Virtus Investment Partners (VRTS) Q1 2026 earnings summary

Executive summary

• Assets under management (AUM) ended at $149.0 billion, down from $159.5 billion, reflecting net outflows and negative market performance, partially offset by the addition of Keystone National Group assets.

• Net flows were negative $8.4 billion, primarily in quality-oriented equity strategies, despite an 8% increase in sales to $5.8 billion, led by a 26% rise in equity strategy sales.

• Completed a $200 million majority investment in Keystone National Group, contributing $2.3 billion to AUM and impacting cash and debt levels.

• Reported diluted EPS of $1.05 and adjusted EPS of $5.38, reflecting significant non-recurring charges and seasonal expenses.

Financial highlights

• Operating income, as adjusted, was $43.8 million, including $11.4 million of seasonal employment expenses; GAAP operating income dropped 61% to $15.4 million.

• Operating margin, as adjusted, was 24.0%, or 30.3% excluding seasonal expenses, down from 32.4% in the prior quarter; GAAP margin was 7.7%.

• Adjusted EPS was $5.38, down from $7.16 in the previous quarter, with $1.26 per share of seasonal employment expenses.

• Investment management fees, as adjusted, declined 3% due to lower average AUM, but the average fee rate increased 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 net income was $7.1 million, down 80%.

Outlook and guidance

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

• The company revised its non-GAAP financial measure definitions to include tax benefits from goodwill and intangible asset amortization, recasting prior periods.

• Forward-looking statements caution substantial risks and uncertainties, including market volatility and competitive pressures.