QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 001-38388
Victory Capital Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware
32-0402956
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
15935 La Cantera Parkway, San Antonio, Texas
78256
(Address of principal executive offices)
(Zip Code)
(216) 898-2400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 Par Value
VCTR
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of outstanding shares of the registrant’s Common Stock, par value $0.01 per share as of July 31, 2026 was 61,509,572.
This document may contain forward-looking statements within the meaning of applicable U.S. federal and non-U.S. securities laws. These forward‑looking statements may include, without limitation, statements concerning our current expectations, estimates, assumptions and beliefs concerning future events, conditions, plans, and strategies that are not historical fact. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases 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 outlook for Victory Capital’s future business and financial performance. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Victory Capital’s control and could cause Victory Capital’s 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 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 associated with expected benefits of the Amundi US transaction and the related impact on the Company’s business; the concentration of the Company’s investments in long only 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.
2
In light of these risks, uncertainties and other factors, the forward‑looking statements contained in this report might not prove to be accurate. All forward‑looking statements speak only as of the date made and we undertake no obligation to update or revise publicly any forward‑looking statements, whether as a result of new information, future events or otherwise.
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
(In thousands)
Shares
Stockholders' Equity
Preferred Stock
Common Stock
Treasury Stock
Preferred Stock
Common Stock
Treasury Stock
Additional Paid-In-Capital
Accumulated Other Comprehensive Income (Loss)
Retained Earnings
Total
Balance, December 31, 2025
19,937
87,867
(23,717
)
$
199
$
879
$
(786,008
)
$
2,102,938
$
9,020
$
1,097,701
$
2,424,729
Issuance of common stock
-
1
-
-
-
-
157
-
-
157
Repurchase of shares
-
-
(1,796
)
-
-
(128,303
)
-
-
-
(128,303
)
Shares withheld related to net settlement of equity awards
-
-
(232
)
-
-
(16,045
)
-
-
-
(16,045
)
Vesting of restricted share grants
-
328
-
-
3
-
(3
)
-
-
-
Exercise of options
-
193
-
-
2
-
1,688
-
-
1,690
Other comprehensive loss
-
-
-
-
-
-
-
(378
)
-
(378
)
Share-based compensation
-
-
-
-
-
-
7,412
-
-
7,412
Conversion of common stock to preferred stock (1)
100
-
(100
)
1
-
-
(1
)
-
-
-
Dividends paid
-
-
-
-
-
-
-
-
(41,565
)
(41,565
)
Net income
-
-
-
-
-
-
-
-
112,140
112,140
Balance, March 31, 2026
20,037
88,389
(25,845
)
$
200
$
884
$
(930,356
)
$
2,112,191
$
8,642
$
1,168,276
$
2,359,837
Issuance of common stock
-
1
-
$
-
$
-
$
-
$
70
$
-
$
-
$
70
Repurchase of shares
-
-
(1,079
)
-
-
(92,297
)
-
-
-
(92,297
)
Shares withheld related to net settlement of equity awards
-
-
(69
)
-
-
(5,393
)
-
-
-
(5,393
)
Vesting of restricted share grants
-
119
-
-
1
-
(1
)
-
-
-
Exercise of options
-
45
-
-
1
363
-
-
364
Other comprehensive loss
-
-
-
-
-
-
-
(1,609
)
-
(1,609
)
Share-based compensation
-
-
-
-
-
-
15,776
-
-
15,776
Conversion of common stock to preferred stock
-
-
-
-
-
-
-
-
-
-
Dividends paid
-
-
-
-
-
-
-
-
(41,090
)
(41,090
)
Net income
-
-
-
-
-
-
-
-
139,404
139,404
Balance, June 30, 2026
20,037
88,554
(26,993
)
$
200
$
886
$
(1,028,046
)
$
2,128,399
$
7,033
1,266,590
$
2,375,062
(1) Pursuant to the terms set forth in the Shareholder Agreement, the Company issued to Amundi shares of Preferred stock in exchange for an equal number of shares of Common stock.
As used in this quarterly report on Form 10-Q, unless the context otherwise requires, the terms “Company,” “Victory,” or in the first-person notations of “we,” “us,” and “our” refer to Victory Capital Holdings, Inc. along with its wholly-owned subsidiaries.
The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete annual financial statements. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report"). Certain prior period amounts have been revised to conform to the current period presentation. Such changes were made for clarity and comparability and had no effect on previously reported results of operations or financial position.
In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial condition, results of operations, and cash flows for the interim periods presented. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.
Principles of Consolidation
The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries, after elimination of all intercompany balances and transactions. Our involvement with non-consolidated variable interest entities (“VIEs”) includes sponsored investment funds.
For further discussion regarding VIEs, refer to Note 2, Significant Accounting Policies, to the consolidated financial statements included in our 2025 Annual Report.
Use of Estimates and Assumptions
The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements and the notes. Actual results may ultimately differ materially from those estimates.
Significant Accounting Policies
There have been no material changes to our significant accounting policies from our 2025 Annual Report.
Recently Issued Accounting Standards
Reporting Comprehensive Income: In November 2024, the FASB issued Accounting Standards Update (ASU) 2024-03, Disaggregation of Income Statement Expenses ("DISE"). This ASU does not change or remove current expense presentation requirements within the Consolidated Statements of Operations. However, the amendments require disclosure, on an annual and interim basis, of disaggregated information about certain income statement expense line items within the notes to the consolidated financial statements. DISE is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact that this ASU will have on the Company's consolidated financial statement disclosures.
Internal-Use Software: In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"). ASU 2025-06 modernizes the guidance on accounting for internal-use software costs by removing references to traditional development project stages and instead requiring capitalization when management commits to funding and it is probable the project will be completed. ASU 2025-06 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact that ASU 2025-06 will have on the Company's consolidated financial statement disclosures.
No other recently adopted or issued accounting standards had, or will have, a material impact on our unaudited condensed consolidated financial statements.
In accordance with the revenue recognition standard requirements, the following table disaggregates our revenue by type and product:
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2026
2025
2026
2025
Investment management fees
Mutual funds (Victory Funds)
$
195,214
$
175,308
$
384,324
$
289,649
ETFs (VictoryShares)
15,892
9,834
30,920
18,563
Separate accounts and other vehicles
91,102
78,103
177,970
126,096
Performance-based fees
Mutual funds (Victory Funds III & IV)
4,134
1,607
8,488
3,798
Separate accounts and other vehicles
55,901
17,454
76,910
17,501
Total investment management fees
$
362,243
$
282,306
$
678,612
$
455,607
Fund administration and distribution fees
Administration fees
Mutual funds (Victory Funds)
33,906
32,333
66,827
59,178
ETFs (VictoryShares)
1,603
1,218
3,086
2,312
Distribution fees
Separate accounts and other vehicles
1,129
1,033
2,387
1,033
Mutual funds (Victory Funds)
24,270
21,552
47,801
26,899
Transfer agent fees
Mutual funds (Victory Funds III)
12,210
12,770
24,637
25,785
Total fund administration and distribution fees
$
73,118
$
68,906
$
144,738
$
115,207
Total revenue
$
435,361
$
351,212
$
823,350
$
570,814
The following table presents balances of receivables:
(in thousands)
June 30, 2026
December 31, 2025
Customer receivables
Mutual funds (Victory Funds)
$
90,026
$
91,191
ETFs (VictoryShares)
6,615
5,499
Separate accounts and other vehicles
142,078
80,193
Receivables from contracts with customers
238,719
176,883
Non-customer receivables
5,611
4,258
Total receivables
$
244,330
$
181,141
Revenue
The Company’s revenue includes fees earned from providing;
•
investment management services,
•
fund administration services,
•
fund transfer agent services, and
•
fund distribution services.
Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer.
Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
NOTE 3. ACQUISITIONS
Pioneer Investments
On April 1, 2025, the Company completed the acquisition of Amundi Asset Management S.A.S ("Amundi")'s U.S. business ("Amundi US") and reintroduced the brand Pioneer Investments ("Pioneer" or "Pioneer Investments") for the acquired business and investment products ("Amundi Transaction"). Pioneer Investments is the Company's largest investment franchise, and the transaction meaningfully enhanced the Company's scale, expanded its global client base, and further diversified its investment capabilities.
In exchange for the contribution of all the shares of the Amundi US to the Company, the Company issued to Amundi (a) 3,293,471 newly issued shares of Common stock, representing 4.9% of the number of issued and outstanding shares of Common stock after giving effect to such issuance, and (b) 19,698,274 newly issued shares of Preferred stock, which, together with the shares of Common stock issued to Amundi represented in the aggregate 26.1% of the Company’s fully diluted shares after giving effect to such share issuances. Total purchase price consideration was approximately $1,326 million, settled entirely in Company shares. For further detail on the transaction consideration, refer to Note 4 in the Company's 2025 Annual Report.
Purchase Price Allocation
The Company accounted for the acquisition in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations, allocating the purchase price to assets acquired and liabilities assumed based on their respective fair values at the acquisition date. The purchase price allocation was finalized during the first quarter of 2026 within the one-year measurement period prescribed by ASC 805.
Financial Results
Revenue recognized by Pioneer Investments for the three and six months ended June 30, 2026 was as follows:
Three Months Ended
Six Months Ended
(in millions)
June 30, 2026
June 30, 2026
Revenue
$
204
$
362
Net income attributable to Pioneer Investments for the three and six months ended June 30, 2026 is impractical to determine as the Company does not prepare discrete financial information at the franchise level.
The Company's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026 include operating results of the Amundi US acquired company. The following unaudited pro forma figures for the three and six months ended June 30, 2025 give effect to the acquisition as if it had occurred on January 1, 2025 and combines the financial results of the Company and Amundi US after adjusting primarily for amortization of intangible assets and additional fixed asset depreciation that would have been expensed assuming the fair value adjustments had been applied on January 1, 2025, net of any tax impact. This unaudited information is for illustrative purposes only and should not be relied upon as indicative of historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future.
Three Months Ended June 30,
Six Months Ended June 30,
(in millions)
2026
2025
2026
2025
Revenue
$
435
$
351
$
823
$
697
Net Income
$
139
$
59
$
252
$
113
Acquisition-related and other costs
Acquisition-related costs include legal fees, advisory services, mutual fund proxy voting costs and other one-time expenses related to business combinations. For the three and six months ended June 30, 2026, the Company recognized a net credit of $0.7 million and $7.0 million of expense, respectively, in acquisition-related costs. The Company expensed $25.8 million and $34.5 million in acquisition-related costs in the three and six months ended June 30, 2025, respectively. These amounts are included in acquisition-related costs in the unaudited Condensed Consolidated Statements of Operations.
In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies.
The following table presents a rollforward of restructuring and integration liabilities, which as of June 30, 2026 and December 31, 2025 were included in accounts payable and accrued expenses on the unaudited Condensed Consolidated Balance Sheets.
Restructuring and
(in millions)
Integration Costs
Liability Balance, December 31, 2025
$
5.4
Severance expense
0.5
Integration and other costs
5.3
Restructuring and integration costs
5.8
Settlement of liabilities
(4.9
)
Liability Balance, June 30, 2026
$
6.3
NOTE 5. SEGMENT REPORTING
ASU 2023-07, which is based on a management approach to segment reporting, establishes requirements to report segment revenue and significant expenses reported in net income, the primary measurement used by our Chief Operating Decision Maker ("CODM") in evaluating segment performance.
The Company provides investment management services and products to institutional, intermediary, retirement platforms and individual investors. The presentation of financial results as one reportable segment is consistent with the way discrete financial information is available that is regularly provided to our Chief Executive Officer, the CODM. When making decisions about allocating resources, assessing performance, and understanding how our long-term organic revenue growth is driven by investment decisions our CODM uses net income and considers the impact on consolidated, entity-wide performance and financial results.
Significant segment expenses are presented in the unaudited Condensed Consolidated Statements of Operations. Additional disaggregated significant segment expenses that are not separately presented in the unaudited Condensed Consolidated Statements of Operations are presented below:
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2026
2025
2026
2025
Salaries, payroll related taxes and employee benefits
$
39,267
$
41,407
$
77,942
$
63,152
Incentive compensation
55,692
38,116
99,382
61,783
Sales-based compensation(1)
10,071
10,612
21,798
17,832
Equity awards granted to employees and directors(2)
15,776
5,658
23,188
9,162
Acquisition and transaction-related compensation
4,694
13,125
9,045
13,125
Total personnel compensation and benefits expense
$
125,500
$
108,918
$
231,355
$
165,054
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2026
2025
2026
2025
Broker-dealer distribution fees
$
22,862
$
20,833
$
45,120
$
25,633
Platform distribution fees
34,552
31,444
69,094
53,055
Sub-administration
5,855
5,274
11,527
9,664
Sub-advisory
2,187
1,678
4,196
3,550
Middle-office
3,134
2,810
6,063
5,614
Total distribution and other asset-based expenses
$
68,590
$
62,039
$
136,000
$
97,516
(1)
Represents sales-based commissions paid to our distribution teams. Sales-based compensation varies based on gross and net client cash flows and revenue earned on sales.
(2)
Equity awards typically vest over several years based on service and the achievement of specific business and financial targets. The value of the equity awards is recognized as compensation expense over the vesting period.
The effective tax rate for the three and six months ended June 30, 2026 and 2025 differs from the United States federal statutory rate primarily due to state and local income taxes, excess tax benefits on share-based compensation and non-deductible expenses.
For the three months ended June 30, 2026 and 2025, the provision for income taxes was $47.8 million and $28.3 million, or 25.6% and 32.5%, of pre-tax income, respectively. For the six months ended June 30, 2026 and 2025, the provision for income taxes was $83.6 million and $46.7 million, or 24.9% and 27.9% of pre-tax income, respectively.
The effective tax rates for the three and six months ended June 30, 2026 were lower than the effective tax rates for the same periods in 2025 primarily due to a decrease in non-deductible expenses and the state and local tax rate, partially offset by decreased excess tax benefits on share-based compensation.
No valuation allowance was recorded for deferred tax assets in the period ended June 30, 2026, and 2025.
NOTE 7. Investments
As of June 30, 2026 and December 31, 2025, the Company had investments in proprietary funds and deferred compensation plan investments. Investments in proprietary funds consist primarily of seed capital investments in certain Victory Funds. Deferred compensation plan investments include investments in affiliated and third party mutual funds held in a rabbi trust under a deferred compensation plan.
The following table presents the fair value of the Company's investments:
(in thousands)
June 30, 2026
December 31, 2025
Investments in Proprietary Funds
$
722
$
636
Deferred Compensation Plan Investments
90,950
98,758
Unrealized and realized gains and losses on investments in proprietary funds and deferred compensation plan investments are recorded in earnings as interest income and other income (expense).
The following table presents the unrealized gains/(losses) recognized during the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2026
2025
2026
2025
Investments in Proprietary Funds
$
67
$
41
$
84
$
(2
)
Deferred Compensation Plan Investments
6,217
3,052
6,199
3,433
NOTE 8. Fair Value Measurements
The Company determines the fair value of certain financial and nonfinancial assets and liabilities. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value determinations utilize a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability.
Classification within the fair value hierarchy contains three levels:
•
Level 1—Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets.
•
Level 2—Valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other observable inputs directly or indirectly related to the asset or liability being measured.
•
Level 3—Valuation inputs are unobservable and significant to the fair value measurement. These inputs reflect management's own assumptions about the assumptions a market participant would use in pricing the asset or liability.
The following table presents assets and liabilities measured at fair value on a recurring basis:
As of June 30, 2026
(in thousands)
Total
Level 1
Level 2
Level 3
Financial Assets
Money market fund
$
29,889
$
29,889
$
-
$
-
Investments in proprietary funds
722
722
-
-
Deferred compensation plan investments
90,950
90,950
-
-
Total Financial Assets
$
121,561
$
121,561
$
-
$
-
Financial Liabilities
Contingent consideration arrangements
$
(53,199
)
$
-
$
-
$
(53,199
)
Total Financial Liabilities
$
(53,199
)
$
-
$
-
$
(53,199
)
As of December 31, 2025
(in thousands)
Total
Level 1
Level 2
Level 3
Financial Assets
Money market fund
$
132,713
$
132,713
$
-
$
-
Investments in proprietary funds
636
636
-
-
Deferred compensation plan investments
98,758
98,758
-
-
Total Financial Assets
$
232,107
$
232,107
$
-
$
-
Financial Liabilities
Contingent consideration arrangements
$
(87,564
)
$
-
$
-
$
(87,564
)
Total Financial Liabilities
$
(87,564
)
$
-
$
-
$
(87,564
)
Level 1 assets consist of money market funds and open-end mutual funds. The fair values for these assets are determined utilizing quoted market prices for identical assets.
There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy from December 31, 2025 to June 30, 2026. The Company recognizes transfers at the end of the reporting period.
The net carrying value of accounts receivable and accounts payable approximates fair value due to the short‑term nature of these assets and liabilities. The fair value of our long-term debt as of June 30, 2026 is considered to be its carrying value as the interest rate on the bank debt is variable and approximates current market rates. As a result, Level 2 inputs are utilized to determine the fair value of our long‑term debt.
Contingent payment arrangements
WestEnd
Contingent consideration arrangements represent the WestEnd earn-out payment liability which is included in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets. Under the terms of the WestEnd purchase agreement, a maximum of $320.0 million ($80.0 million per year) of contingent payments is payable to sellers. Contingent earn-out payments are based on net revenue of the WestEnd business during each of the first four years following the close of the acquisition, subject to certain “catch-up” provisions over a five and one-half year period following the close of the acquisition.
During the six months ended June 30, 2026, the Company paid $39.9 million in cash to sellers for the third earn-out period. The estimated fair value of the contingent consideration payable to the sellers was $53.2 million as of June 30, 2026 and $87.6 million as of December 31, 2025.
For the three and six months ended June 30, 2026, the change in the liability was an increase of $2.0 million and $5.6 million, respectively. For the three and six months ended June 30, 2025, the change in liability was an increase of $1.1 million and $4.5 million, respectively. The impact of decreasing or increasing the valuation of the contingent consideration liability is recorded in change in value of consideration payable for acquisition of business in the unaudited Condensed Consolidated Statements of Operations.
The estimated fair value for contingent consideration payable to sellers is estimated using the real options method. WestEnd net revenue growth is simulated in a risk-neutral framework to calculate expected probability-weighted earn out payments, which are then discounted from the expected payment dates at the relevant cost of debt. Significant assumptions and inputs include the WestEnd net revenue projected annual growth rate, the market price of risk, which adjusts the projected revenue
growth rate to a risk-neutral expected growth rate, revenue volatility and discount rate. The market price of risk and revenue volatility are based on data for comparable companies. As the contingent consideration represents a subordinate, unsecured claim of the Company, the Company assesses a discount rate which incorporates adjustments for credit risk and the subordination of the contingent consideration
Significant inputs to the valuation of contingent consideration payable to sellers as of June 30 2026 and December 31, 2025 are as follows and are approximate values:
June 30, 2026
December 31, 2025
Net revenue 5 year average annual growth rate
12
%
11
%
Market price of risk adjustment for revenue (continuous)
4
%
4
%
Revenue volatility
20
%
20
%
Discount rate
7
%
6
%
Years remaining in earn out period
1.3 years
1.8 years
Undiscounted estimated remaining earn out payments $ millions
$50 - $80
$89 - $160
The following table presents the balance of the contingent consideration arrangement liabilities for the six months ended June 30, 2026:
(in thousands)
Contingent Consideration Liabilities
Balance, December 31, 2025
$
87,564
WestEnd earn-out payment
(39,943
)
WestEnd change in fair value measurement
5,578
Balance, June 30, 2026
$
53,199
New Energy Capital
Under the terms of the purchase agreement for New Energy Capital Partners ("NEC"), which closed during 2021, the Company will pay up to an additional $35.0 million in cash based on net revenue growth over a six-year period on the private, closed-end alternative investment funds managed by the NEC franchise ("NEC Funds"). The maximum amount of contingent payments, less any contingent payments previously paid, is due upon the occurrence of certain specified events within a five year period following the Start Date.
The Company determined that substantially all of the contingent payments payable per the NEC purchase agreement represent compensation for post-closing services. The Company records compensation expense over the estimated service period in an amount equal to the total contingent payments currently forecasted to be paid.
As of June 30, 2026 and December 31, 2025, the Company determined that the contingent payments are no longer probable of occurring and the liability for NEC contingent payments is zero.
NOTE 9. Related-Party Transactions
The Company engages in transactions with related parties in the ordinary course of business, including certain funds it manages, sponsors, and serves as a subadviser.The Company's related-party arrangements are described in Note 6, Related-Party Transactions, to the consolidated financial statements included in our 2025 Annual Report.
The table below presents balances and transactions involving related parties included in the unaudited Condensed Consolidated Balance Sheets and unaudited Condensed Consolidated Statements of Operations.
•
Included in cash and cash equivalents is cash held in the Victory Treasury Money Market Trust.
•
Included in receivables (investment management fees) are amounts due from the Victory Funds, the VictoryShares, the collective trust (the “Victory Collective Funds”), the NEC Funds and other pooled investment vehicles for investment management services.
•
Included in receivables (fund administration and distribution fees) are amounts due from the Victory Funds for fund administration services and compliance services, amounts due from the VictoryShares for fund administration services, amounts due from the Victory Funds III for transfer agent services and amounts due from the Victory Funds for sub-transfer agent services.
Included in prepaid expenses are amounts paid by Victory Capital Management ("VCM") that will be invoiced to the NEC Funds and Victory Funds in subsequent periods.
•
Included in revenue (investment management fees) are amounts earned for investment management services provided to the Victory Funds, the VictoryShares, the Victory Collective Funds, the NEC Funds and other pooled investment vehicles.
•
Included in revenue (fund administration and distribution fees) are amounts earned for fund administration and compliance services, transfer agent services and sub-transfer agent services.
•
Realized and unrealized gains and losses and dividend income on investments in the Victory Funds classified as investments in proprietary funds and deferred compensation plan investments and dividend income on investments in the Victory Treasury Money Market Trust are recorded in interest income and other income (expense) in the unaudited Condensed Consolidated Statements of Operations.
•
Amounts due to the Victory Funds, the VictoryShares and other pooled investment vehicles for waivers of investment management fees and reimbursements of fund operating expenses are included in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets and represent consideration payable to customers.
•
All transactions with Amundi Distributor US, Inc., and Amundi and its subsidiaries are included in the balances below.
(in thousands)
June 30, 2026
December 31, 2025
Related party assets
Cash and cash equivalents
$
29,889
$
132,713
Receivables (investment management fees)
171,804
111,474
Receivables (fund administration and distribution fees)
25,897
25,861
Prepaid expenses
10,684
6,698
Investments (investments in proprietary funds, fair value)
722
636
Investments (deferred compensation plan investments, fair value)
90,789
97,808
Total
$
329,785
$
375,190
Related party liabilities
Accounts payable and accrued expenses (fund reimbursements)
The following table presents the components of long-term debt in the unaudited Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 under the Company's credit agreement ("2019 Credit Agreement").
June 30, 2026
December 31, 2025
(in thousands)
Amount
Interest Rate
Effective Interest Rate
Amount
Interest Rate
Effective Interest Rate
Term Loans
Due September 2032
$
977,613
5.48%
5.64%
$
982,538
5.67%
5.86%
Term loan principal outstanding
977,613
982,538
Unamortized debt issuance costs
(3,144
)
(8,508
)
Unamortized debt discount
(6,495
)
(4,016
)
Long-term debt, net
$
967,974
$
970,014
The 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0% of the commitments thereunder (excluding certain letters of credit), of no greater than 4.00 to 1.00. As of June 30, 2026 and December 31, 2025, there were no outstanding borrowings under the revolving credit facility and the Company was in compliance with its financial performance covenant.
Debt modifications and repayments
On May 18, 2026, pursuant to the Seventh Amendment of the 2019 Credit Agreement, the Company refinanced its existing term loans (the "Existing Term Loans") with repriced term loans (the "Repriced Term Loans") which will bear interest at an annual rate equal to, at the option of the Company, either SOFR plus a margin of 1.75% or an alternate base rate plus a margin of 0.75%.
The Company elects to use three-month Term SOFR plus a margin of 1.75% required by the 2019 Credit Agreement to pay interest on its debt.
Pursuant to ASC 470-50, Debt - Modifications and Extinguishments, the Company evaluated the Repriced Term Loans on a lender-by-lender basis and accounted accordingly for debt extinguishment costs and debt modification costs (for the portion of the transaction that did not meet the accounting criteria for debt extinguishment). On the unaudited Condensed Consolidated Statement of Cash Flows, the financing cash outflows and inflows associated with this transaction were determined on a lender-by-lender basis and repayments during the three and six months ended June 30, 2026 totaled $306.6 million. During the three and six months ended June 2026, the Company incurred costs of $2.4 million related to the Seventh Amendment, of which $2.0 million was recorded as a loss on debt extinguishment and $0.4 million was recognized as general and administrative expense in the unaudited Condensed Consolidated Statement of Operations. The Company repaid an additional $2.5 million and $4.9 million of the outstanding term loans under the 2019 Credit Agreement during the three and six months ended June 30, 2026, respectively.
There were no repayments of outstanding term loans under the 2019 Credit Agreement during the three and six months ended June 30, 2025.
The following table presents the components of interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations for the periods ended June 30, 2026 and 2025.
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2026
2025
2026
2025
Interest expense
$
13,821
$
16,247
$
27,745
$
32,437
Amortization of debt issuance costs
185
755
381
1,504
Amortization of debt discount
295
295
617
587
Amortization of deferred gain on terminated interest rate swap
(2,118
)
(4,154
)
(2,556
)
(8,263
)
Other
9
91
86
180
Total
$
12,192
$
13,234
$
26,273
$
26,445
NOTE 11. Share‑Based Compensation
Equity Incentive Plans
For a full description of the Company’s share-based compensation plans, refer to Note 15 of the Company’s financial statements as of and for the year ended December 31, 2025 included in the Company’s 2025 Annual Report. As of June 30, 2026, 1.1 million shares of Common Stock remained available for issuance under the Company's Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”).
Restricted Stock Awards
Restricted stock awards (“RSAs”) entitle the holder to receive shares of the Company’s common stock as the awards vest. Grants of RSAs can be classified as service-based, performance-based, or market-based, depending on the vesting criteria of the award. RSA activity for service-based RSAs for the six months ended June 30, 2026 is as follows:
Restricted Stock Awards
Six Months Ended June 30,
2026
2025
Avg wtd grant-
Avg wtd grant-
(units in thousands)
date fair value
Units
date fair value
Units
Unvested at beginning of period
$
52.00
1,142
$
36.67
911
Granted
65.95
461
59.19
675
Vested
47.83
(447
)
34.23
(413
)
Forfeited
55.86
(19
)
31.00
(24
)
Unvested at end of period
$
59.23
1,137
$
50.88
1,149
Performance-Based Restricted Stock Award
In 2026, the Board of Directors approved a one-time grant of 1.3 million performance-based shares of restricted stock ("Performance Shares" or "PRSAs") to key executives under the 2018 Plan. The PRSAs vest upon achievement of four absolute stock price hurdles during a seven-year measurement period commencing on the grant date, subject to continued employment through the applicable vesting date. A hurdle is deemed achieved when the average closing trading price equals or exceeds the applicable threshold for five consecutive trading days. Vested shares are subject to a one-year post-vesting holding requirement, and any shares that do not vest during the measurement period or prior to termination of employment will be forfeited.
The grant-date fair value of $60.8 million was determined using a Monte Carlo simulation model, with the total shares allocated equally across four tranches. A Monte Carlo simulation model requires inputs such as the risk-free interest rate, expected volatility, stock price, valuation date, and expected dividend yield. Expected volatility was estimated based on the historical volatility of the Company's common stock. The grant-date fair value also reflects a discount for post-vesting restrictions, which was measured using a market-based valuation model. Compensation expense for each tranche is recognized on a straight-line basis over the respective derived service period, which ranges from 0.32 years to 2.54 years,
with no reversal if the market condition is not satisfied. Any remaining unrecognized expense is recognized immediately upon achievement of the applicable hurdle.
Share-based Compensation Expense
Share-based compensation expense is included within personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations. The following table summarizes share-based compensation expense, related tax benefits, and the total fair value of restricted share awards vested.
Three Months Ended June 30,
Six Months Ended June 30,
in thousands
2026
2025
2026
2025
Share-based compensation expense
$
15,776
$
5,658
$
23,188
$
9,163
As of June 30, 2026, the Company expects to recognize total share-based compensation expense of $109.4 million.
Shares Withheld for net settlement of employee equity awards
Shares of Common Stock are available for issuance under the 2018 Plan as determined by the Compensation Committee of the Company’s board of directors. Shares underlying awards that are settled in cash, expire or are canceled, forfeited or otherwise terminated without delivery to a participant will again be available for issuance under the 2018 Plan. In addition, shares withheld or surrendered in connection with the payment of an exercise price of an award or to satisfy tax withholding will again be available for issuance under the 2018 Plan.
The following table presents both share and dollar value information about shares withheld for net settlement of employee equity awards:
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
(in thousands)
Total number of shares net settled
69
30
301
186
Employee tax obligations satisfied
$
5,030
$
1,410
$
19,387
$
10,153
Employee stock option costs satisfied
363
407
2,051
859
Total withheld related to net settlement of equity awards
The following table sets forth the reconciliation of basic earnings per share and diluted earnings per share from net income for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands except per share amounts)
2026
2025
2026
2025
Numerator for earnings per common share:
Net income
$
139,404
$
58,734
$
251,544
$
120,709
Preferred stock dividends
(10,018
)
(9,673
)
(19,788
)
(9,673
)
Net income attributable to preferred stockholders
(23,969
)
(2,985
)
(40,743
)
(5,334
)
Income attributable to common stockholders for basic earnings per share(1)
$
105,417
$
46,076
$
191,013
$
105,702
Allocation adjustment to income attributable to preferred stockholders(2)
183
26
343
62
Income attributable to common stockholders for diluted earnings per share
$
105,600
$
46,102
$
191,356
$
105,764
Denominator for earnings per common share:
Basic: weighted average number of shares outstanding
62,151
67,239
62,889
65,484
Plus: Incremental shares from assumed conversion of dilutive instruments
631
741
704
874
Diluted: Weighted average number of shares outstanding
62,782
67,980
63,593
66,358
Earnings per share
Basic:
$
1.70
$
0.69
$
3.04
$
1.61
Diluted:
$
1.68
$
0.68
$
3.01
$
1.59
(1)
Under the two-class method, total dividends provided to and undistributed earnings allocated to the preferred stockholders are subtracted from net income in determining income attributable to common stockholders.
(2)
This amount reflects the impact of reversing undistributed earnings allocated to preferred stockholders in the basic earnings per share calculation and reallocating undistributed earnings to preferred stockholders and common stockholders including the impact of dilutive instruments.
Outstanding instruments excluded from the computation of weighted average shares for diluted earnings per share because the effect would be anti-dilutive were de minimis for the periods ended June 30, 2026 and 2025. Holders of non-vested share-based compensation awards do not have rights to receive nonforfeitable dividends on the shares covered by the awards.
NOTE 13. DERIVATIVES
Interest Rate Swaps
In the fourth quarter of 2023, the Company monetized the gain on the floating-to-fixed interest rate swap transaction (“Swap”) entered into in 2020 to effectively fix the interest rate on $450 million of its outstanding Term Loan through the Term Loan maturity date of July 1, 2026.
The deferred gain on the termination of the Swap is being amortized on a straight-line basis through September 23, 2032 and is included in interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations.
For the three months ended June 30, 2026 and 2025, the Company recorded $2.1 million and $4.2 million, in amortization of deferred gain on Swap monetization. For the six months ended June 30, 2026 and 2025, the Company recorded $2.6 million and $8.3 million in amortization of deferred gain on Swap monetization.
As and June 30, 2026 and December 31, 2025, the unamortized deferred gain on Swap monetization was $9.2 million and $11.7 million, respectively, before tax.
The following tables summarize the classification of the Swap in our unaudited condensed financial statements (in thousands):
Three Months Ended
Six Months Ended
June 30,
June 30,
Statement of Operations
Description
2026
2025
2026
2025
Interest expense and other financing costs
Reclassification from AOCI – Amortization of Swap deferred gain
2,117
4,154
2,555
8,263
Three Months Ended
Six Months Ended
June 30,
June 30,
Statements of Comprehensive Income
Description
2026
2025
2026
2025
Other comprehensive income (loss)
Amortization of deferred gain on terminated Swap, net of tax
(1,609
)
(3,145
)
(1,942
)
(6,249
)
NOTE 14. Accumulated Other Comprehensive Income (Loss)
The following table presents changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2026 and 2025.
Cash Flow
Cumulative
Hedges
Translation
(in thousands)
(1)(2)
Adjustment
Total
Balance, December 31, 2025
$
8,924
$
96
$
9,020
Other comprehensive income (loss) before reclassification and tax
-
(59
)
(59
)
Tax impact
-
14
14
Reclassification adjustments, before tax
(2,555
)
-
(2,555
)
Tax impact
613
-
613
Net current period other comprehensive income (loss)
(1,942
)
(45
)
(1,987
)
Balance, June 30, 2026
6,982
51
7,033
Balance, December 31, 2024
$
18,853
$
(170
)
$
18,683
Other comprehensive income (loss) before reclassification and tax
-
457
457
Tax impact
-
(112
)
(112
)
Reclassification adjustments, before tax
(8,263
)
-
(8,263
)
Tax impact
2,014
-
2,014
Net current period other comprehensive income (loss)
(6,249
)
345
(5,904
)
Balance, June 30, 2025
$
12,604
$
175
$
12,779
(1)
Reclassifications out of accumulated other comprehensive income (loss) related to cash flow hedges are recorded in interest expense and other financing costs.
(2)
On October 30, 2023, the Company terminated the Swap. The termination resulted in a $44.4 million deferred gain recorded in AOCI, before tax, which is being amortized on a straight-line basis over the remaining term of the hedged debt (through September 23, 2032). Refer to Note 13, Derivatives, for further information on the monetization of the interest rate swap gain.
NOTE 15. SUBSEQUENT EVENTS
Quarterly Cash Dividends
On August 5, 2026, the Company’s Board of Directors approved a regular quarterly cash dividend of $0.50per share. The dividend is payable on September 25, 2026, to shareholders of record on September 10, 2026.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “Victory,” or in the first-person notations of “we,” “us,” and “our” shall mean Victory Capital Holdings, Inc., a Delaware corporation, and its wholly-owned subsidiaries.
Objective
The objective of this section of the Quarterly Report on Form 10-Q is intended to provide a discussion and analysis, from management’s perspective, of the key performance indicators and material information necessary to assess our financial condition and results of operations for the three and six months ended June 30, 2026 and 2025 and cash flows for the six months ended June 30, 2026 and 2025. In addition, we also discuss the Company’s contractual and off-balance sheet arrangements. This discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report"). This discussion and analysis contains forward-looking statements and should also be read in conjunction with the disclosures and information contained in “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and in “Item 1A. Risk Factors” included in the 2025 Annual Report.
Overview
Our Business – Victory is a diversified global asset management firm with total client assets of $346.1 billion, assets under management of $342.5 billion and other assets of $3.6 billion as of June 30, 2026. The Company operates a next-generation business model combining boutique investment qualities with the benefits of an integrated, centralized operating and distribution platform.
The Company provides specialized investment strategies to institutions, intermediaries, retirement platforms and individual investors with multiple autonomous Investment Franchises and a Solutions Platform. Victory Capital offers a wide array of investment products, including actively and passively managed mutual funds, rules-based and active exchange traded funds (“ETFs”), institutional separate accounts, variable insurance products (“VIPs”), alternative investments, private closed end funds, and a 529 Education Savings Plan. Victory Capital’s strategies are also offered through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts (“SMAs”) and unified managed accounts (“UMAs”) through wrap account programs, Collective Investment Trusts (“CITs”), and undertakings for the collective investment in transferable securities (“UCITS”). As of June 30, 2026, our Franchises and our Solutions Platform collectively managed a diversified set of 189 investment strategies for a wide range of institutional and retail clients and direct investors.
Franchises – Our Franchises are largely operationally integrated but are separately branded and make investment decisions independently from one another within guidelines established by their respective investment mandates. Our largely integrated model creates a supportive environment in which our investment professionals, largely unencumbered by administrative and operational responsibilities, can focus on their pursuit of investment excellence. VCM employs all of our U.S. investment professionals across our Franchises, which are not separate legal entities.
Solutions – Our Solutions Platform consists of multi‑asset, multi-manager, quantitative, rules-based, factor-based, and customized portfolios. These strategies are designed to achieve specific return characteristics, with products that include values-based and thematic outcomes and exposures. We offer our Solutions Platform through a variety of vehicles, including separate accounts, mutual funds, UMA accounts, and rules-based and active ETFs under our VictoryShares ETF brand. Like our Franchises, our Solutions Platform is operationally integrated and supported by our centralized distribution, marketing, and operational support functions.
Professionals within our institutional and retail distribution channels, direct investor business and marketing organization sell our products through our centralized distribution model. Our institutional sales team focuses on cultivating relationships with institutional consultants, who account for the majority of the institutional market, as well as asset allocators seeking sub-advisers. Our retail sales team offers intermediary and retirement platform clients, including broker-dealers, retirement platforms and RIA networks, mutual funds and ETFs as well as SMAs through wrap fee programs and access to our investment models through UMAs. Our direct investor business serves the investment needs of individual clients.
We have grown our total client assets from $17.9 billion following the management-led buyout in August 2013 to $346.1 billion at June 30, 2026. We attribute this growth to our success in sourcing acquisitions and evolving them into organic growers, generating strong investment returns, and developing institutional, retail, international, and direct investor channels with deep penetration.
Pioneer Investments - On April 1, 2025, the Company completed the transactions contemplated by the Contribution Agreement to combine Amundi’s U.S. business into the Company and reintroduced the brand Pioneer Investments for the acquired business and investment products. The addition of Pioneer Investments as the Company's largest Investment Franchise meaningfully enhances the Company's scale, expands its global client base and further diversifies its investment capabilities. The sequential results reflect Pioneer Investments as of April 1, 2025, which significantly impacted our financial results for the three and six months ended June 30, 2026 when compared to the comparable period. Refer to Note 3 of the condensed consolidated financial statements for further details related to the acquisition.
Business Highlights
Assets under management:
•
AUM at June 30, 2026 increased by $32.6 billion, or 10.5%, to $342.5 billion from $309.8 billion at March 31, 2026, driven by positive market action of $28.5 billion and net inflows of $4.1 billion. Total gross flows for the second quarter were $22.4 billion, including long-term gross flows of $22.1 billion.
•
AUM at June 30, 2026 and 2025 was $342.5 billion and $298.6 billion, respectively. We generated $22.4 billion in gross flows and $4.1 billion in net inflows for the three months ended June 30, 2026 compared to $15.7 billion in gross flows and $0.8 billion in net outflows for the same period in 2025.
•
AUM at June 30, 2026 and 2025 was $342.5 billion and $298.6 billion, respectively. We generated $41.6 billion in gross flows and $3.5 billion in net inflows for the six months ended June 30, 2026 compared to $25.2 billion in gross flows and $2.1 billion in net outflows for the same period in 2025. Net flows for the six months ended June 30, 2026 were comprised of $3.7 billion of net long-term inflows and $0.3 billion of short-term outflows.
Investment performance:
•
57 of our Victory Capital mutual funds and ETFs had overall Morningstar ratings of four or five stars and 60% of our fund and ETF AUM were rated four or five stars overall by Morningstar. 71% of our strategies by AUM had investment returns in excess of their respective benchmarks over a one-year period, 68% over a three-year period, 65% over a five-year period and 81% over a ten-year period. On an equal-weighted basis, 66% of our strategies have outperformed their benchmarks over a one-year period, 64% over a three-year period, 67% over a five-year period and 69% over a ten-year period.
Financial highlights:
•
Total revenue for the three months ended June 30, 2026 was $435.4 million compared to $351.2 million for the same period in 2025. For the six months ended June 30, 2026 and 2025, total revenue was $823.4 million and $570.8 million, respectively.
•
Net income was $139.4 million for the three months ended June 30, 2026 compared to $58.7 million for the same period in 2025. For the six months ended June 30, 2026 and 2025, net income was $251.5 million and $120.7 million, respectively.
•
Adjusted EBITDA was $242.7 million for the three months ended June 30, 2026, or 55.8% of revenue, compared to $178.5 million, or 50.8% of revenue, for the same period in 2025. For the six months ended June 30, 2026, Adjusted EBITDA was $446.7 million, or 54.3% of revenue, compared to $294.9 million, or 51.7% of revenue, for the same period in 2025. Refer to “Supplemental Non-GAAP Financial Information” for further information about the Adjusted EBITDA calculation and reconciliation of generally accepted accounting principles (“GAAP”) net income to Adjusted EBITDA.
•
Adjusted Net Income with tax benefit was $182.9 million for the three months ended June 30, 2026 compared to $132.8 million for the three months ended June 30, 2025. For the six months ended June 30, 2026, Adjusted Net Income with tax benefit was $336.1 million compared to $220.9 million for the same period in 2025. Refer to “Supplemental Non-GAAP Financial Information” for further information about the Adjusted Net Income calculation and reconciliation of GAAP net income to Adjusted Net Income.
The following table is a summary of key performance indicators utilized by management to assess results of operations:
Three Months Ended June 30,
Six Months Ended June 30,
($ in millions, except for basis points and percentages)
2026
2025
2026
2025
AUM at period end
$
342,450
$
298,563
$
342,450
$
298,563
Average AUM
331,345
284,977
325,045
229,383
Gross flows
22,424
15,731
41,606
25,217
AUM net short term flows
(91
)
(144
)
(288
)
(188
)
AUM net long term flows
4,201
(660
)
3,744
(1,865
)
AUM net flows
4,110
(804
)
3,456
(2,053
)
Total revenue
435.4
351.2
823.4
570.8
Revenue realization on average AUM
47.9 bps
49.4 bps
47.7 bps
50.1 bps
Net income
139.4
58.7
251.5
120.7
Adjusted EBITDA(1)
242.7
178.5
446.7
294.9
Adjusted EBITDA Margin(2)
55.8
%
50.8
%
54.3
%
51.7
%
Adjusted Net Income(1)
172.2
122.5
314.8
200.5
Tax benefit of goodwill and acquired intangibles(3)
10.7
10.3
21.2
20.4
Adjusted net income with tax benefit per diluted share(4)
$
2.21
$
1.57
$
4.02
$
2.96
(1)
Management utilizes Adjusted EBITDA and Adjusted Net Income to measure the operating profitability of the business. These measures eliminate the impact of one‑time acquisition, restructuring and integration costs and demonstrate the ongoing operating earnings metrics of the business. These measures are explained in more detail and reconciled to net income calculated in accordance with GAAP in “Supplemental Non‑GAAP Financial Information.”
(2)
Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of total revenue.
(3)
Represents the tax benefits associated with deductions allowed for intangibles and goodwill generated from prior acquisitions in which we received a step-up in basis for tax purposes. Acquired intangible assets and goodwill may be amortized for tax purposes, generally over a 15-year period. The tax benefit from amortization on these assets is included to show the full economic benefit of deductions for all acquired intangibles with a step-up in tax basis. Due to our acquisitive nature, tax deductions allowed on acquired intangible assets and goodwill provide us with a significant supplemental economic benefit.
(4)
The Company includes participating securities in its computation of adjusted earnings per diluted share, including shares of series A Non-Voting Convertible Preferred stock for the three and six months ended June 30, 2026 and 2025.
The following table presents a reconciliation of our total client assets(1) as of the dates indicated:
Three Months Ended June 30,
Six Months Ended June 30,
(in millions)
2026
2025
2026
2025
Beginning AUM
$
309,835
$
167,468
$
313,775
$
171,930
Beginning other assets
3,268
3,967
2,846
4,165
Beginning total client assets
313,103
171,435
316,621
176,096
AUM net cash flows
4,110
(804
)
3,456
(2,053
)
Other assets net cash flows
—
(1,170
)
390
(1,446
)
Total client assets net cash flows
4,110
(1,973
)
3,846
(3,499
)
AUM market appreciation (depreciation)
28,510
20,247
25,713
17,075
Other assets market appreciation (depreciation)
343
253
375
331
Total client assets market appreciation (depreciation)
28,853
20,500
26,089
17,406
AUM realizations and distributions
(5
)
(3
)
(461
)
(24
)
Acquired & divested assets / Net transfers(2)
—
111,654
(33
)
111,634
Ending AUM
342,450
298,563
342,450
298,563
Ending other assets
3,611
3,050
3,611
3,050
Ending total client assets
346,061
301,613
346,061
301,613
Average total client assets
334,856
288,568
328,320
233,209
(1)
Includes low-fee (2 to 4 bps) institutional assets, previously reported in the Solutions asset class within the by asset class table and in Separate Accounts and Other Pooled Vehicles within the by vehicle table. These assets are included as part of Victory’s Regulatory Assets Under Management reported in Form ADV Part 1.
(2)
Includes the impact of Pioneer Investments as of April 1, 2025, increasing the Company's AUM by $114.6 billion.
The following table presents a reconciliation of our total AUM(1) as of the dates indicated:
Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.
(2)
Includes the impact of Pioneer Investments as of April 1, 2025, increasing the Company's AUM by $114.6 billion.
The following table presents a reconciliation of our other assets (institutional)(1) as of the dates indicated:
Three Months Ended June 30,
Six Months Ended June 30,
(in millions)
2026
2025
2026
2025
Beginning other assets (institutional)
$
3,268
$
3,967
$
2,846
$
4,165
Gross client cash inflows
—
—
627
—
Gross client cash outflows
—
(1,170
)
(237
)
(1,446
)
Net client cash flows
—
(1,170
)
390
(1,446
)
Market appreciation (depreciation)
343
253
375
331
Realizations and distributions
—
—
—
—
Acquired & divested assets / Net transfers
—
—
—
—
Ending other assets (institutional)
3,611
3,050
3,611
3,050
Average other assets (institutional)
3,511
3,591
3,275
3,826
(1)
Includes low-fee (2 to 4 bps) institutional assets, previously reported in the Solutions asset class within the by asset class table and in Separate Accounts and Other Pooled Vehicles within the by vehicle table. These assets are included as part of Victory’s Regulatory Assets Under Management reported in Form ADV Part 1.
Assets Under Management
Our profitability is largely affected by the level and composition of our AUM (including asset class and distribution channel) and the effective fee rates on our products. The amount and composition of our AUM are, and will continue to be, influenced by a number of factors, including; (i) investment performance, including fluctuations in the financial markets and the quality of our investment decisions; (ii) client flows into and out of our various strategies and investment vehicles; (iii) industry trends toward products or strategies that we either do or do not offer; (iv) our ability to attract and retain high quality investment, distribution, marketing and management personnel; (v) our decision to close strategies or limit growth of assets in a strategy when we believe it is in the best interest of our clients or conversely to re‑open strategies in part or entirely; and (vi) general investor sentiment and confidence. Our goal is to establish and maintain a client base that is diversified by Franchise and Solutions, asset class, distribution channel and vehicle. Due to rounding, AUM numbers presented in the tables below may not add up precisely to the totals provided.
The following table presents our total AUM by asset class as of the dates indicated:
As of
June 30,
(in millions)
2026
2025
Solutions
$
105,641
$
79,988
U.S. Mid Cap Equity
31,285
31,643
Fixed Income
83,412
79,752
Global / Non-U.S. Equity
37,441
25,576
U.S. Small Cap Equity
11,331
13,140
U.S. Large Cap Equity
66,390
61,844
Alternative Investments
3,365
2,986
Total Long-Term Assets
$
338,864
$
294,930
Money Market & Short-Term Assets
3,585
3,633
Total AUM(1)
$
342,450
$
298,563
(1)
Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.
Includes institutional and retail share classes, money market and Variable Insurance Products or VIP funds.
(2)
Represents only ETF assets held by third parties. Excludes ETF assets held by other Victory Capital products.
(3)
Includes collective trust funds, wrap program accounts, UMAs, UCITS, private funds and non-U.S. domiciled pooled vehicles.
(4)
Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.
(5)
Includes the impact of Pioneer Investments as of April 1, 2025, increasing the Company's AUM by $114.6 billion.
June 30, 2026 AUM compared to March 31, 2026 AUM. At June 30, 2026, our total AUM was $342.5 billion, an increase of $32.6 billion, or 10.5%, from $309.8 billion at March 31, 2026, primarily due to positive market action of $28.5 billion and net inflows of $4.1 billion.
Net inflows were driven by our fixed income strategies, global non-U.S. equity strategies, Solutions platform, and alternative investments of $2.7 billion, $2.0 billion, $3.0 billion, $0.3 billion, respectively, partially offset by net outflows from our U.S. mid cap, U.S. small cap, and U.S. large cap equity strategies of $1.7 billion, $1.0 billion, and $1.0 billion, respectively.
June 30, 2026 AUM compared to December 31, 2025 AUM. At June 30, 2026, our total AUM was $342.5 billion, an increase of $28.7 billion, or 9.1%, from $313.8 billion at December 31, 2025, primarily due to positive market action of $25.7 billion and net inflows of $3.5 billion.
Net inflows were driven by our fixed income strategies, global non-U.S. equity strategies, Solutions platform, and alternatives investments of $2.1 billion, $2.9 billion, $5.8 billion, and $0.3 billion, respectively, partially offset by net outflows from our U.S. mid cap, U.S. small cap, and U.S. large cap equity strategies of $3.3 billion, $2.1 billion, and $1.9 billion, respectively.
Change in value of consideration payable for acquisition of business
5,578
4,498
1,080
24
%
Acquisition-related costs
7,005
34,530
(27,525
)
-80
%
Restructuring and integration costs
5,787
15,159
(9,372
)
-62
%
Total operating expenses
470,416
383,692
86,724
23
%
Income from operations
352,934
187,122
165,812
89
%
Other income (expense)
Interest income and other income
10,477
6,710
3,767
56
%
Interest expense and other financing costs
(26,273
)
(26,445
)
172
-1
%
Loss on debt extinguishment
(2,028
)
—
(2,028
)
-100
%
Total other expense, net
(17,824
)
(19,735
)
1,911
-10
%
Income before income taxes
335,110
167,387
167,723
100
%
Income tax expense
(83,566
)
(46,678
)
(36,888
)
79
%
Net income
$
251,544
$
120,709
$
130,835
108
%
Preferred stock dividends
(19,788
)
(9,673
)
Net income attributable to preferred stockholders
(40,743
)
(5,334
)
Net income attributable to common stockholders
$
191,013
$
105,702
81
%
Earnings per share of common stock
Basic
$
3.04
$
1.61
Diluted
$
3.01
$
1.59
Weighted average number of shares outstanding
Basic
62,889
65,484
Diluted
63,593
66,358
Dividends declared per share of common stock
$
0.99
$
0.96
Investment Management Fees
Three months ended June 30, 2026 compared to June 30, 2025. Investment management fees increased by $79.9 million, or 28.3%, to $362.2 million for the three months ended June 30, 2026 from $282.3 million for the same period in 2025 due to an increase in average AUM year over year. Average AUM was $331.3 billion for the three months ended June 30, 2026 compared to $285.0 billion for the same period in 2025.
Six months ended June 30, 2026 compared to June 30, 2025. Investment management fees increased by $223.0 million, or 48.9%, to $678.6 million for the six months ended June 30, 2026 from $455.6 million for the same period in 2025 due an
increase in average AUM. Average AUM was $325.0 billion for the six months ended June 30, 2026 compared to $229.4 billion for the same period in 2025.
Fund Administration and Distribution Fees
Three months ended June 30, 2026 compared to June 30, 2025. Fund administration and distribution fees increased by $4.2 million, or 6.1%, to $73.1 million for the three months ended June 30, 2026 from $68.9 million for the same period in 2025 primarily due to an increase in fund administration fees as a result of higher mutual fund average net assets.
Six months ended June 30, 2026 compared to June 30, 2025. Fund administration and distribution fees increased by $29.5 million, or 25.6%, to $144.7 million for the six months ended June 30, 2026 from $115.2 million for the same period in 2025 primarily due to the same factors discussed above in the quarterly section.
Personnel Compensation and Benefits
The following table presents the components of GAAP personnel compensation and benefits expense for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2026
2025
2026
2025
Salaries, payroll related taxes and employee benefits
$
39,267
$
41,408
$
77,942
$
63,153
Incentive compensation
55,692
38,116
99,382
61,783
Sales-based compensation(1)
10,071
10,612
21,798
17,832
Equity awards granted to employees and directors(2)
15,776
5,658
23,188
9,162
Acquisition and transaction-related compensation
4,694
13,124
9,045
13,124
Total personnel compensation and benefits expense
$
125,500
$
108,918
$
231,355
$
165,054
(1)
Represents sales-based commissions paid to our distribution teams. Sales-based compensation varies based on gross and net client cash flows and revenue earned on sales.
(2)
Equity awards typically vest over several years based on service and the achievement of specific business and financial targets. The value of the equity awards is recognized as compensation expense over the vesting period.
Three months ended June 30, 2026 compared to June 30, 2025. Personnel compensation and benefits were $125.5 million for the second quarter of 2026, an increase of $16.6 million, or 15.2%, from $108.9 million for the same period in 2025. Incentive compensation expense and equity awards granted to employees and directors increased $17.6 million and $10.1 million, respectively, primarily due to an increase in operating results. Salaries, payroll related taxes and employee benefits expense, sales-based compensation, and acquisition and transaction-related compensation decreased $2.1 million, $0.5 million, and $8.4 million.
Six months ended June 30, 2026 compared to June 30, 2025. Personnel compensation and benefits were $231.4 million for the six months ended June 30, 2026, an increase of $66.3 million, or 40.2%, from $165.1 million for the same period in 2025. Salaries, payroll related taxes and employee benefits expense, incentive compensation expense, sales-based compensation, and equity awards granted to employees and directors increased $14.8 million, $37.6 million, $4.0 million, and $14.0 million, respectively, primarily due to an expanded business and an increase in variable costs as a result of an increase in operating results. Acquisition and transaction-related compensation decreased $4.1 million due to a decrease in contingent payment compensation expense.
Distribution and Other Asset‑Based Expenses
The following table presents the components of distribution and other asset-based expenses for the three and six months ended June 30, 2026 and 2025:
Three months ended June 30, 2026 compared to June 30, 2025. Distribution and other asset-based expenses were $68.6 million for the three months ended June 30, 2026, compared to $62.0 million for the same period in 2025. The increase of $6.6 million, or 10.6% was primarily due to higher broker-dealer and platform distribution fees over the comparable period as a result of higher average AUM and an expanded business.
Six months ended June 30, 2026 compared to June 30, 2025. Distribution and other asset-based expenses were $136.0 million for the six months ended June 30, 2026, compared to $97.5 million for the same period in 2025. The increase of $38.5 million, or 39.5% was primarily due to higher broker-dealer and platform distribution fees over the comparable period as a result of higher average AUM and an expanded business.
General and Administrative
Three months ended June 30, 2026 compared to June 30, 2025. General and administrative expenses were $22.9 million for the three months ended June 30, 2026 compared to $23.4 million for the same period in 2025. The decrease of $0.5 million, or 2.0%, was primarily due to decreases in facilities and technology related expenses partially offset by increases in travel and entertainment costs and professional fees.
Six months ended June 30, 2026 compared to June 30, 2025. General and administrative expenses were $43.5 million for the six months ended June 30, 2026 compared to $37.7 million for the same period in 2025. The increase of $5.8 million, or 15.4%, was primarily due to increases in professional fees and technology related expenses.
Depreciation and Amortization
Three months ended June 30, 2026 compared to June 30, 2025. Depreciation and amortization decreased $1.2 million, or 5.5%, to $20.6 million for the three months ended June 30, 2026 from $21.8 million for the same period in 2025, primarily due to a decrease in depreciation expense related to information technology equipment.
Six months ended June 30, 2026 compared to June 30, 2025. Depreciation and amortization increased $11.9 million, or 40.8%, to $41.2 million for the six months ended June 30, 2026 from $29.2 million for the same period in 2025, primarily due to six months worth of amortization expense of definite-lived intangible assets associated with the Amundi US acquisition in 2026 compared with three months worth of amortization expense of definite-lived intangible assets associated with Amundi US acquisition in 2025.
Change in Value of Consideration Payable for Acquisition of Business
Three months ended June 30, 2026 compared to June 30, 2025. The change in value of consideration payable for acquisition of business increased $0.9 million as a result of an increase of $2.0 million in the fair value of contingent consideration associated with the WestEnd Acquisition for the three months ended June 30, 2026 compared to an increase of $1.1 million for the three months ended June 30, 2025. Refer to Note 3, Acquisitions, for further details on the fair value of contingent consideration payable.
Six months ended June 30, 2026 compared to June 30, 2025. The change in value of consideration payable for acquisition of business increased $1.1 million as a result of an increase of $5.6 million in the fair value of contingent consideration associated with the WestEnd Acquisition for the six months ended June 30, 2026 compared to an increase of $4.5 million for the six months ended June 30, 2025. Refer to Note 3, Acquisitions, for further details on the fair value of contingent consideration payable.
Acquisition‑Related Costs
Three months ended June 30, 2026 compared to June 30, 2025. Acquisition-related costs was income of $0.7 million for the three months ended June 30, 2026, compared to expense of $25.8 million for the same period in 2025. The decrease of $26.4 million was due to a decrease in legal and professional fees.
Six months ended June 30, 2026 compared to June 30, 2025. Acquisition-related costs were $7.0 million for the six months ended June 30, 2026, compared to $34.5 million for the same period in 2025. The decrease of $27.5 million was due to the same factors discussed in the quarterly section.
Restructuring and Integration Costs
Three months ended June 30, 2026 compared to June 30, 2025. Restructuring and integration costs for the three months ended June 30, 2026 and 2025 were $2.6 million and $14.0 million, respectively. Restructuring and integration costs for the three months ended June 30, 2026 and 2025 were primarily due to integration and conversions related costs associated with the Amundi US acquisition.
Six months ended June 30, 2026 compared to June 30, 2025. Restructuring and integration costs for the six months ended June 30, 2026 and 2025 were $5.8 million and $15.2 million, respectively. The decrease of $9.4 million was due to a decrease in costs associated with the Amundi US acquisition.
Interest Income and Other Income (Expense)
Three months ended June 30, 2026 compared to June 30, 2025. Interest income and other income/(expense) was income of $7.7 million and $6.0 million for the three months ended June 30, 2026 and 2025, respectively. The increase is primarily due to an increase in the net unrealized fair value of deferred compensation plan investments over the comparable period.
Six months ended June 30, 2026 compared to June 30, 2025. Interest income and other income/(expense) was income of $10.5 million and $6.7 million for the six months ended June 30, 2026 and 2025, respectively. The increase is due to the same factors discussed in the quarterly section.
Interest Expense and Other Financing Costs
Three months ended June 30, 2026 compared to June 30, 2025. Interest expense and other financing costs decreased $1.0 million to $12.2 million for the three months ended June 30, 2026, compared to $13.2 million for the same period in 2025 due a decrease in the average interest rate, partially offset by a decrease in the deferred gain on the termination of the Swap. Refer to Note 10, Debt, and Note 13, Derivatives, for further details.
Six months ended June 30, 2026 compared to June 30, 2025. Interest expense and other financing costs were relatively flat, decreasing $0.2 million to $26.3 million for the six months ended June 30, 2026, compared to $26.4 million for the same period in 2025.
Loss on Debt Extinguishment
Three months ended June 30, 2026 compared to June 30, 2025. For the three months ended June 30, 2026, loss on debt extinguishment was $2.0 million and related to the write-off of unamortized debt issuance costs and unamortized debt discount as a result of debt refinancing. For the three months ended June 30, 2025, the Company had no losses on debt extinguishment. Refer to Note 10, Debt, for further details.
Six months ended June 30, 2026 compared to June 30, 2025. For the six months ended June 30, 2026, loss on debt extinguishment was $2.0 million and was due to the same factors discussed in the quarterly section. For the six months ended June 30, 2025, the Company had no losses on debt extinguishment. Refer to Note 10, Debt, for further details.
Income Tax Expense
Three months ended June 30, 2026 compared to June 30, 2025. The effective tax rate for the three months ended June 30, 2026 and 2025 was 25.6% and 32.5%, respectively. The higher effective tax rate in 2025 is mainly due to an increase in non-deductible expenses, which was primarily driven by $27.3 million of gross non-deductible transaction costs that were incurred related to the Amundi US acquisition in 2025.
Six months ended June 30, 2026 compared to June 30, 2025. The effective tax rate for the six months ended June 30, 2026 and 2025 was 24.9% and 27.9%, respectively. The year-over-year decrease in the effective tax rate primarily due to the same factors discussed in the quarterly section.
Supplemental Non‑GAAP Financial Information
We use non-GAAP performance measures to evaluate the underlying operations of our business. Due to our acquisitive nature, there are a number of acquisition and restructuring related expenses included in GAAP measures that we believe distort the economic value of our organization and we believe that many investors use this information when assessing the financial performance of companies in the investment management industry. We have included these non-GAAP measures to provide investors with the same financial metrics used by management to assess the operating performance of our Company. The non-GAAP measures we report are "Adjusted EBITDA" and "Adjusted Net Income."
The following table sets forth a reconciliation from GAAP financial measures to non-GAAP measures for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2026
2025
2026
2025
Reconciliation of non-GAAP financial measures:
Net income (GAAP)
$
139,404
$
58,734
$
251,544
$
120,709
Income tax expense
(47,846
)
(28,252
)
(83,566
)
(46,678
)
Income before income taxes
$
187,250
$
86,986
$
335,110
$
167,387
Interest expense(1)
12,283
12,200
25,941
24,721
Depreciation(2)
2,288
3,236
4,567
5,404
Other business taxes(3)
431
693
(124
)
1,615
Amortization of acquisition-related intangible assets(4)
18,297
18,558
36,594
23,822
Share-based compensation(5)
10,835
2,107
14,421
3,160
Acquisition, restructuring and exit costs(6)
8,716
53,990
27,415
67,311
Debt issuance costs(7)
2,617
755
2,813
1,504
Adjusted EBITDA
$
242,717
$
178,525
$
446,737
$
294,924
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2026
2025
2026
2025
Reconciliation of non-GAAP financial measures:
Net income (GAAP)
$
139,404
$
58,734
$
251,544
$
120,709
Adjustments to reflect the operating performance of the Company:
i. Other business taxes(3)
431
693
(124
)
1,615
ii. Amortization of acquisition-related intangible assets(4)
18,297
18,558
36,594
23,822
iii. Share-based compensation(5)
10,835
2,107
14,421
3,160
iv. Acquisition, restructuring and exit costs(6)
8,716
53,990
27,415
67,311
v. Debt issuance costs(7)
2,617
755
2,813
1,504
Tax effect of above adjustments(8)
(8,142
)
(12,330
)
(17,825
)
(17,657
)
Adjusted Net Income
$
172,158
$
122,507
$
314,838
$
200,464
Tax benefit of goodwill and acquired intangibles(9)
$
10,716
$
10,255
$
21,231
$
20,396
Weighted average number of shares outstanding - diluted (GAAP)
62,782
67,980
63,593
66,358
Weighted average number of shares outstanding - diluted (Non-GAAP)(10)
82,818
84,801
83,587
74,723
Adjusted net income with tax benefit per diluted share
$
2.21
$
1.57
$
4.02
$
2.96
Adjustments made to GAAP Net Income to calculate Adjusted EBITDA and Adjusted Net Income, as applicable, are:
(1)
Adding back interest paid on debt and other financing costs, net of interest income.
(2)
Adding back depreciation on property and equipment.
(3)
Adding back other business taxes.
(4)
Adding back amortization expense on acquisition‑related intangible assets.
(5)
Adding back share-based compensation associated with equity awards in connection with acquisitions and certain one-time performance-based shares.
(6)
Adding back direct incremental costs of acquisitions, including restructuring costs. The following table presents the components of acquisition, restructuring and exit costs for the periods indicated:
Change in value of consideration payable for acquisition of business
2,041
1,092
5,578
4,498
Personnel compensation and benefits
4,694
13,124
9,045
13,124
Total acquisition, restructuring and exit costs
$
8,716
$
53,990
$
27,415
$
67,311
(7)
Adding back debt issuance costs.
(8)
Subtracting an estimate of income tax expense applied to the sum of the adjustments above.
(9)
Represents the tax benefits associated with deductions allowed for intangible assets and goodwill generated from prior acquisitions in which we received a step-up in basis for tax purposes. Acquired intangible assets and goodwill may be amortized for tax purposes, generally over a 15-year period. The tax benefit from amortization on these assets is included to show the full economic benefit of deductions for all acquired intangible assets with a step-up in tax basis. Due to our acquisitive nature, tax deductions allowed on acquired intangible assets and goodwill provide us with a significant supplemental economic benefit.
(10)
The Company includes participating securities in its computation of adjusted earnings per diluted share, including shares of series A Non-Voting Convertible Preferred stock for the three and six months ended June 30, 2026 and 2025.
Non-GAAP measures should be considered in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. Our non-GAAP measures may differ from similar measures at other companies, even if similar terms are used to identify these measures.
Liquidity and Capital Resources
Our primary uses of cash relate to repayment of our debt obligations, funding of acquisitions and working capital needs, repurchasing of shares and payment of dividends, which are all expected to be met through cash generated from our operations and available capital resources.
The following table shows our liquidity position as of June 30, 2026 and December 31, 2025.
June 30,
December 31,
(in thousands)
2026
2025
Cash and cash equivalents
$
70,126
$
163,690
Accounts and other receivables
244,330
181,141
Undrawn commitment on credit facility
100,000
100,000
Accounts and other payables
(163,024
)
(158,742
)
We manage our cash balances in order to fund our day-to-day operations. Our accounts receivable consists primarily of investment management fees that have been earned but not yet received from clients, income and other taxes receivable, and amounts receivable from the funds. We perform a review of our receivables on a monthly basis to assess collectability. We maintained a $100.0 million revolving credit facility at June 30, 2026 and December 31, 2025 (under the 2019 Credit Agreement) which had approximately $100.0 million undrawn as of June 30, 2026 and December 31, 2025.
2019 Credit Agreement
Since 2019, the Company is a party to a credit agreement (the "2019 Credit Agreement"), which includes both a revolving credit facility (the “Revolving Facility”) with aggregate commitments of $100.0 million (with a $10.0 million sub-limit for the issuance of letters of credit) and a term loan with an aggregate principal amount of $985.0 million (the “Existing Term Loans”). The Revolving Facility matures on September 23, 2030 and the Existing Term Loans mature on September 23, 2032.
On May 18, 2026, pursuant to the Seventh Amendment of the 2019 Credit Agreement, the Company refinanced its Existing Term Loans with repriced term loans (the "Repriced Term Loans") which will bear interest at an annual rate equal to, at the option of the Company, either SOFR plus a margin of 1.75% or an alternate base rate plus a margin of 0.75%. The Repriced Term Loans otherwise remain subject to substantially similar terms to those that were applicable to the Existing Term Loans.
The Company elects to use three-month Term SOFR plus a margin of 1.75% required by the 2019 Credit Agreement to pay interest on its debt.
The 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding
borrowings under the revolving credit facility exceed 35.0% of the commitments thereunder (excluding certain letters of credit), of no greater than 4.00 to 1.00. As of June 30, 2026 and December 31, 2025, there were no outstanding borrowings under the revolving credit facility and the Company was in compliance with its financial performance covenant.
Pursuant to ASC 470-50, Debt - Modifications and Extinguishments, the Company evaluated the Repriced Term Loans on a lender-by-lender basis and accounted accordingly for debt extinguishment costs and debt modification costs (for the portion of the transaction that did not meet the accounting criteria for debt extinguishment). On the unaudited Condensed Consolidated Statement of Cash Flows, the financing cash outflows and inflows associated with this transaction were determined on a lender-by-lender basis and repayments during the three and six months ended June 30, 2026 totaled $306.6 million. During the three and six months ended June 2026, the Company incurred costs of $2.4 million related to the Seventh Amendment, of which $2.0 million was recorded as a loss on debt extinguishment and $0.4 million was recognized as general and administrative expense in the unaudited Condensed Consolidated Statement of Operations. The Company repaid an additional $2.5 million and $4.9 million of the outstanding term loans under the 2019 Credit Agreement during the three and six months ended June 30, 2026, respectively.
There were no repayments of outstanding term loans under the 2019 Credit Agreement during the three and six months ended June 30, 2025.
Contingent Consideration
At June 30, 2026, the Company had $53.2 million in contingent consideration that is estimated to be payable over the next year resulting from the WestEnd Acquisition. For the three and six months ended June 30, 2026, the Company recorded an increase of $2.0 million and $5.6 million, respectively, in the contingent payment liability associated with the WestEnd Acquisition, which is included in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets. At June 30, 2026, the estimated fair value of the WestEnd Acquisition contingent payments was $53.2 million, and a maximum of $80.0 million in contingent consideration is potentially payable to sellers.
There were no other significant changes to our contractual obligations as reported in our 2025 Annual Report.
Capital Requirements
Victory Capital Services is a registered broker-dealer subject to the Uniform Net Capital requirements under the Exchange Act, which requires maintenance of certain minimum net capital levels. In addition, we have certain non-U.S. subsidiaries that have minimum capital requirements. As a result, such subsidiaries of our Company may be restricted in their ability to transfer cash to their parents.
Cash Flows
The following table is derived from our unaudited Condensed Consolidated Statements of Cash Flows:
Six Months Ended June 30,
(in thousands)
2026
2025
Net cash provided by operating activities
$
256,379
$
74,502
Net cash used in investing activities
13,567
78,116
Net cash used in financing activities
(363,448
)
(171,979
)
Operating Activities – Cash provided by operating activities during the six months ended June 30, 2026 was $256.4 million, compared to $74.5 million of cash provided by operating activities for the same period in 2025. The $181.9 million increase in cash provided by operating activities was primarily due to increases of $130.8 million in net income, $32.5 million in non-cash items, and $18.6 million in working capital.
Investing Activities – Cash provided by investing activities during the six months ended June 30, 2026 was $13.6 million and consisted of net trading activity of $15.7 million offset by $2.1 million of property and equipment purchases. The nature of our trading activities is further described in Note 2, Significant Accounting Policies, to the consolidated financial statements included in our 2025 Annual Report.
Financing Activities – Cash used in financing activities during the six months ended June 30, 2026 was $363.4 million, compared to $172.0 million of cash used in financing activities for the same period in 2025. The $191.4 million increase was primarily due to higher activity and cash utilized for repurchases of common stock, net activity related to stock-based equity awards, payment of dividends, and net activity related to long-term debt of $192.3 million, $8.7 million, $9.0 million, and $5.0 million, respectively, partially offset by a $23.8 million decrease in payment of consideration for acquisition.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market Risk
Substantially all of our revenues are derived from investment management, fund administration and distribution fees, which are primarily based on the market value of our AUM. Accordingly, our revenues and net income may decline as a result of our AUM decreasing due to depreciation of our investment portfolios. In addition, such depreciation could cause our clients to withdraw their assets in favor of other investment alternatives that they perceive to offer higher returns or lower risk, which could cause our revenues and net income to decline further.
The value of our AUM was approximately $342 billion at June 30, 2026. The following table summarizes the annualized impact to revenue of a 10% increase or decrease in the value of our AUM when applied to the strategies, products and client relationships shown below:
Impact to Revenue of 10% change (in millions)
Weighted-Average fee rate for the three months ended June 30, 2026
Total Victory
$
164.2
48 basis points
Victory Funds
112.2
62 basis points
Separate Accounts and Other Pooled Vehicles
45.7
32 basis points
Exchange Rate Risk
A portion of the accounts that we advise hold investments that are denominated in currencies other than the U.S. dollar. Assuming 10% of our AUM are invested in securities denominated in currencies other than the U.S. dollar and excluding the impact of any hedging arrangement, a 10% increase or decrease in the value of the U.S. dollar would increase or decrease the fair value of our AUM by approximately $3.7 billion, which would cause an annualized increase or decrease in revenues of approximately $17.9 million.
Interest Rate Risk
At June 30, 2026, we were exposed to interest rate risk as a result of the amounts outstanding under the 2019 Credit Agreement, as amended. Refer to Note 10, Debt, for a description of the amounts outstanding as of such date and the applicable interest rate.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate, to allow for timely decisions regarding required disclosure.
Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) at June 30, 2026. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. The Company is not currently a party to any material legal proceedings.
Item 1A. Risk Factors
For a discussion of our potential risks and uncertainties, see the risk factors previously disclosed in our 2025 Annual Report as filed with the SEC and the information contained in this report. The declaration, payment and determination of the amount of our quarterly dividends may change at any time. In making decisions regarding our quarterly dividends, we consider general economic and business conditions, our strategic plans and prospects, our businesses and investment opportunities, our financial condition and operating results, working capital requirements and anticipated cash needs, contractual restrictions (including under the terms of our 2019 Credit Agreement as amended) and legal, tax, regulatory and such other factors as we may deem relevant. There have been no material changes to the risk factors in our 2025 Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) Issuer purchases of equity securities.
The following table sets out information regarding purchases of equity securities by the Company for the three months ended June 30, 2026.
Period
Total Number of Shares of Common Stock Purchased (1)
Average Price Paid Per Share of Common Stock
Total Number of Shares of Common Stock Purchased as Part of Publicly Announced Plans or Programs (2)
Approximate Dollar Value That May Yet Be Purchased Under Outstanding Plans or Programs (in millions) (2)
Apr 1-30, 2026
84,951
$
72.01
58,600
$
178.7
May 1-31, 2026
626,377
86.40
626,377
119.2
Jun 1-30, 2026
437,451
85.62
394,210
85.5
Total
1,148,779
$
85.00
1,079,187
(1)
Includes shares surrendered for taxes related to stock option exercises and vesting of restricted stock awards.
(2)
In December 2024, the Company’s Board of Directors approved a new share repurchase program (the “2025 Share Repurchase Program”) authorizing the repurchase of up to $200.0 million of the Company’s Common Stock through December 31, 2026. On August 7, 2025, the Board authorized an increase in the 2025 Share Repurchase Program from $200.0 million to up to $500.0 million through December 31, 2027. Under the 2025 Share Repurchase Program, the Company may purchase its shares from time to time in privately negotiated transactions, through block trades, pursuant to open market purchases, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC. The amount and timing of purchases under the 2025 Share Repurchase Program will depend on a number of factors including the price and availability of the Company’s shares, trading volume, capital availability, Company performance and general economic and market conditions. The 2025 Share Repurchase Program can be suspended or discontinued at any time.
None of the Company’s directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended June 30, 2026, as such terms are defined under Item 408(a) of Regulation S-K.
The following information formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, (ii) Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025, (iii) Unaudited Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025, (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025, (v) Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2026 and 2025 and the three months ended June 30, 2026 and 2025; (vi) Notes to Unaudited Condensed Consolidated Financial Statements for the six months ended June 30, 2026 and 2025.
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 6th day of August, 2026.
VICTORY CAPITAL HOLDINGS, INC.
By:
/s/ MICHAEL D. POLICARPO
Name:
Michael D. Policarpo
Title:
President, Chief Financial Officer and Chief Administrative Officer
