env-20200806

0001337619false00013376192020-08-062020-08-06

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: August 6, 2020

Date of Earliest Event Reported: August 6, 2020

(Exact name of registrant as specified in its charter)

Delaware

001-34835

20-1409613

(State or Other Jurisdiction
of Incorporation)

(Commission
File Number)

(I.R.S. Employer
Identification Number)

35 East Wacker Drive, Suite 2400

Chicago,

Illinois

60601

(Address of principal executive offices)

(Zip Code)

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of exchange on which registered

Common Stock, par value 00013376192020-08-062020-08-06

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: August 6, 2020

Date of Earliest Event Reported: August 6, 2020

ENVESTNET, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-34835

20-1409613

(State or Other Jurisdiction
of Incorporation)

(Commission
File Number)

(I.R.S. Employer
Identification Number)

35 East Wacker Drive, Suite 2400

Chicago,

Illinois

60601

(Address of principal executive offices)

(Zip Code)

(312) 827-2800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of exchange on which registered
Common Stock, par value $0.005 per share	ENV	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨


Item 2.02.			Results of Operations and Financial Condition

On August 6, 2020, Envestnet, Inc. (“Envestnet”) issued a press release regarding Envestnet’s financial results for its second quarter ended June 30, 2020 and its second quarter 2020 supplemental presentation. The full text of Envestnet’s press release and supplemental presentation are furnished herewith as Exhibit 99.1 and Exhibit 99.2, respectively.

The information in this Item 2.02 and the attached exhibits are being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing of Envestnet under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.


Item 9.01.			Financial Statements and Exhibits

(d) Exhibits


Exhibit No.						Description
99.1						Press Release dated August 6, 2020
99.2						Second Quarter 2020 Supplemental Presentation

EXHIBIT INDEX


Exhibit No.						Description
99.1						Press Release dated August 6, 2020
99.2						Second Quarter 2020 Supplemental Presentation
104						Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 6, 2020


ENVESTNET, INC.

By:			/s/ Peter H. D’Arrigo
Name:			Peter H. D’Arrigo
Title:			Chief Financial Officer

ENV

New York Stock Exchange

Emerging growth company ☐


Item 2.02.			Results of Operations and Financial Condition


Item 9.01.			Financial Statements and Exhibits


Exhibit No.						Description
99.1						Press Release dated August 6, 2020
99.2						Second Quarter 2020 Supplemental Presentation


Exhibit No.						Description
99.1						Press Release dated August 6, 2020
99.2						Second Quarter 2020 Supplemental Presentation
104						Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 6, 2020


ENVESTNET, INC.

By:			/s/ Peter H. D’Arrigo
Name:			Peter H. D’Arrigo
Title:			Chief Financial Officer

Envestnet Reports Second Quarter 2020 Financial Results

Chicago, IL — August 6, 2020 — Envestnet (NYSE: ENV), a leading provider of intelligent systems for wealth management and financial wellness, today reported financial results for the three and six months ended June 30, 2020.


	Three months ended							Six months ended
Key Financial Metrics	June 30,					%		June 30,			%
(in millions except per share data)	2020		2019		Change	2020		2019		Change
GAAP:
Total revenues	$	235.3	$	224.4	5%	$	481.9	$	424.1	14%
Net income (loss)	$	(5.5)	$	0.6	n/m	$	(12.7)	$	(17.7)	(28)%
Net income (loss) per diluted share attributable to Envestnet, Inc.	$	(0.09)	$	0.02	n/m	$	(0.23)	$	(0.35)	(34)%

Non-GAAP:
Adjusted revenues⁽¹⁾	$	235.4	$	227.9	3%	$	482.4	$	427.5	13%
Adjusted net revenues⁽¹⁾	$	173.5	$	167.6	4%	$	351.9	$	313.4	12%
Adjusted EBITDA⁽¹⁾	$	55.8	$	43.2	29%	$	110.4	$	77.2	43%
Adjusted net income⁽¹⁾	$	31.8	$	24.5	30%	$	63.0	$	43.9	44%
Adjusted net income per diluted share⁽¹⁾	$	0.59	$	0.46	28%	$	1.16	$	0.85	36%

n/m - not meaningful

“Envestnet continues to execute, delivering strong second quarter results, supporting our clients during these challenging times, and focusing on our strategic roadmap,” said Bill Crager, Chief Executive Officer.

“We are on our way to establishing the ecosystem that can make financial wellness a reality for everyone. A new standard for personal financial services is emerging, and we are helping to drive it,” concluded Mr. Crager.

Financial Results for the Second Quarter of 2020

Asset-based recurring revenues increased 2% from the second quarter of 2019, and represented 52% of total revenues for the second quarter of 2020 compared to 53% for the second quarter 2019. Subscription-based recurring revenues increased 14% from the second quarter of 2019, and represented 45% of total revenues for the second quarter of 2020 compared to 41% for the second quarter 2019. Professional services and other non-recurring revenues decreased 33% from the prior year period. Total revenues increased 5% to $235.3 million for the second quarter of 2020 from $224.4 million for the second quarter of 2019.

Total operating expenses for the second quarter of 2020 decreased 5% to $231.3 million from $244.7 million in the prior year period. Cost of revenues decreased 4% to $68.8 million for the second quarter of 2020 from $72.1 million for the prior year period. Compensation and benefits decreased 7% to $95.6 million for the second quarter of 2020 from $103.3 million for the prior year period. Compensation and benefits were 41% of total revenues for the second quarter of 2020, compared to 46% in the prior year period. General and administration expenses decreased 9% to $38.4 million for the second quarter of 2020 from $42.4 million for the prior year period. General and administrative expenses were 16% of total revenues for the second quarter of 2020, compared to 19% in the prior year period.

Income from operations was $4.0 million for the second quarter of 2020 compared to loss of $20.3 million for the second quarter of 2019. Net loss was $5.5 million for the second quarter of 2020 compared to net income of $0.6 million for the second quarter of 2019. Net loss per diluted share attributable to Envestnet, Inc. was $0.09 for the

second quarter of 2020 compared to net income per diluted share attributable to Envestnet, Inc. of $0.02 for the second quarter of 2019.

Adjusted revenues⁽¹⁾ for the second quarter of 2020 increased 3% to $235.4 million from $227.9 million for the prior year period. Adjusted net revenues⁽¹⁾ for the second quarter of 2020 increased 4% to $173.5 million from $167.6 million for the prior year period. Adjusted EBITDA⁽¹⁾ for the second quarter of 2020 increased 29% to $55.8 million from $43.2 million for the prior year period. Adjusted net income⁽¹⁾ increased 30% for the second quarter of 2020 to $31.8 million from $24.5 million for the prior year period. Adjusted net income per diluted share⁽¹⁾ for the second quarter of 2020 increased 28% to $0.59 for the second quarter of 2020 from $0.46 in the second quarter of 2019.

Balance Sheet and Liquidity

As of June 30, 2020, the Company had $92.2 million in cash and cash equivalents and $620.0 million in outstanding debt. The outstanding debt as of June 30, 2020 included $275.0 million in borrowings under the Company's $500.0 million revolving credit facility and $345.0 million in convertible notes maturing in 2023.

The Company provided the following outlook for the third quarter ending September 30, 2020 and full year ending December 31, 2020. This outlook is based on the market value of assets on September 30, 2020. We caution that we cannot predict the market value of our assets on any future date and, in particular, in light of recent market volatility. See “Cautionary Statement Regarding Forward-Looking Statements.”


In Millions Except Adjusted EPS	3Q 2020									FY 2020
GAAP:
Revenues:
Asset-based	$	134.0	-		$	134.5
Subscription-based	104.5		-		105.0
Total recurring revenues	$	238.5	-		$	239.5
Professional services and other revenues	6.0		-		6.5
Total revenues	$	244.5	-		$	246.0	$	976.3	-	$	979.3

Asset-based cost of revenues	$	69.5	-		$	70.0	$	271.5	-	$	272.5
Total cost of revenues	$	77.0	-		$	77.5

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

Diluted shares outstanding			55.0						55.0
Net income per diluted share	(a)		-		(a)		(a)		-	(a)

Non-GAAP:
Adjusted revenues ⁽¹⁾:
Asset-based	$	134.0	-		$	134.5
Subscription-based	104.5		-		105.0
Total recurring revenues	$	238.5	-		$	239.5
Professional services and other revenues	6.0		-		6.5
Total revenues	$	244.5	-		$	246.0	$	977.0	-	$	980.0

Adjusted net revenues ⁽¹⁾	$	174.5	-		$	176.5	$	704.5	-	$	708.5

Adjusted EBITDA⁽¹⁾	$	56.0	-		$	57.0	$	221.0	-	$	223.0
Adjusted net income per diluted share⁽¹⁾			$	0.59			$	2.28	-	$	2.31

(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.

Envestnet will host a conference call to discuss second 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.

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 103,000 advisors and more than 4,900 companies including: 16 of the 20 largest U.S. banks, 46 of the 50 largest wealth management and brokerage firms, over 500 of the largest RIAs and hundreds of FinTech companies, leverage the Envestnet platform to grow their business and client relationships.

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

(1) Non-GAAP Financial Measures

“Adjusted revenues” excludes the effect of purchase accounting on the fair value of acquired deferred revenue. Under GAAP, we record at fair value the acquired deferred revenue for contracts in effect at the time the entities were acquired. Consequently, revenue related to acquired entities for periods subsequent to the acquisition does not reflect the full amount of revenue that would have been recorded by these entities had they remained stand‑alone entities.

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

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

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

“Adjusted net income” represents net income before deferred revenue fair value adjustment, accretion on contingent consideration and purchase liability, non-cash interest expense, non-cash compensation expense, restructuring charges and transaction costs, severance, fair market value adjustment on contingent consideration liability, amortization of acquired intangibles, litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, gain on acquisition of equity method investment, loss allocation from equity method investments and (income) loss attributable to non-controlling interest. Reconciling items are presented gross of tax, and a normalized tax rate is applied to the total of all reconciling items to arrive at adjusted net income. The normalized tax rate is based solely on the estimated blended statutory income tax rates in the jurisdictions in which

we operate. We monitor the normalized tax rate based on events or trends that could materially impact the rate, including tax legislation changes and changes in the geographic mix of our operations.

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

See reconciliation of Non-GAAP Financial Measures on pages 9-14 of this press release. Reconciliations are not provided for guidance on such measures as the Company is unable to predict the amounts to be adjusted, such as the GAAP tax provision. The Company’s Non-GAAP Financial Measures should not be viewed as a substitute for revenues, net income or net income per share determined in accordance with GAAP.

Cautionary Statement Regarding Forward-Looking Statements

The forward-looking statements made in this press release and its attachments concerning, among other things, Envestnet, Inc.’s expected financial performance and outlook for the third quarter and full year of 2020, its strategic operational plans and growth strategy are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and the Company’s actual results could differ materially from the results expressed or implied by such forward-looking statements. Furthermore, reported results should not be considered as an indication of future performance. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release include, but are not limited to, a pandemic or health crisis, including the COVID-19 pandemic, and its impact on financial institutions, the global economy or capital markets, as well as our products, clients, vendors and employees, and our results of operations, the full extent of which is currently unknown; changes and volatility in financial and capital markets, which could result in changes in demand for our products or services or in the value of assets on which we earn revenue; the possibility that the anticipated benefits of any of our acquisitions will not be realized to the extent or when expected, difficulty in sustaining rapid revenue growth, which may place significant demands on our administrative, operational and financial resources, the concentration of nearly all of our revenues from the delivery of our solutions and services to clients in the financial services industry, our reliance on a limited number of clients for a material portion of our revenues, the renegotiation of fee percentages or termination of our services by our clients, our ability to identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies, the impact of market and economic conditions on revenues, our inability to successfully execute the conversion of clients’ assets from their technology platform to our technology platforms in a timely and accurate manner, our ability to expand our relationships with existing customers, grow the number of customers and derive revenue from new offerings such as our data analytics solutions and market research services and premium financial applications, compliance failures, adverse judicial or regulatory proceedings against us, liabilities associated with potential, perceived or actual breaches of fiduciary duties and/or conflicts of interest, changes in laws and regulations, including tax laws and regulations, general economic conditions, political and regulatory conditions, the impact of fluctuations in market condition and interest rates on the demand for our products and services and the value of assets under management or administration, the impact of market conditions on our ability to issue debt and equity, the impact of fluctuations in interest rates on our cost of borrowing, our financial performance, the results of our investments in research and development, our data center and other infrastructure, our ability to maintain the security and integrity of our systems and facilities and to maintain the privacy of personal information, failure of our systems to work properly, our ability to realize operating efficiencies, the advantages of our solutions as compared to those of others, the failure to protect our intellectual property rights, our ability to establish and maintain intellectual property rights, our ability to retain and hire necessary employees and appropriately staff our operations and management’s response to these factors. More information regarding these and other risks, uncertainties and factors is contained in our filings with the Securities and Exchange Commission (“SEC”) which are available on the SEC’s website at www.sec.gov or the 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 August 6, 2020 and, unless required by law, we undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to report the occurrence of unanticipated events.


Contacts
Investor Relations						Media Relations
investor.relations@envestnet.com						mediarelations@envestnet.com
(312) 827-3940

Condensed Consolidated Balance Sheets


	June 30,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	92,244	$	82,505
Fees receivable, net	74,871		67,815
Prepaid expenses and other current assets	38,665		32,183
Total current assets	205,780		182,503

Property and equipment, net	49,752		53,756
Internally developed software, net	78,024		60,263
Intangible assets, net	471,091		505,589
Goodwill	906,499		879,850
Operating lease right-of-use-assets, net	73,537		82,796
Other non-current assets	46,722		37,127
Total assets	$	1,831,405	$	1,801,884

Liabilities and Equity
Current liabilities:
Accrued expenses and other liabilities	$	134,763	$	137,944
Accounts payable	16,132		17,277
Operating lease liabilities	13,926		13,816
Contingent consideration	1,603		—
Deferred revenue	42,861		34,753
Total current liabilities	209,285		203,790

Convertible Notes due 2023	311,031		305,513
Revolving credit facility	275,000		260,000
Contingent consideration	11,422		9,045
Deferred revenue	5,231		5,754
Non-current operating lease liabilities	81,600		88,365
Deferred tax liabilities, net	27,106		29,481
Other non-current liabilities	36,993		32,360
Total liabilities	957,668		934,308

Equity:
Total stockholders’ equity	875,795		869,094
Non-controlling interest	(2,058)		(1,518)
Total liabilities and equity	$	1,831,405	$	1,801,884

Condensed Consolidated Statements of Operations

(in thousands, except share and per share information)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020		2019		2020		2019
Revenues:
Asset-based	$	122,246	$	120,070	$	257,057	$	229,004
Subscription-based	104,979		92,258		209,530		175,345
Total recurring revenues	227,225		212,328		466,587		404,349
Professional services and other revenues	8,088		12,117		15,265		19,762
Total revenues	235,313		224,445		481,852		424,111

Operating expenses:
Cost of revenues	68,849		72,080		143,782		133,725
Compensation and benefits	95,565		103,286		205,995		190,003
General and administration	38,448		42,421		79,558		82,945
Depreciation and amortization	28,443		26,915		56,126		46,432
Total operating expenses	231,305		244,702		485,461		453,105

Income (loss) from operations	4,008		(20,257)		(3,609)		(28,994)
Other expense, net	(8,173)		(7,512)		(9,710)		(13,275)
Loss before income tax provision (benefit)	(4,165)		(27,769)		(13,319)		(42,269)

Income tax provision (benefit)	1,306		(28,382)		(658)		(24,614)

Net income (loss)	(5,471)		613		(12,661)		(17,655)
Add: Net loss attributable to non-controlling interest	547		280		401		363
Net income (loss) attributable to Envestnet, Inc.	$	(4,924)	$	893	$	(12,260)	$	(17,292)

Net income (loss) per share attributable to Envestnet, Inc.:
Basic	$	(0.09)	$	0.02	$	(0.23)	$	(0.35)

Diluted	$	(0.09)	$	0.02	$	(0.23)	$	(0.35)

Weighted average common shares outstanding:
Basic	53,562,850		50,870,296		53,288,741		49,526,774

Diluted	53,562,850		52,982,688		53,288,741		49,526,774

Condensed Consolidated Statements of Cash Flows


	Six Months Ended
	June 30,
	2020		2019
OPERATING ACTIVITIES:
Net loss	$	(12,661)	$	(17,655)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	56,126		46,432
Provision for doubtful accounts	1,515		713
Deferred income taxes	(1,598)		(28,991)
Non-cash compensation expense	29,869		27,852
Non-cash interest expense	5,907		9,896
Accretion on contingent consideration and purchase liability	910		742
Payments of contingent consideration	—		(578)
Fair market value adjustment to contingent consideration liability	(1,982)		—
Gain on acquisition of equity method investment	(4,230)		—
Loss allocation from equity method investment	3,286		550
Impairment of right of use assets	1,426		—
Other	556		—
Changes in operating assets and liabilities, net of acquisitions:
Fees receivables, net	(8,560)		(536)
Prepaid expenses and other current assets	(7,756)		(15,507)
Other non-current assets	(353)		(3,241)
Accrued expenses and other liabilities	(4,484)		(19,060)
Accounts payable	(2,130)		(4,768)
Deferred revenue	7,236		3,940
Other non-current liabilities	1,946		2,602
Net cash provided by operating activities	65,023		2,391

INVESTING ACTIVITIES:
Purchases of property and equipment	(4,329)		(8,815)
Capitalization of internally developed software	(25,703)		(15,583)
Investments in private companies	(12,625)		(2,000)
Acquisitions of businesses, net of cash acquired	(20,257)		(321,571)
Net cash used in investing activities	(62,914)		(347,969)

FINANCING ACTIVITIES:
Proceeds from borrowings on revolving credit facility	45,000		175,000
Payments on revolving credit facility	(30,000)		(30,000)
Payments of contingent consideration	—		(171)
Proceeds from exercise of stock options	6,683		4,914
Purchase of treasury stock for stock-based tax withholdings	(12,816)		(15,962)
Issuance of restricted stock units	3		3
Net cash provided by financing activities	8,870		133,784

EFFECT OF EXCHANGE RATE CHANGES ON CASH	(1,342)		166

INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	9,637		(211,628)

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

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (a)	$	92,392	$	78,043

(a) The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the Condensed Consolidated Balance Sheets:


	June 30,		June 30,
	2020		2019
Cash and cash equivalents	$	92,244	$	77,717
Restricted cash included in prepaid expenses and other current assets	—		158
Restricted cash included in other non-current assets	148		168
Total cash, cash equivalents and restricted cash	$	92,392	$	78,043

Reconciliation of Non-GAAP Financial Measures


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020		2019		2020		2019
Total revenues	$	235,313	$	224,445	$	481,852	$	424,111
Deferred revenue fair value adjustment ^(a)	77		3,414		516		3,420
Adjusted revenues	235,390		227,859		482,368		427,531
Asset-based cost of revenues	(61,875)		(60,293)		(130,467)		(114,135)
Adjusted net revenues	$	173,515	$	167,566	$	351,901	$	313,396

Net income (loss)	$	(5,471)	$	613	$	(12,661)	$	(17,655)
Add (deduct):
Deferred revenue fair value adjustment ^(a)	77		3,414		516		3,420
Interest income ^(b)	(197)		(901)		(588)		(2,411)
Interest expense ^(b)	6,634		8,263		13,768		15,359
Accretion on contingent consideration and purchase liability ^(c)	311		502		910		742
Income tax provision (benefit)	1,306		(28,382)		(658)		(24,614)
Depreciation and amortization	28,443		26,915		56,126		46,432
Non-cash compensation expense ^(d)	13,875		14,988		27,345		27,852
Restructuring charges and transaction costs ^(c)	6,648		13,208		9,468		20,574
Severance ^(e)	1,869		3,280		15,851		5,760
Fair market value adjustment on contingent consideration liability ^(c)	(1,982)		—		(1,982)		—
Non-recurring litigation and regulatory related expenses ^(c)	3,517		—		4,220		—
Foreign currency ^(b)	463		(154)		(31)		(155)
Non-income tax expense adjustment ^(c)	(642)		908		(454)		1,118
Non-recurring gain ^(b)	—		—		(4,230)		—
Loss allocation from equity method investments ^(b)	1,256		347		3,286		550
(Income) loss attributable to non-controlling interest	(299)		210		(500)		241
Adjusted EBITDA	$	55,808	$	43,211	$	110,386	$	77,213

(a)Included within subscription-based revenues in the condensed consolidated statements of operations.

(b)Included within other expense, net in the condensed consolidated statements of operations.

(c)Included within general and administrative expenses in the condensed consolidated statements of operations.

(d)For the 2020 period, $29,869 included in compensation and benefits, and a fair value adjustment of $(2,524) included in other expense, net in the condensed consolidated statements of operations. All of 2019 included in compensation and benefits in the condensed consolidated statements of operations.

(e)Included within compensation and benefits in the condensed consolidated statements of operations.

Reconciliation of Non-GAAP Financial Measures

(in thousands, except share and per share information)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020		2019		2020		2019
Net income (loss)	$	(5,471)	$	613	$	(12,661)	$	(17,655)
Income tax provision (benefit) ^(a)	1,306		(28,382)		(658)		(24,614)
Loss before income tax provision (benefit)	(4,165)		(27,769)		(13,319)		(42,269)
Add (deduct):
Deferred revenue fair value adjustment ^(b)	77		3,414		516		3,420
Accretion on contingent consideration and purchase liability ^(d)	311		502		910		742
Non-cash interest expense ^(c)	2,983		4,646		5,945		9,262
Non-cash compensation expense ^(e)	13,875		14,988		27,345		27,852
Restructuring charges and transaction costs ^(d)	6,648		13,208		9,468		20,574
Severance ^(f)	1,869		3,280		15,851		5,760
Fair market value adjustment on contingent consideration liability ^(d)	(1,982)		—		(1,982)		—
Amortization of acquired intangibles ^(g)	18,746		19,278		37,504		31,806
Non-recurring litigation and regulatory related expenses ^(d)	3,517		—		4,220		—
Foreign currency ^(c)	463		(154)		(31)		(155)
Non-income tax expense adjustment ^(d)	(642)		908		(454)		1,118
Non-recurring gain ^(c)	—		—		(4,230)		—
Loss allocation from equity method investments ^(c)	1,256		347		3,286		550
(Income) loss attributable to non-controlling interest	(299)		210		(500)		241
Adjusted net income before income tax effect	42,657		32,858		84,529		58,901
Income tax effect ^(h)	(10,884)		(8,388)		(21,554)		(15,020)
Adjusted net income	$	31,773	$	24,470	$	62,975	$	43,881

Basic number of weighted-average shares outstanding	53,562,850		50,870,296		53,288,741		49,526,774
Effect of dilutive shares:
Options to purchase common stock	374,070		1,164,246		519,886		1,185,480
Unvested restricted stock units	322,140		662,853		475,990		666,116
Convertible notes	—		261,075		11,719		12,532
Warrants	—		24,218		22,714		—
Diluted number of weighted-average shares outstanding	54,259,060		52,982,688		54,319,050		51,390,902

Adjusted net income per share - diluted	$	0.59	$	0.46	$	1.16	$	0.85

(a)For the three months ended June 30, 2020 and 2019, the effective tax rate computed in accordance with GAAP equaled (31.4)% and 102.2%, respectively. For the six months ended June 30, 2020 and 2019, the effective tax rate computed in accordance with GAAP equaled 4.9% and 58.2%, respectively.

(b)Included within subscription-based revenues in the condensed consolidated statements of operations.

(c)Included within other expense, net in the condensed consolidated statements of operations.

(d)Included within general and administrative expenses in the condensed consolidated statements of operations.

(e)For the 2020 period, $29,869 included in compensation and benefits, and a fair value adjustment of $(2,524) included in other expense, net in the condensed consolidated statements of operations. All of 2019 included in compensation and benefits in the condensed consolidated statements of operations.

(f)Included within compensation and benefits in the condensed consolidated statements of operations.

(g)Included within depreciation and amortization in the condensed consolidated statements of operations.

(h)An estimated normalized effective tax rate of 25.5% have been used to compute adjusted net income for the three and six months ended June 30, 2020 and 2019.

Reconciliation of Non-GAAP Financial Measures


	Three months ended June 30, 2020
	Envestnet Wealth Solutions		Envestnet Data & Analytics		Nonsegment		Total
Total Revenues	$	187,685	$	47,628	$	—	$	235,313
Deferred revenue fair value adjustment ^(a)	77		—		—		77
Adjusted revenues	187,762		47,628		—		235,390
Less: Asset-based cost of revenues	(61,875)		—		—		(61,875)
Adjusted net revenues	$	125,887	$	47,628	$	—	$	173,515

Revenues:
Asset-based	$	122,246	$	—	$	—	$	122,246
Subscription-based	61,410		43,569		—		104,979
Total recurring revenues	183,656		43,569		—		227,225
Professional services and other revenues	4,029		4,059		—		8,088
Total revenues	187,685		47,628		—		235,313

Operating expenses:
Cost of revenues:
Asset-based	61,875		—		—		61,875
Subscription-based	1,227		5,580		—		6,807
Professional services and other	9		158		—		167
Total cost of revenues	63,111		5,738		—		68,849
Compensation and benefits	62,796		25,802		6,967		95,565
General and administration	21,830		8,667		7,951		38,448
Depreciation and amortization	20,081		8,362		—		28,443
Total operating expenses	$	167,818	$	48,569	$	14,918	$	231,305

Income (loss) from operations	$	19,867	$	(941)	$	(14,918)	$	4,008
Add:
Deferred revenue fair value adjustment ^(a)	77		—		—		77
Accretion on contingent consideration and purchase liability ^(b)	373		(62)		—		311
Depreciation and amortization	20,081		8,362		—		28,443
Non-cash compensation expense ^(c)	9,055		2,981		1,839		13,875
Restructuring charges and transaction costs ^(b)	3,731		271		2,646		6,648
Non-income tax expense adjustment ^(b)	(578)		(64)		—		(642)
Severance ^(c)	1,437		432		—		1,869
Fair market value adjustment on contingent consideration liability ^(b)	—		(1,982)		—		(1,982)
Non-recurring litigation and regulatory related expenses ^(b)	—		3,517		—		3,517
Income attributable to non-controlling interest	(299)		—		—		(299)
Other	(17)		—		—		(17)
Adjusted EBITDA	$	53,727	$	12,514	$	(10,433)	$	55,808

(a)Included within subscription-based revenues in the condensed consolidated statements of operations.

(b)Included within general and administrative expenses in the condensed consolidated statements of operations.

(c)Included within compensation and benefits in the condensed consolidated statements of operations.

Reconciliation of Non-GAAP Financial Measures

Segment Information (continued)


	Six months ended June 30, 2020
	Envestnet Wealth Solutions		Envestnet Data & Analytics		Nonsegment		Total
Total Revenues	$	386,105	$	95,747	$	—	$	481,852
Deferred revenue fair value adjustment ^(a)	516		—		—		516
Adjusted revenues	386,621		95,747		—		482,368
Less: Asset-based cost of revenues	(130,467)		—		—		(130,467)
Adjusted net revenues	$	256,154	$	95,747	$	—	$	351,901

Revenues:
Asset-based	$	257,057	$	—	$	—	$	257,057
Subscription-based	121,733		87,797		—		209,530
Total recurring revenues	378,790		87,797		—		466,587
Professional services and other revenues	7,315		7,950		—		15,265
Total revenues	386,105		95,747		—		481,852

Operating expenses:
Cost of revenues:
Asset-based	130,467		—		—		130,467
Subscription-based	2,419		10,665		—		13,084
Professional services and other	17		214		—		231
Total cost of revenues	132,903		10,879		—		143,782
Compensation and benefits	135,384		55,915		14,696		205,995
General and administration	47,110		17,854		14,594		79,558
Depreciation and amortization	39,501		16,625		—		56,126
Total operating expenses	$	354,898	$	101,273	$	29,290	$	485,461

Income (loss) from operations	$	31,207	$	(5,526)	$	(29,290)	$	(3,609)
Add:
Deferred revenue fair value adjustment ^(a)	516		—		—		516
Accretion on contingent consideration and purchase liability ^(b)	746		164		—		910
Depreciation and amortization	39,501		16,625		—		56,126
Non-cash compensation expense ^(c)	18,752		7,207		3,910		29,869
Restructuring charges and transaction costs ^(b)	4,920		456		4,092		9,468
Non-income tax expense adjustment ^(b)	(328)		(126)		—		(454)
Severance ^(c)	12,439		2,092		1,320		15,851
Fair market value adjustment on contingent consideration liability^(b)	—		(1,982)		—		(1,982)
Non-recurring litigation and regulatory related expenses ^(b)	—		4,220		—		4,220
Income attributable to non-controlling interest	(500)		—		—		(500)
Other	(29)		—		—		(29)
Adjusted EBITDA	$	107,224	$	23,130	$	(19,968)	$	110,386

(a)Included within subscription-based revenues in the condensed consolidated statements of operations.

(b)Included within general and administrative expenses in the condensed consolidated statements of operations.

(c)Included within compensation and benefits in the condensed consolidated statements of operations.

Reconciliation of Non-GAAP Financial Measures

Segment Information (continued)


	Three months ended June 30, 2019
	Envestnet Wealth Solutions		Envestnet Data & Analytics		Nonsegment		Total
Revenues	$	176,890	$	47,555	$	—	$	224,445
Deferred revenue fair value adjustment ^(a)	3,414		—		—		3,414
Adjusted revenues	180,304		47,555		—		227,859
Less: Asset-based cost of revenues	(60,293)		—		—		(60,293)
Adjusted net revenues	$	120,011	$	47,555	$	—	$	167,566

Revenues:
Asset-based	$	120,070	$	—	$	—	$	120,070
Subscription-based	50,078		42,180		—		92,258
Total recurring revenues	170,148		42,180		—		212,328
Professional services and other revenues	6,742		5,375		—		12,117
Total revenues	176,890		47,555		—		224,445

Operating expenses:
Cost of revenues:
Asset-based	60,293		—		—		60,293
Subscription-based	1,115		5,582		—		6,697
Professional services and other	4,842		248		—		5,090
Total cost of revenues	66,250		5,830		—		72,080
Compensation and benefits	56,219		31,593		15,474		103,286
General and administration	25,666		8,553		8,202		42,421
Depreciation and amortization	16,376		10,539		—		26,915
Total operating expenses	$	164,511	$	56,515	$	23,676	$	244,702

Income (loss) from operations	$	12,379	$	(8,960)	$	(23,676)	$	(20,257)
Add:
Deferred revenue fair value adjustment ^(a)	3,414		—		—		3,414
Accretion on contingent consideration and purchase liability ^(b)	502		—		—		502
Depreciation and amortization	16,376		10,539		—		26,915
Non-cash compensation expense ^(c)	8,592		3,767		2,629		14,988
Restructuring charges and transaction costs ^(b)	794		(196)		12,610		13,208
Non-income tax expense adjustment ^(b)	908		—		—		908
Severance ^(c)	818		2,448		14		3,280
Loss attributable to non-controlling interest	210		—		—		210
Other	43		—		—		43
Adjusted EBITDA	$	44,036	$	7,598	$	(8,423)	$	43,211

(a)Included within subscription-based revenues in the condensed consolidated statements of operations.

(b)Included within general and administrative expenses in the condensed consolidated statements of operations.

(c)Included within compensation and benefits in the condensed consolidated statements of operations.

Reconciliation of Non-GAAP Financial Measures

Segment Information (continued)


	Six Months Ended June 30, 2019
	Envestnet Wealth Solutions		Envestnet Data & Analytics		Nonsegment		Total
Revenues	$	329,595	$	94,516	$	—	$	424,111
Deferred revenue fair value adjustment ^(a)	3,420		—		—		3,420
Adjusted revenues	333,015		94,516		—		427,531
Less: Asset-based cost of revenues	(114,135)		—		—		(114,135)
Adjusted net revenues	$	218,880	$	94,516	$	—	$	313,396

Revenues:
Asset-based	$	229,004	$	—	$	—	$	229,004
Subscription-based	91,104		84,241		—		175,345
Total recurring revenues	320,108		84,241		—		404,349
Professional services and other revenues	9,487		10,275		—		19,762
Total revenues	329,595		94,516		—		424,111

Operating expenses:
Cost of revenues:
Asset-based	114,135		—		—		114,135
Subscription-based	3,123		11,251		—		14,374
Professional services and other	4,847		369		—		5,216
Total cost of revenues	122,105		11,620		—		133,725
Compensation and benefits	104,774		62,957		22,272		190,003
General and administration	45,850		18,038		19,057		82,945
Depreciation and amortization	27,643		18,789		—		46,432
Total operating expenses	$	300,372	$	111,404	$	41,329	$	453,105

Income (loss) from operations	$	29,223	$	(16,888)	$	(41,329)	$	(28,994)
Add:
Deferred revenue fair value adjustment ^(a)	3,420		—		—		3,420
Accretion on contingent consideration and purchase liability ^(b)	742		—		—		742
Depreciation and amortization	27,643		18,789		—		46,432
Non-cash compensation expense ^(c)	14,269		7,955		5,628		27,852
Restructuring charges and transaction costs ^(b)	1,056		769		18,749		20,574
Non-income tax expense adjustment ^(b)	1,108		10		—		1,118
Severance ^(c)	1,168		4,496		96		5,760
Loss attributable to non-controlling interest	241		—		—		241
Other	65		1		2		68
Adjusted EBITDA	$	78,935	$	15,132	$	(16,854)	$	77,213

(a)Included within subscription-based revenues in the condensed consolidated statements of operations.

(b)Included within general and administrative expenses in the condensed consolidated statements of operations.

(c)Included within compensation and benefits in the condensed consolidated statements of operations.

Historical Assets, Accounts and Advisors

(in millions, except accounts and advisors)


	As of
	June 30,		September 30,		December 31,		March 31,		June 30,
	2019		2019		2019		2020		2020
	(in millions, except accounts and advisors data)
Platform Assets
Assets under Management (“AUM”)	$	182,143	$	188,739	$	207,083	$	185,065	$	215,994
Assets under Administration (“AUA”)	330,226		316,742		343,505		312,472		344,957
Total AUM/A	512,369		505,481		550,588		497,537		560,951
Subscription	2,835,780		2,947,582		3,205,281		2,875,394		3,247,400
Total Platform Assets	$	3,348,149	$	3,453,063	$	3,755,869	$	3,372,931	$	3,808,351
Platform Accounts
AUM	907,034		934,811		935,039		970,896		1,007,386
AUA	1,196,114		1,136,430		1,193,882		1,254,856		1,252,247
Total AUM/A	2,103,148		2,071,241		2,128,921		2,225,752		2,259,633
Subscription	9,492,653		9,692,714		9,793,175		10,090,172		10,003,156
Total Platform Accounts	11,595,801		11,763,955		11,922,096		12,315,924		12,262,789
Advisors
AUM/A	39,727		39,735		40,563		40,971		41,206
Subscription	59,292		60,319		61,180		62,077		62,404
Total Advisors	99,019		100,054		101,743		103,048		103,610

The following table summarizes the changes in AUM and AUA for the three months ended June 30, 2020:


	3/31/2020		Gross Sales		Redemptions		Net Flows		Market Impact		6/30/2020
	(in millions except account data)
AUM	$	185,065	$	16,843	$	(9,860)	$	6,983	$	23,946	$	215,994
AUA	312,472		16,526		(23,025)		(6,499)		38,984		344,957
Total AUM/A	$	497,537	$	33,369	$	(32,885)	$	484	$	62,930	$	560,951

Fee-Based Accounts	2,225,752						33,881				2,259,633

The above AUM/A gross sales figures include $1.6 billion in new client conversions. The Company onboarded an additional $24.1 billion in subscription conversions during the three months ended June 30, 2020, bringing total conversions for the quarter to $25.7 billion.

2Q 2020 Earnings Supplemental Presentation August 6, 2020

Safe Harbor Disclosure This presentation contains forward-looking statements. These forward-looking statements include, in particular, statements about our plans, strategies and prospects. These statements are based on our current expectations and projections about future events. The words “m ay,” “will,” “s hould ,” “expect,” “scheduled,” “plan,” “seek,” “intend,” “anticipate,” “believe,” “estimate,” “a im ,” “potential” or “continue” or the negative of those terms or other similar expressions are intended to identify forward-looking statements and information. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are based on assumptions and estimates by our management that, although we believe to be reasonable, are inherently uncertain and subject to risks and uncertainties that could cause actual results to differ from historical results or those anticipated or predicted by our forward-looking statements. These risks and uncertainties include those described in our filings with the SEC. In light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this presentation may not in fact occur. We undertake no obligation to update or revise any forward-looking statement after the date of this presentation as a result of new information, future events or otherwise, except as required by law. We qualify all of our forward-looking statements by these cautionary statements. 2

Non-GAAP Disclosure Statement This presentation contains certain non-GAAP financial measures, including adjusted revenue, adjusted net revenue, adjusted EBITDA, adjusted net income and adjusted net income per share. • “Adjusted revenues” excludes the effect of purchase accounting on the fair value of acquired deferred revenue. Under GAAP, we record at fair value the acquired deferred revenue for contracts in effect at the time the entities were acquired. Consequently, revenue related to acquired entities for periods subsequent to the acquisition does not reflect the full amount of revenue that would have been recorded by these entities had they remained stand-alone entities. • “Adjusted net revenues” represents adjusted revenues less asset-based cost of revenues. Under GAAP, we are required to recognize as revenue certain fees paid to investment managers and other third parties needed for implementation of investment solutions included in our assets under management. Those fees also are required to be recorded as cost of revenues. This non-GAAP metric presents adjusted revenues without such fees included, as they have no impact on our profitability. Adjusted revenues and Adjusted net revenues have limitations as financial measures, should be considered as supplemental in nature and are not meant as a substitute for revenue prepared in accordance with GAAP. • “Adjusted EBITDA” represents net income before deferred revenue fair value adjustment, interest income, interest expense, accretion on contingent consideration and purchase liability, income tax provision (benefit), depreciation and amortization, non-cash compensation expense, restructuring charges and transaction costs, severance, litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, non-recurring gain, other items, loss allocation from equity method investment 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, amortization of acquired intangibles, litigation and regulatory related expenses, foreign currency, non-income tax expense adjustment, non-recurring gain, other items, loss allocation from equity method investment 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 diluted share” represents adjusted net income divided by the diluted number of weighted-average shares outstanding. This information is not calculated in accordance with GAAP and may be calculated differently than similar non-GAAP information for other companies. Quantitative reconciliations of our non-GAAP financial information to the most directly comparable GAAP information appear in the appendix of this presentation. Reconciliations are not provided for guidance on such measures as the Company is unable to predict the amounts to be adjusted, such as the GAAP tax provision. The Company’s Non-GAAP Financial Measures should not be viewed as a substitute for revenues, net income or net income per share determined in accordance with GAAP. 3

Key Messages for Today Leveraging technology and data as the conduit to every service and solution we provide Expanding value-added Financial Wellness solutions to large and growing installed base Enabling a new standard of personal financial services and investing to capitalize on substantial opportunity Delivering strong financial results in the context of current environment 4

We Use Technology and Data as a Conduit to Every Service and Solution We Provide Optimization Engine Financial Institutions Exchanges Envestnet Connect Financial INV Wellness Fin Techs Client Portal Envestnet Financial Scorecard Credit Credit Data Planning INS Advisor Portal Capability Enterprise Portal Analytics Fin Apps Ret. Trust Support Payments, HC, Other Other Advisor Services Health Cash APIs/Data Management Account Administration and Service Clearing, Custody, Trust  Data Aggregation  Digital Wealth  Marketplace of Exchanges  Highly Configurable  Performance Reporting  Data Intelligence Experience - Open APIs  Research and Consulting  Integrated Account Opening  Comprehensive View   Digital / Mobile Client Services and Proposal Integrated Across the Full Security Experience Solution Set   Portfolio Administration and  Sophisticated Trading and Data Management  Dynamic Overlay Services Rebalancing  Accurate, Reconciled Data Solutions Configurations  Portfolio Management and  Multi-Custody Integration  Customized Reporting  Money Movement  Predictive, Complete Rebalancing  Compliance Oversight for Financial Wellness  Recommendations Integrated Insurance Network Advisor / Sponsor   Integrated Lending and  Comprehensive and Flexible Financial Planning Financing Solutions Billing 5

Driving Long-Term Growth Through Land and Expand Investment solutions (managed accounts, overlay, direct indexing) Data and analytics Exchanges (insurance, credit, advisor services) Installed base of Financial Planning advisors and by MoneyGuide accounts Recommendation Future offerings engine Growing the installed base Leveraging technology Deploying additional solutions “land” and data “expand” 6

Installed Base Adopting Expanded Offerings Direct Indexing ENV Insurance Exchange Overlay Solutions 13 firms advisor usage +23% advisors usage +16% accounts +33% 7,000 advisors accounts +19% 8 of the top 12 insurance carriers as partners Credit Exchange Impact Portfolios 11 firms advisor usage 12% Managed Accounts 8,600 advisors accounts +18% Tamarac users migrating to Four lender partners model traded UMA 7 Increase in advisor usage and accounts represents year-to-date change

Envestnet Powering the Future of Advice Themes driving change Implications A new level of trust and relevance are Transparency, authenticity and logic supported by predictive analytics will be the baseline for how a client values the information and advice provider the currency of valued engagement they engage with Redefining what it means to be Understanding the trade offs and “what-if” scenarios will be the prepared underpinning of advancements and usage of planning Hybrid is the only engagement model and the “fidelity” will need to be Digital becomes more “human” the same across every medium Behavioral, holistic wellness across all assets and liabilities will be the The fusion of health and wealth mandate, supported by an integrated tech platform Family and communities lead the way The new mutuality, “we’re all in this together” drives the connectedness forward and strength of communities Creating a new playbook for a The need for scale (digitizing, analytics, outsourcing, and strategic sustainable business partnerships) will be the focus over product selection Links: Advisor Summit On-Demand Advisor’s Playbook for Leading Clients Forward 8

Strong Second Quarter 2020 Results 2Q20 Outlook 2Q20 Results YoY Change Key Variance Drivers – (in millions except for per share Provided 5/7/20 vs. Midpoint (%) Results vs. Outlook amounts) $235.4 • Favorable asset-based revenues Adjusted revenues(1) $226.0-$227.5 +3% • Subscription and professional services +$8.7 modestly favorable • Favorable margin from asset-based revenue Adjusted net $173.5 outperformance (1) $165.0-167.0 +4% • Subscription and professional services revenues +$7.5 modestly favorable • (1) $55.8 $7.5 higher adjusted net revenues Adjusted EBITDA $47.5-$48.5 +29% • $0.3 lower operating expenses +$7.8 • ~$0.10 Adjusted net revenues Adjusted net income $0.59 • ~$0.005 Operating expenses (1) $0.47 +28% • ~$0.005 Net cash interest expense per diluted share +$0.12 • ~$0.01 Share count (1) Non-GAAP financial measure. Please see appendix for reconciliations to the most directly comparable GAAP information. 9

Improved 2020 Full Year Outlook Key Components Updated Prior FY20 Updated FY20 (in millions except Variance at FY20 Primary Variance Drivers Guidance Guidance adjusted EPS and tax (5/7/20) (8/6/20) midpoint guidance vs. Prior Guidance rate) vs. 2019 • 2Q market impact on asset-based revenues Adjusted revenues(1) $940 - $946 $977 - $980 +$35.5 +7-8% in back half of year • Mix-driven outperformance in 2Q Asset-based cost of • 2Q market impact resulting in higher $257 - $262 $271.5 – $272.5 +$12.5 +11-12% revenues manager fees in back half of year Adjusted net revenues(1) $678 - $689 $704.5 - $708.5 +$23.0 +6-7% • 2Q market impact net of manager fees • Improved revenue outlook Adjusted EBITDA(1) $200 - $203 $221 - $223 +$20.5 +14-15% • Sequential increase in operating expenses between 3Q and 4Q Adjusted net income per $1.92 - $2.02 $2.28 – $2.31 +$0.33 +6-7% • Improved revenue outlook diluted share(1) Normalized effective tax 25.5% 25.5% n/a n/a • Unchanged rate Diluted shares outstanding 55.0 55.0 n/a +4% • Unchanged (1) Non-GAAP financial measure. Please see appendix for reconciliations to the most directly comparable GAAP information. Please review slides 2 and 3 for additional disclosures. 10

Strong Balance Sheet and Liquidity Capital Position as of June 30, 2020 Cash and Cash Equivalents $92M Debt Outstanding on Revolving Line of Credit ($500M) $275M Convertible Debt Maturing 2023 $345M Net Leverage Ratio 2.3x Annual cash interest expense ~$16M Revolving Line of Credit LIBOR + spread(1) Convertible Debt 1.75% coupon (1) LIBOR plus 225 basis points, based on current leverage ratio. 11

ENV…Yesterday…Today…Tomorrow 822% The next 10 years… 1385% • Establishing the ecosystem that can make financial wellness a reality for everyone • Positively impacting millions of families 435% Platform assets, accounts and advisors, as well as employee count as of June 30 in each respective year. 12

Appendix

Illustrative Market Impact Assuming +/-10% market change (1) Asset-based revenues Cost of revenues Adjusted EBITDA unmitigated ~$32M ~$16M ~$16M Management has visibility into expected performance allowing operating decisions that may impact hiring plans, variable compensation and other spending initiatives. (1) Non-GAAP financial measure. Please see appendix for reconciliations to the most directly comparable GAAP information. Amounts represent annualized impact applicable to subsequent quarter following assumed market change. Amounts based on 2Q20 actual revenue. 14 See additional information on slide 15 which provides calculations and other statements.

Illustrative Market Impact Calculations Illustrative Market Impact Model Assumptions Total revenue 2Q20 revenue, annualized $986 x % asset-based ~55% of total revenue 55% x % exposure to equities Approximate 60% equity allocation 60% x % market change Assuming 10% equity market decline -10% = revenue impact ($32) 3-4% impact on total revenue - impact on asset-based cost of revenue Currently 51% of asset-based revenue ($16) = impact on adjusted EBITDA(1) Unmitigated impact ($16) 7-8% impact on adjusted EBITDA (in $millions) • Given Envestnet’s high degree of subscription-based revenue and limited exposure to equity markets, a 10% equity market decline would have a 3-4% impact on our revenue. • Approximately 90% of our asset-based revenue is billed quarterly, in advance. As such, the majority of any market impact would be seen in future quarters. Example: June 30 asset values drive our third quarter asset-based revenue. • Approximately half of our asset-based revenue is paid to third party managers and strategists. This naturally reduces the impact on our profit from a market decline. In the above scenario, a 10% equity market decline would have a 7-8% impact on our adjusted EBITDA. • This represents the unmitigated impact. Depending on the severity of the impact, management may choose to offset a portion of this impact through lower variable compensation, and changing its discretionary hiring and spending plans. 15 (1) Non-GAAP financial measure. Please see appendix for reconciliations to the most directly comparable GAAP information.

Outlook Table The Company provided the following outlook for the third quarter ending September 30, 2020 and full year ending December 31, 2020. This outlook is based on the market value of assets on June 30, 2020. We caution that we cannot predict the market value of our assets on any future date and, in particular, in light of recent market volatility. See slide 2 for more information. (In Millions Except Adjusted EPS) 3Q 2020 FY 2020 GAAP: Revenues: Asset-based $ 134.0 - $ 134.5 Subscription-based 104.5 - 105.0 Total recurring revenues $ 238.5 - $ 239.5 Professional services and other revenues 6.0 - 6.5 Total revenues $ 244.5 - $ 246.0 $ 976.3 - $ 979.3 Asset-based cost of revenues $ 69.5 - $ 70.0 $ 271.5 - $ 272.5 Total cost of revenues $ 77.0 - $ 77.5 Net income (a) - (a) (a) - (a) Diluted shares outstanding 55.0 55.0 Net income per diluted share (a) - (a) (a) - (a) Non-GAAP: Adjusted revenues (1): Asset-based $ 134.0 - $ 134.5 Subscription-based 104.5 - 105.0 Total recurring revenues $ 238.5 - $ 239.5 Professional services and other revenues 6.0 - 6.5 Total revenues $ 244.5 - $ 246.0 $ 977.0 - $ 980.0 Adjusted net revenues (1) $ 174.5 - $ 176.5 $ 704.5 - $ 708.5 Adjusted EBITDA(1) $ 56.0 - $ 57.0 $ 221.0 - $ 223.0 Adjusted net income per diluted share(1) $ 0.59 $ 2.28 - $ 2.31 (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. 16 (1) Non-GAAP financial measure. Please see slide 3.

Reconciliation of Non-GAAP Financial Measures Three Months Ended Six Months Ended June 30, June 30, (in thousands) (unaudited) 2020 2019 2020 2019 Total revenues $ 235,313 $ 224,445 $ 481,852 $ 424,111 Deferred revenue fair value adjustment 77 3,414 516 3,420 Adjusted revenues 235,390 227,859 482,368 427,531 Asset-based cost of revenues (61,875) (60,293) (130,467) (114,135) Adjusted net revenues $ 173,515 $ 167,566 $ 351,901 $ 313,396 Net income (loss) $ (5,471) $ 613 $ (12,661) $ (17,655) Add (deduct): Deferred revenue fair value adjustment 77 3,414 516 3,420 Interest income (197) (901) (588) (2,411) Interest expense 6,634 8,263 13,768 15,359 Accretion on contingent consideration and purchase liability 311 502 910 742 Income tax provision (benefit) 1,306 (28,382) (658) (24,614) Depreciation and amortization 28,443 26,915 56,126 46,432 Non-cash compensation expense 13,875 14,988 27,345 27,852 Restructuring charges and transaction costs 6,648 13,208 9,468 20,574 Severance 1,869 3,280 15,851 5,760 Fair market value adjustment on contingent consideration liability (1,982) — (1,982) — Non-recurring litigation and regulatory related expenses 3,517 — 4,220 — Foreign currency 463 (154) (31) (155) Non-income tax expense adjustment (642) 908 (454) 1,118 Non-recurring gain — — (4,230) — Loss allocation from equity method investments 1,256 347 3,286 550 (Income) loss attributable to non-controlling interest (299) 210 (500) 241 Adjusted EBITDA $ 55,808 $ 43,211 $ 110,386 $ 77,213 17

Reconciliation of Non-GAAP Financial Measures Three Months Ended Six Months Ended June 30, June 30, (in thousands, except share and per share information) (unaudited) 2020 2019 2020 2019 Net income (loss) $ (5,471) $ 613 $ (12,661) $ (17,655) Income tax provision (benefit) 1,306 (28,382) (658) (24,614) Loss before income tax provision (benefit) (4,165) (27,769) (13,319) (42,269) Add (deduct): Deferred revenue fair value adjustment 77 3,414 516 3,420 Accretion on contingent consideration and purchase Liability 311 502 910 742 Non-cash interest expense 2,983 4,646 5,945 9,262 Non-cash compensation expense 13,875 14,988 27,345 27,852 Restructuring charges and transaction costs 6,648 13,208 9,468 20,574 Severance 1,869 3,280 15,851 5,760 Fair market value adjustment on contingent consideration liability (1,982) — (1,982) — Amortization of acquired intangibles 18,746 19,278 37,504 31,806 Non-recurring litigation and regulatory related expenses 3,517 — 4,220 — Foreign currency 463 (154) (31) (155) Non-income tax expense adjustment (642) 908 (454) 1,118 Non-recurring gain — — (4,230) — Loss allocation from equity method investments 1,256 347 3,286 550 (Income) loss attributable to non-controlling interest (299) 210 (500) 241 Adjusted net income before income tax effect 42,657 32,858 84,529 58,901 Income tax effect (10,884) (8,388) (21,554) (15,020) Adjusted net income $ 31,773 $ 24,470 $ 62,975 $ 43,881 Basic number of weighted-average shares outstanding 53,562,850 50,870,296 53,288,741 49,526,774 Effect of dilutive shares: Options to purchase common stock 374,070 1,164,246 519,886 1,185,480 Unvested restricted stock units 322,140 662,853 475,990 666,116 Convertible notes — 261,075 11,719 12,532 Warrants — 24,218 22,714 — Diluted number of weighted-average shares outstanding 54,259,060 52,982,688 54,319,050 51,390,902 Adjusted net income per share - diluted $ 0.59 $ 0.46 $ 1.16 $ 0.85 18

19 Reconciliation of Non-GAAP Financial Measures Year ended December 31, (in millions, except share and per share information) (unaudited) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Net income (loss) 23.94 5.26 (0.87) (0.63) 7.61 0.47 3.66 13.98 4.44 (55.57) (3.28) 4.01 (17.20) Accretion on contingent consideration and purchase liability - - - - - - - - 0.89 0.15 0.51 0.22 1.77 Bad debt expense - - 0.38 2.67 - - - - - - - - - Contract settlement charges - - - - 1.18 - - - - - - - - Customer inducement costs - - 0.02 3.24 4.57 - - - - - - - - Deferred revenue fair value adjustment - - - - - 1.25 0.16 - 0.32 1.27 0.13 0.12 9.27 Depreciation and amortization 2.92 3.54 4.50 5.70 6.38 12.40 15.33 18.65 27.96 64.00 62.82 77.63 101.27 Fair market value adjustment on contingent consideration liability - - - - - - 0.50 (1.43) (4.15) 1.59 - - (8.13) Foreign currency - - - - - - - - - (0.72) 0.49 (0.59) (0.07) Impairment of customer inducement assets - - - - 0.17 - - - - - - - - Impairment of equity method investment - - - - - - - - - 0.73 - - - Impairment on investments - 0.68 3.60 - - - - - - - - - - Imputed interest expense on contingent consideration - - - - - - 0.79 1.47 - - - - - Income tax provision (benefit) (14.15) 4.61 1.81 1.53 2.98 2.60 2.05 8.53 4.55 15.08 1.59 (13.17) (30.89) Interest expense - - - 0.56 0.79 - - 0.63 10.27 16.60 16.35 25.20 32.52 Interest income (1.15) (0.81) (0.22) (0.15) (0.08) (0.03) (0.02) (0.14) (0.34) (0.04) (0.20) (2.36) (3.35) Litigation related expense - - 0.60 1.93 0.13 0.27 0.01 0.02 0.07 5.59 1.03 - 2.88 Loss allocation from equity method investment - - - - - - - - - 1.42 1.47 1.15 2.36 Loss attributable to non-controlling interest - - - - - - - 1.23 1.64 1.08 0.32 1.79 0.11 Non-cash compensation expense - 0.45 0.78 1.73 3.06 4.04 8.92 11.42 15.16 33.28 31.33 40.25 60.44 Non-income tax expense adjustment - - - - - - - - - 6.23 0.35 (0.59) 0.37 Other - - - - (1.10) - - (1.83) 0.07 (1.38) - - - Re-audit related expenses - - - - - - 3.11 - - - - - - Restructuring charges and transaction costs - - - 0.86 1.05 2.72 3.30 2.67 13.50 5.78 13.67 15.58 26.56 Severance - - - 0.67 0.70 0.28 0.79 0.74 1.70 4.34 2.32 8.32 15.37 Adjusted EBITDA 11.56 13.73 10.60 18.11 27.44 23.99 38.59 55.94 76.07 99.44 128.89 157.55 193.29 19 Note: Numbers may not sum due to rounding.

Cover Page	Aug. 06, 2020
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 06, 2020
Entity Registrant Name	ENVESTNET, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-34835
Entity Tax Identification Number	20-1409613
Entity Address, Address Line One	35 East Wacker Drive, Suite 2400
Entity Address, City or Town	Chicago,
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60601
City Area Code	312
Local Phone Number	827-2800
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.005 per share
Trading Symbol	ENV
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001337619
Amendment Flag	false