Wealthfront Corporation Q4 FY2026 earnings call

Fiscal 2026 was successful with Wealthfront aiming to be leading tech-driven platform. Total platform assets grew. Fourth quarter had cash-to-invest transition with second best quarter of total investment advisory cross-product flows and second consecutive record quarter of net cross-account transfers from cash to invest. Bolstered cash management and investment advisory offerings, enhanced interoperability, began home lending early access. For cash management: automated dividend sweeps, increased daily withdrawal limits, rolled out Wealthfront Treasury Money Market Fund with ~$85 million AUM as of end Feb. For investment advisory: expanded fractional shares, introduced dividend reinvestment plans, etc. Home lending launched in Colorado, expanded to Texas and California, aims to provide rates at least 50 basis points better than national average. Increased cash management base APY by 5 basis points, launched direct deposit incentive. February metrics: total platform assets $95.2 billion, net deposits $271 million, investment advisory net deposits $416 million, cash management net outflows improved from Jan

Fiscal 2026 revenue reached a record $365 million, up 18% year over year. Adjusted EBITDA hit a new record of $170.7 million, up 20% year over year. Fourth quarter revenue was $96.1 million, up 16% year over year. Cash management revenue was $69.7 million, up 12% year over year, with average cash management balance $46.2 billion, up 10% year-over-year, and annualized cash management fee rate 60 basis points, up 1 basis point year-over-year. Investment advisory revenue was $25.8 million, up 31% year-over-year, with average investment advisory balance $47.3 billion, up 30% year-over-year, and annualized investment advisory fee rate roughly flat at 22 basis points. Total platform assets grew 17% year over year to $94.1 billion at fiscal year end, with investment advisory assets $48.7 billion (up 29% year over year) and cash management assets $45.4 billion (up 7% year over year). Funded clients ended the year at ~1.42 million, up 17% year over year, and funded accounts at ~1.84 million, up 16% year over year

Expect adjusted EBITDA margins to decline sequentially but remain above 40% for first fiscal quarter 2027. First quarter annualized cash management fee rate expected to be in range of 57 to 58 basis points. Anticipate tax-related cash management net outflows in back half of March to April 15th. Expect to go general availability in Colorado this year, launch early access in additional states, go general availability in Texas and California this year

Tax time seasonality could lead to cash management net outflows. Competitive environment could impact cash management fee rate. Uncertainty around future Fed funds rate and its impact on client asset mix

Q: Ken Worthington of JP Morgan asked about mortgage rollout reception in Colorado and ramp to other states.

A: Progressing, optimizing learning, expect to go general availability in Colorado this year, launch early access in additional states, go general availability in Texas and California this year.

Q: Ryan Tomasello of KBW asked about cash management fee rate guide and account growth.

A: 57-58 bps is first quarter guide, depends on uptake; investment account growth focus with incentives.

Q: Devin Ryan of Citizens Bank asked about cash account outflows and remaining rate chasers.

A: Rate cuts lead to cash flow evaluation, normally normalize 4-6 weeks post-rate cut, recapture majority of gross withdrawals.

Q: Dan Perlin of RBC Capital Markets asked about home lending rollout update.

A: Focused on improving digital experience and operational efficiency, continuing to learn and expand.

Q: Alex Markgraf of KBCM asked about product roadmap and spend.

A: Focus on automating products, prioritizing impactful things, investing in home lending and incentives.

Q: James Yarrow of Goldman Sachs asked about invest business match programs and client asset mix.

A: Incentives not overly focused on match, mix depends on more than just rates with client wealth accumulation.

Q: Alex Markgraf followed up on money market fund.

A: Money Market Fund is inside cash management, fee waiver period, offers after-tax yield for high tax states