Wealthfront reported its fiscal second-quarter 2027 results, showing total platform assets of $99 billion at quarter-end, up 12% year-over-year. The firm surpassed $100 billion in total platform assets in August 2026. Investment advisory assets reached $54.1 billion, up 30% YoY, while cash management assets were $44.9 billion, down 4% YoY.
Total revenue for the quarter was $91.9 million, up 1% YoY. Investment advisory revenue was $28.8 million, up 31% YoY, driven by 35% higher average balances in advisory accounts. Cash management revenue was $61.8 million, down 10% YoY, with an annualized fee rate of 55 basis points, down 6 basis points YoY.
Gross profit was $81.1 million, down 1% YoY, with a gross margin of 88%, compressing by ~100 basis points. Adjusted operating expenses were $58.7 million, up 17% YoY. Adjusted EBITDA was $38.1 million, down 15% YoY, with a margin of 41%, compressing by 8 percentage points. The Rule of 40 score remained at 42 percentage points for the 16th consecutive quarter.
GAAP diluted net income was $17.6 million, or $0.10 per share. Stock-based compensation was $16.4 million in Q2 2027, compared to $1.6 million in the year-ago quarter. The Q4 2026 comparison period loss was $134.8 million, driven by $248.3 million in IPO-related stock compensation and employer payroll taxes. A one-time employer payroll tax expense of between $3 million to $3.5 million is expected in the next quarter.
Net cash from operating activities was $47.3 million, with adjusted free cash flow of $28.3 million. Corporate cash and cash equivalents were $453.3 million, with an untapped revolving credit facility of $250 million. Total available liquidity was $703.3 million. Share repurchases totaled approximately $30 million, acquiring 3.3 million shares in the open market during the quarter.
Total net inflows were $1.1 billion in Q2 2027, with investment advisory net inflows of $1.1 billion and cash management net withdrawals of $26 million, an improvement from the $477 million outflow in the prior quarter. Funded accounts were 1.97 million at quarter-end, up 15% YoY, and funded clients were 1.51 million, up 14% YoY. Account adoption was 1.3 funded accounts per funded client, with approximately 7,500 new account openings tied to promotional incentives during the quarter.
Wealthfront Home Lending expanded to Texas and California, targeting mortgage rates at least 50 basis points below national averages. Upcoming expansions are planned for Washington, Florida, Illinois, and Oregon. The firm's full brokerage account is scheduled to launch in October 2026. Management stated a preference for a 'build versus buy' strategy regarding potential mergers and acquisitions, with CEO David Fortunato emphasizing a focus on 'long-term client relationships' rather than 'short-term trading behavior'.
