SEI EPS Jumps 70 Percent in Q2

Key Points

• - EPS (GAAP) reached $1.78 for Q2 2025, far surpassing the $1.19 GAAP analyst estimate driven by a $94.4 million GAAP gain from divesting Family Office Services.

• - Revenue (GAAP) grew 8% year over year to $559.6 million in Q2 2025 but came in below the $565.6 million GAAP estimate.

• - Operating margin rose to 27% for Q2 2025 as core segments showed healthy profit increases in Q1, though margin dipped compared to the previous quarter due to higher investments.

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SEI Investments (NASDAQ:SEIC), a global financial services and technology provider known for its asset management platforms and outsourced operations services, released second-quarter 2025 results on July 23, 2025. The most notable news from the release was a sharp spike in GAAP earnings per share (EPS) to $1.78 for Q2 2025, well ahead of the $1.19 GAAP analyst estimate, primarily due to a sizable one-time gain from the sale of the Family Office Services unit. Revenue, on the other hand, rose 8% year over year to $559.6 million in the second quarter of 2025 but missed consensus by $6.0 million (GAAP). Margins were pressured by rising investments and costs. The quarter showcased progress in SEI’s transformation efforts.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

About SEI Investments and Its Business Model

SEI Investments is a financial technology and investment management company. It provides outsourcing solutions, fund administration, investment processing, and asset management to banks, investment advisors, managers, and institutional investors worldwide. The business is structured into segments that focus on technology and operations outsourcing, which account for more than half of total revenue, and asset management services that contribute another 40% of total revenue.

Recent strategic efforts have centered on expanding SEI’s proprietary technology platforms, such as the SEI Wealth Platform, and deepening services in asset management. Success for SEI depends on its ability to deliver scalable technology, maintain service quality for a diverse client base, and remain competitive against large firms like SS&C Technologies, State Street, and BNY Mellon. The company’s other major priorities include keeping up with regulatory requirements and continuing to innovate through technology and integrated service offerings.

Quarter Highlights: Segment Trends and Key Developments

In the Investment Managers segment, revenue rose 8% year over year, with operating profit up 7% and the segment margin steady at 38%. Management credited a double-digit jump in revenue from alternative managers, which offset a slight slump in traditional investment manager income amid softer market performance.

The Private Banks segment saw revenue grow 7% year over year and operating profit climbed 11% year over year, with margin expanding to 16%. Several new clients went live during the quarter, bolstering revenue and highlighting the momentum SEI has been able to achieve in the regional and community bank market. In Investment Advisors, revenue jumped 14%, leading all core segments. The integrated cash program helped add $21 million in revenue, up $11 million from Q2 2024, and the segment’s operating profit rose 19% as margin increased to 45%.

Institutional Investors were the only segment to show a dip in revenue, slipping 3% year-over-year, but an improvement in expense control meant operating profit still edged up 1% and margins improved to 48%. The Investments in New Businesses category, where SEI incubates technology and services such as new cybersecurity and data offerings, expanded revenues by 13%, and operating losses were cut in half to $1.9 million.

Q2 2025 EPS included a $94.4 million pre-tax gain from the sale of SEI’s Family Office Services unit, along with other items affecting comparability. These items added $0.58 to EPS. On the shareholder returns front, SEI continued its robust pace of share buybacks, repurchasing 2.2 million shares for $180.8 million at an average price of $83.60 per share during the quarter. The company maintained its quarterly dividend at $0.49 per share, up from $0.46 for the same period last year.

Looking Ahead: Guidance, Risks, and Investor Focus

SEI management did not provide formal revenue or earnings guidance for the second half of fiscal 2025. In its comments, leadership emphasized strong sales pipelines, ongoing investments to scale growth, and a focus on maintaining client engagement and technological edge. However, operating margin was down from the previous quarter as rising expenses from technology, talent, and legal costs weighed on profitability.

Investors may want to track SEI's ongoing margin trends, the pace of organic revenue growth apart from one-off gains, and how the company integrates new acquisitions and divestitures over coming periods. The quarterly dividend was raised to $0.49 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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