WisdomTree(WT) - 2025 Q2 - Quarterly Results

Assets Under Management (AUM) - Record AUM of $126.1 billion, an increase of 8.9% from the prior quarter due to market appreciation and net inflows[3] - WisdomTree reported approximately $128.5 billion in assets under management globally[25] - Average assets during the period for U.S. listed ETFs reached $81,525 million, compared to $80,661 million in the previous quarter, indicating a growth of 1.07%[29] - Digital assets saw an end of period asset value of $350 million as of June 30, 2025, a substantial increase from $132 million at the beginning of the period[29] Net Inflows and Revenue - Net inflows of $3.5 billion, primarily driven by international developed equity and U.S. equity products, with European listed ETP inflows of $2.2 billion during the quarter[3] - Operating revenues of $112.6 million, a 4.2% increase from the prior quarter attributed to higher average AUM[6] - Operating revenues for Q2 2025 reached $112,621 million, up from $108,082 million in Q1 2025, indicating a 4.7% increase[48] - Adjusted net income for Q2 2025 was $25,863 million, an increase from $23,014 million in Q1 2025, representing a 12.1% quarter-over-quarter growth[48] Earnings and Profitability - Diluted earnings per share of $0.17, with adjusted earnings per share of $0.18[1][2] - Gross margin improved to 81.1%, a 0.3 point increase from the prior quarter[7] - Adjusted earnings per share for Q2 2025 was $0.18, up from $0.16 in Q1 2025, reflecting a 12.5% increase[48] - Net income for Q2 2025 was $24.8 million, compared to $24.6 million in Q1 2025 and $27.3 million in Q2 2024, with diluted earnings per share at $0.17[23] Operating Expenses - Operating expenses rose by 5.5% from Q1 2025 and by 6.1% from Q2 2024, primarily due to acquisition-related costs and higher third-party distribution fees, partially offset by lower compensation expenses[23] - Total operating expenses for Q2 2025 were $77,989 million, up from $73,920 million in Q1 2025, a rise of 5.6%[49] - The company experienced a 6.7% increase in operating expenses compared to 2024, mainly due to higher stock-based compensation and increased headcount[23] Taxation - The effective income tax rate for Q2 2025 was 22.3%, resulting in an income tax expense of $7.1 million, differing from the federal statutory rate of 21.0% due to state and local taxes[23] - The adjusted effective income tax rate for 2025 was 23.5%[23] - Adjusted effective income tax rate for Q2 2025 was 23.5%, slightly lower than 25.6% in Q1 2025, indicating improved tax efficiency[49] Strategic Initiatives - Acquisition of Ceres Partners, expected to raise at least $750 million by 2030 and manage roughly $10 billion in farmland assets over the next decade[10] - The company is pursuing the acquisition of Ceres Partners, LLC, with expected strategic benefits and potential earnings accretion[50] - WisdomTree continues to innovate with next-generation digital products and services, including tokenized real-world assets and a blockchain-native digital wallet[24] - The company aims to enhance its digital assets and blockchain-enabled financial services, including WisdomTree Prime® and WisdomTree Connect™[51] Market Trends and Risks - Anticipated trends in global markets and ETPs may influence inflows and outflows, impacting overall performance[51] - A significant portion of revenues is derived from a limited number of products, making operating results sensitive to investor sentiment and market performance[51] - The company faces risks related to international operations and the expansion of digital asset offerings, which may increase operational and regulatory challenges[52] - The company is exposed to currency exchange rate risks due to a substantial portion of AUM being held in products linked to developed markets[51] Financial Position - Total current liabilities increased to $243,853,000 as of June 30, 2025, compared to $109,197,000 at December 31, 2024, indicating a significant rise[34] - Retained earnings grew to $170,412,000 as of June 30, 2025, up from $129,823,000 at December 31, 2024, marking an increase of approximately 31.2%[34] - Total assets increased to $1,066,877,000 as of June 30, 2025, up from $1,033,540,000 at December 31, 2024, representing a growth of approximately 3.3%[34] Cash Flow - Net cash provided by operating activities increased to $45,176,000, up from $31,172,000 year-over-year, reflecting a growth of 45%[36] - Total cash, cash equivalents, and restricted cash at the end of the period was $193,673,000, up from $132,459,000, representing a 46% increase[36] - Net cash used in investing activities was $16,712,000, compared to $9,699,000 in the prior year, showing a 72% increase in cash outflow[36] - Common stock repurchased amounted to $12,714,000, an increase of 63% from $7,820,000 in the previous year[36] Other Financial Metrics - Other gains and losses for Q2 2025 included a net gain of $0.6 million, with significant contributions from financial instruments and investments, offset by foreign currency remeasurement losses[23] - The company reported a loss of $11,375,000 due to the repurchase of Series A Non-Voting Convertible Preferred Stock, impacting the earnings per share calculation[27] - The company incurred acquisition-related costs of $1,967 million in Q2 2025, which were deducted from total operating expenses[49] - The company reported gains on financial instruments owned at fair value of $(844,000), compared to $(1,772,000) in the previous year, indicating improved performance in this area[36] Forward-Looking Statements - Forward-looking statements are subject to change based on future events and developments, with no current intention to update them unless required by law[53]