WisdomTree, Inc.

Greetings. Welcome to WisdomTree first quarter 2024 earnings call. This time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference today, please press star zero from your telephone keypad. As a reminder, this conference today is being recorded. At this time, I'll turn the conference over to Jessica Zalum, head of corporate communications. Jessica, 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 Wismentry's annual report on Form 10-K for the year ended December 31st, 2023. Wisentrie assumes no duty and does not undertake to update any forward-looking statements. Now, it is my pleasure to turn the call over to Wisentrie CFO, Brian Edmondson.

Thank you, Jessica, and good morning, everyone. Let me begin by sharing our results for the first quarter along with commentary on our expense guidance before turning the call over to Jarrett and Jono for additional updates on our business. We continue to demonstrate our ability to grow organically, having generated $2 billion of net inflows during the quarter. Sustainable flows have been a continuing theme with over three years of positive momentum, and our results this quarter illustrate the breadth and depth of our product lineup and serve as a proof point in our ability to put points on the board away from USFR. Our $2 billion of inflows were broad and diverse and generally into products with higher fees, which has remixed our blended fee rate higher, setting the table for higher revenue capture for the second quarter. Our inflows, coupled with positive market movement, resulted in us ending the quarter with record AUM of $107.2 billion. This is driving revenue growth and expanding margins, demonstrating the scalability of our business models. Continuing organic growth coupled with disciplined expense and capital management alongside positive market conditions is the formula for further margin expansion and accelerated EPS growth. Next slide. Revenues were 96.8 million, an increase of 6.6% in the fourth quarter and up 18% from the prior year quarter, driven by higher average AUM. We have also observed adjusted operating margins expanding over 820 basis points versus the first quarter of last year, or 280 basis points organically when adjusting for the impact of our gold royalty buyout, which we accomplished in the second quarter of last year. Our adjusted net income for the quarter was 20.3 million, or 12 cents a share. Next slide. Our adjusted operating expenses were up 5% for the quarter. The largest contributor was compensation as we experienced elevated seasonality in the amount of compensation we report in the first quarter due to payroll taxes, benefits, and other items in connection with the payment of year-end bonuses. Fund management expenses were also higher, driven by higher average AUM. Next slide. Now a few comments on our forecasted expense guidance. Our forecasted compensation expense remains unchanged, ranging from $108 to $118 million. This guidance considers variability in incentive compensation with drivers including the magnitude of our flows, revenue and operating income growth, margin expansion, and our share price performance in relation to our peers. Where we sit today, a quarter into the year, and given a strong start, we would anticipate trending towards the upper half of this range. Our discretionary spending was $14.9 million in the first quarter. We are reiterating our full-year discretionary spending guidance of $64 to $68 million as we anticipate an uptick in marketing spend in connection with our national rollout within Tree Prime. We reported a gross margin of 79.4% in the first quarter. We are maintaining our gross margin guidance of 79 to 80% considering current AUM levels and fund launch is anticipated during the course of the year. If AUM scales higher from continued organic growth or favorable market conditions, we would anticipate further gross margin expansion. Our third-party distribution expense was $2.3 million in the first quarter. We are maintaining our guidance of $10 to $11 million for the year. We are also maintaining our annual adjusted interest expense guidance of $14 million. As a reminder, Our adjusted interest expense guidance is exclusive of any interest costs we are required to impute under GAAP related to our interest-free financing of the shares we repurchased from the World Gold Council last November. Our interest income during the first quarter was $1.4 million. We are increasing our interest income guidance for the year by $1 million to $5 million based upon the magnitude of our forecasted interest earning assets. Our adjusted tax rate was 24.9% in the first quarter and our guidance of 24% to 25% remains unchanged. And our weighted average diluted shares were 165.3 million during the first quarter and our guidance of 166 to 168 million for the year remains unchanged as well. That said, This guidance does not take into consideration any incremental shares associated with our convertible notes. Our current stock price of roughly $9 per share is up over 30% year to date and is approaching the $9.54 conversion price related to our convertible notes scheduled to mature in 2028. While the notes require principal to be paid in cash, our diluted shares would need to be increased for any incremental shares associated with the conversion option once our stock price exceeds 954 per share. An illustration is included within our earnings presentation to assist in quantifying the incremental shares associated with the conversion option going forward. That's all I have. I will now turn the call over to Jared.