WisdomTree(US:WT)2025-10-31 12:00Assets Under Management (AUM) - Record AUM of $137.2 billion, an increase of 8.8% from the prior quarter driven by market appreciation and net inflows[4] - WisdomTree currently has approximately $138.4 billion in assets under management globally, including assets from the recent acquisition of Ceres Partners, LLC[27] - For the three months ended September 30, 2025, inflows amounted to $2.237 billion, while market appreciation contributed $8.868 billion, resulting in end-of-period assets of $137.175 billion[34] - U.S. listed ETFs saw an end-of-period asset increase to $88.293 billion, with market appreciation of $3.562 billion[34] - European listed ETPs experienced inflows of $2.447 billion and an end-of-period asset total of $48.290 billion[34] - Digital assets reached an end-of-period asset total of $592 million, with inflows of $238 million during the quarter[34] Financial Performance - Operating revenues of $125.6 million, an increase of 11.5% from the prior quarter due to higher average AUM[6] - Diluted earnings per share of $0.13, with adjusted earnings per share of $0.23[1][3] - Gross margin of 82.2%, a 1.1 point increase from the prior quarter due to higher revenues[7] - Operating income margin of 36.3%, a 5.5 point increase from the prior quarter[7] - Net income for Q3 2025 was $19.7 million, compared to $24.8 million in Q2 2025[22] - Operating income for Q3 2025 was $45.7 million, an increase from $34.6 million in Q2 2025[22] - Adjusted net income for Q3 2025 was $34,476 million, up from $25,863 million in Q2 2025, representing a 33% increase[51] - Adjusted earnings per share (EPS) for Q3 2025 was $0.23, compared to $0.18 in Q2 2025, reflecting a 28% increase[51] - Operating revenues for Q3 2025 reached $125,616 million, a 12% increase from $112,621 million in Q2 2025[51] Expenses and Liabilities - Operating expenses rose by 2.5% from Q2 2025, totaling $79.96 million, primarily due to higher fund management and administration expenses[22] - Interest expense surged by 54.2% from Q2 2025, totaling $8.47 million, attributed to a higher level of debt outstanding[22] - Interest income increased by 92.1% from Q2 2025, amounting to $4.02 million, due to a rise in interest-earning assets[22] - Total current liabilities increased to $254,441 thousand as of September 30, 2025, compared to $109,197 thousand at December 31, 2024, indicating a rise of approximately 133%[38] Acquisitions and Product Launches - Acquisition of Ceres Partners, LLC, a leading U.S.-based alternative asset manager specializing in farmland investments, financed with $275.0 million of proceeds from the issuance of convertible senior notes[16] - Launch of multiple new products including WisdomTree Global Defense Fund and WisdomTree Quantum Computing Fund in Q3 2025[16] - WisdomTree Europe Defence UCITS ETF surpassed $4 billion in AUM following its launch in March 2025[16] - The number of products offered increased to 397 by the end of the period, up from 383 in the previous quarter[34] - WisdomTree launched 17 digital asset products prior to January 1, 2025, indicating a focus on expanding its digital offerings[35] Tax and Income - The effective income tax rate for Q3 2025 was 33.3%, resulting in an income tax expense of $9.8 million[22] - The adjusted effective income tax rate for Q3 2025 was 23.9%[22] - Adjusted effective income tax rate for Q3 2025 was 23.9%, slightly higher than 23.5% in Q2 2025[52] Risks and Challenges - The acquisition of Ceres Partners, LLC presents risks related to integration challenges and the realization of expected benefits, including projected business growth[54] - Anticipated trends in global markets and ETPs may influence inflows and outflows, impacting the company's ability to deliver favorable returns to investors[55] - A significant portion of revenues is derived from a limited number of products, making operating results sensitive to investor sentiment and market performance[55] - The company faces increased operational and regulatory risks as it expands its digital assets product offerings beyond existing ETP business[55] - Fluctuations in assets under management (AUM) due to market disruptions could negatively impact revenues and operating margins[55] - A substantial portion of AUM is exposed to U.S. and international developed markets, subjecting the company to currency exchange rate risks[55] - The company anticipates that competitive pressures could reduce revenues and profit margins[55] - The performance of many ETPs has a limited track record, and poor investment performance could lead to revenue declines[55] - The company relies on third parties for critical services, and failures by key vendors could materially affect operations and investor outcomes[55]