BERWYN, Pa.--(BUSINESS WIRE)--Envestnet (NYSE: ENV), a leading provider of intelligent systems for wealth management and financial wellness, today reported financial results for the three and six months ended June 30, 2022.
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Three months ended |
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Six months ended |
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Key Financial Metrics |
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June 30, |
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% |
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June 30, |
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% |
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(in millions, except per share data) |
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2022 |
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2021 |
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Change |
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2022 |
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2021 |
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Change |
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GAAP: |
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Total revenues |
|
$ |
318.9 |
|
|
$ |
288.7 |
|
|
10 |
% |
|
$ |
640.2 |
|
|
$ |
563.8 |
|
14 |
% |
Net income (loss) |
|
$ |
(24.3 |
) |
|
$ |
(8.4 |
) |
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n/m |
|
|
$ |
(39.0 |
) |
|
$ |
6.6 |
|
n/m |
|
Net income (loss) per diluted share attributable to Envestnet, Inc. |
|
$ |
(0.42 |
) |
|
$ |
(0.15 |
) |
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n/m |
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$ |
(0.67 |
) |
|
$ |
0.12 |
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n/m |
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Non-GAAP: |
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Adjusted revenues(1) |
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$ |
318.9 |
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$ |
288.8 |
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10 |
% |
|
$ |
640.3 |
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$ |
564.0 |
|
14 |
% |
Adjusted EBITDA(1) |
|
$ |
57.1 |
|
|
$ |
71.1 |
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|
(20 |
)% |
|
$ |
112.8 |
|
|
$ |
139.3 |
|
(19 |
)% |
Adjusted net income(1) |
|
$ |
32.0 |
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$ |
43.5 |
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|
(26 |
)% |
|
$ |
63.0 |
|
|
$ |
85.4 |
|
(26 |
)% |
Adjusted net income per diluted share(1) |
|
$ |
0.49 |
|
|
$ |
0.67 |
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|
(27 |
)% |
|
$ |
0.96 |
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|
$ |
1.31 |
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(27 |
)% |
n/m - not meaningful |
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“We continue to execute on our strategy – aligning our organization to deliver industry leading solutions, technology and intelligence that can do more for more people – and positioning Envestnet for accelerated revenue growth in the coming years,” said Bill Crager, Co-Founder and Chief Executive Officer.
“During the second quarter, we grew revenues, we went deeper with our client base and we drove positive net flows despite the challenging market conditions,” concluded Mr. Crager.
Financial Results for the Second Quarter of 2022
Asset-based recurring revenues increased 13% from the second quarter of 2021, and represented 60% of total revenues for the second quarter of 2022 compared to 59% for the second quarter of 2021. Subscription-based recurring revenues increased 5% from the second quarter of 2021, and represented 37% of total revenues for the second quarter of 2022, compared to 39% for the second quarter of 2021. Professional services and other non-recurring revenues increased 42% from the prior year period. Total revenues increased 10% to $318.9 million for the second quarter of 2022 from $288.7 million for the second quarter of 2021.
Total operating expenses for the second quarter of 2022 increased 26% to $350.6 million from $277.8 million in the prior year period. Cost of revenues increased 26% to $126.5 million for the second quarter of 2022 from $100.5 million for the prior year period. Compensation and benefits increased 19% to $125.8 million for the second quarter of 2022 from $105.5 million for the prior year period. Compensation and benefits were 39% of total revenues for the second quarter of 2022, compared to 37% for the prior year period. General and administration expenses increased 58% to $66.1 million for the second quarter of 2022 from $41.8 million for the prior year period. General and administration expenses were 21% of total revenues for the second quarter of 2022, compared to 14% for the prior year period.
Loss from operations was $31.7 million for the second quarter of 2022 compared to income of $10.9 million for the second quarter of 2021. Net loss was $24.3 million for the second quarter of 2022 compared to net loss of $8.4 million for the second quarter of 2021. Net loss per diluted share attributable to Envestnet, Inc. was $0.42 for the second quarter of 2022 compared to net loss per diluted share attributable to Envestnet, Inc. of $0.15 for the second quarter of 2021.
Adjusted revenues(1) for the second quarter of 2022 increased 10% to $318.9 million from $288.8 million for the prior year period. Adjusted EBITDA(1) for the second quarter of 2022 decreased 20% to $57.1 million from $71.1 million for the prior year period. Adjusted net income(1) decreased 26% for the second quarter of 2022 to $32.0 million from $43.5 million for the prior year period. Adjusted net income per diluted share(1) for the second quarter of 2022 decreased 27% to $0.49 from $0.67 in the second quarter of 2021.
Balance Sheet and Liquidity
As of June 30, 2022, Envestnet had $338.1 million in cash and cash equivalents and $862.5 million in outstanding debt. The outstanding debt as of June 30, 2022 included $345 million in convertible notes maturing in 2023 and $517.5 million in convertible notes maturing in 2025. Envestnet's $500 million revolving credit facility was undrawn as of June 30, 2022.
Outlook
Envestnet provided the following outlook for the third quarter ending September 30, 2022 and full year ending December 31, 2022. This outlook is based on the market value of assets under management or administration as of June 30, 2022. We caution that we cannot predict the market value of these assets on any future date. See “Cautionary Statement Regarding Forward-Looking Statements.”
In Millions, Except Adjusted EPS |
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3Q 2022 |
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FY 2022 |
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GAAP: |
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Revenues: |
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||||
Asset-based |
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$ |
176.0 |
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- |
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$ |
177.0 |
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|
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|
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||
Subscription-based |
|
|
120.5 |
|
- |
|
|
121.0 |
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|
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Total recurring revenues |
|
$ |
296.5 |
|
- |
|
$ |
298.0 |
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|
|
|
|
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||
Professional services and other revenues |
|
|
5.0 |
|
- |
|
|
5.5 |
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|
|
|
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Total revenues |
|
$ |
301.5 |
|
- |
|
$ |
303.5 |
|
$ |
1,255.0 |
|
- |
|
$ |
1,260.0 |
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|
|
|
|
|
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||||
Asset-based cost of revenues |
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$ |
103.0 |
|
- |
|
$ |
103.5 |
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|
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||
Total cost of revenues |
|
$ |
110.5 |
|
- |
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$ |
111.0 |
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Net income |
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(a) |
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- |
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(a) |
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(a) |
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- |
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(a) |
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Diluted shares outstanding |
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65.5 |
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65.5 |
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Net income per diluted share |
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(a) |
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- |
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(a) |
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(a) |
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- |
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(a) |
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Non-GAAP: |
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Adjusted revenues (1): |
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||||
Asset-based |
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$ |
176.0 |
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- |
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$ |
177.0 |
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|
|
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|
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||
Subscription-based |
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|
120.5 |
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- |
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121.0 |
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Total recurring revenues |
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$ |
296.5 |
|
- |
|
$ |
298.0 |
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||
Professional services and other revenues |
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|
5.0 |
|
- |
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|
5.5 |
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|
|
|
|
|
||
Total revenues |
|
$ |
301.5 |
|
- |
|
$ |
303.5 |
|
$ |
1,255.0 |
|
- |
|
$ |
1,260.0 |
|
|
|
|
|
|
|
|
|
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|
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Adjusted EBITDA(1) |
|
$ |
51.0 |
|
- |
|
$ |
53.0 |
|
$ |
223.0 |
|
- |
|
$ |
227.0 |
Adjusted net income per diluted share(1) |
|
$ |
0.40 |
|
- |
|
$ |
0.42 |
|
$ |
1.84 |
|
- |
|
$ |
1.89 |
(a) Envestnet does not forecast net income and net income per diluted share due to the unpredictable nature of various items adjusted for non-GAAP disclosure purposes, including the periodic GAAP income tax provision.
Conference Call
Envestnet will host a conference call to discuss second quarter 2022 financial results today at 5:00 p.m. ET. The live webcast and accompanying presentation can be accessed from Envestnet’s investor relations website at http://investor.envestnet.com/. A replay of the webcast will be available on the investor relations website following the call.
About Envestnet
Envestnet, Inc. (NYSE: ENV) is transforming the way financial advice and wellness are delivered. Our mission is to empower advisors and financial service providers with innovative technology, solutions and intelligence to make financial wellness a reality for everyone. More than 105,000 advisors and over 6,500 companies including: 16 of the 20 largest U.S. banks, 47 of the 50 largest wealth management and brokerage firms, over 500 of the largest RIAs and hundreds of FinTech companies, leverage Envestnet technology and services that help drive better outcomes for enterprises, advisors and their clients.
For more information on Envestnet, please visit www.envestnet.com and follow us on Twitter @ENVintel.
(1) Non-GAAP Financial Measures
“Adjusted revenues” excludes the effect of purchase accounting on the fair value of acquired deferred revenue. On January 1, 2022, the Company adopted ASU 2021-08 whereby it now accounts for contract assets and contract liabilities obtained upon a business combination in accordance with ASC 606. Prior to the adoption of ASU 2021-08, we recorded at fair value the acquired deferred revenue for contracts in effect at the time the entities were acquired. Consequently, revenue related to acquired entities for periods subsequent to the acquisition did not reflect the full amount of revenue that would have been recorded by these entities had they remained stand-alone entities. Adjusted revenues has limitations as a financial measure, should be considered as supplemental in nature and is not meant as a substitute for revenue prepared in accordance with GAAP.
“Adjusted EBITDA” represents net income (loss) before deferred revenue fair value adjustment, interest income, interest expense, income tax provision (benefit), depreciation and amortization, non-cash compensation expense, restructuring charges and transaction costs, severance, accretion on contingent consideration and purchase liability, fair market value adjustment on contingent consideration liability, fair market value adjustment to investment in private company, litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, dilution gain on equity method investee share issuance, income or loss allocations from equity method investments and (income) loss attributable to non-controlling interest.
“Adjusted net income” represents net income before deferred revenue fair value adjustment, non-cash interest expense, cash interest on our convertible notes, non-cash compensation expense, restructuring charges and transaction costs, severance, accretion on contingent consideration and purchase liability, fair market value adjustment on contingent consideration liability, fair market value adjustment to investment in private company, amortization of acquired intangibles, litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, dilution gain on equity method investee share issuance, income or loss allocations from equity method investments and (income) loss attributable to non-controlling interest. Reconciling items are presented gross of tax, and a normalized tax rate is applied to the total of all reconciling items to arrive at adjusted net income. The normalized tax rate is based solely on the estimated blended statutory income tax rates in the jurisdictions in which we operate. We monitor the normalized tax rate based on events or trends that could materially impact the rate, including tax legislation changes and changes in the geographic mix of our operations.
“Adjusted net income per diluted share” represents adjusted net income attributable to common stockholders divided by the diluted number of weighted-average shares outstanding.
See reconciliations of Non-GAAP Financial Measures on pages 9-15 of this press release. Reconciliations are not provided for guidance on such measures as the Company is unable to predict the amounts to be adjusted, such as the GAAP tax provision. The Company’s Non-GAAP Financial Measures should not be viewed as a substitute for revenues, net income (loss) or net income (loss) per share determined in accordance with GAAP.
Cautionary Statement Regarding Forward-Looking Statements
The forward-looking statements made in this press release and its attachments concerning, among other things, Envestnet, Inc.’s expected financial performance and outlook for the third quarter and full year of 2022, its strategic operational plans and growth strategy are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and the Company’s actual results could differ materially from the results expressed or implied by such forward-looking statements. Furthermore, reported results should not be considered as an indication of future performance. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release include, but are not limited to, a pandemic or health crisis, including the COVID-19 pandemic; changes and volatility in financial and capital markets, including as a result of the current conflict between Russia and Ukraine, which could result in changes in demand for our products or services or in the value of assets on which we earn revenue; the possibility that the anticipated benefits of any of our acquisitions will not be realized to the extent or when expected; difficulty in sustaining rapid revenue growth, which may place significant demands on our administrative, operational and financial resources; the concentration of nearly all of our revenues from the delivery of our solutions and services to clients in the financial services industry; our reliance on a limited number of clients for a material portion of our revenues; the renegotiation of fee percentages or termination of our services by our clients; our ability to identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies; the impact of market and economic conditions on revenues; our inability to successfully execute the conversion of clients’ assets from their technology platform to our technology platforms in a timely and accurate manner; our ability to expand our relationships with existing customers, grow the number of customers and derive revenue from new offerings such as our data analytics solutions and market research services and premium financial applications; compliance failures; adverse judicial or regulatory proceedings against us; liabilities associated with potential, perceived or actual breaches of fiduciary duties and/or conflicts of interest; changes in laws and regulations, including tax laws and regulations; general economic, political and regulatory conditions; the impact of fluctuations in market conditions; and interest rates on the demand for our products and services and the value of assets under management or administration; the impact of market conditions on our ability to issue debt and equity; the impact of fluctuations in interest rates on our cost of borrowing and our financial performance; the results of our investments in research and development, our data center and other infrastructure; our ability to maintain the security and integrity of our systems and facilities and to maintain the privacy of personal information; failure of our systems to work properly; our ability to realize operating efficiencies; the advantages of our solutions as compared to those of others; the failure to protect our intellectual property rights; our ability to establish and maintain intellectual property rights; our ability to retain and hire necessary employees and appropriately staff our operations, and management’s response to these factors. More information regarding these and other risks, uncertainties and factors is contained in our filings with the Securities and Exchange Commission (“SEC”) which are available on the SEC’s website at www.sec.gov or our Investor Relations website at http://investor.envestnet.com/. You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this press release. All information in this press release and its attachments is as of August 4, 2022 and, unless required by law, we undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to report the occurrence of unanticipated events.
Envestnet, Inc.
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June 30, |
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December 31, |
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2022 |
|
2021 |
||
Assets |
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|
|
|
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Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
338,115 |
|
$ |
429,279 |
Fees receivable, net |
|
|
82,878 |
|
|
95,291 |
Prepaid expenses and other current assets |
|
|
46,627 |
|
|
42,706 |
Total current assets |
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|
467,620 |
|
|
567,276 |
|
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||
Property and equipment, net |
|
|
61,392 |
|
|
50,215 |
Internally developed software, net |
|
|
159,751 |
|
|
133,659 |
Intangible assets, net |
|
|
386,231 |
|
|
400,396 |
Goodwill |
|
|
936,054 |
|
|
925,154 |
Operating lease right-of-use-assets, net |
|
|
83,494 |
|
|
90,714 |
Other non-current assets |
|
|
92,858 |
|
|
73,768 |
Total assets |
|
$ |
2,187,400 |
|
$ |
2,241,182 |
|
|
|
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||
Liabilities and Equity |
|
|
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||
Current liabilities: |
|
|
|
|
||
Accrued expenses and other liabilities |
|
$ |
198,230 |
|
$ |
225,159 |
Accounts payable |
|
|
20,444 |
|
|
19,092 |
Operating lease liabilities |
|
|
10,852 |
|
|
10,999 |
Deferred revenue |
|
|
37,453 |
|
|
33,473 |
Current portion of long-term debt |
|
|
343,057 |
|
|
— |
Total current liabilities |
|
|
610,036 |
|
|
288,723 |
|
|
|
|
|
||
Long-term debt, net of current portion |
|
|
508,282 |
|
|
848,862 |
Non-current operating lease liabilities |
|
|
110,623 |
|
|
105,920 |
Deferred tax liabilities, net |
|
|
12,912 |
|
|
21,021 |
Other non-current liabilities |
|
|
11,555 |
|
|
17,114 |
Total liabilities |
|
|
1,253,408 |
|
|
1,281,640 |
|
|
|
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||
Equity: |
|
|
|
|
||
Total stockholders’ equity |
|
|
933,165 |
|
|
957,089 |
Non-controlling interest |
|
|
827 |
|
|
2,453 |
Total liabilities and equity |
|
$ |
2,187,400 |
|
$ |
2,241,182 |
Envestnet, Inc.
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Three Months Ended |
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Six Months Ended |
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June 30, |
|
June 30, |
||||||||||||
|
|
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2022 |
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2021 |
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|
|
2022 |
|
|
|
2021 |
|
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
$ |
191,972 |
|
|
$ |
170,075 |
|
|
$ |
394,689 |
|
|
$ |
329,450 |
|
Subscription-based |
|
|
118,120 |
|
|
|
112,504 |
|
|
|
232,854 |
|
|
|
222,333 |
|
Total recurring revenues |
|
|
310,092 |
|
|
|
282,579 |
|
|
|
627,543 |
|
|
|
551,783 |
|
Professional services and other revenues |
|
|
8,760 |
|
|
|
6,159 |
|
|
|
12,672 |
|
|
|
12,060 |
|
Total revenues |
|
|
318,852 |
|
|
|
288,738 |
|
|
|
640,215 |
|
|
|
563,843 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Cost of revenues |
|
|
126,482 |
|
|
|
100,494 |
|
|
|
251,764 |
|
|
|
193,363 |
|
Compensation and benefits |
|
|
125,767 |
|
|
|
105,548 |
|
|
|
252,616 |
|
|
|
206,262 |
|
General and administration |
|
|
66,144 |
|
|
|
41,755 |
|
|
|
110,479 |
|
|
|
78,070 |
|
Depreciation and amortization |
|
|
32,182 |
|
|
|
30,010 |
|
|
|
63,800 |
|
|
|
58,402 |
|
Total operating expenses |
|
|
350,575 |
|
|
|
277,807 |
|
|
|
678,659 |
|
|
|
536,097 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
|
|
(31,723 |
) |
|
|
10,931 |
|
|
|
(38,444 |
) |
|
|
27,746 |
|
Other income (expense), net |
|
|
1,622 |
|
|
|
(3,784 |
) |
|
|
(4,345 |
) |
|
|
(11,252 |
) |
Income (loss) before income tax provision (benefit) |
|
|
(30,101 |
) |
|
|
7,147 |
|
|
|
(42,789 |
) |
|
|
16,494 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income tax provision (benefit) |
|
|
(5,833 |
) |
|
|
15,516 |
|
|
|
(3,813 |
) |
|
|
9,928 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
|
|
(24,268 |
) |
|
|
(8,369 |
) |
|
|
(38,976 |
) |
|
|
6,566 |
|
Add: Net loss attributable to non-controlling interest |
|
|
983 |
|
|
|
88 |
|
|
|
1,832 |
|
|
|
99 |
|
Net income (loss) attributable to Envestnet, Inc. |
|
$ |
(23,285 |
) |
|
$ |
(8,281 |
) |
|
$ |
(37,144 |
) |
|
$ |
6,665 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to Envestnet, Inc.: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(0.42 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.67 |
) |
|
$ |
0.12 |
|
|
|
|
|
|
|
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|
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Diluted |
|
$ |
(0.42 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.67 |
) |
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
55,203,120 |
|
|
|
54,440,388 |
|
|
|
55,054,272 |
|
|
|
54,325,353 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted |
|
|
55,203,120 |
|
|
|
54,440,388 |
|
|
|
55,054,272 |
|
|
|
55,136,946 |
|
Envestnet, Inc.
|
||||||||
|
|
Six Months Ended |
||||||
|
|
June 30, |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
OPERATING ACTIVITIES: |
|
|
|
|
||||
Net income (loss) |
|
$ |
(38,976 |
) |
|
$ |
6,566 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
63,800 |
|
|
|
58,402 |
|
Provision for doubtful accounts |
|
|
(1,230 |
) |
|
|
455 |
|
Deferred income taxes |
|
|
(8,222 |
) |
|
|
8,137 |
|
Release of uncertain tax positions |
|
|
(3,095 |
) |
|
|
— |
|
Non-cash compensation expense |
|
|
45,318 |
|
|
|
31,422 |
|
Non-cash interest expense |
|
|
3,474 |
|
|
|
2,906 |
|
Accretion on contingent consideration and purchase liability |
|
|
— |
|
|
|
575 |
|
Payments of contingent consideration |
|
|
— |
|
|
|
(2,360 |
) |
Fair market value adjustment to contingent consideration liability |
|
|
— |
|
|
|
(140 |
) |
Fair market value adjustment to investment in private company |
|
|
— |
|
|
|
(758 |
) |
Loss allocations from equity method investments |
|
|
2,945 |
|
|
|
4,045 |
|
Dilution gain on equity method investee share issuance |
|
|
(6,934 |
) |
|
|
— |
|
Impairment of right of use assets |
|
|
12,961 |
|
|
|
1,110 |
|
Loss on property and equipment disposals - office closures |
|
|
3,710 |
|
|
|
— |
|
Other |
|
|
167 |
|
|
|
282 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Fees receivable, net |
|
|
13,694 |
|
|
|
(1,334 |
) |
Prepaid expenses and other current assets |
|
|
(2,721 |
) |
|
|
(155 |
) |
Other non-current assets |
|
|
(3,638 |
) |
|
|
3,665 |
|
Accrued expenses and other liabilities |
|
|
(31,962 |
) |
|
|
527 |
|
Accounts payable |
|
|
1,368 |
|
|
|
2,333 |
|
Deferred revenue |
|
|
4,277 |
|
|
|
2,789 |
|
Other non-current liabilities |
|
|
(2,294 |
) |
|
|
692 |
|
Net cash provided by operating activities |
|
|
52,642 |
|
|
|
119,159 |
|
|
|
|
|
|
||||
INVESTING ACTIVITIES: |
|
|
|
|
||||
Purchases of property and equipment |
|
|
(9,141 |
) |
|
|
(11,357 |
) |
Capitalization of internally developed software |
|
|
(43,045 |
) |
|
|
(31,802 |
) |
Acquisition of proprietary technology |
|
|
(15,000 |
) |
|
|
(25,517 |
) |
Acquisitions of businesses, net of cash acquired |
|
|
(14,472 |
) |
|
|
(33,143 |
) |
Investments in private companies |
|
|
(8,000 |
) |
|
|
(4,549 |
) |
Advance for technology solutions |
|
|
(4,000 |
) |
|
|
(3,000 |
) |
Issuance of notes receivable to equity method investees |
|
|
(4,350 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(98,008 |
) |
|
|
(109,368 |
) |
Envestnet, Inc.
|
||||||||
|
|
Six Months Ended |
||||||
|
|
June 30, |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
FINANCING ACTIVITIES: |
|
|
|
|
||||
Proceeds from exercise of stock options |
|
|
742 |
|
|
|
573 |
|
Capital contributions - non-controlling shareholders |
|
|
— |
|
|
|
23 |
|
Taxes paid in lieu of shares issued for stock-based compensation |
|
|
(18,113 |
) |
|
|
(13,020 |
) |
Finance lease payments |
|
|
(14,517 |
) |
|
|
— |
|
Share repurchases |
|
|
(9,235 |
) |
|
|
(2,097 |
) |
Revolving credit facility issuance costs |
|
|
(1,872 |
) |
|
|
— |
|
Payments of contingent consideration |
|
|
(750 |
) |
|
|
(9,200 |
) |
Other |
|
|
4 |
|
|
|
(587 |
) |
Net cash used in financing activities |
|
|
(43,741 |
) |
|
|
(24,308 |
) |
|
|
|
|
|
||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
|
|
(2,057 |
) |
|
|
(524 |
) |
|
|
|
|
|
||||
DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
(91,164 |
) |
|
|
(15,041 |
) |
|
|
|
|
|
||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
|
429,428 |
|
|
|
384,714 |
|
|
|
|
|
|
||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (a) |
|
$ |
338,264 |
|
|
$ |
369,673 |
|
(a) The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the Condensed Consolidated Balance Sheets:
|
|
June 30, |
|
June 30, |
||
|
|
2022 |
|
2021 |
||
Cash and cash equivalents |
|
$ |
338,115 |
|
$ |
369,524 |
Restricted cash included in prepaid expenses and other current assets |
|
|
149 |
|
|
149 |
Total cash, cash equivalents and restricted cash |
|
$ |
338,264 |
|
$ |
369,673 |
Reconciliation of Non-GAAP Financial Measures
|
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Total revenues |
|
$ |
318,852 |
|
|
$ |
288,738 |
|
|
$ |
640,215 |
|
|
$ |
563,843 |
|
Deferred revenue fair value adjustment (a) |
|
|
54 |
|
|
|
80 |
|
|
|
108 |
|
|
|
160 |
|
Adjusted revenues |
|
$ |
318,906 |
|
|
$ |
288,818 |
|
|
$ |
640,323 |
|
|
$ |
564,003 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
|
$ |
(24,268 |
) |
|
$ |
(8,369 |
) |
|
$ |
(38,976 |
) |
|
$ |
6,566 |
|
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
Deferred revenue fair value adjustment (a) |
|
|
54 |
|
|
|
80 |
|
|
|
108 |
|
|
|
160 |
|
Interest income (b) |
|
|
(713 |
) |
|
|
(197 |
) |
|
|
(1,034 |
) |
|
|
(367 |
) |
Interest expense (b) |
|
|
4,212 |
|
|
|
4,225 |
|
|
|
9,065 |
|
|
|
8,440 |
|
Income tax provision (benefit) |
|
|
(5,833 |
) |
|
|
15,516 |
|
|
|
(3,813 |
) |
|
|
9,928 |
|
Depreciation and amortization |
|
|
32,182 |
|
|
|
30,010 |
|
|
|
63,800 |
|
|
|
58,402 |
|
Non-cash compensation expense (d) |
|
|
23,504 |
|
|
|
17,285 |
|
|
|
45,318 |
|
|
|
31,422 |
|
Restructuring charges and transaction costs (e) |
|
|
21,026 |
|
|
|
5,028 |
|
|
|
23,372 |
|
|
|
7,812 |
|
Severance (d) |
|
|
7,148 |
|
|
|
5,377 |
|
|
|
10,254 |
|
|
|
10,291 |
|
Accretion on contingent consideration and purchase liability (c) |
|
|
— |
|
|
|
187 |
|
|
|
— |
|
|
|
575 |
|
Fair market value adjustment on contingent consideration liability (c) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(140 |
) |
Fair market value adjustment to investment in private company (b) |
|
|
— |
|
|
|
(758 |
) |
|
|
— |
|
|
|
(758 |
) |
Non-recurring litigation and regulatory related expenses (c) |
|
|
4,306 |
|
|
|
1,938 |
|
|
|
7,383 |
|
|
|
3,647 |
|
Foreign currency (b) |
|
|
413 |
|
|
|
(138 |
) |
|
|
305 |
|
|
|
13 |
|
Non-income tax expense adjustment (c) |
|
|
189 |
|
|
|
295 |
|
|
|
213 |
|
|
|
(271 |
) |
Dilution gain on equity method investee share issuance (b) |
|
|
(6,934 |
) |
|
|
— |
|
|
|
(6,934 |
) |
|
|
— |
|
Loss allocations from equity method investments (b) |
|
|
1,400 |
|
|
|
757 |
|
|
|
2,945 |
|
|
|
4,045 |
|
(Income) loss attributable to non-controlling interest |
|
|
440 |
|
|
|
(175 |
) |
|
|
817 |
|
|
|
(440 |
) |
Adjusted EBITDA |
|
$ |
57,126 |
|
|
$ |
71,061 |
|
|
$ |
112,823 |
|
|
$ |
139,325 |
|
| (a) | Included within subscription-based revenues in the condensed consolidated statements of operations. |
|
| (b) | Included within other expense, net in the condensed consolidated statements of operations. |
|
| (c) | Included within general and administration expenses in the condensed consolidated statements of operations. |
|
| (d) | Included within compensation and benefits in the condensed consolidated statements of operations. |
|
| (e) | For the three months ended June 30, 2022 and 2021, $20.9 million and $2.7 million were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the three months ended June 30, 2022 and 2021, $0.1 million and $2.3 million were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2022 and 2021, $23.5 million and $4.5 million were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2022 and 2021, $(0.1) million and $3.3 million were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. |
|
Envestnet, Inc.
|
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income (loss) |
|
$ |
(24,268 |
) |
|
$ |
(8,369 |
) |
|
$ |
(38,976 |
) |
|
$ |
6,566 |
|
Income tax provision (benefit) (a) |
|
|
(5,833 |
) |
|
|
15,516 |
|
|
|
(3,813 |
) |
|
|
9,928 |
|
Income (loss) before income tax provision (benefit) |
|
|
(30,101 |
) |
|
|
7,147 |
|
|
|
(42,789 |
) |
|
|
16,494 |
|
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
Deferred revenue fair value adjustment (b) |
|
|
54 |
|
|
|
80 |
|
|
|
108 |
|
|
|
160 |
|
Non-cash interest expense (d) |
|
|
1,415 |
|
|
|
1,429 |
|
|
|
3,474 |
|
|
|
2,852 |
|
Cash interest - Convertible Notes (d) |
|
|
2,480 |
|
|
|
2,480 |
|
|
|
4,960 |
|
|
|
4,960 |
|
Non-cash compensation expense (e) |
|
|
23,504 |
|
|
|
17,285 |
|
|
|
45,318 |
|
|
|
31,422 |
|
Restructuring charges and transaction costs (g) |
|
|
21,026 |
|
|
|
5,028 |
|
|
|
23,372 |
|
|
|
7,812 |
|
Severance (e) |
|
|
7,148 |
|
|
|
5,377 |
|
|
|
10,254 |
|
|
|
10,291 |
|
Accretion on contingent consideration and purchase liability (c) |
|
|
— |
|
|
|
187 |
|
|
|
— |
|
|
|
575 |
|
Fair market value adjustment on contingent consideration liability (c) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(140 |
) |
Fair market value adjustment to investment in private company (d) |
|
|
— |
|
|
|
(758 |
) |
|
|
— |
|
|
|
(758 |
) |
Amortization of acquired intangibles (f) |
|
|
17,645 |
|
|
|
17,502 |
|
|
|
35,165 |
|
|
|
33,980 |
|
Non-recurring litigation and regulatory related expenses (c) |
|
|
4,306 |
|
|
|
1,938 |
|
|
|
7,383 |
|
|
|
3,647 |
|
Foreign currency (d) |
|
|
413 |
|
|
|
(138 |
) |
|
|
305 |
|
|
|
13 |
|
Non-income tax expense adjustment (c) |
|
|
189 |
|
|
|
295 |
|
|
|
213 |
|
|
|
(271 |
) |
Dilution gain on equity method investee share issuance (d) |
|
|
(6,934 |
) |
|
|
— |
|
|
|
(6,934 |
) |
|
|
— |
|
Loss allocations from equity method investments (d) |
|
|
1,400 |
|
|
|
757 |
|
|
|
2,945 |
|
|
|
4,045 |
|
Loss (income) attributable to non-controlling interest |
|
|
440 |
|
|
|
(175 |
) |
|
|
817 |
|
|
|
(440 |
) |
Adjusted net income before income tax effect |
|
|
42,985 |
|
|
|
58,434 |
|
|
|
84,591 |
|
|
|
114,642 |
|
Income tax effect (h) |
|
|
(10,961 |
) |
|
|
(14,901 |
) |
|
|
(21,571 |
) |
|
|
(29,234 |
) |
Adjusted net income |
|
$ |
32,024 |
|
|
$ |
43,533 |
|
|
$ |
63,020 |
|
|
$ |
85,408 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic number of weighted-average shares outstanding |
|
|
55,203,120 |
|
|
|
54,440,388 |
|
|
|
55,054,272 |
|
|
|
54,325,353 |
|
Effect of dilutive shares: |
|
|
|
|
|
|
|
|
||||||||
Options to purchase common stock |
|
|
129,217 |
|
|
|
198,277 |
|
|
|
142,510 |
|
|
|
210,381 |
|
Unvested restricted stock units |
|
|
199,853 |
|
|
|
435,023 |
|
|
|
381,397 |
|
|
|
536,186 |
|
Convertible Notes |
|
|
9,898,549 |
|
|
|
9,898,549 |
|
|
|
9,898,549 |
|
|
|
9,898,549 |
|
Warrants |
|
|
22,170 |
|
|
|
53,648 |
|
|
|
37,473 |
|
|
|
65,026 |
|
Diluted number of weighted-average shares outstanding |
|
|
65,452,909 |
|
|
|
65,025,885 |
|
|
|
65,514,201 |
|
|
|
65,035,495 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income per share - diluted |
|
$ |
0.49 |
|
|
$ |
0.67 |
|
|
$ |
0.96 |
|
|
$ |
1.31 |
|
(a) |
For the three months ended June 30, 2022 and 2021, the effective tax rate computed in accordance with GAAP equaled 19.4% and 217.1%, respectively. For the six months ended June 30, 2022 and 2021, the effective tax rate computed in accordance with GAAP equaled 8.9% and 60.2%, respectively. |
|
(b) |
Included within subscription-based revenues in the condensed consolidated statements of operations. |
|
(c) |
Included within general and administration expenses in the condensed consolidated statements of operations. |
|
(d) |
Included within other expense, net in the condensed consolidated statements of operations. |
|
(e) |
Included within compensation and benefits in the condensed consolidated statements of operations. |
|
(f) |
Included within depreciation and amortization in the condensed consolidated statements of operations. |
|
(g) |
For the three months ended June 30, 2022 and 2021, $20.9 million and $2.7 million were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the three months ended June 30, 2022 and 2021, $0.1 million and $2.3 million were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2022 and 2021, $23.5 million and $4.5 million were included within general and administration expenses, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2022 and 2021, $(0.1) million and $3.3 million were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. |
|
(h) |
An estimated normalized effective tax rate of 25.5% has been used to compute adjusted net income for the three and six months ended June 30, 2022 and 2021. |
|
Reconciliation of Non-GAAP Financial Measures
|
|||||||||||||||
|
|
Three Months Ended June 30, 2022 |
|||||||||||||
|
|
Envestnet
|
|
Envestnet Data
|
|
Nonsegment |
|
Total |
|||||||
Revenues |
|
$ |
272,000 |
|
$ |
46,852 |
|
|
$ |
— |
|
|
$ |
318,852 |
|
Deferred revenue fair value adjustment (a) |
|
|
54 |
|
|
— |
|
|
|
— |
|
|
|
54 |
|
Adjusted revenues |
|
$ |
272,054 |
|
$ |
46,852 |
|
|
$ |
— |
|
|
$ |
318,906 |
|
|
|
|
|
|
|
|
|
|
|||||||
Revenues: |
|
|
|
|
|
|
|
|
|||||||
Asset-based |
|
$ |
191,972 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
191,972 |
|
Subscription-based |
|
|
73,568 |
|
|
44,552 |
|
|
|
— |
|
|
|
118,120 |
|
Total recurring revenues |
|
|
265,540 |
|
|
44,552 |
|
|
|
— |
|
|
|
310,092 |
|
Professional services and other revenues |
|
|
6,460 |
|
|
2,300 |
|
|
|
— |
|
|
|
8,760 |
|
Total revenues |
|
|
272,000 |
|
|
46,852 |
|
|
|
— |
|
|
|
318,852 |
|
|
|
|
|
|
|
|
|
|
|||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|||||||
Cost of revenues: |
|
|
|
|
|
|
|
|
|||||||
Asset-based |
|
|
112,301 |
|
|
— |
|
|
|
— |
|
|
|
112,301 |
|
Subscription-based |
|
|
1,504 |
|
|
5,737 |
|
|
|
— |
|
|
|
7,241 |
|
Professional services and other |
|
|
6,917 |
|
|
23 |
|
|
|
— |
|
|
|
6,940 |
|
Total cost of revenues |
|
|
120,722 |
|
|
5,760 |
|
|
|
— |
|
|
|
126,482 |
|
Compensation and benefits |
|
|
78,759 |
|
|
23,994 |
|
|
|
23,014 |
|
|
|
125,767 |
|
General and administration |
|
|
45,001 |
|
|
12,171 |
|
|
|
8,972 |
|
|
|
66,144 |
|
Depreciation and amortization |
|
|
23,550 |
|
|
8,632 |
|
|
|
— |
|
|
|
32,182 |
|
Total operating expenses |
|
$ |
268,032 |
|
$ |
50,557 |
|
|
$ |
31,986 |
|
|
$ |
350,575 |
|
|
|
|
|
|
|
|
|
|
|||||||
Income (loss) from operations |
|
$ |
3,968 |
|
$ |
(3,705 |
) |
|
$ |
(31,986 |
) |
|
$ |
(31,723 |
) |
Add (deduct): |
|
|
|
|
|
|
|
|
|||||||
Deferred revenue fair value adjustment (a) |
|
|
54 |
|
|
— |
|
|
|
— |
|
|
|
54 |
|
Depreciation and amortization |
|
|
23,550 |
|
|
8,632 |
|
|
|
— |
|
|
|
32,182 |
|
Non-cash compensation expense (c) |
|
|
13,364 |
|
|
1,852 |
|
|
|
8,288 |
|
|
|
23,504 |
|
Restructuring charges and transaction costs (d) |
|
|
16,897 |
|
|
753 |
|
|
|
3,376 |
|
|
|
21,026 |
|
Severance (c) |
|
|
2,813 |
|
|
(431 |
) |
|
|
4,766 |
|
|
|
7,148 |
|
Non-recurring litigation and regulatory related expenses (b) |
|
|
— |
|
|
4,306 |
|
|
|
— |
|
|
|
4,306 |
|
Non-income tax expense adjustment (b) |
|
|
184 |
|
|
5 |
|
|
|
— |
|
|
|
189 |
|
Loss attributable to non-controlling interest |
|
|
440 |
|
|
— |
|
|
|
— |
|
|
|
440 |
|
Adjusted EBITDA |
|
$ |
61,270 |
|
$ |
11,412 |
|
|
$ |
(15,556 |
) |
|
$ |
57,126 |
|
| (a) | Included within subscription-based revenues in the condensed consolidated statements of operations. |
|
| (b) | Included within general and administration expenses in the condensed consolidated statements of operations. |
|
| (c) | Included within compensation and benefits in the condensed consolidated statements of operations. |
|
| (d) | For the three months ended June 30, 2022, $20.9 million was included within general and administration expenses and $0.1 million was included within compensation and benefits in the condensed consolidated statements of operations. |
|
Reconciliation of Non-GAAP Financial Measures
|
|||||||||||||||
|
|
Six Months Ended June 30, 2022 |
|||||||||||||
|
|
Envestnet
|
|
Envestnet Data
|
|
Nonsegment |
|
Total |
|||||||
Revenues |
|
$ |
545,568 |
|
$ |
94,647 |
|
|
$ |
— |
|
|
$ |
640,215 |
|
Deferred revenue fair value adjustment (a) |
|
|
108 |
|
|
— |
|
|
|
— |
|
|
|
108 |
|
Adjusted revenues |
|
$ |
545,676 |
|
$ |
94,647 |
|
|
$ |
— |
|
|
$ |
640,323 |
|
|
|
|
|
|
|
|
|
|
|||||||
Revenues: |
|
|
|
|
|
|
|
|
|||||||
Asset-based |
|
$ |
394,689 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
394,689 |
|
Subscription-based |
|
|
142,105 |
|
|
90,749 |
|
|
|
— |
|
|
|
232,854 |
|
Total recurring revenues |
|
|
536,794 |
|
|
90,749 |
|
|
|
— |
|
|
|
627,543 |
|
Professional services and other revenues |
|
|
8,774 |
|
|
3,898 |
|
|
|
— |
|
|
|
12,672 |
|
Total revenues |
|
|
545,568 |
|
|
94,647 |
|
|
|
— |
|
|
|
640,215 |
|
|
|
|
|
|
|
|
|
|
|||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|||||||
Cost of revenues: |
|
|
|
|
|
|
|
|
|||||||
Asset-based |
|
|
229,729 |
|
|
— |
|
|
|
— |
|
|
|
229,729 |
|
Subscription-based |
|
|
2,869 |
|
|
12,183 |
|
|
|
— |
|
|
|
15,052 |
|
Professional services and other |
|
|
6,932 |
|
|
51 |
|
|
|
— |
|
|
|
6,983 |
|
Total cost of revenues |
|
|
239,530 |
|
|
12,234 |
|
|
|
— |
|
|
|
251,764 |
|
Compensation and benefits |
|
|
157,403 |
|
|
54,160 |
|
|
|
41,053 |
|
|
|
252,616 |
|
General and administration |
|
|
72,361 |
|
|
20,782 |
|
|
|
17,336 |
|
|
|
110,479 |
|
Depreciation and amortization |
|
|
47,037 |
|
|
16,763 |
|
|
|
— |
|
|
|
63,800 |
|
Total operating expenses |
|
$ |
516,331 |
|
$ |
103,939 |
|
|
$ |
58,389 |
|
|
$ |
678,659 |
|
|
|
|
|
|
|
|
|
|
|||||||
Income (loss) from operations |
|
$ |
29,237 |
|
$ |
(9,292 |
) |
|
$ |
(58,389 |
) |
|
$ |
(38,444 |
) |
Add (deduct): |
|
|
|
|
|
|
|
|
|||||||
Deferred revenue fair value adjustment (a) |
|
|
108 |
|
|
— |
|
|
|
— |
|
|
|
108 |
|
Depreciation and amortization |
|
|
47,037 |
|
|
16,763 |
|
|
|
— |
|
|
|
63,800 |
|
Non-cash compensation expense (c) |
|
|
24,654 |
|
|
5,387 |
|
|
|
15,277 |
|
|
|
45,318 |
|
Restructuring charges and transaction costs (d) |
|
|
17,181 |
|
|
750 |
|
|
|
5,441 |
|
|
|
23,372 |
|
Severance (c) |
|
|
4,223 |
|
|
1,211 |
|
|
|
4,820 |
|
|
|
10,254 |
|
Non-recurring litigation and regulatory related expenses (b) |
|
|
— |
|
|
7,383 |
|
|
|
— |
|
|
|
7,383 |
|
Non-income tax expense adjustment (b) |
|
|
291 |
|
|
(78 |
) |
|
|
— |
|
|
|
213 |
|
Loss attributable to non-controlling interest |
|
|
817 |
|
|
— |
|
|
|
— |
|
|
|
817 |
|
Other |
|
|
— |
|
|
2 |
|
|
|
— |
|
|
|
2 |
|
Adjusted EBITDA |
|
$ |
123,548 |
|
$ |
22,126 |
|
|
$ |
(32,851 |
) |
|
$ |
112,823 |
|
| (a) | Included within subscription-based revenues in the condensed consolidated statements of operations. |
|
| (b) | Included within general and administration expenses in the condensed consolidated statements of operations. |
|
| (c) | Included within compensation and benefits in the condensed consolidated statements of operations. |
|
| (d) | For the six months ended June 30, 2022, $23.5 million was included within general and administration expenses and $(0.1) million was included within compensation and benefits in the condensed consolidated statements of operations. |
|
Reconciliation of Non-GAAP Financial Measures
|
|||||||||||||||
|
|
Three Months Ended June 30, 2021 |
|||||||||||||
|
|
Envestnet
|
|
Envestnet Data
|
|
Nonsegment |
|
Total |
|||||||
Revenues |
|
$ |
240,297 |
|
|
$ |
48,441 |
|
$ |
— |
|
|
$ |
288,738 |
|
Deferred revenue fair value adjustment (a) |
|
|
80 |
|
|
|
— |
|
|
— |
|
|
|
80 |
|
Adjusted revenues |
|
$ |
240,377 |
|
|
$ |
48,441 |
|
$ |
— |
|
|
$ |
288,818 |
|
|
|
|
|
|
|
|
|
|
|||||||
Revenues: |
|
|
|
|
|
|
|
|
|||||||
Asset-based |
|
$ |
170,075 |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
170,075 |
|
Subscription-based |
|
|
66,663 |
|
|
|
45,841 |
|
|
— |
|
|
|
112,504 |
|
Total recurring revenues |
|
|
236,738 |
|
|
|
45,841 |
|
|
— |
|
|
|
282,579 |
|
Professional services and other revenues |
|
|
3,559 |
|
|
|
2,600 |
|
|
— |
|
|
|
6,159 |
|
Total revenues |
|
|
240,297 |
|
|
|
48,441 |
|
|
— |
|
|
|
288,738 |
|
|
|
|
|
|
|
|
|
|
|||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|||||||
Cost of revenues: |
|
|
|
|
|
|
|
|
|||||||
Asset-based |
|
|
93,341 |
|
|
|
— |
|
|
— |
|
|
|
93,341 |
|
Subscription-based |
|
|
1,294 |
|
|
|
5,733 |
|
|
— |
|
|
|
7,027 |
|
Professional services and other |
|
|
78 |
|
|
|
48 |
|
|
— |
|
|
|
126 |
|
Total cost of revenues |
|
|
94,713 |
|
|
|
5,781 |
|
|
— |
|
|
|
100,494 |
|
Compensation and benefits |
|
|
65,114 |
|
|
|
25,008 |
|
|
15,426 |
|
|
|
105,548 |
|
General and administration |
|
|
24,884 |
|
|
|
9,427 |
|
|
7,444 |
|
|
|
41,755 |
|
Depreciation and amortization |
|
|
23,127 |
|
|
|
6,883 |
|
|
— |
|
|
|
30,010 |
|
Total operating expenses |
|
$ |
207,838 |
|
|
$ |
47,099 |
|
$ |
22,870 |
|
|
$ |
277,807 |
|
|
|
|
|
|
|
|
|
|
|||||||
Income (loss) from operations |
|
$ |
32,459 |
|
|
$ |
1,342 |
|
$ |
(22,870 |
) |
|
$ |
10,931 |
|
Add (deduct): |
|
|
|
|
|
|
|
|
|||||||
Deferred revenue fair value adjustment (a) |
|
|
80 |
|
|
|
— |
|
|
— |
|
|
|
80 |
|
Depreciation and amortization |
|
|
23,127 |
|
|
|
6,883 |
|
|
— |
|
|
|
30,010 |
|
Non-cash compensation expense (c) |
|
|
9,590 |
|
|
|
3,183 |
|
|
4,512 |
|
|
|
17,285 |
|
Restructuring charges and transaction costs (d) |
|
|
3,821 |
|
|
|
27 |
|
|
1,180 |
|
|
|
5,028 |
|
Severance (c) |
|
|
1,096 |
|
|
|
1,687 |
|
|
2,594 |
|
|
|
5,377 |
|
Accretion on contingent consideration and purchase liability (b) |
|
|
168 |
|
|
|
19 |
|
|
— |
|
|
|
187 |
|
Non-recurring litigation and regulatory related expenses (b) |
|
|
— |
|
|
|
1,938 |
|
|
— |
|
|
|
1,938 |
|
Non-income tax expense adjustment (b) |
|
|
105 |
|
|
|
190 |
|
|
— |
|
|
|
295 |
|
Income attributable to non-controlling interest |
|
|
(175 |
) |
|
|
— |
|
|
— |
|
|
|
(175 |
) |
Other |
|
|
88 |
|
|
|
9 |
|
|
8 |
|
|
|
105 |
|
Adjusted EBITDA |
|
$ |
70,359 |
|
|
$ |
15,278 |
|
$ |
(14,576 |
) |
|
$ |
71,061 |
|
| (a) | Included within subscription-based revenues in the condensed consolidated statements of operations. |
|
| (b) | Included within general and administration expenses in the condensed consolidated statements of operations. |
|
| (c) | Included within compensation and benefits in the condensed consolidated statements of operations. |
|
| (d) | For the three months ended June 30, 2021, $2.7 million was included within general and administration expenses and $2.3 million was included within compensation and benefits in the condensed consolidated statements of operations. |
|
Reconciliation of Non-GAAP Financial Measures
|
||||||||||||||||
|
|
Six Months Ended June 30, 2021 |
||||||||||||||
|
|
Envestnet
|
|
Envestnet Data
|
|
Nonsegment |
|
Total |
||||||||
Revenues |
|
$ |
466,707 |
|
|
$ |
97,136 |
|
|
$ |
— |
|
|
$ |
563,843 |
|
Deferred revenue fair value adjustment (a) |
|
|
160 |
|
|
|
— |
|
|
|
— |
|
|
|
160 |
|
Adjusted revenues |
|
$ |
466,867 |
|
|
$ |
97,136 |
|
|
$ |
— |
|
|
$ |
564,003 |
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
$ |
329,450 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
329,450 |
|
Subscription-based |
|
|
130,675 |
|
|
|
91,658 |
|
|
|
— |
|
|
|
222,333 |
|
Total recurring revenues |
|
|
460,125 |
|
|
|
91,658 |
|
|
|
— |
|
|
|
551,783 |
|
Professional services and other revenues |
|
|
6,582 |
|
|
|
5,478 |
|
|
|
— |
|
|
|
12,060 |
|
Total revenues |
|
|
466,707 |
|
|
|
97,136 |
|
|
|
— |
|
|
|
563,843 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Cost of revenues: |
|
|
|
|
|
|
|
|
||||||||
Asset-based |
|
|
179,531 |
|
|
|
— |
|
|
|
— |
|
|
|
179,531 |
|
Subscription-based |
|
|
2,507 |
|
|
|
11,124 |
|
|
|
— |
|
|
|
13,631 |
|
Professional services and other |
|
|
107 |
|
|
|
94 |
|
|
|
— |
|
|
|
201 |
|
Total cost of revenues |
|
|
182,145 |
|
|
|
11,218 |
|
|
|
— |
|
|
|
193,363 |
|
Compensation and benefits |
|
|
127,968 |
|
|
|
51,297 |
|
|
|
26,997 |
|
|
|
206,262 |
|
General and administration |
|
|
45,583 |
|
|
|
17,943 |
|
|
|
14,544 |
|
|
|
78,070 |
|
Depreciation and amortization |
|
|
44,355 |
|
|
|
14,047 |
|
|
|
— |
|
|
|
58,402 |
|
Total operating expenses |
|
$ |
400,051 |
|
|
$ |
94,505 |
|
|
$ |
41,541 |
|
|
$ |
536,097 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
|
$ |
66,656 |
|
|
$ |
2,631 |
|
|
$ |
(41,541 |
) |
|
$ |
27,746 |
|
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
Deferred revenue fair value adjustment (a) |
|
|
160 |
|
|
|
— |
|
|
|
— |
|
|
|
160 |
|
Depreciation and amortization |
|
|
44,355 |
|
|
|
14,047 |
|
|
|
— |
|
|
|
58,402 |
|
Non-cash compensation expense (c) |
|
|
17,419 |
|
|
|
6,024 |
|
|
|
7,979 |
|
|
|
31,422 |
|
Restructuring charges and transaction costs (d) |
|
|
5,186 |
|
|
|
174 |
|
|
|
2,452 |
|
|
|
7,812 |
|
Severance (c) |
|
|
4,183 |
|
|
|
3,407 |
|
|
|
2,701 |
|
|
|
10,291 |
|
Accretion on contingent consideration and purchase liability (b) |
|
|
510 |
|
|
|
65 |
|
|
|
— |
|
|
|
575 |
|
Fair market value adjustment on contingent consideration liability (b) |
|
|
— |
|
|
|
(140 |
) |
|
|
— |
|
|
|
(140 |
) |
Non-recurring litigation and regulatory related expenses (b) |
|
|
— |
|
|
|
3,647 |
|
|
|
— |
|
|
|
3,647 |
|
Non-income tax expense adjustment (b) |
|
|
(430 |
) |
|
|
159 |
|
|
|
— |
|
|
|
(271 |
) |
Income attributable to non-controlling interest |
|
|
(440 |
) |
|
|
— |
|
|
|
— |
|
|
|
(440 |
) |
Other |
|
|
104 |
|
|
|
9 |
|
|
|
8 |
|
|
|
121 |
|
Adjusted EBITDA |
|
$ |
137,703 |
|
|
$ |
30,023 |
|
|
$ |
(28,401 |
) |
|
$ |
139,325 |
|
| (a) | Included within subscription-based revenues in the condensed consolidated statements of operations. |
|
| (b) | Included within general and administration expenses in the condensed consolidated statements of operations. |
|
| (c) | Included within compensation and benefits in the condensed consolidated statements of operations. |
|
| (d) | For the six months ended June 30, 2021, $4.5 million was included within general and administration expenses and $3.3 million was included within compensation and benefits in the condensed consolidated statements of operations. |
|
Envestnet, Inc.
|
||||||||||||||||
|
|
As of |
||||||||||||||
|
|
June 30, |
|
September 30, |
|
December 31, |
|
March 31, |
|
June 30, |
||||||
|
|
2021 |
|
2021 |
|
2021 |
|
2022(1) |
|
2022 |
||||||
|
|
(in millions, except accounts and advisors data) |
||||||||||||||
Platform Assets |
|
|
|
|
|
|
|
|
|
|
||||||
Assets under Management (“AUM”) |
|
$ |
315,422 |
|
$ |
327,279 |
|
$ |
362,038 |
|
$ |
361,251 |
|
|
$ |
325,209 |
Assets under Administration (“AUA”) |
|
|
426,416 |
|
|
431,040 |
|
|
456,316 |
|
|
432,141 |
|
|
|
352,840 |
Total AUM/A |
|
|
741,838 |
|
|
758,319 |
|
|
818,354 |
|
|
793,392 |
|
|
|
678,049 |
Subscription |
|
|
4,447,733 |
|
|
4,670,827 |
|
|
4,901,662 |
|
|
4,736,537 |
|
|
|
4,312,114 |
Total Platform Assets |
|
$ |
5,189,571 |
|
$ |
5,429,146 |
|
$ |
5,720,016 |
|
$ |
5,529,929 |
|
|
$ |
4,990,163 |
Platform Accounts |
|
|
|
|
|
|
|
|
|
|
||||||
AUM |
|
|
1,209,761 |
|
|
1,276,066 |
|
|
1,345,274 |
|
|
1,459,093 |
|
|
|
1,491,861 |
AUA |
|
|
1,163,991 |
|
|
1,193,069 |
|
|
1,217,076 |
|
|
1,186,180 |
|
|
|
1,061,484 |
Total AUM/A |
|
|
2,373,752 |
|
|
2,469,135 |
|
|
2,562,350 |
|
|
2,645,273 |
|
|
|
2,553,345 |
Subscription |
|
|
11,712,573 |
|
|
14,810,664 |
|
|
14,986,531 |
|
|
15,151,569 |
|
|
|
15,312,144 |
Total Platform Accounts |
|
|
14,086,325 |
|
|
17,279,799 |
|
|
17,548,881 |
|
|
17,796,842 |
|
|
|
17,865,489 |
Advisors |
|
|
|
|
|
|
|
|
|
|
||||||
AUM/A |
|
|
41,259 |
|
|
41,696 |
|
|
39,735 |
|
|
39,800 |
|
|
|
38,394 |
Subscription |
|
|
66,597 |
|
|
66,489 |
|
|
68,808 |
|
|
67,168 |
|
|
|
66,838 |
Total Advisors |
|
|
107,856 |
|
|
108,185 |
|
|
108,543 |
|
|
106,968 |
|
|
|
105,232 |
(1) Certain assets and accounts have been reclassified from AUA to AUM to better reflect the nature of the services provided to certain customers.
The following table summarizes the changes in AUM and AUA for the three months ended June 30, 2022:
|
|
3/31/2022 |
|
Gross
|
|
Redemptions |
|
Net
|
|
Market
|
|
Reclass to
|
|
6/30/2022 |
|||||||||||
|
|
(in millions, except account data) |
|||||||||||||||||||||||
AUM |
|
$ |
361,251 |
|
$ |
24,829 |
|
$ |
(18,962 |
) |
|
$ |
5,867 |
|
|
$ |
(41,909 |
) |
|
$ |
— |
|
|
$ |
325,209 |
AUA |
|
|
432,141 |
|
|
27,323 |
|
|
(27,662 |
) |
|
|
(339 |
) |
|
|
(50,499 |
) |
|
|
(28,463 |
) |
|
|
352,840 |
Total AUM/A |
|
$ |
793,392 |
|
$ |
52,152 |
|
$ |
(46,624 |
) |
|
$ |
5,528 |
|
|
$ |
(92,408 |
) |
|
$ |
(28,463 |
) |
|
$ |
678,049 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fee-Based Accounts |
|
|
2,645,273 |
|
|
|
|
|
|
19,494 |
|
|
|
|
|
(111,422 |
) |
|
|
2,553,345 |
|||||
The above AUM/A gross sales figures include $9.2 billion in new client conversions. The Company onboarded an additional $24.4 billion in subscription conversions during the three months ended June 30, 2022, bringing total conversions for the quarter to $33.6 billion.
Asset and account figures in the “Reclass to Subscription” columns for the three months ended June 30, 2022 represent enterprise customers whose billing arrangements in future periods are subscription-based, rather than asset-based. Such amounts are included in Subscription metrics at the end of the quarter in which the reclassification occurred, with no impact on total platform assets or accounts.