EXHIBIT 99.1

WisdomTree Announces Third Quarter 2014 Results

$0.08 diluted net income EPS

Pre-tax income increases 35% and revenues increase 19% from year ago quarter

Declares $0.08 quarterly dividend and $100 million share buyback program

Lowers baseline US tax rate to approximately 38%

New York, NY – (GlobeNewswire) – October 31, 2014 – WisdomTree Investments, Inc. (NASDAQ: WETF), an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager today reported net income of $10.6 million or $0.08 per diluted EPS in the third quarter. Pre-tax income was $20.3 million in the third quarter, an increase of 35.4% from the third quarter of 2013 and 0.6% from the second quarter of 2014. Pre-tax income is comparable to previous periods since prior to 2014, the Company did not record tax expense because of its net operating losses.

Included in the quarter was a loss of $1.5 million, or $0.01 per diluted EPS, associated with the Company’s European listed ETP business, which was acquired in April 2014. The Company also lowered its US income tax rate to approximately 38% from 45% (see “Income Taxes” for further discussion).

WisdomTree CEO and President Jonathan Steinberg said, “WisdomTree reported another quarter of record revenues and strong financial results. Despite the challenging market, net inflow levels increased from the second quarter to $748 million.”

Mr. Steinberg continued, “The growing scale and positive momentum of our business is driving powerful cash generation. In addition, we are lowering our tax rate which will increase our earnings going forward, further propelling WisdomTree to a position of financial strength. As a result, we believe the time is right to institute a new component of our capital management program.”

Capital Return Program - Quarterly Dividend and Share Buyback

The Company’s Board of Directors declared a quarterly cash dividend of $0.08 per share of the Company’s common stock. The dividend will be paid on November 26, 2014, to stockholders of record as of the close of business on November 12, 2014.

The Board also authorized the Company to purchase up to $100 million of its common stock over three years, including purchases to offset future equity grants made under the Company’s equity plans. Purchases under this program will be made in open market or privately negotiated transactions. This authority may be exercised from time to time and in such amounts as market conditions warrant, and subject to regulatory considerations. The timing and actual number of

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shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The repurchase program may be suspended or terminated at any time without prior notice.

“We have structured a capital management plan which reflects WisdomTree’s strength, strategy and commitment to our shareholders. With $164 million in cash and investments, we are confident we can continue to profitably grow the business and reinvest aggressively for future growth while continuing to generate surplus cash,” added Mr. Steinberg.

Summary Operating and Financial Highlights

 

		Three Months Ended												Change From
		Sep. 30,				Jun. 30,				Sep. 30,				Jun. 30,				Sep. 30,
Operating Highlights		2014				2014				2013				2014				2013
US listed ETFs ($, in billions):
AUM		$	35.8			$	35.5			$	31.4				0.9	%			14.3	%
Net inflows/(outflows)		$	0.7			$	0.3			$	1.2				124.0	%			(35.5	%)
Average AUM		$	35.6			$	34.1			$	30.5				4.1	%			16.7	%
Average advisory fee			0.52	%			0.51	%			0.51	%			0.01				0.01
Market share of industry inflows			1.5	%			0.6	%			2.2	%			0.9				(0.7	)
European listed ETPs ($, in millions):
AUM		$	123.2			$	113.2				—				8.8	%			—
Net inflows/(outflows)		$	19.2			$	17.7				—				8.7	%			—
Average advisory fee			0.79	%			0.82	%			—				(0.03	)			—
Financial Highlights ($, in millions, except per share amounts):
Consolidated Results:
Total revenues		$	47.1			$	44.1			$	39.6				6.8	%			18.9	%
Pre-tax income		$	20.3			$	20.1			$	15.0				0.6	%			35.4	%
Net income		$	10.6			$	10.6			$	15.0				0.2	%			(29.0	%)
Diluted earnings per share		$	0.08			$	0.08			$	0.11				—				($  0.	03)
Pre-tax margin			43.0	%			45.6	%			37.8	%			(2.6	)			5.2
US listed ETFs:
Total revenues		$	46.9			$	43.9			$	39.6				6.7	%			18.3	%
Pre-tax income		$	21.8			$	21.7			$	15.0				0.6	%			45.9	%
Gross margin1 (non-GAAP)			82.2	%			82.4	%			76.9	%			(0.2	)			5.3
Pre-tax margin			46.6	%			49.4	%			37.8	%			(2.8	)			8.8

 

1	Gross margin is defined as total revenues less fund management and administration expenses and third-party sharing arrangements.

 

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Recent Business Developments

 

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On September 18, 2014, WisdomTree announced six of its ETFs are available on Schwab ETF OneSource

 

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On August 12, 2014, WisdomTree announced a strategic alliance with leading Australian ETP provider BetaShares

 

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On October 24, 2014, WisdomTree Europe announced the launch of 4 UCITS ETFs on the London Stock Exchange (LSE)

Assets Under Management and Net Inflows

US listed ETF assets under management (“AUM”) were $35.8 billion at September 30, 2014, up 14.3% from September 30, 2013 primarily due to inflow levels. US listed AUM was up 0.9% from June 30, 2014 primarily due to $0.7 billion of net inflows partly offset by $0.4 billion of negative market movement.

European listed AUM was $123.2 million, up 8.8% from $113.2 million at June 30, 2014 primarily due to $19.2 million of net inflows partly offset by $9.2 million of negative market movement.

Performance

In evaluating the performance of our US listed equity, fixed income and alternative ETFs against actively managed and index based mutual funds and ETFs, 86% of the $35.3 billion invested in our ETFs and 56% (29 of 52) of our ETFs outperformed their comparable Morningstar average since inception as of September 30, 2014.

For more information about WisdomTree ETFs including standardized performance, please click here or visit www.wisdomtree.com.

Third Quarter Financial Discussion

Revenues

Total revenues increased 18.9% from the third quarter of 2013 and 6.8% compared to the second quarter of 2014 to $47.1 million primarily due to higher average AUM and average fee capture. Included in the third quarter was $0.2 million in revenues from our European listed ETPs, which were acquired in April 2014. Our average advisory fee for our US listed ETFs was 0.52% as compared to 0.51% for the third quarter of 2013 and 0.51% in the second quarter of 2014.

Margins

Gross margin for our US listed ETFs, which is our total revenues less fund management and administration expenses and third party sharing arrangements, was 82.2% in the third quarter of 2014 as compared to 76.9% in the third quarter of 2013 and 82.4% in the second quarter of 2014. The increase was primarily due to beneficial pricing changes for our fund accounting, administration and custody services, which took effect April 2014.

 

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Pre-tax margin was 43.0% in the third quarter of 2014 as compared to 37.8% in the third quarter of 2013 and 45.6% in the second quarter of 2014. Pre-tax margin for our US listed ETFs was 46.6% in the quarter.

Expenses

Total expenses increased 8.9% from the third quarter of 2013 and 11.9% compared to the second quarter of 2014 to $26.9 million. Included in the quarter was $1.8 million of expenses associated with our European listed ETPs.

 

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Compensation and benefits expense increased 3.5% from the third quarter of 2013 to $10.0 million as lower accrued incentive compensation due to our inflow levels were offset by higher headcount related expenses to support our growth. In addition, we incurred higher compensation costs due to our acquisition of Boost in April 2014. This expense increased 32.3% as compared to the second quarter of 2014 primarily due to higher accrued incentive compensation and headcount related expenses. Our global headcount was 114 at the end of the third quarter of 2014.

 

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Fund management and administration expense decreased 3.7% from the third quarter of 2013 to $8.5 million. This decrease was primarily due to the transfer of our fund accounting, administration and custody services to State Street, despite the higher average AUM. Partly offsetting this decrease was $0.3 million of expenses for our European listed ETPs. This expense increased 8.3% from the second quarter of 2014 primarily due to variable costs related to higher average AUM. We had 69 US listed ETFs and 42 European listed ETPs at the end of the third quarter of 2014.

 

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Marketing and advertising expense increased 64.5% from the third quarter of 2013 and 22.6% from the second quarter of 2014 to $3.3 million primarily due to higher levels of advertising related activities to support our growth.

 

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Sales and business development expense decreased 2.0% from the third quarter of 2013 and 25.9% from the second quarter of 2014 to $1.3 million primarily due to lower spending for sales and product development related initiatives.

 

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Professional and consulting fees increased $0.8 million from the third quarter of 2013 to $1.4 million primarily due to higher strategic corporate consulting costs. This expense decreased 24.8% compared to the second quarter of 2014. The second quarter of 2014 included advisory and other costs associated with our transaction to acquire Boost, which we completed in April 2014.

 

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Occupancy, communication and equipment expense increased 22.0% from the third quarter of 2013 to $0.9 million primarily due to costs for new office space which we began to occupy in January 2014. This expense was relatively unchanged compared to the second quarter of 2014.

 

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Depreciation and amortization expense increased $0.1 million to $0.2 million from the third quarter of 2013 primarily due to amortization of leasehold improvements for our new office space. This expense was essentially unchanged compared to the second quarter of 2014.

 

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Third-party sharing arrangements expense decreased 50.0% to $0.2 million in the third quarter of 2014 as compared to the third quarter of 2013 primarily due to lower fees to our third party marketing agent in Latin America. This expense was relatively unchanged as compared to the second quarter of 2014.

 

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Other expenses remained relatively unchanged as compared to the third quarter of 2013 and second quarter of 2014 at $1.1 million.

Income Taxes

The Company completed state tax planning which resulted in a reduction of its current baseline operating tax rate in the US from 45% to approximately 38%. As a result, the Company recorded a charge to tax expense to reduce the value of its deferred tax asset, which had previously been recorded at a 45% rate. In addition, the Company accounted for non-deductible expenses associated with its acquisition of Boost in April 2014. As a result of these items, the Company recorded a charge of $1.3 million to tax expense. Management will discuss income taxes further on its conference call.

Balance Sheet

As of September 30, 2014, the Company had total assets of $202.2 million which consisted primarily of cash and cash equivalents of $151.3 million and investments of $12.2 million. There were approximately 131.9 million shares of common stock outstanding as of September 30, 2014. Fully diluted weighted average shares outstanding were 138.3 million for the third quarter.

Conference Call

WisdomTree will discuss its results and operational highlights during a conference call on Friday, October 31, 2014 at 9:00 a.m. ET. The call-in number will be (877) 303-7209. Anyone outside the U.S. or Canada should call (970) 315-0420. The slides used during the presentation will be available at http://ir.wisdomtree.com. For those unable to join the conference call at the scheduled time, an audio replay will be available on http://ir.wisdomtree.com.

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

 

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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 which 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:

 

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anticipated trends, conditions and investor sentiment in the global markets and ETPs;

 

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anticipated levels of inflows into and outflows out of our ETPs;

 

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our ability to deliver favorable rates of return to investors;

 

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our ability to develop new products and services;

 

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our ability to maintain current vendors or find new vendors to provide services to us at favorable costs;

 

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our ability to successfully expand our business into non-U.S. markets;

 

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timing of payment of our cash income taxes;

 

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competition in our business; and

 

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the effect of laws and regulations that apply to our business.

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

 

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We have only a limited operating history and, as a result, recent historical growth may not provide an accurate representation of the growth we may experience in the future, which may make it difficult to evaluate our future prospects.

 

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Challenging market conditions associated with declining prices of securities can adversely affect our business by reducing the market value of the assets we manage or causing customers to sell their fund shares and trigger redemptions.

 

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Fluctuations in the amount and mix of our AUM may negatively impact revenue and operating margin.

 

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Most of our assets under management are held in our U.S. listed ETFs that invest in foreign securities and we therefore have substantial exposure to foreign market conditions and are subject to currency exchange rate risks.

 

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We derive a substantial portion of our revenue from products invested in emerging markets and are exposed to the market-specific political and economic risks as well as general investor sentiment regarding future growth of those markets.

 

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We derive a substantial amount of our revenue from products invested in securities of Japanese companies and are exposed to the market-specific political and economic risks as well as general investor sentiment regarding future growth of those markets and currency fluctuations between the Japanese Yen and the U.S. Dollar.

 

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We derive a majority of our revenue from a limited number of products – in particular one fund, WisdomTree Japan Hedged Equity Fund, that accounted for approximately 30% of our ETF AUM – and, as a result, our operating results are particularly exposed to the performance of those funds, investor sentiment toward the strategies pursued by those funds and our ability to maintain the assets under management of those funds.

 

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Our ETPs and ETFs have a limited track record, and poor investment performance could cause our revenue to decline.

 

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We depend on other third parties to provide many critical services to operate our business and our ETPs and ETFs. The failure of key vendors to adequately provide such services could materially affect our operating business and harm our customers.

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, please see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

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.

About WisdomTree

WisdomTree Investments, Inc., through its subsidiaries in the U.S. and Europe (collectively, “WisdomTree”), is an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager headquartered in New York. WisdomTree offers products covering equities, fixed income, currencies, commodities and alternative strategies. WisdomTree currently has approximately $35.9 billion in assets under management globally.

 

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

Contact Information:

WisdomTree Investments, Inc.

Stuart Bell / Jessica Zaloom

+1.917.267.3702 / +1.917.267.3735

sbell@wisdomtree.com / jzaloom@wisdomtree.com

 

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WISDOMTREE INVESTMENTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

 

		Three Months Ended												% Change From								Nine Months Ended
		Sep. 30,				Jun. 30,				Sep. 30,				Jun. 30,				Sep. 30,				Sep. 30,				Sep. 30,				%
		2014				2014				2013				2014				2013				2014				2013				Change
Revenues
Advisory fees		$	46,942			$	43,938			$	39,437				6.8	%			19.0	%		$	133,489			$	105,691				26.3	%
Other income			172				190				193				-9.5	%			-10.9	%			673				611				10.1	%
Total revenues			47,114				44,128				39,630				6.8	%			18.9	%			134,162				106,302				26.2	%
Expenses
Compensation and benefits			9,990				7,551				9,648				32.3	%			3.5	%			26,896				26,577				1.2	%
Fund management and administration			8,465				7,818				8,794				8.3	%			-3.7	%			25,451				26,123				-2.6	%
Marketing and advertising			3,341				2,726				2,031				22.6	%			64.5	%			8,645				6,164				40.2	%
Sales and business development			1,279				1,727				1,305				-25.9	%			-2.0	%			4,307				4,626				-6.9	%
Professional and consulting fees			1,383				1,840				542				-24.8	%			155.2	%			5,018				1,812				176.9	%
Occupancy, communication and equipment			882				853				723				3.4	%			22.0	%			2,635				1,691				55.8	%
Depreciation and amortization			207				201				84				3.0	%			146.4	%			600				249				141.0	%
Third party sharing arrangements			187				115				374				62.6	%			-50.0	%			312				913				-65.8	%
Other			1,123				1,164				1,164				-3.5	%			-3.5	%			3,429				3,086				11.1	%
Total expenses			26,857				23,995				24,665				11.9	%			8.9	%			77,293				71,241				8.5	%
Income before taxes			20,257				20,133				14,965				0.6	%			35.4	%			56,869				35,061				62.2	%
Income tax expense			9,634				9,531				—				—				—				5,440				—				—
Net income		$	10,623			$	10,602			$	14,965				0.2	%			-29.0	%		$	51,429			$	35,061				46.7	%
Income before taxes per share - basic		$	0.15			$	0.15			$	0.12											$	0.43			$	0.28
Income before taxes per share - diluted		$	0.15			$	0.15			$	0.11											$	0.41			$	0.25
Net income per share - basic		$	0.08			$	0.08			$	0.12											$	0.39			$	0.28
Net income per share - diluted		$	0.08			$	0.08			$	0.11											$	0.37			$	0.25
Weighted average common shares - basic			131,778				131,533				126,509												131,418				125,909
Weighted average common shares - diluted			138,346				138,258				140,097												138,476				139,805

 

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WISDOMTREE INVESTMENTS, INC.

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

 

		US				European
		Listed				Listed								US Listed Business
		Business				Business				Total																% Change From
		Q3/14				Q3/14				Q3/14				Q3/14				Q2/14				Q3/13				Q2/14				Q3/13
Revenues
Advisory fees		$	46,659			$	283			$	46,942			$	46,659			$	43,753			$	39,437				6.6	%			18.3	%
Other income			224				(52	)			172				224				182				193				23.1	%			16.1	%
Total revenues			46,883				231				47,114				46,883				43,935				39,630				6.7	%			18.3	%
Expenses
Compensation and benefits			9,250				740				9,990				9,250				7,026				9,648				31.7	%			-4.1	%
Fund management and administration			8,139				326				8,465				8,139				7,625				8,794				6.7	%			-7.4	%
Marketing and advertising			3,244				97				3,341				3,244				2,675				2,031				21.3	%			59.7	%
Sales and business development			1,185				94				1,279				1,185				1,653				1,305				-28.3	%			-9.2	%
Professional and consulting fees			945				438				1,383				945				1,026				542				-7.9	%			74.4	%
Occupancy, communication and equipment			809				73				882				809				807				723				0.2	%			11.9	%
Depreciation and amortization			206				1				207				206				199				84				3.5	%			145.2	%
Third party sharing arrangements			187				—				187				187				115				374				62.6	%			-50.0	%
Other			1,088				35				1,123				1,088				1,105				1,164				-1.5	%			-6.5	%
Total expenses			25,053				1,804				26,857				25,053				22,231				24,665				12.7	%			1.6	%
Income/(loss) before taxes			21,830				(1,573	)			20,257				21,830				21,704				14,965				0.6	%			45.9	%
Income tax expense/(benefit)			9,662				(28	)			9,634				9,662				9,873				—				-2.1	%			n/a
Net income/(loss)		$	12,168			$	(1,545	)		$	10,623			$	12,168			$	11,831			$	14,965				2.8	%			-18.7	%
Pretax margin			46.6	%							43.0	%
Gross margin			82.2	%							81.6	%

 

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WISDOMTREE INVESTMENTS, INC.

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

 

		US				European
		Listed				Listed								US Listed Business
		Business				Business				Total												%
		9M/14				9M/14				9M/14				9M/14				9M/13				Change
Revenues
Advisory fees		$	133,021			$	468			$	133,489			$	133,021			$	105,691				26	%
Other income			717				(44	)			673				717				611				17	%
Total revenues			133,738				424				134,162				133,738				106,302				26	%
Expenses
Compensation and benefits			25,631				1,265				26,896				25,631				26,577				-4	%
Fund management and administration			24,932				519				25,451				24,932				26,123				-5	%
Marketing and advertising			8,497				148				8,645				8,497				6,164				38	%
Sales and business development			4,139				168				4,307				4,139				4,626				-11	%
Professional and consulting fees			3,766				1,252				5,018				3,766				1,812				108	%
Occupancy, communication and equipment			2,516				119				2,635				2,516				1,691				49	%
Depreciation and amortization			597				3				600				597				249				140	%
Third party sharing arrangements			312				—				312				312				913				-66	%
Other			3,335				94				3,429				3,335				3,086				8	%
Total expenses			73,725				3,568				77,293				73,725				71,241				3	%
Income/(loss) before taxes			60,013				(3,144	)			56,869				60,013				35,061				71	%
Income tax expense/(benefit)			5,810				(370	)			5,440				5,810				—				n/a
Net income/(loss)		$	54,203			$	(2,774	)		$	51,429			$	54,203			$	35,061				55	%
Pretax margin			44.9	%							42.4	%
Gross margin			81.1	%							80.8	%

 

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WISDOMTREE INVESTMENTS, INC.

CONSOLIDATED BALANCE SHEET

(in thousands, except per share amounts)

 

		September 30,				December 31,
		2014				2013
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	151,287			$	104,316
Accounts receivable			16,268				18,100
Other current assets			2,208				1,320
Total current assets			169,763				123,736
Fixed assets, net			10,263				6,252
Investments			12,224				11,748
Deferred tax asset, net			8,253				—
Goodwill			1,676				—
Other noncurrent assets			56				55
Total assets		$	202,235			$	141,791
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities:
Fund management and administration payable		$	8,833			$	10,394
Compensation and benefits payable			7,062				14,278
Accounts payable and other liabilities			4,956				4,384
Total current liabilities			20,851				29,056
Other noncurrent liabilities:
Acquisition payable			1,757				—
Deferred rent payable			5,326				3,706
Total liabilities			27,934				32,762
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01; 250,000 shares authorized: issued: 133,516 and 132,247 outstanding: 131,947 and 130,350			1,335				1,322
Additional paid-in capital			198,040				184,201
Accumulated other comprehensive loss			(9	)			—
Accumulated deficit			(25,065	)			(76,494	)
Total stockholders’ equity			174,301				109,029
Total liabilities and stockholders’ equity		$	202,235			$	141,791

 

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WISDOMTREE INVESTMENTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

		Nine Months Ended
		September 30,				September 30,
		2014				2013
Cash flows from operating activities
Net income		$	51,429			$	35,061
Non-cash items included in net income:
Income tax expense			5,396				—
Depreciation and amortization			600				249
Stock-based compensation			6,122				5,186
Deferred rent			1,620				111
Accretion to interest income and other			(76	)			108
Changes in operating assets and liabilities:
Accounts receivable			2,049				(3,683	)
Other assets			(811	)			(720	)
Fund management and administration payable			(1,579	)			3,697
Compensation and benefits payable			(7,510	)			7,235
Accounts payable and other liabilities			(590	)			471
Net cash provided by operating activities			56,650				47,715
Cash flows from investing activities
Purchase of fixed assets			(4,580	)			(1,118	)
Purchase of investments			(1,384	)			(3,358	)
Cash acquired on acquisition			1,349				—
Proceeds from the redemption of investments			868				2,693
Net cash used in investing activities			(3,747	)			(1,783	)
Cash flows from financing activities
Shares repurchased			(6,259	)			(1,413	)
Proceeds from exercise of stock options			341				1,349
Net cash used in financing activities			(5,918	)			(64	)
Decrease in cash flows due to changes in foreign exchange rate			(14	)			—
Net increase in cash and cash equivalents			46,971				45,868
Cash and cash equivalents - beginning of period			104,316				41,246
Cash and cash equivalents - end of period		$	151,287			$	87,114
Supplemental disclosure of cash flow information
Cash paid for taxes		$	66			$	33

 

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WisdomTree Investments, Inc.

Key Operating Statistics (Unaudited)

 

		Three Months Ended												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,				September 30,
		2014				2014				2013				2014				2013
US LISTED ETFs
Total ETFs (in millions)
Beginning of period assets			35,500				33,884				28,975				34,884				18,286
Inflows/(outflows)			748				334				1,160				580				12,015
Market appreciation/(depreciation)			(425	)			1,282				1,217				359				1,051
End of period assets			35,823				35,500				31,352				35,823				31,352
Average assets during the period			35,554				34,141				30,473				34,518				26,932
Revenue Days			92				91				92				273				273
ETF Industry and Market Share (in billions)
ETF industry net inflows			48.5				57.7				53.7				120.7				121.3
WisdomTree market share of industry inflows			1.5	%			0.6	%			2.2	%			0.5	%			9.9	%
International Hedged Equity ETFs (in millions)
Beginning of period assets			12,557				12,612				10,270				13,348				1,258
Inflows/(outflows)			799				(502	)			752				285				9,199
Market appreciation/(depreciation)			615				447				459				338				1,024
End of period assets			13,971				12,557				11,481				13,971				11,481
Average assets during the period			12,654				12,189				11,175				12,631				7,744
US Equity ETFs (in millions)
Beginning of period assets			8,052				7,505				5,777				7,181				4,371
Inflows/(outflows)			84				221				273				494				1,111
Market appreciation/(depreciation)			(197	)			326				221				264				789
End of period assets			7,939				8,052				6,271				7,939				6,271
Average assets during the period			8,067				7,721				6,214				7,655				5,502
Emerging Markets Equity ETFs (in millions)
Beginning of period assets			7,606				6,753				7,172				7,448				7,332
Inflows/(outflows)			270				388				286				26				1,111
Market appreciation/(depreciation)			(381	)			465				245				21				(740	)
End of period assets			7,495				7,606				7,703				7,495				7,703
Average assets during the period			7,878				7,088				7,289				7,247				7,719
International Developed Equity ETFs (in millions)
Beginning of period assets			5,340				4,830				2,633				3,864				2,474
Inflows/(outflows)			(452	)			518				205				878				401
Market appreciation/(depreciation)			(394	)			(8	)			312				(248	)			275
End of period assets			4,494				5,340				3,150				4,494				3,150
Average assets during the period			5,016				5,135				2,888				4,833				2,782
Fixed Income ETFs (in millions)
Beginning of period assets			1,376				1,610				2,437				1,906				2,118
Inflows/(outflows)			69				(278	)			(320	)			(515	)			266
Market appreciation/(depreciation)			(66	)			44				(22	)			(12	)			(289	)
End of period assets			1,379				1,376				2,095				1,379				2,095
Average assets during the period			1,385				1,435				2,246				1,522				2,466
Currency ETFs (in millions)
Beginning of period assets			406				422				547				979				611
Inflows/(outflows)			(35	)			(21	)			(48	)			(605	)			(98	)
Market appreciation/(depreciation)			(9	)			5				3				(12	)			(11	)
End of period assets			362				406				502				362				502
Average assets during the period			380				413				515				468				586
Alternative Strategy ETFs (in millions)
Beginning of period assets			163				152				139				158				122
Inflows/(outflows)			13				8				12				17				25
Market appreciation/(depreciation)			7				3				(1	)			8				3
End of period assets			183				163				150				183				150
Average assets during the period			174				160				146				162				133
Average ETF assets during the period
International hedged equity ETFs			36	%			36	%			37	%			37	%			29	%
US equity ETFs			23	%			23	%			20	%			22	%			20	%
Emerging markets equity ETFs			22	%			21	%			24	%			21	%			29	%
International developed equity ETFs			14	%			15	%			9	%			14	%			10	%
Fixed income ETFs			4	%			4	%			7	%			4	%			9	%
Currency ETFs			1	%			1	%			2	%			1	%			2	%
Alternative strategy ETFs			0	%			0	%			1	%			1	%			1	%
Total			100	%			100	%			100	%			100	%			100	%
Average ETF advisory fee during the period
Alternative strategy ETFs			0.94	%			0.94	%			0.94	%			0.94	%			0.94	%
Emerging markets equity ETFs			0.68	%			0.67	%			0.66	%			0.67	%			0.66	%
International developed equity ETFs			0.56	%			0.57	%			0.56	%			0.56	%			0.56	%
Fixed income ETFs			0.55	%			0.55	%			0.55	%			0.55	%			0.55	%
International hedged equity ETFs			0.50	%			0.50	%			0.49	%			0.50	%			0.49	%
Currency ETFs			0.49	%			0.49	%			0.50	%			0.49	%			0.50	%
US equity ETFs			0.35	%			0.35	%			0.35	%			0.35	%			0.35	%
Blended total			0.52	%			0.51	%			0.51	%			0.52	%			0.52	%
Number of ETFs - end of the period
International developed equity ETFs			17				17				16				17				16
US equity ETFs			13				13				13				13				13
Fixed income ETFs			12				12				6				12				6
International hedged equity ETFs			12				12				4				12				4
Emerging markets equity ETFs			7				7				7				7				7
Currency ETFs			6				6				5				6				5
Alternative strategy ETFs			2				2				2				2				2
Total			69				69				53				69				53
EUROPEAN LISTED ETPs
Total ETPs (in thousands)
Beginning of period assets***			113,244				96,817								96,817
Inflows/(outflows)			19,192				17,658								36,850
Market appreciation/(depreciation)			(9,226	)			(1,231	)							(10,457	)
End of period assets			123,210				113,244								123,210
Average ETP advisory fee during the period			0.79	%			0.82	%							0.80	%
Number of ETPs - end of the period			42				38								42
Global headcount			114				103				84				114				84

Note: Previously issued statistics may be restated due to trade adjustments

Source: Investment Company Institute, Bloomberg, WisdomTree

 

***	Q1 and 9 month stats began April 16, 2014

 

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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. The non-GAAP financial measurements included in this release include gross margin, gross margin percentage and our operating results for our US listed ETF business. 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 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. We disclose gross margin as a non-GAAP financial measurement to allow investors to analyze our revenues less the direct costs paid to third parties attributable to those revenues. We disclose the results of our US listed ETF business to allow investors to better compare our results to the prior year as in April 2014, we acquired Boost ETP, a UK based ETP sponsor.

 

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WISDOMTREE INVESTMENTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

GAAP to NON-GAAP RECONCILIATION

(in thousands)

(Unaudited)

 

		Three Months Ended												For the Nine Months Ended
		Sep. 30,				Jun. 30,				Sep. 30,				Sep. 30,				Sep. 30,
		2014				2014				2013				2014				2013
GAAP total revenue		$	47,114			$	44,128			$	39,630			$	134,162			$	106,302
Fund management and administration			(8,465	)			(7,818	)			(8,794	)			(25,451	)			(26,123	)
Third party sharing arrangements			(187	)			(115	)			(374	)			(312	)			(913	)
Gross margin		$	38,462			$	36,195			$	30,462			$	108,399			$	79,266
Gross margin percentage			81.6	%			82.0	%			76.9	%			80.8	%			74.6	%
US listed ETFs:
GAAP total revenue		$	46,883			$	43,935
Fund management and administration			(8,139	)			(7,625	)
Third party sharing arrangements			(187	)			(115	)
Gross margin		$	38,557			$	36,195
Gross margin percentage			82.2	%			82.4	%

 

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