SEI earnings for the third quarter of 2026 showed 24% growth in adjusted diluted earnings per share as revenue increased and year-to-date sales events surpassed the company’s previous full-year record. Results released on October 21 also showed a more modest 6% increase in GAAP diluted EPS, with a $32.5 million acquisition-termination charge weighing on reported profit.
Key Takeaways
- Revenue rose 14% to $662 million, while adjusted diluted EPS reached $1.64.
- Year-to-date net sales events reached $157.4 million, exceeding every previous full-year total.
- SEI added $800 million to its repurchase authorization after buying back $215.1 million of shares during the quarter.
Table of Contents
- SEI earnings show stronger operating profitability
- Record sales activity creates a conversion test
- Private Banks and Investment Managers lead growth
- Buyback capacity expands as management targets further growth
- Conclusion
SEI earnings show stronger operating profitability
SEI’s third-quarter 2026 financial results covered the three months ended September 30. GAAP operating income increased 24% to $198 million, while adjusted operating income rose 25% to $208.5 million. The adjusted operating margin expanded 260 basis points from a year earlier to 31%.
The improvement came despite $6.4 million of additional incentive compensation expense associated with year-to-date performance and the company’s outlook for the rest of 2026. Management said adjusted EPS nevertheless declined $0.02 from the second quarter, reflecting lower investment gains from variable interest entities and the compensation adjustment.
GAAP diluted EPS rose to $1.38 from $1.30. Net income attributable to SEI increased 2% to $168.3 million, with a one-time charge tied to termination of the agreement with Stratos to purchase its Mexican subsidiary, NSC. Adjusted EPS growth also benefited from a 3% reduction in share count.
| Item | Details |
|---|---|
| Quarter-end cash | $399.8 million at September 30, 2026. |
| Assets under management | $606.4 billion, down 0.1% from the second quarter. |
| Administration, platform and advisement assets | Increased 4% during the quarter, primarily driven by Investment Managers. |
| LSV assets | Declined 1% sequentially as investment performance was offset by $5.3 billion of net outflows. |
| Performance fees | $4.5 million at SEI’s share during the third quarter. |
Record sales activity creates a conversion test
Third-quarter net sales events totaled $46.8 million, the second-highest quarterly figure in SEI’s history. Investment Managers contributed $32 million, followed by Private Banks at $12.6 million and Investment Advisors at $2.4 million. Institutional Investors recorded negative net sales events of $2.3 million.
The $157.4 million year-to-date total had already exceeded SEI’s best previous full year. These sales events are distinct from revenue recognized during the quarter: the timing and amount of future recurring revenue remain dependent on implementation and client activity.
Chief Executive Ryan Hicke said clients were involving SEI earlier in operating-model discussions. Management also described repeatable migration processes, automation and artificial intelligence as helping accelerate onboarding.
Private Banks and Investment Managers lead growth
Private Banks revenue increased 11%, while operating profit rose 38%, reflecting growth in professional services and broader enterprise capabilities. Investment Managers revenue and operating profit both increased 14%, supported by outsourcing demand and the conversion of prior sales wins into revenue.
Investment Advisors revenue rose 26%, helped by Stratos, which contributed $23.3 million of revenue and $4.4 million of operating profit, including $7.3 million of acquired intangible amortization. Excluding Stratos, revenue grew 10% and operating profit increased 7%.
Institutional Investors remained weaker: revenue fell 2% and operating profit declined 3%, reflecting earlier client outflows. That contrast shows the company’s overall growth was not uniform across its businesses.
Buyback capacity expands as management targets further growth
SEI repurchased 2 million shares during the quarter at an average price of $105.24. On October 20, the board approved an additional $800 million authorization, bringing available repurchase capacity to approximately $926 million. Management expected fourth-quarter repurchase activity to be similar to the third quarter; authorization does not guarantee purchases.
ETF strategy assets exceeded $9 billion, compared with about $4 billion a year earlier. Hicke described the potential to double again in 2027 as an aspiration rather than a specific growth forecast.
Conclusion
The fourth quarter will test how record sales activity converts into recurring revenue and whether repurchases proceed at the pace management expects. SEI earnings showed stronger operating profitability, but institutional outflows and the gap between adjusted and GAAP growth remain important distinctions.
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