Company: WLTH
Filing Date: 2025-06-18
Form Type: DRS
Source: 0001628279-25-000372
Chunk: 134

Company: WEALTHFRONT CORP
Filing Date: 2025-06-18
Form: DRS
Chunk 134
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 and subsequently funds the other type of account, we define this as cross product adoption. As of January 31, 2025, our cross product adoption rate was 28%. We also benefit from our clients’ commitment to passive investing, which reduces withdrawals during market downturns, further stabilizing our growth.

Software-Driven, Automated Services Lead to High Margins for Us and More Value for Our Clients

Our focus on automation streamlines service delivery, requiring far fewer employees than traditional approaches. Nearly half of our employees as of January 31, 2025 were software engineers, and we operate without salespeople or financial advisors, which our clients prefer. Consequently, our software-driven service model generates a better user experience and higher operating margins that can be shared with clients and reinvested into product improvement and platform development.

In fiscal 2024 and fiscal 2025, our revenue growth was 153% and 42%, our net income margin was 36% and 63%, and our Adjusted EBITDA was 46% and 44%, respectively. Net income for fiscal 2025 included a total tax benefit for the year of $55.2 million due to the one-time deferred tax benefit of $80.2 million, resulting primarily from the release of the full valuation allowance on our historical net deferred tax assets. This combination of growth and profitability demonstrates our ability to grow efficiently with high margins in any economic environment.

#### Our Revenue Model
We generate revenue primarily from our cash management and investment advisory products.

Cash Management

We primarily generate revenue from our cash management products from cash account fees which we earn from the program banks (FDIC-insured banks to which we sweep our clients’ cash) in our cash sweep program. By passing along the wholesale interest rates paid by program banks, we are able to offer our clients a stable and more attractive rate than might be accessed elsewhere.

In addition to a high interest rate, our clients have access to typical checking features including debit card, early direct deposit, bill pay, and mobile check services, which we enable through our bank partner and program banks. Unlike most financial institutions and FinTechs that charge their clients fees or subscriptions for high APY savings and checking accounts, our cash management account provides clients with a transparent, no cost experience that combines the typical features of a checking and savings account (e.g., debit card, early direct deposit, bill pay and mobile check deposit services).

Our fee structure reflects our belief that clients should keep more of their money working for them—not lost