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01/11 14:01
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals mixed signals. Financial performance shows a decline in net income and revenues, but the company achieved non-GAAP economic earnings and maintained a strong asset base. Market strategy highlights growth in SMID cap products and potential exponential growth in certain platforms, but market uncertainty and competitive pressures pose risks. The regular cash dividend is positive, but lack of share repurchase is neutral. Overall, the financial and strategic outlook is balanced by risks and uncertainties, leading to a neutral stock price prediction.
Total Revenues $23,300,000 (decreased from $25,600,000 in Q4 2024, increased from $22,700,000 in Q1 2024) due to lower performance-based fees compared to the previous quarter, but higher average assets under management compared to the prior year.
Net Income $500,000 or $0.05 per share (decreased from $2,100,000 or $0.24 per share in Q4 2024, decreased from $2,300,000 or $0.27 per share in Q1 2024) due to lower revenues and higher operating expenses, offset by lower income taxes and changes in the fair value of contingent consideration.
Non-GAAP Economic Earnings $2,500,000 or $0.29 per share (compared to losses of $3,400,000 or $0.39 per share in Q4 2024, decreased from $3,000,000 or $0.36 per share in Q1 2024) due to changes in the fair value of contingent consideration in 2024, offset by higher revenues and lower income taxes.
Assets Under Management and Advisement $18,000,000,000 (comprising $17,000,000,000 in assets under management and $1,000,000,000 in assets under advisement) with net inflows of $600,000,000 and market depreciation of $300,000,000.
Cash and Liquid Investments $26,900,000 (no year-over-year change mentioned) with a debt-free balance sheet.
Dividend $0.15 per common share (approved for payment on 07/01/2025) (no year-over-year change mentioned).
New Product Launch: Successfully launched the Westwood Libertay Global Equity ETF, ticker symbol BFREE, offering a distinctive approach to global equity investing.
ETF Performance: Westwood Salient Enhanced Midstream Income ETF (MDST) reached its one year anniversary with strong traction among income-seeking investors. Enhanced Energy Income ETF (WEEI) is nearing its one year anniversary.
Market Expansion: Won a significant sub-advisory mandate with nearly $1,000,000,000 in small cap value.
Market Positioning: Texas Stock Exchange (TXSE) took a significant step forward with its Form one application for registration as a National Securities Exchange.
Operational Efficiency: Reduced costs and implemented a new CRM system that has demonstrated increased efficiency for advisers and client service team.
Wealth Management Inflows: Wealth management business saw inflows of $56,000,000 in Q1 2025.
Strategic Shift: Focus on high-quality businesses to navigate market uncertainties.
Strategic Growth Initiatives: Continued expansion of ETF platform and Managed Investment Solutions (MIS) with over 30 prospect meetings in Q1.
Market Uncertainty: The company anticipates continued market uncertainty driven by potential policy changes and slowing economic growth, which could impact investment performance.
Competitive Pressures: The shift away from large-cap stocks ('magnificent seven') towards value-oriented investments may pose competitive challenges, but also aligns with the company's strengths.
Regulatory Issues: The Texas Stock Exchange's application for registration as a National Securities Exchange may face regulatory scrutiny, impacting the company's investment strategies.
Economic Factors: The U.S. stock market experienced a decline of approximately 8.5% in the latter part of the quarter, which could affect overall asset performance and investor sentiment.
Performance-Based Fees: Revenues decreased due to lower performance-based fees, indicating potential volatility in income streams tied to market performance.
Supply Chain Challenges: The company is monitoring risks at the macro level, including tariffs and their impact on global economies, which could affect supply chains and investment strategies.
ETF Launches: Successfully launched the Westwood Libertay Global Equity ETF (BFREE) at the end of the quarter, offering a distinctive approach to global equity investing.
Sub-Advisory Mandate: Won a significant sub-advisory mandate with nearly $1,000,000,000 in small cap value.
Texas Stock Exchange: The Texas Stock Exchange (TXSE) took a significant step forward with its Form one application for registration as a National Securities Exchange.
Board Expansion: Welcomed two new board members, Hale Hoak and Catherine Murray, to strengthen leadership.
Managed Investment Solutions (MIS): Anticipate initial funding in 2025 for managed investment solutions.
Energy Strategies: Expect continued progress with existing clients in energy strategies.
Revenue Expectations: Total revenues reported at $23,300,000 for Q1 2025, with expectations for continued growth in SMID cap value and ETF business.
Market Outlook: Expect continued market uncertainty driven by tariffs and global economic impacts.
Sales Velocity: Pipeline remains robust with over $1,000,000,000, particularly in SMID product.
Dividend Announcement: Regular cash dividend of $0.15 per common share approved, payable on 07/01/2025.
Cost Management: Reduced costs and improved efficiency through a new CRM system.
Growth Pathways: Identified five primary pathways to growth including traditional pipeline, ETF business, Managed Investment Solutions, private equity, and wealth management.
Regular Cash Dividend: $0.15 per common share, payable on 07/01/2025 to stockholders of record on 06/02/2025.
Share Repurchase Program: None
The earnings call presents mixed signals: positive elements include increased revenues, net income, and non-GAAP earnings, alongside new product launches and strategic market positioning. However, concerns such as institutional net outflows, market concentration risks, and economic uncertainties temper the outlook. The dividend announcement is neutral, lacking any increase. The Q&A indicates no major concerns but doesn't significantly alter sentiment. Overall, the balance of positive financial performance with strategic and market risks suggests a neutral stock price movement.
The earnings call reveals mixed signals. Financial performance shows a decline in net income and revenues, but the company achieved non-GAAP economic earnings and maintained a strong asset base. Market strategy highlights growth in SMID cap products and potential exponential growth in certain platforms, but market uncertainty and competitive pressures pose risks. The regular cash dividend is positive, but lack of share repurchase is neutral. Overall, the financial and strategic outlook is balanced by risks and uncertainties, leading to a neutral stock price prediction.
The earnings call highlights several concerns: declining revenues and net income, market uncertainties, competitive pressures, and regulatory issues. Although there are some positive elements, like a regular cash dividend and potential growth in certain areas, the overall financial performance is weak. The Q&A section reveals management's unclear responses and lack of specific strategies, which adds to the negative sentiment. The combination of these factors, along with the absence of a share repurchase program, suggests a negative stock price movement in the short term.
The earnings call highlights strong financial performance with increased revenues and AUM, successful ETF launches, and strategic initiatives like a joint venture partnership. Despite some outflows and market uncertainty, the company has a robust pipeline and a solid balance sheet. The Q&A indicates management's confidence in their initiatives and seed capital opportunities. The dividend and share repurchase program further support shareholder returns. These factors, combined with the positive sentiment from analysts, suggest a positive stock price movement over the next two weeks.
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