← Back to VCTR filing summaryOriginal filing text · Part I
Item 2 — Management's Discussion and Analysis
Victory Capital Holdings, Inc. · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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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.
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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 $220.9 million for the same period in 2025. Refer to “Supplemental Non-GAAP Financial Information” for further information about the Adjusted Net Income calculation and reconciliation of GAAP net income to Adjusted Net Income.
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Key Performance Indicators
The following table is a summary of key performance indicators utilized by management to assess results of operations:
Three Months Ended June 30, Six Months Ended June 30,
($ 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.
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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:
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
Gross client cash inflows 22,424 15,731 41,606 25,217
Gross client cash outflows (18,314 ) (16,534 ) (38,150 ) (27,270 )
Net client cash flows 4,110 (804 ) 3,456 (2,053 )
Market appreciation (depreciation) 28,510 20,247 25,713 17,075
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
Average AUM 331,345 284,977 325,045 229,383
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(1)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.
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The following tables summarize our total AUM asset flows by asset class for the periods indicated:
U.S. Mid U.S. Small U.S. Large Global / Money
Cap Cap Fixed Cap Non-U.S. Alternative Total Market /
(in millions) Equity Equity Income Equity Equity Solutions Investments Long-term Short-term Total AUM(1)
For the Three Months Ended June 30, 2026
Beginning AUM $ 29,283 $ 10,535 $ 79,716 $ 59,798 $ 31,473 $ 92,396 $ 3,033 $ 306,235 $ 3,599 $ 309,835
Gross client cash inflows 571 286 8,305 1,894 3,879 6,740 439 22,113 311 22,424
Gross client cash outflows (2,274 ) (1,302 ) (5,640 ) (2,917 ) (1,895 ) (3,718 ) (166 ) (17,913 ) (402 ) (18,314 )
Net client cash flows (1,703 ) (1,016 ) 2,666 (1,023 ) 1,984 3,022 272 4,201 (91 ) 4,110
Market appreciation / (depreciation) 3,709 1,815 999 7,636 4,006 10,250 65 28,480 30 28,510
Realizations and distributions — — — — — — (5 ) (5 ) — (5 )
Acquired & divested assets / Net transfers (4 ) (3 ) 31 (21 ) (22 ) (28 ) (1 ) (47 ) 47 —
Ending AUM $ 31,285 $ 11,331 $ 83,412 $ 66,390 $ 37,441 $ 105,641 $ 3,365 $ 338,864 $ 3,585 $ 342,450
For the Three Months Ended June 30, 2025
Beginning AUM $ 28,964 $ 13,182 $ 24,157 $ 13,104 $ 18,334 $ 63,378 $ 2,945 $ 164,064 $ 3,404 $ 167,468
Gross client cash inflows 850 457 6,014 2,266 1,520 4,093 222 15,423 308 15,731
Gross client cash outflows (1,597 ) (740 ) (6,012 ) (3,385 ) (1,373 ) (2,742 ) (233 ) (16,083 ) (451 ) (16,534 )
Net client cash flows (748 ) (284 ) 2 (1,118 ) 147 1,351 (11 ) (660 ) (144 ) (804 )
Market appreciation / (depreciation) 1,233 385 1,172 7,482 3,263 6,620 55 20,210 37 20,247
Realizations and distributions — — — — — — (3 ) (3 ) — (3 )
Acquired & divested assets / Net transfers(2) 2,194 (143 ) 54,420 42,376 3,833 8,639 — 111,318 335 111,654
Ending AUM $ 31,643 $ 13,140 $ 79,752 $ 61,844 $ 25,576 $ 79,988 $ 2,986 $ 294,930 $ 3,633 $ 298,563
(1)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.
U.S. Mid U.S. Small U.S. Large Global / Money
Cap Cap Fixed Cap Non-U.S. Alternative Total Market /
(in millions) Equity Equity Income Equity Equity Solutions Investments Long-term Short-term Total AUM(1)
Six Months Ended June 30, 2026
Beginning AUM $ 29,993 $ 11,179 $ 80,544 $ 63,380 $ 30,680 $ 91,228 $ 3,038 $ 310,042 $ 3,733 $ 313,775
Gross client cash inflows 1,347 536 13,375 4,951 6,668 13,458 726 41,060 546 41,606
Gross client cash outflows (4,693 ) (2,631 ) (11,278 ) (6,873 ) (3,725 ) (7,678 ) (437 ) (37,316 ) (834 ) (38,150 )
Net client cash flows (3,346 ) (2,095 ) 2,096 (1,922 ) 2,943 5,780 289 3,744 (288 ) 3,456
Market appreciation / (depreciation) 4,651 2,253 986 5,004 3,866 8,656 236 25,651 62 25,713
Realizations and distributions — — (266 ) — — — (195 ) (461 ) — (461 )
Acquired & divested assets / Net transfers (13 ) (5 ) 52 (72 ) (48 ) (23 ) (2 ) (112 ) 79 (33 )
Ending AUM $ 31,285 $ 11,331 $ 83,412 $ 66,390 $ 37,441 $ 105,641 $ 3,365 $ 338,864 $ 3,585 $ 342,450
Six Months Ended June 30, 2025
Beginning AUM $ 30,584 $ 14,785 $ 24,402 $ 14,148 $ 19,095 $ 62,593 $ 2,980 $ 168,586 $ 3,344 $ 171,930
Gross client cash inflows 1,947 902 6,943 2,349 3,656 8,456 478 24,732 485 25,217
Gross client cash outflows (3,331 ) (1,587 ) (7,557 ) (3,854 ) (4,623 ) (5,060 ) (585 ) (26,597 ) (673 ) (27,270 )
Net client cash flows (1,383 ) (685 ) (614 ) (1,505 ) (967 ) 3,396 (107 ) (1,865 ) (188 ) (2,053 )
Market appreciation / (depreciation) 254 (809 ) 1,500 6,852 3,659 5,417 134 17,008 67 17,075
Realizations and distributions — — — — — — (24 ) (24 ) — (24 )
Acquired & divested assets / Net transfers(2) 2,188 (150 ) 54,464 42,349 3,789 8,582 2 111,224 410 111,634
Ending AUM $ 31,643 $ 13,140 $ 79,752 $ 61,844 $ 25,576 $ 79,988 $ 2,986 $ 294,930 $ 3,633 $ 298,563
(1)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.
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The following table presents our total AUM by distribution channel as of the dates indicated:
As of June 30,
2026 2025
(in millions) Amount % of total Amount % of total
Investor $ 65,138 19 % $ 61,568 21 %
Non-US 62,571 18 % 48,528 16 %
Institutional 87,421 26 % 77,371 26 %
Retail 127,320 37 % 111,096 37 %
Total AUM(1)(2) $ 342,450 100 % $ 298,563 100 %
(1)The allocation of AUM by distribution channel involves the use of estimates and the exercise of judgment.
(2)Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.
The following table presents our total AUM by region as of the dates indicated:
As of June 30,
2026 2025
(in millions) Amount % of total Amount % of total
U.S. $ 279,879 82 % $ 250,035 84 %
Non-U.S. 62,571 18 % 48,528 16 %
Total AUM(1) $ 342,450 100 % $ 298,563 100 %
(1)Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.
The following tables summarize our asset flows by vehicle for the periods indicated:
Separate
Accounts and
Other Pooled
(in millions) Mutual Funds(1) ETFs(2) Vehicles(3) Total AUM(4)
Three Months Ended June 30, 2026
Beginning AUM $ 167,775 $ 16,401 $ 125,659 $ 309,835
Gross client cash inflows 7,271 1,535 13,618 22,424
Gross client cash outflows (10,174 ) (341 ) (7,799 ) (18,314 )
Net client cash flows (2,903 ) 1,194 5,819 4,110
Market appreciation (depreciation) 15,849 1,576 11,084 28,510
Realizations and distributions — — (5 ) (5 )
Acquired & divested assets / Net transfers (25 ) — 25 —
Ending AUM $ 180,696 $ 19,171 $ 142,583 $ 342,450
Three Months Ended June 30, 2025
Beginning AUM $ 108,392 $ 10,253 $ 48,823 $ 167,468
Gross client cash inflows 6,935 1,568 7,227 15,731
Gross client cash outflows (9,716 ) (264 ) (6,554 ) (16,534 )
Net client cash flows (2,781 ) 1,305 672 (804 )
Market appreciation (depreciation) 11,465 319 8,463 20,247
Realizations and distributions — — (3 ) (3 )
Acquired & divested assets / Net transfers(5) 50,897 97 60,660 111,654
Ending AUM $ 167,973 $ 11,975 $ 118,615 $ 298,563
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Separate
Accounts and
Other Pooled
(in millions) Mutual Funds(1) ETFs(2) Vehicles(3) Total AUM(4)
Six Months Ended June 30, 2026
Beginning AUM $ 172,203 $ 15,049 $ 126,523 $ 313,775
Gross client cash inflows 15,065 3,305 23,236 41,606
Gross client cash outflows (21,547 ) (805 ) (15,797 ) (38,150 )
Net client cash flows (6,482 ) 2,500 7,439 3,456
Market appreciation (depreciation) 15,000 1,656 9,058 25,713
Realizations and distributions — — (461 ) (461 )
Acquired & divested assets / Net transfers (25 ) (33 ) 25 (33 )
Ending AUM $ 180,696 $ 19,171 $ 142,583 $ 342,450
Six Months Ended June 30, 2025
Beginning AUM $ 113,645 $ 7,508 $ 50,777 $ 171,930
Gross client cash inflows 10,258 4,630 10,329 25,217
Gross client cash outflows (16,044 ) (515 ) (10,710 ) (27,270 )
Net client cash flows (5,786 ) 4,115 (381 ) (2,053 )
Market appreciation (depreciation) 9,222 270 7,583 17,075
Realizations and distributions — — (24 ) (24 )
Acquired & divested assets / Net transfers(5) 50,892 82 60,660 111,634
Ending AUM $ 167,973 $ 11,975 $ 118,615 $ 298,563
(1)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.
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GAAP Results of Operations
The following table presents our GAAP results of operations for the three and six months ended June 30, 2026 and 2025.
Three Months Ended June 30, Change
(in thousands, except per share data) 2026 2025 $ %
Revenue
Investment management fees $ 362,243 $ 282,306 $ 79,937 28 %
Fund administration and distribution fees 73,118 68,906 4,212 6 %
Total revenue 435,361 351,212 84,149 24 %
Expenses
Personnel compensation and benefits 125,500 108,918 16,582 15 %
Distribution and other asset-based expenses 68,590 62,039 6,551 11 %
General and administrative 22,915 23,381 (466 ) -2 %
Depreciation and amortization 20,585 21,794 (1,209 ) -6 %
Change in value of consideration payable for acquisition of business 2,041 1,092 949 87 %
Acquisition-related costs (653 ) 25,780 (26,433 ) -103 %
Restructuring and integration costs 2,634 13,994 (11,360 ) -81 %
Total operating expenses 241,612 256,998 (15,386 ) -6 %
Income from operations 193,749 94,214 99,535 106 %
Other income (expense)
Interest income and other income 7,721 6,006 1,715 29 %
Interest expense and other financing costs (12,192 ) (13,234 ) 1,042 -8 %
Loss on debt extinguishment (2,028 ) — (2,028 ) -100 %
Total other expense, net (6,499 ) (7,228 ) 729 -10 %
Income before income taxes 187,250 86,986 100,264 115 %
Income tax expense (47,846 ) (28,252 ) (19,594 ) 69 %
Net income $ 139,404 $ 58,734 $ 80,670 137 %
Preferred stock dividends (10,018 ) (9,673 )
Net income attributable to preferred stockholders (23,969 ) (2,985 )
Net income attributable to common stockholders $ 105,417 $ 46,076 129 %
Earnings per share of common stock
Basic $ 1.70 $ 0.69
Diluted $ 1.68 $ 0.68
Weighted average number of shares outstanding
Basic 62,151 67,239
Diluted 62,782 67,980
Dividends declared per share of common stock $ 0.50 $ 0.49
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Six Months Ended June 30, Change
(in thousands, except per share data) 2026 2025 $ %
Revenue
Investment management fees $ 678,612 $ 455,607 $ 223,005 49 %
Fund administration and distribution fees 144,738 115,207 29,531 26 %
Total revenue 823,350 570,814 252,536 44 %
Expenses
Personnel compensation and benefits 231,355 165,054 66,301 40 %
Distribution and other asset-based expenses 136,000 97,516 38,484 39 %
General and administrative 43,530 37,709 5,821 15 %
Depreciation and amortization 41,161 29,226 11,935 41 %
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
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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:
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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
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.
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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."
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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:
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Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2026 2025 2026 2025
Acquisition-related costs $ (653 ) $ 25,780 $ 7,005 $ 34,530
Restructuring and integration costs 2,634 13,994 5,787 15,159
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
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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.
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