Envestnet, inc (ENV) Q3 2021 Earnings Call Transcript

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Envestnet, inc (ENV -2.56%)
Q3 2021 Earnings Call
Nov 8, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings. Welcome to the Envestnet Third 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. [Operator Instructions]

I will now turn the conference over to your host, Brian Shipman, Head of Investor Relations. You may begin.

Brian Shipman -- Head of Investor Relations

Thank you, and good afternoon, everyone. Welcome to Envestnet's third quarter 2021 earnings call. Before we begin, I'd like to point out that our earnings press release, supplemental presentation, and associated Form 8-K can be found under the Investor Relations section of our website at envestnet.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 2 and 3 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 a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures, which is also posted to the Envestnet Investor Relations website.

Joining me on today's call are Bill Crager, Envestnet's Chief Executive Officer; and Pete D'Arrigo, the Company's Chief Financial Officer. Bill and Pete will provide a Company update, as well as an overview of the Company's third 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.

William Crager -- Chief Executive Officer

Thank you, Brian, and thank you everyone for joining today. Envestnet achieved strong adjusted revenue growth of 20% for the quarter and 18% year-to-date. Our new guidance reflects an improved outlook for the full year 2021. You'll hear more about our results from Pete following my opening comments.

Our commitment to our vision and strategy continues as we create the financial wellness ecosystem that enables the future of advice and makes possible an intelligent financial life. There is excitement about what we're doing inside the Company, and in the marketplace. We are driving innovation. We are threading technology into everything we do. We are using data to elevate incredible insights to our clients and our partners. We are continuing to add to our industry-leading marketplace of solutions. You see, Envestnet is differentiated from every other provider as a fully connected, open architecture, hyper-personalized partner that is paving the way for the future of our industry. We are executing on our roadmap and it is absolutely resonating with our clients.

We previously shared our strategy with you and outlined the steps to accelerate growth by, first, capturing more of the addressable market. We're already a market leader with $5.4 trillion in platform assets, but we can deliver consistently higher revenue growth by deepening our relationships, and offering new and better solutions to our over 108,000 financial advisors and our growing roster of more than 625 fintech firms. Secondly, we are modernizing the digital engagement marketplace. Envestnet continues to innovate and implement meaningful enhancements to our cloud-based API-driven platform. This will improve user experience and create new opportunities for revenue growth. And finally, establishing our open platform as the driver of the ecosystem. There are more connections to more developers and more firms continue to expand and vitalize our environment. Over the past quarter, we saw an increase in participants across both our data business and our wealth business.

Envestnet is also capitalizing on a number of compelling trends that accelerate our progress. Let's start with demand for technology and automation that is absolutely increasing across the board, and this is all ages, all generations, from baby boomers to Gen Z. Another very important trend has to do with open banking. Open banking leverages technology to deliver consumer permissioned, highly personalized services and solutions. Every fintech and financial Institution will need open banking capabilities to compete in the future. We believe that Yodlee powers the most advanced global functionality for open banking. This is an accelerating advantage for our clients and their consumers.

We also continue to benefit from the growth of fee-based advice and the even faster growth of managed accounts. We are outpacing the industry. Over the last five years, Envestnet AUM/A organic growth rate has exceeded the managed account industry each and every year by approximately 500 basis points. We're also seeing a meaningful growth of personalized services like direct indexing, like impact investing, and a heightened interest in tax services. Loss trend, clearly data is incredibly valuable. Envestnet has assembled a significant dataset. We have also strategically built data solutions that bring insight and actionable intelligence, which is a unique and substantial advantage for our Company. These trends create a remarkable opportunity for Envestnet, and we are well positioned to take advantage of them.

We now have $5.4 trillion in assets across 108,000 advisors, an increase of $240 billion in assets over the last quarter. We continue to see assets moving from AUA to AUM. We also continue to see new account opening accelerate. We are now opening more than 20,000 new accounts every week. We've also added several new large financial institutions over the quarter, which has helped us reach a total of 17.3 million accounts that we serve. In addition, the average number of accounts per advisor on our platform grew 9% year-over-year. Advisors are serving more and more of their clients using our technology and our solutions.

We're also leading in areas that are super-important and they're growth drivers for our clients today. These are personalized services like direct index portfolios, like sustainable investing strategies, which have grown by 86% year-over-year showing the increasing focus on ESG and impact investing. There is also tax management services. And let me just spotlight our offering here. We are using our rich internally generated data to identify advisors with accounts that would specifically benefit from our tax overlay offering. 19 new firms have enabled tax overlay to their advisors, and several hundred advisors used tax overlay for the first time since June 1. This includes several new large enterprises using our tax services.

There are also emerging activities that are exciting like our embedded investing effort. This opens up access to our capabilities for millions of millions of additional consumers. These services are promising -- are making promising progress as we engage more deeply with our clients in a bevy of new prospects.

We are investing in our leading technology to connect the best of Envestnet, enabling advisors to serve the entirety of their clients' financial lives. There are many exciting developments making their way to market. In September, we piloted our next generation proposal tool with over 100 clients of ours. The feedback has been overwhelmingly positive. The result of taking a customer-focused approach and working with them to design an even better technology solution.

We continue to expand industry-leading set of solutions we provide powered by and integrated into our technology and data. We recently announced a partnership with YieldX. YieldX is a fintech that offers cutting-edge tools to advisors, helping them build more efficient fixed-income portfolios. This partnership complements the capabilities of Envestnet's Insurance Exchange. By combining YieldX and the Envestnet Insurance Exchange and other really important steps that we are taking, we are assembling the industry's leading marketplace of income and protection solutions. We are creating the centralized source that enables advisors to offer the most comprehensive end-to-end solutions for income and protection, which is an essential need for retiring individuals. There is real momentum in our efforts, as the Envestnet Insurance Exchange recently surpassed $1 billion in insurance assets served.

You may have noticed Envestnet in the media this past quarter. We recently launched a new campaign aimed at our industry with the tag line fully vested. The initial response has been significant with a tenfold increase in digital traffic, validating our alignment with our clients, and how they see the future of advice and how Envestnet is powering it. We are growing awareness of the solutions we offer, creating familiarity with our brand and setting the stage for future offerings.

As I stated at the beginning of this call, Envestnet had a very strong quarter. We have made progress on our strategic roadmap. We are executing in all areas of our business, and we are delivering strong financial results.

Pete is going to provide more detail for you now. I'll be back with some closing comments and take your questions following that.

Pete D'Arrigo -- Chief Financial Officer

Thank you, Bill. Today, I'm going to review our third quarter results and then provide an update on our guidance for the fourth quarter and revised guidance for the full year.

Our third quarter results continue to demonstrate the strengths in our business model. We expect the momentum from the first nine months of the year to carry through the fourth quarter. Adjusted revenues for the third quarter grew 20% to $303 million, compared to the third quarter of last year. Adjusted EBITDA was down 2% to $66 million, compared to the third quarter of 2020, outpacing our expectations for the quarter, and at the same time, reflecting the impact of our investment initiatives. Adjusted earnings per share was $0.61.

Quickly on the balance sheet, we ended September with approximately $394 million in cash, and debt of $860 million. Our net leverage ratio at the end of September was 1.7 times EBITDA.

Turning to our investment initiatives, I want to reiterate the expectations we've set forth earlier in the year. We continue to expect the investments to account for roughly $30 million of operating expense this year. We are making good progress on the hiring front, the impact of which is reflected in our third quarter results and our updated guidance. We expect the impact of the investments to step up in the fourth quarter. We continue to expect the accelerated investments to annualize to a run rate of approximately $45 million in 2022, at which point they should be completely in our expense base and grow at the same rate of our operating expenses thereafter. Additionally, we continue to expect sustainable faster organic revenue growth over the longer term as we create a better more streamlined ecosystem, which elevates our value proposition to existing clients and expands our total addressable market.

Now turning to our fourth quarter and full year outlook, you can find our complete guidance in the earnings release and in the earning supplement. But to summarize, for the fourth quarter, we expect adjusted revenues to be between $310 million and $312 million, up 17% to 18% compared to the fourth quarter of 2020. Adjusted EBITDA to be between $54 million and $55 million as we further ramp up the investments, and EPS to be $0.49.

For the full year, we are again raising our outlook to reflect the strength of the first nine months of the year and improved outlook for the fourth quarter. We expect adjusted revenues to be between $1,177 million and $1,179 million, up approximately 18% compared to 2020. Adjusted EBITDA to be between $259.5 million to $260.5 million, representing growth of 7% for the full year, when the midpoint of our initial expectation for EBITDA was to be down around 5%. EPS for the full year to be $2.41, which is $0.40 higher than the midpoint of our original guidance back in February.

Adding some detail about our revenue outlook to the fourth quarter of the year to highlight some of the drivers, first, our wealth business has performed well year-to-date. Net flows into assets under management and administration, excluding conversions in the first three quarters of the year were the highest in our history, nearly double the flows from the first three quarters last year. Further, our significant asset base benefited from favorable capital market valuations adding to our forecast of revenue growth. Second, our data and analytics segment has grown subscription revenue around 4% in the first nine months of the year, compared to the same period last year. We expect this business to see improving revenue growth in the fourth quarter.

As we continue to execute on our strategy in the coming years and benefit from the investments we're making now, we will capture more of the opportunities we've identified, positioning us to attain our longer-term targets of $2 billion of revenue, and adjusted EBITDA margin expanding into the 25% range by 2025.

Thank you for your support of Envestnet. With that, I'll turn it back to Bill for his closing remarks.

William Crager -- Chief Executive Officer

Thank you, Pete. Our year-to-date results are strong and we intend to close out the year capitalizing on this momentum by leveraging our scale, our technology, our market position, and another incredible asset that we have, Envestnet's people. Envestnet has a team of dedicated individuals who deeply understand the needs of our industry and the needs of our clients. This team is leaned into our mission and leaned into the work we are doing to establish Envestnet as the ecosystem that connects data, technology, and solutions to enable the intelligent financial life.

As the industry leader, we continue to innovate and drive the digital transformations that our clients want. Our strategy remains clear. We will capture more of the addressable market opportunity with our data and solutions. We are modernizing the digital engagement marketplace, and we are opening up our platform to accelerate future growth. I'm very pleased with the progress Envestnet is making. Envestnet is differentiated from every other provider as a fully connected, open architecture, hyper-personalized partner that is paving the way for the future of our industry. We will continue to execute, and we will create greater value for each and every one of our Company stakeholders.

Thank you for your support of Envestnet. We will now open it up to your questions.

Questions and Answers:

Operator

Thank you. And at this time, we'll be conducting a question-and-answer session. [Operator Instructions] And our first question comes from the line of Devin Ryan with JMP Securities. Please proceed with your questions.

Devin Ryan -- JMP Securities -- Analyst

Great. Good afternoon, Bill and Pete. How are you?

William Crager -- Chief Executive Officer

Devin, how are you? Good to speak with you.

Devin Ryan -- JMP Securities -- Analyst

Doing very well. You as well. I guess, the first question I want to dig in a little bit around is the slide in the presentation where you just seen tremendous momentum in uptake of the impact overlay and direct indexing as you highlighted in your 30,000 advisors over that -- utilizing those. Even if we assume that number of advisors who are using multiple solutions here, so there may be some double counting, it still seems you had a meaningful kind of penetration of the overall 108,000 advisors connected to Envestnet. So, I'm just trying to think the bigger picture and longer term. What percentage of that 108,000, I guess, have access to these solutions today? And then how should we think about the potential penetration where that could go over time just as you get more traction with the overall [Indecipherable]?

William Crager -- Chief Executive Officer

Thank you, Devin, and a great question. These are -- today we're serving $49 billion in assets in these services. And if you took a step back and you looked at the growth areas of our industry, they are about creating personalized portfolios, index-type portfolios for individuals. They are about enhancing the performance of those portfolios with additional services like tax overlay. And they absolutely are, from a trend standpoint, ESG and impact investing. And so, we're serving $49 billion in assets, which I think is substantial, but ultimately will be a drop in the bucket for what I believe this presents as an opportunity for Envestnet. Over the last quarter, we introduced our tax -- for instance, we introduced our tax overlay solution to 19 new firms, those are enterprises. Two of those would be very significant brand names that everybody on this call is very familiar with. So, we are growing the distribution and availability of these solutions to more and more advisors. The uptake from the number of advisors who are engaged in these solutions is growing quarter-over-quarter. And then from that, you will see the asset growth really continued to elevate. So, we think we're making tremendous progress, Devin. And it's early days for the opportunities here. And again, if you take a step back, you want to be in Envestnet's position to have the addressable market of $5.4 trillion, and then to have the depth of capabilities in these solutions because they are going to grow and they're going to grow rapidly in the asset management arena over the next quarters.

Devin Ryan -- JMP Securities -- Analyst

Terrific. Great color. Thanks so much. A real quick follow-up here for Pete. I appreciate the guidance as you always give. For the fourth quarter, I know it's a little bit scientific, but there's also some assumptions are in here, even the markets are up a lot, quarter-to-date you're 9% for the S&P 500. Is there any of that baked into the guide, or is it all just based on kind of organic trends?

Pete D'Arrigo -- Chief Financial Officer

No, there is nothing in the guide. The main driver of the asset-based side of revenue is going to be the September 30 asset values. So the impact of the market so far quarter-to-date is -- will hit more impact potentially assuming it holds, and I'm not going to forecast that it holds. But if it holds, it would impact Q1.

Devin Ryan -- JMP Securities -- Analyst

Right, exactly. But there is still a small portion of higher markets that could impact 4Q, I guess, technically. But I guess, you're saying that's not -- as you guys tend to not include that in the guide, that's not in the guide for the quarter?

Pete D'Arrigo -- Chief Financial Officer

That's not included -- typically not included, and no difference from our usual presentation this time.

Devin Ryan -- JMP Securities -- Analyst

Yeah. Okay, terrific. Just wanted to make sure. Thanks very much.

Pete D'Arrigo -- Chief Financial Officer

All right. Thanks, Devin.

Operator

And our next question comes from the line of Alex Kramm with UBS. Please proceed with your question.

William Crager -- Chief Executive Officer

Hey, Alex.

Alex Kramm -- UBS -- Analyst

Hey, hello. Follow-up to Devin's question on the asset-based solutions slides. A little bit more technical maybe, but I think last quarter you didn't give the total numbers, but you gave them at the end of March. So, if I compare your presentations, the number of advisors from 20,000 to 30,000, the number of accounts went from 40,000 to 285,000. So just want to make sure that's apples to apples because that seems to be a very big step up, not only advisors, but in the number of accounts. So just wondering if you're accounting something differently now. And then maybe related, on the $49 billion in assets, what's the pricing that you're capturing right now? Because I think it's supposed to be premium to what you're capturing elsewhere.

William Crager -- Chief Executive Officer

Yeah. Thanks, Alex. So there is no change. I mean the data is presented, that's been the same format as it was after that first quarter. So there is no change. We continue to add significant business in these solutions. Continue to have momentum, and continue to find a conversion type of assets that will find their way into these programs. It ranges per solution, so our direct index portfolio will be roughly 15 basis points to 20 basis points depending on the index and what we're customizing on behalf of the client. Overlay is 10 -- tax overlay 10 basis points, and then the impact portfolio overlay is also 10 basis points.

Alex Kramm -- UBS -- Analyst

So blended somewhere in excess of 10 basis points, I guess. You don't have a blended number for the quarter?

William Crager -- Chief Executive Officer

We haven't blended that number. No.

Alex Kramm -- UBS -- Analyst

Okay. And then just a quick one. I don't know if I missed it, but on the expense ramp, you said $30 million by the end of the year, I think or still catching with it. So where is the run rate right now that's supposed to go to $45 million next year?

Pete D'Arrigo -- Chief Financial Officer

Yeah. So the -- we're ramping this quarter into about $12 million range -- $12 million to $15 million range and that's what should go on in the first quarter of next year. And then the difference there between the -- if it's north of $15 million here, again as we bring more individuals on for our cash spend, it wouldn't affect our adjusted operating expenses next year. So, as we forecasted it -- again, with the engineering folks where some of the salaries are capitalized as part of the internally developed software, that piece again -- so if this quarter is $12 million to $15 million, I would expect that the actual operating expense next year is somewhere in that $11 million to $13 million range, and that kind of gets you right around $45 million.

William Crager -- Chief Executive Officer

So Alex, we'll be on that $30 million -- the expectation that we set in the beginning of the year, I believe we will spend this year and that will project to a run rate between $40 million and $45 million for next year. I think it's important to note that the investments are accelerating our progress and our ability not only to deliver enhanced product to the marketplace, but how we're going to market, and how we're raising visibility for Envestnet. It's also about driving a step function in our capabilities with the key around personalization and how our efforts here are driving more and more personalization into the platform. So while we serve $5.4 trillion in assets, we can also serve individuals and families in a very unique way, and we're doing that through technology in a way we're able to engage not only advisors and firms, but their end consumers with technology. We're doing it in our solutions business. Again, if you look at the M&A market and valuations around tax overlay or direct index or impact platforms, we're leaned in, in those areas and making material progress, which is all about personalization. And then on the data side of the business, it's generating. By year end, we'll be 10 million recommendations that are providing individualized suggestions for every account that's on our platform. So the investments are accelerating our ability to do that and distribute that more fully.

Alex Kramm -- UBS -- Analyst

Great color. Thanks, guys.

Operator

And our next question comes from the line of Surinder Thind with Jefferies. Please proceed with your question.

William Crager -- Chief Executive Officer

How are you, Surinder?

Surinder Thind -- Jefferies -- Analyst

Pretty good. [Indecipherable] guys.

William Crager -- Chief Executive Officer

Very good. Good to speaking with you.

Surinder Thind -- Jefferies -- Analyst

Excellent. I'd like to start a question also following up on some of the expenses. I noticed there was a material step down in some of the restructuring costs that you guys typically have. Any color you can provide there? Is this kind of -- we're starting to see a trend down here versus what they have kind of been for the last couple of years at this point? Or how should we think about where you guys are on that part of the transformation journey?

Pete D'Arrigo -- Chief Financial Officer

Yeah. You know, the -- again that line and the reason we think about it as more one-time or non-recurring is that it's kind of unpredictable and sort of one-off activity base. We just didn't have as much activity in the restructuring area last quarter as we have had in prior quarters.

William Crager -- Chief Executive Officer

And Surinder, I think what you're seeing is that organizationally we've done a lot of work to bring the Company together to integrate the parts of Envestnet. We're doing that from a technology standpoint, from a data standpoint. We've also done it from an organizational standpoint. As part of that, we eliminated some redundancies and included the path to be able to bring the parts of the organization together. We're through that. The organization is the way -- aligned the way we want it to be, and now we're just adding talent into the organization in areas to push growth.

Surinder Thind -- Jefferies -- Analyst

That's helpful. And as a follow-on, there were some really nice, some really strong growth organically on the AUM/A segment. Can you perhaps talk about -- a large percentage of that came from growth at existing advisors adding assets versus you guys adding new advisors to the platform?

William Crager -- Chief Executive Officer

Yeah.

Surinder Thind -- Jefferies -- Analyst

Can you maybe talk about those two trends a little bit?

William Crager -- Chief Executive Officer

Absolutely, Surinder. We -- it is both. It's a combination of those things. We had a -- we've had an excellent quarter, lots of activity. You're seeing two efforts kind of play out here. One is how we're going deeper with our existing clients and introducing more and more to the full suite of solutions that Envestnet offers. A couple of bullet points that I cited that, the 19 new firms for tax overlay. We've had a large number of firms that have adopted impact direct indexing as well. You're also seeing our RIA clients begin to adopt our fiduciary solutions, primarily in the UMA and strategy -- investment strategist portfolios. So they are utilizing our fiduciary or product infrastructure quite a bit. We also have seen conversion activity that we've been working on, financial institution conversions, large firms, but also a very good number of smaller and RIA type clients, who have brought assets and accounts on to the platform. So, again, a very solid quarter. When we look at it from a distribution standpoint, the numbers look great. The way that we're kind of engaging in the market and getting more and more footprint or shelf space for some of these important solutions is also really important to note, and I think that just creates a case for more penetration focused in on going deeper as we highlighted at the beginning of the year.

Surinder Thind -- Jefferies -- Analyst

Thank you, and congratulations on the acceleration in organic growth.

William Crager -- Chief Executive Officer

Great. Thank you, Surinder. Appreciate that.

Operator

Our next question comes from the line of Peter Heckmann with DA Davidson. Please proceed with your question.

Peter Heckmann -- DA Davidson -- Analyst

Hey, good afternoon, and thanks for taking my question. I was wondering, can you give us an update on how you're feeling about the data segment and its ability to kind of continue to reaccelerate? Encouraging comments about the fourth quarter. But do you think that business based upon the current opportunities that can get up to the high-single digits, if not mid-teens in growth rate here with some of the investments that you're making? And would you care to estimate the timing for that?

William Crager -- Chief Executive Officer

Yeah. Thank you. Hope you're doing well. It's encouraging. We -- this has been something that we've been talking to you about over the last several quarters with the headwinds in that business that we knew that we needed to address, and begin to really restore the way that we were positioned in the market and the way that we were going to grow the top line. So a lot went into that, Peter. And part of that was to bring our professional services revenue down substantially, so that the cost to leverage us became really frictionless. The second one was to make it more easy to access our developer environment. Year-to-date, developer activity on our portal is up significantly and we continue to see really good activity there. We're seeing a restoration of growth in the analytics business. We believe that as we get through the year and into '22 and beyond, our FI business, the Financial Institution business, will also begin to gain more accelerated traction. And then lastly, it's not a big story or a big part of the revenue mix at the moment, but we're very encouraged with the activity that we're seeing internationally. Yodlee has got a pretty significant footprint in the international market. And the dynamic that we're recognizing is that the large US-based fintechs want to become global companies, and we're the service provider that can help them power that distribution ambition of theirs. So it's a meaningful transition from where we were, meaning we were flat. We're beginning to build growth. We're beginning to see light at the end of the tunnel in a variety of areas for that business. And I think as we get into '22 and beyond, you look at high-single digits, and then beyond you look at restoration back into the mid-teens type growth for that business. In the meantime, we're utilizing the Yodlee asset to power the wellness strategy, so you connect people's daily financial lives to their long-term goals. We can fire more and more recommendations because we have a full understanding of activity, where they want to go, where they are today and where they want to get to. And by doing that, we just become such a competitively differentiated partner to advisors and it's a powerful element of our strategy. So overall, the change of tone is one of encouragement. A lot more work to do. We're not where we need to be, but we're making progress toward it.

Peter Heckmann -- DA Davidson -- Analyst

That's really good to hear. And then as a related question, just in terms of the insurance and credit exchanges, are we starting to see some of that trickle through the numbers? Or are we still pretty early on those initiatives?

William Crager -- Chief Executive Officer

It's too early in the revenue numbers to really have an impact. That said, the activity is beginning to become more meaningful. So, let's start with the insurance exchange, which topped $1 billion to roughly $1.3 billion in assets over the last quarter -- over the last couple of weeks recently. We really cleared that milestone. We have grown the number of contracts that we've underwritten on the insurance exchange by seven times so far this year. We've grown the number of active advisors by 10 times this year. We have -- and this is in doubling -- while doubling the size of advisors who have access to the platform. So we're not only doing, I think, a very good job of finding more shelf space, we're also doing a much better job of activating, and I'm encouraged. The credit exchange also is seeing similar multiples in the assets that we're lending on. It has grown by about four times this year. The number of advisors who are live on the platform has grown by eight times. And then there was a very significant client who turned the credit exchange on in the last quarter and the activity is kind of very meaningful. So we're getting there. A couple of quarters from now, I can't wait to circle those numbers for you, Peter.

Peter Heckmann -- DA Davidson -- Analyst

Okay, very good. I look forward to the update.

William Crager -- Chief Executive Officer

Yeah.

Operator

And our next question comes from the line of Ryan Bailey with Goldman Sachs. Please proceed with your question.

Ryan Bailey -- Goldman Sachs -- Analyst

Hi, Bill, Pete and Brian.

William Crager -- Chief Executive Officer

Hey, how are you?

Ryan Bailey -- Goldman Sachs -- Analyst

Pete, I had -- good, thanks. Pete, you mentioned progress on the hiring. I was wondering if you could speak to whether you've seen any impact from inflationary pressures at all, both in terms of sort of new hiring, and also in your existing workforce potentially seeing outside bids or anything like that?

Pete D'Arrigo -- Chief Financial Officer

Yeah, well, I mean, we are part of the market, but we are taking a very proactive approach to our hiring and employee retention. And we are mindful of what's going on in the marketplace. And we're looking to make sure that we are competitive. Bill may want to add a little thought on that.

William Crager -- Chief Executive Officer

Yeah. Thanks, Ryan. We are part of the market. So, of course, the labor market is strong as you know. And in particularly, if you think about the areas Envestnet operates in, what we are out hiring is data individuals, modern API kind of technology engineers. And what I'd say modern asset management or fiduciary services individuals. Those are all competitive areas. We also have -- I highlighted this in my prepared comments, we also have an incredibly talented deep organization here. So first and foremost, we want to make sure that we are addressing the people that are in the shop because they're doing a tremendous job. And I think we've done done a good job, Ryan. I look at the numbers year-over-year from a retention standpoint, and we're kind of right where we were in 2019 and 2020 with regard to retention. I think that's a good signal. Nobody went anywhere during the COVID months and now post-COVID people are picking their heads up. So, we do a good job, I believe, from a compensation standpoint. We do a good job from a benefit and support standpoint. We do a good job from a company to work. But importantly, and I note this because it really matters to me quite a bit, is our mission, is what we're doing is to really enhance the financial lives and help make people's money more powerful. And everyone has an emotional attachment to that. And if we -- as we're successful at this, people that are working here are moving the needle. And so, our mission is key and communicating that mission is absolutely imperative. And living that mission and delivering on it, I think, is so important. Then we're making progress. We're investing in this. We're moving fast. We are making progress against the roadmap that is frankly very exciting. So our employees get fired up about that. And then to recruit with that narrative is an advantage we have. We comp well. We have a great culture, but we have this purpose and mission and we're making progress against it. That's a card and that's a proposition that we have and it's something that hopefully you can tell, I care a lot about.

Ryan Bailey -- Goldman Sachs -- Analyst

Yeah. Thank you and thank you for all the color.

Operator

[Operator Instructions] And our next question is from the line of Michael Young with Truist Securities. Please proceed with your question.

William Crager -- Chief Executive Officer

Hey, Michael.

Michael Young -- Truist Securities -- Analyst

Hey, how are you?

William Crager -- Chief Executive Officer

Excellent. How are you doing?

Michael Young -- Truist Securities -- Analyst

Doing well. Wanted to just ask -- I know you guys aren't talking a lot about next year, but just kind of more high level, how you're thinking about managing the business? You've got kind of the roadmap ahead of you. Revenue continue to sort of outperform expectations driven by market and maybe accelerated adoption. Does that mean that you're going to press harder on some of the initiatives to move faster and so we should think of kind of EBITDA and EBITDA progression as being similar despite revenue upside? Or should we think that more of that's going to drop kind of to the bottom line? Just kind of trying to think through the puts and takes as you manage through that as we have some volatility around revenue over the next year or two.

William Crager -- Chief Executive Officer

Yeah. I think the expectation that we said is not going to change. The investments that we're making, we believe, are moving the needle and we're making the progress that we expect to make. And throughout next year, we'll roll into '22 with a full year of expenses that are on the books, but then they're going to normalize over time. And to me, the expectation that we've set is not something that we're going to modify at all. We're focused on it. We believe that it's appropriate. We believe it helps provide the accelerated growth that we're very focused in on delivering. And our confidence in delivering on that growth is something that as we make progress here, we feel very good about. So, I will -- there will be no modification to the investment that we intend to make next year.

Michael Young -- Truist Securities -- Analyst

Okay, thanks. That's helpful. And then my follow-up question is just sort of as you go through some of these new products, maybe the impact portfolios and overlay solutions or direct indexing, just trying to think qualitatively around kind of the drivers, and if those are performing quite well in adoption. Is it just getting trial and kind of marketing time with advisors and with the companies turning those on? Or what do you feel like are kind of the key drivers that are supporting those growth rates? And what should we kind of be paying attention to, to understand progress from here through 2022?

William Crager -- Chief Executive Officer

Yeah, it's a great question. I think the macro trends are there. Right? So these -- I keep on using the word, and I used it in my prepared remark, hyper-personalized solutions at scale. So those are going to be a core theme and we're really well positioned to deliver because we have the fiduciary solutions, impact overlay, direct indexing, other areas around planning where we can get very -- we can craft for each and every family a strategy and a solution that meets their needs. But then, we're using data -- data really understands people very well and can recommend the personalization that that family is looking for. So those are the elements. Those are the ingredients. Now, how do you introduce it? How do you roll it out to the market? I think there's a macro tailwind that is helping us. But then what we're offering is very impressive. Right? So the team that's representing it, the capabilities, how they're technology enabled, how they are proven. And then with an asset base of just shy of $50 billion, we're not a start up. We've been doing this for a long time. And then lastly, what I would add is that we are -- the way that we're engaging is modernizing. I noted in the prepared remarks around our marketing campaign. Our marketing campaign is focused on an understanding of how we're delivering. We are fully vested with our clients where it's so aligned and moving in-step and helping kind of them step into the future. But we're also delivering types of solutions that matter to our clients. And so, our marketing effort has generated tremendous awareness. Our statistics around the marketing have been really impressive, whether it's the 10 times kind of engagement that I noted. But there are other metrics there from a marketing standpoint with a traffic on return traffic and asking for more and more information in the thousands of individuals, I think, is beginning to grow the awareness of what Envestnet is capable of and what we're doing in these areas particularly. And then lastly, modernizing the sales force. So in the past, you'd have your typical wholesaling environment and we have people in the field, they're getting back out on the road, they're visiting with advisors, but we're supplementing that or complementing that with what I would say a very modern approach. Our data insights are being surfaced on the -- this team's desktops with suggestions, not for the advisor but for the advisors' clients and all this supplemental marketing and engagement tools to help them go close the business. And the numbers that we're experiencing, the data -- the early data we've been at that since June full force, the data that supporting that effort, I would say, is very, very promising.

Michael Young -- Truist Securities -- Analyst

Okay, thank you for all the color, Bill.

William Crager -- Chief Executive Officer

Yeah, awesome. Good to speak with you.

Operator

And we have reached the end of the question-and-answer session. And I'll now turn the call over to Bill Crager for closing remarks.

William Crager -- Chief Executive Officer

Thank you. Thanks everybody for joining. Just want to thank you for joining today and for all your questions. I also want to thank the investment team. We're making tremendous progress here, and it's exciting and there is very good energy behind it. It doesn't happen without the incredible team that we have. So thank you everybody. I look forward to our next conversation. Thank you, again, and this ends the phone call.

Operator

[Operator Closing Remarks]

Duration: 49 minutes

Call participants:

Brian Shipman -- Head of Investor Relations

William Crager -- Chief Executive Officer

Pete D'Arrigo -- Chief Financial Officer

Devin Ryan -- JMP Securities -- Analyst

Alex Kramm -- UBS -- Analyst

Surinder Thind -- Jefferies -- Analyst

Peter Heckmann -- DA Davidson -- Analyst

Ryan Bailey -- Goldman Sachs -- Analyst

Michael Young -- Truist Securities -- Analyst

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