Financial Data and Key Metrics Changes - SEI reported earnings per share (EPS) of $1.38 for Q4 2025, marking the highest quarterly earnings performance in the company's history, with a 16% year-over-year increase and a 6% sequential increase [3][12] - The company achieved double-digit earnings growth for the year and over a full percentage point of operating margin expansion [13][21] - Consolidated operating margins were impacted by severance and M&A costs but showed significant improvement when excluding these costs [15][21] Business Line Data and Key Metrics Changes - Private Banking segment reported $28 million in net sales events, driven by strong performance and new professional services wins [4][16] - Investment Manager Services (IMS) segment benefited from a $3 million revenue accrual true-up, with overall revenue and margins increasing significantly [13][14] - Asset Management segments experienced sequential growth due to market appreciation and healthy flows, despite some client losses in the institutional segment [14][18] Market Data and Key Metrics Changes - Assets Under Management (AUM) grew by 2% and Assets Under Administration (AUA) grew by 3%, supported by strong win momentum and market appreciation [18] - The integrated cash program contributed $21 billion to revenue, matching levels from the prior year and quarter [14] Company Strategy and Development Direction - SEI is focusing on expanding its investment management product launches, particularly in ETFs, SMAs, and select alternative products, with over $1 billion of net inflows into ETFs this year [8] - The company is leveraging automation and AI to lower unit costs and expand access to solutions, supporting entry into underserved segments [9] - SEI aims to double down on successful strategies and continue to build on its integrated approach to capture new flows and deliver greater client value [8][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sales momentum and expects positive developments in the IMS business by the next earnings call [5][25] - The company is committed to returning 90%-100% of free cash flow to shareholders through dividends and share repurchases, ending the year with $400 million in cash and no debt [19][21] - Management highlighted the importance of maintaining a disciplined approach to investments and cost efficiency while pursuing long-term double-digit earnings growth [21] Other Important Information - SEI completed a significant share repurchase of $101 million in Q4, totaling $616 million for the year, representing nearly 6% of total shares outstanding [19] - The company achieved a major milestone with the first close of its Stratos partnership, enhancing its capabilities in the advisor channel [6][7] Q&A Session Summary Question: Can you provide more color on the sales events from ALTs? - Management indicated that the sales events were a mix of new business and expanding relationships with current clients, with strong pipeline momentum expected to continue into 2026 [25][27] Question: What drives the gap between net recurring and non-recurring sales? - The gap is primarily driven by the growth of the professional services strategy, with many engagements being characterized as one-time professional services [29][30] Question: How should we think about the margin in the private banking segment? - Management expects margins to remain in the high teens range, influenced by the mix of professional services and platform revenues [36][37] Question: What is the impact of workforce reductions on expenses? - The reduction in compensation from workforce reductions is expected to offset annual compensation increases, resulting in a flattish impact on overall expenses [45][46] Question: How significant is the UK market for the institutional business? - The UK market is considered important but is a fraction of the overall institutional business, with ongoing efforts to grow this segment [59][60]

Financial Data and Key Metrics Changes - SEI reported earnings per share (EPS) of $1.38 for Q4 2025, marking the highest quarterly earnings performance in the company's history, with a 16% year-over-year increase and a 6% sequential increase [4][11] - The company experienced double-digit earnings growth for the year and over a full percentage point of operating margin expansion [12][21] - Consolidated operating margins were impacted by severance and M&A costs but showed significant improvement when excluding these costs [14][21] Business Line Data and Key Metrics Changes - Private banking revenue increased significantly, driven by professional services wins, contributing to margin growth due to cost leverage [12][14] - Investment Management Services (IMS) benefited from a $3 million revenue accrual true-up, with overall revenue and margins increasing meaningfully [12][13] - Asset management segments saw sequential growth due to market appreciation and healthy flows, despite some client losses in the institutional segment [13][17] Market Data and Key Metrics Changes - Assets Under Administration (AUA) grew by 3%, supported by strong win momentum, while Assets Under Management (AUM) increased by 2% due to market appreciation [16][17] - The integrated cash program contributed $21 billion to revenue, matching levels from the prior quarter and year [13] Company Strategy and Development Direction - SEI is focusing on expanding its investment management product launches, particularly in ETFs, SMAs, and select alternative products, aiming to leverage its strengths in these areas [8][21] - The company is committed to a long-term strategic partnership with Stratos, enhancing its capabilities in the advisor channel and integrating technology and investment management strengths [6][8] - SEI is transitioning its IMS business model to platform-level services, utilizing automation and AI to lower costs and expand access to solutions [9][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sales momentum generated in Q4 2025, expecting it to carry into 2026, particularly in private banking and asset management [5][21] - The company is focused on executing its roadmap for 2026, emphasizing disciplined investment and operational efficiency [10][21] - Management acknowledged the challenges of seasonality and the impact of performance fees, indicating a cautious but optimistic outlook for the upcoming quarters [19][21] Other Important Information - SEI repurchased $101 million of shares in Q4, totaling $616 million for the year, representing nearly 6% of total shares outstanding [18] - The company completed the Stratos acquisition primarily with cash, ending the year with $400 million in cash and no debt [18] Q&A Session Summary Question: Sales events from alternative managers - Management indicated that over two-thirds of sales events came from alternative managers, with a mix of new wins and expanding relationships with current clients, expecting more updates in April [24][25][26] Question: Private banking segment margins - Management noted that private banking margins have been increasing steadily, with expectations to remain in the high teens range, influenced by professional services [36][37] Question: Impact of workforce reductions on expenses - Management clarified that the reduction in compensation from workforce reductions would largely offset annual compensation increases, resulting in a flattish impact on expenses [45][46] Question: Stratos acquisition run rate impact - Management provided insights on the Stratos acquisition, indicating a revenue contribution of about $5 million in Q4, with expectations for more detailed updates in Q1 [52][53] Question: Revenue recognition from non-recurring sales events - Management confirmed that the two significant sales events in private banking are recurring, with revenue recognition expected to occur over the coming quarters [56][57]