SAN ANTONIO--(BUSINESS WIRE)--Victory Capital Holdings, Inc. (NASDAQ: VCTR) (“Victory Capital” or “the Company”) today reported financial results for the quarter ended September 30, 2024.
“During the third quarter, we made excellent progress toward closing the Amundi transaction,” said David Brown, Chairman and Chief Executive Officer. “We reached a formal agreement early in the quarter and, in October, our shareholders approved all proxy proposals on the ballot at our Special Meeting of Stockholders.
“Integration work is proceeding, and we are working with Amundi’s non-U.S. distribution teams to facilitate sales of our products throughout their global networks and joint ventures upon closing, which we anticipate will occur in the first quarter of 2025. Based on work completed to date, we are maintaining our guidance of $100 million in annualized expense synergies. These expense synergies are expected to be fully realized within two years of closing with the majority achieved within the first year.
“Our business performance was strong through the first nine months of 2024. In the third quarter, we achieved the highest quarterly adjusted earnings per diluted share with tax benefit, adjusted EBITDA, and adjusted EBITDA margin in the history of our firm. Through the end of September, the percentage of our AUM outperforming benchmarks over the respective 3-, 5-, and 10-year periods was 60%, 73%, and 77%. In addition, 67% of our AUM in mutual funds and ETFs was rated four or five stars overall by Morningstar.
“Cash on the balance sheet was $188 million, up $69 million from the end of the second quarter. Our net leverage ratio declined to 1.7x due to growth in Adjusted EBITDA and our increased cash position. Additionally, the Board authorized another 7% increase in our quarterly cash dividend from $0.41 to $0.44 per share, which will be paid in December.
“As always, we continue to focus on serving our clients, which is our top priority.”
1 Total AUM includes both discretionary and non-discretionary client assets. |
2 The Company reports its financial results in accordance with generally accepted accounting principles (“GAAP”). Adjusted EBITDA and Adjusted Net Income are not defined by GAAP and should not be regarded as an alternative to any measurement under GAAP. Please refer to the section “Information Regarding Non-GAAP Financial Measures” at the end of this press release for an explanation of Non-GAAP financial measures and a reconciliation to the nearest GAAP financial measure. |
The table below presents AUM, and certain GAAP and non-GAAP (“adjusted”) financial results. Due to rounding, AUM values and other amounts in this press release may not add up precisely to the totals provided.
(in millions except per share amounts or as otherwise noted) |
||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
||||||||||||
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||||
| Assets Under Management1 | ||||||||||||||||||||
| Ending | $ | 176,113 |
|
$ | 168,681 |
|
$ | 148,879 |
|
$ | 176,113 |
|
$ | 148,879 |
|
|||||
| Average | 171,876 |
|
167,484 |
|
156,491 |
|
167,631 |
|
153,983 |
|
||||||||||
| AUM Long-term Flows2 | ||||||||||||||||||||
| Long-term Gross | $ | 5,876 |
|
$ | 5,813 |
|
$ | 4,955 |
|
$ | 18,640 |
|
$ | 16,294 |
|
|||||
| Long-term Net | (2,631 |
) |
(1,701 |
) |
(2,000 |
) |
(5,361 |
) |
(4,250 |
) |
||||||||||
| AUM Money Market/Short-term Flows | ||||||||||||||||||||
| Money Market / Short-term Gross | $ | 244 |
|
$ | 255 |
|
$ | 193 |
|
$ | 734 |
|
$ | 666 |
|
|||||
| Money Market / Short-term Net | (5 |
) |
(43 |
) |
(19 |
) |
(147 |
) |
(345 |
) |
||||||||||
| AUM Total Flows | ||||||||||||||||||||
| Total Gross | $ | 6,120 |
|
$ | 6,067 |
|
$ | 5,149 |
|
$ | 19,375 |
|
$ | 16,959 |
|
|||||
| Total Net | (2,636 |
) |
(1,744 |
) |
(2,019 |
) |
(5,508 |
) |
(4,595 |
) |
||||||||||
| Consolidated Financial Results (GAAP) | ||||||||||||||||||||
| Revenue | $ | 225.6 |
|
$ | 219.6 |
|
$ | 209.7 |
|
$ | 661.1 |
|
$ | 615.2 |
|
|||||
| AUM revenue realization (in bps) | 52.1 |
|
52.6 |
|
53.1 |
|
52.6 |
|
53.3 |
|
||||||||||
| Operating expenses | 105.3 |
|
109.0 |
|
129.6 |
|
345.3 |
|
373.1 |
|
||||||||||
| Income from operations | 120.4 |
|
110.6 |
|
80.0 |
|
315.8 |
|
242.1 |
|
||||||||||
| Operating margin | 53.3 |
% |
50.4 |
% |
38.2 |
% |
47.8 |
% |
39.4 |
% |
||||||||||
| Net income | 82.0 |
|
74.3 |
|
52.0 |
|
211.9 |
|
158.0 |
|
||||||||||
| Earnings per diluted share | $ | 1.24 |
|
$ | 1.12 |
|
$ | 0.77 |
|
$ | 3.21 |
|
$ | 2.30 |
|
|||||
| Cash flow from operations | 99.8 |
|
79.7 |
|
91.6 |
|
248.2 |
|
233.2 |
|
||||||||||
| Adjusted Performance Results (Non-GAAP)3 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 121.3 |
|
$ | 116.5 |
|
$ | 107.2 |
|
$ | 350.1 |
|
$ | 310.4 |
|
|||||
| Adjusted EBITDA margin | 53.7 |
% |
53.0 |
% |
51.1 |
% |
53.0 |
% |
50.5 |
% |
||||||||||
| Adjusted net income | 78.9 |
|
76.5 |
|
70.3 |
|
228.0 |
|
202.3 |
|
||||||||||
| Tax benefit of goodwill and acquired intangible assets | 10.1 |
|
10.1 |
|
9.5 |
|
30.0 |
|
28.6 |
|
||||||||||
| Adjusted net income with tax benefit | 89.0 |
|
86.6 |
|
79.8 |
|
258.0 |
|
230.9 |
|
||||||||||
| Adjusted net income with tax benefit per diluted share | $ | 1.35 |
|
$ | 1.31 |
|
$ | 1.18 |
|
$ | 3.91 |
|
$ | 3.36 |
|
|||||
| _____________________________________________________ | ||||||||||||||||||||
1 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. |
||||||||||||||||||||
2 Long-term AUM is defined as total AUM excluding Money Market and Short-term assets. |
||||||||||||||||||||
3 The Company reports its financial results in accordance with GAAP. Adjusted EBITDA and Adjusted Net Income are not defined by GAAP and should not be regarded as an alternative to any measurement under GAAP. Please refer to the section “Information Regarding Non-GAAP Financial Measures” at the end of this press release for an explanation of Non-GAAP financial measures and a reconciliation to the nearest GAAP financial measure. |
||||||||||||||||||||
AUM, Flows and Investment Performance
At September 30, 2024, Victory Capital had total client assets of $181.1 billion, assets under management of $176.1 billion, and other assets of $5.0 billion. Total AUM increased by $7.4 billion to $176.1 billion at September 30, 2024, compared with $168.7 billion at June 30, 2024. The increase was due to positive market action of $10.1 billion partially offset by net outflows of $2.6 billion. Total gross flows for the third quarter were $6.1 billion, including long-term gross flows of $5.9 billion.
As of September 30, 2024, Victory Capital offered 126 investment strategies through its 11 autonomous Investment Franchises and Solutions Platform. The table below presents outperformance against benchmarks by AUM as of September 30, 2024.
| Percentage of AUM Outperforming Benchmark | ||||||
| Trailing | Trailing | Trailing | Trailing | |||
| 1-Year | 3-Years | 5-Years | 10-Years | |||
46% |
|
60% |
|
73% |
|
77% |
Third Quarter 2024 Compared with Second Quarter 2024
Revenue increased 2.7% to $225.6 million in the third quarter, compared with $219.6 million in the second quarter, primarily due to higher average AUM over the comparable period. GAAP operating margin expanded 290 basis points in the third quarter to 53.3%, up from 50.4% in the second quarter primarily due to a $12.4 million decrease in compensation related expenses partially offset by a non-cash $6.6 million difference in amounts recorded to the change in the fair value of consideration payable for acquisitions. Third quarter GAAP net income increased 10.4% to $82.0 million, or $1.24 per diluted share, up from $74.3 million, or $1.12 per diluted share, in the prior quarter.
Adjusted net income with tax benefit increased 2.8% to $89.0 million, or $1.35 per diluted share in the third quarter, up from $86.6 million, or $1.31 per diluted share, in the second quarter. Adjusted EBITDA increased 4.1% to $121.3 million in the third quarter, versus $116.5 million in the second quarter. Adjusted EBITDA margin expanded 70 basis points in the third quarter of 2024 to 53.7% compared with 53.0% in the prior quarter.
Third Quarter 2024 Compared with Third Quarter 2023
Revenue for the three months ended September 30, 2024, increased 7.6% to $225.6 million, compared with $209.7 million in the same quarter of 2023 as a result of higher average AUM over the comparable period.
Operating expenses decreased 18.8% to $105.3 million, compared with $129.6 million in last year’s third quarter due to the combination of a non-cash $11.9 million difference in amounts recorded to the change in the fair value of consideration payable for acquisitions as well as a decrease in compensation related expenses. GAAP operating margin expanded 1,510 basis points to 53.3% in the third quarter, from 38.2% in the same quarter of 2023. GAAP net income increased 57.6% to $82.0 million, or $1.24 per diluted share, in the third quarter compared with $52.0 million, or $0.77 per diluted share, in the same quarter of 2023.
Adjusted net income with tax benefit increased 11.6% to $89.0 million, or $1.35 per diluted share, in the third quarter, compared with $79.8 million, or $1.18 per diluted share in the same quarter last year. Adjusted EBITDA increased 13.1% to $121.3 million, compared with $107.2 million in the same quarter of last year. Year-over-year, adjusted EBITDA margin expanded 260 basis points to 53.7% in the third quarter of 2024, compared with 51.1% in the same quarter last year.
Nine Months Ended September 30, 2024 Compared with Nine Months Ended September 30, 2023
Revenue for the nine months ended September 30, 2024, increased 7.5% to $661.1 million, compared with $615.2 million in the same period of 2023. The increase was primarily due to higher average AUM.
Operating expenses decreased 7.4% to $345.3 million for the nine months ended September 30, 2024, compared with $373.1 million in the same period in 2023 due to the combination of a non-cash $16.8 million difference in amounts recorded to the change in the fair value of consideration payable for acquisitions as well as a decreases in compensation related expense and depreciation and amortization expense, partially offsetting was an increase in acquisition-related costs. GAAP operating margin was 47.8% for the nine months ended September 30, 2024, an 840 basis point increase from the 39.4% recorded in the same period in 2023. GAAP net income increased 34.2% to $211.9 million, or $3.21 per diluted share, in the first nine months of 2024 compared with $158.0 million, or $2.30 per diluted share, in the same period in 2023.
Adjusted net income with tax benefit increased 11.7% to $258.0 million in the first nine months of 2024 compared to $230.9 million in the same period in 2023. On a per-share basis, adjusted net income with tax benefit increased 16.4% to $3.91 per diluted share for the nine months ended September 30, 2024 compared to $3.36 per diluted share in the same period in 2023. For the nine months ended September 30, 2024, adjusted EBITDA increased 12.8% to $350.1 million, compared with $310.4 million for the same period in 2023. Year-over-year, adjusted EBITDA margin expanded 250 basis points to 53.0% in the first nine months of 2024, compared with 50.5% in the same period last year.
Balance Sheet / Capital Management
The total debt outstanding as of September 30, 2024 was approximately $992 million and consisted of an existing term loan balance of $625 million and the 2021 Incremental Term Loans balance of $367 million.
The Company’s Board of Directors approved a regular quarterly cash dividend of $0.44 per share. The dividend is payable on December 23, 2024, to shareholders of record on December 9, 2024.
Conference Call, Webcast and Slide Presentation
The Company will host a conference call tomorrow morning, November 8, at 8:00 a.m. ET to discuss the results. Analysts and investors may participate in the question-and-answer session. To participate in the conference call, please call (888) 330-3571 (domestic) or (646) 960-0657 (international), shortly before 8:00 a.m. ET and reference the Victory Capital Conference Call. A live, listen-only webcast will also be available via the investor relations section of the Company’s website at https://ir.vcm.com. Prior to the call, a supplemental slide presentation that will be used during the conference call will be available on the Events and Presentations page of the Company’s investor relations website. For anyone who is unable to join the live event, an archive of the webcast will be available for replay shortly after the call concludes.
About Victory Capital
Victory Capital is a diversified global asset management firm with total assets under management of $176.1 billion, and $181.1 billion in total client assets, as of September 30, 2024. The Company employs a next-generation business strategy that combines boutique investment qualities with the benefits of a fully integrated, centralized operating and distribution platform.
Victory Capital provides specialized investment strategies to institutions, intermediaries, retirement platforms and individual investors. With 11 autonomous Investment Franchises and a Solutions Business, Victory Capital offers a wide array of investment products and services, including mutual funds, ETFs, separately managed accounts, alternative investments, third-party ETF model strategies, collective investment trusts, private funds, a 529 Education Savings Plan, and brokerage services.
Victory Capital is headquartered in San Antonio, Texas, with offices and investment professionals in the U.S. and around the world. To learn more please visit www.vcm.com or follow Victory Capital on Facebook, Twitter, and LinkedIn.
FORWARD-LOOKING STATEMENTS
This earnings release may contain forward-looking statements within the meaning of applicable U.S. federal and non-U.S. securities laws. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “assume,” “budget,” “continue,” “estimate,” “future,” “objective,” “outlook,” “plan,” “potential,” “predict,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof and include, but are not limited to, statements regarding the proposed transaction and the outlook for Victory Capital’s or Amundi’s future business and financial performance. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Victory Capital’s and Amundi’s control and could cause Victory Capital’s and Amundi’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements.
Although it is not possible to identify all such risks and factors, they include, among others, the following: continued geopolitical uncertainty including the conflicts in Ukraine and Israel, risks that the conditions to closing the transaction with Amundi US will be satisfied and the transaction will close on the anticipated timeline, if at all; risks associated with expected benefits, or impact on our business, of the proposed transaction, including our ability to achieve any expected synergies; reductions in AUM based on investment performance, client withdrawals, difficult market conditions and other factors such as a pandemic; the nature of the Company’s contracts and investment advisory agreements; the Company’s ability to maintain historical returns and sustain its historical growth; the Company’s dependence on third parties to market its strategies and provide products or services for the operation of its business; the Company’s ability to retain key investment professionals or members of its senior management team; the Company’s reliance on the technology systems supporting its operations; the Company’s ability to successfully acquire and integrate new companies; the concentration of the Company’s investments in long-only small- and mid-cap equity and U.S. clients; risks and uncertainties associated with non-U.S. investments; the Company’s efforts to establish and develop new teams and strategies; the ability of the Company’s investment teams to identify appropriate investment opportunities; the Company’s ability to limit employee misconduct; the Company’s ability to meet the guidelines set by its clients; the Company’s exposure to potential litigation (including administrative or tax proceedings) or regulatory actions; the Company’s ability to implement effective information and cyber security policies, procedures and capabilities; the Company’s substantial indebtedness; the potential impairment of the Company’s goodwill and intangible assets; disruption to the operations of third parties whose functions are integral to the Company’s ETF platform; the Company’s determination that Victory Capital is not required to register as an "investment company" under the 1940 Act; the fluctuation of the Company’s expenses; the Company’s ability to respond to recent trends in the investment management industry; the level of regulation on investment management firms and the Company’s ability to respond to regulatory developments; the competitiveness of the investment management industry; the level of control over the Company retained by Crestview GP; and other risks and factors listed under "Risk Factors" and elsewhere in the Company’s filings with the SEC.
Such forward-looking statements are based on numerous assumptions regarding Victory Capital’s present and future business strategies and the environment in which it will operate in the future. Any forward-looking statement made in this press release speaks only as of the date hereof. Except as required by law, Victory Capital assumes no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.
Victory Capital Holdings, Inc. and Subsidiaries Unaudited Consolidated Statements of Operations (in thousands except per share data and percentages) |
||||||||||||||||||||
For the Three Months Ended |
|
For the Nine Months Ended |
||||||||||||||||||
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
||||||||||||
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||||
| Revenue | ||||||||||||||||||||
| Investment management fees | $ | 177,809 |
|
$ | 173,163 |
|
$ | 163,953 |
|
$ | 520,757 |
|
$ | 480,199 |
|
|||||
| Fund administration and distribution fees | 47,819 |
|
46,458 |
|
45,735 |
|
140,349 |
|
135,035 |
|
||||||||||
| Total revenue | 225,628 |
|
219,621 |
|
209,688 |
|
661,106 |
|
615,234 |
|
||||||||||
| Expenses | ||||||||||||||||||||
| Personnel compensation and benefits | 43,243 |
|
55,660 |
|
54,501 |
|
158,357 |
|
167,043 |
|
||||||||||
| Distribution and other asset-based expenses | 36,828 |
|
36,474 |
|
38,160 |
|
109,565 |
|
113,158 |
|
||||||||||
| General and administrative | 14,029 |
|
14,385 |
|
13,947 |
|
42,426 |
|
39,585 |
|
||||||||||
| Depreciation and amortization | 7,510 |
|
7,551 |
|
12,333 |
|
22,662 |
|
33,663 |
|
||||||||||
| Change in value of consideration payable for acquisition of business | (1,600 |
) |
(8,200 |
) |
10,336 |
|
2,400 |
|
19,236 |
|
||||||||||
| Acquisition-related costs | 5,075 |
|
3,049 |
|
116 |
|
9,150 |
|
134 |
|
||||||||||
| Restructuring and integration costs | 180 |
|
105 |
|
246 |
|
777 |
|
275 |
|
||||||||||
| Total operating expenses | 105,265 |
|
109,024 |
|
129,639 |
|
345,337 |
|
373,094 |
|
||||||||||
| Income from operations | 120,363 |
|
110,597 |
|
80,049 |
|
315,769 |
|
242,140 |
|
||||||||||
| Operating margin | 53.3 |
% |
50.4 |
% |
38.2 |
% |
47.8 |
% |
39.4 |
% |
||||||||||
| Other income (expense) | ||||||||||||||||||||
| Interest income and other income (expense) | 3,551 |
|
1,557 |
|
1,452 |
|
8,673 |
|
4,967 |
|
||||||||||
| Interest expense and other financing costs | (16,414 |
) |
(16,279 |
) |
(15,580 |
) |
(49,179 |
) |
(44,721 |
) |
||||||||||
| Loss on debt extinguishment | — |
|
(100 |
) |
— |
|
(100 |
) |
— |
|
||||||||||
| Total other expense, net | (12,863 |
) |
(14,822 |
) |
(14,128 |
) |
(40,606 |
) |
(39,754 |
) |
||||||||||
| Income before income taxes | 107,500 |
|
95,775 |
|
65,921 |
|
275,163 |
|
202,386 |
|
||||||||||
| Income tax expense | (25,517 |
) |
(21,524 |
) |
(13,914 |
) |
(63,238 |
) |
(44,435 |
) |
||||||||||
| Net income | $ | 81,983 |
|
$ | 74,251 |
|
$ | 52,007 |
|
$ | 211,925 |
|
$ | 157,951 |
|
|||||
| Earnings per share of common stock | ||||||||||||||||||||
| Basic | $ | 1.26 |
|
$ | 1.15 |
|
$ | 0.79 |
|
$ | 3.28 |
|
$ | 2.38 |
|
|||||
| Diluted | 1.24 |
|
1.12 |
|
0.77 |
|
3.21 |
|
2.30 |
|
||||||||||
| Weighted average number of shares outstanding | ||||||||||||||||||||
| Basic | 64,875 |
|
64,734 |
|
65,774 |
|
64,667 |
|
66,504 |
|
||||||||||
| Diluted | 66,057 |
|
66,075 |
|
67,676 |
|
66,044 |
|
68,636 |
|
||||||||||
| Dividends declared per share | $ | 0.41 |
|
$ | 0.37 |
|
$ | 0.32 |
|
$ | 1.115 |
|
$ | 0.96 |
|
|||||
Victory Capital Holdings, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures1 (unaudited; in thousands except per share data and percentages) |
||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
||||||||||||
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||||
| Net income (GAAP) | $ | 81,983 |
|
$ | 74,251 |
|
$ | 52,007 |
|
$ | 211,925 |
|
$ | 157,951 |
|
|||||
| Income tax expense | (25,517 |
) |
(21,524 |
) |
(13,914 |
) |
(63,238 |
) |
(44,435 |
) |
||||||||||
| Income before income taxes | $ | 107,500 |
|
$ | 95,775 |
|
$ | 65,921 |
|
$ | 275,163 |
|
$ | 202,386 |
|
|||||
| Interest expense | 15,649 |
|
15,468 |
|
14,660 |
|
46,828 |
|
42,288 |
|
||||||||||
| Depreciation | 2,210 |
|
2,252 |
|
2,302 |
|
6,731 |
|
6,569 |
|
||||||||||
| Other business taxes | 366 |
|
414 |
|
636 |
|
1,149 |
|
1,402 |
|
||||||||||
| Amortization of acquisition-related intangible assets | 5,300 |
|
5,299 |
|
10,032 |
|
15,931 |
|
27,094 |
|
||||||||||
| Stock-based compensation | 972 |
|
940 |
|
1,451 |
|
3,239 |
|
4,993 |
|
||||||||||
| Acquisition, restructuring and exit costs | (11,513 |
) |
(4,520 |
) |
11,463 |
|
(1,328 |
) |
23,396 |
|
||||||||||
| Debt issuance costs | 775 |
|
874 |
|
762 |
|
2,404 |
|
2,266 |
|
||||||||||
| Adjusted EBITDA | $ | 121,259 |
|
$ | 116,502 |
|
$ | 107,227 |
|
$ | 350,117 |
|
$ | 310,394 |
|
|||||
| Adjusted EBITDA margin | 53.7 |
% |
53.0 |
% |
51.1 |
% |
53.0 |
% |
50.5 |
% |
||||||||||
| Net income (GAAP) | $ | 81,983 |
|
$ | 74,251 |
|
$ | 52,007 |
|
$ | 211,925 |
|
$ | 157,951 |
|
|||||
| Adjustment to reflect the operating performance of the Company | ||||||||||||||||||||
| Other business taxes | 366 |
|
414 |
|
636 |
|
1,149 |
|
1,402 |
|
||||||||||
| Amortization of acquisition-related intangible assets | 5,300 |
|
5,299 |
|
10,032 |
|
15,931 |
|
27,094 |
|
||||||||||
| Stock-based compensation | 972 |
|
940 |
|
1,451 |
|
3,239 |
|
4,993 |
|
||||||||||
| Acquisition, restructuring and exit costs | (11,513 |
) |
(4,520 |
) |
11,463 |
|
(1,328 |
) |
23,396 |
|
||||||||||
| Debt issuance costs | 775 |
|
874 |
|
762 |
|
2,404 |
|
2,266 |
|
||||||||||
| Tax effect of above adjustments | 1,025 |
|
(753 |
) |
(6,085 |
) |
(5,349 |
) |
(14,786 |
) |
||||||||||
| Adjusted net income | $ | 78,908 |
|
$ | 76,505 |
|
$ | 70,266 |
|
$ | 227,971 |
|
$ | 202,316 |
|
|||||
| Adjusted net income per diluted share | $ | 1.19 |
|
$ | 1.16 |
|
$ | 1.04 |
|
$ | 3.45 |
|
$ | 2.95 |
|
|||||
| Tax benefit of goodwill and acquired intangible assets | $ | 10,141 |
|
$ | 10,141 |
|
$ | 9,536 |
|
$ | 30,030 |
|
$ | 28,597 |
|
|||||
| Tax benefit of goodwill and acquired intangible assets per diluted share | $ | 0.15 |
|
$ | 0.15 |
|
$ | 0.14 |
|
$ | 0.45 |
|
$ | 0.42 |
|
|||||
| Adjusted net income with tax benefit | $ | 89,049 |
|
$ | 86,646 |
|
$ | 79,802 |
|
$ | 258,001 |
|
$ | 230,913 |
|
|||||
| Adjusted net income with tax benefit per diluted share | $ | 1.35 |
|
$ | 1.31 |
|
$ | 1.18 |
|
$ | 3.91 |
|
$ | 3.36 |
|
|||||
1 The Company reports its financial results in accordance with GAAP. Adjusted EBITDA and Adjusted Net Income are not defined by GAAP and should not be regarded as an alternative to any measurement under GAAP. Please refer to the section “Information Regarding Non-GAAP Financial Measures” at the end of this press release for an explanation of Non-GAAP financial measures and a reconciliation to the nearest GAAP financial measure. |
||||||||||||||||||||
Victory Capital Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidated Balance Sheets (In thousands, except for shares) |
||||||
| September 30, 2024 | December 31, 2023 | |||||
| Assets | ||||||
| Cash and cash equivalents | $ | 188,248 |
$ | 123,547 |
||
| Receivables | 96,922 |
87,570 |
||||
| Prepaid expenses | 7,932 |
5,785 |
||||
| Investments, at fair value | 34,743 |
31,808 |
||||
| Property and equipment, net | 13,720 |
19,578 |
||||
| Goodwill | 981,805 |
981,805 |
||||
| Other intangible assets, net | 1,265,901 |
1,281,832 |
||||
| Other assets | 22,854 |
10,691 |
||||
| Total assets | $ | 2,612,125 |
$ | 2,542,616 |
||
| Liabilities and stockholders' equity | ||||||
| Accounts payable and accrued expenses | $ | 61,256 |
$ | 56,477 |
||
| Accrued compensation and benefits | 45,595 |
55,456 |
||||
| Consideration payable for acquisition of business | 139,600 |
217,200 |
||||
| Deferred tax liability, net | 152,335 |
128,714 |
||||
| Other liabilities | 56,016 |
42,499 |
||||
| Long-term debt, net1 | 982,661 |
989,269 |
||||
| Total liabilities | 1,437,463 |
1,489,615 |
||||
| Stockholders' equity | ||||||
| Common stock, $0.01 par value per share: 2024 - 600,000,000 shares authorized, 83,679,920 shares issued and 64,924,081 shares outstanding; 2023 - 600,000,000 shares authorized, 82,404,305 shares issued and 64,254,714 shares outstanding |
837 |
824 |
||||
| Additional paid-in capital | 746,917 |
728,283 |
||||
| Treasury stock, at cost: 2024 - 18,755,839 shares; 2023 - 18,149,591 shares | (470,727) |
(444,286) |
||||
| Accumulated other comprehensive income | 21,955 |
31,328 |
||||
| Retained earnings | 875,680 |
736,852 |
||||
| Total stockholders' equity | 1,174,662 |
1,053,001 |
||||
| Total liabilities and stockholders' equity | $ | 2,612,125 |
$ | 2,542,616 |
||
1 Balances at September 30, 2024 and December 31, 2023 are shown net of unamortized loan discount and debt issuance costs in the amount of $9.5 million and $12.4 million, respectively. The gross amount of the debt outstanding was $992.2 million and $1,001.7 million as of September 30, 2024 and December 31, 2023, respectively. |
||||||
Victory Capital Holdings, Inc. and Subsidiaries Total Client Assets (unaudited; in millions) |
||||||||||||
| For the Three Months Ended | ||||||||||||
| September 30, | June 30, | September 30, | ||||||||||
2024 |
|
2024 |
|
2023 |
||||||||
| Beginning AUM | $ | 168,681 |
|
$ | 170,342 |
|
$ | 157,161 |
|
|||
| Beginning other assets1 | 5,094 |
|
5,117 |
|
4,461 |
|
||||||
| Beginning total client assets | 173,775 |
|
175,459 |
|
161,622 |
|
||||||
| AUM net cash flows | (2,636 |
) |
(1,744 |
) |
(2,019 |
) |
||||||
| Other assets net cash flows | (446 |
) |
18 |
|
300 |
|
||||||
| Total client assets net cash flows | (3,082 |
) |
(1,727 |
) |
(1,719 |
) |
||||||
| AUM market appreciation (depreciation) | 10,076 |
|
83 |
|
(4,755 |
) |
||||||
| Other assets market appreciation (depreciation) | 333 |
|
(40 |
) |
(134 |
) |
||||||
| Total client assets market appreciation (depreciation) | 10,409 |
|
43 |
|
(4,888 |
) |
||||||
| AUM realizations and distributions | (2 |
) |
— |
|
— |
|
||||||
| Acquired & divested assets / Net transfers | (7 |
) |
(1 |
) |
(1,508 |
) |
||||||
| Ending AUM | 176,113 |
|
168,681 |
|
148,879 |
|
||||||
| Ending other assets | 4,981 |
|
5,094 |
|
4,627 |
|
||||||
| Ending total client assets | 181,094 |
|
173,775 |
|
153,506 |
|
||||||
| Average total client assets2 | 176,806 |
|
172,392 |
|
161,147 |
|
||||||
| For the Nine Months Ended | ||||||||||||
| September 30, | September 30, | |||||||||||
2024 |
|
2023 |
||||||||||
| Beginning AUM | $ | 161,322 |
|
$ | 147,762 |
|
||||||
| Beginning other assets1 | 5,289 |
|
5,190 |
|
||||||||
| Beginning total client assets | 166,611 |
|
152,952 |
|
||||||||
| AUM net cash flows | (5,508 |
) |
(4,595 |
) |
||||||||
| Other assets net cash flows | (952 |
) |
(791 |
) |
||||||||
| Total client assets net cash flows | (6,460 |
) |
(5,386 |
) |
||||||||
| AUM market appreciation (depreciation) | 20,337 |
|
7,335 |
|
||||||||
| Other assets market appreciation (depreciation) | 644 |
|
228 |
|
||||||||
| Total client assets market appreciation (depreciation) | 20,982 |
|
7,563 |
|
||||||||
| AUM realizations and distributions | (2 |
) |
(73 |
) |
||||||||
| Acquired & divested assets / Net transfers | (38 |
) |
(1,549 |
) |
||||||||
| Ending AUM | 176,113 |
|
148,879 |
|
||||||||
| Ending other assets | 4,981 |
|
4,627 |
|
||||||||
| Ending total client assets | 181,094 |
|
153,506 |
|
||||||||
| Average total client assets3 | 172,688 |
|
158,779 |
|
||||||||
1 Includes low-fee (2 to 4 bps) institutional assets, previously reported in the Solutions asset class within the by asset class table and in Separate Accounts and Other Pooled Vehicles within the by vehicle table. These assets are included as part of Victory’s Regulatory Assets Under Management reported in Form ADV Part 1. |
||||||||||||
2 For the three-month periods ending September 30, 2024, June 30, 2024 and September 30, 2023 total client assets revenue realization was 50.8 basis points, 51.2 basis points and 51.6 basis points, respectively. |
||||||||||||
3 For the nine-month periods ending September 30, 2024 and 2023 total client assets revenue realization was 51.1 basis points and 51.8 basis points, respectively. |
||||||||||||
Victory Capital Holdings, Inc. and Subsidiaries Total Assets Under Management1 (unaudited; in millions except for percentages) |
||||||||||||
September 30, |
|
June 30, |
|
September 30, |
||||||||
2024 |
|
2024 |
|
2023 |
||||||||
| Beginning assets under management | $ | 168,681 |
|
$ | 170,342 |
|
$ | 157,161 |
|
|||
| Gross client cash inflows | 6,120 |
|
6,067 |
|
5,149 |
|
||||||
| Gross client cash outflows | (8,756 |
) |
(7,812 |
) |
(7,168 |
) |
||||||
| Net client cash flows | (2,636 |
) |
(1,744 |
) |
(2,019 |
) |
||||||
| Market appreciation (depreciation) | 10,076 |
|
83 |
|
(4,755 |
) |
||||||
| Realizations and distributions | (2 |
) |
— |
|
— |
|
||||||
| Acquired & divested assets / Net Transfers | (7 |
) |
(1 |
) |
(1,508 |
) |
||||||
| Ending assets under management | 176,113 |
|
168,681 |
|
148,879 |
|
||||||
| Average assets under management | 171,876 |
|
167,484 |
|
156,491 |
|
||||||
| For the Nine Months Ended | ||||||||||||
September 30, |
|
September 30, |
||||||||||
2024 |
|
2023 |
||||||||||
| Beginning assets under management | $ | 161,322 |
|
$ | 147,762 |
|
||||||
| Gross client cash inflows | 19,375 |
|
16,959 |
|
||||||||
| Gross client cash outflows | (24,882 |
) |
(21,554 |
) |
||||||||
| Net client cash flows | (5,508 |
) |
(4,595 |
) |
||||||||
| Market appreciation (depreciation) | 20,337 |
|
7,335 |
|
||||||||
| Realizations and distributions | (2 |
) |
(73 |
) |
||||||||
| Acquired assets / Net transfers | (38 |
) |
(1,549 |
) |
||||||||
| Ending assets under management | 176,113 |
|
148,879 |
|
||||||||
| Average assets under management | 167,631 |
|
153,983 |
|
||||||||
1 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. |
||||||||||||
Victory Capital Holdings, Inc. and Subsidiaries Other Assets (Institutional)1 (unaudited; in millions) |
||||||||||||
| For the Three Months | ||||||||||||
September 30, |
|
June 30, |
|
September 30, |
||||||||
2024 |
|
2024 |
|
2023 |
||||||||
| Beginning other assets (institutional) | $ | 5,094 |
|
$ | 5,117 |
|
$ | 4,461 |
|
|||
| Gross client cash inflows | — |
|
467 |
|
300 |
|
||||||
| Gross client cash outflows | (446 |
) |
(449 |
) |
— |
|
||||||
| Net client cash flows | (446 |
) |
18 |
|
300 |
|
||||||
| Market appreciation (depreciation) | 333 |
|
(40 |
) |
(134 |
) |
||||||
| Realizations and distributions | — |
|
— |
|
— |
|
||||||
| Acquired & divested assets / Net transfers | — |
|
— |
|
— |
|
||||||
| Ending other assets (institutional) | 4,981 |
|
5,094 |
|
4,627 |
|
||||||
| Average other assets (institutional)2 | 4,930 |
|
4,909 |
|
4,656 |
|
||||||
| For the Nine Months Ended | ||||||||||||
| September 30, | September 30, | |||||||||||
2024 |
2023 |
|||||||||||
| Beginning other assets (institutional) | $ | 5,289 |
|
$ | 5,190 |
|
||||||
| Gross client cash inflows | 467 |
|
400 |
|
||||||||
| Gross client cash outflows | (1,419 |
) |
(1,191 |
) |
||||||||
| Net client cash flows | (952 |
) |
(791 |
) |
||||||||
| Market appreciation (depreciation) | 644 |
|
228 |
|
||||||||
| Realizations and distributions | — |
|
— |
|
||||||||
| Acquired & divested assets / Net transfers | — |
|
— |
|
||||||||
| Ending other assets (institutional) | 4,981 |
|
4,627 |
|
||||||||
| Average other assets (institutional)3 | 5,057 |
|
4,796 |
|
||||||||
1 Includes low-fee (2 to 4 bps) institutional assets, previously reported in the Solutions asset class within the by asset class table and in Separate Accounts and Other Pooled Vehicles within the by vehicle table. These assets are included as part of Victory’s Regulatory Assets Under Management reported in Form ADV Part 1. |
||||||||||||
2 For the three-month periods ending September 30, 2024, June 30, 2024 and September 30, 2023 total other assets (institutional) revenue realization was 3.4 basis points, 3.4 basis points and 3.6 basis points, respectively. |
||||||||||||
3 For the nine-month periods ending September 30, 2024 and 2023 total other assets (institutional) revenue realization was 3.5 basis points and 3.6 basis points, respectively. |
||||||||||||
Victory Capital Holdings, Inc. and Subsidiaries Assets Under Management by Asset Class (unaudited; in millions) |
||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | By Asset Class | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Global / |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
U.S. Mid |
|
U.S. Small |
|
Fixed |
|
U.S. Large |
|
Non-U.S. |
|
|
|
|
Alternative |
|
Total |
|
Money Market / |
|
Total |
|||||||||||||||||||||
Cap Equity |
|
Cap Equity |
|
Income |
|
Cap Equity |
|
Equity |
|
Solutions |
|
Investments |
|
Long-term |
|
Short-term |
|
AUM1 |
||||||||||||||||||||||
| September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||
| Beginning assets under management | $ | 31,015 |
|
$ | 15,182 |
|
$ | 24,398 |
|
$ | 13,983 |
|
$ | 18,459 |
|
$ | 58,936 |
|
$ | 3,390 |
|
$ | 165,362 |
|
$ | 3,320 |
|
$ | 168,681 |
|
||||||||||
| Gross client cash inflows | 975 |
|
584 |
|
1,344 |
|
73 |
|
578 |
|
2,143 |
|
179 |
|
5,876 |
|
244 |
|
6,120 |
|
||||||||||||||||||||
| Gross client cash outflows | (2,300 |
) |
(1,278 |
) |
(1,640 |
) |
(486 |
) |
(485 |
) |
(1,877 |
) |
(443 |
) |
(8,508 |
) |
(249 |
) |
(8,756 |
) |
||||||||||||||||||||
| Net client cash flows | (1,325 |
) |
(694 |
) |
(296 |
) |
(413 |
) |
94 |
|
265 |
|
(263 |
) |
(2,631 |
) |
(5 |
) |
(2,636 |
) |
||||||||||||||||||||
| Market appreciation (depreciation) | 2,649 |
|
1,105 |
|
973 |
|
690 |
|
1,212 |
|
3,368 |
|
51 |
|
10,049 |
|
27 |
|
10,076 |
|
||||||||||||||||||||
| Realizations and distributions | — |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(2 |
) |
(2 |
) |
— |
|
(2 |
) |
||||||||||||||||||||
| Acquired assets / Net transfers | (5 |
) |
(2 |
) |
6 |
|
(21 |
) |
(13 |
) |
(25 |
) |
3 |
|
(58 |
) |
51 |
|
(7 |
) |
||||||||||||||||||||
| Ending assets under management | $ | 32,333 |
|
$ | 15,591 |
|
$ | 25,081 |
|
$ | 14,239 |
|
$ | 19,752 |
|
$ | 62,544 |
|
$ | 3,178 |
|
$ | 172,720 |
|
$ | 3,393 |
|
$ | 176,113 |
|
||||||||||
| June 30, 2024 | ||||||||||||||||||||||||||||||||||||||||
| Beginning assets under management | $ | 32,918 |
|
$ | 16,297 |
|
$ | 24,481 |
|
$ | 13,895 |
|
$ | 18,200 |
|
$ | 57,833 |
|
$ | 3,465 |
|
$ | 167,089 |
|
$ | 3,253 |
|
$ | 170,342 |
|
||||||||||
| Gross client cash inflows | 1,007 |
|
559 |
|
1,283 |
|
67 |
|
558 |
|
2,035 |
|
303 |
|
5,813 |
|
255 |
|
6,067 |
|
||||||||||||||||||||
| Gross client cash outflows | (1,659 |
) |
(778 |
) |
(1,508 |
) |
(309 |
) |
(635 |
) |
(2,184 |
) |
(442 |
) |
(7,514 |
) |
(298 |
) |
(7,812 |
) |
||||||||||||||||||||
| Net client cash flows | (652 |
) |
(218 |
) |
(225 |
) |
(241 |
) |
(77 |
) |
(150 |
) |
(139 |
) |
(1,701 |
) |
(43 |
) |
(1,744 |
) |
||||||||||||||||||||
| Market appreciation (depreciation) | (1,247 |
) |
(893 |
) |
116 |
|
350 |
|
367 |
|
1,273 |
|
58 |
|
24 |
|
60 |
|
83 |
|
||||||||||||||||||||
| Realizations and distributions | — |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
||||||||||||||||||||
| Acquired assets / Net transfers | (4 |
) |
(4 |
) |
26 |
|
(21 |
) |
(32 |
) |
(21 |
) |
6 |
|
(50 |
) |
50 |
|
(1 |
) |
||||||||||||||||||||
| Ending assets under management | $ | 31,015 |
|
$ | 15,182 |
|
$ | 24,398 |
|
$ | 13,983 |
|
$ | 18,459 |
|
$ | 58,936 |
|
$ | 3,390 |
|
$ | 165,362 |
|
$ | 3,320 |
|
$ | 168,681 |
|
||||||||||
| September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||
| Beginning assets under management | $ | 30,007 |
|
$ | 15,664 |
|
$ | 26,098 |
|
$ | 12,170 |
|
$ | 15,392 |
|
$ | 51,375 |
|
$ | 3,301 |
|
$ | 154,009 |
|
$ | 3,152 |
|
$ | 157,161 |
|
||||||||||
| Gross client cash inflows | 1,224 |
|
458 |
|
892 |
|
51 |
|
392 |
|
1,688 |
|
249 |
|
4,955 |
|
193 |
|
5,149 |
|
||||||||||||||||||||
| Gross client cash outflows | (1,769 |
) |
(920 |
) |
(1,343 |
) |
(282 |
) |
(519 |
) |
(1,720 |
) |
(402 |
) |
(6,955 |
) |
(213 |
) |
(7,168 |
) |
||||||||||||||||||||
| Net client cash flows | (545 |
) |
(462 |
) |
(451 |
) |
(231 |
) |
(126 |
) |
(32 |
) |
(153 |
) |
(2,000 |
) |
(19 |
) |
(2,019 |
) |
||||||||||||||||||||
| Market appreciation (depreciation) | (1,224 |
) |
(547 |
) |
(460 |
) |
(287 |
) |
(451 |
) |
(1,895 |
) |
71 |
|
(4,793 |
) |
39 |
|
(4,755 |
) |
||||||||||||||||||||
| Realizations and distributions | — |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
||||||||||||||||||||
| Acquired assets / Net transfers | (2 |
) |
(5 |
) |
(1,397 |
) |
(57 |
) |
(8 |
) |
(78 |
) |
3 |
|
(1,545 |
) |
37 |
|
(1,508 |
) |
||||||||||||||||||||
| Ending assets under management | $ | 28,235 |
|
$ | 14,650 |
|
$ | 23,790 |
|
$ | 11,596 |
|
$ | 14,807 |
|
$ | 49,371 |
|
$ | 3,222 |
|
$ | 145,671 |
|
$ | 3,208 |
|
$ | 148,879 |
|
||||||||||
1 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. |
||||||||||||||||||||||||||||||||||||||||
Victory Capital Holdings, Inc. and Subsidiaries Assets Under Management by Asset Class (unaudited; in millions) |
||||||||||||||||||||||||||||||||||||||||
| For the Nine Months Ended | By Asset Class | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Global / |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
U.S. Mid |
|
U.S. Small |
|
Fixed |
|
U.S. Large |
|
Non-U.S. |
|
|
|
|
Alternative |
|
Total |
|
Money Market / |
|
Total |
|||||||||||||||||||||
Cap Equity |
|
Cap Equity |
|
Income |
|
Cap Equity |
|
Equity |
|
Solutions |
|
Investments |
|
Long-term |
|
Short-term |
|
AUM1 |
||||||||||||||||||||||
| September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||
| Beginning assets under management | $ | 30,604 |
|
$ | 15,959 |
|
$ | 24,355 |
|
$ | 12,635 |
|
$ | 16,772 |
|
$ | 54,296 |
|
$ | 3,431 |
|
$ | 158,051 |
|
$ | 3,271 |
|
$ | 161,322 |
|
||||||||||
| Gross client cash inflows | 3,353 |
|
1,650 |
|
3,925 |
|
209 |
|
2,227 |
|
6,343 |
|
935 |
|
18,640 |
|
734 |
|
19,375 |
|
||||||||||||||||||||
| Gross client cash outflows | (5,804 |
) |
(2,980 |
) |
(4,514 |
) |
(1,127 |
) |
(1,871 |
) |
(6,472 |
) |
(1,234 |
) |
(24,001 |
) |
(881 |
) |
(24,882 |
) |
||||||||||||||||||||
| Net client cash flows | (2,451 |
) |
(1,330 |
) |
(589 |
) |
(918 |
) |
356 |
|
(129 |
) |
(299 |
) |
(5,361 |
) |
(147 |
) |
(5,508 |
) |
||||||||||||||||||||
| Market appreciation (depreciation) | 4,196 |
|
1,014 |
|
1,265 |
|
2,595 |
|
2,713 |
|
8,390 |
|
34 |
|
20,208 |
|
129 |
|
20,337 |
|
||||||||||||||||||||
| Realizations and distributions | — |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(2 |
) |
(2 |
) |
— |
|
(2 |
) |
||||||||||||||||||||
| Acquired assets / Net transfers | (16 |
) |
(51 |
) |
50 |
|
(72 |
) |
(89 |
) |
(13 |
) |
14 |
|
(177 |
) |
139 |
|
(38 |
) |
||||||||||||||||||||
| Ending assets under management | $ | 32,333 |
|
$ | 15,591 |
|
$ | 25,081 |
|
$ | 14,239 |
|
$ | 19,752 |
|
$ | 62,544 |
|
$ | 3,178 |
|
$ | 172,720 |
|
$ | 3,393 |
|
$ | 176,113 |
|
||||||||||
| September 30, 20231 | ||||||||||||||||||||||||||||||||||||||||
| Beginning assets under management | $ | 27,892 |
|
$ | 15,103 |
|
$ | 26,353 |
|
$ | 10,973 |
|
$ | 14,160 |
|
$ | 46,317 |
|
$ | 3,663 |
|
$ | 144,460 |
|
$ | 3,302 |
|
$ | 147,762 |
|
||||||||||
| Gross client cash inflows | 4,083 |
|
2,186 |
|
2,952 |
|
222 |
|
1,329 |
|
4,427 |
|
1,095 |
|
16,294 |
|
666 |
|
16,959 |
|
||||||||||||||||||||
| Gross client cash outflows | (3,988 |
) |
(2,921 |
) |
(4,239 |
) |
(957 |
) |
(1,648 |
) |
(5,141 |
) |
(1,650 |
) |
(20,544 |
) |
(1,010 |
) |
(21,554 |
) |
||||||||||||||||||||
| Net client cash flows | 95 |
|
(735 |
) |
(1,287 |
) |
(735 |
) |
(319 |
) |
(715 |
) |
(555 |
) |
(4,250 |
) |
(345 |
) |
(4,595 |
) |
||||||||||||||||||||
| Market appreciation (depreciation) | 237 |
|
280 |
|
203 |
|
1,488 |
|
1,044 |
|
3,792 |
|
180 |
|
7,224 |
|
111 |
|
7,335 |
|
||||||||||||||||||||
| Realizations and distributions | — |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(73 |
) |
(73 |
) |
— |
|
(73 |
) |
||||||||||||||||||||
| Acquired assets / Net transfers | 13 |
|
2 |
|
(1,479 |
) |
(130 |
) |
(79 |
) |
(23 |
) |
8 |
|
(1,689 |
) |
140 |
|
(1,549 |
) |
||||||||||||||||||||
| Ending assets under management | $ | 28,235 |
|
$ | 14,650 |
|
$ | 23,790 |
|
$ | 11,596 |
|
$ | 14,807 |
|
$ | 49,371 |
|
$ | 3,222 |
|
$ | 145,671 |
|
$ | 3,208 |
|
$ | 148,879 |
|
||||||||||
1 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. |
||||||||||||||||||||||||||||||||||||||||
Victory Capital Holdings, Inc. and Subsidiaries Assets Under Management by Vehicle (unaudited; in millions) |
||||||||||||||||
| For the Three Months Ended | By Vehicle | |||||||||||||||
| Separate | ||||||||||||||||
| Accounts | ||||||||||||||||
| Mutual | and Other | |||||||||||||||
| Funds1 | ETFs2 | Vehicles3 | Total AUM4 | |||||||||||||
| September 30, 2024 | ||||||||||||||||
| Beginning assets under management | $ | 112,584 |
|
$ | 5,440 |
|
$ | 50,657 |
|
$ | 168,681 |
|
||||
| Gross client cash inflows | 3,553 |
|
992 |
|
1,575 |
|
6,120 |
|
||||||||
| Gross client cash outflows | (5,526 |
) |
(158 |
) |
(3,073 |
) |
(8,756 |
) |
||||||||
| Net client cash flows | (1,973 |
) |
834 |
|
(1,498 |
) |
(2,636 |
) |
||||||||
| Market appreciation (depreciation) | 6,443 |
|
426 |
|
3,208 |
|
10,076 |
|
||||||||
| Realizations and distributions | — |
|
— |
|
(2 |
) |
(2 |
) |
||||||||
| Acquired assets / Net transfers | (10 |
) |
(7 |
) |
10 |
|
(7 |
) |
||||||||
| Ending assets under management | $ | 117,044 |
|
$ | 6,694 |
|
$ | 52,375 |
|
$ | 176,113 |
|
||||
| June 30, 2024 | ||||||||||||||||
| Beginning assets under management | $ | 113,897 |
|
$ | 5,229 |
|
$ | 51,217 |
|
$ | 170,342 |
|
||||
| Gross client cash inflows | 3,553 |
|
480 |
|
2,034 |
|
6,067 |
|
||||||||
| Gross client cash outflows | (5,061 |
) |
(178 |
) |
(2,573 |
) |
(7,812 |
) |
||||||||
| Net client cash flows | (1,508 |
) |
302 |
|
(539 |
) |
(1,744 |
) |
||||||||
| Market appreciation (depreciation) | 385 |
|
(91 |
) |
(211 |
) |
83 |
|
||||||||
| Realizations and distributions | — |
|
— |
|
— |
|
— |
|
||||||||
| Acquired assets / Net transfers | (190 |
) |
— |
|
190 |
|
(1 |
) |
||||||||
| Ending assets under management | $ | 112,584 |
|
$ | 5,440 |
|
$ | 50,657 |
|
$ | 168,681 |
|
||||
| September 30, 2023 | ||||||||||||||||
| Beginning assets under management | $ | 105,916 |
|
$ | 5,193 |
|
$ | 46,052 |
|
$ | 157,161 |
|
||||
| Gross client cash inflows | 3,283 |
|
232 |
|
1,633 |
|
5,149 |
|
||||||||
| Gross client cash outflows | (5,119 |
) |
(557 |
) |
(1,492 |
) |
(7,168 |
) |
||||||||
| Net client cash flows | (1,836 |
) |
(324 |
) |
141 |
|
(2,019 |
) |
||||||||
| Market appreciation (depreciation) | (2,925 |
) |
(165 |
) |
(1,665 |
) |
(4,755 |
) |
||||||||
| Realizations and distributions | — |
|
— |
|
— |
|
— |
|
||||||||
| Acquired assets / Net transfers | (17 |
) |
6 |
|
(1,497 |
) |
(1,508 |
) |
||||||||
| Ending assets under management | $ | 101,138 |
|
$ | 4,710 |
|
$ | 43,031 |
|
$ | 148,879 |
|
||||
1 Includes institutional and retail share classes, money market and VIP funds. |
||||||||||||||||
2 Represents only ETF assets held by third parties. Excludes ETF assets held by other Victory Capital products. |
||||||||||||||||
3 Includes collective trust funds, wrap program accounts, UMAs, UCITS, private funds and non-U.S. domiciled pooled vehicles. |
||||||||||||||||
4 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. |
||||||||||||||||
Victory Capital Holdings, Inc. and Subsidiaries Assets Under Management by Vehicle (unaudited; in millions) |
||||||||||||||||
| For the Nine Months Ended | By Vehicle | |||||||||||||||
| Separate | ||||||||||||||||
| Accounts | ||||||||||||||||
| Mutual | and Other | |||||||||||||||
| Funds1 | ETFs2 | Vehicles3 | Total | |||||||||||||
| September 30, 2024 | ||||||||||||||||
| Beginning assets under management | $ | 108,802 |
|
$ | 4,970 |
|
$ | 47,551 |
|
$ | 161,322 |
|
||||
| Gross client cash inflows | 11,409 |
|
1,923 |
|
6,043 |
|
19,375 |
|
||||||||
| Gross client cash outflows | (16,543 |
) |
(785 |
) |
(7,555 |
) |
(24,882 |
) |
||||||||
| Net client cash flows | (5,134 |
) |
1,138 |
|
(1,512 |
) |
(5,508 |
) |
||||||||
| Market appreciation (depreciation) | 13,624 |
|
550 |
|
6,164 |
|
20,337 |
|
||||||||
| Realizations and distributions | — |
|
— |
|
(2 |
) |
(2 |
) |
||||||||
| Acquired assets / Net transfers | (248 |
) |
36 |
|
174 |
|
(38 |
) |
||||||||
| Ending assets under management | $ | 117,044 |
|
$ | 6,694 |
|
$ | 52,375 |
|
$ | 176,113 |
|
||||
| September 30, 2023 | ||||||||||||||||
| Beginning assets under management | $ | 99,447 |
|
$ | 5,627 |
|
$ | 42,688 |
|
$ | 147,762 |
|
||||
| Gross client cash inflows | 11,468 |
|
625 |
|
4,866 |
|
16,959 |
|
||||||||
| Gross client cash outflows | (15,388 |
) |
(1,211 |
) |
(4,955 |
) |
(21,554 |
) |
||||||||
| Net client cash flows | (3,921 |
) |
(586 |
) |
(89 |
) |
(4,595 |
) |
||||||||
| Market appreciation (depreciation) | 5,648 |
|
(329 |
) |
2,015 |
|
7,335 |
|
||||||||
| Realizations and distributions | — |
|
— |
|
(73 |
) |
(73 |
) |
||||||||
| Acquired assets / Net transfers4 | (36 |
) |
(3 |
) |
(1,511 |
) |
(1,549 |
) |
||||||||
| Ending assets under management | $ | 101,138 |
|
$ | 4,710 |
|
$ | 43,031 |
|
$ | 148,879 |
|
||||
1 Includes institutional and retail share classes, money market and VIP funds. |
||||||||||||||||
2 Represents only ETF assets held by third parties. Excludes ETF assets held by other Victory Capital products. |
||||||||||||||||
3 Includes collective trust funds, wrap program accounts, UMAs, UCITS, private funds and non-U.S. domiciled pooled vehicles. |
||||||||||||||||
4 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. |
||||||||||||||||
Information Regarding Non-GAAP Financial Measures
Victory Capital uses non-GAAP financial measures referred to as Adjusted EBITDA and Adjusted Net Income to measure the operating profitability of the Company. These measures eliminate the impact of one-time acquisition, restructuring and integration costs and demonstrate the ongoing operating earnings metrics of the Company. The Company has included these non-GAAP measures to provide investors with the same financial metrics used by management to assess the operating performance of the Company.
Adjusted EBITDA
Adjustments made to GAAP Net Income to calculate Adjusted EBITDA, as applicable, are:
- Adding back income tax expense;
- Adding back interest paid on debt and other financing costs, net of interest income;
- Adding back depreciation on property and equipment;
- Adding back other business taxes;
- Adding back amortization expense on acquisition-related intangible assets;
- Adding back stock-based compensation expense associated with equity awards issued from pools created in connection with the management-led buyout and various acquisitions and as a result of equity grants related to the IPO;
- Adding back direct incremental costs of acquisitions, including restructuring costs;
- Adding back debt issuance cost expense;
- Adjusting for earnings/losses on equity method investments.
Adjusted Net Income
Adjustments made to GAAP Net Income to calculate Adjusted Net Income, as applicable, are:
- Adding back other business taxes;
- Adding back amortization expense on acquisition-related intangible assets;
- Adding back stock-based compensation expense associated with equity awards issued from pools created in connection with the management-led buyout and various acquisitions and as a result of any equity grants related to the IPO;
- Adding back direct incremental costs of acquisitions, including restructuring costs;
- Adding back debt issuance cost expense;
- Subtracting an estimate of income tax expense applied to the sum of the adjustments above.
Tax Benefit of Goodwill and Acquired Intangible Assets
Due to Victory Capital’s acquisitive nature, tax deductions allowed on acquired intangible assets and goodwill provide it with additional significant supplemental economic benefit. The tax benefit of goodwill and intangible assets represent the tax benefits associated with deductions allowed for intangible assets and goodwill generated from prior acquisitions in which the Company received a step-up in basis for tax purposes. Acquired intangible assets and goodwill may be amortized for tax purposes, generally over a 15-year period. The tax benefit from amortization on these assets is included to show the full economic benefit of deductions for all acquired intangible assets with a step-up in tax basis.
