WisdomTree Announces First Quarter 2023 Results – Record Quarter-End AUM of $90.7 Billion; $6.3 Billion Net Inflows (3rd Best Quarter in Company History)

WisdomTree Announces First Quarter 2023 Results – Record Quarter-End AUM of $90.7 Billion; $6.3 Billion Net Inflows (3rd Best Quarter in Company History)

Time Stamp: April 28, 2023 7:01 AM
Source Node: 2613870

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,

2023

Dec. 31,

2022

Sept. 30,

2022

June 30,

2022

Mar. 31,

2022

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

  • In February 2023, we completed a private offering of $130.0 million in aggregate principal amount of 5.75% convertible senior notes due 2028 and concurrently repurchased $115 million principal amount of our 2020 Notes due in June 2023.
  • In March 2023, our Board of Directors adopted a limited duration stockholder rights plan.
  • In April 2023, we acquired Securrency Transfers, Inc., the transfer agent for our soon-to-launch digital funds via WisdomTree Prime™. This acquired entity is now called WisdomTree Transfers, Inc.

Product News

  • In February 2023, WisdomTree and Voya Asset Management Co. LLC launched the WisdomTree Voya Yield Enhanced USD Universal Bond Fund (UNIY) on the NASDAQ; and we cross-listed 12 equity and commodity ETPs on the London Stock Exchange.
  • In March 2023, we won ‘Best Leveraged & Inverse ETF Issuer ($100M+)’ and ‘Best Crypto Issuer Linked ETF Issuer ($100M+)’ at the 2023 ETF Express Europe Awards; we launched currency-hedged share classes for the WisdomTree Quality Dividend Growth Fund on the London Stock Exchange, Borsa Italiana and Börse Xetra; and we implemented enhanced ESG screens on 22 equity and fixed income UCITS ETFs during their March rebalances.
  • In April 2023, we launched the WisdomTree California Carbon ETP (WCCA) on the London Stock Exchange, Borsa Italiana and Börse Xetra.

WISDOMTREE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)
 

 

Three Months Ended

 

Mar. 31,

2023

Dec. 31,

2022

Sept. 30,

2022

June 30,

2022

Mar. 31,

2022

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,

2023

Dec. 31,

2022

 

(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

March 31,

 

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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