EX-99.1 2 seic-earningsreleaseex9914.htm PRESS RELEASE Document
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Investor Contact:                         Media Contact:
Lindsey Opsahl                        Leslie Wojcik
SEI                                SEI
+1 610-676-4052                        +1 610-676-4191
lopsahl@seic.com                        lwojcik@seic.com
Pages:        8

FOR IMMEDIATE RELEASE

SEI Reports First-Quarter 2023 Financial Results

OAKS, Pa., April 20, 2023 – SEI Investments Company (NASDAQ:SEIC) today announced financial results for the first-quarter 2023. Diluted earnings per share were $0.79 in first-quarter 2023 compared to $1.36 in first-quarter 2022. First-quarter 2022 results included a one-time positive $88.0 million revenue event resulting in $0.47 diluted earnings per share net of associated costs.
Consolidated Overview
(In thousands, except earnings per share)For the Three Months Ended March 31,
20232022
Revenues$469,119 $581,443 
Net income 107,015 190,308 
Diluted earnings per share$0.79 $1.36 

“Our first-quarter results reflect strong sales across most of our business lines, especially in technology and investment processing. Revenues and profits were slightly impacted by cash flows in our asset management businesses. We have a clear strategic focus on driving growth and will be very diligent about managing expenses across the company,” said CEO Ryan Hicke.
“We are encouraged by overall sales results, as well as the size and makeup of our pipelines, reflecting changes we have made over the last year. We will thoughtfully align our capital to opportunities for growth and deliver the solutions our markets value. I believe SEI’s future is ripe with opportunity, and we will be aggressive in executing our long-term growth strategy.”

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Summary of First-Quarter Results by Business Segment

(In thousands)For the Three Months Ended March 31,
20232022%
Private Banks:
Revenues$122,603 $213,548 (43)%
Expenses114,276 121,955 (6)%
Operating Profit8,327 91,593 (91)%
Operating Margin7 %43 %
Investment Advisors:
Revenues106,538 119,230 (11)%
Expenses63,546 64,520 (2)%
Operating Profit42,992 54,710 (21)%
Operating Margin40 %46 %
Institutional Investors:
Revenues74,290 86,839 (14)%
Expenses40,868 45,358 (10)%
Operating Profit33,422 41,481 (19)%
Operating Margin45 %48 %
Investment Managers:
Revenues160,686 156,901 2%
Expenses105,866 98,837 7%
Operating Profit54,820 58,064 (6)%
Operating Margin34 %37 %
Investments in New Businesses:
Revenues5,002 4,925 2%
Expenses11,644 11,950 (3)%
Operating Loss(6,642)(7,025)NM
Totals:
Revenues$469,119 $581,443 (19)%
Expenses336,200 342,620 (2)%
Corporate Overhead Expenses31,152 24,024 30%
Income from Operations$101,767 $214,799 (53)%
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First-Quarter Business Highlights:
•Revenues from Information processing and software servicing fees decreased primarily from a one-time early termination fee of $88.0 million from an uninstalled investment processing client recorded during first-quarter 2022 in the Private Banks segment.
•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 the first quarter 2023 partially offset the decline in revenues.
•Average assets under management in equity and fixed income programs, excluding LSV, decreased $26.7 billion, or 14%, to $167.8 billion in the first-quarter 2023, as compared to $194.5 billion during the first-quarter 2022 (see attached Average Asset Balances schedule for further details).
•Revenue from Asset management, administration and distribution fees increased from existing alternative investment clients of the Investment Managers segment 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 first-quarter 2023 were $21.2 million and are expected to generate net annualized recurring revenues of approximately $17.1 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 first-quarter 2023 were $1.0 million.
•Net sales events in newer initiatives during first-quarter 2023 were $1.0 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.
•Earnings from LSV decreased to $28.9 million in the first-quarter 2023 as compared to $32.5 million in the first-quarter 2022 due to net negative cash flows from existing clients, client losses and market depreciation.
•We capitalized $9.0 million of software development costs in first-quarter 2023, of which $4.7 million was for continued enhancements to SWP. We also capitalized $4.3 million of software development costs in first-quarter 2023 for a new platform for the Investment Managers segment.
•Amortization expense related to SWP was $6.2 million in first-quarter 2023 as compared to $12.1 million in first-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 23.6% in first-quarter 2023 and 23.1% in first-quarter 2022.
•We repurchased 1.4 million shares of our common stock for $80.3 million during the first-quarter 2023 at an average price of $59.03 per share.
•Cash flow from operations was $114.4 million, or $0.85 per share, and free cash flow was $94.7 million during the first-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 April 20, 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: 8123608.

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 solve problems, manage change, and help protect assets—for growth today and in the future. As of March 31, 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:
•our strategic focus;
•the opportunities for us;
•when and if we will generate net annualized recurring revenues from sales events that occurred during the quarter, and
•whether we will be able to:
•manage expenses across the company;
•align our capital to opportunities for growth and deliver the solutions our markets value; or
•execute against our long-term growth strategy.
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:
•our ability to manage through times of uncertainty;
•the degree to which market conditions and trends create growth opportunities for us;
•the direction in which we are moving;
•our sales momentum;
•the traction we will generate in the areas we have increased our market focus and attention;
•the degree to which we will assess and revise our alignment of capital to opportunity;
•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 growth opportunities in the RIA market of our Investment Advisors segment present for our technology, investment processing, and asset management capabilities;
•those circumstances that may challenge our revenue rate earned on managed assets;
•the movement of assets among SMA, ETFs, direct indexing and third-party branded products;
•whether the nature of our asset management offerings enables us to keep and capture assets supporting our long-term growth and health;
•the importance of alternative assets to our strategic agenda;
•the headwinds in the U.K. and U.S. for our Institutional Investors segment;
•the degree to which our Private Banks segment will be profitable;
•the need to increase penetration and growth in our asset management markets by capitalizing on the continued growth and demand from intermediaries and institutions;
•the degree to which the changes we have made in leadership give us a greater opportunity to maintain and drive success in the short and medium term, while also driving talent mobility in the organization to position us for the future;
•the drivers of sales momentum;
•our ability to create growth engines;
•our ability to manage expenses and increase EPS;
•whether we are laying the foundation from which we will deliver what the market values;
•our ability to maintain and grow the sales momentum and continue to ensure we are selling, installing, and refreshing our pipelines with the right types of clients;
•the organic and inorganic opportunities that will drive our growth;
•the expense levels in our Investments in New Businesses segment;
•the impact of LSV’s pipeline on our revenue; and
•the 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.
# # #
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SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended March 31,
20232022
Asset management, admin. and distribution fees$371,829 $394,097 
Information processing and software servicing fees97,290 187,346 
Total revenues469,119 581,443 
Subadvisory, distribution and other asset mgmt. costs47,379 53,128 
Software royalties and other information processing costs7,293 7,547 
Compensation, benefits and other personnel173,415 160,484 
Stock-based compensation8,074 10,566 
Consulting, outsourcing and professional fees61,104 62,491 
Data processing and computer related33,340 29,816 
Facilities, supplies and other costs18,792 17,627 
Amortization9,424 16,887 
Depreciation8,531 8,098 
Total expenses367,352 366,644 
Income from operations101,767 214,799 
Net gain (loss) on investments744 (489)
Interest and dividend income8,778 848 
Interest expense(141)(250)
Equity in earnings of unconsolidated affiliate28,879 32,459 
Income before income taxes140,027 247,367 
Income taxes33,012 57,059 
Net income$107,015 $190,308 
Basic earnings per common share$0.80 $1.38 
Shares used to calculate basic earnings per share134,020 137,935 
Diluted earnings per common share$0.79 $1.36 
Shares used to calculate diluted earnings per share135,311 139,712 
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SEI INVESTMENTS COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31,December 31,
20232022
Assets
Current Assets:
Cash and cash equivalents$834,355 $853,008 
Restricted cash352 351 
Receivables from investment products55,744 62,014 
Receivables, net of allowance for doubtful accounts of $721 and $901
458,226 457,084 
Securities owned31,779 32,148 
Other current assets50,964 48,703 
Total Current Assets1,431,420 1,453,308 
Property and Equipment, net of accumulated depreciation of $449,628 and $440,861
183,207 181,029 
Operating Lease Right-of-Use Assets23,992 24,992 
Capitalized Software, net of accumulated amortization of $593,049 and $586,744
240,038 237,302 
Available for Sale and Equity Securities124,269 128,201 
Investments in Affiliated Funds, at fair value6,537 6,366 
Investment in Unconsolidated Affiliate55,041 104,673 
Goodwill115,602 115,599 
Intangible Assets, net of accumulated amortization of $33,226 and $30,261
52,567 55,532 
Deferred Contract Costs37,505 37,928 
Deferred Income Taxes9,993 4,936 
Other Assets, net38,323 33,687 
Total Assets$2,318,494 $2,383,553 
Liabilities and Equity
Current Liabilities:
Accounts payable$14,160 $13,283 
Accrued liabilities233,684 359,363 
Current portion of long-term operating lease liabilities10,331 10,344 
Deferred revenue14,330 14,893 
Total Current Liabilities272,505 397,883 
Long-term Income Taxes Payable803 803 
Long-term Operating Lease Liabilities17,657 18,786 
Other Long-term Liabilities13,195 12,257 
Total Liabilities304,160 429,729 
Shareholders' Equity:
Common stock, $0.01 par value, 750,000 shares authorized; 133,268 and 134,162 shares issued and outstanding
1,333 1,342 
Capital in excess of par value1,327,591 1,307,162 
Retained earnings729,988 694,287 
Accumulated other comprehensive loss, net(44,578)(48,967)
Total Shareholders' Equity2,014,334 1,953,824 
Total Liabilities and Shareholders' Equity$2,318,494 $2,383,553 
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ENDING ASSET BALANCES
(In millions) (Unaudited)
Mar. 31,Jun. 30,Sept. 30,Dec. 31,Mar. 31,
20222022202220222023
Private Banks:
Equity and fixed-income programs$25,335 $22,277 $20,131 $22,377 $23,653 
Collective trust fund programs7 7 7 7 6 
Liquidity funds4,225 3,666 3,778 3,201 3,427 
Total assets under management$29,567 $25,950 $23,916 $25,585 $27,086 
Client assets under administration4,449 3,923 4,161 4,151 4,299 
Total assets$34,016 $29,873 $28,077 $29,736 $31,385 
Investment Advisors:
Equity and fixed-income programs$77,614 $65,783 $62,579 $66,240 $68,065 
Liquidity funds4,610 8,292 5,200 5,436 4,965 
Total Platform assets under management$82,224 $74,075 $67,779 $71,676 $73,030 
Platform-only assets14,151 12,642 12,609 13,931 14,980 
Total Platform assets$96,375 $86,717 $80,388 $85,607 $88,010 
Institutional Investors:
Equity and fixed-income programs$87,358 $75,506 $69,621 $73,178 $74,939 
Collective trust fund programs6 5 6 5 4 
Liquidity funds2,150 1,654 1,640 1,557 1,576 
Total assets under management$89,514 $77,165 $71,267 $74,740 $76,519 
Client assets under advisement4,778 4,218 4,204 4,314 4,559 
Total assets$94,292 $81,383 $75,471 $79,054 $81,078 
Investment Managers:
Collective trust fund programs (A)$85,411 $142,035 $137,538 $141,285 $146,176 
Liquidity funds284 271 248 199 203 
Total assets under management$85,695 $142,306 $137,786 $141,484 $146,379 
Client assets under administration895,181 885,096 781,246 810,491 845,828 
Total assets$980,876 $1,027,402 $919,032 $951,975 $992,207 
Investments in New Businesses:
Equity and fixed-income programs$2,057 $1,903 $1,813 $1,912 $2,031 
Liquidity funds305 242 221 215 217 
Total assets under management$2,362 $2,145 $2,034 $2,127 $2,248 
Client assets under administration1,401 1,076 1,026 1,077 1,081 
Total assets$3,763 $3,221 $3,060 $3,204 $3,329 
LSV Asset Management:
Equity and fixed-income programs (B)$95,962 $81,940 $75,380 $83,753 $84,964 
Total:
Equity and fixed-income programs (C)$288,326 $247,409 $229,524 $247,460 $253,652 
Collective trust fund programs85,424 142,047 137,551 141,297 146,186 
Liquidity funds11,574 14,125 11,087 10,608 10,388 
Total assets under management$385,324 $403,581 $378,162 $399,365 $410,226 
Client assets under advisement6,179 5,294 5,230 5,391 5,640 
Client assets under administration (D)899,630 889,019 785,407 814,642 850,127 
Platform-only assets14,151 12,642 12,609 13,931 14,980 
Total assets$1,305,284 $1,310,536 $1,181,408 $1,233,329 $1,280,973 
(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 March 31, 2023).
(C)Equity and fixed-income programs include $6.3 billion of assets invested in various asset allocation funds (as of March 31, 2023).
(D)    In addition to the assets presented, SEI also administers an additional $12.1 billion in Funds of Funds assets on which SEI does not earn an administration fee (as of March 31, 2023).
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AVERAGE ASSET BALANCES
(In millions) (Unaudited)
1st Qtr.2nd Qtr.3rd Qtr.4th Qtr.1st Qtr.
20222022202220222023
Private Banks:
Equity and fixed-income programs$25,637 $23,713 $22,115 $21,839 $23,576 
Collective trust fund programs6 7 7 7 7 
Liquidity funds4,403 3,795 3,742 3,395 3,253 
Total assets under management$30,046 $27,515 $25,864 $25,241 $26,836 
Client assets under administration4,500 4,163 4,026 4,126 4,316 
Total assets$34,546 $31,678 $29,890 $29,367 $31,152 
Investment Advisors:
Equity and fixed-income programs$77,576 $70,436 $67,464 $66,100 $67,578 
Liquidity funds5,151 7,070 5,380 5,127 4,995 
Total Platform assets under management$82,727 $77,506 $72,844 $71,227 $72,573 
Platform-only assets13,978 13,142 13,271 13,905 14,812 
Total Platform assets$96,705 $90,648 $86,115 $85,132 $87,385 
Institutional Investors:
Equity and fixed-income programs$89,250 $80,971 $74,859 $72,581 $74,653 
Collective trust fund programs5 5 6 5 5 
Liquidity funds2,223 2,097 1,717 1,719 1,715 
Total assets under management$91,478 $83,073 $76,582 $74,305 $76,373 
Client assets under advisement4,889 3,987 4,194 4,251 4,431 
Total assets$96,367 $87,060 $80,776 $78,556 $80,804 
Investment Managers:
Collective trust fund programs (A)$86,633 $131,435 $143,817 $140,494 $144,914 
Liquidity funds432 285 250 275 317 
Total assets under management$87,065 $131,720 $144,067 $140,769 $145,231 
Client assets under administration888,854 893,361 782,559 785,813 836,410 
Total assets$975,919 $1,025,081 $926,626 $926,582 $981,641 
Investments in New Businesses:
Equity and fixed-income programs$2,025 $2,016 $1,939 $1,890 $1,991 
Liquidity funds286 262 231 208 212 
Total assets under management$2,311 $2,278 $2,170 $2,098 $2,203 
Client assets under advisement1,397 1,165 1,126 1,075 1,098 
Total assets$3,708 $3,443 $3,296 $3,173 $3,301 
LSV Asset Management:
Equity and fixed-income programs (B)$96,449 $87,818 $81,241 $83,370 $86,987 
Total:
Equity and fixed-income programs (C)$290,937 $264,954 $247,618 $245,780 $254,785 
Collective trust fund programs86,644 131,447 143,830 140,506 144,926 
Liquidity funds12,495 13,509 11,320 10,724 10,492 
Total assets under management$390,076 $409,910 $402,768 $397,010 $410,203 
Client assets under advisement6,286 5,152 5,320 5,326 5,529 
Client assets under administration (D)893,354 897,524 786,585 789,939 840,726 
Platform-only assets13,978 13,142 13,271 13,905 14,812 
Total assets$1,303,694 $1,325,728 $1,207,944 $1,206,180 $1,271,270 
(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 first-quarter 2023 include $2.1 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 $6.4 billion of average assets invested in various asset allocation funds during first-quarter 2023.
(D)    In addition to the assets presented, SEI also administers an additional $12.3 billion of average assets in Funds of Funds assets during first-quarter 2023 on which SEI does not earn an administration fee.
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