Federated Hermes, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period. Total revenue for Q3 2024 reached $408.5 million, a slight increase from $402.7 million in Q3 2023. However, total revenue for the nine months ended September 30, 2024, decreased to $1.207 billion from $1.218 billion in the same period of 2023.
The company's revenue from money market funds increased significantly, rising to $208.4 million in Q3 2024 from $186.8 million in Q3 2023. Conversely, investment advisory revenue saw a decline, falling to $274.6 million from $276.8 million year-over-year. Administrative services revenue, however, increased to $97.7 million from $88.0 million in the prior year. Notably, domestic revenue grew to $346.0 million from $322.0 million, and revenue from Federated Hermes Funds also rose to $344.8 million from $337.2 million.
Net income attributable to Federated Hermes, Inc. for Q3 2024 was $87.5 million, up from $75.0 million in Q3 2023. For the nine-month period, net income decreased to $183.6 million from $216.8 million in the previous year. Earnings per share for Q3 2024 increased to $1.06 from $0.86, while for the nine months, it decreased to $2.20 from $2.44.
The company experienced significant fee waivers, totaling $110.3 million in Q3 2024, compared to $142.4 million in Q3 2023. For the nine months, fee waivers were $321.6 million, down from $398.8 million in the previous year. The decline in fee waivers reflects a strategic adjustment in response to market conditions.
Federated Hermes' assets under management (AUM) increased to $800.5 billion as of September 30, 2024, a 12% rise from $715.2 billion a year earlier. This growth was driven by a 13% increase in money market assets and a 12% increase in fixed-income assets. However, average equity assets decreased by 2% for the three months ended September 30, 2024.
In terms of strategic developments, Federated Hermes authorized a share repurchase program in October 2023, allowing for the repurchase of up to 5.0 million shares of Class B common stock. As of September 30, 2024, approximately 1.2 million shares remained available for repurchase, with 3.5 million shares repurchased for $111.5 million during the nine-month period.
The company also reported a non-cash impairment of $66.3 million related to an indefinite-lived intangible asset in Q2 2024, which impacted overall profitability. Additionally, the effective tax rate for Q3 2024 was 26.3%, slightly down from 26.5% in Q3 2023, while the nine-month effective tax rate increased to 31.5% from 25.6% due to a valuation allowance on foreign deferred tax assets.
About FEDERATED HERMES, INC.
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