Pennsylvania | 001-14818 | 25-1111467 | ||||||||||||
(State or other jurisdiction | (Commission File Number) | (I.R.S. Employer | ||||||||||||
of incorporation) | Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Class B common stock, no par value | FHI | New York Stock Exchange |
Emerging growth company | ☐ |
Earnings press release issued by Federated Hermes, Inc. dated April 25, 2024 |
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Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
FEDERATED HERMES, INC. | ||||||||||||||
(REGISTRANT) | ||||||||||||||
Date | April 25, 2024 | By: | /s/ Thomas R. Donahue | |||||||||||
Thomas R. Donahue | ||||||||||||||
Chief Financial Officer |
MEDIA: | MEDIA: | ANALYSTS: | ||||||
Ed Costello 412-288-7538 | Meghan McAndrew 412-288-8103 | Ray Hanley 412-288-1920 |
Federated Hermes reports Q1 2024 earnings |
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Federated Hermes reports Q1 2024 earnings |
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Federated Hermes reports Q1 2024 earnings |
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Unaudited Condensed Consolidated Statements of Income | ||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
Quarter Ended | % Change Q1 2023 to Q1 2024 | Quarter Ended | % Change Q4 2023 to Q1 2024 | |||||||||||||||||
March 31, 2024 | March 31, 2023 | Dec. 31, 2023 | ||||||||||||||||||
Revenue | ||||||||||||||||||||
Investment advisory fees, net | $ | 264,294 | $ | 263,982 | 0 | % | $ | 264,693 | 0 | % | ||||||||||
Administrative service fees, net—affiliates | 94,786 | 79,180 | 20 | 90,930 | 4 | |||||||||||||||
Other service fees, net | 37,291 | 39,027 | (4) | 35,874 | 4 | |||||||||||||||
Total Revenue | 396,371 | 382,189 | 4 | 391,497 | 1 | |||||||||||||||
Operating Expenses | ||||||||||||||||||||
Compensation and related | 136,546 | 136,878 | 0 | 127,504 | 7 | |||||||||||||||
Distribution | 94,894 | 93,333 | 2 | 90,940 | 4 | |||||||||||||||
Systems and communications | 21,823 | 19,972 | 9 | 20,944 | 4 | |||||||||||||||
Professional service fees | 18,352 | 16,220 | 13 | 16,632 | 10 | |||||||||||||||
Office and occupancy | 9,969 | 12,874 | (23) | 10,159 | (2) | |||||||||||||||
Advertising and promotional | 4,306 | 4,342 | (1) | 9,684 | (56) | |||||||||||||||
Travel and related | 3,273 | 3,231 | 1 | 4,308 | (24) | |||||||||||||||
Intangible asset related | 3,235 | 3,326 | (3) | 3,676 | (12) | |||||||||||||||
Other | 5,392 | 6,847 | (21) | 5,080 | 6 | |||||||||||||||
Total Operating Expenses | 297,790 | 297,023 | 0 | 288,927 | 3 | |||||||||||||||
Operating Income | 98,581 | 85,166 | 16 | 102,570 | (4) | |||||||||||||||
Nonoperating Income (Expenses) | ||||||||||||||||||||
Investment income (loss), net | 8,483 | 10,312 | (18) | 17,418 | (51) | |||||||||||||||
Debt expense | (3,149) | (3,125) | 1 | (3,142) | 0 | |||||||||||||||
Other, net | 103 | 122 | (16) | 461 | (78) | |||||||||||||||
Total Nonoperating Income (Expenses), net | 5,437 | 7,309 | (26) | 14,737 | (63) | |||||||||||||||
Income before income taxes | 104,018 | 92,475 | 12 | 117,307 | (11) | |||||||||||||||
Income tax provision | 29,008 | 21,009 | 38 | 31,260 | (7) | |||||||||||||||
Net income including the noncontrolling interests in subsidiaries | 75,010 | 71,466 | 5 | 86,047 | (13) | |||||||||||||||
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries | (23) | 1,865 | (101) | 3,869 | (101) | |||||||||||||||
Net Income | $ | 75,033 | $ | 69,601 | 8 | % | $ | 82,178 | (9) | % | ||||||||||
Amounts Attributable to Federated Hermes, Inc. | ||||||||||||||||||||
Earnings Per Share1 |
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Basic and diluted | $ | 0.89 | $ | 0.78 | 14 | % | $ | 0.96 | (7) | % | ||||||||||
Weighted-Average Shares Outstanding | ||||||||||||||||||||
Basic | 80,709 | 84,875 | 81,961 | |||||||||||||||||
Diluted | 80,710 | 84,875 | 81,973 | |||||||||||||||||
Dividends Declared Per Share | $ | 0.28 | $ | 0.27 | $ | 0.28 |
Federated Hermes reports Q1 2024 earnings |
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Unaudited Condensed Consolidated Balance Sheets | ||||||||
(in thousands) | March 31, 2024 | Dec. 31, 2023 | ||||||
Assets | ||||||||
Cash and other investments | $ | 558,532 | $ | 560,675 | ||||
Other current assets | 161,124 | 160,054 | ||||||
Intangible assets, net, including goodwill | 1,210,073 | 1,216,605 | ||||||
Other long-term assets | 157,243 | 164,510 | ||||||
Total Assets | $ | 2,086,972 | $ | 2,101,844 | ||||
Liabilities, Redeemable Noncontrolling Interests and Equity | ||||||||
Current liabilities | $ | 212,499 | $ | 287,343 | ||||
Long-term debt | 347,909 | 347,843 | ||||||
Other long-term liabilities | 306,007 | 312,561 | ||||||
Redeemable noncontrolling interests | 73,130 | 25,845 | ||||||
Equity excluding treasury stock | 1,695,050 | 1,649,655 | ||||||
Treasury stock | (547,623) | (521,403) | ||||||
Total Liabilities, Redeemable Noncontrolling Interests and Equity | $ | 2,086,972 | $ | 2,101,844 |
Federated Hermes reports Q1 2024 earnings |
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Unaudited Changes in Long-Term Assets - By Asset Class | |||||||||||
(in millions) | Quarter Ended | ||||||||||
March 31, 2024 | Dec. 31, 2023 | March 31, 2023 | |||||||||
Equity | |||||||||||
Beginning assets | $ | 79,291 | $ | 77,315 | $ | 81,523 | |||||
Sales1 |
3,915 | 3,335 | 5,631 | ||||||||
Redemptions1 |
(7,351) | (8,005) | (4,736) | ||||||||
Net sales (redemptions)1 |
(3,436) | (4,670) | 895 | ||||||||
Net exchanges | 5 | (6) | 103 | ||||||||
Impact of foreign exchange2 |
(567) | 891 | 108 | ||||||||
Market gains and (losses)3 |
4,864 | 5,761 | 1,000 | ||||||||
Ending assets | $ | 80,157 | $ | 79,291 | $ | 83,629 | |||||
Fixed Income | |||||||||||
Beginning assets | $ | 94,920 | $ | 89,765 | $ | 86,743 | |||||
Sales1 |
6,583 | 7,594 | 6,047 | ||||||||
Redemptions1 |
(5,395) | (6,669) | (7,127) | ||||||||
Net sales (redemptions)1 |
1,188 | 925 | (1,080) | ||||||||
Net exchanges | (7) | 7 | (101) | ||||||||
Impact of foreign exchange2 |
(71) | 143 | 38 | ||||||||
Market gains and (losses)3 |
295 | 4,080 | 1,861 | ||||||||
Ending assets | $ | 96,325 | $ | 94,920 | $ | 87,461 | |||||
Alternative/Private Markets | |||||||||||
Beginning assets | $ | 20,551 | $ | 20,337 | $ | 20,802 | |||||
Sales1 |
761 | 700 | 1,265 | ||||||||
Redemptions1 |
(740) | (755) | (792) | ||||||||
Net sales (redemptions)1 |
21 | (55) | 473 | ||||||||
Net exchanges | 2 | (3) | 1 | ||||||||
Impact of foreign exchange2 |
(226) | 836 | 368 | ||||||||
Market gains and (losses)3 |
117 | (564) | (470) | ||||||||
Ending assets | $ | 20,465 | $ | 20,551 | $ | 21,174 | |||||
Multi-asset | |||||||||||
Beginning assets | $ | 2,867 | $ | 2,728 | $ | 2,989 | |||||
Sales1 |
44 | 34 | 47 | ||||||||
Redemptions1 |
(112) | (142) | (144) | ||||||||
Net sales (redemptions)1 |
(68) | (108) | (97) | ||||||||
Net exchanges | 0 | 8 | 2 | ||||||||
Market gains and (losses)3 |
129 | 239 | 79 | ||||||||
Ending assets | $ | 2,928 | $ | 2,867 | $ | 2,973 | |||||
Total Long-term Assets | |||||||||||
Beginning assets | $ | 197,629 | $ | 190,145 | $ | 192,057 | |||||
Sales1 |
11,303 | 11,663 | 12,990 | ||||||||
Redemptions1 |
(13,598) | (15,571) | (12,799) | ||||||||
Net sales (redemptions)1 |
(2,295) | (3,908) | 191 | ||||||||
Net exchanges | 0 | 6 | 5 | ||||||||
Impact of foreign exchange2 |
(864) | 1,870 | 514 | ||||||||
Market gains and (losses)3 |
5,405 | 9,516 | 2,470 | ||||||||
Ending assets | $ | 199,875 | $ | 197,629 | $ | 195,237 |
Federated Hermes reports Q1 2024 earnings |
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Unaudited Changes in Long-Term Assets - By Asset Class and Product Type | ||||||||||||||||||||||||||||||||
(in millions) |
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Quarter Ended |
||||||||||||||||||||||||||||||||
March 31, 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 |
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Beginning assets | $ | 42,513 | $ | 36,778 | $ | 43,908 | $ | 51,012 | $ | 12,379 | $ | 8,172 | $ | 2,730 | $ | 137 | $ | 101,530 | $ | 96,099 | ||||||||||||
Sales | 2,419 | 1,496 | 4,049 | 2,534 | 654 | 107 | 44 | 0 | 7,166 | 4,137 | ||||||||||||||||||||||
Redemptions | (4,069) | (3,282) | (3,484) | (1,911) | (569) | (171) | (108) | (4) | (8,230) | (5,368) | ||||||||||||||||||||||
Net sales (redemptions) | (1,650) | (1,786) | 565 | 623 | 85 | (64) | (64) | (4) | (1,064) | (1,231) | ||||||||||||||||||||||
Net exchanges | 5 | 0 | (5) | (2) | 2 | 0 | 0 | 0 | 2 | (2) | ||||||||||||||||||||||
Impact of foreign exchange2 |
(235) | (332) | (46) | (25) | (139) | (87) | 0 | 0 | (420) | (444) | ||||||||||||||||||||||
Market gains and (losses)3 |
2,782 | 2,082 | 59 | 236 | 131 | (14) | 123 | 6 | 3,095 | 2,310 | ||||||||||||||||||||||
Ending assets | $ | 43,415 | $ | 36,742 | $ | 44,481 | $ | 51,844 | $ | 12,458 | $ | 8,007 | $ | 2,789 | $ | 139 | $ | 103,143 | $ | 96,732 | ||||||||||||
Federated Hermes reports Q1 2024 earnings |
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Unaudited Changes in Long-Term Assets - By Product Type |
|||||||||||
(in millions) |
Quarter Ended | ||||||||||
March 31, 2024 | Dec. 31, 2023 | March 31, 2023 | |||||||||
Total Fund Assets | |||||||||||
Beginning assets | $ | 101,530 | $ | 98,378 | $ | 102,423 | |||||
Sales | 7,166 | 5,999 | 8,317 | ||||||||
Redemptions | (8,230) | (9,578) | (8,491) | ||||||||
Net sales (redemptions) | (1,064) | (3,579) | (174) | ||||||||
Net exchanges | 2 | (7) | 15 | ||||||||
Impact of foreign exchange1 |
(420) | 1,002 | 334 | ||||||||
Market gains and (losses)2 |
3,095 | 5,736 | 1,622 | ||||||||
Ending assets | $ | 103,143 | $ | 101,530 | $ | 104,220 | |||||
Total Separate Account Assets3 |
|||||||||||
Beginning assets | $ | 96,099 | $ | 91,767 | $ | 89,634 | |||||
Sales4 |
4,137 | 5,664 | 4,673 | ||||||||
Redemptions4 |
(5,368) | (5,993) | (4,308) | ||||||||
Net sales (redemptions)4 |
(1,231) | (329) | 365 | ||||||||
Net exchanges | (2) | 13 | (10) | ||||||||
Impact of foreign exchange1 |
(444) | 868 | 180 | ||||||||
Market gains and (losses)2 |
2,310 | 3,780 | 848 | ||||||||
Ending assets | $ | 96,732 | $ | 96,099 | $ | 91,017 | |||||
Total Long-term Assets3 |
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Beginning assets | $ | 197,629 | $ | 190,145 | $ | 192,057 | |||||
Sales4 |
11,303 | 11,663 | 12,990 | ||||||||
Redemptions4 |
(13,598) | (15,571) | (12,799) | ||||||||
Net sales (redemptions)4 |
(2,295) | (3,908) | 191 | ||||||||
Net exchanges | 0 | 6 | 5 | ||||||||
Impact of foreign exchange1 |
(864) | 1,870 | 514 | ||||||||
Market gains and (losses)2 |
5,405 | 9,516 | 2,470 | ||||||||
Ending assets | $ | 199,875 | $ | 197,629 | $ | 195,237 |
Federated Hermes reports Q1 2024 earnings |
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Unaudited Managed Assets | |||||||||||||||||
(in millions)
|
March 31, 2024 | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||||
By Asset Class | |||||||||||||||||
Equity | $ | 80,157 | $ | 79,291 | $ | 77,315 | $ | 82,992 | $ | 83,629 | |||||||
Fixed-income | 96,325 | 94,920 | 89,765 | 87,425 | 87,461 | ||||||||||||
Alternative / private markets | 20,465 | 20,551 | 20,337 | 21,602 | 21,174 | ||||||||||||
Multi-asset | 2,928 | 2,867 | 2,728 | 2,922 | 2,973 | ||||||||||||
Total long-term assets | 199,875 | 197,629 | 190,145 | 194,941 | 195,237 | ||||||||||||
Money market | 578,811 | 559,993 | 525,085 | 509,017 | 505,800 | ||||||||||||
Total Managed Assets | $ | 778,686 | $ | 757,622 | $ | 715,230 | $ | 703,958 | $ | 701,037 | |||||||
By Product Type | |||||||||||||||||
Funds: | |||||||||||||||||
Equity | $ | 43,415 | $ | 42,513 | $ | 40,801 | $ | 44,383 | $ | 44,732 | |||||||
Fixed-income | 44,481 | 43,908 | 42,569 | 43,884 | 43,616 | ||||||||||||
Alternative / private markets | 12,458 | 12,379 | 12,409 | 13,338 | 13,040 | ||||||||||||
Multi-asset | 2,789 | 2,730 | 2,599 | 2,782 | 2,832 | ||||||||||||
Total long-term assets | 103,143 | 101,530 | 98,378 | 104,387 | 104,220 | ||||||||||||
Money market | 417,102 | 406,166 | 384,896 | 364,014 | 357,346 | ||||||||||||
Total Fund Assets | $ | 520,245 | $ | 507,696 | $ | 483,274 | $ | 468,401 | $ | 461,566 | |||||||
Separate Accounts: | |||||||||||||||||
Equity | $ | 36,742 | $ | 36,778 | $ | 36,514 | $ | 38,609 | $ | 38,897 | |||||||
Fixed-income | 51,844 | 51,012 | 47,196 | 43,541 | 43,845 | ||||||||||||
Alternative / private markets | 8,007 | 8,172 | 7,928 | 8,264 | 8,134 | ||||||||||||
Multi-asset | 139 | 137 | 129 | 140 | 141 | ||||||||||||
Total long-term assets | 96,732 | 96,099 | 91,767 | 90,554 | 91,017 | ||||||||||||
Money market | 161,709 | 153,827 | 140,189 | 145,003 | 148,454 | ||||||||||||
Total Separate Account Assets | $ | 258,441 | $ | 249,926 | $ | 231,956 | $ | 235,557 | $ | 239,471 | |||||||
Total Managed Assets | $ | 778,686 | $ | 757,622 | $ | 715,230 | $ | 703,958 | $ | 701,037 |
Federated Hermes reports Q1 2024 earnings |
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Unaudited Average Managed Assets | Quarter Ended | ||||||||||||||||
(in millions) |
March 31, 2024 | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||||
By Asset Class | |||||||||||||||||
Equity | $ | 78,969 | $ | 76,009 | $ | 82,203 | $ | 83,025 | $ | 84,155 | |||||||
Fixed-income | 95,791 | 91,927 | 88,677 | 87,504 | 88,209 | ||||||||||||
Alternative / private markets | 20,485 | 20,623 | 21,413 | 21,411 | 20,938 | ||||||||||||
Multi-asset | 2,874 | 2,744 | 2,861 | 2,929 | 3,012 | ||||||||||||
Total long-term assets | 198,119 | 191,303 | 195,154 | 194,869 | 196,314 | ||||||||||||
Money market | 578,383 | 536,727 | 516,046 | 510,418 | 483,083 | ||||||||||||
Total Avg. Managed Assets | $ | 776,502 | $ | 728,030 | $ | 711,200 | $ | 705,287 | $ | 679,397 | |||||||
By Product Type | |||||||||||||||||
Funds: | |||||||||||||||||
Equity | $ | 42,355 | $ | 40,296 | $ | 43,687 | $ | 44,218 | $ | 45,055 | |||||||
Fixed-income | 43,857 | 42,705 | 43,437 | 43,827 | 43,961 | ||||||||||||
Alternative / private markets | 12,377 | 12,571 | 13,184 | 13,181 | 13,062 | ||||||||||||
Multi-asset | 2,739 | 2,615 | 2,724 | 2,787 | 2,869 | ||||||||||||
Total long-term assets | 101,328 | 98,187 | 103,032 | 104,013 | 104,947 | ||||||||||||
Money market | 414,902 | 392,946 | 373,088 | 362,608 | 333,358 | ||||||||||||
Total Avg. Fund Assets | $ | 516,230 | $ | 491,133 | $ | 476,120 | $ | 466,621 | $ | 438,305 | |||||||
Separate Accounts: | |||||||||||||||||
Equity | $ | 36,614 | $ | 35,713 | $ | 38,516 | $ | 38,807 | $ | 39,100 | |||||||
Fixed-income | 51,934 | 49,222 | 45,240 | 43,677 | 44,248 | ||||||||||||
Alternative / private markets | 8,108 | 8,052 | 8,229 | 8,230 | 7,876 | ||||||||||||
Multi-asset | 135 | 129 | 137 | 142 | 143 | ||||||||||||
Total long-term assets | 96,791 | 93,116 | 92,122 | 90,856 | 91,367 | ||||||||||||
Money market | 163,481 | 143,781 | 142,958 | 147,810 | 149,725 | ||||||||||||
Total Avg. Separate Account Assets | $ | 260,272 | $ | 236,897 | $ | 235,080 | $ | 238,666 | $ | 241,092 | |||||||
Total Avg. Managed Assets | $ | 776,502 | $ | 728,030 | $ | 711,200 | $ | 705,287 | $ | 679,397 |