Q3 2020 Envestnet Inc Earnings Call

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Closures related to non-GAAP financial information.

With that I will turn the call over to Bill.

Thank you Christopher.

And thank you everybody for joining us today.

I hope that you and your families have remain safe and healthy during these last months.

And also that maybe you had the chance to catch up on your sleep after that sleepless election night earlier this week.

Okay. We've invested in key parts of our business and we are attacking areas of opportunity investment has the scale the footprint the capabilities and the organization to continue to drive the future of financial advice.

We are the market leader, we are winning sure and we also are extending the solution that we offer to to the marketplace.

Yes, more customer needs.

This attracts more sellers to the ecosystem and more sellers drive more users connected to more consumers.

For consumers means more financially well people, who seek more services and products to meet their needs into the future.

How're you for them our clients for their customers, but it's also longterm value for investment.

We are seeing meaningful progress and advisers adopting are higher value fiduciary solutions on last quarter's earnings call. We highlighted success with our tax an impact overlay solutions are impact and ESG investment portfolios and our direct indexing products advisors continued adopting these solutions and.

Yeah.

We started the insurance exchange with a team of industry experts folks who sense the scope of opportunity insider ecosystem and utilize their expertise to leverage and accelerate disruptive advisor focus technology.

I got access to prequalified lending solutions.

These are just two examples of notable wins and R. F to drive meaningful longterm results from our exchange solutions with more to come and insurance and credit and advisor services and other exchanges that we have planned for the future.

We've spent most most of the year of much of the year aligning the organization to drive our strategy forward.

The envestnet team and I'm very much looking forward to the progress they will help us make.

The expenses associated with slower hiring medical marketing and travel.

For the full year EBITDA EBITDA margin and earnings per share. This year are meaningfully higher than we expected at the beginning of the year.

With revenue growth expected at 9% and EBITDA growth expected at 23% to 24%.

That level of margin expansion is beyond expectation expense.

Expense management and pandemic related circumstances have lowered expenses significantly and on sustainably for the long term.

This expense favorability gives us an opportunity to assess many elements of our business like our office footprint given our successful work from home transition and the need for travel at the levels, We did in 2019 and before.

Allocating some of that spending into the product technology engineering and organizational initiatives Bill mentioned.

Alright, and positive cashflow generation, we are comfortable that we have the liquidity and flexibility as we balance managing the business in the current environment with continuing to invest in growth opportunities both organically answer a strategic activities.

Thank you again for your support of investment. So at this point I will turn it back to bill for his closing remarks.

Thanks, so much <unk>.

The future of consumer financial services is it integrated experience that connects a person's daily financial lives to their longterm financial goals.

People access financial information and make decisions in new ways, yes, absolutely more digital engagement that's for sure, but also relying more and more unacceptable expert advice to guide them. We're seeing this play out during his covid disrupted period of time.

Investnet is best positioned and we are investing in capabilities and talents to make sure. We take advantage of this opportunity.

Anyways. The my blocks is on that is on the phones and on the desktop and very quick kind of exercises to to find answers two financial questions that individuals have and I know, we rolled out my blocks internally at Envestnet and found.

Tremendous usage of.

The tool and we're creating a sense of financial wellness within our employee base. We've also extended that.

Employer too.

Ah network of advisers, who are there to serve individuals as they graduate out of those self serve environment.

And again I think investment is uniquely positioned given the properties. We have data the planning technology network too solutions that we can deploy.

In more friction free types of ways to to a broader audience not just.

Financial institutions and their advisors, but also into this embedded finance category.

Okay. That's great caller Bill. Thank you Uhm and then just a follow up here on the growth of the exchanges an adoption. So clearly some very good momentum you kind of walk through.

Insurance exchange you know really stood out to me 7000 advisors to 27.

Thousand this quarter Uhm.

Can you give a little more perspective around the potential you know how how big could insurance be relative to the advisor basically obviously not all advisers may need the solution.

And maybe if you could touch on credit as well I'm just trying to think about for maybe a couple of exchanges that a little bit more developed kind of framing out kind of where where they could you end up here.

Yeah, I I mean.

Thank you for recognizing the progress that was made there during the third quarter and we really started to get the shelf space for the exchanges at the beginning of the year.

And if you I'm, sorry, and speaking a lot today.

But if if if you look at you know the <unk>.

Progress, we've been able to make during a covid period to have this many advisers begin to light up on the platform. It reveals to demand it reveals kind of a neat.

Need in the market to bring the pieces of financial advice together and our broker dealer clients alrighty clients are recognizing it. So so you are seeing that and the number of firms that are that are working with us and the number of advisers that attached to it also I think the da Davidson.

Data point is a very important one because they're a great client of ours. They they work with us.

With our with our core wealth platform that utilize are you on any of that utilize our separate accounts are utilizing our our trading tools that are advisors have those on the desktop now they're extending that out into insurance and not only that Devon.

They're transitioning their entire insurance book of business Commission and fee based onto the platform Y. So there begins to centralize it begins to integrate together well and insurance so when you're.