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Envestnet Reports Second Quarter 2022 Financial Results

Envestnet (NYSE: ENV), a leading provider of intelligent systems for wealth management and financial wellness, today reported financial results for the three and six months ended June 30, 2022.

 

 

Three months ended

 

 

 

Six months ended

 

 

Key Financial Metrics

 

June 30,

 

%

 

June 30,

 

%

(in millions, except per share data)

 

 

2022

 

 

 

2021

 

 

Change

 

 

2022

 

 

 

2021

 

Change

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

318.9

 

 

$

288.7

 

 

10

%

 

$

640.2

 

 

$

563.8

 

14

%

Net income (loss)

 

$

(24.3

)

 

$

(8.4

)

 

n/m

 

 

$

(39.0

)

 

$

6.6

 

n/m

 

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

 

$

(0.42

)

 

$

(0.15

)

 

n/m

 

 

$

(0.67

)

 

$

0.12

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenues(1)

 

$

318.9

 

 

$

288.8

 

 

10

%

 

$

640.3

 

 

$

564.0

 

14

%

Adjusted EBITDA(1)

 

$

57.1

 

 

$

71.1

 

 

(20

)%

 

$

112.8

 

 

$

139.3

 

(19

)%

Adjusted net income(1)

 

$

32.0

 

 

$

43.5

 

 

(26

)%

 

$

63.0

 

 

$

85.4

 

(26

)%

Adjusted net income per diluted share(1)

 

$

0.49

 

 

$

0.67

 

 

(27

)%

 

$

0.96

 

 

$

1.31

 

(27

)%

 

n/m - not meaningful

 

“We continue to execute on our strategy – aligning our organization to deliver industry leading solutions, technology and intelligence that can do more for more people – and positioning Envestnet for accelerated revenue growth in the coming years,” said Bill Crager, Co-Founder and Chief Executive Officer.

“During the second quarter, we grew revenues, we went deeper with our client base and we drove positive net flows despite the challenging market conditions,” concluded Mr. Crager.

Financial Results for the Second Quarter of 2022

Asset-based recurring revenues increased 13% from the second quarter of 2021, and represented 60% of total revenues for the second quarter of 2022 compared to 59% for the second quarter of 2021. Subscription-based recurring revenues increased 5% from the second quarter of 2021, and represented 37% of total revenues for the second quarter of 2022, compared to 39% for the second quarter of 2021. Professional services and other non-recurring revenues increased 42% from the prior year period. Total revenues increased 10% to $318.9 million for the second quarter of 2022 from $288.7 million for the second quarter of 2021.

Total operating expenses for the second quarter of 2022 increased 26% to $350.6 million from $277.8 million in the prior year period. Cost of revenues increased 26% to $126.5 million for the second quarter of 2022 from $100.5 million for the prior year period. Compensation and benefits increased 19% to $125.8 million for the second quarter of 2022 from $105.5 million for the prior year period. Compensation and benefits were 39% of total revenues for the second quarter of 2022, compared to 37% for the prior year period. General and administration expenses increased 58% to $66.1 million for the second quarter of 2022 from $41.8 million for the prior year period. General and administration expenses were 21% of total revenues for the second quarter of 2022, compared to 14% for the prior year period.

Loss from operations was $31.7 million for the second quarter of 2022 compared to income of $10.9 million for the second quarter of 2021. Net loss was $24.3 million for the second quarter of 2022 compared to net loss of $8.4 million for the second quarter of 2021. Net loss per diluted share attributable to Envestnet, Inc. was $0.42 for the second quarter of 2022 compared to net loss per diluted share attributable to Envestnet, Inc. of $0.15 for the second quarter of 2021.

Adjusted revenues(1) for the second quarter of 2022 increased 10% to $318.9 million from $288.8 million for the prior year period. Adjusted EBITDA(1) for the second quarter of 2022 decreased 20% to $57.1 million from $71.1 million for the prior year period. Adjusted net income(1) decreased 26% for the second quarter of 2022 to $32.0 million from $43.5 million for the prior year period. Adjusted net income per diluted share(1) for the second quarter of 2022 decreased 27% to $0.49 from $0.67 in the second quarter of 2021.

Balance Sheet and Liquidity

As of June 30, 2022, Envestnet had $338.1 million in cash and cash equivalents and $862.5 million in outstanding debt. The outstanding debt as of June 30, 2022 included $345 million in convertible notes maturing in 2023 and $517.5 million in convertible notes maturing in 2025. Envestnet's $500 million revolving credit facility was undrawn as of June 30, 2022.

Outlook

Envestnet provided the following outlook for the third quarter ending September 30, 2022 and full year ending December 31, 2022. This outlook is based on the market value of assets under management or administration as of June 30, 2022. 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

 

3Q 2022

 

FY 2022

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Asset-based

 

$

176.0

 

-

 

$

177.0

 

 

 

 

 

 

Subscription-based

 

 

120.5

 

-

 

 

121.0

 

 

 

 

 

 

Total recurring revenues

 

$

296.5

 

-

 

$

298.0

 

 

 

 

 

 

Professional services and other revenues

 

 

5.0

 

-

 

 

5.5

 

 

 

 

 

 

Total revenues

 

$

301.5

 

-

 

$

303.5

 

$

1,255.0

 

-

 

$

1,260.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-based cost of revenues

 

$

103.0

 

-

 

$

103.5

 

 

 

 

 

 

Total cost of revenues

 

$

110.5

 

-

 

$

111.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

(a)

 

-

 

(a)

 

(a)

 

-

 

(a)

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted shares outstanding

 

 

 

65.5

 

 

 

 

 

65.5

 

 

Net income per diluted share

 

(a)

 

-

 

(a)

 

(a)

 

-

 

(a)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenues (1):

 

 

 

 

 

 

 

 

 

 

 

 

Asset-based

 

$

176.0

 

-

 

$

177.0

 

 

 

 

 

 

Subscription-based

 

 

120.5

 

-

 

 

121.0

 

 

 

 

 

 

Total recurring revenues

 

$

296.5

 

-

 

$

298.0

 

 

 

 

 

 

Professional services and other revenues

 

 

5.0

 

-

 

 

5.5

 

 

 

 

 

 

Total revenues

 

$

301.5

 

-

 

$

303.5

 

$

1,255.0

 

-

 

$

1,260.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA(1)

 

$

51.0

 

-

 

$

53.0

 

$

223.0

 

-

 

$

227.0

Adjusted net income per diluted share(1)

 

$

0.40

 

-

 

$

0.42

 

$

1.84

 

-

 

$

1.89

(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 second quarter 2022 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. More than 105,000 advisors and over 6,500 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 revenues” 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 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, income tax provision (benefit), depreciation and amortization, non-cash compensation expense, restructuring charges and transaction costs, severance, accretion on contingent consideration and purchase liability, fair market value adjustment on contingent consideration liability, fair market value adjustment to investment in private company, litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, dilution gain on equity method investee share issuance, income or loss allocations from equity method investments and (income) loss attributable to non-controlling interest.

“Adjusted net income” represents net income 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, accretion on contingent consideration and purchase liability, fair market value adjustment on contingent consideration liability, fair market value adjustment to investment in private company, amortization of acquired intangibles, litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, dilution gain on equity method investee share issuance, income or 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 attributable to common stockholders divided by the diluted number of weighted-average shares outstanding.

See reconciliations of Non-GAAP Financial Measures on pages 9-15 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 (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 third quarter and full year of 2022, 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; changes and volatility in financial and capital markets, including as a result of the current conflict between Russia and Ukraine, 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, political and regulatory conditions; 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; 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 and 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://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 August 4, 2022 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)

 

 

 

June 30,

 

December 31,

 

 

2022

 

2021

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

338,115

 

$

429,279

Fees receivable, net

 

 

82,878

 

 

95,291

Prepaid expenses and other current assets

 

 

46,627

 

 

42,706

Total current assets

 

 

467,620

 

 

567,276

 

 

 

 

 

Property and equipment, net

 

 

61,392

 

 

50,215

Internally developed software, net

 

 

159,751

 

 

133,659

Intangible assets, net

 

 

386,231

 

 

400,396

Goodwill

 

 

936,054

 

 

925,154

Operating lease right-of-use-assets, net

 

 

83,494

 

 

90,714

Other non-current assets

 

 

92,858

 

 

73,768

Total assets

 

$

2,187,400

 

$

2,241,182

 

 

 

 

 

Liabilities and Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accrued expenses and other liabilities

 

$

198,230

 

$

225,159

Accounts payable

 

 

20,444

 

 

19,092

Operating lease liabilities

 

 

10,852

 

 

10,999

Deferred revenue

 

 

37,453

 

 

33,473

Current portion of long-term debt

 

 

343,057

 

 

Total current liabilities

 

 

610,036

 

 

288,723

 

 

 

 

 

Long-term debt, net of current portion

 

 

508,282

 

 

848,862

Non-current operating lease liabilities

 

 

110,623

 

 

105,920

Deferred tax liabilities, net

 

 

12,912

 

 

21,021

Other non-current liabilities

 

 

11,555

 

 

17,114

Total liabilities

 

 

1,253,408

 

 

1,281,640

 

 

 

 

 

Equity:

 

 

 

 

Total stockholders’ equity

 

 

933,165

 

 

957,089

Non-controlling interest

 

 

827

 

 

2,453

Total liabilities and equity

 

$

2,187,400

 

$

2,241,182

 

Envestnet, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share information)

(unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

Asset-based

 

$

191,972

 

 

$

170,075

 

 

$

394,689

 

 

$

329,450

 

Subscription-based

 

 

118,120

 

 

 

112,504

 

 

 

232,854

 

 

 

222,333

 

Total recurring revenues

 

 

310,092

 

 

 

282,579

 

 

 

627,543

 

 

 

551,783

 

Professional services and other revenues

 

 

8,760

 

 

 

6,159

 

 

 

12,672

 

 

 

12,060

 

Total revenues

 

 

318,852

 

 

 

288,738

 

 

 

640,215

 

 

 

563,843

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenues

 

 

126,482

 

 

 

100,494

 

 

 

251,764

 

 

 

193,363

 

Compensation and benefits

 

 

125,767

 

 

 

105,548

 

 

 

252,616

 

 

 

206,262

 

General and administration

 

 

66,144

 

 

 

41,755

 

 

 

110,479

 

 

 

78,070

 

Depreciation and amortization

 

 

32,182

 

 

 

30,010

 

 

 

63,800

 

 

 

58,402

 

Total operating expenses

 

 

350,575

 

 

 

277,807

 

 

 

678,659

 

 

 

536,097

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

(31,723

)

 

 

10,931

 

 

 

(38,444

)

 

 

27,746

 

Other income (expense), net

 

 

1,622

 

 

 

(3,784

)

 

 

(4,345

)

 

 

(11,252

)

Income (loss) before income tax provision (benefit)

 

 

(30,101

)

 

 

7,147

 

 

 

(42,789

)

 

 

16,494

 

 

 

 

 

 

 

 

 

 

Income tax provision (benefit)

 

 

(5,833

)

 

 

15,516

 

 

 

(3,813

)

 

 

9,928

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(24,268

)

 

 

(8,369

)

 

 

(38,976

)

 

 

6,566

 

Add: Net loss attributable to non-controlling interest

 

 

983

 

 

 

88

 

 

 

1,832

 

 

 

99

 

Net income (loss) attributable to Envestnet, Inc.

 

$

(23,285

)

 

$

(8,281

)

 

$

(37,144

)

 

$

6,665

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Basic

 

$

(0.42

)

 

$

(0.15

)

 

$

(0.67

)

 

$

0.12

 

 

 

 

 

 

 

 

 

 

Diluted

 

$

(0.42

)

 

$

(0.15

)

 

$

(0.67

)

 

$

0.12

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

55,203,120

 

 

 

54,440,388

 

 

 

55,054,272

 

 

 

54,325,353

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

55,203,120

 

 

 

54,440,388

 

 

 

55,054,272

 

 

 

55,136,946

 

 

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Six Months Ended

 

 

June 30,

 

 

 

2022

 

 

 

2021

 

OPERATING ACTIVITIES:

 

 

 

 

Net income (loss)

 

$

(38,976

)

 

$

6,566

 

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

 

 

 

 

Depreciation and amortization

 

 

63,800

 

 

 

58,402

 

Provision for doubtful accounts

 

 

(1,230

)

 

 

455

 

Deferred income taxes

 

 

(8,222

)

 

 

8,137

 

Release of uncertain tax positions

 

 

(3,095

)

 

 

 

Non-cash compensation expense

 

 

45,318

 

 

 

31,422

 

Non-cash interest expense

 

 

3,474

 

 

 

2,906

 

Accretion on contingent consideration and purchase liability

 

 

 

 

 

575

 

Payments of contingent consideration

 

 

 

 

 

(2,360

)

Fair market value adjustment to contingent consideration liability

 

 

 

 

 

(140

)

Fair market value adjustment to investment in private company

 

 

 

 

 

(758

)

Loss allocations from equity method investments

 

 

2,945

 

 

 

4,045

 

Dilution gain on equity method investee share issuance

 

 

(6,934

)

 

 

 

Impairment of right of use assets

 

 

12,961

 

 

 

1,110

 

Loss on property and equipment disposals - office closures

 

 

3,710

 

 

 

 

Other

 

 

167

 

 

 

282

 

Changes in operating assets and liabilities:

 

 

 

 

Fees receivable, net

 

 

13,694

 

 

 

(1,334

)

Prepaid expenses and other current assets

 

 

(2,721

)

 

 

(155

)

Other non-current assets

 

 

(3,638

)

 

 

3,665

 

Accrued expenses and other liabilities

 

 

(31,962

)

 

 

527

 

Accounts payable

 

 

1,368

 

 

 

2,333

 

Deferred revenue

 

 

4,277

 

 

 

2,789

 

Other non-current liabilities

 

 

(2,294

)

 

 

692

 

Net cash provided by operating activities

 

 

52,642

 

 

 

119,159

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

Purchases of property and equipment

 

 

(9,141

)

 

 

(11,357

)

Capitalization of internally developed software

 

 

(43,045

)

 

 

(31,802

)

Acquisition of proprietary technology

 

 

(15,000

)

 

 

(25,517

)

Acquisitions of businesses, net of cash acquired

 

 

(14,472

)

 

 

(33,143

)

Investments in private companies

 

 

(8,000

)

 

 

(4,549

)

Advance for technology solutions

 

 

(4,000

)

 

 

(3,000

)

Issuance of notes receivable to equity method investees

 

 

(4,350

)

 

 

 

Net cash used in investing activities

 

 

(98,008

)

 

 

(109,368

)

 

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows (continued)

(in thousands)

(unaudited)

 

 

 

Six Months Ended

 

 

June 30,

 

 

 

2022

 

 

 

2021

 

FINANCING ACTIVITIES:

 

 

 

 

Proceeds from exercise of stock options

 

 

742

 

 

 

573

 

Capital contributions - non-controlling shareholders

 

 

 

 

 

23

 

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

 

 

(18,113

)

 

 

(13,020

)

Finance lease payments

 

 

(14,517

)

 

 

 

Share repurchases

 

 

(9,235

)

 

 

(2,097

)

Revolving credit facility issuance costs

 

 

(1,872

)

 

 

 

Payments of contingent consideration

 

 

(750

)

 

 

(9,200

)

Other

 

 

4

 

 

 

(587

)

Net cash used in financing activities

 

 

(43,741

)

 

 

(24,308

)

 

 

 

 

 

EFFECT OF EXCHANGE RATE CHANGES ON CASH

 

 

(2,057

)

 

 

(524

)

 

 

 

 

 

DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(91,164

)

 

 

(15,041

)

 

 

 

 

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

 

 

429,428

 

 

 

384,714

 

 

 

 

 

 

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

 

$

338,264

 

 

$

369,673

 

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

 

 

June 30,

 

June 30,

 

 

2022

 

2021

Cash and cash equivalents

 

$

338,115

 

$

369,524

Restricted cash included in prepaid expenses and other current assets

 

 

149

 

 

149

Total cash, cash equivalents and restricted cash

 

$

338,264

 

$

369,673

 

Reconciliation of Non-GAAP Financial Measures

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Total revenues

 

$

318,852

 

 

$

288,738

 

 

$

640,215

 

 

$

563,843

 

Deferred revenue fair value adjustment (a)

 

 

54

 

 

 

80

 

 

 

108

 

 

 

160

 

Adjusted revenues

 

$

318,906

 

 

$

288,818

 

 

$

640,323

 

 

$

564,003

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(24,268

)

 

$

(8,369

)

 

$

(38,976

)

 

$

6,566

 

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

 

54

 

 

 

80

 

 

 

108

 

 

 

160

 

Interest income (b)

 

 

(713

)

 

 

(197

)

 

 

(1,034

)

 

 

(367

)

Interest expense (b)

 

 

4,212

 

 

 

4,225

 

 

 

9,065

 

 

 

8,440

 

Income tax provision (benefit)

 

 

(5,833

)

 

 

15,516

 

 

 

(3,813

)

 

 

9,928

 

Depreciation and amortization

 

 

32,182

 

 

 

30,010

 

 

 

63,800

 

 

 

58,402

 

Non-cash compensation expense (d)

 

 

23,504

 

 

 

17,285

 

 

 

45,318

 

 

 

31,422

 

Restructuring charges and transaction costs (e)

 

 

21,026

 

 

 

5,028

 

 

 

23,372

 

 

 

7,812

 

Severance (d)

 

 

7,148

 

 

 

5,377

 

 

 

10,254

 

 

 

10,291

 

Accretion on contingent consideration and purchase

liability (c)

 

 

 

 

 

187

 

 

 

 

 

 

575

 

Fair market value adjustment on contingent consideration liability (c)

 

 

 

 

 

 

 

 

 

 

 

(140

)

Fair market value adjustment to investment in private company (b)

 

 

 

 

 

(758

)

 

 

 

 

 

(758

)

Non-recurring litigation and regulatory related expenses (c)

 

 

4,306

 

 

 

1,938

 

 

 

7,383

 

 

 

3,647

 

Foreign currency (b)

 

 

413

 

 

 

(138

)

 

 

305

 

 

 

13

 

Non-income tax expense adjustment (c)

 

 

189

 

 

 

295

 

 

 

213

 

 

 

(271

)

Dilution gain on equity method investee share issuance (b)

 

 

(6,934

)

 

 

 

 

 

(6,934

)

 

 

 

Loss allocations from equity method investments (b)

 

 

1,400

 

 

 

757

 

 

 

2,945

 

 

 

4,045

 

(Income) loss attributable to non-controlling interest

 

 

440

 

 

 

(175

)

 

 

817

 

 

 

(440

)

Adjusted EBITDA

 

$

57,126

 

 

$

71,061

 

 

$

112,823

 

 

$

139,325

 

(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 administration expenses in the condensed consolidated statements of operations.

(d)

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

(e)

For the three months ended June 30, 2022 and 2021, $20.9 million and $2.7 million were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the three months ended June 30, 2022 and 2021, $0.1 million and $2.3 million were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2022 and 2021, $23.5 million and $4.5 million were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2022 and 2021, $(0.1) million and $3.3 million were included within compensation and benefits, 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

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net income (loss)

 

$

(24,268

)

 

$

(8,369

)

 

$

(38,976

)

 

$

6,566

 

Income tax provision (benefit) (a)

 

 

(5,833

)

 

 

15,516

 

 

 

(3,813

)

 

 

9,928

 

Income (loss) before income tax provision (benefit)

 

 

(30,101

)

 

 

7,147

 

 

 

(42,789

)

 

 

16,494

 

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (b)

 

 

54

 

 

 

80

 

 

 

108

 

 

 

160

 

Non-cash interest expense (d)

 

 

1,415

 

 

 

1,429

 

 

 

3,474

 

 

 

2,852

 

Cash interest - Convertible Notes (d)

 

 

2,480

 

 

 

2,480

 

 

 

4,960

 

 

 

4,960

 

Non-cash compensation expense (e)

 

 

23,504

 

 

 

17,285

 

 

 

45,318

 

 

 

31,422

 

Restructuring charges and transaction costs (g)

 

 

21,026

 

 

 

5,028

 

 

 

23,372

 

 

 

7,812

 

Severance (e)

 

 

7,148

 

 

 

5,377

 

 

 

10,254

 

 

 

10,291

 

Accretion on contingent consideration and purchase

liability (c)

 

 

 

 

 

187

 

 

 

 

 

 

575

 

Fair market value adjustment on contingent consideration liability (c)

 

 

 

 

 

 

 

 

 

 

 

(140

)

Fair market value adjustment to investment in private company (d)

 

 

 

 

 

(758

)

 

 

 

 

 

(758

)

Amortization of acquired intangibles (f)

 

 

17,645

 

 

 

17,502

 

 

 

35,165

 

 

 

33,980

 

Non-recurring litigation and regulatory related expenses (c)

 

 

4,306

 

 

 

1,938

 

 

 

7,383

 

 

 

3,647

 

Foreign currency (d)

 

 

413

 

 

 

(138

)

 

 

305

 

 

 

13

 

Non-income tax expense adjustment (c)

 

 

189

 

 

 

295

 

 

 

213

 

 

 

(271

)

Dilution gain on equity method investee share issuance (d)

 

 

(6,934

)

 

 

 

 

 

(6,934

)

 

 

 

Loss allocations from equity method investments (d)

 

 

1,400

 

 

 

757

 

 

 

2,945

 

 

 

4,045

 

Loss (income) attributable to non-controlling interest

 

 

440

 

 

 

(175

)

 

 

817

 

 

 

(440

)

Adjusted net income before income tax effect

 

 

42,985

 

 

 

58,434

 

 

 

84,591

 

 

 

114,642

 

Income tax effect (h)

 

 

(10,961

)

 

 

(14,901

)

 

 

(21,571

)

 

 

(29,234

)

Adjusted net income

 

$

32,024

 

 

$

43,533

 

 

$

63,020

 

 

$

85,408

 

 

 

 

 

 

 

 

 

 

Basic number of weighted-average shares outstanding

 

 

55,203,120

 

 

 

54,440,388

 

 

 

55,054,272

 

 

 

54,325,353

 

Effect of dilutive shares:

 

 

 

 

 

 

 

 

Options to purchase common stock

 

 

129,217

 

 

 

198,277

 

 

 

142,510

 

 

 

210,381

 

Unvested restricted stock units

 

 

199,853

 

 

 

435,023

 

 

 

381,397

 

 

 

536,186

 

Convertible Notes

 

 

9,898,549

 

 

 

9,898,549

 

 

 

9,898,549

 

 

 

9,898,549

 

Warrants

 

 

22,170

 

 

 

53,648

 

 

 

37,473

 

 

 

65,026

 

Diluted number of weighted-average shares outstanding

 

 

65,452,909

 

 

 

65,025,885

 

 

 

65,514,201

 

 

 

65,035,495

 

 

 

 

 

 

 

 

 

 

Adjusted net income per share - diluted

 

$

0.49

 

 

$

0.67

 

 

$

0.96

 

 

$

1.31

 

(a)

For the three months ended June 30, 2022 and 2021, the effective tax rate computed in accordance with GAAP equaled 19.4% and 217.1%, respectively. For the six months ended June 30, 2022 and 2021, the effective tax rate computed in accordance with GAAP equaled 8.9% and 60.2%, respectively.

(b)

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

(c)

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

(d)

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

(e)

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

(f)

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

(g)

For the three months ended June 30, 2022 and 2021, $20.9 million and $2.7 million were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the three months ended June 30, 2022 and 2021, $0.1 million and $2.3 million were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2022 and 2021, $23.5 million and $4.5 million were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2022 and 2021, $(0.1) million and $3.3 million were included within compensation and benefits, 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 and six months ended June 30, 2022 and 2021.

 

Reconciliation of Non-GAAP Financial Measures

Segment Information

(in thousands)

(unaudited)

 

 

 

Three Months Ended June 30, 2022

 

 

Envestnet

Wealth Solutions

 

Envestnet Data

& Analytics

 

Nonsegment

 

Total

Revenues

 

$

272,000

 

$

46,852

 

 

$

 

 

$

318,852

 

Deferred revenue fair value adjustment (a)

 

 

54

 

 

 

 

 

 

 

 

54

 

Adjusted revenues

 

$

272,054

 

$

46,852

 

 

$

 

 

$

318,906

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Asset-based

 

$

191,972

 

$

 

 

$

 

 

$

191,972

 

Subscription-based

 

 

73,568

 

 

44,552

 

 

 

 

 

 

118,120

 

Total recurring revenues

 

 

265,540

 

 

44,552

 

 

 

 

 

 

310,092

 

Professional services and other revenues

 

 

6,460

 

 

2,300

 

 

 

 

 

 

8,760

 

Total revenues

 

 

272,000

 

 

46,852

 

 

 

 

 

 

318,852

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Asset-based

 

 

112,301

 

 

 

 

 

 

 

 

112,301

 

Subscription-based

 

 

1,504

 

 

5,737

 

 

 

 

 

 

7,241

 

Professional services and other

 

 

6,917

 

 

23

 

 

 

 

 

 

6,940

 

Total cost of revenues

 

 

120,722

 

 

5,760

 

 

 

 

 

 

126,482

 

Compensation and benefits

 

 

78,759

 

 

23,994

 

 

 

23,014

 

 

 

125,767

 

General and administration

 

 

45,001

 

 

12,171

 

 

 

8,972

 

 

 

66,144

 

Depreciation and amortization

 

 

23,550

 

 

8,632

 

 

 

 

 

 

32,182

 

Total operating expenses

 

$

268,032

 

$

50,557

 

 

$

31,986

 

 

$

350,575

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

3,968

 

$

(3,705

)

 

$

(31,986

)

 

$

(31,723

)

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

 

54

 

 

 

 

 

 

 

 

54

 

Depreciation and amortization

 

 

23,550

 

 

8,632

 

 

 

 

 

 

32,182

 

Non-cash compensation expense (c)

 

 

13,364

 

 

1,852

 

 

 

8,288

 

 

 

23,504

 

Restructuring charges and transaction costs (d)

 

 

16,897

 

 

753

 

 

 

3,376

 

 

 

21,026

 

Severance (c)

 

 

2,813

 

 

(431

)

 

 

4,766

 

 

 

7,148

 

Non-recurring litigation and regulatory related expenses (b)

 

 

 

 

4,306

 

 

 

 

 

 

4,306

 

Non-income tax expense adjustment (b)

 

 

184

 

 

5

 

 

 

 

 

 

189

 

Loss attributable to non-controlling interest

 

 

440

 

 

 

 

 

 

 

 

440

 

Adjusted EBITDA

 

$

61,270

 

$

11,412

 

 

$

(15,556

)

 

$

57,126

 

(a)

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

(b)

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

(c)

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

(d)

For the three months ended June 30, 2022, $20.9 million was included within general and administration expenses and $0.1 million was included within compensation and benefits in the condensed consolidated statements of operations.

 

Reconciliation of Non-GAAP Financial Measures

Segment Information (continued)

(in thousands)

(unaudited)

 

 

 

Six Months Ended June 30, 2022

 

 

Envestnet

Wealth Solutions

 

Envestnet Data

& Analytics

 

Nonsegment

 

Total

Revenues

 

$

545,568

 

$

94,647

 

 

$

 

 

$

640,215

 

Deferred revenue fair value adjustment (a)

 

 

108

 

 

 

 

 

 

 

 

108

 

Adjusted revenues

 

$

545,676

 

$

94,647

 

 

$

 

 

$

640,323

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Asset-based

 

$

394,689

 

$

 

 

$

 

 

$

394,689

 

Subscription-based

 

 

142,105

 

 

90,749

 

 

 

 

 

 

232,854

 

Total recurring revenues

 

 

536,794

 

 

90,749

 

 

 

 

 

 

627,543

 

Professional services and other revenues

 

 

8,774

 

 

3,898

 

 

 

 

 

 

12,672

 

Total revenues

 

 

545,568

 

 

94,647

 

 

 

 

 

 

640,215

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Asset-based

 

 

229,729

 

 

 

 

 

 

 

 

229,729

 

Subscription-based

 

 

2,869

 

 

12,183

 

 

 

 

 

 

15,052

 

Professional services and other

 

 

6,932

 

 

51

 

 

 

 

 

 

6,983

 

Total cost of revenues

 

 

239,530

 

 

12,234

 

 

 

 

 

 

251,764

 

Compensation and benefits

 

 

157,403

 

 

54,160

 

 

 

41,053

 

 

 

252,616

 

General and administration

 

 

72,361

 

 

20,782

 

 

 

17,336

 

 

 

110,479

 

Depreciation and amortization

 

 

47,037

 

 

16,763

 

 

 

 

 

 

63,800

 

Total operating expenses

 

$

516,331

 

$

103,939

 

 

$

58,389

 

 

$

678,659

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

29,237

 

$

(9,292

)

 

$

(58,389

)

 

$

(38,444

)

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

 

108

 

 

 

 

 

 

 

 

108

 

Depreciation and amortization

 

 

47,037

 

 

16,763

 

 

 

 

 

 

63,800

 

Non-cash compensation expense (c)

 

 

24,654

 

 

5,387

 

 

 

15,277

 

 

 

45,318

 

Restructuring charges and transaction costs (d)

 

 

17,181

 

 

750

 

 

 

5,441

 

 

 

23,372

 

Severance (c)

 

 

4,223

 

 

1,211

 

 

 

4,820

 

 

 

10,254

 

Non-recurring litigation and regulatory related expenses (b)

 

 

 

 

7,383

 

 

 

 

 

 

7,383

 

Non-income tax expense adjustment (b)

 

 

291

 

 

(78

)

 

 

 

 

 

213

 

Loss attributable to non-controlling interest

 

 

817

 

 

 

 

 

 

 

 

817

 

Other

 

 

 

 

2

 

 

 

 

 

 

2

 

Adjusted EBITDA

 

$

123,548

 

$

22,126

 

 

$

(32,851

)

 

$

112,823

 

(a)

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

(b)

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

(c)

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

(d)

For the six months ended June 30, 2022, $23.5 million was included within general and administration expenses and $(0.1) million was 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 June 30, 2021

 

 

Envestnet

Wealth Solutions

 

Envestnet Data

& Analytics

 

Nonsegment

 

Total

Revenues

 

$

240,297

 

 

$

48,441

 

$

 

 

$

288,738

 

Deferred revenue fair value adjustment (a)

 

 

80

 

 

 

 

 

 

 

 

80

 

Adjusted revenues

 

$

240,377

 

 

$

48,441

 

$

 

 

$

288,818

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Asset-based

 

$

170,075

 

 

$

 

$

 

 

$

170,075

 

Subscription-based

 

 

66,663

 

 

 

45,841

 

 

 

 

 

112,504

 

Total recurring revenues

 

 

236,738

 

 

 

45,841

 

 

 

 

 

282,579

 

Professional services and other revenues

 

 

3,559

 

 

 

2,600

 

 

 

 

 

6,159

 

Total revenues

 

 

240,297

 

 

 

48,441

 

 

 

 

 

288,738

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Asset-based

 

 

93,341

 

 

 

 

 

 

 

 

93,341

 

Subscription-based

 

 

1,294

 

 

 

5,733

 

 

 

 

 

7,027

 

Professional services and other

 

 

78

 

 

 

48

 

 

 

 

 

126

 

Total cost of revenues

 

 

94,713

 

 

 

5,781

 

 

 

 

 

100,494

 

Compensation and benefits

 

 

65,114

 

 

 

25,008

 

 

15,426

 

 

 

105,548

 

General and administration

 

 

24,884

 

 

 

9,427

 

 

7,444

 

 

 

41,755

 

Depreciation and amortization

 

 

23,127

 

 

 

6,883

 

 

 

 

 

30,010

 

Total operating expenses

 

$

207,838

 

 

$

47,099

 

$

22,870

 

 

$

277,807

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

32,459

 

 

$

1,342

 

$

(22,870

)

 

$

10,931

 

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

 

80

 

 

 

 

 

 

 

 

80

 

Depreciation and amortization

 

 

23,127

 

 

 

6,883

 

 

 

 

 

30,010

 

Non-cash compensation expense (c)

 

 

9,590

 

 

 

3,183

 

 

4,512

 

 

 

17,285

 

Restructuring charges and transaction costs (d)

 

 

3,821

 

 

 

27

 

 

1,180

 

 

 

5,028

 

Severance (c)

 

 

1,096

 

 

 

1,687

 

 

2,594

 

 

 

5,377

 

Accretion on contingent consideration and purchase liability (b)

 

 

168

 

 

 

19

 

 

 

 

 

187

 

Non-recurring litigation and regulatory related expenses (b)

 

 

 

 

 

1,938

 

 

 

 

 

1,938

 

Non-income tax expense adjustment (b)

 

 

105

 

 

 

190

 

 

 

 

 

295

 

Income attributable to non-controlling interest

 

 

(175

)

 

 

 

 

 

 

 

(175

)

Other

 

 

88

 

 

 

9

 

 

8

 

 

 

105

 

Adjusted EBITDA

 

$

70,359

 

 

$

15,278

 

$

(14,576

)

 

$

71,061

 

(a)

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

(b)

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

(c)

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

(d)

For the three months ended June 30, 2021, $2.7 million was included within general and administration expenses and $2.3 million was included within compensation and benefits in the condensed consolidated statements of operations.

 

Reconciliation of Non-GAAP Financial Measures

Segment Information (continued)

(in thousands)

(unaudited)

 

 

 

Six Months Ended June 30, 2021

 

 

Envestnet

Wealth Solutions

 

Envestnet Data

& Analytics

 

Nonsegment

 

Total

Revenues

 

$

466,707

 

 

$

97,136

 

 

$

 

 

$

563,843

 

Deferred revenue fair value adjustment (a)

 

 

160

 

 

 

 

 

 

 

 

 

160

 

Adjusted revenues

 

$

466,867

 

 

$

97,136

 

 

$

 

 

$

564,003

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Asset-based

 

$

329,450

 

 

$

 

 

$

 

 

$

329,450

 

Subscription-based

 

 

130,675

 

 

 

91,658

 

 

 

 

 

 

222,333

 

Total recurring revenues

 

 

460,125

 

 

 

91,658

 

 

 

 

 

 

551,783

 

Professional services and other revenues

 

 

6,582

 

 

 

5,478

 

 

 

 

 

 

12,060

 

Total revenues

 

 

466,707

 

 

 

97,136

 

 

 

 

 

 

563,843

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Asset-based

 

 

179,531

 

 

 

 

 

 

 

 

 

179,531

 

Subscription-based

 

 

2,507

 

 

 

11,124

 

 

 

 

 

 

13,631

 

Professional services and other

 

 

107

 

 

 

94

 

 

 

 

 

 

201

 

Total cost of revenues

 

 

182,145

 

 

 

11,218

 

 

 

 

 

 

193,363

 

Compensation and benefits

 

 

127,968

 

 

 

51,297

 

 

 

26,997

 

 

 

206,262

 

General and administration

 

 

45,583

 

 

 

17,943

 

 

 

14,544

 

 

 

78,070

 

Depreciation and amortization

 

 

44,355

 

 

 

14,047

 

 

 

 

 

 

58,402

 

Total operating expenses

 

$

400,051

 

 

$

94,505

 

 

$

41,541

 

 

$

536,097

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

66,656

 

 

$

2,631

 

 

$

(41,541

)

 

$

27,746

 

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

 

160

 

 

 

 

 

 

 

 

 

160

 

Depreciation and amortization

 

 

44,355

 

 

 

14,047

 

 

 

 

 

 

58,402

 

Non-cash compensation expense (c)

 

 

17,419

 

 

 

6,024

 

 

 

7,979

 

 

 

31,422

 

Restructuring charges and transaction costs (d)

 

 

5,186

 

 

 

174

 

 

 

2,452

 

 

 

7,812

 

Severance (c)

 

 

4,183

 

 

 

3,407

 

 

 

2,701

 

 

 

10,291

 

Accretion on contingent consideration and purchase liability (b)

 

 

510

 

 

 

65

 

 

 

 

 

 

575

 

Fair market value adjustment on contingent consideration liability (b)

 

 

 

 

 

(140

)

 

 

 

 

 

(140

)

Non-recurring litigation and regulatory related expenses (b)

 

 

 

 

 

3,647

 

 

 

 

 

 

3,647

 

Non-income tax expense adjustment (b)

 

 

(430

)

 

 

159

 

 

 

 

 

 

(271

)

Income attributable to non-controlling interest

 

 

(440

)

 

 

 

 

 

 

 

 

(440

)

Other

 

 

104

 

 

 

9

 

 

 

8

 

 

 

121

 

Adjusted EBITDA

 

$

137,703

 

 

$

30,023

 

 

$

(28,401

)

 

$

139,325

 

(a)

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

(b)

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

(c)

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

(d)

For the six months ended June 30, 2021, $4.5 million was included within general and administration expenses and $3.3 million was 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

 

 

June 30,

 

September 30,

 

December 31,

 

March 31,

 

June 30,

 

 

2021

 

2021

 

2021

 

2022(1)

 

2022

 

 

(in millions, except accounts and advisors data)

Platform Assets

 

 

 

 

 

 

 

 

 

 

Assets under Management (“AUM”)

 

$

315,422

 

$

327,279

 

$

362,038

 

$

361,251

 

 

$

325,209

Assets under Administration (“AUA”)

 

 

426,416

 

 

431,040

 

 

456,316

 

 

432,141

 

 

 

352,840

Total AUM/A

 

 

741,838

 

 

758,319

 

 

818,354

 

 

793,392

 

 

 

678,049

Subscription

 

 

4,447,733

 

 

4,670,827

 

 

4,901,662

 

 

4,736,537

 

 

 

4,312,114

Total Platform Assets

 

$

5,189,571

 

$

5,429,146

 

$

5,720,016

 

$

5,529,929

 

 

$

4,990,163

Platform Accounts

 

 

 

 

 

 

 

 

 

 

AUM

 

 

1,209,761

 

 

1,276,066

 

 

1,345,274

 

 

1,459,093

 

 

 

1,491,861

AUA

 

 

1,163,991

 

 

1,193,069

 

 

1,217,076

 

 

1,186,180

 

 

 

1,061,484

Total AUM/A

 

 

2,373,752

 

 

2,469,135

 

 

2,562,350

 

 

2,645,273

 

 

 

2,553,345

Subscription

 

 

11,712,573

 

 

14,810,664

 

 

14,986,531

 

 

15,151,569

 

 

 

15,312,144

Total Platform Accounts

 

 

14,086,325

 

 

17,279,799

 

 

17,548,881

 

 

17,796,842

 

 

 

17,865,489

Advisors

 

 

 

 

 

 

 

 

 

 

AUM/A

 

 

41,259

 

 

41,696

 

 

39,735

 

 

39,800

 

 

 

38,394

Subscription

 

 

66,597

 

 

66,489

 

 

68,808

 

 

67,168

 

 

 

66,838

Total Advisors

 

 

107,856

 

 

108,185

 

 

108,543

 

 

106,968

 

 

 

105,232

(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 June 30, 2022:

 

 

3/31/2022

 

Gross

Sales

 

Redemptions

 

Net

Flows

 

Market

Impact

 

Reclass to

Subscription

 

6/30/2022

 

 

(in millions, except account data)

AUM

 

$

361,251

 

$

24,829

 

$

(18,962

)

 

$

5,867

 

 

$

(41,909

)

 

$

 

 

$

325,209

AUA

 

 

432,141

 

 

27,323

 

 

(27,662

)

 

 

(339

)

 

 

(50,499

)

 

 

(28,463

)

 

 

352,840

Total AUM/A

 

$

793,392

 

$

52,152

 

$

(46,624

)

 

$

5,528

 

 

$

(92,408

)

 

$

(28,463

)

 

$

678,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee-Based Accounts

 

 

2,645,273

 

 

 

 

 

 

19,494

 

 

 

 

 

(111,422

)

 

 

2,553,345

The above AUM/A gross sales figures include $9.2 billion in new client conversions. The Company onboarded an additional $24.4 billion in subscription conversions during the three months ended June 30, 2022, bringing total conversions for the quarter to $33.6 billion.

Asset and account figures in the “Reclass to Subscription” columns for the three months ended June 30, 2022 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.

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