In This Article:
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Total Client Assets: Over $181 billion, second highest quarter-end level in history.
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Revenue: $225.6 million, up 3% from the second quarter.
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GAAP Operating Income: $120.4 million, up 9% from the second quarter.
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GAAP Operating Margin: 53.3%.
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Earnings Per Share (GAAP): $1.24 per diluted share.
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Adjusted Earnings Per Share: $1.35 per diluted share.
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Adjusted EBITDA: $121.3 million, 4% higher than the second quarter.
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Adjusted EBITDA Margin: 53.7%.
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Cash Balance: $188 million at the end of the quarter, up $69 million from June.
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Net Leverage Ratio: Improved to 1.7 times.
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Dividend Increase: 7% increase, quarterly dividend to $0.44 per share.
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Assets Under Management (AUM): $181.1 billion at the end of September, up from $173.8 billion in June.
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Cash from Operations: $99.8 million generated during the quarter.
Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Victory Capital Holdings Inc (NASDAQ:VCTR) achieved record earnings per share, adjusted EBITDA, and margin expansion to 53.7% in the third quarter.
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The company ended the quarter with total client assets of over $181 billion, marking the second highest quarter-end level in its history.
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Victory Capital Holdings Inc (NASDAQ:VCTR) made significant progress towards closing a strategic transaction with Amundi, expected to enhance its investment franchise.
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The company has a strong track record of successful acquisitions, enhancing its scale and diversification of investment capabilities and distribution channels.
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Victory Capital Holdings Inc (NASDAQ:VCTR) reported strong investment performance, with 67% of its AUM in mutual funds and ETFs earning four or five-star ratings from Morningstar.
Negative Points
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The company experienced net outflows in some investment franchises, despite positive fixed income flows from Victory Income Investors.
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There was a decline in the average fee rate due to product, asset class, and channel mix shifts.
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Victory Capital Holdings Inc (NASDAQ:VCTR) was prohibited from repurchasing shares during the quarter due to the proxy process, contributing to a cash buildup.
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The company faces challenges in predicting quarter-by-quarter flows, with market and industry conditions impacting organic growth prospects.
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The necessity for industry consolidation presents both opportunities and challenges, requiring careful strategic planning and execution.
Q & A Highlights
Q: Can you discuss the fixed income flows and what might be impacting net outflows in that franchise? A: David Brown, CEO, highlighted that Victory Income Investors has shown strong performance and distribution access, with positive outlooks for fixed income. Some one-off events have impacted flows, but the macro environment and investment performance remain strong, suggesting a positive future.