Adjusted EPS and Earnings Growth
Q1 adjusted EPS of $1.44, up more than 20% year-over-year (Sean: adjusted EPS +21% YoY; GAAP EPS +20% YoY). Adjusted operating income increased versus the prior quarter and drove meaningful EPS expansion.
SEI Investments Company
· SEIC
April 22nd, 2026
Summary
- Earnings Call Date:
- 2026-04-22
- Change Since:
- +5.44%
- Next Earnings Date:
- 2026-07-29
Earnings Call Sentiment
PositiveThe call conveyed strong, broad-based operational execution: double-digit adjusted EPS growth, a record quarter of net sales events (driven by large IMS enterprise mandates), improved adjusted operating profits and margin expansion, robust share repurchases and continued asset momentum (Advisors inflows and AUA/platform +4%). Near-term headwinds include a sequential EPS decline driven by tax and LSV seasonality (~$0.15), IMS margin drag from onboarding costs and the absence of a prior accrual true-up (~150 bps), LSV outflows (~$2B) and one-time consolidation impacts from Stratos (intangible amortization). Management framed AI and the IBM partnership as net positives and expects the large IMS wins to expand revenues over time, though they will create some lumpiness and near-term margin pressure. Taken together, the positives (record sales, double-digit EPS and operating profit growth, margin expansion and disciplined capital return) substantially outweigh the near-term and manageable lowlights.
Company Guidance
Management guided that momentum should continue: they expect sales events to trend up year‑over‑year after Q1’s record $67M of net sales events ($57M recurring, $10M professional services) led by IMS’ >$50M, with the large IMS wins ramping revenue over coming quarters and margins for those deals normalizing by mid‑2027 (year‑one revenue/expense roughly flat); they expect institutional flows to be net‑positive later this year after Q1’s < $1B institutional outflow (driven by a DB annuitization), and Asset Management posted ~$1.5B of net inflows in Q1 while AUA/on‑platform rose 4%. On profitability they reiterated confidence in continued margin expansion after Q1 adjusted EPS of $1.44 (+21% YoY; GAAP EPS +20% YoY), adjusted operating profit +24% YoY (+6% sequentially) and noted a $0.15 EPS headwind versus Q4 from tax/LSV seasonality; capital allocation commentary included $208M of repurchases in Q1, $363M of cash on the balance sheet, and a commitment to remain active buyers. Stratos (first full quarter) contributed ~ $20M revenue / $3M operating profit (~$8M consolidated EBITDA ex‑D&A), 1/3 of Professional Services sales events were international, and SEI reiterated that these initiatives support continued growth and margin improvement.
Record Net Sales Events
Delivered $67 million of net sales events in Q1 (including $57M recurring and $10M professional services), exceeding the prior quarterly record by more than 40%. Investment Manager Services led the quarter with ~ $50M+ of IMS sales events driven by multiple large, first-time enterprise mandates.
Adjusted Operating Profit and Margin Expansion
Adjusted operating profit increased ~24% year-over-year and ~6% sequentially. Consolidated adjusted operating profit margins improved versus both the prior quarter and prior year (management referenced core margins in the low-30% range and noted segment-level margin expansion).
Asset Momentum and Net Flows
Asset Management momentum: Advisors delivered approximately $1.5 billion of net inflows in the quarter; assets under administration and on platform increased ~4% driven by new business wins and lower mark-to-market sensitivity. Institutional flows were impacted by an annuitization event but pipeline visibility suggests improved flow performance later in the year.
Stratos Integration and Contribution
First full quarter with Stratos (57.5% ownership). Stratos contributed nearly $20M of revenue and $3M of operating profit to Advisors in Q1 before noncontrolling interests; excluding depreciation/amortization, Stratos generated about $8M of consolidated EBITDA. Integration workstreams underway with pipeline benefits anticipated.
Professional Services Momentum and Client Wins
Professional Services supporting growth across business lines (e.g., Huntington Bank win). Investments in new businesses generated ~ $4M of net sales events. Re-contracted 8 Private Banking clients, retaining ~$34M of recurring revenue with an average 4-year term. More than one-third of Professional Services sales events were international in Q1.
Capital Allocation and Balance Sheet Strength
Repurchased ~$208M of SEI shares in Q1; ended the quarter with ~$363M of cash on the balance sheet and significant financial flexibility to continue buybacks and opportunistic deployment of capital.
AI and Enterprise Modernization Initiatives
Management emphasized AI as a growth and margin-acceleration catalyst. Announced partnership with IBM to accelerate infrastructure modernization, automation and responsible AI deployment. Ongoing two-year AI investments, use cases in client advisory, operations and Professional Services noted as margin-enhancing.
Operator
Hello, and thank you for standing by. Welcome to SEI First Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to Brad Burke. You may begin.
Bradley Burke
Thank you, and welcome, everyone, to SEI's First Quarter 2026 Earnings Call. We appreciate you joining us today. On the call, we have Ryan Hicke, SEI's Chief Executive Officer; Sean Denham, our Chief Financial and Chief Operating Officer; and members of our executive management team, including Michael Lane, Phil McCabe, Mike Peterson, Sneha Shah, Sanjay Sharma and Amy Sliwinski. Before we begin, I'd like to point out that our earnings press release and the presentation accompanying today's call can be found under the Investor Relations section of our website at seic.com. This call is being webcast live, and a replay will be available on the Events and Webcast page of our website. With that, I'll now turn the call over to Ryan. Ryan?
Ryan Hicke
Thank you, Brad, and good afternoon, everyone. This was a defining quarter for SEI. Q1 was not simply a strong start to the year. We believe it is emphatic evidence that the strategic and operating changes we have made set a new standard for what SEI is capable of delivering on a sustained basis. Q1 adjusted EPS totaled $1.44. That's more than a 20% increase from last year, driven by both top line growth and margin expansion. We also delivered $67 million of net sales events in Q1, including $57 million of recurring revenue and $10 million of professional services. This is an outstanding outcome.
It exceeds our prior quarterly record by more than 40%. T...
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