Federated Hermes, Inc. reports record assets under management with first quarter 2025 earnings

Total assets under management reach a record $839.8 billion Money market assets reach a record $637.1 billion Q1 2025 earnings per diluted share of $1.25 Quarterly dividend increased by 9.7% to $0.34 per share , /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active investing, today reported earnings per diluted share (EPS) of $1.25 for Q1 2025, compared to $0.89 for the same quarter last year, on net income of $101.1 million for Q1 2025, compared to $75.0 million for Q1 2024. Federated Hermes' Q1 2025 results include a $12.9 million decrease in Other operating expense, or $0.15 per diluted share, resulting from a value-added tax (VAT) refund received as part of amended VAT filings in the U.K. Federated Hermes' total managed assets were a record $839.8 billion at March 31, 2025, up $61.1 billion or 8% from $778.7 billion at March 31, 2024 and up $10.2 billion or 1% from $829.6 billion at Dec. 31, 2024. Total average managed assets for Q1 2025 were $843.2 billion, up $66.7 billion or 9% from $776.5 billion reported for Q1 2024 and up $38.8 billion or 5% from $804.4 billion for Q4 2024. "For the 10th consecutive quarter, Federated Hermes reached record assets under management," said J. Christopher Donahue, president and chief executive officer. "Our money market funds and separate accounts continued to see strong inflows as investors sought a haven from market volatility and benefited from the yield advantage generally offered by money market products over bank deposit accounts and some securities in the direct market during the first quarter 2025. We also saw strong demand for a range of our MDT products, including the MDT Market Neutral Fund, which seeks to provide long-term capital appreciation while limiting exposure to general stock market risk. Our MDT strategies historically have offered the opportunity for outperformance driven by a systematic, repeatable process that evaluates companies according to fundamental and technical factors." Federated Hermes' board of directors declared a dividend of $0.34 per share, which was an increase of $0.03 or 9.7% from the previous quarter. The dividend is payable on May 15, 2025 to shareholders of record as of May 8, 2025. During Q1 2025, Federated Hermes purchased 3,057,542 shares of Federated Hermes class B common stock for $120.1 million. Equity assets were $80.9 billion at March 31, 2025, up $0.7 billion or 1% from $80.2 billion at March 31, 2024 and up $1.5 billion or 2% from $79.4 billion at Dec. 31, 2024. Top-selling equity funds during Q1 2025 on a net basis were Federated Hermes MDT Mid Cap Growth Fund, Federated Hermes MDT Large Cap Growth Fund, Federated Hermes MDT Mid Cap Growth Collective Investment Fund, Federated Hermes MDT All Cap Core Fund and Federated Hermes MDT Large Cap Value Fund. Fixed-income assets were $99.5 billion at March 31, 2025, up $3.2 billion or 3% from $96.3 billion at March 31, 2024 and up $1.4 billion or 1% from $98.1 billion at Dec. 31, 2024. Top-selling fixed-income funds during Q1 2025 on a net basis were Federated Hermes Government Ultrashort Bond Fund, Federated Hermes Municipal Ultrashort Fund, Federated Hermes Short-Term Income Fund, Federated Hermes SDG Engagement High Yield Credit Fund and Federated Hermes Conservative Municipal Ultrashort Fund. Alternative/private markets assets were $19.4 billion at March 31, 2025, down $1.1 billion or 5% from $20.5 billion at March 31, 2024 and up $0.5 billion or 3% from $18.9 billion at Dec. 31, 2024. Money market assets were a record $637.1 billion at March 31, 2025, up $58.3 billion or 10% from $578.8 billion at March 31, 2024 and up $6.8 billion or 1% from $630.3 billion at Dec. 31, 2024. Money market fund assets were a record $464.9 billion at March 31, 2025, up $47.8 billion or 11% from $417.1 billion at March 31, 2024 and up $3.2 billion or 1% from $461.7 billion at Dec. 31, 2024. Financial Summary Q1 2025 vs. Q1 2024 Revenue increased $27.2 million or 7% primarily due to an increase in revenue resulting from higher average money market assets, an increase in performance fees and an increase in carried interest, including an increase of $1.5 million of carried interest from consolidated carried interest vehicles, which is largely offset in compensation expense. During Q1 2025, Federated Hermes derived 53% of its revenue from money market assets, 46% from long-term assets (28% from equity, 12% from fixed-income, and 6% from alternative/private markets and multi-asset) and 1% from sources other than managed assets. Operating expenses decreased $6.0 million or 2% primarily due to a $20.0 million decrease in Other expense resulting from a VAT refund received related to amended VAT filings in the U.K. and fluctuations in foreign currency exchange rates, partially offset by a $6.7 million increase in compensation and related expense related to higher incentive compensation and a $4.2 million increase in distribution expenses resulting primarily from higher average managed money market fund assets. Nonoperating income (expenses), net decreased $1.2 million primarily due to a smaller increase in the market value of investments in Q1 2025 compared to the increase in the market value of investments in Q1 2024. Q1 2025 vs. Q4 2024 Revenue decreased $1.1 million primarily due to a decrease in revenue because there were two fewer days in Q1 2025 than in Q4 2024 and a decrease resulting from the lower average total and mix of equity assets. These decreases were partially offset by an increase in revenue from higher average money market assets. Operating expenses decreased $22.5 million or 7% primarily due to a $24.1 million decrease in Other expense resulting from fluctuations in foreign currency exchange rates and the VAT refund received. Nonoperating income (expenses), net increased $2.4 million primarily due to an increase in the market value of investments in Q1 2025 as compared to a decrease in the market value of investments in Q4 2024. Earnings call information Federated Hermes will host an earnings conference call at 9 a.m. Eastern on Friday, April 25, 2025. Investors are invited to listen to the earnings teleconference by calling 888-506-0062 (domestic) or 973-528-0011 (international) prior to the 9 a.m. start time. To listen online, go to the About section of FederatedHermes.com/us at least 15 minutes prior to register and join the call. A replay will be available at approximately 12:30 p.m. Eastern on April 25, 2025. To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 52300. The online replay will be available via FederatedHermes.com/us for one year. About Federated Hermes Federated Hermes, Inc. is a global leader in active investment management, with $839.8 billion in assets under management1. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 10,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has more than 2,000 employees in London, New York, Boston and offices worldwide. Federated Hermes ranks in the top 7% of equity fund managers, the top 8% of money market fund managers and the top 10% of fixed-income fund managers2 in the industry. For more information, including an analyst presentation, which is updated periodically, visit FederatedHermes.com/us. ### 1) As of March 31, 2025.2) Morningstar, March 31, 2025. Based on U.S. fund flows rankings.Federated Securities Corp. is distributor of the Federated Hermes funds.Cautionary statementsCertain statements in this press release, such as those related to performance, investment strategies and uses, investor preferences and demand, asset flows and asset mix constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements can include statements that do not relate strictly to historical or current facts and are typically identified by words or phrases such as "trend," "forecast," "project," "predict," "potential," "approximate," "opportunity," "believe," "expect," "anticipate," "current," "intention," "estimate," "position," "projection," "plan," "assume," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "can," "may" and similar expressions. Any forward-looking statement, and Federated Hermes' level of business activity and financial results, are inherently subject to significant business, market, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond Federated Hermes' control. Other risks and uncertainties include the ability of the company to predict the level of fee waivers and expenses in future quarters, predict whether performance fees or carried interest will be earned and retained, the ability of the company to sustain product demand, the timing and level of product sales and redemptions, market appreciation or depreciation, revenues, and asset levels, flows and mix, which could vary significantly depending on various factors, such as market conditions, investment performance and investor behavior. Other risks and uncertainties include the risk factors discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness, or updating, of such statements in the future. Unaudited Condensed Consolidated Statements of Income (in thousands, except per share data) Quarter Ended %ChangeQ1 2024to Q12025 Quarter Ended %ChangeQ4 2024to Q12025 March 31, 2025 March 31, 2024 Dec. 31, 2024 Revenue Investment advisory fees, net $ 287,460 $ 264,294 9 % $ 288,329 0 % Administrative service fees, net—affiliates 101,109 94,786 7 99,711 1 Other service fees, net 34,971 37,291 (6) 36,643 (5) Total Revenue 423,540 396,371 7 424,683 0 Operating Expenses Compensation and related 143,270 136,546 5 137,165 4 Distribution 99,085 94,894 4 98,070 1 Systems and communications 24,226 21,823 11 23,843 2 Professional service fees 18,548 18,352 1 20,307 (9) Office and occupancy 9,952 9,969 0 10,328 (4) Advertising and promotional 4,576 4,306 6 7,785 (41) Travel and related 3,553 3,273 9 4,058 (12) Intangible asset related 3,196 3,235 (1) 3,230 (1) Other (14,638) 5,392 (371) 9,470 (255) Total Operating Expenses 291,768 297,790 (2) 314,256 (7) Operating Income 131,772 98,581 34 110,427 19 Nonoperating Income (Expenses) Investment income (loss), net 7,475 8,483 (12) 5,037 48 Debt expense (3,179) (3,149) 1 (3,187) 0 Other, net (27) 103 (126) 54 (150) Total Nonoperating Income (Expenses), net 4,269 5,437 (21) 1,904 124 Income before income taxes 136,041 104,018 31 112,331 21 Income tax provision 32,165 29,008 11 28,477 13 Net income including the noncontrolling interests in subsidiaries 103,876 75,010 38 83,854 24 Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries 2,742 (23) NM (862) 418 Net Income $ 101,134 $ 75,033 35 % $ 84,716 19 % Amounts Attributable to Federated Hermes, Inc. Earnings Per Share1 Basic and diluted $ 1.25 $ 0.89 40 % $ 1.04 20 % Weighted-Average Shares Outstanding Basic 77,541 80,709 78,300 Diluted 77,542 80,710 78,300 Dividends Declared Per Share $ 0.31 $ 0.28 $ 0.31 1) Unvested share-based awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of earnings per share under the "two-class method." As such, total net income of $4.5 million, $3.4 million and $3.6 million available to unvested restricted Federated Hermes shareholders for the quarterly periods ended March 31, 2025, March 31, 2024 and Dec. 31, 2024, respectively, was excluded from the computation of earnings per share. Unaudited Condensed Consolidated Balance Sheets (in thousands) March 31, 2025 Dec. 31, 2024 Assets Cash and other investments $ 541,826 $ 641,042 Other current assets 136,748 140,310 Intangible assets, net, including goodwill 1,138,833 1,132,699 Other long-term assets 184,646 170,633 Total Assets $ 2,002,053 $ 2,084,684 Liabilities, Redeemable Noncontrolling Interests and Equity Current liabilities $ 222,993 $ 289,193 Long-term debt 348,171 348,106 Other long-term liabilities 287,557 296,665 Redeemable noncontrolling interests 67,190 55,514 Equity excluding treasury stock 1,817,720 1,728,044 Treasury stock (741,578) (632,838) Total Liabilities, Redeemable Noncontrolling Interests and Equity $ 2,002,053 $ 2,084,684 Unaudited Changes in Long-Term Assets - By Asset Class (in millions) Quarter Ended March 31, 2025 Dec. 31, 2024 March 31, 2024 Equity Beginning assets $ 79,423 $ 83,609 $ 79,291 Sales1 7,412 4,868 3,915 Redemptions1 (5,993) (7,388) (7,351) Net sales (redemptions)1 1,419 (2,520) (3,436) Net exchanges (114) (39) 5 Impact of foreign exchange2 754 (1,313) (567) Market gains and (losses)3 (569) (314) 4,864 Ending assets $ 80,913 $ 79,423 $ 80,157 Fixed Income Beginning assets $ 98,059 $ 100,171 $ 94,920 Sales1 5,944 6,400 6,583 Redemptions1 (6,288) (7,345) (5,395) Net sales (redemptions)1 (344) (945) 1,188 Net exchanges 101 35 (7) Impact of foreign exchange2 85 (160) (71) Market gains and (losses)3 1,585 (1,042) 295 Ending assets $ 99,486 $ 98,059 $ 96,325 Alternative/Private Markets Beginning assets $ 18,864 $ 20,683 $ 20,551 Sales1 1,085 618 761 Redemptions1 (1,024) (1,487) (740) Net sales (redemptions)1 61 (869) 21 Net exchanges 1 (1) 2 Impact of foreign exchange2 532 (1,188) (226) Market gains and (losses)3 (32) 239 117 Ending assets $ 19,426 $ 18,864 $ 20,465 Multi-asset Beginning assets $ 2,883 $ 2,958 $ 2,867 Sales1 63 45 44 Redemptions1 (105) (97) (112) Net sales (redemptions)1 (42) (52) (68) Net exchanges 2 8 0 Market gains and (losses)3 (17) (31) 129 Ending assets $ 2,826 $ 2,883 $ 2,928 Total Long-term Assets Beginning assets $ 199,229 $ 207,421 $ 197,629 Sales1 14,504 11,931 11,303 Redemptions1 (13,410) (16,317) (13,598) Net sales (redemptions)1 1,094 (4,386) (2,295) Net exchanges (10) 3 0 Impact of foreign exchange2 1,371 (2,661) (864) Market gains and (losses)3 967 (1,148) 5,405 Ending assets $ 202,651 $ 199,229 $ 199,875 1) For certain accounts, including separately managed accounts, institutional accounts, certain sub-advised funds and other managed products, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return. 2) Reflects the impact of translating non-U.S. dollar denominated assets under management (AUM) into U.S. dollars for reporting purposes. 3) Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income. Unaudited Changes in Long-Term Assets - By Asset Class and Product Type (in millions) Quarter Ended March 31, 2025 Equity Fixed Income Alternative / PrivateMarkets Multi-asset Total Funds SeparateAccounts1 Funds SeparateAccounts1 Funds SeparateAccounts1 Funds SeparateAccounts1 Funds. SeparateAccounts1 Beginning assets $ 43,752 $ 35,671 $ 45,550 $ 52,509 $ 11,501 $ 7,363 $ 2,764 $ 119 $ 103,567 $ 95,662 Sales 4,715 2,697 3,445 2,499 1,056 29 63 0 9,279 5,225 Redemptions (3,643) (2,350) (4,069) (2,219) (950) (74) (101) (4) (8,763) (4,647) Net sales (redemptions) 1,072 347 (624) 280 106 (45) (38) (4) 516 578 Net exchanges (107) (7) 104 (3) 1 0 2 0 0 (10) Impact of foreign exchange2 338 416 46 39 301 231 0 0 685 686 Market gains and (losses)3 (1,145) 576 724 861 (30) (2) (28) 11 (479) 1,446 Ending assets $ 43,910 $ 37,003 $ 45,800 $ 53,686 $ 11,879 $ 7,547 $ 2,700 $ 126 $ 104,289 $ 98,362 1) Includes separately managed accounts, institutional accounts, certain sub-advised funds and other managed products. For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return. 2) Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. 3) Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income. Unaudited Changes in Long-Term Assets - By Product Type (in millions) Quarter Ended March 31, 2025 Dec. 31, 2024 March 31, 2024 Total Fund Assets Beginning assets $ 103,567 $ 106,799 $ 101,530 Sales 9,279 7,704 7,166 Redemptions (8,763) (8,392) (8,230) Net sales (redemptions) 516 (688) (1,064) Net exchanges 0 4 2 Impact of foreign exchange1 685 (1,372) (420) Market gains and (losses)2 (479) (1,176) 3,095 Ending assets $ 104,289 $ 103,567 $ 103,143 Total Separate Account Assets3 Beginning assets $ 95,662 $ 100,622 $ 96,099 Sales4 5,225 4,227 4,137 Redemptions4 (4,647) (7,925) (5,368) Net sales (redemptions)4 578 (3,698) (1,231) Net exchanges (10) (1) (2) Impact of foreign exchange1 686 (1,289) (444) Market gains and (losses)2 1,446 28 2,310 Ending assets $ 98,362 $ 95,662 $ 96,732 Total Long-term Assets3 Beginning assets $ 199,229 $ 207,421 $ 197,629 Sales4 14,504 11,931 11,303 Redemptions4 (13,410) (16,317) (13,598) Net sales (redemptions)4 1,094 (4,386) (2,295) Net exchanges (10) 3 0 Impact of foreign exchange1 1,371 (2,661) (864) Market gains and (losses)2 967 (1,148) 5,405 Ending assets $ 202,651 $ 199,229 $ 199,875 1) Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. 2) Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income. 3) Includes separately managed accounts, institutional accounts, certain sub-advised funds and other managed products. 4) For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return. Unaudited Managed Assets (in millions) March 31, 2025 Dec. 31, 2024 Sept. 30, 2024 June 30, 2024 March 31, 2024 By Asset Class Equity $ 80,913 $ 79,423 $ 83,609 $ 77,851 $ 80,157 Fixed-income 99,486 98,059 100,171 95,294 96,325 Alternative / private markets 19,426 18,864 20,683 20,061 20,465 Multi-asset 2,826 2,883 2,958 2,876 2,928 Total long-term assets 202,651 199,229 207,421 196,082 199,875 Money market 637,122 630,349 593,030 586,647 578,811 Total Managed Assets $ 839,773 $ 829,578 $ 800,451 $ 782,729 $ 778,686 By Product Type Funds: Equity $ 43,910 $ 43,752 $ 45,391 $ 42,404 $ 43,415 Fixed-income 45,800 45,550 46,027 43,842 44,481 Alternative / private markets 11,879 11,501 12,558 12,258 12,458 Multi-asset 2,700 2,764 2,823 2,743 2,789 Total long-term assets 104,289 103,567 106,799 101,247 103,143 Money market 464,912 461,720 440,397 425,627 417,102 Total Fund Assets $ 569,201 $ 565,287 $ 547,196 $ 526,874 $ 520,245 Separate Accounts: Equity $ 37,003 $ 35,671 $ 38,218 $ 35,447 $ 36,742 Fixed-income 53,686 52,509 54,144 51,452 51,844 Alternative / private markets 7,547 7,363 8,125 7,803 8,007 Multi-asset 126 119 135 133 139 Total long-term assets 98,362 95,662 100,622 94,835 96,732 Money market 172,210 168,629 152,633 161,020 161,709 Total Separate Account Assets $ 270,572 $ 264,291 $ 253,255 $ 255,855 $ 258,441 Total Managed Assets $ 839,773 $ 829,578 $ 800,451 $ 782,729 $ 778,686 Unaudited Average Managed Assets Quarter Ended (in millions) March 31, 2025 Dec. 31, 2024 Sept. 30, 2024 June 30, 2024 March 31, 2024 By Asset Class Equity $ 82,105 $ 82,247 $ 80,220 $ 78,137 $ 78,969 Fixed-income 99,360 98,254 97,563 95,484 95,791 Alternative / private markets 19,012 19,754 20,455 20,306 20,485 Multi-asset 2,900 2,934 2,910 2,889 2,874 Total long-term assets 203,377 203,189 201,148 196,816 198,119 Money market 639,827 601,169 592,304 582,758 578,383 Total Avg. Managed Assets $ 843,204 $ 804,358 $ 793,452 $ 779,574 $ 776,502 By Product Type Funds: Equity $ 45,260 $ 45,261 $ 43,632 $ 42,274 $ 42,355 Fixed-income 45,715 45,654 44,977 43,910 43,857 Alternative / private markets 11,610 12,010 12,451 12,331 12,377 Multi-asset 2,774 2,811 2,775 2,737 2,739 Total long-term assets 105,359 105,736 103,835 101,252 101,328 Money market 463,727 445,775 436,418 419,999 414,902 Total Avg. Fund Assets $ 569,086 $ 551,511 $ 540,253 $ 521,251 $ 516,230 Separate Accounts: Equity $ 36,845 $ 36,986 $ 36,588 $ 35,863 $ 36,614 Fixed-income 53,645 52,600 52,586 51,574 51,934 Alternative / private markets 7,402 7,744 8,004 7,975 8,108 Multi-asset 126 123 135 152 135 Total long-term assets 98,018 97,453 97,313 95,564 96,791 Money market 176,100 155,394 155,886 162,759 163,481 Total Avg. Separate Account Assets $ 274,118 $ 252,847 $ 253,199 $ 258,323 $ 260,272 Total Avg. Managed Assets $ 843,204 $ 804,358 $ 793,452 $ 779,574 $ 776,502 SOURCE Federated Hermes, Inc. 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Federated Hermes, Inc. reports record assets under management with first quarter 2025 earnings

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