Diluted earnings per share of $0.10; Earnings per share of $0.07, as adjusted
Ten consecutive quarters of net inflows
Annualized inflow rate of 31% across all products
NEW YORK--(BUSINESS WIRE)--WisdomTree, Inc. (NYSE: WT), a global financial innovator, today reported financial results for the first quarter of 2023.
$16.2 million net income ($11.2(1) million net income, as adjusted); including a non-cash gain of $20.6 million associated with the revaluation of deferred consideration-gold payments; a loss of $9.7 million recognized upon the extinguishment of $115.0 million in aggregate principal amount of our 4.25% convertible senior notes issued in 2020 and due in June 2023 (the “2020 Notes”); and other items.
$90.7 billion of ending AUM, an increase of 10.7% arising from net inflows and market appreciation.
$6.3 billion of net inflows, primarily driven by inflows into our fixed income, commodity, emerging markets and international equity products.
0.36% average advisory fee, unchanged from last quarter.
$82.0 million of operating revenues, an increase of 11.9% from the previous quarter due to higher average AUM, and higher other income from large flows into some of our European products.
79.1% gross margin(1), a 2.2 point increase from the previous quarter due to higher revenues.
20.2% operating income margin (21.4%(1) as adjusted), a 4.2 point increase (5.4 point increase, as adjusted(1)) compared to our operating margin of 16.0% in the prior quarter due to higher revenues, partly offset by higher expenses.
$130.0 million issuance of convertible senior notes due 2028, bearing an interest at a rate of 5.75% and issued with a conversion price of $9.54 per share. Concurrent with the issuance, we repurchased $115.0 million in aggregate principal amount of our 2020 Notes.
$0.03 quarterly dividend declared, payable on May 24, 2023 to stockholders of record as of the close of business on May 10, 2023.
Update from Jonathan Steinberg, WisdomTree CEO
“WisdomTree’s momentum has accelerated in 2023 as the first quarter of the year was the third best quarter of net inflows in company history. I expect our solid fund performance and positioning, combined with continued growth in managed models, to drive further growth in the remainder of the year. Additionally, our blockchain–native digital wallet, WisdomTree Prime™, is on track for initial launch in app stores in Q2, alongside our suite of digital funds and tokens, cementing our leadership position in the blockchain-enabled finance marketplace, which according to a recent industry report from Citi, could be a $5 trillion market by 2030.”
|
Update from Jarrett Lilien, WisdomTree COO and President
“WisdomTree’s business has never been stronger; we’ve had ten consecutive quarters of net inflows coupled with all-time record high assets under management of over $90 billion. The breadth, depth and momentum of our inflows continues, with six of our eight major product categories and over half of our 350 global products generating positive flows in the first quarter. I am confident that our strong and steady organic growth will continue throughout 2023 and beyond on the back of strong fund performance, a broad and attractive product suite, and our ever-expanding models franchise.”
|
OPERATING AND FINANCIAL HIGHLIGHTS
| Three Months Ended | |||||||||||||||||||
|
Mar. 31,
|
Dec. 31,
|
Sept. 30,
|
June 30,
|
Mar. 31,
| |||||||||||||||
Consolidated Operating Highlights ($ in billions): |
|
|
|
|
| |||||||||||||||
AUM—end of period | $ | 90.7 |
| $ | 82.0 |
| $ | 70.9 |
| $ | 74.3 |
| $ | 79.4 |
| |||||
Net inflows | $ | 6.3 |
| $ | 5.3 |
| $ | 1.7 |
| $ | 3.9 |
| $ | 1.3 |
| |||||
Average AUM | $ | 87.5 |
| $ | 77.6 |
| $ | 74.7 |
| $ | 77.7 |
| $ | 77.8 |
| |||||
Average advisory fee |
| 0.36 | % |
| 0.36 | % |
| 0.38 | % |
| 0.39 | % |
| 0.40 | % | |||||
|
|
|
|
| ||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Consolidated Financial Highlights ($ in millions, except per share amounts): |
|
|
|
|
| |||||||||||||||
Operating revenues | $ | 82.0 |
| $ | 73.3 |
| $ | 72.4 |
| $ | 77.3 |
| $ | 78.4 |
| |||||
Net income/(loss) | $ | 16.2 |
| $ | (28.3 | ) | $ | 81.2 |
| $ | 8.0 |
| $ | (10.3 | ) | |||||
Diluted earnings/(loss) per share | $ | 0.10 |
| $ | (0.20 | ) | $ | 0.50 |
| $ | 0.05 |
| $ | (0.08 | ) | |||||
Operating income margin |
| 20.2 | % |
| 16.0 | % |
| 20.5 | % |
| 20.5 | % |
| 22.6 | % | |||||
As Adjusted (Non-GAAP(1)): |
|
|
|
|
| |||||||||||||||
Gross margin |
| 79.1 | % |
| 76.9 | % |
| 77.5 | % |
| 79.2 | % |
| 80.2 | % | |||||
Net income, as adjusted | $ | 11.2 |
| $ | 7.0 |
| $ | 9.3 |
| $ | 11.3 |
| $ | 14.1 |
| |||||
Diluted earnings per share, as adjusted | $ | 0.07 |
| $ | 0.04 |
| $ | 0.06 |
| $ | 0.07 |
| $ | 0.09 |
| |||||
Operating income margin, as adjusted |
| 21.4 | % |
| 16.0 | % |
| 20.5 | % |
| 23.1 | % |
| 25.7 | % | |||||
|
|
|
|
|
| |||||||||||||||
RECENT BUSINESS DEVELOPMENTS
Company News
Product News
|
WISDOMTREE, INC. AND SUBSIDIARIES | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
|
Mar. 31,
|
Dec. 31,
|
Sept. 30,
|
June 30,
|
Mar. 31,
| |||||||||||||||
Operating Revenues: |
|
|
|
|
| |||||||||||||||
Advisory fees | $ | 77,637 |
| $ | 70,913 |
| $ | 70,616 |
| $ | 75,586 |
| $ | 76,517 |
| |||||
Other income |
| 4,407 |
|
| 2,397 |
|
| 1,798 |
|
| 1,667 |
|
| 1,851 |
| |||||
Total revenues |
| 82,044 |
|
| 73,310 |
|
| 72,414 |
|
| 77,253 |
|
| 78,368 |
| |||||
Operating Expenses: |
|
|
|
|
| |||||||||||||||
Compensation and benefits |
| 27,398 |
|
| 24,831 |
|
| 23,714 |
|
| 24,565 |
|
| 24,787 |
| |||||
Fund management and administration |
| 17,153 |
|
| 16,906 |
|
| 16,285 |
|
| 16,076 |
|
| 15,494 |
| |||||
Marketing and advertising |
| 4,007 |
|
| 4,240 |
|
| 3,145 |
|
| 3,894 |
|
| 4,023 |
| |||||
Sales and business development |
| 2,994 |
|
| 3,407 |
|
| 2,724 |
|
| 3,131 |
|
| 2,609 |
| |||||
Contractual gold payments |
| 4,486 |
|
| 4,107 |
|
| 4,105 |
|
| 4,446 |
|
| 4,450 |
| |||||
Professional fees |
| 3,715 |
|
| 2,666 |
|
| 2,367 |
|
| 4,308 |
|
| 4,459 |
| |||||
Occupancy, communications and equipment |
| 1,101 |
|
| 1,110 |
|
| 986 |
|
| 1,049 |
|
| 753 |
| |||||
Depreciation and amortization |
| 109 |
|
| 104 |
|
| 58 |
|
| 53 |
|
| 47 |
| |||||
Third-party distribution fees |
| 2,253 |
|
| 1,793 |
|
| 1,833 |
|
| 1,818 |
|
| 2,212 |
| |||||
Other |
| 2,257 |
|
| 2,427 |
|
| 2,324 |
|
| 2,109 |
|
| 1,845 |
| |||||
Total operating expenses |
| 65,473 |
|
| 61,591 |
|
| 57,541 |
|
| 61,449 |
|
| 60,679 |
| |||||
Operating income |
| 16,571 |
|
| 11,719 |
|
| 14,873 |
|
| 15,804 |
|
| 17,689 |
| |||||
Other Income/(Expenses): |
|
|
|
|
| |||||||||||||||
Interest expense |
| (4,002 | ) |
| (3,736 | ) |
| (3,734 | ) |
| (3,733 | ) |
| (3,732 | ) | |||||
Gain/(loss) on revaluation of deferred consideration—gold payments |
| 20,592 |
|
| (35,423 | ) |
| 77,895 |
|
| 2,311 |
|
| (17,018 | ) | |||||
Interest income |
| 1,083 |
|
| 945 |
|
| 811 |
|
| 770 |
|
| 794 |
| |||||
Impairments |
| (4,900 | ) |
| — |
|
| — |
|
| — |
|
| — |
| |||||
Loss on extinguishment of convertible notes |
| (9,721 | ) |
| — |
|
| — |
|
| — |
|
| — |
| |||||
Other losses, net |
| (2,007 | ) |
| (1,815 | ) |
| (5,289 | ) |
| (4,474 | ) |
| (24,707 | ) | |||||
Income/(loss) before income taxes |
| 17,616 |
|
| (28,310 | ) |
| 84,556 |
|
| 10,678 |
|
| (26,974 | ) | |||||
Income tax expense/(benefit) |
| 1,383 |
|
| (21 | ) |
| 3,327 |
|
| 2,673 |
|
| (16,713 | ) | |||||
Net income/(loss) | $ | 16,233 |
| $ | (28,289 | ) | $ | 81,229 |
| $ | 8,005 |
| $ | (10,261 | ) | |||||
Earnings/(loss) per share—basic | $ | 0.10 | (2) | $ | (0.20 | ) | $ | 0.50 | (2) | $ | 0.05 | (2) | $ | (0.08) | (2) | |||||
Earnings/(loss) per share—diluted | $ | 0.10 |
| $ | (0.20 | ) | $ | 0.50 | (2) | $ | 0.05 |
| $ | (0.08) | (2) | |||||
Weighted average common shares—basic |
| 143,862 |
|
| 143,126 |
|
| 143,120 |
|
| 143,046 |
|
| 142,782 |
| |||||
Weighted average common shares—diluted |
| 159,887 |
|
| 143,126 |
|
| 158,953 |
|
| 158,976 |
|
| 142,782 |
| |||||
|
|
|
|
|
| |||||||||||||||
As Adjusted (Non-GAAP(1)) |
|
|
|
|
| |||||||||||||||
Total operating expenses | $ | 64,506 |
| $ | 61,591 |
| $ | 57,541 |
| $ | 59,425 |
| $ | 58,244 |
| |||||
Operating income | $ | 17,538 |
| $ | 11,719 |
| $ | 14,873 |
| $ | 17,828 |
| $ | 20,124 |
| |||||
Income before income taxes | $ | 14,485 |
| $ | 8,615 |
| $ | 12,645 |
| $ | 14,498 |
| $ | 17,674 |
| |||||
Income tax expense | $ | 3,287 |
| $ | 1,588 |
| $ | 3,323 |
| $ | 3,241 |
| $ | 3,611 |
| |||||
Net income | $ | 11,198 |
| $ | 7,027 |
| $ | 9,322 |
| $ | 11,257 |
| $ | 14,063 |
| |||||
Earnings per share—diluted | $ | 0.07 |
| $ | 0.04 |
| $ | 0.06 |
| $ | 0.07 |
| $ | 0.09 |
| |||||
Weighted average common shares – diluted |
| 159,887 |
|
| 159,478 |
|
| 158,953 |
|
| 158,976 |
|
| 158,335 |
| |||||
QUARTERLY HIGHLIGHTS
Operating Revenues
- Operating revenues increased 11.9% and 4.7% from the fourth quarter of 2022 and the first quarter of 2022, respectively, due to higher average AUM and higher other income from large flows into some of our European products.
- Our average advisory fee was 0.36%, 0.36% and 0.40% during the first quarter of 2023, the fourth quarter of 2022 and the first quarter of 2022, respectively.
Operating Expenses
- Operating expenses increased 6.3% from the fourth quarter of 2022 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 professional fees and third-party distribution fees.
- Operating expenses increased 7.9% from the first quarter of 2022 primarily due to higher compensation from increased headcount and stock-based compensation expense, fund management and administration costs and other expenses. These increases were partly offset by lower professional fees.
Other Income/(Expenses)
- Interest expense increased 7.1% and 7.2% from the fourth quarter of 2022 and the first quarter of 2022, respectively, due to a higher level of debt outstanding and a higher effective interest rate.
- We recognized a non-cash gain on revaluation of deferred consideration of $20.6 million during the first quarter of 2023. The gain arose primarily from an increase in the discount rate used to compute the present value of the annual payment obligations, partly offset by higher gold prices. The magnitude of any gain or loss recognized is highly correlated to changes in the discount rate and the magnitude of the change in the forward-looking price of gold.
- Interest income increased 14.6% and 36.4% from the fourth quarter of 2022 and the first quarter of 2022, respectively, due to rising interest rates.
- During the first quarter of 2023, we recognized a non-cash impairment charge of $4.9 million on our Series A convertible preferred stock investment in Securrency, Inc.
- During the first quarter of 2023, we recognized a loss on extinguishment of convertible notes of $9.7 million arising from the repurchase of $115.0 million in aggregate principal amount of our 2020 Notes.
- Other losses, net were $2.0 million for the first quarter of 2023. This quarter includes a non-cash charge of $1.4 million arising from a release of a tax-related indemnification asset upon the expiration of the statute of limitations (an equal and offsetting benefit has been recognized in income tax expense). This quarter also includes losses on our investments of $3.9 million. These items were partly offset by gains on our financial instruments owned of $2.0 million and a gain of $1.5 million related to the remeasurement of contingent consideration payable to us from the sale of our former Canadian ETF business. 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 2023 was 7.9%, resulting in income tax expense of $1.4 million. The effective tax rate differs from the federal statutory rate of 21% primarily due to a non-taxable gain on revaluation of deferred consideration and a reduction a in unrecognized tax benefits upon the expiration of the statute of limitations. These items were partly offset by a non-deductible loss on extinguishment of our 2020 Notes and an increase in the deferred tax asset valuation allowance on losses recognized on our investments.
- Our adjusted effective income tax rate was 22.7%(1).
CONFERENCE CALL DIAL-IN AND WEBCAST DETAILS
WisdomTree will discuss its results and operational highlights during a live webcast on Friday, April 28, 2023 at 11:00 a.m. ET, which can be accessed using the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=qp07AaN2.
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 and solutions. We empower investors 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 next-generation digital products and structures, including digital funds and tokenized assets, as well as our blockchain-native digital wallet, WisdomTree Prime™.
WisdomTree currently has approximately $90.5 billion in assets under management globally.
For more information about WisdomTree and WisdomTree Prime™, visit: https://www.wisdomtree.com.
Please visit us on Twitter at @WisdomTreeNews.
WisdomTree® is the marketing name for WisdomTree, Inc. and its subsidiaries worldwide.
| __________________________ | ||
(1) | See “Non-GAAP Financial Measurements.” | |
(2) | Earnings/(loss) per share (“EPS”) is calculated pursuant to the two-class method as it results in a lower EPS amount as compared to the treasury stock method. | |
WisdomTree, Inc. | ||||||||||||||||||||
Key Operating Statistics (Unaudited) |
|
| ||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| Mar. 31, 2023 | Dec. 31, 2022 | Sept. 30, 2022 | June 30, 2022 | Mar. 31, 2022 | |||||||||||||||
GLOBAL ETPs ($ in millions) |
|
|
|
|
| |||||||||||||||
|
|
|
| |||||||||||||||||
Beginning of period assets | $ | 81,993 |
| $ | 70,878 |
| $ | 74,302 |
| $ | 79,407 |
| $ | 77,479 |
| |||||
Inflows/(outflows) |
| 6,341 |
|
| 5,264 |
|
| 1,747 |
|
| 3,852 |
|
| 1,319 |
| |||||
Market appreciation/(depreciation) |
| 2,406 |
|
| 5,851 |
|
| (5,171 | ) |
| (8,953 | ) |
| 609 |
| |||||
Fund closures |
| — |
|
| — |
|
| — |
|
| (4 | ) |
| — |
| |||||
End of period assets | $ | 90,740 |
| $ | 81,993 |
| $ | 70,878 |
| $ | 74,302 |
| $ | 79,407 |
| |||||
Average assets during the period | $ | 87,508 |
| $ | 77,649 |
| $ | 74,677 |
| $ | 77,738 |
| $ | 77,809 |
| |||||
Average advisory fee during the period |
| 0.36 | % |
| 0.36 | % |
| 0.38 | % |
| 0.39 | % |
| 0.40 | % | |||||
Revenue days |
| 90 |
|
| 92 |
|
| 92 |
|
| 91 |
|
| 90 |
| |||||
Number of ETFs—end of the period |
| 350 |
|
| 348 |
|
| 347 |
|
| 344 |
|
| 341 |
| |||||
|
|
|
|
|
| |||||||||||||||
U.S. LISTED ETFs ($ in millions) |
|
|
|
|
| |||||||||||||||
|
|
|
|
| ||||||||||||||||
Beginning of period assets | $ | 55,973 |
| $ | 48,043 |
| $ | 47,255 |
| $ | 48,622 |
| $ | 48,210 |
| |||||
Inflows/(outflows) |
| 4,012 |
|
| 4,232 |
|
| 3,812 |
|
| 4,278 |
|
| 2,250 |
| |||||
Market appreciation/(depreciation) |
| 1,298 |
|
| 3,698 |
|
| (3,024 | ) |
| (5,645 | ) |
| (1,838 | ) | |||||
Fund closures |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||
End of period assets | $ | 61,283 |
| $ | 55,973 |
| $ | 48,043 |
| $ | 47,255 |
| $ | 48,622 |
| |||||
Average assets during the period | $ | 59,430 |
| $ | 53,655 |
| $ | 49,466 |
| $ | 48,270 |
| $ | 47,499 |
| |||||
Number of ETFs—end of the period |
| 80 |
|
| 79 |
|
| 78 |
|
| 77 |
|
| 77 |
| |||||
|
|
|
|
|
| |||||||||||||||
EUROPEAN LISTED ETPs ($ in millions) |
|
|
|
| ||||||||||||||||
|
|
|
| |||||||||||||||||
Beginning of period assets | $ | 26,020 |
| $ | 22,835 |
| $ | 27,047 |
| $ | 30,785 |
| $ | 29,269 |
| |||||
Inflows/(outflows) |
| 2,329 |
|
| 1,032 |
|
| (2,065 | ) |
| (426 | ) |
| (931 | ) | |||||
Market appreciation/(depreciation) |
| 1,108 |
|
| 2,153 |
|
| (2,147 | ) |
| (3,308 | ) |
| 2,447 |
| |||||
Fund closures |
| — |
|
| — |
|
| — |
|
| (4 | ) |
| — |
| |||||
End of period assets | $ | 29,457 |
| $ | 26,020 |
| $ | 22,835 |
| $ | 27,047 |
| $ | 30,785 |
| |||||
Average assets during the period | $ | 28,078 |
| $ | 23,994 |
| $ | 25,211 |
| $ | 29,468 |
| $ | 30,310 |
| |||||
Number of ETPs—end of the period |
| 270 |
|
| 269 |
|
| 269 |
|
| 267 |
|
| 264 |
| |||||
|
|
|
|
| ||||||||||||||||
PRODUCT CATEGORIES ($ in millions) |
|
|
|
|
| |||||||||||||||
|
|
|
|
|
| |||||||||||||||
Commodity & Currency |
|
|
|
|
| |||||||||||||||
Beginning of period assets | $ | 22,097 |
| $ | 19,561 |
| $ | 23,624 |
| $ | 26,302 |
| $ | 24,598 |
| |||||
Inflows/(outflows) |
| 2,003 |
|
| 796 |
|
| (2,179 | ) |
| (475 | ) |
| (1,053 | ) | |||||
Market appreciation/(depreciation) |
| 824 |
|
| 1,740 |
|
| (1,884 | ) |
| (2,203 | ) |
| 2,757 |
| |||||
End of period assets | $ | 24,924 |
| $ | 22,097 |
| $ | 19,561 |
| $ | 23,624 |
| $ | 26,302 |
| |||||
Average assets during the period | $ | 23,806 |
| $ | 20,345 |
| $ | 21,625 |
| $ | 25,767 |
| $ | 25,891 |
| |||||
|
|
|
|
| ||||||||||||||||
U.S. Equity |
|
|
|
|
| |||||||||||||||
Beginning of period assets | $ | 24,112 |
| $ | 20,952 |
| $ | 21,058 |
| $ | 23,738 |
| $ | 23,860 |
| |||||
(Outflows)/inflows |
| (149 | ) |
| 1,021 |
|
| 1,239 |
|
| 306 |
|
| 779 |
| |||||
Market appreciation/(depreciation) |
| 571 |
|
| 2,139 |
|
| (1,345 | ) |
| (2,986 | ) |
| (901 | ) | |||||
End of period assets | $ | 24,534 |
| $ | 24,112 |
| $ | 20,952 |
| $ | 21,058 |
| $ | 23,738 |
| |||||
Average assets during the period | $ | 24,726 |
| $ | 23,492 |
| $ | 22,534 |
| $ | 22,362 |
| $ | 23,134 |
| |||||
|
|
|
|
|
| |||||||||||||||
Fixed Income |
|
|
|
|
| |||||||||||||||
Beginning of period assets | $ | 15,273 |
| $ | 11,695 |
| $ | 9,192 |
| $ | 5,418 |
| $ | 4,356 |
| |||||
Inflows/(outflows) |
| 3,513 |
|
| 3,393 |
|
| 2,627 |
|
| 4,038 |
|
| 1,242 |
| |||||
Market (depreciation)/appreciation |
| (78 | ) |
| 185 |
|
| (124 | ) |
| (264 | ) |
| (180 | ) | |||||
End of period assets | $ | 18,708 |
| $ | 15,273 |
| $ | 11,695 |
| $ | 9,192 |
| $ | 5,418 |
| |||||
Average assets during the period | $ | 17,176 |
| $ | 13,962 |
| $ | 10,077 |
| $ | 7,426 |
| $ | 4,691 |
| |||||
| Three Months Ended | |||||||||||||||||||
| Mar. 31, 2023 | Dec. 31, 2022 | Sept. 30, 2022 | June 30, 2022 | Mar. 31, 2022 | |||||||||||||||
|
|
|
|
|
| |||||||||||||||
International Developed Market Equity |
|
|
|
|
| |||||||||||||||
Beginning of period assets | $ | 10,195 |
| $ | 9,183 |
| $ | 9,968 |
| $ | 11,422 |
| $ | 11,894 |
| |||||
Inflows/(outflows) |
| 450 |
|
| 40 |
|
| (115 | ) |
| 79 |
|
| 97 |
| |||||
Market appreciation/(depreciation) |
| 788 |
|
| 972 |
|
| (670 | ) |
| (1,533 | ) |
| (569 | ) | |||||
End of period assets | $ | 11,433 |
| $ | 10,195 |
| $ | 9,183 |
| $ | 9,968 |
| $ | 11,422 |
| |||||
Average assets during the period | $ | 10,879 |
| $ | 10,000 |
| $ | 10,032 |
| $ | 10,695 |
| $ | 11,543 |
| |||||
|
|
|
|
|
| |||||||||||||||
Emerging Market Equity |
|
|
|
|
| |||||||||||||||
Beginning of period assets | $ | 8,116 |
| $ | 7,495 |
| $ | 8,386 |
| $ | 9,991 |
| $ | 10,375 |
| |||||
Inflows/(outflows) |
| 486 |
|
| (53 | ) |
| 114 |
|
| (223 | ) |
| 189 |
| |||||
Market appreciation/(depreciation) |
| 209 |
|
| 674 |
|
| (1,005 | ) |
| (1,382 | ) |
| (573 | ) | |||||
End of period assets | $ | 8,811 |
| $ | 8,116 |
| $ | 7,495 |
| $ | 8,386 |
| $ | 9,991 |
| |||||
Average assets during the period | $ | 8,666 |
| $ | 7,770 |
| $ | 8,329 |
| $ | 9,155 |
| $ | 10,116 |
| |||||
|
|
|
|
|
| |||||||||||||||
Leveraged & Inverse |
|
|
|
|
| |||||||||||||||
Beginning of period assets | $ | 1,754 |
| $ | 1,523 |
| $ | 1,618 |
| $ | 1,856 |
| $ | 1,775 |
| |||||
Inflows/(outflows) |
| 43 |
|
| 59 |
|
| 45 |
|
| 90 |
|
| (2 | ) | |||||
Market (depreciation)/appreciation |
| (12 | ) |
| 172 |
|
| (140 | ) |
| (328 | ) |
| 83 |
| |||||
End of period assets | $ | 1,785 |
| $ | 1,754 |
| $ | 1,523 |
| $ | 1,618 |
| $ | 1,856 |
| |||||
Average assets during the period | $ | 1,757 |
| $ | 1,623 |
| $ | 1,589 |
| $ | 1,765 |
| $ | 1,830 |
| |||||
|
|
|
|
|
| |||||||||||||||
Alternatives |
|
|
|
|
| |||||||||||||||
Beginning of period assets | $ | 310 |
| $ | 306 |
| $ | 305 |
| $ | 293 |
| $ | 261 |
| |||||
(Outflows)/inflows |
| (18 | ) |
| 12 |
|
| 16 |
|
| 34 |
|
| 29 |
| |||||
Market appreciation/(depreciation) |
| 14 |
|
| (8 | ) |
| (15 | ) |
| (22 | ) |
| 3 |
| |||||
End of period assets | $ | 306 |
| $ | 310 |
| $ | 306 |
| $ | 305 |
| $ | 293 |
| |||||
Average assets during the period | $ | 308 |
| $ | 305 |
| $ | 313 |
| $ | 299 |
| $ | 275 |
| |||||
|
|
|
|
|
| |||||||||||||||
Cryptocurrency |
|
|
|
|
| |||||||||||||||
Beginning of period assets | $ | 136 |
| $ | 163 |
| $ | 151 |
| $ | 383 |
| $ | 357 |
| |||||
Inflows/(outflows) |
| 13 |
|
| (4 | ) |
| — |
|
| 3 |
|
| 37 |
| |||||
Market appreciation/(depreciation) |
| 90 |
|
| (23 | ) |
| 12 |
|
| (235 | ) |
| (11 | ) | |||||
End of period assets | $ | 239 |
| $ | 136 |
| $ | 163 |
| $ | 151 |
| $ | 383 |
| |||||
Average assets during the period | $ | 190 |
| $ | 152 |
| $ | 178 |
| $ | 265 |
| $ | 324 |
| |||||
|
|
|
|
|
| |||||||||||||||
Closed ETPs |
|
|
|
|
| |||||||||||||||
Beginning of period assets | $ | — |
| $ | — |
| $ | — |
| $ | 4 |
| $ | 3 |
| |||||
Inflows/(outflows) |
| — |
|
| — |
|
| — |
|
| — |
|
| 1 |
| |||||
Market appreciation |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||
Fund closures |
| — |
|
| — |
|
| — |
|
| (4 | ) |
| — |
| |||||
End of period assets | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 4 |
| |||||
Average assets during the period | $ | — |
| $ | — |
| $ | — |
| $ | 4 |
| $ | 5 |
| |||||
|
|
|
|
|
| |||||||||||||||
Headcount |
| 279 |
|
| 273 |
|
| 274 |
|
| 264 |
|
| 253 |
| |||||
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) | ||||||||
|
Mar. 31,
|
Dec. 31,
| ||||||
| (Unaudited) |
| ||||||
ASSETS |
|
| ||||||
Current assets: |
|
| ||||||
Cash and cash equivalents | $ | 119,099 |
| $ | 132,101 |
| ||
Financial instruments owned, at fair value |
| 130,180 |
|
| 126,239 |
| ||
Accounts receivable |
| 35,496 |
|
| 30,549 |
| ||
Prepaid expenses |
| 5,877 |
|
| 4,684 |
| ||
Income taxes receivable |
| 1,799 |
|
| — |
| ||
Other current assets |
| 291 |
|
| 390 |
| ||
Total current assets |
| 292,742 |
|
| 293,963 |
| ||
Fixed assets, net |
| 515 |
|
| 544 |
| ||
Indemnification receivable |
| — |
|
| 1,353 |
| ||
Securities held-to-maturity |
| 253 |
|
| 259 |
| ||
Deferred tax assets, net |
| 5,871 |
|
| 10,536 |
| ||
Investments |
| 26,902 |
|
| 35,721 |
| ||
Right of use assets—operating leases |
| 1,153 |
|
| 1,449 |
| ||
Goodwill |
| 85,856 |
|
| 85,856 |
| ||
Intangible assets, net |
| 603,968 |
|
| 603,567 |
| ||
Other noncurrent assets |
| 507 |
|
| 571 |
| ||
Total assets | $ | 1,017,767 |
| $ | 1,033,819 |
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
| ||||||
LIABILITIES |
|
| ||||||
Current liabilities: |
|
| ||||||
Convertible notes—current | $ | 59,884 |
| $ | 59,197 |
| ||
Fund management and administration payable |
| 27,830 |
|
| 36,521 |
| ||
Deferred consideration—gold payments |
| 17,984 |
|
| 16,796 |
| ||
Compensation and benefits payable |
| 9,341 |
|
| 24,121 |
| ||
Income taxes payable |
| — |
|
| 1,599 |
| ||
Operating lease liabilities |
| 1,041 |
|
| 1,125 |
| ||
Accounts payable and other liabilities |
| 14,846 |
|
| 9,075 |
| ||
Total current liabilities |
| 130,926 |
|
| 148,434 |
| ||
Convertible notes—long term |
| 273,767 |
|
| 262,019 |
| ||
Deferred consideration—gold payments |
| 161,847 |
|
| 183,494 |
| ||
Operating lease liabilities |
| 120 |
|
| 339 |
| ||
Other noncurrent liabilities |
| — |
|
| 1,353 |
| ||
Total liabilities |
| 566,660 |
|
| 595,639 |
| ||
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: 149,291 and 146,517 at March 31, 2023 and December 31, 2022, respectively |
| 1,493 |
|
| 1,465 |
| ||
Additional paid-in capital |
| 292,971 |
|
| 291,847 |
| ||
Accumulated other comprehensive loss |
| (954 | ) |
| (1,420 | ) | ||
Retained earnings |
| 25,028 |
|
| 13,719 |
| ||
Total stockholders’ equity |
| 318,538 |
|
| 305,611 |
| ||
Total liabilities and stockholders’ equity | $ | 1,017,767 |
| $ | 1,033,819 |
| ||
WISDOMTREE, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(in thousands) | ||||||||
(Unaudited) | ||||||||
|
| |||||||
|
Three Months Ended
| |||||||
| 2023 |
| 2022 | |||||
Cash flows from operating activities: |
|
| ||||||
Net income/(loss) | $ | 16,233 |
| $ | (10,261 | ) | ||
Adjustments to reconcile net income/(loss) to net cash used in operating activities: |
|
| ||||||
(Gain)/loss on revaluation of deferred consideration—gold payments |
| (20,592 | ) |
| 17,018 |
| ||
Advisory and license fees paid in gold, other precious metals and cryptocurrency |
| (12,760 | ) |
| (16,052 | ) | ||
Loss on extinguishment of convertible notes |
| 9,721 |
|
| — |
| ||
Impairments |
| 4,900 |
|
| — |
| ||
Deferred income taxes |
| 4,783 |
|
| 5,273 |
| ||
Stock-based compensation |
| 4,536 |
|
| 2,936 |
| ||
Contractual gold payments |
| 4,486 |
|
| 4,450 |
| ||
Losses on investments |
| 3,919 |
|
| 163 |
| ||
(Gains)/losses on financial instruments owned, at fair value |
| (1,954 | ) |
| 5,142 |
| ||
Amortization of issuance costs—convertible notes |
| 579 |
|
| 645 |
| ||
Amortization of right of use asset |
| 319 |
|
| 89 |
| ||
Depreciation and amortization |
| 109 |
|
| 47 |
| ||
Changes in operating assets and liabilities: |
|
| ||||||
Accounts receivable |
| (4,791 | ) |
| (3,710 | ) | ||
Prepaid expenses |
| (1,161 | ) |
| (2,264 | ) | ||
Gold and other precious metals |
| 8,332 |
|
| 11,959 |
| ||
Other assets |
| 167 |
|
| (52 | ) | ||
Intangibles—software development |
| (452 | ) |
| — |
| ||
Fund management and administration payable |
| 3,638 |
|
| 3,199 |
| ||
Compensation and benefits payable |
| (27,271 | ) |
| (23,690 | ) | ||
Income taxes payable |
| (3,418 | ) |
| (4,228 | ) | ||
Operating lease liabilities |
| (326 | ) |
| (97 | ) | ||
Accounts payable and other liabilities |
| 5,606 |
|
| 6,741 |
| ||
Net cash used in operating activities |
| (5,397 | ) |
| (2,692 | ) | ||
Cash flows from investing activities: |
|
| ||||||
Purchase of financial instruments owned, at fair value |
| (20,278 | ) |
| (25,461 | ) | ||
Purchase of investments |
| — |
|
| (6,863 | ) | ||
Purchase of fixed assets |
| (26 | ) |
| (54 | ) | ||
Proceeds from the sale of financial instruments owned, at fair value |
| 18,290 |
|
| 13,639 |
| ||
Proceeds from held-to-maturity securities maturing or called prior to maturity |
| 6 |
|
| 18 |
| ||
Net cash used in investing activities |
| (2,008 | ) |
| (18,721 | ) | ||
Cash flows from financing activities: |
|
| ||||||
Repurchase of convertible notes |
| (124,317 | ) |
| — |
| ||
Dividends paid |
| (4,821 | ) |
| (4,842 | ) | ||
Shares repurchased |
| (3,384 | ) |
| (3,394 | ) | ||
Convertible notes issuance costs |
| (3,548 | ) |
| — |
| ||
Proceeds from the issuance of convertible notes |
| 130,000 |
|
| — |
| ||
Net cash used in financing activities |
| (6,070 | ) |
| (8,236 | ) | ||
Increase/(decrease) in cash flow due to changes in foreign exchange rate |
| 473 |
|
| (665 | ) | ||
Net decrease in cash and cash equivalents |
| (13,002 | ) |
| (30,314 | ) | ||
Cash and cash equivalents—beginning of year |
| 132,101 |
|
| 140,709 |
| ||
Cash and cash equivalents—end of period | $ | 119,099 |
| $ | 110,395 |
| ||
|
|
| ||||||
Supplemental disclosure of cash flow information: |
| |||||||
Cash paid for income taxes | $ | 1,422 |
| $ | 2,123 |
| ||
Cash paid for interest | $ | 801 |
| $ | — |
| ||
Contacts
Investor Relations
Jeremy Campbell
+1.646.522.2602
Jeremy.campbell@wisdomtree.com
Media Relations
Jessica Zaloom
+1.917.267.3735
jzaloom@wisdomtree.com
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