Envestnet Reports First Quarter 2024 Financial Results
|
|
Three months ended |
|
|
||||||
Key Financial Metrics |
|
March 31, |
|
% |
||||||
(in millions, except per share data) |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
GAAP: |
|
|
|
|
|
|
||||
Total revenue |
|
$ |
325.0 |
|
|
$ |
298.7 |
|
|
|
Net income (loss) attributable to Envestnet, Inc. |
|
$ |
2.5 |
|
|
$ |
(41.2 |
) |
|
|
Net income (loss) attributable to Envestnet, Inc. per diluted share |
|
$ |
0.05 |
|
|
$ |
(0.76 |
) |
|
|
|
|
|
|
|
|
|
||||
Non-GAAP: |
|
|
|
|
|
|
||||
Adjusted EBITDA(1) |
|
$ |
70.4 |
|
|
$ |
54.0 |
|
|
|
Adjusted net income(1) |
|
$ |
39.4 |
|
|
$ |
30.1 |
|
|
|
Adjusted net income per diluted share(1) |
|
$ |
0.60 |
|
|
$ |
0.46 |
|
|
|
Free cash flow(1) |
|
$ |
(19.9 |
) |
|
$ |
(61.7 |
) |
|
|
"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
Total operating expenses increased
Income from operations was
Adjusted EBITDA(1) increased
Balance Sheet and Liquidity
As of March 31, 2024, Envestnet had
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
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
Envestnet, Inc.
|
||||||
|
|
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.
|
||||||||
|
|
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.
|
||||||||
|
|
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.
|
||||||||
|
|
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, |
|
Envestnet, Inc.
|
||||||||
|
|
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 |
|
(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, |
|
(h) |
An estimated normalized tax rate of |
|
Envestnet, Inc.
|
||||||||
|
|
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.
|
||||||||||||||||
|
|
Three Months Ended March 31, 2024 |
||||||||||||||
|
|
Envestnet
|
|
Envestnet Data
|
|
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) |
|
|
Envestnet, Inc.
|
||||||||||||||||
|
|
Three months ended March 31, 2023 |
||||||||||||||
|
|
Envestnet
|
|
Envestnet Data
|
|
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) |
|
|
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
|
|
Gross |
|
|
|
Net |
|
Market |
|
|
|
As of
|
|||||||||
|
|
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
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
Source: Envestnet
