# Victory Capital Holdings, Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [Victory Capital Holdings, Inc.](/companies/vctr.md) (CIK 1570827)
- Form: 10-Q
- Filed: 2025-08-08
- Accepted by EDGAR: Aug 8, 2025, 09:11 ET
- Period: 2025-06-30
- Accession: 0000950170-25-105496
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1570827/000095017025105496/vctr-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1570827/000095017025105496/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $351.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $570.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | $94.2m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | $187.1m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $28.3m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $46.7m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $58.7m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $120.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.68 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.59 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.69 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.61 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 67,980,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 66,358,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $74.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $2.5m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2025-01-01 to 2025-06-30 | $73.6m | us-gaap:PaymentsOfDividends |
| Share repurchases | 6 months, 2025-01-01 to 2025-06-30 | $26.4m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-06-30 | $107.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-06-30 | $4.25bn | us-gaap:Assets |
| Total liabilities | at 2025-06-30 | $1.78bn | us-gaap:Liabilities |
| Long-term debt | at 2025-06-30 | $965.7m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2025-06-30 | $2.47bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 61,977 characters.

Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “Victory,” or in the first-person notations of “we,” “us,” and “our” shall mean Victory Capital Holdings, Inc., a Delaware corporation, and its wholly-owned subsidiaries.

### Objective

The objective of this section of the Quarterly Report on Form 10-Q is intended to provide a discussion and analysis, from management’s perspective, of the key performance indicators and material information necessary to assess our financial condition and results of operations for the three and six months ended June 30, 2025 and 2024 and cash flows for the six months ended June 30, 2025 and 2024. In addition, we also discuss the Company’s contractual and off-balance sheet arrangements. This discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2024. This discussion and analysis contains forward-looking statements and should also be read in conjunction with the disclosures and information contained in “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and in “Item 1A. Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2024.

### Overview

**Our Business –** Victory is a diversified global asset management firm with total client assets of $301.6 billion, assets under management of $298.6 billion and other assets of $3.0 billion as of June 30, 2025. The Company operates a next-generation business model combining boutique investment qualities with the benefits of an integrated, centralized operating and distribution platform.

The Company provides specialized investment strategies to institutions, intermediaries, retirement platforms and individual investors with multiple autonomous Investment Franchises and a Solutions Platform. Victory Capital offers a wide array of investment products, including actively and passively managed mutual funds, rules-based and active exchange traded funds (“ETFs”), institutional separate accounts, variable insurance products (“VIPs”), alternative investments, private closed end funds, and a 529 Education Savings Plan. Victory Capital’s strategies are also offered through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts (“SMAs”) and unified managed accounts (“UMAs”) through wrap account programs, Collective Investment Trusts (“CITs”), and undertakings for the collective investment in transferable securities (“UCITS”) and other pooled funds. As of June 30, 2025, our Franchises and our Solutions Platform collectively managed a diversified set of 196 investment strategies for a wide range of institutional and retail clients and direct investors.

**Franchises –** Our Franchises are largely operationally integrated but are separately branded and make investment decisions independently from one another within guidelines established by their respective investment mandates. Our largely integrated model creates a supportive environment in which our investment professionals, largely unencumbered by administrative and operational responsibilities, can focus on their pursuit of investment excellence. VCM employs all of our U.S. investment professionals across our Franchises, which are not separate legal entities.

### Pioneer Investments

On July 8, 2024, the Company, Amundi Asset Management S.A.S ("Amundi'), and, solely for certain provisions thereof, Amundi S.A., (“Amundi Parent,” and together with Amundi, the “Amundi Parties”) entered into the Contribution Agreement (the “Contribution Agreement”) to combine Amundi’s U.S. business into the Company. The addition of Amundi U.S. as the Company's largest Investment Franchise meaningfully enhances the Company's scale, expands its global client base and further diversifies its investment capabilities.

Amundi U.S., based in Boston, Massachusetts, was a wholly owned subsidiary of Amundi, and specializes in providing and distributing investment solutions to a wide range of clients and investors, including institutional investors, corporations, central banks, sovereign wealth funds, and individual investors.

On April 1, 2025, the Company completed the transactions contemplated by the Contribution Agreement (the “Contribution”) and reintroduced the brand Pioneer Investments ("Pioneer" or "Pioneer Investments") for the acquired business and investment products. In exchange for the contribution of all the shares of the Amundi US to the Company, the Company issued to Amundi (a) 3,293,471 newly issued shares of Common Stock, representing 4.9% of the number of issued and outstanding shares of Common Stock after giving effect to such issuance, and (b) 19,742,300 newly issued shares of Preferred Stock, which, together with the shares of Common Stock issued to Amundi represented in the aggregate 26.1% of the Company’s fully diluted shares after giving effect to such share issuances. The Preferred Stock issued to Amundi includes 14,305,982 shares issued on April 1, 2025 and 5,436,318 shares issued on May 23, 2025 as a true up payment in respect of client consents obtained in the 30 days following the Closing. Closing consideration due to Amundi is subject to a customary post-closing adjustment, which has not yet been determined. VCM serves as the investment adviser and provides mutual fund administration services for the Pioneer mutual funds under Victory Portfolio IV and Victory Variable Insurance Funds II. VCS serves as the distributor to Victory Portfolios IV and Victory Variable Insurance Funds II. The sequential results reflect include Pioneer Investments as of April 1, 2025, which significantly impacted our financial results for the three and six months ended June 30, 2025 when compared to the comparable periods. Refer to Note 4, Acquisitions, for further details related to the acquisition.

**Solutions –** Our Solutions Platform consists of multi‑asset, multi-manager, quantitative, rules-based, factor-based, and customized portfolios. These strategies are designed to achieve specific return characteristics, with products that include values-based and thematic outcomes and exposures. We offer our Solutions Platform through a variety of vehicles, including separate accounts, mutual funds, UMA accounts, and rules-based and active ETFs under our VictoryShares ETF brand. Like our Franchises, our Solutions Platform is operationally integrated and supported by our centralized distribution, marketing, and operational support functions.

We have clients spanning 60 countries and manage approximately $50 billion in AUM for non-US investors. Through our exclusive global distribution agreement with Amundi, we have access to 35 countries and 1,000 third-party distributors in 20 countries. Professionals within our institutional and retail distribution channels, direct investor business and marketing organization sell our products through our centralized distribution model. Our institutional sales team focuses on cultivating relationships with institutional consultants, who account for the majority of the institutional market, as well as asset allocators seeking sub-advisers. Our retail sales team offers intermediary and retirement platform clients, including broker-dealers, retirement platforms and RIA networks, mutual funds and ETFs as well as SMAs through wrap fee programs and access to our investment models through UMAs. Our direct investor business serves the investment needs of individual clients.

We have grown our total client assets from $17.9 billion following the management-led buyout with Crestview GP in August 2013 to $301.6 billion at June 30, 2025. We attribute this growth to our success in sourcing acquisitions and evolving them into organic growers, generating strong investment returns, and developing institutional, retail, and direct investor channels with deep penetration.

### Business Highlights

Assets under management:

- AUM at June 30, 2025 increased by $131.1 billion, or 78.3%, to $298.6 billion from $167.5 billion at March 31, 2025, due to the combination of $114 billion of AUM acquired from Pioneer Investments as well as $20.2 billion of market appreciation partially offset by $0.8 billion of net outflows.
- AUM at June 30, 2025 and 2024 was $298.6 billion and $168.7 billion, respectively. We generated $15.7 billion in gross flows and $0.8 billion in net outflows for the three months ended June 30, 2025 compared to $6.1 billion in gross flows and $1.7 billion in net outflows for the same period in 2024.
- AUM at June 30, 2025 and 2024 was $298.6 billion and $168.7 billion, respectively. We generated $25.2 billion in gross flows and $2.1 billion in net outflows for the six months ended June 30, 2025 compared to $13.3 billion in gross flows and $2.9 billion in net outflows for the same period in 2024. Net flows for the six months ended June 30, 2025 were comprised of $1.9 billion and $0.2 billion of net long-term and short-term outflows, respectively.

Investment performance:

- 57 of our Victory Capital mutual funds and ETFs had overall Morningstar ratings of four or five stars and 64% of our fund and ETF AUM were rated four or five stars overall by Morningstar. 56% of our strategies by AUM had investment returns in excess of their respective benchmarks over a one-year period, 58% over a three-year period, 67% over a five-year period and 73% over a ten-year period. On an equal-weighted basis, 56% of our strategies have outperformed their benchmarks over a one-year period, 60% over a three-year period, 67% over a five-year period and 66% over a ten-year period.

Financial highlights:

- Total revenue for the three months ended June 30, 2025 was $351.2 million compared to $219.6 million for the same period in 2024. For the six months ended June 30, 2025 and 2024, total revenue was $570.8 million and $435.5 million, respectively.
- Net income was $58.7 million for the three months ended June 30, 2025 compared to $74.3 million for the same period in 2024. For the six months ended June 30, 2025 and 2024, net income was $120.7 million and $129.9 million, respectively.
- Adjusted EBITDA was $178.5 million for the three months ended June 30, 2025, or 50.8% of revenue, compared to $116.5 million, or 53.0% of revenue, for the same period in 2024. For the six months ended June 30, 2025, Adjusted EBITDA was $294.9 million, or 51.7% of revenue, compared to $228.9 million, or 52.6% of revenue, for the same period in 2024. Refer to “Supplemental Non-GAAP Financial Information” for further information about the Adjusted EBITDA calculation and reconciliation of generally accepted accounting principles (“GAAP”) net income to Adjusted EBITDA.
- Adjusted Net Income with tax benefit was $132.8 million for the three months ended June 30, 2025 compared to $86.6 million for the three months ended June 30, 2024. For the six months ended June 30, 2025, Adjusted Net Income with tax benefit was $220.9 million compared to $169.0 million for the same period in 2024. Refer to “Supplemental Non-GAAP Financial Information” for further information about the Adjusted Net Income calculation and reconciliation of GAAP net income to Adjusted Net Income.

### Key Performance Indicators

The following table is a summary of key performance indicators utilized by management to assess results of operations:

*($ in millions, except for basis points, percentages, and per share amounts)*

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| AUM at period end | $298,563 | $168,681 | $298,563 | $168,681 |
| Average AUM | 284,977 | 167,484 | 229,383 | 165,508 |
| Gross flows | 15,731 | 6,067 | 25,217 | 13,255 |
| AUM net short-term flows | (144) | (43) | (188) | (142) |
| AUM net long-term flows | (660) | (1,701) | (1,865) | (2,729) |
| AUM net flows | (804) | (1,744) | (2,053) | (2,871) |
| Total revenue | 351.2 | 219.6 | 570.8 | 435.5 |
| Revenue realization on average AUM | 49.4 bps | 52.6 bps | 50.1 bps | 52.8bps |
| Net income | 58.7 | 74.3 | 120.7 | 129.9 |
| Adjusted EBITDA(1) | 178.5 | 116.5 | 294.9 | 228.9 |
| Adjusted EBITDA margin(2) | 50.8% | 53.0% | 51.7% | 52.6% |
| Adjusted net income(1) | 122.5 | 76.5 | 200.5 | 149.1 |
| Tax benefit of goodwill and acquired intangibles(3) | 10.3 | 10.1 | 20.4 | 19.9 |
| Adjusted net income with tax benefit per diluted share(4) | 1.57 | 1.31 | 2.96 | 2.56 |

(1) Management utilizes Adjusted EBITDA and Adjusted net income to measure the operating profitability of the business. These measures eliminate the impact of one‑time acquisition, restructuring and integration costs and demonstrate the ongoing operating earnings metrics of the business. These measures are explained in more detail and reconciled to net income calculated in accordance with GAAP in “Supplemental Non‑GAAP Financial Information.”

(2) Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of total revenue.

(3) Represents the tax benefits associated with deductions allowed for intangibles and goodwill generated from prior acquisitions in which we 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 intangibles with a step-up in tax basis. Due to our acquisitive nature, tax deductions allowed on acquired intangible assets and goodwill provide us with a significant supplemental economic benefit.

(4) The Company includes participating securities in its computation of adjusted earnings per diluted share, including 19.7 million shares of Series A Non-Voting Convertible Preferred Stock.

The following table presents a reconciliation of our total client assets(1) as of the dates indicated:

*(in millions)*

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Beginning AUM | $167,468 | $170,342 | $171,930 | $161,322 |
| Beginning other assets | 3,967 | 5,117 | 4,165 | 5,289 |
| Beginning total client assets | 171,435 | 175,459 | 176,096 | 166,611 |
| AUM net cash flows | (804) | (1,744) | (2,053) | (2,871) |
| Other assets net cash flows | (1,170) | 18 | (1,446) | (506) |
| Total client assets net cash flows | (1,973) | (1,727) | (3,499) | (3,377) |
| AUM market appreciation (depreciation) | 20,247 | 83 | 17,075 | 10,261 |
| Other assets market appreciation (depreciation) | 253 | (40) | 331 | 311 |
| Total client assets market appreciation (depreciation) | 20,500 | 43 | 17,406 | 10,572 |
| AUM realizations and distributions | (3) | — | (24) | — |
| Acquired & divested assets / Net transfers(2) | 111,654 | (1) | 111,634 | (31) |
| Ending AUM | 298,563 | 168,681 | 298,563 | 168,681 |
| Ending other assets | 3,050 | 5,094 | 3,050 | 5,094 |
| Ending total client assets | 301,613 | 173,775 | 301,613 | 173,775 |
| Average total client assets | 288,568 | 172,392 | 233,209 | 170,629 |

(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) Includes the impact of Pioneer Investments as of April 1, 2025, increasing the Company's AUM by $114 billion.

The following table presents a reconciliation of our total AUM(1) as of the dates indicated:

*(in millions)*

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Beginning AUM | $167,468 | $170,342 | $171,930 | $161,322 |
| Gross client cash inflows | 15,731 | 6,067 | 25,217 | 13,255 |
| Gross client cash outflows | (16,534) | (7,812) | (27,270) | (16,126) |
| Net client cash flows | (804) | (1,744) | (2,053) | (2,871) |
| Market appreciation (depreciation) | 20,247 | 83 | 17,075 | 10,261 |
| Realizations and distributions | (3) | — | (24) | — |
| Acquired & divested assets / Net transfers(2) | 111,654 | (1) | 111,634 | (31) |
| Ending AUM | 298,563 | 168,681 | 298,563 | 168,681 |
| Average AUM | 284,977 | 167,484 | 229,383 | 165,508 |

(1) Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.

(2) Includes the impact of Pioneer Investments as of April 1, 2025, increasing the Company's AUM by $114 billion.

The following table presents a reconciliation of our other assets (institutional)(1) as of the dates indicated:

*(in millions)*

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Beginning other assets (institutional) | $3,967 | $5,117 | $4,165 | $5,289 |
| Gross client cash inflows | — | 467 | — | 467 |
| Gross client cash outflows | (1,170) | (449) | (1,446) | (973) |
| Net client cash flows | (1,170) | 18 | (1,446) | (506) |
| Market appreciation (depreciation) | 253 | (40) | 331 | 311 |
| Realizations and distributions | — | — | — | — |
| Acquired & divested assets / Net transfers | — | — | — | — |
| Ending other assets (institutional) | 3,050 | 5,094 | 3,050 | 5,094 |
| Average other assets (institutional) | 3,591 | 4,909 | 3,826 | 5,120 |

(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.

### Assets Under Management

Our profitability is largely affected by the level and composition of our AUM (including asset class and distribution channel) and the effective fee rates on our products. The amount and composition of our AUM are, and will continue to be, influenced by a number of factors, including; (i) investment performance, including fluctuations in the financial markets and the quality of our investment decisions; (ii) client flows into and out of our various strategies and investment vehicles; (iii) industry trends toward products or strategies that we either do or do not offer; (iv) our ability to attract and retain high quality investment, distribution, marketing and management personnel; (v) our decision to close strategies or limit growth of assets in a strategy when we believe it is in the best interest of our clients or conversely to re‑open strategies in part or entirely; and (vi) general investor sentiment and confidence. Our goal is to establish and maintain a client base that is diversified by Franchise and Solutions, asset class, distribution channel and vehicle. Due to rounding, AUM numbers presented in the tables below may not add up precisely to the totals provided.

The following table presents our AUM by asset class as of the dates indicated:

*(in millions)*

|  | As of June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Solutions | $79,988 | $58,936 |
| Fixed Income | 79,752 | 24,398 |
| U.S. Mid Cap Equity | 31,643 | 31,015 |
| U.S. Small Cap Equity | 13,140 | 15,182 |
| Global / Non-U.S. Equity | 25,576 | 18,459 |
| U.S. Large Cap Equity | 61,844 | 13,983 |
| Alternative Investments | 2,986 | 3,390 |
| **Total Long-Term Assets** | **294,930** | **165,362** |
| Money Market & Short-Term Assets | 3,633 | 3,320 |
| **Total AUM(1)(2)** | **$298,563** | **$168,681** |

(1) Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.

(2) Includes the impact of Pioneer Investments as of April 1, 2025, increasing the Company's AUM by $114 billion.

The following tables summarize our asset flows by asset class for the periods indicated:

*(in millions)*

| For the Three Months Ended June 30, 2025 | U.S. Mid Cap Equity | U.S. Small Cap Equity | Fixed Income | U.S. Large Cap Equity | Global / Non-U.S. Equity | Solutions | Alternative Investments | Total Long-term | Money Market / Short-term | Total AUM(1) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Beginning AUM | $28,964 | $13,182 | $24,157 | $13,104 | $18,334 | $63,378 | $2,945 | $164,064 | $3,404 | $167,468 |
| Gross client cash inflows | 850 | 457 | 6,014 | 2,266 | 1,520 | 4,093 | 222 | 15,423 | 308 | 15,731 |
| Gross client cash outflows | (1,597) | (740) | (6,012) | (3,385) | (1,373) | (2,742) | (233) | (16,083) | (451) | (16,534) |
| Net client cash flows | (748) | (284) | 2 | (1,118) | 147 | 1,351 | (11) | (660) | (144) | (804) |
| Market appreciation / (depreciation) | 1,233 | 385 | 1,172 | 7,482 | 3,263 | 6,620 | 55 | 20,210 | 37 | 20,247 |
| Realizations and distributions | — | — | — | — | — | — | (3) | (3) | — | (3) |
| Acquired & divested assets / Net transfers(2) | 2,194 | (143) | 54,420 | 42,376 | 3,833 | 8,639 | — | 111,318 | 335 | 111,654 |
| Ending AUM | $31,643 | $13,140 | $79,752 | $61,844 | $25,576 | $79,988 | $2,986 | $294,930 | $3,633 | $298,563 |
| **For the Three Months Ended June 30, 2024** |  |  |  |  |  |  |  |  |  |  |
| Beginning AUM | $32,918 | $16,297 | $24,481 | $13,895 | $18,200 | $57,833 | $3,465 | $167,089 | $3,253 | $170,342 |
| Gross client cash inflows | 1,007 | 559 | 1,283 | 67 | 558 | 2,035 | 303 | 5,813 | 255 | 6,067 |
| Gross client cash outflows | (1,659) | (778) | (1,508) | (309) | (635) | (2,184) | (442) | (7,514) | (298) | (7,812) |
| Net client cash flows | (652) | (218) | (225) | (241) | (77) | (150) | (139) | (1,701) | (43) | (1,744) |
| Market appreciation / (depreciation) | (1,247) | (893) | 116 | 350 | 367 | 1,273 | 58 | 24 | 60 | 83 |
| Realizations and distributions | — | — | — | — | — | — | — | — | — | — |
| Acquired & divested assets / Net transfers | (4) | (4) | 26 | (21) | (32) | (21) | 6 | (50) | 50 | (1) |
| Ending AUM | $31,015 | $15,182 | $24,398 | $13,983 | $18,459 | $58,936 | $3,390 | $165,362 | $3,320 | $168,681 |

(1) Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.

(2) Includes the impact of Pioneer Investments as of April 1, 2025, increasing the Company's AUM by $114 billion.

*(in millions)*

| Six Months Ended June 30, 2025 | U.S. Mid Cap Equity | U.S. Small Cap Equity | Fixed Income | U.S. Large Cap Equity | Global / Non-U.S. Equity | Solutions | Alternative Investments | Total Long-term | Money Market / Short-term | Total AUM(1) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Beginning AUM | $30,584 | $14,785 | $24,402 | $14,148 | $19,095 | $62,593 | $2,980 | $168,586 | $3,344 | $171,930 |
| Gross client cash inflows | 1,947 | 902 | 6,943 | 2,349 | 3,656 | 8,456 | 478 | 24,732 | 485 | 25,217 |
| Gross client cash outflows | (3,331) | (1,587) | (7,557) | (3,854) | (4,623) | (5,060) | (585) | (26,597) | (673) | (27,270) |
| Net client cash flows | (1,383) | (685) | (614) | (1,505) | (967) | 3,396 | (107) | (1,865) | (188) | (2,053) |
| Market appreciation / (depreciation) | 254 | (809) | 1,500 | 6,852 | 3,659 | 5,417 | 134 | 17,008 | 67 | 17,075 |
| Realizations and distributions | — | — | — | — | — | — | (24) | (24) | — | (24) |
| Acquired & divested assets / Net transfers(2) | 2,188 | (150) | 54,464 | 42,349 | 3,789 | 8,582 | 2 | 111,224 | 410 | 111,634 |
| Ending AUM | $31,643 | $13,140 | $79,752 | $61,844 | $25,576 | $79,988 | $2,986 | $294,930 | $3,633 | $298,563 |
| **Six Months Ended June 30, 2024** |  |  |  |  |  |  |  |  |  |  |
| Beginning AUM | $30,604 | $15,959 | $24,355 | $12,635 | $16,772 | $54,296 | $3,431 | $158,051 | $3,271 | $161,322 |
| Gross client cash inflows | 2,378 | 1,066 | 2,581 | 136 | 1,648 | 4,200 | 755 | 12,764 | 491 | 13,255 |
| Gross client cash outflows | (3,504) | (1,703) | (2,874) | (641) | (1,386) | (4,595) | (791) | (15,493) | (632) | (16,126) |
| Net client cash flows | (1,126) | (637) | (294) | (505) | 262 | (394) | (36) | (2,729) | (142) | (2,871) |
| Market appreciation / (depreciation) | 1,548 | (92) | 292 | 1,905 | 1,501 | 5,022 | (17) | 10,159 | 102 | 10,261 |
| Realizations and distributions | — | — | — | — | — | — | 0 | 0 | — | — |
| Acquired & divested assets / Net transfers | (11) | (49) | 44 | (51) | (76) | 12 | 11 | (119) | 88 | (31) |
| Ending AUM | $31,015 | $15,182 | $24,398 | $13,983 | $18,459 | $58,936 | $3,390 | $165,362 | $3,320 | $168,681 |

(1) Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.

(2) Includes the impact of Pioneer Investments as of April 1, 2025, increasing the Company's AUM by $114 billion.

The following table presents our AUM by distribution channel as of the dates indicated:

*(in millions)*

|  | As of June 30, 2025 Amount | % of total | 2024 Amount | % of total |
| --- | ---: | ---: | ---: | ---: |
| Investor | $61,568 | 21% | $60,290 | 36% |
| Institutional | 125,899 | 42% | 42,310 | 25% |
| Retail | 111,096 | 37% | 66,081 | 39% |
| Total AUM(1)(2)(3) | $298,563 | 100% | $168,681 | 100% |

(1) The allocation of AUM by distribution channel involves the use of estimates and the exercise of judgment.

(2) Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.

(3) Includes the impact of the Pioneer Investments as of April 1, 2025, increasing the Company's AUM by $114 billion.

The following table presents our total AUM by region as of the dates indicated:

*(in millions)*

|  | As of June 30, 2025 Amount | % of total | 2024 Amount | % of total |
| --- | ---: | ---: | ---: | ---: |
| U.S. | $250,035 | 84% | $163,146 | 97% |
| Non-U.S. | 48,528 | 16% | 5,535 | 3% |
| Total AUM(1)(2) | $298,563 | 100% | $168,681 | 100% |

36

(1) Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.

(2) Includes the impact of the Pioneer Investments as of April 1, 2025, increasing the Company's AUM by $114 billion.

The following tables summarize our asset flows by vehicle for the periods indicated:

*(in millions)*

| For the Three Months Ended June 30, 2025 | Mutual Funds (1) | ETFs (2) | Separate Accounts and Other Pooled Vehicles (3) | Total AUM(4) |
| --- | ---: | ---: | ---: | ---: |
| Beginning AUM | $108,392 | $10,253 | $48,823 | $167,468 |
| Gross client cash inflows | 6,935 | 1,568 | 7,227 | 15,731 |
| Gross client cash outflows | (9,716) | (264) | (6,554) | (16,534) |
| Net client cash flows | (2,781) | 1,305 | 672 | (804) |
| Market appreciation (depreciation) | 11,465 | 319 | 8,463 | 20,247 |
| Realizations and distributions | — | — | (3) | (3) |
| Acquired & divested assets / Net transfers(5) | 50,897 | 97 | 60,660 | 111,654 |
| Ending AUM | $167,973 | $11,975 | $118,615 | $298,563 |
| **For the Three Months Ended June 30, 2024** |  |  |  |  |
| Beginning AUM | $113,897 | $5,229 | $51,217 | $170,342 |
| Gross client cash inflows | 3,553 | 480 | 2,034 | 6,067 |
| Gross client cash outflows | (5,061) | (178) | (2,573) | (7,812) |
| Net client cash flows | (1,508) | 302 | (539) | (1,744) |
| Market appreciation (depreciation) | 385 | (91) | (211) | 83 |
| Realizations and distributions | — | — | — | — |
| Acquired & divested assets / Net transfers | (190) | — | 190 | — |
| Ending AUM | $112,584 | $5,440 | $50,657 | $168,681 |

*(in millions)*

| Six Months Ended June 30, 2025 | Mutual Funds (1) | ETFs (2) | Separate Accounts and Other Pooled Vehicles (3) | Total AUM(4) |
| --- | ---: | ---: | ---: | ---: |
| Beginning AUM | $113,645 | $7,508 | $50,777 | $171,930 |
| Gross client cash inflows | 10,258 | 4,630 | 10,329 | 25,217 |
| Gross client cash outflows | (16,044) | (515) | (10,710) | (27,270) |
| Net client cash flows | (5,786) | 4,115 | (381) | (2,053) |
| Market appreciation (depreciation) | 9,222 | 270 | 7,583 | 17,075 |
| Realizations and distributions | — | — | (24) | (24) |
| Acquired & divested assets / Net transfers(5) | 50,892 | 82 | 60,660 | 111,634 |
| Ending AUM | $167,973 | $11,975 | $118,615 | $298,563 |
| **Six Months Ended June 30, 2024** |  |  |  |  |
| Beginning AUM | $108,802 | $4,970 | $47,551 | $161,322 |
| Gross client cash inflows | 7,856 | 930 | 4,468 | 13,255 |
| Gross client cash outflows | (11,017) | (627) | (4,482) | (16,126) |
| Net client cash flows | (3,161) | 304 | (14) | (2,871) |
| Market appreciation (depreciation) | 7,181 | 124 | 2,956 | 10,261 |
| Realizations and distributions | — | — | — | — |
| Acquired & divested assets / Net transfers | (238) | 43 | 164 | (31) |
| Ending AUM | $112,584 | $5,440 | $50,657 | $168,681 |

(1) Includes institutional and retail share classes, money market and Variable Insurance Products or 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.

(5) Includes the impact of Pioneer Investments as of April 1, 2025, increasing the Company's AUM by $114 billion.

*June 30, 2025 AUM compared to March 31, 2025 AUM*. At June 30, 2025, our total AUM was $298.6 billion, an increase of $131.1 billion, or 78.3%, from $167.5 billion at March 31, 2025, driven by the combination of $114 billion of AUM acquired relating to Pioneer Investments as well as $20.2 billion of market appreciation partially offset by $0.8 billion of net outflows.

Net outflows were driven by our U.S. mid cap, U.S. small cap, and U.S. large cap equity strategies of $0.7 billion, $0.3 billion, $1.1 billion, respectively, partially offset by net inflows of $1.4 billion and $0.1 billion in our Solutions platform and global/non-US equity strategies, respectively.

*June 30, 2025 AUM compared to December 31, 2024 AUM.* Total AUM increased by $126.6 billion, or 73.7%, to $298.6 billion at June 30, 2025 compared to $171.9 billion at December 31, 2024. The increase in AUM was due to the combination of $114 billion of AUM acquired relating to Pioneer Investments as well as $17.1 billion of market appreciation partially offset by $2.1 billion of net outflows.

Net outflows were driven by our U.S. mid cap, U.S. small cap, and U.S. large cap equity strategies, our fixed income strategies, global/non-US equity strategies, and alternative investments of $1.4 billion, $0.7 billion, $1.5 billion, $0.6 billion, $1.0 billion, and $0.1 billion, respectively, partially offset by net inflows of $3.4 billion in our Solutions platform.

### GAAP Results of Operations

The following table presents our GAAP results of operations for the three and six months ended June 30, 2025 and 2024.

*(in thousands, except per share data)*

| Revenue | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Investment management fees | $282,306 | $173,163 | 455,607 | $342,948 |
| Fund administration and distribution fees | 68,906 | 46,458 | 115,207 | 92,530 |
| **Total revenue** | **351,212** | **219,621** | **570,814** | **435,478** |
| **Expenses** |  |  |  |  |
| Personnel compensation and benefits | 108,918 | 55,660 | 165,054 | 115,114 |
| Distribution and other asset-based expenses | 62,039 | 36,474 | 97,516 | 72,737 |
| General and administrative | 23,381 | 14,385 | 37,709 | 28,397 |
| Depreciation and amortization | 21,794 | 7,551 | 29,226 | 15,152 |
| Change in value of consideration payable for acquisition of business | 1,092 | (8,200) | 4,498 | 4,000 |
| Acquisition-related costs | 25,780 | 3,049 | 34,530 | 4,075 |
| Restructuring and integration costs | 13,994 | 105 | 15,159 | 597 |
| **Total operating expenses** | **256,998** | **109,024** | **383,692** | **240,072** |
| **Income from operations** | **94,214** | **110,597** | **187,122** | **195,406** |
| **Other income (expense)** |  |  |  |  |
| Interest income and other income | 6,006 | 1,557 | 6,710 | 5,122 |
| Interest expense and other financing costs | (13,234) | (16,279) | (26,445) | (32,765) |
| Loss on debt extinguishment | — | (100) | — | (100) |
| **Total other expense, net** | **(7,228)** | **(14,822)** | **(19,735)** | **(27,743)** |
| **Income before income taxes** | **86,986** | **95,775** | **167,387** | **167,663** |
| **Income tax expense** | **(28,252)** | **(21,524)** | **(46,678)** | **(37,721)** |
| **Net income** | **$58,734** | **$74,251** | **$120,709** | **$129,942** |
| Preferred stock dividends | (9,673) | — | (9,673) | — |
| Income attributable to Preferred stockholders | (2,985) | — | (5,334) | — |
| **Net income attributable to common shareholders** | **$46,076** | **$74,251** | **$105,702** | **$129,942** |
| **Earnings per share of common stock** |  |  |  |  |
| Basic | $0.69 | $1.15 | $1.61 | $2.01 |
| Diluted | $0.68 | $1.12 | $1.59 | $1.97 |
| **Weighted average number of shares outstanding** |  |  |  |  |
| Basic | 67,239 | 64,734 | 65,484 | 64,561 |
| Diluted | 67,980 | 66,075 | 66,358 | 66,025 |
| **Dividends declared per share of common stock** | $0.49 | $0.37 | $0.96 | $0.705 |

### Investment Management Fees

*Three months ended June 30, 2025 compared to June 30, 2024.* Investment management fees increased 63.0%, or $109.1 million, to $282.3 million for the three months ended June 30, 2025 from $173.2 million for the same comparable period in 2024 due to an increase in average AUM primarily driven by Pioneer Investments over the comparable period.

*Six months ended June 30, 2025 compared to June 30, 2024.* Investment management fees increased by $112.7 million, or 32.9%, to $455.6 million for the six months ended June 30, 2025 from $342.9 million due to the same factors discussed above in the quarterly section.

### Fund Administration and Distribution Fees

*Three months ended June 30, 2025 compared to June 30, 2024.* Fund administration and distribution fees increased by $22.4 million, or 48.3%, to $68.9 million for the three months ended June 30, 2025 compared to $46.5 million for the same period in 2024 due primarily to higher mutual fund average net assets.

*Six months ended June 30, 2025 compared to June 30, 2024.* Fund administration and distribution fees increased by $22.7 million, or 24.5%, to $115.2 million for the six months ended June 30, 2025 from $92.5 million for the same period in 2024 due to the same factors as discussed above in the quarterly section.

### Personnel Compensation and Benefits

The following table presents the components of GAAP personnel compensation and benefits expense for the three and six months ended June 30, 2025 and 2024:

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Salaries, payroll related taxes and employee benefits | $41,408 | $21,248 | $63,153 | $45,724 |
| Incentive compensation | 38,116 | 24,505 | 61,783 | 48,448 |
| Sales-based compensation(1) | 10,612 | 5,616 | 17,832 | 11,695 |
| Equity awards granted to employees and directors(2) | 5,658 | 3,765 | 9,162 | 7,734 |
| Acquisition and transaction-related compensation(3) | 13,124 | 526 | 13,124 | 1,513 |
| **Total personnel compensation and benefits expense** | **$108,918** | **$55,660** | **$165,054** | **$115,114** |

(1) Represents sales-based commissions paid to our distribution teams. Sales-based compensation varies based on gross client cash flows and revenue earned on sales.

(2) Equity awards typically vest over several years based on service and the achievement of specific business and financial targets. The value of the equity awards is recognized as compensation expense over the vesting period.

(3) Acquisition and transaction-related compensation costs for the three and six months ended June 30, 2025 primarily consists of vesting of certain Amundi US deferred compensation awards for former Amundi US employees.

*Three months ended June 30, 2025 compared to June 30, 2024.* Personnel compensation and benefits were $108.9 million for the three months ended June 30, 2025, an increase of $53.3 million, or 95.7%, from $55.7 million for the same period in 2024 mostly attributable to an increase in salaries, payroll related taxes and employee benefits as well as an increase in acquisition and transaction-related compensation of $20.2 million and $12.6 million, respectively. Excluding the impact of salaries, payroll taxes and employee benefits and acquisition and transaction-related compensation over the comparable period, personnel compensation and benefits increased $20.5 million, or 36.8%, due to an increase in variable costs such as incentive and sales-based compensation and equity awards granted. Incentive compensation, sales-based compensation, and equity awards granted to employees and directors were $38.1 million, $10.6 million, and $5.7 million, respectively, for the three months ended June 30, 2025, compared to $24.5 million, $5.6 million, and $3.8 million, respectively, for the same period in 2024.

*Six months ended June 30, 2025 compared to June 30, 2024.* Personnel compensation and benefits increased by $49.9 million, or 43.4%, to $165.1 million for the six months ended June 30, 2025 from $115.1 million for the same period in 2024 due to an increase in salaries, payroll related taxes and employee benefits as well as an increase in acquisition and transaction-related compensation of $17.4 million and $11.6 million, respectively. Excluding the impact of salaries, payroll taxes and employee benefits and acquisition and transaction-related compensation over the comparable period, personnel compensation and benefits increased $20.9 million, or 18.2%, due to an increase in variable costs such as incentive and sales-based compensation and equity awards granted. Incentive compensation, sales-based compensation, and equity awards granted to employees and directors were $61.8 million, $17.8 million, and $9.2 million, respectively, for the six months ended June 30, 2025, compared to $48.4 million, $11.7 million, and $7.7 million, respectively, for the same period in 2024.

### Distribution and Other Asset‑Based Expenses

The following table presents the components of distribution and other asset-based expenses for the three and six months ended June 30, 2025 and 2024:

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Broker-dealer distribution fees | $20,833 | $4,969 | $25,633 | $10,011 |
| Platform distribution fees | 31,444 | 22,287 | 53,055 | 44,415 |
| Sub-administration | 5,274 | 4,176 | 9,664 | 8,277 |
| Sub-advisory | 1,678 | 2,342 | 3,550 | 4,678 |
| Middle-office | 2,810 | 2,700 | 5,614 | 5,356 |
| **Total distribution and other asset-based expenses** | **$62,039** | **$36,474** | **$97,516** | **$72,737** |

*Three months ended June 30, 2025 compared to June 30, 2024.* Distribution and other asset-based expenses are primarily based on AUM. For the three months ended June 30, 2025, distribution and other asset-based expenses were $62.0 million, an increase of $25.6 million, or 70.1%, from $36.5 million for the same period in 2024. The increase is primarily due to higher broker-dealer and platform distribution fees over the comparable period.

*Six months ended June 30, 2025 compared to June 30, 2024.* Distribution and other asset-based expenses were $97.5 million for the six months ended June 30, 2025, an increase of $24.8 million, or 34.1%, from $72.7 million for the same period in 2024 primarily due to the same factors as discussed above in the quarterly section.

### General and Administrative

*Three months ended June 30, 2025 compared to June 30, 2024.* General and administrative expenses increased $9.0 million, or 62.5%, to $23.4 million at June 30, 2025 compared to $14.4 million for the three months ended June 30, 2024. The increase is primarily due to an increase facilities and data services and technology related expenses.

*Six months ended June 30, 2025 compared to June 30, 2024.* For the six months ended June 30, 2025 and 2024, general and administrative expenses were $37.7 million and $28.4 million, respectively, for a year over year increase of $9.3 million, or 32.8%. The increase was primarily due to the same factors as discussed above in the quarterly section.

### Depreciation and Amortization

*Three months ended June 30, 2025 compared to June 30, 2024.* Depreciation and amortization increased by $14.2 million, or 188.6%, to $21.8 million for the three months ended June 30, 2025 from $7.6 million for the same period in 2024, due to the amortization of definite-lived intangible assets associated with the Amundi US acquisition in the second quarter of 2025.

*Six months ended June 30, 2025 compared to June 30, 2024.* Depreciation and amortization increased by $14.1 million, or 92.9%, to $29.2 million for the six months ended June 30, 2025 from $15.2 million for the same period in 2024 due to the same factors as discussed above in the quarterly section.

### Change in Value of Consideration Payable for Acquisition of Business

*Three months ended June 30, 2025 compared to June 30, 2024.* The change in value of consideration payable for acquisition of business increased $9.3 million as a result of a decrease of $8.2 million in the fair value of the contingent consideration associated with the WestEnd Acquisition for the three months ended June 30, 2024, compared to an increase of $1.1 million for the WestEnd Acquisition for the three months ended June 30, 2025. Refer to Note 4, Acquisitions, for further details on the fair value of contingent consideration payable.

*Six months ended June 30, 2025 compared to June 30, 2024.* The change in value of consideration payable for acquisition of business increased $0.5 million due the change in the fair value of the contingent consideration associated with the WestEnd Acquisition increasing $4.5 million for the six months ended June 30, 2025 compared to a $4.0 million increase for the six months ended June 30, 2024. Refer to Note 4, Acquisitions, for further details on the fair value of contingent consideration payable.

### Acquisition-Related Costs

*Three months ended June 30, 2025 compared to June 30, 2024.* Acquisition-related costs were $25.8 million and $3.0 million for the three months ended June 30, 2025 and 2024, respectively. The acquisition-related costs for the three months ended June 30, 2025 and 2024 related to legal and professional fees, associated with the Amundi US acquisition.

*Six months ended June 30, 2025 compared to June 30, 2024.* Acquisition-related costs were $34.5 million and $4.1 million for the six months ended June 30, 2025 and 2024, respectively. The acquisition-related costs for the six months ended June 30, 2025 and 2024 were related to the same factors discussed above in the quarterly section.

### Restructuring and Integration Costs

*Three months ended June 30, 2025 compared to June 30, 2024.* Restructuring and integration costs were $14.0 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively. The restructuring and integration costs for the three months ended June 30, 2025 were primarily related to personnel restructuring.

*Six months ended June 30, 2025 compared to June 30, 2024.* Restructuring and integration costs were $15.2 million and $0.6 million for the six months ended June 30, 2025 and 2024, respectively. The restructuring and integration costs for the six months ended June 30, 2025 were related to the same factors discussed above in the quarterly section.

### Interest Income and Other Income

*Three months June 30, 2025 compared to June 30, 2024.* For the three months ended June 30, 2025 and 2024, interest income and other income was income of $6.0 million and $1.6 million, respectively. The increase over the comparable period is primarily due to an increase in the net unrealized fair value of deferred compensation plan investments.

*Six months ended June 30, 2025 compared to June 30, 2024.* For the six months ended June 30, 2025 and 2024, interest income and other income was income of $6.7 million and $5.1 million, respectively. The income for the six months ended June 30, 2025 and 2024 was related to interest income and an increase in the net unrealized fair value of deferred compensation plan investments.

### Interest Expense and Other Financing Costs

*Three months ended June 30, 2025 compared to June 30, 2024.* Interest expense and other financing costs decreased by $3.0 million to $13.2 million for the three months ended June 30, 2025, compared to $16.3 million for the same period in 2024 due a decrease in the average interest rate and principal balance over the comparable period.

*Six months ended June 30, 2025 compared to June 30, 2024.* For the six months ended June 30, 2025 and 2024, interest expense and other financing costs were $26.4 million and $32.8 million, respectively. The year-over-year decrease is due to the same factors as discussed above in the quarterly section. Refer to Note 9, Debt, for further details on the 2019 Credit Agreement.

### Income Tax Expense

*Three months ended June 30, 2025 compared to June 30, 2024.* The effective tax rate for the three months ended June 30, 2025 and 2024 was 32.5% and 22.5%, respectively. The effective tax rate for the three months ended June 30, 2025 was higher than the effective tax rate for the same period in 2024 due to decreased excess tax benefits on share-based compensation and increased non-deductible expenses. The increase in non-deductible expenses was primarily driven by $27.3 million of gross non-deductible transaction costs that were incurred related to the Amundi US acquisition.

*Six months ended June 30, 2025 compared to June 30, 2024*. For the six months ended June 30, 2025 and 2024, the effective tax rate was 27.9% and 22.5%, respectively. The year-over-year increase in the effective tax rate is due to the same factors discussed in the quarterly section. Refer to Note 8, Income Taxes, for further details on the Company's income taxes.

### Supplemental Non‑GAAP Financial Information

We use non-GAAP performance measures to evaluate the underlying operations of our business. Due to our acquisitive nature, there are a number of acquisition and restructuring related expenses included in GAAP measures that we believe distort the economic value of our organization and we believe that many investors use this information when assessing the financial performance of companies in the investment management industry. We have included these non-GAAP measures to provide investors with the same financial metrics used by management to assess the operating performance of our Company. The non-GAAP measures we report are Adjusted EBITDA and Adjusted Net Income.

The following table sets forth a reconciliation from GAAP financial measures to non-GAAP measures for the periods indicated:

*(in thousands)*

| Reconciliation of non-GAAP financial measures: | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| **Net income (GAAP)** | **$58,734** | **$74,251** | **$120,709** | **$129,942** |
| Income tax expense | (28,252) | (21,524) | (46,678) | (37,721) |
| **Income before income taxes** | **86,986** | **95,775** | **167,387** | **167,663** |
| Interest expense(1) | 12,200 | 15,468 | 24,721 | 31,179 |
| Depreciation(2) | 3,236 | 2,252 | 5,404 | 4,521 |
| Other business taxes(3) | 693 | 414 | 1,615 | 783 |
| Amortization of acquisition-related intangible assets(4) | 18,558 | 5,299 | 23,822 | 10,631 |
| Stock-based compensation(5) | 2,107 | 940 | 3,160 | 2,267 |
| Acquisition, restructuring and exit costs(6) | 53,990 | (4,520) | 67,311 | 10,185 |
| Debt issuance costs(7) | 755 | 874 | 1,504 | 1,629 |
| **Adjusted EBITDA** | **$178,525** | **$116,502** | **$294,924** | **$228,858** |

*(in thousands)*

| Reconciliation of non-GAAP financial measures: | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| **Net income (GAAP)** | **$58,734** | **$74,251** | **$120,709** | **$129,942** |
| Adjustments to reflect the operating performance of the Company: |  |  |  |  |
| i. Other business taxes(3) | 693 | 414 | 1,615 | 783 |
| ii. Amortization of acquisition-related intangible assets(4) | 18,558 | 5,299 | 23,822 | 10,631 |
| iii. Stock-based compensation(5) | 2,107 | 940 | 3,160 | 2,267 |
| iv. Acquisition, restructuring and exit costs(6) | 53,990 | (4,520) | 67,311 | 10,185 |
| v. Debt issuance costs(7) | 755 | 874 | 1,504 | 1,629 |
| Tax effect of above adjustments(8) | (12,330) | (753) | (17,657) | (6,374) |
| **Adjusted Net Income** | **$122,507** | **$76,505** | **$200,464** | **$149,063** |
| Tax benefit of goodwill and acquired intangibles(9) | $10,255 | $10,141 | $20,396 | $19,889 |

Adjustments made to GAAP Net Income to calculate Adjusted EBITDA and Adjusted Net Income, as applicable, are:

(1) Adding back interest paid on debt and other financing costs, net of interest income.

(2) Adding back depreciation on property and equipment.

(3) Adding back other business taxes.

(4) Adding back amortization expense on acquisition‑related intangible assets.

(5) Adding back stock‑based compensation 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.

(6) Adding back direct incremental costs of acquisitions, including restructuring costs.

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Acquisition-related costs | $25,780 | $3,049 | $34,530 | $4,075 |
| Restructuring and integration costs | 13,994 | 105 | 15,159 | 597 |
| Change in value of consideration payable for acquisition of business | 1,092 | (8,200) | 4,498 | 4,000 |
| Personnel compensation and benefits | 13,124 | 526 | 13,124 | 1,513 |
| **Total acquisition, restructuring and exit costs** | **$53,990** | **$(4,520)** | **$67,311** | **$10,185** |

(7) Adding back debt issuance costs.

(8) Subtracting an estimate of income tax expense applied to the sum of the adjustments above.

(9) Represents the tax benefits associated with deductions allowed for intangible assets and goodwill generated from prior acquisitions in which we 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. Due to our acquisitive nature, tax deductions allowed on acquired intangible assets and goodwill provide us with a significant supplemental economic benefit.

Non-GAAP measures should be considered in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. Our non-GAAP measures may differ from similar measures at other companies, even if similar terms are used to identify these measures.

### Liquidity and Capital Resources

Our primary uses of cash relate to repayment of our debt obligations, funding of acquisitions and working capital needs, repurchasing of shares and payment of dividends, which are all expected to be met through cash generated from our operations and available capital resources.

The following table shows our liquidity position as of June 30, 2025 and December 31, 2024.

*(in thousands)*

|  | June 30, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Cash and cash equivalents | $107,870 | $126,731 |
| Accounts and other receivables | 205,240 | 100,667 |
| Undrawn commitment on revolving credit facility(1) | 100,000 | 100,000 |
| Accounts and other payables | (156,887) | (109,599) |

(1) The balances at June 30, 2025 and December 31, 2024 represent the Company’s $99.9 million revolving credit facility and a $0.1 million standby letter of credit used as collateral for THB’s real estate location.

We manage our cash balances in order to fund our day-to-day operations. Our accounts receivable consists primarily of investment management fees that have been earned but not yet received from clients, income and other taxes receivable, and amounts receivable from the funds. We perform a review of our receivables on a monthly basis to assess collectability.

We maintained a $100.0 million revolving credit facility at June 30, 2025 and December 31, 2024 (under the 2019 Credit Agreement) which had approximately $100.0 million undrawn as of June 30, 2025 and December 31, 2024. On June 7, 2024, the Company entered into the Fifth Amendment to the 2019 Credit Agreement, extending the maturity date of the $100.0 million senior secured first lien revolving facility from July 1, 2024 to March 31, 2026, and decreasing the drawn interest rate margin by 0.50% per annum. The revolving facility otherwise remains subject to substantially the same terms as those set forth in the 2019 Credit Agreement. The Company incurred $1.0 million in upfront fees, arranger fees and other third party costs related to the Fifth Amendment to the 2019 Credit Agreement, which were recorded to revolving credit facility debt issuance cost in other assets.

### 2021 Debt Repricing

On February 18, 2021, the Company entered into the Second Amendment (the “Second Amendment”) to the 2019 Credit Agreement with the other loan parties thereto, Barclays Bank PLC, as administrative agent, and the Royal Bank of Canada as fronting bank. Pursuant to the Second Amendment, the Company repriced the existing term loans with replacement term loans in an aggregate principal amount of $755.7 million (the “Repriced Term Loans”). The Repriced Term Loans have substantially the same terms as the previously existing term loans, including the same maturity date of July 2026, except that the Repriced Term Loans provided for a reduced applicable margin on LIBOR of 25 basis points. After the Second Amendment, the applicable margin on LIBOR under the Repriced Term Loans was 2.25%.

### 2021 Incremental Term Loans

On December 31, 2021, the Company entered into the Third Amendment (the “Third Amendment”) to the 2019 Credit Agreement with the guarantors party thereto, Barclays Bank PLC, as administrative agent, and the lenders party thereto from time to time. Pursuant to the Third Amendment, the Company obtained incremental term loans (the “2021 Incremental Term Loans”) in an aggregate principal amount of $505.0 million and used the proceeds to fund the WestEnd Acquisition and to pay fees and expenses incurred in connection therewith. The 2021 Incremental Term Loans mature in December 2028 and bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%.

### 2022 LIBOR to Term SOFR Rate Transition

On September 23, 2022, the Company entered into the Fourth Amendment (the “Fourth Amendment”) to the 2019 Credit Agreement to change the interest rate on the Repriced Term Loans and 2021 Incremental Term Loans from LIBOR to a rate based on SOFR plus a ten-basis point credit spread adjustment. There was no change to the applicable margin on the referenced rate as a result of the Fourth Amendment.

The LIBOR rate loans outstanding as of the Fourth Amendment’s effective date continued as LIBOR rate loans until the end of their then current interest periods. The 2021 Incremental Term Loans converted into Term SOFR loans on September 30, 2022, while the Repriced Term Loans converted into Term SOFR loans on October 6, 2022. Also on October 6, 2022, the interest periods for the Repriced Term Loans and 2021 Incremental Term Loans were aligned and the three-month Term SOFR rate was elected for all the Company’s term loans.

### 2020 Swap Transaction

In the fourth quarter of 2023, the Company monetized the gain on the floating-to-fixed interest rate swap transaction (“Swap”) entered into in 2020 to effectively fix the interest rate on $450 million of its outstanding Term Loan through the Term Loan maturity date of July 2026.

The deferred gain on the termination of the Swap is being amortized on a straight-line basis through July 1, 2026 and is included in interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations.

For the three months ended June 30, 2025 and 2024, the Company recorded $4.2 million, respectively, in amortization of deferred gain on Swap monetization. For the six months ended June 30, 2025 and 2024, the Company recorded $8.3 million, respectively, in amortization of deferred gain on Swap monetization. As of June 30, 2025 and December 31, 2024, the unamortized deferred gain on Swap monetization was $16.7 million and $24.9 million, respectively, before tax.

The Swap was designated as a cash flow hedge. Prior to its termination, the Swap was measured at fair value with mark-to-market gains or losses deferred and included in AOCI(L), net of tax, to the extent the hedge was determined to be effective. Gains or losses were reclassified to interest expenses and other financing costs on the unaudited Condensed Consolidated Statements of Operations in the same period during which the hedged transaction affected earnings.

Due to the termination of the Swap, there was no amount receivable from the Swap counterparty at June 30, 2025 and December 31, 2024. Refer to Note 14, Derivatives, for further information on the Swap.

### Contingent Consideration

At June 30, 2025 and December 31 2024, the estimated fair value of the contingent consideration payable to the sellers was $80.7 million and $139.9 million, respectively resulting from the WestEnd Acquisition. For the three months and six months ended June 30, 2025, the Company recorded an increase of $1.1 million and $4.5 million in the contingent payment liability associated with the WestEnd Acquisition, which is included in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets. During the quarter ended June 30, 2025, the company paid $63.7 million in cash to sellers for the second earn-out period.

There were no other significant changes to our contractual obligations as reported in our Annual Report on Form 10-K for the year ended December 31, 2024.

### Capital Requirements

Victory Capital Services is a registered broker-dealer subject to the Uniform Net Capital requirements under the Exchange Act, which requires maintenance of certain minimum net capital levels. In addition, we have certain non-U.S. subsidiaries that have minimum capital requirements. As a result, such subsidiaries of our Company may be restricted in their ability to transfer cash to their parents.

### Cash Flows

The following table is derived from our unaudited Condensed Consolidated Statements of Cash Flows:

*(in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $74,502 | $148,388 |
| Net cash provided by (used in) investing activities | 78,116 | (1,515) |
| Net cash used in financing activities | (171,979) | (151,409) |

45

***Operating Activities –*** Cash provided by operating activities during the six months ended June 30, 2025 was $74.5 million, compared to $148.4 million of cash provided by operating activities for the same period in 2024. The $73.9 million decrease in cash provided by operating activities is due to an $88.2 million increase in working capital items and a $9.2 million decrease in net income partially offset by a $23.5 million increase in non-cash items.

Cash provided by operating activities during the six months ended June 30, 2024 was $148.4 million and comprised of $129.9 million and $37.8 million of net income and non-cash items, respectively, partially offset by $19.4 million in working capital source of cash.

***Investing Activities –*** Cash provided by investing activities during the six months ended June 30, 2025 was $78.1 million and consisted of primarily of cash acquired from acquisition of $53.6 million and net trading activity of $27.0 million partially offset by purchases of property and equipment of $2.5 million.

Cash used in investing activities during the six months ended June 30, 2024 was $1.5 million and consisted of primarily of property and equipment purchases of $0.7 million and $0.8 million of net trading activity.

***Financing Activities –*** Cash used in financing activities during the six months ended June 30, 2025 was $172.0 million and was mostly attributable to payment of consideration for acquisition, payment of dividends, repurchases of common stock, and net activity related to stock-based equity awards of $63.7 million, $73.6 million, $26.4 million, and $8.2 million, respectively.

Cash used in financing activities during the six months ended June 30, 2024 was $151.4 million and was mostly attributable to payment of consideration for acquisition, payment of dividends, repayment of long-term debt, repurchases of common stock, and net activity related to stock-based equity awards of $80.0 million, $46.4 million, $9.5 million, $5.1 million, and $9.6 million, respectively.

## Market risk

As filed, 6,202 characters.

### Market Risk

Substantially all of our revenues are derived from investment management, fund administration and distribution fees, which are primarily based on the market value of our AUM. Accordingly, our revenues and net income may decline as a result of our AUM decreasing due to depreciation of our investment portfolios. In addition, such depreciation could cause our clients to withdraw their assets in favor of other investment alternatives that they perceive to offer higher returns or lower risk, which could cause our revenues and net income to decline further.

The value of our AUM was approximately $299 billion at June 30, 2025. A 10% increase or decrease in the value of our AUM, if proportionately distributed over all of our strategies, products and client relationships, would cause an annualized increase or decrease in our revenues of approximately $146.5 million at our weighted-average fee rate of 49 basis points for the quarter ended June 30, 2025. Because of declining fee rates from larger relationships and differences in our fee rates across investment strategies, a change in the composition of our AUM, in particular, an increase in the proportion of our total AUM attributable to strategies, clients or relationships with lower effective fee rates, could have a material negative impact on our overall weighted-average fee rate. The same 10% increase or decrease in the value of our total AUM, if attributed entirely to a proportionate increase or decrease in the AUM of the Victory Funds, USAA Funds, and Pioneer Funds to which we provide a range of services in addition to those provided to institutional separate accounts, would cause an annualized increase or decrease in our revenues of approximately $182.4 million at the Victory Funds’, USAA Funds’ and Pioneer Funds’ aggregate weighted-average fee rate of 61 basis points for the quarter ended June 30, 2025. If the same 10% increase or decrease in the value of our total AUM was attributable entirely to a proportionate increase or decrease in the assets of our institutional separate accounts, it would cause an annualized increase or decrease in our revenues of approximately $104.7 million at the weighted-average fee rate across all of our institutional separate accounts of 35 basis points for the quarter ended June 30, 2025.

As is customary in the investment management industry, clients invest in particular strategies to gain exposure to certain asset classes, which exposes their investment to the benefits and risks of those asset classes. We believe our clients invest in each of our strategies in order to gain exposure to the portfolio securities of the respective strategies and may implement their own risk management program or procedures. We have not adopted a corporate‑level risk management policy regarding client assets, nor have we attempted to hedge at the corporate level or within individual strategies the market risks that would affect the value of our overall AUM and related revenues. Some of these risks, such as sector and currency risks, are inherent in certain strategies, and clients may invest in particular strategies to gain exposure to particular risks. While negative returns in our strategies and net client cash outflows do not directly reduce the assets on our balance sheet (because the assets we manage are owned by our clients, not us), any reduction in the value of our AUM would result in a reduction in our revenues.

### Exchange Rate Risk

A portion of the accounts that we advise hold investments that are denominated in currencies other than the U.S. dollar. To the extent our AUM are denominated in currencies other than the U.S. dollar, the value of that AUM will decrease with an increase in the value of the U.S. dollar or increase with a decrease in the value of the U.S. dollar. Each investment team monitors its own exposure to exchange rate risk and makes decisions on how to manage that risk in the portfolios they manage. We believe many of our clients invest in those strategies in order to gain exposure to non‑U.S. currencies, or may implement their own hedging programs. As a result, we generally do not hedge an investment portfolio’s exposure to non‑U.S. currency.

We have not adopted a corporate-level risk management policy to manage this exchange rate risk. Assuming 9% of our AUM are invested in securities denominated in currencies other than the U.S. dollar and excluding the impact of any hedging arrangement, a 10% increase or decrease in the value of the U.S. dollar would decrease or increase the fair value of our AUM by approximately $2.7 billion, which would cause an annualized increase or decrease in revenues of approximately $13.2 million at our weighted-average fee rate for the business of 49 basis points for the quarter ended June 30, 2025.

### Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. On March 27, 2020, the Company executed the Swap, a floating-to-fixed interest rate swap transaction, to effectively fix the interest rate at 3.465% on $450 million of its outstanding Term Loan through the Term Loan maturity date of July 2026. On February 18, 2021, pursuant to the Second Amendment, the Company lowered the spread on the Term Loan by 0.25% resulting in a new fixed rate of 3.215% on the $450 million of Term Loan subject to the Swap. On September 26, 2022, the Company and the Swap counterparty executed an amendment to the Swap to update LIBOR conventions to SOFR conventions and to modify the fixed rate for the change from three-month LIBOR to three-month Term SOFR effective on October 6, 2022. On October 30, 2023, the Company monetized the gain on the Swap and entered into an agreement to terminate the Swap, which was effective on October 30, 2023. Refer to Note 14, Derivatives, for further information on the Swap. At June 30, 2025, we were exposed to interest rate risk as a result of the amounts outstanding under the 2019 Credit Agreement, as amended. Refer to Note 9, Debt, for a description of the amounts outstanding as of such date and the applicable interest rate.

## Controls and procedures

As filed, 1,326 characters.

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate, to allow for timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) at June 30, 2025. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.

### Changes in Internal Control over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 936 characters.

For a discussion of our potential risks and uncertainties, see the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC and the information contained in this report. The declaration, payment and determination of the amount of our quarterly dividends may change at any time. In making decisions regarding our quarterly dividends, we consider general economic and business conditions, our strategic plans and prospects, our businesses and investment opportunities, our financial condition and operating results, working capital requirements and anticipated cash needs, contractual restrictions (including under the terms of our 2019 Credit Agreement as amended) and legal, tax, regulatory and such other factors as we may deem relevant. There have been no material changes to the risk factors in our Annual Report on Form 10-K for the year ended December 31, 2024.

Filed Aug 8, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-105496. Last ingested by Listed: Nov 6, 2026, 17:29 ET. No prices; not investment advice.