Envestnet (NYSE: ENV), a leading provider of intelligent systems
for wealth management and financial wellness, today reported
financial results for the three and nine months ended September 30,
2024.
Three months ended
Nine months ended
Key Financial Metrics
September 30,
%
September 30,
%
(in millions, except per share
data)
2024
2023
Change
2024
2023
Change
GAAP:
Total revenue
$
345.9
$
316.8
9%
$
1,019.2
$
928.0
10%
Net income (loss) attributable to
Envestnet, Inc.
$
(1.7
)
$
7.1
(123)%
$
(78.3
)
$
(55.6
)
(41)%
Net income (loss) attributable to
Envestnet, Inc. per diluted share
$
(0.03
)
$
0.13
(123)%
$
(1.42
)
$
(1.02
)
(39)%
Non-GAAP:
Adjusted EBITDA(1)
$
80.5
$
65.3
23%
$
228.7
$
175.4
30%
Adjusted net income(1)
$
46.5
$
36.6
27%
$
122.3
$
97.2
26%
Adjusted net income per diluted
share(1)
$
0.70
$
0.56
25%
$
1.84
$
1.47
25%
Free cash flow(1)
$
76.2
$
9.4
*
$
123.3
$
(15.6
)
*
__________________________________________________ *Not
meaningful
Financial Results for the Third Quarter 2024 Compared to the
Third Quarter 2023
Total revenue increased 9% to $345.9 million for the third
quarter of 2024 from $316.8 million for the third quarter of 2023.
Asset-based recurring revenue increased 16% and represented 65% of
total revenue for the third quarter of 2024, compared to 61% of
total revenue for the third quarter of 2023. Subscription-based
recurring revenue remained consistent and represented 33% of total
revenue for the third quarter of 2024, compared to 36% of total
revenue for the third quarter of 2023. Professional services and
other non-recurring revenue decreased 30% for the third quarter of
2024 from the third quarter of 2023.
Total operating expenses increased 7% to $338.9 million for the
third quarter of 2024 from $316.2 million for the third quarter of
2023. Direct expense increased 13% to $136.5 million for the third
quarter of 2024 from $120.4 million for the third quarter of 2023.
Employee compensation decreased 9% to $103.5 million for the third
quarter of 2024 from $113.3 million for the third quarter of 2023.
Employee compensation was 30% of total revenue for the third
quarter of 2024, compared to 36% of total revenue for the third
quarter of 2023. General and administrative expense increased 27%
to $63.4 million for the third quarter of 2024 from $50.1 million
for the third quarter of 2023. General and administrative expense
was 18% of total revenue for the third quarter of 2024, compared to
16% of total revenue for the third quarter of 2023.
Income from operations was $7.0 million for the third quarter of
2024 compared to income from operations of $0.6 million for the
third quarter of 2023. Net loss attributable to Envestnet, Inc. was
$1.7 million, or $(0.03) per diluted share, for the third quarter
of 2024 compared to net income attributable to Envestnet, Inc. of
$7.1 million, or $0.13 per diluted share, for the third quarter of
2023.
Adjusted EBITDA(1) increased 23% to $80.5 million for the third
quarter of 2024 from $65.3 million for the third quarter of 2023.
Adjusted net income(1) increased 27% to $46.5 million, or $0.70 per
diluted share, for the third quarter of 2024 from $36.6 million, or
$0.56 per diluted share, for the third quarter of 2023. Free cash
flow(1) increased to $76.2 million for the third quarter of 2024
from $9.4 million for the third quarter of 2023.
Balance Sheet and Liquidity
As of September 30, 2024, Envestnet had $193.4 million in cash
and cash equivalents and $892.5 million in outstanding debt. Debt
as of September 30, 2024 consisted of $317.5 million in convertible
notes maturing in 2025 and $575.0 million in convertible notes
maturing in 2027. Envestnet's $500.0 million revolving credit
facility was undrawn as of September 30, 2024.
Segment Reporting
On October 1, 2023, the Company changed the composition of its
reportable segments to reflect the way that the Company's chief
operating decision maker reviews the operating results, assesses
performance and allocates resources. All segment information
presented within this Exhibit 99.1 for the three and nine months
ended September 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.
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 111,000 advisors, 17 of the 20 largest U.S. banks, 48 of
the 50 largest wealth management and brokerage firms, over 500 of
the largest RIAs and hundreds of FinTech companies, all of which
leverage Envestnet technology and services that help drive better
outcomes for enterprises, advisors and their clients.
For more information on Envestnet, please visit
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, merger
related costs, Convertible Promissory Note impairment, 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, merger related costs, Convertible
Promissory Note impairment, 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 8-14 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 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 our 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; 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 Middle East and
between Russia and Ukraine, including related sanctions and their
impact on the global economy and capital markets; the concentration
of our revenue from the delivery of our solutions and services to
clients in the financial services industry; our reliance on a
limited number of clients for a material portion of our revenue;
the renegotiation of fees by our clients; changes in the estimates
of fair value of reporting units or of long-lived assets,
particularly goodwill and intangible assets; the amount of our
debt, our ability to service our debt and risks associated with
derivative transactions associated with our debt; limitations on
our ability to access information from third parties or charges for
accessing such information; the targeting of some of our sales
efforts at large financial institutions and large financial
technology companies which prolongs sales cycles, requires
substantial upfront sales costs and results in less predictability
in completing some of our sales; changes in investing patterns on
the assets on which we derive revenue and the freedom of investors
to redeem or withdraw investments generally at any time; the impact
of fluctuations in market conditions and interest rates on the
demand for our products and services and the value of assets under
management or administration; increased geopolitical unrest and
other events outside of our control that could adversely affect the
global economy or specific international, regional and domestic
markets; our ability to keep up with rapid technological change,
evolving industry standards or changing requirements of clients;
risks associated with our international operations; the
competitiveness of our solutions and services as compared to those
of others; liabilities associated with potential, perceived or
actual breaches of fiduciary duties and/or conflicts of interest;
harm to our reputation; the failure to protect our intellectual
property rights; our reliance on outsourcing arrangements; activist
shareholders hindering the execution of our business strategy,
diverting board and management attention and resources and causing
us to incur substantial expenses; public health crises, pandemics
or similar events; our ability to successfully identify potential
acquisition candidates, complete acquisitions and successfully
integrate acquired companies; our ability to successfully execute
the conversion of clients’ assets from their technology platform to
our technology platforms in a timely and accurate manner; our
ability to introduce new solutions and services and enhancements;
regulatory compliance failures; our ability to maintain the
security and integrity of our systems and facilities and to
maintain the privacy of personal information and potential
liabilities for cybersecurity breaches; the effect of privacy laws
and regulations, industry standards and contractual obligations and
changes to these laws, regulations, standards and obligations on
how we operate our business and the negative effects of failure to
comply with these requirements; failure by our customers to obtain
proper permissions or waivers for our use of disclosure of
information; adverse judicial or regulatory proceedings against us;
failure of our solutions, services or systems, or those of third
parties on which we rely, to work properly; potential liability for
use of inaccurate information by third parties provided by us; the
occurrence of a deemed “change of control”; the uncertainty of the
application and interpretation of certain tax laws; issuances of
additional shares of common stock or issuances of shares of
preferred stock or convertible securities on our existing
stockholders; general economic, political and regulatory
conditions; global events, natural disasters, environmental
disasters, terrorist attacks and pandemics, including their impact
on the economy and trading markets; and management’s response to
these factors. More information regarding these and other risks,
uncertainties and factors is contained in our filings with the SEC
which are available on the SEC’s website at http://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
November 7, 2024 and, unless required by law, we undertake no
obligation to publicly revise any forward-looking statement to
reflect circumstances or events after the date of this press
release or to report the occurrence of unanticipated events.
Envestnet, Inc.
Condensed Consolidated Balance Sheets (in thousands)
(unaudited)
September 30,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
193,356
$
91,378
Fees receivable, net
110,098
120,958
Prepaid expenses and other current
assets
59,570
51,472
Total current assets
363,024
263,808
Property and equipment, net
41,632
48,223
Internally developed software, net
207,311
224,713
Intangible assets, net
301,426
338,068
Goodwill
690,885
806,563
Operating lease right-of-use assets,
net
63,600
69,154
Investments in unconsolidated entities
93,378
56,292
Other assets
67,448
70,431
Total assets
$
1,828,704
$
1,877,252
Liabilities and equity
Current liabilities:
Accounts payable, accrued expenses and
other current liabilities
$
261,464
$
241,424
Operating lease liabilities
11,768
12,909
Deferred revenue
28,732
38,201
Current portion of debt
315,896
314,532
Total current liabilities
617,860
607,066
Debt, net of current portion
564,429
562,080
Operating lease liabilities, net of
current portion
93,115
100,830
Deferred tax liabilities, net
15,169
16,568
Other liabilities
11,518
16,202
Total liabilities
1,302,091
1,302,746
Equity:
Total stockholders’ equity attributable to
Envestnet, Inc.
526,613
568,191
Non-controlling interest
—
6,315
Total liabilities and equity
$
1,828,704
$
1,877,252
Envestnet, Inc.
Condensed Consolidated Statements of Operations (in
thousands, except share and per share information)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Revenue:
Asset-based
$
224,980
$
193,901
$
647,081
$
556,595
Subscription-based
115,402
114,939
350,852
346,977
Total recurring revenue
340,382
308,840
997,933
903,572
Professional services and other
revenue
5,567
8,007
21,239
24,416
Total revenue
345,949
316,847
1,019,172
927,988
Operating expenses:
Direct expense
136,488
120,421
407,472
354,309
Employee compensation
103,487
113,334
311,205
344,646
General and administrative
63,438
50,091
168,427
158,816
Depreciation and amortization
35,530
32,400
115,155
95,985
Goodwill impairment
—
—
96,269
—
Gain on deconsolidation
—
—
(19,523
)
—
Total operating expenses
338,943
316,246
1,079,005
953,756
Income (loss) from operations
7,006
601
(59,833
)
(25,768
)
Other expense, net
(4,277
)
(2,001
)
(13,446
)
(12,012
)
Income (loss) before income tax provision
(benefit) and equity method investments
2,729
(1,400
)
(73,279
)
(37,780
)
Income tax provision (benefit)
2,864
(8,824
)
3,717
15,363
Loss from equity method investments
(1,526
)
(2,368
)
(3,327
)
(7,694
)
Net income (loss)
(1,661
)
5,056
(80,323
)
(60,837
)
Add: Net loss attributable to
non-controlling interest
—
2,035
1,974
5,284
Net income (loss) attributable to
Envestnet, Inc.
$
(1,661
)
$
7,091
$
(78,349
)
$
(55,553
)
Net income (loss) attributable to
Envestnet, Inc. per share:
Basic
$
(0.03
)
$
0.13
$
(1.42
)
$
(1.02
)
Diluted
$
(0.03
)
$
0.13
$
(1.42
)
$
(1.02
)
Weighted average common shares
outstanding:
Basic
55,273,324
54,562,270
55,100,239
54,380,231
Diluted
55,273,324
54,970,616
55,100,239
54,380,231
Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows (in
thousands) (unaudited)
Nine Months Ended
September 30,
2024
2023
Cash flows from operating activities:
Net loss
$
(80,323
)
$
(60,837
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
115,155
95,985
Non-cash compensation expense
53,204
58,141
Non-cash interest expense
4,237
4,258
Non-cash goodwill impairment
96,269
—
Non-cash gain on deconsolidation
(19,523
)
—
Non-cash Convertible Promissory Note
impairment
3,700
—
Loss from equity method investments
3,327
7,694
Fair market value adjustments to
investments in private companies
1,508
(2,804
)
Lease related impairments
689
2,483
Other
(1,173
)
(303
)
Changes in operating assets and
liabilities:
Fees receivable, net
6,578
(9,621
)
Prepaid expenses and other assets
(7,944
)
(17,534
)
Accounts payable, accrued expenses and
other liabilities
14,218
278
Deferred revenue
(3,513
)
(3,974
)
Net cash provided by operating
activities
186,409
73,766
Cash flows from investing activities:
Purchases of property and equipment
(5,939
)
(18,275
)
Capitalization of internally developed
software
(57,127
)
(71,117
)
Deconsolidation of non-controlling
interest
(11,073
)
—
Investments in private companies
(3,055
)
(4,175
)
Acquisition of proprietary technology
(4,481
)
(12,000
)
Issuance of loan receivable to private
company
—
(20,000
)
Other
—
400
Net cash used in investing activities
(81,675
)
(125,167
)
Cash flows from financing activities:
Proceeds from borrowings on Revolving
Credit Facility
—
55,000
Payments related to Revolving Credit
Facility
—
(55,000
)
Payments related to Convertible Notes
—
(45,000
)
Proceeds from exercise of stock
options
1,081
839
Payments related to tax withholdings for
stock-based compensation
(15,847
)
(17,004
)
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
4
4
Net cash used in financing activities
(2,750
)
(71,458
)
Effect of exchange rate on changes on cash
and cash equivalents
(6
)
3,897
Net change in cash and cash
equivalents
101,978
(118,962
)
Cash and cash equivalents, beginning of
period
91,378
162,173
Cash and cash equivalents, end of
period
$
193,356
$
43,211
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures (in
thousands) (unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Net income (loss)
$
(1,661
)
$
5,056
$
(80,323
)
$
(60,837
)
Add (deduct):
Deferred revenue fair value adjustment
(a)
—
—
—
69
Interest income (b)
(3,243
)
(1,553
)
(7,814
)
(4,567
)
Interest expense (b)
7,404
6,202
19,590
19,053
Income tax provision (benefit)
2,864
(8,824
)
3,717
15,363
Depreciation and amortization
35,530
32,400
115,155
95,985
Goodwill impairment
—
—
96,269
—
Gain on deconsolidation
—
—
(19,523
)
—
Non-cash compensation expense (d)
16,484
17,298
53,204
58,141
Restructuring charges and transaction
costs (e)
4,002
1,695
9,368
12,366
Merger related costs (c)
9,021
—
14,116
—
Convertible Promissory Note impairment
(c)
3,700
—
3,700
—
Severance expense (d)
3,508
11,482
7,602
25,904
Litigation, regulatory and other
governance related expenses (c)
1,253
604
7,561
5,823
Foreign currency (b)
116
223
162
330
Non-income tax expense adjustment (c)
37
(26
)
(51
)
(224
)
Fair market value adjustments to
investments in private companies (b)
—
(2,871
)
1,508
(2,804
)
Loss from equity method investments
1,526
2,368
3,327
7,694
Loss attributable to non-controlling
interest
—
1,277
1,160
3,082
Adjusted EBITDA
$
80,541
$
65,331
$
228,728
$
175,378
__________________________________________________________
(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 September 30,
2024 and 2023, $2.2 million and $1.2 million, respectively, were
included within general and administrative expense and $1.8 million
and $0.5 million, respectively, were included within employee
compensation expense in the condensed consolidated statements of
operations. For the nine months ended September 30, 2024 and 2023,
$6.3 million and $10.2 million, respectively, were included within
general and administrative expense and $3.1 million and $2.2
million, respectively, were included within employee compensation
expense in the condensed consolidated statements of operations.
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures (in
thousands, except share and per share information)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Net income (loss)
$
(1,661
)
$
5,056
$
(80,323
)
$
(60,837
)
Income tax provision (benefit) (a)
2,864
(8,824
)
3,717
15,363
Loss from equity method investments
(1,526
)
(2,368
)
(3,327
)
(7,694
)
Income (loss) before income tax provision
(benefit) and equity method investments
2,729
(1,400
)
(73,279
)
(37,780
)
Add (deduct):
Deferred revenue fair value adjustment
(b)
—
—
—
69
Non-cash interest expense (d)
1,420
1,389
4,237
4,258
Cash interest - Convertible Notes (d)
5,664
4,368
14,402
13,476
Amortization of acquired intangibles
(e)
14,542
15,124
43,741
47,784
Goodwill impairment
—
—
96,269
—
Gain on deconsolidation
—
—
(19,523
)
—
Non-cash compensation expense (f)
16,484
17,298
53,204
58,141
Restructuring charges and transaction
costs (g)
4,002
1,695
9,368
12,366
Merger related costs (c)
9,021
—
14,116
—
Convertible Promissory Note impairment
(c)
3,700
—
3,700
—
Severance expense (f)
3,508
11,482
7,602
25,904
Litigation, regulatory and other
governance related expenses (c)
1,253
604
7,561
5,823
Foreign currency (d)
116
223
162
330
Non-income tax expense adjustment (c)
37
(26
)
(51
)
(224
)
Fair market value adjustments to
investments in private companies (d)
—
(2,871
)
1,508
(2,804
)
Loss attributable to non-controlling
interest
—
1,277
1,160
3,082
Adjusted net income before income tax
effect
62,476
49,163
164,177
130,425
Income tax effect (h)
(15,931
)
(12,536
)
(41,865
)
(33,258
)
Adjusted net income
$
46,545
$
36,627
$
122,312
$
97,167
Basic number of weighted average shares
outstanding
55,273,324
54,562,270
55,100,239
54,380,231
Effect of dilutive shares:
Convertible Notes
10,811,884
10,811,884
10,811,884
11,176,254
Non-vested RSUs and PSUs
660,528
361,982
607,653
438,520
Options to purchase common stock
41,701
46,364
40,127
64,507
Diluted number of weighted average shares
outstanding
66,787,437
65,782,500
66,559,903
66,059,512
Adjusted net income per diluted share
$
0.70
$
0.56
$
1.84
$
1.47
__________________________________________________________
(a)
For the three months ended September 30,
2024 and 2023, the effective tax rate computed in accordance with
GAAP equaled 238.1% and 234.2%, respectively. For the nine months
ended September 30, 2024 and 2023, the effective tax rate computed
in accordance with GAAP equaled (4.9)% and (33.8)%,
respectively.
(b)
Included within subscription-based revenue
in the condensed consolidated statements of operations.
(c)
Included within general and administrative
expense in the condensed consolidated statements of operations.
(d)
Included within other expense, net in the
condensed consolidated statements of operations.
(e)
Included within depreciation and
amortization expense in the condensed consolidated statements of
operations.
(f)
Included within employee compensation
expense in the condensed consolidated statements of operations.
(g)
For the three months ended September 30,
2024 and 2023, $2.2 million and $1.2 million, respectively, were
included within general and administrative expense and $1.8 million
and $0.5 million, respectively, were included within employee
compensation expense in the condensed consolidated statements of
operations. For the nine months ended September 30, 2024 and 2023,
$6.3 million and $10.2 million, respectively, were included within
general and administrative expense and $3.1 million and $2.2
million, respectively, were included within employee compensation
expense in the condensed consolidated statements of operations.
(h)
An estimated normalized tax rate of 25.5%
has been used to compute adjusted net income for the three and nine
months ended September 30, 2024 and 2023.
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures (in
thousands) (unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Net cash provided by operating
activities
$
95,355
$
35,290
$
186,409
$
73,766
Less: Purchases of property and
equipment
(767
)
(1,540
)
(5,939
)
(18,275
)
Less: Capitalization of internally
developed software
(18,376
)
(24,316
)
(57,127
)
(71,117
)
Free cash flow
$
76,212
$
9,434
$
123,343
$
(15,626
)
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures Segment
Information (in thousands) (unaudited)
Three Months Ended September
30, 2024
Envestnet Wealth
Solutions
Envestnet Data &
Analytics
Nonsegment
Total
Revenue:
Asset-based
$
224,980
$
—
$
—
$
224,980
Subscription-based
82,717
32,685
—
115,402
Total recurring revenue
307,697
32,685
—
340,382
Professional services and other
revenue
3,826
1,741
—
5,567
Total revenue
311,523
34,426
—
345,949
Operating expenses:
Direct expense
Asset-based
127,979
—
—
127,979
Subscription-based
1,513
7,084
—
8,597
Professional services and other
(88
)
—
—
(88
)
Total direct expense
129,404
7,084
—
136,488
Employee compensation
76,350
11,468
15,669
103,487
General and administrative
28,034
15,275
20,129
63,438
Depreciation and amortization
27,425
8,105
—
35,530
Total operating expenses
261,213
41,932
35,798
338,943
Income (loss) from operations
50,310
(7,506
)
(35,798
)
7,006
Add (deduct):
Depreciation and amortization
27,425
8,105
—
35,530
Non-cash compensation expense (b)
11,048
1,823
3,613
16,484
Restructuring charges and transaction
costs (c)
2,738
17
1,247
4,002
Merger related costs (a)
—
—
9,021
9,021
Convertible Promissory Note impairment
(a)
—
3,700
—
3,700
Severance expense (b)
725
—
2,783
3,508
Litigation, regulatory and other
governance related expenses (a)
—
1,253
—
1,253
Non-income tax expense adjustment (a)
37
—
—
37
Adjusted EBITDA
$
92,283
$
7,392
$
(19,134
)
$
80,541
__________________________________________________________
(a)
Included within general and administrative
expense in the condensed consolidated statements of operations.
(b)
Included within employee compensation
expense in the condensed consolidated statements of operations.
(c)
$2.2 million was included within general
and administrative expense and $1.8 million was included within
employee compensation expense in the condensed consolidated
statements of operations.
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures Segment
Information (in thousands) (unaudited)
Nine Months Ended September
30, 2024
Envestnet Wealth
Solutions
Envestnet Data &
Analytics
Nonsegment
Total
Revenue:
Asset-based
$
647,081
$
—
$
—
$
647,081
Subscription-based
251,619
99,233
—
350,852
Total recurring revenue
898,700
99,233
—
997,933
Professional services and other
revenue
14,741
6,498
—
21,239
Total revenue
913,441
105,731
—
1,019,172
Operating expenses:
Direct expense:
Asset-based
376,498
—
—
376,498
Subscription-based
4,418
21,057
—
25,475
Professional services and other
5,499
—
—
5,499
Total direct expense
386,415
21,057
—
407,472
Employee compensation
228,756
35,032
47,417
311,205
General and administrative
82,764
45,859
39,804
168,427
Depreciation and amortization
92,618
22,537
—
115,155
Goodwill impairment
—
96,269
—
96,269
Gain on deconsolidation
(19,523
)
—
—
(19,523
)
Total operating expenses
771,030
220,754
87,221
1,079,005
Income (loss) from operations
142,411
(115,023
)
(87,221
)
(59,833
)
Add (deduct):
Depreciation and amortization
92,618
22,537
—
115,155
Goodwill impairment
—
96,269
—
96,269
Gain on deconsolidation
(19,523
)
—
—
(19,523
)
Non-cash compensation expense (b)
33,795
5,591
13,818
53,204
Restructuring charges and transaction
costs (c)
4,844
756
3,768
9,368
Merger related costs (a)
—
—
14,116
14,116
Convertible Promissory Note impairment
(a)
—
3,700
—
3,700
Severance expense (b)
3,161
13
4,428
7,602
Litigation, regulatory and other
governance related expenses (a)
—
7,561
—
7,561
Non-income tax expense adjustment (a)
(51
)
—
—
(51
)
Loss attributable to non-controlling
interest
1,160
—
—
1,160
Adjusted EBITDA
$
258,415
$
21,404
$
(51,091
)
$
228,728
__________________________________________________________
(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)
$6.3 million was included within general
and administrative expense and $3.1 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 September
30, 2023
Envestnet Wealth
Solutions
Envestnet Data &
Analytics
Nonsegment
Total
Revenue:
Asset-based
$
193,901
$
—
$
—
$
193,901
Subscription-based
81,000
33,939
—
114,939
Total recurring revenue
274,901
33,939
—
308,840
Professional services and other
revenue
4,342
3,665
—
8,007
Total revenue
279,243
37,604
—
316,847
Operating expenses:
Direct expense:
Asset-based
112,938
—
—
112,938
Subscription-based
1,839
6,018
—
7,857
Professional services and other
(374
)
—
—
(374
)
Total direct expense
114,403
6,018
—
120,421
Employee compensation
78,873
20,395
14,066
113,334
General and administrative
30,093
12,388
7,610
50,091
Depreciation and amortization
25,603
6,797
—
32,400
Total operating expenses
248,972
45,598
21,676
316,246
Income (loss) from operations
30,271
(7,994
)
(21,676
)
601
Add (deduct):
Depreciation and amortization
25,603
6,797
—
32,400
Non-cash compensation expense (b)
10,955
2,175
4,168
17,298
Restructuring charges and transaction
costs (c)
1,432
(98
)
361
1,695
Severance expense (b)
4,901
5,902
679
11,482
Litigation, regulatory and other
governance related expenses (a)
—
629
(25
)
604
Non-income tax expense adjustment (a)
(26
)
—
—
(26
)
Loss attributable to non-controlling
interest
1,277
—
—
1,277
Adjusted EBITDA
$
74,413
$
7,411
$
(16,493
)
$
65,331
__________________________________________________________
(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)
$1.2 million was included within general
and administrative expense and $0.5 million was included within
employee compensation expense in the condensed consolidated
statements of operations.
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures Segment
Information (in thousands) (unaudited)
Nine Months Ended September
30, 2023
Envestnet Wealth
Solutions
Envestnet Data &
Analytics
Nonsegment
Total
Revenue:
Asset-based
$
556,595
$
—
$
—
$
556,595
Subscription-based
241,214
105,763
—
346,977
Total recurring revenue
797,809
105,763
—
903,572
Professional services and other
revenue
17,907
6,509
—
24,416
Total revenue
815,716
112,272
—
927,988
Operating expenses:
Direct expense:
Asset-based
324,093
—
—
324,093
Subscription-based
5,474
17,080
—
22,554
Professional services and other
7,662
—
—
7,662
Total direct expense
337,229
17,080
—
354,309
Employee compensation
235,818
59,476
49,352
344,646
General and administrative
90,425
41,609
26,782
158,816
Depreciation and amortization
76,670
19,315
—
95,985
Total operating expenses
740,142
137,480
76,134
953,756
Income (loss) from operations
75,574
(25,208
)
(76,134
)
(25,768
)
Add (deduct):
Deferred revenue fair value adjustment
(a)
69
—
—
69
Depreciation and amortization
76,670
19,315
—
95,985
Non-cash compensation expense (c)
34,747
7,057
16,337
58,141
Restructuring charges and transaction
costs (d)
7,985
214
4,167
12,366
Severance expense (c)
10,553
11,227
4,124
25,904
Litigation, regulatory and other
governance related expenses (b)
—
4,163
1,660
5,823
Non-income tax expense adjustment (b)
(153
)
(71
)
—
(224
)
Loss attributable to non-controlling
interest
3,082
—
—
3,082
Adjusted EBITDA
$
208,527
$
16,697
$
(49,846
)
$
175,378
__________________________________________________________
(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)
$10.2 million was included within general
and administrative expense and $2.2 million was included within
employee compensation expense in the condensed consolidated
statements of operations.
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
September 30,
December 31,
March 31,
June 30,
September 30,
2023
2023
2024
2024
2024
Platform Assets
Assets under Management (“AUM”)
$
375,408
$
416,001
$
452,464
$
471,978
$
510,453
Assets under Administration (“AUA”)
398,082
430,846
471,401
471,479
495,995
Total AUM/A
773,490
846,847
923,865
943,457
1,006,448
Subscription
4,579,248
4,959,514
5,158,180
5,327,939
5,534,404
Total Platform Assets
$
5,352,738
$
5,806,361
$
6,082,045
$
6,271,396
$
6,540,852
Platform Accounts
AUM
1,614,873
1,640,879
1,688,044
1,752,768
1,802,895
AUA
1,257,094
1,254,962
1,315,442
1,325,370
1,347,685
Total AUM/A
2,871,967
2,895,841
3,003,486
3,078,138
3,150,580
Subscription
16,072,848
16,248,598
16,641,631
16,364,088
16,705,082
Total Platform Accounts
18,944,815
19,144,439
19,645,117
19,442,226
19,855,662
Advisors
AUM/A
38,078
38,697
38,814
38,484
38,809
Subscription
69,318
69,973
70,262
71,568
72,527
Total Advisors
107,396
108,670
109,076
110,052
111,336
The following tables summarize the changes in the amount of
AUM/A assets and number of AUM/A accounts:
Asset Rollforward - Three
Months Ended September 30, 2024
As of June 30,
Gross
Net
Market
As of September 30,
2024
Sales
Redemptions
Flows
Impact
2024
AUM
$
471,978
$
32,831
$
(19,239
)
$
13,592
$
24,883
$
510,453
AUA
471,479
31,382
(29,712
)
1,670
22,846
495,995
Total AUM/A
$
943,457
$
64,213
$
(48,951
)
$
15,262
$
47,729
$
1,006,448
Fee-Based Accounts
3,078,138
72,442
3,150,580
The above AUM/A gross sales figures for the three months ended
September 30, 2024 include $13.6 billion in new client conversions.
We onboarded an additional $62.6 billion in subscription
conversions during the three months ended September 30, 2024
bringing total conversions for the three months ended September 30,
2024 to $76.2 billion.
Asset Rollforward - Nine
Months Ended September 30, 2024
As of December
31,
Gross
Net
Market
As of September 30,
2023
Sales
Redemptions
Flows
Impact
Reclassifications
2024
AUM
$
416,001
$
97,426
$
(57,740
)
$
39,686
$
51,763
$
3,003
$
510,453
AUA
430,846
109,825
(90,904
)
18,921
51,561
(5,333
)
495,995
Total AUM/A
$
846,847
$
207,251
$
(148,644
)
$
58,607
$
103,324
$
(2,330
)
$
1,006,448
Fee-Based Accounts
2,895,841
267,305
(12,566
)
3,150,580
The above AUM/A gross sales figures for the nine months ended
September 30, 2024 include $61.6 billion in new client conversions.
We onboarded an additional $243.3 billion in subscription
conversions during the nine months ended September 30, 2024
bringing total conversions for the nine months ended September 30,
2024 to $304.9 billion.
Asset and account figures in the “Reclassifications” column for
the three and nine months ended September 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
September 30,
December 31,
March 31,
June 30,
September 30,
2023
2023
2024
2024
2024
Number of paid end-users
42.3
38.3
43.8
44.3
45.2
Number of firms
1,322
1,324
1,323
1,182
1,166
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106329239/en/
Investor Relations investor.relations@envestnet.com (312)
827-3940
Media Relations media@envestnet.com
Envestnet (NYSE:ENV)
Gráfica de Acción Histórica
De Dic 2024 a Ene 2025
Envestnet (NYSE:ENV)
Gráfica de Acción Histórica
De Ene 2024 a Ene 2025
