Wealthfront — Fiscal Second Quarter 2027 Earnings Summary

Financial Performance

• Total revenue for the three months ended July 31, 2026, was $91.9 million, a 1% increase year-over-year from $91.1 million.
• GAAP diluted net income was $17.6 million, a 49% decrease from $34.7 million in the prior year quarter.
• GAAP diluted net income margin was 19%, down from 38% in the prior year quarter.
• GAAP diluted earnings per share (EPS) was $0.10, a 59% decrease from $0.24 in the prior year quarter.
• Adjusted EBITDA was $38.1 million, a 15% decrease year-over-year from $44.8 million; Adjusted EBITDA margin was 41%, down from 49%.
• Adjusted free cash flow was $28.3 million, a 27% decrease year-over-year from $38.8 million.
• Net cash provided by operating activities was $47.3 million, a 22% increase from $38.9 million in the prior year quarter.
• Operating cash flow conversion was 267%, compared to 112% in the prior year quarter.
• GAAP operating expenses were $75.1 million, up from $51.8 million, driven by higher stock-based compensation (SBC) and product development expenses.
• Adjusted operating expenses were $58.7 million, a 17% increase year-over-year, primarily due to higher personnel-related expenses for Wealthfront Home Lending.
• Stock-based compensation expense was $16.4 million, compared to $1.6 million in the prior year quarter, due to the recognition of dual-trigger stock awards following the December 2025 IPO.
• Cash and cash equivalents were $453.3 million at quarter-end, with a debt-free balance sheet.

Guidance and Future Outlook

• Wealthfront aims to become the modern wealth manager for digital natives by shipping products aligned with client interests.
• Wealthfront Home Lending plans to expand to Washington, Florida, Illinois, and Oregon in the coming months.
• The company intends to continue building high-quality products at industry-low fee rates to help clients achieve financial goals.
• Management expressed confidence in achieving its goal of becoming the modern wealth manager for digital natives.

Business Segments and Product Lines

• Total Platform Assets reached $99.0 billion at quarter-end, up 12% year-over-year; the company surpassed $100 billion in Total Platform Assets as of the end of August.
• Investment Advisory Assets were $54.1 billion, up 30% year-over-year, contributing to revenue growth.
• Cash Management Assets were $44.9 billion, down 4% year-over-year, with lower fee rates impacting revenue relative to asset growth.
• Funded clients grew 14% year-over-year to 1.51 million; Funded accounts grew 15% year-over-year to 1.97 million.
• Total Net Deposits for the quarter were $1.1 billion.
• Wealthfront Home Lending launched general availability in Texas (May) and California (August), and is live in Colorado, Texas, and California.
• Launched Custodial Accounts, designed to lower a child's future taxes via automated Tax-Gain Harvesting strategies.
• Enhanced Wealthfront Home Lending with a self-service scenarios tool, smarter RSU income verification, and streamlined intake flows.
• Revenue breakdown: Cash management revenue was $61.8 million; Investment advisory revenue was $28.8 million; Other revenue was $1.3 million.

Market and Competitive Landscape

• Analysis of clients from January 1, 2021, to January 1, 2026, shows millennials nearly tripled their wealth on the platform, and Gen Z clients quintupled their wealth.
• Wealthfront Home Lending aims to offer rates at least 50 basis points below the national average, an objective delivered on average since launch.
• The company focuses on serving digital natives with automated investing, saving, borrowing, and lending products.

Risks and Challenges

• Forward-looking statements involve risks and uncertainties, including factors beyond the company's control that could cause actual results to differ materially.
• Specific risks are detailed in filings with the SEC, including the Annual Report on Form 10-K for the fiscal year ended January 31, 2026, and the most recent Quarterly Report on Form 10-Q.

Management Commentary and Tone

• CEO David Fortunato stated the company has constructed a durable business model and is proud of surpassing $100 billion in Total Platform Assets.
• CFO Alan Imberman highlighted the product-led growth strategy driving strong adjusted free cash flow and the ability to invest in organic growth.
• Management noted the increase in SBC expense was due to the recognition of dual-trigger stock awards following the IPO.

Other Key Points

• The company repurchased 3.3 million shares in the quarter, resulting in approximately $30 million of open market repurchases.
• Wealthfront Home Lending is designed to be a fully digital mortgage experience, aiming to handle the product entirely in a mobile app.
• The Custodial Account offering complements existing 529 Education Savings Plans, Joint, and Trust Cash and Investing Accounts.
• The company maintains a strong and flexible capital position with cash balances above $450 million at quarter-end.