Wisdomtree, Inc. · NYSE:WT
Wisdomtree — Q4 2022 Earnings Presentation
24 slides from Wisdomtree's earnings presentation, Feb 3, 2023
Slide 1: Q4 2022 Results
Q4 2022 Results February 3, 2023
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: Q4/22 Highlights
Q4/22 Highlights + Net inflows of $5.3b for the quarter primarily driven by inflows AUM ($ billions) into fixed income, U.S. equity and commodity products: – Highest flowing quarter since 2015 – 9 straight quarters of net inflows globally – U.S. ETF inflows for 30 of the last 31 months ($4.2b in the
Slide 4: Revenues and Earnings Results
Revenues and Earnings Results Revenue, Income, Operating Margin, EPS Highlights/Unusual Items ($ millions) Total Revenues Adjusted Net Income (non-GAAP)(1) + Revenues essentially unchanged from prior quarter as higher average AUM was offset by a 79.2 78.4 77.3 decline in our average advisory fee 72.
Slide 5: Expense Base - Rollforward
Expense Base - Rollforward Expense Base Change – Q3/22 to Q4/22 ($ in thousands) + Higher expenses driven primarily from higher incentive compensation accruals, as well as seasonally higher marketing and sales-related expenses + Annual compensation expense of $97.9m (middle of guidance range) + Annu
Slide 6: 2023 Expense Guidance
2023 Expense Guidance + Compensation guidance contemplates new hires, year-end compensation adjustments and variability in incentive 2023 2022 compensation Expense Item Guidance Actual – Q1 Seasonality: estimated compensation expense of $27m- Compensation $96m-$106m $97.9m $28m + Discretionary spend
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: WisdomTree's Product Lineup has Strong Performance
WisdomTree’s Product Lineup has Strong Performance 3-Yr Lookback at Trailing 12-Month Net Inflow Rate 20% + Net inflow momentum has accelerated over the last three-plus years for a strong 2022 15% – 16% firm-wide pace of organic growth 10% – U.S. Equity strategies achieved a 14% inflow rate 5% – Fix
Slide 9: 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 10: 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 21.4% Material Margin 50%
Slide 11: 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 12: Robust Digital Product Suite for Broad Public Roll-Out
Robust Digital Product Suite for Broad Public Roll-Out (with More to Come) Blockchain-Enabled Equity Funds Blockchain-Enabled Bond Funds • Floating Rate Treasury Digital Fund • WisdomTree 500 Digital Fund • Short-Term Treasury Digital Fund • Technology & Innovation 100 Digital Fund • 3-7 Year Treasu
Slide 13: 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 14: WisdomTree is a Multifaceted Growth Story
WisdomTree is a Multifaceted Growth Story Diverse Products + New Launches Scalability & Models Operating Traction Leverage Robust WT Growth Tokenized Crypto Real World Exposures Assets & Digital Funds ™ In App Stores in Q2 WisdomTree – Q4/22 Results 14
Slide 15: Q&A
Q&A
Slide 16: Appendix
Appendix
Slide 17: AUM and Net Inflows
AUM and Net Inflows Quarterly ETF AUM Change Q4/22 Net Flows by Category ($ billions) ($ millions) Fixed Income 3,392 U.S. Equity 1,022 Commodity & 796 Currency Leveraged/Inverse 59 International Developed 40 Alternative 12 Closed - Cryptocurrency (4) Emerging Markets (53) WisdomTree – Q4/22 Results
Slide 18: Balance Sheet
Balance Sheet Balance Sheet YTD Change in Cash & Securities (1) ($ millions) Dec. 31, Dec. 31, ($ millions) 2022 2021 Assets Cash and financial instruments (1) $258.6 $268.2 Investments 35.7 14.2 Accounts receivable 30.5 32.1 Deferred tax asset, net 10.5 8.9 Fixed assets, net 0.5 0.6 Goodwill and in
Slide 19: Convertible Notes - EPS
Convertible Notes - EPS Incremental shares issuable when conversion spread is positive are included in diluted EPS computation. Q4 2022 computations shown below: Issued 2020 Issued 2021 $175M Notes $150M Notes Conversion Spread WETF Avg Price in Qtr $5.20 $5.20 − Conversion Price $5.92 $11.04 Conver
Slide 20: Consolidated Financial Results
Consolidated Financial Results 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenues Advisory fees $ 70,042 $ 74,169 $ 76,400 $ 77,441 $ 76,517 $ 75,586 $ 70,616 $ 70,913 Other income 1,214 1,606 1,712 1,734 1,851 1,667 1,798 2,397 Total revenues 71,256 75,775 78,112 79,175 78,368 77,253 72,414 73,310 Expenses
Slide 21: 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 22: Non-GAAP reconciliation to GAAP results
Non-GAAP reconciliation to GAAP results Three Months Ended Three Months Ended ($ in thousands) Dec. 31 Sept. 30 Jun. 30 Mar. 31 Dec. 31 ($ in thousands) Dec. 31 Sept. 30 Jun. 30 Mar. 31 Dec. 31 Unaudited 2022 2022 2022 2022 2021 Unaudited 2022 2022 2022 2022 2021 Adjusted net income and diluted earn
Slide 23: Reconciliation of US GAAP to Non-GAAP results
Reconciliation of US GAAP to Non-GAAP results Three Months ended December 31, 2022 Loss on Deferred Loss on Deferred Tax Loss on US GAAP Consideration Fin. Instruments Val. Allowance Investments Non-GAAP Revenues Advisory fees $ 70,913 $ - $ - $ - $ - $ 70,913 Other income 2,397 - - - - 2,397 Total
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