Virtus Investment Partners (VRTS) Q2 2025 earnings summary

Executive summary

• Assets under management (AUM) ended at $170.7 billion, up 2% sequentially, driven by market performance and ETF inflows, despite $3.9 billion in net outflows mainly from institutional and retail accounts.

• Adjusted diluted EPS was $6.25, up 9% sequentially, and diluted EPS was $6.12, up 51% sequentially and 152% year-over-year, aided by share repurchases and improved margins.

• Net income attributable to shareholders rose 48% sequentially and 141% year-over-year to $42.4 million.

• Share repurchases reached $30 million in Q2, the highest in three years, reducing shares outstanding by up to 3% year-to-date.

• Financial flexibility supported by significant liquidity, low net leverage, and a robust pipeline for new products and inorganic opportunities.

Financial highlights

• Revenues were $210.5 million, down 6.2% year-over-year and 3% sequentially; adjusted revenues were $191.0 million, down 3% sequentially.

• Operating margin as adjusted was 31.3%, up from 27.6% in Q1; GAAP operating margin was 21.5%.

• Adjusted operating income was $59.8 million, up 10% sequentially; net income attributable to the company was $42.4 million.

• Average fee rate was 41.3 bps, down from 41.7 bps in Q1, reflecting product mix and competitive pressures.

• Cash and cash equivalents at quarter-end were $172.2 million; net debt was $62.5 million, or 0.2x EBITDA.

Outlook and guidance

• Management expects continued AUM pressure from net outflows, partially offset by positive market performance, and projects employment expenses to trend toward the midpoint of the 49%-51% revenue range.

• Other operating expenses are projected to remain in the $30-$32 million range per quarter.

• Interest and dividend income expected to be about $4.3 million in Q3; deferred tax asset provides $18 million in annual cash tax benefits.

• Anticipated capital uses in Q3 include a new CLO launch and final SGA minority interest purchase, each around $30 million.

• No material changes to risk factors or critical accounting policies were reported for the quarter.