SEI Investments Company: 2025 Annual Report (10-K) Summary
Business Context and Reporting Period
This summary covers the fiscal year ended December 31, 2025. SEI Investments Company is a global provider of financial technology, operations, and asset management solutions. The company serves four core segments: Investment Managers, Private Banks, Investment Advisors, and Institutional Investors. As of year-end 2025, SEI managed, advised, or administered approximately $1.9 trillion in assets. A significant strategic development in 2025 was the completion of the first stage of a strategic investment in Stratos Wealth Holdings, a network of affiliated financial advisors, reinforcing SEI's footprint in the advice segment.
Key Financial Metrics
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Total Revenues | $2,297.4 million | $2,125.2 million | +8% |
| Net Income (Attributable to SEI) | $715.3 million | $581.2 million | +23% |
| Diluted EPS | $5.63 | $4.41 | +28% |
| Operating Income | $627.3 million | $551.7 million | +14% |
| Operating Margin | 27.3% | 26.0% | +130 bps |
| Cash from Operations | $607.7 million | $622.3 million | -2% |
| Free Cash Flow | $585.0 million* | $590.1 million* | -1% |
| Debt / Credit Facility | $0 outstanding / $500M available | $0 outstanding / $325M available | N/A |
*Free Cash Flow calculated as Cash from Operations less Capital Expenditures ($22.6M) and Capitalized Software ($30.0M).
Material Changes vs. Prior Period
- Revenue Growth: Revenues increased 8% driven by higher assets under administration (up 15% to $1.2 trillion) and growth in the Investment Advisors segment. The Investment Managers segment saw a 12% revenue increase due to new alternative fund clients.
- One-Time Gains: Net income was significantly boosted by a $94.4 million gain from the sale of the Family Office Services business in June 2025.
- Acquisitions: SEI acquired a 57.5% controlling interest in Stratos Wealth Holdings for approximately $440.8 million in cash consideration. This transaction added $38.4 billion in client assets to the Investment Advisors segment.
- Divestitures: The sale of Family Office Services resulted in a reduction of the "Investments in New Businesses" segment revenue by 18% compared to 2024.
- Expense Management: Operating expenses rose 6% primarily due to personnel costs, technology investments, and severance costs from a fourth-quarter reduction in force.
Guidance, Outlook, and Risks
Management Commentary & Outlook: Management highlighted a strategic pivot toward scalable, repeatable solutions in asset management and a strengthened position in the advice ecosystem via the Stratos investment. The company continues to invest heavily in the SEI Wealth Platform (SWP) and AI/automation to drive efficiency. Capital allocation remains focused on organic growth, M&A, and returning capital to shareholders through dividends and buybacks.
Capital Allocation:
- Share Repurchases: Repurchased 7.5 million shares for $616.2 million in 2025. Approximately $703.4 million remains authorized for future repurchases.
- Dividends: Paid $124.2 million in cash dividends ($1.01 per share). The Board declared a semi-annual dividend of $0.52 per share in December 2025.
Risks and Contingencies:
- Regulatory Scrutiny: SEI Investments (Europe) Limited (SIEL) is subject to a "Voluntary Requirement" (VREQ) by the UK Financial Conduct Authority (FCA) regarding governance and control environment improvements. This restricts new client agreements requiring significant senior management engagement until resolved.
- Legal Proceedings: Pending litigation includes the "Rubicon Actions" (potential exposure estimated at $15 million) and a class action regarding the SEI Capital Accumulation Plan (losses not estimable).
- Market Risks: Revenue is heavily influenced by asset values; market declines directly reduce fee income. Fee compression and competition from fintech/robo-advisors remain persistent threats.
- Cybersecurity: The company faces daily cyber-attacks and risks associated with AI adoption and third-party dependencies.
Investor Verification Checklist
- Stratos Integration: Verify the timeline and financial impact of the second stage of the Stratos acquisition (Mexico affiliate) and the integration of the U.S. business.
- Regulatory Resolution: Monitor the status of the FCA VREQ on SIEL and the timeline for lifting restrictions on new business.
- Asset Flows: Track net new assets in the Investment Managers segment, particularly in alternative investments, to confirm the sustainability of the 15% growth in assets under administration.
- Cost Structure: Assess the impact of the fourth-quarter reduction in force on future operating margins and personnel costs.
- Legal Exposure: Review updates on the Rubicon litigation and the SEI Capital Accumulation Plan class action for potential financial impact.