SEI Investments Q1 Earnings Call Highlights

• Adjusted EPS $1.44, up more than 20% year-over-year, with adjusted operating profit rising about 24% YoY and sequential margin expansion, marking management’s characterization of the quarter as “defining.”

• Record sales momentum with $67 million of net sales events in the quarter (IMS contributed >$50 million), including two large alternative-manager wins (one in the top 5 and one in the top 15 globally) that management expects to “land and expand.”

• Active capital allocation and tech focus: SEI repurchased about $208 million of stock in Q1, ended the quarter with $363 million of cash, and is investing in AI (including an IBM partnership) to drive automation, margin expansion and new service capabilities.

• Interested in SEI Investments Company? Here are five stocks we like better.

SEI Investments (NASDAQ:SEIC) reported what executives repeatedly described as a “defining” first quarter of 2026, highlighting sharp year-over-year earnings growth, record sales activity, and continued margin expansion tied to strategic initiatives across the company.

Chief Executive Officer Ryan Hicke said the quarter was “emphatic evidence that the strategic and operating changes we have made set a new standard for what SEI is capable of delivering on a sustained basis.” Adjusted EPS totaled $1.44, which Hicke said was “more than a 20% increase from last year,” driven by top-line growth and margin expansion.

→ Credo Stock Flashes Strong Bullish Signal—Upswing Just Starting

Hicke said SEI generated $67 million of net sales events in the quarter, including $57 million of recurring revenue and $10 million of professional services. He characterized the result as exceeding SEI’s prior quarterly record “by more than 40%.”

Chief Financial and Chief Operating Officer Sean Denham said sales activity was “exceptional,” with Investment Manager Services (IMS) producing “more than $50 million of net sales events,” driven by large enterprise mandates. Denham added that “portions of these wins accounted for just over half of total IMS sales events” and said the company expects those relationships to continue contributing to sales activity in future quarters and years.

→ Allbirds Exits Shoes, Pivots to AI With NewBird Rebrand

Phil McCabe, EVP and Global Head of the Investment Managers Business, provided additional detail, saying SEI “won two of the largest and most complex alternative managers in the entire industry” after “an extremely competitive bake-off that lasted over a period of a full year.” McCabe said both were moving from insourcing to outsourcing, with one in the “top five globally” and the other in the “top 15 globally” alternative managers. He said the two deals were “in addition to what we would normally sell on a quarterly basis,” and added that SEI expects to “land and expand” the relationships over the next several years.

On concentration, McCabe later said the two deals represented “less than 50%” of IMS sales events for the quarter.

→ Amazon Stock Up 30%: Is AMZN Still a Buy Before Earnings?

McCabe also said SEI is “probably talking to 20 of the top 50 alternative managers right now,” and he expects sales events to “continue to trend up year-over-year,” while acknowledging deal timing can make quarterly results “lumpier than others,” as Hicke also noted.

Denham said GAAP EPS increased 20% and operating profit rose 21% versus the prior-year quarter. On an adjusted basis, EPS increased 21% year-over-year. He said the sequential decline in adjusted EPS versus Q4 was expected and reflected a higher effective tax rate and lower investment income and performance fees from LSV, which he described as seasonal. Denham said tax rate, LSV and other below-the-line items combined to create a $0.15 headwind to EPS relative to Q4, while adjusted operating income “increased by 6% from the fourth quarter.”

He added that the quarter marked SEI’s “first period reporting adjusted financial metrics,” which he said better aligns disclosure with market practice and provides a better basis for comparison.

Denham said SEI’s adjusted operating profit increased 6% sequentially and 24% year-over-year, describing performance as “strong across the enterprise.” He singled out Private Banking for a notable improvement in revenue and operating margins, which he attributed to deeper client engagement and a broader role in implementations that reduces the lag between contract wins and revenue recognition.

Asked whether workforce reductions contributed to Private Banking margin improvement, Hicke said the reduction “had little to no impact… specifically in banking.” Sanjay Sharma, EVP, CEO of SEI International and Global Head of Private Banking, attributed margin improvement to execution on the strategy discussed at Investor Day, including professional services wins with faster revenue realization, more “judicious” contract pricing with higher margins, the use of the company’s “GCC initiative,” and tighter software-as-a-service spending discipline.

Denham also discussed margin dynamics in other segments:

• IMS: A modest sequential margin decline versus Q4 was expected, driven primarily by the absence of a revenue accrual true-up that accounted for about 150 basis points, along with onboarding costs tied to the quarter’s sales wins.

• Advisors: Margins declined due to inclusion of Stratos, which was weighed down by acquired intangible amortization. Denham said that absent Stratos, Advisors margins increased about 50 basis points versus the year-ago quarter.

On overall margin outlook, Denham said improvement was primarily driven by revenue growth and expense management, noting that fixed costs are “pretty well fixed” and that “as we have larger improvement in revenue and sales and revenue growth, we expect margins to improve.”

Denham said Q1 was the first full quarter of the Stratos partnership, and the consolidation makes comparisons to prior periods difficult. With SEI’s 57.5% ownership, Stratos is fully consolidated. Denham said Stratos contributed nearly $20 million in revenue and $3 million in operating profit to the Advisors segment in Q1 before non-controlling interest, and generated $8 million of EBITDA at the consolidated level excluding depreciation and amortization, primarily acquired intangible amortization.

When asked about rising RIA transaction multiples and potential headwinds to Stratos’ roll-up strategy, Michael Lane, EVP and Head of Asset Management, said he is seeing higher multiples “on the high end,” citing a report indicating typical multiples of 22 to 24 for scaled firms. However, Lane said SEI acquired Stratos at a “much less multiple” and still sees “a very reasonable multiple arbitrage opportunity” in the $100 million to $1 billion RIA range. He said the company is “not seeing any slowdown at all right now.”

Denham said SEI saw “continued asset momentum” in the quarter. In Asset Management, growth was led by the Advisors business, which he said is benefiting from accelerated product launches in ETFs, SMAs, models, and alternatives. Denham said these initiatives helped drive approximately $1.5 billion of net inflows. Institutional investors experienced less than $1 billion of net outflows, which Denham said was “almost entirely attributable to a large defined benefit client annuitization” after achieving funding objectives.

Lane described the institutional outflow as the result of helping a defined benefit client de-risk after reaching goals. Looking forward, he said SEI is focused on areas that benefit from demographic shifts supporting OCIO growth, including endowments, foundations, and healthcare, and he said the company expects the institutional pipeline to rise in those areas.

Denham also said LSV had a strong start to the year, with key global and U.S. large-cap products outperforming benchmarks by “single-digit percentages” in Q1, despite approximately $2 billion of net outflows. Assets under administration and on platform increased 4%, which Denham attributed to strong new business wins and lower mark-to-market sensitivity.

Separately, Denham said SEI recontracted eight Private Banking clients, renewing an average contract term of about four years and retaining $34 million of recurring revenue, with no material impact to run-rate profitability.

Hicke emphasized capital returns and said SEI repurchased “over $200 million” of stock in Q1. Denham quantified repurchases at $208 million, adding that the company ended the quarter with $363 million of cash and “substantial financial flexibility,” and said SEI intends to “remain active buyers.”

Executives also repeatedly addressed AI. Hicke said SEI views AI as “a force multiplier of time” and an accelerant for margin expansion and growth, pointing to investments in “AI-native capabilities, automation, and AI-enabled expansions.” He also cited a recently announced partnership with IBM as supporting infrastructure modernization, automation, and responsible AI deployment.

In response to questions about potential AI-driven fee compression or disruption—particularly in fund administration—Hicke said SEI has seen “a tremendous amount of stability” in fee rates and has continued to win business “at premium prices.” McCabe said IMS is “not seeing a lot of fee pressure at all,” and said clients expect faster NAVs and “better, faster, and perfect” delivery. Sneha Shah, EVP and Head of SEI Next, said the company is using AI to do more with existing resources, improve cost efficiency in growth, and expand adjacent services, pointing to interest in AI-enabled data capabilities, security services, and helping banking clients become “more AI native.”

Lane also addressed concerns about AI disintermediating financial advisors, comparing it to prior robo-advisor expectations and arguing AI will “supplement and make advisors more efficient,” especially amid what he described as rising demand for advice and a declining number of advisors.

On integrated cash programs, Lane said SEI’s program is structured as “a 1% operational cash” allocation rather than a portfolio percentage, and said cash revenue represents about 3% of SEI’s gross revenue and about 12% of revenue in the advisor business. Lane said SEI has not seen an impact from broader market discussion around cash optimization programs.

Closing the call, Hicke said management is “encouraged by the execution and progress we’ve seen early in the year.”

SEI Investments Company is a global provider of asset management, investment processing, and investment operations solutions. The firm offers a range of services designed to help financial institutions, private banks, wealth managers and family offices streamline back-office functions and enhance front-office capabilities. SEI’s technology platforms support various stages of the investment lifecycle, including trade execution, performance reporting, risk analytics and client communications.

The company’s core offerings include outsourced fund administration, custody and trust services, managed account solutions, and wealth management technology.

The article “SEI Investments Q1 Earnings Call Highlights” was originally published by MarketBeat.