Business Wire | Feb 25, 2021 04:26PM EST

Envestnet Reports Fourth Quarter 2020 Financial Results

Feb. 25, 2021

CHICAGO--(BUSINESS WIRE)--Feb. 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 Ended Year Ended

KeyFinancial December 31, % December 31, %Metrics

(in millionsexcept per 2020 2019 Change 2020 2019 Changeshare data)

GAAP:

Total $ 263.8 $ 239.9 10 % $ 998.2 $ 900.1 11 %revenues

Net income $ 7.7 $ 3.4 126 % $ (2.6 ) $ (17.2 ) (85 )%(loss)

Net income(loss) perdilutedshare $ 0.13 $ 0.07 86 % $ (0.06 ) $ (0.33 ) (82 )%attributabletoEnvestnet,Inc.



Non-GAAP:

Adjusted $ 263.9 $ 242.5 9 % $ 998.9 $ 909.4 10 %revenues^(1)

Adjusted $ 65.0 $ 61.5 6 % $ 242.9 $ 193.3 26 %EBITDA^(1)

Adjusted net $ 38.3 $ 37.1 3 % $ 141.5 $ 113.4 25 %income^(1)

Adjusted netincome per $ 0.69 $ 0.69 0 % $ 2.57 $ 2.15 20 %dilutedshare^(1)

"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.

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 1Q 2021 FY 2021Adjusted EPS

GAAP:

Revenues:

Asset-based $ 158.5 - $ 159.5

Subscription-based $ 106.5 - $ 107.5

Total recurring $ 265.0 - $ 267.0 revenues

Professionalservices and other $ 5.0 - $ 6.0 revenues

Total revenues $ 270.0 - $ 273.0 $ 1,104.7 - $ 1,119.7



Asset-based cost of $ 85.0 - $ 85.5 revenues

Total cost of $ 91.5 - $ 92.5 revenues



Net income (a) - (a) (a) - (a)



Diluted shares 65.4 65.9 outstanding

Net Income per (a) - (a) (a) - (a)diluted share



Non-GAAP:

Adjusted revenues^ (1):

Asset-based $ 158.5 - $ 159.5

Subscription-based $ 106.5 - $ 107.5

Total recurring $ 265.0 - $ 267.0 revenues

Professionalservices and other $ 5.0 - $ 6.0 revenues

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 incomeper diluted share^ $ 0.61 $ 1.95 - $ 2.08(1)



(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.

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.

"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 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.

Envestnet, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

December 31, December 31,

2020 2019

Assets

Current assets:

Cash and cash equivalents $ 384,565 $ 82,505

Fees receivable, net 80,064 67,815

Prepaid expenses and other current assets 40,570 32,183

Total current assets 505,199 182,503



Property and equipment, net 47,969 53,756

Internally developed software, net 96,501 60,263

Intangible assets, net 435,041 505,589

Goodwill 906,773 879,850

Operating lease right-of-use assets, net 105,249 82,796

Other non-current assets 47,558 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 payable 18,003 17,277

Operating lease liabilities 13,649 13,816

Contingent consideration 11,251 -

Deferred revenue 34,918 34,753

Total current liabilities 236,369 203,790



Convertible Notes 756,503 305,513

Revolving credit facility - 260,000

Contingent consideration 1,308 9,045

Deferred revenue 1,813 5,754

Non-current operating lease liabilities 112,182 88,365

Deferred tax liabilities, net 34,740 29,481

Other non-current liabilities 25,557 32,360

Total liabilities 1,168,472 934,308



Equity:

Total stockholders' equity 976,337 869,094

Non-controlling interest (519 ) (1,518 )

Total liabilities and equity $ 2,144,290 $ 1,801,884

Envestnet, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share information)

(unaudited)

Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

Revenues:

Asset-based

$

146,146

$

128,717

$

540,947

$

484,312

Subscription-based

109,080

102,885

426,507

378,813

Total recurring revenues

255,226

231,602

967,454

863,125

Professional services and other revenues

8,593

8,334

30,776

37,002

Total revenues

263,819

239,936

998,230

900,127

Operating expenses:

Cost of revenues

83,602

73,216

305,929

278,811

Compensation and benefits

98,547

97,964

398,970

383,554

General and administration

41,692

27,603

160,229

152,564

Depreciation and amortization

28,584

28,104

113,661

101,271

Total operating expenses

252,425

226,887

978,789

916,200

Income (loss) from operations

11,394

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:

Basic

53,960,769

52,574,128

53,589,232

50,937,919

Diluted

55,733,419

54,034,972

53,589,232

50,937,919

Envestnet, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share information)

(unaudited)

Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

Revenues:

Asset-based $ 146,146 $ 128,717 $ 540,947 $ 484,312

Subscription-based 109,080 102,885 426,507 378,813

Total recurring 255,226 231,602 967,454 863,125 revenues

Professionalservices and other 8,593 8,334 30,776 37,002 revenues

Total revenues 263,819 239,936 998,230 900,127



Operating expenses:

Cost of revenues 83,602 73,216 305,929 278,811

Compensation and 98,547 97,964 398,970 383,554 benefits

General and 41,692 27,603 160,229 152,564 administration

Depreciation and 28,584 28,104 113,661 101,271 amortization

Total operating 252,425 226,887 978,789 916,200 expenses



Income (loss) from 11,394 13,049 19,441 (16,073 ) operations

Other expense, net (8,940 ) (8,934 ) (27,486 ) (32,022 )

Income (loss)before income tax 2,454 4,115 (8,045 ) (48,095 ) provision(benefit)



Income taxprovision (5,240 ) 698 (5,401 ) (30,893 ) (benefit)



Net income (loss) 7,694 3,417 (2,644 ) (17,202 )

Add: Net (income)loss attributable (454 ) 173 (466 ) 420 to non-controllinginterest

Net income (loss)attributable to $ 7,240 $ 3,590 $ (3,110 ) $ (16,782 ) Envestnet, Inc.



Net income (loss)per share attributable toEnvestnet, Inc.:

Basic $ 0.13 $ 0.07 $ (0.06 ) $ (0.33 )



Diluted $ 0.13 $ 0.07 $ (0.06 ) $ (0.33 )



Weighted averagecommon shares outstanding:

Basic 53,960,769 52,574,128 53,589,232 50,937,919



Diluted 55,733,419 54,034,972 53,589,232 50,937,919

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Year Ended

December 31,

2020

2019

OPERATING ACTIVITIES:

Net loss

$

(2,644

)

$

(17,202

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

113,661

101,271

Deferred rent and lease incentive amortization

-

-

Provision for doubtful accounts

2,817

2,855

Deferred income taxes

(1,884

)

(39,630

)

Release of uncertain tax positions

(7,101

)

-

Non-cash compensation expense

59,637

60,444

Non-cash interest expense

18,515

19,246

Accretion on contingent consideration and purchase liability

1,688

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 investments

5,399

2,361

Gain on life insurance proceeds

-

(5,000

)

Impairment of right of use assets

2,661

-

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 liabilities

22,109

(811

)

Accounts payable

(187

)

(2,863

)

Deferred revenue

(4,125

)

727

Other non-current liabilities

(5,962

)

4,795

Net cash provided by operating activities

169,836

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

Other

2,897

(600

)

Net cash used in investing activities

(99,996

)

(375,708

)

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Year Ended

December 31,

2020 2019

OPERATING ACTIVITIES:

Net loss $ (2,644 ) $ (17,202 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 113,661 101,271

Deferred rent and lease incentive amortization - -

Provision for doubtful accounts 2,817 2,855

Deferred income taxes (1,884 ) (39,630 )

Release of uncertain tax positions (7,101 ) -

Non-cash compensation expense 59,637 60,444

Non-cash interest expense 18,515 19,246

Accretion on contingent consideration and purchase 1,688 1,772 liability

Payments of contingent consideration - (578 )

Fair market value adjustment to contingent (3,105 ) (8,126 ) consideration liability

Gain on acquisition of equity method investment (4,230 ) -

Loss allocation from equity method investments 5,399 2,361

Gain on life insurance proceeds - (5,000 )

Impairment of right of use assets 2,661 -

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 liabilities 22,109 (811 )

Accounts payable (187 ) (2,863 )

Deferred revenue (4,125 ) 727

Other non-current liabilities (5,962 ) 4,795

Net cash provided by operating activities 169,836 108,726



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

Other 2,897 (600 )

Net cash used in investing activities (99,996 ) (375,708 )

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows (continued)

(in thousands)

(unaudited)

Year Ended

December 31,

2020

2019

FINANCING ACTIVITIES:

Proceeds from issuance of Convertible Notes due 2025

517,500

-

Convertible Notes due 2025 issuance costs

(14,540

)

-

Payment of Convertible Notes due 2019

-

(184,751

)

Proceeds from borrowings on revolving credit facility

45,000

345,000

Payments on revolving credit facility

(305,000

)

(85,000

)

Revolving credit facility issuance costs

-

(2,103

)

Capital contribution - non-controlling interest

606

-

Payments of deferred consideration on prior acquisitions

(1,879

)

-

Payments of contingent consideration

-

(171

)

Proceeds from exercise of stock options

10,760

10,592

Taxes paid in lieu of shares issued for stock-based compensation

(19,501

)

(23,107

)

Issuance of restricted stock units

4

5

Net cash provided by financing activities

232,950

60,465

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(831

)

(399

)

INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

301,959

(206,916

)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

82,755

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:

Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows (continued)

(in thousands)

(unaudited)

Year Ended

December 31,

2020 2019

FINANCING ACTIVITIES:

Proceeds from issuance of Convertible Notes due 517,500 - 2025

Convertible Notes due 2025 issuance costs (14,540 ) -

Payment of Convertible Notes due 2019 - (184,751 )

Proceeds from borrowings on revolving credit 45,000 345,000 facility

Payments on revolving credit facility (305,000 ) (85,000 )

Revolving credit facility issuance costs - (2,103 )

Capital contribution - non-controlling interest 606 -

Payments of deferred consideration on prior (1,879 ) - acquisitions

Payments of contingent consideration - (171 )

Proceeds from exercise of stock options 10,760 10,592

Taxes paid in lieu of shares issued for (19,501 ) (23,107 ) stock-based compensation

Issuance of restricted stock units 4 5

Net cash provided by financing activities 232,950 60,465



EFFECT OF EXCHANGE RATE CHANGES ON CASH (831 ) (399 )



INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND 301,959 (206,916 ) RESTRICTED CASH



CASH, CASH EQUIVALENTS AND RESTRICTED CASH, 82,755 289,671 BEGINNING OF PERIOD



CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF $ 384,714 $ 82,755 PERIOD

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,

2020 2019

Cash and cash equivalents $ 384,565 $ 82,505

Restricted cash included in prepaid expenses and - 82 other current assets

Restricted cash included in other non-current assets 149 168

Total cash, cash equivalents and restricted cash $ 384,714 $ 82,755

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

(in thousands)

(unaudited)

Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

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 amortization

28,584

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.

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

(in thousands)

(unaudited)

Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

Total revenues $ 263,819 $ 239,936 $ 998,230 $ 900,127

Deferredrevenue fair 85 2,601 692 9,271 valueadjustment ^(a)

Adjusted $ 263,904 $ 242,537 $ 998,922 $ 909,398 revenues



Net income $ 7,694 $ 3,417 $ (2,644 ) $ (17,202 ) (loss)

Add (deduct):

Deferredrevenue fair 85 2,601 692 9,271 valueadjustment ^(a)

Interest income (262 ) (488 ) (1,112 ) (3,347 ) ^(b)

Interest 9,597 8,175 31,504 32,520 expense ^(b)

Accretion oncontingentconsideration 380 532 1,688 1,772 and purchase

liability ^(c)

Income taxprovision (5,240 ) 698 (5,401 ) (30,893 ) (benefit)

Depreciationand 28,584 28,104 113,661 101,271 amortization

Non-cashcompensation 13,916 17,203 57,113 60,444 expense ^(d)

Restructuringcharges and 4,922 1,833 19,383 26,558 transactioncosts ^(e)

Severance ^(f) 6,544 7,220 25,110 15,367

Fair marketvalueadjustment on (1,049 ) (8,126 ) (3,105 ) (8,126 ) contingentconsiderationliability ^(c)

Non-recurringlitigation andregulatory 1,796 814 7,825 2,879 relatedexpenses ^(c)

Foreign 184 (280 ) 116 (72 ) currency ^(b)

Non-income taxexpense (920 ) (1,106 ) 421 374 adjustment ^(c)

Non-recurring (1,647 ) - (5,877 ) - gains ^(b)

Loss allocationfrom equitymethod 1,119 854 5,399 2,361 investments ^(b)

(Income) lossattributable to (727 ) 79 (1,830 ) 110 non-controllinginterest

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.

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures (continued)

(in thousands, except share and per share information)

(unaudited)

Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

Net income $ 7,694 $ 3,417 $ (2,644 ) $ (17,202 ) (loss)

Income taxprovision (5,240 ) 698 (5,401 ) (30,893 ) (benefit) ^(a)

Loss beforeincome tax 2,454 4,115 (8,045 ) (48,095 ) provision(benefit)

Add (deduct):

Deferred revenuefair value 85 2,601 692 9,271 adjustment ^(b)

Accretion oncontingentconsideration 380 532 1,688 1,772 and purchase

liability ^(d)

Non-cashinterest expense 6,798 4,475 17,480 18,743 ^(c)

Non-cashcompensation 13,916 17,203 57,113 60,444 expense ^(f)

Restructuringcharges and 4,922 1,833 19,383 26,558 transactioncosts ^(e)

Severance ^(g) 6,544 7,220 25,110 15,367

Amortization ofacquiredintangibles andfair value 17,545 19,629 73,559 70,677 adjustment toproperty andequipment, net ^(h)

Fair marketvalue adjustmenton contingent (1,049 ) (8,126 ) (3,105 ) (8,126 ) considerationliability ^(d)

Non-recurringlitigation andregulatory 1,796 814 7,825 2,879 related expenses^(d)

Foreign currency 184 (280 ) 116 (72 ) ^(c)

Non-income taxexpense (920 ) (1,106 ) 421 374 adjustment ^(d)

Non-recurring (1,647 ) - (5,877 ) - gains ^(c)

Loss allocationfrom equity 1,119 854 5,399 2,361 methodinvestments ^(c)

(Income) lossattributable to (727 ) 79 (1,830 ) 110 non-controllinginterest

Adjusted netincome before 51,400 49,843 189,929 152,263 income taxeffect

Income tax (13,107 ) (12,710 ) (48,432 ) (38,827 ) effect ^(i)

Adjusted net $ 38,293 $ 37,133 $ 141,497 $ 113,436 income



Basic number ofweighted-average 53,960,769 52,574,128 53,589,232 50,937,919 sharesoutstanding

Effect of dilutive shares:

Options topurchase common 290,366 784,361 416,593 1,015,164 stock

Unvestedrestricted stock 622,702 591,657 592,033 691,740 units

Convertible 769,593 84,826 414,398 33,388 Notes

Warrants 89,989 951 58,459 -

Diluted numberofweighted-average 55,733,419 54,035,923 55,070,715 52,678,211 sharesoutstanding



Adjusted netincome per share $ 0.69 $ 0.69 $ 2.57 $ 2.15 - diluted

(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 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.

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

Segment Information

(in thousands)

(unaudited)

Three Months Ended December 31, 2020

Envestnet Envestnet Wealth Data Nonsegment Total Solutions & Analytics

Revenues $ 215,691 $ 48,128 $ - $ 263,819

Deferred revenuefair value 85 - - 85 adjustment ^(a)

Adjusted revenues $ 215,776 $ 48,128 $ - $ 263,904



Revenues:

Asset-based $ 146,146 $ - $ - $ 146,146

Subscription-based 64,294 44,786 - 109,080

Total recurring 210,440 44,786 - 255,226 revenues

Professionalservices and other 5,251 3,342 - 8,593 revenues

Total revenues 215,691 48,128 - 263,819



Operating expenses:

Cost of revenues:

Asset-based 76,969 - - 76,969

Subscription-based 1,162 5,398 - 6,560

Professional 28 45 - 73 services and other

Total cost of 78,159 5,443 - 83,602 revenues

Compensation and 62,792 27,981 7,774 98,547 benefits

General and 23,322 10,106 8,264 41,692 administration

Depreciation and 20,807 7,777 - 28,584 amortization

Total operating $ 185,080 $ 51,307 $ 16,038 $ 252,425 expenses



Income (loss) from $ 30,611 $ (3,179 ) $ (16,038 ) $ 11,394 operations

Add:

Deferred revenuefair value 85 - - 85 adjustment ^(a)

Accretion oncontingentconsideration and 343 37 - 380 purchase liability^(b)

Depreciation and 20,807 7,777 - 28,584 amortization

Non-cashcompensation 8,360 3,267 2,289 13,916 expense ^(c)

Restructuringcharges and 1,014 1,815 2,093 4,922 transaction costs^(d)

Non-income taxexpense adjustment (1,018 ) 98 - (920 ) ^(b)

Severance ^(c) 4,024 2,041 479 6,544

Fair market valueadjustment oncontingent - (1,049 ) - (1,049 ) considerationliability ^(b)

Non-recurringlitigation and - 1,796 - 1,796 regulatory relatedexpenses ^(b)

Incomeattributable to (727 ) - - (727 ) non-controllinginterest

Other 46 5 - 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.

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

Segment Information (continued)

(in thousands)

(unaudited)

Three Months Ended December 31, 2019

Envestnet Envestnet Wealth Data Nonsegment Total Solutions & Analytics

Revenues $ 191,639 $ 48,297 $ - $ 239,936

Deferred revenue fair 2,601 - - 2,601 value adjustment ^(a)

Adjusted revenues $ 194,240 $ 48,297 $ - $ 242,537



Revenues:

Asset-based $ 128,717 $ - $ - $ 128,717

Subscription-based 59,149 43,736 - 102,885

Total recurring 187,866 43,736 - 231,602 revenues

Professional services 3,773 4,561 - 8,334 and other revenues

Total revenues 191,639 48,297 - 239,936



Operating expenses:

Cost of revenues:

Asset-based 65,439 - - 65,439

Subscription-based 1,361 5,891 - 7,252

Professional services 451 74 - 525 and other

Total cost of revenues 67,251 5,965 - 73,216

Compensation and 61,960 26,149 9,855 97,964 benefits

General and 21,995 9,030 (3,422) 27,603 administration

Depreciation and 19,689 8,415 - 28,104 amortization

Total operating $ 170,895 $ 49,559 $ 6,433 $ 226,887 expenses



Income (loss) from $ 20,744 $ (1,262) $ (6,433) $ 13,049 operations

Add:

Deferred revenue fair 2,601 - - 2,601 value adjustment ^(a)

Accretion on contingentconsideration and 532 - - 532 purchase liability ^(b)

Depreciation and 19,689 8,415 - 28,104 amortization

Non-cash compensation 10,382 3,164 3,657 17,203 expense ^(c)

Restructuring chargesand transaction costs ^ 702 (758) 1,090 1,034 (d)

Non-income tax expense (907) (199) - (1,106) adjustment ^(b)

Severance ^(c) 4,071 1,498 1,651 7,220

Fair market valueadjustment oncontingent - - (8,126) (8,126) consideration liability^(b)

Non-recurringlitigation and - 814 - 814 regulatory relatedexpenses ^(b)

Loss attributable tonon-controlling 79 - - 79 interest

Other 128 - (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.

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

Segment Information (continued)

(in thousands)

(unaudited)

Year Ended December 31, 2020

Envestnet Envestnet Wealth Data Nonsegment Total Solutions & Analytics

Revenues $ 806,090 $ 192,140 $ - $ 998,230

Deferred revenue fair 692 - - 692 value adjustment ^(a)

Adjusted revenues $ 806,782 $ 192,140 $ - $ 998,922



Revenues:

Asset-based $ 540,947 $ - $ - $ 540,947

Subscription-based 248,810 177,697 - 426,507

Total recurring 789,757 177,697 - 967,454 revenues

Professional services 16,333 14,443 - 30,776 and other revenues

Total revenues 806,090 192,140 - 998,230



Operating expenses:

Cost of revenues:

Asset-based 278,569 - - 278,569

Subscription-based 4,853 22,081 - 26,934

Professional services 75 351 - 426 and other

Total cost of revenues 283,497 22,432 - 305,929

Compensation and 257,698 110,436 30,836 398,970 benefits

General and 92,680 36,268 31,281 160,229 administration

Depreciation and 80,714 32,947 - 113,661 amortization

Total operating $ 714,589 $ 202,083 $ 62,117 $ 978,789 expenses



Income (loss) from $ 91,501 $ (9,943) $ (62,117) $ 19,441 operations

Add (deduct):

Deferred revenue fair 692 - - 692 value adjustment ^(a)

Accretion oncontingentconsideration and 1,430 258 - 1,688 purchase liability ^(b)

Depreciation and 80,714 32,947 - 113,661 amortization

Non-cash compensation 35,797 14,932 8,908 59,637 expense ^(c)

Restructuring chargesand transaction costs 6,878 2,304 10,201 19,383 ^(d)

Non-income tax expense 514 (93) - 421 adjustment ^(b)

Severance ^(c) 18,617 4,628 1,865 25,110

Fair market valueadjustment oncontingent - (3,105) - (3,105) considerationliability ^(b)

Non-recurringlitigation and - 7,825 - 7,825 regulatory relatedexpenses ^(b)

Loss attributable tonon-controlling (1,830) - - (1,830) interest

Other 15 5 - 20

Adjusted EBITDA $ 234,328 $ 49,758 $ (41,143) $ 242,943

(a) 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.

Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

Segment Information (continued)

(in thousands)

(unaudited)

Year Ended December 31, 2019

Envestnet Envestnet Wealth Data Nonsegment Total Solutions & Analytics

Revenues $ 709,458 $ 190,669 $ - $ 900,127

Deferred revenuefair value 9,271 - - 9,271 adjustment ^(a)

Adjusted revenues $ 718,729 $ 190,669 $ - $ 909,398



Revenues:

Asset-based $ 484,312 $ - $ - $ 484,312

Subscription-based 207,606 171,207 - 378,813

Total recurring 691,918 171,207 - 863,125 revenues

Professionalservices and other 17,540 19,462 - 37,002 revenues

Total revenues 709,458 190,669 - 900,127



Operating expenses:

Cost of revenues:

Asset-based 243,913 - - 243,913

Subscription-based 5,732 23,172 - 28,904

Professional 5,463 531 - 5,994 services and other

Total cost of 255,108 23,703 - 278,811 revenues

Compensation and 227,570 118,062 37,922 383,554 benefits

General and 93,321 38,641 20,602 152,564 administration

Depreciation and 65,746 35,525 - 101,271 amortization

Total operating $ 641,745 $ 215,931 $ 58,524 $ 916,200 expenses



Income (loss) from $ 67,713 $ (25,262) $ (58,524) $ (16,073) operations

Add:

Deferred revenuefair value 9,271 - - 9,271 adjustment ^(a)

Accretion oncontingentconsideration and 1,772 - - 1,772 purchase liability ^(b)

Depreciation and 65,746 35,525 - 101,271 amortization

Non-cashcompensation expense 33,968 14,963 11,513 60,444 ^(c)

Restructuringcharges and 2,491 635 22,633 25,759 transaction costs ^(d)

Non-income taxexpense adjustment ^ 500 (126) - 374 (b)

Severance ^(c) 6,315 7,212 1,840 15,367

Fair market valueadjustment oncontingent - - (8,126) (8,126) considerationliability ^(b)

Non-recurringlitigation and - 2,879 - 2,879 regulatory relatedexpenses ^(b)

Loss attributable tonon-controlling 110 - - 110 interest

Other 239 - - 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.

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,

2019 2020 2020 2020 2020

(in millions except accounts and advisors data)

Platform Assets

Assets underManagement $ 207,083 $ 185,065 $ 215,994 $ 228,905 $ 263,043 ("AUM")

Assets underAdministration 343,505 312,472 344,957 375,860 405,365 ("AUA")

Total AUM/A 550,588 497,537 560,951 604,765 668,408

Subscription 3,205,281 2,875,394 3,247,400 3,498,353 3,892,814

Total Platform $ 3,755,869 $ 3,372,931 $ 3,808,351 $ 4,103,118 $ 4,561,222 Assets

Platform Accounts

AUM 935,039 970,896 1,007,386 1,018,817 1,073,122

AUA 1,193,882 1,254,856 1,252,247 1,318,730 1,276,975

Total AUM/A 2,128,921 2,225,752 2,259,633 2,337,547 2,350,097

Subscription 9,793,175 10,090,172 10,003,156 10,639,399 11,079,048

Total Platform 11,922,096 12,315,924 12,262,789 12,976,946 13,429,145 Accounts

Advisors

AUM/A 40,563 40,971 41,206 41,450 41,206

Subscription 61,180 62,077 62,404 63,862 65,104

Total Advisors 101,743 103,048 103,610 105,312 106,310

The following table summarizes the changes in AUM and AUA for the three months ended December 31, 2020:

As of Gross Net Market Reclass to As of

9/30/2020 Sales Redemptions Flows Impact Subscription 12/31/2020

(in millions except account data)

AUM $ 228,905 $ 23,762 $ (11,847 ) $ 11,915 $ 22,223 $ - $ 263,043

AUA 375,860 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 2,337,547 49,395 (36,845 ) 2,350,097 Accounts

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 of Gross Net Market Reclass to As of

12/31/2019 Sales Redemptions Flows Impact Subscription 12/31/2020

(in millions, except account data)

AUM $ 207,083 $ 74,118 $ (42,958 ) $ 31,160 $ 24,800 $ - $ 263,043

AUA 343,505 117,138 (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 2,128,921 278,863 (57,687 ) 2,350,097 Accounts

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210225006132/en/

CONTACT: Investor Relations investor.relations@envestnet.com (312) 827-3940

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