Envestnet, Inc

Greetings and welcome to the InvestNet fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question 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. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Brian Shipman, head of investor relations. Please go ahead, sir.

Good afternoon, everyone. Thank you for joining us on today's fourth quarter and full year 2021 earnings call. Before we begin, I would like to point out that our earnings press release, supplemental presentation, and associated form 10K 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. This information is based on our current expectations and is not a guarantee of future performance. I encourage you to review the cautionary statement on slide two and three for potential risks, uncertainties, and other factors that could cause actual results to differ from those expressed by the forward-looking statements. Further information can be found in our regular SEC filings. During this call, we will be referring to certain non-GAAP financial measures. Please refer to our appendix in our presentation for reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. The presentation 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 Dorigo, the company's chief financial officer. Bill and Pete will provide a company update as well as an overview of the company's fourth quarter and full year 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 turn the call over to Bill.

Thank you, Brian. I want to thank everybody for joining us today. I'm excited to report our fourth quarter and 2021 full year results. Last year at this time, we introduced a strategy to deliver on a vision that InvestNet is uniquely positioned to achieve. We have a formidable market position and are tightly connecting our industry-leading capabilities, which is a distinct competitive advantage that InvestNet will leverage for sustained growth and profitability over the years ahead. We're executing on the plan we introduced last year, and the results we posted speak to the significant progress that we are making. I'd like to call out a few tangible achievements for 2021. First, we doubled our net asset flow in AUM&A to $54 billion excluding conversions as we began to focus on opportunities in our current account base. We also advanced digital connectivity to our clients, delivering 11 million insights a day that enable our advisors to take actionable steps based on their clients' unique needs. We also signed with 291 new firms, RIAs, banks, fintech companies, enterprises, and embedded environments, connecting them to the power of the InvestNet ecosystem. We made impressive progress last year, and as we look ahead, we are on track to deliver accelerated revenue growth and hit the $2 billion in revenue we forecasted by 2025. We're also on track to generate 1 billion insights a day for our network by 2026. And we're lastly on track to deliver a modernized, connected digital environment that uses data to scale a full range of financial wellness capabilities. Our guidance as we look ahead reflects the relevance of our strategy and the rigor and focus on execution that we've applied. The pieces are in place, we have strong momentum, and we're delivering. Pete will provide thoughts on 2022 in a moment. But as you know, we've been speaking about a growth strategy for the last several quarters, and I want to share with you how we're doing. First, we're capturing more of the addressable markets. With over 108,000 financial advisors that manage $5.7 trillion in assets on our platform, we've been focused on going deeper. Our process is powerful. We are able to pinpoint opportunities for advisors to introduce value-added services to their clients, and they are having success engaging with them. Here's what I mean by this. I mentioned earlier that we had doubled our net flows year over year. And within these net flows, the mix coming from assets under management was much higher last year, at 70% up from 49% the year prior. This was an intentional concerted effort for us. AUM flows typically generate higher fee rates for the higher value services that we provide and have a positive revenue growth benefit. Within AUM flows, Our personalized investing capabilities continue to grow at an accelerated clip, reaching $61 billion in total assets under management. This is happening across the board with these services. For instance, assets utilizing our overlay services grew by 57% last year. The number of advisors using direct indexing solutions expanded by more than 50%. and flows in our sustainable investing strategies doubled year over year. These early results are encouraging, but what's more important is that the structure and approach we have put in place is highly leverageable, and we believe will drive accelerated success in the quarters that lie ahead. Next, we've been focused on modernizing the digital engagement marketplace, providing our clients with a full set of market leading technology. 2022 is a year of execution for us. You see, we are moving from build mode to delivery mode on several key initiatives. We've already gotten started. Our next generation proposal tool is rolling out to our clients and today more than 1200 firms have access to it. This tool creates greater productivity for the advisor, while connecting them to the broader set of InvestNet solutions. We have developed a new best-in-class client portal, and the feedback from early users has been nothing short of extraordinary. We're beginning phased rollouts of this client portal this coming April. Also, InvestNet is driving scaled connectivity for our clients. Yodlee US Open Banking APIs went live mid-year last year, And in a very short time, we've enabled many of our largest clients to connect better with their clients. We're projecting by year end 2022, we will manage 80% of Yodlee data requests through these APIs. This modernizes the data offering, enables us to add value in new ways to these clients. And finally, the last pillar of our growth strategy. We're opening our platform to the ecosystem. The InvestNet marketplace is extremely valuable digital real estate, and by connecting more and more solution providers, we centralize and we concentrate industry experience and drive more benefits for our clients. Here's some examples. The Yodlee Developer Portal makes it easier for our fintech clients to onboard and integrate their solutions. Over the last two years, we have seen usage in this portal up over 80-fold. We launched last year API developer environments for both all of InvestNet and for MoneyGuide. Our clients are using these environments to customize their InvestNet experience, and importantly, third parties can directly connect their offerings to the ecosystem, resulting in more options for our clients. What's coming ahead is even more exciting. This year, we will combine all of our developer portals into a unified experience, creating a single entry point to the entirety of the InvestNet ecosystem. This breaks new ground for our industry and is a one of a kind for our marketplace. And then finally, we're growing the number of solutions on our platform. We continue to expand the choices that clients have. We've announced partnerships with UBS and iCapital for a full suite of alternative investments. We've partnered with Yieldex for greater fixed-income solutions, and we've partnered with Simon for commission-based annuity products as well as structured notes. Each of these builds upon the market-leading platform of solutions that InvestNet offers our clients. We're executing on our strategy, and by pulling the pieces of InvestNet together, we are aligning and enabling the future for our clients. One recently noting to me, you aren't just hitting the bullseye, you are in the exact center of the bullseye for us. This is great news and tremendous progress, but we are not taking our foot off the gas. I'm very excited about the year ahead for InvestNet. Let me highlight some of the capabilities that you will hear more and more about over the quarters ahead. Our data and analytics business is helping our clients more deeply engage the 30 million small business owners in the U.S. by building a powerful aggregated environment for SMBs to connect the disconnected parts of their business. This is a huge opportunity for our data business that we're very excited about. Our cloud-based data management solution aggregates, reconciles, enriches, and publishes data for our clients. It provides data insights and recommendations. It powers next-gen business intelligence and it fuels all of our network's technology capabilities. You will hear us talking more and more about this offering over the rest of this year. At the Advisor Summit, which we will be hosting in person this coming May, you will see how all of these parts come together into an exciting multidimensional experience for our marketplace, connecting from end consumer to the advisor, to the advisor's business, to the home office and enterprises, to the network of solution providers that our ecosystem offers, networking all of InvestNet and our partners into a fluid, leverageable engine that powers the future. And the future is the intelligent financial life. We're using our market position and our full range of capabilities to grow our footprint and serve our clients more deeply as we drive faster growth and ultimately drive more profitability for our business. Now let me hand it over to Pete, who will take you through our financial results and our outlook for 2022.