Victory Capital (NASDAQ: VCTR) reported Q1 EPS of $0.92, $0.03 better than the analyst estimate of $0.89. Revenue for the quarter came in at $204.42 million versus the consensus estimate of $206.28 million.

First Quarter 2020 Highlights

• Total Asset Under Management (AUM) of $123.8 billion
• Long-term gross flows of $7.3 billion; total net outflows of $2.9 billion
• GAAP operating margin of 44.3% and adjusted EBITDA margin of 44.8%1
• GAAP net income of $0.77 per diluted share, up 285% versus first quarter 2019
• Adjusted net income with tax benefit of $0.92 per diluted share, up 163% versus first quarter 20191
• Board authorizes regular quarterly cash dividend of $0.05 per share

“I am pleased to report Victory Capital generated excellent financial results during the first quarter, despite unprecedented challenges presented by the COVID-19 pandemic,” said David Brown, Chairman and Chief Executive Officer. “Advance preparation proved essential for delivering uninterrupted service to clients and providing safe working conditions for employees. Our comprehensive and thoroughly tested business continuity plan has ensured that all investment activities remain unaffected, and we have been energized by our organization’s ability to seamlessly adapt to challenging circumstances.

“Our cost structure also adjusted in real time with market fluctuations, proving the resiliency of our next-generation business model and contributing to first-quarter results exceeding expectations.

“Four of our investment franchises achieved positive long-term net flows during the quarter, and net outflows from fixed income products held up much better than the industry-wide averages.

“In addition, we took opportunistic action on the capital management front. Early in the quarter, we repriced our term loan to reduce the interest rate spread by 75 basis points. Later in the quarter, we promptly responded to falling interest rates and effectively locked in a rate of 3.465% on the majority of our current debt. At the same time, we maintained a disciplined capital allocation strategy and deployed most of our free cash flow to further reduce debt, while returning some capital to shareholders with steady share repurchases and the cash dividend. Since last year’s origination of the term loan on July 1, we have repaid $217 million and lowered the current outstanding balance to $883 million.

“Looking ahead, we continue to invest to support future growth and remain committed to executing on our strategy to enhance shareholder value. We are still actively evaluating strategic acquisition candidates and conducting due diligence. Persistent market volatility may accelerate industry consolidation and our flexible business model ideally positions us to benefit in this environment. As always, serving the needs of our clients will remain our top priority, and I am more optimistic than ever about our Company’s ability to withstand and thrive in ever-changing market environments.”

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