Victory Capital(US:VCTR)2025-11-07 14:11Client Assets and AUM Growth - Total client assets reached $313.4 billion, with assets under management (AUM) at $310.6 billion as of September 30, 2025, reflecting significant growth from $176.1 billion in 2024[175][188] - AUM increased by $12.1 billion, or 4.1%, from $298.6 billion at June 30, 2025, driven by $14.5 billion in market appreciation, partially offset by $0.3 billion in net outflows[188] - As of September 30, 2025, total Assets Under Management (AUM) reached $310,644 million, up from $176,113 million in 2024, reflecting a significant increase of 76.3% year-over-year[200] - Total Assets Under Management (AUM) as of September 30, 2025, reached $310.64 billion, an increase from $176.11 billion in 2024, representing a growth of 76%[208] - The total long-term assets under management as of September 30, 2025, were $306,985 million, compared to $172,720 million in 2024, reflecting an increase of 77.8%[200] - The company has grown total client assets from $17.9 billion in August 2013 to $313.4 billion as of September 30, 2025, attributed to successful acquisitions and strong investment returns[185] Revenue and Income - Total revenue for the three months ended September 30, 2025, was $361.2 million, up from $225.6 million in the same period in 2024, while total revenue for the nine months was $932.0 million compared to $661.1 million[191] - Net income for the three months ended September 30, 2025, was $96.5 million, compared to $82.0 million in 2024, with net income for the nine months at $217.3 million versus $211.9 million[191] - Adjusted EBITDA for the three months ended September 30, 2025, was $190.5 million, representing 52.7% of revenue, compared to $121.3 million, or 53.7% of revenue, in 2024[191] - Net income attributable to common shareholders for the nine months ended September 30, 2025, was $181.97 million, compared to $211.93 million for the same period in 2024[219] - Earnings per share (EPS) for the three months ended September 30, 2025, were $1.12, compared to $1.26 for the same period in 2024[219] Cash Flows and Financial Activities - The Company recorded a net cash provided by operating activities of $240.4 million for the nine months ended September 30, 2025, a decrease of 3.1% compared to $248.2 million for the same period in 2024[284] - Cash provided by investing activities was $77.7 million for the nine months ended September 30, 2025, primarily from cash acquired through acquisitions of $53.6 million[286] - Cash used in financing activities totaled $329.5 million for the nine months ended September 30, 2025, which included $63.7 million for acquisition consideration and $115.7 million for dividend payments[288] Market Performance and Client Flows - The company generated $17.3 billion in gross flows for the three months ended September 30, 2025, compared to $6.1 billion in 2024, with net outflows of $0.3 billion[188] - Gross client cash inflows for the three months ended September 30, 2025, were $17,296 million, compared to $6,120 million in the same period of 2024, indicating an increase of 182.5%[196] - Net client cash flows for the three months ended September 30, 2025, were negative at $(292) million, an improvement from $(2,636) million in the same period of 2024[196] - The company experienced net outflows of $2.3 billion for the nine months ended September 30, 2025, with significant outflows from U.S. equity strategies[217] Expenses and Costs - Personnel compensation and benefits for the three months ended September 30, 2025, increased by 124.3%, or $53.7 million, to $97.0 million, primarily due to higher salaries and acquisition-related compensation[225] - For the three months ended September 30, 2025, distribution and other asset-based expenses increased by $29.3 million, or 79.6%, to $66.2 million compared to $36.8 million for the same period in 2024, primarily due to higher broker-dealer and platform distribution fees[229] - General and administrative expenses for the three months ended September 30, 2025 increased by $9.4 million, or 67.3%, to $23.5 million compared to $14.0 million for the same period in 2024[231] - Depreciation and amortization for the three months ended September 30, 2025 increased by $14.5 million, or 193.4%, to $22.0 million from $7.5 million for the same period in 2024, due to the amortization of intangible assets from the Amundi US acquisition[233] Acquisitions and Strategic Developments - The acquisition of Amundi U.S. was completed on April 1, 2025, enhancing the company's scale and diversifying its investment capabilities[180][182] - Victory Capital's Solutions Platform manages approximately $52 billion in AUM for non-U.S. investors, supported by a global distribution agreement with Amundi[184] - The company experienced a divestment of approximately $1 billion in assets due to the closure of three Investment Franchises during the third quarter of 2025[202] - Acquisition-related costs for the nine months ended September 30, 2025 were $34.9 million, significantly higher than $9.2 million for the same period in 2024, related to the Amundi US acquisition[238] - Restructuring and integration costs for the nine months ended September 30, 2025 were $25.4 million, compared to $0.8 million for the same period in 2024, primarily related to personnel restructuring[240] Market and Currency Risks - Approximately 9% of AUM is invested in securities denominated in currencies other than the U.S. dollar, which exposes the company to exchange rate risk[295] - A 10% increase or decrease in the value of the U.S. dollar would affect the fair value of AUM by approximately $2.8 billion, impacting revenues by about $13.2 million at a weighted-average fee rate of 47 basis points[295] - The company has not adopted a corporate-level risk management policy for exchange rate risk or client asset management[295] Interest and Debt Management - The Repriced Term Loans, totaling $985.0 million, will mature on September 23, 2032, with an interest rate of SOFR plus a margin of 2.00%[264] - The Company had no outstanding borrowings under the revolving credit facility as of September 30, 2025, maintaining compliance with its financial performance covenants[266] - The company executed a floating-to-fixed interest rate swap to fix the interest rate at 3.465% on $450 million of its Term Loan[296]