WisdomTree, Inc.

Greetings and welcome to the WisdomTree third quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to turn it over to Jessica Zaloom, Head of Corporate Communications, to begin. Thank you.

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 risk set forth in this presentation and in the risk factor section of the Wisentries Annual Report on Form 10-K for the year ended December 31st, 2022. Wisentrie assumes no duties and does not undertake to update any forward-looking statements. Now, it is my pleasure to turn the call over to Wisentrie CFO, Brian Edmundson.

Thank you, Jessica, and good morning, everyone. We ended the quarter with $93.7 billion of AUM. unchanged from the prior quarter as our inflows served to offset unfavorable market conditions. We generated $2 billion of inflows in the quarter, which were broad and diverse across seven of our eight product categories. Diversification is driving year-to-date average fee capture on our flows upward, which was more than two times greater than our fee capture in the prior year. Our flows are strong and stable, as it has now been 12 consecutive quarters of flowing positives. Our year-to-date flows through September of 10.7 billion translates into a 17% annualized organic flow growth rate. Our AUM currently stands at 94.1 billion, slightly higher from the end of September, having benefited from further inflows. Next slide. Revenues were 90.4 million, an increase of 5.5% from the second quarter and up 24.9% versus the prior year quarter. Our revenues are growing and our margins are expanding. Our operating margin in the third quarter was 29.5% as compared to 20.5% in the third quarter of last year. Our margins have benefited by the settlement of our contractual gold payment obligation last quarter which has been a meaningful contributor to this expansion, but not the only contributor. When excluding the impact of the gold royalty buyout, our margins have expanded 330 basis points versus the third quarter of last year, demonstrating the scalability of our business model. This margin expansion is translating into earnings per share growth. Our adjusted net income was 18 million, or 10 cents a share. Next slide. Our adjusted operating expenses were up 1.7% for the quarter. This was driven primarily by higher incentive compensation, as well as higher third-party distribution fees payable to our marketing agent in Latin America, as we have experienced roughly 70% AUM growth in the region since the beginning of the year. These increases were partly offset by lower contractual gold payments and marketing expenses. Next slide. Now a few comments on our forecasted expense guidance. Variability in our compensation expense is driven by our performance-based compensation plans, which consider our organic growth, revenue growth, margin expansion, and our share price performance in relation to our peers, whereby we currently rank number one out of 13. Given our performance to date, we anticipate our compensation expense to be near the high end of our guidance range. We anticipate our discretionary spending to be near the high end of our guidance range as well, having recognized 43.4 million in discretionary spending year to date and forecasted Q4 seasonal spend. We reported a gross margin of 80.1% in the third quarter, and we are updating our gross margin guidance to be between 79 and 80% from 79%, which we believe should be sustainable at current AUM levels. Our forecasted third-party distribution expense is being updated to be between $9 million and $10 million, driven largely by the growth we are experiencing in Latin America. And our interest income is trending higher, given the magnitude of our invested assets and higher interest rates. We now anticipate our interest income to be between $3.5 to $4 million for the year. That's all I have. I will now turn the call over to Jared.