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WisdomTree, Inc. (WT)·Q1 2025 Earnings Summary

Executive Summary

  • Record AUM of $115.8B (+5.5% q/q) and $3.0B net inflows drove resilient topline despite lower fee capture; adjusted EPS of $0.16 was a slight beat vs consensus, while revenue was a modest miss .
  • Q1 operating revenues were $108.1M (-2.4% q/q, +11.6% y/y); adjusted gross margin expanded to 80.8% (+150 bps q/q) as fund management/admin expenses fell .
  • Guidance largely unchanged for FY25; interest income raised to $8M (from $7M) and diluted share range tightened to 147–149M (from 149–150M); gross margin expected at the low end absent further AUM upside .
  • Strategic momentum: WDEF surpassed $1.4B since launch with $770M inflows in Q1 and >$700M in April; tokenized products gathered >$100M YTD and multi-chain access expanded (Arbitrum, Avalanche, Base, Optimism) .
  • Catalyst watch: September rollout of Prime on/off-chain transfer features, potential partner expansions tied to stablecoin legislation, continued model portfolios growth and European flows may influence sentiment near term .

What Went Well and What Went Wrong

What Went Well

  • “We are executing exceptionally well — delivering over $3 billion of net inflows in Q1, an 11% annualized organic growth rate” (COO) .
  • WDEF launch is “one of the most successful” with $770M in Q1 inflows and >$700M in April; strong Europe UCITS inflows (~$1.1B) amid favorable commodities backdrop .
  • CEO: “tokenized products… brought in over $100 million in flows YTD” and AI deployment across the platform to further efficiency; argues WT “is worthy of a higher multiple” .

What Went Wrong

  • Revenue down 2.4% q/q given two fewer trading days and a lower average advisory fee (0.35% vs 0.36% prior), partially offset by higher average AUM .
  • Emerging markets equity products saw net outflows; average fee capture declined 1 bp q/q, pressuring adjusted revenue yield (0.38% vs 0.39% prior) .
  • Seasonally higher compensation (payroll taxes/benefits tied to year‑end bonuses) weighed on margins; operating income margin slipped 10 bps q/q (31.6% vs 31.7%) .

Financial Results

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Operating Revenues ($USD Millions)96.8 113.2 110.7 108.1
Diluted EPS ($USD, GAAP)0.13 -0.13 0.18 0.17
Adjusted EPS ($USD, Non-GAAP)0.12 0.18 0.17 0.16
Operating Income Margin (%)28.9% 36.0% 31.7% 31.6%
Adjusted Operating Income Margin (%)29.7% 37.3% 31.7% 31.6%
Gross Margin (%) (Non-GAAP)79.3% 80.8% 79.3% 80.8%
AUM & Flow KPIsQ1 2024Q3 2024Q4 2024Q1 2025
Ending AUM ($USD Billions)107.2 112.6 109.8 115.8
Net Flows ($USD Billions)2.0 -2.4 -0.3 3.0
Average AUM ($USD Billions)102.5 110.4 112.3 114.6
Average Advisory Fee (%)0.36% 0.37% 0.36% 0.35%
Adjusted Revenue Yield (%)0.38% 0.39% 0.39% 0.38%
Revenue Days (#)91 92 92 90
Segment Net Flows (Q1 2025, $USD Millions)Value
Fixed Income2,088
U.S. Equity963
International Developed474
Leveraged/Inverse116
Alternatives100
Cryptocurrency-89
Commodity & Currency-159
Emerging Markets-445
Additional KPIsQ4 2024Q1 2025
Headcount313 315
Number of Products (end of period)353 375 (incl. 17 digital assets)
Tokenized AUM ($USD Millions)—132
WisdomTree Prime AUM ($USD Millions)—4
Prime Opened Accounts—28,000
Prime Funded Accounts—2,700
Average Daily User Transactions (Prime, Q1)—83
Quarterly Dividend ($/share)0.03 0.03 (payable May 28, 2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Compensation / Revenue RatioFY 202528%–30% 28%–30% Maintained
Discretionary Spending ($USD Millions)FY 202568–72 68–72 Maintained
Gross Margin (full year)FY 202581%–82% 81%–82% (low-end at current AUM) Maintained; skew to low-end
Third-Party Distribution Fees ($USD Millions)FY 202511–12 11–12 Maintained
Interest Expense ($USD Millions)FY 202520 20 Maintained
Interest Income ($USD Millions)FY 20257 8 Raised
Adjusted Tax Rate (%)FY 202524%–25% 24%–25% Maintained
Diluted Shares – Weighted (Millions)FY 2025149–150 147–149 Lowered

Earnings Call Themes & Trends

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
AI/Technology InitiativesEmphasis on Prime/Connect platform development Execution discipline; BNY custody migration costs “Begin deploying AI across every aspect of our global platform” (CEO); 3 buckets for AI impact (CX, efficiency, decision-making) (COO) Accelerating
Tokenization/Digital AssetsLaunch of WisdomTree Connect; tokenized RWA access Europe: leading crypto ETP flows; BTCW >$1B AUM >$100M YTD tokenized flows; multi-chain expansion; on/off-ramps targeting summer, broader rollout in September Strengthening
Product Performance (WDEF)——WDEF $770M Q1 inflows; >$700M in April; surpassed $1.4B YTD New positive driver
Regional TrendsEurope UCITS suite strength emerging Europe crypto ETP leadership Europe UCITS inflows ~$1.1B; commodities tailwinds Improving
Regulatory/LegalSEC ESG settlement penalty ($4M) Insurance‑covered legal expenses grossed in GAAP; conversion loss Insurance reimbursement received Apr 7, 2025; adjusted tax rate 25.6% Normalizing
Macro Mix (Commodities/EM)Commodities up; EM mixed Commodities mixed; EM outflows Favorable commodities offset U.S. market headwinds; EM equity outflows Mixed

Management Commentary

  • CFO: “$108 million of revenue… down slightly due to two fewer trading days and lower average fee capture… adjusted net income $23 million or $0.16 per share… 2025 guidance remains largely unchanged” .
  • COO: “Over $3 billion net inflows… exceptional WDEF launch… on-chain transfers for subset of users in coming months, broader functionality in September… model portfolios AUA $4B, ~20% annualized organic growth” .
  • CEO: “Tokenized products brought in over $100 million YTD… diversified AUM across geographies/asset classes… deploying AI across the platform… WisdomTree is worthy of a higher multiple” .
  • Press release: “Record AUM of $115.8B… 11% annualized organic growth… diluted EPS $0.17 ($0.16 as adjusted)… quarterly dividend $0.03” .

Q&A Highlights

  • Prime on/off-ramps: External transferability to crypto-native wallets targeted in a measured summer rollout; broader functionality/marketing push by September .
  • Partnerships: Early “green shoots” via WisdomTree Connect with ~$100M flows YTD; no specific partner announcements guided .
  • AI deployment: Firmwide use cases in customer outcomes, growth/efficiency, decision-making; culture cited as implementation advantage in regulated finance .
  • Crypto ETPs pipeline: Europe leading with 20-coin basket (~$100M early capital); U.S. Bitcoin focus; stablecoin legislation seen as a growth lever for Prime and Connect .

Estimates Context

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue – Actual ($USD Millions)96.8 113.2 110.7 108.1
Revenue – Consensus ($USD Millions)94.3*110.1*110.7*109.0*
Revenue Surprise ($USD Millions)+2.5+3.10.0-0.9
Primary EPS – Actual ($USD)0.12 (Adj) 0.18 (Adj) 0.17 (Adj) 0.16 (Adj)
Primary EPS – Consensus ($USD)0.108*0.167*0.18*0.153*
EPS Surprise ($USD)+0.012+0.013-0.010+0.007

Values retrieved from S&P Global.*

Interpretation:

  • Q1 2025: EPS beat ($0.007) on resilient margins despite seasonal comp; revenue slight miss ($0.9M) driven by lower fee capture and fewer trading days.
  • Q3 2024: Broad beats (revenue +$3.1M; EPS +$0.013) aided by higher average AUM and insurance-related other revenues .

Key Takeaways for Investors

  • Flows momentum and diversified AUM are intact; watch continued Europe UCITS strength and commodities mix to support topline even with slight fee compression .
  • Guidance is steady; margin regime resilient. Near-term upside hinges on sustaining net inflows and average fee stabilization; gross margin likely at low end absent AUM upside .
  • Strategic growth vectors (WDEF, model portfolios, tokenization) are scaling; September Prime functionality rollout is a tangible catalyst for digital adoption .
  • Estimate path: Modest EPS beats with small revenue variances suggest consensus may need fine-tuning around fee capture and trading day effects; monitor adjusted tax rate (25.6% in Q1) .
  • Capital returns stable: $0.03 quarterly dividend maintained; share count guidance trimmed, reducing potential dilution; monitor convertible note dilution mechanics in varying price scenarios .
  • Risk watch: EM equity outflows, fee yield drift, macro volatility; regulatory normalization post-SEC settlement and multi-chain expansion are supportive .