What SEI Investments (SEIC) Said on Its Q3 Earnings Call

Key Points

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• SEI delivered strong third-quarter growth: Revenue rose 14% year over year, adjusted operating profit increased 25%, and adjusted EPS climbed 24%. Net sales events reached $47 million for the quarter and $157 million year to date, already exceeding the company’s prior annual record.

• Investment Managers led sales momentum, generating $32 million in sales events, with alternative asset managers accounting for nearly 90%. SEI expects its new transfer agency and fund administration offerings to exceed $10 million in annualized revenue by the end of next year.

• Capital deployment remained active: SEI repurchased $215 million of shares during the quarter and expects a similar level of buybacks in the fourth quarter, supported by an additional $800 million authorization. Results were partly offset by higher incentive compensation and a $32.5 million expense tied to the terminated Stratos acquisition of NSC’s Mexican investment adviser.

SEI Investments (NASDAQ:SEIC) reported third-quarter 2026 revenue growth of 14% from a year earlier, while adjusted operating profit rose 25% and adjusted earnings per share increased 24%, as demand remained strong across its investment managers, private banking and advisor businesses.

Chief Executive Officer Ryan Hicke said the quarter reflected the company’s strategy of expanding client relationships beyond technology platforms into broader enterprise transformation, professional services, data and artificial intelligence initiatives. He said third-quarter adjusted EPS was nearly 50% above its level two years earlier.

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Net sales events totaled $47 million during the quarter, bringing the year-to-date total to $157 million. Hicke said that figure has already surpassed SEI’s previous record for annual sales events with one quarter remaining in the year.

Investment managers lead sales activity

SEI’s Investment Managers Services, or IMS, business generated $32 million in net sales events, representing the largest contribution among the company’s segments. About one-third came from new clients and the remainder came from expansions with existing clients, according to Chief Financial and Chief Operating Officer Sean Denham.

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Alternative asset managers accounted for nearly 90% of IMS sales events during the period. Phil McCabe, executive vice president and head of SEI’s Investment Managers business, said the company is seeing particular traction with first-time outsourcing clients, secondary-market strategies, collective investment trusts containing alternative investments, interval funds and private-credit managers.

McCabe said SEI has signed 14 managers that intend to offer alternative products in collective investment trusts. He also said the company’s newer transfer agency capabilities have enabled it to compete for interval-fund business that it had previously been unable to pursue.

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SEI launched its retail transfer agency offering with its first client in July and has additional conversions scheduled in coming months, management said. Denham said the company expects combined transfer agency and fund administration revenue from the initiative to exceed $10 million on a run-rate basis by the end of next year. McCabe later said he believes that estimate could prove conservative.

IMS revenue and operating profit each increased 14% from the prior-year period. Excluding the impact of a higher incentive compensation accrual, operating profit would have risen 17%, Denham said.

Private banking and advisors post growth

Private banking revenue increased 11% year over year and operating profit rose 38%. Denham attributed the performance to contributions from professional services, platform expansion and international asset management.

Private banking produced $13 million in sales events during the quarter, supported by demand for enterprise transformation programs, professional services, SEI Data Cloud capabilities and broader strategic client engagements. Nearly $3 million of those events came from asset management sales to U.K. intermediaries.

Sanjay Sharma, SEI International CEO and global head of private banking, said the company is increasingly seeking to provide banks with ongoing services beyond a platform conversion. He said clients are confronting technology, regulatory, compliance and AI-related changes that can create recurring opportunities for professional services, data and asset-management offerings.

The Advisors segment benefited from the acquisition of Stratos, which contributed $23 million of revenue and $4 million of operating profit in the quarter, including $7 million of amortization. Stratos generated $11.5 million of EBITDA, up 17% from the second quarter, and completed a tuck-in acquisition while onboarding several advisors, Denham said.

Excluding Stratos, Advisors revenue rose 10% and operating profit increased 7% from a year earlier. Higher market values and onboarding of previously won clients supported results. The company also said it sees succession and continuity opportunities among long-tenured Stratos and SEI advisors.

Institutional revenue declined 2% year over year, though it grew 1% from the second quarter. Michael Lane, executive vice president and head of asset management, said SEI is concentrating its institutional growth efforts on endowments, foundations and healthcare organizations.

Margins affected by incentive compensation

Adjusted operating margins expanded 260 basis points from the prior year but declined 80 basis points sequentially. Denham said the company increased its incentive compensation accrual by $6 million because of its year-to-date performance and outlook, reducing third-quarter operating profit by $6 million and adjusted margin by about 100 basis points.

The increased accrual was described as a one-time third-quarter adjustment, although Denham said another roughly $1.5 million, representing 25% of the adjustment, would affect the fourth quarter. Excluding the third-quarter adjustment, operating profit would have risen approximately 4% sequentially and adjusted operating margin would have increased about 20 basis points.

GAAP net income also was reduced by $32.5 million in other expenses related to SEI’s mutual agreement with Stratos to terminate the planned acquisition of NSC, Stratos’ Mexican registered investment advisor business.

Asset management initiatives and capital deployment

SEI ended the quarter with assets under management essentially flat from the second quarter, as limited market movement and slightly positive Advisor inflows largely offset modest Institutional outflows. Exchange-traded fund assets exceeded $9 billion, up from approximately $4 billion a year earlier.

Hicke said SEI is expanding its ETF lineup for distribution both on and off its platform, including active, fixed-income, equity and fund-of-fund strategies. He said management hopes the ETF business can double again next year, though he did not provide a formal forecast.

Assets under administration increased 4% sequentially, supported by funded IMS mandates and clients’ capital deployment. Assets managed by LSV declined 1%, as investment outperformance was offset by $5 billion in net outflows. Denham said the company expects that outflow figure to improve in the next quarter.

SEI ended the period with $400 million in cash after repurchasing $215 million of shares at an average price of $105. The company expects fourth-quarter repurchases to be similar to the third-quarter level and said its additional $800 million repurchase authorization provides capacity to remain active into 2027.

About SEI Investments (NASDAQ:SEIC)

SEI Investments Company is a financial technology and investment services provider headquartered in Oaks, Pennsylvania. Founded in 1968, the company delivers technology, operations, and investment solutions that help financial institutions and investment professionals manage client assets and business processes.

SEI’s offerings include wealth management and investment processing platforms, portfolio accounting, data management, compliance support, and outsourced middle- and back-office services.

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