SEI Investments Company - Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. SEI Investments Company is a global provider of financial technology, operations, and asset management services. As of the reporting date, the company manages, advises, or administers approximately $1.9 trillion in assets. The company operates through five reportable segments: Investment Managers, Private Banks, Investment Advisors, Institutional Investors, and Investments in New Businesses.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Total Revenues | $622.2 million | $551.3 million | +13% |
| Income from Operations | $189.5 million | $157.1 million | +21% |
| Net Income (GAAP) | $176.8 million | $151.5 million | +17% |
| Net Income Attributable to SEI | $174.5 million | $151.5 million | +15% |
| Diluted EPS | $1.40 | $1.17 | +20% |
| Operating Cash Flow | $221.6 million | $146.5 million | +51% |
| Cash and Equivalents | $363.1 million | $399.8 million | -9% |
| Long-term Debt | $32.4 million | $0 | N/A |
Note: Long-term debt of $32.4 million reflects promissory notes issued in connection with the Stratos acquisition.
Material Changes vs. Prior Period
- Revenue Growth: Driven by a 15% increase in Investment Managers revenue (due to higher assets under administration) and a 24% increase in Investment Advisors revenue (driven by the Stratos acquisition and growth in separately managed accounts).
- Stratos Acquisition Impact: The company completed the first stage of the Stratos Wealth Holdings acquisition in December 2025. In Q1 2026, Stratos contributed $19.0 million in revenue and $3.1 million in operating profit. Additionally, the company acquired 11 equity method entities (EMI Entities) related to Stratos during the quarter.
- Amortization: Total amortization expense increased 71% to $18.4 million, primarily due to intangible assets acquired through the Stratos transaction ($9.2 million) and capitalized software development ($9.1 million).
- Equity in Earnings: Earnings from LSV Asset Management (an unconsolidated affiliate) increased 13% to $32.5 million, driven by market appreciation of assets under management.
- Stock Repurchases: The company repurchased 2.55 million shares for $208.3 million during the quarter.
Guidance, Outlook, and Risks
Management Commentary: Management highlighted strong growth in assets under administration ($1.3 trillion, up 27% YoY) and successful integration of the Stratos platform. The effective tax rate increased to 23.4% (from 22.8% in Q1 2025) primarily due to non-deductible executive compensation under Section 162(m).
Liquidity: The company maintains a $500 million credit facility expiring in August 2030, with $495.4 million available as of April 10, 2026. Free and immediately accessible cash for general corporate purposes was $119.1 million.
Risks and Contingencies:
- Legal Proceedings: The company is defending against the "Rubicon Actions" (potential exposure estimated at $15 million), the "Qu Litigation" regarding LSV Asset Management (loss not estimable), and an ERISA class action regarding the SEI Capital Accumulation Plan (loss not estimable).
- Regulatory Matters: SEI Investments (Europe) Limited (SIEL) is undergoing a "Skilled Person" review by the UK Financial Conduct Authority (FCA) regarding governance and control environments.
- Equilus Capital: A Washington state lawsuit involving a Ponzi scheme-like activity by a client (Equilus) has resulted in a temporary restraining order freezing accounts; no claims have been made against SEI.
Investor Verification Checklist
- Stratos Integration: Verify the finalization of the purchase price allocation for the Stratos acquisition and the EMI Entities, currently expected in Q4 2026.
- Amortization Impact: Assess the sustainability of operating margins given the significant increase in amortization expenses related to recent acquisitions.
- Legal Exposure: Monitor the status of the Rubicon, Qu, and Hall litigation to determine if the current "not estimable" or capped loss assessments change.
- Regulatory Remediation: Track the progress of SIEL's remediation actions with the UK FCA to ensure no material restrictions on business operations.
- LSV Partnership: Confirm the impact of the April 1, 2026, dilution of SEI's ownership interest in LSV Asset Management (reduced from 38.5% to 38.4%) on future equity earnings.