We are pleased to have with us Sean Denham, Executive Vice President and Chief Financial and Chief Operating Officer at SEI. Sean, thanks for joining us today. My pleasure. Nice to be here. Last year, the story for SEI seemed to be about inflecting sales momentum. This year, it's very clear that SEI is executing. Conversation seems more about durability. What gives you the confidence that SEI can sustain this higher level of sales momentum that we've been seeing? Yeah. First off, it's always great to be here. Thanks for inviting me. Yeah, we're really confident in the sales momentum, mainly because we have insight into what our pipelines look like. We've talked on multiple of our earnings calls about that we're confident where the pipeline sits. We're coming off Q1, where we won really two of the largest wins in SEI history. We won two large mandates in our IMS business, where those managers were historical insourcers of fund admin work, et cetera. They decided to move to an outsource model. That was a huge stake in the ground moment, one of the best quarters in SEI history, record sales events. We do see that momentum continuing, not just in our IMS business. Our Private Banking business has shown significant momentum. That business is a little choppier from quarter to quarter. We typically win 10 to 12 new deals a year. Those can bunch in a given quarter. You saw that in 2025, where we actually, in PB, in our Private Banking business, or in that unit, had a really large Q4. The momentum really is because we're executing incredibly well. Our sales teams are laser-focused. Our business unit leaders have our sales teams really focused. We have a lot of momentum, and we're now selling really the entire ecosystem. We have a lot of additional solutions, like professional services, that has created a large momentum in the market. What's specifically the driver of new sales? Is it more aggressive sales culture? Is it better cross-selling? Is it demand increasing, product improving? What's the biggest driver? Yeah. Obviously, the easy answer is all of the above. If you take them one by one, there is large market demand. Again, as I just mentioned, we saw that in Q1. I think as businesses continue to look at what their core business is, those recent two mandates, I think, we expect to be a trend. I think as firms are looking at what is core to their business. In the Investment Managers space, they got into the business to raise capital and deploy capital. They didn't necessarily get into doing fund administration. Where we play in the highest parts of the market, those managers are looking to scale. Having to scale the administration piece of their business as opposed to outsourcing that, I think a lot of those managers that have been classic insourcers are waking up and saying, "Do I really want to keep up with the technology, the hiring needs?" Also, "Do I really want to be focusing my attention where focus is needed in things like AI?" They're relying on us in that outsource model to be making those investments for them. Are you seeing larger transformational mandates, or are clients still taking a more modular approach to outsourcing? Yeah, it really depends on the business unit, and just it really depends on where we're playing in the market. In that IMS business where we play, those are really large mandates, and we've enjoyed to be the beneficiary of that. In our Private Banking space, whether someone's acquiring or investing in our SWP platform or in our tech and ops space, those are, again, transformational wins for us. They're also transformational for those companies who are now clients. There's also little tuck-ins here and there, like around professional services. Whether we're selling professional services as a package in our Private Banking business unit, or we're having one-off wins around selling Data Cloud into our IMS clients. It really depends, but it kind of spans across the business in whether they're large mandates or just little deals. On the IMS side, alts have been a major growth engine. What do you view as the differentiator on SEI's services versus some of the other competitors out there? What's driving the mandate wins? Yeah. Honestly, it's really execution. Where we play, we focus our attention on the more complex parts of the market. 70% of our IMS business is in the alternative space, 30% on the traditional. Inside that alternative space, those can be the more difficult, whether striking NAVs or everything that goes along with that work around fund admin. We're really good at that. Case in point, again, I don't want to keep bringing up those two wins, but I think they're a really, really good example of those are probably two of the largest wins that have been out in the market over the last few years. In each of those cases, SEI is the first phone call. We're going to be in those RFP situations. They're going to be competitive. In each of those, we were one of the winners of both of those large wins. That's because of the execution of how we go to market. We pride ourselves, a lot of people can say it's actually hard to do, but we actually provide really strong white glove service. I was actually with one of our clients yesterday who brought that up and some of the things that we're doing around AI and automation. The question was how, if at all, will that affect the white glove service you sold us on, and will that change at all? The answer clearly is no. The way we construct our teams, the way we support our clients, we believe is a differentiator in the market. What's driving the demand for outsourcing? What are some of the biggest pain points that you are solving for alternative asset managers? Yeah, I think it's a couple things that I said. As the largest managers in the world continue to launch new funds, as they continue to scale, as they have larger capital to deploy, they did not get in the business to do that. Do they really want to be scaling the headcount? As we sat here today, maybe less today than a year ago, with the advent and increasing rise of AI and the role that plays in the administration business. They don't necessarily want to be using their capital to focus on the technology that's required, the headcount that is needed to scale at least where it was, and all the investments they need to make in AI. They're staying on top of it. Each of these managers have really strong governance systems where they call us. They want to understand, as their outsourcer, what we're doing and how we're thinking about disruption, how we're thinking about investment, where AI is going to play a significant role, where automation is playing a large role, and then what is our governance that surrounds that. While they are outsourcing in a meaningful way to us, they still have those same process controls that you would expect from them. Let's shift to Private Banking. Private banking margins have remarkably improved over the last several quarters. What is structurally driving that improvement? Number one, number two, and number three is great leadership. Sanjay Sharma, who took over that business four years ago, has an engineer's mindset. He approached the business in that way. When Sanjay took over, we were anywhere from maybe slightly negative margins, depending on the quarter, to zero margins. He really just instilled a level of discipline from an overall cost standpoint, how we think about technology spend, et cetera. He did a really amazing job there right-sizing that technology team, the workforce, et cetera. On top of that, as you can increase revenue the way we have in that space, you're going to improve margins. Being able to scale PB, and how he did that, our previous focus was really focused on the largest institutions in the U.S., which about half of those are our clients. Moving down market was really critical and integral to the success of not just revenue growth sales events, but also margin improvement. That's number two. Number three, the advent or the newly launched professional services that has been really successful in our Private Banking space that's now starting to drip in other parts of the business. That was huge. If you rewind two years ago, we were winning great work selling our SWP platform, our technology, and operations together. We were doing implementation work, which we characterize as professional services. But we've actually identified 15-20 additional services, where those margins are closer to 30%-40%. Every new deal that we're doing has three or four, five, six, seven different professional services that are going along with our technology and our classic ops platform. That's been huge for us. When you can add our historical margin rates on those technology and operations, add on top of that five or six professional services. Where a deal maybe was $2 million-$3 million a few years ago, those deals now are $7 million-$8 million with much higher margins. That's where you're seeing the margin improvement. The next question we often get is, "Okay, can that continue?" We've gone from zero maybe four years ago in margins. We've touched in Q1 20% margins. Sanjay, when he took over the role with Ryan Hicke, our CEO, said we expect margins to be able to get back to historicals. As a reminder, historical margins were somewhere in the 25%-30% margin rates. We still see an opportunity to go further there. Is that a multi-year story? I don't think you're going to necessarily see linear growth up and to the right there. We're probably a little further along than what we expected four years ago when we built out the five or six-year plan to get there. I wouldn't say probably, we're definitely ahead of schedule there. That's actually not how we run the business. We're not looking quarter to quarter, "Hey, it was 20% last quarter. How do we get to 21% next quarter?" You may see a little choppiness. You may see 20% down to 19% back up to 20-ish, but that's kind of our run rate right now, and that's where we're focused. That's how I would think about it. How do you manage margin expansion goals against needing to invest for growth? That's the hardest part about being a public company is SEI, we have a very strong balance sheet where we have no debt, et cetera. Capital really is not the issue for us. It's where we can make the right investments to maximize that, I call it expense versus capital. How we can maximize the expense of those investments, with future needs, et cetera, versus what we can really afford from managing our own internal expectations and what the street's expectations may be. I think we're doing a lot better job today than we were doing a couple of years ago. We've instilled a lot of processes, accountability controls, to make sure every dollar spent is really in a fashion where we are going to have the maximum return on that invested capital. Let's talk about the transition underway in asset management. There has been an improvement in net flows. What is SEI doing in product development, distribution, and marketing to continue this improvement? Yeah. Michael Lane has been with SEI, former BlackRock, led the iShares program at BlackRock, came to SEI as a reminder little less than two years ago. At Investor Day, we talked about Michael's vision of reimagining asset management. He's done that. I think we're moving from the phase of reimagining asset management to now executing on a lot of the bullets he laid out there. It's really refocusing on the ecosystem sale, where historically we may have led in that space with trying to sell custody against Schwab or Fidelity just on a one-on-one basis. We're probably not going to necessarily win that deal. When we couple it with our technology, our asset management, some of the other services that we can provide, especially as we move up market, we're finding that story and that sale becomes a lot easier story to tell, and it's resonating with the market. Over the last, I would say, couple quarters, or definitely over the last year, we've had some of the largest wins in SEI history in that space or in Michael's business. It's a result of kind of changing the mindset of leading with custody, how we package custody with our asset management product, building out our investment capabilities, reducing our reliance on sub-advisors, what we should be doing in-house versus externally. We've upgraded our distribution talent. We've been investing significantly in upgrading our talent in Michael's business. We've been expanding our alt positioning and partnerships, like our recently announced partnership with Carlyle. There's a number of things that Michael is launching, and that's, I think, a big driver of where you're seeing the increase in flows. In the Investment Advisors business, how does the opportunity for SEI change as the wealth management industry consolidates? You're seeing RIAs simultaneously getting larger, more sophisticated. How do you adapt to that environment? Yeah. We see ourselves as a beneficiary as we see consolidation. As RIAs continue to consolidate, you see more of that. They're much more receptive to what I just mentioned of the buying into an integrated ecosystem. We still sell individual capabilities. You can still buy custody. You can still buy our asset management products. When we can tell an ecosystem story, we become the beneficiary. As we see consolidation, we really just become a beneficiary. They're looking for a complete platform, and we're really one of the only firms that sells that complete platform. What about Stratos? What's the long-term vision for the Stratos platform? Yeah. Stratos was a really important transaction or deal for us. Just to remind, the reason why we felt we needed to do the Stratos deal, Ryan Hicke, our CEO, probably three or four years ago, he talked about two areas where we would expect some inorganic growth. One of them was in a U.S. RIA. The reason for that was multifold. The first was we felt we needed to be closer into the advice space. Stratos did that for us. Where you'll see margin compression, you'll see pricing pressure on different parts of the business or inside the financial service industry. The one component that has been relatively untouched is the advice space. Whether an advisor charges 80 to 100 basis points for advice 10 years ago versus today, it's been relatively unchanged. We felt we needed to be closer to the advice space. On top of that, over the last few years, we had seen, without having an RIA, we felt we weren't providing our advisor base, who have been with us a very long time, with an opportunity to potentially monetize their business. As they were maybe thinking about an exit, we were seeing some outflows. Not that they weren't happy with SEI. They really loved our offerings, our platform, et cetera, but we didn't have an answer for it. There was a little bit of a defensive position in order to making sure we had an RIA so our advisors had a home to land in if they got to the point around monetization. Those were two key areas. The third was the obvious one plus one equals three. Now having an advisor channel where we can sell, provide our custody platform, our asset management platform into those advisors has been critically important. And I think a third thing that was a little bit of a surprise where we didn't have as much of a focus, at least in our original thesis, was in our institutional business. As we've educated the Stratos network advisors on our capabilities, including what we do around OCIO, in foundations, et cetera, there has been a lot of curiosity from the advisors. Just as a reminder, we only closed the Stratos deal maybe six months ago, almost to the day. I think it was around December 1st or 2nd, or somewhere around there. Sitting here, June 6th, it's been about six months. We've had a lot of interest, so we're continuing to educate that market. We feel like we've now just expanded our sales force, not just in institution, but across the advisory network, our Investment Advisors business unit from a sizable team, but to a much more scaled team across the country. That's been a really nice added benefit. That's kind of the thesis for Stratos. What early returns have been is through Q1, as we mentioned when we did earnings, it's met up to all of our expectations, including the cultural fit, which was really important to Jeff Concepcion, the founder of Stratos, and really important to us. All right. Let's talk about AI. A lot of opportunities for you. Before we get to that, the market narrative has shifted in the last few quarters from opportunities to risks. How do you view AI changing barriers to entry in the servicing businesses? What are the risks that you worry about, and how should investors think about SEI protecting the moat that's been built? Obviously, we can't do a session without talking about AI. As we think about it, first off, in our business, we do believe we built some moats. How we think about it, AI lowers the barriers for point solutions, but not necessarily for integrated, regulated platforms. That's really what we have. We have integrated regulated platforms. Our client base looks at us in a way where they entrust us with their outsource models. We obviously take that very seriously. It's not just one solution that we provide. We built moats around technology operations and that regulated infrastructure. We think about AI from a risk standpoint like a brick wall, and we've said this now a few times publicly. We don't believe that the brick wall necessarily has the opportunity to be completely disrupted. We do see there could be bricks in that wall that have the opportunity to be disrupted, and that's really kind of those point solutions. There's a number of things that we're doing. Number one, a number of years ago, we created a Ventures Committee. That Ventures Committee is led by Sneha Shah. Today, we actually announced to elevate her role to the head of AI for the company, someone who wakes up every day thinking about artificial intelligence and the role we play from a governance, et cetera, technology, and everything that goes along with it. That's one thing we use. The Ventures Committee spends a lot of time working with the venture capital groups from around the country, identifying is Jane Doe and John Doe sitting in a garage trying to disrupt certain parts of our business? Making sure we understand what is out there. Is there investments we want to make? We've done that in the past. We've made investments into companies, to get closer, have a front row seat to certain things we want to be smarter about. That's in the Ventures Committee, that's in the PE community, et cetera. That's number one. We've also, classically, as a lot of companies are doing today, have an internal disruption team, we've identified areas of our business that we think are ripe for disruption. That team all day long, has a very handsome budget and are helping or creating agents and brainstorming with our business units on the opportunity for disruption. Trying to disrupt ourselves before there's opportunities for others to do so. That's number two. I think those are probably the two largest areas where we're focused. Then just everything else that we're doing around creating the right levels of budget for our technology teams. We've announced the partnership a few months ago, with IBM. IBM's been a great partner over the last four or five months, doing a full assessment of the organization. That's really to make sure we're using agents, that in classically in our fund admin business and other parts of our business has been very labor-intensive. How do we think about automation at scale? How do we think about where the right spot for agents are at scale? Those are the three areas that we think about from a risk. We feel, and I think our clients feel that we're doing all the right things today. It sounds like you are very proactive in thinking through risks on AI. Yeah. Look, we're humble enough and not arrogant to think that we have figured it out because we haven't. No one has figured it out. I think we're doing a lot of things that other companies are doing. We're putting the right tools in the right hands, creating the right budgets, putting the right governance controls around everything I just said. I think we are thinking about it the right way. I don't feel the million-dollar question that I think companies always ask themselves, are we behind? Are we on par? Are we slightly ahead? I don't think we're behind, and so I'm really comfortable where we are. Again, I think we have the right process controls in place right now, and I think the three or four things that we're doing has put our clients at ease. Again, we're not being lackadaisical. What about opportunities? Clearly, there are a lot of opportunities for AI to- Yeah ...enhance the SEI business model, maybe enhance margins. What do you see as the biggest positive use cases for Yeah, I think that the same things I just talked about from a risk are really the opportunities for us as well. I had mentioned three or four times at the opening of this, that as companies have, in our IMS business, classically have thought of themselves as insourcers. I think those folks with the rise of AI are thinking, do we really want to be making those same financial investments, time investments in order to get up the learning curve on AI, or should we be relying on third-party partners to support us in that? That is an opportunity. There still are, I don't know, 20 to 30 large insourcers of fund admin that I think with the announcement in Q1 of those two large insourcers to now outsourcers that have become client of SEI's. I think they're starting to ask themselves questions of everything I just said, "Is this really the right business model for us?" Early days, but we've had some additional conversations with those folks. I think with the kind of the blip in the market in Q1 around when the market dipped around when the street kind of woke up and said, "Hey, how are we thinking about AI? What are the firms that are ripe for disruption?" We had already been thinking about the scaling of the automation with IBM and creating agents alongside them. That's not new. That's been in the works for a while now. Yeah, that's how we're thinking through it. Turning to capital allocation, SEI continues to generate significant free cash flow. Historically, SEI has operated with very little to no leverage, depending on the period, sometimes negative leverage. Then you made the Stratos deal. Looking forward, how has your framework around capital allocation changed over the last year or so? Yeah. It has changed modestly. At Investor Day, we spoke about moving from a -1x leverage model to maybe somewhere in the future, maybe to a 1x positive. That is still directionally where we're headed. I think the uses of capital, we've said publicly we will continue to do this. We expect to still return 90%-100% of free cash flow back to our investors. That'll be in the form of dividends, and the remaining will be stock buyback. I think in Q1, we purchased back about $200 million of our company stock. We saw a little bit of an opportunity there with the drop in stock price related to some of the things that happened in the market around AI. That's proved to be beneficial. Our strategy really hasn't changed. I think where you will see an opportunity for us to move from that -1x to closer to zero or maybe even positive. We own 57.5% of Stratos. There are markers over the next seven years where we will acquire the remaining portion of that. That is where we would expect to take on some debt, really for the first time in many, many years, or at least take on debt and not immediately repay it back. As we think about other inorganic opportunities for us, historically we've talked about two things again. One was US RIA. We checked the box there. We made that acquisition. We talked about European fund admin. I think our thinking has changed a little bit there. I think we had thought about over the last couple of years whether we needed to do a big bang, something to scale our IMS business overseas. I think we've stepped away from that a little bit. You may see small tuck-ins to support some maybe missing solutions in our overall solutions deck in IMS. I wouldn't expect anything significant other than purchasing the remaining options that we have on Stratos over the next seven years. Valuations across fintech and wealth tech have reset meaningfully from peak levels. Is that an opportunity for you, or not? Yeah. We are trying to stay pretty vigilant in our strategy. I talked about being strategic on a couple of things. The US RIA, maybe something in the European fund admin space. We do get inbounds a lot. We evaluate those inbounds. Those are more opportunistic than strategic. I think we've been pretty steadfast when those inbounds come in. Yeah, we'll take a look. We'll understand, is there anything we want to rethink? We have an M&A committee, as all firms do. We'll visit those, we're really trying to stay down the middle of the fairway on our strategy as opposed to being more opportunistic. Let's talk a little bit about culture. SEI has always had reputation for innovation from your roots and an entrepreneurial culture, despite you're now a much larger company. How do you preserve that culture as the business scales? We talk about that all the time. Ryan talks about that all the time, whether it's in a town hall, whether it's with the leadership team. If anyone's ever been to Oaks, if you walk around the campus, it's a beautiful campus. The way Al West, our founder, constructed the campus was very intentional. Intentional to spur that entrepreneurial spirit, I think making sure we never lose that is so critical. I think if you look at even some of the things we've done over the last few years, we talked about some of them just now. Striking that, "Hey, where are we missing? What do we want to invest in?" We talk a lot about on-campus best idea wins. We have contests around best idea wins. It's not just a term, it's something we take to heart. I won't go into them, there's a lot of things we've deployed by using the best idea wins concept. Some of the more meaningful wins, or opportunities around striking, keeping that entrepreneurial spirit alive, was really the creation of professional services practice. That came through truly being an entrepreneur. When Sanjay took a look at the Private Banking space, it wasn't just all him, it was his team, we started looking around everything that third parties were selling to support the implementation of the SWP platform. It could be an assessment of pre-RFP. It could be the change management or the sunsetting of the current technology. It could be the transformation. The origin of our Sphere platform, which you can think about that as our cybersecurity platform that we're now selling into the market, that was all born through the classic SEI model. We had built a world-class cybersecurity. We built it for ourselves. We built our cybersecurity platform ourselves for ourselves, for our technology, as a result, it became so strong, we started saying, "Hey, is this something we should be marketing outside?" That's actually how that was created. A number of our businesses that we have today were created because we were actually doing it for ourselves. We did it really, really well, clients were asking us, "Hey, that's really interesting. Would you mind talking to us about that?" We ended up creating services. That's how professional services were born. Striking that balance of how Al founded the company, it got to a certain size and scale, we did have to adapt. We couldn't run the company exactly the way we were in order to get where we needed to go. I think Ryan has done an amazing job of striking that balance about keeping that entrepreneurial spirit alive, but also advancing the company forward at the exact same time. To wrap up, when you look across SEI today, where do you think the company is still underappreciated by investors? Yeah. I love that. That's my favorite question, and it's one that actually most of our analysts and investors ask first. I think in a couple areas. I think our asset management business is the market hasn't built into the opportunity that we have in front of us. By the way, rightfully so. I think people are watching. I think they understand the re-imagination of asset management. I think they understand the four or five areas where we're building out product or we're investing in our technology platforms. I think they understand why we acquired Stratos, and I think they understand that. I think they're waiting and seeing how we execute across that. I think another huge one is we have a massive opportunity in selling asset management into banks. We've done a little bit of that, but I don't think we've done that at scale. We're putting a lot of new leadership roles in place in order to make sure the right level of attention. I would say those two areas are probably the area that the market hasn't priced in quite yet. Great. Well, Sean, thank you so much for your time today. Thank you, Ryan. Thanks for having me.