WisdomTree, Inc.

Greetings. Welcome to WisdomTree's fourth quarter 2022 earnings fall. At this time, all participants will be in listen-only mode. Any question and answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that this conference is being recorded. At this time, I'll turn the conference over to Jessica Zalou, Head of Corporate Communications. Jessica, you may now begin.

Good morning. Before we begin, I would like to reference our legal disclaimer available in today's presentation. This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. A number of factors could cause actual results to differ materially from the results discussed in forward-looking statements, including but not limited to the risks set forth in this presentation and in the risk factor section of WisdomTree's annual report on Form 10-K for the year ended December 31st, 2021 as amended and quarterly report on Form 10-Q for the quarter ended June 30th, 2022. Wisdom Truth assumes no duty and does not undertake to update any forward-looking statements. Now, it is my pleasure to turn the call over to Wisdom Truth CFO, Brian Edmondson.

Thank you, Jessica, and welcome everyone. I'll begin by reviewing the results of the fourth quarter, and we'll then turn the call over to Jarrett and Jono for additional updates on our business. Fourth quarter caps what's been a very successful year for WisdomTree. We generated net flows totaling $5.3 billion, with positive flows in both our U.S.-listed and European-listed products. This was our strongest flowing quarter since 2015, and we closed out the year with $82 billion of AUM, our highest quarter end on record. flows of 3.4 billion into our floating rate treasury product, USFR, was the primary contributor. That was followed by flows across most other product categories, including our U.S. equity products with about a billion of flows, as well as our commodity suite, having turned a corner with 800 million of flows, mostly into oil. We have overcome an incredibly challenging market backdrop, with negative market movement impacting our AUM by almost $8 billion for the year. Notwithstanding the market declines, our revenues were essentially flat year over year as we generated over 12 billion of net flows, our strongest flowing year since 2015, representing annualized organic flow growth of 16%. USFR was a shining star, but not the only story. Our U.S. equity product flows have been consistent and strong with positive net flows for 30 of the last 31 months and over 3 billion of flows during the year, an annualized organic flow growth rate of 14%. We end the year with sustained momentum, as evidenced by nine consecutive positive flowing quarters. Our AUM currently stands at a record level 87.2 billion, an increase of 6% from the end of December, as our momentum continues, having generated almost 1.7 billion of flows in January and having benefited from positive market movements. Next slide. Revenues were 73.3 million, essentially unchanged from the third quarter as our higher average AUM was offset by a two basis point decline in our average advisory fee due to changes in our AUM mix. Adjusted net income was 7 million or 4 cents a share. Our non-GAAP results exclude a non-cash after tax loss of 35 million for a future gold commitment payment due to an update to the discount rate used to compute the present value of the annual payment obligations. Next slide. Our operating expenses are up 7% for the quarter. This increase is largely due to higher incentive compensation accruals, as well as higher seasonal marketing and sales related expenses. We ended the year with compensation expenses of about 98 million. for the middle of our previously disclosed guidance and with discretionary spending of $49.4 million, the low end of our guidance range. Next slide. Now a few comments on our 2023 expense guidance. This upcoming year will include a reinvestment into future growth initiatives, taking into consideration our anticipated national launch of Wisdom Tree Prime and continued focus on organic growth. We are forecasting our compensation expense to range from 96 to 106 million. This guidance includes hires both in sales and digital assets, as well as year-end compensation adjustments and annualization of hires made in 2022. The range considers variability in incentives compensation with drivers including the magnitude of our flows, our share price performance in relation to our peers, as well as revenue, operating income, and operating margin performance. Also, just a reminder that we experience elevated seasonality in the amount of compensation we report in the first quarter as we recognize payroll taxes, benefits, and other items in connection with the payment of year-end compensation. We estimate first quarter compensation expense to be approximately $27 to $28 million. Discretionary spending ranges from $56 to $59 million as compared to the $49.4 million recognized in 2022. This guidance includes a modest uplift for WisdomTree Prime marketing and other related costs. Our growth margin is anticipated to be 78% at current AUM levels. We would anticipate margin expansion assuming continued organic flow growth. Our contractual gold payment expense is forecasted to be 18 million, assuming gold prices remain flat at current levels. As a reminder, this expense is based on us paying 9,500 ounces of gold on an annual basis and is measured based upon monthly average gold prices. Third-party distribution expense is forecasted to be approximately 8 to 9 million and is dependent upon AUM growth on our respective platforms. Our adjusted tax rate is expected to be about 23%, taking into consideration a change in UK corporate income tax rate from 19 to 25%, which is effective in 2023. As a reminder, the UK rate increase is something that will impact all companies with a footprint in the United Kingdom. And in June of this year, 175 million of our convertible notes are coming due. While not set in stone, we're currently planning to reduce our debt by approximately 50 million and refinancing the remainder. Our interest cost is estimated to temporarily rise in 2023 to about 16 million, as any debt reduction will occur midway through the year, coupled with a higher interest rate associated with our refinancing. Our normalized interest expense exiting 2023 is estimated to be about 14 million, or $1 million lower versus what was recognized this past year. That's all I have. I will now turn the call over to Jared.