Victory Capital Reports Record Fourth-Quarter and Full-Year Earnings Per Share

SAN ANTONIO, Texas--(BUSINESS WIRE)--Victory Capital Holdings, Inc. (NASDAQ: VCTR) (“Victory Capital” or “the Company”) today reported financial results for the quarter ended December 31, 2024. “2024 was a transformational year for Victory Capital,” said David Brown, Chairman and Chief Executive Officer. “During 2024, we entered into a strategic relationship with Amundi Asset Management S.A.S ("Amundi”) that will elevate our Company in several ways. Through the acquisition of its U.S. business, the former Pioneer Investments, we will further diversify and deepen our investment capabilities as well as strengthen our U.S. intermediary distribution efforts. Simultaneously, the 15-year exclusive distribution agreement will globalize our Company by substantially broadening and deepening our distribution reach outside of the U.S. “We remain on track to close the acquisition by the end of the first quarter of 2025, and we are reaffirming our previous guidance of $100 million in expense synergies. “Our business and financial performance for the fourth quarter and full year produced record results. We achieved the highest adjusted earnings per diluted share with tax benefit, adjusted EBITDA, and adjusted EBITDA margin in the history of our firm for both the quarterly and full-year periods. “Our Investment Franchises and Solutions platform continued to deliver strong investment performance for our clients. The percentage of our AUM outperforming benchmarks over the respective 3-, 5-, and 10-year periods was 59%, 73%, and 79% at year end. In addition, 66% of our AUM in mutual funds and ETFs was rated four or five stars overall by Morningstar. “We continued to return capital to our shareholders during the quarter. In December, the Board authorized a new $200 million share repurchase program expanding on the prior $100 million authorization that was completed during the quarter. The Board also authorized a 7% increase in our quarterly cash dividend to $0.47 per share, which will be paid in March and is the highest quarterly dividend payout in our Company history. “As always, we continue to focus on serving our clients, which is our top priority.” 1 Total AUM includes both discretionary and non-discretionary client assets. 2 The Company reports its financial results in accordance with generally accepted accounting principles (“GAAP”). Adjusted EBITDA and Adjusted Net Income are not defined by GAAP and should not be regarded as an alternative to any measurement under GAAP. Please refer to the section “Information Regarding Non-GAAP Financial Measures” at the end of this press release for an explanation of Non-GAAP financial measures and a reconciliation to the nearest GAAP financial measure. The table below presents AUM, and certain GAAP and non-GAAP (“adjusted”) financial results. Due to rounding, AUM values and other amounts in this press release may not add up precisely to the totals provided. (in millions except per share amounts or as otherwise noted) For the Three Months Ended For the Year Ended December 31, September 30, December 31, December 31, December 31, 2024 2024 2023 2024 2023 Assets Under Management1 Ending $ 171,930 $ 176,113 $ 161,322 $ 171,930 $ 161,322 Average 175,741 171,876 151,870 169,658 153,455 AUM Long-term Flows2 Long-term Gross $ 6,615 $ 5,876 $ 6,357 $ 25,255 $ 22,651 Long-term Net (1,729 ) (2,631 ) (1,334 ) (7,090 ) (5,584 ) AUM Money Market/Short-term Flows Money Market / Short-term Gross $ 178 $ 244 $ 188 $ 912 $ 853 Money Market / Short-term Net (140 ) (5 ) (47 ) (287 ) (391 ) AUM Total Flows Total Gross $ 6,793 $ 6,120 $ 6,545 $ 26,167 $ 23,504 Total Net (1,870 ) (2,636 ) (1,381 ) (7,377 ) (5,976 ) Consolidated Financial Results (GAAP) Revenue $ 232.4 $ 225.6 $ 205.8 $ 893.5 $ 821.0 AUM revenue realization (in bps) 52.5 52.1 53.6 52.6 53.4 Operating expenses 120.6 105.3 119.5 466.0 492.6 Income from operations 111.7 120.4 86.3 427.5 328.5 Operating margin 48.1 % 53.3 % 41.9 % 47.8 % 40.0 % Net income 76.9 82.0 55.2 288.9 213.2 Earnings per diluted share $ 1.17 $ 1.24 $ 0.82 $ 4.38 $ 3.12 Cash flow from operations 91.8 99.8 97.1 340.0 330.3 Adjusted Performance Results (Non-GAAP)3 Adjusted EBITDA $ 125.5 $ 121.3 $ 107.6 $ 475.6 $ 418.0 Adjusted EBITDA margin 54.0 % 53.7 % 52.3 % 53.2 % 50.9 % Adjusted net income 85.0 78.9 67.4 312.9 269.7 Tax benefit of goodwill and acquired intangible assets 10.1 10.1 9.7 40.2 38.3 Adjusted net income with tax benefit 95.1 89.0 77.0 353.1 307.9 Adjusted net income with tax benefit per diluted share $ 1.45 $ 1.35 $ 1.15 $ 5.36 $ 4.51 1 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. 2 Long-term AUM is defined as total AUM excluding Money Market and Short-term assets. 3 The Company reports its financial results in accordance with GAAP. Adjusted EBITDA and Adjusted Net Income are not defined by GAAP and should not be regarded as an alternative to any measurement under GAAP. Please refer to the section “Information Regarding Non-GAAP Financial Measures” at the end of this press release for an explanation of Non-GAAP financial measures and a reconciliation to the nearest GAAP financial measure. AUM, Flows and Investment Performance At December 31, 2024, Victory Capital had total client assets of $176.1 billion, assets under management of $171.9 billion, and other assets of $4.2 billion. Total AUM decreased by $4.2 billion to $171.9 billion at December 31, 2024, compared with $176.1 billion at September 30, 2024. The decrease was due to negative market action of $2.2 billion and net outflows of $1.9 billion. Total gross flows for the fourth quarter were $6.8 billion, including long-term gross flows of $6.6 billion. As of December 31, 2024, Victory Capital offered 124 investment strategies through its 11 autonomous Investment Franchises and Solutions Platform. The table below presents outperformance against benchmarks by AUM as of December 31, 2024. Percentage of AUM Outperforming Benchmark Trailing Trailing Trailing Trailing 1-Year 3-Years 5-Years 10-Years 47% 59% 73% 79% Fourth Quarter 2024 Compared with Third Quarter 2024 Revenue increased 3.0% to $232.4 million in the fourth quarter, compared with $225.6 million in the third quarter, primarily due to higher average AUM over the comparable period. GAAP operating margin contracted 520 basis points in the fourth quarter to 48.1%, down from 53.3% in the third quarter primarily due to a $15.6 million increase in compensation related expenses partially offset by a $2.9 million decrease in acquisition-related costs. Fourth quarter GAAP net income decreased 6.2% to $76.9 million, or $1.17 per diluted share, down from $82.0 million, or $1.24 per diluted share, in the prior quarter. Adjusted net income with tax benefit increased 6.8% to $95.1 million, or $1.45 per diluted share in the fourth quarter, up from $89.0 million, or $1.35 per diluted share, in the third quarter. Adjusted EBITDA increased 3.5% to $125.5 million in the fourth quarter, versus $121.3 million in the third quarter. Adjusted EBITDA margin expanded 30 basis points in the fourth quarter of 2024 to 54.0% compared with 53.7% in the prior quarter. Fourth Quarter 2024 Compared with Fourth Quarter 2023 Revenue for the three months ended December 31, 2024, increased 12.9% to $232.4 million, compared with $205.8 million in the same quarter of 2023 as a result of higher average AUM over the comparable period. Operating expenses increased 1.0% to $120.6 million, compared with $119.5 million in last year’s fourth quarter due to the combination of increases in compensation and acquisition related expenses, partially offset by a non-cash difference in amounts recorded to the change in the fair value of consideration payable for acquisitions as well as a decrease in general and administrative expenses. GAAP operating margin expanded 620 basis points to 48.1% in the fourth quarter, from 41.9% in the same quarter of 2023. GAAP net income increased 39.4% to $76.9 million, or $1.17 per diluted share, in the fourth quarter compared with $55.2 million, or $0.82 per diluted share, in the same quarter of 2023. Adjusted net income with tax benefit increased 23.5% to $95.1 million, or $1.45 per diluted share, in the fourth quarter, compared with $77.0 million, or $1.15 per diluted share in the same quarter last year. Adjusted EBITDA increased 16.7% to $125.5 million, compared with $107.6 million in the same quarter of last year. Year-over-year, adjusted EBITDA margin expanded 170 basis points to 54.0% in the fourth quarter of 2024, compared with 52.3% in the same quarter last year. Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Revenue for the year ended December 31, 2024, increased 8.8% to $893.5 million, compared with $821.0 million in the same period of 2023. The increase was primarily due to higher average AUM. Operating expenses decreased 5.4% to $466.0 million for the year ended December 31, 2024, compared with $492.6 million in the same period in 2023 due to the combination of a non-cash $20.5 million difference in amounts recorded to the change in the fair value of consideration payable for acquisitions as well as a decreases in compensation related expenses, distribution and other asset based expenses, and depreciation and amortization expense, partially offset by an increase in acquisition-related costs. GAAP operating margin was 47.8% for the year ended December 31, 2024, a 780 basis point increase from the 40.0% recorded in the same period in 2023. GAAP net income increased 35.5% to $288.9 million, or $4.38 per diluted share, in 2024 compared with $213.2 million, or $3.12 per diluted share, in 2023. Adjusted net income with tax benefit increased 14.7% to $353.1 million for the year ended December 31, 2024, up from $307.9 million in 2023. On a per-share basis, adjusted net income with tax benefit increased 18.8% to $5.36 per diluted share for the year ended December 31, 2024 compared to $4.51 per diluted share in 2023. For the year ended December 31, 2024, adjusted EBITDA increased 13.8% to $475.6 million, compared with $418.0 million for the same period in 2023. Year-over-year, adjusted EBITDA margin expanded 230 basis points to 53.2% for the year ended December 31, 2024, compared with 50.9% in the previous year. Balance Sheet / Capital Management The total debt outstanding as of December 31, 2024 was approximately $972 million and consisted of an existing term loan balance of $625 million and the 2021 Incremental Term Loans balance of $347 million. The Company’s Board of Directors approved a regular quarterly cash dividend of $0.47 per share. The dividend is payable on March 10, 2025, to shareholders of record on February 18, 2025. Conference Call, Webcast and Slide Presentation The Company will host a conference call tomorrow morning, February 7, at 8:00 a.m. ET to discuss the results. Analysts and investors may participate in the question-and-answer session. To participate in the conference call, please call 1-800-715-9871 (domestic) or 1-646-307-1963 (international), shortly before 8:00 a.m. ET and reference the Victory Capital Conference Call. A live, listen-only webcast will also be available via the investor relations section of the Company’s website at https://ir.vcm.com. Prior to the call, a supplemental slide presentation that will be used during the conference call will be available on the Events and Presentations page of the Company’s investor relations website. For anyone who is unable to join the live event, an archive of the webcast will be available for replay shortly after the call concludes. About Victory Capital Victory Capital is a diversified global asset management firm with total assets under management of $171.9 billion, and $176.1 billion in total client assets, as of December 31, 2024. The Company employs a next-generation business strategy that combines boutique investment qualities with the benefits of a fully integrated, centralized operating and distribution platform. Victory Capital provides specialized investment strategies to institutions, intermediaries, retirement platforms and individual investors. With 11 autonomous Investment Franchises and a Solutions Business, Victory Capital offers a wide array of investment products and services, including mutual funds, ETFs, separately managed accounts, alternative investments, third-party ETF model strategies, collective investment trusts, private funds, a 529 Education Savings Plan, and brokerage services. Victory Capital is headquartered in San Antonio, Texas, with offices and investment professionals in the U.S. and around the world. To learn more please visit www.vcm.com or follow Victory Capital on Facebook, Twitter, and LinkedIn. FORWARD-LOOKING STATEMENTS This earnings release may contain forward-looking statements within the meaning of applicable U.S. federal and non-U.S. securities laws. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “assume,” “budget,” “continue,” “estimate,” “future,” “objective,” “outlook,” “plan,” “potential,” “predict,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof and include, but are not limited to, statements regarding the proposed transaction and the outlook for Victory Capital’s or Amundi’s future business and financial performance. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Victory Capital’s and Amundi’s control and could cause Victory Capital’s and Amundi’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Although it is not possible to identify all such risks and factors, they include, among others, the following: continued geopolitical uncertainty including the conflicts in Ukraine and Israel, risks that the conditions to closing the transaction with Amundi US will be satisfied and the transaction will close on the anticipated timeline, if at all; risks associated with expected benefits, or impact on our business, of the proposed transaction, including our ability to achieve any expected synergies; reductions in AUM based on investment performance, client withdrawals, difficult market conditions and other factors such as a pandemic; the nature of the Company’s contracts and investment advisory agreements; the Company’s ability to maintain historical returns and sustain its historical growth; the Company’s dependence on third parties to market its strategies and provide products or services for the operation of its business; the Company’s ability to retain key investment professionals or members of its senior management team; the Company’s reliance on the technology systems supporting its operations; the Company’s ability to successfully acquire and integrate new companies; the concentration of the Company’s investments in long-only small- and mid-cap equity and U.S. clients; risks and uncertainties associated with non-U.S. investments; the Company’s efforts to establish and develop new teams and strategies; the ability of the Company’s investment teams to identify appropriate investment opportunities; the Company’s ability to limit employee misconduct; the Company’s ability to meet the guidelines set by its clients; the Company’s exposure to potential litigation (including administrative or tax proceedings) or regulatory actions; the Company’s ability to implement effective information and cyber security policies, procedures and capabilities; the Company’s substantial indebtedness; the potential impairment of the Company’s goodwill and intangible assets; disruption to the operations of third parties whose functions are integral to the Company’s ETF platform; the Company’s determination that Victory Capital is not required to register as an "investment company" under the 1940 Act; the fluctuation of the Company’s expenses; the Company’s ability to respond to recent trends in the investment management industry; the level of regulation on investment management firms and the Company’s ability to respond to regulatory developments; the competitiveness of the investment management industry; the level of control over the Company retained by Crestview GP; and other risks and factors listed under "Risk Factors" and elsewhere in the Company’s filings with the SEC. Such forward-looking statements are based on numerous assumptions regarding Victory Capital’s present and future business strategies and the environment in which it will operate in the future. Any forward-looking statement made in this press release speaks only as of the date hereof. Except as required by law, Victory Capital assumes no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Victory Capital Holdings, Inc. and Subsidiaries Unaudited Consolidated Statements of Operations (in thousands except per share data and percentages) For the Three Months Ended For the Year Ended December 31, September 30, December 31, December 31, December 31, 2024 2024 2023 2024 2023 Revenue Investment management fees $ 183,826 $ 177,809 $ 160,677 $ 704,583 $ 640,876 Fund administration and distribution fees 48,545 47,819 45,117 188,894 180,152 Total revenue 232,371 225,628 205,794 893,477 821,028 Expenses Personnel compensation and benefits 58,857 43,243 53,949 217,214 220,992 Distribution and other asset-based expenses 36,924 36,828 36,438 146,489 149,596 General and administrative 14,268 14,029 16,702 56,694 56,287 Depreciation and amortization 7,514 7,510 7,984 30,176 41,647 Change in value of consideration payable for acquisition of business 294 (1,600 ) 4,000 2,694 23,236 Acquisition-related costs 2,135 5,075 83 11,285 217 Restructuring and integration costs 634 180 320 1,411 595 Total operating expenses 120,626 105,265 119,476 465,963 492,570 Income from operations 111,745 120,363 86,318 427,514 328,458 Operating margin 48.1 % 53.3 % 41.9 % 47.8 % 40.0 % Other income (expense) Interest income and other income (expense) 1,768 3,551 3,765 10,441 8,732 Interest expense and other financing costs (14,657 ) (16,414 ) (16,561 ) (63,836 ) (61,282 ) Loss on debt extinguishment (263 ) — — (363 ) — Total other expense, net (13,152 ) (12,863 ) (12,796 ) (53,758 ) (52,550 ) Income before income taxes 98,593 107,500 73,522 373,756 275,908 Income tax expense (21,654 ) (25,517 ) (18,316 ) (84,892 ) (62,751 ) Net income $ 76,939 $ 81,983 $ 55,206 $ 288,864 $ 213,157 Earnings per share of common stock Basic $ 1.19 $ 1.26 $ 0.85 $ 4.47 $ 3.22 Diluted 1.17 1.24 0.82 4.38 3.12 Weighted average number of shares outstanding Basic 64,428 64,875 65,309 64,607 66,202 Diluted 65,519 66,057 66,935 65,928 68,214 Dividends declared per share $ 0.44 $ 0.41 $ 0.32 $ 1.555 $ 1.28 Victory Capital Holdings, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures1 (unaudited; in thousands except per share data and percentages) For the Three Months Ended For the Year Ended December 31, September 30, December 31, December 31, December 31, 2024 2024 2023 2024 2023 Net income (GAAP) $ 76,939 $ 81,983 $ 55,206 $ 288,864 $ 213,157 Income tax expense (21,654 ) (25,517 ) (18,316 ) (84,892 ) (62,751 ) Income before income taxes $ 98,593 $ 107,500 $ 73,522 $ 373,756 $ 275,908 Interest expense 13,971 15,649 15,532 60,799 57,820 Depreciation 2,228 2,210 2,273 8,959 8,842 Other business taxes 376 366 305 1,525 1,707 Amortization of acquisition-related intangible assets 5,286 5,300 5,711 21,217 32,805 Stock-based compensation 1,007 972 1,503 4,246 6,496 Acquisition, restructuring and exit costs 3,063 (11,513 ) 5,586 1,735 28,982 Debt issuance costs 981 775 3,128 3,385 5,394 Adjusted EBITDA $ 125,505 $ 121,259 $ 107,560 $ 475,622 $ 417,954 Adjusted EBITDA margin 54.0 % 53.7 % 52.3 % 53.2 % 50.9 % Net income (GAAP) $ 76,939 $ 81,983 $ 55,206 $ 288,864 $ 213,157 Adjustment to reflect the operating performance of the Company Other business taxes 376 366 305 1,525 1,707 Amortization of acquisition-related intangible assets 5,286 5,300 5,711 21,217 32,805 Stock-based compensation 1,007 972 1,503 4,246 6,496 Acquisition, restructuring and exit costs 3,063 (11,513 ) 5,586 1,735 28,982 Debt issuance costs 981 775 3,128 3,385 5,394 Tax effect of above adjustments (2,679 ) 1,025 (4,061 ) (8,028 ) (18,847 ) Adjusted net income $ 84,973 $ 78,908 $ 67,378 $ 312,944 $ 269,694 Adjusted net income per diluted share $ 1.30 $ 1.19 $ 1.01 $ 4.75 $ 3.95 Tax benefit of goodwill and acquired intangible assets $ 10,141 $ 10,141 $ 9,655 $ 40,171 $ 38,252 Tax benefit of goodwill and acquired intangible assets per diluted share $ 0.15 $ 0.15 $ 0.14 $ 0.61 $ 0.56 Adjusted net income with tax benefit $ 95,114 $ 89,049 $ 77,033 $ 353,115 $ 307,946 Adjusted net income with tax benefit per diluted share $ 1.45 $ 1.35 $ 1.15 $ 5.36 $ 4.51 1 The Company reports its financial results in accordance with GAAP. Adjusted EBITDA and Adjusted Net Income are not defined by GAAP and should not be regarded as an alternative to any measurement under GAAP. Please refer to the section “Information Regarding Non-GAAP Financial Measures” at the end of this press release for an explanation of Non-GAAP financial measures and a reconciliation to the nearest GAAP financial measure. Victory Capital Holdings, Inc. and Subsidiaries Unaudited Consolidated Balance Sheets (In thousands, except for shares) December 31, 2024 December 31, 2023 Assets Cash and cash equivalents $ 126,731 $ 123,547 Investment management fees receivable 83,307 71,888 Fund administration and distribution fees receivable 16,014 14,238 Other receivables 1,346 1,444 Prepaid expenses 8,634 5,785 Investments in proprietary funds, at fair value 605 534 Deferred compensation plan investments, at fair value 34,608 31,274 Property and equipment, net 11,874 19,578 Goodwill 981,805 981,805 Other intangible assets, net 1,260,614 1,281,832 Other assets 22,053 10,691 Total assets $ 2,547,591 $ 2,542,616 Liabilities and stockholders' equity Accounts payable and accrued expenses $ 57,951 $ 56,477 Accrued compensation and benefits 51,648 55,456 Consideration payable for acquisition of business 139,894 217,200 Deferred compensation plan liability 34,608 31,274 Deferred tax liability, net 157,120 128,714 Other liabilities 20,871 11,225 Long-term debt(1) 963,862 989,269 Total liabilities 1,425,954 1,489,615 Stockholders' equity: Common stock; $0.01 par value per share: 2024 - 600,000,000 shares authorized, 83,947,949 shares issued and 63,653,212 shares outstanding; 2023 - 600,000,000 shares authorized, 82,404,305 shares issued and 64,254,714 shares outstanding 839 824 Additional paid-in capital 752,371 728,283 Treasury stock, at cost: 2024 - 20,294,737 shares; 2023 - 18,149,591 shares (574,856 ) (444,286 ) Accumulated other comprehensive income 18,683 31,328 Retained earnings 924,600 736,852 Total stockholders' equity 1,121,637 1,053,001 Total liabilities and stockholders’ equity $ 2,547,591 $ 2,542,616 1 Balances at December 31, 2024 and 2023 are shown net of unamortized loan discount and debt issuance costs in the amount of $8.3 million and $12.4 million, respectively. The gross amount of the debt outstanding was $972.2 million and $1,001.7 million as of December 31, 2024 and 2023, respectively. Victory Capital Holdings, Inc. and Subsidiaries Total Client Assets (unaudited; in millions) For the Three Months Ended December 31, September 30, December 31, 2024 2024 2023 Beginning AUM $ 176,113 $ 168,681 $ 148,879 Beginning other assets1 4,981 5,094 4,627 Beginning total client assets 181,094 173,775 153,506 AUM net cash flows (1,870 ) (2,636 ) (1,381 ) Other assets net cash flows (675 ) (446 ) 200 Total client assets net cash flows (2,545 ) (3,082 ) (1,181 ) AUM market appreciation (depreciation) (2,237 ) 10,076 13,853 Other assets market appreciation (depreciation) (141 ) 333 462 Total client assets market appreciation (depreciation) (2,378 ) 10,409 14,315 AUM realizations and distributions — (2 ) (27 ) Acquired & divested assets / Net transfers (76 ) (7 ) (2 ) Ending AUM 171,930 176,113 161,322 Ending other assets 4,165 4,981 5,289 Ending total client assets 176,096 181,094 166,611 Average total client assets2 180,104 176,806 156,734 For the Year Ended December 31, December 31, 2024 2023 Beginning AUM $ 161,322 $ 147,762 Beginning other assets1 5,289 5,190 Beginning total client assets 166,611 152,952 AUM net cash flows (7,377 ) (5,976 ) Other assets net cash flows (1,627 ) (591 ) Total client assets net cash flows (9,004 ) (6,567 ) AUM market appreciation (depreciation) 18,100 21,188 Other assets market appreciation (depreciation) 504 690 Total client assets market appreciation (depreciation) 18,604 21,878 AUM realizations and distributions (2 ) (100 ) Acquired & divested assets / Net transfers (113 ) (1,552 ) Ending AUM 171,930 161,322 Ending other assets 4,165 5,289 Ending total client assets 176,096 166,611 Average total client assets3 174,542 158,268 1 Includes low-fee (2 to 4 bps) institutional assets, previously reported in the Solutions asset class within the by asset class table and in Separate Accounts and Other Pooled Vehicles within the by vehicle table. These assets are included as part of Victory’s Regulatory Assets Under Management reported in Form ADV Part 1. 2 For the three-month periods ending December 31, 2024, September 30, 2024 and December 31, 2023 total client assets revenue realization was 51.3 basis points, 50.8 basis points and 52.1 basis points, respectively. 3 For the year ended December 31, 2024 and 2023 total client assets revenue realization was 51.2 basis points and 51.9 basis points, respectively. Victory Capital Holdings, Inc. and Subsidiaries Total Assets Under Management1 (unaudited; in millions) For the Three Months Ended December 31, September 30, December 31, 2024 2024 2023 Beginning assets under management $ 176,113 $ 168,681 $ 148,879 Gross client cash inflows 6,793 6,120 6,545 Gross client cash outflows (8,663 ) (8,756 ) (7,926 ) Net client cash flows (1,870 ) (2,636 ) (1,381 ) Market appreciation (depreciation) (2,237 ) 10,076 13,853 Realizations and distributions — (2 ) (27 ) Acquired & divested assets / Net Transfers (76 ) (7 ) (2 ) Ending assets under management 171,930 176,113 161,322 Average assets under management 175,741 171,876 151,870 For the Year Ended December 31, December 31, 2024 2023 Beginning assets under management $ 161,322 $ 147,762 Gross client cash inflows 26,167 23,504 Gross client cash outflows (33,545 ) (29,480 ) Net client cash flows (7,377 ) (5,976 ) Market appreciation (depreciation) 18,100 21,188 Realizations and distributions (2 ) (100 ) Acquired assets / Net transfers (113 ) (1,552 ) Ending assets under management 171,930 161,322 Average assets under management 169,658 153,455 1 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. Victory Capital Holdings, Inc. and Subsidiaries Other Assets (Institutional)1 (unaudited; in millions) For the Three Months December 31, September 30, December 31, 2024 2024 2023 Beginning other assets (institutional) $ 4,981 $ 5,094 $ 4,627 Gross client cash inflows — — 200 Gross client cash outflows (675 ) (446 ) — Net client cash flows (675 ) (446 ) 200 Market appreciation (depreciation) (141 ) 333 462 Realizations and distributions — — — Acquired & divested assets / Net transfers — — — Ending other assets (institutional) 4,165 4,981 5,289 Average other assets (institutional)2 4,363 4,930 4,864 For the Year Ended December 31, December 31, 2024 2023 Beginning other assets (institutional) $ 5,289 $ 5,190 Gross client cash inflows 467 600 Gross client cash outflows (2,094 ) (1,191 ) Net client cash flows (1,627 ) (591 ) Market appreciation (depreciation) 504 690 Realizations and distributions — — Acquired & divested assets / Net transfers — — Ending other assets (institutional) 4,165 5,289 Average other assets (institutional)3 4,883 4,813 1 Includes low-fee (2 to 4 bps) institutional assets, previously reported in the Solutions asset class within the by asset class table and in Separate Accounts and Other Pooled Vehicles within the by vehicle table. These assets are included as part of Victory’s Regulatory Assets Under Management reported in Form ADV Part 1. 2 For the three-month periods ending December 31, 2024, September 30, 2024 and December 31, 2023 total other assets (institutional) revenue realization was 3.2 basis points, 3.4 basis points and 3.6 basis points, respectively. 3 For the year ended December 31, 2024 and 2023 total other assets (institutional) revenue realization was 3.4 basis points and 3.6 basis points, respectively. Victory Capital Holdings, Inc. and Subsidiaries Assets Under Management by Asset Class (unaudited; in millions) For the Three Months Ended By Asset Class Global / U.S. Mid U.S. Small Fixed U.S. Large Non-U.S. Alternative Total Money Market/ Total Cap Equity Cap Equity Income Cap Equity Equity Solutions Investments Long-term Short-term AUM1 December 31, 2024 Beginning assets under management $ 32,333 $ 15,591 $ 25,081 $ 14,239 $ 19,752 $ 62,544 $ 3,178 $ 172,720 $ 3,393 $ 176,113 Gross client cash inflows 1,163 393 987 75 1,535 2,291 170 6,615 178 6,793 Gross client cash outflows (1,881 ) (1,215 ) (1,391 ) (413 ) (1,023 ) (2,037 ) (384 ) (8,344 ) (319 ) (8,663 ) Net client cash flows (718 ) (822 ) (404 ) (338 ) 513 254 (214 ) (1,729 ) (140 ) (1,870 ) Market appreciation (depreciation) (1,008 ) 21 (342 ) 279 (1,143 ) (100 ) 13 (2,279 ) 43 (2,237 ) Realizations and distributions — — — — — — — — — — Acquired assets / Net transfers (24 ) (6 ) 66 (32 ) (26 ) (105 ) 3 (125 ) 48 (76 ) Ending assets under management $ 30,584 $ 14,785 $ 24,402 $ 14,148 $ 19,095 $ 62,593 $ 2,980 $ 168,586 $ 3,344 $ 171,930 September 30, 2024 Beginning assets under management $ 31,015 $ 15,182 $ 24,398 $ 13,983 $ 18,459 $ 58,936 $ 3,390 $ 165,362 $ 3,320 $ 168,681 Gross client cash inflows 975 584 1,344 73 578 2,143 179 5,876 244 6,120 Gross client cash outflows (2,300 ) (1,278 ) (1,640 ) (486 ) (485 ) (1,877 ) (443 ) (8,508 ) (249 ) (8,756 ) Net client cash flows (1,325 ) (694 ) (296 ) (413 ) 94 265 (263 ) (2,631 ) (5 ) (2,636 ) Market appreciation (depreciation) 2,649 1,105 973 690 1,212 3,368 51 10,049 27 10,076 Realizations and distributions — — — — — — (2 ) (2 ) — (2 ) Acquired assets / Net transfers (5 ) (2 ) 6 (21 ) (13 ) (25 ) 3 (58 ) 51 (7 ) Ending assets under management $ 32,333 $ 15,591 $ 25,081 $ 14,239 $ 19,752 $ 62,544 $ 3,178 $ 172,720 $ 3,393 $ 176,113 December 31, 2023 Beginning assets under management $ 28,235 $ 14,650 $ 23,790 $ 11,596 $ 14,807 $ 49,371 $ 3,222 $ 145,671 $ 3,208 $ 148,879 Gross client cash inflows 1,008 555 1,072 62 1,251 1,910 498 6,357 188 6,545 Gross client cash outflows (1,548 ) (938 ) (1,890 ) (329 ) (657 ) (1,977 ) (352 ) (7,691 ) (234 ) (7,926 ) Net client cash flows (541 ) (383 ) (818 ) (267 ) 595 (67 ) 146 (1,334 ) (47 ) (1,381 ) Market appreciation (depreciation) 2,917 1,698 1,392 1,320 1,387 5,012 91 13,816 38 13,853 Realizations and distributions — — — — — — (27 ) (27 ) — (27 ) Acquired assets / Net transfers (8 ) (6 ) (8 ) (15 ) (16 ) (20 ) (1 ) (74 ) 72 (3 ) Ending assets under management $ 30,604 $ 15,959 $ 24,355 $ 12,635 $ 16,772 $ 54,296 $ 3,431 $ 158,051 $ 3,271 $ 161,322 1Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. Victory Capital Holdings, Inc. and Subsidiaries Assets Under Management by Asset Class (unaudited; in millions) For the Year Ended By Asset Class Global / U.S. Mid U.S. Small Fixed U.S. Large Non-U.S. Alternative Total Money Market/ Total Cap Equity Cap Equity Income Cap Equity Equity Solutions Investments Long-term Short-term AUM1 December 31, 2024 Beginning assets under management $ 30,604 $ 15,959 $ 24,355 $ 12,635 $ 16,772 $ 54,296 $ 3,431 $ 158,051 $ 3,271 $ 161,322 Gross client cash inflows 4,516 2,043 4,912 284 3,762 8,634 1,105 25,255 912 26,167 Gross client cash outflows (7,685 ) (4,195 ) (5,905 ) (1,540 ) (2,893 ) (8,509 ) (1,618 ) (32,345 ) (1,200 ) (33,545 ) Net client cash flows (3,169 ) (2,152 ) (993 ) (1,256 ) 869 125 (513 ) (7,090 ) (287 ) (7,377 ) Market appreciation (depreciation) 3,189 1,035 924 2,873 1,570 8,290 47 17,929 172 18,100 Realizations and distributions — — — — — — (2 ) (2 ) — (2 ) Acquired assets / Net transfers (40 ) (58 ) 116 (104 ) (115 ) (118 ) 17 (301 ) 188 (113 ) Ending assets under management $ 30,584 $ 14,785 $ 24,402 $ 14,148 $ 19,095 $ 62,593 $ 2,980 $ 168,586 $ 3,344 $ 171,930 December 31, 20231 Beginning assets under management $ 27,892 $ 15,103 $ 26,353 $ 10,973 $ 14,160 $ 46,317 $ 3,663 $ 144,460 $ 3,302 $ 147,762 Gross client cash inflows 5,090 2,741 4,024 284 2,581 6,337 1,593 22,651 853 23,504 Gross client cash outflows (5,536 ) (3,859 ) (6,129 ) (1,286 ) (2,304 ) (7,119 ) (2,002 ) (28,235 ) (1,245 ) (29,480 ) Net client cash flows (446 ) (1,117 ) (2,105 ) (1,002 ) 276 (781 ) (409 ) (5,584 ) (391 ) (5,976 ) Market appreciation (depreciation) 3,153 1,978 1,595 2,809 2,431 8,804 270 21,039 149 21,188 Realizations and distributions — — — — — — (100 ) (100 ) — (100 ) Acquired assets / Net transfers 5 (4 ) (1,487 ) (145 ) (96 ) (43 ) 7 (1,763 ) 211 (1,552 ) Ending assets under management $ 30,604 $ 15,959 $ 24,355 $ 12,635 $ 16,772 $ 54,296 $ 3,431 $ 158,051 $ 3,271 $ 161,322 1Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. Victory Capital Holdings, Inc. and Subsidiaries Assets Under Management by Vehicle (unaudited; in millions) For the Three Months Ended By Vehicle Separate Accounts Mutual and Other Funds1 ETFs2 Vehicles3 Total AUM4 December 31, 2024 Beginning assets under management $ 117,044 $ 6,694 $ 52,375 $ 176,113 Gross client cash inflows 3,545 1,167 2,082 6,793 Gross client cash outflows (5,865 ) (130 ) (2,667 ) (8,663 ) Net client cash flows (2,320 ) 1,036 (586 ) (1,870 ) Market appreciation (depreciation) (1,063 ) (146 ) (1,028 ) (2,237 ) Realizations and distributions — — — — Acquired assets / Net transfers (15 ) (76 ) 15 (76 ) Ending assets under management $ 113,645 $ 7,508 $ 50,777 $ 171,930 September 30, 2024 Beginning assets under management $ 112,584 $ 5,440 $ 50,657 $ 168,681 Gross client cash inflows 3,553 992 1,575 6,120 Gross client cash outflows (5,526 ) (158 ) (3,073 ) (8,756 ) Net client cash flows (1,973 ) 834 (1,498 ) (2,636 ) Market appreciation (depreciation) 6,443 426 3,208 10,076 Realizations and distributions — — (2 ) (2 ) Acquired assets / Net transfers (10 ) (7 ) 10 (7 ) Ending assets under management $ 117,044 $ 6,694 $ 52,375 $ 176,113 December 31, 2023 Beginning assets under management $ 101,138 $ 4,710 $ 43,031 $ 148,879 Gross client cash inflows 4,126 343 2,076 6,545 Gross client cash outflows (5,887 ) (356 ) (1,682 ) (7,926 ) Net client cash flows (1,761 ) (13 ) 394 (1,381 ) Market appreciation (depreciation) 9,466 273 4,115 13,853 Realizations and distributions — — (27 ) (27 ) Acquired assets / Net transfers (41 ) — 39 (3 ) Ending assets under management $ 108,802 $ 4,970 $ 47,551 $ 161,322 1 Includes institutional and retail share classes, money market and VIP funds. 2 Represents only ETF assets held by third parties. Excludes ETF assets held by other Victory Capital products. 3 Includes collective trust funds, wrap program accounts, UMAs, UCITS, private funds and non-U.S. domiciled pooled vehicles. 4 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. Victory Capital Holdings, Inc. and Subsidiaries Assets Under Management by Vehicle (unaudited; in millions) For the Year Ended By Vehicle Separate Accounts Mutual and Other Funds1 ETFs2 Vehicles3 Total December 31, 2024 Beginning assets under management $ 108,802 $ 4,970 $ 47,551 $ 161,322 Gross client cash inflows 14,954 3,089 8,124 26,167 Gross client cash outflows (22,408 ) (915 ) (10,222 ) (33,545 ) Net client cash flows (7,454 ) 2,174 (2,097 ) (7,377 ) Market appreciation (depreciation) 12,561 404 5,136 18,100 Realizations and distributions — — (2 ) (2 ) Acquired assets / Net transfers (263 ) (40 ) 189 (113 ) Ending assets under management $ 113,645 $ 7,508 $ 50,777 $ 171,930 December 31, 2023 Beginning assets under management $ 99,447 $ 5,627 $ 42,688 $ 147,762 Gross client cash inflows 15,594 969 6,942 23,504 Gross client cash outflows (21,276 ) (1,567 ) (6,637 ) (29,480 ) Net client cash flows (5,682 ) (599 ) 305 (5,976 ) Market appreciation (depreciation) 15,114 (56 ) 6,130 21,188 Realizations and distributions — — (100 ) (100 ) Acquired assets / Net transfers4 (77 ) (3 ) (1,471 ) (1,552 ) Ending assets under management $ 108,802 $ 4,970 $ 47,551 $ 161,322 1 Includes institutional and retail share classes, money market and VIP funds. 2 Represents only ETF assets held by third parties. Excludes ETF assets held by other Victory Capital products. 3 Includes collective trust funds, wrap program accounts, UMAs, UCITS, private funds and non-U.S. domiciled pooled vehicles. 4 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. Information Regarding Non-GAAP Financial Measures Victory Capital uses non-GAAP financial measures referred to as Adjusted EBITDA and Adjusted Net Income to measure the operating profitability of the Company. These measures eliminate the impact of one-time acquisition, restructuring and integration costs and demonstrate the ongoing operating earnings metrics of the Company. The Company has included these non-GAAP measures to provide investors with the same financial metrics used by management to assess the operating performance of the Company. Adjusted EBITDA Adjustments made to GAAP Net Income to calculate Adjusted EBITDA, as applicable, are: Adding back income tax expense; Adding back interest paid on debt and other financing costs, net of interest income; Adding back depreciation on property and equipment; Adding back other business taxes; Adding back amortization expense on acquisition-related intangible assets; Adding back stock-based compensation expense associated with equity awards issued from pools created in connection with the management-led buyout and various acquisitions and as a result of equity grants related to the IPO; Adding back direct incremental costs of acquisitions, including restructuring costs; Adding back debt issuance cost expense; Adjusting for earnings/losses on equity method investments. Adjusted Net Income Adjustments made to GAAP Net Income to calculate Adjusted Net Income, as applicable, are: Adding back other business taxes; Adding back amortization expense on acquisition-related intangible assets; Adding back stock-based compensation expense associated with equity awards issued from pools created in connection with the management-led buyout and various acquisitions and as a result of any equity grants related to the IPO; Adding back direct incremental costs of acquisitions, including restructuring costs; Adding back debt issuance cost expense; Subtracting an estimate of income tax expense applied to the sum of the adjustments above. Tax Benefit of Goodwill and Acquired Intangible Assets Due to Victory Capital’s acquisitive nature, tax deductions allowed on acquired intangible assets and goodwill provide it with additional significant supplemental economic benefit. The tax benefit of goodwill and intangible assets represent the tax benefits associated with deductions allowed for intangible assets and goodwill generated from prior acquisitions in which the Company received a step-up in basis for tax purposes. Acquired intangible assets and goodwill may be amortized for tax purposes, generally over a 15-year period. The tax benefit from amortization on these assets is included to show the full economic benefit of deductions for all acquired intangible assets with a step-up in tax basis.

Victory Capital Reports Record Fourth-Quarter and Full-Year Earnings Per Share

FAQ

Why Bullish?

How important is it?

Why Long Term?

Related Companies

Related News