WisdomTree Puts a 2027 Date on Private Markets and Dares the Market to Value Onchain
Record $171 billion in AUM and 43% revenue growth are real; the debate is whether the onchain build is an expense line or an undervalued asset.
WT · Earnings Call · 2026-10-30
A good quarter with a valuation argument stapled to it
WisdomTree's third quarter was, on the surface, another clean operating beat. Assets under management hit a record, flows were broad, and the margin math worked. “Our assets under management reached a record $171 billion at quarter end, marking our seventh consecutive quarter of record AUM.” — Bryan Edmiston, Chief Financial Officer · 2026-10-30 Net inflows were $4.6 billion, with $2.4 billion in the U.S., $1.7 billion in Europe and $500 million from onchain. Year-to-date inflows of $13.6 billion equate to roughly 13% annualized organic growth. Revenue rose 43% year over year to $179.4 million; adjusted operating margin was 43.1%, and year-to-date margin expansion was 750 basis points. That is not a company coasting on a single hot product. The fundamentals confirm the operating leverage was already visible before this print. Total revenue reached $177 million in the June quarter, up 57% year over year, before Q3's $179.4 million. Operating income of $72 million in the June quarter was more than double the prior-year level. The balance sheet also matters: effective net cash stood at $541 million at the June quarter-end. Management retired the remaining $18 million of its 2029 convertible notes and repurchased about $11 million of stock in the quarter. That is a company with options. “It is becoming more apparent to more investors that WisdomTree is not simply an ETF company. We're becoming a truly modern global asset manager, a next-generation global asset manager.” — Jonathan Steinberg, Chief Executive Officer · 2026-10-30 That line is easy to dismiss as CEO rhetoric, but the numbers above give it substance. Yet the stock is not acting like a pure momentum name. The shares are up 19.6% over the last 90 trading days but sit 17.3% below the August 27 peak of $25.04. The report lands into a pullback, not a breakout. That mismatch is the real story: the operating engine is working, but the market is still arguing about what the newer pieces are worth.Private markets get a date — the genuinely new item
The most important change on this call was not a new product; it was a timeline. For several quarters, executives had talked about putting private assets, especially Ceres farmland, into an ETF wrapper without committing to a date. In July, Jeremy Schwartz was explicit: “We have talked about this on prior calls that is one of our goals that we are working for, and we do not have an exact timeline today, but we are absolutely looking to do it.” — Jeremy D. Schwartz, Global Chief Investment Officer · 2026-07-31 On this call, Jonathan Steinberg put a stake in the ground: “we are not sharing right now the specific fund mechanics or the launch dates beyond that we expect this to be a 2027 event.” — Jonathan Steinberg, Chief Executive Officer · 2026-10-30 He also said the sourcing would be a mix of wholly owned assets like Ceres and partnership-style venture exposure to private companies. That is a strategic pivot, not boilerplate. WisdomTree has spent 20 years selling liquid, daily-priced ETFs. A private-markets ETF wrapper changes the liquidity profile, the operational burden and the investor base. The regulatory runway is the 40 Act allowance for up to 15% illiquid assets, which Steinberg flagged back in May: “the 40 Act does allow for up to 15% of assets in illiquid assets, and we do see appropriate in some broad commodity and real estate ETFs and opportunity to put in farmland.” — Jonathan Steinberg, CEO · 2026-05-01 Ceres Fund II launched in mid-June and management says it has more than $100 million of potential demand from over 100 investors in mid-to-late stages. If that pipeline converts, the private market push gives WisdomTree a second growth engine alongside public ETFs.Onchain: from science project to monetization menu
Tokenization has been a multi-quarter theme for WisdomTree, but the language is getting more concrete. Will Peck described an integrated stack: WisdomTree Prime for retail, WisdomTree Connect for institutional and third-party distribution, Onchain Markets for secondary trading, plus an in-house transfer agent, broker-dealer and regulated trust company. The flagship product is the tokenized money market fund WTGXX, now tradable around the clock with continuous interest accrual. “We see a really large addressable market here for onchain registered funds, specifically with the money market fund, let's say. The use cases that we are seeing today being cash management, stablecoin reserves, collateral mobility.” — Will Peck, Head of Digital Assets · 2026-10-30 The distribution list is no longer theoretical: BitGo, MoonPay, Stable Sea, HashKey, Marketnode and Synthesys, plus membership in a consortium of 21 global financial institutions developing a regulated dollar stablecoin. The monetization menu now has four items: fund expense ratio revenue as assets scale; broker dealer services, including non-expense-ratio revenue; tokenization-as-a-service for other issuers; and potentially net interest income from stablecoin-related activity. A tokenized tokenized ETF proposal is in front of the SEC, and Peck argued the innovation exemption supports WisdomTree's direct-registration model. This is where the company intersects a broader market wave: stablecoin adoption and agentic commerce were recurring themes across other recent reporters, not just WisdomTree. The tension is valuation. Management is spending roughly mid-$20 million annually on an onchain operating loss, and Steinberg believes the market is treating that investment as a negative rather than an option.This is not a new complaint. In July he said, “I think we have, you know, a billion dollars of value in our on-chain platform that has yet to be recognized.” — Jonathan Laurence Steinberg, Chief Executive Officer · 2026-07-31 The difference now is that management is naming specific monetization paths and suggesting announcements could close the gap. That is a higher bar: sum-of-the-parts arguments only work when the parts start showing revenue.Bryan has given guidance that we are spending sort of the mid-20s from an operating loss standpoint. But I do believe that the value, for those of the analysts or the investors that value us on a multiple of the PE, you are really putting a negative value on the investments that we have made in this onchain ecosystem. There are peers, a public peer with more than a $1 billion of value. The delta here between what is in our stock today and what should be realized, I think, is quite immense.