SEI (SEIC) Q4 2025: Private Banking Sales Events Surge to $28M, Amplifying Recurring Revenue Momentum
SEI capped 2025 with broad-based margin expansion and record sales events, led by a $28 million surge in private banking net sales. Strategic investments in professional services, SaaS, and advisor partnerships are translating into recurring revenue and upmarket client wins. The company enters 2026 with visible sales momentum, ongoing cost discipline, and a focus on scaling its integrated platform for long-term growth.
Summary
- Private Banking Pipeline Converts: Strategic advisory-led wins drove standout sales events and margin uplift.
- Integrated Platform Drives Margin Expansion: Cost leverage and SaaS adoption improved profitability across segments.
- 2026 Execution Focus: Broad-based sales momentum and operational streamlining set up for continued growth.
Performance Analysis
SEI delivered its highest-ever quarterly earnings per share, with record sales events totaling $44 million and margin expansion across nearly all business segments. The standout was private banking, which contributed $28 million in net sales events, driven by two major mandates that combined core platform and professional services offerings. These wins reflect a deliberate shift toward advisory-led sales, with early-stage client engagement leading to larger, longer-duration contracts and a growing SaaS footprint.
IMS, investment manager services, also posted strong sales events, with more than two-thirds coming from U.S.-based alternative managers—a segment benefiting from secular outsourcing trends. Asset management saw healthy flows in the advisor channel, offsetting institutional client losses and continued mutual fund outflows. Cost discipline was evident, with operating margins expanding despite $20 million in severance and M&A charges, and a targeted 3% workforce reduction implemented to support future-focused investments.
- Sales Event Mix Shift: Professional services and SaaS contracts are increasingly driving recurring revenue streams.
- Cost Structure Reset: Severance and targeted reductions align resources with scalable growth priorities.
- Advisor Channel Expansion: Stratos partnership already generating greater awareness and inbound interest among RIAs and broker-dealers.
Underlying growth in AUM and AUA was supported by strong new business wins and market appreciation, while LSV performance fees and seed investment gains provided additional upside. The company returned $616 million to shareholders via buybacks and completed the Stratos acquisition with balance sheet cash, ending the year debt-free.
Executive Commentary
"What's most exciting is that these results were impressively broad-based, driven by revenue growth and margin expansion across almost all business segments. This was a total FDI effort, not driven by a single business or a one-off event. It's a testament to the power of our integrated approach and the relentless execution from teams across the globe."
Ryan Hickey, Chief Executive Officer
"Overall, 2025 represents an excellent year for SEI, with double-digit earnings growth and more than a full percentage point of operating margin expansion. Strong Q4 performance was broad-based with positive contributions from each business segment, both revenue and operating profit, when measured against both the prior year and prior quarter."
Sean Denham, Chief Financial Officer and Chief Operating Officer
Strategic Positioning
1. Advisory-Led Private Banking Expansion
SEI’s private banking business is evolving from a technology vendor to a strategic platform partner. By engaging clients early in advisory roles, SEI shapes transformation agendas and secures larger, longer-term contracts. The two major Q4 wins originated from 18-month advisory relationships, combining core platform (SWP) and professional services, and one represents the firm’s second SaaS client, highlighting traction in recurring, high-margin revenue streams.
2. IMS: Outsourcing Tailwinds and Platform Evolution
IMS sales events were robust, with demand from large alternative managers—especially first-time outsourcers—fueling growth. SEI is transitioning IMS from fund-by-fund operations to a platform-level service model, leveraging workflow automation and shared data tooling to efficiently onboard and scale with large clients. This operational shift is designed to capture the accelerating convergence of public and private markets and the industry’s move toward outsourcing non-core activities.
3. Advisor Channel and Stratos Integration
The Stratos partnership, an RIA aggregator and platform provider, is already yielding strategic benefits. SEI gains deeper insight into advisor needs and expands its reach among RIAs and broker-dealers. Integration efforts focus on combining SEI’s technology and investment management with Stratos’ client-centric model, supporting organic growth and broadening distribution for SEI’s investment products, including ETFs and models.
4. Technology and Automation Investment
SEI is committed to scaling through automation and AI, as seen in its investment in Avantos, an AI-native onboarding system. The global capability center initiative aims to support efficient growth and maintain client experience at scale. These technology investments are expected to lower unit costs and open underserved market segments.
5. Disciplined Capital Allocation and Cost Management
Management remains focused on returning 90% to 100% of free cash flow to shareholders, balancing ongoing investments with cost efficiency. The Q4 workforce reduction and ongoing resource reallocation are intended to fund growth while preserving margin expansion targets.
Key Considerations
SEI’s Q4 performance underscores a shift toward higher-quality, recurring revenue and scalable growth levers. The company’s strategic priorities are reflected in both operational execution and capital allocation.
Key Considerations:
- Recurring Revenue Focus: Advisory-led professional services and SaaS contracts are increasing revenue visibility and margin quality.
- Upmarket Client Wins: SEI is successfully moving upmarket, winning larger advisors and expanding its ecosystem approach.
- Advisor Channel Leverage: The Stratos partnership is broadening SEI’s distribution and deepening RIA relationships.
- Cost Discipline Amid Investment: Workforce reductions and resource reallocation are designed to fund technology and growth initiatives without margin erosion.
- Sales Event Variability: Large professional services wins can create uneven quarterly results, but the underlying trend is positive.
Risks
Sales event variability and episodic professional services wins may create quarterly revenue swings, challenging run-rate visibility. Continued mutual fund outflows and institutional client churn, especially in the UK, remain headwinds. Integration of Stratos and realization of cost efficiencies from automation and workforce reductions require disciplined execution to avoid operational disruption. Upside from large alternative manager wins is not guaranteed and depends on pipeline conversion and onboarding success.
Forward Outlook
For Q1 2026, SEI management highlighted:
- Seasonal headwinds from lower LSV performance fees and a higher tax rate.
- Increased compensation expense due to annual raises and hiring to support the sales pipeline.
For full-year 2026, management reiterated its focus on:
- Double-digit earnings growth and consistent margin expansion (no formal EPS guidance provided).
Leadership expects continued momentum from recent pipeline wins, especially in IMS and private banking, with meaningful updates anticipated by the April earnings call. Ongoing cost discipline and scaling of automation and technology investments are expected to support growth and margin objectives.
- Pipeline Conversion: Large alternative manager deals are progressing and may be announced in Q1.
- Stratos Integration: Full financial impact and additional acquisitions to be detailed next quarter.
Takeaways
SEI’s strategic pivot toward advisory-led, recurring revenue is delivering tangible results, with private banking and IMS leading the way. Margin expansion is being achieved alongside disciplined investment in technology and talent, while capital return remains a priority. The company’s integrated platform and advisor channel expansion provide a differentiated growth path, but quarterly results may remain lumpy due to large, episodic sales events.
- Recurring Revenue Momentum: Professional services and SaaS contracts are driving higher-quality, longer-duration revenue streams.
- Cost and Capital Discipline: Workforce reductions and balanced capital allocation are supporting margin expansion and funding growth.
- Pipeline Execution Critical: Conversion of large alternative manager opportunities and Stratos integration will be key watchpoints in 2026.
Conclusion
SEI exits 2025 with strong momentum, underpinned by strategic wins in private banking, IMS, and advisor channels. The focus on scalable, recurring revenue and operational efficiency positions the company for continued growth, but execution on pipeline conversion and integration will define the trajectory in 2026.
Industry Read-Through
SEI’s results highlight intensifying demand for outsourcing among alternative managers and the growing role of advisory-led professional services in wealth and asset management. The convergence of public and private markets, combined with technology-enabled platform models, is reshaping industry economics. Competitors should note SEI’s success in moving upmarket, leveraging SaaS, and deepening advisor channel relationships. The shift toward recurring, platform-based revenue and cost leverage through automation is a blueprint for scalable growth in financial services.