Victory Capital Holdings, Inc.

Item 1. Fina ncial Statements

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except per share 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)

Condensed Consolidated Statements of Cash Flows(Unaudited)

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

As used in this quarterly report on Form 10-Q, unless the context otherwise requires, the terms “Company,” “Victory,” or in the first-person notations of “we,” “us,” and “our” refer to Victory Capital Holdings, Inc. along with its wholly-owned subsidiaries.

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, 2025 (the "2025 Annual Report"). Certain prior period amounts have been revised to conform to the current period presentation. Such changes were made for clarity and comparability and had no effect on previously reported results of operations or financial position.

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 months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

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 2025 Annual Report.

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.

Significant Accounting Policies

There have been no material changes to our significant accounting policies from our 2025 Annual Report.

Recently Issued Accounting Standards

Reporting Comprehensive Income: In November 2024, the FASB issued Accounting Standards Update (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.

Internal-Use Software: In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"). ASU 2025-06 modernizes the guidance on accounting for internal-use software costs by removing references to traditional development project stages and instead requiring capitalization when management commits to funding and it is probable the project will be completed. ASU 2025-06 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact that ASU 2025-06 will have on the Company's consolidated financial statement disclosures.

No other recently adopted or issued accounting standards had, or will have, a material impact on our condensed consolidated financial statements.

NOTE 2. REVENUE RECOGNITION

In accordance with the 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;

•

investment management services,

•

fund administration services,

•

fund transfer agent services, and

•

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.

NOTE 3. ACQUISITIONS

Pioneer Investments

On April 1, 2025, the Company completed the acquisition of Amundi Asset Management S.A.S ("Amundi")'s U.S. business ("Amundi US") and reintroduced the brand Pioneer Investments ("Pioneer" or "Pioneer Investments") for the acquired business and investment products ("Amundi Transaction"). Pioneer Investments is the Company's largest investment franchise, and the transaction meaningfully enhanced the Company's scale, expanded its global client base, and further diversified its investment capabilities.

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)19,698,274 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. Total purchase price consideration was approximately $1,326 million, settled entirely in Company shares. For further detail on the transaction consideration, refer to Note 4 in the Company's 2025 Annual Report.

Purchase Price Allocation

The Company accounted for the acquisition in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations, allocating the purchase price to assets acquired and liabilities assumed based on their respective fair values at the acquisition date. The purchase price allocation was finalized during the first quarter of 2026 within the one-year measurement period prescribed by ASC 805.

Financial Results

Revenue recognized by Pioneer Investments for the quarter ended March 31, 2026 was as follows:

Net income attributable to Pioneer Investments for the three months ended March 31, 2026 is impractical to determine as the Company does not prepare discrete financial information at the franchise level.

The Company's consolidated financial statements for the three months ended March 31, 2026 include operating results of the Amundi US acquired company. The following unaudited pro forma figures for the three months ended March 31, 2025 give effect to the acquisition as if it had occurred on January 1, 2025 and combines the financial results of the Company and Amundi US 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, 2025, 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 $7.7 million and $8.8 million in acquisition-related costs in the three months ended March 31, 2026 and 2025, respectively. These amounts are included in acquisition-related costs in the Consolidated Statements of Operations.

NOTE 4. Restructuring and Integration Costs

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 March 31, 2026 and December 31, 2025 were included in accounts payable and accrued expenses on the Condensed Consolidated Balance Sheets.

NOTE 5. 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 by our Chief Operating Decision Maker ("CODM") in evaluating segment performance.

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 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 uses Net income and considers the impact on consolidated, entity-wide performance and financial results.

Significant segment expenses are presented in the Condensed Consolidated Statements of Operations. Additional disaggregated significant segment expenses that are not separately presented in the Condensed Consolidated Statements of Operations are presented below:

(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)

Equity awards typically vest over several years based on service and the achievement of specific business and financial targets. The value of the equity awards is recognized as compensation expense over the vesting period.

NOTE 6. Income Taxes

The effective tax rate for the three months ended March 31, 2026 and 2025 differs from the United States federal statutory rate primarily due to state and local income taxes, excess tax benefits on share-based compensation and non-deductible expenses.

For the three months ended March 31, 2026 and 2025, the provision for income taxes was $35.7 million and $18.4 million, or 24.2% and 22.9%, of pre-tax income respectively.

No valuation allowance was recorded for deferred tax assets in the period ended March 31, 2026 and 2025.

NOTE 7. Investments

As of March 31, 2026 and December 31, 2025, 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 include investments in affiliated and third party mutual funds held in a rabbi trust under a deferred compensation plan.

The following table presents the fair value of the Company's investments:

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).

The following table presents theunrealized gains/(losses) recognized for the three months ending March 31, 2026 and 2025:

NOTE 8. 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:

•

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

•

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.

•

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.

There wereno transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy from December 31, 2025 to March 31, 2026. 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 March 31, 2026 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.

Contingent payment arrangements

WestEnd

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

In March 2026, the Company paid $39.9 million in cash to sellers for the third earn-out period. The estimated fair value of the contingent consideration payable to the sellers was $51.2 million as of March 31, 2026 and $87.6 million as of December 31, 2025.

For the three months ended March 31, 2026 and 2025, the change in the liability was an increase of $3.5 million and $3.4 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 Consolidated Statements of Operations.

The estimated fair value for 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, which adjusts the projected revenue growth rate to a risk-neutral expected growth rate, revenue volatility and discount rate. The market price of risk 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 March 31, 2026, and December 31, 2025 are as follows and are approximate values:

The following table presents the balance of the contingent consideration arrangement liabilities for the three months ended March 31, 2026:

New Energy Capital

Under the terms of the purchase agreement for New Energy Capital Partners ("NEC"), which closed during 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 March 31, 2026 and December 31, 2025, the Company determined that the contingent payments are no longer probable of occurring and the liability for NEC contingent payments is zero.

NOTE 9. Related-Party Transactions

The Company engages in transactions with related parties in the ordinary course of business, including certain funds it manages, sponsors, and serves as a subadviser. The Company's related-party arrangements are described in Note 6, Related-Party Transactions, to the consolidated financial statements included in our 2025 Annual Report.

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.

•

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

•

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

•

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.

•

Included in prepaid expenses are amounts paid by Victory Capital Management ("VCM") that will be invoiced to the NEC Funds in subsequent periods.

•

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.

•

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 Amundi Distributor US, Inc., and Amundi and its subsidiaries are included in the balances below.

NOTE 10. Debt

The following table presents the components of long-term debt in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 under the Company's credit agreement ("2019 Credit Agreement").

The Company elects to use three-month Term SOFR plus a margin of 2.00% 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 4.00 to 1.00. As of March 31, 2026 and December 31, 2025, there wereno outstanding borrowings under the revolving credit facility and the Company was in compliance with its financial performance covenant.

A total of $2.5 million of the outstanding term loans under the 2019 Credit Agreement was repaid during the three months ended March 31, 2026.

There wereno repayments of outstanding term loans under the 2019 Credit Agreement during the three months ended March 31, 2025.

The following table presents the components of interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025.

NOTE 11. Share‑Based Compensation

Equity Incentive Plans

For a full description of the Company’s share-based compensation plans, refer to Note 15 of the Company’s financial statements as of and for the year ended December 31, 2025 included in the Company’s 2025 Annual Report. As of March 31, 2026,1.2 million shares of Common Stock remained available for issuance under the Company's Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”).

Restricted Stock Awards

Restricted stock awards (“RSAs”) entitle the holder to receive shares of the Company’s common stock as the awards vest. Grants of RSAs can be classified as service-based, performance-based, or market-based, depending on the vesting criteria of the award. RSA activity for service-based RSAs for the three months ended March 31, 2026 is as follows:

Performance-Based Restricted Stock Award

On March 13, 2026, the Board of Directors approved a one-time grant of 1.3 million performance-based shares of restricted stock ("Performance Shares" or "PRSAs") to key executives under the 2018 Plan. The PRSAs vest upon achievement of four absolute stock price hurdles during aseven year measurement period commencing March 15, 2026, subject to continued employment through the applicable vesting date. A hurdle is deemed achieved when the average closing trading price equals or exceeds the applicable threshold for five consecutive trading days. Vested shares are subject to a one-year post-vesting holding requirement, and any shares that do not vest during the measurement period or prior to termination of employment will be forfeited.

The grant-date fair value of $58.4 million was determined using a Monte Carlo simulation model, with the total shares allocated equally across four tranches. A Monte Carlo simulation model requires inputs such as the risk-free interest rate, expected volatility, stock price, valuation date, and expected dividend yield. Expected volatility was estimated based on the historical volatility of the Company's common stock. The grant-date fair value also reflects a discount for post-vesting restrictions, which was measured using a market-based valuation model. Compensation expense for each tranche is recognized on a straight-line basis over the respective derived service period, which ranges from 1.38 years to 2.54 years, with no reversal if the market condition is not satisfied. Any remaining unrecognized expense is recognized immediately upon achievement of the applicable hurdle.

Share-based Compensation Expense

Share-based compensation expense is included within personnel compensation and benefits in the Consolidated Statements of Operations. The following table summarizes share-based compensation expense, related tax benefits, and the total fair value of restricted share awards vested.

As of March 31, 2026, the Company expects to recognize total share-based compensation expense of $117 million.

Shares Withheld for net settlement of employee equity awards

Shares of Common Stock are available for issuance under the 2018 Plan as determined by the Compensation Committee of the Company’s board of directors. Shares underlying awards that are settled in cash, expire or are canceled, forfeited or otherwise terminated without delivery to a participant will again be available for issuance under the 2018 Plan. In addition, shares withheld or surrendered in connection with the payment of an exercise price of an award or to satisfy tax withholding will again be available for issuance under the 2018 Plan.

The following table presents both share and dollar value information about shares withheld for net settlement of employee equity awards:

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 months ended March 31, 2026 and 2025:

(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 months ended March 31, 2026 and 2025. 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. 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 September 23, 2032 and is included in interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations. For the three months ended March 31, 2026 and 2025, the Company recorded $0.4 million and $4.1 million, respectively, in amortization of deferred gain on Swap monetization. As of March 31, 2026 and December 31, 2025, the unamortized deferred gain on Swap monetization was $11.3 million and $11.7 million, respectively, before tax.

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

NOTE 14. Accumulated Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2026 and 2025.

(1)

Reclassifications out of AOCI(L) 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, and the elimination of the unrealized gain on cash flow hedge recorded in AOCI prior to the termination. The deferred gain is being amortization a straight-line basis over the remaining term of the hedged debt (through September 23, 2032). Refer to Note 13, Derivatives, for further information on the monetization of the interest rate swap gain.

NOTE 15. SUBSEQUENT EVENTS

Quarterly Cash Dividends

On May 6, 2026, the Company’s Board of Directors approved a regular quarterly cash dividend of $0.50 per share. The dividend is payable on June 25, 2026, to shareholders of record on June 10, 2026.