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, 2023.
Three months ended
Key Financial Metrics
March 31,
%
(in millions, except per share
data)
2023
2022
Change
GAAP:
Total revenue
$
298.7
$
321.4
(7
)%
Net loss attributable to Envestnet,
Inc.
$
(41.2
)
$
(13.9
)
*
Net loss attributable to Envestnet, Inc.
per diluted share
$
(0.76
)
$
(0.25
)
*
Non-GAAP:
Adjusted revenue(1)
$
298.8
$
321.4
(7
)%
Adjusted EBITDA(1)
$
55.4
$
55.7
(1
)%
Adjusted net income(1)
$
30.1
$
31.0
(3
)%
Adjusted net income per diluted
share(1)
$
0.46
$
0.47
(2
)%
________________________________________________________ *Not
meaningful
“Envestnet is paving the way for the future of advice- providing
more services and solutions through integrated technology, data and
digital tools. This is the growth strategy for Envestnet and the
industry. We are thriving in the unparalleled change and embracing
innovation all while modernizing our breadth of offering,” said
Bill Crager, Chief Executive Officer.
“At a time when markets face headwinds, our first quarter
results prove the strength of our business and our engaged clients
are playing back to us the benefits of what we do,” concluded Mr.
Crager.
Financial Results for the First Quarter of 2023
Asset-based recurring revenue decreased 13% during the first
quarter of 2023, representing 59% of total revenue compared to 63%
for the first quarter of 2022. Subscription-based recurring revenue
increased 2% from the first quarter of 2022, and represented 39% of
total revenue for the first quarter of 2023, compared to 36% for
the first quarter of 2022. Professional services and other
non-recurring revenue increased 20% from the prior year period.
Total revenue decreased 7% to $298.7 million for the first quarter
of 2023 from $321.4 million for the first quarter of 2022.
Total operating expenses for the first quarter of 2023 decreased
6% to $309.8 million from $328.1 million in the prior year period.
Direct expense decreased to $109.0 million for the first quarter of
2023 from $125.3 million for the prior year period. Employee
compensation decreased 10% to $114.2 million for the first quarter
of 2023 from $126.8 million for the prior year period. Employee
compensation was 38% of total revenue for the first quarter of
2023, compared to 39% for the prior year period. General and
administrative expenses increased 21% to $53.6 million for the
first quarter of 2023 from $44.3 million for the prior year period.
General and administrative expenses were 18% of total revenue for
the first quarter of 2023, compared to 14% for the prior year
period.
Loss from operations was $11.1 million for the first quarter of
2023 compared to a loss of $6.7 million for the first quarter of
2022. Net loss attributable to Envestnet, Inc. was $41.2 million
for the first quarter of 2023 compared to net loss attributable to
Envestnet, Inc. of $13.9 million for the first quarter of 2022. Net
loss attributable to Envestnet, Inc. per diluted share was $0.76
for the first quarter of 2023 compared to net loss attributable to
Envestnet, Inc. per diluted share of $0.25 for the first quarter of
2022.
Adjusted revenue(1) for the first quarter of 2023 decreased 7%
to $298.8 million from $321.4 million for the prior year period.
Adjusted EBITDA(1) for the first quarter of 2023 decreased to $55.4
million from $55.7 million for the prior year period. Adjusted net
income(1) decreased 3% for the first quarter of 2023 to $30.1
million from $31.0 million for the prior year period. Adjusted net
income per diluted share(1) for the first quarter of 2023 decreased
2% to $0.46 from $0.47 in the first quarter of 2022.
Balance Sheet and Liquidity
As of March 31, 2023, Envestnet had $52.7 million in cash and
cash equivalents and $937.5 million in outstanding debt. Debt as of
March 31, 2023 results from $45.0 million in convertible notes
maturing in June 2023, $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, 2023.
Outlook
Envestnet provided the following outlook for the second quarter
and full year ending December 31, 2023. This outlook is based on
the market value of assets under management or administration as of
March 31, 2023. 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 2023
FY 2023
GAAP:
Revenue:
Asset-based
$
186.0
-
$
187.5
Subscription-based
117.5
-
118.0
Total recurring revenue
303.5
-
305.5
Professional services and other
revenue
8.5
-
9.5
Total revenue
$
312.0
-
$
315.0
$
1,260.0
-
$
1,270.0
Asset-based direct expense
$
109.0
-
$
109.5
Total direct expense
$
123.5
-
$
124.0
Net income
(a)
-
(a)
(a)
-
(a)
Diluted shares outstanding
66.5
66.2
Net income per diluted share
(a)
-
(a)
(a)
-
(a)
Non-GAAP:
Adjusted revenue(1):
Asset-based
$
186.0
-
$
187.5
Subscription-based
117.5
-
118.0
Total recurring revenue
303.5
-
305.5
Professional services and other
revenue
8.5
-
9.5
Total revenue
$
312.0
-
$
315.0
$
1,260.0
-
$
1,270.0
Adjusted EBITDA(1)
$
55.0
-
$
57.0
$
253.0
-
$
260.0
Adjusted net income per diluted
share(1)
$
0.45
-
$
0.46
$
2.11
$
2.19
(a) Envestnet does not forecast net income and net income 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
2023 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 wellness are delivered. Our mission is to empower
advisors and financial service providers with innovative
technology, solutions and intelligence to make financial wellness a
reality for everyone. Approximately 106,000 advisors and
approximately 6,900 companies including: 16 of the 20 largest U.S.
banks, 47 of the 50 largest wealth management and brokerage firms,
over 500 of the largest RIAs and hundreds of FinTech companies,
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 revenue” excludes the effect of purchase accounting on
the fair value of acquired deferred revenue. On January 1, 2022,
the Company adopted ASU 2021-08 whereby it now accounts for
contract assets and contract liabilities obtained upon a business
combination in accordance with ASC 606. Prior to the adoption of
ASU 2021-08, we recorded at fair value the acquired deferred
revenue for contracts in effect at the time the entities were
acquired. Consequently, revenue related to acquired entities for
periods subsequent to the acquisition did not reflect the full
amount of revenue that would have been recorded by these entities
had they remained stand-alone entities. Adjusted revenue has
limitations as a financial measure, should be considered as
supplemental in nature and is not meant as a substitute for revenue
prepared in accordance with GAAP.
“Adjusted EBITDA” represents net income (loss) before deferred
revenue fair value adjustment, interest income, interest expense,
income tax provision (benefit), depreciation and amortization,
non-cash compensation expense, restructuring charges and
transaction costs, severance, litigation, regulatory and other
governance related expenses, foreign currency, non-income tax
expense adjustment, loss allocations from equity method investments
and (income) loss attributable to non-controlling interest.
“Adjusted net income” represents net income (loss) before
deferred revenue fair value adjustment, non-cash interest expense,
cash interest on our convertible notes, non-cash compensation
expense, restructuring charges and transaction costs, severance,
amortization of acquired intangibles, litigation, regulatory and
other governance related expenses, foreign currency, non-income tax
expense adjustment, loss allocations from equity method investments
and (income) 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 (loss) attributable to common stockholders divided by the
diluted number of weighted-average shares outstanding.
See reconciliations of Non-GAAP Financial Measures on pages 9-12
of this press release. 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) or net income (loss) per
share 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
and full year of 2023, 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 the Company’s 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 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; the amount of our debt and our ability to
service 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 (“FinTech”) 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; 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; 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; the failure to protect our intellectual property
rights; our ability to introduce new solutions and services and
enhancements; 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 data security 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;
regulatory compliance failures; 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; changes in the level of inflation; general economic,
political and regulatory conditions; changes in trade, monetary and
fiscal policies and laws; global events, natural disasters,
environmental disasters, terrorist attacks and pandemics or health
crises, including their impact on the economy and trading markets;
social, environmental and sustainability concerns that may arise,
including from our business activities; and management’s response
to these factors. More information regarding these and other risks,
uncertainties and factors is contained in our filings 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/. 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 4, 2023 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,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
52,664
$
162,173
Fees receivable, net
122,704
101,696
Prepaid expenses and other current
assets
47,391
41,363
Total current assets
222,759
305,232
Property and equipment, net
64,144
62,443
Internally developed software, net
196,874
184,558
Intangible assets, net
377,055
379,995
Goodwill
998,428
998,414
Operating lease right-of-use-assets,
net
79,553
81,596
Other assets
117,644
99,927
Total assets
$
2,056,457
$
2,112,165
Liabilities and equity
Current liabilities:
Accounts payable, accrued expenses and
other current liabilities
$
195,983
$
233,866
Operating lease liabilities
12,270
11,949
Deferred revenue
44,445
36,363
Current portion of debt
44,954
44,886
Total current liabilities
297,652
327,064
Debt, net of current portion
872,968
871,769
Operating lease liabilities, net of
current portion
108,568
110,652
Deferred tax liabilities, net
21,445
16,196
Other liabilities
18,644
18,880
Total liabilities
1,319,277
1,344,561
Equity:
Total stockholders’ equity, attributable
to Envestnet, Inc.
725,614
754,567
Non-controlling interest
11,566
13,037
Total liabilities and equity
$
2,056,457
$
2,112,165
Envestnet, Inc.
Condensed Consolidated Statements of Operations (in
thousands, except share and per share information)
(unaudited)
Three Months Ended
March 31,
2023
2022
Revenue:
Asset-based
$
176,932
$
202,717
Subscription-based
117,079
114,734
Total recurring revenue
294,011
317,451
Professional services and other
revenue
4,696
3,912
Total revenue
298,707
321,363
Operating expenses:
Direct expense
108,989
125,282
Employee compensation
114,215
126,849
General and administrative
53,619
44,335
Depreciation and amortization
32,941
31,618
Total operating expenses
309,764
328,084
Loss from operations
(11,057
)
(6,721
)
Other expense, net
(7,935
)
(5,967
)
Loss before income tax provision
(18,992
)
(12,688
)
Income tax provision
23,769
2,020
Net loss
(42,761
)
(14,708
)
Add: Net loss attributable to
non-controlling interest
1,533
849
Net loss attributable to Envestnet,
Inc.
$
(41,228
)
$
(13,859
)
Net loss attributable to Envestnet, Inc.
per share:
Basic and diluted
$
(0.76
)
$
(0.25
)
Weighted average common shares
outstanding:
Basic and diluted
54,143,259
54,903,677
Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows (in
thousands) (unaudited)
Three Months Ended
March 31,
2023
2022
Cash flows from operating activities:
Net loss
$
(42,761
)
$
(14,708
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization
32,941
31,618
Provision for doubtful accounts
571
(1,747
)
Deferred income taxes
5,221
(18,955
)
Non-cash compensation expense
19,453
21,814
Non-cash interest expense
4,498
2,599
Loss allocations from equity method
investments
2,940
1,545
Other
(103
)
(59
)
Changes in operating assets and
liabilities:
Fees receivable, net
(21,579
)
8,661
Prepaid expenses and other assets
(9,858
)
(9,491
)
Accounts payable, accrued expenses and
other liabilities
(32,917
)
(29,113
)
Deferred revenue
8,073
11,097
Net cash (used in) provided by operating
activities
(33,521
)
3,261
Cash flows from investing activities:
Purchases of property and equipment
(4,402
)
(3,896
)
Capitalization of internally developed
software
(23,664
)
(21,671
)
Acquisition of proprietary technology
(10,000
)
(15,000
)
Investments in private companies
(950
)
(3,000
)
Issuance of loan receivable to private
company
(20,000
)
—
Other
260
(2,500
)
Net cash used in investing activities
(58,756
)
(46,067
)
Cash flows from financing activities:
Proceeds from exercise of stock
options
367
658
Payments related to tax withholdings for
stock-based compensation
(10,732
)
(12,570
)
Payments on finance lease obligations
(152
)
(12,454
)
Payments related to revolving credit
facility
—
(1,869
)
Payments related to share repurchases
(9,289
)
—
Purchases of non-controlling units from
third-party shareholders
(1,008
)
—
Other
2
3
Net cash used in financing activities
(20,812
)
(26,232
)
Effect of exchange rate on changes on
cash, cash equivalents and restricted cash
3,580
(627
)
Net change in cash, cash equivalents and
restricted cash
(109,509
)
(69,665
)
Cash, cash equivalents and restricted
cash, beginning of period
162,173
429,428
Cash, cash equivalents and restricted
cash, end of period
$
52,664
$
359,763
(a)
The following table reconciles amounts
from the condensed consolidated balance sheets to cash, cash
equivalents and restricted cash reported within the condensed
consolidated statements of cash flows:
March 31,
March 31,
2023
2022
Cash and cash equivalents
$
52,664
$
359,614
Restricted cash included in prepaid
expenses and other current assets
—
149
Total cash, cash equivalents and
restricted cash
$
52,664
$
359,763
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures (in
thousands) (unaudited)
Three Months Ended
March 31,
2023
2022
Total revenue
$
298,707
$
321,363
Deferred revenue fair value adjustment
(a)
52
54
Adjusted revenue
$
298,759
$
321,417
Net loss
$
(42,761
)
$
(14,708
)
Add (deduct):
Deferred revenue fair value adjustment
(a)
52
54
Interest income (b)
(1,358
)
(321
)
Interest expense (b)
6,320
4,853
Income tax provision
23,769
2,020
Depreciation and amortization
32,941
31,618
Non-cash compensation expense (d)
19,453
21,814
Restructuring charges and transaction
costs (e)
4,163
2,346
Severance (d)
6,188
3,106
Litigation, regulatory and other
governance related expenses (c)
3,074
3,077
Foreign currency
33
(108
)
Non-income tax expense adjustment (c)
(168
)
24
Loss allocations from equity method
investments (b)
2,940
1,545
Loss attributable to non-controlling
interest
778
377
Adjusted EBITDA
$
55,424
$
55,697
(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, 2023
and 2022, $4.1 million and $2.5 million were included within
general and administrative expense, respectively, in the condensed
consolidated statements of operations. For the three months ended
March 31, 2023 and 2022, $0.1 million and $(0.2) million were
included within employee compensation expense, respectively, 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,
2023
2022
Net loss
$
(42,761
)
$
(14,708
)
Income tax provision (a)
23,769
2,020
Loss before income tax provision
(18,992
)
(12,688
)
Add (deduct):
Deferred revenue fair value adjustment
(b)
52
54
Non-cash interest expense (d)
1,442
2,059
Cash interest - Convertible Notes (d)
4,565
2,480
Non-cash compensation expense (e)
19,453
21,814
Restructuring charges and transaction
costs (g)
4,163
2,346
Severance (e)
6,188
3,106
Amortization of acquired intangibles
(f)
16,940
17,520
Litigation, regulatory and other
governance related expenses (c)
3,074
3,077
Foreign currency (d)
33
(108
)
Non-income tax expense adjustment (c)
(168
)
24
Loss allocations from equity method
investments (d)
2,940
1,545
Loss attributable to non-controlling
interest
778
377
Adjusted net income before income tax
effect
40,468
41,606
Income tax effect (h)
(10,319
)
(10,610
)
Adjusted net income
$
30,149
$
30,996
Basic number of weighted-average shares
outstanding
54,143,259
54,903,677
Effect of dilutive shares:
Options to purchase common stock
88,323
156,349
Unvested restricted stock units
463,719
568,914
Convertible notes
11,470,645
9,898,549
Warrants
—
51,764
Diluted number of weighted-average shares
outstanding
66,165,946
65,579,253
Adjusted net income per share -
diluted
$
0.46
$
0.47
(a)
For the three months ended March 31, 2023
and 2022, the effective tax rate computed in accordance with GAAP
equaled (125.2)% and (15.9)%, 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 employee compensation
expense in the condensed consolidated statements of operations.
(f)
Included within depreciation and
amortization expense in the condensed consolidated statements of
operations.
(g)
For the three months ended March 31, 2023
and 2022, $4.1 million and $2.5 million were included within
general and administrative expense, respectively, in the condensed
consolidated statements of operations. For the three months ended
March 31, 2023 and 2022, $0.1 million and $(0.2) million were
included within employee compensation expense, respectively, in the
condensed consolidated statements of operations.
(h)
An estimated normalized effective tax rate
of 25.5% has been used to compute adjusted net income for the three
months ended March 31, 2023 and 2022.
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures Segment
Information (in thousands) (unaudited)
Three Months Ended March 31,
2023
Envestnet Wealth
Solutions
Envestnet Data &
Analytics
Nonsegment
Total
Revenue
$
256,660
$
42,047
$
—
$
298,707
Deferred revenue fair value adjustment
(a)
52
—
—
52
Adjusted revenue
$
256,712
$
42,047
$
—
$
298,759
Revenue:
Asset-based
$
176,932
$
—
$
—
$
176,932
Subscription-based
76,485
40,594
—
117,079
Total recurring revenue
253,417
40,594
—
294,011
Professional services and other
revenue
3,243
1,453
—
4,696
Total revenue
$
256,660
$
42,047
$
—
$
298,707
Operating expenses:
Direct expense
Asset-based
$
102,623
$
—
$
—
$
102,623
Subscription-based
1,422
4,940
—
6,362
Professional services and other
4
—
—
4
Total direct expense
104,049
4,940
—
108,989
Employee compensation
76,883
21,406
15,926
114,215
General and administrative
28,127
14,678
10,814
53,619
Depreciation and amortization
24,138
8,803
—
32,941
Total operating expenses
$
233,197
$
49,827
$
26,740
$
309,764
Income (loss) from operations
$
23,463
$
(7,780
)
$
(26,740
)
$
(11,057
)
Add (deduct):
Deferred revenue fair value adjustment
(a)
52
—
—
52
Depreciation and amortization
24,138
8,803
—
32,941
Non-cash compensation expense (c)
11,242
2,662
5,549
19,453
Restructuring charges and transaction
costs (d)
1,138
244
2,781
4,163
Severance (c)
3,576
2,428
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
$
64,285
$
7,615
$
(16,476
)
$
55,424
(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.
Reconciliation of Non-GAAP Financial Measures Segment
Information (continued) (in thousands)
(unaudited)
Three Months Ended March 31,
2022
Envestnet Wealth
Solutions
Envestnet Data &
Analytics
Nonsegment
Total
Revenue
$
273,568
$
47,795
$
—
$
321,363
Deferred revenue fair value adjustment
(a)
54
—
—
54
Adjusted revenue
$
273,622
$
47,795
$
—
$
321,417
Revenue:
Asset-based
$
202,717
$
—
$
—
$
202,717
Subscription-based
68,537
46,197
—
114,734
Total recurring revenue
271,254
46,197
—
317,451
Professional services and other
revenue
2,314
1,598
—
3,912
Total revenue
$
273,568
$
47,795
$
—
$
321,363
Operating expenses:
Direct expense:
Asset-based
$
117,428
$
—
$
—
$
117,428
Subscription-based
1,365
6,446
—
7,811
Professional services and other
15
28
—
43
Total direct expense
118,808
6,474
—
125,282
Employee compensation
78,644
30,166
18,039
126,849
General and administrative
27,360
8,611
8,364
44,335
Depreciation and amortization
23,487
8,131
—
31,618
Total operating expenses
$
248,299
$
53,382
$
26,403
$
328,084
Income (loss) from operations
$
25,269
$
(5,587
)
$
(26,403
)
$
(6,721
)
Add (deduct):
Deferred revenue fair value adjustment
(a)
54
—
—
54
Depreciation and amortization
23,487
8,131
—
31,618
Non-cash compensation expense (c)
11,290
3,535
6,989
21,814
Restructuring charges and transaction
costs (d)
284
(3
)
2,065
2,346
Severance (c)
1,410
1,642
54
3,106
Litigation, regulatory and other
governance related expenses (b)
—
3,077
—
3,077
Non-income tax expense adjustment (b)
107
(83
)
—
24
Loss attributable to non-controlling
interest
377
—
—
377
Other
—
2
—
2
Adjusted EBITDA
$
62,278
$
10,714
$
(17,295
)
$
55,697
(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)
$2.5 million was included within general
and administrative expense and $(0.2) 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,
2022(1)
2022
2022
2022
2023
Platform Assets
Assets under Management (“AUM”)
$
361,251
$
325,209
$
315,883
$
341,144
$
363,244
Assets under Administration (“AUA”)
432,141
352,840
350,576
367,412
379,843
Total AUM/A
793,392
678,049
666,459
708,556
743,087
Subscription
4,736,537
4,312,114
4,134,414
4,382,109
4,566,971
Total Platform Assets
$
5,529,929
$
4,990,163
$
4,800,873
$
5,090,665
$
5,310,058
Platform Accounts
AUM
1,459,093
1,491,861
1,522,968
1,547,009
1,571,862
AUA
1,186,180
1,061,484
1,135,302
1,135,026
1,142,166
Total AUM/A
2,645,273
2,553,345
2,658,270
2,682,035
2,714,028
Subscription
15,151,569
15,312,144
15,596,403
15,665,020
15,779,980
Total Platform Accounts
17,796,842
17,865,489
18,254,673
18,347,055
18,494,008
Advisors
AUM/A
39,800
38,394
38,417
38,025
38,611
Subscription
67,168
66,838
67,348
67,520
67,843
Total Advisors
106,968
105,232
105,765
105,545
106,454
(1) Certain assets and accounts have been reclassified from AUA
to AUM to better reflect the nature of the services provided to
certain customers.
The following table summarizes the changes in AUM and AUA for
the three months ended March 31, 2023:
As of December 31,
2022
Gross Sales
Redemptions
Net Flows
Market Impact
Reclass to
Subscription
As of March 31, 2023
AUM
$
341,144
$
24,657
$
(15,677
)
$
8,980
$
14,259
$
(1,139
)
$
363,244
AUA
367,412
32,551
(21,547
)
11,004
14,529
(13,102
)
379,843
Total AUM/A
$
708,556
$
57,208
$
(37,224
)
$
19,984
$
28,788
$
(14,241
)
$
743,087
Fee-Based Accounts
2,682,035
116,249
(84,256
)
2,714,028
The above AUM/A gross sales figures include $17.1 billion in new
client conversions. The Company onboarded an additional $48.8
billion in subscription conversions during the three months ended
March 31, 2023, bringing total conversions for the quarter to $65.9
billion.
Asset and account figures in the “Reclass to Subscription”
column for the three months ended March 31, 2023 represent
enterprise customers whose billing arrangements in future periods
are subscription-based, rather than asset-based. Such amounts are
included in Subscription metrics at the end of the quarter in which
the reclassification occurred, with no impact on total platform
assets or accounts.
Envestnet, Inc. Key Metrics
(in millions, except firm data) (unaudited)
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,
2022
2022
2022
2022
2023
Number of paying users
31.4
37.2
38.1
38.8
37.5
Number of firms
1,649
1,731
1,815
1,827
1,851
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005893/en/
Investor Relations investor.relations@envestnet.com (312)
827-3940
Media Relations mediarelations@envestnet.com
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