WisdomTree, Inc.

Greetings and welcome to the Wisdom Tree Q4 2024 earnings call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Jessica Zulu, 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. In the risk factor section of WisdomTree's annual report on Form 10-K, for the year ended December 31st, 2023, and in subsequent reports filed with or furnished to the Securities and Exchange Commission. 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 Edmundson.

Thank you, Jessica, and good morning, everyone. I'll begin my remarks with a recap of 2024 and our fourth quarter results followed by our 2025 expense guidance before turning the call over to Jarrett and Jono for additional updates on our business. The year 2024 was marked by numerous accomplishments. We closed the year with AUM of $109.8 billion, up almost 10% from the prior year. This growth further showcased the operating leverage in our business model, highlighted by year-over-year adjusted operating margin expansion of 680 basis points. These results, combined with the execution of strategic capital management initiatives, including the highly accretive repurchase of ETFS capital's preferred stock earlier this year, as well as last year's retirement of our gold royalty obligation, have driven an increase of over 70% in our adjusted EPS and a 50% increase in our stock price year over year. Next slide. Adjusted revenues were 110.5 million during the quarter. up 1% sequentially and approximately 22% higher than the same period last year, driven by higher average AUM. The year-over-year improvement also reflects higher other revenues attributable to our European listed products, representing sustainable revenue capture and providing further revenue diversification away from the expense ratio. On a year-to-date basis, our adjusted revenues have grown over 21%, And our adjusted operating margin was 33.6%, representing expansion of over 680 basis points versus the prior year. Our adjusted net income for the quarter was $25.3 million, or 17 cents a share. These results reflect higher fund management expenses arising from non-recurring costs related to our custody migration and higher professional fees as we recognize the remaining contractual costs WisdomTree Prime service provider as we continue expanding our capabilities to further enhance the platform with internal resources. The net impact of these non-recurring items was about a penny a share. Next slide. Now a few comments on our 2025 expense guidance. We are forecasting our compensation to revenue ratio to range from 28 to 30 percent, which includes planned hires, as well as compensation adjustments and the annualization of hires made during 2024. The range considers variability in incentive compensation with drivers including the magnitude of our flows, revenue, operating income, and margin targets, and our share price performance in relation to our peers. In addition, the high end of the range contemplates unfavorable market conditions recognizing that a meaningful portion of our compensation expense is fixed in nature. And as a reminder, 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 year-end bonuses. We estimate first quarter compensation expense to be approximately $34 to $35 million. Discretionary spending is anticipated to range from $68 to $72 million as compared to $64.8 million in 2024. The modest uptick in spend contemplates additional marketing spend related to both digital assets and ETFs, investments in sales-related initiatives, including further promotions of our portfolio solutions offerings, higher amortization of capitalized software, and other costs. Our gross margin is anticipated to be about 81 to 82% compared to 80.2% this past year. Our updated guidance takes into consideration current AUM levels, changes in service providers, and anticipated fund launches. And as a reminder, our Q4 gross margin was adversely impacted by non-recurring costs incurred in connection with our custody migration this past quarter. Our third-party distribution expense is anticipated to range from 11 to 12 million as we expand our partnerships and grow AUM on the platforms. Our annual adjusted interest expense guidance is anticipated to be approximately 20 million, higher than the prior year due to incremental debt raised last August to facilitate the repurchase of preferred stock from ETFS Capital. As a reminder, This guidance excludes interest costs we were required to impute under GAAP related to our interest-free financing of shares we repurchased from the World Gold Council in 2023. Our interest income is anticipated to be approximately $7 million, largely aligned with the interest income recognized in the prior year based upon the magnitude of our forecasted interest earning assets and projected interest rates. and our weighted average deleted shares were 158.8 million during 2024. We anticipate our weighted average deleted shares to be 149 to 150 million in 2025, taking into consideration the full year impact of the 20 million shares we repurchased last August. As a reminder, this guidance does not take into consideration any variability in shares associated with our convertible notes. That's all I have. I will now turn the call over to Jared.