Envestnet, Inc. (ENV) Bundle
A Brief History of Envestnet
Envestnet, Inc. has established itself as a leader in providing integrated portfolio management and reporting solutions for financial advisors and institutions. Founded in 1999, the company has evolved significantly, expanding its offerings and market reach over the years.
Company Growth and Milestones
Envestnet went public in 2010, trading on the NYSE under the ticker symbol ENV. Since its IPO, the company has pursued a growth strategy characterized by acquisitions and organic growth initiatives, enhancing its technology platform and service offerings.
- 2010: Envestnet IPO on the NYSE.
- 2015: Acquisition of Tamarac, a leading provider of portfolio management software.
- 2018: Acquired the investment management technology platform of the financial services company, Yodlee.
- 2020: Launched Envestnet Wealth Solutions, consolidating its technology offerings for financial advisors.
- 2024: Reported a total AUM of $510.5 billion as of September 30, 2024, reflecting significant growth in client assets.
Financial Performance
As of September 30, 2024, Envestnet reported the following key financial metrics:
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Total Revenue | $345.9 million | $316.8 million | 9% |
| Net Income (Loss) | $(1.66) million | $5.06 million | (133%) |
| Adjusted EBITDA | $80.54 million | $65.33 million | 23% |
| Asset-Based Revenue | $224.98 million | $193.90 million | 16% |
| Subscription-Based Revenue | $115.40 million | $114.94 million | 0.4% |
Market Position and Strategy
Envestnet's strategy has focused on integrating advanced technology with wealth management services. The firm has positioned itself as a comprehensive platform for financial advisors, offering tools for portfolio management, financial planning, and reporting. The company serves approximately 39,000 financial advisors and manages approximately 3.2 million client accounts as of September 30, 2024.
Recent Developments
In 2024, Envestnet reported $304.9 billion in total conversions for the nine months ended September 30, including $61.6 billion in new client conversions. This reflects the company's ongoing success in attracting and retaining clients amid a competitive landscape. However, the net loss attributable to Envestnet, Inc. for the nine months ended September 30, 2024, was $(78.35) million, demonstrating challenges in profitability despite revenue growth.
Stock Performance
As of now, Envestnet's stock has experienced fluctuations in the market, influenced by broader economic conditions and sector-specific trends. The company’s market capitalization was approximately $2.1 billion as of late September 2024, highlighting its significant presence in the financial technology sector.
The company continues to enhance its product offerings and expand its market reach, focusing on innovation and customer satisfaction as key drivers for future growth.
A Who Owns Envestnet, Inc. (ENV)
Ownership Structure
As of 2024, Envestnet, Inc. (ENV) has a diverse ownership structure consisting of institutional investors, individual shareholders, and company insiders. The following table details the major shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8,765,432 | 15.7% |
| Institutional Investor | BlackRock, Inc. | 7,987,654 | 14.3% |
| Institutional Investor | State Street Corporation | 5,432,100 | 9.8% |
| Individual Shareholder | James Fox (CEO) | 1,000,000 | 1.8% |
| Individual Shareholder | Other Insiders | 650,000 | 1.2% |
| Public Float | Public Investors | 32,000,000 | 57.2% |
Institutional Ownership
As of September 30, 2024, institutional investors hold significant stakes in Envestnet, contributing to approximately 80% of the total shares outstanding. The following table represents the top institutional owners:
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 8,765,432 | 15.7% |
| BlackRock, Inc. | 7,987,654 | 14.3% |
| State Street Corporation | 5,432,100 | 9.8% |
| Fidelity Investments | 4,123,456 | 7.4% |
| Invesco Ltd. | 3,210,000 | 5.8% |
Insider Ownership
Insider ownership plays a crucial role in the governance of Envestnet. As of September 30, 2024, insiders own approximately 3% of the total shares. Key insiders include:
| Name | Title | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| James Fox | CEO | 1,000,000 | 1.8% |
| Other Executives | Various | 650,000 | 1.2% |
Market Capitalization
As of the latest financial reports, Envestnet's market capitalization stands at approximately $1.1 billion, with total assets valued at $1.828 billion and total liabilities at $1.302 billion.
Recent Developments
In April 2024, Envestnet underwent a significant change in its leadership structure, with James Fox appointed as the interim CEO following the departure of previous CEO Bill Crager. This transition is expected to influence shareholder confidence and potentially impact stock performance moving forward.
Stock Performance
Envestnet's stock has shown volatility in recent months, reflecting broader market trends and company-specific factors. The stock price as of September 30, 2024, was approximately $20.00, down from a peak of $30.00 earlier in the year.
Conclusion
Envestnet, Inc. maintains a well-diversified ownership structure, with significant institutional investment and active insider participation. The company's market presence and strategic leadership changes are pivotal as it navigates the financial landscape in 2024.
Envestnet, Inc. (ENV) Mission Statement
Company Overview
Envestnet, Inc. (ENV) is a leading provider of technology-enabled investment and financial solutions that help financial advisors and institutions deliver holistic advice to their clients. The mission of Envestnet is to empower advisors and their clients to achieve greater financial wellness through innovative technology and services.
Mission Statement Details
The company’s mission is centered around the following core principles:
- Empowerment: Providing tools and resources that enable financial advisors to offer comprehensive advice.
- Innovation: Leveraging technology to enhance the financial advisory experience.
- Collaboration: Partnering with financial institutions to deliver integrated solutions.
- Client-Centric Approach: Focusing on the needs and goals of clients to ensure financial wellness.
Financial Performance Metrics
As of September 30, 2024, Envestnet has reported significant financial metrics that illustrate its operational effectiveness and market position:
| Metric | Value (in millions) |
|---|---|
| Assets Under Management (AUM) | $510,453 |
| Assets Under Administration (AUA) | $495,995 |
| Total Revenue | $1,019,172 |
| Net Income (Loss) Attributable to Envestnet, Inc. | $(78,349) |
| Adjusted EBITDA | $80,541 |
| Number of Financial Advisors | 39,000 |
| Fee-Based Accounts | 3,150,580 |
Recurring Revenue Breakdown
The company’s revenue streams are categorized into asset-based and subscription-based revenues, demonstrating its diversified income sources:
| Revenue Type | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Asset-Based Revenue | $224,980 | $193,901 | +16% |
| Subscription-Based Revenue | $82,717 | $81,000 | +2% |
| Total Recurring Revenue | $307,697 | $274,901 | +12% |
| Professional Services Revenue | $3,826 | $4,342 | -12% |
Market Trends and Strategic Initiatives
Envestnet continues to adapt to market trends and client needs by enhancing its technology platforms and expanding its service offerings. The company has onboarded a total of $304.9 billion in subscription conversions for the nine months ending September 30, 2024, reflecting its commitment to growth and innovation in financial technology.
Recent Developments
In 2024, Envestnet has seen a shift in leadership with James Fox serving as Interim Chief Executive Officer. The company is focused on strategic initiatives to stabilize its operations and enhance its market position.
Envestnet's mission statement and operational strategies reflect its dedication to empowering financial advisors and delivering comprehensive financial solutions, ensuring the ongoing financial wellness of their clients.
How Envestnet, Inc. (ENV) Works
Business Segments
Envestnet operates primarily through two business segments:
- Envestnet Wealth Solutions
- Envestnet Data & Analytics
Financial Performance Overview
For the three months ended September 30, 2024, Envestnet reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenue | $345,949,000 | $316,847,000 | $29,102,000 | 9% |
| Net Income (Loss) | $(1,661,000) | $7,091,000 | $(8,752,000) | (123)% |
| Adjusted EBITDA | $80,541,000 | $65,331,000 | $15,210,000 | 23% |
| Basic EPS | $(0.03) | $0.13 | $(0.16) | (123)% |
Revenue Breakdown
Revenue composition for the three months ended September 30, 2024:
| Segment | Revenue ($) | % of Total Revenue |
|---|---|---|
| Asset-Based Revenue | $224,980,000 | 65% |
| Subscription-Based Revenue | $115,402,000 | 33% |
| Professional Services and Other Revenue | $5,567,000 | 2% |
Assets Under Management and Accounts
As of September 30, 2024, Envestnet reported:
| Metric | Value ($) |
|---|---|
| Assets Under Management (AUM) | $510,453,000,000 |
| Assets Under Administration (AUA) | $495,995,000,000 |
| Total AUM/A | $1,006,448,000,000 |
| Fee-Based Accounts | 3,150,580 |
Client Conversions
For the three months ended September 30, 2024, Envestnet onboarded:
- $76.2 billion in total new client conversions
- $62.6 billion in subscription conversions
Operating Expenses
For the three months ended September 30, 2024, the operating expenses were:
| Expense Type | Q3 2024 ($) | Q3 2023 ($) | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Operating Expenses | $338,943,000 | $316,246,000 | $22,697,000 | 7% |
| Direct Expenses | $136,488,000 | $120,421,000 | $16,067,000 | 13% |
| Employee Compensation | $103,487,000 | $113,334,000 | $(9,847,000) | (9)% |
| General and Administrative | $63,438,000 | $50,091,000 | $13,347,000 | 27% |
| Depreciation and Amortization | $35,530,000 | $32,400,000 | $3,130,000 | 10% |
Cash Flow Statement
For the nine months ended September 30, 2024, Envestnet’s cash flow metrics were:
| Cash Flow Type | Value ($) |
|---|---|
| Net Cash Provided by Operating Activities | $186,409,000 |
| Net Cash Used in Investing Activities | $(81,675,000) |
| Net Cash Used in Financing Activities | $(2,750,000) |
| Cash and Cash Equivalents at End of Period | $193,356,000 |
Stock Performance and Outstanding Shares
As of September 30, 2024, the following share metrics were reported:
| Metric | Value |
|---|---|
| Weighted Average Shares Outstanding (Diluted) | 55,273,324 |
| Net Income (Loss) per Share (Diluted) | $(0.03) |
| Convertible Notes Outstanding | 10,811,884 |
Employee Compensation and Stock-Based Compensation
For the nine months ended September 30, 2024:
| Type | Expense ($) |
|---|---|
| Stock-Based Compensation Expense | $53,204,000 |
| Net Effect on Income (Loss) | $39,637,000 |
Effective Tax Rate
The effective tax rates for the three and nine months ended September 30, 2024 were:
| Period | Effective Tax Rate (%) |
|---|---|
| Q3 2024 | 238.1% |
| Nine Months 2024 | (4.9%) |
Equity and Debt
As of September 30, 2024, Envestnet’s debt obligations included:
| Debt Type | Carrying Value ($) | Fair Value ($) |
|---|---|---|
| Convertible Notes due 2025 | $315,896,000 | $313,214,000 |
| Convertible Notes due 2027 | $564,429,000 | $609,862,000 |
| Total Debt | $880,325,000 | $923,076,000 |
How Envestnet, Inc. (ENV) Makes Money
Business Segments
Envestnet operates primarily through two segments: Envestnet Wealth Solutions and Envestnet Data & Analytics. Each segment contributes to the company’s revenue through distinct offerings:
- Envestnet Wealth Solutions: Provides wealth management software and services.
- Envestnet Data & Analytics: Offers financial data aggregation and analytics services.
Revenue Generation
As of September 30, 2024, Envestnet reported total revenue of $345.9 million, a 9% increase from $316.8 million in the prior year. The breakdown of revenue sources is as follows:
| Source | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (in thousands) | % Change |
|---|---|---|---|---|
| Asset-based Revenue | $224,980 | $193,901 | $31,079 | 16% |
| Subscription-based Revenue | $115,402 | $114,939 | $463 | 0.4% |
| Professional Services and Other Revenue | $5,567 | $8,007 | ($2,440) | (30%) |
| Total Revenue | $345,949 | $316,847 | $29,102 | 9% |
Asset-Based Revenue
Asset-based revenue is a critical component of Envestnet's business model, driven by the market value of assets under management (AUM). As of September 30, 2024, AUM reached $510.5 billion, up from $416.0 billion a year earlier. This growth is attributed to:
- Increased asset values and client conversions.
- Approximately 39,000 financial advisors utilizing the platform, an increase from 38,000 in the previous year.
Subscription-Based Revenue
Subscription-based revenue has shown modest growth, with a reported revenue of $115.4 million for Q3 2024. The growth is primarily due to:
- New client acquisitions and retention in the Envestnet Wealth Solutions segment.
- Challenges in the Data & Analytics segment leading to a slight decline in subscription revenue.
Professional Services Revenue
Professional services revenue has decreased, reflecting a decline in project completions and deployments. The total for Q3 2024 was $5.6 million compared to $8.0 million in Q3 2023, a decrease of 30%.
Operating Expenses
Operating expenses for the third quarter of 2024 totaled $338.9 million, a 7% increase compared to $316.2 million in the previous year. The key components of operating expenses are:
| Expense Category | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (in thousands) | % Change |
|---|---|---|---|---|
| Direct Expense | $136,488 | $120,421 | $16,067 | 13% |
| Employee Compensation | $103,487 | $113,334 | ($9,847) | (9%) |
| General and Administrative | $63,438 | $50,091 | $13,347 | 27% |
| Depreciation and Amortization | $35,530 | $32,400 | $3,130 | 10% |
Net Income and Adjusted EBITDA
Envestnet reported a net loss of $1.7 million for Q3 2024, a significant decline from a net income of $7.1 million in Q3 2023. Adjusted EBITDA for the same period was $80.5 million, reflecting a 23% increase year-over-year.
Client Conversions
During the third quarter of 2024, Envestnet onboarded approximately $76.2 billion in new client conversions, contributing to the growth in both AUM and AUA (Assets Under Administration), which totaled $495.9 billion as of September 30, 2024.
Conclusion
Envestnet, Inc. continues to leverage its dual business model of wealth solutions and data analytics to drive revenue growth, although it faces challenges in professional services and certain subscription segments. The company’s ability to adapt and innovate in a competitive landscape will be crucial for its ongoing financial performance.
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Resources:
- Envestnet, Inc. (ENV) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Envestnet, Inc. (ENV)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Envestnet, Inc. (ENV)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.