Revenues and Cost of Revenues

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenues and Cost of Revenues

Revenues and Cost of Revenues

Disaggregation of Revenue

The following table presents the Company’s revenues disaggregated by major source:

	Three Months Ended June 30,
	2020						2019
	Envestnet Wealth Solutions		Envestnet Data & Analytics		Consolidated		Envestnet Wealth Solutions		Envestnet Data & Analytics		Consolidated
Revenues:
Asset-based	$	122,246	$	—	$	122,246	$	120,070	$	—	$	120,070
Subscription-based	61,410		43,569		104,979		50,078		42,180		92,258
Total recurring revenues	183,656		43,569		227,225		170,148		42,180		212,328
Professional services and other revenues	4,029		4,059		8,088		6,742		5,375		12,117
Total revenues	$	187,685	$	47,628	$	235,313	$	176,890	$	47,555	$	224,445

	Six Months Ended June 30,
	2020						2019
	Envestnet Wealth Solutions		Envestnet Data & Analytics		Consolidated		Envestnet Wealth Solutions		Envestnet Data & Analytics		Consolidated
Revenues:
Asset-based	$	257,057	$	—	$	257,057	$	229,004	$	—	$	229,004
Subscription-based	121,733		87,797		209,530		91,104		84,241		175,345
Total recurring revenues	378,790		87,797		466,587		320,108		84,241		404,349
Professional services and other revenues	7,315		7,950		15,265		9,487		10,275		19,762
Total revenues	$	386,105	$	95,747	$	481,852	$	329,595	$	94,516	$	424,111

One customer accounted for more than 10% of the Company’s total revenues:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Fidelity	15	%	15	%	15	%	15	%

Fidelity accounted for 18% and 18% of the Envestnet Wealth Solutions segment's revenues for the three and six months ended June 30, 2020, respectively. Fidelity accounted for 19% and 20% of the Envestnet Wealth Solutions segment's revenues for the three and six months ended June 30, 2019, respectively.

No single customer accounted for over 10% of the Envestnet Data & Analytics segment's revenue for any period presented.

The following table presents the Company’s revenues disaggregated by geography, based on the billing address of the customer:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
United States	$	230,102	$	217,462	$	470,554	$	409,581
International (1)	5,211		6,983		11,298		14,530
Total revenues	$	235,313	$	224,445	$	481,852	$	424,111

⁽¹⁾ No foreign country accounted for more than 10% of the Company's total revenues.

Remaining Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2020: 

Years ending December 31,
Remainder of 2020	$	114,905
2021	181,322
2022	135,410
2023	65,759
2024	35,319
Thereafter	35,393
Total	$	568,108

Only fixed consideration from significant contracts with customers is included in the amounts presented above.

The Company has applied the practical expedients and exemption and therefore does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less; (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed; and (iii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligations or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation.

Contract Balances

Total deferred revenue as of June 30, 2020 increased by $7,585 during the six months ended June 30, 2020, primarily the result of revenue growth, timing of cash receipts and revenue recognition. The majority of the Company's deferred revenue will be recognized over the course of the next twelve months.

The amount of revenue recognized that was included in the opening deferred revenue balance was $10,350 and $6,865 for the three months ended June 30, 2020 and 2019, respectively. The amount of revenue recognized that was included in the opening deferred revenue balance was $25,829 and $16,588 for the six months ended June 30, 2020 and 2019, respectively. The majority of this revenue consists of subscription-based services and professional services arrangements. The amount of revenue recognized from performance obligations satisfied in prior periods was not material.

Deferred Sales Incentive Compensation

Deferred sales incentive compensation was $10,072 and $9,387 as of June 30, 2020 and December 31, 2019, respectively. Amortization expense for the deferred sales incentive compensation was $1,043 and $753 for the three months ended June 30, 2020, and 2019, respectively. Amortization expense for the deferred sales incentive compensation was $2,072 and $1,404 for the six months ended June 30, 2020, and 2019, respectively. Deferred sales incentive compensation is included in other non-current assets on the condensed consolidated balance sheets and amortization expense is included in compensation and benefits expenses on the condensed consolidated statements of operations. No significant impairment loss for capitalized costs was recorded during the periods.

The Company has applied the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in compensation and benefits expenses in the condensed consolidated statements of operations.

Cost of Revenues

The following table summarizes cost of revenues by revenue category:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Asset-based	$	61,875	$	60,293	$	130,467	$	114,135
Subscription-based	6,807		6,697		13,084		14,374
Professional services and other	167		5,090		231		5,216
Total cost of revenues	$	68,849	$	72,080	$	143,782	$	133,725