Latest news with #DavidBrown
BBC News
13 hours ago
- General
- BBC News
National Trust completes Purbeck coastline 'jigsaw'
A narrow strip of land has been acquired by the National Trust, completing its ownership of a stretch of the Dorset trust said the 26.3 ha (65 acres) strip was the "last piece of the jigsaw" of the land it manages between Worth Matravers and Durlston Country Park on the Isle of said it would allow nature restoration and improve access for walkers along its 5.5-mile (9km) stretch of coastline, part of the Jurassic Coast Unesco World Heritage steeply sloping ground is already designated as a Site of Special Scientific Interest (SSSI) for the importance of its wildlife-rich grassland. However three fields inland have been more intensively managed and currently have less value for trust said filling the gap would encourage wildlife to spread, including rare wildflowers like early spider orchids and butterflies like the Lulworth skipper and Adonis Brown, lead ecologist for the National Trust, said the chance to acquire the land was a "fantastic, not-to-be-missed opportunity".He said: "These fields are where we can really make a difference. The land will still be farmed, but in a more nature-friendly way. "With appropriate management – like stopping chemical inputs and introducing a conservation grazing regime – we can restore the wildlife that's missing."The trust said it also planned to improve the area for walkers, including widening the South West Coast Path to make it safer. The acquisition was funded through legacies to the trust's coastal campaign, Enterprise Neptune, over the past 60 years. The appeal began after a coastline survey in Purbeck by Reading University in has since raised £114m and led to the protection of 900 miles of coastline in England, Wales and Northern John Whittow, who led the national coastline survey, said: "It was imperative that a pilot survey should take place to acquaint my 30 students, post-grads and staff from Reading University with my newly devised methodology. "What better place than Dorset's Purbeck coast which we 'invaded' in May 1965."The trust said it planned to declare the section of the coast as inalienable, meaning it would be protected forever. You can follow BBC Dorset on Facebook, X (Twitter), or Instagram.
Associated Press
3 days ago
- Business
- Associated Press
Brighter Days Celebrates Four Years of Delivering Exceptional Support to Individuals with Intellectual Disabilities
06/06/2025, Gibsonia, Pennsylvania // PRODIGY: Feature Story // Brighter Days, a provider of in-home and community-based services for individuals with intellectual disabilities, commemorates its fourth anniversary. Founded with a mission to deliver relationship-centered support to a population typically underserved by traditional providers, it has spent nearly the last half-decade improving lives through meaningful connection, purposeful care, and persistent commitment to inclusion. 'This company started as an idea from frustration with the lack of quality care and the impersonal way services were being delivered,' David Brown, founder and CEO of Brighter Days, says. 'I wanted to build something better, and I poured every ounce of passion, experience, and energy I had into creating an agency that truly puts people first. Four years later, I'm proud of what we've accomplished, but even more grateful for the relationships we've built.' Brown drew on years of experience as a behavior specialist, program manager, and direct support professional, as well as a business degree from a top-ranked university, to create a service provider that combines professional excellence and a community-rooted approach. Brighter Days' services are designed to empower individuals in home and community settings. Through tailored In-Home and Community Support services, clients receive help with daily needs and personal goals. Meanwhile, its Community Participation Support offers meaningful opportunities for community engagement and social inclusion. The company has also become known for offering unique and impactful social groups. These gatherings are bridges to lasting friendships, romantic relationships, and a sense of belonging. For individuals with intellectual disabilities who might face isolation due to structural and social barriers, these relationships can be life-changing. Brighter Days understands that true support goes beyond logistics. It's about human connection. Within its first year, Brighter Days experienced exponential growth. That early momentum reflected the trust that families and referral partners quickly placed in the company's values and vision. By the second year, Brighter Days had already established itself as a reliable partner in the lives of a significant number of individuals and their families. These are the clients who had previously struggled to find the right fit and who finally felt seen, heard, and supported. Brighter Days never lost its small-agency feel despite its rapid growth. Brown made a conscious choice early on to resist the common pitfalls of scaling, such as diluted services, impersonal care, and staff burnout. 'We doubled down on what made our organization special: meaningful relationships, high-touch service, and community-first thinking,' says Brown. 'We personally reassured clients who were concerned about being 'just another number.' That commitment has endured across county lines and service areas. 'One family told us they were shocked after learning how much our company expanded because, to them, it still felt like they were one of the only families being served,' the founder says. That, Brown says, is by design. Key to this integrity has been Brighter Days' approach to staffing. When many providers were struggling to hire during the post-COVID labor crunch, Brighter Days stood out by offering what was then an industry-leading wage. This forward-thinking strategy attracted the right applicants: people who love this work, who believe in the mission, and who treat their clients with the same care and respect they would show their own families. 'Quality care starts with quality staff, and that means investing in them accordingly,' Brown says. Brighter Days' vision is ambitious yet grounded. Brown emphasizes that growth isn't about chasing numbers or profits. It's about meeting real needs with real integrity. He states: 'There are so many people across this country who deserve genuine, high-quality, relationship-based care. We'll continue to offer exactly that.' Media Contact Name: David Brown Email: [email protected]
Yahoo
10-05-2025
- Business
- Yahoo
Q1 2025 Victory Capital Holdings Inc Earnings Call
Matthew Dennis; Chief of Staff, Director, Investor Relations; Victory Capital Holdings Inc David Brown; Chairman of the Board, Chief Executive Officer; Victory Capital Holdings Inc Michael Policarpo; President, Chief Financial Officer, Chief Administrative Officer; Victory Capital Holdings Inc Michael Cho; Analyst; J.P. Morgan Securities LLC Alexander Blostein; Analyst; Goldman Sachs Randy Binner; Analyst; B. Riley Michael Cyprys; Analyst; Morgan Stanley Kenneth Lee; Analyst; RBC Capital Markets Operator Good morning, and welcome to the Victory Capital first-quarter 2025 earnings conference call. (Operator Instructions) Following the company's prepared remarks, there will be a question-and-answer session. I will now turn the call over to Mr. Matthew Dennis, Chief of Staff and Director of Investor Relations. Please go ahead, Mr. Dennis. Matthew Dennis Thank you. Before I turn the call over to David Brown, I would like to remind you that during today's conference call, we may make a number of forward-looking statements. Victory Capital's actual results may differ materially from these statements. Please refer to our SEC filings for a list of some of the risk factors that may cause actual results to differ materially from those expressed on today's call. Victory Capital assumes no duty and does not undertake any obligation to update any forward-looking press release, which was issued after the market closed yesterday, disclose both GAAP and non-GAAP financial results. We believe the non-GAAP measures enhance the understanding of our business and our performance. Reconciliations between these non-GAAP measures and the most comparable GAAP measures are included in tables that can be found in our earnings press release and in the slides accompanying this call, both of which are available on the Investor Relations section of our website at is now my pleasure to turn the call over to David Brown, Chairman and CEO. David? David Brown Thanks, Matt. Good morning, and welcome to Victory Capital's first-quarter 2025 earnings call. I'm joined today by Michael Policarpo, our President, Chief Financial and Administrative Officer; as well as Matt Dennis, our Chief of Staff and Director of Investor Relations. I will start today with an overview of our first quarter results, then I'll provide an update regarding the closing and integration of the Amundi transaction. After that, I will turn the call over to Mike to review the financial results in greater detail. Following our prepared remarks, Mike, Matt and I will be available to answer your quarterly business overview begins on slide 5. We ended March with $171 billion of total client assets. That was down slightly from the start of the year. and average AUM was approximately 1% lower versus the fourth quarter. Gross sales improved for a third consecutive quarter and increased 41% from the last quarter, reaching $9.3 billion and with the highest level of quarterly gross sales in three years. Long-term net flows also improved for the second quarter in a row. Our net flows were negatively impacted by two large redemptions that totaled $2.7 billion, which were onetime in this, our net flows would have flipped to positive this quarter. We view the underlying activity around flows as extremely healthy and believe these two redemptions should not distort the continuous progress we are making around our organic growth profile. A good example of this progress is we continue to generate strong sales of our ETFs. We highlighted the history of our ETF platform on our last call. And by the end of the first quarter, our total ETF AUM increased to more than $13 billion. This was a 28% increase during the quarter and was up 67% versus the same time last ahead, we see the momentum continuing with our current product lineup. We also have several ETF launches planned for 2025 and are continuing to invest in resources dedicated to accelerating momentum on this platform. Stepping back and looking at results on a year-over-year basis, we achieved wider margins along with higher revenue and earnings on both a GAAP and non-GAAP earnings per diluted share with tax benefit was $1.36 per share, which was the second highest quarterly EPS in company history and a record high for any first quarter period. Adjusted EBITDA was $116 million and adjusted EBITDA margin remained very strong at 53%. We continue to strategically invest in all distribution channels. With our enhanced scale as a result of the Amundi acquisition, we are increasing investments in areas to enhance our organic addition to more salespeople in the field selling, we are significantly increasing our investment in data, technology, marketing and intermediary partnerships. Our balance sheet continued to strengthen during the quarter, and our leverage ratio improved significantly following the transactions closing on April 1, given that we brought on a sizable amount of earnings with no additional debt. This greatly increases our financial flexibility and enables us to act on additional strategic growth opportunities, which we believe is the best use of shareholder diligence activities are progressing quickly, and we are very encouraged by some of our discussions. During the quarter, we accumulated cash, increased our quarterly dividend again and have the entire $200 million share repurchase plan still available for our use, which we will execute on in an opportunistic slide 7, we highlight the results of our acquisition and strategic partnership with Amundi. Upon closing, we are much more scaled, diversified and better positioned organization for the long term. With assets of just over $286 billion as of April 1, our fixed income AUM doubled as a percentage of our total assets from 14% to 28%. We have also further diversified our investment vehicles with $26.5 billion of assets under management and usage. We plan to launch several vintage Victory strategies in this vehicle wrapper that are designed to be distributed to investors outside of the proportion of retail assets under management in our channel mix rose, and we also now have $44 billion of assets under management sourced from clients outside of the US, representing 15% of assets under management compared with less than 5% month, we increased our net expense synergy projections to a total of $110 million and had $50 million of that goal achieved as of closing. We expect another $50 million by April 1, 2026, and much of that coming before the end of 2025. The Amundi US business we acquired has continued to perform exceptionally well, generating positive net long-term flows of $1.7 billion in the first quarter of 2025, which, as a reminder, is not included in our numbers given we did not close the transaction until April investment team, now branded Pioneer Investments generated excellent investment performance on behalf of clients for the first quarter of 2025. As of March 31, more than 74% of their mutual fund assets under management at either a 4- or 5-star Morningstar to slide 8. Our US distribution organization is positioned well for consistent organic growth as we move forward. We have substantially augmented our institutional and intermediary sales forces with additional sales professionals allowing us to provide enhanced coverage across the US addition, we have added marketing and other sales-related resources to further support growth. When it comes to data, we are now able to benefit more broadly from data investments we are making. These investments will now be used by a larger sales force, enhancing the results we are seeking to achieve. We are also leveraging existing intermediary platform relationships with our broader product set. For example, Amundi US had partner status relationships with certain intermediary platforms and we are now a benefactor of those, which will give us the opportunity to add vintage Victory products on these of the US, we now have clients in more than 60 countries and our strategies are currently available for sale via Amundi's vast global distribution network. This includes sizable distribution partners within Europe and JVs in Asia and India. During the closing process, together with Amundi's distribution team, we identified several initial vintage Victory products to launch in the UCITS format and other vehicle wrappers for sale via Amundi's Global Distribution sales force outside of the US. We are expeditiously working through the regulatory and registration process to get these products addition, we are utilizing our VictoryShares ETF platform to develop ETFs for the Pioneer Investment franchise. As many of you are aware, Pioneer has never had any of their strategies available in an ETF vehicle. Overall, we have never been so well positioned for organic growth and look forward to reporting on our to slide 10. Our investment performance remained strong with 67% of our assets under management in mutual funds and ETFs, earning 4- or 5-star overall ratings by Morningstar for the period ending on March 31. This is broadly diversified, encompassing numerous distinct products. Over the key three- and five-year periods, 64% and 65% and of our total assets under management outperformed their respective were also recognized during the first quarter with eight 2025 US LSEG Lipper Fund Award based on risk-adjusted returns. These awards represented several categories and performance over various time periods and are a testament to our investment professionals and what we strive to deliver for clients every that, I will turn the call over to Mike to go through the quarterly results in greater detail. Mike? Michael Policarpo Thanks, Dave, and good morning, everyone. The financial results review begins on slide for the first quarter came in at $219.6 million, which was down approximately 5% from the fourth quarter as a result of slightly lower average AUM, fewer days in the quarter as well as product, vehicle and channel mix shift. Year-over-year, revenue, earnings, adjusted EBITDA and adjusted EBITDA margin were all higher in this year's first quarter versus last net income with tax benefit per diluted share of $1.36 achieved in the quarter was our second highest of all time. We ended March with $176 million in cash, which was up $49 million from year-end. At quarter end, our net leverage ratio was unchanged at 1.7 times. During the first quarter, we returned $39 million to shareholders. Additionally, the Board authorized a cash dividend increase to $0.49 per share payable on June 25 to shareholders of record at the close of business on June would like to note here that going forward, we will continue to review our dividend every quarter with our Board, but anticipate moving back to an annual increase cycle with our first quarter results. As expected, during April, sufficient consents were received from Pioneer clients, resulting in a post-closing adjustment whereby we will issue an additional 5.4 million shares to Amundi. This will bring their total diluted equity interest up to 26.1% with a 4.9% voting interest. Owing to the transaction, our diluted share count will increase to approximately 88.3 million to slide 13. Total client assets declined by less than 3% during the quarter, driven primarily by market action. Our AUM continues to be diversified from both a distribution channel perspective, as well as by investor type within each channel and by asset class and investment vehicle. As mentioned on a prior call and beginning next quarter, we will add a new category to this chart to illustrate the non-US client portion of our total a result of the Amundi transaction, we began the second quarter with $44 billion of AUM from clients outside of the US. Having a significant portion of AUM from investors outside the US provides another dimension of diversification for our slide 14, we cover long-term asset flows. 2025 is off to a strong start. Gross flows were higher during the quarter, increasing by 41% over the prior quarter and 33% from Q1 2024. RS Global and Victory Income Investors have seen strong activity given their strong investment performance and asset classes they invest are continuing to see great investor interest in our ETFs, which are active and rules based and carry an active-type investment advisory fee for such products and also have strong margins. Through mid-March, we were net flow positive for the quarter. We had two large redemptions totaling approximately $2.7 billion that more than offset the positive net flows up to that these onetime items, our underlying positive flow momentum is strong, and these redemptions should not take away from that point. We are encouraged by the trajectory we are on, particularly given our newly enlarged sales force and the added resources we are dedicating to distribution efforts while also adding the Pioneer franchise products to our one but not yet funded pipeline remains sizable indeed from a product, franchise and channel perspective. Finally, Pioneer Investments products generated positive long-term net flows of $1.7 billion during the first quarter, and that momentum has 15 shows the sequential revenue over the past four quarters. Our average fee rate was 51.2 basis points in the period. This is within our expected range but the decrease from prior quarter primarily attributed to product, vehicle and channel mix shift. Additionally, lower average AUM from negative market action in the first quarter and two fewer days in the quarter also impacted total revenue. Keep in mind, as an organization, our focus is on margins, while our fee rate will fluctuate from slide 16, we detail our expenses for the quarter. Total GAAP expenses were $138.6 million in the first quarter. The uptick in GAAP expenses is due to higher acquisition, restructuring and integration costs from the Amundi transaction. which were offset by lower distribution and other AUM-based expenses, which calibrated with lower average AUM for the quarter. On a cash basis, our compensation expense was 24.3%, which is in line with our guidance and is inclusive of seasonally higher payroll tax and employee benefits that reset at the start of each slide 17, we highlight our non-GAAP metrics. We reported $1.36 adjusted net income with tax benefit per diluted share. Adjusted EBITDA and adjusted EBITDA margin were $116.4 million and 53%, respectively. These results include the impact of accelerated payroll tax and benefits that are typical for the first quarter. And I would highlight our EBITDA margin expanded 90 basis points from the first quarter of the next several quarters, we expect to see our adjusted EBITDA margins decline slightly from its current level as we continue with our integration work and achieve our full net expense synergy target of $110 million. Once fully integrated, we anticipate no change in our long-term guidance of 49% turning to slide 18. We generated $81 million in cash from operations during the quarter, and our net leverage ratio remained steady at 1.7 times. We have positioned the balance sheet well as we enter Q2. We ended the period with $176 million of cash and post the Amundi transaction on April 1, our leverage ratio is in the low expense declined for the second consecutive quarter as our interest rate declined to 4.9% inclusive of the benefit from the interest rate hedge we crystallized in the fourth quarter of 2023. In the first quarter of 2024, our interest rate was above 6% so we have seen our quarterly interest expense decline by more than $3 million in the past year. Our $100 million credit facility remains concludes our prepared remarks. I will now turn it over to the operator for questions. Operator (Operator Instructions)Ken Worthington, JPMorgan. Michael Cho Hi. Good morning, guys. This is Michael Cho in for Ken. Thanks for taking my questions. I just wanted to start on kind of the top line here. You called out the development of a number of UCITS and to distribute Victory's strategy outside the US and you also talked about maybe considering Pioneer EPS going forward as well. And so I was hoping you can maybe touch on maybe the pace of these prospective rollouts and maybe the prioritization, if any, of the product lineup that you see out there. And if there's any strategy that you think might have more considerable adoption than maybe some of the others. Thanks. Michael Policarpo Hey, Michael. Good morning, how are you? It's Mike. Thanks for the question. Yes, I think as we said in the prepared remarks, we have been working with the distribution force at Amundi from a global perspective to identify products that are vintage victory that we think will have success outside the US. And we've spent time with them, formulating kind of a plan with respect to the product development. There'll be a handful of UCITS that we will work with them to create and they're kind of in that registration phase right now and would expect that they'll be launched towards the back half of as we think about the opportunity from which products, really, if you look at the product set that Victory has and some of the opportunities that weren't fulfilled, if you will, by the existing Pioneer product set, there's some small and mid-cap products from a US domestic perspective that we think will play very well addition, we've got some complementary fixed income offerings that, again, we think will play very nicely in the UCITS offerings for Amundi. And then there's also some pretty strong performers that we have in the global equity space that, again, we think will play very nicely in the UCITS offerings outside the US. And so what we've done over the last several months is really work on education of the Victory story, education of some of those products and franchises that manage those existing offerings here in the US and working to develop that rollout plan from a regulatory perspective to create those addition, all of our products, all the vintage Victory products are available institutionally outside the US. And again, we're working on education of the Amundi global distribution sales force. Those products are available today. There's no structure needed for a large institutional client to access those. And we've had a number of conversations really across both the existing active products that we have and some of the ETF so we'll see momentum there as well as we move forward through 2025 and are excited about the opportunity set from the feedback that we've heard to date. So again, we're just getting going on that. But again, as we think about it, we see a tremendous opportunity in the back half of 2025 as those structured products or co-mingled vehicles are created and as we see momentum on the institutional side of the business. Michael Cho Great. Thanks, Mike. Appreciate all that color. If I could just follow up on the -- just on the margin and expense side. I mean, Victory's margin trajectory has been solid for some time now. And you noticed some initial margin headwind from Pioneer, but you also increased synergy targets and you just printed 63% so I recognize you made a little bit of a comment during the prepared remarks on near-term margins. But just curious how you might flesh out a little bit more color in terms of how that trajectory might evolve near term relative to Victory's 49% long-term margin target. Thanks. Michael Policarpo That's a good question, and thanks for recognizing the prepared remarks on that. I think you're right. We did publish 53% margins here in the first quarter. We have not changed our long-term margin guidance of 49%. I think we have continued to say that we want to have the flexibility to make investments in the M&A transaction that we did with Amundi US really provides a significant opportunity to make some of those investments. And so the net expense synergies of $110 million that we referenced and confirmed really includes some additional investments that we want to make. Dave highlighted a number of areas in distribution that we're making investments, and we think those will pay off longer as we think about the margin profile going forward, the expense synergies will take a year to two years to recognize all $110 million. We mentioned we had about $50 million as of closing. We'll have another $30 million over the next six months. Expect $100 million in total in the first 12 months of ownership and then the remaining $10 million to get to $110 million over the two years post close. So if you look logically at some of that math as we phase some of that in, there's going to be some integration work in some different areas over the next several will see a small decline and a material decline in our margins as we work through some of those integration efforts. Again, I think we're still bullish on the 49% long term. As you mentioned, we've produced well above that over the last several quarters. But any decline in the short term until we complete the integration will be immaterial to the margins going forward. Michael Cho Great. Thank you so much. Operator Alexander Blostein, Goldman Sachs. Alexander Blostein Hi. Good morning, guys. Maybe just building on that last question around expense trajectory. You mentioned increased pace of investments. I was hoping you can just provide us with sort of an expense growth algorithm from here with Amundi now in the fold. In the past, I think Victory had a quite a variable expense model. So curious kind of to what extent does integrated money changes that? Kind of what's the mix between fixed and variable expense base from here? And at what pace the fixed fees is likely to grow over time as you kind of phase out some of the synergies? Michael Policarpo Alex, it's Mike. Good question. I think with respect to Victory's operating model, there will be no change. So as we think about the integration of the Pioneer Investments franchise in the Amundi US business, it fits very well into the existing operating Pioneer Investments team will be on a revenue share. We maintain a single operating platform. We maintain a centralized distribution sales force selling all of the product that Victory has. So there really is no change in the operating model for Victory post the completion of the so as you think about the model, we've been pretty clear that greater than two-thirds of our expenses are variable. We expect that to continue as we move forward. There's no disruption in that as we think about how we're operating the business. We've got a highly scaled middle and back office that is a variable cost. We've got distribution and other AUM expenses, again, that are tied to the AUM and revenue of the then the compensation, the cash compensation will continue to be variable as a component of revenue as it has in the past. So we really see no difference in the expense makeup going forward. The scale will obviously increase as the business and the AUM and the revenue have increased, but there really is no significant change from a modeling perspective with greater than two-thirds of the expense being variable and then the other items being fixed components around some of the G&A. Alexander Blostein Okay. Great. And then, Dave, you mentioned the balance sheet capacity has obviously improved significantly with the deal. Your leverage level is quite low and it sounds like the deal pipeline remains quite active. Maybe just give us a bit of a mark-to-market in state of affairs and kind of how your acquisition pipelines have evolved over the last six to nine months since the time you announced the Amundi and also the composition of what's more sort of probable, either in terms of asset classes or size of the transaction. David Brown Sure. Good morning, Alex. Let me start off with capacity to do a transaction. With the close, what we've done is we brought earnings on and we have not brought on additional debt. So our leverage level has reduced quite significantly. We have a lot of cash on our balance sheet, as you can see at the end of the we are in as good a position as we've ever been to really execute on a sizable transaction, and that's by design. Our discussions have been very productive. We are really excited about the opportunities we're seeing. And we are leaning towards larger scaled opportunities to continue to keep our business competitive and be ahead of the curve.I would not be surprised for a 2025 event for us from another acquisition perspective, at least announcing. That's what we're planning for. Our balance sheet is ready for it. Obviously, you can't plan the timing of a transaction. But based on discussions and our capabilities to execute, I would anticipate that something in the short or medium term as opposed to a longer-term perspective, assuming markets are calm and the environment is conducive, which we are encouraged by what we're seeing far as asset classes and what type of acquisitions, we always start off with, does the acquisition make our company better? Does it fit culturally? Does it include investment excellence? So we always lead with those attributes and our future acquisitions will be no different. I think as Mike talked about in the last question that he answered about keeping the integrity of our model around the expense infrastructure, around one integrated company, that's really important to us. We think that's part of what has made our acquisition successful in the past, and we anticipate keeping that model intact. Alexander Blostein Okay, great. Thank you. Operator Randy Binner, B. Riley. Randy Binner Good morning. Thank you. I have a couple that I think kind of get to how the platform with Amundi performs from a kind of growth and flows perspective if markets remain volatile. And so the first one is fixed income and solutions. I think those flows in the first quarter were kind of like kind of flat and then up for solutions. And I can generally expect those categories to do better in volatile markets. So is that the right way to think of it? And can you provide any kind of glimpse or update on how those types of strategies performed in this kind of pretty significant V-shaped market we've had so far since the early April? David Brown So it's Dave. I'd first say, our platform now going forward from a fixed income perspective, given Pioneer's capabilities around fixed income, has expanded. So we now have our Victory Income Investors, fixed income platform, and we have the Pioneer Investments fixed income platform. Both have excellent performance and it really widens and deepens our fixed income capabilities. So in the environment we're in today, I think we are really well positioned to grow our business if you looked at the first quarter for Pioneer, they had positive net flows and a good amount of those were in the fixed income portion of their business. And so we're excited about that given we have a wider and deeper Victory Income Investors has ETFs which sell really well in this environment. And so we continue to have that. And we will look at launching fixed income ETFs for Pioneer as well. So I would imagine that when you think about the fixed income platform for all of Victory, we're very well positioned and better positioned today than we were before the far as solutions, a lot of the growth there you're seeing is through the ETF platform, the VictoryShares ETF platform. We have quite a few different offerings there. Our free cash flow series with a few ETFs have grown very nicely. We also have some other ETFs that are -- have been developed by our solutions team that continues to be in demand. And so when we look at that and we look at that going forward, again, those are really nice solutions for volatile then as markets maybe calm down moving forward, we also have other products off of the solutions platform, off of our equities platform, which we think are really well positioned to satisfy investors' needs. And I think in our prepared remarks, I think there is a tone around an excitement to have a platform to potentially grow organically. We saw some really nice growth in the first quarter, both through Victory and also through Pioneer, and we think that will continue going forward with just a really deep product set, but also an enlarged sales force. Randy Binner Okay. That's great. But just is there any glimpse you can give us on kind of how the stability of those 2 areas with the volatility in April, like did flows hold up better there? Were they more stable than a lot of your equity strategies, equity mutual funds? David Brown I wouldn't say more stable or less stable. I think they've performed as expected. Nothing out of the ordinary. And as I think we look forward, I think investors have been pretty calm during some of the volatile times, at least on our platform. So there's been really nothing out of the ordinary either way. Randy Binner All right. I'll leave it there. Thanks for the time. I appreciate it. Operator Craig Siegenthaler, Bank of America. Good morning. This is Ivory on for Craig. On the call, you mentioned two large redemptions of the $2.7 billion that are onetime in nature and the continued expense synergies that you're seeing. Just on thinking about the other side, have you seen any dis-synergy or notable redemptions from the Amundi US acquisition specifically? Michael Policarpo Good morning, Ivory. Yes, we did denote that there were two. sizable onetime outflows in the first quarter. Those were on the Victory platform we believe very isolated to particular client events. With respect to dis-synergies, no, we've not seen really any dis-synergies. I think as we went through the process and the acquisitions that we do, you have a client consent process. And so all of the clients that have joined as part of Victory have consented, and it's almost a checkpoint for them as you think about we've not seen any dis-synergies from a revenue or a distribution perspective. Actually, quite the opposite. I think as Dave highlighted, we've made more investments in distribution. We've expanded the platform, and we're having more discussions today across the entire product scope in different regions globally in different partners on the intermediary side and in different vehicles that really have driven an opportunity set that we think is, as Dave mentioned, just now as exciting as we've seen. And I think it's definitely very telling that the Pioneer Investments business was net flow we mentioned in the first quarter. So that obviously with knowledge that the transaction was occurring and they were positive in all of 2024 as well. So we think the combined business going forward has resonated well from a market perspective and a client perspective and are excited about the opportunities that lay ahead. Great. Thank you. And just as a follow-up, could you give us an update on WestEnd? The macro backdrop has certainly evolved over the last couple of months. So what are you anticipating for net flows in the business going forward? Michael Policarpo Yeah, good question. So as we mentioned, WestEnd is net flow positive since we've acquired them. They did have some softer performance in 2024. As we look at the first quarter, some of the market dislocation and their positioning has actually allowed their performance to be very strong. And so we're excited as we move the macro backdrop with respect to clients and they're accessing different asset classes right now is a little bit volatile, but their performance has come back very nicely, and we're excited. We are -- continued to be very bullish on the asset classes that they manage, the type of models that they deliver, the access to distribution. I think we've said a number of times, we're doing business now on more platforms with more advisers. So not to project kind of what we think, but we're excited about the opportunity set with the pickup in performance that we've seen with WestEnd. David Brown I would add one thing, Mike, on that is we have -- we've launched additional products off of their platform. So we've launched a number of ETFs, and we've seen growth on their ETFs. And so now if you're looking to access WestEnd, you can access it through their model delivery, but you can also access them through a number of ETFs as well. Thank you. Operator Michael Cyprys, Morgan Stanley. Michael Cyprys Hey, good morning. Thanks for taking the question. You mentioned in your prepared remarks that you're making some investments to enhance organic growth. In particular, you mentioned investments in data, technology, marketing. I was hoping maybe you could elaborate on the steps that you're taking there, the quantum of investments that you're making and how you'll be measuring success. David Brown Hi, Michael, it's Dave. It's a great question. I appreciate you asking it. On the intermediary side for the US, we have added a significant number of salespeople. So think of them as external-facing salespeople, people supporting our external-facing added a sizable number of marketing professionals, of dedicated data professionals. And then we are purchasing more data programs from certain platforms, and we have also increased the number of partnerships, platform partnerships we have from the past. So we have made a pretty significant investment in really intermediary of those numbers are in our net expense synergy numbers. So when you hear the number of $110 million, it's netted into those numbers, all of those investments. We've done -- on a smaller level, we've done the same thing on the US institutional side, where we've added people and client service as well. And then the ultimate judge of our investments are going to be our organic growth want to be in a position where we grow our business organically. And I think we are in as good a position as we've ever been to do that. And these investments that we're making, ultimately, the goal is to have organic growth, pretty simple from that perspective. Michael Cyprys Great. Thanks. And then just a follow-up question. As you've broadened out the platform and have further scaled it, just curious how you're thinking about alternative investment products. How important is that for you as you're thinking about M&A going forward to have that on the platform? I imagine it would be more of an just talk about the pipeline for alternative investment-related acquisitions, how those sort of conversations are progressing, and how you're thinking about some of the puts and takes there as it does add a bit more complexity. Do you feel that the organization, the platform is at a place to accommodate that sort of a product set at this point? David Brown Alternatives are important to us. When we speak with our clients, certain clients at certain levels inquire about it. We have great relationships from an intermediary and institutional perspective. And so over time, we will have those products for our salespeople to deliver to those clients and potentially new clients. Whether we access that through acquisitions or partnerships, we are evaluating.I think there's pros and cons with each structure. But as we think about moving forward in our access from a distribution perspective and how deep we are into the various channels, we will absolutely have an alternatives offerings. And we're going to work through different ways of accomplishing that. And I think there have been a number of acquisitions in the have been a number of partnerships in the industry and we have studied all of them, and we're going to execute in a way that's going to make the most sense for our platform. But when we think about the world going forward and look out, that is a product that we will absolutely be dialoguing and selling to our -- with our clients. Michael Cyprys Okay. Thank you. Operator Kenneth Lee, RBC Capital Markets. Kenneth Lee Hey, good morning. Thanks for taking the question. You mentioned in the prepared remarks around the common dividend, and it sounds as if it's going to be a slight change in terms of more of an annual review instead of a quarterly review. Wondering if you could just remind us again, you've been increasing the dividend at a pretty good clip more recently. What's driving the change there? And then perhaps could you give us an update, if there is any, in terms of longer-term priorities around capital deployment? Thanks. David Brown It's Dave. Let me start with the back end of that question. Our best use of capital, we think, to grow the business is really to think about capital from an acquisition perspective. So we want to make sure that we can execute on our strategic plan of growing through acquisitions, and we want to make sure that our balance sheet accommodates that. So we start I think as our business has grown over the years, we have also been able to balance that along with an equity buyback program and also a dividend. And so I would look at dividends and our buyback program as ancillary, but our ability to execute on them in a larger way is really a reward for us growing our business. So we'll continue to have that same viewpoint of then from a dividend perspective, we have -- over the last three years, we have gone from an annual -- an anticipated annual increase to more quarterly increases just to be more opportunistic as our business has evolved as we've done acquisitions. I think as we think about going forward, we'll look at it every quarter, but the anticipation is that we will increase once a doesn't stop us from doing it quarterly. It's just really the guide to say that this is how we're going to look at it. But if you really take a step back, we are going to, first and foremost, make sure that we can execute on inorganic growth through our balance sheet, through our cash then secondarily, it will be buybacks and dividends. But with the way our business looks and the cash flow that we anticipate and the margins we have and our earnings potential, we think we can satisfy the dividend and the buyback pretty nicely and balance all that out. Kenneth Lee Great. Very helpful there. Just one follow-up, if I may. In terms of the Victory ETF net flows in the quarter, very solid. I wonder if you could talk a little bit more about the cadence of newer ETF products that are expected to be launched later on this year. David Brown Sure. We have had really nice growth for the last few quarters on our ETF platform. We have launched a number of products over the last few years, and they have worked. And we have plans and are in the process of launching additional ETFs. We'll also launch ETFs off of the Pioneer platform in the we have a -- we have our entire US intermediary sales force can sell ETFs, but we also have a portion of our sales force that only sells ETFs. And we have a group that also trains on our ETFs. So we're well armed in the field. I think we have a really nice diversified existing ETF product set, and we'll continue to expand we think it's going to be an area for our business that's going to see accelerated growth. And so we will evaluate where we think the market is going from an ETF perspective and launch products to satisfy that. But I think our existing lineup today is pretty wholesome and has done pretty well, and I don't see that changing going forward. Kenneth Lee Great. Very helpful. Thanks again. Operator I will now turn the call back over to David Brown for closing remarks. David Brown Thank you. We hope to see you next month when we'll be attending the Morgan Stanley US Financials Conference in New York and look forward to keeping you updated on our progress. Again, thank you for joining us this morning. Operator Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
Time of India
09-05-2025
- Business
- Time of India
SMR nuclear pipeline grows 42% to 47 GW on rising energy demand from data centres, AI
New Delhi: As demand from data centres and artificial intelligence applications accelerates, the global pipeline for small modular reactor (SMR) nuclear projects has grown 42 per cent quarter-on-quarter to reach 47 gigawatts (GW), according to Wood Mackenzie's 'SMR nuclear market update: Q1 2025'. The unrisked pipeline—which includes all announced projects—increased by 14 GW compared to the previous quarter. The power generation segment continues to be the largest end-use category with a 51 per cent share, while data centres have grown to represent 39 per cent of the pipeline. The report estimates that developing the current 47 GW pipeline would require an investment of around USD 360 billion. "The surge in data centre demand has propelled nuclear SMRs to a major player in the future energy mix," said David Brown, director, Energy Transition Research at Wood Mackenzie. 'Nuclear SMRs remain a top priority for the Trump administration and with policy tailwinds, development should accelerate and expand to be a significant source of clean energy.' The United States accounts for 53 per cent of the unrisked pipeline, nearly twice the share of the second-largest market, Poland. Oklo, GE-Hitachi, and X-Energy are the key players, collectively representing nearly 31 GW of pipeline capacity worldwide. Currently, 2.5 GW of SMR capacity is under construction or in development globally, with 1.2 GW located in Canada. The report also highlights that trade tariffs are likely to increase SMR construction costs by approximately 6 per cent by 2030. 'Tariffs on steel and aluminum imports will raise construction costs for new reactors in the United States,' said Brown. 'We expect tariffs to impact costs as projects are built, with the strongest impact from 2028-2035.' Elevated or permanent tariff levels are identified as the most significant risk facing the nuclear sector. The report states that the levelized cost of electricity (LCOE) could increase if enriched uranium imports face a 145 per cent tariff. 'While we understand US utilities have slowed uranium purchases in past six months, eventually the utilities will need to resume imports, and this could increase global spot and term prices for uranium supply,' Brown added.
Business Wire
08-05-2025
- Business
- Business Wire
Victory Capital Reports Strong First Quarter Results
SAN ANTONIO, Texas--(BUSINESS WIRE)--Victory Capital Holdings, Inc. (NASDAQ: VCTR) ('Victory Capital' or 'the Company') today reported financial results for the quarter ended March 31, 2025. 'We are off to a good start in 2025 with positive momentum in a number of important areas of our business,' said David Brown, Chairman and Chief Executive Officer. 'First-quarter financial results came in strong with year-over-year increases in revenue, Adjusted EBITDA, Adjusted EBITDA margin, and earnings per share. Gross sales increased more than 41% from the fourth quarter of 2024, reaching the highest level in three years and net long-term flows improved for the second consecutive quarter. 'Our operating platform, coupled with excellent execution, lets us effectively manage through volatile market environments while maintaining strong margins. This allows us to remain focused on growth and capitalize on opportunities that arise during periods of market dislocation. 'We were pleased to have successfully closed on our multi-faceted transaction with Amundi on April 1. In addition to the increase in size and scale of our business, we have better diversification across numerous areas of our business including asset classes, investment vehicles, and geographies. Furthermore, our US distribution presence has been substantially enhanced allowing us to provide better coverage across both the intermediary and institutional channels. We are also excited about the new client opportunities that the distribution agreement with Amundi will bring us outside the US. Lastly, with an enhanced balance sheet post-closing, we have even more financial flexibility to pursue strategic growth opportunities. 'Investment performance remained strong during the first quarter, with 64%, 65%, and 79% of our AUM outperforming benchmarks over the respective 3-, 5-, and 10-year periods, ending March 31. In addition, at quarter end, more than two-thirds of our Mutual Fund and ETF AUM were rated 4- or 5-stars by Morningstar. 'Our allocation of capital remains focused on strategic growth and enhancing efficiencies. We will also continue to return excess capital to shareholders via share repurchases and dividends. Yesterday, the Board declared an increase in the quarterly cash dividend to a record high of $0.49 per share, which will be payable on June 25, 2025, to holders of record on June 10. 'As always, we continue to focus on serving our clients, which is our top priority.' Total Client Assets includes Total AUM and Other Assets. Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes Other Assets. 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 total AUM and certain GAAP and non-GAAP ('adjusted') financial results. Due to rounding, total AUM values and other amounts in this press release may not add up precisely to the totals provided. For the Three Months Ended March 31, December 31, March 31, 2025 2024 2024 Assets Under Management 1 Ending $ 167,468 $ 171,930 $ 170,342 Average 173,789 175,741 163,533 AUM Long-term Flows 2 Long-term Gross $ 9,309 $ 6,615 $ 6,952 Long-term Net (1,205 ) (1,729 ) (1,028 ) AUM Money Market/Short-term Flows Money Market / Short-term Gross $ 177 $ 178 $ 236 Money Market / Short-term Net (44 ) (140 ) (99 ) AUM Total Flows Total Gross $ 9,486 $ 6,793 $ 7,187 Total Net (1,249 ) (1,870 ) (1,127 ) Consolidated Financial Results (GAAP) Revenue $ 219.6 $ 232.4 $ 215.9 AUM revenue realization (in bps) 51.2 52.5 53.0 Operating expenses 126.7 120.6 131.0 Income from operations 92.9 111.7 84.8 Operating margin 42.3 % 48.1 % 39.3 % Net income 62.0 76.9 55.7 Earnings per diluted share $ 0.96 $ 1.17 $ 0.84 Cash flow from operations 81.1 91.8 68.7 Adjusted Performance Results (Non-GAAP) 3 Adjusted EBITDA $ 116.4 $ 125.5 $ 112.4 Adjusted EBITDA margin 53.0 % 54.0 % 52.1 % Adjusted net income 78.0 85.0 72.6 Tax benefit of goodwill and acquired intangible assets 10.1 10.1 9.7 Adjusted net income with tax benefit 88.1 95.1 82.3 Adjusted net income with tax benefit per diluted share $ 1.36 $ 1.45 $ 1.25 Expand ________________________ 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. Expand AUM, Flows and Investment Performance At March 31, 2025, Victory Capital had total client assets of $171.4 billion, assets under management of $167.5 billion, and other assets of $4.0 billion. Total AUM decreased by $4.5 billion to $167.5 billion at March 31, 2025, compared with $171.9 billion at December 31, 2024. The decrease was due to negative market action of $3.2 billion and net outflows of $1.2 billion. Total gross flows for the first quarter were $9.5 billion, including long-term gross flows of $9.3 billion. As of March 31, 2025, Victory Capital offered 125 investment strategies through its 12 autonomous Investment Franchises and Solutions Platform. The table below presents outperformance against benchmarks by AUM as of March 31, 2025. First Quarter 2025 Compared with Fourth Quarter 2024 Revenue decreased $12.8 million to $219.6 million, in the first quarter, compared with $232.4 million in the fourth quarter, due to a decrease in average total client assets, two less days in the quarter, and a decrease in revenue realization. GAAP operating margin contracted 580 basis points in the first quarter to 42.3%, down from 48.1% in the fourth quarter, due to a $6.6 million increase in acquisition-related costs and a $3.1 million increase in non-cash amounts recorded to the change in fair value of consideration payable for acquisitions. First quarter GAAP net income decreased 19.5% to $62.0 million, down from $76.9 million in the prior quarter. On a per-share basis, GAAP net income decreased 17.9% to $0.96 per diluted share in the first quarter, versus $1.17 per diluted share in the fourth quarter. Adjusted net income with tax benefit decreased 7.4% to $88.1 million, or $1.36 per diluted share, in the first quarter, down from $95.1 million, or $1.45 per diluted share, in the fourth quarter. Adjusted EBITDA decreased $9.1 million to $116.4 million in the first quarter compared to $125.5 million in the fourth quarter. Adjusted EBITDA margin contracted 100 basis points in the first quarter of 2025 to 53.0% compared with 54.0% in the prior quarter primarily due to higher seasonal payroll taxes and benefits. First Quarter 2025 Compared with First Quarter 2024 Revenue for the three months ended March 31, 2025, increased 1.7% to $219.6 million, compared with $215.9 million in the same quarter of 2024. The increase was due to higher average total client assets, partially offset by one less day in the quarter and a decrease in revenue realization. GAAP operating margin was 42.3% in the first quarter, a 300 basis point expansion from 39.3% in the same quarter of 2024. Operating expenses decreased 3.3% to $126.7 million, compared with $131.0 million in the first quarter of 2024. The decrease was primarily due to an $8.8 million decrease in amounts recorded to the change in fair value of consideration payable for acquisitions and a $3.3 million decrease in personnel compensation and benefits expense. Partially offsetting the decrease was a $7.7 million increase in acquisition-related costs. GAAP net income increased 11.3% to $62.0 million, or $0.96 per diluted share, in the first quarter compared with $55.7 million, or $0.84 per diluted share, in the same quarter of 2024. Adjusted net income with tax benefit expanded 7.0% to $88.1 million, or $1.36 per diluted share, in the first quarter, compared with $82.3 million, or $1.25 per diluted share, in the same quarter last year. Adjusted EBITDA increased 3.6% to $116.4 million, compared with $112.4 million in the same quarter of 2024. Year-over-year, adjusted EBITDA margin expanded 90 basis points to 53.0% in the first quarter of 2025, compared with 52.1% in the same quarter last year. Balance Sheet / Capital Management The total debt outstanding as of March 31, 2025 was approximately $972 million and consisted of an existing term loan balance of $625 million and the 2021 Incremental Term Loans balance of $347 million. The Company's Board of Directors approved a regular quarterly cash dividend of $0.49 per share. The dividend is payable on June 25, 2025, to shareholders of record on June 10, 2025. Conference Call, Webcast and Slide Presentation The Company will host a conference call tomorrow morning, May 9, 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 1-800-715-9871 (domestic) or 1-646-307-1963 (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 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 $167.5 billion, and $171.4 billion in total client assets, as of March 31, 2025. 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 12 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 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 and the outlook for Victory Capital's future business and financial performance. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Victory Capital's control and could cause Victory Capital'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 associated with expected benefits of the Amundi transaction, or impact on our business of the Amundi transaction including our ability to achieve 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 Reconciliation of GAAP to Non-GAAP Measures 1 (unaudited; in thousands except per share data and percentages) For the Three Months Ended March 31, December 31, March 31, 2025 2024 2024 Net income (GAAP) $ 61,975 $ 76,939 $ 55,691 Income tax expense (18,426 ) (21,654 ) (16,197 ) Income before income taxes $ 80,401 $ 98,593 $ 71,888 Interest expense 12,521 13,971 15,711 Depreciation 2,168 2,228 2,269 Other business taxes 922 376 369 Amortization of acquisition-related intangible assets 5,264 5,286 5,332 Stock-based compensation 1,053 1,007 1,327 Acquisition, restructuring and exit costs 13,321 3,063 14,705 Debt issuance costs 749 981 755 Adjusted EBITDA $ 116,399 $ 125,505 $ 112,356 Adjusted EBITDA margin 53.0 % 54.0 % 52.1 % Net income (GAAP) $ 61,975 $ 76,939 $ 55,691 Adjustment to reflect the operating performance of the Company Other business taxes 922 376 369 Amortization of acquisition-related intangible assets 5,264 5,286 5,332 Stock-based compensation 1,053 1,007 1,327 Acquisition, restructuring and exit costs 13,321 3,063 14,705 Debt issuance costs 749 981 755 Tax effect of above adjustments (5,327 ) (2,679 ) (5,621 ) Adjusted net income $ 77,957 $ 84,973 $ 72,558 Adjusted net income per diluted share $ 1.20 $ 1.30 $ 1.10 Tax benefit of goodwill and acquired intangible assets $ 10,141 $ 10,141 $ 9,748 Tax benefit of goodwill and acquired intangible assets per diluted share $ 0.16 $ 0.15 $ 0.15 Adjusted net income with tax benefit $ 88,098 $ 95,114 $ 82,306 Adjusted net income with tax benefit per diluted share $ 1.36 $ 1.45 $ 1.25 Expand 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. Expand Victory Capital Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidated Balance Sheets (In thousands, except for shares) December 31, 2024 Assets Cash and cash equivalents $ 175,607 $ 126,731 Receivables 95,823 100,667 Prepaid expenses 8,868 8,634 Investments, at fair value 34,511 35,213 Property and equipment, net 11,124 11,874 Goodwill 981,805 981,805 Other intangible assets, net 1,255,351 1,260,614 Other assets 20,397 22,053 Total assets $ 2,583,486 $ 2,547,591 Liabilities and stockholders' equity Accounts payable and accrued expenses $ 71,064 $ 57,951 Accrued compensation and benefits 42,361 51,648 Consideration payable for acquisition of business 143,300 139,894 Deferred tax liability, net 163,435 157,120 Other liabilities 53,997 55,479 Long-term debt, net 1 964,763 963,862 Total liabilities 1,438,920 1,425,954 Stockholders' equity Common stock, $0.01 par value per share: 2025 - 600,000,000 shares authorized, 84,376,002 shares issued and 63,925,017 shares outstanding; 2024 - 600,000,000 shares authorized, 83,947,949 shares issued and 63,653,212 shares outstanding 844 839 Additional paid-in capital 756,420 752,371 Treasury stock, at cost: 2025 - 20,450,985 shares; 2024 - 20,294,737 shares (584,051 ) (574,856 ) Accumulated other comprehensive income 15,707 18,683 Retained earnings 955,646 924,600 Total stockholders' equity 1,144,566 1,121,637 Total liabilities and stockholders' equity $ 2,583,486 $ 2,547,591 Expand 1 Balances at March 31, 2025 and December 31, 2024 are shown net of unamortized loan discount and debt issuance costs in the amount of $7.4 million and $8.3 million, respectively. The gross amount of the debt outstanding was $972.2 million as of March 31, 2025 and December 31, 2024. Expand Victory Capital Holdings, Inc. and Subsidiaries Total Client Assets (unaudited; in millions) For the Three Months Ended March 31, December 31, March 31, 2025 2024 2024 Beginning AUM $ 171,930 $ 176,113 $ 161,322 Beginning other assets 1 4,165 4,981 5,289 Beginning total client assets 176,096 181,094 166,611 AUM net cash flows (1,249 ) (1,870 ) (1,127 ) Other assets net cash flows (277 ) (675 ) (524 ) Total client assets net cash flows (1,526 ) (2,545 ) (1,651 ) AUM market appreciation (depreciation) (3,172 ) (2,237 ) 10,178 Other assets market appreciation (depreciation) 78 (141 ) 352 Total client assets market appreciation (depreciation) (3,094 ) (2,378 ) 10,529 AUM realizations and distributions (21 ) — — Acquired & divested assets / Net transfers (20 ) (76 ) (31 ) Ending AUM 167,468 171,930 170,342 Ending other assets 3,967 4,165 5,117 Ending total client assets 171,435 176,096 175,459 Average total client assets 2 177,849 180,104 168,865 Expand 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 March 31, 2025, December 31, 2024 and March 31, 2024 total client assets revenue realization was 50.1 basis points, 51.3 basis points and 51.4 basis points, respectively. Expand Victory Capital Holdings, Inc. and Subsidiaries Total Assets Under Management 1 (unaudited; in millions) For the Three Months Ended March 31, December 31, March 31, 2025 2024 2024 Beginning assets under management $ 171,930 $ 176,113 $ 161,322 Gross client cash inflows 9,486 6,793 7,187 Gross client cash outflows (10,736) (8,663) (8,314) Net client cash flows (1,249) (1,870) (1,127) Market appreciation (depreciation) (3,172) (2,237) 10,178 Realizations and distributions (21) — — Acquired & divested assets / Net transfers (20) (76) (31) Ending assets under management 167,468 171,930 170,342 Average assets under management 173,789 175,741 163,533 Expand 1 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. Expand Victory Capital Holdings, Inc. and Subsidiaries Other Assets (Institutional) 1 (unaudited; in millions) For the Three Months March 31, December 31, March 31, 2025 2024 2024 Beginning other assets (institutional) $ 4,165 $ 4,981 $ 5,289 Gross client cash inflows — — — Gross client cash outflows (277 ) (675 ) (524 ) Net client cash flows (277 ) (675 ) (524 ) Market appreciation (depreciation) 78 (141 ) 352 Realizations and distributions — — — Acquired & divested assets / Net transfers — — — Ending other assets (institutional) 3,967 4,165 5,117 Average other assets (institutional) 2 4,060 4,363 5,332 Expand 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 March 31, 2025, December 31, 2024 and March 31, 2024 total other assets (institutional) revenue realization was 3.4 basis points, 3.2 basis points and 3.5 basis points, respectively. Expand Victory Capital Holdings, Inc. and Subsidiaries Total 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 AUM 1 March 31, 2025 Beginning assets under management $ 30,584 $ 14,785 $ 24,402 $ 14,148 $ 19,095 $ 62,593 $ 2,980 $ 168,586 $ 3,344 $ 171,930 Gross client cash inflows 1,098 445 928 82 2,137 4,363 256 9,309 177 9,486 Gross client cash outflows (1,733 ) (847 ) (1,545 ) (469 ) (3,251 ) (2,318 ) (351 ) (10,514 ) (222 ) (10,736 ) Net client cash flows (635 ) (402 ) (617 ) (386 ) (1,114 ) 2,045 (96 ) (1,205 ) (44 ) (1,249 ) Market appreciation (depreciation) (979 ) (1,194 ) 328 (630 ) 396 (1,202 ) 79 (3,202 ) 30 (3,172 ) Realizations and distributions — — — — — — (21 ) (21 ) — (21 ) Acquired assets / Net transfers (6 ) (7 ) 44 (27 ) (44 ) (57 ) 2 (94 ) 75 (20 ) Ending assets under management $ 28,964 $ 13,182 $ 24,157 $ 13,104 $ 18,334 $ 63,378 $ 2,945 $ 164,064 $ 3,404 $ 167,468 December 31, 2024 Beginning assets under management $ 32,333 $ 15,591 $ 25,081 $ 14,239 $ 19,752 $ 62,544 $ 3,178 $ 172,720 $ 3,393 $ 176,113 Gross client cash inflows 1,163 393 987 75 1,535 2,291 170 6,615 178 6,793 Gross client cash outflows (1,881 ) (1,215 ) (1,391 ) (413 ) (1,023 ) (2,037 ) (384 ) (8,344 ) (319 ) (8,663 ) Net client cash flows (718 ) (822 ) (404 ) (338 ) 513 254 (214 ) (1,729 ) (140 ) (1,870 ) Market appreciation (depreciation) (1,008 ) 21 (342 ) 279 (1,143 ) (100 ) 13 (2,279 ) 43 (2,237 ) Realizations and distributions — — — — — — — — — — Acquired assets / Net transfers (24 ) (6 ) 66 (32 ) (26 ) (105 ) 3 (125 ) 48 (76 ) Ending assets under management $ 30,584 $ 14,785 $ 24,402 $ 14,148 $ 19,095 $ 62,593 $ 2,980 $ 168,586 $ 3,344 $ 171,930 March 31, 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 1,371 507 1,298 68 1,090 2,165 452 6,952 236 7,187 Gross client cash outflows (1,845 ) (925 ) (1,367 ) (332 ) (751 ) (2,410 ) (349 ) (7,980 ) (335 ) (8,314 ) Net client cash flows (474 ) (418 ) (69 ) (264 ) 339 (245 ) 103 (1,028 ) (99 ) (1,127 ) Market appreciation (depreciation) 2,795 801 176 1,555 1,133 3,749 (75 ) 10,135 42 10,178 Realizations and distributions — — — — — — — — — — Acquired assets / Net transfers (7 ) (45 ) 18 (31 ) (44 ) 33 5 (69 ) 38 (31 ) Ending assets under management $ 32,918 $ 16,297 $ 24,481 $ 13,895 $ 18,200 $ 57,833 $ 3,465 $ 167,089 $ 3,253 $ 170,342 Expand 1 Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. Expand 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 Funds 1 ETFs 2 Vehicles 3 Total AUM 4 March 31, 2025 Beginning assets under management $ 113,645 $ 7,508 $ 50,777 $ 171,930 Gross client cash inflows 3,323 3,061 3,102 9,486 Gross client cash outflows (6,328 ) (251 ) (4,156 ) (10,736 ) Net client cash flows (3,006 ) 2,810 (1,053 ) (1,249 ) Market appreciation (depreciation) (2,243 ) (50 ) (880 ) (3,172 ) Realizations and distributions — — (21 ) (21 ) Acquired assets / Net transfers (5 ) (15 ) — (20 ) Ending assets under management $ 108,392 $ 10,253 $ 48,823 $ 167,468 December 31, 2024 Beginning assets under management $ 117,044 $ 6,694 $ 52,375 $ 176,113 Gross client cash inflows 3,545 1,167 2,082 6,793 Gross client cash outflows (5,865 ) (130 ) (2,667 ) (8,663 ) Net client cash flows (2,320 ) 1,036 (586 ) (1,870 ) Market appreciation (depreciation) (1,063 ) (146 ) (1,028 ) (2,237 ) Realizations and distributions — — — — Acquired assets / Net transfers (15 ) (76 ) 15 (76 ) Ending assets under management $ 113,645 $ 7,508 $ 50,777 $ 171,930 March 31, 2024 Beginning assets under management $ 108,802 $ 4,970 $ 47,551 $ 161,322 Gross client cash inflows 4,303 451 2,434 7,187 Gross client cash outflows (5,956 ) (449 ) (1,909 ) (8,314 ) Net client cash flows (1,653 ) 2 525 (1,127 ) Market appreciation (depreciation) 6,796 215 3,167 10,178 Realizations and distributions — — — — Acquired assets / Net transfers (48 ) 43 (26 ) (31 ) Ending assets under management $ 113,897 $ 5,229 $ 51,217 $ 170,342 Expand 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. Expand 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.
