Envestnet Reports Third Quarter 2021 Financial Results

Revenues, adjusted EBITDA and adjusted EPS exceed guidance in Q3 2021, Raising 2021 Outlook

Envestnet (NYSE: ENV), a leading provider of intelligent systems for wealth management and financial wellness, today reported financial results for the three and nine months ended September 30, 2021.

 

 

Three months ended

 

 

 

Nine months ended

 

 

Key Financial Metrics

 

September 30,

 

%

 

September 30,

 

%

(in millions except per share data)

 

2021

 

2020

 

Change

 

2021

 

2020

 

Change

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

303.1

 

 

$

252.6

 

 

20

%

 

$

866.9

 

 

$

734.4

 

 

18

%

Net income (loss)

 

$

11.4

 

 

$

2.3

 

 

n/m

 

 

$

18.0

 

 

$

(10.3

)

 

n/m

 

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

 

$

0.21

 

 

$

0.03

 

 

n/m

 

 

$

0.33

 

 

$

(0.19

)

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenues(1)

 

$

303.1

 

 

$

252.7

 

 

20

%

 

$

867.1

 

 

$

735.0

 

 

18

%

Adjusted EBITDA(1)

 

$

66.2

 

 

$

67.6

 

 

(2

)%

 

$

205.5

 

 

$

178.0

 

 

15

%

Adjusted net income(1)

 

$

39.9

 

 

$

40.2

 

 

(1

)%

 

$

125.3

 

 

$

103.2

 

 

21

%

Adjusted net income per diluted share(1)

 

$

0.61

 

 

$

0.72

 

 

(15

)%

 

$

1.92

 

 

$

1.88

 

 

2

%

n/m - not meaningful

“During the third quarter and first nine months of 2021, Envestnet delivered strong financial results,” said Bill Crager, Chief Executive Officer.

“Our commitment to our vision and strategy continues and we are executing in all areas of our business. Our team is leaned into our mission and the work we are doing to establish Envestnet as the ecosystem that connects data, technology, and solutions to enable The Intelligent Financial Life,” concluded Mr. Crager.

Financial Results for the Third Quarter of 2021

Asset-based recurring revenues increased 34% from the third quarter of 2020, and represented 61% of total revenues for the third quarter of 2021 compared to 55% for the third quarter of 2020. Subscription-based recurring revenues increased 5% from the third quarter of 2020, and represented 37% of total revenues for the third quarter of 2021, compared to 43% for the third quarter of 2020. Professional services and other non-recurring revenues decreased 21% from the prior year period. Total revenues increased 20% to $303.1 million for the third quarter of 2021 from $252.6 million for the third quarter of 2020.

Total operating expenses for the third quarter of 2021 increased 20% to $288.9 million from $240.9 million in the prior year period. Cost of revenues increased 40% to $109.8 million for the third quarter of 2021 from $78.5 million for the prior year period. Compensation and benefits increased 16% to $109.8 million for the third quarter of 2021 from $94.4 million for the prior year period. Compensation and benefits were 36% of total revenues for the third quarter of 2021, compared to 37% for the prior year period. General and administration expenses increased 1% to $39.4 million for the third quarter of 2021 from $39.0 million for the prior year period. General and administration expenses were 13% of total revenues for the third quarter of 2021, compared to 15% for the prior year period.

Income from operations was $14.1 million for the third quarter of 2021 compared to $11.7 million for the third quarter of 2020. Net income was $11.4 million for the third quarter of 2021 compared to net income of $2.3 million for the third quarter of 2020. Net income per diluted share attributable to Envestnet, Inc. was $0.21 for the third quarter of 2021 compared to net income per diluted share attributable to Envestnet, Inc. of $0.03 for the third quarter of 2020.

Adjusted revenues(1) for the third quarter of 2021 increased 20% to $303.1 million from $252.7 million for the prior year period. Adjusted EBITDA(1) for the third quarter of 2021 decreased 2% to $66.2 million from $67.6 million for the prior year period. Adjusted net income(1) decreased 1% for the third quarter of 2021 to $39.9 million from $40.2 million for the prior year period. Adjusted net income per diluted share(1) for the third quarter of 2021 decreased 15% to $0.61 from $0.72 in the third quarter of 2020.

Balance Sheet and Liquidity

As of September 30, 2021, Envestnet had $393.8 million in cash and cash equivalents and $862.5 million in outstanding debt. The outstanding debt as of September 30, 2021 included $345 million in convertible notes maturing in 2023 and $517.5 million in convertible notes maturing in 2025. The Company's $500 million revolving credit facility was undrawn as of September 30, 2021.

Outlook

Envestnet provided the following outlook for the fourth quarter and full year ending December 31, 2021. This outlook is based on the market value of assets as of September 30, 2021. We caution that we cannot predict the market value of our assets on any future date. See “Cautionary Statement Regarding Forward-Looking Statements.”

In Millions Except Adjusted EPS

 

4Q 2021

 

FY 2021

GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Asset-based

 

$

188.5

 

 

-

 

$

189.5

 

 

 

 

 

 

 

Subscription-based

 

116.5

 

 

-

 

117.0

 

 

 

 

 

 

 

Total recurring revenues

 

$

305.0

 

 

-

 

$

306.5

 

 

 

 

 

 

 

Professional services and other revenues

 

5.0

 

 

-

 

5.5

 

 

 

 

 

 

 

Total revenues

 

$

310.0

 

 

-

 

$

312.0

 

 

$

1,177.0

 

 

-

 

$

1,179.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-based cost of revenues

 

$

105.5

 

 

-

 

$

106.0

 

 

 

 

 

 

 

Total cost of revenues

 

$

113.6

 

 

-

 

$

114.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

(a)

 

-

 

(a)

 

(a)

 

-

 

(a)

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted shares outstanding

 

 

 

65.3

 

 

 

 

 

65.2

 

 

Net income per diluted share

 

(a)

 

-

 

(a)

 

(a)

 

-

 

(a)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenues (1):

 

 

 

 

 

 

 

 

 

 

 

 

Asset-based

 

$

188.5

 

 

-

 

$

189.5

 

 

 

 

 

 

 

Subscription-based

 

116.5

 

 

-

 

117.0

 

 

 

 

 

 

 

Total recurring revenues

 

$

305.0

 

 

-

 

$

306.5

 

 

 

 

 

 

 

Professional services and other revenues

 

5.0

 

 

-

 

5.5

 

 

 

 

 

 

 

Total revenues

 

$

310.0

 

 

-

 

$

312.0

 

 

$

1,177.0

 

 

-

 

$

1,179.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA(1)

 

$

54.0

 

 

-

 

$

55.0

 

 

$

259.5

 

 

-

 

$

260.5

 

Adjusted net income per diluted share(1)

 

 

 

$0.49

 

 

 

 

 

$2.41

 

 

(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 third quarter 2021 financial results today at 5:00 p.m. ET. The live webcast and accompanying presentation can be accessed from Envestnet’s investor relations website at http://investor.envestnet.com/. A replay of the webcast will be available on the investor relations website following the call.

About Envestnet

Envestnet, Inc. (NYSE: ENV) is transforming the way financial advice and wellness are delivered. Our mission is to empower advisors and financial service providers with innovative technology, solutions and intelligence to make financial wellness a reality for everyone. Approximately 108,000 advisors and more than 6,000 companies including: 17 of the 20 largest U.S. banks, 47 of the 50 largest wealth management and brokerage firms, over 500 of the largest RIAs and hundreds of FinTech companies, leverage Envestnet technology and services that help drive better outcomes for enterprises, advisors and their clients.

For more information on Envestnet, please visit www.envestnet.com and follow us on Twitter @ENVintel.

____________________

(1) Non-GAAP Financial Measures

“Adjusted revenues” excludes the effect of purchase accounting on the fair value of acquired deferred revenue. Under GAAP, we record at fair value the acquired deferred revenue for contracts in effect at the time the entities were acquired. Consequently, revenue related to acquired entities for periods subsequent to the acquisition does not reflect the full amount of revenue that would have been recorded by these entities had they remained stand-alone entities. Adjusted revenues has limitations as a financial measure, should be considered as supplemental in nature and is not meant as a substitute for revenue prepared in accordance with GAAP.

“Adjusted EBITDA” represents net income (loss) before deferred revenue fair value adjustment, interest income, interest expense, accretion on contingent consideration and purchase liability, income tax provision (benefit), depreciation and amortization, non-cash compensation expense, restructuring charges and transaction costs, severance, fair market value adjustment on contingent consideration liability, non-recurring litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, non-recurring gain, gain on settlement of liability, gain on insurance reimbursement, fair market value adjustment to investment in private company, loss allocation from equity method investments and income attributable to non-controlling interest.

“Adjusted net income” represents net income before deferred revenue fair value adjustment, accretion on contingent consideration and purchase liability, non-cash interest expense, cash interest on our convertible notes (subsequent to the adoption of ASU 2020-06 on January 1, 2021), non-cash compensation expense, restructuring charges and transaction costs, severance, fair market value adjustment on contingent consideration liability, amortization of acquired intangibles, non-recurring litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, non-recurring gain, gain on settlement of liability, gain on insurance reimbursement, fair market value adjustment to investment in private company, loss allocation from equity method investments and income attributable to non-controlling interest. Reconciling items are presented gross of tax, and a normalized tax rate is applied to the total of all reconciling items to arrive at adjusted net income. The normalized tax rate is based solely on the estimated blended statutory income tax rates in the jurisdictions in which we operate. We monitor the normalized tax rate based on events or trends that could materially impact the rate, including tax legislation changes and changes in the geographic mix of our operations.

“Adjusted net income per diluted share” represents adjusted net income attributable to common stockholders divided by the diluted number of weighted-average shares outstanding. Beginning January 1, 2021, the dilutive effect of our Convertible Notes are calculated using the if-converted method in accordance with the adoption of ASU 2020-06. As a result, 9.9 million potential shares to be issued in connection with our Convertible Notes are considered to be dilutive for purposes of the adjusted net income per share calculation beginning January 1, 2021.

See reconciliations of Non-GAAP Financial Measures on pages 9-15 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 or net income per share determined in accordance with GAAP.

Cautionary Statement Regarding Forward-Looking Statements

The forward-looking statements made in this press release and its attachments concerning, among other things, Envestnet, Inc.’s expected financial performance and outlook for the fourth quarter and full year of 2021, its strategic operational plans and growth strategy are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and the Company’s actual results could differ materially from the results expressed or implied by such forward-looking statements. Furthermore, reported results should not be considered as an indication of future performance. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release include, but are not limited to, a pandemic or health crisis, including the COVID-19 pandemic, and its impact on financial institutions, the global economy or capital markets, as well as our products, clients, vendors and employees, and our results of operations, the full extent of which is currently unknown; changes and volatility in financial and capital markets, which could result in changes in demand for our products or services or in the value of assets on which we earn revenue; the possibility that the anticipated benefits of any of our acquisitions will not be realized to the extent or when expected, difficulty in sustaining rapid revenue growth, which may place significant demands on our administrative, operational and financial resources, the concentration of nearly all of our revenues from the delivery of our solutions and services to clients in the financial services industry, our reliance on a limited number of clients for a material portion of our revenues, the renegotiation of fee percentages or termination of our services by our clients, our ability to identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies, the impact of market and economic conditions on revenues, our inability to successfully execute the conversion of clients’ assets from their technology platform to our technology platforms in a timely and accurate manner, our ability to expand our relationships with existing customers, grow the number of customers and derive revenue from new offerings such as our data analytics solutions and market research services and premium financial applications, compliance failures, adverse judicial or regulatory proceedings against us, liabilities associated with potential, perceived or actual breaches of fiduciary duties and/or conflicts of interest, changes in laws and regulations, including tax laws and regulations, general economic conditions, political and regulatory conditions, the impact of fluctuations in market condition and interest rates on the demand for our products and services and the value of assets under management or administration, the impact of market conditions on our ability to issue debt and equity, the impact of fluctuations in interest rates on our cost of borrowing, our financial performance, the results of our investments in research and development, our data center and other infrastructure, our ability to maintain the security and integrity of our systems and facilities and to maintain the privacy of personal information, failure of our systems to work properly, our ability to realize operating efficiencies, the advantages of our solutions as compared to those of others, the failure to protect our intellectual property rights, our ability to establish and maintain intellectual property rights, our ability to retain and hire necessary employees and appropriately staff our operations and management’s response to these factors. More information regarding these and other risks, uncertainties and factors is contained in our filings with the Securities and Exchange Commission (“SEC”) which are available on the SEC’s website at www.sec.gov or our Investor Relations website at http://investor.envestnet.com/. You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this press release. All information in this press release and its attachments is as of November 8, 2021 and, unless required by law, we undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to report the occurrence of unanticipated events.

 

Envestnet, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

September 30,

 

December 31,

 

 

2021

 

2020

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

393,799

 

 

$

384,565

 

Fees receivable, net

 

116,137

 

 

80,064

 

Prepaid expenses and other current assets

 

39,585

 

 

40,570

 

Total current assets

 

549,521

 

 

505,199

 

 

 

 

 

 

Property and equipment, net

 

48,158

 

 

47,969

 

Internally developed software, net

 

125,590

 

 

96,501

 

Intangible assets, net

 

417,644

 

 

435,041

 

Goodwill

 

924,504

 

 

906,773

 

Operating lease right-of-use-assets, net

 

93,204

 

 

105,249

 

Other non-current assets

 

58,724

 

 

47,558

 

Total assets

 

$

2,217,345

 

 

$

2,144,290

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accrued expenses and other liabilities

 

$

200,206

 

 

$

158,548

 

Accounts payable

 

21,763

 

 

18,003

 

Operating lease liabilities

 

12,021

 

 

13,649

 

Contingent consideration

 

806

 

 

11,251

 

Deferred revenue

 

34,609

 

 

34,918

 

Total current liabilities

 

269,405

 

 

236,369

 

 

 

 

 

 

Long-term debt

 

847,633

 

 

756,503

 

Non-current operating lease liabilities

 

107,852

 

 

112,182

 

Deferred tax liabilities, net

 

27,754

 

 

34,740

 

Other non-current liabilities

 

17,626

 

 

28,678

 

Total liabilities

 

1,270,270

 

 

1,168,472

 

 

 

 

 

 

Equity:

 

 

 

 

Total stockholders’ equity

 

944,435

 

 

976,337

 

Non-controlling interest

 

2,640

 

 

(519

)

Total liabilities and equity

 

$

2,217,345

 

 

$

2,144,290

 

 

Envestnet, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share information)

(unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2021

 

2020

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

 

Asset-based

 

$

184,008

 

 

$

137,744

 

 

$

513,458

 

 

$

394,801

 

Subscription-based

 

113,572

 

 

107,897

 

 

335,905

 

 

317,427

 

Total recurring revenues

 

297,580

 

 

245,641

 

 

849,363

 

 

712,228

 

Professional services and other revenues

 

5,473

 

 

6,918

 

 

17,533

 

 

22,183

 

Total revenues

 

303,053

 

 

252,559

 

 

866,896

 

 

734,411

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenues

 

109,836

 

 

78,545

 

 

303,199

 

 

222,327

 

Compensation and benefits

 

109,839

 

 

94,428

 

 

316,101

 

 

300,423

 

General and administration

 

39,393

 

 

38,979

 

 

117,463

 

 

118,537

 

Depreciation and amortization

 

29,850

 

 

28,951

 

 

88,252

 

 

85,077

 

Total operating expenses

 

288,918

 

 

240,903

 

 

825,015

 

 

726,364

 

 

 

 

 

 

 

 

 

 

Income from operations

 

14,135

 

 

11,656

 

 

41,881

 

 

8,047

 

Other expense, net

 

(3,551

)

 

(8,836

)

 

(14,803

)

 

(18,546

)

Income (loss) before income tax provision (benefit)

 

10,584

 

 

2,820

 

 

27,078

 

 

(10,499

)

 

 

 

 

 

 

 

 

 

Income tax provision (benefit)

 

(854

)

 

497

 

 

9,074

 

 

(161

)

 

 

 

 

 

 

 

 

 

Net income (loss)

 

11,438

 

 

2,323

 

 

18,004

 

 

(10,338

)

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

 

302

 

 

(413

)

 

401

 

 

(12

)

Net income (loss) attributable to Envestnet, Inc.

 

$

11,740

 

 

$

1,910

 

 

$

18,405

 

 

$

(10,350

)

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Basic

 

$

0.22

 

 

$

0.04

 

 

$

0.34

 

 

$

(0.19

)

 

 

 

 

 

 

 

 

 

Diluted

 

$

0.21

 

 

$

0.03

 

 

$

0.33

 

 

$

(0.19

)

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

54,547,858

 

 

53,800,048

 

 

54,400,247

 

 

53,464,101

 

 

 

 

 

 

 

 

 

 

Diluted

 

55,388,627

 

 

55,558,983

 

 

55,287,972

 

 

53,464,101

 

 

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Nine Months Ended

 

 

September 30,

 

 

2021

 

2020

OPERATING ACTIVITIES:

 

 

 

 

Net income (loss)

 

$

18,004

 

 

$

(10,338

)

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

 

 

 

 

Depreciation and amortization

 

88,252

 

 

85,077

 

Provision for doubtful accounts

 

2,051

 

 

2,323

 

Deferred income taxes

 

7,078

 

 

79

 

Non-cash compensation expense

 

50,307

 

 

45,721

 

Non-cash interest expense

 

4,889

 

 

12,255

 

Accretion on contingent consideration and purchase liability

 

656

 

 

1,308

 

Payments of contingent consideration

 

(2,360

)

 

 

Fair market value adjustment to contingent consideration liability

 

(1,067

)

 

(2,056

)

Fair market value adjustment to investment in private company

 

(758

)

 

 

Gain on settlement of liability

 

(1,206

)

 

 

Gain on acquisition of equity method investment

 

 

 

(4,230

)

Loss allocation from equity method investments

 

5,553

 

 

4,280

 

Impairment of right of use assets

 

1,537

 

 

1,426

 

Other

 

249

 

 

556

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

Fees receivables, net

 

(38,030

)

 

(10,825

)

Prepaid expenses and other current assets

 

569

 

 

(11,139

)

Other non-current assets

 

4,854

 

 

(1,807

)

Accrued expenses and other liabilities

 

26,637

 

 

3,393

 

Accounts payable

 

4,122

 

 

12,084

 

Deferred revenue

 

(1,065

)

 

1,488

 

Other non-current liabilities

 

(298

)

 

2,084

 

Net cash provided by operating activities

 

169,974

 

 

131,679

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

Purchases of property and equipment

 

(15,779

)

 

(8,824

)

Capitalization of internally developed software

 

(49,024

)

 

(40,257

)

Investments in private companies

 

(8,926

)

 

(13,875

)

Acquisition of proprietary technology

 

(25,517

)

 

 

Acquisitions of businesses, net of cash acquired

 

(32,794

)

 

(20,257

)

Advance for technology solutions

 

(3,000

)

 

 

Net cash used in investing activities

 

(135,040

)

 

(83,213

)

 

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows (continued)

(in thousands)

(unaudited)

 

 

 

Nine Months Ended

 

 

September 30,

 

 

2021

 

2020

FINANCING ACTIVITIES:

 

 

 

 

Proceeds from issuance of Convertible Notes due 2025

 

 

 

517,500

 

Convertible Notes due 2025 issuance costs

 

 

 

(14,540

)

Proceeds from borrowings on revolving credit facility

 

 

 

45,000

 

Payments on revolving credit facility

 

 

 

(305,000

)

Capital contributions - non-controlling shareholders

 

3,201

 

 

 

Payments of deferred consideration on prior acquisitions

 

 

 

(1,879

)

Payments of contingent consideration

 

(9,200

)

 

 

Proceeds from exercise of stock options

 

920

 

 

8,053

 

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

 

(17,314

)

 

(16,283

)

Share repurchases

 

(2,097

)

 

 

Other

 

(666

)

 

3

 

Net cash provided by (used in) financing activities

 

(25,156

)

 

232,854

 

 

 

 

 

 

EFFECT OF EXCHANGE RATE CHANGES ON CASH

 

(544

)

 

(1,009

)

 

 

 

 

 

INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

9,234

 

 

280,311

 

 

 

 

 

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

 

384,714

 

 

82,755

 

 

 

 

 

 

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

 

$

393,948

 

 

$

363,066

 

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

 

 

September 30,

 

September 30,

 

 

2021

 

2020

Cash and cash equivalents

 

$

393,799

 

 

$

362,918

 

Restricted cash included in prepaid expenses and other current assets

 

149

 

 

 

Restricted cash included in other non-current assets

 

 

 

148

 

Total cash, cash equivalents and restricted cash

 

$

393,948

 

 

$

363,066

 

 

Reconciliation of Non-GAAP Financial Measures

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2021

 

2020

 

2021

 

2020

Total revenues

 

$

303,053

 

 

$

252,559

 

 

$

866,896

 

 

$

734,411

 

Deferred revenue fair value adjustment (a)

 

67

 

 

91

 

 

227

 

 

607

 

Adjusted revenues

 

$

303,120

 

 

$

252,650

 

 

$

867,123

 

 

$

735,018

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

11,438

 

 

$

2,323

 

 

$

18,004

 

 

$

(10,338

)

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

67

 

 

91

 

 

227

 

 

607

 

Interest income (b)

 

(202

)

 

(262

)

 

(569

)

 

(850

)

Interest expense (b)

 

4,242

 

 

8,139

 

 

12,682

 

 

21,907

 

Income tax provision (benefit)

 

(854

)

 

497

 

 

9,074

 

 

(161

)

Depreciation and amortization

 

29,850

 

 

28,951

 

 

88,252

 

 

85,077

 

Non-cash compensation expense (d)

 

18,885

 

 

15,852

 

 

50,307

 

 

43,197

 

Restructuring charges and transaction costs (f)

 

3,403

 

 

4,993

 

 

11,215

 

 

14,461

 

Severance (e)

 

207

 

 

2,715

 

 

10,498

 

 

18,566

 

Accretion on contingent consideration and purchase

liability (c)

 

81

 

 

398

 

 

656

 

 

1,308

 

Fair market value adjustment on contingent consideration liability (c)

 

(927

)

 

(74

)

 

(1,067

)

 

(2,056

)

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

 

 

 

 

 

(758

)

 

 

Non-recurring litigation and regulatory related expenses (c)

 

1,512

 

 

1,809

 

 

5,159

 

 

6,029

 

Foreign currency (b)

 

97

 

 

(37

)

 

110

 

 

(68

)

Non-recurring gain (b)

 

 

 

 

 

 

 

(4,230

)

Gain on settlement of liability (b)

 

(1,206

)

 

 

 

(1,206

)

 

 

Gain on insurance reimbursement (b)

 

(968

)

 

 

 

(968

)

 

 

Non-income tax expense adjustment (c)

 

(831

)

 

1,795

 

 

(1,102

)

 

1,341

 

Loss allocation from equity method investments (b)

 

1,508

 

 

994

 

 

5,553

 

 

4,280

 

Income attributable to non-controlling interest

 

(114

)

 

(603

)

 

(554

)

 

(1,103

)

Adjusted EBITDA

 

$

66,188

 

 

$

67,581

 

 

$

205,513

 

 

$

177,967

 

(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) 

All of 2021 included in compensation and benefits in the condensed consolidated statements of operations. For the three months ended September 30, 2020, $15,852 was included in compensation and benefits in the condensed consolidated statements of operations. For the nine months ended September 30, 2020, $45,721 was included in compensation and benefits and a fair value adjustment of $(2,524) was included in other expense, net, in the condensed consolidated statements of operations.

(e) 

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

(f) 

For the three months ended September 30, 2021 and 2020, $1,548 and $3,992 were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the three months ended September 30, 2021 and 2020, $1,855 and $969 were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. For the three months ended September 30, 2021 and 2020, $0 and $32 were included within other expense, net, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2021 and 2020, $6,037 and $11,485 were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2021 and 2020, $5,178 and $2,764 were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2021 and 2020, $0 and $212 were included within other expense, net, 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

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2021

 

2020

 

2021

 

2020

Net income (loss)

 

$

11,438

 

 

$

2,323

 

 

$

18,004

 

 

$

(10,338

)

Income tax provision (benefit) (a)

 

(854

)

 

497

 

 

9,074

 

 

(161

)

Income (loss) before income tax provision (benefit)

 

10,584

 

 

2,820

 

 

27,078

 

 

(10,499

)

Add (deduct):

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (b)

 

67

 

 

91

 

 

227

 

 

607

 

Non-cash interest expense (d)

 

1,443

 

 

4,738

 

 

4,295

 

 

10,682

 

Cash interest - Convertible Notes (d)

 

2,479

 

 

 

 

7,439

 

 

 

Non-cash compensation expense (e)

 

18,885

 

 

15,852

 

 

50,307

 

 

43,197

 

Restructuring charges and transaction costs (h)

 

3,403

 

 

4,993

 

 

11,215

 

 

14,461

 

Severance (f)

 

207

 

 

2,715

 

 

10,498

 

 

18,566

 

Accretion on contingent consideration and purchase

liability (c)

 

81

 

 

398

 

 

656

 

 

1,308

 

Fair market value adjustment on contingent consideration liability (c)

 

(927

)

 

(74

)

 

(1,067

)

 

(2,056

)

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

 

 

 

 

 

(758

)

 

 

Amortization of acquired intangibles (g)

 

17,390

 

 

18,510

 

 

51,370

 

 

56,014

 

Non-recurring litigation and regulatory related expenses (c)

 

1,512

 

 

1,809

 

 

5,159

 

 

6,029

 

Foreign currency (d)

 

97

 

 

(37

)

 

110

 

 

(68

)

Non-recurring gain (d)

 

 

 

 

 

 

 

(4,230

)

Gain on settlement of liability (d)

 

(1,206

)

 

 

 

(1,206

)

 

 

Gain on insurance reimbursement (d)

 

(968

)

 

 

 

(968

)

 

 

Non-income tax expense adjustment (c)

 

(831

)

 

1,795

 

 

(1,102

)

 

1,341

 

Loss allocation from equity method investments (d)

 

1,508

 

 

994

 

 

5,553

 

 

4,280

 

Income attributable to non-controlling interest

 

(114

)

 

(603

)

 

(554

)

 

(1,103

)

Adjusted net income before income tax effect

 

53,610

 

 

54,001

 

 

168,252

 

 

138,529

 

Income tax effect (i)

 

(13,670

)

 

(13,772

)

 

(42,904

)

 

(35,325

)

Adjusted net income

 

$

39,940

 

 

$

40,229

 

 

$

125,348

 

 

$

103,204

 

 

 

 

 

 

 

 

 

 

Basic number of weighted-average shares outstanding

 

54,547,858

 

 

53,800,048

 

 

54,400,247

 

 

53,464,101

 

Effect of dilutive shares:

 

 

 

 

 

 

 

 

Options to purchase common stock

 

201,103

 

 

331,728

 

 

207,281

 

 

458,232

 

Unvested restricted stock units

 

570,515

 

 

610,442

 

 

614,005

 

 

548,858

 

Convertible notes

 

9,898,549

 

 

730,267

 

 

9,898,549

 

 

280,375

 

Warrants

 

69,151

 

 

86,498

 

 

66,439

 

 

46,562

 

Diluted number of weighted-average shares outstanding

 

65,287,176

 

 

55,558,983

 

 

65,186,521

 

 

54,798,128

 

 

 

 

 

 

 

 

 

 

Adjusted net income per share - diluted

 

$

0.61

 

 

$

0.72

 

 

$

1.92

 

 

$

1.88

 

(a) 

For the three months ended September 30, 2021 and 2020, the effective tax rate computed in accordance with GAAP equaled (8.1)% and 17.6%, respectively. For the nine months ended September 30, 2021 and 2020, the effective tax rate computed in accordance with GAAP equaled 33.5% and 1.5%, 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) 

All of 2021 included in compensation and benefits in the condensed consolidated statements of operations. For the three months ended September 30, 2020, $15,852 was included in compensation and benefits in the condensed consolidated statements of operations. For the nine months ended September 30, 2020, $45,721 was included in compensation and benefits and a fair value adjustment of $(2,524) was included in other expense, net, in the condensed consolidated statements of operations.

(f) 

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

(g) 

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

(h) 

For the three months ended September 30, 2021 and 2020, $1,548 and $3,992 were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the three months ended September 30, 2021 and 2020, $1,855 and $969 were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. For the three months ended September 30, 2021 and 2020, $0 and $32 were included within other expense, net, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2021 and 2020, $6,037 and $11,485 were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2021 and 2020, $5,178 and $2,764 were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2021 and 2020, $0 and $212 were included within other expense, net, respectively, in the condensed consolidated statements of operations.

(i) 

An estimated normalized effective tax rate of 25.5% have been used to compute adjusted net income for the three and nine months ended September 30, 2021 and 2020.

 

Reconciliation of Non-GAAP Financial Measures

Segment Information

(in thousands)

(unaudited)

 

 

 

Three months ended September 30, 2021

 

 

Envestnet

Wealth Solutions

 

Envestnet Data

& Analytics

 

Nonsegment

 

Total

Total Revenues

 

$

254,734

 

 

$

48,319

 

 

$

 

 

$

303,053

 

Deferred revenue fair value adjustment (a)

 

67

 

 

 

 

 

 

67

 

Adjusted revenues

 

$

254,801

 

 

$

48,319

 

 

$

 

 

$

303,120

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Asset-based

 

$

184,008

 

 

$

 

 

$

 

 

$

184,008

 

Subscription-based

 

66,988

 

 

46,584

 

 

 

 

113,572

 

Total recurring revenues

 

250,996

 

 

46,584

 

 

 

 

297,580

 

Professional services and other revenues

 

3,738

 

 

1,735

 

 

 

 

5,473

 

Total revenues

 

254,734

 

 

48,319

 

 

 

 

303,053

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Asset-based

 

102,298

 

 

 

 

 

 

102,298

 

Subscription-based

 

1,271

 

 

6,084

 

 

 

 

7,355

 

Professional services and other

 

173

 

 

10

 

 

 

 

183

 

Total cost of revenues

 

103,742

 

 

6,094

 

 

 

 

109,836

 

Compensation and benefits

 

67,592

 

 

26,468

 

 

15,779

 

 

109,839

 

General and administration

 

26,086

 

 

7,570

 

 

5,737

 

 

39,393

 

Depreciation and amortization

 

22,928

 

 

6,922

 

 

 

 

29,850

 

Total operating expenses

 

$

220,348

 

 

$

47,054

 

 

$

21,516

 

 

$

288,918

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

34,386

 

 

$

1,265

 

 

$

(21,516

)

 

$

14,135

 

Add:

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

67

 

 

 

 

 

 

67

 

Depreciation and amortization

 

22,928

 

 

6,922

 

 

 

 

29,850

 

Non-cash compensation expense (c)

 

9,661

 

 

3,667

 

 

5,557

 

 

18,885

 

Restructuring charges and transaction costs (d)

 

2,863

 

 

(55

)

 

595

 

 

3,403

 

Severance (c)

 

(49

)

 

227

 

 

29

 

 

207

 

Accretion on contingent consideration and purchase liability (b)

 

62

 

 

19

 

 

 

 

81

 

Fair market value adjustment on contingent consideration liability (b)

 

 

 

(927

)

 

 

 

(927

)

Non-recurring litigation and regulatory related expenses (b)

 

 

 

1,512

 

 

 

 

1,512

 

Non-income tax expense adjustment (b)

 

(905

)

 

74

 

 

 

 

(831

)

Income attributable to non-controlling interest

 

(114

)

 

 

 

 

 

(114

)

Other

 

(63

)

 

(9

)

 

(8

)

 

(80

)

Adjusted EBITDA

 

$

68,836

 

 

$

12,695

 

 

$

(15,343

)

 

$

66,188

 

(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 September 30, 2021, $1,548 was included within general and administration expenses and $1,855 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)

 

 

 

Nine months ended September 30, 2021

 

 

Envestnet

Wealth Solutions

 

Envestnet Data

& Analytics

 

Nonsegment

 

Total

Total Revenues

 

$

721,441

 

 

$

145,455

 

 

$

 

 

$

866,896

 

Deferred revenue fair value adjustment (a)

 

227

 

 

 

 

 

 

227

 

Adjusted revenues

 

$

721,668

 

 

$

145,455

 

 

$

 

 

$

867,123

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Asset-based

 

$

513,458

 

 

$

 

 

$

 

 

$

513,458

 

Subscription-based

 

197,663

 

 

138,242

 

 

 

 

335,905

 

Total recurring revenues

 

711,121

 

 

138,242

 

 

 

 

849,363

 

Professional services and other revenues

 

10,320

 

 

7,213

 

 

 

 

17,533

 

Total revenues

 

721,441

 

 

145,455

 

 

 

 

866,896

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Asset-based

 

281,829

 

 

 

 

 

 

281,829

 

Subscription-based

 

3,778

 

 

17,208

 

 

 

 

20,986

 

Professional services and other

 

280

 

 

104

 

 

 

 

384

 

Total cost of revenues

 

285,887

 

 

17,312

 

 

 

 

303,199

 

Compensation and benefits

 

195,560

 

 

77,765

 

 

42,776

 

 

316,101

 

General and administration

 

71,669

 

 

25,513

 

 

20,281

 

 

117,463

 

Depreciation and amortization

 

67,283

 

 

20,969

 

 

 

 

88,252

 

Total operating expenses

 

$

620,399

 

 

$

141,559

 

 

$

63,057

 

 

$

825,015

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

101,042

 

 

$

3,896

 

 

$

(63,057

)

 

$

41,881

 

Add:

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

227

 

 

 

 

 

 

227

 

Depreciation and amortization

 

67,283

 

 

20,969

 

 

 

 

88,252

 

Non-cash compensation expense (c)

 

27,080

 

 

9,691

 

 

13,536

 

 

50,307

 

Restructuring charges and transaction costs (d)

 

8,049

 

 

119

 

 

3,047

 

 

11,215

 

Severance (c)

 

4,134

 

 

3,634

 

 

2,730

 

 

10,498

 

Accretion on contingent consideration and purchase liability (b)

 

572

 

 

84

 

 

 

 

656

 

Fair market value adjustment on contingent consideration liability (b)

 

 

 

(1,067

)

 

 

 

(1,067

)

Non-recurring litigation and regulatory related expenses (b)

 

 

 

5,159

 

 

 

 

5,159

 

Non-income tax expense adjustment (b)

 

(1,335

)

 

233

 

 

 

 

(1,102

)

Income attributable to non-controlling interest

 

(554

)

 

 

 

 

 

(554

)

Other

 

41

 

 

 

 

 

 

41

 

Adjusted EBITDA

 

$

206,539

 

 

$

42,718

 

 

$

(43,744

)

 

$

205,513

 

(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 nine months ended September 30, 2021, $6,037 was included within general and administration expenses and $5,178 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 September 30, 2020

 

 

Envestnet

Wealth Solutions

 

Envestnet Data

& Analytics

 

Nonsegment

 

Total

Revenues

 

$

204,294

 

 

$

48,265

 

 

$

 

 

$

252,559

 

Deferred revenue fair value adjustment (a)

 

91

 

 

 

 

 

 

91

 

Adjusted revenues

 

$

204,385

 

 

$

48,265

 

 

$

 

 

$

252,650

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Asset-based

 

$

137,744

 

 

$

 

 

$

 

 

$

137,744

 

Subscription-based

 

62,783

 

 

45,114

 

 

 

 

107,897

 

Total recurring revenues

 

200,527

 

 

45,114

 

 

 

 

245,641

 

Professional services and other revenues

 

3,767

 

 

3,151

 

 

 

 

6,918

 

Total revenues

 

204,294

 

 

48,265

 

 

 

 

252,559

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Asset-based

 

71,133

 

 

 

 

 

 

71,133

 

Subscription-based

 

1,272

 

 

6,019

 

 

 

 

7,291

 

Professional services and other

 

30

 

 

91

 

 

 

 

121

 

Total cost of revenues

 

72,435

 

 

6,110

 

 

 

 

78,545

 

Compensation and benefits

 

59,522

 

 

26,540

 

 

8,366

 

 

94,428

 

General and administration

 

22,248

 

 

8,308

 

 

8,423

 

 

38,979

 

Depreciation and amortization

 

20,406

 

 

8,545

 

 

 

 

28,951

 

Total operating expenses

 

$

174,611

 

 

$

49,503

 

 

$

16,789

 

 

$

240,903

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

29,683

 

 

$

(1,238

)

 

$

(16,789

)

 

$

11,656

 

Add:

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

91

 

 

 

 

 

 

91

 

Depreciation and amortization

 

20,406

 

 

8,545

 

 

 

 

28,951

 

Non-cash compensation expense (c)

 

8,685

 

 

4,458

 

 

2,709

 

 

15,852

 

Restructuring charges and transaction costs (d)

 

944

 

 

33

 

 

4,016

 

 

4,993

 

Severance (c)

 

2,154

 

 

495

 

 

66

 

 

2,715

 

Accretion on contingent consideration and purchase liability (b)

 

341

 

 

57

 

 

 

 

398

 

Fair market value adjustment on contingent consideration liability (b)

 

 

 

(74

)

 

 

 

(74

)

Non-recurring litigation and regulatory related expenses (b)

 

 

 

1,809

 

 

 

 

1,809

 

Non-income tax expense adjustment (b)

 

1,860

 

 

(65

)

 

 

 

1,795

 

Income attributable to non-controlling interest

 

(603

)

 

 

 

 

 

(603

)

Other

 

(2

)

 

 

 

 

 

(2

)

Adjusted EBITDA

 

$

63,559

 

 

$

14,020

 

 

$

(9,998

)

 

$

67,581

 

(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 September 30, 2020, $3,992 was included within general and administration expenses, $969 was included within compensation and benefits and $32 was included within other expense, net, in the condensed consolidated statements of operations.

 

Reconciliation of Non-GAAP Financial Measures

Segment Information (continued)

(in thousands)

(unaudited)

 

 

 

Nine Months Ended September 30, 2020

 

 

Envestnet

Wealth Solutions

 

Envestnet Data

& Analytics

 

Nonsegment

 

Total

Revenues

 

$

590,399

 

 

$

144,012

 

 

$

 

 

$

734,411

 

Deferred revenue fair value adjustment (a)

 

607

 

 

 

 

 

 

607

 

Adjusted revenues

 

$

591,006

 

 

$

144,012

 

 

$

 

 

$

735,018

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Asset-based

 

$

394,801

 

 

$

 

 

$

 

 

$

394,801

 

Subscription-based

 

184,516

 

 

132,911

 

 

 

 

317,427

 

Total recurring revenues

 

579,317

 

 

132,911

 

 

 

 

712,228

 

Professional services and other revenues

 

11,082

 

 

11,101

 

 

 

 

22,183

 

Total revenues

 

590,399

 

 

144,012

 

 

 

 

734,411

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Asset-based

 

201,600

 

 

 

 

 

 

201,600

 

Subscription-based

 

3,691

 

 

16,684

 

 

 

 

20,375

 

Professional services and other

 

47

 

 

305

 

 

 

 

352

 

Total cost of revenues

 

205,338

 

 

16,989

 

 

 

 

222,327

 

Compensation and benefits

 

194,906

 

 

82,455

 

 

23,062

 

 

300,423

 

General and administration

 

69,358

 

 

26,162

 

 

23,017

 

 

118,537

 

Depreciation and amortization

 

59,907

 

 

25,170

 

 

 

 

85,077

 

Total operating expenses

 

$

529,509

 

 

$

150,776

 

 

$

46,079

 

 

$

726,364

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

60,890

 

 

$

(6,764

)

 

$

(46,079

)

 

$

8,047

 

Add:

 

 

 

 

 

 

 

 

Deferred revenue fair value adjustment (a)

 

607

 

 

 

 

 

 

607

 

Depreciation and amortization

 

59,907

 

 

25,170

 

 

 

 

85,077

 

Non-cash compensation expense (c)

 

27,437

 

 

11,665

 

 

6,619

 

 

45,721

 

Restructuring charges and transaction costs (d)

 

5,864

 

 

489

 

 

8,108

 

 

14,461

 

Severance (c)

 

14,593

 

 

2,587

 

 

1,386

 

 

18,566

 

Accretion on contingent consideration and purchase liability (b)

 

1,087

 

 

221

 

 

 

 

1,308

 

Fair market value adjustment on contingent consideration liability (b)

 

 

 

(2,056

)

 

 

 

(2,056

)

Non-recurring litigation and regulatory related expenses (b)

 

 

 

6,029

 

 

 

 

6,029

 

Non-income tax expense adjustment (b)

 

1,532

 

 

(191

)

 

 

 

1,341

 

Income attributable to non-controlling interest

 

(1,103

)

 

 

 

 

 

(1,103

)

Other

 

(31

)

 

 

 

 

 

(31

)

Adjusted EBITDA

 

$

170,783

 

 

$

37,150

 

 

$

(29,966

)

 

$

177,967

 

(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 nine months ended September 30, 2020, $11,485 was included within general and administration expenses, $2,764 was included within compensation and benefits and $212 was included within other expense, net, in the condensed consolidated statements of operations.

 

Envestnet, Inc.

Historical Assets, Accounts and Advisors

(in millions, except accounts and advisors)

(unaudited)

 

 

 

As of

 

 

September 30,

 

December 31,

 

March 31,

 

June 30,

 

September 30,

 

 

2020

 

2020

 

2021

 

2021

 

2021

 

 

(in millions, except accounts and advisors data)

Platform Assets

 

 

 

 

 

 

 

 

 

 

Assets under Management (“AUM”)

 

$

228,905

 

 

$

263,043

 

 

$

286,039

 

 

$

315,422

 

 

$

327,279

 

Assets under Administration (“AUA”)

 

375,860

 

 

405,365

 

 

408,858

 

 

426,416

 

 

431,040

 

Total AUM/A

 

604,765

 

 

668,408

 

 

694,897

 

 

741,838

 

 

758,319

 

Subscription

 

3,498,353

 

 

3,892,814

 

 

4,132,917

 

 

4,447,733

 

 

4,670,827

 

Total Platform Assets

 

$

4,103,118

 

 

$

4,561,222

 

 

$

4,827,814

 

 

$

5,189,571

 

 

$

5,429,146

 

Platform Accounts

 

 

 

 

 

 

 

 

 

 

AUM

 

1,018,817

 

 

1,073,122

 

 

1,138,183

 

 

1,209,761

 

 

1,276,066

 

AUA

 

1,318,730

 

 

1,276,975

 

 

1,192,668

 

 

1,163,991

 

 

1,193,069

 

Total AUM/A

 

2,337,547

 

 

2,350,097

 

 

2,330,851

 

 

2,373,752

 

 

2,469,135

 

Subscription

 

10,639,399

 

 

11,079,048

 

 

11,453,434

 

 

11,712,573

 

 

14,810,664

 

Total Platform Accounts

 

12,976,946

 

 

13,429,145

 

 

13,784,285

 

 

14,086,325

 

 

17,279,799

 

Advisors

 

 

 

 

 

 

 

 

 

 

AUM/A

 

41,450

 

 

41,206

 

 

41,177

 

 

41,259

 

 

41,696

 

Subscription

 

63,862

 

 

65,104

 

 

65,724

 

 

66,597

 

 

66,489

 

Total Advisors

 

105,312

 

 

106,310

 

 

106,901

 

 

107,856

 

 

108,185

 

The following table summarizes the changes in AUM and AUA for the three months ended September 30, 2021:

 

 

6/30/2021

 

Gross

Sales

 

Redemptions

 

Net

Flows

 

Market Impact

 

9/30/2021

 

 

(in millions, except account data)

AUM

 

$

315,422

 

 

$

27,197

 

 

$

(12,703

)

 

$

14,494

 

 

$

(2,637

)

 

$

327,279

 

AUA

 

426,416

 

 

32,375

 

 

(22,274

)

 

10,101

 

 

(5,477

)

 

431,040

 

Total AUM/A

 

$

741,838

 

 

$

59,572

 

 

$

(34,977

)

 

$

24,595

 

 

$

(8,114

)

 

$

758,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee-Based Accounts

 

2,373,752

 

 

 

 

 

 

95,383

 

 

 

 

2,469,135

 

The above AUM/A gross sales figures include $6.1 billion in new client conversions. The Company onboarded an additional $149.5 billion in subscription conversions during the three months ended September 30, 2021, bringing total conversions for the quarter to $155.6 billion.

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