Financial Performance - Total sales in Q1 2025 were $6.2 billion, a decrease of $1.3 billion, or 17.7%, from $7.6 billion in Q1 2024[95] - Total revenues decreased by 1.9% to $217.9 million for the three months ended March 31, 2025, compared to $222.0 million in the same period of 2024[108] - Net income attributable to Virtus Investment Partners, Inc. decreased by $1.2 million, or 4.1%, to $28.6 million for the three months ended March 31, 2025[108] - Net income per diluted share in Q1 2025 was $4.05, a decrease of $0.05, or 1.2%, from $4.10 in Q1 2024[98] - Operating income in Q1 2025 was $36.6 million, an increase of $4.3 million, or 13.3%, compared to $32.3 million in Q1 2024[98] Assets and Management - Total assets under management as of March 31, 2025, were $167.5 billion, a decrease of $11.8 billion, or 6.6%, from $179.3 billion as of March 31, 2024[96] - Average assets under management for all products in Q1 2025 were $173.6 billion, a slight increase of $232 million, or 0.1%, from $173.4 billion in Q1 2024[104] - Assets under management by product showed a decrease in Open-End Funds by $4.2 billion, or 7.3%, and Institutional Accounts by $7.9 billion, or 12.3%[97] - Market performance negatively impacted total assets under management by $4.1 billion in Q1 2025[100] Expenses - Total operating expenses decreased by $8.4 million, or 4.4%, to $181.3 million for the three months ended March 31, 2025[114] - Employment expenses decreased by $6.1 million, or 5.3%, to $109.1 million for the three months ended March 31, 2025, primarily due to a decrease in profit- and sales-based compensation[115] - Distribution and service fees decreased by $1.3 million, or 9.1%, to $12.8 million for the three months ended March 31, 2025, primarily due to lower sales and average assets under management[111] Cash Flow - Net cash used in operating activities improved by 89.0%, decreasing to $3.8 million for the three months ended March 31, 2025, from $34.5 million in the prior year[138] - Net cash used in investing activities increased by 21.3% to $3.0 million for the three months ended March 31, 2025, compared to $2.5 million in the same period of 2024[139] - Net cash used in financing activities surged by 210.7% to $174.5 million for the three months ended March 31, 2025, up from $56.1 million in the prior year, driven by increased payments on borrowings[140] Tax and Compliance - The estimated effective tax rate for the three months ended March 31, 2025, was 30.6%, up from 18.9% in the same period of 2024, primarily due to changes in valuation allowances related to investment losses[131] - The company remains compliant with all minimum net capital requirements as of March 31, 2025[136] Other Financial Metrics - Interest income increased by $2.6 million, or 28.8%, to $11.4 million for the three months ended March 31, 2025, compared to $8.9 million in the prior year[126] - Other income (expense), net decreased by $13.1 million, or 238.9%, to $(7.6) million for the three months ended March 31, 2025, compared to $5.5 million in the prior year[122] - The average fee earned for Open-End Funds decreased from 49.9 basis points in 2024 to 47.8 basis points in 2025[104] - Average fee rates earned on all products decreased slightly for the three months ended March 31, 2025, compared to the same period in the prior year[106] Equity and Investments - Total equity decreased slightly by 0.6% to $896.2 million as of March 31, 2025, from $901.6 million at December 31, 2024[132] - Investments increased marginally by 0.6% to $119.9 million as of March 31, 2025, from $119.2 million at December 31, 2024[132] - The company had $231.7 million outstanding under a term loan as of March 31, 2025, after repaying $0.7 million during the quarter[141] - The company paid $158.4 million in annual incentive compensation in the first quarter of 2025, compared to $146.1 million in the same period of 2024[134] Investment Strategy - The company operates a multi-manager, multi-style investment strategy, appealing to a diverse range of investors across various asset classes[91]

Assets Under Management (AUM) - AUM decreased to $1675 billion from $1750 billion due to negative market performance and net outflows[12,14] - Average AUM decreased by 5% to $1736 billion[12] - Market performance led to a decrease of $41 billion in AUM[17] - Net outflows contributed to a decrease of $30 billion in AUM[17] Sales and Net Flows - Sales amounted to $62 billion, compared to $64 billion in the prior period[12] - Net flows were ($30) billion, attributed to U S retail funds, institutional accounts, and retail separate accounts[12,19] - Institutional sales were $15 billion, compared to $16 billion in the prior period[21] - Institutional net flows were ($12) billion, compared to ($38) billion in the prior period[21] Financial Performance - Operating income, as adjusted, was $546 million, including $100 million of seasonal expenses[12] - Operating margin, as adjusted, was 276%, or 327% excluding seasonal expenses[12] - Earnings per diluted share, as adjusted, were $573, including seasonal expenses of $101 per share, and increased 6% over the prior-year period[12] - Investment management fees, as adjusted, decreased by 7% due to lower average AUM and lower performance fees[25] Capital Activities - The company repurchased 111200 shares for $200 million and net settled 35178 shares for $61 million[12] - Net debt was $1000 million, or 03x EBITDA[12]

Financial Data and Key Metrics Changes - Total assets under management (AUM) decreased to $167.5 billion as of March 31, primarily due to market performance and net outflows [9][16][20] - Earnings per share (EPS) as adjusted was $5.73, a decline from the previous quarter but an increase of 6% year-over-year [13][28] - Operating income as adjusted was $54.6 million, down from $74.5 million sequentially, largely due to seasonal employment expenses [26][27] Business Line Data and Key Metrics Changes - Institutional AUM accounted for 34% of total AUM, with net outflows of $1.2 billion primarily from large cap equity strategies [16][20] - Retail separate accounts experienced net outflows of $700 million, largely due to the soft closing of a specific equity model offering [10][21] - ETFs saw positive net flows of $300 million, with a year-over-year organic growth rate of 73% [12][20] Market Data and Key Metrics Changes - Total sales for the quarter were $6.2 billion, slightly down from $6.4 billion in the previous quarter, with stable sales across products despite market disruptions [9][19] - Institutional sales remained relatively unchanged at $1.5 billion, while retail separate account sales were also stable at $1.7 billion [19][20] - The average fee rate was 41.7 basis points, consistent with the previous quarter, reflecting a mix of asset classes [22] Company Strategy and Development Direction - The company is focused on expanding its offerings in ETFs, global funds, and retail separate accounts, with several strategies under development [8][9] - Management emphasized the importance of active management in volatile markets, with over 70% of equity strategies outperforming their benchmarks [7][8] - The company aims to maintain a balanced approach to capital management, investing in growth while returning capital to shareholders [14][15] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing market volatility and uncertainty, which they believe provides opportunities for active managers to demonstrate value [6][10] - The company remains cautious about investor behavior in light of market conditions, with trends in retail investments remaining consistent [12][20] - Management expressed confidence in their investment performance, with a strong track record recognized by industry rankings [8][18] Other Important Information - The company repurchased approximately 146,000 shares during the quarter, reducing shares outstanding by 3% on a net basis [14][29] - The first quarter typically represents the highest cash utilization due to annual incentives and revenue participation payments [29][30] - The net present value of the tax asset is approximately $112 million, providing a cash tax benefit not included in adjusted EPS [31] Q&A Session Summary Question: Fee rate outlook and changes - Management indicated that the fee rate will be influenced by market conditions and the mix of assets, with a target range of 41 to 42 basis points for modeling purposes [32][34] Question: Capital allocation and share repurchases - Management acknowledged an increase in share repurchases compared to previous quarters, emphasizing the importance of stock performance in capital allocation decisions [36][38] Question: SMAs and capacity constraints - Management confirmed that the soft closing of a successful SMA strategy was a response to market challenges, but they have other strategies available to investors [42][44] - There are no current capacity constraints in other areas of the retail channel, with expectations for growth in mid-cap strategies [45] Question: Monetizing deferred tax assets - Management clarified that they are achieving economic benefits from tax attributes and will continue to provide transparency regarding their value [46][47]

Company Performance - Virtus Investment Partners (VRTS) reported quarterly earnings of $5.73 per share, exceeding the Zacks Consensus Estimate of $5.33 per share, but down from $5.41 per share a year ago, representing an earnings surprise of 7.50% [1] - The company posted revenues of $197.61 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.41% and down from $200.24 million year-over-year [2] - Over the last four quarters, Virtus has surpassed consensus EPS estimates three times but has not beaten consensus revenue estimates [2] Stock Performance - Virtus shares have declined approximately 28.9% since the beginning of the year, compared to a decline of 6.8% for the S&P 500 [3] - The current Zacks Rank for Virtus is 4 (Sell), indicating expectations for the stock to underperform the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $6.16 on revenues of $190 million, and for the current fiscal year, it is $24.51 on revenues of $764.11 million [7] - The estimate revisions trend for Virtus is currently unfavorable, which may impact future stock performance [6] - The Financial - Investment Management industry, to which Virtus belongs, is ranked in the bottom 9% of over 250 Zacks industries, suggesting potential challenges ahead [8]

News Release Virtus Investment Partners Announces Financial Results for First Quarter 2025 Hartford, CT, April 25, 2025 - Virtus Investment Partners, Inc. (NYSE: VRTS) today reported financial results for the three months ended March 31, 2025. Financial Highlights (Unaudited) (in millions, except per share data or as noted) | | | | | | | | Three Months | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | Three Months Ended | | | | Ended | | | | | 3/31/2025 | | 3/31/2024 | Change | | 12/31/202 ...

Company Overview - Virtus Investment Partners (VRTS) is headquartered in Hartford and operates in the Finance sector, experiencing a price change of -31.55% since the beginning of the year [3] - The company currently pays a dividend of $2.25 per share, resulting in a dividend yield of 5.96%, which is significantly higher than the Financial - Investment Management industry's yield of 3.36% and the S&P 500's yield of 1.76% [3] Dividend Performance - The current annualized dividend of Virtus Investment Partners is $9, reflecting a 13.2% increase from the previous year [4] - Over the past five years, the company has increased its dividend five times on a year-over-year basis, achieving an average annual increase of 29.31% [4] - The current payout ratio is 34%, indicating that the company paid out 34% of its trailing 12-month earnings per share as dividends [4] Earnings Expectations - The Zacks Consensus Estimate for earnings in fiscal year 2025 is $27.87 per share, with an expected increase of 5.85% from the previous year [5] Investment Appeal - VRTS is considered an attractive dividend play and a compelling investment opportunity, currently holding a Zacks Rank of 2 (Buy) [7]

Core Viewpoint - Vertiqal Studios has reported a significant financial turnaround in 2024, achieving a 95% reduction in net loss, driven by strategic cost-cutting and operational efficiencies [1][2][6]. Financial Performance - The company reported stable revenues of $4.86 million for the year ended December 31, 2024, reflecting a 0.32% increase compared to $4.85 million in 2023 [4][8]. - Gross profit decreased slightly by 1% to $3.37 million from $3.44 million in the previous year [4]. - Total expenses were significantly reduced by 90%, amounting to $5.76 million compared to $56.69 million in 2023 [4]. - The net loss for 2024 was $2.37 million, a substantial decrease from $49.02 million in 2023, marking a 95% improvement [4][6]. - EBITDA loss improved by 47%, with a reported loss of $1.52 million compared to $2.92 million in 2023 [4][8]. Strategic Initiatives - The company has focused on strengthening its financial position through disciplined cost management and operational efficiencies, which are essential for sustainable growth and long-term value creation [6][8]. - Direct media revenue saw a remarkable increase of 48% year over year, indicating a successful shift in revenue strategy [8]. - The gross margin for 2024 was reported at 69%, showcasing operational efficiency and a favorable revenue mix [8]. Future Outlook - Vertiqal Studios anticipates continued growth in fiscal 2025, driven by the expansion of its direct media business and strategic partnerships with major brands [7][9]. - The company is exploring further acquisition opportunities to enhance service offerings and diversify income streams [9][10].

Assets Under Management - Total assets under management as of December 31, 2024, reached $175.0 billion, with open-end funds accounting for $56.1 billion and institutional accounts for $59.2 billion[31] - Retail separate accounts totaled $49.5 billion, while closed-end funds accounted for $10.2 billion as of December 31, 2024[31] - The company reported $2.3 billion in other fee-earning assets not included in total assets under management[40] Investment Management Fees - Investment management fees for 2024 totaled $773.8 million, reflecting an increase from $711.5 million in 2023[41] - The company derives substantially all of its revenues from investment management, distribution, service, administration, and shareholder service fees, which are based on the market value of assets under management[222] Investment Strategies - The company offers a diverse range of investment strategies across various asset classes, including equity, fixed income, and alternatives, managed by differentiated investment managers[22] - As of December 31, 2024, the largest investment manager, Kayne Anderson Rudnick Investment Management, managed $67.9 billion in assets, representing a significant portion of the total[24] - The company utilizes a multi-manager model, providing investment managers with distribution, business, and operational support[21] Financial Risks and Market Conditions - As of December 31, 2024, the fair value of investment securities is $83.771 million, and a 10% change in fair values would result in a corresponding $8.377 million change in pre-tax earnings[223] - The company's net interest in CIP is valued at $199.720 million, with a potential $19.972 million change in pre-tax earnings for a 10% change in fair values[223] - The total investments subject to market risk amount to $283.491 million, with a potential $28.349 million change in pre-tax earnings for a 10% change in fair values[223] - The company has approximately $180.1 million invested in fixed- and floating-rate income products, with a hypothetical 100 basis point change in interest rates potentially affecting fair value by an estimated $2.4 million[225] - As of December 31, 2024, the company has $236.1 million outstanding under its Term Loan, with a 100 basis point change in the base rate potentially altering annual interest expense by an estimated $2.4 million[226] Workforce and Talent Management - The company employs 805 individuals across its offices in the U.S., U.K., and Singapore, focusing on creating an environment of excellence and opportunity[63] - The company emphasizes competitive salaries and a comprehensive suite of benefits to attract and retain talented individuals[64] - The company is committed to maintaining a diverse and inclusive work environment, supporting workforce diversity and community engagement[65] Regulatory Compliance - The company is subject to extensive regulatory compliance requirements, which may increase operational costs and necessitate additional resources[62] Future Outlook - Future outlook includes addressing known risks such as competition and regulatory changes that could impact financial results and liquidity[18] - The company emphasizes the importance of attracting and retaining key personnel to maintain competitive advantage in the investment management industry[18]

Core Insights - Vertiqal Studios has launched Vertiqal Labs, a new creator network aimed at empowering digital talent and enhancing monetization opportunities for creators [1][5] - The initiative is designed to support creators in developing content and expanding their reach across major social media platforms, leveraging Vertiqal Studios' extensive audience [2][4] Group 1: Company Overview - Vertiqal Studios is North America's largest owner of gaming and lifestyle social media channels, specializing in viral video creation and distribution [6][7] - 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 [7] Group 2: Vertiqal Labs Features - Vertiqal Labs will provide creators with tools and resources to develop original content, allowing them to establish themselves as recognizable voices in digital entertainment [3] - The program aims to create a sustainable career model for creators by enabling them to produce content consistently, thus generating reliable revenue streams [3] Group 3: Advertising Opportunities - Vertiqal Labs will also benefit advertisers by offering access to both creator-generated content and high-production branded content from Vertiqal Studios' internal teams [4] - This dual approach allows brands to engage authentically with Gen Z and Millennial consumers, fostering meaningful connections [4]

Core Insights - Vertiqal Studios has engaged Quartermast Advisors as its buy-side M&A advisor to identify and execute strategic media acquisitions aimed at accelerating growth and expanding market presence [1][2][5] - The company aims to leverage acquisitions to enhance content capabilities, expand audience reach, and strengthen its data-driven monetization model [2][4] - Recent acquisitions include Offbeat Studios in December 2023 and four high-performing social channels from Viral Nation in December 2024, indicating a commitment to growth through targeted acquisitions [3][5] Company Overview - Vertiqal Studios is one of North America's largest owners of gaming and lifestyle social media channels, specializing in the creation and distribution of viral videos for brands [7][8] - The company manages over 130 channels across platforms like TikTok, Instagram, and Snapchat, producing over 100 pieces of content daily for an audience exceeding 52 million followers [8] - Vertiqal Studios partners with major brands such as RBC, Samsung, and Coca-Cola to develop strategic solutions and innovative advertising [8] Advisory Firm Overview - Quartermast Advisors is a boutique M&A advisory firm specializing in media, technology, and the creator economy, providing strategic guidance for executing transactions [9] - The firm brings extensive experience in mergers and acquisitions, which will assist Vertiqal Studios in navigating the dynamic media industry [4][5]