DWS Group GmbH & Co. KGaA Q4 Earnings Call Highlights

DWS Group GmbH & Co. KGaA (ETR:DWS) used its fourth-quarter and full-year 2025 preliminary results call to review the close of its three-year strategic plan and to outline updated financial targets through 2028. Chief Executive Officer Stefan Hoops and Chief Financial Officer Markus Kobler said the firm exceeded several prior goals, ended 2025 with positive net flows across business lines, and is now raising its ambition for earnings growth and efficiency.

Full-year 2025 results and dividend proposal

Kobler said earnings per share rose to EUR 4.64 in 2025, representing a year-on-year improvement of more than 40%. Total revenues increased to EUR 3,155 million, up 14% versus 2024 and the “highest level since IPO,” driven primarily by higher performance fees and increased management fees. Total costs were EUR 1,831 million, flat year-over-year, leading to a reported cost-income ratio of 58%. Net income rose 42% to EUR 928 million.

DWS reported assets under management of EUR 1,085 billion at year-end 2025, up 7% year-over-year, which management attributed mainly to long-term net flows and favorable markets. Long-term net flows for the year totaled EUR 33.7 billion, and total net flows were EUR 51 billion.

Based on the results, the firm said it will propose an ordinary dividend of EUR 3 per share, described as consistent with its dividend policy and supported by management’s confidence in earnings sustainability.

Q4: higher revenues, improved efficiency, positive flows

For the fourth quarter, DWS reported revenues of EUR 902 million, up 20% from Q3 2025. Management fees rose 3% quarter-over-quarter to EUR 673 million, driven by higher average AUM from rising markets and net flows. Performance and transaction fees were EUR 173 million, including EUR 93 million from the flagship multi-asset fund DWS Concept Kaldemorgen and EUR 60 million from fee recognition related to P2, according to Kobler.

Costs in Q4 were EUR 486 million, up 12% from Q3 but “almost unchanged” year-over-year. Compensation and benefits rose to EUR 248 million, which Kobler said included non-recurring items such as performance-fee-related costs, share-price-related effects, and some severance expenses. The quarter’s reported cost-income ratio improved to 53.9%, down 3.8 percentage points sequentially and 10.7 points year-over-year, while net income increased 35% quarter-over-quarter to EUR 296 million.

On flows, DWS reported EUR 10.5 billion of total net flows and EUR 8 billion of long-term net flows in Q4. Kobler said client behavior remained cautious amid macroeconomic and political uncertainty, but DWS maintained positive momentum across all client segments and regions.

Business line highlights: active rebound, continued Xtrackers growth, mixed alternatives

• Active: Management said Q4 marked a “positive turnaround” for active, supported by Systematic Quant Investment (SQI) and active equity. Active AUM was EUR 460 billion, up 1.5% quarter-over-quarter. SQI had net inflows of EUR 0.9 billion; active equity had EUR 0.2 billion of net inflows; fixed income also had EUR 0.2 billion of inflows driven by credit strategies and floating rate funds, partly offset by institutional outflows. Multi-asset saw minor outflows tied to a change in sales focus in certain channels.
• Passive / Xtrackers: Xtrackers delivered EUR 6.6 billion of net flows in Q4, its 12th consecutive quarter of positive flows, with AUM rising to EUR 395 billion (up 5% quarter-over-quarter). UCITS flows were EUR 6.1 billion, led by equity UCITS ETFs including MSCI Emerging Markets, MSCI Japan, and Euro Stoxx 50. Mandates and solutions added EUR 1 billion of net flows, while U.S.-domiciled ETFs saw outflows of EUR 0.6 billion driven by forex-hedged ETFs. DWS also noted it now has 42 digital partnerships supporting Xtrackers distribution and cited “more than 100 product events” across the UCITS and U.S. 1940 Act businesses in 2025.
• Alternatives: Alternatives AUM totaled EUR 108 billion, stable quarter-over-quarter. Net flows were EUR 0.3 billion, with infrastructure contributing EUR 0.8 billion and liquid real assets adding EUR 0.1 billion. Real estate remained a headwind, with EUR 0.9 billion of outflows in Q4 as traditional strategies faced continued pressure. Management said its private credit build-out is progressing, supported by origination capabilities via Deutsche Bank, and referenced a memorandum of understanding with Al Mirqab Capital to launch a “German Opportunities” mandate.

Harvest China contribution

DWS reiterated it owns a 30% stake in Harvest Fund Management and said Harvest ranked as the sixth-largest mutual fund company in China in 2025. DWS’s stake generated EUR 67 million of revenues in full-year 2025, including EUR 24 million in Q4, which management attributed mainly to a one-off tax item. Harvest ended 2025 with EUR 219 billion of AUM, up 2% year-over-year, driven by positive flows into passive equity funds and fixed income retail products, alongside currency appreciation.

Updated targets through 2028 and strategic priorities

Hoops said DWS conducted a strategic review and is now setting a “more ambitious set of financial targets” compared with what it communicated a year earlier. The updated targets include:

• EPS growth of 10%–15% per annum until 2028
• Cost-income ratio below 55% by 2027
• Performance and transaction fees of 4%–8% of total revenues
• More than EUR 160 billion of cumulative long-term net flows over 2026–2028

In Q&A, Hoops provided an illustrative “bridge” to 10% EPS growth from the 2025 base, describing assumptions that included broadly flat costs, “typical” other revenues of about EUR 50 million per quarter, performance fees toward the upper end of guidance in 2026, and management-fee growth supported by higher average AUM. Kobler added that the company expects costs to remain “essentially flat” in 2026, citing stable FTE levels, productivity benefits from prior investments, completion of most remediation work, and improved project execution, while acknowledging volume-driven costs and continued investments.

Capital allocation was also a theme. Kobler said DWS’s excess capital was around EUR 1 billion at the end of 2025 and reiterated a shareholder-friendly approach with an ordinary dividend payout ratio of around 65%. Management said it is committed to proposing the use of a “substantial part” of excess capital for an extraordinary dividend in 2027, subject to capital needs for organic and inorganic growth initiatives. Hoops said the bar for M&A remains high and outlined a framework focused on potential consolidation, product capabilities, and client access, while emphasizing discipline and shareholder accretion.

About DWS Group GmbH & Co. KGaA (ETR:DWS)

DWS Group GmbH & Co KGaA offers asset management services in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company's products and solutions cover equities, fixed income, cash, real estate, infrastructure, and private equity, as well as a range of sustainable investments. Within private equity, the firm specializes in co-investment, emerging markets, small and medium-sized companies, direct buyout, secondaries PE markets and structured capital solutions to private equity firms.