WisdomTree, Inc.

Greetings and welcome to the WisdomTree third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A 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. It is now my pleasure to introduce Jeremy Campbell, head of investor relations. Thank you, Jeremy. You may begin. Good morning.

Good morning. Before we begin, I would like to reference our legal disclaimer available in today's presentation. This presentation may contain forward-leading 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-leading statements, including, but not limited to, the risks set forth in the presentation, in the risk factor section of Wisdom Tree's annual report on Form 10-K, for the year ended 12-31-2023, and in subsequent reports filed with or furnished to the Securities and Exchange Commission. WisdomTree assumes no duty and does not undertake to update any forward-looking statements. Now, my pleasure to turn the call over to WisdomTree CFO, Brian Edison.

Thank you, Jeremy, and good morning, everyone. I'll be covering our third quarter results along with commentary on our forward-looking guidance before turning the call over to Jarrett and Jono for additional updates on our business. We ended the quarter with record AUM of $112.6 billion, notwithstanding the $2.4 billion of outflows we observed during the third quarter. The outflows were largely from our currency-hedged Japan product, DXJ, our floating rate treasury product, USFR, and tactical commodity trading. While flows proved to be a headwind this quarter, favorable market conditions ultimately drove our AUM higher and to record levels. We also remained very active on the capital management front. Over the last year and a half, we've delivered highly accretive transactions, including the retirement of our gold royalty obligation, and the repurchase of preferred stock from the World Gold Council, which was accomplished on favorable terms. During this quarter, we repurchased the preferred stock convertible into 14.75 million shares of common stock from ETFS Capital for 144 million or 975 per share. This transaction had no restrictions and has no impact on ETFS Capital's voting threshold which remains at approximately 10% of shares outstanding. Our decision to pursue this repurchase was preconditioned on our ability to achieve an accretive outcome. This required us to raise financing through the issuance of new convertible notes and afforded us the opportunity to retire a substantial portion of our notes maturing in 2028, which were currently in the money. We also repurchased 5.7 million shares of our common stock in connection with the raise. Taken all together, we raised an incremental 240 million of convertible notes while reducing the interest rate from 5.75% to three and a quarter and increasing the conversion price from 954 to 1182. The proceeds from the financing were used to reduce our diluted shares by approximately 20 million and ultimately led to a 9% accretive transaction. Our record AUM continues to drive revenue growth and expanding margins, while capital management actions further accelerate EPS growth. Next slide. Our adjusted revenues were 109.4 million during the quarter, an increase of 2.3% from the second quarter and up approximately 20.5% versus the prior year quarter, driven by higher average AUM. The comparison versus the prior year quarter also includes higher other revenues attributable to our European listed products, which have grown meaningfully and represents substantial revenue capture away from the expense ratio, providing further revenue diversification. On a year-to-date basis, our adjusted revenues have grown over 20%, and our adjusted operating margin was 34.3%, representing expansion of over 820 basis points versus the prior year, or 590 basis points organically, when adjusting for the impact of our gold royalty buyout, which was accomplished in May of last year. Our adjusted net income for the quarter was $28.8 million, or 18 cents Next slide. Now a few comments on our forecasted guidance. Our discretionary spending was $45.4 million year-to-date. We are narrowing our full-year discretionary spending guidance to range from $62 to $65 million, previously $64 to $68 million. The range considers fourth-quarter seasonality, and is also largely dependent on the magnitude of marketing spend associated with WisdomTree Prime over the remainder of the year. Our annual adjusted interest expense guidance is being updated to be approximately $16 million, previously $14 million, due to the incremental debt raised to facilitate the repurchase of preferred stock from ETFS Capital, as well as the repurchase of 5 million shares of common stock as well. Our adjusted interest expense run rate should be about $5 million per quarter, which is a reminder, excludes 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 year to date was $4.6 million, and we are updating our interest income guidance for the year to be about $6 million, previously $5 million, based upon the magnitude of our forecasted interest earning assets. And our weighted average diluted shares were $156.7 million during the third quarter. We anticipate our weighted average diluted shares to be $147 to $148 million in the fourth quarter, taking into consideration the full quarter impact of the 20 million shares repurchased in August. As a reminder, this guidance does not take into consideration any variability in shares associated with our convertible notes. Our compensation, gross margin, third-party distribution, and tax guidance remains unchanged from last quarter. That's all I have. I will now turn the call over to Jarrett.