Victory Capital (NASDAQ:VCTR) reported record second-quarter results for 2026, supported by higher client assets, record long-term net inflows, expanded profitability and the completion of its Pioneer Investments integration.
Total client assets reached $346 billion at June 30, up 11% from the first quarter and 15% from a year earlier. Long-term gross flows rose 17% sequentially and 43% year over year to $22 billion, while net long-term inflows totaled a record $4.2 billion.
Record Revenue, Earnings and Margins
Revenue increased 12% from the prior quarter and 24% from a year earlier to a record $435.4 million. The company reported adjusted EBITDA of $243 million and an adjusted EBITDA margin of 55.8%, both records.
Adjusted net income with tax benefit was $182.9 million, or $2.21 per diluted share, up 21% sequentially and 41% from the second quarter of 2025. President, Chief Financial and Administrative Officer Michael Policarpo said adjusted earnings per diluted share with tax benefit had increased at an approximately 23% compound annual growth rate since Victory Capital’s 2018 IPO.
Following completion of the Pioneer integration, the company raised its long-term adjusted EBITDA margin guidance from 49%-50%. Policarpo said Victory Capital views 50% as an appropriate long-term normalized margin through a full market cycle, while preserving capacity to invest in its business and growth initiatives.
The company said it fully realized $110 million in net run-rate expense synergies from the Pioneer Investments acquisition. Total operating expenses were $241.6 million during the quarter, while cash compensation represented 22.9% of revenue. Policarpo said more than two-thirds of operating expenses are variable, providing flexibility across market environments.
Performance, ETF and International Momentum
Brown said investment performance remained central to client retention and growth. As of June 30, 57 Victory Capital mutual funds and ETFs held four- or five-star overall Morningstar ratings, representing 60% of the company’s rated assets under management.
- 71% of AUM outperformed benchmarks over one year.
- 68% outperformed over three years.
- 65% outperformed over five years.
- 81% outperformed over 10 years.
The company’s ETF business continued to expand. ETF AUM ended the quarter at $23.2 billion, up 24% year to date and 54% from a year earlier. Second-quarter ETF net flows were $1.2 billion, bringing the year-to-date total to $2.5 billion and representing an annualized organic growth rate of 27%.
Victory’s flagship free-cash-flow ETF, VFLO, ended the quarter with $7.8 billion in assets. Brown said the fund has outperformed the S&P 500, Russell 1000 Growth and Russell 1000 Value indexes during its three years since launch, while carrying no exposure to the “Mag Seven” stocks. The fund has also received a five-star overall Morningstar rating, he said.
Victory Capital said its ETFs are now available across Asia and, beginning in the second quarter, Latin America. The company plans to use its relationship with Amundi to continue expanding global ETF distribution.
International client AUM totaled $62.6 billion across 61 countries. The international business was net-flow positive during the quarter, year to date and cumulatively since the Pioneer acquisition closed, according to management. Brown said flows have been strongest across Asia and Europe, with emerging opportunities in the Middle East. Fixed income, global strategies and multi-asset products have contributed to international demand.
The company now sub-advises 23 UCITS products spanning equity, fixed-income and global multi-asset strategies, with additional UCITS launches planned in 2026 based on demand from Amundi’s local distribution teams.
Flow Outlook and Growth Strategy
Management said the positive flow trend extended into the third quarter. Brown described the momentum as broad-based rather than driven by a single client or outsized mandate. He cited activity in short-term fixed-income products, active fixed-income ETFs and demand across the Victory Income Investors and Pioneer franchises.
Policarpo said all of the company’s major channels—U.S. intermediary, U.S. institutional and international—contributed to the second-quarter results. Pioneer Investments, RS Global, RS Value and VictoryShares ETFs were among the franchises that generated positive long-term net inflows.
Victory Capital also reported a significant pipeline of mandates that have been won but not yet funded. Brown said the pipeline was among the largest the company has had and included fixed income, ETFs, global and multi-asset strategies across international, intermediary and institutional channels. The company did not provide a dollar figure for the pipeline.
Brown emphasized that acquisitions remain Victory Capital’s top capital-allocation priority. The company has completed eight acquisitions over the past 13 years and is targeting $1 trillion in assets under management over time. Brown said Victory remains active in evaluating significant acquisition opportunities but is not under pressure to complete a transaction quickly.
The company ended the quarter with $70 million of cash and a net leverage ratio of 1.0 times adjusted EBITDA. During the quarter, Victory repriced its Term Loan B, which Policarpo said will reduce annual interest expense by about $2.5 million. Its $100 million revolver remained undrawn.
Shareholder Returns
Victory Capital returned $138 million to shareholders during the second quarter, including repurchases of 1.1 million shares. Year to date, the company repurchased 3.2 million shares, exceeding its total repurchases in all of 2025.
The board also declared a quarterly cash dividend of $0.50 per share, payable Sept. 25 to shareholders of record as of Sept. 10.
Brown said share repurchases would remain opportunistic and secondary to strategic acquisitions, while the dividend represents an additional component of the company’s capital-return strategy.
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.
