SEI Investments beats Q2 estimates with record revenue of $641.6M

SEI Investments reported record Q2 revenue of $641.6 million and adjusted EPS of $1.66, beating consensus estimates.

"The quarter is less about what happened during the last three months and more a reflection of the changes we have made over the past few years," Chief Executive Officer Ryan Hicke said.

Revenue rose 15% from $559.6 million a year earlier, while adjusted operating profit climbed 36% and adjusted EPS grew 38%. Analysts surveyed by Zacks had expected EPS of $1.45. The company generated $43 million in sales events during the quarter, bringing the year-to-date total to $110 million.

Metric	Actual	Consensus	Beat/Miss
Revenue	$641.6M	$638.0M*	+0.6%
Adj. EPS	$1.66	$1.45	+14.5%

*Zacks consensus estimate

SEI ended the quarter with nearly $400 million in cash and repurchased $112 million of stock at an average price of $87. Shares have gained 19.1% year to date, outpacing the S&P 500's 9.7% advance.

Growth was broad-based. Investment Managers Services revenue rose 17%, Private Banking increased 11% and Advisors jumped 30%, benefiting from higher market values and the Stratos platform. Institutional was the exception, with operating profit roughly flat as the company invested in asset management initiatives.

Stratos contributed $21 million of revenue, up 11% from the first quarter, with EBITDA exceeding $9 million. Hicke said SEI's private markets retail initiative could generate more than $100 million of annual run-rate revenue within five years. The company's ETF lineup has grown to more than $8 billion in assets from $3 billion over the past 12 months.

Chief Financial and Chief Operating Officer Sean Denham said the earnings growth reflected mid-teens revenue growth, 500 basis points of margin expansion and a 3% reduction in share count. He said SEI expects repurchases to increase from second-quarter levels.

The results show management expects demand to remain strong across multiple segments. Investors will watch for continued conversion of the company's sales pipeline into revenue in the second half of the year.

This article is for informational purposes only and does not constitute investment advice.