Connecting financial services Career Specific Specifical 2017-02-20 a 0 - 1 0 g G 0 in the state of the first of t and the e Party the state 13:44 the state Production and the first the state 0 0 t a first and the Sel | --- | --- | --- | |---------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|------------------------------------------------------ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________ FORM 10-Q ________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_________to ________ Commission File Number: 0-10200 ____________________________________ ...

SEI Investments Company (NASDAQ:SEIC) Q2 2023 Earnings Conference Call July 26, 2023 4:30 PM ET Company Participants Alex Whitelam – Director-Investor Relations Ryan Hicke – Chief Executive Officer Dennis McGonigle – Chief Financial Officer Sanjay Sharma – Executive Vice President and Global Head-Private Banking Conference Call Participants Ryan Kenny – Morgan Stanley Jeff Schmitt – William Blair Owen Lau – Oppenheimer Mike Brown – KBW Operator Ladies and gentlemen, thank you for standing by. Welcome to the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________ FORM 10-Q ________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_________to ________ Commission File Number: 0-10200 ___________________________________ ...

SEI Investments Company (NASDAQ:SEIC) Q1 2023 Earnings Conference Call April 20, 2023 4:30 PM ET Company Participants Lindsey Opsahl - Head of Investor Relations Ryan Hicke - Chief Executive Officer Dennis McGonigle - Executive Vice President, Chief Financial Officer Sanjay Sharma - Executive Vice President and Global Head of Private Banking & Wealth Management Phil McCabe - Executive Vice President, Head of Investment Manager Services Paul Klauder - Executive Vice President, Head of the Institutional Group ...

OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_________to ________ Commission File Number: 0-10200 ________________________________________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ________________________________________ SEI INVESTMENTS COMPANY (Exact name of R ...

Financial Data and Key Metrics Changes - EPS for Q4 2022 was $0.83, down from $1.03 in Q4 2021 and $0.45 in Q3 2022 [18] - Revenue for the quarter was $457 million, compared to $502 million in 2021 and $471 million in Q3 2022 [18] - Fourth quarter revenues declined 9% year-over-year, and earnings were down 23% from the previous year [22][23] Business Line Data and Key Metrics Changes - In the Investment Managers segment, the alternative business saw large clients launching new products, while the traditional business added new clients across all product lines [9][10] - The Institutional Investors segment faced revenue and profit impacts due to capital market declines, but OCIO sales produced strong results in 2022 [12] - Private Banking had a busy quarter with eight clients recontracted, representing $53 million in annual recurring revenue [20] Market Data and Key Metrics Changes - The market environment was influenced by inflation, geopolitical tensions, and fiscal policy, affecting capital market performance [22] - The unfunded client backlog of gross sales at quarter end was $2.5 billion, with negative net flows from existing clients due to de-risking [38] Company Strategy and Development Direction - The company aims to leverage its business model to turn challenges into opportunities and focus on growth areas such as outsourcing, cybersecurity, and RIA [8][15] - SEI is focusing on unbundling investment options and enhancing client engagement to drive growth [11][16] - The company is building a corporate development team to execute strategic transactions for growth [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current volatile market and emphasized the importance of maintaining investments for future growth [25][26] - The leadership highlighted a renewed focus on expense management and strategic client engagement to drive profitability [24][32] Other Important Information - The company repurchased 1.3 million shares at an average price of $59.36, totaling $79.6 million [24] - A dividend of $0.43 per share was declared for the year [24] Q&A Session Summary Question: What is the trajectory for pretax margin and expense flexibility? - Management indicated that margin compression is a function of market conditions and that they have the ability to adjust variable costs based on performance [54][55] Question: Can you elaborate on the investments in compliance infrastructure? - The CFO explained that these investments are necessary to meet regulatory requirements and are part of a long-term strategy [46][47] Question: What are the growth areas for 2023? - Management identified cybersecurity and outsourcing as key focus areas, with increased sales force and capabilities in SEI Sphere [72][73] Question: How should we think about operating margins going forward? - Management expects margins to trend back to historical levels, with improvements in private banking and institutional business margins over time [81][84] Question: What opportunities exist for cross-selling with recontracted clients? - Management noted that recontracting is part of their growth strategy, allowing for deeper relationships and cross-selling opportunities [85][88]

Financial Data and Key Metrics Changes - Third quarter revenues declined 3% year-over-year to $471 million from $485 million in Q3 2021 [9][38] - Earnings per share (EPS) for the third quarter was $0.45, down 54% from $0.97 in the same quarter last year [9][37] - The financial impact of a voluntary separation program was approximately $57 million, equating to $0.32 per share for the quarter [10][37] - Total expenses for the quarter increased to $420 million from $344 million in the previous year [38][40] Business Line Data and Key Metrics Changes - The Investment Managers segment had a record sales quarter, with significant new business from both new and existing clients [18] - The Investment Advisors business saw net cash flow onto the platform of approximately $800 million, reflecting increased momentum in strategic initiatives [52] - The Institutional Investors segment experienced new client wins, particularly with foundations and endowments, with OCIO net sales events totaling $220 million [54] - The Private Bank business had an active quarter with new sales and implementations, including a significant conversion from U.S. Bank [25] Market Data and Key Metrics Changes - The company noted that lower capital markets impacted revenues from asset management and administration [39] - The backlog of sold but expected-to-install revenue in the next 18 months was reported at $44.9 million [43] - The current unfunded client backlog of gross sales at quarter end was $2.8 billion in the Institutional Investors segment [54] Company Strategy and Development Direction - The company announced a strategic alignment of its asset management businesses under one leadership to drive growth [8][14] - There is a focus on leveraging technology and data integration to meet market demand for advanced analytics [17] - The company aims to capitalize on growth opportunities in the wealth management market through both organic and inorganic means [13][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate inflation and market volatility while pursuing growth [12][35] - The company is committed to maintaining a disciplined approach to expense management while also being aggressive in capital allocation [77][78] - Management highlighted the importance of fostering a diverse and inclusive workplace culture as a competitive advantage [34] Other Important Information - The company repurchased 890,000 shares of stock at a price of $55.55 per share, totaling $49.4 million [11] - A strategic partnership with Snowflake was established to enhance data capabilities [17] - The company is actively engaging clients to create cross-sell opportunities across its business segments [27] Q&A Session Summary Question: How should investors think about the incremental revenue and expense opportunity with the new asset management structure? - Management emphasized that the alignment of units under one leader will enhance capital allocation for growth across segments [63][64] Question: Can you clarify the revenue impact from the Wells Fargo relationship? - Management confirmed a potential revenue impact of $1.3 million to $1.7 million per quarter and a one-time reduction of $5 million to $7 million in Q4 [71][72] Question: How much of the expense base is fixed versus variable? - The majority of expenses are fixed due to the employee base, but there are variable costs tied to assets and trading activity [84][85] Question: What changes are being made to the private bank segment to support better sales? - Management highlighted a significant backlog of signed contracts and ongoing engagement with clients to ensure timely implementations [100][102] Question: Can you expand on the deconversion within investment managers? - The decrease in assets was attributed to market impacts and parting ways with a low-fee strategy client, offset by new client fundings [110]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements.](index=4&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited consolidated financial statements of SEI Investments Company, including the Balance Sheets, Statements of Operations, Comprehensive Income, Changes in Equity, and Condensed Statements of Cash Flows for the periods ended June 30, 2022, and December 31, 2021, or June 30, 2022 and 2021, respectively. These statements provide a snapshot of the company's financial position, performance, and cash movements [Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)%20--%20June%2030%2C%202022%20and%20December%2031%2C%202021) | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (2022 vs 2021) | | :----------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | **Assets:** | | | | | Cash and cash equivalents | $771,673 | $831,407 | $(59,734) | | Total Current Assets | $1,375,531 | $1,404,229 | $(28,698) | | Total Assets | $2,234,929 | $2,354,702 | $(119,773) | | **Liabilities & Equity:** | | | | | Total Current Liabilities | $253,560 | $355,743 | $(102,183) | | Borrowings Under Revolving Credit Facility | $— | $40,000 | $(40,000) | | Total Liabilities | $312,841 | $493,939 | $(181,098) | | Total Shareholders' Equity | $1,922,088 | $1,860,763 | $61,325 | | Total Liabilities and Shareholders' Equity | $2,234,929 | $2,354,702 | $(119,773) | - Total assets decreased by **$119.8 million**, or **5.1%**, from December 31, 2021, to June 30, 2022, primarily driven by a decrease in cash and cash equivalents and investments[12](index=12&type=chunk)[15](index=15&type=chunk) - Total liabilities decreased by **$181.1 million**, or **36.7%**, largely due to the repayment of **$40.0 million** under the revolving credit facility and a significant reduction in accrued liabilities[15](index=15&type=chunk) - Shareholders' equity increased by **$61.3 million**, or **3.3%**, primarily due to retained earnings growth, partially offset by accumulated other comprehensive loss[15](index=15&type=chunk) [Consolidated Statements of Operations (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20(Unaudited)%20--%20For%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) | Metric | 3 Months Ended June 30, 2022 (in thousands) | 3 Months Ended June 30, 2021 (in thousands) | YoY Change (%) | 6 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2021 (in thousands) | YoY Change (%) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :------------- | :---------------------------------------- | :---------------------------------------- | :------------- | | Total revenues | $481,670 | $475,651 | 1% | $1,063,113 | $931,337 | 14% | | Total expenses | $365,810 | $339,630 | 8% | $732,454 | $662,479 | 11% | | Income from operations | $115,860 | $136,021 | (15)% | $330,659 | $268,858 | 23% | | Net income | $111,276 | $133,778 | (17)% | $301,584 | $263,248 | 15% | | Basic earnings per common share | $0.82 | $0.94 | (13)% | $2.20 | $1.85 | 19% | | Diluted earnings per common share | $0.81 | $0.93 | (13)% | $2.17 | $1.82 | 19% | | Dividends declared per common share | $0.40 | $0.37 | 8% | $0.40 | $0.37 | 8% | - For the three months ended June 30, 2022, total revenues saw a slight increase of **1%**, while net income decreased by **17%** due to higher expenses and a net loss from investments[18](index=18&type=chunk) - For the six months ended June 30, 2022, total revenues increased by **14%**, and net income increased by **15%**, driven by higher information processing and software servicing fees, including one-time early termination fees[18](index=18&type=chunk)[137](index=137&type=chunk) [Consolidated Statements of Comprehensive Income (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)%20--%20For%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) | Metric | 3 Months Ended June 30, 2022 (in thousands) | 3 Months Ended June 30, 2021 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2021 (in thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net income | $111,276 | $133,778 | $301,584 | $263,248 | | Foreign currency translation adjustments | $(14,623) | $994 | $(19,181) | $2,679 | | Unrealized loss on investments, net of tax | $(3,088) | $(292) | $(7,057) | $(835) | | Reclassification adjustment for losses realized in net income, net of tax | $129 | $179 | $318 | $432 | | Total other comprehensive (loss) income, net of tax | $(17,582) | $881 | $(25,920) | $2,276 | | Comprehensive income | $93,694 | $134,659 | $275,664 | $265,524 | - Comprehensive income decreased significantly for the three months ended June 30, 2022, to **$93.7 million** from **$134.7 million** in the prior year, primarily due to foreign currency translation adjustments and unrealized losses on investments[21](index=21&type=chunk) - For the six months ended June 30, 2022, comprehensive income increased to **$275.7 million** from **$265.5 million**, despite substantial foreign currency translation adjustments and unrealized losses on investments[21](index=21&type=chunk) [Consolidated Statements of Changes in Equity (Unaudited)](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity%20(Unaudited)%20--%20For%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) | Metric | 3 Months Ended June 30, 2022 (in thousands) | 3 Months Ended June 30, 2021 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2021 (in thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Total Equity (Beginning Balance) | $1,973,083 | $1,829,108 | $1,860,763 | $1,739,907 | | Net income | $111,276 | $133,778 | $301,584 | $263,248 | | Other comprehensive (loss) income | $(17,582) | $881 | $(25,920) | $2,276 | | Purchase and retirement of common stock | $(109,293) | $(129,219) | $(209,383) | $(196,158) | | Dividends declared | $(54,378) | $(52,389) | $(54,378) | $(52,389) | | Total Equity (Ending Balance) | $1,922,088 | $1,805,606 | $1,922,088 | $1,805,606 | - For the three months ended June 30, 2022, total equity decreased from **$1,973.1 million** to **$1,922.1 million**, primarily due to common stock repurchases and dividends, partially offset by net income[24](index=24&type=chunk) - For the six months ended June 30, 2022, total equity increased from **$1,860.8 million** to **$1,922.1 million**, driven by net income, but significantly impacted by common stock repurchases totaling **$209.4 million**[27](index=27&type=chunk)[78](index=78&type=chunk) [Consolidated Condensed Statements of Cash Flows (Unaudited)](index=10&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows%20(Unaudited)%20--%20For%20the%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) | Metric | 6 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2021 (in thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Net cash provided by operating activities | $330,615 | $324,997 | | Net cash used in investing activities | $(42,516) | $(56,087) | | Net cash used in financing activities | $(332,173) | $(277,936) | | Effect of exchange rate changes on cash, cash equivalents and restricted cash | $(15,660) | $2,578 | | Net decrease in cash, cash equivalents and restricted cash | $(59,734) | $(6,448) | | Cash, cash equivalents and restricted cash, end of period | $772,024 | $781,279 | - Net cash provided by operating activities increased slightly to **$330.6 million** in the first six months of 2022, up from **$325.0 million** in the prior year, primarily due to increased net income[30](index=30&type=chunk)[178](index=178&type=chunk) - Net cash used in investing activities decreased to **$42.5 million** in the first six months of 2022, from **$56.1 million** in the prior year, mainly due to lower net purchases of marketable securities[30](index=30&type=chunk)[179](index=179&type=chunk) - Net cash used in financing activities increased significantly to **$332.2 million**, from **$277.9 million**, driven by higher common stock repurchases and dividend payments, alongside the repayment of the revolving credit facility[30](index=30&type=chunk)[180](index=180&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the figures presented in the consolidated financial statements, covering significant accounting policies, investments, financial caption compositions, fair value measurements, marketable securities, credit facilities, shareholders' equity, comprehensive loss, business segments, income taxes, commitments, goodwill, revenue recognition, and a voluntary separation program [Note 1. Summary of Significant Accounting Policies](index=11&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) - SEI Investments Company provides comprehensive technology, operational, and investment management services to wealth managers, financial advisors, investment managers, family offices, institutional and private investors[32](index=32&type=chunk) - The company's revenue streams are categorized into Investment processing platforms (Information processing and software servicing fees), Investment operations platforms (Asset management, administration and distribution fees), and Investment management platforms (Asset management, administration and distribution fees)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - The company waived **$20.2 million** and **$21.5 million** in fees during the six months ended June 30, 2022 and 2021, respectively, under expense limitation agreements with certain SEI-sponsored money market funds[40](index=40&type=chunk) - Capitalized software development costs, primarily for the SEI Wealth Platform (SWP), amounted to **$13.8 million** and **$12.3 million** for the six months ended June 30, 2022 and 2021, respectively, with the net book value of SWP at **$224.7 million** as of June 30, 2022[44](index=44&type=chunk) [Note 2. Investment in Unconsolidated Affiliate](index=14&type=section&id=Note%202.%20Investment%20in%20Unconsolidated%20Affiliate) - SEI holds a **38.6%** partnership interest in LSV Asset Management (LSV), an investment advisor, accounted for using the equity method[47](index=47&type=chunk)[49](index=49&type=chunk) | Metric | 3 Months Ended June 30, 2022 (in thousands) | 3 Months Ended June 30, 2021 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2021 (in thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | SEI's proportionate share in LSV earnings | $29,813 | $35,065 | $62,272 | $68,415 | - The company received partnership distributions from LSV of **$69.8 million** and **$68.1 million** in the six months ended June 30, 2022 and 2021, respectively, classified as operating activities[48](index=48&type=chunk) [Note 3. Composition of Certain Financial Statement Captions](index=15&type=section&id=Note%203.%20Composition%20of%20Certain%20Financial%20Statement%20Captions) | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------- | | **Receivables:** | | | | Trade receivables | $107,853 | $111,209 | | Fees earned, not billed | $337,445 | $315,255 | | Other receivables | $23,556 | $16,747 | | Less: Allowance for doubtful accounts | $(1,952) | $(1,602) | | Total Receivables, net | $466,902 | $441,609 | | **Property and Equipment, net:** | | | | Buildings | $209,907 | $209,766 | | Equipment | $167,591 | $153,158 | | Land | $26,411 | $24,651 | | Purchased software | $156,569 | $156,387 | | Total Property and Equipment, net | $178,946 | $178,869 | | **Accrued Liabilities:** | | | | Accrued employee compensation | $52,418 | $107,933 | | Accrued employee benefits and other personnel | $9,749 | $13,951 | | Accrued consulting, outsourcing and professional fees | $47,067 | $36,411 | | Accrued sub-advisory, distribution and other asset management fees | $58,400 | $58,661 | | Accrued dividend payable | $— | $55,452 | | Other accrued liabilities | $51,118 | $51,974 | | Total accrued liabilities | $218,752 | $324,382 | - Deferred contract costs, primarily deferred sales commissions, were **$35.4 million** as of June 30, 2022, down from **$36.2 million** at December 31, 2021, with amortization expense of **$5.9 million** for the six months ended June 30, 2022, including **$1.8 million** accelerated due to a client agreement termination[53](index=53&type=chunk) [Note 4. Fair Value Measurements](index=16&type=section&id=Note%204.%20Fair%20Value%20Measurements) - The fair value of financial assets is determined using a hierarchy: Level 1 (quoted prices in active markets), Level 2 (significant observable inputs), and Level 3 (significant unobservable inputs)[55](index=55&type=chunk)[59](index=59&type=chunk) - The company's Level 1 assets primarily consist of investments in open-ended mutual funds, while Level 2 assets include GNMA mortgage-backed securities and U.S. government agency short-term notes[55](index=55&type=chunk) - The fair value of investment funds sponsored by LSV is measured using the net asset value per share (NAV) as a practical expedient[56](index=56&type=chunk) - Level 3 financial liabilities consist entirely of estimated contingent consideration from an acquisition, valued using a Monte-Carlo simulation model[58](index=58&type=chunk) [Note 5. Marketable Securities](index=17&type=section&id=Note%205.%20Marketable%20Securities) - Marketable securities include cash equivalents (money market funds, commercial paper), available-for-sale debt securities, SEI-sponsored and non-SEI-sponsored mutual funds, equities, LSV-sponsored funds, and securities owned by SIDCO[60](index=60&type=chunk) | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------- | | Cash Equivalents (Fair Value) | $458,521 | $422,838 | | Available-for-sale debt securities (Fair Value) | $110,870 | $117,135 | | SEI-sponsored mutual funds (Fair Value) | $6,022 | $7,211 | | Equities and other mutual funds (Fair Value) | $4,790 | $5,195 | | Investment funds sponsored by LSV (Fair Value) | $6,000 | $6,916 | | Securities owned (Fair Value) | $31,171 | $28,267 | - Net unrealized losses on available-for-sale debt securities were **$6.8 million** at June 30, 2022, primarily due to interest rate increases affecting GNMA mortgage-backed securities[62](index=62&type=chunk) - The company recognized unrealized losses of **$916 thousand** from LSV-sponsored funds during the six months ended June 30, 2022, compared to unrealized gains of **$766 thousand** in the prior year[66](index=66&type=chunk) [Note 6. Line of Credit](index=19&type=section&id=Note%206.%20Line%20of%20Credit) - The company has a **$325.0 million** Credit Agreement expiring in April 2026, with interest rates based on a base rate or LIBOR plus a premium, and includes SOFR as a fallback rate[68](index=68&type=chunk) - During the six months ended June 30, 2022, the company fully repaid **$40.0 million** borrowed under the Credit Facility for an acquisition[71](index=71&type=chunk) - As of July 15, 2022, **$319.0 million** of the Credit Facility was available for general corporate purposes, after accounting for **$6.0 million** in outstanding letters of credit[72](index=72&type=chunk) [Note 7. Shareholders' Equity](index=19&type=section&id=Note%207.%20Shareholders%27%20Equity) | Metric | 3 Months Ended June 30, 2022 (in thousands) | 3 Months Ended June 30, 2021 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2021 (in thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Stock-based compensation expense | $10,007 | $10,103 | $20,573 | $19,855 | | Less: Deferred tax benefit | $(1,839) | $(1,904) | $(3,934) | $(3,758) | | Stock-based compensation expense, net of tax | $8,168 | $8,199 | $16,639 | $16,097 | - The company repurchased **3.7 million shares** of common stock for **$209.4 million** during the six months ended June 30, 2022, with **$221.9 million** remaining authorization[78](index=78&type=chunk) - A cash dividend of **$0.40 per share** was declared on June 1, 2022, totaling **$54.4 million** for the six months ended June 30, 2022, an increase from **$52.4 million** in the prior year[80](index=80&type=chunk) [Note 8. Accumulated Other Comprehensive Loss](index=21&type=section&id=Note%208.%20Accumulated%20Other%20Comprehensive%20Loss) | Component | January 1, 2022 (in thousands) | Other comprehensive loss before reclassifications (in thousands) | Amounts reclassified from accumulated other comprehensive loss (in thousands) | Net current-period other comprehensive loss (in thousands) | June 30, 2022 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------------------------------- | :---------------------------------------------------------- | :------------------------------------------------------- | :----------------------------- | | Foreign Currency Translation Adjustments | $(19,781) | $(19,181) | $— | $(19,181) | $(38,962) | | Unrealized Gains (Losses) on Investments | $(62) | $(7,057) | $318 | $(6,739) | $(6,801) | | Total Accumulated Other Comprehensive Loss | $(19,843) | $(26,238) | $318 | $(25,920) | $(45,763) | - Accumulated other comprehensive loss increased from **$(19.8) million** at January 1, 2022, to **$(45.8) million** at June 30, 2022, primarily due to foreign currency translation adjustments and unrealized losses on investments[81](index=81&type=chunk) [Note 9. Business Segment Information](index=21&type=section&id=Note%209.%20Business%20Segment%20Information) - SEI operates through five reportable business segments: Private Banks, Investment Advisors, Institutional Investors, Investment Managers, and Investments in New Businesses[82](index=82&type=chunk) | Segment | 3 Months Ended June 30, 2022 Revenues (in thousands) | 3 Months Ended June 30, 2021 Revenues (in thousands) | YoY Change (%) | 6 Months Ended June 30, 2022 Revenues (in thousands) | 6 Months Ended June 30, 2021 Revenues (in thousands) | YoY Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :------------- | :------------------------------------- | :------------------------------------- | :------------- | | Private Banks | $124,184 | $123,676 | 0% | $337,732 | $241,284 | 40% | | Investment Advisors | $113,194 | $119,396 | (5)% | $232,424 | $232,690 | 0% | | Institutional Investors | $83,483 | $85,699 | (3)% | $170,322 | $170,198 | 0% | | Investment Managers | $155,926 | $142,808 | 9% | $312,827 | $279,227 | 12% | | Investments in New Businesses | $4,883 | $4,072 | 20% | $9,808 | $7,938 | 24% | | **Total Revenues** | **$481,670** | **$475,651** | **1%** | **$1,063,113** | **$931,337** | **14%** | | Segment | 3 Months Ended June 30, 2022 Operating Profit (Loss) (in thousands) | 3 Months Ended June 30, 2021 Operating Profit (Loss) (in thousands) | YoY Change (%) | 6 Months Ended June 30, 2022 Operating Profit (Loss) (in thousands) | 6 Months Ended June 30, 2021 Operating Profit (Loss) (in thousands) | YoY Change (%) | | :-------------------------- | :------------------------------------------------ | :------------------------------------------------ | :------------- | :------------------------------------------------ | :------------------------------------------------ | :------------- | | Private Banks | $3,124 | $6,022 | (48)% | $94,717 | $12,906 | NM | | Investment Advisors | $49,819 | $60,263 | (17)% | $104,529 | $118,530 | (12)% | | Institutional Investors | $39,558 | $43,804 | (10)% | $81,039 | $89,145 | (9)% | | Investment Managers | $55,119 | $57,813 | (5)% | $113,183 | $111,212 | 2% | | Investments in New Businesses | $(7,961) | $(9,559) | NM | $(14,986) | $(19,097) | NM | | **Total Operating Profit (Loss)** | **$139,659** | **$158,343** | **(12)%** | **$378,482** | **$312,696** | **21%** | [Note 10. Income Taxes](index=24&type=section&id=Note%2010.%20Income%20Taxes) | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------- | | Gross liability for unrecognized tax benefits | $16,861 | $14,887 | | Interest and penalties | $1,642 | $1,338 | | Total gross uncertain tax positions | $18,503 | $16,225 | | Component | 3 Months Ended June 30, 2022 (%) | 3 Months Ended June 30, 2021 (%) | 6 Months Ended June 30, 2022 (%) | 6 Months Ended June 30, 2021 (%) | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Statutory rate | 21.0 | 21.0 | 21.0 | 21.0 | | State taxes, net of federal tax benefit | 2.8 | 3.2 | 2.8 | 3.2 | | Foreign tax expense and tax rate differential | (0.1) | (0.1) | (0.1) | (0.1) | | Tax benefit from stock option exercises | (0.3) | (1.2) | (0.3) | (1.2) | | Other, net | (0.3) | (0.6) | (0.3) | (0.4) | | **Effective tax rate** | **23.1** | **22.3** | **23.1** | **22.5** | - The increase in the effective tax rate for the three and six months ended June 30, 2022, was primarily due to decreased tax benefits from lower stock option exercises, partially offset by a decrease in state tax expense[91](index=91&type=chunk) - Pennsylvania House Bill 1342, signed July 8, 2022, reduces the corporate income tax rate from **9.99%** to **4.99%** in phases, with management evaluating the impact, not expecting it to be material[94](index=94&type=chunk) [Note 11. Commitments and Contingencies](index=25&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) - The company is involved in various legal proceedings, including the SS&C Advent Litigation, where a New York State Court granted SEI's motion for injunctive relief and affirmed that SS&C Advent's purported contract termination was 'pretextual' and breached the agreement[97](index=97&type=chunk)[100](index=100&type=chunk)[106](index=106&type=chunk)[110](index=110&type=chunk) - SEI continues to believe it will not need to change providers under its contract with SS&C Advent and expects the financial impact of litigating the Advent Matter to be immaterial[106](index=106&type=chunk)[107](index=107&type=chunk) - Other legal matters arising in the normal course of business are not believed to have a material adverse effect on the company's financial position[108](index=108&type=chunk) [Note 12. Goodwill and Intangible Assets](index=29&type=section&id=Note%2012.%20Goodwill%20and%20Intangible%20Assets) | Segment | December 31, 2021 (in thousands) | Measurement period adjustments (in thousands) | Foreign currency translation adjustments (in thousands) | June 30, 2022 (in thousands) | | :------------------- | :----------------------------- | :------------------------------------ | :---------------------------------------------- | :----------------------------- | | Institutional Investors | $48,911 | $(11) | $— | $48,900 | | Investment Managers | $56,822 | $211 | $(27) | $57,006 | | Investments in New Businesses | $11,499 | $— | $— | $11,499 | | **Total Goodwill** | **$117,232** | **$200** | **$(27)** | **$117,405** | - Goodwill increased slightly to **$117.4 million** at June 30, 2022, primarily due to measurement period adjustments from the Finomial and Novus acquisitions in Q4 2021[111](index=111&type=chunk)[112](index=112&type=chunk) - Amortization expense related to intangible assets acquired through acquisitions was **$6.5 million** for the six months ended June 30, 2022, a significant increase from **$2.1 million** in the prior year, due to recent acquisitions[115](index=115&type=chunk) [Note 13. Revenues from Contracts with Customers](index=29&type=section&id=Note%2013.%20Revenues%20from%20Contracts%20with%20Customers) - The company's principal revenue sources are asset management, administration, and distribution fees (percentage of net assets) and information processing and software servicing fees (monthly fees, percentage of assets processed, or project-oriented)[116](index=116&type=chunk) | Major Product Line | 6 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2021 (in thousands) | YoY Change (%) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :------------- | | Investment management fees from pooled investment products | $235,136 | $242,419 | (3)% | | Investment management fees from investment management agreements | $223,148 | $222,367 | 0% | | Investment operations fees | $290,825 | $258,194 | 13% | | Investment processing fees - PaaS | $112,833 | $106,622 | 6% | | Investment processing fees - SaaS | $73,104 | $63,813 | 15% | | Professional services fees | $97,849 | $10,349 | 845% | | Account fees and other | $30,218 | $27,573 | 10% | | **Total Revenues** | **$1,063,113** | **$931,337** | **14%** | - Professional services fees for the Private Banks segment include **$88.0 million** in one-time early termination fees recorded in Q1 2022 from a significant client, significantly boosting this category's revenue[119](index=119&type=chunk) [Note 14. Voluntary Separation Program](index=33&type=section&id=Note%2014.%20Voluntary%20Separation%20Program) - In June 2022, SEI initiated a Voluntary Separation Program (VSP) for long-tenured U.S. employees to enhance talent attraction and development[130](index=130&type=chunk) - The VSP includes a severance package, continuation of benefits, and allowances related to stock option vesting, which will be considered modifications to equity compensation plans[131](index=131&type=chunk) - The company expects a one-time increase of **$54.0 million** to **$58.0 million** in personnel costs associated with the VSP during the third quarter of 2022[132](index=132&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the company's financial performance and condition, highlighting key drivers, segment results, and significant events, covering revenue and expense trends, asset balances, and the impact of strategic initiatives and market conditions [Overview](index=34&type=section&id=Overview) - SEI is a global provider of technology-driven wealth and investment management solutions, managing, advising, or administering **$1.3 trillion** in assets as of June 30, 2022[135](index=135&type=chunk) | Metric | 3 Months Ended June 30, 2022 (in thousands) | 3 Months Ended June 30, 2021 (in thousands) | YoY Change (%) | 6 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2021 (in thousands) | YoY Change (%) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :------------- | :---------------------------------------- | :---------------------------------------- | :------------- | | Revenues | $481,670 | $475,651 | 1% | $1,063,113 | $931,337 | 14% | | Expenses | $365,810 | $339,630 | 8% | $732,454 | $662,479 | 11% | | Income from operations | $115,860 | $136,021 | (15)% | $330,659 | $268,858 | 23% | | Net income | $111,276 | $133,778 | (17)% | $301,584 | $263,248 | 15% | | Diluted earnings per common share | $0.81 | $0.93 | (13)% | $2.17 | $1.82 | 19% | - Revenue from Asset management, administration and distribution fees increased due to higher average assets under administration from 2021 market appreciation and positive cash flows, despite 2022 market declines, with average assets under administration increasing **7%** to **$895.4 billion** in the first six months of 2022[137](index=137&type=chunk)[139](index=139&type=chunk) - Revenue from Asset management, administration and distribution fees were negatively impacted by a shift into lower fee products[137](index=137&type=chunk)[139](index=139&type=chunk) - One-time early termination fees of **$88.0 million** were recorded in Q1 2022 from a significant investment processing client[137](index=137&type=chunk)[139](index=139&type=chunk) - Acquisitions of SEI Novus and Atlas Master Trust contributed **$6.1 million** and **$2.5 million** in revenue, respectively, during the first six months of 2022[137](index=137&type=chunk)[139](index=139&type=chunk) - Earnings from LSV decreased by **9%** to **$62.3 million** in the first six months of 2022 due to negative cash flows, market depreciation, and client losses[137](index=137&type=chunk)[139](index=139&type=chunk) - Operating expenses increased due to higher personnel and consulting costs, partially offset by lower direct costs related to asset management revenues[137](index=137&type=chunk)[139](index=139&type=chunk) [Introduction of Voluntary Separation Program](index=36&type=section&id=Introduction%20of%20Voluntary%20Separation%20Program) - In June 2022, SEI launched an enhanced voluntary separation program for long-tenured U.S. employees to foster professional development and advancement opportunities[138](index=138&type=chunk) - The program is expected to result in a one-time increase of **$54.0 million** to **$58.0 million** in personnel costs during the third quarter of 2022[138](index=138&type=chunk) [Ending Asset Balances](index=37&type=section&id=Ending%20Asset%20Balances) | Segment | June 30, 2022 (in millions) | June 30, 2021 (in millions) | YoY Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------- | | Private Banks Total assets | $29,873 | $34,337 | (13)% | | Investment Advisors Total Platform assets (E) | $86,717 | $95,169 | (9)% | | Institutional Investors Total assets | $81,383 | $100,097 | (19)% | | Investment Managers Total assets | $1,027,402 | $963,427 | 7% | | Investments in New Businesses Total assets | $3,221 | $3,537 | (9)% | | LSV Equity and fixed-income programs (B) | $81,940 | $102,404 | (20)% | | **Total Assets** | **$1,310,536** | **$1,298,971** | **1%** | - Total assets across all segments increased by **1%** to **$1.31 trillion** as of June 30, 2022, compared to June 30, 2021[141](index=141&type=chunk) - Investment Managers segment showed significant growth in total assets, increasing by **7%** to **$1.03 trillion**, primarily driven by collective trust fund programs[140](index=140&type=chunk) [Average Asset Balances](index=39&type=section&id=Average%20Asset%20Balances) | Segment | 3 Months Ended June 30, 2022 (in millions) | 3 Months Ended June 30, 2021 (in millions) | YoY Change (%) | 6 Months Ended June 30, 2022 (in millions) | 6 Months Ended June 30, 2021 (in millions) | YoY Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :------------- | :------------------------------------- | :------------------------------------- | :------------- | | Private Banks Total assets | $31,678 | $34,301 | (8)% | $33,113 | $33,821 | (2)% | | Investment Advisors Total Platform assets (E) | $90,648 | $93,502 | (3)% | $93,677 | $91,284 | 3% | | Institutional Investors Total assets | $87,060 | $100,723 | (14)% | $91,714 | $99,468 | (8)% | | Investment Managers Total assets | $1,025,081 | $938,832 | 9% | $1,000,501 | $917,344 | 9% | | Investments in New Businesses Total assets | $3,443 | $3,512 | (2)% | $3,576 | $3,377 | 6% | | LSV Equity and fixed-income programs (B) | $87,818 | $103,583 | (15)% | $92,134 | $100,530 | (8)% | | **Total Assets** | **$1,325,728** | **$1,274,453** | **4%** | **$1,314,715** | **$1,245,824** | **6%** | - Average total assets increased by **4%** for the three months and **6%** for the six months ended June 30, 2022, compared to the prior year periods[144](index=144&type=chunk) - The Investment Managers segment showed a consistent **9%** increase in average total assets for both the three and six-month periods, driven by collective trust fund programs[143](index=143&type=chunk) [Business Segments](index=41&type=section&id=Business%20Segments) | Segment | 3 Months Ended June 30, 2022 Operating Margin (%) | 3 Months Ended June 30, 2021 Operating Margin (%) | 6 Months Ended June 30, 2022 Operating Margin (%) | 6 Months Ended June 30, 2021 Operating Margin (%) | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Private Banks | 3% | 5% | 28% | 5% | | Investment Advisors | 44% | 50% | 45% | 51% | | Institutional Investors | 47% | 51% | 48% | 52% | | Investment Managers | 35% | 40% | 36% | 40% | | Investments in New Businesses | NM | NM | NM | NM | - **Private Banks:** Revenues increased **40%** for the six-month period due to **$88.0 million** in early termination fees and increased investment processing fees, partially offset by foreign currency fluctuations and decreased investment management fees, with operating margin for the six-month period increasing significantly to **28%** from **5%**[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - **Investment Advisors:** Revenues decreased **5%** for the three-month period and were flat for the six-month period, impacted by decreased investment management fees from SEI fund programs due to market conditions, partially offset by increased separately managed account fees, with operating margin declining to **44%** (3 months) and **45%** (6 months)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - **Institutional Investors:** Revenues decreased **3%** for the three-month period and were flat for the six-month period, benefiting from SEI Novus and Atlas Master Trust acquisitions, but offset by client losses and foreign currency impacts, with operating margin decreasing to **47%** (3 months) and **48%** (6 months)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - **Investment Managers:** Revenues increased **9%** for the three-month period and **12%** for the six-month period, driven by higher valuations of existing client assets and positive cash flows into alternative and traditional offerings, with operating margin decreasing to **35%** (3 months) and **36%** (6 months)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) [Other](index=43&type=section&id=Other) - Corporate overhead expenses increased to **$47.8 million** for the six months ended June 30, 2022, from **$43.8 million** in the prior year, primarily due to higher personnel, consulting, and professional fees[156](index=156&type=chunk) | Metric | 3 Months Ended June 30, 2022 (in thousands) | 3 Months Ended June 30, 2021 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2021 (in thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net (loss) gain from investments | $(2,620) | $377 | $(3,109) | $709 | | Interest and dividend income | $1,853 | $878 | $2,701 | $1,823 | | Interest expense | $(211) | $(130) | $(461) | $(253) | | Equity in earnings of unconsolidated affiliate | $29,813 | $35,065 | $62,272 | $68,415 | | **Total other income and expense items, net** | **$28,835** | **$36,190** | **$61,403** | **$70,694** | - Net losses from investments for the three and six months ended June 30, 2022, were primarily due to unrealized mark-to-market losses on LSV-sponsored and company-sponsored mutual funds amid market declines[158](index=158&type=chunk) - Amortization expense increased by **15%** for both the three and six-month periods ended June 30, 2022, driven by intangible assets acquired through the Finomial, SEI Novus, and Atlas Master Trust acquisitions[162](index=162&type=chunk)[164](index=164&type=chunk) - The effective income tax rate increased to **23.1%** for both the three and six months ended June 30, 2022, mainly due to decreased tax benefits from lower stock option exercises[165](index=165&type=chunk) - The company faces a complex and changing regulatory environment, with increased scrutiny and potential for enforcement actions, which could materially impact operating results or financial position[169](index=169&type=chunk)[171](index=171&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) | Metric | 6 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2021 (in thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Net cash provided by operating activities | $330,615 | $324,997 | | Net cash used in investing activities | $(42,516) | $(56,087) | | Net cash used in financing activities | $(332,173) | $(277,936) | | Net decrease in cash, cash equivalents and restricted cash | $(59,734) | $(6,448) | | Cash, cash equivalents and restricted cash, end of period | $772,024 | $781,279 | - As of July 15, 2022, the company had **$386.2 million** in free and immediately accessible cash and cash equivalents for general corporate purposes[176](index=176&type=chunk) - Cash flows from operations increased by **$5.6 million** in the first six months of 2022, primarily due to higher net income, partially offset by changes in working capital[178](index=178&type=chunk) - Net cash used in financing activities increased due to **$210.3 million** in common stock repurchases and **$109.8 million** in dividend payments during the first six months of 2022[180](index=180&type=chunk) [Forward-Looking Information and Risk Factors](index=47&type=section&id=Forward-Looking%20Information%20and%20Risk%20Factors) - The company's future operations, strategies, and financial results are subject to various risks and uncertainties, including changes in capital markets, product development, third-party service provider failures, and increased competition[182](index=182&type=chunk)[183](index=183&type=chunk) - Significant risks include the impact of LSV Asset Management's performance, software defects, data and cybersecurity risks, extensive governmental regulation, and litigation[183](index=183&type=chunk) - The company operates through many regulated subsidiaries and is subject to extensive and changing legislation, regulation, and supervision, which could have a material adverse effect on its business and clients[184](index=184&type=chunk)[186](index=186&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section refers to previous disclosures regarding market risk, specifically how changes in capital markets and interest rates can affect revenues, earnings, and the value of fixed-income investment securities, with no material changes to this information reported - Information on market risk, including the impact of capital market changes and interest rate fluctuations on revenues, earnings, and fixed-income investment securities, remains consistent with the disclosures in the Annual Report on Form 10-K for the year ended December 31, 2021[196](index=196&type=chunk) [Item 4. Controls and Procedures.](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2022, concluding they are effective, with no material changes in internal control over financial reporting occurring during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[197](index=197&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2022[199](index=199&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings.](index=54&type=section&id=Item%201.%20Legal%20Proceedings.) The company is involved in various legal proceedings and investigations in the ordinary course of business, which are not believed to be material, and while outcomes are uncertain, the probability of a material adverse effect on SEI as a whole is considered remote - The company is party to various legal proceedings and investigations arising in the ordinary course of business, which are not considered material[201](index=201&type=chunk) - The probability of any of these matters having a material adverse effect on SEI as a whole is believed to be remote, although an unfavorable resolution could materially affect net earnings in a particular interim period[201](index=201&type=chunk) [Item 1A. Risk Factors.](index=54&type=section&id=Item%201A.%20Risk%20Factors.) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 - No material changes have occurred in the risk factors from those disclosed in the Annual Report on Form 10-K for 2021[202](index=202&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The Board of Directors authorized an additional **$200.0 million** for the common stock repurchase program on June 1, 2022, and during the three months ended June 30, 2022, the company repurchased **1.97 million shares** for **$109.3 million**, with **$221.9 million** remaining authorization | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | | :------- | :------------------------------- | :--------------------------- | :---------------------------------------------------------------- | | April 2022 | 450,000 | $56.95 | $105,578,000 | | May 2022 | 750,000 | $55.30 | $64,105,000 | | June 2022 | 770,000 | $54.81 | $221,910,000 | | **Total** | **1,970,000** | **$55.48** | | - The Board of Directors approved an additional **$200.0 million** for the common stock repurchase program on June 1, 2022, bringing the total authorization to **$5.328 billion** with no expiration date[203](index=203&type=chunk) [Item 6. Exhibits.](index=54&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed as part of the Form 10-Q, including various certifications, the XBRL instance document, and taxonomy extension documents - The exhibits include certifications from the Chief Executive Officer and Chief Financial Officer (Rule 13a-15(e)/15d-15(e) and Section 1350), along with XBRL instance and taxonomy extension documents[205](index=205&type=chunk) [SIGNATURES](index=55&type=section&id=SIGNATURES) The report was duly signed on behalf of SEI Investments Company by Dennis J. McGonigle, Chief Financial Officer, on July 25, 2022 - The report was signed by Dennis J. McGonigle, Chief Financial Officer of SEI Investments Company, on July 25, 2022[207](index=207&type=chunk)

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial statements and management's discussion and analysis for the three months ended March 31, 2022 [Item 1. Financial Statements.](index=4&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited consolidated financial statements of SEI Investments Company for the three months ended March 31, 2022 and 2021, including balance sheets, statements of operations, comprehensive income, changes in equity, and cash flows, along with detailed notes explaining significant accounting policies, investments, and other financial captions [Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, as of March 31, 2022, and December 31, 2021 | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $2,372,606 | $2,354,702 | | Total Liabilities | $399,523 | $493,939 | | Total Shareholders' Equity | $1,973,083 | $1,860,763 | - Total assets increased by **$17.9 million**, and total shareholders' equity increased by **$112.3 million** from December 31, 2021, to March 31, 2022, while total liabilities decreased by **$94.4 million**[13](index=13&type=chunk)[16](index=16&type=chunk) [Consolidated Statements of Operations (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income for the three months ended March 31, 2022, and 2021 | Metric (in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Total Revenues | $581,443 | $455,686 | | Total Expenses | $366,644 | $322,849 | | Income from Operations| $214,799 | $132,837 | | Net Income | $190,308 | $129,470 | | Basic EPS | $1.38 | $0.90 | | Diluted EPS | $1.36 | $0.89 | - Total revenues increased by **27.6%** year-over-year, driven by higher asset management, administration, and distribution fees, and a significant increase in information processing and software servicing fees. Net income grew by **46.9%** and diluted EPS by **52.8%** compared to the prior year period[19](index=19&type=chunk) [Consolidated Statements of Comprehensive Income (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Reports net income and other comprehensive income/loss components for the three months ended March 31, 2022, and 2021 | Metric (in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net Income | $190,308 | $129,470 | | Foreign currency translation adjustments | $(4,558) | $1,685 | | Unrealized loss on investments, net of tax | $(3,780) | $(290) | | Total other comprehensive (loss) income, net of tax | $(8,338) | $1,395 | | Comprehensive income | $181,970 | $130,865 | - Comprehensive income increased by **39.1%** year-over-year, despite a total other comprehensive loss in 2022 primarily due to negative foreign currency translation adjustments and increased unrealized losses on investments[22](index=22&type=chunk) [Consolidated Statements of Changes in Equity (Unaudited)](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Outlines changes in shareholders' equity, including net income, stock repurchases, and stock-based compensation, for the period | Metric (in thousands) | Balance, January 1, 2022 | Balance, March 31, 2022 | | :-------------------- | :----------------------- | :---------------------- | | Total Equity | $1,860,763 | $1,973,083 | | Net income | — | $190,308 | | Other comprehensive loss | — | $(8,338) | | Purchase and retirement of common stock | — | $(100,090) | | Issuance of common stock (employee plans/options) | — | $19,874 | | Stock-based compensation | — | $10,566 | - Total shareholders' equity increased by **$112.3 million** during the three months ended March 31, 2022, primarily driven by net income and stock-based compensation, partially offset by common stock repurchases and other comprehensive loss[25](index=25&type=chunk) [Consolidated Condensed Statements of Cash Flows (Unaudited)](index=9&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Summarizes cash flows from operating, investing, and financing activities for the three months ended March 31, 2022, and 2021 | Metric (in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $260,427 | $136,573 | | Net cash used in investing activities | $(31,760) | $(30,656) | | Net cash used in financing activities | $(146,652) | $(109,512) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $76,424 | $(2,044) | | Cash, cash equivalents and restricted cash, end of period | $908,182 | $785,683 | - Net cash provided by operating activities significantly increased to **$260.4 million** in Q1 2022 from **$136.6 million** in Q1 2021. The company experienced a net increase in cash, cash equivalents, and restricted cash of **$76.4 million** in Q1 2022, a reversal from a net decrease in the prior year[27](index=27&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations of significant accounting policies, financial captions, and other disclosures supporting the financial statements [Note 1. Summary of Significant Accounting Policies](index=10&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) Describes the company's business operations, revenue recognition, and key accounting principles, including software development costs and EPS calculation - SEI Investments Company provides comprehensive technology, operational, and investment management services to wealth managers, financial advisors, investment managers, family offices, and institutional/private investors. Revenues are primarily from asset management, administration, distribution fees, and information processing/software servicing fees[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - The company capitalized **$6.6 million** in software development costs in Q1 2022, primarily for the SEI Wealth Platform (SWP), which has a net book value of **$230.4 million** and a weighted average remaining life of **10.2 years**[41](index=41&type=chunk) Earnings Per Share Calculation | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net income | $190,308 | $129,470 | | Shares used for basic EPS | 137,935,000 | 143,201,000 | | Dilutive effect of stock options | 1,777,000 | 2,105,000 | | Shares used for diluted EPS | 139,712,000 | 145,306,000 | | Basic EPS | $1.38 | $0.90 | | Diluted EPS | $1.36 | $0.89 | [Note 2. Investment in Unconsolidated Affiliate](index=14&type=section&id=Note%202.%20Investment%20in%20Unconsolidated%20Affiliate) Details the company's equity method investment in LSV Asset Management, including its financial contribution and distributions - The Company holds a **38.7%** partnership interest in LSV Asset Management, an investment advisor, accounted for using the equity method. The investment value was **$52.8 million** as of March 31, 2022[45](index=45&type=chunk)[46](index=46&type=chunk) LSV Financials and SEI's Share | Metric (in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------- | :-------------------------------- | :-------------------------------- | | LSV Revenues | $108,450 | $110,837 | | LSV Net Income | $83,791 | $85,920 | | SEI's Equity in Earnings of LSV | $32,459 | $33,350 | - SEI received **$33.0 million** in partnership distributions from LSV in Q1 2022, classified as operating cash flow. LSV's revenues and net income slightly decreased year-over-year[46](index=46&type=chunk)[47](index=47&type=chunk) [Note 3. Composition of Certain Financial Statement Captions](index=15&type=section&id=Note%203.%20Composition%20of%20Certain%20Financial%20Statement%20Captions) Breaks down key balance sheet items such as receivables, property and equipment, deferred contract costs, and accrued liabilities Receivables Composition | Metric (in thousands) | March 31, 2022 | December 31, 2021 | | :-------------------- | :------------- | :---------------- | | Trade receivables | $101,117 | $111,209 | | Fees earned, not billed | $330,678 | $315,255 | | Other receivables | $7,437 | $16,747 | | Less: Allowance for doubtful accounts | $(1,388) | $(1,602) | | Total Receivables, net | $437,844 | $441,609 | Property and Equipment, Net | Metric (in thousands) | March 31, 2022 | December 31, 2021 | | :-------------------- | :------------- | :---------------- | | Total Property and Equipment, gross | $597,499 | $588,117 | | Less: Accumulated depreciation | $(417,041) | $(409,248) |\ | Property and Equipment, net | $180,458 | $178,869 | - Deferred contract costs, primarily sales commissions, were **$35.8 million** as of March 31, 2022. Amortization expense for these costs was **$3.9 million** in Q1 2022, including **$1.8 million** accelerated due to a client contract termination[52](index=52&type=chunk) Accrued Liabilities Composition | Metric (in thousands) | March 31, 2022 | December 31, 2021 | | :-------------------- | :------------- | :---------------- | | Accrued employee compensation | $42,053 | $107,933 | | Accrued income taxes | $55,278 | — | | Total accrued liabilities | $250,468 | $324,382 | [Note 4. Fair Value Measurements](index=16&type=section&id=Note%204.%20Fair%20Value%20Measurements) Explains the valuation hierarchy for financial assets and liabilities, including Level 1, Level 2, and Level 3 instruments - The Company's financial assets are valued using a fair value hierarchy, with Level 1 assets (e.g., open-ended mutual funds) and Level 2 assets (e.g., GNMA mortgage-backed securities, U.S. government agency notes) comprising the majority. Investment funds sponsored by LSV are measured using NAV as a practical expedient[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - Level 3 financial liabilities consist of estimated contingent consideration from an acquisition, valued using a Monte-Carlo simulation model. There were no Level 3 financial assets or transfers between levels during Q1 2022[57](index=57&type=chunk) Fair Value of Financial Assets | Asset Category (in thousands) | March 31, 2022 | December 31, 2021 | | :---------------------------- | :------------- | :---------------- | | Equity securities (Level 1) | $11,903 | $12,406 | | Available-for-sale debt securities (Level 2) | $122,814 | $117,135 | | Fixed-income securities owned (Level 2) | $31,258 | $28,267 | | Investment funds sponsored by LSV | $7,270 | $6,916 | | Total | $173,245 | $164,724 | [Note 5. Marketable Securities](index=18&type=section&id=Note%205.%20Marketable%20Securities) Details the composition and fair value of cash equivalents, available-for-sale debt securities, and equity investments - Cash equivalents, primarily money market funds and commercial paper, had a fair value of **$422.6 million** at March 31, 2022, with no material unrealized or realized gains/losses[61](index=61&type=chunk) Available For Sale and Equity Securities | Metric (in thousands) | March 31, 2022 Fair Value | December 31, 2021 Fair Value | | :-------------------- | :------------------------ | :--------------------------- | | Available-for-sale debt securities | $122,814 | $117,135 | | SEI-sponsored mutual funds | $6,837 | $7,211 | | Equities and other mutual funds | $5,066 | $5,195 | | Total | $134,717 | $129,541 | - Net unrealized losses on available-for-sale debt securities increased to **$3.8 million** (net of tax) at March 31, 2022, primarily due to interest rate increases affecting GNMA mortgage-backed securities. The Company does not intend to sell these before recovery of cost[62](index=62&type=chunk) - The Company recognized unrealized gains of **$354 thousand** from investments in LSV-sponsored funds during Q1 2022[66](index=66&type=chunk) [Note 6. Line of Credit](index=19&type=section&id=Note%206.%20Line%20of%20Credit) Describes the company's credit facility, outstanding balance, and compliance with covenants as of March 31, 2022 - The Company has a **$325 million** five-year Credit Agreement expiring in April 2026. Borrowings accrue interest based on a base rate or LIBOR plus a premium, with a fallback to SOFR upon LIBOR cessation[68](index=68&type=chunk) - As of March 31, 2022, the outstanding balance on the credit facility was **$30 million**, following a **$10 million** principal payment in February 2022. The Company was in compliance with all covenants[71](index=71&type=chunk)[73](index=73&type=chunk) - As of April 21, 2022, **$288.7 million** of the credit facility was available for general corporate purposes, after accounting for outstanding letters of credit[72](index=72&type=chunk) [Note 7. Shareholders' Equity](index=19&type=section&id=Note%207.%20Shareholders%27%20Equity) Covers stock-based compensation, stock option activity, and common stock repurchase programs impacting equity - Stock options have performance-based vesting tied to financial targets, with a minimum service condition. The Company recognized **$10.6 million** in stock-based compensation expense in Q1 2022, net of a **$2.1 million** deferred tax benefit[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - As of March 31, 2022, **$92.1 million** of unrecognized compensation cost remained for unvested employee stock options. The total intrinsic value of exercisable options was **$103.5 million**[76](index=76&type=chunk)[77](index=77&type=chunk) - The Company repurchased **1.7 million shares** of common stock for **$100.1 million** in Q1 2022, reducing total shares outstanding. Approximately **$131.2 million** remained authorized for repurchases[78](index=78&type=chunk) [Note 8. Accumulated Other Comprehensive Loss](index=21&type=section&id=Note%208.%20Accumulated%20Other%20Comprehensive%20Loss) Details the components of accumulated other comprehensive loss, including foreign currency adjustments and unrealized investment losses Components of Accumulated Other Comprehensive Loss (net of tax) | Metric (in thousands) | Balance, January 1, 2022 | Net current-period other comprehensive loss | Balance, March 31, 2022 | | :-------------------- | :----------------------- | :---------------------------------------- | :---------------------- | | Foreign Currency Translation Adjustments | $(19,781) | $(4,558) | $(24,339) | | Unrealized Gains (Losses) on Investments | $(62) | $(3,780) | $(3,842) | | Total Accumulated Other Comprehensive Loss | $(19,843) | $(8,338) | $(28,181) | - Accumulated other comprehensive loss increased from **$(19.8) million** at January 1, 2022, to **$(28.2) million** at March 31, 2022, primarily due to foreign currency translation adjustments and unrealized losses on investments[80](index=80&type=chunk) [Note 9. Business Segment Information](index=22&type=section&id=Note%209.%20Business%20Segment%20Information) Provides financial performance data for the company's five reportable business segments, including revenues and operating profit - SEI operates through five reportable business segments: Private Banks, Investment Advisors, Institutional Investors, Investment Managers, and Investments in New Businesses. Each segment provides distinct platforms and services to specific client types[81](index=81&type=chunk) Segment Revenues and Operating Profit (Three Months Ended March 31, 2022) | Segment | Revenues (in thousands) | Operating Profit (in thousands) | | :------------------------ | :---------------------- | :------------------------------ | | Private Banks | $213,548 | $91,593 | | Investment Advisors | $119,230 | $54,710 | | Institutional Investors | $86,839 | $41,481 | | Investment Managers | $156,901 | $58,064 | | Investments in New Businesses | $4,925 | $(7,025) | | Total Operating Profit from Segments | $581,443 | $238,823 | - Total operating profit from segments increased to **$238.8 million** in Q1 2022 from **$154.4 million** in Q1 2021. Corporate overhead expenses were **$24.0 million** in Q1 2022[83](index=83&type=chunk)[84](index=84&type=chunk) [Note 10. Income Taxes](index=23&type=section&id=Note%2010.%20Income%20Taxes) Discusses unrecognized tax benefits and reconciles the statutory income tax rate to the effective tax rate - The gross liability for unrecognized tax benefits was **$15.8 million** at March 31, 2022, with **$1.4 million** in accrued interest and penalties[86](index=86&type=chunk)[87](index=87&type=chunk) Effective Income Tax Rate Reconciliation | Factor | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Statutory rate | 21.0 % | 21.0 % | | State taxes, net of federal tax benefit | 2.9 % | 3.1 % | | Foreign tax expense and tax rate differential | (0.1) % | (0.1) % | | Tax benefit from stock option exercises | (0.4) % | (1.1) % | | Other, net | (0.3) % | (0.3) % | | **Effective tax rate** | **23.1 %** | **22.6 %** | - The effective tax rate increased to **23.1%** in Q1 2022 from **22.6%** in Q1 2021, primarily due to decreased tax benefits from lower stock option exercises[88](index=88&type=chunk) [Note 11. Commitments and Contingencies](index=24&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) Outlines ongoing legal proceedings, including the Stanford Trust Company and SS&C Advent litigations, and their potential impact - The Company is involved in various legal proceedings, including the Stanford Trust Company litigation and the SS&C Advent litigation. In the Stanford Trust cases, federal class actions have been dismissed, and the Company expects remaining ancillary litigations to be resolved in its favor[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - In the SS&C Advent litigation, SEI Global Services, Inc. (SGSI) filed a complaint alleging breach of contract and other claims. A New York State Court judge granted SGSI's motion for injunctive relief, affirming SGSI's likely success on breach of contract claims and rejecting SS&C Advent's arguments regarding license termination[96](index=96&type=chunk)[99](index=99&type=chunk)[104](index=104&type=chunk)[107](index=107&type=chunk) - SGSI's motion for partial summary judgment was granted on April 15, 2022, confirming the perpetual nature of the licenses and that SS&C Advent's termination attempt was a breach of contract. SEI expects the financial impact of this litigation to be immaterial[104](index=104&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk) [Note 12. Goodwill and Intangible Assets](index=27&type=section&id=Note%2012.%20Goodwill%20and%20Intangible%20Assets) Reports goodwill by segment and details amortization expense for intangible assets, reflecting recent acquisitions Goodwill by Segment (in thousands) | Segment | Balance, December 31, 2021 | Balance, March 31, 2022 | | :------------------------ | :----------------------- | :---------------------- | | Institutional Investors | $48,911 | $48,911 | | Investment Managers | $56,822 | $57,024 | | Investments in New Businesses | $11,499 | $11,499 | | Total Goodwill | $117,232 | $117,434 | - Goodwill increased slightly due to measurement period adjustments and foreign currency translation. Recent acquisitions in Q4 2021, Finomial and Novus Partners, contributed **$4.036 million** and **$48.911 million** to goodwill, respectively[111](index=111&type=chunk)[112](index=112&type=chunk) - Amortization expense for intangible assets acquired through acquisitions increased to **$3.3 million** in Q1 2022 from **$0.9 million** in Q1 2021, reflecting the impact of recent acquisitions[115](index=115&type=chunk) [Note 13. Revenues from Contracts with Customers](index=28&type=section&id=Note%2013.%20Revenues%20from%20Contracts%20with%20Customers) Disaggregates revenues by major product lines and primary geographic markets, including details on one-time termination fees - The Company's principal revenue sources are asset management, administration, and distribution fees (based on assets) and information processing and software servicing fees (recurring or project-oriented)[116](index=116&type=chunk) Disaggregated Revenues by Major Product Lines (Three Months Ended March 31, 2022) | Major Product Lines (in thousands) | Private Banks | Investment Advisors | Institutional Investors | Investment Managers | Investments in New Businesses | Total | | :--------------------------------- | :------------ | :------------------ | :---------------------- | :------------------ | :---------------------------- | :---- | | Investment management fees from pooled investment products | $33,118 | $71,993 | $13,866 | $84 | $367 | $119,428 | | Investment management fees from investment management agreements | $255 | $42,008 | $68,460 | — | $4,126 | $114,849 | | Investment operations fees | $360 | — | — | $145,379 | — | $145,739 | | Investment processing fees - PaaS | $56,455 | — | — | — | — | $56,455 | | Investment processing fees - SaaS | $29,559 | — | $3,110 | $3,658 | — | $36,327 | | Professional services fees | $92,729 | — | — | $389 | — | $93,118 | | Account fees and other | $1,072 | $5,229 | $1,403 | $7,391 | $432 | $15,527 | | **Total Revenues** | **$213,548** | **$119,230** | **$86,839** | **$156,901** | **$4,925** | **$581,443** | - Professional services fees in the Private Banks segment include **$88.0 million** in one-time early termination fees from a significant client, recognized entirely in Q1 2022 due to no future performance obligations[117](index=117&type=chunk) Disaggregated Revenues by Primary Geographic Markets (Three Months Ended March 31, 2022) | Primary Geographic Markets (in thousands) | Private Banks | Investment Advisors | Institutional Investors | Investment Managers | Investments in New Businesses | Total | | :---------------------------------------- | :------------ | :------------------ | :---------------------- | :------------------ | :---------------------------- | :---- | | United States | $80,886 | $119,230 | $70,563 | $144,025 | $4,925 | $419,629 | | United Kingdom | $116,663 | — | $12,749 | — | — | $129,412 | | Canada | $11,800 | — | $1,242 | — | — | $13,042 | | Ireland | $4,199 | — | $2,167 | $9,822 | — | $16,188 | | Luxembourg | — | — | — | $3,054 | — | $3,054 | | Other | — | — | $118 | — | — | $118 | | **Total Revenues** | **$213,548** | **$119,230** | **$86,839** | **$156,901** | **$4,925** | **$581,443** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the Company's financial condition and results of operations for the three months ended March 31, 2022, compared to the prior year. It highlights key drivers of revenue and expense changes, segment performance, asset balances, and liquidity, along with an overview of regulatory matters and forward-looking statements [Overview](index=31&type=section&id=Overview) Provides a high-level summary of the company's business, asset balances, and key financial performance metrics for the quarter - SEI is a global provider of technology-driven wealth and investment management solutions, managing, advising, or administering **$1.3 trillion** in assets as of March 31, 2022, including **$385.3 billion** in assets under management and **$899.6 billion** in client assets under administration[131](index=131&type=chunk) Consolidated Summary of Operations (Three Months Ended March 31) | Metric (in thousands) | 2022 | 2021 | Percent Change | | :-------------------- | :-------- | :-------- | :------------- | | Revenues | $581,443 | $455,686 | 28% | | Expenses | $366,644 | $322,849 | 14% | | Income from operations| $214,799 | $132,837 | 62% | | Net income | $190,308 | $129,470 | 47% | | Diluted EPS | $1.36 | $0.89 | 53% | - Key impacts include a **28% increase in revenues**, driven by higher asset management/administration fees and a one-time **$88.0 million** early termination fee from a Private Banks segment client. Operating expenses increased by **14%** due to direct costs, higher personnel costs, and acquisition-related expenses[133](index=133&type=chunk)[134](index=134&type=chunk) [Ending Asset Balances](index=33&type=section&id=Ending%20Asset%20Balances) Presents the company's total assets under management and administration by segment as of March 31, 2022 Ending Asset Balances by Segment (as of March 31, 2022, in millions) | Segment | Total Assets Under Management | Client Assets Under Administration/Advisement | Total Assets | | :------------------------ | :---------------------------- | :-------------------------------------------- | :----------- | | Private Banks | $29,567 | $4,449 | $34,016 | | Investment Advisors | $82,224 | $14,151 (Platform-only) | $96,375 | | Institutional Investors | $89,514 | $4,778 (Advisement) | $94,292 | | Investment Managers | $85,695 | $895,181 | $980,876 | | Investments in New Businesses | $2,362 | $1,401 (Advisement) | $3,763 | | LSV | $95,962 | — | $95,962 | | **Total** | **$385,324** | **$919,960** | **$1,305,284** | - Total assets increased by **5%** to **$1.3 trillion** as of March 31, 2022, compared to March 31, 2021. Client assets under administration in the Investment Managers segment grew by **8%** to **$895.2 billion**[136](index=136&type=chunk) [Average Asset Balances](index=35&type=section&id=Average%20Asset%20Balances) Details the average assets under management and administration by segment for the three months ended March 31, 2022 Average Asset Balances by Segment (Three Months Ended March 31, 2022, in millions) | Segment | Total Average Assets Under Management | Average Client Assets Under Administration/Advisement | Total Average Assets | | :------------------------ | :------------------------------------ | :---------------------------------------------------- | :------------------- | | Private Banks | $30,046 | $4,500 | $34,546 |\ | Investment Advisors | $82,727 | $13,978 (Platform-only) | $96,705 |\ | Institutional Investors | $91,478 | $4,889 (Advisement) | $96,367 |\ | Investment Managers | $87,065 | $888,854 | $975,919 |\ | Investments in New Businesses | $2,311 | $1,397 (Advisement) | $3,708 |\ | LSV | $96,449 | — | $96,449 |\ | **Total** | **$390,076** | **$910,220** | **$1,303,694** | - Total average assets increased by **7%** to **$1.3 trillion** for the three months ended March 31, 2022, compared to the prior year. Average client assets under administration grew by **9%** to **$893.4 billion**[139](index=139&type=chunk) [Business Segments](index=37&type=section&id=Business%20Segments) Analyzes the revenue and operating profit performance of each business segment, highlighting key drivers of change Segment Performance (Three Months Ended March 31, 2022 vs. 2021) | Segment | 2022 Revenues (in thousands) | 2021 Revenues (in thousands) | Revenue Change | 2022 Operating Profit (in thousands) | 2021 Operating Profit (in thousands) | Operating Profit Change | | :------------------------ | :--------------------------- | :--------------------------- | :------------- | :----------------------------------- | :----------------------------------- | :---------------------- | | Private Banks | $213,548 | $117,608 | 82% | $91,593 | $6,884 | NM | | Investment Advisors | $119,230 | $113,294 | 5% | $54,710 | $58,267 | (6)% | | Institutional Investors | $86,839 | $84,499 | 3% | $41,481 | $45,341 | (9)% | | Investment Managers | $156,901 | $136,419 | 15% | $58,064 | $53,399 | 9% | | Investments in New Businesses | $4,925 | $3,866 | 27% | $(7,025) | $(9,538) | NM | - Private Banks revenues surged **82%** due to an **$88.0 million** early termination fee and increased investment processing fees. Investment Advisors saw a **5%** revenue increase from separately managed account fees, despite decreased investment management fees[144](index=144&type=chunk)[145](index=145&type=chunk) - Institutional Investors' revenues grew **3%** from acquisitions (SEI Novus, Atlas Master Trust) and market appreciation, but operating profit declined **9%** due to increased personnel and professional fees related to these acquisitions. Investment Managers' revenues increased **15%** from higher client asset valuations and positive cash flows[148](index=148&type=chunk) [Other Financial Information](index=39&type=section&id=Other) Covers corporate overhead, other income/expense, amortization, tax rates, and cash flow activities for the period - Corporate overhead expenses increased to **$24.0 million** in Q1 2022, up from **$21.5 million** in Q1 2021, primarily due to higher personnel, consulting, and professional fees[149](index=149&type=chunk) Other Income and Expense Items (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net (loss) gain from investments | $(489) | $332 | | Interest and dividend income | $848 | $945 | | Interest expense | $(250) | $(123) | | Equity in earnings of unconsolidated affiliate | $32,459 | $33,350 | | Total other income and expense items, net | $32,568 | $34,504 | - Equity in earnings from LSV decreased by **3%** to **$32.5 million** in Q1 2022, mainly due to negative cash flows and client losses offsetting market appreciation. Total amortization expense increased to **$16.9 million**, driven by acquisitions and SWP enhancements[152](index=152&type=chunk)[153](index=153&type=chunk)[155](index=155&type=chunk) - The effective income tax rate increased to **23.1%** in Q1 2022, primarily due to decreased tax benefits from lower stock option exercises. Stock-based compensation expense was **$10.6 million**[156](index=156&type=chunk)[157](index=157&type=chunk) - Net cash provided by operating activities increased by **$123.9 million** in Q1 2022. Net cash used in financing activities included **$100.2 million** for common stock repurchases and **$55.5 million** for dividend payments[161](index=161&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[172](index=172&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section refers to the Company's Annual Report on Form 10-K for the year ended December 31, 2021, for detailed information on quantitative and qualitative disclosures about market risk. No material changes to this information were reported for the current period - No material changes to market risk disclosures were reported from the Annual Report on Form 10-K for the year ended December 31, 2021[185](index=185&type=chunk) [Item 4. Controls and Procedures.](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management, including the CEO and CFO, evaluated the effectiveness of the Company's disclosure controls and procedures as of March 31, 2022, concluding they were effective. No material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were evaluated as effective as of March 31, 2022[186](index=186&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2022[187](index=187&type=chunk) [PART II - OTHER INFORMATION](index=49&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings.](index=49&type=section&id=Item%201.%20Legal%20Proceedings.) The Company and its subsidiaries are involved in various legal proceedings in the ordinary course of business, which are not believed to be material. Details of these proceedings are summarized in Note 11 to the Consolidated Financial Statements - The Company is party to various legal proceedings, examinations, and investigations arising in the ordinary course of business, none of which are believed to have a material adverse effect on SEI as a whole[189](index=189&type=chunk) - Specific proceedings are detailed in Note 11, including the Stanford Trust Company litigation and SS&C Advent litigation[189](index=189&type=chunk) [Item 1A. Risk Factors.](index=49&type=section&id=Item%201A.%20Risk%20Factors.) This section refers to the Company's Annual Report on Form 10-K for the year ended December 31, 2021, for a comprehensive discussion of risk factors. No material changes to these risk factors were reported for the current period - No material changes in risk factors were reported from those disclosed in the Annual Report on Form 10-K for 2021[190](index=190&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The Company's Board of Directors has authorized a common stock repurchase program. During the three months ended March 31, 2022, the Company repurchased 1.713 million shares for a total cost of $100.09 million - The Board of Directors has authorized the repurchase of up to **$5.128 billion** worth of common stock, with no expiration date[191](index=191&type=chunk) Common Stock Repurchases (Three Months Ended March 31, 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | | :---------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------------- | | January 2022| 163,000 | $56.12 | $222,163,000 | | February 2022| 764,000 | $58.87 | $177,187,000 | | March 2022 | 786,000 | $58.46 | $131,204,000 | | **Total** | **1,713,000** | **$58.43** | — | [Item 6. Exhibits.](index=49&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed as part of the Form 10-Q, including certifications (Rule 13a-15(e)/15d-15(e) and Section 1350) and XBRL-related documents - Exhibits include CEO and CFO certifications (Rule 13a-15(e)/15d-15(e) and Section 1350) and various XBRL taxonomy documents[193](index=193&type=chunk) [Signatures](index=50&type=section&id=Signatures) The report is duly signed on behalf of SEI Investments Company by Dennis J. McGonigle, Chief Financial Officer, on April 25, 2022 - The report was signed by Dennis J. McGonigle, Chief Financial Officer, on April 25, 2022[195](index=195&type=chunk)