Prepared remarks
Greetings, and welcome to the WisdomTree Q1 2026 Earnings Call. Operator instructions: Please note, this conference is being recorded. I will now turn the conference over to Jessica Zaloom, Head of Corporate Communications. Thank you, 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, in the Risk Factors section of WisdomTree's annual report on Form 10-K for the year ended December 31, 2025, 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 it is my pleasure to turn the call over to WisdomTree's CFO, Bryan Edmiston.
Thank you, Jessica, and good morning, everyone. I'll begin with a review of our first quarter results, followed by updates to our forward-looking guidance before turning the call over to Jarrett and Jono for additional business updates. Our assets under management reached a record $152.6 billion, marking our fifth consecutive quarter of record AUM and up 6% from year-end driven by net inflows and market appreciation. Growth was broad-based with record AUM across our U.S., European and digital asset platforms. We generated $5.9 billion of net inflows globally, a 17% annualized organic growth rate, including $3.1 billion in Europe, $2.6 billion in the U.S., $100 million in digital assets and $75 million in private assets. Flows were led by our international equity exposures, including our Japan strategies and UCITS thematic products with particular strength in areas such as our European defense and rare earth funds. Fixed income was also a key contributor and our leveraged and inverse suite also generated meaningful inflows, reflecting elevated volatility in the commodity markets. Notably, flows were skewed toward higher fee products resulting in a 1 basis point increase in our average advisory fee during the quarter. We also just completed our acquisition of Atlantic House, a U.K.-based asset manager with approximately $4 billion in AUM, generating 53 basis points in advisory fees from its defined outcome and derivatives driven strategies. The business also generates complementary revenues including 25 basis points on $1.5 billion of AUA in managed models as well as structuring fees from bespoke investment solutions, which totaled $13 million during 2025. Taken together, these revenue streams represent an overall revenue yield of approximately 95 basis points. The purchase price is $200 million, which has been financed through recently issued convertible notes. This transaction is expected to increase our overall revenue yield by almost 2 basis points, is modestly accretive and further enhances our product capabilities and distribution footprint across Europe, while supporting higher quality revenue growth over time. Overall, our record AUM and strong organic growth underscore the strength of our business, while our disciplined approach to strategic expansion positions us well to continue driving growth and long-term shareholder value. Global AUM currently stands at approximately $164.3 billion, up almost $12 billion or 8% from March 31, driven by favorable market conditions, approximately $800 million of net inflows and the inclusion of Atlantic House. Next slide. Revenues were $159.5 million during the quarter, an increase of 8% from the fourth quarter and 48% from the prior year quarter driven by higher AUM and growth in other revenues. Other revenues of $16.4 million reflect higher AUM and elevated trading activity in our European products, up from almost $13 million recognized in the prior quarter. Results versus the prior year quarter also include approximately $8 million of revenue contribution from Ceres. Ceres' contribution included management fees and performance fees of $5.2 million and $3 million, respectively. Performance fees reflect normal seasonality tied to performance-based fee structures along with limited activity in the solar portfolio during the quarter. Our adjusted operating margin has expanded 770 basis points when compared to the prior year quarter. Adjusted net income was $40.6 million or $0.27 per share. Adjusted net income excludes the loss on extinguishment of convertible notes related to the repurchase of a significant portion of our 2026 and 2029 maturities. This refinancing reflects a proactive repositioning of our capital structure, replacing lower conversion price instruments with new convertible notes at a 4.5% coupon and $21.58 per share conversion price, providing meaningful headroom and reducing potential dilution. This transaction also supports funding for the Atlantic House acquisition, aligning our financing strategy with our broader growth and capital allocation priorities. As a reminder, the Atlantic House acquisition is expected to add approximately $4 billion in AUM, generating 53 basis points in advisory fees, along with complementary revenues from managed models as well as structuring fees from bespoke investment solutions. The transaction closed this morning. Next slide. Now a few comments on our forward-looking guidance, which includes the impact of the Atlantic House acquisition on our expense base. Our compensation to revenue ratio of 26% to 28% remains unchanged, and we expect to trend towards the upper half of the range, reflecting the addition of Atlantic House which is accretive to our operating margins and earnings, but carries a modestly higher compensation ratio. We are also increasing our gross margin guidance by 1 percentage point, now ranging from 83% to 84%, reflecting continued operating leverage from organic growth as well as the Atlantic House acquisition. We are also increasing our discretionary spending guidance by $3 million to reflect the inclusion of Atlantic House. Our third-party distribution expense is expected to range from $20 million to $24 million, driven by higher AUM and elevated trading activity primarily across our European platforms, with commodity market volatility influencing where we fall within the range. Interest expense is forecasted to be approximately $53 million for the year, reflecting our current capital structure and the anticipated retirement of our remaining 2026 and 2029 notes this summer. Quarterly interest expense is expected to be approximately $15 million in the second quarter declining to approximately $14 million in both the third and fourth quarters. We are increasing our interest income guidance by $2 million to $10 million for the year, reflecting the level of our interest-earning assets in the forecasted rate environment. Our adjusted tax rate is expected to be approximately 24% to 25% compared to 24% previously, reflecting the addition of Atlantic House. And finally, our weighted average diluted shares were 152 million in the first quarter. We expect shares to increase to approximately 155 million to 158 million in the second quarter reflecting the full impact of shares issued in connection with our convertible note refinancing and then declining to approximately 154 million in the second half of the year, following the retirement of the remainder of our 2026 and 2029 notes, which we anticipate settling for cash. That's all I have. I will now turn the call over to Jarrett.
All right. Thank you, Bryan, and good morning. This was another quarter marked by steady broad-based execution and continued momentum across the business. The results were strong, but more importantly, they reflect the consistency of a strategy that is delivering and scaling. As Bryan just highlighted, we generated nearly $6 billion of net inflows in the quarter including $2.6 billion in March, making this our strongest quarter since Q1 of 2023. And what stands out the most, though, is the quality and the breadth of those flows. We saw inflows across 7 of our 8 major product categories, reinforcing that WisdomTree is increasingly winning as a diversified platform rather than tied to any single product theme or market call. And that matters because it demonstrates that we can generate growth across market environments and not just when conditions are favorable. This quarter also highlighted how clients are using us. They engage with us across geographies, asset classes and use cases from international developed equity to fixed income to leverage strategies to digital assets. And in March, in particular, we saw a bear market playbook unfold in real time across our platform. Clients were allocating to both offense and defense, income, liquidity and hedging strategies alongside risk-taking exposures. And what stood out in that environment was how well the platform held up despite an extremely volatile backdrop. AUM ended the quarter at approximately $153 billion and has since recovered to $164 billion including $4 billion from Atlantic House. And that resilience speaks directly to the strength and utility of our product lineup. Products like USFR continue to serve as an important portfolio ballast and more broadly, you can see the key drivers of that stability and growth. Our UCITS platform continues to lead with over $3.4 billion of inflows year-to-date, and AUM up over 26%. Portfolio Solutions continues to gain traction as a structural growth engine. And in digital, we generated $98 million of inflows in Q1 with AUM reaching a record $867 million, driven primarily by our tokenized money market fund. Importantly, the story there is evolving. It's increasingly about real use cases and adoption and not just infrastructure. Alongside that organic progress, we also continued to make measured strategic progress. Ceres is now part of the base business, and with the closing of Atlantic House this morning, we are continuing to build out the platform in a disciplined way. Both transactions are consistent with how we think about capital allocation and creating faster, more durable long-term growth, which Jono will walk through in more detail in a moment. Overall, there's a difference between having a strategy and delivering on it. And what we are doing is delivering, and we built a proven track record of consistent execution quarter-by-quarter. We are strengthening the platform and building real momentum. And with that, let me turn it over to Jono.
Thank you, Jarrett, and good morning, everybody. What Bryan and Jarrett just walked through really speaks to the strength of the business we have built. We delivered another quarter of broad-based execution in a volatile environment with strong inflows, with resilient assets and continued traction across the platforms. I think the most important takeaway is that this was not driven by any one product or one strategy or one market backdrop. It reflects a business that is becoming more diversified, more durable and increasingly more capable of compounding growth over time. That is exactly the foundation we want in place as we continue to build WisdomTree. That brings me to the two transactions we have recently closed; Ceres and Atlantic House. We are not pursuing acquisitions for the sake of being acquisitive. M&A for us is a complement to organic growth, not the core strategy. The bar is high, the fit has to be clear and the transaction has to strengthen the business in tangible ways. At a high level, the logic is simple - we want companies that help us diversify the business by adding differentiated products and capabilities we do not have today. We want them to enhance the economics of the firm by bringing higher revenue yields and stronger margin characteristics. We want them to accelerate growth, by giving us more ways to win flows, deepen client relationships and extend those offerings more broadly across WisdomTree. Ceres is a very good example of that approach. It brought us into private assets to an uncorrelated asset class, and it did so in a way that adds attractive economics to the business. It expands our capabilities in an area where we see real client demand while also improving the earnings profile of the firm. Atlantic House fits the same logic. It adds differentiated derivatives capability, expands our reach, particularly in the U.K. wealth channel and strengthens our ability to deliver more outcome-oriented solutions for clients. It also helps globalize our portfolio solutions business by extending that footprint into the U.K. and accelerating the international expansion of that offering. From an economic standpoint, Atlantic House brings a revenue yield of approximately 95 basis points which lifts our overall firm-wide revenue yield by about 2 basis points to roughly 43.5 basis points. Just as importantly, it brings expertise and solutions that we believe can be scaled through the broader global WisdomTree platform. So again, this is not simply about adding assets, it's about adding enhanced expertise and differentiated offerings with better economics and greater growth potential. Stepping back, what these deals really show is how we are continuing to strengthen the business. We are broadening the platform, improving the quality of our revenue and adding areas of expertise that we believe can help accelerate firm-wide organic growth over time. That is why both Ceres and Atlantic House fit so well with where we are taking WisdomTree. We are still in the early stages of integrating and scaling these capabilities, but the fit is clear, the rationale is clear and the opportunity is clear. We are building a business with more ways to win, better economics and greater earnings power. That is how we will continue to deliver strong top line growth, continued margin expansion and even faster earnings per share growth over time. Thank you. Now let's open up the call to questions.
Questions and answers
Operator instructions: Our first questions come from the line of Wilma Burdis with Raymond James.
Could you talk about the advantages of WisdomTree's tokenized money market fund compared to other non-tokenized yield-generating options with respect to your new partnership with Stable C?
Absolutely. Thank you for the question. Will, you pick that up?
Yes, absolutely. Page 11 of the deck talks about how we're positioned to win business through a combination of the functionality that we've got and our strong U.S. regulatory positioning. So unlike a lot of the tokenized money market funds that are out there, WTGXXR is a 1940 Act fund sold by prospectus in the U.S. It's available to U.S. retail, U.S. businesses and global businesses as well. So just by virtue of doing that and also having strong functionality around that. Also this quarter, we announced that we got an exemptive relief from the SEC to have the money market fund trade via broker-dealer in the secondary market on an intraday 24/7 basis, which is truly unique functionality, especially in the U.S. So we feel really strong about our positioning of our tokenized money market fund, and we're establishing a lot of partnerships and relationships. Stable C is a great example. Stable C, as a start-up run by some former bank employees, that’s focused on payments use cases for small- and medium-sized businesses throughout the United States. And I would not have thought about some small businesses in the U.S. as being underbanked, but through these conversations, we've been learning a lot about how getting access to a tokenized money market fund yielding 3.5% today is much, much better than what they were getting through maybe nonexistent savings accounts paying essentially nothing. So it's just showing new use cases as we build distribution relationships, both in TradFi in addition to DeFi channels where we've been focusing today. So that's some of the ways that we're differentiated and why we feel really good about our positioning right now.
Great. And then are there opportunities to generate higher fees on model portfolios as WisdomTree gains scale and the adviser relationships? And could you provide some detail on the overall relationship dynamics there, especially given the additional model AUM from Atlantic House?
Jarrett, I think that starts with you and maybe Jeremy.
Sure. I think in general, yes, the model opportunity for us globally does a number of things. First of all, it brings stickier assets, deepens the relationship with our partners, and it does lead us to a nice stable mix of WisdomTree funds that are in those portfolios. In addition to that, as you add horsepower from Atlantic House, you add even further value that, as Jono covered in prepared remarks, comes at a higher revenue capture. So overall, these things, including SMAs, by the way, which is another area where we're pushing forward quite nicely, lead to higher quality flows with a tilt towards higher revenue capture and just better quality of earnings.
If I have time for one more. We saw other revenues were strong in the quarter. Could you talk about what contributed to that? And if there's going to be additional growth there?
Yes. This is Bryan, and thank you for the question. Our Other revenues were $16.4 million this quarter versus $13 million last quarter, driven by higher AUM and transaction fees, largely tied to our European commodity products. If volatility persists, we could see similar levels of revenue growth going forward. About 40% of that line item is transaction fees and 60% is AUM-based, so there is some variability. Also, do not overlook Atlantic House. In 2025 Atlantic House generated about $16 million of revenue from its models and product structuring business, and that revenue will run through this line item going forward. Prorated as of today, that would be about $11 million of incremental revenue.
Let me just add on Atlantic House, their derivative solutions that they've been doing just in the U.K. have really established a business that has scaled. They've done over $20 billion of structured solutions delivered across more than 120 clients. We do believe those bespoke defined outcome solutions have both broad European and U.S. appeal. That other revenue line should grow not just for the rest of this year, but significantly in 2027. Anything else, Wilma?
Operator instructions: Our next questions come from the line of Chris Kotowski with Oppenheimer.
This is actually John Coffey on for Chris. I just had a couple of questions. One is on Page 4. I think when you mentioned your 95 basis point yield for Atlantic House. Is that the right way to look at revenues going forward? Or do you think it should be modeled out on constituent parts like the models under advisement yield and structuring fees? Should this be modeled more granularly or is that 95 a pretty good way to think about it going forward?
I'll start. I think about the business in revenue yield terms. It's very important to me that we grow our revenue yield. I think it's really one of the key metrics and it ties to product consideration. We are roughly 43.5 basis points on $165 billion today. Atlantic House was 95 basis points of revenue yield, Ceres 200 plus, and we are focused on revenue yield as part of our strategic initiatives. There is some volatility outside of our control, meaning asset mix and market movements. But from what we can control, that is a metric that we are laser-focused on. Bryan, I'll turn it to you for modeling detail.
Yes. From a modeling standpoint, I would suggest not looking at it as one overall revenue yield but looking at the component parts. The advisory fee line is going to grow based upon the AUM on our platform, excluding Ceres AUM, at whatever our revenue capture is in that line item. That revenue capture ticked up 1 basis point this quarter. I would think about Ceres separately, modeling those management fees at 1% of AUM. And then performance fee is another variable element to consider. For the other revenue line, a lot of that has been driven by activity in Europe in our commodity products; there's been a trend over the last few quarters. As I mentioned earlier, Atlantic House will also factor into that line item going forward.
All right. Great. Very helpful. And just one last question. When we think about Atlantic House, will that show up on your IR page where you have your daily AUMs? Is that something we'll start to see contributing to those? Or is this something like Ceres where it's treated differently than your other ETPs?
We should be having that AUM as part of what we're reporting in the not-too-distant future. We need a little bit of time to get integrated.
Jeremy Schwartz, could you just add a little bit on future product plans around Atlantic House, which will obviously contribute to AUM on the IR side, and how it ties into revenue yields?
They currently have a bunch of UCITS funds in addition to that derivative solutions business that Jono talked about. We definitely plan to be part of the global synergies and extend that franchise both to the market as well as the U.S. market. We have plans to be aggressive with the product roadmap. When you look at where there has been big growth in ETFs, the fund types from income over protection type strategy — we're calling it defined outcome and target return — we can do in many different asset classes. We have targets to launch both in the U.S. and Europe as many as 15 to 20 funds over the next 24 months. We're going to have a big family. We're excited to be working with their team. It's a very strong, actively managed team, and we think we can really position ourselves well versus the market in that space. You'll definitely see a big product roadmap coming from us in both markets.
Operator instructions: Our next questions come from the line of Michael Grondahl with Northland Securities.
First question is with your relatively new digital money market fund, WTGXX, that is growing rapidly. It seems like there's a lot of demand for that product. I wanted to understand a little bit better how you're marketing that? What's the communication strategy just to get the word out?
Will obviously will address marketing and its use cases as it's being used differently in the world of on-chain than in the mutual fund format.
Yes, absolutely. Thanks for the question. It's continuing to grow strongly. Even since this deck was dated as of March 31, our AUM is up another $50 million in April, and assets continue to grow. WisdomTree Connect users, we had 29 at year-end and there were 41 as of March 31. That number is higher today as well. We're seeing continued strong growth in that. We distribute both to U.S. retail through WisdomTree Prime, also to global businesses and global platforms really through WisdomTree Connect. Today, 90% to 95% of the AUM is through the WisdomTree Connect platform. That platform focuses on serving different use cases. It could be a stablecoin issuer; we've seen a lot of them post-Genoa being implemented, looking to hold WTGXX as the reserved asset for the stablecoins they issued. WTGXX is clearly within the 1940 Act compliant reserve asset framework. It's treasury management for stablecoin-native businesses. This is exactly what Stable C is helping to serve. The last piece is really around collateral mobility — the ability to use WTGXX in a yield-bearing form of collateral rather than just sitting in stablecoins if you're doing a crypto transaction. WTGXX being a yield-bearing form of collateral that's able to be moved instantly gives people participating in that transaction much more capital efficiency. So we're seeing considerable growth in that use case as well, onboarding new clients focused on that. It's not just a buy-and-hold thing; it's about making it more useful and serving different clients: the on-chain community and more traditional finance participants who aren't well-served by a traditional money market fund.
Got it. And then, Jono, when talking about Atlantic House and those funds, you had mentioned the broader European appeal and U.S. appeal — how should we think about rolling those out to those two markets?
We obviously launch 20 to 30 funds a year. There will be a significant number of new fund launches in the next 18 to 24 months dedicated to the capabilities we just acquired around active derivative solutions, options-based strategies sometimes called buffer funds or defined outcome funds. It's a broad category, more than $100 billion globally in ETFs. We think much of what's in the market today is 1.0; there's room for differentiation. It's a little more developed in the U.S. but there's tremendous room for differentiation in Europe. The team we acquired will play portfolio management and sales roles, helping to show global clients these solutions. If I had a range of expense ratios, it's probably between 55 and 85 basis points for the types of products we'll be launching, which is above our expense ratio average now. We're very excited to put the Atlantic House team to work.
Yes. No, that's helpful.
Operator instructions: Our next questions come from the line of George Sutton with Craig-Hallum.
It is Logan on for George. Can you hear me all right?
Yes.
Awesome. I want to follow up on the digital asset side. I wondered if you could just walk through the priorities there. For a long time, it was more of a consumer-focused effort — it seems like a lot of the momentum now is on the institutional side — and there's also been talk about white labeling. Could you rank those for us? And then also, the Stable C partnership is nice to see. Do you see more opportunities for distribution partnerships out there similar to that?
Happy to take that. I wouldn't really rank them. For us, it's about growing AUM and growing the number of people that are using the platform. Those are tied directly to the metrics on the page. That's what I look at every day to see if we're being successful: Are we driving AUM growth and the number of platform users? In the future, and you started to see this with the WTGXX announcement, there will be other types of transactions and revenue streams that will continue to grow over time as well. That will be a third metric I look at. So we don't stack rank one more important than the other; it's an all-of-the-above approach. We will service retail beyond WisdomTree Prime. WisdomTree Prime is a key priority; we want to continue to drive people to use that app. We want to meet people where they are. Economically, WisdomTree is indifferent; it's about getting people to use our products and services. We're pursuing retail, institutional, distribution partnerships and white-labeling opportunities together as part of one strategy to grow usage and AUM.
Will, could you touch on the vertical integration of your offering? You've put in a lot of effort over the last seven years. Can you just touch on that?
Yes, absolutely. Touching on Page 11 as well: if you look at competitive products out there, there's often three or four different firms that comprise that stack — a separate tokenization provider, transfer agent, asset manager, stablecoin conversion service. In WisdomTree's case, since we've invested early, we've built much of that stack ourselves. When you're buying the WisdomTree tokenized money market fund using USDC, for example, the other counterparty in that transaction is WisdomTree. We're able to convert the stablecoin, and if you wanted to trade it instantly, you can do it against our broker-dealer, and you're investing in a WisdomTree-managed fund. We've built those capabilities ourselves, which has allowed us to win business in areas where we're competing today. It also opens up optionality; we're having active conversations about licensing elements of this technology stack to other asset managers or participants in the space. We feel good about the investments we've made, and as more wallets come online and stablecoin AUM continues to grow, we expect to continue to win share.
One other question. You mentioned lower seasonal performance fees with Ceres but inflows were pretty strong this quarter. Could you unpack that a little? Is that just the fund closing timing or is there distribution capability starting to have an impact?
I think this is a combination. Bryan and Jeremy can elaborate.
On flows, it was a strong first quarter with $75 million in the quarter. Our first fund was closing, so that closure accelerated flows into the quarter as investors put money in before the fund closed. We're focused on getting our second fund launched soon. From a flows perspective, expect variability quarter-to-quarter; we generally don't provide flow guidance. Our long-term target remains unchanged: we're targeting $750 million over five years. On performance fee, there was some seasonality; the fee was a bit lower than in the fourth quarter. There wasn't much solar activity this quarter. Our baseline working assumption remains: take your AUM, apply a flow assumption, assume a 7% return on average, then factor in a 15% participation rate to arrive at a performance fee, with upside for solar and data center opportunities.
The way the appraisals work is that the farms are appraised in Q1 and Q1 has happened to be a little bit below performance on a regular basis over the last four to five years. As other farms get appraised in Q2, Q3 and Q4, they tend to be a bit higher in terms of performance. So that's consistent with what we've been seeing. We remain optimistic on where things are going.
Let me just add that Bryan mentioned we closed Fund I and Fund II is on its way and will be launched in the next couple of months. The WisdomTree distribution team is already engaged and we've got strong interest and a live pipeline of leads. We're optimistic the good track record of flows will continue.
And let me foreshadow something that will become increasingly important for WisdomTree in the second half of this year and in 2027: you will see more farmland in ETFs. The 1940 Act does allow for up to 15% of assets in illiquid assets, and we see appropriate opportunity in some broad commodity and real estate ETFs to include farmland. The dynamic between privates and ETFs is something WisdomTree will be focused on later this year and in the coming years.
Understood. Congrats on the continued strength, I will leave it there.
We have reached the end of our question-and-answer session. I would like to turn the floor back over to Jonathan Steinberg for any closing comments.
Thank you. As we approach the 20th anniversary of launching our first ETFs this June, it's worth pausing to recognize just how far we've come and how well positioned we are for what comes next. Today, with $165 billion in assets under management and a global team of 400 employees, WisdomTree stands stronger than at any point in our history. The efficiency of our business model, the breadth and diversity of our product set and the distinctly entrepreneurial culture continues to differentiate us in a crowded and evolving industry. Our first quarter momentum is not an outlier. It's the continuation of years of consistent high-quality organic growth. Delivering 17% annualized organic growth across a diversified asset base in a volatile market underscores both the resilience of our platform and the strength of client demand. At the same time, expanding margins are translating that growth into meaningful earnings per share acceleration. Importantly, we are not standing still. Our investments in tokenization and private assets are opening new avenues for growth and positioning WisdomTree at the forefront of where the industry is heading. Our commitment to shareholders is clear in the numbers: we've compounded earnings per share at 30% over the past five years and more than 50% over multiple three-year periods. This isn't just strong growth. It's growth that is accelerating, driven by increasing scale and efficiency. With the impact of recent acquisitions of Ceres and Atlantic House coming online in the second quarter, we expect that acceleration to continue over the next several quarters; the trajectory is unmistakable. We are entering our next chapter from a position of strength with momentum, with innovation and with discipline, all working in our favor. If the first 20 years were about building the foundation, the next 20 years will be about scaling it in ways that create even greater value for our clients and our shareholders. So I want to thank all of you for participating in today's call, and we'll speak to you next quarter. Thank you.
Thank you, ladies and gentlemen. This does now conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time, and enjoy the rest of your day.