WT 10-K & 10-Q changes, risk factors and insider trading
WisdomTree, Inc. · NYSE · Security Brokers, Dealers & Flotation Companies · CIK 880631 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Operational risks related to the post-acquisition integration of Ceres could adversely affect our business, results of operations and financial condition.”
New heading “Our ability to successfully operate and grow the acquired Ceres business depends on the retention of key personnel, and the loss of such individuals could adversely affect our business.”
New heading “Our acquisition of Ceres may subject us to expanded and evolving regulatory requirements and increased supervisory oversight, which could adversely affect our business.”
New heading “Through our acquisition of Ceres, we entered the private asset markets and may not be successful.”
New heading “Ceres’ performance is subject to risks associated with investments in direct real estate-related assets.”
New heading “Ceres’ business is dependent in part upon the profitability of Ceres Farms’ tenants’ farming operations, and a sustained downturn in the profitability of their farming operations could have a material adverse effect on the amount of rent Ceres Farms can collect and, consequently, its cash flow and net profits, and Ceres’ results of operations.”
New heading “Ceres Farms’ revenues are subject to risks associated with growing crops and the performance of the agricultural industry.”
New heading “Adverse changes in government policies and regulations related to farming could affect the prices of crops and the profitability of farming operations, which could materially and adversely affect the value of Ceres Farms’ properties and its results of operations.”
New heading “Potential liability for environmental matters could materially and adversely affect Ceres’ business, results of operations and financial condition.”
New heading “The failure of Ceres Farmland, LLC to maintain qualification as a REIT for U.S. federal income tax purposes would subject it to U.S. federal income tax on taxable income at regular corporate rates, which could adversely impact its business, results of operations and financial condition.”
New heading “Ceres may not be successful in pursuing new business opportunities, including in solar, AI data infrastructure and water rights, which could adversely affect its financial performance and strategic objectives.”
Removed heading “Our stockholder rights plan, or “poison pill,” includes terms and conditions that could discourage a takeover or other transaction that stockholders may consider favorable.”
Largest changes
“Ceres provides investment advisory services to, and manages, private funds, and a separate pooled investment vehicle, Ceres Farms, that invests its assets in farmland real estate. …”see in full comparison
“As a result of the Ceres Acquisition, we have expanded into investment strategies, products and markets that are subject to regulatory regimes and supervisory expectations that differ from, and in certain respects are more complex than, those applicable to our traditional ETP business. These expanded activities may subject us to additional oversight by the SEC and other regulatory authorities, including with respect to certain private fund adviser requirements, disclosure obligations, valuation practices, conflicts of interest, liquidity management and investor protection. …”see in full comparison
Each of the regulatory bodies with jurisdiction over us has regulatory powers over many aspects of our business, including the authority to grant, and, in specific circumstances to cancel, permissionssee in full comparisonpermissionsto carry on particular businesses. Our ETPs’ and Digital Funds’ failure to comply with applicable laws or regulations hashasin the past, and could in the future, result in fines, censure, suspensions of personnel or other sanctions, including revocation of our registration as an investment adviser.For example, in August 2024, WTAM received a Wells Notice from the Staff of the SEC advising WTAM that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action against WTAM alleging violations of certain provisions of the U.S. federal securities laws relating to three exchange-traded series of WisdomTree Trust managed by WTAM that pursued ESG-focused strategies. In October 2024, without admitting or denying the SEC’s allegations, WTAM agreed to resolve the matter by consenting to the entry of an order by the SEC, in which WTAM agreed to cease and desist from committing or causing any violations and any future violations of Sections 206(2) and 206(4) of the Investment Advisers Act, Rules 206(4)-7 and 206(4)-8 thereunder, and Section 34(b) of the Investment Company Act, and to pay a civil money penalty of $4.0 million. See Note 14 to our Consolidated Financial Statements for additional information.
“Adverse changes in government policies and regulations related to farming could affect the prices of crops and the profitability of farming operations, which could materially and adversely affect the value of Ceres Farms’ properties and its results of operations.”see in full comparison
“Ceres may not be successful in pursuing new business opportunities, including in solar, AI data infrastructure and water rights, which could adversely affect its financial performance and strategic objectives.”see in full comparison
“Ceres is subject to the risk of liabilities under federal, state and local environmental laws applicable to agricultural properties, including those related to wetlands, groundwater and water runoff. …”see in full comparison
Full comparison: every changed paragraph (46)
At December 31, 2024,2025, 55%50% of our AUM was
concentrated in ten of our
WisdomTree ETPs with approximately 21%18% in three of our domestic equity ETFs, 15% in four of our precious metal products, 11% in the WisdomTree
Floating Floating
Rate Treasury Fund, or USFR, 10% in three of our precious metal products,and 6% in two of our international developed market equity ETPs
and 3% in one of our emerging markets ETFs.ETPs. As a result, our operating results
are particularly exposed to the performance of these funds
and our ability to maintain the AUM of these funds, as well as investor sentiment
toward investing in the funds’ strategies. If
the AUM in these funds were to decline, either because of declining market values
or net outflows from these funds, our revenues would
be adversely affected.
We primarily depend on Mellon Investments Corporation, Newton
Investment Management North America, LLC andLLC, Voya Investment Management Co., LLC and Insight North America LLC to provide portfolio management
services, The Bank of
New York Mellon to provide us with critical administrative services to operate our business and our U.S. listed
ETFs, and other third
parties to provide many other critical services to operate our business and our U.S. listed ETFs. The failure of
key vendors to adequately
provide such services could materially affect our operating business and harm investors in our products.
We outsource to third-party vendors to provide
us with many services that
are critical to operating our business, including Mellon Investments Corporation, Newton Investment Management
North America, LLC, Voya
Investment Management Co., LLC and VoyaInsight InvestmentNorth Management Co.,America LLC as sub-advisers providing portfolio management services, and The Bank of
New New
York Mellon, or BNY Mellon, to provide custody services, fund accounting, administration, transfer agency and securities lending services.
We also rely on third-party providers to license indexes to certain of our U.S. listed ETFs,ETFs and European listed ETPs, perform index calculation
services for our
indexes and a third-party distributor for our products. The failure of any of these key vendors to provide us and our
products with these
services could lead to operational issues and result in financial loss to us and investors in our products.
We depend on Swissquote Bank Ltd , BitGo Trust Company, Inc. and Coinbase
Custody Trust
LLC to provide us with critical custody services for digital currencies that back WisdomTree digital assets. The failure
of any of Swissquote
and/orthese Coinbasecustodians to adequately safeguard these digital assets could materially adversely affect our business and harm investors
in this
product.
We depend on Swissquote Bank Ltd and Coinbase
Custody Trust LLC to provide us with critical custody services for digital currenciesProducts that back WisdomTree digital assets. Products that
are backed by digital currencies are subject to the risks
associated with the custody of digital assets, including the risk that the digital
currencies or the blockchain infrastructure could be
impacted by hacks or other malicious actions. WisdomTree Issuer X LimitedLimited, the issuer of WisdomTree Europe’s crypto ETPs, is reliant
on the security procedures and infrastructure of theits custodiancustodians to safeguard the underlying digital currency cryptographic keys. There
is no guarantee that the arrangements of the custodian will fully protect from loss of assets. Damage to the infrastructure or loss of
these assets may render the digital currency inaccessible and adversely impact the value of an investment in digital assets. The digital
currencies may also be exposed to the Internetinternet briefly before reaching the secure accounts of the custodian. There are additional risks
involved with an investment backed by digital currencies such as changes to the protocol (such as forks) which could damage the reputation
of digital assets or result in losses for investors. The risks associated with digital currencies and the failure of the custodian to
safeguard the underlying assets could result in financial loss to us and investors in our products and our recovery of any losses from
a custodian may be inadequate. The custodians perform additional services to crypto ETPs that may derive additional revenue by delegating
a part of our assets to validate transactions on the relevant blockchain (“staking”). There are certain operational and technological
risks associated with staking such as penalties due to bad validator behavior. Operational and technical errors in the context of staking
could damage the reputation of digital assets or result in losses for investors.
We depend on Apex Financial Services (Alternative Funds) Limited
in respect of the products issued by our Jersey-domiciled issuers, or ManJer Issuers, of ETCs (except WisdomTree Issuer X Limited), JTC
Trust Company Jersey in respect of products issued by WisdomTree Issuer X Limited, APEX IFS Limited in respect of the products issued
by WMAI and StateBNY StreetMellon Fund Services (Ireland) LimitedDesignated Activity Company in respect of the WisdomTree UCITS ETFs to provide us with
critical administrative
services to those products. The failure of any of those providers to adequately provide such services could materially
affect our operating
business and harm investors in those products.
We depend on Apex Financial Services (Alternative
Funds) Limited in respect of the products issued by the ManJer Issuers (except WisdomTree Issuer X Limited), JTC Trust Company Jersey
in respect of products issued by WisdomTree Issuer X Limited, APEX IFS Limited in respect of the products issued by WMAI and StateBNY StreetMellon
Fund Services (Ireland) LimitedDesignated Activity Company in respect of the WisdomTree UCITS ETFs, to provide fund accounting, administration
and, transfer agency
services, as well as custody services in the case of the WisdomTree UCITS ETFs. The failure of any service provider
to successfully provide
these services could result in financial loss to the products, us and investors in those products. In addition,
because each of the service
providers provides a multitude of important services, changing these vendor relationships would be challenging.
It might require us to
devote a significant portion of management’s time to negotiate a similar relationship with other vendors
or have these services
provided by multiple vendors, which would require us to coordinate the transfer of these functions to another vendor
or vendors.
The terms of contracts
with counterparties
are generally complex, often customized and often not subject to regulatory oversight. A voluntary or involuntary
default by
a counterparty may occur at any time without notice. In the event of any default by, or
the insolvency of, any counterparty, the relevant
products may be exposed to the under-segregation of assets, fraud or other factors that
may result in the recovery of less than all of
the property of our issuers that was held in custody or safekeeping in the case of physically
backedphysically-backed products or the recovery of property
that is insufficient in value to cover all amounts payable to holders of the applicable products
upon their redemption.
Operational risks related to the post-acquisition integration of Ceres could adversely affect our business, results of operations and financial condition.
Following the Ceres Acquisition, we face operational risks associated with integrating, where appropriate, its business, personnel, systems, processes and control environment into our existing operations. The integration process may be more complex, time-consuming or costly than anticipated and may require significant management attention, which could divert resources from our other businesses. In addition, Ceres operates in asset classes and strategies that differ from our traditional ETP business and may require enhancements to our operational infrastructure, risk management practices, valuation processes, compliance framework and internal controls. Any failure to effectively integrate operations, retain key personnel, harmonize systems and controls, or appropriately manage new and evolving operational requirements could result in operational inefficiencies, control deficiencies, increased costs, regulatory scrutiny, reputational harm or an inability to achieve the anticipated benefits of the acquisition, any of which could materially adversely affect our business and financial results.
We have launched products in Europe that are
indexed to baskets of cryptocurrencies or that may allow for staking. We have outsourced the administrator, transfer agent and custodial
functions for these products. While we typically outsource portfolio management services to third-party sub-advisers for our products,
in this case, we instead act as determination agent and placefacilitate buy and sell orders via the custodian who deals directly with a broker
to rebalance these crypto basket
ETPs in line with the indices. These rebalances typically occur quarterly. Expanding trading volumes
may increase the risk of trading
errors. The failure of any of our vendors to provide us and our products with the outsourced services
and our failure to correctly place
trade orders could lead to operational issues and result in financial loss to us and/or investors in
our products. For products through
which we derive additional revenue by staking, we operationally delegate the relevant assets to validators
in our role as determination
agent. Operational errors in the process could materially affect our business and harm investors in these
products. In addition, staking
features, such as lock-up periods, staking reward payout periods and reward amounts, are not necessarily
fixed over time and can cause
liquidity risk or delay the standard settlement period. This may cause redemptions to be delayed and may
result in a financial loss to
investors.
We are dependent upon the effectiveness of our own, and our vendors’, information security policies, procedures and capabilities to protect the technology systems used to operate our business (including emerging technologies, such as artificial intelligence (AI) programs), to protect the data that reside on or are transmitted through them and to maintain adequate internal controls. Information security risks for us and our third-party vendors have increased significantly in recent years, in part because of the proliferation of new technologies, including AI, the ubiquity of internet connections, and the increased sophistication and activities of threat actors. Although we and our third-party vendors take protective measures to secure information, our and our vendors’ technology systems have experienced cybersecurity threats and may still be vulnerable to unauthorized access, computer viruses or other events that could result in inaccuracies in our information or system disruptions or failures, which could materially interrupt or damage our operations. In addition, our vendors may incorporate AI tools into their offerings or operations, and such AI tools may not meet existing or rapidly evolving regulatory, cybersecurity, privacy or industry standards, which could expose us to operational, compliance or reputational risks. These risks have increased with the launch of the WisdomTree Prime mobile application and may continue to increase in the future as the mobile application’s availability expands. In addition, technology is subject to rapid change and we cannot guarantee that our competitors may not implement more advanced technology platforms for their products, which could affect our business. Any inaccuracies, delays, system failures or breaches, or advancements in technology, and the cost necessary to address them, could subject us to client dissatisfaction and losses or result in material financial loss, regulatory violations, reputational harm or legal liability, which, in turn, could cause a decline in our earnings or stock price.
We use AI, including machine learning, in our business and expect to continue to expand our AI capabilities, including through generative AI. AI methods are complex and rapidly evolving, and their introduction into new or existing processes may result in new or enhanced governmental or regulatory scrutiny, intellectual property or other litigation, data protection and confidentiality concerns, information security risks, social or ethical challenges, competitive harm or other complications. For example, datasets used to develop and test AI models, the content generated by AI systems, or AI-driven decision-making processes may be found to be insufficient, biased or harmful, or lead to adverse business decisions or operating errors. AI technologies, including generative AI, may also produce content that appears credible but is factually inaccurate or flawed or legally problematic, increasing regulatory, reputational and legal risks. The use of AI technologies may also increase the risk of inadvertent disclosure or misuse of our proprietary or confidential information. In addition, intellectual property ownership and licensing rights, including copyright, surrounding AI technologies remain uncertain, as U.S. courts and regulatory bodies have yet to address key issues. Furthermore, AI-related regulations are evolving globally, with emerging frameworks such as the EU AI Act and increasing scrutiny from U.S. federal and state regulators, including the Federal Trade Commission and SEC. Efforts to incorporate AI technologies responsibly require continued investment in operational controls and procedures, development and implementation of appropriate protections and safeguards for data use, including with respect to data leakage, and compliance with evolving regulatory requirements. Our competitors may adopt or deploy AI technologies more effectively or more rapidly than we do, which could place us at a competitive disadvantage with respect to operational efficiency, cost management or market participation. Any failure to successfully integrate AI technologies, respond to client or market demands or effectively manage AI-related risks could harm our growth and reputation, adversely impact product offerings, client interactions or business initiatives, and expose us to legal and regulatory liabilities and additional costs, including regulatory fines or sanctions, which may cause our AUM, revenues and earnings to decline.
Our ability to successfully operate and grow the acquired Ceres business depends on the retention of key personnel, and the loss of such individuals could adversely affect our business.
The success of the acquired Ceres business is highly dependent on the continued service of certain key investment, operational and management personnel with specialized expertise, client relationships and knowledge of the acquired strategies. The integration of Ceres into our organization may create uncertainty among employees and could result in increased attrition, particularly if compensation structures, incentive arrangements, roles or cultural dynamics change or if market conditions adversely affect compensation outcomes. If we are unable to retain key personnel or effectively recruit and integrate additional talent necessary to support and grow the acquired business, our ability to execute our strategy, maintain investment performance and realize the anticipated benefits of the acquisition could be materially adversely affected.
We are subject to extensive regulation of our business and operations.
operations. Two of our U.S. subsidiaries, WTAM and WT Digital Management, are registered investment advisers and are subject to oversight
by the SEC
pursuant to its regulatory authority under the Investment Advisers Act. We also must comply with certain requirements
under the Investment
Company Act with respect to the WisdomTreeour U.S. listed ETFs for which WTAM acts as investment adviser and with respect
to our Digital Funds for which
WT Digital Management acts as an investment adviser. WTAM is also a member of the NFA and registered as
a commodity pool operator for
certain of our ETFs. As a commodity pool operator, we are subject to oversight by the NFA and the CFTC pursuant
to regulatory authority
under the Commodity Exchange Act. In addition, the content and use of our marketing and sales materials and
the conduct of our sales
force in the U.S. regarding our U.S. listed ETFs and Digital Funds are subject to the regulatory authority of
FINRA. The SEC also has
recently adopted rule amendments that are designed to modernize sales and marketing materials and, as a result,
could impact our marketing
materials. We are also subject to foreign laws and regulatory authorities with respect to operational aspects
of our products that invest
in securities of issuers in foreign countries, in the marketing, offer and/or sales of our products in foreign
jurisdictions and in our
offering of investment products domiciled outside of the U.S., such as our ETPs issued by the ManJer Issuers,
UCITS ETFs and ETPs issued
by WMAI.
Each of the regulatory bodies with jurisdiction
over us has
regulatory powers over many aspects of our business, including the authority to grant, and, in specific circumstances to cancel,
permissions permissions
to carry on particular businesses. Our ETPs’ and Digital Funds’ failure to comply with applicable laws or regulations
has has
in the past, and could in the future, result in fines, censure, suspensions of personnel or other sanctions, including revocation
of our
registration as an investment adviser. For example, in August 2024, WTAM received a Wells Notice from the Staff of the SEC advising WTAM
that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action against WTAM alleging violations
of certain provisions of the U.S. federal securities laws relating to three exchange-traded series of WisdomTree Trust managed by WTAM
that pursued ESG-focused strategies. In October 2024, without admitting or denying the SEC’s allegations, WTAM agreed to resolve
the matter by consenting to the entry of an order by the SEC, in which WTAM agreed to cease and desist from committing or causing any
violations and any future violations of Sections 206(2) and 206(4) of the Investment Advisers Act, Rules 206(4)-7 and 206(4)-8 thereunder,
and Section 34(b) of the Investment Company Act, and to pay a civil money penalty of $4.0 million. See Note 14 to our Consolidated Financial
Statements for additional information.
The regulatory environment in which we operate
also is subject to modifications and further regulation. Concerns have been raised at various times about ETFs’ possible contribution
to market volatility as well as the disclosure requirements applicable to certain types of more complex ETFs. In addition, the SEC approved
a broad set of rules regarding data reporting and fund liquidity, fund valuation andvaluation, funds’ use of derivatives,derivatives and funds’ names,
which impose additional
expense and require additional administrative services and requirements, among other matters, to comply with these
rules. New laws or
regulations, or changes in the enforcement of existing laws or regulations, applicable to us or investors in our products
also may adversely
affect our business, and our ability to function in this environment will depend on our ability to constantly monitor
and react to these
changes. Compliance with new laws and regulations may result in increased compliance costs and expenses.
Our acquisition of Ceres may subject us to expanded and evolving regulatory requirements and increased supervisory oversight, which could adversely affect our business.
As a result of the Ceres Acquisition, we have expanded into investment strategies, products and markets that are subject to regulatory regimes and supervisory expectations that differ from, and in certain respects are more complex than, those applicable to our traditional ETP business. These expanded activities may subject us to additional oversight by the SEC and other regulatory authorities, including with respect to certain private fund adviser requirements, disclosure obligations, valuation practices, conflicts of interest, liquidity management and investor protection. Regulatory requirements applicable to private and alternative investment strategies continue to evolve, and changes in laws, rules, interpretations or enforcement priorities could increase compliance costs, restrict our activities or require modifications to our business practices or organizational structure. In addition, we may be subject to more frequent or more detailed regulatory examinations, inquiries or information requests, and any failure to comply with applicable regulatory requirements could result in fines, sanctions, remediation obligations, reputational harm or limitations on our ability to operate or grow these businesses, any of which could materially adversely affect our business, results of operations and financial condition.
Competition in the digital assets industry on
a global basis is increasing,
ranging from large, established financial incumbents to smaller, early-stage financial technology providers
and companies. There are jurisdictions
with more stringent and robust regulatory and compliance requirements than others which could impact
a company’s ability to compete
in the digital assets industry. Our ability to successfully compete will depend largely on offering
innovative products through digital
asset exposures (and more broadly in blockchain-enabled finance,financial services, including savings and payments),
having strong internal controls
and risk management infrastructure to enable customer trust, embracing regulation, developing strategic
partnerships with participants
in the digital assets ecosystem and broader financial services ecosystem, promoting thought leadership
and consumer education or awareness,
building upon our brand and attracting and retaining talented employees. Failure to do so could negatively
impact the success of our digital
assets business.
We rely on third-party service providers in
connection with different facets
of our digital assets business, including but not limited to custodial arrangements, blockchain and wallet
infrastructure, banking relationships,
cloud computing, payment platforms and processors, data infrastructure, customer support, compliance
support and product development,
including mobile application development, all of which are critical to the success of our digital assets
business. In addition, we have partnered with a financial institution to provide co-branded debit cards to retail customers. The loss
of, or interruption
of service from, a critical third-party service provider could adversely impact our digital assets business, operating
results and financial
condition. We may incur significant costs to resolve any such disruptions in service. In addition, such third-party
service providers
may be subject to financial, legal, regulatory and labor issues, data security and cybersecurity incidents, denial-of-service attacks,
attacks, sabotage, privacy breaches or violations, fraud and other misconduct, which could directly or indirectly have an impact on our digital
digital assets products and services. If any third-party service provider fails to adequately or appropriately render services or fails
to meet
its contractual requirements, including compliance with applicable laws and regulations, we could be subject to regulatory enforcement
actions and claims from third parties, including our customers, and suffer economic and reputational harm that could have an adverse effect
on our digital assets business, operating results and financial condition.
In addition, we are actively engaged with a
variety of U.S. federal and
state regulators (e.g., the SEC, FINRA, NYDFS and other state regulators) to secure, as necessary, or maintain
the appropriate regulatory,
registration and/or licensing approvals for various business initiatives and operations, including but not
limited to: a New York state-chartered
limited purpose trust company; money services and money transmitter business; limited purpose broker-dealer;
transfer agent; investment
adviser; and investment funds. For example, we are licensed as a money transmitter or the equivalent in many
U.S. states and the District of Columbia, but we may be unable to obtain such licenses in all U.S. states or may experience significant
delays, and this could have an adverse effect on our digital assets business. As we seek to expand globally, similar approvals and/or
reliance on exemptions will be required in applicable
foreign markets, which also may involve approvals specific to a digital assets or
related business. As we secure the appropriate regulatory,
registration and/or licensing approvals, or otherwise rely on, seek or confirm
exemptions therefrom, in connection with our digital assets
business, we are and will be subject to a myriad of complex and evolving global
policy frameworks and associated regulatory requirements
that we need to comply with, or otherwise be exempt from, to ensure our digital
assets products and services are successfully brought
to different markets in a compliant manner. Failure to secure and/or comply with
any such approvals and exemptions could result in, among
other things, revocation of required licenses or registrations, loss of approved
status, private litigation, administrative enforcement
actions, sanctions, civil and criminal liability, and constraints on our ability
to continue to operate our digital assets business, and
have an adverse effect on our digital assets business.
Ceres Risks
Through our acquisition of Ceres, we entered the private asset markets and may not be successful.
Acquiring Ceres marked our entry into the private asset markets, specifically farmland. There is significant competition in the private asset markets and real estate industry. There can be no assurance that we will be successful in the private assets market, that Ceres will be able to raise additional capital for Ceres’ funds, that Ceres will achieve its objectives and operate successfully, that we will have a suitable return on our investment in Ceres or that we will be able to recover the costs we have incurred in acquiring Ceres. Our management team currently has limited experience in private asset markets and no direct experience in farmland investments and is largely dependent on the experience and performance of key employees of Ceres. Although we have entered into employment agreements with certain key employees of Ceres, there can be no assurance that such employees will continue their employment with us. Loss of key employees of Ceres could have a material adverse effect on our ability to implement our business strategy and to achieve our objectives with respect to the Ceres Acquisition.
Ceres’ performance is subject to risks associated with investments in direct real estate-related assets.
Ceres provides investment advisory services to, and manages, private funds, and a separate pooled investment vehicle, Ceres Farms, that invests its assets in farmland real estate. Investments in direct real estate-related assets are subject to various risks, including without limitation: the cyclical nature of the real estate market and changes in national or local economic or market conditions; the financial condition of the buyers and sellers of properties; government regulation and increases in trade tariffs; changes in supply of, or demand for, properties in a geographic area; illiquidity of farmland investments; various forms of competition; fluctuations in lease rates; changes in interest rates and in the availability, cost and terms of financing; promulgation and enforcement of governmental regulations, including rules relating to zoning, land use and environmental protection; impact of third-party mineral rights ownership on properties; changes in real estate tax rates, energy prices and other operating expenses; changes in applicable laws and increased governmental regulation; and various uninsured or uninsurable risks and losses.
Ceres is subject to concentration risks arising from its concentration in real estate. Given the cyclical nature of the real estate market, changes in national or local economic or market conditions could have an adverse effect on Ceres. In addition, changes in the financial condition of tenants, buyers and sellers of property, competition, fluctuations in lease rates, the length of leases, and in the availability of financing will have a significant impact on Ceres’ performance. The geographic concentration of Ceres Farms’ properties in the U.S. Midwest makes its operations more vulnerable to local economic downturns and adverse farmland-specific risks, such as adverse weather events, changes in the local climate, access to water and plant disease exposure, than those of larger, more diversified companies.
Ceres Farms pays real estate taxes on its properties and such taxes may increase. Ceres Farms acquires real properties primarily by borrowing new funds secured by a mortgage on the purchased real estate, and incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in lenders initiating foreclosure.
Ceres’ business is dependent in part upon the profitability of Ceres Farms’ tenants’ farming operations, and a sustained downturn in the profitability of their farming operations could have a material adverse effect on the amount of rent Ceres Farms can collect and, consequently, its cash flow and net profits, and Ceres’ results of operations.
Ceres Farms depends on its tenants to operate the farms it owns in a manner that generates revenues sufficient to allow them to meet their obligations to Ceres Farms, including their obligations to pay rent, maintain certain insurance coverage and maintain the properties generally. The ability of Ceres Farms’ tenants to fulfill their obligations under their leases depends, in part, upon the overall profitability of their farming operations, which could be adversely impacted by, among other things, adverse weather conditions, crop prices, crop disease, pests and unfavorable or uncertain political, economic, business, trade or regulatory conditions. Ceres is susceptible to any decline in the profitability of Ceres Farms’ tenants’ farming operations, to the extent that it would impact the tenants’ abilities to pay rents. In addition, many farms are dependent on a limited number of key individuals whose injury or death may affect the successful operation of the farm. We can provide no assurances that, if a tenant defaults on its obligations to Ceres Farms under a lease, Ceres Farms will be able to lease or re-lease that farm on economically favorable terms in a timely manner, or at all. In addition, Ceres Farms may experience delays in enforcing its rights as landlord and may incur substantial costs in protecting its investment. As a result, any downturn in the profitability of the farming operations of Ceres Farms’ tenants, or a downturn in the farming industry as a whole, could have a material adverse effect on Ceres’ business, results of operations and financial condition.
Ceres Farms’ revenues are subject to risks associated with growing crops and the performance of the agricultural industry.
Ceres Farms’ investment strategy is to acquire and manage farmland which may also include directly managing the operations of these farms. Ceres Farms’ properties grow corn, soybeans, wheat and other primary crops, and specialty crops including seed corn and vegetables. As these crops are commodities, they are subject to wide fluctuations in price. If the value of these crops declines, it could negatively impact the level of rent that Ceres Farms can charge to tenant farmers and cause Ceres Farms to operate at a loss. In circumstances where Ceres Farms’ revenue from a farm is based on a share of crop production, in addition to risks associated with commodity price fluctuations, adverse weather conditions such as flooding or drought, or pest or plant disease problems could damage or destroy the crops and may cause Ceres Farms to operate unprofitably. The value of and revenues from farmland in which Ceres Farms invests will be largely dependent on the performance of the agricultural industry, which is historically cyclical. Crop yields can be affected by numerous factors beyond the control of Ceres Farms, including reductions in the market prices for the farmers’ products, adverse weather and growing conditions, pest and disease problems, and new government regulations regarding farming and the marketing of agricultural products.
Adverse changes in government policies and regulations related to farming could affect the prices of crops and the profitability of farming operations, which could materially and adversely affect the value of Ceres Farms’ properties and its results of operations.
There are a number of government policies and programs that directly or indirectly affect the profitability of farm operators. These include marketing, export, renewable fuel and insurance policies and programs. Government policies and regulations affecting the agricultural industry, such as taxes, tariffs, duties, subsidies, incentives, and import and export restrictions on agricultural commodities and commodity products, can influence the planting of certain crops, the location and size of crop production, whether unprocessed or processed commodity products are traded, the volume and types of imports and exports, the availability and competitiveness of feedstocks as raw materials, and industry profitability. Government policies and regulations may adversely affect the supply of, demand for, and prices of agricultural products. In addition, international trade disputes can adversely affect agricultural commodity trade flows by limiting or disrupting trade between countries or regions. Significant changes to or the elimination of programs and policies could adversely affect crop prices and the profitability of farming operations, including farms owned by Ceres Farms, and adversely affect its business, results of operations and financial condition.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, enacting changes to U.S. agricultural policy, including updates to commodity support programs, crop insurance and trade promotion funding. The legislation poses risks to Ceres’ business. The OBBBA raises statutory reference prices for major commodities, including corn and soybeans, with further annual escalations beginning in 2031. These changes may incentivize increased domestic production, potentially leading to oversupply and downward pressure on market prices, particularly if global demand does not rise proportionately. The OBBBA allocates $2.2 billion toward agricultural trade promotion, which may be deemed a subsidy by international trading partners, potentially triggering retaliatory measures or disputes under World Trade Organization (WTO) rules and restricting market access for U.S. corn and soybean exports. Delays or inconsistencies by federal agencies in administering new reference prices, crop insurance enhancements, or trade programs could create uncertainty for the agricultural industry. In addition, certain tax provisions of the OBBBA may adversely impact Ceres Farms’ tenant farmers who own small farms.
Federal, state and county governments have implemented laws and regulations in connection with farming operations, including those relating to taxes, trade, environmental, labor, immigration and food safety, among others. For example, labor and immigration regulations seek to provide for minimum wages and minimum and maximum work hours, as well as to restrict the hiring of illegal immigrants. If one of Ceres Farms’ tenants is accused of violating, or found to have violated such regulations, it could have a material adverse effect on the tenant’s operating results, which could adversely affect its ability to make its rental payments to Ceres Farms. Increased enforcement of federal immigration policy could adversely affect the overall farming labor market, which could result in upward pressure on wages for farm labor and adversely affect Ceres Farms’ tenants’ profitability and ability to pay rent. In addition, certain states, including Iowa, Minnesota, Wisconsin, Missouri and Kansas, in which a substantial amount of primary crop farmland is located, have laws that prohibit or restrict to varying degrees the ownership of agricultural land by corporations or business entities similar to Ceres Farms. Additional states may, in the future, pass similar or more restrictive laws, and Ceres Farms may not be legally permitted, or it may become overly burdensome or expensive, to acquire farms in these states, which could impede the growth of Ceres Farm’s portfolio and its ability to diversify geographically in states that might otherwise offer compelling investment opportunities.
Potential liability for environmental matters could materially and adversely affect Ceres’ business, results of operations and financial condition.
Ceres is subject to the risk of liabilities under federal, state and local environmental laws applicable to agricultural properties, including those related to wetlands, groundwater and water runoff. Some of these laws could subject Ceres to responsibility and liability for: the cost of removal or remediation of hazardous substances released on its properties, generally without regard to Ceres’ knowledge of or responsibility for the presence of the contaminants; the costs of investigation, removal or remediation of hazardous substances or chemical releases at disposal facilities for persons who arrange for the disposal or treatment of these substances; and claims by third parties for damages resulting from environmental contaminants. Ceres’ costs of investigation, remediation or removal of hazardous substances may be substantial. In addition, the presence of hazardous substances on one of Ceres Farms’ properties, or the failure to properly remediate a contaminated property, could adversely affect Ceres Farms’ ability to sell or lease the property or to borrow using the property as collateral. Ceres may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a property. Additionally, Ceres could become subject to new, stricter environmental regulations, which could diminish the utility of Ceres Farms’ properties and have a material adverse impact on its business, results of operations and financial condition. The potential of finding endangered species on or near Ceres Farms’ properties could restrict certain activities on its properties under federal, state and local laws and regulations intended to protect threatened or endangered species.
The failure of Ceres Farmland, LLC to maintain qualification as a REIT for U.S. federal income tax purposes would subject it to U.S. federal income tax on taxable income at regular corporate rates, which could adversely impact its business, results of operations and financial condition.
Ceres Farmland, LLC, a subsidiary of Ceres Farmland Holdings, LP, has elected to be taxed as a REIT for U.S. federal income tax purposes. Ceres Farmland Holdings, LP is a feeder fund that invests its capital in the REIT, which then invests its capital exclusively in Ceres Farms. To maintain qualification as a REIT, Ceres Farmland, LLC must meet various requirements set forth in the Internal Revenue Code of 1986, as amended (the “Code”) concerning, among other things, the ownership of its outstanding interests, the nature of its assets, the sources of its income and the amount of its distributions. There can be no assurance that Ceres Farmland, LLC will remain qualified as a REIT. We believe that the current organization and method of operation will enable Ceres Farmland, LLC to continue to qualify as a REIT. However, at any time, new laws, interpretations or court decisions may change the U.S. federal tax laws relating to, or the U.S. federal income tax consequences of, qualification as a REIT. Ceres Farmland, LLC’s General Partner may at any time, in its sole discretion, determine that it is no longer in Ceres Farmland, LLC’s best interest to qualify as a REIT. Failure of Ceres Farmland, LLC in any taxable year to qualify as a REIT will, among other things, subject Ceres Farmland, LLC’s taxable income to tax at regular corporate rates and distributions to members of Ceres Farmland, LLC in any non-qualifying years will not be deductible by Ceres Farmland, LLC. If Ceres Farmland, LLC’s status as a REIT is terminated or revoked, it may not be eligible to elect REIT status again prior to the fifth taxable year following the year in which it fails to qualify under the Code as a REIT unless certain relief provisions apply. The requirements for qualification as a REIT are extremely complex, and Ceres Farmland, LLC’s compliance with such requirements may depend on factors that are outside of its control or upon the resolution of legal issues for which guidance is lacking. Losing its REIT status would reduce its net earnings available for investment or distribution because of the additional tax liability, which could substantially reduce its ability to pay performance fees to Ceres. Even if Ceres Farmland, LLC qualifies as a REIT, it may be subject to federal income tax in certain circumstances. In addition, any taxable REIT subsidiary of Ceres Farmland, LLC will be subject to federal, state and local income taxes at the applicable corporate rates. To remain qualified as a REIT and to avoid the payment of U.S. federal income and excise taxes, Ceres Farmland, LLC may be forced to borrow funds, use proceeds from the issuance of securities, pay taxable dividends of stock or debt securities or sell assets to make distributions, which may result in Ceres Farmland, LLC distributing amounts that may otherwise be used for operations.
Ceres may not be successful in pursuing new business opportunities, including in solar, AI data infrastructure and water rights, which could adversely affect its financial performance and strategic objectives.
Ceres continues to evaluate opportunities to grow its business, including through the acquisition and leasing of properties for solar energy generation and artificial intelligence (AI) data infrastructure, and the monetization of water rights. While Ceres Farms currently leases certain properties for solar energy use or development and may expand such arrangements, there can be no assurance that it will be able to identify, negotiate or execute additional opportunities on favorable terms or at all. Ceres’ efforts to pursue strategic adjacencies or enter new markets may be hindered by a variety of factors, including regulatory or permitting challenges, lack of demand, competition, technological or infrastructure constraints or insufficient capital investment. There can be no assurance that Ceres’ initiatives to explore new business opportunities, enter new markets or make investments or acquisitions will benefit our or its business operations, generate sufficient revenues to offset related costs, or produce the anticipated benefits of past or future investments.
Our stockholder rights plan, or “poison pill,”
includes terms and conditions that could discourage a takeover or other transaction that stockholders may consider favorable.
Our Stockholder Rights Agreement, dated March
17, 2023 and subsequently amended on May 4, 2023, May 10, 2023, March 18, 2024, March 25, 2024 and April 30, 2024 (as amended, the “Stockholder
Rights Agreement”), by and between the Company and Continental Stock Transfer & Trust Company, as Rights Agent, was adopted
by our Board of Directors and ratified by our stockholders in response to stockholder activism concerns. The Stockholder Rights Agreement
is intended to protect the Company and its stockholders from efforts by a single stockholder or group of stockholders to obtain control
of the Company without paying a control premium through a number of recognized stockholder protections. Generally, the Stockholder Rights
Agreement works by causing substantial dilution to any person or group (other than specified exempt persons) that acquires 10% (or 20%
in the case of passive stockholders) or more of our shares of common stock without the approval of the Board of Directors (such person
or group, an “Acquiring Person”) through the issuance of “Rights” to stockholders of record as of, and subsequent
to, the close of business on March 28, 2023, which Rights entitle the registered holders thereof (other than the Acquiring Person) to
receive additional shares of our common stock upon exercise of such Rights. As a result, the overall effect of the Stockholder Rights
Agreement may be to render more difficult or discourage a merger, tender or exchange offer or other business combination involving our
Company that is not approved by the Board of Directors even if the offer may be considered beneficial by some stockholders. The Rights
will expire at the close of business on March 17, 2025, unless previously redeemed or exchanged by the Company. See Note 19 to our Consolidated
Financial Statements for additional information.
Management's Discussion & Analysis (MD&A)
New heading “Management fees”
New heading “Performance fees”
New heading “Contractual gold payments”
New heading “Acquisition-related costs”
New heading “Year Ended December 31, 2025 Compared to Year Ended December 31, 2024”
New heading “Management fees”
New heading “Performance fees”
New heading “Acquisition-related costs”
New heading “Remeasurement of contingent consideration”
New heading “Other gains, net”
New heading “Contractual gold payments”
New heading “Operating Statistics”
New heading “Contingent Consideration”
New heading “Business Combinations”
Removed heading “Year Ended December 31, 2023 Compared to Year Ended December 31, 2022”
Removed heading “Gain on revaluation/termination of deferred consideration”
Removed heading “Other losses, net”
Largest changes
“Goodwill is allocated to our U.S. business and European business components. For impairment testing purposes, these components are aggregated as a single reporting unit as they fall under the same operating segment and have similar economic characteristics.”see in full comparison
We test goodwill for impairment at the reporting unit level and have determined that we have a single reporting unit, consistent with our single operating segment. Goodwill is assessed for impairment annually on November 30th. When performing our goodwill impairment test, we consider a qualitative assessment, when appropriate, and the market approach andsee in full comparisonitsour market capitalization when determining the fair value of the reporting unit. The results of our most recent analysis indicated no impairment based upon a quantitative assessment.
“Year Ended December 31, 2025 Compared to Year Ended December 31, 2024”see in full comparison
“Year Ended December 31, 2023 Compared to Year Ended December 31, 2022”see in full comparison
Full comparison: every changed paragraph (119)
We are a global financial innovator, offering a diverse suite of ETPs,
models models, solutions
and productssolutions, leveragingprivate blockchainmarket technology.investments and digital asset-related products. Our offerings empower investors to shape their financial
future and equip financial professionals
to grow their businesses. Leveraging the latest financial infrastructure, we create products
that emphasize access,access and transparency and provide
an enhanced user experience. Building on our heritage of innovation, we have introduced next-generation digital products and services,
including Digital Funds, tokenized assets, and our blockchain-native digital wallet, WisdomTree Prime, which is currently available in
45 U.S. states, covering approximately 80% of the U.S. population. Our institutional platform, WisdomTree Connect, further expands access
to our products.
Building on our heritage of innovation, we continue to broaden our capabilities beyond our core ETP business. We offer next-generation digital products and services related to tokenized real world assets and stablecoins, including Digital Funds, as well as our institutional platform, WisdomTree Connect, and blockchain-native digital wallet, WisdomTree Prime. We also have expanded into private assets through our acquisition of Ceres, a leading U.S.-based alternative asset manager specializing in farmland investments.
As of December 31, 2024,2025, we managed approximately $109.8
$144.5 billion in AUM. Our ETPs
products span a broad range of strategies including equities, fixed income, commodities, leveraged-and-inverse,
currency, alternatives and cryptocurrency
exposures. We have launched many first-to-market products and pioneered a unique alternative-weighting
approach called “Modern Alpha”
that combines the outperformance potential of active management with the cost effective benefits
of passive management.
As pioneers in tokenization and blockchain technology,
we view this as
the next phase in the evolution in financial services. Through our digital assets strategy, we are committed to “responsible
DeFi,”
aligning with regulatory standards to foster growth in this rapidly evolving space. We believe that expanding into digital
assets and
blockchain-enabled financefinancial complementsservices not only complements our core competencies, but will diversify our revenue streams and
further contribute
to our growth.
Our business delivered strong progress in 2025 as we advanced our long-term strategic initiatives and further strengthened the foundation for durable growth. We ended the year with AUM of $144.5 billion at December 31, 2025, up 31.6% as compared to the prior year, driven by favorable market conditions and net inflows of $8.5 billion, representing annualized organic growth of approximately 8%. Revenues and operating income increased 15.4% and 26.9%, respectively, year over year, driving approximately 300 basis points of operating margin expansion, supported by higher average AUM, improved revenue capture and continued operating discipline. These results underscore the resilience of our business model and the benefits of our strategy to diversify revenue streams and enhance earnings quality.
A significant strategic milestone in 2025 was the Ceres Acquisition, which marked our entry into private assets and added exposure to U.S. farmland, which we believe to be one of the largest and most underpenetrated real asset classes. At December 31, 2025, we managed $1.9 billion in farmland-based strategies, an asset class with low correlation to traditional financial markets that enhances the diversification of our overall platform. This acquisition also increased our revenue capture and resulted in operating margin expansion of more than 200 basis points.
Our Portfolio Solutions business continued to gain traction. Assets under advisement in our models offering reached $6.1 billion, an increase of approximately 60% from the prior year, supported by deeper engagement across major wealth platforms and registered investment advisers. The program provides advisors with customized evaluations, a suite of model portfolios and Shared CIO services designed to support scalable, repeatable investment processes. In addition, our strategic minority investment in, and multi-year collaboration with, Quorus enables certain of our investment strategies to be implemented in SMAs via the Quorus platform, and our model portfolios to be made available there, with integrated trading and rebalancing, providing advisors with additional customization options and implementation flexibility, and expanding our reach within the wealth management ecosystem. Together, these initiatives contribute to more consistent and higher-quality revenue streams.
We also achieved notable growth in digital assets. Digital assets AUM increased to $0.8 billion as of December 31, 2025, driven primarily by the expansion of our tokenized money market offering, the WisdomTree Treasury Money Market Digital Fund. Early adoption of this product highlights the broader potential for tokenization across real world assets, including future applications in fixed income and equities. Institutional clients access our Digital Funds through WisdomTree Connect, while WisdomTree Prime provides direct-to-consumer access to digital assets, such as bitcoin, ether, tokenized gold, U.S. dollar tokens and 15 Digital Funds. Our continued focus on “responsible DeFi” ensures these offerings remain aligned with regulatory standards while positioning us at the forefront of blockchain-enabled financial innovation.
Our initiatives across ETPs, private assets, digital assets, models and SMAs are integral to our long-term growth strategy and are intended to drive sustained AUM growth, revenue diversification, improved revenue capture and stronger operating margins. We believe this strategic alignment positions us to continue delivering stockholder value and driving future performance.
Our business continues to build positive momentum
as we advance our long-term strategic initiatives. We closed 2024 with AUM of $109.8 billion, a year-over-year increase of 9.6%, a testament
to the resilience of our business model and the strength of our product offering. Through disciplined execution and strategic management,
we achieved record revenues and continued expanding our operating margins. For the year ended December 31, 2024, our revenues and operating
income increased 22.5% and 56.9%, respectively, compared to the prior year, supported by scale efficiencies and effective cost control,
delivering 700 basis points of operating margin expansion. This growth, along with recent strategic actions such as the retirement of
our gold royalty obligation in 2023 and our repurchase of the Series A Preferred Stock from ETFS Capital in 2024, has meaningfully enhanced
earnings per share.
Our models strategy, offered through our Portfolio
Solutions program, remains a strong growth driver, with our model portfolios accessible across a number of platforms. This program provides
advisors with customized evaluations, a suite of off-the-shelf models, and Shared CIO services, where advisors collaborate with our models
investment team to co-manage portfolios for their clients, with options for advisors to delegate trading, rebalancing, and tax optimization
tasks leveraging third-party service providers or platforms, providing flexibility and strategic alignment. We continue to expand our
reach with new clients and deepen partnerships with platforms such as Merrill Lynch, LPL Financial, UBS, Charles Schwab, Envestnet, Adhesion
and others. The number of advisors utilizing at least one of our models surpassed 2,500, reflecting steady progress as we build deeper
relationships, improve asset retention and create more stable, higher-quality revenue streams with significant growth potential.
Beyond traditional ETPs, we are diversifying
into blockchain and digital assets. Our blockchain-native wallet, WisdomTree Prime, provides direct-to-consumer access to digital assets,
including bitcoin, ether, tokenized gold, U.S. dollar tokens and 13 Digital Funds, while also enabling spending functionality through
a co-branded debit card. WisdomTree Connect supports institutional clients by offering direct access to our Digital Funds via self-hosted
wallet or third-party custodial wallets. Our focus on “responsible DeFi,” ensures our offerings meet regulatory standards
while delivering transparency, choice, and inclusivity. This expansion into digital assets complements our core strengths, will diversify
our revenue streams and contribute further to our growth.
We remain committed to our long-term growth
strategy, anticipating that organic inflows and AUM growth will continue to drive margin expansion and performance. Additionally, we believe
our investments in digital assets are positioned to deliver further value for our stockholders over time.
Additional 2025 business highlights include the following:
In the recent past, a number of acquisitions
in the asset management industry
have either been announced or completed. These trends have accelerated,accelerated as fee compression, cost pressures
and increased regulations have
weighed on the industry, highlighting the importance of scale and operating efficiency to compete in today’s
market. We have significant
opportunities ahead in both ETPs and the Portfolio Solutions business and as an early mover in digital assets
and blockchain-enabled financial
services, which positions us well for success to grow in this competitive landscape.
Management fees
Management fees are earned in exchange for Ceres providing investment advisory and other management services to Ceres Farms. Management fees are generally 1% of each member’s capital account balance as of the last day of each calendar quarter, if that balance exceeds $1 million (otherwise 2%). Management fees are subject to adjustment for any contractual waivers as well as contributions and redemptions arising in any particular quarter.
Performance fees
Performance fees represent variable consideration and are earned based on a specified percentage of Ceres Farms’ net profits, generally equal to 20%, subject to contractual fee waivers, high-water marks and loss recovery requirements. Performance fees are earned only after members have recovered prior losses and applicable thresholds have been met. Performance fee revenues are recognized when it is probable that a significant reversal of cumulative revenues recognized will not occur, which generally occurs upon the determination of fund profits that are no longer subject to clawback or reversal under the governing agreements.
The fees we pay for accounting, tax, transfer
agency, index calculation, indicative values and exchange listing are based on the number of ETPsproducts we have. The remaining fees are
based based
on a combination of both AUM and number of funds, or as incurred.
Contractual gold payments
Contractual gold payments expense represented
an obligation requiring us
to pay 9,500 ounces of gold annually from the advisory fee income we earned for managing physicallyphysically-backed backed
gold ETPs. Our obligation to
continue making these payments was terminated on May 10, 2023. See Note 9 to our Consolidated Financial Statements
for additional information.
Acquisition-related costs
We account for business combinations in accordance with ASC Topic 805, Business Combinations (“ASC 805”), with acquisitions recorded using the acquisition method. Transaction costs associated with acquisitions are expensed as incurred.
Other expenses consist primarily of insurance
premiums, general office
related expenses, securities license fees for our sales force, public company related expenses, corporate related
travel and entertainment
and Board of Director fees, including stock-based compensation related to equity awards we granted to our directors.
Deferred consideration arose in connection with
our acquisition of the
European exchange-traded commodity, currency and leveraged-and-inverse business of ETFS Capital Limited, or the
ETFS Acquisition, and was remeasured each reporting
period using forward-looking gold prices observed on the CMX exchange, a selected
discount rate and perpetual growth rate. This obligation
was terminated on May 10, 2023 for approximately $137.0 million. See Note 9 to
our Consolidated Financial Statements for additional information.
Our compensation to revenue ratio for the year
ending December 31, 20252026 is currently estimated to range from 28%26% to 30%28% and takes into consideration planned hires as well as year-end
compensation adjustments and the annualization of hires made during 2024.2025. The range also considers variability in incentive compensation
with drivers including the magnitude of our flows, revenue and operating income growth, margin expansion and our stock price performance
in relation to our peers. A range is provided in consideration of uncertain market conditions.
Not included in the guidance above is intangible asset amortization arising from the Ceres Acquisition of approximately $5.7 million.
Not included in the guidance above are any potential
non-recurring expenses we may incur in response to a potential proxy contest. Such expenses could be material to our results of operations
for the year ending December 31, 2025.
We define gross margin as total operating revenues
less fund management and administration expenses. Gross margin percentage is calculated as gross margin divided by total operating revenues.
For the year ending December 31, 2025,2026, we currently estimate that our gross margin percentage will be 81.0%82.0% to 82.0%83.0% taking into consideration
current AUM andAUM, revenue levels, changes in service providerslevels and anticipated fund launches. If AUM increases, we would anticipate further
gross margin expansion.
We currently estimate our interest expense for the year ending December 31, 2026 to be approximately $40.0 million, taking into consideration the retirement of our 3.25% Convertible Senior Notes due 2026 (the “2026 Notes”).
WeNot currentlyincluded estimatein our interest expense for
the yearguidance ending December 31, 2025 to be $22.0 million, whichabove is inclusive of approximately $2.0
$0.9 million of interest cost we are required
to impute under U.S. GAAP related to our interest-free financing of the shares of Series
C Non-Voting Convertible Preferred Stock (the
“Series C Preferred Stock”) we repurchased from Gold Bullion Holdings (Jersey)
Limited (“GBH”), a subsidiary of
the World Gold Council, in November 2023.
We currently estimate our interest income for
the year ending December 31, 20252026 to be $7.0approximately $8.0 million, based upon the magnitude of our forecasted interest earning assets.assets
and interest rates. It is anticipated our interest earning assets will decline in the second half of the year following the retirement
of our 2026 Notes.
We currently estimate that our consolidated
normalized effective tax rate
will be approximately 24.0% to 25.0% for the year ending December 31, 2025,2026, taking into consideration the
current distribution of profits among
our U.S. and European businesses.
We currently estimate our weighted average diluted
shares to be between 149.0
152.0 million and 150.0157.0 million during the year ending December 31, 2025.2026. This guidance doescontemplates not take into consideration
any variability inincremental shares associated with
our Convertible Notes.Notes assuming a stock price approximating recent levels. While our Convertible Notes require principal to be paid in
cash, our
diluted shares would need to be increased for any incremental shares associated with an exercise of the conversion option if
our stock
price exceeds the applicable conversion price of our Convertible Notes of $9.54$11.04 per share for the 5.75%2026 ConvertibleNotes, Senior Notes due 2028,
$11.04$11.82 per share
for the 3.25% Convertible Senior Notes due 20262029 (the “2029 Notes”) and $11.82$19.15 per share for the 3.25%4.625% Convertible Senior
Notes due 2029.2030 (the “2030 Notes”).
Our AUM is well diversified across theproducts commodity,
U.S.covering equity, internationalcommodities,
fixed developedincome, marketsleveraged-and-inverse, cryptocurrency, currency, alternatives and emergingprivate markets sectors.assets. As a result, our operating results are
particularly exposed
to investor sentiment toward investing in these products’ strategies and our ability to maintain AUM of these
products, as well
as the performance of these products.
Our revenues are also highly correlated to the
level and relative mix of
our AUM, as well as the fee rate associated with our ETPs.products. Changes in product mix have led to a decline in our
average advisory fee,
which for the years ended December 31, 2022,2023, 20232024 and 20242025 were 0.38%,0.36%, 0.36% and 0.36%,0.35%, respectively.
The chart below sets forth the asset mix of
our ETPsproducts at December 31, 2022,2023, 20232024 and 20242025:
Note: Previously issued statistics may be restated due to fund closures and trade adjustments Source: WisdomTree ____________________________ (1) Includes 17 digital assets products, which were launched prior to January 1, 2025.
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Advisory fee revenues increased 11.3% from $395.4 million during the year ended December 31, 2024 to $440.0 million during the year ended December 31, 2025 due to higher average AUM, partly offset by a lower average advisory fee. Our average advisory fee was 0.36% during the year ended December 31, 2024 and 0.35% during the year ended December 31, 2025.
Management fees
Management fees were $4.9 million during the year ended December 31, 2025 as a result of the Ceres Acquisition, which was completed in October 2025. We earn management fees in exchange for providing investment advisory and other management services to Ceres Farms.
Performance fees
Performance fees were $7.1 million during the year ended December 31, 2025 as a result of the Ceres Acquisition, which was completed in October 2025. We earn performance fees based on a specified percentage of Ceres Farms’ net profits, subject to contractual fee waivers, high-water marks and loss recovery requirements.
Other revenues increased 29.0% from $32.4 million during the year ended December 31, 2024 to $41.8 million during the year ended December 31, 2025 due to higher other revenues attributable to our European listed ETPs.
Compensation and benefits expense increased 13.5% from $121.3 million during the year ended December 31, 2024 to $137.7 million during the year ended December 31, 2025 due to higher incentive compensation and increased headcount. Headcount was 313 and 360 at December 31, 2024 and 2025, respectively.
Fund management and administration expense increased 6.2% from $84.0 million during the year ended December 31, 2024 to $89.1 million during the year ended December 31, 2025 primarily due to higher average AUM. We had 78 U.S. listed ETFs, 275 European listed ETPs and 17 tokenized products at December 31, 2024 compared to 86 U.S. listed ETFs, 300 European listed ETPs, 19 tokenized products and one private assets product at December 31, 2025.
Marketing and advertising expense was essentially unchanged from the year ended December 31, 2024.
Sales and business development expense increased 10.4% from $14.8 million during the year ended December 31, 2024 to $16.4 million during the year ended December 31, 2025 primarily resulting from increases in travel and events spending.
Professional fees decreased 38.1% from $21.1 million during the year ended December 31, 2024 to $13.1 million during the year ended December 31, 2025 as the prior year included $5.0 million of expenses incurred in response to an activist campaign and $4.3 million of legal and other related expenses incurred in connection with the SEC ESG Settlement that were covered by insurance.
Occupancy, communications and equipment expense increased 22.3% from $5.3 million during the year ended December 31, 2024 to $6.5 million during the year ended December 31, 2025 due to higher equipment and communication expenses driven by increased headcount.
Depreciation and amortization expense increased 115.6% from $1.8 million during the year ended December 31, 2024 to $3.8 million during the year ended December 31, 2025 due to higher amortization of software development costs, as well as approximately $1.4 million of intangible asset amortization arising from the Ceres Acquisition.
Third-party distribution fees increased 43.1% from $11.1 million during the year ended December 31, 2024 to $15.9 million during the year ended December 31, 2025 due to our strong growth and AUM expansion across our distribution platforms.
Acquisition-related costs
During the year ended December 31, 2025, we recorded $4.7 million of acquisition-related costs incurred in connection with the Ceres Acquisition.
Other expenses increased 12.4% from $10.5 million during the year ended December 31, 2024 to $11.8 million during the year ended December 31, 2025 primarily due to higher dues, subscriptions and other miscellaneous expenses.
Interest expense increased 60.9% from $18.9 million during the year ended December 31, 2024 to $30.4 million during the year ended December 31, 2025 due to a higher level of debt outstanding, inclusive of the 2030 Notes issued in August 2025 to facilitate the Ceres Acquisition, partly offset by a lower average interest rate.
Our effective interest rate on our outstanding Convertible Notes during the years ended December 31, 2024 and 2025 was 4.5% and 4.1%, respectively.
Interest income increased 61.8% from $6.8 million during the year ended December 31, 2024 to $11.0 million during the year ended December 31, 2025 due to a higher level of interest-earning assets, including from temporarily investing proceeds received from the issuance of the 2030 Notes prior to completing the Ceres Acquisition.
What changed in the latest 10-Q
Risk Factors
You should carefully consider the information set forth in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Full comparison: every changed paragraph (1)
You should carefully consider the information
set forth in Part 1,I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Management's Discussion & Analysis (MD&A)
New heading “Loss on repurchase of convertible notes”
New heading “Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025”
New heading “Selected Operating and Financial Information”
New heading “Operating Revenues”
New heading “Management fees”
New heading “Performance fees”
New heading “Operating Expenses”
New heading “Compensation and benefits”
New heading “Fund management and administration”
New heading “Marketing and advertising”
New heading “Sales and business development”
New heading “Professional fees”
New heading “Occupancy, communications and equipment”
New heading “Depreciation and amortization”
New heading “Third-party distribution fees”
New heading “Other Income/(Expenses)”
New heading “Interest expense”
New heading “Interest income”
New heading “Loss on repurchase of convertible notes”
New heading “Remeasurement of contingent consideration”
New heading “Other gains, net”
Removed heading “Acquisition of Atlantic House”
Removed heading “Acquisition-related costs”
Removed heading “Loss on extinguishment of convertible notes”
Removed heading “Acquisition of Atlantic House”
Largest changes
“Global financial markets recovered strongly during the second quarter of 2026 as geopolitical tensions moderated and investor risk appetite improved. Equity markets were led higher by technology-related companies, supported by continued investment in artificial intelligence and resilient corporate earnings. Fixed income markets remained focused on inflation and the outlook for monetary policy, with government bond yields remaining elevated amid ongoing uncertainty around future interest rate movements. …”see in full comparison
“The first quarter of 2026 was characterized by elevated global volatility and geopolitical tensions, particularly the escalation of conflict in the Middle East. Although the U.S. and global economies showed resilience, global equity markets declined modestly, reflecting weakness in certain U.S. technology stocks and a shift in investor sentiment as the quarter progressed. Higher oil prices drove commodities to outperform and contributed to renewed inflation concerns, leading to a repricing of interest rate expectations. …”see in full comparison
“Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025”see in full comparison
Full comparison: every changed paragraph (122)
We are a global financial innovator, offering a diverse suite of ETPs, models and solutions, private market investments and digital asset-related products. Our offerings empower investors to shape their financial future and equip financial professionals to grow their businesses. Leveraging the latest financial infrastructure, we create products that emphasize access and transparency and provide an enhanced user experience. Building on our heritage of innovation, we continue to broaden our capabilities beyond our core ETP business. We offer next-generation digital products and services related to tokenized real-world assets and stablecoins, including digital funds, as well as our institutional platform, WisdomTree Connect, and blockchain-native digital wallet, WisdomTree Prime.
Building on our heritage of innovation, we continue to broaden our capabilities
beyond our core ETP business. We offer next-generation digital products and services related to tokenized real world assets and stablecoins,
including digital funds, as well as our institutional platform, WisdomTree Connect, and blockchain-native digital wallet, WisdomTree Prime.
We also have expanded into private assets through our acquisition of Ceres Partners, LLC (“Ceres”), a leading U.S.-based alternative
asset manager specializing in farmland investments.
As of MarchJune 31,30, 2026, we managed approximately $152.6$162.9 billion in AUM.
Our products span a broad range of strategiesstrategies, including equities, commodities,commodities and currency, fixed income, leveraged-and-inverse,alternatives, cryptocurrency, currency,
alternatives,leveraged-and-inverse and cryptocurrency. Our offerings also include private assets.assets, with a primary focus on farmland investments, as well as active investment strategies focused on defined outcome and derivatives-driven solutions. We have launched many first-to-market products and pioneered a unique alternative-weighting approach
called “Modern Alpha” that combines the outperformance potential of active management with the cost-effective benefits of
passive management.
Acquisition of Atlantic House
On March 13, 2026, we and WisdomTree International Holdings Ltd (the “Buyer”), our wholly-owned subsidiary, entered into a Sale and Purchase Agreement (the “AH Purchase Agreement”) with Atlantic House Holdings Limited, a private limited company incorporated in England and Wales (“Atlantic House”), the shareholders of Atlantic House (the “Sellers”), the EBT Trustee and the Individual Guarantor (each as defined in the AH Purchase Agreement) pursuant to which we agreed to acquire from the Sellers all of the issued and outstanding share capital of Atlantic House (the “AH Acquisition”), subject to the terms and conditions set forth therein.
Atlantic House is a London-based active manager specializing in defined outcome and derivatives-driven investment strategies, with approximately £2.9 billion (approximately $3.9 billion) in assets under management, plus additional revenues from £1.5 billion (approximately $2.0 billion) in assets under advisement across managed models, as well as structuring fees from bespoke investment solutions.
On May 1, 2026, the Buyer completed the AH Acquisition for £150.0 million (approximately $200.0 million) in cash subject to customary post-closing adjustments to cash, indebtedness and working capital.
We offer ETPs covering equity,equities, commodities and
currency, fixed income, alternatives, leveraged-and-inverse, alternativesprivate assets and cryptocurrency. The chart below sets forth the asset mix of our ETPs at
March 31,June 30, 2026, December 31, 2025 and March 31, 2026 and June 30, 2025:
Global financial markets recovered strongly during the second quarter of 2026 as geopolitical tensions moderated and investor risk appetite improved. Equity markets were led higher by technology-related companies, supported by continued investment in artificial intelligence and resilient corporate earnings. Fixed income markets remained focused on inflation and the outlook for monetary policy, with government bond yields remaining elevated amid ongoing uncertainty around future interest rate movements. Commodities retreated from first-quarter highs as energy prices declined, although geopolitical developments continued to present uncertainty for global markets.
The first quarter of 2026 was characterized
by elevated global volatility and geopolitical tensions, particularly the escalation of conflict in the Middle East. Although the U.S.
and global economies showed resilience, global equity markets declined modestly, reflecting weakness in certain U.S. technology stocks
and a shift in investor sentiment as the quarter progressed. Higher oil prices drove commodities to outperform and contributed to renewed
inflation concerns, leading to a repricing of interest rate expectations. Government bonds experienced a sell-off as yields rose in response
to these inflationary pressures.
During the quarter, the MSCI EAFE Index (local
currency), MSCI Japan Index (local currency) and gold prices increased by 0.3%, 3.0% and 5.5%, respectively, while the S&P 500, MSCI
EAFE Index (local currency), MSCI EMU Index (local currency), MSCI Japan Index (local currency) and MSCI Emerging Markets Index (U.S. dollar) increased by 15.2%, 11.8%, 15.8%, 16.7% and 24.1%, respectively, while gold prices decreased by 4.3%, 2.4% and 0.1%, respectively.12.6%. The U.S. dollar
weakened 2.4%,strengthened 2.0%0.7% and 2.2%1.4% versus the euro, British poundeuro and Japanese yen, respectively, and weakened 0.1% versus the British pound during the quarter.
U.S. listed ETF industry net flows were $405.2
$545.9 billion for the three months ended MarchJune 31,30, 2026. U.S. equity andequity, fixed income and international equity gathered the majority of those flows.
European listed ETP industry net flows were
$93.6 $99.6 billion for the three months ended MarchJune 31,30, 2026. Equity and fixed income gathered the majority of those flows.
The AUM of our U.S. listed exchange traded funds,
or U.S. listed ETFs, increased from $88.5 billion at December 31, 2025 to $90.9 billion at March 31, 2026 to $99.0 billion at June 30, 2026 due to market appreciation and net inflows, partly offset
by market depreciation.inflows.
The AUM of our European listed (including internationally
cross-listed) ETPs, or European listed ETPs, increased from $53.3 billion at December 31, 2025 to $58.8 billion at March 31, 2026 to $61.1 billion at June 30, 2026 due
to $4.1 billion of AUM arising from the acquisition of Atlantic House Holdings Limited (“Atlantic House”) and net inflowsinflows, andpartly offset by market appreciation.depreciation.
The AUM of our digital assets products increaseddecreased from $0.8$867 billion at December
31, 2025 to $0.9 billionmillion at March 31, 2026 to $761 million at June 30, 2026 due to net inflows.outflows. Substantially all Q1Q2 2026 inflowsoutflows were intofrom the WisdomTree Treasury Money
Market Digital Fund.
The AUM of our private assets products was essentially unchanged from March 31, 2026.
Through our acquisition of Ceres on October
1, 2025 (the “Ceres Acquisition”), we acquired $1.8 billion of private assets AUM primarily held within an open-ended investment
fund, Ceres Farms, LLC (“Ceres Farms”). This AUM increased by approximately $0.1 billion to $2.0 billion at March 31, 2026,
due to $75.0 million of inflows and market appreciation.
Our compensation to revenue ratio for the year ending December 31, 2026
is currently estimated to range from 26% to 28% (unchanged from our guidance provided last quarter) and takes into consideration the AH
Acquisition,Atlantic House acquisition, planned hires as well as year-end compensation adjustments and the annualization of hires made during 2025. The range also
considers variability in incentive compensation with drivers including the magnitude of our flows, revenues and operating income growth,
margin expansion and our stock price performance in relation to our peers. A range is provided in consideration of uncertain market conditions.
Discretionary spending includes marketing, sales, professional fees, occupancy and equipment,
depreciation and amortization and other expenses. During the threesix months ended MarchJune 31,30, 2026, our discretionary spending was $18.6$40.8 million.
We currently estimate our discretionary spending for the year ending December 31, 2026 to range from $83.0 million to $89.0 million (previously
$80.0unchanged tofrom $86.0our millionguidance provided last quarter) taking into consideration the AH Acquisition..
Not included in the guidance above is intangible
amortization arising from the Ceres Acquisitionand ofAtlantic approximatelyHouse $5.7 million,acquisitions, of which $1.4$4.0 million was recognized during the threesix months
ended MarchJune 31,30, 2026.
We define gross margin as total operating revenues less fund management
and administration expenses. Gross margin percentage is calculated as gross margin divided by total operating revenues. Our gross margin
was 84.4%83.6% during the threesix months ended MarchJune 31,30, 2026. For the year ending December 31, 2026, we currently estimate that our gross margin
percentage will be 83.0% to 84.0% (previouslyunchanged 82.0%from toour 83.0%guidance provided last quarter) an increase of one percentage point reflecting current AUM levels and the
AH Acquisition, including Atlantic House product launches in both Europe and the U.S. over the course of the year..
We currently estimate third-party distribution expense to be approximately
$20.0 million to $24.0 million for the year ending December 31, 2026 (previouslyunchanged $17.0 to $19.0 million), driven by higher AUM and elevated
trading activity, primarily acrossfrom our Europeanguidance platforms.provided last quarter).
We currently estimate our interest expense for the year ending December
31, 2026 to be $54.0 million (previouslyunchanged $41.0from millionour guidance provided last quarter) taking into consideration our current capital structurestructure. (seeSee Note 9 to our consolidated
financial statements for additional information).information. This guidance is inclusive of approximately $0.9 million of interest cost we are required
to impute under U.S. GAAP related to our interest-free financing of the shares of Series C Non-Voting Convertible Preferred Stock (the
“Series C Preferred Stock”) we repurchased from Gold Bullion Holdings (Jersey) Limited (“GBH”), a subsidiary of
the World Gold Council, in November 2023.
We currently estimate our interest income for
the year ending December 31, 2026 to be $10.0$8.0 million (previously $8.0$10.0 million), reflecting the forecastedallocation levelof a portion of our interest-earning
assets. assets to stock repurchases.
We currently estimate that our consolidated normalized effective tax rate
will be approximately 24.0% to 25.0% for the year ending December 31, 2026 (previouslyunchanged 24.0%from our guidance provided last quarter), taking into consideration the AH Acquisition..
We currently estimate our weighted average diluted shares to be between 152.0 million and 155.0 million for the third and fourth quarters of 2026 (previously 154.0 million shares). This guidance reflects stock repurchases of 1.5 million shares during the three months ended June 30, 2026 and also contemplates incremental shares associated with our Convertible Notes, assuming a stock price approximating recent levels. While our Convertible Notes require principal to be paid in cash, our diluted shares would need to be increased for any incremental shares associated with an exercise of the conversion option if our stock price exceeds the applicable conversion price of our Convertible Notes of $19.15 per share for the 4.625% Convertible Senior Notes due 2030 and $21.58 per share for the 4.50% Convertible Senior Notes due 2031.
We currently estimate our weighted average diluted shares to be between
155.0 million and 158.0 million for the three months ending June 30, 2026, reflecting the full impact of the 11.0 million shares issued
in connection with the extinguishment of $75.0 million in aggregate principal amount of 3.25% convertible senior notes due 2026 (the “2026
Notes”) and $275.0 million in aggregate principal amount of 3.25% convertible senior notes due 2029 (the “2029 Notes”).
Weighted average diluted shares are anticipated to decline to approximately 154.0 million in the second half of the year, following the
retirement of our remaining outstanding 2026 Notes and 2029 Notes, which we anticipate settling for cash.
Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended
March 31,June 30, 2025
Advisory fee revenues increased 35.5%41.7% from $99.5$103.2 million during the three
months ended MarchJune 31,30, 2025 to $134.9$146.3 million during the comparable period in 2026 due to higher average AUM and a higher average advisory
fee. Our average advisory fee was 0.35% during the three months ended MarchJune 31,30, 2025 and 0.36% during the comparable period in 2026.
Management fees were $5.2$5.4 million during the
three months ended MarchJune 31,30, 2026 as a result of the Ceres Acquisition,acquisition, which was completed in October 2025. We earn management fees in
exchange for providing investment advisory and other management services to Ceres Farms.Farms, LLC and Ceres Farms Fund II, LP (collectively, the “Ceres Funds”).
Performance fees were $3.0$6.0 million during the
three months ended MarchJune 31,30, 2026 as a result of the Ceres Acquisition, which was completed in October 2025.acquisition. We earn performance fees
based on a specified percentage of the Ceres Farms’Funds’ net profits, subject to contractual fee waivers, high-water marks and loss recovery
requirements.
Other revenues increased 92.2%108.2% from $8.5$9.4 million during the three months
ended MarchJune 31,30, 2025 to $16.4$19.5 million during the comparable period in 2026 due to revenues arising from the Atlantic House acquisition, which was completed in May 2026, and higher other revenues attributable to our European listed
ETPs.
Compensation and benefits expense increased
40.6% 33.2% from $33.8$32.8 million during the three months ended MarchJune 31,30, 2025 to $47.5$43.7 million in the comparable period in 2026 due to higher
stock-basedincreased compensationheadcount expensedriven in part by the Ceres and increasedAtlantic headcount.House acquisitions. Headcount was 315321 and 357414 at MarchJune 31,30, 2025 and 2026, respectively.
Fund management and administration expense increased
20.1% 42.2% from $20.7$21.3 million during the three months ended MarchJune 31,30, 2025 to $24.9$30.2 million in the comparable period in 2026 primarily due
to higher average AUM. We had 7881 U.S. listed ETFs, 280285 European listed ETPs and 17 tokenized products at MarchJune 31,30, 2025 compared to 90
92 U.S. listed ETFs, 306338 European listed ETPs, 19 tokenized products and onetwo private assets productproducts at MarchJune 31,30, 2026.
Marketing and advertising expense increased
12.0% 13.3% from $4.8$5.3 million during the three months ended MarchJune 31,30, 2025 to $5.4$6.0 million in the comparable period in 2026 primarily due to
higher spend related to our U.S.European listed ETFs and digital assets.products.
Sales and business development expense increased 16.7% from $4.2 million during the three months ended June 30, 2025 to $4.9 million in the comparable period in 2026 primarily due to increased spending on market data and sales tools.
Sales and business development expense was essentially
unchanged from the three months ended March 31, 2025.
Professional fees expense increased 18.9%29.0% from
$2.8 $3.2 million during the three months ended MarchJune 31,30, 2025 to $3.3$4.1 million in the comparable period in 2026 due to higher consulting fees
and digital assets related expenses.
Occupancy, communications and equipment expense
increased 30.6%43.0% from $1.5$1.6 million during the three months ended MarchJune 31,30, 2025 to $1.9$2.2 million in the comparable period in 2026 primarily
due to increased headcount.
Depreciation and amortization expense increased
288.1% 488.8% from $0.5$0.6 million during the three months ended MarchJune 31,30, 2025 to $2.1$3.4 million in the comparable period in 2026 primarily due to
higher amortization of intangible assets arising from the Ceres Acquisition.and Atlantic House acquisitions.
Third-party distribution fees expenseincreased increased
86.2%32.3% from $3.1$4.1 million during the three months ended MarchJune 31,30, 2025 to $5.8$5.4 million in the comparable period in 2026 due to growth in
AUM and elevated trading activity across our various platforms.
Acquisition-related costs
During the three months ended MarchJune 31,30, 2026, we recorded $1.9$1.1 million of
acquisition-related costs related to the AHAtlantic Acquisition.House acquisition.
Other
Other expenses increased 20.2%39.6% from $2.6$3.0 million
during the three months ended MarchJune 31,30, 2025 to $3.1$4.2 million in the comparable period in 2026 due to conferences, travel and office related
expenses.
Interest expense increased 102.6%170.5% from $5.4
$5.5 million during the three months ended MarchJune 31,30, 2025 to $11.0$14.9 million in the comparable period in 2026 due to a higher level of debt outstanding.
outstanding and higher interest rates. Our effective interest rate during the three months ended MarchJune 31,30, 2025 and 2026 was 3.9% and 4.4%,4.9%, respectively.
Interest income increased 36.6%53.3% from $1.9$2.1 million
during the three months ended MarchJune 31,30, 2025 to $2.6$3.2 million in the comparable period in 2026 due to a
higher level of interest earning assets.
Loss on repurchase of convertible notes
During the three months ended June 30, 2026, we recognized a $6.6 million loss related to the repurchase of $51.9 million in aggregate principal amount of our 3.25% convertible senior notes due 2029 (the “2029 Notes”).
Contingent consideration related to the Ceres Acquisitionacquisition increased from
$11.8 $14.4 million on DecemberMarch 31, 20252026 to $14.4$15.8 million at MarchJune 31,30, 2026, resulting in a $2.6$1.4 million loss on remeasurement recognized during
the three months ended MarchJune 31,30, 2026. See Note 10 to our Consolidated Financial Statements for additional information.
Loss on extinguishment of convertible notes
During the three months ended March 31, 2026, we recognized a $62.3 million
loss related to transactions involving our convertible notes, comprised of a loss on extinguishment of $16.9 million associated with the
repurchase of $75.0 million in aggregate principal amount of our 2026 Notes and a $45.4 million inducement expense related to the repurchase
of $275.0 million in aggregate principal amount of our 2029 Notes.
Other losses,gains, net
Other losses,gains, net were ($0.3)$0.6 million and ($0.6)
$6.4 million during the three months ended MarchJune 31,30, 2025 and 2026, respectively. The three months ended MarchJune 31,30, 2026 includes a remeasurement gain of $4.4 million on British pounds held to complete the Atlantic House acquisition and a net losses
gain of $0.9$2.9 million on our financial instruments and net losses of $0.5 million on our investments.owned. Gains and losses also generally arise
from the sale of gold earned from management fees paid by our physically-backed gold ETPs, foreign exchange fluctuations and other miscellaneous
items.
Our effective income tax rate for the first quarter of 2026 was negative
58.6%, resulting in income tax expense of $8.5 million. Despite a pre-tax loss for the quarter, we recorded income tax expense primarily
due to certain non-deductible amounts associated with the extinguishment of convertible notes, which caused our effective tax rate to
differ from the U.S. federal statutory rate of 21.0%. Other items impacting our effective tax rate included non-deductible executive compensation,
partly offset by state and local taxes and tax windfalls associated with the vesting of stock-based compensation awards.
Our effective income tax rate duringfor the threesecond monthsquarter endedof March2026 31, 2025
was 18.9%,24.4%, resulting in income tax expense of $5.7$14.3 million. The effective tax rate differs from the U.S. federal statutory rate of 21.0% primarily
due to taxnon-deductible windfallsamounts associated with the vestingrepurchase of stock-basedconvertible compensation awards and a lower tax rate on foreign earnings. These items
were partly offset by state and local income taxes and non-deductible executive compensation.notes.
Our effective income tax rate during the three months ended June 30, 2025 was 22.3%, resulting in income tax expense of $7.1 million. The effective tax rate differs from the federal statutory rate of 21.0% primarily due to state and local income taxes, partly offset by a lower tax rate on foreign earnings.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Selected Operating and Financial Information
WT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 4 filings (3 insiders, 4 trade dates, 175,000 shares, about $3.5M; 2 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -175,000 (purchases minus sales); net value about -$3.5M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-09 | Lilien R Jarrett |
Open-market sale |
30,000 | $24.56 | $736.8K |
| 2026-06-17 | Salerno Frank |
Grant/award | 5,509 | — | — |
| 2026-06-17 | Pankopf Tonia L |
Grant/award | 5,509 | — | — |
| 2026-06-17 | Naidoo Shamla |
Grant/award | 5,509 | — | — |
| 2026-06-17 | Mielke Daniela |
Grant/award | 5,509 | — | — |
| 2026-06-17 | Delorier Rilla S |
Grant/award | 5,509 | — | — |
| 2026-06-17 | Conjeevaram Smita |
Grant/award | 5,509 | — | — |
| 2026-06-17 | Bossone Anthony |
Grant/award | 5,509 | — | — |
| 2026-06-17 | Blake Lynn S. |
Grant/award | 5,509 | — | — |
| 2026-05-20 | Lilien R Jarrett |
Open-market sale |
30,000 | $18.99 | $569.7K |
| 2026-05-19 | Ziemba Peter M |
Open-market sale | 100,000 | $19.31 | $1.9M |
| 2026-05-05 | Yates David M |
Open-market sale | 15,000 | $18.06 | $270.9K |
Well-known investors holding WT (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 0 | $13.5M | — | Sold out |
| Two Sigma Investments | 2026-06-30 | 646,210 | $10.9M | 0.01% | Reduced 61% |
| Millennium Management (Israel Englander) | 2026-06-30 | 365,482 | $6.2M | 0.0% | Reduced 73% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 350,275 | $5.9M | 0.0% | Reduced 23% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 264,070 | $4.5M | 0.01% | Added 39% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 249,893 | $4.2M | 0.0% | New position |
| Two Sigma Investments | 2026-06-30 | 0 | $3.6M | — | Sold out |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 0 | $2.5M | — | Sold out |
| Polen Capital Management | 2026-06-30 | 149,051 | $2.5M | 0.02% | Added 37% |
| D. E. Shaw & Co. | 2026-06-30 | 0 | $2.0M | — | Sold out |
| D. E. Shaw & Co. | 2026-06-30 | 91,295 | $1.5M | 0.0% | Reduced 72% |