0001628280-26-003332
SEC filingRevenue grew 16% YoY driven by cash management and investment advisory asset growth, net income stable.
For the three months ended October 31, 2025, Wealthfront reported total revenue of $93.2 million, a 16% increase from $80.3 million in the same period last year. The growth was primarily driven by a 14% rise in cash management revenue to $68.8 million and a 26% increase in investment advisory revenue to $24.2 million. Net income was relatively flat at $30.9 million versus $30.0 million, as a one-time $6.8 million stock-based compensation charge in general and administrative expenses and higher cost of revenue offset revenue gains. Gross margin declined slightly from 90.1% to 89.1%, while operating margin compressed from 36.6% to 33.7% due to increased G&A spending. Adjusted EBITDA, a non-GAAP measure, grew 24% to $43.8 million, with margin improving to 47% from 44%, reflecting scalability in marketing and operations.
Cash management revenue benefited from an 18% increase in average assets, though the annualized fee rate dipped from 0.60% to 0.58% following Federal Reserve rate cuts and intentional yield protection for clients. Investment advisory revenue outpaced cash management with 26% growth, supported by a 28% increase in average assets and a stable fee rate of 0.22%. Platform assets reached $92.8 billion, with investment advisory assets growing 31% YoY versus 14% for cash management, as clients rotated from cash to advisory products. Net deposits plunged 64% to $1.6 billion, driven by this internal rotation, but funded clients grew 20% to 1.4 million, indicating strong client acquisition.
Wealthfront did not provide explicit forward guidance in this MD&A. However, management noted expectations for continued scaling: cost of revenue as a percentage of revenue is expected to decline long-term, and product development and G&A expenses are expected to increase in absolute terms but decrease as a percentage of revenue over time. The recent IPO (completed December 2025) and the expansion of the revolving credit facility to $250 million provide liquidity to support growth initiatives. Key strategic priorities include deepening client relationships through cross-product flows and maintaining low-cost leadership to sustain asset growth and profitability.