Federated Hermes (FHI) Q1 2026 earnings summary

Executive summary

• Assets under management reached a record $907.1 billion as of March 31, 2026, led by equity and money market strategies, with $222.4 billion in long-term managed assets and $684.7 billion in liquidity assets.

• Equity assets hit a record $100.8 billion, up 25% year-over-year, with strong MDT strategy sales and $2.2 billion in net sales in Q1.

• Money market assets reached $684.7 billion, up 7% year-over-year and $2 billion from year-end.

• Acquisition of 80% interest in FCP Fund Manager LP added $3.2 billion in managed assets and expanded U.S. real estate capabilities.

• Q1 2026 EPS was $1.27, up 2% year-over-year, and net income attributable to shareholders was $96.4 million.

Financial highlights

• Q1 2026 revenue was $478.96 million, up 13% year-over-year, while operating expenses rose 21% due to higher distribution and compensation costs.

• Q1 operating income declined 4% year-over-year to $126.3 million.

• Cash and investments at quarter-end were $645 million; long-term debt was $240.7 million.

• 1.19 million shares repurchased for $66 million in Q1 2026.

• Dividend increased by 11.8% to $0.38 per share, payable May 15, 2026.

Outlook and guidance

• Q2 expected to see $12 million in revenue and $11 million in operating expenses from FCP, with $3.8 million in intangible asset expense.

• Estimated Q2 transaction-related EPS impact of $0.11 from FCP acquisition.

• Management expects continued momentum in equity and money market offerings, but notes risks from market volatility, investor behavior, and regulatory changes.

• Fixed income expected net sales of $1.1 billion in Q2, offset by $800 million in government bond redemptions.

• Equity strategies expected net redemptions of $1.4 billion in Q2, mainly from a $3 billion global equity withdrawal.