Federated Hermes (FHI) Q4 2025 earnings summary

Executive summary

• Achieved record assets under management (AUM) of $903 billion at year-end 2025, up 9% year-over-year, led by strong gains in money market and equity strategies.

• Q4 2025 EPS was $1.39, up 34% year-over-year; full-year EPS was $5.13, up 59% from 2024.

• Net income for Q4 2025 was $107.0 million, up 26% year-over-year; full-year net income was $403.3 million, up 50%.

• MDT strategies achieved record gross and net sales, with six of nine strategies in the top Morningstar quartile for three-year performance.

• Strategic expansion includes a planned Hong Kong office, the FCP acquisition, and the acquisition of Rivington Energy Management.

Financial highlights

• Q4 2025 revenue rose 14% year-over-year to $482.8 million, driven by higher average money market and equity assets.

• Full-year 2025 revenue increased 10% to $1.8 billion, with operating income up 42% to $513.9 million.

• Q4 operating expenses rose 11% year-over-year, mainly due to higher distribution and compensation costs.

• Cash and investments at year-end were $724 million; long-term debt was $1.53 billion.

• Q4 2025 declared dividend was $0.34 per share; $263.4 million spent on share repurchases in 2025.

Outlook and guidance

• Q1 expected to see $10.2 million lower revenues and $2.6 million lower distribution expenses due to fewer days.

• Compensation and related expenses expected to rise by about $8 million in Q1 due to seasonal factors.

• 2026 forecast includes one Fed rate cut, with money market yields expected to remain attractive above 3%.

• Anticipates continued positive, though possibly single-digit, AUM growth in money markets for 2026.

• Management highlights ongoing investor interest in ETFs, CITS, and SMAs as growth opportunities.