Earnings call transcript Q1 2023

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

Operator

Greetings, and welcome to the Envestnet First Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder this conference is being recorded.

It is now my pleasure to introduce your host, Pete D'Arrigo, CFO. Thank you, Mr. D'Arrigo, you may begin.

Pete D'Arrigo

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

I'd our a Investor available our noting supplemental by being under website like begin to the call This that be Relations of associated as is website available XX-Q at one-month envestnet.com. Investor live presentation Form of earnings will will Relations the be and section under webcast section well. our replay and release, press for

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

certain the most reconciliation During financial comparable the this call, to non-GAAP a GAAP of X for disclosure on supplemental non-GAAP our refer non-GAAP the measures Please presentation of financial measures in presentation an supplemental measures. Slide we the financial these the and will explanation for statement be referring of non-GAAP to to appendix measures. to directly

Crager, After results. open Instructions] on as XXXX [Operator an well remarks, as Chief Joining the I call Executive first call a prepared Bill quarter the me update company will questions. we Envestnet's overview is today's Officer. provide to Bill and our company's will of

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

Bill Crager

joining for Thank evening. you, you, Pete, everyone, thank this and us

strategy client that's the opportunity very of and footprint, a inherent by Envestnet in leadership our XXXX, took stance in was unparalleled services more deliberate advice, economic anyone driven enables of industry clients solutions. to and breadth services our more years powerful our been invest to In institutional to partner to provide than need and scale connected understood that more We would holistic a connected better that a innovation. that announced ecosystem

We are the category leader.

We are position. deepening that

share. market We are extending

investing strategy are for the growth Envestnet. the for into and industry We

banking solid line. represent Despite the drive important EBITDA line revenue very created to ongoing of includes the macro results segment We've bottom environment, ahead and and client of which in of with our that an saw base, essentially and leverage banks will Envestnet's guidance. first XXXX upheaval top quarter do continue

are client annual advisers, from conference, engaged of Elevate We Colorado. there. just our and best in with decision-makers A record office Summit our team Denver, our partners number back home our

better telling engagement and advisers We're the enhancing are our industry. with data. most are us integrations a are best the driving powerful operating more for clients digital marketplace the business connect more to tools delivering with that we infrastructure easily solutions, that experience delivering broadest empowering made saying the are all clients in They Our our is of system, set them. intelligent

I and over and deeper Envestnet Denver. technology, growth. can By this driving more utilizing heard spend offering client advice in time advisers holistic, connected engagement over again the

translating is us clients of their platform increased of our in and Our the us. consolidation back it with and significant to playing benefits for are activity strategy, our business

is industry That's importantly more the is paying position to deepening for our off, we building growth. drive value sustained increased capital but in position both years, we're years long-term allocating been market have, in to ago, the XX and investments creating the by profitability leverage growth, enable and competitive advantage. has operating we For why sustainable than Envestnet stakeholders creating driving market creating past innovation, two it scale and

periods. markets have historically and market the costs While managing we're during difficult time, at good same we as both

market. goals, we building sustained to the understand, in, we is our making plan, consumers for Market a the environment and market progress an while pay willingness significantly of estimated and financial And for margin it’s a managed the and growth do. we're want tailwind EBITDA to highest this executing is XXs. we're some still U.S., cycle In expand. investor’s that have last $XX we're their frame on encouraging complete, This macro Envestnet's expansion investment trillion I again growth operate This to important also the advisers Our the period advice the to opportunity mostly has continues dynamics on of despite but towards quarter. work experiencing. What's that is assets, are to our decade headwinds over growth. is increased among in

is strongest overall than channel, advice positioning, independent where have the the we market. faster First, growing our

gaining assets the and utilization healthy, of In AUM/A from these flows flows industry asset you billion, share. to market in were of those in and the an when accounts quarter, the continues zoom These total segments, fastest. are managed first all and ground. moving assets, especially data on includes half insights, more more in rate We're fee-based Secondly, in representing of specifically channels, annualized is industry's currently organic gain In and the industry. fee-based just also very by UMA growing technology-enabled And offerings are broader direction. growth Envestnet's context capitalizing which over XX%. net $XX of the the industry

quarter. essentially across in were long-term flows fund flat For example, mutual the first the and industry ETF

million, accounts by to reflected X% first year-over-year. in grew and services activity, X% more reported quarter-after-quarter. to our was thus organic growth been the adviser of that delivering more is the average have advisers. This public quarter, That quarter, In and number which we've X% XX%. utilizing far outperformance, at our considerable per annualized year-over-year between on is the grew AUM/A X% this accounts asset more Looking companies growth XX.X for compared platform

solutions continues solutions. workflows, Our automation and to and monetizing operating We've modernize better for personalized accounts. integrate deliver direct grow our and services investing to our like their overlay advisers new and platform the indexing and new leverage investment increasing to been processes clients higher-margin through

organic challenged more logos as in We're markets, and and new more cross-selling normalized renewals our by clients, since choppy are will and be our but we'll growth we drive rate share, yes, conditions. with gaining year. up side, more conversions, going and bookings last revenue new pipelines the in winning significantly are On faster well solutions deeper that

share highlights few a of we're this impact the seeing that me year. Let

comprised existing flows platform. had our a solutions we Our these worth custom advisers who the and had investment specialists billion These investment of XX,XXX net approximately to universe portfolios solutions; all of who last are in our billion leverage clients. growth, our and net construct In firm high for now their this products advisers gross from a on year by program. To $X.X highlight the their of flows first access access high we billion project and drove XXXX with high of in indexing. XX,XXX in advisers. adviser tax and quarter upselling $X net advisers We're penetration year direct $X.X approximately footprint worth increasing worth overlay of the flows and of increasing

these flows grow and carry fee of expect to to average continue We rate points basis basis solutions XX an XX points. to

RIA we $X where firms assets, channel, to we of billion over integrated this software billion In our have currently our solutions. end platform are X,XXX and of of using by forecast the expand We $XX have leveraging we the adoption investment year. management the

space Envestnet. product, The solutions adoption we're segment retirement segment of advisers by retirement credit. insurance to for as it revenue end we'll account our XX is making provide Fundamentally, beyond specialists clients. increasing another of solutions to easier alternatives, important just their to for growth core and XXX(k) sell points. business-owning solutions points to able We're also basis opportunity other such additional XX drive be our we basis our As to managed cross-sell investment beginning

fiduciary expands States. with and capturing in retirement partnership at basis the the providing data We're the mandates; footprint United created providers Act including Envestnet's the delivering firms newly plan basis wirehouse, regulatory of we're The revenue signed fees We're integrated platform. range winning service points in new opportunity a subscription a and global to for tailwind Empower, logos winning X one lift the agreements XX,XXX X.X new a simpler, with announced that X by points. largest recently technology including adviser SECURE solutions and a from is and with

launched we've holistic environment in more integrated an make even delivered data analytics Lastly, through data our actionable. experiences digital wealth our that platform,

since Insights capabilities very our to as Our at last as September Summit soon from want to hands clients as our client outstanding because possible. their cross-sell week prospect Elevate we our feedback was unique pipeline had The firms doubled advisers' get and into like Engine. are able insights

XX% why: million solutions, we deliver use publishing Envestnet today of adviser's cases. XX range wallet drive Here's in average solutions. an practice, revenue deeper broad use different they share organic outcomes on XX are of and more these our client today while better Networked a Insights can across insights gain of to

grow turn, these Envestnet investments, integrating our of clients. is because can segments, we our Engine deeper more to the giving them adviser Today, our today, Today, our average help them and us we we more on And with in technology in and to know proof the important are of [ph]. right all the financial serve to grows platform. connect tangible by win of XXX,XXX can In advisers the asking us go XX%. grow we clients data Insights our

controllable expense the the drive On while near-term. costs to platform we've side, greater in been operating leverage modernizing managing our

peaked cycle XXXX. in Our investment

X% XXXX, For is adjusted environment. operating for year-over-year our the despite down approximately forecast expenses inflationary

reduce errors continue automate record headcount continuing trades to to of we we number of the We lower and last service with efficiency another quarter, processed We modernization. number support serve. are million from that fewer tickets requests gain XX and as

We Occupancy office are continue costs down footprint to XX% and space. since reduce optimize our real our estate XXXX.

infrastructure personnel. doing with are more We for before, operating but than streamlined it doing fewer ever more clients and we more more and are

has business data begun environment. an outsourced Our to leverage

Our beginning of expenses. financial revenue carefully just of driving new be investments leveraging in service efforts. are this: we're experienced Bottom and each is to line for to while our operating model The managing efficiency our multiple higher-margin modernization in wealth leverage benefits streams, business results. these beginning is our

by All our propel adjusted EBITDA XXXX. margin target XX% of this us will towards

and keep from greater competitors. We engagement greater more our to value more creating the adding and clients drive ecosystem our creating on platform, innovating will distance for our and to

be by portfolios fully is has integrating year covering it share is operating platform. best-in-class and to very engine, XX,XXX And not credit, which and live scale invested what the our utilization advisers in this of available of end Envestnet is next-generation that and data only the is that's a solutions, proposal firms this for X,XXX of allows adoption, piece advisers. technology Let for user to rolled a to of me take out, by our driving all moment also the enabling engine examples. the scale of because more entirety insurance, and the network will being We some so important financial administrative center ecosystem, company. at the This friction tangible speeds we service offer proposal of critical of of reduces one our entirety are just we all our plus planning, personalization the experience, it investments, of the at of in ways

creating interest with FNZ on solving in Our at Together, highlight the partnership the FNZ and we're we was for challenges the in doing is the the marketplace with work are and standing-room-only summit. industry tremendous discussion is schedule. real

are around for to our related participate market, the that of significant, plus exemplified market by hitting have the map around basis points. build through points broker-dealer the it, an first in We And perspective To flows is our see the basis little to in starting of XX technology around FNZ the out to and that gross economics begin a world, plus option. RIA or FNZ, and to With the average road economics X on put annual every time, by color platform end milestones year the those and runs in we Envestnet trillion $X this expect opportunity we in gaining all year. in we'll the traction XXXX. end-to-end all be custody

We are making considerable progress.

I leaning clients results. with to It's our made the making the is as am we're are and important in by deliver for energized reflecting clients progress the the and us, to impact our we us. understand validation we've deeper. market going Our is super Envestnet

of our outlook I'll over to turn on quarter's the details rest performance this the will for now year. and who the Pete, provide call

Pete D'Arrigo

Thank you, Bill.

the quarter continue XXXX. impact first of strategy our to anticipated Our reflect from XXXX the progression results into and

volatility, quarter, on. inflation, the market economic regional continued environment of brought so During first further banks and with the uncertainty liquidity regard to

the impact Our taken first actions and demonstrates model the quarter our of environment. we've business economic current this of further the amidst attractiveness

of profitability. a streamline longer-term first the announced had sustainable included higher of ways, XXXX, expense levels them In our more base way to for rest about our We XXXX XXXX. deeply and think long-range to our with ultimately in you and of and working revenue we the want XXXX, and the As clients plan context began these the paving growth in I remind performance. operating company, in quarter better financial of in organize fully and the more we investments

year delivery first a and the quarter of expansion. on margin into the result execution this Now anticipated beginning XXXX XXXX saw QX We in of sequentially becomes focused with XXXX. the and of continuing

the million, $XX.X adjusted For adjusted an was in and although the on quarter, $XXX our have challenging to $X.XX environment and first clients, approximately million QX. revenue EPS was EBITDA impact was adjusted continued

subscription asset-based sales QX. professional Our our QX and in business the both both some release the earnings segments XXXX QX impacting difficult of cycles revenue extended produced out clients, of ultimately services prospective the guidance This in and dynamic for in economic affected and clients in with prolonged and rest segments laid environment cases. and processes is time the Overall, a decision-making supplemental for and presentation. in

flows pressure, revenue and the positive flows industry-wide by asset-based more continues products. net relatively segment services remain wealth professional in the experience under impacted our to economy. was While Subscription

due Our crisis. a of The rest outlook number data year higher QX of potential tech increases. takes We revenue markets & put banking the spending of on existing the extent Data year smaller had hold by for the throughout consideration, to a segment some and the from number further clients to challenges. affected offsetting liquidity into on-boarding rest Analytics delays clients saw capital regional of a the

pipeline. making encouraged remain the the we're overall we the level and building However, of by interest progress in

to revenue EPS be For be the to EBITDA adjusted $XXX $XX $X.XX. to million, to expect $XX $XXX and between and million million we adjusted be million, quarter, and second between adjusted $X.XX

billion $XXX $X.XX. EPS between For and EBITDA $X.XX we $X.XX billion, be to the and raising adjusted are and $X.XX million, full million revenue year, to our range of and a guidance of $XXX

with the quarter from Elevate based changes revenue XXst. QX Our of prior seasonal guidance Also, as any the cost levels does assume and revenue end markets in services market carries not to always March and a is increase professional in of Summit. on capital as related it

for the the rise highest Turning pay to taxes incentive ratio majority EBITDA. March equity in debt the $XX our use below well we million, high the compensation, employee balance employment times in of as with Seasonally, we compensation our first X vesting QX as of just net cash million $XXX quarter cash giving as the of significant to dates due. making always sheet; ended most leverage and is

this Additionally, declining with QX as in revenue year. the quarters decline expect through expense, to managed last the impact we year to we've severance asset-based last it QX our of from XXXX, carried also of of capital three the markets elevated and year which in

point leverage times high the first of We end X.X expect in the below dropping the our to year, for the be the of by year. half ratio

Thank it we I'll for remarks. up you Envestnet. final support Bill for his before turn your for Q&A, And back of open it to

Bill Crager

Thank Pete. you,

committed delivering a to. in market succeeding what we've by is Envestnet challenging

executing and have significantly all marketplace. understanding leading marketplace, through we the to position for the our deep of is competitive growing on through This the leveraging We're our in expansion. business team. growth Our managing margin drive delivering our a is clients this scale in a work future serve stakeholders. to a and of strategy, today expenses hard drive into We're and and organic investments our dedication and

invested of XXXX expansion we've doing that in XX% we on progress throughout building in, said We're are margins reaffirming what and XXXX. do. our We would we goal the driving EBITDA margin adjusted

our value the this well They operating gratitude He's I with clients. into highs I the recognize and the tremendous as deeper trust higher-margin our Envestnet every company of to tremendous efficient. and the a turn, them and modernizing are Chapin. support more for We're as an a hardest journey our and for on to an pillar future. solutions. provide a want special Bergman. company's we the today Director integrating leverage, during also We're been Jud the shareholders. growing and steward following retiring they thank of to our clients platform of of has clients We days incredible a in want very and also it essential the the death add becoming Ross increasing immense put to been At note business steward behalf in Ross driver us. the for of going incredible

Envestnet and driving the to you Finally, innovating, our drive you end business. of the team, every consumers, execute, day of building, success the millions our enhancing advice success millions to of the and and are clients

client one conference, of doing I extraordinary. are said thank week at As what me ours is to last you. you the

operator questions. it Now the I'll for hand to over

Operator

you. Instructions] you. Thank Thank [Operator

line the from with comes your Devin with Securities. JMP question question. proceed of first Our Please Ryan

Michael Falco

actually Good is for afternoon. This Devin. Michael Falco filling Hi. in

Bill Crager

are How you, Michael?

Michael Falco

Good. the budgets advice is had bit for pressure you pretty there new maybe some both for you across seeing asset weakest, cycle can has Are this space? under by you start, grew product press been enterprises. overall and give to healthy Good. Maybe quarter a us the a but your and and to earnings solutions flavor accounts, flows of demand strongest tech in being of And where channel? by where it's financial little around

Bill Crager

there I I – would in Michael, say is very, activity it that our would pipeline. characterize this strong very deep way. say Yes, I would

that is of the we and that? bookings up are So late-stage of the our as there's look end a interest Because subs' in significantly XQ. offer. pipeline towards keen we Why capabilities lot

new healthy business, our as is be the segment side in to that we on of quarters headwind side, the side work data both a our our in to sure to on make got deploy our them few showing focus Our capabilities And of technologies, everyone's the platform, out got the that we'll bank are through data strong we've we going deployed, our kind and all who as as really also with be wealth are push data project. on in the of then clients, – new them the of in strength. logos the the signs business that is year the segment. pretty pipeline wealth data there. in the RIA pipelines delay financial banking particularly and planning Again, rollout Where encouraging pretty a logo in anticipate business some – we there's well, segment. and bookings been And are new

Michael Falco

artificial think And sense. for intelligence switching ton know on a remind related, applications focused been in AI for applications makes maybe efficiency But gears there's us from follow-up, tie either new an how just Envestnet maybe how you attention you That would for that's potential to for the then about some Sure. mentioned a my time. and gaining you you've bit; or the area revenue And little been market. firm? time the around modernization. I for over new that opportunities and then of existing

look whether with helping efficiencies drive model, drive into deeper AI can you a by are there people base, more doing that's broadly? just efficient more As or the that ways expense actually applications more your

Bill Crager

in Yes, in and data the But stewards traditional capability use leadership it spans absolutely, and plan, Michael. today a plan. of very in being people's from And that kind at through or carving our really in beyond I strategy the using Yodlee our financial the about wealth data ways into the is activity financial and position our looking set AI. category, this into the we're portfolio of set, responsibly thinking data think we're daily

for insights doing goals. financial or long-term at suggestions connect can advisers their customers So doing lives engage financial to their by daily we we're scale. more deeply and can people's that that we And create to

that et be different or might our of we'll insights The coverage, cetera. risk cetera, taxes XX shy XXX across case about publish cases. million or and around of today, for So use about ranges insurance et network, just those use

their same-store average of surface we platform, for client them current the that So our we an adviser on opportunities more clients and today. the and are deeper. these way macro that their set we're of look could on at grow for Envestnet looked insights deeper we're that XX% the going insights, can advisers, surfacing pinpoint with these at we saw financial they the that based or insights we creating to the go and do When

– work clients need information services is that they of. likely client they're that's So and being its because highly provide in coveted they with can that,

to who look other that we annual our are we conference platform. at I closely, what so only we our that advisers Engine. on does, advisers that Colorado, that was at data and in to Michael, And room growing as more are were using at see the standing last Insights related even insights, mentioned our faster week those the any Denver, our session data platform than

want and for of their so back end the growing the strong. And of platform in our that insights there's and is end demand. advisers data very, pipeline hands, at or pipeline wealth the Firms, top that very insights

platform And advisers and so and that to quarter, quarter and we'll insights more be more more and next more deploying data firms this and wealth beyond.

of at what very going think going I of steward adviser with on is the in encouraged navigator, And message we're and provides at is household, that be money cockpit, with day, we're that at human to the the the to is more But by going is So lean equals relationship and end the trust. really that them day, helm more what is to the it. them the really the AI AI in the around end that be important to The of enabling. support and with the relationship. utilize scale be that back mechanism they'll that's a them

business, standpoint, business when an its our to and we From be where administrative-heavy or operating administrative need look scaled. at repeated processes absolutely, regulated

business. the that inside realized ways to more just into And is the are really given the beginning modernization issues, just unique our intelligence can so personnel. tickets, our technology to so service we administrative respond that versus deeply utilizes routinized efforts and scale in heritage, in which again, that's and type that And more and our support building industry we processes data be

across blocks, the that last the How personnel and that did with trades take that's We and at, enormous a the XX fewer of a look number that lower errors company. do also that? that's example beginning You to And a of we noted trading support really volume. We inside service guess root execute of decline activity. requests. experts I the many kind my that lower do quarter, in one that plus intelligence platform what, of use degree trade just tickets, have and million prepared record of we remarks,

Michael Falco

That's great color.

Bill Crager

you, Thank Michael.

Michael Falco

Thank you. the back I'll hop in queue.

Bill Crager

Good. Thank you.

Operator

Thank you.

Our Please Cho comes with your from next JPMorgan. question proceed Michael question. with

Michael Cho

you But I just top guess Good out Bill, guess and appreciate to of platform there terms just of to incremental the plan, and Hi. and to afternoon. kind a some question. the clients the but too? I touch I'm around also just kind any for you. to you sense, mean, wanted there, my could And partnership. packed line curious half my – I'm XXXX contribution any can the color is you rolling taking in color again, rollout just FNZ get a I plan if it it's us question Thanks mentioned a seems mentioned margin. to then I XXXX. once on the the numbers and give of of appreciate of conference room the solution It by better of Thank all the live, we trying at gave. end for you the you second custody is, rollout the

Bill Crager

because days. in hard a workflows, the sped then times, some streamlines real-time, Michael. new were activity, awesome, five real-time but in happens in the this problems and many for in time day, we're the so for made becomes – reality those during right? rooms the Denver, that environment cycle full made our because that clients it's partnership XXXX, that for not it open a is for to a day are trades And and it's five that's really our provides the opening; digital, batch the a the during more partnership, to solve With it's average all account a the And solving that Yes, And service couple begins lasts minutes, right? you the bring So fully of to business down to industry. also overnight. seconds, paperless connected customer account execution are becomes –

capability to is expectation something, – So the everywhere it lives. When our really something. the we that next-generation do to that is – something we have does up what XXXX this else machine catches ask in

And so company, for the large high was which I we're because this back only customers a both go from week very that takes and time, excited as think our you and small I serve, And interest a to takes about accounts of it, terrific large degree is it or last a not week of number a our there's to you labor. rate lot accounts. on error that of do patch-up higher to administrative have large, probably administrate, open go

lot relationship of FNZ. will just utilize. an be to choice. speed out, it option is opening think So of really, because network with this of and is of of solutions firms It's going FNZ But just to going to I the as take a our the a just viscosity friction to the for account or access

customers. we We much partnerships all continue good the with our work great that relationships and those and entire industry, and to have very deep the for with, custodians enable pretty

we standpoint, say exactly that We've all schedule. rollout from I'd a on project standpoint. hit the need to From we're a milestones

– a probably a contained of select clients We to reasonably deployment by will the do partnership year-end.

so for EBITDA get we partnership to and in going. from XXXX forward, contribution of as beginning in And revenue a XXXX, look you this look

around that will great FNZ, who be expert on hard I'd we emphasize right? our some lots other ways and just the a this partnership, through ton not through partner about has in we're here partnership versus taking and do of this in of and it the is environment the how problems of that on costs, We at kind the really for and administrative enable thought The note administrative global really customers cracked kind burden taking globe, they're our here. on responsibility of

adoption, So good it get see high-margin as what us revenue we're as we I I pretty we I doing, see a interest going. in roll this out, for see also being

Michael Cho

so you Thank Bill. much, Wonderful.

Bill Crager

Michael. you, Thank

Operator

you. Thank

UBS. with from Our Alex Kramm next with question your Please proceed is question.

Alex Kramm

Yes. evening everyone. Hey, good

Bill Crager

Good evening.

Alex Kramm

obviously question really, things mean, there the the that, I guidance, here run we saw came maybe this here up EBITDA just updated Nice performance? the to but cost other see on year. just the through some the start, and contributing the is on to for full delta Or are is it. as one just maybe margin So EBITDA Simple side? market

Pete D'Arrigo

Well, the way mechanically we've it's reforecast. mostly mean, I

As things two of new at on that there than a reflected is of in two that We've well client clients offsetting in upside of as extreme kind for is I certain of and the as some we've out prepared both on and remarks, on-boarding what's the from the new pushed based that, that kind the maybe guidance, the the less bit forecast. as there guidance, adjusted logos. delays average, to we've markets quarter all probably little the discussed a But two, impact. expected is

Bill Crager

And the spoken the on the effect tactically business. only very, being wealth we're that to on you of I'd of of some beginning is every side processes also our but Tata beginning what take get ops benefit kind the this leverage company, you're – And cost Yes. that we Alex, expense to operating very add what across conscious have root. is year the data about. side see we're beginning to full the the in What that the and automation is modernization relationship the year of from

core – And This so banking onboard through so as resilient. issue a our we're in some line we're and of roll kind new especially clients. pretty thoughtful to when climate, being at top of these kind of we this operating operating is to the about client is are unknown base, going we climate XXXX,

made, that EBITDA simply roll platform bottom reiterated line, the will and XXXX, our just roll and us just the XX% respond that will we've to the we're decisions by XXXX. and XXXX enhancements the This beginning through into which and to executing. we On is executing of adjusted

Alex Kramm

the I And in also so assume, on maybe I is higher. actually what seeing then think clearly and there. maybe but – also on changing. side, assume. Maybe much you're are review that, Behavior I just just out summit had one, something secondly, adviser of the then environment. income a is type finding new, been not we've year-to-date a completely quick Rates fixed different this but ourselves

fixed so, Anything been different watching that So than reallocation over so following more the environment? should the that company? into of decade the for we've directions change is there rates? flows income if last does were maybe we out because And the as they pricing be to or go higher

Bill Crager

great a going board, the you money I changing, have to things Alex. bank across think deposits. bank you've are are right? observation, behaviorally, deposits It's The So Yes. And got markets. – your

data. You very I year-to-date mean, flows and end, at markets up quarter money a XX%, quarter-over-quarter, the lot they're or think look I track we in of significant, by the

to the your is able interesting doesn't what is call to we're the is answer, I that for analysts what get anecdote, Alex, was quickly I'm to – going that we this interesting banks the where but see on that see, did went and an So think can was that just very to to and money bank the markets. deposits dollars of transition market worth to net of And particularly from the high money interest that. us

a the had banks average deposits lower secured kind outflow high put. stayed or deposit at the to whereas money beyond of markets, the value So

So they XX% at where a higher at rate. a deposit rate, X% moved the moved

of short-term of fixed to So instruments income client. overall on you – they're longer-term right? the shift So now at fixed money, and that's the mix and They're the is that very also can at returns looking looking significant instruments. income fixed the from a allocation get cash that in adviser that, from

kind uniquely innovated more we work seeing we more done, idea bonds flow that rebalancing. we fiduciary as a and and ladder we've So we've of are We're portfolios and the seeing position overall there. of part for specialize bond clients. a But this also that can can

product, an direct And are that kind commensurate equity-based into index is type of our business, with portfolio. which we so DI flow seeing in

Alex Kramm

on worried nothing fee side the be we or allocation as should about So anything else change?

Bill Crager

They're I've advice. really in No, take And that XXth all what know advice in motivating bank this markets do good at that dozens No. their many – kind using motivating money a do? advisers March is question not what do I at what meaningful. is that the dozens a here, is really provide do. the of consumer, to It's and to I this Valley got connected their be is able not holistic of more market adviser money. going look since money their because asking into this Envestnet, look clients they're advice go able Silicon advisers to a holistic it's offer to is this broader but to taking don't going Again, necessarily I how come had, money package them. and is conversation is adviser that benefit back to a a real going that for is times, to and more to that

Alex Kramm

Okay. very Helpful. you Thank much.

Bill Crager

Alex. Thanks

Operator

Thank you.

with proceed question question. Thind your Please next from comes Jefferies. Our Surinder with

Bill Crager

Surinder, Hi are you? how

Surinder Thind

Pretty good. guys. Thanks

Bill Crager

Thank Excellent. you.

Surinder Thind

start and with I'd Fantastic. licensing and I about data the question a the specifically business like subscription more guess to analytics.

I the the think Or that? challenging on have sub-segment go-forward quarter-over-quarter cited, basis about here? renewed this given that you've that contracts, how a forward? Meaning so should Just be at should assume, going revenues stable we basis point, on been think how we given about environment should a

Bill Crager

So in the of got rate but a the going headwind the seen right? subs on So Surinder, the business, the occurred what was by fintech quarter data think consumers in predominant what data research I there side or at are have that's say that rattled SVB the I that one; rise business, type then absolutely that the VC smaller probably and the headwinds over I because look we've quarter circle say the we bit as would delinquency PE-backed those the to companies, just in remains end quarter first economic condition, a business. saw headwind, I'd the been at in that companies of as – research we and fintech on particularly I'd

here you are look we couple things know. as a that But should of forward,

that really overall funds. data very research data they that the advantage fairly choice have set and is data consumer in sets on-boarded, became a sets the Utilizing create data competitive typically for base the on-boarded offering. data hedge years, And constant I say, who a Envestnet would set been are Envestnet the product. distinctive from last our consumers has there's been We data contracted over really enriches that three interesting research the marketplace. to

in get we're very set, data the us But the had has for have research occurred, side, a to the on as is data very of the XQ to by year, the outlook I'll the for the challenge rate attractive half consumer the product. users encouraged a me bookings of of research a pipeline resonating long-time. significantly a given also year, and get the deep also quarter, them the this end we not is think we've the that And been encouraging second real things this competitively the have it's for And see and got the pipeline as back and give that lot the increased a deep that of enhanced to bookings and our back we've – in So of enhancement both as that XQ repeat half just subs we that we last to differentiated set; anyway, quarter. but offering. of quarter base research, to around kind interesting and we visible we the and the our for then we more in

Surinder Thind

Slide the more business provide related then first-party really assets. actually and that you managed the XX AUM/A helpful. That's switching to kind of and to on it. Got disclosures specifically And the

Bill Crager

Yes.

Surinder Thind

the subsegment there? first-party a Because managed that little of are a assets bit about the talk you seeing Can segment. account AUM/A you're growth

it's in And so AUM account when this X% I look at actual at below the growth accounts quarter the growth. the rate

helpful? there So would just any be color

Bill Crager

Yes, absolutely, Surinder.

always – glass there there's to full. than the at half is, look dynamic I'd the and more So like

PMC leading ETF-based marketplace towards strategies we marketplace of shifted portfolios. fund really in wrap accounts, the that have strategist And for the mutual Envestnet offering right? built so And that industry, period. the So is strategist part is has the

outflows first those recently internal the mutual bring wrap-type transition to the to portfolios offering. competitiveness – And and ETFs, just to those so there's a there. That we our cost portfolios launched fund able headwind will portfolios, regain and for for more ETF-based begin said, so and some our of be proprietary down those

been news those but we've managing. headwind a we we've that seen there's enhancing proprietary the that built. is got And marketplace extraordinary regain our the everybody good portfolios, some So is that that so negative headwinds some in we've against that we're this we've competing traction. can that mean I

keep the that is lot rate flows they're contain those assets and important, of the who assets, we're any we've the high That rate but and are that accounts each assets rapid than solutions this connecting our accounts at as on. what I called the focused new services are to in is of stacking We piling past that Surinder, values onto and of advisers our what's very at we're well adding at but And worth platform. in And call: I've there, adding is really the direct focused is in a focused opportunities accounts depressed this overlay spring, our these and that faster been grouped net we've a and coiled capabilities. rate, as other. a a kind on adding faster building as on, And momentum advisers indexing, that with our really highlighted in really at enthusiasm. platform. And

interest RIA loud in net and high interest managed in retirement, Denver, clear, Last interest was DI, type in interest worth, accounts. in it in week overlay, in interest

insurance spent on that worth, really FDx, high in fiduciary, our in So are retirement, kind into they've the we I accessible to and platform, and continue of build. net RIA, modernized proposal expect environment, time important also DI this been surfaced, overlay, in that momentum I will tool, those more and noted

So the than you. I for lower in highlighted just products really portfolios, the the growth other accounts mutual headwind points wrap the carry mitigated or is our fund outflows by in basis

Surinder Thind

and actually Thank helpful, you. good really to That's hear.

the for thanks So color.

Bill Crager

Yes.

Pete D'Arrigo

Thank you, Surinder.

Operator

I the would further no Bill are closing Crager There this Instructions] at time. questions [Operator comments. floor CEO, like turn you. to back over to Thank for

Bill Crager

Thank look Have with all very Thank you, speaking you. to to for much. talk to very and I quarter. you and you you forward Thank I Envestnet, we'll Camilla. quarter. evening, want thank support next of next everybody your a of good

Operator

Thank you. This teleconference. concludes today's

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

Envestnet (ENV) 4 May 232023 Q1 Earnings call transcript