Q3 2021 Envestnet Inc Earnings Call
[music].
Greetings and welcome to the investment third quarter 2021 earnings Conference call. At this time, all participants are in a listen only mode.
And answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Please note. This conference is being recorded I will now turn the conference over to your host Brian Shipman head of Investor Relations you may begin.
Thank you and good afternoon, everyone welcome to invest that's third quarter 2021 earnings call.
Before we begin I'd like to point out that our earnings press release supplemental presentation and associated form 8-K can be found under the Investor Relations section of our website at Investor <unk> Com.
This call is being webcast live and a replay will be available for one month on our website.
During the call we will be discussing certain forward looking information, which is not a guarantee of future performance.
Or are we obligated to update our commentary to reflect subsequent material developments.
Before we discuss our results I encourage you to review the cautionary statement on slides two and three for our customary disclosures.
Further information can be found in our regular SEC filings in.
In addition, please refer to the appendix in our slide presentation for a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures, which is also posted to the investor <unk> Investor Relations website.
Joining me on today's call are Bill Krager, Investnet, Chief Executive Officer, and Pete Darrigo, The company's Chief Financial Officer.
Bill and Pete will provide a company update as well as an overview of the company's third quarter 2021 results.
After our prepared remarks, we will open the call to questions.
During the Q&A. Please limit yourself to one question plus one follow up you.
You may get back into the queue. If you have additional questions.
With that I'll now turn the call over to Bill.
Thank you, Brian and thank you everyone for joining today invest net achieved strong adjusted revenue growth of 20% for the quarter and 18% year to date, our new guidance reflects an improved outlook for the full year 2021.
You'll hear more about our results from Pete following my opening comments.
Our commitment to our vision and strategy continues as we create the financial wellness ecosystem that enables the future of advice it makes possible and intelligent financial life.
There is excitement about what we're doing inside the company and in the marketplace.
We're driving innovation, we're threading technology into everything we do we are using data to elevate incredible insights to our clients and our partners. We are continuing to add to our industry leading marketplace of solutions.
You see investing that is differentiated from every other provider as a fully connected open architecture hyper personalized partner that is paving the way for the future of our industry.
We are executing on our roadmap and it is absolutely resonating with our clients.
We've previously shared our strategy with you and outlining the steps to accelerate growth.
My first.
Capturing more of the addressable market, we're already a market leader with five four trillion in platform assets, but we can deliver consistently higher revenue growth by deepening our relationships and offering new and better solutions to our over 108000 financial advisors.
And a growing roster of more than 625 fintech firms.
Secondly.
We're modernizing the digital engagement marketplace.
Invest NEC continues to innovate and implement meaningful enhancements to our cloud based API driven platform. This will improve user experience and create new opportunities for revenue growth.
And finally, establishing our open platform as the driver of the ecosystem there.
There are more connections to more developers and more firms continue to expand and vitalize our environment.
Over the past quarter, we saw an increase in participants across both our data business and our wealth business.
Investment is also capitalizing on a number of compelling trends that accelerate our progress.
Let's start with demand for technology and automation that is absolutely increasing across the board and this is all ages all generations from baby Boomers to Gen Z.
Another very important trend has to do with open banking.
Open banking Leverages technology to deliver consumer permission highly personalized services and solutions every fintech and financial institution will need open banking capabilities to compete in the future. We believe that Yodlee powers. The most advanced glue.
Mobile functionality for open banking this as an accelerating advantage for our clients and their consumers.
We also continue to benefit from the growth of fee based advice and even faster growth of managed accounts.
Outpacing the industry over the last five years investment.
M&A organic growth rate has exceeded the managed account industry, each and every year by approximately 500 basis points.
We're also seeing a meaningful growth a personalized services like direct indexing like impact investing and a heightened interest in tax services.
Last trend clearly data is incredibly valuable.
<unk> has assembled a significant dataset. We have also strategically built data solutions that bring insight and actionable intelligence, which is a unique and substantial advantage for our company. These trends create a remarkable opportunity for investment and we are well positioned to take <unk>.
Vantage of them.
We now have five four trillion dollars in assets across 108000 advisors and increase of $240 billion.
In assets over the last quarter.
We continue to see assets moving from AA to AUM.
We also continue to see new account opening accelerate.
We are now opening more than 20000 new accounts.
Every week.
We've also added several new large financial institutions over the quarter, which has helped us reach a total of $17 3 million accounts that we serve.
In addition, the average number of accounts per advisor on our platform grew 9% year over year advisors are serving more and more of their clients using our technology and our solutions.
And we're also leading in areas that are super important and they are growth drivers for our clients. Today. These are personalized services like direct index portfolios like sustainable investing strategies, which have grown by 86% year over year, showing the increasing focus on.
ESG and impact investing there's also tax management services and let me just spotlight our offering here.
We are using our rich internally generated data to identify advisers with accounts that would specifically benefit from our tax overlay offering 19, new firms 19, new firms have enabled tax overlay to their advisors and several hundred advisors use tax overlay for the first time.
Since June one this includes several new large enterprises using our tax services.
There are also emerging activities that are exciting.
Our embedded investing effort. This opens up access to our capabilities for millions of millions of additional consumers. These services are promising are making promising progress as we engage more deeply with our clients and a bevy of new prospects.
We are investing in our leading technology to connect the best of invest net enabling advisers to serve the entirety of their client's financial lives. There are many exciting developments, making their way to market.
In September we piloted our next generation proposal tool with over 100 clients of ours. The feedback has been overwhelmingly positive. The result of taking a customer focused approach and we're working with them to design, an even better technology solutions.
We continue to expand the industry, leading set of solutions, we provide powered by an integrated into our technology and data.
We recently announced a partnership with yield decks and yield acts as a fintech that offers cutting edge tools to advisors, helping them build more efficient fixed income portfolios.
This partnership complements the capabilities of investments insurance exchange by combining yield ex any invest net insurance exchange. Another really important steps that we're taking we are assembling the industry's leading marketplace of income and protection solutions.
We are creating these centralized source that enables advisors to offer the most comprehensive end to end solutions for income and protection, which is an essential need for retiring individuals.
There's real momentum in our efforts as they invest net insurance exchange recently surpassed $1 billion and insurance assets served.
You may have noticed invest that in the media. This past quarter. We recently launched a new campaign aimed at our industry with the tagline fully vested.
The initial response has been significant with a 10 fold increase in digital traffic validating our alignment with our clients and how they see the future of advice and how investment in powering it.
We are growing awareness of the solutions, we offer creating familiarity with our brand and setting the stage for future offerings.
As I stated at the beginning of this call invest net had a very strong quarter. We have made progress on our strategic roadmap. We are executing in all areas of our business and we are delivering strong financial results. Peter is going to provide more detail for you know I'll be back with some closing comments.
And take your questions following that.
Thank you Bill.
I'm going to review our third quarter results and then provide an update on our guidance for the fourth quarter and revised guidance for the full year.
Our third quarter results continued to demonstrate the strengths in our business model, we expect the momentum from the first nine months of the year to carry through the fourth quarter.
Adjusted revenues for the third quarter grew 20% to $303 million.
<unk> to the third quarter of last year.
Adjusted EBITDA was down 2% to $66 million compared to the third quarter of 2020.
Pacing, our expectations for the quarter and at the same time, reflecting the impact of our investment initiatives.
Adjusted earnings per share was <unk> 61.
Quickly on the balance sheet, we ended September with approximately $394 million in cash and debt of $860 million, our net leverage ratio at the end of September was one seven times EBITDA.
Turning to our investment initiatives I want to reiterate the expectations, we've set forth earlier in the year.
We continue to expect the investments to account for roughly $30 million of operating expense this year.
We are making good progress on the hiring front the impact of which is reflected in our third quarter results and our updated guidance.
We expect the impact of the investments to step up in the fourth quarter. We continue to expect the accelerated investments to annualize to a run rate of approximately $45 million in 2022 at which point they should be completely in our expense base.
And grow at the same rate of our operating expenses thereafter.
Additionally, we continue to expect sustainable faster organic revenue growth over the longer term as we create a better more streamlined ecosystem, which elevates our value proposition to existing clients and expands our total addressable market.
Now turning to our fourth quarter and full year outlook, you can find our complete guidance in the earnings release and in the earnings supplement but.
But to summarize for the fourth quarter, we expect adjusted revenues to be between 310, and $312 million up 17% to 18% compared to the fourth quarter of 2020.
Adjusted EBITDA to be between $54 $55 billion as we further ramp up the investments and EPS to be 49.
For the full year, we are again, raising our outlook to reflect the strength of the first nine months of the year and improved outlook for the fourth quarter.
We expect adjusted revenues to be between $1 billion $177 million and $1 billion $179 million.
Up approximately 18% compared to 2020.
Adjusted EBITDA to be between 259, and a half and $265 million.
Representing growth of 7% for the full year when the midpoint of our initial expectation for EBITDA was to be down around 5%.
EPS for the full year to be $2, 41, which is 40 cents higher than the midpoint of our original guidance back in February.
Adding some detail about our revenue outlook for the fourth quarter of the year highlight some of the drivers.
First our wealth business has performed well year to date net flows into assets under management and administration, excluding conversions in the first three quarters of the year were the highest in our history nearly double the flows from the first three quarters last year.
Further our significant asset base benefited from favorable capital market valuations, adding to our forecasted revenue growth.
Second our data and analytics segment has grown subscription revenue of around 4% in the first nine months of the year compared to the same period last year. We expect this business to see improving revenue growth in the fourth quarter.
As we continue to execute on our strategy in the coming years and benefit from the investments, we're making now we will capture more of the opportunities we've identified positioning us to attain our longer term targets of $2 billion of revenue and adjusted EBITDA margin expanding into the 25% range by 2025.
Thank you for your support of investment.
With that I'll turn it back to bill for his closing remarks.
Thank you Pete.
Our year to date results are strong and we intend to close out the year capitalizing on this momentum by leveraging our scale our technology, our market position and another incredible asset that we have investments people.
<unk> has a team of dedicated individuals who deeply understand the needs of our industry and the needs of our clients.
This team has leaned into our mission and leaned into the work we are doing to establish investment as the ecosystem that connects data technology and solutions to enable the intelligent financial life.
As the industry leader, we continue to innovate and drive the digital transformations that our clients want a.
Our strategy remains clear.
We will capture more of the addressable market opportunity with our data and solutions. We are modernizing the digital engagement marketplace and we are opening up our platform to accelerate future growth.
I am very pleased with the progress Investnet is making.
<unk> is differentiated from every other provider as a fully connected open architecture hyper personalized partner that is paving the way for the future of our industry.
We will continue to execute and we will create greater value for each and everyone of our company's stakeholders. Thank you for your support of investment we will now open it up to your questions.
Thank you and at this time, we will be conducting a question and answer session.
I can ask a question. Please press star one on your telephone keypad and confirmation tone will indicate your line is in the question queue.
You May press star two if you'd like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before Christmas Darkies.
One moment, please while we poll for questions.
And our first question comes from the line of Devin Ryan with JMP Securities. Please proceed with your question.
Great Good afternoon, Bill and Pete how are you.
Kevin how are you good to speak with you.
Doing very well at you as well.
I guess the first question I wanted to dig in a little bit around is the slide in the presentation, where you're just seeing tremendous momentum in uptake of the <unk>.
<unk> direct indexing as you highlighted 30000 advisors over that utilizing those.
Even if we assume that the number of advisers are using multiple.
Solutions here, so maybe some double counting.
It still seems you are at a meaningful kind of penetration.
Overall 108000 advisors connected to invest in that so I'm, just trying to think bigger picture and longer term.
What percentage of that 108000 I guess.
Access to the solutions today, and then how should we think about.
The potential penetration where that could go over time, just as you get more traction with the new products.
Thank you Devin and great question.
These are.
Today, we are serving $49 billion.
And the assets and the services and if you took a step back and you looked at the the growth areas of our industry.
They are about creating personalized portfolios.
Index type portfolios for individuals.
Our about enhancing the performance of those portfolios with additional services like tax overlay and they absolutely are.
From a trend standpoint, ESG and impact investing and so we're serving $49 billion in assets, which I think is substantial but ultimately will be a drop in the bucket for what I believe this.
Presents as an opportunity for investment.
Over the last quarter.
We introduced our tax for instance, we introduced our tax overlay solution to 19, new firms. Those are enterprises two of those would be very significant brand names that everybody. On this call is very familiar with so we are growing the distribution and availability of these solutions.
To more and more advisers the uptake from the number of advisors, who are engaged in these solutions is growing quarter over quarter and then from that you will see the asset growth really continued to to elk.
Elevate so we think we're making tremendous progress and it's early days for the opportunities here.
And again, if you take a step back you want to be in investments position to have the addressable market of five four trillion and then to have the depth of capabilities. In these solutions because they are going to grow and they're going to grow rapidly.
In the asset management arena over the next quarters.
Yes.
Terrific great color. Thanks, so much a real quick follow up here for Pete I appreciate the guidance as you always give.
For the fourth quarter I know, it's a little bit scientific but there is also.
Some assumptions that are in here I mean, the markets are up a lot quarter to eight 9% for the S&P 500 is there any.
Of that baked into the guide or is it all just based on kind of organic trends.
No. There is nothing in the guide the main driver of the asset base side of revenue is going to be the September 30 of asset values.
So the impact of the market so far quarter to date.
As.
We'll hit more impact.
Potentially assuming it holds and I'm not going to forecast that it holds but if it holds it would.
It would.
Yes.
Impact Q1.
Okay.
Exactly but there is still a small portion of higher markets that could impact <unk>, I guess, technically, but I guess youre, saying thats not.
Guys tend to not include that in the guide thats not in the non.
Not included typically not included and no difference from our from our usual presentation at this time.
Okay terrific just wanted to make sure thanks very much alright.
Alright, Thanks Devin.
Our next question comes from the line of Alex Kramm with UBS. Please proceed with your question.
Hey, good morning.
Hello.
Follow up to Devins question on the on the asset based solutions slide.
A little bit more technical maybe but I think last quarter you Didnt give the total numbers, but you gave them at the end of March.
Our presentations the number of advisers from 20 to 30000. The number of accounts went to $40 40280, 5000, So just want to make sure thats apples to apples because that seems to be a very big step up not only advisors, but the number of accounts. So just wondering if youre counting something differently now.
And then maybe related on the $49 billion in assets, what whats the pricing that you are capturing right now because I think it's supposed to be premium too.
So what's your what you're capturing elsewhere.
Yeah. Thanks, Alex So theres no change I mean.
The.
Data is presented in the same.
<unk> format as it was after that.
After that first quarter.
So there is no change we continue to add.
Significant business.
In these solutions.
Continue to have momentum and continue to find a conversion type of assets that will find their way into these programs.
It ranges per solutions, so our direct direct index portfolio will be.
Roughly 15 to 20 basis points.
Pending.
The index and what we're customizing on behalf of the client.
Overlay is 10 tax overlays 10 basis points and then the impact portfolio overlay is also 10 basis points.
So blended somewhere.
Inactions of 10 basis points I guess, you don't have a blended number for the quarter.
We haven't blended that number no.
Okay, and then just a quick one.
I don't know if I missed it but on the expense ramp.
You said $30 million by the end of the year, I think or still carefully.
Whereas the run rate right now.
As opposed to go to 45% next year.
Yes, so the we're ramping this quarter.
Into about the $12 million range $12 million to $15 million range.
That's what should go on.
In the first quarter of next year.
The difference there between the.
It's north of 15 here again as we as we bring more.
Individuals on for our cash spend.
It wouldn't affect our adjusted operating expenses next year, so as we've forecasted it again with the engineering folks where some of the salaries are capitalized as part of the internally developed software.
That piece again, so if this quarter is 12 to 15 hour.
Expect that the actual operating expense next year is somewhere in that 11% to 13 range in that kind of gets you right around 45.
So Alex will well beyond that.
$30 million the expectation that we set at the beginning of the year I believe we will spend this year and that will project to a run rate between $40 45 for next year.
I think it's important to note that.
The investments.
Our.
Accelerating our progress and our ability not only to deliver.
Enhanced product to the marketplace, but how we're going to market and.
And how we are raising visibility.
For investment, it's also about driving a step function.
In our capabilities.
With a key around personalization and how our efforts here are driving more and more personalization.
Into the platform. So while we serve five four trillion in assets. We can also.
Serve individuals and families in a very unique way and where we're doing that through technology and the way, we're able to engage not only advisors and firms, but their end consumers with technology, we're doing it in our solutions business again, if you look at the M&A market and valuations around.
Tax overlay of direct index or impact platforms.
We're leaned in in those areas and making material progress, which is all about personalization and then on the data side of the business is generating by year end will be $10 million recommendations that are providing individualized suggestions for every account that that's on our platform. So the investments are accelerating our ability to do that.
And distribute that more fully.
Great color thanks, guys.
Our next question comes from the line of Surinder <unk> with Jefferies. Please proceed with your question.
Alright surrender.
Pretty good yourself.
Very good good speaking with you.
Excellent.
I'd like to start a question also following up on some of the expenses.
I noticed there was a material step down in some of the restructuring costs that you guys. Typically have any color you can provide there is this kind of.
We're starting to see a trend down here versus what they've kind of been for the last couple of years at this point or how should we think about where you guys are on that part of the transformation journey.
Again that line and the reason, we think about it as more onetime or nonrecurring is that it's kind of unpredictable and sort of one off activity base. We just didn't have as much activity in the restructuring area last quarter as we have had in prior quarters.
And <unk> I think I think what youre seeing is that organizationally.
We've done a lot of work to bring the company together to integrate the parts of invest net.
We're doing that from a technology standpoint from a data standpoint, we've also done it from an organizational standpoint as part of that we eliminated some redundancies.
And include the path to be able to to bring the parts of the organization together, we're through that the organization is.
The way aligned the way we want it to be and now we're just adding talent into the organization and areas to push growth.
That's helpful and as a follow on.
There are some really nice some really strong growth organically.
<unk> segment.
Can you perhaps talk about.
Right.
A large percentage of that came from growth.
Existing advisors, adding assets versus you guys, adding new advisors to the platform.
Yes can you maybe talk about those two trends a little bit.
Absolutely.
<unk>.
It is both it's a combination of those things we had we've had an excellent quarter lots of activity.
Are you seeing.
Two efforts kind of play out here, one is how we're going deeper with our existing clients and introducing more and more to the full suite of solutions.
That investing that offers a couple of bullet points I cited the 19, new firms for tax overlay. We've had a large number of firms that have adopted it.
Impact direct indexing as well Youre also seeing our clients begin to adopt our fiduciary solutions, primarily in the USA and strategy investment strategist portfolio, so, they're utilizing our fiduciary or product infrastructure quite a bit we also.
Have seen.
Conversion activity.
We've been working on.
Financial institution conversions large firms, but also a very good number of smaller.
Type clients, who have brought assets in accounts.
Onto the platform. So again, a very solid quarter when we look at it from a distribution standpoint, the numbers look great.
The way that we're kind of engaging in the market and getting.
More and more.
Our footprint or or or shelf space for some of these important solutions is also really important to note and I think that just create.
Creates the case for for more penetration.
Focusing on going deeper as we highlighted at the beginning of the year.
Thank you and congratulations on the acceleration in organic growth.
Great. Thank you Sundar I appreciate that.
Our next question comes from the line of Peter Heckmann with D. A Davidson. Please proceed with your question.
Hey, good afternoon. Thanks for taking my question I was wondering can you give us an update on how youre feeling about the data segment and its ability to kind of continue to reaccelerate encouraging comments about the fourth quarter.
But do you think that business.
Upon the current opportunities that can get up to the high single digits, if not mid teens in growth rate here with some of the investments that youre, making.
Would you care to estimate the timing for that.
Yes.
Thank you I hope you're doing well.
It is encouraging.
This has been something that we've been talking to you about over the last several quarters.
With the headwinds in that business that we knew that we needed to address.
And begin to really restore.
The way that we were positioned in the market and the way that we were going to grow the top line. So a lot went into that Peter and part of that was to bring our professional services revenue down substantially so that the cost to leverage us <unk>.
Game.
Really frictionless.
The second one was to make it more easy to access our developer environment.
Year to date developer activity on our portal is up.
Significantly and we continue to see really good activity there.
We're seeing.
The restoration of growth in the analytics business, we believe that as we get through the year and into 'twenty, two and beyond our <unk> business. The financial institution business will also begin to to.
The gain more accelerated traction and then lastly, it's not a big story or a big part of the revenue mix at the moment, but we're very encouraged with the activity that we're seeing internationally.
<unk> is Scott.
A pretty significant footprint in the international market and a dynamic that we are recognizing is that the large U S. Based fintech want to become global companies and where the service provider that can help them.
To help them power that that distribution ambition of theirs. So.
No.
It's a meaningful.
Transition from where we were meaning we were flat.
We're beginning to build growth, we're beginning to see light at the end of the tunnel in a variety of areas for that business and I think as we get into 'twenty two and beyond.
You look at you look at high.
Single digits, and then beyond you look at our restoration back into the to the mid teens type growth for that business in the meantime, we're utilizing the yodlee asset to power. The wellness strategy. So as you connect People's Daily financial lives to their long term goals, we can fire more.
More recommendations because we have a full understanding of activity, where they want to go where they are today and where they want to get too.
And by doing that we just becomes such a competitively differentiated partner to advisors and.
And it's a powerful element of our strategy.
So overall.
The change of tone.
Is one of encouragement a lot more work to do.
We're not we're not where we need to be but we're making progress towards it.
That's that's really good to hear and then as it related question then just in terms of the insurance.
Credit exchanges are we starting to see some of that trickle through the numbers or are we still pretty early on those initiatives.
It's too early in the in the in the revenue numbers.
Really.
Have an impact that said the activity is beginning to.
Sure.
Become more meaningful so.
Let's start with the insurance exchange, which topped $1 billion to roughly $1 three.
In in assets over the last.
Quarter.
Over the last couple of weeks recently, we really cleared that milestone we have grown.
The number of contracts that we've underwritten on the insurance exchange by seven times. So far this year, we've grown the number of active advisers by 10 times this year.
We have.
And this isn't doubling while doubling the size of advisors and web access to the platform. So we're not only doing I think a very good job of finding more shelf space. We're also doing a much better job of activating.
And I am encouraged the credit exchange.
Also seeing similar.
Multiples in the in the assets that were.
Our lending on.
<unk> grown by about four times this year.
The number of advisers, who are live on the platform has grown by eight times and then there was a very significant client to turned the credit exchange on in the last quarter and the activity is kind of very meaningful. So so we're getting there a couple of quarters from now I can't wait to circle those numbers for you Peter.
Very good I'll look forward to the update.
Yes.
And our next question comes from the line of Ryan Bailey with Goldman Sachs. Please proceed with your question.
Hi, Bill Pete and Brian.
Hey, how are you.
Good thanks.
Pete you mentioned the progress on the hiring I was wondering if you could speak to whether you've seen any impact from inflationary pressures at all in terms of sort of new hiring an ulcer in your existing workforce essentially seen outside bids or anything like that.
Yes, well.
I mean, we were part of the market, but we are taking a very proactive approach to.
Our hiring and employee retention.
And.
We're mindful of what's going on in the marketplace.
We're looking to.
Make sure that we're competitive.
Bill May want to add a little thought on that yes, yes. Thanks, Brian.
We are part of the market so of course.
The labor market is strong as you know and in particularly if you think about the areas of investment operates in.
Our hiring is data individuals.
Modern.
API kind of technology engineers, and what I'd say modern asset management or fiduciary services individuals' those are.
All competitive areas.
We also have.
Highlighted this in the in my prepared comments.
Also.
Have an incredibly talented deep organization here, so first and foremost we want to make sure that we are addressing the people that are in the shop, because they are doing a tremendous job and I think we've done a done a good job Ryan.
Look at the numbers.
Year over year from a from a retention standpoint, and we're kind of right where we were in 2019.
Yeah.
In 2020 with regard to retention.
I think that's a good signal nobody went anywhere during the COVID-19 months in now.
Covid people are picking their heads up so we do a good job I believe from a compensation standpoint, we do a good job from a benefit and support standpoint, we do a good job from a company to work, but importantly, and I note. This because it really matters to me quite a bit is our.
Mission is what we're doing is too.
Really enhance the financial lives and help make peoples money more powerful and everyone has an emotional attachment to that and if we as we're successful at this people or people that are working here are moving the needle and so our mission is key and communicating that mission.
Is absolutely imperative and living that mission and delivering on it I think is so important.
And then we're making progress we're investing in this we're moving fast.
We are making progress against our roadmap that is frankly very exciting so our employees get fired up about that and then and then to recruit.
With that narrative is is an advantage we have.
Comp well, we have a great culture, but we have this purpose and mission and we're making progress against it.
That's a that's a card and thats.
A proposition that we have and it's something that hopefully you can tell I care a lot about.
Yes, Thank you and thank you for all the color.
And just as a quick reminder, if you have any questions you May press star one to join the Q&A session.
Next question is from the line of Michael Young with <unk> Securities. Please proceed with your question.
Hey, Michael.
Hey, Howard.
Are you.
Excellent how are you doing.
Doing well.
Wanted to just ask I know you guys arent talking a lot about next year, but just kind of more more high level, how you're thinking about managing the business you've got kind of the roadmap ahead of you revenue continue to sort of outperform expectations driven by market and maybe accelerated adoption does.
Does that mean that youre going to press harder on some of the initiatives to move faster and so we should think of kind of EBITDA and EBITDA progression as being similar despite revenue upside or should we think that more of that's going to drop to the bottom line just kind of trying to think through the puts and takes as you manage through that.
As we have some volatility around revenue over the next year or two.
Yes.
I think the expectation that we said is not going to change the investments that we're making.
But we are moving the needle and we're making the progress that we expect to make.
And throughout next year, we'll.
We'll roll into 'twenty, two with a full year of expenses that are on the books, but theyre going to normalize over time and to me the expectation that we set.
Is not something that we're going to modify.
At all we're focused on it we believe that it's appropriate we believe it helps provide the accelerated growth that we are very focused in on delivering and our confidence in delivering on that growth is something that.
As we make progress here, we feel we feel very good about.
So.
There will be no modification to the investment that we intend to make next year.
Okay. Thanks, that's helpful and then my.
Follow up question is just sort of as you go through some of these new products, maybe the <unk>.
Our portfolio is an overlay solutions are direct indexing I'm, just trying to think qualitatively around kind of the drivers since those are performing quite well and adoption is it just getting trial and kind of marketing time with with advisors and with the Companys turning those on or whats. What do you feel like you are kind of the key drivers that are supporting those those growth rates.
What should we be paying attention to to understand.
Progress from here through 2022.
Yes, it's a great question I think the macro trends are there right. So.
I keep on using the word I used it in my prepared remark hyper personalized solutions at scale.
So those are going to be a core theme and we're really well positioned to deliver because we have the fiduciary solutions impact overlay direct indexing other areas around planning, where we can get very we can craft for each and every family a strategy and a solution that meets their needs, but then.
We're using data.
Data really.
Understand.
Very well.
<unk> can recommend.
Personalization that that family.
He is looking for so those are the elements those are the ingredients now how do you introduce it how do you roll it out to the market I think there is a macro tailwind that is helping us.
But then what we're offering is very impressive right. So the team thats representing it.
The abilities, how their technology enabled how they're proven and then with an asset base with just shy of $50 billion.
We're not a startup we've been doing this for a long time and then lastly, what I would add is that we are.
The way that we're engaging is modernizing.
Noted in the prepared remarks around our marketing campaign, our marketing campaign is focused on an understanding of how we're delivering we're fully vested with our clients where it is so aligned and moving in.
In step in helping them step into the future.
We're also.
Delivering types of solutions that matter to our clients and so our marketing effort has generated tremendous awareness our statistics around the marketing has been really impressive.
The 10 times.
Kind of engagement that I noted, but there are other metrics there from a marketing standpoint, where the traffic on return traffic and asking for more and more information in the thousands of individuals I think is beginning to to grow the awareness of what investment is capable of and what we're doing in these areas, particularly.
<unk>.
And then lastly, modernizing the sales force.
So in the past.
Have your typical wholesaling environment and we have people in the field theyre getting back out on the road visiting with advisers, but we're supplementing that are complementing that with what I would say is a very modern approach our data insights are being surfaced on this team's desktops with suggest.
<unk> not for the advisor, but for the advisers clients and all of this supplemental marketing and engagement tools to help them go close the business and the numbers that we're experiencing.
The data early data we've been at that since June <unk>.
Force.
The data that supporting that effort I would say is very very promising.
Okay. Thank you for all the color Bill.
Yes, awesome good to speak with you.
And we have reached the end of the question and answer session I'll now turn the call over to Bill Gregory for closing remarks.
Thank you thanks, everybody for joining just want to thank you for joining today and for all your questions.
<unk>.
I also want to thank the investment team.
We're making tremendous progress here and it's exciting and there's very good energy behind it it doesn't happen without the incredible team that we have.
So thank you everybody I look forward to our next conversation.
You again and this ends the phone call.
And this concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
Okay.
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