SEI Investments Company

04/27/2026 | Press release | Distributed by Public on 04/27/2026 12:46

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
(In thousands, except asset balances and per-share data)
This discussion reviews and analyzes the consolidated financial condition, the consolidated results of operations and other key factors that may affect future performance. This discussion should be read in conjunction with the Consolidated Financial Statements, the Notes to the Consolidated Financial Statements and the Annual Report on Form 10-K for the year ended December 31, 2025.
Overview
Consolidated Summary
SEI Investments Company is a leading global provider of financial technology, operations, and asset management services within the financial services industry. Investment processing fees are earned as either monthly fees for contracted services or as a percentage of the market value of our clients' assets processed on our platforms. Investment operations and investment management fees are earned as a percentage of assets under management, administration or advised assets. As of March 31, 2026, through our subsidiaries and partnerships in which we have a significant interest, we manage, advise or administer $1.9 trillion in hedge, private equity, mutual fund and pooled or separately managed assets.
Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025 were:
Three Months Ended March 31, Percent Change
2026 2025
Revenues $ 622,183 $ 551,344 13%
Expenses 432,697 394,247 10%
Income from operations 189,486 157,097 21%
Net (loss) gain from investments (369) 493 (175)%
Interest income, net of interest expense 6,689 10,036 (33)%
Other income 450 - NM
Equity in earnings of unconsolidated affiliate 32,476 28,747 13%
Net gain from consolidated variable interest entities 2,079 - NM
Income before income taxes 230,811 196,373 18%
Income taxes 54,024 44,856 20%
Net income 176,787 151,517 17%
Less: Net income attributable to non-controlling interests 2,300 - NM
Net income attributable to SEI Investments Company 174,487 $ 151,517 15%
Diluted earnings per common share $ 1.40 $ 1.17 20%
The following items had a significant impact on our financial results for the three months ended March 31, 2026 and 2025:
•Revenue from Assets under management, administration, and distribution fees increased in the first three months of 2026 primarily from higher assets under administration due to cross sales to existing alternative investment clients of the Investment Managers segment as well as new sales within the segment. Average assets under administration increased $276.6 billion, or 27%, to $1.3 trillion during the first three months of 2026, as compared to $1.0 trillion during the first three months of 2025.
•Revenue from Asset management, administration and distribution fees also increased from market appreciation during 2025 and positive cash flows into separately managed account programs and Strategist programs of the Investment Advisors segment. This was partially offset by negative cash flows and lower fee structures from SEI fund programs and fee reductions in separately managed account programs. Revenue growth was also partially offset by client losses in the Institutional Investors segment. Average assets under management in equity and fixed income programs, excluding LSV, increased $27.1 billion, or 15%, to $206.6 billion in the first three months of 2026 as compared to $179.5 billion during the first three months of 2025.
•Revenues from our strategic acquisition of Stratos in the first three months of 2026 were $19.0 million.
•Revenue from Information processing and software servicing fees increased in the first three months of 2026 primarily from new client conversions and growth from existing SEI Wealth PlatformSM (SWP) clients.
•Earnings from LSV increased to $32.1 million in the first three months of 2026 as compared to $28.7 million in the first three months of 2025 due to market appreciation of assets under management during 2025. Negative cash flows from existing clients and client losses partially offset the increase in earnings from LSV.
•The increase in personnel costs was primarily due to business growth, primarily in the Investment Managers segment.
•Operating expenses increased primarily from higher costs for consulting and outsourced vendor costs supporting operations in the Investment Managers and Private Banks segments.
•The increase in amortization expense was primarily due to intangible assets related to the Stratos acquisition.
•Capitalized software development costs were $5.5 million in the first three months of 2026, of which $4.0 million was for continued enhancements to SWP. Capitalized software development costs also include $1.6 million of software development costs in the first three months of 2026 for SEI Scope, a new platform for the Investment Managers segment placed into service during the third quarter 2025.
•Amortization expense related to SWP was $7.6 million in the first three months of 2026 as compared to $7.1 million in the first three months of 2025. Amortization expense related to the SEI Scope platform was $1.5 million in the first three months of 2026.
•Effective tax rates were 23.4% during the first quarter 2026 and 22.8% during the first quarter 2025.
•SEI repurchased 2.6 million shares of its common stock for $208.3 million in the first three months of 2026.
Stratos Wealth Holdings
In December 2025, we completed the first stage of our strategic investment in the Stratos business (Stratos), a network of affiliated companies focused on supporting the success of financial advisors. During the first quarter 2026, we completed the purchases of 100% interest of nine entities and a majority interest in two additional entities. These purchases were funded by a cash deposit made in December 2025 and the issuance of promissory notes. Stratos contributed $19.0 million to revenue and $3.1 million to operating profit, which includes $6.0 million of expense associated with acquired intangible amortization, before considering non-controlling interest (See Note 12 to the Notes to Consolidated Financial Statements).
Ending Asset Balances
(In millions)
As of March 31, Percent Change
2026 2025
Investment Managers:
Collective trust fund programs (A) $ 243,900 $ 209,491 16%
Liquidity funds 536 244 120%
Total assets under management $ 244,436 $ 209,735 17%
Client assets under administration 1,284,781 1,061,067 21%
Total assets $ 1,529,217 $ 1,270,802 20%
Private Banks:
Equity and fixed-income programs $ 29,753 $ 25,590 16%
Collective trust fund programs 4 4 -%
Liquidity funds 2,178 3,670 (41)%
Total assets under management $ 31,935 $ 29,264 9%
Client assets under administration 9,143 8,365 9%
Total assets $ 41,078 $ 37,629 9%
Investment Advisors:
Equity and fixed-income programs $ 86,612 $ 75,689 14%
Liquidity funds 3,485 3,153 11%
Total Platform assets under management $ 90,097 $ 78,842 14%
Platform-only assets 34,070 25,591 33%
Platform-only assets-deposit program 2,294 2,216 4%
Total Platform assets $ 126,461 $ 106,649 19%
Institutional Investors:
Equity and fixed-income programs $ 82,195 $ 76,492 7%
Liquidity funds 1,503 1,580 (5)%
Total assets under management $ 83,698 $ 78,072 7%
Client assets under advisement 3,549 5,573 (36)%
Total assets $ 87,247 $ 83,645 4%
Investments in New Businesses:
Equity and fixed-income programs $ 3,087 $ 2,661 16%
Liquidity funds 252 288 (13)%
Total assets under management $ 3,339 $ 2,949 13%
Client assets under advisement 2,185 2,219 (2)%
Client assets under administration (E) - 14,846 (100)%
Total assets $ 5,524 $ 20,014 (72)%
LSV:
Equity and fixed-income programs (B) $ 100,567 $ 87,114 15%
Stratos (F) $ 39,935 $ - NM
Total:
Equity and fixed-income programs (C) $ 302,214 $ 267,546 13%
Collective trust fund programs 243,904 209,495 16%
Liquidity funds 7,954 8,935 (11)%
Total assets under management $ 554,072 $ 485,976 14%
Client assets under advisement 5,734 7,792 (26)%
Client assets under administration (D) 1,293,924 1,084,278 19%
Platform-only assets 36,364 27,807 31%
Stratos 39,935 - NM
Total assets $ 1,930,029 $ 1,605,853 20%
(A) Collective trust fund program assets are included in assets under management since SEI is the trustee. Fees earned on this product are less than fees earned on customized asset management programs.
(B) Equity and fixed-income programs include $1.4 billion of assets managed by LSV in which fees are based solely on performance and are not calculated as an asset-based fee (as of March 31, 2026).
(C) Equity and fixed-income programs include $8.3 billion of assets invested in various asset allocation funds at March 31, 2026.
(D) In addition to the assets presented, SEI also administers an additional $13.3 billion in Funds of Funds assets on which SEI does not earn an administration fee (as of March 31, 2026).
(E) Client assets under administration related to the Family Office Services business divested on June 30, 2025.
(F) Stratos is a network of affiliated companies that provides financial services to $39.9 billion in client assets across business models and affiliation structures (as of February 28, 2026).
Average Asset Balances
(In millions)
Three Months Ended March 31, Percent Change
2026 2025
Investment Managers:
Collective trust fund programs (A) $ 248,851 $ 208,720 19%
Liquidity funds 565 256 121%
Total assets under management $ 249,416 $ 208,976 19%
Client assets under administration 1,280,581 1,061,282 21%
Total assets $ 1,529,997 $ 1,270,258 20%
Private Banks:
Equity and fixed-income programs $ 30,696 $ 25,894 19%
Collective trust fund programs 3 4 (25)%
Liquidity funds 2,150 2,961 (27)%
Total assets under management $ 32,849 $ 28,859 14%
Client assets under administration 9,282 8,488 9%
Total assets $ 42,131 $ 37,347 13%
Investment Advisors:
Equity and fixed-income programs $ 88,403 $ 77,287 14%
Liquidity funds 3,518 3,119 13%
Total Platform assets under management $ 91,921 $ 80,406 14%
Platform-only assets 34,485 25,939 33%
Platform-only assets-deposit program 2,309 2,187 6%
Total Platform assets $ 128,715 $ 108,532 19%
Institutional Investors:
Equity and fixed-income programs $ 84,393 $ 76,493 10%
Liquidity funds 1,941 1,655 17%
Total assets under management $ 86,334 $ 78,148 10%
Client assets under advisement 3,657 5,741 (36)%
Total assets $ 89,991 $ 83,889 7%
Investments in New Businesses:
Equity and fixed-income programs $ 3,106 $ 2,801 11%
Liquidity funds 319 274 16%
Total assets under management $ 3,425 $ 3,075 11%
Client assets under administration (E) - 14,630 (100)%
Client assets under advisement 2,335 2,205 6%
Total assets $ 5,760 $ 19,910 (71)%
LSV:
Equity and fixed-income programs (B) $ 104,619 $ 87,790 19%
Stratos (F) $ 39,115 $ - NM
Total:
Equity and fixed-income programs (C) $ 311,217 $ 270,265 15%
Collective trust fund programs 248,854 208,724 19%
Liquidity funds 8,493 8,265 3%
Total assets under management $ 568,564 $ 487,254 17%
Client assets under advisement 5,992 7,946 (25)%
Client assets under administration (D) 1,289,863 1,084,400 19%
Platform-only assets 36,794 28,126 31%
Stratos 39,115 - NM
Total assets $ 1,940,328 $ 1,607,726 21%
(A) Collective trust fund program average assets are included in assets under management since SEI is the trustee. Fees earned on this product are less than fees earned on customized asset management programs.
(B) Equity and fixed-income programs include assets managed by LSV in which fees are based solely on performance and are not calculated as an asset-based fee. The average value of these assets for the three months ended March 31, 2026 was $1.5 billion.
(C) Equity and fixed-income programs include $8.2 billion of average assets invested in various asset allocation funds for the three months ended March 31, 2026.
(D) In addition to the assets presented, SEI also administers an additional $13.2 billion of average assets in Funds of Funds assets for the three months ended March 31, 2026 on which SEI does not earn an administration fee.
(E) Client assets under administration related to the Family Office Services business divested on June 30, 2025.
(F) Stratos is a network of affiliated companies that provides financial services to $39.1 billion in average client assets across business models and affiliation structures during the three months ended March 31, 2026.
In the preceding tables, assets under management are total assets of our clients or their customers invested in our equity and fixed-income investment programs, collective trust fund programs, and liquidity funds for which we provide asset management services through our subsidiaries and partnerships in which we have a significant interest. Advised assets include assets for which we provide advisory services through a subsidiary to the accounts but do not manage the underlying assets. Assets under administration include total assets of our clients or their customers for which we provide administrative services, including client fund balances for which we provide administration and/or distribution services through our subsidiaries and partnerships in which we have a significant interest. Platform-only assets-deposit program include assets of our clients in the SEI Integrated Cash program for which we provide custody services through our federal thrift subsidiary. The assets presented in the preceding tables do not include assets processed on SWP and are not included in the accompanying Consolidated Balance Sheets because we do not own them.
Business Segments
Revenues, Expenses and Operating Profit (Loss) for our business segments for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 were as follows:
Three Months Ended March 31, Percent
Change
2026 2025
Investment Managers:
Revenues $ 220,717 $ 192,048 15%
Expenses 133,839 117,211 14%
Operating Profit $ 86,878 $ 74,837 16%
Operating Margin 39 % 39 %
Private Banks:
Revenues $ 152,262 $ 137,714 11%
Expenses 120,031 114,749 5%
Operating Profit $ 32,231 $ 22,965 40%
Operating Margin 21 % 17 %
Investment Advisors:
Revenues $ 169,695 $ 136,576 24%
Expenses 96,357 72,455 33%
Non-controlling interest and other, net 1,337 - NM
Operating Profit $ 72,001 $ 64,121 12%
Operating Margin 42 % 47 %
Institutional Investors:
Revenues $ 71,516 $ 68,506 4%
Expenses 37,137 35,870 4%
Operating Profit $ 34,379 $ 32,636 5%
Operating Margin 48 % 48 %
Investments in New Businesses:
Revenues $ 7,993 $ 16,500 (52)%
Expenses 9,193 18,496 (50)%
Operating Loss $ (1,200) $ (1,996) (40)%
For additional information pertaining to our business segments, see Note 9 to the Consolidated Financial Statements.
Investment Managers
Revenues increased $28.7 million, or 15%, in the three month period ended March 31, 2026 and were primarily affected by:
•Increased administration fees from additional services provided to our largest alternative fund clients; and
•Positive cash flows into alternative and traditional funds from new and existing clients; partially offset by
•Client losses and fund closures.
Operating margin remained at 39% in the three month period. Operating income increased $12.0 million, or 16%, in the three month period and was primarily affected by:
•An increase in revenues as mentioned above; partially offset by
•Increased costs associated with new business, primarily personnel costs, technology and third-party vendor costs; and
•Costs to enhance, support and maintain technologies and investment service capabilities.
Private Banks
Three Months Ended March 31, Percent
Change
2026 2025
Revenues:
Information processing and software servicing fees $ 115,343 $ 105,199 10%
Asset management, administration & distribution fees 36,919 32,515 14%
Total revenues $ 152,262 $ 137,714 11%
Revenues increased $14.5 million, or 11%, in the three month period ended March 31, 2026 and were primarily affected by:
•Increased investment processing fees from new SWP client conversions and growth from existing SWP clients due to market appreciation during 2025 and increased transaction volumes; and
•Increased investment management fees from existing international clients due to market appreciation during 2025; partially offset by
•Negative cash flows and fee reductions from existing international clients; and
•Lower investment processing fees from the recontracting of existing clients and client losses.
Operating margins increased to 21% compared to 17% in the three month period. Operating income increased by $9.3 million, or 40%, in the three month period and was primarily affected by:
•An increase in revenues as mentioned above; partially offset by
•Increased costs, mainly personnel, technology and third-party vendor costs supporting operations.
Investment Advisors
Three Months Ended March 31, Percent
Change
2026 2025
Revenues:
Investment management fees-SEI fund programs $ 58,235 $ 55,104 6%
Separately managed account fees 67,254 52,077 29%
Other fees 44,206 29,395 50%
Total revenues $ 169,695 $ 136,576 24%
Revenues increased $33.1 million, or 24%, in the three month period ended March 31, 2026 and were primarily affected by:
•Increased fees from separately managed account programs and Strategist programs due to growth from new and existing clients and market appreciation during 2025; and
•Revenues from Stratos acquisition of $19.0 million; partially offset by
•Decreased investment management fees from SEI fund programs resulting from the continued shift out of SEI fund programs into separately managed accounts and other investment products; and
•Lower fee structures in SEI fund programs and fee reductions in our separately managed account programs.
Operating margin decreased to 42% compared to 47% in the three month period. Operating income increased $7.9 million, or 12%, in the three month period and was primarily affected by:
•An increase in revenues as mentioned above; partially offset by
•Increased amortization expense from intangible assets related to the Stratos acquisition;
•Increased direct expenses associated with the increase in separately managed account fees; and
•Increased personnel costs from business growth.
Institutional Investors
Revenues increased $3.0 million, or 4%, in the three month period ended March 31, 2026 and were primarily affected by:
•Increased investment management fees from existing clients due to higher assets under management due to market appreciation during 2025; and
•Increased fees from new and existing Outsourced Chief Investment Officer (OCIO) platform clients; partially offset by
•Decreased investment management fees from client losses.
Operating margin remained at 48% in the three month period. Operating income increased $1.7 million, or 5%, in the three month period and was primarily affected by:
•An increase in revenues as mentioned above; and
•Decreased personnel costs; partially offset by
•Increased direct expenses associated with investment management fees.
Investments in New Businesses
Three Months Ended March 31, Percent
Change
2026 2025
Revenues:
SEI Private Wealth Management $ 5,970 $ 5,249 14%
SEI Family Office Services - 9,089 (100)%
Other 2,023 2,162 (6)%
Total revenues $ 7,993 $ 16,500 (52)%
Revenues decreased $8.5 million, or 52%, in the three month period ended March 31, 2026 and were primarily affected by:
•The divestiture of the SEI Family Office Services business in June 2025; partially offset by
•Increased revenues from SEI Private Wealth Management through higher assets under advisement due to market appreciation during 2025 and new business.
Other
Corporate overhead expenses
Corporate overhead expenses primarily consist of general and administrative expenses and other costs not directly attributable to a reportable business segment. Corporate overhead expenses were $36.1 million and $35.5 million in the three months ended March 31, 2026 and 2025, respectively.
Other income and expense
Other income and expense items on the accompanying Consolidated Statements of Operations consist of:
Three Months Ended March 31,
2026 2025
Net (loss) gain from investments $ (369) $ 493
Interest and dividend income 7,162 10,221
Interest expense (473) (185)
Other income 450 -
Equity in earnings of unconsolidated affiliates 32,476 28,747
Net gain from consolidated variable interest entities 2,079 -
Total other income and expense items, net $ 41,325 $ 39,276
Net (loss) gain from investments
Net loss from investments in the three months ended March 31, 2026 was primarily due to unrealized mark-to-market losses recorded in current earnings associated with Company-sponsored investment funds from market depreciation in 2026 (See Note 5 to the Consolidated Financial Statements).
Interest and dividend income
Interest and dividend income is earned based upon the amount of cash that is invested daily. The decrease in interest and dividend income in the three months ended March 31, 2026 was due to lower invested cash balances and, to a lesser extent, an overall decline in interest rates.
Equity in earnings of unconsolidated affiliates
Equity in earnings of unconsolidated affiliates primarily includes the earnings from our ownership interest in LSV. The table below presents the revenues and net income of LSV and the proportionate share in LSV's earnings.
Three Months Ended March 31, Percent Change
2026 2025
Revenues of LSV $ 115,454 $ 99,928 16%
Net income of LSV 83,297 74,514 12%
SEI's proportionate share in earnings of LSV $ 32,092 $ 28,747 12%
The increase in earnings from LSV in the three months ended March 31, 2026 was primarily due to market appreciation of assets under management during 2025. Negative cash flows from existing clients and client losses partially offset the increase in earnings from LSV. Average assets under management by LSV increased $13.7 billion to $104.6 billion during the three months ended March 31, 2026 as compared to $90.9 billion during the three months ended March 31, 2025, an increase of 15%.
On April 1, 2026, LSV provided an interest in the partnership to select key employees which reduced the ownership percentage of each existing partner on a pro-rata basis. As a result, our total partnership interest in LSV was reduced slightly to approximately 38.4% from approximately 38.5% (See Note 2 to the Consolidated Financial Statements).
Net gain from consolidated variable interest entities
Net gain from consolidated variable interest entities in the three months ended March 31, 2026 reflects the total net gains of the LSV Global Market Neutral Fund LP consolidated into our financial statements. The portion of this gain associated with our investment in the fund was $1.5 million during the three months ended March 31, 2026 (See Notes 1 and 15 to the Consolidated Financial Statements).
Amortization
Amortization expense on the accompanying Consolidated Statements of Operations consists of:
Three Months Ended March 31, Percent Change
2026 2025
Capitalized software development costs $ 9,072 $ 7,197 26%
Intangible assets acquired through acquisitions and asset purchases 9,197 3,449 167%
Other $ 85 $ 64 33%
Total amortization expense $ 18,354 $ 10,710 71%
Capitalized software development costs
The increase in amortization expense related to capitalized software development costs during the three months ended March 31, 2026 was due to significant enhancements to SWP and the placement into service of SEI Scope during the third quarter 2025 (See Note 1 to the Consolidated Financial Statements).
Intangible assets acquired through acquisitions and asset purchases
The increase in amortization expense related to intangible assets during the three months ended March 31, 2026 was due to intangible assets related to the Stratos acquisition (See Note 12 to the Consolidated Financial Statements).
Income Taxes
Three Months Ended March 31, Percent Change
2026 2025
Provision for income taxes $ 54,024 $ 44,856 20%
Effective income tax rate 23.4 % 22.8 %
The increase in the effective tax rate for the three months ended March 31, 2026 was primarily due to non-deductible executive compensation. Under Section 162(m) of the Internal Revenue Code, the our federal income tax deduction for compensation paid to certain covered employees is limited. Compensation expense that exceeds this limitation is not deductible for income tax purposes but is recognized as expense for financial reporting purposes. As a result, we incurred a permanent difference during the three months ended March 31, 2026, which increased the effective tax rate.
Stock-Based Compensation
We recognized $14.5 million and $14.1 million in stock-based compensation expense during the three months ended March 31, 2026 and 2025, respectively. The amount of stock-based compensation expense recognized is primarily based upon management's estimate of when the financial vesting targets of outstanding stock options may be achieved. Any change in the estimate could result in the amount of stock-based compensation expense to be accelerated, spread out over a longer period, or reversed. This may cause volatility in the recognition of stock-based compensation expense in future periods and could materially affect earnings (See Note 7 to the Consolidated Financial Statements).
We expect to recognize approximately $49.2 million in stock-based compensation expense during the remainder of 2026.
Regulatory Matters
Like many firms operating within the financial services industry, we are experiencing a complex and changing regulatory environment across our markets. Our current scale and reach as a provider to the financial services industry, the introduction and implementation of new solutions for our financial services industry clients, the increased regulatory oversight of the financial services industry generally, new laws and regulations affecting the financial services industry and ever-changing regulatory interpretations of existing laws and regulations, and a greater propensity of regulators to pursue enforcement actions and other sanctions against regulated entities, have made this an increasingly challenging and costly regulatory environment in which to operate.
SEI and some of our regulated subsidiaries have undergone or been scheduled to undergo a range of periodic or thematic reviews, examinations or investigations by numerous regulatory authorities around the world, including the Office of the Comptroller of the Currency, the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Financial Conduct Authority of the United Kingdom (FCA), the Central Bank of Ireland (CBI), the Commission de Surveillance du Secteur Financier of the Grand Duchy of Luxembourg (CSSF), and others. These regulatory activities typically result in the identification of matters or practices to be addressed by us or our subsidiaries and, in certain circumstances, the regulatory authorities require remediation activities or pursue enforcement proceedings against us or our subsidiaries. As described under the caption "Regulatory Considerations" in our Annual Report on Form 10-K, the range of possible sanctions that are available to regulatory authorities include limitations on our ability to engage in business for specified periods of time or with certain restrictions, the revocation of registration, censures and fines. The direct and indirect costs of responding to these regulatory activities and of complying with new or modified regulations, as well as the potential financial costs and potential reputational impact against us of any enforcement proceedings that might result, is uncertain but could have a material adverse impact on our operating results or financial position.
Non-GAAP Information and Reconciliation
We present certain non-GAAP financial measures to supplement the consolidated financial statements prepared in accordance with GAAP. Management believes these measures provide useful information to investors by enhancing the understanding of our core operating performance and facilitating comparisons across reporting periods. These non-GAAP measures are also used by our management to evaluate operating results, allocate resources, and assess performance against strategic objectives.
These non-GAAP financial measures should be viewed in addition to, and not as a substitute for, reported results prepared in accordance with GAAP.
The following schedules reconcile U.S. GAAP Net income attributable to SEI Investments Company and Income from operations on the accompanying Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
2026 2025
Net income attributable to SEI Investments Company (U.S. GAAP basis) $ 174,487 $ 151,517
Non-GAAP adjustments:
Acquisition-related:
Intangible assets amortization & impairments(1)
6,634 3,449
Total acquisition-related 6,634 3,449
Income tax effect(2)
(1,553) (788)
Adjusted net income attributable to SEI Investments Company (non-GAAP basis) $ 179,568 $ 154,178
Diluted earnings per common share (U.S. GAAP basis) $ 1.40 $ 1.17
Adjusted diluted earnings per common share (non-GAAP basis) $ 1.44 $ 1.19
Diluted weighted average shares outstanding 124,494 129,450
Three Months Ended March 31,
2026 2025
Income from operations (U.S. GAAP Basis) 189,486 157,097
Non-GAAP adjustments:
Acquisition-related:
Intangible assets amortization & impairments(1)
9,197 3,449
Total acquisition-related 9,197 3,449
Adjusted income from operations (non-GAAP Basis) $ 198,683 $ 160,546
(1) This non-GAAP adjustment removes the impact of amortization expense associated with acquired intangible assets (e.g., customer relationships, technology, trade names). This adjustment removes only amortization recorded in the current period related to acquired intangibles from prior acquisitions. The Q1 2026 adjustment includes the amortization of intangibles related to the Stratos acquisition, which are offset by the NCI adjustment. The associated revenues are not adjusted. Management believes adjusting for these charges helps the reader's ability to understand our core operating results and increases comparability quarter to quarter.
(2) Income tax effects are presented as a separate reconciling item (not netted within each adjustment). For performance measures, the tax effect reflects current and deferred tax expense commensurate with the adjusted measure of profitability. The methodology used (e.g., statutory rate, effective rate, or discrete item approach) is consistently applied. All of the above items use a systematic approach.
Liquidity and Capital Resources
Three Months Ended March 31,
2026 2025
Net cash provided by operating activities $ 221,576 $ 146,480
Net cash provided by (used in) investing activities (12,226) (38,350)
Net cash used in financing activities (238,376) (241,548)
Effect of exchange rate changes on cash and cash equivalents (1,328) 4,212
Net change in cash and cash equivalents and cash and cash equivalents held at consolidated variable interest entities (30,354) (129,206)
Cash, cash equivalents and cash and cash equivalents held at consolidated variable interest entities, beginning of period 470,595 840,193
Cash, cash equivalents and cash and cash equivalents held at consolidated variable interest entities, end of period $ 440,241 $ 710,987
Our credit facility provides for borrowings up to $500.0 million and is scheduled to expire in August 2030 (See Note 6 to the Consolidated Financial Statements). As of April 10, 2026, we had outstanding letters of credit of $4.6 million which reduced the amount available under the credit facility. These letters of credit were primarily issued for the expansion of the
corporate headquarters and are due to expire in 2026. As of April 10, 2026, the amount of the credit facility available for corporate purposes was $495.4 million.
The availability of the credit facility is subject to compliance with certain covenants set forth in the agreement. The credit facility contains covenants which restrict our ability to engage in transactions with affiliates other than wholly-owned subsidiaries or to incur liens or certain types of indebtedness as defined in the agreement. In the event of a default under the credit facility, we would also be restricted from paying dividends on, or repurchasing our common stock. Currently, our ability to borrow from the credit facility is not limited by any covenant of the agreement (See Note 6 to the Consolidated Financial Statements).
The majority of excess cash reserves are primarily placed in accounts located in the United States that invest in commercial paper and SEI-sponsored money market mutual funds denominated in the U.S. dollar. We also utilize demand deposit accounts or money market accounts at several well-established financial institutions located in the United States. Accounts used to manage these excess cash reserves do not impose any restrictions or limitations that would prevent us from being able to access such cash amounts immediately. As of April 10, 2026, the amount of cash and cash equivalents considered free and immediately accessible for other general corporate purposes was $119.1 million.
Cash and cash equivalents include cash of $77.1 million held in accounts of the LSV Global Equity Market Neutral Fund, LP consolidated into our financial statements and may only be used to settle obligations of the fund (See Note 15 to the Consolidated Financial Statements).
Cash and cash equivalents also include accounts managed by subsidiaries that are used in their operations or to cover specific business and regulatory requirements. The availability of this cash for other purposes beyond the operations of these subsidiaries may be limited. We therefore do not include accounts of foreign subsidiaries in the calculation of free and immediately accessible cash for other general corporate purposes. A portion of the undistributed earnings of foreign subsidiaries are deemed repatriated. Any subsequent transfer of available cash related to the repatriated earnings of foreign subsidiaries could significantly increase free and immediately accessible cash.
Cash flows from operations increased $75.1 million in the first three months of 2026 compared to the first three months of 2025 primarily from the positive change in working capital accounts and the increase in net income attributable to SEI. The increase was partially offset by the decrease in accrued liabilities and non-cash items.
Net cash from investing activities includes:
•Purchases, sales and maturities of marketable securities. Purchases, sales and maturities of marketable securities in the first three months of 2026 and 2025 were as follows:
Three Months Ended March 31,
2026 2025
Purchases $ (39,043) $ (50,113)
Sales and maturities 37,179 30,949
Net investing activities from marketable securities $ (1,864) $ (19,164)
See Note 5 to the Consolidated Financial Statements for more information related to marketable securities.
•The capitalization of costs incurred in developing computer software. We capitalized $5.5 million of software development costs in the first three months of 2026 as compared to $7.4 million in the first three months of 2025 related to significant enhancements for the expanded functionality of the SEI Wealth Platform and a new platform for the Investment Managers segment.
•Capital expenditures. Capital expenditures in the first three months of 2026 were $6.4 million as compared to $8.7 million in the first three months of 2025. Expenditures in 2026 and 2025 include capital outlays for purchased software and equipment for data center operations.
Net cash from financing activities includes:
•The repurchase of common stock. We had total capital outlays of $214.8 million during the first three months of 2026 and $203.7 million during the first three months of 2025 for the repurchase of common stock.
•Proceeds from the issuance of common stock. We received $39.6 million and $24.5 million in proceeds from the issuance of common stock during the first three months of 2026 and 2025, respectively, through our equity compensation plans. These proceeds were primarily from stock option exercise activity.
•Dividend payments. Cash dividends paid were $63.7 million in the first three months of 2026 as compared to $62.3 million in the first three months of 2025.
Cash Requirements
Cash requirements and liquidity needs are primarily funded through cash flow from operations and our capacity for additional borrowing. At March 31, 2026, unused sources of liquidity consisted of cash and cash equivalents and the amount available under our credit facility.
We are obligated to make payments in connection with the credit facility, operating leases, maintenance contracts, promissory notes and other commitments. We believe our operating cash flow, available borrowing capacity, and existing cash and cash equivalents will provide adequate funds for these obligations and ongoing operations. We currently anticipate that our available funds and cash flow from operations will be sufficient to meet our operational cash needs, expected M&A activity, and fund our stock repurchase program for at least the next 12 months and for the foreseeable future.
Forward-Looking Information and Risk Factors
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information contained in this discussion is or may be considered forward-looking. Forward-looking statements relate to future operations, strategies, financial results or other developments. Forward-looking statements are based upon estimates and assumptions that involve certain risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe our assumptions are reasonable, they could be inaccurate. Our actual future revenues and income could differ materially from our expected results. We have no obligation to publicly update or revise any forward-looking statements.
Among the risks and uncertainties which may affect our future operations, strategies, financial results or other developments are those risks described in our latest Annual Report on Form 10-K in Part I, Item 1A. These risks include the following:
•Market-driven risks related to capital market conditions, asset values, interest rates, market volatility, and investor sentiment;
•Client and relationship risks, including client attrition, unfavorable contract renewals, and loss of large clients;
•Fee compression and competitive pricing pressure across investment management and technology services;
•Product development and innovation risks, including delays, cost overruns, system issues, and failure of new offerings to gain market acceptance Business model innovation and expansion risks, including entry into new markets or channels (e.g., direct-to-consumer);
•Market consolidation and competitive disruption from traditional competitors, fintechs, and large technology firms;
•Key personnel and broader human capital risks, including retention, workforce reductions, and talent availability;
•Outsourcing and offshoring strategy risks associated with the Global Capability Center in India;
•M&A execution and integration risks, including the Stratos acquisition and other strategic transactions;
•Dependence on third-party service providers, vendors, market infrastructure, sub-advisers, and pricing services;
•Process errors in fund accounting, investment operations, pricing, and other judgment-based or manual activities;
•Operational resilience risks, including business continuity and disaster recovery failures;
•Rapid growth and capacity constraints impacting cost structure, compliance, controls, cybersecurity, and scalability;
•Cybersecurity threats, including cyberattacks, data breaches, system failures, and third-party technology risks;
•Risks related to artificial intelligence, machine learning, and automation, including model risk, bias, and regulatory uncertainty;
•Tokenization risks, including regulatory uncertainty, cybersecurity, custody, valuation, liquidity, and smart contract risks;
•Open-source software risks, including security vulnerabilities and license compliance;
•Data privacy and protection risks related to handling sensitive personal and client data;
•Intellectual property risks involving protection of proprietary technology and infringement claims;
•System outages and downtime affecting platform availability, processing, and data integrity;
•Technology disruption, software defects, and development or implementation delays;
•Earnings volatility and cash flow exposure, including reliance on LSV Asset Management and strategic investments;
•Interest rate, currency, and tax law change risks affecting revenues, margins, and asset values;
•Covenant compliance risks under revolving credit facilities;
•Holding company structure risks, including restrictions on subsidiary cash distributions;
•Liquidity risk, particularly during market stress and in alternative investments;
•Investment performance risk and continued fee pressure across investment products;
•Insourcing of investment functions and increased operational complexity;
•Proprietary capital deployment risks and conflicts of interest;
•Fiduciary risk related to retirement plans, OCIO services, and competitive pressures;
•Regulatory changes and evolving compliance obligations across U.S. and global jurisdictions;
•Financial crime, sanctions, AML, and anti-corruption compliance risks;
•Privacy and data protection regulatory risk;
•Conflicts of interest involving clients, affiliates, directors, executives, and acquisitions;
•Litigation, regulatory examinations, and investigations;
•Shareholder activism and ESG-related scrutiny;
•Geopolitical instability, including wars, global tensions, and state-sponsored cyber activity;
•Unforeseen or catastrophic events, including pandemics, extreme weather, and natural disasters; and
•Climate change and ESG-related risks, including regulatory, reputational, and transition risks.
We conduct operations through many regulated wholly-owned subsidiaries. These subsidiaries include:
•SEI Investments Distribution Co., or SIDCO, a broker-dealer registered with the SEC under the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority, Inc., or FINRA;
•SEI Investments Management Corporation, or SIMC, an investment advisor registered with the SEC under the Investment Advisers Act of 1940 and with the Commodity Futures Trading Commission, or CFTC, under the Commodity Exchange Act;
•SEI Private Trust Company, or SPTC, a limited purpose federal thrift chartered and regulated by the Office of the Comptroller of the Currency;
•SEI Trust Company, or STC, a Pennsylvania trust company, regulated by the Pennsylvania Department of Banking and Securities;
•SEI Institutional Transfer Agent, Inc., or SITA, a transfer agent registered with the SEC under the Securities Exchange Act of 1934.
•SEI Investments (Europe) Limited, or SIEL, an investment manager and financial institution subject to regulation by the Financial Conduct Authority of the United Kingdom, or FCA;
•SEI Investments Canada Company, or SEI Canada, an investment fund manager that has various other capacities that is regulated by the Ontario Securities Commission and various provincial authorities;
•SEI Investments Global, Limited, or SIGL, a management company for Undertakings for Collective Investment in Transferable Securities, or UCITS, and for Alternative Investment Funds, or AIFs, that is regulated primarily by the Central Bank of Ireland, or CBI;
•SEI Investments - Global Fund Services, Ltd., or GFSL, an authorized provider of administration services for Irish and non-Irish collective investment schemes that is regulated by the CBI;
•SEI Investments - Depositary and Custodial Services (Ireland) Limited, or D&C, an authorized provider of depositary and custodial services that is regulated by the CBI;
•SEI Investments - Luxembourg S.A., or SEI Lux, a professional of the specialized financial sector subject to regulation by the Commission de Surveillance du Secteur Financier of the Grand Duchy of Luxembourg;
•SEI Investments Global (Cayman), Ltd., a full mutual fund administrator that is regulated by the Cayman Island Monetary Authority;
•SEI Investments (South Africa) (PTY) Limited, a Private Company that is a licensed Financial Service Provider regulated by the Financial Sector Conduct Authority; and
•SEI Investments - Guernsey Limited, a provider of custody, administration and reporting services that is regulated by the Guernsey Financial Services Commission.
In addition to the regulatory authorities listed above, our subsidiaries are subject to the jurisdiction of regulatory authorities in other foreign countries or jurisdictions. Further, in connection with our strategic investment in Stratos, we own 57.5% of the holding company that holds the equity of Stratos Wealth Securities, LLC, a limited purpose broker-dealer registered
with the SEC under the Securities Exchange Act of 1934 and a member of FINRA, and the following SEC registered investment advisors:
•Stratos Wealth Advisors, LLC;
•Stratos Wealth Partners, Ltd.;
•Stratos Investment Management, LLC;
•Renaissance Investment Group, LLC; and
•Norland LLC.
In addition to our wholly-owned or majority-owned subsidiaries, we also own a minority interest of approximately 38.4% in LSV, which is also an investment advisor registered with the SEC.
The Company, its regulated subsidiaries, their regulated services and solutions and their customers are all subject to extensive legislation, regulation, and supervision that recently has been subject to, and continues to experience, significant change and increased regulatory activity. These changes and regulatory activities could have a material adverse effect on us and our clients.
The various governmental agencies and self-regulatory authorities that regulate or supervise the Company and its subsidiaries have broad administrative powers. In the event of a failure to comply with laws, regulations, and requirements of these agencies and authorities, or to meet regulator expectations, the possible business process changes required or sanctions that may be imposed include the suspension of individual employees, limitations on our ability to engage in business for specified periods of time or a direction that we comply with certain restrictions, the revocation of applicable registration as a broker-dealer, investment advisor or other regulated entity, and, as the case may be, censures and fines. Currently, our subsidiary in the United Kingdom, SIEL, is working with the FCA to determine the nature and scope of remedial actions in which SIEL will engage in order to meet the FCA's expectations and to enable SIEL to continue to grow and execute on its development and offering of new products and solutions. Additionally, certain securities and banking laws applicable to us and our subsidiaries provide for certain private rights of action that could give rise to civil litigation. Any litigation could have significant financial and non-financial consequences including monetary judgments and the requirement to take action or limit activities that could ultimately affect our business.
Governmental scrutiny from regulators, legislative bodies, and law enforcement agencies with respect to matters relating to our regulated subsidiaries and their activities, services and solutions, our business practices, our past actions and other matters has increased dramatically in the past several years. Responding to these examinations, investigations, actions, and lawsuits, regardless of the ultimate outcome of the proceeding, is time consuming and expensive and can divert the time and effort of our senior management from our business. Penalties, fines and changes to business processes sought by regulatory authorities have increased substantially over the last several years, and certain regulators have been more likely in recent years to commence enforcement actions or to advance or support legislation targeted at the financial services industry. We continue to be subject to inquiries from examinations and investigations by supervisory and enforcement divisions of regulatory authorities and expect this to continue in the future. We believe this is also the case with many of our regulated clients. Governmental scrutiny and legal and enforcement proceedings can also have a negative impact on our reputation, our relationship with clients and prospective clients, and on the morale and performance of our employees, which could adversely affect our businesses and results of operations.
We are subject to U.S. and foreign anti-money laundering and financial transparency laws that require implementation of regulations applicable to financial services companies, including standards for verifying client identification and monitoring client transactions and detecting and reporting suspicious activities. We offer investment and banking solutions that also are subject to regulation by the federal and state securities and banking authorities, as well as foreign regulatory authorities, where applicable. Existing or future regulations that affect these solutions could lead to a reduction in sales of these solutions or require modifications of these solutions.
We must comply with economic sanctions and embargo programs administered by the Office of Foreign Assets Control (OFAC) and similar national and multinational bodies and governmental agencies outside the United States, as well as anti-corruption and anti-money laundering laws and regulations throughout the world. We can incur higher costs and face greater compliance risks in structuring and operating our businesses to comply with these requirements. Furthermore, a violation of a sanction or embargo program or anti-corruption or anti-money laundering laws and regulations could subject us and our subsidiaries, and individual employees, to regulatory enforcement actions as well as significant civil and criminal penalties.
Our businesses are also subject to privacy and data protection information security legal requirements concerning the use and protection of certain personal information. These include those adopted pursuant to the Gramm-Leach-Bliley Act and the Fair and Accurate Credit Transactions Act of 2003 in the United States, the General Data Protection Regulation (GDPR) in the EU, Canada's Personal Information Protection and Electronic Documents Act, the Cayman Islands' Data
Protection Law, and various other laws. Privacy and data security legislation is a priority issue in many states and localities in the United States, as well as foreign jurisdictions outside of the EU. For example, California enacted the California Consumer Privacy Act (CCPA) which broadly regulates the sale of the consumer information of California residents and grants California residents certain rights to, among other things, access and delete data about them in certain circumstances. Other states are considering similar proposals. Such attempts by the states to regulate have the potential to create a patchwork of differing and/or conflicting state regulations. Ensuring compliance under ever-evolving privacy legislation, such as GDPR and CCPA, is an ongoing commitment, which involves substantial costs.
Compliance with existing and future regulations and responding to and complying with recent increased regulatory activity affecting broker-dealers, investment advisors, investment companies, financial institutions, and their service providers could have a significant impact on us. We periodically undergo regulatory examinations and respond to regulatory inquiries and document requests. In addition, recent and continuing legislative activity in the United States and in other jurisdictions (including the European Union and the United Kingdom) have made and continue to make extensive changes to the laws regulating financial services firms. As a result of these examinations, inquiries, and requests, as a result of increased civil litigation activity, and as a result of these new laws and regulations, we engage legal counsel and other subject matter experts, review our compliance procedures, solution and service offerings, and business operations, and make changes as we deem necessary or as may be required by the applicable authority. These additional activities and required changes may result in increased expense or may reduce revenues.
Our bank clients are subject to supervision by federal, state, and foreign banking and financial services authorities concerning the manner in which such clients purchase and receive our products and services. Our plan sponsor clients and our subsidiaries providing services to those clients are subject to supervision by the Department of Labor and compliance with employee benefit regulations. Investment advisor and broker-dealer clients are regulated by the SEC, state securities authorities, or FINRA. Existing or future regulations applicable to our clients may affect our clients' purchase of our products and services.
In addition, see the discussion of governmental regulations in Item 1A "Risk Factors" in our latest Annual Report on Form 10-K for a description of the risks that the current regulatory regimes and proposed regulatory changes may present for our business.
SEI Investments Company published this content on April 27, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 27, 2026 at 18:46 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]