Victory Capital NASDAQ: VCTR used its fourth-quarter 2025 earnings call to highlight a “transformational year” that included closing a strategic partnership with Amundi and integrating Pioneer Investments onto its platform, alongside record financial results and continued momentum in its exchange-traded fund business.
Fourth-quarter highlights: record client assets and revenue growth
Chairman and CEO David Brown said Victory Capital ended 2025 with “record-high AUM” and total client assets of $317 billion. He also pointed to exceptionally strong client engagement, citing long-term gross flows of $17.1 billion, which he described as the company’s highest-ever quarterly gross sales.
President, Chief Financial and Administrative Officer Michael Policarpo said fourth-quarter revenue rose to $374.1 million, up 3.6% sequentially from the third quarter, driven by a 3.1% increase in average AUM to $312.9 billion. He added that the revenue realization rate increased slightly and came in at 47.4 basis points, which he said was at the high end of the company’s 46–47 basis point guidance range. For 2026, management reiterated an expectation that the revenue realization rate will remain consistent within that same 46–47 basis point range.
Net flows were “off-trend,” but management emphasized one-time factors
While gross sales set a quarterly record, management said long-term net flows were negative $2.1 billion in the quarter. Brown described the result as “off-trend” and attributed it to several one-time items, including:
- One large platform redeeming close to $1 billion from one of Victory’s strategies
- Several larger year-end client reallocations where clients redeemed to return to investment policy guidelines, while still maintaining sizable accounts with Victory
Policarpo echoed that view, noting that the quarter was “an off-trend quarter from a net flow perspective,” while also citing positive underlying net flows in certain areas. He pointed to strength in Pioneer’s multi-asset and fixed income strategies, and said the international channel was net flow positive.
He also said the company’s “won but not yet funded” book remained strong across franchises and channels, and management expects most mandates to fund in the first half of 2026.
Profitability and synergy progress: adjusted EBITDA record and integration nearing completion
Victory reported record adjusted EBITDA of $197.5 million in the fourth quarter, supported by a higher fee rate and continued progress toward expense synergies tied to the Pioneer integration. Brown said the company had achieved $97 million of the targeted $110 million in net expense synergies on a run-rate basis at year-end, while Policarpo quantified synergy progress at 88% realized on a run-rate basis.
The adjusted EBITDA margin was 52.8% for the quarter, which management said reflected operating efficiency while continuing to invest in the platform.
On earnings, Policarpo reported GAAP operating income of $153 million and GAAP net income of $1.32 per diluted share. Adjusted net income with tax benefit was $151.7 million, or $1.78 per diluted share. Policarpo said the quarter’s GAAP tax rate was 20.4%, below the company’s long-term guidance of 24%–25%, due to one-time state tax apportionment adjustments related to the pro forma business including Pioneer; he said this provided a few cents of positive impact to adjusted earnings per share in the quarter.
For the full year, Brown said Victory surpassed $1 billion in annual revenue for the first time, while Policarpo reported total revenues of $1.3 billion for 2025.
Pioneer and international distribution: UCITS launches and early net-flow positivity
Brown called the acquisition of Amundi’s U.S. business, Pioneer Investments, “truly transformational,” citing enhanced capabilities, the Pioneer brand, and a greater international footprint. He said the company now has 17% of AUM from clients outside the U.S., spanning more than 60 countries, and described international diversification as a significant strategic opportunity.
Management said Pioneer’s investment performance remained “extremely strong” and that Pioneer had been net-flow positive in each quarter since the transaction closed. Brown added that integration efforts were close to complete and that the company remains on track to reach the full $110 million synergy target during calendar 2026.
During Q&A, management said Amundi launched five new UCITS products during the fourth quarter specific to Victory Capital—three managed by Victory’s RS Global and RS Value teams and two managed by Pioneer Investments. In response to a question about the pace of non-U.S. flow improvement, management said additional UCITS launches are planned in 2026 and that the impact of new launches would “probably take effect” as 2026 progresses, “more towards the end of the year.”
ETF platform: $1 billion in quarterly net inflows and expanding shelf space
Brown said Victory’s ETF platform delivered $1 billion in positive net flows during the quarter, ending 2025 with nearly $19 billion in ETF assets. He said momentum continued into early 2026, with the company winning new shelf space at multiple U.S. intermediary platforms and with Amundi’s sales force beginning to sell Victory’s U.S.-listed ETFs overseas at the start of 2026.
Brown highlighted several platform placements discussed on the call, including VictoryShares Core Intermediate Bond ETF (UITB) and VictoryShares Short-Term Bond ETF (USTB) being the first active fixed income ETFs on Morgan Stanley Wealth Management’s focus list. He also said VictoryShares Free Cash Flow ETF (VFLO) continues to be highlighted as a top-rated quality ETF option on Merrill’s platform, and noted recommended list status for USTB at Wells Fargo, RBC, and LPL.
Management said the ETF suite averages roughly 34 basis points across 23 ETFs, and Brown described the flows as sustained rather than sporadic, noting that VFLO generated positive net flows every month in 2025 and that active fixed income ETFs also produced strong inflows throughout the year.
In Q&A, Brown said selective intermediary partnerships—particularly those with more limited manager rosters—are becoming increasingly important for ETF competitiveness. He added that existing platform relationships can make it easier to introduce new products, including potential private market offerings, as distribution needs evolve.
Capital allocation: buybacks, dividends, and balance sheet updates
Management reiterated that balance sheet strength remains a priority to support future acquisitions, and Brown said the company is “extremely busy” on the acquisition front. In response to questions on M&A cadence, Brown said Victory has historically averaged an acquisition about every year and a half since 2013, and he did not see a reason for that to change, though it could be “a little bit faster” or “a little bit slower” depending on external factors.
Policarpo said Victory repurchased 814,000 shares in the fourth quarter for $51.6 million at an average price of about $63 per share. The company had more than $300 million of remaining capacity under its $500 million authorization at year-end. In total, Victory returned $93 million to shareholders in the quarter through repurchases and dividends, and $366 million for full-year 2025. The board declared a quarterly cash dividend of $0.49 per share, payable March 25 to shareholders of record as of March 10.
On leverage and liquidity, Policarpo said the company ended the quarter with $164 million in cash, an undrawn revolver, and a net leverage ratio of 1.0x. He also said Victory consolidated its term loans into a single $985 million Term Loan B with a seven-year term, pushing debt maturity out to 2032. The new facility is priced at SOFR plus 200 basis points, which Policarpo said lowered borrowing costs by 35 basis points and is expected to produce approximately $3.5 million in annual interest savings. The company also extended its $100 million revolving credit facility by five years, with maturity in 2030.
About Victory Capital NASDAQ: VCTR
Victory Capital NASDAQ: VCTR is a global investment management firm that provides a broad range of strategies across equities, fixed income, multi-asset and alternative investments. Serving institutional, intermediary and retail clients, the company delivers tailored solutions through active, research-driven portfolio management. Its product lineup includes traditional mutual funds, separately managed accounts, sub-advisory services and specialized strategies such as ESG-focused and municipal bond portfolios.
Founded in 1988, Victory Capital has expanded its capabilities via both organic growth and strategic acquisitions, integrating experienced investment teams to enhance its offerings in areas like smart beta, global equity and fixed income.
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