What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2024-11-08 · 103 added, 162 removed, 444 unchanged (37% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(in thousands, except share data) September 30,

(in thousands, except share data) March 31,

2025 December 31,

8 unchanged sentences

Furniture, equipment and leasehold improvements, net 23,591 22,718

Operating lease right-of-use assets 57,499 57,131

Intangible assets, net 365,285 378,229

6 unchanged sentences

Accounts payable and accrued liabilities 56,699 49,492

Dividends payable 19,545 17,291

Contingent consideration 40,365 63,505

Debt 231,705 232,130

Operating lease liabilities 72,120 70,037

Other liabilities 17,968 15,932

7 unchanged sentences

Common stock, $ 0.01 par value, 1,000,000,000 shares authorized;

12,240,990 shares issued and 7,016,433 shares outstanding at September 30, 2024;

12,298,949 shares issued and 6,911,016 shares outstanding at March 31, 2025;

and 12,243,880 shares issued and 6,967,147 shares outstanding at December 31, 2024

2 unchanged sentences

Accumulated other comprehensive income (loss) ( 72 ) ( 364 )

Treasury stock, at cost, 5,224,557 and 5,075,500 shares at September 30, 2024 and December 31, 2023, respectively

Treasury stock, at cost, 5,387,933 and 5,276,733 shares at March 31, 2025 and December 31, 2024, respectively

( 709,594 ) ( 689,594 )

8 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share data) 2025 2024

9 unchanged sentences

Other operating expenses of consolidated investment products ("CIP") 1,000 690

Change in fair value of contingent consideration ( 4,000 ) — ( 7,300 ) ( 6,800 )

Restructuring expense — 797

28 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2025 2024

1 unchanged sentence

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment, net of tax of $( 144 ) and $ 82 for the three months ended September 30, 2024 and 2023, respectively, and $( 106 ) and $ 5 for the nine months ended September 30, 2024 and 2023, respectively

430 ( 226 ) 317 ( 15 )

Foreign currency translation adjustment, net of tax of $( 100 ) and $ 36 for the three months ended March 31, 2025 and 2024, respectively

Other comprehensive income (loss) 292 ( 100 )

6 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

(in thousands) 2025 2024

5 unchanged sentences

Equity in earnings of equity method investments ( 980 ) ( 498 )

Distributions from equity method investments 3,227 1,789

Realized and unrealized (gains) losses on investments, net 957 ( 3,393 )

Change in fair value of contingent consideration ( 7,300 ) ( 6,800 )

Lease termination ( 1,318 ) —

Deferred taxes, net 1,440 1,086

9 unchanged sentences

Change in other assets and liabilities of CIP 2,533 4,722

Amortization of discount on notes payable of CIP 1,887 —

Net cash provided by (used in) operating activities ( 3,787 ) ( 34,528 )

1 unchanged sentence

Capital expenditures ( 2,984 ) ( 1,923 )

Acquisition of businesses, net of cash acquired of $ 4,395

— ( 108,999 )

Change in cash and cash equivalents of CIP due to consolidation (deconsolidation), net — ( 537 )

Purchase of equity method investment — ( 11,645 )

Net cash provided by (used in) investing activities ( 2,984 ) ( 2,460 )

Cash Flows from Financing Activities:

Borrowings on credit agreement — 50,000

Repayments on credit agreement ( 687 ) ( 688 )

3 unchanged sentences

Taxes paid related to net share settlement of restricted stock units ( 6,109 ) ( 9,854 )

Affiliate equity sales (purchases) ( 29,014 ) ( 20,784 )

Investment management subsidiary equity sales (purchases) ( 1,053 ) ( 419 )

Net contributions from (distributions to) noncontrolling interests 17,264 16,772

Financing activities of CIP:

Payments on borrowings by CIP ( 123,590 ) ( 17,794 )

Borrowings by CIP 738,064 132,473

Net cash provided by (used in) financing activities ( 174,461 ) ( 56,146 )

6 unchanged sentences

Common stock dividends payable $ 15,550 $ 13,467

(in thousands) September 30,

(in thousands) March 31,

2025 December 31, 2024

18 unchanged sentences

(in thousands, except per share data) Shares Par Value Shares Amount

Balances at June 30, 2023 7,254,786 $ 122 $ 1,286,775 $ 174,011 $ ( 147 ) 4,903,533 $ ( 609,248 ) $ 851,513 $ 5,196 $ 856,709 $ 110,399

Net income (loss) — — — 30,906 — — — 30,906 671 31,577 6,577

Foreign currency translation adjustments — — — — ( 226 ) — — ( 226 ) — ( 226 ) —

Net subscriptions (redemptions) and other — — 3,218 — — — — 3,218 ( 419 ) 2,799 ( 20,710 )

Cash dividends declared ($ 1.90 per common share)

— — — ( 14,302 ) — — — ( 14,302 ) — ( 14,302 ) —

Repurchases of common shares ( 74,015 ) — — — — 74,015 ( 15,000 ) ( 15,000 ) — ( 15,000 ) —

Issuance of common shares related to employee stock transactions 1,992 — — — — — — — — — —

Taxes paid on stock-based compensation — — ( 214 ) — — — — ( 214 ) — ( 214 ) —

Stock-based compensation — — 6,209 — — — — 6,209 — 6,209 —

Balances at September 30, 2023 7,182,763 $ 122 $ 1,295,988 $ 190,615 $ ( 373 ) 4,977,548 $ ( 624,248 ) $ 862,104 $ 5,448 $ 867,552 $ 96,266

Balances at June 30, 2024 7,082,071 $ 122 $ 1,304,176 $ 226,540 $ ( 200 ) 5,151,707 $ ( 661,963 ) $ 868,675 $ 3,443 $ 872,118 $ 129,450

Net income (loss) — — — 40,980 — — — 40,980 401 41,381 7,723

Foreign currency translation adjustments — — — — 430 — — 430 — 430 —

Net subscriptions (redemptions) and other — — 5,187 — — — — 5,187 ( 168 ) 5,019 ( 39,062 )

Cash dividends declared ($ 2.25 per common share)

— — — ( 16,222 ) — — — ( 16,222 ) — ( 16,222 ) —

Repurchases of common shares ( 72,850 ) — — — — 72,850 ( 14,869 ) ( 14,869 ) — ( 14,869 ) —

Issuance of common shares related to employee stock transactions 7,212 — — — — — — — — — —

Taxes paid on stock-based compensation — — ( 827 ) — — — — ( 827 ) — ( 827 ) —

Stock-based compensation — — 5,692 — — — — 5,692 — 5,692 —

Balances at September 30, 2024 7,016,433 $ 122 $ 1,314,228 $ 251,298 $ 230 5,224,557 $ ( 676,832 ) $ 889,046 $ 3,676 $ 892,722 $ 98,111

Permanent Equity Temporary Equity

Common Stock Additional

Capital Retained Earnings (Accumulated

Deficit) Accumulated

Comprehensive

Income (Loss) Treasury Stock Total

Attributed To

Virtus Investment Partners, Inc.

Interests Total

Equity Redeemable

(in thousands, except per share data) Shares Par Value Shares Amount

Balances at December 31, 2023 7,087,728 $ 122 $ 1,300,999 $ 207,356 $ ( 87 ) 5,075,500 $ ( 644,464 ) $ 863,926 $ 4,363 $ 868,289 $ 104,869

8 unchanged sentences

Stock-based compensation — — 7,010 — — — — 7,010 — 7,010 —

Balances at September 30, 2023 7,182,763 $ 122 $ 1,295,988 $ 190,615 $ ( 373 ) 4,977,548 $ ( 624,248 ) $ 862,104 $ 5,448 $ 867,552 $ 96,266

Balances at March 31, 2024 7,127,881 $ 122 $ 1,298,157 $ 223,023 $ ( 187 ) 5,096,608 $ ( 649,463 ) $ 871,652 $ 4,351 $ 876,003 $ 115,185

Balances at December 31, 2024 6,967,147 $ 122 $ 1,319,108 $ 268,221 $ ( 364 ) 5,276,733 $ ( 689,594 ) $ 897,493 $ 4,143 $ 901,636 $ 107,282

8 unchanged sentences

Stock-based compensation — — 9,087 — — — — 9,087 — 9,087 —

Balances at September 30, 2024 7,016,433 $ 122 $ 1,314,228 $ 251,298 $ 230 5,224,557 $ ( 676,832 ) $ 889,046 $ 3,676 $ 892,722 $ 98,111

Balances at March 31, 2025 6,911,016 $ 123 $ 1,322,280 $ 280,979 $ ( 72 ) 5,387,933 $ ( 709,594 ) $ 893,716 $ 2,532 $ 896,248 $ 120,579

The accompanying notes are an integral part of these condensed consolidated financial statements.

8 unchanged sentences

mutual funds registered pursuant to the Investment Company Act of 1940, as amended that include U.S.

retail funds, exchange-traded funds ("ETFs") and variable insurance funds;

retail funds, exchange-traded funds ("ETFs");

Undertaking for Collective Investment in Transferable Securities and Qualifying Investor Funds ("global funds" and collectively with U.S.

retail funds, ETFs and variable insurance funds the "open-end funds");

retail funds and ETFs the "open-end funds");

closed-end funds (collectively with open-end funds, the "funds");

and retail separate accounts that include intermediary-sold and wealth management accounts.

retail separate accounts sold through intermediaries and wealth advisory services to high net worth clients through our wealth management business.

Basis of Presentation and Significant Accounting Policies

3 unchanged sentences

In the opinion of management, these financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Company’s financial condition and results of operations.

Operating results for the nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report on Form 10-K") filed with the Securities and Exchange Commission (the "SEC").

The Company’s significant accounting policies, which have been consistently applied, are summarized in its 2024 Annual Report on Form 10-K.

New Accounting Standards Not Yet Implemented

In November 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280) .

Recent Accounting Pronouncements

New Accounting Standards Implemented

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) .

This standard updates reportable segment disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss and provides new segment disclosure requirements for entities with a single reportable segment.

This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted, with the amendments to be applied retrospectively to all prior periods presented in the financial statements.

The Company is in the process of evaluating the impact of adopting this standard and, at this time, does not anticipate it will have a material impact on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740).

This standard updates income tax disclosure requirements by requiring disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid.

This standard is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is in the process of evaluating the impact of adopting this standard and, at this time, does not anticipate it will have a material impact on its consolidated financial statements.

The Company adopted this standard in its 2024 Annual Report on Form 10-K .

See Note 15 for a discussion of the Company's segment information.

In March 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718), Scope Application of Profits Interest and Similar Awards.

This standard provides clarity regarding whether profits interest and similar awards are within the scope of Topic 718 of the Accounting Standards Codification.

This standard is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company adopted this standard in its 2024 Annual Report on Form 10-K.

The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740).

The Company adopted this standard on January 1, 2025.

The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements.

New Accounting Standards Not Yet Implemented

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) .

The standard requires enhanced disclosures of certain expense captions presented on the face of the Consolidated Income Statement.

In January 2025, the FASB issued ASU 2025-01 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Clarifying the Effective

Date which clarifies that the standard is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted with amendments to be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements.

The Company is in the process of evaluating the impact of adopting this standard and, at this time, does not anticipate it will have a material impact on its consolidated financial statements.

6 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2025 2024

5 unchanged sentences

Total investment management fees $ 186,091 $ 188,360

AlphaSimplex Group, LLC

On April 1, 2023, the Company completed the acquisition of AlphaSimplex Group, LLC ("AlphaSimplex"), which was accounted for in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805").

The total purchase price paid of $ 113.4 million was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the acquisition.

Goodwill of $ 48.3 million and intangible assets of $ 55.4 million were recorded for the acquisition.

Intangible Assets, Net

4 unchanged sentences

Intangible amortization — ( 12,944 ) ( 12,944 ) — ( 12,944 )

Balances at September 30, 2024 $ 806,655 $ ( 460,250 ) $ 346,405 $ 42,298 $ 388,703

Balances at March 31, 2025 $ 809,064 $ ( 486,077 ) $ 322,987 $ 42,298 $ 365,285

Definite-lived intangible asset amortization for the remainder of fiscal year 2025 and succeeding fiscal years is estimated as follows:

5 unchanged sentences

Investments consist primarily of investments in the Company's sponsored products.

The Company's investments, excluding the assets of consolidated investment products ("CIP") discussed in Note 16, at September 30, 2024 and December 31, 2023 were as follows:

(in thousands) September 30,

The Company's investments, excluding the assets of consolidated investment products ("CIP") discussed in Note 14, at March 31, 2025 and December 31, 2024 were as follows:

(in thousands) March 31,

2025 December 31, 2024

5 unchanged sentences

Investment Securities - fair value

Investment securities - fair value consist of investments in the Company's sponsored funds and separately managed accounts.

Investment securities - fair value consist of investments in the Company's sponsored funds and in separate accounts.

The composition of the Company’s investment securities - fair value was as follows:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in thousands) Cost Fair Value Cost Fair Value

4 unchanged sentences

Total investment securities - fair value $ 81,001 $ 81,512 $ 82,083 $ 83,771

For the three and nine months ended September 30, 2024, the Company recognized net realized gains of $ 0.5 million and $ 1.2 million, respectively, related to its investment securities - fair value.

For the three and nine months ended September 30, 2023, the Company recognized net realized losses of $ 0.1 million and net realized gains of $ 2.1 million, respectively, related to its investment securities - fair value.

For the three months ended March 31, 2025, the Company recognized net realized gains of $ 0.2 million related to its investment securities - fair value.

For the three months ended March 31, 2024, the Company recognized net realized losses of $ 0.4 million related to its investment securities - fair value.

Fair Value Measurements

The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of CIP discussed in Note 16, as of September 30, 2024 and December 31, 2023 by fair value hierarchy level were as follows:

September 30, 2024

The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of CIP discussed in Note 14, as of March 31, 2025 and December 31, 2024 by fair value hierarchy level were as follows:

March 31, 2025

(in thousands) Level 1 Level 2 Level 3 Total

14 unchanged sentences

Equity securities 19,019 — — 19,019

Debt securities — 1,456 — 1,456

Nonqualified retirement plan assets 15,159 — — 15,159

5 unchanged sentences

Cash investments in money market funds are valued using published net asset values and are classified as Level 1.

Sponsored funds represent investments in open-end funds and closed-end funds for which the Company acts as the investment manager.

Sponsored funds represent investments in funds for which the Company acts as the investment manager.

The fair values of U.S.

2 unchanged sentences

Equity securities represent securities traded on active markets, are valued at the official closing price (typically the last sale or bid) on the exchange on which the securities are primarily traded and are categorized as Level 1.

Debt securities represent investments in corporate and government bonds and the note securities of collateralized loan obligations.

Debt securities represent investments in corporate and government bonds.

The fair values of corporate and government bonds traded on active markets are valued at the official closing price on the exchange on which the securities are primarily traded and are categorized as Level 1.

Debt securities for which closing prices are not readily available or are deemed to not reflect readily available market prices, and are valued using an independent pricing service, are categorized as Level 2.

The fair values of note securities of collateralized loan obligations ("CLO") are based on valuations received from an independent valuation firm and are categorized as Level 3.

The following table presents a reconciliation of beginning and ending balances of the Company's Level 3 debt securities:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023 2024 2023

Debt securities, beginning of period $ — $ — $ — $ —

Purchases (sales), net 24,443 24,339 24,443 24,339

Debt securities, end of period $ 24,443 $ 24,339 $ 24,443 $ 24,339

Nonqualified retirement plan assets represent mutual funds within the Company's nonqualified retirement plan whose fair value is determined based on their published net asset value and are categorized as Level 1.

Nonqualified retirement plan assets represent U.S.

retail funds within the Company's nonqualified retirement plan whose fair value is determined based on their published net asset value and are categorized as Level 1.

Contingent consideration represents liabilities associated with contingent payment arrangements made in connection with the Company's business combinations.

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2025 2024

1 unchanged sentence

Reduction for payments made ( 13,086 ) ( 14,492 )

Increase (reduction) of liability related to re-measurement of fair value ( 4,000 ) — ( 7,300 ) ( 6,800 )

Contingent consideration, end of period $ 23,014 $ 41,708

The contingent consideration related to the Westchester Capital Management transaction as of September 30, 2024 was $ 3.8 million, measured using an options pricing model valuation technique.

The contingent consideration related to the Westchester Capital Management transaction as of March 31, 2025 was $ 1.9 million, measured using an options pricing model valuation technique.

The most significant unobservable inputs used relate to revenue growth rates, discount rates (range of 6.3 %- 6.4 %) and the market price of risk adjustment ( 7.3 %).

The NFJ Investment Group contingent consideration liability as of September 30, 2024 was $ 30.6 million, measured using an options pricing model valuation technique.

The NFJ Investment Group contingent consideration liability as of March 31, 2025 was $ 21.1 million, measured using an options pricing

model valuation technique.

The most significant unobservable inputs used relate to the revenue growth rates, discount rates (range of 6.3 % - 6.4 %) and the market price of risk adjustment ( 6.5 %).

2 unchanged sentences

Dividends Declared

On August 14, 2024, the Company declared a quarterly cash dividend of $ 2.25 per common share to be paid on November 13, 2024 to shareholders of record at the close of business on October 31, 2024.

On February 26, 2025, the Company declared a quarterly cash dividend of $ 2.25 per common share to be paid on May 14, 2025 to shareholders of record at the close of business on April 30, 2025.

Common Stock Repurchases

During the three and nine months ended September 30, 2024, the Company repurchased 72,850 and 149,057 common shares, respectively, at a weighted average price of $ 204.07 and $ 217.12 per share, respectively, for a total cost, including fees and expenses, of $ 14.9 million and $ 32.4 million, respectively, under its share repurchase program.

As of September 30, 2024, 455,488 shares remained available for repurchase.

Under the terms of the program, the Company may repurchase shares of its common stock from time to time at its discretion through open market repurchases, privately negotiated transactions and/or other mechanisms, depending on price, prevailing market and business conditions, tax and other financial considerations.

During the three months ended March 31, 2025, the Company repurchased 111,200 common shares under its share repurchase program at a weighted average price of $ 179.83 per share, for a total cost, including fees and expenses, of $ 20.0 million.

As of March 31, 2025, 292,112 shares remained available for repurchase.

The program, which has no specified term, may be suspended or terminated at any time.

Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) were as follows:

Nine Months Ended

September 30,

(in thousands) 2024 2023

Balance at beginning of period $ ( 87 ) $ ( 358 )

Net current-period other comprehensive income (loss) (1) 317 ( 15 )

Balance at end of period $ 230 $ ( 373 )

(1) Consists of foreign currency translation adjustments, net of tax of $( 106 ) and $ 5 for the nine months ended September 30, 2024 and 2023, respectively.

Stock-Based Compensation

Equity-based awards, including restricted stock units ("RSUs"), performance stock units ("PSUs"), and unrestricted shares of common stock, have been granted to officers, employees and directors of the Company pursuant to the Company's Omnibus Incentive and Equity Plan (the "Omnibus Plan").

At September 30, 2024, 829,554 shares of common stock remained available for issuance of the 3,825,000 shares that are authorized for issuance under the Omnibus Plan.

Equity-based awards, including restricted stock units ("RSUs"), performance stock units ("PSUs"), stock options and unrestricted shares of common stock, may be granted to officers, employees and directors of the Company pursuant to the Company's Amended and Restated Omnibus Incentive and Equity Plan (the "Omnibus Plan").

At March 31, 2025, 697,306 shares of common stock remained available for issuance of the 3,825,000 shares that are authorized for issuance under the Omnibus Plan.

Stock-based compensation expense is summarized as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2025 2024

4 unchanged sentences

Shares that are issued upon vesting are newly issued shares from the Omnibus Plan and are not issued from treasury stock.

RSU activity, inclusive of PSUs, for the nine months ended September 30, 2024 is summarized as follows:

RSU activity, inclusive of PSUs, for the three months ended March 31, 2025 is summarized as follows:

of Shares Weighted Average

3 unchanged sentences

Settled ( 90,247 ) $ 205.49

Outstanding at September 30, 2024 321,531 $ 205.08

For the nine months ended September 30, 2024 and 2023, a total of 49,086 and 77,583 RSUs, respectively, were withheld by the Company as a result of net share settlements to settle minimum employee tax withholding obligations and for which the Company paid $ 11.3 million and $ 13.4 million, respectively, in minimum employee tax withholding obligations.

These net share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have otherwise been issued as a result of the vesting.

During the nine months ended September 30, 2024 and 2023, the Company granted 26,757 and 44,583 PSUs, respectively, that contain performance-based metrics in addition to a service condition.

Outstanding at March 31, 2025 358,818 $ 190.38

For the three months ended March 31, 2025 and 2024, a total of 35,178 and 42,588 RSUs, respectively, were withheld by the Company as a result of net share settlements to settle minimum employee tax withholding obligations and for which the Company paid $ 6.1 million and $ 9.9 million, respectively, in minimum employee tax withholding obligations.

These net share

settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have otherwise been issued as a result of the vesting.

During the three months ended March 31, 2025 and 2024, the Company granted 37,777 and 26,733 PSUs, respectively, that contain performance-based metrics in addition to a service condition.

Compensation expense for PSUs is generally recognized over a three-year service period based upon the value determined using a combination of (i) the intrinsic value method for awards that contain a performance metric that represents a "performance condition" in accordance with ASC 718, Stock Compensation ("ASC 718") and (ii) the Monte Carlo simulation valuation model for awards that contain a "market condition" performance metric under ASC 718.

1 unchanged sentence

Compensation expense for PSU awards with a performance condition is recorded each period based upon a probability assessment of the expected outcome of the performance metric with a final adjustment upon measurement at the end of the performance period.

As of September 30, 2024, unamortized stock-based compensation expense for unvested RSUs and PSUs was $ 33.3 million with a weighted-average remaining contractual life of 1.3 years.

As of March 31, 2025, unamortized stock-based compensation expense for unvested RSUs and PSUs was $ 45.1 million with a weighted-average remaining contractual life of 1.7 years.

Earnings (Loss) Per Share

4 unchanged sentences

The computation of basic and diluted EPS is as follows:

Three Months Ended September 30, Nine Months Ended

September 30,

Three Months Ended March 31,

(in thousands, except per share amounts) 2025 2024

9 unchanged sentences

The following table details the securities that have been excluded from the above computation of weighted-average number of shares for diluted EPS, because the effect would be anti-dilutive.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2025 2024

4 unchanged sentences

The provision for income taxes reflected U.S.

federal, state and local taxes at an estimated effective tax rate of 24.4 % and 23.6 % for the nine months ended September 30, 2024 and 2023, respectively.

The higher estimated effective tax rate for the nine months ended September 30, 2024 was primarily due to a change in excess tax benefits associated with stock-based compensation.

federal, state and local taxes at an estimated effective tax rate of 30.6 % and 18.9 % for the three months ended March 31, 2025 and 2024, respectively.

The higher estimated effective tax rate for the three months ended March 31, 2025 was primarily due to a change in valuation allowances in the current year related to the tax effects of realized and unrealized losses on Company investments compared to realized and unrealized gains in the prior year.

Credit Agreement

The Company's credit agreement, as amended (the "Credit Agreement"), comprises (i) a $ 275.0 million term loan with a seven-year term (the "Term Loan") expiring in September 2028, and (ii) a $ 175.0 million revolving credit facility with a five-year term expiring in September 2026.

The Company repaid $ 17.1 million outstanding under the Term Loan during the nine months ended September 30, 2024 and had $ 241.8 million outstanding under the Term Loan at September 30, 2024.

In accordance with ASC 835, Interest , the amounts outstanding under the Company's Term Loan are presented on the Condensed Consolidated Balance Sheet net of related debt issuance costs, which were $ 4.3 million as of September 30, 2024.

The Company repaid $ 0.7 million outstanding under the Term Loan during the three months ended March 31, 2025 and had $ 235.4 million outstanding under the Term Loan at March 31, 2025.

In accordance with ASC 835, Interest , the amounts outstanding under the Company's Term Loan are presented on the Condensed Consolidated Balance Sheets net of related debt issuance costs, which were $ 3.7 million as of March 31, 2025.

Commitments and Contingencies

6 unchanged sentences

Redeemable Noncontrolling Interests

Redeemable noncontrolling interests represent third-party investments in the Company's CIP and minority interests held in a consolidated affiliate.

Minority interests held in the affiliate are subject to holder put rights and Company call rights at pre-established multiples of earnings before interest, taxes, depreciation and amortization and, as such, are considered redeemable at other than fair value.

Redeemable noncontrolling interests

Minority interests held in a majority-owned investment management subsidiary are subject to holder put rights and Company call rights at pre-established multiples of earnings before interest, taxes, depreciation and amortization and, as such, are considered redeemable at other than fair value.

The rights are exercisable at pre-established intervals or upon certain conditions, such as retirement.

The put and call rights are not legally detachable or separately exercisable and are deemed to be embedded in the related noncontrolling interests.

The Company, in purchasing affiliate equity, has the option to settle in cash or shares of the Company's common stock and is entitled to the cash flow associated with any purchased equity.

These minority interests in the affiliate are recorded at estimated redemption value within redeemable noncontrolling interests on the Company's Condensed Consolidated Balance Sheets, and any changes in the estimated redemption value are recorded on the Condensed Consolidated Statements of Operations within noncontrolling interests.

Redeemable noncontrolling interests for the nine months ended September 30, 2024 included the following amounts:

(in thousands) CIP Affiliate Noncontrolling Interests Total

The Company, in purchasing equity of the investment management subsidiary, has the option to settle in cash or shares of the Company's common stock and is entitled to the cash flow associated with any purchased equity.

The minority interests are recorded at estimated redemption value within redeemable noncontrolling interests on the Company's Condensed Consolidated Balance Sheets, and any changes in the estimated redemption value are recorded on the Condensed Consolidated Statements of Operations within noncontrolling interests.

Redeemable noncontrolling interests for the three months ended March 31, 2025 included the following amounts:

(in thousands) CIP Noncontrolling Interests Investment Manager Total

Balances at December 31, 2024 $ 45,667 $ 61,615 $ 107,282

2 unchanged sentences

Total net income (loss) attributable to noncontrolling interests 70 ( 613 ) ( 543 )

Affiliate equity sales (purchases) — ( 29,015 ) ( 29,015 )

Investment management subsidiary equity sales (purchases) — ( 1,053 ) ( 1,053 )

Net subscriptions (redemptions) and other 15,866 ( 973 ) 14,893

Balances at September 30, 2024 $ 39,097 $ 59,014 $ 98,111

Balances at March 31, 2025 $ 61,603 $ 58,976 $ 120,579

(1) Relates to noncontrolling interests redeemable at other than fair value.

Equity awards of majority owned investment management subsidiary

The Company also issues equity-based profit-interest awards of a majority owned investment manager to certain of its employees, with certain awards having up to a three-year vesting period when issued.

These profit-interest awards are subject to holder put rights and Company call rights at established multiples of earnings before interest, taxes, depreciation and amortization, with certain awards also subject to pre-established thresholds.

The awards are accounted for as cash-settled liability awards under ASC 718, with changes in value at each reporting date recognized as compensation expense over the requisite service period, if any, in the Company’s Consolidated Statements of Operations.

The awards are classified as a liability within accrued compensation and benefits on the Consolidated Balance Sheets until the awards are settled.

Additionally, these awards have a right to participate in distributions of the investment manager which are recorded as employment expense in the Company’s Condensed Consolidated Statements of Operations.

Accrued compensation associated with these awards was $ 19.0 million and $ 19.4 million at March 31, 2025 and December 31, 2024, respectively.

Compensation expense related to these awards totaled $( 0.6 ) million and $ 1.4 million for the three months ended March 31, 2025 and 2024, respectively.

Consolidation

8 unchanged sentences

CIP includes both VOEs, made up primarily of U.S.

retail funds and ETFs in which the Company holds a controlling financial interest, and VIEs, which consist of CLO and certain global and private funds ("GF") of which the Company is considered the primary beneficiary.

retail funds and ETFs in which the Company holds a controlling financial interest, and VIEs, which consist of collateralized loan obligations ("CLO") and certain global and private funds ("GF") of which the Company is considered the primary beneficiary.

The consolidation and deconsolidation of these investment products have no impact on the Company's net income (loss).

1 unchanged sentence

The Company has no right to the benefits from, and does not bear the risks associated with, these investment products beyond the Company's investments in, and fees generated from, these products.

The following table presents the balances of CIP that, after intercompany eliminations, were reflected on the Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

The following table presents the balances of CIP that, after intercompany eliminations, were reflected on the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

VOEs VIEs VOEs VIEs

10 unchanged sentences

A majority-owned consolidated private fund, whose primary purpose is to invest in CLOs for which the Company serves as the collateral manager, is also included.

At September 30, 2024, the Company consolidated six CLOs.

On September 30, 2024, the Company issued a new CLO and in conjunction with the issuance, made a $ 24.4 million investment in the subordinated notes.

At March 31, 2025, the Company consolidated seven CLOs.

The financial information of CLOs is included on the Company's condensed consolidated financial statements on a one-month lag based upon the availability of their financial information.

Investments of CLOs

The CLOs held investments of $ 2.0 billion at September 30, 2024, consisting of bank loan investments that comprise the majority of the CLOs' portfolio asset collateral and are senior secured corporate loans across a variety of industries.

The CLOs held investments of $ 2.1 billion at March 31, 2025, consisting of bank loan investments that comprise the majority of the CLOs' portfolio asset collateral and are senior secured corporate loans across a variety of industries.

These bank loan investments mature at various dates between 2025 and 2033 and generally pay interest at SOFR plus a spread.

Notes Payable of CLOs

The CLOs held notes payable with a total value, at par, of $ 2.2 billion at September 30, 2024, consisting of senior secured floating rate notes payable with a par value of $ 1.9 billion and subordinated notes with a par value of $ 217.9 million.

The CLOs held notes payable with a total value, at par, of $ 2.3 billion at March 31, 2025, consisting of senior secured floating rate notes payable with a par value of $ 2.0 billion and subordinated notes with a par value of $ 240.5 million.

These note obligations bear interest at variable rates based on SOFR plus a pre-defined spread.

1 unchanged sentence

The secured notes of the consolidated CLOs have contractual recourse only to the related assets of the CLO and are classified as financial liabilities.

Although these beneficial interests are eliminated upon consolidation, the application of the measurement alternative prescribed by ASU 2014-13, Consolidation (Topic 810) ("ASU 2014-13"), results in the net assets of the consolidated CLOs shown above to be equivalent to the beneficial interests retained by the Company at September 30, 2024, as shown in the table below:

(in thousands)

3 unchanged sentences

The following table represents income and expenses of the consolidated CLOs included on the Company’s Condensed Consolidated Statements of Operations for the period indicated:

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

(in thousands)

8 unchanged sentences

The following table represents the Company’s own economic interests in the consolidated CLOs, which are eliminated upon consolidation:

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

(in thousands)

3 unchanged sentences

Fair Value Measurements of CIP

The assets and liabilities of CIP measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 by fair value hierarchy level were as follows:

As of September 30, 2024

The assets and liabilities of CIP measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 by fair value hierarchy level were as follows:

As of March 31, 2025

(in thousands) Level 1 Level 2 Level 3 Total

2 unchanged sentences

Equity investments 32,346 2,159 41 34,546

Derivatives 242 — — 242

Total assets measured at fair value $ 115,753 $ 2,221,994 $ 18,768 $ 2,356,515

1 unchanged sentence

Short sales 307 — — 307

Derivatives 83 — — 83

Total liabilities measured at fair value $ 307 $ 2,037,390 $ — $ 2,037,697

22 unchanged sentences

The fair value of the beneficial interests held by the Company is based on third-party pricing information without adjustment.

The securities purchased payable at September 30, 2024 and December 31, 2023 approximated fair value due to the short-term nature of the instruments.

The securities purchased payable at March 31, 2025 and December 31, 2024 approximated fair value due to the short-term nature of the instruments.

The following table is a reconciliation of assets of CIP for Level 3 investments for which significant unobservable inputs were used to determine fair value:

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

13 unchanged sentences

The Company has interests in certain other VIEs that the Company does not consolidate as it is not the primary beneficiary since its interest in these entities does not provide the Company with the power to direct the activities that most significantly impact the entities' economic performance.

At September 30, 2024, the carrying value and maximum risk of loss related to the Company's interest in these VIEs was $ 28.6 million.

At March 31, 2025, the carrying value and maximum risk of loss related to the Company's interest in these VIEs was $ 26.9 million.

The key GAAP measure of segment profit or loss that the chief operating decision maker ("CODM") uses to evaluate the Company’s financial performance and allocate resources of the Company is net income, as reported on the Company’s Condensed Consolidated Statements of Operations.

In addition, the CODM uses net income in deciding whether to reinvest profits or allocate profits to other uses of capital, such as for acquisitions or to pay dividends.

All expense categories on the Condensed Consolidated Statements of Operations are significant and there are no other significant segment expenses that would require disclosure.

Assets provided to the CODM are consistent with those reported on the Condensed Consolidated Balance Sheets.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements