SEI(SEIC) - 2025 Q2 - Quarterly Results

Second-Quarter 2025 Financial Results Overview SEI reported strong financial results for Q2 2025, with significant increases in diluted EPS, revenue, and operating income compared to Q2 2024, notably boosted by a gain on the sale of its Family Office Services business Consolidated Financial Performance SEI reported strong financial results for Q2 2025, with significant increases in diluted EPS, revenue, and operating income compared to Q2 2024, notably boosted by a gain on the sale of its Family Office Services business | Metric (Thousands of USD) | Q2 2025 | Q2 2024 | % Change (YoY) | | :------------------------ | :---------- | :---------- | :------------- | | Revenues | $559,601 | $518,986 | 8% | | Operating income | $148,635 | $136,514 | 9% | | Operating margin | 27% | 26% | 4% | | Net income | $227,083 | $139,120 | 63% | | Diluted earnings per share | $1.78 | $1.05 | 70% | - Q2 2025 diluted EPS benefited by $0.58 from several items affecting comparability, most notably a $94.4 million gain on the sale of SEI's Family Office Services business[2] CEO Commentary and Strategic Highlights CEO Ryan Hicke highlighted a strong quarter across core businesses, emphasizing conviction and discipline in execution for sustained growth, while making intentional investments in talent, technology, and infrastructure - SEI is making intentional investments in talent, technology, and infrastructure to enhance capabilities and scale for expected growth[3] - Strategic investment in Stratos demonstrates commitment to innovation in wealth management solutions[4] - Two highly experienced, independent directors, Karin Risi and Tom Naratil, joined the Board to support growth strategies[5] Business Segment Performance SEI's business segments showed varied performance in Q2 2025, with strong revenue and operating profit growth in Investment Managers, Private Banks, and Investment Advisors, while Institutional Investors experienced a revenue decline Investment Managers The Investment Managers segment saw an 8% increase in revenues and a 7% rise in operating profit for Q2 2025, driven by double-digit growth in alternative manager revenue, despite a slight decline in traditional revenue due to market volatility, with the operating profit margin remaining stable at 38% | Metric (Thousands of USD) | Q2 2025 | Q2 2024 | % Change (YoY) | | :---------------- | :---------- | :---------- | :------------- | | Revenues | $195,067 | $179,868 | 8% | | Expenses | $121,636 | $111,287 | 9% | | Operating Profit | $73,431 | $68,581 | 7% | | Operating Margin | 38% | 38% | — | | YTD Revenues | $387,115 | $352,521 | 10% | | YTD Operating Profit | $148,268 | $131,684 | 13% | - Operating profit growth was driven by a double-digit increase in alternative manager revenue, partially offset by a slight decline in traditional revenue due to volatile Q2 market valuations[7] - Operating profit margin declined vs Q1 2025 due to hiring ahead of expected new business and a challenging comparison due to first quarter delays in hiring[7] Private Banks Private Banks experienced a 7% revenue increase and an 11% operating profit growth in Q2 2025, reflecting continued momentum and the positive impact of new client implementations, with the operating margin improving slightly to 16% | Metric (Thousands of USD) | Q2 2025 | Q2 2024 | % Change (YoY) | | :---------------- | :---------- | :---------- | :------------- | | Revenues | $141,449 | $132,401 | 7% | | Expenses | $118,724 | $111,890 | 6% | | Operating Profit | $22,725 | $20,511 | 11% | | Operating Margin | 16% | 15% | — | | YTD Revenues | $279,163 | $262,538 | 6% | | YTD Operating Profit | $45,690 | $37,674 | 21% | - Operating profit growth reflects continued momentum and the positive impact of several clients going live in the quarter[7] Investment Advisors The Investment Advisors segment showed strong performance with a 14% revenue increase and a 19% operating profit growth in Q2 2025, significantly boosted by SEI's integrated cash program, with the operating margin improving to 45% | Metric (Thousands of USD) | Q2 2025 | Q2 2024 | % Change (YoY) | | :---------------- | :---------- | :---------- | :------------- | | Revenues | $137,193 | $120,587 | 14% | | Expenses | $75,801 | $68,953 | 10% | | Operating Profit | $61,392 | $51,634 | 19% | | Operating Margin | 45% | 43% | — | | YTD Revenues | $273,769 | $243,305 | 13% | | YTD Operating Profit | $125,513 | $107,394 | 17% | - Operating profit growth reflects a $21 million contribution from SEI's integrated cash program, an $11 million increase from Q2 2024[7] - Realized flat revenue growth relative to Q1 2025 as market appreciation in May and June offset significant declines realized in April[7] Institutional Investors Institutional Investors experienced a 3% decline in revenues but a 1% increase in operating profit for Q2 2025, with the operating margin improving to 48%, and revenue growth was flat compared to Q1 2025, with market appreciation offsetting April declines | Metric (Thousands of USD) | Q2 2025 | Q2 2024 | % Change (YoY) | | :---------------- | :---------- | :---------- | :------------- | | Revenues | $69,343 | $71,507 | (3)% | | Expenses | $35,857 | $38,426 | (7)% | | Operating Profit | $33,486 | $33,081 | 1% | | Operating Margin | 48% | 46% | — | | YTD Revenues | $137,849 | $143,285 | (4)% | | YTD Operating Profit | $66,122 | $64,750 | 2% | - Realized flat revenue growth relative to Q1 2025 as market appreciation in May and June offset significant declines realized in April[7] Investments in New Businesses The Investments in New Businesses segment reported a 13% increase in revenues and a significant 52% reduction in operating loss for Q2 2025, indicating improved performance and reduced investment costs | Metric (Thousands of USD) | Q2 2025 | Q2 2024 | % Change (YoY) | | :---------------- | :---------- | :---------- | :------------- | | Revenues | $16,549 | $14,623 | 13% | | Expenses | $18,430 | $18,580 | (1)% | | Operating Loss | ($1,881) | ($3,957) | (52)% | | YTD Revenues | $33,049 | $28,916 | 14% | | YTD Operating Loss | ($3,877) | ($8,047) | (52)% | Key Business Highlights and Operational Metrics SEI's Q2 2025 performance was marked by significant EPS growth driven by strategic asset sales, record net sales events, and improved asset balances, alongside continued share repurchases Earnings Per Share Drivers SEI's diluted EPS of $1.78 in Q2 2025, a 70% increase YoY, was significantly influenced by a $0.60 benefit from the sale of the Family Office Services business and a settlement gain, partially offset by a $0.02 loss from FX transactions and M&A legal fees related to the Stratos acquisition - Diluted EPS of $1.78, up 70% from prior year, includes a $0.58 impact from several items[7] - A $0.60 benefit was associated with the gain on sale of the Family Office Services business and a settlement gain from vendor negotiation[7] - A $0.02 combined loss resulted from FX transaction losses and M&A legal fees from the Stratos Wealth Holdings acquisition[7] Sales Events and Pipeline Health Net sales events reached a record $29.2 million in Q2 2025, contributing to a trailing 12-month record of $160.4 million, primarily driven by the Investment Managers business, with healthy sales pipelines across all segments, including significant improvement in Private Banking and Asset Management businesses - Net sales events during Q2 2025 were $29.2 million, contributing to a new record of $160.4 million for the trailing 12 months[7] - Sales events were driven by the Investment Managers business, with a balanced mix of wins across alternatives, traditional, and international investment managers[7] - Sales pipelines across all SEI's businesses remain healthy, with considerable improvement in net sales events for Private Banking and Asset Management businesses against 2024 losses[7] Asset Under Management/Administration Trends Average assets under administration (AUA) increased by 4% and average assets under management (AUM) increased by 2% relative to Q1 2025, with ending AUM growing by 6% from Q1 to Q2, primarily due to significant market appreciation in May and June, and net outflows for Institutional Investors and Investment Advisors improved significantly year-to-date - Average assets under administration increased by 4%, and average assets under management increased 2% relative to Q1 2025[7] - Ending assets under management increased by 6% from Q1 to Q2, reflecting significant market appreciation during May and June[7] - Institutional Investors and Investment Advisors net flows improved year-to-date, posting just over $1 billion of net outflows against more than $7 billion in the first half of 2024[7] Share Repurchase Program SEI repurchased 2.2 million shares of common stock for $180.8 million during Q2 2025 at an average price of $83.60 per share, bringing the total repurchased shares to 9.0 million for the trailing 12 months - SEI repurchased 2.2 million shares of common stock for $180.8 million during Q2 2025 at an average price of $83.60 per share[7] - Total shares repurchased for the trailing 12 months amounted to 9.0 million[7] Financial Statements This section presents SEI's consolidated statements of operations, balance sheets, and cash flows, detailing the company's financial performance and position for Q2 2025 and year-to-date Consolidated Statements of Operations The Consolidated Statements of Operations detail SEI's revenues, expenses, and profitability for the three and six months ended June 30, 2025, compared to the same periods in 2024, with key highlights including significant increases in net income and diluted EPS, largely influenced by the gain on sale of business | Metric (Thousands of USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------- | :---------- | :---------- | :---------- | :---------- | | Total revenues | $559,601 | $518,986 | $1,110,945 | $1,030,565 | | Total expenses | $410,966 | $382,472 | $805,213 | $768,200 | | Income from operations | $148,635 | $136,514 | $305,732 | $262,365 | | Gain on sale of business | $94,412 | — | $94,412 | — | | Net income | $227,083 | $139,120 | $378,600 | $270,520 | | Diluted earnings per common share | $1.78 | $1.05 | $2.95 | $2.04 | | Dividends declared per common share | $0.49 | $0.46 | $0.49 | $0.46 | Consolidated Balance Sheets The Consolidated Balance Sheets provide a snapshot of SEI's financial position as of June 30, 2025, compared to December 31, 2024, showing that total assets slightly decreased, while total liabilities saw a notable reduction, leading to an increase in total shareholders' equity | Metric (Thousands of USD) | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Total Current Assets | $1,531,004 | $1,551,810 | | Total Assets | $2,626,266 | $2,684,606 | | Total Current Liabilities | $247,574 | $380,513 | | Total Liabilities | $287,827 | $432,494 | | Total Shareholders' Equity | $2,338,439 | $2,252,112 | - Cash and cash equivalents decreased from $840.193 million at Dec 31, 2024, to $746.349 million at June 30, 2025[14] - Accrued liabilities significantly decreased from $347.513 million to $214.507 million[14] Consolidated Condensed Statements of Cash Flows The Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2025, show a net decrease in cash, cash equivalents, and restricted cash, with operating activities providing cash, while financing activities used a significant amount, and investing activities provided cash, a reversal from the prior year | Metric (Thousands of USD) | YTD 2025 | YTD 2024 | | :-------------------------------------------------- | :---------- | :---------- | | Net cash provided by operating activities | $243,005 | $227,030 | | Net cash provided by/(used in) investing activities | $65,268 | ($61,082) | | Net cash used in financing activities | ($419,220) | ($229,687) | | Net decrease in cash, cash equivalents and restricted cash | ($93,844) | ($66,406) | | Cash, cash equivalents and restricted cash, end of period | $746,349 | $768,592 | - Investing activities shifted from a net cash outflow of $61.082 million in YTD 2024 to a net cash inflow of $65.268 million in YTD 2025[16] - Net cash used in financing activities significantly increased from $229.687 million in YTD 2024 to $419.220 million in YTD 2025[16] Asset Balances SEI's asset balances demonstrated growth in Q2 2025, with total assets under management, advisement, and administration reaching approximately $1.69 trillion by quarter-end, reflecting market appreciation and strategic divestitures Ending Asset Balances As of June 30, 2025, SEI's total ending assets under management, advisement, and administration reached approximately $1.69 trillion, showing growth across most segments compared to previous quarters, particularly in Investment Managers and Investment Advisors | Metric (Millions of USD) | Jun. 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 | | :-------------------------------- | :------------ | :------------ | :------------ | | Total assets under management | $517,496 | $485,976 | $476,713 | | Client assets under advisement | $8,683 | $7,792 | $8,140 | | Client assets under administration | $1,136,756 | $1,084,278 | $1,055,943 | | Total assets | $1,694,938 | $1,605,853 | $1,568,438 | - Investment Managers' total assets increased from $1.270802 trillion (Mar 31, 2025) to $1.354322 trillion (Jun 30, 2025)[18] - Client assets under administration related to the Family Office Services business were divested on June 30, 2025[20] Average Asset Balances For Q2 2025, SEI's total average assets under management, advisement, and administration were approximately $1.66 trillion, showing a consistent upward trend over the past year, with Investment Managers and Investment Advisors segments contributing significantly to this growth | Metric (Millions of USD) | 2nd Qtr. 2025 | 1st Qtr. 2025 | 4th Qtr. 2024 | | :-------------------------------- | :------------ | :------------ | :------------ | | Total assets under management | $496,867 | $487,254 | $486,481 | | Client assets under advisement | $8,170 | $7,946 | $9,101 | | Client assets under administration | $1,122,108 | $1,084,400 | $1,057,856 | | Total assets | $1,656,585 | $1,607,726 | $1,580,733 | - Investment Managers' average total assets increased from $1.270258 trillion (Q1 2025) to $1.314298 trillion (Q2 2025)[22] - Client assets under administration include $14.9 billion of average assets during Q2 2025 related to the Family Office Services business, which was divested on June 30, 2025[24] Sales Events SEI's Q2 2025 sales events totaled $29.170 million, a decrease from the prior quarter, with Investment Processing-related Businesses driving recurring and non-recurring sales, while Asset Management-related Businesses showed mixed results Net Recurring Sales Events Net recurring sales events for Q2 2025 totaled $24.143 million, a decrease from the previous quarter but still showing positive contributions from Investment Processing-related Businesses and Newer Initiatives, while Asset Management-related Businesses, particularly Investment Advisors, experienced net outflows | Business Category (Thousands of USD) | Q2 2025 | Q1 2025 | Q4 2024 | | :---------------------------------- | :---------- | :---------- | :---------- | | Total Investment Processing-related Businesses | $22,182 | $32,355 | $27,272 | | Total Asset Management-related Businesses | $716 | $871 | ($839) | | Investments in New Businesses | $1,245 | $3,614 | $1,778 | | Total Net Recurring Sales Events | $24,143 | $36,840 | $28,211 | - Investment Managers' net recurring sales events were $21.928 million in Q2 2025[26] - Private Banks' net recurring sales events significantly decreased to $0.254 million in Q2 2025 from $7.059 million in Q1 2025[26] Non-Recurring Sales Events Non-recurring sales events for Q2 2025 amounted to $5.027 million, a decrease from the prior quarter, with Investment Processing-related Businesses and Newer Initiatives continuing to generate non-recurring sales | Business Category (Thousands of USD) | Q2 2025 | Q1 2025 | Q4 2024 | | :---------------------------------- | :---------- | :---------- | :---------- | | Total Investment Processing-related Businesses | $3,475 | $7,895 | $9,087 | | Investments in New Businesses | $1,552 | $1,834 | $921 | | Total Non-Recurring Sales Events | $5,027 | $9,729 | $10,008 | - Private Banks' non-recurring sales events decreased to $2.373 million in Q2 2025 from $7.060 million in Q1 2025[28] Total Sales Events Total sales events for Q2 2025 were $29.170 million, a decline from the previous quarter but still reflecting positive contributions from Investment Processing-related Businesses and Newer Initiatives, while Asset Management-related Businesses continued to show mixed results | Business Category (Thousands of USD) | Q2 2025 | Q1 2025 | Q4 2024 | | :---------------------------------- | :---------- | :---------- | :---------- | | Total Investment Processing-related Businesses | $25,657 | $40,250 | $36,359 | | Total Asset Management-related Businesses | $716 | $871 | ($839) | | Investments in New Businesses | $2,797 | $5,448 | $2,699 | | Total Sales Events | $29,170 | $46,569 | $38,219 | - Private Banks' total sales events significantly decreased to $2.627 million in Q2 2025 from $14.119 million in Q1 2025[30] - Institutional Investors' total sales events turned positive at $2.544 million in Q2 2025, compared to $0.041 million in Q1 2025 and negative values in prior quarters[30] Additional Information This section provides details on SEI's upcoming earnings conference call, an overview of the company's global services, and important disclosures regarding forward-looking statements and associated risks Earnings Conference Call Details SEI scheduled an earnings conference call and presentation for July 23, 2025, at 5 p.m. Eastern time, inviting analysts, investors, and the public to register and access the event online - A conference call and presentation to review earnings is scheduled for 5 p.m. Eastern time on July 23, 2025[8] - Analysts and investors can register via a provided link, and the public can listen to the call and replay at ir.seic.com/events-presentations/events[8] About SEI SEI is a global provider of financial technology, operations, and asset management services, aiming to help clients deploy capital effectively, managing, advising, or administering approximately $1.7 trillion in assets as of June 30, 2025 - SEI is a leading global provider of financial technology, operations, and asset management services[8] - As of June 30, 2025, SEI manages, advises, or administers approximately $1.7 trillion in assets[8] Forward-Looking Statements The release contains forward-looking statements regarding SEI's future growth, investments, goals, pipeline strength, profitability, cost discipline, and revenue generation from sales events, which are subject to risks and uncertainties outlined in the company's Annual Report on Form 10-K - Forward-looking statements include expectations regarding sustained growth, nature of internal investments, company goals, strength of pipelines, focus on profitability and cost leverage, cost discipline, investment priorities, and generation of net annualized recurring revenues from sales events[9][10] - These statements are based on management's current beliefs and expectations and are subject to significant risks and uncertainties, as detailed in the 'Risk Factors' section of the Annual Report on Form 10-K[9]