Financial Analysis

Business Combination Rivington Acquisition On April 7, 2025, FHL acquired a majority (60%) equity interest in Rivington, a U.K.-based renewable energy project development business, from its founding shareholders (Sellers). The acquisition provides an opportunity to further accelerate Federated Hermes growth in markets outside of the U.S. The share purchase agreement provided for an upfront cash payment of 23.6 million ($30.0 million) for the majority (60%) equity interest in Rivington. The upfront cash payment included 12.9 million ($16.4 million) paid to Rivington for newly issued shares principally to provide funds for growth capital and debt repayment. The share purchase agreement also provides for a series of contingent purchase price payments, which can total as much as 10.7 million ($13.6 million) in the aggregate, with an estimated fair value as of the acquisition date of 2.1 million ($2.7 million), based on meeting certain revenue thresholds over the next three years. The share purchase agreement and other related transaction documents contain certain negotiated warranties, covenants and other terms customary for similar transactions in the U.K. FHL and Sellers entered into an arrangement pursuant to the Shareholders Agreement relating to Rivington Energy (Management) Limited, which grants FHL the right to exercise a call option to acquire Sellers remaining 40% interest in Rivington at fair value between January 1, 2026 and December 31, 2033 and grants Sellers a right …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Commitments and Contingencies (a) Contractual From time to time, pursuant to agreements entered into in connection with certain transactions, Federated Hermes is obligated to make future payments under various agreements to which it is a party. (b) Guarantees and Indemnifications On an intercompany basis, various subsidiaries of Federated Hermes guarantee certain financial obligations of Federated Hermes, Inc., and of other consolidated subsidiaries, and Federated Hermes, Inc. guarantees certain financial and performance-related obligations of various wholly-owned subsidiaries. Federated Hermes or its subsidiaries also can guarantee the obligations of certain offerings, such as direct lending funds, as a condition to making seed or other investments in them. In addition, in the normal course of business, Federated Hermes has entered into contracts that provide a variety of indemnifications. Typically, obligations to indemnify third parties arise in the context of contracts entered into by Federated Hermes, under which Federated Hermes agrees to hold the other party harmless against losses arising out of the contract, provided the other partys actions are not deemed to have breached an agreed-upon standard of care. In each of these circumstances, payment by Federated Hermes is contingent on the other party making a claim for indemnity, subject to Federated Hermes right to challenge the claim. Further, Federated Hermes obligations under these agreements can be limited in terms …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Debt Unsecured Senior Notes On March 17, 2022, pursuant to the Note Purchase Agreement, Federated Hermes issued unsecured senior notes in the aggregate amount of $350 million, at a fixed interest rate of 3.29% per annum, payable semiannually in arrears in March and September in each year of the agreement. Citigroup Global Markets Inc. and PNC Capital Markets LLC acted as lead placement agents in relation to the $350 million Notes and certain subsidiaries of Federated Hermes are guarantors of the obligations owed under the Note Purchase Agreement. The Note Purchase Agreement is recorded, net of unamortized issuance costs, in Long-Term Debt on the Consolidated Balance Sheets and was $348.4 million and $348.1 million at December 31, 2025 and 2024, respectively. T he entire principal amount of the $350 million Notes will become due March 17, 2032, subject to certain prepayment requirements under limited conditions. Federated Hermes can elect to prepay the $350 million Notes under certain limited circumstances including with a make-whole amount if prepaid without the consent of the holders of the $350 million Notes. The Note Purchase Agreement does not feature a facility for the further i ssuance of additional notes or borrowing of any other amounts and there is no commitment fee payable in connection with the $350 million Notes. The Note Purchase Agreement includes representations and warranties, affirmative and negative financial covenants, including an interest coverage ratio c …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

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 …

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Share-Based Compensation Federated Hermes long-term stock-incentive compensation is provided under the Stock Incentive Plan, as amended and subsequently approved by shareholders from time to time. Share-based awards are granted to reward Federated Hermes employees and non-management directors who have contributed to the success of Federated Hermes and to provide incentive to increase their efforts on behalf of Federated Hermes. Since the Stock Incentive Plans inception, a total of 36.1 million shares of Class B common stock have been authorized for granting share-based awards in the form of restricted stock, stock options or other share-based awards. As of December 31, 2025, 2.3 million shares are available under the Stock Incentive Plan. Share-based compensation expense recognized in Operating Expenses Compensation and Related was $29.1 million, $28.8 million and $33.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. The associated tax benefits recorded in connection with share-based compensation expense were $7.0 million, $7.0 million and $8.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. At December 31, 2025, the maximum remaining unrecognized compensation expense related to share-based awards approximated $92 million which is expected to be recognized over a weighted-average period of approximately seven years. Federated Hermes restricted stock awards represent shares of Federated Hermes Class B common stock that ma …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements Fair value is the price that would be received to sell an asset or the price that would be paid to transfer a liability as of the measurement date. A fair value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The levels are: Level 1 Quoted prices for identical instruments in active markets. Level 1 assets can include equity and debt securities that are traded in an active exchange market, including shares of mutual funds. Level 2 Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 assets and liabilities may include debt and equity securities, purchased loans and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable market data inputs. Level 3 Valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active markets. NAV Practical Expedient Investments that calculate NAV per share (or its equivalent) as a practical expedient. These investments have been excluded from the fair value hierarchy. (a) Fair Value Measurements on a Recurring Basis The following table presents fair value measurements for classes …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Intangible Assets (a) Indefinite-lived intangible assets Indefinite-lived intangible assets are recorded in Intangible Assets, net on the Consolidated Balance Sheets and include rights to manage fund assets ($244.3 million and $237.4 million at December 31, 2025 and 2024, respectively) and trade names ($52.9 million and $49.2 million at December 31, 2025 and 2024, respectively). The increase in indefinite-lived intangible assets at December 31, 2025 as compared to December 31, 2024 was due to an increase in the value of intangible assets denominated in a foreign currency as a result of foreign exchange rate fluctuations. Due to actual results trailing projected results, driven by a combination of lower gross sales and higher redemptions for the quarter ended June 30, 2024, management concluded that an indicator of potential impairment existed for the indefinite-lived intangible asset related to the FHL right to manage public fund assets acquired in connection with the 2018 FHL acquisition. Management used an income-based approach, the discounted cash flow method, to value the asset as of June 30, 2024, which resulted in a non-cash impairment charge of $66.3 million. The non-cash impairment was recorded in Operating Expenses Intangible Asset Related on the Consolidated Statements of Income. There were no other impairments during the year ended December 31, 2024 and no impairments during the years ended December 31, 2025 and 2023. (b) Finite-lived intangible assets Finite-lived …

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Income Taxes Income Tax Provision consisted of the following expense/(benefit) components for the years ended December 31: (in thousands) 2025 2024 2023 Current: Federal $ 105,825 $ 112,218 $ 91,194 State 16,349 15,419 11,645 Foreign 488 477 (540) Total Current 122,662 128,114 102,299 Deferred: Federal 12,638 (4,760) 3,686 State (448) (446) (185) Foreign (1,421) (9,729) 751 Total Deferred $ 10,769 $ (14,935) $ 4,252 Total $ 133,431 $ 113,179 $ 106,551 The components of income before income taxes consisted of the following for the years ended December 31: (in thousands) 2025 2024 2023 U.S. $ 575,627 $ 502,997 $ 449,420 Non-U.S. (28,101) (121,388) (38,088) Income Before Income Taxes $ 547,526 $ 381,609 $ 411,332 The reconciliation between income tax expense/(benefit) and the statutory income tax rate consisted of the following for the years ended December 31: (dollars in thousands) 2025 2024 2023 Amount Percent Amount Percent Amount Percent U.S. Federal Statutory Tax Rate $ 114,980 21.0 % $ 80,138 21.0 % $ 86,380 21.0 % State and Local Income Taxes, Net of Federal Income Tax Effect 1 12,836 2.4 11,814 3.1 9,491 2.3 Foreign Tax Effects U.K. Statutory tax rate difference between U.K. & U.S. (1,194) (0.2) (4,851) (1.3) (1,391) (0.3) Other Nontaxable or Nondeductible Items (1,454) (0.3) 1,746 0.5 2,969 0.7 Nontaxable dividend income (4,378) (0.8) (8,051) (2.1) (1,248) (0.3) Net Valuation Allowance 12,021 2.2 26,550 7.0 7,731 1.9 Other Foreign Jurisdictions (26) 0.0 846 0.2 147 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases Federated Hermes has material operating leases related to its corporate headquarters in Pittsburgh, Pennsylvania. These leases expire in 2030 and have renewal options for additional periods through 2040. These leases include provisions for leasehold improvement incentives, rent escalation and certain penalties for early termination. In addition, Federated Hermes has various other operating lease agreements primarily for facilities. These leases are noncancelable and expire on various dates through the year 2055. Most leases include renewal options for additional rental periods that would end on various dates through 2041 and, in certain cases, escalation clauses. The value of the ROU assets and lease liabilities recognized do not include the consideration of any renewal options, as they are not yet reasonably certain to be exercised. Federated Hermes may enter into, modify or terminate certain leases in accordance with the lease agreements. During the year ended December 31, 2025, these transactions resulted in non-cash increases of $3.4 million, $3.0 million and $6.4 million to Right-of-Use Assets, net, Other Long-Term Assets and Lease Liabilities, respectively, on the Consolidated Balance Sheets. During the years ended December 31, 2024 and 2023, these transactions resulted in non-cash increases of $20.0 million and $20.3 million, respectively, to Right-of-Use Assets, net and Lease Liabilities (both current and long-term) on the Consolidated Balance Sheets. During th …

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Recently Adopted Accounting Guidance In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU updates income tax disclosures by requiring annual disclosures of disaggregated information, based on meeting a quantitative threshold, about a reporting entitys effective tax rate reconciliation as well as information on income taxes paid. The update was adopted retrospectively for Federated Hermes December 31, 2025 Form 10-K. The adoption did not have a material impact on Federated Hermes disclosures. Recently Issued Accounting Guidance Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03 Reporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of income statement expenses. This ASU updates expense disclosures by requiring additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The update is effective for Federated Hermes for the December 31, 2027 Form 10-K, with early adoption permitted, and allows for either the prospective or retrospective adoption method. Management is currently evaluating this ASU to determine its impact on Federated Hermes disclosures. In September 2025, the FASB issued ASU No. 2025-06 IntangiblesGoodwill and Other Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting …

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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 …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Segment and Geographic Information Federated Hermes operates in one operating segment, the investment management business. Federated Hermes CEO is the CODM. The CODM utilizes a consolidated approach to allocate resources and assess performance. The CODM assesses performance and decides how to allocate resources based on revenue and net income as reported on the Consolidated Statements of Income. The measure of segment assets is reported on the Consolidated Balance Sheets as Total Assets. The CODM uses revenue and net income in making key operating decisions, including approvals for business acquisitions, high-level compensation decisions, determination of shareholder dividends, including special dividends, repurchasing company stock, developing and seeding new offerings, modifying existing offerings and determining funding of significant technology projects. Federated Hermes revenue from U.S. and non-U.S. operations were as follows for the years ended December 31: (in thousands) 2025 2024 2023 U.S. $ 1,557,819 $ 1,384,559 $ 1,291,959 Non-U.S. 1 242,844 247,534 317,615 Total Revenue $ 1,800,663 $ 1,632,093 $ 1,609,574 1 This represents revenue earned by non-U.S. domiciled subsidiaries, primarily in the U.K. Federated Hermes Right-of-Use Assets, net and Property and Equipment, net for U.S. and non-U.S. operations were as follows at December 31: (in thousands) 2025 2024 U.S. $ 89,664 $ 105,110 Non-U.S. 1 30,967 25,165 Total Right-of-Use Assets, net and Property and Equipment, ne …

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Summary of Significant Accounting Policies (a) Nature of Operations Federated Hermes provides investment advisory, administrative, distribution and other services to the Federated Hermes Funds and Separate Accounts in both domestic and international markets. In addition, Federated Hermes markets and provides stewardship, real estate development and renewable energy project development services to various domestic and international companies. For presentation purposes in the Consolidated Financial Statements, the Federated Hermes Funds are considered to be affiliates of Federated Hermes. The majority of Federated Hermes revenue is derived from investment advisory services provided to the Federated Hermes Funds and Separate Accounts through various subsidiaries pursuant to investment advisory contracts. These advisory subsidiaries are registered as investment advisors under the Advisers Act or operate in similar capacities under applicable jurisdictional law. U.S.-domiciled Federated Hermes Funds are generally distributed by a wholly-owned subsidiary registered as a broker/dealer under the 1934 Act and under applicable state laws. Non-U.S.-domiciled Federated Hermes Funds are generally distributed by subsidiaries and third-party distribution firms which are registered (as required) under applicable jurisdictional law. Federated Hermes investment offerings are distributed within the U.S. financial intermediary, U.S. institutional and international markets. (b) Basis of Presentat …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Common Stock The Class A Shareholder has the entire voting rights of Federated Hermes; however, without the consent of the majority of the holders of Class B common stock, the Class A Shareholder cannot alter Federated Hermes structure, dispose of all or substantially all of its assets, amend its Articles of Incorporation or Bylaws to adversely affect the Class B common shareholders, or liquidate or dissolve Federated Hermes. With respect to dividends, distributions and liquidation rights, the Class A common stock and Class B common stock have equal preferences and rights. (a) Dividends Cash dividends of $104.9 million, $184.8 million and $98.1 million were paid in 2025, 2024 and 2023, respectively, to holders of Federated Hermes common stock. Of the amount paid in 2024, $84.2 million represented a $1.00 per share special dividend. All dividends were considered ordinary dividends for tax purposes. (b) Treasury Stock In October 2023, the board of directors authorized a share repurchase program with no stated expiration date that allowed the repurchase of up to 5.0 million shares of Class B common stock. This program was fulfilled in March 2025. In October 2024, the board of directors authorized a share repurchase program with no stated expiration date that allowed the repurchase of up to 5.0 million shares of Class B common stock. This program was fulfilled in December 2025. In July 2025, the board of directors authorized an additional share repurchase program with no stated e …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

Subsequent Events On January 29, 2026, the board of directors declared a $0.34 per share dividend. The dividend was payable to shareholders of record as of February 6, 2026, resulting in $25.9 million being paid on February 13, 2026.

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Business Combination Rivington Acquisition On April 7, 2025, Federated Hermes Limited (FHL) acquired a majority (60%) equity interest in Rivington Energy (Management) Limited (Rivington), a United Kingdom (U.K.)-based renewable energy project development business, from its founding shareholders (Sellers). The acquisition provides an opportunity to further accelerate Federated Hermes growth in markets outside of the U.S. The share purchase agreement provided for an upfront cash payment of 23.6 million ($30.0 million) for the majority (60%) equity interest in Rivington. The upfront cash payment included 12.9 million ($16.4 million) paid to Rivington for newly issued shares principally to provide funds for growth capital and debt repayment. The share purchase agreement also provides for a series of contingent purchase price payments, which can total as much as 10.7 million ($13.6 million) in the aggregate, with an estimated fair value as of the acquisition date of 2.1 million ($2.7 million), based on meeting certain revenue thresholds over the next three years. The share purchase agreement and other related transaction documents contain certain negotiated warranties, covenants and other terms customary for similar transactions in the U.K. FHL and Sellers entered into an arrangement pursuant to the Shareholders Agreement relating to Rivington, which grants FHL the right to exercise a call option to acquire Sellers remaining 40% interest in Rivington at fair value between January …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Commitments and Contingencies (a) Contractual From time to time, pursuant to agreements entered into in connection with certain transactions, Federated Hermes is obligated to make future payments under various agreements to which it is a party. See Note (9) for additional information regarding these payments. (b) Guarantees and Indemnifications On an intercompany basis, various subsidiaries of Federated Hermes guarantee certain financial obligations of Federated Hermes, Inc., and of other consolidated subsidiaries, and Federated Hermes, Inc. guarantees certain financial and performance-related obligations of various wholly-owned subsidiaries. Federated Hermes or its subsidiaries also can guarantee the obligations of certain offerings, such as direct lending funds, as a condition to making seed or other investments in them. In addition, in the normal course of business, Federated Hermes has entered into contracts that provide a variety of indemnifications. Typically, obligations to indemnify third parties arise in the context of contracts entered into by Federated Hermes, under which Federated Hermes agrees to hold the other party harmless against losses arising out of the contract, provided the other partys actions are not deemed to have breached an agreed-upon standard of care. In each of these circumstances, payment by Federated Hermes is contingent on the other party making a claim for indemnity, subject to Federated Hermes right to challenge the claim. Further, Federated …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Debt Unsecured Senior Notes On March 17, 2022, Federated Hermes entered into a Note Purchase Agreement (Note Purchase Agreement) by and among Federated Hermes and the purchasers of certain unsecured senior notes in the aggregate amount of $350 million ($350 million Notes), at a fixed interest rate of 3.29% per annum, payable semiannually in arrears in March and September in each year of the agreement. Citigroup Global Markets Inc. and PNC Capital Markets LLC acted as lead placement agents in relation to the $350 million Notes and certain subsidiaries of Federated Hermes are guarantors of the obligations owed under the Note Purchase Agreement. The Note Purchase Agreement is recorded, net of unamortized issuance costs, in Long-Term Debt on the Consolidated Balance Sheets and was $348.5 million and $348.4 million at June 30, 2026 and December 31, 2025, respectively. T he entire principal amount of the $350 million Notes will become due March 17, 2032, subject to certain prepayment requirements under limited conditions. Federated Hermes can elect to prepay the $350 million Notes under certain limited circumstances including with a make-whole amount if prepaid without the consent of the holders of the $350 million Notes. The Note Purchase Agreement does not feature a facility for the further issuance of additional notes or borrowing of any other amounts and there is no commitment fee payable in connection with the $350 million Notes. The Note Purchase Agreement includes representa …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents Federated Hermes revenue disaggregated by asset class: Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2026 2025 2026 2025 Money market $ 252,636 $ 226,000 $ 509,820 $ 449,346 Equity 152,989 118,999 296,632 236,902 Fixed-income 49,035 48,286 97,721 97,720 Other 48,116 31,559 77,560 64,416 Total Revenue $ 502,776 $ 424,844 $ 981,733 $ 848,384 The following table presents Federated Hermes revenue disaggregated by performance obligation: Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2026 2025 2026 2025 Investment Advisory $ 337,721 $ 287,435 $ 657,129 $ 574,895 Administrative Services 110,117 101,657 220,402 202,766 Distribution 39,013 28,322 81,785 57,087 Other 15,925 7,430 22,417 13,636 Total Revenue $ 502,776 $ 424,844 $ 981,733 $ 848,384 The following table presents Federated Hermes revenue disaggregated by offering type: Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2026 2025 2026 2025 Federated Hermes Funds $ 424,253 $ 357,446 $ 831,731 $ 712,795 Separate Accounts 69,786 62,088 136,789 126,175 Other 8,737 5,310 13,213 9,414 Total Revenue $ 502,776 $ 424,844 $ 981,733 $ 848,384 …

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Share-Based Compensation During the six months ended June 30, 2026, Federated Hermes awarded 318,347 shares of restricted Class B common stock in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under the Stock Incentive Plan. This restricted stock, which was granted on the bonus payment date and issued out of treasury, generally vests over a three-year period. Federated Hermes also awarded 82,000 shares of restricted Class B common stock under this same plan that generally vest over a ten-year period. Federated Hermes awarded 20,636 shares of restricted Class B common stock under the Federated Hermes U.K. Sub-Plan that generally vest over a five-year period. During the year ended December 31, 2025, Federated Hermes awarded 394,020 shares of restricted Class B common stock in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under the Stock Incentive Plan. This bonus restricted stock, which was granted on the bonus payment date and issued out of treasury, generally vests over a three-year period. Federated Hermes also awarded 349,000 shares of restricted Class B common stock under this same plan that generally vest over a ten-year period. In addition, Federated Hermes awarded 69,500 shares of restricted Class B common stock under the Federated Hermes U.K. Sub-Plan that generally vest over a five-year period.

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Fair Value Measurements Fair value is the price that would be received to sell an asset or the price that would be paid to transfer a liability as of the measurement date. A fair value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The levels are: Level 1 Quoted prices for identical instruments in active markets. Level 1 assets can include equity and debt securities that are traded in an active exchange market, including shares of mutual funds. Level 2 Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 assets and liabilities may include debt and equity securities, purchased loans and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable market data inputs. Level 3 Valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active markets. NAV Practical Expedient Investments that calculate NAV per share (or its equivalent) as a practical expedient. These investments have been excluded from the fair value hierarchy. (a) Fair Value Measurements on a Recurring Basis The following table presents fair value measurements for classes …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Intangible Assets, including Goodwill Intangible Assets, net at June 30, 2026 increased $90.3 million from December 31, 2025 primarily due to intangible assets recorded in connection with the FCP acquisition ($102.8 million), partially offset by a decrease due to amortization expense ($9.8 million). Goodwill at June 30, 2026 increased $229.0 million from December 31, 2025 primarily due to $231.7 million of goodwill recorded in connection with the FCP acquisition.

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Income Taxes The income tax provision was $37.2 million for the three-month period ended June 30, 2026, as compared to $34.1 million for the same period in 2025. The increase in the income tax provision was primarily due to increased U.S. pre-tax income in 2026. The effective tax rate was 25.8% for the three-month period ended June 30, 2026, as compared to 26.1% for the same period in 2025. The decrease in the effective tax rate was primarily due to a valuation allowance on foreign deferred tax assets and lower foreign losses in the three-month period ended June 30, 2026 as compared to the same period in 2025. The income tax provision was $71.0 million for the six-month period ended June 30, 2026, as compared to $66.3 million for the same period in 2025. The increase in the income tax provision was primarily due to increased U.S. pre-tax income in 2026. The effective tax rate was 25.9% for the six-month period ended June 30, 2026, as compared to 24.8% for the same period in 2025. The increase in the effective tax rate was primarily due to a valuation allowance on foreign deferred tax assets and increased foreign losses in the six months ended June 30, 2026 as compared to the same period in 2025.

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Recently Issued Accounting Guidance Not Yet Adopted Expense Disaggregation In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03 Reporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of income statement expenses. This ASU updates expense disclosures by requiring additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The update is effective for Federated Hermes for the December 31, 2027 Form 10-K, with early adoption permitted, and allows for either the prospective or retrospective adoption method. Management is currently evaluating this ASU to determine its impact on Federated Hermes disclosures. Software Costs In September 2025, the FASB issued ASU No. 2025-06 IntangiblesGoodwill and Other Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software. This ASU amends certain aspects of the accounting for and disclosure of software costs under Accounting Standards Codification (ASC) 350-40 IntangiblesGoodwill and OtherInternal-Use Software by removing references to software development phases for cost capitalization and specifying the disclosures required under ASC 360-10 Property, Plant, and Equipment. The update is effective for Federated Hermes for the March 31, 2028 Form 10-Q with early adoption permitted, and allows for the retrospective, mo …

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Revenue from Contracts with Customers The following table presents Federated Hermes revenue disaggregated by asset class: Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2026 2025 2026 2025 Money market $ 252,636 $ 226,000 $ 509,820 $ 449,346 Equity 152,989 118,999 296,632 236,902 Fixed-income 49,035 48,286 97,721 97,720 Other 48,116 31,559 77,560 64,416 Total Revenue $ 502,776 $ 424,844 $ 981,733 $ 848,384 The following table presents Federated Hermes revenue disaggregated by performance obligation: Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2026 2025 2026 2025 Investment Advisory $ 337,721 $ 287,435 $ 657,129 $ 574,895 Administrative Services 110,117 101,657 220,402 202,766 Distribution 39,013 28,322 81,785 57,087 Other 15,925 7,430 22,417 13,636 Total Revenue $ 502,776 $ 424,844 $ 981,733 $ 848,384 For the three- and six-month periods ended June 30, 2026, Federated Hermes recorded performance fees, including carried interest, of $1.4 million and $1.8 million, respectively, which were recorded at a point in time and included in the investment advisory performance obligation. For the three- and six-month periods ended June 30, 2025, Federated Hermes recorded performance fees, including carried interest, of $1.4 million and $7.3 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 offerin …

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Segment and Geographic Information Federated Hermes operates in one operating segment, the investment management business. Federated Hermes Chief Executive Officer (CEO) is the chief operating decision maker (CODM). The CODM utilizes a consolidated approach to allocate resources and assess performance. The CODM assesses performance and decides how to allocate resources based on revenue and net income as reported on the Consolidated Statements of Income. The measure of segment assets is reported on the Consolidated Balance Sheets as Total Assets. The CODM uses revenue and net income in making key operating decisions, including approvals for business acquisitions, high-level compensation decisions, determination of shareholder dividends, including special dividends, repurchasing company stock, developing and seeding new offerings, modifying existing offerings and determining funding of significant technology projects. Federated Hermes revenue from U.S. and non-U.S. operations were as follows for each period presented: Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2026 2025 2026 2025 Domestic $ 441,345 $ 370,429 $ 864,358 $ 736,231 Foreign 1 61,431 54,415 117,375 112,153 Total Revenue $ 502,776 $ 424,844 $ 981,733 $ 848,384 1 This represents revenue earned by non-U.S. domiciled subsidiaries, primarily in the U.K. Federated Hermes Right-of-Use Assets, net and Property and Equipment, net for U.S. and non-U.S. operations were as follows: (in thousands) June 3 …

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Significant Accounting Policies For a complete listing of Federated Hermes significant accounting policies, please refer to Federated Hermes Annual Report on Form 10-K for the year ended December 31, 2025. …

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Equity In October 2024, the board of directors authorized a share repurchase program with no stated expiration date that allowed the repurchase of up to 5.0 million shares of Class B common stock. This program was fulfilled in December 2025. In July 2025, the board of directors authorized an additional share repurchase program with no stated expiration date that allows the repurchase of up to 5.0 million shares of Class B common stock. No other program existed as of June 30, 2026. The program authorizes executive management to determine the timing and the amount of shares for each purchase. The repurchased stock is to be held in treasury for employee share-based compensation plans, potential acquisitions and other corporate activities, unless the board of directors subsequently determines to retire the repurchased stock and restore the shares to authorized but unissued status (rather than holding the shares in treasury). During the six months ended June 30, 2026, Federated Hermes repurchased approximately 2.3 million shares of its Class B common stock for $124.9 million, nearly all of which were repurchased in the open market. At June 30, 2026, approximately 2.3 million shares remained available to be repurchased under this share repurchase program. The following table presents the activity for the Class B common stock and Treasury stock for the three and six months ended June 30, 2026 and 2025. Class A shares have been excluded as there was no activity during these same peri …

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Subsequent Events On July 30, 2026, the board of directors declared a $0.38 per share dividend to Federated Hermes Class A and Class B common stock shareholders of record as of August 7, 2026 to be paid on August 14, 2026. …

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