Exhibit 99.1

Envestnet Reports Second Quarter 2023 Financial Results

Berwyn, PA — August 3, 2023 — Envestnet (NYSE: ENV), a leading provider of intelligent systems for wealth management and financial wellness, today reported financial results for the three and six months ended June 30, 2023.

Three months endedSix months ended
Key Financial MetricsJune 30,%June 30,%
(in millions, except per share data)20232022Change20232022Change
GAAP:
Total revenue$312.4 $318.9 (2)%$611.1 $640.2 (5)%
Net loss attributable to Envestnet, Inc.$(21.4)$(23.3)8%$(62.6)$(37.1)(69)%
Net loss attributable to Envestnet, Inc. per diluted share$(0.39)$(0.42)7%$(1.15)$(0.67)(72)%
Non-GAAP:
Adjusted revenue(1)
$312.5 $318.9 (2)%$611.2 $640.3 (5)%
Adjusted EBITDA(1)
$57.8 $57.1 1%$113.2 $112.8 —%
Adjusted net income(1)
$30.4 $32.0 (5)%$60.5 $63.0 (4)%
Adjusted net income per diluted share(1)
$0.46 $0.49 (6)%$0.91 $0.96 (5)%

“Envestnet continues to create value for its clients and differentiate ourselves from competition by delivering the most integrated ecosystem of data, technology and solutions,” said Bill Crager, Chief Executive Officer. “We are outpacing the industry in flows, gaining share and helping drive the growth and productivity of our clients, all while executing our strategy of long-term revenue growth and margin expansion.”


Financial Results for the Second Quarter of 2023

Asset-based recurring revenue decreased 3% from the second quarter of 2022, and represented 59% of total revenue for the second quarter of 2023, compared to 60% for the second quarter of 2022. Subscription-based recurring revenue decreased 3% from the second quarter of 2022, and represented 37% of total revenue for the second quarter of 2023, compared to 37% for the second quarter of 2022. Professional services and other non-recurring revenue increased 34% from the prior year period. Total revenue decreased 2% to $312.4 million for the second quarter of 2023 from $318.9 million for the second quarter of 2022.

Total operating expenses for the second quarter of 2023 decreased 7% to $327.7 million from $350.6 million in the prior year period. Direct expense decreased to $123.5 million for the second quarter of 2023 from $126.5 million for the prior year period. Employee compensation decreased 7% to $117.1 million for the second quarter of 2023 from $125.8 million for the prior year period. Employee compensation was 37% of total revenue for the second quarter of 2023, compared to 39% for the prior year period. General and administrative expenses decreased 19% to $53.3 million for the second quarter of 2023 from $66.1 million for the prior year period. General and administrative expenses were 17% of total revenue for the second quarter of 2023, compared to 21% for the prior year period. 

Loss from operations was $15.3 million for the second quarter of 2023 compared to a loss of $31.7 million for the second quarter of 2022. Net loss attributable to Envestnet, Inc. was $21.4 million for the second quarter of 2023 compared to net loss attributable to Envestnet, Inc. of $23.3 million for the second quarter of 2022. Net loss attributable to Envestnet, Inc. per diluted share was $(0.39) for the second quarter of 2023 compared to net loss attributable to Envestnet, Inc. per diluted share of $(0.42) for the second quarter of 2022.

Adjusted revenue(1) for the second quarter of 2023 decreased 2% to $312.5 million from $318.9 million for the prior year period. Adjusted EBITDA(1) for the second quarter of 2023 increased to $57.8 million from $57.1 million for the prior year period. Adjusted net income(1) decreased 5% for the second quarter of 2023 to $30.4 million from $32.0 million for the prior year period. Adjusted net income per diluted share(1) for the second quarter of 2023 decreased 6% to $0.46 from $0.49 in the second quarter of 2022.

Balance Sheet and Liquidity

As of June 30, 2023, Envestnet had $59.0 million in cash and cash equivalents and $912.5 million in outstanding debt. Debt as of June 30, 2023 results from $317.5 million in convertible notes maturing in 2025, $575.0 million in convertible notes maturing in 2027 and $20.0 million of borrowings under the revolving credit facility. On July 19, 2023, the outstanding borrowings under the revolving credit facility were repaid and the remaining available balance on the agreement was $500.0 million.
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Outlook

Envestnet provided the following outlook for the third quarter and full year ending December 31, 2023. This outlook is based on the market value of assets under management or administration as of June 30, 2023. We caution that we cannot predict the market value of these assets on any future date. See “Cautionary Statement Regarding Forward-Looking Statements.”

In Millions, Except Adjusted EPS3Q 2023FY 2023
GAAP:
Revenue:
Asset-based$192.5 -$194.0 
Subscription-based117.5 -118.5 
Total recurring revenue310.0 -312.5 
Professional services and other revenue6.0 -6.5 
Total revenue$316.0 -$319.0 $1,252.0 -$1,259.0 
Asset-based direct expense$113.5 -$114.0 
Total direct expense$120.5 -$121.0 
Net income(a)(a)
Diluted shares outstanding65.966.0
Net income per diluted share(a)(a)
Non-GAAP:
Adjusted revenue(1):
  Asset-based$192.5 -$194.0 
  Subscription-based117.5 -118.5 
Total recurring revenue310.0 -312.5 
  Professional services and other revenue6.0 -6.5 
Total revenue$316.0 -$319.0 $1,252.0 -$1,259.0 
Adjusted EBITDA(1)
$64.0 -$66.0 $255.0 -$260.0 
Adjusted net income per diluted share(1)
$0.52 -$0.54 $2.09 -$2.15 

(a) Envestnet does not forecast net income and net income per diluted share due to the unpredictable nature of various items adjusted for non-GAAP disclosure purposes, including the periodic GAAP income tax provision.

Conference Call

Envestnet will host a conference call to discuss second quarter 2023 financial results today at 5:00 p.m. ET. The live webcast and accompanying presentation can be accessed from Envestnet’s investor relations website at http://investor.envestnet.com/. A replay of the webcast will be available on the investor relations website following the call.

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About Envestnet

Envestnet, Inc. (NYSE: ENV) is transforming the way financial advice and wellness are delivered. Our mission is to empower advisors and financial service providers with innovative technology, solutions and intelligence to make financial wellness a reality for everyone. Approximately 107,000 advisors and approximately 6,900 companies including: 16 of the 20 largest U.S. banks, 47 of the 50 largest wealth management and brokerage firms, over 500 of the largest RIAs and hundreds of FinTech companies, leverage Envestnet technology and services that help drive better outcomes for enterprises, advisors and their clients.

For more information on Envestnet, please visit www.envestnet.com and follow us on Twitter @ENVintel.

(1) Non-GAAP Financial Measures

“Adjusted revenue” excludes the effect of purchase accounting on the fair value of acquired deferred revenue. On January 1, 2022, the Company adopted ASU 2021-08 whereby it now accounts for contract assets and contract liabilities obtained upon a business combination in accordance with ASC 606. Prior to the adoption of ASU 2021-08, we recorded at fair value the acquired deferred revenue for contracts in effect at the time the entities were acquired. Consequently, revenue related to acquired entities for periods subsequent to the acquisition did not reflect the full amount of revenue that would have been recorded by these entities had they remained stand-alone entities. Adjusted revenue has limitations as a financial measure, should be considered as supplemental in nature and is not meant as a substitute for revenue prepared in accordance with GAAP.

“Adjusted EBITDA” represents net income (loss) before deferred revenue fair value adjustment, interest income, interest expense, income tax provision (benefit), depreciation and amortization, non-cash compensation expense, restructuring charges and transaction costs, severance, litigation, regulatory and other governance related expenses, foreign currency, non-income tax expense adjustment, fair market value adjustment to investment in private company, dilution gain on equity method investee share issuance, loss allocations from equity method investments and (income) loss attributable to non-controlling interest.

“Adjusted net income” represents net income (loss) before income tax provision (benefit), deferred revenue fair value adjustment, non-cash interest expense, cash interest on our convertible notes, non-cash compensation expense, restructuring charges and transaction costs, severance, amortization of acquired intangibles, litigation, regulatory and other governance related expenses, foreign currency, non-income tax expense adjustment, fair market value adjustment to investment in private company, dilution gain on equity method investee share issuance, loss allocations from equity method investments and (income) loss attributable to non-controlling interest. Reconciling items are presented gross of tax, and a normalized tax rate is applied to the total of all reconciling items to arrive at adjusted net income. The normalized tax rate is based solely on the estimated blended statutory income tax rates in the jurisdictions in which we operate. We monitor the normalized tax rate based on events or trends that could materially impact the rate, including tax legislation changes and changes in the geographic mix of our operations.

“Adjusted net income per diluted share” represents adjusted net income attributable to common stockholders divided by the diluted number of weighted-average shares outstanding. For purposes of the adjusted net income per share calculation, we assume all potential shares to be issued in connection with our convertible notes are dilutive.

See reconciliations of Non-GAAP Financial Measures on pages 9-12 of this press release. Reconciliations are not provided for guidance on such measures as the Company is unable to predict the amounts to be adjusted, such as the GAAP tax provision. The Company’s Non-GAAP Financial Measures should not be viewed as a substitute for revenue, net income (loss) or net income (loss) per share determined in accordance with GAAP.

4

Cautionary Statement Regarding Forward-Looking Statements

The forward-looking statements made in this press release and its attachments concerning, among other things, Envestnet, Inc.’s expected financial performance and outlook for the second quarter and full year of 2023, its strategic and operational plans and growth strategy, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and the Company’s actual results could differ materially from the results expressed or implied by such forward-looking statements. Furthermore, reported results should not be considered as an indication of future performance. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release include, but are not limited to, the concentration of our revenue from the delivery of our solutions and services to clients in the financial services industry; our reliance on a limited number of clients for a material portion of our revenue; the renegotiation of fees by our clients; changes in the estimates of fair value of reporting units or of long-lived assets; the amount of our debt and our ability to service our debt; limitations on our ability to access information from third parties or charges for accessing such information; the targeting of some of our sales efforts at large financial institutions and large financial technology (“FinTech”) companies which prolongs sales cycles, requires substantial upfront sales costs and results in less predictability in completing some of our sales; changes in investing patterns on the assets on which we derive revenue and the freedom of investors to redeem or withdraw investments generally at any time; the impact of fluctuations in market conditions and interest rates on the demand for our products and services and the value of assets under management or administration; our ability to keep up with rapid technological change, evolving industry standards or changing requirements of clients; risks associated with our international operations; the competitiveness of our solutions and services as compared to those of others; liabilities associated with potential, perceived or actual breaches of fiduciary duties and/or conflicts of interest; harm to our reputation; our ability to successfully identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies; our ability to successfully execute the conversion of clients’ assets from their technology platform to our technology platforms in a timely and accurate manner; the failure to protect our intellectual property rights; our ability to introduce new solutions and services and enhancements; our ability to maintain the security and integrity of our systems and facilities and to maintain the privacy of personal information and potential liabilities for data security breaches; the effect of privacy laws and regulations, industry standards and contractual obligations and changes to these laws, regulations, standards and obligations on how we operate our business and the negative effects of failure to comply with these requirements; regulatory compliance failures; failure by our customers to obtain proper permissions or waivers for our use of disclosure of information; adverse judicial or regulatory proceedings against us; failure of our solutions, services or systems, or those of third parties on which we rely, to work properly; potential liability for use of inaccurate information by third parties provided by us; the occurrence of a deemed “change of control”; the uncertainty of the application and interpretation of certain tax laws; issuances of additional shares of common stock or issuances of shares of preferred stock or convertible securities on our existing stockholders; changes in the level of inflation; general economic, political and regulatory conditions; changes in trade, monetary and fiscal policies and laws; global events, natural disasters, environmental disasters, terrorist attacks and pandemics or health crises, including their impact on the economy and trading markets; social, environmental and sustainability concerns that may arise, including from our business activities; and management’s response to these factors. More information regarding these and other risks, uncertainties and factors is contained in our filings with the Securities and Exchange Commission (“SEC”) which are available on the SEC’s website at www.sec.gov or our Investor Relations website at http://investor.envestnet.com/. You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this press release. All information in this press release and its attachments is as of August 3, 2023 and, unless required by law, we undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to report the occurrence of unanticipated events.

Contacts
Investor RelationsMedia Relations
investor.relations@envestnet.commediarelations@envestnet.com
(312) 827-3940
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Envestnet, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
June 30,December 31,
20232022
Assets
Current assets:
Cash and cash equivalents$59,019 $162,173 
Fees receivable, net123,696 101,696 
Prepaid expenses and other current assets41,906 41,363 
Total current assets224,621 305,232 
Property and equipment, net66,668 62,443 
Internally developed software, net207,235 184,558 
Intangible assets, net361,335 379,995 
Goodwill998,436 998,414 
Operating lease right-of-use-assets, net75,079 81,596 
Other assets120,531 99,927 
Total assets$2,053,905 $2,112,165 
Liabilities and equity
Current liabilities:
Accounts payable, accrued expenses and other current liabilities$239,836 $233,866 
Operating lease liabilities13,222 11,949 
Deferred revenue35,846 36,363 
Current portion of debt20,000 44,886 
Total current liabilities308,904 327,064 
Debt, net of current portion874,175 871,769 
Operating lease liabilities, net of current portion105,606 110,652 
Deferred tax liabilities, net15,815 16,196 
Other liabilities16,947 18,880 
Total liabilities1,321,447 1,344,561 
Equity:
Total stockholders’ equity, attributable to Envestnet, Inc.722,513 754,567 
Non-controlling interest9,945 13,037 
Total liabilities and equity$2,053,905 $2,112,165 
6

Envestnet, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share information)
(unaudited)
 
Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
Revenue:
Asset-based$185,762 $191,972 $362,694 $394,689 
Subscription-based114,959 118,120 232,038 232,854 
Total recurring revenue300,721 310,092 594,732 627,543 
Professional services and other revenue11,713 8,760 16,409 12,672 
Total revenue312,434 318,852 611,141 640,215 
Operating expenses:
Direct expense123,497 126,482 232,486 251,764 
Employee compensation117,097 125,767 231,312 252,616 
General and administrative53,346 66,144 106,965 110,479 
Depreciation and amortization33,806 32,182 66,747 63,800 
Total operating expenses327,746 350,575 637,510 678,659 
Loss from operations(15,312)(31,723)(26,369)(38,444)
Other (expense) income, net(7,402)1,622 (15,337)(4,345)
Loss before income tax provision (benefit)(22,714)(30,101)(41,706)(42,789)
Income tax provision (benefit)418 (5,833)24,187 (3,813)
Net loss(23,132)(24,268)(65,893)(38,976)
Add: Net loss attributable to non-controlling interest1,716 983 3,249 1,832 
Net loss attributable to Envestnet, Inc.$(21,416)$(23,285)$(62,644)$(37,144)
Net loss attributable to Envestnet, Inc. per share:
Basic and diluted$(0.39)$(0.42)$(1.15)$(0.67)
Weighted average common shares outstanding:
Basic and diluted54,439,733 55,203,120 54,289,443 55,054,272 
7

Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended
June 30,
20232022
Cash flows from operating activities:
Net loss $(65,893)$(38,976)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization66,747 63,800 
Deferred income taxes(522)(8,222)
Non-cash compensation expense40,843 45,318 
Non-cash interest expense2,251 3,474 
Loss allocations from equity method investments5,872 2,945 
Dilution gain on equity method investee share issuance(546)(6,934)
Lease related impairments2,483 12,961 
Other304 (448)
Changes in operating assets and liabilities:
Fees receivable, net(22,357)13,694 
Prepaid expenses and other assets(6,762)(6,359)
Accounts payable, accrued expenses and other liabilities17,700 (32,888)
Deferred revenue(852)4,277 
Net cash provided by operating activities39,268 52,642 
Cash flows from investing activities:
Purchases of property and equipment(16,735)(9,141)
Capitalization of internally developed software(46,801)(43,045)
Acquisitions of businesses, net of cash acquired— (14,472)
Investments in private companies(1,450)(8,000)
Acquisition of proprietary technology(12,000)(19,000)
Issuance of loan receivable to private company(20,000)— 
Issuance of note receivable to equity method investees— (4,350)
Other319 — 
Net cash used in investing activities(96,667)(98,008)
Cash flows from financing activities:
Proceeds from borrowings on Revolving Credit Facility40,000 — 
Payments related to Revolving Credit Facility(20,000)(1,872)
Payments related to Convertible Notes(45,000)— 
Payments on finance lease obligations(792)(14,517)
Proceeds from exercise of stock options472 742 
Payments related to tax withholdings for stock-based compensation(13,774)(18,113)
Payments related to share repurchases(9,289)(9,235)
Purchase of non-controlling units from third-party shareholders(1,008)— 
Payments of contingent consideration— (750)
Other3 4 
Net cash used in financing activities(49,388)(43,741)
Effect of exchange rate on changes on cash, cash equivalents and restricted cash3,633 (2,057)
Net change in cash, cash equivalents and restricted cash(103,154)(91,164)
Cash, cash equivalents and restricted cash, beginning of period162,173 429,428 
Cash, cash equivalents and restricted cash, end of period (a)
$59,019 $338,264 
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(a) The following table reconciles amounts from the condensed consolidated balance sheets to cash, cash equivalents and restricted cash reported within the condensed consolidated statements of cash flows:

June 30,
20232022
(in thousands)
Cash and cash equivalents$59,019 $338,115 
Restricted cash included in prepaid expenses and other current assets— 149 
Total cash, cash equivalents and restricted cash$59,019 $338,264 

9

Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands)
(unaudited) 

Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
Total revenue$312,434 $318,852 $611,141 $640,215 
Deferred revenue fair value adjustment (a)
17 54 69 108 
Adjusted revenue$312,451 $318,906 $611,210 $640,323 
Net loss$(23,132)$(24,268)$(65,893)$(38,976)
Add (deduct):
Deferred revenue fair value adjustment (a)
17 54 69 108 
Interest income (b)
(1,656)(713)(3,014)(1,034)
Interest expense (b)
6,531 4,212 12,851 9,065 
Income tax provision (benefit)418 (5,833)24,187 (3,813)
Depreciation and amortization33,806 32,182 66,747 63,800 
Non-cash compensation expense (d)
21,390 23,504 40,843 45,318 
Restructuring charges and transaction costs (e)
6,508 21,026 10,671 23,372 
Severance (d)
8,234 7,148 14,422 10,254 
Litigation, regulatory and other governance related expenses (c)
2,145 4,306 5,219 7,383 
Foreign currency74 413 107 305 
Non-income tax expense adjustment (c)
(30)189 (198)213 
Fair market value adjustment to investment in private company67 — 67 — 
Dilution gain on equity method investee share issuance (d)
(546)(6,934)(546)(6,934)
Loss allocations from equity method investments (b)
2,932 1,400 5,872 2,945 
Loss attributable to non-controlling interest1,027 440 1,805 817 
Adjusted EBITDA$57,785 $57,126 $113,209 $112,823 

(a)Included within subscription-based revenue in the condensed consolidated statements of operations.
(b)Included within other expense, net in the condensed consolidated statements of operations.
(c)Included within general and administrative expense in the condensed consolidated statements of operations.
(d)Included within employee compensation expense in the condensed consolidated statements of operations.
(e)For the three months ended June 30, 2023 and 2022, $5.0 million and $20.9 million were included within general and administrative expense, respectively, in the condensed consolidated statements of operations. For the three months ended June 30, 2023 and 2022, $1.5 million and $0.1 million were included within employee compensation expense, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2023 and 2022, $9.1 million and $23.5 million were included within general and administrative expense, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2023 and 2022, $1.6 million and $(0.1) million were included within employee compensation expense, respectively, in the condensed consolidated statements of operations
10

Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except share and per share information)
(unaudited) 

Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
Net loss$(23,132)$(24,268)$(65,893)$(38,976)
Income tax provision (benefit) (a)
418 (5,833)24,187 (3,813)
Loss before income tax provision (benefit)(22,714)(30,101)(41,706)(42,789)
Add (deduct):
Deferred revenue fair value adjustment (b)
17 54 69 108 
Non-cash interest expense (d)
1,427 1,415 2,869 3,474 
Cash interest - Convertible Notes (d)
4,543 2,480 9,108 4,960 
Non-cash compensation expense (e)
21,390 23,504 40,843 45,318 
Restructuring charges and transaction costs (g)
6,508 21,026 10,671 23,372 
Severance (e)
8,234 7,148 14,422 10,254 
Amortization of acquired intangibles (f)
15,720 17,645 32,660 35,165 
Litigation, regulatory and other governance related expenses (c)
2,145 4,306 5,219 7,383 
Foreign currency (d)
74 413 107 305 
Non-income tax expense adjustment (c)
(30)189 (198)213 
Fair market value adjustment to investment in private company67 — 67 — 
Dilution gain on equity method investee share issuance (d)
(546)(6,934)(546)(6,934)
Loss allocations from equity method investments (d)
2,932 1,400 5,872 2,945 
Loss attributable to non-controlling interest1,027 440 1,805 817 
Adjusted net income before income tax effect40,794 42,985 81,262 84,591 
Income tax effect (h)
(10,403)(10,961)(20,722)(21,571)
Adjusted net income$30,391 $32,024 $60,540 $63,020 
Basic number of weighted-average shares outstanding54,439,733 55,203,120 54,289,443 55,054,272 
Effect of dilutive shares:
Convertible Notes11,253,471 9,898,549 11,361,458 9,898,549 
Non-vested RSUs and PSUs316,758 199,853 445,323 381,397 
Options to purchase common stock57,902 129,217 73,271 142,510 
Warrants— 22,170 — 37,473 
Diluted number of weighted-average shares outstanding66,067,864 65,452,909 66,169,495 65,514,201 
Adjusted net income per diluted share$0.46 $0.49 $0.91 $0.96 

(a)For the three months ended June 30, 2023 and 2022, the effective tax rate computed in accordance with GAAP equaled (1.8)% and 19.4%, respectively. For the six months ended June 30, 2023 and 2022, the effective tax rate computed in accordance with GAAP equaled (58.0)% and 8.9%, respectively.
(b)Included within subscription-based revenue in the condensed consolidated statements of operations.
(c)Included within general and administrative expense in the condensed consolidated statements of operations.
(d)Included within other expense, net in the condensed consolidated statements of operations.
(e)Included within employee compensation expense in the condensed consolidated statements of operations.
(f)Included within depreciation and amortization expense in the condensed consolidated statements of operations.
(g)For the three months ended June 30, 2023 and 2022, $5.0 million and $20.9 million were included within general and administrative expense, respectively, in the condensed consolidated statements of operations. For the three months ended June 30, 2023 and 2022, $1.5 million and $0.1 million were included within employee compensation expense, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2023 and 2022, $9.1 million and $23.5 million were included within general and administrative expense, respectively, in the condensed consolidated statements of operations. For the six months ended June 30, 2023 and 2022, $1.6 million and $(0.1) million were included within employee compensation expense, respectively, in the condensed consolidated statements of operations
(h)An estimated normalized effective tax rate of 25.5% has been used to compute adjusted net income for the three and six months ended June 30, 2023 and 2022.
11

Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
Segment Information
(in thousands)
(unaudited)
Three Months Ended June 30, 2023
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenue$271,581 $40,853 $— $312,434 
Deferred revenue fair value adjustment (a)
17 — — 17 
Adjusted revenue$271,598 $40,853 $— $312,451 
Revenue:
Asset-based$185,762 $— $— $185,762 
Subscription-based75,509 39,450 — 114,959 
Total recurring revenue261,271 39,450 — 300,721 
Professional services and other revenue10,310 1,403 — 11,713 
Total revenue$271,581 $40,853 $— $312,434 
Operating expenses:
Direct expense
Asset-based$108,532 $— $— $108,532 
Subscription-based1,455 5,478 — 6,933 
Professional services and other8,032 — — 8,032 
Total direct expense118,019 5,478 — 123,497 
Employee compensation75,988 21,749 19,360 117,097 
General and administrative29,665 15,323 8,358 53,346 
Depreciation and amortization24,510 9,296 — 33,806 
Total operating expenses$248,182 $51,846 $27,718 $327,746 
Income (loss) from operations$23,399 $(10,993)$(27,718)$(15,312)
Add (deduct):
Deferred revenue fair value adjustment (a)
17 — — 17 
Depreciation and amortization24,510 9,296 — 33,806 
Non-cash compensation expense (c)
12,043 2,727 6,620 21,390 
Restructuring charges and transaction costs (d)
5,414 69 1,025 6,508 
Severance (c)
1,854 3,119 3,261 8,234 
Litigation, regulatory and other governance related expenses (b)
— 2,210 (65)2,145 
Non-income tax expense adjustment (b)
(25)(5)— (30)
Loss attributable to non-controlling interest1,027 — — 1,027 
Adjusted EBITDA$68,239 $6,423 $(16,877)$57,785 
(a)Included within subscription-based revenue in the condensed consolidated statements of operations.
(b)Included within general and administrative expense in the condensed consolidated statements of operations.
(c)Included within employee compensation expense in the condensed consolidated statements of operations.
(d)$5.0 million was included within general and administrative expense and $1.5 million was included within employee compensation expense in the condensed consolidated statements of operations.
12

Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
Segment Information (continued)
(in thousands)
(unaudited) 
Six Months Ended June 30, 2023
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenue$528,241 $82,900 $— $611,141 
Deferred revenue fair value adjustment (a)
69 — — 69 
Adjusted revenue$528,310 $82,900 $— $611,210 
Revenue:
Asset-based$362,694 $— $— $362,694 
Subscription-based151,994 80,044 — 232,038 
Total recurring revenue514,688 80,044 — 594,732 
Professional services and other revenue13,553 2,856 — 16,409 
Total revenue$528,241 $82,900 $— $611,141 
Operating expenses:
Direct expense:
Asset-based$211,155 $— $— $211,155 
Subscription-based2,877 10,418 — 13,295 
Professional services and other8,036 — — 8,036 
Total direct expense222,068 10,418 — 232,486 
Employee compensation152,871 43,155 35,286 231,312 
General and administrative57,792 30,001 19,172 106,965 
Depreciation and amortization48,648 18,099 — 66,747 
Total operating expenses$481,379 $101,673 $54,458 $637,510 
Income (loss) from operations$46,862 $(18,773)$(54,458)$(26,369)
Add (deduct):
Deferred revenue fair value adjustment (a)
69 — — 69 
Depreciation and amortization48,648 18,099 — 66,747 
Non-cash compensation expense (c)
23,285 5,389 12,169 40,843 
Restructuring charges and transaction costs (d)
6,552 313 3,806 10,671 
Severance (c)
5,430 5,547 3,445 14,422 
Litigation, regulatory and other governance related expenses (b)
— 3,534 1,685 5,219 
Non-income tax expense adjustment (b)
(127)(71)— (198)
Loss attributable to non-controlling interest1,805 — — 1,805 
Adjusted EBITDA$132,524 $14,038 $(33,353)$113,209 

(a)Included within subscription-based revenue in the condensed consolidated statements of operations.
(b)Included within general and administrative expense in the condensed consolidated statements of operations.
(c)Included within employee compensation expense in the condensed consolidated statements of operations.
(d)$9.1 million was included within general and administrative expense and $1.6 million was included within employee compensation expense in the condensed consolidated statements of operations.

13

Three Months Ended June 30, 2022
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenue$272,000 $46,852 $— $318,852 
Deferred revenue fair value adjustment (a)
54 — — 54 
Adjusted revenue$272,054 $46,852 $— $318,906 
Revenue:
Asset-based$191,972 $— $— $191,972 
Subscription-based73,568 44,552 — 118,120 
Total recurring revenue265,540 44,552 — 310,092 
Professional services and other revenue6,460 2,300 — 8,760 
Total revenue$272,000 $46,852 $— $318,852 
Operating expenses:
Direct expense:
Asset-based$112,301 $— $— $112,301 
Subscription-based1,504 5,737 — 7,241 
Professional services and other6,917 23 — 6,940 
Total direct expense120,722 5,760 — 126,482 
Employee compensation78,759 23,994 23,014 125,767 
General and administrative45,001 12,171 8,972 66,144 
Depreciation and amortization23,550 8,632 — 32,182 
Total operating expenses$268,032 $50,557 $31,986 $350,575 
Income (loss) from operations$3,968 $(3,705)$(31,986)$(31,723)
Add (deduct):
Deferred revenue fair value adjustment (a)
54 — — 54 
Depreciation and amortization23,550 8,632 — 32,182 
Non-cash compensation expense (c)
13,364 1,852 8,288 23,504 
Restructuring charges and transaction costs (d)
16,897 753 3,376 21,026 
Severance (c)
2,813 (431)4,766 7,148 
Litigation, regulatory and other governance related expenses (b)
— 4,306 — 4,306 
Non-income tax expense adjustment (b)
184 5 — 189 
Loss attributable to non-controlling interest440 — — 440 
Adjusted EBITDA$61,270 $11,412 $(15,556)$57,126 

(a)Included within subscription-based revenue in the condensed consolidated statements of operations.
(b)Included within general and administrative expense in the condensed consolidated statements of operations.
(c)Included within employee compensation expense in the condensed consolidated statements of operations.
(d)$20.9 million was included within general and administrative expense and $0.1 million was included within employee compensation expense in the condensed consolidated statements of operations.

14

Six Months Ended June 30, 2022
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenue$545,568 $94,647 $— $640,215 
Deferred revenue fair value adjustment (a)
108 — — 108 
Adjusted revenue$545,676 $94,647 $— $640,323 
Revenue:
Asset-based$394,689 $— $— $394,689 
Subscription-based142,105 90,749 — 232,854 
Total recurring revenue536,794 90,749 — 627,543 
Professional services and other revenue8,774 3,898 — 12,672 
Total revenue$545,568 $94,647 $— $640,215 
Operating expenses:
Direct expense:
Asset-based$229,729 $— $— $229,729 
Subscription-based2,869 12,183 — 15,052 
Professional services and other6,932 51 — 6,983 
Total direct expense239,530 12,234 — 251,764 
Employee compensation157,403 54,160 41,053 252,616 
General and administrative72,361 20,782 17,336 110,479 
Depreciation and amortization47,037 16,763 — 63,800 
Total operating expenses$516,331 $103,939 $58,389 $678,659 
Income (loss) from operations$29,237 $(9,292)$(58,389)$(38,444)
Add (deduct):
Deferred revenue fair value adjustment (a)
108 — — 108 
Depreciation and amortization47,037 16,763 — 63,800 
Non-cash compensation expense (c)
24,654 5,387 15,277 45,318 
Restructuring charges and transaction costs (d)
17,181 750 5,441 23,372 
Severance (c)
4,223 1,211 4,820 10,254 
Litigation, regulatory and other governance related expenses (b)
— 7,383 — 7,383 
Non-income tax expense adjustment (b)
291 (78)— 213 
Loss attributable to non-controlling interest817 — — 817 
Other— 2 — 2 
Adjusted EBITDA$123,548 $22,126 $(32,851)$112,823 

(a)Included within subscription-based revenue in the condensed consolidated statements of operations.
(b)Included within general and administrative expense in the condensed consolidated statements of operations.
(c)Included within employee compensation expense in the condensed consolidated statements of operations.
(d)$23.5 million was included within general and administrative expense and $(0.1) million was included within employee compensation expense in the condensed consolidated statements of operations.



15

Envestnet, Inc.
Key Metrics
(in millions, except accounts and advisors data)
(unaudited)

Envestnet Wealth Solutions Segment

The following table provides information regarding the amount of assets utilizing our platforms, financial advisors and investor accounts in the periods indicated:

As of
June 30,September 30,December 31,March 31,June 30,
20222022202220232023
(in millions, except accounts and advisors data)
Platform Assets
Assets under Management (“AUM”)$325,209 $315,883 $341,144 $363,244 $384,773 
Assets under Administration (“AUA”)352,840 350,576 367,412 379,843 394,078 
Total AUM/A678,049 666,459 708,556 743,087 778,851 
Subscription4,312,114 4,134,414 4,382,109 4,566,971 4,643,313 
Total Platform Assets$4,990,163 $4,800,873 $5,090,665 $5,310,058 $5,422,164 
Platform Accounts
AUM1,491,8611,522,9681,547,0091,571,8621,609,677
AUA1,061,4841,135,3021,135,0261,142,1661,144,375
Total AUM/A2,553,3452,658,2702,682,0352,714,0282,754,052
Subscription15,312,14415,596,40315,665,02015,779,98015,916,955
Total Platform Accounts17,865,48918,254,67318,347,05518,494,00818,671,007
Advisors
AUM/A38,39438,41738,02538,61138,809
Subscription66,83867,34867,52067,84368,439
Total Advisors105,232105,765105,545106,454107,248


The following table summarizes the changes in AUM and AUA for the three months ended June 30, 2023:

Asset Rollforward - Three Months Ended June 30, 2023
As of March 31,GrossNetMarketReclass toAs of June 30,
2023SalesRedemptionsFlowsImpactSubscription2023
(in millions, except account data)
AUM$363,244 $25,282 $(16,630)$8,652 $12,877 $— $384,773 
AUA379,843 25,389 (24,013)1,376 13,629 (770)394,078 
Total AUM/A$743,087 $50,671 $(40,643)$10,028 $26,506 $(770)$778,851 
Fee-Based Accounts2,714,028 44,244 (4,220)2,754,052 

The above AUM/A gross sales figures for the three months ended June 30, 2023 include $11.8 billion in new client conversions. We onboarded an additional $19.3 billion in subscription conversions during the three months ended June 30, 2023 bringing total conversions for the three months ended June 30, 2023 to $31.1 billion.






16


Envestnet, Inc.
Key Metrics
(in millions, except accounts and advisors data)
(unaudited)

The following table summarizes the changes in AUM and AUA for the six months ended June 30, 2023:

 Asset Rollforward - Six Months Ended June 30, 2023
 As of December 31,GrossNetMarketReclass toAs of June 30,
 2022SalesRedemptionsFlowsImpactSubscription2023
 (in millions, except account data)
AUM$341,144 $49,939 $(32,307)$17,632 $27,136 $(1,139)$384,773 
AUA367,412 57,940 (45,560)12,380 28,158 (13,872)394,078 
Total AUM/A$708,556 $107,879 $(77,867)$30,012 $55,294 $(15,011)$778,851 
Fee-Based Accounts2,682,035 160,493 (88,476)2,754,052 

The above AUM/A gross sales figures for the six months ended June 30, 2023 include $28.9 billion in new client conversions. We onboarded an additional $68.1 billion in subscription conversions during the six months ended June 30, 2023 bringing total conversions for the six months ended June 30, 2023 to $97.0 billion.

Asset and account figures in the “Reclass to Subscription” columns for the three and six months ended June 30, 2023 represent enterprise customers whose billing arrangements in future periods are subscription-based, rather than asset-based. Such amounts are included in Subscription metrics at the end of the quarter in which the reclassification occurred, with no impact on total platform assets or accounts.

Envestnet Data & Analytics Segment
 
The following table provides information regarding the amount of paid-end users and firms using the Envestnet Data & Analytics platform in the periods indicated:
As of
June 30,September 30,December 31,March 31,June 30,
20222022202220232023
(in millions, except number of firms data)
Number of paying users37.2 38.1 38.8 37.5 38.0 
Number of firms1,731 1,815 1,827 1,851 1,873 
17