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Envestnet Reports Second Quarter 2024 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, 2024.

 

 

Three months ended

 

 

 

Six months ended

 

 

Key Financial Metrics

 

June 30,

 

%

 

June 30,

 

%

(in millions, except per share data)

 

 

2024

 

 

 

2023

 

 

Change

 

 

2024

 

 

 

2023

 

 

Change

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

348.3

 

 

$

312.4

 

 

11

%

 

$

673.2

 

 

$

611.1

 

 

10

%

Net loss attributable to Envestnet, Inc.

 

$

(79.2

)

 

$

(21.4

)

 

 

*

 

$

(76.7

)

 

$

(62.6

)

 

(22

)%

Net loss attributable to Envestnet, Inc. per diluted share

 

$

(1.44

)

 

$

(0.39

)

 

*

 

$

(1.39

)

 

$

(1.15

)

 

(21

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA(1)

 

$

77.8

 

 

$

56.0

 

 

39

%

 

$

148.2

 

 

$

110.0

 

 

35

%

Adjusted net income(1)

 

$

36.4

 

 

$

30.4

 

 

20

%

 

$

75.8

 

 

$

60.5

 

 

25

%

Adjusted net income per diluted share(1)

 

$

0.55

 

 

$

0.46

 

 

20

%

 

$

1.14

 

 

$

0.91

 

 

25

%

Free cash flow(1)

 

$

67.0

 

 

$

36.7

 

 

83

%

 

$

47.1

 

 

$

(25.1

)

 

*

__________________________________________________

*Not meaningful

Jim Fox, Board Chair and Interim CEO, said: "We look forward to the successful completion of our pending transaction with Bain Capital and the value it will deliver to our shareholders. We remain committed to maintaining our leading position, which is based on executing on what our clients need and deepening our relationships with them."

Financial Results for the Second Quarter 2024 Compared to the Second Quarter 2023

Total revenue increased 11% to $348.3 million for the second quarter of 2024 from $312.4 million for the second quarter of 2023. Asset-based recurring revenue increased 18% and represented 63% of total revenue for the second quarter of 2024, compared to 59% of total revenue for the second quarter of 2023. Subscription-based recurring revenue increased 3% and represented 34% of total revenue for the second quarter of 2024, compared to 37% of total revenue for the second quarter of 2023. Professional services and other non-recurring revenue decreased 8% for the second quarter of 2024 from the second quarter of 2023.

Total operating expenses increased 29% to $423.8 million for the second quarter of 2024 from $327.7 million for the second quarter of 2023. Direct expense increased 16% to $144.4 million for the second quarter of 2024 from $124.2 million for the second quarter of 2023. Employee compensation decreased 11% to $104.1 million for the second quarter of 2024 from $117.1 million for the second quarter of 2023. Employee compensation was 30% of total revenue for the second quarter of 2024, compared to 37% of total revenue for the second quarter of 2023. General and administrative expense decreased 3% to $52.9 million for the second quarter of 2024 from $54.4 million for the second quarter of 2023. General and administrative expense was 15% of total revenue for the second quarter of 2024, compared to 17% of total revenue for the second quarter of 2023. A non-cash goodwill impairment charge of $96.3 million and a non-cash gain on deconsolidation of non-controlling interest of $19.5 million were recognized during the second quarter of 2024.

Loss from operations was $75.5 million for the second quarter of 2024 compared to a loss from operations of $15.3 million for the second quarter of 2023. Net loss attributable to Envestnet, Inc. was $79.2 million, or $1.44 per diluted share, for the second quarter of 2024 compared to a net loss attributable to Envestnet, Inc. of $21.4 million, or $0.39 per diluted share, for the second quarter of 2023.

Adjusted EBITDA(1) increased 39% to $77.8 million for the second quarter of 2024 from $56.0 million for the second quarter of 2023. Adjusted net income(1) increased 20% to $36.4 million, or $0.55 per diluted share, for the second quarter of 2024 from $30.4 million, or $0.46 per diluted share, for the second quarter of 2023. Free cash flow(1) increased 83%, to $67.0 for the second quarter of 2024 from $36.7 for the second quarter of 2023.

Balance Sheet and Liquidity

As of June 30, 2024, Envestnet had $122.0 million in cash and cash equivalents and $892.5 million in outstanding debt. Debt as of June 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 June 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 six months ended June 30, 2024 is presented in conjunction with the current organizational structure, with prior periods adjusted accordingly.

Correction of Immaterial Errors

In July 2024, the Company identified that as a result of a clerical error an event of default had occurred pursuant to the indenture under which the Convertible Notes due 2025 had been issued, and therefore the Convertible Notes due 2025 should have been classified as current debt instead of as non-current debt as previously recorded in the condensed consolidated balance sheets. Upon identification, the Company promptly cured the technical default. Upon analysis, the Company concluded that the classification error was immaterial in prior period financial statements as the event of default was caused by a clerical error and was not reflective of noncompliance with any factors impacting the Company’s liquidity or financial covenants. If the Company had identified the technical default in the prior period and classified the debt as current, the matter would have been disclosed and promptly resolved. Therefore, amendment of previously filed reports was not required. However, the Company corrected this immaterial error in the prior year reported within this press release.

During the fourth quarter of 2023, the Company identified that the arrangement with a third-party for the use of cloud hosted virtual servers which was previously accounted for as a finance lease transaction and included as a component of property and equipment, net in the condensed consolidated balance sheets should have been recognized as a prepayment included within prepaid expenses and other current assets and other assets in the condensed consolidated balance sheets. The Company concluded that the classification of these transactions was immaterial in prior period financial statements and that amendment of previously filed reports was not required. However, the Company corrected this immaterial error in the prior periods reported within this press release.

Conference Call

Envestnet will host a conference call to discuss second quarter 2024 financial results on August 12, 2024 at 5:00 p.m. ET. The live webcast and accompanying presentation can be accessed from Envestnet’s investor relations website at http://investor.envestnet.com/. A replay of the webcast will be available on the investor relations website following the call.

About Envestnet

Envestnet, Inc. (NYSE: ENV) is transforming the way financial advice and insight are delivered. Our mission is to empower financial advisors and service providers with innovative technology, solutions and intelligence. Envestnet's clients include more than 110,000 advisors, 17 of the 20 largest 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, severance expense, litigation, regulatory and other governance related expenses, foreign currency, non-income tax expense adjustment, fair market value adjustments to investments in private companies, (gain) loss from equity method investments and loss attributable to non‑controlling interest.

“Adjusted net income” represents net income (loss) before income tax provision (benefit), gain (loss) from equity method investments, deferred revenue fair value adjustment, non‑cash interest expense, cash interest on our Convertible Notes, amortization of acquired intangibles, goodwill impairment, gain on deconsolidation, non‑cash compensation expense, restructuring charges and transaction costs, severance expense, litigation, regulatory and other governance related expenses, foreign currency, non-income tax expense adjustment, fair market value adjustments to investments in private companies and loss attributable to non‑controlling interest. Reconciling items are presented gross of tax, and a normalized tax rate is applied to the total of all reconciling items to arrive at adjusted net income. The normalized tax rate is based solely on the estimated blended statutory income tax rates in the jurisdictions in which we operate. We monitor the normalized tax rate based on events or trends that could materially impact the rate, including tax legislation changes and changes in the geographic mix of our operations.

“Adjusted net income per diluted share” represents adjusted net income attributable to common stockholders divided by the diluted number of weighted average shares outstanding. For purposes of the adjusted net income per share calculation, we assume all potential shares to be issued in connection with our convertible notes are dilutive.

"Free cash flow" represents net cash provided by (used in) operating activities less purchases of property and equipment and capitalization of internally developed software.

For further information see reconciliations of Non-GAAP Financial Measures on pages 9-15 of this press release, and the section entitled "Non-GAAP Financial Measures" in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) which are available on the SEC’s website at http://www.sec.gov or our Investor Relations website at http://investor.envestnet.com/. Reconciliations are not provided for guidance on such measures as the Company is unable to predict the amounts to be adjusted, such as the GAAP tax provision. The Company’s Non-GAAP Financial Measures should not be viewed as a substitute for revenue, net income (loss), net income (loss) per share or net cash provided by (used in) operating activities determined in accordance with GAAP.

Cautionary Statement Regarding Forward-Looking Statements

The forward-looking statements made in this press release and its attachments concerning its strategic and operational plans and growth strategy are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, any statements that refer to our pending merger with affiliates of vehicles managed or advised by Bain Capital Private Equity, LP. (the "Merger"), projections of our future financial performance, our anticipated growth and trends in our business and other characteristics of future events or circumstances are forward-looking statements. These statements involve risks and uncertainties and our actual results could differ materially from the results expressed or implied by such forward-looking statements. Furthermore, reported results should not be considered as an indication of future performance. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release include, but are not limited to, the risk that the Merger may not be completed on the anticipated terms in a timely manner or at all, which may adversely affect our business and the price of our common stock; the failure to satisfy any of the conditions to the consummation of the Merger, including the receipt of certain regulatory approvals and the approval of the holders in a majority of the voting power of our common stock; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the merger agreement, including in circumstances requiring us to pay a termination fee; the effect of the announcement or pendency of the Merger on our business relationships, operating results and business relationships, operating results and business generally; risks that the Merger disrupts our current plans and operations (including the ability of certain customers to terminate or amend contracts upon a change of control); our ability to retain, hire and integrate skilled personnel, including our senior management team and maintain relationships with key business partners and customers, and others with whom we do business, in light of the Merger; risks related to diverting management's attention from our ongoing business operations; unexpected costs, charges or expenses resulting from the Merger; the ability to obtain the necessary financing arrangements set forth in the commitment letters received in connection with the Merger; potential litigation relating to the Merger that could be instituted against the parties to the merger agreement or their respective directors, managers or officers; the effects of any outcomes related thereto; certain restrictions during the pendency of the Merger that may impact our ability to pursue certain business opportunities or strategic transactions; uncertainty as to timing of completion of the Merger; risks that the benefits of the Merger are not realized when and as expected; adverse economic or global market conditions, including periods of rising inflation and market interest rates, and governmental responses to such conditions; the conflicts in the 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 August 9, 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)

 

 

 

June 30,

 

December 31,

 

 

2024

 

2023

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

121,967

 

$

91,378

Fees receivable, net

 

 

129,252

 

 

120,958

Prepaid expenses and other current assets

 

 

57,899

 

 

51,472

Total current assets

 

 

309,118

 

 

263,808

Property and equipment, net

 

 

45,641

 

 

48,223

Internally developed software, net

 

 

205,090

 

 

224,713

Intangible assets, net

 

 

311,868

 

 

338,068

Goodwill

 

 

690,885

 

 

806,563

Operating lease right-of-use assets, net

 

 

65,257

 

 

69,154

Investments in unconsolidated entities

 

 

96,755

 

 

56,292

Other assets

 

 

70,358

 

 

70,431

Total assets

 

$

1,794,972

 

$

1,877,252

 

 

 

 

 

Liabilities and equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable, accrued expenses and other current liabilities

 

$

225,508

 

$

241,424

Operating lease liabilities

 

 

12,149

 

 

12,909

Deferred revenue

 

 

34,567

 

 

38,201

Current portion of debt

 

 

 

 

314,532

Total current liabilities

 

 

272,224

 

 

607,066

Debt, net of current portion

 

 

879,079

 

 

562,080

Operating lease liabilities, net of current portion

 

 

95,294

 

 

100,830

Deferred tax liabilities, net

 

 

15,208

 

 

16,568

Other liabilities

 

 

16,820

 

 

16,202

Total liabilities

 

 

1,278,625

 

 

1,302,746

 

 

 

 

 

Equity:

 

 

 

 

Total stockholders’ equity attributable to Envestnet, Inc.

 

 

516,347

 

 

568,191

Non-controlling interest

 

 

 

 

6,315

Total liabilities and equity

 

$

1,794,972

 

$

1,877,252

Envestnet, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share information)

(unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue:

 

 

 

 

 

 

 

 

Asset-based

 

$

219,485

 

 

$

185,762

 

 

$

422,101

 

 

$

362,694

 

Subscription-based

 

 

117,988

 

 

 

114,959

 

 

 

235,450

 

 

 

232,038

 

Total recurring revenue

 

 

337,473

 

 

 

300,721

 

 

 

657,551

 

 

 

594,732

 

Professional services and other revenue

 

 

10,800

 

 

 

11,713

 

 

 

15,672

 

 

 

16,409

 

Total revenue

 

 

348,273

 

 

 

312,434

 

 

 

673,223

 

 

 

611,141

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Direct expense

 

 

144,351

 

 

 

124,209

 

 

 

270,984

 

 

 

233,888

 

Employee compensation

 

 

104,066

 

 

 

117,097

 

 

 

207,718

 

 

 

231,312

 

General and administrative

 

 

52,924

 

 

 

54,375

 

 

 

104,989

 

 

 

108,725

 

Depreciation and amortization

 

 

45,733

 

 

 

32,065

 

 

 

79,625

 

 

 

63,585

 

Goodwill impairment

 

 

96,269

 

 

 

 

 

 

96,269

 

 

 

 

Gain on deconsolidation

 

 

(19,523

)

 

 

 

 

 

(19,523

)

 

 

 

Total operating expenses

 

 

423,820

 

 

 

327,746

 

 

 

740,062

 

 

 

637,510

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(75,547

)

 

 

(15,312

)

 

 

(66,839

)

 

 

(26,369

)

Other expense, net

 

 

(4,788

)

 

 

(5,016

)

 

 

(9,169

)

 

 

(10,011

)

Loss before income tax provision (benefit) and equity method investments

 

 

(80,335

)

 

 

(20,328

)

 

 

(76,008

)

 

 

(36,380

)

Income tax provision (benefit)

 

 

(652

)

 

 

418

 

 

 

853

 

 

 

24,187

 

Gain (loss) from equity method investments

 

 

482

 

 

 

(2,386

)

 

 

(1,801

)

 

 

(5,326

)

Net loss

 

 

(79,201

)

 

 

(23,132

)

 

 

(78,662

)

 

 

(65,893

)

Add: Net loss attributable to non-controlling interest

 

 

 

 

 

1,716

 

 

 

1,974

 

 

 

3,249

 

Net loss attributable to Envestnet, Inc.

 

$

(79,201

)

 

$

(21,416

)

 

$

(76,688

)

 

$

(62,644

)

 

 

 

 

 

 

 

 

 

Net loss attributable to Envestnet, Inc. per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(1.44

)

 

$

(0.39

)

 

$

(1.39

)

 

$

(1.15

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

55,143,013

 

 

 

54,439,733

 

 

 

55,013,544

 

 

 

54,289,443

 

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Six Months Ended

 

 

June 30,

 

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(78,662

)

 

$

(65,893

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

79,625

 

 

 

63,585

 

Non-cash compensation expense

 

 

36,720

 

 

 

40,843

 

Non-cash interest expense

 

 

2,817

 

 

 

2,251

 

Non-cash goodwill impairment

 

 

96,269

 

 

 

 

Non-cash gain on deconsolidation

 

 

(19,523

)

 

 

 

Loss from equity method investments

 

 

1,801

 

 

 

5,326

 

Lease related impairments

 

 

 

 

 

2,483

 

Other

 

 

2,120

 

 

 

(218

)

Changes in operating assets and liabilities:

 

 

 

 

Fees receivable, net

 

 

(12,813

)

 

 

(22,357

)

Prepaid expenses and other assets

 

 

(5,745

)

 

 

(6,762

)

Accounts payable, accrued expenses and other liabilities

 

 

(14,049

)

 

 

20,070

 

Deferred revenue

 

 

2,494

 

 

 

(852

)

Net cash provided by operating activities

 

 

91,054

 

 

 

38,476

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

 

(5,172

)

 

 

(16,735

)

Capitalization of internally developed software

 

 

(38,751

)

 

 

(46,801

)

Deconsolidation of non-controlling interest

 

 

(11,073

)

 

 

 

Investments in private companies

 

 

(3,055

)

 

 

(1,450

)

Acquisition of proprietary technology

 

 

(3,000

)

 

 

(12,000

)

Issuance of loan receivable to private company

 

 

 

 

 

(20,000

)

Other

 

 

 

 

 

319

 

Net cash used in investing activities

 

 

(61,051

)

 

 

(96,667

)

Cash flows from financing activities:

 

 

 

 

Proceeds from borrowings on Revolving Credit Facility

 

 

 

 

 

40,000

 

Payments related to Revolving Credit Facility

 

 

 

 

 

(20,000

)

Payments related to Convertible Notes

 

 

 

 

 

(45,000

)

Proceeds from exercise of stock options

 

 

724

 

 

 

472

 

Payments related to tax withholdings for stock-based compensation

 

 

(12,155

)

 

 

(13,774

)

Payments related to share repurchases

 

 

 

 

 

(9,289

)

Proceeds from capital contributions received by non-controlling interest

 

 

12,012

 

 

 

 

Purchase of non-controlling units from third-party shareholders

 

 

 

 

 

(1,008

)

Other

 

 

3

 

 

 

3

 

Net cash provided by (used in) financing activities

 

 

584

 

 

 

(48,596

)

Effect of exchange rate on changes on cash and cash equivalents

 

 

2

 

 

 

3,633

 

Net change in cash and cash equivalents

 

 

30,589

 

 

 

(103,154

)

Cash and cash equivalents, beginning of period

 

 

91,378

 

 

 

162,173

 

Cash and cash equivalents, end of period

 

$

121,967

 

 

$

59,019

 

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net loss

 

$

(79,201

)

 

$

(23,132

)

 

$

(78,662

)

 

$

(65,893

)

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

 

 

 

 

17

 

 

 

 

 

 

69

 

Interest income (b)

 

 

(2,588

)

 

 

(1,656

)

 

 

(4,571

)

 

 

(3,014

)

Interest expense (b)

 

 

6,097

 

 

 

6,531

 

 

 

12,186

 

 

 

12,851

 

Income tax provision (benefit)

 

 

(652

)

 

 

418

 

 

 

853

 

 

 

24,187

 

Depreciation and amortization

 

 

45,733

 

 

 

32,065

 

 

 

79,625

 

 

 

63,585

 

Goodwill impairment

 

 

96,269

 

 

 

 

 

 

96,269

 

 

 

 

Gain on deconsolidation

 

 

(19,523

)

 

 

 

 

 

(19,523

)

 

 

 

Non-cash compensation expense (d)

 

 

17,822

 

 

 

21,390

 

 

 

36,720

 

 

 

40,843

 

Restructuring charges and transaction costs (e)

 

 

8,405

 

 

 

6,508

 

 

 

10,461

 

 

 

10,671

 

Severance expense (d)

 

 

669

 

 

 

8,234

 

 

 

4,094

 

 

 

14,422

 

Litigation, regulatory and other governance related expenses (c)

 

 

4,020

 

 

 

2,145

 

 

 

6,308

 

 

 

5,219

 

Foreign currency (b)

 

 

(229

)

 

 

74

 

 

 

46

 

 

 

107

 

Non-income tax expense adjustment (c)

 

 

(39

)

 

 

(30

)

 

 

(88

)

 

 

(198

)

Fair market value adjustments to investments in private companies (b)

 

 

1,508

 

 

 

67

 

 

 

1,508

 

 

 

67

 

(Gain) loss from equity method investments

 

 

(482

)

 

 

2,386

 

 

 

1,801

 

 

 

5,326

 

Loss attributable to non-controlling interest

 

 

 

 

 

1,027

 

 

 

1,160

 

 

 

1,805

 

Adjusted EBITDA

 

$

77,809

 

 

$

56,044

 

 

$

148,187

 

 

$

110,047

 

__________________________________________________________

(a)

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

(b)

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

(c)

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

(d)

Included within employee compensation expense in the condensed consolidated statements of operations.

(e)

For the three months ended June 30, 2024 and 2023, $6.7 million and $5.0 million, respectively, were included within general and administrative expense and $1.7 million and $1.5 million, respectively, were included within employee compensation expense in the condensed consolidated statements of operations. For the six months ended June 30, 2024 and 2023, $9.2 million and $9.1 million, respectively, were included within general and administrative expense and $1.3 million and $1.6 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

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net loss

 

$

(79,201

)

 

$

(23,132

)

 

$

(78,662

)

 

$

(65,893

)

Income tax provision (benefit) (a)

 

 

(652

)

 

 

418

 

 

 

853

 

 

 

24,187

 

Gain (loss) from equity method investments

 

 

482

 

 

 

(2,386

)

 

 

(1,801

)

 

 

(5,326

)

Loss before income tax provision (benefit) and equity method investments

 

 

(80,335

)

 

 

(20,328

)

 

 

(76,008

)

 

 

(36,380

)

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (b)

 

 

 

 

 

17

 

 

 

 

 

 

69

 

Non-cash interest expense (d)

 

 

1,412

 

 

 

1,427

 

 

 

2,817

 

 

 

2,869

 

Cash interest - Convertible Notes (d)

 

 

4,369

 

 

 

4,543

 

 

 

8,738

 

 

 

9,108

 

Amortization of acquired intangibles (e)

 

 

14,457

 

 

 

15,720

 

 

 

29,199

 

 

 

32,660

 

Goodwill impairment

 

 

96,269

 

 

 

 

 

 

96,269

 

 

 

 

Gain on deconsolidation

 

 

(19,523

)

 

 

 

 

 

(19,523

)

 

 

 

Non-cash compensation expense (f)

 

 

17,822

 

 

 

21,390

 

 

 

36,720

 

 

 

40,843

 

Restructuring charges and transaction costs (g)

 

 

8,405

 

 

 

6,508

 

 

 

10,461

 

 

 

10,671

 

Severance expense (f)

 

 

669

 

 

 

8,234

 

 

 

4,094

 

 

 

14,422

 

Litigation, regulatory and other governance related expenses (c)

 

 

4,020

 

 

 

2,145

 

 

 

6,308

 

 

 

5,219

 

Foreign currency (d)

 

 

(229

)

 

 

74

 

 

 

46

 

 

 

107

 

Non-income tax expense adjustment (c)

 

 

(39

)

 

 

(30

)

 

 

(88

)

 

 

(198

)

Fair market value adjustments to investments in private companies (d)

 

 

1,508

 

 

 

67

 

 

 

1,508

 

 

 

67

 

Loss attributable to non-controlling interest

 

 

 

 

 

1,027

 

 

 

1,160

 

 

 

1,805

 

Adjusted net income before income tax effect

 

 

48,805

 

 

 

40,794

 

 

 

101,701

 

 

 

81,262

 

Income tax effect (h)

 

 

(12,445

)

 

 

(10,403

)

 

 

(25,934

)

 

 

(20,722

)

Adjusted net income

 

$

36,360

 

 

$

30,391

 

 

$

75,767

 

 

$

60,540

 

 

 

 

 

 

 

 

 

 

Basic number of weighted average shares outstanding

 

 

55,143,013

 

 

 

54,439,733

 

 

 

55,013,544

 

 

 

54,289,443

 

Effect of dilutive shares:

 

 

 

 

 

 

 

 

Convertible Notes

 

 

10,811,884

 

 

 

11,253,471

 

 

 

10,811,884

 

 

 

11,361,458

 

Non-vested RSUs and PSUs

 

 

590,918

 

 

 

316,758

 

 

 

527,360

 

 

 

445,323

 

Options to purchase common stock

 

 

49,692

 

 

 

57,902

 

 

 

38,996

 

 

 

73,271

 

Diluted number of weighted average shares outstanding

 

 

66,595,507

 

 

 

66,067,864

 

 

 

66,391,784

 

 

 

66,169,495

 

 

 

 

 

 

 

 

 

 

Adjusted net income per diluted share

 

$

0.55

 

 

$

0.46

 

 

$

1.14

 

 

$

0.91

 

__________________________________________________________

(a)

For the three months ended June 30, 2024 and 2023, the effective tax rate computed in accordance with GAAP equaled 0.8% and (1.8)%, respectively. For the six months ended June 30, 2024 and 2023, the effective tax rate computed in accordance with GAAP equaled (1.1)% and (58.0)%, 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 June 30, 2024 and 2023, $6.7 million and $5.0 million, respectively, were included within general and administrative expense and $1.7 million and $1.5 million, respectively, were included within employee compensation expense in the condensed consolidated statements of operations. For the six months ended June 30, 2024 and 2023, $9.2 million and $9.1 million, respectively, were included within general and administrative expense and $1.3 million and $1.6 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 six months ended June 30, 2024 and 2023.

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net cash provided by operating activities

 

$

89,110

 

 

$

72,149

 

 

$

91,054

 

 

$

38,476

 

Less: Purchases of property and equipment

 

 

(3,272

)

 

 

(12,333

)

 

 

(5,172

)

 

 

(16,735

)

Less: Capitalization of internally developed software

 

 

(18,798

)

 

 

(23,137

)

 

 

(38,751

)

 

 

(46,801

)

Free cash flow

 

$

67,040

 

 

$

36,679

 

 

$

47,131

 

 

$

(25,060

)

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

Segment Information

(in thousands)

(unaudited)

 

 

 

Three Months Ended June 30, 2024

 

 

Envestnet Wealth Solutions

 

Envestnet Data & Analytics

 

Nonsegment

 

Total

Revenue:

 

 

 

 

 

 

 

 

Asset-based

 

$

219,485

 

 

$

 

 

$

 

 

$

219,485

 

Subscription-based

 

 

84,734

 

 

 

33,254

 

 

 

 

 

 

117,988

 

Total recurring revenue

 

 

304,219

 

 

 

33,254

 

 

 

 

 

 

337,473

 

Professional services and other revenue

 

 

7,889

 

 

 

2,911

 

 

 

 

 

 

10,800

 

Total revenue

 

 

312,108

 

 

 

36,165

 

 

 

 

 

 

348,273

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Direct expense

 

 

 

 

 

 

 

 

Asset-based

 

 

130,116

 

 

 

 

 

 

 

 

 

130,116

 

Subscription-based

 

 

1,474

 

 

 

7,174

 

 

 

 

 

 

8,648

 

Professional services and other

 

 

5,587

 

 

 

 

 

 

 

 

 

5,587

 

Total direct expense

 

 

137,177

 

 

 

7,174

 

 

 

 

 

 

144,351

 

Employee compensation

 

 

77,210

 

 

 

11,872

 

 

 

14,984

 

 

 

104,066

 

General and administrative

 

 

25,698

 

 

 

15,270

 

 

 

11,956

 

 

 

52,924

 

Depreciation and amortization

 

 

38,375

 

 

 

7,358

 

 

 

 

 

 

45,733

 

Goodwill impairment

 

 

 

 

 

96,269

 

 

 

 

 

 

96,269

 

Gain on deconsolidation

 

 

(19,523

)

 

 

 

 

 

 

 

 

(19,523

)

Total operating expenses

 

 

258,937

 

 

 

137,943

 

 

 

26,940

 

 

 

423,820

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

53,171

 

 

 

(101,778

)

 

 

(26,940

)

 

 

(75,547

)

Add (deduct):

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

38,375

 

 

 

7,358

 

 

 

 

 

 

45,733

 

Goodwill impairment

 

 

 

 

 

96,269

 

 

 

 

 

 

96,269

 

Gain on deconsolidation

 

 

(19,523

)

 

 

 

 

 

 

 

 

(19,523

)

Non-cash compensation expense (b)

 

 

11,360

 

 

 

1,904

 

 

 

4,558

 

 

 

17,822

 

Restructuring charges and transaction costs (c)

 

 

2,063

 

 

 

60

 

 

 

6,282

 

 

 

8,405

 

Severance expense (b)

 

 

632

 

 

 

 

 

 

37

 

 

 

669

 

Litigation, regulatory and other governance related expenses (a)

 

 

 

 

 

4,020

 

 

 

 

 

 

4,020

 

Non-income tax expense adjustment (a)

 

 

(39

)

 

 

 

 

 

 

 

 

(39

)

Adjusted EBITDA

 

$

86,039

 

 

$

7,833

 

 

$

(16,063

)

 

$

77,809

 

__________________________________________________________

(a)

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

(b)

Included within employee compensation expense in the condensed consolidated statements of operations.

(c)

$6.7 million was included within general and administrative expense and $1.7 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)

 

 

 

Six Months Ended June 30, 2024

 

 

Envestnet Wealth Solutions

 

Envestnet Data & Analytics

 

Nonsegment

 

Total

Revenue:

 

 

 

 

 

 

 

 

Asset-based

 

$

422,101

 

 

$

 

 

$

 

 

$

422,101

 

Subscription-based

 

 

168,902

 

 

 

66,548

 

 

 

 

 

 

235,450

 

Total recurring revenue

 

 

591,003

 

 

 

66,548

 

 

 

 

 

 

657,551

 

Professional services and other revenue

 

 

10,915

 

 

 

4,757

 

 

 

 

 

 

15,672

 

Total revenue

 

 

601,918

 

 

 

71,305

 

 

 

 

 

 

673,223

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Direct expense:

 

 

 

 

 

 

 

 

Asset-based

 

 

248,519

 

 

 

 

 

 

 

 

 

248,519

 

Subscription-based

 

 

2,905

 

 

 

13,973

 

 

 

 

 

 

16,878

 

Professional services and other

 

 

5,587

 

 

 

 

 

 

 

 

 

5,587

 

Total direct expense

 

 

257,011

 

 

 

13,973

 

 

 

 

 

 

270,984

 

Employee compensation

 

 

152,406

 

 

 

23,564

 

 

 

31,748

 

 

 

207,718

 

General and administrative

 

 

54,730

 

 

 

30,584

 

 

 

19,675

 

 

 

104,989

 

Depreciation and amortization

 

 

65,193

 

 

 

14,432

 

 

 

 

 

 

79,625

 

Goodwill impairment

 

 

 

 

 

96,269

 

 

 

 

 

 

96,269

 

Gain on deconsolidation

 

 

(19,523

)

 

 

 

 

 

 

 

 

(19,523

)

Total operating expenses

 

 

509,817

 

 

 

178,822

 

 

 

51,423

 

 

 

740,062

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

92,101

 

 

 

(107,517

)

 

 

(51,423

)

 

 

(66,839

)

Add (deduct):

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

65,193

 

 

 

14,432

 

 

 

 

 

 

79,625

 

Goodwill impairment

 

 

 

 

 

96,269

 

 

 

 

 

 

96,269

 

Gain on deconsolidation

 

 

(19,523

)

 

 

 

 

 

 

 

 

(19,523

)

Non-cash compensation expense (b)

 

 

22,747

 

 

 

3,768

 

 

 

10,205

 

 

 

36,720

 

Restructuring charges and transaction costs (c)

 

 

2,106

 

 

 

739

 

 

 

7,616

 

 

 

10,461

 

Severance expense (b)

 

 

2,436

 

 

 

13

 

 

 

1,645

 

 

 

4,094

 

Litigation, regulatory and other governance related expenses (a)

 

 

 

 

 

6,308

 

 

 

 

 

 

6,308

 

Non-income tax expense adjustment (a)

 

 

(88

)

 

 

 

 

 

 

 

 

(88

)

Loss attributable to non-controlling interest

 

 

1,160

 

 

 

 

 

 

 

 

 

1,160

 

Adjusted EBITDA

 

$

166,132

 

 

$

14,012

 

 

$

(31,957

)

 

$

148,187

 

__________________________________________________________

(a)

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

(b)

Included within employee compensation expense in the condensed consolidated statements of operations.

(c)

$9.2 million was included within general and administrative expense and $1.3 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 June 30, 2023

 

 

Envestnet Wealth Solutions

 

Envestnet Data & Analytics

 

Nonsegment

 

Total

Revenue:

 

 

 

 

 

 

 

 

Asset-based

 

$

185,762

 

 

$

 

 

$

 

 

$

185,762

 

Subscription-based

 

 

79,744

 

 

 

35,215

 

 

 

 

 

 

114,959

 

Total recurring revenue

 

 

265,506

 

 

 

35,215

 

 

 

 

 

 

300,721

 

Professional services and other revenue

 

 

10,318

 

 

 

1,395

 

 

 

 

 

 

11,713

 

Total revenue

 

 

275,824

 

 

 

36,610

 

 

 

 

 

 

312,434

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Direct expense:

 

 

 

 

 

 

 

 

Asset-based

 

 

108,532

 

 

 

 

 

 

 

 

 

108,532

 

Subscription-based

 

 

1,857

 

 

 

5,788

 

 

 

 

 

 

7,645

 

Professional services and other

 

 

8,032

 

 

 

 

 

 

 

 

 

8,032

 

Total direct expense

 

 

118,421

 

 

 

5,788

 

 

 

 

 

 

124,209

 

Employee compensation

 

 

77,898

 

 

 

19,839

 

 

 

19,360

 

 

 

117,097

 

General and administrative

 

 

31,225

 

 

 

14,792

 

 

 

8,358

 

 

 

54,375

 

Depreciation and amortization

 

 

25,575

 

 

 

6,490

 

 

 

 

 

 

32,065

 

Total operating expenses

 

 

253,119

 

 

 

46,909

 

 

 

27,718

 

 

 

327,746

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

22,705

 

 

 

(10,299

)

 

 

(27,718

)

 

 

(15,312

)

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

 

17

 

 

 

 

 

 

 

 

 

17

 

Depreciation and amortization

 

 

25,575

 

 

 

6,490

 

 

 

 

 

 

32,065

 

Non-cash compensation expense (c)

 

 

12,325

 

 

 

2,445

 

 

 

6,620

 

 

 

21,390

 

Restructuring charges and transaction costs (d)

 

 

5,414

 

 

 

69

 

 

 

1,025

 

 

 

6,508

 

Severance expense (c)

 

 

1,853

 

 

 

3,120

 

 

 

3,261

 

 

 

8,234

 

Litigation, regulatory and other governance related expenses (b)

 

 

 

 

 

2,210

 

 

 

(65

)

 

 

2,145

 

Non-income tax expense adjustment (b)

 

 

(25

)

 

 

(5

)

 

 

 

 

 

(30

)

Loss attributable to non-controlling interest

 

 

1,027

 

 

 

 

 

 

 

 

 

1,027

 

Adjusted EBITDA

 

$

68,891

 

 

$

4,030

 

 

$

(16,877

)

 

$

56,044

 

__________________________________________________________

(a)

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

(b)

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

(c)

Included within employee compensation expense in the condensed consolidated statements of operations.

(d)

$5.0 million was included within general and administrative expense and $1.5 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)

 

 

 

Six months ended June 30, 2023

 

 

Envestnet Wealth Solutions

 

Envestnet Data & Analytics

 

Nonsegment

 

Total

Revenue:

 

 

 

 

 

 

 

 

Asset-based

 

$

362,694

 

 

$

 

 

$

 

 

$

362,694

 

Subscription-based

 

 

160,214

 

 

 

71,824

 

 

 

 

 

 

232,038

 

Total recurring revenue

 

 

522,908

 

 

 

71,824

 

 

 

 

 

 

594,732

 

Professional services and other revenue

 

 

13,565

 

 

 

2,844

 

 

 

 

 

 

16,409

 

Total revenue

 

 

536,473

 

 

 

74,668

 

 

 

 

 

 

611,141

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Direct expense:

 

 

 

 

 

 

 

 

Asset-based

 

 

211,155

 

 

 

 

 

 

 

 

 

211,155

 

Subscription-based

 

 

3,635

 

 

 

11,062

 

 

 

 

 

 

14,697

 

Professional services and other

 

 

8,036

 

 

 

 

 

 

 

 

 

8,036

 

Total direct expense

 

 

222,826

 

 

 

11,062

 

 

 

 

 

 

233,888

 

Employee compensation

 

 

156,945

 

 

 

39,081

 

 

 

35,286

 

 

 

231,312

 

General and administrative

 

 

60,332

 

 

 

29,221

 

 

 

19,172

 

 

 

108,725

 

Depreciation and amortization

 

 

51,067

 

 

 

12,518

 

 

 

 

 

 

63,585

 

Total operating expenses

 

 

491,170

 

 

 

91,882

 

 

 

54,458

 

 

 

637,510

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

45,303

 

 

 

(17,214

)

 

 

(54,458

)

 

 

(26,369

)

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

 

69

 

 

 

 

 

 

 

 

 

69

 

Depreciation and amortization

 

 

51,067

 

 

 

12,518

 

 

 

 

 

 

63,585

 

Non-cash compensation expense (c)

 

 

23,792

 

 

 

4,882

 

 

 

12,169

 

 

 

40,843

 

Restructuring charges and transaction costs (d)

 

 

6,553

 

 

 

312

 

 

 

3,806

 

 

 

10,671

 

Severance expense (c)

 

 

5,652

 

 

 

5,325

 

 

 

3,445

 

 

 

14,422

 

Litigation, regulatory and other governance related expenses (b)

 

 

 

 

 

3,534

 

 

 

1,685

 

 

 

5,219

 

Non-income tax expense adjustment (b)

 

 

(127

)

 

 

(71

)

 

 

 

 

 

(198

)

Loss attributable to non-controlling interest

 

 

1,805

 

 

 

 

 

 

 

 

 

1,805

 

Adjusted EBITDA

 

$

134,114

 

 

$

9,286

 

 

$

(33,353

)

 

$

110,047

 

__________________________________________________________

(a)

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

(b)

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

(c)

Included within employee compensation expense in the condensed consolidated statements of operations.

(d)

$9.1 million was included within general and administrative expense and $1.6 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

 

 

June 30,

 

September 30,

 

December 31,

 

March 31,

 

June 30,

 

 

2023

 

2023

 

2023

 

2024

 

2024

Platform Assets

 

 

 

 

 

 

 

 

 

 

Assets under Management (“AUM”)

 

$

384,773

 

$

375,408

 

$

416,001

 

$

452,464

 

$

471,978

Assets under Administration (“AUA”)

 

 

394,078

 

 

398,082

 

 

430,846

 

 

471,401

 

 

471,479

Total AUM/A

 

 

778,851

 

 

773,490

 

 

846,847

 

 

923,865

 

 

943,457

Subscription

 

 

4,643,313

 

 

4,579,248

 

 

4,959,514

 

 

5,158,180

 

 

5,327,939

Total Platform Assets

 

$

5,422,164

 

$

5,352,738

 

$

5,806,361

 

$

6,082,045

 

$

6,271,396

Platform Accounts

 

 

 

 

 

 

 

 

 

 

AUM

 

 

1,609,677

 

 

1,614,873

 

 

1,640,879

 

 

1,688,044

 

 

1,752,768

AUA

 

 

1,144,375

 

 

1,257,094

 

 

1,254,962

 

 

1,315,442

 

 

1,325,370

Total AUM/A

 

 

2,754,052

 

 

2,871,967

 

 

2,895,841

 

 

3,003,486

 

 

3,078,138

Subscription

 

 

15,916,955

 

 

16,072,848

 

 

16,248,598

 

 

16,641,631

 

 

16,364,088

Total Platform Accounts

 

 

18,671,007

 

 

18,944,815

 

 

19,144,439

 

 

19,645,117

 

 

19,442,226

Advisors

 

 

 

 

 

 

 

 

 

 

AUM/A

 

 

38,809

 

 

38,078

 

 

38,697

 

 

38,814

 

 

38,484

Subscription

 

 

68,439

 

 

69,318

 

 

69,973

 

 

70,262

 

 

71,568

Total Advisors

 

 

107,248

 

 

107,396

 

 

108,670

 

 

109,076

 

 

110,052

The following tables summarize the changes in the amount of AUM/A assets and number of AUM/A accounts:

 

 

Asset Rollforward - Three Months Ended June 30, 2024

 

 

As of

March 31,

 

Gross

 

 

 

Net

 

Market

 

 

 

As of June 30,

 

 

2024

 

Sales

 

Redemptions

 

Flows

 

Impact

 

Reclassifications

 

2024

 

 

(in millions, except account data)

AUM

 

$

452,464

 

$

32,468

 

$

(18,900

)

 

$

13,568

 

 

$

4,186

 

$

1,760

 

 

$

471,978

AUA

 

 

471,401

 

 

32,847

 

 

(35,790

)

 

 

(2,943

)

 

 

6,032

 

 

(3,011

)

 

 

471,479

Total AUM/A

 

$

923,865

 

$

65,315

 

$

(54,690

)

 

$

10,625

 

 

$

10,218

 

$

(1,251

)

 

$

943,457

Fee-Based Accounts

 

 

3,003,486

 

 

 

 

 

 

82,230

 

 

 

 

 

(7,578

)

 

 

3,078,138

The above AUM/A gross sales figures for the three months ended June 30, 2024 include $18.2 billion in new client conversions. We onboarded an additional $149.6 billion in subscription conversions during the three months ended June 30, 2024 bringing total conversions for the three months ended June 30, 2024 to $167.8 billion.

 

 

Asset Rollforward - Six Months Ended June 30, 2024

 

 

As of

December 31,

 

Gross

 

 

 

Net

 

Market

 

 

 

As of June 30,

 

 

2023

 

Sales

 

Redemptions

 

Flows

 

Impact

 

Reclassifications

 

2024

 

 

(in millions, except account data)

AUM

 

$

416,001

 

$

64,595

 

$

(38,501

)

 

$

26,094

 

$

26,880

 

$

3,003

 

 

$

471,978

AUA

 

 

430,846

 

 

78,443

 

 

(61,192

)

 

 

17,251

 

 

28,715

 

 

(5,333

)

 

 

471,479

Total AUM/A

 

$

846,847

 

$

143,038

 

$

(99,693

)

 

$

43,345

 

$

55,595

 

$

(2,330

)

 

$

943,457

Fee-Based Accounts

 

 

2,895,841

 

 

 

 

 

 

194,863

 

 

 

 

(12,566

)

 

 

3,078,138

The above AUM/A gross sales figures for the six months ended June 30, 2024 include $48.0 billion in new client conversions. We onboarded an additional $180.7 billion in subscription conversions during the six months ended June 30, 2024 bringing total conversions for the six months ended June 30, 2024 to $228.7 billion.

Asset and account figures in the “Reclassifications” column for the three and six months ended June 30, 2024 represent immaterial amounts that were reclassified between AUM, AUA and subscription to reflect updated customer billing arrangements. These reclassifications have no impact on total platform assets or accounts.

Envestnet Data & Analytics Segment

The following table provides information regarding the number of paid end-users and firms using the Envestnet Data & Analytics platform:

 

 

As of

 

 

June 30,

 

September 30,

 

December 31,

 

March 31,

 

June 30,

 

 

2023

 

2023

 

2023

 

2024

 

2024

Number of paid end-users

 

38.0

 

42.3

 

38.3

 

43.8

 

44.3

Number of firms

 

1,339

 

1,322

 

1,324

 

1,323

 

1,182

 

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