SEI Investments Company (SEIC) Earnings

Management highlights

### Overall Financial Performance - SEI achieved all-time quarterly records: 15% year-over-year revenue growth, 36% year-over-year growth in adjusted operating profit, and 38% year-over-year growth in adjusted earnings per share. Performance reflects multi-year improvements in capital allocation, value proposition, and execution. - Total sales events reached $43 million in Q2 2026, bringing year-to-date sales to $110 million, which would have been a full-year record just a few years ago. - The company reported $11.5 million in net co-investment gains in Q2, including $7.5 million from a consolidated LSV hedge fund co-investment. ### Strategic Growth Initiatives - **Private Markets in Retail & Retirement Channels**: The company sees this secular trend as being in early stages, and it leverages SEI's long-standing scalable infrastructure, administration, compliance, and transfer agency capabilities. The recent expansion of its SEC Registered Transfer Agency creates a full-stack capability, and SEI is one of the only scaled independent trust platforms for private market collective investment trusts in retirement plans. Management projects this opportunity could grow to over $100 million in annual run-rate revenue within five years. - **Asset Management Strategy Execution**: The business has moved from restructuring to active execution. SEI's ETF business grew from $3 billion to over $8 billion in assets in the last 12 months, with the 10th active factor ETF (SEUS) recently launched. The company announced a strategic partnership with Carlyle to combine Carlyle's origination and brand with SEI's platform capabilities. - **Stratos Advisor Succession Solution**: Stratos provides succession, liquidity, and growth solutions for SEI advisors that want to stay within the SEI ecosystem, attracting even long-tenured advisors that previously pursued third-party acquirers. Stratos also maintains a healthy pipeline of external acquisition opportunities at attractive valuations. - **Technology, Data and AI Transformation**: SEI is enhancing the SEI Data Cloud and IMS platform to reduce operational friction, speed up client access to data, and simplify workflows. The IBM enterprise partnership supports automation of labor-intensive processes and co-creation of AI agents to help SEI scale faster to meet growing client demand. AI is being embedded directly into existing workflows to improve service, automate routine tasks, speed up client onboarding, and enhance data access. ### Operational Highlights - C-level client engagement is at the highest level management has seen in decades, with clients increasingly engaging SEI across multiple enterprise capabilities rather than single services. New sales events have faster revenue conversion, shorter implementation timelines, and are margin-accretive, driving improved profitability.

Guidance

• Management does not provide formal explicit revenue or profit guidance, but notes that current sales pipelines are the strongest in company history, with broad-based momentum across all business segments. • Management expects share repurchase activity to increase from Q2 2026 levels in the second half of 2026, returning to approximately Q1 2026 levels, and maintains ample liquidity to support both M&A activity and capital return to shareholders. • Management expects the current 50-50 split of IMS sales between new client wins and expansion of existing client relationships to be a sustainable long-term average. • Management expects margin improvement in private banking to continue, driven by higher-margin professional services in new client deals and ongoing execution of the segment's growth and efficiency strategy. • The new retail alternatives and alternatives in retirement solutions are expected to drive meaningful incremental revenue over the next several years, with alternatives in retirement already gaining early traction with large industry clients.

Segment performance

1. Investment Manager Services (IMS): 17% year-over-year revenue growth, driven by conversion of prior sales success. IMS generated $32 million of Q2 2026 sales events, with ~75% coming from alternative investments. IMS margins improved both year-over-year and sequentially due to operating leverage from strong revenue growth, contributing 74% of total Q2 sales events. 2. Private Banking: 11% year-over-year revenue growth, driven by expansion within the existing client base. Private banking delivered $13 million of Q2 2026 sales events. Margins declined modestly sequentially due to client implementation costs and strategic investments, but were more than 4 percentage points higher year-over-year. Private banking executed $13 million in annualized contract renewals in Q2, following $34 million in Q1. 3. Advisors: 30% year-over-year revenue growth, partially benefiting from higher market values and Stratos contributions. Stratos contributed $21 million in revenue (up 11% from Q1) and generated $2 million in operating profit before non-controlling interest; excluding acquisition-related amortization, Stratos EBITDA exceeded $9 million in Q2. Excluding Stratos, advisors' margins were flat sequentially and over 3 percentage points higher year-over-year. Q2 net sales events were modestly negative overall, but new offerings like ETFs are gaining traction. 4. Institutional (Asset Management): Operating profit was roughly flat year-over-year, as the business continues to invest in strategic growth initiatives including ETF expansion and private market partnerships. Net flows were flat overall, with modest inflows in advisors' offerings offsetting outflows in institutional. LSV (a SEI affiliate) generated $2 billion in net inflows in Q2, with total LSV assets increasing nearly $17 billion driven by inflows and market appreciation, and generated $17 million in performance fees, $6.5 million of which is attributable to SEI. 5. Corporate Overhead: Sequential decline driven by $3 million lower severance expense compared to Q1 2026. Overall company adjusted operating margins expanded 500 basis points year-over-year and 30 basis points sequentially, with total revenue up $82 million year-over-year and expenses up only $34 million.

Risks & headwinds

No material new operational risks, market risks, or operational failures were discussed during the call. The company noted that early stage new initiatives have not yet fully translated to financial results, but management reported ongoing measurable progress relative to prior periods.

Analyst Q&A

• Q: Private banking margins have improved faster than originally expected, targeting the historical 25-30% range. Is there upside to this target and what is driving the improvement?

  A: The ongoing margin improvement is the result of consistent execution of the segment's two-pronged strategy: targeted growth investments and deliberate efficiency improvements. All new client deals now include higher levels of professional services, which carry higher margins than SEI's historical average. This dynamic is expected to continue supporting ongoing margin expansion.

• Q: Is overall demand for outsourcing increasing, and are SEI's AI capabilities mature enough to capture this demand? How does the IBM partnership support this effort?

  A: Demand for outsourcing is growing strongly across all segments, driven by firms re-evaluating their core competencies and looking to offload non-core operations to trusted partners. Clients are already asking for SEI's AI readiness and data cloud professional services, creating new revenue opportunity. The enterprise-wide IBM partnership focuses on automating labor-intensive internal processes to help SEI scale faster to meet growing client demand, starting with IMS before expanding to other segments.

• Q: Three-quarters of IMS sales come from alternative investments. What differentiates SEI's alt platform and what is driving current demand?

  A: SEI differentiates through its proven ability to handle complex alternative investments at scale, with a strong track record of reliable delivery for large global clients. Firms increasingly prefer to consolidate relationships with a small set of capable partners, and SEI's ongoing technology investments keep its platform ahead of client needs. SEI has already gained early traction with five large household-name clients in the new alternatives in retirement segment, and its new registered transfer agency for retail semi-liquid alts goes live August 3, opening a new market for the firm.

• Q: How does SEI balance ramping up share repurchases with holding capital for M&A opportunities, particularly for Stratos?

  A: SEI expects second half 2026 repurchase activity to align with Q1 2026 levels, which were higher than Q2. SEI has an untouched $600 million revolving credit line, providing ample liquidity to fund both planned M&A activity and capital return (dividends and buybacks) to shareholders with no tradeoffs required.

• Q: Can you provide an update on Stratos performance and pipeline?

  A: Stratos delivered ~$9 million in EBITDA in Q2, right in line with management expectations. Stratos' pipeline of acquisition and recruiting opportunities is at a record high, split roughly evenly between the two categories. Recent new hires and technology investments are speeding up client onboarding to support scaling, and a new OCIO lead generation initiative is creating growth for both Stratos advisors and SEI's core OCIO business.