WLTH Wealthfront Corporation

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Executive Summary

Wealthfront reported Q1 FY2027 GAAP diluted EPS of $0.07, a steep 929.8% miss vs the $0.16 consensus, though the Street-tracked number is closer to the GAAP EPS history (which was -$1.31 last quarter). Revenue of $90.5M beat the $91.8M consensus by a slight -1.4% miss. The headline miss is largely driven by a surge in stock-based compensation ($17.1M vs $1.9M) tied to IPO-related dual-trigger awards, masking otherwise healthy operational metrics: Investment Advisory assets grew 39% YoY to $51.7B, Total Platform Assets hit a record $96.6B, and adjusted free cash flow of $42.7M supported $27M in share repurchases. The filing is bearish due to the GAAP EPS miss and declining net income, but the underlying business trends (asset growth, cash flow, buyback) provide some offset.

Key Financial Metrics

Actionable Insight

Key Facts

• GAAP diluted EPS of $0.07 missed consensus of $0.16 by -56.3% ($0.09 miss); consensus-based surprise is -56.3%, but the Street-quoted EPS history shows the metric is highly volatile (prior quarter was -$1.31).
• Total revenue of $90.5M increased 7% YoY but missed the $91.8M consensus by 1.4%.
• Net income fell 51% YoY to $12.8M from $25.9M, driven by a 9x increase in stock-based compensation ($17.1M vs $1.9M) due to IPO dual-trigger awards.
• Investment Advisory assets surged 39% YoY to $51.7B; Cash Management assets grew only 3% to $44.9B.
• Total Platform Assets reached a record $96.6B, up 19% YoY, with net deposits of $0.6B in the quarter.
• Adjusted free cash flow was $42.7M, up 1% YoY, and the company repurchased over 3 million shares for $27M at an average price of $8.66.
• Funded clients grew 15% YoY to 1.46 million; funded accounts also grew 15% to 1.90 million.

Financial Impact

GAAP diluted EPS fell 61% YoY from $0.18 to $0.07, driving a ~$0.09 miss vs consensus. Stock-based compensation inflated expenses by $15.2M YoY. Operational cash flow fell 41% but adjusted FCF held flat at $42.7M due to working capital changes.

Risk Factors

• Guidance was not provided; lack of forward visibility increases uncertainty.
• Cash management revenue declined 1.4% YoY, and net deposits in that segment were negative (-$477M).
• Stock-based compensation will remain elevated due to IPO awards, pressuring GAAP profitability.
• The Street-consensus EPS of $0.09 for next quarter suggests expectations for a sharp sequential recovery; if SBC continues at current levels, another miss is possible.

Market Snapshot

Documents Analyzed

This report is based on 1 press release from GlobeNewswire.

US Market Status