Federated Hermes (FHI) Financials

Federated Hermes (NYSE: FHI) has displayed several notable financial trends based on the analysis of its quarterly financial statements from Q3 2022 through Q1 2025.

• Strong and growing net income: Federated Hermes has shown a generally increasing trend in net income attributable to common shareholders, rising from $69.7 million in Q1 2023 to $101.1 million in Q1 2025.
• Firm revenue growth: Total revenue, driven solely by non-interest income, has increased from $381-433 million in 2022 to over $423 million by Q1 2025, indicating a stable operational flow.
• Consistent earnings per share growth: Diluted earnings per share improved from $0.78 in Q1 2023 to $1.25 in Q1 2025, reflecting profitability gains alongside share count stabilization.
• Controlled operating expenses: While absolute expenses have risen, salary and employee benefits and marketing expenses have remained consistent relative to revenue growth, supporting operational leverage.
• Active return of capital to shareholders: The company has continued substantial repurchases of common equity ($120 million in Q1 2025 alone) and consistent dividend payments, supporting shareholder value.
• Stable balance sheet composition: Total assets have slightly increased from approximately $1.97 billion in Q3 2022 to around $2.0 billion in Q1 2025, with modest fluctuations in goodwill and intangible assets.
• Cash position stability: Cash and equivalents exhibit a range from $300 million to $387 million over recent quarters, maintaining liquidity.
• Net cash flow from operating activities varies: Operating cash flow fluctuated between about $5 million (Q1 2023) to as high as $126 million (Q4 2024), affected by changes in operating assets and liabilities.
• Increasing other operating expenses: Other operating expenses increased notably, for example, rising to about $187 million in Q2 2024, which could pressure margins if unchecked.
• Rising payables and liabilities: Other short-term payables and total liabilities increased over time, which may lead to higher financial obligations in the short term.

In summary, Federated Hermes has demonstrated solid profitability growth and effective capital return to shareholders over the analyzed periods. The company's revenue is consistently driven by non-interest income streams, with expenses generally controlled relative to income. However, investors should monitor increases in other operating expenses and liabilities levels, as these could impact financial flexibility if the trends continue upward.