ENV - Earnings call transcript Q1 2021

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Operator

Good day, everyone, and welcome to the Envestnet First Quarter 2021 Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded. At this time, I would like to turn the conference over to Ms. Stephanie Daukus, Investor Relations. Thank you. ahead. go Please

Stephanie Daukus

good Bill and Chief me today's on Officer. Thank Chief afternoon. Executive are Crager, D'Arrigo, Officer call you, With and Financial Pete

Our the Investor presentation section. release, can earnings found Relations first Form be under associated X-K supplemental envestnet.com, at quarter XXXX and press

are you call, the should undue on them. comments not be of future forward-looking information. discussing put During guarantees certain performance will Such we not and, therefore, reliance

current filings our be our will information. certain more press and will statements, developments. month be All during to release forward-looking discussing website. SEC disclosures be at business being for replay related of with to also We are to updated material information. Please risk and made will non-GAAP the non-GAAP is call for required the on associated webcast on not reflect information time and our financial for one subsequent remarks refer factors call live call available This the and

questions remarks. our take Bill. We prepared to I With will the over will after turn call that,

Bill Crager

and solutions and speaking intelligent thank be today. deepest life. is actionable joining It you, wellness, the seamless for of an for everyone, to connecting data, technology Stephanie is set financial you. good ecosystem to Envestnet with enable you, building the financial Thank

company. includes We'll on market more we much time are believe, progress for strong We first, next, to the the solutions; This and Pete will advisors engagement we creating ecosystem wellness; the we growth our the highlight to clients' Pete to for that modernizing will your Today, I our it we uniquely solutions market; enables ultimately execute addressable the for faster toward plan scale finally, the organizational for profitability are see to to first value the and second, strategy. the and, we expansion the how I'll opening performance looking progress I and making following; spend we This company's we're drive platform do marketplace quarter highlight to and this, then investors. on discuss for more developers. financial positioned bring investing forward financial to the opportunity the significant to higher and greater making. the acceleration. then we're actionable digital highlight that see questions. in providers the are capturing of connect and will existing revenue opportunities questions and growth,

So let's start.

Let's making. start progress with the that we're

as volumes continued value Envestnet performance. cash extraordinary provider industry. for activity quarter, ecosystem tools network the to and can strong that decision another? seek long-term impact these we data ecosystem. is the financial and questions people optimize know financial the technology decisions to to the clients the financial financial decisions? making? answering they and high provides the How executed connected industry-leading of ecosystem people and life people How solutions to their spend We does that to with first intelligent of the strategic the The financial our consumers. This an become During of one impact achieve. from is an confident to financial power goals wellness position daily access are in deliver for an more advanced our wellness We they're intelligence proposition the do How which

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that our of addressable to and advisor able Savings answers and opens the all our brings accounts relationships existing Wealth the this connected. all see is consumer to the intelligently capabilities execute, & of Harvest The leverages market. acquisition questions, You of Technologies bank's bank

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million quarter, on-boarded in XX the conversions. XX trade During billion accounts million day. XXX We orders, executed each aggregated service we

scale possibility up our the We demands ago. meeting the while years companies, just what ahead. X,XXX us over Leveraging conveys the of and offer to do, of have companies enables from relationships what's is also with of and solutions X,XXX we extend growing we services clients, the which three

investors we some utilizing of and we scale I on presented accelerators. on quarter. revenue blocks time essential ecosystem. wellness are foundational We This is have growth built to to growth executing building financial key spend to last the the want the strategy

to areas three have our of revenue We accelerate opportunity. focus

more on the capturing our market already platform. addressable is resides focus first of that Our

of their more with their Envestnet's the want a goals, approach, business. long-term made accounts case We needs framework going to important meet benefit while managed portfolios quarter, advantage to our and in results this spotlight to identified of on areas such of to we client Direct depth doing assets, fraction to a Asset-based solutions these In and note. from likely have is deeper. accounts engage post A And bank solutions users toward advisors their organization growth XX,XXX actionable asset just within than solutions and our their these have The advisors is transitioning now assets. accounts. brokerage these an helped accelerating has double-digit They opportunity. as more which Indexing of XXX,XXX accounts. captive powerful Impact to But for more that rates a are a about the identify recommendation market strong end-to-end account large brokerage growth. to them this we which I of are portfolios. base, them and helped of we scope to ours other data accounts, important manage use our the focus managed small is our clients. part representing the $XX this current provide as provides than changes engaged then continued their Overlay, first customers which over and managed billion accessing advisors We tools insights to actionable objectives portfolios of goal-aligned, achieve push engine, platforms. to introduced current to most of bank important and the The are solutions addressable focused the have our with account inside data we opportunity can how the across important

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execute back we Opportunities, extrapolate large to Trust, Portfolios, more how growth and apparent our rep like can becomes Insurance and use a on clients near-term Impact, Envestnet. accelerator Tax more and to Accounts, Fund advise customers, firms Index, and Brokerage beyond, Credit Overlay, for benefit for opportunity attainable we opportunity As step create cases, to this Strategist Direct it Managed and

growth the on the largest questions the seamlessly marketplace, the by execution from second to of engagement focus solution consumers' advisors Our industry. of financial is network modernizing the pressing connecting digital

our fragmented, we'll accessible to and real-time opportunities, the that all execute a services And a goals. We the and become intelligence for planning as and client infrastructure anywhere are make more It threads portal of to are advisors. all we lives solutions we becomes financial become the near their tools confident financial the their in actionable These advisors. connects the to to these are the and leading answer is client help more portal The To portal and the seamlessly hub advisors industry. questions client advisors superpower and for storefront on have. to engagement. exchanges experience digital achieve clients connecting more consumer's offerings launching long-term game-changing their for from engagement

every to platform that trading Envestnet's rolling We best channel. a all capabilities together are new across of leading of also out brings the advisors

universe. will launch more coming to providers ecosystem entirety will secondly, us complete for announced choice Envestnet. the wellness the market of quarters, will And clients. so Envestnet's third-party fintech of third and capabilities strategy power we to enable are developers. for MoneyGuide universe the solution people of financial financial open is distribution planning things. it up our data And embedded for and the we the greater APIs to open This growth of and more expansion, to solutions drive will finance array quarter, will ecosystem greater engine, industry. and over set This which of focus providers open our creating enabling wellness APIs to ecosystem The of Envestnet of one our our of two marketplaces. opens do bring to more past it for growth the will and One, This platform APIs our for the financial a

Here's progress. organizational update a on brief

light on our a is business, immense moment to activity Across of Let shine me team. take elevated. effort Envestnet a the the

We're remotely. our on making working are We vision. progress

proud and team our takes bring making of power important and are It clients. happen, and am we all We an commitment driven achieve aligned that we forward. work our to And integrating Envestnet The goals. purpose. to are The are of moving of is this the discipline organization doing. I to by the is

on leaders we new ahead. and last the including and capitalize we We've capabilities to new to opportunity Chief new we a across our a have quarter. Officer Market leadership operate key across the posted Intelligence as a continue the make organization large our new that progress. platform and streamlined sharpen talent business, Data have align onboarded Head and organization. We This see enhanced faster now the Marketing Officer, We strong the organization enhanced Chief and a results quarter, as to to more of

comments closing and building of but set deepest life. financial solutions turn a of the is actionable lead will financial me support the in the connecting enable and every it to I'll way. with Envestnet wellness, ecosystem over intelligent to the technology, for data, be back We let industry some moment, please step Pete. seamless an

Pete D'Arrigo

you, Thank update call joining our quarter our second Bill. results, accelerated last Thank I'll discussed progress outlook for and everybody, quarter this on we call. our our afternoon. an for the the review investments the the you, year and on full first on provide review

were And guidance was of $XX.X earnings our year, as quarter first primarily $X.XX, revenue. first was strong this higher million, platform updating was Wealth XX% for expectations. strong per the forward quarter while utilization, quarter Adjusted guidance Data the Our was Recurring of share for quarter the we're follows. above by than driven the outperformed full the first the higher XXXX. quarter results Adjusted revenue and EBITDA XX% line quarter expectations. $X.XX revenue segment from our revenue and with growth. $XXX and quarter. XX% our analytics adjusted to than the of both second in Adjusted was the exceeded higher largely looking million, XXXX,

revenue, be For adjusted XX% quarter; business in anticipate million the revenues as million EPS higher $XX be million, expect market share. first be million, our $X.XX higher, expenses to to QX; and second X% to from to to $X.XX quarter, beginning strong XX% and of EBITDA we and pre-COVID XXXX, between per we in to $XXX benefits as the XX% $XX appreciation subscription-based between some restore flows up $XXX over to adjusted and the

and a expect customers, will increase EBITDA bank may We the add between and early with For and Harvest have and be greater adjusted Harvest which in between our expected and $XXX to has Harvest in closed April, XXXX a of with as to billion, elevates we million; current $X.XX. up to approach increase revenue be year, an revenues in XX%; acquisition a billion in adjusted basis. $X.XX million breakeven we To to pipeline well. on expectations, confidence and strong $X.XXX XX% the full context, stand-alone EPS $XXX that potential EBITDA be $X.XXX between

support year, operations of channels, offset it's our But increase, banking initiatives EBITDA accelerating also that within will this a to to in revenue bank digital XXXX. to and for million $X We growth. an their potentially opportunity corresponding million see revenue $X be difference around Harvest's

these to year our we investments, marketing we expect growth other ramp people as we activity. and product quarter, ramped the anticipated QX. investments up first accelerated begin There add the go-to-market Turning of in will see we last we will quarter, expense in up and which sales throughout engineering, and introduced hiring and team, have a wasn't our in but recruiting and that resources lot

to And for future to account progress roughly expect hiring additional provide operating during the of XXXX. information investments continue earnings calls. in million We expect related $XX to we to expense

technology and $XX are million, those resources. marketing go-to-market $XX $XX that and roughly resources sales to support initiatives related expenses to of reminder, activities a roughly and As of million million

expect half financial thereafter investments The markets profitability. addressable expect solutions to we a clients XXXX, client incremental of generate second strengthening discussed, continue portfolio to their investor captive engagement the should greater and value depth to total increased more of proposition By higher growth we growing existing the relationships expands adoption elevates as revenue and and and clients. and our implications driving our of powerful be market addressable access to addressable market. the be realizing these better, Bill ecosystem, create unlock advisors we revenues to existing between we within with which base, our as our to XXXX begin in Additionally, increase streamlined

key As the the metrics we performance marketplace evolves, are report. updating we

the managers, this clients, providers, While carriers, count insurance add custodians in ways mentioned be such the do We but a future. focus are of will our as continue to that will network. value are lenders and of ecosystem, internally of participants business. on which of advisors, X,XXX significant we accounts emphasizing fintech we does we and number as with wider assets thousands firms These important, that not we earlier the companies asset the service variety the and product measure the part are firms, growing connectedness

providing coming We over contributors greater ecosystem detail will the quarters. on be

balance cash XXXX We outstanding the sheet. two with to in million. March of of due in Turning and debt ended The XXXX. notes million and consists debt of $XXX.X tranches $XXX convertible

end remarks. facility back credit ratio you leverage as Bill of Thank Our X.X his for March support and of times XX, will net was and March $XXX of million your to again EBITDA. revolving undrawn was closing our I at the Envestnet, it turn for

Bill Crager

AI-powered our through across positioned with map Thank than a you, billion makes a wellness that financial wellness market future our and a solutions, a for the to Pete. addressable enable, from their future provide Envestnet, are provider hyper-personalized fully engagement ecosystem, connecting team to financial more every daily their differentiated financial With Envestnet's clients everyone, is goals. architecture, to a into comprehensive wellness technology, $XX and stack platform. data enables a analytics, future health, a we management uniquely their fully which ecosystem of is the of reality financial other financial leaned enabled advisors recommendations, total people's with road future, view encompassing connected, wealth our long-term as financial open lives planning

are We results. strong consistently posting

our leveraging scale. are We

winning and we a the financial We capabilities across wellness solutions driven strategy. clear and by are have set industry-leading

capabilities We and at are have the the focused the right team investing and in we opportunities. right right

the of happy With for questions. and and that, you making opportunity Summit. for details weeks. value is and in open be I Thank to about our your employees will am Before about Both will be this us. this our front Investor our and all timing I'm logistics time life be excited that events want take stakeholders, be the Pete Also questions, of about the and in Day are will progress excited for creating Envestnet. of inaugural virtual financial investors. support consumers, there for the in your more Envestnet coming you in again I intelligent June. we year and highlight afternoon. your hosting we'll to Thank I June, Adviser advisors,

Operator

questions with Securities. the Instructions] [Operator first with question. your Devin Our line Ryan JMP proceed Please of come from

Devin Ryan

taking afternoon. for Good Hey. the Thanks questions.

Bill Crager

you? Hey, Devin. How are

Devin Ryan

overview. great. a just they related to raised Yodlee, guess question detailed keep like and I start just looks billion higher moving [indiscernible] watching doing want on Appreciate I'm I it the the $XX to capital, the obviously, numbers valuation market, higher.

in valuations And but I businesses interest in so we're clearly, strong lot a Yodlee. and like elevated of of backdrop valuations think a

And you'll business? so more for kind ways that point to be thought of valuation of or that put just business more strong about interest demand I'm could kind of strong that just separated such that of curious sure where kind but such iterate and business thinking into type around you've on continue if of evolution in the given

Bill Crager

I'd one Envestnet I engine of comments, we really data recommendation talked we're Yes, absolutely, think on Yodlee, A these really I optimization, of utility in of Devin. a the platform advancing And data. is spotlight my the vision. And things our about the lot and to component space that of creating the it for generating across connectivity the how Envestnet. is in the and points the think,

So very to planning on platform a up utilize footprints the beginning basis matched long-term profound and that is have data our the data we really ways. transactions, Envestnet in the combination of Yodlee daily that accounts is daily MoneyGuide consumer investment with powerful in tracking the a around the we're

in business But advisors. night, feed into it optimization first or environment on our asset here total I And desktops cloud-based but our in we've of every we of and asset, think that's our beginning from D&A valuations the core We is are itself desktops you at it do. ecosystem market, our a continue really end a it's in but that's the out the optimized right that, at wealth business I drive employees for see take and recognizing to value And standpoint. the pricing than as same act tremendous And We and that a private us. time we we completely an the for from and one look exists that Yodlee, to will standpoint opportunity long custodial on past. of day, evidence the has point. feed feed. see the the the it's thing backdrop the valuation a valuation progress will more So just is a we just proposition, been data the it continues today. there for our see when Again, for the would shareholders, take that the the if the say that we business, on the and in of

Devin Ryan

that sounds exists how the of within to either I that, relationships? just kind of that kind Great a maybe just guys you seems how that, have capability. existing so Bill. And interesting transaction. of opportunity follow-up the within on pretty don't I And of opportunity acquisition, much. it's was relatively it I thought are tool then interesting like now digital for me. have curious color, products to a curious about present your of kind it value to newer you as just But pretty and easy appreciate And feeling smaller Thanks as relationships capabilities an that for of that way maybe to you rounding an out think of as this channel. about to you of It leverage this or kind Is into or came much right is opening the opportunistic, an account people just more and broader is kind kind bank suite obvious Harvest opportunity?

Bill Crager

us price capabilities Pete year that the EBITDA Yes. it set so significant purchase the I'm to offers standpoint. our very about of this value important into not but solutions, take of this from highlighted expense to expand transition our as we channel. bank suite us to a some we'll excited really the transaction, helps fuller note that

bank to address able and over accounts are at not accounts able And and So savings we've to all leaped address has. only have serve the bank, kind for account. that we the that now to long-term today a to that that begin planning account, mechanism and inside a saver connect a smaller savings seamlessly account savings we to investment plan their of goals helps within investment

the greatly really can with you So bank that with. to us, see we Harvest footprint can expands fiber the penetrate there, market provides the that

excited we're And very so about that.

your the suite hit offer question. that today can at in solutions on of of look Devin, bank we in kind Now you channel, that that

I bank. through savings accounts from Harvest, think comprehensive standpoint, the are the the together whether can our discretion full it's suite planning that platform, look the at to robo environment, offered tied to tool those through connected of tool capabilities the of note, or or trust on reporting environment, investment Harvest pieces Envestnet's bring important into the consumer for back wealth that a investment those the

to platform, do services Our there. who new to trust clients offer trust not have a enabling banks capability suitable is trust that

we're our automate tool, the data to able that and service have banks. that Yodlee, and, offer conversational We provide package course, of to bank helps to AI, channel the AI

encouraged As we from standpoint those leverage. There's footprint a we're are the by. able is data utilize together, there our as then something channel, pricing leverage of very so product that in we we kind that to and expand standpoint, bank tremendous pieces bring

Devin Ryan

Okay. Great.

Bill Crager

insurance that, Harvest, trust, different to those to other then neglect got we've one the platform around platform, the that it to an account opening extend I capability. brings to all us what kind And the consumer. stretches environments, didn't Harvest question; of But In want areas. brokerage, that an is account Devin, the all opening is important the with across

seamlessly advisor digitally to consumer costs lot our themselves. the open account. administration data open to accounts, an A pushed and to the of speed and that lowering back input through account consumer begins gets the comes opening So the

impact. I meaningful think it will have a

Devin Ryan

I'll it that. well. Well, there. really great. leave Do That's appreciate

Bill Crager

Devin. you, Thank

Operator

Thank you.

proceed line next with questions UBS. Kramm of with the come Please from your question. Alex Our

Alex Kramm

across guess So it But described way example way to gave Yes. detail sounded little guess the that and a intensive Hey, it. to I you good that of upselling, I came maybe and where process scale put giving terms I of one when the us examples lot evening, I'm it right investments and And upon are a of that the going this, examples what this? that But manual manpower, automatically do is, bit a everyone. is touch it you're you this I just like a to bank, of and of that's guess are because or to there. I ask, opportunities, scale say lot labor manual if you with lot how that I'm guess, take example - want in trying to hundred thousands this of is because tedious like there? very trying really to a this like quickly? to what you do do different need banks, very with

Bill Crager

absolutely. you. I to for Thank Good to doing the talk Yes, well. you're hope you question.

business, manual What to actually let's billion it's able very opportunity in we it, book bank data we work call at assets, them. engine there of the we've billion looked all. do recommendation do their $XX particular using for And brokerage opposite. able $XX opportunity our not is as in with that, been to for So particular $X billion of this to identify at quickly to we're that

value for to advisors able to from we've the it, September of reaching an month this to And servicing are tap is shoulder to accounts automating say; the and has every increased the uptake tool business then bank. from bank. able launched XXXX that that advisors all book able their month we been Their got those flows are XX% then The the through addressable since a September. bank on identify we're that total in of AI we for on proposition. market accounts very consistently, launched behalf it today of - hey, we to is the the So quickly,

a scaled highly That's it's extend use So case automated, offering. let highly me that. one but AI-driven just

we a We assets in back. little serve trillion $X.X Let more talk me broadly, today. step

cases building to brokerage around one managed of are use accounts. We That's them.

taxable use Another accounts. case,

able from firms, trillion, Inside very that, would headlines right. okay, captive tax is platform which the sized As we're that you on which one taxes, know, capital these only addressable of $X.X overlay; a which absolutely advisors, to market gains accounts. identify not the our benefit significantly days

marketing benefit at a our team capability X scale addressable yield captive this that alpha is to specialist in very call and In We you penetrate that that hey, We're a for are you. saying; automating market shoulder client and the a the able advisor, tax tapping I the to digital on is that would for the will deliver significant. connecting supplemental deck, we highlight existing would the little are a it's Page of automate to engine recommendation how use the kind those identify to to flipping this page that in the works to that be cases bit in get of But X, and client where spheres opportunity, just but slide, - current I'm slide, of relationships. then able we'll each connect billion opportunities each highlight platform to portal, will client And the and more deploy four that by lead consumers day day engage make tool, in, that of advisor our that derived to accounts. is be within our and of every investments benefit on our make recommendations deeply. what close XX the the their X last for a end clients. more this advancing been will million the that, recommendations believe, made years AI And the by the end engaging across with in recommendation set, would engine And I the data will could accelerating it we we to by help advisor, point investments we've making with Alex, the advisor, with their year, then, platform. advisors, the to be the highlight that year, to

Alex Kramm

That's great. Okay.

Yodlee, the And secondarily, maybe guess, just maybe give on, the I mute then data a Sorry, to just for call days. quick I us update want these you was whatever segment second. on analytics a or

quarters guess, you it's I flat, look missing here, bank business, at asset the here, right? maybe of the kind the legacy be on, last the and just may If anything three data management an fairly the too. update I areas, business few business, So fintech

flesh that better, you mentioned so for are out doing banks just think Thanks. that I us.

Bill Crager

turning had on in think the going our analytics we're contract down, soon, our to you - beginning with well. revenue the thank digitally high-growth our expected. biggest opportunities per for its is actively progress out had - banks. D&A good and higher that slightly analytics analytics that what hitting the was going so pricing - Yodlee flat headwinds, revenue really our a usage we're been than has again, a so phone, pretty business saw is just the especially corner in COVID. new institutions driven up during Yes. The around did a to business. not had We and institutions, that not the up. it's management the was the think consumers money given there's headwind, we space activity, business, so quarter, analytics were your Thanks, business. discovering rate will balances the anytime think had questions. the up; business come more a interacting first but are, financial rates we've consulting. Usership we in continued but D&A had D&A pricing had its big been area performed market we're that's so the business Financial was be usage quarter. and negative a mostly that is that good by make across Subscription restore But The finding very that challenge post-COVID, restore And Alex. from We some business your to It's sustained the offering, to fintech financial very quarter. good business high. institutions business, end We which solid, Again, fintechs. for resilient renewal far ahead, COVID competition The analytics

Alex Kramm

again. Thanks, Very good.

Bill Crager

Alex. thanks, Yes,

Operator

Thank you.

next question. proceed Our with the coming your with is of line Thind Jefferies. question Surinder from Please

Surinder Thind

Thank you.

Bill Crager

Surinder. Hey,

Surinder Thind

Hi, guys.

question bit Bill, that making just is first So are my the the of those you at investments. guess of I investments kind implications little a guys about least or

idea about maybe provide the you how with of clients? kind make terms clients feature for today as and are in explore idea to you an of into, receptivity making the to in platform you've the the newer maybe the waiting can dealing that's of it maybe new And update clients decision then enhancements? coming does the sense onboarding functionality So talk from coming versus to with onboard kind us the that, off or gotten hold on of of

Bill Crager

been of we goals, help say couple that we're serve, they're that's more blocks our near-term for impactful are from from we their and utilize the clients road data addressing the way the we banks near-term would all And standpoint, from relationship clients clients, teams technology. Envestnet Surinder, solution an grow large so about out the most ways more are largest meet our quarter, our excited our kind how of the I or to current the effort I the has standpoint, local broker-dealers together excited clients we have with in to a the that very unlock been the very time, RIA to feedback you And serve, now that Envestnet course, At and largest organization piece the Yes. the set roll issues opportunity deploying right same and and being pulled they're our for desktops technology positive. the be interface more a to will think universally, management user ahead. very near that's They're the I of of technology of next more within modernized client launching, received this The like toolset about we that that also will the their map. quarters that and over in that where portal. we that be while do that reach positive. is have headed - is term, Surinder, whether

going On that very a at about and powerful of been to very all a we that for enthusiastic understand clients technology how Day feedback it's you clients that have we're piece forward to The I'm and look Investor that positively has in incredibly technology something tremendous, our so we'll June, that. to much feel host are bringing the looking be our about.

Surinder Thind

back color at we in how where that step how a there would in near-term about there term. point, and any the kind to of to the activity Are context maybe the if look conversion describe you're like you provide or at kind take things terms take should can were fully point? was it. Got And out or we this and then that? just kind seeing of pre-COVID that back Just demand demand you at of there a upcoming the this of think we are near

Bill Crager

on the And I asset that dynamic has engaging flow, is Well, first flow, about - Yes. business is this the activity account of of has the credit to flow account the you and clients. advisors would adapted. remoteness fact which flow, the any as That the an when quarter. platform activity positive. very in to the that as face-to-face, absolute that belly advisors the significant that's so to the say lots are how the of quarter was was have account very period, net been new mean advisory the industry think I way so belly, the COVID working, advisor been strong

We new firms, continue onboard logos. new to

Envestnet used platforms to portal, I engagement continue firms the at know the portal, become are platform. to new competitive I firms because going know I that and engagement onto that we that Surinder. is the look specifically the client ultimately have to, transition will I the the Envestnet client new We that roll new that around legacy competitive past as clients. logos platforms from those pipeline, the we're firms in increase, believe platforms, and logo out do and activity talking

Surinder Thind

question. quick one then And Helpful.

you maybe relationship of update quarter revenues. and that kind terms that you can of of are relationship on in, any Equifax that the where in Now a provide kind we're generating

Bill Crager

Yes.

probably called 'XX, of So our that, Equifax don't calls bit Equifax. and credit the and very in right Flow about ago, I that been I Equifax with has It's little a spring of delay, hiatus the calls talked last Insights solution. would feel how say selling a launch But know, effective. QX a Cash ago, little we joint They mentioned solution. They're I released is pipeline. building that many caused bit three COVID a a

the minimum that Equifax beyond, minimum it with in in the top with We we begin and we will but 'XX, contribute to our have over them. will not believe contract beyond that in 'XX

the the from to in - punch we solution, build the our through to got we're is the market, account the have here response of in to minimum product good initial that revenue the So in contract. kind market,

Surinder Thind

it you. That's from Okay. Thank you.

Bill Crager

All right.

thank you very So much.

Operator

Thank you.

proceed line comes Peter Our your D.A. from Davidson. the of Heckmann with Please question questions. next with

Peter Heckmann

Hey. Good afternoon, everyone.

accompanying we one an just of Just a of group advisor the just Anything couple growth wanted behind was to get see a attribute accounts. it able was customers over? little some flows or, this more can really group that uptick that or it some color, of It there necessarily on you necessarily, years, looked in more going strongest the net the like on in or strong you to move assets - reasons to quarter. maybe ex-conversions didn't but but one touched or

Pete D'Arrigo

Yes.

advisor that subscriptions. So metrics, a AUM/A part had of reclassification the account we moved some and to from

So that's numbers why they reason with I mean generating primarily new the low-margin weren't I account that aren't of think a flows. really the up type lot matching anyway. the were business stuff

flow. talk about behind the Bill let reasons the I'll So

Bill Crager

Yes.

talk headline. kind And we that down through period business think the dependable of that's very scaled, transition when in actual, quarter. So and clients, the through our Envestnet gain in pushed re-class again, helped good AUM/A had net COVID the I transitioned the The a period AUM/A, had very of we a to kind that think, I way. advisors' supported

he COVID more all used are. on something I They're I This good time the longer they partner, the clients of They're The able on to Advisers say what what certainly that they have talked seeing how time. back Envestnet in that cloud-based, deeper our And more period. using that with advisors the is productive a on used up the engage during period they're is advisor average in the And platform workflow. go than They're platform, marketplace. in my the a to longer are been or to that more able and my about clients that. index think Envestnet - is from fee-based really I'd about the platform. the the platform, traction side to so We're to remote that accessible to is that's that we had the again, anywhere, we're period it. and proved the productive productive sense are. it. on advisors longer the the And are we're getting of leverage benefit solutions teams and platform, satisfaction provide And period, Jud, the seeing.

Peter Heckmann

accelerating we know you wealth the of mid-to-high-single been of given are the other based trends some maybe continued and that on it. Did That's that appears Got growing add-ons the has just Yodlee, the then at but what And helpful. licensing at to eyeballing line, solutions? new subscriptions digits. MoneyGuide it all of that, and see it portion deployment

Bill Crager

Pete, I do.

to utility credit, more AUM-based. those capabilities drive of they ultimately - do license-based about capabilities advisors the think I than capabilities drive about some think we'll etc. the that of They lots insurance, when kind MoneyGuide of that's that what of I some Harvest that rolling the I got of But we're inside solution, We've of investments, the accounts. solutions, about think license-based the offering do? are tools, whether bank out. now think new We be AUM

the very I in bullish no, continue So on space. be to wealth subs growth

see articulate is category. is to engagement around going what digitized think platform, more strategy uptick. see which that in point head other the I this the - important, we'll the I count Also, to, more I dynamic, will as think you're AUM/A we which believe and more growth I

$X.X data some As only, advisors those sitting environments, the we across those in the subscription-based accounts reporting use APM, assets. the and of some recommendation [ph] of Tamarac trillion, of engine are reps some

at within into pull tax Envestnet. going solutions solutions, team impact the overlay, that them here over sits direct Now indexing to we're

accounts So expectation the primary initial assets incremental and revenue and contributor the be a to we'll advisors, my will driving. growth is grow be that

Peter Heckmann

Okay. to Thanks, hear. Bill. That's good

Bill Crager

you're Hope Pete. well. you, Thank

Operator

Thank you.

proceed of the your line from come Securities. questions with Please next Our Young with question. Michael Truist

Michael Young

for you the taking Thank Hey. question.

Bill Crager

Michael. Absolutely,

Michael Young

hire of data the the Wanted really kind afterwards? and to we'll that be time? sort of kind hiring particularly time, are glide one across talent board focused kind more marketing time, investment, over of going eventually and lower the just at and all side. and of see the kind roll over expense of you to kind to then so same human a integration of the build Or on going engineering ecosystem out expansion Is ramp sales path analytics of start on kind by move to the followed at cohesively and capital on into

Bill Crager

strategy, hiring team. But first. data the is our team an strategy. the we're is at got and we're so to team, same head kind And if through the on product engineering taking of marketing second mentality right, investments, kind engagement time, to platform the it's And data the taking parallel - to data the that recommendation hiring. that spotlighting a of that sales and just place the we've keep around walk take I area, our Yes, count could in I that one

getting and You'll Really the the see look in an uptick bringing we're beyond. and that pipeline pleased quarter in second those a candidates with the at onto and firm. the expenses

awareness, client receiving the insurance of best marketplace tapping at back enables account that more begin that opening opening consumer not financial it to the that intelligent financial for the for advisor would created to what at data, And the So time, out the solution our keep an introduce engine, specialist standpoint, product built the wellness awareness. same data the of marketing an clients, overlay, is the marketing we're toward sales. again, advisor for real greater you'll only as second in we've into that and reach accounts. ecosystem to to begin product I that creating of but through digital build to here's direct time, in impact the that we're a tools the investing, life those overall create to benefit and to we're see tools saying sweep an that areas the to of the shoulder, to particular these some recommendations credit platform, that going on solutions of But marketing from recommendation engineering, advisor greater eye the as spotlighted, and out quarter, team is we create I'd same a tax and out drive index,

being really we embedded area the tool block you a our user are in a use progress fintech is take because I other and APIs, investment, open the MoneyGuide the now that say enable up fintech API quarter, state announced can our The ecosystem bank your ecosystem, note the there. of a first technology important to to good channel a right. and the RIA. And finance five-minute if if higher-end and around utilize financial or us, would bank network to legacy of planning into planning engine a industry, for of build open the that and piece APIs you're our or or experience will you're

internally In to universe leveraged will being addition are - be today. the that, APIs for the Envestnet

hard distribution. totality build to our of being marketplace of really to a store for So to universe. fintech that to embedded the and if has a But capabilities API more make accelerate the finance to able Envestnet, of developers. been back that for for and we'll Yodlee, Envestnet the dollars code push storefront put invest full an the build exists We've that that. and of now cloud. spectrum our internal the MoneyGuide, More the app move into API that accelerate is our use We're to an developers addresses that because set. for you into store, will, able

Michael Young

would sort savings back there as guess be there of That's helpful. removed? just you that's with that be follow-up, longer of turned Any platforms, Okay. will the be no et areas complete old I can a needed kind color either expense off as helpful. or And cetera, this integration, or technology legacy end of on

Bill Crager

Absolutely.

Envestnet business as the spending were cost the created. efficiency savings, units by 'XX, get has of cycle, part end As processes, we're the the through believe technologies replicated other 'XX both of from reconciliation, the 'XX core we legacy technologies into are to toward - get an that see we data opening that account we of going but

All to we're a got industry, standpoint, to So believe insight but to and that we're be spend, three we get the class in that standpoint. have in those we've leading that able that able and open an that industry-leading also at be place point growth, - API we'll recommendation savings significant EBITDA we as are be our cost data through the business. make will sorry, be investments that will get cost time, transforming. to our accelerate where to And recognize we we'll created we the significant we powerful in there'll from leverage I'm from categories

Michael Young

Okay. color. appreciate Thanks. I the

Bill Crager

you. Thank

Operator

Thank you.

questions. proceed Our Ryan of next questions with the Sachs. with come Please Goldman Bailey from line your

Ryan Bailey

I hope and doing Bill well. Pete. you're Hi,

Bill Crager

are Ryan. How doing, you

Ryan Bailey

Thanks. Good.

second on turning the back feel fees rate the the through So I the that and AUM exchanges? one, to that your of there hoping subscription Do assets some now solutions you of the how asset-based come are and on that but some of that was are like was the subscription-based So And for accounts will question. asset-based be you first that's in of of because shift sneaking accounting also solutions comments the and best is could you AUA. fee in some using the my exchanges?

Pete D'Arrigo

answer I'll So a lost toning? I when are you word about fee the rate, second we one first. the something there said

Ryan Bailey

inflecting. was it If

Pete D'Arrigo

our I Oh, turning. I Yeah, so thank you. toning working like thought rate voice too fee There a pictured and smudge, you out. said was

Ryan Bailey

be It too. the could accent

Pete D'Arrigo

bucket when an the moves yeah, into subscription out bucket. AUM/A the account an of it So AUM/A, moves to

is the there's on to of double mix. no asset So of fee going for the that counting sort rate And accounts depend thing.

Bill Crager

on if laid but makes benefit depends just on fee point there it incremental asset lower accounts, mix, Yes, sense you. to that be will to the basis

portfolio to in the get point rates paid points to our is either So opts which XX and advisor well, overlay, we if right. subscription an a in [ph] that's tax via rep capability, basis a low basis very managed XX

because So providing on ongoing that will do - to on that assets a be points XX we're to basis. those overlay tax basis XX on an going the we're

in range successful that uptick begin are set, that points overall we additional opportunities accounts fees captive as the fee in fee we our the solution of that incremental our or So rate, points an in the to have will today the kind believe our of rate. to identifying and fall going the market for that use of that, the case we're believe gate, range within analysis of the are penetrate kind The of we're window and solutions on identifying basis data XX from XX set services. that basis to identifying out in

Ryan Bailey

you. Thank it. Got

Bill Crager

Yes. Thank you.

Operator

you. Thank

with Our of next Chris Please come questions Sandler. question. proceed the Donat Piper your from line with

Bill Crager

How are you, Chris?

Chris Donat

Thanks just last I a question. guys. on for wanted follow-up Bill, Hey, one. my afternoon. Good to the taking ask,

talking you're XX basis points So to the from about analysis. of data uplift XX the

Slide talking and X, maybe I that's we and $XXX and only X maybe you should I about that trillion there. the square, incremental I'm toning I'm at mean As trying But look like if some I'm captive rate mixing - addressable on but million here, and apples be just at oranges looking $X.X fee - opportunity, market basis then to calculating point have revenue the here.

Bill Crager

Yes, to. I'm happy

and taken growth. a when the period have investment, of can - spoken investors we've and believe to we is so we incremental this So we time how about our drive revenue revenue,

is we conservative. penetration pretty of So that about rate all growing out, recurring this a blend at so during very over we that feel of I period penetration And is data we we very achievable see, a opportunity year, that's there's said, that we we're believe assumption objective we looking reasonably XX here a as that $XXX rate, conservative. to incremental year, out million we think and presented. that billion time, this of with the And million is revenue and penetration that this then, blended a get annual of window - this can just from a it's think our X revenue we later think products day recommendation the from incremental and believe rate really engine making kind we that time, over recommendation good hey, we've

Chris Donat

talking majority whether shoulder assets, as about? for you're go I'm trillion, I you your different your of under the management licensing the go-to-market on strategy, at or look strategy then just they're And that's Is a administration, or $X.X yeah, set of there that similar the Okay. is things sort tap under of it curious, licensing. after in as

Bill Crager

of up a all the think all access you're I that advisors to to suite, all our all Most solutions said And our already make all advisors. our and are mentioned my we nuance - sentence working suite. as picking have solutions a script, of exchanges I available in to like It's something on. lot exact fiduciary great

captive working incent their get is this book help we will I So kind there's good for sitting these services, some those to to of that addressable business with we that want them [ph]. market in because - contracting. be make clients sitting that There's business of of sign some our them identify will addendum as books the say in work they're go very a me today idea, their assets

Chris Donat

from That's me. Okay. it Bill. Thanks,

Bill Crager

All right, Chris.

Operator

Thank you. the of come Alex [Operator questions line question. Our Instructions] with your next proceed Please Kramm UBS. with from

Alex Kramm

follow-up. Thanks Hey. call, to the out drag again. but Not had a quick I

a investments. You contribution not is hope - would the second about remarks some marketing, investment I specific payback half bit prepared heard your I made this there's in was from that at of doing? a comment investment little quicker. some that this right, the into but a to pertaining for 'XX a Because if everything or if that you're sure revenue your of I'm goes

second half you were 'XX the with So maybe just about why timeline? talking and what clarify

Pete D'Arrigo

It's and we existing across not we turn off. it's an more universe in of We've the again, given but market. will get the distributed won't broadly, immediately turn on that a So happen something switch of ramp. that clients have. That like that's example a

ourselves the to them, second XXXX. giving and we these ramp initiatives basically more new broadly to revenue really we're distribute expect seeing time be and into So more meaningful half to some of some toward

Bill Crager

of progress that the create growth confident growth accelerated be we're kind going incremental is impact rate I Yes. the product That data second able begin on again, to in to quarters will that making really to last double-digit experiencing our at we and to the that We been investors we're continue activity to is we're can enough of will the that then, significant transparency the Bill. the to rate I'd data click-through itself - half penetrate, the where be KPIs to continue this driving. the have help to of believe continue, year. - add, an an going number the drive in platform evidence will Alex, around, revenue anticipate the the and to we've just opportunity understand other that on of and those usage provide recommendations, and continue rate, next we're the these activity on that And will solutions, rate said, ultimately, activity some points

Alex Kramm

Okay. Thanks for clarifying.

Bill Crager

Yes. Alex. Thanks,

Operator

are closing turn like Thank would no you. any call this Bill for Crager further There at questions I remarks. the time. over to back to

Bill Crager

at to thank thank extraordinary. Yes. team for And Investor the forward just I'm just want much. been to meeting Day questions make do for everybody note Envestnet want the appreciate joining. just doing, I the work really connecting I June. to that looking in I a to they've extraordinary with the very everybody

Thank So forward to evening. support, again Thank for you. we're really that. your looking you and a good have very

Operator

does your teleconference. today's for you Thank participation. This conclude

great Have this evening. a at your may You disconnect lines time.

Envestnet (ENV) 9 May 212021 Q1 Earnings call transcript