Slides
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Fourth Quarter 2024 Earnings Presentation February 7, 2025
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2 This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of Victory Capital (the “Company”) such as continued geopolitical uncertainty including the conflicts in Ukraine and Israel and its effect on our business, operations and financial results going forward, as discussed in Victory Capital’s filings with the SEC, that 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, risks that the conditions to closing will be satisfied for the Amundi transaction 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 Investment Company Act of 1940; 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 presentation 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. Forward Looking Statements
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Agenda Investment Performance Appendix 3 Fourth Quarter 2024 Financial Results Quarterly Business Overview
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Quarterly Business Overview
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Business Overview 5 Q4 2024 Highlights Total client assets of $176.1bn Long-term gross flows of $6.6bn; net flows of -$1.7bn Q4 adjusted earnings per diluted share with tax benefit of $1.45 Adjusted EBITDA of $126MM Adjusted EBITDA margin of 54% Strategic Partnership with Amundi Expected closing by end of Q1 2025 $100MM in annual cost synergies by end of 2nd full year of ownership Realized cost synergies will be front-end loaded with most achieved in year one Integration is tracking as planned Amundi US year-end 2024 business update Strong positive long-term net flows for 2024 across business 61% of fund AUM rated 4/5 stars overall by Morningstar
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6 VictoryShares® - ETF Platform Platform has grown since acquiring business in 2015 Leverage investment expertise across our Investment Franchises and Solutions Platform Use intermediary distribution footprint to continue sales momentum Satisfy investor demand for unique and innovative ETF products Numerous active ETFs providing access to: Fixed Income Equity Additional active ETFs in product development pipeline ETF AUM ($Bn) 0 2 4 6 8 10 12 April 2015: Acquired CEMP with $191MM of ETF AUM January 2025: $11.7bn of AUM (26 ETFs) January 2017: Rebranded Platform to VictoryShares® July 2019: Began Selling Active ETFs
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Long-Term Growth & Capital Allocation Strategy 7 Enhancing Shareholder Value by: Improving platform with every strategic acquisition Evolving product set to drive organic growth Gaining efficiency from integrated platform Executing on inorganic growth strategy Being acquirer of choice for many asset managers Commitment to enhancing balance sheet flexibility Enhancing Balance Sheet Flexibility with: Capital allocation policy that supports growth strategy Strong free cash flow generation Increasing capacity to do additional deals Opportunistic share repurchases Ancillary cash dividend Minimal cap ex, result of operating platform $0.2bn $0.4bn $1.6bn $0 $50 $100 $150 $200 $250 2018 2019 2020 2021 2022 2023 2024 Dividends Share Repurchases Capital Allocation Since IPO Capital Returned to Shareholders Strategic Acquisitions Share Repurchases Dividends ($MM) $864MM Since IPO
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Investment Performance
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47% 59% 73% 79% 1-year period 3-year period 5-year period 10-year period Commitment to Long-Term Investment Performance 45 Total Mutual Funds and ETFs with 4- or 5-Star overall ratings 66% Total Mutual Funds and ETFs AUM with 4- or 5-Star overall ratings 9 53% 58% 58% 65% 1-year period 3-year period 5-year period 10-year period Charts and Morningstar data as of December 31, 2024. AUM outperforming benchmarks Strategies outperforming benchmarks
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Fourth Quarter 2024 Financial Results
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Financial Results 11 Q4 2024 Financial Results Revenue of $232.4MM GAAP Operating Income of $111.7MM GAAP Operating margin of 48.1% GAAP Net Income of $1.17 per diluted share Adjusted EBITDA of $125.5MM Adjusted EBITDA margin of 54.0% Adjusted Net Income with tax benefit of $95.1MM ANI plus tax benefit of $1.45 per diluted share Capital Management Ended the quarter with $126.7MM of cash Returned $132.4MM to shareholders in quarter Increased quarterly cash dividend by 7% to $0.47 per share Board authorized new $200MM share repurchase program
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12 Total Client Assets Q1 '24 Q2 '24 Q3 '24 Q4 '24 Retail Institutional Direct 173.8175.5 176.1181.1 Well-diversified distribution channels and client base Retail Institutional Direct Significant diversification within each channel Total Client Assets at Period End ($Bn)
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Gross Flows Gross Redemptions Net Flows 13 3/31/18 Long-Term AUM Flows Operating Metrics Q1 ’24 Q2 ’24 Q3 ’24 Q4 ’24 Net long-term AUM flows ($MM) -$1,028 -$1,701 -$2,631 -$1,729 Multiple Investment Franchises generated positive long-term net flows for the fourth quarter: Victory Income Investors RS Global VictoryShares And, for FY 2024: Victory Income Investors Integrity NEC RS Global VictoryShares Strong won-not-yet-funded Long-Term AUM Flows ($Bn) 7.0 5.8 5.9 6.6
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14 Revenue Record high quarterly and annual revenue Revenue increased 3% from Q3 Up 13% from Q4 2023 Year-over-year revenue grew 9% in 2024 Operating Metrics Q1 ‘24 Q2 ‘24 Q3 ‘24 Q4 ‘24 Average Total AUM ($Bn) 163.5 167.5 171.9 175.7 Average Fee Rate (bps) 53.0 52.6 52.1 52.5 215.9 219.6 225.6 232.4 $100 $150 $200 $250 Total Revenue ($MM) Average Total AUM excludes assets categorized as Other Assets with a range of fees from 2 to 4 basis points.
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24.6% 23.4% 23.6% 23.8% 0.0% 20. 0% 40. 0% 60. 0% 80. 0% 100.0% 120.0% Expenses ($MM) Q1 ‘24 Q2 ‘24 Q3 ‘24 Q4 ‘24 Cash compensation and payroll taxes 53.1 51.3 53.3 55.3 Acquisition / Transaction related compensation 1.0 0.5 (15.2) - Equity compensation (non-cash) 4.0 3.8 3.7 3.8 Deferred compensation MTM (non-cash) 1.4 0.1 1.4 (0.2) Total Compensation Expenses 59.5 55.7 43.2 58.9 Acquisition, restructuring, and integration expenses (income) 1.5 3.2 5.3 2.8 All other non-personnel operating expenses 70.1 50.2 56.8 59.0 Total Operating Expenses 131.0 109.0 105.3 120.7 Unrealized gain/(loss) on deferred comp plan - offset 1.4 0.1 1.4 (0.2) Total Non-Operating Exp. (inclusive of def comp) 12.9 14.8 12.9 13.2 Total Expenses 144.0 123.8 118.1 133.8 Cash compensation rate consistent and within expected range Interest expense declined $1.8MM from previous quarter 118.1 133.8 144.0 123.8 Compensation Operating Non-Operating Cash compensation, % of revenue Total Expenses ($MM) Preliminary data. For internal use only. 15
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$0. 50 $0. 60 $0. 70 $0. 80 $0. 90 $1. 00 $1. 10 $1. 20 $1. 30 $1. 40 $1. 50 $- $25.0 $50.0 $75.0 $100.0 $125.0 ANI Tax Benefit ANI with tax benefit per diluted share 16 Non-GAAP Metrics 9/30/17 Adjusted measures are non-GAAP financial measures. Reconciliations and explanations of these non- GAAP financial measures are provided at the end of this presentation. Operating Metrics Q1 ‘24 Q2 ’24 Q3 ’24 Q4 ’24 FY 24 Adjusted EBITDA ($MM) 112.4 116.5 121.3 125.5 475.6 Adjusted EBITDA margin (%) 52.1 53.0 53.7 54.0 53.2 $1.25 $1.31 $1.35 86.682.3 95.1 Record quarterly diluted earnings per share of $1.45 2024 vs 2023: Adjusted EBITDA up 14% ANI with Tax Benefit up 15% ANI with Tax Benefit per share up 19% Adjusted EBITDA Margin up 230 bps Highest level of quarterly Adjusted Net Income in the past 11 quarters 14 th straight quarter with margins equal to or above 50% $1.45 89.0 $MM (except per-share data)
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Highlights 16.5 16.3 16.4 14.7 Q1 '24 Q2 '24 Q3 '24 Q4 '24 17 Capital Management ($mm) 9/30/173/31/18 $126.7MM of cash on balance sheet $104.3MM of shares repurchases Paid down $20MM of debt New $200MM share repurchase plan authorization Cash dividend increased by 7% $100MM revolver remains undrawn 1,002 992 992 972 Q1 '24 Q2 '24 Q3 '24 Q4 '24 Debt ($MM) Leverage Ratio 2.1x 1.9x 1.7x 1.7x Q1 '24 Q2 '24 Q3 '24 Q4 '24 Selected Balance Sheet Items Dec 31, 2024 Cash / Cash Equivalents ($MM) 127 Debt ($MM) 972 Stockholders' Equity ($MM) 1,122 Diluted Shares Outstanding (MM) 65.5 Net Debt / Adjusted EBITDA 1.7x GAAP Operating Cash Flow ($MM) 68.7 79.7 99.8 $91.8 Q1 '24 Q2 '24 Q3 '24 Q4 '24 Interest Expense and Other Financing Costs ($MM)
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Appendix
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72 72 72 72 74 74 73 74 73 73 74 74 74 74 74 74 73 72 72 70 69 68 67 66 66 66 66 50 55 60 65 70 75 Diluted Shares outstanding (million) Shareholder Value Creation since IPO $0.05 $0.05 $0.05 $0.05 $0.06 $0.07 $0.09 $0.12 $0.15 $0.17 $0.25 $0.25 $0.25 $0.25 $0.32 $0.32 $0.32 $0.32 $0.34 $0.37 $0.41 $0.44 $0.47 $13.00 $65.46 $- $10. 00 $20. 00 $30. 00 $40. 00 $50. 00 $60. 00 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 Cash Dividends Per Share Stock Price Total Shareholder Return of 479% 19 IPO: Feb 7, 2018 Dec 31, 2024 Impact of Share Repurchases on Shares Outstanding
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25% 30% 35% 40% 45% 50% 55% $0 $20 $40 $60 $80 $100 $120 $140 Growth of Adjusted EBITDA & Margin Expansion 20 54.0% $126 MILLION 37.9% $40 MILLION Quarterly Adjusted EBITDA up 215% Adjusted EBITDA Margin Expanded 1,610 bps Adjusted EBITDA Margin Adjusted EBITDA
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$0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 Growth of Adjusted EPS with Tax Benefit 21 Strong history of EPS growth Quarterly Adjusted EPS with Tax Benefit up 263%
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Ongoing and Future Cash-Tax Benefits Section 338(h)(10) Election • Stepped up cost basis of acquired indefinite lived intangible assets is deductible for corporate income tax purposes over 15 years o $1.6Bn in total future tax amortization o $393MM in future cash tax savings, assuming 25% tax rate o NPV $265MM, discounted at 8%, or >$4.00 per share Future Tax Amortization and Cash Tax Savings ($MM) 22 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Current Tax Amortization Schedule Cash Tax Benefit using 25% Tax Rate
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Notes and Disclosures 23 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. Due to rounding, numbers presented in the following tables may not add up to precisely the totals provided. 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 costs; and • Adjusting for earnings/losses on equity method investments.
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Notes and Disclosures 24 Information Regarding Non-GAAP Financial Measures (cont.) 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 costs; and • 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.
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Consolidated Reconciliations of Adjusted EBITDA 25 For the three months ended, (in thousands except percentages) 12/31/2023 03/31/2024 06/30/2024 09/30/2024 12/31/2024 GAAP Net income $ 55,206 $ 55,691 $ 74,251 $ 81,983 $ 76,939 GAAP Income tax expense (18,316) (16,197) 21,524 (25,517) (21,654) GAAP income before taxes 73,522 71,888 95,775 107,500 98,593 Interest expense 15,532 15,711 15,468 15,649 13,971 Depreciation 2,273 2,269 2,252 2,210 2,228 Other business taxes 305 369 414 366 376 GAAP amortization of acquisition-related intangibles 5,711 5,332 5,299 5,300 5,286 Stock-based compensation 1,503 1,327 940 972 1,007 Acquisition, restructuring and exit costs 5,586 14,705 (4,520) (11,513) 3,063 Debt issuance costs 3,128 755 874 775 981 Adjusted EBITDA $ 107,560 $ 112,356 $ 116,502 $ 121,259 $ 125,505 Revenue $ 205,794 $ 215,857 $ 219,621 $ 225,628 $ 232,368 Adjusted EBITDA Margin 52.3% 52.1% 53.0% 53.7% 54.0%
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Historical Reconciliations of Adjusted EBITDA For the three months ended, (in thousands except percentages) 3/31/2018 6/30/2018 9/30/2018 12/18/2018 3/31/2019 6/30/2019 9/30/2019 12/31/2019 3/31/2020 6/30/2020 9/30/2020 GAAP Net income $ 10,524 $ 18,675 $ 20,590 $ 13,915 $ 14,527 $ 14,383 $ 25,992 $ 37,589 $ 57,166 $ 44,720 $ 55,741 GAAP Income tax expense (3,557) (6,311) (6,562) (4,777) (4,807) (4,478) (8,058) (10,854) (16,823) (14,487) (17,027) GAAP income before taxes 14,081 24,986 27,152 18,692 19,334 18,861 34,050 48,443 73,989 59,207 72,768 Interest expense 8,094 4,229 4,053 3,797 3,853 3,613 18,388 14,852 10,528 8,267 7,497 Depreciation 736 736 775 709 571 612 682 1,130 884 746 814 Other business taxes 375 443 350 337 555 424 146 359 -3,296 219 256 GAAP amortization of acquisition-related intangibles 5,676 5,195 4,799 4,651 4,651 4,651 7,086 4,490 3,166 3,420 3,122 Stock-based compensation 3,322 3,968 4,005 3,943 1,478 3,321 4,326 5,724 5,372 3,068 2,806 Acquisition, restructuring and exit costs 518 560 1,647 3,664 2,777 4,575 24,452 24,947 -1,542 10,105 6,996 Debt issuance costs 6,702 361 373 371 364 366 10,002 2,387 2,389 1,312 1,386 Pre-IPO governance expenses 141 (3) - - - - - - - - - Earnings/losses from equity method investments 137 202 167 224 4 150 (2,837) - - - - Adjusted EBITDA $ 39,782 $ 40,677 $ 43,321 $ 36,388 $ 33,587 $ 36,573 $ 96,295 $ 102,332 $ 91,490 $ 86,344 $ 95,645 Revenue $ 104,964 $ 104,400 $ 108,082 $ 95,967 $ 87,479 $ 91,360 $ 214,980 $ 218,554 $ 204,421 $ 181,886 $ 188,656 Adjusted EBITDA Margin 37.9% 38.9% 40.1% 37.9% 38.40% 40.0% 44.8% 46.8% 44.8% 47.5% 50.7% 12/31/2020 3/31/2021 6/30/2021 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 GAAP Net income $ 54,895 $ 65,202 $ 69,270 $ 74,175 $ 69,742 $ 71,273 $ 79,205 $ 72,764 $ 52,269 $ 49,273 $ 56,671 GAAP Income tax expense (17,681) (17,662) (20,629) (18,181) (15,781) (19,271) (25,790) (12,582) (16,879) (12,597) (17,924) GAAP income before taxes 72,576 82,864 89,899 92,356 85,523 90,544 104,995 85,346 69,148 61,870 74,595 Interest expense 7,432 7,310 6,086 5,561 5,328 8,724 9,499 10,795 12,006 13,482 14,146 Depreciation 1,107 1,246 1,524 1,693 1,746 1,954 2,102 2,030 1,959 1,971 2,296 Other business taxes 265 374 524 376 383 590 541 539 448 384 382 GAAP amortization of acquisition-related intangibles 3,122 3,138 3,171 2,684 3,638 8,656 8,656 8,657 9,191 9,709 7,353 Stock-based compensation 3,774 4,636 3,124 2,851 2,499 2,633 2,860 2,230 2,420 2,004 1,538 Acquisition, restructuring and exit costs 13,904 4,389 6,544 8,425 15,188 -844 -24,033 -7,842 3,997 8,984 2,949 Debt issuance costs 1,459 2,793 1,304 960 532 2,061 1,560 1,064 935 748 756 Pre-IPO governance expenses - - - - - - - - - - - Earnings/losses from equity method investments 193 92 65 70 104 57 9 759 - - - Adjusted EBITDA $ 103,832 $ 106,842 $ 112,241 $ 114,976 $ 114,941 $ 114,375 $ 106,189 $ 103,578 $ 100,104 $ 99,152 $ 104,015 Revenue $ 200,388 $ 212,949 $ 221,904 $ 226,290 $ 229,122 $ 230,019 $ 216,006 $ 207,260 $ 201,515 $ 201,320 $ 204,226 Adjusted EBITDA Margin 51.8% 50.2% 50.6% 50.8% 50.2% 49.7% 49.2% 50.0% 49.7% 49.3% 50.9% 26 9/30/2023 GAAP Net income $ 52,007 GAAP Income tax expense (13,915) GAAP income before taxes 65,922 Interest expense 14,659 Depreciation 2,302 Other business taxes 636 GAAP amortization of acquisition-related intangibles 10,032 Stock-based compensation 1,451 Acquisition, restructuring and exit costs 11,463 Debt issuance costs 762 Pre-IPO governance expenses - Earnings/losses from equity method investments - Adjusted EBITDA $ 107,227 Revenue $ 209,688 Adjusted EBITDA Margin 51.1%
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27 For the three months ended, (in thousands, except per-share data) 12/31/2023 03/31/2024 06/30/2024 09/30/2024 12/31/2024 GAAP Net Income $ 55,206 $ 55,691 $ 74,251 $ 81,983 $ 76,939 Other business taxes 305 369 414 366 376 GAAP amortization of acquisition-related intangibles 5,711 5,332 5,299 5,300 5,286 Stock-based compensation 1,503 1,327 940 972 1,007 Acquisition, restructuring and exit costs 5,586 14,705 (4,520) (11,513) 3,063 Debt issuance costs 3,128 755 874 775 981 Tax effect of above adjustments (4,061) (5,621) (753) 1,025 (2,679) Adjusted Net Income 67,378 72,558 76,505 78,908 84,973 Tax benefit of goodwill and acquired intangibles 9,655 9,748 10,141 10,141 10,141 Adjusted Net Income with Tax Benefit $ 77,033 $ 82,306 $ 86,646 $ 89,049 $ 95,114 Weighted average shares outstanding – diluted 66,935 65,972 66,075 66,057 65,519 Adjusted Net income with Tax Benefit Per Diluted Share $ 1.15 $ 1.25 $ 1.31 $ 1.35 $ 1.45 Consolidated Reconciliations of Adjusted Net Income
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Historical Reconciliations of Adjusted Net Income 28 3/31/2018 6/30/2018 9/30/2018 12/31/2018 3/31/2019 6/30/2019 9/30/2019 12/31/2019 3/31/2020 6/30/2020 9/30/2020 GAAP Net Income $ 10,524 $ 18,675 $ 20,590 $ 13,915 $ 14,527 $ 14,383 $ 25,992 $ 37,589 $ 57,166 $ 44,720 $ 55,741 Other business taxes 375 443 350 337 555 424 146 359 -3296 219 256 GAAP amortization of acquisition-related intangibles 5,676 5,195 4,799 4,651 4,651 4,651 7,086 4,490 3,166 3,420 3,122 Stock-based compensation 3,322 3,968 4,005 3,943 1,478 3,321 4,326 5,724 5,372 3,068 2,806 Acquisition, restructuring and exit costs 518 560 1,647 3,664 2,777 4,575 24,452 24,947 -1,542 10,105 6,996 Debt issuance costs 6,702 361 373 371 364 366 10,002 2,387 2,389 1,312 1,386 Pre-IPO governance expenses 141 -3 - - - - - - - - - Tax effect of above adjustments 4,183 -2,631 -2,794 -3,241 -2,456 -3,334 -11,503 -9,477 -1,522 -4,531 -3,642 Adjusted Net Income 23,075 26,568 28,970 23,640 21,896 24,386 60,501 66,019 61,733 58,313 66,665 Tax benefit of goodwill and acquired intangibles 3,320 3,320 3,318 3,320 3,361 3,361 6,802 6,801 6,728 6,745 6,745 Adjusted Net Income with Tax Benefit $ 26,395 $ 29,888 $ 32,288 $ 26,960 $ 25,257 $ 27,747 $ 67,303 $ 72,820 $ 68,461 $ 65,058 $ 73,410 Weighted average shares outstanding – diluted 66,283 72,135 71,864 71,558 72,282 73,521 73,671 73,856 74,350 73,204 73,437 Adjusted Net income with Tax Benefit Per Diluted Share $ 0.40 $ 0.41 $ 0.45 $ 0.38 $ 0.35 $ 0.38 $ 0.91 $ 0.99 $ 0.92 $ 0.89 $ 1.00 12/31/2020 3/31/2021 6/30/2021 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 GAAP Net Income $ 54,895 $ 65,202 $ 69,270 $ 74,175 $ 69,742 $ 71,273 $ 79,205 $ 72,764 $ 52,269 $ 49,273 $ 56,671 Other business taxes 265 374 524 376 383 590 541 539 448 384 382 GAAP amortization of acquisition-related intangibles 3,122 3,138 3,171 2,684 3,638 8,656 8,656 8,657 9,191 9,709 7,353 Stock-based compensation 3,774 4,636 3,124 2,851 2,499 2,633 2,860 2,230 2,420 2,004 1,538 Acquisition, restructuring and exit costs 13,904 4,389 6,544 8,425 15,188 -844 -24,033 -7,842 3,997 8,984 2,949 Debt issuance costs 1,459 2,793 1,304 960 532 2,061 1,560 1,064 935 748 756 Pre-IPO governance expenses - - - - - - - - - - - Tax effect of above adjustments -5,631 -3,832 -3,667 -3,824 -5,560 -3,274 2,604 -1,163 -4,247 -5,457 -3,244 Adjusted Net Income 71,788 76,700 80,270 85,647 86,422 81,095 71,393 76,249 65,013 65,645 66,405 Tax benefit of goodwill and acquired intangibles 6,774 6,918 6,918 6,918 7,258 9,322 9,327 9,328 9,513 9,524 9,537 Adjusted Net Income with Tax Benefit $ 78,562 $ 83,618 $ 87,188 $ 92,565 $ 93,680 $ 90,417 $ 80,720 $ 85,577 $ 74,526 $ 75,169 $ 75,942 Weighted average shares outstanding – diluted 73,682 74,108 74,166 74,053 73,973 73,652 72,867 71,877 70,685 69,727 68,500 Adjusted Net income with Tax Benefit Per Diluted Share $ 1.07 $ 1.13 $ 1.18 $ 1.25 $ 1.27 $ 1.23 $ 1.11 $ 1.19 $ 1.05 $ 1.08 $ 1.11 9/30/2023 GAAP Net Income $ 52,007 Other business taxes 636 GAAP amortization of acquisition-related intangibles 10,032 Stock-based compensation 1,451 Acquisition, restructuring and exit costs 11,463 Debt issuance costs 762 Pre-IPO governance expenses - Tax effect of above adjustments -6,085 Adjusted Net Income 70,266 Tax benefit of goodwill and acquired intangibles 9,536 Adjusted Net Income with Tax Benefit $ 79,802 Weighted average shares outstanding – diluted 67,676 Adjusted Net income with Tax Benefit Per Diluted Share $ 1.18
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Detailed Reconciliation of Q4 ‘24 Adjusted Net Income 29 Three months ended December 31, 2024 (in thousands, except per-share amounts) U.S. GAAP Basis Other Business Taxes GAAP Amortization of Acquisition- Related Intangibles Stock-Based Compensation Acquisition, Restructuring and Exit Costs Debt Issuance Costs Total Adjustments Non-GAAP Basis Tax Benefit of Goodwill and Acquired Intangibles Revenue Investment management fees 183,826$ –$ 183,826$ Fund administration and distribution fees 48,545 - 48,545 Total revenue 232,371 - - - - - - 232,371 Expenses Personnel compensation and benefits (1) 58,857 - - (1,007) - - (1,007) 57,850 Distribution and other asset-based expenses (2) 36,924 - - - - - - 36,924 General and administrative (2) 14,268 (376) - - - - (376) 13,892 Depreciation and amortization (2) 7,514 - (5,286) - - - (5,286) 2,228 Change in value of consideration payable for acquisition of business (2) 294 - - - (294) - (294) - Acquisition-related costs (2) 2,135 - - - (2,135) - (2,135) - Restructuring and integration costs (2) 634 - - - (634) - (634) - Total operating expenses 120,626 (376) (5,286) (1,007) (3,063) – (9,732) 110,894 Income/(loss) from operations 111,745 376 5,286 1,007 3,063 – 9,732 121,477 Other income (expense) Interest income and other income/(expense) (3) 1,768 - 1,768 Interest expense and other financing costs (3) (14,657) 775 775 (13,882) Loss on debt extinguishment (3) (263) 206 206 (57) Total other income (expense), net (13,152) – – – – 981 981 (12,171) Income/(loss) before income taxes 98,593 376 5,286 1,007 3,063 981 10,713 109,306 Income tax (expense)/benefit (21,654) (94) (1,322) (252) (766) (245) (2,679) (24,333) 10,141 Net income/(loss) 76,939$ 282$ 3,964$ 755$ 2,297$ 736$ 8,034$ 84,973$ + 10,141$ = 95,114$ Earnings per share—basic 1.19$ 1.32$ 0.16$ Earnings per share—diluted 1.17$ 1.30$ + 0.15$ = 1.45$ Weighted average shares outstanding—basic 64,428 64,428 64,428 Weighted average shares outstanding—diluted 65,519 65,519 65,519 Memo: Expenses Personnel (1) 58,857 57,850 Operating (2) 61,769 53,044 Non-Operating (3) 13,152 12,171 Adjustments
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Detailed Reconciliation of Q3 ‘24 Adjusted Net Income 30 Three months ended September 30, 2024 (in thousands, except per-share amounts) U.S. GAAP Basis Other Business Taxes GAAP Amortization of Acquisition- Related Intangibles Stock-Based Compensation Acquisition, Restructuring and Exit Costs Debt Issuance Costs Total Adjustments Non-GAAP Basis Tax Benefit of Goodwill and Acquired Intangibles Revenue Investment management fees 177,809$ –$ 177,809$ Fund administration and distribution fees 47,819 - 47,819 Total revenue 225,628 - - - - - - 225,628 Expenses Personnel compensation and benefits (1) 43,243 - - (972) 15,168 - 14,196 57,439 Distribution and other asset-based expenses (2) 36,828 - - - - - - 36,828 General and administrative (2) 14,029 (366) - - - - (366) 13,663 Depreciation and amortization (2) 7,510 - (5,300) - - - (5,300) 2,210 Change in value of consideration payable for acquisition of business (2) (1,600) - - - 1,600 - 1,600 - Acquisition-related costs (2) 5,075 - - - (5,075) - (5,075) - Restructuring and integration costs (2) 180 - - - (180) - (180) - Total operating expenses 105,265 (366) (5,300) (972) 11,513 – 4,875 110,140 Income/(loss) from operations 120,363 366 5,300 972 (11,513) – (4,875) 115,488 Other income (expense) Interest income and other income/(expense) (3) 3,551 - 3,551 Interest expense and other financing costs (3) (16,414) 775 775 (15,639) Loss on debt extinguishment (3) - - - - Total other income (expense), net (12,863) – – – – 775 775 (12,088) Income/(loss) before income taxes 107,500 366 5,300 972 (11,513) 775 (4,100) 103,400 Income tax (expense)/benefit (25,517) (92) (1,325) (243) 2,879 (194) 1,025 (24,492) 10,141 Net income/(loss) 81,983$ 274$ 3,975$ 729$ (8,634)$ 581$ (3,075)$ 78,908$ + 10,141$ = 89,049$ Earnings per share—basic 1.26$ 1.22$ 0.16$ Earnings per share—diluted 1.24$ 1.19$ + 0.15$ = 1.35$ Weighted average shares outstanding—basic 64,875 64,875 64,875 Weighted average shares outstanding—diluted 66,057 66,057 66,057 Memo: Expenses Personnel (1) 43,243 57,439 Operating (2) 62,022 52,701 Non-Operating (3) 12,863 12,088 Adjustments
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Detailed Reconciliation of Q2 ‘24 Adjusted Net Income 31 (in thousands, except per-share amounts) U.S. GAAP Basis Other Business Taxes GAAP Amortization of Acquisition- Related Intangibles Stock-Based Compensation Acquisition, Restructuring and Exit Costs Debt Issuance Costs Total Adjustments Non-GAAP Basis Tax Benefit of Goodwill and Acquired Intangibles Revenue Investment management fees 173,163$ –$ 173,163$ Fund administration and distribution fees 46,458 - 46,458 Total revenue 219,621 - - - - - - 219,621 Expenses Personnel compensation and benefits (1) 55,660 - - (940) (526) - (1,466) 54,194 Distribution and other asset-based expenses (2) 36,474 - - - - - - 36,474 General and administrative (2) 14,385 (414) - - - - (414) 13,971 Depreciation and amortization (2) 7,551 - (5,299) - - - (5,299) 2,252 Change in value of consideration payable for acquisition of business (2) (8,200) - - - 8,200 - 8,200 - Acquisition-related costs (2) 3,049 - - - (3,049) - (3,049) - Restructuring and integration costs (2) 105 - - - (105) - (105) - Total operating expenses 109,024 (414) (5,299) (940) 4,520 – (2,133) 106,891 Income/(loss) from operations 110,597 414 5,299 940 (4,520) – 2,133 112,730 Other income (expense) Interest income and other income/(expense) (3) 1,557 - 1,557 Interest expense and other financing costs (3) (16,279) 803 803 (15,476) Loss on debt extinguishment (3) (100) 71 71 (29) Total other income (expense), net (14,822) – – – – 874 874 (13,948) Income/(loss) before income taxes 95,775 414 5,299 940 (4,520) 874 3,007 98,782 Income tax (expense)/benefit (21,524) (104) (1,325) (235) 1,130 (219) (753) (22,277) 10,141 Net income/(loss) 74,251$ 310$ 3,974$ 705$ (3,390)$ 655$ 2,254$ 76,505$ + 10,141$ = 86,646$ Earnings per share—basic 1.15$ 1.18$ 0.16$ Earnings per share—diluted 1.12$ 1.16$ + 0.15$ = 1.31$ Weighted average shares outstanding—basic 64,734 64,734 64,734 Weighted average shares outstanding—diluted 66,075 66,075 66,075 Memo: Expenses Personnel (1) 55,660 54,194 Operating (2) 53,364 52,697 Non-Operating (3) 14,822 13,948 Adjustments
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Detailed Reconciliation of Q1 ‘24 Adjusted Net Income 32 (in thousands, except per-share amounts) U.S. GAAP Basis Other Business Taxes GAAP Amortization of Acquisition- Related Intangibles Stock-Based Compensation Acquisition, Restructuring and Exit Costs Debt Issuance Costs Total Adjustments Non-GAAP Basis Tax Benefit of Goodwill and Acquired Intangibles Revenue Investment management fees 169,785$ –$ 169,785$ Fund administration and distribution fees 46,072 - 46,072 Total revenue 215,857 - - - - - - 215,857 Expenses Personnel compensation and benefits (1) 59,454 (1,327) (987) (2,314) 57,140 Distribution and other asset-based expenses (2) 36,263 - 36,263 General and administrative (2) 14,012 (369) (369) 13,643 Depreciation and amortization (2) 7,601 (5,332) (5,332) 2,269 Change in value of consideration payable for acquisition of business (2) 12,200 (12,200) (12,200) - Acquisition-related costs (2) 1,026 (1,026) (1,026) - Restructuring and integration costs (2) 492 (492) (492) - Total operating expenses 131,048 (369) (5,332) (1,327) (14,705) – (21,733) 109,315 Income/(loss) from operations 84,809 369 5,332 1,327 14,705 – 21,733 106,542 Other income (expense) Interest income and other income/(expense) (3) 3,565 - 3,565 Interest expense and other financing costs (3) (16,486) 755 755 (15,731) Loss on debt extinguishment (3) - - - - Total other income (expense), net (12,921) – – – – 755 755 (12,166) Income/(loss) before income taxes 71,888 369 5,332 1,327 14,705 755 22,488 94,376 Income tax (expense)/benefit (16,197) (92) (1,332) (332) (3,675) (190) (5,621) (21,818) 9,748 Net income/(loss) 55,691$ 277$ 4,000$ 995$ 11,030$ 565$ 16,867$ 72,558$ + 9,748$ = 82,306$ Earnings per share—basic 0.86$ 1.13$ 0.15$ Earnings per share—diluted 0.84$ 1.10$ + 0.15$ = 1.25$ Weighted average shares outstanding—basic 64,389 64,389 64,389 Weighted average shares outstanding—diluted 65,972 65,972 65,972 Memo: Expenses Personnel (1) 59,454 57,140 Operating (2) 71,594 52,175 Non-Operating (3) 12,921 12,166 Adjustments
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Detailed Reconciliation of Q4 ‘23 Adjusted Net Income 33 (in thousands, except per-share amounts) U.S. GAAP Basis Other Business Taxes GAAP Amortization of Acquisition- Related Intangibles Stock-Based Compensation Acquisition, Restructuring and Exit Costs Debt Issuance Costs Total Adjustments Non-GAAP Basis Tax Benefit of Goodwill and Acquired Intangibles Revenue Investment management fees 160,677$ –$ 160,677$ Fund administration and distribution fees 45,117 - 45,117 Total revenue 205,794 - - - - - - 205,794 Expenses Personnel compensation and benefits (1) 53,949 - - (1,503) (1,183) - (2,686) 51,263 Distribution and other asset-based expenses (2) 36,438 - - - - - - 36,438 General and administrative (2) 16,702 (305) - - - (2,365) (2,670) 14,032 Depreciation and amortization (2) 7,984 - (5,711) - - - (5,711) 2,273 Change in value of consideration payable for acquisition of business (2) 4,000 - - - (4,000) - (4,000) - Acquisition-related costs (2) 83 - - - (83) - (83) - Restructuring and integration costs (2) 320 - - - (320) - (320) - Total operating expenses 119,476 (305) (5,711) (1,503) (5,586) (2,365) (15,470) 104,006 Income/(loss) from operations 86,318 305 5,711 1,503 5,586 2,365 15,470 101,788 Other income (expense) Interest income and other income/(expense) (3) 3,765 - - 3,765 Interest expense and other financing costs (3) (16,561) 763 763 (15,798) Loss on debt extinguishment (3) - - - - Total other income (expense), net (12,796) – – – – 763 763 (12,033) Income/(loss) before income taxes 73,522 305 5,711 1,503 5,586 3,128 16,233 89,755 Income tax (expense)/benefit (18,316) (76) (1,428) (377) (1,398) (782) (4,061) (22,377) 9,655 Net income/(loss) 55,206$ 229$ 4,283$ 1,126$ 4,188$ 2,346$ 12,172$ 67,378$ + 9,655$ = 77,033$ Earnings per share—basic 0.85$ 1.03$ 0.15$ Earnings per share—diluted 0.82$ 1.01$ + 0.14$ = 1.15$ Weighted average shares outstanding—basic 65,309 65,309 65,309 Weighted average shares outstanding—diluted 66,935 66,935 66,935 Memo: Expenses Personnel (1) 53,949 51,263 Operating (2) 65,527 52,743 Non-Operating (3) 12,796 12,033 Adjustments
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Notes and Disclosures 34 Investing involves risk, including the potential loss of principal. There are no assurances that any fund or strategy will achieve its stated objective. All data in this presentation, unless otherwise noted, is as of December 31, 2024. Past performance does not guarantee future results. Carefully consider a fund's investment objectives, risks, charges and expenses before investing. To obtain a prospectus or summary prospectus containing this and other important information, visit www.vcm.com/prospectus. Read it carefully before investing. A fund’s most recent performance can be found at vcm.com. 55 mutual funds and ETFs did not have 4- or 5- star overall ratings or are not rated. 34% of AUM in mutual funds and ETFs did not receive overall rating of 4 or 5 stars or are not rated. Internal analysis by Victory Capital was used to calculate relative performance. Not all asset classes considered are available to the general public and not all funds included have a history to be included in each time period. The returns used for this comparison are at net asset value (NAV), do not reflect the affect of sales charge, if applicable, and do not reflect the returns an investor would receive. Visit www.vcm.com for more information. The Morningstar Rating for funds, or “star rating,” is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36–59 months of total returns, 60% five-year rating/40% three-year rating for 60–119 months of total returns, and 50% ten-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the ten-year overall star rating formula seems to give the most weight to the ten-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings may reflect fee waivers in effect; in their absence, ratings may have been lower. ETF AUM on slide 5 Includes ETFs within proprietary products.