Envestnet : Q1 2024 Earnings Supplemental Presentation

Envestnet 1Q 2024 Earnings

May 7, 2024

Disclaimers

Cautionary Statement Regarding Forward-Looking Statements

The forward-looking statements made in this presentation concerning, among other things, Envestnet, Inc.'s expected financial performance and outlook for the second quarter of 2024, its strategic and 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 presentation include, but are not limited to, our ability to recruit and retain senior executive leadership and other key employees and to successfully manage transitions, including the transition of our chief executive officer; adverse economic or global market conditions, including periods of rising inflation and market interest rates, and governmental responses to such conditions; the conflicts in the Middle East and between Russia and Ukraine, including related sanctions and their impact on the global economy and capital markets; the concentration of our revenue 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, particularly goodwill and intangible assets; the amount of our debt, our ability to service our debt and risks associated with derivative transactions associated with 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 financial technology 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 conditions and interest rates on the demand for our products and services and the value of assets under management or administration; increased geopolitical unrest and other events outside of our control that could adversely affect the global economy or specific international, regional and domestic markets; 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; the failure to protect our intellectual property rights; our reliance on outsourcing arrangements; activist shareholders hindering the execution of our business strategy, diverting board and management attention and resources and causing us to incur substantial expenses; public health crises, pandemics or similar events; 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; our ability to introduce new solutions and services and enhancements; regulatory compliance failures; 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 cybersecurity 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; 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, political and regulatory conditions; global events, natural disasters, environmental disasters, terrorist attacks and pandemics, including their impact on the economy and trading markets; 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://investor.envestnet.com/. You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this presentation. All information in this presentation is as of May 7, 2024, 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 presentation or to report the occurrence of unanticipated events.

© 2024 Envestnet, Inc. All rights reserved.

2

Disclaimers

Non-GAAP Financial Disclosure Statement

This presentation contains the non-GAAP financial measures, "adjusted EBITDA", "adjusted net income," "adjusted net income per diluted share" and "free cash flow."

• "Adjusted EBITDA" represents net income (loss) before deferred revenue fair value adjustment, interest income, interest expense, income tax provision, depreciation and amortization, non-cash compensation expense, restructuring charges and transaction costs, severance expense, litigation, regulatory and other governance related expenses, foreign currency, non-income tax expense adjustment, loss allocations from equity method investments and loss attributable to non-controlling interest.
• "Adjusted net income" represents net income (loss) before income tax provision, deferred revenue fair value adjustment, non-cash interest expense, cash interest on our Convertible Notes, amortization of acquired intangibles, non-cash compensation expense, restructuring charges and transaction costs, severance expense, litigation, regulatory and other governance related expenses, foreign currency, non-income tax expense adjustment, loss allocations from equity method investments and 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. For purposes of the adjusted net income per share calculation, we assume all potential shares to be issued in connection with our convertible notes are dilutive.
• "Free cash flow" represents net cash provided by (used in) operating activities less purchases of property and equipment and capitalization of internally developed software.
• These measures are not calculated in accordance with GAAP and may be calculated differently than similar non-GAAP measures for other companies. Quantitative reconciliations of our non-GAAP financial information to the most directly comparable GAAP information appear in the appendix to this presentation and more information is contained in our filings with the SEC which are available on the SEC's website at www.sec.gov or our Investor Relations website at https://investor.envestnet.com/. Reconciliations are not provided for guidance on such measures as we are unable to predict the amounts to be adjusted, such as the GAAP tax provision. Our non-GAAP financial measures should not be viewed as a substitute for revenue, net income (loss), net income (loss) per share or net cash provided by (used in) operating activities determined in accordance with GAAP.

Accounting Presentation

Certain prior period amounts have been adjusted to conform to the current period presentation, for a change in the composition of the Company's reportable segments and to correct an immaterial error. See "Note 2 - Summary of Significant Accounting Policies" to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2023.

© 2024 Envestnet, Inc. All rights reserved.

3

Envestnet at-a-Glance

MISSION

Our mission is to empower advisors and financial service providers with innovative technology, solutions and intelligence to power the growth of their business.

KEY FINANCIAL METRICS

	1Q24	1Q23	YoY
	Change(1)
Revenue (in $millions)	$325.0	$298.7	9%
Adjusted EBITDA(2) (in $millions)	$70.4	$54.0	30%
Adjusted Net Income per Diluted Share(2)	$0.60	$0.46	30%
Free Cash Flow(2)	$(19.9)	$(61.7)	68%

1. YoY change represents 1Q24 results vs. 1Q23 results for Adjusted Results.
2. Non-GAAPfinancial measure. See Non-GAAP Disclosure Statement and Appendix for definitions and reconciliations of non-GAAP measures.

STRATEGY

• Deliver the industry leading wealth management platform powered by data and insights
• Leverage our scale and maximize efficiency to serve our clients' needs comprehensively
• Provide more holistic solutions and a more connected environment

KEY BUSINESS METRICS

$6.0 trillion+	19.6 million+
client assets	number of accounts
109,000+	43 million+
number of advisors	total number of paying users
1,300+
total firms on Data & Analytics platforms

© 2024 Envestnet, Inc. All rights reserved.

4

Market Scale with Industry Leading Solutions

48 of 50

of the largest wealth

management and brokerage

firms

Metrics as of December 31, 2023.

$6.0

Trillion+

in assets

400

million+

linked consumer

accounts

500+

of the largest RIAs

19.6+

million

investor accounts

17 of 20

of the largest

U.S. Banks

19,000+

data sources

109,000+

advisors

700+

fintech companies

43 million+

paid users

© 2024 Envestnet, Inc. All rights reserved.

5

Secular Tailwinds Growth Opportunity

	Fee-Based Assets as a Percentage of				Organic Asset Growth Rates for the
		Total Advisor-Managed Assets						Managed Accounts Industry
						54.1%	54.6%				13%
					51.4%								10%
			48.3%	49.9%			7%	9%		8%	7%	8%
		46.7%								5%	6%
41.7%	43.3%
								2015	2016	2017	2018	2019	2020	2021	2022	2023
2015	2016	2017	2018	2019	2020	2021	2022
								2023 data excludes certain flows that Cerulli included in its industry figures for the first time in Q3 2023
		Source: Cerulli Associates, "U.S. Broker/Dealer Marketplace 2023"						Source: Cerulli Lodestar

	Wealth Management Firm Tech Expenditure		Percentage of Organizations Reporting an
	as a Percentage of Revenue (median)		Increase in Data and Analytics Investments
				3.69%	3.69%	3.73%	18%
	3.19%	3.23%	3.22%				Investment is increasing
3.10%
							Investment is not increasing
							82%
2015	2016	2017	2018	2019	2020	2021
	Source: InvestmentNews, "2022 InvestmentNews Adviser Technology Study"		Source: Wavestone, "2024 Data and AI Leadership Executive Survey"; survey of senior

executives at financial services (51%), healthcare/life sciences (15%), and other (34%) companies

© 2024 Envestnet, Inc. All rights reserved.

6

Enabling our Clients' Growth

Total Assets on Envestnet's Platform

vs. Advice Industry Fee-Based Assets Excluding Wirehouses ($T)

Industry				$11.9	$10.6	$12.1(1)	$12.8(1)
Envestnet			$9.3
			$7.9
		$6.5
$6.4		$4.6	$5.7	$5.1	$5.8	$6.1
			$3.8
		$2.8
$1.7
2017	2018	2019	2020	2021	2022	2023	YTD Q1 2024

Envestnet Metrics

Managed Acct Market Share(2)

AUM/A Net Flows ($B)

Platform Accounts

(M)

5.6%	5.7%	6.2%	6.5%	7.1%	7.4%	7.3%(3)	N/A
$59	$68	$60	$64	$89	$57	$59	$33
7.0	10.9	11.9	13.4	17.5	18.3	19.1	19.6

Industry data was sourced from Cerulli U.S. Broker/Dealer Marketplace 2023 and Cerulli Lodestar. (1) Represents an Envestnet estimate, given 2023 and Q1 2024 industry fee-based asset data are not available. (2) Calculated as Envestnet AUM divided by total managed account industry assets, excluding the wirehouse and direct channels; (3) In Q3 2023, Cerulli included certain assets in its industry managed account figures for the first time, which reduced Envestnet's calculated market share by 0.08%.

© 2024 Envestnet, Inc. All rights reserved.

7

Well Positioned for Industry Trends

Industry trends

The push to achieve	The demand for	Technology integration	Evolving practice
greater scale	personalization	& consolidation	management

Envestnet as an industry leader

•	Unmatched breadth &	•	Modern UMA chassis	•	Stronger platform	•	Vast array of analytics to
	depth of capabilities				connectivity, from		strengthen business
		•	Direct indexing 10-year		financial planning through		intelligence
•	Multi-channel leader		track record		execution
	across B-D and RIA					•	Pioneer in holistic
		•	Variety of capabilities	•	Next-gen proposal and		wealth management
•	Ultra-configurable with		including tax overlay,		new client portal
	scaled support and		high-net-worth consulting,
	compliance		and more	•	Custodial integrations

Proof points

• $6.0T+ of assets
• 19.6M+ accounts
• Top 3 in 13 different industry categories*

• AUM net inflows in 2022- 2023 were 4x that of #2 and #3 TAMPs combined

• Planning to execution, insights to proposal
• Envestnet | Tamarac to managed account opening

• Envestnet | MoneyGuide 17th consecutive year ranked #1 financial planning software*

*2024 T3 Advisor Software Survey

© 2024 Envestnet, Inc. All rights reserved.

8

Envestnet Key Metrics

ENDING ASSETS OVER TIME ($T)
$7.0
$6.0
$5.0
$4.0
$3.0
$2.0
$1.0
$0.0

ADVISOR COUNT OVER TIME
110,000
109,000
108,000
107,000
106,000
105,000
104,000
103,000
102,000
101,000
100,000

ENDING ACCOUNTS OVER TIME

20,000,100

18,000,100

16,000,100

14,000,100

12,000,100

10,000,100

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

© 2024 Envestnet, Inc. All rights reserved.

9

Wealth Solutions Revenue Trend

11% YoY

$229.2

$243.2

$257.9

$273.3

$277.1

$275.6

$261.4

$251.1

$260.6

$275.8

$279.2

$279.0

$289.8

$350.0

$300.0

$250.0

$200.0

$150.0

$100.0

$50.0

$0.0

KEY DRIVERS

	3.9	2.4	6.5	4.2			10.3	4.3	6.2	3.0	•	Market Performance
		3.2
	3.7			3.7					01
	3.6
3.0	73.5	72.0	77.1				79.7	81.0	84.2	84.2	•	AUM/A Net Flows
	70.1			80.1	81.0	80.5				02
	69.6
66.8											•	Net New Logos
										03

04• Account & Advisor growth

159.4	170.1	184.0	195.9	202.7	192.0	177.1	166.4	176.9	185.8	193.9	188.6	202.6

1Q21

2Q21

3Q21

4Q21

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

Wealth: Asset-based Revenue

Wealth: Subscription Revenue

Wealth: Professional Services

(in $millions)

© 2024 Envestnet, Inc. All rights reserved.

10