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Envestnet's (ENV) Q1 Earnings Beat Estimates, Improve Y/Y

Zacks Equity Research

Envestnet, Inc. ENV posted better-than-expected results for first-quarter 2020.

Quarterly adjusted EPS came in at 57 cents, beating the Zacks Consensus Estimate of 45 cents and increasing 46% year over year. Revenues of $246.5 million surpassed the consensus mark of $241.6 million and climbed 23% year over year.

Notably, Envestnet’s shares have gained 0.5%, over the past year, underperforming 12.3% growth of the industry it belongs to.

Quarterly Numbers in Detail

Adjusted revenues of $247 million jumped 24% year over year. Adjusted net revenues grew 22% to $178.4 million.

Asset-based recurring revenues of $134.8 million increased 24% year over year, representing 55% of total revenues. Subscription-based recurring revenues of $104.6 million were up 26% from the prior-year period, representing 42% of total revenues. Professional services and other non-recurring revenues decreased 6% year over year to $7.2 million.

Adjusted EBITDA came in at $54.6 million, up 61% year over year. Adjusted EBITDA margin expanded 512 basis points (bps) year over year to 22.3%.

Envestnet ended the first quarter with cash and cash equivalent balance of $68.6 million compared with the $82.5 million witnessed at the end of the prior quarter. The company generated around $9 million of cash from operating activities and CapEx was $2.2 million.

Outlook

For second-quarter 2020, Envestnet expects adjusted EPS to be 47 cents, above the current Zacks Consensus Estimate of 43 cents. Total revenues are estimated between $225.9 million and $227.4 million, the mid-point ($226.7 million) of which is below the consensus estimate of $228.6 million.

 Adjusted revenues are anticipated between $226 million and $227.5 million. Adjusted net revenues are projected at $165-$167 million. The company expects adjusted EBITDA in the band of $47.5 million to $48.5 million.

For 2020, adjusted EPS is expected between $1.92 and $ 2.02, the mid-point ($1.97) of which is much below the consensus mark of $2.04. Total revenues are anticipated between $939.5 million and $945.5 million, below the consensus estimate of $951.6 million.

The company expects adjusted revenues of $940-$946 million. Adjusted net revenues are projected at $678-$689 million. The company projects adjusted EBITDA of $200 million to $203 million.

Currently, Envestnet carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

S&P Global Inc. SPGI reported first-quarter 2020 adjusted earnings per share of $2.73, which beat the consensus mark by 15.7% and improved 29.4% year over year on revenue growth, benefits of productivity initiatives and reduced business travel.

IQVIA Holdings Inc. IQV delivered first-quarter 2020 adjusted earnings per share of $1.50, which outpaced the consensus mark by 1.4% but decreased 1.9% on a year-over-year basis. The reported figure was within the guided range of $1.46-$1.51

Insperity, Inc. NSP came up with first-quarter 2020 adjusted earnings of $1.70 per share, which surpassed the consensus mark by 5.6% but decreased 14.1% year over year. The reported figure matched the higher-end of the guided range of $1.61-$1.70.

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