Victory Capital Holdings, Inc. (NASDAQ:VCTR) Q3 2019 Earnings Conference Call Transcript

Nov 04, 2019 • 08:00 am ET

Previous

Victory Capital Holdings, Inc. (NASDAQ:VCTR) Q3 2019 Earnings Conference Call Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Victory Capital Third Quarter 2019 Earnings Conference Call. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Mr. Matt Dennis, Chief of Staff and Director of Investor Relations. Please go ahead, sir.

Executive
Matthew Dennis

Thank you, Liz. Good morning. Before I turn the call over to David Brown, I would like to note that today's discussion contains forward-looking statements and as such includes certain risks and uncertainties. Please refer to our press release and our SEC filings for more information on specific risk factors that could cause actual results to differ materially from those projected in the forward-looking statements.

While recording of this call will be made available by us on our website, any of the forward-looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these forward-looking statements to reflect new information or future events that occur or circumstances that exist after the date on which they were made.

In addition to US GAAP reporting, we also report certain financial measures that do not conform to Generally Accepted Accounting Principles. We believe these non-GAAP measures enhance the understanding of our business and our performance. Reconciliations between these non-GAAP measures and the most comparable, related GAAP measures are included in tables that can be found in our earnings press release and in the slide presentation accompanying this call. Both can be accessed on the Investor Relations portion of our website at ir.vcm.com.

Now, I will turn the call over to David Brown, Chairman and CEO.

Executive
David C. Brown

Thanks, Matt. Good morning, and welcome to Victory Capital's third Quarter 2019 Earnings Call. I'm joined today by Michael Policarpo, Our President, Chief Financial and Administrative Officer, as well as Matt Dennis, Chief of Staff and Director of Investor Relations.

I'm going to spend a few minutes discussing our business and investment results. I'll also share an update on the integration of USAA Asset Management Company. Then, I will turn it over to Mike who will review our financial results for the quarter. Following our prepared remarks, Mike, Matt, and I will be available to take questions.

The business overview begins on slide five. The financial and operating results reported last night represent the culmination of the crisp execution of our long-term strategy to profitably grow the business. We the business. We more than doubled the adjusted earnings and expanded margins, reinforcing the power of our unique business model. The total AUM grew from $64.1 billion as of June 30, 2019 $145.8 billion as of the end of the quarter. Long-term net inflows were positive for the second consecutive quarter at $726 million and are $3.3 billion year-to-date Revenue and adjusted net income more than doubled sequentially and adjusted EBITDA margin expanded by 480 basis points to a record high of 44.8% as of the end of the quarter. This marks our third consecutive quarter of meaningful margin