SEI(US:SEIC)2025-07-28 18:16PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited consolidated financial statements for the three and six months ended June 30, 2025 and 2024, highlighting a 7.8% year-over-year increase in total revenues to $1.11 billion and a 40% increase in net income to $378.6 million, significantly boosted by a $94.4 million gain on the sale of a business Consolidated Statement of Operations Highlights (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1,110,945 | $1,030,565 | +7.8% | | Income from Operations | $305,732 | $262,365 | +16.5% | | Gain on sale of business | $94,412 | $0 | N/A | | Net Income | $378,600 | $270,520 | +40.0% | | Diluted EPS | $2.95 | $2.04 | +44.6% | Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Total Assets | $2,626,266 | $2,684,606 | -2.2% | | Cash and cash equivalents | $746,349 | $840,193 | -11.2% | | Total Liabilities | $287,827 | $432,494 | -33.5% | | Total Shareholders' Equity | $2,338,439 | $2,252,112 | +3.8% | Consolidated Cash Flow Highlights (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | 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) | Notes to Consolidated Financial Statements The notes provide detailed explanations of accounting policies and breakdowns of financial statement items, including revenue recognition, equity method investments, segment performance, a business divestiture, and subsequent strategic investment agreements - The company operates through three main platforms: Investment processing, Investment operations, and Investment management, which form the basis of its revenue streams272829 - The company's 38.5% interest in LSV Asset Management contributed $62.4 million to earnings in the first six months of 2025, a decrease from $65.9 million in the prior year period4547 - On June 30, 2025, the company completed the sale of its Family Office Services business to Aquiline Capital Partners, recognizing a gain of $94.4 million132 - Subsequent to the quarter end, on July 17, 2025, the company entered into a definitive agreement to acquire a 57.5% equity stake in Stratos Wealth Holdings for approximately $527 million133 Segment Profit (Six Months Ended June 30, 2025) | Segment | Revenue (in thousands) | Segment Profit (in thousands) | | :--- | :--- | :--- | | Investment Managers | $387,115 | $148,268 | | Private Banks | $279,163 | $45,690 | | Investment Advisors | $273,769 | $125,513 | | Institutional Investors | $137,849 | $66,122 | | Investments in New Businesses | $33,049 | $(3,877) | Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 8% revenue growth for the first half of 2025 to higher assets under administration in the Investment Managers segment, market appreciation, and positive cash flows in the Investment Advisors segment, with net income growth significantly impacted by a $94.4 million gain from a business sale Overview Consolidated revenues for the first six months of 2025 increased by 8% year-over-year, driven by growth in asset management and administration fees, while net income rose 40% largely due to a one-time gain of $94.4 million from a business divestiture - The sale of the Family Office Services business on June 30, 2025, resulted in a net gain of $94.4 million, contributing $0.58 to diluted earnings per share138 - Revenue from Asset management, administration and distribution fees increased due to higher assets under administration in the Investment Managers segment (average AUA up 12% to $1.1 trillion) and market appreciation in the Investment Advisors segment138 - Earnings from the company's affiliate, LSV, decreased to $62.4 million in the first half of 2025 from $65.9 million in the prior year, attributed to client losses and negative cash flows139 - The company repurchased 4.7 million shares of its common stock for $373.6 million in the first six months of 2025139 Business Segments Analysis The analysis details the performance of SEI's five business segments, showing revenue increases in Investment Managers, Private Banks, and Investment Advisors, a decline in Institutional Investors, and growth in Investments in New Businesses Segment Performance (Six Months Ended June 30) | Segment | 2025 Revenue (in thousands) | YoY Revenue Change | 2025 Operating Profit (in thousands) | YoY Profit Change | | :--- | :--- | :--- | :--- | :--- | | Investment Managers | $387,115 | +10% | $148,268 | +13% | | Private Banks | $279,163 | +6% | $45,690 | +21% | | Investment Advisors | $273,769 | +13% | $125,513 | +17% | | Institutional Investors | $137,849 | -4% | $66,122 | +2% | | Investments in New Businesses | $33,049 | +14% | $(3,877) | N/A | - The Investment Advisors segment's revenue growth was significantly impacted by a $21.8 million increase in fees from the SEI Integrated Cash Program157 Liquidity and Capital Resources The company maintains a strong liquidity position with $746.3 million in cash and cash equivalents and a $325 million credit facility, with operating cash flows increasing to $243.0 million, while financing activities were dominated by $383.3 million in stock repurchases and $123.3 million in dividend payments - As of July 10, 2025, the company had $320.1 million available for corporate purposes under its credit facility177 - Cash flows from operations increased by $16.0 million year-over-year for the six-month period, driven by higher net income181 Key Uses of Cash in Financing Activities (Six Months Ended June 30, 2025) | Activity | Amount (in thousands) | | :--- | :--- | | Repurchase of common stock | $(383,304) | | Dividend payments | $(123,297) | | Proceeds from issuance of common stock | $87,381 | Quantitative and Qualitative Disclosures About Market Risk This section states that there have been no material changes to the market risk information previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - The company confirms no material changes to its market risk disclosures from the 2024 Form 10-K200201 Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective202 - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025203 PART II - OTHER INFORMATION Legal Proceedings The company states that it is party to various legal proceedings and investigations that arise in the ordinary course of business, but it does not believe the outcome of these matters will have a material adverse effect - The company does not believe that the outcome of any ongoing legal proceedings will have a material adverse effect on its financial position. For specific details, the report refers to Note 11205 Risk Factors The company reports that there have been no material changes in its risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K206 Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's common stock repurchases during the second quarter of 2025, totaling 2,162,000 shares at an average price of $83.18 per share, with approximately $296 million remaining available for future repurchases Common Stock Repurchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 351,000 | $71.28 | | May 2025 | 735,000 | $84.63 | | June 2025 | 1,076,000 | $86.06 | | Total | 2,162,000 | $83.18 | - As of June 30, 2025, approximately $296 million remained authorized for future stock repurchases207 Other Information The company reports that none of its officers or directors adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - No officers or directors adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2025208 Exhibits This section lists the exhibits filed as part of the Form 10-Q, which include certifications from the Principal Executive Officer and Principal Financial Officer, Section 1350 certifications, and various XBRL data files - The exhibits filed with this report include CEO and CFO certifications and XBRL interactive data files209210