Financial Performance - The company's Q3 2022 Adjusted EBITDA margin expanded to 50%[8], with a year-to-date (YTD) margin of 49.6%[8] - Q3 2022 Adjusted Net Income with tax benefit per diluted share increased by 7% to $1.19, compared to $1.11 in Q2[8] - The company returned $67 million to shareholders in Q3 2022, bringing the YTD total to $143 million[18] - Q3 2022 revenue was $207 million[18] - Q3 2022 Adjusted EBITDA was $103.6 million[18] - Q3 2022 GAAP Net Income was $72.8 million, or $1.01 per diluted share[18] Assets Under Management (AUM) and Flows - As of September 30, 2022, AUM stood at $147.3 billion[18] - YTD long-term gross flows reached $26.8 billion, a 20% increase compared to Q3 YTD 2021[8] - YTD positive net long-term inflows amounted to $1.9 billion[8] - Q3 2022 net long-term outflows were -$553 million, showing improvement compared to Q2[8] Capital Management - The company reduced debt by $30 million in Q3 2022 and by $145 million YTD[18]

Financial Performance - Total revenue for Q2 2022 was $216,006,000, a decrease of 2% compared to $221,904,000 in Q2 2021[16] - Net income for Q2 2022 increased to $79,205,000, up 14% from $69,270,000 in Q2 2021[16] - Earnings per share (EPS) for Q2 2022 were $1.16 (basic) and $1.09 (diluted), compared to $1.02 and $0.93 in Q2 2021, representing increases of 14% and 17% respectively[16] - The company reported a total operating income of $119,326,000 for Q2 2022, an increase of 25% from $95,268,000 in Q2 2021[16] - Net income for the six months ended June 30, 2022, was $150,478 thousand, compared to $134,472 thousand for the same period in 2021, representing an increase of approximately 11.9%[24] - Total revenue for the six months ended June 30, 2022, was $446.0 million, compared to $434.9 million for the same period in 2021, reflecting a year-over-year increase[49] Assets and Liabilities - Total assets as of June 30, 2022, were $2,567,570,000, a slight decrease from $2,579,746,000 at the end of 2021[13] - Long-term debt decreased to $1,017,496,000 from $1,127,924,000 at the end of 2021, reflecting a reduction of approximately 10%[13] - Total stockholders' equity increased to $1,038,181,000 as of June 30, 2022, up from $929,927,000 at the end of 2021, marking an increase of about 12%[13] - Customer receivables as of June 30, 2022, totaled $90.9 million, down from $104.3 million at December 31, 2021[49] - The net carrying value of accounts receivable and accounts payable approximates fair value due to their short-term nature, with long-term debt fair value considered equal to its carrying value as of June 30, 2022[107] Cash Flow and Dividends - Cash provided by operating activities for the six months ended June 30, 2022, was $165,055 thousand, slightly higher than $164,172 thousand in 2021[24] - The company declared dividends of $0.25 per share in Q2 2022, up from $0.12 per share in Q2 2021[16] - The company paid dividends totaling $34,739 thousand in the six months ended June 30, 2022, compared to $14,638 thousand in 2021[24] - Total dividends paid or payable for the six months ended June 30, 2022, amounted to $34.9 million, including $34.3 million in quarterly dividends[132] Acquisitions - The company completed the acquisition of USAA Asset Management Company on July 1, 2019, enhancing its mutual fund and ETF businesses[26] - The Company completed the acquisition of THB Asset Management on March 1, 2021, with an acquired AUM of $547 million[28] - The acquisition of New Energy Capital Partners was finalized on November 1, 2021, with an AUM of $795 million[29] - WestEnd Advisors was acquired on December 31, 2021, with an AUM of $19.3 billion, making it the Company's twelfth investment franchise[30] - The company completed the acquisition of WestEnd on December 31, 2021, for an estimated purchase price of $716.1 million, with acquired assets totaling $19.3 billion[165][166] - The NEC Acquisition was completed on November 1, 2021, for a purchase price of $63.1 million, with acquired AUM totaling $795.0 million[168][169] Investment Management Fees - Investment management fees for the first half of 2022 were $347,594,000, an increase of 6% compared to $328,317,000 in the first half of 2021[16] - Total investment management fees for the three months ended June 30, 2022, were $168.1 million, slightly up from $168.0 million in the same period of 2021[49] - The Company’s investment management fees for the six months ended June 30, 2022 totaled $267.5 million, a decrease from $274.8 million in the same period of 2021[113] Market Performance and AUM - Assets under management (AUM) decreased by $23.2 billion, or 13.0%, to $154.9 billion as of June 30, 2022, from $178.1 billion at March 31, 2022, primarily due to negative market action of $21.7 billion[181] - As of June 30, 2022, the company has $154.9 billion in Assets Under Management (AUM) [158] - The ending AUM for the six months ended June 30, 2022 was $154.9 billion, a decrease of $28.7 billion, or 15.6%, from $183.7 billion at December 31, 2021[200] - The estimated net revenue growth rate for WestEnd is projected at 36% for the five-year average as of June 30, 2022, down from 38% at the acquisition date[89] Operating Expenses - Total operating expenses for the three months ended June 30, 2022 were $96.7 million, down from $126.6 million in the same period in 2021[204] - Personnel compensation and benefits for the three months ended June 30, 2022 were $57.6 million, an increase of $0.1 million, or 0.2%, from $57.5 million for the same period in 2021[211] Tax and Other Comprehensive Income - The effective tax rate for the three months ended June 30, 2022 was 24.6%, compared to 22.9% for the same period in 2021, with provisions for income taxes of $25.8 million and $20.6 million respectively[119] - Other comprehensive income for the first half of 2022 was $21,203,000, compared to $7,811,000 in the first half of 2021, indicating a significant improvement[19] - The company reported a net current period other comprehensive income of $21.2 million for the six months ended June 30, 2022 [143]

Second Quarter 2022 Earnings Presentation August 5, 2022 Forward Looking Statements This presentation may contain "forward-looking" statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, competitive position and potential organic and inorganic growth opportunities. Forward-looking statements include all statements that are not hi ...

Financial Data and Key Metrics Changes - Total AUM decreased by $23.2 billion or 13% in the quarter to $154.9 billion at the end of June, bringing the year-to-date decline in AUM to $28.7 billion or 16% lower than at the beginning of the year [19][20] - Revenue of $216 million in the second quarter was 6% lower than in the first quarter and down 3% from the same quarter last year [20][26] - Adjusted EBITDA was $106.2 million in the second quarter, resulting in an adjusted EBITDA margin of 49.2% [22][31] - GAAP net income was $79.2 million or $1.09 per diluted share [23] Business Line Data and Key Metrics Changes - Gross long-term flows totaled $9.2 billion in the quarter, with record first half gross flows of $20.2 billion, up 21% from the first half of last year [9][25] - The Market Neutral Income Fund generated significant positive net asset flows, contributing to the overall positive net long-term flows year-to-date [11][54] - The ETF platform has seen positive flows for seven consecutive quarters, indicating strong demand for diversified investment strategies [10] Market Data and Key Metrics Changes - The first half of 2022 was noted as the worst first half period for public markets in over half a century, yet the company managed to achieve strong performance [7] - The diversification strategy has positioned the company well to manage through the current volatile environment, with a wide range of products suitable for various market conditions [10] Company Strategy and Development Direction - The company continues to invest in growth initiatives despite lower AUM and revenue, maintaining a long-term growth strategy focused on data, technology, marketing, distribution, and personnel [8][31] - The M&A environment remains constructive, with the company actively conducting diligence on multiple prospective deals, emphasizing that every acquisition must enhance the company's capabilities [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current market environment, highlighting strong investment performance and a robust pipeline of potential new business [11][15] - The focus on active management is expected to play a larger role in client portfolios moving forward, as clients reassess their investment strategies in light of changing market conditions [46] Other Important Information - The company returned a total of $34 million to shareholders through share repurchases and dividends, marking a 26% increase from the previous quarter [18] - The company has maintained a flexible approach to capital allocation, balancing debt repayment and share buybacks based on market conditions [19][66] Q&A Session Summary Question: Update on M&A appetite and focus - Management reiterated that their M&A strategy remains unchanged, focusing on transactions that enhance the company [38][41] Question: Current excess capital and deal capacity - Management indicated they do not feel constrained in terms of deal capacity, with various financing options available [42] Question: Client interest and demand rebound - Management noted that clients are rethinking their portfolios and focusing on active management strategies [45][46] Question: Performance of direct investor business - The direct investor business has shown resilience during market disruptions, with positive net flows in the 529 education savings plan [68] Question: Retail separately managed accounts (SMAs) performance - Management highlighted strong performance in retail SMAs, with significant contributions from the WestEnd acquisition [74][77] Question: Inorganic opportunities and pricing - Management observed that bid-ask spreads have narrowed, with sellers more open to structuring deals that share future risks [82]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number 001-38388 Victory Capital Holdings, Inc. (Exact name of registrant as specified in its charter) Delaware 32-0402956 (S ...

Victory Capital Holdings, Inc. (NASDAQ:VCTR) Q1 2022 Earnings Conference Call May 6, 2022 8:00 AM ET Company Participants Matthew Dennis - Chief of Staff and Director of Investor Relations David Brown - Chairman and Chief Executive Officer Michael Policarpo - President, Chief Financial and Administrative Officer Conference Call Participants Craig Siegenthaler - Bank of America Kenneth Lee - RBC Capital Markets Alex Blostein - Goldman Sachs Robert Lee - KBW Brennan Hawken - UBS Michael Cyprys - Morgan Stanle ...

First Quarter 2022 Earnings Presentation May 6, 2022 Forward Looking Statements This presentation may contain "forward-looking" statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, competitive position and potential organic and inorganic growth opportunities. Forward-looking statements include all statements that are not histor ...

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Victory Capital Holdings, Inc. is a diversified global asset management firm with $183.7 billion in AUM as of December 31, 2021, operating a unique business model combining boutique investment managers with a centralized platform - Total Assets Under Management (AUM) as of December 31, 2021, was **$183.7 billion** - Victory Capital operates with **12 autonomous Investment Franchises** and a Solutions Platform, offering **130 diversified investment strategies** to institutions, intermediaries, retirement platforms, and individual investors[18](index=18&type=chunk)[19](index=19&type=chunk) - The company's growth strategy is dual-pronged: organic growth through value-added strategies and enhanced existing franchises, and inorganic growth through strategic acquisitions that add high-quality investment teams and expand distribution capabilities[22](index=22&type=chunk)[23](index=23&type=chunk)[25](index=25&type=chunk) - Since its management-led buyout in 2013, AUM has grown over **10-fold** from **$17.9 billion** to **$183.7 billion** by December 31, 2021, primarily through seven acquisitions and two minority investments[28](index=28&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces a broad range of risks, including market and investment performance risks tied to AUM fluctuations, business risks related to key personnel and growth, and merger and acquisition risks concerning integration and contingent liabilities - Revenues are substantially based on AUM, making the company highly susceptible to reductions in AUM due to poor investment performance, client withdrawals, or adverse market conditions[131](index=131&type=chunk)[134](index=134&type=chunk)[136](index=136&type=chunk) - The company's growth strategy relies heavily on successful strategic acquisitions and integration, which carry risks of unforeseen liabilities, operational strain, and failure to realize anticipated synergies[159](index=159&type=chunk)[184](index=184&type=chunk) - Substantial indebtedness of **$1,151 million** as of December 31, 2021, exposes the company to risks from adverse economic conditions and restrictive covenants, potentially limiting financial flexibility[187](index=187&type=chunk)[188](index=188&type=chunk) - The investment management industry is intensely competitive, with challenges from larger competitors, low entry costs for new firms, and a trend towards lower fees and passive products, which could reduce AUM and net income[235](index=235&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk) - Operational and cybersecurity risks, including system disruptions, human error, and cyber-attacks, pose significant threats to business continuity, client information confidentiality, and could result in financial losses, regulatory actions, or reputational damage[246](index=246&type=chunk)[248](index=248&type=chunk)[250](index=250&type=chunk) [Item 1B. Unresolved Staff Comments](index=49&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - No unresolved staff comments were reported[271](index=271&type=chunk) [Item 2. Properties](index=49&type=section&id=Item%202.%20Properties) The company leases its principal executive offices in San Antonio, TX, and additional office spaces across several U.S. states and internationally, deeming its current facilities adequate for business needs - The company leases its principal executive offices in San Antonio, TX, and other offices in Brooklyn, OH; Birmingham, MI; Boston, MA; Rocky River, OH; Cincinnati, OH; Charlotte, NC; Denver, CO; Des Moines, IA; Hanover, NH; Norwalk, CT; San Francisco, CA; Singapore; and Hong Kong[271](index=271&type=chunk) - Existing facilities are considered adequate to meet current and future business requirements[271](index=271&type=chunk) [Item 3. Legal Proceedings](index=49&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, though it may face legal proceedings and claims in the ordinary course of business - The company is not currently a party to any material legal proceedings[272](index=272&type=chunk) - The company may be subject to legal proceedings and claims in the ordinary course of business[272](index=272&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the registrant[273](index=273&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=50&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Victory Capital's Class A Common Stock trades on NASDAQ under 'VCTR', and as of December 31, 2021, the company eliminated its dual-class share structure, converting all Class B shares to Class A, resulting in a single class of common stock with identical economic and voting rights - Victory Capital's Class A Common Stock is listed and trades on NASDAQ under the symbol 'VCTR'[274](index=274&type=chunk) - Effective November 23, 2021, the company eliminated its dual-class share structure, converting all Class B common stock into Class A common stock, resulting in a single class of Common Stock with identical economic and voting rights[275](index=275&type=chunk) Equity Securities Purchases (Q4 2021) | Period | Total Shares Purchased | Average Price Paid Per Share | Shares Purchased as Part of Publicly Announced Plans or Programs | | :------------------ | :--------------------- | :--------------------------- | :------------------------------------------------------------- | | October 1-31, 2021 | 45,260 | $36.28 | 45,260 | | November 1-30, 2021 | 60,255 | $36.06 | 23,355 | | December 1-31, 2021 | 53,685 | $35.26 | 53,685 | | **Total** | **159,200** | **$35.85** | **122,300** | - The quarterly cash dividend increased by approximately **143%** in 2021, from **$0.07 per share** in Q4 2020 to **$0.17 per share** in Q4 2021[280](index=280&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Victory Capital's financial condition, results of operations, liquidity, and cash flows for the year ended December 31, 2021, highlighting AUM growth, strong investment performance, and key financial metrics - AUM increased by **$36.5 billion (24.7%)** to **$183.7 billion** at December 31, 2021, primarily due to **$20.3 billion** from net acquired assets and **$20.6 billion** from market appreciation, partially offset by **$4.5 billion** in net outflows[306](index=306&type=chunk) Key Financial Highlights (2021 vs. 2020) | Metric | 2021 (in millions) | 2020 (in millions) | Change (%) | | :-------------------------------- | :----------------- | :----------------- | :--------- | | Total Revenue | $890.3 | $775.4 | +14.8% | | Net Income | $278.4 | $212.5 | +31.0% | | GAAP Diluted EPS | $3.75 | $2.88 | +30.2% | | Adjusted EBITDA | $449.0 | $377.3 | +19.0% | | Adjusted EBITDA Margin | 50.4% | 48.7% | +1.7 pp | | Adjusted Net Income | $329.0 | $258.5 | +27.3% | - Investment performance was strong, with **64%** of strategies by AUM outperforming their benchmarks over a one-year period, and **77%**, **82%**, and **77%** over three, five, and ten-year periods, respectively[308](index=308&type=chunk) - The company completed three acquisitions in 2021: THB Asset Management (March 1), New Energy Capital (November 1), and WestEnd Advisors (December 31), significantly expanding its investment platform and alternative asset capabilities[294](index=294&type=chunk)[296](index=296&type=chunk)[300](index=300&type=chunk) [Item 7A. Qualitative and Quantitative Disclosures Regarding Market Risk](index=74&type=section&id=Item%207A.%20Qualitative%20and%20Quantitative%20Disclosures%20Regarding%20Market%20Risk) The company's revenues are highly sensitive to market risk, as they are primarily based on AUM, with fluctuations significantly impacting revenues, and it also faces exchange rate and interest rate risks, partially mitigated by an interest rate swap - A **10%** increase or decrease in AUM would cause an annualized revenue change of approximately **$103.0 million**, based on a weighted-average fee rate of **56 basis points** for 2021[433](index=433&type=chunk) - Approximately **9%** of AUM is invested in non-U.S. securities, exposing the company to foreign currency exchange risk, where a **10%** change in the U.S. dollar's value could impact revenues by about **$10.1 million**[436](index=436&type=chunk)[437](index=437&type=chunk) - The company uses a floating-to-fixed interest rate swap to hedge **$450 million** of its outstanding Term Loan, fixing the rate at **3.215%** through July 2026, to manage interest rate risk[439](index=439&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=76&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for Victory Capital Holdings, Inc. and its subsidiaries for the years ended December 31, 2021, 2020, and 2019, including balance sheets, statements of operations, comprehensive income, changes in stockholders' equity, and cash flows, along with detailed notes Consolidated Balance Sheet Highlights (as of Dec 31, 2021 vs. 2020) | Metric (in thousands) | 2021 | 2020 | | :-------------------- | :---------- | :---------- | | Total Assets | $2,579,746 | $1,730,729 | | Total Liabilities | $1,649,819 | $1,023,188 | | Total Stockholders' Equity | $929,927 | $707,541 | | Cash and Cash Equivalents | $69,533 | $22,744 | | Long-term Debt, net | $1,127,924 | $769,009 | Consolidated Statements of Operations Highlights (Year Ended Dec 31) | Metric (in thousands) | 2021 | 2020 | 2019 | | :-------------------- | :---------- | :---------- | :--------- | | Total Revenue | $890,265 | $775,351 | $612,373 | | Total Operating Expenses | $516,420 | $460,638 | $447,753 | | Income from Operations | $373,845 | $314,713 | $164,620 | | Net Income | $278,389 | $212,522 | $92,491 | | Diluted EPS | $3.75 | $2.88 | $1.26 | Consolidated Statements of Cash Flows Highlights (Year Ended Dec 31) | Metric (in thousands) | 2021 | 2020 | 2019 | | :-------------------- | :---------- | :---------- | :--------- | | Net cash provided by operating activities | $376,196 | $250,616 | $227,384 | | Net cash used in investing activities | $(556,588) | $(12,340) | $(849,812) | | Net cash provided by (used in) financing activities | $227,217 | $(252,696) | $608,016 | - Goodwill increased significantly from **$404.75 million** in 2020 to **$981.81 million** in 2021, primarily due to the NEC and WestEnd acquisitions[650](index=650&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=126&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with accountants on accounting and financial disclosure matters - No changes in or disagreements with accountants on accounting and financial disclosure were reported[748](index=748&type=chunk) [Item 9A. Controls and Procedures](index=126&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2021, and internal control over financial reporting was also deemed effective, with no material changes identified - As of December 31, 2021, the company's disclosure controls and procedures were effective at the reasonable assurance level[750](index=750&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2021, providing reasonable assurance regarding financial reporting reliability[751](index=751&type=chunk) - No changes in internal control over financial reporting were identified during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[752](index=752&type=chunk) [Item 9B. Other Information](index=127&type=section&id=Item%209B.%20Other%20Information) The company reported no other information required by this item - No other information was reported under this item[754](index=754&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=128&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's definitive proxy statement for the 2022 annual meeting of shareholders - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of shareholders[755](index=755&type=chunk) [Item 11. Executive Compensation](index=128&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement for the 2022 annual meeting of shareholders - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of shareholders[756](index=756&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=128&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Information regarding security ownership of certain beneficial owners and management, and related shareholder matters, is incorporated by reference from the company's definitive proxy statement for the 2022 annual meeting of shareholders - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of shareholders[757](index=757&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=128&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships and related transactions, and director independence, is incorporated by reference from the company's definitive proxy statement for the 2022 annual meeting of shareholders - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of shareholders[758](index=758&type=chunk) [Item 14. Principal Accountant Fees and Services](index=128&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's definitive proxy statement for the 2022 annual meeting of shareholders - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of shareholders[759](index=759&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=129&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the exhibits and financial statement schedules filed as part of the Form 10-K, including the financial statements, various corporate documents, and agreements - The financial statements are contained in Item 8 of Part II of this report[762](index=762&type=chunk) - A detailed exhibit index is provided, listing corporate documents, plans, agreements, and certifications[761](index=761&type=chunk) [Item 16. Form 10‑K Summary](index=129&type=section&id=Item%2016.%20Form%2010%E2%80%91K%20Summary) The company did not provide a separate Form 10-K summary - No Form 10-K Summary was provided[760](index=760&type=chunk) [Signatures](index=133&type=section&id=Signatures) The report is duly signed on behalf of Victory Capital Holdings, Inc. by its Chief Executive Officer and Chairman, David C. Brown, and President, Chief Financial Officer, and Chief Administrative Officer, Michael D. Policarpo, along with other directors, as of March 14, 2022 - The report was signed by David C. Brown (CEO and Chairman) and Michael D. Policarpo (President, CFO, and CAO) on March 14, 2022[768](index=768&type=chunk)[769](index=769&type=chunk)

Financial Data and Key Metrics Changes - Total AUM increased to $183.7 billion, up 25% year-over-year and 15% from the previous quarter [12][32] - Record revenue of $890 million for the year, a 15% increase from 2020, with Q4 revenue reaching $229.1 million, a 14% increase year-over-year [28][36] - Adjusted net income with tax benefit per diluted share was $1.27 in Q4 and $4.82 for the year, reflecting a 25% improvement from 2020 [12][30] Business Line Data and Key Metrics Changes - The direct investor business showed material improvement with new account registrations growing steadily, achieving net flow positive for the 529 plan since its acquisition in 2019 [13][14] - Gross long-term sales reached a record $27.9 billion in 2021, a 20% increase from the previous record in 2020, with long-term net flows improving by 64% year-over-year [33][34] Market Data and Key Metrics Changes - The company experienced net outflows in Q4 due to two large one-time redemptions, but was net flow positive in November and had modest outflows in December [33][52] - The average realized fee rate was 56.0 basis points in Q4, with expectations of a decrease due to the acquisition of WestEnd Advisors, which has a lower average fee rate [35][36] Company Strategy and Development Direction - The company aims to continue its growth strategy through acquisitions, having closed two strategic acquisitions in Q4 2021, and plans to maintain a similar pace in 2022 [7][25] - The elimination of the dual-class share structure is expected to enhance eligibility for inclusion in major indexes, potentially leading to increased buying from index funds [15][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current operating environment, noting that market volatility could benefit active managers and create opportunities for capturing assets in motion [72] - The company plans to maintain its adjusted EBITDA margin guidance of approximately 49% for 2022, despite ongoing investments in growth initiatives [38][75] Other Important Information - The company returned over $134 million to shareholders since its IPO, with a 178% increase in the cash dividend declared [19][41] - Employee ownership is significant, with approximately 20% of the company owned by employees, reflecting a strong ownership culture [22][23] Q&A Session Summary Question: Update on WestEnd Advisors acquisition and cross-sell opportunities - The acquisition is progressing well, with successful cross-selling and distribution opportunities being explored [44][45] Question: Potential for large index ETF and fund buying post dual-class structure elimination - The company anticipates eligibility for inclusion in the Russell 2000 and expects net buying from index funds in the next year [47][48] Question: Clarification on unusual outflows in October - Management indicated that the outflows were one-time events and expressed confidence in the momentum moving into 2022 [52][52] Question: Impact of market volatility on M&A conversations - Management noted that market volatility has not impacted M&A discussions, which are focused on improving business access and scalability [55][56] Question: Capital deployment priorities and dividend increase interpretation - The dividend increase is not indicative of a change in policy; excess capital will primarily be used for debt reduction [66][67] Question: Incremental margins for WestEnd Advisors - Integration onto the existing platform is expected to yield margins at parity or higher than current margins [68][69] Question: Guidance on expense trends post-pandemic - The company maintains its margin guidance and expects expenses to remain consistent, with ongoing investments in growth [74][75]

Fourth Quarter 2021 Earnings Presentation February 11, 2022 Forward Looking Statements This presentation may contain "forward-looking" statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, competitive position and potential organic and inorganic growth opportunities. Forward-looking statements include all statements that are not ...