Westwood Holdings Group Q2 Earnings Call Highlights

Westwood Holdings Group NYSE: WHG reported second-quarter 2026 revenue of $25.3 million, up from $23.1 million a year earlier and roughly level with $25 million in the first quarter, as growth in its exchange-traded fund and private energy secondaries businesses supported results. Net income totaled $1.5 million, or $0.17 per share, compared with $0.8 million, or $0.09 per share, in the first quarter and $1 million, or $0.12 per share, in the year-ago quarter. Chief Financial Officer Terry Forbes said the sequential improvement reflected lower compensation expenses, partly offset by higher income taxes and the first-quarter recognition of gains from Westwood's investment in a private bank. Non-GAAP economic earnings were $3 million, or $0.33 per share, compared with $2.8 million, or $0.31 per share, in the preceding quarter. The company said year-over-year earnings benefited from higher revenue but faced partially offsetting increases in compensation, professional services expenses and income taxes. Firmwide assets under management and advisement stood at $17.9 billion at June 30, including $17 billion in assets under management and $1 billion in assets under advisement. Institutional assets accounted for $8.3 billion of assets under management, while wealth management represented $4.5 billion and mutual fund and ETF assets totaled $4.2 billion. Westwood recorded $1.6 billion in net outflows from assets under management during the quarter, while market appreciation added $1.2 billion. Assets under advisement had $53 million of market appreciation and $4 million of net outflows. Chief Executive Officer Brian Casey said outflows were concentrated in the company’s legacy large-cap value institutional business, where performance challenges and an industry shift toward lower-fee passive investment options weighed on flows. Small-cap value also saw redemptions tied primarily to one client consolidating small- and mid-cap allocations into a combined SMID-cap mandate, he said. That client subsequently funded a larger allocation to Westwood’s SMID-cap strategy in July. The institutional channel, including private capital, generated $382 million in gross sales and $1.3 billion in net outflows during the quarter. Mutual fund and ETF products generated $168 million in gross sales and $165 million in net outflows. Casey said Westwood is investing in ETFs, alternatives and Managed Investment Solutions as it seeks to diversify from traditional asset-based fee businesses. Managed Investment Solutions clients funded new accounts during the quarter, bringing year-to-date flows to $350 million, according to the company. Westwood’s ETF platform surpassed $400 million in assets during July. Its Enhanced Midstream ETF, trading under the ticker MDST, and E...