Virtus Investment Partners(US:VRTS)2025-05-09 21:10Financial 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]