We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Federated Hermes Q1 Earnings Beat Estimates, AUM Reaches Record Level
Read MoreHide Full Article
Key Takeaways
FHI beats Q1 EPS estimates as revenues climb 13.1% y/y and AUM hit a record $907.1B.
FHI sees strong fee growth, led by advisory and service fees, boosting the overall revenue performance.
FHI faces rising costs, with operating expenses up 20.9%, partially offsetting revenue and AUM growth.
Federated Hermes, Inc.’s (FHI - Free Report) first-quarter 2026 earnings per share of $1.27 topped the Zacks Consensus Estimate of $1.20. The bottom line grew 1.6% from the year-ago quarter.
Higher net investment advisory fees, net administrative service fees and net other service fees are major driving factors. The company also achieved a record level of assets under management (AUM). However, the rise in expenses remained a headwind.
Net income was $96.4 million in the first quarter, down 4.7% from the year-ago quarter.
FHI’s Revenues & Expenses Rise
Total revenues increased 13.1% year over year to $478.96 million. The top line surpassed the Zacks Consensus Estimate by 0.17%.
Quarterly net investment advisory fees rose 11.1% year over year to $319.4 million.
Net other service fees grew 40.9% year over year to $49.3 million, and net administrative service fees rose 9.1% to $110.3 million.
In the first quarter, Federated Hermes derived 54% of its revenues from money-market assets, 45% from long-term assets and 1% from sources other than managed assets.
Total operating expenses increased 20.9% year over year to $352.6 million.
FHI recorded a net non-operating income of $3.4 million, down from $4.3 million in the prior-year quarter.
Federated Hermes’ Balance Sheet Position Solid
As of March 31, 2026, cash and other investments and total long-term debt were $645.4 million and $348.4 million, respectively. This compares to $724.3 million and $348.4 million, respectively, as of Dec. 31, 2025.
FHI’s Asset Position Solid
As of March 31, 2026, total managed assets were at a record level of $907.1 billion, up 8% year over year.
FHI reported record money-market assets of $684.7 billion, up 7% year over year. Fixed-income assets increased marginally to $99.8 billion.
Equity assets of $100.8 billion increased 25% from the prior-year quarter. Alternative/private market assets declined 2% year over year to $19 billion.
Average managed assets totaled $915.6 billion, up 9% year over year.
Federated Hermes’ Capital Distribution Update
The company repurchased 1,191,300 shares of its class B common stock in the reported quarter for $66 million.
Federated Hermes also declared a dividend of 38 cents per share, up 11.8% from the previous quarter. The dividend is payable May 15, 2026, to shareholders of record as of May 8, 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, 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) first-quarter 2026 adjusted earnings of $12.53 per share handily surpassed the Zacks Consensus Estimate of $11.96. The figure reflects a 10.9% rise from the year-ago quarter.
Results benefited from a rise in revenues. The AUM balance witnessed robust year-over-year growth, driven by net inflows. However, higher expenses were a headwind for BLK.
Blackstone’s (BX - Free Report) first-quarter 2026 distributable earnings of $1.36 per share surpassed the Zacks Consensus Estimate of $1.33. The figure grew 25% from the prior-year quarter.
BX’s results benefited from a rise in the AUM balance and higher revenues. However, an increase in GAAP expenses was the undermining factor.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
Federated Hermes Q1 Earnings Beat Estimates, AUM Reaches Record Level
Key Takeaways
Federated Hermes, Inc.’s (FHI - Free Report) first-quarter 2026 earnings per share of $1.27 topped the Zacks Consensus Estimate of $1.20. The bottom line grew 1.6% from the year-ago quarter.
Higher net investment advisory fees, net administrative service fees and net other service fees are major driving factors. The company also achieved a record level of assets under management (AUM). However, the rise in expenses remained a headwind.
Net income was $96.4 million in the first quarter, down 4.7% from the year-ago quarter.
FHI’s Revenues & Expenses Rise
Total revenues increased 13.1% year over year to $478.96 million. The top line surpassed the Zacks Consensus Estimate by 0.17%.
Quarterly net investment advisory fees rose 11.1% year over year to $319.4 million.
Net other service fees grew 40.9% year over year to $49.3 million, and net administrative service fees rose 9.1% to $110.3 million.
In the first quarter, Federated Hermes derived 54% of its revenues from money-market assets, 45% from long-term assets and 1% from sources other than managed assets.
Total operating expenses increased 20.9% year over year to $352.6 million.
FHI recorded a net non-operating income of $3.4 million, down from $4.3 million in the prior-year quarter.
Federated Hermes’ Balance Sheet Position Solid
As of March 31, 2026, cash and other investments and total long-term debt were $645.4 million and $348.4 million, respectively. This compares to $724.3 million and $348.4 million, respectively, as of Dec. 31, 2025.
FHI’s Asset Position Solid
As of March 31, 2026, total managed assets were at a record level of $907.1 billion, up 8% year over year.
FHI reported record money-market assets of $684.7 billion, up 7% year over year. Fixed-income assets increased marginally to $99.8 billion.
Equity assets of $100.8 billion increased 25% from the prior-year quarter. Alternative/private market assets declined 2% year over year to $19 billion.
Average managed assets totaled $915.6 billion, up 9% year over year.
Federated Hermes’ Capital Distribution Update
The company repurchased 1,191,300 shares of its class B common stock in the reported quarter for $66 million.
Federated Hermes also declared a dividend of 38 cents per share, up 11.8% from the previous quarter. The dividend is payable May 15, 2026, to shareholders of record as of May 8, 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, 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 (Strong Buy) stocks here.
Performances of Other Asset Managers
BlackRock’s (BLK - Free Report) first-quarter 2026 adjusted earnings of $12.53 per share handily surpassed the Zacks Consensus Estimate of $11.96. The figure reflects a 10.9% rise from the year-ago quarter.
Results benefited from a rise in revenues. The AUM balance witnessed robust year-over-year growth, driven by net inflows. However, higher expenses were a headwind for BLK.
Blackstone’s (BX - Free Report) first-quarter 2026 distributable earnings of $1.36 per share surpassed the Zacks Consensus Estimate of $1.33. The figure grew 25% from the prior-year quarter.
BX’s results benefited from a rise in the AUM balance and higher revenues. However, an increase in GAAP expenses was the undermining factor.