WisdomTree Emerging Markets Quality Dividend Growth Fund · NASDAQ:DGRE
WisdomTree Emerging Markets Quality Dividend Growth Fund — WisdomTree — Q3 2022 Earnings Presentation
25 slides from WisdomTree Emerging Markets Quality Dividend Growth Fund's earnings presentation, Oct 28, 2022
Slide 1: Q3/22 Results
Q3/22 Results October 28, 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: Q3/22 Highlights
Q3/22 Highlights + Net inflows of $1.7b for the quarter primarily driven by inflows AUM ($ billions) into fixed income and U.S. equity offset by outflows from 77.5 79.4 commodities: 72.8 74.3 70.9 74.6 – 8 straight quarters of net inflows globally – U.S inflows for 26 of the last 27 months ($3.8b in
Slide 4: Revenues and Earnings Results
Revenues and Earnings Results Revenue, Income, Operating Margin, EPS Highlights/Unusual Items ($ millions) Total Revenues Adjusted Net Income (non-GAAP)(1) + Revenues decreased 6.3% due to impact of negative market movement on our AUM and a 78.1 79.2 78.4 77.3 lower average advisory fee 16.3 15.7 72
Slide 5: Expense Base - Rollforward
Expense Base - Rollforward Expense Base Change – Q2/22 to Q3/22(1) ($ in thousands) + Lower expenses driven primarily from lower incentive compensation accruals, lower marketing and sales-related expenses + Discretionary spending of $11.6m ($35.4m YTD) Discretionary spending includes marketing, sale
Slide 6: 2022 Expense Guidance
2022 Expense Guidance + Compensation and discretionary Updated Prior spending guidance previously updated Expense Item in prior quarter to tighten and reduce Guidance Guidance the high-end of ranges as cost control Compensation $96m-$99m unchanged measures were implemented Discretionary Spending(1)
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 Digital Assets Charts a Course for Accelerated Long-Term Growth Tap into Scale Benefits and Improving
Slide 8: Net Inflows are Strong and Diversified
Net Inflows are Strong and Diversified + Best in class ~14% annualized pace of net inflows + $8.5 billion of YTD net inflows, including 6 of 8 major product categories – U.S. Equity products inflowing at a 13% pace – Nearly $10b in Fixed Income inflows Net Flows ($m) Annualized Flow Rate Q3 YTD Q3 Y
Slide 9: WisdomTree's Product Lineup has Strong Performance
WisdomTree’s Product Lineup has Strong Performance ETF AUM by Morningstar Rating 52% + 40% of ETF AUM has a 4- or 5-star rating from Morningstar + Less than 6% of ETF AUM is 1- or 2-star rated 30% + Bulk of AUM in 1st & 2nd performance quartiles vs. peers 10% 5% – Particular strength in the very sho
Slide 10: 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 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 & Revenue 23% Material Margin 50% +
Slide 12: 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 13: Building Holistic Suite of Blockchain-Enabled Products & Solutions
Building Holistic Suite of Blockchain-Enabled Products & Solutions Crypto Crypto Direct ETPs Indexing Short-Term Digital Gold US Dollar Treasury Token Token Fund Robust New Product Pipeline WisdomTree – Q3/22 Results 13
Slide 14: 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 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 Crypto Tokenized Direct Assets & Indexing Funds ™ WisdomTree – Q3/22 Results 15
Slide 16: Q&A
Q&A
Slide 17: Appendix
Appendix
Slide 18: AUM and Net Inflows
AUM and Net Inflows Quarterly ETF AUM Change Q3/22 Net Flows by Category ($ billions) ($ millions) Fixed Income 2,627 U.S. Equity 1,239 Emerging Markets 114 Leveraged/Inverse 45 Alternative 16 Cryptocurrency - Closed - International Developed (115) Commodity & (2,179) Currency WisdomTree – Q3/22 Res
Slide 19: Balance Sheet
($ millions) Balance Sheet Balance Sheet YTD Change in Cash & Securities (1) ($ millions) Sept. 30, Dec. 31, 2022 2021 Assets Cash and securities (1) $258.1 $268.2 Investments 26.3 14.2 Accounts receivable 25.3 32.1 Deferred tax asset, net 6.9 8.9 Fixed assets, net 0.6 0.6 Goodwill and intangibles 6
Slide 20: Convertible Notes - EPS
Convertible Notes - EPS Incremental shares issuable when conversion spread is positive are included in diluted EPS computation. Q3 2022 computations shown below: Issued 2020 Issued 2021 $175M Notes $150M Notes Conversion Spread WETF Avg Price in Qtr $5.11 $5.11 − Conversion Price $5.92 $11.04 Conver
Slide 21: Consolidated Financial Results
Consolidated Financial Results 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Revenues Advisory fees $ 70,042 $ 74,169 $ 76,400 $ 77,441 $ 76,517 $ 75,586 $ 70,616 Other income 1,214 1,606 1,712 1,734 1,851 1,667 1,798 Total revenues 71,256 75,775 78,112 79,175 78,368 77,253 72,414 Expenses Compensation and benefit
Slide 22: 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 23: Non-GAAP reconciliation to GAAP results
Non-GAAP reconciliation to GAAP results Three Months Ended Three Months Ended ($ in thousands) Sept. 30 Jun. 30 Mar. 31 Dec. 31 Sept. 30 ($ in thousands) Sept. 30 Jun. 30 Mar. 31 Dec. 31 Sept. 30 Unaudited 2022 2022 2022 2021 2021 Unaudited 2022 2022 2022 2021 2021 Adjusted net income and diluted ea
Slide 24: Reconciliation of US GAAP to Non-GAAP results
Reconciliation of US GAAP to Non-GAAP results Three Months ended September 30, 2022 Gain on Deferred Loss on Deferred Tax Gain on Tax US GAAP Consideration Sec. Owned Val. Allowance Investments Shortfalls Non-GAAP Revenues Advisory fees $ 70,616 $ - $ - $ - $ - $ - $ 70,616 Other income 1,798 - - -
Slide 25: a aa
a aa WISDOM IREE’