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The call emphasized strong, broad-based organic growth (record AUM, $5.9B quarterly inflows, 17% annualized organic growth), substantial revenue and margin expansion (revenues +48% YoY, adjusted margin +770 bps), and strategic, accretive M&A (Atlantic House, Ceres) alongside tangible innovation in tokenization. Headwinds mentioned were manageable and largely tied to integration, temporary share-count/interest effects from financing, and volatility-driven variability in transactional revenue and performance fees. Given the weight of material positive operating and financial trends versus modest and expected short-term costs/variability, the overall tone is constructive.
WisdomTree's forward guidance holds a 26–28% compensation-to-revenue ratio (expected to trend to the upper half), raises gross margin guidance by 1 percentage point to 83–84%, increases discretionary spending by $3 million, and forecasts third‑party distribution expense of $20–$24 million; interest expense is ~ $53 million for the year (≈$15M in Q2, ≈$14M in Q3 and Q4), interest income was increased $2M to $10M, adjusted tax rate is ~24–25% (was 24%), and diluted shares were 152 million in Q1, expected to rise to ~155–158M in Q2 after the convertible refinancing and then decline to ~154M in H2 following cash retirements of the 2026/2029 notes; the Atlantic House acquisition (purchase price $200M financed with new convertibles at a 4.5% coupon and $21.58 conversion price) adds ~ $4B AUM, generates 53 bps in advisory fees plus 25 bps on $1.5B AUA and ~$13M of 2025 structuring fees (overall ~95 bps revenue yield), and is expected to lift firmwide revenue yield by ~2 bps and be modestly accretive to margins.
Assets under management reached a record $152.6 billion at quarter-end (fifth consecutive quarter of record AUM) and the firm reported global AUM of approximately $164.3 billion post-close—an increase of nearly $12 billion or ~8% from March 31 driven by net inflows, market appreciation and the Atlantic House acquisition.
Generated $5.9 billion of net inflows in Q1, reflecting a 17% annualized organic growth rate. Inflows were broad-based: $3.1 billion in Europe, $2.6 billion in the U.S., $100 million in digital assets and $75 million in private assets, with inflows across 7 of 8 major product categories.
Revenues were $159.5 million in the quarter, up 8% sequentially and up 48% year-over-year. Adjusted net income was $40.6 million ($0.27 per share), and adjusted operating margin expanded ~770 basis points year-over-year.
Closed acquisition of Atlantic House (≈$4 billion AUM) for $200 million financed with new convertible notes. Atlantic House generates ~53 bps advisory fees and an overall revenue yield of ~95 bps; the deal is expected to increase WisdomTree's overall revenue yield by ~2 basis points and be modestly accretive to margins and earnings.
Ceres contributed approximately $8 million in revenue this quarter (≈$5.2M management fees and $3M performance fees), expanding WisdomTree's private-assets capability and adding higher-yielding revenue streams to the business mix.
Digital AUM reached a record $867 million with $98 million of inflows in Q1 (and ~+$50M in April post-deck). The tokenized money market fund (WTGXX) is a 1940 Act product with SEC exemptive relief for intraday secondary-market trading and is being adopted in both crypto-native and traditional use cases (e.g., partnerships like Stable C).
Management increased gross margin guidance by 1 percentage point to a range of 83%–84%, kept compensation-to-revenue guidance at 26%–28% (but noted it will trend toward the upper half given Atlantic House), and provided specific guidance on interest expense (~$53M for the year) and tax rate (~24%–25%).
Greetings, and welcome to the WisdomTree Q1 2026 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Jessica Zaloom, Head of Corporate Communications. Thank you, Jessica. You may begin.
Good morning. Before we begin, I would like to reference our legal disclaimer available in today's presentation. This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. A number of factors could cause actual results to differ materially from the results discussed in forward-looking statements, including, but not limited to, the risks set forth in this presentation, in the Risk Factors section of WisdomTree's annual report on Form 10-K for the year ended December 31, 2025, and in subsequent reports filed with or furnished to the Securities and Exchange Commission. WisdomTree assumes no duty and does not undertake to update any forward-looking statements. Now it is my pleasure to turn the call over to WisdomTree's CFO, Bryan Edmiston.
Thank you, Jessica, and good morning, everyone. I'll begin with a review of our first quarter results, followed by updates to our forward-looking guidance before turning the call over to Jarrett and Jono for additional business updates. . Our assets under management reached a record $152.6 billion, marking our fifth consecutive quarter of record AUM and up 6% from year-end driven by net inflows and market appreciation. Growth was broad-based with record AUM across our U.S., European and digital asset platforms. We g...