Victory Capital Holdings, Inc. Class A Common Stock · NASDAQ:VCTR
Victory Capital Holdings, Inc. Class A Common Stock — Q1 2022 Earnings Presentation
29 slides from Victory Capital Holdings, Inc. Class A Common Stock's earnings presentation, May 6, 2022
Slide 1: First Quarter 2022 Earnings Presentation
First Quarter 2022 Earnings Presentation May 6, 2022
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 Financial Results Appendix 3
Slide 4: Quarterly Business Overview
Quarterly Business Overview
Slide 5: Quarterly Business Overview
Quarterly Business Overview Q1 OPERATING • Quarterly long-term gross sales increase to $11.0Bn & FINANCIAL Up >100% from $5.5Bn in Q4 2021 HIGHLIGHTS Up 64% Y-o-Y • Q1 net positive long-term inflows of $3.0Bn +$6.4Bn from Q4 2021 +$4.0Bn from Q1 2021 Positive net long-term inflows 3 of las
Slide 6: Investment Performance
Victory Ce Investment Performance
Slide 7: Commitment to Long-Term Investment Performance
Commitment to Long-Term Investment Performance Total Mutual Total Mutual Funds 44 Funds and ETFs with 4- or 5-Star overall ratings 65% and ETFs AUM with 4- or 5-Star overall ratings % of AUM outperforming benchmarks % of strategies outperforming benchmarks 100% 100% 83% 79% 78% 80% 80% 72% 68% 69% 6
Slide 8: Long-term Growth & Capital Allocation Strategy
Long-term Growth & Capital Allocation Strategy Share Repurchases Dividends Inorganic Growth & De-leveraging Enhancing Shareholder Value by: Maintaining Balance Sheet Flexibility with: • Improving platform with every strategic acquisition • Capital allocation policy that supports growth strategy • Ev
Slide 9: First-Quarter 2022 Financial Results
First-Quarter 2022 Financial Results
Slide 10: First-Quarter 2022 Financial Results
First-Quarter 2022 Financial Results • AUM of $178.1Bn as of March 31, 2022 FIRST Down 3% from year end 2021 QUARTER Up 15% from Q1 2021 FINANCIAL • Net positive long-term inflows of $3.0Bn RESULTS • Revenue of $230MM Up slightly from $229.1MM in Q4 2021 Up 8% from Q1 2021 • Q1 Adjusted EBIT
Slide 11: Assets Under Management
Assets Under Management $Bn • Diversified distribution and client base Retail Retail Institutional Direct ($mm) Institutional $183.7 $178.1 Direct $161.9 $159.9 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Assets under management are as of the end of the respective periods shown. 11
Slide 12: Long-Term Asset Flows
Long-Term Asset Flows $Bn • Gross long-term sales of $11.0Bn in Q1 Gross Sales Gross Redemptions Net Flows • Positive net long-term flows in three out 3/31/18 of last four quarters ($mm) $11.0 $10.0 • Positive long-term flows for TTM period • Multiple franchises/strategies $5.7 generated long-term n
Slide 13: Revenues
Revenues ($mm) $250 3/31/18 $MM • Q1 2022 revenue of $230MM • Seventh consecutive quarter of $229.1 $230.0 increasing revenues $105.0 $226.3 $221.9 • Average fee rate realization in Q1 reflects mix shift due to WestEnd acquisition $200 $150 Operating Metrics Q2 ‘21 Q3 ‘21 Q4 ’21 Q1 ‘22 Average AUM (
Slide 14: Expenses
Expenses Compensation Operating Non-Operating • Q1 2022 total expenses decreased $4MM Cash compensation, % of revenue* vs Q4 2021 $MM Expense base calibrated as $143.6 10 $139.5 designed $132.0 $133.9 90 Lower operating expenses driven by 80 reduced acquisition, restructuring, and integration ex
Slide 15: Non-GAAP Metrics
Non-GAAP Metrics ($mm) 3/31/18 $MM except per share data 9/30/17 • Operating model preserved margin strength during Q1 market volatility ANI Tax Benefit ANI with tax benefit per diluted share $1.40 $1.25 $1.27 • Margins are inclusive of investments in: $1.23 $1.18 $1.20 Technology $100.0 $92.6 $93
Slide 16: Capital Management
Capital Management Interest Expense and Other ($mm) 3/31/18 Debt ($MM) Financing Costs 9/30/17 ($MM) Selected Balance Sheet Items ($MM) 3/31/2022 Cash / Cash Equivalents $39 $1,151 $9.2 $1,081 Debt $1,081 $6.2 $5.9 $6.2 $681 $646 Stockholders' Equity $986 Diluted Shares Outstanding (MM) 73.7 Net Deb
Slide 17: Appendix
Appendix
Slide 18: 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 $2.1 billion in total future tax amortization o $525MM in future cash tax savings, assuming 25% tax
Slide 19: 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 20: 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 21: Consolidated Reconciliations of Adjusted EBITDA
Consolidated Reconciliations of Adjusted EBITDA For the three months ended, (in thousands) 3/31/2021 6/30/2021 9/30/2021 12/31/2021 3/31/2022 GAAP Net income $ 65,202 $ 69,270 $ 74,175 $ 69,742 $ 71,273 GAAP Income tax expense (17,662) (20,629) (18,181) (15,781) (19,271) GAAP income before taxes 82,
Slide 22: Consolidated Reconciliations of Adjusted Net Income
Consolidated Reconciliations of Adjusted Net Income For the three months ended, (in thousands, except per-share data) 3/31/2021 6/30/2021 9/30/2021 12/31/2021 3/31/2022 GAAP Net Income $ 65,202 $ 69,270 $ 74,175 $ 69,742 $ 71,273 Other business taxes 374 524 376 383 590 GAAP amortization of acquisit
Slide 23: Detailed Reconciliation of Q1 '22 Adjusted Net Income
Detailed Reconciliation of Q1 ‘22 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 24: Detailed Reconciliation of Q4 '21 Adjusted Net Income
Detailed Reconciliation of Q4 ‘21 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 25: Detailed Reconciliation of Q3 '21 Adjusted Net Income
Detailed Reconciliation of Q3 ‘21 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 Q2 '21 Adjusted Net Income
Detailed Reconciliation of Q2 ‘21 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 Q1 '21 Adjusted Net Income
Detailed Reconciliation of Q1 ‘21 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: Notes and Disclosures
Notes and Disclosures Investing involves risk, including the potential loss of principal. There are no assurances that any fund will achieve its stated objective. All data in this presentation, unless otherwise noted, is as of March 31, 2022. Past performance does not guarantee future results. A fun
Slide 29: Notes and Disclosures
Notes and Disclosures Victory Capital means Victory Capital Management Inc., the investment adviser of the Victory Capital mutual funds, USAA Mutual Funds, VictoryShares ETFs, VictoryShares USAA ETFs, and USAA 529 Education Savings Plan (Plan). Victory Capital mutual funds, USAA Mutual Funds, and th
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