SecProbe.io

August 13, 2025
David Fortunato
Chief Executive Officer
Wealthfront Corporation
261 Hamilton Avenue
Palo Alto, CA 94301
Re:Wealthfront Corporation
Amendment No. 1 to
Draft Registration Statement on Form S-1
Submitted on July 28, 2025
CIK No. 0001524566
Dear David Fortunato:
            We have reviewed your amended draft registration statement and have the following
comments.
            Please respond to this letter by providing the requested information and either
submitting an amended draft registration statement or publicly filing your registration
statement and non-public draft submissions on EDGAR. If you do not believe a comment
applies to your facts and circumstances or do not believe an amendment is appropriate, please
tell us why in your response.
            After reviewing the information you provide in response to this letter and your
amended draft registration statement or filed registration statement, we may have additional
comments. Unless we note otherwise, any references to prior comments are to comments in
our July 16, 2025 letter.
Amendment No. 1 to Draft Registration on Form S-1
Prospectus Summary
Our Clients
Our Client Have Long-Term, page 8
1.We note your response to prior comment 3. Please discuss in more detail how Covid
19 and other factors caused your cash assets to drop to almost zero from 2018 to 2019
and then remain that way until 2022, before increasing again, or advise.

August 13, 2025
Page 2
Our Clients Have Evolving Financial Needs, page 9
2.We note the response to prior comment 4. Please revise to address how the respective
taxes for each of the individual clients is determined in the determination of “net-of-
fee after tax returns.”
Diverse Financial Products, page 10
3.We note your response to prior comment 9. You state on page 11 that you "sweep
clients’ cash deposits across a large number of program banks." We also note in your
response that you say the deposits are placed in the program banks according to an
allocation model run by your sweep provider. Please explain to us if the sweep
provider is a third party, or if the sweep provider is part of your business. Please also
explain if you have contractual agreements with the specific program banks, or if the
sweep provider does. Disclose if there are any agreements pertaining to the revenue
you will make off of the sweeping programs, or any agreements with you customers
as to what portion of the interest rate you pass along to your customers. Describe to us
how the program banks are chosen and frequency with which the banks that you
sweep clients cash into change, and typically how long the cash stays deposited in a
given bank.  Also please explain to us why you do not identify the banks that you
"sweep a greater percentage of [y]our clients’ cash account assets into" in your filing.
Please provide risk factor disclosure for any material risks associated with a
concentration of deposits at certain banks, or advise.  Please also clarify if any of the
customer's cash that is in cash management with you is considered deposited with you
at times, and not with a bank.
Our Platform
Borrowing and Lending, page 11
4.We note the disclosure that you offer clients a way to borrow against their securities
and earn income by lending securities they own. Please clarify if the borrowing and
earning is in cash amounts, or other assets.
Our Business Model Drives Our Greatest Advantage, page 14
5.We note your disclosure on page 16 that you had an annual client retention rate of
over 95% for each of fiscal year 2024 and fiscal 2025. Please revise your disclosure to
clarify how such retention rate is determined, particularly in light of the fact that a
client can still be considered a "Funded Client" even if their account has a zero
balance.
Risk Factors
We are directly and indirectly exposed to fluctuations in interest rates, page 38
6.We note your response to prior comment 13 and your response that the current interest
rate environment does not impose any particular risk or have a material impact on
your business. However, on page 108, you disclose that in June 2024, you reduced the
client borrowing rate for your portfolio line of credit products, which caused your net
interest margin revenue to decline in the fiscal year ended January 31, 2025,
compared to the prior year. Please reconcile this apparent inconsistency, or advise.

August 13, 2025
Page 3
Our cash management products and services, page 46
7.We note your disclosure that you are not a bank and do not provide banking services
or products, but you do offer some cash management services related to your bank
partnerships. Please disclose in an appropriate place in the document how you clarify
this to customers, including if they are made aware of the specific banking partners
their services are offered through. Please also discuss if and how you make money
through these cash management services.
Risks Related to Our Cash Management Products and Services
Our cash management products and services, page 46
8.We note your response to prior comment 14 and your statement that, in order to
facilitate your banking partners' compliance with federal banking agencies, you
commit to cooperate in the examination of such partners by federal banking agencies.
However, please also clarify whether you directly are, or may be,subject to regulatory
oversight by the primary regulator of the partner bank or program banks. To the extent
you are subject to regulatory oversight, please explain the aspects of your business
that are subject to oversight and the scope of the oversight.
Errors in Wealthfront Advisors LLC's automated advisory services, page 49
9.Please also revise to discuss any potential risks related to the computer algorithms that
administer a portfolio, if applicable.
Management's Discussion and Analysis
Our Revenue Model
Cash Management, page 99
10.We note your disclosure on page 99 that you generate revenue from cash account fees
earned from the program banks where each program bank pays you a rate that is equal
to a major interest rate benchmark plus a fixed negotiated premium that they are
willing to pay on client’s cash that is swept to them. You also state that by passing
along the majority of the wholesale rates paid by the program banks, you have been
able to offer your clients a predictable and more attractive rate. Please address the
following:
•Provide us with a fulsome accounting analysis supporting the revenue stream
earned from your cash management services, including who you determined was
the customer under the arrangement and how you determined it was appropriate to
record cash account fees earned from the program banks on a “net” basis.
•Describe to us the cash flows for the revenues earned from the program
banks. For example, explain whether the program banks pay you the gross amount
(interest rate benchmark plus the fixed premium), and if so, tell us how and when
the cash flow payments to your clients are made, and by whom.
•Provide us with your accounting analysis supporting your policy to record
consideration paid to clients for receiving a referral as a reduction to cash
management revenue and consideration paid to clients for referring a new client
as a marketing cost.

August 13, 2025
Page 4
11.On page 46 you discuss that you offer a cash account in connection with your
program banks and your partnership with two banking partners. Your disclosure
further states that your banking partner establishes direct banking relationships with
your clients and provides services that include a Wealthfront-branded debit card,
ATM network access and mobile check deposit, while the other banking partner
provides limited ACH capabilities and does not have a direct banking relationship
with your clients. Please tell us the key terms and contractual relationships between
you, the program banks, and each of your two banking partners. Your response should
address the following, along with all other key aspects and financial arrangements of
the contracts:
•Tell us the financial arrangement between you and each of the two banking
partners, including how the fees are determined, how often they are paid, and
where they are presented in your Consolidated Statement of Operations.
•Tell us the relationship and fee streams, if any, between the program banks and
the two banking partners for the cash account service.
12.Please revise to indicate if the instant withdrawals may be limited and possibly subject
to a fee charged by the receiving institution for the withdrawal request as it relates to
the use of the RTP Network and FedNow.
13.We note your response to prior comment 21 and the revised disclosure regarding the
rates paid by program banks in connection with your cash suite program. Please
disclose the structure and variability of these fees, including the portion of the interest
you retain before passing rates on to clients, or advise. For instance, please revise to
disclose:
•The range of fees or rates received from program banks and how they are
calculated;
•Whether the premium varies by program bank or over time;
•How frequently the premium is renegotiated or adjusted and whether it is fixed or
floating relative to the benchmark;
•Any historical range or average of fees earned in recent periods; and
•How the portion of the interest retained is determined, including whether it is
fixed or variable.
Funded clients, page 103
14.We note your response to prior comment 1. Please disclose the percentage of funded
clients that have an account balance of zero, or advise.
Marketing, page 108
15.We note the response to comments 28 and 29. We further note that marketing
expenses accounted for approximately 28% and 16% of total costs and operating
expenses in the fiscal years ended January 31, 2025 and 2024, respectively. Please
revise to also separately disclose the dollar amount, as well as the individual cost
components (e.g. client referral expenses), of performance and brand advertising,
personnel-related costs, and allocated overhead recognized during the periods
presented.

August 13, 2025
Page 5
Other Revenue, page 109
16.Given the material amounts of funds owed to you from clients as a direct result of the
margin lending activities, disclosed as “Due from Clients” on the balance sheet, please
revise to provide information addressing the average margin lending rates earned and
the funding costs incurred under the lending arrangement with RBC.
17.In addition, please revise to disclose the volume of activity for the margin lending
activities for each of the periods presented. These disclosures should include new
loans originated as well as repayments made and any loan write-offs for the periods
presented . Please also discuss the nature and terms of the omnibus margin lending
arrangement with RBC Clearing and Custody.
Total Costs and Operating Expenses Cost of Revenue, page 109
18.We note the response to prior comment 33. Please revise to provide a detailed
discussion of the reasons for the changes in cash management costs and the brokerage
platform costs during the periods presented. Further, please revise to quantify, in
dollar terms, the different types of costs representative of the cost of revenue during
the periods presented.
Business
Our Clients, page 124
19.We note your response to prior comment 36. Please clarify what you mean by
“attractive net-of-fee after tax returns” and identify the benchmarks or peer
comparisons used to support this statement. Additionally, explain how you define
“attractive yield on cash,” including time periods, interest rate sources and
competitors considered in making this claim.
Our Platform, page 126
20.We note your response to prior comment 37. Please revise your disclosure to:
•Clarify whether and how you evaluate or estimate cost savings attributable to
automation. If such savings are not quantified or not directly tied to your advisory
fee structure, please revise your disclosure to ensure it does not imply a
measurable or causal relationship.
•Explain the extent to which automation has influenced your advisory fee levels as
compared to other factors such as your business model, target client base or
pricing strategy.
21.We note your response to prior comment 38. Please advise if your customers are made
aware of the banking partner through which you provide the debit card, ATM network
access, etc.
We note your response to prior comment 40 and the footnote (footnote 23 on page
129) indicating that your lower interest rate claim is based on competitor rates as of
July 18, 2025 from four large financial institutions offering comparable margin
lending products. However, your disclosure still does not provide sufficient detail to
support the statement that you are able to offer lower rates "due to automation." Please
revise your disclosure to:22.

August 13, 2025
Page 6
•Describe in greater detail the specific aspects of your automation that contribute
to lower rates, including the nature of any operational efficiencies or cost savings,
and how those factors directly impact pricing.
•Clarify whether the rate differential is primarily attributable to automation or to
other factors such as your target client profile, marketing strategy, or other
elements of your business model.
•Expand the competitor rate comparison to explain how the competitor data was
selected, whether it reflects standard or promotional rates, and whether it is
representative of industry averages.
•Indicate whether your rates have consistently been lower than competitors' rates
over time, or whether the comparison reflects a specific point in time.
Investment Advisory, page 128
23.Please revise to disclose the individual level of capital losses available that can be
utilized for tax loss harvesting purposes in any calendar year. In addition, provide
information to support the disclosures that the losses generated from tax-loss
harvesting produce benefits that are often a multiple (e.g. approximately 7.5 times) of
the .25% investment advisory fee and address the support for the $1 billion in tax
savings (on page 137).
Competition, page 142
24.We note your response to prior comment 42 indicating that you do not view
traditional financial advisors as competitors because your clients are primarily digital
natives who prefer a digital mobile experience and may not meet the minimum
investment requirements of such advisors. Please revise to explain the basis for this
conclusion, including any supporting data or analysis, and discuss whether traditional
advisors or hybrid models could nonetheless serve your target clients.
Note 2. Summary of Significant Accounting Policies
Revenue Recognition
Other Revenue, page F-9
25.We note your disclosure on page F-9 that other revenue consists of net interest margin
revenue and proxy distribution revenue, where net interest margin revenue is earned
from clients’ borrowings on margin, less interest expense incurred related to the
funding costs associated with the margin loans. Tell us the authoritative literature you
relied upon for presenting net interest margin as a component of other revenue, rather
than interest income recorded gross as part of revenue. In addition, tell us the amount
of gross interest income and gross interest expense recognized in conjunction with the
margin lending activities for the periods presented.

August 13, 2025
Page 7
            Please contact Victor Cecco at 202-551-2064 or Marc Thomas at 202-551-3452 if you
have questions regarding comments on the financial statements and related matters. Please
contact Robert Arzonetti at 202-551-8819 or Susan Block at 202-551-3210 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Finance
cc:Michael Brown