SEI(SEIC) - 2024 Q2 - Quarterly Report

Financial Performance - Revenues for the three months ended June 30, 2024, increased by 6% to $518.986 million compared to$ 489.057 million in 2023, while revenues for the six months rose by 8% to $1.030565 billion from$ 958.176 million [122]. - Net income for the three months ended June 30, 2024, was $139.120 million, a 17% increase from$ 118.851 million in 2023, and for the six months, net income rose by 20% to $270.520 million from$ 225.866 million [122]. - Total revenues increased by $11.0 million, or 10%, in the three-month period and by$ 27.2 million, or 13%, in the six-month period, primarily driven by increased investment processing fees and management fees [138]. - Operating income increased by $2.3 million, or 12%, in the three-month period and by$ 11.0 million, or 41%, in the six-month period ended June 30, 2024 [137]. Assets and Administration - Average assets under administration increased by $131.4 billion, or 15%, to$ 983.6 billion in the first six months of 2024, compared to $852.2 billion in the same period of 2023 [123]. - Total assets under management as of June 30, 2024, reached$ 470.525 billion, a 13% increase from $417.967 billion in 2023 [126]. - Client assets under administration increased by 16% to$ 1.020976 trillion as of June 30, 2024, compared to $877.724 billion in 2023 [126]. - Total assets under management increased by 13% to$ 466.5 billion for the three months ended June 30, 2024, compared to $411.4 billion in the same period of 2023 [130]. - Client assets under administration rose by 16% to$ 1,005.4 billion for the three months ended June 30, 2024, from $863.6 billion in the prior year [130]. Revenue Sources - The SEI Integrated Cash Program generated$ 10.1 million in revenue during Q2 2024 and $19.7 million in the first six months of 2024 [123]. - Revenues for Private Banks remained flat at$ 132.4 million for the three months ended June 30, 2024, while increasing by 4% to $262.5 million for the six months ended June 30, 2024 [134]. - Investment Advisors' revenues grew by 10% to$ 120.6 million for the three months ended June 30, 2024, and by 13% to $243.3 million for the six months ended June 30, 2024 [134]. - Institutional Investors' revenues decreased by 5% to$ 71.5 million for the three months ended June 30, 2024, and by 4% to $143.3 million for the six months ended June 30, 2024 [134]. - Investment Managers' revenues increased by 13% to$ 179.9 million for the three months ended June 30, 2024, and by 12% to $352.5 million for the six months ended June 30, 2024 [134]. - Total revenues from SEI Family Office Services increased by 15% to$ 14.6 million in the three-month period and by 13% to $28.9 million in the six-month period [143]. Operating Expenses - Operating expenses rose by 3% to$ 768.200 million for the six months ended June 30, 2024, primarily due to higher personnel costs and inflation [122]. - Corporate overhead expenses rose to $33.3 million in Q2 2024 from$ 32.4 million in Q2 2023, primarily due to severance costs and technology upgrades [144]. - Stock-based compensation expense increased to $23.5 million in the first half of 2024, up from$ 15.5 million in the same period of 2023, due to new equity awards [153]. Cash Flow and Capital Expenditures - Net cash provided by operating activities increased to $227.0 million for the six months ended June 30, 2024, compared to$ 182.5 million in the same period of 2023, reflecting a $44.6 million increase primarily from higher net income [158]. - Cash and cash equivalents at the end of the period were$ 768.6 million, down from $777.4 million at the end of June 2023, indicating a net decrease of$ 66.4 million [158]. - Capital expenditures for the first six months of 2024 were $20.8 million, up from$ 16.5 million in the same period of 2023, reflecting ongoing investments in technology infrastructure [164]. - Total capital outlays for common stock repurchase amounted to $163.8 million in the first six months of 2024, compared to$ 156.2 million in the same period of 2023 [164]. - Cash dividends paid increased to $120.3 million in the first half of 2024, compared to$ 114.8 million in the same period of 2023 [164]. Regulatory and Compliance Risks - The company is subject to increased regulatory scrutiny, which could have a material adverse effect on its operations and financial position [171]. - Compliance with economic sanctions and anti-corruption laws may incur higher costs and compliance risks for the company [175]. - The company is subject to various privacy and data protection regulations, including GDPR and CCPA, which involve substantial compliance costs [176]. - Increased regulatory activity affecting financial services firms may significantly impact the company's operations and expenses [177]. - The company engages legal counsel and subject matter experts to review compliance procedures and may incur increased expenses or reduced revenues as a result [178]. - Bank clients are supervised by financial authorities, which may affect their purchasing decisions regarding the company's products and services [179]. - The company has disclosed risks related to capital market fluctuations and interest rate changes in its Annual Report on Form 10-K for the year ended December 31, 2023 [181].