WESTWOOD HOLDINGS GROUP INC (WHG)·Q3 2025 Earnings Summary

Executive Summary

• Q3 revenue was $24.3M, up from $23.1M in Q2 and $23.7M in Q3’24, with diluted EPS of $0.41 vs $0.12 in Q2 and $0.01 in Q3’24, driven by higher average AUM and unrealized appreciation on private investments .
• Firmwide AUM/AUA ended at $18.3B ($17.3B AUM, $1.0B AUA); AUM saw net outflows of $0.7B offset by $0.7B of market appreciation; cash and liquid investments rose to $39.2M; no debt .
• MDST ETF AUM surpassed $150M and captured ~30% of September monthly midstream ETF flows; WEBs partnership launched 11 Defined Volatility sector ETFs, expanding the ETF suite .
• Dividend maintained at $0.15 per share (payable Jan 2, 2026); no formal quantitative guidance provided; management highlighted a robust $1.6B pipeline and a ~$450M won-but-not-funded SMidCap mandate as near-term growth drivers .
• Street consensus estimates were not available for Q3 (EPS and revenue), limiting beat/miss framing; focus shifts to momentum in operating metrics and distribution/ETF milestones (values where available retrieved from S&P Global)* [GetEstimates].

What Went Well and What Went Wrong

What Went Well

• Revenue and earnings improved sequentially and year-over-year: revenues $24.3M vs $23.1M (Q2) and $23.7M (Q3’24); diluted EPS $0.41 vs $0.12 (Q2) and $0.01 (Q3’24) .
• ETF momentum and product breadth: MDST AUM >$150M and ~30% of September midstream ETF flows; WEBs launched 11 Defined Volatility sector ETFs, broadening addressable channels .
• Balance sheet and liquidity: cash and liquid investments reached $39.2M (up $6.1M QoQ), stockholders’ equity $123.9M, and no debt, supporting the maintained $0.15 dividend .

What Went Wrong

• Net outflows of $0.7B in AUM, albeit offset by $0.7B in market appreciation; management noted outflows were concentrated in lower-fee large-cap products .
• Higher income taxes partly offset earnings tailwinds from higher revenues and private investment appreciation in Q3 .
• Limited external coverage: no available Street consensus (EPS and revenue) limits external validation and may dampen near-term estimate-revision catalysts (values where available retrieved from S&P Global)* [GetEstimates].

Financial Results

• Notes: EBITDA, EBITDA Margin %, and EBIT Margin % marked with * are values retrieved from S&P Global.

Revenue mix by fee type:

AUM/AUA and flows:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our MDST exchange-traded fund reached $150 million in assets and captured 30% of monthly midstream ETF flows in September, while our partnership with WEBs expanded, adding eleven new Defined Volatility sector ETFs…” — Brian Casey, CEO .
• “Today, we reported total revenues of $24.3 million… Our third quarter income of $3.7 million, or $0.41 per share… Non-GAAP Economic Earnings were $5.7 million, or $0.64 per share…” — Terry Forbes, CFO .
• “We are very close to gaining access to one of the largest wirehouse platforms in the world… we feel confident that that will happen over the next month or two.” — Brian Casey (Q&A) .
• “Certainly, the outflows this quarter were disappointing, but fortunately concentrated in our Large-Cap area, which is our lowest-fee product… Our pipeline for new business remains very strong at $1.6 billion… won-but-not-yet-funded mandate of close to $450 million for our SMidCap product.” — Brian Casey .

Q&A Highlights

• ETF distribution scaling: Management detailed platform thresholds and said they are close to approval on a major wirehouse platform, which could accelerate distribution reach .
• Flows and mix: CEO acknowledged disappointing outflows concentrated in low-fee large-cap while emphasizing a strong $1.6B pipeline and ~$450M SMidCap win awaiting funding .
• Strategic focus: Continued emphasis on income-focused ETF launches leveraging core capabilities and pursuing Managed Investment Solutions mandates .

Estimates Context

• S&P Global consensus for Q3 2025 EPS and revenue was not available for WHG; no “beat/miss” framing versus Street can be determined (values where available retrieved from S&P Global)* [GetEstimates].
• Actuals: Revenue $24.3M; diluted EPS $0.41 as reported in the company’s press release .
• Implication: In the absence of consensus, investor focus will likely center on sequential/YoY improvement, distribution/ETF milestones, AUM mix, and forward pipeline disclosures .

Key Takeaways for Investors

• Sequential and YoY earnings momentum driven by higher average AUM and private investment appreciation; EPS rose to $0.41 from $0.12 in Q2 and $0.01 in Q3’24 .
• ETF franchise gaining traction: MDST >$150M AUM and ~30% of September midstream ETF flows; 11 new WEBs sector ETFs broaden the shelf and risk-managed offering .
• Distribution catalysts: Imminent access to a large wirehouse platform could accelerate ETF adoption and flows in coming quarters .
• AUM dynamics mixed: $0.7B net outflows offset by $0.7B market appreciation; outflows concentrated in lower-fee large-cap strategies—mitigating revenue impact .
• Strong liquidity and capital return: $39.2M in cash and liquid investments; dividend maintained at $0.15 per share with no debt .
• Pipeline support: ~$1.6B new-business pipeline and ~$450M won-not-funded mandate provide near-term visibility despite current outflows .
• With no Street consensus, near-term stock reaction likely tied to product/ distribution updates (wirehouse access), ETF asset growth, and confirmation of pipeline conversion (values where available retrieved from S&P Global)* [GetEstimates] .

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Appendix: Additional Data (Non-GAAP, Capital & Other)

• Economic Earnings: $5.7M (Q3) vs $2.8M (Q2) and $1.1M (Q3’24); Economic EPS $0.64 (Q3) vs $0.32 (Q2) and $0.13 (Q3’24) .
• Balance sheet: Stockholders’ equity $123.9M at 9/30/25; cash and liquid investments $39.2M; no debt .
• AUM composition at Q3-end: Institutional $9.0B (52%), Wealth Management $4.3B (25%), Mutual funds/ETFs $4.0B (23%) .

*Values retrieved from S&P Global.