Victory Capital Holdings ((VCTR)) has held its Q1 earnings call. Read on for the main highlights of the call.
Victory Capital Holdings recently held its earnings call, which conveyed an overall positive sentiment. The company showcased impressive growth in its ETF platform, successful integration of the Amundi acquisition, and strong financial flexibility and investment performance. Although there were minor declines in client assets and revenue, these were overshadowed by strategic accomplishments and growth initiatives.
ETF Platform Growth
Victory Capital reported a significant increase in its ETF platform, with total assets under management (AUM) surpassing $13 billion. This marks a 28% increase during the quarter and a remarkable 67% increase compared to the same period last year, highlighting the company’s robust growth in this segment.
Record Earnings Per Share
The company achieved adjusted earnings per diluted share of $1.36, the second highest in its history and a record for any first quarter. This demonstrates Victory Capital’s strong financial performance and effective cost management strategies.
Successful Amundi Acquisition
Victory Capital’s acquisition of Amundi’s U.S. business has been a success, doubling its fixed income AUM from 14% to 28% of total assets. The acquisition also increased international AUM to $44 billion, representing 15% of total assets, significantly enhancing the company’s global footprint.
Increased Financial Flexibility
The company’s financial flexibility has improved notably following the Amundi transaction, as evidenced by a better leverage ratio. This positions Victory Capital well for future strategic growth opportunities.
Strong Investment Performance
Victory Capital’s investment performance remains strong, with 67% of its mutual funds and ETFs earning 4- or 5-Star ratings by Morningstar. The company also received eight 2025 U.S. LSEG Lipper Fund Awards, underscoring its investment excellence.
Significant Distribution Expansion
The company has expanded its distribution capabilities by augmenting its institutional and intermediary sales forces, adding marketing and sales resources, and forming new platform partnerships. These efforts are aimed at supporting future growth.
Slight Decline in Total Client Assets
There was a slight decline in total client assets, which fell to $171 billion. This represents a minor decrease, with average AUM approximately 1% lower compared to the fourth quarter.
Impact of Large Redemptions
Net flows were negatively impacted by two large redemptions totaling $2.7 billion. However, these were one-time events and are not expected to have a long-term impact on the company’s financial health.
Revenue Decrease
Revenue for the first quarter was $219.6 million, down approximately 5% from the fourth quarter. This decrease was attributed to lower average AUM, fewer days in the quarter, and shifts in product, vehicle, and channel mix.
Forward-Looking Guidance
Victory Capital provided forward-looking guidance, noting that total client assets at the end of March were $171 billion, slightly down from the start of the year. However, gross sales improved significantly, increasing by 41% from the last quarter to $9.3 billion, the highest in three years. The firm expects to achieve $110 million in net expense synergies from the Amundi acquisition by April 2026, with $50 million already realized. The closing of the Amundi transaction has brought Victory Capital’s total assets to over $286 billion, diversifying its offerings and client base.
In conclusion, Victory Capital’s earnings call reflected a positive outlook with strong growth in its ETF platform and successful strategic initiatives. Despite minor setbacks in client assets and revenue, the company’s achievements and forward-looking strategies position it well for future growth.