Westwood Holdings Group (WHG) Q2 2024 earnings summary

Executive summary

• Launched two new ETFs with combined net assets of $56 million and high annualized distribution rates as of June 30, 2024.

• Firmwide assets under management and advisement totaled $16.8 billion at quarter-end, with a focus on expanding product offerings and platform capabilities.

• Invested $1.5 million as a founding investor in the Texas Stock Exchange, pending regulatory approval.

• Emphasizes high-conviction, team-driven, and risk-aware investment approaches, with 28.2% employee and director ownership as of March 2024.

• Investment strategies outperformed benchmarks, with several MLP strategies achieving top quartile rankings.

Financial highlights

• Q2 2024 revenues were $22.7 million, flat sequentially and up from $21.9 million year-over-year.

• Comprehensive loss of $2.2 million ($0.27/share), mainly due to a $3.8–$4.8 million after-tax charge from contingent consideration revaluation.

• Non-GAAP Economic Loss was $0.5 million ($0.06/share), compared to Economic Earnings of $3.0 million in Q1 and $4.0 million in Q2 2023.

• Cash and short-term investments stood at $44.1 million at quarter-end; no debt outstanding.

• Board approved a regular cash dividend of $0.15 per share, payable October 1, 2024.

Outlook and guidance

• Pipeline for new business exceeds $1.5 billion, with nearly $400 million in "won but not funded" mandates.

• Anticipates launching Managed Investment Solutions (MIS) in Q3 2024, with strong early interest from prospects and consultants.

• Expects to secure new clients for MIS by year-end and expand ETF and collective investment trust offerings.

• Management expects current cash and short-term investments plus operating cash flow to be sufficient for at least the next twelve months.