Envestnet(US:ENV)2024-02-27 16:00Financial Performance - Total revenue for the year ended December 31, 2023, was $1.2 billion, derived from asset-based services, subscription or licensing-based services, and professional services [407]. - Total revenue for Envestnet, Inc. in 2023 was $1,245,620,000, a slight increase from $1,239,784,000 in 2022 [418]. - Asset-based revenue increased to $745,238,000 in 2023 from $738,228,000 in 2022, while subscription-based revenue decreased to $464,730,000 from $477,844,000 [418]. - The company reported a net loss attributable to Envestnet, Inc. of $238,724,000 in 2023, compared to a net loss of $80,939,000 in 2022 [420]. - Net loss for the year ended December 31, 2023, was $245.774 million, compared to a loss of $85.480 million in 2022 [430]. - Goodwill impairment expense for 2023 was $191,818,000, which was not present in 2022 [418]. - Total assets decreased to $1,877,252,000 in 2023 from $2,112,165,000 in 2022 [416]. - Total liabilities decreased slightly to $1,302,746,000 in 2023 from $1,344,561,000 in 2022 [416]. - Cash and cash equivalents decreased to $91,378,000 in 2023 from $162,173,000 in 2022 [416]. - The company's total stockholders' equity attributable to Envestnet, Inc. decreased to $568,191,000 in 2023 from $754,567,000 in 2022 [416]. - The company's operating expenses increased to $1,450,101,000 in 2023 from $1,305,808,000 in 2022 [418]. - Cash provided by operating activities increased to $154.868 million in 2023 from $98.355 million in 2022, reflecting improved operational efficiency [430]. Wealth Management Industry Insights - The wealth management industry in the U.S. has approximately $112 trillion in household financial assets as of September 30, 2023, with advisor-directed assets totaling $26.9 trillion in 2022 [34]. - The wealth management industry is expected to grow by 5% annually, with total net wealth in North America projected to exceed $200 trillion by 2027 [34]. - Managed account assets in the industry have grown organically at an 8% annualized rate from December 31, 2017, to September 30, 2023 [37]. - 47% of wealth clients preferred an investment professional that can holistically address financial needs, up from 29% in 2018 [36]. - The percentage of affluent investors willing to pay for advice increased from 53% in 2018 to 64% in 2023 [37]. Technology and Innovation - Envestnet's solutions include access to approximately 23,000 investment products, enhancing the capabilities of financial advisors [25]. - The company aims to expand its holistic financial wellness ecosystem to better serve clients through innovative technology and solutions [20]. - Envestnet delivered over 24 million insights per day to financial advisors, enhancing client experience and driving business efficiency [36]. - North American wealth management firms are expected to increase their technology budgets by 4.6% in 2023, with significant investment in front office technology [36]. - The company plans to continue investing in software, APIs, and integration points to enhance its technology offerings [36]. - The analytics layer of the company's platform includes real-time analytics and batch processing pipelines, utilizing proprietary AI and machine learning models for various business use cases [58]. - The company launched the SpendSignals product, providing insights on consumer spending and peer purchasing behavior to corporate and market research professionals [52]. - The company is focused on enhancing its technology offerings, including data aggregation and analytics capabilities, to better serve its clients [437]. Client and Advisor Engagement - Envestnet Wealth Solutions' platform assets reached approximately $5.8 trillion across over 19.1 million accounts managed by more than 108,000 advisors [23]. - Envestnet Data & Analytics serves over 1,300 clients, including 16 of the 20 largest U.S. banks, supporting more than 38 million paid end-users [32]. - Envestnet | MoneyGuide, the leading financial planning software, facilitated the creation or update of 2.4 million financial plans in 2023 [35]. - The company aims to enhance advisor activation and organic growth through improved marketing tools and cross-selling opportunities, focusing on maximizing revenue [66]. Workforce and Diversity - The company has a global workforce of approximately 3,100 employees, with a 10% reduction in headcount since December 31, 2022, resulting in $35.4 million in severance expenses for 2023 [78]. - The company's workforce diversity includes approximately 55% Asians, 34% Whites, and 37% self-identified females as of December 31, 2023 [79]. - The global employee engagement survey conducted in 2023 had an 82% response rate, indicating strong employee participation [84]. - In 2023, approximately 4,000 employer-paid volunteer hours were used by employees to support local charity initiatives [83]. - The Delegates Program for professional development had 13 employees complete it in 2023, aimed at developing future leaders [81]. Financial Controls and Reporting - The company maintains effective internal control over financial reporting as of December 31, 2023, according to the independent auditor's opinion [400]. - The company maintains a comprehensive business continuity plan and undergoes annual SSAE 16 SOC 2 Type II audits to validate internal controls [54]. Market Trends - The Open Banking market is projected to grow from $25 billion in 2023 to $135 billion by 2030, at a CAGR of 27% [39]. - The alternative data market is forecast to reach $136 billion in 2030, up from $7 billion in 2023, implying a 52% CAGR [39].