SEI Investments ((SEIC)) has held its Q4 earnings call. Read on for the main highlights of the call.
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SEI Investments Reports Strong Earnings Growth Amid Challenges
SEI Investments showcased a robust performance in its recent earnings call, reporting strong earnings growth and record sales events. The positive sentiment was bolstered by broad-based performance across its business units and strategic investments. Despite facing challenges such as institutional asset outflows and flat assets under management (AUM), SEI demonstrated resilience with significant capital returned to shareholders and sustained demand for alternative investment products.
Record Sales Events
SEI Investments marked a milestone with sales events totaling $38 million for Q4 2024, with $28 million being net recurring. This achievement marks the second consecutive quarter of substantial growth in net sales events, highlighting the company’s strategic success in capturing market opportunities.
Earnings Per Share Growth
The company reported an impressive earnings per share (EPS) of $1.19 for Q4 2024, reflecting a 31% increase from the previous year and a 27% growth for the full year compared to 2023. This growth underscores SEI’s robust financial health and effective operational strategies.
Broad-Based Revenue Growth
Every business unit within SEI Investments realized growth in revenue, operating profit, and margins relative to the fourth quarter of the previous year. This broad-based growth demonstrates the company’s strength in its diverse business operations and its ability to capitalize on market opportunities.
Significant Capital Return to Shareholders
SEI Investments returned a record $259 million in stock repurchases during Q4, the highest in the company’s history. Additionally, the company increased its dividend by 6.5%, reflecting its commitment to returning value to shareholders and confidence in its financial standing.
Strong Alternative Investment Product Demand
There was continued strong demand for SEI’s alternative investment products, particularly within its investment managers’ and intermediary businesses. This sustained demand highlights the company’s strategic positioning in the alternative investments market.
Enterprise Mindset Success
A shift towards an enterprise-first mindset has been pivotal to SEI’s recent successes, notably winning partnerships such as the one with Close Brothers. This strategic shift is driving collaboration and innovation across the organization.
Institutional Asset Outflows
The institutional business faced asset outflows due to expected plan terminations. While this presents a challenge, SEI is focusing on strategic adjustments to mitigate the impacts and align with long-term goals.
LSV Net Outflows
LSV experienced net outflows, attributed to structural pressures facing active asset managers. SEI is adapting to these industry challenges with strategic initiatives aimed at stabilizing and growing its asset base.
Flat Assets Under Management
Total assets under management and administration remained nearly flat compared to the prior quarter, despite growth within certain areas. This indicates a stable asset base amidst a challenging market environment.
Increased Incentive Compensation Impact
The quarter saw an approximately $0.02 headwind from increased incentive compensation, which impacted EPS comparability. SEI’s management remains focused on optimizing compensation structures to enhance performance.
Forward-Looking Guidance
SEI Investments provided a forward-looking outlook that includes a focus on investment strategies for 2025. For the full year, net sales events reached nearly $130 million, and the company’s EPS for 2024 grew by 27% year-over-year, reaching $4.41. Despite challenges such as asset outflows, SEI’s business units are expected to continue experiencing revenue, operating profit, and margin growth. The company is concentrating on strategic investments to drive future growth.
In summary, SEI Investments’ earnings call reflected a positive overall sentiment with strong earnings growth and strategic success across its business units. The company is effectively navigating challenges such as asset outflows, while maintaining a focus on returning value to shareholders and investing for future growth. The forward-looking guidance suggests continued strength in SEI’s financial and operational performance.
