Executive Summary

Q1 2024 revenue was $325.0M (+9% YoY), GAAP diluted EPS $0.05, adjusted EPS $0.60, and adjusted EBITDA $70.4M with ~22% margin; asset-based revenue rose 15% YoY while subscription was flat and D&A declined 8% YoY .
Results landed near the top of Q1 guidance ranges and exceeded adjusted EBITDA/EPS guidance from February (Rev $320–$326M guided vs $325.0M actual; adj EBITDA $64–$69M vs $70.4M actual; adj EPS $0.52–$0.57 vs $0.60) .
Q2 2024 outlook: revenue $337–$345M, adjusted EBITDA $71–$75M, adjusted EPS $0.60–$0.65; management highlighted margin expansion and deleveraging (net leverage ~3.1x) as key near-term priorities .
Strategic drivers: $12.5B AUM net flows (12% annualized organic growth) and enterprise conversions boosted platform scale; headwinds were fee-rate mix from higher cash/AUA and D&A softness; free cash flow was -$19.9M, improving 68% YoY on seasonality .

What Went Well and What Went Wrong

What Went Well

Robust AUM net flows: “AUM net flows were $12.5 billion, an annualized organic asset growth rate of 12%” (Interim CEO) .
Margin expansion and guidance beat: “Adjusted EBITDA was $70 million…~350 bps of margin expansion vs Q1 2023; Adjusted EPS $0.60, above guidance” (Interim CEO) .
Operating efficiency: Employee compensation down 9% YoY; G&A down 4% YoY; operating leverage evident in lower manageable costs and improved FCF seasonality (CFO commentary and press release) .

What Went Wrong

Fee-rate pressure from mix: Higher reporting-only AUA and elevated cash balances lowered implied fee rates; management cited a $17B low-fee enterprise conversion and cash-heavy AUA mix as drivers (Q&A) .
Data & Analytics softness: D&A revenue fell 8% YoY in Q1, reflecting lingering banking/fintech headwinds; stabilization efforts underway (CFO remarks) .
Free cash flow negative: FCF was -$19.9M in Q1 (seasonal), though materially better YoY (68% improvement) (press release and CFO) .

Financial Results

Headline Metrics vs Prior Periods

Metric	Q1 2023	Q4 2023	Q1 2024
Revenue ($M)	$298.7	$317.6	$325.0
GAAP Diluted EPS	$(0.76)	$(3.35)	$0.05
Adjusted EBITDA ($M)	$54.0	$75.5	$70.4
Adjusted EPS	$0.46	$0.65	$0.60
Adjusted EBITDA Margin (%)	N/A	24%	~22%

Q1 2024 Results vs Company Guidance and Street Consensus

Metric	Prior Company Guidance (Q1 2024)	Actual (Q1 2024)	Variance
Revenue ($M)	$320.0 – $326.0	$325.0	Near high end
Adjusted EBITDA ($M)	$64.0 – $69.0	$70.4	Beat
Adjusted EPS	$0.52 – $0.57	$0.60	Beat
Street Consensus	Unavailable via S&P Global tool	—	S&P Global consensus unavailable (tool mapping)

Note: S&P Global consensus values were unavailable via tool; therefore estimate comparisons are not provided.

Segment Revenue Mix and YoY

Segment / Type	Q1 2023 ($K)	Q1 2024 ($K)	YoY %
Wealth Solutions – Asset-based	$176,932	$202,616	+15%
Wealth Solutions – Subscription	$80,470	$84,168	+5%
Data & Analytics – Subscription	$36,609	$33,294	-8%
Consolidated – Professional Services & Other	$4,696	$4,872	+4%
Total Revenue	$298,707	$324,950	+9%

KPIs and Platform Scale

KPI	Q1 2023 (Mar 31, 2023)	Q4 2023 (Dec 31, 2023)	Q1 2024 (Mar 31, 2024)
AUM ($B)	$363.244	$416.001	$452.464
AUA ($B)	$379.843	$430.846	$471.401
Total AUM/A ($B)	$743.087	$846.847	$923.865
Subscription Assets ($B)	$4,566.971	$4,959.514	$5,158.180
Total Platform Assets ($B)	$5,310.058	$5,806.361	$6,082.045
Total Advisors	106,454	108,670	109,076
Total Platform Accounts (M)	18.494	19.144	19.645
D&A Paying Users (M)	37.5	38.3	43.8
D&A Firms	1,310	1,324	1,323

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q2 2024	—	$337.0 – $345.0	Initiated
Adjusted EBITDA ($M)	Q2 2024	—	$71.0 – $75.0	Initiated
Adjusted EPS	Q2 2024	—	$0.60 – $0.65	Initiated
Revenue ($M)	Q1 2024	$320.0 – $326.0	Actual $325.0	Delivered above midpoint
Adjusted EBITDA ($M)	Q1 2024	$64.0 – $69.0	Actual $70.4	Beat
Adjusted EPS	Q1 2024	$0.52 – $0.57	Actual $0.60	Beat

Notes: Company does not forecast GAAP EPS due to unpredictable items (per 8-K). No formal guidance on OpEx, OI&E, or tax rate provided in Q1 release; normalized tax rate used in non-GAAP EPS is 25.5% .

Earnings Call Themes & Trends

Topic	Q3 2023 (Prior)	Q4 2023 (Prior)	Q1 2024 (Current)	Trend
Fee-rate mix and cash drag	Mix headwinds from cash/AUA noted; asset-based revenue growth but lower blended fee rate	Guidance framed with implied fee-rate deceleration; cash-heavy mix persisted	Q1 fee-rate pressure from $17B low-fee conversion and elevated AUA/cash; normalization expected as managed accounts migrate	Stabilizing once conversion completes
Custody integration (FNZ)	In development; highlighted as strategic	On track; timing into 2024	Launch targeted; economics 2–5 bps and multi-custody approach (FNZ + established)	Positive momentum
D&A stabilization	Banking turmoil impact; sequential improvement	Impairment taken; sequential Q4 uptick; stabilization plan	Q1 modest decline; subscription nearly flat QoQ; improving uptime/API; pipeline renewals	Gradual improvement
RIA pricing and bundling	Pricing actions in pipeline	Packaging tech with fiduciary solutions; linear margin path	Premium positioning in RIA; bundling analytics with Tamarac to drive cross-sell	Accretive over time
Flows and enterprise conversions	Positive net flows; vendor consolidation tailwinds	Strong Q4 inflows; expanded enterprise mandates	$32.7B total flows incl. $12.5B AUM; $29.8B client conversions in AUM/A; $31.1B subscription conversions	Strong

Management Commentary

“Q1 revenue was $325 million… Adjusted EBITDA was $70 million… Adjusted EPS for Q1 was $0.60… approximately 350 basis points of margin expansion versus Q1 2023.” – James Fox, Interim CEO .
“We delivered $12.5 billion of AUM net flows… usage of our proposal generation hit the highest levels… high net worth solutions, direct indexing and tax overlay have each seen year-over-year growth of more than 38%.” – Tom Sipp, EVP .
“We view the inflows… as a confirmation of our strategy… approximately $17 billion of Q1 inflows were related to a long-standing enterprise client… these low-fee assets appear as AUA flows and create a mix headwind.” – Josh Warren, CFO .
“Free cash flow for Q1 2024 was negative $20 million… reflecting seasonality and an improvement over the negative $62 million from Q1 2023.” – Josh Warren, CFO .

Q&A Highlights

Flows sustainability: Management emphasized structural inflows and enterprise wins; even adjusting for a large enterprise conversion, underlying momentum remains strong (largest flow quarter since 2015) .
Fee-rate declines: Driven by a $17B reporting-only conversion and mix shift into cash/AUA; fee-rate should improve as assets migrate to managed accounts next year .
RIA pricing: Premium pricing with bundled analytics; goal is deeper, holistic relationships that expand fiduciary solutions penetration over time .
Custody economics: Envestnet expects to retain 2–5 bps of custody economics; will offer FNZ plus other established options; phased rollout (banks/trusts and RIAs first) .
D&A outlook: Stabilization progressing with improved uptime/data quality; subscription revenue generally flat sequentially with a path to future growth via new products .

Estimates Context

S&P Global consensus estimates were unavailable via tool for ENV; therefore, comparisons to Street estimates are not provided.
Context: Company’s prior Q1 2024 guidance was Revenue $320–$326M, Adjusted EBITDA $64–$69M, Adjusted EPS $0.52–$0.57, and actuals were $325.0M, $70.4M, $0.60, respectively (beats on EBITDA/EPS; revenue near high end) .

Key Takeaways for Investors

Strong organic growth: $12.5B AUM net flows (12% annualized) with accelerating adoption of personalization (HNW, direct indexing, tax overlay) supports revenue growth and fee-rate recovery as conversions complete .
Margin trajectory intact: Q1 adjusted EBITDA margin ~22%; Q2 guide implies continued margin expansion toward multi-year targets, driven by cost discipline and scale .
Fee-rate mix is temporary: Low-fee reporting assets and cash-heavy AUA are weighing on rate; normalization as managed assets migrate and cash rebalances should be supportive into 2H .
D&A stabilization could inflect: Actions on uptime/API quality, renewals, and product innovation aim to move D&A back to growth; watch subscription trends and bookings .
Custody is an incremental P&L lever: Integrated custody workflows and economics (2–5 bps) can enhance subscription and fiduciary revenue and deepen client lock-in .
Q2 outlook constructive: Revenue $337–$345M, adj EPS $0.60–$0.65; execution on flows, pricing, and conversions are key near-term catalysts .
Balance sheet improving: Cash $61.2M, debt $892.5M; net leverage ~3.1x with continued deleveraging focus and undrawn $500M revolver optionality .

Appendix: Additional Data Tables

Balance Sheet and Liquidity (Snapshot)

Metric	Q1 2024
Cash & Equivalents ($M)	$61.2
Total Debt ($M)	$892.5 (2025: $317.5, 2027: $575.0)
Revolver ($M)	$500.0 undrawn

Asset Rollforward (Q1 2024)

Metric	As of 12/31/2023	Gross Sales	Redemptions	Net Flows	Market Impact	Reclassifications	As of 3/31/2024
AUM ($B)	$416.001	$32.127	$(19.601)	$12.526	$22.694	$1.243	$452.464
AUA ($B)	$430.846	$45.596	$(25.402)	$20.194	$22.683	$(2.322)	$471.401
Total AUM/A ($B)	$846.847	$77.723	$(45.003)	$32.720	$45.377	$(1.079)	$923.865

Non-GAAP Definitions

Adjusted EBITDA, adjusted net income/EPS, and free cash flow are defined in the 8-K; normalized tax rate used is 25.5% for non-GAAP EPS .

ENVESTNET, INC. (ENV)·Q1 2024 Earnings Summary