Victory Capital — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the three months ended September 30, 2026, was $396.6 million, an increase of 9.8% year-over-year from $361.2 million, primarily driven by higher average AUM.
• GAAP net income was $91.3 million for the quarter, a decrease of 5.4% year-over-year from $96.5 million.
• GAAP earnings per diluted share were $1.11, unchanged from the prior year quarter.
• GAAP operating margin was 34.7%, down 350 basis points from 38.2% in the same quarter of 2025.
• Adjusted EBITDA was $212.1 million, an increase of 11.4% year-over-year from $190.5 million.
• Adjusted EBITDA margin was 53.5%, up 80 basis points from 52.7% in the prior year quarter.
• Adjusted net income with tax benefit was $163.2 million, up 15.5% year-over-year from $141.3 million.
• Adjusted net income with tax benefit per diluted share was $1.98, up from $1.63 in the prior year quarter.
• Cash flow from operations was $223.4 million for the quarter.
• Total client assets reached a record $355.5 billion at quarter-end, with AUM ending at $351.9 billion.
• Long-term gross sales were $30.5 billion and long-term net inflows were $11.7 billion for the quarter.
• For the nine months ended September 30, 2026, revenue increased 30.9% to $1.2 billion, and GAAP net income increased 57.8% to $342.8 million.

Guidance and Future Outlook:

• The company expects the acquisition of First Eagle Investments to close by the end of the first quarter of 2027, subject to customary closing conditions including regulatory approvals and client consents.
• Management highlighted an annualized organic growth rate of approximately 14% for long-term net flows.
• Year-to-date long-term net flows reached $15.4 billion.

Business Segments and Product Lines:

• Net flows were positive across U.S. intermediary, U.S. institutional, and international channels.
• Positive net flows occurred across numerous asset classes including fixed income, solutions, and global equity.
• The VictoryShares ETF platform contributed to net flows within the Solutions Platform.
• As of September 30, 2026, 60%, 69%, 63%, and 77% of AUM outperformed benchmarks over 1-, 3-, 5-, and 10-year periods, respectively.
• 62% of rated mutual fund and ETF AUM held an Overall Morningstar Rating of four or five stars.
• The company offers 187 investment strategies through multiple autonomous Investment Franchises and the Solutions Platform.

Market and Competitive Landscape:

• The company serves institutional, intermediary, and individual clients through its Investment Franchises and Solutions Platform.
• The business model combines investment autonomy with a robust, fully integrated operational and distribution platform.

Risks and Challenges:

• Forward-looking statements note risks including reductions in AUM due to investment performance or client withdrawals.
• Potential risks include difficult market conditions, geopolitical conflicts (Iran, Ukraine, Venezuela, China/Taiwan, Middle East), pandemics, and trade restrictions.
• Risks associated with the First Eagle Investments transaction include the ability to satisfy closing conditions, achieve expected synergies, and successfully integrate the acquired business.
• Other risks include dependence on third parties for marketing, retention of key investment professionals, technology system reliance, and substantial indebtedness.

Management Commentary and Tone:

• David C. Brown, Chairman and CEO, stated the company delivered record levels of long-term gross sales and net flows, showcasing the breadth and depth of the product set and distribution.
• Management emphasized the durability of the platform and discipline applied across the business, reflected in industry-leading margins.
• The company continues to focus on serving clients as its top priority.

Other Key Points:

• Victory Capital announced a definitive agreement to acquire First Eagle Investments, a transaction described as transformational that will add size, scale, and differentiated global value multi-asset capabilities.
• The Board declared a regular quarterly cash dividend of $0.50 per share, payable on December 23, 2026, to shareholders of record on December 10, 2026.
• During the quarter, the company returned $81 million to shareholders, including $39 million in share repurchases and the balance in dividends.
• Total debt outstanding as of September 30, 2026, was approximately $975 million.
• The company repurchased approximately 0.4 million shares of common stock during the quarter.
• On April 1, 2025, the company completed the acquisition of Amundi US and reintroduced the brand Pioneer Investments for the acquired business.