EX-99.1 2 seic-earningsreleaseex9917.htm PRESS RELEASE Document
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Investor Contact:                         Media Contact:
Alex Whitelam                            Leslie Wojcik
SEI                                SEI
+1 610-676-4924                        +1 610-676-4191
awhitelam@seic.com                        lwojcik@seic.com
Pages:        9

FOR IMMEDIATE RELEASE

SEI Reports Second-Quarter 2023 Financial Results

OAKS, Pa., July 26, 2023 – SEI Investments Company (NASDAQ:SEIC) today announced financial results for the second-quarter 2023. Diluted earnings per share were $0.89 in second-quarter 2023 compared to $0.81 in second-quarter 2022.
Consolidated Overview
(In thousands, except earnings per share)For the Three Months Ended June 30,For the Six Months Ended June 30,
20232022%20232022%
Revenues$489,057 $481,670 2%$958,176 $1,063,113 (10)%
Net income 118,851 111,276 7%225,866 301,584 (25)%
Diluted earnings per share$0.89 $0.81 10%$1.68 $2.17 (23)%

“Our second-quarter financial results reflect solid sales and revenue growth and increasing profitability. In particular, our technology and investment processing businesses delivered strong performance in the quarter, contributing to both top- and bottom-line growth,” said CEO Ryan Hicke.
“Over the past year, we have evolved our leadership team, invested in talent, increased our market presence, and aligned our resources to drive an enterprise-wide approach to our markets. We are engaged with our clients, building new relationships across our markets, and expanding our reach globally, and we will continue making prudent, strategic investments to drive long-term, sustainable growth for our stakeholders.”

1


Summary of Second-Quarter Results by Business Segment

(In thousands)For the Three Months Ended June 30,For the Six Months Ended June 30,
20232022%20232022%
Private Banks:
Revenues$134,099 $124,184 8%$256,702 $337,732 (24)%
Expenses116,061 121,060 (4)%230,337 243,015 (5)%
Operating Profit18,038 3,124 NM26,365 94,717 (72)%
Operating Margin13 %3 %10 %28 %
Investment Advisors:
Revenues109,580 113,194 (3)%216,118 232,424 (7)%
Expenses64,178 63,375 1%127,724 127,895 —%
Operating Profit45,402 49,819 (9)%88,394 104,529 (15)%
Operating Margin41 %44 %41 %45 %
Institutional Investors:
Revenues75,145 83,483 (10)%149,435 170,322 (12)%
Expenses45,516 43,925 4%86,384 89,283 (3)%
Operating Profit29,629 39,558 (25)%63,051 81,039 (22)%
Operating Margin39 %47 %42 %48 %
Investment Managers:
Revenues165,339 155,926 6%326,025 312,827 4%
Expenses107,761 100,807 7%213,627 199,644 7%
Operating Profit57,578 55,119 4%112,398 113,183 (1)%
Operating Margin35 %35 %34 %36 %
Investments in New Businesses:
Revenues4,894 4,883 —%9,896 9,808 1%
Expenses10,571 12,844 (18)%22,215 24,794 (10)%
Operating Loss(5,677)(7,961)NM(12,319)(14,986)NM
Totals:
Revenues$489,057 $481,670 2%$958,176 $1,063,113 (10)%
Expenses344,087 342,011 1%680,287 684,631 (1)%
Corporate Overhead Expenses32,369 23,799 36%63,521 47,823 33%
Income from Operations$112,601 $115,860 (3)%$214,368 $330,659 (35)%
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Second-Quarter Business Highlights:
•Revenues from Information processing and software servicing fees in the second-quarter 2023 include a one-time early contractual buyout fee of $10.5 million relating to an investment processing client of the Private Banks segment that was acquired by an existing client. The Company will continue its relationship and provide investment processing services to both entities.
•Revenues from Assets under management, administration, and distribution fees decreased primarily from lower assets under management in equity and fixed income programs from market depreciation during 2022 and negative cash flows from SEI fund programs due to client losses in the Investment Advisors and Institutional Investors segments. The improvement in market conditions and positive cash flows into separately managed account programs and Strategist programs during 2023 partially offset the decline in revenues.
•Average assets under management in equity and fixed income programs, excluding LSV, decreased $8.1 billion, or 5%, to $169.0 billion in the second-quarter 2023, as compared to $177.1 billion during the second-quarter 2022 (see attached Average Asset Balances schedule for further details).
•Revenue from Asset management, administration, and distribution fees of the Investment Managers segment increased from new business and increases from existing alternative investment clients due to new products and additional services. The decrease in average assets under administration reflect a loss of a significant client in 2022 which was not charged asset-based fees.
•Net sales events in the Private Banks and Investment Managers segments during second-quarter 2023 were $31.1 million and are expected to generate net annualized recurring revenues of approximately $25.4 million when contract values are completely realized.
•Net sales events in asset management-related businesses of the Investment Advisors and Institutional Investors segments and the Asset Management Distribution (AMD) business in the Private Banks segment during second-quarter 2023 were negative $1.9 million.
•Operational expenses increased due to higher personnel costs from business growth, competitive labor markets, and the impact of inflation on wages and services. Operational expenses also increased due to personnel costs and investments in compliance infrastructure to meet new regulatory requirements. The increase was substantially offset by lower direct costs related to asset management revenues and lower amortization expense.
•Expenses in the Institutional Investors segment include the impact of a one-time operational charge of $4.5 million related to a client reimbursement.
•Corporate overhead expenses include a $2.5 million item related to a consulting engagement which ended during the second-quarter 2023.
•Earnings from LSV increased to $32.7 million in the second-quarter 2023 as compared to $29.8 million in the second-quarter 2022 due to increased performance fees and market appreciation. Net negative cash flows from existing clients, and client losses partially offset the increase in earnings from LSV.
•We capitalized $9.0 million of software development costs in second-quarter 2023, of which $4.7 million was for continued enhancements to the SEI Wealth PlatformSM. We also capitalized $4.3 million of software development costs in second-quarter 2023 for a new platform for the Investment Managers segment.
•Amortization expense related to SWP was $6.4 million in second-quarter 2023 as compared to $11.8 million in second-quarter 2022. The decline in amortization expense was due to the amortization period of the initial development costs related to SWP which ended in second-quarter 2022.
•Effective tax rates were 23.4% in second-quarter 2023 and 23.1% in second-quarter 2022.
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•We repurchased 1.3 million shares of our common stock for $75.5 million during the second-quarter 2023 at an average price of $58.56 per share.
•Cash flow from operations was $68.2 million and free cash flow was $53.4 million during the second-quarter 2023.
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Earnings Conference Call
A conference call to review earnings is scheduled for 4:30 p.m. Eastern time on July 26, 2023. Investors may listen to the call at seic.com/ir-events. Investors may also listen to a replay by telephone at (USA) 866-207-1041; (International) 402-970-0847; Access Code: 1070091.

About SEI®
SEI (NASDAQ:SEIC) delivers technology and investment solutions that connect the financial services industry. With capabilities across investment processing, operations, and asset management, SEI works with corporations, financial institutions and professionals, and ultra-high-net-worth families to help drive growth, make confident decisions, and protect futures. As of June 30, 2023, SEI manages, advises, or administers approximately $1.3 trillion in assets. For more information, visit seic.com.

This release contains forward-looking statements within the meaning or the rules and regulations of the Securities and Exchange Commission. In some cases you can identify forward-looking statements by terminology, such as "may," "will," "expect," "believe" and "continue" or "appear." Our forward-looking statements include our current expectations as to:
•when and if we will generate net annualized recurring revenues from sales events that occurred during the quarter, as well as the amount of such revenue;
•the duration of our customer relationships; and
•whether we will make prudent, strategic investments to drive long-term, sustainable growth for our stakeholders.
We anticipate that we may deliver forward-looking statements during today’s earnings call that include our current expectations as to the matters in this release and set forth above as well as:
•the elements of our strategic focus, including, without limitation, our focus on:
◦managing expenses;
◦proactively engaging with current clients;
◦expanding our pipeline;
◦connecting resources across the enterprise to identify and execute against cross-selling opportunities;
◦growing our profits;
◦prudently deploying capital;
◦investing in talent and market experience;
◦alternative investments;
◦inorganic growth; and
◦delivering at a high level for clients;
•our sales momentum;
•the markets in which our clients are expanding;
•our success in converting clients from TRUST 3000® to the SEI Wealth PlatformSM;
•our ability to capitalize on our pipeline, prudently manage expenses, and drive growth to the bottom line;
•the degree to which our market units are positioned to accelerate growth;
•the value of our technology, investment processing and asset management capabilities to our clients;
•the amount, if any, of our current backlog of sold but expected to be installed revenue in the next 18 months that will actually be installed during such period, if ever;
•the amount, if any, of our current backlog that will convert by the end of the year, if ever;
•the appetite of existing clients for our products;
•the degree to which our newer investment offerings will benefit our business;
•the market dynamics affecting our market units;
•our ability to mitigate the headwinds of various markets;
•the strength of our partnership with our affiliates;
•our ability to identify and incubate businesses that we believe will build upon our foundation for future growth and contribute to our corporate revenue goals;
•the degree to which the expenses in our Investments in New Businesses segment will remain consistent going forward;
•the degree to which our tax rate may vary;
•our sales momentum;
•our ability to improve profitability without cannibalizing our medium to long-term growth agendas;
•the growth of our U.K., European, and Irish businesses;
•the organic and inorganic opportunities that will drive our growth; and
•the expected success and benefits of our strategic investments.
You should not place undue reliance on our forward-looking statements, as they are based on the current beliefs and expectations of our management and subject to significant risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe the assumptions upon which we base our forward-looking statements are reasonable, they could be inaccurate. Some of the risks and important factors that could cause actual results to differ from those described in our forward-looking statements can be found in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended Dec. 31, 2022, filed with the Securities and Exchange Commission.
# # #
5


SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended June 30,For the Six Months Ended June 30,
2023202220232022
Asset management, admin. and distribution fees$378,821 $382,594 $750,650 $776,691 
Information processing and software servicing fees110,236 99,076 207,526 286,422 
Total revenues489,057 481,670 958,176 1,063,113 
Subadvisory, distribution and other asset mgmt. costs47,247 50,023 94,626 103,151 
Software royalties and other information processing costs8,396 7,407 15,689 14,954 
Compensation, benefits and other personnel175,706 157,921 349,121 318,405 
Stock-based compensation7,405 10,007 15,479 20,573 
Consulting, outsourcing and professional fees61,312 63,271 122,416 125,762 
Data processing and computer related34,945 32,254 68,285 62,070 
Facilities, supplies and other costs23,034 20,133 41,826 37,760 
Amortization9,630 16,508 19,054 33,395 
Depreciation8,781 8,286 17,312 16,384 
Total expenses376,456 365,810 743,808 732,454 
Income from operations112,601 115,860 214,368 330,659 
Net gain (loss) on investments515 (2,620)1,259 (3,109)
Interest and dividend income9,550 1,853 18,328 2,701 
Interest expense(139)(211)(280)(461)
Equity in earnings of unconsolidated affiliate32,711 29,813 61,590 62,272 
Income before income taxes155,238 144,695 295,265 392,062 
Income taxes36,387 33,419 69,399 90,478 
Net income$118,851 $111,276 $225,866 $301,584 
Basic earnings per common share$0.89 $0.82 $1.69 $2.20 
Shares used to calculate basic earnings per share132,854 136,435 133,437 137,185 
Diluted earnings per common share$0.89 $0.81 $1.68 $2.17 
Shares used to calculate diluted earnings per share133,936 137,817 134,623 138,764 
Dividends declared per common share$0.43 $0.40 $0.43 $0.40 
6


SEI INVESTMENTS COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30,December 31,
20232022
Assets
Current Assets:
Cash and cash equivalents$777,051 $853,008 
Restricted cash300 351 
Receivables from investment products56,304 62,014 
Receivables, net of allowance for doubtful accounts of $936 and $901
521,600 457,084 
Securities owned31,040 32,148 
Other current assets55,610 48,703 
Total Current Assets1,441,905 1,453,308 
Property and Equipment, net of accumulated depreciation of $458,119 and $440,861
180,503 181,029 
Operating Lease Right-of-Use Assets22,293 24,992 
Capitalized Software, net of accumulated amortization of $599,557 and $586,744
242,525 237,302 
Available for Sale and Equity Securities116,791 128,201 
Investments in Affiliated Funds, at fair value6,772 6,366 
Investment in Unconsolidated Affiliate54,318 104,673 
Goodwill115,602 115,599 
Intangible Assets, net of accumulated amortization of $36,450 and $30,261
49,621 55,532 
Deferred Contract Costs38,561 37,928 
Deferred Income Taxes17,464 4,936 
Other Assets, net38,609 33,687 
Total Assets$2,324,964 $2,383,553 
Liabilities and Equity
Current Liabilities:
Accounts payable$7,220 $13,283 
Accrued liabilities237,164 359,363 
Current portion of long-term operating lease liabilities11,076 10,344 
Deferred revenue14,913 14,893 
Total Current Liabilities270,373 397,883 
Long-term Income Taxes Payable803 803 
Long-term Operating Lease Liabilities16,032 18,786 
Other Long-term Liabilities14,203 12,257 
Total Liabilities301,411 429,729 
Shareholders' Equity:
Common stock, $0.01 par value, 750,000 shares authorized; 132,230 and 134,162 shares issued and outstanding
1,322 1,342 
Capital in excess of par value1,337,538 1,307,162 
Retained earnings724,672 694,287 
Accumulated other comprehensive loss, net(39,979)(48,967)
Total Shareholders' Equity2,023,553 1,953,824 
Total Liabilities and Shareholders' Equity$2,324,964 $2,383,553 
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ENDING ASSET BALANCES
(In millions) (Unaudited)
Jun. 30,Sept. 30,Dec. 31,Mar. 31,Jun. 30,
20222022202220232023
Private Banks:
Equity and fixed-income programs$22,277 $20,131 $22,377 $23,653 $24,091 
Collective trust fund programs7 7 7 6 7 
Liquidity funds3,666 3,778 3,201 3,427 3,433 
Total assets under management$25,950 $23,916 $25,585 $27,086 $27,531 
Client assets under administration3,923 4,161 4,151 4,299 4,154 
Total assets$29,873 $28,077 $29,736 $31,385 $31,685 
Investment Advisors:
Equity and fixed-income programs$65,783 $62,579 $66,240 $68,065 $69,439 
Liquidity funds8,292 5,200 5,436 4,965 4,968 
Total Platform assets under management$74,075 $67,779 $71,676 $73,030 $74,407 
Platform-only assets12,642 12,609 13,931 14,980 16,103 
Total Platform assets$86,717 $80,388 $85,607 $88,010 $90,510 
Institutional Investors:
Equity and fixed-income programs$75,506 $69,621 $73,178 $74,939 $75,854 
Collective trust fund programs5 6 5 4 4 
Liquidity funds1,654 1,640 1,557 1,576 1,353 
Total assets under management$77,165 $71,267 $74,740 $76,519 $77,211 
Client assets under advisement4,218 4,204 4,314 4,559 4,368 
Total assets$81,383 $75,471 $79,054 $81,078 $81,579 
Investment Managers:
Collective trust fund programs (A)$142,035 $137,538 $141,285 $146,176 $149,779 
Liquidity funds271 248 199 203 249 
Total assets under management$142,306 $137,786 $141,484 $146,379 $150,028 
Client assets under administration885,096 781,246 810,491 845,828 873,570 
Total assets$1,027,402 $919,032 $951,975 $992,207 $1,023,598 
Investments in New Businesses:
Equity and fixed-income programs$1,903 $1,813 $1,912 $2,031 $2,104 
Liquidity funds242 221 215 217 217 
Total assets under management$2,145 $2,034 $2,127 $2,248 $2,321 
Client assets under administration1,076 1,026 1,077 1,081 1,098 
Total assets$3,221 $3,060 $3,204 $3,329 $3,419 
LSV Asset Management:
Equity and fixed-income programs (B)$81,940 $75,380 $83,753 $84,964 $86,469 
Total:
Equity and fixed-income programs (C)$247,409 $229,524 $247,460 $253,652 $257,957 
Collective trust fund programs142,047 137,551 141,297 146,186 149,790 
Liquidity funds14,125 11,087 10,608 10,388 10,220 
Total assets under management$403,581 $378,162 $399,365 $410,226 $417,967 
Client assets under advisement5,294 5,230 5,391 5,640 5,466 
Client assets under administration (D)889,019 785,407 814,642 850,127 877,724 
Platform-only assets12,642 12,609 13,931 14,980 16,103 
Total assets$1,310,536 $1,181,408 $1,233,329 $1,280,973 $1,317,260 
(A)Collective trust fund program assets in the Investment Managers segment are included in assets under management since SEI is the trustee. Fees earned on this product are less than fees earned on customized asset management programs.
(B)Equity and fixed-income programs include $2.0 billion of assets managed by LSV in which fees are based solely on performance and are not calculated as an asset-based fee (as of June 30, 2023).
(C)Equity and fixed-income programs include $6.2 billion of assets invested in various asset allocation funds (as of June 30, 2023).
(D)    In addition to the assets presented, SEI also administers an additional $11.7 billion in Funds of Funds assets on which SEI does not earn an administration fee (as of June 30, 2023).
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AVERAGE ASSET BALANCES
(In millions) (Unaudited)
2nd Qtr.3rd Qtr.4th Qtr.1st Qtr.2nd Qtr.
20222022202220232023
Private Banks:
Equity and fixed-income programs$23,713 $22,115 $21,839 $23,576 $23,748 
Collective trust fund programs7 7 7 7 7 
Liquidity funds3,795 3,742 3,395 3,253 3,500 
Total assets under management$27,515 $25,864 $25,241 $26,836 $27,255 
Client assets under administration4,163 4,026 4,126 4,316 4,282 
Total assets$31,678 $29,890 $29,367 $31,152 $31,537 
Investment Advisors:
Equity and fixed-income programs$70,436 $67,464 $66,100 $67,578 $68,371 
Liquidity funds7,070 5,380 5,127 4,995 4,808 
Total Platform assets under management$77,506 $72,844 $71,227 $72,573 $73,179 
Platform-only assets13,142 13,271 13,905 14,812 15,548 
Total Platform assets$90,648 $86,115 $85,132 $87,385 $88,727 
Institutional Investors:
Equity and fixed-income programs$80,971 $74,859 $72,581 $74,653 $74,865 
Collective trust fund programs5 6 5 5 4 
Liquidity funds2,097 1,717 1,719 1,715 1,537 
Total assets under management$83,073 $76,582 $74,305 $76,373 $76,406 
Client assets under advisement3,987 4,194 4,251 4,431 4,583 
Total assets$87,060 $80,776 $78,556 $80,804 $80,989 
Investment Managers:
Collective trust fund programs (A)$131,435 $143,817 $140,494 $144,914 $147,543 
Liquidity funds285 250 275 317 286 
Total assets under management$131,720 $144,067 $140,769 $145,231 $147,829 
Client assets under administration893,361 782,559 785,813 836,410 859,296 
Total assets$1,025,081 $926,626 $926,582 $981,641 $1,007,125 
Investments in New Businesses:
Equity and fixed-income programs$2,016 $1,939 $1,890 $1,991 $2,057 
Liquidity funds262 231 208 212 199 
Total assets under management$2,278 $2,170 $2,098 $2,203 $2,256 
Client assets under advisement1,165 1,126 1,075 1,098 1,075 
Total assets$3,443 $3,296 $3,173 $3,301 $3,331 
LSV Asset Management:
Equity and fixed-income programs (B)$87,818 $81,241 $83,370 $86,987 $84,492 
Total:
Equity and fixed-income programs (C)$264,954 $247,618 $245,780 $254,785 $253,533 
Collective trust fund programs131,447 143,830 140,506 144,926 147,554 
Liquidity funds13,509 11,320 10,724 10,492 10,330 
Total assets under management$409,910 $402,768 $397,010 $410,203 $411,417 
Client assets under advisement5,152 5,320 5,326 5,529 5,658 
Client assets under administration (D)897,524 786,585 789,939 840,726 863,578 
Platform-only assets13,142 13,271 13,905 14,812 15,548 
Total assets$1,325,728 $1,207,944 $1,206,180 $1,271,270 $1,296,201 
(A)    Collective trust fund program average assets in the Investment Managers segment are included in assets under management since SEI is the trustee. Fees earned on this product are less than fees earned on customized asset management programs.
(B)    Equity and fixed-income programs during second-quarter 2023 include $2.0 billion of average assets managed by LSV in which fees are based solely on performance and are not calculated as an asset-based fee.
(C)    Equity and fixed-income programs include $6.3 billion of average assets invested in various asset allocation funds during second-quarter 2023.
(D)    In addition to the assets presented, SEI also administers an additional $11.9 billion of average assets in Funds of Funds assets during second-quarter 2023 on which SEI does not earn an administration fee.
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