Westwood(WHG) - 2025 Q2 - Quarterly Results

Overview of Q2 2025 Performance Westwood Holdings Group achieved a significant profit turnaround and operational milestones in Q2 2025, including AUM growth and strategic index inclusion Financial Highlights Westwood Holdings Group achieved a significant year-over-year net income turnaround in Q2 2025, with stable revenues, increased AUM, and a strong debt-free balance sheet Key Financial Metrics | Financial Metric | Q2 2025 (USD) | Q1 2025 (USD) | Q2 2024 (USD) | | :--- | :--- | :--- | :--- | | Total Revenues | $23.1M | $23.3M | $22.7M | | Net Income (Loss) | $1.0M | $0.5M | ($2.2M) | | Diluted EPS | $0.12/share | $0.05/share | ($0.27)/share | | Economic Earnings | $2.8M | $2.5M | ($0.5M) | | AUM & AUA | $18.3B | - | $16.8B | | Dividend per Share | $0.15/share | - | - | - The company's financial position is strong, with $33.1 million in cash and liquid investments as of June 30, 2025, an increase of $6.0 million from the first quarter, and no debt[4] Operational & Strategic Highlights Key operational achievements include Russell 2000 Index inclusion, significant ETF asset growth, strong intermediary sales, and outperformance across multiple investment strategies - WHG was added to the Russell 2000 Index in its 24th year as a public company[1][2] - The Enhanced Midstream Energy ETF (MDST) exceeded $100 million in assets and maintains a 10.2% p.a. distribution rate[1][2] - Several investment strategies, including SmallCap Value, AllCap Value, and MidCap Value, beat their primary benchmarks, with MidCap Value, Credit Opportunities, and Enhanced Midstream Income achieving top quartile rankings among peers[4] - In partnership with WHG, WEBs Investments launched 11 sector funds, expanding its Defined Volatility℠ ETF suite[1] Financial Statements This section presents the detailed consolidated financial statements, including operations, balance sheets, and cash flows, for the reporting periods Consolidated Statements of Operations This section provides a detailed breakdown of the company's financial performance, including revenues, expenses, and net income for both the three-month and six-month periods ending June 30, 2025, with comparisons to the prior year Quarterly Performance (Three Months Ended June 30, 2025) Q2 2025 saw total revenues of $23.1 million and net income of $1.0 million, a significant improvement year-over-year due to the absence of contingent consideration loss Quarterly Consolidated Statements of Operations (USD thousands) | Item | Q2 2025 (USD thousands) | Q1 2025 (USD thousands) | Q2 2024 (USD thousands) | | :--- | :--- | :--- | :--- | | Total Revenues | $23,120 | $23,252 | $22,688 | | Asset-based fees | $17,955 | $17,731 | $17,139 | | Trust fees | $5,069 | $5,429 | $5,227 | | Total Expenses | $22,252 | $23,320 | $26,866 | | Employee compensation | $13,472 | $14,501 | $13,638 | | Loss on contingent consideration | $0 | $0 | $4,807 | | Net Income (Loss) to WHG | $1,019 | $478 | ($2,243) | Year-to-Date Performance (Six Months Ended June 30, 2025) Year-to-date total revenues increased to $46.4 million, with net income reaching $1.5 million, a substantial turnaround from the prior year driven by higher asset-based fees Year-to-Date Consolidated Statements of Operations (USD thousands) | Item | Six Months Ended June 30, 2025 (USD thousands) | Six Months Ended June 30, 2024 (USD thousands) | | :--- | :--- | :--- | | Total Revenues | $46,372 | $45,420 | | Asset-based fees | $35,686 | $33,956 | | Total Expenses | $45,572 | $46,657 | | Employee compensation | $27,973 | $28,349 | | Net Income to WHG | $1,497 | $53 | Consolidated Balance Sheets The balance sheet as of June 30, 2025, reflects total assets of $146.3 million, total liabilities of $23.9 million, and $120.3 million in stockholders' equity, with contingent consideration settled Consolidated Balance Sheets (USD thousands) | Item | June 30, 2025 (USD thousands) | December 31, 2024 (USD thousands) | | :--- | :--- | :--- | | Total Assets | $146,279 | $149,989 | | Cash and cash equivalents | $15,403 | $18,847 | | Investments, at fair value | $19,768 | $27,694 | | Goodwill | $39,501 | $39,501 | | Total Liabilities | $23,921 | $27,657 | | Contingent consideration | $0 | $4,657 | | Total Stockholders' Equity | $120,306 | $120,291 | Consolidated Statements of Cash Flows Net cash provided by operating activities significantly decreased to $2.4 million for the six months ended June 30, 2025, resulting in a $3.4 million net decrease in cash and equivalents Consolidated Statements of Cash Flows (USD thousands) | Item | Six Months Ended June 30, 2025 (USD thousands) | Six Months Ended June 30, 2024 (USD thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,403 | $11,685 | | Net cash used in investing activities | ($1,455) | ($1,524) | | Net cash used in financing activities | ($4,392) | ($6,813) | | Net change in cash | ($3,444) | $3,348 | | Cash at end of period | $15,403 | $23,770 | Non-GAAP Financial Measures This section reconciles GAAP net income to Economic Earnings, providing an adjusted view of the company's core operating performance Reconciliation to Economic Earnings Economic Earnings, a non-GAAP measure, significantly improved to $2.8 million in Q2 2025 and more than doubled year-to-date, providing a clearer view of underlying operating performance - Economic Earnings are defined as GAAP net income adjusted for non-cash equity-based compensation, amortization of intangible assets, and deferred taxes related to goodwill[17] Economic Earnings Reconciliation - Quarterly (USD thousands, except per share) | Item | Q2 2025 (USD thousands) | Q1 2025 (USD thousands) | Q2 2024 (USD thousands) | | :--- | :--- | :--- | :--- | | GAAP Net Income (Loss) | $1,019 | $478 | ($2,243) | | Stock-based compensation | $1,295 | $1,327 | $1,397 | | Intangible amortization | $1,037 | $1,045 | $1,032 | | Economic Earnings (Loss) | $2,792 | $2,514 | ($508) | | Economic EPS | $0.32/share | $0.29/share | ($0.06)/share | Economic Earnings Reconciliation - Year-to-Date (USD thousands, except per share) | Item | Six Months 2025 (USD thousands) | Six Months 2024 (USD thousands) | | :--- | :--- | :--- | | GAAP Net Income | $1,497 | $53 | | Economic Earnings | $5,306 | $2,504 | | Economic EPS | $0.60/share | $0.30/share | Company Information and Forward-Looking Statements This section provides an overview of Westwood Holdings Group, details conference call information, and includes standard forward-looking statement disclaimers About Westwood Holdings Group Westwood Holdings Group is a boutique asset management firm offering diverse actively-managed investment strategies and wealth services, committed to client-first values and adaptability - WHG is a boutique asset management firm offering actively-managed and outcome-oriented investment strategies, along with trust and wealth services[7] - The firm, originally woman-founded, emphasizes its commitment to incorporating diverse insights and operates based on core values of integrity, reliability, and teamwork[8] Conference Call Information The company scheduled a conference call and webcast to discuss its second quarter 2025 results on August 8, 2025, at 4:30 p.m. Eastern time - A conference call to discuss Q2 2025 results is scheduled for 4:30 p.m. Eastern time on the day of the release[6] Forward-Looking Statements This section serves as a standard legal disclaimer, cautioning investors that statements in the press release that are not historical facts are subject to risks and uncertainties - The press release contains forward-looking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934[9] - Investors are warned not to place undue reliance on these statements, as actual results may vary due to numerous factors including market conditions, competitive pressures, and other risks detailed in SEC filings[9][10]