Share count
75Mpeak FY2016
← All companies ← FHB Manual FHN → ← EVR Capital Markets & Asset Management FRHC →
FHI, Federated Hermes
Capital Markets & Asset Management financial
Federated Hermes, Inc. is a global leader in active investing with $902.6 billion in assets under management at December 31, 2025.
Federated Hermes also provides stewardship services to customers seeking a range of solutions for engagement, as well as real estate development and renewable energy project development services.
Federated Hermes provides investment advisory services to 176 Federated Hermes Funds as of December 31, 2025.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2025
$1.8B
+10.3% YoY · 4% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $1.9B 5-yr avg $1.6B
Net margin 21.5% 5-yr avg 19.0%
Revenue $479M +13.1% vs yr-ago qtr
Operating margin 26.4% yr-ago 31.1%
Net income $96M yr-ago $104M
Net margin 20.0% yr-ago 24.5%
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What it is
- Revenue is Federated Hermes Funds (84%), Separate Accounts (14%) and Other (2%).
- What moves the needle
- Assets under management and the fee rate on them. What decides it: net flows in or out, the market's move on the assets already there (the firm rises and falls with the indices it invests in), the drift toward cheaper passive products, and the operating leverage on a largely fixed cost base. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Operating margin has held high for a asset manager (median 28% across the record). It earns this on little capital, so return on equity has run near 26%, the leverage of a model that needs almost no plant to grow. A high return that does not fade can mark a moat, but whether the assets stay (net flows, not last year's market) is what the flow disclosures and the 10-K settle, not the multiple.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 10-K →Federated Hermes Funds is 84% of revenue, with Separate Accounts the other meaningful line at 14%.
Revenue by product line, FY2025
- Federated Hermes Funds84%$1.5B
- Separate Accounts14%$256M
- Other2%$33M
By geographyUnited States87%International13%
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2016–2025
realized figures from each filing · older years to the left| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||||
| $1.1B | $1.1B | $1.1B | $1.3B | $1.4B | $1.3B | $1.4B | $1.6B | $1.6B | $1.8B | $1.9B | RevenueRevenue |
| 29.4% | 31.0% | 29.1% | 26.2% | 28.9% | 28.2% | 23.3% | 24.1% | 22.1% | 28.5% | 27.4% | Operating marginOp. mgn |
| 18.3% | 26.4% | 19.4% | 20.5% | 22.5% | 20.8% | 16.6% | 18.6% | 16.4% | 22.4% | 21.5% | Net marginNet mgn |
| $209M | $291M | $220M | $272M | $326M | $270M | $239M | $299M | $268M | $403M | $399M | Net incomeNet inc. |
| 36% | 16% | 25% | 24% | 25% | 28% | 23% | 26% | 30% | 25% | 25% | Effective tax rateTax rate |
| Cash flow & returns | |||||||||||
| $256M | $378M | $189M | $320M | $360M | $160M | $320M | $304M | $343M | $295M | $305M | Owner earningsOwner earn. |
| 35% | 38% | 26% | 26% | 29% | 24% | 23% | 26% | 24% | 34% | 33% | Return on equityROE |
| 1% | 25% | 13% | 16% | 10% | 15% | 14% | 18% | 8% | 25% | 24% | Retained to equityRetained/eq |
| Balance sheet | |||||||||||
| $1.2B | $1.2B | $1.5B | $1.9B | $2.1B | $2.0B | $2.0B | $2.1B | $2.1B | $2.2B | $2.1B | Total assetsAssets |
| $236M | $316M | $157M | $249M | $302M | $233M | $337M | $383M | $504M | $583M | $631M | Cash & investmentsCash+inv |
| $595M | $761M | $857M | $1.0B | $1.1B | $1.1B | $1.0B | $1.1B | $1.1B | $1.2B | $1.2B | Shareholders’ equityEquity |
| Per share | |||||||||||
| 99.1M | 97.4M | 96.9M | 97.3M | 96.5M | 93.8M | 85.8M | 83.9M | 79.4M | 75.1M | 72.7M | Shares out (diluted)Shares |
| $11.54 | $11.32 | $11.71 | $13.64 | $15.01 | $13.87 | $16.86 | $19.19 | $20.55 | $23.98 | $25.55 | Revenue / shareRev/sh |
| $2.11 | $2.99 | $2.27 | $2.80 | $3.38 | $2.88 | $2.79 | $3.57 | $3.38 | $5.37 | $5.49 | EPS (diluted)EPS |
| $2.58 | $3.88 | $1.95 | $3.29 | $3.73 | $1.71 | $3.73 | $3.62 | $4.31 | $3.92 | $4.20 | Owner earnings / shareOE/sh |
| $2.07 | $1.04 | $1.10 | $1.12 | $2.15 | $1.13 | $1.14 | $1.17 | $2.33 | $1.40 | $1.45 | Dividends / shareDiv/sh |
| $6.00 | $7.81 | $8.84 | $10.71 | $11.78 | $11.88 | $12.19 | $13.45 | $13.79 | $15.94 | $16.58 | Book value / shareBVPS |
Per-share growththe realized rate an owner's share compounded
| 9-yr | 5-yr | |
|---|---|---|
| Revenue / share | +8.5%/yr | +9.8%/yr |
| Owner earnings / share | +4.8%/yr | +1.0%/yr |
| EPS | +10.9%/yr | +9.7%/yr |
| Dividends / share | −4.3%/yr | −8.3%/yr |
| Capital spending / share | −13.1%/yr | −23.4%/yr |
| Book value / share | +11.5%/yr | +6.2%/yr |
The record, charted
FY2016–2025Each measure over its full record; the current point and the worst year marked.
Revenue
$1.8Blow FY2017
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2025 10-K · source on SEC EDGAR →
Is it a good business?
- Operating margin 28.5%Solid fee marginOperating income $514M ÷ revenue $1.8BIndustry peers: median 25%
What this means
The heart of a asset manager: how much of each fee dollar survives the cost of running the business. Fees ride on assets under management, so the swing factors are net flows in or out and the market's move on the assets already there; the cost base is largely fixed, which lifts margins in a bull market and squeezes them in a bear one. A high margin held for years, through a market it does not control, is the operational mark of a real franchise.
- Net margin 22.4%WideNet income $403M ÷ revenue $1.8B
What this means
What reaches the owner after tax and interest. For a capital-light fee business this should be a wide share of revenue; when it is thin despite a high operating margin, debt taken on for acquisitions is usually the reason, so read it next to the balance sheet.
- Return on equity 34%Very high (≥25%)Net income $403M ÷ equity $1.2BIndustry peers: median 18%
What this means
Because the business ties up little capital, a healthy fee stream throws off a high return on the equity behind it. Read it with the buyback record: returning capital lifts this ratio honestly, but heavy debt taken to do so can flatter it.
Does AI threaten the moat?
Moderate contestabilityAI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.
In its own filing Named as a competitive risk
Its FY2025 10-K names artificial intelligence as a competitive threat.
“Additionally, artificial intelligence technology is continuously evolving, and Federated Hermes can incur costs to adopt and deploy artificial intelligence technologies that can become obsolete earlier than expected, and there can be no assurance that Federated Hermes will realize the desired or anticipated benefits fr…”
The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of the latest quarter, Mar 31, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$789M
- Cash & short-term investments$631M
- Receivables$75M
- Other current assets$82M
Current liabilities$241M
- Accounts payable$44M
- Other current liabilities$197M
Current ratio3.28×all current assets ÷ what's due · Graham looked for 2×
Quick ratio3.28×stricter: inventory excluded
Cash ratio2.62×strictest: cash alone against what's due
Working capital$548Mthe cushion left after near-term bills
Revenue, latest quarter vs. a year ago+13.1%the freshest read on whether the business is still growing
Current ratio, recent quarters2.7× → 3.3×
Deeper floors
Tangible book value$30Mequity stripped of goodwill & intangibles
Net current asset value($92M)Graham's net-net: current assets less all liabilities
Debt incl. operating leases$451M$102M of it operating leases
From the company's latest filing.
Acquisitions & goodwill
from the balance sheet & the 10-year cash-flow recordGoodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.
Goodwill & intangibles$1.2B53% of all assets; the premium carried on the balance sheet for businesses acquired
Against book equity71%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital
Cash spent acquiring$217Mover 10 years buying other businesses, against $98M of capital spent building
None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.
Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.
Management, ownership & pay
From the proxy: how much of the business the people running it own, and how they are paid.
- Stock-based compensation$29M
The slice of the business handed to employees in shares this year, 2% of revenue, equal to 6% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Peers, Capital Markets & Asset Management
The same industry, side by side on fee margins. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Op. margin | Net margin | ROE |
|---|---|---|---|---|
| HLIHoulihan Lokey | $2.6B | 20.5% | 16.1% | 18% |
| MORNMorningstar Inc. | $2.4B | 17.4% | 15.2% | 17% |
| AMGAffiliated Managers Group Inc. | $2.1B | 42.8% | 24.3% | 17% |
| STEPStepStone Group | $2.0B | 25.0% | 4.0% | 18% |
| FHIFederated Hermes | $1.8B | 28.4% | 20.0% | 26% |
| PJTPJT Partners | $1.7B | 16.0% | 8.0% | 72% |
| VCTRVictory Capital Holdings | $1.3B | 38.3% | 25.6% | 19% |
| APAMArtisan Partners | $1.2B | 35.1% | 21.8% | 74% |
| Group median | — | 26.7% | 18.0% | 18% |
The price
What a price has to assume.
What the price implies
reverse-DCFType today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Federated Hermes has delivered.
$
Through the cycle, Federated Hermes earns about $388M on its 21.5% median owner-earnings margin. This year’s 16.4% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · ’21→’25+7%/yr
Owner-earnings growth · ’16→’25+0%/yr
Owner-earnings growth · ’16→’25+0%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’23–’25)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Free cash flow $305M on 73M shares outstanding (a weighted basic average, the only count this filer tags); net cash $282M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($7M) runs well above depreciation ($8M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $309M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "Federated Hermes (FHI), the owner's record," https://ownerscorecard.com/c/FHI, data as of 2026-07-09.
Manual order: ← FHB its page in the Manual FHN →
Industry order: ← EVR the Capital Markets & Asset Management chapter FRHC →