SEI Investments Company (SEIC) Cash Flow Statement

The dispersion in OCF conversion — from 0.43 in 2025Q2 to 1.45 in 2025Q3 — appears driven by working capital dynamics tied to the company's lending activities and timing of fee collections rather than by structural shifts in cash generation quality. Recent quarters show a mixed picture: 2026Q3 posted a healthy 1.30 conversion on $168.3M net income, yet 2026Q2 recorded only 0.64, suggesting that while SEIC's cash generation capacity is adequate on an annualized basis, quarterly noise warrants caution for any model relying on sequential OCF trends. The absence of debt issuance across all ten periods confirms that organic cash generation, not leverage, funds operations — a notable strength versus levered peers like Northern Trust.

In peak buyback quarters such as 2024Q4 ($247.2M) and 2025Q1 ($203.7M), total capital return approached or exceeded that quarter's OCF ($195.3M and $146.5M respectively), implying that buyback activity was partly funded from the accumulated cash and investment portfolio rather than current earnings. This is sustainable given the fortress balance sheet with zero debt and a $399M cash position, but it signals that the buyback pace is discretionary rather than mechanically tied to cash generation — an important distinction for modeling future capital return. The dividend, by contrast, is modest and stable at roughly $240-255M annualized, covering well under half of buyback expenditure and representing a low-risk anchor for total shareholder yield.

In the five quarters from 2024Q2 through 2025Q4, provisions consistently exceeded $240M per quarter — often surpassing reported net income — creating a structural drag on cash conversion that forced the company to rely on balance sheet assets to fund buybacks. The normalization to an average of $103.1M in 2026 releases roughly $140M per quarter back into the cash flow statement, which may explain the more sustainable OCF-to-NI ratios seen in 2026Q1 (1.27) and 2026Q3 (1.30). However, the volatility in provision levels across the full ten-quarter window suggests that the company's credit-related cash obligations are not yet on a stable footing, and investors should not extrapolate the current low run-rate without further evidence of sustained normalization.