WisdomTree, Inc. (NYSE: WT), a global financial innovator,today reported financial results for the second quarter of 2023.
$54.3 million net income ($14.9(1) million net income, as adjusted);including a non-cash gain of $41.4 million associated with the revaluation and termination of our deferred considerationāgold payments obligation.
$93.7 billion of ending AUM, an increase of 3.3% from the previous quarter arising from net inflows and market appreciation.
$2.3 billion of net inflows, primarily driven by inflows into our international equity and fixed income products, partly offset by outflows from our commodity products.
0.36% average advisory fee, unchanged from last quarter.
$85.7 million of operating revenues, an increase of 4.5% from the previous quarter primarily due to higher average AUM.
79.3% gross margin(1), a 0.2 point increase from the previous quarter due to higher revenues.
21.2% operating income margin (26.9%(1) as adjusted), a 1 point increase (5.5 point increase, as adjusted(1)) compared to our operating margin of 20.2% in the prior quarter due to higher revenues and lower contractual gold payments (upon the termination of our deferred considerationāgold payments obligation on May 10, 2023), partly offset by higher expenses incurred in response to an activist campaign.
$60.0 million of cash paid and 1,037,288 shares of common stock issued in connection with the maturity of $60.0 million aggregate principal amount of 4.25% Convertible Senior Notes.
$50.0 million cash consideration paid and 13,087 shares of Series C Non-Voting Convertible Preferred Stock, convertible into 13,087,000 shares of common stock, issued to terminate our deferred considerationāgold payments obligation.
$0.03 quarterly dividend declared, payable on August 23, 2023 to stockholders of record as of the close of business on August 9, 2023.
Update from Jonathan Steinberg, WisdomTree CEO
āWisdomTreeās momentum continued in the second quarter with a 21% year-to-date pace of annualized organic flow growth, best-in-class among our asset manager peers, propelling our global AUM to record high levels. Additionally, we launched WisdomTree Primeā¢ in 21 states at the end of June, with near full coverage in the U.S. expected by year end. The personal finance app empowers users to save, spend and invest, bringing tokenization and blockchain-enabled finance to the center of the consumerās financial life. Whether itās growing the platform organically, leveraging B2B or B2B2C opportunities, or utilizing our early-mover status in tokenization to pursue third party distribution, we have significant opportunity and have opened many paths to success. Iāve never been more excited about the road ahead than I am today and expect our momentum will continue through 2023 and beyond.ā |
Update from Jarrett Lilien, WisdomTree COO and President
āWisdomTree has had one of its strongest first halves of a year in company history, with best-in-class flow growth driven by deep and wide flow momentum, having gathered net inflows in all 8 major product categories across our broad product suite. Our differentiated models business is also gaining traction, deepening penetration with current partners like Merrill Lynch and Morgan Stanley, winning new mandates with key partners like LPL and Corbu, and continuing to expand our models business with small independent RIAs and broker-dealers, where our pipeline is strong. And, after expanding operating margins by over 500bps through the termination of our contractual gold payments obligation earlier this quarter, we expect further margin expansion in the years ahead as our business is scalable with high incremental margins.ā |
OPERATING AND FINANCIAL HIGHLIGHTS
Three Months Ended | |||||||||||||||
June 30,
| Mar. 31,
| Dec. 31,
| Sept. 30,
| June 30,
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Consolidated Operating Highlights ($ in billions): | |||||||||||||||
AUMāend of period | $ | 93.7 | $ | 90.7 | $ | 82.0 | $ | 70.9 | $ | 74.3 | |||||
Net inflows | $ | 2.3 | $ | 6.3 | $ | 5.3 | $ | 1.7 | $ | 3.9 | |||||
Average AUM | $ | 91.6 | $ | 87.5 | $ | 77.6 | $ | 74.7 | $ | 77.7 | |||||
Average advisory fee | 0.36 | % | 0.36 | % | 0.36 | % | 0.38 | % | 0.39 | % | |||||
Consolidated Financial Highlights ($ in millions, except per share amounts): | |||||||||||||||
Operating revenues | $ | 85.7 | $ | 82.0 | $ | 73.3 | $ | 72.4 | $ | 77.3 | |||||
Net income/(loss) | $ | 54.3 | $ | 16.2 | $ | (28.3 | ) | $ | 81.2 | $ | 8.0 | ||||
Diluted earnings/(loss) per share | $ | 0.32 | $ | 0.10 | $ | (0.20 | ) | $ | 0.50 | $ | 0.05 | ||||
Operating income margin | 21.2 | % | 20.2 | % | 16.0 | % | 20.5 | % | 20.5 | % | |||||
As Adjusted (Non-GAAP(1)): | |||||||||||||||
Gross margin | 79.3 | % | 79.1 | % | 76.9 | % | 77.5 | % | 79.2 | % | |||||
Net income, as adjusted | $ | 14.9 | $ | 11.2 | $ | 7.0 | $ | 9.3 | $ | 11.3 | |||||
Diluted earnings per share, as adjusted | $ | 0.09 | $ | 0.07 | $ | 0.04 | $ | 0.06 | $ | 0.07 | |||||
Operating income margin, as adjusted | 26.9 | % | 21.4 | % | 16.0 | % | 20.5 | % | 23.1 | % | |||||
RECENT BUSINESS DEVELOPMENTS
Company News
Product News
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WISDOMTREE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (Unaudited) | ||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30,
| Mar. 31,
| Dec. 31,
| Sept. 30,
| June 30, 2022 | June 30,
| June 30,
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Operating Revenues: | ||||||||||||||||||||||||
Advisory fees | $ | 82,004 | $ | 77,637 | $ | 70,913 | $ | 70,616 | $ | 75,586 | $ | 159,641 | $ | 152,103 | ||||||||||
Other income | 3,720 | 4,407 | 2,397 | 1,798 | 1,667 | 8,127 | 3,518 | |||||||||||||||||
Total revenues | 85,724 | 82,044 | 73,310 | 72,414 | 77,253 | 167,768 | 155,621 | |||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||
Compensation and benefits | 26,319 | 27,398 | 24,831 | 23,714 | 24,565 | 53,717 | 49,352 | |||||||||||||||||
Fund management and administration | 17,727 | 17,153 | 16,906 | 16,285 | 16,076 | 34,880 | 31,570 | |||||||||||||||||
Marketing and advertising. | 4,465 | 4,007 | 4,240 | 3,145 | 3,894 | 8,472 | 7,917 | |||||||||||||||||
Sales and business development | 3,326 | 2,994 | 3,407 | 2,724 | 3,131 | 6,320 | 5,740 | |||||||||||||||||
Contractual gold payments | 1,583 | 4,486 | 4,107 | 4,105 | 4,446 | 6,069 | 8,896 | |||||||||||||||||
Professional fees | 8,334 | 3,715 | 2,666 | 2,367 | 4,308 | 12,049 | 8,767 | |||||||||||||||||
Occupancy, communications and equipment | 1,172 | 1,101 | 1,110 | 986 | 1,049 | 2,273 | 1,802 | |||||||||||||||||
Depreciation and amortization | 121 | 109 | 104 | 58 | 53 | 230 | 100 | |||||||||||||||||
Third-party distribution fees | 1,881 | 2,253 | 1,793 | 1,833 | 1,818 | 4,134 | 4,030 | |||||||||||||||||
Other | 2,615 | 2,257 | 2,427 | < | ||||||||||||||||||||
