Decent Second Quarter Given Market Movements as New CEO Seeks To Refresh SEI

SEI Investments reported decent second-quarter financial results. Revenue came in at $482 million, a 2% sequential decline excluding the impact of termination fees as markets moved further south. This is a good result in our view given the market declines and we note that this revenue beat the FactSet consensus by 2%. On this $482 million of revenue, SEI generated operating margin of 24%, down sequentially and year over year amid SEI’s revenue model of asset-based fees and mostly fixed expense structure. We will maintain our narrow moat rating and fair value estimate of $71.