Westwood Holdings Group Reports $23.3 Million Revenue in Q1 2025, Net Income Falls 78%

Westwood Holdings Group, Inc. reported a total revenue of $23.3 million for the first quarter of 2025, reflecting a 2% increase from $22.7 million in the same period of 2024. The growth in revenue was primarily driven by a rise in average assets under management (AUM), which increased to approximately $17.0 billion, up from $16.2 billion year-over-year. Advisory fees, which constitute a significant portion of the company's revenue, rose to $17.7 million, a 5% increase from $16.8 million in the prior year. However, net income for the quarter fell sharply to $477,000, down 78% from $2.2 million in the previous year, largely due to increased expenses and a lack of gains from contingent consideration that had positively impacted the prior year's results.

Total expenses for the first quarter of 2025 increased by 18% to $23.3 million, compared to $19.8 million in the first quarter of 2024. Notable increases were seen in sales and marketing expenses, which rose by 21%, and information technology costs, which increased by 16%. The company also recorded a significant reduction in contingent consideration liabilities, which had previously contributed to gains in the prior year. The overall increase in expenses, coupled with a decrease in net operating income, contributed to the decline in profitability.

In terms of operational metrics, Westwood Holdings reported a total of 9.4 million shares outstanding as of March 31, 2025, an increase from 9.3 million shares a year earlier. The company’s cash and cash equivalents decreased to $9.4 million from $18.8 million at the end of 2024, reflecting cash flow used in operating activities of $4.9 million during the quarter. The firm also noted a decrease in accounts payable and accrued liabilities, which fell to $6.0 million from $6.4 million at the end of the previous year.

Looking ahead, Westwood Holdings Group remains focused on expanding its investment strategies and enhancing its service offerings to attract new clients. The company has indicated that it is committed to maintaining its competitive edge in the investment management industry, despite the challenges posed by market conditions and increased operational costs. The firm plans to leverage its existing infrastructure to support growth and is optimistic about the potential for new revenue streams from its investment strategies. However, management cautioned that future performance will depend on various factors, including market conditions and the ability to maintain client relationships.