Envestnet, Inc. reported significant financial developments in its latest 10-Q filing for the quarter ended September 30, 2024. The company achieved total revenue of $345.9 million for the three months, marking a 9% increase from $316.8 million in the same period of 2023. For the nine months ended September 30, 2024, total revenue reached $1.02 billion, up 10% from $928.0 million year-over-year. The growth was primarily driven by a 16% increase in asset-based revenue, which totaled $225.0 million for the quarter, compared to $193.9 million in the prior year.

Despite the revenue growth, Envestnet reported a net loss of $1.7 million for the third quarter, a stark contrast to the net income of $7.1 million recorded in the same quarter of 2023. For the nine-month period, the net loss increased to $80.3 million from $60.8 million in the previous year. The losses were attributed to rising operating expenses, which totaled $338.9 million for the quarter, up from $316.2 million in 2023, and $1.08 billion for the nine months, compared to $954.0 million in the prior year.

The company’s cash and cash equivalents rose significantly to $193.4 million as of September 30, 2024, compared to $91.4 million at the end of 2023. This increase was supported by a net cash provided by operating activities of $186.4 million for the nine months, a substantial rise from $73.8 million in the same period last year.

Strategically, Envestnet is undergoing a merger with BCPE Pequod Buyer, Inc., which was announced on July 11, 2024. The merger is expected to close in the fourth quarter of 2024, with shareholders approving the agreement on September 24, 2024. The merger agreement includes a termination fee of $90.65 million, which could impact future acquisition proposals if the merger does not proceed.

Additionally, the company has faced challenges, including a goodwill impairment charge of $96.3 million related to its Data & Analytics segment and a write-off of $14.2 million in capitalized internally developed software costs. Envestnet also implemented a reduction in force initiative, which contributed to a decrease in employee compensation expenses.

Overall, while Envestnet has shown revenue growth, it continues to navigate significant operational challenges and strategic transitions as it prepares for its upcoming merger.