WisdomTree, Inc. (WT) Q1 2026 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, successful acquisitions, and promising product launches. The Q&A reveals positive sentiment towards the company's digital and tokenized offerings, despite some uncertainty about AUM integration timelines. The strategic expansion and strong inflows further enhance the outlook. Considering the company's market cap, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
Key Financial Performance
Assets Under Management (AUM) $152.6 billion, marking a 6% increase from year-end due to net inflows and market appreciation. Growth was broad-based across U.S., European, and digital asset platforms.
Net Inflows $5.9 billion globally, a 17% annualized organic growth rate. Breakdown: $3.1 billion in Europe, $2.6 billion in the U.S., $100 million in Digital assets, and $75 million in private assets. Reasons include strong performance in international equity exposures, Japan strategies, UCITS thematic products, and fixed income.
Revenues $159.5 million for the quarter, an 8% increase from the previous quarter and a 48% increase year-over-year. Driven by higher AUM and growth in other revenues, including $16.4 million from elevated trading activity in European products and $8 million from Ceres' contributions.
Adjusted Operating Margin Expanded by 770 basis points compared to the prior year quarter. Reasons include disciplined strategic expansion and higher revenue yields.
Adjusted Net Income $40.6 million or $0.27 per share. Excludes loss on extinguishment of convertible notes. Reasons include refinancing of capital structure and funding for the Atlantic House acquisition.
Atlantic House Acquisition Added approximately $4 billion in AUM, generating 53 basis points in advisory fees. Complementary revenues include 25 basis points on $1.5 billion of AUA and $13 million in structuring fees. Overall revenue yield increased by 2 basis points to 43.5 basis points.
Global AUM $164.3 billion, up $12 billion or 8% from March 31. Driven by favorable market conditions, $800 million of net inflows, and the inclusion of Atlantic House.
UCITS Platform Inflows $3.4 billion year-to-date, with AUM up over 26%. Reasons include strong traction and structural growth.
Digital Assets AUM $867 million, driven by $98 million of inflows in Q1. Growth attributed to tokenized money market fund adoption.
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Operating Highlights
Atlantic House acquisition: WisdomTree completed the acquisition of Atlantic House, a U.K.-based asset manager with $4 billion in AUM. This acquisition enhances product capabilities, distribution footprint in Europe, and supports higher quality revenue growth. Atlantic House generates 53 basis points in advisory fees and complementary revenues, contributing to an overall revenue yield of approximately 95 basis points.
Ceres acquisition: Ceres, which focuses on private assets, has been integrated into the base business. It adds uncorrelated asset classes, attractive economics, and expands capabilities in response to client demand.
Digital assets: WisdomTree's digital assets saw $98 million in inflows in Q1, with AUM reaching a record $867 million, driven by the tokenized money market fund.
Global AUM growth: Assets under management reached a record $152.6 billion in Q1 2026, marking the fifth consecutive quarter of record AUM. Growth was broad-based across U.S., European, and digital asset platforms, with net inflows of $5.9 billion globally.
UCITS platform: The UCITS platform led with over $3.4 billion of inflows year-to-date, with AUM up over 26%.
Revenue growth: Revenues were $159.5 million in Q1 2026, an 8% increase from the prior quarter and a 48% increase from the prior year quarter, driven by higher AUM and growth in other revenues.
Adjusted operating margin: The adjusted operating margin expanded by 770 basis points compared to the prior year quarter.
Interest expense and income: Interest expense is forecasted at $53 million for the year, with quarterly expenses declining from $15 million in Q2 to $14 million in Q3 and Q4. Interest income guidance increased by $2 million to $10 million for the year.
Strategic acquisitions: WisdomTree's acquisitions of Ceres and Atlantic House align with its strategy to diversify the business, enhance revenue yields, and accelerate growth. These acquisitions add differentiated products and capabilities, improve firm economics, and expand client offerings.
Capital structure optimization: WisdomTree refinanced convertible notes with a 4.5% coupon and $21.58 per share conversion price, reducing potential dilution and aligning with growth priorities.
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Risk or Challenges
Market Volatility: Elevated volatility in commodity markets and broader market conditions could impact inflows and AUM stability.
Regulatory and Legal Risks: Forward-looking statements are subject to risks outlined in the company's annual report and SEC filings, which could materially affect results.
Interest Expense: Forecasted interest expense of $53 million for the year could impact profitability, especially with anticipated retirement of notes.
Integration Risks: Recent acquisitions, including Atlantic House and Ceres, require successful integration to achieve expected benefits and avoid operational disruptions.
Compensation Costs: Higher compensation-to-revenue ratio due to acquisitions could pressure margins despite being accretive.
Economic Uncertainty: Global economic conditions and market environments could affect inflows and revenue growth.
Third-Party Distribution Costs: Expected third-party distribution expenses of $20-$24 million could rise due to higher AUM and trading activity, impacting margins.
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Guidance & Outlook
Compensation to Revenue Ratio: Expected to remain in the range of 26% to 28%, trending towards the upper half due to the Atlantic House acquisition.
Gross Margin Guidance: Increased by 1 percentage point to a range of 83% to 84%, reflecting operating leverage from organic growth and the Atlantic House acquisition.
Discretionary Spending Guidance: Increased by $3 million to account for the inclusion of Atlantic House.
Third-Party Distribution Expense: Expected to range from $20 million to $24 million, influenced by higher AUM and trading activity, particularly in European platforms.
Interest Expense: Forecasted to be approximately $53 million for the year, with quarterly expenses of $15 million in Q2 and $14 million in Q3 and Q4.
Interest Income Guidance: Increased by $2 million to $10 million for the year, based on interest-earning assets and forecasted rate environment.
Adjusted Tax Rate: Expected to increase to approximately 24% to 25%, up from 24%, due to the Atlantic House acquisition.
Weighted Average Diluted Shares: Expected to increase to 155 million to 158 million in Q2, then decline to approximately 154 million in the second half of the year after retiring 2026 and 2029 notes.
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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 advantages of WisdomTree's tokenized money market fund compared to other non-tokenized yield-generating options?
A:WisdomTree's tokenized money market fund (WTGXX) is a 1940 Act fund sold by prospectus in the U.S., available to U.S. retail, U.S. businesses, and global businesses. It has unique functionality, including SEC-exemptive relief for intraday 24/7 trading via broker-dealer. It offers better yields (3.5%) compared to traditional savings accounts and is building distribution relationships in both traditional finance (TradFi) and decentralized finance (DeFi) channels.
Q:Are there opportunities to generate higher fees on model portfolios as WisdomTree gains scale in adviser relationships?
A:Yes, model portfolios bring stickier assets, deepen partner relationships, and lead to a stable mix of WisdomTree funds. The addition of Atlantic House adds higher revenue capture, and SMAs also contribute to higher quality flows and better earnings quality.
Q:What contributed to the strong 'other revenues' this quarter, and is there potential for additional growth?
A:Other revenues were $16 million this quarter, up from $13 million last quarter, driven by higher AUM and transaction fees tied to European commodity products. About 40% of this revenue is from transaction fees and 60% from AUM base. Atlantic House's acquisition will add approximately $11 million of incremental revenue annually, with significant growth expected in 2027.
Q:Is the 95 basis point yield for Atlantic House a good way to model revenues going forward?
A:The 95 basis point yield is a key metric, but modeling should consider component parts like advisory fees, Ceres management fees (1% of AUM), and performance fees. Revenue capture ticked up 1 basis point this quarter, and Atlantic House's AUM will soon be integrated into reporting.
Q:Will Atlantic House's AUM be included in WisdomTree's daily AUM reporting?
A:Yes, Atlantic House's AUM will be included in daily AUM reporting in the near future as integration progresses. Future products from Atlantic House will also contribute to AUM and revenue yields.
Q:What is the marketing strategy for WisdomTree's digital money market fund (WTGXX)?
A:The strategy includes distribution to U.S. retail through WisdomTree Prime and to global businesses via WisdomTree Connect. The fund is used for stablecoin reserves, treasury management, and collateral mobility. AUM has grown by $50 million in April, and the number of users has increased.
Q:How does WisdomTree plan to roll out Atlantic House funds to European and U.S. markets?
A:WisdomTree plans to launch 15-20 funds over the next 24 months, focusing on active derivative solutions and options-based strategies. These products will have expense ratios between 55-85 basis points, higher than the current average. The Atlantic House team will play a key role in portfolio management and sales.
Q:What are the priorities for WisdomTree's digital asset strategy?
A:The priorities are growing AUM, increasing platform users, and developing new revenue streams. The strategy includes serving retail and institutional clients, leveraging vertical integration, and exploring licensing opportunities for its technology stack.
Q:What contributed to the strong inflows for Ceres this quarter?
A:Ceres had $75 million in inflows this quarter, partly due to the closure of its first fund, which accelerated investments. The second fund is launching soon, with strong interest and a robust pipeline. Performance fees showed seasonal variability but remain aligned with long-term targets.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the question about the specific timeline for integrating Atlantic House's AUM into daily reporting, providing only a general statement about it happening in the 'not-too-distant future.'
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AUM basis
AUM trading
Atlantic House
Ceres
House acquisition
Jono
WisdomTree
addition Atlantic
basis point
bespoke investment
capital allocation
capital structure
commodity market
compensation ratio
contribution
conversion price
equity
expense
fee bespoke
inclusion Atlantic
investment solution
leverage
margin
model fee
note
platform inflow
point fee
progress
retirement
strategy
trading activity
transaction
volatility
yield basis
WT Transcript
WisdomTree, Inc. (WT) Q1 2026 Earnings Call Transcript
Positive5-1
The earnings call highlights strong financial performance with increased AUM, successful acquisitions, and promising product launches. The Q&A reveals positive sentiment towards the company's digital and tokenized offerings, despite some uncertainty about AUM integration timelines. The strategic expansion and strong inflows further enhance the outlook. Considering the company's market cap, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
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.
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