Envestnet sees Q4 bump with surge in nonrecurring revenue

investmentnews.com:

Despite a hard year of ballooning losses and increased operating expenses, Envestnet managed to close out 2023 with a modest bump in its fourth-quarter revenue.

According to its latest earnings report, the fintech company posted $317.6 million in total revenue for the quarter ended December 31, an 8% increase over $292.9 million in the fourth quarter of 2022.

That three-month revenue record helped push the company’s annual earnings to $1.245 billion in 2023, practically unchanged from $1.24 billion the previous year.

Digging deeper into its financials, Envestnet saw a quarterly revenue pop, with professional services and other nonrecurring revenue streams increasing 115% between the fourth quarter of 2022 and the fourth quarter of 2023.

Its asset-based recurring revenue rose 13% in the fourth quarter of 2023. That income stream made up 59% of total revenue for Q4 2023, hardly changed from 57% in Q4 2022.

Meanwhile, subscription-based recurring revenue slipped, representing a 37% slice of total Q4 2023 revenue, slightly down from its 41% contribution to Envestnet’s Q4 2022 revenue.

The company’s latest reporting reflected an EPS of $0.65 per share for the fourth quarter, considerably up from $0.45 per share in the previous year. But looking at the expense side, the company reported its total operating expenses increased 55% year-on-year, from $319.4 million in the fourth quarter of 2022 to $496.3 million in Q4 2023.

That came as Envestnet navigated challenges on various fronts, including headwinds in the markets, a dispute with an activist investor, and struggles in its data and analytics business. As of December, the company was reportedly mulling the sale of Yodlee, a data aggregation platform it acquired in 2015.

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