Group 1: Company Performance - Victory Capital Holdings, Inc. (VCTR) reported assets under management (AUM) of $298.6 billion for June 2025, reflecting a 3.2% increase from May 31, 2025 [1][8] - U.S. large-cap equity AUM rose 4.9% to $61.8 billion, while U.S. mid-cap equity AUM increased 1.8% to $31.6 billion [1][8] - Solutions assets reached $79.9 billion, up 4.7% from May 2025, and fixed-income AUM totaled $79.7 billion, representing a 1% increase [2][8] Group 2: Market Positioning - The strong positioning of VCTR's integrated multi-boutique business model in a fast-expanding market is expected to boost its performance in the near term [3] - Over the past six months, VCTR shares have gained 29.9%, outperforming the industry's growth of 21.7% [4] Group 3: Comparison with Other Asset Managers - Franklin Resources, Inc. (BEN) reported preliminary AUM of $1.61 trillion as of June 30, 2025, which increased 2.1% from the prior month [7] - Invesco (IVZ) reported AUM of $2 trillion as of June 30, 2025, increasing 3% from the previous month, with strong market returns contributing to a $58 billion increase [9][10]

Financial Data and Key Metrics Changes - Total client assets at the end of March were $171 billion, slightly down from the start of the year, with average AUM approximately 1% lower compared to the fourth quarter [6] - Revenue for the first quarter was $219.6 million, down about 5% from the fourth quarter due to lower average AUM and fewer days in the quarter, but year-over-year revenue was higher [21][22] - Adjusted earnings per diluted share with tax benefit was $1.36, marking the second highest quarterly EPS in company history and a record for any first quarter [9][30] - Adjusted EBITDA was $116 million with a margin of 53%, reflecting a 90 basis point expansion from the first quarter of the previous year [30] Business Line Data and Key Metrics Changes - Gross sales increased by 41% from the last quarter, reaching $9.3 billion, the highest level of quarterly gross sales in three years [6] - The ETF AUM increased to over $13 billion, a 28% increase during the quarter and up 67% year-over-year [8] - The Amundi acquisition resulted in a doubling of fixed income AUM as a percentage of total assets from 14% to 28% [11] Market Data and Key Metrics Changes - The company ended the quarter with $44 billion of AUM sourced from clients outside the U.S., representing 15% of total AUM, compared to less than 5% previously [12][24] - Pioneer Investments generated positive net long-term flows of $1.7 billion in the first quarter, which is not included in the company's numbers due to the transaction closing on April 1 [13][27] Company Strategy and Development Direction - The company is strategically investing in distribution channels, data, technology, marketing, and intermediary partnerships to enhance organic growth [10][19] - Plans for several ETF launches in 2025 are underway, with a focus on expanding the product lineup [9][19] - The company aims to maintain a long-term margin target of 49%, despite short-term integration costs from the Amundi acquisition [45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the underlying activity around flows, viewing the two large redemptions as one-time events that should not distort organic growth progress [7] - The company is well-positioned for organic growth with a larger sales force and enhanced resources dedicated to distribution efforts [19][66] - Management anticipates a potential acquisition announcement in 2025, leveraging the improved balance sheet and cash position [58] Other Important Information - The company returned $39 million to shareholders during the first quarter and increased the quarterly dividend to $0.49 per share [22] - The net leverage ratio remained steady at 1.7 times, with cash on hand increasing to $176 million [22][31] Q&A Session Summary Question: Can you elaborate on the rollout of new products outside the U.S.? - Management indicated that they are working with Amundi to identify successful products for international markets, with launches expected in the latter half of 2025 [35][38] Question: How will margins evolve in the near term? - Management confirmed that while margins are currently at 53%, they expect a slight decline during integration efforts, but remain bullish on achieving long-term targets of 49% [42][45] Question: What is the state of the acquisition pipeline? - Management stated that the company is in a strong position to execute sizable transactions and is leaning towards larger scaled opportunities [56][58] Question: How are fixed income and solutions performing in volatile markets? - Management noted that the fixed income platform has expanded and performed well, with positive net flows observed in the first quarter [64][66] Question: Have there been any dissynergies from the Amundi acquisition? - Management reported no dissynergies from the Amundi acquisition, highlighting positive net flows from Pioneer Investments [72][74] Question: What investments are being made to enhance organic growth? - Management detailed significant investments in sales, marketing, and data technology to support organic growth, with success measured by growth in business [84][87] Question: How important are alternative investment products for future acquisitions? - Management acknowledged the importance of alternative investments and is evaluating various strategies to incorporate them into the platform [90][92] Question: What is the rationale behind the change in dividend policy? - Management explained that the change allows for more opportunistic increases while prioritizing capital for acquisitions and growth [96][98]

Financial Data and Key Metrics Changes - Total client assets at the end of March were $171 billion, slightly down from the start of the year, with average AUM approximately 1% lower compared to the fourth quarter [4] - Revenue for the first quarter was $219.6 million, down about 5% from the fourth quarter due to lower average AUM and fewer days in the quarter [18] - Adjusted earnings per diluted share with tax benefit was $1.36, marking the second highest quarterly EPS in company history [6][18] - Adjusted EBITDA was $116 million with an EBITDA margin of 53%, reflecting a 90 basis point expansion from the first quarter of the previous year [28] Business Line Data and Key Metrics Changes - Gross sales increased by 41% from the last quarter, reaching $9.3 billion, the highest level of quarterly gross sales in three years [4] - The ETF AUM increased to over $13 billion, a 28% increase during the quarter and up 67% year-over-year [5] - The Amundi U.S. business generated positive net long-term flows of $1.7 billion in the first quarter, which is not included in the current numbers due to the transaction closing on April 1 [11] Market Data and Key Metrics Changes - The proportion of retail assets under management rose, with $44 billion sourced from clients outside the U.S., representing 15% of total AUM compared to less than 5% previously [10] - The investment performance remained strong, with 67% of mutual fund and ETF assets earning four or five-star ratings from Morningstar [17] Company Strategy and Development Direction - The company is strategically investing in distribution channels, data, technology, marketing, and intermediary partnerships to enhance organic growth [7][8] - Plans for several ETF launches in 2025 are underway, with a focus on expanding the product lineup [6][10] - The company aims to maintain a long-term margin target of 49%, despite short-term fluctuations due to integration efforts [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the underlying activity around flows, viewing the recent large redemptions as one-time events that should not distort ongoing growth [5] - The company is encouraged by discussions regarding ongoing diligence activities and sees potential for additional strategic growth opportunities [8][56] Other Important Information - The company increased its quarterly dividend to $0.49 per share, payable on June 25, and anticipates moving back to an annual increase cycle [19][95] - The leverage ratio improved significantly following the Amundi transaction, enhancing financial flexibility [8][29] Q&A Session Summary Question: Can you elaborate on the rollout of new products outside the U.S.? - The company is working with Amundi to identify products for international markets, with launches expected in the latter half of 2025 [35][39] Question: How will margins evolve in the near term? - Margins may see a slight decline during integration efforts, but the long-term target remains at 49% [44][45] Question: What is the current state of the acquisition pipeline? - The company is in a strong position to execute sizable transactions and is leaning towards larger scaled opportunities [56][57] Question: Have there been any dissynergies from the Amundi acquisition? - No dissynergies have been observed; the combined business has resonated well in the market [72] Question: What investments are being made to enhance organic growth? - Significant investments in sales, marketing, and data technology are being made to support organic growth [84][85] Question: How important are alternative investment products for future acquisitions? - Alternatives are important, and the company is evaluating various ways to incorporate them into its offerings [88][89]

[Part I — Financial Information](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents Victory Capital Holdings, Inc.'s unaudited condensed consolidated financial statements for Q1 2025, covering balance sheets, operations, cash flows, and notes [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Victory Capital Holdings, Inc.'s unaudited condensed consolidated financial statements for Q1 2025, covering balance sheets, operations, cash flows, and notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$2.58 billion** as of March 31, 2025, driven by cash, with liabilities rising to **$1.44 billion** and equity to **$1.14 billion** Condensed Consolidated Balance Sheet Highlights (Unaudited) | (Amounts in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $175,607 | $126,731 | | Goodwill | $981,805 | $981,805 | | Other intangible assets, net | $1,255,351 | $1,260,614 | | **Total assets** | **$2,583,486** | **$2,547,591** | | **Liabilities & Stockholders' Equity** | | | | Long-term debt, net | $964,763 | $963,862 | | **Total liabilities** | **$1,438,920** | **$1,425,954** | | **Total stockholders' equity** | **$1,144,566** | **$1,121,637** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenue increased to **$219.6 million** in Q1 2025, driving net income to **$62.0 million**, or **$0.96 per diluted share**, supported by higher revenue and lower expenses Statement of Operations Summary (Unaudited) | (Amounts in thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $219,602 | $215,857 | | Total operating expenses | $126,694 | $131,048 | | Income from operations | $92,908 | $84,809 | | Net income | $61,975 | $55,691 | | Diluted EPS | $0.96 | $0.84 | | Dividends declared per share | $0.47 | $0.335 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased to **$81.1 million** in Q1 2025, with financing cash outflow decreasing, leading to a **$48.9 million** increase in cash Cash Flow Summary (Unaudited) | (Amounts in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $81,094 | $68,684 | | Net cash used in investing activities | ($1,684) | ($910) | | Net cash used in financing activities | ($30,713) | ($111,342) | | Net increase (decrease) in cash | $48,876 | ($43,610) | | Cash and cash equivalents, end of period | $175,607 | $79,937 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Detailed notes explain accounting policies and financial results, covering business, revenue, acquisitions, fair value, debt, equity, and subsequent events - On April 1, 2025, the Company completed the acquisition of Amundi US and reintroduced the brand Pioneer Investments for the acquired business[32](index=32&type=chunk) Disaggregated Revenue by Type and Product (Q1 2025 vs Q1 2024) | (Amounts in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total investment management fees** | **$173,301** | **$169,785** | | Mutual funds (Victory Funds) | $114,341 | $115,173 | | ETFs (VictoryShares) | $8,729 | $5,179 | | **Total fund administration and distribution fees** | **$46,301** | **$46,072** | | **Total revenue** | **$219,602** | **$215,857** | - The estimated fair value of contingent consideration payable to sellers for the WestEnd acquisition was **$143.3 million** as of March 31, 2025, with a **$3.4 million** increase in fair value for Q1 2025[70](index=70&type=chunk)[71](index=71&type=chunk) - On May 8, 2025, the Board of Directors approved a regular quarterly cash dividend of **$0.49 per share**, payable on June 25, 2025[135](index=135&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and operations, noting AUM decreased to **$167.5 billion** due to market action and outflows, yet Q1 2025 revenue and net income increased [Overview and Key Performance Indicators](index=29&type=section&id=MD%26A_Overview) Victory Capital's AUM decreased to **$167.5 billion** due to market depreciation and net outflows, yet financial performance improved with Adjusted EBITDA rising - As of March 31, 2025, the company had total client assets of **$171.4 billion**, including **$167.5 billion** in AUM[138](index=138&type=chunk) Key Performance Indicators (Q1 2025 vs Q1 2024) | (Amounts in millions, except for bps and %) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | AUM at period end | $167,468 | $170,342 | | Average AUM | $173,789 | $163,533 | | AUM net flows | ($1,249) | ($1,127) | | Total revenue | $219.6 | $215.9 | | Revenue realization on average AUM | 51.2 bps | 53.0 bps | | Net income | $62.0 | $55.7 | | Adjusted EBITDA | $116.4 | $112.4 | | Adjusted EBITDA Margin | 53.0% | 52.1% | [Assets Under Management (AUM)](index=31&type=section&id=Assets%20Under%20Management) Total AUM decreased to **$167.5 billion** due to **$1.2 billion** in net outflows and **$3.2 billion** in market depreciation, with varied flows across vehicles AUM Roll-Forward (Q1 2025) | (Amounts in millions) | Amount | | :--- | :--- | | Beginning AUM (Jan 1, 2025) | $171,930 | | Net client cash flows | ($1,249) | | Market appreciation (depreciation) | ($3,172) | | Realizations and distributions | ($21) | | Acquired & divested assets / Net transfers | ($20) | | **Ending AUM (Mar 31, 2025)** | **$167,468** | AUM Net Flows by Vehicle (Q1 2025) | (Amounts in millions) | Net Client Cash Flows | | :--- | :--- | | Mutual Funds | ($3,006) | | ETFs | $2,810 | | Separate Accounts and Other | ($1,053) | | **Total AUM** | **($1,249)** | [GAAP Results of Operations](index=35&type=section&id=GAAP%20Results%20of%20Operations) Q1 2025 total revenue grew **1.7%** to **$219.6 million**, driven by higher AUM, while personnel compensation decreased and acquisition-related costs significantly increased - Investment management fees increased by **$3.5 million (2.1%)** year-over-year due to a higher average AUM of **$173.8 billion** in Q1 2025 compared to **$163.5 billion** in Q1 2024[167](index=167&type=chunk) - Personnel compensation and benefits decreased by **$3.4 million (5.6%)** year-over-year, primarily due to lower unrealized gains on deferred compensation plans and reduced contingent payment compensation expense[171](index=171&type=chunk) - Acquisition-related costs rose by **$7.7 million** to **$8.8 million** in Q1 2025, primarily due to legal, professional, and proxy solicitation costs related to the Amundi US acquisition[177](index=177&type=chunk) [Supplemental Non-GAAP Financial Information](index=37&type=section&id=Supplemental%20Non-GAAP%20Financial%20Information) Non-GAAP measures like Adjusted EBITDA (**$116.4 million**) and Adjusted Net Income (**$78.0 million**) show core operating performance, excluding non-recurring costs Reconciliation of GAAP Net Income to Adjusted EBITDA | (Amounts in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income (GAAP) | $61,975 | $55,691 | | Adjustments (Interest, Taxes, D&A, etc.) | $54,424 | $56,665 | | **Adjusted EBITDA** | **$116,399** | **$112,356** | Reconciliation of GAAP Net Income to Adjusted Net Income | (Amounts in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income (GAAP) | $61,975 | $55,691 | | Adjustments (Amortization, Stock Comp, etc.) | $21,309 | $22,488 | | Tax effect of adjustments | ($5,327) | ($5,621) | | **Adjusted Net Income** | **$77,957** | **$72,558** | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with cash increasing to **$175.6 million**, supported by an undrawn **$100.0 million** credit facility and increased operating cash flow - The company maintained a **$100.0 million** revolving credit facility which was undrawn as of March 31, 2025[190](index=190&type=chunk) - Cash flow from operating activities increased by **$12.4 million** year-over-year to **$81.1 million** for Q1 2025[205](index=205&type=chunk) - As of March 31, 2025, the company had a contingent consideration liability of **$143.3 million** related to the WestEnd Acquisition, with a maximum potential payout of **$240.0 million**[202](index=202&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Revenues are highly sensitive to market risk, with a **10%** AUM change impacting annualized revenues by **$85.2 million**, alongside exchange rate and interest rate risks - A **10%** increase or decrease in the value of AUM would cause an annualized change in revenues of approximately **$85.2 million**, based on the weighted-average fee rate of **51 basis points** for Q1 2025[209](index=209&type=chunk) - Approximately **11%** of AUM is invested in securities denominated in currencies other than the U.S. dollar, where a **10%** change in the U.S. dollar's value would impact annualized revenue by approximately **$9.4 million**[211](index=211&type=chunk)[212](index=212&type=chunk) - The company monetized its interest rate swap in October 2023 and is now exposed to interest rate risk on its outstanding variable-rate debt under the 2019 Credit Agreement[214](index=214&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective[216](index=216&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[217](index=217&type=chunk) [Part II — Other Information](index=46&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) Stockholder litigation concerning the Amundi transaction, alleging misleading disclosures, was voluntarily discontinued by plaintiffs on April 4, 2025 - Stockholder litigation was filed in September 2024 concerning the Amundi transaction, alleging incomplete and misleading disclosures in the Proxy Statement[220](index=220&type=chunk)[221](index=221&type=chunk) - On April 4, 2025, the plaintiffs in the stockholder litigation filed notices of voluntary discontinuance, effectively ending the actions[222](index=222&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the risk factors in the Annual Report on Form 10-K for the year ended December 31, 2024[224](index=224&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a share repurchase program authorizing up to **$200.0 million** through December 31, 2026, with no shares repurchased during Q1 2025 - In December 2024, the Board approved a new share repurchase program authorizing up to **$200.0 million** of Common Stock repurchases through December 31, 2026[225](index=225&type=chunk) Issuer Purchases of Equity Securities (Q1 2025) | (Amounts in millions) | Total Number of Shares Purchased | Approximate Dollar Value That May Yet Be Purchased (in millions) | | :--- | :--- | :--- | | Jan 1-31, 2025 | — | $200.0 | | Feb 1-28, 2025 | — | $200.0 | | March 1-31, 2025 | — | $200.0 | | **Total** | **—** | **$200.0** | [Defaults Upon Senior Securities](index=47&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[227](index=227&type=chunk) [Other Information](index=47&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025[227](index=227&type=chunk) [Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications required by Sarbanes-Oxley Act, and iXBRL data - Exhibits filed include CEO and CFO certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002[229](index=229&type=chunk)

Core Insights - Victory Capital Holdings (VCTR) reported revenue of $219.6 million for Q1 2025, a year-over-year increase of 1.7%, but fell short of the Zacks Consensus Estimate by 2.87% [1] - The company's EPS for the same period was $1.36, compared to $1.25 a year ago, with an EPS surprise of -1.45% against the consensus estimate of $1.38 [1] Financial Performance - The total assets under management (AUM) were reported at $167.47 billion, significantly below the average estimate of $197.22 billion from four analysts [4] - The breakdown of AUM includes: - Global/Non-U.S. Equity: $18.33 billion, matching the average estimate [4] - Solutions: $63.38 billion, matching the average estimate [4] - U.S. Large Cap Equity: $13.10 billion, matching the average estimate [4] - U.S. Mid Cap Equity: $28.96 billion, matching the average estimate [4] - U.S. Small Cap Equity: $13.18 billion, matching the average estimate [4] - Alternative Investments: $2.95 billion, matching the average estimate [4] - Money Market/Short-term: $3.40 billion, matching the average estimate [4] - Total net client cash flows were reported at -$1.25 billion, worse than the average estimate of -$552.44 million [4] - Revenue from investment management fees was $173.30 million, below the average estimate of $178.26 million, but showed a year-over-year increase of 2.1% [4] - Revenue from fund administration and distribution fees was $46.30 million, also below the average estimate of $48.19 million, with a year-over-year increase of 0.5% [4] Market Performance - Victory Capital's shares returned +1.2% over the past month, compared to the Zacks S&P 500 composite's +11.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Victory Capital Holdings reported quarterly earnings of $1.36 per share, missing the Zacks Consensus Estimate of $1.38 per share, but showing an increase from $1.25 per share a year ago, indicating a slight earnings surprise of -1.45% [1] Financial Performance - The company posted revenues of $219.6 million for the quarter ended March 2025, which was below the Zacks Consensus Estimate by 2.87%, but an increase from $215.86 million year-over-year [2] - Over the last four quarters, Victory Capital has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Victory Capital shares have declined approximately 10.5% since the beginning of the year, compared to a decline of -4.3% for the S&P 500 [3] Future Outlook - The company's earnings outlook is mixed, with the current consensus EPS estimate for the coming quarter at $1.49 on revenues of $358.75 million, and for the current fiscal year at $6.02 on revenues of $1.32 billion [7] - The Zacks Industry Rank for Financial - Investment Management is currently in the bottom 15% of over 250 Zacks industries, which may impact stock performance [8]

Financial Highlights - Total client assets reached $1714 billion[7] - Long-term gross flows amounted to $93 billion with net flows of -$12 billion[7] - ETF gross flows were $31 billion and net flows were $28 billion[7] - Adjusted EBITDA stood at $1164 million with a margin of 530%[7] - Cash and cash equivalents totaled $176 million[7] - The quarterly cash dividend increased by 4% to $049 per share[7] Strategic Partnership with Amundi - Total assets under the partnership are projected to be $286 billion[9] - Projected net expense synergies are estimated at $110 million[9] Investment Performance - 67% of total mutual funds and ETFs AUM have 4- or 5-Star overall ratings[14] - 79% of strategies outperformed benchmarks over the 10-year period[15] Q1 2025 Financial Results - Revenue was $2196 million[18] - GAAP Operating Income was $929 million with a margin of 423%[18] - Adjusted Net Income with tax benefit was $881 million or $136 per diluted share[18]

Financial Performance - First-quarter revenue was $219.6 million, a 1.7% increase year-over-year from $215.9 million, but a decrease of $12.8 million from the previous quarter[20] - GAAP net income for the first quarter was $62.0 million, down 19.5% from $76.9 million in the fourth quarter, translating to earnings of $0.96 per diluted share[18] - Adjusted EBITDA for the first quarter was $116.4 million, a decrease of 7.1% from $125.5 million in the fourth quarter, with an adjusted EBITDA margin of 53.0%[19] - Total revenue for Q1 2025 was $219.602 million, a decrease of 5.4% from $232.371 million in Q4 2024 and an increase of 1.1% from $215.857 million in Q1 2024[33] - Net income for Q1 2025 was $61.975 million, down 19.5% from $76.939 million in Q4 2024 and up 11.5% from $55.691 million in Q1 2024[33] - Adjusted EBITDA for Q1 2025 was $116.399 million, with an adjusted EBITDA margin of 53.0%[35] - The company reported a basic earnings per share of $0.97 for Q1 2025, compared to $1.19 in Q4 2024 and $0.86 in Q1 2024[33] Client Assets and Flows - Total client assets reached $171.4 billion, with assets under management (AUM) at $167.5 billion, reflecting a decrease of $4.5 billion from $171.9 billion at December 31, 2024[15] - Total client assets at the end of Q1 2025 were $171.435 million, a decrease from $176.096 million at the end of Q4 2024 and an increase from $175.459 million at the end of Q1 2024[41] - Ending assets under management (AUM) for Q1 2025 were $167.468 million, down from $171.930 million in Q4 2024 and up from $170.342 million in Q1 2024[41] - The company experienced a net cash outflow of $1.526 million in total client assets for Q1 2025, compared to $2.545 million in Q4 2024[41] - Long-term gross flows for the first quarter totaled $9.3 billion, while long-term net flows were negative at ($1.2) billion[10] - Total gross flows for the first quarter were $9.5 billion, indicating strong client engagement despite net outflows[15] - Gross client cash inflows for the three months ended March 31, 2025, were $9,486 million, an increase from $6,793 million in the previous quarter[45] - Gross client cash outflows increased to $10,736 million for the three months ended March 31, 2025, compared to $8,663 million in the previous quarter[45] - Net client cash flows for the three months ended March 31, 2025, were negative at $(1,249) million, improving from $(1,870) million in the previous quarter[45] Market Performance - Investment performance remained strong, with 64%, 65%, and 79% of AUM outperforming benchmarks over the 3-, 5-, and 10-year periods, respectively[7] - Market depreciation for the quarter was $(3.172) billion, compared to $(2.237) billion in the previous quarter, representing a decline of about 42%[53] - Market appreciation for other assets (institutional) was $78 million for the three months ended March 31, 2025, recovering from a depreciation of $(141) million in the previous quarter[47] Dividends and Shareholder Returns - The Board declared a record quarterly cash dividend of $0.49 per share, payable on June 25, 2025[10] Company Transactions and Strategic Moves - The company successfully closed a transaction with Amundi on April 1, enhancing its scale and diversification across asset classes and geographies[6] Assets and Liabilities - Total assets as of March 31, 2025, were $2.583 billion, an increase from $2.548 billion at the end of Q4 2024[37] - Victory Capital's total liabilities were $1.439 billion as of March 31, 2025, compared to $1.426 billion at the end of Q4 2024[37] - Other institutional assets decreased to $3,967 million as of March 31, 2025, from $4,165 million as of December 31, 2024[47] - The company experienced a net cash outflow of $(10.736) billion for the quarter, compared to $(8.663) billion in the previous quarter, indicating a worsening liquidity position[53] Adjusted Metrics - Adjusted EBITDA and Adjusted Net Income are used to measure operating profitability, excluding one-time acquisition and restructuring costs[55] - The tax benefit from amortization of acquired intangible assets and goodwill is significant, providing additional economic benefits to the company[56] - The company added back various expenses, including income tax, interest on debt, and stock-based compensation, to calculate Adjusted EBITDA[57]

Core Viewpoint - Analysts expect Victory Capital Holdings (VCTR) to report quarterly earnings of $1.38 per share, reflecting a year-over-year increase of 10.4%, with revenues projected at $226.09 million, up 4.7% from the previous year [1]. Earnings Projections - Over the last 30 days, there has been a downward revision of 1.3% in the consensus EPS estimate for the quarter, indicating a collective reconsideration by analysts of their initial forecasts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue and Key Metrics - Analysts forecast 'Revenue- Fund administration and distribution fees' at $48.19 million, a year-over-year increase of 4.6% [5]. - The average prediction for 'Revenue- Investment management fees' is $178.26 million, indicating a 5% increase from the prior-year quarter [5]. - 'Ending Assets Under Management' is expected to reach $197.22 billion, up from $170.34 billion in the same quarter last year [5]. Specific Asset Management Estimates - 'Ending assets under management - Global/Non-U.S. Equity' is projected at $18.33 billion, slightly up from $18.20 billion a year ago [6]. - 'Ending assets under management - Solutions' is expected to be $63.38 billion, compared to $57.83 billion last year [6]. - 'Ending assets under management - U.S. Large Cap Equity' is estimated at $13.10 billion, down from $13.90 billion a year ago [7]. - 'Ending assets under management - U.S. Mid Cap Equity' is projected at $28.96 billion, down from $32.92 billion last year [7]. - 'Ending assets under management - U.S. Small Cap Equity' is expected to be $13.18 billion, down from $16.30 billion [8]. - 'Ending assets under management - Alternative Investments' is projected at $2.95 billion, down from $3.47 billion [8]. - 'Ending assets under management - Money Market/Short-term' is estimated at $3.40 billion, up from $3.25 billion last year [9]. - 'Ending assets under management - Fixed Income' is expected to be $24.16 billion, slightly down from $24.48 billion a year ago [9]. Stock Performance - Shares of Victory Capital have returned +13.5% over the past month, outperforming the Zacks S&P 500 composite's +10.6% change [9].

Group 1: Victory Capital Holdings, Inc. (VCTR) Performance - VCTR reported assets under management (AUM) of $175.5 billion for February 2025, reflecting a 0.6% decline from $176.5 billion as of January 31, 2024 [1] - U.S. mid cap equity AUM decreased 2.9% to $30.4 billion, while U.S. small cap equity AUM dipped 5.3% to $14.2 billion [1] - Global/non-U.S. equity AUM rose 5.8% to $20.6 billion, and U.S. large cap equity AUM decreased 3.7% to $13.9 billion [1] Group 2: Solutions and Alternative Investments - VCTR recorded $65.5 billion in Solutions, up 0.1% from January 2025 [2] - Alternative investments asset balance declined 2.6% to $2.9 billion, while fixed-income AUM was $24.4 billion, increasing marginally [2] - Money market/short-term assets rose 1.9% to $3.4 billion [2] Group 3: Market Positioning - VCTR's integrated multi-boutique business model and effective distribution platform are expected to enhance performance in the near term [3] Group 4: Performance of Other Asset Managers - Franklin Resources, Inc. (BEN) reported preliminary AUM of $1.58 trillion as of February 28, 2025, showing a marginal decrease [4] - BEN's decline in AUM was attributed to long-term net outflows of $10 billion, despite positive market impacts [4] - AllianceBernstein Holding L.P. (AB) announced preliminary AUM of $805 billion for February 2025, reflecting a marginal decrease [5] - AB's Equity AUM declined 2.6% to $333 billion, while Fixed-Income AUM increased 1.3% to $303 billion [5]