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Item 7. Management’s Discussion and Analysis

2025-02-26 compared with 2024-02-23 · 877 added, 426 removed, 365 unchanged (78% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes and the other financial information included elsewhere in this Report.

In addition to historical consolidated financial information, the following discussion contains forward -looking statements that reflect our plans, estimates and beliefs.

Our actual results could differ materially from those discussed in the forward -looking statements.

Factors that could cause or contribute to these differences include those discussed below.

For a more complete description of the risks noted above and other risks that could cause our actual results to materially differ from our current expectations, please see Item 1A.

The following discussion and analysis of

our financial condition and results of operations should be read together with our consolidated financial statements and the related notes

and the other financial information included elsewhere in this Report.

In addition to historical consolidated financial information, the

following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.

Our actual results could differ

materially from those discussed in the forward-looking statements.

Factors that could cause or contribute to these differences include

those discussed below.

For a more complete description of the risks noted above and other risks that could cause our actual results to

materially differ from our current expectations, please see Item 1A.

“Risk Factors” of this Report.

We assume no obligation to update or revise publicly any forward -looking statements, whether as a result of new information, future events or otherwise, unless required by law.

We are a global financial innovator, offering a well -diversified suite of ETPs, models, solutions and products leveraging blockchain technology.

We empower investors and consumers to shape their future and support financial professionals to better serve their clients and grow their businesses.

We are leveraging the latest financial infrastructure to create products that provide access, transparency and an enhanced user experience.

Building on our heritage of innovation, we are also developing and have launched next -generation digital products, services and structures, including Digital Funds and tokenized assets, as well as our blockchain -native digital wallet, WisdomTree Prime, which is currently available in the U.S.

in 38 states, representing approximately 70% of the U.S.

We had approximately $100.1 billion in AUM as of December 31, 2023.

Our family of ETPs includes products that provide exposure to equities, fixed income, commodities, leveraged -and-inverse , currency, alternatives and cryptocurrency strategies.

We have launched many first -to-market products and pioneered alternative weighting we call “Modern Alpha,” which combines the outperformance potential of active management with the benefits of passive management to offer investors cost -effective funds that are built to perform.

Most of our equity -based funds employ a fundamentally weighted investment methodology, which weights securities based on factors such as dividends, earnings or investment factors, whereas most other industry indexes use a capitalization weighted methodology.

These products are distributed through all major channels in the asset management industry, including banks, brokerage firms, registered investment advisers, institutional investors, private wealth managers and online brokers primarily through our sales force.

We believe technology is altering the way financial advisors conduct business and through our Advisor and Portfolio Solutions programs we offer technology -enabled and research -driven solutions including portfolio construction, asset allocation, practice management services and digital tools to help financial advisors address technology challenges and grow and scale their businesses.

We are at the forefront of innovation and believe that tokenization and leveraging the utility of blockchain technology is the next evolution in financial services.

We are building the foundation that we believe will allow us to lead in this coming evolution.

WisdomTree Prime, our blockchain -native digital wallet, positions us to expand our blockchain -enabled financial product and services offerings with a new direct -to-consumer channel where spending, saving and investing are united.

As we continue to pursue our digital assets strategy, we are embracing what we refer to as “responsible DeFi,” which we believe upholds the foundational principles of regulation in this innovative and quickly evolving space.

We believe that our expansion into digital assets and blockchain -enabled finance complements our existing core competencies in a holistic manner, and will diversify our revenue streams and contribute to our growth.

We assume no obligation

to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, unless

required by law.

We are a global financial innovator, offering a diverse suite of ETPs, models, solutions

and products leveraging blockchain technology.

Our offerings empower investors to shape their financial future and equip financial professionals

to grow their businesses.

Leveraging the latest financial infrastructure, we create products that emphasize access, transparency and provide

an enhanced user experience.

Building on our heritage of innovation, we have introduced next-generation digital products and services,

including Digital Funds, tokenized assets, and our blockchain-native digital wallet, WisdomTree Prime, which is currently available in

states, covering approximately 80% of the U.S.

Our institutional platform, WisdomTree Connect, further expands access

to our products.

As of December 31, 2024, we managed approximately $109.8 billion in AUM.

span a broad range of strategies including equities, fixed income, commodities, leveraged-and-inverse, currency, alternatives and cryptocurrency

We have launched many first-to-market products and pioneered a unique alternative-weighting approach called “Modern Alpha”

that combines the outperformance potential of active management with the cost effective benefits of passive management.

Our products are distributed across all major

asset management industry channels, including banks, brokerage firms, registered investment advisers, institutional investors, private

wealth managers and online brokers, primarily through our dedicated sales team.

We believe technology is transforming how financial advisors

conduct business, and through our Advisor and Portfolio Solutions programs we offer technology-enabled and research-driven solutions.

These include portfolio construction, asset allocation, practice management services and digital tools to help advisors address technology

challenges and scale their businesses.

As pioneers in tokenization and blockchain technology,

we view this as the next phase in the evolution in financial services.

Through our digital assets strategy, we are committed to “responsible

DeFi,” aligning with regulatory standards to foster growth in this rapidly evolving space.

We believe that expanding into digital

assets and blockchain-enabled finance complements not only complements our core competencies, but will diversify our revenue streams and

further contribute to our growth.

Executive Summary

Our business continues to generate significant positive momentum while executing against our long -term strategic initiatives.

We ended 2023 with record AUM of $100.1 billion.

Our revenues and operating income increased 15.8% and 45.6%, respectively, during the year ended December 31, 2023 as compared to the prior year, which translated into 520 basis points of operating margin expansion.

This past year we generated over $10.4 billion of net inflows, representing annual organic flow growth of approximately 13%.

Our inflow profile is both broad and deep as we have gathered net inflows into 6 of our 8 major product categories, including fixed income, international equity and emerging markets products, representing organic flow growth in these categories of 39%, 28% and 21%, respectively.

This diversification is driving upward our year -to-date average fee capture on our flows, which was approximately two times greater than our fee capture in the prior year.

AUM diversification and product performance have us well -positioned for this growth trajectory to continue.

Our models strategy is another growth driver where we are succeeding, with our model portfolios available to over 70,000 advisors.

We are focused on adding new clients and continuing to deepen our impact on partner platforms such as Merrill Lynch, Morgan Stanley, LPL Financial and others, as well as being an outsourced solution for smaller registered investment advisers and independent broker -dealers to make model portfolios easier to trade through our Portfolio Solutions program.

In 2023, we observed a 20% increase in the number of clients that hold multiple WisdomTree products, while at the same time we also grew our overall client base by more than 20%.

We believe that continued success penetrating our accessible market and winning advisor mindshare should lead to model flows that are recurring in nature and stackable on top of our current inflow profile.

While we remain focused on providing investors with the best product structure to access various asset classes through ETFs, we believe that by leveraging blockchain technology, tokenized assets are the best product structure of tomorrow and the future of financial services.

We are an early mover in this space, with the launch of our blockchain -native wallet, WisdomTree Prime, a new direct -to-consumer channel where spending, saving and investing are united.

WisdomTree Prime provides access to bitcoin, ether, tokenized gold and U.S.

dollar tokens, as well as 13 Digital Funds, including a government money market fund and other digital funds offering asset allocation, fixed income and equity exposures.

In addition, we have partnered with a financial institution to provide co -branded debit cards to our retail customers on the WisdomTree Prime platform.

We continue to focus on enhancing the products and capabilities of the platform with plans to allow for peer -to-peer transfers and payments in the upcoming quarters.

We are also exploring strategic partnerships and other business development opportunities for both our platform and product suite that could unlock additional tokenization revenue streams in the future.

We are executing on our long -term growth strategy and expect ongoing flows and AUM growth to translate into further margin expansion and outperformance going forward, with our recent investments in digital assets creating additional value for our stockholders over time.

Our business continues to build positive momentum

as we advance our long-term strategic initiatives.

We closed 2024 with AUM of $109.8 billion, a year-over-year increase of 9.6%, a testament

to the resilience of our business model and the strength of our product offering.

Through disciplined execution and strategic management,

we achieved record revenues and continued expanding our operating margins.

For the year ended December 31, 2024, our revenues and operating

income increased 22.5% and 56.9%, respectively, compared to the prior year, supported by scale efficiencies and effective cost control,

delivering 700 basis points of operating margin expansion.

This growth, along with recent strategic actions such as the retirement of

our gold royalty obligation in 2023 and our repurchase of the Series A Preferred Stock from ETFS Capital in 2024, has meaningfully enhanced

earnings per share.

Our models strategy, offered through our Portfolio

Solutions program, remains a strong growth driver, with our model portfolios accessible across a number of platforms.

This program provides

advisors with customized evaluations, a suite of off-the-shelf models, and Shared CIO services, where advisors collaborate with our models

investment team to co-manage portfolios for their clients, with options for advisors to delegate trading, rebalancing, and tax optimization

tasks leveraging third-party service providers or platforms, providing flexibility and strategic alignment.

We continue to expand our

reach with new clients and deepen partnerships with platforms such as Merrill Lynch, LPL Financial, UBS, Charles Schwab, Envestnet, Adhesion

The number of advisors utilizing at least one of our models surpassed 2,500, reflecting steady progress as we build deeper

relationships, improve asset retention and create more stable, higher-quality revenue streams with significant growth potential.

Beyond traditional ETPs, we are diversifying

into blockchain and digital assets.

Our blockchain-native wallet, WisdomTree Prime, provides direct-to-consumer access to digital assets,

including bitcoin, ether, tokenized gold, U.S.

dollar tokens and 13 Digital Funds, while also enabling spending functionality through

a co-branded debit card.

WisdomTree Connect supports institutional clients by offering direct access to our Digital Funds via self-hosted

wallet or third-party custodial wallets.

Our focus on “responsible DeFi,” ensures our offerings meet regulatory standards

while delivering transparency, choice, and inclusivity.

This expansion into digital assets complements our core strengths, will diversify

our revenue streams and contribute further to our growth.

We remain committed to our long-term growth

strategy, anticipating that organic inflows and AUM growth will continue to drive margin expansion and performance.

Additionally, we believe

our investments in digital assets are positioned to deliver further value for our stockholders over time.

Additional business highlights include the following:

• Strong product performance with over 80% of our U.S.

listed AUM covered by Morningstar in the top two quartiles of peer performance on the 3 -year and 10 -year timeframes.

● We achieved strong product performance with over 80% of our U.S.

listed AUM covered by Morningstar in the top quartile of peer performance

on the 3-year timeframe and over 65% of our U.S.

listed AUM covered by Morningstar in the top two quartiles of peer performance on the

10-year timeframe.

In addition, approximately 59% of our U.S.

listed AUM is rated 4- or 5 -star by Morningstar (less than 5% in 1 -and 2 -star funds).

• We launched nine new European listed ETPs, three new U.S.

listed ETPs (including the WisdomTree Bitcoin Fund which was among the first to launch in the U.S.) and 12 new Digital Funds.

The WisdomTree Bitcoin Fund launched in the U.S.

on the Cboe BZX Exchange in January 2024.

• We reduced our convertible senior notes outstanding by $45.0 million, by issuing $130.0 million of convertible senior notes due 2028 and retiring $175.0 million of convertible senior notes due 2023.

We also returned approximately $24.1 million to our stockholders through our ongoing quarterly cash dividend and common stock repurchases.

• In May 2023, we closed a transaction resulting in the termination of our contractual gold payments obligation to ETFS Capital for $50.0 million in cash and Series C Preferred Stock convertible into approximately 13.1 million shares of our common stock.

The value of these shares was $86.9 million based on the closing price of our common stock on May 9, 2023 of $6.64 per share.

The Series C Preferred Stock was issued to Gold Bullion Holdings (Jersey) Limited, or GBH, a subsidiary of the World Gold Council, which was the entity that ultimately received a portion of the contractual gold payments the Company was previously obligated to make to ETFS Capital.

The transaction expanded our operating margin by over 500 basis points, was accretive to earnings per share and reduced volatility in our financial results.

• In November 2023, we repurchased our Series C Preferred Stock, which was convertible into approximately 13.1 million shares of our common stock from GBH for aggregate cash consideration of approximately $84.4 million.

Under the terms of the transaction, we paid GBH $40.0 million on the closing date, with the remainder of the purchase price payable in equal, interest -free installments on the first, second and third anniversaries of the closing date.

The implied price per share was $6.02 when considering the interest -free financing element of the transaction, and the repurchase was also accretive to earnings per share.

• In the U.S., we were named a “2023 Best Places to Work in Money Management” by Pensions & Investments for the fourth consecutive year and seventh year since the award was created.

We ranked second within the category for managers with 100 -499 employees, the second consecutive year earning a ranking among the top five employers.

In the U.K., we were also named Best Workplace for medium -sized companies for a fourth consecutive year and a 2023 Best Workplace for Women for medium -sized companies by Great Place to Work .

• We won “Best Leveraged & Inverse ETF Issuer ($100M+)” and “Best Crypto Issuer Linked ETF Issuer ($100M+)” at the 2023 ETF Express Europe Awards and our European business won “Best ETF Issuer” at the Online Money Awards, marking the second consecutive year of winning the award.

The WisdomTree Siegel Strategic Value Index™, an index developed by Professor Jeremy Siegel, Senior Economist to WisdomTree, also won the FIA Index of the Year Award by Structured Retail Products .

listed AUM is rated 4- or 5-star by Morningstar (less than 5% in 1-and 2-star

● We launched 14 new European listed ETPs and two new U.S.

listed ETPs spanning all our major product categories.

● We celebrated the 10-year anniversary of WisdomTree in Europe.

Since entering the region, we have been delivering differentiated and

value-add solutions to European investors through a comprehensive range of ETPs.

● With respect to our digital assets business:

in March 2024, we were granted a charter from the New York State Department of Financial

Services to operate as a limited purpose trust company under the New York Banking Law;

in September 2024, we launched WisdomTree Connect,

a platform that offers businesses and institutional users direct access to our Digital Funds using their own self-hosted wallet or a third-party

custodial wallet service;

and in October 2024, WisdomTree Prime users became able to select the WisdomTree Government Money Market Digital

Fund (WTGXX) as a spending source for their WisdomTree Prime Visa Debit Card.

● In August 2024, we completed a private offering of $345.0 million in aggregate principal amount of our 3.25%

Convertible Senior Notes due 2029 and concurrently repurchased (i) $104.2 million aggregate principal amount of our 5.75% Convertible

Senior Notes due 2028, (ii) approximately 5.7 million shares of our common stock in open market transactions and (iii) all 14,750 shares

of Series A Preferred Stock (equivalent to 14.75 million shares of our common stock) from ETFS Capital.

These transactions were accretive

to earnings per share.

● In the U.S., we were named a “2024 Best Places to Work in Money Management” by Pensions & Investments for the

fifth consecutive year and ranked second within the category for managers with 100-499 employees.

In the U.K., we were also named Best

Workplace for medium-sized companies for the fifth consecutive year and a 2024 Best Workplace for Women by Great Place to Work .

● We were named “Best Leveraged & Inverse ETF Issuers ($1bn+)” at the ETF Express European ETF Awards and “Best ETF

Provider” at the Diaman Quant Awards in Italy.

Our European business also won “Best ETF Issuer” at the Online Money Awards,

marking the third consecutive year of winning the award.

Market Environment

The following chart reflects the annual returns of the broad -based equity indexes and gold prices over the last three years.

The following chart reflects the annual returns

of the broad-based equity indexes and gold prices over the last three years.

Listed ETF Industry Flows

listed ETF net flows for the year ended December 31, 2023 were $489.1 billion.

listed ETF net flows for the year ended

December 31, 2024 were $867.9 billion.

equity and fixed income gathered the majority of those flows.

European Listed ETP Industry Flows

European listed ETP net flows were $146.5 billion for the year ended December 31, 2023.

European listed ETP net flows were $98.4 billion

for the year ended December 31, 2024.

Equities and fixed income gathered the majority of those flows.

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Asset Management – Consolidation

In the recent past, a number of acquisitions in the asset management industry have either been announced or completed.

These trends have accelerated, as fee compression, cost pressures and increased regulations have weighed on the industry, highlighting the importance of scale and operating efficiency to compete in today’s market.

We have significant opportunities ahead in both ETPs and the Portfolio Solutions business and as an early mover in digital assets and blockchain -enabled financial services, which positions us well for success to grow in this competitive landscape.

In the recent past, a number of acquisitions

in the asset management industry have either been announced or completed.

These trends have accelerated, as fee compression, cost pressures

and increased regulations have weighed on the industry, highlighting the importance of scale and operating efficiency to compete in today’s

We have significant opportunities ahead in both ETPs and the Portfolio Solutions business and as an early mover in digital assets

and blockchain-enabled financial services, which positions us well for success to grow in this competitive landscape.

Components of Operating Revenue

Advisory fees

Substantially all of our revenues are comprised of advisory fees we earn from our ETPs.

A significant portion of our revenues is comprised of advisory

fees we earn from our ETPs.

These advisory fees are calculated based on a percentage of the ETPs’ average daily net assets.

As of the date of this Report, our weighted average fee rates by product category are as follows:

the date of this Report, our weighted average fee rates by product category are as follows:

Commodity & Currency:

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Cryptocurrency:

We determine the appropriate advisory fee to charge for our ETPs based on the cost of operating each ETP considering the types of securities the ETPs will hold, fees third -party service providers will charge us for operating the ETPs and our competitors’ fees for similar ETPs.

From time to time, we implement voluntary waivers of a portion of our advisory fee.

In addition, we earn a fee based on daily aggregate AUM of our ETPs in exchange for bearing certain fund expenses.

Our advisory fee revenues may fluctuate based on general stock market trends, which include market value appreciation or depreciation, currency fluctuations against the U.S.

dollar, increased competition and level of inflows or outflows from our ETPs.

Other income includes rebates from swap providers to our European listed ETPs, creation/redemption fees earned on our European non -UCITS products and fees from licensing our indexes to third parties.

We determine the appropriate advisory fee to

charge for our ETPs based on the cost of operating each ETP considering the types of securities the ETPs will hold, fees third-party service

providers will charge us for operating the ETPs and our competitors’ fees for similar ETPs.

From time to time, we implement voluntary

waivers of a portion of our advisory fee.

In addition, we earn a fee based on daily aggregate AUM of our ETPs in exchange for bearing

certain fund expenses.

Our advisory fee revenues may fluctuate based

on general stock market trends, which include market value appreciation or depreciation, currency fluctuations against the U.S.

increased competition and level of inflows or outflows from our ETPs.

Other revenues

Other revenues include rebates from swap providers to our

European listed ETPs, creation/redemption fees earned on our European non-UCITS products and fees from licensing our indexes and index

data to third parties.

Components of Operating Expenses

Our operating expenses consist primarily of costs related to selling, operating and marketing our ETPs as well as the infrastructure needed to run our business.

Our operating expenses consist primarily of

costs related to selling, operating and marketing our ETPs as well as the infrastructure needed to run our business.

Compensation and benefits

Employee compensation and benefits expenses are expensed when incurred and include salaries, incentive compensation, and related benefit costs.

To attract and retain qualified personnel, we must maintain competitive employee compensation and benefit plans and amounts we pay may be affected by inflation.

Virtually all of our employees receive incentive compensation which is variable and will fluctuate taking into consideration our operating and financial results, as well as discretion.

Also included in compensation and benefits are costs related to equity awards granted to our employees.

Our executive management and Board of Directors strongly believe that equity awards are an important part of our employees’ overall compensation package and that incentivizing our employees with equity in the Company aligns the interests of our employees with that of our stockholders.

We use the fair value method in recording compensation expense for equity -based awards.

Under the fair value method, compensation expense is measured at the grant date based on the estimated fair value of the award and is recognized as an expense over the vesting period.

Employee compensation and benefits expenses are expensed when

incurred and include salaries, incentive compensation, and related benefit costs.

To attract and retain qualified personnel, we must maintain

competitive employee compensation and benefit plans and amounts we pay may be affected by inflation.

Virtually all of our employees receive

incentive compensation which is variable and will fluctuate taking into consideration our operating and financial results, as well as

individual performance and discretion.

Also included in compensation and benefits are

costs related to equity awards granted to our employees.

Our executive management and Board of Directors strongly believe that equity

awards are an important part of our employees’ overall compensation package and that incentivizing our employees with equity in

the Company aligns the interests of our employees with that of our stockholders.

We use the fair value method in recording compensation

expense for equity-based awards.

Under the fair value method, compensation expense is measured at the grant date based on the estimated

fair value of the award and is recognized as an expense over the vesting period.

Fund management and administration

Fund management and administration expenses are expensed when incurred and are comprised of the following costs we pay third -party service providers to operate our ETPs and Digital Funds:

Fund management and administration expenses

are expensed when incurred and are comprised of the following costs we pay third-party service providers to operate our ETPs and Digital

● portfolio management of our ETPs (sub-advisory);

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● other administrative services.

We are not responsible for extraordinary expenses, taxes and certain other expenses related to the funds.

We depend on a number of parties to provide critical portfolio management services to our ETPs.

The fees we pay our sub -advisers generally are the higher of the fixed minimums per fund, which range from $25,000 to $180,000 per year, or the percentage fee, which ranges between 0.01% and 0.50% per annum of average daily AUM at various breakpoint levels depending on the nature of the ETP.

In addition, we pay certain costs based on transactions in our ETPs or based on inflow levels.

The fees we pay for accounting, tax, transfer agency, index calculation, indicative values and exchange listing are based on the number of ETPs we have.

The remaining fees are based on a combination of both AUM and number of funds, or as incurred.

We are not responsible for extraordinary expenses,

taxes and certain other expenses related to the funds.

We depend on a number of parties to provide

critical administrative, custody and portfolio management services to our ETPs.

The fees we pay our sub-advisers generally are the higher

of the fixed minimums per fund, which range from $25,000 to $180,000 per year, or the percentage fee, which ranges between 0.01% and 0.20%

per annum of average daily AUM at various breakpoint levels depending on the nature of the ETP.

In addition, we pay certain costs based

on transactions in our ETPs or based on inflow levels.

The fees we pay for accounting, tax, transfer

agency, index calculation, indicative values and exchange listing are based on the number of ETPs we have.

The remaining fees are based

on a combination of both AUM and number of funds, or as incurred.

Marketing and advertising

Marketing and advertising expenses are recorded when incurred and include the following:

Marketing and advertising expenses are recorded

when incurred and include the following:

● advertising and product promotion campaigns that are initiated to promote our existing and new ETPs as well as brand awareness;

● marketing campaigns to attract WisdomTree Prime and WisdomTree Connect users;

● development and maintenance of our website;

● creation and preparation of marketing materials.

Our discretionary advertising comprises the largest portion of this expense.

In addition, we may incur expenditures in certain periods to attract inflows, the benefit of which may or may not be recognized from increases to our AUM in future periods.

However, due to the discretionary nature of some of these costs, they can generally be reduced if there were a decline in the markets.

Our discretionary advertising comprises the

largest portion of this expense.

In addition, we may incur expenditures in certain periods to attract inflows, the benefit of which may

or may not be recognized from increases to our AUM in future periods.

However, due to the discretionary nature of some of these costs,

they can generally be reduced if there were a decline in the markets.

Sales and business development

Sales and business development expenses are recorded when incurred and include the following:

Sales and business development expenses are

recorded when incurred and include the following:

● travel and entertainment or conference related expenses for our sales force;

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Contractual gold payments

Contractual gold payments expense represented an obligation requiring us to pay 9,500 ounces of gold annually from the advisory fee income we earned for managing physically backed gold ETPs.

Contractual gold payments expense represented

an obligation requiring us to pay 9,500 ounces of gold annually from the advisory fee income we earned for managing physically backed

Our obligation to continue making these payments was terminated on May 10, 2023.

See Note 9 to our Consolidated Financial Statements for additional information.

See Note 9 to our Consolidated Financial Statements

for additional information.

Professional fees

Professional fees are expensed when incurred and consist of fees we pay to corporate advisers including accountants, tax advisers, legal counsel, investment bankers, human resources or other consultants.

Professional fees also include expenses we pay third -party service providers related to WisdomTree Prime and expenses incurred in response to an activist campaign.

Professional fees are expensed when incurred

and consist of fees we pay to corporate advisers including accountants, tax advisers, legal counsel, investment bankers, human resources

or other consultants.

Professional fees also include expenses we pay third-party service providers related to WisdomTree Prime and expenses

incurred in response to an activist campaign.

These expenses fluctuate based on our needs or requirements at the time.

Certain of these costs are at our discretion and can fluctuate year to year.

Certain of these

costs are at our discretion and can fluctuate year to year.

Occupancy, communications and equipment

Occupancy, communications and equipment expense includes costs for our corporate headquarters in New York City as well as office related costs in our other locations.

Occupancy, communications and equipment expense

includes costs for our corporate headquarters in New York City as well as office related costs in our other locations.

Depreciation and amortization

Depreciation and amortization expense results from amortization of internally -developed software as well as depreciation on fixed assets, which are depreciated/amortized over three to five years.

Depreciation and amortization expense results

from amortization of internally-developed software as well as depreciation on fixed assets, which are depreciated/amortized over three

to five years.

Third-party distribution fees

Third -party distribution fees, which are expensed as incurred, include payments made to enable our products and models to be included on certain third -party platforms in exchange for commission -free trading or other preferential access.

Third-party distribution fees, which are expensed

as incurred, include payments made to enable our products and models to be included on certain third-party platforms in exchange for commission-free

trading or other preferential access.

These expenses also include payments to our third-party marketing agents in Latin America and Israel.

Other expenses consist primarily of insurance premiums, general office related expenses, securities license fees for our sales force, public company related expenses, corporate related travel and entertainment and Board of Director fees, including stock -based compensation related to equity awards we granted to our directors.

Other expenses consist primarily of insurance

premiums, general office related expenses, securities license fees for our sales force, public company related expenses, corporate related

travel and entertainment and Board of Director fees, including stock-based compensation related to equity awards we granted to our directors.

Components of Other Income/(Expenses) of a Recurring Nature

Interest expense

We recognize interest expense using the effective interest method which includes the amortization of discounts, premiums and issuance costs.

Revaluation/termination of deferred consideration–gold payments

Deferred consideration arose in connection with the ETFS Acquisition and was remeasured each reporting period using forward -looking gold prices observed on the CMX exchange, a selected discount rate and perpetual growth rate.

We recognize interest expense using the effective

interest method which includes the amortization of discounts, premiums and issuance costs.

Revaluation/termination of deferred consideration–gold

Deferred consideration arose in connection with

our acquisition of the European exchange-traded commodity, currency and leveraged-and-inverse business of ETFS Capital Limited, or the

ETFS Acquisition, and was remeasured each reporting period using forward-looking gold prices observed on the CMX exchange, a selected

discount rate and perpetual growth rate.

This obligation was terminated on May 10, 2023 for approximately $137.0 million.

See Note 9 to our Consolidated Financial Statements for additional information.

See Note 9 to

our Consolidated Financial Statements for additional information.

Interest income

Interest income, which is recognized on an accrual basis, arises from investing our corporate cash into interest -bearing financial instruments.

Other losses, net

Included herein are gains and losses arising from our financial instruments owned and investments, the sale of gold earned from advisory fees paid by physically -backed gold ETPs, foreign exchange and other miscellaneous items.

Also included are losses arising from the release of tax -related indemnification assets upon the expiration of the statute of limitations, for which an equal and offsetting benefit is recognized in income tax expense.

Our income tax expense consists of taxes due to federal, various state and local and certain foreign authorities.

Interest income, which is recognized on an accrual

basis, arises from investing our corporate cash into interest-bearing financial instruments.

Other gains/(losses), net

Included herein are gains and losses arising

from our financial instruments owned and investments, the sale of gold earned from advisory fees paid by physically-backed gold ETPs,

foreign exchange and other miscellaneous items.

Also included are losses arising from the release of tax-related indemnification assets

upon the expiration of the statute of limitations, for which an equal and offsetting benefit is recognized in income tax expense.

Our income tax expense consists of taxes due

to federal, various state and local and certain foreign authorities.

Expense Guidance for the Year Ending December 31, 2025

Compensation Expense

Our compensation expense for the year ending December 31, 2024 is currently estimated to range from $108.0 million to $118.0 million and takes into consideration planned hires as well as year -end compensation adjustments and the annualization of hires made during 2023.

The range also considers variability in incentive compensation with drivers including the magnitude of our flows, revenue and operating income growth, margin expansion and our share price performance in relation to our peers.

A wide range is provided in consideration of uncertain market conditions.

Compensation to Revenue Ratio

Our compensation to revenue ratio for the year

ending December 31, 2025 is currently estimated to range from 28% to 30% and takes into consideration planned hires as well as year-end

compensation adjustments and the annualization of hires made during 2024.

The range also considers variability in incentive compensation

with drivers including the magnitude of our flows, revenue and operating income growth, margin expansion and our stock price performance

in relation to our peers.

A range is provided in consideration of uncertain market conditions.

Discretionary Spending

Discretionary spending includes marketing, sales, professional fees, occupancy and equipment, depreciation and amortization and other expenses.

We currently estimate our discretionary spending for the year ending December 31, 2024 to range from $64.0 million to $68.0 million.

Not included in the guidance above are any potential non -recurring expenses we may incur in response to a potential proxy contest.

Such expenses could be material to our results of operations for the year ending December 31, 2024.

We define gross margin as total operating revenues less fund management and administration expenses.

Discretionary spending includes marketing, sales,

professional fees, occupancy and equipment, depreciation and amortization and other expenses.

We currently estimate our discretionary

spending for the year ending December 31, 2025 to range from $68.0 million to $72.0 million.

Not included in the guidance above are any potential

non-recurring expenses we may incur in response to a potential proxy contest.

Such expenses could be material to our results of operations

for the year ending December 31, 2025.

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.

For the year ending December 31, 2024, we currently estimate that our gross margin percentage will be 79.0% to 80.0% at current AUM and revenue levels.

If AUM drives higher from continued organic flow growth or favorable market conditions, we would anticipate further gross margin expansion.

For the year ending December 31, 2025, we currently estimate that our gross margin percentage will be 81.0% to 82.0% taking into consideration

current AUM and revenue levels, changes in service providers and anticipated fund launches.

If AUM increases, we would anticipate further

gross margin expansion.

Third-Party Distribution Expense

We currently estimate third -party distribution expense to be approximately $10.0 million to $11.0 million for the year ending December 31, 2024, which is dependent upon the AUM growth on our respective platforms.

We currently estimate third-party distribution

expense to be approximately $11.0 million to $12.0 million for the year ending December 31, 2025, which is dependent upon the AUM growth

on our respective platforms.

Interest Expense

We currently estimate our interest expense for

the year ending December 31, 2025 to be $22.0 million, which is inclusive of approximately $2.0 million of interest cost we are required

to impute under U.S.

GAAP related to our interest-free financing of the shares of Series C Non-Voting Convertible Preferred Stock (the

“Series C Preferred Stock”) we repurchased from Gold Bullion Holdings (Jersey) Limited (“GBH”), a subsidiary of

the World Gold Council, in November 2023.

Interest Income

We currently estimate our interest income for

the year ending December 31, 2025 to be $7.0 million, based upon the magnitude of our forecasted interest earning assets.

Income Tax Expense

We currently estimate that our consolidated normalized effective tax rate will be approximately 24.0% to 25.0% for the year ending December 31, 2024, a slight increase as compared to the year ended December 31, 2022 to account for the full year impact of the U.K.

tax rate change to 25.0% that went into effect on April 1, 2023.

This estimated rate may change and is dependent upon our actual taxable income earned in relation to our forecasts as well as any other items which may arise that are not currently forecasted.

Such items may include, but are not limited to, reductions in unrecognized tax benefits, increases or decreases in valuation allowances and any stock -based compensation windfalls or shortfalls.

We currently estimate that our consolidated

normalized effective tax rate will be approximately 24.0% to 25.0% for the year ending December 31, 2025, taking into consideration the

current distribution of profits among our U.S.

and European businesses.

This estimated rate may change and is dependent

upon our actual taxable income earned in relation to our forecasts as well as any other items which may arise that are not currently forecasted.

Such items may include, but are not limited to, increases or decreases in valuation allowances and any stock-based compensation windfalls

or shortfalls.

Additional corporate tax legislation could also impact our normalized effective tax rate.

Weighted Average Diluted Shares

We currently estimate our weighted average diluted

shares to be between 149.0 million and 150.0 million during the year ending December 31, 2025.

This guidance does not take into consideration

any variability in shares associated with our Convertible Notes.

While our Convertible Notes require principal to be paid in cash, our

diluted shares would need to be increased for any incremental shares associated with an exercise of the conversion option if our stock

price exceeds the applicable conversion price of our Convertible Notes of $9.54 per share for the 5.75% Convertible Senior Notes due 2028,

$11.04 per share for the 3.25% Convertible Senior Notes due 2026 and $11.82 per share for the 3.25% Convertible Senior Notes due 2029.

Factors that May Impact our Future Financial Results

Our AUM is well diversified across the commodity, U.S.

Our AUM is well diversified across the commodity,

equity, international developed markets and emerging markets sectors.

As a result, our operating results are particularly exposed to investor sentiment toward investing in these products’ strategies and our ability to maintain AUM of these products, as well as the performance of these products.

Our revenues are also highly correlated to the level and relative mix of our AUM, as well as the fee rate associated with our ETPs.

Changes in product mix have led to a decline in our average advisory fee, which for the years ended December 31, 2021, 2022 and 2023 were 0.41%, 0.38% and 0.36%, respectively.

The chart below sets forth the asset mix of our ETPs at December 31, 2021, 2022 and 2023:

As a result, our operating results are particularly exposed

to investor sentiment toward investing in these products’ strategies and our ability to maintain AUM of these products, as well

as the performance of these products.

Our revenues are also highly correlated to the

level and relative mix of our AUM, as well as the fee rate associated with our ETPs.

Changes in product mix have led to a decline in our

average advisory fee, which for the years ended December 31, 2022, 2023 and 2024 were 0.38%, 0.36% and 0.36%, respectively.

The chart below sets forth the asset mix of

our ETPs at December 31, 2022, 2023 and 2024:

Key Operating Statistics

The following table presents key operating statistics that serve as indicators for the performance of our business:

Year Ended December 31,

GLOBAL ETPs (in millions )

Beginning of period assets

Market appreciation/(depreciation)

End of period assets

Average assets during the period

Average advisory fee during the period

Number of ETPs—end of the period

The following table presents key operating statistics

that serve as indicators for the performance of our business:

Ended December 31,

ETPs (in millions )

Beginning of period

(Outflows)/Inflows

appreciation/(depreciation)

of period assets

Average assets during the

advisory fee during the period

Number of ETPs—end of

LISTED ETFs (in millions )

Beginning of period assets

Market appreciation/(depreciation)

End of period assets

Average assets during the period

Number of ETPs—end of the period

appreciation/(depreciation)

of period assets

Average assets during the

Number of ETPs—end of

LISTED ETPs (in millions )

Beginning of period assets

Market appreciation/(depreciation)

End of period assets

Average assets during the period

Number of ETPs—end of the period

appreciation/(depreciation)

of period assets

Average assets during the

Number of ETPs—end of

CATEGORIES (in millions )

Beginning of period assets

Market appreciation/(depreciation)

End of period assets

Average assets during the period

Commodity & Currency

appreciation/(depreciation)

of period assets

Average assets during the

Beginning of period assets

Market appreciation

End of period assets

Average assets during the period

of period assets

Average assets during the

Beginning of period assets

Market depreciation

End of period assets

Average assets during the period

(Outflows)/inflows

of period assets

Average assets during the

Year Ended December 31,

6 unchanged sentences

Beginning of period assets

(Outflows)/inflows

Market appreciation/(depreciation)

16 unchanged sentences

Average assets during the period

Previously issued statistics may be restated due to fund closures and trade adjustments

Previously issued statistics may be restated

due to fund closures and trade adjustments

Year Ended December 31, 2024 Compared to Year Ended December 31,

3 unchanged sentences

Advisory fees

Other revenues

Total revenues

1 unchanged sentence

Advisory fees

Advisory fee revenues increased 13.5% from $293.6 million during the year ended December 31, 2022 to $333.2 million during the year ended December 31, 2023 as higher average AUM was partially offset by a decline in our average advisory fee.

Our average advisory fee declined from 0.38% during the year ended December 31, 2022 to 0.36% during the year ended December 31, 2023.

Other income increased 105.0% from $7.7 million during the year ended December 31, 2022 to $15.8 million during the year ended December 31, 2023 primarily due to large flows from some of our European products.

Advisory fee revenues increased 18.6% from $333.2

million during the year ended December 31, 2023 to $395.4 million during the year ended December 31, 2024 due to higher average AUM.

average advisory fee remained 0.36%, unchanged from the year ended December 31, 2023.

Other revenues

Other revenues increased 104.8% from $15.8 million

during the year ended December 31, 2023 to $32.4 million during the year ended December 31, 2024 due to higher other revenues attributable

to our European listed ETPs and $4.3 million of other revenues related to legal and other related expenses incurred in connection with

the SEC ESG Settlement that are expected to be covered by insurance.

Operating Expenses

22 unchanged sentences

Compensation and benefits

Compensation and benefits expense increased 11.9% from $97.9 million during the year ended December 31, 2022 to $109.5 million during the year ended December 31, 2023 due to higher stock -based compensation and headcount.

Compensation and benefits expense increased

10.7% from $109.5 million during the year ended December 31, 2023 to $121.3 million during the year ended December 31, 2024 due to higher

stock-based compensation, incentive compensation and headcount.

Headcount was 303 and 313 at December 31, 2023 and 2024, respectively.

Fund management and administration

Fund management and administration expense increased 10.2% from $64.8 million during the year ended December 31, 2022 to $71.3 million during the year ended December 31, 2023 primarily due to higher average AUM and inflows.

Fund management and administration expense increased

17.7% from $71.3 million during the year ended December 31, 2023 to $84.0 million during the year ended December 31, 2024 primarily due

to higher average AUM.

We had 76 U.S.

listed ETFs and 261 European listed ETPs at December 31, 2023 compared to 78 U.S.

listed ETFs and 261 European listed ETPs at December 31, 2023.

listed ETFs and

275 European listed ETPs at December 31, 2024.

Marketing and advertising

Marketing and advertising expense increased 12.8% from $15.3 million during the year ended December 31, 2022 to $17.3 million during the year ended December 31, 2023 primarily resulting from higher spending related to our U.S.

listed products.

Marketing and advertising expense increased

19.0% from $17.3 million during the year ended December 31, 2023 to $20.5 million during the year ended December 31, 2024 primarily

resulting from higher spending related to our U.S.

listed and digital products.

Sales and business development

Sales and business development expense increased 14.4% from $11.9 million during the year ended December 31, 2022 to $13.6 million during the year ended December 31, 2023 primarily resulting from increases in travel and events spending.

Sales and business development expense increased

9.1% from $13.6 million during the year ended December 31, 2023 to $14.8 million during the year ended December 31, 2024 primarily resulting

from increases in travel and events spending.

Contractual gold payments

Contractual gold payments expense decreased 64.5% from $17.1 million during the year ended December 31, 2022 to $6.1 million during the year ended December 31, 2023 due to the termination of our deferred consideration—gold payments obligation on May 10, 2023.

There was no contractual gold payments expense

recognized during the year ended December 31, 2024 due to the termination of our deferred consideration—gold payments obligation

on May 10, 2023.

See Note 9 to our Consolidated Financial Statements for additional information.

Professional fees

Professional fees increased 37.5% from $13.8 million during the year ended December 31, 2022 to $19.0 million during the year ended December 31, 2023 due to higher expenses related to our digital assets business, as well as expenses incurred to terminate our deferred consideration—gold payments obligation and higher expenses related to an activist campaign.

Professional fees increased 11.2% from $19.0 million

during the year ended December 31, 2023 to $21.1 million during the year ended December 31, 2024 due to $4.3 million of legal and other

related expenses expected to be covered by insurance that were incurred in connection with the SEC ESG Settlement, partly offset by lower

expenses incurred in response to an activist campaign.

Occupancy, communications and equipment

Occupancy, communications and equipment expense increased 20.2% from $3.9 million during the year ended December 31, 2022 to $4.7 million during the year ended December 31, 2023 as our New York office lease became effective in May 2022.

Occupancy, communications and equipment expense

increased 14.1% from $4.7 million during the year ended December 31, 2023 to $5.3 million during the year ended December 31, 2024 due

to the increased cost of renewed office leases.

Depreciation and amortization

Depreciation and amortization expense increased 232.8% from $0.3 million during the year ended December 31, 2022 to $0.9 million during the year ended December 31, 2023 due to amortization of software development costs.

Depreciation and amortization expense increased

100.9% from $0.9 million during the year ended December 31, 2023 to $1.8 million during the year ended December 31, 2024 due to higher

amortization of software development costs.

Third-party distribution fees

Third -party distribution fees increased 22.5% from $7.7 million during the year ended December 31, 2022 to $9.4 million during the year ended December 31, 2023 primarily due to AUM growth we are experiencing in Latin America.

Other expenses increased 13.2% from $8.7 million during the year ended December 31, 2022 to $9.9 million during the year ended December 31, 2023 primarily due to higher travel, public relations and Board of Directors expenses.

Third-party distribution fees increased 18.8%

from $9.4 million during the year ended December 31, 2023 to $11.1 million during the year ended December 31, 2024 primarily due to growth

in AUM across our various platforms, as well as new platform relationships that expanded our distribution reach.

Other expenses increased 6.8% from $9.9 million

during the year ended December 31, 2023 to $10.5 million during the year ended December 31, 2024 primarily due to higher insurance and

travel-related expenses.

Other Income/(Expenses)

4 unchanged sentences

Loss on extinguishment of convertible notes

Other losses, net

Other gains/(losses), net

Total other income/(expenses), net

Year Ended December 31,

As a Percent of Revenues:

3 unchanged sentences

Loss on extinguishment of convertible notes

Other losses, net

Other gains/(losses), net

Total other income/(expenses), net

Interest expense

Interest expense was essentially unchanged during the year ended December 31, 2023.

Our effective interest rate on our outstanding convertible notes during the years ended December 31, 2022 and 2023 was 4.6% and 4.9%, respectively.

Interest expense increased 24.1% from $15.2

million during the year ended December 31, 2023 to $18.9 million during the year ended December 31, 2024 due to a higher level of debt

outstanding, partly offset by a lower average interest rate.

Our effective interest rate on our outstanding

Convertible Notes during the years ended December 31, 2023 and 2024 was 4.9% and 4.5%, respectively.

Gain on revaluation/termination of deferred consideration

We recognized a gain on revaluation/termination of deferred consideration—gold payments of $27.8 million and $62.0 million during the years ended December 31, 2022 and 2023, respectively.

This obligation was terminated on May 10, 2023 for approximately $137.0 million.

No gains or losses on revaluation/termination

of deferred consideration—gold payments were recognized during the year ended December 31, 2024, as this obligation was terminated

on May 10, 2023 for approximately $137.0 million.

See Note 9 to our Consolidated Financial Statements for additional information.

Interest income

Interest income increased 23.5% from $3.3 million during the year ended December 31, 2022 to $4.1 million during the year ended December 31, 2023 due to rising interest rates, partially offset by a decrease in our interest -bearing assets.

During the year ended December 31, 2023, we recognized a non -cash impairment charge of $7.9 million primarily related to our investment in Securrency, Inc.

Interest income increased 65.4% from $4.1 million

during the year ended December 31, 2023 to $6.8 million during the year ended December 31, 2024 due to a higher level of interest-bearing

No impairments were recognized during the year

ended December 31, 2024, while during the year ended December 31, 2023, we recognized a non-cash impairment charge of $7.9 million primarily

related to our investment in Securrency, Inc.

upon the sale of Securrency, Inc.

to an unrelated third party.

(See Notes 7, 8, 13 and 26 to our Consolidated Financial Statements).

(See Notes 7 and 26 to our

Consolidated Financial Statements).

Other losses, net

Other losses, net were $36.3 million and $1.6 million during the years ended December 31, 2022 and 2023, respectively.

This includes a charge of $19.9 million and $1.4 million during the years ended December 31, 2022 and 2023, respectively, arising from the release of a tax -related indemnification asset upon the expiration of the statute of limitations.

An equal and offsetting benefit has been recognized in income tax expense.

During the years ended December 31, 2022 and 2023, we also recognized losses on our financial instruments owned and investments of $16.9 million and $0.7 million, respectively.

Gains and losses also generally arise from the sale of gold earned from advisory fees paid by our physically -backed gold ETPs, foreign exchange fluctuations and other miscellaneous items.

Our effective income tax rate for 2023 was 13.8%, resulting in income tax expense of $16.5 million.

The effective tax rate differs from the federal statutory rate of 21% primarily due to a non -taxable gain on revaluation/termination of deferred consideration, a reduction in unrecognized tax benefits associated with the release of the tax -related indemnification asset described above and a lower tax rate on foreign earnings.

These items were partly offset by a non -deductible loss on extinguishment of our 4.25% Convertible Senior Notes due 2023 during the first quarter of 2023, an increase in the deferred tax asset valuation allowance on losses recognized on our investments and non -deductible executive compensation.

Our effective income tax rate for the year ended December 31, 2022 was negative 26.9%, resulting in an income tax benefit of $10.7 million.

Our tax rate differs from the federal statutory rate of 21% primarily due to a $19.9 million reduction in unrecognized tax benefits associated with the release of the tax -related indemnification asset described above, a reduction in the valuation allowance on foreign net operating losses, a non -taxable gain on revaluation of deferred consideration and a lower tax rate on foreign earnings.

These items were partly offset by an increase in the deferred tax asset valuation allowance on losses recognized on financial instruments owned.

Other gains/(losses), net were ($1.6) million

and $0.9 million during the years ended December 31, 2023 and 2024, respectively.

The current year includes a $4.0 million civil money

penalty in connection with the SEC ESG Settlement.

Also included are net gains of $4.9 million and net losses of $1.1 million on our financial

instruments owned and our investments, respectively.

Gains and losses also generally arise from the sale of gold earned from advisory

fees paid by our physically-backed gold ETPs, foreign exchange fluctuations and other miscellaneous items.

Our effective income tax rate for 2024 was 30.1%,

resulting in an income tax expense of $28.7 million.

Our tax rate differs from the federal statutory rate of 21.0% primarily due to a

non-deductible loss on extinguishment of convertible notes, a non-deductible civil money penalty of $4.0 million in connection with the

SEC ESG Settlement and non-deductible executive compensation.

These items were partly offset by a lower tax rate on foreign earnings.

Our effective income tax rate for 2023 was 13.8%,

resulting in income tax expense of $16.5 million.

The effective tax rate differs from the federal statutory rate of 21% primarily due

to a non-taxable gain on revaluation/termination of deferred consideration, a reduction in unrecognized tax benefits associated with the

release of a tax-related indemnification asset and a lower tax rate on foreign earnings.

These items were partly offset by a non-deductible

loss on extinguishment of our 4.25% Convertible Senior Notes due 2023 during the first quarter of 2023, an increase in the deferred tax

asset valuation allowance on losses recognized on our investments and non-deductible executive compensation.

Year Ended December 31, 2023 Compared to Year Ended December 31,

3 unchanged sentences

Advisory fees

Other revenues

Total revenues

1 unchanged sentence

Advisory fees

Advisory fee revenues decreased 1.5% from $298.1 million during the year ended December 31, 2021 to $293.6 million in the comparable period in 2022 as higher average AUM was offset by a decline in our average advisory fee.

Our average advisory fee decreased from 0.41% during the year ended December 31, 2021 to 0.38% during the year ended December 31, 2022 due to AUM mix shift.

Other income increased 23.1% from $6.3 million during the year ended December 31, 2021 to $7.7 million in the comparable period in 2022 primarily due to higher fees associated with our European listed products.

Advisory fee revenues increased 13.5% from $293.6

million during the year ended December 31, 2022 to $333.2 million during the year ended December 31, 2023 as higher average AUM was partially

offset by a decline in our average advisory fee.

Our average advisory fee declined from 0.38% during the year ended December 31, 2022

to 0.36% during the year ended December 31, 2023.

Other revenues

Other revenues increased 105.0% from $7.7 million

during the year ended December 31, 2022 to $15.8 million during the year ended December 31, 2023 primarily due to higher other revenues

attributable to our European listed ETPs.

Operating Expenses

22 unchanged sentences

Compensation and benefits

Compensation and benefits expense increased 11.0% from $88.2 million during the year ended December 31, 2021 to $97.9 million in the comparable period in 2022 due to higher incentive compensation and headcount.

Compensation and benefits expense increased

11.9% from $97.9 million during the year ended December 31, 2022 to $109.5 million during the year ended December 31, 2023 due to higher

stock-based compensation and headcount.

Headcount was 273 and 303 at December 31, 2022 and 2023, respectively.

Fund management and administration

Fund management and administration expense increased 9.9% from $58.9 million during the year ended December 31, 2021 to $64.8 million in the comparable period in 2022 primarily due to higher average AUM, product launches and inflows.

Fund management and administration expense increased

10.2% from $64.8 million during the year ended December 31, 2022 to $71.3 million during the year ended December 31, 2023 primarily due

to higher average AUM and inflows.

We had 79 U.S.

listed ETFs and 260 European listed ETPs at December 31, 2022 compared to 76 U.S.

listed ETFs and 269 European listed ETPs at December 31, 2022.

ETFs and 261 European listed ETPs at December 31, 2023.

Marketing and advertising

Marketing and advertising expense increased 8.6% from $14.1 million during the year ended December 31, 2021 to $15.3 million in the comparable period in 2022 primarily resulting from an increase in online and television advertising.

Marketing and advertising expense increased

12.8% from $15.3 million during the year ended December 31, 2022 to $17.3 million during the year ended December 31, 2023 primarily

resulting from higher spending related to our U.S.

listed products.

Sales and business development

Sales and business development expense increased 19.8% from $9.9 million during the year ended December 31, 2021 to $11.9 million in the comparable period in 2022 primarily resulting from increases in conference and events spending as well as market data costs.

Sales and business development expense increased

14.4% from $11.9 million during the year ended December 31, 2022 to $13.6 million during the year ended December 31, 2023 primarily resulting

from increases in travel and events spending.

Contractual gold payments

Contractual gold payments expense was essentially unchanged from the year ended December 31, 2021.

This expense was associated with the annual payment of 9,500 ounces of gold and was calculated using the average daily spot price of $1,800 per ounce during the years ended December 31, 2021 and 2022, respectively.

Contractual gold payments expense decreased

64.5% from $17.1 million during the year ended December 31, 2022 to $6.1 million during the year ended December 31, 2023 due to the

termination of our deferred consideration—gold payments obligation on May 10, 2023.

See Note 9 to our Consolidated Financial Statements

for additional information.

Professional fees

Professional fees increased 81.2% from $7.6 million during the year ended December 31, 2021 to $13.8 million in the comparable period in 2022 due to $4.5 million incurred in response to an activist campaign and spending related to our digital assets business.

Professional fees increased 37.5% from $13.8 million

during the year ended December 31, 2022 to $19.0 million during the year ended December 31, 2023 due to higher expenses related to our

digital assets business, as well as expenses incurred to terminate our deferred consideration—gold payments obligation and higher

expenses related to an activist campaign.

Occupancy, communications and equipment

Occupancy, communications and equipment expense decreased 15.8% from $4.6 million during the year ended December 31, 2021 to $3.9 million in the comparable period in 2022 as we reduced our office footprint in the U.S.

Occupancy, communications and equipment expense

increased 20.2% from $3.9 million during the year ended December 31, 2022 to $4.7 million during the year ended December 31, 2023 as our

New York office lease became effective in May 2022.

Depreciation and amortization

Depreciation and amortization expense decreased 64.5% from $0.7 million during the year ended December 31, 2021 to $0.3 million in the comparable period in 2022 as we reduced our office footprint in the U.S.

Depreciation and amortization expense increased

232.8% from $0.3 million during the year ended December 31, 2022 to $0.9 million during the year ended December 31, 2023 due to amortization

of software development costs.

Third-party distribution fees

Third -party distribution fees increased 6.7% from $7.2 million during the year ended December 31, 2021 to $7.7 million in the comparable period in 2022 primarily due to new platform relationships in Europe and higher U.S.

listed AUM on third -party platforms, partly offset by lower fees paid to our third -party marketing agent in Latin America.

Other expenses increased 25.6% from $6.9 million during the year ended December 31, 2021 to $8.7 million in the comparable period in 2022 primarily due to higher insurance, public company compliance, travel and directors expenses.

Third-party distribution fees increased 22.5%

from $7.7 million during the year ended December 31, 2022 to $9.4 million during the year ended December 31, 2023 primarily due to AUM

growth we are experiencing in Latin America.

Other expenses increased 13.2% from $8.7 million

during the year ended December 31, 2022 to $9.9 million during the year ended December 31, 2023 primarily due to higher travel, public

relations and Board of Directors expenses.

Other Income/(Expenses)

3 unchanged sentences

Interest income

Loss on extinguishment of convertible notes

Other losses, net

Total other expenses, net

Total other income/(expenses), net

Year Ended December 31,

As a Percent of Revenues:

2 unchanged sentences

Interest income

Loss on extinguishment of convertible notes

Other losses, net

Total other expenses, net

Total other income/(expenses), net

Interest expense

Interest expense increased 21.1% from $12.3 million during the year ended December 31, 2021 to $14.9 million in the comparable period in 2022 due to a higher level of debt outstanding in the current period.

Our effective interest rate was 4.6% during the years ended December 31, 2021 and 2022.

Interest expense was essentially unchanged during

the year ended December 31, 2023.

Our effective interest rate on our outstanding

convertible notes during the years ended December 31, 2022 and 2023 was 4.6% and 4.9%, respectively.

Gain on revaluation/termination of deferred consideration

We recognized a gain on revaluation/termination of deferred consideration—gold payments of $2.0 million and $27.8 million during the years ended December 31, 2021 and 2022, respectively.

The gain was primarily due to an increase in the discount rate (from 9.0% to 11.0%) used to compute the present value of the annual payment obligations as well as a steepening of the forward -looking gold curve.

The magnitude of any gain or loss is highly correlated to changes in the discount rate and the magnitude of the change in the forward -looking price of gold.

We recognized a gain on revaluation/termination

of deferred consideration—gold payments of $27.8 million and $62.0 million during the years ended December 31, 2022 and 2023, respectively.

This obligation was terminated on May 10, 2023 for approximately $137.0 million.

See Note 9 to our Consolidated Financial Statements for

additional information.

Interest income

Interest income increased 65.3% from $2.0 million during the year ended December 31, 2021 to $3.3 million in the comparable period in 2022 due to an increase in our interest -bearing assets.

During the year ended December 31, 2021, we recognized impairment charges totaling $16.2 million, including a loss of $9.3 million upon the termination of the lease of our former principal executive office at 245 Park Avenue, New York, New York, $6.6 million related to the write -off of leasehold improvements and fixed assets associated with our former New York office and $0.3 million upon exiting our London office (See Notes 7, 8, 13 and 26 to our Consolidated Financial Statements).

Interest income increased 23.5% from $3.3 million

during the year ended December 31, 2022 to $4.1 million during the year ended December 31, 2023 due to rising interest rates, partially

offset by a decrease in our interest-bearing assets.

During the year ended December 31, 2023, we

recognized a non-cash impairment charge of $7.9 million primarily related to our investment in Securrency, Inc.

upon the sale of Securrency,

to an unrelated third party.

(See Notes 7, 8, 13 and 26 to our Consolidated Financial Statements).

Other losses, net

Other losses, net were ($7.9) million and ($36.3) million during the years ended December 31, 2021 and 2022, respectively.

This includes a charge of $5.2 million and $19.9 million during the years ended December 31, 2021 and 2022, respectively, arising from the release of a tax -related indemnification asset upon the expiration of the statute of limitations.

Other losses, net were $36.3 million and $1.6

million during the years ended December 31, 2022 and 2023, respectively.

This includes a charge of $19.9 million and $1.4 million during

the years ended December 31, 2022 and 2023, respectively, arising from the release of a tax-related indemnification asset upon the expiration

of the statute of limitations.

An equal and offsetting benefit has been recognized in income tax expense.

During the year ended December 31, 2021 and 2022, we also recognized losses on our financial instruments owned of $3.7 million and $16.5 million, respectively.

In addition, during the year ended December 31, 2021, we recognized a gain of $0.8 million related to the remeasurement of contingent consideration payable to us from the sale of our former Canadian ETF business.

Gains and losses also generally arise from the sale of gold earned from advisory fees paid by our physically -backed gold ETPs, foreign exchange fluctuations and other miscellaneous items.

Our effective income tax rate for the year ended December 31, 2022 was negative 26.9%, resulting in an income tax benefit of $10.7 million.

These items were partly offset by an increase in the deferred tax asset valuation allowance on losses recognized on financial instruments owned.

Our effective income tax rate for the year ended December 31, 2021 of 12.1% resulted in income tax expense of $6.9 million.

Our effective income tax rate differs from the federal statutory rate of 21% primarily due to a $5.2 million reduction in unrecognized tax benefits and a lower tax rate on foreign earnings.

These items were partly offset by tax shortfalls associated with the vesting and exercise of stock -based compensation and non -deductible executive compensation.

During the years ended December

31, 2022 and 2023, we also recognized losses on our financial instruments owned and investments of $16.9 million and $0.7 million, respectively.

Gains and losses also generally arise from the sale of gold earned from advisory fees paid by our physically-backed gold ETPs, foreign

exchange fluctuations and other miscellaneous items.

Our effective income tax rate for 2023 was 13.8%,

resulting in income tax expense of $16.5 million.

The effective tax rate differs from the federal statutory rate of 21% primarily due

to a non-taxable gain on revaluation/termination of deferred consideration, a reduction in unrecognized tax benefits associated with the

release of the tax-related indemnification asset described above and a lower tax rate on foreign earnings.

These items were partly offset

by a non-deductible loss on extinguishment of our 4.25% Convertible Senior Notes due 2023 during the first quarter of 2023, an increase

in the deferred tax asset valuation allowance on losses recognized on our investments and non-deductible executive compensation.

Our effective income tax rate for the year ended

December 31, 2022 was negative 26.9%, resulting in an income tax benefit of $10.7 million.

Our tax rate differs from the federal statutory

rate of 21% primarily due to a $19.9 million reduction in unrecognized tax benefits associated with the release of the tax-related indemnification

asset described above, a reduction in the valuation allowance on foreign net operating losses, a non-taxable gain on revaluation of deferred

consideration and a lower tax rate on foreign earnings.

These items were partly offset by an increase in the deferred tax asset valuation

allowance on losses recognized on financial instruments owned.

Quarterly Results

The following tables set forth our unaudited consolidated quarterly statement of operations data, both in dollar amounts and as a percentage of total revenues, and our unaudited consolidated quarterly operating data for the quarters in 2023 and 2022.

In our opinion, this unaudited information has been prepared on substantially the same basis as the consolidated financial statements appearing elsewhere in this Report and includes all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the unaudited consolidated quarterly data.

The unaudited consolidated quarterly data should be read together with the consolidated financial statements and related notes included elsewhere in this Report.

The following tables set forth our unaudited

consolidated quarterly statement of operations data, both in dollar amounts and as a percentage of total revenues, and our unaudited consolidated

quarterly operating data for the quarters in 2024 and 2023.

In our opinion, this unaudited information has been prepared on substantially

the same basis as the consolidated financial statements appearing elsewhere in this Report and includes all adjustments (consisting of

normal recurring adjustments) necessary for a fair statement of the unaudited consolidated quarterly data.

The unaudited consolidated

quarterly data should be read together with the consolidated financial statements and related notes included elsewhere in this Report.

The results for any quarter are not necessarily indicative of results for any future period, and you should not rely on them as such.

2 unchanged sentences

Advisory fees

Other revenues

Total revenues

1 unchanged sentence

Compensation and benefits

Fund management and administration

Fund management and

administration

Marketing and advertising

2 unchanged sentences

Professional fees

Occupancy, communications and equipment

Occupancy, communications and

Depreciation and amortization

4 unchanged sentences

Interest expense

Gain/(loss) on revaluation/termination of deferred consideration

Gain on revaluation/termination of

deferred consideration

Interest income

Loss on extinguishment of convertible notes

Loss on extinguishment of

convertible notes

Other gains and losses, net

Income/(loss) before income taxes

Income tax expense/(benefit)

Income before income taxes

Income tax expense

Net income/(loss)

5 unchanged sentences

Advisory fees

Other revenues

Total revenues

1 unchanged sentence

Compensation and benefits

Fund management and administration

Fund management and

administration

Marketing and advertising

2 unchanged sentences

Professional fees

Occupancy, communications and equipment

Occupancy, communications and

Depreciation and amortization

4 unchanged sentences

Interest expense

Gain/(loss) on revaluation/termination of deferred consideration

Gain on revaluation/termination

of deferred consideration

Interest income

Loss on extinguishment of convertible notes

Loss on extinguishment of

convertible notes

Other gains and losses, net

Income/(loss) before income taxes

Income tax expense/(benefit)

Income before income taxes

Income tax expense

Net income/(loss)

Operating Statistics

GLOBAL ETPs (in millions )

Beginning of period assets

ETPs (in millions )

period assets

(Outflows)/inflows

Market appreciation/(depreciation)

End of period assets

Average assets during the period

Average advisory fee during the period

Number of ETPs—end of the period

(depreciation)/appreciation

of period assets

Average assets during the

advisory fee during the period

Number of ETPs—end

of the period

LISTED ETFs (in millions )

1 unchanged sentence

(Outflows)/inflows

Market appreciation/(depreciation)

End of period assets

Average assets during the period

Number of ETFs—end of the period

EUROPEAN LISTED ETPs ( in millions )

(depreciation)/appreciation

of period assets

Average assets during the

Number of ETFs—end

of the period

Beginning of period assets

(Outflows)/inflows

Market appreciation/(depreciation)

End of period assets

Average assets during the period

Number of ETPs—end of the period

PRODUCT CATEGORIES

(depreciation)/appreciation

of period assets

Average assets during the

Number of ETPs—end

of the period

Beginning of period assets

Inflows/(outflows)

Market appreciation/(depreciation)

End of period assets

Average assets during the period

Commodity & Currency

(depreciation)/appreciation

of period assets

Average assets during the

Beginning of period assets

(Outflows)/inflows

Market appreciation/(depreciation)

End of period assets

Average assets during the period

(depreciation)/appreciation

of period assets

Average assets during the

Beginning of period assets

(Outflows)/inflows

Market appreciation/(depreciation)

End of period assets

Average assets during the period

International Developed Market Equity

(depreciation)/appreciation

of period assets

Average assets during the

International

Developed Market Equity

Beginning of period assets

Inflows/(outflows)

Market appreciation/(depreciation)

End of period assets

Average assets during the period

(depreciation)/appreciation

of period assets

Average assets during the

Emerging Market Equity

Beginning of period assets

Inflows/(outflows)

Market appreciation/(depreciation)

(Outflows)/inflows

(depreciation)/appreciation

End of period assets

Average assets during the period

Leveraged & Inverse

Beginning of period assets

(Outflows)/inflows

Market appreciation/(depreciation)

(depreciation)/appreciation

End of period assets

3 unchanged sentences

Inflows/(outflows)

Market appreciation/(depreciation)

appreciation/(depreciation)

End of period assets

2 unchanged sentences

Inflows/(outflows)

Market appreciation/(depreciation)

(depreciation)/appreciation

End of period assets

Average assets during the period

Previously issued statistics may be restated due to fund closures and trade adjustments

Previously issued statistics may be restated

due to fund closures and trade adjustments

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.

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

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.

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 Report include:

Adjusted Net Income and Diluted Earnings per Share.

We disclose adjusted 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 measurements provides investors with a consistent way to analyze our performance.

We disclose adjusted 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 measurements provides investors with a consistent way to

analyze our performance.

These non-GAAP financial measurements exclude the following:

● Unrealized gains or losses on revaluation/termination of deferred consideration—gold payments:

Deferred consideration—gold payments was an obligation we assumed in connection with the ETFS Acquisition that was carried at fair value.

This item represented 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 have had 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 was not core to our operating business.

The item was 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.

During the second quarter of 2023, we terminated this obligation for aggregate consideration totaling approximately $137.0 million.

Deferred consideration—gold

payments was an obligation we assumed in connection with the ETFS Acquisition that was carried at fair value.

This item represented the

present value of an obligation to pay fixed ounces of gold into perpetuity and is measured using forward-looking gold prices.

in the forward-looking price of gold and changes in the discount rate used to compute the present value of the annual payment obligations

have had 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 was not core to our operating business.

The item was 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.

During the second quarter of 2023, we terminated this obligation for aggregate consideration totaling approximately

$137.0 million.

● Gains or losses on financial instruments owned:

We account for our financial instruments owned as trading securities, which requires these instruments to be measured at fair value with gains and losses reported in net income.

We exclude these items when calculating our non -GAAP financial measurements as the gains and losses introduce volatility in earnings and are not core to our operating business.

• Tax windfalls and shortfalls 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.

We account for our financial instruments owned as trading securities, which

requires these instruments to be measured at fair value with gains and losses reported in net income.

We exclude these items when calculating

our non-GAAP financial measurements as the gains and losses introduce volatility in earnings and are not core to our operating business.

● Tax windfalls and shortfalls upon vesting and stock-based compensation awards:

GAAP requires the recognition of tax windfalls

and shortfalls within income tax expense.

These items arise upon the vesting of stock-based compensation awards and the magnitude is directly

correlated to the number of awards vesting as well as the difference between the price of our stock on the date the award was granted

and the date the award vested.

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.

● Imputed interest on our payable to GBH:

During the fourth quarter of 2023, we repurchased our Series C Preferred Stock, which was convertible into approximately 13.1 million shares of our common stock, from GBH for aggregate cash consideration of approximately $84.4 million.

GAAP, the obligation is recorded at its present value utilizing a market rate of interest on the closing date of 7.0% and the corresponding discount is amortized as interest expense pursuant to the effective interest method of accounting over the life of the obligation.

We exclude this item when calculating our non -GAAP financial measurements as recognition of interest expense is non -cash and contrary to the stated terms of our obligation.

During the fourth quarter of 2023, we repurchased our Series C Preferred Stock, which

was convertible into approximately 13.1 million shares of our common stock, from GBH for aggregate cash consideration of approximately

$84.4 million.

Under the terms of the transaction, we paid GBH $40.0 million on the closing date, with the remainder of the purchase price

payable in equal, interest-free installments on the first, second and third anniversaries of the closing date.

GAAP, the obligation

is recorded at its present value utilizing a market rate of interest on the closing date of 7.0% and the corresponding discount is amortized

as interest expense pursuant to the effective interest method of accounting over the life of the obligation.

We exclude this item when

calculating our non-GAAP financial measurements as recognition of interest expense is non-cash and contrary to the stated terms of our

● Other items:

Unrealized gains and losses recognized on our investments, changes in deferred tax asset valuation allowances, expenses incurred in response to an activist campaign, impairment charges, a loss on extinguishment of debt and a gain recognized upon the sale of our Canadian ETF business (including the remeasurement of contingent consideration) are excluded when calculating our non -GAAP financial measurements.

Adjusted Net Income and Diluted Earnings per Share:

Ended December 31,

Losses on extinguishment of convertible notes, a civil money penalty in connection with the SEC ESG Settlement,

gains and losses recognized on our investments, changes in deferred tax asset valuation allowance, expenses incurred in response to an

activist campaign, impairments, remeasurement of contingent consideration payable to us from the sale of our former Canadian ETF business

and litigation expenses associated with certain provisions of our Stockholder Rights Agreement, dated as of March 17, 2023, as amended,

are excluded when calculating our non-GAAP financial measurements.

Years Ended December 31,

Net Income and Diluted Earnings per Share:

Net income, as reported

Gain on revaluation/termination of deferred consideration

Loss on extinguishment of convertible notes, net of income taxes

Impairments, net of income taxes

Expenses incurred in response to an activist campaign, net of income taxes

Increase in deferred tax valuation allowance on financial instruments owned and investments

Gain recognized from the sale of Canadian ETF business, including remeasurement of contingent consideration

Add back/(deduct):

Unrealized loss/(gain) recognized on our investments, net of income taxes

Losses on financial instruments owned, at fair value, net of income taxes

Litigation expenses associated with certain provisions of the Stockholder Rights Agreement, net of income taxes

Imputed interest on payable to GBH, net of income taxes

Tax windfalls upon vesting and exercise of stock-based compensation awards

Decrease in deferred tax valuation allowance on net operating losses of a European subsidiary

Loss on extinguishment

of convertible notes, net of income taxes

Civil money penalty

in connection with SEC ESG Settlement

Expenses incurred in

response to an activist campaign, net of income taxes

(Deduct)/add back:

(Gains)/Losses

on financial instruments owned, at fair value, net of income taxes

Imputed interest on

payable to GBH, net of income taxes

(Deduct)/add back:

(Decrease)/increase

in deferred tax valuation allowance on financial instruments owned and investments

Unrealized loss recognized

on our investments, net of income taxes

Tax windfalls upon vesting

and exercise of stock-based compensation awards

Gain on revaluation/termination

of deferred consideration

Impairments, net of

Gain recognized from the

sale of Canadian ETF business, including remeasurement of contingent consideration

Litigation expenses

associated with certain provisions of the Stockholder Rights Agreement, net of income taxes

in deferred tax valuation allowance on net operating losses of a European subsidiary

Adjusted net income

Income distributed to participating securities

Undistributed income allocable to participating securities

Adjusted net income available to common stockholders

Weighted average diluted shares, excluding participating securities (See Note 21 to our Consolidated Financial Statements)

Adjusted earnings per share—diluted

Adjusted net income as reported on a non -GAAP basis during the year ended December 31, 2023 also excludes a gain of $8.0 million recognized upon the repurchase of our Series C Preferred Stock, which was convertible into approximately 13.1 million shares of our common stock.

GAAP, this amount is excluded from net income, but is required to be added to net income to arrive at income available to common stockholders in the calculation of earnings per share.

Income distributed to

participating securities

Undistributed

income allocable to participating securities

Adjusted net income available to

common stockholders

Weighted average

diluted shares, excluding participating securities (See Note 21 to our Consolidated Financial Statements)

earnings per share—diluted

During the years ended December 31, 2024 and

2023, we recognized a loss of $13.2 million (which includes an excise tax of $1.8 million) and a gain of $8.0 million, respectively, related

to the repurchase of the Series A Preferred Stock and the Series C Preferred Stock.

These items are excluded from net income, but are

required to be added to net income to arrive at income available to common stockholders in the calculation of earnings per share under

Liquidity and Capital Resources

The following table summarizes key data regarding our liquidity, capital resources and use of capital to fund our operations:

The following table summarizes key data regarding

our liquidity, capital resources and use of capital to fund our operations:

Balance Sheet Data (in thousands):

14 unchanged sentences

Foreign exchange rate effect

(Decrease)/increase in cash and cash equivalents

We consider our available liquidity to be our liquid assets, less our current liabilities and regulatory capital requirements of certain European subsidiaries.

Liquid assets consist of cash and cash equivalents, financial instruments owned, at fair value, accounts receivable and securities held -to-maturity .

Increase/(decrease) in cash and cash equivalents

We consider our available liquidity to be our

liquid assets, less our current liabilities, seed capital in WisdomTree Digital Funds and regulatory capital requirements of certain of

our subsidiaries.

Liquid assets consist of cash and cash equivalents, financial instruments owned, at fair value, accounts receivable

and securities held-to-maturity.

Our financial instruments owned, at fair value are highly liquid investments.

Accounts receivable are current assets and primarily represent receivables from advisory fees we earn from our ETPs.

Our current liabilities consist primarily of payments owed to vendors and third parties in the normal course of business, deferred consideration and accrued incentive compensation for employees.

Cash and cash equivalents decreased $2.8 million during the year ended December 31, 2023 due to $184.3 million used to repurchase and settle our 4.25% Convertible Senior Notes due 2023, $57.4 million used to purchase financial instruments owned, at fair value, $50.0 million used to terminate our deferred consideration—gold payments obligation, $40.0 million used to repurchase our Series C Preferred Stock, $20.1 million used to pay dividends on our common stock, $11.2 million used to purchase investments, $3.6 million used to repurchase our common stock, $3.5 million used to pay issuance costs in respect of our 5.75% Convertible Senior Notes due 2028, or the 2023 Notes, $2.1 million used for software development and $1.2 million used in other activities.

These decreases were partly offset by $130.0 million of proceeds from the issuance of the 2023 Notes, $123.6 million of proceeds from the sale of financial instruments owned, at fair value, $85.6 million of net cash provided by operating activities, $28.8 million of proceeds from the exit from our investment in Securrency, Inc.

in connection with the sale of Securrency, Inc.

to an unaffiliated third party, $1.5 million from receipt of contingent consideration related to the sale of our Canadian ETF business, and $1.1 million from other activities.

Cash and cash equivalents decreased $8.6 million during the year ended December 31, 2022 due to $55.1 million of net cash provided by operating activities and $52.1 million of proceeds from the sale of financial instruments owned, at fair value.

These increases were partly offset by $67.7 million used to purchase financial instruments owned, at fair value, $21.9 million used to purchase investments, $19.4 million used to pay dividends, $3.4 million used to repurchase our common stock and $3.4 million from other activities.

Cash and cash equivalents increased $67.3 million during the year ended December 31, 2021 due to $150.0 million of proceeds from the issuance of our 3.25% Convertible Senior Notes due 2026, or the 2021 Notes, $75.3 million of net cash provided by operating activities, $19.4 million of proceeds from the sale of financial instruments owned, at fair value and $2.4 million of proceeds from the receipt of contingent consideration from the sale of our Canadian ETF business.

These increases were partly offset by $115.5 million used to purchase financial instruments owned, at fair value, $34.5 million used to repurchase our common stock, $19.5 million used to pay dividends on our common stock, $5.8 million used to purchase investments, $4.3 million used to pay the 2021 Notes issuance costs and $0.2 million from other activities.

Issuance of Convertible Notes

On February 14, 2023, we issued and sold $130.0 million in aggregate principal amount of 5.75% Convertible Senior Notes due 2028 (the “2023 Notes”) pursuant to an indenture dated February 14, 2023, between us and U.S.

Bank Trust Company, National Association, as trustee, in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”).

On June 14, 2021, we issued and sold $150.0 million in aggregate principal amount of 3.25% Convertible Senior Notes due 2026 (the “2021 Notes”) pursuant to an indenture dated June 14, 2021, between us and the trustee, in a private offering to qualified institutional buyers pursuant to Rule 144A.

On June 16, 2020, we issued and sold $150.0 million in aggregate principal amount of 4.25% Convertible Senior Notes due 2023 (the “June 2020 Notes”) pursuant to an indenture dated June 16, 2020, between us and the trustee, in a private offering to qualified institutional buyers pursuant to Rule 144A.

On August 13, 2020, we issued and sold $25.0 million in aggregate principal amount of 4.25% Convertible Senior Notes due 2023 at a price equal to 101% of the principal amount thereof, plus interest deemed to have accrued since June 16, 2020, which constituted a further issuance of, and formed a single series with, our June 2020 Notes (the “August 2020 Notes” and together with the June 2020 Notes, the “2020 Notes”).

In connection with the issuance of the 2023 Notes, we repurchased $115.0 million in aggregate principal amount of the 2020 Notes.

As a result of this repurchase, we recognized a loss on extinguishment of approximately $9.7 million during the year ended December 31, 2023.

The remainder of the 2020 Notes matured on June 15, 2023 and were settled for approximately $59.9 million of cash and approximately 1.0 million shares of our common stock.

After the repurchase and maturity of the 2020 Notes and the issuance of the 2023 Notes (such 2023 Notes, together with the 2021 Notes, the “Convertible Notes”), we had $280.0 million in aggregate principal amount of Convertible Notes outstanding.

Accounts receivable are

current assets and primarily represent receivables from advisory fees we earn from our ETPs.

Our current liabilities consist primarily

of payments owed to vendors and third parties in the normal course of business, deferred consideration and accrued incentive compensation

for employees.

Cash and cash equivalents increased $51.9 million

during the year ended December 31, 2024 due to $345.0 million of proceeds from the issuance of the 3.25% Convertible Senior Notes due

2029, $113.5 million of net cash provided by operating activities and $48.1 million of proceeds from the sale of financial instruments

owned, at fair value.

These increases were partially offset by $143.8 million used to repurchase the Series A Preferred Stock, $132.7

million to repurchase a portion of our 5.75% Convertible Senior Notes due 2028, $69.4 million used to purchase financial instruments owned,

at fair value, $62.9 million used to repurchase our common stock, $19.0 million used to pay dividends, $14.8 million paid to GBH, $7.7

million used to pay convertible notes issuance costs, $2.3 million used to pay for software development and $2.1 million used in other

Cash and cash equivalents decreased $2.8 million

during the year ended December 31, 2023 due to $184.3 million used to repurchase and settle our 4.25% Convertible Senior Notes due 2023,

$57.4 million used to purchase financial instruments owned, at fair value, $50.0 million used to terminate our deferred consideration—gold

payments obligation, $40.0 million used to repurchase our Series C Preferred Stock, $20.1 million used to pay dividends on our common

stock, $11.2 million used to purchase investments, $3.6 million used to repurchase our common stock, $3.5 million used to pay issuance

costs in respect of our 5.75% Convertible Senior Notes due 2028, $2.1 million used for software development and $1.2 million used in other

These decreases were partly offset by $130.0 million of proceeds from the issuance of the 5.75% Convertible Senior Notes due

2028, $123.6 million of proceeds from the sale of financial instruments owned, at fair value, $85.6 million of net cash provided by operating

activities, $28.8 million of proceeds from the exit from our investment in Securrency, Inc.

in connection with the sale of Securrency,

to an unaffiliated third party, $1.5 million from receipt of contingent consideration related to the sale of our Canadian ETF business,

and $1.1 million from other activities.

Cash and cash equivalents decreased $8.6 million

during the year ended December 31, 2022 due to $55.1 million of net cash provided by operating activities and $52.1 million of proceeds

from the sale of financial instruments owned, at fair value.

These increases were partly offset by $67.7 million used to purchase financial

instruments owned, at fair value, $21.9 million used to purchase investments, $19.4 million used to pay dividends, $3.4 million used to

repurchase our common stock and $3.4 million from other activities.

Convertible Notes

We have the following convertible notes outstanding

as of December 31, 2024:

● $150.0 million in aggregate principal amount of 3.25% Convertible Senior Notes due 2026 (the “2026 Notes”);

● $25.8 million in aggregate principal amount of 5.75% Convertible Senior Notes due 2028 (the “2028 Notes”);

● $345.0 million in aggregate principal amount of 3.25% Convertible Senior Notes due 2029 (the “2029 Notes”).

Each class of notes were issued pursuant to

indentures dated as of the issuance dates between us and U.S.

Bank Trust Company, National Association, as trustee (either initially or

as successor to U.S.

Bank National Association, the “Trustee”), in private offerings to qualified institutional buyers pursuant

to Rule 144A under the Securities Act of 1933, as amended.

In connection with the issuance of the 2029

Notes, we repurchased $104.2 million in aggregate principal amount of 2028 Notes.

As a result of this repurchase, we recognized a loss

on extinguishment of approximately $30.6 million during the year ended December 31, 2024.

As of December 31, 2024, we had an aggregate

principal amount of $520.8 million outstanding of the 2026 Notes, the 2028 Notes and the 2029 Notes (collectively, the “Convertible

Key terms of the Convertible Notes are as follows:

Principal outstanding

Maturity date (unless earlier converted, repurchased or redeemed)

Issuance date

June 14, 2021

February 14, 2023

August 13, 2024

Maturity date (unless earlier converted, repurchased or redeemed)

June 15, 2026

August 15, 2028

August 15, 2029

Interest rate

Conversion price

Conversion rate

Initial conversion price

Initial conversion rate

Redemption price

● Interest rate:

Payable semiannually in arrears on February 15 and August 15 of each year for the 2023 Notes (beginning on August 15, 2023) and on June 15 and December 15 of each year for the 2021 Notes.

Payable semiannually in arrears on February 15 and August 15 of each year for the 2029 Notes and the 2028 Notes

and on June 15 and December 15 of each year for the 2026 Notes.

● Conversion price:

Convertible at an initial conversion rate set forth in the table above into shares of our common stock, per $1,000 principal amount of notes (equivalent to an initial conversion price set forth in the table above), subject to adjustment.

Convertible at an initial conversion rate into shares of our common stock, per $1,000 principal amount of

notes (equivalent to an initial conversion price set forth in the table above), subject to adjustment.

● Conversion:

Holders may convert at their option at any time prior to the close of business on the business day immediately preceding May 15, 2028 and March 15, 2026 for the 2023 Notes and the 2021 Notes, respectively, only under the following circumstances:

(i) if the last reported sale price of our common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the respective Convertible Notes on each applicable trading day;

(ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sales price of our common stock and the conversion rate on each such trading day;

(iii) upon a notice of redemption delivered by us in accordance with the terms of the indentures but only with respect to the Convertible Notes called (or deemed called) for redemption;

or (iv) upon the occurrence of specified corporate events.

On or after May 15, 2028 and March 15, 2026 in respect of the 2023 Notes, and the 2021 Notes, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances.

Holders may convert at their option at any time prior to the close of business on the business day immediately

preceding May 15, 2029 and May 15, 2028 for the 2029 Notes and the 2028 Notes, respectively, and March 15, 2026 for the 2026 Notes, only

under the following circumstances:

(i) if the last reported sale price of our common stock for at least 20 trading days during a period

of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to

130% of the conversion price for the respective Convertible Notes on each applicable trading day;

(ii) during the five business day period

after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount

of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sales price

of our common stock and the conversion rate on each such trading day;

(iii) upon a notice of redemption delivered by us in accordance

with the terms of the indentures but only with respect to the Convertible Notes called (or deemed called) for redemption;

the occurrence of specified corporate events.

On or after May 15, 2029 and May 15, 2028 in respect of the 2029 Notes and the 2028 Notes,

respectively, and March 15, 2026 in respect of the 2026 Notes, until the close of business on the second scheduled trading day immediately

preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances.

● Cash settlement of principal amount:

Upon conversion, we will pay cash up to the aggregate principal amount of the Convertible Notes to be converted.

At our election, we will also settle our conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted in either cash, shares of our common stock or a combination of cash and shares of its common stock.

Upon conversion, we will pay cash up to the aggregate principal amount of the Convertible

Notes to be converted.

At our election, we will also settle the conversion obligation in excess of the aggregate principal amount of the

Convertible Notes being converted in either cash, shares of our common stock or a combination of cash and shares of common stock.

● Redemption price:

We may redeem for cash all or any portion of the Convertible Notes, at our option, on or after August 20, 2025 and June 20, 2023 in respect of the 2023 Notes and the 2021 Notes, respectively, and on or prior to the 55 th scheduled trading day immediately preceding the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price for the respective Convertible Notes then in effect for at least 20 trading days, including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption, at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date.

We may redeem for cash all or any portion of the Convertible Notes, at our option, on or after August 20,

2026 and August 20, 2025 in respect of the 2029 Notes and the 2028 Notes, respectively, and June 20, 2023 in respect of the 2026 Notes

and on or prior to the 55 th scheduled trading day immediately preceding the maturity date, if the last reported sale price

of our common stock has been at least 130% of the conversion price for the respective Convertible Notes then in effect for at least 20

trading days, including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive

trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption,

at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding

the redemption date.

No sinking fund is provided for the Convertible Notes.

● Limited investor put rights:

Holders of the Convertible Notes have the right to require us to repurchase for cash all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain change of control transactions or liquidation, dissolution or common stock delisting events.

Holders of the Convertible Notes have the right to require us to repurchase for cash all or a

portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain change

of control transactions or liquidation, dissolution or common stock delisting events.

● Conversion rate increase in certain customary circumstances:

In certain circumstances, conversions in connection with a “make -whole fundamental change” (as defined in the indentures) or conversions of Convertible Notes called (or deemed called) for redemption may result in an increase to the conversion rate, provided that the conversion rate will not exceed 167.7853 shares and 144.9275 shares of our common stock per $1,000 principal amount of the 2023 Notes and the 2021 Notes, respectively (the equivalent of 43,551,214 shares of our common stock), subject to adjustment.

In certain circumstances, conversions in connection with a “make-whole

fundamental change” (as defined in the indentures) or conversions of Convertible Notes called (or deemed called) for redemption

may result in an increase to the conversion rate, provided that the conversion rate will not exceed 103.6269 shares, 167.7853 shares and

144.9275 shares of our common stock per $1,000 principal amount of the 2029 Notes, the 2028 Notes and the 2026 Notes, respectively (the

equivalent of 61,826,817 shares of our common stock based on the aggregate principal amount of Convertible Notes outstanding), subject

to adjustment.

● Seniority and Security:

The 2023 Notes and 2021 Notes rank equal in right of payment, and are our senior unsecured obligations, but are subordinated in right of payment to our obligations to make certain redemption payments (if and when due) in respect of our Series A Preferred Stock (See Note 11 to our Consolidated Financial Statements).

The indentures contain customary terms and covenants, including that upon certain events of default occurring and continuing, either the trustee or the respective holders of not less than 25% in aggregate principal amount of the respective series of Convertible Notes outstanding may declare the entire principal amount of all such respective Convertible Notes to be repurchased, plus any accrued special interest, if any, to be immediately due and payable.

The Convertible Notes rank equal in right of payment and are our senior unsecured obligations.

The indentures contain customary terms and covenants,

including that upon certain events of default occurring and continuing, either the Trustee or the respective holders of not less than

25% in aggregate principal amount of the respective series of Convertible Notes outstanding may declare the entire principal amount of

all such respective Convertible Notes to be repurchased, plus any accrued special interest, if any, to be immediately due and payable.

Capital Resources

Our principal source of financing is our operating cash flow.

We believe that current cash flows generated by our operating activities and existing cash balances should be sufficient for us to fund our operations for the foreseeable future.

Our ability to satisfy our contractual obligations as they arise are discussed in the section titled “Contractual Obligations” below.

Our principal source of financing is our operating

We believe that current cash flows generated by our operating activities and existing cash balances should be sufficient for

us to fund our operations for the foreseeable future.

Our ability to satisfy our contractual obligations

as they arise are discussed in the section titled “Contractual Obligations” below.

Use of Capital

Our business does not require us to maintain a significant cash position.

However, certain of our subsidiaries are required to maintain a minimum level of regulatory capital, which at December 31, 2023 was approximately $29.2 million in the aggregate.

Notwithstanding these regulatory capital requirements, we expect that our main uses of cash will be to fund the ongoing operations of our business.

We also maintain a capital return program which includes a $0.03 per share quarterly cash dividend and authority to purchase our common stock through April 27, 2025, including purchases to offset future equity grants made under our equity plans.

During the year ended December 31, 2023, we repurchased 635,653 shares of our common stock under the repurchase program for an aggregate cost of $3.6 million.

Currently, approximately $96.4 million remains under this program for future purchases.

We also repurchased our Series C Preferred Stock, which was convertible into approximately 13.1 million shares of common stock, from GBH for aggregate cash consideration of approximately $84.4 million.

Our business does not require us to maintain

a significant cash position.

However, certain of our subsidiaries are required to maintain a minimum level of regulatory capital, which

at December 31, 2024 was approximately $39.4 million in the aggregate.

Notwithstanding these regulatory capital requirements, we expect

that our main uses of cash will be to fund the ongoing operations of our business.

We also maintain a capital return program which includes

a $0.03 per share quarterly cash dividend and authority to purchase our common stock through April 27, 2025, including purchases to offset

future equity grants made under our equity plans and purchases made in open market or privately negotiated transactions.

During the year ended December 31, 2024, we repurchased 6,800,301

shares of our common stock under the repurchase program for an aggregate cost of $62.9 million.

Currently, $150.0 million remains under

this program for future purchases.

In addition, on August 13, 2024, we repurchased all of our then-outstanding Series A Preferred Stock,

which was convertible into 14,750,000 shares of our common stock, from ETFS Capital for aggregate cash consideration of approximately

$143.8 million.

See Note 11 to our Consolidated Financial Statements for additional information.

Contractual Obligations

Convertible Notes

We currently have $280.0 million aggregate principal amount of Convertible Notes outstanding, of which $150.0 million and $130.0 million are scheduled to mature on June 15, 2026 and August 15, 2028, respectively, unless earlier converted, repurchased or redeemed.

Conditional conversions or a requirement to repurchase the Convertible Notes upon the occurrence of a fundamental change may accelerate payment.

The Convertible Notes require cash settlement of the principal amount, while settlement of the conversion obligation in excess of the aggregate principal amount may be satisfied in either cash, shares of our common stock or a combination of cash and shares of its common stock.

We currently anticipate refinancing these obligations when due.

See the section titled “Issuance of Convertible Notes” above for additional information.

We currently have $520.8 million in aggregate

principal amount of Convertible Notes outstanding, of which $150.0 million, $25.8 million and $345.0 million are scheduled to mature on

June 15, 2026, August 15, 2028 and August 15, 2029, in respect of the 2026 Notes, the 2028 Notes and the 2029 Notes, respectively, unless

earlier converted, repurchased or redeemed.

Conditional conversions or a requirement to repurchase the Convertible Notes upon the occurrence

of a fundamental change may accelerate payment.

The Convertible Notes require cash settlement

of up to the principal amount, while settlement of the conversion obligation in excess of the aggregate principal amount may be satisfied

in either cash, shares of our common stock or a combination of cash and shares of our common stock.

We may settle and/or refinance these

obligations when due

See the section titled “Issuance of Convertible

Notes” above for additional information.

Deferred Consideration–Gold Payments

May 10, 2023, we entered into and closed on a Sale, Purchase and Assignment Deed to terminate our obligations relating to the

contractual gold payments.

Pursuant to that agreement, we paid consideration totaling $136.9 million, including an aggregate of

$50.0 million in cash and the issuance of 13,087 shares of Series C Preferred Stock (valued at $86.9 million, based

on the closing price of our common stock on May 9, 2023 of $6.64 per share), which was convertible into 13,087,000 shares of

our common stock.

The Series C Preferred Stock was subsequently repurchased on November 20, 2023 as described in

“Payable to GBH” below.

On May 10, 2023, we entered into and closed

on a Sale, Purchase and Assignment Deed to terminate our obligations relating to the contractual gold payments.

Pursuant to that agreement,

we paid consideration totaling $136.9 million, including an aggregate of $50.0 million in cash and the issuance of 13,087 shares of Series

C Preferred Stock (valued at $86.9 million, based on the closing price of our common stock on May 9, 2023 of $6.64 per share), which was

convertible into 13,087,000 shares of our common stock.

The Series C Preferred Stock was subsequently repurchased on November 20, 2023

as described in “Payable to GBH” below.

See Note 12 to our Consolidated Financial Statements for additional information.

Payable to GBH

On November 20, 2023, we repurchased our Series C Preferred Stock from GBH for aggregate cash consideration of approximately $84.4 million.

On November 20, 2023, we repurchased our Series

C Preferred Stock from GBH for aggregate cash consideration of approximately $84.4 million.

Under the terms of the transaction, we paid

GBH $54.8 million to date, with the remainder of the purchase price payable in equal, interest-free installments on the second and third

anniversaries of the closing date.

The implied price per share was $6.02 when considering the interest-free financing element of the transaction.

Operating Leases

future minimum lease payments with respect to our operating lease liabilities were $0.6 million at December 31, 2023.

flows generated by our operating activities and existing cash balances should be sufficient to satisfy the future minimum lease

See Note 13 to our Consolidated Financial Statements for additional information.

Total future minimum lease payments with respect

to our operating lease liabilities were $1.0 million at December 31, 2024.

Cash flows generated by our operating activities and existing

cash balances should be sufficient to satisfy the future minimum lease payments.

See Note 13 to our Consolidated Financial Statements

for additional information.

Off-Balance Sheet Arrangements

We do not have any off -balance sheet financing or other arrangements and have neither created nor are party to any special -purpose or off -balance sheet entities for the purpose of raising capital, incurring debt or operating our business.

We do not have any off-balance sheet financing

or other arrangements and have neither created nor are party to any special-purpose or off-balance sheet entities for the purpose of raising

capital, incurring debt or operating our business.

Critical Accounting Policies and Estimates

Goodwill and Intangible Assets

Goodwill is the excess of the purchase price over the fair values of the identifiable net assets at the acquisition date.

We test goodwill for impairment at least annually and at the time of a triggering event requiring re -evaluation , if one were to occur.

Goodwill is considered impaired when the estimated fair value of the reporting unit that was allocated the goodwill is less than its carrying value.

If the estimated fair value of such reporting unit is less than its carrying value, goodwill impairment is recognized based on that difference, not to exceed the carrying amount of goodwill.

A reporting unit is an operating segment or a component of an operating segment provided that the component constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component.

Goodwill is the excess of the purchase price

over the fair values of the identifiable net assets at the acquisition date.

We test goodwill for impairment at least annually and at

the time of a triggering event requiring re-evaluation, if one were to occur.

Goodwill is considered impaired when the estimated fair

value of the reporting unit that was allocated the goodwill is less than its carrying value.

If the estimated fair value of such reporting

unit is less than its carrying value, goodwill impairment is recognized based on that difference, not to exceed the carrying amount of

A reporting unit is an operating segment or a component of an operating segment provided that the component constitutes a business

for which discrete financial information is available and management regularly reviews the operating results of that component.

Goodwill is allocated to our U.S.

business and European business components.

For impairment testing purposes, these components are aggregated as a single reporting unit as they fall under the same operating segment and have similar economic characteristics.

Goodwill is assessed for impairment annually on November 30 th .

When performing our goodwill impairment test, we consider a qualitative assessment, when appropriate, and the market approach and its market capitalization when determining the fair value of the reporting unit.

The results of our analysis indicated no impairment based upon a quantitative assessment.

Indefinite -lived intangible assets are tested for impairment at least annually and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Indefinite -lived intangible assets are impaired if their estimated fair value is less than their carrying value.

European business components.

For impairment testing purposes, these components are aggregated as a single reporting unit as they fall

under the same operating segment and have similar economic characteristics.

Goodwill is assessed for impairment annually

on November 30 th .

When performing our goodwill impairment test, we consider a qualitative assessment, when appropriate, and

the market approach and its market capitalization when determining the fair value of the reporting unit.

The results of our most recent

analysis indicated no impairment based upon a quantitative assessment.

Indefinite-lived intangible assets are tested

for impairment at least annually and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying

amount of an asset may not be recoverable.

Indefinite-lived intangible assets are impaired if their estimated fair value is less than

their carrying value.

We may rely on a qualitative assessment when performing our intangible asset impairment test.

Otherwise, the impairment evaluation is performed at the lowest level of reasonably identifiable cash flows independent of other assets.

The annual impairment testing date for our intangible assets is November 30 th .

The results of our analysis identified no indicators of impairment to be recognized based upon a quantitative assessment (discounted cash flow analysis) which relied upon significant unobservable inputs including projected revenue growth rates of 3.0% and a weighted average cost of capital of 10.5%.

We account for equity investments that do not have a readily determinable fair value under the measurement alternative prescribed within ASU 2016 -01 , Financial Instruments – Recognition and Measurement of Financial Assets and Financial Liabilities , to the extent such investments are not subject to consolidation or the equity method.

Under the measurement alternative, these financial instruments are carried at cost, less any impairment (assessed quarterly), plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.

In addition, income is recognized when dividends are received only to the extent they are distributed from net accumulated earnings of the investee.

Otherwise, the impairment

evaluation is performed at the lowest level of reasonably identifiable cash flows independent of other assets.

The annual impairment testing

date for our intangible assets is November 30 th .

The results of our most recent analysis identified no indicators of impairment

to be recognized based upon a quantitative assessment (discounted cash flow analysis) which relied upon significant unobservable inputs

including projected revenue growth rates of 3.0% and a weighted average cost of capital of 10.3%.

We account for equity investments that do not

have a readily determinable fair value under the measurement alternative prescribed within Accounting Standards Codification Topic 321,

Investments – Equity Securities , to the extent such investments are not subject to consolidation or the equity method.

the measurement alternative, these financial instruments are carried at cost, less any impairment (assessed quarterly), plus or minus

changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.

addition, income is recognized when dividends are received only to the extent they are distributed from net accumulated earnings of the

Otherwise, such distributions are considered returns of investment and are recorded as a reduction of the cost of the investment.

See Note 7 to our Consolidated Financial Statements for information.

Investments in debt instruments are accounted for at fair value, with changes in fair value reported in other income/(expenses).

Investments in debt instruments are accounted

for at fair value, with changes in fair value reported in other income/(expenses).

Revenue Recognition

We earn substantially all of our revenue in the form of advisory fees from our ETPs and recognize this revenue over time, as the performance obligation is satisfied.

Advisory fees are based on a percentage of the ETPs’ average daily net assets.

Progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which we have a right to invoice.

We earn a significant portion of our revenues in the form

of advisory fees from our ETPs and recognize this revenue over time, as the performance obligation is satisfied.

Advisory fees are based

on a percentage of the ETPs’ average daily net assets.

Progress is measured using the practical expedient under the output method

resulting in the recognition of revenue in the amount for which we have a right to invoice.

Other revenues are earned from swap providers associated

with certain of our European listed ETPs, the nature of which are based on a percentage of the ETPs’ average daily net assets.

also earn transaction-based income on flows associated with certain European listed ETPs.

There is no significant judgment in calculating

amounts due, which are invoiced monthly or quarterly in arrears and are not subject to any potential reversal.

Progress is measured using

the practical expedient under the output method resulting in the recognition of revenue in the amount for which we have a right to invoice.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis