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Sean Denham

Thank you, Ryan.
Please turn to slide 4. Our EPS of $1.17 represents an 18% increase from Q1 2024. Additionally, share repurchases over the last 12 months were notable contributors to earnings growth, driving $0.03 of EPS improvement against Q1 2024.
Last quarter, we had a handful of items to call out that affected the comparability of our EPS. This quarter, the impact of those types of items was negligible.
Earnings per share declined, modestly, on a sequential basis, which was our expectation. The primary factor driving the 1 percentage point decline is the seasonality of our tax rate, which increased to 22.8% from 18.5%; and is typical due to the timing of releasing tax contingencies.
Turning to business unit financial performance on slide 5. Each of our business units realized operating profit growth against Q1 of 2024.
Growth in our Investment Managers business reflects strong sales momentum, particularly among alternative and global managers. Private Banking's growth reflects the continued momentum from 2024, in addition to recent professional services wins, which convert into revenue more quickly than longer-term contracts.
Investment Advisors' revenue growth of 11% was largely attributed to the year-over-year contribution from the Integrated Cash Program, which generated $21 million of revenue versus $10 million in the prior year. Sequentially, Investment Advisors and Institutional Investors saw modest declines, mostly attributable to the full-quarter impact of lower asset balances, which occurred towards the end of the fourth quarter.
Turning to slide 6. We achieved healthy improvement in the operating profit margins in all business units on both a sequential and year-over-year basis.
As a result, SEI's consolidated operating profit margin increased to 28.5% for Q1, marking the highest level achieved in the last three years. Margin improvements stem from positive operating leverage, the lack of unusual or one-time items, the contribution from our Integrated Cash Program, and our continued focus on cost control.
Last quarter, I indicated that the timing of certain investments to support business growth may pressure margins. Due to the time needed for hiring and initiating new technology investments, these expenses in the first quarter were modest. We expect these costs to gradually increase throughout the year. But their overall impact on margins should remain relatively limited.
Turning to slide 7. SEI achieved a record level of sales events in the quarter, surpassing Q3 of 2024.
Sales events were led by our Investment Managers and Private Banking businesses, with more modest contributions from Investment Advisors and Institutional Investors. Investment Managers' wins were driven by existing and new clients, both in the US and globally.
We also realized a positive contribution from the new product offerings, notably our Luxembourg Depositary Services, reflecting the continued investments we're making to enhance our global service offering and operational footprint.
The strength of our Investment Managers business is underpinned by our leading market position with alternative managers, which accounted for nearly 70% of segment revenue in 2024. In the current market environment, alternative managers are particularly well positioned to excel. And we are committed to fueling their growth, as they pursue proactive, [offensive] strategies.
Private Banking wins were broad-based in the quarter, coming from new and existing clients. M&A activity contributed to sales events, with clients completing a handful of acquisitions and transitioning those books of businesses to SWP.
Q1 saw strong client renewals, with six contracts extended, totaling run-rate revenue of nearly $20 million, with an average extension period of three years.
Our SEI Sphere offering, part of the Investments in New Business segment, secured a significant win this quarter by expanding our partnership with an existing Private Banking client. This client will utilize all of SEI Sphere's offerings, including cybersecurity, network architecture, and cloud migration.
Turning to slide 8. Both AUM and AUA increased on a sequential and year-over-year basis in the first quarter.
Despite the S&P 500 declining by 4.6% in Q1, our AUM experienced a negligible market impact due to our broad diversification across geographies and asset classes. We also benefited from modestly positive net inflows in Institutional and Advisors, driven by inflows into our strategists and traditional SMA programs and offset by outflows in mutual funds.
Our Institutional business posted a handful of client wins in the quarter. In the Advisor business, our efforts to enhance the SEI ecosystem for the entire adviser community, especially in RIAs, is yielding results more quickly than we had anticipated.
Our recent acquisition of SEI LifeYield and the launch of our alt platform, SEI Access, are examples of building an ecosystem that can meet the needs of a larger and more sophisticated Advisors, further enhancing our capability to move, upmarket.
During the quarter, we also launched a handful of initiatives to drive increased client interest in SEI products through the lens of tax and income optimization, notably our direct indexing SMA program.
Our LSV investment, which experienced significant outflows in the fourth quarter, saw an improvement in Q1, as market performance shifted in favor of both global and value mandates, driving a modest increase in LSV's assets.
In the context of ongoing market volatility, we recognize that investors are keenly focused on the implications for assets under management across our Advisors, Institutional, and Private Banking businesses. Our portfolios in those businesses are, on balance, slightly less market-sensitive than a typical 60-40 portfolio, due to our allocations to fixed-income alternatives and liquidity mandates.
In summary, SEI's resiliency is enhanced by our substantial diversification, which benefited us in the first quarter and we anticipate will continue to dampen the impact of market uncertain uncertainty, going forward.
Slide 9 summarizes our capital allocation and balance sheet.
We continue to invest, aggressively, in our own shares in the first quarter, buying back $193 million of stock, at an average price of $77, bringing total share repurchases over the last two quarters to more than $450 million. Additionally, we announced a $500 million increase in our share repurchase authorization.
Turning to our balance sheet. We ended the first quarter with more than $700 million of cash and no long-term debt.
We view SEI's incredibly low leverage and ample capacity for investment as strategic advantages, especially in the current uncertain market environment.
Clients value our stability. Knowing our fortress balance sheets and commitment to constantly investing in our business ensures we'll thrive for years to come.
Before opening for questions, I'd like to invite all of you to attend our Investor Day on September 18, in New York. We have a lot of initiatives and process and look forward to sharing our plans to accelerate growth. It's more information than we can cover in an earnings call so we hope you'll all be able to join us in New York, this September.
With that, operator, please open the line for questions.

Question and Answer Session

Operator

Thank you.
(Operator Instructions)
Owen Lau, Oppenheimer.

Owen Lau

Hello. Good afternoon. Thank you for taking my question.
Could you please talk about the sales environment over the last few weeks? I saw that your first quarter net sales were pretty strong. But I'm wondering how does the recent macro uncertainty and tariff situation impact your conversation with clients and the sales cycle? Thanks.

Ryan Hicke

Hey, Owen. How are you? Hope you're doing well. Thank you for the question.
Yeah. Very strong Q1, in sales. As I mentioned in the script, we are not seeing a slowdown in activity. But I thought it might be more helpful -- Michael's in the room, Phil's in the room, Sanjay's in the room, all the unit leads in the room.
Maybe, if they provide a little bit of color, commentary, in terms of what they're seeing, especially around both late-stage pipeline and early-stage pipeline -- Sanjay, you want to kick off first?

Sanjay Sharma

Sure. Hi, Owen.
For Private Banking, I can look at this as an opportunity in two segments.
One opportunity, it is presenting for our existing clients. As existing clients are going through this uncertain environment, we can see more traction in terms of outsourcing. And they're engaging with us. So I see that as an opportunity for SEI.
In terms of the late-stage pipeline, which we are expecting to close this year, we are very confident about that. And we are seeing good traction. So I don't see any slowdown in our [near-stage] pipeline activities.
In terms of long term, that's something we have to watch. I think we have to wait for a couple of quarters before we can make any comment about that.

Ryan Hicke

Phil?

Phil McCabe

Sure. Hi, Owen. It's Phil McCabe.
Couple things, real quick. We don't see any slowdown, at all, in activity, especially on the Alternative side of the business. If there was a little bit of slowdown on the Institutional side, it's more than being made up for on the Retail side of the business.
We're seeing a lot of demand for semi-liquid products, out there, on the retail side. This is a really great environment for alternative managers to deploy capital. And they're very opportunistic, right now.
So we're seeing a lot of great activity out there. It hasn't slowed at all.

Michael Lane

Owen, this is Michael Lane.
Interestingly, you heard from Sean that we are seeing results improving in the [RAA] side of our business quicker than we expected. That's not only a result of our outbound activity continuing to improve and increase in that space, but our inbound activity -- as advisors are spreading word of mouth of what we do and as they're learning more about the capabilities of the entire ecosystem of SEI.
So the last few weeks of volatility have not impacted, in any way, the amount of activity that we're participating in, with prospective clients.

Ryan Hicke

Yeah. I'll just summarize -- I think that it's good to get their color -- we're confident about what we see. If there's anything we're watching more closely, it's just the timing of when we would expect things to sign.
We saw some of that last year. But we aren't seeing anything coming out of the pipeline. We aren't seeing a slowdown of activity.
But some of the market impact could, maybe, have some effect on the timing. But that that would just be a quarter here or a quarter there.

Owen Lau

Got it. That's super helpful.
And then, going back to slide 8. I think you made the comment that ending AUM and AUA were up sequentially but the broader US market was down. The growth was broad-based. And it did not just come from one pocket.
So could you please unpack the driver of that inflows? And then, how much of your AUM is actually tied to US versus non-US? Thanks.

Michael Lane

On the US versus non-US. When you think about the asset management allocation, the equity allocation is somewhere in the ballpark of about 48%; of which, 80% of that is US versus 20% is non-US.

Phil McCabe

On the IMS side. We're seeing fewer losses these days. And we're seeing a lot of funding from new launches and new clients converting -- most of those at -- about 85% of that revenue or those asset growth is coming from North America.

Owen Lau

And then, can you please add some more color about the driver of the inflows? Because it overcame the market decline in the first quarter.

Ryan Hicke

I think, Owen, that's just a matriculation of the backlog of some previous signings. I think that's a manifestation, as well, of what Michael was talking about with ongoing activity from last year with Advisors.
So there was no one thing. I'd say it was just a variety of strategies that we have had in place for acquiring new advisors; engaging, onboarding advisors, intermediaries.
We also saw some flows outside the US, from some new distribution partners.
So it was definitely not materially driven by one firm, one event, one client.

Michael Lane

No. And, in fact, we had positive net flow, both on the Advisors side and the Institutional side. So that would offset some of the market losses, as well.

Sanjay Sharma

Got it. Thanks a lot.

Operator

(Operator Instructions)
Ryan Kenny, Morgan Stanley.

Connell Schmitz

Hey. Good afternoon. This is Connell Schmitz, on behalf of Ryan Kenny.
Can you, guys, speak to your ability to maintain the 28% margin -- that was record, this quarter -- in the uncertain backdrop from here, given the volatility in the market? And how you see sales coming in?

Sean Denham

Sure, this is Sean.
I think, now, for a few quarters in a row, we've been seeing modest but increasing margin and operating profit increase. I think a lot of that contribution just is coming from net sales.
I think the onboarding -- as those net sales are coming online and translating into revenue. So we're seeing some improvement in margins there.
In saying that, I think we've done a really nice job of cost control. And so -- I don't want to say doing more with less but thinking about where our return on invested capital; specifically around investments, how those investments are coming onboard.
And I think we've just been a lot more thoughtful about managing those investments. So I think the contribution -- combining the revenue growth, along with the cost control -- has really been the main drivers.

Connell Schmitz

Got it. That's very clear.
I had a follow-up on expenses but that took care of it.
So just one more on the repurchase authorization. Is there any cadence that you expect to deploy or use that authorization, from here?

Sean Denham

Well, we were coming up against it. So we had done an authorization in Q2 or Q3 of '24. We used that up pretty quickly.
We saw an opportunity in the market, as well as our large cash position. We also believe that the stock is at a really good price.
And as a result of that, we wanted to buy back an accelerated portion of stock than we historically have.
On a go-forward basis -- I'm not sure if that question was in there but I'm sure that question will come -- we're looking at (inaudible) cash buybacks or stock buybacks, really, at a quarter at a time.
We do a really nice job, I think, of forecasting what the capital needs of the organization will be, over the next quarter to a year. And based off of that, we really make a determination in any one given quarter on what we think the buyback should be.
So it's going to be a combination of where we think the stock price is. We think the stock is low, as I'm sure a lot of companies think their stock is low, with market pullback over the last couple of months here.
And so, there's really not much more to it than just understanding what our cash needs will be, on a go-forward basis, over the next quarter or two and how we're thinking about the stock price.

Brad Burke

Got it. Thank you.

Operator

(Operator Instructions)
Crispin Love, Piper Sandler.

Crispin Love

Thank you. Good afternoon. I appreciate you taking my question.
When I look back over the last three quarters, there's definitely been a noticeable shift in sales events levels compared to prior years. And slide 7 shows that well.
But what do you think the secret sauce is -- that has driven the significant uptick? And what's resonating most, with these new clients?

Ryan Hicke

Hey, Crispin. I think there's a few answers to that. And others are welcome to chime in.
Right. So this is three years into the role for me. And change takes time. And some of these things don't happen overnight.
But if you look at the sales results, as you said, over the last few quarters, I think there's probably been three primary drivers, in terms of why we believe they have continued and why we continue to be, I think, positive, moving forward.
I think, first and foremost, we have an extremely solid foundation. And what I mean by that is I look at our client base and you look at the engagement we have with our client base, the growth we're getting from existing clients, from new launches or cross-sells or organic growth is extremely strong.
And that's a testament to the SEI teams that are out on the street, every day, in front of clients, engaging with clients. And I don't think you can underscore that.
And I'll own the fact, Crispin, that, maybe, we weren't doing that at the level we should have been doing that, a few years ago. But that is definitely not the case.
I think the second thing is a different positioning of the company, less as a vertical and more as a horizontal.
The market is starting to truly appreciate the breadth of what we can offer. Firms want to do more with fewer partners, not add to their stable (inaudible) strategic vendors.
And they see SEI as a really strong choice in many situations, not just to continue to drive existing capabilities, but to look for us to innovate and partner with them for new opportunities. And that positioning is really resonating.
And I think, third -- and this may sound tactical -- our activity levels are just higher. They just are.
We are out there. We are engaged. And I think when you look at the collaboration from the leadership team all the way down, everybody is invested in making sure that we all win as a collective.
And we're less concerned on who's winning in each unit. It doesn't really matter to us. We care about the sum of the parts.
And we are really just getting started. When you think about what Michael Lane and the team are going to be able to do with asset management, if we continue that mindset and that approach.
I think I said this on the last couple calls, Crispin, and I do think it bears repeating: we are immensely proud of the sales results but we are more proud of when you unpack those sales results, those are firms and segments and clients that we want.
We are not playing a revenue-at-any-cost game. We are maintaining a premium price point. We are maintaining a premium service level. But we are winning in the segments, where we transitioned the company a few years ago to target our R&D dollars, target our capital, target our talent.
And it's truly paying off.

Crispin Love

Great. Thank you, Ryan. All very helpful, there.
And then, in the prepared remarks, you also called out growth in the Investment Managers segment, among alt and global managers.
Can you share and just give a little bit more detail on parts of the alternative space where you have been having the most success, recently?

Ryan Hicke

Yeah. I'll kick to Phil on this, Cris. But I think it really is a dovetail off your first question.
One of the decisions we made, as the leadership team a couple years ago, was to put some more-on-the-ground talent outside of the US. Beyond bolstering our operational footprint in Dublin and Luxembourg, but adding more go-to-market talent.
Well, Phil, you want to talk a little bit -- you and I were just over there -- around what we're seeing outside the US or what's winning in the US?

Phil McCabe

Sure. Thanks, Ryan.
The only thing I would add: we are the leader in private credit around the world. So globally.
So we're seeing good traction in private credit, private equity, real estate infrastructure, pretty much any asset class out there. We're seeing a lot of activity.
And as Ryan said, we sent a couple people, over there, to live in the UK, a couple few years ago. And it's really starting to pay dividends.
So we are attracting some very large private credit managers and multi-strap managers, over in that part of the world.
It's just great activity that's driving results.

Crispin Love

Great. I appreciate the color. Congrats on a great quarter.

Sean Denham

Thank you, Crispin.

Operator

(Operator Instructions)
Jeff Schmitt, William Blair.

Jeffrey Schmitt

Hi, everyone.
In Private Banks, how much of the revenue growth is coming from your shift into regional and community banks? And is the competitive landscape much different there? Or is it the same players you typically compete against?

Ryan Hicke

Hey, Jeff. I'll let Sanjay take that one.

Sanjay Sharma

Okay. Hey, Jeff. This is Sanjay, here.
Jeff, remember we talked about a couple -- a few quarters ago that the way we segmented our go-to-market strategy: very heavy focus on Regional Community Bank segment. That is paying these dividends.
If I look at last, say, four quarters or so, almost 60%, 70% of that growth is coming through that segment.
And that segment is also presenting two additional opportunities for us. One, we are very actively working on. And the other one, Michael Lane is going to talk about it in, maybe, future quarters.
But the Professional Services opportunity we launched into the Regional Community segment, (inaudible), data cloud, those services are resonating really well.
And we can see a possible (inaudible) that this segment we have -- we are very strong, with respect to our competition. And our solution, our services, our existing client-based relationships, they're pretty strong.
Existing clients. They are working as our reference points. And with that, that is also helping us to win new business.

Ryan Hicke

And I think, Jeff, if you think about the competitive landscape, it is pretty consistent and similar. So I don't think we see any massive new entrants.
Definitely, formidable competitors. We have a tremendous amount of respect for in that space.
One area where I think we continue to potentially separate ourselves is a little bit of what Sean mentioned earlier: about our ability to continue to invest capital and continue to innovate.
When you look at the SEI Wealth Platform, if you think about how we built that -- really, from the back to the front -- the majority of the investment, now, is going into the front office, differentiating capabilities, client experience, advisor experience, portfolio management tools.
So I would say Sanjay -- you and the team -- it feels like you just have a bigger arsenal of capabilities to talk about. And we're getting more credit, I think, for the value of the platform.

Sanjay Sharma

The Regional Community segment. They are also engaging us, with the implementation services -- which they were not, earlier. So, now, we are the ones providing those services.
And I talked about Professional Services, data cloud. And the other part that Regional Community segment would resonate really well is asset management services.
So that's something we -- they will be able to utilize the enterprise capabilities of SEI. Not just the technology platform, outsource operations. But Professional Services, data cloud, asset management, that will play a much bigger role.

Jeffrey Schmitt

Okay. Thank you.
And then, if this administration were to pivot and loosen up banking regulations, would you expect that to have much of an impact on the Private Bank segment, if banks, like, change capital deployment strategies?

Ryan Hicke

I think the only thing that really gets moved one way or the other is the speed at which some of these firms want to get to their future operating models.
Yeah. I think what's really resonated across all segments of banks -- and Sanjay's living this every day; we just had two different firms in, this week -- it's really the shift to wealth.
So I think, depending on what happens with the administration, the environment, I'm not sure that has a massive impact. But these organizations have really realized that they need to have a much more robust and scalable competitive offering in the wealth space.
And we are primed to really accelerate the delivery of that through our capability set. And that resonates.

Jeffrey Schmitt

Great. Thank you.

Operator

Thank you.
Ladies and gentlemen, I'm shown no further questions in the queue.
I would now like to turn the call back over to Ryan Hicke for closing remarks.

Ryan Hicke

Thank you.
As we, I think, echo the last couple quarters: this was a terrific quarter. But it was one quarter. It doesn't change how we run the company. It doesn't change how we think about what we need to do, moving forward.
We remain very diligent, very focused, and very thoughtful about how we can continue to deliver these types of results for our shareholders and stakeholders, globally.
And I always like to close the call by thanking the clients; and, especially, the SEI workforce for all they do, every day.

Operator

Ladies and gentlemen, that concludes today's conference call.
Thank you for your participation.
You may now disconnect.