Victory Capital(VCTR)2025-02-28 18:30Assets Under Management (AUM) - Total client assets increased to $176.1 billion as of December 31, 2024, up from $17.9 billion in August 2013 following the management-led buyout[318]. - Assets under management (AUM) rose by $10.6 billion, or approximately 6.6%, to $171.9 billion from $161.3 billion at December 31, 2023, primarily driven by positive market action of $18.1 billion[325]. - Total Assets Under Management (AUM) as of December 31, 2024, reached $171.93 billion, an increase from $161.32 billion in 2023, representing a growth of approximately 6.5%[338]. - Long-term AUM increased to $168.59 billion in 2024 from $158.05 billion in 2023, reflecting a year-over-year growth of about 6.5%[338]. - Fixed Income AUM slightly increased to $24.40 billion in 2024 from $24.36 billion in 2023, while U.S. Large Cap Equity AUM rose to $14.15 billion from $12.64 billion, indicating a growth of approximately 11.9%[338]. - Solutions AUM saw a significant increase to $62.59 billion in 2024, up from $54.30 billion in 2023, marking a growth of around 15.3%[338]. - The average AUM for 2024 was $169.7 billion, compared to $153.5 billion in 2023[328]. - Long-term gross inflows were $25.3 billion for the year ended December 31, 2024, compared to $22.7 billion in 2023[325]. - Total AUM increased by $10.6 billion, or 6.6%, to $171.9 billion at December 31, 2024, from $161.3 billion at December 31, 2023, driven by positive market movement of $18.1 billion, partially offset by net outflows of $7.4 billion[343]. Financial Performance - Total revenue for the year ended December 31, 2024, was $893.5 million, compared to $821.0 million for the year ended December 31, 2023[326]. - Net income increased to $288.9 million for the year ended December 31, 2024, up from $213.2 million in 2023[326]. - Adjusted EBITDA for the year ended December 31, 2024, was $475.6 million, with an adjusted EBITDA margin of 53.2%, compared to $418.0 million and 50.9% in 2023[327]. - Net income for 2024 was $288.9 million, an increase of $75.7 million, or 35.5%, compared to $213.2 million in 2023[375]. - Earnings per share (diluted) increased to $4.38 in 2024, up from $3.12 in 2023, reflecting a growth of 40.5%[375]. - Adjusted Net Income for 2024 was $312.9 million, representing a 16.0% increase from $269.7 million in 2023[409]. Cash Flows and Expenses - The Company recorded net cash provided by operating activities of $339.979 million in 2024, an increase of $9.688 million from $330.291 million in 2023[440]. - Cash used in investing activities decreased to $3.979 million in 2024 from $7.841 million in 2023, primarily due to a decrease in purchases of property and equipment[443]. - Cash used in financing activities increased by $95.6 million to $332.763 million in 2024 from $237.132 million in 2023, mainly due to payment of consideration for acquisition and repayment of long-term senior debt[444]. - Personnel compensation and benefits represent the most significant category of expense, including salaries, incentive compensation, and acquisition-related compensation[359]. - Total operating expenses decreased by $26.6 million, or 5.4%, to $466.0 million in 2024 from $492.6 million in 2023[375]. Market and Client Flows - Net client cash flows for 2024 were negative at $(1.63) billion, compared to $(0.59) billion in 2023, indicating a decline in client inflows[333]. - Market appreciation contributed $504 million to AUM in 2024, down from $690 million in 2023, reflecting a decrease of approximately 27%[333]. - The company experienced a net client cash flow decline of $(7,377) million in 2024, indicating challenges in client retention[340]. - Net outflows were primarily driven by $3.2 billion in U.S. mid cap equity strategies, $2.2 billion in U.S. small cap equity strategies, and $1.3 billion in U.S. large cap equity strategies[344]. Acquisitions and Strategic Initiatives - The company completed the acquisition of WestEnd Advisors on December 31, 2021, enhancing its ETF strategy offerings[319]. - The company also acquired New Energy Capital on November 1, 2021, focusing on clean energy infrastructure investments[320]. - The company aims to maintain a diversified client base across various asset classes and distribution channels to enhance AUM stability[334]. - The company has adjusted its asset class categorization starting January 2022, impacting the reported figures for prior periods[339]. Interest and Financing - Interest expense and other financing costs increased by $2.6 million to $63.8 million in 2024, attributed to a higher average interest rate[400]. - The company incurred $1.0 million in upfront fees and other costs related to the Fifth Amendment to the 2019 Credit Agreement, which extended the maturity date of the $100.0 million revolving facility[429]. - The Company executed a Swap to fix the interest rate at 3.215% on $450 million of its outstanding Term Loan, which was later adjusted to 3.149% after the Swap Amendment[432].