WisdomTree(WT) - 2025 Q1 - Quarterly Results

Assets Under Management (AUM) - WisdomTree reported a record AUM of $115.8 billion, an increase of 5.5% from the prior quarter due to net inflows and market appreciation[3] - WisdomTree's assets under management (AUM) reached approximately$ 116.2 billion globally[21] - The end of period assets for U.S. listed ETFs was $80.531 billion, an increase from$ 79.095 billion in Q4 2024[27] - The end of period assets for European listed ETPs rose to $35.124 billion, up from$ 30.684 billion in Q4 2024[27] - Digital assets reached $132 million at the end of the period, following inflows of$ 101 million[27] Financial Performance - Operating revenues for Q1 2025 were $108.1 million, a decrease of 2.4% from the prior quarter due to two fewer trading days and a lower average advisory fee[5] - Operating revenues decreased by 2.4% from Q4 2024, but increased by 11.6% from Q1 2024, driven by higher average AUM and other revenues from European ETPs[20] - Net income for the three months ended March 31, 2025, was$ 24,629,000, compared to $22,111,000 for the same period in 2024, representing an increase of 11.4%[34] - Adjusted net income for Q1 2025 was$ 23.0 million, with diluted earnings per share at $0.16, compared to$ 25.3 million and $0.17 in Q4 2024[45] - Total operating revenues for Q1 2025 were$ 108.1 million, slightly down from $110.7 million in Q4 2024[45] Expenses and Margins - The average advisory fee was 0.35%, a 1 basis point decrease from the prior quarter[4] - WisdomTree's gross margin improved to 80.8%, a 1.5 point increase from the prior quarter[6] - Total operating expenses for Q1 2025 were$ 73.9 million, down from $75.7 million in Q4 2024[46] - Operating expenses decreased by 2.3% from Q4 2024, primarily due to lower fund management and administration expenses[20] - The adjusted effective income tax rate for Q1 2025 was 25.6%, compared to 23.5% in Q4 2024[46] Product Development and Innovation - WisdomTree launched several new products, including the WisdomTree Europe Defence UCITS ETF, which quickly surpassed$ 1.4 billion in assets[8] - The company reported an 11% annualized organic growth rate across all products[8] - The company launched 17 digital asset products prior to January 1, 2025, indicating ongoing innovation in their product offerings[28] - WisdomTree's tokenized products attracted over $100 million in inflows year-to-date, showcasing its leadership in digital asset innovation[9] - The WisdomTree Emerging Market SmallCap Dividend UCITS ETF won the ETF Equity Emerging Markets category at the Mountain View Fund Awards 2025[13] Cash Flow and Liabilities - The company reported a net cash provided by operating activities of$ 6,370,000 for the three months ended March 31, 2025, compared to a net cash used of $1,038,000 in the same period of 2024[34] - Cash, cash equivalents, and restricted cash decreased to$ 170,373,000 from $181,191,000, reflecting a decrease of 6.5%[34] - Total current liabilities decreased to$ 81,864,000 from $109,197,000, a reduction of 25.0%[32] Risks and Challenges - A significant portion of revenues is derived from a limited number of products, exposing the company to investor sentiment and market risks[48] - The company faces increased operational and regulatory risks as it expands internationally and develops new product offerings[48] - Fluctuations in assets under management (AUM) due to market disruptions could negatively impact revenues and operating margins[48] - The company relies on third-party vendors for critical services, and any failure could materially affect operations[48] - The company is subject to currency exchange rate risks due to significant AUM exposure in developed markets[48] Shareholder Actions - The company repurchased Series C Non-Voting Convertible Preferred Stock for approximately$ 84.4 million, convertible into about 13.1 million shares of common stock[40] - The company acknowledges the potential impact of activist stockholders on its strategic direction[48]