WisdomTree, Inc. (WT) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial performance, with increased AUM across various sectors, expanded operating margins, and a successful Ceres acquisition. Positive guidance on future growth in thematic funds, tokenization, and private markets further supports a positive outlook. Despite some unclear responses in the Q&A, the overall sentiment is positive, driven by robust financial metrics and strategic growth plans. Given the market cap of $1.5 billion, the stock is likely to react positively, with a predicted increase of 2% to 8% over the next two weeks.
Key Financial Performance
Assets Under Management (AUM) Ended the year at $144.5 billion, a record, up 5% from the third quarter and over 30% year-over-year. The increase was driven by $8.5 billion of inflows for the year (8% organic growth rate), positive market movement, and the Ceres acquisition, which added exposure to U.S. farmland and diversified the AUM mix.
European Listed Products AUM Increased from $30.7 billion to $53.3 billion year-over-year, supported by more than $6 billion of net inflows and a favorable market environment. European inflows were led by $4.3 billion into the UCITS franchise and $1 billion into commodity products.
U.S. AUM Increased to $88.5 billion, with $1.4 billion of net inflows for the year, driven by U.S. equity offerings and favorable market conditions.
Digital Assets Platform AUM Reached approximately $770 million at year-end, driven by strong inflows into the digital money market fund through WisdomTree Connect.
Operating Margins Expanded approximately 300 basis points year-over-year, driven by record AUM, strong organic growth, disciplined execution, and thoughtful capital deployment.
Adjusted Revenues $147.4 million during the quarter, up 17% from the third quarter and approximately 33% year-over-year, driven by higher average AUM and $12 million in contributions from the Ceres acquisition, including $7.1 million from performance fees.
Adjusted Operating Margin Expanded almost 300 basis points year-over-year, finishing the year at 36.5%.
Adjusted Net Income $41.2 million or $0.29 per share for the quarter, excluding amortization of intangible assets related to the Ceres acquisition and other items.
Metal Strategies AUM Increased 83% year-over-year, with more than $1 billion in net inflows, reflecting a global reallocation towards real assets.
Model AUA Grew to over $6 billion, up from $3.8 billion at the end of 2024, driven by new users and deeper adoption.
Tokenized AUM Reached $770 million by year-end, up from essentially zero 12 months ago, reflecting real adoption and growing client trust.
Private Markets AUM (Ceres Partners) Grew to about $1.9 billion since the acquisition in early October, including 8% annualized organic growth in the fourth quarter.
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Operating Highlights
European Defense Fund: One of the most successful launches in firm history and among the top-performing launches industry-wide in 2025.
New Strategies: Launched over 30 new strategies in 2025, including rare earths, quantum computing, and nuclear energy.
Digital Assets: Tokenized AUM reached $770 million by year-end, up from essentially zero in 12 months.
European Market: AUM increased from $30.7 billion to $53.3 billion, supported by $6 billion of net inflows and favorable market conditions.
U.S. Market: AUM increased to $88.5 billion, driven by $1.4 billion of net inflows and favorable market conditions.
Private Markets: Acquisition of Ceres Partners added $1.9 billion in AUM, with 8% annualized organic growth in Q4.
Operating Margins: Expanded by nearly 300 basis points in 2025, reaching 36.5%.
Revenue Growth: Adjusted revenues grew 15.4% year-over-year, reaching $147.4 million in Q4 2025.
Portfolio Solutions: Model AUA grew to $6 billion, up from $3.8 billion in 2024.
Diversification: Expanded into private markets, digital assets, and European markets, creating a more balanced and resilient business model.
Focus on Innovation: Continued investment in thematic and tactical products, such as rare earths and quantum computing.
Digital Platform: WisdomTree Connect scaled from 4 to 29 onboarded institutions, with over 3,500 wallets holding assets.
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Risk or Challenges
Market Volatility: The company experienced growth despite volatile markets and shifting macroeconomic conditions, which could pose challenges to maintaining consistent performance.
Interest Rate Uncertainty: Uncertainty around interest rates could impact equity rotations and overall market conditions, affecting the company's growth trajectory.
Compensation Costs: Compensation expenses are seasonally higher in the first quarter and could fluctuate based on factors like revenue, operating income, and share price performance.
Discretionary Spending: Discretionary spending is forecasted to increase significantly, driven by marketing, sales, and distribution-related expenses, which could pressure margins if not managed effectively.
Product Launch Costs: Incremental costs associated with anticipated product launches could offset the positive impact of higher AUM on gross margins.
Interest Expense: Interest expense is expected to remain high, particularly in the first half of the year, due to the retirement of convertible notes maturing in 2026.
Regulatory Risks: The company operates in a highly regulated environment, and any changes in regulations could impact its operations and financial performance.
Supply Chain and Operational Risks: The expansion into private markets and digital assets introduces new operational complexities and potential supply chain challenges.
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Guidance & Outlook
2026 Compensation to Revenue Ratio: Forecasted to range from 26% to 28%, representing a 2 percentage point downward shift from prior year guidance. This reflects planned hires, compensation adjustments, and annualization of 2025 hires. First quarter ratio expected to be approximately 30% before decreasing over the year.
Discretionary Spending Guidance: Forecasted to range from $80 million to $86 million, up from $71 million in the previous year. Increase driven by incremental marketing spend, higher sales and distribution-related expenses, and the impact of the Ceres acquisition.
Gross Margin Guidance: Estimated to range from 82% to 83%, compared to 81.9% in the previous year. Growth driven by current AUM levels and the positive impact of the Ceres acquisition, partially offset by costs associated with anticipated product launches. Expected to trend higher as AUM grows.
Third-Party Distribution Expense: Anticipated to range from $17 million to $19 million, up from $16 million in the previous year, driven by higher AUM on these platforms.
Interest Expense: Forecasted to be approximately $40 million for 2026, with $10.5 million in each of the first two quarters, declining to $9.5 million per quarter in the second half of the year. Reflects the retirement of a substantial portion or all of the convertible notes maturing in June 2026.
Interest Income: Estimated to be approximately $8 million in 2026, driven by interest-earning assets and forecasted interest rates. Expected to decline in the second half of the year following the retirement of 2026 notes.
Adjusted Tax Rate: Anticipated to be approximately 24%, aligned with the previous year's tax rate.
Weighted Average Diluted Shares: Expected to range from 152 million to 157 million, compared to 145 million in the previous year. Includes 7 million to 12 million incremental shares associated with convertible notes, assuming stock price remains at recent levels.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What are the biggest opportunities for WisdomTree in 2026 and 2027?
A:Thematic funds in Europe, particularly in industrial metals and rare earths, are key opportunities. WisdomTree has seen significant growth in rare earth funds, with one fund growing from $100 million in November to $700 million. In the U.S., there is potential in commodities like gold and silver, as U.S. investors are under-allocated in these areas. The company also sees growth in tokenization and private markets.
Q:What are the major categories of discretionary spending ($80 million to $86 million)?
A:The spending is largely driven by marketing and sales-related expenses tied to growth initiatives. Despite the increase, the company aims to maintain incremental margins above 50%.
Q:Are we talking about a higher start base consistently going forward after the $0.29 quarter?
A:Yes, the company expects a higher start base consistently. The beat was driven by a lower comp ratio (28% this quarter) and higher other revenue ($13 million compared to $11 million previously). The company is positioned for more strong quarters with AUM at $160 billion.
Q:How does WisdomTree plan to scale its tokenization trend?
A:WisdomTree plans to scale through three distribution channels: direct to retail (WisdomTree Prime), direct to business (WisdomTree Connect), and platform sales to self-hosted wallets. They are in active discussions with fintech apps, software service providers, and broker-dealers to make their products available on various platforms. Their infrastructure allows them to serve retail and institutional clients effectively.
Q:What is the plan for growth in the outcome-based ETF/Modern Alpha market?
A:WisdomTree has an ambitious fund launch strategy, including option-based strategies and equity premium income funds. They aim to drive significant adoption and expand aggressively in this space.
Q:Does macroeconomic volatility benefit WisdomTree's business?
A:Yes, WisdomTree's diversified product offerings across asset classes make it well-suited for various market environments. The company has seen growth in thematics, commodities, and traditional value funds, making it resilient to both strong and weak dollar environments.
Q:Is WisdomTree's digital asset strategy focused on educating people or capturing existing clients?
A:The strategy is focused on capturing clients who are already familiar with digital assets and operating on-chain. The growing adoption of wallet-based infrastructure and regulatory clarity around stablecoins are expanding the universe of potential clients.
Q:Does WisdomTree utilize existing expertise or seek outside talent for new product development?
A:WisdomTree primarily utilizes existing expertise and staff for new product development. However, they also invest in external capabilities, such as their investment in AlphaBeta, an Israeli AI firm, to enhance product development.
Q:What lessons has WisdomTree learned from the Ceres acquisition?
A:The integration of Ceres has been smooth, confirming the strategic fit and value of the acquisition. Ceres has a strong track record of net inflows and zero years of net outflows in nearly 20 years, and WisdomTree sees synergies in distribution and product development.
Q:Who are the users of WisdomTree Connect, and what are their use cases?
A:Users include stablecoin issuers, businesses using stablecoins for treasury management, investors using WTGXX as a collateral instrument, and on-chain investors seeking real-world assets. These use cases highlight the versatility of WisdomTree's digital asset offerings.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the question about whether macroeconomic volatility benefits WisdomTree's business. While they highlighted the company's diversified product offerings, they did not provide specific data or examples to substantiate the claim.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AUM end
AUM level
AUM record
Ceres acquisition
Interest expense
WisdomTree Connect
adviser workflow
balance
basis point
compensation
consideration
development
durability
engine
farmland
flow market
focus
hire
increase AUM
interest rate
magnitude
margin expansion
market condition
metal
mix
model SMAs
outcome
price
product AUM
ratio
record inflow
reminder
retirement
share note
strategy
tax rate
WT Transcript
WisdomTree, Inc. (WT) Q4 2025 Earnings Call Transcript
Positive1-30
The earnings call highlights strong financial performance, with increased AUM across various sectors, expanded operating margins, and a successful Ceres acquisition. Positive guidance on future growth in thematic funds, tokenization, and private markets further supports a positive outlook. Despite some unclear responses in the Q&A, the overall sentiment is positive, driven by robust financial metrics and strategic growth plans. Given the market cap of $1.5 billion, the stock is likely to react positively, with a predicted increase of 2% to 8% over the next two weeks.
WisdomTree, Inc. (WT) Q3 2025 Earnings Call Transcript
Positive10-31
The earnings call demonstrates strong growth in various AUM categories, including gold and digital assets, and positive strategic moves like the Ceres acquisition. The Q&A section reveals optimism about future growth, especially in digital assets and tokenization, despite some vague responses. The market strategy and shareholder return plans are promising, suggesting a positive stock price movement. Given the market cap of approximately $1.5 billion, these factors are likely to result in a 2% to 8% increase in stock price over the next two weeks.
WisdomTree, Inc. (WT) Q2 2025 Earnings Call Transcript
Positive8-1
The earnings call and Q&A reveal strong financial performance with a 33% EPS growth, increased operating margins, and record AUM. The acquisition of Ceres Partners and expansion in the digital assets space signal promising growth. While guidance remains unchanged, the positive outlook on client growth and strategic initiatives in farmland and stablecoins are encouraging. The market cap suggests a moderate reaction, leading to a positive sentiment prediction of a 2% to 8% increase in stock price.
WisdomTree, Inc. (NYSE:WT) Q1 2025 Earnings Call Transcript
Positive5-3
The earnings call highlights strong financial performance with EPS up 33% and record AUM. Despite market volatility, the company shows resilience through significant net inflows and strategic initiatives like AI integration. The Q&A session reveals cautious optimism with ongoing partnerships and AI deployment, although management's vague responses on specifics slightly temper enthusiasm. The lack of a shareholder return plan is a minor drawback, but overall, the positive financial metrics and strategic growth initiatives outweigh concerns, suggesting a positive stock price movement over the next two weeks.
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