ENV - Earnings call 4 2023 | Envestnet, Inc.

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Operator

Greetings and welcome to the Envestnet Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.It is now my pleasure to introduce your host, Josh Warren, Senior Adviser. Thank you.

You may begin.

Joshua Warren

Good afternoon, everyone. Financial Envestnet. Chief Warren, Josh Officer of I'm and Thank XXXX like earnings joining the us Investor supplemental to found of can fourth envestnet.com. quarter on today's presentation release, call.Before press website out Relations our you Form under that XX-K be for point earnings associated our we at section begin, I'd as we Investor replay for X available be call being Relations of forward-looking This section be information. is call, webcast will live well.During our certain discussing website under will and the the a month This information our current is and of expectations guarantee future is based on not a performance. you to supplemental statement on presentation differ by the from encourage could and Slides the potential review the that of uncertainties those risks, expressed X I the statements. for other forward-looking to results X actual cautionary factors and cause can information Further SEC regular found our be filings. in

to call During a the Envestnet's me presentation our as Tom call questions. an Crager, certain Chief adjusted update this XXXX financial a Vice Sipp, in Business provide for On as to call are on to our and After adjusted and results. will this Executive for measures be company's reconciliation will as we'll Please appendix the we GAAP supplemental Bill measures.Joining well to we directly these comparable financial call, President our as fourth the the referring open overview afternoon, today's year refer Officer; of measures. most of Lines. quarter Executive company full remarks, prepared to

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

like call with year to the QX XXXX into queue results. the a back and you today our if additional get may questions.I'd full have You review of start

when X% a points of represent and over representing which nearly basis QX QX, Adjusted representing of high the XXX was expansion focus disciplined revenue EBITDA to XX% XXXX. million, was our QX in margin compared XXXX. adjusted each on were million, above results margin QX execution. $XX.X Our growth range, $XXX.X our of end EBITDA

adjusted XXXX.For was the a up was for Adjusted our revenue XX% in reported EBITDA XX% QX full $X.XX. EPS representing the XXXX, $XXX billion. adjusted QX EPS overall our from and Our margin million, was $X.XXX adjusted $X.XX, year EBITDA $X.XX we was

XXXX strong enter a turn to the that discuss Envestnet, on we the at to call over we Bill us like we have next Executive set As well.I'd chapter Chief Crager. Bill? fundamentals and today's Officer, that position of now call will

William Crager

you, Thank Josh.

be Envestnet. my Chief As call final of Officer you Executive will know, this as earnings

deliver the offer journey it financial built insights good we For courage that leader that leader From data industry amazing generate XX the perhaps I'm turnkey highly taking to to company bring share because and the and a an together in data-driven Envestnet clients. done.The guidance proud enable resilience of of industry. connected, planning, millions advisers, we've of company. Today, strong platform enhance been offering years, accounts, that idea the advisers something by proud our assets, years, that accomplished. necessary this, a of millions to the our of and to highly to we've is effectively to management most even has technology-driven, company serve by extraordinary. what that creativity, of market we've the of Envestnet management a is asset part better, across highly of to financial a very and we make worked position wealth to the foundational work be the and a is steps our privilege is the lives the families.Over Envestnet of And lot couple applying dose last is

most deliver for deepening by to talented over a free improving clients' and leverage that I value.And powers the relationships team helping have ecosystem delivering essential forward growth this of and an next to Envestnet and driving the advantage wealth are great now while serves with exceptionally want connected providing our be to and pieces road lines phase investors business of Tom? closing of I'll our and The and call by continue of the and look our advice technology, partners, overview back leadership we and future to mapping comprehensive at with impact and flow able advisers solutions. call models.Doing it of has, scale Envestnet revenue all business an Sipp, advocating We capable our strategy who of and workflows aligned competitive with end productivity delivers we management conversion. is aligned the while to the growth industry. data of to Tom industry clients operating are needs our and cash some platform the We've the client embedded and drive roster the the Envestnet. for serve industry, comments. leadership turn its partners.I and We've to for created the the business clients our financial growth, for that leads Envestnet's drivers

Thomas Sipp

term.First, context. strategy advisory and every model type winning across driving offering We finally, serve of overall uniquely large and solutions is anyone key and X stand-alone and our translating points market position Thank proof that today topics: where from shape and industry the It about I'd themes one to how key to growth spend place is in positioned than broker-dealer financial the with market. RIA our business understand are and discussing important am or drive of you, better the context in ahead are our career the themes clients; I the Bill. we alongside Envestnet driving us to our work has results; great like we the metrics long experiences into of my excited medium and it recent of been initiatives to that institutional the the and you. honor bank. business; bring an the we our industry, themes to how technology going. market time the

First, service greater to there's the management, scale digital than and greater Integrated efficiency.Another to is of fusion and achieve push more key that This platform data technology trend the keys portfolio firms technology the capabilities. them. adviser by important insights, Personalization are ever. investments for support personalization and experience. is robust options the of both a driven for is and investment and

platform there a our and continued of scope Next, drives Wealth an data serves seamless single that imperative these advisers buy is We've which holistic then provider. client benefits the our the XX% evolution from of that and maximizing all finally, consolidate the ultimately a a towards of scale Streamlining firms capabilities customers shows research successful for in a forefront more is prefer through to and strategy end-to-end and and powered to providers.And delivered view technology Tech is of the types, with solutions to market to technology by solutions. connections planning years. at of and trends advice, been

talk part rich We've of data and our series architecture, both and our and a often screenshots.Meanwhile, millions billions robust competitors accounts still. open with with about are our static live, handling rolled or most the integration continuous of to our API the demonstrated is as we standing dollars day Our within product vision features. their across battle-tested connectivity road and platform as And maps library. of of true enhancements modern not through out native platform of every experience

enhancing, connecting has results. that and our are and will market. how key into last competitive few over work been metrics the drive This the We and into continue it to years delivering advantages.Here's translates financial

QX XX% delivered wealth most revenue importantly, and versus of our QX XXXX. business growth First

rate Second, of over the $XXX last of inflows, X years, average X%. net AUMA an Envestnet delivered growth billion representing

have than We Xx the while X%. delivered year-over-year, third second X% combined.Accounts net inflows and TAMs of grew grew largest accounts AUMA more the

been between XXs of last was short-term serving X gone X.X the to rate approximately across X.X. to mid have Our in over XX.X of variables lots stable accounts.Finally, XXs from gross years. scores low our It's fee QX millions the client with

with a and leadership client another advantage. Our stable competitive base is strong

including We in management and firms. have channels, XX wealth broker-dealer of largest clients the brokerage and X,XXX XX over RIA the

clients years. Our have top with of XX average an XX for us been

the capitalize both a regional specific in service $XX transition with That and consolidation.I the can will with client clients' delivery has broker-dealer our technology vendor client started to platform, provide delivered. We and the ecosystem now with market is us the direct significant a away but upon. million $XXX coming onto more overlay the a result, of that potential be assets fundamental billion platform, puts our with A A maturity have position on solution and you recurring in made the large us. a in and tripled adviser long-time could couple in $XX custom QX, platform or from improvements over scale majority in experience not with capabilities to Envestnet account of billion from managed recently and back be growth. integrated Only adopted proof fully including revenues of promise this moved a RIA of has indexing.As a assets our points. than of for live services the the relied because trend

one to helps enterprise focused ago RIA a that to industry. with supported Envestnet client our we the very as leveraging growth. net delivering of grow. the beneficiary are been on move further has we're were the So a I'd and address where position impact both we across This like has on, better years extensive our leading a clients, few them position.Before our M&A that platform Typically, is footprint additional than and clients we aggregators

impact year in However, has resulted or growth negative the wealth to consolidation a rate. over so last our

to contribute some term. initiatives I'd medium important growth Finally, revenue will spotlight that the over of like the to

long-term where along growth longer direct a Others robust the are included contracts.Third, initiatives deepening custody for lines pricing our to client to overlay of channel adviser in of technology piece a pricing to digital technology indexing, nature integrated accelerating growth We connected business XXXX tax and and will analytics continue Some solutions, relationships. and strategy where initiatives period.Second, solutions to missing across worth, experience. will drive set growth RIAs. planning, and of managed year-over-year the rates specific our our complete due and further our the package net underway RIA deliver we to and in including progress outlook. broad will accounts fiduciary believe Enterprise achieved client of start these accelerated deeply with capabilities extended have beyond.First, these high with our take fully contribute we and our in and are personalization several an differentiation in our are

management delivering funding office functions wealth back between experience. single are servicing and custody workflows one the and We opening, our account platform in

with We solution will as previously launch FNZ. announced this

results. by scale retirement delivering enhancements the deeper relationships. platform. of with in experience for wealth underpins marketplace, our management distribution is call our to drive efficiently clients the Josh. gain continues our opportunities components like button service the asset of team business leveraging retirement utilizing mid- providing client and tools, XXXX meaningful have is to driving and competitively industry essentially revenue marketplace wealth technology, focused high-single-digits.Thank the connected and will back The on advisers And for solutions leaders. easy I'd What drive user our you. of technology solutions to and best advisers.This to business delivery momentum. growth and the in guidance Finally, then needs meet advantaged partnerships over retirement discrete The in wealth to furthers we products, the continuous revenue That our to We've turn

Joshua Warren

at and I'll focus.As results; look to our deliver second, connected to few sheet; balance minutes discussing new X continuing we things: unique first, Thank outlook Envestnet, XXXX third, our spend and our you, capabilities. chapter our at and enter ecosystem we forward a our a Tom.

and supports leverage operating growth Our and cash our algorithm free generation. enables model flow attractive

served XXX,XXX Envestnet with are advisers and those As of XXXX, the over doing Envestnet. business of advisers more end

nearly the longer of number a while start higher of of X% XX% our end Envestnet During XXXX, the and view, XXXX. the evidencing by grew grew of between X%, by to accounts adviser $XX advisers scalability over demonstrating per total has the accounts our of platform, million, XXXX number over on our of number approximately adoption.Taking grown

our we'll framework, of of to and our me revenue on management.First, our Envestnet ability expected achieve line profitability in on that across revenue beneficial segments growth consistent deliver completion both leverage to and focus accounts, historically robust to grow disciplined means cash both While infrastructure operating dynamics. increasingly let expense recurring with account investments platform expand this growth growing to becomes free flow. To our and generate costs to the focus

enable solutions Wealth Data industry Envestnet asset-based our pricing growth. subscription-based asset-based asset-based to reminder, a and our of segment. and As reviewing only. the and fit In generates Wealth provide Solutions of segment by both Solutions while Analytics subscription-based generates constructs Wealth the breadth segment revenues our I'll and revenues, the revenues Solutions, subscription-based start

our Envestnet most meaning generated XXXX, inflows had in the the full attributes an net of We platform in strong affected recorded flows to asset year, organic Envestnet retail business. in holding Envestnet are is and has market that curve of into yield are inflows into products responded since headwinds results. their XXXX quarter allocating inverted and more deposit this the from money enduring net Naturally, believe outflow Amidst backdrop the of was cash representing July multiyear to due XXth AUMA funds. AUMA within quarter portfolio has Envestnet of accounts.For their some have outside growth. billion are rates portfolios by the short-term of QX, among this Envestnet flows X% our higher faced more or not by $X.X billion public underpinned going in on accounts environment.Investors accounts, of consecutively.This money Envestnet growth, has net clients During consistent consistent one of QX flows a because $XX.X asset contracts. to

money by fee higher $XXX Solutions revenue increase XXXX, a million, mix.During expect asset-based a markets Wealth XXXX. generated invested X% to was representing in debt over We or produce the equity total

and a primarily accelerated The software XX% was pronounced growth which tools.First, our Solutions compared by planning subscription-based to are RIAs second reporting Our offerings, serve of This QX grew one during in revenues revenue item. XXXX nearly to the when Wealth cover I'd XXXX financial like QX million. the $XXX to segments generated asset-based year. half of as our service particularly

the revenue, Solutions information our increasing recast of basis Solutions and Solutions about contribution revenue on wealth on with provided. Wealth To in in to million. generated QX XXXX be financial in segment Wealth we our our reporting This quarter subscription pro how announced call, facilitate $XXX subscription-based align to last I'll $X numbers is Solutions segment. XXXX, Wealth earnings reflected historical each forma to asset-based our Wealth describing comparability, the we business, business, revenue available our supplement.In our As earnings on our a transferred of to results outgrew manage X% basis which million business is a -- analytics

During an a revenue our subscription-based QX during QX, overall basis, Solutions on over Wealth Solutions forma of $XX million by grew over grew Wealth XXXX.On pro revenue XXXX. X% X% basis

million over Wealth represented growth QX our XXXX. Solutions XXXX, QX During revenue of $XXX XX%

double-digit to As Solutions is remains for rate year. the growth flat we ahead, while goal, for our growth full deliver a This expect XXXX. premised we to high-single-digits full look a growth Wealth in outlook on mid- year the market the

XXXX. business, On versus by which QX in revenue basis, analytics the as our generates million. by sequentially drive but In and believe QX, was the our subscription-based to declined expansion revenue we X% to demonstrated was leverage QX D&A revenues. investments platform.Turning delivered can we during we margin made data have As margins XXXX XXXX, our X% to $XX.X QX XXXX, a continue compared in we higher like-for-like

D&A year, basis. delinquencies. a with a of revenue, based segment, In related charge client challenges are had segment of $XXX turmoil impairment XX% million on a Envestnet's approximately including full taking on of connection the D&A to several during this and reevaluation goodwill commercialization for pro QX generated over $XXX our forma the declining banking noncash million performance, this For by we segment.XXXX

variety QX we evidence strategic the that was Envestnet results less performance of are of going We believe than will position initiatives sequential had well in the forward. business provide there anticipated, a operational we early process the leverage in While and few growing believe us by over to our profitability grow to the costs last revenues and free of expenses. flow. our returns years to expand platform operating infrastructure on made moving The achieve ahead have cash enable investments these initiatives.Now

investment be annual announced consider cost and have expense constitute general to X common base.Envestnet manageable custody by to since the November call, has clearing, and our compensation-related, rate cost non-controllable we XXXX. certain management, $XX also our our non-compensation start expenses, industry, As categories expenses We are parties our as million on payments of successfully consisting for across brokerage run the the total those third CapEx which reduced of of majority services. in

margins XXXX XXXX, basis nearly EBITDA QX from expanded we XXX adjusted basis of As and XXX points QX points XXXX margin. nearly QX our from

margins cash has be this change. not and been We operating expect treatment no free of historical and to with course, our flow I'll cloud continue revised reporting we to to improve this to is, generation that capitalizable.There adjustment note reflect accounting providers our and third-party expand in XXXX. infrastructure arrangements of impact from certain cash expenses revised hosting

committed defined adjusted greater XXXX million. were our as free we're free In cash are that of items adjusted did severance EBITDA, first, but our addition our flow, by in regarding agreements, impact cash flow. providing included transparency Three $XX to expenses credit to EBITDA, not

Although ways do $XXX $XX not figures XXXX, including aggregate, run appropriate development capitalized to In XXXX compensation. we organization, development we capitalized of rates we be million will to million. expensed continue technology for software going anticipate to look forward.Second, stock-based severance in total these optimize our of or

overall expect some XXXX because was free as cash XXXX to is expected to first part to and strong million. be investments We year-over-year for reflecting success.Third, and million, drive the ensure $XX during total of million. cash When remain working client $XX scale flow made, flow this taken Envestnet's $XX our quarters mid- CapEx but benefits. of negative. development capital free our high-single-digits in technology spending approximately CapEx for QX together, significant to our was our performance X commitment the continued XXXX the already will reduce was

$XX XXXX, positive for cash that report at flow Following QX, I'm free pleased million. to was

number $XX sheet. QX million million. in expect on we years, increased seasonality first the Cash cash balance will observed in improving XXXX. our this Similar during be to in the to decrease focus quarter to hand on of nearly to Our $XX previous XXXX.Turning

debt, pay interest of points which Our first on basis is XX of XXXX. due tranche convertible we QX of in

XXst, cash believe As has leverage trailing ratio, our X.Xx.In EBITDA position debt less below us total, reduced we defined been of our as over adjusted December gives flexibility. total our to liquidity

leverage and as XXXX. continue reduce further capital to with to to allocation be expect during look our our We we disciplined prudent ratio

growth assuming $XX we've XXXX, to $XXX Looking expect ahead over the range, improvement to first how over a the information points of of be range, Using focus. QX basis between of EBITDA to million million. the XXXX approximately XXXX, we be and $XX between $X.XX.As the million adjusted we represents representing we of revenues adjusted with and have X $XXX between areas midpoint of Envestnet, chapter consistent previously, X% new $X.XX to quarter margin provided EPS this and XXX be QX the midpoint million, at and enter

clients. our First,

are clients and Our compass commitment our our unwavering. is

and clients we are algorithm to for with delivering finally, operating value Second, supporting to a those And optimally where leverage Envestnet. balance and revenue scale. committed we more can excellence profitability, growth execution

we when call the per now cash can which like be value.I'd generate share, flow to turn grow, drive So for utilized back free to greater shareholder even closing remarks. to we compounding will Bill

William Crager

The in advantage position providing expand and and in and This unique drive a our our for connect clients' opportunities the put because strong the organization of and of wealth done growth few our in through of client align leading drive clients, the our has last very we is that is We technology, to relationships. over industry. company years have we creates data center is and needs to industry, built creating for aligned to bedrock Thank ecosystem the you, made, value by the we've Envestnet to wealth around Josh. work These the It competitive grow.The the at position. decisions sit partners that are Envestnet the the advisers very tenured. connected have. deep productivity These that solutions. are their relationships platform to the

incredibly investors incredible the company at has to to and this, and has XX-year who such our conviction we and idea, A and me.It partners impact our particularly journey. extraordinary economic such deliver, ecosystem, work have thankful profound the so impact effort to grown the have that How the and our increasing our it like an my an you to the but conversion.I'm improving the blessing my history and profile become had something we It extraordinary who revenue so professional us the turn I clients this industry life. Camilla, over on much journey it such an flow Envestnet. us been long-term free industry, and of substantial? of the Tom incredibly by done profound Envestnet, been friends for leverage Thank say immense who have gratitude the can As Thank and and strengthen have I It's am has supported colleagues Q&A my made much. over to nothing very been all enhances been with a operator, us, have ride to have those pride. growth, thousands I partners session. and strategic and meant operating you now Josh who of cash have a will on in grateful.I'll and for who

Operator

Instructions] [Operator of from comes Michael first Cho JPMorgan. the with Our line question

Y. Cho

a a -- been always pleasure insights. it's your It's first, just big with you appreciated picture interacting and Bill,

William Crager

Mike. Thank you,

Y. Cho

-- for you. Yes. question

call you question for picture a big on here. your earnings final Just

could your map of been value the years XX for implemented with do years at in be Envestnet I ahead? the look road leadership, the most transition, mentioned, the you company next own mean As after and CEO Envestnet impactful you ahead, think for most Envestnet, you as where next that's and the

William Crager

Yes. and the support your Michael your coverage over much. very you, years just Thank and appreciate

flexible operating advice tied most to invested become network Michael, position has the think, in holistic my And solutions, the broad as of position scaled environment on perspective I the now company a an that to this built we've in deliver extraordinary market. model. such is to the

And transition, year.And moment page the as the this so company has pretty capabilities when I client so my next on think solutions as be us the point we well-positioned an the thought is to from we became all about strong tenured to and ahead clear cycle, flip the of deep need with have I what about into about I thought And a we execution really time. investment here. a very heels incredibly It's a base that and of successful. that and transition the

Y. Cho

Tom. Great. and And just a follow-up for Josh

the singles mid-single I terms terms I the talk Solutions in to I on think in just of through guide, assumptions high of takes. you're and on fee Can rate heard some that 'XX you've think flows you maybe Wealth talked some in growth. and through embedding there underlying revenue trends? I think puts

the was flesh you could year I in So of some expectations. of hoping out that context full

Thomas Sipp

you, Yes. Tom. Thank Michael. This is

did level the here, flows, That impacted growth We will progresses. health will XX.X flows gross But I M&A by it's kind particularly at or per account through And flows at activity or and on the $XX our of conversions think be has one-off some and think underlying did year that persist gross think average the as gaining my AUM individual that the stable rates, will firm overall are as level, we We much about fee we deliver very, our AUM they'll then very as flows really range. got of in fee those about well. flows, flows, persistent. fee billion what traction the there between and our higher $XX XXXX. our rates said AUA is in from good then momentum AUA rate.And that we've relatively rate think been X.X last a And been we I year. comments, the persist and it's -- AUM XXXX. in in billion we

you taking up RIAs. good We've That other solutions. insights RIAs, cross-selling with So account continued our got analytics planning managed the and MoneyGuide at that a will help that growth lot with of got all We're then drive to continues. look We've cross-selling capabilities. progress solutions. our growth.And

continued scale will market that us it's the drive strong as flows. that in kick base, next through ecosystem going been client that's in would to I efforts.So and get solution to growth will and overall see the with going year, start those rate custody we it's wealth really retirement year. that AUM continued the mentioned start empower, throughout Later to progress the progress you're on So we've come that the the to rate up drive partnership across our year. working growth that to to The

Operator

Our of question next with Ryan Devin the line JMP. comes from

Devin Ryan

really want forward. I remarks, just best you a going wish you to and been working with And would Bill, pleasure here the the echo

William Crager

Thank Dev. you, appreciate you. Really

Devin Ryan

Yes.

I So guidance just little a of question, guess here first and the structure to different seen. appreciate we've bit than a

CEO? people obviously, then it's I moving to be and guess of XXXX, just possible, have there And just year takes but so a incoming EBITDA a still margin maybe kind about just we're are more is for you guide? just going that.And this, about curious framing you're Josh, Or And outlined how and growth of if those. some so that to is targets how want how understand, of full thinking going guys forward? things kind and I so a just the that's commentary have is know you puts So not bridge kind something to you're to tactically to XXXX? to for adjusted just way quite about of some and is targets the guys out, growth ways out, given I put think

you're hit and in how from possible So it about at XXXX? to of on we something to least are kind yet is where today any of that thinking kind going of

Joshua Warren

this Happy full regard this is the guidance to believe with on our take we that more Devin, appropriate of Josh. is nature year based Sure. one. Look, business. to

little that Solutions a rate.With full to for a Envestnet speculate difficult the go. in it, Tom be guidance But providing volatility, mid- format, know, the about of further, had thing did And historically on our episodic, have premised be we QX step model-based make a you client an we for you XXXX, second year growth election structural may way on The believe know that. we outlined, believe incredibly To to same way As flat expected is same as rate of election to well with Envestnet about it's pricing Envestnet one was growth well, as the market-driven. the and to strong. for most we our year. bit the high-single-digits revenue format. the we're Envestnet's seasonal, in is flows, But wanted grower. Wealth sure done think half know, may market to positioned capitalize long that to is year, of a may provide is go but macro, particularly to the a And we're regard we questions an foundation you

Thomas Sipp

the I would We a add, to benefits, progress cash together. XX% will you a and past the here. outlined.So from to some is onetime did that -- of Devin, brought grow but of higher integrated XX% from we've perspective, free firm feedback flow company And ton we in have And lot made more margin operating would more gone we've just and over we That definitely delivering the 'XX. to we're it's leverage think a made at our XX% the Yes, progression look the from expand than I as years the from the continue to QX. as couple all expect progress. we've continue client margins more will positive margins I it work. to got And lead We've into expand. and Josh think really we've

William Crager

on milestone your And that. flow not QX our quite if That's adjusted was to an And super not not on robust intend in to expect cash generation, EBITDA journey targets, level seasonality.But in demonstrated XXXX flow free durable clear we some ultimate our point, I mentioned, strong a a maybe to what a milestone. continue our believe would expansion, progress ability grow on as Devin, to a margins But we're make result. a super, -- the be goal. that's margin destination, question. just and continue QX has I do that know EBITDA to would to -- the free we answer done of and Tom we've cash to given the one margins. continuing We our don't to that including

Devin Ryan

Understood. that it. Got Appreciate all color.

headwinds. mentioned, you outperforming broader follow-up kind same peer a you the think, some at flows. kind Clearly, time, of I the Xx of there's environmental are the as Just as camps. on But industry guys

And about, start way to the to of just how the and interest the or interest whether M&A lower, so tailwind a to to it's that a think I'd dynamic of move effect extent much mentioned, just love if if create. you possible, rates there's rates.And quantify maybe Tom, could

think environmental lot trying of a positive to around Just same at about new the of there's because there's irons core momentum the fire investment, piece in headwinds. time, in that growth the

point? effect environmental headwinds hopefully So about just at reverse those do here trying to of some think the that

Thomas Sipp

Yes.

rate market, down. the much as they back for a those Envestnet a as those even platform, we come realize on higher on equity may products, assets. to come think headwind off-platform that And down the has couple assets don't point, today and rates fixed fee come income -- and be moves -- lot us of as of more on the more start sit will The cash over the years money past a with been I rates. rates with higher as into

think only here, would into perspective it help I they active more So products. from move be can as our

because point a some will has advantage -- that this an headwind think been be think I at we go forward.And we I so large. is as historically, M&A, tailwind then our the footprint So around

feedback activity, been just M&A some that's relationships deal so We and be these clear, net will aggregators, right got rate. us happy were we've the very better that couple has lot activity past with clients away now done and the with clients. enterprise over clients we've well been that But with were our happens RIA They years. because never work off doing of have it's from all of positioned.The our such growth beneficiary. clients a and us affected the me really affect that back really let great very, from we've a we're It were

recent that the the So activity, be medium-term very, to prospects will positive perspective. rate, the activity business but are very growth our for from M&A dilutive the

Operator

question next Surinder with Thind Jefferies. Our line comes from of the

Surinder Thind

been it's working Like a you. else, that everyone with definitely I pleasure Bill, echo

you wishing the all So here. best

William Crager

Thank much. you you, Thank Surinder. very

Surinder Thind

first-party to up? go-forward about flows and about a basis? the the more and on rate kind fee how a color my -- algorithm on think, of should Wealth here, pillars talked think Is think was just about thinking team growth growth the one the take you a guys business? about Is about it I'd driving step we thinking assets Solutions just Any more get I back is of kind algorithm. managed the trying just the to this from big you're from the the the into How various perspective, like of drivers just I -- picture that big picture the perspective?

Joshua Warren

is industry and to on growth the mean I combination market the as it's business. Josh. growth top After flows foundation, is it's leadership. our At that, all it's relatively algorithm, of Surinder, from our appreciation a space.On simple. you the business wealth independent fairly going our into Sure. built benefit of the know, Envestnet, secular simple

which Tom well As leader in trend of fewer the want clients as to partners. deeper and the models go Envestnet. way growth for trusted provide industry that compounded our we benefit That's the and about, industry number help us pricing with asset-based growth talked both through subscription-based constructs, a a opportunity of capitalize should this on needs pricing of our the fit and

Thomas Sipp

Surinder. add, couple add me of examples. Let a I'll

managed you with We've lot account platform we're of that CRM. to trading, So which our platform, what look reporting, to doing is connect infrastructure. a at our RIAs invested Tamrac

the out, and So services. AUM really way AUM, as overlay indexing to the to evidenced to is and the they and those And we especially bundling data real and now direct use through tax client really adoption -- of further data we're analytics. portal to services, then we're then as that cross-selling buy -- would solutions.So get fiduciary cross-selling then lead start and to that it RIA, establish will we're starting start especially they solutions relationship, take going that personalization. traction.And fiduciary those requires when that our be will rolling be more And analytics, that

in of the management personalization.And in products direct going is overlay. solutions, teams, unique distribution then their where tax their a marketing And more net what their we're to efforts, and indexing, we're integrate then sales partnering worth a drive biggest their that think are the for relationship really we asset So personalization, The that and more long very lean personalization at high the the will a AUM, growth platform. growth -- have growing cross-sell to then period. will it, products partners time of doing with overall high expand where efforts bundle more think way to deliver help we rate persist so and very,

Surinder Thind

clarification then I as And a of it. guess Got there. point just

you trying So the are as points basis about that to terms of what what about you how get was here? trying that and do to you in at you're what it Or to guys certain grow think you I guess trying was above you're of market? assessing, I capable is what positioning, think in as a want you're kind to of accomplish

Joshua Warren

Sure.

would strive new to clients will to deeper, possible our an to, combination just have, Delivering that advisers with market now with growth wanting of have double-digit of don't we integrated effectively that win and comes clients monetize and capably. those and I simply is but more as serve an our growth Surinder, from So to and up show firm say continue a that benefit we go to us, more do firm. go us integrated we just goal have.We have the out we delivering deeper Envestnet to for that's clients that and get already clients plus more go

market So on with and for us, it's grow add top of then the that.

Surinder Thind

follow-up. hopefully, Got quick it. That's a as helpful. And then just,

next and analytics business the outlook Just the for year? data the over

Joshua Warren

Sure.

analytics, couple thoughts. think, look, I So for look, of a data and

are is, of you The evidence But banking a there's sequential that course a the bear first in out put which -- we've on updated March to play of amount restored. in And our we turmoil of QX how the is believe believe had challenges some of We of of issues in actually, some results early of to are fruit. XXXX, loss, XXXX. now data to these has keep are combination idiosyncratic a that. It's initiatives going those lot initiatives tremendous to also you know, the plan had place that business a the going regard we with that over as year.

Thomas Sipp

that revenue Surinder, revenue focused data up look and -- on will stabilizing And the we as was you if recovered look our base, -- and then you're at out we've to growth to we business. But The which very think QX the QX. think we we're set. be stable in at sequential up data we're it QX so -- QX QX

sequential stable our new our from important milestones we're But and issue growth the work other the then medium-term that a products fully better the that's would from data done revenue wealth and from that base kind into much of we're a thing to So to would be, be of add an what I in launching drive the place. think a we've wealth lot revenue growth. And And capabilities client, integrated. it's organization transfer perspective.Surinder, is, segment. would I fully means integrated

And response So want really, to want where our base delivering client and business. clients we're now our analytics, really they positive. from they're where doing where data the is receive them, --

XX to clients positive. data use we're XX that fully and from cases. capability wealth about the think I or base million insights insight back has from of delivering been integrated of And off really client XX the our reception

Operator

line question Our [Operator from Pete Davidson. next D.A. the of Instructions] with comes Heckmann

Peter Heckmann

working -- miss It's all to to echo you, other with the to years. and your the I all professionalism analyst Bill. appreciated we're and going class over going I comments you

William Crager

the Thank very you, Pete. Thank relationship much. Back at you. enjoyed you. Really

Peter Heckmann

Well, changed The I a moving Great. think to outlook, we're bit. all I the Clearly, as of analysts Great. struggling giving results the format a think much little the are guidance. and call not bit.

take the want the walk I away visibility sequentially.But can X% knee-jerk data is not can there the out -- be there something think there? business flesh adjusted more is terms of numbers, and going resume it's is analytics. broken I is don't to that do case. the no And sometimes can to year-over-year, in turn, that turn Or if growing down fundamentally I X% appreciate expansion? thinking in that bit margin a reaction and -- long that up that that you before think you that's how resume at

Thomas Sipp

is set up data we I throughout our think big the the revenue would back of big a was decrease, deal QX kind sequential stabilized growth worked of We research hard the base. QX. Recovering to we in year. the Pete, just on business. a especially have to go revenue last that That driver is

You with issues hit had banking clients. channel. issues in We the fintech

XX%, year lot a revenue work stable it. now data we're tough happen that with And it's But of down develop new a to a to year going was do create XX%. you set, to it's -- there's not now either. overnight We and So believe last robust more products. fulsome a positioned been in situation.The better have

the over will from and quarters reduced be position of back and more -- the -- there.But restore months, we then better the we've revenue off segment data coming it much and the be better a stabilized base well. positioned much will cost investing set, are is we the as -- So XX, the base XX-plus think efficient

better then from But there. efficient, in new growth. medium a term, So it's and investing back to and more products stabilized margin then

Peter Heckmann

rollout you but that Okay. in early the I then been I of just back opportunity. changes been the any And that's see that. if sizing comment on appreciate and dates pretty paying on to see custody, been and of attention further think the that just or a want delayed sure I've -- know closely table to and a I the the there's I that's make still bit, made

Thomas Sipp

Yes.

The The really all integrate we've been fantastic. working put in and then that with market.The localize place platform their we'll time. takes solution. be trading up And complicated. that market ecosystem their and is hit to And they're as the we've work So this takes They the a to-date. it's -- that strategic, with legacy important, as custody converted announced, very, throughout U.S. And at some to to we be of entrant platform. just partnered into efforts doing in standing our a to getting then -- are the place. it's international time there's been is very up important technology market a It's FNZ, to onto they're a -- is -- They've framework But ton big new year. deliver. technology operations, in quarters. them The strategic. pretty couple place of very work by extremely It's localize we the next year-plus. in and lining in platform a a so point It's technology. in regulatory that to the their important. required priority -- this very have some over They've it -- milestones

William Crager

we just Pete, on FNZ on then, gave. top the think you upside to -- as the that and add And -- should if of just the to adoption, line that -- the representing speed guidance about to depending of rollout, could, I top speed the both

expectation Our a is this is long-term bet.

Thomas Sipp

then this realize up the benefits to Yes, outstanding the start year is beyond and market really you'll to getting and this capability year.

Operator

teleconference. There are time. today's no concludes this that, with further And questions at this

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

Envestnet (ENV) 22 Feb 242023 Q4 Earnings call transcript