Westwood(US:WHG)2026-02-13 22:32Financial Data and Key Metrics Changes - Total revenues for Q4 2025 were $27.1 million, an increase from $24.3 million in Q3 and $25.6 million in Q4 2024, driven by investor interest in ETFs and private energy secondaries funds [15] - Fiscal 2025 total revenues reached $97.8 million, compared to $94.7 million in 2024, attributed to higher average assets under management [15] - Q4 income was $1.9 million, or $0.21 per share, down from $3.7 million, or $0.41 per share in Q3, and $2.1 million, or $0.24 per share in Q4 2024 [16][17] - Economic earnings for Q4 were $3.3 million, or $0.36 per share, compared to $3.4 million, or $0.39 per share in Q4 2024 [17] Business Line Data and Key Metrics Changes - The ETF franchise exceeded $200 million, with the latest ETF, Enhanced Income Opportunity, contributing to this growth [4][12] - Managed Investment Solutions team secured its first institutional client, indicating growth in this business line [4] - Institutional channel gross sales grew by 36% year-over-year, reflecting strong traction with institutional investors [8] Market Data and Key Metrics Changes - The S&P 500 rose less than 3% in Q4 but ended the year up 18%, indicating a mixed market environment [5] - The firm experienced net outflows of $1 billion in assets under management, offset by $1 billion in market appreciation [18] - Assets under management totaled $17.4 billion, with institutional assets making up 50% of the total [17][18] Company Strategy and Development Direction - The company is focused on high-quality businesses with strong fundamentals, positioning itself well for future market uncertainties [7] - A disciplined, multiyear evolution of the wealth division is underway to enhance client experience and scalability [12] - The launch of new ETFs and private equity funds reflects the company's commitment to innovation and expanding its market opportunities [12][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the disappointing outflows in Q4, primarily from the Large Cap Value product, which has struggled in a narrow market environment [22] - The company remains optimistic about its pipeline, with new clients and significant funding expected in the near future [22] - Management emphasized the importance of high-quality companies and the potential for attractive shareholder returns in the current market [8] Other Important Information - The board approved a regular cash dividend of $0.15 per common share, payable on April 1, 2026 [18] - The firm maintains a solid financial position with cash and liquid investments totaling $44.1 million and a debt-free balance sheet [18] Q&A Session Summary Question: What are the reasons behind the outflows in Q4? - Management noted that over 80% of the outflows were from the Large Cap Value product, which has struggled against a low-quality market environment [22] Question: What is the outlook for new client acquisitions? - Management highlighted a new client bringing in $200 million and a defined contribution plan expected to fund $450 million, indicating a strong pipeline [22] Question: How is the company positioned for future growth? - Management expressed confidence in the strategic positioning and value proposition, with a focus on high-quality investment solutions and expanding ETF offerings [14][22]