Westwood Holdings Group, Inc. Q3 FY2025 earnings call

• Enhanced midstream income ETF, MDST, surpassed $150 million in AUM.
• Recorded positive net flows in energy and real assets.
• Private fundraising continues to exceed annual goal by significant margin.
• WEBs launched 11 new sector ETFs.
• Income Opportunity maintained top decile since inception and earned Morningstar Ratings upgrade to four-stars.
• Broad market rally driven by AI enthusiasm, strong corporate earnings, and Fed rate cut.
• Investment professionals delivered solid results across multiple strategies and asset classes.
• Distribution channels had impressive results in Q3 with year-to-date net sales up 17% vs last year and 57% vs 2023.
• Pipeline robust across value and energy strategies with new opportunities added.
• Anticipate winning more SMidCap mandates for defined contribution plans, continued interest in energy offerings.
• Intermediary channel private fundraising exceeded 2025 annual goal by 1.5x through Sep 30.
• Energy and real asset strategies lead in gross and net sales in 2025, MDST gains approvals from major platforms.

Firm-wide assets under management and advisement totaled $18.3 billion at quarter end, consisting of assets under management of $17.3 billion and assets under advisement of $1 billion. Assets under management consisted of institutional assets of $9 billion or 52% of the total, wealth management assets of $4.3 billion or 25% of the total and mutual fund and ETF assets of $4 billion or 23% of the total. Total revenues for the third quarter of 2025 were $24.3 million compared to $23.1 million in the second quarter and $23.7 million in the prior year's third quarter. Non-GAAP economic earnings were $5.7 million or $0.64 per share in the current quarter versus $2.8 million or $0.32 per share in the second quarter. Economic earnings for the quarter were $5.7 million or $0.64 per share compared with $1.1 million or $0.13 per share in the third quarter of 2024.

• Anticipate winning more mandates in SMidCap for defined contribution plans supported by largest national consultants.
• Continued interest in energy offerings for public and private strategies.
• Intermediary channel private fundraising exceeded 2025 annual goal by 1.5x through Sep 30.
• Board of Directors approved regular cash dividend of $0.15 per common share payable on Jan 2, 2026.

• Large cap gains highly concentrated in handful of mega cap stocks.
• Below-trend growth, sticky inflation, and elevated market valuations concentrated in handful of mega cap tech stocks pose risks.
• Market rotation and volatility can impact performance.

Q: Congratulations on the ETF success. If you could just talk about how you're leaning into the success to leverage it further at this point. It seems like you're accelerating your inflows. So what are you doing to make that even more fruitful? And is there any capacity constraint with respect to the capital coming in and investing it?

A: Mac, thanks for your question. Yes, we have worked really hard to grow our ETF business through traditional channels. Each platform has different thresholds to get ETFs on. Our distribution team is calling on RIAs and platforms. We are very close to gaining access to one of the largest wirehouse platforms in the world and feel confident it will happen over the next month or 2.