Key Highlights

  • EPS was $1.50, compared with $1.34, on Net Income of $111.9 million.
  • Total managed Assets were $884.4 billion, up 2% year over year.
  • Equity assets reached a record $110.5 billion, up 17% from a year earlier.
  • Money market assets fell 4% from June to $649.9 billion.
  • The board declared a Dividend of $0.38 per share.

Earnings rise 12% on higher Equity assets

Federated Hermes (NYSE:FHI), a Pittsburgh-based global active Investment manager, reported third quarter 2026 results on October 29, 2026. EPS was $1.50 against $1.34, and net income was $111.9 million versus $104.1 million, a calculated increase of about 7.5% in net income and about 12% in EPS.

Revenue increased $37.9 million, or 8%, primarily due to higher average equity assets and the Acquisition in the second quarter of 2026 of FCP Fund Manager. Operating expenses rose $14.0 million, or 4%, mainly from an $8.5 million increase in distribution expenses on higher average Money Market fund assets and a $7.1 million increase in compensation.

Operating income rose 18% to $153.3 million from $129.5 million, which implies an Operating Margin of about 30.2% against 27.6% a year earlier on a calculated basis. Investment income fell to $2.0 million from $14.1 million.

CEO Christopher Donahue said the company generated positive net equity sales in the quarter, including across its MDT quantitative suite, and that assets in MDT institutional separate accounts and subadvised accounts reached record highs.

Managed assets by category

Total managed assets were $884.4 billion, up $13.2 billion, or 2%, from a year earlier but down $27.2 billion, or 3%, from June 30, 2026. Average managed assets for the quarter were $897.7 billion, up 4% year over year.

Equity assets were a record $110.5 billion, up 17% from $94.7 billion. Fixed-income assets were $99.4 billion, down 2% year over year, and alternative and private markets assets were $21.7 billion, up 14%.

Money market assets were $649.9 billion, down $27.0 billion, or 4%, from June 30, with money market fund assets at $486.3 billion, down 3% on the quarter.

Revenue mix and net equity sales

During the third quarter, the company derived 50% of Revenue from long-term assets, split into 32% from equity, 10% from fixed income and 8% from alternative and private markets and multi-asset strategies. Money market assets supplied 49% of revenue and sources other than managed assets contributed the remaining 1%.

Equity net sales were positive $1.9 billion in the quarter, compared with net redemptions of $130 million a year earlier. For the first nine months of 2026, revenue rose 13% to $1.49 billion and EPS was $4.15, up from $3.75.

Mix shift on a calculated basis

Equity assets represent about 12.5% of total managed assets, while money market assets represent about 73.5%. Equity assets grew 17% year over year, far faster than the 2% growth in total assets, so the mix is moving gradually toward higher-fee products.

Balance sheet, Buybacks and dividend

Cash and other investments were $580.3 million at September 30, 2026, down from $724.3 million at December 31, 2025, while long-term Debt was $348.6 million. Intangible assets including Goodwill rose to $1.50 billion from $1.18 billion.

During the quarter, the company purchased 992,312 shares of class B common stock for $57.4 million, an average of about $57.84 per share on a calculated basis. The board declared a dividend of $0.38 per share, payable on November 13, 2026 to shareholders of record on November 6, 2026.

Readers tracking the name will likely follow money market asset trends after the sequential decline, the pace of net equity sales and integration of the acquisition.