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, with AUM declining to $149.0 billion.

• Completed a $200 million majority investment in Keystone National Group, contributing $2.3 billion to AUM and expanding private credit capabilities.

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

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

• Reported diluted EPS of $1.05 and adjusted EPS of $5.38, down from $7.16 in Q4, mainly due to $1.26 per share in seasonal expenses and non-recurring charges.

Financial highlights

• Assets under management (AUM) at March 31st were $149.0 billion, down from $159.5 billion due to net outflows and market performance, partially offset by Keystone assets.

• Operating margin was 24.0%, or 30.3% excluding seasonal employment expenses.

• Adjusted earnings per share were $5.38, with net income as adjusted at $36.6 million, both down from the prior quarter.

• Investment management fees, as adjusted, declined 3% due to lower average AUM, but the average fee rate increased to 41.9 basis points.

• 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% starting Q2.

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