WisdomTree(WT) - 2024 Q4 - Annual Results

Financial Performance - Diluted earnings per share for Q4 2024 was $0.18, with adjusted earnings per share at $0.17, reflecting a 73% increase in adjusted EPS year-over-year[1][9] - Net income for Q4 2024 was $27.3 million, compared to a net loss of $4.5 million in Q3 2024[21] - Net income for 2024 was $66,693, a decrease of 34.9% compared to $102,546 in 2023[37] - Adjusted net income for Q4 2024 was $25,280 million, compared to $18,566 million in Q4 2023, reflecting a year-over-year increase of 36.2%[49] - The company reported a net income of $27,308 million for Q4 2024, a significant recovery from a loss of $4,485 million in Q3 2024[49] Revenue and Expenses - Operating revenues for Q4 2024 were $110.7 million, down 2.2% from the previous quarter due to lower other revenues related to a legal settlement[4][13] - Operating revenues decreased by 2.2% from Q3 2024, totaling $110.7 million, primarily due to lower other revenues related to the SEC ESG Settlement[21] - Operating revenues increased by 21.9% compared to Q4 2023, driven by higher average AUM and increased other revenues from European listed ETPs[21] - Total operating expenses for Q4 2024 were $75,657 million, an increase from $64,809 million in Q4 2023, marking a rise of 16.7%[50] - Operating expenses rose by 4.5% from Q3 2024, totaling $75.7 million, due to seasonally higher discretionary spending and non-recurring costs related to BNY Custody Migration[21] Assets Under Management (AUM) - Ending assets under management (AUM) were $109.8 billion, a decrease of 2.5% from the prior quarter, with net outflows of $0.3 billion primarily from emerging markets and fixed income products[2][13] - WisdomTree reported approximately $113.5 billion in assets under management globally[26] - As of December 31, 2024, WisdomTree's global ETP assets decreased to $109,779 million from $112,577 million at the end of the previous quarter, reflecting a market depreciation of $2,517 million[32] - The average assets during the period for global ETPs were $112,349 million, compared to $110,369 million in the previous quarter, indicating a growth of approximately 1.8%[32] Client Engagement and Product Development - WisdomTree's client base grew by 5%, with a 4% increase in the number of products held by each client, indicating enhanced client engagement[11][12] - WisdomTree launched several new products in January 2025, including the WisdomTree Strategic Metals UCITS ETF and made its model portfolios available on UBS Financial Services[15] - The company aims to leverage increased client engagement and strategic innovation to drive top-line growth in 2025[9] Market Trends and Risks - The company anticipates trends in global markets and ETPs, including expected inflows and outflows[52] - The company faces risks from declining prices of securities and commodities, which may reduce the market value of managed assets[52] - A significant portion of the company's revenues is derived from a limited number of products, exposing operating results to investor sentiment and market risks[52] - The company is subject to currency exchange rate risks due to a substantial portion of AUM being held in products with exposure to developed markets[52] Legal and Regulatory Matters - The company incurred $4.3 million in legal expenses related to the SEC ESG Settlement, expected to be covered by insurance[40] - The company is expanding its digital assets product offerings and services beyond its existing ETP business, increasing operational and regulatory risks[52] Dividends and Shareholder Actions - A quarterly dividend of $0.03 was declared, payable on February 26, 2025[7] - The company repurchased Series A Non-Voting Convertible Preferred Stock for $143,812 during the year[37] - Actions of activist stockholders may disrupt the strategic direction of the company and cause uncertainty[52]