Victory Capital (VCTR) Q3 2024 earnings summary

Executive summary

• Total client assets reached $181.1 billion, with AUM at $176.1 billion as of September 30, 2024, driven by market appreciation and diversified distribution.

• Achieved record GAAP EPS of $1.24 and adjusted EPS with tax benefit of $1.35 in Q3 2024.

• Adjusted EBITDA for Q3 2024 was $121.3 million, with a record 53.7% margin.

• Progressed toward closing the Amundi US transaction, expected in Q1 2025, with all shareholder proposals approved and Amundi to receive a 26.1% economic stake.

• Board approved a 7% increase in the quarterly dividend to $0.44 per share, payable December 23, 2024.

Financial highlights

• Q3 2024 revenue was $225.6 million, up 7.6% year-over-year and 2.7% sequentially.

• GAAP net income for Q3 2024 was $82.0 million, up 57.6% year-over-year; adjusted net income with tax benefit was $89.0 million.

• Q3 2024 EPS was $1.26 basic and $1.24 diluted; adjusted EPS with tax benefit was $1.35.

• Operating cash flow for the nine months ended September 30, 2024, was $248.2 million.

• Ended Q3 2024 with $188 million in cash and a net leverage ratio of 1.7x.

Outlook and guidance

• Amundi US acquisition expected to close in Q1 2025, with $100 million in annualized expense synergies, mostly realized in the first year post-close.

• No change to long-term margin guidance despite exceeding the 49% margin goal.

• Anticipate most of the $1 billion unfunded pipeline to be realized in Q4 2024 and early 2025.

• Positive outlook for organic growth, especially with expanded distribution post-Amundi close.