Fourth Quarter 2025 Earnings Presentation February 5, 2026 Forward Looking Statements This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although we believe the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that these expecta ...

分组1 - Victory Capital Holdings reported quarterly earnings of $1.78 per share, exceeding the Zacks Consensus Estimate of $1.66 per share, and up from $1.45 per share a year ago, representing an earnings surprise of +7.23% [1] - The company posted revenues of $374.12 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.59%, and an increase from year-ago revenues of $232.37 million [2] - Victory Capital shares have increased by approximately 9.4% since the beginning of the year, outperforming the S&P 500's gain of 1.1% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $1.62 on revenues of $365.12 million, and for the current fiscal year, it is $6.89 on revenues of $1.51 billion [7] - The Zacks Industry Rank for Financial - Investment Management is currently in the bottom 38% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - The estimate revisions trend for Victory Capital was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6]

Financial Performance - Fourth-quarter revenue increased 61.0% to $374.1 million compared to $232.4 million in the same quarter of 2024, driven by higher average AUM[20] - GAAP net income for the fourth quarter rose 16.9% to $112.8 million, or $1.32 per diluted share, up from $96.5 million, or $1.11 per diluted share, in the prior quarter[18] - Adjusted net income with tax benefit increased 59.5% to $151.7 million, or $1.78 per diluted share, compared to $95.1 million, or $1.45 per diluted share, in the same quarter last year[21] - Total revenue for the year ended December 31, 2025, increased 46.2% to $1.3 billion compared to $893.5 million in 2024[23] - Net income attributable to common shareholders for the year ended December 31, 2025, was $270.151 million, compared to $288.864 million in 2024, indicating a decrease of 6.5%[35] - Basic earnings per share for the year ended December 31, 2025, was $4.13, down from $4.47 in 2024, a decline of 7.6%[35] Assets Under Management (AUM) - Total client assets reached $316.6 billion, with assets under management (AUM) at $313.8 billion, an increase of $3.2 billion from the previous quarter[15] - Total assets under management (AUM) increased to $313,775 million as of December 31, 2025, up from $310,644 million at September 30, 2025, and significantly higher than $171,930 million at December 31, 2024[46] - The average total client assets for the year ended December 31, 2025, was $272.134 million, compared to $174.542 million in 2024[42] - The company reported a beginning AUM of $30.584 billion for U.S. Mid Cap Equity and $14.785 billion for U.S. Small Cap Equity as of December 31, 2025[58] - As of December 31, 2025, total assets under management (AUM) reached $313.77 billion, an increase from $171.93 billion at the beginning of the year[70] Cash Flows - Long-term gross flows for the fourth quarter were $17.1 billion, while long-term net flows were negative at ($2.1) billion[9] - Gross client cash inflows for the year ended December 31, 2025, were $59,985 million, compared to $26,167 million for the year ended December 31, 2024, reflecting a substantial increase[46] - Gross client cash inflows for the year ended December 31, 2025, totaled $21.916 billion, while gross client cash outflows were $21.441 billion, resulting in net client cash flows of $475 million[58] - The company experienced a net cash outflow of $4.456 million in AUM for the year ended December 31, 2025[42] - For the three months ended December 31, 2025, net client cash flows were negative at $(2.111) billion, with gross inflows of $17.472 billion and outflows of $19.583 billion[66] Expenses and Margins - The adjusted EBITDA margin for the fourth quarter was 52.8%, reflecting a 10 basis point increase from the previous quarter[19] - The company reported a GAAP operating margin of 40.9% for the fourth quarter, an increase of 270 basis points from the previous quarter[18] - Personnel compensation and benefits expenses increased to $362.991 million for the year ended December 31, 2025, from $217.214 million in 2024, a rise of 67.1%[35] - Total operating expenses for the year ended December 31, 2025, were $827.708 million, compared to $465.963 million in 2024, an increase of 77.5%[35] Market Performance - Market appreciation for the year ended December 31, 2025, was $37,742 million, compared to $18,100 million for the year ended December 31, 2024, indicating strong market performance[46] - The company experienced a market depreciation of $(2.237) million for the year ended December 31, 2024, indicating challenges in the previous year[66] - The company reported a market appreciation of $6.273 million in total client assets for the three months ended December 31, 2025[42] - Market appreciation contributed $37.742 billion to the AUM for the year ended December 31, 2025[70] Strategic Initiatives - The company achieved $97 million in net expense synergies from the integration of Pioneer Investments, with an additional $13 million expected in 2026[6] - The company plans to continue developing new teams and strategies to enhance its investment offerings and market position[31] - The company plans to continue expanding its market presence, particularly following the acquisition of Pioneer Investments, which added $114.6 billion to AUM[44] - The company plans to continue expanding its market presence and product offerings, leveraging the recent acquisition to enhance its competitive position[59] Risks and Considerations - Victory Capital's forward-looking statements indicate potential risks including market conditions and client withdrawals, which could impact future performance[31] - The impact of divested assets from the closure of three investment franchises was approximately $1 billion for the three months ended September 30, 2025[55] Non-GAAP Measures - Adjusted EBITDA and Adjusted Net Income are used to measure the operating profitability of the company, eliminating one-time acquisition and restructuring costs[74] - The tax benefit from amortization of acquired intangible assets and goodwill provides significant supplemental economic benefits to the company[75] - The company emphasizes the importance of non-GAAP financial measures to provide investors with insights into ongoing operating performance[74] - Adjustments to GAAP Net Income for calculating Adjusted EBITDA include adding back various expenses such as income tax, interest, and stock-based compensation[76]

Wall Street expects a year-over-year increase in earnings on higher revenues when Victory Capital Holdings (VCTR) reports results for the quarter ended December 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released ...

Group 1 - The total Assets Under Management (AUM) includes both discretionary and non-discretionary assets, excluding Other Assets [1] - AUM encompasses various types of funds, including institutional and retail share classes, money market, and VIP funds [1] - The report includes wrap program accounts, Collective Investment Trusts (CITs), Unified Managed Accounts (UMAs), UCITS, private funds, and non-U.S. domiciled pooled vehicles [1] Group 2 - The data represents only ETF assets held by third parties, excluding those held by other Victory Capital products [2] - Low-fee institutional assets, which range from 2 to 4 basis points, are included in Victory's Regulatory Assets Under Management reported in Form ADV Part 1 [2]

Core Viewpoint - Victory Portfolios II has announced the liquidation of three ETFs due to a regular review of its product lineup to better meet client needs [1]. Group 1: Liquidation Details - The ETFs affected are the VictoryShares WestEnd Economic Cycle Bond ETF (BMDL), VictoryShares Hedged Equity Income ETF (HEJD), and VictoryShares International Volatility Wtd ETF (CIL) [1]. - After January 28, 2026, the ETFs will stop accepting purchase orders for Creation Units, and shareholders can sell their holdings on the Nasdaq Stock Market until January 29, 2026 [2]. - The ETFs will cease trading at the end of January 29, 2026, with liquidation anticipated around February 4, 2026 [2]. Group 2: Financial Implications - Victory Capital Management Inc. will cover all fees and expenses related to the liquidation and distribution of cash proceeds to investors, excluding brokerage fees [3]. - Shareholders will recognize a capital gain or loss for tax purposes based on the amount received for their shares compared to their adjusted basis [3].

Core Insights - Merion Road Capital Management's third-quarter 2025 investor letter indicates a 5.0% return for the Merion Road Small Cap Fund, underperforming the Russell 2000 Index's 12.4% return, while the long-only portfolio achieved a 10.1% return compared to the S&P 500's 8.1% [1] - The strong performance of Kratos significantly contributed to the portfolio's results [1] Company Focus: Victory Capital Holdings, Inc. (NASDAQ:VCTR) - Victory Capital Holdings, Inc. has experienced a one-month return of -2.89% and a 52-week loss of 9.70%, with a market capitalization of $4.123 billion as of November 20, 2025 [2] - The company has successfully closed the acquisition of the Amundi US business, now managing over $300 billion in assets, with positive net flows reported for 2024 and year-to-date 2025 [3] - Victory Capital's management has increased their cost synergy target to $110 million, with historical performance exceeding guidance, and projected free cash flow of at least $7.00 per share next year, indicating a valuation discount compared to peers [3] Market Position and Performance - Victory Capital Holdings, Inc. was held by 22 hedge fund portfolios at the end of the second quarter, an increase from 16 in the previous quarter [4] - The company's third-quarter revenue rose by 3% from the second quarter to $361.2 million [4] - Despite the potential of Victory Capital, the company is viewed as having less upside compared to certain AI stocks, which are considered to carry greater potential and lower downside risk [4]

Core Insights - Victory Capital Holdings, Inc. (VCTR) reported assets under management (AUM) of $313 billion for October 2025, reflecting an increase of nearly 1% from September 2025 [1][8] - The performance of U.S. large-cap and global equity assets grew, while mid-cap and small-cap segments experienced declines [8] - The company’s integrated multi-boutique business model and effective distribution platform are expected to enhance performance in the near term [3] AUM Breakdown - U.S. mid-cap equity AUM decreased by 3.7% to $30.7 billion [1] - U.S. small-cap equity AUM declined by 3.9% to $12.2 billion [1] - Global/non-U.S. equity AUM increased by 2.6% to $29.7 billion [1] - U.S. large-cap equity AUM rose by 2.1% to $61.9 billion [1] - Solutions AUM increased by 2% to $88.7 billion [2] - Fixed-income AUM totaled $80.5 billion, showing a marginal increase [2] - Money market/short-term assets rose by 2.3% to $3.7 billion [2] Market Performance - Over the past six months, VCTR shares have lost 3.7%, compared to the industry's decline of 2.1% [4] - Victory Capital currently holds a Zacks Rank 3 (Hold) [5] Comparison with Peers - Franklin Resources, Inc. (BEN) reported preliminary AUM of $1.69 trillion as of October 31, 2025, which increased by 1.7% from the prior month [6][9]

Client Assets and AUM Growth - Total client assets reached $313.4 billion, with assets under management (AUM) at $310.6 billion as of September 30, 2025, reflecting significant growth from $176.1 billion in 2024[175][188] - AUM increased by $12.1 billion, or 4.1%, from $298.6 billion at June 30, 2025, driven by $14.5 billion in market appreciation, partially offset by $0.3 billion in net outflows[188] - As of September 30, 2025, total Assets Under Management (AUM) reached $310,644 million, up from $176,113 million in 2024, reflecting a significant increase of 76.3% year-over-year[200] - Total Assets Under Management (AUM) as of September 30, 2025, reached $310.64 billion, an increase from $176.11 billion in 2024, representing a growth of 76%[208] - The total long-term assets under management as of September 30, 2025, were $306,985 million, compared to $172,720 million in 2024, reflecting an increase of 77.8%[200] - The company has grown total client assets from $17.9 billion in August 2013 to $313.4 billion as of September 30, 2025, attributed to successful acquisitions and strong investment returns[185] Revenue and Income - Total revenue for the three months ended September 30, 2025, was $361.2 million, up from $225.6 million in the same period in 2024, while total revenue for the nine months was $932.0 million compared to $661.1 million[191] - Net income for the three months ended September 30, 2025, was $96.5 million, compared to $82.0 million in 2024, with net income for the nine months at $217.3 million versus $211.9 million[191] - Adjusted EBITDA for the three months ended September 30, 2025, was $190.5 million, representing 52.7% of revenue, compared to $121.3 million, or 53.7% of revenue, in 2024[191] - Net income attributable to common shareholders for the nine months ended September 30, 2025, was $181.97 million, compared to $211.93 million for the same period in 2024[219] - Earnings per share (EPS) for the three months ended September 30, 2025, were $1.12, compared to $1.26 for the same period in 2024[219] Cash Flows and Financial Activities - The Company recorded a net cash provided by operating activities of $240.4 million for the nine months ended September 30, 2025, a decrease of 3.1% compared to $248.2 million for the same period in 2024[284] - Cash provided by investing activities was $77.7 million for the nine months ended September 30, 2025, primarily from cash acquired through acquisitions of $53.6 million[286] - Cash used in financing activities totaled $329.5 million for the nine months ended September 30, 2025, which included $63.7 million for acquisition consideration and $115.7 million for dividend payments[288] Market Performance and Client Flows - The company generated $17.3 billion in gross flows for the three months ended September 30, 2025, compared to $6.1 billion in 2024, with net outflows of $0.3 billion[188] - Gross client cash inflows for the three months ended September 30, 2025, were $17,296 million, compared to $6,120 million in the same period of 2024, indicating an increase of 182.5%[196] - Net client cash flows for the three months ended September 30, 2025, were negative at $(292) million, an improvement from $(2,636) million in the same period of 2024[196] - The company experienced net outflows of $2.3 billion for the nine months ended September 30, 2025, with significant outflows from U.S. equity strategies[217] Expenses and Costs - Personnel compensation and benefits for the three months ended September 30, 2025, increased by 124.3%, or $53.7 million, to $97.0 million, primarily due to higher salaries and acquisition-related compensation[225] - For the three months ended September 30, 2025, distribution and other asset-based expenses increased by $29.3 million, or 79.6%, to $66.2 million compared to $36.8 million for the same period in 2024, primarily due to higher broker-dealer and platform distribution fees[229] - General and administrative expenses for the three months ended September 30, 2025 increased by $9.4 million, or 67.3%, to $23.5 million compared to $14.0 million for the same period in 2024[231] - Depreciation and amortization for the three months ended September 30, 2025 increased by $14.5 million, or 193.4%, to $22.0 million from $7.5 million for the same period in 2024, due to the amortization of intangible assets from the Amundi US acquisition[233] Acquisitions and Strategic Developments - The acquisition of Amundi U.S. was completed on April 1, 2025, enhancing the company's scale and diversifying its investment capabilities[180][182] - Victory Capital's Solutions Platform manages approximately $52 billion in AUM for non-U.S. investors, supported by a global distribution agreement with Amundi[184] - The company experienced a divestment of approximately $1 billion in assets due to the closure of three Investment Franchises during the third quarter of 2025[202] - Acquisition-related costs for the nine months ended September 30, 2025 were $34.9 million, significantly higher than $9.2 million for the same period in 2024, related to the Amundi US acquisition[238] - Restructuring and integration costs for the nine months ended September 30, 2025 were $25.4 million, compared to $0.8 million for the same period in 2024, primarily related to personnel restructuring[240] Market and Currency Risks - Approximately 9% of AUM is invested in securities denominated in currencies other than the U.S. dollar, which exposes the company to exchange rate risk[295] - A 10% increase or decrease in the value of the U.S. dollar would affect the fair value of AUM by approximately $2.8 billion, impacting revenues by about $13.2 million at a weighted-average fee rate of 47 basis points[295] - The company has not adopted a corporate-level risk management policy for exchange rate risk or client asset management[295] Interest and Debt Management - The Repriced Term Loans, totaling $985.0 million, will mature on September 23, 2032, with an interest rate of SOFR plus a margin of 2.00%[264] - The Company had no outstanding borrowings under the revolving credit facility as of September 30, 2025, maintaining compliance with its financial performance covenants[266] - The company executed a floating-to-fixed interest rate swap to fix the interest rate at 3.465% on $450 million of its Term Loan[296]

Financial Data and Key Metrics Changes - The company achieved record-high gross flows and net flows finished just under flat for the quarter, with total assets reaching $313 billion [5] - Adjusted EBITDA set a new all-time quarterly high at $191 million, resulting in an adjusted EBITDA margin of 52.7% [5][22] - Adjusted earnings per diluted share rose to a record $1.63, up 4% from the second quarter and 20% higher than the quarter immediately preceding the Amundi transaction [5][22] Business Line Data and Key Metrics Changes - Long-term gross flows rose 10% quarter over quarter to $17 billion, reflecting the expanded U.S. distribution team and strong sales outside the U.S. [5][21] - Multiple investment franchises generated positive net long-term flows, including Victory Income Investors, Pioneer Investments, RS Global, Trivalent, and the Victory Shares ETF platform [24] Market Data and Key Metrics Changes - The company currently manages $52 billion of AUM from clients outside the U.S. from 60 countries, where net flows remain positive [7] - 17% of total AUM was from investors outside the United States as of quarter end [23] Company Strategy and Development Direction - The company aims to be a trillion-dollar firm, focusing on strategic acquisitions that enhance its competitive position and shareholder value [34] - The integration process at Pioneer Investments is ahead of plan, with approximately $86 million of net expense synergies achieved on a run-rate basis [6][25] - The company is investing in expanding its distribution capacity outside the U.S. and launching new UCITS products [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the distribution opportunities outside the U.S. and the potential for significant growth in 2026 and beyond [11][46] - The company anticipates a phase of intense consolidation in the industry, which it is well-positioned to navigate [35] Other Important Information - The company repurchased 1.8 million shares during the quarter and has $355 million of capacity remaining on its repurchase authorization [6][27] - The balance sheet remains strong with $116 million of cash and a net leverage ratio of 1.1 times, providing financial flexibility for growth initiatives [27] Q&A Session Summary Question: M&A Strategy and Focus - Management emphasized that all acquisitions will be strategic, aiming for size and scale while also considering smaller, highly strategic deals [34] Question: Pioneer Acquisition Synergies - The company is ahead of synergy targets due to conservative planning and the discovery of operational efficiencies during integration [36][38] Question: Non-U.S. Business Performance - Positive net sales have primarily come from the Pioneer franchise, with expectations for increased flows from legacy Victory products in 2026 [45][46] Question: Inorganic Pipeline and Risks - The inorganic pipeline is full, with active discussions ongoing, and the environment for acquisitions has improved [71][72] Question: Integration Challenges with Alternatives - Management is aware of cultural integration challenges and has been patient in observing the market before pursuing acquisitions in the alternatives space [76]