SEI Investments Company

SEI reported Q2 revenue up 15% year over year, adjusted operating profit up 36%, and adjusted EPS up 38%, with all three setting quarterly records. Sean Denham said the EPS increase was driven by mid-teens revenue growth, 500 basis points of margin expansion, and a 3% reduction in share count. Revenue was up $82 million year over year while expenses rose $34 million. Sales events were $43 million in the quarter and $110 million year to date. Adjusted operating margins increased 500 basis points versus Q2 2025 and 30 basis points versus Q1. The company ended the quarter with nearly $400 million of cash and bought back $112 million of stock. Management did not give formal revenue or EPS guidance, but said the pipeline remains outstanding and they are encouraged by what they see for second-half revenue.

Ryan Hicke framed the quarter as evidence of strategic execution rather than a one-quarter result, pointing to changes made over several years in capital allocation, operating discipline and product strategy. He emphasized growth opportunities in private markets, retirement channels, ETFs, Stratos, and AI-enabled operational modernization, saying these initiatives are already showing traction even if they contribute little today. His tone was notably confident and expansive, especially around SEI’s ability to serve as the “connective tissue” across modern financial services.

Sean Denham focused on operating leverage and the conversion of sales into revenue. He said the 38% EPS growth was driven by revenue growth, 500 basis points of margin expansion and a 3% share-count reduction, while adjusted margins improved 500 basis points year over year and 30 basis points sequentially. He also cited $7.5 million of VIE gain from an LSV hedge fund co-investment, nearly $4 million of other mark-to-market gains, and around $3 million less severance expense sequentially. On capital allocation, he noted nearly $400 million of cash, $112 million of Q2 buybacks, and said repurchase activity should increase in the second half given the cash flow outlook.

Analysts focused on whether private banking margins can keep improving, whether AI and outsourcing demand are broadening, and how much of the growth in Data Cloud and professional services is tied to modernization versus AI specifically. Management said private banking margin gains are being driven by a mix of growth initiatives, efficiency improvements, and higher-margin professional services embedded in new deals, and that Data Cloud is the foundation for clients’ AI readiness. They also said the IBM relationship is enterprise-wide, starting with IMS and expanding across SEI, while outsourcing demand is rising across segments as clients look to modernize and do more with fewer partners.