v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Measurements [Abstract]  
Fair Value Measurements

5. Fair Value Measurements

The fair value of financial instruments is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., “the exit price”) in an orderly transaction between market participants at the measurement date. ASC 820, Fair Value Measurement, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs reflect assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the transparency of inputs as follows:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Instruments whose significant drivers are unobservable.

The availability of observable inputs can vary from product to product and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The tables below summarize the categorization of the Company’s assets and liabilities measured at fair value. During the three months ended March 31, 2026 and 2025, there were no transfers between Levels 2 and 3.

    March 31, 2026
    Total   Level 1   Level 2   Level 3
Assets:                
Recurring fair value measurements:                                
Cash equivalents   $ 258,450     $ 258,450     $ —     $ —  
Financial instruments owned, at fair value:                                
ETFs     42,207       42,207       —       —  
Pass-through GSEs     5,837       —       5,837       —  
Other assets—seed capital (WisdomTree Digital Funds):                                
U.S. treasuries     4,733       —       4,733       —  
Equities     10,078       10,078       —       —  
Fixed income     2,382       1,016       1,366       —  
Total   $ 323,687     $ 311,751     $ 11,936     $ —  
Liabilities:                                
Recurring fair value measurements:                                
Contingent consideration   $ 14,406     $ —     $ —     $ 14,406  

    December 31, 2025
    Total   Level 1   Level 2   Level 3
Assets:                                
Recurring fair value measurements:                                
Cash equivalents   $ 161,063     $ 161,063     $ —     $ —  
Financial instruments owned, at fair value:                                
ETFs     81,737       81,737       —       —  
Pass-through GSEs     6,053       —       6,053       —  
Other assets—seed capital (WisdomTree Digital Funds):                                
U.S. treasuries     5,402       —       5,402       —  
Equities     11,824       11,824       —       —  
Fixed income     2,101       1,138       963       —  
Total   $ 268,180     $ 255,762     $ 12,418     $ —  
Non-recurring fair value measurements:                                
Fnality International Limited—Series B-1 Preference Shares(1)   $ 8,035     $ —     $ —     $ 8,035  
Liabilities:                                
Recurring fair value measurements:                                
Contingent consideration   $ 11,844     $ —     $ —     $ 11,844  

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(1)  Fair value determined on September 10, 2025. Not included in the table above are prospective changes in value due to fluctuations in the British pound to U.S. dollar exchange rate.

Recurring Fair Value Measurements – Methodology

Cash equivalents (Note 4) – These financial assets represent cash invested in highly liquid investments with original maturities of less than 90 days, certain digital assets that are readily convertible into known amounts of cash and subject to insignificant risk of changes in value (including USDC and USDW), as well as institutional money market funds that invest in short-term, high-quality U.S. Treasury and government agency securities and aim to maintain a stable $1.00 net asset value per share. These investments are valued at par, which approximates fair value, and are classified as Level 1 in the fair value hierarchy.

Financial instruments owned (Note 6) – Financial instruments owned are investments in ETFs, pass-through GSEs, equities and fixed income. ETFs and equities are generally traded in active, quoted and highly liquid markets and are therefore classified as Level 1 in the fair value hierarchy. Pricing of pass-through GSEs and fixed income includes consideration given to date of issuance, collateral characteristics and market assumptions related to yields, credit risk and timing of prepayments and may be classified as either Level 1 or Level 2.

Contingent consideration (Note 10) – This liability represents contingent consideration arising from the Ceres Acquisition which is measured at fair value on a recurring basis and classified within Level 3 of the fair value hierarchy as the valuation incorporates significant unobservable inputs. Fair value is estimated using a Monte Carlo simulation model, which incorporates a range of potential revenue outcomes over the earnout measurement period and estimates the probability-weighted present value of expected future payments. Significant assumptions used in the valuation include compound annual growth rate (“CAGR”), revenue volatility and revenue discount rate.

Fair Value Measurements classified as Level 3 – The following table presents a reconciliation of beginning and ending balances of recurring fair value measurements classified as Level 3:

These instruments consist of the following:

    Three Months Ended
   

March 31,
2026

  

March 31,
2025
Other Investments:                
Beginning balance   $ —     $ 687  
Net unrealized gains(1)     —       68  
Ending balance   $ —     $ 755  
Contingent Consideration:                
Beginning balance   $ 11,844     $ —  
Remeasurement(2)     2,562       —  
Ending balance   $ 14,406       —  

_____________________________

(1) Recorded in impairments and other losses, net in the Consolidated Statements of Operations.
(2) Recorded in remeasurement of contingent consideration in the Consolidated Statements of Operations.