SEI Investments ((SEIC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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SEI Investments Reports Record Earnings Amid Strategic Wins and Challenges
SEI Investments’ latest earnings call reflected a strong quarter characterized by record earnings per share and significant achievements across various segments. The sentiment was largely positive, driven by notable successes in investment management and private banking. However, concerns were raised regarding a contract loss in private banking and stagnant institutional revenue.
Record Earnings Per Share
SEI Investments achieved a milestone with record earnings per share (EPS) of 1.3¢, excluding one-time items. This achievement marks an all-time high for the company, showcasing its robust financial performance and operational efficiency.
Strong Sales Performance
The company reported net sales events totaling $31 million, with the investment managers business leading the charge. The Investment Management Services (IMS) division posted a record sales quarter, with two-thirds of sales events attributed to client expansion, highlighting the company’s ability to grow its client base effectively.
Significant Institutional Win
A major highlight for SEI was securing the largest mandate win in its history within the institutional segment. The asset management business landed a multibillion-dollar fixed income assignment for a state government client, underscoring its competitive edge in the market.
Private Banking Strategic Win
In private banking, SEI secured a $13 million win with a leading super-regional U.S. bank. This victory is part of a comprehensive transformation initiative, demonstrating SEI’s strategic capabilities in the banking sector.
Capital Allocation and Share Repurchases
SEI continued to focus on capital allocation, repurchasing $142 million in shares during the quarter and $775 million over the past year. This represents more than 7% of shares outstanding, reflecting the company’s commitment to returning value to shareholders.
Contract Loss in Private Banking
Despite the successes, SEI faced a setback with a contract loss in private banking due to a client’s strategic shift. This was the only notable loss for the segment year to date, impacting the overall sales figures.
Institutional Revenue Flat
Institutional revenue and operating profit remained flat for the quarter. This stagnation was attributed to lower equity exposure and reduced benefits from market appreciation, presenting a challenge for the company.
Severance and M&A Costs
SEI incurred nearly $4 million in severance costs and $3 million in M&A expenses related to the Stratos acquisition. These costs impacted the company’s overall financials but are part of its strategic growth initiatives.
Forward-Looking Guidance
Looking ahead, SEI provided optimistic guidance with expectations of continued strong performance. The company highlighted its strategic focus on AI and tokenization initiatives and anticipated the closing of the Stratos partnership in late 2025 or early 2026. Despite the contract loss in private banking, SEI’s net sales events have set a record, surpassing $100 million year-to-date.
In summary, SEI Investments delivered a strong quarter with record earnings and strategic wins, particularly in investment management and private banking. While challenges such as a contract loss and flat institutional revenue were noted, the company’s forward-looking guidance remains positive, driven by strategic initiatives and continued growth prospects.