Executive Summary

Victory Capital delivered record Q4 revenue and adjusted profitability, with revenue of $232.4M, adjusted EBITDA of $125.5M and adjusted EBITDA margin of 54.0%, while GAAP diluted EPS was $1.17; adjusted EPS with tax benefit reached a record $1.45 .
Sequentially, revenue grew 3.0% and adjusted EPS with tax benefit rose 7.4% vs Q3, though GAAP EPS fell 5.6% due to higher compensation expenses; year-over-year, revenue rose 12.9% and GAAP EPS rose 42.7% .
The Board raised the quarterly dividend by 7% to $0.47 and authorized a new $200M share repurchase program; management reaffirmed $100M expense synergies and expects Amundi US acquisition to close by end of Q1 2025 .
Near-term catalysts: closing Amundi US (global distribution scaling), execution on front-end loaded synergy realization, and continued ETF momentum; long-term margin guidance of 49% reiterated post-integration .

What Went Well and What Went Wrong

What Went Well
- Record quarterly revenue and adjusted profitability: “highest quarterly revenue in our history” and record adjusted EBITDA margin of 54% .
- ETF platform momentum: VictoryShares AUM near $12B, strong flows in active/rules-based ETFs, including free cash flow series (VFLO, SFLO); ETFs viewed as high-margin and strategic .
- Strategic progress: On track to close Amundi US by end of Q1 2025; reaffirmed $100M expense synergies, expected front-end loaded realization in year one .
What Went Wrong
- Continued net outflows: Q4 long-term net flows were -$1.7B; total net flows -$1.87B; ending AUM declined to $171.9B from $176.1B in Q3 due to market depreciation and outflows .
- GAAP margin compression QoQ: operating margin fell to 48.1% from 53.3%, driven primarily by a $15.6M increase in compensation-related expenses .
- GAAP EPS down sequentially: $1.17 vs $1.24 in Q3 despite revenue growth, reflecting expense dynamics; total client assets fell ~3% in Q4 due to market action .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$205.8	$225.6	$232.4
GAAP Diluted EPS ($)	$0.82	$1.24	$1.17
Operating Margin %	41.9%	53.3%	48.1%
Adjusted EBITDA ($USD Millions)	$107.6	$121.3	$125.5
Adjusted EBITDA Margin %	52.3%	53.7%	54.0%
Adjusted EPS with Tax Benefit ($)	$1.15	$1.35	$1.45
Cash Flow from Operations ($USD Millions)	$97.1	$99.8	$91.8

AUM & Flows KPI	Q4 2023	Q3 2024	Q4 2024
Ending AUM ($USD Millions)	161,322	176,113	171,930
Average AUM ($USD Millions)	151,870	171,876	175,741
Long-term Gross Flows ($USD Millions)	6,357	5,876	6,615
Long-term Net Flows ($USD Millions)	(1,334)	(2,631)	(1,729)
Total Net Flows ($USD Millions)	(1,381)	(2,636)	(1,870)
AUM Revenue Realization (bps)	53.6	52.1	52.5
Ending Total Client Assets ($USD Millions)	166,611	181,094	176,096

AUM by Vehicle (Ending, $USD Millions)	Q4 2023	Q3 2024	Q4 2024
Mutual Funds	108,802	117,044	113,645
ETFs (third-party held)	4,970	6,694	7,508
Separate Accounts & Other Pooled Vehicles	47,551	52,375	50,777
Total AUM	161,322	176,113	171,930

Additional KPIs	Q4 2023	Q3 2024	Q4 2024
Operating Expenses ($USD Millions)	119.5	105.3	120.6
GAAP Operating Income ($USD Millions)	86.3	120.4	111.7
Cash and Cash Equivalents ($USD Millions)	123.5	188.2	126.7
Net Leverage Ratio (x)	N/A	1.7x	1.7x
Dividends Declared per Share ($)	$0.32	$0.44	$0.44

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Amundi US Expense Synergies	Post-close, Years 1–2	$100M	$100M, front-end loaded in year 1	Maintained
Long-term Operating Margin Target	Long-term	49%	49% (reiterated, post integration)	Maintained
Dividend per Share	Q1 2025	$0.44 (Q4 2024 declared)	$0.47 quarterly dividend payable Mar 10, 2025	Raised
Share Repurchase Authorization	Through Dec 31, 2026	$100M (completed)	New $200M authorization	Raised
Amundi US Acquisition Close	Timing	Q4 2024–Q1 2025	By end of Q1 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q2 2024)	Previous Mentions (Q-1: Q3 2024)	Current Period (Q4 2024)	Trend
Amundi US integration & synergies	$100M expense synergies; low double-digit accretion; fee rate high-40s bps; EBITDA margins mid-20s at Amundi US	Consolidation opportunity; pipeline; accretion still low double-digit; leverage to low-1s post close	Close by end of Q1 2025; reaffirm $100M synergies; front-end loaded; non-U.S. AUM >$45B post-close	Consistent, strengthening tailwinds
Global distribution (non-U.S.)	Reciprocal 15-year agreement; planning revenue synergies	Execution across geographies; sequencing Victory products; regulatory registrations	Majority of early flows via Amundi legacy products; Victory product rollout through 2025–26	Building toward rollout
ETF strategy & momentum	New active/rules-based ETFs; distribution investments	Free cash flow series (VFLO, SFLO) gaining traction; ETF specialists	Active ETFs net flow positive; platform near $12B; evaluate Amundi strategies for ETF wrappers	Accelerating
Margins & variable expense model	Adjusted margin at records; long-term target unchanged	Exceeding 49% goal but not changing long-term guidance	Single platform drives scale; ETFs comparable profitability; margin durability	Durable margins
Organic flows & pipeline	Rebalancing, fixed income strength; distribution investments	Larger “won-but-not-funded” pipeline; funding expected Q4/Q1	January long-term net flows “slightly positive”; largest pipeline ever; diversified	Improving
Capital allocation	Dividend hikes; repurchases when permitted	Cash build; dividend increased to $0.44	$132.4M returned in Q4; new $200M buyback; dividend to $0.47	Shareholder returns rising
Fixed income demand	Clients reallocating to fixed income; franchise momentum	Victory Income Investors positive flows; 93% AUM rated 4/5 stars	Fixed income ETFs and strategies continue net positive flows	Positive tailwind

Management Commentary

“Adjusted earnings per diluted share with tax benefit, adjusted EBITDA, and adjusted EBITDA margin [were] the highest…in the history of our firm for both the quarterly and full-year periods.” — David Brown, Chairman & CEO .
“We remain on track to close the acquisition [of Amundi US] by the end of the first quarter of 2025, and we are reaffirming our previous guidance of $100 million in expense synergies.” — David Brown .
“To date, we have increased our ETF AUM to close to $12 billion…These are high-margin products…and we look forward to continuing accelerating this momentum.” — David Brown .
“Our reported $1.45 adjusted net income with tax benefit per diluted share is the highest level in our history…Adjusted EBITDA and adjusted EBITDA margin were also company records.” — Michael Policarpo, President & CFO .
“Our net leverage ratio was unchanged at 1.7x from Q3…we paid down $20 million of debt in the quarter.” — Michael Policarpo .

Q&A Highlights

Organic growth drivers: Management expects ETF platform and institutional channel to contribute most to organic growth in 2025; Amundi US adds distribution reach and product breadth .
Revenue synergies timing: Majority of early flows via legacy Amundi US products; Victory products to be registered and rolled out through 2025–26 across geographies .
Margins across vehicles: ETFs are as profitable as other vehicles despite slightly lower fee realization; single operating platform and variable expense model support strong margins .
Pipeline and funding: “Won-but-not-funded” pipeline is largest ever, diversified across franchises/channels, expected to fund in 2025 .
Capital allocation: Prioritized accretive M&A, opportunistic buybacks under new $200M plan, and rising dividend; views shares as undervalued .

Estimates Context

Wall Street consensus estimates (S&P Global) for EPS and revenue were not retrievable due to SPGI access limits in this session; therefore, comparisons to consensus are unavailable. Values would ordinarily be anchored to S&P Global consensus; in this case, the data was unavailable, and we cannot assess beats/misses relative to estimates.

Key Takeaways for Investors

Earnings quality: Sequential revenue growth and record adjusted margins underscore operating leverage; watch compensation expense normalization after Q4’s uptick that compressed GAAP margin QoQ .
Flow trajectory: Despite Q4 net outflows, January long-term flows turned slightly positive and pipeline is at record levels, supporting a potential inflection in 2025; monitor quarterly funding cadence .
Capital returns: Dividend lifted to $0.47 and new $200M buyback provide support; opportunistic execution likely around deal closing windows .
Strategic catalyst: Amundi US close by end of Q1 2025 with front-end loaded $100M cost synergies; expect near-term contributions via legacy Amundi products and phased Victory product rollout internationally .
ETF momentum: Active/rules-based ETFs are scaling with strong flows and comparable margins; continued product launches (e.g., free cash flow series) and ETF-specific distribution investments are tailwinds .
Risk watch: Net outflows and market volatility pressured AUM in Q4; fee realization held within expected range, but mix can impact near-term margins and GAAP EPS .
Balance sheet: Net leverage steady at 1.7x with debt paydown and strong operating cash flow; ample flexibility for M&A post-Amundi .

All figures cited above are from Victory Capital’s Q4 2024 earnings materials and SEC filings , Q4 earnings press release –, and Q4 earnings call transcript –, with prior quarter references from Q3/Q2 press releases and calls – – – –.

Victory Capital Holdings, Inc. (VCTR)·Q4 2024 Earnings Summary