SEI Investments (NASDAQ: SEIC) reported Q2 EPS of $0.75, $0.01 worse than the analyst estimate of $0.76. Revenue for the quarter came in at $404.83 million versus the consensus estimate of $405.58 million.

Second-Quarter Business Highlights:

• Revenue growth in the quarter was primarily driven by higher Asset management, administration, and distribution fees from market appreciation and positive cash flows from new and existing clients.
• Information processing and software servicing fees in our Private Banks segment increased $3.3 million in second-quarter 2018 compared to second-quarter 2017 primarily due to increased assets from new and existing clients processed on the SEI Wealth Platform (the Platform).
• Revenues from the SEI Archway acquisition were $5.6 million during the second-quarter 2018. SEI Archway was acquired during the third-quarter 2017 and is reported in our Investment Managers segment.
• Our average assets under management, excluding LSV, increased $17.8 billion, or nine percent, to $227.0 billion, as compared to $209.2 billion during the second-quarter 2017 (see attached Average Asset Balances schedules for further details).
• Our average assets under administration increased $53.4 billion, or 11 percent, to $545.3 billion in the second-quarter 2018, as compared to $491.9 billion during the second-quarter 2017 (see attached Average Asset Balances schedules for further details).
• Sales events, net of client losses, during second-quarter 2018 totaled approximately $24.5 million and are expected to generate net annualized recurring revenues of approximately $19.1 million when contract values are fully realized.
• Our earnings from LSV increased by $4.8 million, or 13 percent, to $41.1 million in second-quarter 2018 as compared to $36.3 million in second-quarter 2017. The increase in earnings was primarily due to an increase in assets under management from market appreciation and cash inflows from new clients.
• Our operating expenses, primarily personnel costs, increased across all of our business segments. These expenses primarily consist of operational, technology development and maintenance and marketing costs and are mainly related to our solutions offerings and to servicing existing and acquiring new clients. In addition, our Investment Managers segment includes personnel costs related to SEI Archway acquired during the third-quarter 2017.
• We capitalized $11.7 million of software development costs in second-quarter 2018 for continued enhancements to the Platform.
• Our effective tax rate was 21.1 percent in second-quarter 2018 as compared to 32.1 percent in second-quarter 2017. The decline in our tax rate was primarily due to the tax changes enacted in the Tax Cuts and Jobs Act in December 2017.
• We acquired Huntington Steele, LLC (Huntington Steele), a registered investment advisor servicing the ultra-high-net-worth market, during the second-quarter 2018. As a result, our ending advised assets as of June 30, 2018 increased by approximately $800 million, and our revenues and expenses increased by approximately $900 thousand and $700 thousand, respectively, during the second-quarter 2018. The results of operations of Huntington Steele are included in our Investments in New Businesses segment. Refer to our second-quarter 2018 Form 10-Q for additional information regarding the financial impact of the acquisition.
• We adopted ASU Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09) on January 1, 2018. With our adoption of ASU 2014-09, fees received for research services provided by our brokerage subsidiary, SIDCO, are now recorded net of amounts paid for the soft dollar arrangement. As a result, our revenues and expenses in second-quarter 2018 were each reduced by $3.3 million with no impact to net income. Refer to our second-quarter 2018 Form 10-Q for information regarding the impact of ASU 2014-09 on our financial statements.
• We repurchased 1.6 million shares of our common stock for $104.6 million during the second-quarter 2018.

For earnings history and earnings-related data on SEI Investments (SEIC) click here.