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- **ETF dominance**: 79% YoY growth in ETF AUM, with 77% of strategies outperforming peers.
- **Financial resilience**: Q3 EPS up 7% to $6.69, operating margin 33.4%, despite $3.9 billion net outflows.
- **Strategic flexibility**: $400 million debt refinancing enhances liquidity; 8th consecutive dividend increase.
- **Challenges ahead**: Quality equity underperformance in momentum-driven market, but long-term track record of 70% outperformance.

**【CEO Summary Section】**
- **Strong financial performance**: Q3 EPS of $6.69, up 7% from Q2, driven by higher average assets under management and stable operating expenses. Operating margin improved to 33.4%.
- **ETF success**: ETF assets reached $4.7 billion (79% YoY growth), with $0.9 billion in sales and net flows. 77% of ETF AUM outperformed benchmarks over 3 years.
- **Challenges in equity**: Net outflows of $3.9 billion due to underperformance of quality-oriented equity strategies in a momentum-driven market.
- **Strategic initiatives**: Completed $400 million term loan refinancing, increasing liquidity; raised dividend for the 8th consecutive year.
- **Pipeline expansion**: 21 ETFs with several new filings, including growth equity, real estate, and multi-managed fixed income strategies.

**【CFO Financial Commentary】**
- **AUM breakdown**: $169.3 billion total, with 33% in institutional, 28% in retail separate accounts, and 27% in U.S. retail mutual funds.
- **Sales and flows**: Q3 sales of $6.3 billion (12% QoQ growth), with $0.9 billion in ETF sales. Net outflows of $3.9 billion unchanged from Q2, driven by equity strategy outflows.
- **Expense management**: Operating expenses as a percentage of revenue declined to 15.8%, benefiting from $1 million in discrete business initiative expenses.
- **Liquidity**: $371 million in cash and $300 million in other investments, supporting capital returns and growth initiatives.

**【Q&A Key Highlights】**
- **ETF distribution focus**: Expanding access in wirehouses, RIAs, and model providers; 77% of ETFs outperform peers over 3 years.
- **Inorganic growth strategy**: Disciplined approach to acquisitions, prioritizing scale, differentiated capabilities, and private market expansion.
- **Flow outlook**: Positive trends in fixed income and alternatives offset by equity headwinds; ETF sales remain strong.
- **Capital allocation**: Buybacks ($50 million YTD) balanced with debt refinancing and growth investments.
- **Performance context**: Quality equity underperformance in 2-year period (S&P MidCap Quality trailing momentum by 32%), but long-term track record of 70% equity funds outperforming peers.

Virtus Investment Partners, Inc. (VRTS) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

VRTS

VRTS fundamentals

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