WisdomTree, Inc. Q3 FY2025 earnings call

• Record global AUM of $137.2 billion achieved, driven by strong organic growth and favorable market conditions. - $2.2 billion in global net inflows in Q3, with year-to-date inflows at $8.8 billion. - Ceres acquisition closed in early October, increasing revenue capture and operating margins by over 200 basis points and diversifying AUM with farmland. - Model AUM grew to approximately $5.85 billion, up more than 50% year-to-date. - Digital assets AUM exited the quarter at around $600 million, driven by flows into blockchain-enabled money market fund. - Focus on disciplined expense management and leveraging platform scale for margin expansion.

WisdomTree ended the third quarter with record global AUM of $137.2 billion, including record U.S. AUM of $88.3 billion, record European AUM of $48.3 billion, and digital AUM of almost $600 million. In the third quarter, global net inflows were $2.2 billion, bringing year-to-date inflows through September 30 to $8.8 billion with an annualized organic growth pace of 11%. Adjusted revenues were $125.6 million during the quarter, an increase of 11.5% from the second quarter and up approximately 14.7% versus the prior year quarter. Other revenues increased to $11 million this quarter. Adjusted net income for the quarter was $34.5 million or $0.23 per share.

• No changes to compensation and discretionary expense guidance. - Anticipate gross margin to increase to 83% in Q4 due to Ceres acquisition. - Adjusted interest expense expected to be approximately $11 million in Q4. - Weighted average diluted shares expected 146 million to 149 million in Q4. - Ceres' annualized operating expenses approximately $15 million, ~80% related to compensation, with ~1/4 impacting in Q4.

• Factors causing actual results to differ from forward-looking statements as per SEC filings. - Market fluctuations affecting digital asset flows. - Uncertainty in performance fees from Ceres due to underlying farmland returns.

Q: Europe has been the star with flows, give a 3-5 year vision of flows U.S. vs rest of world?

A: Jonathan Steinberg notes Europe has strong fundamental growth potential and synergy with U.S. business; Jarrett Lilien highlights global product suite as key.

Q: Talk about digital asset tech stack and tokenization?

A: William Peck discusses active conversations on tokenization, mentions token issuance platform and stablecoin orchestration.

Q: Ceres AUM and performance fees estimation?

A: Bryan Edmiston explains AUM walk, mark assumption on Ceres AUM, and performance fee calculation.

Q: Impact of digital strategy on income statement?

A: Bryan Edmiston mentions current revenue from digital is ~25 basis point fee capture, and focus on continued investment.

Q: Outflows in commodities and USFR?

A: Jeremy Schwartz attributes outflows to profit taking in gold and reallocations in USFR; Jarrett Lilien emphasizes long-term fundamentals for growth remain strong