Victory Capital Reports Strong Third Quarter 2026 Results, Highlighted by Record Gross Sales and Net Flows

Third Quarter Highlights

• Record quarter-end total client assets of $355.5 billion
• Record long-term gross sales of $30.5 billion
• Record long-term net inflows of $11.7 billion
• GAAP operating margin of 34.7%
• GAAP net income per diluted share of $1.11
• Adjusted EBITDA margin of 53.5%
• Adjusted net income with tax benefit per diluted share of $1.98
• Announced definitive agreement to acquire First Eagle Investments
• Board declared regular quarterly cash dividend of $0.50 per share

SAN ANTONIO--(BUSINESS WIRE)--Victory Capital Holdings, Inc. (NASDAQ: VCTR) (“Victory Capital” or “the Company”) today reported financial results for the quarter ended September 30, 2026.

“We delivered record levels of both long-term gross sales of $30.5 billion and long-term net flows of $11.7 billion for the quarter, representing an annualized organic growth rate of approximately 14%,” said David C. Brown, Chairman and Chief Executive Officer. “Year to date, our long-term net flows reached $15.4 billion, and we achieved record quarter-end total client assets of $355.5 billion.

“The drivers of our record gross sales and net flows were broad-based. Our U.S. intermediary, U.S. institutional and international channels each generated positive long-term net flows. Net flows were positive across numerous asset classes, including fixed income, solutions and global equity, with contributions from multiple Investment Franchises and our Solutions Platform, driven by our VictoryShares ETF platform. Together, these results showcase the breadth and depth of our product set and distribution, which allows us to align with client demand across market cycles.

“Investment performance remained strong during the quarter. As of September 30, 2026, 60%, 69%, 63% and 77% of our AUM outperformed benchmarks over the respective 1-, 3-, 5- and 10-year periods. In addition, 62% of our rated mutual fund and ETF AUM had an Overall Morningstar Rating of four or five stars.

“We continued to deliver an industry-leading margin. Our Adjusted EBITDA margin was 53.5% for the quarter and 54.0% year to date. Our margin reflects the durability of our platform and the discipline we apply across every dimension of our business.

“Our strong cash generation also supported meaningful capital return. During the quarter, we returned $81 million to shareholders, including $39 million to repurchase shares of VCTR common stock, with the balance paid as dividends.

“In August 2026, we announced a definitive agreement to acquire First Eagle Investments. Acquiring First Eagle Investments is a transformational transaction that will add size and scale across our business and allow us to increase our distribution footprint inside and outside the United States. Additionally, it will add a differentiated global value multi-asset capability, complementary equity and fixed income capabilities, a scaled CLO and alternative credit platform, along with a track record of years of positive net flows, including year to date through the end of September 2026, as well as strong investment performance. Our teams are deeply engaged in integration planning and working toward closing. We expect the transaction to close by the end of the first quarter of 2027, subject to customary closing conditions, including certain regulatory approvals and client consents.

“As always, we continue to focus on serving our clients, which is our top priority.”

Due to rounding, AUM values and other amounts in this press release may not add up precisely to the totals provided. The table below presents AUM, and certain GAAP and non-GAAP (“adjusted”) financial results.

AUM, Flows and Investment Performance

At September 30, 2026, Victory Capital had total client assets of $355.5 billion, assets under management of $351.9 billion, and other assets of $3.6 billion. Total AUM increased by $9.4 billion to $351.9 billion at September 30, 2026, compared with $342.5 billion at June 30, 2026. The increase was primarily due to net inflows of $11.7 billion partially offset by negative market action of $2.2 billion.

As of September 30, 2026, Victory Capital offered 187 investment strategies through its multiple autonomous Investment Franchises and Solutions Platform. The table below presents outperformance against benchmarks by AUM as of September 30, 2026.

Third Quarter 2026 Compared with Second Quarter 2026

Revenue decreased 8.9% to $396.6 million in the third quarter, compared with $435.4 million in the second quarter, primarily due to the crystallization of certain annual fees received in the second quarter and changes in asset class and client mix, partially offset by higher average AUM over the comparable period. GAAP operating margin contracted by 980 basis points in the third quarter to 34.7%, down from 44.5% in the second quarter, due to a decrease in revenue and $16.2 million increase in acquisition-related costs as a result of the First Eagle Investments (“First Eagle”) transaction. Third quarter GAAP net income decreased 34.5% to $91.3 million, down from $139.4 million in the prior quarter.

Adjusted net income with tax benefit decreased 10.7% to $163.2 million, or $1.98 per diluted share, in the third quarter, down from $182.9 million, or $2.21 per diluted share, in the second quarter. Adjusted EBITDA decreased $30.6 million to $212.1 million in the third quarter compared to $242.7 million in the second quarter. Adjusted EBITDA margin contracted 230 basis points in the third quarter of 2026 to 53.5% compared with 55.8% in the prior quarter.

Third Quarter 2026 Compared with Third Quarter 2025

Revenue for the three months ended September 30, 2026, increased 9.8% to $396.6 million, compared with $361.2 million in the same quarter of 2025 as a result of higher average AUM over the comparable period.

Operating expenses were $258.9 million compared with $223.1 million in last year’s third quarter reflecting increases in variable operating expenses that rose as a result of higher average AUM and acquisition-related costs as a result of the First Eagle transaction, partially offset by a decrease in integration costs. GAAP operating margin contracted 350 basis points to 34.7% in the third quarter, from 38.2% in the same quarter of 2025. GAAP net income decreased 5.4% to $91.3 million in the third quarter compared with $96.5 million in the same quarter of 2025.

Adjusted net income with tax benefit increased 15.5% to $163.2 million, or $1.98 per diluted share, in the third quarter, compared with $141.3 million, or $1.63 per diluted share in the same quarter last year. Adjusted EBITDA increased 11.4% to $212.1 million, compared with $190.5 million in the same quarter of last year. Year-over-year, adjusted EBITDA margin expanded 80 basis points to 53.5% in the third quarter of 2026, compared with 52.7% in the same quarter last year.

Nine Months Ended September 30, 2026 Compared with Nine Months Ended September 30, 2025

On April 1, 2025, the Company completed the acquisition of Amundi US and reintroduced the brand Pioneer Investments for the acquired business and investment products. Year-over-year results reflect the acquisition of Amundi US, which closed on April 1, 2025. Revenue for the nine months ended September 30, 2026, increased 30.9% to $1.2 billion, compared with $932.0 million in the same period of 2025 as a result of higher average AUM over the comparable period.

GAAP operating margin expanded 530 basis points to 40.2% in the nine months ended September 30, 2026, up from 34.9% in the same period of 2025. The improvement was due to decreases in acquisition-related and restructuring and integration costs of $12.4 million and $18.6 million, respectively, primarily related to the acquisition of Amundi US in 2025 partially offset by higher variable operating expenses as a result of the higher average AUM and an expanded business. Nine months ended September 30, 2026 GAAP net income increased 57.8% to $342.8 million, up from $217.3 million in the prior period.

Adjusted net income with tax benefit increased 37.9% to $499.3 million, or $5.99 per diluted share, in the nine months ended September 30, 2026, compared with $362.2 million, or $4.59 per diluted share in the same period last year. Adjusted EBITDA increased 35.7% to $658.9 million, compared with $485.4 million in the same period of last year. Year-over-year, adjusted EBITDA margin expanded 190 basis points to 54.0% for the nine months ended September 30, 2026, compared with 52.1% in the same period of last year.

Balance Sheet / Capital Management

The total debt outstanding as of September 30, 2026 was approximately $975 million.

For the three months ended September 30, 2026, the Company repurchased approximately 0.4 million shares of Common Stock.

The Company’s Board of Directors approved a regular quarterly cash dividend of $0.50 per share. The dividend is payable on December 23, 2026, to shareholders of record on December 10, 2026.

Conference Call, Webcast and Slide Presentation

The Company will host a conference call tomorrow morning, November 5, at 8:00 a.m. ET to discuss the results. Analysts and investors may participate in the question-and-answer session. To participate in the conference call, please call 1-833-461-5787 (domestic) or 1-585-542-9983 (international), shortly before 8:00 a.m. ET and reference the Meeting ID 160 367 883. A live, listen-only webcast will also be available via the investor relations section of the Company’s website at https://ir.vcm.com. Prior to the call, a supplemental slide presentation that will be used during the conference call will be available on the Events and Presentations page of the Company’s investor relations website. For anyone who is unable to join the live event, an archive of the webcast will be available for replay shortly after the call concludes.

About Victory Capital

Victory Capital (NASDAQ: VCTR) is a diversified global asset management firm with $355.5 billion in total client assets, as of September 30, 2026. We serve institutional, intermediary, and individual clients through our Investment Franchises and Solutions Platform, which manage specialized investment strategies across traditional and alternative asset classes. Our differentiated approach combines the power of investment autonomy with the support of a robust, fully integrated operational and distribution platform. Clients have access to focused, top-tier investment talent equipped with comprehensive resources designed to deliver competitive long-term performance.

Victory Capital is headquartered in San Antonio, Texas. To learn more, visit www.vcm.com or follow us on Facebook, Twitter (X) and LinkedIn.

FORWARD-LOOKING STATEMENTS

This document may contain forward-looking statements within the meaning of applicable U.S. federal and non-U.S. securities laws. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “assume,” “budget,” “continue,” “estimate,” “future,” “objective,” “outlook,” “plan,” “potential,” “predict,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof and include, but are not limited to, statements regarding the proposed transaction and the outlook for Victory Capital’s or First Eagles’ future business and financial performance. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Victory Capital’s and First Eagles’ control and could cause Victory Capital’s and First Eagles’ actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements.

Although it is not possible to identify all of these risks and factors, they include, among others, the following: reductions in the assets under management (“AUM”) based on investment performance, client withdrawals, difficult market conditions and other factors such as the ongoing conflicts and potential military conflicts in Iran, Ukraine, Venezuela, China/Taiwan, and/or the Middle East, a pandemic, tariffs or trade restrictions; the nature of the Company’s contracts and investment advisory agreements; the Company's ability to maintain historical returns and sustain our historical growth; the Company's dependence on third parties to market our strategies and provide products or services for the operation of our business; the Company's ability to retain key investment professionals or members of our senior management team; the Company's reliance on the technology systems supporting our operations; the Company's ability to successfully acquire and integrate new companies; risks that the conditions to closing the transaction with First Eagle will be satisfied and the transaction will close on the anticipated timeline, if at all; risks associated with expected benefits, or impact on our business, of the proposed transaction, including our ability to achieve any expected synergies; the concentration of the Company’s investments in long only small- and mid-cap equity and U.S. clients; risks and uncertainties associated with non-U.S. investments; the Company's efforts to establish and develop new teams and strategies; the ability of the Company’s investment teams to identify appropriate investment opportunities; the Company's ability to limit employee misconduct; the Company's ability to meet the guidelines set by our clients; the Company's exposure to potential litigation (including administrative or tax proceedings) or regulatory actions; the Company's ability to implement effective information and cyber security policies, procedures and capabilities; the Company's substantial indebtedness; the potential impairment of the Company’s goodwill and intangible assets; disruption to the operations of third parties whose functions are integral to the Company’s ETF platform; the Company's determination that we are not required to register as an “investment company” under the Investment Company Act of 1940; the fluctuation of the Company’s expenses; the Company's ability to respond to recent trends in the investment management industry; the level of regulation on investment management firms and the Company’s ability to respond to regulatory developments; the competitiveness of the investment management industry; and other risks and factors included, but not limited to, those listed under the caption “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2026, which is accessible on the SEC’s website at www.sec.gov.

In light of these risks, uncertainties and other factors, the forward-looking statements contained in this press release might not prove to be accurate. All forward-looking statements speak only as of the date made and Victory Capital undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Investment Performance and Fund Ratings

We believe that investment performance can influence AUM growth, flows, and overall operational results. Management utilizes the percentage of AUM and the percentage of strategies outperforming benchmarks, together with the percentage of our rated mutual fund and ETF AUM and the number of our mutual funds and ETFs rated 4 or 5 stars overall by Morningstar, to evaluate the investment performance of our Investment Franchises, our Solutions Platform, and specific investment products.

AUM measured versus benchmark on a one, three, five, and 10-year basis represents 90%, 89%, 85%, and 78% of Total AUM, respectively, as of September 30, 2026. Composites are calculated by asset weighting included accounts, using gross-of-fee, linked time weighted returns for each period. The composite return is then compared to the primary strategy benchmark. Composites without sufficient performance history are excluded from periods for which a full track record does not yet exist. Certain separate accounts are excluded where Victory Capital has determined, in accordance with its GIPS^® Procedures, that inclusion would not be representative of the strategy's performance.

As of September 30, 2026, of our 113 rated mutual funds and ETFs, 56 received 4 or 5 star Overall Morningstar Ratings^TM, and 57 did not, representing 62% and 38% of rated mutual fund and ETF AUM, respectively. Funds not rated by Morningstar are excluded from the analysis. Not all asset classes considered are available to the general public and not all funds included have a history to be included in each period. Had fees not been waived and/or expenses reimbursed currently or in the past, the Morningstar ratings could have been lower. Ratings for other share classes not shown may be lower.

Past performance is not indicative of future results and may not reflect an investor's experience.

Investors:
Carly Thomas
Director, Investor Relations and Responsible Business
210-694-9658
cthomas@vcm.com

Media:
Jessica Davila Burgess
Director, Global Communications
210-694-9693
jessica_davila@vcm.com