EXHIBIT 99.1

WisdomTree Announces Second Quarter 2015 Results

Record net income up 128% year-over-year to $24.2 million or diluted EPS $0.18

Record revenues up 85% year-over-year to $81.6 million

Record U.S. pre-tax margin of 53.2%; Record consolidated pre-tax margin of 50.2%

$6.6 billion in net inflows for the quarter; $20.1 billion in first half 2015

Net inflow market share of 15.6% for the quarter

Declares $0.08 quarterly dividend

New York, NY – (GlobeNewswire) – July 31, 2015 – WisdomTree Investments, Inc. (NASDAQ: WETF), an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager today reported net income of $24.2 million for the second quarter of 2015 or $0.18 per share on a fully diluted basis. This compares to $10.6 million in the second quarter of 2014 and $12.1 million in the first quarter of 2015.

WisdomTree CEO and President Jonathan Steinberg said, “Our innovative ETF platform attracted $6.6 billion in inflows in the second quarter and more than $20 billion in the first half of the year, making WisdomTree one of the fastest-growing companies within the ETF and broader asset management industry in 2015 to date. We also delivered industry-leading operating margins and record financial results, demonstrating the increasing scale and strength of our business model.”

Mr. Steinberg continued, “I am pleased with our strong execution in the second quarter and excited about the investments and capabilities we are adding to enhance our global ETF franchise and drive future growth.”


Summary Operating and Financial Highlights

 

     Three Months Ended     Change From  
     Jun. 30,     Mar. 31,     Jun. 30,     Mar. 31,     Jun. 30,  

Operating Highlights

   2015     2015     2014     2015     2014  

U.S. listed ETFs ($, in billions):

          

AUM

   $ 61.3      $ 55.8      $ 35.5        9.9     72.7

Net inflows

   $ 6.6      $ 13.5      $ 0.3        (51.2 %)      1,875.4

Average AUM

   $ 61.2      $ 46.4      $ 34.1        31.8     79.1

Average advisory fee

     0.53     0.52     0.51     +.01        +.02   

Market share of U.S. industry inflows

     15.6     24.4     0.6     -8.8        +15.0   

European listed ETPs ($, in millions):

          

AUM

   $ 611.9      $ 334.1      $ 113.2        83.2     440.4

Net inflows

   $ 194.6      $ 174.2      $ 17.7        11.7     1,001.9

Average advisory fee

     0.68     0.75     0.82     -.07        -.14   

Financial Highlights ($, in millions, except per share amounts):

          

Consolidated Results:

          

Total revenues

   $ 81.6      $ 60.1      $ 44.1        35.6     84.8

Pre-tax income

   $ 40.9      $ 21.0      $ 20.1        94.8     103.3

Net income

   $ 24.2      $ 12.1      $ 10.6        100.4     128.0

Diluted earnings per share

   $ 0.18      $ 0.09      $ 0.08      $ 0.09      $ 0.10   

Pre-tax margin

     50.2     35.0     45.6     +15.2        +4.6   

U.S. listed ETFs:

          

Gross margin1 (non-GAAP)

     86.4     83.2     82.4     +3.2        +4.0   

Pre-tax margin

     53.2     38.3     49.4     +14.9        +3.8   

 

1  Gross margin is defined as total revenues less fund management and administration expenses and third-party sharing arrangements.

 

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Recent Business Developments

Personnel

 

    On June 15, 2015, the Company named Kurt MacAlpine Executive Vice President and Head of Global Distribution

 

    On July 1, 2015, the Company announced plans for a Japan office and the appointment of Jesper Koll as Chief Executive Officer of WisdomTree Japan K.K.

 

    On July 23, 2015, the Company announced the expansion of its Japan Management team with the appointment of Junichi Kamitsubo as Head of Sales and Atsushi Yamamoto as Chief Compliance Officer of WisdomTree Japan K.K.

Product launches

 

    On May 28, 2015, the Company launched the WisdomTree Japan Dividend Growth Fund (JDG)

 

    On June 4, 2015, the Company launched the WisdomTree International Hedged SmallCap Dividend Fund (HDLS) and the WisdomTree Global ex-U.S. Hedged Dividend Fund (DXUS)

 

    On June 6, 2015, the Company launched the WisdomTree Western Asset Unconstrained Bond Fund (UBND)

 

    On July 9, 2015, the Company launched the WisdomTree International Hedged Equity Fund (HDWM) and the WisdomTree Barclays U.S. Aggregate Bond Enhanced Yield Fund (AGGY)

 

    On July 21, 2015, the Company launched the WisdomTree Strong Dollar U.S. Equity Fund (USSD) and the WisdomTree Weak Dollar U.S. Equity Fund (USWD)

Other

 

    On June 9, 2015, the Company announced the cross-listing of 2 additional ETFs on the Bolsa Mexicana de Valores: the WisdomTree Germany Hedged Equity Fund (DXGE) and the WisdomTree U.S. Dividend Growth Fund (DGRW)

 

    On June 30, 2015, WisdomTree added four additional ETFs to Schwab ETF OneSource™: the WisdomTree Europe Hedged SmallCap Equity Fund (EUSC), the WisdomTree Germany Hedged Equity Fund (DXGE), the WisdomTree Japan Hedged Dividend Growth Fund (JHDG), and the WisdomTree Japan Hedged SmallCap Equity Fund (DXJS)

 

    On July 1, 2015, the Company announced the WisdomTree China ex-State-Owned Enterprises Fund (CXSE), formerly the WisdomTree China Dividend ex-Financials Fund (CHXF)

 

    WisdomTree Europe:

 

    Listed the WisdomTree Germany Equity UCITS ETF (DXGP) – GBP hedged – in London on the London Stock Exchange on May 14, 2015; listed the WisdomTree Japan Equity UCITS ETF (DXJ) and the WisdomTree Europe Equity UCITS ETF (HEDJ) – both USD hedged—in London on the London Stock Exchange, Italy on the Borsa Italiana and Germany on the Börse Xetra on May 20, 2015, and Switzerland on the SIX Swiss Exchange on July 14, 2015; and announced it surpassed $500 Million in AUM on May 28, 2015

 

    Listed four Boost ETPs in London on the London Stock Exchange on April 14, 2015; listed eight ETPs in Germany on the Börse Xetra on June 30, 2015; and listed five ETPs in Italy on the Borsa Italiana

 

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Assets Under Management and Net Inflows

U.S. listed ETF assets under management (“AUM”) reached a record $61.3 billion at June 30, 2015, up 56.1% from December 31, 2014, primarily due to record inflows of $20.1 billion.

European listed AUM was $611.9 million, up 237.7% from $181.2 million at December 31, 2014 primarily due to $368.8 million of net inflows.

Performance

In evaluating the performance of our U.S. listed equity, fixed income and alternative ETFs against actively managed and index based mutual funds and ETFs, 90.4% of the $60.5 billion invested in our ETFs and 58% (32 of 55) of our ETFs outperformed their comparable Morningstar average since inception as of June 30, 2015.

For more information about WisdomTree ETFs including standardized performance, please click here or visit www.wisdomtree.com.

 

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Second Quarter Financial Discussion

Revenues

Total revenues increased 84.8% from the second quarter of 2014 and 35.6% compared to the first quarter of 2015 to a record $81.6 million primarily due to higher average AUM from strong inflows. Revenues from our European listed ETPs increased to $0.9 million from $0.2 million in the second quarter of 2014 primarily due to higher inflows from the launch of WisdomTree UCITS ETFs as well as our Boost branded ETPs. The average advisory fee for our U.S. listed ETFs increased to 0.53% as compared to 0.51% for the second quarter of 2014 and 0.52% in the first quarter of 2015 due to the change in the mix of our AUM.

Margins

Gross margin for our U.S. listed ETFs, which is our total revenues less fund management and administration expenses and third party sharing arrangements, was 86.4% in the second quarter of 2015 as compared to 82.4% in the second quarter of 2014 and 83.2% in the first quarter of 2015. The increase was primarily due to higher average AUM.

Consolidated pre-tax margin was 50.2% in the second quarter of 2015. Pre-tax margin for our U.S. listed ETFs was 53.2% on average U.S. listed AUM of $61.2 billion.

Expenses

Total expenses increased 69.3% from the second quarter of 2014 and 3.8% compared to the first quarter of 2015 to $40.6 million. Included in the quarter was $2.9 million of expenses associated with our European listed ETPs.

 

    Compensation and benefits expense increased 147.2% from the second quarter of 2014 to $18.7 million due to higher accrued incentive compensation due to our record setting inflow levels, increased headcount related expenses to support our growth and higher stock based compensation due to equity granted as part of incentive compensation. Included in the quarter was $1.2 million in compensation costs for employees associated with our European listed ETPs.

This expense decreased 4.8% compared to the first quarter of 2015. Payroll related taxes were higher in the first quarter due to bonus payments and employees exercising stock options.

 

    Fund management and administration expense increased 43.4% from the second quarter of 2014 and 10.2% from the first quarter of 2015 to $11.2 million. This increase was primarily due to higher average AUM, inflow levels and number of ETFs. We also incurred additional costs for our European listed ETPs as a result of launching our WisdomTree UCITS ETFs in the fourth quarter of 2014. We had 75 U.S. listed ETFs and 67 European listed ETPs at the end of the quarter.

 

    Marketing and advertising expense increased 33.1% from the second quarter of 2014 and 17.9% from the first quarter of 2015 to $3.6 million primarily due to higher levels of advertising related activities to support our growth.

 

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    Sales and business development expense increased 20.2% from the second quarter of 2014 and 9.3% from the first quarter to $2.1 million primarily due to higher spending for sales related activities for both our U.S. and European listed ETPs.

 

    Professional and consulting fees decreased 12.8% from the second quarter of 2014 to $1.6 million. In the second quarter of last year, we incurred fees in connection with closing on our acquisition of Boost. This expense increased 9.6% compared to the first quarter of 2015 primarily due to headcount recruiting fees.

 

    Occupancy, communication and equipment expense was essentially unchanged at $0.9 million as compared to the second quarter of 2014 and the first quarter of 2015.

 

    Depreciation and amortization expense was also relatively unchanged at $0.2 million as compared to the second quarter of 2014 and first quarter of 2015.

 

    Third-party sharing arrangements expense increased to $0.5 million in the second quarter of 2015 as compared to the second quarter of 2014 and first quarter of 2015 primarily due to higher fees for our marketing agents in Latin America and listing our ETFs on a third party platform.

 

    Other expenses increased 29.6% from the second quarter of 2014 and 22.2% from the first quarter to $1.5 million primarily due to higher general and administrative spending.

 

    Acquisition contingent payment expense was $0.3 million in the second quarter. This represents the current expense accrual for expected payments due to the former Boost shareholders related to our acquisition in April 2014 and is primarily driven by increased AUM derived from our European business.

 

    Income tax expense was $16.8 million for the second quarter of 2015. The effective tax rate on our U.S. listed ETF business was 39.1% in the second quarter. The Company’s overall effective tax rate was 41.0% due to the non-deductibility of losses in our European ETP business. These losses may be recognized in the future after the European business is profitable.

Balance Sheet

As of June 30, 2015, the Company had total assets of $265.2 million which consisted primarily of cash and cash equivalents and investments of $210.5 million. There were approximately 136.3 million shares of common stock outstanding as of June 30, 2015. Fully diluted weighted average shares outstanding were 138.0 million for the second quarter.

Quarterly Dividend and Stock Buyback

The Company’s Board of Directors declared a quarterly cash dividend of $0.08 per share of the Company’s common stock. The dividend will be paid on August 26, 2015 to stockholders of record as of the close of business on August 12, 2015. In addition, during the quarter, the Company purchased approximately 62,000 shares for $1.2 million in the second quarter of 2015.

 

6


Conference Call

WisdomTree will discuss its results and operational highlights during a conference call on Friday, July 31, 2015 at 9:00 a.m. ET. The call-in number will be (877) 303-7209. Anyone outside the U.S. or Canada should call (970) 315-0420. The slides used during the presentation will be available at http://ir.wisdomtree.com. For those unable to join the conference call at the scheduled time, an audio replay will be available on http://ir.wisdomtree.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release 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, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, the risks described below. If one or more of these or other risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this press release completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

In particular, forward-looking statements in this press release may include statements about:

 

    anticipated trends, conditions and investor sentiment in the global markets and ETPs;

 

    anticipated levels of inflows into and outflows out of our ETPs;

 

    our ability to deliver favorable rates of return to investors;

 

    our ability to develop new products and services;

 

    our ability to maintain current vendors or find new vendors to provide services to us at favorable costs;

 

    our ability to successfully expand our business into non-U.S. markets;

 

    timing of payment of our cash income taxes;

 

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    competition in our business; and

 

    the effect of laws and regulations that apply to our business.

Our business is subject to many risks and uncertainties, including without limitation:

 

    Recent historical growth may not provide an accurate representation of the growth we may experience in the future, which may make it difficult to evaluate our future prospects.

 

    Challenging global market conditions associated with declining prices of securities can adversely affect our business by reducing the market value of the assets we manage or causing customers to sell their fund shares and trigger redemptions.

 

    Fluctuations in the amount and mix of our AUM may negatively impact revenue and operating margin.

 

    We derive a substantial portion of our revenue from a limited number of products – in particular two funds, the WisdomTree Europe Hedged Equity Fund and the WisdomTree Japan Hedged Equity Fund – and, as a result, our operating results are particularly exposed to the performance of those funds, investor sentiment toward the strategies pursued by those funds and our ability to maintain the AUM of those funds.

 

    Most of our AUM are held in our U.S. listed ETFs that invest in foreign securities and we therefore have substantial exposure to foreign market conditions and are subject to currency exchange rate risks.

 

    We derive a substantial portion of our revenue from international hedged equity ETFs and are exposed to the market-specific political and economic risks, as well as general investor sentiment regarding monetary policy of those markets.

 

    We derive a substantial portion of our revenue from products invested in securities of Japanese and European companies and are exposed to the market-specific political and economic risks, as well as general investor sentiment regarding future growth of those markets and currency fluctuations.

 

    We derive a significant portion of our revenue from products invested in emerging markets and are exposed to the market-specific political and economic risks as well as general investor sentiment regarding future growth of those markets.

 

    Many of our ETPs and ETFs have a limited track record, and poor investment performance could cause our revenue to decline.

 

    We depend on third parties to provide many critical services to operate our business and our ETPs and ETFs. The failure of key vendors to adequately provide such services could materially affect our operating business and harm our customers.

 

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Other factors, such as general economic conditions, including currency exchange rate fluctuations, also may have an effect on the results of our operations. For a more complete description of the risks noted above and other risks that could cause our actual results to differ from our current expectations, please see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Therefore, these forward-looking statements do not represent our views as of any date other than the date of this press release.

About WisdomTree

WisdomTree Investments, Inc., through its subsidiaries in the U.S. and Europe (collectively, “WisdomTree”), is an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager headquartered in New York. WisdomTree offers products covering equities, fixed income, currencies, commodities and alternative strategies. WisdomTree currently has approximately $63.2 billion in assets under management globally.

WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide.

 

Contact Information:
WisdomTree Investments, Inc.
Stuart Bell / Jessica Zaloom

+1.917.267.3702 / +1.917.267.3735

sbell@wisdomtree.com / jzaloom@wisdomtree.com

 

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WISDOMTREE INVESTMENTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended      % Change From     Six Months Ended  
     Jun. 30,      Mar. 31,      Jun. 30,      Mar. 31,     Jun. 30,     Jun. 30,      Jun. 30,     %  
     2015      2015      2014      2015     2014     2015      2014     Change  

Revenues

                    

Advisory fees

   $ 81,320       $ 59,869       $ 43,938         35.8     85.1   $ 141,189       $ 86,547        63.1

Other income

     239         272         190         -12.1     25.8     511         501        2.0
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     81,559         60,141         44,128         35.6     84.8     141,700         87,048        62.8

Expenses

                    

Compensation and benefits

     18,669         19,601         7,551         -4.8     147.2     38,270         16,906        126.4

Fund management and administration

     11,208         10,168         7,818         10.2     43.4     21,376         16,986        25.8

Marketing and advertising

     3,628         3,076         2,726         17.9     33.1     6,704         5,304        26.4

Sales and business development

     2,076         1,900         1,727         9.3     20.2     3,976         3,028        31.3

Professional and consulting fees

     1,604         1,463         1,840         9.6     -12.8     3,067         3,635        -15.6

Occupancy, communication and equipment

     943         918         853         2.7     10.6     1,861         1,753        6.2

Depreciation and amortization

     223         220         201         1.4     10.9     443         393        12.7

Third party sharing arrangements

     497         283         115         75.6     332.2     780         125        524.0

Acquisition contingent payment

     264         257         —           2.7     n/a        521         —          n/a   

Other

     1,509         1,235         1,164         22.2     29.6     2,744         2,306        19.0
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     40,621         39,121         23,995         3.8     69.3     79,742         50,436        58.1
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income before taxes

     40,938         21,020         20,133         94.8     103.3     61,958         36,612        69.2

Income tax expense/(benefit)

     16,766         8,958         9,531         —          —          25,724         (4,194     —     
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 24,172       $ 12,062       $ 10,602         100.4     128.0   $ 36,234       $ 40,806        -11.2
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income before taxes per share - basic

   $ 0.30       $ 0.16       $ 0.15           $ 0.46       $ 0.28     

Income before taxes per share - diluted

   $ 0.30       $ 0.15       $ 0.15           $ 0.45       $ 0.26     

Net income per share - basic

   $ 0.18       $ 0.09       $ 0.08           $ 0.27       $ 0.31     

Net income per share—diluted

   $ 0.18       $ 0.09       $ 0.08           $ 0.26       $ 0.29     

Weighted average common shares - basic

     135,895         134,075         131,533             134,990         131,235     

Weighted average common shares - diluted

     137,951         137,311         138,258             137,620         138,501     


WISDOMTREE INVESTMENTS, INC.

NON-GAAP SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

(Unaudited)

 

     US     European                                         
     Listed     Listed           US Listed Business  
     Business     Business     Total                          % Change From  
     Q2/15     Q2/15     Q2/15     Q2/15      Q1/15      Q2/14      Q1/15     Q2/14  

Revenues

                   

Advisory fees

   $ 80,409      $ 911      $ 81,320      $ 80,409       $ 59,346       $ 43,753         35.5     83.8

Other income

     238        1        239        238         234         182         1.7     30.8
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total revenues

     80,647        912        81,559        80,647         59,580         43,935         35.4     83.6

Expenses

                   

Compensation and benefits

     17,437        1,232        18,669        17,437         18,475         7,026         -5.6     148.2

Fund management and administration

     10,462        746        11,208        10,462         9,733         7,625         7.5     37.2

Marketing and advertising

     3,256        372        3,628        3,256         2,952         2,675         10.3     21.7

Sales and business development

     2,048        28        2,076        2,048         1,865         1,653         9.8     23.9

Professional and consulting fees

     1,541        63        1,604        1,541         1,298         1,026         18.7     50.2

Occupancy, communication and equipment

     889        54        943        889         847         807         5.0     10.2

Depreciation and amortization

     221        2        223        221         219         199         0.9     11.1

Third party sharing arrangements

     497        —          497        497         283         115         75.6     332.2

Acquisition contingent payment

     —          264        264        —           —           —           n/a        n/a   

Other

     1,413        96        1,509        1,413         1,091         1,105         29.5     27.9
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total expenses

     37,764        2,857        40,621        37,764         36,763         22,231         2.7     69.9
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Income/(loss) before taxes

     42,883        (1,945     40,938        42,883         22,817         21,704         87.9     97.6

Income tax expense/(benefit)

     16,785        (19     16,766        16,785         8,987         9,873         86.8     n/a   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Net income/(loss)

   $ 26,098      $ (1,926   $ 24,172      $ 26,098       $ 13,830       $ 11,831         88.7     120.6
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Pretax margin

     53.2       50.2             

Gross margin

     86.4       85.6             


WISDOMTREE INVESTMENTS, INC.

CONSOLIDATED BALANCE SHEET

(in thousands, except per share amounts)

 

     June 30,     December 31,  
     2015     2014  
     (Unaudited)        

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 189,272      $ 165,284   

Accounts receivable

     28,652        18,176   

Deferred tax asset, net

     6,560        3,872   

Other current assets

     3,543        1,708   
  

 

 

   

 

 

 

Total current assets

     228,027        189,040   

Fixed assets, net

     10,274        10,356   

Investments

     21,247        13,990   

Deferred tax asset, net

     3,519        5,618   

Goodwill

     1,676        1,676   

Other noncurrent assets

     463        71   
  

 

 

   

 

 

 

Total assets

   $ 265,206      $ 220,751   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

LIABILITIES

    

Current liabilities:

    

Fund management and administration payable

   $ 13,263      $ 9,983   

Compensation and benefits payable

     21,725        14,333   

Accounts payable and other liabilities

     5,368        5,115   
  

 

 

   

 

 

 

Total current liabilities

     40,356        29,431   

Other noncurrent liabilities:

    

Acquisition payable

     2,278        1,757   

Deferred rent payable

     5,183        5,278   
  

 

 

   

 

 

 

Total liabilities

     47,817        36,466   
  

 

 

   

 

 

 

STOCKHOLDERS’ EQUITY

    

Common stock, par value $0.01; 250,000 shares authorized:

    

issued: 137,770 and 134,959

     1,377        1,350   

outstanding: 136,313 and 133,445

    

Additional paid-in capital

     227,975        209,216   

Accumulated other comprehensive loss

     (175     (53

Accumulated deficit

     (11,788     (26,228
  

 

 

   

 

 

 

Total stockholders’ equity

     217,389        184,285   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 265,206      $ 220,751   
  

 

 

   

 

 

 


WISDOMTREE INVESTMENTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

     Six Months Ended  
     June 30,     June 30,  
     2015     2014  

Cash flows from operating activities

    

Net income

   $ 36,234      $ 40,806   

Non-cash items included in net income:

    

Income tax expense/(benefit)

     25,218        (4,194

Depreciation and amortization

     443        393   

Stock-based compensation

     4,952        4,045   

Deferred rent

     (70     1,286   

Deferred acquisition contingent payment

     521        —     

Accretion to interest income and other

     6        (79

Changes in operating assets and liabilities:

    

Accounts receivable

     (10,318     2,546   

Other assets

     (2,279     (1,230

Fund management and administration payable

     3,219        (473

Compensation and benefits payable

     7,290        (9,887

Accounts payable and other liabilities

     316        (553
  

 

 

   

 

 

 

Net cash provided by operating activities

     65,532        32,660   
  

 

 

   

 

 

 

Cash flows from investing activities

    

Purchase of fixed assets

     (364     (3,741

Purchase of investments

     (8,449     (1,237

Cash acquired on acquisition

     —          1,349   

Proceeds from the redemption of investments

     1,187        803   
  

 

 

   

 

 

 

Net cash used in investing activities

     (7,626     (2,826
  

 

 

   

 

 

 

Cash flows from financing activities

    

Shares repurchased

     (15,264     (5,426

Dividends paid

     (21,794     —     

Proceeds from exercise of stock options

     3,293        116   
  

 

 

   

 

 

 

Net cash used in financing activities

     (33,765     (5,310
  

 

 

   

 

 

 

(Decrease)/increase in cash flows due to changes in foreign exchange rate

     (153     7   
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     23,988        24,531   

Cash and cash equivalents - beginning of period

     165,284        104,316   
  

 

 

   

 

 

 

Cash and cash equivalents - end of period

   $ 189,272      $ 128,847   
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information

    

Cash paid for taxes

   $ 356      $ 21   
  

 

 

   

 

 

 


WisdomTree Investments, Inc.

Key Operating Statistics (Unaudited)

 

     Three Months Ended     For the Six Months Ended  
     June 30,
2015
    March 31,
2015
    June 30,
2014
    June 30,
2015
    June 30,
2014
 

US LISTED ETFs

          

Total ETFs (in millions)

          

Beginning of period assets

     55,758        39,281        33,884        39,281        34,884   

Inflows/(outflows)

     6,598        13,520        334        20,118        (168

Market appreciation/(depreciation)

     (1,057     2,957        1,282        1,900        784   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period assets

     61,299        55,758        35,500        61,299        35,500   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average assets during the period

     61,153        46,391        34,141        53,772        34,000   

Revenue Days

     91        90        91        181        181   

ETF Industry and Market Share (in billions)

          

ETF industry net inflows

     42.3        55.5        57.7        97.8        72.2   

WisdomTree market share of industry inflows

     15.6     24.4     0.6     20.6     0.0

International Hedged Equity ETFs (in millions)

          

Beginning of period assets

     33,925        17,760        12,612        17,760        13,348   

Inflows/(outflows)

     6,083        13,440        (502     19,523        (514

Market appreciation/(depreciation)

     (786     2,725        447        1,939        (277
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period assets

     39,222        33,925        12,557        39,222        12,557   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average assets during the period

     38,548        24,559        12,189        31,553        12,620   

US Equity ETFs (in millions)

          

Beginning of period assets

     9,748        9,390        7,505        9,390        7,181   

Inflows/(outflows)

     (320     294        221        (26     410   

Market appreciation/(depreciation)

     (183     64        326        (119     461   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period assets

     9,245        9,748        8,052        9,245        8,052   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average assets during the period

     9,664        9,770        7,721        9,717        7,448   

Emerging Markets Equity ETFs (in millions)

          

Beginning of period assets

     6,068        6,187        6,753        6,187        7,448   

Inflows/(outflows)

     250        (165     388        85        (244

Market appreciation/(depreciation)

     (74     46        465        (28     402   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period assets

     6,244        6,068        7,606        6,244        7,606   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average assets during the period

     6,336        6,147        7,088        6,242        6,932   

International Developed Equity ETFs (in millions)

          

Beginning of period assets

     4,323        3,988        4,830        3,988        3,864   

Inflows

     497        188        518        685        1,330   

Market appreciation/(depreciation)

     9        147        (8     156        146   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period assets

     4,829        4,323        5,340        4,829        5,340   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average assets during the period

     4,790        4,111        5,135        4,450        4,741   

Fixed Income ETFs (in millions)

          

Beginning of period assets

     904        1,152        1,610        1,152        1,906   

Inflows/(outflows)

     67        (210     (278     (143     (584

Market appreciation/(depreciation)

     (15     (38     44        (53     54   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period assets

     956        904        1,376        956        1,376   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average assets during the period

     929        1,018        1,435        974        1,591   

Currency ETFs (in millions)

          

Beginning of period assets

     565        599        422        599        979   

Inflows/(outflows)

     7        (44     (21     (37     (570

Market appreciation/(depreciation)

     1        10        5        11        (3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period assets

     573        565        406        573        406   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average assets during the period

     651        571        413        611        512   

Alternative Strategy ETFs (in millions)

          

Beginning of period assets

     225        205        152        205        158   

Inflows

     14        17        8        31        4   

Market appreciation/(depreciation)

     (9     3        3        (6     1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

End of period assets

     230        225        163        230        163   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average assets during the period

     235        215        160        225        156   


     Three Months Ended     For the Six Months Ended  
     June 30,     March 31,     June 30,     June 30,     June 30,  
     2015     2015     2014     2015     2014  

Average ETF assets during the period

          

International hedged equity ETFs

     63     53     36     59     37

US equity ETFs

     16     21     23     18     22

Emerging markets equity ETFs

     10     14     21     12     20

International developed equity ETFs

     8     9     15     8     14

Fixed income ETFs

     2     2     4     2     5

Currency ETFs

     1     1     1     1     2

Alternative strategy ETFs

     0     0     0     0     0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average ETF advisory fee during the period

          

Alternative strategy ETFs

     0.95     0.95     0.94     0.95     0.94

Emerging markets equity ETFs

     0.71     0.71     0.67     0.71     0.67

International developed equity ETFs

     0.56     0.56     0.57     0.56     0.56

International hedged equity ETFs

     0.54     0.53     0.50     0.53     0.49

Fixed income ETFs

     0.52     0.52     0.55     0.52     0.55

Currency ETFs

     0.50     0.50     0.49     0.50     0.49

US equity ETFs

     0.35     0.35     0.35     0.35     0.35
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Blended total

     0.53     0.52     0.51     0.52     0.51
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Number of ETFs - end of the period

          

International developed equity ETFs

     18        17        17        18        17   

International hedged equity ETFs

     16        13        12        16        12   

US equity ETFs

     13        13        13        13        13   

Fixed income ETFs

     12        11        12        12        12   

Emerging markets equity ETFs

     8        8        7        8        7   

Currency ETFs

     6        6        6        6        6   

Alternative strategy ETFs

     2        2        2        2        2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     75        70        69        75        69   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EUROPEAN LISTED ETPs

          

Total ETPs (in thousands)

          

Beginning of period assets

     288,222        165,018        96,817        165,018     

Inflows

     50,331        145,381        17,658        195,712     

Market appreciation/(depreciation)

     44,776        (22,177     (1,231     22,599     
  

 

 

   

 

 

   

 

 

   

 

 

   

End of period assets

     383,329        288,222        113,244        383,329     
  

 

 

   

 

 

   

 

 

   

 

 

   

Average ETP advisory fee during the period

     0.82     0.81     0.82     0.82  

Number of ETPs - end of the period

     57        57        38        57     

Total UCITS ETFs (in thousands)

          

Beginning of period assets****

     45,846        16,179          16,179     

Inflows

     144,234        28,851          173,085     

Market appreciation

     38,508        816          39,324     
  

 

 

   

 

 

     

 

 

   

End of period assets

     228,588        45,846          228,588     
  

 

 

   

 

 

     

 

 

   

Average ETP advisory fee during the period

     0.44     0.40       0.42  

Number of ETPs - end of the period

     10        6          10     

U.S. headcount

     117        109        92        117     

European headcount

     28        27        11        28     

Note: Previously issued statistics may be restated due to trade adjustments

Source: Investment Company Institute, Bloomberg, WisdomTree

**** UCITS first launched October 24, 2014


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. The non-GAAP financial measurements included in this release include gross margin, gross margin percentage and our operating results for our US and European listed ETF businesses. Our management reviews these non-GAAP financial measurements when evaluating our financial performance and results of operations; therefore, we believe it is useful to provide information with respect to these non-GAAP measurements so as to share this perspective of management. Non-GAAP measurements do not have any standardized meaning, do not replace nor are superior to GAAP financial measurements and are unlikely to be comparable to similar measures presented by other companies. These non-GAAP financial measurements should be considered in the context with our GAAP results. We disclose gross margin as a non-GAAP financial measurement to allow investors to analyze our revenues less the direct costs paid to third parties attributable to those revenues. We disclose the results of our US listed ETF business to allow investors to better compare our results to the prior year as in April 2014, we acquired Boost ETP, a UK based ETP sponsor.


WISDOMTREE INVESTMENTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

GAAP to NON-GAAP RECONCILIATION

(in thousands)

(Unaudited)

 

     Three Months Ended     For the Six Months Ended  
     Jun. 30,     Mar. 31,     Jun. 30,     Jun. 30,     Jun. 30,  
     2015     2015     2014     2015     2014  

GAAP total revenue

   $ 81,559      $ 60,141      $ 44,128      $ 141,700      $ 87,048   

Fund management and administration

     (11,208     (10,168     (7,818     (21,376     (16,986

Third party sharing arrangements

     (497     (283     (115     (780     (125
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

   $ 69,854      $ 49,690      $ 36,195      $ 119,544      $ 69,937   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

   $ 69,854      $ 49,690      $ 36,195      $ 119,544      $ 69,937   

Divide GAAP total revenue

     81,559        60,141        44,128        141,700        87,048   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin percentage

     85.6     82.6     82.0     84.4     80.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

US listed ETFs:

          

GAAP total revenue

   $ 80,647      $ 59,580      $ 43,935      $ 140,227      $ 86,855   

Fund management and administration

     (10,462     (9,733     (7,625     (20,195     (16,793

Third party sharing arrangements

     (497     (283     (115     (780     (125
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

   $ 69,688      $ 49,564      $ 36,195      $ 119,252      $ 69,937   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin percentage

     86.4     83.2     82.4     85.0     80.5