WisdomTree(US:WT)2022-07-29 19:14Financial Data and Key Metrics Changes - The company achieved $4 billion in inflows during the quarter, marking the strongest inflow quarter since 2015, despite a 15% decline in broad-based equities [7] - Assets Under Management (AUM) stood at $74.3 billion, down only 6% during the quarter [7][10] - Revenues were reported at $77.3 million, a decrease of 1% from the prior quarter due to a decline in average advisory fees [11] - Adjusted net income was $11.3 million or $0.07 per share, excluding certain non-GAAP adjustments [11][12] - Gross margin was reported at 79%, reflecting a 1% decline due to recent fund launches and higher transaction-related fees [16] Business Line Data and Key Metrics Changes - The company reported positive inflows for seven consecutive quarters across various asset categories, including U.S. equities, emerging markets, and fixed income [9] - The floating rate treasury product, USFR, performed well as a safe haven amid rising rates [8] Market Data and Key Metrics Changes - The company noted that over two-thirds of its offerings are aligned with current market themes such as rising rates and inflation [7] - The company experienced a reduction in estimated third-party distribution fees by $1 million to approximately $8.5 million due to market volatility [18] Company Strategy and Development Direction - The company is focused on sustaining current momentum while expanding its digital assets initiatives, aiming to bring crypto exposures mainstream [26][29] - The strategy includes a two-pronged approach focusing on partner platforms and independent broker-dealers [24] - The company is committed to operational efficiency, with incremental margins exceeding 50% [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting strong sustainable growth and a robust pipeline for digital assets [29][35] - The company is well-positioned to navigate the current market challenges, leveraging its trusted brand and regulatory knowledge [34][52] Other Important Information - The company is reducing its compensation guidance to $96 million to $99 million due to uncertain market conditions [14] - The company is also adjusting its discretionary spending guidance to a range of $51 million to $53 million [15] Q&A Session Summary Question: What has WisdomTree done to mitigate risks related to Russian securities in emerging market portfolios? - Russian securities have been marked to zero across the company's emerging market ETFs, eliminating further downside risk to NAV [41][46] Question: Why is WisdomTree committed to digital assets and what growth is anticipated in this space? - The company aims to bring crypto to mainstream investors and expects all financial assets to eventually migrate to blockchain infrastructure, anticipating revenue from digital assets in 2023 [49][52] Question: Can you elaborate on the models business strategy between large wirehouse platforms and smaller RIAs? - The strategy involves a two-pronged approach, focusing on gaining mind share in large platforms and creating easy-to-implement models for RIAs and IBDs [66][71]