Executive Summary

EPS of $1.78 rose 70% YoY, aided by $0.58 in non-recurring items (gain on sale of Family Office Services, vendor settlement; partially offset by FX/M&A fees). Excluding items, EPS ~$1.20 increased vs. prior year and prior quarter .
Revenue grew 8% YoY to $559.6M; operating income +9% YoY and operating margin 27% (down vs. Q1 on growth investments). Net sales events were $29.2M, with record TTM of $160.4M .
Versus consensus: EPS materially beat (Actual $1.78 vs. $1.196*) while revenue modestly missed (Actual $559.6M vs. $565.6M*). Non-recurring gains drove the EPS surprise; sequential margin decline reflected hiring ahead of conversions and choppy items in Advisors .
Strategic catalysts: Completion of Family Office Services divestiture (gain recognized) ; announced $527M investment for 57.5% of Stratos Wealth Holdings to deepen advisor footprint and potential revenue synergies over time .
Capital returns remain robust: $181M buybacks in Q2; >$700M TTM; cash $746M, no long-term debt; plan to fund most of Stratos from balance sheet while continuing buybacks/dividends .

What Went Well and What Went Wrong

What Went Well

Record sales momentum: $29.2M net sales events in Q2; TTM $160.4M, led by Investment Managers with balanced wins across alts, traditional, and international .
Asset trends improved: Ending AUM +6% QoQ to $517.5B; AUA/platform/advisement +5% QoQ to $1,177.4B; Advisors’ Integrated Cash Program contributed $21M revenue, +$11M YoY .
Strategic portfolio actions: Closed Family Office Services sale (gain of $94.4M) and announced Stratos investment to scale advisor capabilities; management emphasized disciplined capital allocation and long-term growth .
Management tone: “Executing with conviction and discipline…intentional investments in talent, technology, and infrastructure to enhance capabilities and scale” — CEO Ryan Hicke .

What Went Wrong

Sequential margin compression: Consolidated operating margin declined vs. Q1 as growth investments ramped; unit-level margins pressured by hiring ahead of conversions and several non-recurring expense items (e.g., earnout accruals, onboarding costs) .
Private Banking sales slippage: April market volatility pushed deal timing to the right; net recurring PB sales just ~$0.25M as several deals slipped .
Revenue vs. consensus: Modest revenue shortfall relative to S&P Global consensus despite strong YoY growth (Actual $559.6M vs. $565.6M*) .

Financial Results

Consolidated P&L vs. Prior Periods

Metric	Q4 2024	Q1 2025	Q2 2025
Revenues ($USD Millions)	$557.2	$551.3	$559.6
Operating Income ($USD Millions)	$145.5	$157.1	$148.6
Operating Margin (%)	26%	28%	27%
Diluted EPS ($USD)	$1.19	$1.17	$1.78

Notes: Q2 EPS includes $0.60 benefit (FOS sale gain + vendor settlement) and $0.02 headwinds (FX losses, Stratos-related legal); ex-items EPS would have been ~$1.20 .

Actual vs. Consensus – Q2 2025

Metric	Consensus*	Actual	Beat/Miss
Revenue ($USD Millions)	565.6*	559.6	Miss (~$6.0M; ~1.1%)*
EPS ($USD)	1.196*	1.78	Beat (+$0.584)*
# of Estimates	5*	—	—

Values retrieved from S&P Global.*

Segment Performance – Revenue and Operating Profit

Segment	Q4 2024 Revenue ($M)	Q1 2025 Revenue ($M)	Q2 2025 Revenue ($M)	Q4 2024 Op Profit ($M)	Q1 2025 Op Profit ($M)	Q2 2025 Op Profit ($M)
Investment Managers	$191.3	$192.0	$195.1	$73.1	$74.8	$73.4
Private Banks	$140.1	$137.7	$141.4	$19.7	$23.0	$22.7
Investment Advisors	$139.3	$136.6	$137.2	$62.4	$64.1	$61.4
Institutional Investors	$70.8	$68.5	$69.3	$32.5	$32.6	$33.5
New Businesses	$15.7	$16.5	$16.5	-$3.6	-$2.0	-$1.9

KPIs and Operating Metrics

KPI	Q4 2024	Q1 2025	Q2 2025
Ending AUM ($B)	476.7	486.0	517.5
AUA/Platform/Advisement ($B)	1,580.7	1,607.7	1,177.4
Total Net Sales Events ($M)	$38.2	$46.6	$29.2
Share Repurchases ($M)	$259.5	$192.8	$180.8

Note: AUA presentation differs between year-end consolidated assets and slide-defined “AUA and assets on platform”; slide metrics used for Q2 2025 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating Margin	H2 2025 run-rate	Not previously specified	Expect margins to remain around Q2 levels as costs layer with revenue; hiring ahead of conversions	Maintained (qualitative)
Private Banking Sales Timing	Q3–Q4 2025	Solid pipeline, timing variable	April volatility delayed Q2 deals; pipeline remains strong across bank segments	Timing pushed right
Investment Managers Wins	H2 2025	Strong pipeline	Anticipate accelerated pace of wins in back half, driven by large alts managers	Raised (qualitative)
Capital Allocation	Ongoing	Consistent buybacks/dividends	Fund majority of Stratos with low-cost cash; maintain buybacks/dividends; target lower cash run-rate (~$300M) over time	Maintained with clarity
Stratos Closing & Funding	H2 2025/H1 2026	N/A	Two-stage closing; ~$527M for 57.5% equity; fund with balance sheet cash	New
Tax/Other Items	Near-term	N/A	No specific tax rate guidance; noted non-recurring gains/FX/legal impacts in Q2	Informational

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24/Q1’25)	Current Period (Q2’25)	Trend
Sales Momentum	Net sales +58% YoY in 2024; strong broad-based activity	$29.2M net sales; record TTM $160.4M; IMS leading with balanced wins	Sustained strength, slight Q/Q dip due to PB timing
Margin Discipline	Q4 margins +; noted compensation timing impacts	Sequential margin decline on growth investments; margins expected stable near Q2 run-rate	Investing ahead of growth; steady run-rate expected
Asset Management Strategy Shift	Advisor cash program contribution rising; SMA/model growth offset mutual fund outflows	Traditional MF outflows offset by models/custom portfolios; flows improving in Advisors/Institutional	Mix shifts to ETF/SMA/models
Alternative Managers Outsourcing	New Luxembourg depositary; traction with private credit/global clients	Several large alts managers exploring outsourcing; IMS pipeline “extremely strong”	Strengthening opportunity set
Private Banking Pipeline	Backlog converting; strong retention	April volatility delayed closes; pipeline balanced across bank sizes	Timing pushout, underlying strength intact
Portfolio Actions	No FOS sale yet (announced Feb/closed Jul)	FOS sale closed (gain recognized); Stratos investment announced	Portfolio streamlined, advisor footprint expanded
Capital Returns	Robust buybacks/dividends	$181M Q2 buybacks; >$700M TTM; fund Stratos from cash; leverage targets discussed	Continued commitment

Management Commentary

“SEI achieved another strong quarter across our core businesses… intentional investments in our talent, technology, and infrastructure to enhance our capabilities and scale.” — CEO Ryan Hicke .
“Our EPS of $1.78 includes significant one-time items… totaling a $0.60 EPS impact… partially offset by $0.02… excluding these items, EPS would have realized $1.20.” — CFO/COO Sean Denham .
“Margins stepped down in Q2, reflecting the investments… we will remain surgical on hiring… reprioritize discretionary spend… streamline processes.” — CEO Ryan Hicke .
On Stratos: “Long-term strategic investment… focus is not cost synergies but augmenting client experience and capabilities as least disruptive and most accretive as possible.” — Management .

Q&A Highlights

Investments in talent/technology: IMS hiring ahead of pipeline; tech spend to streamline systems for scalability; margins expected to remain around Q2 levels near term .
Private Banking delays: April market volatility froze activity; pipeline reviewed and remains strong and more balanced across regional/community/small/large banks .
Stratos differentiation: Professionalized leadership, centralized investment platform and disciplined value proposition, cultural fit; focus on scaling direct indexing/SMA capabilities with SEI .
Capital return/leverage: Anticipated tens of millions of follow-on capital for Stratos M&A; aim to lower cash run-rate to ~$300M, continue buybacks/dividends; discussed negative net leverage position .

Estimates Context

Q2 2025 EPS beat (Actual $1.78 vs. $1.196*), driven by $0.58 of non-recurring items; excluding items, EPS still up YoY/Sequential .
Q2 2025 revenue modest miss (Actual $559.6M vs. $565.6M*); sequential growth +1.5% with choppy April offset by May/June appreciation .
Estimate counts: 5 EPS and 5 revenue estimates*.
Values retrieved from S&P Global.*

Key Takeaways for Investors

Strong underlying demand with record TTM net sales and improving asset flows in Advisors/Institutional; IMS pipeline led by large alternative managers supports H2 acceleration .
Expect near-term operating margins to track around Q2 levels as SEI invests to ensure flawless client conversions; focus on accountability and leverage as revenue layers in .
Portfolio repositioning completed: FOS divestiture provides capital and simplifies focus; Stratos investment deepens advisor ecosystem exposure with potential medium-term revenue synergies .
Cash-rich, no-debt balance sheet enables both strategic deployment (Stratos) and continued shareholder returns; >$700M TTM buybacks sustained .
Advisor Integrated Cash Program remains a notable earnings contributor; continued growth in ETF/SMA/models mitigates mutual fund outflows .
Near-term trading: EPS beat was non-recurring; monitor H2 sales conversions, IMS win timing, and margin delivery; medium-term: execution on Stratos synergies and alts outsourcing could expand revenue and scale .

Appendix: Additional Q2 Press Releases

Board enhancements: Added Karin Risi and Tom Naratil to Board, aligning leadership depth with transformation priorities .
Stratos Wealth Holdings partnership terms and staged closing schedule .
Completion of Family Office Services sale (renamed Archway) effective June 30 .

SEI INVESTMENTS CO (SEIC)·Q2 2025 Earnings Summary