Victory Capital Holdings Inc
For the period ended Mar 31, 2025. Filed May 9, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
VCTR$119.24+6.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0000950170-24-123762
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0000950170-25-067558
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 148 previous paragraphs and 119 current paragraphs.
72 unchanged; 35 reworded; 11 added; 40 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
AUM at March 31, 2025 decreased by $4.5 billion, or 2.6%, to $167.5 billion from $171.9 billion at December 31, 2024, driven by negative market action of $3.2 billion net outflows of $1.2 billion. Total gross flows for the first quarter were $9.5 billion, including long-term gross flows of $9.3 billion.
Current report
AUM at March 31, 2025 and 2024 was $167.5 billion and $170.3 billion, respectively. We experienced $3.2 billion in negative market action for the three months ended March 31, 2025 compared to $10.2 billion in market appreciation for the same period in 2024. We generated $9.5 billion in gross sales, including $9.3 billion in long-term gross sales, and $1.2 billion in total net outflows for the three months ended March 31, 2025 compared to $7.2 billion in gross sales, including $7.0 billion in long-term gross sales, and $1.1 billion in total net outflows for the same period in 2024.
Current report
Net income was $62.0 million for the three months ended March 31, 2025 compared to $55.7 million for the same period in 2024.
Current report
Three months ended March 31, 2025 compared to March 31, 2024. Personnel compensation and benefits were $56.1 million for the first quarter of 2025, a decrease of $3.4 million, or 5.6%, from $59.5 million for the same period in 2024. Salaries, payroll related taxes and employee benefits decreased $2.7 million primarily due lower unrealized gains relating to our deferred compensation plans. Acquisition and transaction-related compensation decreased $1.0 million due to lower contingent payment compensation expense.
Current report
Three months ended March 31, 2025 compared to March 31, 2024. General and administrative expenses were $14.3 million for the three months ended March 31, 2025 compared to $14.0 million for the same period in 2024. The increase of $0.3 million, or 2.3%, was primarily due to increases in technology related expenses.
Current report
Three months ended March 31, 2025 compared to March 31, 2024. Acquisition-related costs were $8.8 million for the three months ended March 31, 2025, compared to $1.0 million for the same period in 2024. The increase of $7.7 million was primarily due to legal, professional, and proxy solicitation related to the Amundi US acquisition.
Current report
Interest Income and Other Income (Expense)
Current report
Three months ended March 31, 2025 compared to March 31, 2024. Interest expense and other financing costs decreased $3.3 million to $13.2 million for the three months ended March 31, 2025, compared to $16.5 million for the same period in 2024 as a result of a lower debt principal balance and lower average interest rate over the comparable period.
Current report
Fifth Amendment
Current report
On July 1, 2024, the Company executed an agency succession agreement, by and among Barclays Bank PLC as the resigning administrative agent and collateral agent under the 2019 Credit Agreement and Royal Bank of Canada, as the successor administrative agent and collateral agent.
Current report
Financing Activities – Cash used in financing activities during the three months ended March 31, 2025 was $30.7 million, compared to $111.3 million of cash used in financing activities for the same period in 2024. The $80.6 million decrease was primarily due to timing of payment relating to WestEnd contingent consideration.
Removed paragraphs (40)
Previous report
WestEnd Acquisition (the “WestEnd Acquisition”) – On December 31, 2021, the Company completed the acquisition of 100% of the equity interests of WestEnd Advisors, LLC ("WestEnd") pursuant to the WestEnd purchase agreement (as amended, the “WestEnd Purchase Agreement”). Founded in 2004, and headquartered in Charlotte, NC, WestEnd is an ETF strategist advisor that provides financial advisors with a turnkey, core model allocation strategy for either a holistic solution or complementary source of alpha. The firm offers four primary ETF strategies and one large cap core strategy, all in tax efficient SMA structures. Refer to Note 4, Acquisitions, for further details on the WestEnd Acquisition.
Previous report
NEC Acquisition (the “NEC Acquisition”) – On November 1, 2021, the Company completed the acquisition of 100% of the equity interests in New Energy Capital ("NEC"). Founded in 2004 and based in Hanover, NH, NEC is an alternative asset management firm focused on debt and equity investments in clean energy infrastructure projects and companies. Refer to Note 4, Acquisitions, for further details on the NEC Acquisition.
Previous report
USAA AMCO Acquisition – On July 1, 2019, the Company completed the acquisition (the “USAA AMCO Acquisition”) of USAA Asset Management and Victory Capital Transfer Agency ("VCTA"), formally known as the USAA Transfer Agency Company. The acquisition expanded and diversified the Company’s investment platform and increased the Company’s size and scale. Refer to Note 4, Acquisitions, for further details on the USAA AMCO Acquisition.
Previous report
Amundi US Contribution -On July 8, 2024, the Company, Amundi and, solely for certain provisions thereof, Amundi S.A., (“Amundi Parent,” and together with Amundi, the “Amundi Parties”) entered into the Contribution Agreement, pursuant to which, upon the terms and subject to the conditions set forth therein, Amundi will contribute to the Company, all of the shares of Amundi US. The contribution will result in Amundi US becoming a wholly owned subsidiary of Victory.
Previous report
Amundi US, based in Boston, Massachusetts, is a wholly owned subsidiary of Amundi, which is headquartered in Paris, France. Amundi US’s activities are principally conducted by its wholly owned subsidiary Amundi US, Inc. Amundi US, Inc. specializes in providing and distributing investment solutions to a wide range of clients and investors, including institutional investors, corporations, central banks, sovereign wealth funds, and individual investors.
Previous report
At the closing of the transactions contemplated by the Contribution Agreement (the “Closing”), in exchange for the shares of Amundi US, Amundi will receive 26.1% of the Company’s fully diluted shares after giving effect to that issuance (the “Base Share Consideration”). This will be composed of newly issued shares of the Company Common Stock, par value $0.01, representing 4.9% of the number of issued and outstanding shares of Company Common Stock, after giving effect to that issuance, and the balance in newly issued shares of a new class of the Company Preferred Stock. The Base Share Consideration is subject to customary adjustments based on the level of client consents received, Amundi US’s net working capital, debt, cash and transaction expenses as described in the Contribution Agreement.
Previous report
At the Closing, the Company and Amundi will enter into a shareholder agreement (the “Shareholder Agreement”), pursuant to which, among other things, Amundi will be (i) will be granted certain resale shelf and piggyback registration rights in respect of the shares of Company Preferred Stock and Company Common Stock issued to it under the Contribution Agreement (the “Acquired Shares”), and (ii) is entitled to nominate two members of the Board for so long as it holds a certain amount of the Acquired Shares. In addition, for a period of three years following the Closing, Amundi will be subject to a customary “lock-up” of the Acquired Shares (subject to certain exceptions) and a standstill, which among other things, prohibits Amundi from acquiring additional equity securities of the Company (subject to certain exceptions).
Previous report
The Amundi Parties, the Company, and VCM have also entered into an Off-Shore Master Distribution and Services Agreement and an On-Shore Master Distribution and Services Agreement which will become effective on the date of the Closing (except with respect to certain specified provisions set forth therein, which became effective as of the entry into such agreements).
Previous report
The Closing of the transaction is expected to occur during the first quarter of 2025 and is subject to customary closing conditions, regulatory approvals and regulatory authorizations.
Previous report
AUM at September 30, 2024 increased by $7.4 billion, or 4.4%, to $176.1 billion from $168.7 billion at June 30, 2024, driven by market appreciation of $10.1 billion and net outflows of $2.6 billion.
Previous report
AUM at September 30, 2024 and 2023 was $176.1 billion and $148.9 billion, respectively. We generated $6.1 billion in gross flows and $2.6 billion in net outflows for the three months ended September 30, 2024 compared to $5.1 billion in gross flows and $2.0 billion in net outflows for the same period in 2023.
Previous report
AUM at September 30, 2024 and 2023 was $176.1 billion and $148.9 billion, respectively. We generated $19.4 billion in gross flows and $5.5 billion in net outflows for the nine months ended September 30, 2024 compared to $17.0 billion in gross flows and $4.6 billion in net outflows for the same period in 2023. Net flows for the nine months ended September 30, 2024 were comprised of $5.4 billion and $0.1 billion of net long-term and short-term outflows, respectively.
Previous report
Net income was $82.0 million for the three months ended September 30, 2024 compared to $52.0 million for the same period in 2023. For the nine months ended September 30, 2024 and 2023, net income was $211.9 million and $158.0 million, respectively.
Previous report
(2) Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.
Previous report
(4) Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.
Previous report
September 30, 2024 AUM compared to December 31, 2023 AUM. Total AUM increased by $14.8 billion, or 9.2%, to $176.1 billion at September 30, 2024 compared to $161.3 billion at December 31, 2023. The increase in AUM was due to positive market action of $20.3 billion partially offset by net outflows of $5.5 billion.
Previous report
Nine months ended September 30, 2024 compared to September 30, 2023. Investment management fees increased by $40.6 million, or 8.4%, to $520.8 million for the nine months ended September 30, 2024 from $480.2 million due to the same factors discussed above in the quarterly section.
Previous report
Three months ended September 30, 2024 compared to September 30, 2023. Fund administration and distribution fees increased by $2.1 million, or 4.6%, to $47.8 million for the three months ended September 30, 2024 compared to $45.7 million for the same period in 2023 due primarily to higher mutual fund average net assets.
Previous report
Three months ended September 30, 2024 compared to September 30, 2023. Personnel compensation and benefits were $43.2 million for the three months ended September 30, 2024, a decrease of $11.3 million, or 20.7%, from $54.5 million for the same period in 2023 mostly attributable to a decrease in acquisition and transaction-related compensation of $15.2 million for the three months ended September 30, 2024, compared to an increase of $1.4 million for the same period in 2023. Excluding the impact of acquisition and transaction-related compensation over the comparable period, personnel compensation and benefits increased $3.9 million, or 7.2%, due to an increase in variable costs such as incentive and sales-based compensation. Incentive compensation and equity awards granted to employees and directors were $26.5 million and $3.7 million, respectively, for the three months ended September 30, 2024, compared to $23.9 million and $3.9 million, respectively, for the same period in 2023.
Previous report
Nine months ended September 30, 2024 compared to September 30, 2023. Personnel compensation and benefits decreased by $8.7 million, or 5.2%, to $158.4 million for the nine months ended September 30, 2024 from $167.0 million for the same period in 2023 due to a decrease in acquisition and transaction-related compensation of $13.7 million for the nine months ended September 30, 2024, compared to an increase of $4.4 million for the same period in 2023, partially offset by an increase in variable costs such as incentive and sales-based compensation. Incentive compensation and equity awards granted to employees and directors were $74.9 million and $11.4 million, respectively, for the nine months ended September 30, 2024, compared to $67.1 million and $12.4 million, respectively, for the same period in 2023.
Previous report
Nine months ended September 30, 2024 compared to September 30, 2023. Distribution and other asset-based expenses were $109.6 million for the nine months ended September 30, 2024, a decrease of $3.6 million, or 3.2%, from $113.2 million for the same period in 2023 primarily due to a decrease in the same factors as discussed above in the quarterly section.
Previous report
Three months ended September 30, 2024 compared to September 30, 2023. General and administrative expenses remained flat at $14.0 million and $13.9 million, respectively, for the three months ended September 30, 2024 and 2023.
Previous report
Nine months ended September 30, 2024 compared to September 30, 2023. For the nine months ended September 30, 2024 and 2023, general and administrative expenses were $42.4 million and $39.6 million, respectively, for a year over year increase of $2.8 million, or 7.2%. The increase was primarily due to an increase in technology and marketing-related expenses.
Previous report
Three months ended September 30, 2024 compared to September 30, 2023. Depreciation and amortization decreased by $4.8 million, or 39.1%, to $7.5 million for the three months ended September 30, 2024 from $12.3 million for the same period in 2023, due to the write-down of a trade name asset as a result of a change in the estimated remaining useful life during the three months ended September 30, 2023, with no such expense incurred during the current comparable period.
Previous report
Nine months ended September 30, 2024 compared to September 30, 2023. The change in value of consideration payable for acquisition of business decreased $16.8 million due to the same factors as discussed above in the quarterly section. The change in the fair value of the contingent consideration associated with the WestEnd Acquisition increased $2.4 million, net for the nine months ended September 30, 2024, compared to an increase of $10.5 million, net and $8.7 million, associated with the WestEnd Acquisition and USAA AMCO, respectively, for the same period in 2023. Refer to Note 4, Acquisitions, for further details on the fair value of contingent consideration payable.
Previous report
Three months ended September 30, 2024 compared to September 30, 2023. Acquisition-related costs were $5.1 million and $0.1 million for the three months ended September 30, 2024 and 2023, respectively. The acquisition-related costs for the three months ended September 30, 2024 related to legal and professional fees associated with the Amundi transaction.
Previous report
Nine months ended September 30, 2024 compared to September 30, 2023. Acquisition-related costs were $9.2 million and $0.1 million for the nine months ended September 30, 2024 and 2023, respectively. The acquisition-related costs for the nine months ended September 30, 2024 were related to the same factors discussed above in the quarterly section.
Previous report
Nine months ended September 30, 2024 compared to September 30, 2023. Restructuring and integration costs were $0.8 million and $0.3 million for the nine months ended September 30, 2024 and 2023, respectively. The restructuring and integration costs for the nine months ended September 30, 2024 were related to the same factors discussed above in the quarterly section.
Previous report
Interest Income and Other Income
Previous report
Nine months ended September 30, 2024 compared to September 30, 2023. For the nine months ended September 30, 2024 and 2023, interest income and other income was $8.7 million and $5.0 million, respectively. The income for the nine months ended September 30, 2024 and 2023 was related to the same factors discussed above in the quarterly section.
Previous report
Three months ended September 30, 2024 compared to September 30, 2023. Interest expense and other financing costs increased by $0.8 million to $16.4 million for the three months ended September 30, 2024, compared to $15.6 million for the same period in 2023 due to the interest rate swap ("Swap"). For the three months ended September 30, 2024, the Company recognized $4.2 million of deferred gains from the Swap monetization, compared to recognizing Swap income of $5.1 million for the same period in 2023.
Previous report
Nine months ended September 30, 2024 compared to September 30, 2023. For the nine months ended September 30, 2024 and 2023, interest expense and other financing costs were $49.2 million and $44.7 million, respectively. The year-over-year increase is primarily due to a higher average interest rate and the impact of the Swap. For the nine months ended September 30, 2024, the Company recognized $12.5 million of deferred gains from the Swap monetization, compared to recognizing Swap income of $14.0 million for the same period in 2023. Refer to Note 9, Debt, for further details on the 2019 Credit Agreement, and Note 14, Derivatives, for further details on the Swap.
Previous report
Nine months ended September 30, 2024 compared to September 30, 2023. For the nine months ended September 30, 2024 and 2023, the effective tax rate was 23.0% and 22.0%, respectively. Refer to Note 8, Income Taxes, for further details on the Company's income taxes.
Previous report
For the three and nine months ended September 30, 2023, the Company reclassified income of $5.1 million and $14.0 million, respectively, from accumulated other comprehensive income (loss) to interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations as a result of changes in the fair value of the Swap.
Previous report
Cash provided by operating activities during the nine months ended September 30, 2023 was $233.2 million and comprised of $158.0 million and $87.7 million of net income and non-cash items, respectively, partially offset by $12.5 million in working capital source of cash.
Previous report
Cash used in investing activities during the nine months ended September 30, 2023 was $6.3 million and consisted of primarily of property and equipment purchases of $4.4 million and $1.9 million of net trading activity.
Previous report
Financing Activities – Cash used in financing activities during the nine months ended September 30, 2024 was $182.0 million and was mostly attributable to payment of consideration for acquisition, payment of dividends, repayment of long-term debt, repurchases of common stock, and net activity related to stock-based equity awards of $80.0 million, $73.0 million, $9.5 million, $6.7 million, and $11.8 million, respectively.
Previous report
Cash used in financing activities during the nine months ended September 30, 2023 was $157.1 million and was mostly attributable to repurchases of common stock, payment of dividends, and net activity related to stock-based equity awards of $81.8 million, $64.8 million, and $10.5 million, respectively.
Previous report
Critical Accounting Policies and Estimates
Previous report
Our consolidated financial statements and the notes are prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates. Actual results will vary from these estimates. A discussion of our critical accounting policies and estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K. A complete description of our significant accounting policies is included in our Annual Report on Form 10-K.
Reworded paragraphs (35)
Previous wording
The objective of this section of the Quarterly Report on Form 10-Q is intended to provide a discussion and analysis, from management’s perspective, of the key performance indicators and material information necessary to assess our financial condition and results of operations for the three and nine months ended September 30, 2024 and 2023 and cash flows for the nine months ended September 30, 2024 and 2023. In addition, we also discuss the Company’s contractual and off-balance sheet arrangements. This discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2023. This discussion and analysis contains forward-looking statements and should also be read in conjunction with the disclosures and information contained in “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and in “Item 1A. Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
The objective of this section of the Quarterly Report on Form 10-Q is intended to provide a discussion and analysis, from management’s perspective, of the key performance indicators and material information necessary to assess our financial condition and results of operations for the three months ended March 31, 2025 and 2024 and cash flows for the three months ended March 31, 2025 and 2024. In addition, we also discuss the Company’s contractual and off-balance sheet arrangements. This discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2024. This discussion and analysis contains forward-looking statements and should also be read in conjunction with the disclosures and information contained in “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and in “Item 1A. Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
Our Business – Victory is a diversified global asset management firm with total client assets of $181.1 billion, assets under management of $176.1 billion and other assets of $5.0 billion as of September 30, 2024. The Company operates a next-generation business model combining boutique investment qualities with the benefits of an integrated, centralized operating and distribution platform.
Current wording
Our Business –Victory is a diversified global asset management firm with total client assets of $171.4 billion, assets under management of $167.5 billion and other assets of $4.0 billion as of March 31, 2025. The Company operates a next-generation business model combining boutique investment qualities with the benefits of an integrated, centralized operating and distribution platform.
Previous wording
The Company provides specialized investment strategies to institutions, intermediaries, retirement platforms and individual investors with 11 autonomous Investment Franchises and a Solutions Platform. Victory Capital offers a wide array of investment products, including actively and passively managed mutual funds, rules-based and active exchange traded funds (“ETFs”), institutional separate accounts, variable insurance products (“VIPs”), alternative investments, private closed end funds, and a 529 Education Savings Plan. Victory Capital’s strategies are also offered through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts (“SMAs”) and unified managed accounts (“UMAs”) through wrap account programs, Collective Investment Trusts (“CITs”), and undertakings for the collective investment in transferable securities (“UCITs”). As of September 30, 2024, our Franchises and our Solutions Platform collectively managed a diversified set of 126 investment strategies for a wide range of institutional and retail clients and direct investors.
Current wording
The Company provides specialized investment strategies to institutions, intermediaries, retirement platforms and individual investors with 11 autonomous Investment Franchises and a Solutions Platform. Victory Capital offers a wide array of investment products, including actively and passively managed mutual funds, rules-based and active exchange traded funds (“ETFs”), institutional separate accounts, variable insurance products (“VIPs”), alternative investments, private closed end funds, and a 529 Education Savings Plan. Victory Capital’s strategies are also offered through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts (“SMAs”) and unified managed accounts (“UMAs”) through wrap account programs, Collective Investment Trusts (“CITs”), and undertakings for the collective investment in transferable securities (“UCITs”). As of March 31, 2025, our Franchises and our Solutions Platform collectively managed a diversified set of 125 investment strategies for a wide range of institutional and retail clients and direct investors.
Previous wording
Professionals within our institutional and retail distribution channels, direct investor business and marketing organization sell our products through our centralized distribution model. Our institutional sales team focuses on cultivating relationships with institutional consultants, who account for the majority of the institutional market, as well as asset allocators seeking sub-advisers. Our retail sales team offers intermediary and retirement platform clients, including broker-dealers, retirement platforms and registered investment adviser networks, mutual funds and ETFs as well as SMAs through wrap fee programs and access to our investment models through UMAs. Our direct investor business serves the investment needs of individual clients.
Current wording
Professionals within our institutional and retail distribution channels, direct investor business and marketing organization sell our products through our centralized distribution model. Our institutional sales team focuses on cultivating relationships with institutional consultants, who account for the majority of the institutional market, as well as asset allocators seeking sub-advisers. Our retail sales team offers intermediary and retirement platform clients, including broker-dealers, retirement platforms and RIA networks, mutual funds and ETFs as well as SMAs through wrap fee programs and access to our investment models through UMAs. Our direct investor business serves the investment needs of individual clients.
Previous wording
We have grown our total client assets from $17.9 billion following the management-led buyout with Crestview Partners II GP, L.P. in August 2013 to $181.1 billion at September 30, 2024. We attribute this growth to our success in sourcing acquisitions and evolving them into organic growers, generating strong investment returns, and developing institutional, retail, and direct investor channels with deep penetration.
Current wording
We have grown our total client assets from $17.9 billion following the management-led buyout with Crestview GP in August 2013 to $171.4 billion at March 31, 2025. We attribute this growth to our success in sourcing acquisitions and evolving them into organic growers, generating strong investment returns, and developing institutional, retail, and direct investor channels with deep penetration.
Previous wording
43 of our Victory Capital mutual funds and ETFs had overall Morningstar ratings of four or five stars and 67% of our fund and ETF AUM were rated four or five stars overall by Morningstar. 46% of our strategies by AUM had investment returns in excess of their respective benchmarks over a one-year period, 60% over a three-year period, 73% over a five-year period and 77% over a ten-year period. On an equal-weighted basis, 48% of our strategies have outperformed their benchmarks over a one-year period, 63% over a three-year period, 58% over a five-year period and 61% over a ten-year period.
Current wording
45 of our Victory Capital mutual funds and ETFs had overall Morningstar ratings of four or five stars and 67% of our fund and ETF AUM were rated four or five stars overall by Morningstar. 47% of our strategies by AUM had investment returns in excess of their respective benchmarks over a one-year period, 64% over a three-year period, 65% over a five-year period and 79% over a ten-year period. On an equal-weighted basis, 48% of our strategies have outperformed their benchmarks over a one-year period, 63% over a three-year period, 59% over a five-year period and 64% over a ten-year period.
Previous wording
Total revenue for the three months ended September 30, 2024 was $225.6 million compared to $209.7 million for the same period in 2023. For the nine months ended September 30, 2024 and 2023, total revenue was $661.1 million and $615.2 million, respectively.
Current wording
Total revenue for the three months ended March 31, 2025 was $219.6 million compared to $215.9 million for the same period in 2024.
Previous wording
Adjusted EBITDA was $121.3 million for the three months ended September 30, 2024, or 53.7% of revenue, compared to $107.2 million, or 51.1% of revenue, for the same period in 2023. For the nine months ended September 30, 2024, Adjusted EBITDA was $350.1 million, or 53.0% of revenue, compared to $310.4 million, or 50.5% of revenue, for the same period in 2023. Refer to “Supplemental Non-GAAP Financial Information” for further information about the Adjusted EBITDA calculation and reconciliation of generally accepted accounting principles (“GAAP”) net income to Adjusted EBITDA.
Current wording
Adjusted EBITDA was $116.4 million for the three months ended March 31, 2025, or 53.0% of revenue, compared to $112.4 million, or 52.1% of revenue, for the same period in 2024. Refer to “Supplemental Non-GAAP Financial Information” for further information about the Adjusted EBITDA calculation and reconciliation of generally accepted accounting principles (“GAAP”) net income to Adjusted EBITDA.
Previous wording
Adjusted Net Income with tax benefit was $89.0 million for the three months ended September 30, 2024 compared to $79.8 million for the three months ended September 30, 2023. For the nine months ended September 30, 2024, Adjusted Net Income with tax benefit was $258.0 million compared to $230.9 million for the same period in 2023. Refer to “Supplemental Non-GAAP Financial Information” for further information about the Adjusted Net Income calculation and reconciliation of GAAP net income to Adjusted Net Income.
Current wording
Adjusted Net Income with tax benefit was $88.1 million for the three months ended March 31, 2025 compared to $82.3 million for the three months ended March 31, 2024. Refer to “Supplemental Non-GAAP Financial Information” for further information about the Adjusted Net Income calculation and reconciliation of GAAP net income to Adjusted Net Income.
Previous wording
The following table presents our AUM by asset class as of the dates indicated:
Current wording
The following table presents our total AUM by asset class as of the dates indicated:
Previous wording
The following tables summarize our asset flows by asset class for the periods indicated:
Current wording
The following tables summarize our total AUM asset flows by asset class for the periods indicated:
Previous wording
The following table presents our AUM by distribution channel as of the dates indicated:
Current wording
The following table presents our total AUM by distribution channel as of the dates indicated:
Previous wording
September 30, 2024 AUM compared to June 30, 2024 AUM. At September 30, 2024, our total AUM was $176.1 billion, an increase of $7.4 billion, or 4.4%, from $168.7 billion at June 30, 2024, driven by market appreciation of $10.1 billion and net outflows of $2.6 billion.
Current wording
March 31, 2025 AUM compared to December 31, 2024 AUM. At March 31, 2025, our total AUM was $167.5 billion, a decrease of $4.5 billion, or 2.6%, from $171.9 billion at December 31, 2024, primarily due to negative market action of $3.2 billion and net outflows of $1.2 billion.
Previous wording
Net outflows were driven by our U.S. mid cap, U.S. small cap, and U.S. large cap equity strategies, and our fixed income strategies of $2.5 billion, $1.3 billion, $0.9 billion, and $0.6 billion, respectively, partially offset by net inflows of $0.4 billion in our global/non-US equity strategies.
Current wording
Net outflows were driven by our global non-U.S., U.S. mid cap, U.S. small cap, and U.S. large cap equity strategies as well as our fixed income strategies and Alternative investments platform of $1.1 billion, $0.6 billion, $0.4 billion, $0.4 billion, $0.6 billion, and $0.1 billion, respectively, partially offset by net inflows from our Solutions platform of $2.0 billion.
Previous wording
The following table presents our GAAP results of operations for the three and nine months ended September 30, 2024 and 2023.
Current wording
The following table presents our GAAP results of operations for the three months ended March 31, 2025 and 2024.
Previous wording
Three months ended September 30, 2024 compared to September 30, 2023. Investment management fees increased 8.5%, or $13.9 million, to $177.8 million for the three months ended September 30, 2024 from $164.0 million for the same period in 2023 due to an increase in average AUM over the comparable period.
Current wording
Three months ended March 31, 2025 compared to March 31, 2024. Investment management fees increased by $3.5 million, or 2.1%, to $173.3 million for the three months ended March 31, 2025 from $169.8 million for the same period in 2024 due to an increase in average AUM year over year. Average AUM was $173.8 billion for the three months ended March 31, 2025 compared to $163.5 billion for the same period in 2024.
Previous wording
Nine months ended September 30, 2024 compared to September 30, 2023. Fund administration and distribution fees increased by $5.3 million, or 3.9%, to $140.3 million for the nine months ended September 30, 2024 from $135.0 million for the same period in 2023 due to the same factors as discussed above in the quarterly section.
Current wording
Three months ended March 31, 2025 compared to March 31, 2024. Fund administration and distribution fees increased by $0.2 million, or 0.5%, to $46.3 million for the three months ended March 31, 2025 from $46.1 million for the same period in 2024 mostly due to an increase in fund administration fees partially offset by a decrease in transfer agent fees.
Previous wording
The following table presents the components of GAAP personnel compensation and benefits expense for the three and nine months ended September 30, 2024 and 2023:
Current wording
The following table presents the components of GAAP personnel compensation and benefits expense for the three months ended March 31, 2025 and 2024:
Previous wording
(1) Represents sales-based commissions paid to our distribution teams. Sales-based compensation varies based on gross client cash flows and revenue earned on sales.
Current wording
Represents sales-based commissions paid to our distribution teams. Sales-based compensation varies based on gross and net client cash flows and revenue earned on sales.
Previous wording
The following table presents the components of distribution and other asset-based expenses for the three and nine months ended September 30, 2024 and 2023:
Current wording
The following table presents the components of distribution and other asset-based expenses for the three months ended March 31, 2025 and 2024:
Previous wording
Three months ended September 30, 2024 compared to September 30, 2023. Distribution and other asset-based expenses are primarily based on AUM. For the three months ended September 30, 2024, distribution and other asset-based expenses were $36.8 million, a decrease of $1.3 million, or 3.5%, from $38.2 million for the same period in 2023. The decrease is primarily due to lower platform distribution fees over the comparable period.
Current wording
Three months ended March 31, 2025 compared to March 31, 2024. Distribution and other asset-based expenses were $35.5 million for the three months ended March 31, 2025, compared to $36.3 million for the same period in 2024. The decrease of $0.8 million, or 2.2% was primarily due to lower platform distribution and sub-advisory fees over the comparable period.
Previous wording
Nine months ended September 30, 2024 compared to September 30, 2023. Depreciation and amortization decreased by $11.0 million, or 32.7%, to $22.7 million for the nine months ended September 30, 2024 from $33.7 million for the same period in 2023 due to a decrease in amortization expense related to definite-lived intangible assets in connection with prior acquisitions and the same factors as discussed above in the quarterly section.
Current wording
Three months ended March 31, 2025 compared to March 31, 2024. Depreciation and amortization decreased $0.2 million, or 2.2%, to $7.4 million for the three months ended March 31, 2025 from $7.6 million for the same period in 2024, primarily due to a decrease in depreciation expense related to information technology equipment.
Previous wording
Three months ended September 30, 2024 compared to September 30, 2023. The change in value of consideration payable for acquisition of business decreased $11.9 million as a result of a decrease of $1.6 million in the fair value of the contingent consideration associated with the WestEnd Acquisition for the three months ended September 30, 2024, compared to an increase of $7.6 million and $2.7 million associated with the WestEnd Acquisition and USAA AMCO, respectively, for the three months ended September 30, 2023. Refer to Note 4, Acquisitions, for further details on the fair value of contingent consideration payable.
Current wording
Three months ended March 31, 2025 compared to March 31, 2024. The change in value of consideration payable for acquisition of business decreased $8.8 million as a result of an increase of $3.4 million in the fair value of contingent consideration associated with the WestEnd Acquisition for the three months ended March 31, 2025 compared to an increase of $12.2 million for the three months ended March 31, 2024. Refer to Note 4, Acquisitions, for further details on the fair value of contingent consideration payable.
Previous wording
Three months ended September 30, 2024 compared to September 30, 2023. Restructuring and integration costs were $0.2 million for the three months ended September 30, 2024 and 2023, respectively, and were related to personnel restructuring. The restructuring and integration costs for the three months ended September 30, 2023 were due to the divestiture of certain INCORE accounts.
Current wording
Three months ended March 31, 2025 compared to March 31, 2024. Restructuring and integration costs for the three months ended March 31, 2025 and 2024 were $1.2 million and $0.5 million, respectively. Restructuring and integration costs for the three months ended March 31, 2025 and 2024 were primarily due to personnel restructuring.
Previous wording
Three months ended September 30, 2024 compared to September 30, 2023. For the three months ended September 30, 2024 and 2023, interest income and other income was $3.6 million and $1.5 million, respectively. The income for the three months ended September 30, 2024 and 2023 was primarily due to dividend income and an increase in the net unrealized fair value of deferred compensation plan investments.
Current wording
Three months ended March 31, 2025 compared to March 31, 2024. Interest income and other income/(expense) was income of $0.7 million and $3.6 million for the three months ended March 31, 2025 and 2024, respectively. The decrease is primarily due to a decrease in the net unrealized fair value of deferred compensation plan investments over the comparable period.
Previous wording
Three months ended September 30, 2024 compared to September 30, 2023. The effective tax rate for the three months ended September 30, 2024 and 2023 was 23.7% and 21.1%, respectively. The effective tax rate for the three months ended September 30, 2024 was higher than the effective tax rate for the same period in 2023 due primarily to lower excess tax benefits on share-based compensation.
Current wording
Three months ended March 31, 2025 compared to March 31, 2024. The effective tax rate for the three months ended March 31, 2025 and 2024 was 22.9% and 22.5%, respectively. The higher effective tax rate in 2025 is mainly due to lower excess tax benefits on share-based compensation when compared to the comparable period.
Previous wording
(5) Adding back stock‑based compensation associated with equity awards issued from pools created in connection with the management‑led buyout and various acquisitions and as a result of equity grants related to the IPO.
Current wording
Adding back share-based compensation associated with equity awards issued from pools created in connection with the management‑led buyout and various acquisitions and as a result of equity grants related to the IPO.
Previous wording
(1) The balances at September 30, 2024 and December 31, 2023 represent the Company’s $99.9 million revolving credit facility and a $0.1 million standby letter of credit used as collateral for THB’s real estate location.
Current wording
The balance at March 31, 2025 represents the Company’s $99.9 million revolving credit facility and a $0.1 million standby letter of credit used as collateral for THB’s real estate location.
Previous wording
We manage our cash balances in order to fund our day-to-day operations. Our accounts receivable consists primarily of investment management fees that have been earned but not yet received from clients, income and other taxes receivable, and amounts receivable from the funds. We perform a review of our receivables on a monthly basis to assess collectability.
Current wording
We manage our cash balances in order to fund our day-to-day operations. Our accounts receivable consists primarily of investment management fees that have been earned but not yet received from clients, income and other taxes receivable, and amounts receivable from the funds. We perform a review of our receivables on a monthly basis to assess collectability. We maintained a $100.0 million revolving credit facility at March 31, 2025 and December 31, 2024 (under the 2019 Credit Agreement) which had approximately $100.0 million undrawn as of March 31, 2025 and December 31, 2024.
Previous wording
We maintained a $100.0 million revolving credit facility at September 30, 2024 and December 31, 2023 (under the 2019 Credit Agreement) which had approximately $100.0 million undrawn as of September 30, 2024 and December 31, 2023. On June 7, 2024, the Company entered into the Fifth Amendment to the 2019 Credit Agreement, extending the maturity date of the $100.0 million senior secured first lien revolving facility from July 1, 2024 to March 31, 2026, and decreasing the drawn interest rate margin by 0.50% per annum. The revolving facility otherwise remains subject to substantially the same terms as those set forth in the 2019 Credit Agreement. The Company incurred $1.0 million in upfront fees, arranger fees and other third party costs related to the Fifth Amendment to the 2019 Credit Agreement, which were recorded to revolving credit facility debt issuance cost in other assets.
Current wording
On June 7, 2024, the Company entered into the Fifth Amendment (the "Fifth Amendment") to the 2019 Credit Agreement, extending the maturity date of the $100.0 million senior secured first lien revolving facility from July 1, 2024 to March 31, 2026, and decreasing the drawn interest rate margin by 0.50% per annum. The revolving facility otherwise remains subject to substantially the same terms as those set forth in the 2019 Credit Agreement. The Company incurred $1.0 million in upfront fees, arranger fees and other third party costs related to the Fifth Amendment to the 2019 Credit Agreement, which were recorded to revolving credit facility debt issuance cost in other assets.
Previous wording
In the fourth quarter of 2023, the Company monetized the gain on the floating-to-fixed Swap transaction entered into in 2020 to effectively fix the interest rate on $450 million of its outstanding Term Loan through the Term Loan maturity date of July 2026.
Current wording
In the fourth quarter of 2023, the Company monetized the gain on the floating-to-fixed interest rate swap transaction (“Swap”) entered into in 2020 to effectively fix the interest rate on $450 million of its outstanding Term Loan through the Term Loan maturity date of July 2026.
Previous wording
The deferred gain on the termination of the Swap is being amortized on a straight-line basis through July 1, 2026 and is included in interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations. As of September 30, 2024 and December 31, 2023, the unamortized deferred gain on Swap monetization was $29.1 million and $41.6 million, respectively, before tax.
Current wording
The deferred gain on the termination of the Swap is being amortized on a straight-line basis through July 1, 2026 and is included in interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations.
Previous wording
At September 30, 2024, the Company had $139.6 million in contingent consideration that is estimated to be payable over the next year and three years resulting from the WestEnd Acquisition. For the three and nine months ended September 30, 2024, the Company recorded a decrease of $1.6 million and an increase of $2.4 million, respectively, in the contingent payment liability associated with the WestEnd Acquisition, which is included in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets. In March 2024, the Company paid $80.0 million in cash to sellers for the first WestEnd earn out period payment. At September 30, 2024, the estimated fair value of the WestEnd Acquisition contingent payments was $139.6 million, and a maximum of $240.0 million in contingent consideration ($80.0 million per year) is potentially payable to sellers.
Current wording
At March 31, 2025, the Company had $143.3 million in contingent consideration that is estimated to be payable over the next year and two years resulting from the WestEnd Acquisition. For the three months ended March 31, 2025, the Company recorded an increase of $3.4 million in the contingent payment liability associated with the WestEnd Acquisition, which is included in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets. At March 31, 2025, the estimated fair value of the WestEnd Acquisition contingent payments was $143.3 million, and a maximum of $240.0 million in contingent consideration ($80.0 million per year) is potentially payable to sellers.
Previous wording
Operating Activities – Cash provided by operating activities during the nine months ended September 30, 2024 was $248.2 million, compared to $233.2 million of cash provided by operating activities for the same period in 2023. The $15.0 million increase in cash provided by operating activities is due to a $54.0 million increase in net income partially offset by a $31.8 million and $7.2 million decrease in non-cash and working capital items, respectively.
Current wording
Operating Activities – Cash provided by operating activities during the three months ended March 31, 2025 was $81.1 million, compared to $68.7 million of cash provided by operating activities for the same period in 2024. The $12.4 million increase in cash provided by operating activities was primarily due to increases of $6.3 million and $12.6 million in net income and working capital items, respectively, partially offset by a decrease of $8.8 million in the change in the fair value of contingent consideration.
Previous wording
Investing Activities –Cash used in investing activities during the nine months ended September 30, 2024 was $1.6 million and consisted of primarily of property and equipment purchases of $1.1 million and $0.5 million of net trading activity.
Current wording
Investing Activities –Cash used in investing activities during the three months ended March 31, 2025 was $1.7 million and consisted of net trading activity of $0.1 million and $1.6 million of property and equipment purchases. The nature of our trading activities is further described in Note 2, Significant Accounting Policies, to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the three months ended March 31, 2025 and 2024, the Company recorded $4.1 million and $4.2 million, respectively, in amortization of deferred gain on Swap monetization. As of March 31, 2025 and December 31, 2024, the unamortized deferred gain on Swap monetization was $20.8 million and $24.9 million, respectively, before tax.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net outflows were driven by our U.S. mid cap, U.S. small cap, U.S. large cap equity strategies, alternative investment strategies and our fixed income strategies of $1.3 billion, $0.7 billion, $0.4 billion, $0.3 billion and $0.3 billion, respectively, partially offset by net inflows of $0.3 billion in our Solutions platform.