Wealthfront Revenue Growth Slows to 1% as Cash Assets Fall
The tech-driven financial platform posted $91.9 million of quarterly revenue and said Total Platform Assets passed $100 billion at the end of August.
Wealthfront Corporation (WLTH) reported that year-over-year revenue growth slowed to 1% in the fiscal second quarter ended July 31, 2026, after 7% growth in the prior quarter and 16% two quarters earlier. Total revenue was $91.9 million.
The gap between that revenue pace and a 12% year-over-year rise in Total Platform Assets to $99.0 billion was primarily due to stronger growth in Investment Advisory Assets versus higher-fee Cash Management Assets. Platform assets had grown 19% year-over-year to $96.6 billion in the prior quarter and 17% to $94.1 billion two quarters earlier. Chief Executive David Fortunato said the platform 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, after 39% growth to $51.7 billion in the prior quarter. Cash Management Assets were $44.9 billion, down 4% year-over-year, reversing 3% growth a quarter earlier. Cash management revenue was $61.8 million, versus $68.9 million a year earlier. Investment advisory revenue was $28.8 million, versus $22.0 million a year earlier. Other revenue was $1.3 million. The annualized cash management fee rate was 0.55%, versus 0.60% a year earlier; the investment advisory rate was 0.22%, unchanged.
Funded clients were 1.51 million, up 14% year-over-year, after 15% growth in the prior quarter. Funded accounts were 1.97 million, up 15%. Total net deposits were $1.1 billion, down from $3.7 billion a year earlier and from $0.6 billion in the prior quarter. Cash Management net deposits were negative $26 million; Investment Advisory net deposits were $1.1 billion. Beginning with this report, deposit matches from client promotions are included in net deposits starting with June 2026, aligned with the launch of Custodial Accounts.
GAAP diluted net income was $17.6 million, down 49% year-over-year, with diluted earnings of $0.10 a share. The decline was primarily due to higher stock-based compensation from dual-trigger awards after the December 2025 IPO. Stock-based compensation was $16.4 million, versus $1.6 million a year earlier. GAAP operating expenses were $75.1 million. Adjusted operating expenses, which exclude stock-based compensation, were $58.7 million, up 17% year-over-year; the increase was primarily due to higher adjusted product development expense, including headcount associated with Wealthfront Home Lending.
Adjusted EBITDA was $38.1 million, down 15% year-over-year, with a 41% margin. Net cash provided by operating activities was $47.3 million, up 22% year-over-year. Adjusted free cash flow was $28.3 million, down 27% year-over-year, with conversion of 74%. Adjusted free cash flow for the quarter included the typical partial payment of employee cash bonuses in July.
Cash and cash equivalents were $453.3 million at quarter-end. Chief Financial Officer Alan Imberman said the company maintained a debt-free balance sheet and cash balances above $450 million. Wealthfront repurchased 3.3 million shares for approximately $30 million in open-market repurchases, after more than 3 million shares and over $27 million in repurchases in the prior quarter.
Wealthfront Home Lending reached general availability in Texas in early May and California in early August, joining Colorado. Expansions to Washington, Florida, Illinois, and Oregon are planned in the coming months, and the product aims to offer rates at least 50 basis points below the national average. Custodial Accounts launched as a family wealth management product, complementing 529 plans and joint and trust cash and investing accounts. Fortunato said the company remains focused on shipping products aligned with clients’ interests and believes it is in a strong position to become the modern wealth manager for digital natives.