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WisdomTree(WT) - 2025 Q4 - Earnings Call Transcript

2026-01-30 17:00

Financial Data and Key Metrics Changes - Assets under management (AUM) reached a record $144.5 billion, up 5% from the third quarter and over 30% year-over-year [4] - Adjusted revenues for the quarter were $147.4 million, an increase of 17% from the third quarter and up approximately 33% year-over-year [7] - Adjusted net income for the quarter was $41.2 million, or $0.29 per share, with an adjusted operating margin expanding almost 300 basis points to finish the year at 36.5% [9] Business Line Data and Key Metrics Changes - European-listed products saw AUM increase from $30.7 billion to a record $53.3 billion, supported by over $6 billion of net inflows [5] - U.S. AUM increased to a record $88.5 billion, with $1.4 billion of net inflows for the year, driven primarily by U.S. equity offerings [6] - Digital assets platform AUM reached approximately $770 million at year-end, reflecting strong inflows into the digital money market fund [6] Market Data and Key Metrics Changes - Global AUM today stands at $160.8 billion, up $16 billion or 11% from year-end, driven by favorable market conditions and almost $2 billion of net inflows [7] - Thematic strategies, particularly in metals, saw AUM increase by 83% with more than $1 billion in net inflows [15] Company Strategy and Development Direction - The company aims to deliver differentiated products that perform and persist, focusing on thematic investments and private markets [16][19] - The acquisition of Ceres Partners is expected to add a long-duration, diversifying revenue stream, with AUM growing to about $1.9 billion since the acquisition [18] - The company is committed to maintaining tight expense discipline while investing in growth, demonstrating that margin expansion and investment can coexist [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve financial and business plans, highlighting the importance of organic growth and disciplined execution [14][20] - The company is well-positioned to capture market share in thematic investments, particularly in Europe, and is optimistic about the growth potential in digital assets and private markets [15][19] Other Important Information - The company forecasts a compensation to revenue ratio of 26%-28% for 2026, reflecting planned hires and compensation adjustments [10] - Discretionary spending guidance is forecasted to range from $80 million-$86 million, driven by increased marketing and sales expenses [11] Q&A Session Summary Question: What are the biggest opportunities for WisdomTree in 2026 and 2027? - Management highlighted the success of the European defense fund and the growth in thematic investments, particularly in rare earths and industrial metals, as key opportunities [24][25] Question: What are the major categories for the discretionary spending increase? - The increase is largely driven by marketing and sales-related expenses tied to growth initiatives [31] Question: Is WisdomTree's approach to growing its digital asset base focused on education or capturing existing clients? - The focus is on capturing clients who are already familiar with digital assets and tokenization [52] Question: Can you provide insights on the integration of Ceres and future growth opportunities? - The integration has gone smoothly, and management sees significant synergies and growth potential from the acquisition [61][62]