Federated Hermes (FHI) Q1 2026 earnings summary

Executive summary

• Achieved record assets under management of $907.1 billion as of March 31, 2026, up 8% year-over-year, led by equity and money market growth.

• Equity assets reached $100.8 billion, up 25% year-over-year, with strong MDT strategy sales and $2.2 billion in Q1 net sales.

• Money market assets hit a record $684.7 billion, up 7% year-over-year and $2 billion from year-end.

• Completed acquisition of 80% interest in FCP Fund Manager LP in April 2026, adding $3.2 billion in managed assets and expanding U.S. real estate capabilities.

• Q1 2026 EPS was $1.27, up from $1.25 year-over-year; net income was $96.4 million, down 5% year-over-year.

Financial highlights

• Q1 2026 revenue was $478.96 million, up 13% year-over-year, driven by higher average money market and equity assets.

• Operating expenses increased 21% year-over-year, mainly due to higher distribution and compensation expenses and the absence of a prior-year VAT refund.

• Operating income declined 4% year-over-year to $126.3 million.

• Cash and investments at quarter-end were $645 million; cash and cash equivalents were $513.9 million.

• 1.2 million shares repurchased for $66 million in Q1 2026.

Outlook and guidance

• Management expects continued investment in technology initiatives, with $283 million planned over three years.

• Q2 expected to see $12 million in revenue and $11 million in operating expenses from FCP, with $3.8 million in intangible asset expense.

• Fixed income expected net sales of $1.1 billion in Q2, offset by $800 million in government bond redemptions.

• Equity strategies expected net redemptions of $1.4 billion in Q2, mainly from a $3 billion global equity withdrawal.

• Sufficient liquidity is anticipated to meet both short- and long-term needs, supported by strong cash flow and borrowing capacity.