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Greetings and welcome to the Envestnet, 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. [Operator Instruction] 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 10-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. 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 Slides 2 and 3 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 a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. The presentation 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 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. We 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 Envestnet is uniquely positioned to achieve. We have a formidable [Indiscernible] and are tightly connecting our industry-leading capabilities, which is a distinct competitive advantage that Envestnet 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 advisers 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 Envestnet 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 at 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 market with over a 108 thousand financial advisers that manage $5.7 trillion in assets on our platform, we've been focused on going deeper. Our process is powerful.
We're able to pinpoint opportunities for advisers to introduce value-added services to their clients and they are having success engaging with them. Here is 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 are 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 advisers 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 we'll 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 adviser while connecting them to the broader set of investment 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 Envestnet is driving scaled connectivity for our clients.
Yield the U.S. open banking API's went live midyear 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 [Indiscernible] data request through these API's. 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 are opening our platform to the ecosystem. Envestnet marketplace is extremely valuable digital real estate. And by connecting more and more solution providers, we centralized 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 Envestnet and for MoneyGuide.
Our clients are using these environments to customize their Envestnet 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 Envestnet 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 YieldX for greater fixed income solutions. And we 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 Envestnet offers our clients. We are executing on our strategy, and by pulling the pieces of Envestnet together, we are lining and enabling the future for our clients.
One recently noting to me, you aren't just hitting the bulls-eye, you and the exact center of the bulls-eye for us. This is great news and tremendous progress, but we're not taking our foot off the gas. I'm very excited about the year ahead for Envestnet. 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 engaged to 30 million small business owners in the U.S. by building a powerful, aggregated environment for SMB 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 from recommendation, it powers next-gen business intelligence and it fueled all of our networks, technology, capabilities, you'll 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 multi-dimensional experience for our marketplace, connecting from end-consumer to the adviser, to the advisor’s business, to the home office and enterprises. to the network of solution providers that our ecosystem offers, networking, all of Envestnet 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.
Thank you, Bill. And good afternoon, everyone. Our fourth-quarter results continue to demonstrate the strength in our business model. We expect the momentum from the last few months of 2021 to carry through into 2022. Adjusted revenues for the fourth quarter of 2021 grew 21% to $320 million compared to the fourth quarter of 2020. Adjusted EBITDA was $56 million slightly ahead of our guidance range. And this reflects the expected progression of investments we announced last February. Adjusted earnings per share for the quarter was $0.50. Our complete guidance is laid out in the earnings release and in the earnings supplemental presentation, but I want to highlight a couple of items. In 2022, we expect adjusted revenues to be between $1.360 billion and $1.385 billion up approximately 15% to 17% compared to 2021. Adjusted EBITDA is expected to be between $270 million and $280 million.
Consistent with our past practice, our guidance is based on asset levels as of year-end 2021. Most sell-side analysts, current published estimates include contribution to revenue and EBITDA as a result of market appreciation. For clarity on a like-for-like basis, our guidance is in line with consensus. Adding some detail about our revenue outlook for 2022. First, our wealth business performed well in 2021. As Bill mentioned, record net flows during the year are as substantial driver of organic growth. And the revenue from these assets will contribute a full-year benefit in 2022. Second, our subscription business continues to grow steadily in both segments, with accelerating recurring revenue growth in the data and analytics segment from around 2% in 2021 into the high single digits in 2022. For expenses, pandemic-related circumstances, again, suppressed our 2021 adjusted operating expenses, which we believe is unsustainable longer-term. around $15 million to $20 million of operating expense favorability compared to pre -pandemic levels can be attributed solely to an operating environment that limited travel, in-person advisor and client support, and other activities.
This is important context as we consider our outlook for 2022, we are actively managing our expenses as we're moving into the second year of our accelerated investment initiatives. Among the areas on which we are focused, our first, what I would call normal expense growth to support the needs of the business today, including supporting additional customer activity as the business grows. Second, partial restoration of normal spending levels that we experienced prior to the pandemic for certain items. In this category, we've assumed a broad resumption of business activity over the course of 2022, but still at levels below where they were in 2019, including, for example, the return of an in-person Advisor Summit. Finally, we continue to anticipate the accelerated investments announced last year to have a full year impact of $45 million to $50 million. As we have discussed on the past several earnings calls, which will affect adjusted operating expenses by $15 million to $20 million year-over-year.
These expenses are primarily what is driving the progress Bill mentioned, and laying the foundation for extended revenue growth and profitability. In the first quarter, we expect to have the full amount incorporated into our expense structure and this will be the low point for our EBITDA margin. We expect sequential quarterly EBITDA growth and margin as we turn the quarter in 2022, accelerating into 2023. As we move through 2022, these components will become less separable, becoming the core of our expense base. We are focused on maintaining reasonable expense growth relative to our revenue growth going forward. Briefly on the balance sheet, we ended December with approximately $430 million in cash and debt of $850 million, making our net leverage ratio at the end of December about 1.6 times EBITDA. Thank you again for your support of Envestnet. And Bill has some closing remarks.
Thank you, Pete. We have clearly made a lot of progress, and we are enthusiastic about where it is leading. We're enthusiastic about what our work means for our clients and for our business. The work we have done is important and exceptional, and will have a meaningful impact in the quarters ahead. But today is a day where I think all of us are struck by the uncertainty of our world. Today is another reminder that live shifts in disruptive ways. Stasis cannot be the assumed state. Conditions change. On some days, for unimaginable reasons, the risks flash brighter, and glare may compromise how you see opportunity. I would think many of you are feeling some sense of this today. And so we're millions and millions of others who now suddenly have a deeper sense of insecurity. In a meaningful way, this connects to the work we do and the purpose that drives us. Insecurity is felt when things happen outside people's control. One of those things should not be the money that people have.
Our work is breaking down the walls of a person's financial life, creating greater clarity, much greater control, and in the end, yielding far greater value from the money that they have. This drives a stronger sense of personal security and enables people to better weather the uncertainty that the world will inevitably cause. It doesn't solve the things outside of people's control. But the work that we do helps our clients put more within a person's grasp that is valuable and it is essential. We're focused on delivering this to more and more people. The Envestnet team, this is the purpose that drives us. It is important value for our clients, it drives important value and security for their clients and it creates increasing value for our shareholders. Our thoughts and prayers today are with the people of Ukraine. I will now turn the call back to Hector, who will moderate your questions. Hector?
Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions]. One moment, please while we pull for questions. Our first question comes from Devin Ryan with JMP Securities. Please proceed with your question.
Great. Good afternoon. Bill and Pete, how are you?
Good, Devin. How are you doing? Looking forward to seeing you.
I'm doing -- You as well. I'm doing great. I guess, since I'm first in the queue here, And I'm sure this will come up, I'm not sure if you guys can shed any light or perspective on some of the recent press articles just around private equity interest in the firm and potential, I guess, process that's underway. And even if you can't get into any details, how a situation like that might affect strategy or the next year or two for the firm?
Thanks Devin. And just our policy and I've been very consistent about not commenting on what's in the media or any rumors or speculations that are out there. And I know there's been a spate of articles, but at the end of the day, I'm not going to comment on any speculation. We are -- hopefully it's clear in our prepared remarks stated about how focused we are. We are really working hard to align the organization behind the strategy that gives our company a sustained competitive advantage. And man, we're making progress. And we have our head down on that. Very focused on making that progress. The key now is really to connect our strategy to our clients so that they are receiving the benefit of all of Envestnet.
Networking more and more to more of the industry partners that we have, and making sure the industry understands as a whole the important work that we're doing and how it meaningfully shifts the stage for the value of advice going forward. We're making investments and making sure that those investments are yielding progress, and they are. But I am dead focused on that. And at the end of the day, all of that is going to lead to something that we lead off the call last February with -- was we want to drive faster -- sustained, faster revenue growth that has a lot of leverage and can drive more profitability for the business. That is what I'm focused on, period.
Yeah. Got it. Well, thanks for indulging me there. And then, I guess a follow-up, and I guess to use the last point just made, Bill. I mean, so seeing some even nice flow momentum in the fourth quarter, and I know the expectations that over time that's going to accelerate based on the investments. Just unpack that a little bit. You gave a little bit of detail in the prepared remarks around some of the drivers of the strong flows. But maybe just to dig a little bit deeper, is there any seasonal benefits in there or anything else that may not necessarily recur? And then, just remind us on impact of market volatility. Clearly, this year has started in a much more volatile note than we saw throughout all of last year. So just any early indications from that as well?
Yes. And Ryan, if -- I'm sure you've followed the market today -- if today's an indication. So, no -- there's no seasonality in that. What that reflects is a concerted, focused effort of ours. And as we talked about this last February, we understood very well that there was a significant opportunity for our business in the $5.7 trillion that we serve and the millions of accounts that we serve. And what we needed to do was get that focus, apply our data analytic tool to our account base so that we could pinpoint exact opportunities for advisers, to add value to their clients. And so we organized around that. Their resources that are super focused to make sure that we're connecting those insights to advisers who are connecting that to their clients. And you're seeing the results, early results of that effort around a few use cases. And I spotlighted some of the growth rates in our overlay business, our direct index business, as well as our impact in sustainable assets. We'll expand those use cases utilizing our recommendations and the apparatus that we put in place to drive more and more penetration of the current addressable market.
That's Slide 1, Devin. What I'm getting excited about now is that, as we're introducing some of the modernized technology into the market. We've got our proposal tool that reached the desktops of 1,200 firms, who -- those 1,200 firms have thousands of advisers. So we're touching a big group of the industry now with an essential piece of technology. But you've got the client portal, you have the trading tools, you have other capabilities that are making their way to market. What we will begin to see, what will have anecdotal evidence of at the end of the year. And then into FY '23, we'll see -- begin to see the early results of is our subs rate -- our subs growth rate, and really driving our technology into the market in driving growth from the subs. And I call it the old one, two punch. 1. Is the AUM&A, 2. Is going to be the subscription revenue that we'll be able to generate. And so I think we're setting ourselves up for a pretty sustained environment in which we're able to drive accelerated growth.
Thank you.
Devin, I'll hit the sensitivity on the market because I know that's going to be a question, especially given today. When we think about this, illustratively, the impact on our assets relative to the broader equity markets is about 60%. And so, it might be a little higher, might be a little lower. But if you just use that as a proxy for the exposure to the equity markets, and assume that on March 31, markets are 5% lower than they were on December 31st. So again, our guidance assumes December 31st asset levels with no market impact over the course of the year. If you assume they drop -- the markets dropped 5%, the impact on our assets would be about 3% and our impact -- the impact on our 2022 revenue would be right around $17 million. And the EBITDA impact, again, using the ratio of asset-based cost of revenue to asset-based revenue. Q4 was about 57%, that would translate to about $7 million or $8 million of EBITDA impact. So the cost of revenue is variable along with the revenue. And that would be the difference between the two.
Okay, terrific. Well, appreciate the color, Pete and Bill. Thanks for the update as well. Good to see the momentum.
Yeah. Thanks, Devin. And we'll see you in a couple of weeks.
Our next question comes from Surinder Thind with Jefferies. Please proceed with your question.
Hi, Surinder.
Hey, guys. Congratulations on what looks like pretty good 4Q numbers. My question is about the guidance itself. Can you break the guidance down into its organic growth components in terms of what you're thinking for the wealth solutions business on the fee-based side, what you're thinking for wealth solutions on maybe the subscription licensing, and then the data and analytics? And then any color on the 1Q number for subscription licensing? It seems to be down pretty meaningfully quarter-over-quarter.
Let's answer the first one first. So if you break the two segments down, the wealth business is growing a little faster than our overall, but not a lot. I would say that's going to be maybe -- if we said 15 to 17 for the whole business, maybe 16 to 18 for the wealth business. And then high single-digits on the overall revenue growth in the Data and Analytics segment. So call it 6 to 8 in that range. And then the second question was about subs? Surinder, I didn't follow your second question. I'm sorry. Around [Indiscernible]
Unless I'm misreading the guidance, and I apologize. Just going through the numbers really quickly. The guidance for 1Q subscription licensing seems to be down quarter-over-quarter versus 4Q, and by $4 million or so, $3 million to $4 million, any color on that?
We'll take this one off-line.
Okay.
We'll follow up off-line. We'll follow up with you. That doesn't [Indiscernible] in my mind, but we'll follow-up with you.
My apologies. And then, in terms of just strategically, obviously, the emphasis has been on the fee-based business. I've noticed over the last two years, the re-class activity is between subscription -- going from the fee-based business to the subscription licensing businesses is lower than it's been in prior years. Any color from that? Is that a strategic shift that you guys have made in terms of dissuading clients for making the switch, especially given how large the market moves have been if we were to compare market levels from two years ago?
No Surinder, I mean, we have utilized -- what we're -- what we went through a process of when taking a pretty large sum of assets that over time the marketplace had transitioned from, hey -- an asset -based product like [Indiscernible] and or some of our performance reporting capabilities into more of subs based offering. And we're converting those clients or transitioning those clients to more of a sub base for those solutions. I think where the opportunity fits we'll move clients more on those sub-base for those types of offerings. Preserving assets -- asset-based pricing for the more valuated -- value added services, building on from the UMA up to things like our overlays and direct index product, as well as our sustainable platform. But there's a mix there, I think it's episodic in that sometimes it's client discussion, maybe a contract's up for renegotiation. But really, we're pushing our clients to a place where when there's a technology tool that's driving the majority of the function, we wanted to be in a subs category. And then when we are using our fiduciary infrastructure to help them make decisions, we're charging a fee basis.
Got it. Okay. And then I apologize. So I double checked the numbers here just -- for 1Q, it says on your guide in your press release, subscription-based revenues are going to be in the range of $114 to $115 million on a non-GAAP basis. And then when I look at the reported number this quarter, it's $118 million, so it's going to be down $3 million to $4 million quarter-over-quarter for subscription-based revenues.
Surinder, we'll take that offline with you.
Okay.
Our next question comes from Michael Young with Truist Securities. Please proceed with your question.
Hey, Michael.
Hey, how's it going?
Good. How are you?
I'm doing just fine. Thanks for taking the question. Wanted to start with kind of the shift in the growth, and I guess you're the lead of the data analytics business. Can you talk about what the drivers are that are moving that up from that 2% growth to -- back to more decent kind of growth trajectory at high single-digits? And then, as a follow-up, just if we can think about sort of the EBITDA margin profile of those incremental kind of revenues. Is that accretive or significantly accretive to the overall margin?
Yeah. Michael so as you know, the Yodlee business has been something that we've been working hard to really vitalize and to restore growth in that business. It's been several quarters that we've been working hard to do it. Kudos to our Yodlee team, as we believe that we've got building momentum in that business. And I'm very encouraged by a couple of dynamics to take note of, continued to be very competitive in the data AgSpace, whether that's on the fintech side or it's on the financial institution side of the business. We have been very purposefully bringing down our professional services revenue and pretty much have worked through that decline in revenue; doing that to create more agility, more usage out of our developer kit so that we're not charging PS and it's much easier to deploy the Yodlee product to big and small clients. So that's been a purposeful revenue decline.
There was a bit of a hiatus in foreign or international revenue, mostly created by the open banking rules in Australia and in the UK. They have restored and are growing pretty well today. And then finally, in the analytics business, that on the hedge fund side, on the asset manager side, we're seeing kind of restored growth interest in that marketplace. We're supplying some tremendous firms who are using that data and bringing that data to the market. So as our reseller partners there and as well as contracts that we're winning in that space. So Michael, long and short of it is, we've been hard at work to kind of get all of those kind of leverage points for the business of working in the right direction. We've turned the corner, and I'm pretty enthusiastic about what lies ahead for that business. From a cost standpoint, we're investing here and we believe that there's tremendous opportunity in certain areas, underserved areas of the business that are pure data platform like Yodlee conserve much more -- conserve very effectively. I noted the SMB offering and small business offering.
It's a very exciting product that will make its way to market in the second half of 2022. Some investments to get that into market and make sure that we're properly distributed. That is going to be a really useful tool for commercial lenders, large banks, as well as our advisors who serve a lot of small business owners by helping them pull their business lives together. And also in the analytics side, we're seeing expansion from the asset manager space to policy areas, as well as ad-tech and making some investments to enhance, continue to invest in the dataset, adding data to the existing Yodlee data to make that dataset even more competitive in the marketplace. While it'll be -- still be a very large EBITDA contributor, they're investments that we're making there.
Okay, thanks for that.
I'm sorry, Michael. Yeah, it's a good question on margins. It is higher margin as Bill is talking about. I mean there -- it's not without costs. We do have costs that support the platform as more activity goes through, but it is closer to software tech type margins as opposed to some of the asset base, which carries higher levels of variable cost of revenue.
Thanks, Pete. Appreciate the cleanup there on that one. And then, I guess my other question, Bill, would just be you've been more open in talking about potential monetization or partial monetization of that business. Just sort of curious philosophically, if something like that were to come about, what would you do with that extra cash and capital? Are there specific projects or things that you would put that towards on the wealth side or would that be more of a return to shareholders? Just any thoughts you have, that would be helpful.
Yes. Thank you Michael. And we've been really heads-down and very focused on getting that business to restore its, beginning it wouldn't restore its growth and we're going to let that run a little bit because I believe that creates tremendous value. In the meantime, we've been threading more and more our data is set in throughout our wealth environment. And it's powering some amazing things. I mean, we made $11 million insights from recommendations that we shared with our advisors set a day as we ended last year and we're on our way to a billion. That is a unique competitive offering that is going to get smarter and more powerful and drive more productivity across the board for us. Some of that IP or some of the brain share and our ability to do that comes from the Yodlee business.
We've just kind of cross spread it now across the organization. We're using the data to power some next-gen business intelligence. And then the data is also powering some incredible FinApps, whether it's our MoneyGuide blocks or cash flow apps, or financial planning, or a whole host of other capability. So we spent the time not only to get -- restore the growth rate in the Yodlee business, we've been using that dataset to power more and more of the wealth environment up. All that said, we've maintained and we continue to manage that business in a separable way if strategically it made sense for our business to contemplate that. That's where we're at. And I think it's really such a hypothesis at the moment as to what we would do with the capital, that I don't -- I really wouldn't comment much further than what I've said.
Okay. I appreciate all the color. Thanks.
Our next question comes from Ryan Bailey with Goldman Sachs. Please proceed with your question.
Hi. Good afternoon, everyone.
Hey, Ryan.
We're about a year in since you announced the investments needed for the intelligent financial life. And I think beyond the benefits investments revenues, I think you have a vision that it could impact the entire wealth management industry. So I guess given how important this is, do you feel as anything that's held you back over the past year from executing on the strategy, faster, bigger, or better than you've done?
No. Ryan, we had a running start at it as we got going last year. And I'm really pleased with the progress we're making and I would encourage investors, analysts to join us in Charlotte in May because what we'll be able to -- what we'll be introducing to the marketplace then is really the vision and how it's coming to life in really, I think in my prepared remarks, I called it a multi-dimensional environment and it truly is. And it is creating more and more intelligence and insight to help people make more sense of their money. I've been working on another addition of the White Paper, and I refer to money as the technology, and inefficient technologies are disrupted. That's what our industry is going to do. It is going to disrupt the way money has been kind of managed and experienced by people and connected in powerful ways. We're at the tip of the spear there, and we're leaned into making it happen. I'm really pleased with the progress we're making, more to do. But again, I encourage people to join us in Charlotte in May if you can, as we get back together in person for annual Advisor Summit. Because I think you'll get a very good understanding of how these pieces are driving that vision that we stated last year, it's coming to life.
Got it. That's really helpful. And this may be a better question for Stuart, but I'm sure you'll have an opinion, too. For the data and analytics business, if you had more flexibility to invest more aggressively in that business just giving what some of the industry competitors have been able to do that haven't had to focus as much on margins, what do you think you would have tackled there or what would you be tackling there if you could invest more aggressively?
On the data analytics business, particularly Ryan?
Yes. Yes, please.
Yeah. I think we've really come a tremendous way in the quality of data that we're able to share with our clients and how they are using their clients to drive value for their investors. And then we're powering some of the prominent firms that are driving analytics to the same marketplace. And [Indiscernible] those analytics are improving all the time. Where we're headed in what we see an opportunity in is a couple of other areas around analytics. One is in the policy area. Every municipality, every state, every government agency wants to think about people and what people are doing with their money, and how people are earning and how they're earning their money. And you get a really great macro view of how the economy is growing and how the economy is evolving. And its incredibly valuable analytics.
So we're working on developing a product. There have partners that will take that product into the market. Ad-tech with cookies and other kind of hurdles that have been in regulation that has put them put in place around web usage and the sharing of data. There is a -- ADTECH is struggling to put the pieces together as well as they used to. We can add a perspective for some of these consumer companies on how effective their messaging is hitting the market that they are trying to reach. And so that's an opportunity for us. The last one is around RegTech and just helping, from an analytics standpoint, our clients understand some of the details on a continual basis around the regulations that they need to adhere to.
Got it. Thank you for the color, Bill.
Yes.
Our next question comes from Chris Donat with Piper Sandler. Please proceed with your question.
Hi, Christopher.
Hey, guys. Good afternoon. Wanted to go to the 2022 guidance with Pete. And just making sure I'm understanding what's going on with the growth in asset-based revenues that's implied if I look at the first quarter revenue number and then the out -- the full-year number, basically back into what the second quarter or third quarter or fourth quarter could be. As I think about the growth in asset-based revenue that's implied for the remainder of 2022, is that more balances or fees or a combination? I'm just trying to get my arms around it.
It's more of the same that we saw in 2021. So higher asset levels based on flows. And those flows weighted more heavily toward AUM business, which carries higher fees. So I think over the course of the year and we would expect to see higher flows and not dramatically different, but a slight increase in the fee rate quarter-to-quarter.
Okay. That makes sense. And then just also then backing into the implied expenses from your revenue and EBITDA, it looks like that should be somewhat steady state for future quarters. Am I doing the math right there, then it looks like to imply half of these quarters should be similar?
So tried to talk about that a little bit in the prepared remarks, but the first quarter should be the low point in terms of EBITDA margin when you think about it that way. And so we should start to see the revenue growth ex-market outpace expense growth. And so we'll see that ramp more like we saw before COVID. If you go back to maybe 2019 and look at the progression we had over the course of those years; we always had Q1 a little bit lower and Q4 a little bit higher. And I think we're expecting to be more on that trend.
Okay. Got it. And you had mentioned you're -- the partial recovery expense elements too, so there's still might -- as we think by 2023, there's probably still some embedded expenses that will likely go higher just assuming the world gets more normal, if you will.
Yeah.
Okay. Thanks very much.
Let's get out of 2023, but yeah, I think we're going to see margins accelerate through FY '22 and to FY '23. Yeah.
Yes.
Yeah. That's our intention, Chris.
Yes. And yeah, leave in 2022 at a higher rate than you began 2022.
Correct.
Got you. okay thanks very much.
Our next question comes from Alex Kramm with UBS. Please proceed with your question.
Hey, everyone. My question may have the same subtext of some of the questions before, but I am going to answer -- ask it anyways. I think Bill, like a year-ago, when you rolled out this investment plan, I think I basically told you on this call that you're acting like a private company and not like a public company, be given that you're crushing your EBITDA margins for a few years. I guess, again, asking something that was asked somewhat before, but if we imagined you were a private company, I mean, do you see opportunities where you said okay, if I had an open check book for two, three years, I could really go after things I haven't -- I can't go up -- after right now because I am a public company. So would you be more excited and free to do things in your opinion that just as a public company you just want feel you can right now?
Thanks, Alex. Hope you're doing well. And I'm not going to speculate on the rumors that are out there, but no. We are very leaned in and we've made very good use of our capital in an interim period of time to create tremendous value. And I think it was an important step for the company because what it really does is it solidifies an incredibly sustainable competitive distinction for our company. And Alex, you've known us for a long time. But here are the areas that competitively Envestnet delivers to our clients that no other firm can. We have this tremendously deep data heritage and data set that we're creating more and more intelligent insights for our network to take advantage of these actionable opportunities that we're presenting to them. And they're taking advantage of it. We're seeing them beginning to access it. We have the number one leading market share in financial planning. We have the number one leading market share as a turn key asset management platform.
We have built out and extended the types of products that we put in our solutions platform. So those are like very significant second ramp parts to try to compete with Envestnet. What the capital did for us is accelerate our ability to bring them together, Alex. And that has been something we're down the path. And what we made the decision is that we believe that by going faster, we can lock in this competitive distinction in the market and create sustained growth. It's early days still, but I'm super pleased with the progress that we've made, but where it's pointing us to. And we've got a lot of work to do here and we've been really hard at work. Hopefully that's pretty evident to everybody. But the answer to me is there's never an open checkbook, one. Number two, we've been really judicious about this incremental spend. And there's one more dynamic if I could just highlight it that I think's important in the spend.
We're a center for R&D for our industry, and the people that we've been recruiting have been very technology deep and very data deep. And those are competitive resources today in this market. And those resources are thrilled to be at Envestnet, guess why? Because we're investing to grow behind a purposeful mission that can change a marketplace and create sustained growth for our business. We're doing exciting things here. And so those same talent is it -- aren't going to be the ones that are going to be able to put their hands up and say they're going to work at the local RIA or a mid-sized broker-dealer. No, they're coming to Envestnet because we are recreating future for a marketplace and we've become a -- kind of a concentrated or a centralized hub. Again, the capital judiciously that we've invested has created that force for us. And so, again, I am head down on executing and thinking we're making very good progress. There is more to come. And just, again, believe that we're making a lot of progress here.
That's fair enough. Thanks for the color. Maybe just a quick one for Pete then, and maybe this was asked as well, but you mentioned the T&E coming back this year. Can you actually give us a number in terms of how much relative to 2021 is going to be incremental spending on travel, etc.? And then maybe how much you would still be below, let's say, 2019 normalized level, or where you think the company could go -- eventually go back to?
So I'm going to give you directional numbers. I don't want to be too specific about it. But in 2019, we probably spent between travel and I lumped in the Advisor Summit in there, high teens to maybe not quite $20 million. This year we're -- FY '20 and FY '21 we spent virtually none of that and on travel and entertainment and the summit, which was canceled both years. This year in total we'll be a little over half of that. Maybe 50% to 60% in that range.
Okay, that's all I wanted to know. Fantastic. Thank you.
Thanks, Alex. Have a good evening.
[Operator Instruction]. One moment while we poll for more questions. Our next question is a follow-up from Michael Young with Truist Securities. Please proceed with your question.
Hey, Michael.
Thanks for the follow-up. Just wanted to ask and I understand you're not going to comment on rumors and stuff in the marketplace, but if we just think generally about what the playbook would be for a private equity buyer, it would be something like coming in, cutting costs, and maybe even raising prices, and obviously adding leverage to the Balance Sheet. I assume the latter is not going to happen, but of those former two, are there any opportunities that you see within the business that you all can execute on in terms of particularly price increases, near-term, and then maybe medium-term, anything with the real estate footprint or other just cost-saving opportunities?
Yes. Michael, again, I'm not referring to any way -- in any way to any of the stuff that's out there. But I think we have been hard at work understanding a couple of things here. Number 1 is, where our investment dollars are going and what we're going to get from it. And we are pleased with the progress that we're making. We've also had a nearly two-year period of COVID. We're coming up on two years, in which you have the ability to assess workplaces and kind of where you want to put your capital and what sort of environment you want to create for your employees. So absolutely considering our real estate footprint. We also have been super focused on our go-to-market and how we're engaging in the marketplace and changing the way that we market out there.
I think those are areas of investments that we're leaned into. Other traditional ways that we may be leaning back on would be things like workplaces and things like those. So I don't know if one is more important in a private environment or a public environment, but as we've leaned in to create this environment for faster growth for the company, there has been a good -- an exceptional amount of work done to how do we create the leverage and profitability that we think long-term that this business can generate and that as we've said, last year and Pete just kind of hit on it a little bit, is as we get to the end of FY '22 and into FY '23 our intention is to start to drive bottom-line growth and return for investors.
Okay, fair enough. Thanks for taking the follow-up.
Yes. Absolutely.
Ladies and gentlemen, we have reached the end of the question-and-answer session, and I would like to turn the call back to Mr. Bill Crager for closing remarks.
Thank you, Hector. I want to thank my Envestnet colleagues for the extraordinary work that you do. A thank you to all of you for joining tonight and for your support of Envestnet. I look forward to speak to everybody again next quarter. Thank you, and have a good evening.
This concludes today's conference. You may disconnect your lines at this time. Thank you all for your participation.