(State or other jurisdiction of incorporation or organization) | (I.R.S Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of exchange on which registered | ||||||
ý | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | |||||
September 30, | December 31, | |||||||||||||
2021 | 2020 | |||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Fees receivable, net | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property and equipment, net | ||||||||||||||
Internally developed software, net | ||||||||||||||
Intangible assets, net | ||||||||||||||
Goodwill | ||||||||||||||
Operating lease right-of-use assets, net | ||||||||||||||
Other non-current assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Accrued expenses and other liabilities | $ | $ | ||||||||||||
Accounts payable | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Contingent consideration | ||||||||||||||
Deferred revenue | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Non-current operating lease liabilities | ||||||||||||||
Deferred tax liabilities, net | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies | ||||||||||||||
Equity: | ||||||||||||||
Stockholders’ equity: | ||||||||||||||
Preferred stock, par value $ | ||||||||||||||
Common stock, par value $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Treasury stock at cost, | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total stockholders’ equity | ||||||||||||||
Non-controlling interest | ( | |||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Asset-based | $ | $ | $ | $ | ||||||||||||||||||||||
Subscription-based | ||||||||||||||||||||||||||
Total recurring revenues | ||||||||||||||||||||||||||
Professional services and other revenues | ||||||||||||||||||||||||||
Total revenues | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Cost of revenues | ||||||||||||||||||||||||||
Compensation and benefits | ||||||||||||||||||||||||||
General and administration | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Income from operations | ||||||||||||||||||||||||||
Other expense, net | ( | ( | ( | ( | ||||||||||||||||||||||
Income (loss) before income tax provision (benefit) | ( | |||||||||||||||||||||||||
Income tax provision (benefit) | ( | ( | ||||||||||||||||||||||||
Net income (loss) | ( | |||||||||||||||||||||||||
Add: Net (income) loss attributable to non-controlling interest | ( | ( | ||||||||||||||||||||||||
Net income (loss) attributable to Envestnet, Inc. | $ | $ | $ | $ | ( | |||||||||||||||||||||
Net income (loss) per share attributable to Envestnet, Inc.: | ||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | ( | |||||||||||||||||||||
Diluted | $ | $ | $ | $ | ( | |||||||||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||
Diluted |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Net income (loss) attributable to Envestnet, Inc. | $ | $ | $ | $ | ( | |||||||||||||||||||||
Foreign currency translation gains (losses), net of taxes | ( | |||||||||||||||||||||||||
Comprehensive income (loss) attributable to Envestnet, Inc. | $ | $ | $ | $ | ( |
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Additional | Other | Non- | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Common | Paid-in | Comprehensive | Accumulated | controlling | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Loss | Deficit | Interest | Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
Adoption of ASU 2020-06, net of taxes of $ | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock - vesting of restricted stock units | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares withheld to satisfy tax withholdings | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Share repurchase | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation loss, net of taxes | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock - vesting of restricted stock units | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares withheld to satisfy tax withholdings | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Share repurchase | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Capital contribution - non-controlling interest | — | — | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation loss, net of taxes | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | $ |
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Additional | Other | Non- | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Common | Paid-in | Comprehensive | Accumulated | controlling | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Loss | Deficit | Interest | Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock - vesting of restricted stock units | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares withheld to satisfy tax withholdings | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Capital contribution - non-controlling interest | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation gain, net of taxes | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | $ |
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Additional | Other | Non- | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Common | Paid-in | Comprehensive | Accumulated | controlling | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Loss | Deficit | Interest | Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock - vesting of restricted stock units | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares withheld to satisfy tax withholdings | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation loss, net of taxes | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2020 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock - vesting of restricted stock units | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares withheld to satisfy tax withholdings | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Transfer of non-controlling units | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation gain (loss) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock - vesting of restricted stock units | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares withheld to satisfy tax withholdings | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Capital contribution - non-controlling interest | — | — | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Convertible Notes due 2025, net of offering costs and taxes of $ | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation gain (loss), net of taxes | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ |
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
OPERATING ACTIVITIES: | ||||||||||||||
Net income (loss) | $ | $ | ( | |||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Provision for doubtful accounts | ||||||||||||||
Deferred income taxes | ||||||||||||||
Non-cash compensation expense | ||||||||||||||
Non-cash interest expense | ||||||||||||||
Accretion on contingent consideration and purchase liability | ||||||||||||||
Payments of contingent consideration | ( | |||||||||||||
Fair market value adjustment to contingent consideration liability | ( | ( | ||||||||||||
Fair market value adjustment to investment in private company | ( | |||||||||||||
Gain on settlement of liability | ( | |||||||||||||
Gain on acquisition of equity method investment | ( | |||||||||||||
Loss allocation from equity method investments | ||||||||||||||
Impairment of right of use assets | ||||||||||||||
Other | ||||||||||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||
Fees receivable, net | ( | ( | ||||||||||||
Prepaid expenses and other current assets | ( | |||||||||||||
Other non-current assets | ( | |||||||||||||
Accrued expenses and other liabilities | ||||||||||||||
Accounts payable | ||||||||||||||
Deferred revenue | ( | |||||||||||||
Other non-current liabilities | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
INVESTING ACTIVITIES: | ||||||||||||||
Purchases of property and equipment | ( | ( | ||||||||||||
Capitalization of internally developed software | ( | ( | ||||||||||||
Investments in private companies | ( | ( | ||||||||||||
Acquisition of proprietary technology | ( | |||||||||||||
Acquisitions of businesses, net of cash acquired | ( | ( | ||||||||||||
Advance for technology solutions | ( | |||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
FINANCING ACTIVITIES: | ||||||||||||||
Proceeds from issuance of Convertible Notes due 2025 | ||||||||||||||
Convertible Notes due 2025 issuance costs | ( | |||||||||||||
Proceeds from borrowings on revolving credit facility | ||||||||||||||
Payments on revolving credit facility | ( | |||||||||||||
Capital contributions - non-controlling shareholders | ||||||||||||||
Payments of deferred consideration on prior acquisitions | ( | |||||||||||||
Payments of contingent consideration | ( | |||||||||||||
Proceeds from exercise of stock options | ||||||||||||||
Taxes paid in lieu of shares issued for stock-based compensation | ( | ( | ||||||||||||
Share repurchases | ( | |||||||||||||
Other | ( | |||||||||||||
Net cash provided by (used in) financing activities | ( | |||||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | ( | ( | ||||||||||||
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||||||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | ||||||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (See Note 2) | $ | $ | ||||||||||||
Supplemental disclosure of cash flow information - net cash paid during the period for income taxes | $ | $ | ||||||||||||
Supplemental disclosure of cash flow information - cash paid during the period for interest | ||||||||||||||
Supplemental disclosure of non-cash operating, investing and financing activities: | ||||||||||||||
Contingent consideration issued in acquisition of businesses | ||||||||||||||
Purchase liabilities included in accrued expenses and other liabilities | ||||||||||||||
Purchase liabilities included in other non-current liabilities | ||||||||||||||
Purchase of fixed assets included in accounts payable and accrued expenses and other liabilities | ||||||||||||||
Internally developed software costs included in accrued expenses and other liabilities | ||||||||||||||
Membership interest liabilities included in other non-current liabilities | ||||||||||||||
Leasehold improvements funded by lease incentive | ||||||||||||||
Assets obtained in exchange for lease liabilities | ||||||||||||||
Transfer of non-controlling units |
September 30, | September 30, | |||||||||||||
2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash included in prepaid expenses and other current assets | ||||||||||||||
Restricted cash included in other non-current assets | ||||||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
Preliminary Estimate | Measurement Period Adjustments | Revised Estimate | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Tangible assets acquired, net of cash(1) | $ | $ | $ | |||||||||||||||||
Total liabilities assumed | ( | ( | ||||||||||||||||||
Identifiable intangible assets | — | |||||||||||||||||||
Goodwill | ( | |||||||||||||||||||
Total net assets acquired | $ | $ | $ |
Preliminary Estimate (in thousands) | Estimated Useful Life in Years | Amortization Method | ||||||||||||||||||
Proprietary technology | $ | Straight-line | ||||||||||||||||||
Customer list | Accelerated | |||||||||||||||||||
Total intangible assets acquired | $ |
September 30, | December 31, | |||||||||||||
2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||
Prepaid technology | $ | $ | ||||||||||||
Non-income tax receivables | ||||||||||||||
Income tax prepayments and receivables | ||||||||||||||
Prepaid insurance | ||||||||||||||
Advance payroll taxes and benefits | ||||||||||||||
Other | ||||||||||||||
Total prepaid expenses and other current assets | $ | $ |
September 30, | December 31, | |||||||||||||||||||
Estimated Useful Life | 2021 | 2020 | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cost: | ||||||||||||||||||||
Computer equipment and software | $ | $ | ||||||||||||||||||
Leasehold improvements | Shorter of the lease term or useful life of the asset | |||||||||||||||||||
Office furniture and fixtures | ||||||||||||||||||||
Office equipment and other | ||||||||||||||||||||
Building and building improvements | ||||||||||||||||||||
Land | Not applicable | |||||||||||||||||||
Less: accumulated depreciation and amortization | ( | ( | ||||||||||||||||||
Total property and equipment, net | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Depreciation and amortization expense | $ | $ | $ | $ |
September 30, | December 31, | |||||||||||||||||||
Estimated Useful Life | 2021 | 2020 | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Internally developed software | $ | $ | ||||||||||||||||||
Less: accumulated amortization | ( | ( | ||||||||||||||||||
Internally developed software, net | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Amortization expense | $ | $ | $ | $ |
Envestnet Wealth Solutions | Envestnet Data & Analytics | Total | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | |||||||||||||||||
Harvest Acquisition | ||||||||||||||||||||
Foreign exchange rates | ( | ( | ||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ |
September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||
Gross | Net | Gross | Net | |||||||||||||||||||||||||||||||||||
Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | |||||||||||||||||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Customer lists | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Proprietary technologies | ( | ( | ||||||||||||||||||||||||||||||||||||
Trade names | ( | ( | ||||||||||||||||||||||||||||||||||||
Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Amortization expense | $ | $ | $ | $ |
September 30, | December 31, | |||||||||||||
2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||
Accrued investment manager fees | $ | $ | ||||||||||||
Accrued compensation and related taxes | ||||||||||||||
Accrued professional services | ||||||||||||||
Accrued technology | ||||||||||||||
Non-income tax payables | ||||||||||||||
Accrued purchase consideration | ||||||||||||||
Other accrued expenses | ||||||||||||||
Total accrued expenses and other liabilities | $ | $ |
September 30, | December 31, | |||||||||||||
2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||
Revolving credit facility balance | $ | $ | ||||||||||||
Convertible Notes due 2023 | $ | $ | ||||||||||||
Unamortized issuance costs on Convertible Notes due 2023 | ( | ( | ||||||||||||
Unaccreted discount on Convertible Notes due 2023 | ( | |||||||||||||
Convertible Notes due 2023 carrying value | $ | $ | ||||||||||||
Convertible Notes due 2025 | $ | $ | ||||||||||||
Unamortized issuance costs on Convertible Notes due 2025 | ( | ( | ||||||||||||
Unaccreted discount on Convertible Notes due 2025 | ( | |||||||||||||
Convertible Notes due 2025 carrying value | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Coupon interest | $ | $ | $ | $ | ||||||||||||||||||||||
Amortization of issuance costs | ||||||||||||||||||||||||||
Undrawn and other fees | ||||||||||||||||||||||||||
Interest on revolving credit facility | ||||||||||||||||||||||||||
Accretion of debt discount | ||||||||||||||||||||||||||
Total interest expense | $ | $ | $ | $ |
September 30, 2021 | ||||||||||||||||||||||||||
Fair Value | Level I | Level II | Level III | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | ||||||||||||||||||||||
Investment in private company | ||||||||||||||||||||||||||
Assets to fund deferred compensation liability | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Contingent consideration | $ | $ | $ | $ | ||||||||||||||||||||||
Deferred compensation liability | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
December 31, 2020 | ||||||||||||||||||||||||||
Fair Value | Level I | Level II | Level III | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | ||||||||||||||||||||||
Assets to fund deferred compensation liability | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Contingent consideration | $ | $ | $ | $ | ||||||||||||||||||||||
Deferred compensation liability | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Fair Value of Contingent Consideration Liabilities | ||||||||
(in thousands) | ||||||||
Balance at December 31, 2020 | $ | |||||||
Fair market value adjustment on contingent consideration liability | ( | |||||||
Accretion on contingent consideration | ||||||||
Payments of contingent consideration | ( | |||||||
Balance at September 30, 2021 | $ |
Fair Value of Assets to Fund Deferred Compensation Liability | ||||||||
(in thousands) | ||||||||
Balance at December 31, 2020 | $ | |||||||
Contributions | ||||||||
Fair value adjustments | ||||||||
Balance at September 30, 2021 | $ |
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Consolidated | Envestnet Wealth Solutions | Envestnet Data & Analytics | Consolidated | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Asset-based | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Subscription-based | ||||||||||||||||||||||||||||||||||||||
Total recurring revenues | ||||||||||||||||||||||||||||||||||||||
Professional services and other revenues | ||||||||||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Consolidated | Envestnet Wealth Solutions | Envestnet Data & Analytics | Consolidated | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Asset-based | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Subscription-based | ||||||||||||||||||||||||||||||||||||||
Total recurring revenues | ||||||||||||||||||||||||||||||||||||||
Professional services and other revenues | ||||||||||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Fidelity | % | % | % | % |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Fidelity | % | % | % | % |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
United States | $ | $ | $ | $ | ||||||||||||||||||||||
International | ||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ |
Years ending December 31, | (in thousands) | |||||||
Remainder of 2021 | $ | |||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
Thereafter | ||||||||
Total | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Asset-based | $ | $ | $ | $ | ||||||||||||||||||||||
Subscription-based | ||||||||||||||||||||||||||
Professional services and other | ||||||||||||||||||||||||||
Total cost of revenues | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Stock-based compensation expense | $ | $ | $ | $ | ||||||||||||||||||||||
Tax effect on stock-based compensation expense | ( | ( | ( | ( | ||||||||||||||||||||||
Net effect on income | $ | $ | $ | $ |
Weighted-Average | ||||||||||||||||||||||||||
Weighted- | Remaining | |||||||||||||||||||||||||
Average | Contractual Life | Aggregate | ||||||||||||||||||||||||
Options | Exercise Price | (Years) | Intrinsic Value | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Outstanding as of December 31, 2020 | $ | $ | ||||||||||||||||||||||||
Exercised | ( | |||||||||||||||||||||||||
Forfeited | ( | |||||||||||||||||||||||||
Outstanding as of September 30, 2021 | ||||||||||||||||||||||||||
Options exercisable | $ | $ |
RSUs | PSUs | |||||||||||||||||||||||||
Number of Shares | Weighted- Average Grant Date Fair Value per Share | Number of Shares | Weighted- Average Grant Date Fair Value per Share | |||||||||||||||||||||||
Outstanding as of December 31, 2020 | $ | $ | ||||||||||||||||||||||||
Granted | ||||||||||||||||||||||||||
Vested | ( | ( | ||||||||||||||||||||||||
Forfeited | ( | ( | ||||||||||||||||||||||||
Outstanding as of September 30, 2021 | ||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands, except for effective tax rate) | ||||||||||||||||||||||||||
Income (loss) before income tax provision (benefit) | $ | $ | $ | $ | ( | |||||||||||||||||||||
Income tax provision (benefit) | ( | ( | ||||||||||||||||||||||||
Effective tax rate | ( | % | % | % | % |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||||||||||||
Net income (loss) attributable to Envestnet, Inc. (a) | $ | $ | $ | $ | ( | |||||||||||||||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||||||||||
Basic (b) | ||||||||||||||||||||||||||
Effect of dilutive shares: | ||||||||||||||||||||||||||
Options to purchase common stock | ||||||||||||||||||||||||||
Unvested restricted stock units | ||||||||||||||||||||||||||
Convertible Notes | ||||||||||||||||||||||||||
Warrants | ||||||||||||||||||||||||||
Diluted (c) | ||||||||||||||||||||||||||
Net income (loss) per share attributable to Envestnet, Inc common stock: | ||||||||||||||||||||||||||
Basic (a/b) | $ | $ | $ | $ | ( | |||||||||||||||||||||
Diluted (a/c) | $ | $ | $ | $ | ( |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Options to purchase common stock | ||||||||||||||||||||||||||
Unvested RSUs and PSUs | ||||||||||||||||||||||||||
Warrants | ||||||||||||||||||||||||||
Convertible Notes | ||||||||||||||||||||||||||
Total anti-dilutive securities |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | $ | $ | $ | $ | ||||||||||||||||||||||
Envestnet Data & Analytics | ( | ( | ||||||||||||||||||||||||
Nonsegment operating expenses | ( | ( | ( | ( | ||||||||||||||||||||||
Income from operations | ||||||||||||||||||||||||||
Other expense, net | ( | ( | ( | ( | ||||||||||||||||||||||
Consolidated income (loss) before income tax benefit | ( | |||||||||||||||||||||||||
Income tax provision (benefit) | ( | ( | ||||||||||||||||||||||||
Consolidated net income (loss) | ( | |||||||||||||||||||||||||
Add: Net (income) loss attributable to non-controlling interest | ( | ( | ||||||||||||||||||||||||
Consolidated net income (loss) attributable to Envestnet, Inc. | $ | $ | $ | $ | ( |
September 30, | December 31, | |||||||||||||
2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||
Envestnet Wealth Solutions | $ | $ | ||||||||||||
Envestnet Data & Analytics | ||||||||||||||
Consolidated total assets | $ | $ |
September 30, | December 31, | |||||||||||||
2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||
United States | $ | $ | ||||||||||||
India | ||||||||||||||
Other | ||||||||||||||
Total long-lived assets, net | $ | $ |
As of | ||||||||||||||||||||||||||||||||
September 30, | December 31, | March 31, | June 30, | September 30, | ||||||||||||||||||||||||||||
2020 | 2020 | 2021 | 2021 | 2021 | ||||||||||||||||||||||||||||
(in millions, except accounts and advisors data) | ||||||||||||||||||||||||||||||||
Platform Assets | ||||||||||||||||||||||||||||||||
Assets under Management (“AUM”) | $ | 228,905 | $ | 263,043 | $ | 286,039 | $ | 315,422 | $ | 327,279 | ||||||||||||||||||||||
Assets under Administration (“AUA”) | 375,860 | 405,365 | 408,858 | 426,416 | 431,040 | |||||||||||||||||||||||||||
Total AUM/A | 604,765 | 668,408 | 694,897 | 741,838 | 758,319 | |||||||||||||||||||||||||||
Subscription | 3,498,353 | 3,892,814 | 4,132,917 | 4,447,733 | 4,670,827 | |||||||||||||||||||||||||||
Total Platform Assets | $ | 4,103,118 | $ | 4,561,222 | $ | 4,827,814 | $ | 5,189,571 | $ | 5,429,146 | ||||||||||||||||||||||
Platform Accounts | ||||||||||||||||||||||||||||||||
AUM | 1,018,817 | 1,073,122 | 1,138,183 | 1,209,761 | 1,276,066 | |||||||||||||||||||||||||||
AUA | 1,318,730 | 1,276,975 | 1,192,668 | 1,163,991 | 1,193,069 | |||||||||||||||||||||||||||
Total AUM/A | 2,337,547 | 2,350,097 | 2,330,851 | 2,373,752 | 2,469,135 | |||||||||||||||||||||||||||
Subscription | 10,639,399 | 11,079,048 | 11,453,434 | 11,712,573 | 14,810,664 | |||||||||||||||||||||||||||
Total Platform Accounts | 12,976,946 | 13,429,145 | 13,784,285 | 14,086,325 | 17,279,799 | |||||||||||||||||||||||||||
Advisors | ||||||||||||||||||||||||||||||||
AUM/A | 41,450 | 41,206 | 41,177 | 41,259 | 41,696 | |||||||||||||||||||||||||||
Subscription | 63,862 | 65,104 | 65,724 | 66,597 | 66,489 | |||||||||||||||||||||||||||
Total Advisors | 105,312 | 106,310 | 106,901 | 107,856 | 108,185 |
Asset Rollforward - Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||
As of | Gross | Net | Market | As of | ||||||||||||||||||||||||||||||||||
6/30/2021 | Sales | Redemptions | Flows | Impact | 9/30/2021 | |||||||||||||||||||||||||||||||||
(in millions, except account data) | ||||||||||||||||||||||||||||||||||||||
AUM | $ | 315,422 | $ | 27,197 | $ | (12,703) | $ | 14,494 | $ | (2,637) | $ | 327,279 | ||||||||||||||||||||||||||
AUA | 426,416 | 32,375 | (22,274) | 10,101 | (5,477) | 431,040 | ||||||||||||||||||||||||||||||||
Total AUM/A | $ | 741,838 | $ | 59,572 | $ | (34,977) | $ | 24,595 | $ | (8,114) | $ | 758,319 | ||||||||||||||||||||||||||
Fee-Based Accounts | 2,373,752 | 95,383 | 2,469,135 |
Asset Rollforward - Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
As of | Gross | Net | Market | Reclass to | As of | |||||||||||||||||||||||||||||||||||||||
12/31/2020 | Sales | Redemptions | Flows | Impact | Subscription | 9/30/2021 | ||||||||||||||||||||||||||||||||||||||
(in millions, except account data) | ||||||||||||||||||||||||||||||||||||||||||||
AUM | $ | 263,043 | $ | 82,952 | $ | (38,353) | $ | 44,599 | $ | 19,637 | $ | — | $ | 327,279 | ||||||||||||||||||||||||||||||
AUA | 405,365 | 85,798 | (68,994) | 16,804 | 22,200 | (13,329) | 431,040 | |||||||||||||||||||||||||||||||||||||
Total AUM/A | $ | 668,408 | $ | 168,750 | $ | (107,347) | $ | 61,403 | $ | 41,837 | $ | (13,329) | $ | 758,319 | ||||||||||||||||||||||||||||||
Fee-Based Accounts | 2,350,097 | 227,018 | (107,980) | 2,469,135 |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
September 30, | Percent | September 30, | Percent | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Asset-based | $ | 184,008 | $ | 137,744 | 34 | % | $ | 513,458 | $ | 394,801 | 30 | % | ||||||||||||||||||||||||||
Subscription-based | 113,572 | 107,897 | 5 | % | 335,905 | 317,427 | 6 | % | ||||||||||||||||||||||||||||||
Total recurring revenues | 297,580 | 245,641 | 21 | % | 849,363 | 712,228 | 19 | % | ||||||||||||||||||||||||||||||
Professional services and other revenues | 5,473 | 6,918 | (21) | % | 17,533 | 22,183 | (21) | % | ||||||||||||||||||||||||||||||
Total revenues | 303,053 | 252,559 | 20 | % | 866,896 | 734,411 | 18 | % | ||||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Cost of revenues | 109,836 | 78,545 | 40 | % | 303,199 | 222,327 | 36 | % | ||||||||||||||||||||||||||||||
Compensation and benefits | 109,839 | 94,428 | 16 | % | 316,101 | 300,423 | 5 | % | ||||||||||||||||||||||||||||||
General and administration | 39,393 | 38,979 | 1 | % | 117,463 | 118,537 | (1) | % | ||||||||||||||||||||||||||||||
Depreciation and amortization | 29,850 | 28,951 | 3 | % | 88,252 | 85,077 | 4 | % | ||||||||||||||||||||||||||||||
Total operating expenses | 288,918 | 240,903 | 20 | % | 825,015 | 726,364 | 14 | % | ||||||||||||||||||||||||||||||
Income from operations | 14,135 | 11,656 | 21 | % | 41,881 | 8,047 | * | |||||||||||||||||||||||||||||||
Other expense, net | (3,551) | (8,836) | (60) | % | (14,803) | (18,546) | (20) | % | ||||||||||||||||||||||||||||||
Income (loss) before income tax provision (benefit) | 10,584 | 2,820 | * | 27,078 | (10,499) | * | ||||||||||||||||||||||||||||||||
Income tax provision (benefit) | (854) | 497 | * | 9,074 | (161) | * | ||||||||||||||||||||||||||||||||
Net income (loss) | 11,438 | 2,323 | * | 18,004 | (10,338) | * | ||||||||||||||||||||||||||||||||
Add: Net (income) loss attributable to non-controlling interest | 302 | (413) | * | 401 | (12) | * | ||||||||||||||||||||||||||||||||
Net income (loss) attributable to Envestnet, Inc. | $ | 11,740 | $ | 1,910 | * | $ | 18,405 | $ | (10,350) | * |
Three Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||
Income before income tax provision (benefit) | $ | 10,584 | $ | 2,820 | ||||||||||
Income tax provision (benefit) | (854) | 497 | ||||||||||||
Effective tax rate | (8.1) | % | 17.6 | % |
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||
Income (loss) before income tax provision (benefit) | $ | 27,078 | $ | (10,499) | ||||||||||
Income tax provision (benefit) | 9,074 | (161) | ||||||||||||
Effective tax rate | 33.5 | % | 1.5 | % |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | $ | 34,386 | $ | 29,683 | $ | 101,042 | $ | 60,890 | ||||||||||||||||||
Envestnet Data & Analytics | 1,265 | (1,238) | 3,896 | (6,764) | ||||||||||||||||||||||
Nonsegment operating expenses | (21,516) | (16,789) | (63,057) | (46,079) | ||||||||||||||||||||||
Income from operations | 14,135 | 11,656 | 41,881 | 8,047 | ||||||||||||||||||||||
Other expense, net | (3,551) | (8,836) | (14,803) | (18,546) | ||||||||||||||||||||||
Consolidated income (loss) before income tax benefit | 10,584 | 2,820 | 27,078 | (10,499) | ||||||||||||||||||||||
Income tax provision (benefit) | (854) | 497 | 9,074 | (161) | ||||||||||||||||||||||
Consolidated net income (loss) | 11,438 | 2,323 | 18,004 | (10,338) | ||||||||||||||||||||||
Add: Net (income) loss attributable to non-controlling interest | 302 | (413) | 401 | (12) | ||||||||||||||||||||||
Consolidated net income (loss) attributable to Envestnet, Inc. | $ | 11,740 | $ | 1,910 | $ | 18,405 | $ | (10,350) |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
September 30, | Percent | September 30, | Percent | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Asset-based | $ | 184,008 | $ | 137,744 | 34 | % | $ | 513,458 | $ | 394,801 | 30 | % | ||||||||||||||||||||||||||
Subscription-based | 66,988 | 62,783 | 7 | % | 197,663 | 184,516 | 7 | % | ||||||||||||||||||||||||||||||
Total recurring revenues | 250,996 | 200,527 | 25 | % | 711,121 | 579,317 | 23 | % | ||||||||||||||||||||||||||||||
Professional services and other revenues | 3,738 | 3,767 | (1) | % | 10,320 | 11,082 | (7) | % | ||||||||||||||||||||||||||||||
Total revenues | 254,734 | 204,294 | 25 | % | 721,441 | 590,399 | 22 | % | ||||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Cost of revenues | 103,742 | 72,435 | 43 | % | 285,887 | 205,338 | 39 | % | ||||||||||||||||||||||||||||||
Compensation and benefits | 67,592 | 59,522 | 14 | % | 195,560 | 194,906 | — | % | ||||||||||||||||||||||||||||||
General and administration | 26,086 | 22,248 | 17 | % | 71,669 | 69,358 | 3 | % | ||||||||||||||||||||||||||||||
Depreciation and amortization | 22,928 | 20,406 | 12 | % | 67,283 | 59,907 | 12 | % | ||||||||||||||||||||||||||||||
Total operating expenses | 220,348 | 174,611 | 26 | % | 620,399 | 529,509 | 17 | % | ||||||||||||||||||||||||||||||
Income from operations | $ | 34,386 | $ | 29,683 | 16 | % | $ | 101,042 | $ | 60,890 | 66 | % |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
September 30, | Percent | September 30, | Percent | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Subscription-based | $ | 46,584 | $ | 45,114 | 3 | % | $ | 138,242 | $ | 132,911 | 4 | % | ||||||||||||||||||||||||||
Professional services and other revenues | 1,735 | 3,151 | (45) | % | 7,213 | 11,101 | (35) | % | ||||||||||||||||||||||||||||||
Total revenues | 48,319 | 48,265 | — | % | 145,455 | 144,012 | 1 | % | ||||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Cost of revenues | 6,094 | 6,110 | — | % | 17,312 | 16,989 | 2 | % | ||||||||||||||||||||||||||||||
Compensation and benefits | 26,468 | 26,540 | — | % | 77,765 | 82,455 | (6) | % | ||||||||||||||||||||||||||||||
General and administration | 7,570 | 8,308 | (9) | % | 25,513 | 26,162 | (2) | % | ||||||||||||||||||||||||||||||
Depreciation and amortization | 6,922 | 8,545 | (19) | % | 20,969 | 25,170 | (17) | % | ||||||||||||||||||||||||||||||
Total operating expenses | 47,054 | 49,503 | (5) | % | 141,559 | 150,776 | (6) | % | ||||||||||||||||||||||||||||||
Income (loss) from operations | $ | 1,265 | $ | (1,238) | * | $ | 3,896 | $ | (6,764) | * |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
September 30, | Percent | September 30, | Percent | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Compensation and benefits | $ | 15,779 | $ | 8,366 | 89 | % | $ | 42,776 | $ | 23,062 | 85 | % | ||||||||||||||||||||||||||
General and administration | 5,737 | 8,423 | (32) | % | 20,281 | 23,017 | (12) | % | ||||||||||||||||||||||||||||||
Nonsegment operating expenses | $ | 21,516 | $ | 16,789 | 28 | % | $ | 63,057 | $ | 46,079 | 37 | % |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Total revenues | $ | 303,053 | $ | 252,559 | $ | 866,896 | $ | 734,411 | ||||||||||||||||||
Deferred revenue fair value adjustment | 67 | 91 | 227 | 607 | ||||||||||||||||||||||
Adjusted revenues | $ | 303,120 | $ | 252,650 | $ | 867,123 | $ | 735,018 |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Net income (loss) | $ | 11,438 | $ | 2,323 | $ | 18,004 | $ | (10,338) | ||||||||||||||||||
Add (deduct): | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 67 | 91 | 227 | 607 | ||||||||||||||||||||||
Interest income | (202) | (262) | (569) | (850) | ||||||||||||||||||||||
Interest expense | 4,242 | 8,139 | 12,682 | 21,907 | ||||||||||||||||||||||
Income tax provision (benefit) | (854) | 497 | 9,074 | (161) | ||||||||||||||||||||||
Depreciation and amortization | 29,850 | 28,951 | 88,252 | 85,077 | ||||||||||||||||||||||
Non-cash compensation expense | 18,885 | 15,852 | 50,307 | 43,197 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 3,403 | 4,993 | 11,215 | 14,461 | ||||||||||||||||||||||
Severance | 207 | 2,715 | 10,498 | 18,566 | ||||||||||||||||||||||
Accretion on contingent consideration and purchase liability | 81 | 398 | 656 | 1,308 | ||||||||||||||||||||||
Fair market value adjustment on contingent consideration liability | (927) | (74) | (1,067) | (2,056) | ||||||||||||||||||||||
Fair market value adjustment to investment in private company | — | — | (758) | — | ||||||||||||||||||||||
Litigation and regulatory related expenses | 1,512 | 1,809 | 5,159 | 6,029 | ||||||||||||||||||||||
Foreign currency | 97 | (37) | 110 | (68) | ||||||||||||||||||||||
Gain on acquisition of equity method investment | — | — | — | (4,230) | ||||||||||||||||||||||
Gain on settlement of liability | (1,206) | — | (1,206) | — | ||||||||||||||||||||||
Gain on insurance reimbursement | (968) | — | (968) | — | ||||||||||||||||||||||
Non-income tax expense adjustment | (831) | 1,795 | (1,102) | 1,341 | ||||||||||||||||||||||
Loss allocation from equity method investments | 1,508 | 994 | 5,553 | 4,280 | ||||||||||||||||||||||
Income attributable to non-controlling interest | (114) | (603) | (554) | (1,103) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 66,188 | $ | 67,581 | $ | 205,513 | $ | 177,967 |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(in thousands, except share and per share information) | ||||||||||||||||||||||||||
Net income (loss) | $ | 11,438 | $ | 2,323 | $ | 18,004 | $ | (10,338) | ||||||||||||||||||
Income tax provision (benefit) (1) | (854) | 497 | 9,074 | (161) | ||||||||||||||||||||||
Income (loss) before income tax provision (benefit) | 10,584 | 2,820 | 27,078 | (10,499) | ||||||||||||||||||||||
Add (deduct): | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 67 | 91 | 227 | 607 | ||||||||||||||||||||||
Non-cash interest expense | 1,443 | 4,738 | 4,295 | 10,682 | ||||||||||||||||||||||
Cash interest - Convertible Notes (2) | 2,479 | — | 7,439 | — | ||||||||||||||||||||||
Non-cash compensation expense | 18,885 | 15,852 | 50,307 | 43,197 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 3,403 | 4,993 | 11,215 | 14,461 | ||||||||||||||||||||||
Severance | 207 | 2,715 | 10,498 | 18,566 | ||||||||||||||||||||||
Accretion on contingent consideration and purchase liability | 81 | 398 | 656 | 1,308 | ||||||||||||||||||||||
Fair market value adjustment on contingent consideration liability | (927) | (74) | (1,067) | (2,056) | ||||||||||||||||||||||
Fair market value adjustment to investment in private company | — | — | (758) | — | ||||||||||||||||||||||
Amortization of acquired intangibles | 17,390 | 18,510 | 51,370 | 56,014 | ||||||||||||||||||||||
Litigation and regulatory related expenses | 1,512 | 1,809 | 5,159 | 6,029 | ||||||||||||||||||||||
Foreign currency | 97 | (37) | 110 | (68) | ||||||||||||||||||||||
Gain on acquisition of equity method investment | — | — | — | (4,230) | ||||||||||||||||||||||
Gain on settlement of liability | (1,206) | — | (1,206) | — | ||||||||||||||||||||||
Gain on insurance reimbursement | (968) | — | (968) | — | ||||||||||||||||||||||
Non-income tax expense adjustment | (831) | 1,795 | (1,102) | 1,341 | ||||||||||||||||||||||
Loss allocation from equity method investments | 1,508 | 994 | 5,553 | 4,280 | ||||||||||||||||||||||
Income attributable to non-controlling interest | (114) | (603) | (554) | (1,103) | ||||||||||||||||||||||
Adjusted net income before income tax effect | 53,610 | 54,001 | 168,252 | 138,529 | ||||||||||||||||||||||
Income tax effect (3) | (13,670) | (13,772) | (42,904) | (35,325) | ||||||||||||||||||||||
Adjusted net income | $ | 39,940 | $ | 40,229 | $ | 125,348 | $ | 103,204 | ||||||||||||||||||
Basic number of weighted-average shares outstanding | 54,547,858 | 53,800,048 | 54,400,247 | 53,464,101 | ||||||||||||||||||||||
Effect of dilutive shares: | ||||||||||||||||||||||||||
Options to purchase common stock | 201,103 | 331,728 | 207,281 | 458,232 | ||||||||||||||||||||||
Unvested restricted stock units | 570,515 | 610,442 | 614,005 | 548,858 | ||||||||||||||||||||||
Convertible notes | 9,898,549 | 730,267 | 9,898,549 | 280,375 | ||||||||||||||||||||||
Warrants | 69,151 | 86,498 | 66,439 | 46,562 | ||||||||||||||||||||||
Diluted number of weighted-average shares outstanding | 65,287,176 | 55,558,983 | 65,186,521 | 54,798,128 | ||||||||||||||||||||||
Adjusted net income per share - diluted | $ | 0.61 | $ | 0.72 | $ | 1.92 | $ | 1.88 | ||||||||||||||||||
Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Nonsegment | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Revenues | $ | 254,734 | $ | 48,319 | $ | — | $ | 303,053 | ||||||||||||||||||
Deferred revenue fair value adjustment | 67 | — | — | 67 | ||||||||||||||||||||||
Adjusted revenues | 254,801 | 48,319 | — | 303,120 | ||||||||||||||||||||||
Income (loss) from operations | $ | 34,386 | $ | 1,265 | $ | (21,516) | $ | 14,135 | ||||||||||||||||||
Add: | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 67 | — | — | 67 | ||||||||||||||||||||||
Depreciation and amortization | 22,928 | 6,922 | — | 29,850 | ||||||||||||||||||||||
Non-cash compensation expense | 9,661 | 3,667 | 5,557 | 18,885 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 2,863 | (55) | 595 | 3,403 | ||||||||||||||||||||||
Severance | (49) | 227 | 29 | 207 | ||||||||||||||||||||||
Accretion on contingent consideration and purchase liability | 62 | 19 | — | 81 | ||||||||||||||||||||||
Fair market value adjustment on contingent consideration liability | — | (927) | — | (927) | ||||||||||||||||||||||
Litigation and regulatory related expenses | — | 1,512 | — | 1,512 | ||||||||||||||||||||||
Non-income tax expense adjustment | (905) | 74 | — | (831) | ||||||||||||||||||||||
Income attributable to non-controlling interest | (114) | — | — | (114) | ||||||||||||||||||||||
Other | (63) | (9) | (8) | (80) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 68,836 | $ | 12,695 | $ | (15,343) | $ | 66,188 |
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Nonsegment | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Revenues | $ | 204,294 | $ | 48,265 | $ | — | $ | 252,559 | ||||||||||||||||||
Deferred revenue fair value adjustment | 91 | — | — | 91 | ||||||||||||||||||||||
Adjusted revenues | 204,385 | 48,265 | — | 252,650 | ||||||||||||||||||||||
Income (loss) from operations | $ | 29,683 | $ | (1,238) | $ | (16,789) | $ | 11,656 | ||||||||||||||||||
Add: | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 91 | — | — | 91 | ||||||||||||||||||||||
Depreciation and amortization | 20,406 | 8,545 | — | 28,951 | ||||||||||||||||||||||
Non-cash compensation expense | 8,685 | 4,458 | 2,709 | 15,852 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 944 | 33 | 4,016 | 4,993 | ||||||||||||||||||||||
Severance | 2,154 | 495 | 66 | 2,715 | ||||||||||||||||||||||
Accretion on contingent consideration and purchase liability | 341 | 57 | — | 398 | ||||||||||||||||||||||
Fair market value adjustment on contingent consideration liability | — | (74) | — | (74) | ||||||||||||||||||||||
Litigation and regulatory related expenses | — | 1,809 | — | 1,809 | ||||||||||||||||||||||
Non-income tax expense adjustment | 1,860 | (65) | — | 1,795 | ||||||||||||||||||||||
Income attributable to non-controlling interest | (603) | — | — | (603) | ||||||||||||||||||||||
Other | (2) | — | — | (2) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 63,559 | $ | 14,020 | $ | (9,998) | $ | 67,581 |
Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Nonsegment | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Revenues | $ | 721,441 | $ | 145,455 | $ | — | $ | 866,896 | ||||||||||||||||||
Deferred revenue fair value adjustment | 227 | — | — | 227 | ||||||||||||||||||||||
Adjusted revenues | $ | 721,668 | $ | 145,455 | $ | — | $ | 867,123 | ||||||||||||||||||
Income (loss) from operations | $ | 101,042 | $ | 3,896 | $ | (63,057) | $ | 41,881 | ||||||||||||||||||
Add: | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 227 | — | — | 227 | ||||||||||||||||||||||
Depreciation and amortization | 67,283 | 20,969 | — | 88,252 | ||||||||||||||||||||||
Non-cash compensation expense | 27,080 | 9,691 | 13,536 | 50,307 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 8,049 | 119 | 3,047 | 11,215 | ||||||||||||||||||||||
Severance | 4,134 | 3,634 | 2,730 | 10,498 | ||||||||||||||||||||||
Accretion on contingent consideration and purchase liability | 572 | 84 | — | 656 | ||||||||||||||||||||||
Fair market value adjustment on contingent consideration liability | — | (1,067) | — | (1,067) | ||||||||||||||||||||||
Litigation and regulatory related expenses | — | 5,159 | — | 5,159 | ||||||||||||||||||||||
Non-income tax expense adjustment | (1,335) | 233 | — | (1,102) | ||||||||||||||||||||||
Income attributable to non-controlling interest | (554) | — | — | (554) | ||||||||||||||||||||||
Other | 41 | — | — | 41 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 206,539 | $ | 42,718 | $ | (43,744) | $ | 205,513 |
Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Nonsegment | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Revenues | $ | 590,399 | $ | 144,012 | $ | — | $ | 734,411 | ||||||||||||||||||
Deferred revenue fair value adjustment | 607 | — | — | 607 | ||||||||||||||||||||||
Adjusted revenues | $ | 591,006 | $ | 144,012 | $ | — | $ | 735,018 | ||||||||||||||||||
Income (loss) from operations | $ | 60,890 | $ | (6,764) | $ | (46,079) | $ | 8,047 | ||||||||||||||||||
Add: | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 607 | — | — | 607 | ||||||||||||||||||||||
Depreciation and amortization | 59,907 | 25,170 | — | 85,077 | ||||||||||||||||||||||
Non-cash compensation expense | 27,437 | 11,665 | 6,619 | 45,721 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 5,864 | 489 | 8,108 | 14,461 | ||||||||||||||||||||||
Severance | 14,593 | 2,587 | 1,386 | 18,566 | ||||||||||||||||||||||
Accretion on contingent consideration and purchase liability | 1,087 | 221 | — | 1,308 | ||||||||||||||||||||||
Fair market value adjustment on contingent consideration liability | — | (2,056) | — | (2,056) | ||||||||||||||||||||||
Litigation and regulatory related expenses | — | 6,029 | — | 6,029 | ||||||||||||||||||||||
Non-income tax expense adjustment | 1,532 | (191) | — | 1,341 | ||||||||||||||||||||||
Income attributable to non-controlling interest | (1,103) | — | — | (1,103) | ||||||||||||||||||||||
Other | (31) | — | — | (31) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 170,783 | $ | 37,150 | $ | (29,966) | $ | 177,967 |
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||
Net cash provided by operating activities | $ | 169,974 | $ | 131,679 | ||||||||||
Net cash used in investing activities | (135,040) | (83,213) | ||||||||||||
Net cash provided by (used in) financing activities | (25,156) | 232,854 | ||||||||||||
Effect of exchange rate on changes on cash | (544) | (1,009) | ||||||||||||
Net increase in cash, cash equivalents and restricted cash | 9,234 | 280,311 | ||||||||||||
Cash, cash equivalents and restricted cash, end of period | 393,948 | 363,066 |
Exhibit No. | Description | |||||||
10.1 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document * | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document * | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document * | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document * | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document * | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
ENVESTNET, INC. | ||||||||
By: | /s/ William C. Crager | |||||||
William C. Crager | ||||||||
Chief Executive Officer | ||||||||
Principal Executive Officer | ||||||||
By: | /s/ Peter H. D’Arrigo | |||||||
Peter H. D’Arrigo | ||||||||
Chief Financial Officer | ||||||||
Principal Financial Officer | ||||||||
By: | /s/ Matthew J. Majoros | |||||||
Matthew J. Majoros | ||||||||
Senior Vice President, Financial Reporting | ||||||||
Principal Accounting Officer |
Date: November 8, 2021 | /s/ William C. Crager | ||||
William C. Crager | |||||
Chief Executive Officer | |||||
(Principal Executive Officer) |
Date: November 8, 2021 | /s/ Peter H. D’Arrigo | ||||
Peter H. D’Arrigo | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) |
/s/ William C. Crager | ||
By: William C. Crager | ||
Chief Executive Officer | ||
(Principal Executive Officer) | ||
Dated: November 8, 2021 |
/s/ Peter H. D’Arrigo | ||
By: Peter H. D’Arrigo | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
Dated: November 8, 2021 |
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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 68,636,215 | 67,832,706 |
Common stock, shares outstanding (in shares) | 54,617,904 | 54,093,535 |
Treasury stock (in shares) | 14,018,311 | 13,739,171 |
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Revenues: | ||||
Total revenues | $ 303,053 | $ 252,559 | $ 866,896 | $ 734,411 |
Operating expenses: | ||||
Cost of revenues | 109,836 | 78,545 | 303,199 | 222,327 |
Compensation and benefits | 109,839 | 94,428 | 316,101 | 300,423 |
General and administration | 39,393 | 38,979 | 117,463 | 118,537 |
Depreciation and amortization | 29,850 | 28,951 | 88,252 | 85,077 |
Total operating expenses | 288,918 | 240,903 | 825,015 | 726,364 |
Income from operations | 14,135 | 11,656 | 41,881 | 8,047 |
Other expense, net | (3,551) | (8,836) | (14,803) | (18,546) |
Income (loss) before income tax provision (benefit) | 10,584 | 2,820 | 27,078 | (10,499) |
Income tax provision (benefit) | (854) | 497 | 9,074 | (161) |
Net income (loss) | 11,438 | 2,323 | 18,004 | (10,338) |
Add: Net (income) loss attributable to non-controlling interest | 302 | (413) | 401 | (12) |
Net income (loss) attributable to Envestnet, Inc. | $ 11,740 | $ 1,910 | $ 18,405 | $ (10,350) |
Net income (loss) per share attributable to Envestnet, Inc.: | ||||
Basic (in dollars per share) | $ 0.22 | $ 0.04 | $ 0.34 | $ (0.19) |
Diluted (in dollars per share) | $ 0.21 | $ 0.03 | $ 0.33 | $ (0.19) |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 54,547,858 | 53,800,048 | 54,400,247 | 53,464,101 |
Diluted (in shares) | 55,388,627 | 55,558,983 | 55,287,972 | 53,464,101 |
Total recurring revenues | ||||
Revenues: | ||||
Total revenues | $ 297,580 | $ 245,641 | $ 849,363 | $ 712,228 |
Asset-based | ||||
Revenues: | ||||
Total revenues | 184,008 | 137,744 | 513,458 | 394,801 |
Operating expenses: | ||||
Cost of revenues | 102,298 | 71,133 | 281,829 | 201,600 |
Subscription-based | ||||
Revenues: | ||||
Total revenues | 113,572 | 107,897 | 335,905 | 317,427 |
Operating expenses: | ||||
Cost of revenues | 7,355 | 7,291 | 20,986 | 20,375 |
Professional services and other revenues | ||||
Revenues: | ||||
Total revenues | 5,473 | 6,918 | 17,533 | 22,183 |
Operating expenses: | ||||
Cost of revenues | $ 183 | $ 121 | $ 384 | $ 352 |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) attributable to Envestnet, Inc. | $ 11,740 | $ 1,910 | $ 18,405 | $ (10,350) |
Foreign currency translation gains (losses), net of taxes | 270 | 1,739 | (1,618) | 290 |
Comprehensive income (loss) attributable to Envestnet, Inc. | $ 12,010 | $ 3,649 | $ 16,787 | $ (10,060) |
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income tax provision (benefit) | $ 497 | ||
Issuance of Convertible Notes due 2025, net of offering costs and taxes | $ 8,617 | ||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-08 [Member] | Accounting Standards Update 2016-13 [Member] | |
Cumulative Effect, Period of Adoption, Adjustment | |||
Income tax provision (benefit) | $ 7,641 |
Organization and Description of Business |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Envestnet, Inc. (“Envestnet”) through its subsidiaries (collectively, the “Company”) is transforming the way financial advice and wellness are delivered. Its mission is to empower advisors and financial service providers with innovative technology, solutions and intelligence to make financial wellness a reality for everyone. Through a combination of platform enhancements, partnerships and acquisitions, Envestnet provides a unique financial network connecting technology, solutions and data, delivering better intelligence and enabling its customers to drive better outcomes. Envestnet is organized around two primary, complementary business segments. Financial information about each business segment is contained in “Note 15—Segment Information” to the condensed consolidated financial statements.
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Basis of Presentation |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 have not been audited by an independent registered public accounting firm. These unaudited condensed consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the year ended December 31, 2020 and reflect all normal recurring adjustments which are, in the opinion of management, necessary to present fairly the Company’s financial position as of September 30, 2021 and the results of operations, equity, comprehensive income (loss) and cash flows for the periods presented herein. The unaudited condensed consolidated financial statements include the accounts of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. Accounts for the Envestnet Wealth Solutions segment that are denominated in a non-U.S. currency have been re-measured using the U.S. dollar as the functional currency. Certain accounts within the Envestnet Data & Analytics segment are recorded and measured in foreign currencies. The assets and liabilities for those subsidiaries with a functional currency other than the U.S. dollar are translated at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates. Differences arising from these foreign currency translations are recorded in the unaudited condensed consolidated balance sheets as accumulated other comprehensive income (loss) within stockholders' equity. The Company is also subject to gains and losses from foreign currency denominated transactions and the remeasurement of foreign currency denominated balance sheet accounts, both of which are included in other expense, net in the condensed consolidated statements of operations. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the operating results to be expected for other interim periods or for the full fiscal year. The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. References to GAAP in these notes are to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification™, sometimes referred to as the codification or “ASC.” These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 26, 2021. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates. The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported within the condensed consolidated statements of cash flows:
Financial Impacts Related To COVID-19 On March 11, 2020, the World Health Organization declared the outbreak of COVID-19, a novel strain of Coronavirus, a global pandemic. This outbreak continues to cause disruptions to businesses and markets worldwide as the virus spreads. The extent of the effect on the Company’s operational and financial performance will continue to depend on future developments, including the duration, spread and intensity of the pandemic, and governmental, regulatory and private sector responses, all of which are uncertain and difficult to predict. Although the Company is unable to estimate the overall financial effect of the pandemic at this time, as the pandemic continues, it could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows. As of September 30, 2021, these condensed consolidated financial statements do not reflect any adjustments as a result of the pandemic. Related Party Transactions The Company has a 4.3% membership interest in a private services company that it accounts for using the equity method of accounting and is considered to be a related party. Revenues from the private services company totaled $4.2 million and $2.9 million in the three months ended September 30, 2021 and 2020, respectively. Revenues from the private services company totaled $11.9 million and $8.0 million in the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021 and December 31, 2020, the Company had recorded a net receivable of $3.3 million and $2.1 million, respectively, from the private services company. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements—In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This update aims to reduce complexity within the accounting for income taxes as part of the simplification initiative. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2020. These changes became effective for the Company's fiscal year beginning January 1, 2021. This standard will be applied prospectively. Adoption of this standard did not have a material impact on the Company's consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity.” This update simplifies the accounting for certain convertible instruments by reducing the number of accounting models available for convertible debt instruments and revises Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. Under the new guidance, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. In addition, the new guidance requires the if-converted method to be applied for all convertible instruments. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2021. Early adoption of the standard is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Adoption of the standard requires using either a modified retrospective or a full retrospective approach. The Company has early adopted this standard as of January 1, 2021 using the modified retrospective approach. Adoption of this standard resulted in a decrease to accumulated deficit of $28.6 million (net of $0.9 million in taxes), a decrease to paid-in capital of $108.5 million (net of $6.7 million in taxes) and an increase to Convertible Notes of $87.5 million. Interest expense recognized in future periods is expected to be reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost, with an expected decrease of approximately $22.1 million in 2021 as a result of the adoption. The adoption of ASU 2020-06 had no impact on the Company's consolidated statements of cash flows.
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Acquisitions |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Acquisition of Proprietary Technology The Company previously owned approximately 29% of the outstanding units in a privately held company and accounted for it as an equity method investment. On March 11, 2021, the Company entered into an intellectual property purchase agreement with this privately held company to acquire all of the proprietary technology developed by the privately held company for approximately $35.5 million. Concurrent with the intellectual property purchase agreement, the Company also entered into a redemption agreement with the same privately held company to redeem the Company's previously held equity interest for approximately $10.0 million. The Company accounted for these two arrangements as a single unit of account. As of the acquisition date, the net cost of the proprietary technology acquired, including capitalized transaction costs, was approximately $24.5 million, which will be amortized over a five-year period on a straight-line basis. The proprietary technology has been integrated into the Envestnet Wealth Solutions segment. Acquisition of Harvest On April 7, 2021, pursuant to an agreement and plan of merger (the “Merger Agreement”), dated as of March 31, 2021, between, among others, Harvest Savings & Wealth Technologies (“Harvest”), a Delaware corporation, and Bounty Merger Sub, Inc, a wholly-owned subsidiary of the Company (“Merger Sub”), the Company completed the merger of Harvest with and into Merger Sub, with Merger Sub continuing as the surviving corporation (the “Harvest Acquisition”) and operating as a wholly-owned subsidiary of Envestnet. Harvest has been integrated into the Envestnet Wealth Solutions segment. Harvest provides automated goals-based saving and wealth solutions tools to customers of banks, credit unions, trust companies, and other financial institutions. The acquisition optimizes the Company's API-based financial wellness ecosystem, and also helps strengthen the Company's foothold to enable embedded finance, which the Company sees as a key driver of the future of financial services. In connection with the Harvest Acquisition, the Company paid estimated consideration of $32.8 million (of which $3.0 million is being held in escrow for 18 months after the closing date), net of cash acquired, subject to certain post-closing adjustments. The Company funded the acquisition with cash on hand. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
(1) The Company recorded measurement period adjustments of $4.0 million primarily due to the establishment of deferred tax assets in the three months ended September 30, 2021. The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, primarily related to an increase in future revenues as a result of potential cross selling opportunities, as well as enhancements to the Company's existing technologies. The goodwill is not deductible for income tax purposes. A summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows:
The estimated fair values of certain of the assets and liabilities acquired are provisional and based on information that was available to the Company as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation and other studies that are in progress and not yet at the point where there is sufficient information for a definitive measurement. The Company believes the preliminary information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair values reflected herein are subject to change and such changes could be significant. The Company expects to finalize the valuation of tangible assets acquired, liabilities assumed, identifiable intangible assets and goodwill balances and complete the acquisition accounting as soon as reasonably practicable but no later than April 7, 2022. The results of Harvest’s operations are included in the condensed consolidated statements of operations beginning April 7, 2021 and were not considered material to the Company’s results of operations. For the three and nine months ended September 30, 2021, the Company’s acquisition related costs were not material, and are included in general and administration expenses. The Company may incur additional acquisition related costs over the remainder of 2021.
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Prepaid Expenses and Other Current Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following:
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Property and Equipment, Net |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consisted of the following:
During the three and nine months ended September 30, 2021, the Company retired property and equipment that was no longer in service for the Envestnet Wealth Solutions segment with an historical cost of $1.8 million and $9.6 million, respectively. During the three and nine months ended September 30, 2021, the Company retired property and equipment that was no longer in service for the Envestnet Data & Analytics segment with an historical cost of $0.4 million and $1.0 million million, respectively. During the three and nine months ended September 30, 2020, the Company retired property and equipment that was no longer in service for the Envestnet Wealth Solutions segment with an historical cost of $1.0 million and $5.5 million, respectively. During the three and nine months ended September 30, 2020, the Company retired property and equipment that was no longer in service for the Envestnet Data & Analytics segment with an historical cost of $1.4 million and $2.1 million, respectively. Gains and losses on asset retirements during the three and nine months ended September 30, 2021 and 2020 were not material. Depreciation and amortization expense was as follows:
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Internally Developed Software |
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Research and Development [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Internally Developed Software | Internally Developed Software Internally developed software, net consisted of the following:
Amortization expense was as follows:
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Goodwill and Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Changes in the carrying amount of goodwill were as follows:
Intangible assets, net consisted of the following:
There were no material retirements of intangible assets during the three and nine months ended September 30, 2021 and 2020. Amortization expense was as follows:
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Accrued Expenses and Other Liabilities |
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Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following:
In the fourth quarter of 2020, as part of an organizational realignment, the Company entered into separation agreements with several employees. In connection with this realignment, the Company recognized a net credit of $0.1 million of severance expense in the three months ended September 30, 2021. Total severance expense related to this program for the nine months ended September 30, 2021 was $5.1 million. The Company has approximately $1.6 million and $5.1 million in accrued compensation and related taxes associated with these separation agreements as of September 30, 2021 and December 31, 2020, respectively.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The Company’s outstanding debt obligations as of September 30, 2021 and December 31, 2020 were as follows:
Amended Credit Agreement At September 30, 2021, the Company was not in compliance with a covenant in its revolving credit agreement (the “Amended Credit Agreement”) that limits the Company's ability to make investments in an aggregate amount not to exceed $25.0 million, unless specifically identified in the Amended Credit Agreement. The banks have waived this non-compliance. Furthermore, on October 29, 2021, the banks and the Company entered into a Third Amendment to the Amended Credit Agreement whereby the investment threshold was increased from $25.0 million to $50.0 million. The Company was in compliance with all other covenants in the Amended Credit Agreement as of September 30, 2021. As of September 30, 2021, the Company had all $500.0 million available to borrow under the revolving credit facility, subject to covenant compliance. Convertible Notes due 2023 Upon adoption of ASU 2020-06, effective January 1, 2021, the embedded conversion option, or equity component, is no longer separated from the host contract and recognized within additional paid-in capital and is instead now accounted for as a single liability measured at amortized cost within Long-term debt in the condensed consolidated balance sheets. Accordingly, as of September 30, 2021, the Convertible Notes due 2023 are presented at their gross proceeds of $345.0 million less unamortized debt issuance costs of $3.5 million with no future accretion of the original issue discount necessary. In connection with the issuance of the Convertible Notes due 2023, the Company incurred $10.0 million of issuance costs in 2018, of which $8.6 million was originally allocated to the debt component and presented net in Long-term debt and $1.4 million was originally allocated to the equity component and presented within additional paid-in capital in the condensed consolidated balance sheets. Upon adoption of ASU 2020-06, effective January 1, 2021, the costs originally allocated to the equity component are reflected within Long-term debt and are being amortized and recorded as additional interest expense over the life of the Convertible Notes due 2023. The effective interest rate of the Convertible Notes due 2023 was approximately 2.4% for the three and nine months ended September 30, 2021. The effective interest rate of the Convertible Notes due 2023 was approximately 6% for the three and nine months ended September 30, 2020. The effective interest rate of the Convertible Notes due 2023 is equal to the stated interest rate plus the amortization of the debt issuance costs subsequent to adoption of ASU 2020-06. Prior to the adoption of ASU 2020-06, the effective interest rate calculation also included the amortization of the original issue discount. Convertible Notes due 2025 Upon adoption of ASU 2020-06, effective January 1, 2021, the embedded conversion option, or equity component, is no longer separated from the host contract and recognized within additional paid-in capital and is instead now accounted for as a single liability measured at amortized cost within Long-term debt in the condensed consolidated balance sheets. Accordingly, as of September 30, 2021, the Convertible Notes due 2025 are presented at their gross proceeds of $517.5 million less unamortized debt issuance costs of $11.4 million with no future accretion of the original issue discount necessary. In connection with the issuance of the Convertible Notes due 2025, the Company incurred a total of $14.5 million of issuance costs in 2020, of which $12.6 million was originally allocated to the debt component and presented net in Long-term debt and $1.9 million was originally allocated to the equity component and presented within additional paid-in capital in the condensed consolidated balance sheets. Upon adoption of ASU 2020-06, effective January 1, 2021, the costs originally allocated to the equity component are reflected within Long-term debt and are being amortized and recorded as additional interest expense over the life of the Convertible Notes due 2025. The effective interest rate of the Convertible Notes due 2025 was approximately 1.3% for the three and nine months ended September 30, 2021. The effective interest rate of the Convertible Notes due 2025 was approximately 4.0% for the three months ended September 30, 2020. The effective interest rate of the Convertible Notes due 2025 was equal to the stated interest rate plus the amortization of the debt issuance costs subsequent to adoption of ASU 2020-06. Prior to the adoption of ASU 2020-06, the effective interest rate calculation also included the amortization of the original issue discount. See “Note 14—Net Income (Loss) Per Share” for further discussion of the effect of conversion on net income per share. Interest Expense Interest expense was comprised of the following and is included in other expense, net in the condensed consolidated statements of operations:
For the three and nine months ended September 30, 2021, total interest expense related to the Convertible Notes due 2023 and the Convertible Notes due 2025 (collectively, the "Convertible Notes") was $3.7 million and $11.1 million, respectively, with coupon interest expense of $2.5 million and $7.4 million and the amortization of debt discount and issuance costs of $1.2 million and $3.7 million, respectively. For the three and nine months ended September 30, 2020, total interest expense related to the Convertible Notes was $6.5 million and $15.0 million, respectively, with coupon interest expense of $2.0 million and $5.0 million and the amortization of debt discount and issuance costs of $4.5 million and $10.0 million, respectively.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, based on the three-tier fair value hierarchy, as defined in ASC 820, “Fair Value Measurements and Disclosures”:
The Company assesses the categorization of assets and liabilities by level at each measurement date, and transfers between levels are recognized on the actual date of the event or when changes in circumstances caused the transfer, in accordance with the Company’s accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. There were no transfers between Levels I, II and III during the nine months ended September 30, 2021. Fair Value of Investment in Private Company The Company has an investment of $1.5 million in a privately held company that it does not have the ability to exercise significant influence. The Company elected the measurement alternative for this investment as it did not have a readily determinable fair value. The investment is included in other non-current assets on the condensed consolidated balance sheets and measured at cost, less impairment, adjusted by observable price changes. Any adjustments resulting from impairment or observable price changes in orderly transactions for identical or similar investment of the same issuer are recorded within other expense, net in the condensed consolidated statements of operations and are considered to be a Level II fair value measurement. During the nine months ended September 30, 2021, the Company recorded a $0.8 million adjustment to the carrying value of the investment, resulting from observable price changes. Fair Value of Contingent Consideration Liabilities The fair value of the contingent consideration liabilities related to certain of the Company's acquisitions were estimated using a discounted cash flow method with significant inputs that are not observable in the market and thus represents a Level III fair value measurement. The significant inputs in the Company's Level III fair value measurement not supported by market activity included its assessments of expected future cash flows related to these acquisitions and their ability to meet the target performance objectives during the subsequent periods from the date of acquisition, which management believes are appropriately discounted considering the uncertainties associated with these obligations, and are calculated in accordance with the terms of their respective agreements. The Company will continue to reassess the fair values of the contingent consideration liabilities at each reporting date until settlement. Changes to these estimated fair values will be recognized in the Company's earnings and included in general and administration expenses in the condensed consolidated statements of operations. The table below presents a reconciliation of the Company's contingent consideration liabilities, which were measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2020 to September 30, 2021:
Fair Value of Deferred Compensation Liability The table below presents a reconciliation of the assets used to fund deferred the Company's deferred compensation liability, which is measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2020 to September 30, 2021:
The fair market value of the assets used to fund the Company's deferred compensation liability is based upon the cash surrender value of the Company's life insurance premiums. The value of the assets used to fund the Company's deferred compensation liability, which are included in other non-current assets in the condensed consolidated balance sheets, increased due to funding of the plan and gains on the underlying investment vehicles. These gains are recognized in the Company's earnings and included in general and administration expenses in the condensed consolidated statements of operations. Fair Value of Debt Agreements The Company considered the Convertible Notes due 2023 and the Convertible Notes due 2025 to be Level II liabilities at September 30, 2021 and used a market approach to calculate their respective fair values. The estimated fair value for each convertible note was determined based on estimated or actual bids and offers in an over-the-counter market on September 30, 2021 (See “Note 9—Debt”). As of September 30, 2021, the carrying value of the Convertible Notes due 2023 equaled $341.5 million and represented the aggregate principal amount outstanding less the unamortized debt issuance costs. As of December 31, 2020, the carrying value of the Convertible Notes due 2023 equaled $316.6 million and represented the aggregate principal amount outstanding less the unamortized discount and debt issuance costs. As of September 30, 2021 and December 31, 2020, the estimated fair value of the Convertible Notes due 2023 was $434.7 million and $460.8 million, respectively. As of September 30, 2021, the carrying value of the Convertible Notes due 2025 equaled $506.1 million and represented the aggregate principal amount outstanding less the unamortized debt issuance costs. As of December 31, 2020, the carrying value of the Convertible Notes due 2025 equaled $439.9 million and represented the aggregate principal amount outstanding less the unamortized discount and debt issuance costs. As of September 30, 2021 and December 31, 2020, the estimated fair value of the Convertible Notes due 2025 was $523.0 million and $540.8 million, respectively. Fair Value of Other Financial Assets and Liabilities The Company considered the recorded value of its other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable and accounts payable, to approximate the fair value of the respective assets and liabilities at September 30, 2021 based upon the short-term nature of these assets and liabilities.
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Revenues and Cost of Revenues |
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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:
One customer accounted for more than 10% of the Company’s total revenues:
One customer accounted for more than 10% of the Envestnet Wealth Solutions segment’s revenues:
No single customer accounted for more than 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:
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 September 30, 2021:
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 September 30, 2021 decreased by $1.0 million during the nine months ended September 30, 2021, 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 $5.3 million and $5.2 million for the three months ended September 30, 2021 and 2020, respectively. The amount of revenue recognized that was included in the opening deferred revenue balance was $31.6 million and $31.0 million for the nine months ended September 30, 2021 and 2020, 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 $11.1 million and $10.8 million as of September 30, 2021 and December 31, 2020, respectively. Amortization expense for the deferred sales incentive compensation was $1.2 million and $0.9 million for the three months ended September 30, 2021 and 2020, respectively. Amortization expense for the deferred sales incentive compensation was $3.3 million and $2.9 million for the nine months ended September 30, 2021 and 2020, 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:
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Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company has stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”) outstanding under the 2010 Long-Term Incentive Plan (the “2010 Plan”) and the Envestnet, Inc. 2019 Acquisition Equity Incentive Plan (the “2019 Equity Plan”). As approved by the Company's shareholders at the Company's 2021 Annual Meeting of Shareholders, the 2010 Plan was amended whereby the maximum number of shares of common stock that may be delivered under the 2010 Plan was increased from 8,925,000 to 12,375,000. As of September 30, 2021, the maximum number of common shares available for future issuance under the Company’s plans is 3,747,932. Stock-based compensation expense under the Company’s plans was as follows:
The tax effect on stock-based compensation expense above was calculated using a blended statutory rate of 25.5% for each of the three and nine months ended September 30, 2021 and 2020. Stock Options The Company has not granted any stock options since January 2019. The following table summarizes option activity under the Company’s plans:
Exercise prices of stock options outstanding as of September 30, 2021 range from $10.40 to $55.29. At September 30, 2021, there was an immaterial amount of unrecognized stock-based compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 0.3 years. Restricted Stock Units The Company has granted restricted stock units and performance-based stock units to employees that are unvested. Performance-based stock units vest upon the achievement of certain pre-established business and financial metrics as well as a subsequent service condition. The business and financial metrics governing the vesting of these performance-based stock units provide thresholds that dictate the number of shares to vest upon each evaluation date, which range from 50% to 150%. If these metrics are achieved, as defined in the individual grant terms, these shares would cliff vest three years from the grant date. The following is a summary of the activity for unvested restricted stock units and performance stock units granted under the Company’s plans:
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Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The following table includes the Company’s income (loss) before income tax provision (benefit), income tax provision (benefit) and effective tax rate:
Under ASC 740-270-25, the Company is required to report income tax expense by applying a projected annual effective tax rate (“AETR”) to ordinary pre-tax book income for the interim period. The tax impact of discrete items is accounted for separately in the period in which they occur. The effective tax rate (“ETR”) for the quarter is the result of the projected AETR applied to actual pre-tax book income plus discrete items as a percentage of actual pre-tax book income. Therefore, a change in pre-tax book income, either forecasted or actual year-to-date, from one period to the next will cause the ETR to change. For the three and nine months ended September 30, 2021 and 2020, the Company’s ETR was impacted by the change in forecasted and actual year-to-date pre-tax book income. For the three months ended September 30, 2021, the Company’s effective tax rate differed from the statutory rate primarily due to the increase in forecasted book income for the year, the decrease in the valuation allowance the Company has placed on a portion of its U.S. deferred tax assets, including the valuation allowance impact of the Harvest acquisition, and the windfall from stock-based compensation. For the nine months ended September 30, 2021, the Company’s effective tax rate differed from the statutory rate primarily due to the increase in the valuation allowance the Company has placed on a portion of its U.S. deferred tax assets, including the valuation allowance impact of the Harvest acquisition, permanent book-tax differences, and the impact of state and local taxes offset by federal and state research and development (“R&D”) credits. For the three and nine months ended September 30, 2020, the Company's effective tax rate differed from the statutory rate primarily due to the change in the valuation allowance the Company has placed on a portion of its U.S. deferred tax assets and the impact of state and local taxes, partially offset by the permanent book tax differences, the windfall from stock-based compensation, the impact of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") related to net operating loss ("NOL") carryback, and federal and state R&D credits.
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Net Income (Loss) Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding for the period. For the calculation of diluted net income (loss) per share, the basic weighted average number of shares is increased by the dilutive effect of stock options, common warrants, restricted stock awards and restricted stock units and convertible notes, if dilutive, using either the treasury method or if-converted method, as appropriate. Prior to January 1, 2021, the Company accounted for the effect of its convertible notes using the treasury stock method since they may be settled in cash, shares or a combination thereof at the Company's option. Pursuant to the adoption of ASU 2020-06 on January 1, 2021, the Company now accounts for the effect of its convertible notes on diluted net income per share using the if-converted method (See “Note 2—Basis of Presentation” and “Note 9—Debt”). The following table provides the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to Envestnet, Inc.:
Securities that were anti-dilutive and therefore excluded from the computation of diluted net income (loss) per share were as follows:
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Segment Information |
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Segment Information | Segment Information Business segments are generally organized around the Company's business services. The Company's business segments are: •Envestnet Wealth Solutions – a leading provider of unified wealth management software and services to empower financial advisors and institutions. •Envestnet Data & Analytics – a leading data aggregation and data intelligence platform powering dynamic, cloud-based innovation for digital financial services. The following table presents a reconciliation from income (loss) from operations by segment to consolidated net income (loss) attributable to Envestnet, Inc.:
The information in the above table is derived from the Company’s internal financial reporting used for corporate management purposes. Nonsegment operating expenses may include salary and benefits for certain corporate officers, certain types of professional service expenses and insurance, acquisition related transaction costs, restructuring charges and other non-recurring and/or non-operationally related expenses. Intersegment revenues were not material for the three and nine months ended September 30, 2021 and 2020. A summary of consolidated total assets follows:
See “Note 11—Revenues and Cost of Revenues” for detail of revenues by segment.
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Geographical Information |
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Segments, Geographical Areas [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Geographical Information | Geographical Information The following table sets forth certain long-lived assets including property and equipment, net and internally developed software, net by geographic area:
See “Note 11—Revenues and Cost of Revenues” for detail of revenues by geographic area.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Obligations and Indemnifications The Company includes various types of indemnification and guarantee clauses in certain arrangements. These indemnifications and guarantees may include, but are not limited to, infringement claims related to intellectual property, direct or consequential damages and guarantees to certain service providers and service level requirements with certain customers. The type and amount of any potential indemnification or guarantee varies substantially based on the nature of each arrangement. The Company has experienced no previous claims and cannot determine the maximum amount of potential future payments, if any, related to such indemnification and guarantee provisions. The Company believes that it is unlikely it will have to make material payments under these arrangements and therefore has not recorded a contingent liability associated with these arrangements in the condensed consolidated balance sheets. The Company enters into unconditional purchase obligations arrangements for certain of its services that it receives in the normal course of business. Procurement of Technology Solutions On June 21, 2021, the Company entered into a purchase agreement with a privately held company to acquire the technology solutions being developed by this privately held company for a purchase price of $18.0 million, including an advance of $3.0 million. The transaction is expected to close no later than December 31, 2022. In addition, the agreement includes an earn-out payment of $10.0 million based upon achievement of certain target metrics within five years after the date of the Company’s launch of the technology solutions. Legal Proceedings The Company and its subsidiary, Yodlee, Inc. (“Yodlee”), have been named as defendants in a lawsuit filed on July 17, 2019, by FinancialApps, LLC (“FinancialApps”) in the United States District Court for the District of Delaware. The case caption is FinancialApps, LLC v. Envestnet Inc., et al., No. 19-cv-1337 (D. Del.). FinancialApps alleges that, after entering into a 2017 services agreement with Yodlee, Envestnet and Yodlee breached the agreement and misappropriated proprietary information to develop competing credit risk assessment software. The complaint includes claims for, among other things, misappropriation of trade secrets, fraud, tortious interference with prospective business opportunities, unfair competition, copyright infringement and breach of contract. FinancialApps is seeking significant monetary damages and various equitable and injunctive relief. On September 17, 2019, the Company and Yodlee filed a motion to dismiss certain of the claims in the complaint filed by FinancialApps, including the copyright infringement, unfair competition and fraud claims. On August 25, 2020, the District Court granted in part and denied in part the Company and Yodlee’s motion. Specifically, the Company and Yodlee prevailed on FinancialApps’ counts alleging copyright infringement and violations of the Illinois Deceptive Trade Practices Act. And while the Court was receptive to Envestnet and Yodlee’s argument that several of FinancialApps’ other counts are based on allegations that amount to copyright infringement—and therefore should fail due to copyright preemption—the Court found that FinancialApps had alleged enough conduct distinct from copyright infringement to survive dismissal at this early stage. On October 30, 2019, the Company and Yodlee filed counterclaims against FinancialApps. Yodlee alleges that FinancialApps fraudulently induced it to enter into contracts with FinancialApps, then breached those contracts. FinancialApps has filed a motion to dismiss Yodlee’s counterclaims. On September 15, 2020, the District Court denied FinancialApps’ motion on all counts except for the breach-of-contract claim which was dismissed on a pleading technicality without prejudice. On that count, the Court granted Yodlee leave to amend its counterclaim, cure the technical deficiency, and reassert its claim. Yodlee and Envestnet filed amended counterclaims on September 30, 2020. The amended counterclaims (1) cure that technical deficiency and reassert Yodlee’s contract counterclaim; and (2) broaden the defamation counterclaims arising out of various defamatory statements FinancialApps disseminated in the trade press after filing the lawsuit. On January 14, 2021, the Court ordered that (i) FinancialApps’s claims against Yodlee—as well as Yodlee’s counterclaims against FinancialApps—must be tried before the judge instead of a jury pursuant to a jury waiver provision in the parties’ agreement; and (ii) FinancialApps’s claims against Envestnet (and Envestnet’s counterclaim) must be heard by a jury. The Court has scheduled the Envestnet jury trial to take place before the Yodlee bench trial. Fact discovery closed on April 23, 2021, other than a few outstanding matters, and expert discovery is underway. The Company believes FinancialApps’s allegations are without merit and will continue to defend the claims against it and litigate the counterclaims vigorously. The Company and Yodlee were also named as defendants in a putative class action lawsuit filed on August 25, 2020, by Plaintiff Deborah Wesch in the United States District Court for the Northern District of California. On October 21, 2020, an amended class action complaint was filed by Plaintiff Wesch and nine additional named plaintiffs. The case caption is Deborah Wesch, et al., v. Yodlee, Inc., et al., Case No. 3:20-cv-05991-SK. Plaintiffs allege that Yodlee unlawfully collected their financial transaction data when plaintiffs linked their bank accounts to a mobile application that uses Yodlee’s API, and plaintiffs further allege that Yodlee unlawfully sold the transaction data to third parties. The complaint alleges violations of certain California statutes and common law, including the Unfair Competition Law, and federal statutes, including the Stored Communications Act. Plaintiffs are seeking monetary damages and equitable and injunctive relief on behalf of themselves and a putative nationwide class and California subclass of persons who provided their log-in credentials to a Yodlee-powered app in an allegedly similar manner from 2014 to the present. The Company believes that it is not properly named as a defendant in the lawsuit and it further believes, along with Yodlee, that plaintiffs’ claims are without merit. On November 4, 2020, the Company and Yodlee filed separate motions to dismiss all of the claims in the complaint. On February 16, 2021, the district court granted in part and denied in part Yodlee’s motion to dismiss the amended complaint and granted the plaintiffs leave to further amend. The Court reserved ruling on the Company’s motion to dismiss and granted limited jurisdictional discovery to the plaintiffs. On March 15, 2021, Plaintiffs filed a second amended class action complaint re-alleging, among others, the claims the district court had dismissed. The second amended complaint did not allege any claims against the Company or Yodlee that were not previously alleged in first amended complaint. On May 5, 2021, the Company filed a motion to dismiss all claims asserted against it in the second amended complaint, and Yodlee filed a motion to dismiss most claims asserted against it in the second amended complaint. On July 19, 2021, the Court granted in part Yodlee’s motion, resulting in the dismissal of all federal law claims and two of the state-law claims. On August 5, 2021, the Court granted the Company's motion to dismiss, and dismissed the Company from the lawsuit. Discovery has begun on the remaining state law claims against Yodlee. On October 9, 2021, Yodlee filed a motion for summary judgment, which is currently scheduled for a hearing in late January 2022. Yodlee will continue to vigorously defend the claims against it. The Company’s subsidiary, Envestnet Asset Management, Inc. (“EAM”), has been named as a defendant in two putative class action lawsuits filed on December 28, 2020 and March 4, 2021, respectively, in the United States District Court for the Northern District of Alabama. The case captions are Drake v. BBVA USA Bancshares, Inc. et al., No. 2:20-CV-02076-ACA (“Drake”) and Ferguson v. BBVA Compass Bancshares, Inc. et al, No. 2:19-CV-01135-MHH (“Ferguson”). The material allegations of both cases are identical. The plaintiff alleges that EAM, acting as investment advisor to BBVA USA Bancshares, Inc.’s Compass SmartInvestor 401(k) Plan (the “SmartInvestor Plan”), along with BBVA and others, breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”) in connection with the selection and maintenance of the SmartInvestor Plan’s investment options. The plaintiff seeks unspecified damages on behalf of a class of SmartInvestor Plan participants from July 17, 2013 through December 28, 2020. On August 27, 2021, the Court granted EAM’s motion to dismiss the Drake lawsuit. On September 3, 2021, the Court granted EAM’s motion to dismiss the Ferguson lawsuit. In addition, the Company is involved in legal proceedings arising in the ordinary course of its business. Legal fees and other costs associated with such actions are expensed as incurred. The Company will record a provision for these claims when it is both probable that a liability has been incurred and the amount of the loss, or a range of the potential loss, can be reasonably estimated. These provisions are reviewed regularly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information or events pertaining to a particular case. For litigation matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but if the matter is material, it is subject to disclosures. The Company believes that liabilities associated with any claims, while possible, are not probable, and therefore has not recorded an accrual for any claims as of September 30, 2021. Further, while any possible range of loss cannot be reasonably estimated at this time, the Company does not believe that the outcome of any of these proceedings, individually or in the aggregate, would, if determined adversely to it, have a material adverse effect on its financial condition or business, although an adverse resolution of legal proceedings could have a material adverse effect on the Company's results of operations or cash flow in a particular quarter or year. Contingencies Certain of the Company’s revenues are subject to sales and use taxes in certain jurisdictions where it conducts business in the United States. As of September 30, 2021 and December 31, 2020, the Company estimated a sales and use tax liability of $3.8 million and $6.6 million, respectively, related to revenues in multiple jurisdictions. This amount is included in accrued expenses and other liabilities in the condensed consolidated balance sheets. As of September 30, 2021 and December 31, 2020, the Company also estimated a sales and use tax receivable of $2.8 million and $2.1 million, respectively, related to the estimated recoverability of a portion of the liability from customers. This amount is included in prepaid expenses and other current assets in the condensed consolidated balance sheets. Additional future information obtained from the applicable jurisdictions may affect the Company's estimate of its sales and use tax liability, but such change in the estimate cannot currently be made.
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Investment in YieldX On October 1, 2021, the Company acquired a 6.8% ownership interest in YieldX Inc. ("YieldX"), a Delaware corporation, for cash consideration of $15.0 million. YieldX provides an end-to-end digital platform with smart workflows, artificial intelligence powered analytics and a reimagined user experience for financial professionals and investors in the fixed income markets. The Company elected the measurement alternative for this investment as it did not have a readily determinable fair value. The investment is measured at cost, less impairment, adjusted by observable price changes. In connection with this investment, the Company also entered into a commercial agreement with YieldX to integrate the products and solutions of YieldX into the Company’s platform offering. The consideration under the commercial agreement includes a warrant and quarterly cash payments subject to the satisfaction of certain performance targets.
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Basis of Presentation (Policies) |
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Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements—In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This update aims to reduce complexity within the accounting for income taxes as part of the simplification initiative. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2020. These changes became effective for the Company's fiscal year beginning January 1, 2021. This standard will be applied prospectively. Adoption of this standard did not have a material impact on the Company's consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity.” This update simplifies the accounting for certain convertible instruments by reducing the number of accounting models available for convertible debt instruments and revises Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. Under the new guidance, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. In addition, the new guidance requires the if-converted method to be applied for all convertible instruments. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2021. Early adoption of the standard is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Adoption of the standard requires using either a modified retrospective or a full retrospective approach. The Company has early adopted this standard as of January 1, 2021 using the modified retrospective approach. Adoption of this standard resulted in a decrease to accumulated deficit of $28.6 million (net of $0.9 million in taxes), a decrease to paid-in capital of $108.5 million (net of $6.7 million in taxes) and an increase to Convertible Notes of $87.5 million. Interest expense recognized in future periods is expected to be reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost, with an expected decrease of approximately $22.1 million in 2021 as a result of the adoption. The adoption of ASU 2020-06 had no impact on the Company's consolidated statements of cash flows.
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Basis of Presentation (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of cash and cash equivalents | The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported within the condensed consolidated statements of cash flows:
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Schedule of reconciliation of cash, cash equivalents and restricted cash | The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported within the condensed consolidated statements of cash flows:
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Acquisitions (Tables) |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of recognized identified assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
(1) The Company recorded measurement period adjustments of $4.0 million primarily due to the establishment of deferred tax assets in the three months ended September 30, 2021. A summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows:
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Prepaid Expenses and Other Current Assets (Tables) |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consisted of the following:
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Property and Equipment, Net (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of property and equipment, net | Property and equipment, net consisted of the following:
Depreciation and amortization expense was as follows:
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Internally Developed Software (Tables) |
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Research and Development [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of internally developed software, net | Internally developed software, net consisted of the following:
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Schedule of amortization expense | Amortization expense was as follows:
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Goodwill and Intangible Assets, Net (Tables) |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in the carrying amount of goodwill by segment | Changes in the carrying amount of goodwill were as follows:
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Schedule of components of intangible assets, net | Intangible assets, net consisted of the following:
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Schedule of amortization expense | Amortization expense was as follows:
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Accrued Expenses and Other Liabilities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule accrued expenses and other liabilities | Accrued expenses and other liabilities consisted of the following:
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Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of convertible debt obligations | The Company’s outstanding debt obligations as of September 30, 2021 and December 31, 2020 were as follows:
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Schedule of interest expense | Interest expense was comprised of the following and is included in other expense, net in the condensed consolidated statements of operations:
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Fair Value Measurements (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule fair value of the Company’s financial assets and liabilities measured at fair value | The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, based on the three-tier fair value hierarchy, as defined in ASC 820, “Fair Value Measurements and Disclosures”:
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Summary of changes in the fair value of the Company's Level 3 liability | The table below presents a reconciliation of the Company's contingent consideration liabilities, which were measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2020 to September 30, 2021:
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Summary of changes in the fair value of the Company's Level 3 assets | The table below presents a reconciliation of the assets used to fund deferred the Company's deferred compensation liability, which is measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2020 to September 30, 2021:
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Revenue and Cost of Revenues (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disaggregation of revenue by major source | The following table presents the Company’s revenues disaggregated by major source:
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Summary of revenues from major customers | One customer accounted for more than 10% of the Company’s total revenues:
One customer accounted for more than 10% of the Envestnet Wealth Solutions segment’s revenues:
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Schedule of disaggregation of revenue by geography | The following table presents the Company’s revenues disaggregated by geography, based on the billing address of the customer:
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Schedule of estimated revenue expected to be recognized in the future | 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 September 30, 2021:
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Schedule of costs of revenues by revenue category | The following table summarizes cost of revenues by revenue category:
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Stock-Based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock-based compensation expense | Stock-based compensation expense under the Company’s plans was as follows:
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Summary of option activity under the company's plans | The following table summarizes option activity under the Company’s plans:
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Summary of the activity for unvested restricted stock units and awards granted under the Company's plans | The following is a summary of the activity for unvested restricted stock units and performance stock units granted under the Company’s plans:
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Income Taxes (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of income (loss) before income tax provision (benefit) | The following table includes the Company’s income (loss) before income tax provision (benefit), income tax provision (benefit) and effective tax rate:
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Net Income (Loss) Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to common stockholders | The following table provides the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to Envestnet, Inc.:
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Schedule of anti-dilutive securities excluded from computation of diluted earnings per share | Securities that were anti-dilutive and therefore excluded from the computation of diluted net income (loss) per share were as follows:
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of income (loss) from operations by segment | The following table presents a reconciliation from income (loss) from operations by segment to consolidated net income (loss) attributable to Envestnet, Inc.:
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Summary of consolidated total assets | A summary of consolidated total assets follows:
|
Geographical Information (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segments, Geographical Areas [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property, plant, and equipment, net by geographic area | The following table sets forth certain long-lived assets including property and equipment, net and internally developed software, net by geographic area:
|
Organization and Description of Business (Details) |
9 Months Ended |
---|---|
Sep. 30, 2021
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 2 |
Basis of Presentation - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 393,799 | $ 384,565 | $ 362,918 | |
Restricted cash included in prepaid expenses and other current assets | 149 | 0 | ||
Restricted cash included in other non-current assets | 0 | 148 | ||
Total cash, cash equivalents and restricted cash | $ 393,948 | $ 384,714 | $ 363,066 | $ 82,755 |
Acquisitions - Narrative (Details) - USD ($) |
Jun. 21, 2021 |
Apr. 07, 2021 |
Mar. 11, 2021 |
Sep. 30, 2021 |
Mar. 10, 2021 |
---|---|---|---|---|---|
Harvest Savings & Wealth Technologies | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | $ 32,800,000 | ||||
Escrow deposit | $ 3,000,000 | ||||
Escrow holding period | 18 months | ||||
Goodwill, expected tax deductible amount | $ 0 | ||||
Proprietary technology | Harvest Savings & Wealth Technologies | |||||
Business Acquisition [Line Items] | |||||
Amortization period | 6 years | ||||
Privately Held Company | |||||
Business Acquisition [Line Items] | |||||
Ownership percentage | 29.00% | ||||
Consideration transferred | $ 35,500,000 | ||||
Redemption consideration | 10,000,000 | ||||
Privately Held Company | Proprietary technology | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 18,000,000 | ||||
Total intangible assets acquired | $ 24,500,000 | ||||
Amortization period | 5 years |
Acquisitions - Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
Apr. 07, 2021 |
Dec. 31, 2020 |
|
Business Acquisition [Line Items] | ||||
Goodwill | $ 924,504 | $ 924,504 | $ 906,773 | |
Deferred tax asset adjustment | 4,000 | 3,938 | ||
Harvest Savings & Wealth Technologies | ||||
Business Acquisition [Line Items] | ||||
Tangible assets acquired, net of cash | 5,970 | 5,970 | $ 2,032 | |
Total liabilities assumed | (542) | (542) | (596) | |
Total liabilities assumed adjustment | 54 | |||
Identifiable intangible assets | 9,500 | 9,500 | 9,500 | |
Goodwill | 17,866 | 17,866 | 21,858 | |
Goodwill adjustments | (3,992) | |||
Total net assets acquired | $ 32,794 | 32,794 | $ 32,794 | |
Total net assets acquired adjustment | $ 0 |
Acquisitions - Estimated Intangible Assets Acquired (Details) - Harvest Savings & Wealth Technologies - USD ($) $ in Thousands |
Apr. 07, 2021 |
Sep. 30, 2021 |
---|---|---|
Business Acquisition [Line Items] | ||
Identifiable intangible assets | $ 9,500 | $ 9,500 |
Proprietary technology | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets | 6,900 | |
Estimated Useful Life in Years | 6 years | |
Customer list | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets | $ 2,600 | |
Estimated Useful Life in Years | 14 years |
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid technology | $ 14,825 | $ 13,165 |
Non-income tax receivables | 7,031 | 6,571 |
Income tax prepayments and receivables | 4,012 | 1,684 |
Prepaid insurance | 3,035 | 1,777 |
Advance payroll taxes and benefits | 1,449 | 6,429 |
Other | 9,233 | 10,944 |
Prepaid expenses and other current assets | $ 39,585 | $ 40,570 |
Property and Equipment - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Envestnet Wealth Solutions | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost written off | $ 1.8 | $ 1.0 | $ 9.6 | $ 5.5 |
Envestnet Data & Analytics | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost written off | $ 0.4 | $ 1.4 | $ 1.0 | $ 2.1 |
Internally Developed Software - Components of Internally Developed Software (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Line Items] | ||
Internally developed software | $ 209,703 | $ 159,619 |
Less: accumulated amortization | (84,113) | (63,118) |
Internally developed software, net | $ 125,590 | $ 96,501 |
Internally developed software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years |
Internally Developed Software - Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Research and Development [Abstract] | ||||
Amortization expense | $ 7,462 | $ 5,100 | $ 20,995 | $ 13,042 |
Goodwill and Intangible Assets, Net - Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2021
USD ($)
| |
Changes in the carrying amount of the Company's goodwill | |
Balance at period start | $ 906,773 |
Harvest Acquisition | 17,866 |
Foreign exchange rates | (135) |
Balance at period end | 924,504 |
Envestnet Wealth Solutions | |
Changes in the carrying amount of the Company's goodwill | |
Balance at period start | 603,350 |
Harvest Acquisition | 17,866 |
Foreign exchange rates | 0 |
Balance at period end | 621,216 |
Envestnet Data & Analytics | |
Changes in the carrying amount of the Company's goodwill | |
Balance at period start | 303,423 |
Harvest Acquisition | 0 |
Foreign exchange rates | (135) |
Balance at period end | $ 303,288 |
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 712,844 | $ 680,134 |
Accumulated Amortization | (295,200) | (245,093) |
Net Carrying Amount | 417,644 | 435,041 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 593,820 | 591,520 |
Accumulated Amortization | (233,477) | (198,555) |
Net Carrying Amount | 360,343 | 392,965 |
Proprietary technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 85,324 | 54,914 |
Accumulated Amortization | (38,439) | (26,949) |
Net Carrying Amount | 46,885 | 27,965 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 33,700 | 33,700 |
Accumulated Amortization | (23,284) | (19,589) |
Net Carrying Amount | $ 10,416 | $ 14,111 |
Goodwill and Intangible Assets, Net - Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 17,390 | $ 18,510 | $ 51,370 | $ 56,014 |
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued investment manager fees | $ 88,963 | $ 57,894 |
Accrued compensation and related taxes | 80,549 | 71,039 |
Accrued professional services | 8,453 | 9,240 |
Accrued technology | 7,032 | 4,701 |
Non-income tax payables | 4,615 | 8,398 |
Accrued purchase consideration | 4,008 | 0 |
Other accrued expenses | 6,586 | 7,276 |
Total accrued expenses and other liabilities | $ 200,206 | $ 158,548 |
Accrued Expenses and Other Liabilities - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Payables and Accruals [Abstract] | |||
Severance costs | $ 0.1 | $ 5.1 | |
Accrued compensation | $ 1.6 | $ 1.6 | $ 5.1 |
Debt - Summary (Details) - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Revolving credit facility balance | $ 0 | $ 0 |
Convertible Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Face amount | 345,000,000 | 345,000,000 |
Unamortized issuance costs on convertible notes | (3,491,000) | (4,306,000) |
Unaccreted discount on convertible notes | 0 | (24,058,000) |
Convertible notes carrying value | 341,509,000 | 316,636,000 |
Convertible Notes due 2025 | ||
Debt Instrument [Line Items] | ||
Face amount | 517,500,000 | 517,500,000 |
Unamortized issuance costs on convertible notes | (11,376,000) | (11,731,000) |
Unaccreted discount on convertible notes | 0 | (65,902,000) |
Convertible notes carrying value | $ 506,124,000 | $ 439,867,000 |
Debt - Interest (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Debt Disclosure [Abstract] | ||||
Coupon interest | $ 2,479 | $ 1,951 | $ 7,439 | $ 4,962 |
Amortization of issuance costs | 1,443 | 922 | 4,295 | 2,186 |
Undrawn and other fees | 320 | 191 | 948 | 477 |
Interest on revolving credit facility | 0 | 1,259 | 0 | 5,786 |
Accretion of debt discount | 0 | 3,816 | 0 | 8,496 |
Total interest expense | $ 4,242 | $ 8,139 | $ 12,682 | $ 21,907 |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Equity Method Investments | ||
Fair Value Measurements | ||
Investment in private company | $ 1.5 | |
Level II | Equity Method Investments | ||
Fair Value Measurements | ||
Price adjustment | 0.8 | |
Convertible Notes due 2023 | ||
Fair Value Measurements | ||
Debt instrument, fair value disclosure | 434.7 | $ 460.8 |
Convertible Notes due 2023 | Carrying Value | ||
Fair Value Measurements | ||
Convertible notes | 341.5 | 316.6 |
Convertible Notes due 2025 | ||
Fair Value Measurements | ||
Debt instrument, fair value disclosure | 523.0 | 540.8 |
Convertible Notes due 2025 | Carrying Value | ||
Fair Value Measurements | ||
Convertible notes | $ 506.1 | $ 439.9 |
Fair Value Measurements - Level III (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2021
USD ($)
| |
Fair Value of Contingent Consideration Liabilities | |
Beginning Balance | $ 12,559 |
Fair market value adjustment on contingent consideration liability | (667) |
Accretion on contingent consideration | 474 |
Payments of contingent consideration | (11,560) |
Ending Balance | 806 |
Fair Value of Assets to Fund Deferred Compensation Liability | |
Beginning balance | 9,961 |
Contributions | 215 |
Fair value adjustments | 577 |
Ending balance | $ 10,753 |
Revenue and Cost of Revenues - Major Customers (Details) - Revenue from contract with customer benchmark - Customer concentration risk - Fidelity |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Concentration Risk [Line Items] | ||||
Revenue as a percentage of the company's total | 17.00% | 15.00% | 17.00% | 15.00% |
Envestnet Wealth Solutions | ||||
Concentration Risk [Line Items] | ||||
Revenue as a percentage of the company's total | 21.00% | 18.00% | 20.00% | 18.00% |
Revenue and Cost of Revenues - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Revenue from Contract with Customer [Abstract] | |||||
Increase in contract with customer liability | $ (1.0) | ||||
Recognized deferred revenue | $ 5.3 | $ 5.2 | 31.6 | $ 31.0 | |
Deferred sales incentive compensation | 11.1 | 11.1 | $ 10.8 | ||
Amortization expense for the deferred sales incentive compensation | 1.2 | 0.9 | 3.3 | 2.9 | |
Impairment loss for capitalized costs | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 |
Revenue and Cost of Revenues - Cost of Revenues (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Product Information [Line Items] | ||||
Cost of revenues | $ 109,836 | $ 78,545 | $ 303,199 | $ 222,327 |
Asset-based | ||||
Product Information [Line Items] | ||||
Cost of revenues | 102,298 | 71,133 | 281,829 | 201,600 |
Subscription-based | ||||
Product Information [Line Items] | ||||
Cost of revenues | 7,355 | 7,291 | 20,986 | 20,375 |
Professional services and other | ||||
Product Information [Line Items] | ||||
Cost of revenues | $ 183 | $ 121 | $ 384 | $ 352 |
Stock-Based Compensation - Narrative (Details) - shares |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Stock-Based compensation | |||||
Maximum number of shares available for future issuance (in shares) | 3,747,932 | 3,747,932 | |||
Statutory rate (as a percent) | 25.50% | 25.50% | 25.50% | 25.50% | |
2010 Plan | |||||
Stock-Based compensation | |||||
Shares authorized for issuance (in shares) | 12,375,000 | 12,375,000 | 8,925,000 |
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Share-based Payment Arrangement [Abstract] | ||||
Stock-based compensation expense | $ 18,512 | $ 15,729 | $ 49,934 | $ 42,500 |
Tax effect on stock-based compensation expense | (4,720) | (4,011) | (12,733) | (10,837) |
Net effect on income | $ 13,792 | $ 11,718 | $ 37,201 | $ 31,663 |
Income Taxes - Income (Loss) Before Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Income Tax Disclosure [Abstract] | ||||
Income (loss) before income tax provision (benefit) | $ 10,584 | $ 2,820 | $ 27,078 | $ (10,499) |
Income tax provision (benefit) | $ (854) | $ 497 | $ 9,074 | $ (161) |
Effective tax rate | (8.10%) | 17.60% | 33.50% | 1.50% |
Net Income (Loss) Per Share - Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to Envestnet, Inc. | $ 11,740 | $ 1,910 | $ 18,405 | $ (10,350) |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 54,547,858 | 53,800,048 | 54,400,247 | 53,464,101 |
Effect of dilutive shares: | ||||
Options to purchase common stock (in shares) | 201,103 | 331,728 | 207,281 | 0 |
Unvested restricted stock units (in shares) | 570,515 | 610,442 | 614,005 | 0 |
Convertible Notes (in shares) | 0 | 730,267 | 0 | 0 |
Warrants (in shares) | 69,151 | 86,498 | 66,439 | 0 |
Diluted (in shares) | 55,388,627 | 55,558,983 | 55,287,972 | 53,464,101 |
Net income (loss) per share attributable to Envestnet, Inc common stock: | ||||
Basic (in dollars per share) | $ 0.22 | $ 0.04 | $ 0.34 | $ (0.19) |
Diluted (in dollars per share) | $ 0.21 | $ 0.03 | $ 0.33 | $ (0.19) |
Segment Information - Summary of Consolidated Total Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Assets | $ 2,217,345 | $ 2,144,290 |
Envestnet Wealth Solutions | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,704,660 | 1,634,153 |
Envestnet Data & Analytics | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 512,685 | $ 510,137 |
Geographical Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets, net | $ 173,748 | $ 144,470 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets, net | 170,812 | 140,651 |
India | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets, net | 2,603 | 2,970 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets, net | $ 333 | $ 849 |
Commitments and Contingencies (Details) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Jun. 21, 2021
USD ($)
|
Mar. 11, 2021
USD ($)
|
Sep. 30, 2021
USD ($)
claim
|
Dec. 31, 2020
USD ($)
|
|
Other Commitments [Line Items] | ||||
Number of previous claims experienced | claim | 0 | |||
Sales and use tax liability | $ 3.8 | $ 6.6 | ||
Sales and use tax receivable | $ 2.8 | $ 2.1 | ||
Privately Held Company | ||||
Other Commitments [Line Items] | ||||
Consideration transferred | $ 35.5 | |||
Privately Held Company | Technology Solutions | ||||
Other Commitments [Line Items] | ||||
Consideration transferred | $ 18.0 | |||
Asset acquisition, advance | 3.0 | |||
Earn-out payment | $ 10.0 | |||
Target metrics term | 5 years |
Subsequent Events (Details) - Subsequent Event - YieldX Inc $ in Millions |
Oct. 01, 2021
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Investment, percent acquired | 6.80% |
Payments to acquire investments | $ 15.0 |
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