Delray Beach, FL, Aug. 22, 2025 (GLOBE NEWSWIRE) -- According to MarketsandMarkets™, the Open Banking Solutions Market size is expected to grow from USD 5.5 billion in 2023 to USD 11.7 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 16.0% during the forecast period. It is noticed that consumers increasingly prefer mobile apps for banking transactions that facilitate seamless fund transfers, bill payments, and account management, web portals that in the current era serve as comprehensive platforms ...

Core Viewpoint - Envestnet plans to sell its subsidiary Yodlee to private equity firm STG, allowing Envestnet to focus on its core wealth management offerings [1][4]. Group 1: Transaction Details - The sale of Yodlee is expected to close in the third quarter, pending customary closing conditions [2]. - STG specializes in investing in innovative software, data, and analytics firms, and Yodlee will be integrated into STG's global technology portfolio [2]. Group 2: Strategic Implications - STG's managing director, Marc Bala, stated that the partnership will enhance Yodlee's investment in product innovation, customer success, and long-term growth [3]. - Yodlee aims to focus on technological innovation and improved solutions for the financial sector with STG's support [3]. Group 3: Envestnet's Focus - Envestnet's CEO, Chris Todd, indicated that the transaction will enable the company to concentrate on its core offerings, including its wealth management platform [4]. - Envestnet retains access to Yodlee's data aggregation technology, which is essential for financial advisors [5]. Group 4: Company Background - Envestnet became a private company in November after being acquired by Bain Capital affiliates in a deal valued at approximately $4.5 billion [5]. - The company reported $6.5 trillion in platform assets, over 20 million accounts, and services more than 111,000 financial advisors [6]. - Envestnet is enhancing its wealth management solutions by investing in tax intelligence, trading flexibility, client engagement, and advisor productivity [6]. Group 5: Historical Context - Envestnet acquired Yodlee in 2015 for a cash and stock transaction valued at about $660 million [7].

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - The Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform in the next 30 days [3][4] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [4] Categories of Style Scores - **Value Score**: Focuses on identifying undervalued stocks using ratios like P/E, PEG, and Price/Sales [5] - **Growth Score**: Evaluates a company's financial health and future outlook based on earnings, sales, and cash flow [6] - **Momentum Score**: Assesses trends in stock price and earnings estimates to identify optimal buying times [7] - **VGM Score**: Combines the three Style Scores to highlight stocks with attractive value, growth potential, and momentum [8] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in building successful portfolios [9] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41%, significantly outperforming the S&P 500 [10] Stock Selection Strategy - To maximize returns, investors should target stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [12] - Stocks with lower ranks but high Style Scores may still pose risks if they have downward-trending earnings forecasts [13] Company Spotlight: Envestnet (ENV) - Envestnet, founded in 1999, is a leading provider of wealth management and financial systems [15] - ENV holds a Zacks Rank of 2 (Buy) and has a VGM Score of A, with a Momentum Style Score of B [16] - ENV's shares have increased by 0.3% over the past four weeks, and its earnings estimate for fiscal 2024 has been revised upward [16][17]

Core Viewpoint - Envestnet, Inc. (ENV) reported mixed third-quarter 2024 results, with earnings exceeding estimates while revenues fell short [1][2]. Financial Performance - Earnings per share were 70 cents, beating the Zacks Consensus Estimate by 2.9% and reflecting a 25% year-over-year increase [2]. - Total revenues amounted to $345.9 million, missing the consensus estimate by 1.2% but showing a 9.2% year-over-year growth [2]. - Asset-based recurring revenues reached $225 million, accounting for 65% of total revenues, and increased by 16% year-over-year [4]. - Subscription-based recurring revenues were $115.4 million, remaining flat compared to the same quarter in 2023, contributing 36% to total revenues [4]. - Professional services and other non-recurring revenues declined by 30% year-over-year to $5.6 million [4]. - Adjusted EBITDA rose by 23% year-over-year to $80.5 million, with an adjusted EBITDA margin of 23.3%, up 270 basis points [5]. Cash Flow and Debt - Cash and cash equivalents stood at $193.4 million, up from $122 million in the previous quarter [6]. - Total debt at the end of Q3 2024 was $892.5 million, unchanged from the previous quarter [6]. - Operating activities generated $95.4 million in cash, with capital expenditures of $767 thousand and adjusted free cash flow of $76.2 million [6]. Stock Performance - ENV's shares have increased by 67.2% over the past year, outperforming the industry and the Zacks S&P 500 composite, which grew by 35.1% and 33%, respectively [3].

Financial Performance - Envestnet reported a non-cash impairment charge to goodwill of $96.3 million due to a strategic shift in the Envestnet Data & Analytics segment as of June 30, 2024[108]. - The company recognized a $19.5 million non-cash gain from the deconsolidation of a private company's assets and liabilities effective April 1, 2024[109]. - Envestnet's asset-based recurring revenue has been steadily increasing since the three months ended March 31, 2023, following a downturn in 2022[113]. - The company incurred $14.2 million in write-offs of net capitalized internally developed software costs during the nine months ended September 30, 2024[110]. - Envestnet has experienced losses from operations in every quarter since December 31, 2021, except for September 30, 2023, March 31, 2024, and September 30, 2024[112]. - Net income attributable to Envestnet, Inc. for the three months ended September 30, 2024 was a loss of $1,661 thousand, compared to a profit of $7,091 thousand in the same period last year, representing a decline of 123%[126]. - Net loss attributable to Envestnet, Inc. was $78.3 million for the nine months ended September 30, 2024, compared to a net loss of $55.6 million in the same period of 2023, representing a 41% increase in loss[1]. - The total income (loss) from operations for the nine months ended September 30, 2024, was $(59,833), compared to $(25,768) for the same period in 2023, reflecting a decline in profitability[227]. Revenue and Growth - Total revenue for the three months ended September 30, 2024, was $345.9 million, a 9% increase from $316.8 million in the same period of 2023[127]. - Total recurring revenue for Envestnet Wealth Solutions was $307,697 thousand for the three months ended September 30, 2024, a 12% increase from $274,901 thousand in the same period last year[126]. - Total recurring revenue for the nine months ended September 30, 2024, was $997.9 million, a 10% increase from $903.6 million in the same period of 2023[1]. - Total AUM/A reached $495,995 million as of September 30, 2024, up from $430,846 million at the end of December 2023, reflecting a growth of 15.1%[123]. - Subscription conversions for the three months ended September 30, 2024 totaled $76.2 billion, including $13.6 billion in new client conversions[122]. - Asset-based recurring revenue increased by $31.1 million, or 16%, reaching $225.0 million, primarily due to an increase in asset values[128]. - Total AUM/A reached $1,006,448 million as of September 30, 2024, up from $846,847 million at the end of December 2023, marking an 18.8% increase[123]. Operating Expenses - Total operating expenses increased by $22.7 million, or 7%, totaling $338.9 million, driven by higher general and administrative expenses[127]. - Employee compensation decreased by $9.8 million, or 9%, to $103.5 million, mainly due to reductions in severance and payroll-related expenses[135]. - General and administrative expenses rose by $13.3 million, or 27%, primarily due to merger-related costs and other charges[137]. - Total operating expenses increased by $125.2 million, or 13%, for the nine months ended September 30, 2024, compared to the same period in 2023[1]. - Employee compensation decreased by $33.4 million, or 10%, for the nine months ended September 30, 2024, primarily due to reductions in severance and salaries[150]. Strategic Initiatives - The merger with Bain Capital Private Equity is expected to close in the fourth quarter of 2024, with shareholders approving the merger on September 24, 2024[107]. - Envestnet's strategic initiatives aim to reshape the organization and reduce future operating expenses, despite negatively impacting short-term results[114]. - The company has changed its reportable segments as of October 1, 2023, to better reflect its operational structure[119]. Cash Flow and Liquidity - Free cash flow for the three months ended September 30, 2024, was $123.343 million, a significant improvement from a negative free cash flow of $(15.626) million in the same period of 2023[224]. - Net cash provided by operating activities for the three months ended September 30, 2024, was $186.409 million, compared to $73.766 million for the same period in 2023, indicating a substantial increase of 152.5%[224]. - The company plans to actively manage cash balances to ensure liquidity requirements are met for both short and long-term operations[231]. - As of September 30, 2024, the Company had total cash and cash equivalents of $193.4 million, with no amounts outstanding under the Revolving Credit Facility and $500.0 million available to borrow[234]. Impairment and Non-Cash Charges - Goodwill impairment increased by $96.3 million, or 100%, for the nine months ended September 30, 2024, due to a non-cash impairment charge recognized in the Envestnet Data & Analytics segment[154]. - The company reported a goodwill impairment of $96.269 million for the nine months ended September 30, 2024, with no such impairment reported for the same period in 2023[222]. - Non-cash compensation expenses for the nine months ended September 30, 2024, totaled $53,204, compared to $58,141 for the same period in 2023, showing a decrease of approximately 8.3%[227][228].

Core Insights - Envestnet reported revenue of $345.95 million for Q3 2024, reflecting a 9.2% increase year-over-year, with EPS at $0.70 compared to $0.56 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $350.27 million, resulting in a surprise of -1.23%, while the EPS exceeded expectations by 2.94% [1] Financial Performance Metrics - Total Assets Under Management (AUM) stood at $773.49 billion, significantly below the average estimate of $965.45 billion [3] - Assets Under Administration (AUA) were reported at $398.08 billion, compared to the estimated $482.7 billion [3] - Recurring revenue from asset-based sources was $224.98 million, slightly below the average estimate of $225.33 million, marking a 16% year-over-year increase [3] - Total recurring revenue reached $340.38 million, compared to the average estimate of $344.03 million, representing a 10.2% year-over-year increase [3] - Professional services and other revenue amounted to $5.57 million, below the average estimate of $6.23 million, indicating a 30.5% year-over-year decline [3] - Subscription-based recurring revenue was $115.40 million, compared to the average estimate of $118.70 million, with a modest year-over-year increase of 0.4% [3] - Revenue from Envestnet Data & Analytics was $34.43 million, below the average estimate of $35.30 million, reflecting a 17.7% year-over-year decline [3] - Envestnet Wealth Solutions generated $311.52 million, slightly below the average estimate of $312.65 million, with a year-over-year increase of 13.3% [3] Stock Performance - Envestnet's shares have returned +0.4% over the past month, underperforming the Zacks S&P 500 composite's +3.2% change [4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [4]

Core Viewpoint - Envestnet reported quarterly earnings of $0.70 per share, exceeding the Zacks Consensus Estimate of $0.68, and showing an increase from $0.56 per share a year ago, indicating a positive earnings surprise of 2.94% [1] Financial Performance - The company achieved revenues of $345.95 million for the quarter ended September 2024, which was 1.23% below the Zacks Consensus Estimate, but up from $316.85 million in the same quarter last year [2] - Over the last four quarters, Envestnet has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Performance - Envestnet shares have increased approximately 27% since the beginning of the year, outperforming the S&P 500's gain of 24.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.73, with expected revenues of $359.43 million, and for the current fiscal year, the EPS estimate is $2.55 on revenues of $1.38 billion [7] - The outlook for the Financial Transaction Services industry, where Envestnet operates, is favorable, ranking in the top 31% of over 250 Zacks industries, suggesting potential for outperformance [8]

Revenue Performance - Total revenue for Q3 2024 increased by 9% to $345.9 million compared to $316.8 million in Q3 2023[3] - Total revenue for Q3 2024 was $345.9 million, an increase of 9.2% compared to $316.8 million in Q3 2023[19] - Total recurring revenue reached $340.4 million, up 10.2% from $308.8 million in the same quarter last year[19] - Total revenue for the three months ended September 30, 2024, was $345,949,000, compared to $311,523,000 in 2023, reflecting a year-over-year growth[26] - Total revenue for Envestnet, Inc. reached $1,019,172,000, with recurring revenue contributing $997,933,000, representing a significant portion of total revenue[27] Revenue Composition - Asset-based recurring revenue rose by 16%, accounting for 65% of total revenue in Q3 2024, up from 61% in Q3 2023[3] - Asset-based revenue increased to $225.0 million, a rise of 16.1% from $193.9 million in Q3 2023[19] - Subscription-based revenue slightly increased to $115.4 million, compared to $114.9 million in Q3 2023[19] - Envestnet's asset-based revenue for the nine months was $556,595,000, while subscription-based revenue was $346,977,000, indicating a balanced revenue model[30] Profitability Metrics - Adjusted EBITDA for Q3 2024 was $80.5 million, reflecting a 23% increase from $65.3 million in Q3 2023[6] - Adjusted net income increased by 27% to $46.5 million, or $0.70 per diluted share, compared to $36.6 million, or $0.56 per diluted share in Q3 2023[6] - Adjusted EBITDA for the nine months ended September 30, 2024, was $228,728,000, up from $175,378,000 in the same period of 2023, indicating a growth of around 30%[22] - The company reported an adjusted EBITDA of $228,728,000, indicating strong operational performance despite a loss from operations of $59,833,000[27] Cash Flow and Expenses - Free cash flow surged to $76.2 million in Q3 2024, up from $9.4 million in Q3 2023[6] - Total operating expenses increased by 7% to $338.9 million in Q3 2024, compared to $316.2 million in Q3 2023[4] - Operating expenses for Q3 2024 totaled $338.9 million, up from $316.2 million in Q3 2023, reflecting a 7.2% increase[19] - Total operating expenses amounted to $1,079,005,000, with employee compensation being the largest expense at $311,205,000[27] Net Income and Loss - Net loss for Q3 2024 was $1.7 million, compared to a net income of $5.1 million in Q3 2023[19] - The company reported a basic net loss per share of $0.03 for Q3 2024, down from earnings of $0.13 per share in Q3 2023[19] - Envestnet reported a net loss of $80,323,000 for the nine months ended September 30, 2024, compared to a net loss of $60,837,000 for the same period in 2023, reflecting an increase in losses of approximately 32%[21] - For the three months ended September 30, 2024, Envestnet reported a net loss of $1,661,000 compared to a net income of $5,056,000 for the same period in 2023[23] Assets and Liabilities - As of September 30, 2024, Envestnet had $193.4 million in cash and cash equivalents and $892.5 million in outstanding debt[6] - Total assets decreased to $1.83 billion from $1.88 billion in 2023[18] - Total liabilities remained relatively stable at $1.30 billion, compared to $1.30 billion in 2023[18] - Cash and cash equivalents at the end of the period increased to $193,356,000 from $43,211,000, reflecting a substantial increase of approximately 348%[21] Market and Client Metrics - As of September 30, 2024, Envestnet's Assets under Management (AUM) reached $510.453 billion, reflecting a significant increase from $416.001 billion as of December 31, 2023[31] - The company reported total AUM/A of $1,006.448 billion as of September 30, 2024, up from $846.847 billion at the end of 2023, indicating a growth of approximately 18.8%[33] - Envestnet onboarded $76.2 billion in total conversions during the three months ended September 30, 2024, including $13.6 billion in new client conversions[32] - The number of paid end-users on the Envestnet Data & Analytics platform increased to 45.2 thousand as of September 30, 2024, up from 42.3 thousand a year earlier[35] Strategic Developments - The company is pursuing a merger with affiliates of vehicles managed or advised by Bain Capital Private Equity, LP, which may impact future performance[16] - The company incurred merger-related costs of $9,021,000 during the three months ended September 30, 2024[26]

Core Insights - Envestnet has launched an Options Strategy Quantitative Portfolio (QP) aimed at addressing market volatility, tax risk, and liquidity risk associated with concentrated stock positions, providing advisors and clients with a solution to unwind these positions [1][2][3] Group 1: Product Features - The Options Strategy QP offers three options-based hedging solutions: Covered Calls, Protective Puts, and Collar Strategies, which help generate income and mitigate risks associated with concentrated stock holdings [3][6][8] - The strategy allows for customization based on individual investor needs, including desired downside protection and time horizon for projections [7][8] Group 2: Market Context - Investors often hold concentrated stock positions due to various reasons such as inheritance or company grants, which can expose them to significant losses if the stock underperforms [2] - The prolonged holding of concentrated positions can lead to increased tax liabilities, prompting many investors to delay selling [2] Group 3: Performance Metrics - Envestnet's suite of QPs has achieved an annual growth rate of 40% in accounts and advisors over the past three years, with over $12 billion in assets under management or administration as of Q2 2024 [9]

Core Insights - Envestnet, Inc. (ENV) has demonstrated strong stock performance, with a 53.3% increase over the past year, significantly outperforming the industry and the Zacks S&P 500 composite [1] Financial Performance - The Zacks Consensus Estimate for revenues is projected at $1.4 billion and $1.5 billion for 2024 and 2025, reflecting year-over-year increases of 10.6% and 10.2% respectively [2] - The consensus estimate for earnings per share is $2.6 for 2024, indicating a 20.3% year-over-year rise, and $3 per share for 2025, also suggesting a 20.3% growth [2] Growth Drivers - Envestnet's recurring revenues have shown consistent growth, with a 2.1% increase in 2023, following gains of 4.5% in 2022 and 20.2% in 2021, supported by asset-based and subscription-based business models [3] - The company employs a business-to-business-to-consumer approach, enabling clients in the financial services sector to utilize ENV's platform-based solutions [3] Technology and Infrastructure - ENV prioritizes technology development to enhance efficiency, competitiveness, and compliance, utilizing a three-tier architecture that includes a web-based user interface, an application tier, and an SQL Server database, which is expected to scale effectively [4] - The adoption of technology is anticipated to rise, driven by the demand for cost-effective client interactions, allowing ENV to provide investment advice and personalized wealth management services [5] Liquidity and Financial Health - As of the end of the second quarter of 2024, ENV's current ratio was 1.14, an improvement from 0.73 in the previous year, indicating a stronger ability to meet short-term obligations [6]