Exhibit 99.1

Envestnet Reports Third Quarter 2020 Financial Results

Chicago, IL — November 5, 2020 — Envestnet (NYSE: ENV), a leading provider of intelligent systems for wealth management and financial wellness, today reported financial results for the three and nine months ended September 30, 2020.
Three months endedNine months ended
Key Financial MetricsSeptember 30,%September 30,%
(in millions except per share data)20202019Change20202019Change
GAAP:
Total revenues$252.6 $236.1 7%$734.4 $660.2 11%
Net income (loss)$2.3 $(3.0)n/m$(10.3)$(20.6)(50)%
Net income (loss) per diluted share attributable to Envestnet, Inc.$0.03 $(0.06)n/m$(0.19)$(0.40)(53)%
Non-GAAP:
Adjusted revenues(1)
$252.7 $239.3 6%$735.0 $666.9 10%
Adjusted net revenues(1)
$181.5 $175.0 4%$533.4 $488.4 9%
Adjusted EBITDA(1)
$67.6 $54.5 24%$178.0 $131.8 35%
Adjusted net income(1)
$40.2 $32.4 24%$103.2 $76.3 35%
Adjusted net income per diluted share(1)
$0.72 $0.60 20%$1.88 $1.46 29%
n/m - not meaningful

"During the third quarter Envestnet again delivered strong financial results, managing through these uncertain days, while supporting our clients and executing on our strategic plan," said Bill Crager, Chief Executive Officer.

"Our mission is to make financial wellness a reality for everyone. We are building the ecosystem that enables a new standard for personal financial services," concluded Mr. Crager.

Financial Results for the Third Quarter of 2020

Asset-based recurring revenues increased 9% from the third quarter of 2019, and represented 55% of total revenues for the third quarter of 2020 compared to 54% for the third quarter 2019. Subscription-based recurring revenues increased 7% from the third quarter of 2019, and represented 43% of total revenues for the third quarter of 2020, consistent with the third quarter of 2019. Professional services and other non-recurring revenues decreased 22% from the prior year period. Total revenues increased 7% to $252.6 million for the third quarter of 2020 from $236.1 million for the third quarter of 2019.

Total operating expenses for the third quarter of 2020 increased 2% to $240.9 million from $236.2 million in the prior year period. Cost of revenues increased 9% to $78.5 million for the third quarter of 2020 from $71.9 million for the prior year period. Compensation and benefits decreased 1% to $94.4 million for the third quarter of 2020 from $95.6 million for the prior year period. Compensation and benefits were 37% of total revenues for the third quarter of 2020, compared to 40% in the prior year period. General and administration expenses decreased 7% to $39.0 million for the third quarter of 2020 from $42.0 million for the prior year period. General and administrative expenses were 15% of total revenues for the third quarter of 2020, compared to 18% in the prior year period. 

Income from operations was $11.7 million for the third quarter of 2020 compared to loss of $0.1 million for the third quarter of 2019. Net income was $2.3 million for the third quarter of 2020 compared to net loss of $3.0 million for the third quarter of 2019. Net income per diluted share attributable to Envestnet, Inc. was $0.03 for the third quarter of 2020 compared to net loss per diluted share attributable to Envestnet, Inc. of $0.06 for the third quarter of 2019.



Adjusted revenues(1) for the third quarter of 2020 increased 6% to $252.7 million from $239.3 million for the prior year period. Adjusted net revenues(1) for the third quarter of 2020 increased 4% to $181.5 million from $175.0 million for the prior year period. Adjusted EBITDA(1) for the third quarter of 2020 increased 24% to $67.6 million from $54.5 million for the prior year period. Adjusted net income(1) increased 24% for the third quarter of 2020 to $40.2 million from $32.4 million for the prior year period. Adjusted net income per diluted share(1) for the third quarter of 2020 increased 20% to $0.72 from $0.60 in the third quarter of 2019.

Balance Sheet and Liquidity

As of September 30, 2020, the Company had $362.9 million in cash and cash equivalents and $862.5 million in outstanding debt. The outstanding debt as of September 30, 2020 included $345 million in convertible notes maturing in 2023 and $517.5 million in convertible notes maturing in 2025. The Company's $500 million revolving credit facility was undrawn as of September 30, 2020.

Outlook

The Company provided the following outlook for the fourth quarter and full year ending December 31, 2020. This outlook is based on the market value of assets on September 30, 2020. We caution that we cannot predict the market value of our assets on any future date and, in particular, in light of recent market volatility. See “Cautionary Statement Regarding Forward-Looking Statements.”
In Millions Except Adjusted EPS4Q 2020FY 2020
GAAP:
Revenues:
Asset-based$141.5 -$142.5 
Subscription-based108.0 -108.5 
Total recurring revenues$249.5 -$251.0 
Professional services and other revenues6.0 -6.5 
Total revenues$255.5 -$257.5 $989.8 -$991.8 
Asset-based cost of revenues$74.0 -$74.5 $275.6 -$276.1 
Total cost of revenues$81.5 -$82.0 
Net income(a)-(a)(a)-(a)
Diluted shares outstanding55.555.0
Net income per diluted share(a)-(a)(a)-(a)
Non-GAAP:
Adjusted revenues (1):
  Asset-based$141.5 -$142.5 
  Subscription-based108.0 -108.5 
Total recurring revenues$249.5 -$251.0 
  Professional services and other revenues6.0 -6.5 
Total revenues$255.5 -$257.5 $990.5 -$992.5 
Adjusted net revenues (1)
$181.0 -$183.5 $714.4 -$716.9 
Adjusted EBITDA(1)
$60.0 -$61.0 $238.0 -$239.0 
Adjusted net income per diluted share(1)
$0.64 $2.51 -$2.53 

(a) The Company 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.
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Conference Call

Envestnet will host a conference call to discuss third quarter 2020 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://ir.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 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. Over 105,000 advisors and more than 5,100 companies including: 17 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 the Envestnet platform to grow their business and client relationships.

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

(1) Non-GAAP Financial Measures

“Adjusted revenues” excludes the effect of purchase accounting on the fair value of acquired deferred revenue. Under GAAP, we record 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 does not reflect the full amount of revenue that would have been recorded by these entities had they remained stand‑alone entities.

“Adjusted net revenues” represents adjusted revenues less asset-based cost of revenues. Under GAAP, we are required to recognize as revenue certain fees paid to investment managers and other third parties needed for implementation of investment solutions included in our assets under management. Those fees also are required to be recorded as cost of revenues. This non-GAAP metric presents adjusted revenues without such fees included, as they have no impact on our profitability.

Adjusted revenues and Adjusted net revenues have limitations as financial measures, should be considered as supplemental in nature and are not meant as a substitute for revenue prepared in accordance with GAAP.

“Adjusted EBITDA” represents net income before deferred revenue fair value adjustment, interest income, interest expense, accretion on contingent consideration and purchase liability, income tax provision (benefit), depreciation and amortization, non-cash compensation expense, restructuring charges and transaction costs, severance, fair market value adjustment on contingent consideration liability, litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, gain on acquisition of equity method investment, loss allocation from equity method investments and (income) loss attributable to non-controlling interest.

“Adjusted net income” represents net income before deferred revenue fair value adjustment, accretion on contingent consideration and purchase liability, non-cash interest expense, non-cash compensation expense, restructuring charges and transaction costs, severance, fair market value adjustment on contingent consideration liability, amortization of acquired intangibles, litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, gain on acquisition of equity method investment, loss allocation 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.

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“Adjusted net income per diluted share” represents adjusted net income attributable to common stockholders divided by the diluted number of weighted-average shares outstanding.

See reconciliations of Non-GAAP Financial Measures on pages 10-16 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 revenues, net income or net income per share determined in accordance with GAAP.

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 fourth quarter and full year of 2020, its strategic 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, a pandemic or health crisis, including the COVID-19 pandemic, and its impact on financial institutions, the global economy or capital markets, as well as our products, clients, vendors and employees, and our results of operations, the full extent of which is currently unknown; changes and volatility in financial and capital markets, which could result in changes in demand for our products or services or in the value of assets on which we earn revenue; the possibility that the anticipated benefits of any of our acquisitions will not be realized to the extent or when expected, difficulty in sustaining rapid revenue growth, which may place significant demands on our administrative, operational and financial resources, the concentration of nearly all of our revenues 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 revenues, the renegotiation of fee percentages or termination of our services by our clients, our ability to identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies, the impact of market and economic conditions on revenues, our inability 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 expand our relationships with existing customers, grow the number of customers and derive revenue from new offerings such as our data analytics solutions and market research services and premium financial applications, compliance failures, adverse judicial or regulatory proceedings against us, liabilities associated with potential, perceived or actual breaches of fiduciary duties and/or conflicts of interest, changes in laws and regulations, including tax laws and regulations, general economic conditions, political and regulatory conditions, the impact of fluctuations in market condition and interest rates on the demand for our products and services and the value of assets under management or administration, the impact of market conditions on our ability to issue debt and equity, the impact of fluctuations in interest rates on our cost of borrowing, our financial performance, the results of our investments in research and development, our data center and other infrastructure, our ability to maintain the security and integrity of our systems and facilities and to maintain the privacy of personal information, failure of our systems to work properly, our ability to realize operating efficiencies, the advantages of our solutions as compared to those of others, the failure to protect our intellectual property rights, our ability to establish and maintain intellectual property rights, our ability to retain and hire necessary employees and appropriately staff our operations 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://ir.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 November 5, 2020 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.commediarelations@envestnet.com
(312) 827-3940
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Envestnet, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
September 30,December 31,
20202019
Assets
Current assets:
Cash and cash equivalents$362,918 $82,505 
Fees receivable, net76,328 67,815 
Prepaid expenses and other current assets41,966 32,183 
Total current assets481,212 182,503 
Property and equipment, net48,983 53,756 
Internally developed software, net87,478 60,263 
Intangible assets, net452,583 505,589 
Goodwill906,697 879,850 
Operating lease right-of-use-assets, net76,090 82,796 
Other non-current assets48,218 37,127 
Total assets$2,101,261 $1,801,884 
Liabilities and Equity
Current liabilities:
Accrued expenses and other liabilities$141,290 $137,944 
Accounts payable29,609 17,277 
Operating lease liabilities13,835 13,816 
Contingent consideration1,549 — 
Deferred revenue40,037 34,753 
Total current liabilities226,320 203,790 
Convertible Notes749,918 305,513 
Revolving credit facility— 260,000 
Contingent consideration11,741 9,045 
Deferred revenue2,307 5,754 
Non-current operating lease liabilities83,820 88,365 
Deferred tax liabilities, net36,088 29,481 
Other non-current liabilities37,700 32,360 
Total liabilities1,147,894 934,308 
Equity:
Total stockholders’ equity954,673 869,094 
Non-controlling interest(1,306)(1,518)
Total liabilities and equity$2,101,261 $1,801,884 
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Envestnet, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share information)
(unaudited)
 
Three Months EndedNine Months Ended
September 30,September 30,
2020201920202019
Revenues:
Asset-based$137,744 $126,591 $394,801 $355,595 
Subscription-based107,897 100,583 317,427 275,928 
Total recurring revenues245,641 227,174 712,228 631,523 
Professional services and other revenues6,918 8,906 22,183 28,668 
Total revenues252,559 236,080 734,411 660,191 
Operating expenses:
Cost of revenues78,545 71,870 222,327 205,595 
Compensation and benefits94,428 95,587 300,423 285,590 
General and administration38,979 42,016 118,537 124,961 
Depreciation and amortization28,951 26,735 85,077 73,167 
Total operating expenses240,903 236,208 726,364 689,313 
Income (loss) from operations11,656 (128)8,047 (29,122)
Other expense, net(8,836)(9,813)(18,546)(23,088)
Income (loss) before income tax provision (benefit)2,820 (9,941)(10,499)(52,210)
Income tax provision (benefit)497 (6,977)(161)(31,591)
Net income (loss)2,323 (2,964)(10,338)(20,619)
Add: Net (income) loss attributable to non-controlling interest(413)(116)(12)247 
Net income (loss) attributable to Envestnet, Inc.$1,910 $(3,080)$(10,350)$(20,372)
Net income (loss) per share attributable to Envestnet, Inc.:
Basic$0.04 $(0.06)$(0.19)$(0.40)
Diluted$0.03 $(0.06)$(0.19)$(0.40)
Weighted average common shares outstanding:
Basic53,800,048 52,215,469 53,464,101 50,414,427 
Diluted55,558,983 52,215,469 53,464,101 50,414,427 
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Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
September 30,
20202019
OPERATING ACTIVITIES:
Net loss$(10,338)$(20,619)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization85,077 73,167 
Provision for doubtful accounts2,323 1,243 
Deferred income taxes79 (37,626)
Non-cash compensation expense45,721 43,167 
Non-cash interest expense12,255 17,195 
Accretion on contingent consideration and purchase liability1,308 1,240 
Payments of contingent consideration— (578)
Fair market value adjustment to contingent consideration liability(2,056)— 
Gain on acquisition of equity method investment(4,230)— 
Loss allocation from equity method investment4,280 1,507 
Impairment of right of use assets1,426 — 
Other556 — 
Changes in operating assets and liabilities, net of acquisitions:
Fees receivables, net(10,825)6,164 
Prepaid expenses and other current assets(11,139)(4,784)
Other non-current assets(1,807)(6,113)
Accrued expenses and other liabilities3,393 (9,732)
Accounts payable12,084 (6,859)
Deferred revenue1,488 1,231 
Other non-current liabilities2,084 3,242 
Net cash provided by operating activities131,679 61,845 
INVESTING ACTIVITIES:
Purchases of property and equipment(8,824)(16,098)
Capitalization of internally developed software(40,257)(23,649)
Investments in private companies(13,875)(3,200)
Acquisitions of businesses, net of cash acquired(20,257)(321,571)
Net cash used in investing activities(83,213)(364,518)

-continued-















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Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows (continued)
(in thousands)
(unaudited)

Nine Months Ended
September 30,
20202019
FINANCING ACTIVITIES:
Proceeds from issuance of Convertible Notes due 2025517,500 — 
Convertible Notes due 2025 issuance costs(14,540)— 
Proceeds from borrowings on revolving credit facility45,000 175,000 
Payments on revolving credit facility(305,000)(75,000)
Revolving credit facility issuance costs— (2,103)
Payments of deferred consideration on past acquisitions(1,879)— 
Payments of contingent consideration— (171)
Proceeds from exercise of stock options8,053 7,029 
Taxes paid in lieu of shares issued for stock-based compensation(16,283)(19,697)
Issuance of restricted stock units3 4 
Net cash provided by financing activities232,854 85,062 
EFFECT OF EXCHANGE RATE CHANGES ON CASH(1,009)(178)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH280,311 (217,789)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD82,755 289,671 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (a)$363,066 $71,882 

(a) The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the Condensed Consolidated Balance Sheets:
September 30,September 30,
20202019
Cash and cash equivalents$362,918 $71,632 
Restricted cash included in prepaid expenses and other current assets— 82 
Restricted cash included in other non-current assets148 168 
Total cash, cash equivalents and restricted cash$363,066 $71,882 


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Reconciliation of Non-GAAP Financial Measures
(in thousands)
(unaudited) 
Three Months EndedNine Months Ended
September 30,September 30,
2020201920202019
Total revenues$252,559 $236,080 $734,411 $660,191 
Deferred revenue fair value adjustment (a)
91 3,250 607 6,670 
Adjusted revenues252,650 239,330 735,018 666,861 
Asset-based cost of revenues(71,133)(64,339)(201,600)(178,474)
Adjusted net revenues$181,517 $174,991 $533,418 $488,387 
Net income (loss)$2,323 $(2,964)$(10,338)$(20,619)
Add (deduct): 
Deferred revenue fair value adjustment (a)
91 3,250 607 6,670 
Interest income (b)
(262)(448)(850)(2,859)
Interest expense (b)
8,139 8,986 21,907 24,345 
Accretion on contingent consideration and purchase
liability (c)
398 498 1,308 1,240 
Income tax provision (benefit)497 (6,977)(161)(31,591)
Depreciation and amortization28,951 26,735 85,077 73,167 
Non-cash compensation expense (d)
15,852 15,389 43,197 43,241 
Restructuring charges and transaction costs (e)
4,993 4,151 14,461 24,725 
Severance (f)
2,715 2,387 18,566 8,147 
Fair market value adjustment on contingent consideration liability (c)
(74)— (2,056)— 
Non-recurring litigation and regulatory related expenses (c)
1,809 2,065 6,029 2,065 
Foreign currency (b)
(37)363 (68)208 
Non-income tax expense adjustment (c)
1,795 362 1,341 1,480 
Non-recurring gain (b)
— — (4,230)— 
Loss allocation from equity method investments (b)
994 957 4,280 1,507 
(Income) loss attributable to non-controlling interest(603)(210)(1,103)31 
Adjusted EBITDA$67,581 $54,544 $177,967 $131,757 
(a)For the three months ended September 30, 2020 and 2019, $91 and $3,249 were included within subscription-based revenues, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2020 and 2019, $605 and $6,664 were included within subscription-based revenues, respectively, in the condensed consolidated statements of operations. The remaining amounts for all periods were included within professional services and other revenues 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 expenses in the condensed consolidated statements of operations.
(d)For the three months ended September 30, 2020, the entire amount was included in compensation and benefits in the condensed consolidated statements of operations. For the nine months ended September 30, 2020, $45,721 was included in compensation and benefits and a fair value adjustment of $(2,524) included in other expense, net, in the condensed consolidated statements of operations. All of 2019 included in compensation and benefits in the condensed consolidated statements of operations.
(e)For the three months ended September 30, 2020 and 2019, $3,992 and $3,240 were included within general and administrative expenses, respectively, in the condensed consolidated statements of operations. For the three months ended September 30, 2020 and 2019, $969 and $911 were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2020 and 2019 , $11,485 and $14,071 were included within general and administrative expenses, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2020 and 2019, $2,764 and $10,654 were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. The remaining amounts for the 2020 periods were included within other expense, net in the condensed consolidated statements of operations.
(f)Included within compensation and benefits 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 EndedNine Months Ended
September 30,September 30,
2020201920202019
Net income (loss)$2,323 $(2,964)$(10,338)$(20,619)
Income tax provision (benefit) (a)
497 (6,977)(161)(31,591)
Loss before income tax provision (benefit)2,820 (9,941)(10,499)(52,210)
Add (deduct):
Deferred revenue fair value adjustment (b)
91 3,250 607 6,670 
Accretion on contingent consideration and purchase
liability (d)
398 498 1,308 1,240 
Non-cash interest expense (c)
4,738 5,006 10,682 14,268 
Non-cash compensation expense (f)
15,852 15,389 43,197 43,241 
Restructuring charges and transaction costs (e)
4,993 4,151 14,461 24,725 
Severance (g)
2,715 2,387 18,566 8,147 
Fair market value adjustment on contingent consideration liability (d)
(74)— (2,056)— 
Amortization of acquired intangibles (h)
18,510 19,242 56,014 51,048 
Non-recurring litigation and regulatory related expenses (d)
1,809 2,065 6,029 2,065 
Foreign currency (c)
(37)363 (68)208 
Non-income tax expense adjustment (d)
1,795 362 1,341 1,480 
Non-recurring gain (c)
— — (4,230)— 
Loss allocation from equity method investments (c)
994 957 4,280 1,507 
(Income) loss attributable to non-controlling interest(603)(210)(1,103)31 
Adjusted net income before income tax effect54,001 43,519 138,529 102,420 
Income tax effect (i)
(13,772)(11,097)(35,325)(26,117)
Adjusted net income$40,229 $32,422 $103,204 $76,303 
Basic number of weighted-average shares outstanding53,800,048 52,215,469 53,464,101 50,414,427 
Effect of dilutive shares:
Options to purchase common stock331,728 953,184 458,232 1,107,995
Unvested restricted stock units610,442 548,057 548,858 662,364
Convertible notes730,267 9,875 280,375 11,637
Warrants86,498 — 46,562 — 
Diluted number of weighted-average shares outstanding55,558,983 53,726,585 54,798,128 52,196,423 
Adjusted net income per share - diluted$0.72 $0.60 $1.88 $1.46 
(a)For the three months ended September 30, 2020 and 2019, the effective tax rate computed in accordance with GAAP equaled 17.6% and 70.2%, respectively. For the nine months ended September 30, 2020 and 2019, the effective tax rate computed in accordance with GAAP equaled 1.5% and 60.5%, respectively.
(b)For the three months ended September 30, 2020 and 2019, $91 and $3,249 were included within subscription-based revenues, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2020 and 2019, $605 and $6,664 were included within subscription-based revenues, respectively, in the condensed consolidated statements of operations. The remaining amounts for all periods were included within professional services and other revenues in the condensed consolidated statements of operations.
(c)Included within other expense, net in the condensed consolidated statements of operations.
(d)Included within general and administrative expenses in the condensed consolidated statements of operations.
(e)For the three months ended September 30, 2020 and 2019, $3,992 and $3,240 were included within general and administrative expenses, respectively, in the condensed consolidated statements of operations. For the three months ended September 30, 2020 and 2019, $969 and $911 were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2020 and 2019, $11,485 and $14,071 were included within general and administrative expenses, respectively, in the condensed consolidated statements of operations. For the nine months ended September 30, 2020 and 2019, $2,764 and $10,654 were included within compensation and benefits, respectively, in the condensed consolidated statements of operations. The remaining amounts for the 2020 periods were included within other expense, net in the condensed consolidated statements of operations.
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(f)For the three months ended September 30, 2020, $15,852 included in compensation and benefits in the condensed consolidated statements of operations. For the nine months ended September 30, 2020, $45,721 included in compensation and benefits and a fair value adjustment of $(2,524) included in other expense, net, in the condensed consolidated statements of operations. All of 2019 included in compensation and benefits in the condensed consolidated statements of operations.
(g)Included within compensation and benefits in the condensed consolidated statements of operations.
(h)Included within depreciation and amortization in the condensed consolidated statements of operations.
(i)An estimated normalized effective tax rate of 25.5% have been used to compute adjusted net income for the three and nine months ended September 30, 2020 and 2019.


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Reconciliation of Non-GAAP Financial Measures
Segment Information
(in thousands)
(unaudited) 
Three months ended September 30, 2020
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Total Revenues$204,294 $48,265 $— $252,559 
Deferred revenue fair value adjustment (a)
91 — — 91 
Adjusted revenues204,385 48,265 — 252,650 
Less: Asset-based cost of revenues(71,133)— — (71,133)
Adjusted net revenues$133,252 $48,265 $— $181,517 
Revenues:
Asset-based$137,744 $— $— $137,744 
Subscription-based62,783 45,114 — 107,897 
Total recurring revenues200,527 45,114 — 245,641 
Professional services and other revenues3,767 3,151 — 6,918 
Total revenues204,294 48,265 — 252,559 
Operating expenses:
Cost of revenues:
Asset-based71,133 — — 71,133 
Subscription-based1,272 6,019 — 7,291 
Professional services and other30 91 — 121 
Total cost of revenues72,435 6,110 — 78,545 
Compensation and benefits59,522 26,540 8,366 94,428 
General and administration22,248 8,308 8,423 38,979 
Depreciation and amortization20,406 8,545 — 28,951 
Total operating expenses$174,611 $49,503 $16,789 $240,903 
Income (loss) from operations$29,683 $(1,238)$(16,789)$11,656 
Add:
Deferred revenue fair value adjustment (a)
91 — — 91 
Accretion on contingent consideration and purchase liability (b)
341 57 — 398 
Depreciation and amortization20,406 8,545 — 28,951 
Non-cash compensation expense (c)
8,685 4,458 2,709 15,852 
Restructuring charges and transaction costs (d)
944 33 4,016 4,993 
Non-income tax expense adjustment (b)
1,860 (65)— 1,795 
Severance (c)
2,154 495 66 2,715 
Fair market value adjustment on contingent consideration liability (b)
— (74)— (74)
Non-recurring litigation and regulatory related expenses (b)
— 1,809 — 1,809 
Income attributable to non-controlling interest(603)— — (603)
Other(2)— — (2)
Adjusted EBITDA$63,559 $14,020 $(9,998)$67,581 
(a)Included within subscription-based revenues in the condensed consolidated statements of operations.
(b)Included within general and administrative expenses in the condensed consolidated statements of operations.
(c)Included within compensation and benefits in the condensed consolidated statements of operations.
(d)$3,992 included within general and administrative expenses, $969 included within compensation and benefits and $32 included within other expense, net in the condensed consolidated statements of operations.
13

Reconciliation of Non-GAAP Financial Measures
Segment Information (continued)
(in thousands)
(unaudited) 
Nine months ended September 30, 2020
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Total Revenues$590,399 $144,012 $— $734,411 
Deferred revenue fair value adjustment (a)
607 — — 607 
Adjusted revenues591,006 144,012 — 735,018 
Less: Asset-based cost of revenues(201,600)— — (201,600)
Adjusted net revenues$389,406 $144,012 $— $533,418 
Revenues:
Asset-based$394,801 $— $— $394,801 
Subscription-based184,516 132,911 — 317,427 
Total recurring revenues579,317 132,911 — 712,228 
Professional services and other revenues11,082 11,101 — 22,183 
Total revenues590,399 144,012 — 734,411 
Operating expenses:
Cost of revenues:
Asset-based201,600 — — 201,600 
Subscription-based3,691 16,684 — 20,375 
Professional services and other47 305 — 352 
Total cost of revenues205,338 16,989 — 222,327 
Compensation and benefits194,906 82,455 23,062 300,423 
General and administration69,358 26,162 23,017 118,537 
Depreciation and amortization59,907 25,170 — 85,077 
Total operating expenses$529,509 $150,776 $46,079 $726,364 
Income (loss) from operations$60,890 $(6,764)$(46,079)$8,047 
Add:
Deferred revenue fair value adjustment (a)
607 — — 607 
Accretion on contingent consideration and purchase liability (b)
1,087 221 — 1,308 
Depreciation and amortization59,907 25,170 — 85,077 
Non-cash compensation expense (c)
27,437 11,665 6,619 45,721 
Restructuring charges and transaction costs (d)
5,864 489 8,108 14,461 
Non-income tax expense adjustment (b)
1,532 (191)— 1,341 
Severance (c)
14,593 2,587 1,386 18,566 
Fair market value adjustment on contingent consideration liability (b)
— (2,056)— (2,056)
Non-recurring litigation and regulatory related expenses (b)
— 6,029 — 6,029 
Income attributable to non-controlling interest(1,103)— — (1,103)
Other(31)— — (31)
Adjusted EBITDA$170,783 $37,150 $(29,966)$177,967 
(a)$605 included within subscription-based revenues and $2 included within professional services and other revenues in the condensed consolidated statements of operations.
(b)Included within general and administrative expenses in the condensed consolidated statements of operations.
(c)Included within compensation and benefits in the condensed consolidated statements of operations.
(d)$11,485 included within general and administrative expenses, $2,764 included within compensation and benefits and $212 included within other expense, net in the condensed consolidated statements of operations.

14

Reconciliation of Non-GAAP Financial Measures
Segment Information (continued)
(in thousands)
(unaudited) 
Three months ended September 30, 2019
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenues$188,224 $47,856 $— $236,080 
Deferred revenue fair value adjustment (a)
3,250 — — 3,250 
Adjusted revenues191,474 47,856 — 239,330 
Less: Asset-based cost of revenues(64,339)— — (64,339)
Adjusted net revenues$127,135 $47,856 $— $174,991 
Revenues:
Asset-based$126,591 $— $— $126,591 
Subscription-based57,353 43,230 — 100,583 
Total recurring revenues183,944 43,230 — 227,174 
Professional services and other revenues4,280 4,626 — 8,906 
Total revenues188,224 47,856 — 236,080 
Operating expenses:
Cost of revenues:
Asset-based64,339 — — 64,339 
Subscription-based1,248 6,030 — 7,278 
Professional services and other165 88 — 253 
Total cost of revenues65,752 6,118 — 71,870 
Compensation and benefits60,836 28,956 5,795 95,587 
General and administration25,476 11,573 4,967 42,016 
Depreciation and amortization18,414 8,321 — 26,735 
Total operating expenses$170,478 $54,968 $10,762 $236,208 
Income (loss) from operations$17,746 $(7,112)$(10,762)$(128)
Add:
Deferred revenue fair value adjustment (a)
3,250 — — 3,250 
Accretion on contingent consideration and purchase liability (b)
498 — — 498 
Depreciation and amortization18,414 8,321 — 26,735 
Non-cash compensation expense (c)
9,317 3,844 2,228 15,389 
Restructuring charges and transaction costs (d)
733 624 2,794 4,151 
Non-income tax expense adjustment (b)
299 63 — 362 
Severance (c)
1,076 1,218 93 2,387 
Non-recurring litigation and regulatory related expenses (b)
— 2,065 — 2,065 
Loss attributable to non-controlling interest(210)— — (210)
Other46 (1)— 45 
Adjusted EBITDA$51,169 $9,022 $(5,647)$54,544 
(a)$3,249 included within subscription-based revenues and $1 included within professional services and other revenues in the condensed consolidated statements of operations.
(b)Included within general and administrative expenses in the condensed consolidated statements of operations.
(c)Included within compensation and benefits in the condensed consolidated statements of operations.
(d)$3,240 included within general and administrative expenses and $911 included within compensation and benefits in the condensed consolidated statements of operations.
15

Reconciliation of Non-GAAP Financial Measures
Segment Information (continued)
(in thousands)
(unaudited) 
Nine Months Ended September 30, 2019
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenues$517,819 $142,372 $— $660,191 
Deferred revenue fair value adjustment (a)
6,670 — — 6,670 
Adjusted revenues524,489 142,372 — 666,861 
Less: Asset-based cost of revenues(178,474)— — (178,474)
Adjusted net revenues$346,015 $142,372 $— $488,387 
Revenues:
Asset-based$355,595 $— $— $355,595 
Subscription-based148,457 127,471 — 275,928 
Total recurring revenues504,052 127,471 — 631,523 
Professional services and other revenues13,767 14,901 — 28,668 
Total revenues517,819 142,372 — 660,191 
Operating expenses:
Cost of revenues:
Asset-based178,474 — — 178,474 
Subscription-based4,371 17,281 — 21,652 
Professional services and other5,012 457 — 5,469 
Total cost of revenues187,857 17,738 — 205,595 
Compensation and benefits165,610 91,913 28,067 285,590 
General and administration71,326 29,611 24,024 124,961 
Depreciation and amortization46,057 27,110 — 73,167 
Total operating expenses$470,850 $166,372 $52,091 $689,313 
Income (loss) from operations$46,969 $(24,000)$(52,091)$(29,122)
Add:
Deferred revenue fair value adjustment (a)
6,670 — — 6,670 
Accretion on contingent consideration and purchase liability (b)
1,240 — — 1,240 
Depreciation and amortization46,057 27,110 — 73,167 
Non-cash compensation expense (c)
23,586 11,799 7,856 43,241 
Restructuring charges and transaction costs (d)
1,789 1,393 21,543 24,725 
Non-income tax expense adjustment (b)
1,407 73 — 1,480 
Severance (c)
2,244 5,714 189 8,147 
Non-recurring litigation and regulator related expenses (b)
— 2,065 — 2,065 
Loss attributable to non-controlling interest31 — — 31 
Other111 — 2 113 
Adjusted EBITDA$130,104 $24,154 $(22,501)$131,757 
(a)$6,664 included within subscription-based revenues and $6 included within professional services and other revenues in the condensed consolidated statements of operations.
(b)Included within general and administrative expenses in the condensed consolidated statements of operations.
(c)Included within compensation and benefits in the condensed consolidated statements of operations.
(d)$14,071 included within general and administrative expenses and $10,654 included within compensation and benefits in the condensed consolidated statements of operations.

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Envestnet, Inc.
Historical Assets, Accounts and Advisors
(in millions, except accounts and advisors)
(unaudited)
 
As of
September 30,December 31,March 31,June 30,September 30,
20192019202020202020
(in millions, except accounts and advisors data)
Platform Assets
Assets under Management (“AUM”)
$188,739 $207,083 $185,065 $215,994 $228,905 
Assets under Administration (“AUA”)316,742 343,505 312,472 344,957 375,860 
Total AUM/A505,481 550,588 497,537 560,951 604,765 
Subscription2,947,582 3,205,281 2,875,394 3,247,400 3,498,353 
Total Platform Assets$3,453,063 $3,755,869 $3,372,931 $3,808,351 $4,103,118 
Platform Accounts
AUM934,811 935,039 970,896 1,007,386 1,018,817 
AUA1,136,430 1,193,882 1,254,856 1,252,247 1,318,730 
Total AUM/A2,071,241 2,128,921 2,225,752 2,259,633 2,337,547 
Subscription9,692,714 9,793,175 10,090,172 10,003,156 10,639,399 
Total Platform Accounts11,763,955 11,922,096 12,315,924 12,262,789 12,976,946 
Advisors
AUM/A39,735 40,563 40,971 41,206 41,450 
Subscription60,319 61,180 62,077 62,404 63,862 
Total Advisors100,054 101,743 103,048 103,610 105,312 

The following table summarizes the changes in AUM and AUA for the three months ended September 30, 2020:
6/30/2020Gross
Sales		RedemptionsNet
Flows		Market Impact9/30/2020
(in millions except account data)
AUM$215,994 $12,526 $(10,151)$2,375 $10,536 $228,905 
AUA344,957 33,944 (19,618)14,326 16,577 375,860 
Total AUM/A$560,951 $46,470 $(29,769)$16,701 $27,113 $604,765 
Fee-Based Accounts2,259,633 77,914 2,337,547 

The above AUM/A gross sales figures include $8.4 billion in new client conversions. The Company onboarded an additional $33.9 billion in subscription conversions during the three months ended September 30, 2020, bringing total conversions for the quarter to $42.3 billion.
17