ENV - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Envestnet First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to turn the call over to your host, Mr. Investor of Head Shipman, Relations. Brian sir. Please go ahead,

Brian Shipman

us Good quarter first joining afternoon, Thank you everyone. on XXXX today’s for earnings call.

month Before presentation XX-Q to press the be being we point out call envestnet.com. of replay will webcast section that like one begin, our is our Investor website available Relations release, and on be can supplemental Form website. associated found under live, our This a I’d at earnings for and

X information. performance. This found cause statements. will SEC current the we the the you and factors forward-looking Slides on not forward-looking potential discussing to During to in on is other filings. be information our expressed and information that actual also certain can our by X expectations a call, Further could regular based be guarantee I review risks, is and statements of differ for uncertainties cautionary future encourage results from those

we be of financial this website. these During reconciliation presentation Relations most certain measures appendix refer non-GAAP a to to directly non-GAAP Please financial measures. posted measures. Envestnet to the will our for is The GAAP the Investor the call, in presentation comparable referring also to

prepared Chief today’s the company’s and Chief first quarter Joining Bill me we as results. the of open overview remarks, a our well will to an will questions. Executive call Officer; company D’Arrigo, Crager, provide Financial on Pete Envestnet’s Pete the and Bill are company’s Officer. update call After as XXXX

plus Q&A, please one one limit follow-up. the yourself question During to

to now back that, you turn call You Bill. have over into may additional I’ll if queue With get the the questions.

Bill Crager

hope today. is and everybody healthy. is thank Thanks you so and good, Greetings, much, for everybody joining us Brian. I everyone,

Market advice of case on and of study minds volatility the and matters XXXX and geopolitical financial most. the is financial consumers. The first to weighed upheaval markets financial quarter on information access when of a

react empowered powered that we the and given firms technology This solutions saw we advisors the extraordinary Envestnet. and agility with quarter, like work are uncertainty previous with by quarters to that the respond data-driven of volatility, and to

supporting than clients we delivering are clients really also this times rising daily tens who for families today. connecting of markets. What interest These critical our lives the are of more of long-term pressures Our challenges of and in rates volatile something while do the inflationary millions importance ever uncertainty with underline before. that is people the their is Envestnet is financial goals, of navigating

view road able coming. was my is services. I Every clients I financial digital much to the on mistaking the future that transformation. the is on is with and Envestnet time quarter, is the how company spoke hearing was so that During with delivering gratifying really is of transformation of they it. spend what partners no There And accelerating

their focused customers’ meeting foremost are clients on expectations. and first Our digital

resource everywhere. everywhere more and are yet really They businesses and use are It’s to have to integrated a from achieve every each leads that experiences access breakthrough that serve connected data quarter a As it expectations know to you spoke for client clients the insights a actionable better firms should to challenged scale most They This experience answers shifting digital desire but lives core, looking executed their firms, is The is clients stand-alone more I throughout Financial with providers. financial priorities from and expect that for topmost well. it’s digital this who to a do to coupled just this connected are but know, access the useful, of financial their more remains it. their underutilized as it’s fully a Data effectively, It’s the same consumers person’s plan. planning untapped. drive much insights. most for. large offering one experience. their with and

initiatives clients value from the important stepping thousands this for to and help firms these can Our of them. data and solve there this really is driving deliver digital are on lack data. resources Envestnet And that in, want we

is this asset evolution quarter to the deep clients. my management than this. is past portfolio past delivering a from or reach as further more can be and I’ve in and strategy to point cash is frequently. rapid something ever The our planning this comes about financial ahead undergoing and they are at With personalized quarter’s clients. scale someone and quarters, like we The that inflation generations to scale is what very manage observation a of rising rates, even and the be conviction pretty hit you our from something on and integrated today. we the their strong the whether Periods flows over short-term ability doing we comprehensive, and discussion importance is has what The hearing over impact of volatility we It before. how And highlights Another connect keep market personalized far the these created markets. with entirety are person’s for from goals experience life investing experiences, profound volatility, know, again personalization that at for that have strategies matters. is

aligned, before. powerfully the the are serve will We’re we them intelligent and delivering more introducing future. that today, ever same essential we are for data-driven, solutions into At them than time,

road, consumers. industry enable have our is exciting. it ecosystem is with do is is scaled, the accelerated and validating evolving delivering the being the been Envestnet meet headline. a being really positive. rapidly needs And has on of this. and received investments Frankly, This year the have to data-driven feedback it We to uniquely the overwhelmingly that clients, to digital we

Envestnet will industry the that what see. this thrilled event In on are Charlotte, the Advisor person industry been in Charlotte, to Carolina. I’m we is hosting Summit we’ve year. premier lift week on North curtain Next this in the for working we

fully their and is data-driven, is environment the connects newly all a will to consumer’s that This Envestnet And the parts life launched framework financial our of these. white-labeled on period. game-changing the some integrated, are be it will of a customers, clients portal display. highlights The client deliver

progress connected its is build of fiduciary to creating the a businesses. our of their that our our launch data designed data help clients help for of offering are specifically new who indication it will first of and grow And empower Our with help of be advisory scale. and the to We’ll advisors introduce finally, advanced and together display enterprises’ solution spotlight it This Envestnet cloud-based data how parts exciting This bring to analytics will firms. will on transformational an clients. them enhancements is offerings. will for kind enrich technology analytics of host upcoming intelligence business the also wealth

capabilities really At You’ve heard our personalized XX% the introduce we’ll before. business create evolves we plan. These will by me preferences. for and shifts portfolio can achieve based a individually their direct summit, here. path year-over-year, speak them, market that person’s financial portfolio their them, and innovate goals for anyone. with about are the on indexing financial to grown a This and to QPs. built for expand And We our in a the continue has and

team exact great distribution in you current sense substantial I our will very lots demonstrates asset But things. because very what’s are highlighted for strategy the we these space connecting wait be this over is that fiduciary last quarters doing tech will in there. week. to data next Really, my can’t it that our it, team we with direct secular to quantitative behind hot our As Hopefully, indexing drive growth. and how showcase deep excitement really a we’ve and implementation of you you management. are for There’s evident know, is can these get

going in our with are solutions. value-added client deeper We base existing

are providers. just and are results now the that think I way are want to more and We very spotlight a the opening few for more marketplace we ecosystem you, important. pave our to and modernizing for digital things the I future,

assets quarters we up posted last we trillion. is to to and is the revenue XX%. growth were XX.X% our annualized accounts is Envestnet up net In to number growth serve quarter, year-over-year. organic year-over-year experienced. consistent quarterly XXXX. traded the AUM&A pace to firms which growth The annualized several the A mid-single XX% flows $X.X our first average outpace QX serve included, the despite was compares AUM closer during up that versus importantly, organic industry, conditions we Our with continues in of XX% annualized and this industry. market of rates in organic digits other for XX%, management the under to And publicly Envestnet meaningfully our quarter assets The most

including extremely are step-up solutions, in data that underlying with pleased our deeper the is just anticipated Value-added had Given growth offerings impressively. and in some seeing, we although a a think step continued and the for back uncertainty fiduciary to understand. a overlay volatility Taking direct the a little the important sustainability on quarter. minute we asset quarter, the that we I index, tax flows were of to dig of growing our are

the value-added the Over seeing waterfall cited advisors with serve accelerating our created our using administration grew number the I that value-added by end that we these grew are solutions and of XX%. $X.X are real from funnel and to today AUM in we by these XX%. to last AUM, the that to just assets The The progress. momentum the of stats of now we our XX% this grew of services. year, serve effect We’ve into near under these by solutions from accounts number of services that flows our a trillion moves execution end pipeline,

these spoken are insights generate that data million of more about identify this Today, a than for advisors using past. the I’ve day to to XX are pursue. we accounts today. opportunities We in

trust next on environments, how innovating. solutions. that until their streamlined are people requests we the grown advisors competitive week. more before clients business, every collecting day technology One more more introduce more insights more here. for service with using they the priorities context anyone different soon ever appropriate this business. will do all And on and have engaging believe, We to and data we serve wealth business. We and and it, and information we This and more understand. simultaneously, more the create we but of make the this see is custodial far our post highlighted to our workflows access Envestnet our important technology same more XX business accounts advisors for note one-click single on these to has it. assets quarter. and We than – scale on as or will you wait wanted in of from data focused that I our desktops We offerings. number often begin will advisors very of of every for do our do reconcile the across in more log advisory client do last these are surface our data morning. aggregation the accounts important uses clients I execution-ready in about done process talk of how The We We than trades sure is than the The anyone consumer And customers anyone we space in before. sources assessment Envestnet, on I should more than have

are we executing. put, up are we is streamlining satisfaction. and We driving customer Simply Envestnet are automating, our

it’s profitability greater As use, over to in for efficiency next infrastructure, driving clients ultimately invest even data, greater the also we our meaningfully years. investing are that these in higher business few scale, creating know technology we solutions our our and important and

But margins on will XX% and meaningful we are are quarters. next on in detail include confident quarters executing more XXXX. on efforts ahead, The While few plus the by the very progress. to move we these making deliver over Envestnet is EBITDA opportunity begin our in increasingly adjusted strategy, needle to is market positioned the conclusion its I’ll well more their past will turn. The and more before, does. intelligent people clients connected to customers. our outcomes very Envestnet better will ever many I’ve this it come with do the than is with and help drive world clear after away what advice so twist being quarter, for that incredibly

strategy. We are on laser-focused our

the this let turn we company drive and that, over review the us. past me quarter of we for to our by of will engagement believe all success validated, stakeholders. his results. With are offered for this our long-term call energized Pete And for and first the are We quarter

Pete D’Arrigo

year together up allowing technology compared you, and this year. is effectively. done against example operating today is thank our bring is call us this the and we’ve company the output tight XX% And to quality. last than Picking across technology afternoon. frames work where more data, An business organizational Bill, joining Bill productivity gains. higher our left more important time the you, and this for up to with is off, solutions more yielding is Thank The everybody,

have clients Our noticed.

types service the course, to to the inflationary are driving It’s We efficiencies operations of across data are the going the activity focused the so same deeper At wealth, ecosystem. company are from through platforms time, on. managing and on, to pressure we modernizing feeling. and up opening seeing we market are these of and consumers operating volatility many the

data it’s impacting Our people. shows how

higher Our decrease the analytics consumers over years. insights by seasonal post is discretionary X%, other of which than that quarter-over-quarter spending show last was spending down couple any

We existing also cases for market them after In saw beginning quarter, base fintech we advisors over and see plateauing volatility. better in their clients digital the the and business, looking at our wealth are activity some position back. how to to rebalancing that pull client is

address to technology turns has it pretty businesses. these across market Our made their for our clients turnkey

for quarter the the is million. basis given of grew softer equity both to we revenue on the were we expected The the the results $XXX and also was these asset from income the our wealth for softer, and was quarter. than asset billed at effective and markets, first to Adjusted was down way guidance. context, the our for XX% rate impacting accounts quarter push greater monthly lower within values pull quarter due daily year-over-year lower the this X% the provide performing fee Our than was modestly the throughout than our fixed the the billed average and that originally well calculate business we with built beginning segment mainly on quarter. dynamics, billed revenue and values of was revenue since for quarter, the it and balances these QX Revenue is

the we be expected. a So experienced to The the in and lower would little the economy macro effective than trends challenging fee appears and of marketplace. rate pressures data also analytics have business

business, in we fintech asset As Adjusted EBITDA $XX.X million, the serves we quarter. clients of our $X.XX, impact as higher outlined bank reflecting Adjusted management saw per a than was expenses saw and which guidance for earnings large February. call our the our well firms. expected decrease in our user the I progression research as mentioned, in on who volumes, share was $X.XX on primarily

through the XXXX, our a go about outlook of I the Before detail little add like for I’d to remainder more context.

year’s in environment. said, net acceleration performed wealth in continued well quarter, consistent light market last strong we of had an saw largely strong business, our said, the I the and especially flows, pace. First, as We anticipated That growth with of flows.

does forward are sure environment, look outlook of our in best rest the for market of As advisors we more to current the rest are year, portfolios on through their as the a XXXX current revised outlook focusing making aligned. flows including the factor muted clients’

both Second, segments. our to steadily subscription continued in businesses grow

more revenue from While data our progress a a significant is what and year standpoint, new made in bit outlook analytics for revised product modest QX. seen this growth we’ve given

our quarters and ahead. structure begin technology cost the efforts in mentioned, to years benefit should Bill As modernization the

we We the investment macro managing to expenses, including grows. normal the activity of approaching moving the given as the actively our way initiatives. supporting second business as customer into expense environment are is our accelerated Reiterating additional business of support are we’re year needs the also growth the today expenses first

to will $XX will year-over-year. operating million And spending all announced be calls, we our discussed a the the anticipate Second All to have year scrutinizing which finally, million we full that as said, as several last affect restoration adjusted on of entertainment. accelerated $XX of activity. travel we to certain to expenses $XX million the and that have for items by past million earnings impact experienced partial $XX prior to of such pandemic levels is a continue spending investments we year

our impact the the are Given are that from manage we expenses. continue in top-line we seeing ensuring resulting market, we business the to

Now, updating quarter follows. second we to are full the looking guidance and year, forward both our the as

between million, XX% higher EPS million basis between $XX.X to market $XXX as and the $XXX the $X.XX $X.XX business of benefits to profitability subscription-based to second EBITDA offset the first revenues as be For $XX.X impact and Adjusted the a to growth continue share. be XX% in XXXX adjusted on million the million between per investments we anticipate quarter. to we somewhat comparative revenue, to to quarter, expect declines adjusted compared by accelerated be and from showing and

million and note You’ll services $X revenue as $X in are range as of an increase well cost items Both professional Advisor the each. in the of Summit revenue. QX these to million related to of in

For the the adjusted and and in $XX were being be XX% The conservative to March adjusted between up flows experienced consistent million $X.XX outlook and roughly what analytics in be a and from in to remainder quarter. to in $XXX with and $X.XX. billion, be change the billion data for XX%, between the with first full between adjusted impact we wealth market EPS more reflects $XXX million guidance $X.XXX to business $X.XXX the year, EBITDA a through expect XX, million revenues we utilization and revenue lower

engagement expect improve modernization have to not Our QX margins XXXX prior-quarter any margin, our the of On to in markets addressable with should our discussed, increase margins higher. efforts half so portfolio cost EBITDA greater clients. capital between and the assume meaningfully. strategy are addressable of to and the adoption end is our actions, Summit, Advisor market investor margins unlock and profit as and relationships beyond expected with be from of adjusted the the impact XXXX, of first our still will quarter second to financial market margins guidance, QX. the we always, implications markets driving By as changes was and be our revenue we depth not should as the point, and growth and low growth, of Long-term, estimating the access in increased profits XX. their within that QX we realizing are based existing clearly drive levels the advisors solutions we higher EBITDA revenue the base general expect strengthening growing as and the powerful March on does captive of Bill client combined

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

we year refinance progress. We a are are as within update maturity, actively monitoring XX of the you will and or our accordingly approaching to opportunities retire we of

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

Bill Crager

marketplace transformation industry in are we’ve parts higher the it make fueled power now people, for revenue talented we serve progress and in and solutions breaking the clients most of operator have data Thank the introduced largest the on they and support The is shareholders and partners by possible is Envestnet. future. families driving life. Pete. you, broadest done our call for demands today at Thank technology, Envestnet carrying turn important industry. to feedback will stakeholders the are fronts. of they What’s new intelligent delivering financial work you that into ecosystem our This year industry team needle, of intelligent us very The Envestnet and is bring the all what set the for value of tens accelerate. much with and here as profitability True is the we back the of the interconnected the new all incredible to for of valued we three been it incredibly made the access Envestnet our of last growth creates our focused in is ideas. and is that on most will joining meaningful to and toward platform transformative for the validating. moving for results higher new We’ve your industry, the is to progress technology enable millions we as questions. drives the And for an I comprehensive to through made driving hearing network the data what together.

Operator

Thank you.

a question conducting Devin instructions] session. will comes Please now with [Operator ahead. first We Ryan Securities. Your be JMP go question-and-answer from

Bill Crager

Devin. there, are How Hey you?

Devin Ryan

Hi, Bill. Hi, Pete.

Pete D’Arrigo

Hi.

Devin Ryan

Good, good. afternoon. Good

thanks detail. all First of for all, the

kick So with off I – the guess in one. obvious some first, I’ll

some you gotten plan, there which a So of about just all potentially laid updates that and process that as around been I But promise a out, suggesting some questions DePina is the other press I kind press well. then Stuart leaving Bill, and recent firm. progressing just question the appreciate, sales multiyear on we’ve have obviously

but around a ongoing the can whether one I if of high company provide So you I point. even kind any backdrop. additional guess share any kind you you the was for at kind of appreciate one versus just the about a another ended well? can valuation high value as context related, level, maybe long-term do level, we’re or And hear you think of kind where there firm volatile in process if But we insight from or had as then in today market way are can, a we proposition or of the still firm guys how another and

Bill Crager

going achieve laid our the time period it. accelerated Devin. out with we we really in was were coupled And aiming Sure. last were what road which in investment. in to that map we And year, the Thanks, achieve to

power solutions to connecting to the work so has box been that And teams, we’re quarter would it. And a to and year needle. that together board advisors, the I Envestnet streamlined bring platform to tell beginning provide the we’re you bring our begin that technology done we experiences across parts us together of and collaboratively new the I’m standpoint going the more and that say and market-facing closely, from for across check data our there, to to more our one new, move to much to insights the leveraging derive organizationally into

seeing hood more the data look our we’re base. driving I at of when advisor I’m penetration the under is that So

in going line net both drive will an we’re that them. with and effective doing And line. that deeper way incredibly bottom We’re higher-yielding gross and revenue with solutions, both top

modernizing the the for done perceived you and Hopefully, transformative, how then open next Charlotte lift lastly, to partners. week to technology. excited more and industry We’re am be what it on as is the network really the about to curtain up I because we’ve noted more getting to going

the we’ve Again, an by to would I we’ve very everything need work He And that led tragic this done was I He So say sorry, the the we do we’ve extraordinary Judd’s put ran convey, is mean, But time. to passing. announce there’s I a And the if there, making that We needed focus down. outlined we and partners do. of And have long much – that. and has won’t of comment we’re needle. material we on been announce, there anything ever And move any would out about said, it. on been I work, – I by amount our Stuart. that the would, felt we think announce Stuart Stuart I’m in company just with there We really execution. for needed comment the that DePina. Tamarac in course, to that an beginning business partnership we been business. hey, to we’re I accomplished progress rumor and myself if or anything heads our has incredible that’s Judd speculation after Yodlee amount. press. very

created incredible here. being on look, there’s your valuation, So value question

a quarter, been growth that’s a sustained I’ve market. leading. environment, And is on discussions year. returning validated moving and again market focused the lead a we’ve really also share just then net surveys, the of and support reiterate past we’re And then multiple we’ve to have year. and We XX% in categories, targeted industry the a needle that’s had of And Envestnet over that in again EBITDA XX% higher adjusted again,

advice those of us will our Devin. of what position market our sorts got you’ve the on at the and market their and disrupt, more our valuation supporting to driving to with transformational, size, that our clients financials, financial that solutions the with so valuable and I will scale something better connected holistic are tell information here. so what’s that a clients But invest to better, that, continue is very multiple So to enterprise create think that’s can financial provide more that’s happening and we

Devin Ryan

complicated move of Well, question thanks, I I’ll Bill. to on guess, answer. Yes. it to now of a and it. kind question. try picture appreciate But I bigger kind ask Got it’s

So I’m having a my trying to with it. I’m the and of next portal slides portal, front But week. look new time we’re at developer advisor seeing to the appreciate here nuance going I of the not and probably run the with eyes hard kind all

relative curious portal? curious then has existed kind level, just relative kind essentially what side, again, of for is high interface guess, it portal like – a I at is. Or on be of a beyond I’m that is this already So there the aspect is what’s week. next other monetize that, on, guess, developer engine to the like new recommendation advisor portal I’m on to built so But to, I going of the piece that of Maybe into the is the And there’s kind it? maybe additional before? ways side. to different

Bill Crager

thank Yes, you. I the yeah. Devin, that yes. love question answer because is

surfaced bucketed. advisor be practice, an is On in their if be will we advisor’s page. that front opportunity that recommendation the the will see to It portal, there

value execute advisor be through you but able of the to that for only that, standpoint, to credit on opportunity, the standpoint, they’re – all and investment be will insurance the click see will standpoint, accounts also review they an will then want from business. to trust those Not So standpoint, click through. their derives going an that to able to

parts and been to before. advice of the to the grow, advisor means that never connecting are it has for what done We

We will show that.

Advisor our introduce will Summit. that We at

And can a step in value, only from sees again, Devin, almost what not revenue from advisor add value, their a profound only standpoint. not productivity also a can deeper standpoint, the practice, what’s they the advisor’s it the forward So but client, they very see valuation but desktop. is a for standpoint, for means from that for instantaneously it

what’s I data environment, that that is from unique developer our the APIs about our or data so of Regarding that complete ag set our got business. think you’ve

You’ve complete financial complete our wealth platform APIs you’ve our got business. set set from our of of the APIs and and planning our got wealth from business,

and the way. which offering our their environment in turnkey our existing the they’re time take parts first has for clients within clients their infrastructure that to streamlined the So developer a very products thread industry and ever, a into own that workflows together can in put their

a it’s been lot our APIs. That into second that opening to our it in a find to are that meaning profound themselves deeply first additional And take the initiative, effect thread begins and outbound of those but ways to because partners on but clients for in Envestnet of platform more line revenue part is inbound build an ecosystem. that to into will an – has of it And helps year. our also we the environment, their show part, kind up so drive that’s the work its the

Devin Ryan

hear, Great. much. leave Well, Thanks so it there, I’ll great Bill. to but

Operator

ahead. Next question, Michael Young with Truist Securities. Please go

Michael Young

question. for Hey, the thanks taking

Bill Crager

How are Michael. Sure, you?

Michael Young

just doing I’m fine.

week. to forward Looking next

of trim the broadly. savings sort of should products as off would that as of like capital pressure start to kind of Anything that be expenses, see XQ, representative reduce it’s guidance a March sunset back color offset But into of we attached and forward? deck kind of bit the been wanted we markets going example maybe through it? Are new as the I costs anything to opportunities XX, some think the appreciate that slide in the just some or obviously on cost can there have I be I roll to an of in some will or just that, So move other under here. the we obviously,

Bill Crager

of Yea, not Michael, been if – figure days we want integration for really from mini going – I’m volatility, and thank question. modeling, how you don’t cost And has It’s I a two your across it’s got the with study modeling there’s The last case We’re two days that here. why to right? trying ever we are knowns market. would to a out But we’re definitely the on organization. lot been noteworthy. our we’ve last the say a and standpoint,

teens. have So cetera, fuse service organization, beginning are organization, been the the development the teams single in that to in into et

So XX%-plus can more year-over-year. for our in go-to-market, lift engineering, productivity. what and request Pete those our is But more team, even we’re operations we’re cite how from the more there and I lift service statistics of in service driving cited environment, our kind in you productivity. output standpoint, trading getting more a

continuing are We expenses. assess to

to we’d think balancing we’re needle. that hires making, go that from Michael, We with disrupt the really slate move contemplating. be we’d here, because of a the forward as is want look we’re here, Where think that. I beginning progress don’t we’re if that new I to we at there’s

going things. advantage do we’re We’re manage. how in to discretionary-type things we of those We’ll have that – opportunities prudent savings to also the absolutely can be for cost take going we other throughout business,

We also, as you forward the quarter of ahead. have look know, good reasonably a

visibility, that action volatility, if of we saw take degree And we something course, Michael. the we’d have occur. on of do dramatic depending So

Michael Young

Okay, probably I two seems of Advisor margin of And guess, quarter it next and more markets. here kind outlook, we’ll bottom lower the the like broadly in Summit EBITDA or the over long-term scheme with great. the

of plus XX% feeling confident kind sounded EBITDA in it about margins that. confidence like expressed long-term. were you more And You

specific even longer higher are us be it’s don’t pointing bit You or to? you’re are things term? of the think that kind otherwise it from may making I of clients you have might but than given with XX% know there little conversations a if color, that

Pete D’Arrigo

I’ll then in. can start and with hover Bill that one

to in on That’s got negative that, this a the our percentage expanding up basis would quarter. maybe going rest of And margin I conveying of a for from to expect to QX. XX be Advisor little think maybe points see QX idea full near-term, to point, a almost you’ve year. Summit. margin and be we’re Without that the our this revenue grow do the continue the we bit the –

long-term, accelerate organization. in to the what our to ability continue about and longer guided think our continue about going of growth, by our So that really When but some it’s kind driven and of the And the breadth the will ability we’ve term. improve expand modernization that infrastructure that’s of we on margins. Bill to talked to scale fits

Bill Crager

that operate add, I’d just we on. Michael, about we’re talking And the talking about we’re systems when modernization, firm

we’re had accounting, plan technology lot create. infrastructure. been we’re Our the long-range just more what of portfolio and our toward digitized And of to our same that because that a modernization because so create really to service for trading the of we’ve to able working ultimately, is need systems, a environment to not automation support going cost

to into get needed check cloud, growing is do is code What done. we our up there. the confidence Our

faster help to again, able it scale. through much effectively, systems. modernizing us of gives process And is more move those tremendous we’re does, operate the us what Now

trillion $X.X at we’re So today.

over And ahead it to out a And We’re to drive to standpoint. as dig and to I’m how I can through greater operate from and on will trillion-plus this earlier, as five-year anticipating material $XX more we call the move we to serve period detail we cost savings on get growing XXXX. the in quarters to mentioned that you. can cost going that provide then than how it

Michael Young

Okay, sounds great. Thanks, Bill.

Operator

Kramm Alex question, UBS. Next with go ahead. Please

Alex Kramm

Hey. on detailed not XX% obviously, up But Hopefully here. everyone. Good personalized solutions, great question evening, traction, the year-over-year. too

I was look it’s billion, you think I when I said it though, $XX think $XX question to what quarter-over-quarter, quarter, that’s now see. it A billion. last want we at

obviously, the were there markets So soft, down trends a in decent chunk but AUA than worse AUM, line. were actually and the other

so an maybe strong not underlying just this other effect maybe was any on the the of or sales focused assets mix wondering environment on. if as personalized there’s advisors going were So things, if your were because what’s from

a three dynamics guess, those in the the to just going. last in where is I trying bit products months little newer So better, the question is understand

Bill Crager

into and a Again, market – given was at that quarter of positive. Alex. was good What anticipate fourth say It Yes. and and I quarter for climate, in Thank it we services that fourth third was very year, was we didn’t AUA did accounts reflects AUM the last pace of the us. comparable quarter. was you, was IMPACT especially of I’m slightly data administrative good. opening we from that during were AUM&A XXXX I some that accounts advisors, to new our flows, that, that the saw is we the also see. sorry, in are the side platform think engagement the What – it So But right? in and would transition. these flows the as of assets same very some XXXX, would accounts accelerate new

be the decrease standpoint, XQ. XQ would it’s lot like tell looked from notable, So you that not activity but would would be there. an Again, that that a I the – the

Alex Kramm

– Okay. was solutions. my specific question to the personalized is that And

can So is that We the same there later. follow comments. up obviously

Bill Crager

Yes. sustainable exactly. be Yes, our exactly. index It It our direct would be would be Yes, platform. business. It our overlay. tax would

Alex Kramm

on look And but Okay. I later. wondering well. the $X up to maybe follow we But presentation, there down – when should like look subscription Yodlee accounts when down And analytics this, it side, your or there were and revenues of data actually and quarter-over-quarter, secondarily, just just know seems can the million actually number the again, quarter-over-quarter? then I was at as I

Yodlee at thought paid it about there on well. stabilize looks guess, Was that and expected to a what’s client was loss as Yodlee Or going was I I I should So down and ticked Because know I there? like again. users forgot? there maybe that

forgetting there’s I’m if event wondering here. one that about just So like

Pete D’Arrigo

large that a tell loss decrease at again, large to we saw just in And across largely decrease terms from was for just clients client in we – talking no environment. the There’s driven best can of user and is economic that by saw spending. really, it economic board there. outlook that’s broader involved the as banks fintechs There utilization, in volumes at

Alex Kramm

Okay. Fair enough. guys. Thanks, again,

Bill Crager

Alex. Thanks,

Operator

question Bailey ahead. with Please from Ryan Next Sachs. Instructions] [Operator Goldman go comes

Ryan Bailey

Hi, good everyone. afternoon,

Bill Crager

Hey, Ryan.

Ryan Bailey

a I had back cap. place company to I help conference that thought number you you Bill, and that comment at billion point was get how you believe you arrived the a the I Hi. wondering if in specifically. to on a wanted to frame valuation. talent comment come $XX at the you to market could made recently that

Bill Crager

to talent. again, Sure. Yes. start going – No, the we I’m with

that and a you make, would of done of one, can that to majority we believe – that to they’re is incredible a complement to the lot they’re in closely one we on work and hitting people together. have the of help I which contribute we and that We We’ve are build the brought bring teams the beginning feel think in the that XXXX, vast Ryan, here the really an important is company, the new ground, lift. to points team is brought more I organizational leadership

the feel throughput company. You can inside

going billion – a roll of on $X pleased there. if to engine sustained So grow you an basis creating we’re I’m forward, we’re restored, We’ve that. really time. top a line engine adjusted with EBITDA, by an period XX% confident not long in stop we’re will But that. I’m over created that

architecture why have that has now that. Here’s is in I’m so confident The installed we cloud-based. –

is set growing Our data massively.

more We’re and applications our and set using to data partners. more more power more and

that unique at of we’re to that distribution operate go – to And we’ll And you the We partners virtuous you footprint. able that base have as is we something but highly And XXXX to value carrying mean being there. rate, come think we’re deeper, see business. a scale, walk the is that’s have expanding look kind beyond. we’re and the that things, that’s company, those a providing, one EBITDA cycle going and we more expand the XX% means billion momentum the we’re do that is that as a into out That today through beginning of to our line, the XXXX and As doesn’t valued. period, able will I at again, we’re stopping to we think unfold. that and continued adjusted that – It the we into very that $X-plus are offering. our have be ecosystem, I that top

Ryan Bailey

expand I I then going the slowdown Okay. relative And and you terms organic from one. of be things. could the of in very But Thank outlook help that trying growth the is I’m I’ll we as the this that come to on timing rest a wondering obvious Maybe – and hopefully, definitely could potentially more AUM for guess, to sneak think might potential bit the year asset-based here. floors. being offsets that of how on guess, much about muted solutions, the was that what the the another if at side? just in for of you It for get helps this color. frame to and I kind

Pete D’Arrigo

on Yes. Well, like look our little sales QX. experienced activity gross bit we focused are the outlook moderating on in a we to AUM side, our what more

that again, of So was closer the instead average anticipated. the acceleration saw XXXX we had that in we that to

than still modest QX QX. and more initially expected see difference, moderate narrowing to growth more for but expect some activity that sales we in then of flows QX So and and

Ryan Bailey

Got it.

thank Okay, you.

Operator

Chris Please go question, Piper Sandler. with Donat Next ahead.

Chris Donat

there’s in last receptivity I over done look feel organization doing wanted good you’ve your I’m Or around, wondering I because it’s might growth, getting the one particularly like decelerated more years. to different likely on if sales the and the offering of afternoon, the road, you you from advisors, is the of few than I’m anything Pete. through things. technology. wondering at Bill, pushing and of technology, selling their of rather But pandemic everything And be and last years, over of And couple new to years? advisor advisors advisor on Envestnet with advisors couple of when for you are the than have kind I’m with a with just to perspective, the been the the you’re kind in focused ask Bill process different of if been Hey, the but pandemic? this since on string everything just wondering doing using if it has last the environment change expanding were

Bill Crager

Yes.

a we’re of more in is that typical just firms, that is so is now much And can Chris, for web I from need their they Feedback and the off RIA portal but And need, infrastructure. robust a positive. a client an receiving or inside or that the that to to pretty business clients the engages a engage charts is market. few the way broker-dealer, digital, model not dot-com a our standpoint. a cool of point, you’re right, engagement like you’re areas whether digital think,

So it our be high don’t of too a or portal frame sits I but as degree get can detailed, APIs. built in or want configurability. underneath that widgets to distributed as and

data as render well kind we apps capacity in flexibility it’s an unlimited to life. call So intelligent the in got financial what to combine, of to bring and maximum

It’s XXX%. So consolidate going going a are that, want. a lives. of they’re and to financial their It’s a that’s They consumers because get to need it where kind a need. it. not Firms find that’s see

data. of other is is bit The for one a around Data a challenge firms.

got team. the local You the got talent, RIA and a industry in engineering have pretty our to and does to have not Wall the very don’t they R&D But it. does nor largest right? So pretty Street, Envestnet’s up firms think your about substantial substantial science team, concentration engineering very data on that

pressure. and don’t Because regulatory so for And of the issue. our firms something all asking insights, greater help we getting things they they’re continue can looking grow, them. organization They’re They’re to to expertise and is – that with advisors that can the can data their data. we they’re scale can to we deliver Why? flex, we have

about as have, I and both Chris, in excited to look forward, that something right, them. we on of two those pretty those and leaned be So are would needs

will to firms. – my are note things that standardized of There got their what clients. It to no these advisor how of for advisors, in the demographic about are that. most those thing seven a does from valuation I industry. in our firm times And that metric I times issue that financial you’ve the is of insights, thinking age measure other technology drives a the their beyond now is okay, How those ranges that? drive And up? rev future XX an The practice. would self-interest they lot stack do of a and Data for so do lot succession, also standpoint our from X

planning of reasonably than touching is that continues platform meaning a if conversion been investment year, And other substantially you software There growing just lastly, also going that we expand grow clip. business. pretty bringing solution the headcount year, of our healthy to substantially and that have and that accounts advice using type advisor advisors, a that but our Financial the more was expanded advisors, we’re the recall, last at in not has XXX,XXX I are – the platform, And many very registered to investment AUM&A to you tell they’re to not steady. environment. would our specialists AUM&A significant So pretty standpoint, on registered provide there the clients. That’s over and business users that then not year-over-year. the They’re the wealth an number advisors would users. particularly, from platform serve of I to market. to data while client services, assign portal, and

Chris Donat

to helpful That’s it. Got understand.

could trends One, might the first are it a Okay, be even working I for is surprised seeing same my sort I are to your you a thing? question Because be as you wrong, and volatility and numbers would that actually have more least by through have – a today, like way but more little just it the And it. your ask of quarter. the but better with math, explanation is redemption at do any thought other demographics that? way, calculate redemption looking which me looks number annualized then for it, that multi-year at low

Pete D’Arrigo

with allowing the – technology, advisors in quarter. we, platform. to have the all what lower. is little Chris, that at a sorry, maybe you’re closing stickiness redeeming making or think, I I right solutions the accounts No, bit without that necessarily came much way. few are know you’re Again, allowed yes, on available accounts platform more changing it’s number portfolios And has the of looking just a in the it accounts, The really and impact reposition clicks on seen one accessible

experiencing we’re any kind quiet from that in way, perspective. quarter volatility that that the continues of a really may if So but change, prolonged

Bill Crager

Yes. with they’re Throughout been their just out to And and a they whole period, have engaged advisors. very COVID, give aligned shout clients, let plans. I me – would this throughout to

plan. great aligned coaching, with advice, And plan. tweaking job to advisors you people the of planning-based have stick So and done a are nurturing,

industry I in fact. But we’re the up know the stepping a advisors it I majority to and something so jobs, that’s assign And think Now that data we so these And sit years to upcoming an their one. also quarterly absolutely offered. seeing a doing a shout of navigated speaks out point. data our that the and quarters, it’s It small we’ll on after are it’s advice to it’s assets, but it’s because many point, they’ve quality incredibly. being of important can’t

Chris Donat

Okay, for thanks much very that.

Operator

Next ahead. go question, Surinder with Thind Please Jefferies.

Bill Crager

are you? Surinder. How Hello,

Surinder Thind

you Yes, pretty How are guys? good.

Bill Crager

I’m market doing well, thank you, today, despite the right?

Surinder Thind

Fair challenging enough. It’s a tough, environment.

of way fare just quantify what just So picture on guys understand versus of to the big your additional some more maybe about can sense I maybe model. you’re I maybe there. dynamics. are sensing volatile, where also in that, can as AUA-type where following obviously, of from up terms think the kind you’re It correctly, color that talk can of true there’s were for provide the And an you an advisors projections model growth. AUM in wanted market well? seeing But out preference a organic that that more have then just the I question sounds any also like are you flows? when clients? that might the Any kind gross dynamics. in impacted sales be of if versus just they those markets a remember bit about there’s if terms of – little you And Is some

Pete D’Arrigo

our growth. competitive with of highly had seeing advisors. color mid-teens XX%, – we assumptions the low in just our Bill terms think Surinder, this is again, have year think still that to not expected. asset otherwise in some came and we I’ll But can in which get on is of healthy where that mid-teens be – we marketplace, terms the of the Yes. at Pete. to QX closer growth this might are. expected what in start organic I into yes, about we would

Bill Crager

Yes.

kind year for looking XX% the the Surinder, modified about real And asset were year, add, so we that any we beginning We’ve forward provided industry that. quarter. slight look But to would at planned provide uptick they’re the would to some a during And want that for XQ anecdotally, as as we as of or had organic But the softness. don’t to continue each to the just I And up change comes of volatility I we’ve we during – AUM has We for say, year. seen every quarter. outlook through talk to the of something our XQ, may rest beginning into beginning industry-wide, anecdotally, the quarter. and look of today, data we’ll I I this we’re the the clip the period you that’s of as believe. if were continuing But day managers very at reasonable, to up the along into we the managers, well, again, you this you grow quarter, look – look where Anecdotally, and outflows here. time. asset the feeling people’s get of in attitude through of

was did we we what forward. outlook a provided going So reasonable pretty

Surinder Thind

pursuing answer them sure Supreme any options, came the the right potentially may appears of rationale strategic of there I’m obviously, Obviously, or to going And leak on talk on based was confirmed guess is not not. them on. answer market a more just or here. that, Can saw you Court. regarding to leaks wrong or not. not are we media a you And I itself Justice commenting in But what effectively there’s not the then obviously, then whether sense at out enough. Chief or Fair be the leaks the the what strategic speculating be philosophical question. a about

out rationale any the that be the may or the there. strategic you’ve just leaks color path So regarding that on chosen

Bill Crager

that think I there recently. because from on I many these guy the salty And S. that would more them. a was what I Yes, and there them and are walls. two. that and there of Grant, walls, say a Well, the young something are the I salty you underestimated they it who’s night, with that at West you in asked of next hear read Army, about holes question on and appreciate Surinder, a always guy Texas lot, were up said, Ulysses came was in get of And how horseback day before Grant, count them. is XX the there’s It they’d Grant

am than Surinder. we’re we’ve noise. I not clearly that’s on I’m But about it. don’t any it. head I of on dwelling it, it, as does So believe always little more down But would hear and I execution good we a there our media. down lot we to – I’m head focusing. it. a the not said want. it It’s on any time thinking it, rumor. on there’s told we noise announce strategy. would essentially something to of are earlier, And focused going what to I If the comment was spend

Surinder Thind

I that’s response, Okay. appreciate Bill. that – No,

you for and that’s two questions. thank my So

Bill Crager

That of philosophical a was response. kind

Surinder Thind

there’s Yes. right multiple ways So I address appreciate or that because – that, here. to there’s wrong it can be right? answer no

Bill Crager

a Yes, I appreciate that lot, Surinder.

Surinder Thind

Yes. Thanks.

Bill Crager

Yes.

Operator

Next question, Patrick ahead. O’Shaughnessy with Raymond James. Please go

Patrick O’Shaughnessy

afternoon. good Hey,

able exchanges? demand have of to wealth online? going various data is ahead do to building view solution time when and the that a of personalized adoption and you see guys sense of revenue have Are solutions customer kind you for to what pipeline of come into So

Bill Crager

have Patrick, quarter flows on solutions. into a ahead visibility about we

a we that that parts parts. can those, of close In that and we historical the platform. sits rate solutions. and portfolios what are So is pipeline proposal – have on that timing proposal understand Those we can pipeline in parts the our in have are There portfolios. those. understand are Those understand, we

we yes, there. visibility So have

business spending, also earning. they’re in our are data visibility We have people because

– and the an understand and the that, something verification. begin things anticipate usership also to like like especially to begin can You climate, from can around anticipate activity, the you

So we our data visibility ahead. with have do

Patrick O’Shaughnessy

to move X% think I I X% a you. market million remember of then, million to move Thank Helpful. Pete, million correctly. of the of EBITDA spoke to And quarter, EBITDA, impact a $XX then that to if slide last it. And as speaks Got at $X impact. $X date in you the being

in and speak what So you refined remember your you to math if I sensitivity analysis? correctly right, can have the

Pete D’Arrigo

Yes.

income equity What before X% have been flat, both income fixed and that assume time. we’ve in mix focused XX-XX to updated So move assuming were that markets. a fixed virtually they here was the markets on as markets, and over in equity the the really a similar is illustration

the doubles And so that virtually impact.

Patrick O’Shaughnessy

Make sense. it. Got Thank you.

Operator

Thank you. I’ll now turn the call to… over

Bill Crager

XX Yes. right? I’m nine sorry, months, think, also versus it was months I

Pete D’Arrigo

Yes.

Operator

no over remarks. I turn are Bill now questions. will the There call further Okay. for to closing

Bill Crager

everybody, I you, Thank for evening. this joining call the the Envestnet on want everybody team. to thank

You all are things. driving amazing

extraordinary speaking the quarter. everybody very I much. and I week Envestnet. tonight to your ahead and you joined of and for Thank look progress support making excited the who thank We’re for want Envestnet, for to with forward everybody next And call

Operator

concludes This teleconference. today’s

this thank for at lines and You your time may your you disconnect participation.

Envestnet (ENV) 8 May 222022 Q1 Earnings call transcript