Key Highlights

  • Adjusted EPS with tax benefit was USD 1.98 against a USD 1.99 estimate, while GAAP diluted EPS was USD 1.11.
  • Revenue of USD 396.6 million compares with an estimate of USD 411.23 million and USD 361.2 million a year earlier.
  • Long-term net inflows were USD 11.7 billion on gross sales of USD 30.5 billion; client Assets USD 355.5 billion.
  • The company agreed to acquire First Eagle Investments, and the board declared a quarterly Dividend of USD 0.50 per share.

What did a record quarter of client flows look like next to a lower Revenue figure? Victory Capital Holdings, Inc. (NASDAQ:VCTR) reported third quarter revenue of USD 396.6 million, against USD 435.4 million in the second quarter and an estimate of USD 411.23 million. Adjusted Net Income with tax benefit was USD 1.98 per diluted share, against an estimate of USD 1.99 and USD 1.63 a year earlier, while GAAP net income was USD 91.3 million, or USD 1.11 per diluted share.

Flows and Assets Under Management

Long-term gross sales were USD 30.5 billion and long-term net inflows were USD 11.7 billion, each described by the company as a quarterly record. CEO David C. Brown said the flows represented an annualized organic growth rate of approximately 14%, and that U.S. intermediary, U.S. institutional and international channels each had positive long-term net flows. Net flows were positive in fixed income, solutions and global equity, with contributions from the VictoryShares ETF platform. Year-to-date long-term net flows were USD 15.4 billion.

Total client assets were USD 355.5 billion, and assets under management were USD 351.9 billion, up from USD 342.5 billion at June 30. The company attributed the increase to net inflows of USD 11.7 billion, partly offset by negative market action of USD 2.2 billion. As of September 30, 60%, 69%, 63% and 77% of AUM outperformed benchmarks over one, three, five and 10 years, across 187 Investment strategies.

Revenue, Margins and Costs

Revenue rose 9.8% from USD 361.2 million in the third quarter of 2025 on higher average AUM, and fell 8.9% from the second quarter, which the company tied to the Crystallization of certain annual fees in that quarter and changes in Asset Class and client mix. Revenue realization was 44.8 basis points, against 47.9 in the second quarter and 47.2 a year earlier.

Operating expenses were USD 258.9 million against USD 223.1 million, reflecting variable expenses on higher average AUM and acquisition-related costs for the First Eagle transaction, which rose USD 16.2 million from the second quarter. GAAP operating Margin was 34.7% against 38.2% a year earlier. Adjusted EBITDA was USD 212.1 million against USD 190.5 million, a margin of 53.5% against 52.7%.

Capital Allocation and Balance Sheet

The company returned USD 81 million to shareholders in the quarter, including USD 39 million to repurchase about 0.4 million shares, with the balance paid as dividends. Cash Flow from operations was USD 223.4 million. Cash and cash equivalents were USD 207.7 million and total Debt outstanding was approximately USD 975 million.

The board declared a regular quarterly Cash Dividend of USD 0.50 per share, payable on December 23, 2026 to shareholders of record on December 10, 2026.

What Management Pointed To

Adjusted EBITDA margin of 53.5% sits alongside GAAP Operating Margin of 34.7%, and nine-month adjusted EPS with tax benefit of USD 5.99 sits alongside nine-month GAAP EPS of USD 4.11. Long-term net inflows of USD 11.7 billion sit alongside total client assets of USD 355.5 billion.

Management pointed to the First Eagle Investments agreement announced in August 2026, which it described as transformational. It said First Eagle would add scale, distribution outside the United States, a global value multi-asset capability and a scaled CLO and alternative Credit platform. Integration planning is under way, and the company targets closing by the end of the first quarter of 2027, subject to regulatory approvals and client consents. The conference call is scheduled for November 5, 2026.