SEI Investments’ third quarter results saw steady growth, with management highlighting strong contributions from its investment managers segment and a record sales quarter in alternatives. CEO Ryan Hicke described the broad-based sales momentum, particularly within alternatives and client expansions, as a testament to SEI’s competitive position and sector strength. While a contract loss in private banking tempered net sales, Hicke and Sanjay Sharma, Head of Private Banking, repeatedly characterized this as a one-off event tied to a client’s strategic shift rather than a broader trend. Management also pointed to ongoing investments in technology and talent as critical for sustaining business momentum.
Is now the time to buy SEIC? Find out in our full research report (it’s free for active Edge members).
SEI Investments (SEIC) Q3 CY2025 Highlights:
- Revenue: $578.5 million vs analyst estimates of $581.7 million (7.7% year-on-year growth, 0.5% miss)
- Adjusted EPS: $1.30 vs analyst estimates of $1.25 (4.3% beat)
- Adjusted EBITDA: $179.4 million vs analyst estimates of $182.3 million (31% margin, 1.6% miss)
- Operating Margin: 27.7%, in line with the same quarter last year
- Market Capitalization: $10.08 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From SEI Investments’s Q3 Earnings Call
- Crispin Love (Piper Sandler) asked about the composition of alternative asset sales and whether recent growth was driven by large or small managers. CEO Ryan Hicke and Phil McCabe, Head of IMS, explained that the wins were broad-based, with no single client accounting for more than 10% and a mix of private credit, insourcers, and retail clients.
- Crispin Love (Piper Sandler) also sought details on the private banking contract loss. Sanjay Sharma, Head of Private Banking, clarified that it was a one-off event due to a client’s shift away from the bank trust model, not a competitive loss or sign of a trend.
- Jeff Schmidt (William Blair) inquired about the integrated cash program’s rate structure and future allocation between fixed and variable rates. Paul Klauder, Head of Asset Management, detailed SEI’s current approach and how declining rates would impact both SEI and investors.
- Alex Bond (KBW) asked about IMS margin sustainability and the impact of ongoing investment. CFO Sean Denham indicated that while Q3 margins were strong, future margins could be flat or slightly lower due to pre-emptive investments in talent and technology.
- Ryan Kenny (Morgan Stanley) questioned the outlook for share buybacks given the Stratos acquisition. Denham reiterated that SEI aims to return 90–100% of free cash flow to shareholders, with timing dependent on capital needs for the Stratos deal.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the conversion of alternative asset pipeline opportunities into signed contracts, (2) progress on the Stratos partnership and its impact on advisor channel activity, and (3) the effect of ongoing technology and talent investments on segment and enterprise margins. We will also be attentive to updates on SEI’s international expansion and adoption of AI and tokenization workflows.
SEI Investments currently trades at $81.01, in line with $81.44 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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