WisdomTree (WT) Q3 2026 earnings review
WisdomTree customer inflows rebound, but its farmland fundraising stalls
WisdomTree, an asset manager known for exchange-traded funds, pulled in more customer money while its new private farmland business stalled. Revenue rose 43% from a year ago, and tight cost control lifted its operating margin excluding one-offs above 43%. President Jarrett Lilien credited consistent customer inflows, which rebounded to $4.6 billion on strong bond and blockchain fund demand.
| Ending assets from businesses owned a year ago | +20% 25% total asset growth to $171.0B (by our math) |
|---|---|
| Operating revenue | $179.4M +43% from a year ago (+1% from last quarter) |
| Operating margin, excluding one-offs | 43.1% +4.8 percentage points from a year ago |
| Net customer inflows | $4.6B $3.1B last quarter and $2.2B a year ago |
⚖️ Verdict: 🟢 Bullish
The story got better because organic customer inflows accelerated in both traditional bond funds and blockchain-based funds, easing fears that growth relied only on acquisitions. One caution: the newly acquired Ceres farmland business recorded zero net inflows and a lower earnout valuation, while convertible debt pushed the diluted share count above the company's second-half plan.
The question now is whether the recently acquired farmland and UK derivatives businesses can raise new money fast enough to lift the firm's overall fee rate. Either the new European structured funds and the second farmland fund attract buyers, or fee rates stay flat as customers favour cheaper bond funds. Fourth-quarter private asset inflows and annual farmland performance fees will tell.
🐂 Bull Case
Cost Discipline Lifted Operating Margin Above 43%
"The breadth and consistency of our organic growth, coupled with expanding distribution capabilities and continued operating discipline, are driving significant operating leverage and margin expansion," president Jarrett Lilien said. Operating margin, excluding one-offs, reached 43.1%, up 4.8 percentage points from a year ago and 0.5 points from last quarter.
The asset manager kept total operating expenses flat from last quarter at $105.3 million, even after adding 24 employees to reach 438 staff. Relative to sales, employee pay and benefits dropped 1.9 percentage points from a year ago to 25.0% of revenue, while fund management and administration costs (the fees paid to third parties to run the funds) fell 0.8 points to 17.0%.
What to watch: fourth-quarter employee pay as a share of revenue. Staying below the 26% to 28% full-year target range would confirm that the new businesses can scale without adding proportional payroll.
Bond Funds Drove a Rebound in Customer Inflows
WisdomTree runs exchange-traded products (ETPs), which are investment funds traded on stock exchanges in the US and Europe. Customer net inflows rose to $4.6 billion this quarter, rebounding from $3.1 billion last quarter and $2.2 billion a year ago. That equals an 11.3% annualized inflow growth rate by our math.
- Fixed income funds: $2.7 billion of net inflows, up from $320 million last quarter
- US listed funds: $2.4 billion of net inflows, more than double last quarter's $1.1 billion
- European listed funds: $1.7 billion of net inflows, down from $2.1 billion last quarter
- Ending assets from businesses owned a year ago: up 20.3% by our math, vs 24.6% total growth
The company also launched two European funds built by Atlantic House, the UK derivatives specialist it bought in May, marking "the first actively managed autocallable ETFs in Europe". What to watch: customer inflows into the new Alternatives category next quarter. A pickup from this quarter's $52 million would show the acquired UK strategies are winning buyers across Europe.
Onchain Assets Rebounded With New Distribution Deals
Onchain products are investment funds whose shares are recorded on a blockchain, led by the WisdomTree Treasury Money Market Digital Fund (WTGXX). After losing $110 million of customer money last quarter, onchain products brought in $509 million of net inflows in the third quarter, lifting total onchain assets by 67% from last quarter to $1.27 billion.
To widen access, the asset manager signed deals with crypto payments firm MoonPay to make WTGXX "accessible to everyday investors through MoonPay" and with institutional custodian BitGo so clients can earn Treasury yield on idle cash. What to watch: fourth-quarter onchain net inflows. Another quarter above $250 million would show the BitGo and MoonPay partnerships are bringing steady institutional cash rather than a one-off deposit.
🐻 Bear Case
Ceres Farmland Fundraising Stalled and Missed Hurdles
Chief executive Jonathan Steinberg highlighted "the convergence of public and private markets, and the tokenization of financial assets" as core to the firm's growth. WisdomTree entered private markets a year ago by buying Ceres Partners, a US farmland fund manager, with a deal structure that pays sellers an extra bonus if annual revenue grows at least 12% through 2029.
This quarter, private assets brought in zero net inflows, down from $4 million last quarter and $75 million in the first quarter. WisdomTree also cut the estimated value of the seller bonus by $2.1 million to $13.7 million, showing that farmland revenue is tracking further below the 12% growth hurdle.
At the same time, total revenue yield (annualized revenue as a share of average assets) slipped 0.01 percentage points from last quarter to 0.42% "due to lower transaction fees from our European ETPs and lower performance fees". Performance fees fell by more than a third from last quarter to $3.8 million. What to watch: fourth-quarter private asset inflows and performance fees when annual farmland appraisals conclude. A second quarter of zero inflows would show the new farmland fund is struggling to raise capital.
Convertible Debt Pushed Share Count Above Plan
WisdomTree has funded its acquisitions and debt refinancing by issuing convertible notes, which are loans that turn into common stock when the share price rises above set levels. Last quarter, the company forecast that its diluted share count would average 152 million to 155 million in the second half of 2026.
In the third quarter, the diluted share count reached 156.2 million, up 3.7% from a year ago and above the company's own second-half range. That happened even though the firm spent $10.6 million to buy back 0.5 million shares and paid $32.3 million in cash to retire the last $18.1 million of its 2029 convertible notes. What to watch: diluted share count in the fourth quarter. A further rise above 156 million would show convertible note dilution is outrunning share buybacks.
Risks this quarter didn't answer
Two standing concerns from prior quarters could not be tested from the earnings release alone and remain open.
- Onchain platform profit and loss: despite rebranding the business as WisdomTree Onchain and adding $509 million in assets, the release gives no revenue or operating loss figures for digital assets.
- Full-year cost and tax targets: the release does not include the annual expense table, which management normally updates on the conference call and in the quarterly filing.
👓 Other Themes
Commodity and Equity Market Swings
Because WisdomTree charges fees as a percentage of assets, its revenue moves with global stock and commodity prices. Rising markets added $3.5 billion to assets this quarter, led by $2.5 billion of price gains in commodity funds and $3.2 billion across European funds, reversing last quarter's $4.6 billion commodity price drop.
💲 Other KPIs
Average assets under management (the daily average pool of customer money on which WisdomTree charges fees) rose 30.4% from a year ago and 3.9% from last quarter. The company noted that assets reached about $175.0 billion by late October, setting a higher fee base for the fourth quarter.
Gross margin excluding one-offs (the share of revenue kept after paying third-party fund administrators and custodians) rose 0.8 percentage points from a year ago and 0.1 points from last quarter. It sits at the bottom of the 83% to 84% full-year target range set last quarter.
Total convertible debt fell from $1,075.5 million in June after the asset manager paid $32.3 million to retire the last $18.1 million of its 2029 notes. However, total debt minus cash and securities owned still rose by $183.0 million since December to $718.0 million by our math.
🔮 Guidance
Unchanged. WisdomTree declared a $0.03 quarterly cash dividend payable on November 25, matching the rate paid every quarter for the past two years.
❓ Key Questions
Why did Ceres farmland inflows drop to zero?
Private assets recorded zero net inflows in Q3 after raising $4 million in Q2 and $75 million in Q1, and the earnout liability fell by $2.1 million. Investors need to know how much money Ceres Fund II has raised so far.
What are the standalone revenues and costs of WisdomTree Onchain?
Onchain assets jumped 67% to $1.27 billion with new MoonPay and BitGo deals, but the company has not disclosed the platform's revenue or operating loss since the third quarter of 2025.
Did management update its full-year expense and share count targets?
WisdomTree usually updates its annual cost and share count outlook on the earnings call and in the 10-Q filing. In Q3, diluted shares of 156.2 million already exceeded the prior 152 to 155 million second-half target.
How much did Atlantic House add to Q3 revenue?
Q3 was the first full quarter owning UK manager Atlantic House, yet total revenue grew only 1.3% from Q2 as European transaction fees and performance fees fell. Disclosing its exact revenue contribution would show underlying growth.