# EDGAR Filing Document

**Accession Number:** 0001570827
**File Stem:** 0001157523-23-000237
**Filing Date:** 2023-2
**Character Count:** 62040
**Document Hash:** ddcc4f5a7f1dc00c41a4f1cd5371a0a7
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001157523-23-000237.hdr.sgml**: 20230209

**ACCESSION NUMBER**: 0001157523-23-000237

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230209

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230209

**DATE AS OF CHANGE**: 20230209

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Victory Capital Holdings, Inc.
- **CENTRAL INDEX KEY:** 0001570827
- **STANDARD INDUSTRIAL CLASSIFICATION:** INVESTMENT ADVICE [6282]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38388
- **FILM NUMBER:** 23606697

**BUSINESS ADDRESS:**
- **STREET 1:** 4900 TIEDEMANN ROAD
- **STREET 2:** 4TH FLOOR
- **CITY:** BROOKLYN
- **STATE:** OH
- **ZIP:** 44144
- **BUSINESS PHONE:** 216-898-2400

**MAIL ADDRESS:**
- **STREET 1:** 4900 TIEDEMANN ROAD
- **STREET 2:** 4TH FLOOR
- **CITY:** BROOKLYN
- **STATE:** OH
- **ZIP:** 44144

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### UNITED STATES

### SECURITIES AND EXCHANGE COMMISSION

#### Washington, D.C. 20549

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### FORM 8-K

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#### CURRENT REPORT

#### Pursuant to Section 13 or 15(d)

#### of the Securities Exchange Act of 1934

#### February 9, 2023

#### Date of Report (date of earliest event reported)

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### Victory Capital Holdings, Inc.
(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| **Delaware**<br>| **001-38388**<br>| **32-0402956**<br>|
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |

---

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| | |
|:---|:---|
| **15935 La Cantera Parkway; San Antonio, Texas** | **78256**<br>|
| (Address of principal executive offices) | (Zip Code) |

---

(216) 898-2400

(Registrant's telephone number, including area code)

#### Not Applicable
(Former name or former address, if changed since last report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, Par Value $0.01<br>| VCTR<br>| NASDAQ<br>|

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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#### Item 2.02. Results of Operations and Financial Condition
On February 9, 2023, Victory Capital Holdings, Inc., (the "Company") issued a press release (the "Earnings Press Release") reporting results for the three months and year ended December 31, 2022. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

The information set forth in this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing of the Company under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

#### Item 9.01. Financial Statements and Exhibits.
(d) Exhibits

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| | |
|:---|:---|
| **Exhibit**<br>**Number** | **Description** |
| [99.1](a53313938ex99_1.htm) | [Earnings Press Release dated February 9, 2023.](a53313938ex99_1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

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#### SIGNATURE(S)
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **VICTORY CAPITAL HOLDINGS, INC.** | **VICTORY CAPITAL HOLDINGS, INC.** |
| Date: February 9, 2023 | By: | /s/ MICHAEL D. POLICARPO |
|  |  | Name: Michael D. Policarpo |
|  |  | Title: President, Chief Financial Officer and Chief <br>|
|  |  | Administrative Officer  |

---

## Exhibit 99.1

**Exhibit 99.1**<br>

**** 

<br> **** 

<br> # **Victory Capital Reports Strong Fourth Quarter\and Full-Year 2022 Results** 
 **Fourth-Quarter 2022 Highlights** 

*** Total Assets Under Management (AUM) of $153.0 billion<sup>1</sup> 

* Long-term gross flows of $6.5 billion in the quarter; $33.3 billion for the full year 

* Long-term net flows of -$4.4 billion in the quarter; and -$2.5 billion for the full year 

* GAAP operating margin of 39.5% 

* Adjusted EBITDA margin of 49.7% in the quarter; and 49.6% for the full year<sup>2</sup> 

* GAAP net income of $0.74 per diluted share 

* Adjusted net income with tax benefit of $1.05 per diluted share<sup>2</sup> 

* Board increased regular quarterly cash dividend 28% to $0.32**

SAN ANTONIO--(BUSINESS WIRE)--February 9, 2023--Victory Capital Holdings, Inc. (NASDAQ: VCTR) ("Victory Capital" or "the Company") today reported financial results for the quarter and year ended December 31, 2022.

"We achieved exceptionally strong results in 2022 in the face of historically challenging market conditions," said David Brown, Chairman and Chief Executive Officer. "We generated record high GAAP operating income and earnings per diluted share for the year, exceeding prior records set in 2021. Moreover, our full year 2022 adjusted EBITDA margin remained healthy at 49.6% marking the second highest annual level ever achieved. These results exemplify superb execution and focus by our team.

"Our investment professionals continued to deliver excellent investment performance for clients. At year end, the percentage of our AUM outperforming benchmarks over the respective 3-, 5-, and 10-year periods was 84%, 79%, and 79%. In addition, the mutual funds and ETFs rated four- or five-stars overall represented 62% of our Fund AUM.

"We returned more capital to shareholders in 2022 than in any year since we have been a public company. Through the repurchase of 4.6 million shares and $69 million in cash dividends, we returned more than $200 million of capital to our shareholders during the year. Additionally, we reduced debt by $150 million during the year to maintain flexibility to pursue inorganic growth opportunities.

"As always, we continue to focus on serving our clients, which is our top priority."

The table below presents AUM, and certain GAAP and non-GAAP ("adjusted") financial results. Due to rounding, AUM values and other amounts in this press release may not add up precisely to the totals provided.

<sup>1</sup> Total AUM includes both discretionary and non-discretionary client assets. <br> <sup>2</sup> The Company reports its financial results in accordance with generally accepted accounting principles ("GAAP"). Adjusted EBITDA and Adjusted Net Income are not defined by GAAP and should not be regarded as an alternative to any measurement under GAAP. Please refer to the section "Information Regarding Non-GAAP Financial Measures" at the end of this press release for an explanation of Non-GAAP financial measures and a reconciliation to the nearest GAAP financial measure. <br>

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 ***(in millions except per share amounts or as otherwise noted)***

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended**  | **For the Three Months Ended**  | **For the Three Months Ended**  | **For the Year Ended**  | **For the Year Ended**  |
|  | **December 31,** <br> **2022**  | **September 30,** <br> **2022**  | **December 31,** <br> **2021**  | **December 31,** <br> **2022**  | **December 31,** <br> **2021**  |
| Assets Under Management<sup>1</sup> |  |  |  |  |  |
| &nbsp;&nbsp;Ending | $152952  | $147257  | $183654  | $152952  | $183654  |
| &nbsp;&nbsp;Average | 154632  | 158903  | 162295  | 164025  | 158590  |
| Long-term Flows<sup>2</sup> |  |  |  |  |  |
| &nbsp;&nbsp;Long-term Gross | $6502  | $6601  | $5481  | $33313  | $27869  |
| &nbsp;&nbsp;Long-term Net | (4405 ) | (553 ) | (3402 ) | (2545 ) | (3952 ) |
| Money Market/Short-term Flows |  |  |  |  |  |
| &nbsp;&nbsp;Money Market / Short-term Gross | $179  | $194  | $84  | $621  | $386  |
| &nbsp;&nbsp;Money Market / Short-term Net | (62 ) | (19 ) | (98 ) | (187 ) | (528 ) |
| Total Flows |  |  |  |  |  |
| &nbsp;&nbsp;Total Gross | $6681  | $6796  | $5565  | $33934  | $28254  |
| &nbsp;&nbsp;Total Net | (4466 ) | (573 ) | (3500 ) | (2732 ) | (4480 ) |
| Consolidated Financial Results (GAAP) |  |  |  |  |  |
| &nbsp;&nbsp;Revenue | $201.5  | $207.3  | $229.1  | $854.8  | $890.3  |
| &nbsp;&nbsp;Revenue realization (in bps) | 51.7  | 51.8  | 56.0  | 52.1  | 56.1  |
| &nbsp;&nbsp;Operating expenses | 121.9  | 108.6  | 139.3  | 455.7  | 516.4  |
| &nbsp;&nbsp;Income from operations | 79.6  | 98.6  | 89.8  | 399.1  | 373.8  |
| &nbsp;&nbsp;Operating margin | 39.5% | 47.6% | 39.2% | 46.7% | 42.0% |
| &nbsp;&nbsp;Net income | 52.3  | 72.8  | 69.7  | 275.5  | 278.4  |
| &nbsp;&nbsp;Earnings per diluted share | $0.74  | $1.01  | $0.94  | $3.81  | $3.75  |
| &nbsp;&nbsp;Cash flow from operations | 67.1  | 103.1  | 112.1  | 335.2  | 376.2  |
| Adjusted Performance Results (Non-GAAP)<sup>3</sup> |  |  |  |  |  |
| &nbsp;&nbsp;Adjusted EBITDA | $100.1  | $103.6  | $114.9  | $424.2  | $449.0  |
| &nbsp;&nbsp;Adjusted EBITDA margin | 49.7% | 50.0% | 50.2% | 49.6% | 50.4% |
| &nbsp;&nbsp;Adjusted net income | 65.0  | 76.2  | 86.4  | 293.8  | 329.0  |
| &nbsp;&nbsp;Tax benefit of goodwill and acquired intangible assets | 9.5  | 9.3  | 7.3  | 37.5  | 28.0  |
| &nbsp;&nbsp;Adjusted net income with tax benefit | 74.5  | 85.6  | 93.7  | 331.2  | 357.1  |
| &nbsp;&nbsp;Adjusted net income with tax benefit per diluted share | $1.05  | $1.19  | $1.27  | $4.58  | $4.82  |

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<sup>**________________________**</sup> <br> <sup>1</sup> Total AUM includes both discretionary and non-discretionary client assets. <br> <sup>2</sup> Long-term AUM is defined as total AUM excluding Money Market and Short-term assets. <br> <sup>3</sup> The Company reports its financial results in accordance with GAAP. Adjusted EBITDA and Adjusted Net Income are not defined by GAAP and should not be regarded as an alternative to any measurement under GAAP. Please refer to the section "Information Regarding Non-GAAP Financial Measures" at the end of this press release for an explanation of Non-GAAP financial measures and a reconciliation to the nearest GAAP financial measure. <br>

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 **AUM, Flows and Investment Performance**

Victory Capital's total AUM increased by 3.9%, or $5.7 billion, to $153.0 billion at December 31, 2022, compared with $147.3 billion at September 30, 2022. The increase was attributable to $10.5 billion of positive market action partially offset by $4.5 billion in negative net flows.

Total gross flows were $6.7 billion in the fourth quarter and $33.9 billion for the year. Long-term AUM increased by 3.9%, or $5.6 billion, to $149.6 billion at December 31, 2022, compared with $144.0 billion at September 30, 2022. For the fourth quarter, the Company reported long-term gross flows of $6.5 billion and net long-term outflows of $4.4 billion. For the year-to-date period, the Company reported long-term gross flows of $33.3 billion and net long-term outflows of $2.5 billion.

At December 31, 2022, Victory Capital offered 128 investment strategies through its 12 autonomous Investment Franchises and Solutions Platform. The table below presents outperformance against benchmarks by AUM as of December 31, 2022.

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| | | | |
|:---|:---|:---|:---|
| **Percentage of AUM Outperforming Benchmark** | **Percentage of AUM Outperforming Benchmark** | **Percentage of AUM Outperforming Benchmark** | **Percentage of AUM Outperforming Benchmark** |
| **Trailing**  | **Trailing**  | **Trailing**  | **Trailing**  |
| **1-Year**  | **3-Years**  | **5-Years**  | **10-Years**  |
| 54%  | 84%  | 79%  | 79%  |

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 **Fourth Quarter 2022 Compared with Third Quarter 2022**

Revenue decreased 2.8% to $201.5 million, in the fourth quarter, compared with $207.3 million in the third quarter, primarily due to lower average AUM, which decreased 2.7% from $158.9 billion to $154.6 billion. GAAP operating margin contracted 810 basis points in the fourth quarter to 39.5%, down from 47.6% in the third quarter. The decline was primarily driven by a non-cash $10.5 million difference in amounts recorded to change the fair value of consideration payable for acquisitions. Fourth-quarter GAAP net income decreased 28.2% to $52.3 million, down from $72.8 million in the prior quarter. Third quarter net income benefited from a lower than normal tax rate as a result of employees exercising stock options during the period. On a per-share basis, GAAP net income decreased 26.7% to $0.74 per diluted share in the fourth quarter, versus $1.01 per diluted share in the third quarter.

Adjusted net income with tax benefit decreased 12.9% to $74.5 million in the fourth quarter, down from $85.6 million in the third quarter. On a per-share basis, adjusted net income with tax benefit decreased 11.8% to $1.05 per diluted share in the fourth quarter, from $1.19 per diluted share in the prior quarter. Adjusted EBITDA was $100.1 million in the fourth quarter, compared to $103.6 million in the third quarter. Adjusted EBITDA margin contracted 30 basis points in the fourth quarter of 2022 to 49.7%, compared with 50.0% in the prior quarter.

 **Fourth Quarter 2022 Compared with Fourth Quarter 2021**

Revenue for the three months ended December 31, 2022 decreased 12.0% to $201.5 million, compared with $229.1 million in the same quarter of 2021. The decrease was primarily due to lower average AUM, which decreased 4.7% to $154.6 billion, compared with $162.3 billion in the same quarter last year. Also contributing was a slight decrease in revenue realization due to a change in asset mix as a result of the impact of the WestEnd acquisition.

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Operating expenses decreased 12.5% to $121.9 million, compared with $139.3 million in last year's fourth quarter primarily due to a decrease in acquisition-related costs related to the WestEnd and NEC acquisitions that closed in the fourth quarter of 2021 as well as a decrease in variable operating expenses from lower average AUM and earnings. GAAP operating margin expanded 30 basis points to 39.5% in the fourth quarter, from 39.2% in the same quarter of 2021. GAAP net income decreased 25.1% to $52.3 million, or $0.74 per diluted share, in the fourth quarter compared with $69.7 million, or $0.94 per diluted share, in the same quarter of 2021.

Adjusted net income with tax benefit decreased 20.4% to $74.5 million, or $1.05 per diluted share, in the fourth quarter, compared with $93.7 million, or $1.27 per diluted share in the same quarter last year. Adjusted EBITDA decreased 12.9% to $100.1 million in the fourth quarter, compared with $114.9 million in last year's same quarter. Year-over-year, adjusted EBITDA margin declined slightly by 50 basis points to 49.7% in the fourth quarter of 2022, compared with 50.2% in the same quarter last year.

 **Year Ended December 31, 2022 Compared with Year Ended December 31, 2021**

Revenue for the year ended December 31, 2022, declined 4.0% to $854.8 million, compared with $890.3 million in the same period of 2021. The decrease was primarily due to lower average AUM and a decrease in revenue realization due to a change in asset mix, partially offset by a full-year of revenue from businesses acquired in 2021.

Operating expenses decreased 11.8% to $455.7 million for year ended December 31, 2022, compared with $516.4 million in 2021 primarily due to a decrease in variable operating expenses from lower average AUM, a decrease in acquisition-related costs related to the WestEnd, NEC and THB acquisitions that closed in 2021, and a non-cash $54.4 million benefit in amounts recorded from the change in fair value of consideration payable for acquisitions. GAAP operating margin was 46.7% for the year ended December 31, 2022, a 470 basis point increase from the 42.0% recorded in 2021. GAAP net income declined 1.0% to $275.5 million for the year ended 2022 compared with $278.4 million in the prior year. GAAP net earnings per share increased to $3.81 per diluted share in 2022, up from $3.75 per diluted share in 2021 as a result of fewer weighted average shares outstanding in 2022.

Adjusted net income with tax benefit decreased 7.2% to $331.2 million, or $4.58 per diluted share, for the year ended December 31, 2022, compared with $357.1 million, or $4.82 per diluted share in 2021. For the year ended December 31, 2022, adjusted EBITDA declined 5.5% to $424.2 million, compared with $449.0 million in 2021. Year-over-year, adjusted EBITDA margin declined 80 basis points to 49.6% for the year ended December 31, 2022, compared with 50.4% in the previous year.

 **Balance Sheet / Capital Management**

Total debt outstanding as of December 31, 2022 was approximately $1,002 million. For the year ended December 31, 2022, the Company reduced outstanding debt on the 2021 Incremental Term Loans by $150 million.

During the fourth quarter, the Company repurchased 1.3 million shares under the 10b-5 plan and net settled 0.1 million shares. For the year ended December 31, 2022, the Company repurchased 3.0 million shares under the 10b-5 plan and net settled 1.6 million shares.

The Company's Board of Directors also approved a regular quarterly cash dividend of $0.32 per share. The dividend is payable on March 27, 2023, to shareholders of record on March 10, 2023.

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 **Conference Call, Webcast and Slide Presentation**

The Company will host a conference call tomorrow morning, February 10, 2023, at 8:00 a.m. ET to discuss the results. Analysts and investors may participate in the question-and-answer session. To participate in the conference call, please call 1-888-330-3571 (domestic) or 1-646-960-0657 (international), shortly before 8:00 a.m. ET and reference the Victory Capital Conference Call. A live, listen-only webcast will also be available via the investor relations section of the Company's website at https://ir.vcm.com. Prior to the call, a supplemental slide presentation that will be used during the conference call will be available on the Events and Presentations page of the Company's investor relations website. For anyone who is unable to join the live event, an archive of the webcast will be available for replay shortly after the call concludes.

 **About Victory Capital**

Victory Capital is a diversified global asset management firm with $153.0 billion in assets under management as of December 31, 2022. It was ranked No. 55 on the Fortune 100 Fastest-Growing Companies list for 2022 and is one of only 24 companies to make the list for the second consecutive year. The Company operates a next-generation business model combining boutique investment qualities with the benefits of a fully integrated, centralized operating and distribution platform.

Victory Capital provides specialized investment strategies to institutions, intermediaries, retirement platforms and individual investors. With 12 autonomous Investment Franchises and a Solutions Platform, Victory Capital offers a wide array of investment products, including mutual funds, ETFs, separately managed accounts, alternative investments, third-party ETF model strategies, collective investment trusts, private funds, and a 529 Education Savings Plan.

For more information, please visit www.vcm.com or follow us: Twitter and LinkedIn.

 **FORWARD-LOOKING STATEMENTS**

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target," "believe," "expect," "aim," "intend," "may," "anticipate," "assume," "budget," "continue," "estimate," "future," "objective," "outlook," "plan," "potential," "predict," "project," "will," "can have," "likely," "should," "would," "could" and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Victory Capital's control such as the conflict in Ukraine and the COVID-19 pandemic and its effect on our business, operations and financial results going forward, as discussed in Victory Capital's filings with the SEC, that could cause Victory Capital's actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements.

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Although it is not possible to identify all such risks and factors, they include, among others, the following: reductions in AUM based on investment performance, client withdrawals, difficult market conditions and other factors such as a pandemic; the nature of the Company's contracts and investment advisory agreements; the Company's ability to maintain historical returns and sustain its historical growth; the Company's dependence on third parties to market its strategies and provide products or services for the operation of its business; the Company's ability to retain key investment professionals or members of its senior management team; the Company's reliance on the technology systems supporting its operations; the Company's ability to successfully acquire and integrate new companies; the concentration of the Company's investments in long-only small- and mid-cap equity and U.S. clients; risks and uncertainties associated with non-U.S. investments; the Company's efforts to establish and develop new teams and strategies; the ability of the Company's investment teams to identify appropriate investment opportunities; the Company's ability to limit employee misconduct; the Company's ability to meet the guidelines set by its clients; the Company's exposure to potential litigation (including administrative or tax proceedings) or regulatory actions; the Company's ability to implement effective information and cyber security policies, procedures and capabilities; the Company's substantial indebtedness; the potential impairment of the Company's goodwill and intangible assets; disruption to the operations of third parties whose functions are integral to the Company's ETF platform; the Company's determination that Victory Capital is not required to register as an "investment company" under the 1940 Act; the fluctuation of the Company's expenses; the Company's ability to respond to recent trends in the investment management industry; the level of regulation on investment management firms and the Company's ability to respond to regulatory developments; the competitiveness of the investment management industry; the level of control over the Company retained by Crestview GP; the Company's status as an emerging growth company and a controlled company; and other risks and factors listed under "Risk Factors" and elsewhere in the Company's filings with the SEC.

Such forward-looking statements are based on numerous assumptions regarding Victory Capital's present and future business strategies and the environment in which it will operate in the future. Any forward-looking statement made in this press release speaks only as of the date hereof. Except as required by law, Victory Capital assumes no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

 **From Fortune.© 2022 Fortune Media IP Limited All rights reserved.** *Fortune* is a registered trademark of Fortune Media IP Limited and is used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of, Victory Capital Holdings, Inc.

The *Fortune* annual list ranks the top performing, publicly traded companies in revenues, profits and stock returns over the three-year period ended April 30, 2022.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Victory Capital Holdings, Inc. and Subsidiaries** <br> **Unaudited Consolidated Statements of Operations** <br> ***(in thousands except per share data and percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** <br> **Unaudited Consolidated Statements of Operations** <br> ***(in thousands except per share data and percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** <br> **Unaudited Consolidated Statements of Operations** <br> ***(in thousands except per share data and percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** <br> **Unaudited Consolidated Statements of Operations** <br> ***(in thousands except per share data and percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** <br> **Unaudited Consolidated Statements of Operations** <br> ***(in thousands except per share data and percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** <br> **Unaudited Consolidated Statements of Operations** <br> ***(in thousands except per share data and percentages)***  |
|  | **For the Three Months Ended**  | **For the Three Months Ended**  | **For the Three Months Ended**  | **For the Year Ended**  | **For the Year Ended**  |
|  | **December 31,**  | **September 30,**  | **December 31,**  | **December 31,**  | **December 31,**  |
|  | **2022**  | **2022**  | **2021**  | **2022**  | **2021**  |
| **Revenue** |  |  |  |  |  |
| &nbsp;&nbsp;Investment management fees | $156346  | $160770  | $174867  | $664710  | $674539  |
| &nbsp;&nbsp;Fund administration and distribution fees | 45169  | 46490  | 54255  | 190090  | 215726  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total revenue** | **201515**  | **207260**  | **229122**  | **854800**  | **890265**  |
| **Expenses** |  |  |  |  |  |
| &nbsp;&nbsp;Personnel compensation and benefits | 58846  | 56869  | 62528  | 238198  | 234833  |
| &nbsp;&nbsp;Distribution and other asset-based expenses | 37634  | 39019  | 45200  | 161105  | 176385  |
| &nbsp;&nbsp;General and administrative | 13389  | 12301  | 12904  | 52373  | 53722  |
| &nbsp;&nbsp;Depreciation and amortization | 11150  | 10686  | 5384  | 43201  | 18840  |
| &nbsp;&nbsp;Change in value of consideration payable for acquisition of business | —  | (10500 ) | 3200  | (40600 ) | 13800  |
| &nbsp;&nbsp;Acquisition-related costs | 85  | 189  | 9997  | 534  | 16262  |
| &nbsp;&nbsp;Restructuring and integration costs | 808  | 56  | 85  | 881  | 2578  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | **121912**  | **108620**  | **139298**  | **455692**  | **516420**  |
| **Income from operations** | **79603**  | **98640**  | **89824**  | **399108**  | **373845**  |
| **Operating margin** | **39.5%** <br>  | **47.6%** <br>  | **39.2%** <br>  | **46.7%** <br>  | **42.0%** <br>  |
| **Other income (expense)** |  |  |  |  |  |
| &nbsp;&nbsp;Interest income and other income (expense) | 2633  | (1446 ) | 1498  | (2463 ) | 6045  |
| &nbsp;&nbsp;Interest expense and other financing costs | (13327 ) | (11479 ) | (5799 ) | (43964 ) | (24652 ) |
| &nbsp;&nbsp;Loss on debt extinguishment | 239  | (369 )  | —  | (2648 )  | (4596 )  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other expense, net | **(10455)** <br>  | **(13294)** <br>  | **(4301)** <br>  | **(49075)** <br>  | **(23203)** <br>  |
| **Income before income taxes** | **69148**  | **85346**  | **85523**  | **350033**  | **350642**  |
| **Income tax expense** | **(16879)** <br>  | **(12582)** <br>  | **(15781)** <br>  | **(74522)** <br>  | **(72253)** <br>  |
| **Net income** | $**52269**  | $**72764**  | $**69742**  | $**275511**  | $**278389**  |
| **Earnings per share of common stock** |  |  |  |  |  |
| &nbsp;&nbsp;Basic | $0.77  | $1.06  | $1.02  | $4.02  | $4.10  |
| &nbsp;&nbsp;Diluted | 0.74  | 1.01  | 0.94  | 3.81  | 3.75  |
| **Weighted average number of shares outstanding** |  |  |  |  |  |
| &nbsp;&nbsp;Basic | 68054  | 68609  | 68378  | 68481  | 67976  |
| &nbsp;&nbsp;Diluted | 70685  | 71877  | 73973  | 72266  | 74151  |
| Dividends declared per share | $0.25  | $0.25  | $0.17  | $1.00  | $0.53  |

---

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Victory Capital Holdings, Inc. and Subsidiaries** **Reconciliation of GAAP to Non-GAAP Measures<sup>1</sup>** <br> ***(unaudited; in thousands except per share data and percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Reconciliation of GAAP to Non-GAAP Measures<sup>1</sup>** <br> ***(unaudited; in thousands except per share data and percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Reconciliation of GAAP to Non-GAAP Measures<sup>1</sup>** <br> ***(unaudited; in thousands except per share data and percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Reconciliation of GAAP to Non-GAAP Measures<sup>1</sup>** <br> ***(unaudited; in thousands except per share data and percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Reconciliation of GAAP to Non-GAAP Measures<sup>1</sup>** <br> ***(unaudited; in thousands except per share data and percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Reconciliation of GAAP to Non-GAAP Measures<sup>1</sup>** <br> ***(unaudited; in thousands except per share data and percentages)***  |
|  | **For the Three Months Ended**  | **For the Three Months Ended**  | **For the Three Months Ended**  | **For the Yeard Ended**  | **For the Yeard Ended**  |
|  | **December 31,**  | **September 30,**  | **December 31,**  | **December 31,**  | **December 31,**  |
|  | **2022**  | **2022**  | **2021**  | **2022**  | **2021**  |
| **Net income (GAAP)** | $**52269**  | $**72764**  | $**69742**  | $**275511**  | $**278389**  |
| Income tax expense | (16879 )  | (12582 )  | (15781 )  | (74522 )  | (72253 )  |
| **Income before income taxes** | $**69148**  | $**85346**  | $**85523**  | $**350033**  | $**350642**  |
| &nbsp;&nbsp;Interest expense | 12006  | 10795  | 5328  | 41024  | 24285  |
| &nbsp;&nbsp;Depreciation | 1959  | 2030  | 1746  | 8045  | 6209  |
| &nbsp;&nbsp;Other business taxes | 448  | 539  | 383  | 2118  | 1657  |
| &nbsp;&nbsp;Amortization of acquisition-related intangible assets | 9191  | 8657  | 3638  | 35160  | 12631  |
| &nbsp;&nbsp;Stock-based compensation | 2420  | 2230  | 2499  | 10143  | 13110  |
| &nbsp;&nbsp;Acquisition, restructuring and exit costs | 3997  | (7842 ) | 15188  | (28722 ) | 34546  |
| &nbsp;&nbsp;Debt issuance costs | 935  | 1064  | 532  | 5620  | 5589  |
| &nbsp;&nbsp;Losses from equity method investments | —  | 759  | 104  | 825  | 331  |
| **Adjusted EBITDA** | $**100104**  | $**103578**  | $**114941**  | $**424246**  | $**449000**  |
| **Adjusted EBITDA margin** | **49.7%** <br>  | **50.0%** <br>  | **50.2%** <br>  | **49.6%** <br>  | **50.4%** <br>  |
| **Net income (GAAP)** | $**52269**  | $**72764**  | $**69742**  | $**275511**  | $**278389**  |
| *Adjustment to reflect the operating performance of the Company* |  |  |  |  |  |
| &nbsp;&nbsp;Other business taxes | 448  | 539  | 383  | 2118  | 1657  |
| &nbsp;&nbsp;Amortization of acquisition-related intangible assets | 9191  | 8657  | 3638  | 35160  | 12631  |
| &nbsp;&nbsp;Stock-based compensation | 2420  | 2230  | 2499  | 10143  | 13110  |
| &nbsp;&nbsp;Acquisition, restructuring and exit costs | 3997  | (7842 ) | 15188  | (28722 ) | 34546  |
| &nbsp;&nbsp;Debt issuance costs | 935  | 1064  | 532  | 5620  | 5589  |
| &nbsp;&nbsp;Tax effect of above adjustments | (4247 )  | (1163 )  | (5560 )  | (6080 )  | (16883 )  |
| **Adjusted net income** | $**65013**  | $**76249**  | $**86422**  | $**293750**  | $**329039**  |
| **Adjusted net income per diluted share** | $**0.92**  | $**1.06**  | $**1.17**  | $**4.06**  | $**4.44**  |
| **Tax benefit of goodwill and acquired intangible assets** | $**9513**  | $**9328**  | $**7258**  | $**37490**  | $**28012**  |
| **Tax benefit of goodwill and acquired intangible assets per diluted share** | $**0.13**  | $**0.13**  | $**0.10**  | $**0.52**  | $**0.38**  |
| **Adjusted net income with tax benefit** | $**74526**  | $**85577**  | $**93680**  | $**331240**  | $**357051**  |
| **Adjusted net income with tax benefit per diluted share** | $**1.05**  | $**1.19**  | $**1.27**  | $**4.58**  | $**4.82**  |

---

<sup>1<sub> </sub></sup>The Company reports its financial results in accordance with GAAP. Adjusted EBITDA and Adjusted Net Income are not defined by GAAP and should not be regarded as an alternative to any measurement under GAAP. Please refer to the section "Information Regarding Non-GAAP Financial Measures" at the end of this press release for an explanation of Non-GAAP financial measures and a reconciliation to the nearest GAAP financial measure.

------

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| | | |
|:---|:---|:---|
| **Victory Capital Holdings, Inc. and Subsidiaries** **Unaudited Consolidated Balance Sheets** <br> ***(In thousands, except for shares)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Unaudited Consolidated Balance Sheets** <br> ***(In thousands, except for shares)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Unaudited Consolidated Balance Sheets** <br> ***(In thousands, except for shares)***  |
|  | **December 31, 2022** | **December 31, 2021** |
| **Assets** |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $38171  | $69533  |
| &nbsp;&nbsp;Investment management fees receivable | 68347  | 80634  |
| &nbsp;&nbsp;Fund administration and distribution fees receivable | 14379  | 17123  |
| &nbsp;&nbsp;Other receivables | 1747  | 6548  |
| &nbsp;&nbsp;Prepaid expenses | 8443  | 6654  |
| &nbsp;&nbsp;Investments in proprietary funds, at fair value | 466  | 912  |
| &nbsp;&nbsp;Trading securities, at fair value | 26800  | 30812  |
| &nbsp;&nbsp;Property and equipment, net | 21146  | 25295  |
| &nbsp;&nbsp;Goodwill | 981805  | 981805  |
| &nbsp;&nbsp;Other intangible assets, net | 1314637  | 1349797  |
| &nbsp;&nbsp;Other assets | 64958  | 10633  |
| **Total assets** | $**2540899**  | $**2579746**  |
| **Liabilities and stockholders' equity** |  |  |
| &nbsp;&nbsp;Accounts payable and accrued expenses | $50862  | $62102  |
| &nbsp;&nbsp;Accrued compensation and benefits | 58458  | 53905  |
| &nbsp;&nbsp;Consideration payable for acquisition of business | 230400  | 309380  |
| &nbsp;&nbsp;Deferred compensation plan liability | 26800  | 30812  |
| &nbsp;&nbsp;Deferred tax liability, net | 108138  | 63120  |
| &nbsp;&nbsp;Other liabilities | 15317  | 2576  |
| &nbsp;&nbsp;Long-term debt<sup>(1)</sup> | 985514  | 1127924  |
| **Total liabilities** | **1475489**  | **1649819**  |
| **Stockholders' equity:** |  |  |
| &nbsp;&nbsp;Common stock; $0.01 par value per share: 2022 - 600,000,000 shares authorized, 80,528,137 shares issued and 67,325,534 shares outstanding; 2021 - 600,000,000 shares authorized, 77,242,372 shares issued and 68,662,779 shares outstanding | 805  | 772  |
| &nbsp;&nbsp;Additional paid-in capital | 705466  | 673572  |
| &nbsp;&nbsp;Treasury stock, at cost: 2022 - 13,202,603 shares; 2021 - 8,579,593 shares | (285425 ) | (153200 ) |
| &nbsp;&nbsp;Accumulated other comprehensive income | 35442  | 5972  |
| &nbsp;&nbsp;Retained earnings | 609122  | 402811  |
| **Total stockholders' equity** | **1065410**  | **929927**  |
| **Total liabilities and stockholders' equity** | $**2540899**  | $**2579746**  |

---

<sup>1</sup> Balances at December 31, 2022 and December 31, 2021 are shown net of unamortized loan discount and debt issuance costs in the amount of $16.2 million and $23.3 million, respectively. The gross amount of the debt outstanding was $1,001.7 million as of December 31, 2022 and $1,151.2 million as of December 31, 2021. <br>

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management** <br> ***(unaudited; in millions except for percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management** <br> ***(unaudited; in millions except for percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management** <br> ***(unaudited; in millions except for percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management** <br> ***(unaudited; in millions except for percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management** <br> ***(unaudited; in millions except for percentages)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management** <br> ***(unaudited; in millions except for percentages)***  |
|  | **For the Three Months Ended**  | **For the Three Months Ended**  | **For the Three Months Ended**  | **% Change from**  | **% Change from**  |
|  | **December 31,**  | **September 30,**  | **December 31,**  | **September 30,**  | **December 31,**  |
|  | **2022**  | **2022**  | **2021**  | **2022**  | **2021**  |
| Beginning assets under management | $147257  | $154947  | $159889  | -5%  | -8%  |
| &nbsp;&nbsp;Gross client cash inflows | 6681  | 6796  | 5565  | -2%  | 20%  |
| &nbsp;&nbsp;Gross client cash outflows | (11147 )  | (7368 )  | (9065 )  | 51%  | 23%  |
| Net client cash flows | (4466 ) | (573 ) | (3500 ) | 679%  | 28%  |
| Market appreciation (depreciation) | 10492  | (7066 ) | 7224  | N/A  | 45%  |
| Realizations and distributions | (295 ) | (51 ) | —  | 478%  | N/A  |
| Acquired assets / Net transfers<sup>1</sup> | (36 )  | —  | 20042  | N/A  | N/A  |
| Ending assets under management | 152952  | 147257  | 183654  | 4%  | -17%  |
| Average assets under management | 154632  | 158903  | 162295  | -3%  | -5%  |
|  | **For the Year Ended**  | **For the Year Ended**  |  | **% Change from**  |  |
|  | **December 31,**  | **December 31,**  |  | **December 31,**  |  |
|  | **2022**  | **2021**  |  | **2021**  |  |
| Beginning assets under management | $183654  | $147241  |  | 25%  |  |
| &nbsp;&nbsp;Gross client cash inflows | 33934  | 28254  |  | 20%  |  |
| &nbsp;&nbsp;Gross client cash outflows | (36666 )  | (32734 )  |  | 12%  |  |
| Net client cash flows | (2732 ) | (4480 ) |  | -39%  |  |
| Market appreciation (depreciation) | (26495 ) | 20583  |  | N/A  |  |
| Realizations and distributions | (376 ) | —  |  | N/A  |  |
| Acquired assets / Net transfers<sup>2</sup> | (1100 )  | 20310  |  | N/A  |  |
| Ending assets under management | 152952  | 183654  |  | -17%  |  |
| Average assets under management | 164025  | 158590  |  | 3%  |  |

---

<sup>1</sup> The three months ended December 31, 2021 includes acquired assets of $795 million and $19.3 billion associated with the NEC and WestEnd acquisitions, which closed on November 1, 2021 and December 31, 2021, respectively. The WestEnd acquired assets had no economic impact on operations in 2021 and no effect on asset flows, revenues, or earnings in the fourth-quarter period ended December 31, 2021. <br> <sup>2</sup> The year ended December 31, 2021 includes acquired assets of $547 million, $795 million and $19.3 billion associated with the THB, NEC and WestEnd acquisitions, which closed on March 1, 2021, November 1, 2021 and December 31, 2021, respectively. The WestEnd acquired assets had no economic impact on operations in 2021 and no effect on asset flows, revenues, or earnings in the full-year period ended December 31, 2021. <br>

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  |
| **For the Three Months Ended** | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  |
|  | <br> **U.S. Mid** <br> **Cap Equity**  | <br> **U.S. Small** <br> **Cap Equity**  | <br> **Fixed** <br> **Income**  | <br> **U.S. Large** <br> **Cap Equity**  | **Global /** <br> **Non-U.S.** <br> **Equity**  | <br><br> **Solutions**  | <br> **Alternative** <br> **Investments**  | <br> **Total** <br> **Long-term**  | <br> **Money Market /** <br> **Short-term**  | <br><br> **Total**  |
| **December 31, 2022** |  |  |  |  |  |  |  |  |  |  |
| Beginning assets under management | $25754  | $14109  | $27198  | $10762  | $12293  | $48551  | $5334  | $144001  | $3256  | $147257  |
| &nbsp;&nbsp;Gross client cash inflows | 1442  | 754  | 1342  | 87  | 1025  | 1372  | 479  | 6502  | 179  | 6681  |
| &nbsp;&nbsp;Gross client cash outflows | (2259 )  | (1133 )  | (2694 )  | (450 )  | (767 )  | (1697 )  | (1907 )  | (10906 )  | (241 )  | (11147 )  |
| Net client cash flows | (818 ) | (379 ) | (1352 ) | (362 ) | 258  | (324 ) | (1427 ) | (4405 ) | (62 ) | (4466 ) |
| Market appreciation (depreciation) | 2963  | 1378  | 601  | 680  | 1628  | 3166  | 48  | 10464  | 28  | 10492  |
| Realizations and distributions | —  | —  | —  | —  | —  | —  | (295 ) | (295 ) | —  | (295 ) |
| Acquired assets / Net transfers | (8 )  | (6 )  | (94 )  | (106 )  | (19 )  | 114  | 3  | (116 )  | 80  | (36 )  |
| Ending assets under management | $27892  | $15103  | $26353  | $10973  | $14160  | $51507  | $3663  | $149649  | $3302  | $152952  |
| **September 30, 2022** |  |  |  |  |  |  |  |  |  |  |
| Beginning assets under management | $26356  | $14837  | $29398  | $11857  | $13257  | $50485  | $5617  | $151807  | $3140  | $154947  |
| &nbsp;&nbsp;Gross client cash inflows | 1508  | 589  | 1123  | 67  | 742  | 1745  | 827  | 6601  | 194  | 6796  |
| &nbsp;&nbsp;Gross client cash outflows | (1176 )  | (939 )  | (1958 )  | (269 )  | (636 )  | (1315 )  | (863 )  | (7155 )  | (214 )  | (7368 )  |
| Net client cash flows | 333  | (349 ) | (835 ) | (203 ) | 107  | 430  | (36 ) | (553 ) | (19 ) | (573 ) |
| Market appreciation (depreciation) | (938 ) | (404 ) | (829 ) | (560 ) | (1248 ) | (2930 ) | (165 ) | (7074 ) | 8  | (7066 ) |
| Realizations and distributions | —  | —  | —  | —  | —  | —  | (51 ) | (51 ) | —  | (51 ) |
| Acquired assets / Net transfers | 3  | 26  | (536 )  | (333 )  | 178  | 566  | (31 )  | (127 )  | 127  | —  |
| Ending assets under management | $25754  | $14109  | $27198  | $10762  | $12293  | $48551  | $5334  | $144001  | $3256  | $147257  |
| **December 31, 2021<sup>1</sup>** |  |  |  |  |  |  |  |  |  |  |
| Beginning assets under management | $29798  | $19863  | $36931  | $14803  | $15840  | $38330  | $1158  | $156722  | $3166  | $159889  |
| &nbsp;&nbsp;Gross client cash inflows | 1564  | 762  | 1386  | 96  | 533  | 782  | 358  | 5481  | 84  | 5565  |
| &nbsp;&nbsp;Gross client cash outflows | (2617 )  | (1205 )  | (3077 )  | (367 )  | (577 )  | (968 )  | (73 )  | (8883 )  | (182 )  | (9065 )  |
| Net client cash flows | (1053 ) | (443 ) | (1691 ) | (271 ) | (44 ) | (186 ) | 286  | (3402 ) | (98 ) | (3500 ) |
| Market appreciation (depreciation) | 1840  | 942  | 133  | 1025  | 291  | 2959  | 23  | 7213  | 10  | 7224  |
| Realizations and distributions | —  | —  | —  | —  | —  | —  | —  | —  | —  | —  |
| Acquired assets / Net transfers<sup>2</sup> | (8 )  | (269 )  | (220 )  | 209  | (37 )  | 19262  | 1081  | 20020  | 22  | 20042  |
| Ending assets under management | $30578  | $20094  | $35154  | $15766  | $16050  | $60364  | $2548  | $180554  | $3100  | $183654  |

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<sup>1</sup> Beginning in January 2022, the Company's "Other" asset class has been categorized to Solutions, Fixed Income, Global / Non-U.S. Equity, and Alternative Investments based on the underlying investment strategy. Additionally, all assets managed using alternative investment strategies are now included in the Company's Alternative Investments asset class. Prior-period figures have been adjusted accordingly. <br> <sup>2</sup> The three months ended December 31, 2021 includes acquired assets of $795 million and $19.3 billion associated with the NEC and WestEnd acquisitions, which closed on November 1, 2021 and December 31, 2021, respectively. The WestEnd acquired assets had no economic impact on operations in 2021 and no effect on asset flows, revenues, or earnings in the fourth-quarter period ended December 31, 2021. <br>

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Asset Class** <br> ***(unaudited; in millions)***  |
| **For the Year Ended** | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  | **By Asset Class**  |
|  | <br> **U.S. Mid** <br> **Cap Equity**  | <br> **U.S. Small** <br> **Cap Equity**  | <br> **Fixed** <br> **Income**  | <br> **U.S. Large** <br> **Cap Equity**  | **Global /** <br> **Non-U.S.** <br> **Equity**  | <br><br> **Solutions**  | <br> **Alternative** <br> **Investments**  | <br> **Total** <br> **Long-term**  | <br> **Money Market /** <br> **Short-term**  | <br><br> **Total**  |
| **December 31, 2022** |  |  |  |  |  |  |  |  |  |  |
| Beginning assets under management | $30578  | $20094  | $35154  | $15766  | $16050  | $60364  | $2548  | $180554  | $3100  | $183654  |
| &nbsp;&nbsp;Gross client cash inflows | 6859  | 3162  | 5524  | 406  | 4149  | 8169  | 5045  | 33313  | 621  | 33934  |
| &nbsp;&nbsp;Gross client cash outflows | (6919 )  | (5214 )  | (9545 )  | (1498 )  | (3111 )  | (6247 )  | (3324 )  | (35858 )  | (807 )  | (36666 )  |
| Net client cash flows | (60 ) | (2053 ) | (4020 ) | (1093 ) | 1038  | 1921  | 1721  | (2545 ) | (187 ) | (2732 ) |
| Market appreciation (depreciation) | (2641 ) | (2965 ) | (3345 ) | (3328 ) | (3153 ) | (10887 ) | (215 ) | (26533 ) | 39  | (26495 ) |
| Realizations and distributions | —  | —  | —  | —  | —  | —  | (376 ) | (376 ) | —  | (376 ) |
| Acquired assets / Net transfers | 14  | 27  | (1436 )  | (372 )  | 226  | 107  | (16 )  | (1450 )  | 350  | (1100 )  |
| Ending assets under management | $27892  | $15103  | $26353  | $10973  | $14160  | $51507  | $3663  | $149649  | $3302  | $152952  |
| **December 31, 2021<sup>1</sup>** |  |  |  |  |  |  |  |  |  |  |
| Beginning assets under management | $26230  | $18368  | $36639  | $14230  | $14141  | $33676  | $422  | $143706  | $3534  | $147241  |
| &nbsp;&nbsp;Gross client cash inflows | 5935  | 4562  | 6756  | 364  | 2822  | 6217  | 1213  | 27869  | 386  | 28254  |
| &nbsp;&nbsp;Gross client cash outflows | (7742 )  | (5644 )  | (9000 )  | (1565 )  | (2362 )  | (5305 )  | (201 )  | (31820 )  | (914 )  | (32734 )  |
| Net client cash flows | (1807 ) | (1082 ) | (2244 ) | (1202 ) | 460  | 912  | 1012  | (3952 ) | (528 ) | (4480 ) |
| Market appreciation (depreciation) | 6169  | 2685  | 649  | 2766  | 1662  | 6611  | 30  | 20573  | 10  | 20583  |
| Realizations and distributions | —  | —  | —  | —  | —  | —  | —  | —  | —  | —  |
| Acquired assets / Net transfers<sup>2</sup> | (14 )  | 122  | 110  | (28 )  | (214 )  | 19165  | 1084  | 20226  | 84  | 20310  |
| Ending assets under management | $30578  | $20094  | $35154  | $15766  | $16050  | $60364  | $2548  | $180554  | $3100  | $183654  |

---

<sup>1</sup> Beginning in January 2022, the Company's "Other" asset class has been categorized to Solutions, Fixed Income, Global / Non-U.S. Equity, and Alternative Investments based on the underlying investment strategy. Additionally, all assets managed using alternative investment strategies are now included in the Company's Alternative Investments asset class. Prior-period figures have been adjusted accordingly. <br> <sup>2</sup> The year ended December 31, 2021 includes acquired assets of $547 million, $795 million and $19.3 billion associated with the THB, NEC and WestEnd acquisitions, which closed on March 1, 2021, November 1, 2021 and December 31, 2021, respectively. The WestEnd acquired assets had no economic impact on operations in 2021 and no effect on asset flows, revenues, or earnings in the full-year period ended December 31, 2021. <br>

------

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| | | | | |
|:---|:---|:---|:---|:---|
| **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Vehicle** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Vehicle** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Vehicle** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Vehicle** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Vehicle** <br> ***(unaudited; in millions)***  |
| **For the Three Months Ended** | **By Vehicle**  | **By Vehicle**  | **By Vehicle**  | **By Vehicle**  |
|  | <br><br> **Mutual** <br> **Funds<sup>1</sup>**  | <br><br> **ETFs<sup>2</sup>**  | **Separate** <br> **Accounts** <br> **and Other** <br> **Vehicles<sup>3</sup>**  | <br><br> **Total**  |
| **December 31, 2022** |  |  |  |  |
| Beginning assets under management | $96591  | $5110  | $45557  | $147257  |
| &nbsp;&nbsp;Gross client cash inflows | 4217  | 378  | 2087  | 6681  |
| &nbsp;&nbsp;Gross client cash outflows | (7953 )  | (178 )  | (3016 )  | (11147 )  |
| Net client cash flows | (3736 ) | 200  | (930 ) | (4466 ) |
| Market appreciation (depreciation) | 6620  | 327  | 3546  | 10492  |
| Realizations and distributions | —  | —  | (295 ) | (295 ) |
| Acquired assets / Net transfers | (27 )  | (9 )  | —  | (36 )  |
| Ending assets under management | $99447  | $5627  | $47877  | $152952  |
| **September 30, 2022** |  |  |  |  |
| Beginning assets under management | $102297  | $5155  | $47494  | $154947  |
| &nbsp;&nbsp;Gross client cash inflows | 4277  | 515  | 2003  | 6796  |
| &nbsp;&nbsp;Gross client cash outflows | (5689 )  | (196 )  | (1484 )  | (7368 )  |
| Net client cash flows | (1411 ) | 319  | 519  | (573 ) |
| Market appreciation (depreciation) | (4290 ) | (383 ) | (2393 ) | (7066 ) |
| Realizations and distributions | —  | —  | (51 ) | (51 ) |
| Acquired assets / Net transfers | (5 )  | 18  | (13 )  | —  |
| Ending assets under management | $96591  | $5110  | $45557  | $147257  |
| **December 31, 2021** |  |  |  |  |
| Beginning assets under management | $121367  | $4371  | $34151  | $159889  |
| &nbsp;&nbsp;Gross client cash inflows | 4289  | 260  | 1016  | 5565  |
| &nbsp;&nbsp;Gross client cash outflows | (6925 )  | (65 )  | (2075 )  | (9065 )  |
| Net client cash flows | (2635 ) | 195  | (1059 ) | (3500 ) |
| Market appreciation (depreciation) | 5426  | 308  | 1489  | 7224  |
| Realizations and distributions | —  | —  | —  | —  |
| Acquired assets / Net transfers<sup>4</sup> | (15 )  | (3 )  | 20060  | 20042  |
| Ending assets under management | $124142  | $4871  | $54641  | $183654  |

---

<sup>1</sup> Includes institutional and retail share classes, money market and VIP funds. <br> <sup>2</sup> Represents only ETF assets held by third parties. Excludes ETF assets held by other Victory Capital products. <br> <sup>3</sup> Includes collective trust funds, wrap program accounts, UMAs, UCITS, private funds and non-U.S. domiciled pooled vehicles. <br> <sup>4</sup> The three months ended December 31, 2021 includes acquired assets of $795 million and $19.3 billion associated with the NEC and WestEnd acquisitions, which closed on November 1, 2021 and December 31, 2021, respectively. The WestEnd acquired assets had no economic impact on operations in 2021 and no effect on asset flows, average assets, revenues, or earnings in the fourth-quarter period ended December 31, 2021. <br>

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Vehicle** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Vehicle** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Vehicle** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Vehicle** <br> ***(unaudited; in millions)***  | **Victory Capital Holdings, Inc. and Subsidiaries** **Assets Under Management by Vehicle** <br> ***(unaudited; in millions)***  |
| **For the Year Ended** | **By Vehicle**  | **By Vehicle**  | **By Vehicle**  | **By Vehicle**  |
|  | <br><br> **Mutual** <br> **Funds<sup>1</sup>**  | <br><br> **ETFs<sup>2</sup>**  | **Separate** <br> **Accounts** <br> **and Other** <br> **Vehicles<sup>3</sup>**  | <br><br> **Total**  |
| **December 31, 2022** |  |  |  |  |
| Beginning assets under management | $124142  | $4871  | $54641  | $183654  |
| &nbsp;&nbsp;Gross client cash inflows | 21198  | 2043  | 10692  | 33934  |
| &nbsp;&nbsp;Gross client cash outflows | (27703 )  | (572 )  | (8391 )  | (36666 )  |
| Net client cash flows | (6505 ) | 1472  | 2302  | (2732 ) |
| Market appreciation (depreciation) | (17092 ) | (724 ) | (8679 ) | (26495 ) |
| Realizations and distributions | —  | —  | (376 ) | (376 ) |
| Acquired assets / Net transfers | (1098 )  | 9  | (11 )  | (1100 )  |
| Ending assets under management | $99447  | $5627  | $47877  | $152952  |
| **December 31, 2021** |  |  |  |  |
| Beginning assets under management | $112998  | $3976  | $30267  | $147241  |
| &nbsp;&nbsp;Gross client cash inflows | 19070  | 849  | 8335  | 28254  |
| &nbsp;&nbsp;Gross client cash outflows | (23345 )  | (375 )  | (9014 )  | (32734 )  |
| Net client cash flows | (4275 ) | 474  | (678 ) | (4480 ) |
| Market appreciation (depreciation) | 15638  | 828  | 4117  | 20583  |
| Realizations and distributions | —  | —  | —  | —  |
| Acquired assets / Net transfers<sup>4</sup> | (219 )  | (407 )  | 20936  | 20310  |
| Ending assets under management | $124142  | $4871  | $54641  | $183654  |

---

<sup>1</sup> Includes institutional and retail share classes, money market and VIP funds. <br> <sup>2</sup> Represents only ETF assets held by third parties. Excludes ETF assets held by other Victory Capital products. <br> <sup>3</sup> Includes collective trust funds, wrap program accounts, UMAs, UCITS, private funds and non-U.S. domiciled pooled vehicles. <br> <sup>4</sup> The year ended December 31, 2021 includes acquired assets of $547 million, $795 million and $19.3 billion associated with the THB, NEC and WestEnd acquisitions, which closed on March 1, 2021, November 1, 2021 and December 31, 2021, respectively. The WestEnd acquired assets had no economic impact on operations in 2021 and no effect on asset flows, average assets, revenues, or earnings in the full-year period ended December 31, 2021. <br>

------

 **<u>Information Regarding Non-GAAP Financial Measures</u>**

Victory Capital uses non-GAAP financial measures referred to as Adjusted EBITDA and Adjusted Net Income to measure the operating profitability of the Company. These measures eliminate the impact of one-time acquisition, restructuring and integration costs and demonstrate the ongoing operating earnings metrics of the Company. The Company has included these non-GAAP measures to provide investors with the same financial metrics used by management to assess the operating performance of the Company.

 <u>Adjusted EBITDA</u>

Adjustments made to GAAP Net Income to calculate Adjusted EBITDA, as applicable, are:

* Adding back income tax expense; 

* Adding back interest paid on debt and other financing costs, net of interest income; 

* Adding back depreciation on property and equipment; 

* Adding back other business taxes; 

* Adding back amortization expense on acquisition-related intangible assets; 

* Adding back stock-based compensation expense associated with equity awards issued from pools created in connection with the management-led buyout and various acquisitions and as a result of equity grants related to the IPO; 

* Adding back direct incremental costs of acquisitions, including restructuring costs; 

* Adding back debt issuance cost expense; 

* Adjusting for earnings/losses on equity method investments. 

 <u>Adjusted Net Income</u>

Adjustments made to GAAP Net Income to calculate Adjusted Net Income, as applicable, are:

* Adding back other business taxes; 

* Adding back amortization expense on acquisition-related intangible assets; 

* Adding back stock-based compensation expense associated with equity awards issued from pools created in connection with the management-led buyout and various acquisitions and as a result of any equity grants related to the IPO; 

* Adding back direct incremental costs of acquisitions, including restructuring costs; 

* Adding back debt issuance cost expense; 

* Subtracting an estimate of income tax expense applied to the sum of the adjustments above. 

 <u>Tax Benefit of Goodwill and Acquired Intangible Assets</u>

Due to Victory Capital's acquisitive nature, tax deductions allowed on acquired intangible assets and goodwill provide it with additional significant supplemental economic benefit. The tax benefit of goodwill and intangible assets represent the tax benefits associated with deductions allowed for intangible assets and goodwill generated from prior acquisitions in which the Company received a step-up in basis for tax purposes. Acquired intangible assets and goodwill may be amortized for tax purposes, generally over a 15-year period. The tax benefit from amortization on these assets is included to show the full economic benefit of deductions for all acquired intangible assets with a step-up in tax basis.

## Contacts
 **Investors:** <br> Matthew Dennis, CFA <br> Chief of Staff <br> Director, Investor Relations <br> 216-898-2412 <br> mdennis@vcm.com

 **Media:** <br> Jessica Davila <br> Director, Global Communications <br> 210-694-9693 <br> jessica_davila@vcm.com