On July 24, 2024, SEI Investments Co (SEIC, Financial) released its 8-K filing for the second quarter of 2024. SEI Investments provides investment processing, management, and operations services to financial institutions, asset managers, asset owners, and financial advisors. The company operates in four segments: private banks, investment advisors, institutional investors, and investment managers. SEI also holds a minority interest in LSV Asset Management, managing approximately $1.4 trillion in assets as of December 2023.
Performance Overview
SEI Investments Co (SEIC, Financial) reported diluted earnings per share (EPS) of $1.05 for Q2 2024, surpassing the analyst estimate of $1.04. This represents an 18% increase from $0.89 in Q2 2023. The company’s revenue for the quarter was $518.99 million, slightly below the estimated $523.80 million but still marking a 6% year-over-year growth from $489.06 million in Q2 2023.
Financial Achievements and Challenges
SEI Investments Co (SEIC, Financial) achieved notable financial milestones this quarter. Net income rose by 17% to $139.12 million from $118.85 million in the same period last year. The company’s focus on capital allocation, operational leverage, and revenue growth has been instrumental in driving these results. However, challenges such as client losses in the Institutional Investors segment and negative cash flows from SEI fund programs partially offset revenue growth.
Segment Performance
| Segment | Revenue (Q2 2024) | Revenue (Q2 2023) | Change | Operating Margin (Q2 2024) | Operating Margin (Q2 2023) |
|---|---|---|---|---|---|
| Private Banks | $132.40M | $132.41M | 0% | 15% | 14% |
| Investment Advisors | $120.59M | $109.58M | 10% | 43% | 41% |
| Institutional Investors | $71.51M | $75.15M | -5% | 46% | 39% |
| Investment Managers | $179.87M | $159.20M | 13% | 38% | 35% |
| Investments in New Businesses | $14.62M | $12.71M | 15% | NM | NM |
Key Financial Metrics
SEI Investments Co (SEIC, Financial) reported a total revenue of $518.99 million for Q2 2024, a 6% increase from $489.06 million in Q2 2023. The company’s operating profit rose by 21% to $136.51 million, driven by a 1% increase in expenses to $349.14 million. The operating margin improved across most segments, reflecting the company’s efficient cost management and operational leverage.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Total Revenue | $518.99M | $489.06M | 6% |
| Net Income | $139.12M | $118.85M | 17% |
| Diluted EPS | $1.05 | $0.89 | 18% |
Balance Sheet and Cash Flow
SEI Investments Co (SEIC, Financial) reported total assets of $2.53 billion as of June 30, 2024, up from $2.52 billion at the end of 2023. The company’s cash flow from operations was $114.7 million, with a free cash flow of $100.6 million for Q2 2024. The company repurchased 1.6 million shares of common stock for $111.2 million during the quarter, reflecting its commitment to returning value to shareholders.
Commentary
"Our second-quarter results reflect 6% revenue growth year over year, as our focus on capital allocation, operational leverage, and revenue growth is seeing real traction and delivering results. We also have momentum across our markets, particularly with the increased adoption of our platforms in our technology and operational businesses," said CEO Ryan Hicke.
Analysis
SEI Investments Co (SEIC, Financial) has demonstrated robust financial performance in Q2 2024, exceeding EPS estimates and achieving significant revenue growth. The company’s strategic focus on capital allocation and operational efficiency has yielded positive results, despite challenges in certain segments. The increase in operating margins across most segments indicates effective cost management and operational leverage. With continued investments in growth areas and a strong balance sheet, SEI Investments Co (SEIC) is well-positioned to capitalize on future opportunities in the asset management industry.
Explore the complete 8-K earnings release (here) from SEI Investments Co for further details.
