Envestnet (NYSE: ENV), a leading provider of intelligent systems
for wealth management and financial wellness, today reported
financial results for the three months ended March 31, 2024.
Three months ended
Key Financial Metrics
March 31,
%
(in millions, except per share
data)
2024
2023
Change
GAAP:
Total revenue
$
325.0
$
298.7
9%
Net income (loss) attributable to
Envestnet, Inc.
$
2.5
$
(41.2
)
106%
Net income (loss) attributable to
Envestnet, Inc. per diluted share
$
0.05
$
(0.76
)
107%
Non-GAAP:
Adjusted EBITDA(1)
$
70.4
$
54.0
30%
Adjusted net income(1)
$
39.4
$
30.1
31%
Adjusted net income per diluted
share(1)
$
0.60
$
0.46
30%
Free cash flow(1)
$
(19.9
)
$
(61.7
)
68%
"Envestnet continues to be in its leading position because we
are executing on what our clients need and we're deepening our
relationships with them," said Jim Fox, Board Chair and Interim
CEO. "Our first quarter results are a testament to our
differentiated products, deepening relationships, and inherent
operating leverage in our business. We see tremendous runway for
continued growth and margin expansion."
Financial Results for the First Quarter 2024 Compared to the
First Quarter 2023
Total revenue increased 9% to $325.0 million for the first
quarter of 2024 from $298.7 million for the first quarter of 2023.
Asset-based recurring revenue increased 15% and represented 62% of
total revenue for the first quarter of 2024, compared to 59% of
total revenue for the first quarter of 2023. Subscription-based
recurring revenue remained consistent and represented 36% of total
revenue for the first quarter of 2024, compared to 39% of total
revenue for the first quarter of 2023. Professional services and
other non-recurring revenue increased 4% for the first quarter of
2024 from the first quarter of 2023.
Total operating expenses increased 2% to $316.2 million for the
first quarter of 2024 from $309.8 million for the first quarter of
2023. Direct expense increased 15% to $126.6 million for the first
quarter of 2024 from $109.7 million for the first quarter of 2023.
Employee compensation decreased 9% to $103.7 million for the first
quarter of 2024 from $114.2 million for the first quarter of 2023.
Employee compensation was 32% of total revenue for the first
quarter of 2024, compared to 38% of total revenue for the first
quarter of 2023. General and administrative expense decreased 4% to
$52.1 million for the first quarter of 2024 from $54.4 million for
the first quarter of 2023. General and administrative expense was
16% of total revenue for the first quarter of 2024, compared to 18%
of total revenue for the first quarter of 2023.
Income from operations was $8.7 million for the first quarter of
2024 compared to a loss from operations of $11.1 million for the
first quarter of 2023. Net income attributable to Envestnet, Inc.
was $2.5 million, or $0.05 per diluted share, for the first quarter
of 2024 compared to a net loss attributable to Envestnet, Inc. of
$41.2 million, or $0.76 per diluted share, for the first quarter of
2023.
Adjusted EBITDA(1) increased 30% to $70.4 million for the first
quarter of 2024 from $54.0 million for the first quarter of 2023.
Adjusted net income(1) increased 31% to $39.4 million, or $0.60 per
diluted share, for the first quarter of 2024 from $30.1 million, or
$0.46 per diluted share, for the first quarter of 2023. Free cash
flow(1) increased 68%, to negative $19.9 million for the first
quarter of 2024 from negative $61.7 million for the first quarter
of 2023.
Balance Sheet and Liquidity
As of March 31, 2024, Envestnet had $61.2 million in cash and
cash equivalents and $892.5 million in outstanding debt. Debt as of
March 31, 2024 consisted of $317.5 million in convertible notes
maturing in 2025 and $575.0 million in convertible notes maturing
in 2027. Envestnet's $500.0 million revolving credit facility was
undrawn as of March 31, 2024.
Segment Reporting
On October 1, 2023, the Company changed the composition of its
reportable segments to reflect the way that the Company's chief
operating decision maker reviews the operating results, assesses
performance and allocates resources. All segment information
presented within this Exhibit 99.1 for the quarter ended March 31,
2024 is presented in conjunction with the current organizational
structure, with prior periods adjusted accordingly.
Correction of Immaterial Error
During the fourth quarter of 2023, the Company identified that
the arrangement with a third-party for the use of cloud hosted
virtual servers which was previously accounted for as a finance
lease transaction and included as a component of property and
equipment, net in the condensed consolidated balance sheets should
have been recognized as a prepayment included within prepaid
expenses and other current assets and other assets in the condensed
consolidated balance sheets. The Company concluded that the
classification of these transactions was immaterial in prior period
financial statements and that amendment of previously filed reports
was not required. However, the Company corrected this immaterial
error in the prior period reported within this press release.
Outlook
Envestnet provided the following outlook for the second quarter
ending June 30, 2024. This outlook is based on the market value of
assets under management or administration as of March 31, 2024. We
caution that we cannot predict the market value of these assets on
any future date. See “Cautionary Statement Regarding
Forward-Looking Statements.”
In Millions, Except Adjusted
EPS
2Q 2024
GAAP:
Revenue:
Asset-based
$
211.5
-
$
214.5
Subscription-based
115.0
-
118.0
Total recurring revenue
326.5
-
332.5
Professional services and other
revenue
10.5
-
12.5
Total revenue
$
337.0
-
$
345.0
Asset-based direct expense
$
125.0
-
$
126.5
Total direct expense
$
139.5
-
$
141.0
Net income (loss)
(a)
Diluted shares outstanding
66.5
Net income (loss) per diluted share
(a)
Non-GAAP:
Adjusted EBITDA(1)
$
71.0
-
$
75.0
Adjusted net income per diluted
share(1)
$
0.60
-
$
0.65
_______________________________________________________ (a)
Envestnet does not forecast net income (loss) and net income (loss)
per diluted share due to the unpredictable nature of various items
adjusted for non-GAAP disclosure purposes, including the periodic
GAAP income tax provision.
Conference Call
Envestnet will host a conference call to discuss first quarter
2024 financial results today at 5:00 p.m. ET. The live webcast and
accompanying presentation can be accessed from Envestnet’s investor
relations website at http://investor.envestnet.com/. A replay of
the webcast will be available on the investor relations website
following the call.
About Envestnet
Envestnet, Inc. (NYSE: ENV) is transforming the way financial
advice and insight are delivered. Our mission is to empower
financial advisors and service providers with innovative
technology, solutions and intelligence. Envestnet's clients include
more than 109,000 advisors, 17 of the 20 largest U.S. banks, 48 of
the 50 largest wealth management and brokerage firms, over 500 of
the largest RIAs and hundreds of FinTech companies, all of which
leverage Envestnet technology and services that help drive better
outcomes for enterprises, advisors and their clients.
For more information on Envestnet, please visit
www.envestnet.com and follow us on Twitter @ENVintel.
_______________________________________________________ (1)
Non-GAAP Financial Measures
“Adjusted EBITDA” represents net income (loss) before deferred
revenue fair value adjustment, interest income, interest expense,
income tax provision, depreciation and amortization, non-cash
compensation expense, restructuring charges and transaction costs,
severance expense, litigation, regulatory and other governance
related expenses, foreign currency, non-income tax expense
adjustment, loss allocations from equity method investments and
loss attributable to non-controlling interest.
“Adjusted net income” represents net income (loss) before income
tax provision, deferred revenue fair value adjustment, non-cash
interest expense, cash interest on our Convertible Notes,
amortization of acquired intangibles, non-cash compensation
expense, restructuring charges and transaction costs, severance
expense, litigation, regulatory and other governance related
expenses, foreign currency, non-income tax expense adjustment, loss
allocations from equity method investments and loss attributable to
non-controlling interest. Reconciling items are presented gross of
tax, and a normalized tax rate is applied to the total of all
reconciling items to arrive at adjusted net income. The normalized
tax rate is based solely on the estimated blended statutory income
tax rates in the jurisdictions in which we operate. We monitor the
normalized tax rate based on events or trends that could materially
impact the rate, including tax legislation changes and changes in
the geographic mix of our operations.
“Adjusted net income per diluted share” represents adjusted net
income attributable to common stockholders divided by the diluted
number of weighted-average shares outstanding. For purposes of the
adjusted net income per share calculation, we assume all potential
shares to be issued in connection with our convertible notes are
dilutive.
"Free cash flow" represents net cash provided by (used in)
operating activities less purchases of property and equipment and
capitalization of internally developed software.
For further information see reconciliations of Non-GAAP
Financial Measures on pages 10-14 of this press release, and the
section entitled "Non-GAAP Financial Measures" in the most recent
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed
with the Securities and Exchange Commission (“SEC”) which are
available on the SEC’s website at www.sec.gov or our Investor
Relations website at http://investor.envestnet.com/.
Reconciliations are not provided for guidance on such measures as
the Company is unable to predict the amounts to be adjusted, such
as the GAAP tax provision. The Company’s Non-GAAP Financial
Measures should not be viewed as a substitute for revenue, net
income (loss), net income (loss) per share or net cash provided by
(used in) operating activities determined in accordance with
GAAP.
Cautionary Statement Regarding Forward-Looking
Statements
The forward-looking statements made in this press release and
its attachments concerning, among other things, Envestnet, Inc.’s
expected financial performance and outlook for the second quarter
of 2024, its strategic and operational plans and growth strategy
are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements involve
risks and uncertainties and our actual results could differ
materially from the results expressed or implied by such
forward-looking statements. Furthermore, reported results should
not be considered as an indication of future performance. The
potential risks, uncertainties and other factors that could cause
actual results to differ from those expressed by the
forward-looking statements in this press release include, but are
not limited to, our ability to recruit and retain senior executive
leadership and other key employees and to successfully manage
transitions, including the transition of our chief executive
officer; adverse economic or global market conditions, including
periods of rising inflation and market interest rates, and
governmental responses to such conditions; the conflicts in the
Middle East and between Russia and Ukraine, including related
sanctions and their impact on the global economy and capital
markets; the concentration of our revenue from the delivery of our
solutions and services to clients in the financial services
industry; our reliance on a limited number of clients for a
material portion of our revenue; the renegotiation of fees by our
clients; changes in the estimates of fair value of reporting units
or of long-lived assets, particularly goodwill and intangible
assets; the amount of our debt, our ability to service our debt and
risks associated with derivative transactions associated with our
debt; limitations on our ability to access information from third
parties or charges for accessing such information; the targeting of
some of our sales efforts at large financial institutions and large
financial technology companies which prolongs sales cycles,
requires substantial upfront sales costs and results in less
predictability in completing some of our sales; changes in
investing patterns on the assets on which we derive revenue and the
freedom of investors to redeem or withdraw investments generally at
any time; the impact of fluctuations in market conditions and
interest rates on the demand for our products and services and the
value of assets under management or administration; increased
geopolitical unrest and other events outside of our control that
could adversely affect the global economy or specific
international, regional and domestic markets; our ability to keep
up with rapid technological change, evolving industry standards or
changing requirements of clients; risks associated with our
international operations; the competitiveness of our solutions and
services as compared to those of others; liabilities associated
with potential, perceived or actual breaches of fiduciary duties
and/or conflicts of interest; harm to our reputation; the failure
to protect our intellectual property rights; our reliance on
outsourcing arrangements; activist shareholders hindering the
execution of our business strategy, diverting board and management
attention and resources and causing us to incur substantial
expenses; public health crises, pandemics or similar events; our
ability to successfully identify potential acquisition candidates,
complete acquisitions and successfully integrate acquired
companies; our ability to successfully execute the conversion of
clients’ assets from their technology platform to our technology
platforms in a timely and accurate manner; our ability to introduce
new solutions and services and enhancements; regulatory compliance
failures; our ability to maintain the security and integrity of our
systems and facilities and to maintain the privacy of personal
information and potential liabilities for cybersecurity breaches;
the effect of privacy laws and regulations, industry standards and
contractual obligations and changes to these laws, regulations,
standards and obligations on how we operate our business and the
negative effects of failure to comply with these requirements;
failure by our customers to obtain proper permissions or waivers
for our use of disclosure of information; adverse judicial or
regulatory proceedings against us; failure of our solutions,
services or systems, or those of third parties on which we rely, to
work properly; potential liability for use of inaccurate
information by third parties provided by us; the occurrence of a
deemed “change of control”; the uncertainty of the application and
interpretation of certain tax laws; issuances of additional shares
of common stock or issuances of shares of preferred stock or
convertible securities on our existing stockholders; general
economic, political and regulatory conditions; global events,
natural disasters, environmental disasters, terrorist attacks and
pandemics, including their impact on the economy and trading
markets; management’s response to these factors. More information
regarding these and other risks, uncertainties and factors is
contained in our filings with the SEC which are available on the
SEC’s website at www.sec.gov or our Investor Relations website at
http://investor.envestnet.com/. You are cautioned not to unduly
rely on these forward-looking statements, which speak only as of
the date of this press release. All information in this press
release and its attachments is as of May 7, 2024 and, unless
required by law, we undertake no obligation to publicly revise any
forward-looking statement to reflect circumstances or events after
the date of this press release or to report the occurrence of
unanticipated events.
Envestnet, Inc.
Condensed Consolidated Balance Sheets (in thousands)
(unaudited)
March 31,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
61,226
$
91,378
Fees receivable, net
135,630
120,958
Prepaid expenses and other current
assets
53,330
51,472
Assets held for deconsolidation
55,016
—
Total current assets
305,202
263,808
Property and equipment, net
46,856
48,223
Internally developed software, net
214,507
224,713
Intangible assets, net
323,326
338,068
Goodwill
779,916
806,563
Operating lease right-of-use assets,
net
67,127
69,154
Other assets
127,111
126,723
Total assets
$
1,864,045
$
1,877,252
Liabilities and equity
Current liabilities:
Accounts payable, accrued expenses and
other current liabilities
$
201,126
$
241,424
Operating lease liabilities
12,479
12,909
Deferred revenue
34,584
38,201
Liabilities held for deconsolidation
8,998
—
Total current liabilities
257,187
292,534
Debt
877,842
876,612
Operating lease liabilities, net of
current portion
98,085
100,830
Deferred tax liabilities, net
15,716
16,568
Other liabilities
17,897
16,202
Total liabilities
1,266,727
1,302,746
Equity:
Total stockholders’ equity, attributable
to Envestnet, Inc.
580,897
568,191
Non-controlling interest
16,421
6,315
Total liabilities and equity
$
1,864,045
$
1,877,252
Envestnet, Inc.
Condensed Consolidated Statements of Operations (in
thousands, except share and per share information)
(unaudited)
Three Months Ended
March 31,
2024
2023
Revenue:
Asset-based
$
202,616
$
176,932
Subscription-based
117,462
117,079
Total recurring revenue
320,078
294,011
Professional services and other
revenue
4,872
4,696
Total revenue
324,950
298,707
Operating expenses:
Direct expense
126,633
109,679
Employee compensation
103,652
114,215
General and administrative
52,065
54,350
Depreciation and amortization
33,892
31,520
Total operating expenses
316,242
309,764
Income (loss) from operations
8,708
(11,057
)
Other expense, net
(6,664
)
(7,935
)
Income (loss) before income tax
provision
2,044
(18,992
)
Income tax provision
1,505
23,769
Net income (loss)
539
(42,761
)
Add: Net loss attributable to
non-controlling interest
1,974
1,533
Net income (loss) attributable to
Envestnet, Inc.
$
2,513
$
(41,228
)
Net income (loss) attributable to
Envestnet, Inc. per share:
Basic
$
0.05
$
(0.76
)
Diluted
$
0.05
$
(0.76
)
Weighted average common shares
outstanding:
Basic
54,884,074
54,143,259
Diluted
55,385,066
54,143,259
Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows (in
thousands) (unaudited)
Three Months Ended
March 31,
2024
2023
Cash flows from operating activities:
Net income (loss)
$
539
$
(42,761
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
33,892
31,520
Deferred income taxes
(855
)
5,221
Non-cash compensation expense
18,898
19,453
Non-cash interest expense
4,580
4,498
Loss allocations from equity method
investments
2,283
2,940
Other
2,078
468
Changes in operating assets and
liabilities:
Fees receivable, net
(18,841
)
(21,579
)
Prepaid expenses and other assets
(2,371
)
(9,858
)
Accounts payable, accrued expenses and
other liabilities
(40,659
)
(31,648
)
Deferred revenue
2,400
8,073
Net cash provided by (used in) operating
activities
1,944
(33,673
)
Cash flows from investing activities:
Purchases of property and equipment
(1,900
)
(4,402
)
Capitalization of internally developed
software
(19,953
)
(23,664
)
Investments in private companies
(2,805
)
(950
)
Acquisition of proprietary technology
—
(10,000
)
Issuance of loan receivable to private
company
—
(20,000
)
Other
—
260
Net cash used in investing activities
(24,658
)
(58,756
)
Cash flows from financing activities:
Proceeds from exercise of stock
options
71
367
Payments related to tax withholdings for
stock-based compensation
(8,449
)
(10,732
)
Payments related to share repurchases
—
(9,289
)
Proceeds from capital contributions
received by non-controlling interest
12,012
—
Purchase of non-controlling units from
third-party shareholders
—
(1,008
)
Other
3
2
Net cash provided by (used in) financing
activities
3,637
(20,660
)
Effect of exchange rate on changes on cash
and cash equivalents
(2
)
3,580
Net change in cash and cash equivalents
due to cash reclassified to assets held for deconsolidation
(11,073
)
—
Net change in cash and cash
equivalents
(30,152
)
(109,509
)
Cash and cash equivalents, beginning of
period
91,378
162,173
Cash and cash equivalents, end of
period
$
61,226
$
52,664
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures (in
thousands) (unaudited)
Three Months Ended
March 31,
2024
2023
Net income (loss)
$
539
$
(42,761
)
Add (deduct):
Deferred revenue fair value adjustment
(a)
—
52
Interest income (b)
(1,983
)
(1,358
)
Interest expense (b)
6,089
6,320
Income tax provision
1,505
23,769
Depreciation and amortization
33,892
31,520
Non-cash compensation expense (d)
18,898
19,453
Restructuring charges and transaction
costs (e)
2,056
4,163
Severance expense (d)
3,425
6,188
Litigation, regulatory and other
governance related expenses (c)
2,288
3,074
Foreign currency (b)
275
33
Non-income tax expense adjustment (c)
(49
)
(168
)
Loss allocations from equity method
investments (b)
2,283
2,940
Loss attributable to non-controlling
interest
1,160
778
Adjusted EBITDA
$
70,378
$
54,003
(a)
Included within subscription-based revenue
in the condensed consolidated statements of operations.
(b)
Included within other expense, net in the
condensed consolidated statements of operations.
(c)
Included within general and administrative
expense in the condensed consolidated statements of operations.
(d)
Included within employee compensation
expense in the condensed consolidated statements of operations.
(e)
For the three months ended March 31, 2024
and 2023, $2.4 million and $4.1 million, respectively, were
included within general and administrative expense and $(0.4)
million and $0.1 million, respectively, were included within
employee compensation expense in the condensed consolidated
statements of operations.
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures (in
thousands, except share and per share information)
(unaudited)
Three Months Ended
March 31,
2024
2023
Net income (loss)
$
539
$
(42,761
)
Income tax provision (a)
1,505
23,769
Income (loss) before income tax
provision
2,044
(18,992
)
Add (deduct):
Deferred revenue fair value adjustment
(b)
—
52
Non-cash interest expense (d)
1,405
1,442
Cash interest - Convertible Notes (d)
4,369
4,565
Amortization of acquired intangibles
(e)
14,742
16,940
Non-cash compensation expense (f)
18,898
19,453
Restructuring charges and transaction
costs (g)
2,056
4,163
Severance expense (e)
3,425
6,188
Litigation, regulatory and other
governance related expenses (c)
2,288
3,074
Foreign currency (d)
275
33
Non-income tax expense adjustment (c)
(49
)
(168
)
Loss allocations from equity method
investments (d)
2,283
2,940
Loss attributable to non-controlling
interest
1,160
778
Adjusted net income before income tax
effect
52,896
40,468
Income tax effect (h)
(13,489
)
(10,319
)
Adjusted net income
$
39,407
$
30,149
Basic number of weighted-average shares
outstanding
54,884,074
54,143,259
Effect of dilutive shares:
Convertible Notes
10,811,884
11,470,645
Non-vested RSUs and PSUs
473,738
463,719
Options to purchase common stock
27,254
88,323
Diluted number of weighted-average shares
outstanding
66,196,950
66,165,946
Adjusted net income per diluted share
$
0.60
$
0.46
(a)
For the three months ended March 31, 2024
and 2023, the effective tax rate computed in accordance with GAAP
equaled 73.6% and (125.2)%, respectively.
(b)
Included within subscription-based revenue
in the condensed consolidated statements of operations.
(c)
Included within general and administrative
expense in the condensed consolidated statements of operations.
(d)
Included within other expense, net in the
condensed consolidated statements of operations.
(e)
Included within depreciation and
amortization expense in the condensed consolidated statements of
operations.
(f)
Included within employee compensation
expense in the condensed consolidated statements of operations.
(g)
For the three months ended March 31, 2024
and 2023, $2.4 million and $4.1 million, respectively, were
included within general and administrative expense and $(0.4)
million and $0.1 million, respectively, were included within
employee compensation expense in the condensed consolidated
statements of operations.
(h)
An estimated normalized tax rate of 25.5%
has been used to compute adjusted net income for the three months
ended March 31, 2024 and 2023.
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures (in
thousands) (unaudited)
Three Months Ended
March 31,
2024
2023
Net cash provided by (used in) operating
activities
$
1,944
$
(33,673
)
Less: Purchases of property and
equipment
(1,900
)
(4,402
)
Less: Capitalization of internally
developed software
(19,953
)
(23,664
)
Free cash flow
$
(19,909
)
$
(61,739
)
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures Segment
Information (in thousands) (unaudited)
Three Months Ended March 31,
2024
Envestnet Wealth
Solutions
Envestnet Data &
Analytics
Nonsegment
Total
Revenue:
Asset-based
$
202,616
$
—
$
—
$
202,616
Subscription-based
84,168
33,294
—
117,462
Total recurring revenue
286,784
33,294
—
320,078
Professional services and other
revenue
3,026
1,846
—
4,872
Total revenue
$
289,810
$
35,140
$
—
$
324,950
Operating expenses:
Direct expense:
Asset-based
$
118,403
$
—
$
—
$
118,403
Subscription-based
1,431
6,799
—
8,230
Total direct expense
119,834
6,799
—
126,633
Employee compensation
75,196
11,692
16,764
103,652
General and administrative
29,032
15,314
7,719
52,065
Depreciation and amortization
26,818
7,074
—
33,892
Total operating expenses
$
250,880
$
40,879
$
24,483
$
316,242
Income (loss) from operations
$
38,930
$
(5,739
)
$
(24,483
)
$
8,708
Add (deduct):
Depreciation and amortization
26,818
7,074
—
33,892
Non-cash compensation expense (b)
11,387
1,864
5,647
18,898
Restructuring charges and transaction
costs (c)
43
679
1,334
2,056
Severance expense (b)
1,804
13
1,608
3,425
Litigation, regulatory and other
governance related expenses (a)
—
2,288
—
2,288
Non-income tax expense adjustment (a)
(49
)
—
—
(49
)
Loss attributable to non-controlling
interest
1,160
—
—
1,160
Adjusted EBITDA
$
80,093
$
6,179
$
(15,894
)
$
70,378
(a)
Included within general and administrative
expense in the condensed consolidated statements of operations.
(b)
Included within employee compensation
expense in the condensed consolidated statements of operations.
(c)
$2.4 million was included within general
and administrative expense and $(0.4) million was included within
employee compensation expense in the condensed consolidated
statements of operations.
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures Segment
Information (continued) (in thousands)
(unaudited)
Three months ended March 31,
2023
Envestnet Wealth
Solutions
Envestnet Data &
Analytics
Nonsegment
Total
Revenue:
Asset-based
$
176,932
$
—
$
—
$
176,932
Subscription-based
80,470
36,609
—
117,079
Total recurring revenue
257,402
36,609
—
294,011
Professional services and other
revenue
3,247
1,449
—
4,696
Total revenue
$
260,649
$
38,058
$
—
$
298,707
Operating expenses:
Direct expense:
Asset-based
$
102,623
$
—
$
—
$
102,623
Subscription-based
1,778
5,274
—
7,052
Professional services and other
4
—
—
4
Total direct expense
104,405
5,274
—
109,679
Employee compensation
79,047
19,242
15,926
114,215
General and administrative
29,107
14,429
10,814
54,350
Depreciation and amortization
25,492
6,028
—
31,520
Total operating expenses
$
238,051
$
44,973
$
26,740
$
309,764
Income (loss) from operations
$
22,598
$
(6,915
)
$
(26,740
)
$
(11,057
)
Add (deduct):
Deferred revenue fair value adjustment
(a)
52
—
—
52
Depreciation and amortization
25,492
6,028
—
31,520
Non-cash compensation expense (c)
11,467
2,437
5,549
19,453
Restructuring charges and transaction
costs (d)
1,139
243
2,781
4,163
Severance expense (c)
3,799
2,205
184
6,188
Litigation, regulatory and other
governance related expenses (b)
—
1,324
1,750
3,074
Non-income tax expense adjustment (b)
(102
)
(66
)
—
(168
)
Loss attributable to non-controlling
interest
778
—
—
778
Adjusted EBITDA
$
65,223
$
5,256
$
(16,476
)
$
54,003
(a)
Included within subscription-based revenue
in the condensed consolidated statements of operations.
(b)
Included within general and administrative
expense in the condensed consolidated statements of operations.
(c)
Included within employee compensation
expense in the condensed consolidated statements of operations.
(d)
$4.1 million was included within general
and administrative expense and $0.1 million was included within
employee compensation expense in the condensed consolidated
statements of operations.
Envestnet, Inc. Key
Metrics (in millions, except accounts and advisors data)
(unaudited)
Envestnet Wealth Solutions Segment
The following table provides information regarding the amount of
assets utilizing our platforms, financial advisors and investor
accounts in the periods indicated:
As of
March 31,
June 30,
September 30,
December 31,
March 31,
2023
2023
2023
2023
2024
(in millions, except accounts and
advisors data)
Platform Assets
Assets under Management (“AUM”)
$
363,244
$
384,773
$
375,408
$
416,001
$
452,464
Assets under Administration (“AUA”)
379,843
394,078
398,082
430,846
471,401
Total AUM/A
743,087
778,851
773,490
846,847
923,865
Subscription
4,566,971
4,643,313
4,579,248
4,959,514
5,158,180
Total Platform Assets
$
5,310,058
$
5,422,164
$
5,352,738
$
5,806,361
$
6,082,045
Platform Accounts
AUM
1,571,862
1,609,677
1,614,873
1,640,879
1,688,044
AUA
1,142,166
1,144,375
1,257,094
1,254,962
1,315,442
Total AUM/A
2,714,028
2,754,052
2,871,967
2,895,841
3,003,486
Subscription
15,779,980
15,916,955
16,072,848
16,248,598
16,641,631
Total Platform Accounts
18,494,008
18,671,007
18,944,815
19,144,439
19,645,117
Advisors
AUM/A
38,611
38,809
38,078
38,697
38,814
Subscription
67,843
68,439
69,318
69,973
70,262
Total Advisors
106,454
107,248
107,396
108,670
109,076
The following table summarizes the changes in AUM and AUA for
the three months ended March 31, 2024:
Asset Rollforward - Three
Months Ended March 31, 2024
As of December
31,
Gross
Net
Market
As of March 31,
2023
Sales
Redemptions
Flows
Impact
Reclassifications
2024
(in millions, except account
data)
AUM
$
416,001
$
32,127
$
(19,601
)
$
12,526
$
22,694
$
1,243
$
452,464
AUA
430,846
45,596
(25,402
)
20,194
22,683
(2,322
)
471,401
Total AUM/A
$
846,847
$
77,723
$
(45,003
)
$
32,720
$
45,377
$
(1,079
)
$
923,865
Fee-Based Accounts
2,895,841
112,633
(4,988
)
3,003,486
The above AUM/A gross sales figures for the three months ended
March 31, 2024 include $29.8 billion in new client conversions. We
onboarded an additional $31.1 billion in subscription conversions
during the three months ended March 31, 2024 bringing total
conversions for the three months ended March 31, 2024 to $60.9
billion.
Asset and account figures in the “Reclassifications” column for
the three months ended March 31, 2024 represent immaterial amounts
that were reclassified between AUM, AUA and subscription to reflect
updated customer billing arrangements. These reclassifications have
no impact on total platform assets or accounts.
Envestnet Data & Analytics Segment
The following table provides information regarding the amount of
paid-end users and firms using the Envestnet Data & Analytics
platform in the periods indicated:
As of
March 31,
June 30,
September 30,
December 31,
March 31,
2023
2023
2023
2023
2024
(in millions, except number of
firms data)
Number of paying users
37.5
38.0
42.3
38.3
43.8
Number of firms
1,310
1,339
1,322
1,324
1,323
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240506422327/en/
Investor Relations investor.relations@envestnet.com (312)
827-3940
Media Relations media@envestnet.com
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