VCTR

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:30 a.m. ET Director of Investor Relations and Responsible Business - Carly Thomas Chairman and Chief Executive Officer - David Brown President, Chief Financial and Administrative Officer - Michael Policarpo Need a quote from a Motley Fool analyst? Email [email protected] Operator: Good morning, and welcome to the Victory Capital Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Ms. Carly Thomas, Director of Investor Relations and Responsible Business. Please go ahead, Ms. Thomas. Carly Thomas: Thank you, operator, and good morning, everyone. Before I turn the call over to Chairman and CEO, David Brown, I would like to remind you that during today's conference call, we may make several forward-looking statements. Victory Capital's actual results may differ materially from these statements. Please refer to our SEC filings for a list of some of the risk factors that may cause actual results to differ materially from those expressed on today's call. Victory Capital assumes no duty and does not undertake any obligation to update any forward-looking statements. Our press release, which was issued after the market closed yesterday disclosed both GAAP and non-GAAP financial results. We believe the non-GAAP measures enhance the understanding of our business and our performance. Reconciliations between these non-GAAP measures and the most comparable GAAP measures are available in the tables that can be found in our earnings press release and in the slides accompanying this call, both of which are available on the Investor Relations section of our website at ir.vcm.com. It is now my pleasure to turn the call over to David Brown, Chairman and CEO. David? David Brown: Thanks, Carly. Good morning, everyone, and welcome to Victory Capital's Second Quarter 2026 Earnings Call. I'm also joined today by Michael Policarpo, our President, Chief Financial and Administrative Officer. I will start with an overview of our second quarter results, which I am pleased to say were exceptional, setting new records across multiple dimensions of our business. After that, I will turn the call over to Mike to review the financial results in greater detail. Following our prepared remarks, we will be available to answer your questions. On Slide 5, you will see that Q2 2026 was the strongest quarter in our history. Total client assets reached $346 billion, up 11% from Q1 and 15% higher than at the end of the same period last year. Long-term gross flows of $22 billion were up 17% quarter-over-quarter and 43% versus the same quarter last year. We generated record net long-term inflows of $4.2 billion, reflecting the strategic investments we have made, the momentum we have built across all our distribution channels and the strength of our investment performance by our investment franchises and our solutions platform. From a financial perspective, adjusted EBITDA reached $243 million, and our adjusted EBITDA margin expanded to 55.8%. Adjusted earnings per share was $2.21, up 21% from last quarter and 41% higher than Q2 of last year, all were records for our company. Moreover, the Pioneer integration is now complete and the full $110 million in net run rate expense synergies have been fully realized. Turning to Slide 6. Investment performance remains a source of great pride for our organization, and it continues to be the foundation of what we do. Strong investment performance is not incidental to what we do. It is the reason clients hire us and the reason they stay with us. In an industry where trust is earned through long-term investment results, we believe our track record speaks for itself. As of June 30, 2026, 57 of our mutual funds and ETFs earned 4- or 5-star overall ratings from Morningstar, which is 60% of our rated AUM. This represents over half of our Morningstar-rated funds. By comparison, only about 1/3 of Morningstar-rated funds industry-wide carry a 4- or 5-star rating. When we look at performance against benchmarks, the picture is equally compelling. 71% of our AUM outperformed over the 1-year period, 68% over 3 years, 65% over 5 years and an impressive 81% over the 10-year period. On a strategy count basis, 66%, 64%, 67% and 69% of strategies outperformed their benchmarks over those same time horizons. This breadth of outperformance across time periods, asset classes and investment styles reflects the talent and discipline of our investment professionals across our platform. We remain deeply committed to delivering excellent investment outcomes for our clients. Slide 7 is the one that I find particularly compelling when you step back and look at how far we have come as a company. When we completed our MBO in 2013, Victory Capital was at its core, a U.S. equity manager with $18 billion in AUM. At the time, approximately 80% of our AUM was in U.S. equity strategies with fixed income and global equity each making up about 10%. We were excellent at what we did, but we were highly concentrated in U.S. equities. That picture had already begun to evolve by our IPO in 2018 when we had grown to over $60 billion in AUM. U.S. equity had moved to about 73% of AUM with fixed income at 12%, global equity at 7% and solutions at 5%, which included the ETF business in its infancy through a small acquisition. The seeds of diversification had been planted, but the transformation was still in its early stages. Fast forward to today, and that story is almost unrecognizable in the best possible way. U.S. equity now represents just 31% of our $346 billion in total client assets. Our solutions business, which now includes over $23 billion in ETFs, represents 32%. Fixed income has grown to 24% and global and non-U.S. equity stands at 11%. This did not happen by accident as we have been very purposeful and strategic in the growth of our business. Before every acquisition we've made over the past 13 years, we asked ourselves a simple question beyond the stand-alone financial merits. Will this make our company better, more competitive, more resilient and more capable of servicing clients across different market cycles? Our answer has been yes, in every case, an intentional approach to building our exceptional platform into what it is today. We also recognize that self-reflection and our relentless willingness to make our company better is essential to our continued growth. We are constantly reassessing areas of potential growth, guided by our disciplined approach to strengthening our entire business from strategically refining our already diverse product mix, expanding our distribution capabilities to enabling our investment professionals with best-in-class tools and resources. Turning to Slide 8. Our ETF platform continues to be one of the most exciting and consequential growth stories in our business. ETF AUM ended the quarter at $23.2 billion, up 24% year-to-date and 54% year-over-year. Net flows of $1.2 billion in Q2 bring our year-to-date total to $2.5 billion, representing an annualized organic growth rate of 27%. The momentum here is sustained, broad-based and is accelerating as we move through the back half of this year and look forward into the future. I want to spend a moment on how we think about this business because I think it is important context. Back in 2015, we made a deliberate forward-looking decision to acquire the ETF capabilities and infrastructure that form the foundation of what VictoryShares is today. The acquisition included just a few hundred million dollars of ETF assets. But the real story of this business has been what we have built from there. We have never treated this as a static platform. The growth of VictoryShares has been driven by a consistent commitment to product innovation and a disciplined ongoing evaluation of our investment capabilities relative to what we have heard from clients around what they want and need. What distinguishes us in the marketplace is that we are not in the race to 0. Our average fee rate of 34 basis points reflects the fact that we have built a diversified ETF platform, featuring active and rules-based strategies that are organized around innovative investment themes, not a passive product suite competing on price. Importantly, the margins of our ETF business adhere to our firm-wide standards. Our free cash flow ETF series continues to generate strong and consistent inflows. Our flagship free cash flow ETF, VFLO, closed the quarter at $7.8 billion in AUM. In its 3 years since launch, VFLO has outperformed the S&P 500 Russell 1000 Growth and Russell 1000 Value, all with 0 MAG 7 exposure and has earned a Morningstar 5-star overall rating, and we are seeing strong demand from financial advisers throughout our intermediary channel. Across the product suite, we are winning new home office recommendations, deepening relationships with key platform partners and are continuing to add dedicated ETF distribution resources to support that momentum. In addition, our ETFs are now available for sale across Asia and as of this quarter, in Latin America, a new geography that we believe represents a significant long-term growth opportunity. We will continue to leverage our partnership with Amundi and expand our ETF distribution globally. Slide 9 covers our international business, which continues to gain real and meaningful traction. The Amundi partnership is performing exactly as expected and trending above our initial financial expectations. At quarter end, we had $62.6 billion in AUM from clients outside the United States across 61 countries, with 35 of those countries now having more than $100 million in Victory Capital AUM. Importantly, our international business was net flow positive again in the quarter and is year-to-date and has been net flow positive cumulatively since we closed the Pioneer acquisition. Year-to-date, a vast majority of Amundi's client roadshows have been focused on Victory Capital products, a clear reflection of the priority they have placed on bringing our capabilities to their global client base. Amundi has also maintained several Victory Capital strategies on their concentrated focus list across client segments and geographies, providing important structural support for flows. We now sub-advised 23 UCITS spanning equities, fixed income and global multi-asset strategies. Additional UCITS launches are planned in 2026, driven by bottom-up demand signals from Amundi's local distribution teams. The product set is continuing to expand. The sales teams are becoming more familiarized with our product set and the momentum in this channel is increasing materially. Turning to Slide 10. I want to highlight our growth strategy since it is central to how we think about creating long-term value for our shareholders. Since our management buyout in 2013, we have grown AUM by 1,834% from $17.9 billion to $346.1 billion. Every step of that journey has been intentional, a deliberate disciplined decision to build something bigger and better than what existed before. That is what this slide shows. We set out from day 1 with a clear thesis, that the asset management industry was ripe for consolidation, that the right acquirer with the right model could create extraordinary value and that we had both the capability and the conviction to execute on that thesis to create a unique platform. I want to be very clear about one point. This growth did not come from a single deal. It came from building a repeatable institutional quality capability, a model that works, that scales and that we now have executed across multiple transactions of varying size, complexity and in different periods within a market cycle. We know how to identify the right opportunities. We know how to integrate them, and we know how to make the whole organizational platform stronger as a result. We are often asked whether there are enough acquisition targets out there to sustain our strategy. The answer is yes. There are more than 110 investment firms managing between $50 billion and $200 billion in assets and more than 35 firms in the $200 billion to $500 billion range. That is a deep and fragmented opportunity set. The structural forces driving consolidation, regulatory complexity, technology requirements, distribution scale and the economics of running a competitive investment platform are only intensifying. That creates a compelling environment for a proven acquirer like Victory Capital. Our balance sheet is strong, and our execution track record gives me great confidence in our ability to continue delivering transformational growth as we work toward our goal of $1 trillion in assets under management. We remain extremely active from an acquisition perspective, evaluating potential significant opportunities. These kinds of opportunities are never done until they are done, but this is the right time for our company given the strength of our balance sheet and the completion of the Pioneer integration. Slide 11 outlines our capital allocation framework. Strategic acquisitions are and will remain our primary and best use of capital. Over the last 13 years, we have successfully closed 8 acquisitions. Our inorganic growth strategy has helped us deliver over 800% of total shareholder returns since our IPO in 2018. This has also enabled us to grow earnings per share at a 23% compound annual growth rate. This track record is in part a result of a disciplined, consistent approach to inorganic growth that has guided us since the day we started. Second to strategic acquisitions, our commitment to returning capital to shareholders is real and ongoing. Since our IPO, we have returned $1.6 billion in capital to shareholders with $1 billion in shares repurchased. Year-to-date, we have repurchased 3.2 million shares, which is more than we repurchased in all of 2025. This is a meaningful statement about both our conviction in the value of our stock and the strength of our free cash flow generation. In addition, our dividend provides a consistent and reliable return to shareholders. Looking ahead, I am as excited about the future of this company today as I ever have been. We have the people, the platform and the strategy, and in many ways, we are just getting started. I will now turn the call over to Mike to walk through the financial results in more detail. Mike? Michael Policarpo: Thanks, Dave, and good morning, everyone. The financial results review begins on Slide 13. This was a record quarter across the board. Revenue came in at $435 million, up 12% from Q1 and 24% higher than Q2 of last year. Adjusted EBITDA reached $243 million, and our adjusted EBITDA margin was 55.8%. Adjusted net income with tax benefit was $183 million or $2.21 per diluted share, up 21% from last quarter and 41% versus Q2 2025. To put that EPS figure in context, since our IPO in February 2018, our adjusted earnings per diluted share with tax benefit has grown at a compound annual rate of approximately 23%. And on a quarterly basis, EPS is up more than 450% since Q1 2018. That is a remarkable track record of value creation and it reflects the earnings power of our platform. I also would like to take this opportunity to update our long-term adjusted EBITDA margin guidance. Given the demonstrated earnings power of our platform and the completion of the Pioneer integration, we are updating long-term adjusted EBITDA margin guidance from 49% to 50%. This reflects our view of an appropriate normalized margin for this business through a full market cycle, one that accounts for the inherent variability in certain revenue items while reflecting the structural efficiency gains we have made. Importantly, this level also preserves our ability to continue investing in the business and our people, our platform and the future growth initiatives that will drive continued long-term value. We believe 50% is the right anchor for how investors should think about this business over time with a conservative tilt. We repurchased 1.1 million shares during the quarter and returned $138 million to shareholders in total. Our net leverage ratio was 1.0x adjusted EBITDA. On Slide 14, total client assets at quarter end were $346 billion, well diversified across our U.S. retail, U.S. institutional, U.S. direct and international channels, with clients in 62 countries in total. Slide 15 shows our long-term AUM flows. This is a slide we're spending some time on because what we are seeing here is not a 1-quarter phenomenon. We have real and sustained flow momentum in our business. Record long-term gross flows of $22.1 billion were up 43% from Q2 '25, the first quarter post the close of the Pioneer transaction. Net long-term flows of $4.2 billion were also a record, representing a positive swing of nearly $5 billion from the same quarter last year. We were also net flow positive for the full first half of this year, and that momentum has carried into the third quarter. I would describe it as a convergence point. The purposeful investments we have made over the past several years in technology, data, distribution, marketing, product and people are now working together in a way that is showing up in these results. Our U.S. intermediary, U.S. institutional and international channels all contributed during the quarter. Multiple investment franchises generated positive long-term net inflows, including Pioneer Investments, RS Global, RS Value and VictoryShares ETFs. In addition, our one but not yet funded pipeline remains significant across multiple franchises and channels. We expect it to continue to support our positive flow profile as those mandates fund over the coming quarters. Moving to Slide 16. Revenue of $435.4 million was a record, up 12% from Q1 and 24% versus Q2 of last year. This was driven by record average AUM of $331 billion and an average fee rate of 47.9 basis points, which was at the high end of our guidance range. We continue to expect the fee rate to remain in the 46 to 47 basis point range going forward, reflecting the mix of our diversified business. I also want to note that as our platform continues to scale, we are beginning to see the revenue synergies of our expanded organization come through in these results. This represents the next phase of our integration story, where scale begins to support revenue growth. Turning to expenses on Slide 17. Total operating expenses were $241.6 million in Q2. Cash compensation as a percentage of revenue was 22.9%, which is back at normalized levels following the seasonal payroll dynamics in Q1. On a normalized basis, we continue to expect cash compensation to run in the low to mid-20s as a percentage of revenue. Our variable cost structure remains a key feature of our business. More than 2/3 of our total operating expenses are variable, which provides meaningful cushion and flexibility through different market environments. I am pleased to report that the full $110 million of net run rate expense synergies associated with the Pioneer Investments acquisition have now been fully recognized. Our integration is complete. We acquired a business that significantly increased the size and scale of our company, materially expanded our product set and opened our international distribution channel, and we have fully integrated it in 5 quarters. We did all of this while also launching new products and investing in the future growth of the entire platform. On Slide 18, the non-GAAP metrics reflect what this business is capable of delivering. Adjusted EBITDA of $242.7 million and an adjusted EBITDA margin of 55.8% are both records for the company. Adjusted net income with tax benefit of $182.9 million or $2.21 per diluted share was up 21% from Q1 and 41% from Q2 of last year. The consistency of our margins over time speaks for itself, above 49% every single quarter since 2020 and above 50% in the majority of them. This is the result of a purposefully designed, highly efficient, scalable platform and the relentless efforts of the exceptional people who run it day in and day out. Finally, Slide 19 covers our balance sheet and capital management. We ended the quarter with $70 million in cash. We took advantage of a strong market dynamic and repriced our Term Loan B during the quarter, reducing annual interest expense by approximately $2.5 million going forward. And our $100 million revolver remains undrawn. We returned $138 million to shareholders in Q2, including the repurchase of 1.1 million shares of VCTR common stock. Today, the Board declared a regular quarterly cash dividend of $0.50 per share, which will be paid on September 25 to shareholders of record at the close of business on September 10. The balance sheet is in excellent shape, and our strong free cash flow generation gives us the flexibility to pursue all of our capital allocation objectives, strategic acquisitions, investments in our business for long-term growth as well as shareholder returns through both share repurchases and dividends simultaneously. With that, I will turn the call back to the operator for questions. Operator: [Operator Instructions] Your first question comes from the line of Craig Siegenthaler with Bank of America. Craig Siegenthaler: My question is on the Amundi distribution agreement. How is your net flow outlook from this agreement changed since inception? And are you seeing nice net flow breadth? Or is it concentrated in 1 or 2 larger European markets? I think Amundi distributes to more than 60 countries, so there could be some breadth there. David Brown: A couple of points there. One is the -- it is coming really through 3 primary regions. If we look at Asia, that has been a really good flow area for us. Europe has been really good. And then, there are some emerging parts in the Middle East that we're hopeful given some of the distribution agreements that Amundi has just recently entered into. So those are the 3 regions, and we're seeing a lot of activity from meetings to actual fundings and opportunities as we look forward. From a product perspective, we think fixed income has done really well. Global is another area that we are really excited about and then the multi-asset side. So it's not really coming from one product or one area. It's pretty deep and wide, and it's accelerating. Craig Siegenthaler: Thanks, Dave, and flipping the conversation to the other side of the deal, how has Victory helped Amundi sell its product in the U.S. to date? Can you provide color on the 2Q flow trends from that? And also, can you just remind us the underlying economics to Victory on AUM that's distributed in the United States? Michael Policarpo: Craig, it's Mike. The efforts with respect to distributing the Amundi products have continued. I would say they have been focused on UCITS offerings predominantly in Latin America, where we've been able to use our U.S. intermediary contacts to be able to drive some flow. That has been a little bit less than what we've seen for the Amundi distribution of Victory product. And the economics really are similar to that of the distribution of Amundi's products here in the U.S. with that of us -- them distributing our products outside the U.S. We have a revenue share that we split that provides the proper incentive to align the interest both on the investment side and the distribution side. But that component pales in comparison from a size perspective. As we said, there's $62 billion of assets that are outside the U.S. through the Amundi distribution channel of Victory products. Our distribution of their offerings based on the makeup of their offerings is smaller than that. Operator: Your next question comes from the line of Ben Budish with Barclays. Benjamin Budish: Maybe first on the results for the quarter. We sort of have this aggregate investment management fee line. I guess maybe a 2-parter. First, can you maybe talk about what may else be in there this quarter? I know in the past, you talked about periodic performance fees and fulcrum fees and things like that. And then maybe at a higher level, when we look at performance fees, it looks like in '23, '24, pretty consistently around $11 million a year. That stepped up quite a bit in '25, but obviously an outsized Q2. And now it looks like we may have 2 outsized quarters in a row. So it does seem like that line item is structurally stepping up. And if you can maybe talk about how we should think about that going forward separate from sort of the core investment management fee rate? Are there more opportunities? Is performance picking up in a way that's driving better performance fees for the firm? Any details there would be helpful. Michael Policarpo: Sure. Ben, the fees that you see the increase, so we posted a 47.9 basis point quarter. As you know, our guidance long term, which we're comfortable with is 46 to 47 basis points. What you referenced is really some annual fees that from a GAAP perspective, we recorded in Q2. And those are kind of crystallized based on different metrics that really get us back to or slightly above kind of our wrap rates. And so we don't consider them pure performance fees in the standpoint of an alternative type business. And so they are a little bit episodic. But again, that's where I would guide back to the 46 to 47 basis points long term over a full cycle is really how we're looking at the revenue realization of the business. That will tend to fluctuate, of course, based on asset mix, client mix, distribution channel mix. But as we sit here today, that 46% to 47% is really the way to think about it long term. Benjamin Budish: All right. Helpful. And then maybe just on the flows in the quarter and maybe what you're seeing into Q3. I think fixed income, in particular, flipped to be a very nice inflow quarter. Anything in particular to call out there, any outsized mandates? And then any color on what you've been seeing in July and maybe into August? It sounds like you're quite confident on the flow trajectory going forward, so anything that you can share would be great. David Brown: Well, let me start with the third quarter. We've actually seen an acceleration of flows into the third quarter. So it is not something that, as Mike said in his prepared remarks, it's not a 1-quarter phenomenon. It's not one client. It's not an outsized mandate. It's pretty broad and diverse. Really, we think of it as a convergence of all of the investments we have made over the last few years, the integration of the sales forces, the opening up of the distribution outside the U.S. coming together. And we're pretty excited about what the future holds from an organic growth perspective. We now have, I think, the size and the scale and the product depth and the breadth and some of the partnerships we have invested in all coming together. From a fixed income perspective, we're seeing really good activity with some of our shorter -- like some of our shorter-term fixed income type products. Our ETFs, our active fixed income ETFs are doing very well. It's pretty broad-based, and it's also through both 2 franchises, the Victory Income Investors and also through Pioneer. And I think that's just a product of where the client demand is. And then outside the U.S., there is demand for U.S. fixed income as well. Operator: Your next question comes from the line of Michael Cho with JPMorgan. Y. Cho: I'd like to start just big picture, Dave, you gave some thoughts around the trajectory of Victory over the last dozen years. And as you noted, from an M&A perspective, there's still a lot to do, a lot of consolidation. But it also feels like there is not many that are completely additive to Victory's competitiveness in terms of what you've already built. So I know you gave some comments in the past, but can you just talk through how or where Victory may want to increase its competitiveness and in what kind of channels or client segments you'd like to be -- you'd like Victory to be more top of mind? David Brown: Yes. Thank you for the question. We approach acquisitions, I think, a little bit differently than others. We don't specifically target asset classes or go after certain areas I think we start off, and I think we articulated in the script, we start off as, does it make our company better? Can we service our clients? Does it make us more competitive? And I think there are lots of areas that we can add to that answer those questions for us, size and scale, product diversification, distribution enhancement. There's a number of different areas that we look at. And from an acquisition standpoint on where we are today and what the opportunity set is, we couldn't be more excited. We have a lot of opportunity and have evaluated organizations where we look at them and look at them being added to our platform would enhance our business, enhance our competitiveness and move us forward. We have $1 trillion assets under management goal that we are striving for that I think we will hit as we look to the future. And I think there's lots of opportunity in the industry from a consolidation perspective, but specifically to us to allow us to be more competitive than we are. And you can see in the results this quarter where we have fully integrated the Pioneer acquisition. And now we're really in the second piece of that through growth on a flow perspective, from a revenue perspective, I think we're able to service our clients with more products, more attention to their needs. And so there's a lot of areas where acquisitions would really, really help our platform. Y. Cho: Great. If I could just follow up on the expense side, Mike, you upped the guide or the long-term guide. But just one on G&A. If we just look -- and G&A remains about $20 million, $22 million a quarter. I guess this is post Pioneer despite revenues that are maybe almost $100 million higher per quarter. I recognize Victory has got a unique model with investment franchises. But can you just flesh out trends in terms of G&A and the leverage that you're able to drive in that line? And any thoughts on kind of incremental areas of focus or investments as Victory's scale continues to expand with more clients, more channels and more assets? Michael Policarpo: Sure. I think as you think about the platform that we built, it has been built to scale. We talk about greater than 2/3 of our expenses being variable from compensation to distribution-related fees to a number of our back-office service providers that we outsource. So that really then leaves, if you will, kind of the G&A as more controllable or a little bit more from a fixed perspective where we're making some investments. That number, to your point, has been $21 million to $23 million a quarter. We're comfortable with that at this time. It does include, and I think Dave made reference to it, we've continued to invest in the business through the Pioneer integration, the opportunity set for us to get more scale distribution to make investments in technology, in AI, to bring new products to market. All of that has kind of been over the last several years. So that was really our impetus now with the Pioneer integration complete to change the long-term margin guidance from 49% to 50%. As you look at the trajectory that we're on, we're comfortable that we can operate the business at least 50% margins, inclusive of the investments that we've made and that we plan to make. We made a number of investments in U.S. intermediary to really bring forth more partnerships, more data usage, more sponsorships. And I think that, as Dave mentioned earlier, is bringing forth the net flows and the organic growth convergence point that we expected. So I think going forward, we'll continue to monitor it, but we're comfortable at that level from a G&A perspective, with the majority of the expenses really being variable with the AUM and revenue of the business. Operator: Your next question comes from the line of Michael Cyprys with Morgan Stanley. Michael Cyprys: Maybe just coming back to your $1 trillion target and some of the M&A that you're thinking about in the years ahead. Maybe if you could just help unpack how those conversations are progressing, what that pipeline looks like, the types of properties that you're thinking about, how you think about all of that progressing? David Brown: Yes. Our conversations are going very well. We are making good progress in our process. And then I would also note that, as we said in our prepared remarks, we're done the Pioneer integration. This is the right time for our organization. Our balance sheet is as healthy as it's ever been with our leverage at 1.0. And so this is the right time for our organization. I think we've proven over our history as a public company, even before that as a private company that we have been able to buy businesses that looked very different, were very different sizes, had very different owners and really integrate all of them with great success. We have a unique capability for this industry to evaluate businesses, to buy the business in a smart way to add lots of value for our shareholders and to better our platform. And I think there is a ton of opportunity going forward to repeat that many times. We're in no rush, but this is the right time for our organization. And I also think that given what's happening in the industry, some of the pressures for firms that are staring down technology investments, regulatory issues, the need for size and scale on the distribution side, this is a really, really great time for firms like us that can add a lot of value to firms that maybe need something that they're unable to provide for themselves. So we're really encouraged, and we have a track record over a long period of time of identifying and then executing on them. Michael Cyprys: Great. And just on the margin, quite an impressive output in the quarter here. Just curious as you think about that, how do you know you're investing enough in the business to drive growth ahead in the coming years? And maybe you could speak to some of the top areas of investment that you're going to be looking to make over the next 12 to 24 months? David Brown: Yes. I think our results really answer the question of, are we investing enough to drive growth given our results around gross and net flows and kind of what our guide is going forward. And I think about where we're investing, we're investing in product development. We're investing in AI and technology. We're investing a lot in our distribution with our distribution partners. I think something that separates us from many others is I think we're good investors when we think about investing our money in getting return. And so we have industry-leading margins. And I think you can have industry-leading margins and also have organic growth. And I think that comes down to is, where you're investing, how you're investing. And I think we're set up very nicely to continue to provide our shareholders with industry-leading margins and also with growth. Operator: [Operator Instructions] Your next question comes from Alex Blostein with Goldman Sachs Group. Alexander Blostein: I wanted to go back, Dave, to a comment you made in your prepared remarks when you talked about a significant pipeline, and I think Mike referenced that as well. Can you help us maybe size the won-but-unfunded pipeline and flows that you see sources, strategies and kind of maybe how that compares to prior periods just to kind of help better frame the forward flow outlook? David Brown: Alex, it's one of the larger kind of won but not yet funded pipelines that we've had. The areas and then the asset classes. From an asset class perspective, again, fixed income, our ETF platform, our global and our multi-asset are areas where we're seeing a lot of strength coming from outside the U.S. through our intermediary channel and then also through our institutional channel. So it's really through all of the distribution channels that we're present in. And all of that is supported by really good investment performance. And so part of the formula is I think we have really expanded our distribution reach, but we also have now a wider product set and that wider product set is performing really well, which is the formula to have a really nice and kind of deep and broad, won but not yet funded. We don't size it from a dollar perspective, but what I can tell you is it's probably one of the larger ones we've had organizationally. Alexander Blostein: Okay. Great. Helpful. And then from the capital management perspective, the balance sheet is in a really good place. You talked about refining the loan, which is great. How -- in the absence of, I guess, M&A or just rather keeping that aside, how should we think about the trajectory of share repurchases from these levels? David Brown: Yes. I mean our #1 priority with our balance sheet is to do strategic acquisitions. Everything else is second to that. But given where we are with our business and the size of our cash flow, we can do both. And we have said that we'll be opportunistic, and it will be around buying our shares. And I think we bought more shares in the first half of this year than we bought all of last year. So we'll be opportunistic about that. I think that's a -- that is part of the way we're going to allocate our capital. I wouldn't necessarily run rate every quarter forward. Some of it's going to be opportunistic. Some of it's going to be around strategic acquisitions. But I would say buying shares back is our second, and then the dividend is an ancillary piece of it. Operator: There are no further questions at this time. I will now turn the call back to David Brown for closing remarks. David Brown: Thank you. Before we close, a few items to note. We will be publishing our July monthly AUM data before the market opens on August 12. I also want to invite continued engagement with our team. We have a very busy conference and roadshow schedule in September and October, and we look forward to seeing many of you along the way. In the meantime, we welcome your questions and are happy to connect ahead of those events. We thank you for your continued support of Victory Capital, and we look forward to speaking with you again soon. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Victory Capital, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Victory Capital wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Victory Capital (VCTR) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Victory Capital Holdings (VCTR) is back in focus after its second quarter 2026 earnings call. Management highlighted an active acquisition pipeline supported by what it described as a strong balance sheet and free cash flow. See our latest analysis for Victory Capital Holdings. The latest earnings beat and active acquisition commentary sit alongside strong recent price momentum for Victory Capital Holdings, with a 30 day share price return of 22.57% and a year to date share price return of 68.74%, while the 5 year total shareholder return stands at 261.25%. If you are looking beyond Victory Capital Holdings for other ideas in financial services and beyond, this is a good moment to broaden your search with 20 top founder-led companies Bulls see Victory Capital Holdings as a cash generative acquirer that could justify a richer multiple after the recent surge. Bears worry the valuation already prices in flawless execution. Which side do the current numbers support in the next stage of the valuation work up? The most followed narrative currently places Victory Capital Holdings' fair value at $96.33, compared with a last close of $108.16. This frames the latest rally in a different light. Read the complete narrative. Want to see how Victory Capital Holdings gets from today’s earnings base to that future profit profile and margin mix? The key assumptions may surprise you. Result: Fair Value of $96.33 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, you still need to watch for continued asset outflows and fee compression, which could pressure Victory Capital Holdings' revenue and margins, and undermine the current fair value story. Find out about the key risks to this Victory Capital Holdings narrative. The first narrative frames Victory Capital Holdings as 12.3% overvalued based on a discounted cash flow style approach. The market is also looking at a simple P/E check. VCTR trades on 18.7x earnings versus 37.7x for the US Capital Markets industry and a fair ratio of 20.4x, which points to a less stretched picture. How much weight do you put on a relative earnings multiple compared with the cash flow story? See what the numbers say about this price — find out in our valuation breakdown. The valuation debate around Victory Capital Holdings is clearly split, so treat this as a prompt to review the details yourself and move quickly if needed, starting with the 3 key rewards. If you stop with Victory Capital Holdings, you risk missing other stocks that fit your style. Put a few more ideas on your radar using the Simply Wall Street Screener. Target long term compounding opportunities by checking companies that appear undervalued on fundamentals through the 49 high quality undervalued stocks. Strengthen your income focus by scanning for companies with robust payouts using the 8 dividend fortresses. Prioritise resilience by reviewing stocks that score well on stability using the 78 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include VCTR. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Victory Capital Holdings, Inc.? Here are five stocks we like better. Record second-quarter performance: Client assets rose 15% year over year to $346 billion, while revenue increased 24% to $435.4 million. Adjusted EBITDA reached $243 million, and adjusted earnings per share rose 41% year over year to $2.21. Strong flows and product momentum: Long-term net inflows hit a record $4.2 billion, supported by broad-based demand across fixed income, ETFs and international strategies. ETF assets grew 54% year over year to $23.2 billion, with $2.5 billion of year-to-date net inflows. Growth and shareholder returns remain priorities: Victory fully realized $110 million in Pioneer integration synergies and is targeting $1 trillion in assets over time, with acquisitions remaining its top capital-allocation priority. The company returned $138 million to shareholders in the quarter, repurchased 1.1 million shares and declared a $0.50 quarterly dividend. Victory Capital (NASDAQ:VCTR) reported record second-quarter results for 2026, supported by higher client assets, record long-term net inflows, expanded profitability and the completion of its Pioneer Investments integration. Total client assets reached $346 billion at June 30, up 11% from the first quarter and 15% from a year earlier. Long-term gross flows rose 17% sequentially and 43% year over year to $22 billion, while net long-term inflows totaled a record $4.2 billion. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Chairman and CEO David Brown said the company’s results reflected investments in distribution, technology, products and personnel, as well as investment performance across its franchises and solutions platform. Revenue increased 12% from the prior quarter and 24% from a year earlier to a record $435.4 million. The company reported adjusted EBITDA of $243 million and an adjusted EBITDA margin of 55.8%, both records. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Adjusted net income with tax benefit was $182.9 million, or $2.21 per diluted share, up 21% sequentially and 41% from the second quarter of 2025. President, Chief Financial and Administrative Officer Michael Policarpo said adjusted earnings per diluted share with tax benefit had increased at an approximately 23% compound annual growth rate since Victory Capital’s 2018 IPO. Following completion of the Pioneer integration, the company raised its long-term adjusted EBITDA margin guidance from 49%-50%. Policarpo said Victory Capital views 50% as an appropriate long-term normalized margin through a full market cycle, while preserving capacity to invest in its business and growth initiatives. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling The company said it fully realized $110 million in net run-rate expense synergies from the Pioneer Investments acquisition. Total operating expenses were $241.6 million during the quarter, while cash compensation represented 22.9% of revenue. Policarpo said more than two-thirds of operating expenses are variable, providing flexibility across market environments. Brown said investment performance remained central to client retention and growth. As of June 30, 57 Victory Capital mutual funds and ETFs held four- or five-star overall Morningstar ratings, representing 60% of the company’s rated assets under management. 71% of AUM outperformed benchmarks over one year. 68% outperformed over three years. 65% outperformed over five years. 81% outperformed over 10 years. The company’s ETF business continued to expand. ETF AUM ended the quarter at $23.2 billion, up 24% year to date and 54% from a year earlier. Second-quarter ETF net flows were $1.2 billion, bringing the year-to-date total to $2.5 billion and representing an annualized organic growth rate of 27%. Victory’s flagship free-cash-flow ETF, VFLO, ended the quarter with $7.8 billion in assets. Brown said the fund has outperformed the S&P 500, Russell 1000 Growth and Russell 1000 Value indexes during its three years since launch, while carrying no exposure to the “Mag Seven” stocks. The fund has also received a five-star overall Morningstar rating, he said. Victory Capital said its ETFs are now available across Asia and, beginning in the second quarter, Latin America. The company plans to use its relationship with Amundi to continue expanding global ETF distribution. International client AUM totaled $62.6 billion across 61 countries. The international business was net-flow positive during the quarter, year to date and cumulatively since the Pioneer acquisition closed, according to management. Brown said flows have been strongest across Asia and Europe, with emerging opportunities in the Middle East. Fixed income, global strategies and multi-asset products have contributed to international demand. The company now sub-advises 23 UCITS products spanning equity, fixed-income and global multi-asset strategies, with additional UCITS launches planned in 2026 based on demand from Amundi’s local distribution teams. Management said the positive flow trend extended into the third quarter. Brown described the momentum as broad-based rather than driven by a single client or outsized mandate. He cited activity in short-term fixed-income products, active fixed-income ETFs and demand across the Victory Income Investors and Pioneer franchises. Policarpo said all of the company’s major channels—U.S. intermediary, U.S. institutional and international—contributed to the second-quarter results. Pioneer Investments, RS Global, RS Value and VictoryShares ETFs were among the franchises that generated positive long-term net inflows. Victory Capital also reported a significant pipeline of mandates that have been won but not yet funded. Brown said the pipeline was among the largest the company has had and included fixed income, ETFs, global and multi-asset strategies across international, intermediary and institutional channels. The company did not provide a dollar figure for the pipeline. Brown emphasized that acquisitions remain Victory Capital’s top capital-allocation priority. The company has completed eight acquisitions over the past 13 years and is targeting $1 trillion in assets under management over time. Brown said Victory remains active in evaluating significant acquisition opportunities but is not under pressure to complete a transaction quickly. The company ended the quarter with $70 million of cash and a net leverage ratio of 1.0 times adjusted EBITDA. During the quarter, Victory repriced its Term Loan B, which Policarpo said will reduce annual interest expense by about $2.5 million. Its $100 million revolver remained undrawn. Victory Capital returned $138 million to shareholders during the second quarter, including repurchases of 1.1 million shares. Year to date, the company repurchased 3.2 million shares, exceeding its total repurchases in all of 2025. The board also declared a quarterly cash dividend of $0.50 per share, payable Sept. 25 to shareholders of record as of Sept. 10. Brown said share repurchases would remain opportunistic and secondary to strategic acquisitions, while the dividend represents an additional component of the company’s capital-return strategy. Victory Capital (NASDAQ:VCTR) is a global investment management firm that provides a broad range of strategies across equities, fixed income, multi-asset and alternative investments. Serving institutional, intermediary and retail clients, the company delivers tailored solutions through active, research-driven portfolio management. Its product lineup includes traditional mutual funds, separately managed accounts, sub-advisory services and specialized strategies such as ESG-focused and municipal bond portfolios. Founded in 1988, Victory Capital has expanded its capabilities via both organic growth and strategic acquisitions, integrating experienced investment teams to enhance its offerings in areas like smart beta, global equity and fixed income. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Victory Capital Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

For the quarter ended June 2026, Victory Capital Holdings (VCTR) reported revenue of $435.36 million, up 24% over the same period last year. EPS came in at $2.21, compared to $1.57 in the year-ago quarter. The reported revenue represents a surprise of +12.82% over the Zacks Consensus Estimate of $385.88 million. With the consensus EPS estimate being $1.81, the EPS surprise was +22.1%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Victory Capital performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Ending Assets Under Management: $342.45 billion versus $342.45 billion estimated by three analysts on average. Ending assets under management - Fixed Income: $83.41 billion versus the three-analyst average estimate of $83.41 billion. Ending assets under management - Money Market/ Short-term: $3.59 billion versus $3.58 billion estimated by three analysts on average. Ending assets under management - Alternative Investments: $3.37 billion compared to the $3.37 billion average estimate based on three analysts. Ending assets under management - U.S. Small Cap Equity: $11.33 billion versus $11.33 billion estimated by three analysts on average. Ending assets under management - U.S. Mid Cap Equity: $31.29 billion versus the three-analyst average estimate of $31.29 billion. Ending assets under management - U.S. Large Cap Equity: $66.39 billion versus $66.39 billion estimated by three analysts on average. Ending assets under management - Solutions: $105.64 billion versus the three-analyst average estimate of $105.64 billion. Ending assets under management - Global/Non-U.S. Equity: $37.44 billion compared to the $37.44 billion average estimate based on three analysts. Net client cash flows - Fixed Income: $2.67 billion versus $2.3 billion estimated by two analysts on average. Revenue- Investment management fees: $362.24 million versus $310.27 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +28.3% change. Revenue- Fund administration and distribution fees: $73.12 million versus the three-analyst average estimate of $75.6 million. The reported number represents a year-over-year change of +6.1%. View all Key Company Metrics for Victory Capital here>>> Shares of Victory Capital have returned +14.7% over the past month versus the Zacks S&P 500 composite's +3.5% change. The stock currently has a Zacks Rank #1 (Strong Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Victory Capital Holdings, Inc. (VCTR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Victory Capital Holdings (VCTR) came out with quarterly earnings of $2.21 per share, beating the Zacks Consensus Estimate of $1.81 per share. This compares to earnings of $1.57 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +22.10%. A quarter ago, it was expected that this investment management firm would post earnings of $1.65 per share when it actually produced earnings of $1.82, delivering a surprise of +10.3%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Victory Capital, which belongs to the Zacks Financial - Investment Management industry, posted revenues of $435.36 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 12.82%. This compares to year-ago revenues of $351.21 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Victory Capital shares have added about 62.7% since the beginning of the year versus the S&P 500's gain of 13%. While Victory Capital has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Victory Capital was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #1 (Strong Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.91 on $406 million in revenues for the coming quarter and $7.51 on $1.59 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Investment Management is currently in the top 24% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Eagle Point Credit (ECC), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 13. This management investment company is expected to post quarterly earnings of $0.18 per share in its upcoming report, which represents a year-over-year change of -21.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Eagle Point Credit's revenues are expected to be $40.28 million, down 16.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Victory Capital Holdings, Inc. (VCTR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record Q2 2026 results with total client assets reaching $346 billion, up 11% from Q1 and 15% year-over-year. Record net long-term inflows of $4.2 billion, with gross flows up 43% versus the same quarter last year. Strong investment performance: 71% of AUM outperformed benchmarks over one year, and 81% over ten years. Pioneer integration complete, with the full $110 million in net run rate expense synergies fully realized. ETF platform momentum: AUM up 54% year-over-year to $23.2 billion, with annualized organic growth rate of 27%. International business gaining traction: $62.6 billion in AUM from clients outside the US, net flow positive year-to-date. Record adjusted EBITDA of $243 million and margin expansion to 55.8%, with long-term margin guidance raised to 50%. Strong balance sheet with net leverage at 1.0 times adjusted EBITDA, allowing for continued capital returns and M&A activity. Active M&A pipeline with a goal of $1 trillion in AUM, supported by a fragmented market of potential targets. Average fee rate of 47.9 basis points was at the high end of guidance, with expectations to decline to 46-47 basis points going forward. Performance fees and annual fees recorded in Q2 are considered episodic and may not be sustainable at current levels. The distribution of Amundi products in the US has been less successful than the distribution of Victory products internationally. Share repurchases are expected to be opportunistic rather than a consistent run rate, which may vary quarter to quarter. The company faces ongoing pressure from regulatory complexity, technology requirements, and distribution scale in the industry. While the pipeline is significant, the company does not provide a dollar figure for the one-but-not-yet-funded pipeline, creating uncertainty. Cash compensation as a percentage of revenue is expected to remain in the low to mid-20s, indicating potential cost pressures. The company's growth is heavily reliant on successful M&A execution, which carries inherent integration risks. Warning! GuruFocus has detected 7 Warning Signs with VCTR. Is VCTR fairly valued? Test your thesis with our free DCF calculator. Q: How has your net flow outlook for the Amundi distribution agreement changed since inception, and are you seeing nice net flow breadth or is it concentrated in one or two larger European markets?A: David Brown (Chairman and CEO): The flows are coming through three primary regions: Asia, Europe, and emerging parts of the Middle East. From a product perspective, fixed income has done really well, followed by global and multi-asset strategies. The flows are not coming from one product or one area; they are deep, wide, and accelerating. Q: Can you help us size the one but not yet funded pipeline and flows you see, including sources, strategies, and how that compares to prior periods?A: David Brown (Chairman and CEO): It is one of the larger one-but-not-yet-funded pipelines we have had. The strength is coming from fixed income, our ETF platform, global, and multi-asset areas, driven by our intermediary and institutional channels. This is supported by really good investment performance and an expanded distribution reach, creating a deep and broad pipeline. Q: How has Victory helped Amundi sell its product in the U.S. to date, and what are the underlying economics to Victory on AUM distributed in the United States?A: Michael Pellicarpo (President, CFO and CAO): The efforts to distribute Amundi products have continued, focusing predominantly on U.S. ETF offerings in Latin America. This has been a little less than the Amundi distribution of Victory product. The economics are similar, with a revenue share split that aligns interests, but this component pales in comparison to the $62 billion of assets outside the U.S. through the Amundi distribution channel. Q: Can you talk about what may be in the aggregate investment management fee line this quarter, and how we should think about performance fees going forward?A: Michael Pellicarpo (President, CFO and CAO): The increase to a 47.9 basis point quarter reflects some annual fees recorded in Q2 from a GAAP perspective, which are crystallized based on different metrics. These are not pure performance fees but are a little episodic. We guide back to the 46 to 47 basis points long-term over a full cycle, which will fluctuate based on asset mix, client mix, and distribution channel mix. Q: On the flows in the quarter and into Q3, fixed income flipped to a very nice inflow quarter. Anything particular to call out, and what have you been seeing in July and August?A: David Brown (Chairman and CEO): We have seen an acceleration of flows into the third quarter. It is not a one-quarter phenomenon or an outsized mandate; it is broad and diverse, reflecting a convergence of investments made over the last few years. In fixed income, we are seeing good activity with shorter-term products and active fixed income ETFs, driven by client demand and demand for U.S. fixed income outside the U.S. Q: From an M&A perspective, where may Victory want to increase its competitiveness, and what kind of channels or client segments would you like to be more top of mind?A: David Brown (Chairman and CEO): We approach acquisitions differently, starting with whether it makes our company better, more competitive, and capable of servicing clients. There are many areas to add value, including size, scale, product diversification, and distribution enhancement. We have a trillion-dollar AUM goal and see lots of opportunity in the industry for consolidation, which will allow us to be more competitive. Q: On the expense side, you raised the long-term margin guide. Can you push out trends in G&A and the leverage you are able to drive in that line, and any thoughts on incremental areas of focus or investments?A: Michael Pellicarpo (President, CFO and CAO): The platform has been built to scale, with over two-thirds of expenses being variable. G&A has been $21 million to $23 million a quarter, and we are comfortable with that level. We have continued to invest in the business through the Pioneer integration, technology, AI, and new products. With the integration complete, we are comfortable operating at least 50% margins, inclusive of investments made and planned. Q: Coming back to your trillion-dollar target and M&A, how are conversations progressing, what does the pipeline look like, and what types of properties are you thinking about?A: David Brown (Chairman and CEO): Conversations are going very well, and we are making good progress. With the Pioneer integration complete and a healthy balance sheet at 1.0 times leverage, this is the right time for our organization. We have proven our ability to buy and integrate businesses of different sizes and types. Given industry pressures, this is a great time for firms like us to add value to firms that need something they cannot provide themselves. Q: On the margin output, how do you know you are investing enough in the business to drive growth ahead, and what are the top areas of investment over the next 12 to 24 months?A: David Brown (Chairman and CEO): Our results around gross and net flows answer the question of whether we are investing enough. We are investing in product development, AI and technology, and distribution partnerships. We are good investors in getting a return, and we can have industry-leading margins and organic growth simultaneously, which sets us up nicely to provide shareholders with both. Q: From a capital management perspective, how should we think about the trajectory of share repurchases from these levels, keeping M&A aside?A: David Brown (Chairman and CEO): Our number one priority is strategic acquisitions, with everything else second. Given our cash flow size, we can do both. We will be opportunistic about buying shares, as we bought more in the first half of this year than all of last year. I would not run-rate every quarter forward; some will be opportunistic and some around strategic acquisitions. Share buybacks are second, with the dividend as an ancillary piece. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record total client assets of $346 billion, representing a 15% year-over-year increase driven by strong investment performance and strategic momentum. Successfully completed the Pioneer integration, fully realizing the $110 million net run rate expense synergies within five quarters of closing. Transformed the business from a concentrated U.S. equity manager in 2013 to a diversified platform where U.S. equity now represents only 31% of total assets. Leveraged the Amundi partnership to expand international distribution, reaching $62.6 billion in AUM from clients across 61 countries. Maintained high investment quality with 60% of rated AUM holding Morningstar 4- or 5-star ratings, significantly outperforming industry averages. Attributed record net long-term inflows of $4.2 billion to the convergence of multi-year investments in technology, data, and distribution capabilities. Expanded the ETF platform to $23.2 billion in AUM, focusing on active and rules-based strategies rather than competing on price in a 'race to zero'. Raised long-term adjusted EBITDA margin guidance from 49% to 50%, reflecting structural efficiency gains and the platform's demonstrated earnings power. Targeting $1 trillion in assets under management through a repeatable, institutional-quality acquisition model and organic growth initiatives. Anticipates sustained positive flow momentum supported by a significant 'won-but-not-yet-funded' pipeline across multiple franchises and channels. Expects average fee rates to remain in the 46 to 47 basis point range, accounting for the diversified mix of products and distribution channels. Plans to continue leveraging the Amundi partnership for global ETF distribution, specifically targeting new growth opportunities in Latin America and Asia. Repriced Term Loan B during the quarter, which is expected to reduce annual interest expense by approximately $2.5 million. Maintained a strong balance sheet with a net leverage ratio of 1.0x adjusted EBITDA, providing flexibility for significant future acquisitions. Returned $138 million to shareholders in Q2, including the repurchase of 1.1 million shares, signaling confidence in the company's valuation. Identified a deep opportunity set for consolidation, citing over 145 investment firms managing between $50 billion and $500 billion as potential targets. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Flows are accelerating and originating from three primary regions: Asia, Europe, and emerging opportunities in the Middle East. Demand is broad-based across fixed income, global equity, and multi-asset products rather than being concentrated in a single market or strategy. The 47.9 basis point rate in Q2 included periodic annual fees that are somewhat episodic and crystallized based on specific metrics. Management reiterated a long-term guidance of 46 to 47 basis points as the normalized expectation over a full market cycle. Acquisitions are evaluated based on their ability to make the company more resilient and capable of servicing clients across market cycles. Management is actively evaluating significant opportunities, noting that the current environment of regulatory and technology pressure favors proven acquirers. The pipeline is currently one of the largest in the organization's history, though specific dollar amounts were not disclosed. Strength is coming from fixed income, ETFs, and global/multi-asset strategies across both institutional and international channels.

Second-Quarter Highlights Total Client Assets of $346.1 billion Long-term gross flows of $22.1 billion Long-term net inflows of $4.2 billion GAAP operating margin of 44.5% GAAP net income per diluted share of $1.68 Adjusted EBITDA margin of 55.8% Adjusted net income with tax benefit per diluted share of $2.21 Board authorizes regular quarterly cash dividend of $0.50 per share SAN ANTONIO, August 05, 2026--(BUSINESS WIRE)--Victory Capital Holdings, Inc. (NASDAQ: VCTR) ("Victory Capital" or "the Company") today reported record financial results for the quarter ended June 30, 2026. "The second quarter was a landmark period for Victory Capital, reporting record revenue, Adjusted EBITDA, Adjusted EBITDA margin, and earnings per share," said David C. Brown, Chairman and Chief Executive Officer. "We also achieved record total client assets, supported by an all-time high in long-term quarterly gross sales. Notably, we achieved $4.2 billion in positive long-term net flows for the quarter and have positive long-term net flows year to date, through June 30. This reflects the strategic investments we have made, the momentum we have built across our distribution channels, and the strength of our operating platform. "Investment performance remained excellent during the quarter. As of June 30, 2026, 71%, 68%, 65%, and 81% of our AUM outperformed benchmarks over the respective 1-, 3-, 5-, and 10-year periods. In addition, 60% of our rated AUM in mutual funds and ETFs was rated four or five stars overall by Morningstar. "The drivers of our record gross sales and positive net flows this quarter were broad-based. Our international distribution efforts, our U.S. institutional channel, and, within our intermediary channel, our VictoryShares ETF platform each drove meaningful flows, together producing a result that showcases the breadth and depth of our distribution platform. "We maintained a consistent fee rate and our industry-leading margins for the quarter. Our Adjusted EBITDA margin highlights the durability of our platform and the discipline we apply across every dimension of our business. "We continued to return capital to shareholders. We returned $138 million through share repurchases of 1.1 million shares of VCTR common stock and dividends paid during the quarter. "Inorganic growth remains a strategic priority. The integration of Pioneer Investments is now complete, and the full run-rate of net expense synergies has been fully recognized. Our pipeline is full and active, our standards remain high, and we only pursue transactions that make our Company better. "As always, we continue to focus on serving our clients, which is our top priority." The table below presents AUM, and certain GAAP and non-GAAP ("adjusted") financial results. Due to rounding, AUM values and other amounts in this press release may not add up precisely to the totals provided. AUM, Flows and Investment Performance At June 30, 2026, Victory Capital had total client assets of $346.1 billion, assets under management of $342.5 billion, and other assets of $3.6 billion. Total AUM increased by $32.7 billion to $342.5 billion at June 30, 2026, compared with $309.8 billion at March 31, 2026. The increase was primarily due to positive market action of $28.5 billion and net inflows of $4.1 billion. As of June 30, 2026, Victory Capital offered 189 investment strategies through its multiple autonomous Investment Franchises and Solutions Platform. The table below presents outperformance against benchmarks by AUM as of June 30, 2026. Second Quarter 2026 Compared with First Quarter 2026 Revenue increased 12.2% to $435.4 million in the second quarter, compared with $388.0 million in the first quarter, primarily due to higher average AUM and crystallization of certain annual fees over the comparable period. GAAP operating margin expanded by 350 basis points in the second quarter to 44.5%, up from 41.0% in the first quarter, due to an increase in revenue and $8.3 million decrease in acquisition-related costs, partially offset by an increase in variable operating expenses as a result of an increase in operating results. Second quarter GAAP net income increased 24.3% to $139.4 million, up from $112.1 million in the prior quarter. Adjusted net income with tax benefit increased 19.4% to $182.9 million, or $2.21 per diluted share, in the second quarter, up from $153.2 million, or $1.82 per diluted share, in the first quarter. Adjusted EBITDA increased $38.7 million to $242.7 million in the second quarter compared to $204.0 million in the first quarter. Adjusted EBITDA margin expanded 320 basis points in the second quarter of 2026 to 55.8% compared with 52.6% in the prior quarter. Second Quarter 2026 Compared with Second Quarter 2025 Revenue for the three months ended June 30, 2026, increased 24.0% to $435.4 million, compared with $351.2 million in the same quarter of 2025 as a result of higher average AUM over the comparable period. Operating expenses were $241.6 million compared with $257.0 million in last year’s second quarter reflecting decreases in acquisition-related and restructuring and integration costs of $26.4 million and $11.4 million, respectively, partially offset by increases in variable operating expenses that rose as a result of the higher average AUM. GAAP operating margin expanded 1,770 basis points to 44.5% in the second quarter, from 26.8% in the same quarter of 2025. GAAP net income increased 137.3% to $139.4 million in the second quarter compared with $58.7 million in the same quarter of 2025. Adjusted net income with tax benefit increased 37.7% to $182.9 million, or $2.21 per diluted share, in the second quarter, compared with $132.8 million, or $1.57 per diluted share in the same quarter last year. Adjusted EBITDA increased 36.0% to $242.7 million, compared with $178.5 million in the same quarter of last year. Year-over-year, adjusted EBITDA margin expanded 500 basis points to 55.8% in the second quarter of 2026, compared with 50.8% in the same quarter last year. Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025 On April 1, 2025, the Company completed the acquisition of Amundi US and reintroduced the brand Pioneer Investments for the acquired business and investment products. Year-over-year results reflect the acquisition of Amundi US, which closed on April 1, 2025. Revenue for the six months ended June 30, 2026, increased 44.2% to $823.4 million, compared with $570.8 million in the same period of 2025 as a result of higher average AUM over the comparable period. GAAP operating margin expanded 1,010 basis points, in the six months ended June 30, 2026 to 42.9%, up from 32.8% in the same period of 2025, due to higher variable operating expenses as a result of the higher average AUM and an expanded business partially offset by decreases in acquisition-related and restructuring and integration costs of $27.5 million and $9.4 million, respectively, primarily related to the acquisition of Amundi US in 2025. Six months ended June 30, 2026 GAAP net income increased 108.4% to $251.5 million, up from $120.7 million in the prior period. Adjusted net income with tax benefit increased 52.2% to $336.1 million, or $4.02 per diluted share, in the six months ended June 30, 2026, compared with $220.9 million, or $2.96 per diluted share in the same period last year. Adjusted EBITDA increased 51.5% to $446.7 million, compared with $294.9 million in the same period of last year. Year-over-year, adjusted EBITDA margin expanded 260 basis points to 54.3% in the first half of 2026, compared with 51.7% in the same first half of last year. Balance Sheet / Capital Management The total debt outstanding as of June 30, 2026 was approximately $978 million. For the three months ended June 30, 2026, the Company repurchased approximately 1.1 million shares of Common Stock. The Company’s Board of Directors approved a regular quarterly cash dividend of $0.50 per share. The dividend is payable on September 25, 2026, to shareholders of record on September 10, 2026. Conference Call, Webcast and Slide Presentation The Company will host a conference call tomorrow morning, August 6, at 8:00 a.m. ET to discuss the results. Analysts and investors may participate in the question-and-answer session. To participate in the conference call, please call 1-833-461-5787 (domestic) or 1-585-542-9983 (international), shortly before 8:00 a.m. ET and reference the Meeting ID 504 021 405. A live, listen-only webcast will also be available via the investor relations section of the Company’s website at https://ir.vcm.com. Prior to the call, a supplemental slide presentation that will be used during the conference call will be available on the Events and Presentations page of the Company’s investor relations website. For anyone who is unable to join the live event, an archive of the webcast will be available for replay shortly after the call concludes. About Victory Capital Victory Capital (NASDAQ: VCTR) is a diversified global asset management firm with $346.1 billion in total client assets, as of June 30, 2026. We serve institutional, intermediary, and individual clients through our Investment Franchises and Solutions Platform, which manage specialized investment strategies across traditional and alternative asset classes. Our differentiated approach combines the power of investment autonomy with the support of a robust, fully integrated operational and distribution platform. Clients have access to focused, top-tier investment talent equipped with comprehensive resources designed to deliver competitive long-term performance. Victory Capital is headquartered in San Antonio, Texas. To learn more, visit www.vcm.com or follow us on Facebook, Twitter (X), and LinkedIn. FORWARD-LOOKING STATEMENTS This document may contain forward-looking statements within the meaning of applicable U.S. federal and non-U.S. securities laws. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target," "believe," "expect," "aim," "intend," "may," "anticipate," "assume," "budget," "continue," "estimate," "future," "objective," "outlook," "plan," "potential," "predict," "project," "will," "can have," "likely," "should," "would," "could" and other words and terms of similar meaning or the negative thereof and include, but are not limited to, statements regarding the outlook for Victory Capital’s future business and financial performance. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Victory Capital's control and could cause Victory Capital's actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward looking statements. Although it is not possible to identify all of these risks and factors, they include, among others, the following: reductions in the assets under management ("AUM") based on investment performance, client withdrawals, difficult market conditions and other factors such as the ongoing conflicts and potential military conflicts in Iran, Ukraine, Venezuela, China/Taiwan, and/or the Middle East, a pandemic, tariffs or trade restrictions; the nature of the Company’s contracts and investment advisory agreements; the Company's ability to maintain historical returns and sustain our historical growth; the Company's dependence on third parties to market our strategies and provide products or services for the operation of our business; the Company's ability to retain key investment professionals or members of our senior management team; the Company's reliance on the technology systems supporting our operations; the Company's ability to successfully acquire and integrate new companies; risks associated with expected benefits of the Amundi US transaction and the related impact on the Company’s business; 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 our 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 we are 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; and other risks and factors included, but not limited to, those listed under the caption "Risk Factors" in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (the "SEC") on February 26, 2026, which is accessible on the SEC’s website at www.sec.gov. In light of these risks, uncertainties and other factors, the forward-looking statements contained in this press release might not prove to be accurate. All forward-looking statements speak only as of the date made and Victory Capital undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Information Regarding Non-GAAP Financial Measures Victory Capital uses non-GAAP financial measures referred to as Adjusted EBITDA and Adjusted Net Income to measure the operating profitability of the Company. These measures eliminate the impact of one-time acquisition, restructuring and integration costs and demonstrate the ongoing operating earnings metrics of the Company. The Company has included these non-GAAP measures to provide investors with the same financial metrics used by management to assess the operating performance of the Company. Adjusted EBITDA Adjustments made to GAAP Net Income to calculate Adjusted EBITDA, as applicable, are: Adding back income tax expense; Adding back interest paid on debt and other financing costs, net of interest income; Adding back depreciation on property and equipment; Adding back other business taxes; Adding back amortization expense on acquisition-related intangible assets; Adding back share-based compensation expense associated with equity awards in connection with acquisitions and certain one-time performance-based shares; Adding back direct incremental costs of acquisitions, including restructuring costs; Adding back debt issuance cost expense; 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 share-based compensation expense associated with equity awards in connection with acquisitions and certain one-time performance-based shares; Adding back direct incremental costs of acquisitions, including restructuring costs; Adding back debt issuance cost expense; Subtracting an estimate of income tax expense applied to the sum of the adjustments above. Tax Benefit of Goodwill and Acquired Intangible Assets Due to Victory Capital’s acquisitive nature, tax deductions allowed on acquired intangible assets and goodwill provide it with additional significant supplemental economic benefit. The tax benefit of goodwill and intangible assets represent the tax benefits associated with deductions allowed for intangible assets and goodwill generated from prior acquisitions in which the Company received a step-up in basis for tax purposes. Acquired intangible assets and goodwill may be amortized for tax purposes, generally over a 15-year period. The tax benefit from amortization on these assets is included to show the full economic benefit of deductions for all acquired intangible assets with a step-up in tax basis. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805721423/en/ Contacts Investors: Carly ThomasDirector, Investor Relations and Responsible [email protected] Media: Jessica Davila BurgessDirector, Global [email protected]

TPG Inc. (TPG) came out with quarterly earnings of $0.69 per share, beating the Zacks Consensus Estimate of $0.59 per share. This compares to earnings of $0.69 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +16.95%. A quarter ago, it was expected that this company would post earnings of $0.61 per share when it actually produced earnings of $0.7, delivering a surprise of +14.75%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. TPG Inc., which belongs to the Zacks Financial - Investment Management industry, posted revenues of $628.19 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 11.06%. This compares to year-ago revenues of $495.12 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. TPG Inc. shares have lost about 27.4% since the beginning of the year versus the S&P 500's gain of 11%. While TPG Inc. has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for TPG Inc. was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.68 on $595.18 million in revenues for the coming quarter and $2.83 on $2.42 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Investment Management is currently in the top 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Victory Capital Holdings (VCTR), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This investment management firm is expected to post quarterly earnings of $1.81 per share in its upcoming report, which represents a year-over-year change of +15.3%. The consensus EPS estimate for the quarter has been revised 3.2% higher over the last 30 days to the current level. Victory Capital Holdings' revenues are expected to be $385.88 million, up 9.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report TPG Inc. (TPG) : Free Stock Analysis Report Victory Capital Holdings, Inc. (VCTR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research