Loading...
01/10 16:34
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects a positive sentiment due to strong organic growth, record high money market fund assets, and increased revenue. The dividend increase and share repurchase indicate shareholder-friendly actions. Despite some concerns about stablecoin impacts and expense increases, the overall tone remains optimistic, with management highlighting potential growth areas and strategic acquisitions. The Q&A session didn't reveal significant negative trends, and the company's market cap suggests a moderate reaction, leading to a positive prediction for the stock price.
Assets Under Management (AUM) Record high of $846 billion in Q2 2025, a 10% increase in equity assets ($8.1 billion) from the prior quarter, driven by gains in equity strategies.
Equity Net Sales $1.8 billion in Q2 2025, representing an organic growth rate of just under 9%. Increase attributed to strong performance in MDT fundamental quant strategies and strategic value dividend strategies.
Fixed Income Assets Decreased by $800 million (1%) in Q2 2025 due to $2.4 billion in net redemptions, partially offset by $1.6 billion in higher market valuations and FX.
Alternative Private Markets Assets Increased by $1.3 billion (7%) in Q2 2025, mainly due to $1.1 billion impact of FX rates and $231 million in net sales.
Money Market Fund Assets Reached a record high of $468 billion in Q2 2025, increasing by $3.1 billion despite seasonal factors. Separate accounts decreased by $5.9 billion due to usual seasonal patterns.
Revenue Increased slightly in Q2 2025 from the prior quarter due to more days in the quarter and revenue from the Rivington acquisition, partially offset by lower performance fees and carried interest.
Operating Expenses Increased in Q2 2025 compared to Q1 due to the absence of a $12.9 million VAT refund received in Q1.
Compensation and Related Expense Increased by $1.6 million in Q2 2025 due to $6.9 million in higher incentive compensation and base pay merit increases, partially offset by $4.7 million lower stock-based compensation and $600,000 lower payroll taxes.
Cash and Investments $607 million at the end of Q2 2025, with $474 million excluding noncontrolling interests.
MDT equity strategies: Net sales of $3.8 billion in Q2, up from $3.3 billion in Q1. Seven of eight MDT equity mutual fund strategies are in the top performance quartile for the trailing 3 years.
European Real Estate Debt Fund: New pooled European debt fund launched with a target raise of $300 million.
Tokenized money market funds: Actively participating in development and digital asset infrastructure, including a private tokenized fund with $425 million in assets.
European Direct Lending III: Closed on $450 million to date, with a target raise of $750 million.
Global private equity co-invest fund: First close in April for $114 million, targeting $500 million.
Pan-European Growth Private Equity Innovation Fund II: Closed on $110 million, targeting $300 million.
Rivington Energy Management acquisition: Acquired majority interest in a U.K. renewable energy company to enhance private markets platform and infrastructure asset management.
Money market fund assets: Reached a record high of $468 billion in Q2, despite seasonal factors.
Digital asset initiatives: Collaborating with Bank of New York and Goldman Sachs on blockchain technology for money market funds, enhancing utility and transferability.
U.K. Property Trust restructuring: Transitioning fund to a third party due to changing market demand, providing liquidity options for investors.
Fixed Income Redemptions: Fixed income assets decreased by $800 million in Q2 due to net redemptions of $2.4 billion, partially offset by higher market valuations and FX. Redemptions included $1.5 billion from two large public entities with regular sizable inflows and outflows.
UK Property Trust Restructuring: The restructuring of the UK Property Trust will result in $1.2 billion in redemptions in Q3. This is due to changing market demand for such products, and the transition is being done to provide liquidity options to investors.
Performance Fees and Carried Interest: Q2 performance fees and carried interest dropped significantly to $1.4 million from $5.9 million in Q1, impacting revenue.
Compensation and Related Expenses: Compensation expenses increased by $1.6 million in Q2 due to higher incentive compensation and base pay merit increases, partially offset by lower stock-based compensation and payroll taxes.
Advertising and Promotional Expenses: Advertising and promotional expenses increased due to the timing of campaign spending, adding to operational costs.
Digital Asset Initiatives: While Federated Hermes is actively exploring digital asset opportunities, the initiatives are still in development and may face challenges in adoption and regulatory compliance.
Equity Strategies: For Q3 through July 25, MDT equity strategies have had net sales in combined funds and SMAs of $730 million. Seven of the 8 MDT equity mutual fund strategies are in the top performance quartile of their Morningstar categories for the trailing 3 years ended June 30. Four of these strategies are in the top decile.
Fixed Income: For Q3 through July 25, combined fixed income and SMAs had net sales of $47 million. Fixed income expected net additions totaled about $545 million with wins in multi-sector, high yield, and active cash.
Alternative Private Markets: Federated Hermes is in the market with several funds, including European Direct Lending III (target raise: $750 million), Global Private Equity Co-Invest Fund (target raise: $500 million), and Pan-European Growth Private Equity Innovation Fund II (target raise: $300 million). The European Real Estate Debt Fund is also being marketed with a target of $300 million.
Institutional Mandates: Federated Hermes began Q3 with about $1 billion in net institutional mandates yet to fund in both funds and separate accounts. Approximately $439 million of total wins are expected to come into Private Markets strategies. There are approximately $1.6 billion in wins yet to fund, mostly in direct lending, private equity, and trade finance.
Money Markets: Federated Hermes reached a record high of $468 billion in money market fund assets at the end of Q2. Market conditions remain favorable for cash as an asset class. The company is actively participating in the development of tokenized money market funds and digital asset infrastructure, including a collaborative initiative with Bank of New York and Goldman Sachs to use blockchain technology for money market funds.
Share Repurchase Program: During Q2, the company purchased approximately 1.5 million shares of its stock for about $64.5 million. The Board of Directors approved a new share repurchase program yesterday for 5 million shares in addition to the 1.1 million shares remaining from the prior program.
The earnings call summary presents mixed signals. Record high AUM and revenue increases are positive, but the restructuring led to asset decreases. The pause in share repurchase and high-yield bond redemptions are concerning. The Q&A section reveals management's lack of specific guidance and expense increases due to acquisitions and digital initiatives, causing uncertainty. The company's market cap suggests a moderate reaction, leading to a neutral overall sentiment.
The earnings call reflects a positive sentiment due to strong organic growth, record high money market fund assets, and increased revenue. The dividend increase and share repurchase indicate shareholder-friendly actions. Despite some concerns about stablecoin impacts and expense increases, the overall tone remains optimistic, with management highlighting potential growth areas and strategic acquisitions. The Q&A session didn't reveal significant negative trends, and the company's market cap suggests a moderate reaction, leading to a positive prediction for the stock price.
The earnings call presents a mixed picture: strong shareholder returns with increased dividends and share repurchases, and positive growth in money market assets. However, challenges include FX volatility, substantial outflows due to margin calls, and unclear management responses in the Q&A, which raise concerns. While financial health appears stable, with decreased operating expenses and increased carried interest, the lack of clear guidance and potential economic headwinds temper optimism. Given the market cap of $2.75 billion, the stock is likely to remain neutral, with minor fluctuations within the -2% to 2% range over the next two weeks.
The earnings call reveals mixed but generally positive factors: a record high in assets under management, increased dividends, and share repurchases. Despite slight revenue decreases and competitive pressures, optimistic guidance and strong money market growth outlooks are evident. The Q&A highlighted some market challenges but also noted substantial inflows post-tax date. Given the company's market cap, the positive elements, especially shareholder returns and optimistic guidance, are likely to result in a stock price increase between 2% to 8%.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
