Envestnet Earnings: Good Start to 2024 as Asset Flows and Margins Come in Strong

Envestnet reported solid first-quarter results. Revenue increased 9% to $325 million, driven by asset-based fees that benefited from net flows and market appreciation boosting asset levels. Subscription-based fees were roughly flat as growth in wealth solutions was largely offset by continued softness in the data and analytics (Yodlee) segment. Envestnet generated $70 million of adjusted EBITDA, which equates to about 350 basis points of margin expansion from the year-ago period as the firm works to control expenses. The firm reduced its headcount by 10% during 2023. As we incorporate this quarter’s results, we expect to increase our $52 fair value estimate by a single-digit percentage due to assets and operating margins coming in a tad bit above our expectations. We attribute the current share price being above our fair value estimate largely to media reports that Envestnet has received takeover interest from private equity firms.