Victory Capital (NASDAQ: VCTR) reported Q4 EPS of $0.99, $0.06 better than the analyst estimate of $0.93. Revenue for the quarter came in at $218.6 million versus the consensus estimate of $216.76 million.

Fourth Quarter 2019 Highlights

• Total Assets Under Management (AUM) of $151.8 billion
• Long-term gross flows of $5.3 billion; long-term net outflows of $1.5 billion
• GAAP operating margin of 29.4%; GAAP earnings of $0.51 per diluted share
• Adjusted net income with tax benefit per diluted share of $0.991
• Adjusted EBITDA margin of 46.8%1
• Debt reduced by $85 million; run-rate net leverage ratio reduced to ~2.3x.
• Board authorizes regular quarterly cash dividend of $0.05 per share

“The past year was transformational on a number of levels for Victory Capital,” said David Brown, Chairman and Chief Executive Officer. “We significantly increased our size, scale, asset class and client diversification while continuing to deliver outstanding financial results for our shareholders.

“We posted record results for the fourth quarter and full-year 2019. Compared with last year, revenue rose 128% in the quarter, and by 48% during the year; while adjusted net income with tax benefit, increased 170%, and 67%, respectively. Adjusted EBITDA margin also set a record high at 46.8% in the final quarter of 2019, up 890 basis points from last year’s fourth quarter.

“Total AUM grew to $151.8 billion as of December 31, 2019. Quarter over quarter, our average fee rate was steady at 58.7 basis points. Long-term net inflows were positive for the year at $1.8 billion. We experienced long-term net outflows of $1.5 billion for the fourth quarter, due in part to client reallocations resulting from positive market momentum. This type of client rebalancing activity is cyclical in nature and reinforces the importance of diversification and taking a long-term view of our business. Our recently acquired fixed income and Solutions products made a significant contribution to the positive organic growth we achieved during 2019.

“Our outlook for 2020 is very positive. We continue to make steady progress on our integration efforts following the close of the acquisition of USAA Asset Management Company, and we remain ahead of schedule on the achievement of our previously disclosed cost synergies. We expect to begin realizing the growth opportunities available through the direct channel for USAA members as we progress through the coming year.

“Looking more broadly at our overall business, we intend to continue to grow organically by leveraging our diverse product platform and strong distribution capabilities across all our business channels. We also remain excited and committed to pursuing inorganic growth through acquisitions. We believe our integrated business model, which combines focus, operating scale and investment boutique-like qualities, makes us a compelling acquirer for investment firms in today’s environment.”

For earnings history and earnings-related data on Victory Capital (VCTR) click here.