Exhibit 99.1

Envestnet Reports Fourth Quarter 2020 Financial Results
Envestnet Sees Large Opportunity to Enable The Intelligent Financial LifeTM

Chicago, IL — February 25, 2021 — Envestnet (NYSE: ENV), a leading provider of intelligent systems for wealth management and financial wellness, today reported financial results for its quarter and year ended December 31, 2020.
Three Months EndedYear Ended
Key Financial MetricsDecember 31,%December 31,%
(in millions except per share data)20202019Change20202019Change
GAAP:
Total revenues$263.8 $239.9 10%$998.2 $900.1 11%
Net income (loss)$7.7 $3.4 126%$(2.6)$(17.2)(85)%
Net income (loss) per diluted share attributable to Envestnet, Inc.$0.13 $0.07 86%$(0.06)$(0.33)(82)%
Non-GAAP:
Adjusted revenues(1)
$263.9 $242.5 9%$998.9 $909.4 10%
Adjusted EBITDA(1)
$65.0 $61.5 6%$242.9 $193.3 26%
Adjusted net income(1)
$38.3 $37.1 3%$141.5 $113.4 25%
Adjusted net income per diluted share(1)
$0.69 $0.69 0%$2.57 $2.15 20%
“Fourth quarter results were strong, with revenue, adjusted EBITDA and adjusted earnings per share exceeding our expectations,” said Bill Crager, Chief Executive Officer.

“We enter 2021 with an expanded strategic purpose, and a bold investment plan to capture the sizable opportunity before us, as we work to make financial wellness a reality for everyone.” concluded Mr. Crager.

Financial Results for the Fourth Quarter of 2020 Compared to the Fourth Quarter of 2019:

Total revenues increased 10% to $263.8 million for the fourth quarter of 2020 from $239.9 million for the fourth quarter of 2019. Asset-based recurring revenues increased 14% from the prior year period, and represented 55% of total revenues for the fourth quarter of 2020, compared to 54% of total revenues for the same period in 2019. Subscription-based recurring revenues increased 6% from the prior year period, and represented 41% of total revenues for the fourth quarter of 2020, compared to 43% of total revenues for the same period in 2019. Professional services and other non-recurring revenues increased 3% from the prior year period.

Total operating expenses for the fourth quarter of 2020 increased 11% to $252.4 million from $226.9 million in the prior year period. Cost of revenues increased 14% to $83.6 million for the fourth quarter of 2020 from $73.2 million for the fourth quarter of 2019. Compensation and benefits increased 1% to $98.5 million for the fourth quarter of 2020 from $98.0 million for the prior year period. Compensation and benefits were 37% of total revenues for the fourth quarter of 2020, compared to 41% in the prior year period. General and administration expenses increased 51% to $41.7 million for the fourth quarter of 2020 from $27.6 million for the prior year period. General and administration expenses were 16% of total revenues for the fourth quarter of 2020, compared to 12% in the prior year period. 




Income from operations was $11.4 million for the fourth quarter of 2020 compared to income from operations of $13.0 million for the fourth quarter of 2019. Net income attributable to Envestnet, Inc. was $7.2 million, or $0.13 per diluted share, for the fourth quarter of 2020 compared to net income of $3.6 million, or $0.07 per diluted share, for the fourth quarter of 2019.

Adjusted revenues(1) for the fourth quarter of 2020 increased 9% to $263.9 million from $242.5 million for the prior year period. Adjusted EBITDA(1) for the fourth quarter of 2020 increased 6% to $65.0 million from $61.5 million for the prior year period. Adjusted Net Income(1) for the fourth quarter of 2020 increased 3% to $38.3 million from $37.1 million for the prior year period. Adjusted Net Income per Diluted Share(1) for the fourth quarter of 2020 was $0.69, consistent with the fourth quarter of 2019.

Financial Results for the Full Year of 2020 Compared to the Full Year of 2019:

Total revenues increased 11% to $998.2 million for the year ended December 31, 2020 from $900.1 million for the year ended December 31, 2019. Asset-based recurring revenues increased 12% from the prior year period, and represented 54% of total revenues for the year ended December 31, 2020 consistent with the fourth quarter of 2019. Subscription-based revenues increased 13% from the prior year period, and represented 43% of total revenues for the year ended December 31, 2020 compared to 42% of total revenues for the same period in 2019. Professional services and other non-recurring revenues decreased 17% from the prior year period.

Total operating expenses for the year ended December 31, 2020 increased 7% to $978.8 million from $916.2 million in the prior year period. Cost of revenues increased 10% to $305.9 million for the year ended December 31, 2020 from $278.8 million for the year ended December 31, 2019. Compensation and benefits increased 4% to $399.0 million for the year ended December 31, 2020 from $383.6 million for the prior year period. Compensation and benefits were 40% of total revenues for the year ended December 31, 2020, compared to 43% in the prior year period. General and administration expenses increased 5% to $160.2 million for the year ended December 31, 2020 from $152.6 million for the prior year period. General and administration expenses were 16% of total revenues for the year ended December 31, 2020, compared to 17% in the prior year period. 

Income from operations was $19.4 million for the year ended December 31, 2020 compared to loss from operations of $16.1 million for the year ended December 31, 2019. Net loss attributable to Envestnet, Inc. was $3.1 million, or $0.06 per diluted share, for the year ended December 31, 2020 compared to net loss of $16.8 million, or $0.33 per diluted share, for the year ended December 31, 2019.

Adjusted revenues(1) for the year ended December 31, 2020 increased 10% to $998.9 million from $909.4 million for the prior year period. Adjusted EBITDA(1) for the year ended December 31, 2020 increased 26% to $242.9 million from $193.3 million for the prior year period. Adjusted Net Income(1) increased 25% for the year ended December 31, 2020 to $141.5 million from $113.4 million for the prior year period. Adjusted Net Income per Diluted Share(1) for the year ended December 31, 2020 increased 20% to $2.57 from $2.15 in the year ended December 31, 2019.

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Outlook

Envestnet provided the following outlook for the first quarter ending March 31, 2021 and full year ending December 31, 2021. This outlook is based on the market value of assets on December 31, 2020. We caution that we cannot predict the market value of our assets on any future date. See “Cautionary Statement Regarding Forward-Looking Statements.”
Highlights:
Envestnet to surpass $1 billion in revenue for the first time, expecting to grow 10.5% to 12% compared to 2020.
Accelerated investments in Financial Wellness ecosystem to drive higher long-term growth, resulting in expected Adjusted EBITDA to be slightly down from 2020.
Adjusted earnings per share negatively impacted by $0.20 in 2021 due to early adoption of new convertible debt accounting standard.

In Millions Except Adjusted EPS1Q 2021FY 2021
GAAP:
Revenues:
Asset-based$158.5-$159.5
Subscription-based$106.5-$107.5
Total recurring revenues$265.0-$267.0
Professional services and other revenues$5.0-$6.0
Total revenues$270.0-$273.0$1,104.7-$1,119.7
Asset-based cost of revenues$85.0-$85.5
Total cost of revenues$91.5-$92.5
Net income(a)-(a)(a)-(a)
Diluted shares outstanding65.465.9
Net Income per diluted share(a)-(a)(a)-(a)
Non-GAAP:
Adjusted revenues(1):
Asset-based$158.5-$159.5
Subscription-based$106.5-$107.5
Total recurring revenues$265.0-$267.0
Professional services and other revenues$5.0-$6.0
Total revenues$270.0-$273.0$1,105.0-$1,120.0
Adjusted EBITDA(1)
$63.0-$65.0$225.0-$235.0
Adjusted net income per diluted share(1)
$0.61$1.95-$2.08
(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 fourth 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 106,000 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 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 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 revenues has limitations as a financial measure, should be considered as supplemental in nature and are not meant as a substitute for revenues prepared in accordance with GAAP.

“Adjusted EBITDA” represents net income (loss) 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, non-recurring gains, 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, non-recurring gains, 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 share” represents adjusted net income attributable to common stockholders divided by the diluted number of weighted‑average shares outstanding.

See reconciliation of Non-GAAP Financial Measures on pages 11-17 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 (loss) or net income (loss) 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 first quarter and full year of 2021, 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 the global economy and capital markets, as well as our products, clients, vendors and employees, and our results of operations, the full extent of which may be unknown; the concentration 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 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 internet services 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 condition 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
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shares of preferred stock or convertible securities on our existing stockholders; general economic conditions, 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 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 February 25, 2021 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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Envestnet, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31,December 31,
20202019
Assets
Current assets:
Cash and cash equivalents$384,565 $82,505 
Fees receivable, net80,064 67,815 
Prepaid expenses and other current assets40,570 32,183 
Total current assets505,199 182,503 
Property and equipment, net47,969 53,756 
Internally developed software, net96,501 60,263 
Intangible assets, net435,041 505,589 
Goodwill906,773 879,850 
Operating lease right-of-use assets, net105,249 82,796 
Other non-current assets47,558 37,127 
Total assets$2,144,290 $1,801,884 
Liabilities and Equity
Current liabilities:
Accrued expenses and other liabilities$158,548 $137,944 
Accounts payable18,003 17,277 
Operating lease liabilities13,649 13,816 
Contingent consideration11,251 — 
Deferred revenue34,918 34,753 
Total current liabilities236,369 203,790 
Convertible Notes756,503 305,513 
Revolving credit facility— 260,000 
Contingent consideration1,308 9,045 
Deferred revenue1,813 5,754 
Non-current operating lease liabilities112,182 88,365 
Deferred tax liabilities, net34,740 29,481 
Other non-current liabilities25,557 32,360 
Total liabilities1,168,472 934,308 
Equity:
Total stockholders’ equity976,337 869,094 
Non-controlling interest(519)(1,518)
Total liabilities and equity$2,144,290 $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 EndedYear Ended
December 31,December 31,
2020201920202019
Revenues:
Asset-based$146,146 $128,717 $540,947 $484,312 
Subscription-based109,080 102,885 426,507 378,813 
Total recurring revenues255,226 231,602 967,454 863,125 
Professional services and other revenues8,593 8,334 30,776 37,002 
Total revenues263,819 239,936 998,230 900,127 
Operating expenses:
Cost of revenues83,602 73,216 305,929 278,811 
Compensation and benefits98,547 97,964 398,970 383,554 
General and administration41,692 27,603 160,229 152,564 
Depreciation and amortization28,584 28,104 113,661 101,271 
Total operating expenses252,425 226,887 978,789 916,200 
Income (loss) from operations11,394 13,049 19,441 (16,073)
Other expense, net(8,940)(8,934)(27,486)(32,022)
Income (loss) before income tax provision (benefit)2,454 4,115 (8,045)(48,095)
Income tax provision (benefit)(5,240)698 (5,401)(30,893)
Net income (loss)7,694 3,417 (2,644)(17,202)
Add: Net (income) loss attributable to non-controlling interest(454)173 (466)420 
Net income (loss) attributable to Envestnet, Inc.$7,240 $3,590 $(3,110)$(16,782)
Net income (loss) per share attributable to Envestnet, Inc.:
Basic$0.13 $0.07 $(0.06)$(0.33)
Diluted$0.13 $0.07 $(0.06)$(0.33)
Weighted average common shares outstanding:
Basic53,960,769 52,574,128 53,589,232 50,937,919 
Diluted55,733,419 54,034,972 53,589,232 50,937,919 
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Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Year Ended
December 31,
20202019
OPERATING ACTIVITIES:
Net loss$(2,644)$(17,202)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization113,661 101,271 
Deferred rent and lease incentive amortization— — 
Provision for doubtful accounts2,817 2,855 
Deferred income taxes(1,884)(39,630)
Release of uncertain tax positions(7,101)— 
Non-cash compensation expense59,637 60,444 
Non-cash interest expense18,515 19,246 
Accretion on contingent consideration and purchase liability1,688 1,772 
Payments of contingent consideration— (578)
Fair market value adjustment to contingent consideration liability(3,105)(8,126)
Gain on acquisition of equity method investment(4,230)— 
Loss allocation from equity method investments5,399 2,361 
Gain on life insurance proceeds— (5,000)
Impairment of right of use assets2,661 — 
Other(729)— 
Changes in operating assets and liabilities, net of acquisitions:
Fees receivable, net(15,055)1,139 
Prepaid expenses and other current assets(9,666)(6,440)
Other non-current assets(1,963)(5,234)
Accrued expenses and other liabilities22,109 (811)
Accounts payable(187)(2,863)
Deferred revenue(4,125)727 
Other non-current liabilities(5,962)4,795 
Net cash provided by operating activities169,836 108,726 
INVESTING ACTIVITIES:
Purchases of property and equipment(12,088)(19,847)
Capitalization of internally developed software(54,908)(34,096)
Investments in private companies(15,640)(5,250)
Acquisitions of businesses, net of cash acquired(20,257)(320,915)
Proceeds from life insurance policy— 5,000 
Other2,897 (600)
Net cash used in investing activities(99,996)(375,708)

-continued-

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

Year Ended
December 31,
20202019
FINANCING ACTIVITIES:
Proceeds from issuance of Convertible Notes due 2025517,500 — 
Convertible Notes due 2025 issuance costs(14,540)— 
Payment of Convertible Notes due 2019— (184,751)
Proceeds from borrowings on revolving credit facility45,000 345,000 
Payments on revolving credit facility(305,000)(85,000)
Revolving credit facility issuance costs— (2,103)
Capital contribution - non-controlling interest606 — 
Payments of deferred consideration on prior acquisitions(1,879)— 
Payments of contingent consideration— (171)
Proceeds from exercise of stock options10,760 10,592 
Taxes paid in lieu of shares issued for stock-based compensation(19,501)(23,107)
Issuance of restricted stock units
Net cash provided by financing activities232,950 60,465 
EFFECT OF EXCHANGE RATE CHANGES ON CASH(831)(399)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH301,959 (206,916)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD82,755 289,671 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD$384,714 $82,755 

The following table reconciles cash, cash equivalents and restricted cash from the consolidated balance sheets to amounts reported in the consolidated statements of cash flows:
December 31,
20202019
Cash and cash equivalents$384,565 $82,505 
Restricted cash included in prepaid expenses and other current assets— 82 
Restricted cash included in other non-current assets149 168 
Total cash, cash equivalents and restricted cash$384,714 $82,755 
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Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands)
(unaudited)
Three Months EndedYear Ended
December 31,December 31,
2020201920202019
Total revenues$263,819 $239,936 $998,230 $900,127 
Deferred revenue fair value adjustment (a)
85 2,601 692 9,271 
Adjusted revenues$263,904 $242,537 $998,922 $909,398 
Net income (loss)$7,694 $3,417 $(2,644)$(17,202)
Add (deduct):
Deferred revenue fair value adjustment (a)
85 2,601 692 9,271 
Interest income (b)
(262)(488)(1,112)(3,347)
Interest expense (b)
9,597 8,175 31,504 32,520 
Accretion on contingent consideration and purchase
liability (c)
380 532 1,688 1,772 
Income tax provision (benefit)(5,240)698 (5,401)(30,893)
Depreciation and amortization28,584 28,104 113,661 101,271 
Non-cash compensation expense (d)
13,916 17,203 57,113 60,444 
Restructuring charges and transaction costs (e)
4,922 1,833 19,383 26,558 
Severance (f)
6,544 7,220 25,110 15,367 
Fair market value adjustment on contingent consideration liability (c)
(1,049)(8,126)(3,105)(8,126)
Non-recurring litigation and regulatory related expenses (c)
1,796 814 7,825 2,879 
Foreign currency (b)
184 (280)116 (72)
Non-income tax expense adjustment (c)
(920)(1,106)421 374 
Non-recurring gains (b)
(1,647)— (5,877)— 
Loss allocation from equity method investments (b)
1,119 854 5,399 2,361 
(Income) loss attributable to non-controlling interest(727)79 (1,830)110 
Adjusted EBITDA$64,976 $61,530 $242,943 $193,287 
(a)For the three months ended December 31, 2020 and 2019, $85 and $2,599, respectively, were included within subscription-based revenues in the condensed consolidated statements of operations. For the years ended December 31, 2020 and 2019, $690 and $9,263, respectively, were included within subscription-based revenues 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 administration expenses in the condensed consolidated statements of operations.
(d)For the three months ended December 31, 2020, the entire amount was included in compensation and benefits in the condensed consolidated statements of operations. For the year ended December 31, 2020, $59,637 was included in compensation and benefits and a fair value adjustment of $(2,524) was included in other expense, net in the condensed consolidated statements of operations. For the three months and year ended December 31, 2019, the entire amount was included in compensation and benefits in the condensed consolidated statements of operations.
(e)For the three months ended December 31, 2020 and 2019, $4,121 and $(1,334), respectively, were included within general and administration expenses in the condensed consolidated statements of operations. For the three months ended December 31, 2020 and 2019, $833 and $689, respectively, were included within compensation and benefits in the condensed consolidated statements of operations. For the year ended December 31, 2020 and 2019, $15,606 and $14,415, respectively, were included within general and administration expenses in the condensed consolidated statements of operations. For the year ended December 31, 2020 and 2019, $3,597 and $11,343, respectively, were included within compensation and benefits 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 (continued)
(in thousands, except share and per share information)
(unaudited)
Three Months EndedYear Ended
December 31,December 31,
2020201920202019
Net income (loss)$7,694 $3,417 $(2,644)$(17,202)
Income tax provision (benefit) (a)
(5,240)698 (5,401)(30,893)
Loss before income tax provision (benefit)2,454 4,115 (8,045)(48,095)
Add (deduct):
Deferred revenue fair value adjustment (b)
85 2,601 692 9,271 
Accretion on contingent consideration and purchase
liability (d)
380 532 1,688 1,772 
Non-cash interest expense (c)
6,798 4,475 17,480 18,743 
Non-cash compensation expense (f)
13,916 17,203 57,113 60,444 
Restructuring charges and transaction costs (e)
4,922 1,833 19,383 26,558 
Severance (g)
6,544 7,220 25,110 15,367 
Amortization of acquired intangibles and fair value adjustment to property and equipment, net (h)
17,545 19,629 73,559 70,677 
Fair market value adjustment on contingent consideration liability (d)
(1,049)(8,126)(3,105)(8,126)
Non-recurring litigation and regulatory related expenses (d)
1,796 814 7,825 2,879 
Foreign currency (c)
184 (280)116 (72)
Non-income tax expense adjustment (d)
(920)(1,106)421 374 
Non-recurring gains (c)
(1,647)— (5,877)— 
Loss allocation from equity method investments (c)
1,119 854 5,399 2,361 
(Income) loss attributable to non-controlling interest(727)79 (1,830)110 
Adjusted net income before income tax effect51,400 49,843 189,929 152,263 
Income tax effect (i)
(13,107)(12,710)(48,432)(38,827)
Adjusted net income$38,293 $37,133 $141,497 $113,436 
Basic number of weighted-average shares outstanding53,960,769 52,574,128 53,589,232 50,937,919 
Effect of dilutive shares:
Options to purchase common stock290,366 784,361 416,593 1,015,164 
Unvested restricted stock units622,702 591,657 592,033 691,740 
Convertible Notes769,593 84,826 414,398 33,388 
Warrants89,989 951 58,459 — 
Diluted number of weighted-average shares outstanding55,733,419 54,035,923 55,070,715 52,678,211 
Adjusted net income per share - diluted$0.69 $0.69 $2.57 $2.15 
(a)For the three months ended December 31, 2020 and 2019, the effective tax rate computed in accordance with GAAP equaled (213.5)% and 17.0%, respectively. For the year ended December 31, 2020 and 2019, the effective tax rate computed in accordance with GAAP equaled 67.1% and 64.2%, respectively.
(b)For the three months ended December 31, 2020 and 2019, $85 and $2,599, respectively, were included within subscription-based revenues, in the condensed consolidated statements of operations. For the year ended December 31, 2020 and 2019, $690 and $9,263, respectively, were included within subscription-based revenues 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 administration expenses in the condensed consolidated statements of operations.
(e)For the three months ended December 31, 2020 and 2019, $4,121 and $345, respectively, were included within general and administration expenses in the condensed consolidated statements of operations. For the three months ended December 31, 2020 and 2019, $833 and $689, respectively, were included within compensation and benefits in the condensed consolidated statements of operations. For the year ended December 31, 2020 and 2019, $15,606 and $14,416, respectively, were included within general and administration expenses in the condensed consolidated statements of operations. For the year ended December 31, 2020 and 2019, $3,597 and $11,343, respectively, were included within compensation and benefits in the condensed consolidated statements
12


of operations. The remaining amounts for the 2020 periods were included within other expense, net in the condensed consolidated statements of operations.
(f)For the three months ended December 31, 2020, the entire amount was included in compensation and benefits in the condensed consolidated statements of operations. For the year ended December 31, 2020, $59,637 included in compensation and benefits and a fair value adjustment of $(2,524) was included in other expense, net, in the condensed consolidated statements of operations. For the three months and year ended December 31, 2019, the entire amount was 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 months and year ended December 31, 2020 and 2019.



13


Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
Segment Information
(in thousands)
(unaudited)
Three Months Ended December 31, 2020
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenues$215,691 $48,128 $— $263,819 
Deferred revenue fair value adjustment (a)
85 — — 85 
Adjusted revenues$215,776 $48,128 $— $263,904 
Revenues:
Asset-based$146,146 $— $— $146,146 
Subscription-based64,294 44,786 — 109,080 
Total recurring revenues210,440 44,786 — 255,226 
Professional services and other revenues5,251 3,342 — 8,593 
Total revenues215,691 48,128 — 263,819 
Operating expenses:
Cost of revenues:
Asset-based76,969 — — 76,969 
Subscription-based1,162 5,398 — 6,560 
Professional services and other28 45 — 73 
Total cost of revenues78,159 5,443 — 83,602 
Compensation and benefits62,792 27,981 7,774 98,547 
General and administration23,322 10,106 8,264 41,692 
Depreciation and amortization20,807 7,777 — 28,584 
Total operating expenses$185,080 $51,307 $16,038 $252,425 
Income (loss) from operations$30,611 $(3,179)$(16,038)$11,394 
Add:
Deferred revenue fair value adjustment (a)
85 — — 85 
Accretion on contingent consideration and purchase liability (b)
343 37 — 380 
Depreciation and amortization20,807 7,777 — 28,584 
Non-cash compensation expense (c)
8,360 3,267 2,289 13,916 
Restructuring charges and transaction costs (d)
1,014 1,815 2,093 4,922 
Non-income tax expense adjustment (b)
(1,018)98 — (920)
Severance (c)
4,024 2,041 479 6,544 
Fair market value adjustment on contingent consideration liability (b)
— (1,049)— (1,049)
Non-recurring litigation and regulatory related expenses (b)
— 1,796 — 1,796 
Income attributable to non-controlling interest(727)— — (727)
Other46 — 51 
Adjusted EBITDA$63,545 $12,608 $(11,177)$64,976 
(a)Included within subscription-based revenues in the condensed consolidated statements of operations.
(b)Included within general and administration expenses in the condensed consolidated statements of operations.
(c)Included within compensation and benefits in the condensed consolidated statements of operations.
(d)$4,121 included within general and administration expenses, $833 included within compensation and benefits and $(32) included within other expense, net in the condensed consolidated statements of operations.

14


Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
Segment Information (continued)
(in thousands)
(unaudited) 
Three Months Ended December 31, 2019
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenues$191,639 $48,297 $— $239,936 
Deferred revenue fair value adjustment (a)
2,601 — — 2,601 
Adjusted revenues$194,240 $48,297 $— $242,537 
Revenues:
Asset-based$128,717 $— $— $128,717 
Subscription-based59,149 43,736 — 102,885 
Total recurring revenues187,866 43,736 — 231,602 
Professional services and other revenues3,773 4,561 — 8,334 
Total revenues191,639 48,297 — 239,936 
Operating expenses:
Cost of revenues:
Asset-based65,439 — — 65,439 
Subscription-based1,361 5,891 — 7,252 
Professional services and other451 74 — 525 
Total cost of revenues67,251 5,965 — 73,216 
Compensation and benefits61,960 26,149 9,855 97,964 
General and administration21,995 9,030 (3,422)27,603 
Depreciation and amortization19,689 8,415 — 28,104 
Total operating expenses$170,895 $49,559 $6,433 $226,887 
Income (loss) from operations$20,744 $(1,262)$(6,433)$13,049 
Add:
Deferred revenue fair value adjustment (a)
2,601 — — 2,601 
Accretion on contingent consideration and purchase liability (b)
532 — — 532 
Depreciation and amortization19,689 8,415 — 28,104 
Non-cash compensation expense (c)
10,382 3,164 3,657 17,203 
Restructuring charges and transaction costs (d)
702 (758)1,090 1,034 
Non-income tax expense adjustment (b)
(907)(199)— (1,106)
Severance (c)
4,071 1,498 1,651 7,220 
Fair market value adjustment on contingent consideration liability (b)
— — (8,126)(8,126)
Non-recurring litigation and regulatory related expenses (b)
— 814 — 814 
Loss attributable to non-controlling interest79 — — 79 
Other128 — (2)126 
Adjusted EBITDA$58,021 $11,672 $(8,163)$61,530 
(a)$2,599 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 administration expenses in the condensed consolidated statements of operations.
(c)Included within compensation and benefits in the condensed consolidated statements of operations.
(d)$345 included within general and administration expenses and $689 included within compensation and benefits in the condensed consolidated statements of operations.
15


Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
Segment Information (continued)
(in thousands)
(unaudited)
Year Ended December 31, 2020
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenues$806,090 $192,140 $— $998,230 
Deferred revenue fair value adjustment (a)
692 — — 692 
Adjusted revenues$806,782 $192,140 $— $998,922 
Revenues:
Asset-based$540,947 $— $— $540,947 
Subscription-based248,810 177,697 — 426,507 
Total recurring revenues789,757 177,697 — 967,454 
Professional services and other revenues16,333 14,443 — 30,776 
Total revenues806,090 192,140 — 998,230 
Operating expenses:
Cost of revenues:
Asset-based278,569 — — 278,569 
Subscription-based4,853 22,081 — 26,934 
Professional services and other75 351 — 426 
Total cost of revenues283,497 22,432 — 305,929 
Compensation and benefits257,698 110,436 30,836 398,970 
General and administration92,680 36,268 31,281 160,229 
Depreciation and amortization80,714 32,947 — 113,661 
Total operating expenses$714,589 $202,083 $62,117 $978,789 
Income (loss) from operations$91,501 $(9,943)$(62,117)$19,441 
Add (deduct):
Deferred revenue fair value adjustment (a)
692 — — 692 
Accretion on contingent consideration and purchase liability (b)
1,430 258 — 1,688 
Depreciation and amortization80,714 32,947 — 113,661 
Non-cash compensation expense (c)
35,797 14,932 8,908 59,637 
Restructuring charges and transaction costs (d)
6,878 2,304 10,201 19,383 
Non-income tax expense adjustment (b)
514 (93)— 421 
Severance (c)
18,617 4,628 1,865 25,110 
Fair market value adjustment on contingent consideration liability (b)
— (3,105)— (3,105)
Non-recurring litigation and regulatory related expenses (b)
— 7,825 — 7,825 
Loss attributable to non-controlling interest(1,830)— — (1,830)
Other 15 — 20 
Adjusted EBITDA$234,328 $49,758 $(41,143)$242,943 
(a)$690 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 administration expenses in the condensed consolidated statements of operations.
(c)Included within compensation and benefits in the condensed consolidated statements of operations.
(d)$15,606 included within general and administration expenses, $3,597 included within compensation and benefits and $180 included within other expense, net in the condensed consolidated statements of operations.
16


Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
Segment Information (continued)
(in thousands)
(unaudited) 
Year Ended December 31, 2019
Envestnet Wealth SolutionsEnvestnet Data & AnalyticsNonsegmentTotal
Revenues$709,458 $190,669 $— $900,127 
Deferred revenue fair value adjustment (a)
9,271 — — 9,271 
Adjusted revenues$718,729 $190,669 $— $909,398 
Revenues:
Asset-based$484,312 $— $— $484,312 
Subscription-based207,606 171,207 — 378,813 
Total recurring revenues691,918 171,207 — 863,125 
Professional services and other revenues17,540 19,462 — 37,002 
Total revenues709,458 190,669 — 900,127 
Operating expenses:
Cost of revenues:
Asset-based243,913 — — 243,913 
Subscription-based5,732 23,172 — 28,904 
Professional services and other5,463 531 — 5,994 
Total cost of revenues255,108 23,703 — 278,811 
Compensation and benefits227,570 118,062 37,922 383,554 
General and administration93,321 38,641 20,602 152,564 
Depreciation and amortization65,746 35,525 — 101,271 
Total operating expenses$641,745 $215,931 $58,524 $916,200 
Income (loss) from operations$67,713 $(25,262)$(58,524)$(16,073)
Add:
Deferred revenue fair value adjustment (a)
9,271 — — 9,271 
Accretion on contingent consideration and purchase liability (b)
1,772 — — 1,772 
Depreciation and amortization65,746 35,525 — 101,271 
Non-cash compensation expense (c)
33,968 14,963 11,513 60,444 
Restructuring charges and transaction costs (d)
2,491 635 22,633 25,759 
Non-income tax expense adjustment (b)
500 (126)— 374 
Severance (c)
6,315 7,212 1,840 15,367 
Fair market value adjustment on contingent consideration liability (b)
— — (8,126)(8,126)
Non-recurring litigation and regulatory related expenses (b)
— 2,879 — 2,879 
Loss attributable to non-controlling interest110 — — 110 
Other239 — — 239 
Adjusted EBITDA$188,125 $35,826 $(30,664)$193,287 
(a)$9,263 included within subscription-based revenues and $8 included within professional services and other revenues in the condensed consolidated statements of operations.
(b)Included within general and administration expenses in the condensed consolidated statements of operations.
(c)Included within compensation and benefits in the condensed consolidated statements of operations.
(d)$14,416 included within general and administration expenses and $11,343 included within compensation and benefits in the condensed consolidated statements of operations.
17


Envestnet, Inc.
Historical Assets, Accounts and Advisors
(in millions, except accounts and advisors)
(unaudited)
As of
December 31,March 31,June 30,September 30,December 31,
20192020202020202020
(in millions except accounts and advisors data)
Platform Assets
Assets under Management ("AUM")$207,083 $185,065 $215,994 $228,905 $263,043 
Assets under Administration ("AUA")343,505 312,472 344,957 375,860 405,365 
Total AUM/A550,588 497,537 560,951 604,765 668,408 
Subscription3,205,281 2,875,394 3,247,400 3,498,353 3,892,814 
Total Platform Assets$3,755,869 $3,372,931 $3,808,351 $4,103,118 $4,561,222 
Platform Accounts   
AUM935,039 970,896 1,007,386 1,018,817 1,073,122 
AUA1,193,882 1,254,856 1,252,247 1,318,730 1,276,975 
Total AUM/A2,128,921 2,225,752 2,259,633 2,337,547 2,350,097 
Subscription9,793,175 10,090,172 10,003,156 10,639,399 11,079,048 
Total Platform Accounts11,922,096 12,315,924 12,262,789 12,976,946 13,429,145 
Advisors   
AUM/A40,563 40,971 41,206 41,450 41,206 
Subscription61,180 62,077 62,404 63,862 65,104 
Total Advisors101,743 103,048 103,610 105,312 106,310 

The following table summarizes the changes in AUM and AUA for the three months ended December 31, 2020:
As ofGrossNetMarketReclass toAs of
9/30/2020SalesRedemptionsFlowsImpactSubscription12/31/2020
(in millions except account data)
AUM$228,905 $23,762 $(11,847)$11,915 $22,223 $— $263,043 
AUA375,860 26,735 (22,808)3,927 34,635 (9,057)405,365 
Total AUM/A$604,765 $50,497 $(34,655)$15,842 $56,858 $(9,057)$668,408 
Fee-Based Accounts2,337,547 49,395 (36,845)2,350,097 

The above AUM/A gross sales figures include $8.5 billion in new client conversions. We onboarded an additional $36.6 billion in subscription conversions during the fourth quarter, bringing total conversions for the quarter to $45.1 billion.

The following table summarizes the changes in AUM and AUA for the year ended December 31, 2020:
As ofGrossNetMarketReclass toAs of
12/31/2019SalesRedemptionsFlowsImpactSubscription12/31/2020
(in millions, except account data)
AUM$207,083 $74,118 $(42,958)$31,160 $24,800 $— $263,043 
AUA343,505 117,138 (84,328)32,810 40,052 (11,002)405,365 
Total AUM/A$550,588 $191,256 $(127,286)$63,970 $64,852 $(11,002)$668,408 
Fee-Based Accounts2,128,921 278,863 (57,687)2,350,097 

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The above AUM/A gross sales figures include $38.6 billion in new client conversions. We onboarded an additional $119.6 billion in subscription conversions during 2020, bringing total conversions for the year to $158.2 billion.

Asset and account figures in the “Reclass to Subscription” column for the three months and year ended December 31, 2020 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.
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