Westwood(US:WHG)2025-10-30 20:16Assets Under Management (AUM) - As of September 30, 2025, the firm-wide assets under management (AUM) totaled approximately $18.3 billion, consisting of $17.3 billion in AUM and $1.0 billion in assets under administration (AUA) [81] - AUM increased by $0.5 billion, or 4%, from $16.8 billion at September 30, 2024, with an average AUM of $17.3 billion for Q3 2025 compared to $16.3 billion for Q3 2024 [97] - Institutional AUM rose by 7% to $9.032 billion from $8.454 billion year-over-year, while Wealth Management AUM decreased by 1% to $4.323 billion, and Mutual Funds AUM increased by 2% to $3.994 billion [98] - For the nine months ended September 30, 2025, AUM increased by $0.7 billion due to market appreciation of $1.0 billion, despite net outflows of $0.3 billion [103] Financial Performance - Total revenues for the three months ended September 30, 2025, increased by 2% to $24.3 million compared to $23.7 million in the same period of 2024 [108] - Net income for the three months ended September 30, 2025, was $3.7 million, a significant increase of 2,245% from $159,000 in the same period of 2024 [108] - Economic Earnings for the three months ended September 30, 2025, were $5.7 million, up 427% from $1.1 million in the same period of 2024 [121] - Economic Earnings per share for the three months ended September 30, 2025, was $0.64, a 392% increase from $0.13 in the same period of 2024 [121] Cash Flow and Liquidity - Cash flow provided by operating activities for the nine months ended September 30, 2025, was $10.9 million, compared to $12.2 million in the same period of 2024 [124] - The company had no debt as of September 30, 2025, maintaining a strong liquidity position with cash and liquid investments of $39.2 million [122] - Future liquidity and capital requirements will depend on various factors, including operational results and capital expenditures, with current cash and short-term investments expected to meet operational needs for at least the next twelve months [129] Expenses and Costs - Employee compensation and benefits expenses decreased by 2% to $13.3 million for the three months ended September 30, 2025, compared to $13.6 million in the same period of 2024 [108] - Westwood fund expenses increased by 38% to $1.1 million for the three months ended September 30, 2025, primarily due to higher administration and distribution expenses related to ETFs [110] Tax and Regulatory Compliance - The effective income tax rate for the three months ended September 30, 2025, approximated the 21% statutory rate [112] - Westwood Trust is required to maintain a minimum restricted capital of $4.0 million as per the Texas Finance Code [127] - As of September 30, 2025, Westwood Trust had approximately $13.6 million in excess of its minimum capital requirement [128] Investment Strategy and Team - The company has established a track record of delivering competitive, risk-adjusted returns for clients, focusing on a "value" investment style [82] - The investment team has an average experience of over 20 years, supporting the firm's investment strategies [82] Market and Accounting Disclosures - There have been no significant changes in critical accounting policies and estimates since December 31, 2024 [130] - Recent accounting guidance is detailed in the Condensed Consolidated Financial Statements included in the Quarterly Report on Form 10-Q [131] - No significant changes in market risk disclosures have occurred since the last Annual Report on Form 10-K for the year ended December 31, 2024 [132] Advisory and Trust Fees - Advisory fees are primarily based on a percentage of AUM and AUA, with performance-based fees generating additional revenues if benchmarks are outperformed [84] - Trust fees are negotiated separately and are generally based on a percentage of AUM, with revenue fully recognized within the quarter [85] Assets Under Advisement - Assets Under Advisement at the end of September 30, 2025, were $966 million, showing a net change of $27 million from the previous quarter [105] Net Outflows and Market Appreciation - For the three months ended September 30, 2025, net outflows were $0.671 billion, primarily related to the LargeCap Value strategy, offset by market appreciation of $0.679 billion [102]