Revenue from Contracts with Customers The following table presents Federated Hermes’ revenue disaggregated by asset class:
| | | | | | | | | | | | | | | | | |
| (in thousands) | 2025 | | 2024 | | 2023 |
| | | | | |
| Money market | $ | 947,989 | | | $ | 837,948 | | | $ | 754,074 | |
| Equity | 513,278 | | | 473,065 | | | 483,650 | |
| Fixed-income | 197,226 | | | 195,798 | | | 189,280 | |
| Other | 142,170 | | | 125,282 | | | 182,570 | |
| Total Revenue | $ | 1,800,663 | | | $ | 1,632,093 | | | $ | 1,609,574 | |
The following table presents Federated Hermes’ revenue disaggregated by performance obligation:
| | | | | | | | | | | | | | | | | |
| (in thousands) | 2025 | | 2024 | | 2023 |
| Investment Advisory | $ | 1,199,236 | | | $ | 1,097,866 | | | $ | 1,115,783 | |
| Administrative Services | 419,759 | | | 387,531 | | | 343,332 | |
| Distribution | 140,058 | | | 120,276 | | | 126,350 | |
| Other | 41,610 | | | 26,420 | | | 24,109 | |
| Total Revenue | $ | 1,800,663 | | | $ | 1,632,093 | | | $ | 1,609,574 | |
During the years ended December 31, 2025, 2024 and 2023, Federated Hermes recorded performance fees, including carried interest, of $12.5 million, $11.5 million and $65.4 million, respectively, which were recorded at a point in time and included in the investment advisory performance obligation.
The following table presents Federated Hermes’ revenue disaggregated by offering type:
| | | | | | | | | | | | | | | | | |
| (in thousands) | 2025 | | 2024 | | 2023 |
| Federated Hermes Funds | $ | 1,511,881 | | | $ | 1,373,700 | | | $ | 1,348,591 | |
| Separate Accounts | 255,762 | | | 240,422 | | | 244,952 | |
| Other | 33,020 | | | 17,971 | | | 16,031 | |
| Total Revenue | $ | 1,800,663 | | | $ | 1,632,093 | | | $ | 1,609,574 | |
For nearly all revenue, Federated Hermes is not required to disclose certain estimates of revenue expected to be recorded in future periods as a result of applying the following exemptions: (1) contract terms are short-term in nature (i.e., expected duration of one year or less due to termination provisions) and (2) the expected variable consideration would be allocated entirely to future service periods.
Federated Hermes expects to recognize revenue in the future related to the unsatisfied portion of certain services, primarily stewardship services, real estate development performance obligations and renewable energy project development obligations at December 31, 2025. Generally, contracts are billed in arrears on a quarterly basis and have a three-year duration, after which the customer can terminate the agreement with notice, generally from three to 12 months. Based on existing contracts and the applicable foreign exchange rates as of December 31, 2025, Federated Hermes may recognize future fixed revenue from these services as presented in the following table:
| | | | | | | | |
| (in thousands) | | |
| 2026 | | $ | 10,443 | |
| 2027 | | 1,760 | |
| 2028 | | 561 | |
| 2029 and Thereafter | | 224 | |
| Total Remaining Unsatisfied Performance Obligations | | $ | 12,988 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.