Core Insights - Virtus Investment Partners, Inc. (VRTS) reported preliminary assets under management (AUM) of $170.8 billion for July 2025, showing a slight increase from June 30, 2025, primarily driven by positive net flows in exchange-traded funds and institutional accounts, despite net outflows in U.S. retail funds, retail separate accounts, and global funds [1][7] Group 1: AUM Performance - The company’s AUM of $170.8 billion includes $1.8 billion of other fee-earning assets, which were excluded from the AUM balance [2] - The open-end fund balance decreased nearly 1% from the prior month to $55.3 billion, while the closed-end fund balance increased by 1% to $10.6 billion [3] - Institutional accounts balance fell slightly to $57 billion sequentially, and retail separate accounts balance rose by 1.2% to $47.4 billion [3] Group 2: Business Model and Financial Outlook - The integrated multi-boutique business model of the company is expected to support its performance in a rapidly growing industry [4] - A decline in operating expenses is anticipated to bolster Virtus Investment's bottom line in the near term [4] Group 3: Industry Comparison - Victory Capital Holdings, Inc. (VCTR) reported AUM of $299.8 billion for July 2025, reflecting a marginal increase from June 30, 2025 [5] - Invesco (IVZ) announced its AUM of $2,024.5 billion as of July 31, 2025, which increased by 1.2% from the previous month, influenced by favorable market returns and impacted by foreign exchange [6]

Core Insights - Vertiqal Studios has acquired certain assets of Revmo Inc., enhancing its capabilities in social commerce and data management [1][2] - The acquisition includes Revmo's core intellectual property, which will bolster Vertiqal's technology efforts and improve client acquisition and retention [2][3] - Freddie de Sibert, founder of Revmo, has been appointed as Vertiqal's Chief Data Officer, bringing significant industry experience [1][4] Company Overview - Vertiqal Studios is North America's largest owner of gaming and lifestyle social media channels, specializing in digital strategy and content distribution [12] - The company manages over 130 channels across platforms like TikTok, Instagram, and Snapchat, producing more than 100 pieces of content daily for an audience exceeding 52 million followers [12] - Vertiqal partners with major brands to create innovative advertising solutions, leveraging its deep understanding of culture and community [12] Acquisition Details - The asset purchase agreement (APA) was executed on August 7, 2025, with Vertiqal acquiring Revmo's intellectual property for approximately US$1,140,916 (CDN$1,561,615) [3] - In exchange, Vertiqal issued 62,464,656 common shares at a deemed price of C$0.025 per share, with a hold period of two years plus one day [3] - The acquisition is subject to final approval from the Toronto Stock Exchange [3] Data Capabilities - Revmo's data platform provides real-time and historical data analysis across multiple social media channels, enhancing audience insights and predictive capabilities [4][5] - Vertiqal will gain full-lifecycle visibility on engagement across 170+ channels and 3+ platforms, improving operational capabilities and revenue potential [5][8] - The integration of Revmo's data platform allows Vertiqal to engage with a "digital twin" of their audiences, enhancing data-driven decision-making [7] Strategic Impact - This acquisition marks a significant milestone in Vertiqal's growth trajectory, expanding revenue capabilities and improving operating margins [9] - The integration of advanced data analytics will accelerate Vertiqal's adoption of AI technologies, enabling better media classification and trend prediction [9][10] - Vertiqal aims to transform into a data-driven engagement platform, enhancing its competitive advantage in the digital media landscape [10]

Part I. FINANCIAL INFORMATION This section provides the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the recent reporting period [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Virtus Investment Partners, Inc. as of June 30, 2025, and for the three and six-month periods then ended. It includes the Balance Sheets, Statements of Operations, Comprehensive Income, Cash Flows, and Changes in Stockholders' Equity, along with accompanying notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity as of specific dates Balance Sheet Highlights (in thousands) | Balance Sheet Highlights (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $172,204 | $265,888 | | Total assets | $3,696,219 | $3,994,494 | | Debt | $231,279 | $232,130 | | Total liabilities | $2,674,793 | $2,985,576 | | Total equity | $898,329 | $901,636 | - Total assets decreased from **$4.0 billion** at year-end 2024 to **$3.7 billion** as of June 30, 2025, primarily driven by a decrease in cash and cash equivalents and assets of consolidated investment products (CIP)[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's revenues, expenses, and net income for the specified reporting periods Statements of Operations (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $210,525 | $224,384 | $428,457 | $446,426 | | Operating Income | $45,210 | $44,205 | $81,805 | $76,511 | | Net Income Attributable to Virtus | $42,373 | $17,614 | $71,020 | $47,472 | | Earnings per Share—Diluted | $6.12 | $2.43 | $10.15 | $6.54 | - For the three months ended June 30, 2025, net income attributable to Virtus increased significantly to **$42.4 million** (**$6.12 per diluted share**) from **$17.6 million** (**$2.43 per diluted share**) in the prior-year period. For the six-month period, net income increased to **$71.0 million** from **$47.5 million** year-over-year[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the company's cash inflows and outflows from operating, investing, and financing activities Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $71,970 | $35,427 | | Net cash used in investing activities | ($4,012) | ($3,800) | | Net cash used in financing activities | ($226,525) | ($21,844) | - Net cash used in financing activities increased substantially to **$226.5 million** for the six months ended June 30, 2025, from **$21.8 million** in the prior year period, largely due to lower net borrowings by CIP and increased common stock repurchases[15](index=15&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements - The company provides investment management services to institutions and individuals through various products, including open-end funds, closed-end funds, retail separate accounts, and institutional accounts[23](index=23&type=chunk) - On May 14, 2025, the company declared a quarterly cash dividend of **$2.25 per common share**[44](index=44&type=chunk) - During the six months ended June 30, 2025, the company repurchased **287,072 common shares** for a total cost of **$50.0 million**[45](index=45&type=chunk) - The company consolidates various investment products (CIP), including collateralized loan obligations (CLOs), where it is deemed the primary beneficiary. The company's risk is limited to its beneficial interests in these products[68](index=68&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the second quarter and first half of 2025. Key topics include a decrease in total revenues and assets under management (AUM) compared to the prior year, driven by net outflows, although operating income increased due to lower expenses. The analysis covers AUM trends, asset flows, results of operations by segment, and the company's liquidity and capital resources [Financial Highlights](index=23&type=section&id=Financial%20Highlights) This section summarizes key financial and operational metrics, including assets under management, net flows, revenues, operating income, and diluted earnings per share - Total assets under management (AUM) were **$170.7 billion** at June 30, 2025, a decrease of **1.7%** from June 30, 2024, and **2.5%** from December 31, 2024. The year-over-year decrease was driven by **$13.5 billion** in net outflows, partially offset by **$13.3 billion** in positive market performance[98](index=98&type=chunk) Assets Under Management by Product (in millions) | Assets Under Management by Product (in millions) | As of June 30, 2025 | As of June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Open-End Funds | $55,653 | $55,852 | (0.4)% | | Closed-End Funds | $10,481 | $9,915 | 5.7% | | Retail Separate Accounts | $47,445 | $45,672 | 3.9% | | Institutional Accounts | $57,131 | $62,146 | (8.1)% | | **Total** | **$170,710** | **$173,585** | **(1.7)%** | - Total net flows were an outflow of **$(3.9) billion** in Q2 2025, compared to an outflow of **$(2.6) billion** in Q2 2024. For the first six months of 2025, net outflows were **$(6.9) billion**[97](index=97&type=chunk)[102](index=102&type=chunk) - For Q2 2025, total revenues decreased **6.2%** YoY to **$210.5 million**, while operating income increased **2.3%** to **$45.2 million**. Diluted EPS grew **151.9%** to **$6.12**, compared to **$2.43** in Q2 2024[100](index=100&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's revenues and operating expenses for the reported periods Financial Summary (in thousands) | Financial Summary (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total revenues | $210,525 | $224,384 | (6.2)% | | Total operating expenses | $165,315 | $180,179 | (8.2)% | | Operating income | $45,210 | $44,205 | 2.3% | | Net Income Attributable to Virtus | $42,373 | $17,614 | 140.6% | - The **6.4%** decrease in total investment management fees for Q2 2025 was primarily due to decreased average assets under management[115](index=115&type=chunk) - Employment expenses, the largest operating expense, decreased by **7.2%** in Q2 2025 compared to the prior-year quarter, mainly due to lower profit- and sales-based compensation[120](index=120&type=chunk) - Amortization expense decreased by **14.8%** in Q2 2025, primarily due to certain intangible assets becoming fully amortized[128](index=128&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, cash flow activities, and debt obligations, highlighting changes in liquidity and capital management - As of June 30, 2025, the company held **$172.2 million** in cash and cash equivalents, a decrease from **$265.9 million** at December 31, 2024[141](index=141&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $71,970 | $35,427 | | Net cash used in investing activities | ($4,012) | ($3,800) | | Net cash used in financing activities | ($226,525) | ($21,844) | - Net cash from operating activities increased to **$72.0 million** in the first half of 2025, up from **$35.4 million** in the prior year, mainly due to higher net sales of investments by consolidated investment products (CIP)[147](index=147&type=chunk) - The company had **$234.7 million** outstanding under its Term Loan as of June 30, 2025[150](index=150&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that its primary market risk exposures relate to unfavorable movements in interest rates and securities prices. There were no material changes to the market risk disclosures from the company's 2024 Annual Report on Form 10-K - The company's primary market risks are associated with interest rates and securities prices, with no material changes reported during the quarter[153](index=153&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of June 30, 2025. No material changes to internal control over financial reporting were identified during the quarter - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[156](index=156&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[157](index=157&type=chunk) Part II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other relevant disclosures not included in the financial statements [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company incorporates by reference the information on legal proceedings from Note 14, "Commitments and Contingencies," in the financial statements section of this report. The company believes that the outcomes of its legal and regulatory proceedings are not likely to have a material adverse effect - Information regarding legal proceedings is detailed in Note 14 of the financial statements[158](index=158&type=chunk) - The company does not expect legal proceedings to have a material adverse effect on its financial condition, based on currently available information[61](index=61&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The company reports that there have been no material changes to its risk factors from those previously disclosed in its 2024 Annual Report on Form 10-K - No material changes to the company's risk factors were reported since the 2024 Annual Report on Form 10-K[159](index=159&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchase activity during the second quarter of 2025. The Board of Directors authorized an additional 750,000 shares for repurchase on May 15, 2025. As of June 30, 2025, 866,240 shares remained available for repurchase under the program Common Stock Repurchase Activity | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1-30, 2025 | 5,433 | $153.32 | | May 1-31, 2025 | 102,438 | $169.37 | | June 1-30, 2025 | 68,001 | $173.70 | | **Total Q2 2025** | **175,872** | **N/A** | - On May 15, 2025, the Board authorized an additional **750,000 shares** for the repurchase program, leaving **866,240 shares** available for repurchase as of June 30, 2025[160](index=160&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) The company reports that none of its directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 - No directors or officers adopted, terminated, or modified a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q2 2025[163](index=163&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002 and Inline XBRL data files - Filed exhibits include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL data files[164](index=164&type=chunk)

Financial Data and Key Metrics Changes - Assets under management grew by 2% in the quarter, reaching $171 billion, an increase of $4 billion sequentially due to market performance [6][9] - Earnings per share as adjusted increased to $6.25 from $5.73 in the first quarter, although it decreased by 4% compared to the prior year period [13][24] - Operating margin improved to 31.3% from 27.6% in the previous quarter [12][23] Business Line Data and Key Metrics Changes - Total sales for the quarter were $5.6 billion, down from $6.2 billion in the first quarter, with net outflows of $3.9 billion primarily in equity strategies [10][17] - Positive net flows in ETFs reached $3.7 billion, with an organic growth rate of 74% over the trailing twelve months [10][19] - Institutional sales decreased to $1.3 billion from $1.5 billion, while retail separate account sales declined to $1.5 billion from $1.7 billion [17][18] Market Data and Key Metrics Changes - Net outflows in institutional products increased to $2.2 billion, driven by quality-oriented large cap strategies [18] - Fixed income strategies returned to positive flows in June after modestly negative flows in April and May [11][12] - The market sentiment in July continued to trend favorably, with stronger flow profiles for fixed income funds [11][48] Company Strategy and Development Direction - The company is focused on expanding its offerings in retail separate accounts, ETFs, and global funds, with multiple product launches anticipated [7][8] - There is an emphasis on pursuing growth opportunities in private markets and differentiated traditional strategies [8][35] - The company aims to leverage its strong liquidity and flexible balance sheet to act on strategically compelling opportunities [8][27] Management's Comments on Operating Environment and Future Outlook - Management noted that the second quarter began with challenging market conditions but saw steady improvement by June [5] - The company remains optimistic about growth opportunities, particularly in private markets and differentiated strategies [8][35] - Management highlighted that the pipeline of opportunities is at its highest level, indicating a favorable environment for product expansion [8][35] Other Important Information - The company repurchased $30 million worth of shares during the quarter, the highest level in three years, contributing to a 3% reduction in share count [13][26] - The company ended the quarter with significant liquidity and a modest net debt position, providing flexibility for future investments [13][27] Q&A Session Summary Question: Share repurchases and capital allocation - Management indicated a balanced approach to capital management, with a focus on share repurchases due to compelling stock valuation and upcoming capital uses [29][31] Question: M&A outlook and asset types - Management discussed the high level of activity in evaluating opportunities, particularly in private markets and traditional strategies, emphasizing the need for differentiated capabilities [32][35] Question: Compensation structure and expense management - Management clarified that compensation is highly variable and linked to performance, with no anticipated catch-up spending expected [39][41] Question: Flow trends in July - Management noted that July continued the positive trend seen in June, particularly in fixed income and ETFs, while quality-oriented equities faced outflows [45][48] Question: ETF platform success and growth initiatives - Management expressed satisfaction with the growth of the ETF platform, highlighting ongoing product expansion and the importance of access to financial advisors [62][65] Question: Inorganic activity prioritization - Management stated that all types of opportunities are evaluated individually, with a focus on creating long-term shareholder value through strategic partnerships [68][70]

Assets Under Management (AUM) and Flows - AUM increased by 2% to $1707 billion due to market performance and positive ETF net flows[12,14] - Average AUM decreased by 4% to $1670 billion[12] - Net outflows were ($39) billion, attributed to institutional, US retail funds, and retail separate accounts[12,17,19] - ETF AUM increased 74% year-over-year to $37 billion[17] Financial Performance - Operating income, as adjusted, was $598 million[12] - Operating margin, as adjusted, was 313%[12,33] - Earnings per diluted share, as adjusted, were $625[12,35] - Investment management fees, as adjusted, decreased by 4% primarily due to lower average AUM[25] Capital Activities and Balance Sheet - Stock repurchases totaled $30 million at an average price of $171 per share, reducing shares outstanding by 2% sequentially[12,39] - Net leverage was modest at 02x EBITDA[12,39] - Cash and investments totaled $447 million[39] Investment Performance - 41% of total AUM outperformed its benchmark over a 1-year period[41] - 57% of total AUM outperformed its benchmark over a 3-year period[41] - 65% of total mutual fund AUM outperformed peers over a 1-year period[42] - 55% of total mutual fund AUM outperformed peers over a 3-year period[42]

Company Performance - Virtus Investment Partners reported quarterly earnings of $6.25 per share, exceeding the Zacks Consensus Estimate of $6.21 per share, but down from $6.53 per share a year ago, representing an earnings surprise of +0.64% [1] - The company posted revenues of $190.99 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.38% and down from $203.01 million year-over-year [2] - Over the last four quarters, Virtus has surpassed consensus EPS estimates four times but has not beaten consensus revenue estimates [2] Stock Outlook - The immediate price movement of Virtus shares will depend on management's commentary during the earnings call, with shares down about 3.1% year-to-date compared to the S&P 500's gain of 8.2% [3] - The current consensus EPS estimate for the upcoming quarter is $6.87 on revenues of $199.59 million, and for the current fiscal year, it is $25.94 on revenues of $788.23 million [7] Industry Context - The Financial - Investment Management industry, to which Virtus belongs, is currently in the top 5% of over 250 Zacks industries, indicating a favorable outlook for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that tracking these revisions can be beneficial for investors [5]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) This section provides an overview of the company's financial results, including key highlights and earnings summary for the period [Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the second quarter of 2025, Virtus reported a significant increase in GAAP net income and EPS, driven by lower operating expenses and favorable fair value adjustments, despite a 6% year-over-year decrease in GAAP revenues to $210.5 million, while non-GAAP adjusted EPS declined 4% year-over-year but rose 9% quarter-over-quarter Q2 2025 Financial Highlights (Unaudited, in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YoY Change | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **U.S. GAAP** | | | | | | | Revenues | $210.5 | $224.4 | (6%) | $217.9 | (3%) | | Operating Income | $45.2 | $44.2 | 2% | $36.6 | 23% | | Operating Margin | 21.5% | 19.7% | +1.8pp | 16.8% | +4.7pp | | Net Income | $42.4 | $17.6 | 141% | $28.6 | 48% | | Diluted EPS | $6.12 | $2.43 | 152% | $4.05 | 51% | | **Non-GAAP (As Adjusted)** | | | | | | | Revenues | $191.0 | $203.0 | (6%) | $197.6 | (3%) | | Operating Income | $59.8 | $66.0 | (9%) | $54.6 | 10% | | Operating Margin | 31.3% | 32.5% | -1.2pp | 27.6% | +3.7pp | | Net Income | $43.3 | $47.3 | (8%) | $40.5 | 7% | | Diluted EPS | $6.25 | $6.53 | (4%) | $5.73 | 9% | [Earnings Summary](index=1&type=section&id=Earnings%20Summary) The company reported diluted earnings per share of $6.12 on a GAAP basis and $6.25 on an adjusted basis for Q2 2025, with total sales of $5.6 billion and net outflows of ($3.9) billion, resulting in ending Assets Under Management of $170.7 billion - Reported Diluted EPS was **$6.12** (GAAP) and **$6.25** (As Adjusted)[4](index=4&type=chunk) - Total sales reached **$5.6 billion**, but the company experienced net outflows of **($3.9) billion**[4](index=4&type=chunk) - Ending Assets Under Management (AUM) stood at **$170.7 billion**[4](index=4&type=chunk) [Assets Under Management (AUM) and Flows](index=2&type=section&id=Assets%20Under%20Management%20%28AUM%29%20and%20Flows) This section details the company's assets under management, including changes in AUM, asset flows by product, and average management fees [AUM and Asset Flow Summary](index=2&type=section&id=AUM%20and%20Asset%20Flow%20Summary) Total assets under management increased 2% sequentially to $170.7 billion at the end of Q2 2025, driven by market performance which offset net outflows of ($3.9) billion, with sales declining across institutional, retail separate accounts, and open-end funds compared to the prior quarter, primarily due to redemptions in institutional large-cap growth and retail small/mid-cap strategies AUM and Flows (in billions) | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Ending AUM | $170.7 | $167.5 | 2% | | Average AUM | $167.0 | $173.6 | (4%) | | Total Sales | $5.6 | $6.2 | (11%) | | Net Flows | ($3.9) | ($3.0) | 32% | - The sequential increase in AUM was due to market performance and positive net flows in ETFs, which were partially offset by net outflows in other products[5](index=5&type=chunk) - Net outflows of **($3.9) billion** worsened from **($3.0) billion** in the prior quarter, with institutional net flows of **($2.2) billion** being the largest contributor due to redemptions in large-cap growth[7](index=7&type=chunk) [AUM by Product and Asset Class](index=7&type=section&id=AUM%20by%20Product%20and%20Asset%20Class) As of June 30, 2025, the company's $170.7 billion in AUM was primarily concentrated in Equity ($96.2 billion), with the largest product allocations to Institutional Accounts ($57.1 billion) and Open-End Funds ($55.7 billion), as both Equity and Fixed Income asset classes saw sequential growth in AUM while Alternatives declined AUM Breakdown as of June 30, 2025 (in billions) | Category | AUM | % of Total | | :--- | :--- | :--- | | **By Product** | | | | Institutional Accounts | $57.1 | 33.5% | | Open-End Funds | $55.7 | 32.6% | | Retail Separate Accounts | $47.4 | 27.8% | | Closed-End Funds | $10.5 | 6.1% | | **By Asset Class** | | | | Equity | $96.2 | 56.4% | | Fixed Income | $38.6 | 22.6% | | Multi-Asset | $21.4 | 12.5% | | Alternatives | $14.5 | 8.5% | [Asset Flows by Product](index=9&type=section&id=Asset%20Flows%20by%20Product) In Q2 2025, total net outflows were ($3.9) billion, with Institutional Accounts experiencing the largest net outflows at ($2.2) billion, followed by Open-End Funds at ($1.0) billion and Retail Separate Accounts at ($0.8) billion, while Closed-End Funds had slightly positive net flows, and total inflows for the quarter were $5.6 billion, a decrease from $6.2 billion in the prior quarter Q2 2025 Net Flows by Product (in millions) | Product | Inflows | Outflows | Net Flows | | :--- | :--- | :--- | :--- | | Institutional Accounts | $1,283 | ($3,455) | ($2,172) | | Open-End Funds | $2,825 | ($3,806) | ($981) | | Retail Separate Accounts | $1,468 | ($2,264) | ($796) | | Closed-End Funds | $4 | ($2) | $2 | | **Total** | **$5,580** | **($9,527)** | **($3,947)** | [Average Management Fees](index=8&type=section&id=Average%20Management%20Fees) The average management fee for all products was 41.3 basis points in Q2 2025, a slight decrease from the prior quarter and prior year, primarily driven by a lower fee rate in Open-End Funds, which dropped to 46.7 basis points, while Closed-End Funds commanded the highest fee rate at 58.6 basis points Average Management Fees Earned (in basis points) | By Product | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Open-End Funds | 46.7 | 47.8 | 50.9 | | Closed-End Funds | 58.6 | 58.5 | 58.6 | | Retail Separate Accounts | 42.9 | 42.9 | 43.3 | | Institutional Accounts | 31.8 | 31.8 | 30.7 | | **All Products** | **41.3** | **41.7** | **42.2** | [Detailed Financial Results](index=3&type=section&id=Detailed%20Financial%20Results) This section provides a comprehensive breakdown of the company's financial performance, including GAAP and Non-GAAP results, and insights into its balance sheet and capital management strategies [GAAP Results](index=3&type=section&id=GAAP%20Results) GAAP operating income for Q2 2025 increased 23% sequentially to $45.2 million, primarily due to a 9% reduction in operating expenses that more than offset a 3% decline in revenues, with the expense reduction led by lower employment costs, and net income per diluted share was $6.12, which included positive fair value adjustments, while the effective tax rate decreased significantly to 22% from 31% in the prior quarter - Operating income rose to **$45.2 million** from **$36.6 million** in Q1 2025, driven by lower employment expenses and a favorable change in the fair value of contingent consideration[9](index=9&type=chunk) - Net income per diluted share of **$6.12** included positive fair value adjustments of **$0.50** for minority interests and **$0.32** for contingent consideration[10](index=10&type=chunk) - The effective tax rate fell to **22%** from **31%** in the prior quarter, mainly due to a decrease in income tax valuation allowances[11](index=11&type=chunk) [Non-GAAP Results](index=3&type=section&id=Non-GAAP%20Results) On a non-GAAP basis, adjusted operating income increased 10% sequentially to $59.8 million, with the adjusted operating margin expanding to 31.3% from 27.6%, primarily due to lower seasonal employment expenses compared to the prior quarter, while adjusted net income per diluted share rose 9% sequentially to $6.25, and the adjusted effective tax rate remained stable at 26% - Revenues, as adjusted, decreased **3%** sequentially to **$191.0 million** due to lower average AUM[12](index=12&type=chunk) - Adjusted operating income of **$59.8 million** and margin of **31.3%** increased from **$54.6 million** and **27.6%** in Q1 2025, mainly due to the absence of prior quarter seasonal expenses[13](index=13&type=chunk) - Adjusted EPS increased **9%** to **$6.25** from **$5.73** in the prior quarter, reflecting the impact of lower seasonal employment costs[13](index=13&type=chunk) [Balance Sheet and Capital Management](index=4&type=section&id=Balance%20Sheet%20and%20Capital%20Management) As of June 30, 2025, the company held $172.2 million in cash and cash equivalents, with gross debt at $234.7 million, and net debt decreased significantly by 38% from the prior quarter to $62.5 million, representing a leverage ratio of 0.2 times EBITDA, while the company repurchased 175,872 shares for $30.0 million during the quarter Select Balance Sheet Items (in millions) | Item | 6/30/2025 | 3/31/2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $172.2 | $135.4 | 27% | | Gross debt | $234.7 | $235.4 | —% | | Working capital | $144.0 | $137.2 | 5% | | Net debt (cash) | $62.5 | $100.0 | (38%) | - The company repurchased **175,872 shares** for **$30.0 million** during the second quarter[17](index=17&type=chunk) - Net debt stood at **$62.5 million**, equating to a leverage ratio of **0.2 times EBITDA**[17](index=17&type=chunk) [Non-GAAP Information and Reconciliations](index=10&type=section&id=Non-GAAP%20Information%20and%20Reconciliations) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, along with explanatory notes and definitions of the adjusted metrics [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section provides detailed reconciliations of U.S. GAAP financial measures to the company's non-GAAP adjusted measures, with key metrics reconciled including revenues, operating expenses, operating income, income before taxes, and net income, where for Q2 2025, GAAP operating income of $45.2 million was adjusted for items such as amortization of intangibles (+$12.9 million) and consolidated investment products (+$3.2 million) to arrive at an adjusted operating income of $59.8 million Q2 2025 Reconciliation of GAAP to Non-GAAP Operating Income (in millions) | Description | Amount | | :--- | :--- | | **Operating income (loss), GAAP** | **$45.2** | | Consolidated investment products (earnings) losses | $3.2 | | Distributions to minority interests | $0.7 | | Amortization of intangible assets | $12.9 | | Acquisition and integration expenses | ($2.6) | | Other adjustments | $0.3 | | **Operating income (loss), as adjusted** | **$59.8** | - Management believes non-GAAP measures are useful to investors as they reflect the company's core operating results from providing investment management services[26](index=26&type=chunk) [Notes to Reconciliations](index=13&type=section&id=Notes%20to%20Reconciliations) The notes explain the rationale for each non-GAAP adjustment, including excluding the revenues and expenses of consolidated investment products, removing non-cash amortization of acquisition-related intangible assets, and eliminating expenses directly related to acquisition and integration activities, with other adjustments made for items not reflective of ongoing earnings, such as restructuring costs and fair value changes of contingent consideration - Consolidated investment products' results are excluded to reflect the company's performance from managing third-party client assets[31](index=31&type=chunk) - Amortization of intangible assets is excluded to aid in comparison with firms that have not engaged in acquisitions[35](index=35&type=chunk) - Acquisition and integration expenses, including changes in fair value of contingent consideration, are removed as they are not part of ongoing operations[38](index=38&type=chunk) [Definitions of Non-GAAP Measures](index=15&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section defines the key non-GAAP metrics used in the report, where 'Revenues, as adjusted' represent core client fees, excluding consolidated products and fees passed through to third-party intermediaries, 'Operating expenses, as adjusted' exclude items like amortization, restructuring, and acquisition costs to reflect ongoing operational expenses, and 'Operating margin, as adjusted' and 'Earnings per share, as adjusted' are derived from these adjusted figures - **Revenues, as adjusted:** Excludes the impact of consolidated investment products and fees passed through to third-party client intermediaries[39](index=39&type=chunk) - **Operating expenses, as adjusted:** Excludes amortization of intangible assets, restructuring, acquisition expenses, and other non-recurring items[40](index=40&type=chunk) - **Operating margin, as adjusted:** Calculated as operating income, as adjusted, divided by revenues, as adjusted[41](index=41&type=chunk) [Other Information](index=5&type=section&id=Other%20Information) This section provides additional context, including details on investor communications, company background, and important disclaimers regarding forward-looking statements [Conference Call and Investor Information](index=5&type=section&id=Conference%20Call%20and%20Investor%20Information) Virtus management will host an investor conference call and webcast on Friday, July 25, 2025, at 10 a.m. Eastern Time to discuss the second quarter financial results, with an accompanying presentation available in the Investor Relations section of the company's website - An investor conference call is scheduled for July 25, 2025, at 10 a.m. Eastern to discuss the financial results[19](index=19&type=chunk) [About Virtus Investment Partners](index=5&type=section&id=About%20Virtus%20Investment%20Partners) Virtus Investment Partners is a company that operates as a partnership of boutique investment managers, providing a variety of investment products and services from its affiliated managers and select subadvisers, each with a distinct and autonomous investment style, catering to both individual and institutional investors - The company operates a multi-boutique asset management model, offering investment solutions from various managers with distinct investment styles[20](index=20&type=chunk) [Forward-Looking Statements](index=15&type=section&id=Forward-Looking%20Statements) This section contains a standard legal disclaimer regarding forward-looking statements, cautioning that statements about expectations and projections are not guarantees of future performance and involve substantial risks and uncertainties, and directs investors to its SEC filings, such as the Form 10-K, for a detailed discussion of risk factors - The press release includes forward-looking statements that are based on current expectations and are not guarantees of future results[42](index=42&type=chunk)[43](index=43&type=chunk) - Investors are advised to consider the risks and uncertainties detailed in the company's SEC filings, including its Annual Report on Form 10-K[44](index=44&type=chunk)

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Virtus Investment Partners (VRTS) due to lower revenues, with a consensus EPS estimate of $6.12, reflecting a -6.3% change, and expected revenues of $189.24 million, down 6.8% from the previous year [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for July 25, and the stock may rise if actual results exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised 7.31% higher in the last 30 days, indicating a more optimistic outlook from analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP for Virtus is +2.40%, suggesting analysts have become more bullish on the company's earnings prospects [12]. - A positive Earnings ESP combined with a Zacks Rank of 1 indicates a high likelihood of beating the consensus EPS estimate [10][12]. Historical Performance - In the last reported quarter, Virtus exceeded the expected EPS of $5.33 by delivering $5.73, resulting in a surprise of +7.50% [13]. - Over the past four quarters, Virtus has beaten consensus EPS estimates three times [14]. Industry Context - SEI Investments (SEIC), another player in the Zacks Financial - Investment Management industry, is expected to post earnings of $1.18 per share, reflecting a year-over-year increase of +12.4% [18]. - SEI's revenues are projected to be $561.07 million, up 8.1% from the previous year, with a consensus EPS estimate revised 7.8% higher in the last 30 days [19].

Company Overview - Virtus Investment Partners (VRTS) shares increased by 6.3% to close at $200.71, with notable trading volume exceeding typical levels [1] - The stock has gained 10.5% over the past four weeks, indicating positive momentum [1] Market Sentiment - Broader market optimism regarding potential trade agreements and expectations of earlier interest rate cuts by the Federal Reserve has positively influenced investor sentiment towards finance stocks [2] - Investors are seeking better investment options for higher yields, which is expected to lead to inflows for asset managers, positively impacting their revenues [2] Earnings Expectations - Virtus is projected to report quarterly earnings of $6.17 per share, reflecting a year-over-year decline of 5.5% [3] - Expected revenues for the upcoming quarter are $188.7 million, down 7.1% from the same quarter last year [3] Earnings Estimate Trends - The consensus EPS estimate for Virtus has remained unchanged over the last 30 days, suggesting that stock price movements may not sustain without trends in earnings estimate revisions [4] - The stock currently holds a Zacks Rank of 2 (Buy), indicating a favorable outlook [4] Industry Comparison - Virtus operates within the Zacks Financial - Investment Management industry, where SEI Investments (SEIC) also holds a Zacks Rank of 2 (Buy) and has seen a 7.7% return over the past month [4][5] - SEI's consensus EPS estimate has increased by 2.9% over the past month, reflecting a year-over-year change of 9.5% [5]

INVESTOR PRESENTATION Investor Relations Sean Rourke (860) 263-4709 sean.rourke@virtus.com June 2024 IMPORTANT DISCLOSURES This presentation contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements may be identified by such forward-looking ter ...