FHI

Federated Hermes stock has delivered a strong 5 year run, yet the current checks on pricing suggest the shares may now be closer to fair value rather than a clear bargain or an obvious premium. Over 5 years, Federated Hermes has returned 138.0%, which puts recent gains firmly in the context of a long and powerful share price climb. Recent headlines around record asset growth and stronger revenue can support optimistic expectations, while any setback in asset gathering or fee margins may quickly test how much investors are willing to pay for the stock. With a value score of 3 out of 6 and both the Excess Returns intrinsic value estimate and market multiples sitting in the "about right" and "fairly valued" ranges, the overall picture is a mixed one rather than a clear bargain or clear overvaluation. The issue now is whether Federated Hermes offers enough compensation at the current price for investors who are considering adding or increasing exposure after such a strong multi year run. Compare Federated Hermes' strong 5 year climb with other stocks that pair solid fundamentals with valuation support through our hand picked 44 high quality undervalued stocks. The Excess Returns model evaluates how much value Federated Hermes creates over its cost of equity and then capitalises those excess profits into an intrinsic per share value. For Federated Hermes, the model uses a Book Value of $17.54 per share and a Stable EPS of $3.65 per share, both anchored to median levels from the past five years. With a Cost of Equity of $1.15 per share and an Excess Return of $2.50 per share, it reflects an Average Return on Equity of 25.57% on a Stable Book Value of $14.26 per share. These inputs translate into an Excess Returns intrinsic value estimate of $71.37 per share compared with the recent share price of about $63.48. This implies the stock trades at a 9.8% discount. Given that the recent report highlighted record asset growth and a revenue beat, the current price already reflects some optimism yet still shows a modest valuation gap based on this model. On this Excess Returns view, Federated Hermes stock screens as approximately fairly valued with a slight tilt toward being undervalued. Federated Hermes is fairly valued according to our Excess Returns, but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Federated Hermes. P/E is a useful check for Federated Hermes because it directly links what you pay today to the company’s current earnings power. On this measure, Federated Hermes trades on a P/E of 11.7x, which is below the Capital Markets industry average of 38.6x and also below the peer group average of 14.3x. The fair P/E ratio for Federated Hermes is estimated at 11.2x, which is only slightly under the current multiple. That gap is small, so it does not suggest a clear discount or a stretched premium relative to what would be expected given the company’s profile, profitability and risks. On the P/E multiple, Federated Hermes stock appears roughly fairly valued compared with both its tailored fair ratio and broader market peers. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for Federated Hermes pick up where this valuation puzzle leaves off and spell out which paths for Federated Hermes' growth, margins and earnings would support a meaningfully higher or lower price than today. Each narrative links its number to a clear view of how growth, profitability and risk might develop, giving you a reference point you can return to as new information on the company becomes available on the Community page. If you have a number driven view on whether Federated Hermes' record asset growth and recent revenue performance support today's share price, this is a chance to add your voice to the Simply Wall St community. Share a Narrative on Federated Hermes stock and track how your thesis holds up as new results are reported. Do you think there's more to the story for Federated Hermes? Head over to our Community to see what others are saying! For Federated Hermes, the Excess Returns intrinsic value estimate suggests a modest discount to the current share price, while the P/E check points to a result that is close to about right. Together, the signals lean toward roughly fair value rather than a clear mispricing. The key question now is whether Federated Hermes can sustain the business drivers that underpin its recent asset and revenue headlines without pressure on fee margins. That assumption is what will decide whether today’s valuation becomes a platform for further upside or proves to be as generous as the market is prepared to be for now. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FHI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Friday, July 31, 2026 at 9:00 a.m. ET President of Federated Investors Management Company - Raymond J. Hanley President and Chief Executive Officer - John Christopher Donahue Chief Financial Officer - Thomas Robert Donahue Chief Executive Officer of Federated Hermes Limited - Saker Nusseibeh Chief Investment Officer for Money Markets - Deborah Cunningham Need a quote from a Motley Fool analyst? Email [email protected] Operator: Thank you. Greetings. Welcome to the Federated Hermes Q2 Analyst Call and Webcast. At this time, all participants are in a listen-only mode. A Q&A session will follow the formal presentation. If anyone should require operator assistance during the conference, Please note this conference is being recorded. I would now like to turn the conference over to your host, Raymond J. Hanley, President of Federated Investors Management Company. You may begin. Raymond J. Hanley: Thank you. Hello, and welcome. Thank you for joining us today. Leading our call today will be Chris Donahue, CEO and President of Federated Hermes and Tom Donahue, Chief Financial Officer. Joining us for the Q&A are Saker Nusseibeh, the CEO of Federated Hermes Limited and Debbie Cunningham, our chief investment officer for money markets. During today's call, we will make forward looking statements and want to note that our actual results may be materially different than the results implied by such statements. Please review the risk disclosures in our SEC filings. No assurance can be given as to future results and Federated Hermes assumes no duty to update any of these forward looking statements. Chris? John Christopher Donahue: Thank you, Raymond. Good morning, all. I will review Federated Hermes business performance. Tom will comment on financial results. We ended the second quarter with record assets under management of $912 billion, led by growth in equity, and private market assets. Equity assets closed the second quarter at a record high of $110 billion During the second quarter, equity assets increased by $8.8 billion or 9% from the first quarter reflecting solid market value gains. Gross equity sales were $9.1 billion in the second quarter. Just about even with the first quarter's record level. Equity net redemptions in the second quarter were $1.1 billion. Which included the expected global equity sub advisory redemption of $3 billion that we discussed last quarter. Equity sales results were again led by our MDT fundamental quant strategies. MDT equity and market neutral strategies had a record $6 billion of gross sales and over $3.5 billion in net sales in the second quarter. Looking at fund performance rankings, at the end of the second quarter, 6 of 9 MDT fund strategies were in the top performance quartile of their Morningstar categories, for the trailing 3 years. We had net sales in 35 equity fund and SMA strategies during the second quarter. Including a variety of MDT offerings, which contributed $2.7 billion not including market neutral, which we will discuss later, and strategic value, had $470 million. Looking at our equity fund performance at the end of the second quarter, and using Morningstar data, for trailing 3 years 54% of our equity funds were beating peers, and 30% were in the top quartile of their category. For Q3, through July 24, combined equity funds and SMAs had net sales of $61 million. Now turning to fixed income. Assets ended Q2 at just over $100 billion up $689 million Market appreciation added $1 billion and was partially offset by net redemptions and exchanges. We had 26 fixed-income funds and SMAs with net sales in Q2. Led by Core Plus, and Core Ag SMA, Which combined for $190 million. With 3 ultra-short funds that were up a combined $134 million and the conservative Muni MicroShort Fund up almost $100 million. Regarding performance at the end of Q2, and using Morningstar data for the trailing 3 years, 39% of our fixed income funds were beating peers and 19% were in the top quartile of their category. Now for Q3, through July 24, combined fixed income and SMAs had net sales of $362 million. In the alternative private markets category, assets increased $2.6 billion in Q2 to reach $21.6 billion The completion of the acquisition of an 80% interest in FCP Fund Manager LP in early April added $3.2 billion of US multifamily real estate managed assets. The MDT Market Neutral fund and its ETF combined for $150 million in net sales. Now we are in the market with our global private equity co invest fund, which is, of course, the 6 vintage of the PEC, the PEC series, To date, we have closed on $300 million. PEC I to IV raised $400 million to $600 million in each fund, and PEC V raised $500 million. We are also in the market with the European real estate debt fund, which is a new pooled European debt offering. Across our long term investment platform, we began Q3 with about $3.4 billion in net institutional wins yet to fund. Into both funds and separate accounts. Equity strategies are expected to have net sales of about $1.7 billion with MDT additions of $1.6 billion and a global equity additions of about $150 million. Approximately $1.3 billion on a net basis is expected to come in to private market strategies. Including direct lending of about $700 million private equity of $538 million and trade finance of $100 million. Fixed income is expected to have net sales of about $300 million including total return bond low duration and high yield. Now moving on to money markets. Total money market assets decreased by $7.9 billion or about 1%. Money market funds decreased by $2.9 billion or 1% from Q1. Yet we are up almost $32 billion or 7% year over year. After ending 2025 at a record high of $508 billion, Money market fund assets have decreased slightly over the first half of the year to $500 billion at the end of Q2. Money market separate accounts decreased by about $5 billion or 3% similar to last year's Q2 decrease of $5.8 billion Still, these assets were up about $10 billion or 6.4% year over year at the end of Q2. Money market separate account adds assets are impacted by the liquidity levels of the large state pools that we manage and t typically peak with tax collections at year end through mid April before decreasing In Q2 and Q3. Our estimate of money market mutual fund market share including sub advised funds was about 6.7% at the end of Q2. Down from 6.9% at the end of Q1. Now looking back at the last 7.5 years or so, of quarterly money market fund market share changes we gained share in 14 quarters. We lost share. In 14 quarters. With 2 quarters of no change. The average share gain was 0.20. The average share loss was about 0.23. Our money market fund managed assets more than doubled from $208 billion to $500 billion over that period. This is certainly entrepreneurial delight from an owner operator. And, of course, it is important to note that we remain in the top 10 in every category of money market fund managed asset levels in the top 5 in prime and tax free. Now let's talk about digital. Our digital initiatives include the recent launch of money market management digital treasury fund. Which is expected to support both traditional and on chain distribution. The initial reserve shares class provides a non-tokenized, Genius-compliant structure geared to institutional investors and stablecoin issuers seeking investments aligned with stablecoin reserve requirements. We are also developing an on chain share class intended to place intended to place official books and records of that share class on blockchain infrastructure as we implement a digital transfer agency model. This dual track approach offers flexibility between traditional and on chain record keeping models. We have selectively engaged with regulated digital asset intermediaries focusing on tokenized funds as regulated financial instruments. We have previously discussed our participation in the BNY Goldman domestic initiative involving mirrored tokenization. And the Archex initiative to offer tokenized assets to a UCITS money market fund in The UK. We are engaged in the digital asset development discussion with several other intermediaries. These are early stage efforts. Our clients are currently looking more for digital asset information than transaction ability. We expect our engagements with intermediaries to grow as regulations clarify. And as our digital assets platform and product development progress. Now let's look at the recent asset totals as of a few days ago. Managed assets were approximately $899 billion We should have picked the day before, including $665 billion in money markets $109 billion in equities, $100 billion in fixed income, $23 billion in alternative private markets, and $3 billion in multi-asset. Money Market Mutual Fund assets were $490 billion. Money market fund assets have ranged from $490 billion to $501 billion during July with average asset levels of $496 billion. Tom? Thomas Robert Donahue: Thanks, Thank Thanks, Chris. For Q2 compared to the prior quarter, total revenues increased $23.8 million or 5%. The FCP acquisition added about $14 million, $9 million of it in the IAF category, and $5 million in the other service fees. Equity assets asset growth added $7.6 million an additional day added $5.1 million In private markets, Rivington had a $2.9 million gain on sale of a renewable energy property recorded in other service fees. And The UK real estate business had a $2 million real estate development fee for a project that did not advance into construction. Also recorded in other service fees. These increases were partially offset by lower Q2 money market average assets resulting in $8.4 million in lower revenues. Total carried interest and performance fees were $1.4 million compared to $388 thousand in the prior quarter. Approximately $682 thousand of the Q2 fees were offset by compensation expense. Q2 operating expenses increased by $17.3 million or 5% from the prior quarter due mainly to an increase of approximately $9.7 million in transaction costs from the FCP acquisition including $6.5 million of nonrecurring acquisition related compensation and $3.2 million of higher professional service fees, including FCP lender consent fees and other professional service fees. Compensation and related expense, in addition, increased $6.9 million due to FCP's quarterly compensation expense FHI's normal merit increases, and other factors. This was offset by seasonally lower stock based compensation expense of $6 million Higher advertising and promotional activities added $3.2 million as we had our spring advertising campaign. Intangible asset amortization increased $3 million primarily from the FCP acquisition These expense increases were partially offset by lower distribution expense which decreased $4 million due mainly to lower money market fund average assets. In the other expense line item, the Q2 increase was due mainly to FCP property management expense of $2.8 million The combined Q2 impact of the revenue from the Rivington gain on property sale The UK real estate development revenue fee, The FCP acquisition related comp expense, and professional service fees was about $4.7 million of lower net income or about $0.06 per share. The Q2 effective tax rate was 25.8% We estimate the tax rate to be in the 25% to 28% range. For 26. At the end of Q2, cash investments were $481 million Cash investments excluding the portion attributable to non controlling interest or $416 million Holly, we would like to open the call up for questions now. Operator: Thanks, Thank Certainly. At this time, we will be conducting a Q&A session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. 1 moment, please, while we poll for questions. Your first question for today is from Bill Katz with TD Cowen. Robin Holby: Thanks, Thank This is Robin Holby on for Bill Katz and thank you for taking the question. We wanted to ask on fixed income. Gross sales were up nicely quarter over quarter and year over year, while net flows seem to have somewhat stabilized. Has investor interest changed at all with the prospects of higher rates And do you think the strategy can get back to positive net flows in the foreseeable future? John Christopher Donahue: Thanks, Thank Well, the reason we mentioned about the flows right now is that they have gotten exactly there. If you talk about the attitude of our intermediary client base, 1 of the things I would mention is that the end clients have become kind of numb to all the negative geopolitical news and issues. But with interest rates under the worst regime staying the same, What we are seeing is a little more interest in things like as I mentioned, the conservative Microshort and, of course, the ultra short funds. And that bumps a little bit into the money market fund thing as well. So there are no definitive answers. There is no macro answer to that. That is going to take us through the next quarter. We think our products, including our payer ETF, which gives a little higher yield, and the FAs and the clients like that. Has had good response as well. So we think the variety of products out the yield curve the strength of the team, and the investment management will entitle us to positive flows here in the foreseeable future in fixed income. Robin Holby: Thanks, Thank you. that is helpful. And then wanted to follow-up on strategic value. You mentioned it in the prepared remarks, the fund has solid year to date performance. Just maybe how are your conversations with investors tracking there? John Christopher Donahue: Thanks, Thank The investors like the performance. But we do not like being in the category because we are either in the top of it or the bottom of it. And this always attracts the attention of the portfolio manager who just likes doing what he is doing, which is increasing the dividend, growth of dividend, and a dividend. On the other hand, when you look at the ETF also doing well, these are people who come in who have not had the experience of the fund. Who understand exactly what the fund is doing. And so this is a very, very positive thing on both sides. And I would say that the biggest challenge we have is that when those prices of those securities go up, the portfolio managers have to make some maneuvers change them in order to keep the dividends going. That is a good problem. Thank you very much. Operator: Thanks, Thank Your next question is from Kenneth Lee with RBC Capital Markets. Kenneth Lee: Thanks, Thank Hey, good morning, and thanks for taking my question. Just 1 on money market fund assets there. Just given the rate outlook, and the environment there, any updated outlook in terms of potential asset growth for this year? Thanks. John Christopher Donahue: Thanks, Thank Well, let me comment first and then I know Debbie is chomping at the bit to get at this 1. But in terms of the money market fund overall, know, we have been at this for 50 years. And there is all sorts of things that come together like our rivers in a big confluence month to month. that is why I went through all those percentages of changes in market share. But because of the seasonality, I think that says for itself that we do expect that seasonality to come back just like it has. All these years we have had these pools. Some other interesting things have happened in the marketplace. 1 of the big firms offered a sort of a bonus yield program that moved some assets We had some big clients move. That always happens. As I mentioned to the pre in the previous question, we had some ultra short and people moving out the curve a little bit. But with the Fed situation, if it is really higher longer, I e, they do not do anything, that is fine with us. Remember, 3.5% or so yield on a money fund is a great is a great thing. Debbie? Deborah Cunningham: Thanks, Thank Thanks, Chris. Yes. I agree. A lot of volatility in the first half of the year. There were some very large market deals that occurred you know, from an IPO standpoint and a long term debt standpoint, Amazon, Alphabet, and Dropbox, SpaceX. They issued large amounts in the marketplace, which then sub subsequently, for a period of time, came into the money market universe. And has subsequently gone out Still some of it is left in there. So a lot of volatility and noise around the first half of the year. But, ultimately, what Chris mentioned with regards to a fed that at this point is showing no signs of, you know, being in the mode of lowering rates. Keeping rates higher for longer where they are now. I mean, the market is actually predicting that the rate environment is increased in at the September meeting, which I do not particularly think will be the likely scenario. But nonetheless, if you are with rates on the short end, somewhere between 3.5% and 4.5% on a yield curve basis over the, you know, over the first half of the year. Money market funds look very attractive. Most of the industry, including ourselves, has lowered their weighted average maturity to have, some fuel available to light the fire even further. As rates and the yield curve steepen to some degree. Floaters are really good use of investments in these funds during a rising rate environment. And those have been plentiful in the marketplace. Sometimes we like to spread in the floaters. Sometimes we do not. But all of this, really leads us to a conclusion that with rates where they are marginally higher from a steeper yield curve standpoint, the attractiveness of cash and the attractiveness of money market funds as well as the and the pools that we manage will continue to gather assets as does the industry. Kenneth Lee: Thanks, Thank Great. Very helpful color there. And just 1 follow-up, if I may, just on the expense side there. I realized that there were some noise in the quarter in 2Q due to the acquisition there. But just going forward, any updated outlook in terms of expenses? Thanks. Thomas Robert Donahue: Thanks, Thank Sure, Kenneth. Well, they are going to be FCP comments. On the comp related line, I expect in the next quarter will not have the onetime comp expense from them. We will have their ongoing So, you know, that number could be down around $5 million Of course, I do not know what is going to happen to our bonus accrual. As things come out. The distribution line you know, that is going to relate to the money market assets primarily. So which way those go, that line will go. Systems and communications, we would expect that to go up a couple million for the next quarter. And the professional service fees, FCP comment, we would expect that 1 to go down. By about 6 million. Of course, we might have some other additions, smaller come through there. And no comments on you know, the intangible will continue with FCP In other you know, there is some FCP line expense I pointed out in there. That will continue. And then what happens with FX always makes that line move around. Kenneth Lee: Thanks, Thank Great. Very helpful there. Thanks again. Operator: Thanks, Thank Your next question is from Michael Cho with JPMorgan. Michael Cho: Thanks, Thank Hi, good morning. Thanks for taking my question. Just wanted to peel in just a little bit on the money market share discussion you had in your prepared comments and just now as well? I guess, appreciate all the color on the history of the share shifts over the last 7 years. But just wondering, you know, as you looked at that and you analyze that, I mean, are there any, you know, particular reasons of why these share shifts occur from time to time? Is it really firms running promotion programs? Or anything that you are seeing from a key takeaway perspective as these share shifts occur from time to time? John Christopher Donahue: Thanks, Thank Michael, that is why I tried to list a whole bunch of confluence of factors that all jump around every single quarter. Debbie talked about all these big IPOs that came out with a cash came in and then that goes out, who has more of it than the other guy, then that changes the market share. The movement of some of the clients the ultra short and conservative Microshort, that does it. And you already commented on the 1. there is some big retail programs. And then there is just the ebb and flow of cash, and it is volatile. And there is nothing that you can do about it. So we look for this the seasonality, the steady Eddie of the program. And, as I tried to hit in my remarks, we would trade every time. To go from 200 billion to 500 billion and have the market share. If it goes down a little bit, it does not matter. Owner operators love revenues. And if you really wanna know about it, I think if we could calculate it, and calculate the market share on revenues, we would have a better stat than on the assets. Thanks. Michael Cho: Thanks, Thank Appreciate that color. Let me just switch gears to active ETFs. it is a key priority here for you as well. I think you launched a couple more during the quarter. Can update us on, you know, the pace of launch, from here, maybe over the next 12 to 18 months, you know, priorities in terms of products. And maybe any opportunities that you might see through maybe deeper distribution partnerships to maybe step up scale in that business? I know you also had mentioned non US in the past as well. But just kind of curious update there. Thanks. John Christopher Donahue: Thanks, Thank So we like putting out a couple or so ETFs every year in order to get the marketplace focused on it, to enable the basket helpers to have their mind right on the whole thing. And that is about where we are. And then there are some special deals with some of our distribution firms where I am not going to tell you the name of the firm or the nature of the deal, but where if you play ball with them, you are each ETF does a lot better or your family of ETFs. So we are doing some of that. But, basically, it is a long term growth strategy. And I think Raymond has some other comments on as far as we can go on the specifics. Raymond J. Hanley: Thanks, Thank We cannot tell you the names. They call that gun jumping. Correct. But if you look at what we have done, we have we have we have launched in the areas where we have had the most success in our traditional mutual funds. And so that provides a bit of a road map to how we are thinking about the next wave. And you mentioned offshore We have had a lot of success porting the MDT. Strategy over there in a usage form. We are very much looking at active ETFs outside of The US as well. The focus initially has been domestic, but that is certainly something that we are looking at. I would make 1 other comment on the product development side of it. And Ray mentioned, you know, we are we are able to do a good job when we have an existing product and it is doing well, and then you come up with an ETF that is similar or whatever, then that can do well. John Christopher Donahue: Thanks, Thank But if the product development people would look at it and say, where are the most sales occurring in the industry, And then that is another way, a pointer finger as to where we would go. Which is sort of how payer got burped out onto the field. Great. Thanks, guys. Operator: Thanks, Thank We have reached the end of the Q&A session, and I will now turn the call over to Raymond J. Hanley for closing remarks. Raymond J. Hanley: Thank you, Holly. That concludes our call, and we appreciate you joining us today. Operator: Thanks, Thank This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. 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Interested in Federated Hermes, Inc.? Here are five stocks we like better. Record assets under management: Federated Hermes ended Q2 with $912 billion in AUM, driven by market appreciation and growth in equities and private markets. Equity assets reached a record $110 billion, while private-market assets rose $2.6 billion to $21.6 billion following the FCP acquisition. Strong investment-product demand: MDT equity and market-neutral strategies generated more than $3.5 billion in net sales, while fixed-income funds and SMAs recorded $362 million of third-quarter-to-date net sales. The company also had approximately $3.4 billion in institutional wins awaiting funding. Money-market assets eased, digital initiatives advanced: Total money-market assets declined $7.9 billion sequentially, though fund assets remained 7% above the prior year. Federated Hermes launched a digital Treasury fund and is developing an on-chain share class for institutional and stablecoin-related distribution. Federated Hermes (NYSE:FHI) ended the second quarter with record assets under management of $912 billion, supported by growth in equities and private markets, while money market assets declined modestly from the prior quarter, executives said during the company’s analyst call. President and CEO Chris Donahue said equity assets reached a record $110 billion at quarter-end, rising $8.8 billion, or 9%, from the first quarter, primarily reflecting market appreciation. Gross equity sales totaled $9.1 billion, near the prior quarter’s record level, while net redemptions were $1.1 billion. That figure included an expected $3 billion global equity sub-advisory redemption previously discussed by the company. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Equity sales were led by Federated Hermes’ MDT fundamental quantitative strategies. MDT equity and market-neutral strategies generated a record $6 billion in gross sales and more than $3.5 billion in net sales during the quarter. Across the company’s equity platform, 35 equity fund and separately managed account strategies posted net sales, including $2.7 billion from MDT offerings, excluding market-neutral strategies, and $470 million from Strategic Value. At the end of the quarter, 54% of the company’s equity funds outperformed their Morningstar peer groups over three years, while 30% ranked in the top quartile of their categories. Through July 24, combined equity funds and separately managed accounts had $61 million in net sales for the third quarter to date. → Microsoft Just Flipped the AI Spending Narrative Overnight Fixed-income assets ended the second quarter at slightly more than $100 billion, up $689 million. Market appreciation added roughly $1 billion, partly offset by net redemptions and exchanges. The company cited net sales in 26 fixed-income funds and separately managed accounts, led by Core Plus and Core Aggregate SMAs, ultrashort bond funds and the Conservative Muni Micro Short Fund. Donahue said the firm believes its fixed-income product range and investment management capabilities position it for positive flows. He noted increased interest in shorter-duration offerings such as ultrashort and conservative micro-short strategies. Through July 24, fixed-income funds and SMAs had generated $362 million of net sales in the third quarter. → Carrier Earnings Could Send the Stock to a New All-Time High Alternative private-market assets increased $2.6 billion during the quarter to $21.6 billion. The increase included $3.2 billion in U.S. multifamily real estate assets added through the early-April completion of Federated Hermes’ acquisition of an 80% interest in FCP Fund Manager, L.P. The company said its MDT market-neutral fund and ETF recorded $150 million in net sales. Federated Hermes is also raising capital for the sixth vintage of its global private equity co-investment fund, which had closed on $300 million to date. The company said its first four private equity co-investment funds raised between $400 million and $600 million each, while the fifth raised $500 million. At the beginning of the third quarter, the company had about $3.4 billion of net institutional wins yet to fund into funds and separate accounts. The expected inflows include approximately $1.7 billion in equity strategies, $1.3 billion in private-market strategies and $300 million in fixed income. Private-market commitments include expected additions in direct lending, private equity and trade finance. Total money market assets declined $7.9 billion, or about 1%, in the second quarter. Money market fund assets fell $2.9 billion from the first quarter to $500 billion, though they remained nearly $32 billion, or 7%, above the year-earlier level. Money market separate-account assets declined about $5 billion, which Donahue said was consistent with seasonal patterns among large state pools managed by the company. The company estimated its money market mutual fund market share, including sub-advised funds, at about 6.7% at quarter-end, compared with 6.9% in the first quarter. Donahue said market-share movements can reflect a variety of factors, including client activity, retail yield programs, large capital-markets transactions and investors moving into ultrashort strategies. Chief Investment Officer for Money Markets Debbie Cunningham said the first half saw volatility tied to large IPO and long-term debt transactions, including activity involving Amazon, Alphabet, Anthropic and SpaceX. She said money market funds remain attractive in a short-end rate environment of roughly 3.5% to 4.5% and that the company expects money market funds, separate accounts and pools to continue gathering assets. Federated Hermes also discussed early-stage digital asset efforts. It recently launched the Money Market Management Digital Treasury Fund, designed to support traditional and on-chain distribution. The fund’s initial reserve shares class is non-tokenized and intended for institutional investors and stablecoin issuers seeking investments aligned with stablecoin reserve requirements. The company is also developing an on-chain share class using blockchain infrastructure for its official books and records. Chief Financial Officer Tom Donahue said second-quarter revenue increased $23.8 million, or 5%, from the first quarter. The FCP acquisition contributed approximately $14 million of revenue, while equity asset growth added $7.6 million and the additional calendar day added $5.1 million. Lower average money market assets reduced revenue by $8.4 million. Operating expenses rose $17.3 million, or 5%, sequentially, driven largely by FCP acquisition costs, including $6.5 million in nonrecurring acquisition-related compensation and $3.2 million in higher professional service fees. Advertising and promotional costs increased $3.2 million, while intangible asset amortization rose $3 million, primarily because of the acquisition. Donahue said some acquisition-related costs should decline in the next quarter, including the one-time compensation expense and professional service fees. Federated Hermes ended the quarter with $481 million in cash investments, or $416 million excluding the portion attributable to non-controlling interests. The company estimated its tax rate would range from 25% to 28% for 2026. Federated Hermes, Inc is a global investment manager that provides a range of asset management solutions to institutional and individual investors. The company offers active strategies across equity, fixed income, multi-asset, liquidity, and alternative investments. Through its suite of mutual funds, separate accounts and collective investment vehicles, Federated Hermes seeks to deliver performance-driven outcomes aligned with client objectives and risk tolerances. In addition to traditional investment management, Federated Hermes has developed specialized capabilities in sustainability and responsible investing, integrating environmental, social and governance (ESG) research into its investment process. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Federated Hermes Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Record assets under management of $912 billion were driven by strong market value gains in equity and private market assets, despite a $3 billion expected sub-advisory redemption. The fundamental quant MDT strategies served as a primary growth engine, achieving record gross sales of $6 billion and placing the majority of its strategies in the top performance quartile. The acquisition of an 80% interest in FCP Fund Manager added $3.2 billion in US multifamily real estate assets, significantly expanding the private markets footprint. Money market asset fluctuations were attributed to typical Q2 seasonality in state-managed liquidity pools and specific large-scale market deals like IPOs and debt issuances. Management views the current interest rate environment as an 'entrepreneurial delight,' noting that even with slight market share shifts, money market fund managed assets have more than doubled over the last 7.5 years. Digital initiatives are pivoting toward a dual-track approach, supporting both traditional and on-chain distribution to align with emerging stablecoin reserve requirements and blockchain infrastructure. Institutional wins yet to fund stand at $3.4 billion, with expectations for $1.7 billion in equity strategies and $1.3 billion in private markets, including direct lending and private equity. Fixed income is projected to return to positive net flows, supported by investor interest in ultra-short and conservative micro-short products as clients adapt to the 'higher for longer' rate regime. The company plans to launch approximately two active ETFs annually, focusing on porting successful domestic strategies like MDT to international UCITS formats. Guidance for Q3 expenses assumes a decrease in non-recurring acquisition costs, though professional service fees and system communications are expected to fluctuate based on FCP integration. Management anticipates continued attractiveness for money market funds as long as short-end rates remain between 3.5% and 4.5%. The FCP acquisition resulted in $9.7 million in transaction costs, including $6.5 million in non-recurring compensation and $3.2 million in professional fees. A $2.9 million gain from a renewable energy property sale and a $2 million real estate development fee provided one-time revenue offsets in the private markets segment. Intangible asset amortization increased by $3 million during the quarter, primarily tied to the structural changes following the FCP acquisition. Management noted that while geopolitical news is negative, the end clients of the company's intermediary base have become 'numb' to negative geopolitical news, focusing instead on yield curve opportunities. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed that flows have already stabilized and turned positive in the current quarter through July 24. The strategy relies on a variety of products across the yield curve, specifically ultra-short funds and ETFs that offer higher yields to satisfy FA and client demand. The firm expects seasonality to return to normal patterns, with higher-for-longer rates keeping money market funds highly attractive compared to other cash alternatives. Portfolio managers have lowered weighted average maturity to maintain 'fuel' for reinvestment if the yield curve steepens further. The launch strategy focuses on areas with proven mutual fund success to provide a roadmap for investor adoption. Management hinted at selective distribution partnerships where participation in specific programs significantly enhances ETF family visibility and sales.

Federated Hermes, Inc.’s FHI second-quarter 2026 earnings per share of $1.38 topped the Zacks Consensus Estimate of $1.19. The bottom line grew 19% from the year-ago quarter. Higher net investment advisory fees, net administrative service fees, and net other service fees, along with record assets under management (AUM), drove the quarterly performance. The acquisition of a majority stake in U.S. real estate manager FCP Fund Manager, L.P. during the quarter enhanced revenues, strengthened FHI's private markets capabilities, and increased alternative assets under management. However, the rise in operating expenses remained a headwind. Net income was $104.3 million in the second quarter, up 14.6% from the year-ago quarter. Total revenues increased 18% year over year to $502.8 million. The top line surpassed the Zacks Consensus Estimate by 1.7%. The acquisition of FCP Fund Manager contributed $13.9 million to the company's revenues during the quarter. Quarterly net investment advisory fees rose 17% year over year to $337.7 million. Net other service fees grew 54% year over year to $54.9 million. Net administrative service fees rose 8% to $110.1 million. In the second quarter, Federated Hermes derived 50% of its revenues from money-market assets, 48% from long-term assets (30% from equity, 10% from fixed income, and 8% from alternative/private markets and multi-asset), and 2% from sources other than managed assets. Total operating expenses increased 20% year over year to $369.9 million. The rise was primarily due to higher distribution, compensation, professional service, and other expenses, including acquisition-related costs associated with the FCP Fund Manager, L.P. transaction. FHI recorded a net non-operating income of $11.1 million, down 19% year over year, mainly due to lower interest and dividend income. As of June 30, 2026, cash and other investments and total long-term debt were $480.7 million and $348.5 million, respectively. Cash and other investments and total long-term debt were $645.4 million and $348.4 million, respectively, as of March 31, 2026. As of June 30, 2026, total managed assets were at a record level of $911.6 billion, up 7.8% year over year. Money-market assets totaled $676.9 billion, rising 6.7% year over year, while fixed-income assets increased 1.8% to $100.5 billion. Equity assets of $109.6 billion increased 23.1% from the prior-year quarter, while alternative/private market assets increased 4.4% to $21.6 billion, primarily reflecting $3.2 billion of assets acquired through the FCP transaction. Average managed assets totaled $910 billion, up 8.7% year over year. The company repurchased 1,119,805 shares of its class B common stock in the reported quarter for $58.9 million. Federated Hermes also declared a quarterly dividend of 38 cents per share, to be paid out on Aug. 14, 2026, to shareholders of record as of Aug. 7, 2026. Federated Hermes continues to deliver strong performance, driven by rising AUM and robust revenue growth, supported by higher equity and money market assets. The company has further strengthened its growth prospects by expanding its investment offerings with the launch of two new exchange-traded funds (ETFs) and its first blockchain ecosystem-focused fund, while enhancing its private markets franchise through the FCP acquisition. Although acquisition-related costs and elevated operating expenses may weigh on near-term profitability, healthy asset growth, increasing equity assets, and a diversified product portfolio position FHI well for sustained long-term growth. 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. SEI Investments Co.’s SEIC second-quarter 2026 adjusted earnings per share of $1.66 surpassed the Zacks Consensus Estimate of $1.45. The bottom line reflected a rise of 38.3% from the prior-year quarter. SEIC’s results were aided by higher revenues and a rise in AUM. However, higher expenses acted as a spoilsport. BOK Financial Corporation's BOKF second-quarter 2026 adjusted earnings of $2.59 per share surpassed the Zacks Consensus Estimate of $2.56. The bottom line jumped 18.3% from the prior-year quarter. BOKF’s results benefited from higher NII and total fees and commissions. An increase in loans was another positive. However, the rise in operating expenses was a major undermining factor. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Federated Hermes, Inc. (FHI) : Free Stock Analysis Report BOK Financial Corporation (BOKF) : Free Stock Analysis Report SEI Investments Company (SEIC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Assets Under Management: Record $912 billion at end of Q2, led by growth in equity and private market assets. Equity Assets: Record high of $110 billion, up $8.8 billion or 9% from Q1. Gross Equity Sales: $9.1 billion in Q2, roughly even with Q1's record level. Equity Net Redemptions: $1.1 billion in Q2, including a $3 billion expected global equity sub-advisory redemption. MDT Equity and Market-Neutral Strategies: Record $6 billion in gross sales and over $3.5 billion in net sales in Q2. Fixed Income Assets: Just over $100 billion at end of Q2, up $689 million. Alternative Private Markets Assets: Increased $2.6 billion in Q2 to reach $21.6 billion. Money Market Fund Assets: $500 billion at end of Q2, down $2.9 billion or 1% from Q1, but up almost $32 billion or 7% year-over-year. Money Market Separate Account Assets: Decreased by about $5 billion or 3% in Q2. Total Revenues: Increased $23.8 million or 5% in Q2 compared to prior quarter. Operating Expenses: Increased $17.3 million or 5% in Q2 from prior quarter. Carried Interest and Performance Fees: $1.4 million in Q2, compared to $388,000 in prior quarter. Effective Tax Rate: 25.8% for Q2; estimated in the 25% to 28% range for 2026. Cash and Investments: $481 million at end of Q2; $416 million excluding noncontrolling interest. Warning! GuruFocus has detected 6 Warning Sign with FHI. Is FHI fairly valued? Test your thesis with our free DCF calculator. Release Date: July 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record assets under management of $912 billion, driven by growth in equity and private market assets. Equity assets hit a record high of $110 billion, with MDT strategies achieving $6 billion in gross sales and over $3.5 billion in net sales. Strong fixed income performance with 26 funds and SMAs seeing net sales, and Q3-to-date net sales of $362 million. Private markets assets grew to $21.6 billion, boosted by the FCP acquisition and successful fundraising for new funds. Digital initiatives, including the launch of a digital treasury fund and tokenization efforts, position the company for future growth. Money market fund assets decreased by $2.9 billion in Q2, with market share slipping to 6.7% from 6.9%. Equity net redemptions of $1.1 billion, including a $3 billion expected global equity sub-advisory redemption. Q2 operating expenses increased by $17.3 million, partly due to $9.7 million in FCP acquisition-related transaction costs. Fixed income performance lagged, with only 39% of funds beating peers and 19% in the top quartile over three years. The Q2 effective tax rate of 25.8% is at the lower end of the 25%-28% range, but uncertainty remains for 2026. Q: Can you provide an updated outlook for money market fund asset growth this year, given the current rate outlook and employment situation? A: J. Christopher Donahue (CEO) noted that while money market fund assets are subject to monthly volatility and seasonality, the firm expects typical seasonal patterns to resume. He emphasized that a "higher for longer" Fed rate environment is favorable, as a 3.5% yield on money funds remains attractive. Deborah Cunningham (CIO, Global Liquidity Markets) added that despite first-half volatility from large IPOs and debt issuances, the current rate environment (3.5%-4.5% on the short end) makes money market funds very attractive. She noted the industry has lowered weighted average maturities to prepare for potential yield curve steepening, and floaters are a good investment tool in this environment, leading to expectations of continued asset gathering. Q: Has investor interest in fixed income changed with the prospects of higher rates, and can the strategy return to positive net flows? A: J. Christopher Donahue (CEO) stated that end clients have become "numb" to negative geopolitical news, and with rates staying higher, there is increased interest in products like conservative micro short and ultrashort funds. He expressed confidence that the variety of products across the yield curve, including the payer ETF, and the strength of the investment team will drive positive fixed income flows in the foreseeable future. Q: Can you provide an update on the pace of active ETF launches over the next 12-18 months and any opportunities for deeper distribution partnerships? A: J. Christopher Donahue (CEO) said the firm plans to launch a couple of ETFs per year to maintain marketplace focus, and is working on special deals with distribution firms to enhance ETF performance. Raymond Hanley (President) added that the firm is launching ETFs in areas where they have had the most success with traditional mutual funds, and is actively looking at active ETFs outside the US, particularly porting MDT strategies into UCITS form. Q: Can you elaborate on the reasons behind the quarterly fluctuations in money market fund market share? A: J. Christopher Donahue (CEO) attributed the fluctuations to a confluence of factors, including large IPOs bringing in cash that later exits, client movements, shifts to ultrashort and conservative microshort funds, and promotional programs from competitors. He emphasized that the firm focuses on seasonality and the "Steady Eddie" of the program, noting that growing assets from $200 billion to $500 billion is more important than minor market share fluctuations, and that on a revenue basis, the firm's market share is likely stronger than on an asset basis. Q: How are investor conversations tracking for the Strategic Value fund, given its solid year-to-date performance? A: J. Christopher Donahue (CEO) said investors like the performance, though the fund's category positioning can be volatile. He noted that the portfolio manager is focused on increasing dividend growth, and the ETF version is also performing well, attracting investors who understand the fund's strategy. The main challenge is managing the portfolio when security prices rise, which requires maneuvers to maintain dividendsa "good problem" to have. Q: What is the updated outlook for expenses going forward, given the noise from the FCP acquisition in Q2? A: Thomas Donahue (CFO) provided guidance: compensation-related expenses should decrease by about $5 million next quarter as one-time FCP comp expenses are absent; distribution expenses will track money market assets; systems and communications costs should rise by a couple of million; professional service fees should drop by about $6 million; and intangible amortization and other FCP-related expenses will continue, with FX movements adding volatility to the "other" line. Q: Can you provide more detail on the digital initiatives, including the launch of the money market management digital treasury fund? A: J. Christopher Donahue (CEO) explained the dual-track approach: the initial reserve shares class provides a non-tokenized structure for institutional investors and stablecoin issuers, while an on-chain share class is being developed to place official records on blockchain infrastructure. The firm is selectively engaging with regulated digital asset intermediaries, including participation in BNY and Goldman initiatives and the RX initiative for UCITS money market funds in the UK. These are early-stage efforts, with clients currently seeking more information than transaction capability. Q: Can you provide an update on the growth in equity assets and the performance of MDT strategies? A: J. Christopher Donahue (CEO) reported record equity assets of $110 billion, up 9% from Q1, with gross equity sales of $9.1 billion. MDT equity and market-neutral strategies achieved record gross sales of $6 billion and net sales of over $3.5 billion. Six of nine MDT fund strategies were in the top performance quartile for trailing three years, and the firm had net sales in 35 equity fund and SMA strategies during the quarter. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Federated Hermes (FHI) came out with quarterly earnings of $1.38 per share, beating the Zacks Consensus Estimate of $1.19 per share. This compares to earnings of $1.16 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +15.97%. A quarter ago, it was expected that this one of the nation's largest managers of money market funds would post earnings of $1.2 per share when it actually produced earnings of $1.27, delivering a surprise of +5.83%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Federated Hermes, which belongs to the Zacks Financial - Investment Management industry, posted revenues of $502.78 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.76%. This compares to year-ago revenues of $424.84 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Federated Hermes shares have added about 15.4% since the beginning of the year versus the S&P 500's gain of 6.9%. While Federated Hermes has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Federated Hermes was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.38 on $509 million in revenues for the coming quarter and $5.24 on $1.98 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Investment Management is currently in the top 23% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Franklin Resources (BEN), has yet to report results for the quarter ended June 2026. The results are expected to be released on July 31. This investment manager is expected to post quarterly earnings of $0.66 per share in its upcoming report, which represents a year-over-year change of +34.7%. The consensus EPS estimate for the quarter has been revised 2.2% higher over the last 30 days to the current level. Franklin Resources' revenues are expected to be $2.27 billion, up 9.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Federated Hermes, Inc. (FHI) : Free Stock Analysis Report Franklin Resources, Inc. (BEN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Total assets under management reach a record $911.6 billion Equity assets reach a record $109.6 billion Q2 2026 earnings per diluted share of $1.38 Board declares $0.38 per share dividend PITTSBURGH, July 30, 2026 /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active investing, today reported earnings per diluted share (EPS) of $1.38 for Q2 2026, compared to $1.16 for the same quarter last year, on net income of $104.3 million for Q2 2026, compared to $91.0 million for Q2 2025. Federated Hermes' total managed assets were a record $911.6 billion at June 30, 2026, up $65.9 billion or 8% from $845.7 billion at June 30, 2025 and up $4.5 billion from $907.1 billion at March 31, 2026. Total average managed assets for Q2 2026 were $910.0 billion, up $72.7 billion or 9% from $837.3 billion for Q2 2025 and down $5.6 billion or 1% from $915.6 billion for Q1 2026. "In addition to reaching record high equity assets in the second quarter, we achieved record gross sales across the range of our MDT suite of quantitative investment solutions, reaching all-time highs in MDT institutional separate accounts and SMAs (separately managed accounts). We also saw net positive MDT sales for the 14th consecutive quarter," said J. Christopher Donahue, president and chief executive officer. "We continued to broaden our investment offerings by launching two new exchange-traded funds (ETFs) and introducing our first fund designed for use by participants in the blockchain ecosystem. We also expanded our private markets business by acquiring a majority interest in U.S. real estate manager FCP Fund Manager, L.P.," he said. Federated Hermes' board of directors declared a dividend of $0.38 per share. The dividend is payable on Aug 14, 2026 to shareholders of record as of Aug 7, 2026. During Q2 2026, Federated Hermes purchased 1,119,805 shares of Federated Hermes class B common stock for $58.9 million. Equity assets were a record $109.6 billion at June 30, 2026, up $20.6 billion or 23% from $89.0 billion at June 30, 2025 and up $8.8 billion or 9% from $100.8 billion at March 31, 2026. Top-selling equity funds during Q2 2026 on a net basis were Federated Hermes MDT Large Cap Growth Fund, Federated Hermes MDT Mid Cap Growth Fund, Federated Hermes MDT US Equity Fund, Federated Hermes MDT All Cap Core Fund and Federated Hermes MDT Small Cap Core Fund. Fixed-income assets were $100.5 billion at June 30, 2026, up $1.8 billion or 2% from $98.7 billion at June 30, 2025 and up $0.7 billion or 1% from $99.8 billion at March 31, 2026. Top-selling fixed-income funds during Q2 2026 on a net basis were Federated Hermes Ultrashort Bond Fund, Federated Hermes Total Return Bond ETF, Federated Hermes Conservative Municipal Microshort Fund, Federated Hermes Adjustable Rate Fund and Federated Hermes Conservative Microshort Fund. Alternative/private markets assets were $21.6 billion at June 30, 2026, up $0.9 billion or 4% from $20.7 billion at June 30, 2025 and up $2.6 billion or 14% from $19.0 billion at March 31, 2026. The increase was primarily due to $3.2 billion of assets acquired through the FCP Fund Manager, L.P. (FCP) transaction. Money market assets were $676.9 billion at June 30, 2026, up $42.5 billion or 7% from $634.4 billion at June 30, 2025 and down $7.8 billion or 1% from $684.7 billion at March 31, 2026. Money market fund assets were $499.9 billion at June 30, 2026, up $31.9 billion or 7% from $468.0 billion at June 30, 2025 and down $2.9 billion or 1% from $502.8 billion at March 31, 2026. Financial Summary Q2 2026 vs. Q2 2025 Revenue increased $77.9 million or 18% primarily due to an increase from higher average equity and money market assets as well as due to the FCP acquisition in Q2 2026 ($13.9 million). During Q2 2026, Federated Hermes derived 50% of its revenue from money market assets, 48% from long-term assets (30% from equity, 10% from fixed-income, and 8% from alternative/private markets and multi-asset) and 2% from sources other than managed assets. Operating expenses increased $62.1 million or 20% primarily due to a $22.4 million increase in distribution expenses resulting primarily from higher average money market fund assets, a $16.7 million increase in compensation and related expense, including $6.5 million of FCP-acquisition-related expenses, a $9.2 million increase in other expense primarily due to fluctuations in foreign currency exchange rates, and a $7.0 million increase in professional service fees including $4.7 million of FCP-acquisition-related expenses. Intangible asset related expenses increased $2.9 million, including $3.0 million of amortization of intangible assets associated with the FCP acquisition. Nonoperating income (expenses), net for Q2 2026 decreased $2.6 million or 19% primarily due to a decrease in interest and dividend income. Q2 2026 vs. Q1 2026 Revenue increased $23.8 million or 5% primarily due to the FCP acquisition in Q2 2026 ($13.9 million) and higher average equity assets. Operating expenses increased $17.3 million or 5% primarily due to a $7.4 million increase in compensation and related expense including $6.5 million of FCP-acquisition-related expenses and a $4.3 million increase in professional service fees primarily due to the increase of FCP-acquisition-related expenses of $3.2 million. Intangible asset related expenses increased $3.0 million due to the amortization of intangible assets associated with the FCP acquisition. Nonoperating income (expenses), net increased $7.7 million primarily due to a larger increase in the market value of investments in Q2 2026 as compared to the increase in the market value of the investments in Q1 2026. YTD 2026 vs. YTD 2025 Revenue increased $133.3 million or 16% primarily due to an increase from higher average money market and equity assets and due to the FCP acquisition in Q2 2026 ($13.9 million). For the first half of 2026, Federated Hermes derived 52% of its revenue from money market assets, 47% from long-term assets (30% from equity, 10% from fixed-income, and 7% from alternative/private markets and multi-asset) and 1% from sources other than managed assets. Operating expenses increased $123.0 million or 21% primarily due to a $49.0 million increase in distribution expenses resulting primarily from higher average money market fund assets, a $27.5 million increase in compensation and related expense primarily due to higher incentive compensation and $6.5 million of FCP-acquisition-related expenses, a $27.4 million increase in other expense primarily due to a value added tax (VAT) refund received in Q1 2025 related to amended VAT filings in the U.K. and fluctuations in foreign currency exchange rates, and a $9.8 million increase in professional service fees primarily due to $6.2 million in FCP-acquisition-related expenses and costs related to global technology projects. Intangible asset related expenses increased $3.1 million due primarily to $3.0 million related to the amortization of intangible assets associated with the FCP acquisition. Nonoperating income (expenses), net decreased $3.4 million primarily due to a decrease in interest and dividend income. Earnings call information Federated Hermes will host an earnings conference call at 9 a.m. Eastern on Friday, July 31, 2026. Investors are invited to listen to the earnings teleconference by calling 877-545-0523 (domestic) or 973-528-0016 (international) prior to the 9 a.m. start time. To listen online, go to the About section of FederatedHermes.com/us to register and join the call. A replay will be available at approximately 12:30 p.m. Eastern on July 31, 2026. To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 54241. 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 $911.6 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 11,000 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 2,200 employees in London, New York, Boston and offices worldwide. Federated Hermes ranks in the top 5% of equity fund managers, the top 8% of money market fund managers and the top 11% of fixed-income fund managers2 in the industry. Federated Hermes also ranks as the 9th-largest manager of model-delivered separately managed accounts3. For more information, including an analyst presentation, which is updated periodically, visit FederatedHermes.com/us. ### 1) As of June 30, 2026.2) Morningstar, June 30, 2026. Based on U.S. fund flows rankings.3) Money Management Institute/Cerulli Q1 2026.Federated Securities Corp. is distributor of the Federated Hermes funds.Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Fund Managers Ireland Limited, Hermes Investment Management Limited, Hermes GPE LLP, and Federated Hermes FCP Manager, LLC, each a registered investment advisor in one or more of the U.S., U.K. or Ireland. Cautionary statementsCertain statements in this press release, such as those related to performance, investment strategies, opportunities to meet client needs, investment offerings, 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. Net sales (redemptions) 1,363(2,503)(127)(50)(85)(267)(61)01,090(2,820)Net exchanges144(10)(153)08000(1)(10)Acquisitions/(dispositions)00002,788449002,788449Impact of foreign exchange2(68)31(3)(9)121400(59)36Market gains and (losses)37,4422,359551480(144)(119)22208,0712,720Ending assets$ 64,069$ 45,521$ 46,189$ 54,298$ 14,918$ 6,729$ 2,935$ 4$ 128,111$ 106,552Six Months EndedJune 30, 2026EquityFixed IncomeAlternative / Private MarketsMulti-assetTotalFundsSeparate Accounts1FundsSeparate Accounts1FundsSeparate Accounts1FundsSeparate Accounts1FundsSeparate Accounts1Beginning assets$ 54,988$ 42,910$ 45,973$ 54,154$ 12,085$ 7,016$ 2,850$ 4$ 115,896$ 104,084Sales11,2986,8557,8525,7621,1859499020,43412,711Redemptions(8,641)(8,439)(7,987)(6,226)(979)(570)(196)0(17,803)(15,235)Net sales (redemptions) 2,657(1,584)(135)(464)206(476)(97)02,631(2,524)Net exchanges(25)20(5)08010(21)20Acquisition/(dispositions)00002,788449002,788449Impact of foreign exchange2(226)(98)(29)(23)(147)(102)00(402)(223)Market gains and (losses)36,6754,273385631(22)(158)18107,2194,746Ending assets$ 64,069$ 45,521$ 46,189$ 54,298$ 14,918$ 6,729$ 2,935$ 4$ 128,111$ 106,552 View original content:https://www.prnewswire.com/news-releases/federated-hermes-inc-reports-record-assets-under-management-with-second-quarter-2026-earnings-302839477.html

Wall Street expects a year-over-year increase in earnings on higher revenues when Federated Hermes (FHI) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 30. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This one of the nation's largest managers of money market funds is expected to post quarterly earnings of $1.19 per share in its upcoming report, which represents a year-over-year change of +2.6%. Revenues are expected to be $494.1 million, up 16.3% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 4.09% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Federated Hermes, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that Federated Hermes will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Federated Hermes would post earnings of $1.2 per share when it actually produced earnings of $1.27, delivering a surprise of +5.83%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Federated Hermes doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Federated Hermes, Inc. (FHI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research