WisdomTree (WT) Q2 2024 earnings summary

Executive summary

• Achieved record AUM of $109.7 billion as of June 30, 2024, with $110.5 billion as of July 24, 2024, driven by market appreciation, strong net inflows, and continued business momentum.

• U.S.-listed and European UCITS/ETP suites generated $1.9 billion in net inflows for Q2 and $4.2 billion year-to-date, representing 11% annualized organic growth.

• Focus on innovation, digital assets, and blockchain-enabled finance, with WisdomTree Prime now live in 44 states and available to nearly 80% of the U.S. population.

• Continued investment in technology, product development, and direct-to-consumer channels, with new digital platforms and products in development.

• Net income for Q2 2024 was $21.8 million ($27.1 million as adjusted), with diluted EPS of $0.13 ($0.16 as adjusted).

Financial highlights

• Q2 2024 revenues reached $107 million, up 24.9% year-over-year and 10.5% sequentially, driven by higher average AUM and strong European product revenues.

• Operating income margin expanded to 31.3% (GAAP) and 35.3% (adjusted), with gross margin at 81.2%.

• Adjusted net income for Q2 2024 was $27.1 million, up from $14.9 million in Q2 2023.

• Year-to-date revenue growth was 21.5%, with adjusted operating margin of 32.6% and incremental margins above 50%.

• Other revenue reached $8.1 million in Q2, with a new quarterly run-rate guidance of ~$8 million.

Outlook and guidance

• Compensation-to-revenue ratio guidance for 2024 is 28%-29%, down from 31.4% last year.

• Discretionary spending guidance for 2024 is $64-$68 million, with higher spend expected in Q4.

• Gross margin guidance raised to 80%-81% for 2024, with potential for further expansion if AUM grows.

• Third-party distribution expense guidance at $10-$11 million; adjusted interest expense at $14-$16.5 million; interest income at $5 million.

• Adjusted tax rate guidance remains at 24%-25%; weighted average diluted shares guidance at 166-168 million.