Exhibit 99.1

Envestnet Reports Second Quarter 2024 Financial Results

Berwyn, PA — August 9, 2024 — 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, 2024.

Three months endedSix months ended
Key Financial MetricsJune 30,%June 30,%
(in millions, except per share data)20242023Change20242023Change
GAAP:
Total revenue$348.3 $312.4 11 %$673.2 $611.1 10 %
Net loss attributable to Envestnet, Inc.$(79.2)$(21.4)*$(76.7)$(62.6)(22)%
Net loss attributable to Envestnet, Inc. per diluted share$(1.44)$(0.39)*$(1.39)$(1.15)(21)%
Non-GAAP:
Adjusted EBITDA(1)
$77.8 $56.0 39 %$148.2 $110.0 35 %
Adjusted net income(1)
$36.4 $30.4 20 %$75.8 $60.5 25 %
Adjusted net income per diluted share(1)
$0.55 $0.46 20 %$1.14 $0.91 25 %
Free cash flow(1)
$67.0 $36.7 83 %$47.1 $(25.1)*
__________________________________________________
*Not meaningful

Jim Fox, Board Chair and Interim CEO, said: "We look forward to the successful completion of our pending transaction with Bain Capital and the value it will deliver to our shareholders. We remain committed to maintaining our leading position, which is based on executing on what our clients need and deepening our relationships with them."


Financial Results for the Second Quarter 2024 Compared to the Second Quarter 2023

Total revenue increased 11% to $348.3 million for the second quarter of 2024 from $312.4 million for the second quarter of 2023. Asset-based recurring revenue increased 18% and represented 63% of total revenue for the second quarter of 2024, compared to 59% of total revenue for the second quarter of 2023. Subscription-based recurring revenue increased 3% and represented 34% of total revenue for the second quarter of 2024, compared to 37% of total revenue for the second quarter of 2023. Professional services and other non-recurring revenue decreased 8% for the second quarter of 2024 from the second quarter of 2023.

Total operating expenses increased 29% to $423.8 million for the second quarter of 2024 from $327.7 million for the second quarter of 2023. Direct expense increased 16% to $144.4 million for the second quarter of 2024 from $124.2 million for the second quarter of 2023. Employee compensation decreased 11% to $104.1 million for the second quarter of 2024 from $117.1 million for the second quarter of 2023. Employee compensation was 30% of total revenue for the second quarter of 2024, compared to 37% of total revenue for the second quarter of 2023. General and administrative expense decreased 3% to $52.9 million for the second quarter of 2024 from $54.4 million for the second quarter of 2023. General and administrative expense was 15% of total revenue for the second quarter of 2024, compared to 17% of total revenue for the second quarter of 2023. A non-cash goodwill impairment charge of $96.3 million and a non-cash gain on deconsolidation of non-controlling interest of $19.5 million were recognized during the second quarter of 2024.

Loss from operations was $75.5 million for the second quarter of 2024 compared to a loss from operations of $15.3 million for the second quarter of 2023. Net loss attributable to Envestnet, Inc. was $79.2 million, or $1.44 per diluted share, for the second quarter of 2024 compared to a net loss attributable to Envestnet, Inc. of $21.4 million, or $0.39 per diluted share, for the second quarter of 2023.

Adjusted EBITDA(1) increased 39% to $77.8 million for the second quarter of 2024 from $56.0 million for the second quarter of 2023. Adjusted net income(1) increased 20% to $36.4 million, or $0.55 per diluted share, for the second quarter of 2024 from $30.4 million, or $0.46 per diluted share, for the second quarter of 2023. Free cash flow(1) increased 83%, to $67.0 for the second quarter of 2024 from $36.7 for the second quarter of 2023.

Balance Sheet and Liquidity

As of June 30, 2024, Envestnet had $122.0 million in cash and cash equivalents and $892.5 million in outstanding debt. Debt as of June 30, 2024 consisted of $317.5 million in convertible notes maturing in 2025 and $575.0 million in convertible notes maturing in 2027. Envestnet's $500.0 million revolving credit facility was undrawn as of June 30, 2024.

Segment Reporting

On October 1, 2023, the Company changed the composition of its reportable segments to reflect the way that the Company's chief operating decision maker reviews the operating results, assesses performance and allocates resources. All segment information presented within this Exhibit 99.1 for the three and six months ended June 30, 2024 is presented in conjunction with the current organizational structure, with prior periods adjusted accordingly.

Correction of Immaterial Errors

In July 2024, the Company identified that as a result of a clerical error an event of default had occurred pursuant to the indenture under which the Convertible Notes due 2025 had been issued, and therefore the Convertible Notes due 2025 should have been classified as current debt instead of as non-current debt as previously recorded in the condensed consolidated balance sheets. Upon identification, the Company promptly cured the technical default. Upon analysis, the Company concluded that the classification error was immaterial in prior period financial statements as the event of default was caused by a clerical error and was not reflective of noncompliance with any factors impacting the Company’s liquidity or financial covenants. If the Company had identified the technical default in the prior period and classified the debt as current, the matter would have been disclosed and promptly resolved. Therefore, amendment of previously filed reports was not required. However, the Company corrected this immaterial error in the prior year reported within this press release.

During the fourth quarter of 2023, the Company identified that the arrangement with a third-party for the use of cloud hosted virtual servers which was previously accounted for as a finance lease transaction and included as a component of property and equipment, net in the condensed consolidated balance sheets should have been recognized as a prepayment included within prepaid expenses and other current assets and other assets in the condensed consolidated balance sheets. The Company concluded that the classification of these transactions was immaterial in prior period financial statements and that amendment of
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previously filed reports was not required. However, the Company corrected this immaterial error in the prior periods reported within this press release.
Conference Call

Envestnet will host a conference call to discuss second quarter 2024 financial results on August 12, 2024 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.

About Envestnet

Envestnet, Inc. (NYSE: ENV) is transforming the way financial advice and insight are delivered. Our mission is to empower financial advisors and service providers with innovative technology, solutions and intelligence. Envestnet's clients include more than 110,000 advisors, 17 of the 20 largest U.S. banks, 48 of the 50 largest wealth management and brokerage firms, over 500 of the largest RIAs and hundreds of FinTech companies, all of which leverage Envestnet technology and services that help drive better outcomes for enterprises, advisors and their clients.

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

(1) Non-GAAP Financial Measures

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

“Adjusted net income” represents net income (loss) before income tax provision (benefit), gain (loss) from equity method investments, deferred revenue fair value adjustment, non‑cash interest expense, cash interest on our Convertible Notes, amortization of acquired intangibles, goodwill impairment, gain on deconsolidation, non‑cash compensation expense, restructuring charges and transaction costs, severance expense, litigation, regulatory and other governance related expenses, foreign currency, non-income tax expense adjustment, fair market value adjustments to investments in private companies and 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.

"Free cash flow" represents net cash provided by (used in) operating activities less purchases of property and equipment and capitalization of internally developed software.

For further information see reconciliations of Non-GAAP Financial Measures on pages 9-15 of this press release, and the section entitled "Non-GAAP Financial Measures" in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) which are available on the SEC’s website at http://www.sec.gov or our Investor Relations website at http://investor.envestnet.com/. 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), net income (loss) per share or net cash provided by (used in) operating activities determined in accordance with GAAP.

Cautionary Statement Regarding Forward-Looking Statements

The forward-looking statements made in this press release and its attachments concerning 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. In addition, any statements that refer to our pending merger with affiliates of vehicles managed or advised by Bain Capital Private
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Equity, LP. (the "Merger"), projections of our future financial performance, our anticipated growth and trends in our business and other characteristics of future events or circumstances are forward-looking statements. These statements involve risks and uncertainties and our 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 risk that the Merger may not be completed on the anticipated terms in a timely manner or at all, which may adversely affect our business and the price of our common stock; the failure to satisfy any of the conditions to the consummation of the Merger, including the receipt of certain regulatory approvals and the approval of the holders in a majority of the voting power of our common stock; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the merger agreement, including in circumstances requiring us to pay a termination fee; the effect of the announcement or pendency of the Merger on our business relationships, operating results and business relationships, operating results and business generally; risks that the Merger disrupts our current plans and operations (including the ability of certain customers to terminate or amend contracts upon a change of control); our ability to retain, hire and integrate skilled personnel, including our senior management team and maintain relationships with key business partners and customers, and others with whom we do business, in light of the Merger; risks related to diverting management's attention from our ongoing business operations; unexpected costs, charges or expenses resulting from the Merger; the ability to obtain the necessary financing arrangements set forth in the commitment letters received in connection with the Merger; potential litigation relating to the Merger that could be instituted against the parties to the merger agreement or their respective directors, managers or officers; the effects of any outcomes related thereto; certain restrictions during the pendency of the Merger that may impact our ability to pursue certain business opportunities or strategic transactions; uncertainty as to timing of completion of the Merger; risks that the benefits of the Merger are not realized when and as expected; adverse economic or global market conditions, including periods of rising inflation and market interest rates, and governmental responses to such conditions; the conflicts in the Middle East and between Russia and Ukraine, including related sanctions and their impact on the global economy and capital markets; 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, particularly goodwill and intangible assets; the amount of our debt, our ability to service our debt and risks associated with derivative transactions associated with 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 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; increased geopolitical unrest and other events outside of our control that could adversely affect the global economy or specific international, regional and domestic markets; 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; the failure to protect our intellectual property rights; our reliance on outsourcing arrangements; activist shareholders hindering the execution of our business strategy, diverting board and management attention and resources and causing us to incur substantial expenses; public health crises, pandemics or similar events; 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; our ability to introduce new solutions and services and enhancements; regulatory compliance failures; 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 cybersecurity 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; 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; general economic, political and regulatory conditions; global events, natural disasters, environmental disasters, terrorist attacks and pandemics, including their impact on the economy and trading markets; and management’s response to these factors. More information regarding these and other risks, uncertainties and factors is contained in our filings with the SEC which are available on the SEC’s website at http://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 9, 2024 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.
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Contacts
Investor RelationsMedia Relations
investor.relations@envestnet.commedia@envestnet.com
(312) 827-3940
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Envestnet, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
June 30,December 31,
20242023
Assets
Current assets:
Cash and cash equivalents$121,967 $91,378 
Fees receivable, net129,252 120,958 
Prepaid expenses and other current assets57,899 51,472 
Total current assets309,118 263,808 
Property and equipment, net45,641 48,223 
Internally developed software, net205,090 224,713 
Intangible assets, net311,868 338,068 
Goodwill690,885 806,563 
Operating lease right-of-use assets, net65,257 69,154 
Investments in unconsolidated entities96,755 56,292 
Other assets70,358 70,431 
Total assets$1,794,972 $1,877,252 
Liabilities and equity
Current liabilities:
Accounts payable, accrued expenses and other current liabilities$225,508 $241,424 
Operating lease liabilities12,149 12,909 
Deferred revenue34,567 38,201 
Current portion of debt— 314,532 
Total current liabilities272,224 607,066 
Debt, net of current portion879,079 562,080 
Operating lease liabilities, net of current portion95,294 100,830 
Deferred tax liabilities, net15,208 16,568 
Other liabilities16,820 16,202 
Total liabilities1,278,625 1,302,746 
Equity:
Total stockholders’ equity attributable to Envestnet, Inc.
516,347 568,191 
Non-controlling interest— 6,315 
Total liabilities and equity$1,794,972 $1,877,252 
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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,
2024202320242023
Revenue:
Asset-based$219,485 $185,762 $422,101 $362,694 
Subscription-based117,988 114,959 235,450 232,038 
Total recurring revenue337,473 300,721 657,551 594,732 
Professional services and other revenue10,800 11,713 15,672 16,409 
Total revenue348,273 312,434 673,223 611,141 
Operating expenses:
Direct expense144,351 124,209 270,984 233,888 
Employee compensation104,066 117,097 207,718 231,312 
General and administrative52,924 54,375 104,989 108,725 
Depreciation and amortization45,733 32,065 79,625 63,585 
Goodwill impairment96,269 — 96,269 — 
Gain on deconsolidation(19,523)— (19,523)— 
Total operating expenses423,820 327,746 740,062 637,510 
Loss from operations(75,547)(15,312)(66,839)(26,369)
Other expense, net(4,788)(5,016)(9,169)(10,011)
Loss before income tax provision (benefit) and equity method investments(80,335)(20,328)(76,008)(36,380)
Income tax provision (benefit)(652)418 853 24,187 
Gain (loss) from equity method investments482 (2,386)(1,801)(5,326)
Net loss(79,201)(23,132)(78,662)(65,893)
Add: Net loss attributable to non-controlling interest— 1,716 1,974 3,249 
Net loss attributable to Envestnet, Inc.$(79,201)$(21,416)$(76,688)$(62,644)
Net loss attributable to Envestnet, Inc. per share:
Basic and diluted$(1.44)$(0.39)$(1.39)$(1.15)
Weighted average common shares outstanding:
Basic and diluted55,143,013 54,439,733 55,013,544 54,289,443 
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Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

Six Months Ended
June 30,
20242023
Cash flows from operating activities:
Net loss$(78,662)$(65,893)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization79,625 63,585 
Non-cash compensation expense36,720 40,843 
Non-cash interest expense2,817 2,251 
Non-cash goodwill impairment96,269 — 
Non-cash gain on deconsolidation(19,523)— 
Loss from equity method investments1,801 5,326 
Lease related impairments— 2,483 
Other2,120 (218)
Changes in operating assets and liabilities:
Fees receivable, net(12,813)(22,357)
Prepaid expenses and other assets(5,745)(6,762)
Accounts payable, accrued expenses and other liabilities(14,049)20,070 
Deferred revenue2,494 (852)
Net cash provided by operating activities91,054 38,476 
Cash flows from investing activities:
Purchases of property and equipment(5,172)(16,735)
Capitalization of internally developed software(38,751)(46,801)
Deconsolidation of non-controlling interest(11,073)— 
Investments in private companies(3,055)(1,450)
Acquisition of proprietary technology(3,000)(12,000)
Issuance of loan receivable to private company— (20,000)
Other— 319 
Net cash used in investing activities(61,051)(96,667)
Cash flows from financing activities:
Proceeds from borrowings on Revolving Credit Facility— 40,000 
Payments related to Revolving Credit Facility— (20,000)
Payments related to Convertible Notes— (45,000)
Proceeds from exercise of stock options724 472 
Payments related to tax withholdings for stock-based compensation(12,155)(13,774)
Payments related to share repurchases— (9,289)
Proceeds from capital contributions received by non-controlling interest12,012 — 
Purchase of non-controlling units from third-party shareholders— (1,008)
Other3 3 
Net cash provided by (used in) financing activities584 (48,596)
Effect of exchange rate on changes on cash and cash equivalents2 3,633 
Net change in cash and cash equivalents30,589 (103,154)
Cash and cash equivalents, beginning of period91,378 162,173 
Cash and cash equivalents, end of period$121,967 $59,019 



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

Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
Net loss$(79,201)$(23,132)$(78,662)$(65,893)
Add (deduct):
Deferred revenue fair value adjustment (a)
— 17 — 69 
Interest income (b)
(2,588)(1,656)(4,571)(3,014)
Interest expense (b)
6,097 6,531 12,186 12,851 
Income tax provision (benefit)(652)418 853 24,187 
Depreciation and amortization45,733 32,065 79,625 63,585 
Goodwill impairment96,269 — 96,269 — 
Gain on deconsolidation(19,523)— (19,523)— 
Non-cash compensation expense (d)
17,822 21,390 36,720 40,843 
Restructuring charges and transaction costs (e)
8,405 6,508 10,461 10,671 
Severance expense (d)
669 8,234 4,094 14,422 
Litigation, regulatory and other governance related expenses (c)
4,020 2,145 6,308 5,219 
Foreign currency (b)
(229)74 46 107 
Non-income tax expense adjustment (c)
(39)(30)(88)(198)
Fair market value adjustments to investments in private companies (b)
1,508 67 1,508 67 
(Gain) loss from equity method investments(482)2,386 1,801 5,326 
Loss attributable to non-controlling interest— 1,027 1,160 1,805 
Adjusted EBITDA$77,809 $56,044 $148,187 $110,047 
__________________________________________________________
(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, 2024 and 2023, $6.7 million and $5.0 million, respectively, were included within general and administrative expense and $1.7 million and $1.5 million, respectively, were included within employee compensation expense in the condensed consolidated statements of operations. For the six months ended June 30, 2024 and 2023, $9.2 million and $9.1 million, respectively, were included within general and administrative expense and $1.3 million and $1.6 million, respectively, were included within employee compensation expense in the condensed consolidated statements of operations.
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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,
2024202320242023
Net loss$(79,201)$(23,132)$(78,662)$(65,893)
Income tax provision (benefit) (a)
(652)418 853 24,187 
Gain (loss) from equity method investments482 (2,386)(1,801)(5,326)
Loss before income tax provision (benefit) and equity method investments(80,335)(20,328)(76,008)(36,380)
Add (deduct):
Deferred revenue fair value adjustment (b)
— 17 — 69 
Non-cash interest expense (d)
1,412 1,427 2,817 2,869 
Cash interest - Convertible Notes (d)
4,369 4,543 8,738 9,108 
Amortization of acquired intangibles (e)
14,457 15,720 29,199 32,660 
Goodwill impairment96,269 — 96,269 — 
Gain on deconsolidation(19,523)— (19,523)— 
Non-cash compensation expense (f)
17,822 21,390 36,720 40,843 
Restructuring charges and transaction costs (g)
8,405 6,508 10,461 10,671 
Severance expense (f)
669 8,234 4,094 14,422 
Litigation, regulatory and other governance related expenses (c)
4,020 2,145 6,308 5,219 
Foreign currency (d)
(229)74 46 107 
Non-income tax expense adjustment (c)
(39)(30)(88)(198)
Fair market value adjustments to investments in private companies (d)
1,508 67 1,508 67 
Loss attributable to non-controlling interest— 1,027 1,160 1,805 
Adjusted net income before income tax effect48,805 40,794 101,701 81,262 
Income tax effect (h)
(12,445)(10,403)(25,934)(20,722)
Adjusted net income$36,360 $30,391 $75,767 $60,540 
Basic number of weighted average shares outstanding55,143,013 54,439,733 55,013,544 54,289,443 
Effect of dilutive shares:
Convertible Notes10,811,884 11,253,471 10,811,884 11,361,458 
Non-vested RSUs and PSUs590,918 316,758 527,360 445,323 
Options to purchase common stock49,692 57,902 38,996 73,271 
Diluted number of weighted average shares outstanding66,595,507 66,067,864 66,391,784 66,169,495 
Adjusted net income per diluted share$0.55 $0.46 $1.14 $0.91 
__________________________________________________________
(a)For the three months ended June 30, 2024 and 2023, the effective tax rate computed in accordance with GAAP equaled 0.8% and (1.8)%, respectively. For the six months ended June 30, 2024 and 2023, the effective tax rate computed in accordance with GAAP equaled (1.1)% and (58.0)%, 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 depreciation and amortization expense in the condensed consolidated statements of operations.
(f)Included within employee compensation expense in the condensed consolidated statements of operations.
(g)For the three months ended June 30, 2024 and 2023, $6.7 million and $5.0 million, respectively, were included within general and administrative expense and $1.7 million and $1.5 million, respectively, were included within employee compensation expense in the condensed consolidated statements of operations. For the six months ended June 30, 2024 and 2023, $9.2 million and $9.1 million, respectively, were included within general and administrative expense and $1.3 million and $1.6 million, respectively, were included within employee compensation expense in the condensed consolidated statements of operations.
(h)An estimated normalized tax rate of 25.5% has been used to compute adjusted net income for the three and six months ended June 30, 2024 and 2023.
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Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands)
(unaudited) 

Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
Net cash provided by operating activities$89,110 $72,149 $91,054 $38,476 
Less: Purchases of property and equipment(3,272)(12,333)(5,172)(16,735)
Less: Capitalization of internally developed software
(18,798)(23,137)(38,751)(46,801)
Free cash flow$67,040 $36,679 $47,131 $(25,060)
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Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
Segment Information
(in thousands)
(unaudited)

Three Months Ended June 30, 2024
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenue:
Asset-based$219,485 $— $— $219,485 
Subscription-based84,734 33,254 — 117,988 
Total recurring revenue304,219 33,254 — 337,473 
Professional services and other revenue7,889 2,911 — 10,800 
Total revenue312,108 36,165 — 348,273 
Operating expenses:
Direct expense
Asset-based130,116 — — 130,116 
Subscription-based1,474 7,174 — 8,648 
Professional services and other5,587 — — 5,587 
Total direct expense137,177 7,174 — 144,351 
Employee compensation77,210 11,872 14,984 104,066 
General and administrative25,698 15,270 11,956 52,924 
Depreciation and amortization38,375 7,358 — 45,733 
Goodwill impairment— 96,269 — 96,269 
Gain on deconsolidation(19,523)— — (19,523)
Total operating expenses258,937 137,943 26,940 423,820 
Income (loss) from operations53,171 (101,778)(26,940)(75,547)
Add (deduct):
Depreciation and amortization38,375 7,358 — 45,733 
Goodwill impairment— 96,269 — 96,269 
Gain on deconsolidation(19,523)— — (19,523)
Non-cash compensation expense (b)
11,360 1,904 4,558 17,822 
Restructuring charges and transaction costs (c)
2,063 60 6,282 8,405 
Severance expense (b)
632 — 37 669 
Litigation, regulatory and other governance related expenses (a)
— 4,020 — 4,020 
Non-income tax expense adjustment (a)
(39)— — (39)
Adjusted EBITDA$86,039 $7,833 $(16,063)$77,809 
__________________________________________________________
(a)Included within general and administrative expense in the condensed consolidated statements of operations.
(b)Included within employee compensation expense in the condensed consolidated statements of operations.
(c)$6.7 million was included within general and administrative expense and $1.7 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
(in thousands)
(unaudited)

Six Months Ended June 30, 2024
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenue:
Asset-based$422,101 $— $— $422,101 
Subscription-based168,902 66,548 — 235,450 
Total recurring revenue591,003 66,548 — 657,551 
Professional services and other revenue10,915 4,757 — 15,672 
Total revenue601,918 71,305 — 673,223 
Operating expenses:
Direct expense:
Asset-based248,519 — — 248,519 
Subscription-based2,905 13,973 — 16,878 
Professional services and other5,587 — — 5,587 
Total direct expense257,011 13,973 — 270,984 
Employee compensation152,406 23,564 31,748 207,718 
General and administrative54,730 30,584 19,675 104,989 
Depreciation and amortization65,193 14,432 — 79,625 
Goodwill impairment— 96,269 — 96,269 
Gain on deconsolidation(19,523)— — (19,523)
Total operating expenses509,817 178,822 51,423 740,062 
Income (loss) from operations92,101 (107,517)(51,423)(66,839)
Add (deduct):
Depreciation and amortization65,193 14,432 — 79,625 
Goodwill impairment— 96,269 — 96,269 
Gain on deconsolidation(19,523)— — (19,523)
Non-cash compensation expense (b)
22,747 3,768 10,205 36,720 
Restructuring charges and transaction costs (c)
2,106 739 7,616 10,461 
Severance expense (b)
2,436 13 1,645 4,094 
Litigation, regulatory and other governance related expenses (a)
— 6,308 — 6,308 
Non-income tax expense adjustment (a)
(88)— — (88)
Loss attributable to non-controlling interest1,160 — — 1,160 
Adjusted EBITDA$166,132 $14,012 $(31,957)$148,187 
__________________________________________________________
(a)Included within general and administrative expense in the condensed consolidated statements of operations.
(b)Included within employee compensation expense in the condensed consolidated statements of operations.
(c)$9.2 million was included within general and administrative expense and $1.3 million was included within employee compensation expense in the condensed consolidated statements of operations.









13

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

Three months ended June 30, 2023
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenue:
Asset-based$185,762 $— $— $185,762 
Subscription-based79,744 35,215 — 114,959 
Total recurring revenue265,506 35,215 — 300,721 
Professional services and other revenue10,318 1,395 — 11,713 
Total revenue275,824 36,610 — 312,434 
Operating expenses:
Direct expense:
Asset-based108,532 — — 108,532 
Subscription-based1,857 5,788 — 7,645 
Professional services and other8,032 — — 8,032 
Total direct expense118,421 5,788 — 124,209 
Employee compensation77,898 19,839 19,360 117,097 
General and administrative31,225 14,792 8,358 54,375 
Depreciation and amortization25,575 6,490 — 32,065 
Total operating expenses253,119 46,909 27,718 327,746 
Income (loss) from operations22,705 (10,299)(27,718)(15,312)
Add (deduct):
Deferred revenue fair value adjustment (a)
17 — — 17 
Depreciation and amortization25,575 6,490 — 32,065 
Non-cash compensation expense (c)
12,325 2,445 6,620 21,390 
Restructuring charges and transaction costs (d)
5,414 69 1,025 6,508 
Severance expense (c)
1,853 3,120 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$68,891 $4,030 $(16,877)$56,044 
__________________________________________________________
(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.


14

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

Six months ended June 30, 2023
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenue:
Asset-based$362,694 $— $— $362,694 
Subscription-based160,214 71,824 — 232,038 
Total recurring revenue522,908 71,824 — 594,732 
Professional services and other revenue13,565 2,844 — 16,409 
Total revenue536,473 74,668 — 611,141 
Operating expenses:
Direct expense:
Asset-based211,155 — — 211,155 
Subscription-based3,635 11,062 — 14,697 
Professional services and other8,036 — — 8,036 
Total direct expense222,826 11,062 — 233,888 
Employee compensation156,945 39,081 35,286 231,312 
General and administrative60,332 29,221 19,172 108,725 
Depreciation and amortization51,067 12,518 — 63,585 
Total operating expenses491,170 91,882 54,458 637,510 
Income (loss) from operations45,303 (17,214)(54,458)(26,369)
Add (deduct):
Deferred revenue fair value adjustment (a)
69 — — 69 
Depreciation and amortization51,067 12,518 — 63,585 
Non-cash compensation expense (c)
23,792 4,882 12,169 40,843 
Restructuring charges and transaction costs (d)
6,553 312 3,806 10,671 
Severance expense (c)
5,652 5,325 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$134,114 $9,286 $(33,353)$110,047 
__________________________________________________________
(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.



15

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

Envestnet Wealth Solutions Segment

The following table provides information regarding the amount of assets and number of accounts and advisors supported by the Envestnet Wealth Solutions platform:

As of
June 30,September 30,December 31,March 31,June 30,
20232023202320242024
Platform Assets
Assets under Management (“AUM”)$384,773 $375,408 $416,001 $452,464 $471,978 
Assets under Administration (“AUA”)394,078 398,082 430,846 471,401 471,479 
Total AUM/A778,851 773,490 846,847 923,865 943,457 
Subscription4,643,313 4,579,248 4,959,514 5,158,180 5,327,939 
Total Platform Assets$5,422,164 $5,352,738 $5,806,361 $6,082,045 $6,271,396 
Platform Accounts
AUM1,609,6771,614,8731,640,8791,688,0441,752,768
AUA1,144,3751,257,0941,254,9621,315,4421,325,370
Total AUM/A2,754,0522,871,9672,895,8413,003,4863,078,138
Subscription15,916,95516,072,84816,248,59816,641,63116,364,088
Total Platform Accounts18,671,00718,944,81519,144,43919,645,11719,442,226
Advisors
AUM/A38,80938,07838,69738,81438,484
Subscription68,43969,31869,97370,26271,568
Total Advisors107,248107,396108,670109,076110,052

The following tables summarize the changes in the amount of AUM/A assets and number of AUM/A accounts:


Asset Rollforward - Three Months Ended June 30, 2024
As of
March 31,		GrossNetMarketAs of June 30,
2024SalesRedemptionsFlowsImpactReclassifications2024
(in millions, except account data)
AUM$452,464 $32,468 $(18,900)$13,568 $4,186 $1,760 $471,978 
AUA471,401 32,847 (35,790)(2,943)6,032 (3,011)471,479 
Total AUM/A$923,865 $65,315 $(54,690)$10,625 $10,218 $(1,251)$943,457 
Fee-Based Accounts3,003,486 82,230 (7,578)3,078,138 

The above AUM/A gross sales figures for the three months ended June 30, 2024 include $18.2 billion in new client conversions. We onboarded an additional $149.6 billion in subscription conversions during the three months ended June 30, 2024 bringing total conversions for the three months ended June 30, 2024 to $167.8 billion.


16


 Asset Rollforward - Six Months Ended June 30, 2024
 As of
 December 31,		GrossNetMarketAs of June 30,
 2023SalesRedemptionsFlowsImpactReclassifications2024
(in millions, except account data)
AUM$416,001 $64,595 $(38,501)$26,094 $26,880 $3,003 $471,978 
AUA430,846 78,443 (61,192)17,251 28,715 (5,333)471,479 
Total AUM/A$846,847 $143,038 $(99,693)$43,345 $55,595 $(2,330)$943,457 
Fee-Based Accounts2,895,841 194,863 (12,566)3,078,138 

The above AUM/A gross sales figures for the six months ended June 30, 2024 include $48.0 billion in new client conversions. We onboarded an additional $180.7 billion in subscription conversions during the six months ended June 30, 2024 bringing total conversions for the six months ended June 30, 2024 to $228.7 billion.

Asset and account figures in the “Reclassifications” column for the three and six months ended June 30, 2024 represent immaterial amounts that were reclassified between AUM, AUA and subscription to reflect updated customer billing arrangements. These reclassifications have no impact on total platform assets or accounts.

Envestnet Data & Analytics Segment
 
The following table provides information regarding the number of paid end-users and firms using the Envestnet Data & Analytics platform:
As of
June 30,September 30,December 31,March 31,June 30,
20232023202320242024
Number of paid end-users38.0 42.3 38.3 43.8 44.3 
Number of firms1,339 1,322 1,324 1,323 1,182 
17