Federated Hermes (FHI) Q1 2025 earnings summary

Executive summary

• Achieved record assets under management (AUM) of $839.8 billion as of March 31, 2025, up 8% year-over-year, led by $637.1 billion in money market assets and supported by growth in equity and fixed income.

• Q1 2025 net income attributable to shareholders rose 35% to $101.1 million, with diluted EPS up to $1.25 from $0.89 year-over-year.

• Revenue for Q1 2025 was $423.5 million, up 7% year-over-year, driven by higher money market asset revenue and performance fees.

• Private markets and alternatives saw new fund launches and the acquisition of a majority stake in Rivington Energy Management Limited.

• Quarterly dividend increased by 9.7% to $0.34 per share; over 3 million shares repurchased for $120.1 million.

Financial highlights

• Managed assets grew 8% year-over-year to $839.8 billion; money market assets up 10%, fixed income up 3%, equity up 1%.

• Q1 2025 revenue was $423.5 million, with operating income rising 34% to $131.8 million and net income at $101.1 million.

• Operating expenses decreased by $6.0 million, aided by a $12.9 million VAT refund and favorable currency movements.

• Cash and investments at quarter-end were $541.8 million; long-term debt stood at $1.32 billion.

• Share repurchases and dividends totaled $145 million year-to-date.

Outlook and guidance

• Management expects continued strong inflows into money market and equity products, with ongoing demand for MDT strategies and a pipeline of $3.9 billion in net institutional mandates yet to fund.

• Anticipate 2–3 Fed rate cuts in 2025, with inflation and employment data suggesting a slower pace.

• Continued investment in technology initiatives, with $280 million planned over three years.

• Forward-looking statements highlight potential for growth but note significant market, economic, and regulatory risks.