Victory Capital Holdings, Inc.

Item 1. Fina ncial Statements

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except shares data)

Condensed Consolidated Statements of Operations(Unaudited)

(In thousands, except per share data)

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

See the accompanying notes to the unaudited condensed consolidated financial statements

Condensed Consolidated Statements of Cash Flows(Unaudited)

Notes to Condensed Consolidated Financial Statements(Unaudited)

NOTE 1. ORGANIZATION AND NATURE OF BUSINESS

Victory Capital Holdings, Inc., a Delaware corporation (along with its wholly-owned subsidiaries, collectively referred to as the “Company,” “Victory,” or in the first-person notations of “we,” “us,” and “our”), provides specialized investments strategies to institutions, intermediaries, retirement platforms and individual investors. With multiple autonomous Investment Franchises and a Solutions Platform, the Company 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. The Company’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”), undertakings for the collective investment in transferable securities (“UCITS”), and other pooled vehicles.

Victory Capital Management Inc ("VCM"), a wholly-owned subsidiary of the Company, is a registered investment adviser and provides mutual fund administrative services for the Victory Portfolios, Victory Variable Insurance Funds, Victory Variable Insurance Funds II, the mutual fund series of the Victory Portfolios II, Victory Portfolios III, and Victory Portfolio IV (collectively, the "Victory Funds"), a family of open-end mutual funds, and the VictoryShares (the Company's ETF brand). Additionally, VCM employs all of the Company's United States investment professionals across its Franchises and Solutions, which are not separate legal entities. VCM's wholly-owned subsidiaries include RS investment Management (Singapore) Pte. Ltd., RS investments (UK) Limited and NEC Pipeline LLC.

Victory Capital Services Inc. ("VCS"), a wholly-owned subsidiary of the Company, is registered with the SEC as an introducing broker-dealer and serves as distributor and underwriter for the Victory Funds and a 529 Education Savings Plan. VCS offers brokerage services to individual investors through an open architecture brokerage platform. VCS is also the placement agent for certain private funds managed by VCM. Victory Capital Transfer Agency, Inc. ("VCTA"), a wholly-owned subsidiary of the Company, is registered with the SEC as a transfer agent for the Victory Funds III.

WestEnd Advisors, LLC ("WestEnd") is an ETF strategist adviser that provides financial advisers with a turnkey, core model allocation strategy for either a holistic solution or complementary source of alpha. WestEnd is a wholly-owned subsidiary of Victory Capital Holdings, Inc. and is the Company's second registered investment adviser.

On July 8, 2024, the Company, Amundi Asset Management S.A.S ("Amundi'), and, solely for certain provisions thereof, Amundi S.A., (“Amundi Parent,” and together with Amundi, the “Amundi Parties”) entered into the Contribution Agreement (the “Contribution Agreement”) to combine Amundi’s U.S. business ("Amundi US"), into the Company. On April 1, 2025, the Company completed the acquisition and reintroduced the brand Pioneer Investments ("Pioneer" or "Pioneer Investments") for the acquired business and investment products. VCM serves as the investment adviser and provides mutual fund administration services for certain Pioneer mutual funds under Victory Portfolios IV and Victory Variable Insurance Funds II. VCS serves as the distributor to Victory Portfolios IV and Victory Variable Insurance Funds II. Refer to Note 4, Acquisitions, for further details related to the acquisition.

The Company and Amundi are party to an Off-Shore Master Distribution and Services Agreement and an On-Shore Master Distribution and Services Agreement, each dated as of July 8, 2024 (as amended and restated, the “Amended and Restated Distribution and Services Agreements”). Under the Amended and Restated Distribution and Services Agreements, Victory is entitled to a percentage of fee revenues derived from Victory’s products that the Amundi Parties distribute outside the United States, and Amundi is entitled to a percentage of fee revenues derived from the Amundi Parties’ products that Victory distributes in the United States. The Distribution and Services Agreements will continue until the 15th anniversary of the date of the Closing, and automatically renew thereafter and remain effective for successive five-year terms. Victory serves as the sub-adviser for Amundi and Investment Adviser for Amundi UCITS. Refer to Note 6, Related-party transactions, for further details relating to investment advisory and distribution and services agreements relating to the acquisition of Amundi US.

NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete annual financial statements. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

In the opinion of management, the consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial condition, results of operations, and cash flows for the interim periods presented. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries, after elimination of all intercompany balances and transactions. Our involvement with non-consolidated variable interest entities (“VIEs”) includes sponsored investment funds.

For further discussion regarding VIEs, refer to 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.

Use of Estimates and Assumptions

The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements and the notes. Actual results may ultimately differ materially from those estimates.

Preferred Stock

The Company issued Series A Non-Voting Convertible Preferred Stock ("Preferred stock") in connection with the acquisition of Amundi US. Holders of Preferred stock do not have any voting rights, except as required by applicable law. The Preferred stock is economically equivalent to Common stock (including with respect to dividends), except that, upon liquidation of the Company (but not a consolidation, merger or reorganization), holders of the Preferred stock would be entitled to a liquidation preference equal to $0.01 per share, plus the amount of any declared but unpaid dividends thereon as of the applicable date.

The shares of Preferred stock are not convertible to shares of Common stock at the option of the holder. Upon specified transfers of the Preferred stock to third parties, the shares of Preferred stock will automatically convert into shares of Common stock in the hands of the transferee on an equivalent basis. Conversion will only occur in the event of a transfer of shares to an entity that is not an affiliate of Amundi in certain specified transfer scenarios.

Earnings Per Share

The Company includes participating securities (Preferred stock) in the computation of earnings per share pursuant to the two-class method. The two-class method of calculating earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. Under the two-class method, total dividends provided to and undistributed earnings allocated to the holders of Preferred stock are subtracted from net income in determining income attributable to common stockholders. The calculation of basic earnings per share is calculated by dividing net income attributable to common shareholders by the weighted average number of shares of Victory common stock outstanding during the period.

Diluted earnings per share is calculated under both the two-class and treasury stock methods, and the more dilutive amount is reported. When applying the treasury stock method, Victory includes vested and unvested stock options and unvested restricted stock grants outstanding during the periods presented in its calculation of diluted earnings per share. The treasury stock method assumes that the proceeds of exercise are used to purchase common stock at the average market price for the period. Assumed proceeds include the amount the employee must pay upon exercise and the average unrecognized compensation cost.

New Accounting Pronouncements

Recently Issued Accounting Standards

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Reporting Comprehensive Income: In November 2024, the FASB issued ASU 2024-03, "Disaggregation of Income Statement Expenses" ("DISE"). This ASU does not change or remove current expense presentation requirements within the Consolidated Statements of Operations. However, the amendments require disclosure, on an annual and interim basis, of disaggregated information about certain income statement expense line items within the notes to the consolidated financial statements. DISE is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact that this ASU will have on the Company's consolidated financial statement disclosures.

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Income Taxes: In December 2023, the FASB issued ASU 2023-09, "Income Taxes: Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 revises income tax disclosures primarily related to the rate reconciliation and income taxes paid information as well as the effectiveness of certain other income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The standard should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the impact that ASU 2023-09 will have on the Company's consolidated financial statement disclosures.

NOTE 3. Revenue RECOGNITION

In accordance with revenue recognition standard requirements, the following table disaggregates our revenue by type and product:

The following table presents balances of receivables:

Revenue

The Company’s revenue includes fees earned from providing;

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investment management services,

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fund administration services,

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fund transfer agent services, and

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fund distribution services.

Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

Investment management, fund administration and fund distribution fees are generally considered variable consideration as they are typically calculated as a percentage of AUM. Fund transfer agent fees are also considered variable consideration as they are calculated as a percentage of AUM or based on the number of accounts in the fund. In such cases, the amount of fees earned is subject to factors outside of the Company’s control including customer or underlying investor contributions and redemptions and financial market volatility. These fees are considered constrained and are excluded from the transaction price until the asset values or number of accounts on which the customer is billed are calculated and the value of consideration is measurable.

The Company has contractual arrangements with third parties to provide certain advisory, administration, transfer agent and distribution services. Management considers whether we are acting as the principal service provider or as an agent to determine whether revenue should be recorded based on the gross amount payable by the customer or net of payments to third-party service providers, respectively. Victory is considered a principal service provider if we control the service that is transferred to the customer. We are considered an agent when we arrange for the service to be provided by another party and do not control the service.

Investment Management Fees

Investment management fees are received in exchange for investment management services that represent a series of distinct incremental days of investment management service. Control of investment management services is transferred to the customers over time as these customers receive and consume the benefits provided by these services. Investment management fees are calculated as a contractual percentage of AUM and are generally paid in arrears on a monthly or quarterly basis.

AUM represents the financial assets the Company manages for clients on either a discretionary or non-discretionary basis. In general, AUM reflects the valuation methodology that corresponds to the basis used for determining revenue such as net asset value for the Victory Funds and certain other pooled funds and account market value for separate accounts. For the Company's private closed-end alternative investment products, AUM represents limited partner capital commitments during the commitment period of the fund. Following the earlier of the termination of the commitment period and the beginning of any commitment period for a successor fund, AUM generally represents, depending on the fund, the lesser of a) the net asset value of the fund and b) the aggregated adjusted cost basis of each unrealized portfolio investment or the limited partner capital commitments reduced by the amount of capital contributions used to make portfolio investments that have been disposed.

Investment management fees are recognized as revenue using a time-based output method to measure progress. Revenue is recorded at month end or quarter end when the value of consideration is measured. The amount of investment management fee revenue varies from one reporting period to another as levels of AUM change (from inflows, outflows and market movements) and as the number of days in the reporting period change.

The Company may waive certain fees for investment management services provided to the Victory Funds, VictoryShares and other pooled investment vehicles and may subsidize certain share classes of the Victory Funds, VictoryShares and other pooled investment vehicles to ensure that specified operating expenses attributable to such share classes do not exceed a specified percentage. These waivers and reimbursements reduce the transaction price allocated to investment management services and are recognized as a reduction to investment management fees revenue. The amounts due to the Victory Funds, VictoryShares Pioneer trusts, and other pooled investment vehicles for waivers and expense reimbursements represent consideration payable to customers, which is recorded in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets, and no distinct services are received in exchange for these payments.

Performance-based investment management fees, which include fees under performance fee and fulcrum fee arrangements, are included in the transaction price for providing investment management services. Performance-based investment management fees are calculated as a percentage of investment performance on a client’s account versus a specified benchmark or hurdle based on the terms of the contract with the customer. Performance-based investment management fees are variable consideration and are recognized as revenue when and to the extent that it is probable that a significant reversal of the cumulative revenue for the contractual performance period will not occur. Performance-based investment management fees recognized as revenue in the current period may pertain to performance obligations satisfied in prior periods. Fulcrum fee arrangements include a performance fee adjustment that increases or decreases the total investment management fee depending on whether the assets being managed experienced better or worse investment performance than the index specified in the customer’s contract. The performance fee adjustment arrangements with certain equity and fixed income Victory Funds III and Victory Funds IV are calculated monthly based on the investment performance of those funds relative to their specified benchmark indexes over the discrete performance period ending with that month.

Fund Administration Fees

The Company recognizes fund administration fees as revenue using a time-based output method to measure progress. Fund administration fees are determined based on the contractual rate applied to average daily net assets of the Victory Funds and VictoryShares for which administration services are provided. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets and constraints are removed. The Company’s fund administration fee revenue is recorded in fund administration and distribution fees in the unaudited Condensed Consolidated Statements of Operations.

The Company has contractual arrangements with a third party to provide certain sub-administration services. We are the primary obligor under the contracts with the Victory Funds and VictoryShares and have the ability to select the service provider and establish pricing. As a result, fund administration fees and sub-administration expenses are recorded on a gross basis.

Fund Transfer Agent Fees

The Company recognizes fund transfer agent fees using a time-based output method to measure progress. Fund transfer agent fees are determined based on the contractual rate applied to either the average daily net assets of the Victory Funds III for which transfer agent services are provided or number of accounts in the Victory Funds III. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets or actual number of accounts and constraints are removed. The Company’s fund transfer agent fee revenue is recorded in fund administration and distribution fees in the unaudited Condensed Consolidated Statements of Operations.

The Company also receives fees for sub-transfer agency services under contracts with the Victory Funds for member class shares. Sub-transfer agency fees are recognized and recorded in a manner similar to fund transfer agent fees and are recorded in fund administration and distribution fees in the unaudited Condensed Consolidated Statements of Operations.

The Company has contractual arrangements with a third party to provide certain sub-transfer agent services. As the Company is the primary obligor under the transfer agency contracts with the Victory Funds III and has the ability to select the service provider and establish pricing, fund transfer agent fees and sub-transfer agent expenses are recorded on a gross basis.

Fund Distribution Fees

The Company receives compensation for sales and sales-related services promised under distribution contracts with the Victory Funds. Revenue is measured in an amount that reflects the consideration to which the Company expects to be entitled in exchange for providing distribution services. Distribution fees are generally calculated as a percentage of average net assets in the Victory Funds. The Company’s performance obligation is satisfied at the point in time when control of the services is transferred to customers, which is upon investor subscription or redemption.

Based on the nature of the calculation, the revenue for these services is accounted for as variable consideration. The Company may recognize distribution fee revenue in the current period that pertains to performance obligations satisfied in prior periods as variable consideration is recognized only when uncertainties are resolved. The Company’s distribution fee revenue is recorded in fund administration and distribution fees in the unaudited Condensed Consolidated Statements of Operations.

The Company has contractual arrangements with third parties to provide certain distribution services. The Company is the primary obligor under the contracts with the Victory Funds and has the ability to select the service provider and establish pricing. Substantially all of the Company’s revenue is recorded gross of payments made to third parties.

Included in fund distribution fees are transaction and account-level fees paid by VCS brokerage platform customers for trade execution, cash transfer and other services.

Costs Incurred to Obtain or Fulfill Customer Contracts

The Company is required to capitalize certain costs directly related to the acquisition or fulfillment of a contact with a customer. Victory has not identified any sales-based compensation or similar costs that meet the definition of an incremental cost to acquire a contract and as such we have no intangible assets related to contract acquisitions.

Direct costs incurred to fulfill services under the Company’s distribution contracts include sales commissions paid to third party dealers for the sale of Class C Shares. The Company may pay upfront sales commissions to dealers and institutions that sell Class C shares of the participating Victory Funds at the time of such sale. Upfront sales commission payments with respect to Class C shares equal 1.00% of the purchase price of the Class C shares sold by the dealer or institution. When the Company makes an upfront payment to a dealer or institution for the sale of Class C shares, the Company capitalizes the cost of such payment, which is recorded in prepaid expenses in the unaudited Condensed Consolidated Balance Sheets and amortizes the cost over a 12-month period, the estimated period of benefit.

Valuation of AUM and fund investments

The fair value of assets under management of the Victory Funds and VictoryShares is primarily determined using quoted market prices or independent third-party pricing services or broker price quotes. In certain circumstances, a quotation or price evaluation is not readily available from a pricing service. In these cases, pricing is determined by management based on a prescribed valuation process that has been approved by the directors/trustees of the sponsored products. The same prescribed valuation process is used to price securities in separate accounts and the Company’s other non-alternative investment vehicles for which a quotation or price evaluation is not readily available from a pricing service.

The fair value of Level III assets held by alternative investment vehicles is determined under the respective valuation policy for each fund. The valuation policies address the fact that substantially all the investments of a fund may not have readily available market information and therefore the fair value for these assets is typically determined using unobservable inputs and models that may include subjective assumptions. AUM reported by the Company for alternative investment vehicles may not necessarily equal the funds’ net asset values or the total fair value of the funds’ portfolio investments as AUM represents the basis for calculating management fees.

NOTE 4. ACQUISITIONS

NEC Acquisition

Under the terms of the purchase agreement for New Energy Capital Partners ("NEC"), which closed on November 1, 2021, the Company will pay up to an additional $35.0 million in cash based on net revenue growth over asix-year period on the private, closed-end alternative investment funds managed by the NEC franchise ("NEC Funds"). The maximum amount of contingent payments, less any contingent payments previously paid, is due upon the occurrence of certain specified events within a five year period following the Start Date.

The Company determined that substantially all of the contingent payments payable per the NEC purchase agreement represent compensation for post-closing services. The Company records compensation expense over the estimated service period in an amount equal to the total contingent payments currently forecasted to be paid.

As of June 30, 2025 and December 31, 2024, the Company determined that the contingent payments are no longer probable of occurring and the liability for NEC contingent payments was zero.

For the three and six months ended June 30, 2024, the Company recorded $0.5 million and $1.5 million, respectively, in NEC contingent payment compensation expense which is included in personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations.

WestEnd Acquisition

Under the terms of the WestEnd purchase agreement, a maximum of $320.0 million ($80.0 million per year) of contingent payments is payable to sellers. Contingent earn-out payments are based on net revenue of the WestEnd business during each of the first four years following the close of the acquisition, subject to certain “catch-up” provisions over afive and one-half year period following the close of the acquisition.

During the quarter ended June 30, 2025, the Company paid $63.7 million in cash to sellers for the second earn-out period. The estimated fair value of the contingent consideration payable to the sellers was $80.7 million as of June 30, 2025 and $139.9 million as of December 31, 2024, respectively.

For the three and six months ended June 30, 2025, the change in the liability was an increase of $1.1 million and $4.5 million, respectively. For the three and six months ended June 30, 2024, the change in the liability was a decrease of $8.2 million and an increase of $4.0 million, respectively. The impact of decreasing or increasing the valuation of the contingent consideration liability is recorded in change in value of consideration payable for acquisition of business in the unaudited Condensed Consolidated Statements of Operations.

The estimated fair value of contingent consideration payable to sellers is estimated using the real options method. WestEnd net revenue growth is simulated in a risk-neutral framework to calculate expected probability-weighted earn out payments, which are then discounted from the expected payment dates at the relevant cost of debt. Significant assumptions and inputs include the WestEnd net revenue projected annual growth rate, the market price of risk adjustment for revenue, which adjusts the projected revenue growth rate to a risk-neutral expected growth rate, revenue volatility and discount rate. The market price of risk adjustment for revenue and revenue volatility are based on data for comparable companies. As the contingent consideration represents a subordinate, unsecured claim of the Company, the Company assesses a discount rate which incorporates adjustments for credit risk and the subordination of the contingent consideration.

Significant inputs to the valuation of contingent consideration payable to sellers as of June 30, 2025 and December 31, 2024 are as follows and are approximate values:

Pioneer Investments

On April 1, 2025, the Company completed the transactions contemplated by the Contribution Agreement with Amundi. The addition of Pioneer Investments as the Company's largest investment franchise meaningfully enhances the Company's scale, expands its global client base and further diversifies its investment capabilities. The fair value of investment management agreements was estimated using a discounted cash flow method and the fair value of the trade names was estimated using a royalty savings method which were prepared with the assistance of an independent valuation firm and approved by management.

In exchange for the contribution of all the shares of the Amundi US to the Company, the Company issued to Amundi (a)3,293,471 newly issued shares of Common Stock, representing 4.9% of the number of issued and outstanding shares of Common Stock after giving effect to such issuance, and (b)19,742,300 newly issued shares of Preferred stock, which, together with the shares of Common stock issued to Amundi represented in the aggregate 26.1% of the Company’s fully diluted shares after giving effect to such share issuances. The Preferred stock issued to Amundi includes 14,305,982 shares issued on April 1, 2025 and 5,436,318 shares issued on May 23, 2025 as a true up payment in respect of client consents obtained in the 30 days following the Closing. Closing consideration due to Amundi is subject to a customary post-closing adjustment. On August 1, 2025, in accordance with the terms of the Contribution Agreement, Amundi forfeited its beneficial ownership of 44,026 shares of Preferred stock as a result of a post-closing adjustment to the amount of Preferred stock received by Amundi at the closing of the transaction.

Purchase Price and Preliminary Purchase Price Allocation

The Company accounted for the acquisition in accordance with ASC 805, Business Combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of the transaction. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations. The final purchase price allocation could differ materially from the preliminary purchase price allocation and may include changes to various balances, including fixed assets, intangible assets and goodwill. The finalization of the purchase price allocation will not extend beyond the one-year measurement period provided under ASC 805.

Total purchase price consideration was approximately $1,328 million and was settled entirely in Comapny shares. The excess of the preliminary purchase price over the fair value of the identified assets acquired and liabilities assumed is recognized as goodwill and was recorded in the accompanying unaudited Condensed Consolidated Balance Sheets. Goodwill related to the contribution represents cost synergies and enhancements to Victory's existing asset management business and is not deductible for tax purposes. Refer to Note 17, Goodwill and Other Intangible Assets, for further detail. The following table summarizes the preliminary allocation of assets acquired and liabilities assumed based on their fair values at the acquisition date:

Financial Results

Revenue recognized by Pioneer Investments subsequent to the acquisition date of April 1, 2025 for the three months ended June 30, 2025 was as follows:

Net income attributable to Pioneer Investments for the three months ended June 30, 2025 is impractical to determine as the Company does not prepare discrete financial information at that level.

The Company's consolidated financial statements for the three months ended June 30, 2025 include operating results of the Amundi US acquired company. The following unaudited pro forma figures give effect to the contribution as if it had occurred on January 1, 2024 and combines the financial results of the Company and Amundi U.S. after adjusting primarily for amortization of intangible assets and additional fixed asset depreciation that would have been expensed assuming the fair value adjustments had been applied on January 1, 2024, net of any tax impact. This unaudited information is for illustrative purposes only and should not be relied upon as indicative of historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future.

Acquisition-related and other costs

Acquisition-related costs include legal fees, advisory services, mutual fund proxy voting costs and other one-time expenses related to business combinations. The Company expensed $25.8 million and $34.5 million in acquisition-related costs in the three and six months ended June 30, 2025, respectively. These amounts are included in acquisition-related costs in the unaudited Condensed Consolidated Statements of Operations and relate primarily to the acquisition of Amundi US.

As of June 30, 2025, the Company also incurred $1.4 million of costs directly associated with the issuance of equity in connection with the acquisition of Amundi US. These costs include fees paid to attorneys, accountants, printers and other third parties and are recorded in additional paid-in capital in the unaudited Condensed Consolidated Balance Sheets.

NOTE 5. Fair Value Measurements

The Company determines the fair value of certain financial and nonfinancial assets and liabilities. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value determinations utilize a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability.

Classification within the fair value hierarchy contains three levels:

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Level 1—Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets.

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Level 2—Valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other observable inputs directly or indirectly related to the asset or liability being measured.

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Level 3—Valuation inputs are unobservable and significant to the fair value measurement. These inputs reflect management's own assumptions about the assumptions a market participant would use in pricing the asset or liability.

The following table presents assets and liabilities measured at fair value on a recurring basis:

Level 1 assets consist of money market funds and open-end mutual funds. The fair values for these assets are determined utilizing quoted market prices for identical assets.

Contingent consideration arrangements represent the WestEnd earn-out payment liability, which is included in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets.

Significant unobservable inputs for the option pricing model used to determine the estimated fair value of the WestEnd Acquisition earn-out payment liability include the WestEnd net revenue projected growth rate, revenue volatility, market price of risk and discount rate. An increase in the projected growth rate for net revenue results in a higher fair value for the earn-out payment liability while an increase in the discount rate results in a lower fair value for the earn-out payment liability. An increase in the market price of risk and revenue volatility results in a lower fair value. Refer to Note 4, Acquisitions, for further details related to the valuation of contingent consideration payable related to the WestEnd Acquisition.

Changes in the fair value of contingent consideration arrangement liabilities, realized or unrealized, are recorded in earnings and are included in change in value of consideration payable for acquisition of business in the unaudited Condensed Consolidated Statements of Operations.

The following table presents the balance of the change in contingent consideration arrangement liabilities for the six months ended June 30, 2025:

There wereno transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy from December 31, 2024 to June 30, 2025. The Company recognizes transfers at the end of the reporting period.

The net carrying value of accounts receivable and accounts payable approximates fair value due to the short‑term nature of these assets and liabilities. The fair value of our long-term debt as of June 30, 2025 is considered to be its carrying value as the interest rate on the bank debt is variable and approximates current market rates. As a result, Level 2 inputs are utilized to determine the fair value of our long‑term debt.

NOTE 6. Related-Party Transactions

The Company considers certain funds that it manages, including the Victory Funds, the VictoryShares, collective trust funds that it sponsors (the “Victory Collective Funds”), the NEC Funds and other pooled investment vehicles that it sponsors, to be related parties as a result of its advisory relationship.

The Company receives investment management, administrative, distribution and compliance fees in accordance with contracts that VCM and VCS have with the Victory Funds and has invested a portion of its balance sheet cash in the Victory Treasury Money Market Trust and earns interest on the amount invested in this fund.

The Company receives investment management, administrative and compliance fees in accordance with contracts that VCM has with the VictoryShares.

We also receive investment management fees from the Victory Collective Funds, the NEC Funds and other pooled investment vehicles under VCM’s advisory contracts with these funds. In addition, VCTA receives fees for transfer agency services under contracts with the Victory Funds III and sub-transfer agency services under contracts with the Victory Funds for member class shares.

Director fees payable by the Company in cash and contributions made under the Director Deferred Compensation Plan for non-employee members of our Board of Directors are included in general and administrative expense in the unaudited Condensed Consolidated Statements of Operations.

At the Closing, the requisite shareholder consent was not received for open and closed end funds established under certain Pioneer trust entities. To provide continuous and uninterrupted investment advisory services to these trusts following the Closing, VCM was appointed to act as interim Investment Advisor pursuant to Interim Investment Advisory Agreements for a period not to exceed 150 days in accordance with Rule 15a-4 under the 1940 Act. Additionally, Amundi Distributor US, Inc., continued to serve as the underwriter for the open-end funds. For the open-end funds, these arrangements were terminated on June 6, 2025 when VCM obtained the requisite shareholder consent and the open-end funds were reorganized into Victory Portfolios IV. As of June 30, 2025, Pioneer Investments manages $42.5 billion of AUM, as an adviser and sub-adviser for Amundi and its affiliates' UCITS.

Under the Amended and Restated Distribution and Services Agreements, Victory is entitled to a percentage of fee revenues derived from Victory’s products that Amundi distributes outside the United States, and Amundi is entitled to a percentage of fee revenues derived from Amundi’s products that Victory distributes in the United States. The Amended and Restated Distribution and Services Agreements may be terminated under certain limited circumstances.

Additionally, the Company and Amundi also entered into a shareholder agreement (the “Shareholder Agreement”). Pursuant to the terms of the Shareholder Agreement, Amundi will have the right to require Victory to nominate and use reasonable best efforts (subject to applicable law and the exercise of the Victory board’s fiduciary duties) to have two individuals designated by Amundi elected to the Victory Board of Directors.

The table below presents balances and transactions involving related parties included in the unaudited Condensed Consolidated Balance Sheets and unaudited Condensed Consolidated Statements of Operations.

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Included in cash and cash equivalents is cash held in the Victory Treasury Money Market Trust.

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Included in receivables (investment management fees) are amounts due from the Victory Funds, the VictoryShares, the Victory Collective Funds, the NEC Funds and other pooled investment vehicles for investment management services.

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Included in receivables (fund administration and distribution fees) are amounts due from the Victory Funds for fund administration services and compliance services, amounts due from the VictoryShares for fund administration services, amounts due from the Victory Funds III for transfer agent services and amounts due from the Victory Funds for sub-transfer agent services.

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Included in prepaid expenses are amounts paid by VCM that will be invoiced to the NEC Funds in subsequent periods.

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Included in revenue (investment management fees) are amounts earned for investment management services provided to the Victory Funds, the VictoryShares, the Victory Collective Funds, the NEC Funds and other pooled investment vehicles.

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Included in revenue (fund administration and distribution fees) are amounts earned for fund administration and compliance services, transfer agent services and sub-transfer agent services.

•

Realized and unrealized gains and losses and dividend income on investments in the Victory Funds classified as investments in proprietary funds and deferred compensation plan investments and dividend income on investments in the Victory Treasury Money Market Trust are recorded in interest income and other income (expense) in the unaudited Condensed Consolidated Statements of Operations.

•

Amounts due to the Victory Funds, the VictoryShares and other pooled investment vehicles for waivers of investment management fees and reimbursements of fund operating expenses are included in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets and represent consideration payable to customers.

•

All transactions with the Trusts, Amundi Distributor US, Inc., and Amundi and its subsidiaries are included in the balances below.

NOTE 7. Investments

As of June 30, 2025 and December 31, 2024, the Company had investments in proprietary funds and deferred compensation plan investments. Investments in proprietary funds consist primarily of seed capital investments in certain Victory Funds. Deferred compensation plan investments are held under deferred compensation plans and primarily consist of investments in Victory Funds. The Company has separate deferred compensation plans acquired in connection with the Amundi US acquisition, and these plans were frozen to further participation at the Closing.

Unrealized and realized gains and losses on investments in proprietary funds and deferred compensation plan investments are recorded in earnings as interest income and other income (expense).

Investments in Proprietary Funds

The following table presents a summary of the cost and fair value of investments in proprietary funds:

The following table presents proceeds from sales of investments in proprietary funds and realized gains and losses recognized during the three and six months ended June 30, 2025:

There were no sales of investments in proprietary funds and realized gains and losses during the three and six months ended June 30, 2024.

Deferred Compensation Plan Investments

The following table presents a summary of the cost and fair value of deferred compensation plan investments:

The following table presents proceeds from sales of deferred compensation plan investments and realized gains and losses recognized during the three and six months ended June 30, 2025 and 2024:

NOTE 8. Income Taxes

The effective tax rate for the three and six months ended June 30, 2025 and 2024 differs from the United States federal statutory rate primarily as a result of state and local income taxes, excess tax benefits on share-based compensation and certain non-deductible expenses.

For the three months ended June 30, 2025 and 2024, the provision for income taxes was $28.3 million and $21.5 million, or 32.5% and 22.5%, of pre-tax income, respectively. For the six months ended June 30, 2025 and 2024, the provision for income taxes was $46.7 million and $37.7 million, or 27.9% and 22.5% of pre-tax income, respectively.

The effective tax rates for the three and six months ended June 30, 2025 were higher than the effective tax rates for the same periods in 2024 due to decreased excess tax benefits on share-based compensation and increased non-deductible expenses. The increase in non-deductible expenses was primarily driven by $27.3 million of gross non-deductible transaction costs that were incurred related to the Amundi US acquisition.

No valuation allowance was recorded for deferred tax assets in the period ended June 30, 2025 and 2024.

On July 4, 2025, new U.S tax legislation was signed into law (known as the "One Big Beautiful Bill Act" or "OBBBA") which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions. The Company is currently evaluating the impact of the new legislation.

NOTE 9. Debt

The following table presents the components of long-term debt in the unaudited Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024.

The Company elects to use three-month Term SOFR plus a ten-point credit spread adjustment plus the margin on SOFR required by the 2019 Credit Agreement to pay interest on its debt.

The 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0% of the commitments thereunder (excluding certain letters of credit), of no greater than 3.80 to 1.00. As of June 30, 2025, there wereno outstanding borrowings under the revolving credit facility and the Company was in compliance with its financial performance covenant.

There wereno repayments of outstanding term loans under the 2019 Credit Agreement during the three and six months ended June 30, 2025.

Repayments of outstanding term loans under the 2019 Credit Agreement totaled $9.5 million for the three and six months ended June 30, 2024. The Company recognized a loss on debt extinguishment of $0.1 million in the three and six months ended June 30, 2024, due to the repayments of term loan principal.

The following table presents the components of interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations for the periods ended June 30, 2025 and 2024.

NOTE 10. Equity

Shares Rollforward

The following tables present the changes in the number of shares of preferred and common stock issued and repurchased (in thousands):

Shares Repurchased and Withheld

Share Repurchase Programs

In December 2024, the Company’s Board of Directors approved a new share repurchase program (the “2025 Share Repurchase Program”) authorizing the repurchase of up to $200.0 million of the Company’s Common Stock through December 31, 2026. Under the 2025 Share Repurchase Program, which took effect in December 2024, the Company may purchase its shares from time to time in privately negotiated transactions, through block trades, pursuant to open market purchases, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC. The amount and timing of purchases under the 2025 Share Repurchase Program will depend on a number of factors including the price and availability of the Company’s shares, trading volume, capital availability, Company performance and general economic and market conditions. The 2025 Share Repurchase Program can be suspended or discontinued at any time.

During both the three and six months ended June 30, 2025, the Company repurchased 0.3 million, which does not include 0.1 million shares at a cost of $4.2 million pending settlement during the third quarter of 2025, of Common Stock at a total cost of $21.4 million for an average price of $62.53 per share. During the same periods in 2024, no shares were repurchased.

As of June 30, 2025, $178.6 million was available for future repurchases under the 2025 Share Repurchase Program, and a cumulative total of 13.0 million shares of Common Stock had been repurchased under programs authorized by the Company’s Board of Directors at a total cost of $413.0 million for an average price of $31.75 per share.

Shares Withheld for net settlement of employee equity awards

During the three months ended June 30, 2025, the Company net settled 0.03 million shares of Common Stock for $1.8 million to satisfy $1.4 million in employee tax obligations and $0.4 million in employee stock option exercise prices. During the same period in 2024,0.2 million shares were net settled for $7.4 million to satisfy $5.3 million of employee tax obligations and $2.1 million of employee stock option exercise prices.

During the six months ended June 30, 2025, the Company net settled 0.2 million shares of Common Stock for $11.0 million to satisfy $10.2 million in employee tax obligations and $0.8 million in employee stock option exercise prices. During the same period in 2024,0.5 million shares were net settled for $20.7 million to satisfy $15.6 million of employee tax obligations and $5.1 million of employee stock option exercise prices.

Dividend Payments

Dividends paid for the three and six months ended June 30, 2025 totaled $42.6 million and $72.5 million, respectively, relating to quarterly dividends declared by the Company's Board of Directors. Dividends paid related to dividends previously declared upon vesting of restricted stock totaled $1.1 million for both the three and six months ended June 30, 2025, respectively.

Dividends paid for the three and six months ended June 30, 2024 totaled $21.6 million and $45.6 million, respectively, relating to quarterly dividends declared by the Company's Board of Directors. Dividends paid related to dividends previously declared upon vesting of restricted stock were zero and $0.8 million for the three and six months ended June 30, 2024, respectively.

Issuance of stock in connection with the acquisition of Amundi US

In exchange for the contribution of all the shares of the Amundi US to the Company, during the period ended June 30, 2025, the Company issued to Amundi (a)3.3 million shares of Common Stock and (b)19.7 million newly issued shares of Preferred Stock. Refer to Note 4, Acquisitions, for further detail.

NOTE 11. Share‑Based Compensation

Current Period Activity

During the three months ended June 30, 2025, the Company issued restricted stock awards for 276,880 shares of Common Stock, of which awards for 5,128 shares were fully vested on the grant date, awards for 3,002 shares vest ratably overtwo years, awards for 168,174 shares vest ratably over three years, awards for 48,701 shares vest ratably over four years, awards for 39,700 shares cliff vest aftertwo years and 12,175 restricted shares that vest 50% overtwo years and 50% over three years.

For the six months ended June 30, 2025, the Company issued restricted stock awards for 675,305 shares of Common Stock, of which awards for 9,209 shares were fully vested on the grant date, awards for 48,550 shares vest ratably overtwo years, awards for 265,635 shares vest ratably over three years, awards for 300,036 shares vest ratably over four years, awards for 39,700 shares cliff vest after two years and 12,175 restricted shares that vest 50% overtwo years and the 50% over three years.

Stock option award and restricted stock award activity during the six months ended June 30, 2025 and 2024 was as follows:

Share-Based Compensation Expense

The Company recorded $5.7 million and $3.7 million of share-based compensation expense in the three months ended June 30, 2025 and 2024, respectively, and $9.2 million and $7.7 million of share-based compensation expense in the six months ended June 30, 2025 and 2024, respectively, in personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations.

NOTE 12. Earnings Per Share

The following table sets forth the reconciliation of basic earnings per share and diluted earnings per share from net income for the three and six months ended June 30, 2025 and 2024:

(1)

Under the two-class method, total dividends provided to and undistributed earnings allocated to the preferred stockholders are subtracted from net income in determining income attributable to common stockholders.

(2)

This amount reflects the impact of reversing undistributed earnings allocated to preferred stockholders in the basic earnings per share calculation and reallocating undistributed earnings to preferred stockholders and common stockholders including the impact of dilutive instruments.

Outstanding instruments excluded from the computation of weighted average shares for diluted earnings per share because the effect would be anti-dilutive were de minimis for the three and six months ended June 30, 2025 and 2024. Holders of non-vested share-based compensation awards do not have rights to receive nonforfeitable dividends on the shares covered by the awards.

NOTE 13. Accumulated Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2025 and 2024.

(1)

Reclassifications out of accumulated other comprehensive income (loss) related to cash flow hedges are recorded in interest expense and other financing costs.

(2)

On October 30, 2023, the Company terminated the Swap. The termination resulted in a $44.4 million deferred gain recorded in AOCI, before tax, which is being amortized on a straight-line basis over the remaining term of the hedged debt (through July 1, 2026). Please refer to Note 14, Derivatives, for further information on the monetization of the gain on the Swap.

NOTE 14. DERIVATIVES

Interest Rate Swaps

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 1, 2026.

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. For the three months ended June 30, 2025 and 2024, the Company recorded $4.2 million in amortization of deferred gain on Swap monetization. For the six months ended June 30, 2025 and 2024, the Company recorded $8.3 million in amortization of deferred gain on Swap monetization. As of June 30, 2025 and December 31, 2024, the unamortized deferred gain on Swap monetization was $16.7 million and $24.9 million, respectively, before tax.

The following tables summarize the classification of the Swap in our unaudited condensed financial statements (in thousands):

NOTE 15. LEASES

The Company determines if a contract is a lease at inception. We have leases primarily for office facilities and information technology equipment. All of our leases are classified as operating leases.

Supplemental balance sheet information related to the Company’s operating leases as of June 2025 and December 31, 2024 was as follows (in thousands):

(1)ROU assets are recorded in other assets on the unaudited Condensed Consolidated Balance Sheets.

(2) Current portion and noncurrent portion of operating lease liabilities are recorded in other liabilities on the unaudited Condensed Consolidated Balance Sheets.

The components of lease expense and other lease information as of and during the three and sixth month periods ended June 2025 and 2024 are as follows (in thousands):

In general, our leases have remaining lease terms of approximately 1 year to 11 years. These leases generally contain renewal options for periods ranging fromtwo tofive years. Because the Company is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term and associated potential option payments are excluded from lease payments. Expenses associated with operating leases are recorded in general and administrative expenses on the unaudited Condensed Consolidated Statement of Operations. Variable lease costs, such as utilities and common area maintenance charges, are excluded from lease liabilities and expensed as incurred. The variable lease costs are determined based on terms in the lease contracts and primarily relate to usage of the ROU asset and services received from the lessor.

The following table summarizes the maturity of our operating lease liabilities as of June 30, 2025 (in thousands):

NOTE 16. Property and Equipment

The following table presents property and equipment as of June 30, 2025 and December 31, 2024:

Depreciation and amortization expense for property and equipment was $3.2 million and $5.4 million for the three and six months ended June 30, 2025, respectively. Depreciation and amortization expense for property and equipment was $2.3 million and $4.5 million for the three and six months ended June 30, 2024, respectively.

NOTE 17. Goodwill and Other Intangible Assets

The following table presents changes in the goodwill balance for the periods ended June 30, 2025 and December 31, 2024:

There wereno impairments to goodwill recognized during periods ended June 30, 2025 or June 30, 2024.

Identifiable Intangible Assets

The following table presents a summary of indefinite‑lived intangible assets by type:

There wereno impairments to indefinite-lived intangible assets recognized during the periods ended June 30, 2025 or June 30, 2024.

The following table presents a summary of definite‑lived intangible assets by type:

The Company recorded $77.0 million of definite-lived intangible assets related to customer relationships with weighted average useful lives 4.4 years and $235 million of definite-lived intangible assets related to fund advisory contracts with weighted average useful lives of 6.9 years as a result of the Amundi US acquisition, which is included as a component of other intangible assets, net in the accompanying unaudited Condensed Consolidated Balance Sheets.

Amortization expense is recorded in depreciation and amortization in the accompanying unaudited Condensed Consolidated Statements of Operations for definite‑lived intangible assets and was $18.6 million and $23.8 million, respectively, for the three and six months ended June 30, 2025. Amortization expense related to definite-lived intangible assets was $5.3 million and $10.6 million, respectively, for the three and six months ended June 30, 2024. There wereno impairments to definite-lived intangible assets recognized during the periods ended June 30, 2025 or 2024.

The following table presents estimated amortization expense for definite‑lived intangible assets for each of the five succeeding years and thereafter:

NOTE 18. SEGMENT REPORTING

ASU 2023-07, which is based on a management approach to segment reporting, establishes requirements to report segment revenue and significant expenses reported in net income, the primary measurement used in evaluating segment performance. Since the Company operates and reports inone segment, all financial segment information required by ASU 2023-07 can be found in the consolidated financial statements.

The Company provides investment management services and products to institutional, intermediary, retirement platforms and individual investors. The presentation of financial results as one reportable segment is consistent with the way discrete financial information is available that is regularly provided to our Chief Executive Officer, the Chief Operating Decision Maker ("CODM"). When making decisions about allocating resources, assessing performance, and understanding how our long-term organic revenue growth is driven by investment decisions our CODM considers the impact on consolidated, entity-wide performance and financial results.

Supplemental information related to significant segment expenses included the Consolidated Statements of Operations is as follows:

(1)

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.

(2)

Share-based compensation typically vests over several years based on service and the achievement of specific business and financial targets. The value of share-based compensation is recognized as compensation expense over the vesting period.

(3)

Acquisition and transaction-related compensation costs for the three and six months ended June 30, 2025 primarily consists of vesting of certain Amundi US deferred compensation awards for former Amundi US employees.

Substantially all of the Company’s identifiable assets are located in the United States. In addition, we have historically derived substantially all of our revenue from clients in the United States.

NOTE 19. RESTRUCTURING AND INTEGRATION

In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies.

The following table presents a rollforward of restructuring and integration liabilities, which as of June 30, 2025 and December 30, 2024 were included in accounts payable and accrued expenses in the accompanying unaudited Condensed Consolidated Balance Sheets.

NOTE 20. SUBSEQUENT EVENTS

Quarterly Cash Dividends

On August 7, 2025, the Company’s Board of Directors ("the Board") approved a regular quarterly cash dividend of $0.49 per share. The dividend is payable on September 25, 2025, to shareholders of record on September 10, 2025.

Share Repurchase Program

On August 7, 2025, the Board authorized an increase in the 2025 Share Repurchase Program from $200.0 million to up to $500.0 million through December 31, 2027.