Part I. FINANCIAL INFORMATION This section provides the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the recent reporting period Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Virtus Investment Partners, Inc. as of June 30, 2025, and for the three and six-month periods then ended. It includes the Balance Sheets, Statements of Operations, Comprehensive Income, Cash Flows, and Changes in Stockholders' Equity, along with accompanying notes Condensed Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and equity as of specific dates Balance Sheet Highlights (in thousands) | Balance Sheet Highlights (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $172,204 | $265,888 | | Total assets | $3,696,219 | $3,994,494 | | Debt | $231,279 | $232,130 | | Total liabilities | $2,674,793 | $2,985,576 | | Total equity | $898,329 | $901,636 | - Total assets decreased from $4.0 billion at year-end 2024 to $3.7 billion as of June 30, 2025, primarily driven by a decrease in cash and cash equivalents and assets of consolidated investment products (CIP)8 Condensed Consolidated Statements of Operations This section outlines the company's revenues, expenses, and net income for the specified reporting periods Statements of Operations (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $210,525 | $224,384 | $428,457 | $446,426 | | Operating Income | $45,210 | $44,205 | $81,805 | $76,511 | | Net Income Attributable to Virtus | $42,373 | $17,614 | $71,020 | $47,472 | | Earnings per Share—Diluted | $6.12 | $2.43 | $10.15 | $6.54 | - For the three months ended June 30, 2025, net income attributable to Virtus increased significantly to $42.4 million ($6.12 per diluted share) from $17.6 million ($2.43 per diluted share) in the prior-year period. For the six-month period, net income increased to $71.0 million from $47.5 million year-over-year10 Condensed Consolidated Statements of Cash Flows This section details the company's cash inflows and outflows from operating, investing, and financing activities Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $71,970 | $35,427 | | Net cash used in investing activities | ($4,012) | ($3,800) | | Net cash used in financing activities | ($226,525) | ($21,844) | - Net cash used in financing activities increased substantially to $226.5 million for the six months ended June 30, 2025, from $21.8 million in the prior year period, largely due to lower net borrowings by CIP and increased common stock repurchases15 Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements - The company provides investment management services to institutions and individuals through various products, including open-end funds, closed-end funds, retail separate accounts, and institutional accounts23 - On May 14, 2025, the company declared a quarterly cash dividend of $2.25 per common share44 - During the six months ended June 30, 2025, the company repurchased 287,072 common shares for a total cost of $50.0 million45 - The company consolidates various investment products (CIP), including collateralized loan obligations (CLOs), where it is deemed the primary beneficiary. The company's risk is limited to its beneficial interests in these products68 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance for the second quarter and first half of 2025. Key topics include a decrease in total revenues and assets under management (AUM) compared to the prior year, driven by net outflows, although operating income increased due to lower expenses. The analysis covers AUM trends, asset flows, results of operations by segment, and the company's liquidity and capital resources Financial Highlights This section summarizes key financial and operational metrics, including assets under management, net flows, revenues, operating income, and diluted earnings per share - Total assets under management (AUM) were $170.7 billion at June 30, 2025, a decrease of 1.7% from June 30, 2024, and 2.5% from December 31, 2024. The year-over-year decrease was driven by $13.5 billion in net outflows, partially offset by $13.3 billion in positive market performance98 Assets Under Management by Product (in millions) | Assets Under Management by Product (in millions) | As of June 30, 2025 | As of June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Open-End Funds | $55,653 | $55,852 | (0.4)% | | Closed-End Funds | $10,481 | $9,915 | 5.7% | | Retail Separate Accounts | $47,445 | $45,672 | 3.9% | | Institutional Accounts | $57,131 | $62,146 | (8.1)% | | Total | $170,710 | $173,585 | (1.7)% | - Total net flows were an outflow of $(3.9) billion in Q2 2025, compared to an outflow of $(2.6) billion in Q2 2024. For the first six months of 2025, net outflows were $(6.9) billion97102 - For Q2 2025, total revenues decreased 6.2% YoY to $210.5 million, while operating income increased 2.3% to $45.2 million. Diluted EPS grew 151.9% to $6.12, compared to $2.43 in Q2 2024100 Results of Operations This section provides a detailed analysis of the company's revenues and operating expenses for the reported periods Financial Summary (in thousands) | Financial Summary (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total revenues | $210,525 | $224,384 | (6.2)% | | Total operating expenses | $165,315 | $180,179 | (8.2)% | | Operating income | $45,210 | $44,205 | 2.3% | | Net Income Attributable to Virtus | $42,373 | $17,614 | 140.6% | - The 6.4% decrease in total investment management fees for Q2 2025 was primarily due to decreased average assets under management115 - Employment expenses, the largest operating expense, decreased by 7.2% in Q2 2025 compared to the prior-year quarter, mainly due to lower profit- and sales-based compensation120 - Amortization expense decreased by 14.8% in Q2 2025, primarily due to certain intangible assets becoming fully amortized128 Liquidity and Capital Resources This section discusses the company's cash position, cash flow activities, and debt obligations, highlighting changes in liquidity and capital management - As of June 30, 2025, the company held $172.2 million in cash and cash equivalents, a decrease from $265.9 million at December 31, 2024141 Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $71,970 | $35,427 | | Net cash used in investing activities | ($4,012) | ($3,800) | | Net cash used in financing activities | ($226,525) | ($21,844) | - Net cash from operating activities increased to $72.0 million in the first half of 2025, up from $35.4 million in the prior year, mainly due to higher net sales of investments by consolidated investment products (CIP)147 - The company had $234.7 million outstanding under its Term Loan as of June 30, 2025150 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company states that its primary market risk exposures relate to unfavorable movements in interest rates and securities prices. There were no material changes to the market risk disclosures from the company's 2024 Annual Report on Form 10-K - The company's primary market risks are associated with interest rates and securities prices, with no material changes reported during the quarter153 Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of June 30, 2025. No material changes to internal control over financial reporting were identified during the quarter - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective156 - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls157 Part II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other relevant disclosures not included in the financial statements Item 1. Legal Proceedings The company incorporates by reference the information on legal proceedings from Note 14, "Commitments and Contingencies," in the financial statements section of this report. The company believes that the outcomes of its legal and regulatory proceedings are not likely to have a material adverse effect - Information regarding legal proceedings is detailed in Note 14 of the financial statements158 - The company does not expect legal proceedings to have a material adverse effect on its financial condition, based on currently available information61 Item 1A. Risk Factors The company reports that there have been no material changes to its risk factors from those previously disclosed in its 2024 Annual Report on Form 10-K - No material changes to the company's risk factors were reported since the 2024 Annual Report on Form 10-K159 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's common stock repurchase activity during the second quarter of 2025. The Board of Directors authorized an additional 750,000 shares for repurchase on May 15, 2025. As of June 30, 2025, 866,240 shares remained available for repurchase under the program Common Stock Repurchase Activity | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1-30, 2025 | 5,433 | $153.32 | | May 1-31, 2025 | 102,438 | $169.37 | | June 1-30, 2025 | 68,001 | $173.70 | | Total Q2 2025 | 175,872 | N/A | - On May 15, 2025, the Board authorized an additional 750,000 shares for the repurchase program, leaving 866,240 shares available for repurchase as of June 30, 2025160 Item 5. Other Information The company reports that none of its directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 - No directors or officers adopted, terminated, or modified a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q2 2025163 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002 and Inline XBRL data files - Filed exhibits include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL data files164
Virtus Investment Partners(VRTS) - 2025 Q2 - Quarterly Report