Victory Capital Holdings, Inc. (VCTR) reported assets under management (AUM) of $175.5 billion for February 2025. This reflected a 0.6% decline from $176.5 billion as of Jan. 31, 2024.By asset class, VCTR’s U.S. mid cap equity AUM decreased 2.9% from the January level to $30.4 billion. The U.S. small Cap equity AUM of $14.2 billion dipped 5.3%. The global/non-U.S. equity AUM rose 5.8% to $20.6 billion. The U.S. large cap equity AUM decreased 3.7% to $13.9 billion.Victory Capital recorded $65.5 billion in So ...

Assets Under Management (AUM) - Total client assets increased to $176.1 billion as of December 31, 2024, up from $17.9 billion in August 2013 following the management-led buyout[318]. - Assets under management (AUM) rose by $10.6 billion, or approximately 6.6%, to $171.9 billion from $161.3 billion at December 31, 2023, primarily driven by positive market action of $18.1 billion[325]. - Total Assets Under Management (AUM) as of December 31, 2024, reached $171.93 billion, an increase from $161.32 billion in 2023, representing a growth of approximately 6.5%[338]. - Long-term AUM increased to $168.59 billion in 2024 from $158.05 billion in 2023, reflecting a year-over-year growth of about 6.5%[338]. - Fixed Income AUM slightly increased to $24.40 billion in 2024 from $24.36 billion in 2023, while U.S. Large Cap Equity AUM rose to $14.15 billion from $12.64 billion, indicating a growth of approximately 11.9%[338]. - Solutions AUM saw a significant increase to $62.59 billion in 2024, up from $54.30 billion in 2023, marking a growth of around 15.3%[338]. - The average AUM for 2024 was $169.7 billion, compared to $153.5 billion in 2023[328]. - Long-term gross inflows were $25.3 billion for the year ended December 31, 2024, compared to $22.7 billion in 2023[325]. - Total AUM increased by $10.6 billion, or 6.6%, to $171.9 billion at December 31, 2024, from $161.3 billion at December 31, 2023, driven by positive market movement of $18.1 billion, partially offset by net outflows of $7.4 billion[343]. Financial Performance - Total revenue for the year ended December 31, 2024, was $893.5 million, compared to $821.0 million for the year ended December 31, 2023[326]. - Net income increased to $288.9 million for the year ended December 31, 2024, up from $213.2 million in 2023[326]. - Adjusted EBITDA for the year ended December 31, 2024, was $475.6 million, with an adjusted EBITDA margin of 53.2%, compared to $418.0 million and 50.9% in 2023[327]. - Net income for 2024 was $288.9 million, an increase of $75.7 million, or 35.5%, compared to $213.2 million in 2023[375]. - Earnings per share (diluted) increased to $4.38 in 2024, up from $3.12 in 2023, reflecting a growth of 40.5%[375]. - Adjusted Net Income for 2024 was $312.9 million, representing a 16.0% increase from $269.7 million in 2023[409]. Cash Flows and Expenses - The Company recorded net cash provided by operating activities of $339.979 million in 2024, an increase of $9.688 million from $330.291 million in 2023[440]. - Cash used in investing activities decreased to $3.979 million in 2024 from $7.841 million in 2023, primarily due to a decrease in purchases of property and equipment[443]. - Cash used in financing activities increased by $95.6 million to $332.763 million in 2024 from $237.132 million in 2023, mainly due to payment of consideration for acquisition and repayment of long-term senior debt[444]. - Personnel compensation and benefits represent the most significant category of expense, including salaries, incentive compensation, and acquisition-related compensation[359]. - Total operating expenses decreased by $26.6 million, or 5.4%, to $466.0 million in 2024 from $492.6 million in 2023[375]. Market and Client Flows - Net client cash flows for 2024 were negative at $(1.63) billion, compared to $(0.59) billion in 2023, indicating a decline in client inflows[333]. - Market appreciation contributed $504 million to AUM in 2024, down from $690 million in 2023, reflecting a decrease of approximately 27%[333]. - The company experienced a net client cash flow decline of $(7,377) million in 2024, indicating challenges in client retention[340]. - Net outflows were primarily driven by $3.2 billion in U.S. mid cap equity strategies, $2.2 billion in U.S. small cap equity strategies, and $1.3 billion in U.S. large cap equity strategies[344]. Acquisitions and Strategic Initiatives - The company completed the acquisition of WestEnd Advisors on December 31, 2021, enhancing its ETF strategy offerings[319]. - The company also acquired New Energy Capital on November 1, 2021, focusing on clean energy infrastructure investments[320]. - The company aims to maintain a diversified client base across various asset classes and distribution channels to enhance AUM stability[334]. - The company has adjusted its asset class categorization starting January 2022, impacting the reported figures for prior periods[339]. Interest and Financing - Interest expense and other financing costs increased by $2.6 million to $63.8 million in 2024, attributed to a higher average interest rate[400]. - The company incurred $1.0 million in upfront fees and other costs related to the Fifth Amendment to the 2019 Credit Agreement, which extended the maturity date of the $100.0 million revolving facility[429]. - The Company executed a Swap to fix the interest rate at 3.215% on $450 million of its outstanding Term Loan, which was later adjusted to 3.149% after the Swap Amendment[432].

Financial Data and Key Metrics Changes - Total client assets increased to $176.1 billion, up $9.5 billion or 6% from the end of the previous year [11] - Adjusted earnings per diluted share rose more than 7% to $1.45 in the fourth quarter, a record high, and up 26% from $1.15 in the same quarter last year [11] - Adjusted EBITDA reached $126 million with a margin of 54%, both setting new quarterly records [12][27] - For the full year, revenue reached a record high of $893 million, a 9% increase from 2023 [25] Business Line Data and Key Metrics Changes - The ETF platform, Victory Shares, saw strong sales, contributing to the overall growth in assets under management (AUM) [10] - Victory income investors achieved its fourth consecutive quarter of positive net flows, indicating strong performance in the intermediary channel [31] - The average fee rate was 52.5 basis points in the fourth quarter, up four-tenths of a basis point from the third quarter [34] Market Data and Key Metrics Changes - The Amundi U.S. business reported net long-term flows of $2.6 billion in 2024, indicating strong performance across various channels [14][78] - The non-U.S. AUM is projected to exceed $45 billion post-acquisition, with a consistent record of positive net flows since Amundi's acquisition in 2017 [15][16] Company Strategy and Development Direction - The company is on track to close the acquisition of Amundi by the end of the current quarter, with expectations of realizing $100 million in cost synergies by the end of the second year [13] - The focus remains on leveraging the ETF platform and expanding distribution channels to drive organic growth [19][20] - The company is actively exploring M&A opportunities, anticipating significant consolidation in the industry [63] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the organic growth profile improving in January and highlighted strong growth in the ETF platform and institutional channels [41][43] - The integration of Amundi is expected to enhance the overall growth trajectory, with a focus on expanding product offerings in non-U.S. markets [61][80] Other Important Information - The company returned a total of $132.4 million to shareholders in the fourth quarter through share repurchases and cash dividends [22] - A new $200 million share repurchase program was authorized by the Board, alongside a 7% increase in the quarterly cash dividend [23][29] Q&A Session Summary Question: What strategies do you expect to be most in favor and contribute the most to organic growth in 2025? - Management highlighted the success of the Victory Shares ETF platform and opportunities in the institutional channel as key growth drivers [41][43] Question: What sort of revenue synergies do you expect from the Amundi deal? - Management noted a 15-year exclusive distribution agreement with Amundi, which is expected to enhance organic growth through the addition of Victory products [44][45] Question: Can you discuss margin differences across different products? - Management explained that over two-thirds of expenses are variable, allowing for significant scale and strong margins across all product lines, including ETFs [51][52] Question: How rapidly can you introduce Victory products in the non-U.S. distribution? - Management indicated that product introductions will occur throughout 2025 and into 2026, leveraging existing Amundi infrastructure [59][61] Question: What is the outlook for potential M&A this year? - Management expressed confidence in participating in industry consolidation, with a strong pipeline of discussions and opportunities [63][64] Question: How should we think about capital allocation going forward? - Management emphasized that accretive acquisitions are the primary focus, while also balancing share repurchases and dividend increases [96][98]

Fourth Quarter 2024 Earnings Presentation February 7, 2025 Forward Looking Statements This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 ...

Core Insights - Victory Capital Holdings (VCTR) reported a revenue of $232.37 million for the quarter ended December 2024, reflecting a year-over-year increase of 12.9% and surpassing the Zacks Consensus Estimate by 0.70% [1] - The earnings per share (EPS) for the quarter was $1.45, up from $1.15 in the same quarter last year, resulting in an EPS surprise of 5.84% compared to the consensus estimate of $1.37 [1] Financial Performance - Ending Assets Under Management (AUM) stood at $171.93 billion, which was below the average estimate of $173.46 billion by four analysts [4] - Total net client cash flows were reported at -$1.87 billion, worse than the average estimate of -$1.60 billion [4] - Revenue from investment management fees was $183.83 million, exceeding the average estimate of $181.05 million and representing a year-over-year increase of 14.4% [4] - Revenue from fund administration and distribution fees was $48.55 million, slightly below the average estimate of $49.69 million, but still showing a year-over-year increase of 7.6% [4] Market Performance - Victory Capital's shares returned +3.7% over the past month, outperforming the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - Victory Capital Holdings reported quarterly earnings of $1.45 per share, exceeding the Zacks Consensus Estimate of $1.37 per share, and up from $1.15 per share a year ago, representing an earnings surprise of 5.84% [1] - The company posted revenues of $232.37 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.70%, and an increase from $205.79 million year-over-year [2] - Over the last four quarters, Victory Capital has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] 分组2 - The current consensus EPS estimate for the coming quarter is $1.44 on revenues of $365.36 million, and for the current fiscal year, it is $6.19 on revenues of $1.52 billion [7] - The Zacks Industry Rank for Financial - Investment Management is currently in the bottom 28% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8] - The estimate revisions trend for Victory Capital is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6]

Financial Performance - Victory Capital reported total client assets of $176.1 billion and assets under management (AUM) of $171.9 billion as of December 31, 2024[14]. - The company achieved record adjusted earnings per diluted share of $1.45, a 23.5% increase compared to $1.15 in the same quarter last year[20]. - Revenue for the fourth quarter increased by 12.9% to $232.4 million, driven by higher average AUM[19]. - Adjusted EBITDA for the fourth quarter rose 16.7% to $125.5 million, with an adjusted EBITDA margin of 54.0%[21]. - For the year ended December 31, 2024, revenue increased by 8.8% to $893.5 million compared to $821.0 million in 2023[22]. - GAAP net income for the fourth quarter was $76.9 million, a decrease of 6.2% from the previous quarter[17]. - Net income for the three months ended December 31, 2024, was $76.9 million, compared to $55.2 million for the same period last year, marking a 39.3% increase[37]. - Basic earnings per share for the year ended December 31, 2024, was $4.47, up from $3.22 in 2023, indicating a 39.0% growth[37]. - Operating margin for the three months ended December 31, 2024, was 48.1%, compared to 41.9% in the same period last year[37]. Client Flows and AUM - The company experienced long-term net outflows of $1.7 billion during the fourth quarter, with total gross flows of $6.8 billion[9]. - Total assets under management reached $171.9 billion, with total client assets at $176.1 billion as of December 31, 2024[27]. - For the year ended December 31, 2024, gross client cash inflows totaled $26.167 billion, compared to $23.504 billion in 2023, reflecting a growth of approximately 11.2%[48]. - The net client cash flows for the year ended December 31, 2024, were $(7.377) billion, a decline from $(5.976) billion in 2023, indicating a worsening outflow situation[48]. - Gross client cash inflows for the three months ended December 31, 2024, were $6.793 billion, while gross client cash outflows were $8.663 billion, resulting in net client cash flows of -$1.870 billion[61]. Dividends and Share Repurchase - The board authorized a new $200 million share repurchase program and a 7% increase in the quarterly cash dividend to $0.47 per share[7]. - The company declared dividends of $0.44 per share for the three months ended December 31, 2024, an increase from $0.32 in the same period last year[37]. Strategic Initiatives - The company is on track to close the acquisition of Amundi's U.S. business by the end of Q1 2025, expecting $100 million in expense synergies[5]. - The company is focused on expanding its investment strategies and integrating new acquisitions to enhance growth potential[32]. - Future outlook includes navigating geopolitical uncertainties and achieving expected synergies from the proposed transaction with Amundi[32]. - The company emphasizes the importance of maintaining historical returns and sustaining growth amidst market challenges[32]. Market Conditions and Asset Management - Market appreciation for the year ended December 31, 2024, was $18.100 billion, down from $21.188 billion in 2023, showing a decrease of about 14.5%[48]. - Market depreciation for the same period was $2.237 billion, contributing to the overall decline in AUM[61]. - The ending AUM as of December 31, 2024, was $171.930 billion, compared to $161.322 billion at the end of 2023, representing an increase of approximately 6.5%[48]. - The company’s AUM from ETFs was reported at $52.375 billion as of December 31, 2024[60]. Financial Position - The company’s total liabilities decreased to $1.425 billion as of December 31, 2024, from $1.490 billion in the previous year[42]. - Cash and cash equivalents increased to $126.731 million as of December 31, 2024, compared to $123.547 million at the end of 2023[42]. - The company’s retained earnings rose to $924.600 million as of December 31, 2024, up from $736.852 million in the previous year, reflecting a growth of 25.5%[42].

Core Insights - Victory Capital Holdings (VCTR) is currently viewed as a more attractive investment option compared to SEI Investments (SEIC) for value investors due to its stronger Zacks Rank and favorable valuation metrics [3][7]. Valuation Metrics - VCTR has a forward P/E ratio of 10.01, significantly lower than SEIC's forward P/E of 16.73, indicating that VCTR may be undervalued [5]. - The PEG ratio for VCTR is 0.48, while SEIC's PEG ratio stands at 1.39, suggesting that VCTR offers better value relative to its expected earnings growth [5]. - VCTR's P/B ratio is 3.50 compared to SEIC's P/B of 4.48, further supporting the notion that VCTR is undervalued [6]. Analyst Outlook - VCTR is experiencing an improving earnings outlook, which enhances its attractiveness in the Zacks Rank model, indicating a positive trend in analyst estimates [7].

Core Insights - Victory Capital Holdings, Inc. (VCTR) has announced its largest share repurchase program, authorizing up to $200 million in buybacks through December 31, 2026, which reflects the company's strategy to manage capital and enhance shareholder returns [8][10] - The company has a strong history of dividend payments, having increased its dividend 12 times in the last five years, with a current dividend yield of 2.8% based on a closing price of $62.59 as of December 19, 2024 [2][9] - VCTR's shares have outperformed the industry, gaining 29.4% over the past six months compared to the industry's growth of 24.3% [10] Share Repurchase Program - The new repurchase program follows the completion of a previous $100 million repurchase program announced in December 2023, which was completed ahead of its deadline [1] - The authorization for the new program is effective immediately and will continue through December 31, 2026, allowing the company to remain flexible and opportunistic with its capital [4][10] Dividend Distribution Activities - In November 2024, VCTR announced a 7% increase in its quarterly dividend, raising it to 44 cents per share, with the payout scheduled for December 23 to shareholders of record as of December 9, 2024 [9] Price Performance and Zacks Rank - VCTR currently holds a Zacks Rank 2 (Buy), indicating positive market sentiment towards the stock [3] Future Outlook - Supported by strong cash flow and earnings, VCTR is expected to continue efficient capital distribution activities, which will help drive investor confidence in the stock [11]

Company Overview - Victory Capital Holdings (VCTR) currently has a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting a favorable outlook for investors [3] Performance Metrics - VCTR shares have increased by 1.64% over the past week, outperforming the Zacks Financial - Investment Management industry, which rose by 0.68% [6] - Over the past month, VCTR's price change is 17.37%, significantly higher than the industry's 6.1% [6] - In the last quarter, VCTR shares have surged by 33.69%, and over the past year, they have gained 112.42%, while the S&P 500 has only increased by 7.45% and 33.18%, respectively [7] Trading Volume - The average 20-day trading volume for VCTR is 543,377 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Outlook - In the past two months, four earnings estimates for VCTR have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $5.24 to $5.32 [10] - For the next fiscal year, four estimates have also moved upwards without any downward revisions [10] Conclusion - Given the strong performance metrics and positive earnings outlook, VCTR is positioned as a 1 (Strong Buy) stock with a Momentum Score of A, making it a compelling investment option [11]