Financial Data and Key Metrics Changes - The company ended the quarter with $93.7 billion in Assets Under Management (AUM), a new record, up 3% from the prior quarter due to strong inflows and market appreciation [6] - Revenues were $85.7 million, an increase of 4.5% from the first quarter, driven by higher average AUM, partially offset by lower other income [8] - Adjusted net income was $14.9 million or $0.09 per share, excluding a non-cash after-tax gain of $41.4 million related to the termination of a contractual gold payment obligation [10] - The company reported a gross margin of about 79% year-to-date, updating its gross margin guidance to 79% from 78% [13][16] Business Line Data and Key Metrics Changes - The company generated $2.3 billion in net inflows during the second quarter, marking the 11th consecutive quarter of positive flows [19] - The managed model suite is now available to over 65,000 advisers, indicating strong traction in the market [20] - The extinguishment of the gold royalty obligation in May expanded annualized operating margins by over 500 basis points [21] Market Data and Key Metrics Changes - The company has seen inflows in all eight major product categories so far this year, indicating a healthy flow profile [20] - In Europe, the company has experienced robust leadership in commodities, with inflows to copper and oil offsetting outflows from legacy gold products [39] Company Strategy and Development Direction - The company is focused on expanding its WisdomTree Prime platform, which went live in late June, with plans to cover substantially all of the U.S. population by the end of the year [25] - The company aims to leverage its early mover advantage in asset tokenization and blockchain-enabled finance [29][31] - The management is optimistic about the long-term potential of the AI theme, with significant inflows observed in related products [44] Management's Comments on Operating Environment and Future Outlook - Management expressed strong confidence in the company's momentum, citing record AUM and best-in-class organic growth [23] - The company anticipates that the WisdomTree Prime platform will lead to faster organic growth and higher margins [58] - Management highlighted the importance of a better user experience in driving the success of the tokenization strategy [57] Other Important Information - The company settled its contractual gold payment obligation for about $137 million, which will reduce operating expenses by about $18 million per year [9] - The adjusted tax rate was updated to 24% due to the current distribution of profits among U.S. and European businesses [16] Q&A Session Summary Question: What are you most excited about related to WisdomTree Prime? - Management highlighted the importance of tokenization and the ambitious product roadmap for WisdomTree Prime, focusing on connecting spending and investing [34][36] Question: Are there unique trends in the European business compared to the U.S. market? - Management noted a robust leadership position in commodities in Europe, with significant inflows to copper and oil, while the U.S. market has a value bias [38][40] Question: What types of customers are using WisdomTree models? - The company serves various customer segments, including retail investors, advisers, and third-party platforms, with models contributing to 12% of flows [48][52] Question: What are the early metrics for the WisdomTree Prime platform? - Early metrics indicate positive conversion rates from downloads to funded users, although it is still early in the rollout [54][80] Question: What are the revenue opportunities from WisdomTree Prime? - The company expects to earn management fees, brokerage commissions, and trading spreads, but is not providing specific guidance on the revenue mix [68][70]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 001-10932 WisdomTree, Inc. (Exact name of registrant as specified in its charter) Delaware 13-3487784 (State or ...

PART I [ITEM 1. Business](index=5&type=section&id=ITEM%201.%20Business) WisdomTree is a global financial innovator managing approximately $82.0 billion in Assets Under Management (AUM) as of December 31, 2022, offering diverse ETPs and developing next-generation digital products and blockchain-enabled financial services - WisdomTree is a global financial innovator offering ETPs, models, and solutions, with approximately **$82.0 billion in AUM** as of December 31, 2022[19](index=19&type=chunk)[20](index=20&type=chunk) - The company is developing next-generation digital products and structures, including Digital Funds and tokenized assets, and its blockchain-native digital wallet, WisdomTree Prime™[19](index=19&type=chunk)[21](index=21&type=chunk) - WisdomTree has achieved key milestones in its digital assets strategy, including SEC declaration of effectiveness for the WisdomTree Short-Term Treasury Digital Fund and nine other Digital Funds, and FINRA approval for WisdomTree Securities, Inc. to facilitate Digital Fund transactions[21](index=21&type=chunk) [Our Company](index=5&type=section&id=Our%20Company) WisdomTree is a global financial innovator providing ETPs, models, and digital asset solutions, with significant AUM and ongoing development in blockchain-enabled financial services - WisdomTree is a global financial innovator offering ETPs, models, and solutions, with approximately **$82.0 billion in AUM** as of December 31, 2022[19](index=19&type=chunk)[20](index=20&type=chunk) - The company is developing next-generation digital products and structures, including Digital Funds and tokenized assets, and its blockchain-native digital wallet, WisdomTree Prime™[19](index=19&type=chunk)[21](index=21&type=chunk) - WisdomTree has achieved key milestones in its digital assets strategy, including SEC declaration of effectiveness for the WisdomTree Short-Term Treasury Digital Fund and nine other Digital Funds, and FINRA approval for WisdomTree Securities, Inc. to facilitate Digital Fund transactions[21](index=21&type=chunk) [Assets Under Management](index=6&type=section&id=Assets%20Under%20Management) AUM for U.S. listed ETFs increased to $56.0 billion in 2022 due to net inflows, while European listed ETPs decreased to $26.0 billion due to net outflows and market depreciation AUM Changes (December 31, 2021 to December 31, 2022) | Category | 2021 AUM (Billion USD) | 2022 AUM (Billion USD) | Change | | :------- | :--------------------- | :--------------------- | :----- | | U.S. Listed ETFs | $48.2 | $56.0 | +$7.8B | | European Listed ETPs | $29.3 | $26.0 | -$3.3B | - U.S. listed ETFs AUM increased due to net inflows, offset by market depreciation, while European listed ETPs AUM decreased due to net outflows and market depreciation[25](index=25&type=chunk)[27](index=27&type=chunk) [Our Operating and Financial Results](index=7&type=section&id=Our%20Operating%20and%20Financial%20Results) In 2022, WisdomTree's revenues remained stable at $301.3 million, while operating expenses increased by 12.1% to $241.3 million, leading to a slight increase in net income to $50.7 million Consolidated Operating Results (2020-2022) | Metric | 2022 (Million USD) | 2021 (Million USD) | 2020 (Million USD) | | :----- | :----------------- | :----------------- | :----------------- | | Revenues | $301.3 | $301.3 | $249.9 | | Total Operating Expenses | $241.3 | $215.3 | $194.8 | | Net Income/(Loss) | $50.7 | $49.8 | ($35.7) | - Total operating expenses increased **12.1% in 2022 to $241.3 million**, driven by higher incentive compensation, headcount, professional fees (including **$4.5 million** for an activist campaign and digital assets business), and fund management costs[37](index=37&type=chunk) - Net income increased slightly from **$49.8 million in 2021 to $50.7 million in 2022**, influenced by changes in revenues, expenses, a favorable revaluation of deferred consideration–gold payments (**$25.7 million gain**), and higher losses on financial instruments owned (**$12.8 million**)[37](index=37&type=chunk) [Our Industry – ETPs](index=8&type=section&id=Our%20Industry%20%E2%80%93%20ETPs) The global ETP industry reached $9.3 trillion in AUM by December 2022, with WisdomTree ranking as the thirteenth largest sponsor, benefiting from ETPs' transparency, efficiency, and diversification advantages - The global ETP industry reached **$9.3 trillion in AUM** as of December 31, 2022, with WisdomTree ranking as the **thirteenth largest ETP sponsor globally**[35](index=35&type=chunk)[38](index=38&type=chunk) Global ETP Sponsor Ranking by AUM (December 31, 2022) | Rank | ETP Sponsor | AUM (in billions USD) | | :--- | :---------- | :-------------------- | | 1 | iShares | $2,952 | | 2 | Vanguard | $2,037 | | 3 | State Street | $1,048 | | ... | ... | ... | | 13 | WisdomTree | $82 | | 14 | UBS | $75 | | 15 | Dimensional | $72 | - ETFs are favored by investors due to benefits like transparency, intraday trading, tax efficiency, uniform pricing, low-cost index investing, improved access to asset classes, asset allocation, protective hedging, income generation, speculative investing, and diversification[42](index=42&type=chunk)[43](index=43&type=chunk) [Our Industry – Digital Assets](index=10&type=section&id=Our%20Industry%20%E2%80%93%20Digital%20Assets) WisdomTree believes digital assets and blockchain technology will transform financial services by enhancing transparency and efficiency, while actively engaging with regulators to navigate industry scrutiny and cybersecurity risks - WisdomTree believes digital assets, tokenization, and blockchain technology will innovate financial services by offering transparency, economic benefits, streamlined processes, new products, programmable capabilities, and scalability[46](index=46&type=chunk)[47](index=47&type=chunk)[50](index=50&type=chunk) - The company is embracing 'responsible DeFi' to bridge traditional finance and blockchain-enabled finance, committed to proactive engagement and collaboration with regulators amidst increasing scrutiny and cybersecurity risks in the digital assets industry[47](index=47&type=chunk) [Our Competitive Strengths](index=11&type=section&id=Our%20Competitive%20Strengths) WisdomTree leverages its strong position in ETPs and digital assets, a seasoned management team, differentiated products, and efficient operations to drive growth and maintain competitive advantage - WisdomTree is well-positioned in growing ETP and digital asset markets, demonstrated by the development of WisdomTree Prime™, tokenization of real-world assets, SEC-effective Digital Funds, and FINRA approval for WT Securities[51](index=51&type=chunk) - The company boasts a strong, seasoned management team with significant ETP and financial services experience, focused on innovation and regulatory collaboration, and a differentiated product set including Modern Alpha strategies and first-to-market ETPs[51](index=51&type=chunk)[52](index=52&type=chunk)[54](index=54&type=chunk) - Competitive advantages include strong product performance (over **80% of U.S. listed AUM** in top two quartiles), self-indexing capabilities to minimize licensing fees and enhance speed to market, and an efficient business model with outsourced non-core services[53](index=53&type=chunk)[54](index=54&type=chunk)[57](index=57&type=chunk) [Our Growth Strategies](index=13&type=section&id=Our%20Growth%20Strategies) WisdomTree's growth strategies focus on launching innovative ETPs, establishing leadership in digital assets, deepening client relationships through Advisor Solutions, and expanding distribution platforms - WisdomTree's growth strategies include launching innovative ETPs (e.g., ESG offerings), establishing leadership in digital assets and blockchain-enabled financial services (WisdomTree Prime™ rollout in 2023, tokenization of gold/USD, SEC-effective Digital Funds, FINRA approval for WT Securities)[56](index=56&type=chunk)[58](index=58&type=chunk) - The company aims to foster deeper client relationships through its Advisor Solutions program, offering over **40 model portfolios**, customized portfolio services, and portfolio construction tools[58](index=58&type=chunk)[60](index=60&type=chunk) - Other strategies involve deepening relationships with distribution platforms for commission-free trading, leveraging data intelligence for sales and marketing effectiveness, and selectively pursuing acquisitions or strategic transactions[60](index=60&type=chunk)[61](index=61&type=chunk) [Human Capital Resources](index=15&type=section&id=Human%20Capital%20Resources) WisdomTree employs 273 full-time individuals globally, emphasizing diversity, equity, and inclusion, and maintaining a 'remote first' philosophy with flexible work arrangements and competitive benefits Employee Profile (December 31, 2022) | Metric | Value | | :----- | :---- | | Total Full-time Employees | 273 | | U.S. Employees | 173 | | Europe Employees | 100 | | Employee Retention Rate (2022) | 88% | | Global Employee Engagement Survey Participation Rate (2022) | 96% | - WisdomTree emphasizes diversity, equity, and inclusion (DEI) through initiatives like the Women's Initiative Network (WIN) and an employee-led DEI Council, aiming to foster an inclusive culture and provide growth opportunities[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - The company maintains a 'remote first' philosophy, offering flexible work arrangements, comprehensive wellness programs, and competitive compensation and benefits, including equity awards to align employee and stockholder interests[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk)[75](index=75&type=chunk) [Our Product Categories](index=16&type=section&id=Our%20Product%20Categories) WisdomTree offers a diverse range of ETPs, with U.S. Equity, Commodity & Currency, and Fixed Income representing the largest AUM categories, alongside European ETPs and digital asset exposures AUM by Product Category (December 31, 2022) | Product Category | AUM (Billion USD) | | :--------------- | :---------------- | | U.S. Equity | $24.1 | | Commodity & Currency | $22.1 | | Fixed Income | $15.3 | | International Developed Market Equity | $10.2 | | Emerging Market Equity | $8.1 | | Leveraged & Inverse | $1.8 | | Alternatives | $0.3 | | Cryptocurrency | $0.1 | - U.S. Equity products primarily use fundamentally weighted investment methodologies, focusing on dividends or earnings, aiming for better risk-adjusted returns[76](index=76&type=chunk)[78](index=78&type=chunk) - The company offers a diverse range of products, including European ETPs with exposure to gold, other precious metals, commodities, and cryptocurrencies, as well as Fixed Income products designed to enhance income potential[79](index=79&type=chunk)[80](index=80&type=chunk)[85](index=85&type=chunk) [Our Sales, Marketing and Research Efforts](index=17&type=section&id=Our%20Sales%2C%20Marketing%20and%20Research%20Efforts) WisdomTree distributes ETPs through major channels, targeting financial advisors without commissions, while marketing focuses on brand awareness and client acquisition, supported by a research team for product development and investment insights - WisdomTree distributes ETPs through major asset management channels, primarily targeting financial/investment advisors, and does not pay commissions or 12b-1 fees[86](index=86&type=chunk) - Marketing efforts focus on increasing global brand awareness, generating new clients, driving inflows, and retaining existing clients through targeted advertising, media relations, database messaging, and social media, with plans to promote WisdomTree Prime™[92](index=92&type=chunk)[95](index=95&type=chunk) - The research team and Chief Investment Office (CIO) are responsible for product development, investment research, model portfolio management, and sales support across various asset classes, utilizing academic-type research and market insights[94](index=94&type=chunk)[96](index=96&type=chunk) [Product Development](index=19&type=section&id=Product%20Development) WisdomTree's product development strategy centers on its Modern Alpha approach, leveraging proprietary index development to launch innovative ETPs and next-generation digital products - WisdomTree's product development strategy centers on its Modern Alpha approach, combining active and passive management benefits for cost-effective, performance-driven funds[97](index=97&type=chunk) - The company leverages proprietary index development capabilities to launch innovative and differentiated ETPs, aiming to be first-to-market or offer structural/strategic improvements, and is developing next-generation digital products and tokenized assets[98](index=98&type=chunk) [Competition](index=19&type=section&id=Competition) The asset management industry is highly competitive, with WisdomTree facing pressure from other ETP sponsors and mutual funds, exacerbated by lower barriers to entry and a trend towards low-fee products - The asset management industry is highly competitive, with WisdomTree facing competition from other ETP sponsors, mutual fund companies, and larger financial institutions, leading to pressures on pricing and market share[99](index=99&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - The adoption of Rule 6c-11 (ETF Rule) has lowered barriers to entry, increasing competition, and the trend of offering low/no-fee products persists, attracting significant net flows to lower-cost funds[101](index=101&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk) - WisdomTree aims to differentiate through its self-indexing model, active ETFs designed to generate alpha, and expansion into blockchain-enabled financial services, including asset tokenization and digital funds, embracing 'responsible DeFi' principles[102](index=102&type=chunk)[104](index=104&type=chunk) [Regulatory Framework of the ETP Industry and Digital Assets Business](index=20&type=section&id=Regulatory%20Framework%20of%20the%20ETP%20Industry%20and%20Digital%20Assets%20Business) The ETP industry is extensively regulated under the Investment Company Act of 1940, while WisdomTree's digital assets business actively seeks various U.S. and international regulatory approvals amidst complex and evolving global policy frameworks - The ETP industry is subject to extensive regulation, with ETFs regulated by the Investment Company Act of 1940 in the U.S., requiring compliance with operational, fee, sales, disclosure, and governance rules[106](index=106&type=chunk)[110](index=110&type=chunk) - WisdomTree's digital assets business is actively seeking regulatory, registration, and licensing approvals from various U.S. federal and state regulators (SEC, FINRA, FinCEN, NYDFS) and similar foreign markets, navigating complex and evolving global policy frameworks[107](index=107&type=chunk)[202](index=202&type=chunk) - International operations are subject to non-U.S. jurisdictions and regulatory bodies, including Jersey-domiciled issuers (ManJer Issuers) and Irish-domiciled UCITS ETFs (WTICAV), which must comply with EU regulations like Prospectus Regulation, EMIR, BMR, PRIIPs, and SFDR[113](index=113&type=chunk)[114](index=114&type=chunk)[118](index=118&type=chunk)[121](index=121&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[130](index=130&type=chunk) [Intellectual Property](index=26&type=section&id=Intellectual%20Property) WisdomTree protects its brand and proprietary investment methodologies through trademarks like 'WisdomTree' and 'Modern Alpha', and a U.S. patent for its financial instrument selection system - WisdomTree regards its name, logo, and 'Modern Alpha' as material trademarks, registered in the U.S. and other countries, and has applied for trademark registration of 'WisdomTree Prime™'[11](index=11&type=chunk)[129](index=129&type=chunk) - Many of its index-based equity ETFs use proprietary indexes, minimizing third-party licensing fees, and the company holds a U.S. patent on its 'Financial Instrument Selection and Weighting System and Method'[129](index=129&type=chunk)[131](index=131&type=chunk) [Available Information](index=27&type=section&id=Available%20Information) WisdomTree provides public access to its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K via its investor relations website and the SEC's website - WisdomTree makes its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K available free of charge on its investor relations website (ir.wisdomtree.com) and the SEC's website (www.sec.gov)[132](index=132&type=chunk) [ITEM 1A. Risk Factors](index=27&type=section&id=ITEM%201A.%20Risk%20Factors) WisdomTree faces a high degree of risk across various aspects of its business, including market volatility impacting AUM and revenues, concentration in specific products, reliance on third-party service providers, intense competition, and operational challenges from international expansion and digital asset initiatives - Substantially all revenues are derived from advisory fees on AUM, making the business highly sensitive to declining security/commodity prices, interest rate changes, and general market conditions[135](index=135&type=chunk)[136](index=136&type=chunk) - A significant portion of AUM (**55% in top ten ETPs, 16% in gold, 11% in other commodities**) creates concentration risk, making operating results vulnerable to performance and investor sentiment in these specific products[140](index=140&type=chunk)[141](index=141&type=chunk) - The digital assets business faces high regulatory uncertainty, increasing competition, reliance on third-party service providers, cybersecurity threats, and inherent risks of blockchain technology (e.g., forks, consensus changes), AML, and data privacy[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk)[208](index=208&type=chunk) [Market Risks](index=27&type=section&id=Market%20Risks) WisdomTree's business is vulnerable to market fluctuations in securities, commodities, and interest rates, which can reduce AUM, impact revenues, and undermine investor confidence in ETPs - Declining prices of securities, gold, other precious metals, and commodities, along with changes in interest rates and general market conditions, can adversely affect WisdomTree's business by reducing AUM and causing investor redemptions[135](index=135&type=chunk) - Fluctuations in the amount and mix of AUM, driven by market conditions, can negatively impact revenues and operating margins, as advisory fees are based on a percentage of AUM[136](index=136&type=chunk) - Abnormally wide bid/ask spreads and market disruptions could undermine investor confidence in the ETP structure, limiting acceptance and potentially reducing revenues[137](index=137&type=chunk)[139](index=139&type=chunk) [Concentration Risks](index=28&type=section&id=Concentration%20Risks) WisdomTree faces significant concentration risk with 55% of its AUM in ten ETPs and substantial exposure to gold, other commodities, and specific equity markets, making it vulnerable to sector-specific downturns and investor sentiment - **55% of WisdomTree's AUM** is concentrated in ten ETPs, making operating results highly exposed to the performance of these funds and investor sentiment towards their strategies[140](index=140&type=chunk) - Approximately **16% of AUM is in gold-backed ETPs** and **11% in other commodities**, exposing the business to declining commodity prices, especially gold, and changes in demand cycles[141](index=141&type=chunk) - A significant portion of AUM is exposed to U.S. (**29%**) and international developed markets (**12%**), subjecting the company to domestic and foreign market conditions and currency exchange rate risks[143](index=143&type=chunk)[144](index=144&type=chunk) [Third-Party Provider Risks](index=29&type=section&id=Third-Party%20Provider%20Risks) WisdomTree's operations heavily rely on third-party vendors for critical services like portfolio management, administration, and custody of assets, exposing the company to significant business and financial risks if these providers fail - WisdomTree heavily relies on third-party vendors for critical services like portfolio management (Mellon, Newton, Voya), administration (State Street), and custody of physical precious metals (HSBC, JP Morgan) and digital currencies (Swissquote, Coinbase)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - Failure of these key vendors to adequately provide services or safeguard assets could materially affect the business and harm investors, potentially leading to financial loss[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - European business products are subject to counterparty risks, including creditworthiness of swap providers and custodians, which could negatively impact AUM and product pricing[155](index=155&type=chunk)[159](index=159&type=chunk) [Competition and Distribution Risks](index=31&type=section&id=Competition%20and%20Distribution%20Risks) The asset management industry's intense competition, exacerbated by lower barriers to entry and low-fee products, creates pressure on WisdomTree's pricing, market share, and distribution capabilities - The asset management industry is intensely competitive, leading to pressures on pricing and market share, with competitors offering similar products at lower fees, especially in commoditized categories[161](index=161&type=chunk)[164](index=164&type=chunk) - The ETF Rule (Rule 6c-11) has reduced barriers to entry, increasing competition, and the emergence of non-transparent active ETFs may allow traditional mutual fund sponsors to compete more effectively[162](index=162&type=chunk)[163](index=163&type=chunk) - Reliance on third-party distribution channels means increased competition or failure to maintain relationships could impair distribution capabilities and increase costs, negatively impacting AUM[167](index=167&type=chunk) [Performance and Investment Risks](index=32&type=section&id=Performance%20and%20Investment%20Risks) Poor investment performance of ETPs with limited track records could reduce AUM and revenues, and the company risks losing its entire investments in strategic companies like Securrency and Fnality if their business plans fail - Many ETPs have limited track records, and poor investment performance (absolute or relative to benchmarks) could decrease sales or stimulate redemptions, reducing AUM and revenues[169](index=169&type=chunk) - WisdomTree could lose its entire investments in companies like Securrency and Fnality (valued at **$35.7 million** in aggregate at December 31, 2022) if they fail to raise capital or execute business plans, materially impacting financial condition[170](index=170&type=chunk) [Operational Risks](index=32&type=section&id=Operational%20Risks) WisdomTree's international operations and pursuit of acquisitions expose it to increased operational, regulatory, and financial risks, while failures in managing complex products like crypto basket ETPs could lead to financial losses - International business operations expose WisdomTree to increased operational, regulatory, financial, and foreign exchange rate risks, with potential for failures in compliance or infrastructure[171](index=171&type=chunk) - Pursuing acquisitions or strategic transactions places increased demands on management and resources, with potential for dilution, substantial borrowings, and significant changes to the business[172](index=172&type=chunk)[175](index=175&type=chunk) - Operational failures in managing crypto basket ETPs in Europe, where WisdomTree acts as determination agent for rebalancing, could lead to financial loss for the company and investors[177](index=177&type=chunk) [Technology Risks](index=34&type=section&id=Technology%20Risks) Significant limitations or failures in technology systems, including cybersecurity breaches, could disrupt operations, cause financial loss, and harm reputation, especially with the rapid development of new mobile applications - Significant limitations or failures in technology systems, or security breaches of information and cybersecurity infrastructure, could interrupt or damage operations, leading to financial loss, regulatory violations, reputational harm, or legal liability[182](index=182&type=chunk) - These risks are exacerbated by the rapid pace of technological change and the development and launch of new mobile applications like WisdomTree Prime™[182](index=182&type=chunk) [Human Capital Risks](index=34&type=section&id=Human%20Capital%20Risks) WisdomTree's operational effectiveness is vulnerable to its ability to retain and recruit key personnel amidst intense industry competition, and stock price volatility could impact compensation methods, potentially reducing net income - The ability to operate effectively is impaired if WisdomTree fails to retain or recruit key personnel, especially in operations, product development, research, sales, and marketing, due to intense competition in the asset management and digital assets industries[183](index=183&type=chunk) - Compensation methods, including equity grants, may be impacted by stock price volatility, potentially requiring increased compensation levels that could decrease net income[183](index=183&type=chunk) [Expense and Cash Management Risks](index=34&type=section&id=Expense%20and%20Cash%20Management%20Risks) WisdomTree's operating results are subject to fluctuations in discretionary expenses, including headcount, incentive compensation, marketing, and digital assets development, which can materially affect profitability - Operating results are subject to fluctuations in expenses, including discretionary spending on headcount, incentive compensation, marketing, and digital assets business development, which can materially affect profitability[184](index=184&type=chunk) [Legal and Regulatory Risks](index=34&type=section&id=Legal%20and%20Regulatory%20Risks) WisdomTree faces substantial financial and strategic costs from complying with extensive and evolving regulations, with non-compliance risking fines and reputational harm, while ongoing legal proceedings could result in unfavorable outcomes - Compliance with extensive, complex, and changing regulations (SEC, Investment Advisers Act, Investment Company Act, FINRA, CFTC, NFA, foreign authorities) imposes significant financial and strategic costs, with non-compliance potentially leading to fines, sanctions, and reputational harm[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk)[190](index=190&type=chunk) - The regulatory environment is subject to modifications, new rules (e.g., on data reporting, fund liquidity, derivatives), and revised interpretations, which could increase compliance costs or reduce advisory fees[188](index=188&type=chunk)[189](index=189&type=chunk) - Involvement in legal proceedings, such as claims related to the WisdomTree WTI Crude Oil 3x Daily Leveraged ETP (**€15.8 million** sought), could require significant management time, expense, and result in unfavorable outcomes[191](index=191&type=chunk) [Digital Assets Risks](index=36&type=section&id=Digital%20Assets%20Risks) The digital assets industry presents high regulatory uncertainty, intense competition, reliance on third-party infrastructure, and heightened cybersecurity and blockchain technology risks for WisdomTree - The digital assets industry is characterized by high regulatory uncertainty, increasing global competition, and reliance on third-party service providers for critical infrastructure (custody, blockchain, banking, cloud computing)[197](index=197&type=chunk)[198](index=198&type=chunk)[200](index=200&type=chunk) - Cybersecurity risks are heightened due to the use of various technologies in digital assets, making the company susceptible to breaches, data theft, and operational disruptions[199](index=199&type=chunk) - Blockchain infrastructure and technology risks include potential changes in consensus mechanisms, malfunctions, vulnerability to fraud, loss of individualized keys, and the impact of 'forks' (blockchain splits) on asset value and transaction speed[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) [Other Company Risks](index=38&type=section&id=Other%20Company%20Risks) Activist stockholder campaigns can be costly and disruptive, while a change of control could terminate investment management agreements, and non-approval of advisory agreements by Independent Trustees could adversely affect revenues - Responding to activist stockholders has been costly and disruptive, and future activism could cause uncertainty about strategic direction, divert management attention, and impact stock price[210](index=210&type=chunk)[211](index=211&type=chunk) - A change of control would automatically terminate investment management agreements for U.S. listed ETFs, requiring new approvals from Trustees and shareholders, which is not guaranteed and could be expensive[212](index=212&type=chunk)[214](index=214&type=chunk) - Revenues could be adversely affected if Independent Trustees do not approve the continuation of advisory agreements or determine that advisory fees should be reduced[215](index=215&type=chunk) [Risks Relating to our Common and Preferred Stock and Convertible Notes](index=39&type=section&id=Risks%20Relating%20to%20our%20Common%20and%20Preferred%20Stock%20and%20Convertible%20Notes) WisdomTree's common stock price is subject to significant fluctuations, and the company may face challenges in settling or repurchasing Convertible Notes, while redemption rights for Preferred Shares could materially impact its financial position - The market price of common stock has fluctuated significantly and may continue to do so due to various factors, including AUM changes, operating results, analyst reports, strategic moves, regulatory changes, and activist stockholder actions[217](index=217&type=chunk) - WisdomTree may lack the ability to raise funds necessary to settle conversions of Convertible Notes or repurchase them upon a fundamental change, potentially leading to default[220](index=220&type=chunk) - Preferred Shares issued in connection with the ETFS Acquisition contain redemption rights (valued at **$78.0 million** at December 31, 2022) that, if triggered, could materially impact the financial position[222](index=222&type=chunk) [ITEM 1B. Unresolved Staff Comments](index=41&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments) WisdomTree, Inc. has no unresolved comments from the SEC staff regarding its periodic or current reports filed under the Exchange Act - The registrant has no unresolved comments from the SEC staff relating to its periodic or current reports filed with the SEC pursuant to the Exchange Act[230](index=230&type=chunk) [ITEM 2. Properties](index=41&type=section&id=ITEM%202.%20Properties) Effective May 1, 2022, WisdomTree relocated its principal executive office to a smaller footprint in New York City, aligning with its 'remote first' philosophy where employees primarily work remotely - Effective May 1, 2022, WisdomTree relocated its principal executive office to 250 West 34th Street, 3rd Floor, New York, New York, under a license agreement expiring in April 2025 (with an option to terminate in April 2024)[231](index=231&type=chunk) - The company maintains a 'remote first' philosophy, with a reduced office footprint to better align with the number of employees expected to collaborate in person[68](index=68&type=chunk)[69](index=69&type=chunk)[231](index=231&type=chunk) [ITEM 3. Legal Proceedings](index=42&type=section&id=ITEM%203.%20Legal%20Proceedings) WisdomTree is subject to ongoing reviews, inspections, and investigations by regulatory authorities and legal proceedings in the ordinary course of business, including claims totaling approximately €15.8 million ($16.9 million) from investors related to the closure of a leveraged ETP - WisdomTree is subject to reviews, inspections, and investigations by the SEC, CFTC, NFA, state, and foreign regulators, as well as legal proceedings in the ordinary course of business[233](index=233&type=chunk) - Total damages sought by investors in the WisdomTree WTI Crude Oil 3x Daily Leveraged ETP are approximately **€15.8 million ($16.9 million)** as of December 31, 2022, with the company currently assessing these claims[191](index=191&type=chunk)[233](index=233&type=chunk)[596](index=596&type=chunk)[597](index=597&type=chunk) [ITEM 4. Mine Safety Disclosures](index=42&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to WisdomTree, Inc - Mine Safety Disclosures are not applicable to WisdomTree, Inc[234](index=234&type=chunk) PART II [ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=42&type=section&id=ITEM%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) WisdomTree's common stock trades on the NYSE under 'WT', with the company maintaining a quarterly cash dividend policy and a share repurchase program with approximately $100.0 million remaining authorization as of December 31, 2022 - WisdomTree's common stock is traded on the New York Stock Exchange under the symbol 'WT', with **247 holders of record** and approximately **14,000 beneficial owners** as of December 31, 2022[3](index=3&type=chunk)[236](index=236&type=chunk) - The company commenced a quarterly cash dividend in November 2014 and intends to continue payments, subject to financial conditions and legal limitations[237](index=237&type=chunk) Share Repurchase Program Status (December 31, 2022) | Metric | Value | | :----- | :---- | | Repurchase Authorization | $100.0 million (approved Feb 22, 2022, extended to April 27, 2025) | | Shares Repurchased (Q4 2022) | 0 | | Remaining Authorization | $99,976 thousand | [ITEM 6. [Reserved]](index=42&type=section&id=ITEM%206.%20%5BReserved%5D) This item is reserved and not applicable - This item is reserved and not applicable[241](index=241&type=chunk) [ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=ITEM%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive discussion of WisdomTree's financial condition and results of operations, highlighting its strategic focus on ETPs and digital assets, significant net inflows in 2022, stable revenues, and increased expenses due to growth and digital initiatives - WisdomTree achieved its **10th consecutive quarter of net inflows**, generating over **$12 billion in net flows in 2022**, representing **16% organic flow growth**, with inflows across 7 of 8 major product categories[247](index=247&type=chunk) - Key milestones in digital assets include the continued development of WisdomTree Prime™ (nationwide rollout targeted in 2023), tokenization of physical gold and U.S. dollars, SEC-effective registration of 10 Digital Funds, and FINRA approval for WT Securities as a mutual fund retailer[250](index=250&type=chunk) Key Financial Highlights (Year Ended December 31, 2022 vs. 2021) | Metric | 2022 (Million USD) | 2021 (Million USD) | Change (USD) | % Change | | :----------------------------- | :----------------- | :----------------- | :----------- | :------- | | Average AUM | $76,974 | $73,441 | $3,533 | 4.8% | | Total Operating Revenues | $301,345 | $304,318 | ($2,973) | (1.0%) | | Advisory Fees | $293,632 | $298,052 | ($4,420) | (1.5%) | | Other Income | $7,713 | $6,266 | $1,447 | 23.1% | | Total Operating Expenses | $241,260 | $215,260 | $26,000 | 12.1% | | Operating Income | $60,085 | $89,058 | ($28,973) | (32.5%) | | Net Income | $50,684 | $49,797 | $887 | 1.8% | [Introduction](index=43&type=section&id=Introduction) WisdomTree is a global financial innovator offering ETPs, models, and solutions, actively developing next-generation digital products and blockchain-enabled financial services like WisdomTree Prime™ - WisdomTree is a global financial innovator offering ETPs, models, and solutions, with approximately **$82.0 billion in AUM** as of December 31, 2022[243](index=243&type=chunk)[244](index=244&type=chunk) - The company is developing next-generation digital products and structures, including Digital Funds and tokenized assets, as well as its blockchain-native digital wallet, WisdomTree Prime™[243](index=243&type=chunk)[245](index=245&type=chunk) [Executive Summary](index=43&type=section&id=Executive%20Summary) WisdomTree achieved its tenth consecutive quarter of net inflows in 2022, driven by U.S. Floating Rate Treasury Fund and U.S. Equity, while advancing its models strategy and achieving key milestones in digital assets, including the upcoming nationwide rollout of WisdomTree Prime™ - WisdomTree is experiencing its **10th consecutive quarter of net inflows**, with over **$12 billion in net flows in 2022**, representing **16% organic growth**, driven by success in U.S. Floating Rate Treasury Fund (USFR) and U.S. Equity[247](index=247&type=chunk) - The company's models strategy is expanding, focusing on partner platforms and outsourced solutions for financial advisors, aiming for recurring model flows[248](index=248&type=chunk) - Key digital asset milestones include the beta testing of WisdomTree Prime™ (nationwide rollout targeted in 2023), tokenization of physical gold and U.S. dollars, SEC-effective registration of 10 Digital Funds, and FINRA approval for WT Securities to facilitate Digital Fund transactions[250](index=250&type=chunk) [Market Environment](index=44&type=section&id=Market%20Environment) In 2022, both U.S. and European listed ETPs experienced significant net inflows, primarily driven by U.S. equity and fixed income products - U.S. listed ETF net flows for 2022 were **$567.2 billion**, with U.S. equity and fixed income gathering the majority of these flows[253](index=253&type=chunk) - European listed ETP net flows for 2022 were **$74.2 billion**, also primarily driven by equities and fixed income[254](index=254&type=chunk) [Industry Developments](index=46&type=section&id=Industry%20Developments) The asset management industry is undergoing accelerated consolidation due to fee compression and increased regulations, creating opportunities for WisdomTree in ETPs, models, and as an early mover in digital assets - The asset management industry is experiencing accelerated consolidation due to fee compression, cost pressures, and increased regulations, emphasizing the importance of scale and operating efficiency[256](index=256&type=chunk) - WisdomTree sees significant opportunities in both its ETPs, models, and Advisor Solutions business, and as an early mover in digital assets and blockchain-enabled financial services[256](index=256&type=chunk) [Components of Operating Revenue](index=46&type=section&id=Components%20of%20Operating%20Revenue) WisdomTree's revenues are primarily derived from advisory fees on ETPs, calculated as a percentage of average daily net assets, supplemented by other income from swap rebates and licensing fees - Substantially all of WisdomTree's revenues are derived from advisory fees earned from ETPs, calculated as a percentage of average daily net assets[257](index=257&type=chunk)[258](index=258&type=chunk) Weighted Average Advisory Fee Rates by Product Category | Product Category | Fee Rate | | :--------------- | :------- | | Commodity & Currency | 37bps | | International Developed Market Equity | 50bps | | U.S. Equity | 31bps | | Emerging Market Equity | 51bps | | Leveraged & Inverse | 87bps | | Fixed Income | 16bps | | Alternatives | 58bps | | Cryptocurrency | 96bps | - Other income includes rebates from swap providers, creation/redemption fees on European non-UCITS products, and fees from licensing indexes to third parties[259](index=259&type=chunk) [Components of Operating Expenses](index=46&type=section&id=Components%20of%20Operating%20Expenses) WisdomTree's operating expenses primarily consist of compensation, fund management, marketing, sales, contractual gold payments, professional fees, and occupancy costs - Operating expenses primarily consist of compensation and benefits (salaries, incentive compensation, equity awards), fund management and administration (sub-advisory, accounting, custody, market making), and marketing and advertising[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk)[268](index=268&type=chunk) - Other significant expenses include sales and business development, contractual gold payments (**9,500 ounces annually**), professional fees (including for activist campaigns and digital assets), occupancy, depreciation, and third-party distribution fees[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) [Components of Other Income/(Expenses) of a Recurring Nature](index=48&type=section&id=Components%20of%20Other%20Income%2F%28Expenses%29%20of%20a%20Recurring%20Nature) Recurring other income and expenses include interest expense, revaluation gains/losses on deferred gold payments, interest income, and net gains/losses from financial instruments, foreign exchange, and tax-related indemnification assets - Recurring other income/expenses include interest expense (using effective interest method), revaluation of deferred consideration–gold payments (measured using forward-looking gold prices and discount rates), and interest income from corporate cash investments[277](index=277&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk) - Other losses and gains, net, encompass gains/losses from financial instruments owned, sale of gold from advisory fees, foreign exchange fluctuations, and tax-related indemnification asset releases[280](index=280&type=chunk) [Income Taxes](index=48&type=section&id=Income%20Taxes) Income tax expense comprises taxes due to federal, various state and local, and certain foreign authorities - Income tax expense comprises taxes due to federal, various state and local, and certain foreign authorities[281](index=281&type=chunk) [Expense Guidance for the Year Ending December 31, 2023](index=48&type=section&id=Expense%20Guidance%20for%20the%20Year%20Ending%20December%2031%2C%202023) WisdomTree projects 2023 expenses, including compensation, discretionary spending, and contractual gold payments, with an estimated gross margin of 78% and an effective tax rate of approximately 23% due to a U.K. corporate tax increase 2023 Expense Guidance | Expense Category | Estimated Range (Million USD) | | :--------------- | :---------------------------- | | Compensation Expense | $96.0 - $106.0 | | Discretionary Spending | $56.0 - $59.0 | | Contractual Gold Payments | ~$18.0 | | Third-Party Distribution Expense | $8.0 - $9.0 | | Consolidated Normalized Effective Tax Rate | ~23% | - Estimated gross margin percentage for 2023 is **78%** at current AUM and revenue levels, with anticipated expansion assuming continued organic flow growth[285](index=285&type=chunk) - The estimated effective tax rate increase to **23%** is primarily due to the U.K. corporate taxation rate rising from **19% to 25%** effective April 1, 2023[288](index=288&type=chunk) [Factors that May Impact our Future Financial Results](index=49&type=section&id=Factors%20that%20May%20Impact%20our%20Future%20Financial%20Results) WisdomTree's future financial results are highly dependent on investor sentiment towards its product strategies and its ability to maintain AUM, with changes in product mix directly impacting average advisory fee rates - WisdomTree's operating results are highly exposed to investor sentiment towards its product strategies and the ability to maintain AUM, particularly across commodity, U.S. equity, international developed markets, and emerging markets sectors[290](index=290&type=chunk) - Revenues are highly correlated to the level and mix of AUM and the associated fee rate, with changes in product mix leading to a decline in the average advisory fee from **0.41% in 2021 to 0.38% in 2022**[291](index=291&type=chunk) [Key Operating Statistics](index=50&type=section&id=Key%20Operating%20Statistics) This section presents key operating statistics for WisdomTree's global, U.S. listed, and European listed ETPs, detailing AUM, inflows/outflows, market appreciation/depreciation, average advisory fees, and the number of ETPs for the years ended December 31, 2020, 2021, and 2022 Global ETPs Key Operating Statistics (Years Ended December 31) | Metric | 2022 (Millions USD) | 2021 (Millions USD) | 2020 (Millions USD) | | :-------------------------- | :-------------- | :-------------- | :-------------- | | Beginning of period assets | $77,479 | $67,392 | $63,525 | | Inflows/(outflows) | $12,182 | $4,660 | ($18) | | Market (depreciation)/appreciation | ($7,671) | $5,446 | $4,663 | | End of period assets | $81,986 | $77,479 | $67,392 | | Average assets during the period | $76,974 | $73,441 | $61,166 | | Average advisory fee during the period | 0.38% | 0.41% | 0.40% | | Number of ETPs—end of period | 348 | 329 | 309 | U.S. Listed ETFs Key Operating Statistics (Years Ended December 31) | Metric | 2022 (Millions USD) | 2021 (Millions USD) | 2020 (Millions USD) | | :-------------------------- | :-------------- | :-------------- | :-------------- | | Beginning of period assets | $48,210 | $38,517 | $40,600 | | Inflows/(outflows) | $14,572 | $4,950 | ($1,253) | | Market (depreciation)/appreciation | ($6,807) | $4,758 | ($830) | | End of period assets | $55,975 | $48,210 | $38,517 | | Average assets during the period | $49,727 | $44,335 | $34,224 | | Number of ETPs—end of period | 79 | 75 | 67 | European Listed ETPs Key Operating Statistics (Years Ended December 31) | Metric | 2022 (Millions USD) | 2021 (Millions USD) | 2020 (Millions USD) | | :-------------------------- | :-------------- | :-------------- | :-------------- | | Beginning of period assets | $29,269 | $28,875 | $22,925 | | (Outflows)/inflows | ($2,390) | ($290) | $1,235 | | Market (depreciation)/appreciation | ($864) | $688 | $5,493 | | End of period assets | $26,011 | $29,269 | $28,875 | | Average assets during the period | $27,247 | $29,106 | $26,942 | | Number of ETPs—end of period | 269 | 254 | 242 | [Year Ended December 31, 2022 Compared to Year Ended December 31, 2021](index=52&type=section&id=Year%20Ended%20December%2031%2C%202022%20Compared%20to%20Year%20Ended%20December%2031%2C%202021) In 2022, WisdomTree's total revenues slightly decreased by 1.0% to $301.3 million, while total operating expenses increased by 12.1% to $241.3 million, driven by higher professional fees and compensation, with a significant gain on revaluation of deferred consideration and a negative effective income tax rate Operating Revenues (2022 vs. 2021) | Metric | 2022 (Thousands USD) | 2021 (Thousands USD) | Change (Thousands USD) | % Change | | :------------- | :--------------- | :--------------- | :----------------- | :------- | | Advisory fees | $293,632 | $298,052 | ($4,420) | (1.5%) | | Other income | $7,713 | $6,266 | $1,447 | 23.1% | | Total revenues | $301,345 | $304,318 | ($2,973) | (1.0%) | - Advisory fee revenues decreased by **1.5%** due to a decline in the average advisory fee from **0.41% to 0.38%**, despite higher average AUM, reflecting an AUM mix shift[296](index=296&type=chunk) Operating Expenses (2022 vs. 2021) | Expense Category | 2022 (Thousands USD) | 2021 (Thousands USD) | Change (Thousands USD) | % Change | | :----------------------------- | :--------------- | :--------------- | :----------------- | :------- | | Compensation and benefits | $97,897 | $88,163 | $9,734 | 11.0% | | Fund management and administration | $64,761 | $58,912 | $5,849 | 9.9% | | Marketing and advertising | $15,302 | $14,090 | $1,212 | 8.6% | | Sales and business development | $11,871 | $9,907 | $1,964 | 19.8% | | Contractual gold payments | $17,108 | $17,096 | $12 | 0.1% | | Professional fees | $13,800 | $7,616 | $6,184 | 81.2% | | Occupancy, communications and equipment | $3,898 | $4,629 | ($731) | (15.8%) | | Depreciation and amortization | $262 | $738 | ($476) | (64.5%) | | Third-party distribution fees | $7,656 | $7,176 | $480 | 6.7% | | Other | $8,705 | $6,933 | $1,772 | 25.6% | | Total operating expenses | $241,260 | $215,260 | $26,000 | 12.1% | - Professional fees surged by **81.2% to $13.8 million**, primarily due to **$4.5 million** incurred in response to an activist campaign and increased spending on the digital assets business[305](index=305&type=chunk) - A significant gain on revaluation of deferred consideration of **$27.8 million** was recognized in 2022 (vs. **$2.0 million** in 2021), mainly due to an increase in the discount rate and a steepening of the forward-looking gold curve[313](index=313&type=chunk) - The effective income tax rate was **negative 26.9% in 2022**, resulting in a **$10.7 million benefit**, primarily due to a **$19.9 million** reduction in unrecognized tax benefits and a reduction in the valuation allowance on foreign net operating losses[318](index=318&type=chunk) [Year Ended December 31, 2021 Compared to Year Ended December 31, 2020](index=55&type=section&id=Year%20Ended%20December%2031%2C%202021%20Compared%20to%20Year%20Ended%20December%2031%2C%202020) In 2021, WisdomTree's total revenues increased by 21.8% to $304.3 million, driven by higher advisory fees from increased AUM, while total operating expenses rose by 10.5% to $215.3 million, including significant impairment charges Operating Revenues (2021 vs. 2020) | Metric | 2021 (Thousands USD) | 2020 (Thousands USD) | Change (Thousands USD) | % Change | | :------------- | :--------------- | :--------------- | :----------------- | :------- | | Advisory fees | $298,052 | $246,395 | $51,657 | 21.0% | | Other income | $6,266 | $3,517 | $2,749 | 78.2% | | Total revenues | $304,318 | $249,912 | $54,406 | 21.8% | - Average AUM increased by **20.1% from $61.2 billion in 2020 to $73.4 billion in 2021**, driven by market appreciation and net inflows[322](index=322&type=chunk) Operating Expenses (2021 vs. 2020) | Expense Category | 2021 (Thousands USD) | 2020 (Thousands USD) | Change (Thousands USD) | % Change | | :----------------------------- | :--------------- | :--------------- | :----------------- | :------- | | Compensation and benefits | $88,163 | $74,675 | $13,488 | 18.1% | | Fund management and administration | $58,912 | $56,728 | $2,184 | 3.8% | | Marketing and advertising | $14,090 | $11,128 | $2,962 | 26.6% | | Sales and business development | $9,907 | $10,579 | ($672) | (6.4%) | | Contractual gold payments | $17,096 | $16,811 | $285 | 1.7% | | Professional fees | $7,616 | $4,902 | $2,714 | 55.4% | | Occupancy, communications and equipment | $4,629 | $6,427 | ($1,798) | (28.0%) | | Depreciation and amortization | $738 | $1,021 | ($283) | (27.7%) | | Third-party distribution fees | $7,176 | $5,219 | $1,957 | 37.5% | | Acquisition and disposition-related costs | $0 | $416 | ($416) | n/a | | Other | $6,933 | $6,924 | $9 | 0.1% | | Total operating expenses | $215,260 | $194,830 | $20,430 | 10.5% | - Impairment charges totaled **$16.2 million in 2021**, including **$9.3 million** from the termination of the former New York office lease and **$6.6 million** for related asset write-offs[342](index=342&type=chunk) - The effective income tax rate for 2021 was **12.1%**, resulting in **$6.9 million expense**, primarily due to a **$5.2 million** reduction in unrecognized tax benefits and a lower tax rate on foreign earnings[319](index=319&type=chunk)[348](index=348&type=chunk) [Quarterly Results](index=59&type=section&id=Quarterly%20Results) This section provides unaudited consolidated quarterly statements of operations data and global ETPs operating statistics from Q1 2021 to Q4 2022, detailing revenues, expenses, net income, EPS, dividends, AUM, inflows, and average advisory fees Unaudited Consolidated Quarterly Statement of Operations Data (Q4 2022 - Q1 2021) | (in thousands USD, except per share amounts) | Q4/22 | Q3/22 | Q2/22 | Q1/22 | Q4/21 | Q3/21 | Q2/21 | Q1/21 | | :-------------------------------------- | :---- | :---- | :---- | :---- | :---- | :---- | :---- | :---- | | Total Revenues | $73,310 | $72,414 | $77,253 | $78,368 | $79,175 | $78,112 | $75,775 | $71,256 | | Total Operating Expenses | $61,591 | $57,541 | $61,449 | $60,679 | $56,612 | $53,909 | $52,090 | $52,649 | | Operating Income | $11,719 | $14,873 | $15,804 | $17,689 | $22,563 | $24,203 | $23,685 | $18,607 | | Net (loss)/income | $(28,289) | $81,229 | $8,005 | $(10,261) | $11,187 | $5,833 | $17,630 | $15,147 | | (Loss)/earnings per share—basic | $(0.20) | $0.50 | $0.05 | $(0.08) | $0.07 | $0.04 | $0.11 | $0.09 | | Dividends per common share | $0.03 | $0.03 | $0.03 | $0.03 | $0.03 | $0.03 | $0.03 | $0.03 | Global ETPs Operating Statistics (Quarterly) | Metric (in millions USD) | Q4/22 | Q3/22 | Q2/22 | Q1/22 | Q4/21 | Q3/21 | Q2/21 | Q1/21 | | :------------------- | :---- | :---- | :---- | :---- | :---- | :---- | :---- | :---- | | End of period assets | $81,986 | $70,878 | $74,302 | $79,407 | $77,479 | $72,783 | $73,948 | $69,537 | | Inflows/(outflows) | $5,264 | $1,747 | $3,852 | $1,319 | $1,902 | $548 | $931 | $1,279 | | Average advisory fee | 0.36% | 0.38% | 0.39% | 0.40% | 0.40% | 0.41% | 0.40% | 0.41% | [Non-GAAP Financial Measurements](index=62&type=section&id=Non-GAAP%20Financial%20Measurements) WisdomTree provides Adjusted Net Income and Diluted Earnings per Share as non-GAAP measures to offer a consistent analysis of performance by excluding non-recurring or non-core items - WisdomTree discloses Adjusted Net Income and Diluted Earnings per Share as non-GAAP measures to provide a consistent analysis of performance, excluding non-recurring or non-core items[356](index=356&type=chunk)[357](index=357&type=chunk) - Exclusions from non-GAAP measures include unrealized gains/losses on revaluation of deferred consideration, gains/losses on financial instruments owned, tax shortfalls/windfalls from stock-based compensation, and other non-recurring items like activist campaign expenses and impairments[357](index=357&type=chunk) Adjusted Net Income and Diluted EPS (Years Ended December 31) | Metric | 2022 (Thousands USD) | 2021 (Thousands USD) | 2020 (Thousands USD) | | :-------------------------------------- | :--------------- | :--------------- | :--------------- | | Net income/(loss), as reported | $50,684 | $49,797 | $(35,655) | | Adjusted net income | $41,669 | $61,352 | $40,205 | | Adjusted earnings per share—diluted | $0.26 | $0.38 | $0.24 | [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) WisdomTree's available liquidity decreased to $112.9 million in 2022, with operating cash flows of $55.1 million, and the company recently issued $130.0 million in 5.75% Convertible Senior Notes due 2028 Available Liquidity (December 31) | Metric (in thousands USD) | 2022 | 2021 | | :-------------------- | :--- | :--- | | Cash and cash equivalents | $132,101 | $140,709 | | Financial instruments owned, at fair value | $126,239 | $127,166 | | Accounts receivable | $30,549 | $31,864 | | Securities held-to-maturity | $259 | $308 | | Total: Liquid assets | $289,148 | $300,047 | | Less: Total current liabilities | ($148,434) | ($83,667) | | Less: Other assets—seed capital | ($1,765) | $0 | | Less: Regulatory capital requirements | ($25,988) | ($12,320) | | Total: Available liquidity | $112,961 | $204,060 | Cash Flow Data (Years Ended December 31) | Metric (in thousands USD) | 2022 | 2021 | 2020 | | :-------------------- | :--- | :--- | :--- | | Operating cash flows | $55,087 | $75,318 | $47,136 | | Investing cash flows | ($37,657) | ($99,632) | $10,641 | | Financing cash flows | ($22,780) | $92,553 | ($60,179) | | (Decrease)/increase in cash and cash equivalents | ($8,608) | $67,284 | ($1,547) | - WisdomTree issued **$130.0 million of 5.75% Convertible Senior Notes due 2028** in February 2023, and repurchased **$115.0 million of 2020 Notes**, resulting in **$340.0 million** aggregate principal amount of Convertible Notes outstanding[365](index=365&type=chunk)[368](index=368&type=chunk)[369](index=369&type=chunk) [Contractual Obligations](index=66&type=section&id=Contractual%20Obligations) WisdomTree's contractual obligations include $340.0 million in Convertible Notes maturing through 2028, a deferred consideration obligation for annual gold payments with a present value of $200.3 million, and $1.5 million in future minimum operating lease payments - WisdomTree has **$340.0 million** aggregate principal amount of Convertible Notes outstanding, maturing between June 2023 and August 2028, with conditional conversions or fundamental change repurchases potentially accelerating payment[369](index=369&type=chunk)[376](index=376&type=chunk) - The company has a deferred consideration obligation from the ETFS Acquisition to pay **9,500 ounces of physical gold annually** through March 31, 2058, then **6,333 ounces perpetually**, with a present value of **$200.3 million** at December 31, 2022[378](index=378&type=chunk) - Total future minimum operating lease payments were **$1.5 million** at December 31, 2022, which the company expects to satisfy with operating cash flows and existing cash balances[380](index=380&type=chunk) [Critical Accounting Policies and Estimates](index=67&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) WisdomTree's critical accounting policies involve annual impairment testing of goodwill and indefinite-lived intangible assets, accounting for equity investments, and fair value measurement of deferred consideration for gold payments using forward-looking prices and discount rates - Goodwill and indefinite-lived intangible assets are tested for impairment annually (November 30th) using qualitative and quantitative assessments (market approach, discounted cash flow analysis), with no impairment recognized in 2022[383](index=383&type=chunk)[385](index=385&type=chunk)[386](index=386&type=chunk) - Equity investments without readily determinable fair value are accounted for under the measurement alternative (cost less impairment, plus/minus observable price changes), while debt instruments are at fair value[387](index=387&type=chunk)[388](index=388&type=chunk) - Deferred consideration for gold payments is measured at present value using forward-looking gold prices, a discount rate (**11.0%** at Dec 31, 2022), and a perpetual growth rate (**1.3%** at Dec 31, 2022), with changes reported as gain/loss on revaluation[389](index=389&type=chunk)[390](index=390&type=chunk) [Recently Adopted Accounting Pronouncements](index=68&type=section&id=Recently%20Adopted%20Accounting%20Pronouncements) WisdomTree early adopted ASU 2020-06 on January 1, 2021, simplifying accounting for convertible instruments and reducing interest expense, while also adopting ASU 2019-12 with no material impact - On January 1, 2021, WisdomTree early adopted ASU 2020-06 (Debt – Debt with Conversion and Other Options) under the modified retrospective approach, simplifying accounting for convertible instruments by reporting them as a single liability or equity[393](index=393&type=chunk) - The adoption of ASU 2020-06 resulted in reclassifications on the balance sheet and reduced interest expense on Convertible Notes by approximately **$0.4 million per quarter**[393](index=393&type=chunk) - On January 1, 2021, the company also adopted ASU 2019-12 (Income Taxes – Simplifying the Accounting for Income Taxes), which did not have a material impact on its financial statements[394](index=394&type=chunk) [ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk](index=68&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) WisdomTree is exposed to market risk primarily through fluctuations in ETP values driven by securities/commodity prices, foreign currency exchange rates, and interest rates, which directly impact advisory fees and AUM - WisdomTree's market risk stems from changes in ETP values due to fluctuations in securities/commodity prices, foreign currency exchange rates, and interest rates, directly affecting advisory fees and AUM[396](index=396&type=chunk)[397](index=397&type=chunk) - Corporate cash is invested in short-term interest-earning assets (federal agency debt, WisdomTree fixed income ETFs, U.S. treasuries, corporate bonds, money market instruments), totaling **$127.4 million** as of December 31, 2022, with recognized losses of **$16.5 million** in 2022[398](index=398&type=chunk) - The company is subject to currency translation exposure on non-U.S. operations (U.K., Europe), where expenses are in British pounds, but advisory fees are predominantly in U.S. dollars or gold ounces. It does not currently hedge against commodity or cryptocurrency price fluctuations[400](index=400&type=chunk)[402](index=402&type=chunk) [Market Risk](index=68&type=section&id=Market%20Risk) Market risk for WisdomTree involves changes in ETP values due to fluctuations in securities, commodity prices, foreign currency exchange rates, and interest rates, directly impacting advisory fees and AUM - Market risk for WisdomTree is the risk of changes in ETP values resulting from fluctuations in securities or commodity prices, foreign currency exchange rates, and interest rates, which directly impacts advisory fees earned on AUM[396](index=396&type=chunk) - Fluctuations in ETP values are driven by market volatility, global economy, inflation, investor sentiment, and regulations, potentially reducing AUM and revenues[397](index=397&type=chunk) [Interest Rate Risk](index=68&type=section&id=Interest%20Rate%20Risk) WisdomTree invests corporate cash in short-term interest-earning assets, recognizing losses in 2022, but does not anticipate a material impact from interest rate changes on its fixed-rate Convertible Notes - WisdomTree invests corporate cash in short-term interest-earning assets, recognizing losses of **$16.5 million in 2022**, but does not anticipate a material impact on financial condition or cash flows from interest rate changes[398](index=398&type=chunk) - The company's Convertible Notes bear fixed interest rates (**5.75%, 3.25%, 4.25%**), so there is no direct financial statement risk from interest rate changes, though fair value of notes can fluctuate with market interest rates[399](index=399&type=chunk) [Exchange Rate Risk](index=69&type=section&id=Exchange%20Rate%20Risk) WisdomTree is exposed to currency translation risk from its non-U.S. operations, primarily in the U.K. and Europe, where corporate overhead expenses in British pounds create an exposure against advisory fees mostly denominated in U.S. dollars or gold - WisdomTree is exposed to currency translation risk from its non-U.S. operations (primarily U.K. and Europe), where foreign entities' financial statements are translated to U.S. dollars[400](index=400&type=chunk) - While European ETP advisory fees are mostly in U.S. dollars or gold, corporate overhead expenses are in British pounds, creating an exposure. The company does not currently use derivative financial instruments for hedging[400](index=400&type=chunk) [Commodity and Cryptocurrency Price Risk](index=69&type=section&id=Commodity%20and%20Cryptocurrency%20Price%20Risk) Fluctuations in commodity and cryptocurrency prices can materially impact WisdomTree's AUM and revenues, as a portion of advisory fees from related ETPs are paid in the underlying assets, and the company does not currently hedge these price risks - Fluctuations in commodity and cryptocurrency prices linked to certain ETPs could materially impact AUM and revenues[402](index=402&type=chunk) - A portion of advisory fees from gold, precious metals, and cryptocurrency-backed ETPs are paid in the underlying asset, and while readily sold, the company may maintain positions and does not currently hedge against these price fluctuations[402](index=402&type=chunk) [ITEM 8. Financial State

Financial Data and Key Metrics Changes - WisdomTree generated net flows totaling $5.3 billion in Q4 2022, marking the strongest flowing quarter since 2015, and closed the year with $82 billion of AUM, the highest quarter-end on record [5][9] - Revenues were $73.3 million, essentially unchanged from the previous quarter, as higher average AUM was offset by a 2 basis point decline in average advisory fees [10] - Adjusted net income was $7 million or $0.04 per share, excluding a non-cash after-tax loss of $35 million related to future gold commitment payments [10][11] - Operating expenses increased by 7% for the quarter, primarily due to higher incentive compensation accruals and seasonal marketing expenses [11] Business Line Data and Key Metrics Changes - The Floating Rate Treasury product (USFR) was the primary contributor to net flows, attracting $3.4 billion, followed by U.S. equity products with about $1 billion and commodities with $800 million, mainly into oil [6][8] - U.S. equity products experienced positive net flows for 30 of the last 31 months, with over $3 billion in flows during the year [8] Market Data and Key Metrics Changes - WisdomTree's AUM reached a record level of $87.2 billion, an increase of 6% from the end of December, benefiting from positive market movement [9] - The company faced a challenging market backdrop, with negative market movement impacting AUM by almost $8 billion for the year [7] Company Strategy and Development Direction - WisdomTree aims to reinvest in future growth initiatives, including the anticipated national launch of WisdomTree Prime, focusing on organic growth [12] - The company has established a first-mover advantage in digital assets and blockchain-enabled finance, with a suite of 10 blockchain-enabled funds [19][20] - The operations and strategy committee concluded its review, and the Board unanimously supported the executive management team and the firm's strategy [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued momentum, citing a best-in-class 16% organic growth rate and strong product performance, with over 80% of U.S. AUM beating benchmarks [18][20] - The company anticipates strong and steady organic growth based on fund performance and a shift in sentiment towards value investing [22] Other Important Information - The company expects its gross margin to be 78% at current AUM levels, with anticipated margin expansion assuming continued organic flow growth [14] - WisdomTree plans to reduce debt by approximately $50 million and refinance the remainder, with estimated interest costs rising temporarily to about $16 million in 2023 [16][17] Q&A Session Summary Question: Who are the major competitors to WisdomTree Prime? - William Peck identified Circle and Paxos as competitors in the digital asset space, emphasizing WisdomTree Prime's focus on real-world asset tokenization and a user-friendly investor experience [29] Question: What will drive flow growth in 2023 for WisdomTree? - Jeremy Schwartz highlighted the structural advantages of ETFs and the attractiveness of fixed income products, particularly floating rate treasuries, as key drivers for flow growth [32][34] Question: Why hasn't WisdomTree achieved consistent profitability? - Bryan Edmiston explained that fluctuations in GAAP net income are primarily due to deferred consideration related to contractual gold payments, which create accounting noise [40][42] Question: What is the marketing strategy for WisdomTree Prime? - William Peck discussed a lean marketing approach focused on high ROI channels, including digital marketing and TV advertising, to attract users to WisdomTree Prime [69]

WISDOMTREE® L I S T E D NYSE Q4 2022 Results February 3, 2023 WISDOMTREE® Forward looking statements This presentation 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 oth ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 001-10932 WisdomTree Investments, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of ...

Financial Data and Key Metrics Changes - WisdomTree's AUM (Assets Under Management) decreased due to negative market movements, currently standing at $74.6 billion, a 5% increase from the end of September [8][9] - Revenues for the quarter were $72.4 million, a decrease of 6% from the prior quarter, attributed to negative market impacts on AUM [10] - Adjusted net income was $9.3 million or $0.06 per share, with non-GAAP results excluding a noncash after-tax gain of $78 million [10] - Adjusted operating expenses decreased by 3% for the quarter, primarily due to lower incentive compensation and marketing expenses [11] Business Line Data and Key Metrics Changes - Fixed income products were the primary contributors, generating over $2.8 billion in flows during the quarter and almost $9.7 billion year-to-date [7] - U.S. Equity product suite experienced 13% annualized organic growth, bringing in $1.2 billion during the quarter and $2.5 billion year-to-date [7] - The company reported best-in-class annualized organic growth of 14% across AUM, with eight consecutive positive flowing quarters [8] Market Data and Key Metrics Changes - The company experienced $1.7 billion of flows during the quarter and $8.7 billion year-to-date for October, despite challenging market conditions [6] - Fixed income inflows year-to-date exceeded $10 billion, marking a breakout year for WisdomTree's fixed income team [48] Company Strategy and Development Direction - WisdomTree is focusing on digital assets and blockchain-enabled finance as a key growth area, with plans to launch a full digital fund suite [23][26] - The company aims to bring mainstream exposures into the digital world through blockchain-enabled funds and tokenized assets [24] - WisdomTree is evolving from individual ticker sales to being a true solutions provider, enhancing its model lineup and partnerships with major financial institutions [31][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market backdrop with rising interest rates and inflation concerns but expressed confidence in the company's performance and growth potential [6][28] - The company anticipates continued organic growth in digital assets, ETFs, and managed models, with a robust pipeline of opportunities [55][62] Other Important Information - WisdomTree received SEC approval for its digital treasury fund, marking a significant milestone in its digital asset strategy [42] - The company is changing its name to WisdomTree Inc. and its ticker symbol to WT, reflecting its broader mission beyond investments [36] Q&A Session Summary Question: How is WisdomTree thinking about the spot bitcoin approval process? - Management emphasized a productive relationship with regulators and the goal to be among the first to launch a spot bitcoin ETF, while also focusing on other digital asset initiatives [40][41] Question: How have fixed income products fared in the higher rate environment? - WisdomTree reported $10 billion in fixed income flows year-to-date, highlighting the success of its Floating Rate Treasury product [48] Question: Where do you see the opportunity to gather assets going forward? - Management identified digital assets, ETF lineup, and managed models as key areas for continued organic growth [55][62] Question: Can you provide more color on the beta version of WisdomTree Prime? - Management confirmed that everything is on track for a national rollout in Q1, with no specific metrics disclosed at this time [84] Question: How do you anticipate the competitive landscape to evolve in digital assets? - Management expects more competitors to enter the space but believes WisdomTree's early mover advantage and established infrastructure will position it well for future growth [106][111]

es Q3/22 Results October 28, 2022 s a sesses WisdomTree® Forward looking statements This presentation 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 m ...

[General Information](index=1&type=section&id=General%20Information) This section covers the administrative details of the Form 10-Q filing for WisdomTree Investments, Inc., including registrant information and filing status [Form 10-Q Filing Details](index=1&type=section&id=Form%2010-Q%20Filing%20Details) This section provides the administrative details of the Form 10-Q filing for WisdomTree Investments, Inc. for the quarterly period ended June 30, 2022, including registrant information, exchange listings, and filer status - The filing is a **Quarterly Report (Form 10-Q)** for the period ended June 30, 2022[2](index=2&type=chunk) - **WisdomTree Investments, Inc. (WETF)** is incorporated in Delaware and listed on The NASDAQ Stock Market LLC[3](index=3&type=chunk)[4](index=4&type=chunk) - The registrant is classified as a **Large Accelerated Filer**[5](index=5&type=chunk) Common Stock Outstanding | Date | Shares Outstanding | | :----------- | :----------------- | | July 26, 2022 | 146,584,951 | [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section provides a cautionary note regarding forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ materially [Forward-Looking Statements Disclosure](index=4&type=section&id=Forward-Looking%20Statements%20Disclosure) This section advises readers that the report contains forward-looking statements based on management's beliefs and assumptions, which involve known and unknown risks and uncertainties that could cause actual results to differ materially. It lists specific areas where forward-looking statements may be found, such as market trends, product development, and regulatory impacts - Forward-looking statements are based on management's beliefs and assumptions, and **actual results may differ materially** due to known and unknown risks and uncertainties[11](index=11&type=chunk)[12](index=12&type=chunk) - Key areas for forward-looking statements include the impact of COVID-19 and the war in Ukraine, global market trends, ETP inflows/outflows, competition, new product development (e.g., digital assets strategy like **WisdomTree Prime™**), and regulatory effects[15](index=15&type=chunk) [PART I: FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%3A%20FINANCIAL%20INFORMATION) This part presents the company's unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [ITEM 1. Financial Statements](index=5&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of WisdomTree Investments, Inc. and its subsidiaries, including the balance sheets, statements of operations, comprehensive income/(loss), changes in stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies and specific financial line items [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific points in time Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2022 (unaudited) | December 31, 2021 | | :------------------------- | :------------------------ | :---------------- | | Total Assets | $1,006,473 | $1,037,860 | | Total Liabilities | $616,648 | $635,867 | | Total Stockholders' Equity | $257,256 | $269,424 | | Cash and cash equivalents | $109,736 | $140,709 | | Convertible notes—current | $173,325 | $— | - Total assets decreased by approximately **$31.4 million** from December 31, 2021, to June 30, 2022[18](index=18&type=chunk) - Current liabilities significantly increased due to **$173.3 million in convertible notes** becoming current[18](index=18&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents the company's revenues, expenses, and net income or loss over specific reporting periods Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $77,253 | $75,775 | $155,621 | $147,031 | | Total operating expenses | $61,449 | $52,090 | $122,128 | $104,739 | | Operating income | $15,804 | $23,685 | $33,493 | $42,292 | | Net income/(loss) | $8,005 | $17,630 | $(2,256) | $32,777 | | Earnings/(loss) per share—basic | $0.05 | $0.11 | $(0.02) | $0.20 | - Net income for the three months ended June 30, 2022, decreased by **54.6% YoY**, while the six-month period saw a **net loss** compared to a profit in the prior year[20](index=20&type=chunk) - Total operating expenses increased significantly by **18.0%** for the three months and **16.6%** for the six months ended June 30, 2022, compared to the prior year[20](index=20&type=chunk) [Consolidated Statements of Comprehensive Income/(Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%2F%28Loss%29) This section reports the company's net income or loss and other comprehensive income or loss, reflecting all changes in equity during a period except those resulting from investments by and distributions to owners Consolidated Statements of Comprehensive Income/(Loss) Highlights (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income/(loss) | $8,005 | $17,630 | $(2,256) | $32,777 | | Foreign currency translation adjustment, net of income taxes | $(1,721) | $170 | $(2,207) | $53 | | Comprehensive income/(loss) | $6,284 | $17,800 | $(4,463) | $32,830 | - Comprehensive income for the three months ended June 30, 2022, decreased by **64.7% YoY**, primarily due to lower net income and negative foreign currency translation adjustments[23](index=23&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details the changes in the company's stockholders' equity over time, including net income, dividends, stock-based compensation, and other comprehensive income or loss Changes in Stockholders' Equity (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Balance—April 1 | $253,377 | $274,184 | | Stock-based compensation | $2,432 | $2,121 | | Other comprehensive loss | $(1,721) | $170 | | Dividends | $(4,837) | $(4,928) | | Net income | $8,005 | $17,630 | | Balance—June 30 | $257,256 | $257,737 | - For the six months ended June 30, 2022, total stockholders' equity decreased from **$269.4 million to $257.3 million**, primarily due to net loss, dividends, and other comprehensive loss, partly offset by stock-based compensation[27](index=27&type=chunk) - Share repurchases significantly decreased from **$34.5 million** in the six months ended June 30, 2021, to **$3.4 million** in the comparable period of 2022[27](index=27&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by the company's operating, investing, and financing activities Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $8,542 | $22,390 | | Net cash used in investing activities | $(23,070) | $(30,453) | | Net cash (used in)/provided by financing activities | $(13,073) | $102,147 | | Net (decrease)/increase in cash and cash equivalents | $(30,973) | $94,210 | | Cash and cash equivalents—end of period | $109,736 | $167,635 | - Net cash provided by operating activities decreased by **61.8% YoY** for the six months ended June 30, 2022[29](index=29&type=chunk) - Financing activities shifted from a significant cash inflow in 2021 (due to convertible notes issuance) to a **cash outflow in 2022**[29](index=29&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information about the amounts presented in the consolidated financial statements [Note 1. Organization and Description of Business](index=11&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) WisdomTree Investments, Inc. is an ETP sponsor and asset manager offering a diverse range of ETPs. The company operates through various wholly-owned subsidiaries globally, including those focused on traditional ETPs and emerging digital asset strategies - **WisdomTree** is an ETP sponsor and asset manager, headquartered in New York, offering ETPs across equity, commodity, fixed income, leveraged and inverse, currency, cryptocurrency, and alternative strategies[32](index=32&type=chunk) - The company has established subsidiaries for digital asset initiatives, including **WisdomTree Digital Commodity Services, LLC**, **WisdomTree Digital Management, Inc.**, and **WisdomTree Digital Movement, Inc.**[34](index=34&type=chunk) [Note 2. Significant Accounting Policies](index=11&type=section&id=Note%202.%20Significant%20Accounting%20Policies) This note details the significant accounting policies used in preparing the consolidated financial statements, including the basis of presentation, consolidation principles, foreign currency translation, use of estimates, and specific policies for revenue recognition, expenses, and various asset and liability classifications. It also includes immaterial error corrections and reclassifications from prior periods - The financial statements are prepared in conformity with **U.S. GAAP**, consolidating wholly-owned subsidiaries with elimination of intercompany transactions[33](index=33&type=chunk) - Revenue is primarily from **advisory fees**, recognized over time based on a percentage of ETPs' average daily net assets[45](index=45&type=chunk) - An **immaterial error correction** was made to the Consolidated Statements of Operations for the three and six months ended June 30, 2021, reclassifying amounts collected on behalf of third parties from advisory fee revenue and fund management expense, with **no effect on net income**[36](index=36&type=chunk) - Cash flows from purchasing and selling securities owned were **reclassified from operating to investing activities** for the six months ended June 30, 2021, to conform to the current year's presentation[37](index=37&type=chunk)[38](index=38&type=chunk) [Note 3. Cash and Cash Equivalents](index=21&type=section&id=Note%203.%20Cash%20and%20Cash%20Equivalents) This note provides a breakdown of cash and cash equivalents, highlighting the concentration of funds in two financial institutions and the regulatory capital requirements for international subsidiaries Cash and Cash Equivalents (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :------------------ | :------------ | :---------------- | | Total | $109,736 | $140,709 | | Held at two FIs | $107,666 | $127,328 | | Cash equivalents | $2,001 | $11,488 | - Certain international subsidiaries are required to maintain **minimum regulatory capital**, which increased from **$12.3 million** at December 31, 2021, to **$25.5 million** at June 30, 2022[83](index=83&type=chunk) [Note 4. Fair Value Measurements](index=23&type=section&id=Note%204.%20Fair%20Value%20Measurements) This note describes the fair value hierarchy (Levels 1, 2, and 3) used for financial instruments and provides a summary of assets and liabilities measured at fair value, including a reconciliation of Level 3 measurements - Fair value measurements are categorized into **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than Level 1), and **Level 3** (unobservable inputs)[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) Assets and Liabilities Measured at Fair Value (in thousands) | Category | June 30, 2022 Total | Level 1 | Level 2 | Level 3 | | :------------------------------------- | :------------------ | :------ | :------- | :-------- | | **Assets:** | | | | | | Cash equivalents | $2,001 | $2,001 | $— | $— | | Securities owned, at fair value (ETFs) | $13,091 | $13,091 | $— | $— | | Securities owned, at fair value (Pass-through GSEs) | $114,004 | $24,347 | $89,657 | $— | | Securities owned, at fair value (Corporate bonds) | $1,757 | $— | $1,757 | $— | | Investments in Convertible Notes | $11,712 | $— | $— | $11,712 | | Onramp Invest, Inc. – preferred stock | $312 | $— | $— | $312 | | **Liabilities:** | | | | | | Deferred consideration | $242,767 | $— | $— | $242,767 | - Investments in convertible notes and deferred consideration are classified as **Level 3** due to significant unobservable inputs[90](index=90&type=chunk)[95](index=95&type=chunk) [Note 5. Securities Owned](index=24&type=section&id=Note%205.%20Securities%20Owned) This note details the company's trading securities, which are measured at fair value, and reports net trading losses recognized during the periods Securities Owned (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :---------------- | :------------ | :---------------- | | Trading securities | $128,852 | $127,166 | Net Trading Losses on Securities Owned (in thousands) | Period | 2022 | 2021 | | :----------------------------------- | :------- | :------- | | Three months ended June 30 | $3,596 | $272 | | Six months ended June 30 | $7,912 | $833 | [Note 6. Securities Held-to-Maturity](index=25&type=section&id=Note%206.%20Securities%20Held-to-Maturity) This note provides information on securities classified as held-to-maturity, which are recorded at amortized cost, and their maturity profile. These securities are primarily pass-through GSEs with an estimated zero loss rate due to implicit U.S. government guarantees Securities Held-to-Maturity (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :----------------------------------- | :------------ | :---------------- | | Debt instruments: Pass-through GSEs (amortized cost) | $277 | $308 | | Gross unrealized gains | $2 | $13 | | Gross unrealized losses | $(12) | $— | | Fair value | $267 | $321 | - **No allowance for credit losses** was provided as all held-to-maturity securities are investments in pass-through GSEs with an implicit U.S. government guarantee[100](index=100&type=chunk) Maturity Profile of Securities Held-to-Maturity (in thousands) | Maturity Profile | June 30, 2022 | December 31, 2021 | | :-------------------- | :------------ | :---------------- | | Due five years through ten years | $30 | $— | | Due over ten years | $247 | $308 | | Total | $277 | $308 | [Note 7. Investments](index=26&type=section&id=Note%207.%20Investments) This note details the company's equity and convertible note investments, primarily in Securrency, Inc., Fnality International Limited, and Onramp Invest, Inc. It describes the accounting methods used (measurement alternative for equity, fair value for convertible notes) and the valuation inputs for Level 3 fair value measurements Company's Investments (in thousands) | Investment | June 30, 2022 Carrying Value | June 30, 2022 Cost | December 31, 2021 Carrying Value | December 31, 2021 Cost | | :--------------------------------------- | :----------------------------- | :----------------- | :------------------------------- | :--------------------- | | Securrency, Inc. – Series A convertible preferred stock | $8,488 | $8,112 | $8,488 | $8,112 | | Securrency, Inc. – Series B convertible preferred stock | $5,500 | $5,500 | $5,500 | $5,500 | | Securrency, Inc. – convertible note | $5,279 | $5,000 | $— | $— | | Fnality International Limited – convertible note | $6,433 | $6,863 | $— | $— | | Onramp Invest, Inc. – Series A-4 preferred stock | $312 | $250 | $250 | $250 | | Total | $26,012 | $25,725 | $14,238 | $13,862 | - The company recognized a **gain of $279** on the Securrency convertible note and a **loss of $163** on the Fnality convertible note for the three months ended June 30, 2022, both valued using the **Probability-Weighted Expected Return Method (PWERM)**[111](index=111&type=chunk)[116](index=116&type=chunk) - A **gain of $62** was recognized in connection with the conversion of SAFE into Series A-4 Preferred Stock of Onramp Invest, Inc. during the three and six months ended June 30, 2022[119](index=119&type=chunk) [Note 8. Fixed Assets, net](index=29&type=section&id=Note%208.%20Fixed%20Assets%2C%20net) This note provides a summary of the company's fixed assets, primarily equipment, net of accumulated depreciation Fixed Assets, net (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :------------------------ | :------------ | :---------------- | | Equipment | $947 | $784 | | Less: accumulated depreciation | $(306) | $(227) | | Total | $641 | $557 | [Note 9. Deferred Consideration](index=29&type=section&id=Note%209.%20Deferred%20Consideration) This note details the deferred consideration obligation assumed from the ETFS Acquisition, which involves perpetual physical gold bullion payments. It outlines the valuation assumptions and the recognized gains/losses on revaluation - Deferred consideration is an obligation to pay **9,500 ounces of gold per year** through March 31, 2058, then **6,333 ounces perpetually**, stemming from the ETFS Acquisition[121](index=121&type=chunk) Deferred Consideration Valuation Assumptions | Metric | June 30, 2022 | December 31, 2021 | | :--------------------------- | :------------ | :---------------- | | Weighted average gold price (per ounce) | $2,265 | $2,106 | | Discount rate | 9.0% | 9.0% | | Perpetual growth rate | 1.43% | 1.0% | Deferred Consideration and Revaluation (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Deferred consideration (carrying value) | $242,767 | $226,706 | $242,767 | $226,706 | | Contractual gold payments | $4,446 | $4,314 | $8,896 | $8,584 | | Gain/(loss) on revaluation of deferred consideration | $2,311 | $497 | $(14,707) | $3,329 | - The gain on revaluation for Q2 2022 was due to **lower spot gold prices**, partly offset by a steepening of the forward-looking gold curve. The six-month period saw a **loss due to increased forward-looking gold prices**[126](index=126&type=chunk) [Note 10. Convertible Notes](index=31&type=section&id=Note%2010.%20Convertible%20Notes) This note details the company's 2021 and 2020 Convertible Senior Notes, including their principal amounts, maturity dates, interest rates, conversion prices, and other key terms. It also provides the carrying value and fair value of these notes - The company has **$325.0 million in Convertible Notes** outstanding, comprising **$150.0 million of 3.25% notes due June 15, 2026**, and **$175.0 million of 4.25% notes due June 15, 2023**[129](index=129&type=chunk)[131](index=131&type=chunk) Convertible Notes Key Terms | Metric | 2021 Notes | 2020 Notes | | :-------------- | :------------ | :------------ | | Maturity date | June 15, 2026 | June 15, 2023 | | Interest rate | 3.25% | 4.25% | | Conversion price | $11.04 | $5.92 | Convertible Notes Carrying and Fair Value (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :-------------- | :------------ | :---------------- | | Carrying amount | $319,917 | $318,624 | | Fair value | $322,311 | $360,571 | - Interest expense on Convertible Notes increased by **45.4% YoY** for the three months and **53.5% YoY** for the six months ended June 30, 2022, due to a higher level of debt outstanding[136](index=136&type=chunk) [Note 11. Preferred Shares](index=34&type=section&id=Note%2011.%20Preferred%20Shares) This note describes the Series A Non-Voting Convertible Preferred Stock issued in connection with the ETFS Acquisition, outlining its economic rights, conversion limitations, and redemption features - The company issued **14,750 shares of Series A Non-Voting Convertible Preferred Stock**, convertible into **14,750,000 common shares**, with a carrying value of **$132.6 million**[140](index=140&type=chunk)[141](index=141&type=chunk) - The Preferred Shares have **no voting rights**, are not transferable, and have economic rights equivalent to common stock on an as-converted basis, but conversion is limited to prevent beneficial ownership exceeding **9.99% of outstanding common stock**[138](index=138&type=chunk)[139](index=139&type=chunk) Preferred Shares Redemption Value (in thousands) | Date | Redemption Value | | :------------ | :--------------- | | June 30, 2022 | $81,970 | | Dec 31, 2021 | $90,741 | [Note 12. Leases](index=35&type=section&id=Note%2012.%20Leases) This note provides details on the company's operating leases for corporate headquarters, office facilities, and equipment, including lease costs, cash payments, and future minimum lease payments Lease Costs (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $243 | $643 | $332 | $1,340 | | Short-term lease cost | $251 | $259 | $527 | $554 | | Total lease cost | $494 | $902 | $859 | $1,894 | Future Minimum Lease Payments (undiscounted, in thousands) | Period | Amount | | :---------------- | :----- | | Remainder of 2022 | $958 | | 2023 | $1,128 | | 2024 | $317 | | Total | $2,403 | - The weighted-average remaining lease term for operating leases is **1.8 years**, with a weighted-average discount rate of **6.3%** at June 30, 2022[145](index=145&type=chunk) [Note 13. Contingencies](index=36&type=section&id=Note%2013.%20Contingencies) This note discloses legal proceedings related to the closure of the WisdomTree WTI Crude Oil 3x Daily Leveraged ETP (3OIL), with investors seeking damages. The company is assessing these claims, and no accrual has been made as of June 30, 2022 - The company is facing legal actions in Italy from investors seeking damages related to the compulsory redemption of the **WisdomTree WTI Crude Oil 3x Daily Leveraged ETP (3OIL)** in March 2020[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - Total damages sought by all investors are approximately **€15.8 million ($16.6 million)** at June 30, 2022[152](index=152&type=chunk) - The Court of Udine ruled in the company's favor in **February 2022** for one of the cases[150](index=150&type=chunk) [Note 14. Variable Interest Entities](index=37&type=section&id=Note%2014.%20Variable%20Interest%20Entities) This note explains the company's variable interests in non-consolidated Variable Interest Entities (VIEs), primarily Securrency, Fnality, and Onramp, and clarifies that WisdomTree is not the primary beneficiary as it lacks control over their economic performance-impacting activities - The company holds variable interests in non-consolidated VIEs, including **Securrency, Fnality, and Onramp**, but is **not the primary beneficiary** as it does not have the power to direct their most significant economic activities[154](index=154&type=chunk)[155](index=155&type=chunk) Carrying Amount of Variable Interests in Non-Consolidated VIEs (in thousands) | Entity (Investment Type) | June 30, 2022 Carrying Amount | December 31, 2021 Carrying Amount | | :--------------------------------------- | :------------------------------ | :-------------------------------- | | Securrency (Preferred stock & convertible note) | $19,267 | $13,988 | | Fnality (Convertible note) | $6,433 | $— | | Onramp (Preferred stock) | $312 | $250 | | Total | $26,012 | $14,238 | | Maximum exposure to loss | $26,012 | $14,238 | [Note 15. Revenues from Contracts with Customers](index=38&type=section&id=Note%2015.%20Revenues%20from%20Contracts%20with%20Customers) This note details the company's revenue recognition policy, primarily from investment advisory agreements, and provides a geographic breakdown of total operating revenues - Substantially all revenues are derived from **investment advisory agreements** with related parties, recognized over time based on a percentage of ETPs' average daily net assets[158](index=158&type=chunk)[161](index=161&type=chunk) Total Operating Revenues (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Advisory fees | $75,586 | $74,169 | $152,103 | $144,211 | | Other income | $1,667 | $1,606 | $3,518 | $2,820 | | Total operating revenues | $77,253 | $75,775 | $155,621 | $147,031 | Geographic Distribution of Revenue (in thousands) | Region | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $45,807 | $44,522 | $92,036 | $85,221 | | Jersey | $27,811 | $28,812 | $56,409 | $57,228 | | Ireland | $3,635 | $2,441 | $7,176 | $4,582 | [Note 16. Related Party Transactions](index=39&type=section&id=Note%2016.%20Related%20Party%20Transactions) This note outlines the company's primary revenue source from investment advisory agreements with related parties, detailing receivables and advisory services provided to these entities, and also mentions investments in WisdomTree ETFs - Revenues are primarily from **investment advisory agreements with related parties**, where the company licenses its indexes and provides management services to U.S. WisdomTree ETFs and WisdomTree UCITS ETFs[161](index=161&type=chunk) Accounts Receivable from Related Parties (in thousands) | Related Party | June 30, 2022 | December 31, 2021 | | :------------------ | :------------ | :---------------- | | Receivable from WTT | $14,719 | $15,987 | | Receivable from ManJer Issuers | $5,871 | $6,460 | | Receivable from WMAI and WTI | $3,315 | $3,181 | | Total | $23,905 | $25,628 | Advisory Services Provided to Related Parties (in thousands) | Related Party | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | WTT | $45,670 | $44,442 | $91,740 | $84,978 | | ManJer Issuers | $26,282 | $25,065 | $53,187 | $50,536 | | WMAI and WTI | $3,634 | $4,662 | $7,176 | $8,697 | | Total | $75,586 | $74,169 | $152,103 | $144,211 | [Note 17. Stock-Based Awards](index=41&type=section&id=Note%2017.%20Stock-Based%20Awards) This note describes the company's equity award plan, including stock options, restricted stock awards (RSAs), restricted stock units (RSUs), and performance-based restricted stock units (PRSUs), and reports stock-based compensation expense and unrecognized amounts - The company grants **stock options, RSAs, RSUs, and PRSUs** to employees and directors, with PRSUs vesting based on **relative Total Shareholder Return (TSR)** compared to a peer group[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) Stock-Based Compensation Expense (in thousands) | Period | 2022 | 2021 | | :----------------------------------- | :------ | :------ | | Three months ended June 30 | $2,432 | $2,121 | | Six months ended June 30 | $5,368 | $5,264 | Unrecognized Stock-Based Compensation Expense | Metric | Amount (in thousands) | Average Remaining Vesting Period (Years) | | :----------------------------------- | :-------------------- | :--------------------------------------- | | Unrecognized Stock-Based Compensation | $17,044 | 1.90 | [Note 18. Stockholder Rights Plan](index=42&type=section&id=Note%2018.%20Stockholder%20Rights%20Plan) This note describes the adoption and subsequent termination of the company's stockholder rights plan (poison pill) in connection with a cooperation agreement - The Board of Directors adopted a **stockholder rights plan** on March 13, 2022, distributing one Preferred Stock Purchase Right per common share[172](index=172&type=chunk) - The rights plan expired on **June 2, 2022**, following a cooperation agreement with ETFS Capital and other parties[173](index=173&type=chunk) [Note 19. Earnings Per Share](index=42&type=section&id=Note%2019.%20Earnings%20Per%20Share) This note provides the reconciliation of basic and diluted earnings per share (EPS) computations, detailing the impact of participating securities and common stock equivalents Basic Earnings/(Loss) per Share (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income/(loss) available to common stockholders – Basic EPS | $7,099 | $15,698 | $(3,353) | $29,131 | | Weighted average common shares | 143,046 | 145,542 | 142,915 | 145,652 | | Basic earnings/(loss) per share | $0.05 | $0.11 | $(0.02) | $0.20 | Diluted Earnings/(Loss) per Share (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income/(loss) available to common stockholders – Diluted EPS | $7,100 | $15,725 | $(3,353) | $29,152 | | Weighted average diluted shares, excluding participating securities | 143,425 | 148,814 | 142,915 | 147,004 | | Diluted earnings/(loss) per share | $0.05 | $0.11 | $(0.02) | $0.20 | - For the six months ended June 30, 2022, there were **no dilutive common stock equivalents** due to the reported net loss[175](index=175&type=chunk) [Note 20. Income Taxes](index=44&type=section&id=Note%2020.%20Income%20Taxes) This note details the company's effective income tax rates, deferred tax assets and liabilities, net operating and capital losses, valuation allowance, and uncertain tax positions. It highlights the impact of a reduction in unrecognized tax benefits on the six-month effective tax rate Effective Income Tax Rate | Period | Effective Tax Rate | | :----------------------------------- | :----------------- | | Three months ended June 30, 2022 | 25.0% | | Six months ended June 30, 2022 | 86.2% (benefit) | | Three months ended June 30, 2021 | 19.5% | | Six months ended June 30, 2021 | 6.5% | - The six months ended June 30, 2022, saw an **86.2% income tax benefit**, primarily due to a **$19.9 million reduction in unrecognized tax benefits** (including interest and penalties) and a lower tax rate on foreign earnings[179](index=179&type=chunk)[193](index=193&type=chunk) Deferred Tax Assets, Net (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :------------------------- | :------------ | :---------------- | | Total deferred tax assets | $28,149 | $28,094 | | Total deferred tax liabilities | $771 | $556 | | Less: Valuation allowance | $(21,311) | $(18,657) | | Deferred tax assets, net | $6,067 | $8,881 | - Unrecognized tax benefits, including interest and penalties, totaled **$1.35 million** at June 30, 2022, and are reasonably possible to reduce to zero in the next 12 months[189](index=189&type=chunk) [Note 21. Shares Repurchased](index=47&type=section&id=Note%2021.%20Shares%20Repurchased) This note details the company's share repurchase program, including the board's approval for an increased authorization and the number of shares repurchased during the periods - The board approved an increase of **$85.7 million** to the share repurchase program, bringing the total authorization to **$100.0 million**, extended through April 27, 2025[194](index=194&type=chunk) Shares Repurchased | Period | Shares Repurchased | Aggregate Cost (in thousands) | | :----------------------------------- | :----------------- | :---------------------------- | | Three months ended June 30, 2022 | 588,694 | $3,394 | | Six months ended June 30, 2022 | 588,694 | $3,394 | | Three months ended June 30, 2021 | 4,630,733 | $31,876 | | Six months ended June 30, 2021 | 5,120,496 | $34,506 | - As of June 30, 2022, **$100.0 million** remained available under the repurchase program[196](index=196&type=chunk) [Note 22. Goodwill and Intangible Assets](index=47&type=section&id=Note%2022.%20Goodwill%20and%20Intangible%20Assets) This note provides a summary of goodwill and intangible assets, including their carrying values, impairment testing policies, and expected amortization for finite-lived assets Goodwill and Intangible Assets (in thousands) | Asset Category | June 30, 2022 | January 1, 2022 | | :-------------------- | :------------ | :-------------- | | Goodwill | $85,856 | $85,856 | | ETFS acquisition (Indefinite-Lived) | $601,247 | $601,247 | | Software development (Finite-Lived) | $724 | $— | | Total | $601,971 | $601,247 | - Goodwill and indefinite-lived intangible assets are tested for impairment annually on **November 30th**[197](index=197&type=chunk)[199](index=199&type=chunk) Expected Amortization Expense for Finite-Lived Intangible Assets (in thousands) | Period | Amount | | :---------------- | :----- | | Remainder of 2022 | $105 | | 2023 | $241 | | 2024 | $241 | | 2025 | $137 | | Total | $724 | [Note 23. Contingent Payments](index=48&type=section&id=Note%2023.%20Contingent%20Payments) This note discusses potential future contingent payments from the sale of financial interests in AdvisorEngine and the Canadian ETF business, which are dependent on achieving specific revenue or AUM growth targets - The company may receive up to **$10.4 million** in contingent payments from the sale of AdvisorEngine Inc., dependent on revenue milestones through the fourth anniversary of the exit[201](index=201&type=chunk) - Additional cash consideration of **CDN $0 to $4.0 million** may be received from the sale of the Canadian ETF business, based on AUM growth targets at the 36-month anniversary of the closing date[203](index=203&type=chunk) - **No value** has been ascribed to these contingent payments as of June 30, 2022, and no payments were received during the reported periods[201](index=201&type=chunk)[203](index=203&type=chunk) [Note 24. Subsequent Events](index=48&type=section&id=Note%2024.%20Subsequent%20Events) This note reports subsequent events after the reporting period, including stockholder approval to increase authorized common stock and the adoption of a new equity plan - On July 15, 2022, stockholders approved an amendment to increase authorized common stock from **250 million to 400 million shares**[205](index=205&type=chunk) - Stockholders also approved the **2022 Equity Plan**, authorizing the issuance of up to **16 million shares** of common stock for stock-based awards[207](index=207&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, including an executive summary of its business, market environment, operating results, expense guidance, non-GAAP financial measures, liquidity, capital resources, and critical accounting policies [Executive Summary](index=49&type=section&id=Executive%20Summary) This section provides an overview of WisdomTree's business, market environment, and key financial and operational highlights for the period - **WisdomTree** is a global ETP sponsor and asset manager with **$74.3 billion in AUM** as of June 30, 2022, expanding into blockchain technology and digital assets[210](index=210&type=chunk) - The company is developing **WisdomTree Prime™**, a digital wallet for saving, spending, and investing in native crypto assets and tokenized mainstream financial assets, and plans to launch asset- and fund-tokenization products[212](index=212&type=chunk) - During Q2 2022, global markets faced pressure from **interest rate rises and recession risk**, with U.S. and European equities falling, while gold showed steady performance[214](index=214&type=chunk)[215](index=215&type=chunk) Assets Under Management (AUM) (in millions) | Metric | June 30, 2022 | March 31, 2022 | June 30, 2021 | | :---------------------- | :------------ | :------------- | :------------ | | Global ETPs End of Period AUM | $74,297 | $79,390 | $73,923 | | U.S. Listed ETFs End of Period AUM | $47,255 | $48,622 | $45,129 | | European Listed ETPs End of Period AUM | $27,042 | $30,768 | $28,794 | - U.S. listed ETFs' AUM decreased from **$48.6 billion to $47.3 billion** in Q2 2022 due to market depreciation, partly offset by net inflows[220](index=220&type=chunk) - European listed ETPs' AUM decreased from **$30.8 billion to $27.0 billion** in Q2 2022 due to market depreciation and net outflows[222](index=222&type=chunk) [Consolidated Operating Results](index=53&type=section&id=Consolidated%20Operating%20Results) This section presents a summary of the company's operating revenues, expenses, and net income over recent quarters Consolidated Operating Results (in millions) | Metric | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | | :--------------------- | :------ | :------ | :------ | :------ | :------ | | Operating Revenues | $77.3 | $78.4 | $79.0 | $78.0 | $75.8 | | Operating Expenses | $61.4 | $60.7 | $60.0 | $57.0 | $52.1 | | Operating Income | $15.8 | $17.7 | $19.0 | $21.0 | $23.7 | | Net Income/(Loss) | $8.0 | $(10.3) | $14.0 | $15.0 | $17.6 | - Operating revenues for Q2 2022 increased by **2.0% YoY to $77.3 million**, driven by higher average AUM, partly offset by a lower average advisory fee[227](index=227&type=chunk) - Total operating expenses increased by **18.0% YoY to $61.4 million** in Q2 2022, primarily due to higher incentive compensation, headcount, professional fees (including **$2.0 million for an activist campaign**), and sales/business development expenses[227](index=227&type=chunk) - Net income for Q2 2022 was **$8.0 million**, down from **$17.6 million** in Q2 2021[227](index=227&type=chunk) [Expense Guidance Update for the Year Ending December 31, 2022](index=53&type=section&id=Expense%20Guidance%20Update%20for%20the%20Year%20Ending%20December%2031%2C%202022) This section provides updated financial guidance for key expense categories for the fiscal year ending December 31, 2022 Updated Expense Guidance for FY2022 (in millions) | Expense Category | Previous Guidance | Updated Guidance | | :--------------------------- | :---------------- | :--------------- | | Compensation expense | $92.0 - $102.0 | $96.0 - $99.0 | | Discretionary spending | $49.0 - $57.0 | $51.0 - $53.0 | | Contractual gold payments | $18.0 - $19.0 | ~$17.0 | | Third-party distribution expense | ~$9.5 | ~$8.5 | - The high-end of compensation expense guidance was **reduced** due to tempered hiring plans amid uncertain market conditions[225](index=225&type=chunk) - Contractual gold payments guidance was **lowered** due to current lower gold prices[229](index=229&type=chunk) - Third-party distribution expense guidance was **lowered** due to market volatility suppressing AUM growth on third-party platforms[230](index=230&type=chunk) - **Non-recurring expenses of $4.5 million** were incurred during the six months ended June 30, 2022, in response to an activist campaign, not included in guidance[227](index=227&type=chunk) [Gross Margin](index=54&type=section&id=Gross%20Margin) This section provides the estimated gross margin percentage for the current fiscal year - The estimated gross margin percentage for the year ending December 31, 2022, is **79%**, a decrease from the previously estimated 80% to 81%[228](index=228&type=chunk) [Income Tax Expense](index=54&type=section&id=Income%20Tax%20Expense) This section outlines the estimated consolidated normalized effective tax rate for the current fiscal year - The consolidated normalized effective tax rate for the year ending December 31, 2022, is estimated to range from **21% to 22%**, unchanged from prior guidance[231](index=231&type=chunk) [Key Operating Statistics](index=54&type=section&id=Key%20Operating%20Statistics) This section presents key operational metrics for global ETPs, including assets under management, inflows, and advisory fees Global ETPs Key Operating Statistics (in millions, except for fee) | Metric | Q2 2022 | Q1 2022 | Q2 2021 | YTD 2022 | YTD 2021 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Beginning of period assets | $79,390 | $77,456 | $69,515 | $77,456 | $67,383 | | Inflows/(outflows) | $3,852 | $1,319 | $931 | $5,171 | $2,210 | | Market appreciation/(depreciation) | $(8,941) | $615 | $3,481 | $(8,326) | $4,334 | | End of period assets | $74,297 | $79,390 | $73,923 | $74,297 | $73,923 | | Average assets during the period | $77,731 | $77,794 | $73,603 | $77,763 | $71,581 | | Average ETP advisory fee during the period | 0.39% | 0.40% | 0.40% | 0.39% | 0.42% | | Number of ETPs—end of period | 346 | 341 | 318 | 346 | 318 | | Headcount | 264 | 253 | 227 | 264 | 227 | - Global ETPs experienced significant market depreciation of **$(8,941) million** in Q2 2022, leading to a decrease in end-of-period assets despite positive inflows[232](index=232&type=chunk) - The average ETP advisory fee decreased from **0.40%** in Q2 2021 to **0.39%** in Q2 2022[232](index=232&type=chunk) [Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021](index=56&type=section&id=Three%20Months%20Ended%20June%2030%2C%202022%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202021) This section provides a detailed comparative analysis of the company's operating and financial performance for the three months ended June 30, 2022, versus the prior year Selected Operating and Financial Information (Three Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Change | % Change | | :---------------------- | :-------- | :-------- | :-------- | :------- | | Average AUM | $77,731 | $73,603 | $4,128 | 5.6% | | Advisory fees | $75,586 | $74,169 | $1,417 | 1.9% | | Other income | $1,667 | $1,606 | $61 | 3.8% | | Total revenues | $77,253 | $75,775 | $1,478 | 2.0% | - Average AUM increased by **5.6% YoY**, contributing to a **1.9% increase in advisory fees**, despite a lower average advisory fee (**0.39% vs. 0.40%**)[235](index=235&type=chunk)[236](index=236&type=chunk) Operating Expenses (Three Months Ended June 30, in thousands) | Expense Category | 2022 | 2021 | Change | % Change | | :-------------------------------- | :-------- | :-------- | :-------- | :------- | | Compensation and benefits | $24,565 | $20,331 | $4,234 | 20.8% | | Fund management and administration | $16,076 | $14,367 | $1,709 | 11.9% | | Marketing and advertising | $3,894 | $3,594 | $300 | 8.3% | | Sales and business development | $3,131 | $2,159 | $972 | 45.0% | | Contractual gold payments | $4,446 | $4,314 | $132 | 3.1% | | Professional fees | $4,308 | $1,921 | $2,387 | 124.3% | | Occupancy, communications and equipment | $1,049 | $1,266 | $(217) | (17.1%) | | Depreciation and amortization | $53 | $256 | $(203) | (79.3%) | | Third-party distribution fees | $1,818 | $2,130 | $(312) | (14.6%) | | Other | $2,109 | $1,752 | $357 | 20.4% | | Total operating expenses | $61,449 | $52,090 | $9,359 | 18.0% | - Professional fees surged by **124.3% YoY** due to expenses from an activist campaign[245](index=245&type=chunk) Other Income/(Expenses) (Three Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Change | % Change | | :----------------------------------------- | :-------- | :-------- | :--------- | :------- | | Interest expense | $(3,733) | $(2,567) | $(1,166) | 45.4% | | Gain on revaluation of deferred consideration – gold payments | $2,311 | $497 | $1,814 | 365.0% | | Interest income | $770 | $225 | $545 | 242.2% | | Other losses and gains, net | $(4,474) | $49 | $(4,523) | n/a | | Total other expenses, net | $(5,126) | $(1,796) | $(3,330) | 185.4% | - Other losses and gains, net, shifted from a slight gain to a **$4.5 million loss**, primarily due to **$4.2 million in losses on securities owned**[254](index=254&type=chunk) [Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021](index=59&type=section&id=Six%20Months%20Ended%20June%2030%2C%202022%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202021) This section provides a detailed comparative analysis of the company's operating and financial performance for the six months ended June 30, 2022, versus the prior year Selected Operating and Financial Information (Six Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Change | % Change | | :---------------------- | :-------- | :-------- | :-------- | :------- | | Average global AUM | $77,763 | $71,581 | $6,182 | 8.6% | | Advisory fees | $152,103 | $144,211 | $7,892 | 5.5% | | Other income | $3,518 | $2,820 | $698 | 24.8% | | Total revenues | $155,621 | $147,031 | $8,590 | 5.8% | - Average global AUM increased by **8.6% YoY**, leading to a **5.5% increase in advisory fees**, despite a lower average global advisory fee (**0.39% vs. 0.42%**)[258](index=258&type=chunk)[259](index=259&type=chunk) Operating Expenses (Six Months Ended June 30, in thousands) | Expense Category | 2022 | 2021 | Change | % Change | | :-------------------------------- | :-------- | :-------- | :-------- | :------- | | Compensation and benefits | $49,352 | $42,958 | $6,394 | 14.9% | | Fund management and administration | $31,570 | $28,314 | $3,256 | 11.5% | | Marketing and advertising | $7,917 | $6,600 | $1,317 | 20.0% | | Sales and business development | $5,740 | $4,304 | $1,436 | 33.4% | | Contractual gold payments | $8,896 | $8,584 | $312 | 3.6% | | Professional fees | $8,767 | $3,934 | $4,833 | 122.9% | | Occupancy, communications and equipment | $1,802 | $2,741 | $(939) | (34.3%) | | Depreciation and amortization | $100 | $508 | $(408) | (80.3%) | | Third-party distribution fees | $4,030 | $3,473 | $557 | 16.0% | | Other | $3,954 | $3,323 | $631 | 19.0% | | Total operating expenses | $122,128 | $104,739 | $17,389 | 16.6% | - Professional fees increased by **122.9% YoY**, largely due to expenses incurred in response to an activist campaign[268](index=268&type=chunk) Other Income/(Expenses) (Six Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Change | % Change | | :----------------------------------------- | :-------- | :-------- | :---------- | :------- | | Interest expense | $(7,465) | $(4,863) | $(2,602) | 53.5% | | (Loss)/gain on revaluation of deferred consideration – gold payments | $(14,707) | $3,329 | $(18,036) | n/a | | Interest income | $1,564 | $456 | $1,108 | 243.0% | | Impairments | $— | $(303) | $303 | (100.0%) | | Other losses, net | $(29,181) | $(5,844) | $(23,337) | 399.3% | | Total other expenses, net | $(49,789) | $(7,225) | $(42,564) | 589.1% | - A significant **loss of $(14.7) million** was recognized on revaluation of deferred consideration, compared to a **$3.3 million gain** in the prior year, primarily due to an increase in forward-looking gold prices[275](index=275&type=chunk) - Other losses, net, increased substantially due to a **$19.9 million non-cash charge** from the release of a tax-related indemnification asset and **$9.3 million in losses on securities owned**[278](index=278&type=chunk) [Non-GAAP Financial Measurements](index=62&type=section&id=Non-GAAP%20Financial%20Measurements) This section presents non-GAAP financial measures, such as Adjusted Net Income and Adjusted Diluted Earnings per Share, to provide a clearer view of core operational performance by excluding certain non-recurring or non-cash items - The company provides **Adjusted Net Income** and **Adjusted Diluted Earnings per Share** as non-GAAP measures to exclude non-recurring or non-core items, offering a consistent view of performance[282](index=282&type=chunk)[283](index=283&type=chunk) - Excluded items include unrealized gains/losses on revaluation of deferred consideration, gains/losses on securities owned, tax shortfalls/windfalls from stock-based compensation, unrealized gains/losses on investments, changes in deferred tax asset valuation allowance, **activist campaign expenses**, and impairment charges[283](index=283&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk) Adjusted Net Income and Diluted EPS (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income/(loss), as reported | $8,005 | $17,630 | $(2,256) | $32,777 | | Adjusted net income | $11,257 | $16,795 | $25,320 | $29,299 | | Adjusted net income available to common stockholders | $9,985 | $14,980 | $22,460 | $26,058 | | Adjusted earnings per share – diluted | $0.07 | $0.10 | $0.16 | $0.18 | [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's financial liquidity, capital resources, and ability to meet its short-term and long-term obligations, including cash flows, debt, and critical accounting policies Liquidity and Capital Resources (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :--------------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $109,736 | $140,709 | | Securities owned, at fair value | $128,852 | $127,166 | | Accounts receivable | $34,061 | $31,864 | | Securities held-to-maturity | $277 | $308 | | Total: Liquid assets | $272,926 | $300,047 | | Less: Total current liabilities (excl. conv. notes) | $(68,298) | $(83,667) | | Less: Regulatory capital requirement | $(25,450) | $(12,320) | | Total: Available liquidity | $179,178 | $204,060 | - Available liquidity decreased by **$24.9 million** from December 31, 2021, to June 30, 2022, primarily due to a decrease in cash and cash equivalents[289](index=289&type=chunk) - The company's principal source of financing is **operating cash flow**, which is expected to be sufficient for foreseeable operations[301](index=301&type=chunk) - Key uses of cash include funding ongoing operations, a **$0.03 per share quarterly cash dividend**, and share repurchases (with **$100 million remaining** under the program)[303](index=303&type=chunk)[304](index=304&type=chunk) - The company has **$325.0 million in Convertible Notes** outstanding, with **$175.0 million maturing on June 15, 2023**, and is actively exploring refinancing and extension alternatives[305](index=305&type=chunk)[307](index=307&type=chunk) - The deferred consideration obligation for gold payments was **$242.8 million** at June 30, 2022, paid from advisory fee income from physically-backed gold ETPs[309](index=309&type=chunk)[310](index=310&type=chunk) - Total future minimum lease payments for office space were **$2.4 million** at June 30, 2022[313](index=313&type=chunk) - The company does not have any **off-balance sheet financing arrangements**[314](index=314&type=chunk) - Critical accounting policies include **goodwill and intangible assets impairment testing, investments valuation, deferred consideration for gold payments, and revenue recognition**[315](index=315&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk)[322](index=322&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to various market risks, including those related to ETP values, interest rates, foreign currency exchange rates, and commodity/cryptocurrency prices, and outlines its current approach to managing these risks - Market risk primarily stems from fluctuations in ETP values due to **securities/commodity prices, foreign currency exchange rates, and interest rates**, directly impacting advisory fee revenues[324](index=324&type=chunk) - The company invests corporate cash in short-term interest-earning assets, recognizing **$9.3 million in losses** on these securities during the six months ended June 30, 2022[326](index=326&type=chunk) - Foreign currency translation exposure exists for non-U.S. operations, particularly in the **UK and Europe**, with expenses incurred in British pounds while advisory fees are predominantly in U.S. dollars[328](index=328&type=chunk) - Commodity and cryptocurrency price risk affects AUM and revenues, as a portion of advisory fees for physically-backed ETPs are paid in the underlying metal or cryptocurrency. The company currently **does not hedge** against these fluctuations[330](index=330&type=chunk) [ITEM 4. Controls and Procedures](index=68&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2022, and states that there were no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that **disclosure controls and procedures were effective** at a reasonable assurance level as of June 30, 2022[331](index=331&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter ended June 30, 2022[332](index=332&type=chunk) [PART II: OTHER INFORMATION](index=68&type=section&id=PART%20II%3A%20OTHER%20INFORMATION) This part provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and other corporate disclosures [ITEM 1. Legal Proceedings](index=68&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to ongoing legal proceedings, specifically investor claims related to the closure of the WisdomTree WTI Crude Oil 3x Daily Leveraged ETP, with total damages sought of approximately €15.8 million ($16.6 million) - The company is subject to legal proceedings, including investor claims totaling approximately **€15.8 million ($16.6 million)** related to the closure of the **WisdomTree WTI Crude Oil 3x Daily Leveraged ETP**[334](index=334&type=chunk) [ITEM 1A. Risk Factors](index=68&type=section&id=ITEM%201A.%20Risk%20Factors) This section highlights a key risk factor: the potential failure to repay, refinance, or extend the maturity of the company's $175.0 million 2020 Notes due June 15, 2023, which could have a material adverse effect on the business - A significant risk is the potential failure to repay, refinance, or extend the maturity of the **$175.0 million 2020 Notes due June 15, 2023**[336](index=336&type=chunk) - The ability to manage this debt depends on company performance and general economic factors, and **failure could lead to an event of default**[336](index=336&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no recent unregistered sales of equity securities and provides details on the company's share repurchase program, including the remaining authorization - **No unregistered sales of equity securities** occurred during the reporting period[337](index=337&type=chunk) - The company's board approved an increase of **$85.7 million** to its share repurchase program, bringing the total authorization to **$100.0 million**, extended through April 27, 2025[340](index=340&type=chunk) Share Repurchase Program Status (in thousands) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Dollar Value of Shares that May Yet Be Purchased | | :----------------------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------- | | April 1, 2022 to June 30, 2022 | — | $— | $100,000 | [ITEM 3. Default Upon Senior Securities](index=69&type=section&id=ITEM%203.%20Default%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - **No defaults upon senior securities** occurred[341](index=341&type=chunk) [ITEM 4. Mine Safety Disclosures](index=69&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are **not applicable** to the registrant[342](index=342&type=chunk) [ITEM 5. Other Information](index=69&type=section&id=ITEM%205.%20Other%20Information) This section details amendments to the company's By-Laws, effective August 1, 2022, which include revisions to nomination provisions, implementation of proxy access, changes to Board meeting procedures, and establishment of exclusive forum provisions for certain legal actions - The company's By-Laws were amended, effective **August 1, 2022**, to enhance informational and procedural requirements for stockholder nominations and proposals, including changes to address **Rule 14a-19 of the Exchange Act**[343](index=343&type=chunk) - **Proxy access** was implemented, allowing stockholders owning at least **3% of common stock for three years** to nominate up to the greater of two directors or **25% of the Board**[343](index=343&type=chunk) - Other amendments include changes to Board meeting call procedures, quorum requirements, stock certification, By-Law amendment process, and establishing **federal district courts as the exclusive forum** for Securities Act and Exchange Act claims[343](index=343&type=chunk) [ITEM 6. Exhibits](index=72&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, convertible note indentures, equity plans, and certifications - Exhibits include the **Third Amended and Restated By-Laws**, various certificates of incorporation, convertible note indentures, the **2022 Equity Plan**, and **Rule 13a-14(a)/15d-14(a) certifications**[346](index=346&type=chunk)[347](index=347&type=chunk) [SIGNATURE](index=74&type=section&id=SIGNATURE) This section contains the signatures of the Chief Executive Officer and Chief Financial Officer, certifying the filing of the report - The report is signed by **Jonathan Steinberg, Chief Executive Officer**, and **Bryan Edmiston, Chief Financial Officer**, on August 5, 2022[350](index=350&type=chunk)[352](index=352&type=chunk)

1- 39 Q2/22 Results July 29, 2022 WisdomTree® -------------------- Forward looking statements This presentation 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 fact ...