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WisdomTree – Q1/25 Results 1 Q1 2025 Results May 2, 2025
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This presentation contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, the risks described below. If one or more of these or other risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this presentation completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. In particular, forward-looking statements in this presentation may include statements about: anticipated trends, conditions and investor sentiment in the global markets and ETPs; anticipated levels of inflows into and outflows out of our ETPs; our ability to deliver favorable rates of return to investors; competition in our business; whether we will experience future growth; our ability to develop new products and services and their potential for success; our ability to maintain current vendors or find new vendors to provide services to us at favorable costs; our ability to successfully implement our strategy relating to digital assets and blockchain-enabled financial services, including WisdomTree Prime® and WisdomTree Connect , and achieve its objectives; our ability to successfully operate and expand our business in non-U.S. markets; the effect of laws and regulations that apply to our business; and actions of activist stockholders. Our business is subject to many risks and uncertainties, including without limitation: • declining prices of securities, gold and other precious metals and other commodities and changes in interest rates and general market conditions can adversely affect our business by reducing the market value of the assets we manage or causing WisdomTree ETP investors to sell their fund shares and trigger redemptions; • fluctuations in the amount and mix of our AUM, whether caused by disruptions in the financial markets or otherwise, including but not limited to events such as a pandemic or war, geopolitical conflicts, political events, acts of terrorism and other matters beyond our control, may negatively impact revenues and operating margins, and may impede our ability to refinance our debt upon maturity or increase the cost of borrowing upon a refinancing; • competitive pressures could reduce revenues and profit margins; • we derive a substantial portion of our revenues from a limited number of products, and as a result, our operating results are particularly exposed to investor sentiment toward investing in the products’ strategies and our ability to maintain the AUM of these products, as well as the performance of these products and market-specific and political and economic risk; • a significant portion of our AUM is held in products with exposure to U.S. and international developed markets and we therefore have exposure to domestic and foreign market conditions and are subject to currency exchange rate risks; • withdrawals or broad changes in investments in our ETPs by investors with significant positions may negatively impact revenues and operating margins; • we face increased operational, regulatory, financial and other risks as a result of conducting our business internationally, and as we expand our digital assets product offerings and services beyond our existing ETP business; • many of our ETPs have a limited track record, and poor investment performance could cause our revenues to decline; • we depend on third parties to provide many critical services to operate our business and our ETPs. The failure of key vendors to adequately provide such services could materially affect our operating business and harm WisdomTree ETP investors; and • actions of activist stockholders against us, which have been costly and may be disruptive and cause uncertainty about the strategic direction of our business. Other factors, such as general economic conditions, including currency exchange rate fluctuations, also may have an effect on the results of our operations. For a more complete description of the risks noted above and other risks that could cause our actual results to differ from our current expectations, see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and in subsequent reports filed with or furnished to the SEC. The forward-looking statements in this presentation represent our views as of the date of this presentation. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Therefore, these forward-looking statements do not represent our views as of any date other than the date of this presentation. Forward Looking Statements WisdomTree – Q1/25 Results 2
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Q1 Highlights WisdomTree – Q1/25 Results + AUM and Net Flow Highlights: + Record AUM of +$115.8b at March 31, 2025 + Net inflows of $3.0b (11% annualized organic growth rate) across our global product suite, including fixed income, U.S. equity and international equity product categories • Net inflows across 5 of our 8 major product categories and in each of our three divisions: - U.S.: $1.8b - Europe: $1.1b - Digital: $0.1b • UCITS ETF suite attracting over $1b of net inflows (65% annualized organic growth rate); includes $770m of inflows into the WisdomTree European Defence UCITS (WDEF) launched in March • WisdomTree Government Money Market Digital Fund attracted $100m of net inflows + Updated statistics (as of April 30th): + AUM: $116.3b, up 0.4% from March 31, 2025 driven by both net inflows and positive market movement 3 107.2 109.7 112.6 109.8 115.8 116.3 Q1/24 Q2/24 Q3/24 Q4/24 Q1/25 Apr. 30th $ billions AUM 1,988 340 (2,395) (281) 3,048 124 Q1/24 Q2/24 Q3/24 Q4/24 Q1/25 Through Apr. 30th $ millions Net Flows
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Revenues and Earnings Results WisdomTree – Q1/25 Results Notable Items + Q1 adjusted revenues down (-2.2%) as compared to Q4 ‘24 due to two fewer trading days and a lower average fee capture, partly offset by higher average AUM + Q1 adjusted revenues up (+12.1%) as compared to Q1 ‘24 due to higher average AUM and higher other revenues (European ETPs) + Adjusted operating margins essentially unchanged from Q4 ’24 and up 190 basis points compared to Q1 ‘24 + Q1 ‘25 Results impacted by: + Seasonal compensation (payroll taxes, benefits and other items) in connection with year-end bonus payments Adjusted revenues, income, operating margin, EPS 1 See “Non-GAAP Financial Measurements” 4 Adjusted operating margin (non-GAAP) 1 29.7% 35.3% 37.3% 31.7% 31.6% Adjusted EPS (non-GAAP)1 $0.12 $0.16 $0.18 $0.17 $0.16 Net income/(loss) $22.1 $21.8 ($4.5) $27.3 $24.6 EPS-Diluted $0.13 $0.13 ($0.13) $0.18 $0.17 96.4 107.0 109.5 110.5 108.1 20.3 27.1 28.8 25.3 23.0 Q1/24 Q2/24 Q3/24 Q4/24 Q1/25 $ millions Adjusted Revenues Adjusted Net Income (non-GAAP)1 1
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2025 Guidance Update WisdomTree – Q1/25 Results Overview Guidance largely unchanged as compared to the prior quarter. However, WisdomTree is actively monitoring the impact of recent market volatility on our AUM. Potential for planned spend to be scaled back to address adverse market conditions, if necessary. Guidance Update + Gross margin guidance anticipated to be at the lower-end of the range at current AUM levels. Continued organic growth or favorable market conditions may result in gross margins trending to the middle to upper end of the range + Interest income guidance updated based upon the magnitude of our forecasted interest earning assets + Diluted share forecast updated taking into consideration the potential impact of anti-dilutive shares. Guidance is exclusive of incremental shares associated with convertible notes (an illustration is included in the Appendix) Footnotes 1 Excludes imputed interest related to our interest-free financing of preferred stock convertible into 13.1m shares of common stock, repurchased from a subsidiary of the World Gold Council in November 2023 5 Discretionary spending includes marketing, sales, professional fees, occupancy and equipment, depreciation and amortization, other Category Q1 Actual Updated Guidance Prior Guidance Compensation to revenue ratio 31.2% 28%-30% Unchanged Discretionary Spending $16.3m $68m-$72m Unchanged Gross margin (full year) 80.8% 81%-82% Unchanged Third-party distribution $3.1m $11m-$12m Unchanged Interest expense(1) $5.0m $20.0m Unchanged Interest income $1.9m $8m $7m Adjusted tax rate 25.5% 24%-25% Unchanged Diluted shares - weighted 146.5m 147m-149m 149m-150m
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WisdomTree’s Growth Algorithm WisdomTree – Q1/25 Results Ongoing inflow momentum as AUM is levered to attractive investment themes 6 Add ‘stickier’ inflows from expanding and deepening managed model relationships Early mover into tokenization charts a course for accelerated long-term growth Tap into scale benefits as AUM and revenue growth expands operating margins
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Expect Deepening Client Engagement will Drive Further AUM Growth in 2025 WisdomTree – Q1/25 Results + In Q1 2025: + WisdomTree was one of the only asset managers to expand AUM quarter-over- quarter, growing ~5.5% since year-end 2024 + We generated over $3b of net inflows, an ~11% pace of annualized growth + The number of clients using WisdomTree products is growing at a 4% annualized pace, including a double-digit pace for registered investment advisors (RIAs) + The average number of WisdomTree products held per WisdomTree client is expanding at a double-digit pace in 2025 so far + Engagement remains strong + 2025 goal continues to be to further deepen our mind- and wallet-share to drive continued AUM expansion 7 ($10) $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 $ billions Cumulative Flows Cumulative Market Move & Acquisitions Source: www.ir.wisdomtree.com, data as of March 31, 2025
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Custom Models – RIAs/IBDs + Build custom models with advisor + Offer ancillary services like trading and rebalancing + Manage a majority of an advisor’s business WisdomTree Portfolio Solutions Distribution Strategy WisdomTree – Q1/25 Results + WisdomTree’s ability to deliver strong model performance and asset growth allows the firm to navigate rigorous selection processes at some of the leading wealth management firms in the U.S. + Portfolio Solutions models distribution strategy is twofold… + Grow the number of advisors using WisdomTree model portfolios and continue at our large distribution partners + Leverage our customized model approach to pursue the registered investment advisor (RIA) and independent broker-dealer (IBD) partners where WisdomTree can manage a majority of each firm’s assets + …with a simple and attractive organic growth strategy as we are focused on: + Growing the number of advisors using our model products + Growing the number of accounts per advisor + Growing the assets per account 8 WisdomTree has a barbell approach to portfolio solutions distribution Large distribution networks + Gain shelf space at the largest distributors + Build a large group of recurring model users + Dedicated resources to drive results
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WisdomTree – Q1/25 Results Penetrate Accessible Market to Grow in Model AUA and Model Users in 2025 9 $2.2 $3.1 $3.8 $5.2 2022 2023 2024 2025 Goal 985 2,000 2,580 3,250 2022 2023 2024 2025 Goal Target 35% to 40% Expansion in Model Assets Under Advisement (AUA, $ billion) Target 25% to 30% Growth in Model Users + ~$4b of AUA as of Q1 2025: up 4% vs. year -end 2024 as ~20% pace of annualized organic growth was partially offset by weaker market conditions + ~2,700 advisors using WisdomTree Models as of Q1 2025, tracking well toward our 2025 goal
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WisdomTree – Q1/25 Results Illustrative annual AUM and revenue growth algorithm over the long run Illustrative margin outlook from scaling AUM and revenues 10 Through the Cycle, Organic Growth Accelerates Scale and Expands Operating Margins 5%-10% 5%-10% 10%-20% Organic growth Market return AUM and revenue growth 31.6% 50%+ Material margin improvement Q1 2025 adjusted operating margin Incremental margins greater than 50%
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The WisdomTree Digital Assets Platform WisdomTree – Q1/25 Results 11 Both Applications Built on WisdomTree’s Proprietary Tokenization Platform Direct to Retail Direct to Business WisdomTree Prime + Target Audience: U.S. Retail Investors + Delivery: Mobile App + Wallet Custody: WisdomTree managed wallets (custodial to customer) + Initial Offerings: + Digital Funds (Equity, Fixed Income, Models, Money Market Fund) + Gold + Bitcoin / Ether + Debit Card WisdomTree Connect + Target Audience: B2B & B2B2C, Institutions + Available to select global investors + Delivery: Web Portal, APIs + Wallet Custody: Non-Custodial (customer manages wallet) or third- party custodial wallet + Meet users where they are: tokens can be held in a wallet of any supported blockchain + Initial Offerings: + Money Market Fund + Current Capabilities: + Token Mint / Burn + Token Controls + Identity Credentials (tagging customer’s wallets) + Stablecoin conversion service + Potential Future Capabilities: + Retail non-custodial product integrations and offerings + Transfer Agency Services to 3rd Parties + Additional on-chain capabilities + Identity Services
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WisdomTree Digital Assets Current Product Pillars WisdomTree – Q1/25 Results 12 Retail Financial App: Create an ecosystem with WisdomTree Prime that allows one to save, spend & invest in one experience + Focus on usability and intuitiveness with a streamlined user experience + Offer a curated product line- up + Continue to expand on functionality over time Asset Tokens e.g. WisdomTree Gold Token Launch real asset tokens, including “safe haven” assets such as a U.S. dollar stablecoin and gold token + Issued by WisdomTree’s New York chartered trust company + Distribution capabilities both within and outside of WisdomTree Prime + Available for institutional, U.S. retail investors Digital Funds e.g. WT Government Money Market Digital Fund (WTGXX) Be an early leader with a suite of blockchain-enabled funds + Offerings include full fixed income suite, equities, Siegel indexes + Regulatory compliance and transparency are key – digital funds are effective with the SEC under the Investment Company Act of 1940 Crypto Mainstream Adoption Tokens, ETPs and Indexes Provide access to Crypto alongside mainstream assets + Launched taxonomy, indexes, European ETPs, and U.S. Bitcoin ETF + Provide access to BTC, ETH through WisdomTree Prime for U.S. retail investors + Offer institutional research, thought leadership, risk management, and custody B2B(2C) Platform & Services: Platform for asset tokens and digital fund offerings and related services to businesses and other users + Distribution platform for WisdomTree asset tokens and digital funds + Supports U.S. and international businesses and platforms ExposuresAccess & Services
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Digital Asset Metrics as of Q1 2025 WisdomTree – Q1/25 Results Opened Accounts +8% vs. year-end 2024 Funded Accounts +17% vs. year-end 2024 Average Daily User Transactions in Q1 Down due to market volatility 28,000 2,700 83 WisdomTree Prime AUM +$1 million vs. year-end 2024 $4 million 13 Total WisdomTree Tokenized AUM +$101 million vs. year-end 2024 $132 million
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$0 $2,000 $4,000 $6,000 $8,000 $10,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 # Years Since First Product Launch Total ETF AUM ($B) Tokenized Real World Assets Incl. Stablecoins ($B) $0 $100 $200 $300 $400 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total ETF AUM ($B) Tokenized Real World Assets Incl. Stablecoins ($B) A Secular Shift Toward Tokenization is Underway and WisdomTree is a Leader WisdomTree – Q1/25 Results + Tokenized real world assets (RWA) has grown from near zero in 2017 to over $200 billion in AUM today (mostly stablecoins) + Early growth curve of Tokenized RWA exceeds the early ETF adoption in the 1990s + WisdomTree’s tokenized money market and floating rate treasury funds are well- suited for yield generating safe havens + WisdomTree Connect has expanded to several different blockchains and gathered over $100 million in assets in 2025 so far + WisdomTree seeks to expand the adoption of our total tokenized product lineup further including gold, equities, and more 14 Growth of Tokenized Real World Assets vs. ETFs Since First Inception ($ billion) Note: the dotted line in the above graphic represents YTD levels and will change in subsequent presentations as 2025 develops Source: Artemis Analytics and RWA.xyz
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Key 2025 Themes WisdomTree – Q1/25 Results Grow & Diversify Revenue Streams 15 Disciplined Execution Strategic Innovation Proactive Capital Deployment + Grow the number of WisdomTree clients and deepen engagement + Expand models and portfolio solutions footprint + Continue to grow revenue outside asset based fees + Generated 73% y/y EPS growth in 2024 and +33% y/y EPS growth in Q1 2025 + WisdomTree European Defence UCITS ETF became our 26th $1b+ fund 5 weeks post launch, driven by organic growth + Further incorporate artificial intelligence (AI) into everyday workflows + Tap into scale benefits to drive margin expansion + Leader in secular shift toward tokenization – both for direct to retail and institutional users with over $100m in tokenized asset flows year-to-date + Forward thinking in AI deployment + Continue to explore new products or services that accelerate strategic growth + Maintain a proactive stance toward capital management + Explore accretive capital deployment opportunities like additional buybacks, strategic M&A, partnerships
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WisdomTree – Q1/25 Results Q&A 16
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WisdomTree – Q1/25 Results Appendix 17
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AUM and Net Flows WisdomTree – Q1/25 Results Quarterly ETP AUM Change Q1/25 Net Flows by Category Commodity & Currency Fixed Income International Developed U.S. Equity Leveraged/Inverse Emerging Markets Cryptocurrency Alternatives 18 ($ millions)($ billions) 3.1 2.9 115.8 109.8 12/31/24 Net Inflow Market Move 3/31/25 (445) (159) (89) 100 116 474 963 2,088
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Balance Sheet WisdomTree – Q1/25 Results Balance Sheet YTD Change in Cash & Securities (1) (1) Includes financial instruments owned 19 Mar. 31, Dec. 31, 2025 2024 Assets Cash and financial instruments (1) $255.7 $266.6 Investments 9.2 8.9 Accounts receivable 46.1 44.9 Deferred tax asset, net 5.6 11.7 Fixed assets, net 0.3 0.3 Goodwill and intangibles 693.1 692.7 Other assets 12.9 8.4 Total assets $1,022.9 $1,033.5 Liabilities Fund management and administration $34.5 $31.1 Compensation and benefits 11.8 39.7 Accounts payable and other liabilities 20.3 22.1 Income taxes payable 0.0 0.7 Payable to GBH 27.4 27.0 Convertible notes 512.7 512.0 Lease liabilities 0.6 0.9 Total liabilities 607.3 633.5 Preferred stock 0.0 0.0 Stockholders' equity 415.6 400.0 Total liabilities and stockholders' equity $1,022.9 $1,033.5 ($ millions) 266.6 6.4 2.5 (12.7) (4.6) (1.9) (0.6) 255.7 ($ millions)
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Convertible Notes – Illustrative Impact on Quarterly Diluted Shares WisdomTree – Q1/25 Results Incremental shares issuable when conversion spread is positive are included in diluted EPS computation. Illustrative computation shown below assuming a $12.00 average stock price: (1) Represents principal divided by conversion price 20 Issued 2021 Issued 2023 Issued 2024 $150M Notes $26M Notes $345M Notes (2026 Maturity) (2028 Maturity) (2029 Maturity) Conversion Spread WT Avg Price in Qtr $12.00 $12.00 $12.00 − Conversion Price $11.04 $9.54 $11.82 Conversion spread: $0.96 $2.46 $0.18 Potential Shares Conversion spread: $0.96 $2.46 $0.18 × Underlying shares (1): 13,586,957 2,709 10,998,308 Subtotal - Dilutive $: 13,043,478 6,664 1,979,695 ÷ WT Avg Price in Qtr $12.00 $12.00 $12.00 Dilutive Share Impact - Current Qtr 1,086,957 555 164,975
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Consolidated Financial Results WisdomTree – Q1/25 Results 21 2024 2025 Q1 Q2 Q3 Q4 Q1 Revenues Advisory fees 92,501$ 98,938$ 101,659$ 102,264$ 99,549$ Other revenues 4,337 8,096 11,509 8,433 8,533 Total revenues 96,838 107,034 113,168 110,697 108,082 Expenses Compensation and benefits 31,054 30,790 29,405 30,032 33,788 Fund management and administration 19,962 20,139 21,004 22,858 20,714 Marketing and advertising 4,408 5,110 4,897 6,117 4,813 Sales and business development 3,611 3,640 3,465 4,101 4,137 Professional and consulting fees 3,630 6,594 6,315 4,559 2,782 Occ., communications and equipment 1,210 1,314 1,397 1,423 1,482 Depreciation and amortization 383 418 447 504 540 Third-party distribution fees 2,307 2,687 2,983 3,161 3,112 Other 2,323 2,831 2,463 2,902 2,552 Total expenses 68,888 73,523 72,376 75,657 73,920 Operating Income 27,950 33,511 40,792 35,040 34,162 Interest Expense (4,128) (4,140) (5,027) (5,616) (5,441) Interest Income 1,398 1,438 1,795 2,147 1,897 Loss on extinguishment of convertible notes -- -- (30,632) -- -- Other (losses)/gains 2,592 (1,283) (3,062) 2,627 (250) Income before taxes 27,812 29,526 3,866 34,198 30,368 Income tax expense 5,701 7,767 8,351 6,890 5,739 Net Income 22,111$ 21,759$ (4,485)$ 27,308$ 24,629$ As adjusted (non-GAAP) Total revenues 96,385$ 107,034$ 109,507$ 110,505$ 108,082$ Total operating expenses 67,740$ 69,252$ 68,715$ 75,465$ 73,920$ Operating income 27,950$ 37,782$ 40,792$ 35,040$ 34,162$ Income before income taxes 26,987$ 36,083$ 37,187$ 33,033$ 30,947$ Income tax expense 6,731$ 9,008$ 9,049$ 7,753$ 7,933$ Net income 20,254$ 27,075$ 28,768$ 25,280$ 23,014$ Earnings per share - diluted 0.12$ 0.16$ 0.18$ 0.17$ 0.16$ Weighted average common shares - diluted 165,268 166,359 156,745 147,612 146,545
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In an effort to provide additional information regarding our results as determined by GAAP, we also disclose certain non-GAAP information which we believe provides useful and meaningful information. Our management reviews these non-GAAP financial measurements when evaluating our financial performance and results of operations; therefore, we believe it is useful to provide information with respect to these non-GAAP measurements so as to share this perspective of management. Non-GAAP measurements do not have any standardized meaning, do not replace nor are superior to GAAP financial measurements and are unlikely to be comparable to similar measures presented by other companies. These non-GAAP financial measurements should be considered in the context with our GAAP results. The non-GAAP financial measurements contained in this release include: • Adjusted Revenues, Operating Income, Operating Expenses, Income Before Income Taxes, Income Tax Expense, Net Income and Diluted Earnings per Share. We disclose adjusted revenues, operating income, operating expenses, income before income taxes, income tax expense, net income and diluted earnings per share as non-GAAP financial measurements in order to report our results exclusive of items that are non-recurring or not core to our operating business. We believe presenting these non-GAAP financial measurements provides investors with a consistent way to analyze our performance. These non-GAAP financial measurements exclude the following: • Legal and other related expenses covered by insurance: During the year ended December 31, 2024, we have incurred $4.3 million of legal and other related expenses in connection with a settlement with the U.S. Securities and Exchange Commission (the “SEC”) regarding certain statements about the ESG screening process for three ETFs advised by WisdomTree Asset Management, Inc. (the “SEC ESG Settlement”). These expenses were covered by insurance and reimbursed on April 7, 2025. GAAP requires that such covered expenses be reported gross in the income statement such that revenues are recorded to offset expenses incurred. We offset the revenues and related expenses when calculating our non-GAAP financial measurements as the gross presentation serves to overstate our revenues and expenses recognized in the ordinary course of business. • Gains or losses on financial instruments owned: We account for our financial instruments owned as trading securities which requires these instruments to be measured at fair value with gains and losses reported in net income. We exclude these items when calculating our non-GAAP financial measurements as the gains and losses introduce volatility in earnings and are not core to our operating business. • Tax windfalls and shortfalls upon vesting of stock-based compensation awards: GAAP requires the recognition of tax windfalls and shortfalls within income tax expense. These items arise upon the vesting of stock-based compensation awards and the magnitude is directly correlated to the number of awards vesting/exercised as well as the difference between the price of our stock on the date the award was granted and the date the award vested or was exercised. We exclude these items when calculating our non-GAAP financial measurements as they introduce volatility in earnings and are not core to our operating business. • Imputed interest on our payable to the Gold Bullion Holdings (Jersey) Limited (“GBH”): During the fourth quarter of 2023, we repurchased our Series C Non-Voting Convertible Preferred Stock which was convertible into approximately 13.1 million shares of WisdomTree common stock, from GBH, a subsidiary of the World Gold Council, for aggregate cash consideration of approximately $84.4 million. Under the terms of the transaction, we paid GBH $40.0 million on the closing date, with the remainder of the purchase price payable in equal annual installments on the first, second and third anniversaries of the closing date, with no requirement to pay interest. Under US GAAP, the obligation is recorded at its present value utilizing a market rate of interest on the closing date of 7.0% and the corresponding discount is amortized as interest expense pursuant to the effective interest method of accounting over the life of the obligation. We exclude this item when calculating our non-GAAP financial measurements as recognition of interest expense is non-cash and contrary to the stated terms of our obligation. • Other items: Losses on extinguishment of convertible notes, a civil money penalty in connection with SEC ESG Settlement, gains and losses recognized on our investments, changes in deferred tax asset valuation allowance and expenses incurred in response to an activist campaign are excluded when calculating our non-GAAP financial measurements. • Adjusted Effective Income Tax Rate. We disclose our adjusted effective income tax rate as a non-GAAP financial measurement in order to report our effective income tax rate exclusive of items that are non-recurring or not core to our operating business. We believe reporting our adjusted effective income tax rate provides investors with a consistent way to analyze our income taxes. Our adjusted effective income tax rate is calculated by dividing adjusted income tax expense by adjusted income before income taxes. See above for information regarding the items that are excluded. • Gross Margin and Gross Margin Percentage. We disclose our gross margin and gross margin percentage as non-GAAP financial measurements because we believe they provide investors with a consistent way to analyze the amount we retain after paying third-party service providers to operate our ETPs. These measures also assist us in analyzing the profitability of our products. We define gross margin as total adjusted operating revenues less fund management and administration expenses. Gross margin percentage is calculated as gross margin divided by total adjusted operating revenues. Non-GAAP Financial Measurements WisdomTree – Q1/25 Results 22
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Non-GAAP Reconciliation to GAAP Results WisdomTree – Q1/25 Results 23 Three Months Ended ($ in thousands) Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31 Unaudited 2025 2024 2024 2024 2024 Adjusted net income and diluted earnings per share: Net income/(loss), as reported 24,629$ 27,308$ (4,485)$ 21,759$ 22,111$ Deduct: Tax windfalls upon vesting of stock-based compensation awards (2,083) -- (25) (40) (699) Add back: Imputed interest on payable to GBH, net of income taxes 344 451 528 513 504 Add back/(deduct): Losses/(gains) on financial instruments owned, net of income taxes 333 (1,722) (607) 220 (1,562) (Deduct)/add back: (Gains)/losses recognized on our investments, net of income taxes (239) 389 (436) 998 (93) Add back/(deduct): Increase/(decrease) in deferred tax asset valuation allowance on financial instruments owned 30 (428) (335) 391 (531) Add back: Loss on extinguishment of convertible notes, net of income taxes -- (718) 30,128 -- -- Add back: Civil money penalty in conneciton with SEC ESG Settlement -- -- 4,000 -- -- Add back: Expenses incurred in response to the activist campaign, net of income taxes -- -- -- 3,234 526 Adjusted net income 23,014$ 25,280$ 28,768$ 27,075$ 20,256$ Weighted average common share - diluted 146,545 147,612 156,745 166,359 165,268 Adjusted earnings per share - diluted $0.16 $0.17 $0.18 $0.16 $0.12 Three Months Ended ($ in thousands) Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31 Unaudited 2025 2024 2024 2024 2024 G ross Margin and G ross Margin Percentage Operating Revenues 108,082$ 110,697$ 113,168$ 107,034$ 96,838$ Deduct: Legal and other related expenses covered by insurance -- (192) (3,661) -- (453) Operating revenues, as adjusted 108,082$ 110,505$ 109,507$ 107,034$ 96,385$ Deduct: Fund management and administration (20,714) (22,858) (21,004) (20,139) (19,962) Gross margin 87,368$ 87,647$ 88,503$ 86,895$ 76,423$ Gross margin percentage 80.8% 79.3% 80.8% 81.2% 79.3% Three Months Ended ($ in thousands) Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31 Unaudited 2025 2024 2024 2024 2024 Adjusted Operating Income and Operating Income Margin Operating Revenues 108,082$ 110,697$ 113,168$ 107,034$ 96,838$ Deduct: Legal and other related expenses covered by insurance -- (192) (3,661) -- (453) Operating revenues, as adjusted 108,082$ 110,505$ 109,507$ 107,034$ 96,385$ Operating income 34,162$ 35,040$ 40,792$ 33,511$ 27,950$ Add back: Expenses incurred in response to the activist campaign -- -- -- 4,271 695 Adjusted operating income 34,162$ 35,040$ 40,792$ 37,782$ 28,645$ Adjusted operating income margin 31.6% 31.7% 37.3% 35.3% 29.7% Three Months Ended ($ in thousands) Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31 Unaudited 2025 2024 2024 2024 2024 Adjusted Total Operating Expenses Total operating expenses 73,920$ 75,657$ 72,376$ 73,523$ 68,888$ Deduct: Legal and other related expenses covered by insurance -- (192) (3,661) -- (453) Deduct: Expenses incurred in response to the activist campaign -- -- -- (4,271) (695) Adjusted operating expenses 73,920$ 75,465$ 68,715$ 69,252$ 67,740$ Three Months Ended ($ in thousands) Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31 Unaudited 2025 2024 2024 2024 2024 Adjusted Effective Income Tax Rate Income before income taxes 30,368$ 34,198$ 3,866$ 29,526$ 27,812$ Add back: Imputed interest on payable to GBH 455 596 697 677 666 Add back/(deduct): Losses/(gains) on financial instruments owned 440 (2,275) (802) 291 (2,063) (Deduct)/Add back: (Gains)/losses recognized on investments (316) 514 (576) 1,318 (123) Add back: Loss on extinguishment of convertible notes -- -- 30,632 -- -- Add back: Civil money penalty in connection with SEC ESG Settlement -- -- 4,000 -- -- Add back: Expenses incurred in response to the activist campaign -- -- -- 4,271 695 Adjusted income before income taxes 30,947$ 33,033$ 37,817$ 36,083$ 26,987$ Income tax expense 5,739$ 6,890$ 8,351$ 7,767$ 5,701$ Add back: Tax windfalls upon vesting of stock-based compensation awards 2,083 -- 25 40 699 Add back: Tax benefit on imputed interest 111 145 169 164 162 Add back/(deduct): Tax benefit/(expense) arising from losses/(gains) on financial instruments owned 107 (553) (195) 71 (501) (Deduct)/add back: (Increase)/decrease in deferred tax asset valuation allowance on financial instruments owned (30) 428 335 (391) 531 (Deduct/)Add back: Tax benefit/(expense) on gains and losses on investments (77) 125 (140) 320 (30) Add back: Tax benefit arising from extinguishment of convertible notes -- 718 504 -- -- Add back: Tax benefit arising from expenses incurred in response to the activist campaign -- -- -- 1,037 169 Adjusted income tax expense 7,933$ 7,753$ 9,049$ 9,008$ 6,731$ Adjusted effective income tax rate 25.6% 23.5% 23.9% 25.0% 24.9%
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QTD Mar. Imputed Losses on Gain on DTA Val. Windfall Tax US GAAP Interest Securities Inv. Allowance Benefits Non-GAAP Revenues Advisory fees 99,549$ -$ -$ -$ -$ -$ 99,549$ Other revenues 8,533 - - - - - 8,533 Total revenues 108,082 - - - - - 108,082 Expenses Compensation and benefits 33,788 - - - - - 33,788 Fund management and admin 20,714 - - - - - 20,714 Marketing and advertising 4,813 - - - - - 4,813 Sales and business development 4,137 - - - - - 4,137 Professional and consulting fees 2,782 - - - - - 2,782 Occ., commun. and equip. 1,482 - - - - - 1,482 Depreciation and amort. 540 - - - - - 540 Third-party distribution fees 3,112 - - - - - 3,112 Other 2,552 - - - - - 2,552 Total expenses 73,920 - - - - - 73,920 Operating Income 34,162 - - - - - 34,162 Interest Expense (5,441) 455 - - - - (4,986) Interest Income 1,897 - - - - - 1,897 Other losses and gains (250) - 440 (316) - - (126) Income before taxes 30,368 455 440 (316) - - 30,947 Income tax expense 5,739 111 107 (77) (30) 2,083 7,933 Net income 24,629$ 344$ 333$ (239)$ 30$ (2,083)$ 23,014$ Diluted Shares: 146,545 EPS: 0.16$ Reconciliation of US GAAP to Non-GAAP results – Q1 2025 WisdomTree – Q1/25 Results 24
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Thank you.