WealthNavi Q2/FY2024 Earnings

5 min readAug 12, 2024

WealthNavi, Japan’s leading robo advisor, reported second quarter earnings for FY2024 on Friday. As a fee-taking business on the basis of its AUM, WealthNavi’s stock price performance is naturally correlated to the Japanese market overall. Its price as of Friday’s close represents about half of what it was quoted at during the market highs during the first quarter.

Financial Performance

AuM: Reached JPY 1.28 trillion as of June 30, 2024, surpassing JPY 1.3 trillion on July 4th. This represents a 44% year-over-year growth.
Number of Users: Increased to 408,000, a 10% year-over-year growth.
ARR: Reached JPY 11.2 billion, a significant 41.3% increase year-over-year.
Operating Revenue: Increased by 41.4% year-over-year, reaching JPY 2,745 million.

Operating Profit: Rose by JPY 49 million year-over-year to JPY 266 million. Just like we noted in our post on the Rakuten earnings, WealthNavi also provides an operating profit number excluding advertising expenses. To WealthNavi’s credit, the headline number of JPY 266 million includes such expenses, with customer acquisition cost such an integral part of the business.
“Robo-NISA” AuM: Showed steady growth, driven by the successful launch of New “Robo-NISA” in January 2024. The AuM per “Robo-NISA” user is JPY 4.80 million, significantly higher than the JPY 3.13 million for overall users, highlighting the success of this offering.

Strategic Investments for Long-Term Growth

Product Development and IT Infrastructure

Significant investments were made in product development and IT infrastructure to support anticipated rapid growth. These investments focused on:

Development of the Money Advisory Platform (MAP), a new multi-service platform launching in 2025, which will offer holistic financial advice and solutions. WealthNavi intends to invest JPY 814 million into the development of the MAP and new services in 2024.
Enhancing the robo-advisor service, including aligning “Robo-NISA” with the new NISA system.
Launching new services, such as the “WealthNavi R” mutual fund platform with Rakuten and the “Wealth Guide” financial education service.

Personnel and Real Estate Related Expenses

Increased to accommodate the expansion of the development team, accommodate the growing user base, and facilitate the office relocation in 4Q 2024, incurring a one-time expense of JPY 277 million Q3/Q4 for this move.

Aggressive yet Disciplined Advertising

Following the advertising bump for the New NISA launch in January, WealthNavi maintained an aggressive yet disciplined advertising approach to attract new users and promote new services.

Key Business Highlights:

Expansion of Alliance and Direct Channels

WealthNavi continued to grow its AuM through both direct and alliance channels, establishing new partnerships with financial institutions like Toho Bank and expanding existing collaborations. The termination of some alliances, like those with SBI Securities and Chukyo Bank, led to a shift of their AuM into the direct channel, further strengthening WealthNavi’s direct presence.

New “Robo-NISA” Launch

The launch of the New “Robo-NISA” aligned with the new NISA system proved successful, contributing significantly to AuM growth and demonstrating WealthNavi’s commitment to providing tax-efficient investment solutions.

New Service Launches

“WealthNavi R”: Launched on May 13, 2024, this service provides tax-free NISA investment opportunities for Rakuten Securities users through dedicated mutual funds. It leverages the benefits of the Rakuten ecosystem, allowing users to make automated deposits using Rakuten Cards and Rakuten Cash while earning Rakuten Points.

Insurance Advisory Service: Launched on May 7, 2024, this service assists working families in selecting and reviewing optimal life insurance policies. It marks a crucial step towards the development of the MAP, enabling users to manage financial risk holistically throughout different life stages.

“Wealth Guide”: Launched on July 22, 2024, this financial education website offers practical advice to working families through articles, case studies, and tips, contributing to WealthNavi’s mission of empowering individuals to make informed financial decisions.

Capital and Business Alliance with MUFG Bank

Executed an agreement on February 14, 2024, combining WealthNavi’s product development expertise with MUFG’s large customer base and product lineup.
MUFG Bank will become the second largest shareholder with a 15.55% stake.
The collaboration focuses on promoting “Robo-NISA,” developing the MAP, and providing holistic financial advice to customers.
The proceeds of JPY 15.4 billion are allocated as follows: (I) marketing of the robo-advisor: JPY 3 billion; (II) planning, development and operation of the MAP as well as system and data infrastructure enhancement: JPY 4 billion; (III) marketing of the MAP: JPY 3 billion; and (IV) M&A and capital and business alliances: JPY 5.4 billion.

Full-Year 2024 Forecast:

Operating Revenue: Projected to reach JPY 11,187 million, a 37% year-over-year increase.
Operating Profit: Expected to be JPY 531 million, a 1.4% increase year-over-year, reflecting the significant investments in growth initiatives.
AuM: Forecast to reach JPY 1.35 trillion in market value, a 37.1% year-over-year growth.

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