WisdomTree, Inc.

Greetings and welcome to WisdomTree second quarter 2023 earnings call. At this time, all participants are in a listen-only mode. Question and answer session will follow the formal presentation. If anyone should require operator assistance during the call, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. At this time, I would like to hand the call over to Jessica Zloom, head of corporate communications. Thank you. You may 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 factors section of Wisentree's annual report on Form 10-K for the year ended December 31st, 2022. Wisentree assumes no duty and does not undertake to update any forward-looking statements. Now, it is my pleasure to turn the call over to Wisentree CFO, Brian Edmondson.

Thank you, Jessica, and good morning, everyone. Let me begin by sharing our results for the second quarter along with commentary on our expense guidance before turning the call over to Jarrett and Jono for additional updates on our business. We ended the quarter with $93.7 billion of AUM, a new record and up 3% from the prior quarter due to another strong quarter of positive inflows and market appreciation. Robust and sustainable inflows continue to grow our AUM, having generated $2.3 billion in the quarter, which were gathered primarily in our fixed income and international equity products. It has been 11 consecutive quarters of generating positive flows, and our year-to-date flows through the end of June of 8.7 billion translates into a 21% annualized organic flow growth rate. Our AUM currently stands at 97 billion, almost 4% higher from the end of June, having benefited from further inflows and positive market movement. Next slide. Revenues were 85.7 million. an increase of 4.5% from the first quarter due to our higher average AUM, partly offset by lower other income, which is impacted by the velocity of flows from our European listed products. As a reminder, our other income may change quarter over quarter depending upon European listed AUM changes due to market movement or the velocity of flows arising from these products. As previously disclosed, during the quarter we settled our contractual gold payment obligation with the World Gold Council and ETFS for about $137 million, comprised of $50 million in cash and non-voting preferred stock convertible into about 13.1 million shares of our common stock. The settlement reduces operating expenses by about $18 million per year and expands operating margins by 530 basis points. The contractual gold payment expense was 1.6 million during the second quarter, representing our final payment for the month of April, which had about a one cent impact to our earnings per share. Adjusted net income was 14.9 million or nine cents a share. Our non-GAAP results excluded non-cash after tax gain of 41.4 million related to the termination of our contractual gold payment obligation as well as 3.3 million in other net non-operating losses. Next slide. Our adjusted operating expenses were down 2.3% for the quarter. This is primarily driven by lower contractual gold payments, partly offset by higher professional fees, inclusive of expenses incurred to settle the gold payment obligation. Next slide. Now a few comments on our forecasted expense guidance. We are updating our forecasted compensation guidance to range from 104 to 110 million to account for variability in incentive compensation. Our performance-based plan considers the magnitude of our flows, revenue, operating income, and operating margin performance, as well as our relative share price performance in relation to our publicly listed U.S. traditional asset manager peers, whereby we currently rank number one out of 13. Given the potential volatility in our performance-based metrics, we consider the midpoint of this range to be a reasonable estimate, which already seems to be reflected in consensus estimates. Our discretionary spending guidance of 56 to 59 million remains unchanged, having recognized $28.3 million in discretionary spending year to date. We reported a gross margin of about 79% year to date, and we're updating our gross margin guidance to 79% from 78%, which we believe should be sustainable at current AUM levels. Our contractual goal payment expense of $6 million year to date will be zero going forward as this obligation was terminated in early May. Our forecasted third-party distribution expense of 8 to 9 million remains unchanged given current run rate levels. Our interest cost is anticipated to be 3.5 million per quarter going forward as we paid 60 million in cash and issued 1 million shares to settle convertible notes that had matured in June. Our run rate interest income is expected to be about 500,000 per quarter through 2023, taking into consideration the magnitude of our investments, which has been reduced from the prior quarter after having paid $110 million to settle our convertible notes and having bought out our gold royalty obligation. Our adjusted tax rate was 23.7% year-to-date through June, and we are updating our tax rate guidance to 24% given the current distribution of profits amongst our U.S. and European businesses. And our weighted average diluted shares outstanding were 170.7 million after having issued approximately 14 million shares in connection with our gold royalty buyout and the maturity of our convertible notes during the quarter. The impact of the share issuance on our second quarter diluted shares was affected by the timing of when the shares were issued. Going forward, we anticipate our diluted shares outstanding to be about 177 million per quarter. That's all I have. I'll now turn the call over to Jared.