Company: WLTH
Filing Date: 2025-08-22
Form Type: DRS/A
Source: 0001628279-25-000564
Chunk: 141

Company: WEALTHFRONT CORP
Filing Date: 2025-08-22
Form: DRS/A
Chunk 141
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 become more popular. In weaker macroeconomic environments with higher interest rates, our cash management products become more popular. When a client initially funds

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either a cash management or investment advisory account 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 56% on an asset basis and 28% on a client basis. 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 43%, our net income margin was 36% and 63%, and our Adjusted EBITDA was 48% and 46%, 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 14 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. Each program bank pays us a rate that is equal to a major interest rate benchmark (e.g., the Fed Funds Rate or Secured Overnight Financing Rate (“SOFR”)) plus a separate fixed negotiated fee that the applicable program bank is willing to pay on clients’ cash that is swept to them. The rates offered by these program banks are variable and are impacted by and may change in response to market demand for cash assets and other economic forces. In accordance with standard industry practice, the fees we receive