Virtus Investment Partners(US:VRTS)2025-11-07 21:02Financial Performance - Total sales in Q3 2025 were $6.3 billion, a decrease of $0.3 billion, or 4.9%, from $6.6 billion in Q3 2024[106] - Total revenues for Q3 2025 were $216.4 million, a decrease of $10.6 million, or 4.7%, from $227.0 million in Q3 2024[110] - Operating income for Q3 2025 was $47.1 million, down $8.2 million, or 14.8%, from $55.3 million in Q3 2024[110] - Net income per diluted share was $4.65 in Q3 2025, a decrease of $1.06, or 18.6%, from $5.71 in Q3 2024[110] - Net income attributable to Virtus Investment Partners, Inc. decreased by $9.1 million, or 22.1%, to $31.9 million for the three months ended September 30, 2025[123] Assets and Management - Total assets under management as of September 30, 2025, were $169.3 billion, a decrease of $14.4 billion, or 7.8%, from $183.7 billion as of September 30, 2024[107] - The average assets under management decreased by $4.6 billion, or 2.6%, from $174.8 billion in 2024 to $170.3 billion in 2025[108] - Institutional accounts saw a decrease of $8.7 billion, or 13.4%, in assets under management from $64.6 billion in 2024 to $55.9 billion in 2025[108] - Retail separate accounts experienced a decline of $3.8 billion, or 7.5%, from $50.6 billion in 2024 to $46.8 billion in 2025[108] Cash Flow and Investments - Operating cash flow for the nine months ended September 30, 2025, was $180.2 million, reflecting a 72.4% increase from $104.6 million in the same period last year[156] - Net cash used in investing activities was $5.4 million, an increase of 12.6% from $4.8 million in the prior year[157] - Net cash used in financing activities decreased to $114.2 million, down 11.8% from $129.5 million in the same period last year[158] - Investments increased to $149.5 million, a rise of 25.4% from $119.2 million at the end of 2024[150] Expenses - Operating expenses decreased by $2.4 million, or 1.4%, to $169.3 million for the three months ended September 30, 2025, and by $25.7 million, or 4.7%, to $516.0 million for the nine months ended September 30, 2025[130] - Employment expenses decreased by $6.7 million, or 6.4%, for the three months and by $20.5 million, or 6.3%, for the nine months ended September 30, 2025, primarily due to a decrease in profit- and sales-based compensation[131] - Distribution and other asset-based expenses decreased by $2.1 million, or 8.9%, for the three months and by $5.3 million, or 7.4%, for the nine months ended September 30, 2025, mainly due to decreases in assets under management[132] Debt and Equity - Total debt increased by 68.3% to $390.6 million from $232.1 million at the end of 2024[150] - The company refinanced its credit agreement, securing a $400.0 million term loan and a $250.0 million revolving credit facility[159] - Total equity rose to $919.8 million, a 2.0% increase from $901.6 million at the end of 2024[150] Market Trends - Net flows were $(3.9) billion in Q3 2025 compared to $(1.7) billion in Q3 2024, indicating a worsening trend in asset retention[106] - The company reported net outflows of $(10.8) billion from December 31, 2024, partially offset by $6.6 billion from positive market performance[107] - Equity assets decreased by $14.7 million, or 13.8%, while fixed income assets increased by $736 million, or 1.9%[115] Fees and Income - Average management fees for open-end funds decreased from 49.7 basis points in 2024 to 47.0 basis points in 2025[117] - Investment management fees decreased by $10.1 million, or 5.2%, for the three months ended September 30, 2025, primarily due to decreased average assets under management[126] - Distribution and service fees decreased by $1.1 million, or 7.7%, for the three months ended September 30, 2025, due to lower sales and average assets under management[127] Tax and Compliance - The provision for income taxes reflected an estimated effective tax rate of 27.0% for the nine months ended September 30, 2025, compared to 24.4% for the same period in 2024, primarily due to a change in valuation allowances[148] - The company remains compliant with all minimum net capital requirements for its subsidiaries as of September 30, 2025[153]