WESTWOOD HOLDINGS GROUP INC

Previous wording

Our revenues are generally derived from fees based on a percentage of AUM and AUA, and Westwood Management and Westwood Trust collectively had AUM of approximately $17.3 billion and AUA of approximately $0.9 billion at March 31, 2026. We have established a track record of delivering competitive, risk-adjusted returns for our clients.

Current wording

Our revenues are generally derived from fees based on a percentage of AUM and AUA, and Westwood Management and Westwood Trust collectively had AUM of approximately $17.0 billion and AUA of approximately $1.0 billion at June 30, 2026. We have established a track record of delivering competitive, risk-adjusted returns for our clients.

Previous wording

Net change in unrealized appreciation (depreciation) on private investments

Current wording

Net change in unrealized depreciation on private investments

Previous wording

Net change in unrealized appreciation (depreciation) on private investments includes changes in the value of our privately held investments.

Current wording

Net change in unrealized depreciation on private investments includes changes in the value of our privately held investments.

Previous wording

Other income primarily consists of income from the sublease of a portion of our corporate offices.

Current wording

Other income (expense) primarily consists of income from the sublease of a portion of our corporate offices.

Previous wording

Firm-wide assets under management of $18.3 billion at March 31, 2026 consisted of $17.3 billion of AUM and $0.9 billion of AUA.

Current wording

Firm-wide assets under management of $17.9 billion at June 30, 2026 consisted of $17.0 billion of AUM and $1.0 billion of AUA.

Previous wording

AUM increased $0.3 billion to $17.3 billion at March 31, 2026 compared with $17.0 billion at March 31, 2025. The average of beginning and ending AUM ("average AUM") for the first quarter of 2026 was $16.9 billion compared to $16.8 billion for the first quarter of 2025.

Current wording

AUM decreased $0.3 billion to $17.0 billion at June 30, 2026 compared with $17.3 billion at June 30, 2025. The average of beginning and ending AUM ("average AUM") for the second quarter of 2026 was $17.1 billion compared to $17.2 billion for the second quarter of 2025.

Previous wording

(3)Mutual Funds & ETFs include the Westwood Funds®, a family of mutual funds and Westwood ETFs, for which Westwood Management or Salient Advisors serves as advisor. These funds are available to individual investors, institutional investors and wealth management accounts.

Current wording

(3)Mutual Funds and ETFs include the Westwood Funds®, a family of mutual funds and Westwood ETFs, for which Westwood Management or Salient Advisors serves as advisor. These funds are available to individual investors, institutional investors and wealth management accounts.

Previous wording

The change in AUM for the three months ended March 31, 2026 was due to market appreciation of $0.8 billion offset by net outflows of $0.1 billion. Net outflows were primarily related to our SmallCap Value and LargeCap Value strategies.

Current wording

The change in AUM for the three months ended June 30, 2026 was due to market appreciation of $1.2 billion offset by net outflows of $1.6 billion. Net outflows were primarily related to our LargeCap Value and SmallCap Value strategies.

Previous wording

The change in AUM for the three months ended March 31, 2025 was due to net inflows of $0.6 billion offset by market depreciation of $0.3 billion. Net inflows were primarily related to our SmallCap Value strategy.

Current wording

The $0.7 billion increase in AUM for the six months ended June 30, 2025 was due to net inflows of $0.4 billion and market appreciation of $0.3 billion. Net inflows were primarily related to our SmallCap Value strategy.

Previous wording

Total revenues. Total revenues for the three months ended March 31, 2026 were higher than revenues for the three months ended March 31, 2025 due to higher average AUM and growth from our ETFs and private energy secondaries funds.

Current wording

Total revenues. Total revenues for the three months ended June 30, 2026 were higher than revenues for the three months ended June 30, 2025 due to growth from our ETFs and private energy secondaries funds and gains on our seed money investments.

Previous wording

Employee compensation and benefits. Employee compensation and benefits for the three months ended March 31, 2026 increased compared to the three months March 31, 2025 primarily due to higher incentive compensation costs.

Current wording

Employee compensation and benefits. Employee compensation and benefits for the three months ended June 30, 2026 increased compared to the three months June 30, 2025 primarily due to higher incentive compensation costs and higher costs related to our alternatives investment team.

Previous wording

Professional services. Professional services costs for the three months ended March 31, 2026 increased compared to the three months ended March 31, 2025 primarily due to additional legal expenses.

Current wording

Professional services. Professional services costs for the three months ended June 30, 2026 increased compared to the three months ended June 30, 2025 primarily due to additional consulting and recruiting expenses.

Previous wording

Income tax provision. Our effective income tax rate differed from the 21% statutory rate for the three months ended March 31, 2026 and March 31, 2025 due to permanent differences related to executive compensation and the impact of state and local taxes.

Current wording

Income tax provision. Our effective income tax rate differed from the 21% statutory rate for the three months ended June 30, 2026 and June 30, 2025 due to permanent differences related to an Internal Revenue Code Section 162(m) limitation on compensation deductions and the impact of state and local taxes. In addition, a separate expansion of Section 162(m), enacted under prior law and scheduled to take effect in 2027, could further increase our effective tax rate and income tax expense, potentially materially.

Previous wording

We define Economic Earnings as income attributable to Westwood Holdings Group, Inc. plus non-cash equity-based compensation expense, amortization of intangible assets and deferred taxes related to goodwill. Although depreciation on fixed assets is a non-cash expense, we do not add it back when calculating Economic Earnings because depreciation charges represent an allocation of the decline in the value of the related assets that will ultimately require replacement. Although gains and losses from changes in the fair value of contingent consideration are non-cash, we do not add or subtract those back when calculating Economic Earnings because gains and losses on changes in the fair value of contingent consideration are considered regular following an acquisition. In addition, we do not adjust Economic Earnings for tax deductions related to restricted stock expense or amortization of intangible assets. Economic EPS represents Economic Earnings divided by diluted weighted average shares outstanding.

Current wording

We define Economic Earnings as income attributable to Westwood Holdings Group, Inc. plus non-cash equity-based compensation expense, amortization of intangible assets and deferred taxes related to goodwill. Although depreciation on fixed assets is a non-cash expense, we do not add it back when calculating Economic Earnings because depreciation charges represent an allocation of the decline in the value of the related assets that will ultimately require replacement. In addition, we do not adjust Economic Earnings for tax deductions related to restricted stock expense or amortization of intangible assets. Economic EPS represents Economic Earnings divided by diluted weighted average shares outstanding.

Previous wording

Historically we have funded our operations and cash requirements with cash generated from operating activities. We may also use cash from operations to pay dividends to our stockholders, for deferred contingent consideration payments, or for providing seed capital for certain investments. We had no debt as of March 31, 2026 and December 31, 2025. The changes in net cash provided by operating activities generally reflect changes in earnings plus the effects of non-cash items and changes in working capital, including liquidation of investments used to cover current liabilities. Changes in working capital, especially accounts receivable and accounts payable, are generally the result of timing differences between collection of fees billed and payment of operating expenses.

Current wording

Historically we have funded our operations and cash requirements with cash generated from operating activities. We may seek additional sources of cash to fund investments or acquisitions. These additional sources of cash may take the form of debt, and there can be no assurance that financing would be available at all or, if so, on terms that are acceptable to us. We may also use cash from operations to pay dividends to our stockholders, for deferred contingent consideration payments, or for providing seed capital for certain investments. The changes in net cash provided by operating activities generally reflect changes in earnings plus the effects of non-cash items and changes in working capital, including liquidation of investments used to cover current liabilities. Changes in working capital, especially accounts receivable and accounts payable, are generally the result of timing differences between collection of fees billed and payment of operating expenses.

Previous wording

We had cash and liquid investments of $34.2 million and $44.1 million as of March 31, 2026 and December 31, 2025, respectively.

Current wording

We had cash and investments of $56.5 million and $63.4 million as of June 30, 2026 and December 31, 2025, respectively.

Previous wording

During the three months ended March 31, 2026, cash flow used in operating activities included net sales of equity investments of $6.1 million and reductions in compensation and benefits payable of $9.0 million. During the three months ended March 31, 2025, cash flow used in operating activities was $4.9 million, which included net sales of investments of $8.0 million and reductions in compensation and benefits payable of $8.5 million and contingent consideration of $4.4 million following the final payment for the revenue retention earn-out.

Current wording

During the six months ended June 30, 2026, cash flow provided by operating activities included net sales of equity investments of $6.1 million and reductions in compensation and benefits payable of $5.4 million. During the six months ended June 30, 2025, cash flow provided by operating activities was $2.4 million, which included net sales of investments of $8.0 million, reductions in compensation and benefits payable of $5.2 million and contingent consideration of $4.4 million following the final payment for the revenue retention earn-out.

Previous wording

Cash flow provided by investing activities during the three months ended March 31, 2026 was related to the net sales of investments, return of capital from investments and purchases of property and equipment. Cash flow used in investing activities during the three months ended March 31, 2025 was related to the purchase of investments and internally developed software.

Current wording

Cash flow used in investing activities during the six months ended June 30, 2026 was related to the net purchases of investments, purchases of leasehold improvements and property and equipment, and return of capital from investments. Cash flow used in investing activities during the six months ended June 30, 2025 was related to the purchase of investments and internally developed software.

Previous wording

Cash flows used in financing activities of $2.9 million for the three months ended March 31, 2026 reflected the payment of dividends and restricted stock returned for the payment of taxes. Cash flows used in financing activities of $3.1 million for the three months ended March 31, 2025 reflected the payment of dividends, deferred contingent consideration payments and restricted stock returned for the payment of taxes.

Current wording

Cash flows used in financing activities of $4.2 million for the six months ended June 30, 2026 reflected the payment of dividends and restricted stock returned for the payment of taxes. Cash flows used in financing activities of $4.4 million for the six months ended June 30, 2025 reflected the payment of dividends, restricted stock returned for the payment of taxes and deferred contingent consideration payments.

Previous wording

Westwood Trust is required to maintain cash and investments in an amount equal to the minimum restricted capital of $4.0 million, as required by the Texas Finance Code. Restricted capital is included in "Cash and cash equivalents" and

Current wording

Westwood Trust is required to maintain cash and investments in an amount equal to the minimum restricted capital of $4.0 million, as required by the Texas Finance Code. Restricted capital is included in "Cash and cash equivalents" and "Investments, at fair value" in the accompanying Condensed Consolidated Balance Sheets. At June 30, 2026, Westwood Trust had approximately $13.7 million in excess of its minimum capital requirement.