Envestnet Achieves Strong Revenue Growth Amid Financial Adjustments in Q3 2024

Envestnet

BERWYN, PAEnvestnet, Inc. (NYSE: ENV) reported a notable increase in revenue for the third quarter of 2024, reaching $345.9 million—a 9% rise from the previous year. This growth was largely driven by a 16% increase in asset-based recurring revenue, which now accounts for 65% of the company’s total revenue.

The quarter saw stable subscription-based recurring revenue, making up 33% of total revenue, while professional services and other non-recurring revenue decreased by 30%. Despite these fluctuations, Envestnet’s operating expenses rose by 7% to $338.9 million. Notably, direct expenses grew by 13%, whereas employee compensation decreased by 9%, reflecting 30% of total revenue compared to 36% last year.

Envestnet managed to improve its income from operations, reporting $7.0 million, up from $0.6 million in the same period last year. However, the company posted a net loss of $1.7 million, or $(0.03) per diluted share, contrasting with a net income of $7.1 million, or $0.13 per diluted share, in the third quarter of 2023.

The company’s adjusted EBITDA surged by 23% to $80.5 million, and adjusted net income rose 27% to $46.5 million, or $0.70 per diluted share. Additionally, free cash flow significantly increased to $76.2 million from $9.4 million in the previous year.

As of September 30, 2024, Envestnet held $193.4 million in cash and cash equivalents, with $892.5 million in outstanding debt. The debt includes $317.5 million in convertible notes maturing in 2025 and $575.0 million in notes maturing in 2027. The company’s $500.0 million revolving credit facility remains undrawn.

In terms of strategic initiatives, Envestnet reorganized its reportable segments to align with its operational structure and decision-making processes. The company also addressed and corrected minor clerical errors related to the classification of convertible notes and cloud-hosting arrangements, emphasizing their immaterial impact on past financial statements.

READ:  Carisma Therapeutics Reports Q3 2024 Results, Advances Clinical Programs

With these financial results and strategic adjustments, Envestnet continues to focus on strengthening its market position and optimizing operational efficiency.

For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.