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Federated Hermes Q2 Earnings Top Estimates, AUM Reaches Record Level
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Key Takeaways
{\"0\":\"FHI posted Q2 EPS of $1.16, topping estimates and rising 20.8% from the prior-year quarter.\",\"1\":\"Total revenues rose 6% to $424.8M, while operating expenses fell 15% to $307.8M.\",\"2\":\"FHI\'s total managed assets hit a record $845.7B, up 8% y/y.\"}
Federated Hermes, Inc.’s (FHI - Free Report) second-quarter 2025 adjusted earnings per share of $1.16 topped the Zacks Consensus Estimate of $1.02 per share. The bottom line grew 20.8% from the year-ago quarter.
Increased net administrative service fees and net investment advisory fees are major driving factors. The company’s total managed assets touched a record level. A rise in revenues and a decline in expenses were added advantages.
Net income (GAAP basis) of $91 million rose significantly from $21 million in the year-ago quarter.
FHI’s Revenues Rise & Expenses Decline
Total revenues increased 6% year over year to $424.8 million. The top line surpassed the Zacks Consensus Estimate by 0.1%.
Quarterly net investment advisory fees rose 6% year over year to $287.4 million. Our estimate for the metric was $285.8 million.
Net other service fees fell 2% year over year to $35.7 million, and net administrative service fees rose 7% to $101.7 million. Our estimate for the other service fees and administrative service fees was pegged at $36.8 million and $100.4 million, respectively.
Total operating expenses declined 15% year over year to $307.8 million. Our estimate for the metric was $300 million.
FHI recorded a net non-operating income of $13.7 million, up from $1.9 million in the prior-year quarter.
Federated Hermes’ Balance Sheet Position Improves
As of June 30, 2025, cash and other investments and total long-term debt were $607.5 million and $348.3 million compared with $541.8 million and $348.2 million, respectively, as of March 31, 2025.
FHI’s Asset Position Solid
As of June 30, 2025, total managed assets were at a record level of $845.7 billion, up 8% year over year. Our estimate for the metric was $825 billion.
FHI reported money-market assets of $634.4 billion, up 8% year over year. Fixed-income assets increased 4% to $98.7 billion. Our expectations for money-market and fixed-income assets were $620.5 billion and $99.8 billion, respectively.
Equity assets of $89 billion increased 14% from the prior-year quarter. Alternative/private market assets rose 3% to $20.7 billion. Our estimate for equity assets and alternative/private market assets was $81.7 billion and $20.1 billion, respectively.
Average managed assets totaled $837.3 billion, up 7% year over year. Our estimate was $821.1 billion.
Federated Hermes’ Capital Distribution Update
The company repurchased 1,547,182 shares of its class B common stock for $64.5 million in the reported quarter.
In the second quarter, the board of directors also authorized its 18th share repurchase program, allowing the buyback of up to an additional 5 million shares of Federated Hermes class B common stock in the open market with no expiration date.
Our Viewpoint on FHI
Federated Hermes displays substantial growth potential, supported by its diverse asset and product mix, and a solid liquidity position. Though uncertain markets pose a threat, a solid asset under management balance will likely aid its financials.
Federated Hermes, Inc. Price, Consensus and EPS Surprise
Invesco’s (IVZ - Free Report) second-quarter 2025 adjusted earnings of 36 cents per share lagged the Zacks Consensus Estimate of 40 cents. Moreover, the bottom line declined 16.3% from the prior-year quarter.
IVZ’s results were adversely impacted by higher adjusted operating expenses. However, a rise in adjusted net revenues was a tailwind. An increase in the assets under management balance due to solid inflows was another positive.
Blackstone’s (BX - Free Report) second-quarter 2025 distributable earnings of $1.21 per share surpassed the Zacks Consensus Estimate of $1.10. The figure reflects a rise of 26% from the prior-year quarter.
BX’s results benefited from higher segment revenues and a rise in assets under management. However, an increase in GAAP expenses was a headwind.
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Federated Hermes Q2 Earnings Top Estimates, AUM Reaches Record Level
Key Takeaways
Federated Hermes, Inc.’s (FHI - Free Report) second-quarter 2025 adjusted earnings per share of $1.16 topped the Zacks Consensus Estimate of $1.02 per share. The bottom line grew 20.8% from the year-ago quarter.
Increased net administrative service fees and net investment advisory fees are major driving factors. The company’s total managed assets touched a record level. A rise in revenues and a decline in expenses were added advantages.
Net income (GAAP basis) of $91 million rose significantly from $21 million in the year-ago quarter.
FHI’s Revenues Rise & Expenses Decline
Total revenues increased 6% year over year to $424.8 million. The top line surpassed the Zacks Consensus Estimate by 0.1%.
Quarterly net investment advisory fees rose 6% year over year to $287.4 million. Our estimate for the metric was $285.8 million.
Net other service fees fell 2% year over year to $35.7 million, and net administrative service fees rose 7% to $101.7 million. Our estimate for the other service fees and administrative service fees was pegged at $36.8 million and $100.4 million, respectively.
Total operating expenses declined 15% year over year to $307.8 million. Our estimate for the metric was $300 million.
FHI recorded a net non-operating income of $13.7 million, up from $1.9 million in the prior-year quarter.
Federated Hermes’ Balance Sheet Position Improves
As of June 30, 2025, cash and other investments and total long-term debt were $607.5 million and $348.3 million compared with $541.8 million and $348.2 million, respectively, as of March 31, 2025.
FHI’s Asset Position Solid
As of June 30, 2025, total managed assets were at a record level of $845.7 billion, up 8% year over year. Our estimate for the metric was $825 billion.
FHI reported money-market assets of $634.4 billion, up 8% year over year. Fixed-income assets increased 4% to $98.7 billion. Our expectations for money-market and fixed-income assets were $620.5 billion and $99.8 billion, respectively.
Equity assets of $89 billion increased 14% from the prior-year quarter. Alternative/private market assets rose 3% to $20.7 billion. Our estimate for equity assets and alternative/private market assets was $81.7 billion and $20.1 billion, respectively.
Average managed assets totaled $837.3 billion, up 7% year over year. Our estimate was $821.1 billion.
Federated Hermes’ Capital Distribution Update
The company repurchased 1,547,182 shares of its class B common stock for $64.5 million in the reported quarter.
In the second quarter, the board of directors also authorized its 18th share repurchase program, allowing the buyback of up to an additional 5 million shares of Federated Hermes class B common stock in the open market with no expiration date.
Our Viewpoint on FHI
Federated Hermes displays substantial growth potential, supported by its diverse asset and product mix, and a solid liquidity position. Though uncertain markets pose a threat, a solid asset under management balance will likely aid its financials.
Federated Hermes, Inc. Price, Consensus and EPS Surprise
Federated Hermes, Inc. price-consensus-eps-surprise-chart | Federated Hermes, Inc. Quote
Currently, FHI carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
Invesco’s (IVZ - Free Report) second-quarter 2025 adjusted earnings of 36 cents per share lagged the Zacks Consensus Estimate of 40 cents. Moreover, the bottom line declined 16.3% from the prior-year quarter.
IVZ’s results were adversely impacted by higher adjusted operating expenses. However, a rise in adjusted net revenues was a tailwind. An increase in the assets under management balance due to solid inflows was another positive.
Blackstone’s (BX - Free Report) second-quarter 2025 distributable earnings of $1.21 per share surpassed the Zacks Consensus Estimate of $1.10. The figure reflects a rise of 26% from the prior-year quarter.
BX’s results benefited from higher segment revenues and a rise in assets under management. However, an increase in GAAP expenses was a headwind.