Avantax, Inc. · GETTEX:3EV
Avantax — Q4 2022 Earnings Presentation
22 slides from Avantax's earnings presentation, Feb 15, 2023
Slide 1: Avantax, Inc. Q4 2022 Earnings Presentation
Avantax, Inc. (NASDAQ: AVTA) Q4 2022 Earnings Presentation February 15, 2023
Slide 2: Forward-Looking Statements
Forward - Looking Statements This presentation contains forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended, including without limitation, statements regarding the outlook of
Slide 3: Key Q4 2022 Highlights
Key Q4 2022 Highlights » Total Revenue of $172.4 million, up 0.1% year - over - year (New Record) » Total client assets of $76.9 billion at December 31, 2022 – an improvement of ~6% from Q3 ’22 largely due to improving market conditions » Advisory assets ended Q4 ’22 at $38.3 billion, or 49.8% of to
Slide 4: Strong Momentum on Critical Operating Metrics
Strong Momentum on Critical Operating Metrics Full Year Recruited Assets * $1.7B, new record for business Q4 Positive Net Flows Full Year Net Flows Average Quarterly Production Retention Rate ** % Advisory Assets $495M, positive for fourth consecutive quarter $1.3B, highest since at least ‘15 99%+,
Slide 5: Post TaxAct Sale Accomplishments
Refinance Corporate Debt Dutch Auction Tender Offer Name/Ticker Change » Delayed draw term loan facility – $270 million Term Loan A » Revolving credit facility – $50 million revolver » Maturity date – January 24, 2028 » Completed January 24, 2023 » Date Range 01/27/23 – 02/24/23 (unless extended) »
Slide 6: Total Revenue Breakdown
Total Revenue Breakdown $399 $173 $65 $29 Total Revenue Breakdown – 2022 ($ in millions) Asset Based Transaction and Fees Commission Based Advisory Based ~$666M 6
Slide 7: Track Record of Growth and Expected Future Growth
Track Record of Growth and Expected Future Growth Avantax Revenue ($ millions) $373 $508 $546 $658 $666 $754 2018 2019 2020 2021 2022 2023E (1) ~15% CAGR *Mid - point of Company guidance issued on February 15, 2023 7
Slide 8: Financial Professional Retention
Financial Professional Retention RETENTION OF HIGH - PRODUCING FINANCIAL PROFESSIONALS ATTRITION OF FPs BY REVENUE PRODUCTION – Q4 2022 HIGH PORTION OF REVENUES ARE RETAINED * See the definition of Quarterly Production Retention Rate, a non - GAAP number, and reconciliations of all non - GAAP to GAA
Slide 9: Revenue Not Remitted to Financial Professionals
$54 $50 $52 $62 $73 22.89 23.04 23.65 23.99 23.98 22.6 22.8 23 23.2 23.4 23.6 23.8 24 24.2 24.4 24.6 $- $10 $20 $30 $40 $50 $60 $70 $80 4Q21 1Q22 2Q22 3Q22 4Q22 Revenue Not Remitted to Financial Professionals Revenue Not Remitted to FPs* and Revenue Not Remitted to FP’s ROA ex - Cash Sweep* ($ in mi
Slide 10: Total Client Assets – Shift to Advisory Platforms
Total Client Assets – Shift to Advisory Platforms Organic asset inflows continued to shift toward more durable advisory platforms LONG - TERM ASSET GROWTH SHIFT TO MORE DURABLE ADVISORY PLATFORMS Strong growth in total client assets TOTAL CLIENT ASSETS ($ in billions) ADVISORY ASSETS AS A % OF TOTAL
Slide 11: Newly Recruited Assets
Newly Recruited Assets AUA in Millions New FP Count Newly Recruited Assets New Financial Professionals $44 $116 $51 $88 $108 $150 $297 $193 $289 $529 $514 $214 $401 62 65 28 50 67 58 31 38 49 81 37 74 66 0 10 20 30 40 50 60 70 80 90 $0 $100 $200 $300 $400 $500 $600 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
Slide 12: Successful Shift Toward Established FPs to Drive Asset Growth
Successful Shift Toward Established FPs to Drive Asset Growth * Inflows of client assets from independent FPs that have affiliated with Avantax. A purposeful shift toward more productive FPs $323 $363 $929 $1,658 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 2019 2020 2021 2022 Inflows*
Slide 13: Roadmap for Avantax Success
Roadmap for Avantax Success Build out our marquee strategic partners, strategic alliance programs and large referral partnerships; emphasize the unique culture and size characteristics that make Avantax special. New Store Sales Boost same store sales by driving more tax - focused financial planning,
Slide 14: Poised to Deliver a Compelling Long-Term Return
Poised to Deliver a Compelling Long - Term Return (1) Expected Adjusted EBITDA Margins, post Transition Services Agreement (3) , of 16 - 18% (2) (1) Excludes impact of interest rates. (2) Range dependent on magnitude of interest rates. Adjusted EBITDA margins are non - GAAP financial measures. The b
Slide 15: Full Year 2023 Guidance
Full Year 2023 Guidance $ in millions, except per share amounts Full Year 2023 Guidance Total Revenue $750.0 - $758.0 Adjusted EBITDA * $124.5 - $135.5 Net Income $25.5 - $40.1 Net Income per share (Diluted) $0.63 - $0.96 * See the definition of Adjusted EBITDA and the reconciliations of all non - G
Slide 16: Appendix
vA amr vA as Appendix 16
Slide 17: Reconciliation of Quarterly Production Retention Rate
Avantax Reconciliation of Quarterly Production Retention Rate (1) 17
Slide 18: Reconciliation of Revenue Not Remitted to Financial Professionals
Avantax Reconciliation of Revenue Not Remitted to Financial Professionals and Revenue Not Remitted to Financial Professionals, Excl. Cash Sweep Revenue, ROA (2) (3) (4) Q4 Q1 Q2 Q3 Q4 Revenue $ 172,192 $ 166,403 $ 162,669 $ 165,032 $ 172,392 Less: Financial professional commission payout (118,560) (
Slide 19: Reconciliation of Adjusted EBITDA for Forward-Looking Guidance
Avantax Reconciliation of Adjusted EBITDA for Forward - Looking Guidance (6) 19
Slide 20: Reconciliation of Adjusted EBITDA and Consolidated Adjusted EBITDA
Avantax Reconciliation of Adjusted EBITDA and Consolidated Adjusted EBITDA (6) (9) Three Months Ended December 31, 2022 Adjusted EBITDA Net income (8) $ 368,043 Less: Income from discontinued operations, net of income taxes 369,642 Income from continuing operations, net of income taxes (1,599) Stock
Slide 21: Notes to Reconciliations of Non-GAAP Financial Measures
Notes to Reconciliations of Non - GAAP Financial Measures to the Nearest Comparable GAAP Measures 1) Quarterly Production Retention Rate is a non - GAAP financial measure. We believe Quarterly Production Retention Rate is an imp ortant measure of our quarterly retention of financial professional - d
Slide 22: Notes to Reconciliations of Non-GAAP Financial Measures
Notes to Reconciliations of Non - GAAP Financial Measures to the Nearest Comparable GAAP Measures 7) The breakout of components cannot be determined on a forward - looking basis without unreasonable efforts. 8) As presented within the consolidated statements of comprehensive income (loss). 9) We def