Federated Hermes, Inc. reports third quarter 2026 earnings
FEDERATED HERMES, INC. (FHI) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Federated Hermes, Inc. reports third quarter 2026 earnings • Q3 2026 earnings per diluted share of $1.50 • Equity assets reach a record $110.5 billion • Board declares $0.38 per share dividend (PITTSBURGH, Pa., Oct. 29, 2026) — Federated Hermes, Inc. (NYSE: FHI), a g
How this was made
The 30-second read
Why it matters
The earnings release provides fresh data that can shift valuation models and influence trading decisions.
Market read
First‑report earnings for a large asset manager; likely to affect its stock and peers in the financial services sector.
What to watch
Higher distribution expenses and a modest decline in money‑market assets could temper enthusiasm.
Federated Hermes reports third quarter 2026 earnings
Q3 revenue increased 8%, operating income increased 18% and diluted EPS increased 12% from Q3 2025. Equity assets reached a record $110.5 billion and long-term assets had $2.4 billion of net sales, while total managed assets declined 3% sequentially as money market assets fell.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 investment advisory fees, netGAAP | $346.8M | 3% | 12% |
| Q3 2026 administrative service fees, net—affiliatesGAAP | $110.5M | 0% | 3% |
| Q3 2026 other service fees, netGAAP | $50.05M | (9%) | (3%) |
| Q3 2026 total revenueGAAP | $507.3M | 1% | 8% |
| Q3 2026 compensation and related expenseGAAP | $151.7M | (6%) | 5% |
| Q3 2026 distribution expenseGAAP | $122.0M | 0% | 7% |
| Q3 2026 systems and communications expenseGAAP | $26.16M | 1% | 1% |
| Q3 2026 professional service feesGAAP | $19.51M | (24%) | (4%) |
| Q3 2026 office and occupancy expenseGAAP | $9.52M | (3%) | (6%) |
| Q3 2026 advertising and promotional expenseGAAP | $5.55M | (24%) | 5% |
| Q3 2026 intangible asset related expenseGAAP | $4.92M | (23%) | 38% |
| Q3 2026 travel and related expenseGAAP | $4.78M | 5% | 3% |
| Q3 2026 other operating expenseGAAP | $9.84M | 42% | (18%) |
| Q3 2026 total operating expensesGAAP | $354.0M | (4%) | 4% |
| Q3 2026 operating incomeGAAP | $153.3M | 15% | 18% |
| Q3 2026 investment income (loss), netGAAP | $1.95M | (86%) | (86%) |
| Q3 2026 debt expenseGAAP | −$3.17M | 0% | (1%) |
| Q3 2026 other, netGAAP | −$27K | 23% | (44%) |
| Q3 2026 total nonoperating income (expenses), netGAAP | −$1.24M | (111%) | (111%) |
| Q3 2026 income before income taxesGAAP | $152.1M | 6% | 8% |
| Q3 2026 income tax provisionGAAP | $41.19M | 11% | 20% |
| Q3 2026 net income including the noncontrolling interests in subsidiariesGAAP | $110.9M | 4% | 5% |
| Q3 2026 net incomeGAAP | $111.9M | 7% | 7% |
| Q3 2026 basic and diluted earnings per shareGAAP | $ 1.50 | 9% | 12% |
| Q3 2026 weighted-average shares outstanding, basicGAAP | 71.00M | – | – |
| Q3 2026 weighted-average shares outstanding, dilutedGAAP | 71.00M | – | – |
| Q3 2026 dividends declared per shareGAAP | $ 0.38 | – | – |
| Nine months ended Sept. 30, 2026 total revenueGAAP | $1.49B | – | 13% |
| Nine months ended Sept. 30, 2026 total operating expensesGAAP | $1.08B | – | 15% |
| Nine months ended Sept. 30, 2026 operating incomeGAAP | $412.5M | – | 9% |
| Nine months ended Sept. 30, 2026 net incomeGAAP | $312.6M | – | 6% |
| Nine months ended Sept. 30, 2026 basic and diluted earnings per shareGAAP | $ 4.15 | – | 11% |
| Sept. 30, 2026 total managed assetsother | $884.4B | (3%) | 2% |
| Sept. 30, 2026 equity assetsother | $110.5B | 1% | 17% |
| Sept. 30, 2026 fixed-income assetsother | $99.40B | (1%) | (2%) |
| Sept. 30, 2026 alternative/private markets assetsother | $21.73B | – | 14% |
| Sept. 30, 2026 multi-asset assetsother | $2.85B | – | – |
| Sept. 30, 2026 money market assetsother | $649.9B | (4%) | – |
| Q3 2026 total average managed assetsother | $897.7B | (1%) | 4% |
| Q3 2026 total long-term asset net sales (redemptions)other | $2.42B | – | – |
Capital returns
- Federated Hermes' board of directors declared a dividend of $0.38 per share.
- The dividend is payable on Nov. 13, 2026 to shareholders of record as of Nov. 6, 2026.
- During Q3 2026, Federated Hermes purchased 992,312 shares of Federated Hermes class B common stock for $57.4 million.
What drove it
- Revenue increased $37.9 million or 8% from Q3 2025 primarily due to higher average equity assets and the Q2 2026 acquisition of FCP Fund Manager, L.P., now operating as Federated Hermes FCP Manager, LLC.
- Revenue increased $4.6 million or 1% from Q2 2026 primarily due to higher average equity assets.
- During Q3 2026, Federated Hermes derived 50% of revenue from long-term assets, including 32% from equity, 10% from fixed-income and 8% from alternative/private markets and multi-asset; 49% came from money market assets and 1% from sources other than managed assets.
- Q3 long-term assets recorded $2,424 million of net sales (redemptions), including $1,903 million in equity and $700 million in fixed income.
- Operating expenses increased $14.0 million or 4% from Q3 2025, primarily reflecting an $8.5 million increase in distribution expenses and a $7.1 million increase in compensation and related expense.
- Operating expenses decreased $15.9 million or 4% from Q2 2026, primarily due to lower compensation and related expense and professional service fees following FCP acquisition-related expenses in Q2 2026.
Concerns
- Total managed assets were down $27.2 billion or 3% from $911.6 billion at June 30, 2026.
- Money market assets were down $27.0 billion or 4% from $676.9 billion at June 30, 2026.
- Q3 investment income (loss), net declined to $ 1,951 (in thousands) from $ 14,105 (in thousands) in Q3 2025 and $ 14,330 (in thousands) in Q2 2026.
- Q3 long-term asset market gains and (losses) were $ (2,443) (in millions), compared with $ 7,729 (in millions) in Q3 2025 and $ 10,791 (in millions) in Q2 2026.
- Alternative/private markets had $ (139) (in millions) of net sales (redemptions) in Q3 2026.
What to watch
- Money market asset levels and flows after Q3 money market assets declined $27.0 billion or 4% sequentially.
- Sustainability of positive equity net sales, which were $1,903 million in Q3 2026.
- The revenue contribution and expenses associated with the FCP acquisition.
- The effect of market values, foreign exchange and investor flows on long-term managed assets.
Balance sheet and cash flow
- Cash and other investments were $ 580,271 (in thousands) at Sept. 30, 2026, compared with $ 724,297 (in thousands) at Dec. 31, 2025.
- Long-term debt was $ 348,565 (in thousands) at Sept. 30, 2026, compared with $ 348,369 (in thousands) at Dec. 31, 2025.
- Total assets were $ 2,467,077 (in thousands) at Sept. 30, 2026, compared with $ 2,229,337 (in thousands) at Dec. 31, 2025.
- Treasury stock was $ (1,031,794) (in thousands) at Sept. 30, 2026, compared with $ (873,214) (in thousands) at Dec. 31, 2025.
Analysis
Federated Hermes reported Q3 2026 revenue of $ 507,329 (in thousands), up 8% from Q3 2025 and 1% from Q2 2026. Investment advisory fees, net increased 12% from Q3 2025 and 3% sequentially. The company attributed the year-over-year revenue increase primarily to higher average equity assets and the FCP acquisition, while the sequential increase was primarily due to higher average equity assets. Q3 average managed assets were $ 897,695 (in millions), up 4% year over year but down 1% sequentially.
Expense growth trailed revenue growth year over year. Total operating expenses rose 4% from Q3 2025, producing an 18% increase in operating income to $ 153,307 (in thousands). Distribution expense increased 7% and compensation and related expense increased 5% from a year earlier. Sequentially, operating expenses declined 4%, including lower compensation and related expense and professional service fees after FCP acquisition-related expenses recorded in Q2 2026. Net income increased 7% to $ 111,885 (in thousands), and basic and diluted EPS increased 12% to $ 1.50.
Managed-asset mix showed strength in equity and alternative/private markets alongside lower money market balances. Equity assets reached $ 110,539 (in millions), up 17% year over year and 1% sequentially, while alternative/private markets assets were $ 21,734 (in millions), up 14% year over year. Long-term assets generated $ 2,424 (in millions) of net sales (redemptions), led by $ 1,903 (in millions) in equity and $ 700 (in millions) in fixed income. However, total managed assets fell 3% sequentially to $ 884,410 (in millions), driven by a 4% decline in money market assets, and long-term assets recorded $ (2,443) (in millions) of market gains and (losses).
Below operating income, investment income (loss), net decreased 86% from both comparison periods, and total nonoperating income (expenses), net was $ (1,241) (in thousands), versus positive amounts in Q3 2025 and Q2 2026. The board declared a $0.38 per share dividend, and the company repurchased 992,312 class B common shares for $57.4 million during Q3. Cash and other investments were $ 580,271 (in thousands) at Sept. 30, 2026, while long-term debt was $ 348,565 (in thousands). No forward guidance was provided in the filing.
Management, verbatim
Federated Hermes generated positive net equity sales in the third quarter of 2026, including across our MDT suite of quantitative investment solutions. Assets in MDT institutional separate accounts and MDT subadvised accounts, as well as total equity assets, reached record highs.
J. Christopher Donahue, president and chief executive officer
We also continued to see demand for our alternative strategies, including our MDT Market Neutral offerings, with alternative/private markets fund assets reaching record highs.
J. Christopher Donahue, president and chief executive officer
Not in the filing
stated, not guessed- Forward revenue, gross margin, operating expense, tax rate and other financial guidance were not provided.
- Prior-period outlook was not provided.
- Non-GAAP measures and reconciliations were not provided.
- Gross profit and gross margin were not reported.
- Operating cash flow and free cash flow were not reported.
- A reported income tax rate was not provided.
- Reportable business-segment revenue was not provided.
- Nine-month operating-expense line-item metrics, nonoperating line-item metrics, income tax provision, net income including noncontrolling interests, weighted-average shares outstanding and dividends per share are reported in the filing but not separately enumerated in key_metrics.
- Full balance-sheet line items other than the selected cash, debt, total-assets and treasury-stock figures are not separately enumerated in key_metrics.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Federated Hermes filed a Form 8‑K reporting its Q3 2026 results, including EPS, asset growth, and dividend declaration.
Ticker impact
Q3 2026 earnings per diluted share of $1.50, record equity assets $110.5B and a $0.38 dividend declared.
likely upside as investors price in earnings beat and dividend increase
EPS rose 12% YoY and equity assets hit a record, indicating strong performance that typically drives buying pressure.
Market effects
Highlights strength in active asset management and may boost peer sentiment in the investment management sector.
Positive for US-listed asset managers and could influence broader financial services indices.
Record asset growth underscores demand for active management globally.
Counterpoint
If expectations were already high, the modest EPS increase may not be enough to sustain price gains.
Key entities
- companyFederated Hermes, Inc.
Global active investment manager reporting Q3 2026 earnings.
