WisdomTree(US:WT)2023-08-04 21:17Assets Under Management (AUM) - As of June 30, 2023, the company has approximately $93.7 billion in Assets Under Management (AUM) across a diversified suite of ETPs[216] - The AUM of U.S. listed ETFs increased from $61.3 billion at March 31, 2023 to $65.9 billion at June 30, 2023, reflecting net inflows and market appreciation[228] - The AUM of European listed ETPs decreased from $29.5 billion at March 31, 2023 to $27.8 billion at June 30, 2023, due to net outflows and market depreciation[230] - Average assets under management (AUM) increased by 17.8% from $77,738 million in Q2 2022 to $91,578 million in Q2 2023[247] - Average AUM increased by 15.1% from $77.8 billion in H1 2022 to $89.5 billion in H1 2023[268] Revenues - Total revenues for the three months ended June 30, 2023, increased by 11.0% to $85.7 million compared to the same period in 2022, primarily driven by higher average AUM[236] - Total revenues increased by 11.0% from $77,253 thousand in Q2 2022 to $85,724 thousand in Q2 2023[247] - Total revenues for H1 2023 were $167.8 million, up 7.8% from $155.6 million in H1 2022, with advisory fees increasing by 5.0%[268][269] Operating Expenses - Total operating expenses for the same period increased by 9.9% to $67.5 million, mainly due to higher professional fees related to an activist campaign and increased headcount[236] - Total operating expenses rose by 9.9% from $61.4 million in Q2 2022 to $67.5 million in Q2 2023, with significant increases in professional fees (93.5%) and marketing and advertising (14.7%) expenses[250][256][253] - Compensation and benefits expense increased 7.1% from $24.6 million in Q2 2022 to $26.3 million in Q2 2023, driven by increased headcount and higher stock-based compensation[251] - Fund management and administration expenses grew by 10.3% from $16.1 million in Q2 2022 to $17.7 million in Q2 2023, attributed to higher average AUM and product launches[252] Net Income and Margins - The company reported a net income of $54.3 million for the three months ended June 30, 2023, compared to $8.0 million in the same period of 2022[236] - The gross margin for the six months ended June 30, 2023, was 79.2%, with guidance for the full year estimated at 79%[236] Shareholder Returns and Capital Management - The company maintains a capital return program, which includes a quarterly cash dividend of $0.03 per share[311] - The company repurchased 631,087 shares of common stock for an aggregate cost of $3.5 million during the six months ended June 30, 2023, with approximately $96.4 million remaining under the repurchase program[312] Debt and Liquidity - Total available liquidity decreased from $112.96 million as of December 31, 2022, to $77.61 million as of June 30, 2023[297] - The company issued $130.0 million in 5.75% Convertible Senior Notes due 2028 on February 14, 2023, as part of a private offering[301] - The company repurchased $115.0 million of 2020 Notes, resulting in a loss on extinguishment of approximately $9.7 million during the six months ended June 30, 2023[305] - The company expects that current cash flows from operating activities and existing cash balances will be sufficient to fund operations for the foreseeable future[310] Tax and Other Income - Effective income tax rate for Q2 2023 was 6.1%, resulting in an income tax expense of $3.6 million, significantly lower than the federal statutory rate of 21%[266] - Other income increased 123.2% from $1.7 million in Q2 2022 to $3.7 million in Q2 2023, primarily due to large flows into European products[249] Market Conditions and Risks - The company anticipates that challenging and volatile market conditions will persist in the foreseeable future, potentially affecting investor behavior[330] - Fluctuations in the value of ETPs are influenced by market volatility, global economic conditions, and investor sentiment, which may impact revenues[330] - The company does not currently hedge against fluctuations in commodity and cryptocurrency prices, which could adversely affect AUM and revenues[335] - The company is exposed to currency translation risk primarily from its non-U.S. operations in the UK and Europe, with advisory fees predominantly earned in U.S. dollars[333]