GlobeNewswire Inc | Jan 29, 2021 07:00AM EST

January 29, 2021

NEW YORK, Jan. 29, 2021 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (NASDAQ: WETF) today reported financial results for the fourth quarter of 2020.

($13.5) million net loss ($9.21 million net income, as adjusted), see Non-GAAP Financial Measurements for additional information.

$22.4 million of non-cash charges, associated with the revaluation of deferred consideration gold payments.

$67.4 billion of ending AUM, an increase of 11.0% arising from market appreciation and net inflows.

$881 million of net inflows, driven by inflows into our emerging markets equity and U.S. equity products, partly offset by outflows from our fixed income, commodity, international developed market equity and leveraged & inverse products.

0.41% average global advisory fee, a decrease of 1 basis point due to AUM mix shift.

$67.1 million of operating revenues, an increase of 3.7% primarily due to higher average AUM, partly offset by a lower average global advisory fee.

75.6% gross margin1, a 0.9 point decrease primarily due to Brexit and fund rebalancing costs.

19.2% operating income margin, a 3.6 point decrease primarily due to higher operating expenses, partly offset by higher revenues.

$0.03 quarterly dividenddeclared, payable on February 24, 2021 to stockholders of record as of the close of business on February 10, 2021.

Update from Jonathan Steinberg, WisdomTree CEO

?Our business has more than navigated the global pandemic, we have emergedstronger. Not only have we adapted to the remote working environment withoutmissing a beat, but we also gleaned new operating efficiencies and competitivestrengths that represent real value for shareholders. These strengths include:Our leading European-listed Bitcoin ETP approaching an inflection point; thebuilding of a profitable, fast-growing and complementary UCITS platform; andthe achievement of true diversification, powered by a leadership position ingold.

?We ended the year with momentum which we are carrying into the new year. Ourdigital assets initiatives reinforce and expand upon our core businessstrengths, as WisdomTree is aggressively pursuing and is well-positioned forsuccess in this growing space. In 2020, we set our strategy for theseinitiatives, and we have been designing workflows and engaging productivelywith regulators with a goal of launching products later this year.?

Update from Jarrett Lilien, WisdomTree President and COO

?I am very excited about our business. We ended 2020 with strong growth andmomentum. That momentum is continuing in 2021, and we are well positioned andhave a strong 2021 growth plan. To date, we have seen global organic growth of$630 million and now have global assets under management at a new record, justshy of $70 billion.

?For 2021, with our dividend strategies, our leadership position in gold andcommodities, our best-in-market crypto ETP offering, our cloud computing, AIand battery products, recent global cybersecurity launch, as well as ourleading ESG offerings, we could not be better positioned.

?Lastly, remote working has worked for us. We have transformed our operatingmodel and we are working as a global team better than ever before. With a freshperspective we have found new efficiencies adding scalability to our model andgiving us scope to make further investments in future growth. Our vision is tocontinue with a remote-first approach post pandemic, ensuring that theseefficiencies are permanent and carried into future years.?

OPERATING AND FINANCIAL HIGHLIGHTS

Three Months Ended Dec. 31, Sept. 30, June30, Mar. 31, Dec. 31, 2020 2020 2020 2020 2019ConsolidatedOperating Highlights ($ inbillions):AUM $ 67.4 $ 60.7 $ 57.7 $ 50.3 $ 63.6 Net inflows/ $ 0.9 $ (0.5 ) $ 0.1 $ (0.5 ) $ 0.4 (outflows)Average AUM $ 64.1 $ 61.2 $ 55.7 $ 60.2 $ 61.9 Average advisory 0.41 % 0.42 % 0.41 % 0.42 % 0.44 %fee ConsolidatedFinancialHighlights ($ in millions, exceptper share amounts):Operating revenues $ 67.1 $ 64.6 $ 58.1 $ 63.9 $ 68.9 Net loss $ (13.5 ) $ (0.3 ) $ (13.3 ) $ (8.6 ) $ (25.9 )Diluted loss per $ (0.10 ) $ (0.01 ) $ (0.09 ) $ (0.06 ) $ (0.17 )shareOperating income 19.2 % 22.8 % 20.3 % 24.5 % 21.5 %marginAs Adjusted (Non-GAAP^1):Gross margin 75.6 % 76.5 % 75.1 % 77.3 % 77.3 %Net income, as $ 9.2 $ 11.0 $ 8.5 $ 11.2 $ 10.1 adjustedDiluted earningsper share, as $ 0.06 $ 0.07 $ 0.05 $ 0.07 $ 0.06 adjustedOperating income 19.2 % 22.8 % 20.4 % 25.1 % 22.0 %margin, as adjusted

RECENT BUSINESS DEVELOPMENTS

Company News

* In November 2020, we were named as ?European Smart Beta Provider of the Year? for the second consecutive year and ?European Fund Launch of the Year? for the WisdomTree Cloud Computing UCITS ETF (WCLD), at the Funds Europe Awards 2020. * In December 2020, we were named as Pensions & Investments? ?Best Places to Work? in Money Management 2020 in the category for managers with 100-499 employees. * In January 2021, we announced the appointment of Smita Conjeevaram to our Board of Directors.

Product News

* In November 2020, the splits and consolidations of certain classes of WisdomTree Multi Asset Issuer ETP securities were made effective. Consolidations: WisdomTree Brent Crude Oil 3x Daily Short(3BRS), WisdomTree NASDAQ 100 3x Daily Short(QQQS), WisdomTree Natural Gas 3x Daily Leveraged(3NGL), WisdomTree S&P 500 VIX Short-TermFutures 2.25x Daily Leveraged(VIXL). Splits: WisdomTree NASDAQ 100 3x Daily Leveraged (QQQ3); and we relaunched the short and leveraged oil products; WisdomTree WTI Crude Oil 3x Daily Leveraged (3OIL), WisdomTree WTI Crude Oil 3x Daily Short (3OIS) and WisdomTree Brent Crude Oil 3x Daily Leveraged (3BRL). * In December 2020, we declared final year-end U.S. capital gains distributions; we announced the reorganization of the WisdomTree Enhanced Commodity Strategy Fund (GCC) ? previously the WisdomTree Continuous Commodity Index Fund ? with an updated approach to broad-based commodity investing; we applied an ESG screen and introduced the WisdomTree Composite Risk Score to WisdomTree US Quality Dividend Growth UCITS ETF (DGRW), and WisdomTree US Equity Income UCITS ETF (DHS); we implemented a number of volatility proofing measures for four energy ETPs: WisdomTree WTI Crude Oil Pre-roll (WTID), WisdomTree Brent Crude Oil Pre-roll (BRND), WisdomTree Natural Gas 3x Daily Short (3NGS) and WisdomTree Brent Crude Oil 3x Daily Short (3BRS); and we listed the WisdomTree Core Physical Gold ETP (WGLD) on the London Stock Exchange. * In January 2021, we introduced eNav (estimated NAV) in collaboration with Virtu Financial to financial professionals available on WisdomTree?s website; we announced the global launch of the WisdomTree Cyber Security Fund (WCBR) on the NASDAQ, and the UCITS ETF on the London Stock Exchange, Borsa Italiana and BrseXetra; and we applied an ESG screen to WisdomTree ex-State-Owned Enterprises Fund (XSOE), WisdomTree China ex-State-Owned Enterprises Fund (CXSE) and India ex-State-Owned Enterprises Fund (IXSE).



WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts)(Unaudited) Three Months Ended Years Ended Dec.31, Sept. 30, June30, Mar.31, Dec.31, Dec.31, Dec.31, 2020 2020 2020 2020 2019 2020 2019Operating Revenues: Advisory fees $ 66,105 $ 63,919 $ 57,208 $ 62,950 $ 68,179 $ 250,182 $ 265,652 Other income 954 721 918 924 728 3,517 2,751 Total revenues 67,059 64,640 58,126 63,874 68,907 253,699 268,403 Operating Expenses: Compensation and 20,827 19,098 17,455 17,295 19,280 74,675 80,761 benefitsFund management and 16,350 15,219 14,461 14,485 15,650 60,515 61,502 administrationMarketing and 3,715 2,996 1,949 2,468 3,551 11,128 12,163 advertisingSales and business 2,595 2,386 2,181 3,417 5,329 10,579 18,276 developmentContractual gold 4,449 4,539 4,063 3,760 3,516 16,811 13,226 paymentsProfessional and 1,322 950 1,357 1,273 1,604 4,902 5,641 consulting feesOccupancy,communications and 1,622 1,611 1,643 1,551 1,587 6,427 6,302 equipmentDepreciation and 261 253 251 256 253 1,021 1,045 amortizationThird-party 1,291 1,233 1,340 1,355 1,146 5,219 6,968 distribution feesAcquisition anddisposition-related ? ? 33 383 366 416 902 costsOther 1,720 1,611 1,596 1,997 1,816 6,924 8,083 Total operating 54,152 49,896 46,329 48,240 54,098 198,617 214,869 expensesOperating income 12,907 14,744 11,797 15,634 14,809 55,082 53,534 Other Income/ (Expenses):Interest expense (2,694 ) (2,511 ) (2,044 ) (2,419 ) (2,606 ) (9,668 ) (11,240 )Loss on revaluationof deferred (22,385 ) (8,870 ) (23,358 ) (2,208 ) (5,354 ) (56,821 ) (11,293 )consideration ?gold paymentsInterest income 351 111 119 163 936 744 3,332 Impairments ? (3,080 ) ? (19,672 ) (30,138 ) (22,752 ) (30,710 )Loss onextinguishment of ? ? (2,387 ) ? ? (2,387 ) ? debtOther gains and 524 744 1,819 (2,507 ) (2 ) 580 (3,502 )losses, net(Loss)/income (11,297 ) 1,138 (14,054 ) (11,009 ) (22,355 ) (35,222 ) 121 before income taxesIncome tax expense/ 2,200 1,408 (804 ) (2,371 ) 3,525 433 10,546 (benefit)Net loss $ (13,497 ) $ (270 ) $ (13,250 ) $ (8,638 ) $ (25,880 ) $ (35,655 ) $ (10,425 )Loss per share ? ) ) ) )basic ($0.10 ^ ($0.01 ^ ($0.09 ) ($0.06 ) ($0.17 ) ($0.25 ^ ($0.08 ^ 2 2 2 2Loss per share ? ) ) ) )diluted ($0.10 ^ ($0.01 ^ ($0.09 ) ($0.06 ) ($0.17 ) ($0.25 ^ ($0.08 ^ 2 2 2 2Weighted averagecommon shares ? 145,096 145,564 151,623 152,519 151,948 148,682 151,823 basicWeighted averagecommon shares ? 145,096 145,564 151,623 152,519 151,948 148,682 151,823 diluted As Adjusted (Non-GAAP^1)Total operating $ 54,152 $ 49,896 $ 46,296 $ 47,857 $ 53,732 expensesOperating income $ 12,907 $ 14,744 $ 11,830 $ 16,017 $ 15,175 Income before $ 11,504 $ 13,242 $ 10,911 $ 14,358 $ 13,503 income taxesIncome tax expense $ 2,281 $ 2,205 $ 2,417 $ 3,134 $ 3,396 Net income $ 9,223 $ 11,037 $ 8,494 $ 11,224 $ 10,107 Earnings per share $ 0.06 $ 0.07 $ 0.05 $ 0.07 $ 0.06 ? diluted

QUARTERLY HIGHLIGHTS

Operating Revenues

-- Operating revenues increased 3.7% from the third quarter of 2020 due to higher average global AUM arising from market appreciation and net inflows, partly offset by a 1 basis point decrease in our average global advisory fee due to AUM mix shift. -- Operating revenues decreased 2.7% from the fourth quarter of 2019 due to a 3 basis point decline in our average global advisory fee arising from AUM mix shift, notwithstanding the increase in our average AUM. -- Our average global advisory fee was 0.41%, 0.42% and 0.44% during the fourth quarter of 2020, the third quarter of 2020 and the fourth quarter of 2019, respectively.

Operating Expenses

-- Operating expenses increased 8.5% from the third quarter of 2020 due to higher incentive compensation, higher fund management and administration costs arising from Brexit and fund rebalances, as well as higher marketing expenses and professional fees. -- Operating expenses were essentially unchanged from the fourth quarter of 2019.

Other Income/(Expenses)

-- We recognized a non-cash loss on revaluation of deferred consideration of ($22.4) million, ($8.9) million and ($5.4) million during the fourth quarter of 2020, third quarter of 2020 and fourth quarter of 2019, respectively. The loss in the fourth quarter of 2020 arose primarily from a reduction in the discount rate used to compute the present value of the annual payment obligations. The prior quarter losses arose due to an increase in forward-looking gold prices. The magnitude of any gain or loss recognized is highly correlated to the magnitude of the change in the forward-looking price of gold. -- Interest expense increased 7.3% from the third quarter of 2020 to $2.7 million primarily due to higher levels of debt outstanding. This expense increased 3.4% from the fourth quarter of 2019 due to a higher effective interest rate, partly offset by lower levels of debt outstanding. -- Other gains and losses, net, were $0.5 million, $0.7 million and $0.0 million for the fourth quarter of 2020, third quarter of 2020 and fourth quarter of 2019, respectively. The third quarter of 2020 includes a gain of $0.2 million from the exit of our investment in AdvisorEngine Inc. Gains and losses also generally arise from the sale of gold earned from management fees paid by our physically-backed gold ETPs, foreign exchange fluctuations, securities owned and other miscellaneous items.

Income Taxes

-- Our effective income tax rate for the fourth quarter of 2020 of negative 19.5% resulted in income tax expense of $2.2 million. Our tax rate differs from the federal statutory tax rate of 21% primarily due to a non-deductible loss on revaluation of deferred consideration, partly offset by a lower tax rate on foreign earnings. -- Our adjusted effective income tax rate was 19.8%1.

ANNUAL HIGHLIGHTS

-- Operating revenues decreased 5.5% as compared to 2019 due to a 4 basis point decline in our average global advisory fee arising from AUM mix shift, notwithstanding the increase in our average AUM. -- Operating expenses decreased 7.6% as compared to 2019 due to lower incentive compensation accruals as well as $3.5 million of severance expense included in the prior year, lower sales and business development costs, third party distribution costs, marketing expenses and other expenses, as well as lower fund management and administration costs primarily due to the sale of our Canadian ETF business. These declines were partly offset by higher contractual gold payments due to higher average gold prices. -- Significant changes in items reported in other income/(expenses) include a decrease in interest expense of 14.0% due to a lower level of debt outstanding; non-cash losses on revaluation of deferred consideration of ($56.8) million and ($11.3) million in 2020 and 2019, respectively; a decrease in interest income of 77.7% as the prior year included accrued paid-in-kind interest income on our former AdvisorEngine investment; non-cash impairment charges of $22.8 million and $30.7 million recorded in 2020 and 2019, respectively; a loss on extinguishment of debt of $2.4 million in 2020; non-cash charges of $6.0 million and $4.3 million in 2020 and 2019, respectively, arising from the release of tax-related indemnification assets upon the expiration of the statute of limitations (an equal and offsetting benefit was recognized in income tax expense); and a gain of $1.1 million in 2020 arising from an adjustment to the estimated fair value of consideration received from the exit of our investment in AdvisorEngine. -- Our effective income tax rate for 2020 of negative 1.2% resulted in income tax expense of $0.4 million. Our tax rate differs from the federal statutory rate of 21% primarily due to a non-deductible loss on revaluation of deferred consideration, a valuation allowance on capital losses and tax shortfalls associated with the vesting and exercise of stock-based compensation awards. These items were partly offset by a tax benefit of $6.0 million recognized in connection with the release of the tax-related indemnification asset described above, a $2.9 million non-taxable gain recognized upon sale of our Canadian ETF business in the first quarter, a tax benefit of $2.6 million recognized in connection with the release of a deferred tax asset valuation allowance on interest carryforwards arising from our debt previously held in the United Kingdom and a lower tax rate on foreign earnings.

CONFERENCE CALL

WisdomTree will discuss its results and operational highlights during a conference call on Friday, January 29, 2021 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.

ABOUT WISDOMTREE

WisdomTree Investments, Inc., through its subsidiaries in the U.S. and Europe (collectively, WisdomTree), is an ETF and ETP sponsor and asset manager headquartered in New York.WisdomTree offers products covering equity, commodity, fixed income, leveraged and inverse, currency and alternative strategies. WisdomTree currently has approximately $69.2 billion in assets under management globally.

WisdomTree is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide._____________________________1See Non-GAAP Financial Measurements.2Earnings/(loss) per share (EPS) is calculated pursuant to the two-class method as it results in a lower EPS amount as compared to the treasury stock method.

Contact Information:

Media RelationsJessica Zaloom +1.917.267.3735jzaloom@wisdomtree.com

WisdomTreeInvestments, Inc.Key OperatingStatistics (Unaudited) Three Months Ended Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, 2020 2020 2020 2020 2019GLOBAL ETPs ($ in millions)Beginning of $ 60,710 $ 57,666 $ 50,347 $ 63,615 $ 59,981 period assetsAssets sold ? ? ? (778 ) ? Inflows/ 881 (477 ) 126 (536 ) 390 (outflows)Marketappreciation/ 5,898 3,567 7,489 (11,934 ) 3,247 (depreciation)Fund closures (97 ) (46 ) (296 ) (20 ) (3 )End of period $ 67,392 $ 60,710 $ 57,666 $ 50,347 $ 63,615 assetsAverage assetsduring the $ 64,125 $ 61,216 $ 55,708 $ 60,189 $ 61,858 periodAverage advisoryfee during the 0.41 % 0.42 % 0.41 % 0.42 % 0.44 %periodRevenue days 92 92 91 91 92 Number of ETFs ?end of the 309 305 311 331 349 period U.S. LISTED ETFs ($ in millions)Beginning of $ 33,310 $ 31,362 $ 28,920 $ 40,600 $ 37,592 period assetsInflows/ 919 575 (1,474 ) (1,273 ) 563 (outflows)Marketappreciation/ 4,385 1,373 4,030 (10,397 ) 2,448 (depreciation)Fund closures (97 ) ? (114 ) (10 ) (3 )End of period $ 38,517 $ 33,310 $ 31,362 $ 28,920 $ 40,600 assetsAverage assetsduring the $ 36,002 $ 32,984 $ 30,626 $ 36,940 $ 39,094 periodAverage advisoryfee during the 0.40 % 0.41 % 0.41 % 0.43 % 0.44 %periodNumber of ETFs ?end of the 67 67 67 77 80 period INTERNATIONALLISTED ETPs ($ in millions)Beginning of $ 27,400 $ 26,304 $ 21,427 $ 23,015 $ 22,389 period assetsAssets sold ? ? ? (778 ) ? Inflows/ (38 ) (1,052 ) 1,600 737 (173 )(outflows)Marketappreciation/ 1,513 2,194 3,459 (1,537 ) 799 (depreciation)Fund closures ? (46 ) (182 ) (10 ) ? End of period $ 28,875 $ 27,400 $ 26,304 $ 21,427 $ 23,015 assetsAverage assetsduring the $ 28,123 $ 28,232 $ 25,082 $ 23,249 $ 22,764 periodAverage advisoryfee during the 0.42 % 0.42 % 0.41 % 0.40 % 0.44 %periodNumber of ETPs ?end of the 242 238 244 254 269 period PRODUCTCATEGORIES ($ in millions) Commodity & CurrencyBeginning of $ 25,122 $ 24,191 $ 19,748 $ 19,947 $ 19,599 period assetsInflows/ (254 ) (1,106 ) 1,325 622 (250 )(outflows)Marketappreciation/ 1,179 2,037 3,118 (821 ) 598 (depreciation)End of period $ 26,047 $ 25,122 $ 24,191 $ 19,748 $ 19,947 assetsAverage assetsduring the $ 25,676 $ 25,878 $ 22,964 $ 20,302 $ 19,770 period U.S. Equity Beginning of $ 15,612 $ 13,997 $ 12,151 $ 17,732 $ 16,281 period assetsInflows/ 395 897 (241 ) (285 ) 460 (outflows)Marketappreciation/ 2,360 718 2,087 (5,296 ) 991 (depreciation)End of period $ 18,367 $ 15,612 $ 13,997 $ 12,151 $ 17,732 assetsAverage assetsduring the $ 17,050 $ 15,141 $ 13,302 $ 16,011 $ 16,969 period InternationalDeveloped Market EquityBeginning of $ 8,621 $ 8,839 $ 8,659 $ 13,011 $ 12,169 period assetsInflows/ (191 ) (587 ) (965 ) (1,097 ) (135 )(outflows)Marketappreciation/ 984 369 1,145 (3,255 ) 977 (depreciation)End of period $ 9,414 $ 8,621 $ 8,839 $ 8,659 $ 13,011 assetsAverage assetsduring the $ 8,930 $ 8,835 $ 8,779 $ 11,453 $ 12,607 period

Three Months Ended Dec. 31, Sept. 30, June 30, Mar. 30, Dec. 31, 2020 2020 2020 2020 2019 Emerging Market Equity Beginning of period assets $ 5,979 $ 5,413 $ 4,600 $ 6,400 $ 5,699 Inflows/(outflows) 1,399 257 (25 ) 69 195 Market appreciation/ 1,161 309 838 (1,869 ) 506 (depreciation)End of period assets $ 8,539 $ 5,979 $ 5,413 $ 4,600 $ 6,400 Average assets during the $ 7,249 $ 5,917 $ 5,129 $ 5,919 $ 5,991 period Fixed Income Beginning of period assets $ 3,630 $ 3,530 $ 3,527 $ 3,585 $ 3,337 Inflows/(outflows) (330 ) 76 (53 ) 21 218 Market appreciation/ 24 24 56 (79 ) 30 (depreciation)End of period assets $ 3,324 $ 3,630 $ 3,530 $ 3,527 $ 3,585 Average assets during the $ 3,472 $ 3,605 $ 3,523 $ 3,653 $ 3,540 period Leveraged & Inverse Beginning of period assets $ 1,430 $ 1,350 $ 896 $ 1,138 $ 1,121 Inflows/(outflows) (118 ) (9 ) 312 12 (22 )Market appreciation/ 175 89 142 (254 ) 39 (depreciation)End of period assets $ 1,487 $ 1,430 $ 1,350 $ 896 $ 1,138 Average assets during the $ 1,436 $ 1,482 $ 1,169 $ 1,147 $ 1,178 period Alternatives Beginning of period assets $ 229 $ 225 $ 244 $ 358 $ 418 Inflows/(outflows) (26 ) (4 ) (29 ) (66 ) (61 )Market appreciation/ 11 8 10 (48 ) 1 (depreciation)End of period assets $ 214 $ 229 $ 225 $ 244 $ 358 Average assets during the $ 224 $ 226 $ 226 $ 328 $ 398 period Closed ETPs Beginning of period assets $ 87 $ 121 $ 522 $ 1,444 $ 1,357 Assets sold ? ? ? (778 ) ? Inflows/(outflows) 6 (1 ) (198 ) 188 (15 )Market appreciation/ 4 13 93 (312 ) 105 (depreciation)Fund closures (97 ) (46 ) (296 ) (20 ) (3 )End of period assets $ ? $ 87 $ 121 $ 522 $ 1,444 Average assets during the $ 88 $ 132 $ 616 $ 1,376 $ 1,405 period Headcount 217 211 214 210 208

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

WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in thousands, except per share amounts)

Dec.31, Dec.31, 2020 2019 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 73,425 $ 74,972 Securities owned, at fair value 34,895 17,319 Accounts receivable 29,455 26,838 Prepaid expenses 3,827 3,724 Other current assets 259 207 Total current assets 141,861 123,060 Fixed assets, net 7,579 8,127 Notes receivable ? 28,172 Securities held-to-maturity 451 16,863 Deferred tax assets, net 8,063 7,398 Investments 8,112 11,192 Right of use assets ? operating leases 16,327 18,161 Goodwill 85,856 85,856 Intangible assets 601,247 603,294 Other noncurrent assets 180 983 Total assets $ 869,676 $ 903,106 LIABILITIES AND STOCKHOLDERS? EQUITY LIABILITIES Current liabilities: Fund management and administration payable $ 19,564 $ 22,021 Compensation and benefits payable 22,803 26,501 Deferred consideration ? gold payments 17,374 13,953 Securities sold, but not yet purchased, at fair value ? 582 Operating lease liabilities 3,135 3,682 Income taxes payable 916 3,372 Accounts payable and other liabilities 10,207 8,930 Total current liabilities 73,999 79,041 Convertible notes 166,646 ? Debt ? 175,956 Deferred consideration ? gold payments 212,763 159,071 Operating lease liabilities 17,434 19,057 Total liabilities 470,842 433,125 Preferred stock ? Series A Non-Voting Convertible,par value $0.01; 14.750 shares authorized, issued and 132,569 132,569 outstandingSTOCKHOLDERS? EQUITY Common stock, par value $0.01; 250,000 shares authorized:Issued and outstanding: 148,716 and 155,264 at 1,487 1,553 December 31, 2020 and December31, 2019, respectivelyAdditional paid-in capital 317,075 352,658 Accumulated other comprehensive income 1,102 945 Accumulated deficit (53,399 ) (17,744 )Total stockholders? equity 266,265 337,412 Total liabilities and stockholders? equity $ 869,676 $ 903,106

WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(Unaudited)

Years Ended Dec. 31, Dec. 31, 2020 2019Cash flows from operating activities: Net loss $ (35,655 ) $ (10,425 )Adjustments to reconcile net loss to net cash provided by operating activities:Advisory fees received in gold and other precious (62,416 ) (49,887 )metalsLoss on revaluation of deferred consideration ? gold 56,821 11,293 paymentsImpairments 22,752 30,710 Contractual gold payments 16,811 13,226 Stock-based compensation 11,706 11,590 Amortization of right of use asset 3,182 3,174 Gain on sale ?Canadian ETF business (2,877 ) ? Loss on extinguishment of debt 2,387 ? Deferred income taxes (2,192 ) (349 )Amortization of issuance costs - convertible notes 1,710 ? Amortization of issuance costs - former credit 1,328 2,888 facilityDepreciation and amortization 1,021 1,045 Paid-in-kind interest income ? (2,498 )Other (1,169 ) (173 )Changes in operating assets and liabilities: Securities owned, at fair value (17,576 ) (8,446 )Accounts receivable (193 ) (19 )Prepaid expenses (159 ) 738 Gold and other precious metals 45,087 35,886 Other assets 107 172 Fund management and administration payable (2,264 ) (476 )Compensation and benefits payable (3,804 ) 7,885 Income taxes payable (2,441 ) 4,524 Securities sold, but not yet purchased, at fair value (582 ) (1,116 )Operating lease liabilities (3,517 ) (3,587 )Accounts payable and other liabilities 1,328 677 Net cash provided by operating activities 29,395 46,832 Cash flows from investing activities: Purchase of fixed assets (472 ) (47 )Proceeds from held-to-maturity securities maturing or 16,488 3,244 called prior to maturityProceeds from the sale of our financial interests in 9,592 ? AdvisorEngineProceeds from sale of Canadian ETF business, net 2,774 ? Purchase of investments ? (8,112 )Funding of notes receivable ? (2,090 )Net cash provided by/(used in) investing activities 28,382 (7,005 ) Cash flows from financing activities: Repayment of debt (179,000 ) (21,000 )Shares repurchased (31,197 ) (2,341 )Dividends paid (20,113 ) (20,385 )Convertible notes issuance costs (5,411 ) ? Proceeds from the issuance of convertible notes 175,250 ? Proceeds from exercise of stock options 292 160 Net cash used in financing activities (60,179 ) (43,566 )Increase in cash flows due to changes in foreign 855 927 exchange rateDecrease in cash and cash equivalents (1,547 ) (2,812 )Cash and cash equivalents ? beginning of year 74,972 77,784 Cash and cash equivalents ? end of year $ 73,425 $ 74,972 Supplemental disclosure of cash flow information: Cash paid for taxes $ 10,131 $ 10,060 Cash paid for interest $ 7,088 $ 8,037

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 press release include:

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

-- Unrealized gains or losses on the revaluation of deferred consideration: Deferred consideration is an obligation we assumed in connection with the ETFS acquisition that is carried at fair value. This item represents the present value of an obligation to pay fixed ounces of gold into perpetuity and is measured using forward-looking gold prices. Changes in the forward-looking price of gold and changes in the discount rate used to compute the present value of the annual payment obligations may have a material impact on the carrying value of the deferred consideration and our reported financial results. We exclude this item when calculating our non-GAAP financial measurements as it is not core to our operating business. The item is not adjusted for income taxes as the obligation was assumed by a wholly-owned subsidiary of ours that is based in Jersey, a jurisdiction where we are subject to a zero percent tax rate. -- Tax shortfalls and windfalls upon vesting and exercise of stock-based compensation awards: GAAP requires the recognition of tax windfalls and shortfalls within income tax expense. These items arise upon the vesting and exercise 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 volatility in earnings and are not core to our operating business. -- Interest expense from the amortization of discount arising from the bifurcation of the conversion option embedded in the convertible notes: GAAP requires convertible instruments to be separated into their liability and equity components by allocating the issuance proceeds to each of these components. The liability component for convertible instruments that qualify for a derivative scope exception (applicable to our convertible notes) is allocated proceeds equal to the estimated fair value of similar debt without the conversion option. The difference between the gross proceeds received from the issuance of the convertible instrument and the proceeds allocated to the liability component represents the residual amount that is classified in equity. The discount arising from the recognition of the residual amount classified in equity is amortized as interest expense over the life of the instrument. We exclude this item when calculating our non-GAAP financial measurements as it is non-cash and distorts our actual cost of borrowing. In addition, in August 2020, the FASB issued Accounting Standards Update 2020-06, Debt Debt with Conversion and Other Options, Cash Conversion which includes the elimination of the requirement to bifurcate conversion options qualifying for a derivative scope exception. Once effective, this interest expense will no longer be recognized. -- Other items: Loss on extinguishment of debt, the release of a deferred tax asset valuation allowance recognized on interest carryforwards arising from our debt previously outstanding in the United Kingdom, a gain arising from an adjustment to the estimated fair value of consideration received from the exit of our investment in AdvisorEngine, impairment charges, a gain recognized upon sale of our Canadian ETF business and acquisition and disposition-related costs are excluded when calculating our non-GAAP financial measurements.

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

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

Adjusted operating income margin. We disclose adjusted operating income margin as a non-GAAP financial measurement in order to report our operating income margin exclusive of items that are non-recurring or not core to our operating business.

WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIESGAAP to NON-GAAP RECONCILIATION (CONSOLIDATED)(in thousands)(Unaudited)

Three Months EndedAdjusted Net Income Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,and Diluted 2020 2020 2020 2020 2019Earnings per Share:

Net loss, as $ (13,497 ) $ (270 ) $ (13,250 ) $ (8,638 ) $ (25,880 )reportedAdd back: Loss onrevaluation of 22,385 8,870 23,358 2,208 5,354 deferredconsiderationAdd back: Interestexpense from theamortization ofdiscount arisingfrom the 314 286 42 ? ? bifurcation of theconversion optionembedded in theconvertible notes,net of income taxesAdd back: Taxshortfalls uponvesting and 21 50 119 501 142 exercise ofstock-basedcompensation awardsAdd back:Impairments, net of ? 2,326 ? 19,672 30,138 income taxesDeduct: Gainarising from anadjustment to theestimated fairvalue of ? (225 ) (868 ) ? ? considerationreceived from theexit of investmentin AdvisorEngineAdd back: Loss onextinguishment of ? ? 1,910 ? ? debt, net of incometaxesDeduct: Release ofa deferred taxasset valuationallowancerecognized oninterest ? ? (2,842 ) ? ? carryforwardsarising from debtpreviouslyoutstanding in theUnited KingdomDeduct: Gainrecognized upon ? ? ? (2,877 ) ? sale of CanadianETF businessAdd back:Acquisition anddisposition-related ? ? 25 358 353 costs, net ofincome taxesAdjusted net income $ 9,223 $ 11,037 $ 8,494 $ 11,224 $ 10,107 Weighted averagecommon shares - 161,138 160,876 166,634 167,561 167,203 dilutedAdjusted earnings $ 0.06 $ 0.07 $ 0.05 $ 0.07 $ 0.06 per share - diluted Three Months EndedGross Margin and Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,Gross Margin 2020 2020 2020 2020 2019Percentage: $ 67,059 $ 64,640 $ 58,126 $ 63,874 $ 68,907 Operating revenuesLess: Fundmanagement and (16,350 ) (15,219 ) (14,461 ) (14,485 ) (15,650 )administrationGross margin $ 50,709 $ 49,421 $ 43,665 $ 49,389 $ 53,257 Gross margin 75.6 % 76.5 % 75.1 % 77.3 % 77.3 %percentage

Three Months EndedAdjusted OperatingIncome and Adjusted Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,Operating 2020 2020 2020 2020 2019Income Margin: $ 67,059 $ 64,640 $ 58,126 $ 63,874 $ 68,907 Operating revenues Operating income $ 12,907 $ 14,744 $ 11,797 $ 15,634 $ 14,809 Add back:Acquisition anddisposition-related ? ? 33 383 366 costs, beforeincome taxesAdjusted operating $ 12,907 $ 14,744 $ 11,830 $ 16,017 $ 15,175 incomeAdjusted operating 19.2 % 22.8 % 20.4 % 25.1 % 22.0 %income margin

Three Months EndedAdjusted Total Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,Operating Expenses: 2020 2020 2020 2020 2019

Total operating $ 54,152 $ 49,896 $ 46,329 $ 48,240 $ 54,098 expensesDeduct: Acquisitionanddisposition-related ? ? (33 ) (383 ) (366 )costs, beforeincome taxesAdjusted total $ 54,152 $ 49,896 $ 46,296 $ 47,857 $ 53,732 operating expenses

Three Months EndedAdjusted Income Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,Before Income Taxes: 2020 2020 2020 2020 2019 (Loss)/income before $ (11,297 ) $ 1,138 $ (14,054 ) $ (11,009 ) $ (22,355 )income taxesAdd back: Loss onrevaluation of 2,208 5,354 deferred 22,385 8,870 23,358considerationAdd back: Interestexpense from theamortization ofdiscount arising fromthe bifurcation of 416 379 55 ? the conversion ?option embedded inthe convertiblenotes, before incometaxesAdd back:Impairments, before ? 3,080 ? 19,672 30,138 income taxesDeduct: Gain arisingfrom an adjustment tothe estimated fairvalue of consideration ? (225 ) (868 ) ? ? received from theexit of investmentinAdvisorEngineAdd back: Loss on extinguishment of ? ? 2,387 ? ? debtAdd back: Lossrecognized uponreduction of a ? ? ? 5,981 ? tax-relatedindemnificationassetDeduct: Gainrecognized upon sale ? ? ? (2,877 ) ? of Canadian ETFbusinessAdd back: Acquisitionanddisposition-related ? ? 33 383 366 costs, before incometaxesAdjusted income before income $ 11,504 $ 13,242 $ 10,911 $ 14,358 $ 13,503 taxes

Three Months EndedAdjusted Income TaxExpense and Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,Adjusted Effective 2020 2020 2020 2020 2019Income Tax Rate:

Adjusted income $ 11,504 $ 13,242 $ 10,911 $ 14,358 $ 13,503 before income taxes(above) Income tax expense/ $ 2,200 $ 1,408 $ (804 ) $ (2,371 ) $ 3,525 (benefit)Add back: Taxbenefit arisingfrom theamortization ofdiscount associatedwith the 102 93 13 ? ? bifurcationof the conversionoption embedded inthe convertiblenotesDeduct: Taxshortfalls uponvesting and (21 ) (50 ) (119 ) (501 ) (142 )exercise ofstock-basedcompensation awardsAdd back: Taxbenefit arising ? 754 ? ? ? from impairmentsAdd back: Taxbenefit arisingfrom loss on ? ? 477 ? ? extinguishment ofdebtAdd back: Releaseof a deferred taxasset valuationallowancerecognized oninterest ? ? 2,842 ? ? carryforwardsarising from debtpreviouslyoutstanding in theUnited KingdomAdd back: Taxbenefit arisingfrom reduction of a ? ? ? 5,981 ? tax-relatedindemnificationassetAdd back: Taxbenefit arisingfrom acquisition ? ? 8 25 13 anddisposition-relatedcostsAdjusted income tax $ 2,281 $ 2,205 $ 2,417 $ 3,134 $ 3,396 expenseAdjusted effective 19.8 % 16.7 % 22.2 % 21.8 % 25.1 %income tax rate

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements that are based on our managements 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

-- the ultimate duration of the COVID-19 pandemic and its short-term and long-term impact on our business and the global economy; -- anticipated trends, conditions and investor sentiment in the global markets and ETPs; -- anticipated levels of inflows into and outflows out of our ETPs; -- our ability to deliver favorable rates of return to investors; -- competition in our business; -- our ability to develop new products and services; -- our ability to maintain current vendors or find new vendors to provide services to us at favorable costs; -- our ability to successfully operate and expand our business in non-U.S. markets; and -- the effect of laws and regulations that apply to our business.

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

-- declining prices of securities, gold and other precious metals and other commodities can adversely affect our business by reducing the market value of the assets we manage or causing WisdomTree ETP investors to sell their fund shares and trigger redemptions; -- fluctuations in the amount and mix of our AUM, whether caused by disruptions in the financial markets or otherwise, including but not limited to a pandemic event such as COVID-19, may negatively impact revenues and operating margins, and may impede our ability to refinance our debt upon maturity, increase the cost of borrowing or result in our debt being called prior to maturity; -- competitive pressures could reduce revenues and profit margins; -- we derive a substantial portion of our revenues from a limited number of products, and as a result, our operating results are particularly exposed to investor sentiment toward investing in the products strategies and our ability to maintain the AUM of these products, as well as the performance of these products and market-specific and political and economic risk; -- a significant portion of our AUM is held in products with exposure to U.S. and international developed markets and we therefore have exposure to domestic and foreign market conditions and are subject to currency exchange rate risks; -- withdrawals or broad changes in investments in our ETPs by investors with significant positions may negatively impact revenues and operating margins; -- over the last few years, we have expanded our business globally. This expansion subjects us to increased operational, regulatory, financial and other risks; -- many of our ETPs have a limited track record, and poor investment performance could cause our revenues to decline; and -- we depend on third parties to provide many critical services to operate our business and our ETPs. The failure of key vendors to adequately provide such services could materially affect our operating business and harm WisdomTree ETP investors.

Other factors, such as general economic conditions, including currency exchange rate fluctuations, also may have an effect on the results of our operations. For a more complete description of the risks noted above and other risks that could cause our actual results to differ from our current expectations, see Risk Factors in our Annual Report on Form 10-K for the year ended December31, 2019 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020.

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.