Third Quarter 2026
Filed Nov 4, 2026Victory Capital Reports Strong Third Quarter 2026 Results, Highlighted by Record Gross Sales and Net Flows
Record long-term gross sales, record long-term net inflows and record total client assets marked the quarter. Revenue and adjusted EBITDA grew year over year, while GAAP earnings and margins were reduced sequentially and year over year by lower revenue realization, annual-fee timing and First Eagle acquisition-related costs.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Assets under management, endingother | $351.9B | increased by $9.4 billion | – |
| Total client assets, endingother | $355.5B | – | – |
| Average assets under managementother | $350.6M | – | – |
| Long-term gross salesother | $30.5B | – | – |
| Long-term net flowsother | $11.7B | – | – |
| Total gross flowsother | $30.82B | – | – |
| Total net flowsother | $11.7B | – | – |
| AUM market appreciation (depreciation)other | −$2.21B | – | – |
| RevenueGAAP | $396.6M | decreased 8.9% | increased 9.8% |
| Investment management feesGAAP | $322.1M | – | – |
| Fund administration and distribution feesGAAP | $74.49M | – | – |
| AUM revenue realizationGAAP | 44.8 bps | – | – |
| Operating expensesGAAP | $258.9M | – | – |
| Income from operationsGAAP | $137.7M | – | – |
| Operating marginGAAP | 34.7% | contracted by 980 basis points | contracted 350 basis points |
| Net incomeGAAP | $91.3M | decreased 34.5% | decreased 5.4% |
| Earnings per diluted share of common stockGAAP | $1.11 | – | – |
| Cash flow from operationsGAAP | $223.4M | – | – |
| Adjusted EBITDAnon-GAAP | $212.1M | decreased $30.6 million | increased 11.4% |
| Adjusted EBITDA marginnon-GAAP | 53.5% | contracted 230 basis points | expanded 80 basis points |
| Adjusted net incomenon-GAAP | $152.5M | – | – |
| Adjusted net income with tax benefitnon-GAAP | $163.2M | decreased 10.7% | increased 15.5% |
| Adjusted net income with tax benefit per diluted sharenon-GAAP | $1.98 | – | – |
| Revenue, nine months ended September 30, 2026GAAP | $1.22B | – | increased 30.9% |
| Operating margin, nine months ended September 30, 2026GAAP | 40.2% | – | expanded 530 basis points |
| Net income, nine months ended September 30, 2026GAAP | $342.8M | – | increased 57.8% |
| Earnings per diluted share, nine months ended September 30, 2026GAAP | $4.11 | – | – |
| Cash flow from operations, nine months ended September 30, 2026GAAP | $479.7M | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $658.9M | – | increased 35.7% |
| Adjusted EBITDA margin, nine months ended September 30, 2026non-GAAP | 54.0% | – | expanded 190 basis points |
| Adjusted net income with tax benefit per diluted share, nine months ended September 30, 2026non-GAAP | $5.99 | – | – |
| AUM outperforming benchmark, trailing 1-yearother | 60% | – | – |
| AUM outperforming benchmark, trailing 3-yearsother | 69% | – | – |
| AUM outperforming benchmark, trailing 5-yearsother | 63% | – | – |
| AUM outperforming benchmark, trailing 10-yearsother | 77% | – | – |
By the end of the first quarter of 2027 outlook
- NoteThe Company expects the First Eagle Investments transaction to close by the end of the first quarter of 2027, subject to customary closing conditions, including certain regulatory approvals and client consents.
Capital returns
- During the quarter, the Company returned $81 million to shareholders, including $39 million to repurchase shares of VCTR common stock, with the balance paid as dividends.
- For the three months ended September 30, 2026, the Company repurchased approximately 0.4 million shares of Common Stock.
- The Board approved a regular quarterly cash dividend of $0.50 per share.
- The dividend is payable on December 23, 2026, to shareholders of record on December 10, 2026.
What drove it
- Higher average AUM drove year-over-year revenue growth in the third quarter.
- Long-term net flows were positive across U.S. intermediary, U.S. institutional and international channels.
- Fixed income, solutions and global equity each recorded positive net flows, with contributions from multiple Investment Franchises and the Solutions Platform, driven by VictoryShares ETFs.
- Third-quarter AUM increased primarily because $11.7 billion of net inflows more than offset negative market action of $2.2 billion.
- The nine-month comparison reflects the April 1, 2025 acquisition of Amundi US and reintroduction of the Pioneer Investments brand.
Concerns
- Third-quarter revenue decreased 8.9% from the second quarter, primarily due to crystallization of certain annual fees received in the second quarter and changes in asset class and client mix.
- AUM revenue realization was 44.8 bps, compared with 47.9 bps in the second quarter and 47.2 bps in the third quarter of 2025.
- GAAP operating margin contracted by 980 basis points sequentially to 34.7%, due to lower revenue and a $16.2 million increase in acquisition-related costs related to the First Eagle transaction.
- GAAP net income decreased 34.5% sequentially to $91.3 million and declined 5.4% year over year.
- Total debt outstanding was approximately $975 million as of September 30, 2026.
What to watch
- Progress toward the expected First Eagle Investments closing by the end of the first quarter of 2027.
- Whether record long-term gross sales of $30.5 billion and long-term net inflows of $11.7 billion continue across distribution channels and asset classes.
- Revenue realization and the effect of asset class and client mix after third-quarter realization declined to 44.8 bps.
- The level of First Eagle transaction-related costs and their effect on GAAP operating margin.
- Market action, which reduced AUM by $2.2 billion during the third quarter despite positive net flows.
Balance sheet and cash flow
- Cash and cash equivalents were $207,724 thousand as of September 30, 2026.
- Gross debt outstanding was $975.2 million as of September 30, 2026.
- Long-term debt, net was $965,911 thousand as of September 30, 2026.
- Cash flow from operations was $223.4 million for the three months ended September 30, 2026 and $479.7 million for the nine months ended September 30, 2026.
Analysis
Victory Capital reported a strong third quarter defined by record sales, net flows and client assets. Long-term gross sales reached $30.5 billion and long-term net flows were $11.7 billion, while total client assets ended at $355.5 billion and AUM ended at $351.9 billion. The AUM increase from June 30, 2026 was primarily driven by net inflows of $11.7 billion, partly offset by negative market action of $2.2 billion. Management cited positive long-term flows across U.S. intermediary, U.S. institutional and international channels, as well as fixed income, solutions and global equity.
GAAP revenue increased 9.8% year over year to $396.6 million on higher average AUM, but declined 8.9% sequentially. The sequential revenue decline reflected crystallization of certain annual fees in the second quarter and changes in asset class and client mix, partially offset by higher average AUM. AUM revenue realization fell to 44.8 bps from 47.9 bps in the prior quarter and 47.2 bps a year earlier, making fee realization and mix an important operating variable.
Margins split sharply between GAAP and adjusted measures. GAAP operating margin was 34.7%, down 980 basis points sequentially and 350 basis points year over year, due to lower revenue and higher First Eagle transaction costs. GAAP net income was $91.3 million, down 34.5% from the prior quarter and down 5.4% from a year ago. Conversely, adjusted EBITDA increased 11.4% year over year to $212.1 million, and adjusted EBITDA margin expanded 80 basis points year over year to 53.5%, although it declined from 55.8% in the second quarter.
The nine-month results demonstrate the effect of higher average AUM and the acquired Amundi US business. Revenue increased 30.9% to $1,219.9 million, GAAP net income increased 57.8% to $342.8 million, and adjusted EBITDA increased 35.7% to $658.9 million. The nine-month GAAP operating-margin improvement to 40.2% reflected lower acquisition-related and restructuring and integration costs compared with the period that included the April 1, 2025 Amundi US acquisition.
Capital generation supported $81 million of third-quarter shareholder returns, including $39 million of share repurchases, alongside a declared $0.50 per-share quarterly dividend. Cash and cash equivalents were $207,724 thousand and gross debt outstanding was $975.2 million at quarter end. The major strategic development is the proposed First Eagle Investments acquisition, expected to close by the end of the first quarter of 2027 subject to stated conditions. The filing positions that transaction as a source of added scale, broader distribution and additional global value, multi-asset, CLO and alternative-credit capabilities, while current acquisition costs are already pressuring GAAP results.
Management, verbatim
We delivered record levels of both long-term gross sales of $30.5 billion and long-term net flows of $11.7 billion for the quarter, representing an annualized organic growth rate of approximately 14%.
David C. Brown, Chairman and Chief Executive Officer
Our strong cash generation also supported meaningful capital return. During the quarter, we returned $81 million to shareholders, including $39 million to repurchase shares of VCTR common stock, with the balance paid as dividends.
David C. Brown, Chairman and Chief Executive Officer
In August 2026, we announced a definitive agreement to acquire First Eagle Investments. Acquiring First Eagle Investments is a transformational transaction that will add size and scale across our business and allow us to increase our distribution footprint inside and outside the United States.
David C. Brown, Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- Gross margin was not reported.
- Free cash flow was not reported.
- No financial revenue, gross-margin, operating-expense or tax-rate guidance was reported.
- No prior company outlook was provided for comparison.
- No operating-segment revenue disclosure was reported.
- GAAP tax rate was not reported.
- A quarter-over-quarter change for total client assets was not expressly reported.
- Year-over-year and quarter-over-quarter percentage changes were not expressly reported for several AUM, flow, balance-sheet and cash-flow line items.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.