WisdomTree, Inc. (WT)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered a clean EPS beat and effectively in-line revenues: diluted EPS (as adjusted) was $0.18, above S&P Global consensus $0.175; GAAP diluted EPS was $0.17. Operating revenues were $112.6M vs consensus $112.8M, a de minimis miss on strong AUM-driven momentum .*
• Record ending AUM of $126.1B and $3.5B net inflows, led by international developed equity and U.S. equity, with European-listed ETP inflows of $2.2B in the quarter; adjusted revenue yield and average advisory fee held steady at 0.38% and 0.35% respectively .
• Gross margin expanded to 81.1% and adjusted operating margin rose to 32.5% despite acquisition-related costs; GAAP operating margin was 30.8% .
• Strategic catalyst: definitive agreement to acquire Ceres Partners (premier U.S. farmland manager) for $275M cash upfront plus up to $225M earn-out; day-one accretive, margin-enhancing, and positions WT in private markets with upside from solar, AI data center, and water adjacencies .
• Dividend maintained at $0.03 per share (payable Aug 27, 2025), reinforcing capital return discipline while WT pursues accretive growth in ETFs, models, tokenization, and private assets .

What Went Well and What Went Wrong

What Went Well

• Record AUM and broad-based inflows: $126.1B ending AUM, $3.5B net inflows; Europe contributed $2.2B, and the WisdomTree Europe Defence UCITS ETF amassed ~$3.5B AUM and ~$2.1B quarterly flows, demonstrating thematic product strength .
• Margin expansion and earnings quality: adjusted operating margin increased to 32.5%, gross margin reached 81.1%, and adjusted EPS of $0.18 beat consensus on higher average AUM and disciplined expenses .*
• Clear strategic expansion into private markets via Ceres: “We see a credible path to managing roughly $10 billion in farmland assets over the next decade—adding a durable private-markets tailwind to our ETP, model-portfolio, and tokenization growth strategy.” — Jarrett Lilien, President & COO .

What Went Wrong

• Slight revenue miss vs consensus: operating revenues of $112.6M were ~$0.19M below the S&P Global consensus ($112.8M), implying minor underperformance vs sell-side models despite strong AUM-driven growth .*
• GAAP operating margin compressed modestly q/q to 30.8% due to acquisition-related costs; absent these, adjusted operating margin rose to 32.5%, highlighting sensitivity to one-time transaction expenses .
• FX headwinds: management flagged ~$3M adverse impact to discretionary expense guidance if current FX rates persist; while largely neutralized by foreign-denominated revenues, the translation risk remains an operational consideration .

Financial Results

Core P&L vs Prior Periods

Q2 2025 vs S&P Global Consensus

Values retrieved from S&P Global.*

AUM and Flow KPIs

Segment/Region Detail (End-of-Period)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “With our acquisition of Ceres Partners…we see a credible path to managing roughly $10 billion in farmland assets over the next decade—adding a durable private-markets tailwind to our ETP, model-portfolio, and tokenization growth strategy.” — Jarrett Lilien, President & COO .
• “This transaction adds real strength to our business today and even more potential over the long term…By 2030, we expect to raise at least $750 million into farmland-focused strategies.” — Jonathan Steinberg, CEO .
• “Revenues were $112.6 million during the quarter…our adjusted net income for the quarter was $25.9 million or $0.18 per share.” — Bryan Edmiston, CFO .
• “Our stablecoin strategy is built on two products, USDW and WTGXX…By owning the infrastructure across issuance, reserves, and treasury tools…we’ve built a unified platform that’s ready to scale.” — Jarrett Lilien, President & COO .

Q&A Highlights

• Farmland fund structure and performance fees: Evergreen structure with annual withdrawals; performance fees driven by rental income and annual appraisal marks (historically ~6% appreciation), not limited to realizations; solar and AI data center overlays add upside optionality .
• Distribution strategy for Ceres: Leverage WT’s U.S. distribution pipes across RIAs, family offices, and institutions; five-year earn-out aligns growth; target at least $750M raises in five years .
• FX and operating guidance: Third-party distribution fees raised to $14–$15M; ~$3M FX headwind to discretionary expenses with largely immaterial net effect to operating results; diluted shares at 146.6M with converts non-dilutive this quarter .
• Digital assets traction and market size: Stablecoin market could reach ~$3.5–$3.7T by 2030; WTGXX acting as yield-bearing reserve across chains; on-chain transfer capabilities launching in fall to broaden use cases .

Estimates Context

• EPS came in above S&P Global consensus: adjusted/primary EPS $0.18 vs $0.175 consensus; GAAP diluted EPS was $0.17, reflecting acquisition-related costs. Revenue was effectively in-line: $112.6M actual vs $112.8M consensus.*
• Implications: Minor revenue variance suggests models were broadly accurate on fee capture; EPS beat reflects higher adjusted profitability and disciplined expense control; consensus should adjust for (1) private markets accretion post-close, (2) gross margin resilience, and (3) FX translation dynamics on expenses.*

Values retrieved from S&P Global.*

Key Takeaways for Investors

• WT’s growth flywheel is intact: record AUM, diversified inflows across U.S., Europe, and digital, and margin expansion on adjusted basis; near-term earnings quality remains solid .
• The Ceres acquisition adds a new secular tailwind with day-one accretion and credible long-term capacity to scale farmland to multi-billion AUM, enhancing fee capture and operating margins; expect this to be a stock narrative catalyst as the deal closes and pipelines build .
• Thematic product leadership (European Defence) is scaling rapidly and travelable across regions; watch continued asset gathering and cross-listings as drivers of organic revenue growth .
• Digital asset infrastructure (USDW, WTGXX) positions WT to participate in a potentially multi-trillion stablecoin and tokenized money market ecosystem; near-term milestones (on-chain transfers) can unlock wallet share growth .
• Expense control and FX: while FX creates ~$3M headwind to discretionary expenses, management indicates net operating impact is immaterial given revenue offsets; monitor operating leverage as AUM expands .
• Dividend intact at $0.03 with flexibility for accretive capital deployment (buybacks, strategic deals); supports balanced capital allocation during growth investments .
• Near-term trading: favor strength into Q4 deal close and ongoing inflow momentum; any pullbacks on transient margin optics (e.g., deal costs) could be opportunities given adjusted margins and revenue capture trajectory .

Notes:
* Values retrieved from S&P Global.