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Federated Hermes (FHI) investor relations material

Federated Hermes Q2 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q2 2025 earnings summary1 Aug, 2025

Executive summary

  • Achieved record assets under management of $845.7 billion as of June 30, 2025, up 8% year-over-year, led by equity and money market gains.

  • Q2 2025 revenue was $424.8 million, with net income at $91.0 million and diluted EPS of $1.16, up sharply from the prior year.

  • Completed a 60% acquisition of Rivington Energy Management, expanding private markets and energy transition capabilities.

  • Board declared a $0.34 per share dividend and authorized a new 5 million share repurchase program.

  • Business model emphasizes active management, global reach, and diversified asset mix for growth and stability.

Financial highlights

  • Q2 2025 revenue rose 6% year-over-year to $424.8 million, driven by higher average money market and equity assets.

  • Net income for Q2 2025 was $91.0 million, up $70.0 million from Q2 2024, primarily due to higher revenue and lower intangible asset-related expenses.

  • Operating expenses fell 15% year-over-year, mainly due to the absence of a prior-year intangible asset impairment.

  • Q2 2025 operating margin was 27.6%, up from 10.1% in Q2 2024.

  • Q2 2025 declared dividend was $0.34 per share.

Outlook and guidance

  • Continued focus on innovation in digital assets, tokenized money market funds, and technology-driven initiatives.

  • Management expects sufficient liquidity for short- and long-term needs, with principal uses of cash including acquisitions, expansion, technology, dividends, and buybacks.

  • Compensation and systems expenses projected to rise in coming quarters.

  • Effective tax rate guidance for 2025 remains at 25–28%.

  • Organic growth expected across cycles, complemented by selective acquisitions.

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Frequently asked questions

Investment Management With an ESG Focus

Federated Hermes, formerly known as Federated Investors, is an American investment management firm with multinational operations. The company offers a diverse range of investment services, including active management in equities, fixed income, alternative and private market investments, multi-asset strategies, and liquidity management. The firm manages substantial assets for a varied clientele, including corporations, government entities, insurance companies, and foundations. It is headquartered in Pittsburgh, Pennsylvania, and its shares are listed on the NYSE.

Founded by High School Classmates

Federated Investors was founded in 1955 in Pittsburgh by two former High School Classmates, John F. Donahue and Richard B. Fisher, together with the help of legal counsel Thomas J. Donnelly, It began as a mutual fund company, primarily focusing on the management of money market funds and steadily growing.

Throughout the 1980s and 1990s, Federated expanded its product offerings and grew its assets under management significantly. It started offering a wider range of mutual funds and began serving a broader client base, eventually going public in 1998. Following its IPO, the company continued to grow, both organically and through acquisitions in 2020, Federated Investors rebranded as Federated Hermes, Inc. This change followed the 2018 acquisition of a majority stake in Hermes Investment Management, a London-based investment management firm known for its focus on responsible investing.

The Financial Services

The company's primary focus is on managing investment funds and providing tailored investment solutions to meet the diverse needs of its clients. These services encompass various asset classes, including equity, fixed income, alternative investments, and multi-asset strategies. A significant aspect of Federated Hermes' offerings is its expertise in liquidity management, which is particularly beneficial for institutional clients and businesses in managing their cash flows and maintaining liquidity.

The firm caters to a broad spectrum of clients, from individual investors to large institutional clients like pension funds, endowments, and financial intermediaries. For individual investors, Federated Hermes offers mutual funds and managed accounts, while institutional clients benefit from customized portfolio management and advisory services. Some similar companies listed on public exchanges are Apollo Global Management, The Carlyle Group, and Franklin Resources.

A Strong Focus on ESG

Federated Hermes has a strong focus on Environmental, Social, and Governance (ESG) principles, positioning these factors at the core of its investment philosophy. The company integrates ESG considerations into its investment analysis and decision-making processes across its entire portfolio. By doing so, Federated Hermes aims to identify companies that not only demonstrate financial potential but also show a commitment to responsible business practices.

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