Westwood Holdings Gr Reports Fourth Quarter 2025 Earnings: Strategic Growth and Market Challenges

Westwood Holdings Gr has announced its earnings for the fourth quarter of 2025, revealing significant developments in revenue, assets under management, and strategic initiatives. Despite facing challenges with net outflows in a volatile market, the company remains optimistic about its future positioning and growth potential. This article delves into the financial performance, strategic initiatives, and future outlook based on the latest earnings call transcript.

Financial Performance

In the fourth quarter of 2025, Westwood Holdings Gr reported total revenues of $27.1 million, marking an increase from $24.3 million in the previous quarter and $25.6 million in the same quarter of the prior year. This 7% quarter-over-quarter growth can be attributed to heightened investor interest in the company’s exchange-traded funds (ETFs) and private energy secondary funds, alongside an increase in performance fees.

Year-over-Year Comparisons

• Fiscal Year 2025 Revenue: The company reported total revenues of $97.8 million, compared to $94.7 million in fiscal 2024, driven by higher average assets under management and increased revenues from ETFs and private energy secondary funds.
• Net Income: The net income for the fourth quarter was $1.9 million, translating to $0.21 per share, down from $3.7 million or $0.41 per share in the previous quarter. This decline was due to increased performance-related incentive compensation and unrealized depreciation on strategic private investments.
• Economic Earnings: Non-GAAP economic earnings for the quarter were reported at $3.3 million or $0.36 per share, compared to $5.7 million or $0.64 per share in the third quarter. For the entire fiscal year 2025, economic earnings stood at $14.3 million or $1.61 per share, a significant increase from $7 million or $0.82 per share in 2024.

The firm’s assets under management (AUM) totaled $17.4 billion, with $16.5 billion in assets under management and $0.9 billion in assets under advisement. Institutional assets made up 50% of the total, reflecting Westwood's robust positioning in the institutional market.

Strategic Initiatives

Westwood Holdings Gr is actively refining its service model and expanding its product offerings to enhance client experience and scalability. During the earnings call, management highlighted several key initiatives:

• Launch of New ETFs: The company launched the Westwood Enhanced Income Opportunity ETF (YLDW), which has seen strong initial acceptance, further expanding its income-focused ETF lineup.
• Milestones in ETF Performance: The flagship MDST ETF surpassed $170 million in assets under management, validating Westwood's unique midstream strategy.
• Successful Fund Closures: The company successfully closed its Westwood Energy Secondaries Fund 2 with over $300 million in capital commitments, doubling its initial fundraising goal and underscoring its expertise in raising capital for specialized alternative investment strategies.

These initiatives not only strengthen Westwood's competitive positioning but also signal a commitment to innovation and active management strategies that align with evolving market demands.

Future Outlook

Looking ahead, Westwood Holdings Gr is optimistic about its growth trajectory. Management expressed confidence in its strategic positioning and value proposition, emphasizing the following:

• Guidance for 2026: The company expects continued growth driven by its diverse range of investment strategies and an expanding ETF platform. The management anticipates that market conditions will shift towards active value-oriented investment approaches, which could benefit its strategies.
• Client Acquisition and Retention: Despite recent outflows, management noted that over 80% of these were from a single large-cap value product, which has struggled in a narrow market environment. New client acquisitions, including a recent $200 million investment, are expected to bolster AUM in the upcoming quarters.
• Pipeline Strength: The company has a promising pipeline, with upcoming funding from a defined contribution plan projected at $450 million, which will significantly enhance its AUM in the SMID product.

“Our diverse range of strategies, expanding ETF platform, and robust distribution momentum position us for continued growth,” stated Brian Casey, CEO of Westwood Holdings Gr.

Conclusion

In summary, Westwood Holdings Gr's fourth quarter earnings reflect a company navigating both challenges and opportunities within a dynamic market landscape. While the reported net outflows may raise concerns, the strategic initiatives and ongoing commitment to enhancing client experience position the company favorably for sustainable long-term growth. With a solid financial foundation and a proactive approach to market needs, Westwood is set to capitalize on future opportunities, driving value for clients and shareholders alike. As the company continues its evolution, investors will be keen to watch how these strategies unfold in 2026 and beyond.