Envestnet Reports Second Quarter 2024 Financial Results
Envestnet (NYSE: ENV) reported its Q2 2024 financial results, showing total revenue increased 11% to $348.3 million compared to Q2 2023. The company experienced a net loss of $79.2 million, or $1.44 per diluted share. However, Adjusted EBITDA rose 39% to $77.8 million, and free cash flow increased 83% to $67.0 million. Asset-based recurring revenue grew 18%, representing 63% of total revenue. The company recognized a non-cash goodwill impairment charge of $96.3 million and a non-cash gain on deconsolidation of $19.5 million. Envestnet's balance sheet showed $122.0 million in cash and $892.5 million in outstanding debt as of June 30, 2024.
Envestnet (NYSE: ENV) ha riportato i risultati finanziari per il secondo trimestre del 2024, mostrando un aumento del fatturato totale del 11% a $348,3 milioni rispetto al Q2 del 2023. L'azienda ha registrato una perdita netta di $79,2 milioni, ovvero $1,44 per azione diluita. Tuttavia, l'EBITDA rettificato è aumentato del 39% a $77,8 milioni, e il flusso di cassa libero è cresciuto dell'83% a $67,0 milioni. I ricavi ricorrenti basati su attivi sono cresciuti del 18%, rappresentando il 63% del fatturato totale. L'azienda ha riconosciuto una rettifica non monetaria dell'avviamento di $96,3 milioni e un guadagno non monetario dalla deconsolidazione di $19,5 milioni. Il bilancio di Envestnet mostrava $122,0 milioni in contante e $892,5 milioni di debito residuo al 30 giugno 2024.
Envestnet (NYSE: ENV) reportó sus resultados financieros del segundo trimestre de 2024, mostrando un aumento del 11% en ingresos totales, alcanzando $348.3 millones en comparación con el segundo trimestre de 2023. La compañía experimentó una pérdida neta de $79.2 millones, o $1.44 por acción diluida. Sin embargo, el EBITDA ajustado aumentó un 39% hasta llegar a $77.8 millones, y el flujo de caja libre creció un 83% alcanzando $67.0 millones. Los ingresos recurrentes basados en activos crecieron un 18%, representando el 63% de los ingresos totales. La compañía reconoció un cargo no monetario por deterioro de buena voluntad de $96.3 millones y una ganancia no monetaria por desconsolidación de $19.5 millones. El balance de Envestnet mostró $122.0 millones en efectivo y $892.5 millones en deuda pendiente al 30 de junio de 2024.
엔베스트넷(뉴욕증권거래소: ENV)이 2024년 2분기 재무 결과를 발표했습니다. 총 수익이 지난해 같은 기간 대비 11% 증가하여 3억 4,830만 달러에 달했습니다. 회사는 7,920만 달러의 순손실을 기록했으며, 희석주당 손실은 1.44달러입니다. 그러나 조정 EBITDA는 39% 증가하여 7,780만 달러에 이르렀고, 자유 현금 흐름은 83% 증가하여 6,700만 달러에 달했습니다. 자산 기반 반복 수익은 18% 증가하여 총 수익의 63%를 차지했습니다. 회사는 9,630만 달러의 비현금 선의 손상 차감액과 1,950만 달러의 비현금 디컨솔리데이션 이익을 인정했습니다. 또한 엔베스트넷의 대차대조표는 2024년 6월 30일 기준으로 현금 1억 2,200만 달러와 미지급 부채 8억 9,250만 달러를 나타냈습니다.
Envestnet (NYSE: ENV) a annoncé ses résultats financiers pour le deuxième trimestre de 2024, montrant une augmentation des revenus totaux de 11% à 348,3 millions de dollars par rapport au deuxième trimestre de 2023. L'entreprise a enregistré une perte nette de 79,2 millions de dollars, soit 1,44 dollar par action diluée. Cependant, l'EBITDA ajusté a augmenté de 39% pour atteindre 77,8 millions de dollars, et le flux de trésorerie disponible a augmenté de 83% pour atteindre 67 millions de dollars. Les revenus récurrents basés sur les actifs ont crû de 18%, représentant 63% des revenus totaux. L'entreprise a reconnu un charges de dépréciation de goodwill non monétaires de 96,3 millions de dollars et un gain non monétaire de 19,5 millions de dollars suite à une déconsolidation. Le bilan d'Envestnet affichait 122,0 millions de dollars en liquidités et 892,5 millions de dollars de dettes en cours au 30 juin 2024.
Envestnet (NYSE: ENV) hat die Finanzzahlen für das zweite Quartal 2024 veröffentlicht, bei denen der Gesamtumsatz um 11% auf 348,3 Millionen Dollar im Vergleich zum zweiten Quartal 2023 gestiegen ist. Das Unternehmen verzeichnete einen Nettoverlust von 79,2 Millionen Dollar bzw. 1,44 Dollar pro verwässerter Aktie. Jedoch wuchs das bereinigte EBITDA um 39% auf 77,8 Millionen Dollar und der freie Cashflow stieg um 83% auf 67,0 Millionen Dollar. Der assetbasierte wiederkehrende Umsatz wuchs um 18% und machte 63% des Gesamtumsatzes aus. Das Unternehmen erkannte einen nicht monetären Goodwill-Abschreibungsaufwand von 96,3 Millionen Dollar sowie einen nicht monetären Gewinn aus einer De-Konsolidierung von 19,5 Millionen Dollar an. Die Bilanz von Envestnet wies zum 30. Juni 2024 122,0 Millionen Dollar in bar und 892,5 Millionen Dollar an ausstehenden Schulden aus.
- Total revenue increased 11% year-over-year to $348.3 million
- Adjusted EBITDA rose 39% to $77.8 million
- Free cash flow increased 83% to $67.0 million
- Asset-based recurring revenue grew 18%, representing 63% of total revenue
- Adjusted net income increased 20% to $36.4 million
- Net loss of $79.2 million, compared to $21.4 million loss in Q2 2023
- Non-cash goodwill impairment charge of $96.3 million
- Total operating expenses increased 29% to $423.8 million
- Outstanding debt of $892.5 million as of June 30, 2024
- Professional services and other non-recurring revenue decreased 8%
Insights
Envestnet's Q2 2024 results show a mixed financial picture. While revenue grew
On the positive side, adjusted EBITDA increased by
However, the significant net loss and the need for a goodwill impairment charge raise questions about the company's valuation and future growth prospects. Investors should closely monitor Envestnet's ability to translate revenue growth into consistent profitability.
Envestnet's Q2 results reflect broader trends in the wealth management industry. The
However, the modest
Investors should consider how Envestnet's performance compares to competitors and whether the Bain Capital deal will enhance its market position in the evolving fintech landscape.
The disclosure of a technical default on Envestnet's 2025 Convertible Notes raises governance concerns. Although promptly cured, this clerical error resulted in a misclassification of debt in previous financial statements. While deemed immaterial, it highlights potential weaknesses in internal controls.
Additionally, the correction regarding the accounting treatment of cloud-hosted virtual servers, previously misclassified as finance leases, further underscores the need for enhanced financial reporting processes. These issues, combined with the significant goodwill impairment, may attract regulatory scrutiny.
Investors should monitor any potential shareholder actions or regulatory investigations resulting from these disclosures. The pending Bain Capital transaction adds another layer of complexity, as it will need to navigate these accounting issues during due diligence and deal closure.
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Three months ended |
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Six months ended |
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Key Financial Metrics |
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June 30, |
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% |
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June 30, |
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% |
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(in millions, except per share data) |
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2024 |
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2023 |
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Change |
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2024 |
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2023 |
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Change |
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GAAP: |
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|
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Total revenue |
|
$ |
348.3 |
|
|
$ |
312.4 |
|
|
11 |
% |
|
$ |
673.2 |
|
|
$ |
611.1 |
|
|
10 |
% |
Net loss attributable to Envestnet, Inc. |
|
$ |
(79.2 |
) |
|
$ |
(21.4 |
) |
|
|
* |
|
$ |
(76.7 |
) |
|
$ |
(62.6 |
) |
|
(22 |
)% |
Net loss attributable to Envestnet, Inc. per diluted share |
|
$ |
(1.44 |
) |
|
$ |
(0.39 |
) |
|
* |
|
$ |
(1.39 |
) |
|
$ |
(1.15 |
) |
|
(21 |
)% |
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|
|
|
|
|
|
|
|
|
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Non-GAAP: |
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Adjusted EBITDA(1) |
|
$ |
77.8 |
|
|
$ |
56.0 |
|
|
39 |
% |
|
$ |
148.2 |
|
|
$ |
110.0 |
|
|
35 |
% |
Adjusted net income(1) |
|
$ |
36.4 |
|
|
$ |
30.4 |
|
|
20 |
% |
|
$ |
75.8 |
|
|
$ |
60.5 |
|
|
25 |
% |
Adjusted net income per diluted share(1) |
|
$ |
0.55 |
|
|
$ |
0.46 |
|
|
20 |
% |
|
$ |
1.14 |
|
|
$ |
0.91 |
|
|
25 |
% |
Free cash flow(1) |
|
$ |
67.0 |
|
|
$ |
36.7 |
|
|
83 |
% |
|
$ |
47.1 |
|
|
$ |
(25.1 |
) |
|
* | |
__________________________________________________
*Not meaningful
Jim Fox, Board Chair and Interim CEO, said: "We look forward to the successful completion of our pending transaction with Bain Capital and the value it will deliver to our shareholders. We remain committed to maintaining our leading position, which is based on executing on what our clients need and deepening our relationships with them."
Financial Results for the Second Quarter 2024 Compared to the Second Quarter 2023
Total revenue increased
Total operating expenses increased
Loss from operations was
Adjusted EBITDA(1) increased
Balance Sheet and Liquidity
As of June 30, 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 three and six months ended June 30, 2024 is presented in conjunction with the current organizational structure, with prior periods adjusted accordingly.
Correction of Immaterial Errors
In July 2024, the Company identified that as a result of a clerical error an event of default had occurred pursuant to the indenture under which the Convertible Notes due 2025 had been issued, and therefore the Convertible Notes due 2025 should have been classified as current debt instead of as non-current debt as previously recorded in the condensed consolidated balance sheets. Upon identification, the Company promptly cured the technical default. Upon analysis, the Company concluded that the classification error was immaterial in prior period financial statements as the event of default was caused by a clerical error and was not reflective of noncompliance with any factors impacting the Company’s liquidity or financial covenants. If the Company had identified the technical default in the prior period and classified the debt as current, the matter would have been disclosed and promptly resolved. Therefore, amendment of previously filed reports was not required. However, the Company corrected this immaterial error in the prior year reported within this press release.
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 periods reported within this press release.
Conference Call
Envestnet will host a conference call to discuss second quarter 2024 financial results on August 12, 2024 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 110,000 advisors, 17 of the 20 largest
For more information on Envestnet, please visit http://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 (benefit), depreciation and amortization, goodwill impairment, gain on deconsolidation, 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, fair market value adjustments to investments in private companies, (gain) loss from equity method investments and loss attributable to non‑controlling interest.
“Adjusted net income” represents net income (loss) before income tax provision (benefit), gain (loss) from equity method investments, deferred revenue fair value adjustment, non‑cash interest expense, cash interest on our Convertible Notes, amortization of acquired intangibles, goodwill impairment, gain on deconsolidation, 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, fair market value adjustments to investments in private companies 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 9-15 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 http://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 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. In addition, any statements that refer to our pending merger with affiliates of vehicles managed or advised by Bain Capital Private Equity, LP. (the "Merger"), projections of our future financial performance, our anticipated growth and trends in our business and other characteristics of future events or circumstances are forward-looking statements. 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, the risk that the Merger may not be completed on the anticipated terms in a timely manner or at all, which may adversely affect our business and the price of our common stock; the failure to satisfy any of the conditions to the consummation of the Merger, including the receipt of certain regulatory approvals and the approval of the holders in a majority of the voting power of our common stock; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the merger agreement, including in circumstances requiring us to pay a termination fee; the effect of the announcement or pendency of the Merger on our business relationships, operating results and business relationships, operating results and business generally; risks that the Merger disrupts our current plans and operations (including the ability of certain customers to terminate or amend contracts upon a change of control); our ability to retain, hire and integrate skilled personnel, including our senior management team and maintain relationships with key business partners and customers, and others with whom we do business, in light of the Merger; risks related to diverting management's attention from our ongoing business operations; unexpected costs, charges or expenses resulting from the Merger; the ability to obtain the necessary financing arrangements set forth in the commitment letters received in connection with the Merger; potential litigation relating to the Merger that could be instituted against the parties to the merger agreement or their respective directors, managers or officers; the effects of any outcomes related thereto; certain restrictions during the pendency of the Merger that may impact our ability to pursue certain business opportunities or strategic transactions; uncertainty as to timing of completion of the Merger; risks that the benefits of the Merger are not realized when and as expected; 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. Condensed Consolidated Balance Sheets (in thousands) (unaudited) |
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June 30, |
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December 31, |
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|
|
2024 |
|
2023 |
||
Assets |
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
121,967 |
|
$ |
91,378 |
Fees receivable, net |
|
|
129,252 |
|
|
120,958 |
Prepaid expenses and other current assets |
|
|
57,899 |
|
|
51,472 |
Total current assets |
|
|
309,118 |
|
|
263,808 |
Property and equipment, net |
|
|
45,641 |
|
|
48,223 |
Internally developed software, net |
|
|
205,090 |
|
|
224,713 |
Intangible assets, net |
|
|
311,868 |
|
|
338,068 |
Goodwill |
|
|
690,885 |
|
|
806,563 |
Operating lease right-of-use assets, net |
|
|
65,257 |
|
|
69,154 |
Investments in unconsolidated entities |
|
|
96,755 |
|
|
56,292 |
Other assets |
|
|
70,358 |
|
|
70,431 |
Total assets |
|
$ |
1,794,972 |
|
$ |
1,877,252 |
|
|
|
|
|
||
Liabilities and equity |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Accounts payable, accrued expenses and other current liabilities |
|
$ |
225,508 |
|
$ |
241,424 |
Operating lease liabilities |
|
|
12,149 |
|
|
12,909 |
Deferred revenue |
|
|
34,567 |
|
|
38,201 |
Current portion of debt |
|
|
— |
|
|
314,532 |
Total current liabilities |
|
|
272,224 |
|
|
607,066 |
Debt, net of current portion |
|
|
879,079 |
|
|
562,080 |
Operating lease liabilities, net of current portion |
|
|
95,294 |
|
|
100,830 |
Deferred tax liabilities, net |
|
|
15,208 |
|
|
16,568 |
Other liabilities |
|
|
16,820 |
|
|
16,202 |
Total liabilities |
|
|
1,278,625 |
|
|
1,302,746 |
|
|
|
|
|
||
Equity: |
|
|
|
|
||
Total stockholders’ equity attributable to Envestnet, Inc. |
|
|
516,347 |
|
|
568,191 |
Non-controlling interest |
|
|
— |
|
|
6,315 |
Total liabilities and equity |
|
$ |
1,794,972 |
|
$ |
1,877,252 |
Envestnet, Inc. Condensed Consolidated Statements of Operations (in thousands, except share and per share information) (unaudited) |
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Three Months Ended |
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Six Months Ended |
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|
|
June 30, |
|
June 30, |
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|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
$ |
219,485 |
|
|
$ |
185,762 |
|
|
$ |
422,101 |
|
|
$ |
362,694 |
|
Subscription-based |
|
|
117,988 |
|
|
|
114,959 |
|
|
|
235,450 |
|
|
|
232,038 |
|
Total recurring revenue |
|
|
337,473 |
|
|
|
300,721 |
|
|
|
657,551 |
|
|
|
594,732 |
|
Professional services and other revenue |
|
|
10,800 |
|
|
|
11,713 |
|
|
|
15,672 |
|
|
|
16,409 |
|
Total revenue |
|
|
348,273 |
|
|
|
312,434 |
|
|
|
673,223 |
|
|
|
611,141 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Direct expense |
|
|
144,351 |
|
|
|
124,209 |
|
|
|
270,984 |
|
|
|
233,888 |
|
Employee compensation |
|
|
104,066 |
|
|
|
117,097 |
|
|
|
207,718 |
|
|
|
231,312 |
|
General and administrative |
|
|
52,924 |
|
|
|
54,375 |
|
|
|
104,989 |
|
|
|
108,725 |
|
Depreciation and amortization |
|
|
45,733 |
|
|
|
32,065 |
|
|
|
79,625 |
|
|
|
63,585 |
|
Goodwill impairment |
|
|
96,269 |
|
|
|
— |
|
|
|
96,269 |
|
|
|
— |
|
Gain on deconsolidation |
|
|
(19,523 |
) |
|
|
— |
|
|
|
(19,523 |
) |
|
|
— |
|
Total operating expenses |
|
|
423,820 |
|
|
|
327,746 |
|
|
|
740,062 |
|
|
|
637,510 |
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from operations |
|
|
(75,547 |
) |
|
|
(15,312 |
) |
|
|
(66,839 |
) |
|
|
(26,369 |
) |
Other expense, net |
|
|
(4,788 |
) |
|
|
(5,016 |
) |
|
|
(9,169 |
) |
|
|
(10,011 |
) |
Loss before income tax provision (benefit) and equity method investments |
|
|
(80,335 |
) |
|
|
(20,328 |
) |
|
|
(76,008 |
) |
|
|
(36,380 |
) |
Income tax provision (benefit) |
|
|
(652 |
) |
|
|
418 |
|
|
|
853 |
|
|
|
24,187 |
|
Gain (loss) from equity method investments |
|
|
482 |
|
|
|
(2,386 |
) |
|
|
(1,801 |
) |
|
|
(5,326 |
) |
Net loss |
|
|
(79,201 |
) |
|
|
(23,132 |
) |
|
|
(78,662 |
) |
|
|
(65,893 |
) |
Add: Net loss attributable to non-controlling interest |
|
|
— |
|
|
|
1,716 |
|
|
|
1,974 |
|
|
|
3,249 |
|
Net loss attributable to Envestnet, Inc. |
|
$ |
(79,201 |
) |
|
$ |
(21,416 |
) |
|
$ |
(76,688 |
) |
|
$ |
(62,644 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to Envestnet, Inc. per share: |
|
|
|
|
|
|
|
|
||||||||
Basic and diluted |
|
$ |
(1.44 |
) |
|
$ |
(0.39 |
) |
|
$ |
(1.39 |
) |
|
$ |
(1.15 |
) |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic and diluted |
|
|
55,143,013 |
|
|
|
54,439,733 |
|
|
|
55,013,544 |
|
|
|
54,289,443 |
|
Envestnet, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) |
||||||||
|
|
Six Months Ended |
||||||
|
|
June 30, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(78,662 |
) |
|
$ |
(65,893 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
79,625 |
|
|
|
63,585 |
|
Non-cash compensation expense |
|
|
36,720 |
|
|
|
40,843 |
|
Non-cash interest expense |
|
|
2,817 |
|
|
|
2,251 |
|
Non-cash goodwill impairment |
|
|
96,269 |
|
|
|
— |
|
Non-cash gain on deconsolidation |
|
|
(19,523 |
) |
|
|
— |
|
Loss from equity method investments |
|
|
1,801 |
|
|
|
5,326 |
|
Lease related impairments |
|
|
— |
|
|
|
2,483 |
|
Other |
|
|
2,120 |
|
|
|
(218 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
||||
Fees receivable, net |
|
|
(12,813 |
) |
|
|
(22,357 |
) |
Prepaid expenses and other assets |
|
|
(5,745 |
) |
|
|
(6,762 |
) |
Accounts payable, accrued expenses and other liabilities |
|
|
(14,049 |
) |
|
|
20,070 |
|
Deferred revenue |
|
|
2,494 |
|
|
|
(852 |
) |
Net cash provided by operating activities |
|
|
91,054 |
|
|
|
38,476 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property and equipment |
|
|
(5,172 |
) |
|
|
(16,735 |
) |
Capitalization of internally developed software |
|
|
(38,751 |
) |
|
|
(46,801 |
) |
Deconsolidation of non-controlling interest |
|
|
(11,073 |
) |
|
|
— |
|
Investments in private companies |
|
|
(3,055 |
) |
|
|
(1,450 |
) |
Acquisition of proprietary technology |
|
|
(3,000 |
) |
|
|
(12,000 |
) |
Issuance of loan receivable to private company |
|
|
— |
|
|
|
(20,000 |
) |
Other |
|
|
— |
|
|
|
319 |
|
Net cash used in investing activities |
|
|
(61,051 |
) |
|
|
(96,667 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds from borrowings on Revolving Credit Facility |
|
|
— |
|
|
|
40,000 |
|
Payments related to Revolving Credit Facility |
|
|
— |
|
|
|
(20,000 |
) |
Payments related to Convertible Notes |
|
|
— |
|
|
|
(45,000 |
) |
Proceeds from exercise of stock options |
|
|
724 |
|
|
|
472 |
|
Payments related to tax withholdings for stock-based compensation |
|
|
(12,155 |
) |
|
|
(13,774 |
) |
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 |
|
|
|
3 |
|
Net cash provided by (used in) financing activities |
|
|
584 |
|
|
|
(48,596 |
) |
Effect of exchange rate on changes on cash and cash equivalents |
|
|
2 |
|
|
|
3,633 |
|
Net change in cash and cash equivalents |
|
|
30,589 |
|
|
|
(103,154 |
) |
Cash and cash equivalents, beginning of period |
|
|
91,378 |
|
|
|
162,173 |
|
Cash and cash equivalents, end of period |
|
$ |
121,967 |
|
|
$ |
59,019 |
|
Envestnet, Inc. Reconciliation of Non-GAAP Financial Measures (in thousands) (unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net loss |
|
$ |
(79,201 |
) |
|
$ |
(23,132 |
) |
|
$ |
(78,662 |
) |
|
$ |
(65,893 |
) |
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
Deferred revenue fair value adjustment (a) |
|
|
— |
|
|
|
17 |
|
|
|
— |
|
|
|
69 |
|
Interest income (b) |
|
|
(2,588 |
) |
|
|
(1,656 |
) |
|
|
(4,571 |
) |
|
|
(3,014 |
) |
Interest expense (b) |
|
|
6,097 |
|
|
|
6,531 |
|
|
|
12,186 |
|
|
|
12,851 |
|
Income tax provision (benefit) |
|
|
(652 |
) |
|
|
418 |
|
|
|
853 |
|
|
|
24,187 |
|
Depreciation and amortization |
|
|
45,733 |
|
|
|
32,065 |
|
|
|
79,625 |
|
|
|
63,585 |
|
Goodwill impairment |
|
|
96,269 |
|
|
|
— |
|
|
|
96,269 |
|
|
|
— |
|
Gain on deconsolidation |
|
|
(19,523 |
) |
|
|
— |
|
|
|
(19,523 |
) |
|
|
— |
|
Non-cash compensation expense (d) |
|
|
17,822 |
|
|
|
21,390 |
|
|
|
36,720 |
|
|
|
40,843 |
|
Restructuring charges and transaction costs (e) |
|
|
8,405 |
|
|
|
6,508 |
|
|
|
10,461 |
|
|
|
10,671 |
|
Severance expense (d) |
|
|
669 |
|
|
|
8,234 |
|
|
|
4,094 |
|
|
|
14,422 |
|
Litigation, regulatory and other governance related expenses (c) |
|
|
4,020 |
|
|
|
2,145 |
|
|
|
6,308 |
|
|
|
5,219 |
|
Foreign currency (b) |
|
|
(229 |
) |
|
|
74 |
|
|
|
46 |
|
|
|
107 |
|
Non-income tax expense adjustment (c) |
|
|
(39 |
) |
|
|
(30 |
) |
|
|
(88 |
) |
|
|
(198 |
) |
Fair market value adjustments to investments in private companies (b) |
|
|
1,508 |
|
|
|
67 |
|
|
|
1,508 |
|
|
|
67 |
|
(Gain) loss from equity method investments |
|
|
(482 |
) |
|
|
2,386 |
|
|
|
1,801 |
|
|
|
5,326 |
|
Loss attributable to non-controlling interest |
|
|
— |
|
|
|
1,027 |
|
|
|
1,160 |
|
|
|
1,805 |
|
Adjusted EBITDA |
|
$ |
77,809 |
|
|
$ |
56,044 |
|
|
$ |
148,187 |
|
|
$ |
110,047 |
|
__________________________________________________________
(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 June 30, 2024 and 2023, |
Envestnet, Inc. Reconciliation of Non-GAAP Financial Measures (in thousands, except share and per share information) (unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net loss |
|
$ |
(79,201 |
) |
|
$ |
(23,132 |
) |
|
$ |
(78,662 |
) |
|
$ |
(65,893 |
) |
Income tax provision (benefit) (a) |
|
|
(652 |
) |
|
|
418 |
|
|
|
853 |
|
|
|
24,187 |
|
Gain (loss) from equity method investments |
|
|
482 |
|
|
|
(2,386 |
) |
|
|
(1,801 |
) |
|
|
(5,326 |
) |
Loss before income tax provision (benefit) and equity method investments |
|
|
(80,335 |
) |
|
|
(20,328 |
) |
|
|
(76,008 |
) |
|
|
(36,380 |
) |
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
Deferred revenue fair value adjustment (b) |
|
|
— |
|
|
|
17 |
|
|
|
— |
|
|
|
69 |
|
Non-cash interest expense (d) |
|
|
1,412 |
|
|
|
1,427 |
|
|
|
2,817 |
|
|
|
2,869 |
|
Cash interest - Convertible Notes (d) |
|
|
4,369 |
|
|
|
4,543 |
|
|
|
8,738 |
|
|
|
9,108 |
|
Amortization of acquired intangibles (e) |
|
|
14,457 |
|
|
|
15,720 |
|
|
|
29,199 |
|
|
|
32,660 |
|
Goodwill impairment |
|
|
96,269 |
|
|
|
— |
|
|
|
96,269 |
|
|
|
— |
|
Gain on deconsolidation |
|
|
(19,523 |
) |
|
|
— |
|
|
|
(19,523 |
) |
|
|
— |
|
Non-cash compensation expense (f) |
|
|
17,822 |
|
|
|
21,390 |
|
|
|
36,720 |
|
|
|
40,843 |
|
Restructuring charges and transaction costs (g) |
|
|
8,405 |
|
|
|
6,508 |
|
|
|
10,461 |
|
|
|
10,671 |
|
Severance expense (f) |
|
|
669 |
|
|
|
8,234 |
|
|
|
4,094 |
|
|
|
14,422 |
|
Litigation, regulatory and other governance related expenses (c) |
|
|
4,020 |
|
|
|
2,145 |
|
|
|
6,308 |
|
|
|
5,219 |
|
Foreign currency (d) |
|
|
(229 |
) |
|
|
74 |
|
|
|
46 |
|
|
|
107 |
|
Non-income tax expense adjustment (c) |
|
|
(39 |
) |
|
|
(30 |
) |
|
|
(88 |
) |
|
|
(198 |
) |
Fair market value adjustments to investments in private companies (d) |
|
|
1,508 |
|
|
|
67 |
|
|
|
1,508 |
|
|
|
67 |
|
Loss attributable to non-controlling interest |
|
|
— |
|
|
|
1,027 |
|
|
|
1,160 |
|
|
|
1,805 |
|
Adjusted net income before income tax effect |
|
|
48,805 |
|
|
|
40,794 |
|
|
|
101,701 |
|
|
|
81,262 |
|
Income tax effect (h) |
|
|
(12,445 |
) |
|
|
(10,403 |
) |
|
|
(25,934 |
) |
|
|
(20,722 |
) |
Adjusted net income |
|
$ |
36,360 |
|
|
$ |
30,391 |
|
|
$ |
75,767 |
|
|
$ |
60,540 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic number of weighted average shares outstanding |
|
|
55,143,013 |
|
|
|
54,439,733 |
|
|
|
55,013,544 |
|
|
|
54,289,443 |
|
Effect of dilutive shares: |
|
|
|
|
|
|
|
|
||||||||
Convertible Notes |
|
|
10,811,884 |
|
|
|
11,253,471 |
|
|
|
10,811,884 |
|
|
|
11,361,458 |
|
Non-vested RSUs and PSUs |
|
|
590,918 |
|
|
|
316,758 |
|
|
|
527,360 |
|
|
|
445,323 |
|
Options to purchase common stock |
|
|
49,692 |
|
|
|
57,902 |
|
|
|
38,996 |
|
|
|
73,271 |
|
Diluted number of weighted average shares outstanding |
|
|
66,595,507 |
|
|
|
66,067,864 |
|
|
|
66,391,784 |
|
|
|
66,169,495 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income per diluted share |
|
$ |
0.55 |
|
|
$ |
0.46 |
|
|
$ |
1.14 |
|
|
$ |
0.91 |
|
__________________________________________________________
(a) |
For the three months ended June 30, 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 June 30, 2024 and 2023, |
(h) |
An estimated normalized tax rate of |
Envestnet, Inc. Reconciliation of Non-GAAP Financial Measures (in thousands) (unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
|
$ |
89,110 |
|
|
$ |
72,149 |
|
|
$ |
91,054 |
|
|
$ |
38,476 |
|
Less: Purchases of property and equipment |
|
|
(3,272 |
) |
|
|
(12,333 |
) |
|
|
(5,172 |
) |
|
|
(16,735 |
) |
Less: Capitalization of internally developed software |
|
|
(18,798 |
) |
|
|
(23,137 |
) |
|
|
(38,751 |
) |
|
|
(46,801 |
) |
Free cash flow |
|
$ |
67,040 |
|
|
$ |
36,679 |
|
|
$ |
47,131 |
|
|
$ |
(25,060 |
) |
Envestnet, Inc. Reconciliation of Non-GAAP Financial Measures Segment Information (in thousands) (unaudited) |
||||||||||||||||
|
|
Three Months Ended June 30, 2024 |
||||||||||||||
|
|
Envestnet Wealth Solutions |
|
Envestnet Data & Analytics |
|
Nonsegment |
|
Total |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
$ |
219,485 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
219,485 |
|
Subscription-based |
|
|
84,734 |
|
|
|
33,254 |
|
|
|
— |
|
|
|
117,988 |
|
Total recurring revenue |
|
|
304,219 |
|
|
|
33,254 |
|
|
|
— |
|
|
|
337,473 |
|
Professional services and other revenue |
|
|
7,889 |
|
|
|
2,911 |
|
|
|
— |
|
|
|
10,800 |
|
Total revenue |
|
|
312,108 |
|
|
|
36,165 |
|
|
|
— |
|
|
|
348,273 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Direct expense |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
|
130,116 |
|
|
|
— |
|
|
|
— |
|
|
|
130,116 |
|
Subscription-based |
|
|
1,474 |
|
|
|
7,174 |
|
|
|
— |
|
|
|
8,648 |
|
Professional services and other |
|
|
5,587 |
|
|
|
— |
|
|
|
— |
|
|
|
5,587 |
|
Total direct expense |
|
|
137,177 |
|
|
|
7,174 |
|
|
|
— |
|
|
|
144,351 |
|
Employee compensation |
|
|
77,210 |
|
|
|
11,872 |
|
|
|
14,984 |
|
|
|
104,066 |
|
General and administrative |
|
|
25,698 |
|
|
|
15,270 |
|
|
|
11,956 |
|
|
|
52,924 |
|
Depreciation and amortization |
|
|
38,375 |
|
|
|
7,358 |
|
|
|
— |
|
|
|
45,733 |
|
Goodwill impairment |
|
|
— |
|
|
|
96,269 |
|
|
|
— |
|
|
|
96,269 |
|
Gain on deconsolidation |
|
|
(19,523 |
) |
|
|
— |
|
|
|
— |
|
|
|
(19,523 |
) |
Total operating expenses |
|
|
258,937 |
|
|
|
137,943 |
|
|
|
26,940 |
|
|
|
423,820 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
|
|
53,171 |
|
|
|
(101,778 |
) |
|
|
(26,940 |
) |
|
|
(75,547 |
) |
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
|
38,375 |
|
|
|
7,358 |
|
|
|
— |
|
|
|
45,733 |
|
Goodwill impairment |
|
|
— |
|
|
|
96,269 |
|
|
|
— |
|
|
|
96,269 |
|
Gain on deconsolidation |
|
|
(19,523 |
) |
|
|
— |
|
|
|
— |
|
|
|
(19,523 |
) |
Non-cash compensation expense (b) |
|
|
11,360 |
|
|
|
1,904 |
|
|
|
4,558 |
|
|
|
17,822 |
|
Restructuring charges and transaction costs (c) |
|
|
2,063 |
|
|
|
60 |
|
|
|
6,282 |
|
|
|
8,405 |
|
Severance expense (b) |
|
|
632 |
|
|
|
— |
|
|
|
37 |
|
|
|
669 |
|
Litigation, regulatory and other governance related expenses (a) |
|
|
— |
|
|
|
4,020 |
|
|
|
— |
|
|
|
4,020 |
|
Non-income tax expense adjustment (a) |
|
|
(39 |
) |
|
|
— |
|
|
|
— |
|
|
|
(39 |
) |
Adjusted EBITDA |
|
$ |
86,039 |
|
|
$ |
7,833 |
|
|
$ |
(16,063 |
) |
|
$ |
77,809 |
|
__________________________________________________________
(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. Reconciliation of Non-GAAP Financial Measures Segment Information (in thousands) (unaudited) |
||||||||||||||||
|
|
Six Months Ended June 30, 2024 |
||||||||||||||
|
|
Envestnet Wealth Solutions |
|
Envestnet Data & Analytics |
|
Nonsegment |
|
Total |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
$ |
422,101 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
422,101 |
|
Subscription-based |
|
|
168,902 |
|
|
|
66,548 |
|
|
|
— |
|
|
|
235,450 |
|
Total recurring revenue |
|
|
591,003 |
|
|
|
66,548 |
|
|
|
— |
|
|
|
657,551 |
|
Professional services and other revenue |
|
|
10,915 |
|
|
|
4,757 |
|
|
|
— |
|
|
|
15,672 |
|
Total revenue |
|
|
601,918 |
|
|
|
71,305 |
|
|
|
— |
|
|
|
673,223 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Direct expense: |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
|
248,519 |
|
|
|
— |
|
|
|
— |
|
|
|
248,519 |
|
Subscription-based |
|
|
2,905 |
|
|
|
13,973 |
|
|
|
— |
|
|
|
16,878 |
|
Professional services and other |
|
|
5,587 |
|
|
|
— |
|
|
|
— |
|
|
|
5,587 |
|
Total direct expense |
|
|
257,011 |
|
|
|
13,973 |
|
|
|
— |
|
|
|
270,984 |
|
Employee compensation |
|
|
152,406 |
|
|
|
23,564 |
|
|
|
31,748 |
|
|
|
207,718 |
|
General and administrative |
|
|
54,730 |
|
|
|
30,584 |
|
|
|
19,675 |
|
|
|
104,989 |
|
Depreciation and amortization |
|
|
65,193 |
|
|
|
14,432 |
|
|
|
— |
|
|
|
79,625 |
|
Goodwill impairment |
|
|
— |
|
|
|
96,269 |
|
|
|
— |
|
|
|
96,269 |
|
Gain on deconsolidation |
|
|
(19,523 |
) |
|
|
— |
|
|
|
— |
|
|
|
(19,523 |
) |
Total operating expenses |
|
|
509,817 |
|
|
|
178,822 |
|
|
|
51,423 |
|
|
|
740,062 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
|
|
92,101 |
|
|
|
(107,517 |
) |
|
|
(51,423 |
) |
|
|
(66,839 |
) |
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
|
65,193 |
|
|
|
14,432 |
|
|
|
— |
|
|
|
79,625 |
|
Goodwill impairment |
|
|
— |
|
|
|
96,269 |
|
|
|
— |
|
|
|
96,269 |
|
Gain on deconsolidation |
|
|
(19,523 |
) |
|
|
— |
|
|
|
— |
|
|
|
(19,523 |
) |
Non-cash compensation expense (b) |
|
|
22,747 |
|
|
|
3,768 |
|
|
|
10,205 |
|
|
|
36,720 |
|
Restructuring charges and transaction costs (c) |
|
|
2,106 |
|
|
|
739 |
|
|
|
7,616 |
|
|
|
10,461 |
|
Severance expense (b) |
|
|
2,436 |
|
|
|
13 |
|
|
|
1,645 |
|
|
|
4,094 |
|
Litigation, regulatory and other governance related expenses (a) |
|
|
— |
|
|
|
6,308 |
|
|
|
— |
|
|
|
6,308 |
|
Non-income tax expense adjustment (a) |
|
|
(88 |
) |
|
|
— |
|
|
|
— |
|
|
|
(88 |
) |
Loss attributable to non-controlling interest |
|
|
1,160 |
|
|
|
— |
|
|
|
— |
|
|
|
1,160 |
|
Adjusted EBITDA |
|
$ |
166,132 |
|
|
$ |
14,012 |
|
|
$ |
(31,957 |
) |
|
$ |
148,187 |
|
__________________________________________________________
(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. Reconciliation of Non-GAAP Financial Measures Segment Information (continued) (in thousands) (unaudited) |
||||||||||||||||
|
|
Three months ended June 30, 2023 |
||||||||||||||
|
|
Envestnet Wealth Solutions |
|
Envestnet Data & Analytics |
|
Nonsegment |
|
Total |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
$ |
185,762 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
185,762 |
|
Subscription-based |
|
|
79,744 |
|
|
|
35,215 |
|
|
|
— |
|
|
|
114,959 |
|
Total recurring revenue |
|
|
265,506 |
|
|
|
35,215 |
|
|
|
— |
|
|
|
300,721 |
|
Professional services and other revenue |
|
|
10,318 |
|
|
|
1,395 |
|
|
|
— |
|
|
|
11,713 |
|
Total revenue |
|
|
275,824 |
|
|
|
36,610 |
|
|
|
— |
|
|
|
312,434 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Direct expense: |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
|
108,532 |
|
|
|
— |
|
|
|
— |
|
|
|
108,532 |
|
Subscription-based |
|
|
1,857 |
|
|
|
5,788 |
|
|
|
— |
|
|
|
7,645 |
|
Professional services and other |
|
|
8,032 |
|
|
|
— |
|
|
|
— |
|
|
|
8,032 |
|
Total direct expense |
|
|
118,421 |
|
|
|
5,788 |
|
|
|
— |
|
|
|
124,209 |
|
Employee compensation |
|
|
77,898 |
|
|
|
19,839 |
|
|
|
19,360 |
|
|
|
117,097 |
|
General and administrative |
|
|
31,225 |
|
|
|
14,792 |
|
|
|
8,358 |
|
|
|
54,375 |
|
Depreciation and amortization |
|
|
25,575 |
|
|
|
6,490 |
|
|
|
— |
|
|
|
32,065 |
|
Total operating expenses |
|
|
253,119 |
|
|
|
46,909 |
|
|
|
27,718 |
|
|
|
327,746 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
|
|
22,705 |
|
|
|
(10,299 |
) |
|
|
(27,718 |
) |
|
|
(15,312 |
) |
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
Deferred revenue fair value adjustment (a) |
|
|
17 |
|
|
|
— |
|
|
|
— |
|
|
|
17 |
|
Depreciation and amortization |
|
|
25,575 |
|
|
|
6,490 |
|
|
|
— |
|
|
|
32,065 |
|
Non-cash compensation expense (c) |
|
|
12,325 |
|
|
|
2,445 |
|
|
|
6,620 |
|
|
|
21,390 |
|
Restructuring charges and transaction costs (d) |
|
|
5,414 |
|
|
|
69 |
|
|
|
1,025 |
|
|
|
6,508 |
|
Severance expense (c) |
|
|
1,853 |
|
|
|
3,120 |
|
|
|
3,261 |
|
|
|
8,234 |
|
Litigation, regulatory and other governance related expenses (b) |
|
|
— |
|
|
|
2,210 |
|
|
|
(65 |
) |
|
|
2,145 |
|
Non-income tax expense adjustment (b) |
|
|
(25 |
) |
|
|
(5 |
) |
|
|
— |
|
|
|
(30 |
) |
Loss attributable to non-controlling interest |
|
|
1,027 |
|
|
|
— |
|
|
|
— |
|
|
|
1,027 |
|
Adjusted EBITDA |
|
$ |
68,891 |
|
|
$ |
4,030 |
|
|
$ |
(16,877 |
) |
|
$ |
56,044 |
|
__________________________________________________________
(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. Reconciliation of Non-GAAP Financial Measures Segment Information (in thousands) (unaudited) |
||||||||||||||||
|
|
Six months ended June 30, 2023 |
||||||||||||||
|
|
Envestnet Wealth Solutions |
|
Envestnet Data & Analytics |
|
Nonsegment |
|
Total |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
$ |
362,694 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
362,694 |
|
Subscription-based |
|
|
160,214 |
|
|
|
71,824 |
|
|
|
— |
|
|
|
232,038 |
|
Total recurring revenue |
|
|
522,908 |
|
|
|
71,824 |
|
|
|
— |
|
|
|
594,732 |
|
Professional services and other revenue |
|
|
13,565 |
|
|
|
2,844 |
|
|
|
— |
|
|
|
16,409 |
|
Total revenue |
|
|
536,473 |
|
|
|
74,668 |
|
|
|
— |
|
|
|
611,141 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Direct expense: |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
|
211,155 |
|
|
|
— |
|
|
|
— |
|
|
|
211,155 |
|
Subscription-based |
|
|
3,635 |
|
|
|
11,062 |
|
|
|
— |
|
|
|
14,697 |
|
Professional services and other |
|
|
8,036 |
|
|
|
— |
|
|
|
— |
|
|
|
8,036 |
|
Total direct expense |
|
|
222,826 |
|
|
|
11,062 |
|
|
|
— |
|
|
|
233,888 |
|
Employee compensation |
|
|
156,945 |
|
|
|
39,081 |
|
|
|
35,286 |
|
|
|
231,312 |
|
General and administrative |
|
|
60,332 |
|
|
|
29,221 |
|
|
|
19,172 |
|
|
|
108,725 |
|
Depreciation and amortization |
|
|
51,067 |
|
|
|
12,518 |
|
|
|
— |
|
|
|
63,585 |
|
Total operating expenses |
|
|
491,170 |
|
|
|
91,882 |
|
|
|
54,458 |
|
|
|
637,510 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
|
|
45,303 |
|
|
|
(17,214 |
) |
|
|
(54,458 |
) |
|
|
(26,369 |
) |
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
Deferred revenue fair value adjustment (a) |
|
|
69 |
|
|
|
— |
|
|
|
— |
|
|
|
69 |
|
Depreciation and amortization |
|
|
51,067 |
|
|
|
12,518 |
|
|
|
— |
|
|
|
63,585 |
|
Non-cash compensation expense (c) |
|
|
23,792 |
|
|
|
4,882 |
|
|
|
12,169 |
|
|
|
40,843 |
|
Restructuring charges and transaction costs (d) |
|
|
6,553 |
|
|
|
312 |
|
|
|
3,806 |
|
|
|
10,671 |
|
Severance expense (c) |
|
|
5,652 |
|
|
|
5,325 |
|
|
|
3,445 |
|
|
|
14,422 |
|
Litigation, regulatory and other governance related expenses (b) |
|
|
— |
|
|
|
3,534 |
|
|
|
1,685 |
|
|
|
5,219 |
|
Non-income tax expense adjustment (b) |
|
|
(127 |
) |
|
|
(71 |
) |
|
|
— |
|
|
|
(198 |
) |
Loss attributable to non-controlling interest |
|
|
1,805 |
|
|
|
— |
|
|
|
— |
|
|
|
1,805 |
|
Adjusted EBITDA |
|
$ |
134,114 |
|
|
$ |
9,286 |
|
|
$ |
(33,353 |
) |
|
$ |
110,047 |
|
__________________________________________________________
(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, advisors and firms data)
(unaudited)
Envestnet Wealth Solutions Segment
The following table provides information regarding the amount of assets and number of accounts and advisors supported by the Envestnet Wealth Solutions platform:
|
|
As of |
|||||||||||||
|
|
June 30, |
|
September 30, |
|
December 31, |
|
March 31, |
|
June 30, |
|||||
|
|
2023 |
|
2023 |
|
2023 |
|
2024 |
|
2024 |
|||||
Platform Assets |
|
|
|
|
|
|
|
|
|
|
|||||
Assets under Management (“AUM”) |
|
$ |
384,773 |
|
$ |
375,408 |
|
$ |
416,001 |
|
$ |
452,464 |
|
$ |
471,978 |
Assets under Administration (“AUA”) |
|
|
394,078 |
|
|
398,082 |
|
|
430,846 |
|
|
471,401 |
|
|
471,479 |
Total AUM/A |
|
|
778,851 |
|
|
773,490 |
|
|
846,847 |
|
|
923,865 |
|
|
943,457 |
Subscription |
|
|
4,643,313 |
|
|
4,579,248 |
|
|
4,959,514 |
|
|
5,158,180 |
|
|
5,327,939 |
Total Platform Assets |
|
$ |
5,422,164 |
|
$ |
5,352,738 |
|
$ |
5,806,361 |
|
$ |
6,082,045 |
|
$ |
6,271,396 |
Platform Accounts |
|
|
|
|
|
|
|
|
|
|
|||||
AUM |
|
|
1,609,677 |
|
|
1,614,873 |
|
|
1,640,879 |
|
|
1,688,044 |
|
|
1,752,768 |
AUA |
|
|
1,144,375 |
|
|
1,257,094 |
|
|
1,254,962 |
|
|
1,315,442 |
|
|
1,325,370 |
Total AUM/A |
|
|
2,754,052 |
|
|
2,871,967 |
|
|
2,895,841 |
|
|
3,003,486 |
|
|
3,078,138 |
Subscription |
|
|
15,916,955 |
|
|
16,072,848 |
|
|
16,248,598 |
|
|
16,641,631 |
|
|
16,364,088 |
Total Platform Accounts |
|
|
18,671,007 |
|
|
18,944,815 |
|
|
19,144,439 |
|
|
19,645,117 |
|
|
19,442,226 |
Advisors |
|
|
|
|
|
|
|
|
|
|
|||||
AUM/A |
|
|
38,809 |
|
|
38,078 |
|
|
38,697 |
|
|
38,814 |
|
|
38,484 |
Subscription |
|
|
68,439 |
|
|
69,318 |
|
|
69,973 |
|
|
70,262 |
|
|
71,568 |
Total Advisors |
|
|
107,248 |
|
|
107,396 |
|
|
108,670 |
|
|
109,076 |
|
|
110,052 |
The following tables summarize the changes in the amount of AUM/A assets and number of AUM/A accounts:
|
|
Asset Rollforward - Three Months Ended June 30, 2024 |
||||||||||||||||||||||
|
|
As of March 31, |
|
Gross |
|
|
|
Net |
|
Market |
|
|
|
As of June 30, |
||||||||||
|
|
2024 |
|
Sales |
|
Redemptions |
|
Flows |
|
Impact |
|
Reclassifications |
|
2024 |
||||||||||
|
|
(in millions, except account data) |
||||||||||||||||||||||
AUM |
|
$ |
452,464 |
|
$ |
32,468 |
|
$ |
(18,900 |
) |
|
$ |
13,568 |
|
|
$ |
4,186 |
|
$ |
1,760 |
|
|
$ |
471,978 |
AUA |
|
|
471,401 |
|
|
32,847 |
|
|
(35,790 |
) |
|
|
(2,943 |
) |
|
|
6,032 |
|
|
(3,011 |
) |
|
|
471,479 |
Total AUM/A |
|
$ |
923,865 |
|
$ |
65,315 |
|
$ |
(54,690 |
) |
|
$ |
10,625 |
|
|
$ |
10,218 |
|
$ |
(1,251 |
) |
|
$ |
943,457 |
Fee-Based Accounts |
|
|
3,003,486 |
|
|
|
|
|
|
82,230 |
|
|
|
|
|
(7,578 |
) |
|
|
3,078,138 |
||||
The above AUM/A gross sales figures for the three months ended June 30, 2024 include
|
|
Asset Rollforward - Six Months Ended June 30, 2024 |
|||||||||||||||||||||
|
|
As of December 31, |
|
Gross |
|
|
|
Net |
|
Market |
|
|
|
As of June 30, |
|||||||||
|
|
2023 |
|
Sales |
|
Redemptions |
|
Flows |
|
Impact |
|
Reclassifications |
|
2024 |
|||||||||
|
|
(in millions, except account data) |
|||||||||||||||||||||
AUM |
|
$ |
416,001 |
|
$ |
64,595 |
|
$ |
(38,501 |
) |
|
$ |
26,094 |
|
$ |
26,880 |
|
$ |
3,003 |
|
|
$ |
471,978 |
AUA |
|
|
430,846 |
|
|
78,443 |
|
|
(61,192 |
) |
|
|
17,251 |
|
|
28,715 |
|
|
(5,333 |
) |
|
|
471,479 |
Total AUM/A |
|
$ |
846,847 |
|
$ |
143,038 |
|
$ |
(99,693 |
) |
|
$ |
43,345 |
|
$ |
55,595 |
|
$ |
(2,330 |
) |
|
$ |
943,457 |
Fee-Based Accounts |
|
|
2,895,841 |
|
|
|
|
|
|
194,863 |
|
|
|
|
(12,566 |
) |
|
|
3,078,138 |
||||
The above AUM/A gross sales figures for the six months ended June 30, 2024 include
Asset and account figures in the “Reclassifications” column for the three and six months ended June 30, 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 number of paid end-users and firms using the Envestnet Data & Analytics platform:
|
|
As of |
||||||||
|
|
June 30, |
|
September 30, |
|
December 31, |
|
March 31, |
|
June 30, |
|
|
2023 |
|
2023 |
|
2023 |
|
2024 |
|
2024 |
Number of paid end-users |
|
38.0 |
|
42.3 |
|
38.3 |
|
43.8 |
|
44.3 |
Number of firms |
|
1,339 |
|
1,322 |
|
1,324 |
|
1,323 |
|
1,182 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808530787/en/
Investor Relations
investor.relations@envestnet.com
(312) 827-3940
Media Relations
media@envestnet.com
Source: Envestnet
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