WisdomTree, Inc. Q4 FY2025 earnings call

• Bryan Edmiston started by covering Q4 results, noting AUM ended at a record $144.5B, up 5% QoQ and 30% YoY, with $8.5B inflows for the year. The Ceres acquisition expanded AUM mix and margins. • Robert Lilien discussed 2025 as a strong year, highlighting organic growth, margin expansion, strong momentum in metal strategies, Europe's thematic success, growth in models and SMAs, traction in digital assets, and expansion in private markets via Ceres. • Jonathan Steinberg emphasized strong results, diversified business, and entering 2026 with confidence, noting WisdomTree is in a new chapter with scale and capabilities.

Assets under management ended the year at $144.5 billion, a record, up 5% from the third quarter and over 30% year-over-year. Despite modest outflows in Q4, the year saw $8.5 billion of inflows, an 8% organic growth rate. The Ceres acquisition closed on October 1, adding almost $2 billion in farmland-based strategies and expanding annual revenue capture and operating margins by over 200 basis points. European listed products had strong AUM growth, from $30.7 billion to $53.3 billion with over $6 billion in net inflows. US AUM reached $88.5 billion with $1.4 billion of net inflows for the year. Digital assets platform had AUM of approximately $770 million at year-end. Adjusted revenues were $147.4 million in Q4, up 17% QoQ and 33% YoY, with Ceres contributing $12 million in revenues, including $7.1 million from performance fees. Other revenue was $12.7 million in Q4, up from $11 million in prior quarter, driven by higher European listed AUM.

• Compensation to revenue ratio forecasted to range 26%-28%, a 2 percentage point downward shift. • Discretionary spending forecasted $80M-$86M vs $71M prior year. • Gross margin guidance 82%-83% vs 81.9% prior year. • Third-party distribution expense $17M-$19M vs $16M prior year. • Interest expense ~$40M, interest income ~$8M. • Adjusted tax rate ~24%. • Weighted average diluted shares 152M-157M.

• Factors could cause actual results to differ materially from forward-looking statements, including risks set forth in the 10-K and SEC filings.

Q: What are the biggest opportunities for WisdomTree in '26 and '27?

A: Jeremy Schwartz mentioned Europe's thematic lineup, especially rare earths and strategic metals, and the U.S. commodity run. Robert Lilien noted broad-based growth across ETFs, models, SMAs, tokenization, and private markets.

Q: What are the major categories of discretionary spending?

A: Bryan Edmiston said it's largely driven by marketing and sales-related expenses tied to growth initiatives.

Q: Will there be a higher start base for earnings going forward?

A: Bryan Edmiston said yes, driven by comp ratio, other revenue growth, and Ceres' performance fee.

Q: How does WisdomTree plan to scale tokenization?

A: Will Peck said through direct to retail, WisdomTree Connect, and platform sales, engaging with fintech apps, software service providers, and broker-dealers.

Q: Lessons learned from the Ceres acquisition?

A: Jonathan Steinberg said integration was smooth, confirming confidence in strategic M&A. Robert Lilien added it's a great fit with strong historical performance and synergies in distribution and product.

Q: Examples of digital asset users?

A: Will Peck mentioned stablecoin issuers, businesses using stablecoins in treasury management, collateral users, and broadly on-chain investors.

Q: On macroeconomic volatility and WisdomTree's business?

A: Jeremy Schwartz said WisdomTree's diversified exposures make it well-positioned for various macro environments.