WisdomTree(US:WT)2025-10-31 16:00Financial Data and Key Metrics Changes - The company reported record global AUM of $137.2 billion, with U.S. AUM at $88.3 billion and European AUM at $48.3 billion, alongside digital AUM of nearly $600 million [3][11] - Adjusted revenues for the quarter were $125.6 million, reflecting an increase of 11.5% from the previous quarter and approximately 14.7% year-over-year, driven by higher average AUM [5] - Adjusted net income for the quarter was $34.5 million, or $0.23 per share, excluding certain losses and acquisition-related costs [6] - The gross margin improved to 82.2% in the third quarter, with expectations to rise to 83% in the fourth quarter due to the Cirrus Partners acquisition [7] Business Line Data and Key Metrics Changes - Significant inflows were noted in European gold and cryptocurrency products, as well as the European Defense Fund and Digital Money Market Fund [4] - Model AUM grew to approximately $5.85 billion, up more than 50% year-to-date, indicating strong advisor adoption [12] - The digital assets segment saw AUM grow to around $600 million, with peak levels near $900 million, driven by flows into the blockchain-enabled money market fund [14] Market Data and Key Metrics Changes - Year-to-date inflows totaled $8.8 billion, with $2.5 billion from the U.S., $5.8 billion from Europe, and roughly $550 million in digital assets [3] - The company experienced a notable increase in the number of clients using its products, contributing to deeper client relationships and sustainable organic growth [12] Company Strategy and Development Direction - The acquisition of Cirrus Partners is expected to enhance revenue capture and operating margins while diversifying AUM with farmland as a new asset class [4][10] - The company is focused on expanding its digital asset offerings and enhancing its technology stack, with plans for tokenization as a service [21][23] - The strategic priorities for 2025 include faster revenue growth and higher revenue capture, with a strong emphasis on maintaining operational efficiency [16][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the European business, anticipating continued strong growth in ETF adoption [19] - The company is optimistic about the digital asset market, expecting significant growth and increased adoption among stablecoin issuers and crypto-native businesses [32][67] - Management highlighted the importance of maintaining a diversified and scalable platform to navigate market cycles and ensure long-term success [17][16] Other Important Information - The company reported $8 million in adjusted interest expense for the quarter, with expectations of $11 million in the fourth quarter due to recent financing [8] - The company is actively working on bringing its Digital Money Market Fund to market, pending SEC approval [40] Q&A Session Summary Question: What is the three-to-five-year vision for Europe in terms of flows compared to the U.S.? - Management indicated that Europe is a few years behind the U.S. in ETF adoption, with strong growth fundamentals expected [19] Question: Can you elaborate on the digital asset side and potential for tokenization as a service? - Management confirmed active discussions around tokenization as a service and highlighted the competitive advantages of their technology stack [21][23] Question: What are the underlying drivers of the rapid growth in digital assets? - The growth is primarily driven by stablecoin issuers and crypto-native businesses seeking yield-bearing treasury assets [32] Question: How will the Cirrus Partners acquisition impact future private asset strategies? - Management emphasized a disciplined approach to acquisitions and indicated that this is just the beginning of their focus on private assets [27][29] Question: How will AUM for Cirrus Partners be reported? - AUM for Cirrus Partners will be reported at the end of each quarter, with performance-based fees linked to the AUM and market conditions [57][60]