Westwood Holdings Group (NYSE:WHG) reported higher third-quarter revenue as its exchange-traded fund and private energy businesses grew, but earnings declined from a year earlier amid severance expenses and higher taxes.
Revenue rose to $26.6 million for the third quarter of 2026, compared with $25.3 million in the second quarter and $24.3 million a year earlier, Chief Financial Officer Terry Forbes said. The company reported income of $3.1 million, or $0.34 per share, up from $1.5 million, or $0.17 per share, in the preceding quarter but down from $3.7 million, or $0.41 per share, in the third quarter of 2025.
Forbes said the year-over-year earnings decline reflected $1.7 million in severance-related compensation expenses, higher professional services costs and higher income taxes, partly offset by increased revenue and unrealized gains on private investments. Non-GAAP economic earnings were $4.4 million, or $0.48 per share, compared with $3 million, or $0.33 per share, in the second quarter and $5.7 million, or $0.64 per share, a year earlier.
ETF assets grow as new fund launches
Chief Executive Officer Brian Casey said Westwood’s ETF platform had grown to about $460 million in assets as of the day before the call, up from more than $430 million around quarter-end. The company launched its first ETF in April 2024.
In September, Westwood launched the Westwood Salient Power and Infrastructure ETF, known as PowerX and trading under the ticker PWRX. Casey described it as the first ETF to launch on the Texas Stock Exchange. The fund invests across the power ecosystem and combines an equity portfolio with a covered-call strategy intended to generate monthly income. Its assets exceeded $17 million as of the day before the call, Casey said.
Casey said the company’s MDST ETF had been approved at a major wirehouse, allowing Westwood’s sales team to discuss the fund with advisers there. Westwood is also seeking approval for its WEEI energy income ETF at the same firm, he said.
Westwood and WEBs Investments have agreed to reorganize their relationship and are working to move the WEBs QQQ Defined Volatility ETF and WEBs SPY Defined Volatility ETF onto the Ultimus Managers platform, with Westwood serving as investment adviser. The reorganization requires fund shareholder approval and is targeted for completion early next year.
Flows and private capital
Westwood’s institutional channel, including private capital, generated $556.3 million in gross sales and $3 million in net outflows during the quarter, Casey said. A large defined contribution plan at a Fortune 50 company funded a mandate in the firm’s SMidCap strategy, while outflows were concentrated in small-cap value, led by two public-plan relationships.
Mutual fund and ETF gross sales were $142 million, with net outflows of $87 million. ETFs generated positive net flows within that channel, Casey said. Across the company, assets under management experienced $0.3 billion in net outflows and $0.6 billion in market depreciation during the quarter, Forbes said.
Private fundraising brought in approximately $30 million during the quarter and almost $200 million year to date, according to Casey. Westwood also launched a new energy secondaries co-investment fund.
Asked when private funds might generate carried interest, Casey said management fees are generally around 1%, with a 15% carry over an 8% return, though not every fund follows those terms. He said the funds were performing well but did not provide an estimate for the timing or amount of potential carry.
Investment gains and wealth plans
Westwood recorded a $2.55 million gain in the third quarter after marking up its investment in the Texas Stock Exchange following a capital raise at a higher valuation, Casey said. The company also recognized an unrealized gain of $333,707 on its investment in software company Ridgeline after a subsequent funding round at a higher share price.
Forbes reported firmwide assets under management and advisement of $17.1 billion, including $16.1 billion under management and $1 billion under advisement. The company had $65 million in cash and investments at quarter-end.
Casey said Westwood had selected Black Diamond as its next-generation wealth platform and expected to complete the transition of its wealth strategy to a multifamily office next year. The board approved a $0.15-per-share cash dividend, payable January 4, 2027, to shareholders of record December 1, 2026.
About Westwood Holdings Group (NYSE:WHG)
Westwood Holdings Group, Inc is an investment management firm headquartered in Dallas, Texas. Through its subsidiaries, the company provides investment advisory and asset management services to institutional investors, private wealth clients, family offices and investment vehicles.
Westwood manages a range of investment strategies, including equity, income, multi-asset and alternative offerings. Its products and services are designed to address the needs of pension plans, endowments, foundations, corporations, high-net-worth individuals and other investors seeking professionally managed portfolios.
Founded in 1983, Westwood serves clients primarily in the United States and has expanded its capabilities through internal investment teams and strategic acquisitions.
