Victory Capital(VCTR) - 2025 Q1 - Quarterly Results

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]