioned factors affecting revenue and operating expenses, key drivers of the variance included:

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Investment Performance of Assets Under Management

The following table is a summary of investment performance as of March 31, 2026:

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Assets Under Management

Our AUM as of March 31, 2026, was $479.6 billion, a decrease of $13.6 billion, or (3%), from December 31, 2025, driven primarily by unfavorable market performance of $15.5 billion. AUM includes assets for which we provide services and earn an a

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business Overview

We are an independent global asset manager, specializing in active investment across all major asset classes. We actively manage a broad range of investment products for institutional and retail investors across four capabilities: Equities, Fixed Income, Multi-Asset and Alternatives. Our strategy is based on three strategic pillars — Protect & Grow, Amplify and Diversify — and is centered on the belief that a combination of relentless focus and disciplined execution across our core business will drive future success as a global active asset manager. Specifically, our strategy lays a strong foundation for sustained organic growth and opportunistic inorganic growth to create value for all of our stakeholders, including clients, shareholders and employees. We serve a diverse clientele worldwide, comprising intermediaries, institutional investors and self-directed clients. To cater to regional needs effectively, we maintain local presence across most markets and provide investment materials tailored to local customs, preferences and languages supported by our global distribution team.

Segment Considerations

We are a global asset manager and manage a range of investment products, operating across various product lines, distribution channels and geographic regions. However, information is reported to the chief operating decision-maker, our Chief Executive Officer (“CEO”), on an aggregated basis. Strategic and financial management decisions are determined centrally by our CEO and, on this basis, we operate as a single-segment investment management business.

Revenue

Revenue primarily consists of management fees, shareowner servicing fees and performance fees. Management fees are generally based on a percentage of the market value of our AUM and are calculated using either the daily, month-end or quarter-end average asset balance in accordance with contractual agreements. Accordingly, fluctuations in the financial markets have a direct effect on our operating results. Additionally, our AUM may outperform or underperform the financial markets and, therefore, may fluctuate in varying degrees from that of the general market.

Performance fees are specified in certain fund and client contracts and are based on investment performance either on an absolute basis or compared to an established index over a specified period of time. These fees are often subject to an HWM. Performance fees are recognized at the end of the contractual period (typically monthly, quarterly or annually) if the stated performance criteria are achieved. Certain fund contracts allow for negative performance fees where there is underperformance against the relevant index.

2025 SUMMARY

2025 Highlights

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Proposed Merger

On December 21, 2025, we entered into the Merger Agreement, with Parent and Merger Sub. The Merger Agreement provides that, among other things, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into JHG in accordance with the Companies Law, with JHG surviving the Merger as a wholly owned subsidiary of Parent. Under the terms of the agreement, shareholders of the Company will receive $49.00 per share of common stock in cash for each ordinary share not already owned or controlled by Trian. The Merger is expected to close in mid-2026, subject to customary closing conditions, including receipt of required regulatory approvals, client consents and approval by the Company’s shareholders. See the section entitled “Risks Relating to the Proposed Merger” in Part I, Item 1A. Risk Factors of this report for further discussion about the risks related to the Merger.

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Financial Summary

Results are reported on a U.S. GAAP basis. Adjusted non-GAAP figures are presented in the Non-GAAP Financial Measures section.

Revenue for the year ended December 31, 2025, was $3,097.3 million, an increase of $624.1 million, or 25%, compared to the year ended December 31, 2024. The key drivers of the increase were:

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​Total operating expenses for the year ended December 31, 2025, were $2,120.5 million, an increase of $293.0 million, or 16%, compared to operating expenses for the year ended December 31, 2024. Key drivers of the increase include the following:

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Operating income for the year ended December 31, 2025, was $976.8 million, an increase of $331.1 million, or 51%, compared to the year ended December 31, 2024. Our operating margin was 31.5% in 2025 compared to 26.1% in 2024.

Net income attributable to JHG for the year ended December 31, 2025, was $815.9 million, an increase of $407.0 million, or 100%, compared to the year ended December 31, 2024. In addition to the aforementioned factors affecting revenue and operating expenses, key drivers of the variance include the following:

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Investment Performance of Assets Under Management

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The following table is a summary of our investment performance as of December 31, 2025:

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Assets Under Management

Our AUM as of December 31, 2025, was $493.2 billion, an increase of $114.5 billion, or 30%, from December 31, 2024, driven primarily by the addition of $46.5 billion of predominantly investment-grade public fixed income assets from Guardian Life Insurance Company of America’s (“Guardian”) general account and favorable market performance of $49.7 billion. AUM includes assets for which we provide services and earn an asset-based fee, even though we do not act as the investment advisor.

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Our non-USD AUM is primarily denominated in GBP, EUR and AUD. During the year ended December 31, 2025, the USD weakened against GBP, EUR and AUD, resulting in an $8.3 billion increase in our AUM. As of December 31, 2025, approximately 24% of our AUM was non-USD-denominated.

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Our AUM and flows by capability for the years ended December 31, 2025, 2024 and 2023, were as follows (in billions):

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Our AUM and flows by client type for the years ended December 31, 2025, 2024 and 2023, were as follows (in billions):

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Average Assets Under Management

The following table presents our average AUM by capability for the years ended December 31, 2025, 2024 and 2023 (in billions):

Closing Assets Under Management

The following table presents our closing AUM by client location, as of December 31, 2025, 2024 and 2023 (in billions):

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Valuation of Assets Under Management

The fair value of our AUM is based on the value of the underlying cash and investments securities of our funds, trusts and segregated mandates. A significant proportion of these securities is listed or quoted on a recognized securities exchange or market and is regularly traded thereon; these investments are valued based on unadjusted quoted market prices. However, for non-U.S. equity securities held by U.S. mutual funds, excluding ETFs, the quoted market prices may be adjusted to capture market movement between the time the local market closes and the NYSE closes. Other investments, including OTC derivative contracts (which are dealt in or through a clearing firm, exchanges or financial institutions), are valued by reference to the most recent official settlement price quoted by the appointed market vendor, and in the event no price is available from this source, a broker quotation may be used. Physical property held is valued monthly by a specialist independent appraiser.

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When a readily ascertainable market value does not exist for an investment, the fair value is calculated using a variety of methodologies, including the expected cash flows of its underlying net asset base, taking into account applicable discount rates and other factors; comparable securities or relevant indices; recent financing rounds; revenue multiples; or a combination thereof. Judgment is used to ascertain if a formerly active market has become inactive and to determine fair values when markets have become inactive. Our Fair Value Pricing committees are responsible for determining or approving these unquoted prices, which are reported to those charged with governance of the funds and trusts. For funds that invest in markets that are closed at their valuation point, an assessment is made daily to determine whether a fair value pricing adjustment is required to the fund’s valuation. This may be due to significant market movements in other correlated open markets, scheduled market closures or unscheduled market closures as a result of natural disaster or government intervention.

Our private credit investments are valued using a variety of methodologies and approaches, including the market approach and the income approach, which in many cases leverage unobservable inputs and assumptions, depending on the nature of the investment.

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Third-party administrators hold a key role in the collection and validation of prices used in the valuation of the securities. Daily price validation is completed using techniques such as day-on-day tolerance movements, invariant prices, excessive movement checks and intra-vendor tolerance checks. Our data management team performs oversight of this process and completes annual due diligence on the processes of third parties.

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In other cases, we and the sub-administrators perform a number of procedures to validate the pricing received from third-party providers. For actively traded equity and fixed income securities, prices are received daily from both a primary and secondary vendor. Prices from the primary and secondary vendors are compared to identify any discrepancies. In the event of a discrepancy, a price challenge may be issued to both vendors. Securities with significant day-to-day price changes require additional research, which may include a review of all news pertaining to the issue and issuer, and any corporate actions. All fixed income prices are reviewed by our fixed income trading desk to incorporate market activity information available to our traders. In the event the traders have received price indications from market makers for a particular issue, this information is transmitted to the pricing vendors.

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We leverage the expertise of our fund management teams across the business to cross-invest assets and create value for our clients. Where cross investment occurs, assets and flows are identified, and the duplication is removed.

Results of Operations

Foreign Currency Translation

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Foreign currency translation impacts our Results of Operations. Revenue is impacted by foreign currency translation, but the impact is generally determined by the primary currency of the individual funds. Expenses are also impacted by foreign currency translation, primarily driven by the translation of GBP to USD. The GBP strengthened against the USD during the year ended December 31, 2025, compared to the year ended December 31, 2024, and the GBP weakened against the USD during the year ended December 31, 2024, compared to the year ended December 31, 2023. Meaningful foreign currency translation impacts to our operating expenses are discussed in the Operating Expenses section below.

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Revenue

* n/m - Not meaningful. ​

Management fees

Management fees increased by $210.6 million for the year ended December 31, 2025, compared to the same period in 2024. The increase was primarily due to higher average AUM, partially offset by a reduction in fee margins driven by lower fixed income fee margins primarily due to the Guardian assets.

Management fees increased by $257.6 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to an improvement in average AUM.

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Average net management fee margins, by capability, consisted of the following for the years ended December 31, 2025, 2024 and 2023:

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Performance fees

Performance fees are derived across a number of product ranges. U.S. mutual fund performance fees are recognized on a monthly basis, while all other performance fees are recognized on a quarterly or annual basis. The investment management fee paid by each U.S. mutual fund subject to a performance fee is the base management fee plus or minus a performance fee adjustment, as determined by the relative investment performance of the fund, over a 36-month rolling period, compared to a specified benchmark index. Performance fees by product type consisted of the following for the years ended December 31, 2025, 2024 and 2023:

​* n/m - Not meaningful.

Performance fees increased by $389.6 million for the year ended December 31, 2025, compared to the same period in 2024, primarily due to an increase in the annual performance fees generated from certain hedge funds and due to improved performance of U.S. mutual funds.

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Performance fees increased by $65.3 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to an improvement in the performance of U.S. mutual funds, SICAVs and hedge funds and other funds.

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The following table outlines performance fees by product type and includes information on fees earned, number of funds generating performance fees, AUM generating performance fees, number of funds eligible to earn performance fees, AUM with an uncrystallized performance fee, performance fee participation rate, performance fee frequency and performance fee methodology (dollars in millions, except where noted):

Shareowner servicing fees

Shareowner servicing fees, which primarily consist of U.S. mutual fund servicing fees tied to AUM, increased by $16.6 million for the year ended December 31, 2025, compared to the same period in 2024, primarily due to higher average mutual fund AUM, partially offset by a reduction in fee margins driven by product mix shift.

Shareowner servicing fees increased by $27.4 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to an improvement in average mutual fund AUM.

Other revenue

Other revenue is primarily composed of 12b-1 distribution fees, general administration charges and other fee revenue. General administration charges include reimbursements from funds for various fees and expenses paid for by the investment manager on behalf of the funds. Other revenue increased by $7.3 million during the year ended December 31, 2025, compared to the same period in 2024. The increase was primarily due to an improvement in average AUM, partially offset by a reduction in fee margins driven by product mix shift.

Other revenue increased by $21.1 million during the year ended December 31, 2024, compared to the same period in 2023, primarily due to an improvement in average AUM.

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Operating Expenses

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* n/m - Not meaningful.

Employee compensation and benefits

Employee compensation and benefits increased by $156.0 million for the year ended December 31, 2025, compared to the same period in 2024. The increase was primarily attributable to an increase of $109.8 million in variable compensation, mainly due to higher profitability and redundancy expense, a $35.7 million increase in fixed compensation costs due to higher average headcount following acquisitions completed in 2024, $11.6 million of base-pay increases and unfavorable foreign currency translation of $9.9 million. These increases were partially offset by a $5.9 million reduction in project charges, driven by higher capitalization of internal labor costs related to certain projects, and a $5.1 million decrease in temporary staffing charges.

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Employee compensation and benefits increased by $122.8 million for the year ended December 31, 2024, compared to the same period in 2023. The increase was primarily driven by an increase of $95.0 million in variable compensation, mainly due to higher profitability, an $11.8 million increase in fixed compensation costs due to higher average headcount, $9.6 million of base-pay increases and unfavorable foreign currency translation of $6.1 million.

Long-term incentive plans

Long-term incentive plan expenses increased by $17.1 million for the year ended December 31, 2025, compared to the same period in 2024. The increase was primarily due to a $12.4 million increase driven by market appreciation of mutual fund share awards and a $5.4 million increase related to the roll-on of new awards and accelerated expense recognition for departed employees, which exceeded the impact of vested awards roll-offs and forfeitures.

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Long-term incentive plan expenses decreased by $0.8 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to a decrease of $8.3 million for the roll-off of vested awards and the forfeiture of awards related to departed employees exceeding the roll-on of new awards and the acceleration of expense related to departed employees. This decrease was partially offset by an increase of $6.4 million driven by market appreciation of mutual fund share awards and certain long-term incentive awards.

Distribution expenses

Distribution expenses are paid to financial intermediaries for distributing and servicing our retail investment products and are typically calculated based on the amount of the intermediary-sourced AUM. Distribution expenses increased by $35.4 million for the year ended December 31, 2025, compared to the same period in 2024, primarily due to higher average AUM subject to distribution charges, partially offset by an improvement in distribution fee margins driven by product mix shift.

Distribution expenses increased by $65.0 million during the year ended December 31, 2024, compared to the same period in 2023, primarily due to an improvement in average AUM subject to distribution charges.

Investment administration

Investment administration expenses, which represent fund administration and fund accounting, increased by $10.6 million for the year ended December 31, 2025, compared to the same period in 2024, and by $10.8 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to contractual changes with a third-party vendor.

Marketing

Marketing expenses increased by $6.5 million for the year ended December 31, 2025, compared to the same period in 2024, and by $3.8 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to higher spending on sponsored events and advertising campaigns.

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General, administrative and occupancy

General, administrative and occupancy expenses increased by $47.5 million for the year ended December 31, 2025, compared to the same period in 2024. The increase was primarily due to a $14.9 million increase in the amortization of capitalized cloud computing costs, primarily related to accelerated amortization driven by the strategic decision in the third quarter of 2025 to transition our investment management platform to Aladdin. Other contributing factors include higher charitable contributions ($5.7 million), market data costs ($5.3 million), insurance reimbursements ($4.7 million recognized in 2024, compared to $1.1 million recognized in 2025) and rent-related expenses ($2.9 million). The remaining variance was not driven by any individually significant factors.

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General, administrative and occupancy expenses increased by $6.2 million for the year ended December 31, 2024, compared to the same period in 2023. The increase was primarily due to a $8.2 million increase in the amortization of capitalized cloud computing costs, primarily related to the order management system transformation project, which was completed in the second quarter of 2023, a $7.7 million increase in legal and professional fees primarily due to consultancy fees related to certain acquisition and other project costs, and a $4.2 million increase in hardware and software licensing costs. These increases were partially offset by a $9.3 million charge related to a separately managed account trade error recognized during 2023 and a subsequent insurance reimbursement of $4.7 million recognized during 2024.

Impairment of assets

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Asset impairment charges increased by $8.1 million for the year ended December 31, 2025, compared to the same period in 2024. Certain capitalized costs were impaired as a result of a strategic decision in 2025 to transition our investment management platform to Aladdin. Capitalized costs are recorded within other non-current assets in our Consolidated Balance Sheets.

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Depreciation and amortization

Depreciation and amortization expenses increased by $11.8 million for the year ended December 31, 2025, compared to the same period in 2024, primarily due to the amortization of intangible assets related to the acquisition of a controlling interest in VPC in the fourth quarter 2024.

Depreciation and amortization expenses increased by $1.6 million for the year ended December 31, 2024, compared to the same period in 2023. There were no significant movements contributing to the year-over-year variance.

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Non-Operating Income and Expenses

* n/m - Not meaningful. ​

Interest expense

Interest expense increased by $6.2 million for the year ended December 31, 2025, compared to the same period in 2024, and by $5.3 million for the year ended December 31, 2024, compared to the same period in 2023. The increases were primarily due to higher interest expense on the 5.450% Senior Notes due 2034 (“2034 Senior Notes”), which were issued in the fourth quarter of 2024, compared to interest expense on the 4.875% Senior Notes due 2025 (“2025 Senior Notes”), which were redeemed in the fourth quarter of 2024. Proceeds from the 2034 Senior Notes were used to redeem the 2025 Senior Notes.

Investment gains, net

The components of investment gains, net for the years ended December 31, 2025, 2024 and 2023, were as follows:

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Investment gains, net improved by $76.1 million during the year ended December 31, 2025, compared to the same period in 2024, and improved by $27.4 million during the year ended December 31, 2024, compared to the same period in 2023. These changes were primarily driven by the consolidation and deconsolidation of third-party ownership interests in seeded investment products, as well as fair value adjustments related to the investment products. Investment gains, net for the year ended December 31, 2025, was also impacted by an $18.1 million favorable fair value adjustment on investments related to our deferred equity plan. In addition, a $12.5 million charge due to a correction of an error of previously recognized earnings associated with an equity method investment impacted investment gains, net for the year ended December 31, 2023.

​Gains and losses attributable to third-party ownership interests in seeded investment products are noncontrolling interests and are not included in net income attributable to JHG.

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Other non-operating income (expense), net

Other non-operating income (expense), net improved by $140.4 million for the year ended December 31, 2025, compared to the same period in 2024. The improvement was primarily driven by a $136.7 million benefit in the year-over-year change in the reclassification of accumulated foreign currency translation adjustments to net income from liquidated JHG entities, and a $24.4 million favorable fair value adjustment on acquisition-related contingent consideration. These increases were partially offset by a $9.5 million unfavorable fair value adjustment on a warrant and option, and an $8.0 million decrease in interest income, primarily due to lower interest rates on cash balances.

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Other non-operating income (expense), net declined by $99.2 million for the year ended December 31, 2024, compared to the same period in 2023. The decrease was primarily due to a year over year change of $133.4 million in the reclassification of accumulated foreign currency translation adjustments to net income related to liquidated JHG entities. This decrease was partially offset by a $13.4 million provision for a credit loss and an $11.9 million contingent consideration fair value adjustment, both recognized during 2023, and an $8.8 million increase in interest income primarily driven by higher interest rates on cash balances.

Income tax provision

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Our effective tax rates for the years ended December 31, 2025, 2024 and 2023, were as follows:

The change in the effective tax rate for the year ended December 31, 2025, compared to the same period in 2024, was primarily attributable to the absence of certain non-deductible items recognized in the prior year. The 2024 effective tax rate included the impact of the reclassification of accumulated foreign currency translation adjustments to net income from liquidated JHG entities, which were treated as non-deductible for tax purposes. The 2025 effective tax rate was further impacted by disallowed noncontrolling interest associated with seeded investment products.

The effective tax rate for the year ended December 31, 2024, compared to the same period in 2023, was impacted by the reclassification of accumulated foreign currency translation adjustments to net income from liquidated JHG entities that are treated as non-deductible for tax purposes. The effective tax rate for the year ended December 31, 2023, was also impacted by a reduction in the state income tax rate. As a result of the reduction in the state income tax rate, the U.S. deferred tax assets and liabilities were revalued from 23.9% to 23.5% creating a non-cash deferred tax benefit of $8.8 million.

On July 4, 2025, U.S. President Donald Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). The OBBBA includes changes to certain corporate income tax provisions, including the capitalization of research and development expenditures, limitations on interest expense deductibility, and accelerated depreciation for qualified fixed assets. In accordance with ASC 740, we recognized the effects of the enacted provisions in the period of enactment to the extent of applicable for the year ended December 31, 2025. The impact of these provisions was not material to our effective tax rate or cash flows.

The Organization for Economic Co-operation and Development (“OECD”) has issued a framework establishing a global minimum corporate income tax of 15% applicable to certain multinational enterprises (Pillar 2). Various components of Pillar 2 became effective beginning January 1, 2024, with additional provisions effective January 1, 2025.

In the United Kingdom, the Finance (No. 2) Act 2023, enacted on June 30, 2023, introduced a global minimum effective tax rate of 15%, including a qualified domestic minimum top-up tax and a multinational top-up tax, applicable to accounting periods beginning on or after December 31, 2023. Although the United States has not enacted legislation to implement Pillar 2, certain jurisdictions in which the company operates have enacted or are in the process of implementing similar legislation.

As of December 31, 2025, the impact of Pillar 2 on our effective tax rate, results of operations, financial position, and cash flows was not significant to the consolidated financial statements.

Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. However, we evaluate our profitability and our ongoing operations using additional non-GAAP financial measures that exclude costs or benefits that are not part of our ongoing operations. These measures are not in accordance with, or a substitute for, GAAP, and our financial measures may be different from non-GAAP financial measures used by other companies. Management uses these performance measures to evaluate the business, and adjusted values are consistent with internal management reporting. We have provided a reconciliation below of our non-GAAP financial measures to the most directly comparable GAAP measures.

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Alternative performance measures

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The following is a reconciliation of revenue, operating expenses, operating income, net income attributable to JHG and diluted earnings per share to adjusted revenue, adjusted operating expenses, adjusted operating income, adjusted net income attributable to JHG and adjusted diluted earnings per share, respectively, for the years ended December 31, 2025, 2024 and 2023 (in millions, except per share and operating margin data):

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Liquidity and Capital Resources

Our capital structure, together with available cash balances, cash flows generated from operations, and further capital and credit market activities, if necessary, provides us with sufficient resources to meet present and future cash needs, including operating and other obligations as they fall due and anticipated future capital requirements. The following table summarizes key balance sheet data relating to our liquidity and capital resources as of December 31, 2025 and 2024 (in millions):

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Cash and cash equivalents primarily consist of cash held at banks, on-demand deposits, investments in money market instruments, highly liquid short-term debt securities and commercial paper with a maturity date of three months or less. Cash and cash equivalents exclude cash held by consolidated variable interest entities (“VIEs”) and consolidated voting rights entities (“VREs”), and investments exclude noncontrolling interests as these assets are not available to us for general corporate purposes.

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Investments held by us represent seeded investment products (exclusive of noncontrolling interests), investments related to deferred compensation plans and other less significant investments classified as current assets in our Consolidated Balance Sheets.

We believe that existing cash and cash equivalents and cash flows from operations will be sufficient to meet our liquidity needs through the expected closing date (mid-2026) of the Merger Agreement. In connection with the Merger, we have incurred, and expect to continue incurring, Merger-related costs, however, we do not expect them to materially affect our ability to fund operations prior to closing the Merger. The Merger Agreement includes customary interim operating covenants that restrict, subject to certain exceptions, our ability to incur additional indebtedness, declare dividends, repurchase shares of common stock or make capital expenditures, among other things, without consent. These restrictions did not materially impact our liquidity during the year ended December 31, 2025, and are not expected to constrain our ability to operate in the ordinary course prior to the closing of the Merger.

If the Merger Agreement is terminated, under certain circumstances specified in the Merger Agreement, we would be required to pay a termination fee equal to $297,130,000 (or, if the Merger Agreement is terminated due to a failure of our shareholders to approve the Merger at the shareholder's meeting, we would be required to reimburse Parent for expenses incurred by or on Parent's behalf, up to the an amount not to exceed $111,420,000). If the Merger Agreement is terminated and payment of the termination fee is required, we expect to continue to have sufficient liquidity to fund our operations and meet obligations for the foreseeable future.

Cash Flows

A summary of cash flow data for the years ended December 31, 2025, 2024 and 2023, was as follows (in millions):

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Operating Activities

Fluctuations in operating cash flows are attributable to changes in net income and working capital items, which can vary from period to period based on the amount and timing of cash receipts and payments.

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Investing Activities

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Cash used for investing activities for the years ended December 31, 2025, 2024 and 2023, was as follows (in millions):

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We consolidate certain seeded investment products into our group financial statements. The purchases and sales of investments within consolidated seeded investment products are disclosed separately from our capital contributions to seed a product. We also maintain an economic hedge program that uses derivative instruments to mitigate against market exposure of certain seeded investments. The cash received and paid as part of this program is reflected in the table above.

We periodically add new investment strategies to our investment product offerings by providing the initial cash investment or seeding in a product. The primary purpose of seeded investment products is to generate an investment performance track record in these products and leverage that track record to attract third-party investors. We may redeem our seed capital investments for a variety of reasons, including when third-party investments in the relevant product are sufficient to sustain the investment strategy. The cash associated with seeding and redeeming seeded investment products is reflected in the above table as purchases of investments, net.

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The transactions discussed above represent a majority of the activity within investing activities on our Consolidated Statements of Cash Flows. Additionally, for the years ended December 31, 2025 and 2024, cash used for investing activities was also driven by acquisitions. Refer to Note 3 — Acquisitions and Dispositions, in Part II, Item 8, Financial Statements and Supplementary Data, for further information on our acquisitions.

Financing Activities

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Cash used for financing activities for the years ended December 31, 2025, 2024 and 2023, was as follows (in millions):

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The majority of cash flows within financing activities were driven by third-party capital invested into consolidated seeded investment products, net, payment of dividends to shareholders and the purchase of common stock as part of the Corporate Buyback Programs and for stock-based compensation plans. For the year ended December 31, 2024, cash flows within financing activities were also driven by the repayment of the 2025 Senior Notes and the issuance of the 2034 Senior Notes.

Third-party capital invested into consolidated seeded investment products, net represents the cash received from third-party investors in a seeded investment product that is consolidated into our group financial statements. When a third-party investor redeems the investment, a cash outflow is disclosed as a distribution.

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Other Sources of Liquidity

At December 31, 2025, we had a $200 million unsecured, revolving credit facility (“Credit Facility”). The Credit Facility includes an option for us to request an increase to our borrowing capacity under the Credit Facility of up to an additional $50.0 million. The maturity date of the Credit Facility is June 30, 2030.

As part of the Merger Agreement, our borrowings under the Credit Facility may not exceed $75 million absent consent from the Parent.

The Credit Facility may be used for general corporate purposes and bears interest on borrowings outstanding at the relevant interbank offer rate plus a spread.

The Credit Facility contains a financial covenant related to our long-term credit rating and financing leverage. If our long-term credit rating falls below a predefined threshold, our financing leverage ratio cannot exceed 3.00x EBITDA. At the latest practicable date before the date of this report, our credit rating was at or above the threshold established by the Credit Facility, and there were no borrowings under the Credit Facility. Refer to Note 11 — Debt, in Part II, Item 8, Financial Statements and Supplementary Data, for further information on the Credit Facility.

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Regulatory Capital

We are subject to regulatory oversight by the SEC, FINRA, CFTC, FCA and other international regulatory bodies. We strive to ensure that we are compliant with our regulatory obligations at all times. Our primary capital requirement relates to the FCA-supervised regulatory group (a sub-group of our company), comprising Janus Henderson (UK) Holdings Limited, all of its subsidiaries and Janus Henderson Investors International Limited (“JHIIL”). JHIIL is included as a connected undertaking to meet the requirements of the Investment Firm Prudential Regime (“IFPR”) for MiFID investment firms (“MIFIDPRU”). The combined capital requirement is £155.1 million ($208.6 million), resulting in £309.8 million ($416.7 million) of capital above the requirement as of December 31, 2025, based upon internal calculations and taking into account the effect of foreseeable dividends. Capital requirements in other jurisdictions are not significant in aggregate. The FCA-supervised regulatory group is also subject to liquidity requirements and holds a sufficient surplus above these requirements.

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Contractual Obligations

Contractual obligations and associated maturities relate to debt, interest payments and finance and operating leases. As of December 31, 2025, our contractual obligations related to debt and interest payments totaled $589.5 million, with $21.8 million of interest payable within 12 months. As of December 31, 2025, we had operating and finance lease payment obligations of $131.1 million, with $18.5 million payable within 12 months.

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Short-Term Liquidity Considerations

Common Stock Purchases — Corporate Buyback Program

On May 1, 2024, our Board of Directors approved the 2024 Corporate Buyback Program under which we were authorized to repurchase up to $150.0 million of our common stock, and on October 30, 2024, our Board of Directors approved an incremental share buyback authorization to repurchase up to an additional $50.0 million of our common stock at any time prior to the date of our 2025 Annual General Meeting of Shareholders, which was held on April 30, 2025. As of April 30, 2025, cumulative shares of common stock repurchased under the 2024 Corporate Buyback Program were 3,778,622 shares of common stock for $146.8 million.

On April 30, 2025, our Board of Directors approved the 2025 Corporate Buyback Program under which we were authorized to repurchase up to $200.0 million of our common stock at any time prior to the date of our 2026 Annual General Meeting of Shareholders. Repurchases under the 2025 Corporate Buyback Program may be effected through a variety of methods, including open market repurchases in compliance with Rule 10b-18 under the Exchange Act (including through the use of trading plans intended to comply with Rule 10b5-1 under the Exchange Act), privately-negotiated transactions, accelerated stock repurchase plans, block purchases or other similar purchase techniques. We are not obligated to repurchase any specific number of shares, and the timing and actual number of shares of common stock repurchased will depend on a variety of factors, including our stock price, general economic, business and market conditions and other relevant factors. There can be no assurance as to the timing or number of shares of any repurchases in the future. As of December 31, 2025, cumulative shares of common stock repurchased under the 2025 Corporate Buyback Program were 3,482,204 for $142.7 million.

As part of the Merger Agreement, common stock repurchases under the 2025 Corporate Buyback Program have been suspended during the period from the date of the Merger Agreement until the earlier of the closing of the Merger or the termination of the Merger Agreement.

Common Stock Purchases — Share Plan Purchases

On May 1, 2024, our Board of Directors approved the repurchase of up to 5,000,000 additional shares of common stock to make grants to executives and employees at any time prior to the date of our 2025 Annual General Meeting of Shareholders, which was held on April 30, 2025. As of April 30, 2025, cumulative shares of common stock repurchased under the 2024 Share Plan Repurchases were 250,001 shares of common stock for $8.6 million.

On April 30, 2025, our Board of Directors approved the repurchase of up to 6,000,000 additional shares of common stock to make grants to executives and employees at any time prior to the date of our 2026 Annual General Meeting of Shareholders. As of December 31, 2025, cumulative shares of common stock repurchased under the 2025 Share Plan Repurchases were 2,500,200 for $92.3 million.

As part of the Merger Agreement, common stock repurchases under the Share Plan Repurchases have been suspended during the period from the date of the Merger Agreement until the earlier of the closing of the Merger or the termination of the Merger Agreement.

Dividends

The payment of cash dividends is within the discretion of our Board of Directors and depends on many factors, including, but not limited to, our results of operations, financial condition, capital requirements, general business conditions and legal requirements.

Dividends declared and paid during the year ended December 31, 2025, were as follows:

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As part of the Merger Agreement, we have suspended any quarterly dividends that would otherwise be declared and paid on our common stock during the period from the date of the Merger Agreement through the earlier of the closing of the Merger or the termination of the Merger Agreement.

Long-Term Liquidity Considerations

Given the Merger Agreement, our long-term liquidity considerations are focused on maintaining sufficient liquidity to operate in ordinary course through the expected closing date of the Merger (mid-2026).

Off-Balance Sheet Arrangements

As of December 31, 2025, we had no off-balance sheet arrangements.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.

We continually evaluate the accounting policies and estimates used to prepare the consolidated financial statements. In general, management’s estimates are based on historical experience, information from third-party professionals, as appropriate, and various other assumptions that are believed to be reasonable under current facts and circumstances. Actual results could differ from those estimates made by management. The critical accounting policies and estimates management considers critical to understanding the consolidated financial statements relate to the areas of consolidated investment products, investments, goodwill and intangible assets, retirement benefit plans and income taxes. These policies and estimates are considered critical because they have a material impact, or are reasonably likely to have a material impact, on the Company’s consolidated financial statements because they require management to make significant judgments, assumptions or estimates. For additional information about our accounting policies, see Note 2 — Summary of Significant Accounting Policies, in Part II, Item 8, Financial Statements and Supplementary Data.

Consolidated Investment Products

We consolidate our seeded investment products in which we have a controlling financial interest. We have a controlling financial interest when we own a majority of the VRE or we are the primary beneficiary of a VIE. Assessing whether a product is a VIE or a VRE involves judgment and analysis on a structure-by-structure basis. Factors considered in this assessment include the product’s legal organization, the product’s capital structure and equity ownership, and the nature and extent of our involvement with the product. We consolidate seeded investment products accounted for as VREs when we are considered to control such products, which generally exists if we have a greater than 50% voting equity interest. We consolidate a VIE if we are the VIE’s primary beneficiary, which requires judgment in determination. The primary beneficiary of a VIE is defined as the variable interest holder that has a controlling financial interest in the VIE. A controlling financial interest is defined as (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses of the product or the right to receive benefits from the product that potentially could be significant to the VIE. VIEs are generally subject to consolidation by us when we hold an economic interest of greater than 9% and we deconsolidate such VIEs once equity ownership falls at or below 9%. VIEs are also subject to specific disclosure requirements. See Note 4 — Consolidation, in Part II, Item 8, Financial Statements and Supplementary Data, for more information.

Accounting for Goodwill and Intangible Assets

The recognition and measurement of goodwill and intangible assets require significant management estimates and judgment, including the valuation and expected life determination in connection with the initial purchase price allocation and the ongoing evaluation for impairment. The initial estimated fair value of indefinite-lived and definite-lived intangible assets is based on the present value of estimated future cash flows attributable to the agreements and contracts. Significant assumptions used to determine estimated fair value include AUM, investment management fee rates, discount rates, and expenses. The estimated fair value of trade names is determined using the relief from royalty on the present value of estimated future cash flows. Significant assumptions used to determine fair value align with the aforementioned assumptions for indefinite lived and definite lived intangible assets, however, assumptions also include the royalty rate to determine the estimated fair value of trade names. We believe the assumptions used to determine the estimated fair value are reasonable, however, they are inherently uncertain and unpredictable and thus they may differ from actual results.

Goodwill represents the excess of cost over the fair value of the identifiable net assets of acquired businesses and is not amortized.

Indefinite-lived intangible assets primarily represent investment management agreements and trademarks. Investment management agreements without a contractual termination date are classified as indefinite-lived intangible assets based upon the following: (i) there is no legal or statutory limitation on the contract period to manage these investment products; (ii) we expect to, and have the ability to, operate these investment products indefinitely; (iii) the investment products have multiple investors and are not reliant on an individual investor or small group of investors for their continued operation; (iv) the current competitive environment does not indicate a finite life; and (v) there is a high likelihood of continued renewal based on historical experience. The assumption that investment management agreements are indefinite lived assets is reviewed at least annually or more frequently if facts and circumstances indicate that the useful life is no longer indefinite.

Definite-lived intangible assets represent certain other investment management contracts, relationships and trademarks, which are amortized over their estimated lives using the straight-line method.

Impairment Assessment

Goodwill and indefinite-lived intangible assets are reviewed for impairment annually or more frequently if changes in circumstances indicate that the carrying value may be impaired. We perform our annual impairment assessment of goodwill and indefinite-lived intangible assets as of October 1. If the fair value of the sole reporting unit or intangible asset is less than the carrying amount, an impairment is recognized. Any impairment is recognized immediately through net income and cannot subsequently be reversed.

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We performed our annual assessment as of October 1, 2025. We initially assess goodwill for impairment using qualitative factors to determine whether it is necessary to perform a quantitative impairment test. As part of our qualitative test, along with considering macroeconomic conditions and the unadjusted book value per share, we performed a quantitative calculation to estimate the enterprise value of the reporting unit, comparing it to the carrying value of the reporting unit. The results of the goodwill assessment revealed it is more likely than not that the estimated fair value of the reporting unit was greater than the carrying value as of October 1, 2025. The most significant inputs into the enterprise value assessment are our stock price.

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We also assessed the indefinite-lived intangible assets for impairment as of October 1. We used a qualitative approach to determine the likelihood of impairment, with AUM being the focus of the assessment. After reviewing the results of the qualitative assessment, we determined it is more likely than not that the fair values exceeded carrying values.

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Our definite-lived intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There were no unfavorable events or changes in circumstances during the year ended December 31, 2025.

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Retirement Benefit Plans

We provide certain employees with retirement benefits through defined benefit plans.

The defined benefit obligation is determined annually by independent qualified actuaries using the projected unit credit method and is measured at the present value of the estimated future cash outflows using a discount rate based on AA-rated corporate bond yields of appropriate duration. The plan assets are recognized at fair value. The funded status of the defined benefit pension plan (“plan”), being the resulting surplus or deficit of defined benefit assets less liabilities, is recognized in the Consolidated Balance Sheets, net of any taxes that would be deducted at source.

Actuarial gains and losses arise as a result of differences between actual experience and actuarial assumptions. We have adopted the “10% corridor” method for recognizing actuarial gains and losses. This means that cumulative actuarial gains or losses up to an amount equal to 10% of the higher of the liabilities and the assets of the scheme (“corridor”) have no immediate impact on net income and are instead recognized through other comprehensive income. Cumulative gains or losses greater than this corridor are amortized to net income over the average future lifetime of inactive members of the plan on the grounds that there are no further active members of the plan remaining.

Net periodic benefit cost is recorded as a component of net income in the Consolidated Statements of Comprehensive Income and includes service cost, interest cost and the expected return on plan assets.

The net periodic benefit costs and period-end obligations under defined benefit pension plans are determined using actuarial valuations. The actuarial valuation involves making a number of assumptions, including those related to the discount rate, the expected rate of return on assets, future salary increases, mortality rates and future pension increases. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.

The table below shows the movement in funded status that would result from certain sensitivity changes (in millions):

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Income Taxes

We operate in several countries, states and other taxing jurisdictions through various subsidiaries and branches, and must allocate income, expenses and earnings under the various laws and regulations of each of these taxing jurisdictions. Accordingly, the provision for income taxes represents the total estimate of the liability that we have incurred for doing business each year in all of the locations. We file tax returns annually that represent filing positions within each jurisdiction and settle return liabilities. Each jurisdiction has the right to audit those returns and may take different positions with respect to income and expense allocations and taxable earnings determinations. Because the determinations of the annual provisions are subject to judgments and estimates, it is possible that actual results will vary from those recognized in the Consolidated Financial Statements. As a result, it is likely that additions to, or reductions of, income tax expense will occur each year for prior reporting periods as actual tax returns and tax audits are settled.

In the assessment of uncertain tax positions, significant management judgment is required to estimate the range of possible outcomes and determine the probability, on a more likely than not basis, of favorable or unfavorable tax outcomes and the potential interest and penalties related to such unfavorable outcomes. Actual future tax consequences on settlement of our uncertain tax positions may be materially different than management’s current estimates. As of December 31, 2025, unrecognized tax benefits were $35.0 million.

Deferred tax assets, net of any associated valuation allowance, have been recognized based on management’s belief that taxable income of the appropriate character, more likely than not, will be sufficient to realize the benefits of these assets over time. In the event that actual results differ from expectations, or if historical trends of positive operating income change, we may be required to record a valuation allowance on some or all of these deferred tax assets, which may have a significant effect on our financial condition and results of operations. In assessing whether a valuation allowance should be established against a deferred income tax asset, we consider the nature, frequency and severity of recent losses, forecasts of future profitability and the duration of statutory carryback and carryforward periods, among other factors.