Wisdomtree, Inc. · NYSE:WT
Wisdomtree — Q2 2022 Earnings Presentation
27 slides from Wisdomtree's earnings presentation, Jul 29, 2022
Slide 1: Q2/22 Results
Q2/22 Results July 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: Q2/22 Highlights
Q2/22 Highlights + Net inflows of $3.9b for the quarter primarily driven by inflows AUM into fixed income: ($ billions) – Strongest flowing quarter since 2015 79.4 77.5 + Annualized organic growth rate of 13% YTD 73.9 74.3 74.3 72.8 + Other achievements: – 7 straight quarters of net inflows globally
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 1.4% due a lower average 78.1 79.2 78.4 77.3 advisory fee 75.8 16.8 16.3 15.7 14.1 + $2.3m after tax, non-cash gain associa
Slide 5: Expense Base - Rollforward
Expense Base - Rollforward Expense Base Change – Q1/22 to Q2/22 (1) ($ in thousands) + Fund launches and transaction-related fees contributing to higher fund costs + Higher spending on sales conferences + Lower third-party distribution costs due to market declines + Discretionary spending of $12.5m
Slide 6: 2022 Expense Guidance
2022 Expense Guidance + Reduced upper-end of compensation range as hiring plans are tempered Updated Prior Expense Item + Lower discretionary spending Guidance Guidance guidance on well-managed expenses Compensation $96m-$99m $92m-$102m + Digital asset spend of $11m-$12m Discretionary Spending(1) $5
Slide 7: WisdomTree's Focus Is Paying Off
WisdomTree’s Focus Is Paying Off Growth Initiatives Sustainable Top- and Bottom-Line Momentum Efficiency WisdomTree Measures Team WisdomTree – Q2/22 Results 7
Slide 8: WisdomTree's AUM is Balanced & Levered to Current Investment Themes
WisdomTree’s AUM is Balanced & Levered to Current Investment Themes $73b WisdomTree – Q2/22 Results 8
Slide 9: WisdomTree's Managed Models Franchise
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 10: 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 11: Through the Cycle, Organic Growth Accelerates Scale & Expands Op Margins
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 24% Material Margin 50% +
Slide 12: 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 13: 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 14: Crypto Winter Brings Opportunity and WisdomTree Has Key Advantages
Crypto Winter Brings Opportunity and WisdomTree Has Key Advantages Operational Efficiencies Trusted Brand Robust Risk Management Deep Regulatory Knowledge WisdomTree – Q2/22 Results 14
Slide 15: Building Holistic Suite of Blockchain Enabled Products & Solutions
Building Holistic Suite of Blockchain Enabled Products & Solutions Crypto Crypto Direct ETPs Indexing Gold US Dollar Token Token Robust New Product Pipeline WisdomTree – Q2/22 Results 15
Slide 16: 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 17: WisdomTree is a Multifaceted Growth Story
WisdomTree is a Multifaceted Growth Story Diverse Products + New Launches Scalability & Models Operating Traction Leverage Robust WETF Growth Crypto Tokenized Direct Assets & Indexing Funds ™ WisdomTree – Q2/22 Results 17
Slide 18: Q&A
Q&A
Slide 19: Appendix
Appendix
Slide 20: AUM and Net Inflows
AUM and Net Inflows Quarterly ETF AUM Change Q2/22 Net Flows by Category ($ billions) ($ millions) Fixed Income 4,038 U.S. Equity 306 Leveraged/Inverse 90 International Developed 79 Alternative 34 Cryptocurrency 3 Closed - Emerging Markets (223) Commodity & (475) Currency WisdomTree – Q2/22 Results
Slide 21: Balance Sheet
Balance Sheet Balance Sheet YTD Change in Cash & Securities (1) ($ millions) June 30, Dec. 31, ($ millions) 2022 2021 Assets (1) Cash and securities $238.9 $268.2 Investments 26.0 14.2 Accounts receivable 34.1 32.1 Deferred tax asset, net 6.1 8.9 Fixed assets, net 0.6 0.6 Goodwill and intangibles 68
Slide 22: Convertible Notes - EPS
Convertible Notes - EPS Incremental shares issuable when conversion spread is positive are included in diluted EPS computation. Q2 2022 computations shown below: Issued 2020 Issued 2021 $175M Notes $150M Notes Conversion Spread WETF Avg Price in Qtr $5.74 $5.74 Conversion Price $5.92 $11.04 Conversi
Slide 23: Consolidated Financial Results
Consolidated Financial Results 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Revenues Advisory fees $ 70,042 $ 74,169 $ 76,400 $ 77,441 $ 76,517 $ 75,586 Other income 1,214 1,606 1,712 1,734 1,851 1,667 Total revenues 71,256 75,775 78,112 79,175 78,368 77,253 Expenses Compensation and benefits 22,627 20,331 22,027 23
Slide 24: 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 25: Non-GAAP reconciliation to GAAP results
Non-GAAP reconciliation to GAAP results Three Months Ended Three Months Ended ($ in thousands) Jun. 30 Mar. 31 Dec. 31 Sept. 30 Jun. 30 ($ in thousands) Jun. 30 Mar. 31 Dec. 31 Sept. 30 Jun. 30 Unaudited 2022 2022 2021 2021 2021 Unaudited 2022 2022 2021 2021 2021 Adjusted net income and diluted earn
Slide 26: Reconciliation of US GAAP to Non-GAAP results
Reconciliation of US GAAP to Non-GAAP results Three Months ended June 30, 2022 Gain on Deferred Loss on Deferred Tax Activist Gain on Tax US GAAP Consideration Sec. Owned Val. Allowance Campaign Exp. Investments Shortfalls Non-GAAP Revenues Advisory fees $ 75,586 $ - $ - $ - $ - $ - $ - $ 75,586 Oth
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