分组1 - Virtus Investment Partners reported quarterly earnings of $7.50 per share, exceeding the Zacks Consensus Estimate of $7.48 per share, and up from $6.11 per share a year ago, representing an earnings surprise of 0.27% [1] - The company posted revenues of $212.01 million for the quarter ended December 2024, which missed the Zacks Consensus Estimate by 0.29%, compared to year-ago revenues of $193.38 million [2] - Over the last four quarters, Virtus has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [2] 分组2 - The stock has underperformed the market, losing about 4.3% since the beginning of the year, while the S&P 500 gained 3.2% [3] - The current consensus EPS estimate for the coming quarter is $5.85 on revenues of $201.74 million, and for the current fiscal year, it is $28.27 on revenues of $827.14 million [7] - The Zacks Industry Rank for Financial - Investment Management is currently in the bottom 18% of over 250 Zacks industries, indicating potential challenges for the sector [8]

FOURTH QUARTER EARNINGS PRESENTATION January 31, 2025 George R. Aylward President and Chief Executive Officer Michael A. Angerthal Executive Vice President and Chief Financial Officer IMPORTANT DISCLOSURES AGENDA 3 ■ Overview of Quarter ■ Results ■ Q & A Session OVERVIEW OF QUARTER 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 st ...

Financial Performance - Revenues for Q4 2024 were $233.5 million, a 9% increase from $214.6 million in Q4 2023[2] - Operating income increased by 30% to $50.7 million compared to $39.0 million in the same quarter last year[2] - Net income attributable to Virtus Investment Partners was $33.3 million, up 8% from $30.8 million in Q4 2023[2] - Earnings per share (diluted) were $4.66, an 11% increase from $4.21 in Q4 2023[2] - Total revenues rose by 9% year-over-year to $233,494,000 for the three months ended December 31, 2024[22] - Operating income increased by 30% year-over-year to $50,721,000 for the three months ended December 31, 2024[22] - Net income attributable to Virtus Investment Partners, Inc. was $33,294,000, an 8% increase compared to the same period last year[22] - Cash dividends declared per common share increased by 18% to $2.25 for the three months ended December 31, 2024[22] - Total operating expenses (as adjusted) for the three months ended December 31, 2024, were $137.560 million, an increase from $129.524 million in the same period of 2023, reflecting a 6.3% rise[28] - Income tax expense (as adjusted) for the three months ended December 31, 2024, was $19.972 million, compared to $17.337 million in the same period of 2023, representing a 9.5% increase[29] Assets Under Management (AUM) - Total assets under management (AUM) were $175.0 billion, a 2% increase from $172.3 billion year-over-year[4] - Average total assets under management increased by 12% to $182.1 billion from $162.7 billion in the prior year[4] - Assets under management totaled $175,001,000,000 as of December 31, 2024, reflecting a decrease from the previous quarter[23] - Open-End Funds reported $56,073,000,000 in assets under management as of December 31, 2024, a slight decrease from the previous quarter[23] - Institutional accounts saw a decrease in assets under management to $59,167,000,000 as of December 31, 2024[23] - The average assets under management for total products increased to $182,088,000,000 for the three months ended December 31, 2024[23] - Total assets under management (AUM) increased from $162,539 million on 12/31/2023 to $172,259 million on 12/31/2024, reflecting a growth of approximately 5.3%[26] Net Flows - Net flows for the quarter were negative at ($4.8) billion, compared to ($3.8) billion in Q4 2023, primarily due to a $3.3 billion lower-fee partial redemption[6] - Net flows for Open-End Funds showed a decline of $1,116 million for the three months ended 12/31/2024, compared to a decline of $1,965 million for the same period in 2023[26] - Institutional Accounts experienced net outflows of $3,802 million for the three months ended 12/31/2024, compared to net outflows of $2,227 million for the same period in 2023[26] - The company reported total inflows of $25,857 million for the twelve months ended 12/31/2024, compared to $26,757 million for the previous year[26] Operating Metrics - Operating margin improved to 21.7%, up from 18.2% in the same quarter last year[2] - Operating margin (as adjusted) for the three months ended December 31, 2024, was 35.1%, compared to 33.0% in the same period of 2023, showing an improvement of 2.1 percentage points[28] - The effective tax rate (as adjusted) for the three months ended December 31, 2024, was 26.6%, compared to 27.2% in the same period of 2023, showing a slight improvement[29] Expenses - The company reported a 43% increase in income tax expense to $19,047,000 for the three months ended December 31, 2024[22] - Total other operating expenses amounted to $7,330 million for the three months ended December 31, 2024, up from $5,689 million in the same period of 2023, representing an increase of 28.8%[38] - Employment expense fair value adjustments increased to $1,141 million for the three months ended December 31, 2024, compared to $472 million for the same period in 2023, reflecting a significant rise of 141%[38] - Acquisition and integration expenses for the three months ended December 31, 2024, totaled $2.553 million, down from $3.050 million in the same period of 2023, reflecting a decrease of 16.3%[36] Forward-Looking Statements and Risks - Forward-looking statements indicate expectations regarding assets under management and net asset inflows, but actual results may differ materially due to various risks and uncertainties[44] - The company faces risks including potential reductions in assets under management and challenges in attracting and retaining key personnel, which could adversely affect financial results[45] - The company does not plan to update or revise forward-looking statements based on actual results or changes in circumstances after the date of the release[47] - Investors are encouraged to consider all factors that may impact the company's operations and financial results, as discussed in periodic reports filed with the SEC[46] Non-GAAP Measures - Non-GAAP financial measures are utilized by management to provide additional insight into the company's financial performance, although they have limitations and should not be viewed in isolation[27] - The adjusted revenues exclude the impact of operating activities of consolidated investment products, focusing on fee revenues from investment management and related services[40] - Adjusted operating expenses exclude amortization or impairment of intangible assets and certain other expenses not reflective of ongoing earnings generation[41] - The adjusted operating margin is calculated as adjusted operating income divided by adjusted revenues, providing a measure of efficiency[42]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Virtus Investment Partners (VRTS) due to higher revenues, with a focus on how actual results will compare to estimates [1][2] Earnings Expectations - The upcoming earnings report is expected to show earnings of $7.59 per share, reflecting a +24.2% change year-over-year, and revenues of $213.63 million, which is a 10.5% increase from the previous year [3] Estimate Revisions - The consensus EPS estimate has been revised down by 3.25% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates a negative Earnings ESP of -3.19%, suggesting that analysts have lowered their expectations for the company's earnings [10][11] Historical Performance - In the last reported quarter, Virtus exceeded the expected earnings of $6.81 per share by delivering $6.92, resulting in a surprise of +1.62%. Over the last four quarters, the company has beaten consensus EPS estimates twice [12][13] Investment Considerations - Despite the potential for an earnings beat, the combination of a negative Earnings ESP and a Zacks Rank of 3 makes it challenging to predict a positive outcome for the upcoming earnings report [11][16]

Core Viewpoint - Virtus Investment Partners (VRTS) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks Consensus Estimate for Virtus is projected at $26.49 per share for the fiscal year ending December 2024, reflecting a year-over-year increase of 20.7% [9]. - Over the past three months, the Zacks Consensus Estimate for Virtus has risen by 6.3%, indicating a positive shift in analysts' expectations [9]. Zacks Rating System - The Zacks rating system is based solely on a company's earnings picture, tracking changes in earnings estimates from sell-side analysts [2][3]. - The system classifies stocks into five groups, with Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell), and has shown a strong track record, with Zacks Rank 1 stocks averaging an annual return of +25% since 1988 [8]. Market Implications - The upgrade to Zacks Rank 2 places Virtus in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term due to favorable earnings estimate revisions [11]. - Rising earnings estimates and the corresponding rating upgrade indicate an improvement in Virtus's underlying business, which is expected to positively influence its stock price [6].

Core Insights - Vertiqal Studios has announced a collaboration with Viral Nation to enhance social media and content creation strategies in 2025, focusing on growth through acquisitions and co-production initiatives [1][10]. Group 1: Acquisition Details - Vertiqal Studios has acquired four high-performing Instagram channels from Viral Nation, adding 1,773,000 followers to its existing audience of 52 million, with 73% of followers based in the United States [2]. - The acquisition was completed under an asset purchase agreement (APA) for a total consideration of US$150,000, which includes US$50,000 in cash and US$100,000 through the issuance of 5,737,200 common shares at a deemed price of $0.025 per share [3]. Group 2: Revenue-Sharing Model - The APA establishes a revenue-sharing model where Vertiqal Studios will retain 70% of the revenue generated from media driven by Viral Nation through its channel network, while Viral Nation will receive 30% [6]. Group 3: Technology and Content Production - Viral Nation will provide Vertiqal Studios with access to its technology solutions, enhancing media sales strategies and analytics capabilities [7]. - The two companies will co-produce original content aimed at engaging Gen Z and Millennial audiences, leveraging their combined creative expertise and networks [9]. Group 4: Strategic Importance - This collaboration marks a significant milestone for Vertiqal Studios, reinforcing its position as a leading entity in the digital media landscape and emphasizing its commitment to growth and innovation [10][11].

Company Overview - Virtus Investment Partners, Inc. (VRTS) experienced a 1% decline in shares following a report of a decrease in assets under management (AUM) for October 2024, with a month-end AUM of $179.41 billion, down 2.4% from September 30, 2024, attributed to unfavorable market performance [1] - The company manages an additional $2.3 billion in other fee-earning assets, which is not included in the AUM figure [1] Performance Breakdown - In October, the open-end fund balance decreased by 2.6% to $56.6 billion, while the closed-end fund balance fell by 1.3% to $10.3 billion [2] - Institutional accounts saw a 3% decline to $62.7 billion, and retail separate accounts decreased by 1.6% to $49.8 billion [2] Market Position - The integrated multi-boutique business model of Virtus Investment is expected to support its performance in a rapidly growing industry, although elevated operating expenses may negatively impact the bottom line in the near term [3] - Over the past six months, shares of Virtus Investment have increased by 4.1%, which is significantly lower than the industry growth of 30.1% [3] Competitive Landscape - Franklin Resources, Inc. (BEN) reported a preliminary month-end AUM of $1.63 trillion as of October 31, 2024, reflecting a 2.9% decrease from the prior month due to unfavorable market returns and long-term net outflows of $18.5 billion [5] - Invesco (IVZ) announced a month-end AUM of $1.77 trillion for October 2024, representing a 1.3% decline from the previous month, with net long-term inflows of $2 billion [6][7]

Financial Data and Key Metrics Changes - The company reported a total assets under management (AUM) increase of 6% to $183.7 billion, driven by market performance and positive net flows [6][12] - The operating margin improved to 34.4%, up from 32.5% in the previous quarter, marking the highest level in two years [10][19] - Adjusted earnings per share increased by 6% to $6.92, the highest since Q1 2022 [10][20] Business Line Data and Key Metrics Changes - Retail separate accounts generated positive net flows of $0.4 billion, with a 5% organic growth rate over the past year [8][16] - Global funds AUM increased by 29% year-over-year, with 7% organic growth [13] - ETF AUM grew by 88% year-over-year, with 65% organic growth [13] Market Data and Key Metrics Changes - Institutional net outflows improved to $1.1 billion from $1.7 billion sequentially, primarily driven by redemptions of lower fee mandates [7][16] - Open-end fund net outflows improved to $1 billion from $1.3 billion in the previous quarter, mainly due to positive flows in fixed income strategies [8][16] Company Strategy and Development Direction - The company continues to focus on organic growth opportunities in retail separate accounts, ETFs, and global funds, while also exploring M&A opportunities to add capabilities [27][28] - New product introductions include actively managed ETFs and private credit CLO ETFs, reflecting a strategy to meet growing demand in these areas [5][29] Management Comments on Operating Environment and Future Outlook - Management noted that the fourth quarter could experience volatility due to tax considerations and the election cycle, making it difficult to predict flows [23] - Positive trends in retail separate accounts, global funds, and ETFs are expected to continue, with a strong pipeline for institutional flows despite current known redemptions exceeding known wins [9][23] Other Important Information - The company has maintained a disciplined approach to capital management, increasing share buybacks and dividends while investing in business growth [11][22] - The average fee rate remained stable at 41.9 basis points, reflecting solid investment performance and differentiated product offerings [17] Q&A Session Summary Question: Insights on fourth quarter flows - Management indicated that October trends are positive, but volatility is expected in November and December due to various factors [23] Question: Adjusted operating expenses outlook - Management confirmed that the current level of operating expenses is appropriate for modeling, with ongoing efforts to streamline costs [24] Question: Inorganic growth and M&A conversations - Management emphasized that while organic growth is prioritized, they are exploring M&A opportunities to enhance capabilities, particularly in private markets [27] Question: Capital allocation and new product opportunities - Management expressed confidence in the ongoing development of new products, particularly in ETFs and global funds, to meet market demand [29] Question: Affiliate ownership increase impact - Management explained that ownership in an affiliate increased to approximately 80%, which will impact non-controlling interests moving forward [33] Question: Institutional pipeline and flow outlook - Management noted that outflows are primarily due to reallocations rather than terminations, and they remain optimistic about the institutional pipeline [37]

Company Performance - Virtus Investment Partners reported quarterly earnings of $6.92 per share, exceeding the Zacks Consensus Estimate of $6.81 per share, and up from $6.21 per share a year ago, representing an earnings surprise of 1.62% [1] - The company posted revenues of $205.13 million for the quarter ended September 2024, which missed the Zacks Consensus Estimate by 1.25%, compared to $197.45 million in the same quarter last year [1] - Over the last four quarters, Virtus has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [1] Stock Outlook - The immediate price movement of Virtus shares will largely depend on management's commentary during the earnings call, as the stock has lost about 11.9% since the beginning of the year, while the S&P 500 has gained 21.8% [2] - The current consensus EPS estimate for the upcoming quarter is $7.64 on revenues of $216.33 million, and for the current fiscal year, it is $26.21 on revenues of $827.31 million [4] Industry Context - The Financial - Investment Management industry, to which Virtus belongs, is currently ranked in the top 9% of over 250 Zacks industries, indicating a favorable outlook for stocks in this sector [5] - Another company in the same industry, Victory Capital Holdings, is expected to report quarterly earnings of $1.34 per share, reflecting a year-over-year increase of 13.6%, with revenues projected at $223.18 million, up 6.4% from the previous year [5]

Financial Performance - Diluted earnings per share (EPS) for Q3 2024 was $5.71, an increase of 36% from $4.19 in Q3 2023[2] - Total revenues for the three months ended September 30, 2024, increased by 4% to $227,029,000 compared to $219,271,000 for the same period in 2023[15] - Net income for the three months ended September 30, 2024, increased by 29% to $49,104,000 compared to $38,154,000 for the same period in 2023[15] - Earnings per share (EPS) - basic for the three months ended September 30, 2024, was $5.80, a 36% increase from $4.26 in the same period last year[15] - Total revenues for the quarter ended September 30, 2024, were $227,029 million, an increase of 3.5% compared to $219,271 million for the same period in 2023[22] - Operating income for the quarter was $55,258 million, up 23.0% from $44,903 million in the same quarter last year[22] - Adjusted operating income increased to $70,468 million, reflecting a 5.5% rise from $66,980 million in the prior year[22] - Net income attributable to Virtus Investment Partners, Inc. was $40,980 million, compared to $30,906 million in the same quarter of 2023, marking a 32.5% increase[24] - Earnings per share (diluted) under GAAP was $5.71, up from $4.19 in the same quarter last year, representing a 36.2% increase[24] - The adjusted earnings per share (diluted) was $6.92, compared to $6.21 in the same quarter of 2023, indicating an increase of 11.4%[24] Sales and Revenue Growth - Total sales reached $6.6 billion, up 14% year-over-year, with institutional sales of $1.2 billion increasing 3% and retail separate account sales of $2.3 billion increasing 4%[4][5] - Investment management fees increased by 5% to $193,843,000 for the three months ended September 30, 2024, compared to $184,869,000 for the same period in 2023[15] - Total operating expenses decreased by 1% to $171,771,000 for the three months ended September 30, 2024, compared to $174,368,000 for the same period in 2023[15] - Cash dividends declared per common share increased by 18% to $2.25 for the three months ended September 30, 2024, compared to $1.90 for the same period in 2023[15] Assets Under Management (AUM) - Assets under management (AUM) increased to $183.7 billion, a 13% increase from $162.5 billion year-over-year[4] - Total assets under management (AUM) as of September 30, 2024, reached $183,742,000, an increase from $162,539,000 as of September 30, 2023[18] - Open-End Funds assets under management decreased from $51.1 billion on 9/30/2023 to $49.7 billion on 12/31/2023, with a projected increase to $50.9 billion by 6/30/2024[19] - Closed-End Funds assets under management remained stable, with a slight increase from $58.2 billion on 9/30/2023 to $58.4 billion on 12/31/2023, and projected to reach $58.6 billion by 6/30/2024[19] - Retail Separate Accounts assets under management remained constant at $43.3 billion for both 9/30/2023 and 12/31/2023, with a slight increase projected to $43.9 billion by 3/31/2024[19] - Institutional Accounts assets under management increased from $30.3 billion on 9/30/2023 to $33.2 billion on 12/31/2023, with a projected decrease to $30.7 billion by 6/30/2024[19] Expenses and Financial Adjustments - Operating income rose to $55.3 million, a 25% increase from $44.2 million in the prior quarter, driven by a 5% decrease in operating expenses[7] - Total operating expenses decreased to $171,771 million from $174,368 million year-over-year, a reduction of 0.3%[22] - Employment expenses increased to $105,555 million, up from $101,587 million in the same period last year, reflecting a 4% rise[25] - Interest and dividend income, as adjusted, decreased to $4,736 million from $5,848 million year-over-year, representing a decline of 19%[25] Market Performance and Flows - Net flows were negative at ($1.7) billion, an improvement from ($2.6) billion in the previous quarter, with positive flows in retail separate accounts and ETFs[6] - Total inflows for the quarter were $5.810 billion, while outflows amounted to $(7.309) billion, resulting in net flows of $(1.499) billion[20] - Market performance for the total assets showed a decline of $(3.624) billion for the quarter, with a recovery of $14.322 billion projected for the next quarter[20] Strategic Initiatives and Future Outlook - The company is actively exploring market expansion opportunities and new product developments to enhance its service offerings[19] - Future outlook includes a focus on enhancing investment management services and expanding market presence through strategic initiatives[20] - The company anticipates continued growth in assets under management and net asset inflows, although specific projections were not provided[35] - Forward-looking statements indicate potential risks and uncertainties regarding future performance and market conditions[34] Risks and Uncertainties - The company faces substantial known and unknown risks and uncertainties that could materially affect operations and financial results[36] - Key risks include reduction in assets under management and inability to achieve expected benefits from strategic transactions[36] - Other significant risks involve withdrawal or termination of investment management agreements and challenges from competition[36]