What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-11-06 · 449 added, 571 removed, 336 unchanged (75% 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 “Risk Factors” in our Annual Report on Form 10-K for the

fiscal year ended December 31, 2024 and in subsequent reports filed with or furnished to the SEC.

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” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

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

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

Executive Summary

We are a global financial innovator,

offering a diverse suite of ETPs, models, solutions, as well as digital asset-related products.

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 offer next-generation digital products and services related to tokenized real world assets and

stablecoins, including Digital Funds, as well as our institutional platform, WisdomTree Connect, and blockchain-native digital

wallet, WisdomTree Prime.

As of September 30, 2025, we managed

approximately $137.2 billion in AUM.

Our ETPs span a broad range of strategies including equities, commodities, fixed income,

cryptocurrency, leveraged-and-inverse, currency and alternatives exposures.

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.

We are a global financial innovator, offering

a diverse suite of ETPs, models and solutions, private market investments and digital asset-related products.

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 and transparency and provide an enhanced user experience.

Building on our heritage of innovation, we continue to broaden our capabilities

beyond our core ETP business.

We offer next-generation digital products and services related to tokenized real world assets and stablecoins,

including digital funds, as well as our institutional platform, WisdomTree Connect, and blockchain-native digital wallet, WisdomTree Prime.

We also have expanded into private assets through our acquisition of Ceres Partners, LLC (“Ceres”), a leading U.S.-based alternative

asset manager specializing in farmland investments.

As of March 31, 2026, we managed approximately $152.6 billion in AUM.

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

alternatives, and private assets.

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

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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 not only complements our core competencies, but will diversify our revenue streams and further contribute

As pioneers in tokenization and blockchain technology, we view this as the

next phase in the evolution of 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 financial services not only complements our core competencies but will diversify our revenue streams and further contribute

to our growth.

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on November 7, 2022.

Acquisition of Ceres Partners, LLC (“Ceres”)

On July 31, 2025, we and WisdomTree Farmland

Holdings, Inc., our wholly-owned subsidiary (the “Purchaser”), entered into an Equity Purchase Agreement (the “Ceres

Purchase Agreement”) with Ceres Partners, LLC (“Ceres”), an Indiana limited liability company (“Ceres”),

the members of Ceres (together, the “Sellers”), and an individual acting as the Sellers’ representative, pursuant to

which the Purchaser agreed to acquire from the Sellers all of the issued and outstanding equity interests of Ceres (the “Ceres Acquisition”),

a leading U.S.-based alternative asset manager specializing in farmland investments.

On October 1, 2025, the Purchaser completed

the Ceres acquisition for aggregate consideration consisting of (i) $275.0 million in cash, subject to customary post-closing adjustments,

including adjustments to cash, indebtedness and working capital, and (ii) earnout consideration of up to $225.0 million, payable in 2030,

contingent upon Ceres achieving a compound annual growth rate (“CAGR”) in revenue of 12% to 22% during the earnout measurement

period of January 1, 2025 through December 31, 2029.

For additional information about the Ceres Acquisition, see Note 21 to our Consolidated

Financial Statements.

Acquisition of Atlantic House

On March 13, 2026, we and WisdomTree International Holdings Ltd (the “Buyer”), our wholly-owned subsidiary, entered into a Sale and Purchase Agreement (the “AH Purchase Agreement”) with Atlantic House Holdings Limited, a private limited company incorporated in England and Wales (“Atlantic House”), the shareholders of Atlantic House (the “Sellers”), the EBT Trustee and the Individual Guarantor (each as defined in the AH Purchase Agreement) pursuant to which we agreed to acquire from the Sellers all of the issued and outstanding share capital of Atlantic House (the “AH Acquisition”), subject to the terms and conditions set forth therein.

Atlantic House is a London-based active manager specializing in defined outcome and derivatives-driven investment strategies, with approximately £2.9 billion (approximately $3.9 billion) in assets under management, plus additional revenues from £1.5 billion (approximately $2.0 billion) in assets under advisement across managed models, as well as structuring fees from bespoke investment solutions.

On May 1, 2026, the Buyer completed the AH Acquisition for £150.0 million (approximately $200.0 million) in cash subject to customary post-closing adjustments to cash, indebtedness and working capital.

Assets Under Management

WisdomTree ETPs

We offer ETPs covering equity, commodities

and currency, fixed income, cryptocurrency, leveraged-and-inverse and alternatives.

The chart below sets forth

the asset mix of our ETPs at September 30, 2025, June 30, 2025 and September 30, 2024:

We offer ETPs covering equity, commodities and

currency, fixed income, leveraged-and-inverse, alternatives and cryptocurrency.

The chart below sets forth the asset mix of our ETPs at

March 31, 2026, December 31, 2025 and March 31, 2025:

Market Environment

Global financial markets posted strong gains

in the third quarter, driven by robust artificial intelligence and technology demand, solid corporate earnings, and a well-anticipated

Federal Reserve rate cut.

A weaker U.S.

dollar supported emerging markets.

Commodities experienced record-setting rallies in gold and

silver, while credit and digital assets also performed well.

Amid the strong rally, elevated stock valuations, persistent inflation and

ongoing geopolitical tensions continued to present potential challenges for markets.

During the quarter, the S&P 500, the MSCI

EAFE Index (local currency), the MSCI EMU Index (local currency), the MSCI Japan Index (local currency), the MSCI Emerging Markets Index

dollar) and gold prices increased by 8.1%, 5.4%, 4.3% 10.6%, 10.9% and 16.4%, respectively.

dollar was essentially unchanged

versus the euro and weakened 2.1% and 2.8%, respectively, versus the British pound and Japanese yen during the quarter.

The first quarter of 2026 was characterized

by elevated global volatility and geopolitical tensions, particularly the escalation of conflict in the Middle East.

Although the U.S.

and global economies showed resilience, global equity markets declined modestly, reflecting weakness in certain U.S.

technology stocks

and a shift in investor sentiment as the quarter progressed.

Higher oil prices drove commodities to outperform and contributed to renewed

inflation concerns, leading to a repricing of interest rate expectations.

Government bonds experienced a sell-off as yields rose in response

to these inflationary pressures.

During the quarter, the MSCI EAFE Index (local

currency), MSCI Japan Index (local currency) and gold prices increased by 0.3%, 3.0% and 5.5%, respectively, while the S&P 500, MSCI

EMU Index (local currency) and MSCI Emerging Markets Index (U.S.

dollar) decreased by 4.3%, 2.4% and 0.1%, respectively.

weakened 2.4%, 2.0% and 2.2% versus the euro, British pound and Japanese yen, respectively, during the quarter.

Listed ETF Industry Flows

listed ETF industry net flows were $405.2

billion for the three months ended September 30, 2025.

Fixed income and U.S.

equity gathered the majority of those flows.

billion for the three months ended March 31, 2026.

equity and fixed income gathered the majority of those flows.

European Listed ETP Industry Flows

European listed ETP industry net flows were

$77.6 billion for the three months ended September 30, 2025.

$93.6 billion for the three months ended March 31, 2026.

Equity and fixed income gathered the majority of those flows.

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listed exchange traded funds,

listed ETFs, increased from $85.2 billion at June 30, 2025 to $88.3 billion at September 30, 2025 due to market appreciation,

partly offset by net outflows.

listed ETFs, increased from $88.5 billion at December 31, 2025 to $90.9 billion at March 31, 2026 due to net inflows, partly offset

by market depreciation.

European Listed ETPs

The AUM of our European listed (including internationally

cross-listed) ETPs, or European listed ETPs, increased from $40.5 billion at June 30, 2025 to $48.3 billion at September 30, 2025 due

to market appreciation and net inflows.

cross-listed) ETPs, or European listed ETPs, increased from $53.3 billion at December 31, 2025 to $58.8 billion at March 31, 2026 due

to net inflows and market appreciation.

Digital Assets

The AUM of our digital assets products increased

from $0.4 billion at June 30, 2025 to $0.6 billion at September 30, 2025 due to net inflows.

Substantially all current quarter inflows

were into the WisdomTree Government Money Market Digital Fund.

The AUM of our digital assets products increased from $0.8 billion at December

31, 2025 to $0.9 billion at March 31, 2026 due to net inflows.

Substantially all Q1 2026 inflows were into the WisdomTree Treasury Money

Market Digital Fund.

Private Assets

Through our acquisition of Ceres on October

1, 2025 (the “Ceres Acquisition”), we acquired $1.8 billion of private assets AUM primarily held within an open-ended investment

fund, Ceres Farms, LLC (“Ceres Farms”).

This AUM increased by approximately $0.1 billion to $2.0 billion at March 31, 2026,

due to $75.0 million of inflows and market appreciation.

Consolidated Operating Results

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and net (loss)/income for the most recent five quarters.

● Revenues – Total revenues increased 11.0% from the three months ended September 30, 2024 to $125.6 million in the comparable

period in 2025 due to higher average AUM and higher other revenues attributable to our European listed ETPs, partly offset by a lower

average advisory fee.

Other income for the three months ended September 30, 2024 also included $3.7 million of other revenues related

to legal and other related expenses incurred in connection with a settlement with the SEC regarding certain statements about the ESG screening

process for three ETFs advised by WisdomTree Asset Management, Inc.

(the “SEC ESG Settlement”) that were covered by insurance.

● Expenses – Total operating expenses increased 10.5% from the three months ended September 30, 2024 to $80.0 million in

the comparable period in 2025 primarily due to higher compensation expense, acquisition-related costs, fund management and administration

expenses and third-party distribution fees.

These increases were partly offset by lower professional fees, as the third quarter of 2024

included $3.7 million of legal and other related expenses incurred in connection with the SEC ESG Settlement that were covered by insurance.

● Other Income/(Expenses) – Other income/(expenses) includes interest income and interest expense, losses on extinguishment

of convertible notes and other gains and losses.

· Revenues – Total revenues increased 47.5% from the three months ended March 31, 2025 to $159.5 million in the comparable

period in 2026, driven by higher average AUM, a higher average advisory fee, revenues arising from the Ceres Acquisition and increased

other revenues from our European listed ETPs.

· Expenses – Total operating expenses increased 35.4% from the three months ended March 31, 2025 to $100.1 million in the

comparable period in 2026 primarily due to higher incentive compensation and headcount, as well as increases in fund management and administration

expenses, acquisition-related costs, third-party distribution fees and amortization of intangible assets.

· Other Income/(Expenses) – Other income/(expenses) includes interest income and interest expense, loss on extinguishment

of convertible notes, impairments and other losses.

Further information is provided herein.

● Net income – We reported net income/(loss) of $19.7 million and ($4.5) million during the three months ended September

30, 2025 and 2024, respectively.

· Net (loss)/income – We reported net (loss)/income of ($23.1) million and $24.6 million during

the three months ended March 31, 2026 and 2025, respectively.

Guidance Update for the Year Ending December 31, 2026

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% (unchanged from our guidance provided last quarter) and takes

into consideration the recently completed Ceres Acquisition, 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, revenues 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.

Our compensation to revenue ratio for the year ending December 31, 2026

is currently estimated to range from 26% to 28% (unchanged from our guidance provided last quarter) and takes into consideration the AH

Acquisition, planned hires as well as year-end compensation adjustments and the annualization of hires made during 2025.

The range also

considers variability in incentive compensation with drivers including the magnitude of our flows, revenues 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.

During the nine months ended September 30,

2025, our discretionary spending was $51.6 million, exclusive of acquisition-related costs incurred to date.

We currently estimate our

discretionary spending (exclusive of acquisition-related costs) for the year ending December 31, 2025 to range from $68.0 million to $72.0

million (unchanged from our guidance range provided last quarter).

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.

During the three months ended March 31, 2026, our discretionary spending was $18.6 million.

We currently estimate our discretionary spending for the year ending December 31, 2026 to range from $83.0 million to $89.0 million (previously

$80.0 to $86.0 million) taking into consideration the AH Acquisition.

Not included in the guidance above is intangible

amortization arising from the Ceres Acquisition of approximately $5.7 million, of which $1.4 million was recognized during the three months

ended March 31, 2026.

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.

Our gross margin was 81.4% during the nine months ended September 30, 2025.

For the year ending December 31, 2025, we currently estimate

that our gross margin percentage to be approximately 82.0% (previously 81.0% to 82.0%) taking into consideration the recently completed

Ceres Acquisition.

Our gross margin

was 84.4% during the three months ended March 31, 2026.

For the year ending December 31, 2026, we currently estimate that our gross margin

percentage will be 83.0% to 84.0% (previously 82.0% to 83.0%) an increase of one percentage point reflecting current AUM levels and the

AH Acquisition, including Atlantic House product launches in both Europe and the U.S.

over the course of the year.

Third-Party Distribution Fees

We currently estimate third-party distribution

expense for the year ending December 31, 2025 to be approximately $14.0 million to $15.0 million (unchanged from our guidance range provided

last quarter), which is dependent upon the AUM growth on our respective platforms.

We currently estimate third-party distribution expense to be approximately

$20.0 million to $24.0 million for the year ending December 31, 2026 (previously $17.0 to $19.0 million), driven by higher AUM and elevated

trading activity, primarily across our European platforms.

Interest Expense

We currently estimate our interest expense for

the year ending December 31, 2025 to be $31.0 million (previously $22.0 million), taking into consideration the $475.0 million in aggregate

principal amount of 4.625% Convertible Senior Notes due 2030 (the “2030 Notes”) issued in August 2025 to facilitate the Ceres

This guidance is also inclusive of approximately $2.0 million of interest costs we are required to impute under U.S.

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

Stock”) we repurchased in November 2023 from Gold Bullion Holdings (Jersey) Limited (“GBH”), a subsidiary of the World

Gold Council.

We currently estimate our interest expense for the year ending December

31, 2026 to be $54.0 million (previously $41.0 million) taking into consideration our current capital structure (see Note 9 to our consolidated

financial statements for additional information).

This guidance is inclusive of approximately $0.9 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 approximately $10.0 million to $11.0 million (previously $8.0 million), as we temporarily invested

the proceeds received from the issuance of the 2030 Notes prior to completing the Ceres Acquisition.

the year ending December 31, 2026 to be $10.0 million (previously $8.0 million), reflecting the forecasted level of our interest-earning

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, 2025 (unchanged from the guidance

range provided last quarter), taking into consideration the current distribution of profits between the U.S.

We currently estimate that our consolidated normalized effective tax rate

will be approximately 24.0% to 25.0% for the year ending December 31, 2026 (previously 24.0%), taking into consideration the AH Acquisition.

This estimated rate may change and is dependent

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Weighted Average Diluted Shares

Our weighted average diluted shares for the

three months ended September 30, 2025 were 150.7 million.

We currently estimate our weighted average diluted shares to be between

million and 149.0 million for the three months ending December 31, 2025.

This guidance reflects the full-quarter impact of 6.8 million

shares of common stock repurchased in August 2025 in connection with the issuance of the 2030 Notes.

It also includes approximately 5.0

million incremental shares associated with our Convertible Notes, assuming a stock price of approximately $13.00 to $14.00 per share.

While our Convertible Notes require principal to be paid in cash, our diluted shares are increased for any incremental shares associated

with an assumed conversion 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, $11.82 per share for the

3.25% Convertible Senior Notes due 2029 and $19.15 per share for the 2030 Notes.

Increases in our stock price will increase the incremental

shares impacting our diluted share count, while decreases in our stock price will reduce the overall impact.

155.0 million and 158.0 million for the three months ending June 30, 2026, reflecting the full impact of the 11.0 million shares issued

in connection with the extinguishment of $75.0 million in aggregate principal amount of 3.25% convertible senior notes due 2026 (the “2026

Notes”) and $275.0 million in aggregate principal amount of 3.25% convertible senior notes due 2029 (the “2029 Notes”).

Weighted average diluted shares are anticipated to decline to approximately 154.0 million in the second half of the year, following the

retirement of our remaining outstanding 2026 Notes and 2029 Notes, which we anticipate settling for cash.

Key Operating Statistics

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Three Months Ended

Nine Months Ended

September 30,

GLOBAL ETPs (in millions )

GLOBAL PRODUCTS ($ in millions )

Beginning of period assets

Digital Assets—Jan.

Assets acquired—Ceres Acquisition

Inflows/(outflows)

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Average advisory fee during the period

Number of products-end of period

Number of products—end of the period

ETPs AND TOKENIZED PRODUCTS

LISTED ETFs ($ in millions )

Beginning of period assets

(Outflows)/inflows

Market appreciation

Inflows/(outflows)

Market (depreciation)/appreciation

End of period assets

Average assets during the period

Number of ETFs-end of period

Number of ETFs—end of the period

EUROPEAN LISTED ETPs ($ in millions )

Beginning of period assets

Inflows/(outflows)

Market appreciation

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Average assets during the period

Number of ETPs-end of period

Number of ETPs—end of the period

DIGITAL ASSETS ($ in millions )

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Digital Assets—Jan.

Market depreciation

End of period assets

Average assets during the period

Number of products—end of the period

PRIVATE ASSETS ($ in millions )

Beginning of period assets

Assets acquired—Ceres Acquisition

Market appreciation

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Average assets during the period

Number of products-end of period

Number of products—end of the period

ETPs AND TOKENIZED PRODUCT CATEGORIES ($ in millions )

Beginning of period assets

Digital Assets—Jan.

Market appreciation

Market (depreciation)/appreciation

End of period assets

Average assets during the period

Three Months Ended

Commodity & Currency

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Beginning of period assets

Inflows/(outflows)

Market appreciation

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Average assets during the period

Three Months Ended

Nine Months Ended

September 30,

Beginning of period assets

Digital Assets—Jan.

(Outflows)/inflows

Market appreciation

Inflows/(outflows)

Market appreciation/(depreciation)

End of period assets

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Beginning of period assets

(Outflows)/inflows

Market appreciation

Market (depreciation)/appreciation

End of period assets

Average assets during the period

Cryptocurrency

Leveraged & Inverse

Beginning of period assets

Digital Assets—Jan.

Market appreciation

Inflows/(outflows)

Market (depreciation)/appreciation

End of period assets

Average assets during the period

Leveraged & Inverse

Cryptocurrency

Beginning of period assets

(Outflows)/inflows

Market appreciation

Digital Assets—Jan.

Inflows/(outflows)

Market depreciation

End of period assets

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Beginning of period assets

Market appreciation

Market (depreciation)/appreciation

End of period assets

Average assets during the period

Previously issued statistics may be restated

due to fund closures and trade adjustments.

_____________________________

(1) Includes 17 digital assets products, which were launched prior to January 1, 2025.

Three Months Ended September 30, 2025 Compared to Three Months

Ended September 30, 2024

Previously issued statistics may be restated

due to fund closures and trade adjustments.

Three Months Ended March 31, 2026 Compared to Three Months Ended

March 31, 2025

Selected Operating and Financial Information

Three Months Ended

September 30,

AUM (in millions)

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Advisory fees

Management fees

Performance fees

Other revenues

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Advisory fees

Advisory fee revenues increased 12.6% from $101.7

million during the three months ended September 30, 2024 to $114.5 million in the comparable period in 2025 due to higher average AUM,

partly offset by a lower average advisory fee.

Our average advisory fee was 0.37% during the three months ended September 30, 2024 and

0.35% during the three months ended September 30, 2025.

Advisory fee revenues increased 35.5% from $99.5 million during the three

months ended March 31, 2025 to $134.9 million during the comparable period in 2026 due to higher average AUM and a higher average advisory

Our average advisory fee was 0.35% during the three months ended March 31, 2025 and 0.36% during the comparable period in 2026.

Management fees

Management fees were $5.2 million during the

three months ended March 31, 2026 as a result of the Ceres Acquisition, which was completed in October 2025.

We earn management fees in

exchange for providing investment advisory and other management services to Ceres Farms.

Performance fees

Performance fees were $3.0 million during the

three months ended March 31, 2026 as a result of the Ceres Acquisition, which was completed in October 2025.

We earn performance fees

based on a specified percentage of Ceres Farms’ net profits, subject to contractual fee waivers, high-water marks and loss recovery

requirements.

Other revenues

Other revenues decreased by $0.4 million during

the three months ended September 30, 2025.

The three months ended September 30, 2024 included $3.7 million related to legal and other

related expenses incurred in connection with the SEC ESG Settlement that were covered by insurance.

This item was largely offset by higher

other revenues attributable to our European listed products.

Other revenues increased 92.2% from $8.5 million during the three months

ended March 31, 2025 to $16.4 million during the comparable period in 2026 due to higher other revenues attributable to our European listed

Operating Expenses

Three Months Ended

September 30,

(in thousands)

Compensation and benefits

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Total operating expenses

Three Months Ended

September 30,

As a Percent of Revenues:

Percent of Revenues:

Compensation and benefits

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Compensation and benefits expense increased

14.9% from $29.4 million during the three months ended September 30, 2024 to $33.8 million in the comparable period in 2025 due to higher

incentive compensation and increased headcount.

Headcount was 314 and 338 at September 30, 2024 and 2025, respectively.

40.6% from $33.8 million during the three months ended March 31, 2025 to $47.5 million in the comparable period in 2026 due to higher

stock-based compensation expense and increased headcount.

Headcount was 315 and 357 at March 31, 2025 and 2026, respectively.

Fund management and administration

Fund management and administration expense increased

6.4% from $21.0 million during the three months ended September 30, 2024 to $22.4 million in the comparable period in 2025 primarily due

20.1% from $20.7 million during the three months ended March 31, 2025 to $24.9 million in the comparable period in 2026 primarily due

to higher average AUM.

We had 78 U.S.

listed ETFs and 274 European listed ETPs at September 30, 2024 compared to 84 U.S.

295 European listed ETPs and 18 digital assets products at September 30, 2025.

Marketing and advertising

Marketing and advertising expense was essentially

unchanged from the three months ended September 30, 2024.

Sales and business development

Sales and business development expense increased

13.8% from $3.5 million during the three months ended September 30, 2024 to $3.9 million in the comparable period in 2025 primarily due

to increases in travel and events spending.

Professional fees

Professional fees expense decreased 44.5% from

$6.3 million during the three months ended September 30, 2024 to $3.5 million in the comparable period in 2025 as the prior period included

expenses incurred in response to an activist campaign and in connection with the SEC ESG Settlement.

Occupancy, communications and equipment

Occupancy, communications and equipment expense

was essentially unchanged from the three months ended September 30, 2024.

Depreciation and amortization

Depreciation and amortization expense was essentially

unchanged from the three months ended September 30, 2024.

Third-party distribution fees

Third-party distribution fees increased 33.3%

from $3.0 million during the three months ended September 30, 2024 to $4.0 million in the comparable period in 2025 due to our strong

organic growth and AUM expansion across our distribution platforms.

Acquisition-related Costs

During the three months ended September 30,

2025, we recorded $2.5 million of acquisition-related costs incurred in connection with the Ceres Acquisition.

Other expenses increased 21.0% from $2.5 million

during the three months ended September 30, 2024 to $3.0 million in the comparable period in 2025 primarily due to higher dues, subscriptions

and other miscellaneous expenses.

Other Income/(Expenses)

Three Months Ended

September 30,

(in thousands)

Interest expense

Interest income

Loss on extinguishment of convertible notes

Other gains and losses, net

Total other expenses, net

September 30,

a Percent of Revenues:

Interest expense

Interest income

Loss on extinguishment of convertible notes

Other gains and losses, net

Total other expenses, net

Interest expense

Interest expense increased 68.4% from $5.0 million

during the three months ended September 30, 2024 to $8.5 million in the comparable period in 2025 due to a higher level of debt outstanding

inclusive of the 2030 Notes issued in August of 2025 to facilitate the Ceres Acquisition, partly offset by a lower average interest rate.

Our effective interest rate during the three months ended September 30, 2024 and 2025 was 4.4% and 4.1%, respectively.

Interest income

Interest income increased 123.7% from $1.8 million

during the three months ended September 30, 2024 to $4.0 million in the comparable period in 2025 due to

a higher level of interest-earning assets, including from temporarily investing proceeds received from the issuance of the 2030

Notes prior to completing the Ceres Acquisition.

Loss on Extinguishment of Convertible Notes

During the three months ended September 30,

2025, we recognized a loss on extinguishment of convertible notes of $13.0 million arising from the repurchase of $24.0 million in aggregate

principal amount of our 2028 Notes.

Other gains and losses, net

Other gains and losses, net were ($3.1)

million and $1.3 million during the three months ended September 30, 2024 and 2025, respectively.

The three months ended September

30, 2025 includes net gains of $1.1 million on our financial instruments owned, and net losses of $1.0 million on our investments.

Gains and losses also generally arise from the sale of gold and cryptocurrency earned from management fees paid by our

physically-backed ETPs, foreign exchange fluctuations and other miscellaneous items.

Our effective income tax rate during the three

months ended September 30, 2025 was 33.3%, resulting in income tax expense of $9.8 million.

The effective tax rate differs from the federal

statutory rate of 21.0% primarily due to a non-deductible loss on extinguishment of the 2028 Notes and non-deductible executive compensation.

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

Our effective income tax rate during the three

months ended September 30, 2024 was 216.0%, resulting in income tax expense of $8.4 million.

The effective tax rate differs from the federal

statutory rate of 21.0% primarily due to a non-deductible loss on extinguishment of the 2028 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.

Nine Months Ended September 30, 2025 Compared to Nine Months

Ended September 30, 2024

Selected Operating and Financial Information

Nine Months Ended

September 30,

AUM (in millions)

Operating Revenues (in thousands)

Advisory fees

Other revenues

Total revenues

Operating Revenues

Advisory fees

Advisory fee revenues increased 8.2% from $293.1

million during the nine months ended September 30, 2024 to $317.3 million in the comparable period in 2025 primarily due to higher average

AUM, partly offset by a lower average advisory fee.

Our average advisory fee was 0.37% during the nine months ended September 30, 2024

and 0.35% during the comparable period in 2025.

Other revenues

Other revenues increased 21.3% from $23.9 million

during the nine months ended September 30, 2024 to $29.0 million in the comparable period in 2025 due to higher other revenues attributable

to our European listed products.

This was partly offset by $4.1 million of non-recurring legal and other related expenses incurred in

connection with the SEC ESG Settlement during the nine months ended September 30, 2024 that were covered by insurance.

Operating Expenses

Nine Months Ended

September 30,

(in thousands)

Compensation and benefits

Fund management and administration

Marketing and advertising

Sales and business development

Professional fees

Occupancy, communications and equipment

Depreciation and amortization

Third-party distribution fees

Acquisition-related costs

Total operating expenses

As a Percent of Revenues:

Nine Months Ended

September 30,

Compensation and benefits

Fund management and administration

Marketing and advertising

Sales and business development

Professional fees

Occupancy, communications and equipment

Depreciation and amortization

Third-party distribution fees

Acquisition-related costs

Total operating expenses

Compensation and benefits

Compensation and benefits expense increased

10.0% from $91.2 million during the nine months ended September 30, 2024 to $100.4 million in the comparable period in 2025 due to higher

incentive compensation and increased headcount.

Fund management and administration

Fund management and administration expense increased

5.3% from $61.1 million during the nine months ended September 30, 2024 to $64.3 million in the comparable period in 2025 primarily due

to higher average AUM.

listed ETFs, 280 European listed ETPs and 17 tokenized products at March 31, 2025 compared to 90

listed ETFs, 306 European listed ETPs, 19 tokenized products and one private assets product at March 31, 2026.

Marketing and advertising

Marketing and advertising expense was essentially

unchanged from the nine months ended September 30, 2024.

Marketing and advertising expense increased

12.0% from $4.8 million during the three months ended March 31, 2025 to $5.4 million in the comparable period in 2026 primarily due to

higher spend related to our U.S.

listed ETFs and digital assets.

Sales and business development

Sales and business development expense increased

14.9% from $10.7 million during the nine months ended September 30, 2024 to $12.3 million in the comparable period in 2025 primarily due

to increases in travel and events spending.

Sales and business development expense was essentially

unchanged from the three months ended March 31, 2025.

Professional fees

Professional fees decreased 42.8% from $16.5 million

during the nine months ended September 30, 2024 to $9.5 million in the comparable period in 2025 primarily as the prior period included

expenses incurred in response to an activist campaign and in connection with the SEC ESG Settlement.

Professional fees expense increased 18.9% from

$2.8 million during the three months ended March 31, 2025 to $3.3 million in the comparable period in 2026 due to higher consulting fees

and digital assets related expenses.

Occupancy, communications and equipment

Occupancy, communications and equipment expense

increased 18.4% from $3.9 million during the nine months ended September 30, 2024 to $4.6 million in the comparable period in 2025 primarily

due to higher equipment and communication expenses driven by increased headcount.

increased 30.6% from $1.5 million during the three months ended March 31, 2025 to $1.9 million in the comparable period in 2026 primarily

due to increased headcount.

Depreciation and amortization

Depreciation and amortization expense increased

39.0% from $1.2 million during the nine months ended September 30, 2024 to $1.7 million in the comparable period in 2025 primarily due

to higher amortization of internally-developed software.

288.1% from $0.5 million during the three months ended March 31, 2025 to $2.1 million in the comparable period in 2026 primarily due to

higher amortization of intangible assets arising from the Ceres Acquisition.

Third-party distribution fees

Third-party distribution fees increased 40.1%

from $8.0 million during the nine months ended September 30, 2024 to $11.2 million in the comparable period in 2025 due to our strong

organic growth and AUM expansion across our distribution platforms.

Third-party distribution fees expense increased

86.2% from $3.1 million during the three months ended March 31, 2025 to $5.8 million in the comparable period in 2026 due to growth in

AUM and elevated trading activity across our various platforms.

Acquisition-related costs

During the nine months ended September 30, 2025,

we recorded $4.4 million of acquisition-related costs incurred in connection with the Ceres Acquisition.

During the three months ended March 31, 2026, we recorded $1.9 million of

acquisition-related costs related to the AH Acquisition.

Other expenses increased 20.2% from $2.6 million

during the nine months ended September 30, 2024 to $8.5 million in the comparable period in 2025 primarily due to higher dues, subscriptions

and other miscellaneous expenses.

during the three months ended March 31, 2025 to $3.1 million in the comparable period in 2026 due to conferences, travel and office related

Other Income/(Expenses)

Nine Months Ended

September 30,

(in thousands)

Interest expense

Interest income

Remeasurement of contingent consideration

Loss on extinguishment of convertible notes

Other gains and losses, net

Other losses, net

Total other expenses, net

Nine Months Ended

September 30,

As a Percent of Revenues:

Percent of Revenues:

Interest expense

Interest income

Remeasurement of contingent consideration

Loss on extinguishment of convertible notes

Other gains and losses, net

Other losses, net

Total other expenses, net

1 unchanged sentence

Interest expense increased 102.6% from $5.4

million during the nine months ended September 30, 2024 to $19.4 million in the comparable period in 2025 due to a higher level of debt

outstanding, inclusive of the 2030 Notes issued in August 2025 to facilitate the Ceres Acquisition, partly offset by a lower average interest

Our effective interest rate during the nine months ended September 30, 2024 and 2025 was 4.8% and 4.0%, respectively.

million during the three months ended March 31, 2025 to $11.0 million in the comparable period in 2026 due to a higher level of debt outstanding.

Our effective interest rate during the three months ended March 31, 2025 and 2026 was 3.9% and 4.4%, respectively.

Interest income

Interest income increased 36.6% from $1.9 million

during the nine months ended September 30, 2024 to $8.0 million in the comparable period in 2025 due to a higher level of interest-earning

assets, including from temporarily investing proceeds received from the issuance of the 2030 Notes prior to completing the Ceres Acquisition.

Other gains and losses, net

Other gains and losses, net were ($1.8)

million and $1.7 million during the nine months ended September 30, 2024 and 2025, respectively.

The nine months ended September 30,

2025 includes net gains on our financial instruments owned of $1.9 million and $2.4 million of foreign currency remeasurement losses

dollars held by foreign subsidiaries.

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

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

Our effective income tax rate for the nine months

ended September 30, 2025 was 24.7%, resulting in an income tax expense of $22.6 million.

Our tax rate differs from the federal statutory

rate of 21.0% primarily due to a non-deductible loss on extinguishment of the 2028 Notes and non-deductible executive compensation.

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

Our effective income tax rate for the nine months

ended September 30, 2024 was 35.6%, resulting in an income tax expense of $21.8 million.

Our tax rate differs from the federal statutory

rate of 21.0% primarily due to a non-deductible loss on extinguishment of the 2028 Notes, a non-deductible civil money penalty of $4.0

million and non-deductible executive compensation.

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

during the three months ended March 31, 2025 to $2.6 million in the comparable period in 2026 due to a

higher level of interest earning assets.

Remeasurement of contingent consideration

Contingent consideration related to the Ceres Acquisition increased from

$11.8 million on December 31, 2025 to $14.4 million at March 31, 2026, resulting in a $2.6 million loss on remeasurement recognized during

the three months ended March 31, 2026.

See Note 10 to our Consolidated Financial Statements for additional information.

Loss on extinguishment of convertible notes

During the three months ended March 31, 2026, we recognized a $62.3 million

loss related to transactions involving our convertible notes, comprised of a loss on extinguishment of $16.9 million associated with the

repurchase of $75.0 million in aggregate principal amount of our 2026 Notes and a $45.4 million inducement expense related to the repurchase

of $275.0 million in aggregate principal amount of our 2029 Notes.

Other losses, net

Other losses, net were ($0.3) million and ($0.6)

million during the three months ended March 31, 2025 and 2026, respectively.

The three months ended March 31, 2026 includes net losses

of $0.9 million on our financial instruments and net losses of $0.5 million on our investments.

Gains and losses also generally arise

from the sale of gold earned from management fees paid by our physically-backed gold ETPs, foreign exchange fluctuations and other miscellaneous

Our effective income tax rate for the first quarter of 2026 was negative

58.6%, resulting in income tax expense of $8.5 million.

Despite a pre-tax loss for the quarter, we recorded income tax expense primarily

due to certain non-deductible amounts associated with the extinguishment of convertible notes, which caused our effective tax rate to

differ from the U.S.

federal statutory rate of 21.0%.

Other items impacting our effective tax rate included non-deductible executive compensation,

partly offset by state and local taxes and tax windfalls associated with the vesting of stock-based compensation awards.

Our effective income tax rate during the three months ended March 31, 2025

was 18.9%, resulting in income tax expense of $5.7 million.

The effective tax rate differs from the federal statutory rate of 21.0% primarily

due to tax windfalls associated with the vesting of stock-based compensation awards and a lower tax rate on foreign earnings.

were partly offset by state and local income taxes and non-deductible executive compensation.

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

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 they 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.

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.

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.

measurements do not have any standardized meaning, do not replace nor are they 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 the following:

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dollars remeasure these balances into their functional currencies and recognize the gains and losses.

Beginning in the second

quarter of 2025, we began excluding material remeasurement effects from our non-GAAP financial measures, as they introduce earnings volatility,

are not core to our operations and arise from balances denominated in our reporting currency.

We exclude remeasurement

effects from our non-GAAP financial measures, as they introduce earnings volatility, are not core to our operations and arise from balances

denominated in our reporting currency.

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

6 unchanged sentences

they introduce earnings volatility 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.

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 annual installments on the first, second and third anniversaries of the closing date, with no requirement to pay interest.

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.

· Amortization of intangible assets and remeasurement of contingent consideration

arising from the Ceres Acquisition:

On October 1, 2025, we completed the Ceres Acquisition for aggregate consideration consisting of (i)

$275 million in cash payable at closing, subject to customary post-closing adjustments and (ii) contingent consideration of up to $225

million, payable in 2030, contingent upon Ceres achieving a compound annual growth rate (“CAGR”) in revenues of 12% to 22%

during the measurement period of January 1, 2025 through December 31, 2029.

GAAP requires contingent consideration to be re-measured each

reporting period with changes in fair value reported in net income.

In addition, a portion of the consideration totaling $143.5 million

was allocated to intangible assets, which is amortized over 25 years.

We exclude changes in fair value of contingent consideration and

amortization of intangible assets arising from the Ceres Acquisition when calculating our non-GAAP financial measurements as these items

are not core to our operating business.

· Other items:

Loss on extinguishment of convertible notes, acquisition-related costs, 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 and expenses

incurred in response to an activist campaign are excluded when calculating our non-GAAP financial measurements.

We also offset revenues

and related expenses pertaining to legal and other related expenses covered by insurance as the gross presentation required under U.S.

GAAP serves to overstate our revenues and expenses in the ordinary course of business.

Three Months Ended

Nine Months Ended

Adjusted Net Income and Diluted Earnings per Share:

September 30,

Net income/(loss), as reported

Loss on extinguishment of convertible notes, net of income taxes

Losses related to convertible notes transactions, changes in deferred tax

asset valuation allowance, acquisition-related costs, imputed interest on our payable to Gold Bullion Holdings (Jersey) Limited (“GBH”)

and gains and losses recognized on our investments are excluded when calculating our non-GAAP financial measurements.

Net Income and Diluted Earnings per Share:

Net (loss)/income, as reported

Losses related to convertible notes transactions, net of income

Tax windfalls upon vesting of stock-based compensation awards

Increase in fair value of contingent consideration, net of income taxes

Acquisition-related costs, net of income taxes

Gains on financial instruments owned, net of income taxes

Amortization of intangible assets arising from the Ceres Acquisition, net of income taxes

Losses on financial instruments owned, net of income taxes

(Deduct)/add back:

Foreign currency remeasurement (gains)/losses on U.S.

dollar balances, net of income taxes

Add back/(deduct):

1 unchanged sentence

Imputed interest on payable to GBH, net of income taxes

Tax windfalls upon vesting of stock-based compensation awards

Decrease in deferred tax asset valuation allowance on financial instruments owned and investments

Civil money penalty in connection with the SEC ESG Settlement

Foreign currency remeasurement losses on U.S.

dollar balances, net of income taxes

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

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

Adjusted net income

2 unchanged sentences

Adjusted net income available to common stockholders

Weighted average diluted shares, excluding participating securities (in thousands) (See Note 16 to our Consolidated Financial Statements)

Weighted average diluted shares, excluding participating securities (in

thousands) (See Note 18 to our Consolidated Financial Statements)

Adjusted earnings per share — diluted

2 unchanged sentences

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

September 30,

Balance Sheet Data (in thousands):

Sheet Data (in thousands):

Cash, cash equivalents and restricted cash

2 unchanged sentences

Liquid assets

Cash consideration paid to acquire Ceres

Consideration payable – AH Acquisition

Total current liabilities

2 unchanged sentences

Available liquidity

Nine Months Ended September 30,

Cash Flow Data (in thousands):

Months Ended March 31,

Flow Data (in thousands):

Operating cash flows

2 unchanged sentences

Foreign exchange rate effect

Increase in cash, cash equivalents and restricted cash (1)

_____________________________

(1) On October 1, 2025, we paid $271.7 million to acquire Ceres.

Increase/(decrease) in cash, cash equivalents and restricted cash

We consider our available liquidity to be our

8 unchanged sentences

of payments owed to vendors and third parties in the normal course of business and accrued incentive compensation for employees.

Cash, cash equivalents and restricted cash increased

by $374.7 million during the nine months ended September 30, 2025 due to $475.0 million of proceeds from the issuance of the 2030 Notes,

$93.3 million of cash provided by operating activities, $8.9 million of proceeds from the sale of financial instruments owned, at fair

value and $6.3 million increase in cash flow due to changes in foreign exchange rates.

These increases were partly offset by $102.7 million

used to repurchase our common stock, $36.7 million to repurchase a portion of the 2028 Notes, $25.3 million used to purchase financial

instruments owned, at fair value, $17.6 million used to purchase investments, $13.2 million used to pay dividends, $11.1 million used

to pay convertible notes issuance costs, $2.0 million used to pay for software development and $0.2 million from other activities.

Cash, cash equivalents and restricted cash increased

by $47.2 million during the nine months ended September 30, 2024 due to $345.0 million of proceeds from the issuance of the 2029 Notes,

$78.9 million of cash provided by operating activities, $42.3 million of proceeds from the sale of financial instruments owned, at fair

value and $2.1 million provided by other activities.

These increases were partly offset by $143.8 million used to repurchase our Series

A Non-Voting Convertible Preferred Stock, $132.7 million to repurchase a portion of the 2028 Notes, $62.9 million used to repurchase our

common stock, $57.9 million used to purchase financial instruments owned, at fair value, $14.8 million used to pay dividends, $7.7 million

used to pay convertible notes issuance costs and $1.8 million used to pay for software development.

Cash, cash equivalents and restricted cash increased by $313.8 million during

the three months ended March 31, 2026 due to $603.75 million of proceeds from the issuance of the 2031 Notes, $45.6 million of proceeds

from the sale of financial instruments owned, at fair value, and $18.0 million provided from operating activities.

These increases were

partly offset by $302.7 million used to repurchase a portion of the 2026 Notes and the 2029 Notes, $25.0 million used to repurchase our

common stock, $12.6 million used to pay convertible notes issuance costs, $6.0 million used to purchase financial instruments owned, at

fair value, $4.7 million used to pay dividends, $1.0 million used to pay for software development and $1.6 million from other activities.

Cash, cash equivalents and restricted cash decreased

by $10.8 million during the three months ended March 31, 2025 due to $12.7 million used to repurchase our common stock, $4.6 million used

to pay dividends, $1.9 million of excise tax paid on common stock repurchased and $0.6 million used to pay for software development.

decreases were partly offset by $6.4 million provided from operating activities, $0.4 million of proceeds from the sale of financial instruments

owned, at fair value and $2.2 million from other activities.

Convertible Notes

We have the following convertible notes outstanding

as of September 30, 2025:

● $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”);

as of March 31, 2026:

· $75.0 million in aggregate principal amount of the 2026 Notes;

· $70.0 million in aggregate principal amount of the 2029 Notes;

· $475.0 million in aggregate principal amount of 4.625% Convertible Senior Notes due 2030 (the “2030 Notes”);

· $603.75 million in aggregate principal amount of 4.50% Convertible Senior Notes due 2031 (the “2031 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 2030

Notes, we repurchased $24.0 million in aggregate principal amount of the 2028 Notes.

As a result of this repurchase, we recognized a loss

on extinguishment of $13.0 million during the three and nine months ended September 30, 2025.

As of September 30, 2025, we had an aggregate

principal amount of $971.8 million outstanding of the 2026 Notes, the 2028 Notes, the 2029 Notes and the 2030 Notes (collectively, the

“Convertible Notes”).

Each class of notes was 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

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

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

connection with the issuance of the 2031 Notes, we exchanged $75.0 million in aggregate principal amount of the 2026 Notes for 6,807,374 shares of common stock and $275.0 million in aggregate principal amount of the 2029 Notes for $302.7 million in cash and 4,192,620 shares of common stock.

As a result of these transactions, during the three months ended March 31, 2026, we recognized a loss totaling $62.3 million, comprised of a $16.9 million loss on extinguishment associated with the repurchase of the 2026 Notes and a $45.4 million inducement expense related to the repurchase of the 2029 Notes, which was accounted for as an induced conversion.

As of March 31, 2026, we had an aggregate principal amount of $1,223.75 million

outstanding of the 2026 Notes, the 2029 Notes, the 2030 Notes and the 2031 Notes (collectively, the “Convertible Notes”).

Key terms of the Convertible Notes are as follows:

2 unchanged sentences

June 14, 2021

February 14, 2023

August 13, 2024

August 14, 2025

March 30, 2026

Maturity date (unless earlier converted, repurchased or redeemed)

2 unchanged sentences

August 15, 2030

October 1, 2031

Interest rate

2 unchanged sentences

Redemption price

● Interest rate:

Payable semiannually in arrears on February 15 and August 15 of each year for the 2030 Notes, the 2029 Notes

and the 2028 Notes and on June 15 and December 15 of each year for the 2026 Notes.

· Interest payment dates:

Payable semiannually in arrears on June 15 and December 15 of each year for the 2026 Notes, on February

15 and August 15 of each year for the 2029 Notes and the 2030 Notes and on April 1 and October 1 of each year for the 2031 Notes.

· Conversion price:

3 unchanged sentences

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

preceding May 15, 2030, May 15, 2029, May 15, 2028 and March 15, 2026 for the 2030 Notes, the 2029 Notes, the 2028 Notes and the 2026

preceding March 15, 2026, May 15, 2029, May 15, 2030 and July 1, 2031 for the 2026 Notes, the 2029 Notes, the 2030 Notes and the 2031

Notes, respectively, only under the following circumstances:

9 unchanged sentences

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

On or after May 15, 2030, May 15, 2029, May 15, 2028 and March 15, 2026 in

On or after March 15, 2026, May 15, 2029, May 15, 2030 and July 1, 2031 in

respect of the 2026 Notes, the 2029 Notes, the 2030 Notes and the 2031 Notes, respectively, until the close of business on the second

2 unchanged sentences

· 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 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, (i) on or after August

20, 2027, August 20, 2026, August 20, 2025 and June 20, 2023 in respect of the 2030 Notes, the 2029 Notes, the 2028 Notes and the 2026

Notes, respectively, and (ii) on or prior to the 45 th scheduled trading day (with respect to the 2030 Notes) or the 55 th

scheduled trading day (with respect to the 2029 Notes, the 2028 Notes and the 2026 Notes) 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.

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 our

common stock.

· Redemption dates:

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

June 20, 2023, August 20, 2026, August 20, 2027 and April 6, 2028 in respect of the 2026

Notes, the 2029 Notes, the 2030 Notes and the 2031 Notes, respectively, and on or prior to

the 55 th scheduled trading day with respect

to the 2026 Notes and the 2029 Notes and the 45 th

scheduled trading day with respect to the 2030 Notes and the 2031 Notes 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 respective 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.

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:

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may result in an increase to the conversion rate, provided that the conversion rate will not exceed 144.9275 shares, 103.6269 shares,

shares and 144.9275 shares of our common stock per $1,000 principal amount of the 2030 Notes, the 2029 Notes, the 2028 Notes and the 2026

Notes, respectively (the equivalent of 93,752,578 shares of our common stock based on the aggregate principal amount of Convertible Notes

outstanding), subject to adjustment.

75.7003 shares and 74.1282 shares of our common stock per $1,000 principal amount of the 2026 Notes, the 2029 Notes, the 2030 Notes

and the 2031 Notes, respectively (the equivalent of 98,835,989 shares of our common stock based on the aggregate principal amount of Convertible

Notes outstanding), subject to adjustment.

· Seniority and Security:

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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 September 30, 2025 was approximately $35.9 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, 2028, including purchases to offset

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

During the nine months ended September 30, 2025,

we repurchased 8,096,862 shares of our common stock under the repurchase program for an aggregate cost of $102.7 million.

Currently, approximately

$60.0 million remains under this program for future purchases.

Contractual Obligations

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 March 31, 2026 was approximately

$40.0 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, 2028, including purchases to offset future equity grants made under

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

During the three months ended March 31, 2026, we repurchased 1,521,334 shares

of our common stock under the repurchase program for an aggregate cost of $25.0 million.

Currently, approximately $225.0 million remains

under this program for future purchases.

Acquisition of Atlantic House

On March 13, 2026, we and the Buyer entered into the AH Purchase Agreement with Sellers, the EBT Trustee and the Individual Guarantor (each as defined in the AH Purchase Agreement), pursuant to which the Buyer agreed to the AH Acquisition, subject to the terms and conditions set forth therein.

Convertible Notes

We currently have $971.8 million in aggregate

principal amount of Convertible Notes outstanding, of which $150.0 million, $1.8 million, $345.0 million and $475.0 million are scheduled

to mature on June 15, 2026, August 15, 2028, August 15, 2029 and August 15, 2030 in respect of the 2026 Notes, the 2028 Notes, the 2029

Notes and the 2030 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.

We currently have $1,223.75 million in aggregate principal amount of Convertible Notes outstanding, of which $75.0 million, $70.0 million, $475.0 million and $603.75 million are scheduled to mature on June 15, 2026, August 15, 2029, August 15, 2030 and October 1, 2031, in respect of the 2026 Notes, the 2029 Notes, the 2030 Notes and the 2031 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.

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

We may settle and/or refinance these obligations when due.

See the section titled “Convertible Notes”

above for additional information.

Acquisition of Ceres Partners, LLC – Earnout Consideration

On October 1, 2025, we completed the Ceres Acquisition.

Pursuant to the Ceres Purchase Agreement, up to $225.0 million of earnout consideration is payable in 2030, contingent upon Ceres achieving

a CAGR in revenue of 12% to 22% during the earnout measurement period of January 1, 2025 through December 31, 2029, as follows:

● If the revenue CAGR for the earnout period is equal to or less than 12%, then, the aggregate amount of the earnout consideration shall

Contingent Consideration

Pursuant to the Ceres Purchase Agreement, up

to $225.0 million of additional consideration is payable in 2030, contingent upon Ceres achieving a compound annual growth rate (“CAGR”)

in revenue of 12% to 22% during the earnout measurement period of January 1, 2025 through December 31, 2029, as follows:

· If the revenue CAGR for the earnout period is equal to or less than 12%, then the aggregate amount of the earnout consideration will

· If the revenue CAGR for the earnout period is greater than 12% but less than 22%, then the aggregate amount of the earnout consideration

shall be pro-rated using straight-line interpolation between $0 and $225.0 million;

will be pro-rated using straight-line interpolation between $0 and $225.0 million;

· If the revenue CAGR for the earnout period is equal to or greater than 22%, then the aggregate amount of the earnout consideration

shall be $225.0 million.

will be $225.0 million.

We have determined that the earnout should be

classified as contingent consideration as (i) continuing employment is not a condition for payment (except as described below), (ii) non-employee

sellers are entitled to similar payments based upon their relative ownership percentages and (iii) the payment formula described above

is tied to the valuation of the acquired business.

Under ASC 805, contingent consideration must be recognized at the acquisition date

as part of the consideration transferred for the acquired business.

The fair value of the contingent consideration

at March 31, 2026 was $14.4 million.

In connection with the Ceres Acquisition, the

sellers established a retention bonus plan for certain Ceres employees pursuant to which the greater of $3.05 million or 10% of any earnout

consideration in excess of $50.0 million will be forfeited by the sellers and paid to participating employees, contingent upon continued

employment through earnout payment date.

Any amounts forfeited due to employee attrition revert to the sellers.

This compensation will

be recognized over the service period with an equal and offsetting receivable from the sellers.

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.

Under the terms of the transaction, we have

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.

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 $40 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, of which $69.6 million has been paid to date.

The implied price per share was $6.02 when considering the interest-free

financing element of the transaction.

Operating Leases

Total future minimum lease payments with respect

to our operating lease liabilities were $1.9 million at September 30, 2025.

Cash flows generated by our operating activities and existing

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

See Note 10 to our Consolidated Financial Statements

for additional information.

future minimum lease payments with respect to our operating lease liabilities were $3.4 million at March 31, 2026.

Cash flows generated

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

to our Consolidated Financial Statements for additional information.

Off-Balance Sheet Arrangements

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Critical Accounting Policies and Estimates

Business Combinations

We account for business combinations under the

acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, which requires an allocation of the consideration

paid by us to the identifiable assets, intangible assets and liabilities based on the estimated fair values as of the closing date of

the acquisition.

Contingent consideration obligations that are elements of consideration transferred are recognized at the acquisition

date as part of the fair value transferred in exchange for the acquired business and are remeasured to fair value each reporting period.

The excess of the fair value of purchase price over the fair values of the identifiable assets, intangible assets and liabilities is recorded

Goodwill and Intangible Assets

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

Goodwill is allocated to our U.S.

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.

test goodwill for impairment at the reporting unit level and have determined that we have

a single reporting unit, consistent with our single operating segment.

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 our 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

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including projected revenue growth rates of 3.0% and a weighted average cost of capital of 9.0%.

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 6 to our Consolidated Financial Statements for information.

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.

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, 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

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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.

We earn management fees in exchange for Ceres

providing investment advisory and other management services to Ceres Farms.

Management fees are generally calculated as a stated percentage

of members’ capital account balances as of the last day of each calendar quarter, subject to adjustment for any contractual waivers

as well as contributions and redemptions arising in any particular quarter.

Management fees are recognized as revenue over time, as the

performance obligation is satisfied.

We earn performance fees based on a specified

percentage of Ceres Farms’ net profits, subject to contractual fee waivers, high-water marks and loss recovery requirements.

fees are earned only after members have recovered prior losses and applicable thresholds have been met.

Performance fee revenues are recognized

when it is probable that a significant reversal of cumulative revenues recognized will not occur, which generally occurs upon the determination

of fund profits that are no longer subject to clawback or reversal under the governing agreements.

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

We 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.

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.

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-Q

Item 2. Management’s Discussion and Analysis