GlobeNewswire Inc | Apr 30, 2021 07:00AM EDT

April 30, 2021

NEW YORK, April 30, 2021 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (NASDAQ: WETF) today reported financial results for the first quarter of 2021.

$15.1 million net income ($12.51 million net income, as adjusted), see Non-GAAP Financial Measurements for additional information.

$2.7 million of non-cash items, including a gain on revaluation of deferred consideration gold payments of $2.8 million and other non-operating gains and charges.

$69.5 billion of ending AUM, an increase of 3.2% arising from net inflows and market appreciation.

$1.3 billion of net inflows, driven by inflows into our emerging markets equity products.

0.42% average global advisory fee, an increase of 1 basis point due to AUM mix shift.

$72.8 million of operating revenues, an increase of 8.6% due to higher average AUM and a higher average global advisory fee.

78.7% gross margin1, a 3.1 point increase from the previous quarter.

25.5% operating income margin, a 6.3 point increase primarily due to higher revenues.

$0.03 quarterly dividenddeclared, payable on May 26, 2021 to stockholders of record as of the close of business on May 12, 2021.

Update from Jarrett Lilien, WisdomTree President and COO

?We continue to deliver on our plan to invest in growth and our people, as wellas drive efficiencies in the business. Our first quarter results make clearthat we are executing well on all fronts. We generated strong organic growthwith $1.3 billion of net inflows this quarter, and our assets under managementare at a new record of just under $73 billion. Our thematic products,including cloud computing, artificial intelligence, battery technology andcybersecurity, have been a success with strong inflows across both our U.S. andEuropean platforms.

Overall, top-line growth led to one of our best all-around quarters, withstrong revenues and expanding operating margins and net income. Our teamremains focused and dedicated to exceptional execution. This, and the breadthand diversified mix of our business, gives us confidence that our momentum issustainable.?

Update from Jonathan Steinberg, WisdomTree CEO

?The takeaways from this quarter are simple: continued growth, momentum andstrong execution. As I have said before, WisdomTree is operating with evengreater speed, efficiency and inclusion in our new, remote-first orientation.Our results are clear evidence of this.

In the crypto asset space, we have been laser focused on execution. In March,we filed for the WisdomTree Bitcoin Trust with the SEC. Earlier this month, wecross-listed our European-domiciled WisdomTree Bitcoin ETP (BTCW) in Germany,appointed Coinbase Custody as a custodian and received approval to passportBTCW in the European Union (EU), allowing for a wider audience to access andinvest in the product. Just yesterday, we launched a physically backed EthereumETP (ETHW) in Europe.

Additionally, we?ve made advancements in our blockchain initiatives. In theU.S., we filed for the WisdomTree Digital Short-Term Treasury Fund with theSEC, leveraging Securrency?s technology. We also invested in Securrency?sSeries B funding round, as we believe their team is uniquely suited to lead inblockchain-based fintech and regtech going forward. Our ongoing financialcommitment reaffirms the strength of our support and partnership in shaping thefuture of financial services with Securrency and our fellow investors.?

OPERATING AND FINANCIAL HIGHLIGHTS

Three Months Ended Mar. 31, Dec. 31, Sept.30, June 30, Mar. 31, 2021 2020 2020 2020 2020ConsolidatedOperating Highlights ($ in billions):AUM $ 69.5 $ 67.4 $ 60.7 $ 57.7 $ 50.3 Net inflows/ $ 1.3 $ 0.9 $ (0.5 ) $ 0.1 $ (0.5 )(outflows)Average AUM $ 69.6 $ 64.1 $ 61.2 $ 55.7 $ 60.2 Average advisory fee 0.42 % 0.41 % 0.42 % 0.41 % 0.42 % ConsolidatedFinancial Highlights($ in millions, except per shareamounts):Operating revenues $ 72.8 $ 67.1 $ 64.6 $ 58.1 $ 63.9 Net income/(loss) $ 15.1 $ (13.5 ) $ (0.3 ) $ (13.3 ) $ (8.6 )Diluted earnings/ $ 0.09 $ (0.10 ) $ (0.01 ) $ (0.09 ) $ (0.06 )(loss) per shareOperating income 25.5 % 19.2 % 22.8 % 20.3 % 24.5 %marginAs Adjusted (Non-GAAP^1):Gross margin 78.7 % 75.6 % 76.5 % 75.1 % 77.3 %Net income, as $ 12.5 $ 9.2 $ 11.0 $ 8.5 $ 11.2 adjustedDiluted earnings per $ 0.08 $ 0.06 $ 0.07 $ 0.05 $ 0.07 share, as adjustedOperating income 25.5 % 19.2 % 22.8 % 20.4 % 25.1 %margin, as adjusted

RECENT BUSINESS DEVELOPMENTS

Company News

* In March 2021, we filed for the WisdomTree Bitcoin Trust with the SEC; and we invested in Securrency?s Series B funding round. * In April 2021, we filed for the WisdomTree Digital Short-Term Treasury Fund with the SEC, leveraging Securrency?s blockchain-based financial technology.

Product News

* In February 2021, we launched tax-smart WisdomTree Model Portfolios technology, in collaboration with 55ip, a financial technology company; we listed the WisdomTree Core Physical Gold ETP (WGLD) on Borsa Italiana; we launched the WisdomTree European Union Bond UCITS ETF (EUBO) on Borsa Italiana and Brse Xetra; we launched the WisdomTree Energy Enhanced - EUR Daily Hedged ETC (WNRG) on Brse Xetra; and 16 WisdomTree commodity ETPs began tracking Solactive and Bloomberg Commodity (BCOM) indices in a move to make the products more immune to extreme volatility. * In March 2021, we listed the WisdomTree Core Physical Gold ETP (WGLD) on Brse Xetra along with a new trading line on the London Stock Exchange; we listed the WisdomTree Cyber Security UCITS ETF on SIX, the Swiss stock exchange, following a global launch in December 2020; we appointed Coinbase Custody as a custodian for the WisdomTree Bitcoin ETP (BTCW); and we received approval from the Swedish regulator to passport the WisdomTree Bitcoin ETP in the EU countries of Austria, Belgium, Denmark, Finland, France, Germany, Italy, Ireland, Luxembourg, Netherlands, Norway, Spain and Sweden. * In April 2021, we listed the WisdomTree Bitcoin ETP on Brse Xetra; and we expanded the range of cryptocurrency ETPs available to European investors with the launch of the WisdomTree Ethereum ETP (ETHW), now listed on SIX, the Swiss Stock Exchange and Brse Xetra. The ETP is also passported across the EU.

WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (Unaudited)

Three Months Ended Mar.31, Dec. 31, Sept.30, June30, Mar.31, 2021 2020 2020 2020 2020Operating Revenues: Advisory fees $ 71,616 $ 66,105 $ 63,919 $ 57,208 $ 62,950 Other income 1,214 954 721 918 924 Total revenues 72,830 67,059 64,640 58,126 63,874 Operating Expenses: Compensation and 22,627 20,827 19,098 17,455 17,295 benefitsFund management and 15,521 16,350 15,219 14,461 14,485 administrationMarketing and 3,006 3,715 2,996 1,949 2,468 advertisingSales and business 2,145 2,595 2,386 2,181 3,417 developmentContractual gold 4,270 4,449 4,539 4,063 3,760 paymentsProfessional fees 2,013 1,322 950 1,357 1,273 Occupancy,communications and 1,475 1,622 1,611 1,643 1,551 equipmentDepreciation and 252 261 253 251 256 amortizationThird-party 1,343 1,291 1,233 1,340 1,355 distribution feesAcquisition anddisposition-related ? ? ? 33 383 costsOther 1,571 1,720 1,611 1,596 1,997 Total operating 54,223 54,152 49,896 46,329 48,240 expensesOperating income 18,607 12,907 14,744 11,797 15,634 Other Income/ (Expenses):Interest expense (2,296 ) (2,694 ) (2,511 ) (2,044 ) (2,419 )Gain/(loss) onrevaluation ofdeferred 2,832 (22,385 ) (8,870 ) (23,358 ) (2,208 )consideration ?gold paymentsInterest income 231 351 111 119 163 Impairments (303 ) ? (3,080 ) ? (19,672 )Loss onextinguishment of ? ? ? (2,387 ) ? debtOther gains and (5,893 ) 524 744 1,819 (2,507 )losses, netIncome/(loss) 13,178 (11,297 ) 1,138 (14,054 ) (11,009 )before income taxesIncome tax (1,969 ) 2,200 1,408 (804 ) (2,371 )(benefit)/expenseNet income/(loss) $ 15,147 $ (13,497 ) $ (270 ) $ (13,250 ) $ (8,638 )Earnings/(loss) per $0.09^2 ($0.10)^2 ($0.01)^ ($0.09) ($0.06) share ? basic 2Earnings/(loss) per $0.09 ($0.10)^2 ($0.01)^ ($0.09) ($0.06) share ? diluted 2Weighted averagecommon shares ? 145,649 145,096 145,564 151,623 152,519 basicWeighted averagecommon shares ? 161,831 145,096 145,564 151,623 152,519 diluted As Adjusted (Non-GAAP^1)Total operating $ 54,223 $ 54,152 $ 49,896 $ 46,296 $ 47,857 expensesOperating income $ 18,607 $ 12,907 $ 14,744 $ 11,830 $ 16,017 Income before $ 15,583 $ 11,504 $ 13,242 $ 10,911 $ 14,358 income taxesIncome tax expense $ 3,079 $ 2,281 $ 2,205 $ 2,417 $ 3,134 Net income $ 12,504 $ 9,223 $ 11,037 $ 8,494 $ 11,224 Earnings per share $ 0.08 $ 0.06 $ 0.07 $ 0.05 $ 0.07 ? diluted

QUARTERLY HIGHLIGHTS

Operating Revenues

-- Operating revenues increased 8.6% and 14.0% from the fourth quarter of 2020 and first quarter of 2020, respectively, due to higher average global AUM arising from market appreciation and net inflows. -- Our average global advisory fee was 0.42%, 0.41% and 0.42% during the first quarter of 2021, the fourth quarter of 2020 and the first quarter of 2020, respectively.

Operating Expenses

-- Operating expenses were essentially unchanged from the fourth quarter of 2020. Higher compensation, due to seasonal payroll taxes, and higher professional fees from our digital assets initiative, were offset by lower fund management and administration costs as the prior quarter included costs arising from Brexit and fund rebalances, as well as lower marketing and sales and business development expenses. -- Operating expenses increased 12.4% from the first quarter of 2020 due to higher incentive compensation, fund management and administration costs, professional fees, contractual gold payments and marketing expenses, partly offset by lower sales and business development and other expenses.

Other Income/(Expenses)

-- Interest expense declined 14.8% from the fourth quarter of 2020 upon the early adoption of a new accounting standard applicable to our convertible notes, which became effective January 1, 2021 and eliminated the requirement to bifurcate certain conversion options embedded in convertible instruments. Previously, the discount arising from bifurcation was amortized as interest expense over the life of the instrument. Interest expense declined 5.1% from the first quarter of 2020 primarily due to lower levels of debt outstanding. -- We recognized a non-cash gain on revaluation of deferred consideration of $2.8 million during the first quarter of 2021. The gain was due to a decline in spot gold prices, partly offset by a steepening of the forward-looking gold curve. The magnitude of any gain or loss recognized is highly correlated to the magnitude of the change in the forward-looking price of gold. -- During the quarter, we recognized an impairment charge of $0.3 million upon exiting our London office. -- Other net losses were $5.9 million for the quarter. The quarter includes the release of a tax-related indemnification asset of $5.2 million upon the expiration of the statute of limitations related to our acquisition of ETFS in 2018. An equal and offsetting benefit has been recognized in income tax expense. The quarter also includes an unrealized gain of $0.2 million recognized on our investment in Securrency due to its recent capital raise. 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

-- We recorded an income tax benefit of $2.0 million in the quarter primarily due to the release of the tax-related indemnification asset described above, a non-taxable gain on revaluation of deferred consideration and a lower tax rate on foreign earnings, partly offset by tax shortfalls associated with the vesting and exercise of stock-based compensation awards. -- Our adjusted effective income tax rate was 19.8%1.

CONFERENCE CALL

WisdomTree will discuss its results and operational highlights during a conference call on Friday, April 30, 2021 at 9:00 a.m. ET. The call-in number is (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 $72.9 billion in assets under management globally.

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

^ See ?Non-GAAP Financial Measurements.?1^ Earnings/(loss) per share (?EPS?) is calculated pursuant to the two-class2 method as it results in a lower EPS amount as compared to the treasury stock method.

Contact Information:

Corporate CommunicationsJessica Zaloom+1.917.267.3735jzaloom@wisdomtree.com

WisdomTreeInvestments,Inc. Three Months EndedKey OperatingStatistics(Unaudited) Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2021 2020 2020 2020 2020GLOBAL ETPs ($ in millions)Beginning of $ 67,392 $ 60,710 $ 57,666 $ 50,347 $ 63,615 period assetsAssets sold ? ? ? ? (778 )Inflows/ 1,279 881 (477 ) 126 (536 )(outflows)Marketappreciation/ 866 5,898 3,567 7,489 (11,934 )(depreciation)Fund closures ? (97 ) (46 ) (296 ) (20 )End of period $ 69,537 $ 67,392 $ 60,710 $ 57,666 $ 50,347 assetsAverage assetsduring the $ 69,552 $ 64,125 $ 61,216 $ 55,708 $ 60,189 periodAverageadvisory fee 0.42 % 0.41 % 0.42 % 0.41 % 0.42 %during theperiodRevenue days 90 92 92 91 91 Number of ETFs? end of the 313 309 305 311 331 period U.S. LISTEDETFs ($ in millions)Beginning of $ 38,517 $ 33,310 $ 31,362 $ 28,920 $ 40,600 period assetsInflows/ 1,343 919 575 (1,474 ) (1,273 )(outflows)Marketappreciation/ 2,303 4,385 1,373 4,030 (10,397 )(depreciation)Fund closures ? (97 ) ? (114 ) (10 )End of period $ 42,163 $ 38,517 $ 33,310 $ 31,362 $ 28,920 assetsAverage assetsduring the $ 40,673 $ 36,002 $ 32,984 $ 30,626 $ 36,940 periodAverageadvisory fee 0.40 % 0.40 % 0.41 % 0.41 % 0.43 %during theperiodNumber of ETFs? end of the 68 67 67 67 77 period INTERNATIONALLISTED ETPs ($ in millions)Beginning of $ 28,875 $ 27,400 $ 26,304 $ 21,427 $ 23,015 period assetsAssets sold ? ? ? ? (778 )Inflows/ (64 ) (38 ) (1,052 ) 1,600 737 (outflows)Marketappreciation/ (1,437 ) 1,513 2,194 3,459 (1,537 )(depreciation)Fund closures ? ? (46 ) (182 ) (10 )End of period $ 27,374 $ 28,875 $ 27,400 $ 26,304 $ 21,427 assetsAverage assetsduring the $ 28,879 $ 28,123 $ 28,232 $ 25,082 $ 23,249 periodAverageadvisory fee 0.44 % 0.42 % 0.42 % 0.41 % 0.40 %during theperiodNumber of ETPs? end of the 245 242 238 244 254 period PRODUCTCATEGORIES ($ in millions)Commodity & CurrencyBeginning of $ 26,047 $ 25,122 $ 24,191 $ 19,748 $ 19,947 period assetsInflows/ (624 ) (254 ) (1,106 ) 1,325 622 (outflows)Marketappreciation/ (1,389 ) 1,179 2,037 3,118 (821 )(depreciation)End of period $ 24,034 $ 26,047 $ 25,122 $ 24,191 $ 19,748 assetsAverage assetsduring the $ 25,555 $ 25,676 $ 25,878 $ 22,964 $ 20,302 period U.S. Equity Beginning of $ 18,367 $ 15,612 $ 13,997 $ 12,151 $ 17,732 period assetsInflows/ 218 395 897 (241 ) (285 )(outflows)Marketappreciation/ 1,434 2,360 718 2,087 (5,296 )(depreciation)End of period $ 20,019 $ 18,367 $ 15,612 $ 13,997 $ 12,151 assetsAverage assetsduring the $ 19,293 $ 17,050 $ 15,141 $ 13,302 $ 16,011 period Emerging Market EquityBeginning of $ 8,539 $ 5,979 $ 5,413 $ 4,600 $ 6,400 period assetsInflows/ 1,662 1,399 257 (25 ) 69 (outflows)Marketappreciation/ 276 1,161 309 838 (1,869 )(depreciation)End of period $ 10,477 $ 8,539 $ 5,979 $ 5,413 $ 4,600 assetsAverage assetsduring the $ 9,871 $ 7,249 $ 5,917 $ 5,129 $ 5,919 period

Three Months Ended Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2021 2020 2020 2020 2020InternationalDeveloped Market EquityBeginning of period $ 9,414 $ 8,621 $ 8,839 $ 8,659 $ 13,011 assetsInflows/(outflows) 17 (191 ) (587 ) (965 ) (1,097 )Market appreciation/ 560 984 369 1,145 (3,255 )(depreciation)End of period assets $ 9,991 $ 9,414 $ 8,621 $ 8,839 $ 8,659 Average assets $ 9,793 $ 8,930 $ 8,835 $ 8,779 $ 11,453 during the period Fixed Income Beginning of period $ 3,324 $ 3,630 $ 3,530 $ 3,527 $ 3,585 assetsInflows/(outflows) 10 (330 ) 76 (53 ) 21 Market appreciation/ (73 ) 24 24 56 (79 )(depreciation)End of period assets $ 3,261 $ 3,324 $ 3,630 $ 3,530 $ 3,527 Average assets $ 3,253 $ 3,472 $ 3,605 $ 3,523 $ 3,653 during the period Leveraged & Inverse Beginning of period $ 1,487 $ 1,430 $ 1,350 $ 896 $ 1,138 assetsInflows/(outflows) (4 ) (118 ) (9 ) 312 12 Market appreciation/ 45 175 89 142 (254 )(depreciation)End of period assets $ 1,528 $ 1,487 $ 1,430 $ 1,350 $ 896 Average assets $ 1,564 $ 1,436 $ 1,482 $ 1,169 $ 1,147 during the period Alternatives Beginning of period $ 214 $ 229 $ 225 $ 244 $ 358 assetsInflows/(outflows) ? (26 ) (4 ) (29 ) (66 )Market appreciation/ 13 11 8 10 (48 )(depreciation)End of period assets $ 227 $ 214 $ 229 $ 225 $ 244 Average assets $ 223 $ 224 $ 226 $ 226 $ 328 during the period Closed ETPs Beginning of period $ ? $ 87 $ 121 $ 522 $ 1,444 assetsAssets sold ? ? ? ? (778 )Inflows/(outflows) ? 6 (1 ) (198 ) 188 Market appreciation/ ? 4 13 93 (312 )(depreciation)Fund closures . ? (97 ) (46 ) (296 ) (20 )End of period assets $ ? $ ? $ 87 $ 121 $ 522 Average assets $ ? $ 88 $ 132 $ 616 $ 1,376 during the period Headcount 227 217 211 214 210

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

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

Mar.31, Dec.31, 2021 2020 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 62,302 $ 73,425 Securities owned, at fair value 34,771 34,895 Accounts receivable 30,341 29,455 Income taxes receivable 126 ? Prepaid expenses 4,187 3,827 Other current assets 237 259 Total current assets 131,964 141,861 Fixed assets, net 7,432 7,579 Securities held-to-maturity 411 451 Deferred tax assets, net 6,215 8,063 Investments 13,849 8,112 Right of use assets ? operating leases 15,841 16,327 Goodwill 85,856 85,856 Intangible assets 601,247 601,247 Other noncurrent assets 180 180 Total assets $ 862,995 $ 869,676 LIABILITIES AND STOCKHOLDERS? EQUITY LIABILITIES Current liabilities: Fund management and administration payable $ 17,980 $ 19,564 Compensation and benefits payable 8,568 22,803 Deferred consideration ? gold payments 15,637 17,374 Operating lease liabilities 2,958 3,135 Income taxes payable ? 916 Accounts payable and other liabilities 11,415 10,207 Total current liabilities 56,558 73,999 Convertible notes 171,163 166,646 Deferred consideration ? gold payments 211,509 212,763 Operating lease liabilities 17,012 17,434 Total liabilities 456,242 470,842 Preferred stock ? Series A Non-Voting Convertible,par value $0.01; 14.750 shares authorized, issued and 132,569 132,569 outstanding STOCKHOLDERS? EQUITY Common stock, par value $0.01; 250,000 shares authorized:Issued and outstanding: 149,811 and 148,716 at March 1,498 1,487 31, 2021 and December31, 2020, respectively .Additional paid-in capital 314,274 317,075 Accumulated other comprehensive income 985 1,102 Accumulated deficit . (42,573 ) (53,399 )Total stockholders? equity 274,184 266,265 Total liabilities and stockholders? equity $ 862,995 $ 869,676

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

Three Months Ended Mar. 31, Mar. 31, 2021 2020Cash flows from operating activities: Net income/(loss) $ 15,147 $ (8,638 ) Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: Advisory fees received in gold, other precious (19,757 ) (13,860 ) metals and bitcoin Contractual gold payments 4,270 3,760 Stock-based compensation 3,143 3,239 Deferred income taxes 2,904 4,526 (Gain)/loss on revaluation of deferred (2,832 ) 2,208 consideration ? gold payments . Amortization of right of use asset 697 798 Amortization of issuance costs - convertible notes 429 ? Impairments 303 19,672 Depreciation and amortization 252 256 Gain on sale ? Canadian ETF business ? (2,877 ) Amortization of issuance costs - former credit ? 723 facility Other (235 ) (31 ) Changes in operating assets and liabilities: Securities owned, at fair value 124 (2,942 ) Accounts receivable 290 5,850 Prepaid expenses (362 ) (616 ) Gold, other precious metals and bitcoin 14,166 9,838 Other assets 5 139 Fund management and administration payable (1,470 ) 537 Compensation and benefits payable (14,245 ) (22,688 ) Income taxes receivable/payable (1,028 ) (2,032 ) Securities sold, but not yet purchased, at fair ? (112 ) value Operating lease liabilities (918 ) (926 ) Accounts payable and other liabilities 982 542 Net cash provided by/(used in) operating activities 1,865 (2,634 ) Cash flows from investing activities: Purchase of investments (5,500 ) ? Purchase of fixed assets (103 ) (50 ) Proceeds from held-to-maturity securities maturing 38 6,030 or called prior to maturity Proceeds from sale of Canadian ETF business, net ? 2,774 Net cash (used in)/provided by investing activities (5,565 ) 8,754 Cash flows from financing activities: Dividends paid (4,937 ) (5,136 ) Shares repurchased (2,630 ) (1,495 ) Repayment of debt ? (5,000 ) Proceeds from exercise of stock options 379 240 Net cash used in financing activities (7,188 ) (11,391 )Decrease in cash flows due to changes in foreign (235 ) (1,272 )exchange rateDecrease in cash and cash equivalents (11,123 ) (6,543 )Cash and cash equivalents ? beginning of year 73,425 74,972 Cash and cash equivalents ? end of period $ 62,302 $ 68,429 Supplemental disclosure of cash flow information: Cash paid for taxes $ 1,278 $ 1,147 Cash paid for interest $ ? $ 2,312

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.Other items: Impairment charges, an unrealized gain recognized on our investment in Securrency, interest expense from the amortization of discount arising from the bifurcation of the conversion option embedded in the convertible notes (prior to January 1, 2021, the effective date of Accounting Standards Update 2020-06, Debt Debt with Conversion and Other Options, Cash Conversion), a 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, a gain recognized upon the 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 Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,and Diluted 2021 2020 2020 2020 2020Earnings per Share:

$ 15,147 $ (13,497 ) $ (270 ) $ (13,250 ) $ (8,638 )Net income/(loss),as reportedDeduct/Add back:(Gain)/loss onrevaluation of (2,832 ) 22,385 8,870 23,358 2,208 deferredconsiderationDeduct: Unrealizedgain recognized onour investment in (179 ) ? ? ? ? Securrency, net ofincome taxesAdd back:Impairments, net of 245 ? 2,326 ? 19,672 income taxes (whereapplicable)Add back: Taxshortfalls uponvesting and 123 21 50 119 501 exercise ofstock-basedcompensation awardsAdd back: Interestexpense from theamortization ofdiscount arisingfrom the ? 314 286 42 ? bifurcation of theconversion optionembedded in theconvertible notes,net of 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 the ? ? ? ? (2,877 )sale of CanadianETF businessAdd back:Acquisition anddisposition-related ? ? ? 25 358 costs, net ofincome taxesAdjusted net income $ 12,504 $ 9,223 $ 11,037 $ 8,494 $ 11,224 Weighted averagecommon shares - 161,831 161,138 160,876 166,634 167,561 dilutedAdjusted earnings $ 0.08 $ 0.06 $ 0.07 $ 0.05 $ 0.07 per share - diluted Three Months EndedGross Margin and Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,Gross Margin 2021 2020 2020 2020 2020Percentage: Operating revenues $ 72,830 $ 67,059 $ 64,640 $ 58,126 $ 63,874 Less: Fundmanagement and (15,521 ) (16,350 ) (15,219 ) (14,461 ) (14,485 )administrationGross margin $ 57,309 $ 50,709 $ 49,421 $ 43,665 $ 49,389 Gross margin 78.7 % 75.6 % 76.5 % 75.1 % 77.3 %percentage

Three Months EndedAdjusted OperatingIncome and Adjusted Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,Operating 2021 2020 2020 2020 2020Income Margin: Operating revenues $ 72,830 $ 67,059 $ 64,640 $ 58,126 $ 63,874 Operating income $ 18,607 $ 12,907 $ 14,744 $ 11,797 $ 15,634 Add back:Acquisition anddisposition-related ? ? ? 33 383 costs, beforeincome taxesAdjusted operating $ 18,607 $ 12,907 $ 14,744 $ 11,830 $ 16,017 incomeAdjusted operating 25.5 % 19.2 % 22.8 % 20.4 % 25.1 %income margin

Three Months EndedAdjusted Total Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,Operating Expenses: 2021 2020 2020 2020 2020Total operating $ 54,223 $ 54,152 $ 49,896 $ 46,329 $ 48,240 expensesDeduct: Acquisitionanddisposition-related ? ? ? (33 ) (383 )costs, beforeincome taxesAdjusted total $ 54,223 $ 54,152 $ 49,896 $ 46,296 $ 47,857 operating expenses

Three Months EndedAdjusted Income Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,Before Income 2021 2020 2020 2020 2020Taxes:Income/(loss) $ 13,178 $ (11,297 ) $ 1,138 $ (14,054 ) $ (11,009 )before income taxesDeduct/Add back:(Gain)/loss onrevaluation of (2,832 ) 22,385 8,870 23,358 2,208 deferredconsiderationAdd back: Lossrecognized uponreduction of a 5,171 ? ? ? 5,981 tax-relatedindemnificationassetDeduct: Unrealizedgain recognized onour investment in (237 ) ? ? ? ? Securrency, beforeincome taxesAdd back:Impairments, before 303 ? 3,080 ? 19,672 income taxesAdd back: Interestexpense from theamortization ofdiscount arisingfrom the ? 416 379 55 ? bifurcation of theconversion optionembedded in theconvertible notes,before income taxesDeduct: Gainarising from anadjustment to theestimated fairvalue of ? ? (225 ) (868 ) ? considerationreceived from theexit of investmentin AdvisorEngineAdd back: Loss onextinguishment of ? ? ? 2,387 ? debt, before incometaxesDeduct: Gainrecognized upon ? ? ? ? (2,877 )sale of CanadianETF businessAdd back:Acquisition anddisposition-related ? ? ? 33 383 costs, beforeincome taxesAdjusted income $ 15,583 $ 11,504 $ 13,242 $ 10,911 $ 14,358 before income taxes

Three Months Ended

Adjusted Income TaxExpense and Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,Adjusted Effective 2021 2020 2020 2020 2020 Income Tax Rate: Adjusted income before income taxes $ 15,583 $ 11,504 $ 13,242 $ 10,911 $ 14,358 (above) Income tax $ (1,969 ) $ $ $ ) $ )(benefit)/expense 2,200 1,408 (804 (2,371Add back: Taxbenefit arisingfrom reduction of a ? ? tax-related 5,171 ? 5,981indemnificationassetDeduct: Taxshortfalls uponvesting and (123 ) (21 ) (50 ) ) (501 )exercise of (119stock-basedcompensation awardsDeduct: Tax expenseon unrealized gain recognized on our (58 ) ? ? ? ? investment inSecurrencyAdd back: Tax benefit arising 58 ? 754 ? ? from impairments .Add back: Taxbenefit arisingfrom theamortization ofdiscount associated 102 93 13 ? with the ?bifurcation of theconversion optionembedded in theconvertible notesAdd back: Taxbenefit arising from loss on ? ? ? 477 ? extinguishment ofdebtAdd back: Releaseof a deferred taxasset valuationallowancerecognized on interest ? ? ? 2,842 ? carryforwardsarising from debtpreviouslyoutstanding in theUnited KingdomAdd back: Taxbenefit arisingfrom acquisition ? 8 25 and ? ?disposition-relatedcostsAdjusted income tax $ 3,079 $ $ $ $ expense 2,281 2,205 2,417 3,134Adjusted effective 19.8 % % % 22.2 % 21.8 %income tax rate 19.8 16.7

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:

-- adverse market developments arising from the COVID-19 pandemic could negatively impact our assets under management, resulting in a decline in our revenues and other potential operational challenges; -- 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 or, increase the cost of borrowing upon a refinancing; -- 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 internationally. 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, 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.