Federated Hermes (FHI) Q2 2025 earnings summary

Executive summary

• Assets under management reached a record $845.7 billion as of June 30, 2025, up 8% year-over-year, driven by strong equity and money market inflows and performance.

• Q2 2025 revenue was $424.8 million, with net income at $91.0 million and diluted EPS at $1.16, reflecting significant year-over-year growth.

• The company completed the acquisition of a 60% stake in Rivington Energy Management Limited, 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 a 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 for Q2 2025 decreased 15% year-over-year, mainly due to the absence of a prior-year intangible asset impairment.

• Effective tax rate for Q2 2025 was 26.1%, down from 54.9% in Q2 2024.

• Dividend per share for the first half of 2025 totaled $0.65, up from $0.31 in the prior year.

Outlook and guidance

• Q3 began with $1 billion in net institutional mandates yet to fund and $1.6 billion in wins expected, mainly in direct lending, private equity, and trade finance.

• Management expects sufficient liquidity to meet both short- and long-term cash needs, supported by strong cash flow and access to capital markets.

• Principal uses of cash will include acquisitions, global expansion, technology investments, dividends, and share repurchases.

• Compensation and systems expenses projected to rise by a few million dollars in Q3.

• Effective tax rate expected to be 25%-28% for 2025.