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Victory Capital Conference Call Summary Company Overview - **Company**: Victory Capital (NasdaqGS: VCTR) - **Assets Under Management**: Over $300 billion as of the end of 2025 [3] - **Business Model**: Operates a multi-independent investment boutique model, combining boutique advantages with centralized resources [3] Industry Consolidation - **Consolidation Trend**: The investment industry is undergoing significant consolidation, with larger firms acquiring smaller ones for scale and distribution [4][5] - **Victory's Role**: Victory Capital has completed 8 acquisitions since its management buyout in 2013 and aims to be a consolidator in the industry [4] - **Growth Objective**: Aiming for $1 trillion in assets under management, which is three times its current level, to remain competitive [5] Financial Performance - **Earnings Growth**: Victory has achieved a 21% cumulative annual growth rate in earnings since going public in 2018, the best in its sector [6] - **Net Flows**: Despite strong earnings, net flows have been negative recently, with active mutual funds experiencing $800 billion in net outflows [6] - **Distribution Investments**: The acquisition of Pioneer has allowed Victory to double its distribution efforts and expand internationally, managing money for clients in 60 countries [6][7] Growth Drivers - **International Distribution**: The international channel is seen as a significant growth opportunity, with a 15-year distribution agreement with Amundi, a $2.7 trillion manager [25][29] - **ETF Growth**: Victory's ETF platform, VictoryShares, is expected to continue growing, with an average fee of 34 basis points and a focus on active solutions [11][12] - **Investment Performance**: Strong investment performance across various asset classes is driving growth, with a focus on independent investment processes [34][35] M&A Strategy - **M&A Approach**: Victory's M&A strategy focuses on acquiring businesses that enhance its platform, expand distribution, and provide size and scale [15][16] - **Pioneer Acquisition**: The acquisition of Pioneer has provided significant synergies, including $110 million in net expense synergies and close to 20% accretion [16][17] - **Alternatives Market**: Victory is cautious about entering the alternatives market, viewing it as richly valued but acknowledges the need for retail investors to access private markets [18][19] Product Development - **SMA Initiatives**: Victory is looking to grow its retail SMA offerings, which are currently net flow positive but not at desired levels [48] - **ETF Share Classes**: There is potential for many mutual funds to have ETF share classes, which could positively impact flows, although not all funds will transition [51][52] Conclusion - **Future Outlook**: Victory Capital is positioned for growth through international expansion, ETF development, and strategic acquisitions, while maintaining a strong focus on investment performance and client experience [20][34]

Core Insights - The company is focused on completing the integration of the Amundi Pioneer acquisition, with $97 million of the planned $110 million in net expense synergies already achieved, indicating approximately 90% completion [1] Group 1: Strategic Goals - The primary goal for the next 12 to 24 months is to finalize the integration of the Amundi Pioneer acquisition [1] - The company aims to enhance its distribution platform by expanding partnerships and training initiatives [1] Group 2: Financial Performance - The successful integration of the acquisition is expected to drive financial performance through realized synergies [1]

Victory Capital Conference Call Summary Company Overview - **Company**: Victory Capital (NasdaqGS: VCTR) - **AUM**: Ended 2025 with $317 billion in Assets Under Management (AUM) [2][7] Key Drivers and Strategies 1. **Amundi Pioneer Acquisition Integration**: - 90% of planned $110 million in net expense synergies completed, with $97 million achieved [7][8] - Focus on completing integration and enhancing distribution platform [7][8] 2. **Distribution Platform Development**: - Expansion of international distribution channels, with positive net flows since acquiring Pioneer [8][9] - Launched five UCITS, including three legacy Victory products, and started selling U.S.-listed ETFs [8][33] 3. **M&A Activity**: - Actively pursuing acquisitions, targeting firms with AUM between $50 billion and $200 billion [9][12] - Emphasis on acquiring sizable platforms similar to the Pioneer acquisition [9][12] Market Sentiment and Challenges 1. **Industry Sentiment**: - Smaller asset managers face challenges in maintaining independence due to distribution and operational costs [22][24] - Increasing trend of firms considering acquisitions or being acquired [26] 2. **Client Segmentation**: - Focus on growing in retirement, insurance, and RIA channels [29][30] - International markets, particularly Asia and Europe, seen as significant growth opportunities [56][58] Product Development and Performance Metrics 1. **Investment Performance**: - Monitoring investment performance as a key metric for success post-acquisition [37] - Positive net flows and strong product demand since Pioneer acquisition [38] 2. **Growth Areas**: - Strong growth anticipated in VictoryShares (ETF business) and fixed income products [41][42] - Development of model portfolios and tax-efficient products planned for 2026 [65][70] Financial Performance and Projections 1. **Margins**: - Current margin guidance at 49%, with recent quarters exceeding 52% [73] - Focus on scalable technology to maintain margins [74] 2. **AUM Growth Target**: - Long-term goal of reaching $1 trillion in AUM, primarily through M&A [75][77] - Expectation of low single-digit organic growth alongside larger acquisitions [77] Capital Allocation Strategy 1. **Prioritization of Acquisitions**: - Primary use of capital will be for acquisitions, followed by stock buybacks [89][92] - Commitment to maintaining and increasing dividends [92] Future Outlook 1. **Industry Trends**: - Anticipation of consolidation within the asset management industry, with larger firms likely to succeed [94][95] - Importance of operational efficiency and technological investment highlighted for future competitiveness [96] 2. **Market Positioning**: - Victory Capital aims to be a trillion-dollar manager with a diverse product offering, including public markets, private markets, and international products [80][81]

Group 1 - Victory Capital will participate in upcoming investor conferences [1]

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]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Victory Capital Holdings (VCTR) due to higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Victory Capital is expected to report quarterly earnings of $1.66 per share, reflecting a year-over-year increase of +14.5% [3]. - Revenues are projected to be $371.52 million, which is a significant increase of 59.9% compared to the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.84% higher in the last 30 days, indicating a positive reassessment by analysts [4]. - The Most Accurate Estimate for Victory Capital is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.33% [12]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - Stocks with a positive Earnings ESP and a solid Zacks Rank have historically produced a positive surprise nearly 70% of the time [10]. Historical Performance - Victory Capital has beaten consensus EPS estimates in three out of the last four quarters, with a recent surprise of +1.88% [13][14]. Industry Context - Another company in the investment management sector, Janus Henderson Group plc (JHG), is expected to report earnings of $1.19 per share, reflecting a year-over-year change of +11.2% [18]. - Janus Henderson's revenues are expected to be $779.26 million, up 10% from the previous year, but it has an Earnings ESP of 0.00%, making predictions about beating the consensus EPS estimate uncertain [19][20].

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]