Virtus Investment Partners (VRTS) investor relations material

Executive summary

• Q4 2025 was challenging, with AUM ending at $159.5 billion, down 6% sequentially, driven by $8.1 billion in net outflows, mainly from quality-oriented equity strategies, despite strong ETF flows and expansion into private markets.

• Adjusted operating income was $61.1 million, with an adjusted operating margin of 32.4% and adjusted EPS of $6.50, all modestly lower than the previous quarter.

• Capital was returned to shareholders and invested in growth, including a $40 million minority stake in Crescent Cove Advisors and a pending $200 million majority acquisition of Keystone National Group.

• Ongoing product innovation with new actively managed ETFs and plans for further launches.

Financial highlights

• Adjusted revenues for Q4 2025 were $188.9 million, down from $196.7 million in Q3; total sales were $5.3 billion.

• Adjusted net income was $44.5 million, and adjusted diluted EPS was $6.50, a 3% decrease from $6.69 in the prior quarter.

• Adjusted operating margin was 32.4%, slightly down from 33.0% sequentially.

• Adjusted employment expenses fell 3% to $95.8 million, reflecting lower variable compensation.

• Cash and equivalents at year-end were $386 million.

Outlook and guidance

• Early Q1 shows improved sales and net flows, especially in fixed income and ETFs.

• The acquisition of a majority interest in Keystone National Group is expected to close in Q1 2026, with an estimated $1.50 adjusted EPS contribution for 2026, assuming a March 1, 2026 closing.

• Fee rate guidance for Q1 is 41-42 basis points, expected to rise to 43-45 basis points post-Keystone acquisition.

• Employment expenses as a percentage of revenue expected at 49%-51% in Q1, rising to 50%-52% after Keystone.

• Effective tax rate expected at 25.3% in Q1, dropping to 23%-24% in Q2 with Keystone.