ENV - Earnings call transcript Q4 2019

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Operator

Good day and welcome to the Envestnet fourth quarter 2019 earnings conference call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Chris Curtis, Division CFO and Head of Investor Relations. Please go ahead, sir.

Chris Curtis

afternoon. good and you Thank I am Officer, DePina, Interim Executive business. Bill Executive today D'Arrigo, Chief by Analytics Pete and Stuart our Crager, Financial of Chief Data joined Officer Chief and

and earnings the under section. associated Our Relations release Form can at Investor be X-K envestnet.com found press

be During call, share. calculated and income adjusted be income per we discussing including not may other release. and information accordance non-GAAP information differently of than net non-GAAP this for GAAP with today's revenue, EBITDA, to GAAP adjusted adjusted information information conference non-GAAP This in is calculated directly adjusted net will companies. certain our press revenue, similar appear in adjusted net comparable reconciliations Quantitative the financial information most

be materially are expect. on These forward-looking could our as matters. more numerous and subject also them release, these discussing available risks reliance our future are put from performance are uncertainties well cause on factors which information During certain not what earnings you of them. as that the to discussions should not differ Please our website on recent to and therefore undue we filings we affect information. guarantees to press statements call, These will SEC most that refer for could

call live This are not call will the developments. for replay time call current our material reflect be and will remarks to at webcast is during the made for of website. being available and be one All subsequent month the updated on

remarks. We will prepared our after take questions

the that, Bill. will turn with to over I And call

Bill Crager

afternoon. speaking be great this Hello again you everyone. Christopher. Thank is you to It with

results financial goal. their households powered was advisors though forward millions a tragedy. an wellness committed our to infrastructure difficult the which leading financial firms American achieve the and by will their and extraordinary also enables moved XXXX always company It data network year. help to Envestnet, building be remained of We year with up, The was strong but For experienced stood great most remembered.

While that is about XXXX results, future provider our We also believe is it Envestnet best the this positioned is future. advice. drive call the of about the to

why. the advisors, Here rapid advice leveled a for the has evolution all playing that space planning grown engine, of that wealth financial field a broader launching driving platform to platform software. including financial is market's the advice expanding holistic the become leading Envestnet by

more with adoption growing. network the And market our accelerating impact our client term addressable is investment, new integrated only ability XXXX, new wellness that create but value long expanding, opportunities in provide and essential also for and they to financial important. of will solutions become for our are its Not recognized our revenue and

help essentially was when a we as this to next will our it a that data, It clients Take decision Envestnet. source for recommend aggregation engine emerging Yodlee, with that information for better is quantifiable of opportunities, believe, actions consumers we differentiates guide key goal, to source their is acquired these an now achieve results.

the gas. our is and off taking said we our I last executing call, As vision its quarter's the are company not against foot on

the financial than More more achieved of XXX year. milestone and during firms. and XXXX, XXX,XXX acquired the on than we higher to In more also PortfolioCenter the XXXX, than in signed important clients serving MoneyGuide. Also offering X,XXX value PortfolioCenter we Tamarac advisors

emerging supporting actively X,XXX-plus also RIA PortfolioCenter are using We Hosted offering.

of part the as family. MoneyGuide have to thrilled Envestnet are We

custodial the including remains MoneyGuide's eight of planning top of XX business and platforms. Survey XXXX platforms broker-dealer earn a the in XX top by TX/Inside software all and all MoneyGuide sizes, consistent years XX experience edition astonishing of recognition. the and popularity the row that financial all firms among one was levels number named the to Information models, of XX

and PortfolioCenter MoneyGuide's for acquiring Stanley entire an terms rationale delivering MyBlocks. for MoneyGuide are strategic and of the licensed progress them. Financially Morgan years in has three additional each on offering well. made recently, performing Most Both planning in including

Envestnet During the and The annuity XXXX, more eight the we Exchange launched platform Exchange. carrier Both and making Insurance on are XX Insurance also has with products the Exchange the onboard Credit many on important way. progress. Envestnet

we far, advisory they partners firms, signed stages various So and XX of are implementation. have in

Our Credit processing and lenders of in deep are four Exchange integration has actively they today. process the loans

access of partners period distribution tremendous progress to financial additional currently advisor advisors. with our a fronts and This very onboarding time. will both That over short firms proposals. side, on signed of XX the evaluating five are XX,XXX four On is have represent in

announced we advisor with ago, Services we clients. in from tool, business Advisor services services as weeks been positive our work extremely to with Feedback outsourced Partners. Exchange CFO the provide in to few has Dynasty a capital, the management growth for Financial formation conjunction access Dynasty of and marketing full Just investment our clients

very of for XX% another financial terms for into $X business. $XX performance billion as we the subscription In adjusted in also from $XX ago. business These per XX% asset a solutions benefited base sales and that remains were strong. by New billion grew conversions. grew adjusted driven by based from results of Operating XX% conditions headed Gross and market of year, billion, favorable Year. activity It conversions earnings solid adjusted our wealth quarter, results the EBITDA revenue from share last in year fourth

innovating management adding where we be and an continues are Investment area to value.

is using the that XXXX. more our ESG Assets direct asset impact tax portfolio growth management custom grew our powering. environment, index platform based And low In are XX% to doubled. our overlay cost well these than index areas compared solution Envestnet as value-added

in progress clients solutions their data connect to our a growing to We environment that will have as help system FinTech the as Envestnet's them adapt to we well opportunity more marketplace. are an believe emerging agile and proprietary to data cloud making deploying

achieve important strategic an use Yodlee established being a connects data's There in with financial case our term for is life. recognized. and XXXX, Yodlee's transforming. individuals acquired will that infrastructure, flexibility, control value individual growth In behavior integrated we its essential sense financial is are strong that financial with their ecosystem its which that opportunities XXXX, it exciting adapting areas platform clear other success an In of their value. to into Envestnet data is include By expanding that daily empower goal long

As as financial to last client. as services term revenue have growth aggregation do competitive very of year, with short Envestnet offering are U.K.'s we said, core our institutions That there pressure challenges stick well. with business from business, for to changes our shift we continue impact the analytics the open our manager institution banking professional well integrated as in financial

industry. is agreements is our we transferred, consumers' are data firms of with privacy be how and the for is is similar to standards bilateral financial announced the other full data pipeline for that that quarter, and process financial a governing important be Last stored aggregated we There is agreement be in direct for executing This the in with It consumers' protects important driving where that JPMorgan It of outcome. consumer. important important. Chase a feed. to It follow in essential world operate way data a is institutions.

industry pleased of to this important change. be We on leading the edge are

growth rollout of our We in we also our developer as business seeing platform. enhanced component data FinTech our are

value clear space. from they is set solution solutions enhanced financial which in us We modernize term tremendous out the new our build to terms, to will access our will that products. long third-party which there continue capabilities, it's to we of data developers our allow Longer more in to have other analytics than in sources of hundred any provider we and scale built and infrastructure our is business. what of accounts and XX,XXX more than which connect data We aggregate millions believe

that decisions and Envestnet perspective. to clear daily achieve collectively, market data a helps we is to driving as in executing be lives. and before can the also their tremendous Aggregated is clients value investing and is on unified manage the their More the work and provides which wellness more optimal position see act there fuel of capture to in of goals. data. practically, advisors wealth of we revenue in it networks business, in their and us It both we financial our unlocked tens more billions financial opportunity and do continue from opportunity dollars meaningful financial to believe is we individually the ourselves to that consumers

about value today, long creation. and have As value for we runway growth a with for $X revenue employees customers, and an billion shareholders. in leader value Value for industry our for

Pete point. will this it in at moments be with I will I few over closing few to comments. a back turn a

Pete D'Arrigo

Bill fourth quarter first and thank results am quarter year everyone Thank XXXX full guidance afternoon. as XXXX. as and you the and joining our going the this full well review us to year I for for you our for

and and subscription results fourth adjusted XX% November. and compared revenue beats XX%, revenue. fourth overall our guidance respectively quarter $XXX.X expectations XXXX, adjusted revenue million. of $XXX.X which for revenue summarizing the Recurring million adjusted Envestnet's XX% set Briefly asset-based increased comprises of XXXX the revenue, to to these and results net was out in quarter

Excluding Adjusted year. last or fourth PortfolioCenter fourth the Adjusted from earnings share MoneyGuide, the quarter, year XX% million, X% last was than higher grew contributions period. per adjusted of $X.XX the over EBITDA from prior XX% was revenue a in quarter year. increase and the $XX.X $X.XX

XXXX XX% year compared full million. to XXXX, adjusted increased revenue to the For $XXX.X

slower was revenue a or period. last than the year Excluding than $X.XX depreciation year. $X.XX EBITDA over rate higher last from XX% Adjusted EBITDA and diluted reflecting million earnings year, contributions per grew expense. fully the PortfolioCenter increase was adjusted interest higher share grew at adjusted X% or EPS $XXX.X Adjusted MoneyGuide, a share from expense prior and count, Adjusted the for year. XX%

of lower leverage settled ended prior credit with our we a slightly our In year and of than times cash X.X ratio facility. a December, XXXX hand convertible from combination net through the notes EBITDA, the quarter. on a maturing draw We revolving

our year on XXXX. outlook and quarter Moving to the full first for

full first here will our highlights will few earnings in for release, find in XXXX's give but guidance You detailed a the I quarter.

adjusted total million up XX% to to $XXX and expect revenue year. million, compared XX% prior be $XXX between the We to

implying between fee management revenue XX% year, to X.X million December points. million, of rate to $XXX under end $XXX Asset-based of compared assets last up our roughly basis administration on effective to an or XX%

$XXX.X items, on Professional and compared to between expect particularly to nature certain million. payroll the in expenses, due an and and from $XXX million services to between to revenue fourth first million $X the quarter. $X.X benefits, personnel higher XX% operating we years, to up Similar like quarter million, the XX% to prior are based which other increase taxes XXXX. compared expenses significantly sequentially adjusted Subscription the other to all first basis, seasonal fourth quarter of quarter the of to revenue

be our with consistent XX.X% to and XXXX. XX% million term $XX compared should expect Adjusted XXXX. long to to between $XX up normalized be And rate effective EBITDA million, we XX% tax

year ago. diluted per Assuming share earnings into $X.XX shares to XX.X a adjusted translates approximately million outstanding, $X.XX of compared this

include year For XX% we for full in to $X,XXX million, an to year organic acquired to three rate between four those XX% months Contributors XXXX. from million of XX% range growth adjusted revenue revenue growth to of first the of year. for XX% PortfolioCenter the $X,XXX the our compared XXXX, increase and to expected rate and is expect anniversary, XX% the or MoneyGuide. acquisitions be the When to XX% this

offset business Bill analytics within mid-teens, data grow impact our by grow in revenue in Asset-based in wealth by overall in Subscription-based factors carryover revenue will MoneyGuide, market low and of aided discussed the double growth business, well be growth single as strong low Stronger in business, in the our digit should should partially driven subscription in XXXX. revenue strength earlier. solutions including revenues digits. the equity the our as the by wealth

other revenue revenue business XXXX in an decline as component associated new onboard of and implementation to services with is with less them. expected Personnel we

to revenue up our go down, As revenue. goes professional of recurring about services adjusted should XX%

million times the X.X growth with the expect EBITDA reflecting our year relationship discussed our consistent XX% adjusted $XXX XX% revenue million, of to this EBITDA rate a We in we and growth of to past range between is rate. $XXX for and in adjusted targeted the growth

in of Finally, to $X.XX. a range $X.XX adjusted we share earnings expect per

than EPS reasons in expense diluted shares increasing QX, is depreciation saw lower growth. interest XXXX and EBITDA are As the we year-over-year, growth primary fully expense

Thank support for of you Envestnet. your

turn I to his point, back will remarks. it for this closing at Now Bill

Bill Crager

next you represents XXXX Thank advice. our the it age also transformational of Pete. of year year XXth but represents The beginning the

behalf network to data to have them our integrated service from of business decisions better everything now And grown and fill to can uniquely to from the act fueling today into to advice. that client power their network. on We product in advisors to goals. this stage drive applications is to their next is Envestnet financial on, of positioned platform help

purposely our very in mission forward and moving are We vision with mind.

and more advice unified advisors efficiently. of grow definition the serve tools that to expanding continuing clients on launch focused are We businesses and help their services and

positioned I in and said continue do began our the help the value. Envestnet investing positioned just to way is along best clients to create we best that, to we believe the call, As grow shareholder to provider

your you to again you take for that, afternoon. support time and your Stuart DePina Thank of Pete, With are for this happy your Thank questions. Envestnet. I

Operator

[Operator Instructions].

our JPMorgan. will from We take Will question at first Please ahead. go Cuddy

Will Cuddy

evening. Good H.

Bill Crager

Hi Will.

Will Cuddy

Hi.

you guide? to the pieces understand XXXX can walk the EBITDA am down from moving in first, just EPS. So bit trying some through a I little walk to of

share for assumptions what count? using interest and So That would helpful. are and be you expense G&A

Pete D'Arrigo

questions of this call, getting detailed into instead So some those follow-up. why on save of modeling details don't for

Will Cuddy

Okay.

Pete D'Arrigo

there. to There I don't into of level want of that is going lot depth. to get be calculations a

Will Cuddy

the you reports the in guess the for we of sale some turning I be about of Yodlee. to on divestitures the Could business? your should for that about on media there price? be Envestnet selling approaching framework room then think right. if you a consider All to And frame And buyers how right potential using you elephant thinking parts what us will is

Bill Crager

Bill. is This Will. Thanks

very on company, is we some don't would and that I Envestnet I and Visa early of or the or activity the said, rumors There invested and value that even the is in essentially any whether we and profound Morgan today recognizes that of Legg marketplace XXXX space As a Templeton activity or and announcements with E-Trade XXXX has been that that say Stanley strategically have on Schwab That that of pursuing speculations. late there in public was validating Plaid TD think or with been strategies Mason. our pretty is pieces the really is in. comment tremendous Franklin has

areas with position to and back acquisition have very advice did the financial with future provider leading RIA that in the have a $X history marketplace. about that is think when enter anticipated, MoneyGuide, last our the go RIA make the the planning. help we going acquired make RIAs space, especially substantial this billion-plus company space now power, we be You the unified the we of and power an engine Tamarac We to us really Tamarac. year that did of acquisition We believe planning in of

the value our power I comment, data platform In creates kind business. value XXXX, we It data. acquired And understanding of in as much Yodlee, our really of of market's ahead ecosystem. entire and on outlined of of fuel my value the just becomes, the creates beyond of the within data a is intrinsic just the

All assess of were outlook market and very on market have continue is understanding steps to and the will that strategic of we go believe component will good a we we the these headed very to each an where continue our with business. where

our strategic opportunity in and the continue will in move to the the invest business we We in to ability for of assess next deeper space. want invest to every our that component

Will Cuddy

a Okay. possible still Or owning pieces? you from follow-up. to actually the to need data? quick is underlying Thank data you Do without it for own that. the benefit the And

Bill Crager

There data owning are for absolute itself. value the

infrastructure we business. that infrastructure quarter As about case, other decided several substantial the And and the with we to we our wealth to each optimized sorts partner. environment of and credit, we will of a partnership you know, spoke and create a components announced grown areas use have that Equifax partnership to of over inside pretty business optimized. those to comes have of contemplate the last the We we are In and think Yodlee years, utilizing it we data continue Will, we last we wealth. areas have have very that when then powerful for of integrated analytics platform,

And think a areas our in the property so utility think that end in day, are Equifax case credit data there of data at the great these and I a great we as represents for use future. emerging is are other for use the the there that cases with kind of there of in and wealth power

Will Cuddy

Great. for you my Thank taking questions.

Bill Crager

Thanks Will.

Operator

the go at take next Peter Please Davidson. Heckmann now will ahead. We from question

Peter Heckmann

you the the taking And shifts of going you for for Can Thanks everyone. mix call. on? margins about afternoon talk negative how drivers XXXX? positive the about some different Good on and for Hi. think

Bill Crager

Yes.

one terms which of the market QX So is shift to rate bigger buckets. mix breakdown strength of other the the our the the of in into increases growth of in drivers the revenue compared bucket asset-based

along revenue. So we with the will see toward a mix little of course of bit comes asset-based which cost more

why we not and in asset-based towards is on of direct flow-through weighted bit remarks the That's a sub-base in closer towards and again that prepared to margin of little kind subscription-based to revenue low the XXXX growth of So than the as more the highlighted bottomline. seeing in a and are probably some double blended is we digits challenges those the asset-base. rate

Peter Heckmann

did non-GAAP XX.X%? And rate you tax are Okay. then the XXXX, was you that that using in say

Pete D'Arrigo

XXXX. is rate XXXX yes, tax The in XX.X%, same and

Peter Heckmann

Okay.

So for queue. that's XXXX back will get Thank I well, use you. the in okay. as

Bill Crager

Thanks Yes. Peter.

Operator

Chris take Shutler ahead. Please at question our will We from William Blair. next go

Chris Shutler

Good Hi afternoon. guys.

first, So having a be guess maybe have an you on leadership now team interim still the tag. and I executive would bill, the I decision. thought update there by would

Bill Crager

and succession, conversation with have very working very I with very deliberate of them, our with respect being good Chris. Thanks Board Directors they closely deliberate are been process.

further the company hands,. an information, make is announcement is but will as note We as thing good soon very to the have we important that

We the company. and to company lead the drive continue

with clients are more more and our and supporting closely, opportunity collaborating execution our for our I would us think we I investment of supporting we wellness say, really who the and and supporting are creating are more vision. Board,

very disciplined being and in remains So it process is that Board a the process.

Chris Shutler

it. Got Okay.

felt of were back just in versus headwinds Yodlee see, growth. the half digit low what XXXX? were Could experiencing on the reiterate incremental the you you single what Let's you

Bill Crager

Yes.

Chris. to will But this. more environment three-fold. to highlighted at you that competitive are That's and And data know, business analytics become has One really, them. one. renewal contract. our So keeping renewal have reduced I add but pretty a I high, is they rates are Stuart color the we

delivering implementation. more support The other of in and services more clients. Yodlee into component are is our solution reduction There that we the is wealth to professional a integrated Envestnet's the

FinTech end and year. that good And U.K. banking in an And of so headwind of market. of the a had a a that prepared in has U.K. have the bit U.K., the They ability component an impact. at weren't lot bit last our clients we a that we it's has to open transition the particular necessarily that, as in presence headwind U.K. the over in a And with have that market. the of our little of been to, environment

that provide? any Stuart, would But color you

Stuart DePina

Yes.

the thing is only I a little Bill, patterns. of that, add in growth elaborate probably think that, to more to bit just I terms our would

done, the activity frankly of their actively have where Clearly, are we getting of a we advisor years there heavily financial manage stride We lot and and asset Yodlee tools outputs two have is more bringing lot for and over we course the the that just effectively. to in wealth. and that invested market helps have we them progress beyond owned since support recognizing last that's made universe a four we that have to

is we substantial are recognizing as analytics. we opportunity. of not where areas, there have And amount payments those been active in a been have in credit that areas and and But

services. said from standpoint, professional add about on am what going Bill So I to that to

other on models very been with institutions, professional profession the to of support-based with marketplace and go clients, course do to those our lot of We that environment firms working of very, the with customize firms over our it of kind deployment large traditional those financial want firms offers those it's are with to heavy have the a more clients been subscription-based who outside as FinTech model ability the services working themselves. the have of into for financial a shifting to our as

tools more capture deploying trying them and for are are to and deployed we market have share. We

and a bit you more firms. seeing will, of in So FinTech will, more if being we market share, lot offering opportunistic those are grab with of from because standpoint, that a ecosystem if we to is if the are shift, a a you

you some So that's we on probably offsetting, if will terms putting part would is coverage, to are of more That's revenue add in element at pressure our I rates, what our some guess, if today. least, market mentioned what are XXXX. the the growth in trying Bill will, in recognize I rates putting of deals probably to we just growth of other you are, or that

Bill Crager

And how Stuart things one in very progress that platform space. in developers made of FinTech we encouraged will compete where we that and be are we I to, both by able and the the will that

there in And so future, the all that's Chris. out that

we that that. adoption as cycle, then we are look cycle the growth at our year, and got a in to have we So as realize will rates got an you help we we deploying successful have sales restore know

Chris Shutler

Okay. lastly, Yodlee But maybe business do I And the sort now changing? you Yodlee, one owning from I there more owning of scraping. those Visa And move ask of questions. specifically? wealth away is just towards the Plaid, you see accelerated be screen KPIs topic think an would back of then are reason going prior and with would Thanks. with the And the benefits of main what feel for on that same do

going the there less maybe is all data clean? scrubbing the work So that get the any it there takes and for comments to data So the all be to need road great. down would

Bill Crager

I do the that reconciliation think that's think we cleanup, Because chassis data extraordinary I levered And a very and reconciliation and to done rates that we two-fold. the investment as aggregated And environment. the have have bring to mid-XX%. has work platform kind that is and data do the to we competitively Envestnet optimize And the all of on value. that the Yes. at advantaged wealth look XX%-something from accounts differentiated up process

leveraging work that again are so done been reconciliation. we And Envestnet do infrastructure and that has the to

services different through out can and be then pumped then cloud all services then, that utilized that based micro APIs applications. data to All be that in of to sits

an part announcement in conference reconciled of Those highly dataset made example that are are to of an we fall and ecosystem our the we platform, at client. the IMPACT FinApps Schwab's through delivered which now last taking the use Yodlee Envestnet Let's MoneyGuide FinApps. into

absolutely a or working ecosystem that great and that's process in example wealth So the of is business. how optimized

we we notable As partnership available data is announced I with are And that business our partnerships credit for to at continue our Equifax continue evaluate quarter opportunities other to and to Yodlee from the last the a Stuart and business. team other that look standpoint.

I or know if to But Stuart, any don't you want other to add color comments any that?

Stuart DePina

have I to well. don't add think I as much

I you all think those covered relationships.

Bill Crager

Okay. Good.

Chris Shutler

All Thank you. right.

Bill Crager

Chris. Thanks

Operator

will our Chris from we Sandler. And Please Donat go take question now next at Piper ahead.

Chris Donat

for Bill. us aggregators you, is, can and historical expect from do I mid seems One to I third-party think wanted sort there you you being of financial business, anything? if them? on it implication of from it is the single these data and do And sense grow Does if bilateral financial changed to heard that the us what JPMorgan, I agreement don't you of change afternoon. data any bilateral bilateral of critical side know just one what's but you to give somewhat analytic ask question. of wondering am of another Good digits. persuaded give like agreement, I taking a the years with anyway, just if that think Yodlee us mentioned two-part around other can kind there expect Thanks you over them, is then the was let But I implications my time? When agreements? ago agreements? guess you the sort I sort context I JPMorgan because any questions. know

Bill Crager

the an think question a important and going be I believe, by we materially. it's change will utilized question and the is then Chris, way And institutions, No. collected great it's because financial to data

So the use. very progressive JPMorgan is I announcement data around think that

very standpoint it's kind a validation the platform And from so are JPMorgan, standards they the last that connectivity high of that to ability has. unilateral use believe, the point some to I create and believe, the I close account protected in our it in update and in a and JPMorgan that Dimon that a way earnings Jamie exclusive, again, off of been about aggregators and XXXX. JPMorgan is data that point, and to aggregation Yodlee the serve to turn privacy JPMorgan, at that's again, standards the are they announced I have think,

system beginning ecosystem with is that enable this going all new providers and data institutions connect to for is So financial utilized data highway way new a by the the of really firms. a is

there so that same JPMorgan that process. been are and here. other leader has notable it's a I firms again, think And that important in But

about or comment Stuart, any that? update

Stuart DePina

of Yes. I things. would add a couple

trend announcing the a of this, by standpoint, we First agreements, sights over do marketplace. finish in of of we driven here. will all, But is and a where actually those in lot have over that from some And a are really and we several literally months. dozen factors other like some line of agreements took course the several next

are truly of one regulated, which, sentence. biggest only period, Yodlee, we, in of this aggregator end regulated, who space the is The data

our privacy monitor have terms of in substantial We do security. what who regulatory actions bodies, we and federal, and

primarily institutions, our In banks. with. partner we against at individual a basis security We privacy regard, large and XXX financial federal the audits on have and with are that the annual and an from systems, perspective, we level, with the both then that institutions state aligned level platforms

a a ecosystem, with if from look of, as that core our that sense. the us partner will, that I in would conversations of sense aligned data know at look in real make at we elements the the institutions that and point this, into we go and you all they financial movement So in they are because us,

so And element. one that's

reach from doing new simple out come occurrence. our and years a our reach, back I think the by we for in is, should regulated over being been say, XX isn't would another aspect I way, been I the call have we because what have and marketplace

our so time. as We been, quite business, founders talk ago They for medium when and some adapting have both for this small infrastructure. we and us been ecosystem, interfaces when have the have are the access got heard this the have years working kind we data. have XX,XXX-plus and to for they capabilities and of There last building of you business of we who who in team don't threshold and large and XX institutions, to or automated Bill many But the sized have different been that have many earlier, environment Bill out years don't. built the crossed from APIs

at with you as will, being, context us partner to that look in they So as well. if them

us why reason So that's of as the and gravitating well. the institutions part financial are towards migrating

thing aggregation, would long world certainly say value to of of last add of key. legacy recognized platform the and that components It's the we these a institutions I use our because that the a that of then a has critical the value-added terms to a partners have financial able built critical But that. element period financial is been can for manage and having is, consumer and And their we the they the to very in come organization, over institution of own element is relationships aggregation time. things

serve and help that added then the have ability we and their get manage enrich data tools institutions we and the better. to to So customers the create analytics

There are deployed it say case. broadly different the And components would that part a that are it more would there and more per us. say into of we retail the does those the Chase the institution to gravitating from probably because these and question, economics? embracing puts is deeply So banks side of banks bomb in, the kind side. that with se, to we answer but in going getting integrated use aren't terms, I impact last others really and I are your are are the the broader

lots different large lot is are pockets banks. of that of with So a working there we the

economics aren't upside. the reach answer as more within much are institution the would as are unit changing, changing giving which question. how So the us I the That's

Chris Donat

can I Got anyway. And the think at it. Stuart. questions try you of the Thanks I asking much very answer, risk it don't will that

Bill Crager

Sure.

Chris Donat

-- you know of out anything senators Commission by were to say Federal two I Or it Congress for for put one? singled You guys there a Is investigation. Trade don't how a asking can on that member and

Bill Crager

obviously we ensure that that process being to to of any being and very and our to of and the as questions letter understanding are customers proper most as know, conditions published have have have. are they consumers. provider, really those centered conditions, a are the and those and it's the you utilized. the the to they pretty Chris, terms a with how questions comprehensive responsive And conditions and commission is that up data received around And us been a terms consumer terms understanding Yes. lawmakers BXB that and

having they a again, with So that. lawmakers about are conversation

with do individual And what to an data has issue of de-identified. data. do is really identification others the we is The

end instituted believe think of has it aggressive the data data, and Envestnet I what goes And in from States of protecting standard process. a with data So an personal to there from built Act, national we regulation And standard. or is the oversight data de-identification the which Consumer single standpoint, here and are the we what we we United done that's and in the at is, and many individual's isn't CCPA, just non-personal identification. the on most a complying year California Privacy believe the

So we having are conversation engaged Washington. with

I goes that think of is lots there it. education into

I these end to conversations. of having good be the day, think the it's at

it's to that towards driving think I standard. good a be

think the for. that consumer. to and standards continuing that's advocate and push will help industry we standards are And help certainly the I will something

Chris Donat

and very Thanks much it. Got Bill Stuart.

Operator

Instructions]. [Operator

our take next Please David from go will Grossman at ahead. We Stifel. question

David Grossman

Thank you. Good afternoon.

getting you to certain back just you have could answered extent perhaps this. just most But I the So all I think Yodlee, questions of anchor of to have.

of You roll to I of normalize that rate am and business get business some And growth my these of talked when the just have when a factors timing also to that the around, trying head some headwinds. that should either start off starting but tailwind of business? about the growth lot accelerate or

Bill Crager

with to speak Good David. Sure you.

analytics was business. will some through develop to we we in So beginning I indicate, mid-year some began last it's Jud as year, of and going And that to had ask are again to We guess that things innovative on Stuart to who and I we done, portal then the there. our was on When our this decision indicated strain data is European since growth update face we some it regulation are headwinds. coming space. we services FinTech rate. then business it created U.K. implementing really David, in those, to financial our a to you for our large was of are published use have the a professional business take developers institutions. the they overall and reduce What

We are is agreements place of large putting with a good these in financial The that. institutions. Chase JPMorgan example

analytic on progress again the We that to Stuart front. are speak you making will

rate deeply market. of integrating improving We and data the reconciliation aggregated wealth our are in more

in decisions business. in made it that So I resumed and sure there. business of concentrate those begin make to all way long term will we of that to things environment, that of was were required we that have growth strong grower a Yodlee it the that environmental But think things couple occurring couple a

Stuart?

David Grossman

Stuart growth some that of headwinds those roll of to some adds is start enough growth this kind out? Bill, we initiatives would doe you stuff when growth when before in a comments, And rate? normalized these the all supersede rate settles Actually that his then up, diminish that all view, normalized when of what more

Bill Crager

I So we XXXX growth guidance, business. subscription are indicating in low think the our Yodlee in for in single

begin year, this think back half through. the And traction. a of going towards we are are that of year is we get we working the of to anticipating to some kind So

traction also part begin We year. with are our latter to relationship the going Equifax see the toward of kind to of gain

story. XXXX David, a is I think this So

peers the are. that ahead work business the that of doing the our overall a has growth I we business objectives rate data to are our the to as think strong help that that to that maintain, positions we contributes grower, Envestnet be

you more Stuart, elaborate and of than And again, I be specific kind can am.

Stuart DePina

your on we headwinds we headwinds business of just we have call where is maybe more would the but see probably part word I would which isn't characterize that analytics of to use more I so The which I headwinds terms speak. in to set we say, have right the question, that the of bar, and Yes. never that really the headwinds.

and We have of to that and to not fact gaining bit in tailwind to offering the specifically has platform the that a are of our application bottleneck seeing easily companies integrate FinTech had into gain more which whatever for our been the want sense of adoption solution deliver. more us adoption that enable opportunity they feel

developer use, APIs platform whether which it's We refer credits, set that intelligent otherwise. we of payments, to any phrase firm is deploy experience, the or this a can to wealth their use

us working is So of on we call, really that if a relationships in will, I use as banks able would Plaid you to, in been if they quarter's have primarily in those candor but for bad get has bit been learned lot here bottleneck last a better were And will of to were we because I what honestly for mentioned a and with our years Yodlee behind last we course you building will, full service, view, a of in of the really over from XG, analogy, that that. at to anyway, my on tell it we is I working have and lack you delivering technology. large were the XX term,

we we to adopted, a saw come you bit will really And they to marketplace have watched more modern done. But have XG Plaid which if and was what solution with a and able was platform.

to to only impactful place. are It's in our platform So be that's those that in have certain channels. in we we going that believe not modified and certainly revolving particular for we more frankly have believe but credit, clients solution in areas the adopted wealth, mimic we a

ball having having So months more in is eight share space and Plaid grew market been a has to to the XX as last really I that that kind say payments the XX primarily of technology. the behind planted the modern for would much themselves

we room some room. knew that up had we that we believe We made to make and up

the now that that So we through think bottleneck. at I breaking are

distribution way that think we but conversation other and at traditional we are long and in in capture credits, over of we you as telling a our would also more channels, market think more wealth now to and that course further the get we if say, the you adoption. I are that's XX of, that space, will, payments, position only months, So we share, not AI XX

rate growth a a I probably like double growth that digit believe And a also low that we normalized more rate. digit would looks growth say double rate. It's

As as of when there, up be get be when when market going because will That's matures. that going we things the the see am a to to we play forecast how that we term. to to is not over lot things long I how

phone specific a the doing building analytics we in wealth acquisition bore are management some you channel that as wealth as of of retail those by supplement taking well using to for what MoneyGuide the that I I well firms outside deal doing wealth. aware won't are in think we through is But interested what components obviously everyone our and side. such the answering other banks the capabilities we tools. capabilities and wealth really non-wealth the segment are are of of question, some the as lot of are a blocks on lot that doing I things because blocks we on of the terms with In am

on whether or financial into or raises, better get effective mortgage they to spending to support them more come perspective decisions as opportunities a they health them there spending if can capabilities kind into help some creating so better give that's insurance bridge, that opportunities bridge very capabilities that you dashboards pattern, but And the or are are their incremental advisor consumer credit end are non-traditional gets them really for have to insights there insurance frankly for that's habits, life challenging credit putting retail we they perspective, to what's perspective. for of their should and us understand will or perspective offerings, dollars get for otherwise, yet from as whether a to a where where them credits

ultimately we gives that are exchange. for the personal areas are technology that decisions. I analytics are potential insurance firms are to and more And we see for lot a call wealth in we doing themselves. into can wealth you them an we But are non-traditional their have who to are that lot understand they to their where are way around meaningful have and aware investors access they supplement we what to to into for regardless them will, more those of technology of channel help careers think to you that we out money an they doing help they the they a consumer economic in where ability money can are with looking our advisor, whether believe to what daily ecosystem, action get better don't working best we more more the insights an the we advisors provide next a through insights life consumers wealth are leveraging Envestnet what if advance, have And of or drive clients starting make and

So it I leave will at there.

David Grossman

just useful one Thanks Very and insight. have follow-up. I very for explanation. much that that

you market more So in it and said equilibrium, what the gating has item of platform you an said, is to there? getting context standpoint a the you from to more back really is of awareness. right technology now Or I kind the channels think get

will? want you of near So make so term, factory I where sure just to between I understand, if is kind gating the distinguishing

Stuart DePina

heavy the the factor a primarily. us And working of, by financial was Yodlee banks professional with lack kind large better that We term. them a financial and question, some was Bill, just To for built was of for worked take platform. answer it roll, that. a gating slow of had institutions I services the with will implementation. you who one

what to evolve. was we the and platform So needed enhance it

have was we that So the addressed. bottleneck that

David Grossman

going think was Stuart. forward, Okay. But question, I the

correctly. feel I really more heard is the to it you right. gating want accelerating where distribution, be like you if And I got and am So the you understanding factor awareness if market you you platform have now,

Stuart DePina

Yes.

David Grossman

Fair much. you right. very All point. Thank Yes.

Bill Crager

David. you Thank questions. Good Yes.

Operator

James. will take Please Raymond next ahead. go O'Shaughnessy our at We Patrick from question

Patrick O'Shaughnessy

Hi Good afternoon.

relative of driving quarter the management cost going last for first Can there? to increasing? revenues increase? a talk So suggests XXXX going share of tick quarter that asset-based Pete, to What's the what's the to of on is the revenue you decent in about up third-party kind of guide XXXX. Is amount that's

Pete D'Arrigo

As increase right. I all think I total, of the changing the don't But [indiscernible], think that it's a percentage dramatically.

Patrick O'Shaughnessy

for about data Okay. to obviously Maybe company. the analytics I obviously the have of pretty after important wealth a spent we then call. will time And talking obvious still follow-up reasons. and the with is you segment But lot

the revenue and exchanges a and you have on quarters your you are that question a of areas about opportunity Can realize insurance and belt? the timeline launched now So opportunity? that long credit How these term have that in talk under about side. you you couple thinking the to

Bill Crager

are hope you I doing Patrick. Thanks well.

are there a are solution insurers the advisor it. actually shelf to important to these and are off back where We platforms. a a put in proposal. banks transactions. are into shelves And and pretty that pick comprehensive help is these on couple execute is able They a They are excited about tied the elements that One of I are not that recognize. think product just us

of to it plan, really up product for growth optimizing have transact have advisory and so can do execution all ability plan back and comprehensive a come planning. data we that are the and We choice go then the the

solution. of be elements solution be the fees of would revenue are themselves providers the are to part eye to universe of our license an So providing keep on

we a from a those access fee, and on standpoint, sale especially rev solutions, solutions. share on a backed have platform certain doing security advisor many hit We program are service to as of firms, have will the then lending to these

highlighted insurance them growing each providers. with a solution adoption, components. comprehensive suite, have very solution are the and beginning credit they for individual out, I platform as to thought of firms well are they advisory Patrick, a are So network Think and product utilize that they these of

going opportunities other they on where needs are add that would clients part in and of from the We banks and syndicate credit of we we exchange, that to banks. currently it to feedback that banks have would of probably the be first be our syndicate. profile pursue on working with. based see a the to the neglected four second There I banks are

unified So for we of future engine. see this instrumental these the as advice

and that an it things. insignificant and an time is to investment of not of build other is not insignificant The thing kind realize these it's workload resources to

today. platforms those the financial advantaged. Envestnet into in a integrated are these planning and they are for offer I distinct competitively pieces very platform The sit advantage leading my market the And how very Envestnet and that competitive is so, engine mind, all fact think under connected,

Patrick O'Shaughnessy

Thank you. Great.

Bill Crager

Patrick. Thanks

Operator

right. All

Cuddy now question take will We at from JPMorgan. last Will our

Will Cuddy

follow-up. RIA second, partnerships in in just and but know bit with you through for the Thanks And Dynasty? more talk it bit firms there rationale like for little to is relationships and First, the more the could about early more management could this us pursue little you a services wealth a Envestnet investment are firms? opportunities advisory exchange? give minority I the on maybe

Bill Crager

for a It's chosen Will. period question. bring run top time, important independent understand Dynasty, who that and And advisors to I Yes. that partner. a at It's team this Penney, environment long think and super great space think ability that we very a are about. a infrastructure work Shirl we look, recruit I respected have they done. Thanks have them been Swenson, their Edward great something and to established excited that extraordinary really of we It's has

to from believe environment advisor, RIA seeking we we acquire, is to the say, a so of both to to grow, And to an transition inorganically. only that network, and And that. it a organically captive recognize merge marketplace is itself not and

tremendous platform for RIA. has a Envestnet engine growth that believe organic traditionally We been the great

giving compliant level that service the they number to clients the Envestnet maintaining, values can and We and and clients be and the and have of to are help cost technology longer platform. at helped you see a them tools help their engage more new grow, support them to them on their the asset the reduce

to doing a with that in advice which capital grow, them really make we interested So suite investment very to businesses again are them other we help merge help exchange business are provide with And we their business. to analytics firms to providing are helps or RIA utilizing of advisor helping who firms their service the grow tool.

of outsourced services. CFO the we exchange, and access providing also some We service to as are will part also ultimately provide marketing services

our advisor and by services the setting very acquisitions their more, in they their and firms of environment broker-dealer our their RIA this have to into it at as grow are interested the I advisors it, for As place thing up and top teams. partners folding outside for isn't who More that's interested obvious ability in really to well and market are making network exchange. an but look exclusive

the so as now and a broker-dealers, clients, that. standpoint enabler it it grow. technology as really an believe, banks service And again, of our We advice advisor helps a exchange is it do and business doing RIA from well we I And standpoint. are from

Will Cuddy

it. Got Thank Bill. you

Bill Crager

Thank you Will.

Operator

Crager Bill will This over turn concludes or go now Please ahead. for question-and-answer today's any conference comments. session. the closing I to additional

Bill Crager

much you appreciate and in of afternoon forward joining the your are very this we to We and next to looking really really you speaking Envestnet Thank we support everybody. quarter. appreciate you

has I and you evening. thank So a everybody hope good

Operator

you today's concludes call. Thank your This participation. now for

You may disconnect

Envestnet (ENV) 21 Feb 202019 Q4 Earnings call transcript