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WisdomTree Announces Second Quarter 2019 Results

$2.5 million net income, or $7.8 million net income, as adjusted

$0.01 diluted EPS for the quarter, $0.05 as adjusted

Declares $0.03 quarterly dividend

NEW YORK, July 26, 2019 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (WETF), an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager, today reported net income of $2.5 million or $0.01 diluted EPS in the second quarter.  Adjusted net income (a non-GAAP measure1) was $7.8 million1 or $0.05 diluted EPS1.  This compares to net income of $16.7 million or $0.10 diluted EPS (as adjusted, $14.3 million1 or $0.09 diluted EPS1) in the second quarter of last year and net income of $8.8 million or $0.05 diluted EPS (as adjusted, $7.7 million1 or $0.05 diluted EPS1) in the first quarter of 2019.

WisdomTree CEO and President Jonathan Steinberg said, “We experienced our third consecutive quarter of net inflows, led by the strength of our European gold franchise, a category with significant demand in the current macro environment. Overall, we are seeing an improvement on our absolute and relative growth trends; this is a direct result of the investments we’ve made to expand and diversify our product line-up, and transform our distribution reach and approach, including an award-winning solutions program.”

Steinberg continued, “There are undeniable signs our distribution strategy is working. Over the past 12 months, we achieved 20% organic growth from clients using our solutions program or on platforms where we have commission-free agreements in place; this is multiples faster than non-solutions or non-platform clients.”  

“We have worked tirelessly over the past few years to remain at the forefront of product innovation, diversify our business to reduce volatility, and to transform our distribution models. We are beginning to realize the benefits of our efforts and the investments we have made into the business,” Steinberg concluded.

  Three Months Ended
  Change From
    June 30,
2019
      Mar. 31,
2019
      June 30,
2018
      Mar. 31,
2019
      June 30,
2018
 
Consolidated Operating Highlights ($, in billions):                                      
AUM $ 60.4     $ 59.1     $ 60.0       2.2 %     0.7 %
Net inflows/(outflows) $ 0.3     $ 0.6     $ (1.2 )     (39.6 %)     n/a  
Average AUM $ 58.6     $ 57.7     $ 61.3       1.5 %     (4.5 %)
Average advisory fee   0.45 %     0.46 %     0.48 %     -0.01       -0.03  
                                       
                                       
Consolidated Financial Highlights ($, in millions, except per share amounts):                                      
Operating revenues $ 66.3     $ 65.5     $ 74.8       1.2 %     (11.3 %)
Net income $ 2.5     $ 8.8     $ 16.7       (71.9 %)     (85.2 %)
Diluted earnings per share $ 0.01     $ 0.05     $ 0.10     $ (0.04 )   $ (0.09 )
Operating income margin   18.0 %     16.3 %     19.4 %     1.7       -1.4  
Non-GAAP1:                                      
Net income, as adjusted $ 7.8     $ 7.7     $ 14.3       0.1 %     (45.4 %)
Diluted earnings per share, as adjusted $ 0.05     $ 0.05     $ 0.09     $ 0.00     $ (0.04 )
Operating income margin, as adjusted   20.2 %     19.9 %     30.0 %     0.3       -9.8  
                                       

Recent Business Developments

Company News

  • In May 2019, LPL Financial LLC announced plans to reduce transaction charges from $9.00 to $4.95 for WisdomTree ETFs on the firm’s Strategic Asset Management (SAM) and Strategic Wealth Management (SWM) platforms. 
  • In June 2019, Pershing announced that it expanded its FundVest® ETF no-transaction-fee platform adding 43 additional WisdomTree ETFs.

Product News

  • In May 2019, we launched the Modern Tech Platform Fund (PLAT) on the NYSE Arca, offering access to companies generating substantial revenue from platform business models.
  • In May 2019, we announced our partnership with Swissquote, Switzerland’s largest execution-only broker, and now offer ten equity ETFs with 28 asset classes on the Swissquote platform; and we announced our partnership with Moneymate, a financial data provider for financial advisors and institutions in Italy. The platform now hosts data on four WisdomTree model portfolios.
  • In June 2019, we announced the addition of 8 WisdomTree ETFs to the TD Ameritrade ETF Market Center commission-free menu.
  • In July 2019, we marked the 3-year anniversary of the launch of our first suite of ETFs in Canada.

Assets Under Management and Net Flows

Assets under management (“AUM”) were $60.4 billion at June 30, 2019, up 11.6% on a year to date basis and up slightly from June 30, 2018.

Net inflows were $0.3 billion for the second quarter of 2019, primarily due to strong flows into our commodity, emerging markets and fixed income products.  Our two largest currency hedged products (HEDJ/DXJ) had outflows of $0.6 billion in the second quarter.  On a year to date basis, net inflows were $0.9 billion, or $2.7 billion excluding outflows from HEDJ/DXJ.

Second Quarter and Year to Date Financial Discussion

Our operating results for the prior year periods reported in this press release are not directly comparable to the current year periods due to our acquisition of ETFS, which was completed on April 11, 2018.  We refer to the acquisition throughout this press release as the ETFS Acquisition.

Operating Revenues

Advisory Fees

Advisory fees of $65.6 million decreased 11.0% from the second quarter of 2018 due to lower average AUM of our U.S. Business segment, partly offset by higher average AUM of our International Business segment as well as the recognition of a full quarter of revenues associated with the ETFS acquired business.  Advisory fees increased 1.2% from the first quarter of 2019 primarily due to higher average AUM of our U.S. Business segment and one additional revenue day in the current quarter, partly offset by lower average global advisory fees due to a shift in product mix.

Our average global advisory fee was 0.45%, 0.46% and 0.48% during the second quarter of 2019, first quarter of 2019 and second quarter of 2018, respectively.  The change as compared to the first quarter of 2019 was due to a change in product mix globally.  The change as compared to the second quarter of 2018 was primarily due to a change in product mix in our U.S. Business segment.

Other Income 

Other income of $0.7 million decreased 33.2% from the second quarter of 2018 primarily due to lower creation/redemption fees of our International Business segment.  Other income was essentially unchanged from the first quarter of 2019. 

Margins

Gross margin for our U.S. Business segment was 80.3%1 in the second quarter of 2019 as compared to 83.4%1 in the second quarter of 2018 and 80.4%1 in the first quarter of 2019.  The decline as compared to the second quarter of 2018 was primarily due to lower revenue capture and lower average AUM.  Gross margin for our International Business segment was 69.5%1 in the second quarter of 2019 as compared to 73.2%1 in the second quarter of 2018 and 70.1%1 in the first quarter of 2019.  These declines were primarily due to lower revenue capture when compared to the second quarter of 2018, as well as higher product operational expenses and costs associated with preparing our products for Brexit.

Operating income margin on a consolidated basis was 18.0% in the second quarter of 2019 (as adjusted 20.2%1) as compared to 19.4% in the second quarter of 2018 (as adjusted 30.0%1) and 16.3% in the first quarter of 2019 (as adjusted 19.9%1).

Operating Expenses

Total operating expenses were $54.4 million for the second quarter of 2019, down 9.7% from the second quarter of 2018.  Excluding acquisition-related costs, operating expenses increased 3.9%.  Operating expenses decreased slightly from the first quarter of 2019.   

  • Compensation and benefits expense increased 10.4% from the second quarter of 2018 to $21.3 million due to severance expense of $1.5 million and higher incentive compensation.  These expenses were essentially unchanged from the first quarter of 2019 as lower payroll taxes and lower severance expense in the current quarter were partly offset by higher accrued incentive compensation.  Payroll taxes in the first quarter of 2019 are seasonally higher due to bonus payments made during the period.  Headcount of our U.S. Business segment was 143, 141 and 155 and our International Business segment was 71, 75 and 76 at June 30, 2019, March 31, 2019 and June 30, 2018, respectively.

  • Fund management and administration expense increased 6.5% from the second quarter of 2018 to $15.6 million due to the recognition of a full quarter of expense associated with the ETFS acquired business, partly offset by lower average AUM of our U.S. Business segment.  These expenses increased 2.7% from the first quarter of 2019 primarily due to higher product operational expenses and costs associated with preparing our products for Brexit recognized by our International Business segment and higher average AUM of our U.S. Business segment.  We had 79 U.S. listed ETFs and 457 International listed ETPs at the end of the quarter.

  • Marketing and advertising expense decreased 23.0% from the second quarter of 2018 to $2.9 million due to lower global spending.  These expenses increased 8.6% from the first quarter of 2019 due to higher spending of our U.S. Business segment.

  • Sales and business development expense decreased 7.4% and 5.7% from the second quarter of 2018 and first quarter of 2019, respectively, to $4.2 million primarily due to lower spending on sales related activities of our U.S. Business segment.

  • Contractual gold payments expense increased 14.5% and 0.4% from the second quarter of 2018 and first quarter of 2019, respectively, to $3.1 million.  This expense was associated with the payment of 2,375 ounces of gold (2,085 ounces for the period April 11 through June 30, 2018) and was calculated using an average daily spot price of $1,310, $1,302 and $1,304 per ounce, during the second quarter of 2019, second quarter of 2018 and first quarter of 2019, respectively.

  • Professional and consulting fees decreased 16.9% and 12.6% from the second quarter of 2018 and first quarter of 2019, respectively, to $1.3 million due to lower spending on corporate consulting-related expenses.

  • Occupancy, communications and equipment expense decreased 1.7% and 4.3% from the second quarter of 2018 and first quarter of 2019 to $1.5 million.  The decrease from the second quarter of 2018 was due to the closure of our office in Japan partly offset by additional office space associated with the ETFS Acquisition.  The decrease from the first quarter of 2019 was due to the Japan office closure.

  • Depreciation expense decreased 21.7% from the second quarter of 2018 to $0.3 million primarily due to the closure of our office in Japan.  This expense was essentially unchanged from the first quarter of 2019.

  • Third-party distribution fees increased 15.2% from the second quarter of 2018 to $1.9 million primarily due to higher fees paid for platform relationships partly offset by lower fees paid to our third-party marketing agent in Latin America.  These expenses decreased 20.0% from the first quarter of 2019 primarily due to the recognition of one-time fees for a platform relationship during that period.

  • Acquisition-related costs decreased 99.6% and 89.5% from the second quarter of 2018 and first quarter of 2019, respectively, to $0.03 million as the integration of ETFS is essentially complete.  We expect to have additional acquisition-related expenses in the third quarter as we rationalize our product offering in Europe following the ETFS Acquisition.

  • Other expenses were essentially unchanged from the second quarter of 2018.  These expenses increased 9.8% from the first quarter of 2019 to $2.3 million due to higher levels of administrative spending.

Other Income/(Expenses)

  • Interest expense increased 23.5% from the second quarter of 2018 to $2.9 million due to higher interest rates as well as the recognition of a full quarter of expense as borrowing under our term loan commenced on April 11, 2018.  This expense was essentially unchanged from the first quarter of 2019.

  • We recognized a (loss)/gain on revaluation of deferred consideration of ($4.0) million, $9.9 million and $4.4 million during the second quarter of 2019, second quarter of 2018 and first quarter of 2019, respectively.  The loss arose in the current quarter due to an increase in the price of gold, partly offset by a flattening of the forward-looking gold curve when compared to the forward-looking gold curve on March 31, 2019, the date on which the deferred consideration was last measured.  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 income increased 33.7% and 5.0% from the second quarter of 2018 and first quarter of 2019, respectively, to $0.8 million primarily due to higher paid-in-kind interest on notes receivable from AdvisorEngine Inc.

  • Other gains and losses, net were $0.3 million, ($0.5) million and ($4.6) million during the second quarter of 2019, second quarter of 2018 and first quarter of 2019, respectively.  Included in the first quarter of 2019 is a charge of $4.3 million arising from a release of a tax-related indemnification asset upon the expiration of the statute of limitations.  The indemnification arose from tax exposures assumed in the ETFS Acquisition.  An equal and offsetting benefit has been recognized in income tax expense.  In addition, gains and losses 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 quarter ended June 30, 2019 of 59.1% resulted in income tax expense of $3.6 million. Our tax rate differs from the federal statutory tax rate of 21% primarily due to a valuation allowance on foreign net operating losses, non-deductible executive compensation, a non-deductible loss on revaluation of deferred consideration and state and local taxes, partly offset by a lower tax rate on foreign earnings.

Our adjusted effective income tax rate was 32.7%1.

Six Month Results

Total operating revenues decreased 1.4% to $131.8 million for the six months ended June 30, 2019 due to lower average AUM of our U.S. Business segment, partly offset by higher revenues earned from the ETFS acquired business, the acquisition of which was completed on April 11, 2018.  Total operating expenses increased 3.1% to $109.2 million due to higher expenses of the ETFS acquired business, which were recognized for the entire six months of 2019 and higher compensation expense.  These items were partly offset by lower acquisition-related costs and lower non-compensation expenses of the U.S. Business segment.

Other income/(expenses) for the six months ended June 30, 2019 includes ($5.8) million of interest expense, a gain on revaluation of deferred consideration of $0.4 million, interest income of $1.6 million, impairment of ($0.6) million and other net losses of ($4.3) million.  See quarterly discussion above for additional information regarding the other net losses.

Balance Sheet

As of June 30, 2019, we had total assets of $923.9 million which consisted primarily of intangible assets and goodwill of $689.1 million, and cash and securities owned of $108.8 million.  There were approximately 155.1 million shares of our common stock outstanding as of June 30, 2019. 

Quarterly Dividend

Our Board of Directors declared a quarterly cash dividend of $0.03 per share of our common stock. The dividend will be paid on August 21, 2019 to stockholders of record as of the close of business on August 7, 2019.

Conference Call

WisdomTree will discuss its results and operational highlights during a conference call on Friday, July 26, 2019 at 9:00 a.m. ET. The call-in number will be (877) 303-7209. Anyone outside the U.S. or Canada should call (970) 315-0420. The slides used during the presentation will be available at http://ir.wisdomtree.com. For those unable to join the conference call at the scheduled time, an audio replay will be available on http://ir.wisdomtree.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, the risks described below. If one or more of these or other risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this press release completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

In particular, forward-looking statements in this press release may include statements about:

  • 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, 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, 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.

  • Withdrawals or broad changes in investments in our ETPs by investors with significant positions may negatively impact revenues and operating margins.

  • 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 ETFs that invest in foreign securities and we therefore have substantial exposure to foreign market conditions and are subject to currency exchange rate risks.

  • Net outflows in our two largest currency hedged ETFs – the WisdomTree Europe Hedged Equity Fund and the WisdomTree Japan Hedged Equity Fund – have had, and in the future could continue to have, a negative impact on our revenues.

  • 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 and ETFs have a limited track record, and poor investment performance could cause our revenues to decline.

  • We depend on third parties to provide many critical services to operate our business and our ETPs and ETFs. 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, please see the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Therefore, these forward-looking statements do not represent our views as of any date other than the date of this press release.

About WisdomTree

WisdomTree Investments, Inc., through its subsidiaries in the U.S., Europe and Canada (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 $61.2 billion in assets under management globally.

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

_______________
1    See “Non-GAAP Financial Measurements.”

Contact Information:

Investor Relations                                               
WisdomTree Investments, Inc.                         
Jason Weyeneth, CFA                                        
+1.917.267.3858                                                                 
jweyeneth@wisdomtree.com                           

Media Relations
WisdomTree Investments, Inc.
Jessica Zaloom
+1.917.267.3735
jzaloom@wisdomtree.com

                 
WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
                                                         
  Three Months Ended
  % Change From
  Six Months Ended
    June 30,
2019
      Mar. 31,
2019
      June 30,
2018
    Mar. 31,
2019

  June 30,
2018

    June 30,
2019
      June 30,
2018
    %
Change

Operating Revenues:                                                        
Advisory fees $ 65,627     $ 64,840     $ 73,778       1.2 %     -11.0 %   $ 130,467     $ 132,234       -1.3 %
Other income   666       645       997       3.3 %     -33.2 %     1,311       1,445       -9.3 %
Total revenues   66,293       65,485       74,775       1.2 %     -11.3 %     131,778       133,679       -1.4 %
Operating Expenses:                                                        
Compensation and benefits   21,300       21,301       19,301       0.0 %     10.4 %     42,601       38,133       11.7 %
Fund management and administration   15,576       15,166       14,621       2.7 %     6.5 %     30,742       25,533       20.4 %
Marketing and advertising   2,910       2,680       3,778       8.6 %     -23.0 %     5,590       6,973       -19.8 %
Sales and business development   4,171       4,422       4,503       -5.7 %     -7.4 %     8,593       8,316       3.3 %
Contractual gold payments   3,110       3,098       2,715       0.4 %     14.5 %     6,208       2,715     128.7 %
Professional and consulting fees   1,296       1,482       1,560       -12.6 %     -16.9 %     2,778       3,196       -13.1 %
Occupancy, communications and equipment   1,548       1,618       1,574       -4.3 %     -1.7 %     3,166       2,937       7.8 %
Depreciation and amortization   264       269       337       -1.9 %     -21.7 %     533       692       -23.0 %
Third-party distribution fees   1,919       2,400       1,666       -20.0 %     15.2 %     4,319       3,391       27.4 %
Acquisition-related costs   33       313       7,928       -89.5 %     -99.6 %     346       9,990       -96.5 %
Other   2,255       2,053       2,261       9.8 %     -0.3 %     4,308       4,051       6.3 %
Total expenses   54,382       54,802       60,244       -0.8 %     -9.7 %     109,184       105,927       3.1 %
Operating income   11,911       10,683       14,531       11.5 %     -18.0 %     22,594       27,752       -18.6 %
Other Income/(Expenses):                                                        
Interest expense   (2,910 )     (2,892 )     (2,356 )     0.6 %     23.5 %     (5,802 )     (2,356 )   146.3 %
(Loss)/gain on revaluation of deferred consideration – gold payments   (4,037 )     4,404       9,898        n/a        n/a       367       9,898       -96.5 %
Interest income   818       779       612       5.0 %     33.7 %     1,597       1,574       1.5 %
Impairment         (572 )            n/a        n/a       (572 )            n/a  
Other gains and losses, net   284       (4,627 )     (501 )      n/a        n/a       (4,343 )     (762 )   469.9 %
Income before income taxes   6,066       7,775       22,184       -22.0 %     -72.7 %     13,841       36,106       -61.7 %
Income tax expense/(benefit)   3,587       (1,049 )     5,460        n/a       -34.3 %     2,538       9,958       -74.5 %
Net income $ 2,479     $ 8,824     $ 16,724       -71.9 %     -85.2 %   $ 11,303     $ 26,148       -56.8 %
Earnings per share – basic $ 0.01     $ 0.05     $ 0.10                 $ 0.07     $ 0.17        
Earnings per share – diluted $ 0.01     $ 0.05     $ 0.10                 $ 0.07     $ 0.17        
Weighted average common shares – basic   151,818       151,625       149,056                   151,722       142,230        
Weighted average common shares – diluted   167,249       166,811       163,346                   166,855       149,979        
                                                         


WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
(Unaudited)
 
The following tables set forth the pre-tax operating results for our U.S. Business and International Business segments.
 
U.S. Business Segment
                 
  Three Months Ended
  % Change From
  Six Months Ended
    June 30,
2019
      Mar. 31,
2019
      June 30,
2018
    Mar. 31,
2019
    June 30,
2018
      June 30,
2019
      June 30,
2018
    %
Change

Operating Revenues:                                                        
Advisory fees $ 43,070     $ 42,517     $ 52,931       1.3 %     -18.6 %   $ 85,587     $ 108,449       -21.1 %
Other income   76       106       162       -28.3 %     -53.1 %     182       309       -41.1 %
Total revenues   43,146       42,623       53,093       1.2 %     -18.7 %     85,769       108,758       -21.1 %
Operating Expenses                                                        
Compensation and benefits   16,696       16,779       14,526       -0.5 %     14.9 %     33,475       30,897       8.3 %
Fund management and administration   8,505       8,340       8,802       2.0 %     -3.4 %     16,845       17,775       -5.2 %
Marketing and advertising   2,336       2,162       2,987       8.0 %     -21.8 %     4,498       5,830       -22.8 %
Sales and business development   2,867       3,359       3,446       -14.6 %     -16.8 %     6,226       6,901       -9.8 %
Professional and consulting fees   1,055       1,072       1,134       -1.6 %     -7.0 %     2,127       2,459       -13.5 %
Occupancy, communications and equipment   1,211       1,283       1,309       -5.6 %     -7.5 %     2,494       2,534       -1.6 %
Depreciation and amortization   242       246       314       -1.6 %     -22.9 %     488       653       -25.3 %
Third-party distribution fees   1,867       2,338       1,621       -20.1 %     15.2 %     4,205       3,270       28.6 %
Acquisition-related costs         11       6,773       n/a       n/a       11       7,970       -99.9 %
Other   1,628       1,586       1,726       2.6 %     -5.7 %     3,214       3,379       -4.9 %
Total expenses   36,407       37,176       42,638       -2.1 %     -14.6 %     73,583       81,668       -9.9 %
Operating income   6,739       5,447       10,455       23.7 %     -35.5 %     12,186       27,090       -55.0 %
Other Income/(Expenses):                                                        
Interest expense   (194 )     (192 )     (173 )     1.0 %     12.1 %     (386 )     (173 )     123.1 %
Interest income   818       779       612       5.0 %     33.7 %     1,597       1,574       1.5 %
Impairment         (572 )           n/a       n/a       (572 )           n/a  
Other gains and losses, net   (54 )     145       (66 )     n/a       -18.2 %     91       (292 )     n/a  
Income before income taxes $ 7,309     $ 5,607     $ 10,828       30.4 %     -32.5 %   $ 12,916     $ 28,199       -54.2 %
Operating income margin   15.6 %     12.8 %     19.7 %                 14.2 %     24.9 %      


International Business Segment                
  Three Months Ended
  % Change From
  Six Months Ended
    June 30,
2019
      Mar. 31,
2019
      June 30,
2018
    Mar. 31,
2019
    June 30,
2018
      June 30,
2019
      June 30,
2018
    %
Change

Operating Revenues:                                                        
Advisory fees $ 22,557     $ 22,323     $ 20,847       1.0 %     8.2 %   $ 44,880     $ 23,785       88.7 %
Other income   590       539       835       9.5 %     -29.3 %     1,129       1,136       -0.6 %
Total revenues   23,147       22,862       21,682       1.2 %     6.8 %     46,009       24,921       84.6 %
Operating Expenses:                                                        
Compensation and benefits   4,604       4,522       4,775       1.8 %     -3.6 %     9,126       7,236       26.1 %
Fund management and administration   7,071       6,826       5,819       3.6 %     21.5 %     13,897       7,758       79.1 %
Marketing and advertising   574       518       791       10.8 %     -27.4 %     1,092       1,143       -4.5 %
Sales and business development   1,304       1,063       1,057       22.7 %     23.4 %     2,367       1,415       67.3 %
Contractual gold payments   3,110       3,098       2,715       0.4 %     14.5 %     6,208       2,715       128.7 %
Professional and consulting fees   241       410       426       -41.2 %     -43.4 %     651       737       -11.7 %
Occupancy, communications and equipment   337       335       265       0.6 %     27.2 %     672       403       66.7 %
Depreciation and amortization   22       23       23       -4.3 %     -4.3 %     45       39       15.4 %
Third-party distribution fees   52       62       45       -16.1 %     15.6 %     114       121       -5.8 %
Acquisition-related costs   33       302       1,155       -89.1 %     -97.1 %     335       2,020       -83.4 %
Other   627       467       535       34.3 %     17.2 %     1,094       672       62.8 %
Total expenses   17,975       17,626       17,606       2.0 %     2.1 %     35,601       24,259       46.8 %
Operating income   5,172       5,236       4,076       -1.2 %     26.9 %     10,408       662       1,472.2 %
Other Income/(Expenses):                                                        
Interest expense   (2,716 )     (2,700 )     (2,183 )     0.6 %     24.4 %     (5,416 )     (2,183 )     148.1 %
(Loss)/gain on revaluation of deferred consideration – gold payments   (4,037 )     4,404       9,898       n/a       n/a       367       9,898       -96.3 %
Other gains and losses, net   338       (4,772 )     (435 )     n/a       n/a       (4,434 )     (470 )     843.4 %
(Loss)/income before income taxes $ (1,243 )   $ 2,168     $ 11,356       n/a       n/a     $ 925     $ 7,907       -88.3 %
Operating income margin   22.3 %     22.9 %     18.8 %                 22.6 %     2.7 %      


...
     
WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
     
    June 30,
2019
      December 31,
2018
 
    (Unaudited)          
ASSETS              
Current assets:              
Cash and cash equivalents $ 79,611     $ 77,784  
Securities owned, at fair value   9,095       8,873