FNGN InvestorPresentation 3Q2015 11.04.15

8/20/2019 FNGN InvestorPresentation 3Q2015 11.04.15

1/28

FNGN Investor PresentationQ3 2015


2/28

The following information contains forward-looking statements. These forward-looking statements are based onthe Company’s current expectations and beliefs, as well as a number of assumptions concerning future events and

market trends and opportunities. These forward-looking statements include, but are not limited to, anticipatedfeatures, benefits and success of Income+, IRA Management, Social Security guidance and retirement incomeplanning services, descriptions of potential market and/or growth opportunities and trends, as well as generalbusiness objectives. The Company makes no representations regarding its intentions or plans to enter or pursueany such opportunities or trends, or the likelihood of achieving any penetration into these potential markets or ofsuccessfully pursuing any such opportunities, trends or objectives. These statements are subject to risks,uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that

could cause actual results to differ materially from the results discussed in the forward-looking statements.Factors which may cause actual results to differ from those discussed in the forward-looking statements include,but are not limited to, those discussed in our most recent SEC filings as described below, as well as changes inmarket opportunities, demographics and trends, in the financial markets and economy as a whole, and in theCompany’s business plans, initiatives or strategies. You are cautioned not to place undue reliance on such

forward-looking statements because actual results may vary materially from those expressed or implied. Allforward-looking statements are based on information available to the Company as of the date specified for suchinformation, if a date is given, or on this date and Financial Engines assumes no obligation to, and expresslydisclaims any obligation to, update or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise. For more information on the risks and uncertainties affecting theCompany please see our most recent SEC filings, including our Form 10-K filed for the year ended December 31,2014 and the Form 10-Q filed for the period ended September 30, 2015. This data is presented for informationonly and is not intended to constitute an offer or solicitation with respect to any securities issued by the Company.

Forward-Looking Statements

| p. 02


3/28

10,000 baby boomers

turn 65 every day in the United StatesThis trend is expected to

continue until 2030. 1 Defined Benefit Plan Only Defined Contribution Plan Only

60%1980 2011

7%

| p. 03

Both 2


4/28

And studies show...

50% of households with a net worth of lessthan $500,000 DO NOT have a formalretirement income plan.

more than

- The Cerulli Report, Evolution of the Retirement Investor 2014,

Cerulli Associate, Inc.

| p. 04

of participants in TargetDate Funds use them

incorrectly.62%Representing 87% of all TDF assets.

Participants using Help earned higher median

annual returns than those who did not.

3.32%an average of

net of fees

Retirement Help makes a significant impact.

Help defined as managed accounts, online advice, or

proper usage of target-date funds.


5/28

Providing investment adviceto those who have been ignored

Personalized, independent

investment management and advice

through the workplace

using proprietary, scalable technology

| p. 05


6/28

Powerful trends drive growth & opportunity

| p. 06

InvestingExpertise

Nobel laureate

co-founder

RetirementDollars

$22 trillion

Demographics

78 millionBaby Boomers

WorkplaceAccess

524,000 plansoverall

WorkplaceAccess

Over 9 million

participantsTechnology

Personalizationat scale

OPPORTUNITY

ADVANTAGE


7/28

Top DC managed account provider1

Brinker Capital

$38.0 BILLIONMorningstar

Financial Engines

$13.0 BILLIONFidelity

$12.5 BILLIONGuided Choice

$3.5 BILLIONStadion

$2.2 BILLIONProManage

$1.6 BILLION

$1.4 BILLIONStandard

(Mainspring Managed)

TOTAL AUM FOR

COMPETITORS:

$72.2 BILLION

As of June 30, 2015,

TOTAL AUM FOR FNGN:

| p. 07

$114.5 BILLION

Denotes year-over-year growth


8/28

Company highlights

• Services help invest before andspend during retirement

• Leader in a large market drivenby powerful trends

• Scalable, proprietaryinvestment technologyplatform

• High growth, recurring

revenue, high operatingleverage 9.2 over

million individuals have

access to our services

$108 over

billion in assets under

management

| p. 08

Members in all 50 states


9/28

Scalable technologydelivers high quality at low costs

| p. 9

ONLINE ADVICE

Self guided, online experience for

those looking to validate their

own decision-making.

FINANCIAL EDUCATION& EVALUATIONCreating awareness and

highlighting opportunityfor improving retirementreadiness.

PROFESSIONALMANAGEMENT

Providing ongoing

monitoring to create a

personalized anddiversified investment

portfolio.401(k)


10/28

401(k) Plans Participants 401(k) Assets

Focused workplace distributionbroad opportunity in large plans

524,000 46 million $4.4 trillion

0.4% 49%

51%

Current partners• Aon Hewitt

• Empower Retirement

• Fidelity

• Mercer

• T. Rowe Price

• Vanguard

• Voya Financial

• Wells Fargo• Xerox HR Solutions

| p. 10


11/28

Largest installed baseof America’ s largest 401(k) plans

…representing some of theMOST COMPLEX plans

| p. 11

Market leader among large 401(k) plans

• Advice available to over 9.2 million participants

• 142 FORTUNE 500

• 662 employers; representing 954 billion inplan assets

• Managing 913,000 accounts worth $108 billion

• Half of members have less than $53,000 balance


12/28

Exclusive accesswith high barriers to entry

| p. 12

$954 billionassets under contract

• Independence

• Blue chip customers

• Data connectivity

• Access for all employees• Technology to personalize

employer assetretention

Employers require:

98%


13/28

Four opportunities for growth

AUM

$6.9B ongoingcontributions

Marketappreciation

Annual campaigns

Digital marketingNear retiree services

Advisor access

Financial planning

Total incomeplanning

Social Security

Pensions

Other retirementassets

| p. 13

AUC

401(k)

IRA

4.NEWCAPABILITIES

3.INCREASEDENROLLMENT

2.BUILT-INGROWTH

1.AUCGROWTH

AUM

New employers

New providers

401(k)

AUC


14/28

Potential new markets

GrowthOpportunity Assets(billions)

Current AUC $954

Current AUM $108

DC + IRA $14,400

DC + IRA + DB $22,000

Total DC $6,900

$954B

$3.6T

$6.9T

$14.4T

$22.0T

Current partners $3,600

| p. 14


15/28

Delivering services for near retirees

| p. 15

5 years from retirement

Get portfolio income-ready

In retirementGenerate payouts

Approaching retirementCreate total Income Plan

Plan Participants age50+ hold 68% of assets


16/28

Consistent growthacross key top line metrics

Members(thousands)

AUM(billions)

| p. 16


17/28

2010 2011 2012 2013 2014

Recurring revenue growth

Revenue(millions)

$112

$144

$186

$239

$282

of 2014 revenue came from existing employers

Professional

Management

Platform, other

| p. 17

~99%


18/28

Demonstrated profitability trends

35%25% 28% 30% 33%

Adj.

EBITDA

Margin

Non-GAAP Adjusted EBITDA (millions)

| p. 18


19/28

Financial Highlights •Revenue increased 8% to $78.8 million year over year

•Professional Management revenue increased 11% year over year to $70.2 million

•Non-GAAP Adjusted Net Income increased to $12.5 million from $12.0 million a

year ago

2

•Non-GAAP Adjusted EBITDA increased 2% year over year to $25.1 million3

Business Highlights•Acquisition of The Mutual Fund Store announced; expected to close in late Q1’16

•Assets under contract were $954 billion

•Assets under management were $108 billion

•Managing over 913,000 individual portfolios

Q3 2015 highlights1

| p. 19


20/28

Summary

Leader in a large market driven by powerful trends• America’s largest independent investment advisor

• AUM larger than all DC managed account competitors combined

• $22 trillion retirement market driven by Boomer demographics

• Financial Engines enjoys access to signed clients with $954 billion in AUC

Growth opportunities• Untapped potential in existing customer base

• Growth opportunities from services designed to help near retirees

• Over 50% of $4.4 trillion 401(k) assets concentrated in large employer plans

Recurring revenue growth with high margins• 2014 Professional Management revenue CAGR 33%

• ~99% of revenue came from existing employer customers in each of the last 4 years

• Non-GAAP Adjusted EBITDA margin of 32% TTM

| p. 20


21/28

About the Financial Engines and Aon Hewitt research dated May 2014.

•Research results presented for informational and evaluative purposes only.

•Within the Help group, managed accounts and online advice are provided by Financial Engines Advisors L.L.C.

Financial Engines does not sponsor or serve as investment advisor to target date funds.

•The data for the research are drawn from 14 large 401(k) plans. Collectively the plans represent over 723,000

participants with over $55 billion in assets.

•Usage analysis based on 401(k) account and savings data collected between January 2013 and June 2013. 8 of the

14 plans in the Usage analysis were also in the Usage portion of the September 2011 Help report.

•Median returns are calculated based on a sample of 14 plans, 8 of which were also in the September 2011 Help

report, using data from calendar years 2006 – 2012, inclusive. Observations are equal weighted both across plans

and across years.

•Portfolio balances are calculated as of the start of each calendar year of the research period. Portfolio balances

are calculated exclusive of any plan loan balances outstanding.

•

All reported risk levels are forward-looking annual standard deviation values.•All returns reported in the research are net of fees, including fund specific management and expense fees, and

managed account fees.

•For a complete copy of the research study, visit www.financialengines.com.

“Help” research disclosure

| p. 21

http://www.financialengines.com/http://www.financialengines.com/


22/28

Slide 3: 1 Pew Research Center: www.pewresearch.org/daily-number/baby-boomers-retire/; 2 EBRI, “FAQs About Benefits—

Retirement Issues: What are the trends in U.S. retirement plans?” www.ebri.org/publications/benfaq/index.cfm?fa=retfaq14 . Slide 4: Source: Aon Hewitt Associates and Financial Engines research: “Help in Defined Contribution Plans: 2006 Through 2012”, May

2014.

Slide 6: Source: Cerulli Retirement Markets 2014 Report (2014 retirement assets (DC, DB and IRA) and plans data); U.S. Census

Bureau July 1, 2006 (baby boomer data). Workplace access based on Financial Engines data as of September 30, 2015.

Slide 7: Based on The Cerulli Edge – Retirement Edition, 3Q 2015, Issue #6, page 13; Data as of September 30, 2015.

Slide 8: Based on Financial Engines data as of September 30, 2015.

Slide 10: Source: Cerulli Retirement Markets 2014 Report (2014 plans, active participants, 401(k) assets); See our Forward-Looking

Statements earlier in this presentation.

Slide 11: Based on Financial Engines data as of September 30, 2015. These Financial Engines customers have consented to disclosure

of their relationships with Financial Engines. This does not constitute an endorsement or approval of the advisory services

provided. All trademarks are the property of their respective owners.

Slide 12: Based on Financial Engines data as of September 30, 2015. All employers who make available our Professional Management

service have made us the sole in-plan provider. Employer asset retention based on the average employer AUM retention for the 3

years ending 12/31/14 for employers offering Professional Management services.

Slide 13: Based on Financial Engines data as of September 30, 2015. Ongoing contributions over the four most recent fiscal quarters.

Slide 14: Source: Cerulli Retirement Markets 2014 Report (2014 DC, IRA, and DB data); PLANSPONSOR 2015 Recordkeeping Survey

(current partners DC data as of 12/31/14). Based on Financial Engines data as of September 30, 2015 (AUM, AUC). See our

Forward-Looking Statements earlier in this presentation.

Footnotes

| p. 22

http://www.pewresearch.org/daily-number/baby-boomers-retire/http://www.pewresearch.org/daily-number/baby-boomers-retire/http://www.pewresearch.org/daily-number/baby-boomers-retire/http://www.pewresearch.org/daily-number/baby-boomers-retire/http://www.pewresearch.org/daily-number/baby-boomers-retire/http://www.pewresearch.org/daily-number/baby-boomers-retire/http://www.pewresearch.org/daily-number/baby-boomers-retire/http://www.pewresearch.org/daily-number/baby-boomers-retire/


23/28

Slide 15: Based on Financial Engines data as of September 30, 2015.

Slide 16, 17: Based on Financial Engines data as of December 31, 2014. See our Forward-Looking Statements earlier in this

presentation.

Slide 18: See Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on August 5, 2015 for a reconciliation of Adjusted

EBITDA. Non-GAAP Adjusted EBITDA is defined as net income before net interest expense (income), income tax expense (benefit),

depreciation, amortization of internal use software, amortization of direct response advertising, amortization of deferred commission

and non-cash stock-based compensation. Margin: Adjusted EBITDA as a percent of revenue.

Slide 19: 1 Based on Financial Engines data as of September 30, 2015. 2 Adjusted Net Income represents net income before non-cash

stock-based compensation expense, net of tax and certain other items such as the income tax benefit from the release of valuationallowances, if applicable for the period. 3 Non-GAAP Adjusted EBITDA is defined as net income before net interest expense (income),

income tax expense (benefit), depreciation, amortization of internal use software, amortization of direct response advertising,

amortization of deferred commission and stock-based compensation.

Slide 20: Source: For independence methodology and ranking, see InvestmentNews RIA Data Center.

(http://data.investmentnews.com/ria/). Cerulli Retirement Markets 2014 Report (2014 401(k) assets and retirement asset data);

Cerulli Edge 3Q 2015 for AUM vs. competitor’s AUM; Financial Engines data as of September 30, 2015 (AUC, Non-GAAP Adjusted

EBITDA TTM). See our Forward-Looking Statements earlier in this presentation.

Footnotes (cont.)

| p. 23


24/28

Appendix


25/28

• Assets under management (AUM) is defined as the amount of retirement plan assets

that we manage as part of our Professional Management service. Our quarter-end

AUM is the value of assets under management as reported by plan providers at or

near the end of each quarter. Our members are the plan participants who are enrolled

in our Professional Management service as reported by plan providers at or near the

end of each quarter.

• Assets under contract (AUC) is defined as the amount of assets in retirement plans

under contract for which the Professional Management service has been made

available to eligible participants. Our AUC and eligible participants do not include

assets or participants in plans where we have signed contracts but for which we have

not yet made the Professional Management service available. Eligible participants are

reported by plan providers as of various points in time.

• For further detail and definitions of other terms used in this presentation, please refer

to the Company’s most recent quarterly and annual filings with the SEC.

Definitions

Financial Engines® and Retirement Help for Life® are registered trademarks or service marks of Financial Engines, Inc. Advisory services

provided by Financial Engines Advisors L.L.C., a federally registered investment advisor and wholly owned subsidiary of Financial

Engines, Inc. Financial Engines does not guarantee future results. | p. 25


26/28

Reconciliation of GAAP to Non-GAAP Operating Results

1 For the calculation of non-GAAP Adjusted Net Income, an estimated statutory tax rate of 38.2% has been applied to non-cash

stock-based compensation for all periods presented.

The table below sets forth a reconciliation of net income to non-GAAP Adjusted EBITDA based on our historical results:

The table below sets forth a reconciliation of net income to non-GAAP Adjusted Net Income and non-GAAP Adjusted Earnings Per Share based on our

historical results:

| p. 26

Three Months Ended

September 30, Nine Months Ended

September 30,

Non-GAAP Adjusted EBITDA 2014 2015 2014 2015(In thousands, unaudited)

Net income $ 9,007 $ 8,477 $ 26,878 $ 24,878

Interest income, net (44 ) (119 ) (121 ) (263 )

Income tax expense 6,014 5,723 17,520 13,649

Depreciation and amortization 1,261 1,539 3,493 4,484

Amortization of internal use software 1,479 1,139 4,432 3,433

Amortization and impairment of directresponse advertising 1,534 1,406 4,631 4,132

Amortization of deferred salescommissions 369 453 1,173 1,217

Stock-based compensation 4,895 6,480 14,745 19,196

Non-GAAP Adjusted EBITDA $ 24,515 $ 25,098 $ 72,751 $ 70,726

Three Months Ended

September 30, Nine Months Ended

September 30, Non-GAAP Adjusted Net Income 2014 2015 2014 2015

(In thousands, except per share data, unaudited)

Net income $ 9,007 $ 8,477 $ 26,878 $ 24,878

Stock-based compensation, net of tax 3,025 4,005 9,112 11,863

Non-GAAP Adjusted Net Income $ 12,032 $ 12,482 $ 35,990 $ 36,741

Non-GAAP Adjusted Earnings PerShare $ 0.23 $ 0.24 $ 0.68 $ 0.69

Shares of common stock outstanding 51,811 51,655 51,481 51,586

Dilutive stock options, RSUs and PSUs 1,501 1,279 1,805 1,353

Non-GAAP adjusted common sharesoutstanding 53,312 52,934 53,286 52,939


27/28

For illustration only. Results may vary under different market conditions. Financial Engines does not guarantee future performance.

Lifetime income assumes purchase of an optional out-of-plan fixed immediate annuity before age 85. Financial Engines is not affiliated

with any annuity providers.

Income+Sell stocks, buy bonds to increase floor

| p. 27


28/28

For illustration only. In each subsequent year, any additional increases in income would be evaluated based on market performance

and current market conditions. Results may vary under different market conditions. Financial Engines does not guarantee future

performance. Lifetime income assumes purchase of an optional out-of-plan fixed immediate annuity before age 85. Financial Engines

i t ffili t d ith it id

Income+Sell stocks, buy bonds to increase floor

Documents

FNGN InvestorPresentation 3Q2015 11.04.15