Record AUM of $107.2 Billion
870bps of Operating Margin Expansion vs. Q1
2023
Diluted Earnings Per Share of $0.13 ($0.12, as
Adjusted)
WisdomTree, Inc. (NYSE: WT), a global financial innovator, today
reported financial results for the first quarter of 2024.
$22.1 million of net income ($20.3(1) million of net income,
as adjusted), see “Non-GAAP Financial Measurements” for
additional information.
$107.2 billion of ending AUM, an increase of 7.1% from
the prior quarter arising from market appreciation and net
inflows.
$2.0 billion of net inflows, primarily driven by inflows
into our international developed equity and U.S. equity
products.
0.36% average advisory fee, unchanged from the prior
quarter.
$96.8 million of operating revenues, an increase of 6.6%
from the prior quarter primarily due to higher average AUM.
79.4% gross margin(1), a 0.3 point decrease from the
prior quarter due to higher fund costs.
28.9% operating income margin (29.6%(1) as adjusted), a
0.2 point increase (0.9 point increase, as adjusted(1)) compared to
our operating margin of 28.7% in the prior quarter primarily due to
higher revenues.
$0.03 quarterly dividend declared, payable on May
22, 2024 to stockholders of record as of the close of business on
May 8, 2024.
Update from Jonathan Steinberg, WisdomTree
CEO
“It has been a great start to the year
with record AUM, nearly $2 billion of net inflows, and 820 basis
points of margin expansion (as adjusted), driving a 71% increase in
our earnings per share as compared to the first quarter of last
year. Importantly, we expect that momentum to continue as we are
executing on our key initiatives to drive the next $100 billion of
assets under management: traction in our ETP lineup, an expanding
models footprint, and leadership in the secular shift toward
tokenization of financial assets.
We achieved several key milestones in the
quarter, including the receipt of a trust charter from the New York
State Department of Financial Services – the premier regulator for
digital asset businesses in the U.S. – and the launch of our debit
card to WisdomTree Prime™ users. This key combination not only
expands our geographic footprint but also allows us to offer
value-added services to our customer base. We continue to believe
that tokenized assets and blockchain-enabled finance represent a
growth opportunity for WisdomTree, and this quarter’s
accomplishments are yet another positive step in unlocking new
customers, new markets and new revenue streams.”
Update from Jarrett Lilien, WisdomTree COO
and President
“We are pleased to report that we are
delivering strong operating margin expansion and earnings growth,
demonstrating our scalable operating model and ability to leverage
our AUM growth. We are confident that we have the right strategy,
the right products, the right team and the right culture to
continue to create value for our clients and stockholders in the
long term. We remain extremely bullish about 2024 and beyond as we
continue to drive organic growth, expand our margins, and lead the
industry's evolution in tokenized assets and blockchain-enabled
finance.
For a number of years, we have been alone
talking about many of the themes driving our growth, including our
diversified product suite, models and the potential of tokenization
and blockchain-enabled finance – but now we have company. If you
want to know what the industry is going to do tomorrow, look at
what WisdomTree is doing today.”
OPERATING AND FINANCIAL HIGHLIGHTS
Three Months Ended
Mar. 31, 2024
Dec. 31, 2023
Sept. 30, 2023
June 30, 2023
Mar. 31, 2023
Consolidated
Operating Highlights ($ in billions):
AUM—end of period
$
107.2
$
100.1
$
93.7
$
93.7
$
90.7
Net inflows/(outflows)
$
2.0
$
(0.3)
$
2.0
$
2.3
$
6.3
Average AUM
$
102.4
$
96.6
$
95.7
$
91.6
$
87.5
Average advisory fee
0.36%
0.36%
0.36%
0.36%
0.36%
Consolidated
Financial Highlights ($ in millions, except per share
amounts):
Operating revenues
$
96.8
$
90.8
$
90.4
$
85.7
$
82.0
Net income
$
22.1
$
19.1
$
13.0
$
54.3
$
16.2
Diluted earnings per share
$
0.13
$
0.16
$
0.07
$
0.32
$
0.10
Operating income margin
28.9%
28.7%
29.5%
21.2%
20.2%
As Adjusted
(Non-GAAP(1)):
Gross margin
79.4%
79.7%
80.1%
79.3%
79.1%
Net income, as adjusted
$
20.3
$
18.6
$
18.0
$
14.9
$
11.2
Diluted earnings per share, as
adjusted
$
0.12
$
0.11
$
0.10
$
0.09
$
0.07
Operating income margin, as adjusted
29.6%
28.7%
29.5%
26.9%
21.4%
RECENT BUSINESS DEVELOPMENTS
Company
News
- In February 2024, we launched the WisdomTree Prime™ Visa Debit
Card, a digital and physical card enabling users to spend outside
the WisdomTree Prime app.
- In March 2024, we were named ‘Best Leveraged & Inverse ETF
Issuer ($1bn+)’ at the ETF Express European ETF Awards and ‘Best
ETF Provider’ at the Diaman Quant Awards in Italy; we were granted
a charter from the New York State Department of Financial Services
(DFS) to operate as a limited purpose trust company under the New
York Banking Law; and the Board of Directors extended our existing
limited duration stockholder rights plan, as amended.
Product News
- In February 2024, we cross-listed the WisdomTree Megatrends
UCITS ETF (WMGT) on the SIX; and the WisdomTree Cybersecurity UCITS
ETF (WCBR) was named ‘Best Thematic and Sector ETF’ at the Le
Revenu Awards 2024 in France.
- In March 2024, we launched the WisdomTree 1-3 Year Laddered
Treasury Fund (USSH) and the 7-10 Year Laddered Treasury Fund
(USIN) on the Nasdaq; we celebrated the 10-year anniversary of the
WisdomTree Floating Rate Treasury Fund (USFR); the European
cryptocurrency ETP range surpassed $800 million in AUM; the
WisdomTree Emerging Markets Small Cap Dividend UCITS ETF (DGSE) was
named ‘Best Emerging Markets Equity ETF’ at the Mountain View Fund
Awards 2024 in Germany; and the WisdomTree Artificial Intelligence
UCITS ETF (WTAI) was named ‘Best Equity ETF’ at the Money Mate
Awards in Italy.
- In April 2024, we launched the WisdomTree Energy Transition and
Rare Earths Miners UCITS ETF (RARE) on the London Stock Exchange,
B�rse Xetra and Borsa Italiana; we launched the WisdomTree US
Quality Growth UCITS ETF (QGRW) on the London Stock Exchange, B�rse
Xetra and Borsa Italiana; and we cross-listed a distributing class
of the WisdomTree Global Quality Dividend Growth UCITS (GGRW) on
the Borsa Italiana.
WISDOMTREE, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per
share amounts)
(Unaudited)
Three Months Ended
Mar. 31, 2024
Dec. 31, 2023
Sept. 30, 2023
June 30, 2023
Mar. 31, 2023
Operating Revenues:
Advisory fees
$
92,501
$
86,988
$
86,598
$
82,004
$
77,637
Other income
4,337
3,856
3,825
3,720
4,407
Total revenues
96,838
90,844
90,423
85,724
82,044
Operating Expenses:
Compensation and benefits
31,054
27,860
27,955
26,319
27,398
Fund management and administration
19,962
18,445
18,023
17,727
17,153
Marketing and advertising
4,408
4,951
3,833
4,465
4,007
Sales and business development
3,611
3,881
3,383
3,326
2,994
Contractual gold payments
—
—
—
1,583
4,486
Professional fees
3,630
3,201
3,719
8,334
3,715
Occupancy, communications and
equipment
1,210
1,208
1,203
1,172
1,101
Depreciation and amortization
383
335
307
121
109
Third-party distribution fees
2,307
2,549
2,694
1,881
2,253
Other
2,323
2,379
2,601
2,615
2,257
Total operating expenses
68,888
64,809
63,718
67,543
65,473
Operating income
27,950
26,035
26,705
18,181
16,571
Other Income/(Expenses):
Interest expense.
(4,128)
(3,758)
(3,461)
(4,021)
(4,002)
Gain on revaluation/termination of
deferred consideration—gold payments
—
—
—
41,361
20,592
Interest income
1,398
1,225
791
1,000
1,083
Impairments
—
(339)
(2,703)
—
(4,900)
Loss on extinguishment of convertible
notes
—
—
—
—
(9,721)
Other gains and losses, net
2,592
1,602
(2,512)
1,286
(2,007)
Income before income taxes
27,812
24,765
18,820
57,807
17,616
Income tax expense
5,701
5,688
5,836
3,555
1,383
Net income
$
22,111
$
19,077
$
12,984
$
54,252
$
16,233
Earnings per share—basic
$
0.14(2)
$
0.16(2)
$
0.07(2)
$
0.32(2)
$
0.10(2)
Earnings per share—diluted
$
0.13
$
0.16(2)
$
0.07
$
0.32
$
0.10
Weighted average common shares—basic
146,464
145,310
145,284
144,351
143,862
Weighted average common shares—diluted
165,268
171,703
177,140
170,672
159,887
As Adjusted
(Non-GAAP(1))
Total operating expenses
$
68,193
$
64,809
$
63,718
$
62,630
$
64,506
Operating income
$
28,645
$
26,035
$
26,705
$
23,094
$
17,538
Income before income taxes
$
26,987
$
23,908
$
23,902
$
19,752
$
14,485
Income tax expense
$
6,731
$
5,342
$
5,854
$
4,833
$
3,287
Net income
$
20,256
$
18,566
$
18,048
$
14,919
$
11,198
Earnings per share—diluted
$
0.12
$
0.11
$
0.10
$
0.09
$
0.07
Weighted average common shares—diluted
165,268
171,703
177,140
170,672
159,887
QUARTERLY HIGHLIGHTS
Operating Revenues
- Operating revenues increased 6.6% and 18.0% from the fourth
quarter of 2023 and the first quarter of 2023, respectively,
primarily due to higher average AUM.
- Our average advisory fee was 0.36% during each of the first
quarter of 2024, the fourth quarter of 2023 and the first quarter
of 2023.
Operating Expenses
- Operating expenses increased 6.3% from the fourth quarter of
2023 primarily due to higher compensation arising from payroll
taxes, benefits and other items in connection with the payment of
year-end bonuses, as well as higher fund management and
administration costs and professional fees. These increases were
partly offset by lower marketing expenses, sales and business
development expenses and third-party distribution fees.
- Operating expenses increased 5.2% from the first quarter of
2023 primarily due to higher incentive and stock-based compensation
expense and increased headcount, as well as higher fund management
and administration costs. These increases were partly offset by the
termination of the deferred consideration—gold payments obligation
on May 10, 2023.
Other Income/(Expenses)
- Interest expense increased 9.8% from the fourth quarter of 2023
primarily due to the recognition of a full quarter of imputed
interest on our obligation payable to Gold Bullion Holdings
(Jersey) Limited (“GBH”), a subsidiary of the World Gold Council,
in connection with our repurchase in November 2023 of our Series C
Non-Voting Convertible Preferred Stock. Interest expense increased
3.1% from the first quarter of 2023 due to the recognition of
imputed interest on our obligation payable to GBH, partly offset by
a lower level of debt outstanding.
- Interest income increased 14.1% and 29.1% from the fourth
quarter of 2023 and first quarter of 2023, respectively, due to a
higher level of interest-earning assets.
- Other gains and losses, net was a gain of $2.6 million for the
first quarter of 2024. This quarter includes gains of $2.1 million
and $0.1 million on our financial instruments and our investments,
respectively. Gains and losses also generally arise from the sale
of gold earned from management fees paid by our physically-backed
gold exchange-traded products (“ETPs”), foreign exchange
fluctuations and other miscellaneous items.
Income Taxes
- Our effective income tax rate for the first quarter of 2024 was
20.5%, resulting in income tax expense of $5.7 million. The
effective tax rate differs from the federal statutory rate of 21.0%
primarily due to the decrease in the deferred tax asset valuation
allowance on losses recognized on the Company’s financial
instruments owned, tax windfalls associated with the vesting of
stock-based compensation awards and a lower tax rate on foreign
earnings. These items were partly offset by state and local income
taxes.
- Our adjusted effective income tax rate for the first quarter of
2024 was 24.9%(1).
CONFERENCE CALL DIAL-IN AND WEBCAST DETAILS
WisdomTree will discuss its results and operational highlights
during a live webcast on Friday, April 26, 2024 at 11:00 a.m. ET,
which can be accessed using the following link:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=fQD4Npsv.
Participants also can dial in using the following numbers: (877)
407-9210 or (201) 689-8049. Click here to access the participant
international toll-free access numbers. To avoid delays, we
encourage participants to log in or dial into the conference call
10 minutes ahead of the scheduled start time. All earnings
materials and the webcast can be accessed through WisdomTree’s
investor relations website at https://ir.wisdomtree.com. A replay
of the webcast will also be available shortly after the call.
About WisdomTree
WisdomTree is a global financial innovator, offering a
well-diversified suite of exchange-traded products (ETPs), models,
solutions and products leveraging blockchain technology. We empower
investors and consumers to shape their future and support financial
professionals to better serve their clients and grow their
businesses. WisdomTree is leveraging the latest financial
infrastructure to create products that provide access, transparency
and an enhanced user experience. Building on our heritage of
innovation, we are also developing and have launched
next-generation digital products, services and structures,
including digital or blockchain-enabled mutual funds and tokenized
assets, as well as our blockchain-native digital wallet, WisdomTree
Prime™.*
* The WisdomTree Prime digital wallet and digital asset services
are made available through WisdomTree Digital Movement, Inc. (NMLS
ID: 2372500) in select U.S. jurisdictions and may be limited where
prohibited by law. Visit https://www.wisdomtreeprime.com or the
WisdomTree Prime mobile app for more information.
WisdomTree currently has approximately $106.0 billion in assets
under management globally.
For more information about WisdomTree and WisdomTree Prime™,
visit: https://www.wisdomtree.com.
Please visit us on X, formerly known as Twitter, at
@WisdomTreeNews.
WisdomTree® is the marketing name for WisdomTree, Inc. and its
subsidiaries worldwide.
PRODUCTS AND SERVICES AVAILABLE VIA WISDOMTREE PRIME:
NOT FDIC INSURED | NO BANK GUARANTEE | NOT A BANK DEPOSIT |
MAY LOSE VALUE | NOT SIPC PROTECTED | NOT INSURED BY ANY GOVERNMENT
AGENCY
The products and services available through the WisdomTree Prime
app are not endorsed, indemnified or guaranteed by any regulatory
agency.
_________________
(1)
See “Non-GAAP Financial Measurements.”
(2)
Earnings per share (“EPS”) is calculated
pursuant to the two-class method as it results in a lower EPS
amount as compared to the treasury stock method. In addition, the
three months ended December 31, 2023 includes a gain of $7,966
recognized upon the repurchase of our Series C non-voting preferred
shares convertible into 13.1 million shares of common stock from
GBH, which is excluded from net income, but required to be added to
net income to arrive at income available to common stockholders in
the calculation of EPS. This gain is excluded from our EPS when
computed on a non-GAAP basis.
WISDOMTREE, INC. AND
SUBSIDIARIES
KEY OPERATING
STATISTICS
(Unaudited)
Three Months Ended
Mar. 31,
2024
Dec. 31,
2023
Sept. 30,
2023
June 30,
2023
Mar. 31,
2023
GLOBAL ETPs ($ in
millions)
Beginning of period assets
$
100,124
$
93,735
$
93,666
$
90,740
$
81,993
Inflows/(outflows)
1,990
(255)
1,983
2,327
6,341
Market appreciation/(depreciation)
5,116
6,644
(1,914)
599
2,406
End of period assets
$
107,230
$
100,124
$
93,735
$
93,666
$
90,740
Average assets during the period
$
102,435
$
96,547
$
95,743
$
91,578
$
87,508
Average advisory fee during the period
0.36%
0.36%
0.36%
0.36%
0.36%
Revenue days
91
92
92
91
90
Number of ETFs—end of the period
338
337
344
344
341
U.S. LISTED ETFs
($ in millions)
Beginning of period assets
$
72,486
$
68,018
$
65,903
$
61,283
$
55,973
Inflows/(outflows)
1,983
(67)
3,601
3,249
4,012
Market appreciation/(depreciation)
3,618
4,535
(1,486)
1,371
1,298
End of period assets
$
78,087
$
72,486
$
68,018
$
65,903
$
61,283
Average assets during the period
$
74,805
$
69,707
$
68,008
$
62,712
$
59,430
Number of ETFs—end of the period
77
76
80
80
80
EUROPEAN LISTED
ETPs ($ in millions)
Beginning of period assets
$
27,638
$
25,717
$
27,763
$
29,457
$
26,020
Inflows/(outflows)
7
(188)
(1,618)
(922)
2,329
Market appreciation/(depreciation)
1,498
2,109
(428)
(772)
1,108
End of period assets
$
29,143
$
27,638
$
25,717
$
27,763
$
29,457
Average assets during the period
$
27,630
$
26,840
$
27,735
$
28,866
$
28,078
Number of ETPs—end of the period
261
261
264
264
261
PRODUCT
CATEGORIES ($ in millions)
U.S. Equity
Beginning of period assets
$
29,156
$
25,643
$
26,001
$
24,534
$
24,112
Inflows/(outflows)
536
487
864
414
(149)
Market appreciation/(depreciation)
1,978
3,026
(1,222)
1,053
571
End of period assets
$
31,670
$
29,156
$
25,643
$
26,001
$
24,534
Average assets during the period
$
30,130
$
26,835
$
26,501
$
24,732
$
24,725
Commodity & Currency
Beginning of period assets
$
21,336
$
20,466
$
22,384
$
24,924
$
22,097
(Outflows)/inflows
(460)
(449)
(1,814)
(1,513)
2,003
Market appreciation/(depreciation)
1,068
1,319
(104)
(1,027)
824
End of period assets
$
21,944
$
21,336
$
20,466
$
22,384
$
24,924
Average assets during the period
$
20,838
$
21,254
$
22,278
$
24,033
$
23,807
Fixed Income
Beginning of period assets
$
21,197
$
21,797
$
20,215
$
18,708
$
15,273
(Outflows)/inflows
(14)
(715)
1,670
1,471
3,513
Market appreciation/(depreciation)
35
115
(88)
36
(78)
End of period assets
$
21,218
$
21,197
$
21,797
$
20,215
$
18,708
Average assets during the period
$
21,082
$
21,889
$
20,965
$
19,185
$
17,176
Three Months Ended
Mar. 31,
2024
Dec. 31,
2023
Sept. 30,
2023
June 30,
2023
Mar. 31,
2023
International Developed Market
Equity
Beginning of period assets
$
15,103
$
13,902
$
13,423
$
11,433
$
10,195
Inflows
1,599
9
798
1,593
450
Market appreciation/(depreciation)
1,401
1,192
(319)
397
788
End of period assets
$
18,103
$
15,103
$
13,902
$
13,423
$
11,433
Average assets during the period
$
16,688
$
14,266
$
13,873
$
12,276
$
10,879
Emerging Market Equity
Beginning of period assets
$
10,726
$
9,569
$
9,191
$
8,811
$
8,116
Inflows
217
412
451
329
486
Market appreciation/(depreciation)
246
745
(73)
51
209
End of period assets
$
11,189
$
10,726
$
9,569
$
9,191
$
8,811
Average assets during the period
$
10,900
$
9,833
$
9,652
$
8,998
$
8,666
Leveraged & Inverse
Beginning of period assets
$
1,815
$
1,781
$
1,864
$
1,785
$
1,754
(Outflows)/inflows
(50)
(59)
(1)
12
43
Market appreciation/(depreciation)
63
93
(82)
67
(12)
End of period assets
$
1,828
$
1,815
$
1,781
$
1,864
$
1,785
Average assets during the period
$
1,792
$
1,803
$
1,894
$
1,798
$
1,757
Cryptocurrency
Beginning of period assets
$
414
$
243
$
248
$
239
$
136
Inflows/(outflows)
158
28
10
(1)
13
Market appreciation/(depreciation)
302
143
(15)
10
90
End of period assets
$
874
$
414
$
243
$
248
$
239
Average assets during the period
$
614
$
325
$
238
$
236
$
190
Alternatives
Beginning of period assets
$
377
$
334
$
340
$
306
$
310
Inflows/(outflows)
4
32
5
22
(18)
Market appreciation/(depreciation)
23
11
(11)
12
14
End of period assets
$
404
$
377
$
334
$
340
$
306
Average assets during the period
$
391
$
342
$
342
$
320
$
308
Headcount
300
303
299
291
279
Note: Previously issued statistics may be restated due to fund
closures and trade adjustments
Source: WisdomTree
WISDOMTREE, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in thousands, except per
share amounts)
March 31,
Dec 31,
2024
2023
(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and restricted
cash
$
116,926
$
129,305
Financial instruments owned, at fair
value
58,301
58,722
Accounts receivable
40,020
35,473
Prepaid expenses
6,491
5,258
Other current assets
1,284
1,036
Total current assets
223,022
229,794
Fixed assets, net
436
427
Securities held-to-maturity
224
230
Deferred tax assets, net
5,477
11,057
Investments
9,606
9,684
Right of use assets—operating leases
243
563
Goodwill
86,841
86,841
Intangible assets, net
605,347
605,082
Other noncurrent assets
456
459
Total assets
$
931,652
$
944,137
LIABILITIES AND STOCKHOLDERS’
EQUITY
LIABILITIES
Current liabilities:
Fund management and administration
payable
$
32,665
$
30,085
Compensation and benefits payable
9,624
38,111
Payable to Gold Bullion Holdings (Jersey)
Limited (“GBH”)
14,804
14,804
Income taxes payable
1,140
3,866
Operating lease liabilities
251
578
Accounts payable and other liabilities
17,105
15,772
Total current liabilities
75,589
103,216
Convertible notes—long term
275,263
274,888
Payable to GBH
24,994
24,328
Total liabilities
375,846
402,432
Preferred stock:
Series A Non-Voting Convertible, par value
$0.01; 14.750 shares authorized, issued and outstanding
132,569
132,569
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01; 400,000
shares authorized:
Issued and outstanding: 151,819 and
150,330 at March 31, 2024 and December 31, 2023, respectively
1,518
1,503
Additional paid-in capital
309,768
312,440
Accumulated other comprehensive loss
(907)
(548)
Retained earnings
112,858
95,741
Total stockholders’ equity
423,237
409,136
Total liabilities and stockholders’
equity
$
931,652
$
944,137
WISDOMTREE, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
(Unaudited)
Three Months Ended
March 31,
2024
2023
Cash flows from operating
activities:
Net income
$
22,111
$
16,233
Adjustments to reconcile net income to net
cash used in operating activities:
Advisory and license fees paid in gold,
other precious metals and cryptocurrency
(11,727)
(12,760)
Deferred income taxes
5,640
4,783
Stock-based compensation
5,163
4,536
Gains on financial instruments owned, at
fair value
(2,063)
(1,954)
Imputed interest on payable to GBH
666
—
Depreciation and amortization
383
109
Amortization of issuance costs—convertible
notes
375
579
Amortization of right of use asset
324
319
Gains on investments
(123)
3,919
Gain on revaluation/termination of
deferred consideration—gold payments
—
(20,592)
Loss on extinguishment of convertible
notes
—
9,721
Impairments
—
4,900
Contractual gold payments
—
4,486
Other
—
(452)
Changes in operating assets and
liabilities:
Accounts receivable
(4,243)
(4,791)
Prepaid expenses
(1,247)
(1,161)
Gold and other precious metals
11,561
8,332
Other assets
(79)
167
Fund management and administration
payable
2,659
3,638
Compensation and benefits payable
(28,386)
(27,271)
Income taxes payable
(2,723)
(3,418)
Operating lease liabilities
(332)
(326)
Accounts payable and other liabilities
1,003
5,606
Net cash used in operating activities
(1,038)
(5,397)
Cash flows from investing
activities:
Purchase of financial instruments owned,
at fair value
(2,500)
(20,278)
Cash paid—software development
(592)
—
Purchase of fixed assets
(66)
(26)
Proceeds from the sale of financial
instruments owned, at fair value
5,180
18,290
Proceeds from held-to-maturity securities
maturing or called prior to maturity
6
6
Net cash provided by/(used in) investing
activities
2,028
(2,008)
Cash flows from financing
activities:
Dividends paid
(4,997)
(4,821)
Shares repurchased
(7,820)
(3,384)
Repurchase of convertible notes
—
(124,317)
Issuance costs—convertible notes
—
(3,548)
Proceeds from the issuance of convertible
notes
—
130,000
Net cash used in financing activities
(12,817)
(6,070)
(Decrease)/increase in cash flow due to
changes in foreign exchange rate
(552)
473
Net decrease in cash, cash equivalents and
restricted cash
(12,379)
(13,002)
Cash, cash equivalents and restricted
cash—beginning of year
129,305
132,101
Cash, cash equivalents and restricted
cash—end of period
$
116,926
$
119,099
Supplemental disclosure of cash flow
information:
Cash paid for income taxes
$
2,769
$
1,422
Cash paid for interest
$
3,738
$
801
NON-GAAP FINANCIAL MEASUREMENTS
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
press release include:
Adjusted Operating Income, Operating Expenses, Income Before
Income Taxes, Income Tax Expense, Net Income and Diluted Earnings
per Share
We disclose adjusted 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:
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 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: Unrealized gains and losses recognized on
our investments, changes in deferred tax asset valuation allowance,
expenses incurred in response to an activist campaign, unrealized
gains or losses on the revaluation/termination of deferred
consideration – gold payments which we terminated in the second
quarter of 2023, loss on extinguishment of convertible notes,
impairments, remeasurement of contingent consideration payable to
us from the sale of our former Canadian ETF business and litigation
expenses associated with certain provisions of our Stockholder
Rights Agreement dated as of March 17, 2023, as amended, with
Continental Stock Transfer & Trust Company, as Rights Agent,
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 operating revenues less
fund management and administration expenses. Gross margin
percentage is calculated as gross margin divided by total operating
revenues.
GAAP to NON-GAAP
RECONCILIATION (CONSOLIDATED)
(in thousands)
(Unaudited)
Three Months Ended
Adjusted Net Income and Diluted
Earnings per Share:
Mar. 31,
2024
Dec. 31,
2023
Sept. 30,
2023
June 30,
2023
Mar. 31,
2023
Net income, as reported
$
22,111
$
19,077
$
12,984
$
54,252
$
16,233
(Deduct)/add back: (Gains)/losses on
financial instruments owned, net of income taxes
(1,562)
(370)
1,479
762
(1,479)
(Deduct)/add back: Tax
(windfalls)/shortfalls upon vesting of stock-based compensation
awards
(699)
(6)
(18)
33
(185)
(Deduct)/add back: (Decrease)/increase in
deferred tax asset valuation allowance on financial instruments
owned and investments
(531)
(280)
1,234
(508)
1,667
Add back: Expenses incurred in response to
an activist campaign, net of income taxes
526
—
—
3,720
732
Add back: Imputed interest on payable to
GBH, net of income taxes
504
224
—
—
—
(Deduct)/add back: (Gains)/losses
recognized on investments, net of income taxes
(93)
(336)
323
(2,346)
2,966
Add back: Litigation expenses associated
with certain provisions of the Stockholder Rights Agreement, net of
income taxes
—
—
—
367
—
Add back: Impairments, net of income
taxes
—
257
2,046
—
3,710
Deduct: Gain on revaluation/termination of
deferred consideration—gold payments
—
—
—
(41,361)
(20,592)
Add back: Loss on extinguishment of
convertible notes, net of income taxes
—
—
—
—
9,623
Deduct: Remeasurement of contingent
consideration—sale of former Canadian ETF business
—
—
—
—
(1,477)
Adjusted net income
$
20,256
$
18,566
$
18,048
$
14,919
$
11,198
Weighted average common shares—diluted
165,268
171,703
177,140
170,672
159,887
Adjusted earnings per share—diluted
$
0.12
$
0.11
$
0.10
$
0.09
$
0.07
Three Months Ended
Gross Margin and Gross Margin
Percentage:
Mar. 31,
2024
Dec. 31,
2023
Sept. 30,
2023
June 30,
2023
Mar. 31,
2023
Operating revenues
$
96,838
$
90,844
$
90,423
$
85,724
$
82,044
Less: Fund management and
administration
(19,962)
(18,445)
(18,023)
(17,727)
(17,153)
Gross margin
$
76,876
$
72,399
$
72,400
$
67,997
$
64,891
Gross margin percentage
79.4%
79.7%
80.1%
79.3%
79.1%
Three Months Ended
Adjusted Operating Income and Adjusted
Operating
Income Margin:
Mar. 31,
2024
Dec. 31,
2023
Sept. 30,
2023
June 30,
2023
Mar. 31,
2023
Operating revenues
$
96,838
$
90,844
$
90,423
$
85,724
$
82,044
Operating income
$
27,950
$
26,035
$
26,705
$
18,181
$
16,571
Add back: Expenses incurred in response to
an activist campaign
695
—
—
4,913
967
Adjusted operating income
$
28,645
$
26,035
$
26,705
$
23,094
$
17,538
Adjusted operating income margin
29.6%
28.7%
29.5%
26.9%
21.4%
Three Months Ended
Adjusted Total Operating
Expenses:
Mar. 31,
2024
Dec. 31,
2023
Sept. 30,
2023
June 30,
2023
Mar. 31,
2023
Total operating expenses
$
68,888
$
64,809
$
63,718
$
67,543
$
65,473
Deduct: Expenses incurred in response to
an activist campaign
(695)
—
—
(4,913)
(967)
Adjusted total operating expenses
$
68,193
$
64,809
$
63,718
$
62,630
$
64,506
Three Months Ended
Adjusted Income Before Income
Taxes:
Mar. 31,
2024
Dec. 31,
2023
Sept. 30,
2023
June 30,
2023
Mar. 31,
2023
Income before income taxes
$
27,812
$
24,765
$
18,820
$
57,807
$
17,616
(Deduct)/add back: (Gains)/losses on
financial instruments owned
(2,063)
(489)
1,953
1,007
(1,954)
Add back: Expenses incurred in response to
an activist campaign
695
—
—
4,913
967
Add back: Imputed interest on payable to
GBH
666
296
—
—
—
(Deduct)/add back: (Gains)/losses
recognized on investments
(123)
(1,003)
426
(3,099)
3,918
Add back: Litigation expenses associated
with certain provisions of the Stockholder Rights Agreement
—
—
—
485
—
Add back: Impairments
—
339
2,703
—
4,900
Deduct: Gain on revaluation/termination of
deferred consideration—gold payments
—
—
—
(41,361)
(20,592)
Add back: Loss on extinguishment of
convertible notes
—
—
—
—
9,721
Deduct: Remeasurement of contingent
consideration—sale of former Canadian ETF business
—
—
—
—
(1,477)
Add back: Loss recognized upon reduction
of a tax-related indemnification asset
—
—
—
—
1,386
Adjusted income before income taxes
$
26,987
$
23,908
$
23,902
$
19,752
$
14,485
Three Months Ended
Adjusted Income Tax Expense and
Adjusted Effective Income Tax Rate:
Mar. 31,
2024
Dec. 31,
2023
Sept. 30,
2023
June 30,
2023
Mar. 31,
2023
Adjusted income before income taxes
(above)
$
26,987
$
23,908
$
23,902
$
19,752
$
14,485
Income tax expense
$
5,701
$
5,688
$
5,836
$
3,555
$
1,383
Add back/(deduct): Tax
windfalls/(shortfalls) upon vesting of stock-based compensation
awards
699
6
18
(33)
185
Add back/(deduct): Decrease/(increase) in
deferred tax asset valuation allowance on financial instruments
owned and investments
531
280
(1,234)
508
(1,667)
(Deduct)/add back: Tax (expense)/benefit
arising from (gains)/losses on financial instruments owned
(501)
(119)
474
245
475)
Add back: Tax benefit arising from
expenses incurred in response to an activist campaign
169
—
—
1,193
235
Add back: Tax benefit on imputed
interest
162
72
—
—
—
(Deduct)/add back: Tax (expense)/benefit
on gains and losses on investments
(30)
(667)
103
(753)
952
Add back: Tax benefit arising from
litigation expenses associated with certain provisions of the
Stockholder Rights Agreement
—
—
—
118
—
Add back: Tax benefit arising from
impairments
—
82
657
—
1,190
Add back: Tax benefit arising from
extinguishment of convertible notes
—
—
—
—
98
Add back: Tax benefit arising from
reduction of a tax-related indemnification asset
—
—
—
—
1,386
Adjusted income tax expense
$
6,731
$
5,342
$
5,854
$
4,833
$
3,287
Adjusted effective income tax rate
24.9%
22.3%
24.5%
24.5%
22.7%
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
This press release 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 press release 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 press release
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 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,
2023.
The forward-looking statements in this press release represent
our views as of the date of this press release. 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 press
release.
Category: Business Update
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240426564191/en/
Investor Relations Jeremy Campbell +1.917.267.3859
jeremy.campbell@wisdomtree.com
Corporate Communications Jessica Zaloom +1.917.267.3735
jzaloom@wisdomtree.com
WisdomTree (NYSE:WT)
過去 株価チャート
から 5 2024 まで 6 2024
WisdomTree (NYSE:WT)
過去 株価チャート
から 6 2023 まで 6 2024