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    VCTR
    Earnings call· Mar 2026(Q1 FY26)

    Victory Capital Holdings Q1 FY26 earnings call VCTR

    May 7, 2026 Source

    Executive summary

    Victory Capital Q1 FY26 — Record Gross Flows, EBITDA, and EPS

    Victory Capital delivered an exceptional Q1 FY26, achieving new records in long-term gross flows, adjusted EBITDA, and adjusted EPS, driven by strategic investments and the successful integration of the Pioneer acquisition. The firm continues to expand its ETF and international distribution platforms, while maintaining a strong capital allocation strategy focused on accretive acquisitions and opportunistic share repurchases.

    Highlights

    5

    • Achieved record long-term gross flows of $18.9 billion, up 11% QoQ and 104% YoY.

    • Reported record adjusted EBITDA of $204 million, with a strong 52.6% margin.

    • Delivered record adjusted earnings per diluted share (with tax benefit) of $1.82, a 34% increase YoY.

    • Repurchased a quarterly record of 2 million shares, contributing to $185 million returned to shareholders (including dividends).

    • VictoryShares ETF AUM grew 7% QoQ to over $20 billion, and 53% YoY.

    Concerns

    1

    • Long-term net flows remained negative at $457 million, despite meaningful improvement.

    Guidance & targets

    3
    CategoryTargetConfidence
    Average fee rate
    46 to 47 basis point range
    medium materiality
    High
    Cash compensation as percentage of revenue
    low to mid-20s
    medium materiality
    High
    Pioneer acquisition net expense synergies
    $110 million
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    International
    The international channel continues to gain traction and was net flow positive in the quarter and since the Pioneer acquisition.
    AUM: $55 billionCountries with clients: 60Countries with >$100M AUM: 29Net flows: Positive in Q1 FY26 and since Pioneer acquisition
    		————
    VictoryShares ETF platform
    The ETF platform continues to be a significant growth engine, with strong AUM growth and consistent net flows.
    AUM: >$20 billionNet flows: $1.3 billion
    		—53%7%—
    Pioneer Investments franchise
    The Pioneer Investments franchise has been net flow positive since the acquisition, indicating successful integration and product offerings.
    Net flows: Positive since acquisition
    		————

    Operational metrics

    32
    Total Client Assets (AUM)
    $313 billionslightly below record year-end level
    Q1 FY26

    Total client assets at the end of March.

    Long-term gross flows
    $18.9 billionup 11% QoQ, 104% YoY
    Q1 FY26

    Reflects momentum in U.S. distribution, international channels, and ETF platform.

    Long-term net flows
    -$457 millionimproved meaningfully
    Q1 FY26

    Multiple investment franchises and VictoryShares ETFs contributed positive net flows.

    Adjusted EBITDA
    $204 millionrecord
    Q1 FY26

    Reflects the resilience of the operating model.

    Adjusted EBITDA margin
    52.6%
    Q1 FY26

    Demonstrates consistency through different market cycles and acquisitions.

    Adjusted EPS (with tax benefit)
    $1.82up 2% QoQ, 34% YoY
    Q1 FY26

    Reflects the earnings power of the business.

    Share repurchases
    2 million sharesquarterly record
    Q1 FY26

    Reflects conviction in the value of the stock and commitment to returning capital.

    Capital returned to shareholders (Q1 FY26)
    $185 million
    Q1 FY26

    Combined capital return for the quarter.

    Capital returned to shareholders (TTM)
    $512 million>$6 per share
    TTM

    Total capital returned over the trailing 12 months.

    Shares repurchased since Pioneer acquisition close
    5 million shares
    Since April 1, 2025

    Repurchases since the closing date of the Pioneer acquisition.

    ETF AUM CAGR
    28%
    Since 2017

    Compound annual growth rate of ETF AUM.

    Average ETF fee rate
    35
    Q1 FY26

    Average fee rate for the ETF platform, meeting firm-wide requirements.

    AUM outperformance (1-year)
    71%
    1-year

    Percentage of AUM outperforming benchmarks as of March 31, 2026.

    AUM outperformance (3-year)
    67%
    3-year

    Percentage of AUM outperforming benchmarks as of March 31, 2026.

    AUM outperformance (5-year)
    68%
    5-year

    Percentage of AUM outperforming benchmarks as of March 31, 2026.

    AUM outperformance (10-year)
    81%
    10-year

    Percentage of AUM outperforming benchmarks as of March 31, 2026.

    Strategy count outperformance (1-year)
    69%
    1-year

    Percentage of strategies outperforming benchmarks as of March 31, 2026.

    Strategy count outperformance (3-year)
    67%
    3-year

    Percentage of strategies outperforming benchmarks as of March 31, 2026.

    Strategy count outperformance (5-year)
    70%
    5-year

    Percentage of strategies outperforming benchmarks as of March 31, 2026.

    Strategy count outperformance (10-year)
    70%
    10-year

    Percentage of strategies outperforming benchmarks as of March 31, 2026.

    Capital returned to shareholders (since IPO)
    $1.4 billion
    Since IPO 2018

    Total capital returned to shareholders since the company's IPO in 2018.

    Net proceeds from IPO
    $157 million
    February 2018

    Net proceeds received from the IPO.

    Total revenue
    $388 millionup 4% QoQ, 77% YoY
    Q1 FY26

    Revenue performance for the quarter.

    Total operating expenses
    $228.8 millionup from $220.9 million in Q4
    Q1 FY26

    Operating expenses for the quarter.

    Cash compensation as percentage of revenue
    24%
    Q1 FY26

    Reflects seasonal payroll dynamics.

    Pioneer acquisition expense synergies achieved
    $104 million
    Q1 FY26

    Synergies achieved from the Pioneer acquisition, which closed 12 months ago.

    Cash balance
    $76 million
    March 31, 2026

    Cash on hand at quarter end.

    Total debt
    $980 million
    March 31, 2026

    Total debt outstanding at quarter end.

    Net leverage ratio
    1.1x
    March 31, 2026

    Net leverage ratio at quarter end, providing strategic flexibility.

    Revolving credit facility
    $100 million
    Q1 FY26

    Available credit facility.

    Cash interest expense
    $14 milliondeclined again QoQ
    Q1 FY26

    Interest expense for the quarter.

    Quarterly cash dividend per share
    $0.50
    Q1 FY26

    Board approved an increase in the regular quarterly cash dividend.

    Industry KPIs

    1
    MetricValueDetails
    Fee rate47.6bps

    Product announcements

    2
    ProductTypeDetails
    New ETF productslaunch
    Additional UCITS productsroadmap

    Deals & partnerships

    3
    PioneerTransformational acquisition to enhance platform, distribution, diversify client base, and add investment capabilities.

    The integration is substantially complete, and the acquisition has had a transformational impact on the business, contributing to strong financial results and global expansion.

    AmundiStrategic distribution agreement for U.S. manufactured traditional active investment solutions.15-year

    Victory Capital serves as Amundi's exclusive provider of U.S. manufactured traditional active investment solutions, leveraging Amundi's global distribution engine.

    JanusPotential acquisition opportunity.

    Management considered the Janus opportunity as one that would create a 'phenomenal business' and make the company better, aligning with their strategic acquisition focus.

    What to watch in Q2 FY26

    5

    Net Flow Trajectory

    Coming quarters
    Current-$457 million in Q1 FY26
    TargetSustained positive organic growth

    Why it matters

    Management expects distribution investments to drive positive organic growth, which is crucial for AUM expansion and overall business health.

    Net flows improved meaningfully during the quarter, coming in at negative $457 million, and we are encouraged by the trend pointing towards sustained positive organic growth as our distribution investments continue to be realized and our momentum broadens.

    Q&A highlights

    6

    What opportunities exist to further energize ETF growth, and what are the product launch priorities for the next 12-18 months?

    Management highlighted expanding international distribution into Asia and Latin America, launching new ETF products (including from the Pioneer franchise), and increasing distribution resources (people, marketing). They noted the average ETF fee rate of 35 bps aligns with firm-wide margin requirements.

    “In our prepared remarks, I spoke about expanding the distribution outside the U.S. Today, our ETFs are available throughout Asia, and we're opening up some countries in Latin America. So that will help us with our growth.”

    asked by Y. Cho · answered by David Brown

    2 min read6 chapters

    Detailed Narrative

    01

    Record Financial Performance

    Victory Capital reported an exceptional Q1 FY26, achieving new records across multiple dimensions. The firm recorded $18.9 billion in long-term gross flows, $204 million in adjusted EBITDA with a 52.6% margin, and $1.82 in adjusted earnings per diluted share. These results demonstrate the resilience of the operating model and the successful execution of strategic investments, including the transformational Pioneer acquisition.

    02

    ETF Platform Growth and Expansion

    The VictoryShares ETF platform continues to be a significant growth engine, with AUM exceeding $20 billion, representing a 7% quarter-over-quarter and 53% year-over-year increase. Net flows for the quarter were $1.3 billion, driven by consistent inflows from the free cash flow ETF series and demand for fixed income ETFs. The firm is expanding distribution into Asia and Latin America and plans additional ETF product launches throughout 2026.

    03

    International Distribution Momentum

    Victory Capital's international distribution platform is gaining traction, with $55 billion in AUM from clients across 60 countries, 29 of which now hold over $100 million in Victory products. The international channel was net flow positive in Q1 FY26 and since the Pioneer acquisition. This growth is supported by a 15-year strategic distribution agreement with Amundi and an expanding product set of 23 UCITS products, with more planned for 2026.

    04

    Strong Investment Performance Across Platform

    Investment performance improved during the first quarter, with 58 mutual funds and ETFs (representing 68% of rated AUM) earning 4- or 5-star overall ratings from Morningstar. Against benchmarks, 71% of AUM outperformed over the 1-year period, and an impressive 81% outperformed over the 10-year period, reflecting broad-based strength across investment franchises.

    05

    Capital Allocation and M&A Strategy

    The company returned $185 million to shareholders in Q1 FY26 through dividends and the repurchase of 2 million shares. While opportunistic buybacks are ongoing, strategic acquisitions remain the primary capital allocation priority. Victory Capital is actively pursuing an extensive pipeline of M&A opportunities, focusing on larger deals to achieve its $1 trillion AUM goal, while maintaining financial discipline and the ability to pursue multiple objectives simultaneously.

    06

    Pioneer Integration and Synergies Nearing Completion

    The integration of the Pioneer acquisition is substantially complete, with approximately $104 million of the expected $110 million in net expense synergies already achieved. The Pioneer Investments franchise has been net flow positive since the acquisition, and new products, including the first ETF managed from the platform, have been launched, demonstrating the transformational impact and benefits of the acquisition.

    AI-generated summary of the company’s earnings call. Not investment advice.