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SEI INVESTMENTS CO (SEIC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered $578.5M revenue (+8% YoY), diluted EPS $1.30 (+9% YoY), and operating margin of 28%, with record EPS excluding one-time items; net sales events were $30.5M and surpassed $100M YTD, an all-time record .
  • EPS beat S&P Global consensus ($1.30 vs $1.246), while revenue was slightly below consensus ($578.5M vs $581.7M); 5 estimates for both EPS and revenue; the press release noted comparability items were net-neutral to EPS in Q3 *.
  • Investment Managers led with double-digit revenue and profit growth, Advisors posted the highest YoY revenue growth, and AUA/AUM rose sequentially (AUA +7% QoQ, AUM +5% QoQ), underpinned by alternatives momentum .
  • Capital return remained a key catalyst: 1.6M shares repurchased for $141.6M in Q3; authorization increased by $650M (total ~$773.2M available as of Oct 20, 2025) .
  • Management highlighted durable demand in alternatives outsourcing, a strategically significant private banking win, and continued margin focus; tone was confident on pipeline and long-term strategy execution .

What Went Well and What Went Wrong

What Went Well

  • Record EPS excluding one-time items; “SEI delivered another strong quarter… Excluding one-time items, third-quarter earnings per share also hit a record high,” said CEO Ryan Hicke .
  • Investment Manager Services posted a record sales quarter, with momentum broad-based and two-thirds of sales events from alternatives; “surging demand for outsourcing and client expansions” .
  • Advisors’ operating profit +21% YoY, supported by market appreciation, business momentum, $2M earn-out true-up, and $21M integrated cash program contribution (up $10M YoY) .

What Went Wrong

  • Private Banks net sales were reduced by a one-off contract loss disclosed at September-end; management emphasized the deconversion impact will be modest and spread over multiple years .
  • Institutional margins declined sequentially on “choppier items” and less market appreciation benefit relative to Advisors; revenue and profit were flat YoY .
  • New Businesses segment revenue fell 48% YoY and operating loss increased; reflects portfolio reshaping and divestiture impacts (Family Office Services divested on June 30, 2025) .

Financial Results

Consolidated Results vs Prior Periods

MetricQ1 2025Q2 2025Q3 2025
Revenues ($USD Millions)$551.3 $559.6 $578.5
Diluted EPS ($USD)$1.17 $1.78 $1.30
Operating Margin (%)28% 27% 28%

Q3 Actuals vs S&P Global Consensus

MetricConsensus (Q3 2025)Actual (Q3 2025)
EPS ($USD)1.246*1.30
Revenue ($USD Millions)581.7*578.5
# of Estimates (EPS)5*—
# of Estimates (Revenue)5*—

Values retrieved from S&P Global.*

Segment Revenues ($USD Millions)

SegmentQ3 2024Q2 2025Q3 2025
Investment Managers$184.6 $195.1 $207.1
Private Banks$138.7 $141.4 $144.0
Investment Advisors$126.8 $137.2 $147.5
Institutional Investors$71.6 $69.3 $71.8
Investments in New Businesses$15.6 $16.5 $8.2
Total$537.4 $559.6 $578.5

Segment Operating Profit ($USD Millions)

SegmentQ3 2024Q2 2025Q3 2025
Investment Managers$70.5 $73.4 $81.1
Private Banks$23.6 $22.7 $23.2
Investment Advisors$56.7 $61.4 $68.3
Institutional Investors$33.8 $33.5 $33.8
Investments in New Businesses($2.8) ($1.9) ($3.7)
Income from Operations (Company)$143.8 $148.6 $160.0

KPIs and Capital Allocation

KPIQ1 2025Q2 2025Q3 2025
Total Sales Events ($USD Millions)$46.6 $29.2 $30.5
Ending AUA/Platform/Advisement ($USD Billions)$1,605.9 $1,694.9 $1,798.6
Ending AUM ($USD Billions)$486.0 $517.5 $541.5
Share Repurchases2.5M sh / $192.8M 2.2M sh / $180.8M 1.6M sh / $141.6M
Cash and Cash Equivalents (Balance Sheet) ($USD Millions)$710.7 $746.3 $792.8

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
IMS Operating MarginNear-term into 2026“Anticipating good margins but need investments; guidance more over time vs QoQ” (prior quarter context) Q3 margin ahead of expectations; expect relatively flat to a downtick as investments continue into 2026 Maintained/clarified (near-term investments may pressure margins)
Capital Returns (Buybacks/Dividends)Forward 12 monthsReturn 90–100% of FCF (light guidance referenced at Investor Day) Continue returning 90–100% of FCF, primarily via buybacks; elevated cash to fund Stratos close Maintained
Corporate Overhead (ex severance & M&A)Q3 2025 run-rateN/A~$38.5M ex ~$4M severance and ~$3M Stratos M&A costs New quantitative disclosure
Stratos Closing & FundingLate 2025 / Early 2026N/AOn track; funded with balance sheet cash New timeline reaffirmed
Buyback AuthorizationAs of Oct 2025~$123.2M remaining prior to increase Increased by $650M to total ~$773.2M available Raised

Note: SEI does not provide formal quarterly revenue/EPS guidance; management offers directional commentary on margins, capital returns, and strategic milestones .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Alternatives outsourcing (IMS)Q1/Q2: Strong alt momentum; double-digit alt revenue growth; balanced mix of wins across alt/traditional/international Record IMS sales quarter; ~two-thirds of sales events from alternatives; broad-based client expansions Strengthening
Integrated Cash ProgramQ1: $20.8M contribution; >2x YoY ; Q2: $21M, +$11M YoY $21M contribution; +$10M YoY; supports Advisors’ margin Stable/Supportive
Private Banking pipelineQ1: 34% OP growth; clients onboarding ; Q2: Momentum; clients going live $13M win at a super-regional bank; one-off contract loss; pipeline robust Mixed near term; long-term constructive
Institutional asset managementQ1/Q2: Net flows improved; specialized mandates emerging Largest institutional fixed income mandate win to date; revenue/profit flat YoY Improving mix; stable financials
AI and tokenization—Early innings; applying AI to workflows internally; advancing tokenization pilots; disciplined rollout Emerging priority
Capital returnsQ1: 2.5M sh/$192.8M buybacks ; Q2: 2.2M sh/$180.8M Q3: 1.6M sh/$141.6M; authorization +$650M Ongoing; enhanced capacity

Management Commentary

  • “SEI delivered another strong quarter, surpassing $100 million in net sales events year to date—a record… Excluding one-time items, third-quarter earnings per share also hit a record high.” – CEO Ryan Hicke .
  • “Investment Manager Services posted a record sales quarter… surging demand for outsourcing and client expansions.” – CEO Ryan Hicke .
  • “Margins were solid in Q3, with meaningful improvement both year over year and sequentially… Advisors’ margin growth reflected strong revenue growth and a $2 million earnout true up.” – CFO Sean Denham .
  • “We’re in the early innings of AI and tokenization at SEI… adoption is encouraging… advancing tokenization pilots.” – CEO Ryan Hicke .
  • “End[ed] the quarter with $793 million of cash and no net debt… share repurchases totaled $142 million in Q3.” – CFO Sean Denham .

Q&A Highlights

  • Alternatives mix: Two-thirds of Q3 sales events from alternatives across private credit, insourcers moving to outsourcing, and retail alts; no single event >10% of total .
  • Private Banking loss: One-off client deconversion tied to strategic model change; announced conservatively; not indicative of trend; recent/future wins expected to offset .
  • Integrated cash and rates: Currently earning ~370 bps, investor yield ~55 bps; typical rate cut adjustment ~15 bps to investor, ~10 bps to SEI; broader fixed income exposure can mute impact .
  • IMS margins outlook: Q3 margin upside benefited from market appreciation; expect relatively flat to a downtick as investments continue into 2026; manage to consolidated margins .
  • Capital returns: Expect to return 90–100% of FCF via dividends/buybacks; maintaining excess cash for Stratos close .

Estimates Context

  • Q3 2025 EPS beat: $1.30 vs $1.246 consensus (≈+4.3%), suggesting potential upward revisions to near-term EPS/margin assumptions given operating leverage and integrated cash tailwind * * .
  • Q3 2025 revenue slight miss: $578.5M vs $581.7M consensus (≈-0.5%); management emphasized strong pipelines and record IMS sales activity, which may support forward revenue trajectory despite quarterly timing effects * .
  • Coverage: 5 EPS and 5 revenue estimates in S&P Global [GetEstimates]*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Quality beat on EPS with margin expansion and record ex-items EPS; modest revenue miss likely timing-related given alternatives deployment and market appreciation variability * .
  • Alternatives outsourcing is the core growth engine (record IMS sales; two-thirds of sales from alts), reinforcing a durable pipeline and multi-year runway .
  • Advisors’ economics continue to strengthen via integrated cash and market appreciation; expect this to underpin consolidated margins .
  • Private Banking saw a strategically important $13M win offset by a one-off loss; pipeline commentary remains constructive, mitigating deconversion impact .
  • Capital return remains robust and accelerating with a $650M authorization increase; buybacks and excess cash set the stage for Stratos funding without leverage .
  • Near-term IMS margins could be flat-to-down as SEI invests ahead of growth; management emphasizes consolidated margin discipline and ROI-based capital allocation .
  • Emerging AI/tokenization initiatives suggest future efficiency gains; near-term focus is validation and disciplined rollout, reducing execution risk .