07/25/2024 | Press release | Distributed by Public on 07/25/2024 15:06
MEDIA: | ANALYSTS: |
Ed Costello 412-288-7538 | Ray Hanley 412-288-1920 |
Federated Hermes reports Q2 2024 earnings
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Federated Hermes reports Q2 2024 earnings
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Federated Hermes reports Q2 2024 earnings
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Federated Hermes reports Q2 2024 earnings
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Page 5 of 13
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Unaudited Condensed Consolidated Statements of Income | ||||||||||
(in thousands, except per share data) | ||||||||||
Quarter Ended | % Change Q2 2023 to Q2 2024 | Quarter Ended | % Change Q1 2024 to Q2 2024 | |||||||
June 30, 2024 | June 30, 2023 | March 31, 2024 | ||||||||
Revenue | ||||||||||
Investment advisory fees, net | $ | 270,622 | $ | 310,337 | (13) | % | $ | 264,294 | 2 | % |
Administrative service fees, net-affiliates | 95,346 | 85,199 | 12 | 94,786 | 1 | |||||
Other service fees, net | 36,615 | 37,696 | (3) | 37,291 | (2) | |||||
Total Revenue | 402,583 | 433,232 | (7) | 396,371 | 2 | |||||
Operating Expenses | ||||||||||
Compensation and related | 130,748 | 159,883 | (18) | 136,546 | (4) | |||||
Distribution | 93,503 | 97,086 | (4) | 94,894 | (1) | |||||
Intangible asset related | 69,392 | 3,418 | NM | 3,235 | NM | |||||
Systems and communications | 23,194 | 22,074 | 5 | 21,823 | 6 | |||||
Professional service fees | 19,845 | 19,099 | 4 | 18,352 | 8 | |||||
Office and occupancy | 9,765 | 11,404 | (14) | 9,969 | (2) | |||||
Advertising and promotional | 6,621 | 5,109 | 30 | 4,306 | 54 | |||||
Travel and related | 3,847 | 3,835 | 0 | 3,273 | 18 | |||||
Other | 4,951 | 12,935 | (62) | 5,392 | (8) | |||||
Total Operating Expenses | 361,866 | 334,843 | 8 | 297,790 | 22 | |||||
Operating Income | 40,717 | 98,389 | (59) | 98,581 | (59) | |||||
Nonoperating Income (Expenses) | ||||||||||
Investment income (loss), net | 5,132 | 5,289 | (3) | 8,483 | (40) | |||||
Debt expense | (3,159) | (3,118) | 1 | (3,149) | 0 | |||||
Other, net | (34) | (15) | (127) | 103 | (133) | |||||
Total Nonoperating Income (Expenses), net | 1,939 | 2,156 | (10) | 5,437 | (64) | |||||
Income before income taxes | 42,656 | 100,545 | (58) | 104,018 | (59) | |||||
Income tax provision | 23,431 | 27,543 | (15) | 29,008 | (19) | |||||
Net income including the noncontrolling interests in subsidiaries | 19,225 | 73,002 | (74) | 75,010 | (74) | |||||
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries | (1,802) | 827 | (318) | (23) | NM | |||||
Net Income | $ | 21,027 | $ | 72,175 | (71) | % | $ | 75,033 | (72) | % |
Amounts Attributable to Federated Hermes, Inc. | ||||||||||
Earnings Per Share1
|
||||||||||
Basic and diluted | $ | 0.20 | $ | 0.81 | (75) | % | $ | 0.89 | (78) | % |
Weighted-Average Shares Outstanding | ||||||||||
Basic | 80,026 | 84,930 | 80,709 | |||||||
Diluted | 80,026 | 84,939 | 80,710 | |||||||
Dividends Declared Per Share | $ | 1.31 | $ | 0.28 | $ | 0.28 |
Federated Hermes reports Q2 2024 earnings
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Page 6 of 13
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Unaudited Condensed Consolidated Statements of Income | ||||||
(in thousands, except per share data) | ||||||
Six Months Ended | ||||||
June 30, 2024 | June 30, 2023 | % Change | ||||
Revenue | ||||||
Investment advisory fees, net | $ | 534,916 | $ | 574,318 | (7) | % |
Administrative service fees, net-affiliates | 190,132 | 164,378 | 16 | |||
Other service fees, net | 73,906 | 76,725 | (4) | |||
Total Revenue | 798,954 | 815,421 | (2) | |||
Operating Expenses | ||||||
Compensation and related | 267,294 | 296,761 | (10) | |||
Distribution | 188,398 | 190,420 | (1) | |||
Intangible asset related | 72,627 | 6,743 | NM | |||
Systems and communications | 45,017 | 42,046 | 7 | |||
Professional service fees | 38,197 | 35,320 | 8 | |||
Office and occupancy | 19,734 | 24,278 | (19) | |||
Advertising and promotional | 10,927 | 9,451 | 16 | |||
Travel and related | 7,119 | 7,066 | 1 | |||
Other | 10,343 | 19,781 | (48) | |||
Total Operating Expenses | 659,656 | 631,866 | 4 | |||
Operating Income | 139,298 | 183,555 | (24) | |||
Nonoperating Income (Expenses) | ||||||
Investment income (loss), net | 13,615 | 15,601 | (13) | |||
Debt expense | (6,308) | (6,243) | 1 | |||
Other, net | 69 | 107 | (36) | |||
Total Nonoperating Income (Expenses), net | 7,376 | 9,465 | (22) | |||
Income before income taxes | 146,674 | 193,020 | (24) | |||
Income tax provision | 52,439 | 48,552 | 8 | |||
Net income including the noncontrolling interests in subsidiaries | 94,235 | 144,468 | (35) | |||
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries | (1,825) | 2,692 | (168) | |||
Net Income | $ | 96,060 | $ | 141,776 | (32) | % |
Amounts Attributable to Federated Hermes, Inc. | ||||||
Earnings Per Share1
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||||||
Basic and diluted | $ | 1.12 | $ | 1.59 | (30) | % |
Weighted-Average Shares Outstanding | ||||||
Basic | 80,367 | 84,902 | ||||
Diluted | 80,368 | 84,907 | ||||
Dividends Declared Per Share | $ | 1.59 | $ | 0.55 |
Federated Hermes reports Q2 2024 earnings
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Federated Hermes reports Q2 2024 earnings
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Page 8 of 13
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Unaudited Changes in Long-Term Assets - By Asset Class | ||||||||||
(in millions) | Quarter Ended | Six Months Ended | ||||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||
Equity | ||||||||||
Beginning assets | $ | 80,157 | $ | 79,291 | $ | 83,629 | $ | 79,291 | $ | 81,523 |
Sales1
|
3,811 | 3,915 | 4,869 | 7,726 | 10,500 | |||||
Redemptions1
|
(7,071) | (7,351) | (5,697) | (14,422) | (10,433) | |||||
Net sales (redemptions)1
|
(3,260) | (3,436) | (828) | (6,696) | 67 | |||||
Net exchanges | 9 | 5 | 5 | 14 | 108 | |||||
Impact of foreign exchange2
|
12 | (567) | 71 | (555) | 179 | |||||
Market gains and (losses)3
|
933 | 4,864 | 115 | 5,797 | 1,115 | |||||
Ending assets | $ | 77,851 | $ | 80,157 | $ | 82,992 | $ | 77,851 | $ | 82,992 |
Fixed Income | ||||||||||
Beginning assets | $ | 96,325 | $ | 94,920 | $ | 87,461 | $ | 94,920 | $ | 86,743 |
Sales1
|
5,262 | 6,583 | 4,891 | 11,845 | 10,938 | |||||
Redemptions1
|
(6,699) | (5,395) | (4,963) | (12,094) | (12,090) | |||||
Net sales (redemptions)1
|
(1,437) | 1,188 | (72) | (249) | (1,152) | |||||
Net exchanges | (179) | (7) | 6 | (186) | (95) | |||||
Impact of foreign exchange2
|
(8) | (71) | 43 | (79) | 81 | |||||
Market gains and (losses)3
|
593 | 295 | (13) | 888 | 1,848 | |||||
Ending assets | $ | 95,294 | $ | 96,325 | $ | 87,425 | $ | 95,294 | $ | 87,425 |
Alternative/Private Markets | ||||||||||
Beginning assets | $ | 20,465 | $ | 20,551 | $ | 21,174 | $ | 20,551 | $ | 20,802 |
Sales1
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647 | 761 | 643 | 1,408 | 1,908 | |||||
Redemptions1
|
(1,177) | (740) | (745) | (1,917) | (1,537) | |||||
Net sales (redemptions)1
|
(530) | 21 | (102) | (509) | 371 | |||||
Net exchanges | 174 | 2 | (4) | 176 | (3) | |||||
Impact of foreign exchange2
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21 | (226) | 539 | (205) | 907 | |||||
Market gains and (losses)3
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(69) | 117 | (5) | 48 | (475) | |||||
Ending assets | $ | 20,061 | $ | 20,465 | $ | 21,602 | $ | 20,061 | $ | 21,602 |
Multi-asset | ||||||||||
Beginning assets | $ | 2,928 | $ | 2,867 | $ | 2,973 | $ | 2,867 | $ | 2,989 |
Sales1
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42 | 44 | 33 | 86 | 80 | |||||
Redemptions1
|
(113) | (112) | (143) | (225) | (287) | |||||
Net sales (redemptions)1
|
(71) | (68) | (110) | (139) | (207) | |||||
Net exchanges | 1 | 0 | 1 | 1 | 3 | |||||
Market gains and (losses)3
|
18 | 129 | 58 | 147 | 137 | |||||
Ending assets | $ | 2,876 | $ | 2,928 | $ | 2,922 | $ | 2,876 | $ | 2,922 |
Total Long-term Assets | ||||||||||
Beginning assets | $ | 199,875 | $ | 197,629 | $ | 195,237 | $ | 197,629 | $ | 192,057 |
Sales1
|
9,762 | 11,303 | 10,436 | 21,065 | 23,426 | |||||
Redemptions1
|
(15,060) | (13,598) | (11,548) | (28,658) | (24,347) | |||||
Net sales (redemptions)1
|
(5,298) | (2,295) | (1,112) | (7,593) | (921) | |||||
Net exchanges | 5 | 0 | 8 | 5 | 13 | |||||
Impact of foreign exchange2
|
25 | (864) | 653 | (839) | 1,167 | |||||
Market gains and (losses)3
|
1,475 | 5,405 | 155 | 6,880 | 2,625 | |||||
Ending assets | $ | 196,082 | $ | 199,875 | $ | 194,941 | $ | 196,082 | $ | 194,941 |
Federated Hermes reports Q2 2024 earnings
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Unaudited Changes in Long-Term Assets - By Asset Class and Product Type
|
||||||||||||||||||||
(in millions)
|
||||||||||||||||||||
Quarter Ended
|
||||||||||||||||||||
June 30, 2024 | ||||||||||||||||||||
Equity | Fixed Income | Alternative / Private Markets | Multi-asset | Total | ||||||||||||||||
Funds |
Separate Accounts1
|
Funds |
Separate Accounts1
|
Funds |
Separate Accounts1
|
Funds |
Separate Accounts1
|
Funds.
|
Separate Accounts1
|
|||||||||||
Beginning assets | $ | 43,415 | $ | 36,742 | $ | 44,481 | $ | 51,844 | $ | 12,458 | $ | 8,007 | $ | 2,789 | $ | 139 | $ | 103,143 | $ | 96,732 |
Sales | 2,413 | 1,398 | 3,326 | 1,936 | 537 | 110 | 42 | 0 | 6,318 | 3,444 | ||||||||||
Redemptions | (3,594) | (3,477) | (3,957) | (2,742) | (1,098) | (79) | (108) | (5) | (8,757) | (6,303) | ||||||||||
Net sales (redemptions) | (1,181) | (2,079) | (631) | (806) | (561) | 31 | (66) | (5) | (2,439) | (2,859) | ||||||||||
Net exchanges | 9 | 0 | (178) | (1) | 174 | 0 | 1 | 0 | 6 | (1) | ||||||||||
Impact of foreign exchange2
|
(11) | 23 | (1) | (7) | 7 | 14 | 0 | 0 | (5) | 30 | ||||||||||
Market gains and (losses)3
|
172 | 761 | 171 | 422 | 180 | (249) | 19 | (1) | 542 | 933 | ||||||||||
Ending assets | $ | 42,404 | $ | 35,447 | $ | 43,842 | $ | 51,452 | $ | 12,258 | $ | 7,803 | $ | 2,743 | $ | 133 | $ | 101,247 | $ | 94,835 |
Six Months Ended
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June 30, 2024 | ||||||||||||||||||||
Equity | Fixed Income | Alternative / Private Markets | Multi-asset | Total | ||||||||||||||||
Funds |
Separate Accounts1
|
Funds |
Separate Accounts1
|
Funds |
Separate Accounts1
|
Funds |
Separate Accounts1
|
Funds |
Separate Accounts1
|
|||||||||||
Beginning assets | $ | 42,513 | $ | 36,778 | $ | 43,908 | $ | 51,012 | $ | 12,379 | $ | 8,172 | $ | 2,730 | $ | 137 | $ | 101,530 | $ | 96,099 |
Sales | 4,832 | 2,894 | 7,375 | 4,470 | 1,191 | 217 | 86 | 0 | 13,484 | 7,581 | ||||||||||
Redemptions | (7,663) | (6,759) | (7,441) | (4,653) | (1,667) | (250) | (216) | (9) | (16,987) | (11,671) | ||||||||||
Net sales (redemptions) | (2,831) | (3,865) | (66) | (183) | (476) | (33) | (130) | (9) | (3,503) | (4,090) | ||||||||||
Net exchanges | 14 | 0 | (183) | (3) | 176 | 0 | 1 | 0 | 8 | (3) | ||||||||||
Impact of foreign exchange2
|
(246) | (309) | (47) | (32) | (132) | (73) | 0 | 0 | (425) | (414) | ||||||||||
Market gains and (losses)3
|
2,954 | 2,843 | 230 | 658 | 311 | (263) | 142 | 5 | 3,637 | 3,243 | ||||||||||
Ending assets | $ | 42,404 | $ | 35,447 | $ | 43,842 | $ | 51,452 | $ | 12,258 | $ | 7,803 | $ | 2,743 | $ | 133 | $ | 101,247 | $ | 94,835 |
Federated Hermes reports Q2 2024 earnings
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Unaudited Changes in Long-Term Assets - By Product Type
|
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(in millions)
|
Quarter Ended | Six Months Ended | ||||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||
Total Fund Assets | ||||||||||
Beginning assets | $ | 103,143 | $ | 101,530 | $ | 104,220 | $ | 101,530 | $ | 102,423 |
Sales | 6,318 | 7,166 | 6,462 | 13,484 | 14,779 | |||||
Redemptions | (8,757) | (8,230) | (7,916) | (16,987) | (16,407) | |||||
Net sales (redemptions) | (2,439) | (1,064) | (1,454) | (3,503) | (1,628) | |||||
Net exchanges | 6 | 2 | (5) | 8 | 10 | |||||
Impact of foreign exchange1
|
(5) | (420) | 487 | (425) | 821 | |||||
Market gains and (losses)2
|
542 | 3,095 | 1,139 | 3,637 | 2,761 | |||||
Ending assets | $ | 101,247 | $ | 103,143 | $ | 104,387 | $ | 101,247 | $ | 104,387 |
Total Separate Account Assets3
|
||||||||||
Beginning assets | $ | 96,732 | $ | 96,099 | $ | 91,017 | $ | 96,099 | $ | 89,634 |
Sales4
|
3,444 | 4,137 | 3,974 | 7,581 | 8,647 | |||||
Redemptions4
|
(6,303) | (5,368) | (3,632) | (11,671) | (7,940) | |||||
Net sales (redemptions)4
|
(2,859) | (1,231) | 342 | (4,090) | 707 | |||||
Net exchanges | (1) | (2) | 13 | (3) | 3 | |||||
Impact of foreign exchange1
|
30 | (444) | 166 | (414) | 346 | |||||
Market gains and (losses)2
|
933 | 2,310 | (984) | 3,243 | (136) | |||||
Ending assets | $ | 94,835 | $ | 96,732 | $ | 90,554 | $ | 94,835 | $ | 90,554 |
Total Long-term Assets3
|
||||||||||
Beginning assets | $ | 199,875 | $ | 197,629 | $ | 195,237 | $ | 197,629 | $ | 192,057 |
Sales4
|
9,762 | 11,303 | 10,436 | 21,065 | 23,426 | |||||
Redemptions4
|
(15,060) | (13,598) | (11,548) | (28,658) | (24,347) | |||||
Net sales (redemptions)4
|
(5,298) | (2,295) | (1,112) | (7,593) | (921) | |||||
Net exchanges | 5 | 0 | 8 | 5 | 13 | |||||
Impact of foreign exchange1
|
25 | (864) | 653 | (839) | 1,167 | |||||
Market gains and (losses)2
|
1,475 | 5,405 | 155 | 6,880 | 2,625 | |||||
Ending assets | $ | 196,082 | $ | 199,875 | $ | 194,941 | $ | 196,082 | $ | 194,941 |
Federated Hermes reports Q2 2024 earnings
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Unaudited Managed Assets | ||||||||||
(in millions)
|
June 30, 2024 | March 31, 2024 | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | |||||
By Asset Class | ||||||||||
Equity | $ | 77,851 | $ | 80,157 | $ | 79,291 | $ | 77,315 | $ | 82,992 |
Fixed-income | 95,294 | 96,325 | 94,920 | 89,765 | 87,425 | |||||
Alternative / private markets | 20,061 | 20,465 | 20,551 | 20,337 | 21,602 | |||||
Multi-asset | 2,876 | 2,928 | 2,867 | 2,728 | 2,922 | |||||
Total long-term assets | 196,082 | 199,875 | 197,629 | 190,145 | 194,941 | |||||
Money market | 586,647 | 578,811 | 559,993 | 525,085 | 509,017 | |||||
Total Managed Assets | $ | 782,729 | $ | 778,686 | $ | 757,622 | $ | 715,230 | $ | 703,958 |
By Product Type | ||||||||||
Funds: | ||||||||||
Equity | $ | 42,404 | $ | 43,415 | $ | 42,513 | $ | 40,801 | $ | 44,383 |
Fixed-income | 43,842 | 44,481 | 43,908 | 42,569 | 43,884 | |||||
Alternative / private markets | 12,258 | 12,458 | 12,379 | 12,409 | 13,338 | |||||
Multi-asset | 2,743 | 2,789 | 2,730 | 2,599 | 2,782 | |||||
Total long-term assets | 101,247 | 103,143 | 101,530 | 98,378 | 104,387 | |||||
Money market | 425,627 | 417,102 | 406,166 | 384,896 | 364,014 | |||||
Total Fund Assets | $ | 526,874 | $ | 520,245 | $ | 507,696 | $ | 483,274 | $ | 468,401 |
Separate Accounts: | ||||||||||
Equity | $ | 35,447 | $ | 36,742 | $ | 36,778 | $ | 36,514 | $ | 38,609 |
Fixed-income | 51,452 | 51,844 | 51,012 | 47,196 | 43,541 | |||||
Alternative / private markets | 7,803 | 8,007 | 8,172 | 7,928 | 8,264 | |||||
Multi-asset | 133 | 139 | 137 | 129 | 140 | |||||
Total long-term assets | 94,835 | 96,732 | 96,099 | 91,767 | 90,554 | |||||
Money market | 161,020 | 161,709 | 153,827 | 140,189 | 145,003 | |||||
Total Separate Account Assets | $ | 255,855 | $ | 258,441 | $ | 249,926 | $ | 231,956 | $ | 235,557 |
Total Managed Assets | $ | 782,729 | $ | 778,686 | $ | 757,622 | $ | 715,230 | $ | 703,958 |
Federated Hermes reports Q2 2024 earnings
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Page 12 of 13
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Unaudited Average Managed Assets | Quarter Ended | |||||||||
(in millions)
|
June 30, 2024 | March 31, 2024 | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | |||||
By Asset Class | ||||||||||
Equity | $ | 78,137 | $ | 78,969 | $ | 76,009 | $ | 82,203 | $ | 83,025 |
Fixed-income | 95,484 | 95,791 | 91,927 | 88,677 | 87,504 | |||||
Alternative / private markets | 20,306 | 20,485 | 20,623 | 21,413 | 21,411 | |||||
Multi-asset | 2,889 | 2,874 | 2,744 | 2,861 | 2,929 | |||||
Total long-term assets | 196,816 | 198,119 | 191,303 | 195,154 | 194,869 | |||||
Money market | 582,758 | 578,383 | 536,727 | 516,046 | 510,418 | |||||
Total Avg. Managed Assets | $ | 779,574 | $ | 776,502 | $ | 728,030 | $ | 711,200 | $ | 705,287 |
By Product Type | ||||||||||
Funds: | ||||||||||
Equity | $ | 42,274 | $ | 42,355 | $ | 40,296 | $ | 43,687 | $ | 44,218 |
Fixed-income | 43,910 | 43,857 | 42,705 | 43,437 | 43,827 | |||||
Alternative / private markets | 12,331 | 12,377 | 12,571 | 13,184 | 13,181 | |||||
Multi-asset | 2,737 | 2,739 | 2,615 | 2,724 | 2,787 | |||||
Total long-term assets | 101,252 | 101,328 | 98,187 | 103,032 | 104,013 | |||||
Money market | 419,999 | 414,902 | 392,946 | 373,088 | 362,608 | |||||
Total Avg. Fund Assets | $ | 521,251 | $ | 516,230 | $ | 491,133 | $ | 476,120 | $ | 466,621 |
Separate Accounts: | ||||||||||
Equity | $ | 35,863 | $ | 36,614 | $ | 35,713 | $ | 38,516 | $ | 38,807 |
Fixed-income | 51,574 | 51,934 | 49,222 | 45,240 | 43,677 | |||||
Alternative / private markets | 7,975 | 8,108 | 8,052 | 8,229 | 8,230 | |||||
Multi-asset | 152 | 135 | 129 | 137 | 142 | |||||
Total long-term assets | 95,564 | 96,791 | 93,116 | 92,122 | 90,856 | |||||
Money market | 162,759 | 163,481 | 143,781 | 142,958 | 147,810 | |||||
Total Avg. Separate Account Assets | $ | 258,323 | $ | 260,272 | $ | 236,897 | $ | 235,080 | $ | 238,666 |
Total Avg. Managed Assets | $ | 779,574 | $ | 776,502 | $ | 728,030 | $ | 711,200 | $ | 705,287 |
Federated Hermes reports Q2 2024 earnings
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Page 13 of 13
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Unaudited Average Managed Assets | Six Months Ended | |||
(in millions) | June 30, 2024 | June 30, 2023 | ||
By Asset Class | ||||
Equity | $ | 78,553 | $ | 83,590 |
Fixed-income | 95,638 | 87,856 | ||
Alternative / private markets | 20,395 | 21,174 | ||
Multi-asset | 2,882 | 2,971 | ||
Total long-term assets | 197,468 | 195,591 | ||
Money market | 580,570 | 496,751 | ||
Total Avg. Managed Assets | $ | 778,038 | $ | 692,342 |
By Product Type | ||||
Funds: | ||||
Equity | $ | 42,315 | $ | 44,637 |
Fixed-income | 43,884 | 43,893 | ||
Alternative / private markets | 12,354 | 13,121 | ||
Multi-asset | 2,738 | 2,828 | ||
Total long-term assets | 101,291 | 104,479 | ||
Money market | 417,450 | 347,983 | ||
Total Avg. Fund Assets | $ | 518,741 | $ | 452,462 |
Separate Accounts: | ||||
Equity | $ | 36,238 | $ | 38,953 |
Fixed-income | 51,754 | 43,963 | ||
Alternative / private markets | 8,041 | 8,053 | ||
Multi-asset | 144 | 143 | ||
Total long-term assets | 96,177 | 91,112 | ||
Money market | 163,120 | 148,768 | ||
Total Avg. Separate Account Assets | $ | 259,297 | $ | 239,880 |
Total Avg. Managed Assets | $ | 778,038 | $ | 692,342 |