Slide 1: Q4 2023 Results
Q4 2023 Results February 2, 2024
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: 2023 and Q4 Highlights
2023 and Q4 Highlights + Year of transformation and table-setting for future growth: AUM – Record AUM of $100b at December 31st ($ billions) 100.1 100.6 – Record revenues of $349m; +16% vs. prior year 90.7 93.7 93.7 82.0 – 520bps of operating margin expansion vs. prior year – Net inflows of $10.4b i
Slide 4: Revenues and Earnings Results
Revenues and Earnings Results Revenues, Income, Operating Margin, EPS Operating Margin Expansion 12 Months Ended ($ millions) Dec. 31, Dec. 31, Total Revenues Adjusted Net Income (non-GAAP)(1) Adjusted Operating Margins (YTD) 2023 2022 Change Operating revenues $ 349,035 $ 301,345 16% 90.4 18.0 90.8
Slide 5: Expense Base - Rollforward
Expense Base - Rollforward Expense Base Change – Q3/23 to Q4/23 ($ in thousands) + Expenses largely unchanged vs. Q3 + Annual compensation ($109.5m) and discretionary spending ($59.3m) within 2023 guidance Discretionary spending includes marketing, sales, professional fees, occupancy & equipment, de
Slide 6: 2024 Expense Guidance
2024 Expense Guidance + Compensation guidance contemplates new hires, year-end compensation adjustments and variability 2024 in incentive compensation: Expense Item 2023 Actual – Q1 Seasonality: estimated compensation Guidance expense of $30m to $31m Compensation $108m-$118m $109.5m + Discretionary
Slide 7: WisdomTree's Growth Algorithm
WisdomTree’s Growth Algorithm Ongoing Inflow Momentum as AUM is Levered to Attractive Investment Themes Add ‘Stickier’ Inflows from Expanding & Deepening Managed Model Relationships Early Mover into Tokenization Charts a Course for Accelerated Long-Term Growth Tap into Scale Benefits and Improving M
Slide 8: WisdomTree's Product Lineup has Strong Performance
WisdomTree’s Product Lineup has Strong Performance WT’s AUM Grew at a 14% CAGR Over the Past Three Years + Over $10b of inflows in 2023 after generating over $12b of net inflows in 2022 + Best-in-class 13% organic growth rate in 2023, including net inflows in 6 of 8 major product categories + Q4 202
Slide 9: WisdomTree Portfolio Solutions Distribution Strategy
WisdomTree Portfolio Solutions Distribution Strategy + WisdomTree’s ability to deliver strong model performance and asset growth allows the firm to navigate rigorous selection processes at some of the leading wealth management firms in the U.S. + Portfolio Solutions models distribution strategy is t
Slide 10: WisdomTree Portfolio Solutions: Showcasing the Models Opportunity
WisdomTree Portfolio Solutions: Showcasing the Models Opportunity ADDRESSABLE MARKET + WisdomTree Portfolio Solutions momentum is accelerating • 300,000 Advisors – 2,000 advisors use at least one WisdomTree Managed Model • $27 Trillion AUM today, more than double the penetration from year-end 2022 –
Slide 11: Material Margin Improvement
Through the Cycle, Organic Growth Accelerates Scale & Expands Op Margins Illustrative Annual AUM & Revenue Growth Algorithm over the Long Run 5% - 10% 5% - 10% 10% - 20% Organic Growth Market Return AUM & Revenue Growth Illustrative Margin Outlook from Scaling AUM & Revenues 26.8% Material Margin 50
Slide 12: WisdomTree Prime is Live in 38 States
WisdomTree Prime™ is Live in 38 States The financial app, built on blockchain tech, that lets you spend, save, transfer, and invest digital assets like Bitcoin, Ether, Gold tokens, Equity Funds, Fixed Income Funds and more. WisdomTree Prime™ is now available to nearly 70% of the U.S. population with
Slide 13: Asset Tokenization & Digital Funds: Significant Distribution Optionality
Asset Tokenization & Digital Funds: Significant Distribution Optionality B2B and B2B2C (OUTSIDE APP) DIRECT TO CUSTOMER (IN APP) Equity Gold Digital Fixed Token Funds Income Siegel Money Funds Market WUSD BTC ETH Crypto Indexes ETPs WisdomTree – Q4/23 Results 13
Slide 14: The Industry is Already Shifting, though WT is a Few Years Ahead
The Industry is Already Shifting, though WT is a Few Years Ahead Jan 24 Nov 23 Oct 23 Launched Tokenized BlackRock Money ETFs were ‘step one’ in the financial Plans launch of custody services for Market Fund Shares as Collateral with revolution, ‘step two’ will be the tokenized gold and interdealer
Slide 15: WisdomTree is a Multifaceted Growth Story
WisdomTree is a Multifaceted Growth Story Diverse Products + New Launches Scalability & Models Operating Traction Leverage Robust WT Growth Tokenized Crypto Real World Exposures Assets & Digital Funds ™ Live in 38 States WisdomTree – Q4/23 Results 15
Slide 16: Q&A
Q&A
Slide 17: Appendix
Appendix
Slide 18: AUM and Net Flows
AUM and Net Flows Quarterly ETP AUM Change Q4/23 Net Flows by Category ($ billions) ($ millions) U.S. Equity 487 Emerging Markets 412 Alternative 32 Cryptocurrency 28 International Developed 9 Leveraged/Inverse (59) Commodity & (449) Currency Fixed Income (715) WisdomTree – Q4/23 Results 18
Slide 19: Balance Sheet
Balance Sheet Balance Sheet YTD Change in Cash & Securities (1) ($ millions) Dec. 31, Dec. 31, ($ millions) 2023 2022 Assets Cash and financial instruments (1) $188.2 $258.6 Investments 9.7 35.7 Accounts receivable 35.5 30.5 Deferred tax asset, net 11.1 10.5 Fixed assets, net 0.4 0.5 Goodwill and in
Slide 20: Consolidated Financial Results
Consolidated Financial Results 2022 2023 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenues Advisory fees $ 76,517 $ 75,586 $ 70,616 $ 70,913 $ 77,637 $ 82,004 $ 86,598 $ 86,988 Other income 1,851 1,667 1,798 2,397 4,407 3,720 3,825 3,856 Total revenues 78,368 77,253 72,414 73,310 82,044 85,724 90,423 90,844 Expenses
Slide 21: 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 22: Non-GAAP reconciliation to GAAP results
Non-GAAP reconciliation to GAAP results Three Months Ended Three Months Ended ($ in thousands) Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31 ($ in thousands) Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31 Unaudited 2023 2023 2023 2023 2022 Unaudited 2023 2023 2023 2023 2022 Adjusted net income and diluted earn
Slide 23: Reconciliation of US GAAP to Non-GAAP results
Reconciliation of US GAAP to Non-GAAP results Three Months ended December 31, 2023 QTD Dec. 31 Gain on Gain on Imputed DTA Tax US GAAP Impairments Sec. Owned Inv. Interest Val. Allow Windfalls Non-GAAP Revenues Advisory fees $ 86,988 $ - $ - $ - $ - $ - $ - $ 86,988 Other income 3,856 - - - - - - 3,
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