Envestnet, Inc

Thank you for standing by. This is the conference operator. Welcome to the InvestNet second quarter 2021 earnings conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Brian Shipman, Head of Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. Thank you for joining us on today's second quarter 2021 earnings call. Before we begin, I would like to point out that our earnings press release supplemental presentation and associated form 8K can be found under the Investor Relations section of our website at investnet.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, nor 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 addition, please refer to the appendix in our slide presentation for reconciliation of our non-GAAP measures to the most directly comparable GAAP measures, which is also posted to the InvestNet Investor Relations website. Joining me on today's call are Bill Krager, Investnet's Chief Executive Officer, and Pete DiRigo, the company's Chief Financial Officer. Bill and Pete will provide a company update as well as an overview of the company's second 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 may get back into the queue if you have additional questions. With that, I'll now turn the call over to Bill.

Thanks so much, Brian. It is good to speak with everyone today, and I'm excited to report our second quarter results. I will start by providing some highlights from the quarter. Our strong performance is a reflection of our market leadership where we serve more clients than ever before, and those clients are engaging with us in more ways given the breadth and essential relevance of our offering. I will also review our strategy and progress towards creating the most impactful and comprehensive financial wellness ecosystem of data, technology, and solutions that powers our industry. InvestNet achieves strong adjusted revenue growth of 23% in the quarter and 17% year to date. Our new guidance reflects the stronger than expected first half of the year as well as an improved outlook for the second half of 2021. This growth was enabled by our market-leading position and the scale we have achieved. And this is a market position we continue to expand. I believe this is important to note. Our position and ability to create scale creates unique leverage for InvestNet as we drive our strategic plan forward. The number of advisors on the InvestNet platform is now almost 108,000, with 14 million accounts that make up $5.2 trillion in assets. Our data aggregation business serves over 500 million aggregated accounts each day. Our money guide financial planning business continues to be the market leader in the industry, while InvestNet TAMP services also stands atop the podium as the market leader. We have the largest network of services, solutions, and third-party providers, and we continue to grow these options for our clients. New accounts are being opened at a faster pace, and we are averaging well more than 10,000 new accounts every week. We added several new customers during the second quarter, including notable firms such as Securian. as we also continue to add services to the firms we serve today. Our exchanges are activating more and more advisors. Financial planning continues to add exciting new features we've rolled out to our existing clients. And in our RIA business, we're seeing momentum adding managed accounts to a growing number of firms. While our footprint continues to grow, So do meaningful metrics such as assets per advisor, accounts per advisor, and adjusted revenue per advisor. We are operating at significant scale as well. During the second quarter, we serviced almost 50 million trades and completed 1.8 million service requests. We're also generating more than 8 million data-driven recommendations a day for our clients to better connect and better serve all of their clients. As we mentioned on Investor Day, we are on our way to 10 million recommendations a day by year end and over a billion a day by 2025. These proof points are unique to InvestNet's market position and enables us to advance our vision and pursue the growth strategy we have discussed on earlier calls. I believe these are very clear leading indicators, and as we continue to execute, the future for InvestNet is brighter than it's ever been. Over the past several months, we have laid out a straightforward and executable strategy, and we are driving progress towards enabling the ecosystem that powers our industry. No one has the strength of platform, user base, and leadership position that we have. And it is a significant differentiator, positioning Investnet to continue its leading position and drive the company towards achieving our mission and our stated financial goals. This scale, combined with our cloud-based infrastructure and unparalleled data and solution set, opens up the growing opportunity for us. We are making important progress in bringing the pieces together in a frictionless, intelligent, and connected ecosystem so that the advisor and the consumer sees a much clearer and much more powerful view of their money in one place, while at the same time, our customers have easier access to the entirety of our offering to help them serve their clients more completely. Our platform and ecosystem is the industry standard for how advisors engage digitally with their clients today, and it will be the standard for how they serve their clients into the future. Digital transformation is the most powerful of several macro trends we benefit from. And by capturing the lead here, we create a virtuous environment that opens more and more opportunity for our company. In addition to the digital transformation that is occurring, we continue to benefit from and also power several important industry trends. These include the growth of fee-based advice, the even faster growth of managed accounts, and the hypergrowth of personalization services like direct indexing, tax overlay, and impact investing. As you overlay these trends across the current business that we serve today, which is $5.2 trillion in assets. We believe we can increase our revenue by roughly 10 basis points, on average, on 10 to 15 percent of this asset base. This creates a significant and growing revenue opportunity, which, given our advanced market engagement strategy, we are increasingly identifying, engaging, and executing on. our opportunity will continue to grow given these macro trends, given our strong market position, and given the significant capabilities that we have. With that in mind, our leadership team has a laser-sharp focus on three key drivers of revenue growth. We will capture more of the existing addressable market by supercharging our platform to leverage our comprehensive data and solution sets. This opportunity is large and it is sitting directly in front of us. Next, we are leading and modernizing the digital engagement marketplace by extending our cloud-based migration, which allows us to connect the best of InvestNet for a truly seamless customer experience. And lastly, we are opening the platform for expansion. Our developer portal enables over 625 third-party fintechs to leverage APIs, embedding our capabilities and data into their environments. This usage has grown by 1,700 percent since the beginning of January 2020. At the same time, we are opening InvestNet's ecosystem for more third-party providers, all of which will drive users and engagement, ultimately accelerating our revenue growth and our opportunity. I want to double-click on capturing more of the existing addressable market and why we are very confident given the early progress that we're beginning to see. You see, we have a differentiated engagement strategy that is powered by the visibility and understanding we have given our data model. This prioritizes the use cases that target large, identifiable, addressable pools of opportunity for investment. which also deepen the relationships between advisors and their clients. We have the broadest number of solutions available to our advisors. Our data-driven recommendations drive increased adoption, and increased adoption and increased solutions provide more data to improve the recommendations that we make. We are accelerating growth, utilizing the data in the ecosystem and removing friction from the tasks required for advisors to use and access our solutions. And we are adding to our solutions. During the second quarter, we introduced several new products that continue to build out our offering to the advisor and ultimately to the individual consumer. We've been piloting the new client portal with several large customers and the early feedback has been incredibly positive. We also added services such as residential real estate to the credit exchange. In our recently launched Alternatives Exchange, which we launched in July, a collaboration between InvestNet, UBS, and iCapital deliver a curated set of alternative investments to InvestNet clients via an end-to-end digital platform. 2021 represents InvestNet charting the course for advancing a tremendous opportunity for our industry to better serve its consumers. We are a catalyst for this future, and this is a moment for us to apply our efforts on taking advantage of the position that we have and the strategy that we have created and the opportunity for sustained and accelerated growth. The InvestNet organization is locked in on executing on this. Let me turn the call over to Pete, who will take you through our financial results, and then I'll be back with some closing comments before taking your questions.