Victory Capital Holdings Inc (VCTR, Financial) released its financial results for the third quarter ended September 30, 2023, on November 2, 2023. The company reported a GAAP net income of $0.77 per diluted share and an adjusted net income with tax benefit of $1.18 per diluted share. The company's total Assets Under Management (AUM) stood at $153.5 billion.
Financial Highlights
Victory Capital reported a GAAP operating margin of 38% and an adjusted EBITDA margin of 51.1%. The company's total gross flows were $5.4 billion for the third quarter and $17.4 billion for the year-to-date period. For the third quarter and year-to-date periods, the company reported total net outflows of $1.7 billion and $5.4 billion, respectively.
Revenue increased 2.7% to $209.7 million in the third quarter, compared with $204.2 million in the second quarter, primarily due to an increase in average AUM and one extra day in the quarter. GAAP operating margin contracted 470 basis points in the third quarter to 38.2%, down from 42.9% in the second quarter primarily due to the combination of a non-cash $8.8 million difference in amounts recorded to the change in the fair value of consideration payable for acquisitions and an increase in depreciation and amortization expense due to the write-down of an intangible asset.
Company's Performance
David Brown, Chairman and Chief Executive Officer, commented on the company's performance,
Adjusted EBITDA margin expanded further to 51.1% in the third quarter. This was the 13th consecutive quarter above our target of 49%, and the 9th quarter over that period that our margins were 50% or higher. Additionally, we recorded the highest level of quarterly revenue in more than a year, and the highest levels of quarterly Adjusted EBITDA and Adjusted Net Income this calendar year."
Future Outlook
The company ended the third quarter with $108 million of cash on its balance sheet. Total debt outstanding as of September 30, 2023, was approximately $1,002 million and consisted of an existing term loan balance of $631 million and the 2021 Incremental Term Loans balance of $371 million. The Company’s Board of Directors approved a regular quarterly cash dividend of $0.32 per share.
Explore the complete 8-K earnings release (here) from Victory Capital Holdings Inc for further details.
