WisdomTree (WT)·Q4 2025 Earnings Summary

WisdomTree Smashes Q4 as Margins Hit 42%, Stock Dips on Profit-Taking

January 30, 2026 · by Fintool AI Agent

WisdomTree delivered a blowout Q4 2025, posting record AUM of $144.5B and adjusted EPS of $0.29—crushing estimates by 23%—as the recently completed Ceres acquisition and surging tokenization business drove operating margin expansion to 41.7%. Despite the strong beat, shares fell 2.5% as investors locked in profits near 52-week highs.

Did WisdomTree Beat Earnings?

Yes, decisively. WisdomTree beat on both key metrics:

The EPS beat was driven by:

• Record AUM of $144.5B (+32% YoY)
• Ceres acquisition contributing $12.0M in Q4 revenue, including $7.1M of performance fees
• Operating margin expansion to 41.7% (vs 31.7% in Q4 2024)

Full year adjusted EPS grew 34% YoY while Q4 EPS surged 71% YoY.

What Changed From Last Quarter?

Three major developments drove the Q4 outperformance:

1. Ceres Acquisition Closes

WisdomTree completed its acquisition of Ceres Partners on October 1, 2025, adding $1.9B of private assets (farmland) to the platform. The deal:

• Adds ~200 bps to annualized revenue capture and operating margins
• Generated $12.0M revenue in Q4 (including $7.1M performance fees)
• Diversifies AUM into alternative assets with low correlation to equities

2. Tokenization Business Explodes

WisdomTree's digital assets platform hit $770M in tokenized AUM—a 25x increase from year-end 2024.

• 3,500 active wallets holding WisdomTree tokenized products
• 29 WisdomTree Connect users (7x growth YoY)
• Products span money market funds, private credit, equity, and fixed income
• New York users can now fund with stablecoins for the first time

3. Margin Expansion Accelerates

Full year adjusted operating margin hit 36.5%, up 290 bps from 2024, with Q4 alone at 41.7%. Management highlighted incremental margins exceeding 50%, setting up continued expansion as AUM scales.

How Did the Stock React?

Despite the strong beat, WT shares fell 2.5% to $16.54, a classic "sell the news" reaction after the stock hit 52-week highs of $17.05 in the days leading up to earnings.

Key context:

• WT is up 121% over the past year (from 52-week low of $7.47)
• The stock traded near all-time highs going into the print
• Volume of 7.4M shares was elevated vs. average

The market appears to have largely priced in the strong results, with investors taking profits after an exceptional run.

What Did Management Guide?

WisdomTree provided comprehensive 2026 guidance:

Key guidance items:

• Q1 seasonality: Compensation ratio estimated at ~30% due to year-end bonuses
• Debt retirement: Company plans to retire "potentially all" of the $150M 2026 convertible notes at maturity in June
• Share count increase: Diluted shares expected to rise to 152-157M from ~145M due to convertible note dilution

AUM and Flow Trends

WisdomTree's diversified platform delivered strong results across all regions:

Notable flow dynamics:

• Net outflows of $0.3B in Q4 were offset by $5.8B market appreciation and $1.8B from Ceres
• Full year organic growth rate of 8% — ahead of most public peers
• Net inflows into 7 of 8 major product categories
• European Defense ETF was "one of the most successful launches in firm history"

Models & SMAs Growth:

• Model AUA grew to $6B (from $3.8B at end of 2024)
• Strong growth in custom model mandates enhancing client stickiness
• SMA capabilities expanded through Quorus acquisition

Updated AUM (as of Jan 28, 2026): AUM has already grown to $160.8B, up 11% from year-end, driven by positive market movement and $1.9B of net inflows YTD.

Q&A Highlights: What Analysts Asked

The earnings call Q&A revealed additional color on growth drivers and strategic priorities:

European Thematic Leadership

Management highlighted explosive growth in European thematics. The rare earth fund (RARE) grew from $100M in November to $700M today, with three rare earth and strategic metals funds now at $1.4B combined. WisdomTree captured 25% of all flows to thematics in January alone.

Tokenization Scaling Strategy

CEO Jonathan Steinberg made a bold prediction about the tokenized money market fund:

Will Peck (Head of Digital Assets) outlined four primary use cases for tokenized products:

1. Stablecoin reserves - Eligible under GENIUS Act regulations
2. Treasury management - Yield-bearing asset for crypto-native businesses
3. Collateral instrument - For faster collateral mobility
4. On-chain investing - DeFi investors seeking real-world asset exposure

Ceres Integration Update

Management confirmed the Ceres acquisition integration "could not have gone more smoothly," with the business delivering 8% annualized organic growth in Q4. The team has averaged 6-7% net inflows over the past 10 years with zero years of net outflows.

Valuation Commentary

CEO Steinberg noted WisdomTree trades at 7-8x earnings, below the S&P 500, calling the company "underappreciated" given its diversified platform spanning public ETFs, tokenization leadership, and private assets.

Strategic Priorities for 2026

Management outlined four key themes:

1. Grow & Diversify Revenue Streams

   • Expand model portfolios and portfolio solutions (Model AUA reached $6.1B)
   • Grow non-asset-based fees (Ceres performance fees, index licensing)

2. Disciplined Execution

   • WisdomTree now has 34 products with over $1B in AUM (up from 25 at year-end 2024)
   • Invested in AlphaBeta, an Israeli AI firm, for product development
   • Launched quantum computing fund which raised $150M in short time

3. Strategic Innovation

   • Lead the secular shift toward tokenization—over $735M in tokenized asset flows in 2025
   • Explore new products/services to accelerate growth

4. Proactive Capital Deployment

   • Ceres acquisition levers growth to private assets secular trend
   • Maintain proactive stance toward capital management

Historical Earnings Performance

WisdomTree has delivered 9 consecutive quarters of EPS beats:

Values retrieved from S&P Global

Balance Sheet Snapshot

Total debt increased significantly due to the $475M convertible notes issued in 2025 (2030 maturity) to partially fund the Ceres acquisition.

Key Risks and Considerations

Near-term headwinds:

• Share dilution: Diluted shares expected to increase 5-8% in 2026 due to convertible notes
• Interest expense: Rising to $40M from $28.6M due to new debt
• Q4 flow weakness: Net outflows of $0.3B in Q4 after strong first three quarters

Structural risks:

• Heavy concentration in equity and commodity ETFs—market drawdowns could pressure AUM
• Digital assets/tokenization still early stage with unproven economics at scale
• Competition from larger asset managers in ETF space

Bottom Line

WisdomTree delivered an exceptional Q4 with 23% EPS upside, record AUM, and operating margins expanding to 41.7%. The Ceres acquisition and tokenization momentum provide clear growth catalysts for 2026. While the stock sold off 2.5% on profit-taking near 52-week highs, the fundamental story remains strong with management guiding to continued margin expansion and organic growth.

Key metrics to watch:

• AUM trajectory (already at $160.8B as of Jan 28)
• Tokenized assets adoption and Connect user growth
• Q1 2026 compensation ratio (seasonal headwind expected)
• June 2026 convertible note maturity handling

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Analysis based on WisdomTree Q4 2025 earnings presentation and earnings call transcript dated January 30, 2026.