Virtus Investment Partners (VRTS) investor relations material

Executive summary

• First quarter 2026 saw an 8% increase in sales to $5.8 billion, driven by growth in U.S. retail funds, separate accounts, and global funds, but net outflows totaled $8.4 billion, mainly from equity strategies.

• Assets under management (AUM) declined to $149.0 billion from $159.5 billion, reflecting net outflows and negative market performance, partially offset by the $2.3 billion AUM addition from the Keystone National Group acquisition.

• Completed a $200 million majority investment in Keystone National Group, expanding private credit capabilities and impacting cash and debt levels.

• Continued product innovation with new actively managed ETFs and reopening of the SMidCap core strategy.

• Ongoing return of capital to shareholders, including $10 million in share repurchases and quarterly dividend payments.

Financial highlights

• Adjusted operating income was $43.8 million, down from $61.1 million, mainly due to seasonal employment expenses; adjusted operating margin was 24.0%, or 30.3% excluding seasonal items.

• Adjusted earnings per share were $5.38, down from $7.16 in Q4 and 16% lower year-over-year, with $1.26 per share of seasonal employment expenses.

• Investment management fees as adjusted were $163.5 million, down 3% sequentially, with the average fee rate increasing to 41.9 bps from 40.6 bps.

• Net income, as adjusted, was $36.6 million, down from $49.1 million in the prior quarter.

• GAAP revenues fell 4% sequentially to $199.5 million; GAAP net income was $7.1 million, down 80% from prior quarter.

Outlook and guidance

• April flows and sales trends improved over March, with ETF sales and net flows at their highest since September.

• Employment expenses as adjusted expected to be 51%-53% of revenues in Q2, at the high end due to lower equity AUM.

• Average fee rate projected at 43-45 basis points in Q2, reflecting a full quarter of Keystone.

• Effective tax rate expected to be 14%-15% going forward.

• Management highlighted ongoing headwinds in quality-oriented equity strategies and expects continued pressure on net flows.