Record net income up 128% year-over-year to $24.2 million or diluted EPS $0.18
Record revenues up 85% year-over-year to $81.6 million
Record U.S. pre-tax margin of 53.2%; Record consolidated pre-tax margin of 50.2%
$6.6 billion in net inflows for the quarter; $20.1 billion in first half 2015
Net inflow market share of 15.6% for the quarter
Declares $0.08 quarterly dividend
NEW YORK, July 31, 2015 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (NASDAQ:WETF), an exchange-traded fund ("ETF") and exchange-traded product ("ETP") sponsor and asset manager today reported net income of $24.2 million for the second quarter of 2015 or $0.18 per share on a fully diluted basis. This compares to $10.6 million in the second quarter of 2014 and $12.1 million in the first quarter of 2015.
WisdomTree CEO and President Jonathan Steinberg said, "Our innovative ETF platform attracted $6.6 billion in inflows in the second quarter and more than $20 billion in the first half of the year, making WisdomTree one of the fastest-growing companies within the ETF and broader asset management industry in 2015 to date. We also delivered industry-leading operating margins and record financial results, demonstrating the increasing scale and strength of our business model."
Mr. Steinberg continued, "I am pleased with our strong execution in the second quarter and excited about the investments and capabilities we are adding to enhance our global ETF franchise and drive future growth."
Summary Operating and Financial Highlights
Three Months Ended | Change From | |||||||||||||||
Jun. 30, | Mar. 31, | Jun. 30, | Mar. 31, | Jun. 30, | ||||||||||||
Operating Highlights | 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||
U.S. listed ETFs ($, in billions): | ||||||||||||||||
AUM | $ | 61.3 | $ | 55.8 | $ | 35.5 | 9.9 | % | 72.7 | % | ||||||
Net inflows | $ | 6.6 | $ | 13.5 | $ | 0.3 | (51.2 | %) | 1,875.4 | % | ||||||
Average AUM | $ | 61.2 | $ | 46.4 | $ | 34.1 | 31.8 | % | 79.1 | % | ||||||
Average advisory fee | 0.53 | % | 0.52 | % | 0.51 | % | +.01 | +.02 | ||||||||
Market share of U.S. industry inflows | 15.6 | % | 24.4 | % | 0.6 | % | -8.8 | +15.0 | ||||||||
European listed ETPs ($, in millions): | ||||||||||||||||
AUM | $ | 611.9 | $ | 334.1 | $ | 113.2 | 83.2 | % | 440.4 | % | ||||||
Net inflows | $ | 194.6 | $ | 174.2 | $ | 17.7 | 11.7 | % | 1,001.9 | % | ||||||
Average advisory fee | 0.68 | % | 0.75 | % | 0.82 | % | -.07 | -.14 | ||||||||
Financial Highlights ($, in millions, except per share amounts): | ||||||||||||||||
Consolidated Results: | ||||||||||||||||
Total revenues | $ | 81.6 | $ | 60.1 | $ | 44.1 | 35.6 | % | 84.8 | % | ||||||
Pre-tax income | $ | 40.9 | $ | 21.0 | $ | 20.1 | 94.8 | % | 103.3 | % | ||||||
Net income | $ | 24.2 | $ | 12.1 | $ | 10.6 | 100.4 | % | 128.0 | % | ||||||
Diluted earnings per share | $ | 0.18 | $ | 0.09 | $ | 0.08 | $ | 0.09 | $ | 0.10 | ||||||
Pre-tax margin | 50.2 | % | 35.0 | % | 45.6 | % | +15.2 | +4.6 | ||||||||
U.S. listed ETFs: | ||||||||||||||||
Gross margin[1] (non-GAAP) | 86.4 | % | 83.2 | % | 82.4 | % | +3.2 | +4.0 | ||||||||
Pre-tax margin | 53.2 | % | 38.3 | % | 49.4 | % | +14.9 | +3.8 | ||||||||
1 Gross margin is defined as total revenues less fund management and administration expenses and third-party sharing arrangements.
Recent Business Developments
Personnel
Product launches
Other
Assets Under Management and Net Inflows
U.S. listed ETF assets under management ("AUM") reached a record $61.3 billion at June 30, 2015, up 56.1% from December 31, 2014, primarily due to record inflows of $20.1 billion.
European listed AUM was $611.9 million, up 237.7% from $181.2 million at December 31, 2014 primarily due to $368.8 million of net inflows.
Performance
In evaluating the performance of our U.S. listed equity, fixed income and alternative ETFs against actively managed and index based mutual funds and ETFs, 90.4% of the $60.5 billion invested in our ETFs and 58% (32 of 55) of our ETFs outperformed their comparable Morningstar average since inception as of June 30, 2015.
For more information about WisdomTree ETFs including standardized performance, please click here or visit www.wisdomtree.com.
Second Quarter Financial Discussion
Revenues
Total revenues increased 84.8% from the second quarter of 2014 and 35.6% compared to the first quarter of 2015 to a record $81.6 million primarily due to higher average AUM from strong inflows. Revenues from our European listed ETPs increased to $0.9 million from $0.2 million in the second quarter of 2014 primarily due to higher inflows from the launch of WisdomTree UCITS ETFs as well as our Boost branded ETPs. The average advisory fee for our U.S. listed ETFs increased to 0.53% as compared to 0.51% for the second quarter of 2014 and 0.52% in the first quarter of 2015 due to the change in the mix of our AUM.
Margins
Gross margin for our U.S. listed ETFs, which is our total revenues less fund management and administration expenses and third party sharing arrangements, was 86.4% in the second quarter of 2015 as compared to 82.4% in the second quarter of 2014 and 83.2% in the first quarter of 2015. The increase was primarily due to higher average AUM.
Consolidated pre-tax margin was 50.2% in the second quarter of 2015. Pre-tax margin for our U.S. listed ETFs was 53.2% on average U.S. listed AUM of $61.2 billion.
Expenses
Total expenses increased 69.3% from the second quarter of 2014 and 3.8% compared to the first quarter of 2015 to $40.6 million. Included in the quarter was $2.9 million of expenses associated with our European listed ETPs.
This expense decreased 4.8% compared to the first quarter of 2015. Payroll related taxes were higher in the first quarter due to bonus payments and employees exercising stock options.
Balance Sheet
As of June 30, 2015, the Company had total assets of $265.2 million which consisted primarily of cash and cash equivalents and investments of $210.5 million. There were approximately 136.3 million shares of common stock outstanding as of June 30, 2015. Fully diluted weighted average shares outstanding were 138.0 million for the second quarter.
Quarterly Dividend and Stock 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 August 26, 2015 to stockholders of record as of the close of business on August 12, 2015. In addition, during the quarter, the Company purchased approximately 62,000 shares for $1.2 million in the second quarter of 2015.
Conference Call
WisdomTree will discuss its results and operational highlights during a conference call on Friday, July 31, 2015 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 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:
Our business is subject to many risks and uncertainties, including without limitation:
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, 2014.
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 $63.2 billion in assets under management globally.
WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide.
The full release, including all financial tables, is available in the attachment.
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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