U.S. Markets closed
  • S&P 500

    4,594.62
    -106.84 (-2.27%)
     
  • Dow 30

    34,899.34
    -905.06 (-2.53%)
     
  • Nasdaq

    15,491.66
    -353.54 (-2.23%)
     
  • Russell 2000

    2,245.94
    -85.52 (-3.67%)
     
  • Crude Oil

    68.17
    -10.22 (-13.04%)
     
  • Gold

    1,792.30
    +8.00 (+0.45%)
     
  • Silver

    23.15
    -0.35 (-1.49%)
     
  • EUR/USD

    1.1326
    +0.0114 (+1.02%)
     
  • 10-Yr Bond

    1.4820
    -0.1630 (-9.91%)
     
  • GBP/USD

    1.3325
    +0.0005 (+0.04%)
     
  • USD/JPY

    113.4710
    -1.8680 (-1.62%)
     
  • BTC-USD

    54,542.28
    -402.68 (-0.73%)
     
  • CMC Crypto 200

    1,365.60
    -89.81 (-6.17%)
     
  • FTSE 100

    7,044.03
    -266.34 (-3.64%)
     
  • Nikkei 225

    28,751.62
    -747.68 (-2.53%)
     

Envestnet Reports First Quarter 2021 Financial Results

  • Oops!
    Something went wrong.
    Please try again later.
·18 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

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, 2021.

Three months ended

Key Financial Metrics

March 31,

%

(in millions except per share data)

2021

2020

Change

GAAP:

Total revenues

$

275.1

$

246.5

12%

Net income (loss)

$

14.9

$

(7.2)

n/m

Net income (loss) per diluted share attributable to Envestnet, Inc.

$

0.27

$

(0.14)

n/m

Non-GAAP:

Adjusted revenues(1)

$

275.2

$

247.0

11%

Adjusted EBITDA(1)

$

68.3

$

54.6

25%

Adjusted net income(1)

$

41.9

$

31.2

34%

Adjusted net income per diluted share(1)

$

0.64

$

0.57

12%

n/m - not meaningful

"During the first quarter Envestnet again delivered strong financial results, exceeding our revenue, adjusted EBITDA and adjusted EPS expectations," said Bill Crager, Chief Executive Officer.

"We are executing on our accelerated investment plan to achieve faster growth, gain unique competitive advantage and fuse our capabilities to become the ecosystem that powers the intelligent financial life," concluded Mr. Crager.

Financial Results for the First Quarter of 2021

Asset-based recurring revenues increased 18% from the first quarter of 2020, and represented 58% of total revenues for the first quarter of 2021 compared to 55% for the first quarter 2020. Subscription-based recurring revenues increased 5% from the first quarter of 2020, and represented 40% of total revenues for the first quarter of 2021, compared to 42% for the first quarter of 2020. Professional services and other non-recurring revenues decreased 18% from the prior year period. Total revenues increased 12% to $275.1 million for the first quarter of 2021 from $246.5 million for the first quarter of 2020.

Total operating expenses for the first quarter of 2021 increased 2% to $258.3 million from $254.2 million in the prior year period. Cost of revenues increased 24% to $92.9 million for the first quarter of 2021 from $74.9 million for the prior year period. Compensation and benefits decreased 9% to $100.7 million for the first quarter of 2021 from $110.4 million for the prior year period. Compensation and benefits were 37% of total revenues for the first quarter of 2021, compared to 45% in the prior year period. General and administration expenses decreased 12% to $36.3 million for the first quarter of 2021 from $41.1 million for the prior year period. General and administrative expenses were 13% of total revenues for the first quarter of 2021, compared to 17% in the prior year period.

Income from operations was $16.8 million for the first quarter of 2021 compared to loss from of $7.6 million for the first quarter of 2020. Net income was $14.9 million for the first quarter of 2021 compared to net loss of $7.2 million for the first quarter of 2020. Net income per diluted share attributable to Envestnet, Inc. was $0.27 for the first quarter of 2021 compared to net loss per diluted share attributable to Envestnet, Inc. of $0.14 for the first quarter of 2020.

Adjusted revenues(1) for the first quarter of 2021 increased 11% to $275.2 million from $247.0 million for the prior year period. Adjusted EBITDA(1) for the first quarter of 2021 increased 25% to $68.3 million from $54.6 million for the prior year period. Adjusted net income(1) increased 34% for the first quarter of 2021 to $41.9 million from $31.2 million for the prior year period. Adjusted net income per diluted share(1) for the first quarter of 2021 increased 12% to $0.64 from $0.57 in the first quarter of 2020.

Balance Sheet and Liquidity

As of March 31, 2021, the Company had $372.0 million in cash and cash equivalents and $862.5 million in outstanding debt. The outstanding debt as of March 31, 2021 included $345 million in convertible notes maturing in 2023 and $517.5 million in convertible notes maturing in 2025. The Company's $500 million revolving credit facility was undrawn as of March 31, 2021.

Outlook

The Company provided the following outlook for the second quarter ending June 30, 2021 and full year ending December 31, 2021. This outlook is based on the market value of assets on March 31, 2021. We caution that we cannot predict the market value of our assets on any future date. See "Cautionary Statement Regarding Forward-Looking Statements."

In Millions Except Adjusted EPS

2Q 2021

FY 2021

GAAP:

Revenues:

Asset-based

$

166.5

-

$

168.0

Subscription-based

110.0

-

111.0

Total recurring revenues

$

276.5

-

$

279.0

Professional services and other revenues

4.5

-

5.0

Total revenues

$

281.0

-

$

284.0

$

1,137.7

-

$

1,147.7

Asset-based cost of revenues

$

91.5

-

$

92.0

-

Total cost of revenues

$

99.0

-

$

99.5

Net income

(a)

-

(a)

(a)

-

(a)

Diluted shares outstanding

65.7

65.6

Net income per diluted share

(a)

-

(a)

(a)

-

(a)

Non-GAAP:

Adjusted revenues (1):

Asset-based

$

166.5

-

$

168.0

Subscription-based

110.0

-

111.0

Total recurring revenues

$

276.5

-

$

279.0

Professional services and other revenues

4.5

-

5.0

Total revenues

$

281.0

-

$

284.0

$

1,138.0

-

$

1,148.0

Adjusted EBITDA(1)

$

60.0

-

$

62.0

$

230.0

-

$

236.0

Adjusted net income per diluted share(1)

$

0.53

-

$

0.55

$

2.03

-

$

2.10

(a) The Company 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 2021 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://ir.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. Over 106,000 advisors and more than 5,200 companies including: 17 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 revenues" excludes the effect of purchase accounting on the fair value of acquired deferred revenue. Under GAAP, we record 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 does not reflect the full amount of revenue that would have been recorded by these entities had they remained stand‑alone entities. Adjusted revenues 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, accretion on contingent consideration and purchase liability, income tax provision (benefit), depreciation and amortization, non-cash compensation expense, restructuring charges and transaction costs, severance, fair market value adjustment on contingent consideration liability, litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, gain on acquisition of equity method investment, loss allocation from equity method investments and (income) loss attributable to non-controlling interest.

"Adjusted net income" represents net income before deferred revenue fair value adjustment, accretion on contingent consideration and purchase liability, non-cash interest expense, cash interest on our convertible notes (subsequent to the adoption of ASU 2020-06 on January 1, 2021), non-cash compensation expense, restructuring charges and transaction costs, severance, fair market value adjustment on contingent consideration liability, amortization of acquired intangibles, litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, gain on acquisition of equity method investment, loss allocation 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 attributable to common stockholders divided by the diluted number of weighted-average shares outstanding. Beginning January 1, 2021, the dilutive effect of our Convertible Notes are calculated using the if-converted method in accordance with the adoption of ASU 2020-06. As a result, 9.9 million potential shares to be issued in connection with our Convertible Notes are considered to be dilutive for purposes of the adjusted net income per share calculation beginning January 1, 2021.

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 revenues, net income or net income 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 2021, its strategic 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, a pandemic or health crisis, including the COVID-19 pandemic, and its impact on financial institutions, the global economy or capital markets, as well as our products, clients, vendors and employees, and our results of operations, the full extent of which is currently unknown; changes and volatility in financial and capital markets, which could result in changes in demand for our products or services or in the value of assets on which we earn revenue; the possibility that the anticipated benefits of any of our acquisitions will not be realized to the extent or when expected, difficulty in sustaining rapid revenue growth, which may place significant demands on our administrative, operational and financial resources, the concentration of nearly all of our revenues 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 revenues, the renegotiation of fee percentages or termination of our services by our clients, our ability to identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies, the impact of market and economic conditions on revenues, our inability 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 expand our relationships with existing customers, grow the number of customers and derive revenue from new offerings such as our data analytics solutions and market research services and premium financial applications, compliance failures, adverse judicial or regulatory proceedings against us, liabilities associated with potential, perceived or actual breaches of fiduciary duties and/or conflicts of interest, changes in laws and regulations, including tax laws and regulations, general economic conditions, political and regulatory conditions, the impact of fluctuations in market condition and interest rates on the demand for our products and services and the value of assets under management or administration, the impact of market conditions on our ability to issue debt and equity, the impact of fluctuations in interest rates on our cost of borrowing, our financial performance, the results of our investments in research and development, our data center and other infrastructure, our ability to maintain the security and integrity of our systems and facilities and to maintain the privacy of personal information, failure of our systems to work properly, our ability to realize operating efficiencies, the advantages of our solutions as compared to those of others, the failure to protect our intellectual property rights, our ability to establish and maintain intellectual property rights, our ability to retain and hire necessary employees and appropriately staff our operations 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://ir.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 6, 2021 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,

2021

2020

Assets

Current assets:

Cash and cash equivalents

$

371,977

$

384,565

Fees receivable, net

79,293

80,064

Prepaid expenses and other current assets

37,751

40,570

Total current assets

489,021

505,199

Property and equipment, net

51,077

47,969

Internally developed software, net

105,288

96,501

Intangible assets, net

443,023

435,041

Goodwill

906,756

906,773

Operating lease right-of-use-assets, net

99,231

105,249

Other non-current assets

48,592

47,558

Total assets

$

2,142,988

$

2,144,290

Liabilities and Equity

Current liabilities:

Accrued expenses and other liabilities

$

136,417

$

158,548

Accounts payable

24,567

18,003

Operating lease liabilities

13,270

13,649

Contingent consideration

11,746

11,251

Deferred revenue

42,921

34,918

Total current liabilities

228,921

236,369

Long-term debt

845,195

756,503

Non-current operating lease liabilities

109,458

112,182

Deferred tax liabilities, net

23,042

34,740

Other non-current liabilities

22,643

28,678

Total liabilities

1,229,259

1,168,472

Equity:

Total stockholders’ equity

914,141

976,337

Non-controlling interest

(412)

(519)

Total liabilities and equity

$

2,142,988

$

2,144,290

Envestnet, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share information)

(unaudited)

Three Months Ended

March 31,

2021

2020

Revenues:

Asset-based

$

159,375

$

134,811

Subscription-based

109,829

104,551

Total recurring revenues

269,204

239,362

Professional services and other revenues

5,901

7,177

Total revenues

275,105

246,539

Operating expenses:

Cost of revenues

92,869

74,933

Compensation and benefits

100,714

110,430

General and administration

36,315

41,110

Depreciation and amortization

28,392

27,683

Total operating expenses

258,290

254,156

Income (loss) from operations

16,815

(7,617)

Other expense, net

(7,468)

(1,537)

Income (loss) before income tax benefit

9,347

(9,154)

Income tax benefit

(5,588)

(1,964)

Net income (loss)

14,935

(7,190)

Add: Net (income) loss attributable to non-controlling interest

11

(146)

Net income (loss) attributable to Envestnet, Inc.

$

14,946

$

(7,336)

Net income (loss) per share attributable to Envestnet, Inc.:

Basic

$

0.28

$

(0.14)

Diluted

$

0.27

$

(0.14)

Weighted average common shares outstanding:

Basic

54,208,469

53,016,511

Diluted

59,917,648

53,016,511

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended

March 31,

2021

2020

OPERATING ACTIVITIES:

Net income (loss)

$

14,935

$

(7,190)

Adjustments to reconcile net income (loss) to net cash provided by
operating activities:

Depreciation and amortization

28,392

27,683

Provision for doubtful accounts

298

1,026

Deferred income taxes

(3,581)

(1,587)

Non-cash compensation expense

14,137

15,985

Non-cash interest expense

2,015

4,463

Accretion on contingent consideration and purchase liability

388

599

Fair market value adjustment to contingent consideration liability

(140)

Gain on acquisition of equity method investment

(4,230)

Loss allocation from equity method investments

3,288

2,030

Other

165

Changes in operating assets and liabilities, net of acquisitions:

Fees receivables, net

473

(14,333)

Prepaid expenses and other current assets

1,756

(6,793)

Other non-current assets

3,093

641

Accrued expenses and other liabilities

(28,668)

(11,554)

Accounts payable

6,444

(3,205)

Deferred revenue

7,882

5,598

Other non-current liabilities

(1,068)

(145)

Net cash provided by operating activities

49,809

8,988

INVESTING ACTIVITIES:

Purchases of property and equipment

(7,062)

(2,160)

Capitalization of internally developed software

(15,058)

(11,572)

Investments in private companies

(2,538)

(11,700)

Acquisition of proprietary technology

(25,517)

Acquisitions of businesses, net of cash acquired

(20,257)

Net cash used in investing activities

(50,175)

(45,689)

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows (continued)

(in thousands)

(unaudited)

Nine Months Ended

September 30,

2021

2020

FINANCING ACTIVITIES:

Proceeds from borrowings on revolving credit facility

45,000

Payments on revolving credit facility

(15,000)

Payments of contingent consideration

(1,000)

Proceeds from exercise of stock options

522

3,408

Taxes paid in lieu of shares issued for stock-based compensation

(9,541)

(9,199)

Share repurchase

(1,672)

Other

(479)

2

Net cash (used in) provided by financing activities

(12,170)

24,211

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(52)

(1,496)

DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(12,588)

(13,986)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH,
BEGINNING OF PERIOD

384,714

82,755

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF
PERIOD (a)

$

372,126

$

68,769

(a) The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the Condensed Consolidated Balance Sheets:

March 31,

March 31,

2021

2020

Cash and cash equivalents

$

371,977

$

68,601

Restricted cash included in other non-current assets

149

168

Total cash, cash equivalents and restricted cash

$

372,126

$

68,769

Reconciliation of Non-GAAP Financial Measures

(in thousands)

(unaudited)

Three Months Ended

March 31,

2021

2020

Total revenues

$

275,105

$

246,539

Deferred revenue fair value adjustment (a)

80

439

Adjusted revenues

$

275,185

$

246,978

Net income (loss)

$

14,935

$

(7,190)

Add (deduct):

Deferred revenue fair value adjustment (a)

80

439

Interest income (b)

(170)

(391)

Interest expense (b)

4,215

7,134

Accretion on contingent consideration and purchase liability (c)

388

599

Income tax benefit

(5,588)

(1,964)

Depreciation and amortization

28,392

27,683

Non-cash compensation expense (d)

14,137

13,470

Restructuring charges and transaction costs (c)

2,784

2,820

Severance (e)

4,914

13,982

Fair market value adjustment on contingent consideration liability (c)

(140)

Non-recurring litigation and regulatory related expenses (c)

1,709

703

Foreign currency (b)

151

(494)

Non-income tax expense adjustment (c)

(566)

188

Non-recurring gain (b)

(4,230)

Loss allocation from equity method investments (b)

3,288

2,030

Income attributable to non-controlling interest

(265)

(201)

Adjusted EBITDA

$

68,264

$

54,578

(a)

Included within subscription-based revenues 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 expenses in the condensed consolidated statements of operations.

(d)

For the three months ended March 31, 2021, the entire amount was included in compensation and benefits in the condensed consolidated statements of operations. For the three months ended March 31, 2020, $15,994 was included in compensation and benefits and a fair value adjustment of $(2,524) was included in other expense, net, in the condensed consolidated statements of operations.

(e)

Included within compensation and benefits 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,

2021

...

Net income (loss)

$

14,935

$

(7,190)

Income tax provision benefit (a)

(5,588)

(1,964)

Income (loss) before income tax benefit

9,347

(9,154)

Add (deduct):

Deferred revenue fair value adjustment (b)

80

439

Accretion on contingent consideration and purchase

liability (c)

388

599

Non-cash interest expense (d)

1,423

2,962

Cash interest - Convertible Notes (d)

2,480

Non-cash compensation expense (e)

14,137

13,470

Restructuring charges and transaction costs (c)

2,784

2,820

Severance (f)

4,914

13,982

Fair market value adjustment on contingent consideration liability (c)

(140)

Amortization of acquired intangibles (g)

16,478

18,758

Non-recurring litigation and regulatory related expenses (c)

1,709

703

Foreign currency (d)

151

(494)

Non-income tax expense adjustment (c)

(566)

188

Non-recurring gain (d)

(4,230)

Loss allocation from equity method investments (d)

3,288

2,030

Income attributable to non-controlling interest

(265)

(201)

Adjusted net income before income tax effect

56,208

41,872

Income tax effect (h)

(14,333)

(10,670)

Adjusted net income

$

41,875

$

31,202

Basic number of weighted-average shares outstanding

54,208,469

53,016,511

Effect of dilutive shares:

Options to purchase common stock

222,387

664,796

Unvested restricted stock units

562,612

600,567

Convertible notes

9,898,549

235,182

Warrants

76,142

42,551

Diluted number of weighted-average shares outstanding

64,968,159

54,559,607

Adjusted net income per share - diluted

$

0.64

$

0.57

(a)

For the three months ended March 31, 2021 and 2020, the effective tax rate computed in accordance with GAAP equaled (59.8)% and 21.5%, respectively.

(b)

Included within subscription-based revenues in the condensed consolidated statements of operations.

(c)

Included within general and administrative expenses in the condensed consolidated statements of operations.

(d)

Included within other expense, net in the condensed consolidated statements of operations.

(e)

For the three months ended March 31, 2021, the entire amount was included in compensation and benefits in the condensed consolidated statements of operations. For the three months ended March 31, 2020, $15,994 was included in compensation and benefits and a fair value adjustment of $(2,524) was included in other expense, net, in the condensed consolidated statements of operations.

(f)

Included within compensation and benefits in the condensed consolidated statements of operations.

(g)

Included within depreciation and amortization in the condensed consolidated statements of operations.

(h)

An estimated normalized effective tax rate of 25.5% have been used to compute adjusted net income for the three months ended March 31, 2021 and 2020.

Reconciliation of Non-GAAP Financial Measures

Segment Information

(in thousands)

(unaudited)

Three months ended March 31, 2021

Envestnet
Wealth Solutions

Envestnet Data
& Analytics

Nonsegment

Total

Total Revenues

$

226,410

$

48,695

$

$

275,105

Deferred revenue fair value adjustment (a)

80

80

Adjusted revenues

$

226,490

$

48,695

$

$

275,185

Revenues:

Asset-based

$

159,375

$

$

$

159,375

Subscription-based

64,012

45,817

109,829

Total recurring revenues

223,387

45,817

269,204

Professional services and other revenues

3,023

2,878

5,901

Total revenues

226,410

48,695

275,105

Operating expenses:

Cost of revenues:

Asset-based

86,190

86,190

Subscription-based

1,213

5,391

6,604

Professional services and other

29

46

75

Total cost of revenues

87,432

5,437

92,869

Compensation and benefits

62,854

26,289

11,571

100,714

General and administration

20,699

8,516

7,100

36,315

Depreciation and amortization

21,228

7,164

28,392

Total operating expenses

$

192,213

$

47,406

$

18,671

$

258,290

Income (loss) from operations

$

34,197

$

1,289

$

(18,671)

$

16,815

Add:

Deferred revenue fair value adjustment (a)

80

80

Accretion on contingent consideration and
purchase liability (b)

342

46

388

Depreciation and amortization

21,228

7,164

28,392

Non-cash compensation expense (c)

7,829

2,841

3,467

14,137

Restructuring charges and transaction costs (b)

1,365

147

1,272

2,784

Non-income tax expense adjustment (b)

(535)

(31)

(566)

Severance (c)

3,087

1,720

107

4,914

Fair market value adjustment on contingent
consideration liability (b)

(140)

(140)

Non-recurring litigation and regulatory related expenses (b)

1,709

1,709

Income attributable to non-controlling interest

(265)

(265)

Other

16

16

Adjusted EBITDA

$

67,344

$

14,745

$

(13,825)

$

68,264

(a)

Included within subscription-based revenues in the condensed consolidated statements of operations.

(b)

Included within general and administrative expenses in the condensed consolidated statements of operations.

(c)

Included within compensation and benefits in the condensed consolidated statements of operations.

Reconciliation of Non-GAAP Financial Measures

Segment Information (continued)

(in thousands)

(unaudited)

Three Months Ended March 31, 2020

Envestnet
Wealth Solutions

Envestnet Data
& Analytics

Nonsegment

Total

Revenues

$

198,420

$

48,119

$

$

246,539

Deferred revenue fair value adjustment (a)

439

439

Adjusted revenues

$

198,859

$

48,119

$

$

246,978

Revenues:

Asset-based

$

134,811

$

$

$

134,811

Subscription-based

60,323

44,228

104,551

Total recurring revenues

195,134

44,228

239,362

Professional services and other revenues

3,286

3,891

7,177

Total revenues

198,420

48,119

246,539

Operating expenses:

Cost of revenues:

Asset-based

68,592

68,592

Subscription-based

1,192

5,085

6,277

Professional services and other

8

56

64

Total cost of revenues

69,792

5,141

74,933

Compensation and benefits

72,588

30,113

7,729

110,430

General and administration

25,280

9,187

6,643

41,110

Depreciation and amortization

19,420

8,263

27,683

Total operating expenses

$

187,080

$

52,704

$

14,372

$

254,156

Income (loss) from operations

$

11,340

$

(4,585)

$

(14,372)

$

(7,617)

Add:

Deferred revenue fair value adjustment (a)

439

439

Accretion on contingent consideration and
purchase liability (b)

373

226

599

Depreciation and amortization

19,420

8,263

27,683

Non-cash compensation expense (c)

9,697

4,226

2,071

15,994

Restructuring charges and transaction costs (b)

1,189

185

1,446

2,820

Non-income tax expense adjustment (b)

250

(62)

188

Severance (c)

11,002

1,660

1,320

13,982

Non-recurring litigation and regulator related expenses (b)

703

703

Loss attributable to non-controlling interest

(201)

(201)

Other

(12)

(12)

Adjusted EBITDA

$

53,497

$

10,616

$

(9,535)

$

54,578

(a)

Included within subscription-based revenues in the condensed consolidated statements of operations.

(b)

Included within general and administrative expenses in the condensed consolidated statements of operations.

(c)

Included within compensation and benefits in the condensed consolidated statements of operations.

Envestnet, Inc.

Historical Assets, Accounts and Advisors

(in millions, except accounts and advisors)

(unaudited)

As of

March 31,

June 30,

September 30,

December 31,

March 31,

2020

2020

2020

2020

2021

(in millions, except accounts and advisors data)

Platform Assets

Assets under Management ("AUM")

$

185,065

$

215,994

$

228,905

$

263,043

$

286,039

Assets under Administration ("AUA")

312,472

344,957

375,860

405,365

408,858

Total AUM/A

497,537

560,951

604,765

668,408

694,897

Subscription

2,875,394

3,247,400

3,498,353

3,892,814

4,132,917

Total Platform Assets

$

3,372,931

$

3,808,351

$

4,103,118

$

4,561,222

$

4,827,814

Platform Accounts

AUM

970,896

1,007,386

1,018,817

1,073,122

1,138,183

AUA

1,254,856

1,252,247

1,318,730

1,276,975

1,192,668

Total AUM/A

2,225,752

2,259,633

2,337,547

2,350,097

2,330,851

Subscription

10,090,172

10,003,156

10,639,399

11,079,048

11,453,434

Total Platform Accounts

12,315,924

12,262,789

12,976,946

13,429,145

13,784,285

Advisors

AUM/A

40,971

41,206

41,450

41,206

41,177

Subscription

62,077

62,404

63,862

65,104

65,724

Total Advisors

103,048

103,610

105,312

106,310

106,901

The following table summarizes the changes in AUM and AUA for the three months ended March 31, 2021:

12/31/2020

Gross
Sales

Redemptions

Net
Flows

Market
Impact

Reclass to
Subscription

3/31/2021

(in millions, except account data)

AUM

$

263,043

$

28,324

$

(13,351)

$

14,973

$

8,023

$

$

286,039

AUA

405,365

30,639

(23,033)

7,606

9,216

(13,329)

408,858

Total AUM/A

$

668,408

$

58,963

$

(36,384)

$

22,579

$

17,239

$

(13,329)

$

694,897

Fee-Based Accounts

2,350,097

88,734

(107,980)

2,330,851

The above AUM/A gross sales figures include $8.3 billion in new client conversions. The Company onboarded an additional $34.5 billion in subscription conversions during the three months ended March 31, 2021, bringing total conversions for the quarter to $42.8 billion.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210506006122/en/

Contacts

Investor Relations
investor.relations@envestnet.com
(312) 827-3940

Media Relations
mediarelations@envestnet.com