Victory Capital Holdings, Inc. Class A Common Stock · NASDAQ:VCTR
Victory Capital Holdings, Inc. Class A Common Stock — Q4 2024 Earnings Presentation
34 slides from Victory Capital Holdings, Inc. Class A Common Stock's earnings presentation, Feb 7, 2025
Slide 1: Fourth Quarter 2024 Earnings Presentation
Fourth Quarter 2024 Earnings Presentation February 7, 2025
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “e
Slide 3: Agenda
Agenda Quarterly Business Overview Investment Performance Fourth Quarter 2024 Financial Results Appendix 3
Slide 4: Quarterly Business Overview
Quarterly Business Overview
Slide 5: Business Overview
Business Overview Total client assets of $176.1bn Long-term gross flows of $6.6bn; net flows of -$1.7bn Q4 2024 Q4 adjusted earnings per diluted share with tax benefit of $1.45 Highlights Adjusted EBITDA of $126MM Adjusted EBITDA margin of 54% Expected closing by end of Q1 2025 $100MM
Slide 6: VictoryShares ETF Platform
VictoryShares® - ETF Platform Platform has grown since ETF AUM ($Bn) acquiring business in 2015 January 2025: 12 $11.7bn of AUM Leverage investment (26 ETFs) expertise across our Investment Franchises and Solutions Platform 10 Use intermediary distribution footprint to 8 July 2019: continue sa
Slide 7: Long-Term Growth & Capital Allocation Strategy
Long-Term Growth & Capital Allocation Strategy Enhancing Shareholder Value by: Enhancing Balance Sheet Flexibility with: Improving platform with every strategic acquisition Capital allocation policy that supports growth strategy Evolving product set to drive organic growth Strong free cash f
Slide 8: Investment Performance
J Victory Capital Investment Performance
Slide 9: 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 66% Total Mutual Funds and ETFs AUM with 4- or 5-Star overall ratings AUM outperforming benchmarks Strategies outperforming benchmarks 65% 79% 58% 58% 73% 53% 59% 47% 1-year period 3-year
Slide 10: Fourth Quarter 2024 Financial Results
Fourth Quarter 2024 Financial Results
Slide 11: Financial Results
Financial Results Revenue of $232.4MM GAAP Operating Income of $111.7MM GAAP Operating margin of 48.1% Q4 2024 GAAP Net Income of $1.17 per diluted share Financial Adjusted EBITDA of $125.5MM Results Adjusted EBITDA margin of 54.0% Adjusted Net Income with tax benefit of $95.1MM ANI
Slide 12: Total Client Assets
Total Client Assets Total Client Assets at Period End ($Bn) Well-diversified Retail Institutional Direct distribution channels and client base 181.1 176.1 175.5 173.8 Retail Institutional Direct Significant diversification within each channel Q1 '24 Q2 '24 Q3 '24 Q4 '24 12
Slide 13: Long-Term AUM Flows
Long-Term AUM Flows Long-Term AUM Flows ($Bn) Multiple Investment Franchises generated 3/31/18 Gross Flows Gross Redemptions Net Flows positive long-term net flows for the fourth quarter: Victory Income Investors RS Global VictoryShares And, for FY 2024: 7.0 5.8 5.9 6.6 Victory Income In
Slide 14: Revenue
Revenue Total Revenue ($MM) Record high quarterly $250 and annual revenue 232.4 225.6 Revenue increased 3% 215.9 219.6 from Q3 $200 Up 13% from Q4 2023 Year-over-year revenue grew 9% in 2024 $150 $100 Operating Metrics Q1 ‘24 Q2 ‘24 Q3 ‘24 Q4 ‘24 Average Total AUM ($Bn) 163.5 167.5 171.9 175
Slide 15: Expenses
Expenses Total Expenses ($MM) Cash compensation rate consistent and Compensation Operating Non-Operating within expected range Cash compensation, % of revenue Interest expense declined $1.8MM from 144.0 133.8 120.0% previous quarter 123.8 118.1 100.0% 80.0% 60.0% 24.6% 23.4% 23.6% 23.8% 40.0% 20
Slide 16: Non-GAAP Metrics
Non-GAAP Metrics 9/30/17 Record quarterly diluted $MM (except per-share data) earnings per share of $1.45 ANI Tax Benefit ANI with tax benefit per diluted share 2024 vs 2023: $1.45 $1.50 Adjusted EBITDA up 14% $125.0 $1.35 $1.40 $1.31 ANI with Tax Benefit up 15% $1.25 $1.30 ANI with Tax Be
Slide 17: Capital Management
Capital Management ($mm) 3/31/18 9/30/17 Selected Balance Sheet Items Dec 31, 2024 Interest Expense and Other Debt ($MM) Financing Costs ($MM) Cash / Cash Equivalents ($MM) 127 1,002 992 992 972 16.5 16.3 16.4 Debt ($MM) 972 14.7 Stockholders' Equity ($MM) 1,122 Diluted Shares Outstanding (MM) 65.5
Slide 18: Appendix
J VictoryC Appendix
Slide 19: Shareholder Value Creation since IPO
Shareholder Value Creation since IPO Dec 31, 2024 $65.46 0.8 Cash Dividends Per Share Total Shareholder Return of 479% $60.00 Stock Price 0.7 0.6 $50.00 0.5 $40.00 $0.47 0.4 $0.44 IPO: $0.37 $0.41 $30.00 Feb 7, 2018 0.3 $0.32 $0.32 $0.32 $0.32 $0.34 $13.00 $20.00 0.2 $0.25 $0.25 $0.25 $0.25 $0.17 $0
Slide 20: Growth of Adjusted EBITDA & Margin Expansion
Growth of Adjusted EBITDA & Margin Expansion Quarterly Adjusted EBITDA up 215% Adjusted EBITDA Margin Expanded 1,610 bps 55% 54.0% $140 $126 MILLION 50% $120 $100 45% Adjusted EBITDA Margin Adjusted EBITDA $80 40% 37.9% $60 $40 MILLION 35% $40 30% $20 $0 25% 20
Slide 21: Growth of Adjusted EPS with Tax Benefit
Growth of Adjusted EPS with Tax Benefit Strong history of EPS growth Quarterly Adjusted EPS with Tax Benefit up 263% $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 21
Slide 22: 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 $1.6Bn in total future tax amortization o $393MM in future cash tax savings, assuming 25% tax rate o
Slide 23: 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 24: 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 25: Consolidated Reconciliations of Adjusted EBITDA
Consolidated Reconciliations of Adjusted EBITDA For the three months ended, (in thousands except percentages) 12/31/2023 03/31/2024 06/30/2024 09/30/2024 12/31/2024 GAAP Net income $ 55,206 $ 55,691 $ 74,251 $ 81,983 $ 76,939 GAAP Income tax expense (18,316) (16,197) 21,524 (25,517) (21,654) GAAP in
Slide 26: Historical Reconciliations of Adjusted EBITDA
Historical Reconciliations of Adjusted EBITDA For the three months ended, (in thousands except percentages) 3/31/2018 6/30/2018 9/30/2018 12/18/2018 3/31/2019 6/30/2019 9/30/2019 12/31/2019 3/31/2020 6/30/2020 9/30/2020 GAAP Net income $ $ $ $ 13,915 $ 14,527 $ 14,383 $ 25,992 $ 37,589 $ 57,166 $ 44
Slide 27: Consolidated Reconciliations of Adjusted Net Income
Consolidated Reconciliations of Adjusted Net Income For the three months ended, (in thousands, except per-share data) 12/31/2023 03/31/2024 06/30/2024 09/30/2024 12/31/2024 GAAP Net Income $ 55,206 $ 55,691 $ 74,251 $ 81,983 $ 76,939 Other business taxes 305 369 414 366 376 GAAP amortization of acqu
Slide 28: Historical Reconciliations of Adjusted Net Income
Historical Reconciliations of Adjusted Net Income 3/31/2018 6/30/2018 9/30/2018 12/31/2018 3/31/2019 6/30/2019 9/30/2019 12/31/2019 3/31/2020 6/30/2020 9/30/2020 GAAP Net Income $ 10,524 $ 18,675 $ 20,590 $ 13,915 $ 14,527 $ 14,383 $ 25,992 $ 37,589 $ 57,166 $ 44,720 $ 55,741 Other business taxes 37
Slide 29: Detailed Reconciliation of Q4 '24 Adjusted Net Income
Detailed Reconciliation of Q4 ‘24 Adjusted Net Income Three months ended December 31, 2024 (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 Tota
Slide 30: Detailed Reconciliation of Q3 '24 Adjusted Net Income
Detailed Reconciliation of Q3 ‘24 Adjusted Net Income Three months ended September 30, 2024 (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 Tot
Slide 31: Detailed Reconciliation of Q2 '24 Adjusted Net Income
Detailed Reconciliation of Q2 ‘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 32: 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 33: 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 34: 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 December 31, 2024. Past performance does not guarantee future
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