Federated Hermes Q4 Earnings Beat Estimates, AUM Reaches Record Level

Core Insights - Federated Hermes, Inc. (FHI) reported fourth-quarter 2025 earnings per share of $1.39, exceeding the Zacks Consensus Estimate of $1.20, marking a 33.6% increase from the previous year [1][10] - The company achieved a record level of assets under management (AUM) at $902.6 billion, driven by strong growth in money-market and equity assets [7][10] Financial Performance - Net income for the fourth quarter was $107 million, reflecting a 26.3% increase year over year [2][10] - Total revenues rose 13.7% year over year to $482.8 million, surpassing the Zacks Consensus Estimate by 2.7% [4][10] - For the full year 2025, earnings per share were $5.13, exceeding the Zacks Consensus Estimate of $4.95, and net income increased by 50.3% to $403.3 million [3] Revenue and Expense Breakdown - Operating revenue for 2025 was $1.8 billion, exceeding the Zacks Consensus Estimate of $1.79 billion, with a year-over-year increase of 10.3% [4] - Quarterly net investment advisory fees increased by 8.9% year over year to $313.9 million [4] - Net other service fees grew significantly by 61.3% year over year to $59.1 million, while net administrative service fees rose by 10.1% to $109.7 million [5] Asset Management and Growth - Average managed assets totaled $873.7 billion, up 8.6% year over year [8] - The company reported record money-market assets of $682.6 billion, an increase of 8.3% year over year, and equity assets rose by 23.3% to $97.9 billion [7][10] Capital Management - The company repurchased 1,566,901 shares of its class B common stock during the reported quarter [11] - A dividend of 34 cents per share was declared, payable on February 13, 2026, to shareholders of record as of February 6, 2026 [11] Balance Sheet Strength - As of December 31, 2025, cash and other investments totaled $724.3 million, while total long-term debt was $348.4 million, indicating a stable balance sheet [6]