WisdomTree Announces Fourth Quarter 2025 Results

NEW YORK--( BUSINESS WIRE)--WisdomTree, Inc. (NYSE: WT), a global financial innovator, today reported financial results for the fourth quarter of 2025.

$40.0 million of net income ($41.2 (1) million of net income, as adjusted). See “Non-GAAP” Financial Measurements” for additional information.

$144.5 billion of ending AUM, an increase of 5.3% from the prior quarter arising from market appreciation and AUM related to our acquisition of Ceres Partners, LLC (the “Ceres Acquisition”), partly offset by net outflows.

($0.3) billion of net outflows, primarily driven by outflows from our fixed income products and partly offset by inflows into our international developed equity products.

0.35% average advisory fee, unchanged from the prior quarter.

0.42% adjusted revenue yield (2), a 4 basis point increase from the prior quarter due to revenues arising from the Ceres Acquisition.

$147.4 million of operating revenues, an increase of 17.4% from the prior quarter due to revenues arising from the Ceres Acquisition, higher average AUM and higher other revenues attributable to our European listed exchange-traded products (“ETPs”).

83.2% gross margin (1), a 1 point increase from the prior quarter primarily due to an increase in revenues arising from the Ceres Acquisition.

40.5% operating income margin (41.7% (1) as adjusted), a 4.2 point increase (3.4 point increase, as adjusted) from the prior quarter primarily due to an increase in revenues arising from the Ceres Acquisition.

$0.03 quarterly dividend declared, payable on February 25, 2026 to stockholders of record as of the close of business on February 11, 2026.

Update from Jarrett Lilien, WisdomTree COO and President

“We closed 2025 with strong momentum, delivering $8.5 billion in net inflows, approximately 8% organic growth, and meaningful margin expansion. Model portfolios and SMAs continue to be a major growth engine, with model AUA surpassing $6 billion as adoption deepens across our client base. Combined with continued strength in ETFs and early traction in digital assets and private markets, we enter 2026 well positioned for sustained growth.”

Update from Jonathan Steinberg, WisdomTree CEO

“WisdomTree is operating from a position of strength, with a diversified and scalable platform delivering growth across asset classes, geographies and channels. What were once emerging initiatives, including models, tokenized assets and private markets, are now real businesses contributing to momentum today while still early in their growth. With disciplined execution and improving guidance, we enter 2026 with conviction in the durability of our strategy and its long-term compounding potential.”

OPERATING AND FINANCIAL HIGHLIGHTS

Three Months Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

2025

2024

Consolidated Operating Highlights ($ in billions):

AUM—end of period

144.5

137.2

126.1

115.8

109.8

Net (outflows)/inflows

(0.3

)

2.2

3.5

3.1

(0.3

)

Average AUM

140.7

130.8

119.2

114.6

112.3

Average advisory fee

0.35

0.36

Adjusted revenue yield (2)

0.42

0.38

0.39

Consolidated Financial Highlights ($ in millions, except per share amounts):

Operating revenues

147.4

125.6

112.6

108.1

110.7

Net income

40.0

19.7

24.8

24.6

27.3

Diluted earnings per share

0.28

0.13

0.17

0.18

Operating income margin

40.5

36.3

30.8

31.6

31.7

As Adjusted (Non-GAAP (1)):

Operating revenues, as adjusted

147.4

125.6

112.6

108.1

110.5

Gross margin

83.2

82.2

81.1

80.8

79.3

Net income, as adjusted

41.2

34.5

25.9

23.0

25.3

Diluted earnings per share, as adjusted

0.29

0.23

0.18

0.16

0.17

Operating income margin, as adjusted

41.7

38.3

32.5

31.6

31.7

RECENT BUSINESS DEVELOPMENTS

Company News

Product News

WISDOMTREE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

Three Months Ended

Years Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

2025

2024

2025

2024

Operating Revenues:

Advisory fees

122,712

114,485

103,241

99,549

102,264

439,987

395,362

Management fees

4,908

—

4,908

—

Performance fees

7,105

—

7,105

—

Other revenues

12,709

11,131

9,380

8,533

8,433

41,753

32,375

Total revenues

147,434

125,616

112,621

108,082

110,697

493,753

427,737

Operating Expenses:

Compensation and benefits

37,273

33,791

32,827

33,788

30,032

137,679

121,281

Fund management and administration

24,830

22,353

21,252

20,714

22,858

89,149

83,963

Marketing and advertising

5,613

4,788

5,330

4,813

6,117

20,544

20,532

Sales and business development

4,045

3,943

4,232

4,137

4,101

16,357

14,817

Professional fees

3,596

3,505

3,177

2,782

4,559

13,060

21,098

Occupancy, communications and equipment

1,892

1,601

1,559

1,482

1,423

6,534

5,344

Depreciation and amortization

2,043

615

580

540

504

3,778

1,752

Third-party distribution fees

4,772

3,977

4,083

3,112

3,161

15,944

11,138

Acquisition-related costs

317

2,409

1,967

—

4,693

—

Other

3,306

2,980

2,982

2,552

2,902

11,820

10,519

Total operating expenses

87,687

79,962

77,989

73,920

75,657

319,558

290,444

Operating income

59,747

45,654

34,632

34,162

35,040

174,195

137,293

Other Income/(Expenses):

Interest expense

(11,023

)

(8,466

)

(5,490

)

(5,441

)

(5,616

)

(30,420

)

(18,911

)

Interest income

2,965

4,015

2,090

1,897

2,147

10,967

6,778

Loss on extinguishment of convertible notes

(833

)

(13,011

)

—

(13,844

)

(30,632

)

Remeasurement of contingent consideration

(710

)

—

(710

)

—

Other gains and losses, net

317

1,325

638

(250

)

2,627

2,030

874

Income before income taxes

50,463

29,517

31,870

30,368

34,198

142,218

95,402

Income tax expense

10,437

9,816

7,093

5,739

6,890

33,085

28,709

Net income.

40,026

19,701

24,777

24,629

27,308

109,133

66,693

Earnings per share—basic

0.29

0.14 (3)

0.17

0.19

0.77 (3)

0.34 (3)

Earnings per share—diluted

0.28

0.13 (3)

0.17

0.18

0.75 (3)

0.33 (3)

Weighted average common shares—basic

136,340

139,584

143,076

142,580

141,275

140,376

144,630

Weighted average common shares—diluted

143,314

150,675

146,640

146,545

147,612

144,939

158,844

As Adjusted (Non-GAAP (1))

Total revenues.

147,434

125,616

112,621

108,082

110,505

Total operating expenses

85,936

77,553

76,022

73,920

75,465

Operating income

61,498

48,063

36,599

34,162

35,040

Income before income taxes.

53,840

45,318

33,798

30,947

33,033

Income tax expense

12,605

10,842

7,935

7,933

7,753

Net income

41,235

34,476

25,863

23,014

25,280

Earnings per share—diluted

0.29

0.23

0.18

0.16

0.17

Weighted average common shares—diluted

143,314

150,675

146,640

146,545

147,612

QUARTERLY HIGHLIGHTS

Operating Revenues

Operating Expenses

Other Income/(Expenses)

Income Taxes

ANNUAL HIGHLIGHTS

CONFERENCE CALL DIAL-IN AND WEBCAST DETAILS

WisdomTree will discuss its results and operational highlights during a live webcast on Friday, January 30, 2026 at 11:00 a.m. ET, which, together with all earnings materials, can be accessed via WisdomTree’s investor relations website at https://ir.wisdomtree.com. A replay of the webcast will be available shortly after the call.

Participants also can dial in using the following numbers: (877) 407-9210 or (201) 689-8049. Click here to access the participant international toll-free access numbers.

To avoid delays, we encourage participants to log in or dial into the conference call 10 minutes ahead of the scheduled start time.

About WisdomTree

WisdomTree is a global financial innovator, offering a diverse suite of exchange-traded products (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, transparency and provide an enhanced user experience. Building on our heritage of innovation, we offer next-generation digital products and services related to tokenized real world assets and stablecoins, as well as our institutional platform, WisdomTree Connect™ and blockchain-native digital wallet, WisdomTree Prime ®*, and have expanded into private markets through the acquisition of Ceres Partners’ U.S. farmland platform.

* The WisdomTree Connect institutional platform and WisdomTree Prime digital wallet and digital asset services are made available through WisdomTree Digital Movement, Inc., a federally registered money services business, state-licensed money transmitter and financial technology company (NMLS ID: 2372500) or WisdomTree Digital Trust Company, LLC, in select U.S. jurisdictions and may be limited where prohibited by law. WisdomTree Digital Trust Company, LLC is chartered as a limited purpose trust company by the New York State Department of Financial Services to engage in virtual currency business. Visit https://wisdomtreeconnect.com, https://www.wisdomtreeprime.com or the WisdomTree Prime mobile app for more information.

WisdomTree currently has approximately $159.0 billion in assets under management globally, inclusive of assets under management related to our recently completed acquisition of Ceres Partners, LLC.

For more information about WisdomTree, WisdomTree Connect and WisdomTree Prime, visit: https://www.wisdomtree.com.

Please visit us on X at @WisdomTreeNews.

WisdomTree ® is the marketing name for WisdomTree, Inc. and its subsidiaries worldwide.

PRODUCTS AND SERVICES AVAILABLE VIA WISDOMTREE CONNECT AND WISDOMTREE PRIME:

The products and services available through WisdomTree Connect and the WisdomTree Prime app are not endorsed, indemnified or guaranteed by any regulatory agency.

(1)

(2)

(3)

WISDOMTREE, INC. AND SUBSIDIARIES

KEY OPERATING STATISTICS

(Unaudited)

Three Months Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

2025

2024

GLOBAL PRODUCTS ($ in millions)

Beginning of period assets

137,175

126,070

115,787

109,779

112,577

Add: Digital Assets—Jan. 1, 2025

—

Add: Assets acquired—Ceres Acquisition

1,812

—

(Outflows)/inflows

(283

)

2,240

3,529

3,052

(281

)

Market appreciation/(depreciation)

5,820

8,865

6,754

2,924

(2,517

)

End of period assets

144,524

137,175

126,070

115,787

109,779

Average assets during the period

140,685

130,760

119,185

114,622

112,349

Average ETP advisory fee during the period

0.35

0.36

Total revenue yield

0.42

0.38

0.39

Revenue days

Number of products—end of the period

406

397

383

375 ([1])

353

ETPs AND TOKENIZED PRODUCTS

U.S. LISTED ETFs ($ in millions)

Beginning of period assets

88,293

85,179

80,531

79,095

81,267

(Outflows)/inflows

(1,108

)

(445

)

1,110

1,847

(40

)

Market appreciation/(depreciation)

1,336

3,559

3,538

(411

)

(2,132

)

End of period assets

88,521

88,293

85,179

80,531

79,095

Average assets during the period

88,074

87,205

81,525

81,127

80,661

Number of ETFs—end of the period

EUROPEAN LISTED ETPs ($ in millions)

Beginning of period assets

48,290

40,541

35,124

30,684

31,310

Inflows/(outflows)

609

2,447

2,201

1,104

(241

)

Market appreciation/(depreciation)

4,446

5,302

3,216

3,336

(385

)

End of period assets

53,345

48,290

40,541

35,124

30,684

Average assets during the period

50,102

42,853

37,439

33,415

31,688

Number of ETPs—end of the period

300

295

285

280

275

DIGITAL ASSETS ($ in millions)

Beginning of period assets

592

350

132

—

Add: Digital Assets—Jan. 1, 2025

—

Inflows

179

238

218

101

—

Market (depreciation)/appreciation

)

—

)

—

End of period assets

769

592

350

132

Average assets during the period

694

702

221

Number of products—end of the period

17 (1)

—

PRIVATE ASSETS ($ in millions)

Beginning of period assets

—

Add: Assets acquired—Ceres Acquisition

1,812

—

Inflows

—

Market appreciation

—

End of period assets

1,889

—

Average assets during the period

1,815

—

Number of products—end of the period

—

ETPs AND TOKENIZED PRODUCT CATEGORIES ($ in millions)

U.S. Equity

Beginning of period assets.

40,977

38,617

35,628

35,414

34,643

Add: Digital Assets—Jan. 1, 2025.

—

Inflows

191

1,284

962

1,100

Market appreciation/(depreciation)

260

2,328

1,705

(757

)

(329

)

End of period assets

41,428

40,977

38,617

35,628

35,414

Average assets during the period

41,163

40,024

36,080

36,281

35,714

Commodity & Currency

Beginning of period assets

31,705

26,696

25,487

21,906

23,034

Add: Digital Assets—Jan. 1, 2025

—

Inflows/(outflows)

177

1,096

(110

)

(159

)

(441

)

Market appreciation/(depreciation)

5,098

3,913

1,319

3,739

(687

)

End of period assets

36,980

31,705

26,696

25,487

21,906

Average assets during the period

33,824

28,162

25,888

23,993

22,989

International Developed Market Equity

Beginning of period assets

23,893

21,725

18,178

17,602

18,075

Inflows

1,146

477

1,649

474

Market appreciation/(depreciation)

577

1,691

1,898

102

(536

)

End of period assets

25,616

23,893

21,725

18,178

17,602

Average assets during the period

24,708

22,481

19,577

18,275

17,716

Fixed Income

Beginning of period assets

22,509

22,543

22,230

20,043

20,767

Add: Digital Assets—Jan. 1, 2025

—

(Outflows)/inflows

(1,355

)

(58

)

148

2,093

(387

)

Market (depreciation)/appreciation

(80

)

165

(337

)

End of period assets

21,074

22,509

22,543

22,230

20,043

Average assets during the period

21,422

23,128

22,526

21,464

20,398

Emerging Market Equity

Beginning of period assets

10,855

10,957

9,985

10,468

12,452

(Outflows)/inflows

(508

)

(250

)

(445

)

(908

)

Market appreciation/(depreciation)

296

148

944

(38

)

(1,076

)

End of period assets

10,643

10,855

10,957

9,985

10,468

Average assets during the period

10,839

10,874

10,295

10,072

11,407

Leveraged & Inverse

Beginning of period assets

2,913

2,631

2,133

1,924

2,082

(Outflows)/inflows

(15

)

(52

)

141

116

(69

)

Market appreciation/(depreciation)

377

334

357

(89

)

End of period assets

3,275

2,913

2,631

2,133

1,924

Average assets during the period

3,097

2,750

2,354

2,083

2,032

Cryptocurrency

Beginning of period assets

3,168

2,087

1,553

1,912

1,054

Add: Digital Assets—Jan. 1, 2025

—

(Outflows)/inflows

(117

)

764

198

(89

)

315

Market (depreciation)/appreciation

(809

)

317

336

(271

)

543

End of period assets

2,242

3,168

2,087

1,553

1,912

Average assets during the period

2,550

2,412

1,800

1,900

1,599

Alternatives

Beginning of period assets

1,155

814

593

510

470

Inflows

161

231

191

100

Market appreciation/(depreciation)

110

(17

)

End of period assets

1,377

1,155

814

593

510

Average assets during the period

1,267

929

665

554

494

Headcount

360

338

321

315

313

(1) Includes 17 digital assets products, which were launched prior to January 1, 2025.

Note: Previously issued statistics may be restated due to fund closures and trade adjustments.

Source: WisdomTree

WISDOMTREE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

Dec. 31,

2025

2024

(Unaudited)

ASSETS

Current assets:

Cash, cash equivalents and restricted cash

311,732

181,191

Financial instruments owned, at fair value

107,117

85,439

Accounts receivable

64,452

44,866

Prepaid expenses

7,338

5,340

Other current assets

1,723

1,542

Total current assets

492,362

318,378

Fixed assets, net

431

336

Deferred tax assets, net

9,803

11,656

Investments

29,075

8,922

Right of use assets—operating leases

2,764

880

Goodwill

228,624

86,841

Intangible assets, net

748,957

605,896

Other noncurrent assets

925

631

Total assets

1,512,941

1,033,540

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES

Current liabilities:

Convertible notes—current

149,604

—

Compensation and benefits payable

52,435

39,701

Fund management and administration payable

29,448

31,135

Payable to Gold Bullion Holdings (Jersey) Limited (“GBH”)

13,940

14,804

Operating lease liabilities

1,614

709

Income taxes payable

2,295

724

Accounts payable and other liabilities

32,720

22,124

Total current liabilities

282,056

109,197

Convertible notes—long term

804,203

512,033

Contingent consideration

11,844

—

Operating lease liabilities—long term

1,166

171

Payable to GBH

—

12,159

Total liabilities

1,099,269

633,560

STOCKHOLDERS’ EQUITY

Common stock, par value $0.01; 400,000 shares authorized:

Issued and outstanding: 140,713 and 146,102 at December 31, 2025 and December 31, 2024, respectively

1,407

1,461

Additional paid-in capital

189,244

270,303

Accumulated other comprehensive gain/(loss)

2,227

(1,607

)

Retained earnings

220,794

129,823

Total stockholders’ equity

413,672

399,980

Total liabilities and stockholders’ equity

1,512,941

1,033,540

WISDOMTREE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

Years Ended December 31,

2025

2024

Cash flows from operating activities:

Net income

109,133

66,693

Adjustments to reconcile net income to net cash provided by operating activities:

Advisory and license fees paid in gold, other precious metals and cryptocurrency

(73,540

)

(53,452

)

Stock-based compensation

21,619

20,691

Loss on extinguishment of convertible notes

13,844

30,632

Depreciation and amortization

3,778

1,752

Amortization of issuance costs—convertible notes

3,297

1,893

Gains on financial instruments owned, at fair value

(1,904

)

(4,851

)

Imputed interest on payable to GBH

1,781

2,635

Amortization of right of use asset

1,527

1,304

Deferred income taxes

981

(398

)

Increase in fair value of contingent consideration

710

—

Net (gains)/losses on investments

(50

)

1,135

Changes in operating assets and liabilities:

Accounts receivable

(2,282

)

(9,036

)

Prepaid expenses

(1,872

)

(107

)

Gold and other precious metals

70,624

52,640

Other assets

(537

)

(247

)

Fund management and administration payable

(2,382

)

1,290

Compensation and benefits payable

7,936

1,937

Income taxes payable

1,647

(3,126

)

Operating lease liabilities

(1,509

)

(1,320

)

Accounts payable and other liabilities

(4,855

)

3,396

Net cash provided by operating activities

147,946

113,461

Cash flows from investing activities:

Cash paid—Ceres acquisition, net of cash acquired

(270,346

)

—

Purchase of financial instruments owned, at fair value

(32,028

)

(69,439

)

Purchase of investments

(20,053

)

(674

)

Cash paid—software development

(2,968

)

(2,336

)

Purchase of fixed assets

(215

)

(141

)

Proceeds from the sale of financial instruments owned, at fair value

12,577

48,126

Proceeds from the exit from investment in Securrency, Inc.

—

565

Proceeds from held-to-maturity securities maturing or called prior to maturity

—

Net cash used in investing activities

(313,033

)

(23,875

)

Cash flows from financing activities:

Common stock repurchased

(102,732

)

(62,870

)

Repurchase and maturity of convertible notes

(39,304

)

(132,713

)

Dividends paid

(17,308

)

(19,002

)

Cash paid to GBH

(14,804

)

(14,804

)

Issuance costs—convertible notes

(11,064

)

(7,667

)

Repurchase of Series A Non-Voting Convertible Preferred Stock

—

(143,812

)

Proceeds from the issuance of convertible notes

475,000

345,000

Repurchase costs—Series A Non-Voting Convertible Preferred Stock

—

(132

)

Net cash provided by/(used in) financing activities

289,788

(36,000

)

Increase/(decrease) in cash flow due to changes in foreign exchange rate

5,840

(1,700

)

Net increase in cash, cash equivalents and restricted cash

130,541

51,886

Cash, cash equivalents and restricted cash—beginning of year

181,191

129,305

Cash, cash equivalents and restricted cash—end of period

311,732

181,191

Supplemental disclosure of cash flow information:

Cash paid for income taxes

30,340

32,218

Cash paid for interest

17,636

12,350

NON-GAAP FINANCIAL MEASUREMENTS

In an effort to provide additional information regarding our results as determined by GAAP, we also disclose certain non-GAAP information which we believe provides useful and meaningful information. Our management reviews these non-GAAP financial measurements when evaluating our financial performance and results of operations; therefore, we believe it is useful to provide information with respect to these non-GAAP measurements so as to share this perspective of management. Non-GAAP measurements do not have any standardized meaning, do not replace nor are they superior to GAAP financial measurements and are unlikely to be comparable to similar measures presented by other companies. These non-GAAP financial measurements should be considered in the context with our GAAP results. The non-GAAP financial measurements contained in this press release include:

Adjusted Revenues, Operating Income, Operating Expenses, Income Before Income Taxes, Income Tax Expense, Net Income and Diluted Earnings per Share

We disclose adjusted revenues, operating income, operating expenses, income before income taxes, income tax expense, net income and diluted earnings per share as non-GAAP financial measurements in order to report our results exclusive of items that are non-recurring or not core to our operating business. We believe presenting these non-GAAP financial measurements provides investors with a consistent way to analyze our performance. These non-GAAP financial measurements exclude the following:

Gains or losses on financial instruments owned: We account for our financial instruments owned as trading securities, which requires these instruments to be measured at fair value with gains and losses reported in net income. We exclude these items when calculating our non-GAAP financial measurements as the gains and losses introduce earnings volatility and are not core to our operating business.

Foreign currency remeasurement gains and losses on U.S. dollars held by foreign subsidiaries: GAAP requires account balances to be remeasured into an entity’s functional currency, with resulting gains and losses reported in net income. Foreign subsidiaries holding U.S. dollars remeasure these balances into their functional currencies and recognize the gains and losses. Beginning in the second quarter of 2025, we began excluding remeasurement effects from our non-GAAP financial measures, as they introduce earnings volatility, are not core to our operations and arise from balances denominated in our reporting currency.

Tax windfalls and shortfalls upon vesting of stock-based compensation awards: GAAP requires the recognition of tax windfalls and shortfalls within income tax expense. These items arise upon the vesting of stock-based compensation awards and the magnitude is directly correlated to the number of awards vesting/exercised, as well as the difference between the price of our stock on the date the award was granted and the date the award vested or was exercised. We exclude these items when calculating our non-GAAP financial measurements as they introduce earnings volatility and are not core to our operating business.

Amortization of intangible assets and remeasurement of contingent consideration arising from our acquisition of Ceres Partners, LLC: On October 1, 2025, we completed the Ceres Acquisition for aggregate consideration consisting of (i) $275 million in cash payable at closing, subject to customary post-closing adjustments and (ii) contingent consideration of up to $225 million, payable in 2030, contingent upon Ceres Partners, LLC achieving a compound annual growth rate (“CAGR”) in revenues of 12% to 22% during the measurement period of January 1, 2025 through December 31, 2029. GAAP requires contingent consideration to be re-measured each reporting period with changes in fair value reported in net income. In addition, a portion of the consideration totaling $143.5 million was allocated to intangible assets, which is amortized over 25 years. We exclude changes in fair value of contingent consideration and amortization of intangible assets arising from the Ceres Acquisition when calculating our non-GAAP financial measurements as these items are not core to our operating business.

Other items: Changes in deferred tax asset valuation allowance, loss on extinguishment of convertible notes, acquisition-related costs, imputed interest on our payable to Gold Bullion Holdings (Jersey) Limited (“GBH”) and gains and losses recognized on our investments are excluded when calculating our non-GAAP financial measurements. We also offset revenues and related expenses pertaining to legal and other related expenses covered by insurance as the gross presentation required under GAAP serves to overstate our revenues and expenses in the ordinary course of business.

Adjusted Effective Income Tax Rate

We disclose our adjusted effective income tax rate as a non-GAAP financial measurement in order to report our effective income tax rate exclusive of items that are non-recurring or not core to our operating business. We believe reporting our adjusted effective income tax rate provides investors with a consistent way to analyze our income taxes. Our adjusted effective income tax rate is calculated by dividing adjusted income tax expense by adjusted income before income taxes. See above for information regarding the items that are excluded.

Gross Margin and Gross Margin Percentage

We disclose our gross margin and gross margin percentage as non-GAAP financial measurements because we believe they provide investors with a consistent way to analyze the amount we retain after paying third-party service providers to operate our ETPs. These measures also assist us in analyzing the profitability of our products. We define gross margin as total adjusted operating revenues less fund management and administration expenses. Gross margin percentage is calculated as gross margin divided by total adjusted operating revenues.

GAAP to NON-GAAP RECONCILIATION (CONSOLIDATED)

(in thousands)

(Unaudited)

Three Months Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

Adjusted Net Income and Diluted Earnings per Share:

2025

2024

Net income, as reported

40,026

19,701

24,777

24,629

27,308

(Deduct)/add back: (Decrease)/increase in deferred tax asset valuation allowance on capital losses

(1,237

)

(24

)

(459

)

(428

)

Add back: Amortization of intangible assets arising from the Ceres Acquisition, net of income taxes

1,086

—

Add back: Increase in fair value of contingent consideration, net of income taxes

538

—

Add back: Loss on extinguishment of convertible notes, net of income taxes

505

12,763

—

(718

)

Add back: Imputed interest on payable to GBH, net of income taxes

285

364

354

344

451

Add back: Acquisition-related costs, net of income taxes

240

1,824

1,489

—

(Deduct)/add back: Foreign currency remeasurement (gains)/losses on U.S. dollar balances, net of income taxes

(141

)

—

1,136

—

(Deduct)/add back: (Gains)/losses recognized on investments, net of income taxes

(75

)

734

(458

)

(239

)

389

Add back/(deduct): Losses/(gains) on financial instruments owned, net of income taxes

(810

)

(972

)

333

(1,722

)

Deduct: Tax windfalls upon vesting of stock-based compensation awards

—

(76

)

(2,083

)

—

Adjusted net income

41,235

34,476

25,863

23,014

25,280

Weighted average common shares—diluted

143,314

150,675

146,640

146,545

147,612

Adjusted earnings per share—diluted

0.29

0.23

0.18

0.16

0.17

Three Months Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31

Gross Margin and Gross Margin Percentage:

2025

2024

Operating revenues

147,434

125,616

112,621

108,082

110,697

Deduct: Legal and other related expenses covered by insurance

—

(192

)

Operating revenues, as adjusted

147,434

125,616

112,621

108,082

110,505

Deduct: Fund management and administration

(24,830

)

(22,353

)

(21,252

)

(20,714

)

(22,858

)

Gross margin

122,604

103,263

91,369

87,368

87,647

Gross margin percentage

83.2

82.2

81.1

80.8

79.3

Three Months Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

Adjusted Operating Revenues, Operating Income and Adjusted Operating Income Margin:

2025

2024

Operating revenues

147,434

125,616

112,621

108,082

110,697

Deduct: Legal and other related expenses covered by insurance

—

(192

)

Operating revenues, as adjusted

147,434

125,616

112,621

108,082

110,505

Operating income

59,747

45,654

34,632

34,162

35,040

Add back: Amortization of intangible assets arising from the Ceres acquisition

1,434

—

Add back: Acquisition-related costs

317

2,409

1,967

—

Adjusted operating income

61,498

48,063

36,599

34,162

35,040

Adjusted operating income margin

41.7

38.3

32.5

31.6

31.7

Three Months Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

Adjusted Total Operating Expenses:

2025

2024

Total operating expenses

87,687

79,962

77,989

73,920

75,657

Deduct: Amortization of intangible assets arising from the Ceres acquisition

(1,434

)

—

Deduct: Acquisition-related costs

(317

)

(2,409

)

(1,967

)

—

Deduct: Legal and other related expenses covered by insurance

—

(192

)

Adjusted total operating expenses

85,936

77,553

76,022

73,920

75,465

Three Months Ended

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

Dec. 31,

Adjusted Income Before Income Taxes:

2025

2024

Income before income taxes

50,463

29,517

31,870

30,368

34,198

Add back: Amortization of intangible assets arising from the Ceres Acquisition

1,434

—

Add back: Loss on extinguishment of convertible notes

833

13,011

—

Add back: Increase in fair value of contingent consideration

710

—

Add back: Imputed interest on payable to GBH

377

481

467

455

596

Add back: Acquisition-related costs

317

2,409

1,967

—

(Deduct)/add back: Foreign currency remeasurement (gains)/losses on U.S. dollar balances, net of income taxes

(205

)

—

1,383

—

(Deduct)/add back: (Gains)/losses recognized on investments

(99

)

970

(605

)

(316

)

514

Add back/(deduct): Losses/(gains) on financial instruments owned

(1,070

)

(1,284

)

440

(2,275

)

Adjusted income before income taxes

53,840

45,318

33,798

30,947

33,033

Three Months Ended

Adjusted Income Tax Expense and Adjusted Effective Income Tax Rate:

Dec. 31,

2025

Sept. 30,

2025

June 30,

2025

Mar. 31,

2025

Dec. 31,

2024

Adjusted income before income taxes (above)

53,840

45,318

33,798

30,947

33,033

Income tax expense

10,437

9,816

7,093

5,739

6,890

Add back/(deduct): Decrease/(increase) in deferred tax asset valuation allowance on capital losses

1,237

459

(30

)

428

Add back: Tax benefit of intangible asset amortization arising from the Ceres Acquisition

348

—

Add back: Tax benefit arising from extinguishment of convertible notes

328

248

—

718

Add back: Tax benefit arising from increase in fair value of contingent consideration

172

—

Add back: Tax benefit on imputed interest

117

113

111

145

Add back: Tax benefit on acquisition-related costs

585

478

—

(Deduct)/add back: Tax (expense)/benefit on foreign currency remeasurement losses on U.S. dollar balances

(64

)

—

247

—

(Deduct)/add back: Tax (expense)/benefit on (gains)/losses on investments

(24

)

236

(147

)

(77

)

125

Add back/(deduct): Tax benefit/(expense) arising from losses/(gains) on financial instruments owned

(260

)

(312

)

107

(553

)

Add back: Tax windfalls upon vesting of stock-based compensation awards

—

2,083

—

Adjusted income tax expense

12,605

10,842

7,935

7,933

7,753

Adjusted effective income tax rate

23.4

23.9

23.5

25.6

23.5

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, the risks described below. If one or more of these or other risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this press release completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

In particular, forward-looking statements in this press release may include statements about:

Our business is subject to many risks and uncertainties, including without limitation:

Additional risks include those associated with the acquisition of Ceres Partners, LLC, including the risk that integration may be more difficult, time-consuming or costly than expected, or that expected benefits (including projected business growth or the ability to raise additional capital into the funds of the acquired business) may not be realized as anticipated. Other factors, such as general economic conditions, including currency exchange rate fluctuations, also may have an effect on the results of our operations. For a more complete description of the risks noted above and other risks that could cause our actual results to differ from our current expectations, see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, and in subsequent reports filed with or furnished to the SEC.

The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Therefore, these forward-looking statements do not represent our views as of any date other than the date of this press release.

Category: Business Update