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Federated Hermes Q4 Earnings Beat Estimates, AUM Reaches Record Level
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Key Takeaways
FHI posted Q4 EPS of $1.39, topping estimates as net income rose 26.3% year over year.
FHI revenue rose 13.7% on higher advisory, other service and administrative fees, though expenses increased.
FHI AUM hit a record $902.6B, led by money-market assets at $682.6B and strong equity growth.
Federated Hermes, Inc.’s (FHI - Free Report) fourth-quarter 2025 earnings per share of $1.39 topped the Zacks Consensus Estimate of $1.20 per share. The bottom line grew 33.6% from the year-ago quarter.
Higher net other service fees, net investment advisory fees and net administrative service fees are major driving factors. Record average money-market assets and higher equity assets also supported revenue growth. The company also achieved a record level of assets under management (AUM). However, the rise in expenses remained a headwind.
Net income was $107 million in the fourth quarter, up 26.3% from the year-ago quarter.
In 2025, earnings of $5.13 per share topped the Zacks Consensus Estimate of $4.95. The metric rose from $3.23 in 2024. Net income was $403.3 million in 2025, which jumped 50.3% from the prior year.
FHI’s Revenues & Expenses Rise
Total revenues increased 13.7% year over year to $482.8 million. The top line surpassed the Zacks Consensus Estimate by 2.7%.
For 2025, operating revenue was $1.8 billion, which surpassed the Zacks Consensus Estimate of $1.79 billion. The top line rose 10.3% year over year.
Quarterly net investment advisory fees rose 8.9% year over year to $313.9 million.
Net other service fees grew 61.3% year over year to $59.1 million, and net administrative service fees rose 10.1% year over year to $109.7 million.
Total operating expenses increased 10.5% year over year to $347.2 million.
FHI recorded a net non-operating income of $4.7 million, up from $1.9 million in the prior-year quarter.
Federated Hermes’ Balance Sheet Position Solid
As of Dec. 31, 2025, cash and other investments and total long-term debt were $724.3 million and $348.4 million compared with $647.4 million and $348.3 million, respectively, as of Sept. 30, 2025.
FHI’s Asset Position Solid
As of Dec. 31, 2025, total managed assets were at a record level of $902.6 billion, up 8.8% year over year.
FHI reported a record money-market assets of $682.6 billion, up 8.3% year over year. Fixed-income assets increased 2.1% year over year to $100.1 billion.
Equity assets of $97.9 billion increased 23.3% from the prior-year quarter. Alternative/private market assets increased 1.2% year over year to $19.1 billion.
Average managed assets totaled $873.7 billion, up 8.6% year over year.
Federated Hermes’ Capital Distribution Update
The company repurchased 1,566,901 shares of its class B common stock in the reported quarter.
Federated Hermes also declared a dividend of 34 cents per share. The dividend is payable on Feb. 13, 2026, to shareholders of record as of Feb. 6, 2026.
Our Viewpoint on FHI
Federated Hermes delivered a strong quarter with solid growth in revenues and AUM, supported mainly by its money-market and equity asset segments. Although operating expenses rose, robust revenue growth helped maintain momentum. The balance sheet remains stable with manageable debt and healthy cash/investment positions. Continued asset growth places the firm in a favorable position amid investor demand for liquidity and diversification.
Federated Hermes, Inc. Price, Consensus and EPS Surprise
BlackRock’s (BLK - Free Report) fourth-quarter 2025 adjusted earnings of $13.16 per share handily surpassed the Zacks Consensus Estimate of $12.39. The figure reflects a 10.3% rise from the year-ago quarter.
BLK’s results benefited from a rise in revenues. The AUM balance witnessed robust year-over-year growth, reaching a record high of $14.04 trillion, driven by net inflows. However, higher expenses created a headwind.
Invesco’s (IVZ - Free Report) fourth-quarter 2025 adjusted earnings of 62 cents per share surpassed the Zacks Consensus Estimate of 57 cents. The bottom line increased 19.2% from the prior-year quarter.
The results have been primarily aided by an increase in adjusted revenues. Moreover, growth in the AUM balance to record levels supported the results to an extent. However, an increase in adjusted operating expenses was a headwind for IVZ.
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Federated Hermes Q4 Earnings Beat Estimates, AUM Reaches Record Level
Key Takeaways
Federated Hermes, Inc.’s (FHI - Free Report) fourth-quarter 2025 earnings per share of $1.39 topped the Zacks Consensus Estimate of $1.20 per share. The bottom line grew 33.6% from the year-ago quarter.
Higher net other service fees, net investment advisory fees and net administrative service fees are major driving factors. Record average money-market assets and higher equity assets also supported revenue growth. The company also achieved a record level of assets under management (AUM). However, the rise in expenses remained a headwind.
Net income was $107 million in the fourth quarter, up 26.3% from the year-ago quarter.
In 2025, earnings of $5.13 per share topped the Zacks Consensus Estimate of $4.95. The metric rose from $3.23 in 2024. Net income was $403.3 million in 2025, which jumped 50.3% from the prior year.
FHI’s Revenues & Expenses Rise
Total revenues increased 13.7% year over year to $482.8 million. The top line surpassed the Zacks Consensus Estimate by 2.7%.
For 2025, operating revenue was $1.8 billion, which surpassed the Zacks Consensus Estimate of $1.79 billion. The top line rose 10.3% year over year.
Quarterly net investment advisory fees rose 8.9% year over year to $313.9 million.
Net other service fees grew 61.3% year over year to $59.1 million, and net administrative service fees rose 10.1% year over year to $109.7 million.
Total operating expenses increased 10.5% year over year to $347.2 million.
FHI recorded a net non-operating income of $4.7 million, up from $1.9 million in the prior-year quarter.
Federated Hermes’ Balance Sheet Position Solid
As of Dec. 31, 2025, cash and other investments and total long-term debt were $724.3 million and $348.4 million compared with $647.4 million and $348.3 million, respectively, as of Sept. 30, 2025.
FHI’s Asset Position Solid
As of Dec. 31, 2025, total managed assets were at a record level of $902.6 billion, up 8.8% year over year.
FHI reported a record money-market assets of $682.6 billion, up 8.3% year over year. Fixed-income assets increased 2.1% year over year to $100.1 billion.
Equity assets of $97.9 billion increased 23.3% from the prior-year quarter. Alternative/private market assets increased 1.2% year over year to $19.1 billion.
Average managed assets totaled $873.7 billion, up 8.6% year over year.
Federated Hermes’ Capital Distribution Update
The company repurchased 1,566,901 shares of its class B common stock in the reported quarter.
Federated Hermes also declared a dividend of 34 cents per share. The dividend is payable on Feb. 13, 2026, to shareholders of record as of Feb. 6, 2026.
Our Viewpoint on FHI
Federated Hermes delivered a strong quarter with solid growth in revenues and AUM, supported mainly by its money-market and equity asset segments. Although operating expenses rose, robust revenue growth helped maintain momentum. The balance sheet remains stable with manageable debt and healthy cash/investment positions. Continued asset growth places the firm in a favorable position amid investor demand for liquidity and diversification.
Federated Hermes, Inc. Price, Consensus and EPS Surprise
Federated Hermes, Inc. price-consensus-eps-surprise-chart | Federated Hermes, Inc. Quote
Currently, FHI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performances of Other Asset Managers
BlackRock’s (BLK - Free Report) fourth-quarter 2025 adjusted earnings of $13.16 per share handily surpassed the Zacks Consensus Estimate of $12.39. The figure reflects a 10.3% rise from the year-ago quarter.
BLK’s results benefited from a rise in revenues. The AUM balance witnessed robust year-over-year growth, reaching a record high of $14.04 trillion, driven by net inflows. However, higher expenses created a headwind.
Invesco’s (IVZ - Free Report) fourth-quarter 2025 adjusted earnings of 62 cents per share surpassed the Zacks Consensus Estimate of 57 cents. The bottom line increased 19.2% from the prior-year quarter.
The results have been primarily aided by an increase in adjusted revenues. Moreover, growth in the AUM balance to record levels supported the results to an extent. However, an increase in adjusted operating expenses was a headwind for IVZ.