ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes and the other financial information included elsewhere in this Report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below. For a more complete description of the risks noted above and other risks that could cause our actual results to materially differ from our current expectations, please see Item 1A. “Risk Factors” of this Report. We assume no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.
Introduction
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. 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, 2025, we managed approximately $144.5 billion in AUM. Our 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.
Our products are distributed across all major asset management industry channels, including banks, brokerage firms, registered investment advisers, institutional investors, private wealth managers and online brokers, primarily through our dedicated sales team. We believe technology is transforming how financial advisors conduct business, and through our Advisor and Portfolio Solutions programs we offer technology-enabled and research-driven solutions. These include portfolio construction, asset allocation, practice management services and digital tools to help advisors address technology challenges and scale their businesses.
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 financial services not only complements our core competencies, but will diversify our revenue streams and further contribute to our growth.
Executive Summary
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.
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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.
Additional 2025 business highlights include the following:
We launched 25 new European listed ETPs and 12 new U.S. listed ETFs spanning all our major product categories. This includes the launch of the WisdomTree Europe Defence UCITS ETF which accumulated $3.9 billion of AUM by December 31, 2025.
We achieved strong product performance, with over 74% of our U.S. listed AUM covered by Morningstar in the top two quartiles of peer performance on the 15-year timeframe and over 68% of our U.S. listed AUM covered by Morningstar in the top two quartiles of peer performance on the 5-year timeframe. In addition, approximately 40% were rated 4- or 5-star by Morningstar.
We completed a private offering of $475.0 million in aggregate principal amount of convertible senior notes due 2030, bearing interest at a rate of 4.625% and issued with a conversion price of $19.15 per share to facilitate the Ceres Acquisition. Concurrent with the issuance, we repurchased approximately 6.8 million shares of our common stock and extinguished $24.0 million aggregate principal amount of our 5.75% convertible senior notes due 2028 (the “2028 Notes”) (conversion price of $9.54 per share). We subsequently extinguished the remaining $1.8 million principal amount of these 2028 Notes in November 2025.
We appointed The Bank of New York Mellon Corporation to serve as our core banking-as-a-service (BaaS) infrastructure provider for WisdomTree Prime.
We made a strategic minority investment in, and entered into a multi-year collaboration with, Quorus, enabling certain of our investment strategies to be implemented in customizable, tax-efficient SMA formats, and our model portfolios to be made available with integrated, tax-aware trading and rebalancing capabilities, strengthening our presence in the growing custom portfolio solutions market.
We expanded our global footprint through a strategic collaboration with Korea Investment Management Co. Ltd. (KIM) based on the licensing of WisdomTree indexes in connection with the launch of a suite of innovative ETFs by KIM marketed under the KIM ACE label for the Korean market.
We made a $2.5 million strategic minority investment in AlphaBeta ETF Ltd to accelerate AI-driven ETF innovation by collaborating on the launch of AI-driven strategies in an ETF format.
In the U.S., we were named a “2025 Best Places to Work in Money Management” by Pensions & Investments for the sixth consecutive year and ranked first within the category for managers with 100-499 employees. In the U.K., we were named “Best Workplace” for medium-sized companies for the sixth consecutive year and a “2025 Best Workplace for Women” by Great Place to Work .
We received numerous industry awards and recognitions, including being named #58 on Fortune ’s list of America’s Most Innovative Companies, receiving multiple honors at the 2025 ETF Express European ETF Awards, and earning top distinctions for our digital asset and fintech solutions from leading industry organizations.
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Market Environment
The following chart reflects the annual returns of the broad-based equity indexes and gold prices over the last three years.
Source: FactSet
U.S. Listed ETF Industry Flows
U.S. listed ETF net flows for the year ended December 31, 2025 were $1,419.5 billion. U.S. equity and fixed income gathered the majority of those flows.
Source: Morningstar
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European Listed ETP Industry Flows
European listed ETP net flows were $246.6 billion for the year ended December 31, 2025. Equities and fixed income gathered the majority of those flows.
Source: Morningstar
Industry Developments
Asset Management – Consolidation
In the recent past, a number of acquisitions in the asset management industry have either been announced or completed. These trends have 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.
Components of Operating Revenue
Advisory fees
A significant portion of our revenues is comprised of advisory fees we earn from our ETPs. These advisory fees are calculated based on a percentage of the ETPs’ average daily net assets. As of the date of this Report, our weighted average fee rates by product category are as follows:
Commodity & Currency:
34bps
Leveraged & Inverse:
81bps
International Developed Market Equity:
47bps
Fixed Income:
17bps
U.S. Equity:
29bps
Alternatives:
39bps
Emerging Market Equity:
60bps
Cryptocurrency:
28bps
We determine the appropriate advisory fee to charge for our ETPs based on the cost of operating each ETP considering the types of securities the ETPs will hold, fees third-party service providers will charge us for operating the ETPs and our competitors’ fees for similar ETPs. From time to time, we implement voluntary waivers of a portion of our advisory fee. In addition, we earn a fee based on daily aggregate AUM of our ETPs in exchange for bearing certain fund expenses.
Our advisory fee revenues may fluctuate based on general stock market trends, which include market value appreciation or depreciation, currency fluctuations against the U.S. dollar, increased competition and level of inflows or outflows from our ETPs.
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.
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Other revenues
Other revenues include rebates from swap providers to our European listed ETPs, creation/redemption fees earned on our European non-UCITS products and fees from licensing our indexes and index data to third parties.
Components of Operating Expenses
Our operating expenses consist primarily of costs related to selling, operating and marketing our ETPs as well as the infrastructure needed to run our business.
Compensation and benefits
Employee compensation and benefits expenses are expensed when incurred and include salaries, incentive compensation, and related benefit costs. To attract and retain qualified personnel, we must maintain competitive employee compensation and benefit plans and amounts we pay may be affected by inflation. Virtually all of our employees receive incentive compensation which is variable and will fluctuate taking into consideration our operating and financial results, as well as individual performance and discretion.
Also included in compensation and benefits are costs related to equity awards granted to our employees. Our executive management and Board of Directors strongly believe that equity awards are an important part of our employees’ overall compensation package and that incentivizing our employees with equity in the Company aligns the interests of our employees with that of our stockholders. We use the fair value method in recording compensation expense for equity-based awards. Under the fair value method, compensation expense is measured at the grant date based on the estimated fair value of the award and is recognized as an expense over the vesting period.
Fund management and administration
Fund management and administration expenses are expensed when incurred and are comprised of the following costs we pay third-party service providers to operate our ETPs and Digital Funds:
portfolio management of our ETPs (sub-advisory);
fund accounting and administration;
custodial and storage services;
market making;
transfer agency;
accounting and tax services;
printing and mailing of shareholder materials;
index calculation;
indicative values;
distribution fees;
legal and compliance services;
exchange listing fees;
trustee fees and expenses;
preparation of regulatory reports and filings;
insurance;
certain local income taxes; and
other administrative services.
We are not responsible for extraordinary expenses, taxes and certain other expenses related to the funds.
We depend on a number of parties to provide critical administrative, custody and portfolio management services to our ETPs. The fees we pay our sub-advisers generally are the higher of the fixed minimums per fund, which range from $0 to $158 per year, or the percentage fee, which ranges between 0.01% and 0.20% per annum of average daily AUM at various breakpoint levels depending on the nature of the ETP. In addition, we pay certain costs based on transactions in our ETPs or based on inflow levels.
The fees we pay for accounting, tax, transfer agency, index calculation, indicative values and exchange listing are based on the number of products we have. The remaining fees are based on a combination of both AUM and number of funds, or as incurred.
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Marketing and advertising
Marketing and advertising expenses are recorded when incurred and include the following:
advertising and product promotion campaigns that are initiated to promote our existing and new ETPs as well as brand awareness;
marketing campaigns to attract WisdomTree Connect and WisdomTree Prime users;
development and maintenance of our website; and
creation and preparation of marketing materials.
Our discretionary advertising comprises the largest portion of this expense. In addition, we may incur expenditures in certain periods to attract inflows, the benefit of which may or may not be recognized from increases to our AUM in future periods. However, due to the discretionary nature of some of these costs, they can generally be reduced if there were a decline in the markets.
Sales and business development
Sales and business development expenses are recorded when incurred and include the following:
travel and entertainment or conference related expenses for our sales force;
market data services for our research team;
sales related software tools;
voluntary payment of certain costs associated with the creation or redemption of ETP shares, as we may elect from time to time; and
legal and other advisory fees associated with the development of new funds or business initiatives.
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 physically-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.
Professional fees
Professional fees are expensed when incurred and consist of fees we pay to corporate advisers including accountants, tax advisers, legal counsel, investment bankers, human resources or other consultants. Professional fees also include expenses we pay third-party service providers related to WisdomTree Prime and expenses incurred in response to an activist campaign. These expenses fluctuate based on our needs or requirements at the time. Certain of these costs are at our discretion and can fluctuate year to year.
Occupancy, communications and equipment
Occupancy, communications and equipment expense includes costs for our corporate headquarters in New York City as well as office related costs in our other locations.
Depreciation and amortization
Depreciation and amortization expense results from amortization of internally-developed software as well as depreciation on fixed assets, which are depreciated/amortized over three to five years.
Third-party distribution fees
Third-party distribution fees, which are expensed as incurred, include payments made to enable our products and models to be included on certain third-party platforms in exchange for commission-free trading or other preferential access. These expenses also include payments to our third-party marketing agents in Latin America and Israel.
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
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 granted to our directors.
Components of Other Income/(Expenses) of a Recurring Nature
Interest expense
We recognize interest expense using the effective interest method which includes the amortization of discounts, premiums and issuance costs.
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Revaluation/termination of deferred consideration–gold payments
Deferred consideration arose in connection with our acquisition of the European exchange-traded commodity, currency and leveraged-and-inverse business of ETFS Capital Limited, 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.
Interest income
Interest income, which is recognized on an accrual basis, arises from investing our corporate cash into interest-bearing financial instruments.
Other gains/(losses), net
Included herein are gains and losses arising from our financial instruments owned and investments, the sale of gold earned from advisory fees paid by physically-backed gold ETPs, foreign exchange and other miscellaneous items. Also included are losses arising from the release of tax-related indemnification assets upon the expiration of the statute of limitations, for which an equal and offsetting benefit is recognized in income tax expense.
Income Taxes
Our income tax expense consists of taxes due to federal, various state and local and certain foreign authorities.
Expense Guidance for the Year Ending December 31, 2026
Compensation to Revenue Ratio
Our compensation to revenue ratio for the year ending December 31, 2026 is currently estimated to range from 26% to 28% and takes into consideration 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, revenue and operating income growth, margin expansion and our stock price performance in relation to our peers.
Discretionary Spending
Discretionary spending includes marketing, sales, professional fees, occupancy and equipment, depreciation and amortization and other expenses. We currently estimate our discretionary spending for the year ending December 31, 2026 to range from $80.0 million to $86.0 million.
Not included in the guidance above is intangible asset amortization arising from the Ceres Acquisition of approximately $5.7 million.
Gross Margin
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, 2026, we currently estimate that our gross margin percentage will be 82.0% to 83.0% taking into consideration current AUM, revenue levels and anticipated fund launches. If AUM increases, we would anticipate further gross margin expansion.
Third-Party Distribution Expense
We currently estimate third-party distribution expense to be approximately $17.0 million to $19.0 million for the year ending December 31, 2026, which is dependent upon the AUM growth on our respective platforms.
Interest Expense
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”).
Not included in the guidance above is 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.
Interest Income
We currently estimate our interest income for the year ending December 31, 2026 to be approximately $8.0 million, based upon the magnitude of our forecasted interest earning 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.
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Income Tax Expense
We currently estimate that our consolidated normalized effective tax rate will be approximately 24.0% for the year ending December 31, 2026, taking into consideration the current distribution of profits among our U.S. and European businesses.
This estimated rate may change and is dependent upon our actual taxable income earned in relation to our forecasts as well as any other items which may arise that are not currently forecasted. Such items may include, but are not limited to, increases or decreases in valuation allowances and any stock-based compensation windfalls or shortfalls. Additional corporate tax legislation could also impact our normalized effective tax rate.
Weighted Average Diluted Shares
We currently estimate our weighted average diluted shares to be between 152.0 million and 157.0 million during the year ending December 31, 2026. This guidance 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 $11.04 per share for the 2026 Notes, $11.82 per share for the 3.25% Convertible Senior Notes due 2029 (the “2029 Notes”) and $19.15 per share for the 4.625% Convertible Senior Notes due 2030 (the “2030 Notes”).
Factors that May Impact our Future Financial Results
Our AUM is well diversified across products covering equity, commodities, fixed income, leveraged-and-inverse, cryptocurrency, currency, alternatives and private assets. As a result, our operating results are particularly exposed to investor sentiment toward investing in these products’ strategies and our ability to maintain AUM of these products, as well as the performance of these products.
Our revenues are also highly correlated to the level and relative mix of our AUM, as well as the fee rate associated with our products. Changes in product mix have led to a decline in our average advisory fee, which for the years ended December 31, 2023, 2024 and 2025 were 0.36%, 0.36% and 0.35%, respectively.
The chart below sets forth the asset mix of our products at December 31, 2023, 2024 and 2025:
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Key Operating Statistics
The following table presents key operating statistics that serve as indicators for the performance of our business:
Year Ended December 31,
GLOBAL PRODUCTS ($ in millions )
Beginning of period assets
Add: Digital assets—Jan. 1, 2025
Add: Assets acquired—Ceres Acquisition
Inflows/(outflows)
Market appreciation
End of period assets
Average assets during the period
Average ETP advisory fee during the period
Total revenue yield
Number of products-end of period
ETPs AND TOKENIZED PRODUCTS
U.S. LISTED ETFs ($ in millions )
Beginning of period assets
Inflows
Market appreciation
End of period assets
Average assets during the period
Number of ETFs—end of the period
EUROPEAN LISTED ETPs ($ in millions )
Beginning of period assets
Inflows/(outflows)
Market appreciation
End of period assets
Average assets during the period
Number of ETPs—end of the period
DIGITAL ASSETS ($ in millions )
Beginning of period assets
Add: Digital Assets—Jan. 1, 2025
Inflows
Market appreciation
End of period assets
Average assets during the period
Number of products—end of the period
PRIVATE ASSETS ($ in millions )
Beginning of period assets
Add: Assets acquired—Ceres Acquisition
Inflows
Market appreciation
End of period assets
Average assets during the period
Number of products—end of the period
ETPs AND TOKENIZED PRODUCT CATEGORIES ($ in millions )
U.S. Equity
Beginning of period assets
Add: Digital Assets—Jan. 1, 2025
Inflows
Market appreciation
End of period assets
Average assets during the period
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Year Ended December 31,
Commodity & Currency
Beginning of period assets
Add: Digital Assets—Jan. 1, 2025
Inflows/(outflows)
Market appreciation
End of period assets
Average assets during the period
International Developed Market Equity
Beginning of period assets
Inflows
Market appreciation
End of period assets
Average assets during the period
Fixed Income
Beginning of period assets
Add: Digital Assets—Jan. 1, 2025
Inflows/(outflows)
Market appreciation/(depreciation)
End of period assets
Average assets during the period
Emerging Market Equity
Beginning of period assets
(Outflows)/inflows
Market appreciation
End of period assets
Average assets during the period
Leveraged & Inverse
Beginning of period assets
Inflows/(outflows)
Market appreciation
End of period assets
Average assets during the period
Cryptocurrency
Beginning of period assets
Add: Digital Assets—Jan. 1, 2025
Inflows
Market (depreciation)/appreciation
End of period assets
Average assets during the period
Alternatives
Beginning of period assets
Inflows
Market appreciation
End of period assets
Average assets during the period
Headcount
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.
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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Selected Operating and Financial Information
Year Ended
December 31,
Percent
Change
Change
AUM (in millions)
Average AUM
Operating Revenues (in thousands)
Advisory fees
Management fees
Performance fees
Other revenues
Total revenues
Operating Revenues
Advisory fees
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
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.
Operating Expenses
Year Ended
December 31,
Percent
(in thousands)
Change
Change
Compensation and benefits
Fund management and administration
Marketing and advertising
Sales and business development
Professional fees
Occupancy, communications and equipment
Depreciation and amortization
Third-party distribution fees
Acquisition-related costs
Other
Total operating expenses
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Year Ended
December 31,
As a Percent of Revenues:
Compensation and benefits
Fund management and administration
Marketing and advertising
Sales and business development
Professional fees
Occupancy, communications and equipment
Depreciation and amortization
Third-party distribution fees
Acquisition-related costs
Other
Total operating expenses
Compensation and benefits
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
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
Marketing and advertising expense was essentially unchanged from the year ended December 31, 2024.
Sales and business development
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
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
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
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
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.
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Other
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.
Other Income/(Expenses)
Year Ended
December 31,
Percent
(in thousands)
Change
Change
Interest expense
Interest income
Loss on extinguishment of convertible notes
Remeasurement of contingent consideration
Other gains, net
Total other income/(expenses), net
Year Ended December 31,
As a Percent of Revenues:
Interest expense
Interest income
Loss on extinguishment of convertible notes
Remeasurement of contingent consideration
Other gains, net
Total other income/(expenses), net
Interest expense
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
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.
Remeasurement of contingent consideration
Contingent consideration related to the Ceres Acquisition increased from $11.1 million on October 1, 2025 to $11.8 million at December 31, 2025 resulting in a $0.7 million loss on remeasurement recognized during the year ended December 31, 2025. See Note 11 to our Consolidated Financial Statements for additional information.
Other gains, net
Other gains, net were $0.9 million and $2.0 million during the years ended December 31, 2024 and 2025, respectively. The current year includes net gains on our financial instruments owned of $1.9 million and $1.2 million of foreign currency remeasurement losses on U.S. dollars held by foreign subsidiaries. Gains and losses also generally arise from the sale of gold earned from advisory fees paid by our physically-backed gold ETPs, foreign exchange fluctuations and other miscellaneous items.
Income Taxes
Our effective income tax rate for 2025 was 23.3%, resulting in an income tax expense of $33.1 million. Our tax rate differs from the federal statutory rate of 21.0% primarily due to a non-deductible loss on extinguishment of convertible notes and state and local income taxes. These items were partly offset by a reduction in the valuation allowance on capital losses and a lower tax rate on foreign earnings.
Our effective income tax rate for 2024 was 30.1%, resulting in an income tax expense of $28.7 million. Our tax rate differs from the federal statutory rate of 21.0% primarily due to a non-deductible loss on extinguishment of convertible notes, a non-deductible civil money penalty of $4.0 million in connection with the SEC ESG Settlement and non-deductible executive compensation. These items were partly offset by a lower tax rate on foreign earnings.
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Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Selected Operating and Financial Information
Year Ended
December 31,
Percent
Change
Change
AUM (in millions)
Average AUM
Operating Revenues (in thousands)
Advisory fees
Other revenues
Total revenues
Operating Revenues
Advisory fees
Advisory fee revenues increased 18.6% from $333.2 million during the year ended December 31, 2023 to $395.4 million during the year ended December 31, 2024 due to higher average AUM. Our average advisory fee remained 0.36%, unchanged from the year ended December 31, 2023.
Other revenues
Other revenues increased 104.8% from $15.8 million during the year ended December 31, 2023 to $32.4 million during the year ended December 31, 2024 due to higher other revenues attributable to our European listed ETPs and $4.3 million of other revenues related to legal and other related expenses incurred in connection with the SEC ESG Settlement that were covered by insurance.
Operating Expenses
Year Ended
December 31,
Percent
(in thousands)
Change
Change
Compensation and benefits
Fund management and administration
Marketing and advertising
Sales and business development
Contractual gold payments
Professional fees
Occupancy, communications and equipment
Depreciation and amortization
Third-party distribution fees
Other
Total operating expenses
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Year Ended
December 31,
As a Percent of Revenues:
Compensation and benefits
Fund management and administration
Marketing and advertising
Sales and business development
Contractual gold payments
Professional fees
Occupancy, communications and equipment
Depreciation and amortization
Third-party distribution fees
Other
Total operating expenses
Compensation and benefits
Compensation and benefits expense increased 10.7% from $109.5 million during the year ended December 31, 2023 to $121.3 million during the year ended December 31, 2024 due to higher stock-based compensation, incentive compensation and headcount. Headcount was 303 and 313 at December 31, 2023 and 2024, respectively.
Fund management and administration
Fund management and administration expense increased 17.7% from $71.3 million during the year ended December 31, 2023 to $84.0 million during the year ended December 31, 2024 primarily due to higher average AUM. We had 76 U.S. listed ETFs and 261 European listed ETPs at December 31, 2023 compared to 78 U.S. listed ETFs and 275 European listed ETPs at December 31, 2024.
Marketing and advertising
Marketing and advertising expense increased 19.0% from $17.3 million during the year ended December 31, 2023 to $20.5 million during the year ended December 31, 2024 primarily resulting from higher spending related to our U.S. listed and digital products.
Sales and business development
Sales and business development expense increased 9.1% from $13.6 million during the year ended December 31, 2023 to $14.8 million during the year ended December 31, 2024 primarily resulting from increases in travel and events spending.
Contractual gold payments
There was no contractual gold payments expense recognized during the year ended December 31, 2024 due to the termination of our deferred consideration—gold payments obligation on May 10, 2023. See Note 9 to our Consolidated Financial Statements for additional information.
Professional fees
Professional fees increased 11.2% from $19.0 million during the year ended December 31, 2023 to $21.1 million during the year ended December 31, 2024 due to $4.3 million of legal and other related expenses incurred in connection with the SEC ESG Settlement that were covered by insurance, partly offset by lower expenses incurred in response to an activist campaign.
Occupancy, communications and equipment
Occupancy, communications and equipment expense increased 14.1% from $4.7 million during the year ended December 31, 2023 to $5.3 million during the year ended December 31, 2024 due to the increased cost of renewed office leases.
Depreciation and amortization
Depreciation and amortization expense increased 100.9% from $0.9 million during the year ended December 31, 2023 to $1.8 million during the year ended December 31, 2024 due to higher amortization of software development costs.
Third-party distribution fees
Third-party distribution fees increased 18.8% from $9.4 million during the year ended December 31, 2023 to $11.1 million during the year ended December 31, 2024 primarily due to growth in AUM across our various platforms, as well as new platform relationships that expanded our distribution reach.
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Other
Other expenses increased 6.8% from $9.9 million during the year ended December 31, 2023 to $10.5 million during the year ended December 31, 2024 primarily due to higher insurance and travel-related expenses.
Other Income/(Expenses)
Year Ended
December 31,
Percent
(in thousands)
Change
Change
Interest expense
Gain on revaluation/termination of deferred consideration—gold payments
Interest income
Impairments
Loss on extinguishment of convertible notes
Other gains/(losses), net
Total other income/(expenses), net
Year Ended December 31,
As a Percent of Revenues:
Interest expense
Gain on revaluation/termination of deferred consideration—gold payments
Interest income
Impairments
Loss on extinguishment of convertible notes
Other gains/(losses), net
Total other income/(expenses), net
Interest expense
Interest expense increased 24.1% from $15.2 million during the year ended December 31, 2023 to $18.9 million during the year ended December 31, 2024 due to a higher level of debt outstanding, partly offset by a lower average interest rate.
Our effective interest rate on our outstanding Convertible Notes during the years ended December 31, 2023 and 2024 was 4.9% and 4.5%, respectively.
Gain on revaluation/termination of deferred consideration
No gains or losses on revaluation/termination of deferred consideration—gold payments were recognized during the year ended December 31, 2024, as this obligation was terminated on May 10, 2023 for approximately $137.0 million. See Note 9 to our Consolidated Financial Statements for additional information.
Interest income
Interest income increased 65.4% from $4.1 million during the year ended December 31, 2023 to $6.8 million during the year ended December 31, 2024 due to a higher level of interest-bearing assets.
Impairments
No impairments were recognized during the year ended December 31, 2024, while during the year ended December 31, 2023, we recognized a non-cash impairment charge of $7.9 million primarily related to our investment in Securrency, Inc. upon the sale of Securrency, Inc. to an unrelated third party. (See Notes 7 and 26 to our Consolidated Financial Statements).
Other gains/(losses), net
Other gains/(losses), net were ($1.6) million and $0.9 million during the years ended December 31, 2023 and 2024, respectively. The year ended December 31, 2024 includes a $4.0 million civil money penalty in connection with the SEC ESG Settlement. Also included are net gains of $4.9 million and net losses of $1.1 million on our financial instruments owned and our investments, respectively. Gains and losses also generally arise from the sale of gold earned from advisory fees paid by our physically-backed gold ETPs, foreign exchange fluctuations and other miscellaneous items.
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Income Taxes
Our effective income tax rate for 2024 was 30.1%, resulting in an income tax expense of $28.7 million. Our tax rate differs from the federal statutory rate of 21.0% primarily due to a non-deductible loss on extinguishment of convertible notes, a non-deductible civil money penalty of $4.0 million in connection with the SEC ESG Settlement and non-deductible executive compensation. These items were partly offset by a lower tax rate on foreign earnings.
Our effective income tax rate for 2023 was 13.8%, resulting in income tax expense of $16.5 million. The effective tax rate differs from the federal statutory rate of 21% primarily due to a non-taxable gain on revaluation/termination of deferred consideration, a reduction in unrecognized tax benefits associated with the release of a tax-related indemnification asset and a lower tax rate on foreign earnings. These items were partly offset by a non-deductible loss on extinguishment of our 4.25% Convertible Senior Notes due 2023 during the first quarter of 2023, an increase in the deferred tax asset valuation allowance on losses recognized on our investments and non-deductible executive compensation.
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Quarterly Results
The following tables set forth our unaudited consolidated quarterly statement of operations data, both in dollar amounts and as a percentage of total revenues, and our unaudited consolidated quarterly operating data for the quarters in 2025 and 2024. In our opinion, this unaudited information has been prepared on substantially the same basis as the consolidated financial statements appearing elsewhere in this Report and includes all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the unaudited consolidated quarterly data. The unaudited consolidated quarterly data should be read together with the consolidated financial statements and related notes included elsewhere in this Report. The results for any quarter are not necessarily indicative of results for any future period, and you should not rely on them as such.
(in thousands, except per share amounts)
Operating Revenues:
Advisory fees
Management fees
Performance fees
Other revenues
Total revenues
Operating Expenses:
Compensation and benefits
Fund management and administration
Marketing and advertising
Sales and business development
Professional fees
Occupancy, communications and equipment
Depreciation and amortization
Third-party distribution fees
Acquisition-related costs
Other
Total operating expenses
Operating income
Other Income/(Expenses):
Interest expense
Interest income
Loss on extinguishment of convertible notes
Remeasurement of contingent consideration
Other gains and losses, net
Income before income taxes
Income tax expense
Net income/(loss)
Earnings/(loss) per share—basic
Earnings/(loss) per share—diluted
Dividends per common share
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Percent of Total Revenues
Operating Revenues
Advisory fees
Management fees
Performance fees
Other revenues
Total revenues
Operating Expenses
Compensation and benefits
Fund management and administration
Marketing and advertising
Sales and business development
Professional fees
Occupancy, communications and equipment
Depreciation and amortization
Third-party distribution fees
Acquisition-related costs
Other
Total operating expenses
Operating income
Other Income/(Expenses)
Interest expense
Interest income
Loss on extinguishment of convertible notes
Remeasurement of contingent consideration
Other gains and losses, net
Income before income taxes
Income tax expense
Net income/(loss)
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Operating Statistics
GLOBAL PRODUCTS ($ in millions )
Beginning of period assets
Add: Digital assets—Jan. 1, 2025
Add: Assets acquired—Ceres Acquisition
(Outflows)/inflows
Market appreciation/(depreciation)
End of period assets
Average assets during the period
Average ETP advisory fee during the period
Total revenue yield
Number of products-end of period
ETPs AND TOKENIZED PRODUCTS
U.S. LISTED ETFs ($ in millions )
Beginning of period assets
(Outflows)/inflows
Market appreciation/(depreciation)
End of period assets
Average assets during the period
Number of ETFs—end of the period
EUROPEAN LISTED ETPs ($ in millions )
Beginning of period assets
Inflows/(outflows)
Market appreciation/(depreciation)
End of period assets
Average assets during the period
Number of ETPs—end of the period
DIGITAL ASSETS ($ in millions )
Beginning of period assets
Add: Digital Assets—Jan. 1, 2025
Inflows
Market (depreciation)/appreciation
End of period assets
Average assets during the period
Number of products—end of the period
PRIVATE ASSETS ($ in millions )
Beginning of period assets
Add: Assets acquired—Ceres Acquisition
Inflows
Market appreciation
End of period assets
Average assets during the period
Number of products—end of the period
PRODUCT CATEGORIES ($ in millions )
U.S. Equity
Beginning of period assets
Add: Digital Assets—Jan. 1, 2025
Inflows
Market appreciation/(depreciation)
End of period assets
Average assets during the period
Commodity & Currency
Beginning of period assets
Add: Digital Assets—Jan. 1, 2025
Inflows/(outflows)
Market appreciation/(depreciation)
End of period assets
Average assets during the period
International Developed Market Equity
Beginning of period assets
Inflows/(outflows)
Market appreciation/(depreciation)
End of period assets
Average assets during the period
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Fixed Income
Beginning of period assets
Add: Digital Assets—Jan. 1, 2025
(Outflows)/inflows
Market (depreciation)/appreciation
End of period assets
Average assets during the period
Emerging Market Equity
Beginning of period assets
(Outflows)/inflows
Market appreciation/(depreciation)
End of period assets
Average assets during the period
Leveraged & Inverse
Beginning of period assets
(Outflows)/inflows
Market appreciation/(depreciation)
End of period assets
Average assets during the period
Cryptocurrency
Beginning of period assets
Add: Digital Assets—Jan. 1, 2025
(Outflows)/inflows
Market (depreciation)/appreciation
End of period assets
Average assets during the period
Alternatives
Beginning of period assets
Inflows
Market appreciation/(depreciation)
End of period assets
Average assets during the period
Headcount
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
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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. 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. The non-GAAP financial measurements contained in this Report include:
Adjusted Net Income and Diluted Earnings per Share.
We disclose adjusted 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 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: Losses on extinguishment of convertible notes, acquisition-related costs, changes in deferred tax asset valuation allowance, imputed interest on our payable to GBH, gains and losses recognized on our investments, a civil money penalty in connection with the SEC ESG Settlement, expenses incurred in response to an activist campaign, gain on revaluation/termination of deferred consideration, impairments, remeasurement of contingent consideration payable to us from the sale of our former Canadian ETF business and litigation expenses associated with certain provisions of our Stockholder Rights Agreement, dated as of March 17, 2023, as amended, are excluded when calculating our non-GAAP financial measurements.
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Years Ended December 31,
Adjusted Net Income and Diluted Earnings per Share:
Net income, as reported
Add back: Loss on extinguishment of convertible notes, net of income taxes
Add back: Acquisition-related costs, net of income taxes
Deduct: Tax windfalls upon vesting and exercise of stock-based compensation awards
(Deduct)/add back: (Decrease)/increase in deferred tax valuation allowance on capital losses
(Deduct)/add back: (Gains)/Losses on financial instruments owned, at fair value, net of income taxes
Add back: Imputed interest on payable to GBH, net of income taxes
Add back: Amortization of intangible assets arising from the Ceres Acquisition, net of income taxes
Add back: Foreign currency remeasurement losses on U.S. dollar balances, net of income taxes
Add back: Increase in fair value of contingent consideration, net of income taxes
(Deduct)/add back: (Gains)/losses recognized on investments, net of income taxes
Add back: Civil money penalty in connection with SEC ESG Settlement
Add back: Expenses incurred in response to an activist campaign, net of income taxes
Deduct: Gain on revaluation/termination of deferred consideration
Add back: Impairments, net of income taxes
Deduct: Gain recognized from the sale of Canadian ETF business, including remeasurement of contingent consideration
Add back: Litigation expenses associated with certain provisions of the Stockholder Rights Agreement, net of income taxes
Adjusted net income
Deduct: Income distributed to participating securities
Deduct: Undistributed income allocable to participating securities
Adjusted net income available to common stockholders
Weighted average diluted shares, excluding participating securities (See Note 20 to our Consolidated Financial Statements)
Adjusted earnings per share—diluted
During the year ended December 31, 2025, we recognized an excise tax of $0.7 million on stock repurchases. During the years ended December 31, 2024 and 2023, we recognized a loss of $13.2 million (which includes an excise tax of $1.8 million) and a gain of $8.0 million, respectively, related to the repurchase of the Series A Non-Voting Convertible Preferred Stock (“Series A Preferred Stock”) and the Series C Preferred Stock. These items are excluded from net income, but are required to be added to net income to arrive at income available to common stockholders in the calculation of earnings per share under U.S. GAAP.
Liquidity and Capital Resources
The following table summarizes key information regarding our liquidity, capital resources and use of capital to fund our operations:
December 31,
December 31,
Balance Sheet Data (in thousands):
Cash and cash equivalents
Financial instruments owned, at fair value
Accounts receivable
Total: Liquid assets
Less: Total current liabilities
Less: Other assets—seed capital (WisdomTree Digital Funds)
Less: Regulatory capital requirements
Total: Available liquidity
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Year Ended December 31,
Cash Flow Data (in thousands):
Operating cash flows
Investing cash flows
Financing cash flows
Foreign exchange rate effect
Increase/(decrease) in cash and cash equivalents
Liquidity
We consider our available liquidity to be our liquid assets, less our current liabilities, seed capital in WisdomTree Digital Funds and regulatory capital requirements of certain of our subsidiaries. Liquid assets consist of cash, cash equivalents and restricted cash, financial instruments owned, at fair value, accounts receivable and securities held-to-maturity. Our financial instruments owned, at fair value are highly liquid investments. Accounts receivable are current assets and primarily represent receivables from advisory fees we earn from our ETPs. Our current liabilities consist primarily of payments owed to vendors and third parties in the normal course of business and accrued incentive compensation for employees.
Cash, cash equivalents and restricted cash increased $130.5 million during the year ended December 31, 2025 due to $475.0 million of proceeds from the issuance of the 2030 Notes, $147.9 million of net cash provided by operating activities, $12.6 million of proceeds from the sale of financial instruments owned, at fair value and $5.6 million from other activities. These increases were partly offset by $270.3 million paid for the Ceres Acquisition, $102.7 million used to repurchase our common stock, $39.3 million used to repurchase our 2028 Notes, $32 million used to purchase financial instruments owned, at fair value, $20.1 million used to purchase investments, $17.3 million used to pay dividends, $14.8 million paid to GBH, $11.1 million used to pay convertible notes issuance costs and $3.0 million used to pay for software development.
Cash, cash equivalents and restricted cash increased $51.9 million during the year ended December 31, 2024 due to $345.0 million of proceeds from the issuance of the 2029 Notes, $113.5 million of net cash provided by operating activities and $48.1 million of proceeds from the sale of financial instruments owned, at fair value. These increases were partially offset by $143.8 million used to repurchase the Series A Preferred Stock, $132.7 million to repurchase a portion of our 2028 Notes, $69.4 million used to purchase financial instruments owned, at fair value, $62.9 million used to repurchase our common stock, $19.0 million used to pay dividends, $14.8 million paid to GBH, $7.7 million used to pay convertible notes issuance costs, $2.3 million used to pay for software development and $2.1 million used in other activities.
Cash, cash equivalents and restricted cash decreased $2.8 million during the year ended December 31, 2023 due to $184.3 million used to repurchase and settle our 4.25% Convertible Senior Notes due 2023, $57.4 million used to purchase financial instruments owned, at fair value, $50.0 million used to terminate our deferred consideration—gold payments obligation, $40.0 million used to repurchase our Series C Preferred Stock, $20.1 million used to pay dividends on our common stock, $11.2 million used to purchase investments, $3.6 million used to repurchase our common stock, $3.5 million used to pay issuance costs in respect of our 2028 Notes, $2.1 million used for software development and $1.2 million used in other activities. These decreases were partly offset by $130.0 million of proceeds from the issuance of our 2028 Notes, $123.6 million of proceeds from the sale of financial instruments owned, at fair value, $85.6 million of net cash provided by operating activities, $28.8 million of proceeds from the exit from our investment in Securrency, Inc. in connection with the sale of Securrency, Inc. to an unaffiliated third party, $1.5 million from receipt of contingent consideration related to the sale of our Canadian ETF business, and $1.1 million from other activities.
Convertible Notes
We have the following convertible notes outstanding as of December 31, 2025:
$150.0 million in aggregate principal amount of the 2026 Notes;
$345.0 million in aggregate principal amount the 2029 Notes; and
$475.0 million in aggregate principal amount of the 2030 Notes.
Each class of notes was issued pursuant to indentures dated as of the issuance dates between us and U.S. Bank Trust Company, National Association, as trustee (either initially or as successor to U.S. Bank National Association, the “Trustee”), in private offerings to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.
In connection with the issuance of the 2030 Notes, we repurchased $24.0 million in aggregate principal amount of our 2028 Notes. As a result of this repurchase, we recognized a loss on extinguishment of $13.0 million during the year ended December 31, 2025. Additionally, on November 25, 2025, we redeemed the remaining $1.8 million in aggregate principal amount of the 2028 Notes, resulting in a loss on extinguishment of $0.8 million.
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As of December 31, 2025, we had an aggregate principal amount of $970.0 million outstanding of the 2026 Notes, the 2029 Notes and the 2030 Notes (collectively, the “Convertible Notes”).
Key terms of the Convertible Notes are as follows:
2026 Notes
2029 Notes
2030 Notes
Principal outstanding
Issuance date
June 14, 2021
August 13, 2024
August 14, 2025
Maturity date (unless earlier converted, repurchased or redeemed)
June 15, 2026
August 15, 2029
August 15, 2030
Interest rate
Initial conversion price
Initial conversion rate
Redemption price
Interest rate: Payable semiannually in arrears on February 15 and August 15 of each year for the 2030 Notes and the 2029 Notes and on June 15 and December 15 of each year for the 2026 Notes.
Conversion price: Convertible at an initial conversion rate into shares of our common stock, per $1,000 principal amount of notes (equivalent to an initial conversion price set forth in the table above), subject to adjustment.
Conversion: Holders may convert at their option at any time prior to the close of business on the business day immediately preceding May 15, 2030, May 15, 2029 and March 15, 2026 for the 2030 Notes, the 2029 Notes and the 2026 Notes, respectively, only under the following circumstances: (i) if the last reported sale price of our common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the respective Convertible Notes on each applicable trading day; (ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sales price of our common stock and the conversion rate on each such trading day; (iii) upon a notice of redemption delivered by us in accordance with the terms of the indentures but only with respect to the Convertible Notes called (or deemed called) for redemption; or (iv) upon the occurrence of specified corporate events. On or after May 15, 2030, May 15, 2029 and March 15, 2026 in respect of the 2030 Notes, the 2029 Notes and the 2026 Notes, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances.
Cash settlement of principal amount: Upon conversion, we will pay cash up to the aggregate principal amount of the Convertible Notes to be converted. At our election, we will also settle the conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted in either cash, shares of our common stock or a combination of cash and shares of common stock.
Redemption price: We may redeem for cash all or any portion of the Convertible Notes, at our option, on or after August 20, 2027, August 20, 2026 and June 20, 2023 in respect of the 2030 Notes, the 2029 Notes and the 2026 Notes, respectively, and on or prior to the 45th scheduled trading day with respect to the 2030 Notes and the 55th scheduled trading day with respect to the 2029 Notes and the 2026 Notes immediately preceding the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price for the respective Convertible Notes then in effect for at least 20 trading days, including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption, at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date. No sinking fund is provided for the Convertible Notes.
Limited investor put rights: Holders of the Convertible Notes have the right to require us to repurchase for cash all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain change of control transactions or liquidation, dissolution or common stock delisting events.
Conversion rate increase in certain customary circumstances: In certain circumstances, conversions in connection with a “make-whole fundamental change” (as defined in the indentures) or conversions of Convertible Notes called (or deemed called) for redemption may result in an increase to the conversion rate, provided that the conversion rate will not exceed 75.7003 shares, 103.6269 shares and 144.9275 shares of the Company’s common stock per $1,000 principal amount of the 2030 Notes, the 2029 Notes and the 2026 Notes, respectively (the equivalent of 93,448,048 shares of our common stock based on the aggregate principal amount of Convertible Notes outstanding), subject to adjustment.
Seniority and Security: The Convertible Notes rank equal in right of payment and are our senior unsecured obligations.
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The indentures contain customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the respective holders of not less than 25% in aggregate principal amount of the respective series of Convertible Notes outstanding may declare the entire principal amount of all such respective Convertible Notes to be repurchased, plus any accrued special interest, if any, to be immediately due and payable.
Capital Resources
Our principal source of financing is our operating cash flow. We believe that current cash flows generated by our operating activities and existing cash balances should be sufficient for us to fund our operations for the foreseeable future.
Our ability to satisfy our contractual obligations as they arise are discussed in the section titled “Contractual Obligations” below.
Use of Capital
Our business does not require us to maintain a significant cash position. However, certain of our subsidiaries are required to maintain a minimum level of regulatory capital, which at December 31, 2025 was approximately $38.9 million in the aggregate. Notwithstanding these regulatory capital requirements, we expect that our main uses of cash will be to fund the ongoing operations of our business. We also maintain a capital return program which includes a $0.03 per share quarterly cash dividend and authority to purchase our common stock through April 27, 2028, including purchases to offset future equity grants made under our equity plans and purchases made in open market or privately negotiated transactions.
During the year ended December 31, 2025, we repurchased 8,096,862 shares of our common stock under the repurchase program for an aggregate cost of $102.7 million. Currently, $250.0 million remains under this program for future purchases. In addition, on August 13, 2024, we repurchased all of our then-outstanding Series A Preferred Stock, which was convertible into 14,750,000 shares of our common stock, from ETFS Capital for aggregate cash consideration of approximately $143.8 million.
Contractual Obligations
Convertible Notes
We currently have $970.0 million in aggregate principal amount of Convertible Notes outstanding, of which $150.0 million, $345.0 million and $475 million are scheduled to mature on June 15, 2026, August 15, 2029 and August 15, 2030, in respect of the 2026 Notes, the 2029 Notes and the 2030 Notes, respectively, unless earlier converted, repurchased or redeemed. Conditional conversions or a requirement to repurchase the Convertible Notes upon the occurrence of a fundamental change may accelerate payment.
The Convertible Notes require cash settlement of up to the principal amount, while settlement of the conversion obligation in excess of the aggregate principal amount may be satisfied in either cash, shares of our common stock or a combination of cash and shares of our common stock. We may settle and/or refinance these obligations when due.
See the section titled “Issuance of Convertible Notes” above for additional information.
Contingent Consideration
Pursuant to the Ceres Purchase Agreement, up to $225.0 million of additional consideration is payable in 2030, contingent upon Ceres achieving a compound annual growth rate (“CAGR”) in revenue of 12% to 22% during the earnout measurement period of January 1, 2025 through December 31, 2029, as follows:
If the revenue CAGR for the earnout period is equal to or less than 12%, then the aggregate amount of the earnout consideration will be $0;
If the revenue CAGR for the earnout period is greater than 12% but less than 22%, then the aggregate amount of the earnout consideration will be pro-rated using straight-line interpolation between $0 and $225.0 million; and
If the revenue CAGR for the earnout period is equal to or greater than 22%, then the aggregate amount of the earnout consideration will be $225.0 million.
We have determined that the earnout should be classified as contingent consideration as (i) continuing employment is not a condition for payment (except as described below), (ii) non-employee sellers are entitled to similar payments based upon their relative ownership percentages and (iii) the payment formula described above is tied to the valuation of the acquired business. Under ASC 805, contingent consideration must be recognized at the acquisition date as part of the consideration transferred for the acquired business.
In connection with the Ceres Acquisition, the sellers established a retention bonus plan for certain Ceres employees pursuant to which the greater of $3.05 million or 10% of any earnout consideration in excess of $50.0 million will be forfeited by the sellers and paid to participating employees, contingent upon continued employment through earnout payment date. Any amounts forfeited due to employee attrition revert to the sellers. This compensation will be recognized over the service period with an equal and offsetting receivable from the sellers.
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Deferred Consideration–Gold Payments
On May 10, 2023, we entered into and closed on a Sale, Purchase and Assignment Deed to terminate our obligations relating to the contractual gold payments. Pursuant to that agreement, we paid consideration totaling $136.9 million, including an aggregate of $50.0 million in cash and the issuance of 13,087 shares of Series C Preferred Stock (valued at $86.9 million, based on the closing price of our common stock on May 9, 2023 of $6.64 per share), which was convertible into 13,087,000 shares of our common stock. The Series C Preferred Stock was subsequently repurchased on November 20, 2023 as described in “Payable to GBH” below. See Note 12 to our Consolidated Financial Statements for additional information.
Payable to GBH
On November 20, 2023, we repurchased our Series C Preferred Stock from GBH for aggregate cash consideration of approximately $84.4 million. Under the terms of the transaction, we have paid GBH $69.6 million to date, with the remainder of the purchase price payable on the third anniversary of the closing date. The implied price per share was $6.02 when considering the interest-free financing element of the transaction.
Operating Leases
Total future minimum lease payments with respect to our operating lease liabilities were $3.3 million at December 31, 2025. Cash flows generated by our operating activities and existing cash balances should be sufficient to satisfy the future minimum lease payments. See Note 13 to our Consolidated Financial Statements for additional information.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet financing or other arrangements and have neither created nor are party to any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business.
Critical Accounting Policies and Estimates
Business Combinations
We account for business combinations under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, which requires an allocation of the consideration paid by us to the identifiable assets, intangible assets and liabilities based on the estimated fair values as of the closing date of the acquisition. Contingent consideration obligations that are elements of consideration transferred are recognized at the acquisition date as part of the fair value transferred in exchange for the acquired business and are remeasured to fair value each reporting period. The excess of the fair value of purchase price over the fair values of the identifiable assets, intangible assets and liabilities is recorded as goodwill.
Goodwill and Intangible Assets
Goodwill is the excess of the purchase price over the fair values of the identifiable net assets at the acquisition date. We test goodwill for impairment at least annually and at the time of a triggering event requiring re-evaluation, if one were to occur. Goodwill is considered impaired when the estimated fair value of the reporting unit that was allocated the goodwill is less than its carrying value. If the estimated fair value of such reporting unit is less than its carrying value, goodwill impairment is recognized based on that difference, not to exceed the carrying amount of goodwill. A reporting unit is an operating segment or a component of an operating segment provided that the component constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component.
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 30 th . When performing our goodwill impairment test, we consider a qualitative assessment, when appropriate, and the market approach and our 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.
Indefinite-lived intangible assets are tested for impairment at least annually and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Indefinite-lived intangible assets are impaired if their estimated fair value is less than their carrying value. We may rely on a qualitative assessment when performing our intangible asset impairment test. Otherwise, the impairment evaluation is performed at the lowest level of reasonably identifiable cash flows independent of other assets. The annual impairment testing date for our intangible assets is November 30 th . The results of our most recent analysis identified no indicators of impairment to be recognized based upon a quantitative assessment (discounted cash flow analysis) which relied upon significant unobservable inputs including projected revenue growth rates of 3.0% and a weighted average cost of capital of 10.3%.
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Investments
We account for equity investments that do not have a readily determinable fair value under the measurement alternative prescribed within Accounting Standards Codification Topic 321, Investments – Equity Securities , to the extent such investments are not subject to consolidation or the equity method. Under the measurement alternative, these financial instruments are carried at cost, less any impairment (assessed quarterly), plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. In addition, income is recognized when dividends are received only to the extent they are distributed from net accumulated earnings of the investee. Otherwise, such distributions are considered returns of investment and are recorded as a reduction of the cost of the investment. See Note 7 to our Consolidated Financial Statements for information.
Investments in debt instruments are accounted for at fair value, with changes in fair value reported in other income/(expenses).
Revenue Recognition
We earn a significant portion of our revenues in the form of advisory fees from our ETPs and recognize this revenue over time, as the performance obligation is satisfied. Advisory fees are based on a percentage of the ETPs’ average daily net assets. Progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which we have a right to invoice.
We earn management fees in exchange for Ceres providing investment advisory and other management services to Ceres Farms. Management fees are generally calculated as a stated percentage of members’ capital account balances as of the last day of each calendar quarter, subject to adjustment for any contractual waivers as well as contributions and redemptions arising in any particular quarter. Management fees are recognized as revenue over time, as the performance obligation is satisfied.
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. 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.
Other revenues are earned from swap providers associated with certain of our European listed ETPs, the nature of which are based on a percentage of the ETPs’ average daily net assets. We also earn transaction-based income on flows associated with certain European listed ETPs. There is no significant judgment in calculating amounts due, which are invoiced monthly or quarterly in arrears and are not subject to any potential reversal. Progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which we have a right to invoice.
