Wisdomtree, Inc. · NYSE:WT
Wisdomtree — Q1 2022 Earnings Presentation
28 slides from Wisdomtree's earnings presentation, Apr 29, 2022
Slide 1: Q1/22 Results
Q1/22 Results April 29, 2022
Slide 2: Forward looking statements
Forward looking statements This presentation contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable
Slide 3: Q1/22 Highlights
Q1/22 Highlights + AUM of $79.4b (2nd consecutive record), up 2.5% from net AUM inflows and positive market movement ($ billions) + Net inflows of $1.3b for the quarter: – Fixed income: +$1.2b – U.S. equity: +$779m – Commodity & Currency: -$1.1b of outflows (gold and oil) + Annualized organic growth
Slide 4: Revenues and Earnings Results
Revenues and Earnings Results Revenue, Income, Operating Margin, EPS Highlights/Unusual Items ($ millions) Total Revenues Adjusted Net Income (non-GAAP)(1) + Revenues decreased 1.0% due to two fewer revenue days, partly offset by higher average AUM + Seasonally higher payroll taxes in connection wit
Slide 5: Seasonal Expense Lift, but Well-Controlled Discretionary Spending
Seasonal Expense Lift, but Well-Controlled Discretionary Spending Expense Base Change – Q4/21 to Q1/22 (1) ($ in thousands) + Seasonally higher payroll taxes in connection with payment of year-end bonuses + Higher third-party distribution fees from European platforms + Discretionary spending of $11.
Slide 6: 2022 Expense Guidance
2022 Expense Guidance + Compensation anticipated to trend toward high-end of guidance range if strong organic growth persists 2022 Q1 2022 Expense Item Guidance Actual + Discretionary spending guidance is unchanged and presumes pandemic Compensation $92m-$102m $24.8m dissipates and spending migrates
Slide 7: Capital Management
Capital Management + Fundamental Commitment to Maintaining our Dividend + Debt Management – $175m of convertible notes scheduled to mature in June 2023 – Anticipate partial paydown and refinancing – Magnitude of reduction dependent on capital needs and investment opportunities + Stock Buyback – Liqu
Slide 8: Past Investments are Paying Off Today
Past Investments are Paying Off Today Data & Technology Advisor Solutions European Platform + Hired Dave Yates as Chief + Developed best-in-class + Acquired & integrated two Information Officer Digital Portfolio Developer European asset (DPD) tools management platforms + Overhauled and streamlined C
Slide 9: Enhancements to European Platform Set the Table for Today's Success
Enhancements to European Platform Set the Table for Today’s Success Legacy Improved WisdomTree ETFS Product & Risk Enhancements Structures Distribution Attracted Top- Pipes Tier Talent Healthy & Resilient Uncorrelated Product AUM Launchpad Innovation for European Growth WisdomTree – Q1/22 Results 9
Slide 10: WisdomTree's Growth Algorithm
WisdomTree’s Growth Algorithm Ongoing Inflow Momentum as 1 AUM is Levered to Attractive Investment Themes Add ‘Stickier’ Inflows from 2 Expanding & Deepening Managed Model Relationships Early Mover into Digital Assets 3 Charts a Course for Accelerated Long-Term Growth WisdomTree – Q1/22 Results 10
Slide 11: WisdomTree's AUM is Balanced & Levered to Current Investment Themes
WisdomTree’s AUM is Balanced & Levered to Current Investment Themes $78b 11
Slide 12: WisdomTree's Growth Algorithm
WisdomTree’s Growth Algorithm Ongoing Inflow Momentum as 1 AUM is Levered to Attractive Investment Themes Add ‘Stickier’ Inflows from 2 Expanding & Deepening Managed Model Relationships Early Mover into Digital Assets 3 Charts a Course for Accelerated Long-Term Growth WisdomTree – Q1/22 Results 12
Slide 13: WisdomTree's Managed Models Franchise Supports & Accelerates
Expanding Footprint in Managed Models is Additive to Organic Growth WisdomTree’s Managed Models Franchise Greater ‘Stickier’ ‘Stackable’ on Share of Inflows & top of Advisor WisdomTree’s AUM Current Inflows Wallets Expanding managed model Offering New provider partners & deepening Growth Oriented cu
Slide 14: WisdomTree's Growth Algorithm
WisdomTree’s Growth Algorithm Ongoing Inflow Momentum as 1 AUM is Levered to Attractive Investment Themes Add ‘Stickier’ Inflows from 2 Expanding & Deepening Managed Model Relationships Early Mover into Digital Assets 3 Charts a Course for Accelerated Long-Term Growth WisdomTree – Q1/22 Results 14
Slide 15: WisdomTree's Digital Assets Strategy Simplified
WisdomTree’s Digital Assets Strategy Simplified Digital World of Blockchain & Crypto • Smart Contracts, Blockchain & Crypto Assets • Digital Wallets & WisdomTree Prime™ WisdomTree is Bringing Crypto Assets into the Mainstream Financial Ecosystem… … and Mainstream Assets into the Digital Ecosystem th
Slide 16: Early Mover into Digital Assets is an Extension of our Core Capabilities
Early Mover into Digital Assets is an Extension of our Core Capabilities Crypto ETPs & Direct Core Indexing WT ETFs, Prime ETPs & App Models Tokenized Assets + Blockchain Enabled Funds CORE COMPETENCIES & SYNERGIES • Brand • Compliance • Research • Culture • Legal • Product Innovation • People • Reg
Slide 17: Introducing WisdomTree Prime
™ Introducing WisdomTree Prime. ™ The new digital wallet, built on blockchain, that lets you spend, save, transfer, send, and invest digital assets like bitcoin, U.S. dollar tokens, Gold tokens, and more. Do more with one digital wallet. • Save • Spend • Invest • Pay back your Buddy • Buy a Latte •
Slide 18: WisdomTree is a Multifaceted Growth Story
WisdomTree is a Multifaceted Growth Story Diverse Products Models New ETF Traction Launches Robust WETF Crypto Growth Tokenized Direct Assets & Indexing Funds ™ WisdomTree – Q1/22 Results 18
Slide 19: Q&A
Q&A
Slide 20: Appendix
Appendix
Slide 21: AUM and Net Inflows
AUM and Net Inflows Quarterly ETF AUM Change Q1/22 Net Flows by Category ($ billions) ($ millions) Fixed Income 1,242 U.S. Equity 779 Emerging Market Equity 189 International Developed 97 Cryptocurrency 37 Alternative 29 Closed 1 Leveraged/Inverse (2) Commodity & (1,058) Currency WisdomTree – Q1/22
Slide 22: Balance Sheet
Balance Sheet Balance Sheet YTD Change in Cash & Securities (1) ($ millions) Mar. 31, Dec. 31, ($ millions) 2022 2021 Assets Cash and securities (1) $244.5 $268.2 Investments 20.9 14.2 Accounts receivable 35.2 32.1 Deferred tax asset, net 3.8 8.9 Fixed assets, net 0.6 0.6 Goodwill and intangibles 68
Slide 23: Convertible Notes - EPS
Convertible Notes - EPS Incremental shares issuable when conversion spread is positive are included in diluted EPS computation. Q1 2022 computations shown below: Issued 2020 Issued 2021 $175M Notes $150M Notes Conversion Spread WETF Avg Price in Qtr $5.71 $5.71 Conversion Price $5.92 $11.04 Conversi
Slide 24: Consolidated Financial Results
Consolidated Financial Results 2021 2022 Q1 Q2 Q3 Q4 Q1 Revenues Advisory fees $ 70,042 $ 74,169 $ 76,400 $ 77,441 $ 76,517 Other income 1,214 1,606 1,712 1,734 1,851 Total revenues 71,256 75,775 78,112 79,175 78,368 Expenses Compensation and benefits 22,627 20,331 22,027 23,178 24,787 Fund manageme
Slide 25: Non-GAAP financial measurements
Non-GAAP financial measurements In an effort to provide additional information regarding our results as determined by GAAP, we also disclose certain non-GAAP information which we believe provides useful and meaningful information. Our management reviews these non-GAAP financial measurements when eva
Slide 26: Non-GAAP reconciliation to GAAP results
Non-GAAP reconciliation to GAAP results Three Months Ended Three Months Ended ($ in thousands) Mar. 31 Dec. 31 Sept. 30 Jun. 30 Mar. 31 ($ in thousands) Mar. 31 Dec. 31 Sept. 30 Jun. 30 Mar. 31 Unaudited 2022 2021 2021 2021 2021 Unaudited 2022 2021 2021 2021 2021 Adjusted net income and diluted earn
Slide 27: Reconciliation of US GAAP to Non-GAAP results
Reconciliation of US GAAP to Non-GAAP results Three Months ended March 31, 2022 Loss on Deferred Reduction of Deferred Tax Loss on Activist Loss on Tax US GAAP Consideration Tax Indemn. Val. Allowance Sec. Owned Campaign Exp. Investments Windfalls Non-GAAP Revenues Advisory fees $ 76,517 $ - $ - $ -
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