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Good day everyone, thank you for standing by. Welcome to Wealthfront's first quarter 2027 earnings conference call. At this time, all participants are in a listen only mode. After the presentation, there will be a question and answer session. To ask a question, you will need to press star one one on your telephone. You will hear a message advising your hand is raised. To withdraw the question, please press star one one again. Please be advised that today's conference is being recorded. It's my pleasure to hand the conference to the Vice President of Investor Relations, Matthew Moon. Please proceed.

Good afternoon, everyone, and thank you for joining us today to discuss Wealthfront's fiscal first quarter 2027 financial results, which reflect the quarter ended April 30th, 2026. On the line are David Fortunato, our Chief Executive Officer and President, and Alan Imberman, our Chief Financial Officer and Treasurer. After prepared remarks, we will open the line for Q&A. During the course of today's call, we may make forward-looking statements as defined under applicable securities laws. Forward-looking statements are subject to risks and uncertainties, and the company can give no assurance that they will be or prove to be correct.

To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that Wealthfront files with the Securities and Exchange Commission, including our most recent Form 10-Q. Our discussion today will include certain non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute or in isolation from GAAP measures. Reconciliations of non-GAAP financial measures to comparable GAAP measures can be found in our press release accompanying this call, which is posted to our investor relations website at ir.wealthfront.com. With that, I'll turn the call over to David.

Good afternoon, everyone. In our fiscal first quarter 2027, we continued to deliver on our objective of becoming the leading tech-driven platform for digital natives seeking to turn their savings into wealth. We believe we make the best practices of personal finance accessible at low fees through automation, and intuitive and convenient through user-friendly design. At scale, this drives high margins, allowing us to share savings with clients, creating and engendering trust, driving asset retention and low-cost word-of-mouth growth, which once again drives high margins.

This flywheel enables us to reinvest in and enhance our core cash management and investment advisory product offerings, supports our organic build-out of Wealthfront Home Lending and future product innovations, and most importantly, helps our clients save more on every paycheck, earn higher returns on their savings, and borrow at lower rates. In other words, grow their wealth. We remain grounded in our belief that the best way to build deep, long-term client relationships is to continue to delight clients by offering them more value than they can find anywhere else and focusing on their long-term financial outcomes.

This informs our product development strategy and keeps us focused on our roadmap regardless of short-term market conditions. At quarter end, total platform assets grew 19% year-over-year to a record $96.6 billion, with investment advisory assets of $51.7 billion up 39% year-over-year, and cash management assets of $44.9 billion up 3% year-over-year. We ended the quarter at roughly 1.46 million funded clients, up 15% year-over-year, and roughly 1.9 million funded accounts, also up 15% year-over-year, reflecting 1.3 funded accounts per funded client. Total net deposits in the quarter were $554 million.

This includes $577 million in cash management net withdrawals in April, primarily due to tax seasonality. Recall, our clients are net cash taxpayers, highlighting the attractive financial profile of our average client. This monthly result was consistent with the expectation we set last quarter for cash management net withdrawals in April of this year to exceed the $538 million in net withdrawals realized in April of last year.

These are, of course, net figures and specific to activity realized directly on our platform. Looking more broadly, this March and April, a period we refer to as tax season, we estimate our clients made over $3 billion in combined tax payments from their Wealthfront cash accounts and from their linked external accounts, with the latter including amounts that were initially withdrawn from Wealthfront accounts prior to tax payment, in addition to payments from funds held in linked accounts.

Clients directly paid tax authorities over $500 million from their Wealthfront cash accounts during the year's tax season, up 40% year-over-year, indicating growing trust in our liquidity offerings. This has likely been the result of significant investment into our platform over the years made to deliver positive tax time experiences to our clients. For example, clients increasingly utilized our leading low-cost Portfolio Line of Credit, or PLOC rates, in order to fund tax obligations, with tax dollar payments funded with PLOC balances up roughly two times year-over-year.

We also recently invested in dynamic withdrawal limits, increasing client-specific limits up to $1 million per account. These new client-specific limits enabled more of our clients to fully satisfy their tax obligations in a single tax payment out of their cash accounts, strengthening our position as an attractive primary operating account option for our clients. It might be counterintuitive, but we want our clients to pay their taxes from their cash accounts given our ability to drive delightful tax time experiences. Which we believe will lead to us receiving a disproportionate share of their future savings over time.

We've also experienced strong uptake in our cross-product adoption incentive launched in early March. Recall, this incentive provides clients who direct deposit at least $1,000 per month and also fund an investment account with an ongoing 25 basis point increase to their cash APY. This directly led to over 4,000 new account openings and helped drive asset-weighted cross-product adoption to roughly 63% as of May end, up one and a half percentage points versus the level realized immediately prior to launch at February end.

In the early days, we've also been encouraged by the fact that on average, new adopters of the incentive have consistently brought on a notably larger amount of net deposits in each month since launch than that of similar clients that have not adopted the incentive. We also continuously invest in our core products. In cash management, we launched Cash Category Goals and recurring cash to category transfers. Cash Category Goals allow clients to more easily track their progress towards personalized financial targets within specific cash sub-accounts.

Our new recurring cash to category transfer feature provides clients another option to better achieve those goals on an automated basis. On investment accounts, we shipped one-tap-to-invest in the Stock Investing Account to streamline the purchase and sale of individual stocks and ETFs as we continue to transition this account to a more traditional brokerage offering. Wealthfront Home Lending added a second takeout investor in the quarter and launched general availability in Colorado in early April and in Texas in early May.

As a reminder, we're running a similar playbook for home lending that we have successfully deployed in our cash and investing businesses. That is using technology to deliver a better digital experience and a better rate with transparent fees. While we are still in early days, the initial client feedback and data supports our conviction and our ability to deliver on these objectives. While anecdotal, I'd like to share a couple of specific client comments to bring the experience to life. One of our clients raved about the self-serve capability relative to his prior experiences.

That is the ability to independently explore the latest mortgage rates without having to call up a mortgage banker or broker every time he wanted to open the fridge, as he described it. Another client enjoyed the ability to track the progress of his application in real time in-app. The fact that our application process can be handled entirely through mobile completely end to end is a differentiator, and we've seen more than half of Wealthfront Home Lending clients interacting with the flow via mobile.

This is all while continuing to deliver on our objective of providing clients home mortgage rates at least 50 basis points better than the national average on average in the states in which we operate today. As we noted last quarter, we are deliberately rolling this service out at a measured pace in order to maximize learnings to optimize long-term client outcomes. The fact that we've been able to increase rate lock volume by roughly 25% month-over-month in May amidst this build-out is a feat that I'm particularly proud of, especially in the face of rising mortgage rates.

Currently, we are focused on automating the decisioning process of client pre-qualifications, starting from the application intake process all the way through approval. We plan to share more details with you all in the coming quarters. Taking a step back, since the early days of Wealthfront, we have been saying that we can utilize technology to provide digital advisory solutions at a level similar to or better than traditional solutions provided by financial advisors. AI has, and will certainly continue to play a role in achieving this goal.

We're confident in our ability to continue to build solutions, including AI solutions, that automate and improve the personal financial experience for our clients, so long as they continue to build client trust. In order to determine which AI solutions best achieve our trust and wealth-building goals, we need to experiment and test these solutions with our clients. We are entering that phase now and will share more with you over time as we learn more. With that, I'd like to turn it over to Alan to go over the financials.

Thanks, David. Starting with the income statement. Revenue came in at $90.5 million, up 7% year-over-year. Cash management revenue was $63.4 million, down 1% year-over-year due to a lower annualized cash management fee rate of 58 basis points, down four basis points year-over-year, and within the expected 57-58 basis point range we had communicated last quarter. The lower fee rate was partially offset by higher average cash management balances measured as the simple average of beginning and end-of-quarter figures, up 5% year-over-year to $45.1 billion.

The year-over-year decline in the annualized cash management fee rate was driven primarily by the fee rate lost in converting APYs to an APR, given the lower Fed funds rate, as well as the new cross-product adoption incentive introduced in early March that impacted two months of the quarter. As David noted, we estimate that in the first few months in market, this incentive has notably increased net deposits brought to the platform from new adopters relative to similar non-adopters, reflecting early success in deepening relationships with adopted clients.

To help inform your models, the run rate annualized cash management fee rate at May end was 54 basis points. On an EFFR neutral basis, the run rate annualized cash management fee rate at May end was 56 basis points. The 54 basis points, however, includes the recent impact of the effective fed funds rate declining by two basis points within its target range, with this decline having started on May 7th.

Investment advisory revenue was $26.2 million, up 32% year-over-year, primarily due to average investment advisory balances of $50.2 billion, up 34% year-over-year, while the annualized investment advisory fee rate of 21 basis points was roughly flat versus the same period last year. Asset growth was driven by both strong markets and net deposits over the trailing 12-month timeframe. Gross profit was $80.5 million, up 6% year-over-year, reflecting a gross profit margin of 89%, down roughly one percentage point year-over-year, due in part to start-up expenses associated with Wealthfront Home Lending, higher money movement costs, and higher data and other cost of revenue expenses.

Total GAAP expenses of $75.9 million were up 46% year-over-year, which recall, does not incorporate an apples-to-apples comparison of share-based compensation, as share-based compensation prior to the IPO did not incorporate dual trigger RSU expense, given that the second of the two dual trigger conditions was not satisfied until the IPO occurred. Adjusted operating expenses, that is, expenses excluding share-based compensation, were $58 million, up 16% year-over-year, due primarily to higher product development expense.

The adjusted product development expense increase was due to higher personnel-related expenses, primarily increased headcount, and higher cloud computing expense. Adjusted EBITDA of $37.5 million was down 1% year-over-year and reflected an adjusted EBITDA margin of 41%, down three percentage points year-over-year, consistent with the expectations that we communicated last quarter, including the impact of continued investment into incentives and to rolling out Home Lending.

We continue to demonstrate significant operational and financial discipline, delivering a Rule of 40 metric of 49 for the quarter. This is our 15th consecutive quarter exceeding the Rule of 40 and underscores a business model designed to successfully and consistently balance top-line growth with structural efficiencies of our automated platform. GAAP net income was $12.8 million, and GAAP earnings per share was $0.07. Taking a moment on share count, our GAAP weighted average diluted shares outstanding in the quarter was 175.5 million.

This includes the impact of 3.1 million open market repurchases executed throughout the quarter, as well as the treasury method impact of outstanding RSUs and options. The future impact of these awards on our diluted share count for the purposes of reporting GAAP financials may fluctuate meaningfully period to period depending on our average share price in those periods. We've provided a table in the back of our presentation to illustrate what our GAAP weighted average diluted share count could have been in the first quarter under different average share prices, with important caveats noted on that page.

Beyond share price, our GAAP weighted average diluted share count in future periods would be impacted by new grants, forfeitures, and the change in unamortized stock-based compensation expense. Net cash provided by operating activities was $22.7 million, and adjusted free cash flow was $42.7 million. This results in an adjusted free cash flow conversion ratio, that is, adjusted free cash flow as a percentage of adjusted EBITDA of 114%. Our robust cash flow generation and significant proceeds raised through the IPO helped facilitate the recent transition of our clients' cash accounts to a new bank provider.

This bank provider unlocked the ability to administer the higher client-specific withdrawal limits of up to 1 million that David mentioned, which led to improved tax time outcomes for our clients. As a result of this transition, we now initially fund our clients' early direct deposit payments and are subsequently reimbursed when the client receives their direct deposit at most, just two days later. Therefore, this quarter and going forward, we will be presenting free cash flow adjusted for this change in direct deposit receivables in combination with the change in funded instant withdrawal receivables, given that both activities have no impact to our cash profitability but will continue to impact quarter-end figures simply due to timing.

The early direct deposit, in particular, consistently occurs in larger quantities near typical pay cycles, including at the end of each month. The cumulative change in these short-term receivables was $21 million quarter-over-quarter. Once again, this does not have a material impact to the cash profitability of the business but does provide our clients with additional days of interest income generation at our leading APY. Looking ahead, recall we pay out 35% of accrued annual cash bonuses to our employees each July.

We anticipate a lower adjusted free cash flow conversion ratio in the fiscal second quarter relative to this quarter. In March, we received board authorization for a $100 million share repurchase program. During the fiscal first quarter 2027, we repurchased 3.1 million shares for roughly $27 million as part of this repurchase program at an average price of $8.66 per share. We are comfortable deploying our cash for share repurchases because of our robust free cash flow generation, our debt-free capital structure, as well as the multi-decade opportunity to compound wealth with new and existing clients who are in the wealth accumulation phase of their lives.

Even with the strong repurchase activity, we ended the quarter with cash and cash equivalents of $428 million, which excludes the receipt of temporary client funding receivables referenced earlier. As a reminder, our long-term capital priorities are to invest in organic product-led growth, including in infrastructure and automation, to evaluate opportunities to repurchase shares, and to assess M&A with a preference to build versus buy. Any remaining capital would be added to our surplus reserves in order to bolster resilience and durability. Closing with current trends. Today we published May metrics. Total platform assets ended May at another month-end record of $99 billion.

Total net deposits were $447 million, including $342 million in investment advisory and $140 million in cash management. The continued resilience and positive market sentiment in May drove the strongest month in total cross-product flow from cash to invest since January 2026, helping drive asset-weighted cross-product adoption to roughly 63%, up roughly one and a half percentage points since February end, immediately prior to the launch of the Cross-Product Adoption Incentive.

Looking ahead, while we remain in a dynamic macro backdrop, we have built a diverse product suite that allows our clients to build wealth through a multitude of environments. We make money when our clients do, and this product suite, as well as continued organic investments, puts us in a strong position to continue to grow with our clients over the long term. With that, let's move to Q&A.

Thank you. As a reminder, to ask a question, simply press star one one on your telephone and wait for your name to be announced. To remove yourself, press star one one again. One moment for our first question. Comes from Devin Ryan with Citizens JMP. Please proceed.

Great. Thanks. Good afternoon, everyone. First question on the new cross-product adoption incentive. Good to hear about some of the early uptake, 4,000 account openings related to that. That's about 10% of the new account growth in the quarter. Just love to hear about how the marketing is going for that and whether you could maybe lean in more to accelerate that element of new accounts. If you can also just give us a sense of how much more cash these customers are bringing on platform relative to the average since you guys highlighted that as well. Thanks.

Hey, Devin. Yeah, thanks for the question. May was a good month for client acquisition on a relative basis, and we saw good positive trends in client acquisition. I think the two key top-of-funnel drivers were the direct deposit incentive. On top of the kind of natural growth from the direct deposit incentive, I would add that we tend to see a few thousand dollars more on an average net deposit basis from clients who adopt the direct deposit incentive. On an aggregate, recent cohorts who start with cash are adopting investment accounts at a higher rate than they have been.

That's been a number that's been improving for over the last six months on a monthly cohort basis. That's been great to see. The other thing that we've noticed is elevated organic traffic from large language models that are referencing Wealthfront as a solution to folks that are engaging. The elevated traffic has also been a positive change for getting clients on board and coming in as sort of warm leads to Wealthfront.

Got it. Thanks. As a follow-up, just big picture on AI, you kind of alluded to looking at obviously potential opportunities over time, and it would be great just to hear a little bit more about the strategy and what we should expect in the coming quarters. Are there specific products that you’ll be launching, or is it more just more deeply integrating AI into what you’re already doing? Obviously appreciate you have a culture of automation and a lot of what you’re doing is already effectively connected to AI, but would love to hear more about kind of client-facing or products that are tailored around that and whether we should expect anything in the coming quarters around that. Thanks.

Yeah. The first thing I would say is the base and foundation of our business is client trust and growing client trust in Wealthfront and our offerings. When clients think about their futures, we want to make sure that everything that we do builds trust as the technology capabilities and what we're able to offer clients evolve. I would say it's not very difficult to build tools using large language models that provide automated financial advice to clients. What is more difficult and more important from our perspective is to use those tools in a way that achieves the trust-building objectives that we have.

I think if you look a number of years down the road the expectation that we have would be the [great] solution can provide a using a natural language interface and a variety of financial models a holistic financial plan for a client day they can talk a client through difficult scenario they can help with tax they can help with estate and trust planning.

Some of those capabilities we have today some of those capabilities that will need in the future but when we think about that future what were going to do is as we build toward we believe is long term solution focus on identifying areas where we can both build client trust and improve the business along the way to get those solution out to clients incrementally we're thinking about sort of the value of the integral of the features that we release over time and maximizing that along the path.

Understood. Great color, David. Thanks so much. Appreciate it.

Thank you.

Thank you. Our next question comes from Dan Perlin with RBC Capital Markets. Please proceed.

Thanks. Good evening. Alan, I just wanted to make sure I heard you correctly. You said the May end cash management fee was running around 54 basis points, as it takes into consideration, I think current rate incentives then thinks the Fed funds kind of curve. Is that equivalent to the 58 basis points that you guys just posted or are we closer to the 56 basis points that you also referenced? I just want to make sure I fully appreciate what you're trying to tell us there.

Yeah. Hey, Dan. What I was referencing is, yes, what we would calculate May revenue on would have been a 54 basis points effective annualized cash fee rate. You have to recall, the color there was that the Fed funds dropped two basis points, on an EFFR neutral basis, had that not dropped on May 7th is when the first drop happened, it would have been a 56 basis points. If you were trying to compare the 58 basis points for the quarter, you would want to compare it to 56 since there was no EFFR drop during the quarter. That's on a more comparable basis. Yes, it's a comparable number in terms of its representation.

Got it. Yep. No, that's super helpful. Can you guys also just dovetailing on some of the last kind of questions that were asked, the payback period as you think about these incentives that you put in the market, obviously you've talked about clients coming in with higher balances, and to that extent, I would suspect they're fairly sticky. I'm just wondering what's the payback period, or is that even a measurement stick that you guys think about just at these levels? Thank you.

I think it's too early to get into specifics of how we would look at the payback period. Again, we're profitable on these clients that are coming in because a 25 basis point incentive on the cash management assets were still making.

Thirty

30-ish basis point fee on the cash that they're bringing on the platform. We're driving cross-product adoption, there's an investment advisory revenue piece associated with it. We're still profitable bringing these clients on board even with the incentive. As they're growing faster, both in cash and investing, we would expect that that pays back in the future, too early to get into specifics of that payback time.

Okay. Nope, that's great. It's clearly working. Okay. Thank you very much.

One moment for our next question, please. It comes from Ryan Tomasello with KBW. Please proceed.

Hi, everyone. This one's for Alan. I guess last quarter you provided some guardrails on near-term margin expectations. Any update you can provide there? I guess zooming out as you balance continued investment in the core brokerage platform and also newer initiatives like mortgage, how are you thinking about the path of margins over the next several years? Specifically, the key milestones or timing we should be watching for a return to positive operating leverage in the business. Thanks.

Ryan. I would say that nothing has really changed since what we provided last quarter which was before kind of really heavily investing in getting closer to rolling out home lending, we were in the kind of 45%-47% EBITDA margins. As we invest in that, we expected margins to get closer to 40%, and that seems to be the case here for the near term. It's hard to talk about future milestones and timing going forward because obviously the momentum we're going to have with home lending is somewhat rate dependent, as I'm sure you appreciate.

What we did and have been consistent in talking about is as that ramps up and does become steady state, it is a slightly lower margin profile, and it takes a while to get to kind of steady state in the way we look at it. We would expect margins to be lower than kind of what they were prior to Wealthfront Home Lending as we get in that steady state environment. What it does is it opens up a bunch of different things for Wealthfront.

One, it's a great dynamic macro hedge in low rate environment. It offers a large total addressable market. Even better, it helps us evolve with our clients and gives them an opportunity, again, to share the savings with them that we can get by doing a totally digital automated experience. There's obviously the trade-off of margin for growth. I think we're happy to make that trade.

Thanks for that. Then, I guess, switching gears more broadly on mortgage. Appreciate the commentary you gave in prepared remarks, can we just double-click on how that rollout and timeline to scaling the mortgage product is tracking relative to the expectations you set out several months ago? I guess any interesting operational learnings that have emerged so far or unexpected bottlenecks. I guess, David, it sounds like the use of the word deliberate and measured pace, I can appreciate just how tactical you're trying to be with getting that right. Just trying to understand how it's tracking relative to the initial guideposts you laid out. Thanks.

Yeah. I'll start, and then maybe Alan can chime in. I think I used some of the same terms last quarter, I'm not trying to portray a difference there. The environment's changed, right? Rates have gone up. To get the same level of learnings in a higher rate environment, you're going to see more purchase, less refi volume, and you're probably going to have to go a little bit broader a little bit earlier to continue having the volume in the funnel that you want to be able to evaluate the digital experience and the rate benefit that we're giving to clients. I think I mentioned in the prepared remarks that we did 25% month-over-month increase in rate lock volume in May as we started ramping up a little bit. We'll see how the sort of forward macro outlook evolves in the mortgage space.

We still think there is seasonality that we would expect to see in terms of demand for mortgages kind of industry-wide. We still see our clients purchasing homes and engaging with They're born short one unit of housing, and they need housing, and our clients are in the market. I think there's a lot of learnings that we have around specifics of the flow and our clients. As an example, being able to automate RSU income verification is something that's more important for our client base than it might be for the average mortgage borrower.

That's something that we're investing in and working on. Ultimately, the goal is to be able to, at scale, deliver a great digital experience and at least 50 basis point better rate than they would get on average. We feel confident in our ability to deliver those things, and we're going to see how the macro environment evolves and how our technology capacity evolves as we start to scale up a little bit more.

Yeah. Kind of on the timing. Obviously, when we came up with the timing, it was based on kind of expectations that included potential rate cuts in the forecast. Now there's potential for even a rate increase next year. It's going to be macro-dependent. As David mentioned, counterintuitively, as rates go up, we actually need to expand broader to get more data. That doesn't necessarily mean we get as much uptake because rates are so high and less people are refinancing. It's difficult call to see exactly where we're going to get on timing relative to what we thought, call it six to nine months ago. We're really happy with the progress we are making, and just the long-term nature of this investment and what it will do for our clients and our business.

Great. Thank you, guys.

Thank you. Our next question comes from the line of Jonathan Yarrow with Goldman Sachs. Please proceed.

Hi. Thanks for taking the question. This is Matthew in for James. Congratulations again on the strong results. Could you please contextualize for us the deposit pricing competition you're seeing in the market today, and how has that evolved over the course of the year and versus your expectations?

Yeah. I mean, the competitive environment for deposits has changed in the last few months. We've seen high-yield savings institutions, and more of the fintech players be a little bit more conservative on rates. I think that the thing to keep in mind that's important is when we look at our investor sentiment surveys, which we run monthly, we run them towards the end of the month. End of month February investment sentiment was quite good.

I would say there was a fair amount of uncertainty in the market. People weren't sure, but in general, it was a reasonably positive level of investment sentiment. Late March, we saw a really steep and sharp decline in investment sentiment. We saw part of the way recovery in April and a further recovery in May. When we think about the flows with cash and investing, it's primarily dominated by investor sentiment and changes in investor sentiment. We get some recurring flows into the investment platform through recurring deposits.

We get recurring flows into the cash platform from both recurring deposits and direct deposits. I would say we feel good about where our rate is. We'll see how effective Fed funds evolves over time. I would point folks to a speech that the New York Fed System Open Market Account manager gave a couple of weeks ago, talking about the supply of reserves in the system and how he's thinking about it, which I think is a useful framework to keep in mind. We've seen less competition from a rate perspective in the past few months.

Thank you. That's super helpful. Just kind of piggyback on that, how would you think about the cash outflow trends now that rate cuts are pretty much fully out of the forecast for 2026? Would you expect to see less attrition of cash balances? I know you mentioned very strong cross-product adoption.

Yeah, I don't know. I would definitely say it's a more favorable environment than one where cuts are happening and expected. I think going back to your previous question too, one of the thing that clients really like about the way we price is that it's predictable. We only change rates when the Fed does, except when we gave back the five basis points previously when rates went up, which is obviously a delightful moment.

Relative to the competition, which will change it kind of ad hoc and even within weeks of each other. Some of that I think helps us from a stability perspective, win business and retain business. Directly to your question, obviously in an environment where rates are at a pretty good level and not declining, we would expect to see good trends in cash. May was positive, as a reminder.

We do have the cross-product adoption incentive, so we are encouraging that. We're seeing really good results as we laid out in the prepared remarks. We've built the business to be resilient no matter which side of the house clients want to grow their wealth on. We think the environment is conducive for that currently, but obviously, market conditions can change.

Thank you so much.

Thank you. One moment for our next question. It comes from Alex Markgraff with KeyBanc Capital Markets. Please proceed.

Hey, guys. Thanks for taking my questions. Just a couple from me. First, just sort of on the client acquisition side of things, I'm curious if there's anything or how we should think about Wealthfront sort of showing up in consideration of private company liquidity events, just as we think about some higher profile or potential higher profile activity this year. Just a question there on the client acquisition side and kind of showing up in the right place around those. Two, just on the incentives, I'm clear the Direct Deposit Incentive. That's a sort of perpetual incentive applied to those accounts. Is there any off-ramp to those? Maybe just in that same vein, how are you thinking about maintaining that incentive, and when might you look to off-ramp and stop offering that?

We like the way the incentive is performing now. We think it provides a broader ecosystem adoption of Wealthfront. We like the investing flows and the cash flows that it's leading to. We have obviously the ability to change it in the future, but we're not looking to make changes to that incentive at the moment. On your first question, I would say that if you think about what Wealthfront's strategy historically and generally has been, it's to try to help people early in their financial journey, and then as they experience liquidity events or gain wealth over time through savings, we want to help them do the best job that we possibly can in growing their wealth.

The benefit we have is we have a number of clients who are clients of some of the companies that I suspect you're anticipating having liquidity events this year and next. Our goal is really to grow with them and to help them grow their wealth, both through investing and cash management as we continue to offer more features. We think we'll be able to facilitate growing their wealth for many decades to come. The strategy is quite different than what you might see from a traditional wealth manager trying to acquire clients at a point of wealth generation.

We're really seeking to acquire clients very early in their journey and then grow with them for the long term. I think we've had some success with the companies that you're thinking of. We'll see how that plays out. I would also just note, though, that most of these companies are going to have lockups that are going to impact the timing of even the possibility of liquidity reaching an outside account.

Yeah. I would add too, the nature of those companies. The employees working there who are most likely looking for an experience with their financial solutions, their financial advisor that looks more like what we offer rather than incumbents. I think we're well-positioned from that standpoint of having the products that we have and probably already have many clients, as David mentioned, working at those companies to evangelize us for others as that occurs. We feel good about the position we have there.

Got it. Thank you. I appreciate the thoughtful response.

Thank you. As I see no further questions in the queue, I will conclude the Q&A session and pass it back to David Fortunato for closing comments.

Thank you. I want to thank everyone for joining the call and for your continued interest in Wealthfront. We look forward to staying in touch and updating you on our progress in the months ahead. Thank you all, and have a great rest of your day.

This concludes our conference. Thank you for participating, and you may now disconnect.

Thank you for standing by, and welcome to Wealthfront Corporation's fourth quarter and fiscal year 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press *11 on your telephone. To remove yourself from the queue, you may press *11 again. I would now like to hand the call over to Matthew Moon, Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining us. Today to discuss Wealthfront Corporation's fourth quarter and full year fiscal 2026 financial results, reflecting the periods ending January 31, 2026. On the line are David Fortunato, our Chief Executive Officer and President, and Alan Imberman, our Chief Financial Officer and Treasurer. After prepared remarks, we will open the line for Q&A. During the course of today's call, we may make forward-looking statements as defined under applicable securities laws. Forward-looking statements are subject to risks and uncertainties, and the company can give no assurance that they will prove to be correct. To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that Wealthfront Corporation files with the Securities and Exchange Commission, including our most recent Form 10-Q. Our discussion today will include certain non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from GAAP measures. Reconciliations of non-GAAP financial measures to comparable GAAP measures can be found in our press release accompanying this call, which is posted to our Investor Relations website at ir.wealthfront.com. I will now turn the call over to David Fortunato.

Thank you, and good afternoon, everyone. Fiscal 2026 was another successful year in which Wealthfront Corporation continued to deliver on its long-term objective of becoming the leading tech-driven platform for digital natives to turn their savings into wealth. We believe we make the best practices of personal finance accessible at low fees through technology and intuitive and convenient through user-friendly design and automation. At scale, this drives high margins, allowing us to share savings with clients, creating and engendering trust, driving asset retention and low-cost word-of-mouth growth, which once again drives high margins. This flywheel enables us to offer feature enhancements such as our recent ongoing cash APY increases that I will describe in more detail later on, and more broadly, helps our clients save more on every paycheck, earn higher returns on their savings, and borrow at lower rates. We remain grounded in our belief that the best way to build deep, long-term client relationships is to continue to delight clients by offering them more value than anyone else and focusing on their long-term financial outcomes. This informs our product development strategy and keeps us focused on our roadmap regardless of short-term market conditions. At fiscal year-end, total platform assets grew 17% year over year to a record $94.1 billion, with investment advisory assets of $48.7 billion, up 29% year over year, and cash management assets of $45.4 billion, up 7% year over year. Funded clients ended the year at roughly 1,420,000, up 17% year over year, and funded accounts of roughly 1,840,000, up 16% year over year, reflecting 1.3 funded accounts per funded client. Total net deposits in the year ended January 31, 2026 were $6.7 billion, including $400 million in net outflows in the fourth quarter. Fourth quarter figures reflected a cash-to-invest transition environment that resulted in the second-best quarter of total investment advisory cross-product flows, including a second consecutive record quarter of net cross-account transfers from cash to invest. This helped drive annualized organic investment advisory growth to 11% in the quarter, the highest since the market enthusiasm post U.S. election in the quarter ended January 2025, with monthly annualized organic growth accelerating throughout the quarter, ending at 15% in January. Recall, annualized organic growth is calculated as total net deposits in a given period multiplied by an annualization factor based on actual day counts in that period, divided by prior period ending assets. As we will discuss further, cash management net flows began to normalize in mid-January, roughly four weeks after reducing the client rate on December 19 and prior to the five basis point increase to the client APY on January 30. Net outflows from cash management were $145 million in February, a significant improvement from the $840 million in net outflows in January. Since February 16, cumulative cash management net deposits have been positive. However, we expect withdrawals due to tax time seasonality to begin later this month and continue up until the April 15 federal tax deadline. On the product development side, we continue to accelerate our product velocity. For example, in the fourth quarter, we bolstered both our cash management and investment advisory offerings, enhanced interoperability between both, and began to offer early access to Wealthfront home lending. For cash management, we introduced automated dividend sweeps from investment advisory accounts to cash management accounts and increased daily withdrawal limits up to $1,000,000 for qualified clients. In December, we began a measured rollout of our proprietary Wealthfront Treasury Money Market Fund, or WLTX X. It offers an attractive after-tax yield alternative for clients and their cash, particularly for clients living in states with high income taxes, given the state tax exemption on U.S. Treasury interest income. As of February, prior to general availability, the money market fund had just over $85 million in AUM. For investment advisory, we expanded availability of fractional shares into automated investing accounts and automated bond portfolios, helping to reduce cash drag and tracking error relative to our target portfolios. We also introduced dividend reinvestment plans as well as a broader list of stocks and ETFs that can be traded in the stock investing account. We continue to see strong uptake, particularly among younger clients, in this investment account. In November, we launched early access to home lending starting in Colorado, and have since expanded to Texas and California, with a full rollout to these states as well as early access in additional states expected to come later this year. We believe we can use technology to deliver a better digital experience and a lower rate, and we are deliberately scaling at a measured pace in order to maximize learnings to optimize our long-term outcomes. We aim to provide our clients home mortgage rates at least 50 basis points better than the national average. While we are in early days, we are proud to have delivered on this objective on average in the states in which we operate today. Beyond new product initiatives, we have increased the base APY on all cash management accounts by five basis points to 3.3% on January 30. Over the course of the past several months, the effective federal funds rate gradually stabilized higher within its target range, allowing us to pass more savings along to our clients. We could have simply taken this benefit for ourselves, but consistent with our business model, we are constantly looking for ways to give back to our clients, deliver better financial outcomes, and build trust. Our focus for Wealthfront Cash is to offer the best cash account experience for young professional savers. In this vein, we launched an incentive in early March in which clients that direct deposit at least $1,000 per month who also have a funded investment account will receive an ongoing 25 basis point boost to their cash APY. We expect this incentive to deepen existing client relationships as well as drive cross-product adoption for those clients using one of the cash management or investment advisory accounts today. We also anticipate new clients to diversify into both of these account types more quickly. Closing with current trends, today we published February metrics. As discussed earlier, when looking at intramonth trends, cash management net outflows peaked in mid-January prior to our five basis point increase to the client base APY. Cash management net outflows significantly improved to only $145 million in February versus $840 million in January. Investment advisory net deposits were $416 million, implying an annualized organic growth rate of 11%. Total net deposits were therefore $271 million in February and, along with market appreciation, led us to another month-end record of total platform assets of $95.2 billion. In turbulent times like these, the time-tested performance of a low-cost diversified index portfolio with the added benefit of automated tax-loss harvesting becomes more apparent. Aggregate investment account returns, most notably our automated investment account, benefited in January and February from the relative outperformance of international equities, contributing to a 2.8% month-over-month growth in January, and 1.7% month-over-month growth in February. Crucially, this performance stands in stark contrast to the returns of speculative asset classes that often falter when market conditions tighten. While others chase fads, our automated investing account is engineered to mitigate volatility and maximize after-tax outcomes. We believe the value of this product is even greater when you consider the strong year-to-date tax losses we have harvested for our clients. February tax-loss harvesting dollars were the highest since the widespread market volatility realized immediately before, during, and after Liberation Day last year. With that, I will now turn the call over to Alan Imberman to go over the financials.

Thanks, David. Starting with the income statement and a high-level overview for the year. Revenue for fiscal 2026 reached a record $365 million, up 18% year over year. Adjusted EBITDA for fiscal 2026 also hit a new record of $170.7 million, up 20% year over year, reflecting an adjusted EBITDA margin of 47%, up one percentage point year over year. Moving now to the fourth quarter, revenue came in at a quarterly record of $96.1 million, up 16% year over year. Cash management revenue was $69.7 million, up 12% year over year due to both higher average cash management balances measured as the average of beginning and end of quarter figures and a higher annualized fee rate. The average cash management balance in the fourth quarter was $46.2 billion, up 10% year over year, and the annualized cash management fee rate was 60 basis points, up one basis point year over year. When the Fed reduces the Fed funds target rate, we typically wait until the Friday of the following week to reduce the APY we offer our clients. This creates temporary fee compression because the interest rate we receive from banks reprices lower immediately while the interest rate we pay to clients remains constant for a one-week grace period. Additionally, in a declining rate environment, the fee rate is negatively impacted by the inherent mathematical impact of converting annual percentage rates (APR) to annual percentage yields (APY). The inverse of this is true in an increasing rate environment. As David noted, we launched a new incentive in early March in which clients who direct deposit at least $1,000 per month and also have a funded investment account will receive an ongoing cash yield increase of 25 basis points. As a result of both the direct deposit incentive and the five basis points passed along to clients at the end of January, we now expect our first quarter annualized cash management fee rate to be in the range of 57 to 58 basis points. Because April is tax season and our clients are net cash taxpayers, we anticipate significant seasonal cash management net outflows to begin in March and continue up until the April 15 federal tax filing deadline. For context, net cash management outflows in April 2025 were $537 million, and we would expect this figure to be larger this year given the increase in total cash management assets. It may seem counterintuitive, but we are delighted to see tax-related outflows because it reflects the highly attractive financial profile of our clients and also means our clients are comfortable using the cash account to meet near-term liquidity needs, indicating use of the account as a primary operating account that generally gets replenished over time and are typically stickier over the long run. Investment advisory revenue was $25.8 million, up 31% year over year, and surpassed $100 million in annualized revenue for the first time, due primarily to a 30% year over year increase in average investment advisory balances to $47.3 billion. Our annualized investment advisory fee rate was roughly flat at 22 basis points versus the same period last year. Asset growth was driven by both strong markets and net deposits over the trailing twelve months, with organic net deposit growth accelerating throughout the quarter, ending at 15% annualized growth in January. Net cross-account transfer from cash to invest in the quarter set a new record for the second consecutive quarter, reflecting the compelling combination of a broad suite of investment products, overarching platform incentives, and targeted lifecycle marketing campaigns currently in place. Gross profit came in at a quarterly record of $86.6 million, up 17% year over year, reflecting a gross profit margin of 90%. Total GAAP expenses of $310.7 million included $248.3 million in stock-based compensation expense, of which $239 million reflected dual-trigger equity award expense recognized in connection with our IPO. GAAP expenses also included $5.3 million in employer taxes related to these dual-trigger equity awards. Adjusted operating expenses, that is, expenses excluding share-based compensation and employer taxes due to IPO-related equity awards, were $57.1 million, up 15% year over year due primarily to higher product development and general and administrative expense, partially offset by lower marketing expense. Adjusted EBITDA of $44.2 million was up 22% year over year and reflected an adjusted EBITDA margin of 46%, up two percentage points year over year. As we continue to invest in incentives and scale home lending, we expect adjusted EBITDA margins to decline sequentially but remain above 40% for the first fiscal quarter 2027. We continue to demonstrate significant operational and financial discipline, delivering a Rule of 40 metric of 62 for the fourth quarter. This is our fourteenth consecutive quarter, or more than three years, exceeding the Rule of 40 and underscores a business model that has successfully and consistently balanced robust top-line growth with the structural efficiencies of our automated platform. GAAP diluted net income was negative $134.8 million and GAAP diluted earnings per share was negative $1.31, both of which include the one-time impact of dual-trigger equity awards in connection with our IPO of $239 million. We believe that our adjusted EBITDA is a strong proxy for cash flow. For the fourth quarter, net cash provided by operating activities was $33.3 million and free cash flow was $33 million. This results in a free cash flow conversion ratio, that is free cash flow as a percentage of adjusted EBITDA, of 75%. January, however, is a seasonally lower free cash flow period as we pay out the majority of our accrued annual cash bonuses to our employees in that period. For the fiscal year, net cash provided by operating activities was $152.2 million and free cash flow was $151.1 million. This resulted in an annual free cash flow conversion ratio of 88%. Note, both quarterly and annual free cash flow figures are not adjusted for IPO-related expenses; therefore, conversion ratios are lower than they otherwise would have been had the IPO not occurred. Driven primarily by this robust free cash flow generation over the course of the year and over $130 million in net cash proceeds raised in our IPO in December, we continued to strengthen our debt-free balance sheet, ending the period with cash and cash equivalents of $440.8 million. At quarter end, we had roughly 186.5 million diluted shares outstanding. In March, we received board authorization to implement $100 million in share repurchases. We believe repurchasing our stock is attractive at current levels given our robust free cash flow generation, our debt-free capital structure, as well as the multi-decade opportunity to compound wealth with new and existing clients. Over the long term, our excess capital priorities are: invest in organic growth, including infrastructure and automation while also comfortably exceeding minimum capital requirements; evaluate opportunities to repurchase shares; and assess M&A with a preference to build versus buy. Any remaining capital would be added to our surplus reserves in order to bolster resilience and durability. Regarding February metrics, total platform assets ended at another month-end record of $95.2 billion, consisting of $50.0 billion in investment advisory assets, and $45.2 billion in cash management assets. Total net deposits were $271 million, and recall, February only has 28 days in the month. Investment advisory net deposits were $416 million, reflecting organic growth of 11% annualized. We continue to successfully drive cash-to-invest flows, bringing asset-weighted cross-product adoption, that is, assets held by clients with both cash management and investment advisory accounts, to roughly 61.5% at February, up over one percentage point since December. Cash management net flows began to normalize in mid-January, four weeks after reducing the client rate on December 19, and prior to the five basis point increase to the client APY on January 30. Net outflows from cash management were $145 million in February, a significant improvement from the $840 million in net outflows in January. Since February 16, cumulative cash management net deposits have been positive. However, we expect withdrawals due to tax time seasonality to begin later this month and to continue up until the April 15 federal tax deadline. In closing, our business is designed to be aligned with the interest of our clients. Simply put, we succeed only when they do. We believe that as long as we continue to deliver products that truly delight our clients, they will engage more broadly with us, entrust us with more of their wealth, and recommend our platform to their friends, family, and coworkers. We are deeply committed to this long-term journey alongside them. With that, we will now open for questions.

Thank you. To ask a question, you will need to press *11 on your telephone. To remove yourself from the queue, you may press *11 again. You will be limited to one question and one follow-up to allow everyone the opportunity to participate. Our first question comes from the line of Ken Worthington of JPMorgan. Your question please, Ken.

Hi. Good afternoon, and thanks for taking my question. I want to dig further into the rollout of mortgages and see how that is going. So what kind of reception are you getting from your customers in Colorado, where that offering is more seasoned? And can you see, based on the transfer of assets to title companies, how your penetration of eligible customers is looking thus far?

Hey, Ken. How is it going? Yeah. So we are progressing, I think, well. The thing that we are optimizing for—we talked a little bit in the prepared remarks—is less about directly trying to capture all of the volume that we reasonably can in Colorado and really maximizing the learning that we have both with our infrastructure and with the client experience. So as we have launched first in Colorado with the early access period and then in Texas and California, we are really focused on making sure that the experience that we are delivering to clients is good. There are things that we have to improve and we are working on. We have already rolled out a bunch of improvements with more to come. On the rate basis, we feel very good about underpromising and overdelivering on the quality of rate we are giving folks. We are still seeing significant home volume across the country. I think the stat that I saw was more than $400 million of wires to escrow and title companies in our Q4 went off the platform, which obviously is a significant chunk of the outflows that we saw. We have a bunch of things that we need to improve on the digital experience. We are making quick progress, but it is a huge area of focus for us. As we continue to expand the early access period, the real constraint that we have is that the experience that we are offering to clients is one that we feel good about, and we feel the clients will feel good about for the long term. We are not trying to build a transactional mortgage experience. We are trying to build a long-term relationship with clients, of which mortgages is just one step.

Perfect. And then maybe to follow up, same topic. How do you see the ramp and the rollout to other states and the further penetration in existing states? How does that look as you move through the rest of the year? Is this really kind of an experimental year where you would not expect things to really ramp; it is just sort of getting the infrastructure? Or do you expect things to really ramp as we move throughout the year and as you get more comfortable with the offering?

So we certainly expect to go general availability in Colorado first. That will happen sometime this year. I would expect that we go general availability in Texas and California at some point this year. And I would expect that we launch early access periods in additional states. Exactly what percentage of our client base will be covered by general availability, I am less sure of. Our ability to roll out automation features and balance scaling headcount versus scaling through technology is the kind of core dance that we are doing, where we are trying to really scale with technology and limit headcount growth where needed, except where we are very confident in the volumes that we are seeing, and that is a credible strategy to be able to build sustainable volume over time.

Thank you.

Our next question comes from the line of Ryan Tomasello of KBW. Your question, please, Ryan.

Hi, everyone. Thanks for taking the questions. Regarding the cash management fee rate guide for 1Q, I believe you said 57 to 58 bps. Is that a reasonable baseline for the remainder of the year, or how should we think about the potential for additional compression there to the extent these incentives you are offering continue to see strong uptake?

Hey, Ryan. Thanks. Yeah. The one thing I would say is the competitive environment has certainly evolved a bit over the last six months. And what we have seen is after the five basis point change and the direct deposit incentive, I think we feel much better about where we are in the competitive environment, and we are seeing that with the transition in cash net flows. As for how we think about the fee rate going forward, I will let Alan take that.

Yeah, Ryan. So I would say the 57 to 58 is just the first quarter guide. It will really depend on the uptake as to how the rest of the year goes. The thing we like about incentives such as the direct deposit incentive is that we will only have to pay the extra rate when people give us more money or take on this additional incentive by performing the action of direct deposit and funding an investment account. And so as more people adopt it, we do expect to see potentially further degradation in the fee rate, but that would also signal that we have more clients building deeper relationships across the platform with us. And so that is the balance we are looking for there.

Okay. Appreciate that. And then on the account growth, is it possible to isolate the specific trends within the investment advisory side of the business? Obviously, the trends on net deposit organic growth have been quite positive, but I would assume that there are also underlying positive trends on just the actual account growth side within investment advisory. Any color you can provide there?

Yeah. I mean, the investment account growth, as cash-only clients add investment accounts, is a key focus for us in any transition environment. And it has been probably the most significant focus inside of the company over the past three or four months. We focus on the flows because that is what ultimately leads to asset growth and, therefore, revenue growth because of our monetization strategy. But the way that we achieve that flow growth is both growing with clients over the long term and getting more clients to adopt investment products. It is too early to know exactly what the impact will be from the direct deposit incentive that we are trying. I think we are looking forward to being able to talk more about that as we get additional data in, but we have been pleased with the early response. Obviously, direct deposit takes some time to come through. There is a little bit of a lag. So we have not had a direct deposit cycle since that incentive launched. But the past incentives that we have run around investment account adoption, along with the macro environment in January and February being more conducive to investment, have helped our focus on investment cross-product adoption and new client investment growth as well.

Our next question comes from the line of Devin Ryan of Citizens Bank. Please go ahead, Devin.

Thank you. Hi, David. Hi, Alan. How are you?

Doing well. Thank you.

Good. Question, another one just kind of cash account. And just some of the outflows kind of late last year, early this year, do you have a sense of whether that money was going toward other online banks paying higher rates, or was it going to brokerages or maybe just, you know, bill pay without kind of gross flows? I would love to get a sense of that. And then do you have a sense of the remaining balances that are maybe more pure rate chasers? And how much of that is remaining? I appreciate that is probably difficult to quantify, but would love to just get some thoughts on that and some of the behavior that you did see kind of late last year into early this year.

Sure. I am happy to give a high-level answer, and then if Alan has anything he wants to add, he can chime in. So what we saw, I think, is broadly consistent with what we had discussed previously, and that is that as rate cuts occur, the larger number of rate cuts that occur in consecutive succession leads to more folks evaluating what they are doing with their cash. So we had three cuts in a row. It takes several weeks for cash net flow activity to normalize post Fed rate cut, which I think we had talked about before. We normally have a really good idea sort of four to six weeks after a rate cut has gone through. One of the interesting things that we saw in January was both: January is a seasonal high period for investing, which I think amplified some of our desire to drive additional cash-to-invest adoption, because January is a great period for folks to reevaluate their finances and think about opening investment accounts. And so we did lean into that in January, and I think some of what you see in the January numbers is that. The other thing I would point out is that the gross versus net distinction in cash flows, especially because of the liquidity features that we offer—free wires, free instant transfers, the ability to send money to escrow and title companies to buy a home—we do a lot of gross flows for cash management. We did a calculation where we look at the recapture rate of those gross flows by client in the quarter, and we are recapturing a majority of the gross withdrawals. That is consistent with what we have seen in prior periods, that we saw from clients in our Q4, and we think it shows the value of the cash management account really sustaining even as clients reach goals. Maybe they are purchasing a house or putting a down payment down. Maybe they are buying a car. They come back to the account, and we do recapture a significant chunk of those assets. I think the sort of high-level question that you asked about what are folks doing with their money is: there are folks that are doing some of all of the things that you described with their money. It is our job to be the best place for our clients to invest for the long term, the best place to save for the long term. We want to deliver the best mortgage experience that they can get anywhere as well. It will take us time to do some of those things, especially the mortgage, but that is really what the focus of the business is—leading with product and delivering the best product and the best value to our clients across their broad financial needs.

Okay. Great detail. Thank you so much. I guess a follow-up here on the repurchase authorization, $100 million buyback. Can you talk a little bit about expectations, pacing, and intent there? I think it is a strong signal. Obviously, the company has a lot of liquidity here, so in theory, even potentially more behind that. So just love to get a sense of how much is signal versus intent to actually step in and buy shares here down from the IPO price?

Yeah. Hey, Devin. It is Alan. What I would say is that we think the shares are extremely attractive at the current price. We are in a position, as you mentioned, to have a very strong balance sheet and free cash flow generation such that we can make this investment, and we will compare our ability and our willingness to repurchase against, obviously, other opportunities that we have to invest in. But we do think that we will be purchasers of our shares, especially at the current levels.

Thank you. Our next question comes from the line of Daniel Perlin of RBC Capital Markets. Your question please, Dan.

Thanks. Good evening, everyone. I guess I just wanted to kind of circle back a little bit on the home lending side. And I guess the broader context is, I heard everything you said in your prepared remarks, but how do you think that rollout, product reception, and expectations as you think about the ensuing year are going relative to when you kind of addressed investors around the IPO? I mean, it sounds pretty consistent, but it also sounds like there are some nuanced differences maybe. So I just want to make sure I understand that. Thank you.

Sure. So I think we know a lot more about the areas that we need to improve to deliver the best digital experience that we can to clients. And we are putting in focused work on those areas and gradually expanding as we go. We understand a lot more about the operational challenges and where we need to invest to drive operational efficiency so that we can do so as efficiently as possible with as digital a back-end experience as we can. The result of those things is we want to build, like we have with cash and like we have with investments, a sustained low-cost advantage in being able to deliver the products so that we are able to share the savings with clients and get them the best financial outcome. So there is a lot more that we understand with the volume of loans that we have done so far. We will continue to learn and prioritize both the operational efficiency and digital experience wins as we move along, continuing to let people off the early access list and go general availability in Colorado first. I think our understanding and our learnings are generally consistent with what we have communicated in the past. We obviously have a lot more detail now from operating in the space, operating in more states, and doing more loans than we have in the past.

Yep. That is great. Just a quick follow-up. So it was really good to see the net deposits turned positive in February. And this pivot, as you guys had telegraphed from cash management to investment advisory, was kind of taking place. I think the question that I have is, you have this weird dynamic right now where the environment may or may not produce lower rates in the near term. It might be sustained for longer. I am just wondering how you guys think about positioning yourselves maybe more in the near term in an environment where that might be the case. It might be an unfair question because it is impossible to answer, but it does feel like there is a lot more volatility around expectations for rates. So just how you are posturing maybe as we go through the next, I guess, couple of quarters. Thank you so much.

Yep. So I think we feel good about our competitive positioning after the five basis point change and the 25 basis point direct deposit incentive. Obviously, we do not know what the market is going to do in the future. We do not know what rates are going to do in the future. We do think that we are well positioned from the investment side because of our focus on global diversification. That has put us in a good position over the last few months, and what we have really seen resonating with clients is in uncertain environments, investing with global diversification is a real selling point. We sort of do not think about positioning ourselves based on what is going to happen over the next few months, but we feel good about our position because of the investments we have made over the last few years in cash, investment, and home lending also, that if rates come down, we feel like we are in a good position to help clients continue to invest or invest more. We feel like we are in a good position to be able to help them buy homes that have become more affordable at lower interest rates while also helping them continue to save for the long term and get access to liquidity as needed using tax-advantaged tools like the Wealthfront money market fund. As we have continued to build out our offering, our goal is really to help clients across the broadest range of financial situations be able to put their savings and investments to work. And that has been the focus, and we feel good about the position because of the diversity. We cannot predict the future, but we can prepare for it, and that is what we have done.

Thank you. Our next question comes from the line of James Jarrow of Goldman Sachs. Your question please, James.

Good afternoon, and thanks for taking the question. Could you just update us on the success of the match programs in the invest business so far? How much has this been driving the flows in that side of the business? And perhaps if you could just also comment on the ROIs there and how you structure that to ensure strong ROIs.

Hey, James. So I would say we are constantly experimenting with incentives. The most successful incentives that we have done for cash-to-invest adoption have actually not been the deposit matches. It has been other types of incentives that we have run to encourage cash-to-invest adoption. We are happy with the initial response to the direct deposit incentive having driven a fair amount of investment account opening. It is still early, and so we will have to see how that evolves over time. We will have to see how that evolves with new clients and if the cross-product adoption rate early in the client tenure improves as we expect it to. I think, generally, our incentives have been successful with the second-best quarter in our history at cross-product flows of cash to invest and a second record quarter of net cross-account transfers from cash to invest. But I do not think that we have overly focused on match as the driver of those. We have looked at a variety of incentives and are pursuing the ones that we feel deliver the best overall outcome to the company and to our clients.

Okay. Thank you so much. That is super helpful. I just wanted to ask a bigger-picture one. So let us say we get to a terminal Fed funds of roughly 3%, which obviously there is uncertainty as to whether we will get there. But how would you think about the right way to model the mix of your client assets across cash versus investment advisory? In other words, what percentage of client assets would you expect to be cash versus investment advisory?

Hey, James. It is Alan here. Yeah. I think it is a difficult question in the sense that there is more going on than just the level of rates. Clients are accumulating more wealth, and as we have shown in our prospectus, as clients obtain a certain level of cash, they start putting incremental dollars to work and investing, and so you start to see the investment account, which grows faster as well, really continue to grow. And that is what we have seen over the past few quarters. And did not discuss this last time, but investment advisory assets have now overtaken cash assets pretty clearly. And so when we are modeling it, I think it depends on, as well as younger clients coming in who start with cash because they are early in the journey in savings. So I think you have to have more variables than just the level of rates. I think you have to have variables around clients that are coming in and then our existing clients and their behavior. And, again, we have control over that in some of the incentives that we offer. And so that is probably how I would think about it.

Okay. Thanks a lot.

Thank you.

Our next question comes from the line of Alexander Markgraff of KBW, KBCM. Your question, Alex.

Thanks. Hey, David, Alan, Matt. Thanks for the question. A couple here. I guess just first, David, from a product standpoint, if I look at the releases in 2025, pretty busy. Just sort of curious how you think about calendar 2026 or fiscal 2027 using the sort of digestion year versus carry-forward of velocity framework? And then, Alan, just as a follow-on to that, maybe just some comments on spend priorities in the context of David's comments would be helpful. Thank you.

Hey, Alex. I guess our focus as a product development and technical organization is to be able to build automated products so that we can continue to focus most of our technical talent on delivering new products to clients and improving our existing products. We have a lot left to build. I would say that one of the things that we have seen over the past couple of years is that our roadmap only ever gets longer of things that we want to focus on and we want to get out to our clients. As we continue to build a deeper understanding of our clients' financial situations through both the qualitative and quantitative research that we do into their financial lives, we continue to have new ideas and be excited about those ideas. And so the focus that we have really is on prioritizing and focusing on the things that we think will make the biggest impact to our clients' financial outcomes and have the biggest impact on our business, but we really want to continue to accelerate product velocity, if anything, to continue to get products out to clients and improve the existing product experience so that Wealthfront Corporation is delivering the best value of any provider in the space.

Yeah. What I would say to add to that in terms of the spend, as I mentioned in the prepared remarks, the investment in home lending as well as our incentives are really where we are putting a lot of resources. We continue to work on incentives and really strengthening the core as well while we invest in home lending. And so that has not changed. We continually look at our business model flywheel and kind of prioritize around that. And so we are continually trying to figure out ways to automate to generate savings, share those savings with clients to help their financial outcomes, build that trust, get them to refer us, and grow with word-of-mouth. And some of that is used through incentives. And so we will continue to use that as our framework for how we invest.

Awesome. I appreciate that. And then, Alan, maybe just a quick follow-up, more sort of model mechanics question on the money market fund. Understanding there are a lot of factors that determine the ramp of that, but just as we see that sort of mix into the model, just a reminder on how that sort of affects the revenue lines would be helpful.

Yeah. So it will be inside of cash management. We are in a fee waiver period right now. I think starting March 1, the fee is a quarter of a percent on the management fee. And then in terms of, as David mentioned, it offers a really good after-tax yield for folks in states with high income tax. And so we will have to see in terms of the growth once we roll it out to general availability. But that is where it will fit, and that is the monetization on the product.

Awesome. Thank you both. Appreciate it.

Please press *11 on your telephone to ask a question. And as there are no further questions in queue, I would now like to turn the conference back to David Fortunato for closing remarks. Sir?

Thank you. I want to thank everyone for joining the call and for your continued interest in Wealthfront Corporation. We look forward to staying in touch and updating you on our progress in the months ahead. Thanks all.

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