Victory Capital Holdings, Inc. Class A Common Stock · NASDAQ:VCTR
Victory Capital Holdings, Inc. Class A Common Stock — Q1 2024 Earnings Presentation
30 slides from Victory Capital Holdings, Inc. Class A Common Stock's earnings presentation, May 10, 2024
Slide 1: First Quarter 2024 Earnings Presentation
First Quarter 2024 Earnings Presentation May 10, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our possible or assumed future results of operations, business s
Slide 3: Agenda
Agenda Quarterly Business Overview Investment Performance First-Quarter 2024 Financial Results Appendix 3
Slide 4: Quarterly Business Overview
Quarterly Business Overview
Slide 5: Business Overview
Business Overview Ended quarter with total client assets of $175.5bn Q1 2024 Long-term gross sales and net flows at best levels Operating & in more than a year Financial Net flows turned positive in March Highlights Fee rate continues to be predictable and consistent Adjusted EBITDA margin
Slide 6: Investment Performance
VictoryCapital Investment Performance
Slide 7: Commitment to Long-Term Investment Performance
Commitment to Long-Term Investment Performance 45 Total Mutual Funds and ETFs with 4- or 5-Star overall ratings 69% Total Mutual Funds and ETFs AUM with 4- or 5-Star overall ratings AUM outperforming benchmarks Strategies outperforming benchmarks 85% 80% 63% 63% 64% 65% 61% 54% 1-year period 3-year
Slide 8: Long-Term Growth & Capital Allocation Strategy
Long-Term Growth & Capital Allocation Strategy Growth Dividends Investments & De-leveraging Share Repurchases Enhancing Shareholder Value by: Maintaining Balance Sheet Flexibility with: • Improving platform with every strategic acquisition • Capital allocation policy that supports growth strategy •
Slide 9: Amundi Transaction MOU
Amundi Transaction MOU Signed Memorandum of Understanding (MOU) with definitive agreement expected by end of Q2 Victory Capital to form a long-term strategic partnership with Amundi through 15-year global and reciprocal distribution agreements Amundi US to combine into Victory Capital Amundi t
Slide 10: Amundi US Total AUM $104Bn
Amundi US Total AUM 43% Mutual Funds $45Bn $104Bn $59Bn 57% UCITs, SMAs and Other YTD Net Flows 77% of fund AUM +$200MM rated 4/5 stars in Mutual Fund Complex Fixed Fixed Equity Solutions Equity Solutions Income Income YTD’24 Net YTD’24 Net YTD’24 Net 79% of fund 69% of fund 100% of fund Flows Flows
Slide 11: First-Quarter 2024 Financial Results
First-Quarter 2024 Financial Results
Slide 12: First-Quarter 2024 Financial Results
First-Quarter 2024 Financial Results Revenue of $215.9MM GAAP Operating Income of $84.8MM GAAP Operating margin of 39.3% First Quarter Financial GAAP Net Income of $0.84 per diluted share Results Adjusted Net Income with tax benefit of $82.3MM $1.25 per diluted share Adjusted EBITDA ma
Slide 13: Total Client Assets
Total Client Assets Well-diversified Total Client Assets at period end ($Bn) distribution channels and client base Intermediary Institutional Direct / Retail Intermediary Institutional 166.6 175.5 Direct / Retail 161.6 153.5 Consistent growth in each channel over the past year Significan
Slide 14: Long-Term AUM Flows
Long-Term AUM Flows Q1 Gross Sales Long Term AUM Asset Flows ($Bn) 3/31/18 +9% vs Q4 2023 +40% vs Q3 2023 Gross Sales Gross Redemptions Net Flows Multiple Investment Franchises generated positive long-term net 7.0 flows for the quarter: 6.4 5.5 5.0 Victory Income Investors WestEnd Adviso
Slide 15: Revenue
Revenue Total Revenue ($MM) Increased revenue consistent with higher 209.7 215.9 204.2 205.8 average AUM $200 Revenue increased 5% from previous $150 quarter Consistent fee rate within a tight range $100 $50 $0 Operating Metrics Q2 ’23 Q3 ’23 Q4 ’23 Q1 ‘24 Average Total AUM ($Bn) 152.9 156.5 1
Slide 16: Expenses
Expenses Total Expenses ($MM) Compensation Operating Non-Operating Q1 ‘24 total GAAP operating expenses Cash compensation, % of revenue increased vs Q4 ‘23, 143.8 144.0 due primarily to non- 132.3 100.0% 129.6 cash expenses 90.0% 80.0% Compensation 70.0% expenses rose 60.0% reflecting Q1 50.0% s
Slide 17: Non-GAAP Metrics
Non-GAAP Metrics 9/30/17 $MM except per-share data Highest level of $125.0 ANI Tax Benefit ANI with tax benefit per diluted share quarterly revenue, $1.30 Adjusted EBITDA and 1.18 1.25 Adjusted Net Income in 1.15 1.11 $1.20 $100.0 the past six quarters 82.3 79.8 77.0 $1.10 Margin strength 75.9 9
Slide 18: Capital Management
Capital Management ($mm) 3/31/18 9/30/17 Selected Balance Sheet Items 03/31/2024 Interest Expense and Other Debt ($MM) Financing Costs ($MM) Cash / Cash Equivalents ($MM) 80 16.6 16.5 Debt ($MM) 1,002 1,002 1,002 1,002 1,002 14.9 15.6 Stockholders' Equity ($MM) 1,077 Diluted Shares Outstanding (MM)
Slide 19: Appendix
Appendix
Slide 20: Ongoing and Future Cash-Tax Benefits
Ongoing and Future Cash-Tax Benefits Section 338(h)(10) Election • Stepped up cost basis of acquired indefinite lived intangible assets is deductible for corporate income tax purposes over 15 years o $1.7Bn in total future tax amortization o $436MM in future cash tax savings, assuming 25% tax rate o
Slide 21: Notes and Disclosures
Notes and Disclosures 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, restruct
Slide 22: Notes and Disclosures
Notes and Disclosures Information Regarding Non-GAAP Financial Measures (cont.) Adjusted Net Income Adjustments made to GAAP Net Income to calculate Adjusted Net Income, as applicable, are: • Adding back other business taxes; • Adding back amortization expense on acquisition-related intangible asset
Slide 23: Consolidated Reconciliations of Adjusted EBITDA
Consolidated Reconciliations of Adjusted EBITDA For the three months ended, (in thousands except percentages) 03/31/2023 06/30/2023 09/30/2023 12/31/2023 03/31/2024 GAAP Net income $ 49,273 $ 56,671 $ 52,007 $ 55,206 $ 55,691 GAAP Income tax expense (12,597) (17,924) (13,915) (18,316) (16,197) GAAP
Slide 24: Consolidated Reconciliations of Adjusted Net Income
Consolidated Reconciliations of Adjusted Net Income For the three months ended, (in thousands, except per-share data) 03/31/2023 06/30/2023 09/30/2023 12/31/2023 03/31/2024 GAAP Net Income $ 49,273 $ 56,671 $ 52,007 $ 55,206 $ 55,691 Other business taxes 384 382 636 305 369 GAAP amortization of acqu
Slide 25: Detailed Reconciliation of Q1 '24 Adjusted Net Income
Detailed Reconciliation of Q1 ‘24 Adjusted Net Income (in thousands, except per-share amounts) Adjustments GAAP Amortization Tax Benefit of Other of Acquisition- Acquisition, Goodwill and U.S. GAAP Business Related Stock-Based Restructuring and Debt Issuance Total Non-GAAP Acquired Basis Taxes Intan
Slide 26: Detailed Reconciliation of Q4 '23 Adjusted Net Income
Detailed Reconciliation of Q4 ‘23 Adjusted Net Income (in thousands, except per-share amounts) Adjustments GAAP Amortization Tax Benefit of Other of Acquisition- Acquisition, Goodwill and U.S. GAAP Business Related Stock-Based Restructuring and Debt Issuance Total Non-GAAP Acquired Basis Taxes Intan
Slide 27: Detailed Reconciliation of Q3 '23 Adjusted Net Income
Detailed Reconciliation of Q3 ‘23 Adjusted Net Income (in thousands, except per-share amounts) Adjustments GAAP Amortization Tax Benefit of Other of Acquisition- Acquisition, Goodwill and U.S. GAAP Business Related Stock-Based Restructuring and Debt Issuance Total Non-GAAP Acquired Basis Taxes Intan
Slide 28: Detailed Reconciliation of Q2 '23 Adjusted Net Income
Detailed Reconciliation of Q2 ‘23 Adjusted Net Income (in thousands, except per-share amounts) Adjustments GAAP Amortization Tax Benefit of Other of Acquisition- Acquisition, Goodwill and U.S. GAAP Business Related Stock-Based Restructuring and Debt Issuance Total Non-GAAP Acquired Basis Taxes Intan
Slide 29: Detailed Reconciliation of Q1 '23 Adjusted Net Income
Detailed Reconciliation of Q1 ‘23 Adjusted Net Income (in thousands, except per-share amounts) Adjustments GAAP Amortization of Tax Benefit of Acquisition- Acquisition, Goodwill and U.S. GAAP Other Business Related Stock-Based Restructuring and Debt Issuance Total Non-GAAP Acquired Basis Taxes Intan
Slide 30: Notes and Disclosures
Notes and Disclosures Investing involves risk, including the potential loss of principal. There are no assurances that any fund or strategy will achieve its stated objective. All data in this presentation, unless otherwise noted, is as of March 31, 2024. Past performance does not guarantee future re
Victory Capital Holdings — Q1 2024 Earnings Presentation on 6ix