Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 07, 2014 | Jun. 30, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'ENVESTNET, INC. | ' | ' |
Entity Central Index Key | '0001337619 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $551,089,200 |
Entity Common Stock, Shares Outstanding | ' | 34,019,202 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $49,942 | $29,983 |
Fees receivable, net | 19,848 | 9,188 |
Deferred tax assets, net | 2,462 | 2,089 |
Prepaid expenses and other current assets | 7,155 | 2,501 |
Total current assets | 79,407 | 43,761 |
Property and equipment, net | 12,766 | 11,791 |
Internally developed software, net | 5,740 | 4,324 |
Intangible assets, net | 35,698 | 27,150 |
Goodwill | 74,335 | 65,644 |
Deferred tax assets, net | 8,367 | 6,194 |
Other non-current assets | 4,929 | 3,535 |
Total assets | 221,242 | 162,399 |
Current liabilities: | ' | ' |
Accrued expenses | 35,242 | 20,594 |
Accounts payable | 5,528 | 2,614 |
Contingent consideration liability | 6,008 | ' |
Deferred revenue | 6,245 | 5,768 |
Total current liabilities | 53,023 | 28,976 |
Contingent consideration liability | 11,297 | ' |
Deferred revenue liability | 1,148 | ' |
Deferred rent liability | 2,051 | 2,195 |
Lease incentive liability | 3,547 | 3,886 |
Other non-current liabilities | 2,404 | 1,346 |
Total liabilities | 73,470 | 36,403 |
Commitments and contingencies | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock, par value $0.005, 50,000,000 shares authorized | ' | ' |
Common stock, par value $0.005, 500,000,000 shares authorized; 45,628,814 and 44,071,564 shares issued as of December 31, 2013 and 2012, respectively; 33,876,020 and 32,355,675 shares outstanding as of December 31, 2013 and 2012, respectively | 228 | 220 |
Additional paid-in capital | 192,341 | 173,611 |
Accumulated deficit | -33,617 | -37,277 |
Treasury stock at cost, 11,752,794 and 11,715,889 shares as of December 31, 2013 and 2012, respectively | -11,180 | -10,558 |
Total stockholders' equity | 147,772 | 125,996 |
Total liabilities and stockholders' equity | $221,242 | $162,399 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Balance Sheets | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 45,628,814 | 44,071,564 |
Common stock, shares outstanding | 33,876,020 | 32,355,675 |
Treasury stock, shares | 11,752,794 | 11,715,889 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues: | ' | ' | ' |
Assets under management or administration | $200,568 | $127,213 | $99,236 |
Licensing and professional services | 41,967 | 30,053 | 23,942 |
Total revenues | 242,535 | 157,266 | 123,178 |
Operating expenses: | ' | ' | ' |
Cost of revenues | 98,970 | 56,119 | 42,831 |
Compensation and benefits | 77,442 | 54,973 | 40,305 |
General and administration | 44,808 | 30,617 | 21,856 |
Depreciation and amortization | 15,329 | 12,400 | 6,376 |
Restructuring charges | 474 | 115 | 434 |
Total operating expenses | 237,023 | 154,224 | 111,802 |
Income from operations | 5,512 | 3,042 | 11,376 |
Other income (expense): | ' | ' | ' |
Interest income | 18 | 29 | 77 |
Interest expense | ' | -3 | -786 |
Other income | 182 | ' | 1,100 |
Other expense | ' | ' | -1,183 |
Loss on investments | ' | ' | -4 |
Total other income (expense) | 200 | 26 | -796 |
Income before income tax provision | 5,712 | 3,068 | 10,580 |
Income tax provision | 2,052 | 2,603 | 2,975 |
Net and comprehensive income | $3,660 | $465 | $7,605 |
Net income per share: | ' | ' | ' |
Basic (in dollars per share) | $0.11 | $0.01 | $0.24 |
Diluted (in dollars per share) | $0.10 | $0.01 | $0.23 |
Weighted average common shares outstanding: | ' | ' | ' |
Basic (in shares) | 33,191,088 | 32,162,672 | 31,643,390 |
Diluted (in shares) | 35,666,575 | 33,341,615 | 32,863,834 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated deficit |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2010 | $102,319 | $215 | ($10,327) | $157,778 | ($45,347) |
Balance (in shares) at Dec. 31, 2010 | ' | 43,068,371 | -11,699,549 | ' | ' |
Increase (decrease) in shareholders' equity | ' | ' | ' | ' | ' |
Exercise of stock options | 2,747 | 3 | ' | 2,744 | ' |
Exercise of stock options (in shares) | ' | 447,528 | ' | ' | ' |
Stock-based compensation | 3,062 | ' | ' | 3,062 | ' |
Purchase of treasury stock (at cost) | -94 | ' | -94 | ' | ' |
Purchase of treasury stock (at cost) (in shares) | ' | ' | -5,624 | ' | ' |
Net income | 7,605 | ' | ' | ' | 7,605 |
Balance at Dec. 31, 2011 | 115,639 | 218 | -10,421 | 163,584 | -37,742 |
Balance (in shares) at Dec. 31, 2011 | ' | 43,515,899 | -11,705,173 | ' | ' |
Increase (decrease) in shareholders' equity | ' | ' | ' | ' | ' |
Exercise of stock options | 2,069 | 1 | ' | 2,068 | ' |
Exercise of stock options (in shares) | ' | 298,947 | ' | ' | ' |
Issuance of common stock - vesting of restricted stock (in shares) | ' | 24,568 | ' | ' | ' |
Issuance of common stock - Issuance of restricted stock | 2,759 | 1 | ' | 2,758 | ' |
Issuance of common stock - Issuance of restricted stock (in shares) | ' | 232,150 | ' | ' | ' |
Stock-based compensation | 4,342 | ' | ' | 4,342 | ' |
Tax benefit attributable to exercise of stock | 1,549 | ' | ' | 1,549 | ' |
Reversal of net operating loss tax benefit recognized from EnvestNet Group, Inc. merger | -690 | ' | ' | -690 | ' |
Purchase of treasury stock (at cost) | -137 | ' | -137 | ' | ' |
Purchase of treasury stock (at cost) (in shares) | ' | ' | -10,716 | ' | ' |
Net income | 465 | ' | ' | ' | 465 |
Balance at Dec. 31, 2012 | 125,996 | 220 | -10,558 | 173,611 | -37,277 |
Balance (in shares) at Dec. 31, 2012 | ' | 44,071,564 | -11,715,889 | ' | ' |
Increase (decrease) in shareholders' equity | ' | ' | ' | ' | ' |
Exercise of stock options | 6,400 | 3 | ' | 6,397 | ' |
Exercise of stock options (in shares) | ' | 721,050 | ' | ' | ' |
Issuance of common stock - vesting of restricted stock | 1 | 1 | ' | ' | ' |
Issuance of common stock - vesting of restricted stock (in shares) | ' | 74,298 | ' | ' | ' |
Exercise of warrants | 4 | 4 | ' | ' | ' |
Exercise of warrants (in shares) | ' | 761,902 | ' | ' | ' |
Stock-based compensation | 8,738 | ' | ' | 8,738 | ' |
Tax benefit attributable to exercise of stock | 3,579 | ' | ' | 3,579 | ' |
Reversal of state uncertain tax position | 16 | ' | ' | 16 | ' |
Purchase of treasury stock (at cost) | -622 | ' | -622 | ' | ' |
Purchase of treasury stock (at cost) (in shares) | ' | ' | -36,905 | ' | ' |
Net income | 3,660 | ' | ' | ' | 3,660 |
Balance at Dec. 31, 2013 | $147,772 | $228 | ($11,180) | $192,341 | ($33,617) |
Balance (in shares) at Dec. 31, 2013 | ' | 45,628,814 | -11,752,794 | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
OPERATING ACTIVITIES: | ' | ' | ' |
Net income | $3,660 | $465 | $7,605 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 15,329 | 12,400 | 6,376 |
Amortization of customer inducements | ' | ' | 4,568 |
Deferred rent and lease incentive | -483 | 1,389 | 332 |
Provision for doubtful accounts | 203 | ' | ' |
Impairments to long-lived assets | 330 | ' | ' |
Deferred income taxes | -2,546 | 83 | 2,162 |
Stock-based compensation | 8,738 | 4,342 | 3,062 |
Excess tax benefits from stock-based compensation | -3,579 | -1,549 | ' |
Imputed interest expense | 787 | 3 | 786 |
Fair market value adjustment on contingent consideration | 501 | ' | ' |
Loss on investments | ' | ' | 4 |
Impairment of customer inducement asset | ' | ' | 174 |
Contract settlement charges | ' | ' | 1,183 |
Changes in operating assets and liabilities, net of acquisitions: | ' | ' | ' |
Fees receivable | -9,566 | 1,017 | 1,940 |
Prepaid expenses and other current assets | -1,075 | 4,645 | -1,988 |
Other non-current assets | -1,444 | -181 | -978 |
Customer inducements, net | ' | ' | -1,000 |
Accrued expenses | 12,389 | 3,100 | 802 |
Accounts payable | 2,914 | 640 | 267 |
Deferred revenue | 1,625 | 1,028 | -507 |
Other non-current liabilities | 1,074 | 1,166 | -39 |
Net cash provided by operating activities | 28,857 | 28,548 | 24,749 |
INVESTING ACTIVITIES: | ' | ' | ' |
Purchase of property and equipment | -6,125 | -4,838 | -4,798 |
Capitalization of internally developed software | -3,143 | -2,350 | -1,482 |
Repayment of notes payable assumed in acquisition | ' | -174 | -162 |
Acquisition of businesses, net of cash acquired | -8,992 | -62,352 | -23,719 |
Net cash used in investing activities | -18,260 | -69,714 | -30,161 |
FINANCING ACTIVITIES: | ' | ' | ' |
Proceeds from exercise of warrants | 4 | ' | ' |
Proceeds from exercise of stock options | 6,400 | 2,069 | 2,747 |
Issuance of restricted stock | 1 | 2,759 | ' |
Excess tax benefits from stock-based compensation expense | 3,579 | 1,549 | ' |
Purchase of treasury stock | -622 | -137 | -94 |
Net cash provided by financing activities | 9,362 | 6,240 | 2,653 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 19,959 | -34,926 | -2,759 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 29,983 | 64,909 | 67,668 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 49,942 | 29,983 | 64,909 |
Supplemental disclosure of cash flow information - | ' | ' | ' |
cash paid during the period for income taxes, net of refunds | 4,708 | 796 | 813 |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' | ' |
Leasehold improvements funded by lease incentive | 1,693 | 1,054 | 491 |
Non-cash consideration issued in a business acquisition | ' | ' | 4,897 |
Contingent consideration issued in a business acquisition | $16,017 | ' | ' |
Organization_and_Description_o
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2013 | |
Organization and Description of Business | ' |
Organization and Description of Business | ' |
1. Organization and Description of Business | |
Envestnet, Inc. (“Envestnet”) and its subsidiaries (collectively, the “Company”) provide open-architecture wealth management services and technology to independent financial advisors and financial institutions. These services and related technology are provided via the Envestnet’s wealth management software, Envestnet | PMC®, Envestnet | Tamarac™, and Vantage Reporting Solution. | |
Envestnet’s wealth management software is a platform of integrated, internet-based technology applications and related services that provide portfolio diagnostics, proposal generation, investment model management, rebalancing and trading, portfolio performance reporting and monitoring solutions, billing, and back-office and middle-office operations and administration. | |
The Company’s investment consulting group, Envestnet | PMC, provides investment manager due diligence and research, a full spectrum of investment offerings supported by both proprietary and third-party research and manager selection, and overlay portfolio management services. | |
Envestnet | Tamarac provides leading portfolio accounting, rebalancing, trading, performance reporting and client relationship management software, principally to high-end Registered Investment Advisors (“RIAs”). | |
Through these platform and service offerings, the Company provides open-architecture support for a wide range of investment products (separately managed accounts, multi-manager accounts, mutual funds, exchange-traded funds, stock baskets, alternative investments, and other fee-based investment solutions) from Envestnet | PMC and other leading investment providers via multiple custodians, and also account administration and reporting services. | |
Envestnet operates four RIAs and a registered broker-dealer. The RIAs are registered with the Securities and Exchange Commission (“SEC”). The broker-dealer is registered with the SEC, all 50 states and the District of Columbia and is a member of the Financial Industry Regulatory Authority (“FINRA”). |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Summary of Significant Accounting Policies | ' | ||||
Summary of Significant Accounting Policies | ' | ||||
2. Summary of Significant Accounting Policies | |||||
The Company follows accounting standards established by the Financial Accounting Standards Board (“FASB”) to ensure consistent reporting of financial condition, results of operations and cash flows. References to Generally Accepted Accounting Principles (“GAAP”) in these footnotes are to the FASB Accounting Standards CodificationTM, sometimes referred to as the codification or ASC. | |||||
Principles of Consolidation—The consolidated financial statements include the accounts of Envestnet and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Accounts denominated in a non-U.S. currency have been re-measured using the U.S. dollar as the functional currency. | |||||
Management Estimates—Management of the Company has made certain estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with GAAP. Significant areas requiring the use of management estimates relate to estimating uncollectible receivables, revenue recognition, costs capitalized for internally developed software, valuations and assumptions used for impairment testing of goodwill, intangible and other long-lived assets, fair value of stock and stock options issued, fair value of customer inducement assets and liabilities, fair value of contingent consideration, realization of deferred tax assets, uncertain tax positions and assumptions used to allocate purchase prices in business combinations. Actual results could differ materially from these estimates under different assumptions or conditions. | |||||
Revenue Recognition—The Company recognizes revenue from services related to asset management and administration, licensing and professional services fees. The Company recognizes revenue when all of the following conditions are satisfied: (i) there is persuasive evidence of an arrangement, (ii) the service or product has been provided to the customer and no uncertainties exist surrounding product acceptances (iii) the amount of fees to be paid by the customer is fixed or determinable; and (iv) the collection of fees is reasonably assured. | |||||
· Asset management and administration fees — The Company derives revenues from fees charged as a percentage of the assets that are managed or administered on its technology platform by financial advisors, financial institutions, and their clients (collectively “customers”) and for services the Company provides to its customers. Such services include investment manager due diligence and research, portfolio diagnostics, proposal generation, investment model management, rebalancing and trading, portfolio performance reporting and monitoring solutions, billing, and back office and middle-office operations and administration. Investment decisions for assets under management or administration are made by our customers. The asset management and administration fees the Company earns are generally based upon a contractual percentage of assets managed or administered on our platform based on preceding quarter-end values. The contractual fee percentages vary based on the level and type of services the Company provides to its customers. Fees related to assets under management or administration increase or decrease based on values of existing customer accounts. The values are affected by inflows or outflows of customer funds and market fluctuations. | |||||
· Licensing and professional services fees— | |||||
Licensing— The Company derives licensing fees from recurring contractual fixed fee contracts with larger financial institutions or enterprise clients. Licensing contracts allow the customer to provide a unique configuration of platform features and investment solutions for their advisors. The licensing fees vary based on the type of services provided and our revenues received under license agreements are recognized over the contractual term. The Company’s license agreements do not generally provide its customers the ability to take possession of the software or host the software on the customers’ own systems or through a hosting arrangement with an unrelated party. | |||||
When the Company enters into arrangements with multiple deliverables, exclusive of arrangements with software deliverables, it applies the FASB’s guidance for revenue arrangements with multiple deliverables and evaluates each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (i) whether the delivered item has value to the customer on a stand-alone basis, and (ii) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Revenue is allocated to each unit of accounting or element based on relative selling prices. The Company determines relative selling prices by using either (i) vendor-specific objective evidence (“VSOE”) if it exists; or (ii) third-party evidence (“TPE”) of selling price. When neither VSOE nor TPE of selling price exists for a deliverable, the Company uses its best estimate of the selling price for that deliverable. | |||||
After determining which deliverables represent a separate unit of accounting, each unit is then accounted for under the applicable revenue recognition guidance. In cases where elements cannot be treated as separate units of accounting, the elements are combined into a single unit of accounting for revenue recognition purposes. If one of the elements that are combined into a single unit of accounting is fees from professional services, including implementation related services or customized service platform software development, the professional service fees are recognized over the course of the expected customer relationship. We have estimated the life of the customer relationship by considering both the historical retention rate of our customers while not exceeding the number of years over which we can accurately forecast future revenues. We currently estimate this term to be five years. | |||||
When the Company enters into arrangements with multiple deliverables involving software, the Company applies the American Institute of Certified Public Accountants’ (“AICPA”) accounting guidance for software. The entire arrangement fee is allocated to each element in the arrangement based on the respective VSOE of fair value of each element. | |||||
Professional services— The Company derives professional service fees from providing contractual customized service platform software development, which are recognized under a proportional performance model utilizing an output-based approach. The Company’s contracts generally have fixed prices, and generally specify or quantify interim deliverables. | |||||
Cash received by the Company in advance of the performance of services is deferred and recognized as revenue when earned. Certain portions of the Company’s revenues require management’s consideration of the nature of the client relationship in determining whether to recognize as revenue the gross amount billed or net amount retained after payments are made to providers for certain services related to the product or service offering. | |||||
The Company uses the following factors to determine whether to record revenue on a gross or net basis: | |||||
· the Company has a direct contract with the third party service provider; | |||||
· the Company has discretion in establishing fees paid by the customer and fees due to the third party service provider; and | |||||
· the Company has credit risk | |||||
When customer fees include charges for third party service providers where the Company has a direct contract with such third party service providers, gross revenue recognized by the Company equals the fee paid by the customer. The cost of revenues recognized by the Company is the amount due to the third party service provider. | |||||
In instances where the Company does not have a direct contract with the third party service provider, the Company cannot exercise discretion in establishing fees paid by the customer and fees due to the third party service provider, and the Company does not have credit risk, the Company records the revenue on a net basis. | |||||
Deferred Revenue—Deferred revenue primarily consists of implementation and set up fees, professional services, and license fee payments received in advance from customers. | |||||
Cost of Revenues—Cost of revenues primarily include expenses related to third party investment management and clearing, custody and brokerage services. Generally, these expenses are calculated based upon a contractual percentage of the market value of assets held in customer accounts measured as of the end of each quarter and are recognized ratably throughout the quarter based on the number of days in the quarter. | |||||
Allowance for Doubtful Accounts—The Company evaluates the need for an allowance for doubtful accounts for potentially uncollectible fees receivable. In establishing the amount of the allowance, if any, customer-specific information is considered related to delinquent accounts, including historical loss experience and current economic conditions. As of December 31, 2013 and 2012, the Company’s allowance for doubtful accounts was $203 and $0, respectively. The following table summarizes the changes to the allowance for doubtful accounts: | |||||
December 31, | |||||
2013 | |||||
Balance, beginning of year | $ | — | |||
Add: Provisions for doubtful accounts | 203 | ||||
Less: Write-offs | — | ||||
Balance, end of year | $ | 203 | |||
Segments—The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis. Historically, the Company has determined that it has a single reporting segment and operating unit structure. As a result of the acquisitions as discussed in Note 3, the Company has re-examined its reporting and operating structure and has determined it continues to maintain a single reporting segment and operating unit structure. | |||||
Fair Value of Financial Instruments—The carrying amounts of financial instruments, net of any allowances, including cash equivalents, fees receivable, accounts payable and accrued expenses are considered to be reasonable estimates of their fair values due to their short-term nature. | |||||
Cash and Cash Equivalents—The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair value. The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash accounts at financial institutions in excess of amounts insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company monitors such credit risk and has not experienced any losses related to such risk. | |||||
Investments— Investments are recorded at cost and reviewed for impairment. Investments are included in “Other non-current assets” on the consolidated balance sheets and consist of non-marketable investments in privately held companies, as well as other alternative investments. The Company reviews these investments on a regular basis to evaluate the carrying amount and economic viability of these investments. This policy includes, but is not limited to, reviewing each of the investee’s cash position, financing needs, earnings/revenue outlook, operational performance, management/ownership changes and competition. The evaluation process is based on information that the Company requests from these investees. This information is not subject to the same disclosure regulations as U.S. publicly traded companies, and as such, the basis for these evaluations is subject to the timing and accuracy of the data received from these investees. | |||||
The Company’s investments are assessed for impairment when a review of the investee’s operations indicates that there is a decline in value of the investment and the decline is other than temporary. Such indicators include, but are not limited to, limited capital resources, limited prospects of receiving additional financing, and prospects for liquidity of the related securities. Impaired investments are written down to estimated fair value. The Company estimates fair value using a variety of valuation methodologies, including comparing the investee with publicly traded companies in similar lines of business, applying valuation multiples to estimated future operating results and estimated discounted future cash flows. There were impairments to investments of $47, $0 and $0 during the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
Property and Equipment—Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of furniture and equipment is computed using the straight-line method based on estimated useful lives of the depreciable assets. Leasehold improvements are amortized on a straight-line basis over their estimated economic useful lives or the remaining lease term, whichever is shorter. Improvements are capitalized, while repairs and maintenance costs are charged to operations as incurred. Assets are reviewed for recoverability whenever events or circumstances indicate the carrying value may not be recoverable. | |||||
Customer Inducements—Payments made to customers as an inducement are capitalized and amortized against revenue on a straight-line basis over the term of the agreement. | |||||
Internally Developed Software—Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs are expensed as incurred. Internally developed software is amortized on a straight-line basis over its estimated useful life. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no impairments of internally developed software during the years ended December 31, 2013, 2012 and 2011. | |||||
Goodwill and Intangible Assets—Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. Goodwill is reviewed for impairment each year using a two-step process that is performed at least annually or whenever events or circumstances indicate that impairment may have occurred. The Company has concluded that it has a single reporting unit. The first step is a comparison of the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying value, goodwill of the reporting unit is not considered impaired and the second step is unnecessary. If the carrying value of the reporting unit exceeds its fair value, a second test is performed to measure the amount of impairment by comparing the carrying amount of the goodwill to a determination of the implied fair value of the goodwill. If the carrying amount of the goodwill is greater than the implied value, an impairment loss is recognized for the difference. The implied value of the goodwill is determined as of the test date by performing a purchase price allocation, as if the reporting unit had just been acquired, using currently estimated fair values of the individual assets and liabilities of the reporting unit, together with an estimate of the fair value of the reporting unit taken as a whole. The estimate of the fair value of the reporting unit is based upon information available regarding prices of similar groups of assets, or other valuation techniques including present value techniques based upon estimates of future cash flows. No impairment charges have been recorded for the years ended December 31, 2013, 2012 and 2011. | |||||
Intangible assets are recorded at cost less accumulated amortization. Intangible assets are reviewed for impairment whenever events or changes in circumstances may affect the recoverability of the net assets. Such reviews include an analysis of current results and take into consideration the undiscounted value of projected operating cash flows. | |||||
Long-Lived Assets—Long-lived assets, such as property, equipment, capitalized internal use software and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. All long-lived assets of the Company are located in the U.S., except for approximately $997 and $764 as of December 31, 2013 and 2012, respectively, which are located in India. | |||||
Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact recoverability of these assets. There were impairments to long-lived assets of $283, $0 and $0 during the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
Leases—In certain circumstances, the Company enters into leases with free rent periods, rent escalations or lease incentives over the term of the lease. In such cases, the Company calculates the total payments over the term of the lease and records them ratably as rent expense over that term. | |||||
Income Taxes—The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce deferred tax assets to an amount that is more likely than not to be realized. | |||||
The Company follows authoritative guidance related to how uncertain tax positions should be recognized, measured, disclosed and presented in the consolidated financial statements. This requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained “when challenged” or “when examined” by the applicable tax authority. The tax benefits recognized in the consolidated financial statements from tax positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. | |||||
Advertising Costs—The Company expenses all advertising costs as incurred and they are classified within general and administration expenses. Advertising costs totaled approximately $1,028, $1,504 and $1,388 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
Research and Development—The Company intends to continue to invest in its technology platform and software and service offerings to provide financial advisors with access to investment solutions and services that address the widest range of financial advisors’ front-, middle-and back-office needs. In the years ended December 31, 2013, 2012 and 2011, our technology development expenses totaled $5,998, $6,309, and $4,942, respectively, exclusive of capitalization of internally developed software and related amortization. | |||||
Business Combinations—The Company accounts for business combinations under the acquisition method. The cost of an acquired company is assigned to the tangible and intangible assets acquired and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires management to make estimates and use valuation techniques when market values are not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Transaction costs associated with business combinations are expensed as incurred. | |||||
Stock-Based Compensation—Compensation cost relating to stock-based awards made to employees and directors is recognized in the consolidated financial statements using the Black-Scholes option-pricing model in the case of non-qualified stock option awards, and intrinsic value in the case of restricted stock awards. The Company measures the cost of such awards based on the estimated fair value of the award measured at the grant date and recognizes the expense on a straight-line basis over the requisite service period, which is the vesting period. | |||||
Determining the fair value of stock options requires the Company to make several estimates, including the volatility of its stock price, the expected life of the option, forfeiture rate, dividend yield and interest rates. Prior to July 28, 2010, the Company was not a publicly traded company. Accordingly, the Company had limited historical information on the price of its stock as well as employees’ stock option exercise behavior. Because of this limitation, the Company cannot rely on its historical experience alone to develop assumptions for stock-price volatility and the expected life of its options. The Company estimates the expected life of its options using the “Simplified Method.” The Company estimates stock-price volatility with reference to a peer group of publicly traded companies. Determining the companies to include in this peer group involves judgment. The Company utilizes a risk-free interest rate, which is based on the yield of U.S. zero coupon securities with a maturity equal to the expected life of the options. The Company has not and does not expect to pay dividends on its common shares. | |||||
The Company is required to estimate expected forfeitures of stock-based awards at the grant date and recognize compensation cost only for those awards expected to vest. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. Therefore, changes in the forfeiture assumptions may impact the total amount of expense ultimately recognized over the vesting period. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances. | |||||
Reclassifications—Certain reclassifications were made to the December 31, 2012 consolidated balance sheet to conform to the 2013 presentation. | |||||
Recent Accounting Pronouncements | |||||
There are no recent accounting pronouncements that have or are expected to have a material effect on our operating results or financial position. |
Business_Acquisitions
Business Acquisitions | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Business Acquisitions | ' | ||||||||
Business Acquisitions | ' | ||||||||
3. Business Acquisitions | |||||||||
FundQuest Incorporated | |||||||||
On December 13, 2011, the Company acquired all of the outstanding shares of FundQuest Incorporated (“FundQuest”), a subsidiary of BNP Paribas Investment Partners USA Holdings, Inc. for total consideration of $27,796. FundQuest was renamed Envestnet Portfolio Solutions, Inc. (“EPS”) subsequent to the acquisition. EPS provides managed account programs, overlay portfolio management, mutual funds, institutional asset management and investment consulting to registered investment advisors, independent advisors, broker-dealers, banks and trust organizations. The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction and the knowledge and experience of the workforce in place. The goodwill recognized is not deductible for income tax purposes. | |||||||||
In February 2010, the Company signed a seven-year platform services agreement (the “Agreement”) with FundQuest. Pursuant to the Agreement with FundQuest, the Company provided FundQuest and its clients with the Company’s platform technology and support services, replacing FundQuest’s technology platform. The Company earned fees based upon a contractual percentage of assets under administration. In connection with the Agreement, the Company was required to make various payments to FundQuest during the contract term as defined in the Agreement. These payments included an up-front payment upon completion of the conversion of FundQuest’s clients’ assets to the Company’s technology platform, five annual payments and a payment after the fifth year of the Agreement calculated based on the average annual revenues the Company was to receive from FundQuest during the first five years of the contract term. In addition, the Company also issued to FundQuest a warrant to purchase 1,388,888 shares of its common stock, with an exercise price of $10.80 for an estimated fair value of $2,946 (see Note 11). The present value of all payments and the fair value of the warrant was originally accounted for as customer inducement costs and were amortized as a reduction to the Company’s revenues from assets under management or administration on a straight-line basis over the contract term of seven years. Customer inducement amortization totaled $0, $0 and $4,568 for 2013, 2012 and 2011, respectively, and imputed interest totaled $0, $0 and $771 for 2013, 2012 and 2011, respectively. | |||||||||
Upon the acquisition, the Agreement between the Company and FundQuest was effectively settled. The Company analyzed the Agreement to determine the amount by which the contract was favorable or unfavorable when compared to current market pricing. The Company, using the discounted cash flow method, determined the Agreement resulted in a favorable amount of $4,897. The favorable amount of the Agreement was compared to the net book value of the customer inducement asset and liability at the date of the business combination resulting in a charge of approximately $1,183, which is included in other expense in the consolidated statements of operations for the year ended December 31, 2011. The net cash portion of the total consideration paid is included in “Cash flows from investing activities” in the consolidated statements of cash flows. | |||||||||
The consideration transferred in the acquisition was as follows: | |||||||||
Cash paid to owners | $ | 24,390 | |||||||
Non-cash consideration: | |||||||||
Favorable contract | 4,897 | ||||||||
Other | 1,241 | ||||||||
Cash acquired | (671 | ) | |||||||
Working capital adjustment | (2,061 | ) | |||||||
$ | 27,796 | ||||||||
During 2012, the Company finalized the estimated working capital adjustment, which resulted in a decrease in goodwill of approximately $889 and an increase in prepaid expenses and other current assets, which was retrospectively adjusted in the December 31, 2011 consolidated balance sheet and the related notes to the consolidated financial statements. | |||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of December 13, 2011, as adjusted. | |||||||||
December 31, 2011 | |||||||||
(as adjusted) | |||||||||
Accounts receivable | $ | 2,603 | |||||||
Prepaid expenses and other current assets | 46 | ||||||||
Property and equipment | 442 | ||||||||
Intangible assets | 11,830 | ||||||||
Goodwill | 19,303 | ||||||||
Accounts payable and accrued liabilities | (1,364 | ) | |||||||
Deferred income taxes | (4,710 | ) | |||||||
Deferred revenue | (354 | ) | |||||||
Total net assets acquired | $ | 27,796 | |||||||
A summary of intangible assets acquired, estimated useful lives and amortization method was as follows: | |||||||||
Amount | Weighted- | Amortization | |||||||
Average | Method | ||||||||
Useful Life | |||||||||
In Years | |||||||||
Customer list | $ | 11,830 | 7 | Accelerated | |||||
The results of EPS’s operations are included in the consolidated statements of operations beginning December 13, 2011 and were not material to the 2011 results of operations. | |||||||||
Prima Capital Holding, Inc. | |||||||||
On April 5, 2012, the Company completed the acquisition of Prima Capital Holding, Inc. (“Prima”). In accordance with the stock purchase agreement, the Company acquired all of the outstanding shares of Prima for total consideration of approximately $13,925. Prima provides investment management due diligence, research applications, asset allocation modeling and multi-manager portfolios to the wealth management and retirement industries. Prima’s clientele includes banks, independent RIAs, regional broker-dealers, family offices and trust companies. The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction and the knowledge and experience of the workforce in place. The goodwill is not deductible for income tax purposes. | |||||||||
The consideration transferred in the acquisition was as follows: | |||||||||
Cash paid to owners | $ | 13,750 | |||||||
Cash acquired | (1,767 | ) | |||||||
Cash paid for working capital settlement | 1,942 | ||||||||
$ | 13,925 | ||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | |||||||||
Accounts receivable | $ | 72 | |||||||
Prepaid expenses and other current assets | 36 | ||||||||
Notes receivable | 860 | ||||||||
Property and equipment | 103 | ||||||||
Deferred income taxes - non current | 1,328 | ||||||||
Intangible assets | 4,940 | ||||||||
Goodwill | 9,283 | ||||||||
Accounts payable and accrued liabilities | (171 | ) | |||||||
Deferred income tax liabilities | (1,796 | ) | |||||||
Deferred revenue | (730 | ) | |||||||
Total net assets acquired | $ | 13,925 | |||||||
A summary of intangible assets acquired, estimated useful lives and amortization method is as follows: | |||||||||
Amount | Weighted- | Amortization | |||||||
Average | Method | ||||||||
Useful Life | |||||||||
in Years | |||||||||
Customer list | $ | 3,740 | 10 | Accelerated | |||||
Proprietary technology | 700 | 5 | Accelerated | ||||||
Trade names | 500 | 5 | Accelerated | ||||||
Total | $ | 4,940 | |||||||
The results of Prima’s operations are included in the consolidated statements of operations beginning April 5, 2012. Prima’s revenues and net loss for the nine months ended December 31, 2012 totaled $3,626 and ($791), respectively. The net loss for the nine months ended December 31, 2012 included pre-tax acquired intangible asset amortization of $1,005. | |||||||||
Tamarac, Inc. | |||||||||
On May 1, 2012, the Company completed the acquisition of Tamarac, Inc. (“Tamarac”). In accordance with the merger agreement, a newly formed subsidiary of Envestnet merged with and into Tamarac, and Tamarac became a wholly-owned subsidiary of Envestnet. Under the terms of the merger agreement, total consideration was approximately $48,427 for all of the outstanding stock of Tamarac. Tamarac provides leading portfolio accounting, rebalancing, trading, performance reporting and client relationship management software, principally to high-end RIAs. The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction and the knowledge and experience of the workforce in place. The goodwill recognized is not deductible for income tax purposes. | |||||||||
The consideration transferred in the acquisition was as follows: | |||||||||
Cash paid to owners | $ | 54,000 | |||||||
Non-cash consideration | 101 | ||||||||
Cash acquired | (2,533 | ) | |||||||
Receivable from working capital settlement | (3,141 | ) | |||||||
$ | 48,427 | ||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition. | |||||||||
Accounts receivable | $ | 489 | |||||||
Other receivables | 681 | ||||||||
Prepaid expenses and other current assets | 216 | ||||||||
Deferred income tax assets | 7,235 | ||||||||
Property and equipment | 444 | ||||||||
Deposits | 379 | ||||||||
Intangible assets | 16,150 | ||||||||
Goodwill | 35,027 | ||||||||
Accounts payable and accrued liabilities | (2,356 | ) | |||||||
Deferred income tax liabilities | (5,907 | ) | |||||||
Deferred revenue | (3,931 | ) | |||||||
Total net assets acquired | $ | 48,427 | |||||||
A summary of intangible assets acquired, estimated useful lives and amortization method is as follows: | |||||||||
Amount | Weighted- | Amortization | |||||||
Average | Method | ||||||||
Useful Life | |||||||||
in Years | |||||||||
Customer list | $ | 8,680 | 12 | Accelerated | |||||
Proprietary technology | 5,880 | 8 | Accelerated | ||||||
Trade names | 1,590 | 5 | Accelerated | ||||||
Total | $ | 16,150 | |||||||
The results of Tamarac’s operations are included in the consolidated statements of operations beginning May 1, 2012. Tamarac’s revenues and net loss for the eight-month period ended December 31, 2012 totaled $9,971 and ($1,236), respectively. The net loss for the eight months ended December 31, 2012 included pre-tax acquired intangible asset amortization of $1,304. | |||||||||
In accordance with the terms of the merger agreement between Envestnet and Tamarac, Tamarac senior management was required to apply at least 50% (up to 100%) of the aggregate proceeds of the Tamarac change of control payment totaling $2,759 to purchase registered shares of Envestnet common stock (232,150 shares) in an amount equal to 95% multiplied by the Envestnet closing market price on the day before the merger closed (see Note 11). | |||||||||
In addition, the Company adopted the Envestnet, Inc. Management Incentive Plan for Envestnet | Tamarac Management Employees (the “2012 Plan”). The 2012 Plan provides for the grant of up to 559,551 shares of unvested common stock. The unvested common stock vests based upon Tamarac meeting certain performance conditions and then a subsequent two-year service condition (see Note 12). The Company also granted to certain Tamarac employees 232,150 stock options to acquire Envestnet common stock at an exercise price of $12.51. These stock options vest on the second anniversary of the grant date (see Note 12). | |||||||||
Wealth Management Solutions | |||||||||
On July 1, 2013, the Company completed the acquisition of the Wealth Management Solutions (“WMS”) division of Prudential Investments. In accordance with the purchase agreement, the Company acquired substantially all of the assets and assumed certain liabilities of WMS for total consideration of $24,730. WMS is a provider of technology solutions that enables financial services firms to develop and enhance their wealth management offerings. The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction and the knowledge and experience of the workforce in place. The goodwill is deductible for income tax purposes. | |||||||||
The consideration in the acquisition was as follows: | |||||||||
Cash consideration | $ | 8,992 | |||||||
Contingent consideration | 15,738 | ||||||||
$ | 24,730 | ||||||||
In connection with the acquisition of WMS, the Company is required to pay Prudential Investments contingent consideration of up to a total of $23,000 in cash, based upon meeting certain performance targets. The Company recorded a liability as of the date of acquisition of $15,738, which represented the estimated fair value of contingent consideration on the date of acquisition and is considered a Level 3 fair value measurement as described in Note 8. The estimated fair value of contingent consideration as of December 31, 2013 was $17,026. This amount is the present value of an undiscounted liability of $19,670, applying a discount rate of 10%. Payments will be made at the end of three twelve month closing periods. The future undiscounted payments are anticipated to be $6,000 on July 31, 2014, $6,745 on July 31, 2015 and $6,925 on July 31, 2016. The final future payments may be greater or lower than these amounts, based upon the attainment of performance targets. Changes to the estimated fair value of the contingent consideration are recognized in earnings of the Company. | |||||||||
For the six month period ending December 31, 2013, the Company recognized imputed interest expense on contingent consideration of $787 and an estimated fair value adjustment on contingent consideration of $501, which are included in general and administration expense in the condensed consolidated statement of operations. | |||||||||
The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition: | |||||||||
Total tangible assets acquired | $ | 1,296 | |||||||
Total liabilities assumed | (2,257 | ) | |||||||
Identifiable intangible assets: | |||||||||
Customer list | 14,000 | ||||||||
Proprietary technology | 3,000 | ||||||||
Goodwill | 8,691 | ||||||||
Total net assets acquired | $ | 24,730 | |||||||
A summary of intangible assets acquired, estimated useful lives and amortization method is as follows: | |||||||||
Amount | Weighted Average | Amortization | |||||||
Useful Life in Years | Method | ||||||||
Customer list | $ | 14,000 | 12 | Accelerated | |||||
Proprietary technology | 3,000 | 1.5 | Accelerated | ||||||
Total | $ | 17,000 | |||||||
The results of WMS operations are included in the condensed consolidated statement of operations beginning July 1, 2013. WMS’s revenues and net loss for the six month period ended December 31, 2013 totaled $33,517 and ($1,056), respectively. The net loss includes acquired intangible asset amortization of $2,164, imputed interest expense on contingent consideration of $787 and an estimated fair value adjustment on contingent consideration of $501. | |||||||||
Acquisition related costs of $946, $2,317 and $405 are included in general and administration expenses in the consolidated statements of operations for the years ended December 31, 2013, 2012, and 2011, respectively. | |||||||||
Pro forma results for Envestnet, Inc. giving effect to the Prima, Tamarac and WMS acquisitions | |||||||||
The following unaudited pro forma financial information presents the combined results of operations of Envestnet and WMS for the year ended December 31, 2013 and Envestnet, Prima, Tamarac and WMS for the year ended December 31, 2012. The unaudited pro forma financial information presents the results as if the acquisitions had occurred as of the beginning of 2012. | |||||||||
The unaudited pro forma results presented include amortization charges for acquired intangible assets and stock-based compensation expense, and the elimination of intercompany transactions, unrealized gain or loss on warrant, imputed interest expense, and transaction-related expenses and the related tax effect on the aforementioned items. | |||||||||
Pro forma financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place as of the beginning of 2012. | |||||||||
At December 31, | |||||||||
2013 | 2012 | ||||||||
Revenues | $ | 274,983 | $ | 223,838 | |||||
Net loss | (9,935 | ) | (25,351 | ) | |||||
Net loss per share: | |||||||||
Basic | (0.30 | ) | (0.79 | ) | |||||
Diluted | (0.30 | ) | (0.79 | ) | |||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property and Equipment | ' | ||||||||||
Property and Equipment | ' | ||||||||||
4. Property and Equipment | |||||||||||
Property and equipment consists of the following: | |||||||||||
At December 31, | |||||||||||
Estimated Useful Life | 2013 | 2012 | |||||||||
Cost: | |||||||||||
Office furniture and fixtures | 5-7 years | $ | 4,266 | $ | 3,613 | ||||||
Computer equipment and software | 3 years | 26,910 | 22,098 | ||||||||
Other office equipment | 5 years | 598 | 598 | ||||||||
Leasehold improvements | Shorter of the lease term or useful life of the asset | 8,299 | 7,638 | ||||||||
40,073 | 33,947 | ||||||||||
Less accumulated depreciation and amortization | (27,307 | ) | (22,156 | ) | |||||||
Property and equipment, net | $ | 12,766 | $ | 11,791 | |||||||
Depreciation and amortization expense was as follows: | |||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Depreciation and amortization expense | $ | 5,151 | $ | 4,685 | $ | 3,862 | |||||
Internally_Developed_Software
Internally Developed Software | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Internally Developed Software | ' | ||||||||||
Internally Developed Software | ' | ||||||||||
5. Internally Developed Software | |||||||||||
Internally developed software consists of the following: | |||||||||||
At December 31, | |||||||||||
Estimated Useful Life | 2013 | 2012 | |||||||||
Internally developed software | 5 years | $ | 16,374 | $ | 13,232 | ||||||
Less accumulated amortization | (10,634 | ) | (8,908 | ) | |||||||
Internally developed software, net | $ | 5,740 | $ | 4,324 | |||||||
Amortization expense was as follows: | |||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Amortization expense | $ | 1,726 | $ | 1,550 | $ | 1,579 | |||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||
6. Goodwill and Intangible Assets | ||||||||||||||||||||||
Changes in the carrying amount of the Company’s goodwill were as follows: | ||||||||||||||||||||||
Balance at December 31, 2011 | $ | 21,334 | ||||||||||||||||||||
Prima acquisition | 9,283 | |||||||||||||||||||||
Tamarac acquisition | 35,027 | |||||||||||||||||||||
Balance at December 31, 2012 | 65,644 | |||||||||||||||||||||
WMS acquisition | 8,691 | |||||||||||||||||||||
Balance at December 31, 2013 | $ | 74,335 | ||||||||||||||||||||
Intangible assets consist of the following: | ||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||
Gross | Net | Gross | Net | |||||||||||||||||||
Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | |||||||||||||||||
Useful Life | Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||
Customer lists | 4 - 12 years | $ | 42,103 | $ | (14,593 | ) | $ | 27,510 | $ | 28,103 | $ | (8,720 | ) | $ | 19,383 | |||||||
Proprietary technologies | 1.5 - 8 years | 9,580 | (2,792 | ) | 6,788 | 6,580 | (657 | ) | 5,923 | |||||||||||||
Trade names | 5 years | 2,090 | (690 | ) | 1,400 | 2,090 | (246 | ) | 1,844 | |||||||||||||
Total intangible assets | $ | 53,773 | $ | (18,075 | ) | $ | 35,698 | $ | 36,773 | $ | (9,623 | ) | $ | 27,150 | ||||||||
Amortization expense was as follows: | ||||||||||||||||||||||
Year ended December 31, | ||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||
Amortization expense | $ | 8,452 | $ | 6,165 | $ | 935 | ||||||||||||||||
Future amortization expense of the intangible assets as of December 31, 2013, is expected to be as follows: | ||||||||||||||||||||||
Years ending December 31: | ||||||||||||||||||||||
2014 | $ | 9,254 | ||||||||||||||||||||
2015 | 6,354 | |||||||||||||||||||||
2016 | 5,346 | |||||||||||||||||||||
2017 | 4,059 | |||||||||||||||||||||
2018 | 3,370 | |||||||||||||||||||||
Thereafter | 7,315 | |||||||||||||||||||||
$ | 35,698 | |||||||||||||||||||||
Other_NonCurrent_Assets
Other Non-Current Assets | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Other Non-Current Assets | ' | |||||||
Other Non-Current Assets | ' | |||||||
7. Other Non-Current Assets | ||||||||
Other non-current assets consist of the following: | ||||||||
At December 31, | ||||||||
2013 | 2012 | |||||||
Investment in private company | $ | 1,250 | $ | 1,250 | ||||
Deposits: | ||||||||
Lease | 1,751 | 1,655 | ||||||
Other | 286 | 264 | ||||||
Other | 1,642 | 366 | ||||||
$ | 4,929 | $ | 3,535 | |||||
The Company owns 1,250,000 Preferred A Units in a privately held company at a historical purchase price of $1,250. The Preferred A Units are entitled to a preferred distribution at a cumulative rate of 8% per annum of unreturned capital contributions, as defined in the agreement. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Fair Value Measurements | ' | ||||
Fair Value Measurements | ' | ||||
8. Fair Value Measurements | |||||
Financial assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon a fair value hierarchy established by U.S. GAAP, which prioritizes the inputs used to measure fair value into the following levels: | |||||
Level 1: | Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date. | ||||
Level 2: | Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or inputs that are observable and can be corroborated by observable market data. | ||||
Level 3: | Inputs reflect management’s best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments. | ||||
Fair Value on a Recurring Basis: | |||||
The Company periodically invests excess cash in money-market funds not insured by the FDIC. The Company believes that the investments in money market funds are on deposit with creditworthy financial institutions and that the funds are highly liquid. The fair values of the Company’s investments in money-market funds are based on the daily quoted market prices for the net asset value of the various money market funds. These money-market funds are considered Level 1 assets and totaled approximately $32,358 and $20,682 as of December 31, 2013 and 2012, respectively, and are included in cash and cash equivalents in the consolidated balance sheets. | |||||
The fair value of the contingent consideration liability described in Note 3 was estimated using a discounted cash flow method with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in the FASB’s ASC 820, Fair Value Measurements. The significant inputs in the Level 3 measurement not supported by market activity included the Company’s assessments of expected future cash flows related to our acquisition of WMS, primarily estimated revenues and expenses during the three years subsequent to the date of acquisition, and the discount rate considering the uncertainties associated with the obligation. | |||||
The Company utilized a discounted cash flow method considering expected future performance of WMS, and its ability to meet the target performance objectives as the main driver of the valuation, to arrive at the fair value of the contingent consideration. The Company will continue to reassess the fair value of the contingent consideration at each reporting date until settlement. Changes to the estimated fair value of the contingent consideration will be recognized in earnings of the Company. | |||||
The table below presents a reconciliation of all assets and liabilities of the Company measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period from December 31, 2012 to December 31, 2013: | |||||
Fair Value of | |||||
Contingent | |||||
Consideration | |||||
Liability | |||||
Balance at December 31, 2012 | $ | — | |||
Fair value on WMS acquisition date of July 1, 2013 | 15,738 | ||||
Fair value of other liabilities | 279 | ||||
Fair value estimate adjustment for the period July 1, 2013 - December 31, 2013 | 501 | ||||
Imputed interest for the period July 1, 2013 - December 31, 2013 | 787 | ||||
Balance at December 31, 2013 | $ | 17,305 | |||
The Company assesses 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 change in circumstances that 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 1, 2 and 3 during the year. |
Accrued_Expenses
Accrued Expenses | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accrued Expenses | ' | |||||||
Accrued Expenses | ' | |||||||
9. Accrued Expenses | ||||||||
Accrued expenses consist of the following: | ||||||||
At December 31, | ||||||||
2013 | 2012 | |||||||
Accrued investment manager fees | $ | 19,310 | $ | 12,937 | ||||
Accrued compensation and related taxes | 12,125 | 5,726 | ||||||
Accrued professional services | 694 | 408 | ||||||
Accrued restructuring charges | 551 | — | ||||||
Other accrued expenses | 2,562 | 1,523 | ||||||
$ | 35,242 | $ | 20,594 | |||||
As a result of the FundQuest, Prima and Tamarac acquisitions, the Company incurred restructuring charges of $115 in the year ended December 31, 2012, primarily severance charges for certain Tamarac employees and lease abandonment charges related to Prima. | ||||||||
The Company incurred restructuring charges of $474 (see Note 15), net of deferred rent adjustment, in the year ended December 31, 2013, due to lease termination penalties incurred to terminate the Denver and Raleigh leases. | ||||||||
The summary of activity in accrued restructuring charges was as follows: | ||||||||
Balance at December 31, 2011 | $ | 290 | ||||||
Restructuring provision incurred | 115 | |||||||
Payments | (405 | ) | ||||||
Balance at December 31, 2012 | — | |||||||
Restructuring charge, net | 474 | |||||||
Lease termination payment accrued | 551 | |||||||
Payments | (474 | ) | ||||||
Balance at December 31, 2013 | $ | 551 |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
Income Taxes | ' | ||||||||||||
10. Income Taxes | |||||||||||||
Income before income tax provision was generated in the following jurisdictions: | |||||||||||||
Year ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Domestic | $ | 4,074 | $ | 2,702 | $ | 10,291 | |||||||
Foreign | 1,638 | 366 | 289 | ||||||||||
Total | $ | 5,712 | $ | 3,068 | $ | 10,580 | |||||||
The components of the income tax provision charged to operations are summarized as follows: | |||||||||||||
Year ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Federal | $ | 3,432 | $ | 1,280 | $ | 261 | |||||||
State | 699 | 235 | 459 | ||||||||||
Foreign | 468 | 946 | 94 | ||||||||||
4,599 | 2,461 | 814 | |||||||||||
Deferred: | |||||||||||||
Federal | $ | (2,059 | ) | (48 | ) | 2,243 | |||||||
State | (492 | ) | 170 | (60 | ) | ||||||||
Foreign | 4 | 20 | (22 | ) | |||||||||
(2,547 | ) | 142 | 2,161 | ||||||||||
Total | $ | 2,052 | $ | 2,603 | $ | 2,975 | |||||||
Net deferred tax assets (liabilities) consist of the following: | |||||||||||||
At December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Current: | |||||||||||||
Deferred revenue | $ | — | $ | 346 | |||||||||
Prepaid expenses and accruals | 135 | (108 | ) | ||||||||||
Net operating loss and tax credit carryforwards | 2,702 | 2,563 | |||||||||||
Total current deferred tax assets | 2,837 | 2,801 | |||||||||||
Less valuation allowance | (375 | ) | (712 | ) | |||||||||
Net current deferred tax assets | 2,462 | 2,089 | |||||||||||
Non-current: | |||||||||||||
Deferred rent and lease incentives | 2,017 | 2,212 | |||||||||||
Net operating loss and tax credit carryforwards | 14,210 | 13,980 | |||||||||||
Loss on investments | (10 | ) | 2,157 | ||||||||||
Property and equipment and intangible assets | (10,193 | ) | (13,284 | ) | |||||||||
Stock compensation expense | 5,004 | 3,058 | |||||||||||
Other | (284 | ) | 180 | ||||||||||
Total long-term deferred tax assets | 10,744 | 8,303 | |||||||||||
Less valuation allowance | (2,377 | ) | (2,109 | ) | |||||||||
Net long-term deferred tax assets | $ | 8,367 | $ | 6,194 | |||||||||
The valuation allowance for net deferred tax assets as of December 31, 2013 and 2012 was $2,752 and $2,821, respectively. The valuation allowance as of December 31, 2013 and 2012 was related to capital losses of $2,085 and federal and state net operating losses of $667 for 2013, and capital losses of $2,157 and federal and state net operating losses of $644 for 2012. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some or all of the deferred tax assets will be realized. | |||||||||||||
The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which net operating losses and temporary differences are deductible. Management considers the scheduled reversal of deferred tax assets and liabilities (including the impact of available carryback and carryforward periods), projected taxable income, and tax-planning strategies in making this assessment. In order to fully realize the deferred tax assets, the Company will need to generate future taxable income before the expiration of the deferred tax assets governed by the tax code. Based on the level of taxable income and projections for future taxable income over the periods for which the net operating losses are available and deferred tax assets are deductible, management believes that it is more-likely-than-not that, in consideration of its recorded valuation allowance, it will realize the benefits of the net operating losses and any other deferred tax assets. The amount of the deferred tax assets considered realizable however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. | |||||||||||||
Upon exercise of stock options, the Company recognizes any difference between GAAP compensation expense and compensation expense for income tax purposes as a tax windfall or shortfall. The difference is charged to equity in the case of a windfall. When the exercise results in a windfall and the windfall results in a net operating loss (“NOL”), or the windfall increases an NOL carryforward, no windfall is recognized until the deduction reduces income taxes payable. For GAAP purposes, the Company has recognized all previously suspended windfall tax benefits because they were utilized on the Company’s 2012 tax return to reduce taxes payable. The Company has recognized all current windfall tax benefits because they will be utilized on the Company’s 2013 tax return to reduce taxes payable. The benefits were recorded in stockholders’ equity, and as such, do not impact the Company’s effective tax rate. | |||||||||||||
The expected tax provision calculated at the statutory federal rate differs from the actual provision as follows: | |||||||||||||
Year ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Tax provision, at U.S. federal statutory tax rate | $ | 1,942 | $ | 1,043 | $ | 3,597 | |||||||
State income tax, net of federal tax benefit | 149 | 64 | 449 | ||||||||||
Effect of permanent items | 581 | 414 | 487 | ||||||||||
Change in assertion over permanent reinvestment of foreign earnings | — | — | (234 | ) | |||||||||
Effect of return to provision adjustment | (733 | ) | (81 | ) | (113 | ) | |||||||
Change in valuation allowance | — | (620 | ) | — | |||||||||
Effect of contract settlement | — | — | (1,186 | ) | |||||||||
Effect of change in state income tax rate | — | 691 | — | ||||||||||
Uncertain tax positions | 1,016 | 1,105 | (25 | ) | |||||||||
Foreign income taxes | (328 | ) | (93 | ) | — | ||||||||
State income tax adjustments | (24 | ) | 62 | — | |||||||||
Effect of repatriation of foreign earnings | 582 | — | — | ||||||||||
Research and development credits | (1,246 | ) | — | — | |||||||||
Other | 113 | 18 | — | ||||||||||
Income tax provision | $ | 2,052 | $ | 2,603 | $ | 2,975 | |||||||
At December 31, 2013, the Company had NOL carryforwards for federal income tax purposes of $35,837 which are available to offset future federal taxable income, if any, and expire through 2031. | |||||||||||||
Of the $35,837 in NOL carryforwards, due to Internal Revenue Code Section 382 limitations, approximately $1,938 in NOLs will not be utilized. In addition, as of December 31, 2013, we had NOL carryforwards for state income tax purposes of $29,174, available to reduce future income subject to income taxes. The state NOL carryforwards expire through 2031. | |||||||||||||
In addition, the Company has alternative minimum tax credit carryforwards of approximately $75, which are available to reduce future federal regular income taxes, if any, over an indefinite period. | |||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefit was as follows: | |||||||||||||
Year ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Unrecognized tax benefits balance at beginning of year | $ | 1,097 | $ | 364 | $ | 415 | |||||||
Additions based on tax positions related to the current year | 181 | 517 | 128 | ||||||||||
Additions based on tax positions related to prior years | 1,045 | 474 | 55 | ||||||||||
Reductions for settlements with taxing authorities related to prior years | (56 | ) | — | — | |||||||||
Reductions for lapses of statute of limitations | (209 | ) | (258 | ) | (235 | ) | |||||||
Unrecognized tax benefits balance at end of year | $ | 2,058 | $ | 1,097 | $ | 364 | |||||||
At December 31, 2013, the amount of unrecognized tax benefits that would benefit the Company’s effective tax rate, if recognized, was $1,794. At this time, the Company estimates it is reasonably possible that the liability for unrecognized tax benefits will decrease by as much as $292 in the next twelve months due to the completion of reviews by tax authorities, the voluntary filing of certain state income taxes and the expiration of certain statutes of limitations. | |||||||||||||
The Company filed voluntary disclosure agreements with six states during 2013 to limit the exposure to state income taxes in states where the Company had not filed tax returns. As of December 31, 2013, the Company had not yet received notification that those liabilities will be settled and continues to maintain exposure in those states. It is management’s belief that these agreements will be settled within the next twelve months. | |||||||||||||
The Company recognizes potential interest and penalties related to unrecognized tax benefits in income tax expense. For the years ended December 31, 2013, 2012 and 2011, income tax expense includes $33, $448 and $14, respectively, of potential interest and penalties related to unrecognized tax benefits. The Company had accrued interest and penalties of $636 and $642 as of December 31, 2013 and 2012, respectively. | |||||||||||||
The Company files a consolidated federal income tax return and separate tax returns with various states. Additionally, a subsidiary of the Company files a tax return in a foreign jurisdiction. The Company’s tax returns for the calendar years ended December 31, 2012, 2011 and 2010 remain open to examination by the Internal Revenue Service in their entirety. With respect to state taxing jurisdictions, the Company’s tax returns for the fiscal year ended March 31, 2009, as well as for the calendar years ended December 31, 2012, 2011, 2010 and 2009 remain open to examination by various state revenue services. | |||||||||||||
Our Indian subsidiary is currently under examination by the India Tax Authority for the fiscal year ended March 31, 2009, 2011 and 2012. Based on the outcome of examinations of our subsidiary or the result of the expiration of statutes of limitations it is reasonably possible that the related unrecognized tax benefits could change from those recorded in the consolidated balance sheet. It is possible that one or more of these audits may be finalized within the next twelve months. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2013 | |
Stockholders' Equity | ' |
Stockholders' Equity | ' |
11. Stockholders’ Equity | |
In February 2010, in connection with the Agreement (see Note 3), the Company issued to FundQuest a warrant to purchase shares of the Company’s common stock, with an exercise price to be calculated as 120% of the Company’s initial public offering price per share of the Company’s common stock. As a result of the closing of the Company’s initial public offering, the number of shares of common stock issuable to FundQuest under the warrant was determined to be 1,388,888 at an exercise price of $10.80 per share. During 2011, the warrant was sold by FundQuest to a third party. On June 24, 2013, the third party exercised the warrant via a cashless exercise, and as a result, the Company issued 761,902 shares of the Company’s common stock to the third party. | |
In accordance with the terms of the merger agreement between Envestnet and Tamarac (see Note 3), Tamarac senior management were required to apply at least 50% (up to 100%) of the aggregate proceeds of the Tamarac change of control payment totaling $2,759 to purchase registered shares of Envestnet common stock (232,150 shares) in an amount equal to 95% multiplied by the Envestnet closing market price on the day before the merger closed. These shares cannot be sold or otherwise transferred for a period of two years following the date of merger. If a participant terminates their employment with the Company or is terminated for cause, the participant shall be required to pay the Company an amount equal to 5% multiplied by the closing market price on the day before the merger closed for each of the shares purchased by the participant. | |
During the fourth quarter of 2012, the Company reversed a $690 net operating loss tax benefit that was recognized incorrectly in 2010 as a result of the EnvestNet Group, Inc. merger. | |
On October 11, 2013, the Company completed a public offering of common shares on behalf of selling stockholders. A total of 5,801,997 shares were sold, including an overallotment option exercised by the underwriters, at a public offering price of $29.25 per share. The Company did not receive any proceeds from the sale of shares by the selling stockholders. The Company incurred costs of $1,089 during the year ended December 31, 2013 in relation to the public offering and this amount is included in general and administration expenses in the consolidated statement of operations. |
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Stock-Based Compensation | ' | |||||||||||
Stock-Based Compensation | ' | |||||||||||
12. Stock-Based Compensation | ||||||||||||
On December 31, 2004, the Company adopted a stock incentive plan (the “2004 Plan”). The 2004 Plan provided for the grant of options to employees, consultants, and non-employee directors to purchase common stock, which vest over time and have a ten-year contractual term. To satisfy options granted under the 2004 Plan, the Company made common stock available from authorized but unissued shares or shares held in treasury, if any, by the Company. Stock options granted under the 2004 Plan were non-qualified stock options, as defined in the 2004 Plan agreement. Stock options were granted with an exercise price no less than the fair-market-value price of the common stock at the date of the grant. | ||||||||||||
The 2004 Plan has a change in control provision whereby if a change in control occurs and the participant’s awards are not equitably adjusted, such awards shall become fully vested and exercisable and all forfeiture restrictions on such awards shall lapse. Based on the terms of the 2004 Plan, the Company’s initial public offering in 2010 did not trigger the change in control provision and did not result in any modifications to the outstanding equity awards under the 2004 Plan. | ||||||||||||
On June 22, 2010, the Board of Directors approved the 2010 Long-Term Incentive Plan (“2010 Plan”), effective upon the closing of the Company’s initial public offering. The 2010 Plan provides for the grant of options, stock appreciation rights, Full Value Awards (as defined in the 2010 Plan) and cash incentive awards to employees, consultants, and non-employee directors to purchase common stock, which vest over time and have a ten-year contractual term. The maximum number of shares of common stock that may be delivered under the 2010 Plan is equal to the sum of 2,700,000 plus the number of shares of common stock that are subject to outstanding awards under the 2004 Plan which are forfeited, expire or are cancelled after the effective date of the Company’s initial public offering. Stock options and stock appreciation rights are granted with an exercise price no less than the fair-market-value price of the common stock at the date of the grant. | ||||||||||||
As a result of the merger between Envestnet and Tamarac (see Note 3), the Company adopted the Envestnet, Inc. Management Incentive Plan for Envestnet | Tamarac Management Employees (the “2012 Plan”). The 2012 Plan provides for the grant of restricted common stock, stock options and the purchase of common stock for certain Tamarac employees. The maximum number of shares of stock which may be issued with respect to awards under the 2012 Plan is 1,023,851. | ||||||||||||
The 2012 Plan provides for the grant of up to 559,551 shares of unvested common stock (“Target Incentive Awards”). The Target Incentive Awards vest based upon Tamarac meeting certain performance conditions and then a subsequent two-year service condition. The Company measured the cost of these awards based on the estimated fair value of the award as of the market closing price on the day before the acquisition closed. The Company is recognizing the estimated expense on a graded-vesting method over a requisite service period of three to five years, which is the estimated vesting period. The Company estimates the expected vesting amount and recognizes compensation expense only for those awards expected to vest. This estimate is reassessed by management at each reporting period and may change based upon new facts and circumstances. Changes in the assumptions impact the total amount of expense ultimately recognized over the vesting period. | ||||||||||||
The Company also granted to certain Tamarac employees 232,150 stock options to acquire Envestnet common stock at an exercise price of $12.51. These stock options vest on the second anniversary of the grant date. | ||||||||||||
As of December 31, 2013, the maximum number of options and restricted stock available for future issuance under the Company’s plans is 1,296,092. | ||||||||||||
Employee stock-based compensation expense was as follows: | ||||||||||||
Year ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Employee stock-based compensation expense | $ | 8,738 | $ | 4,342 | $ | 3,062 | ||||||
Tax effect on employee stock-based compensation expense | (3,196 | ) | (1,643 | ) | (1,159 | ) | ||||||
Net effect on income | $ | 5,542 | $ | 2,699 | $ | 1,903 | ||||||
Stock Options | ||||||||||||
The following weighted average assumptions were used to value options granted during the periods indicated: | ||||||||||||
Year ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Grant date fair value of options | $ | 6.11 | $ | 4.96 | $ | 5.14 | ||||||
Volatility | 40.4 | % | 39.7 | % | 39.4 | % | ||||||
Risk-free interest rate | 1 | % | 1.2 | % | 2.37 | % | ||||||
Dividend yield | 0 | % | 0 | % | 0 | % | ||||||
Expected term (in years) | 6 | 6 | 6 | |||||||||
The following table summarizes option activity under the Company’s plans: | ||||||||||||
Options | Weighted- | Weighted-Average | Aggregate | |||||||||
Average | Remaining | Intrinsic Value | ||||||||||
Exercise Price | Contractual Life | |||||||||||
(Years) | ||||||||||||
Outstanding as of December 31, 2010 | 4,998,337 | $ | 7.64 | |||||||||
Granted | 486,833 | 12.37 | ||||||||||
Exercised | (447,528 | ) | 6.14 | |||||||||
Forfeited | (173,924 | ) | 9.36 | |||||||||
Outstanding as of December 31, 2011 | 4,863,718 | 8.19 | 6.8 | $ | 18,704 | |||||||
Granted | 738,915 | 12.53 | ||||||||||
Exercised | (298,947 | ) | 6.92 | |||||||||
Forfeited | (26,274 | ) | 11.03 | |||||||||
Outstanding as of December 31, 2012 | 5,277,412 | 8.86 | 6.3 | 26,885 | ||||||||
Granted | 190,413 | 15.34 | ||||||||||
Exercised | (721,050 | ) | 8.86 | |||||||||
Forfeited | (109,304 | ) | 12.33 | |||||||||
Outstanding as of December 31, 2013 | 4,637,471 | 9.04 | 5.4 | 31,877 | ||||||||
Options exercisable | 3,417,153 | 8.08 | 4.6 | 110,111 | ||||||||
The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the aggregate difference between the fair value of the Company’s common stock on December 31, 2013, 2012 and 2011 of $40.30, $13.95 and $11.96, respectively, and the exercise price of in-the-money options) that would have been received by the option holders had all option holders exercised their options as of that date. | ||||||||||||
Exercise prices of stock options outstanding as of December 31, 2013 range from $0.11 to $15.34. | ||||||||||||
Other information is as follows: | ||||||||||||
Year ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Total intrinsic value of options exercised | $ | 13,745 | $ | 1,611 | $ | 3,082 | ||||||
Cash received from exercises of stock options | 6,400 | 2,069 | 2,747 | |||||||||
Cash received from issuance of restricted stock | 1 | 2,759 | — | |||||||||
Restricted Stock Awards | ||||||||||||
Periodically, the Company grants restricted stock awards under the 2010 Plan to employees that vest one-third on each of the first three anniversaries of the grant date. The Company also granted restricted stock awards under the 2012 Plan that vest upon Tamarac meeting certain performance conditions and then a subsequent two-year service condition. | ||||||||||||
The following is a summary of the activity for unvested restricted stock awards granted under the Company’s plans: | ||||||||||||
Weighted- | ||||||||||||
Average Grant | ||||||||||||
Number of | Date Fair Value | |||||||||||
Shares | per Share | |||||||||||
Balance at December 31, 2010 | — | $ | — | |||||||||
Granted | 77,224 | 12.38 | ||||||||||
Vested | — | — | ||||||||||
Forfeited | (3,404 | ) | 12.55 | |||||||||
Balance at December 31, 2011 | 73,820 | 12.37 | ||||||||||
Granted | 714,934 | 12.5 | ||||||||||
Vested | (24,568 | ) | — | |||||||||
Expired/cancelled | (1,064 | ) | 12.45 | |||||||||
Forfeited | (4,132 | ) | 12.49 | |||||||||
Balance at December 31, 2012 | 758,990 | 12.49 | ||||||||||
Granted | 386,245 | 19.54 | ||||||||||
Vested | (74,298 | ) | — | |||||||||
Forfeited | (169,386 | ) | 12.69 | |||||||||
Balance at December 31, 2013 | 901,551 | 16.5 | ||||||||||
At December 31, 2013, there was $2,724 of unrecognized compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 0.9 years. At December 31, 2013, there was $3,694 of unrecognized compensation expense related to unvested restricted stock awards, which the Company expects to recognize over a weighted-average period of 1.8 years. | ||||||||||||
At December 31, 2013, there was an additional $5,448 of potential unrecognized stock compensation expense related to unvested restricted stock granted under the 2012 Plan that vests based upon Tamarac meeting certain performance conditions and then a subsequent two-year service condition, which the Company expects to recognize, if earned, over the remaining estimated vesting period of 1.3 to 3.3 years. On March 31, 2013, 181,625 shares of restricted stock became performance vested under the first year performance condition. These shares will become fully vested upon employees meeting the subsequent two-year service condition. | ||||||||||||
On April 11, 2013, the Company amended the 2012 Plan. The purpose of the amendment was to amend the methodology for determining the vesting requirements of performance awards granted under the 2012 Plan, as well as to grant awards to additional Envestnet | Tamarac employees eligible to participate in the 2012 Plan. The amendment to the 2012 Plan was treated as a modification. As a result, 113,249 performance awards were valued as of the date of the modification. Concurrent with the amendment, 103,521 performance awards were voluntarily forfeited by certain participants in the 2012 Plan and immediately reallocated to other participants in the 2012 Plan. |
Earnings_per_Share
Earnings per Share | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Earnings per Share | ' | ||||||||||
Earnings per Share | ' | ||||||||||
13. Earnings per Share | |||||||||||
Basic net income per common share is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding for the period. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of stock options, common warrants and restricted stock using the treasury stock method. | |||||||||||
The following table provides a reconciliation of the numerators and denominators used in computing basic and diluted net income per share attributable to common stockholders: | |||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Basic income per share calculation: | |||||||||||
Net income | $ | 3,660 | $ | 465 | $ | 7,605 | |||||
Basic number of weighted-average shares outstanding | 33,191,088 | 32,162,672 | 31,643,390 | ||||||||
Basic net income per share | $ | 0.11 | $ | 0.01 | $ | 0.24 | |||||
Diluted income per share calculation: | |||||||||||
Net income | $ | 3,660 | $ | 465 | $ | 7,605 | |||||
Basic number of weighted-average shares outstanding | 33,191,088 | 32,162,672 | 31,643,390 | ||||||||
Effect of dilutive shares: | |||||||||||
Options to purchase common stock | 1,979,474 | 954,056 | 974,192 | ||||||||
Common warrants | 378,282 | 177,257 | 211,495 | ||||||||
Restricted stock | 117,731 | 47,630 | 34,757 | ||||||||
Diluted number of weighted-average shares outstanding | 35,666,575 | 33,341,615 | 32,863,834 | ||||||||
Diluted net income per share | $ | 0.1 | $ | 0.01 | $ | 0.23 | |||||
Common share equivalents for securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share are as follows: | |||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Options to purchase common stock | — | 1,209,748 | 121,000 | ||||||||
Unvested restricted stock | 432,272 | 559,551 | — | ||||||||
Total | 432,272 | 1,769,299 | 121,000 |
Insurance_Recovery
Insurance Recovery | 12 Months Ended |
Dec. 31, 2013 | |
Insurance Recovery | ' |
Insurance Recovery | ' |
14. Insurance Recovery | |
On April 26, 2011, the Company and its directors’ and officers’ liability insurance carrier entered into an agreement under which the insurance carrier agreed to pay the Company $1,100 to reimburse the Company for defense fees and expenses incurred by the Company in 2010 related to certain litigation. This amount was received in 2011 and is included in other income in the consolidated statement of operations. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Commitments and Contingencies | ' | ||||||||||
Commitments and Contingencies | ' | ||||||||||
15. Commitments and Contingencies | |||||||||||
Leases | |||||||||||
The Company rents office space under leases that expire at various dates through 2026. In the third quarter of 2013, the Company exercised its right to early terminate the Denver and Raleigh office leases in accordance with the provisions of the leases. The total termination fees were $1,142, of which approximately $551 was paid during the third quarter. The remainder of the fee is due in July 2014. The impact of this early termination has been reflected in the lease commitment table below. During the year ended December 31, 2013, the Company recorded $474 (see Note 9) of restructuring charges, net of deferred rent adjustment, in the consolidated statement of operations related to these lease termination fees. | |||||||||||
Future annual minimum lease commitments under operating leases were as follows: | |||||||||||
Years ending December 31: | |||||||||||
2014 | $ | 5,987 | |||||||||
2015 | 5,592 | ||||||||||
2016 | 6,540 | ||||||||||
2017 | 6,125 | ||||||||||
2018 | 6,166 | ||||||||||
Thereafter | 28,323 | ||||||||||
Total | $ | 58,733 | |||||||||
Rent expense for all operating leases totaled: | |||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Rent expense | $ | 5,103 | $ | 4,008 | $ | 2,930 | |||||
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 in the 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. As of December 31, 2013, the Company estimated future minimum unconditional purchase obligations to be incurred in 2014 to be $1,403. | |||||||||||
Litigation | |||||||||||
The Company is involved in other litigation arising in the ordinary course of its business. 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 results of operations, financial condition, cash flows or business. |
Major_Customers
Major Customers | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Major Customers | ' | |||||||
Major Customers | ' | |||||||
16. Major Customers | ||||||||
One customer accounted for the following percentage of the Company’s fees receivable: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Fidelity | * | 11% | ||||||
*The fees receivable amount for 2013 were less than 10%. | ||||||||
One customer accounted for the following percentage of the Company’s revenues: | ||||||||
December 31, | ||||||||
2013 | 2012 | 2011 | ||||||
Fidelity | 20% | 22% | 31% |
Benefit_Plan
Benefit Plan | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Benefit Plan | ' | ||||||||||
Benefit Plan | ' | ||||||||||
17. Benefit Plan | |||||||||||
The Company sponsors a profit sharing and savings plan under Section 401(k) or the Internal Revenue Code, covering substantially all domestic employees. The Company made voluntary employer matching contributions as follows: | |||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Voluntary employer matching contributions | $ | 891 | $ | 660 | $ | 474 | |||||
Net_Capital_Requirements
Net Capital Requirements | 12 Months Ended |
Dec. 31, 2013 | |
Net Capital Requirements | ' |
Net Capital Requirements | ' |
18. Net Capital Requirements | |
Portfolio Brokerage Services, Inc. (“PBS”) is a broker-dealer subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital (“net capital ratio”), both as defined, shall not exceed 15 to 1. SEC Rule 15c3-1 also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. At December 31, 2013, the Company had net capital of $1,000, which was $900 in excess of its required net capital of $100. At December 31, 2013, the Company’s net capital ratio was .10 to 1. | |
Additionally, PBS is subject to net capital requirements of certain self-regulatory organizations and at December 31, 2013, PBS was in compliance with such requirements. |
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Financial Data (Unaudited) | ' | |||||||||||||
Quarterly Financial Data (Unaudited) | ' | |||||||||||||
19. Quarterly Financial Data (Unaudited) | ||||||||||||||
Quarterly results for the years ended December 31, 2013 and 2012 were as follows: | ||||||||||||||
2013 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Total revenues | $ | 46,625 | $ | 51,632 | $ | 69,880 | $ | 74,398 | ||||||
Income from operations (1) | 588 | 1,757 | 1,737 | 1,430 | ||||||||||
Net income | 541 | 1,118 | 1,306 | 695 | ||||||||||
Net income per share | ||||||||||||||
Basic | 0.02 | 0.03 | 0.04 | 0.02 | ||||||||||
Diluted | 0.02 | 0.03 | 0.04 | 0.01 | ||||||||||
2012 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Total revenues | $ | 32,642 | $ | 37,962 | $ | 42,283 | $ | 44,379 | ||||||
Income (loss) from operations (2) (3) | 1,232 | (1,132 | ) | 920 | 2,022 | |||||||||
Net income (loss) (4) | 740 | (668 | ) | 551 | (158 | ) | ||||||||
Net income (loss) per share | ||||||||||||||
Basic | 0.02 | (0.02 | ) | 0.02 | (0.01 | ) | ||||||||
Diluted | 0.02 | (0.02 | ) | 0.02 | (0.01 | ) | ||||||||
(1) Included in income from operations for the first quarter, second quarter, third quarter and fourth quarter of 2013 is $350, $705, $1,118 and $1,124, respectively, of restructuring and transaction related costs. | ||||||||||||||
(2) During the fourth quarter, the Company recorded a post closing adjustment that resulted in an increase of $305 to income (loss) from operations to adjust the vacation accrual. | ||||||||||||||
(3) Included in income (loss) from operations for the first quarter, second quarter, third quarter and fourth quarter of 2012 is $644, $1,353, $215 and $506, respectively, of restructuring and transaction related costs. | ||||||||||||||
(4) During the fourth quarter, the Company recorded certain post closing adjustments to income taxes including $848 related to additional India income taxes and $392 in additional income taxes primarily to correct deferred tax assets related to net operating loss carryforwards. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Summary of Significant Accounting Policies | ' | ||||
Principles of Consolidation | ' | ||||
Principles of Consolidation—The consolidated financial statements include the accounts of Envestnet and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Accounts denominated in a non-U.S. currency have been re-measured using the U.S. dollar as the functional currency. | |||||
Management Estimates | ' | ||||
Management Estimates—Management of the Company has made certain estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with GAAP. Significant areas requiring the use of management estimates relate to estimating uncollectible receivables, revenue recognition, costs capitalized for internally developed software, valuations and assumptions used for impairment testing of goodwill, intangible and other long-lived assets, fair value of stock and stock options issued, fair value of customer inducement assets and liabilities, fair value of contingent consideration, realization of deferred tax assets, uncertain tax positions and assumptions used to allocate purchase prices in business combinations. Actual results could differ materially from these estimates under different assumptions or conditions. | |||||
Revenue Recognition | ' | ||||
Revenue Recognition—The Company recognizes revenue from services related to asset management and administration, licensing and professional services fees. The Company recognizes revenue when all of the following conditions are satisfied: (i) there is persuasive evidence of an arrangement, (ii) the service or product has been provided to the customer and no uncertainties exist surrounding product acceptances (iii) the amount of fees to be paid by the customer is fixed or determinable; and (iv) the collection of fees is reasonably assured. | |||||
· Asset management and administration fees — The Company derives revenues from fees charged as a percentage of the assets that are managed or administered on its technology platform by financial advisors, financial institutions, and their clients (collectively “customers”) and for services the Company provides to its customers. Such services include investment manager due diligence and research, portfolio diagnostics, proposal generation, investment model management, rebalancing and trading, portfolio performance reporting and monitoring solutions, billing, and back office and middle-office operations and administration. Investment decisions for assets under management or administration are made by our customers. The asset management and administration fees the Company earns are generally based upon a contractual percentage of assets managed or administered on our platform based on preceding quarter-end values. The contractual fee percentages vary based on the level and type of services the Company provides to its customers. Fees related to assets under management or administration increase or decrease based on values of existing customer accounts. The values are affected by inflows or outflows of customer funds and market fluctuations. | |||||
· Licensing and professional services fees— | |||||
Licensing— The Company derives licensing fees from recurring contractual fixed fee contracts with larger financial institutions or enterprise clients. Licensing contracts allow the customer to provide a unique configuration of platform features and investment solutions for their advisors. The licensing fees vary based on the type of services provided and our revenues received under license agreements are recognized over the contractual term. The Company’s license agreements do not generally provide its customers the ability to take possession of the software or host the software on the customers’ own systems or through a hosting arrangement with an unrelated party. | |||||
When the Company enters into arrangements with multiple deliverables, exclusive of arrangements with software deliverables, it applies the FASB’s guidance for revenue arrangements with multiple deliverables and evaluates each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (i) whether the delivered item has value to the customer on a stand-alone basis, and (ii) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Revenue is allocated to each unit of accounting or element based on relative selling prices. The Company determines relative selling prices by using either (i) vendor-specific objective evidence (“VSOE”) if it exists; or (ii) third-party evidence (“TPE”) of selling price. When neither VSOE nor TPE of selling price exists for a deliverable, the Company uses its best estimate of the selling price for that deliverable. | |||||
After determining which deliverables represent a separate unit of accounting, each unit is then accounted for under the applicable revenue recognition guidance. In cases where elements cannot be treated as separate units of accounting, the elements are combined into a single unit of accounting for revenue recognition purposes. If one of the elements that are combined into a single unit of accounting is fees from professional services, including implementation related services or customized service platform software development, the professional service fees are recognized over the course of the expected customer relationship. We have estimated the life of the customer relationship by considering both the historical retention rate of our customers while not exceeding the number of years over which we can accurately forecast future revenues. We currently estimate this term to be five years. | |||||
When the Company enters into arrangements with multiple deliverables involving software, the Company applies the American Institute of Certified Public Accountants’ (“AICPA”) accounting guidance for software. The entire arrangement fee is allocated to each element in the arrangement based on the respective VSOE of fair value of each element. | |||||
Professional services— The Company derives professional service fees from providing contractual customized service platform software development, which are recognized under a proportional performance model utilizing an output-based approach. The Company’s contracts generally have fixed prices, and generally specify or quantify interim deliverables. | |||||
Cash received by the Company in advance of the performance of services is deferred and recognized as revenue when earned. Certain portions of the Company’s revenues require management’s consideration of the nature of the client relationship in determining whether to recognize as revenue the gross amount billed or net amount retained after payments are made to providers for certain services related to the product or service offering. | |||||
The Company uses the following factors to determine whether to record revenue on a gross or net basis: | |||||
· the Company has a direct contract with the third party service provider; | |||||
· the Company has discretion in establishing fees paid by the customer and fees due to the third party service provider; and | |||||
· the Company has credit risk | |||||
When customer fees include charges for third party service providers where the Company has a direct contract with such third party service providers, gross revenue recognized by the Company equals the fee paid by the customer. The cost of revenues recognized by the Company is the amount due to the third party service provider. | |||||
In instances where the Company does not have a direct contract with the third party service provider, the Company cannot exercise discretion in establishing fees paid by the customer and fees due to the third party service provider, and the Company does not have credit risk, the Company records the revenue on a net basis. | |||||
Deferred Revenue | ' | ||||
Deferred Revenue—Deferred revenue primarily consists of implementation and set up fees, professional services, and license fee payments received in advance from customers. | |||||
Cost of Revenues | ' | ||||
Cost of Revenues—Cost of revenues primarily include expenses related to third party investment management and clearing, custody and brokerage services. Generally, these expenses are calculated based upon a contractual percentage of the market value of assets held in customer accounts measured as of the end of each quarter and are recognized ratably throughout the quarter based on the number of days in the quarter. | |||||
Allowance for Doubtful Accounts | ' | ||||
Allowance for Doubtful Accounts—The Company evaluates the need for an allowance for doubtful accounts for potentially uncollectible fees receivable. In establishing the amount of the allowance, if any, customer-specific information is considered related to delinquent accounts, including historical loss experience and current economic conditions. As of December 31, 2013 and 2012, the Company’s allowance for doubtful accounts was $203 and $0, respectively. The following table summarizes the changes to the allowance for doubtful accounts: | |||||
December 31, | |||||
2013 | |||||
Balance, beginning of year | $ | — | |||
Add: Provisions for doubtful accounts | 203 | ||||
Less: Write-offs | — | ||||
Balance, end of year | $ | 203 | |||
Segments | ' | ||||
Segments—The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis. Historically, the Company has determined that it has a single reporting segment and operating unit structure. As a result of the acquisitions as discussed in Note 3, the Company has re-examined its reporting and operating structure and has determined it continues to maintain a single reporting segment and operating unit structure. | |||||
Fair Value of Financial Instruments | ' | ||||
Fair Value of Financial Instruments—The carrying amounts of financial instruments, net of any allowances, including cash equivalents, fees receivable, accounts payable and accrued expenses are considered to be reasonable estimates of their fair values due to their short-term nature. | |||||
Cash and Cash Equivalents | ' | ||||
Cash and Cash Equivalents—The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair value. The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash accounts at financial institutions in excess of amounts insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company monitors such credit risk and has not experienced any losses related to such risk. | |||||
Investments | ' | ||||
Investments— Investments are recorded at cost and reviewed for impairment. Investments are included in “Other non-current assets” on the consolidated balance sheets and consist of non-marketable investments in privately held companies, as well as other alternative investments. The Company reviews these investments on a regular basis to evaluate the carrying amount and economic viability of these investments. This policy includes, but is not limited to, reviewing each of the investee’s cash position, financing needs, earnings/revenue outlook, operational performance, management/ownership changes and competition. The evaluation process is based on information that the Company requests from these investees. This information is not subject to the same disclosure regulations as U.S. publicly traded companies, and as such, the basis for these evaluations is subject to the timing and accuracy of the data received from these investees. | |||||
The Company’s investments are assessed for impairment when a review of the investee’s operations indicates that there is a decline in value of the investment and the decline is other than temporary. Such indicators include, but are not limited to, limited capital resources, limited prospects of receiving additional financing, and prospects for liquidity of the related securities. Impaired investments are written down to estimated fair value. The Company estimates fair value using a variety of valuation methodologies, including comparing the investee with publicly traded companies in similar lines of business, applying valuation multiples to estimated future operating results and estimated discounted future cash flows. There were impairments to investments of $47, $0 and $0 during the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
Property and Equipment | ' | ||||
Property and Equipment—Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of furniture and equipment is computed using the straight-line method based on estimated useful lives of the depreciable assets. Leasehold improvements are amortized on a straight-line basis over their estimated economic useful lives or the remaining lease term, whichever is shorter. Improvements are capitalized, while repairs and maintenance costs are charged to operations as incurred. Assets are reviewed for recoverability whenever events or circumstances indicate the carrying value may not be recoverable. | |||||
Customer Inducements | ' | ||||
Customer Inducements—Payments made to customers as an inducement are capitalized and amortized against revenue on a straight-line basis over the term of the agreement. | |||||
Internally Developed Software | ' | ||||
Internally Developed Software—Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs are expensed as incurred. Internally developed software is amortized on a straight-line basis over its estimated useful life. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no impairments of internally developed software during the years ended December 31, 2013, 2012 and 2011. | |||||
Goodwill and Intangible Assets | ' | ||||
Goodwill and Intangible Assets—Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. Goodwill is reviewed for impairment each year using a two-step process that is performed at least annually or whenever events or circumstances indicate that impairment may have occurred. The Company has concluded that it has a single reporting unit. The first step is a comparison of the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying value, goodwill of the reporting unit is not considered impaired and the second step is unnecessary. If the carrying value of the reporting unit exceeds its fair value, a second test is performed to measure the amount of impairment by comparing the carrying amount of the goodwill to a determination of the implied fair value of the goodwill. If the carrying amount of the goodwill is greater than the implied value, an impairment loss is recognized for the difference. The implied value of the goodwill is determined as of the test date by performing a purchase price allocation, as if the reporting unit had just been acquired, using currently estimated fair values of the individual assets and liabilities of the reporting unit, together with an estimate of the fair value of the reporting unit taken as a whole. The estimate of the fair value of the reporting unit is based upon information available regarding prices of similar groups of assets, or other valuation techniques including present value techniques based upon estimates of future cash flows. No impairment charges have been recorded for the years ended December 31, 2013, 2012 and 2011. | |||||
Intangible assets are recorded at cost less accumulated amortization. Intangible assets are reviewed for impairment whenever events or changes in circumstances may affect the recoverability of the net assets. Such reviews include an analysis of current results and take into consideration the undiscounted value of projected operating cash flows. | |||||
Long-Lived Assets | ' | ||||
Long-Lived Assets—Long-lived assets, such as property, equipment, capitalized internal use software and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. All long-lived assets of the Company are located in the U.S., except for approximately $997 and $764 as of December 31, 2013 and 2012, respectively, which are located in India. | |||||
Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact recoverability of these assets. There were impairments to long-lived assets of $283, $0 and $0 during the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
Leases | ' | ||||
Leases—In certain circumstances, the Company enters into leases with free rent periods, rent escalations or lease incentives over the term of the lease. In such cases, the Company calculates the total payments over the term of the lease and records them ratably as rent expense over that term. | |||||
Income Taxes | ' | ||||
Income Taxes—The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce deferred tax assets to an amount that is more likely than not to be realized. | |||||
The Company follows authoritative guidance related to how uncertain tax positions should be recognized, measured, disclosed and presented in the consolidated financial statements. This requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained “when challenged” or “when examined” by the applicable tax authority. The tax benefits recognized in the consolidated financial statements from tax positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. | |||||
Advertising Costs | ' | ||||
Advertising Costs—The Company expenses all advertising costs as incurred and they are classified within general and administration expenses. Advertising costs totaled approximately $1,028, $1,504 and $1,388 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
Research and Development | ' | ||||
Research and Development—The Company intends to continue to invest in its technology platform and software and service offerings to provide financial advisors with access to investment solutions and services that address the widest range of financial advisors’ front-, middle-and back-office needs. In the years ended December 31, 2013, 2012 and 2011, our technology development expenses totaled $5,998, $6,309, and $4,942, respectively, exclusive of capitalization of internally developed software and related amortization. | |||||
Business Combinations | ' | ||||
Business Combinations—The Company accounts for business combinations under the acquisition method. The cost of an acquired company is assigned to the tangible and intangible assets acquired and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires management to make estimates and use valuation techniques when market values are not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Transaction costs associated with business combinations are expensed as incurred. | |||||
Stock-Based Compensation | ' | ||||
Stock-Based Compensation—Compensation cost relating to stock-based awards made to employees and directors is recognized in the consolidated financial statements using the Black-Scholes option-pricing model in the case of non-qualified stock option awards, and intrinsic value in the case of restricted stock awards. The Company measures the cost of such awards based on the estimated fair value of the award measured at the grant date and recognizes the expense on a straight-line basis over the requisite service period, which is the vesting period. | |||||
Determining the fair value of stock options requires the Company to make several estimates, including the volatility of its stock price, the expected life of the option, forfeiture rate, dividend yield and interest rates. Prior to July 28, 2010, the Company was not a publicly traded company. Accordingly, the Company had limited historical information on the price of its stock as well as employees’ stock option exercise behavior. Because of this limitation, the Company cannot rely on its historical experience alone to develop assumptions for stock-price volatility and the expected life of its options. The Company estimates the expected life of its options using the “Simplified Method.” The Company estimates stock-price volatility with reference to a peer group of publicly traded companies. Determining the companies to include in this peer group involves judgment. The Company utilizes a risk-free interest rate, which is based on the yield of U.S. zero coupon securities with a maturity equal to the expected life of the options. The Company has not and does not expect to pay dividends on its common shares. | |||||
The Company is required to estimate expected forfeitures of stock-based awards at the grant date and recognize compensation cost only for those awards expected to vest. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. Therefore, changes in the forfeiture assumptions may impact the total amount of expense ultimately recognized over the vesting period. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances. | |||||
Reclassifications | ' | ||||
Reclassifications—Certain reclassifications were made to the December 31, 2012 consolidated balance sheet to conform to the 2013 presentation. | |||||
Recent Accounting Pronouncements | ' | ||||
Recent Accounting Pronouncements | |||||
There are no recent accounting pronouncements that have or are expected to have a material effect on our operating results or financial position. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Summary of Significant Accounting Policies | ' | ||||
Schedule of changes to the allowance for doubtful accounts | ' | ||||
December 31, | |||||
2013 | |||||
Balance, beginning of year | $ | — | |||
Add: Provisions for doubtful accounts | 203 | ||||
Less: Write-offs | — | ||||
Balance, end of year | $ | 203 |
Business_Acquisitions_Tables
Business Acquisitions (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
FundQuest | ' | ||||||||
Business acquisitions | ' | ||||||||
Summary of consideration in the acquisition | ' | ||||||||
Cash paid to owners | $ | 24,390 | |||||||
Non-cash consideration: | |||||||||
Favorable contract | 4,897 | ||||||||
Other | 1,241 | ||||||||
Cash acquired | (671 | ) | |||||||
Working capital adjustment | (2,061 | ) | |||||||
$ | 27,796 | ||||||||
Summary of the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition | ' | ||||||||
December 31, 2011 | |||||||||
(as adjusted) | |||||||||
Accounts receivable | $ | 2,603 | |||||||
Prepaid expenses and other current assets | 46 | ||||||||
Property and equipment | 442 | ||||||||
Intangible assets | 11,830 | ||||||||
Goodwill | 19,303 | ||||||||
Accounts payable and accrued liabilities | (1,364 | ) | |||||||
Deferred income taxes | (4,710 | ) | |||||||
Deferred revenue | (354 | ) | |||||||
Total net assets acquired | $ | 27,796 | |||||||
Summary of intangible assets acquired, estimated useful lives and amortization method | ' | ||||||||
Amount | Weighted- | Amortization | |||||||
Average | Method | ||||||||
Useful Life | |||||||||
In Years | |||||||||
Customer list | $ | 11,830 | 7 | Accelerated | |||||
Prima | ' | ||||||||
Business acquisitions | ' | ||||||||
Summary of consideration in the acquisition | ' | ||||||||
Cash paid to owners | $ | 13,750 | |||||||
Cash acquired | (1,767 | ) | |||||||
Cash paid for working capital settlement | 1,942 | ||||||||
$ | 13,925 | ||||||||
Summary of the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition | ' | ||||||||
Accounts receivable | $ | 72 | |||||||
Prepaid expenses and other current assets | 36 | ||||||||
Notes receivable | 860 | ||||||||
Property and equipment | 103 | ||||||||
Deferred income taxes - non current | 1,328 | ||||||||
Intangible assets | 4,940 | ||||||||
Goodwill | 9,283 | ||||||||
Accounts payable and accrued liabilities | (171 | ) | |||||||
Deferred income tax liabilities | (1,796 | ) | |||||||
Deferred revenue | (730 | ) | |||||||
Total net assets acquired | $ | 13,925 | |||||||
Summary of intangible assets acquired, estimated useful lives and amortization method | ' | ||||||||
Amount | Weighted- | Amortization | |||||||
Average | Method | ||||||||
Useful Life | |||||||||
in Years | |||||||||
Customer list | $ | 3,740 | 10 | Accelerated | |||||
Proprietary technology | 700 | 5 | Accelerated | ||||||
Trade names | 500 | 5 | Accelerated | ||||||
Total | $ | 4,940 | |||||||
Tamarac | ' | ||||||||
Business acquisitions | ' | ||||||||
Summary of consideration in the acquisition | ' | ||||||||
Cash paid to owners | $ | 54,000 | |||||||
Non-cash consideration | 101 | ||||||||
Cash acquired | (2,533 | ) | |||||||
Receivable from working capital settlement | (3,141 | ) | |||||||
$ | 48,427 | ||||||||
Summary of the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition | ' | ||||||||
Accounts receivable | $ | 489 | |||||||
Other receivables | 681 | ||||||||
Prepaid expenses and other current assets | 216 | ||||||||
Deferred income tax assets | 7,235 | ||||||||
Property and equipment | 444 | ||||||||
Deposits | 379 | ||||||||
Intangible assets | 16,150 | ||||||||
Goodwill | 35,027 | ||||||||
Accounts payable and accrued liabilities | (2,356 | ) | |||||||
Deferred income tax liabilities | (5,907 | ) | |||||||
Deferred revenue | (3,931 | ) | |||||||
Total net assets acquired | $ | 48,427 | |||||||
Summary of intangible assets acquired, estimated useful lives and amortization method | ' | ||||||||
Amount | Weighted- | Amortization | |||||||
Average | Method | ||||||||
Useful Life | |||||||||
in Years | |||||||||
Customer list | $ | 8,680 | 12 | Accelerated | |||||
Proprietary technology | 5,880 | 8 | Accelerated | ||||||
Trade names | 1,590 | 5 | Accelerated | ||||||
Total | $ | 16,150 | |||||||
WMS | ' | ||||||||
Business acquisitions | ' | ||||||||
Summary of consideration in the acquisition | ' | ||||||||
Cash consideration | $ | 8,992 | |||||||
Contingent consideration | 15,738 | ||||||||
$ | 24,730 | ||||||||
Summary of the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition | ' | ||||||||
Total tangible assets acquired | $ | 1,296 | |||||||
Total liabilities assumed | (2,257 | ) | |||||||
Identifiable intangible assets: | |||||||||
Customer list | 14,000 | ||||||||
Proprietary technology | 3,000 | ||||||||
Goodwill | 8,691 | ||||||||
Total net assets acquired | $ | 24,730 | |||||||
Summary of intangible assets acquired, estimated useful lives and amortization method | ' | ||||||||
Amount | Weighted Average | Amortization | |||||||
Useful Life in Years | Method | ||||||||
Customer list | $ | 14,000 | 12 | Accelerated | |||||
Proprietary technology | 3,000 | 1.5 | Accelerated | ||||||
Total | $ | 17,000 | |||||||
Prima, Tamarac and WMS | ' | ||||||||
Business acquisitions | ' | ||||||||
Schedule of pro forma financial information | ' | ||||||||
At December 31, | |||||||||
2013 | 2012 | ||||||||
Revenues | $ | 274,983 | $ | 223,838 | |||||
Net loss | (9,935 | ) | (25,351 | ) | |||||
Net loss per share: | |||||||||
Basic | (0.30 | ) | (0.79 | ) | |||||
Diluted | (0.30 | ) | (0.79 | ) | |||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property and Equipment | ' | ||||||||||
Schedule of components of property and equipment | ' | ||||||||||
At December 31, | |||||||||||
Estimated Useful Life | 2013 | 2012 | |||||||||
Cost: | |||||||||||
Office furniture and fixtures | 5-7 years | $ | 4,266 | $ | 3,613 | ||||||
Computer equipment and software | 3 years | 26,910 | 22,098 | ||||||||
Other office equipment | 5 years | 598 | 598 | ||||||||
Leasehold improvements | Shorter of the lease term or useful life of the asset | 8,299 | 7,638 | ||||||||
40,073 | 33,947 | ||||||||||
Less accumulated depreciation and amortization | (27,307 | ) | (22,156 | ) | |||||||
Property and equipment, net | $ | 12,766 | $ | 11,791 | |||||||
Schedule of depreciation and amortization expense | ' | ||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Depreciation and amortization expense | $ | 5,151 | $ | 4,685 | $ | 3,862 | |||||
Internally_Developed_Software_
Internally Developed Software (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Internally Developed Software | ' | ||||||||||
Schedule of components of internally developed software | ' | ||||||||||
At December 31, | |||||||||||
Estimated Useful Life | 2013 | 2012 | |||||||||
Internally developed software | 5 years | $ | 16,374 | $ | 13,232 | ||||||
Less accumulated amortization | (10,634 | ) | (8,908 | ) | |||||||
Internally developed software, net | $ | 5,740 | $ | 4,324 | |||||||
Schedule of amortization expense | ' | ||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Amortization expense | $ | 1,726 | $ | 1,550 | $ | 1,579 | |||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||
Schedule of changes in the carrying amount of the Company's goodwill | ' | |||||||||||||||||||||
Balance at December 31, 2011 | $ | 21,334 | ||||||||||||||||||||
Prima acquisition | 9,283 | |||||||||||||||||||||
Tamarac acquisition | 35,027 | |||||||||||||||||||||
Balance at December 31, 2012 | 65,644 | |||||||||||||||||||||
WMS acquisition | 8,691 | |||||||||||||||||||||
Balance at December 31, 2013 | $ | 74,335 | ||||||||||||||||||||
Schedule of components of intangible assets | ' | |||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||
Gross | Net | Gross | Net | |||||||||||||||||||
Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | |||||||||||||||||
Useful Life | Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||
Customer lists | 4 - 12 years | $ | 42,103 | $ | (14,593 | ) | $ | 27,510 | $ | 28,103 | $ | (8,720 | ) | $ | 19,383 | |||||||
Proprietary technologies | 1.5 - 8 years | 9,580 | (2,792 | ) | 6,788 | 6,580 | (657 | ) | 5,923 | |||||||||||||
Trade names | 5 years | 2,090 | (690 | ) | 1,400 | 2,090 | (246 | ) | 1,844 | |||||||||||||
Total intangible assets | $ | 53,773 | $ | (18,075 | ) | $ | 35,698 | $ | 36,773 | $ | (9,623 | ) | $ | 27,150 | ||||||||
Schedule of amortization expense | ' | |||||||||||||||||||||
Year ended December 31, | ||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||
Amortization expense | $ | 8,452 | $ | 6,165 | $ | 935 | ||||||||||||||||
Schedule of Future amortization expense of the intangible assets | ' | |||||||||||||||||||||
Years ending December 31: | ||||||||||||||||||||||
2014 | $ | 9,254 | ||||||||||||||||||||
2015 | 6,354 | |||||||||||||||||||||
2016 | 5,346 | |||||||||||||||||||||
2017 | 4,059 | |||||||||||||||||||||
2018 | 3,370 | |||||||||||||||||||||
Thereafter | 7,315 | |||||||||||||||||||||
$ | 35,698 |
Other_NonCurrent_Assets_Tables
Other Non-Current Assets (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Other Non-Current Assets | ' | |||||||
Schedule of components of other non-current assets | ' | |||||||
At December 31, | ||||||||
2013 | 2012 | |||||||
Investment in private company | $ | 1,250 | $ | 1,250 | ||||
Deposits: | ||||||||
Lease | 1,751 | 1,655 | ||||||
Other | 286 | 264 | ||||||
Other | 1,642 | 366 | ||||||
$ | 4,929 | $ | 3,535 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Fair Value Measurements | ' | ||||
Schedule of the reconciliation of all assets and liabilities of the Company measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | ' | ||||
Fair Value of | |||||
Contingent | |||||
Consideration | |||||
Liability | |||||
Balance at December 31, 2012 | $ | — | |||
Fair value on WMS acquisition date of July 1, 2013 | 15,738 | ||||
Fair value of other liabilities | 279 | ||||
Fair value estimate adjustment for the period July 1, 2013 - December 31, 2013 | 501 | ||||
Imputed interest for the period July 1, 2013 - December 31, 2013 | 787 | ||||
Balance at December 31, 2013 | $ | 17,305 |
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accrued Expenses | ' | |||||||
Schedule of components of accrued expenses | ' | |||||||
At December 31, | ||||||||
2013 | 2012 | |||||||
Accrued investment manager fees | $ | 19,310 | $ | 12,937 | ||||
Accrued compensation and related taxes | 12,125 | 5,726 | ||||||
Accrued professional services | 694 | 408 | ||||||
Accrued restructuring charges | 551 | — | ||||||
Other accrued expenses | 2,562 | 1,523 | ||||||
$ | 35,242 | $ | 20,594 | |||||
Summary of activity in accrued restructuring charges | ' | |||||||
Balance at December 31, 2011 | $ | 290 | ||||||
Restructuring provision incurred | 115 | |||||||
Payments | (405 | ) | ||||||
Balance at December 31, 2012 | — | |||||||
Restructuring charge, net | 474 | |||||||
Lease termination payment accrued | 551 | |||||||
Payments | (474 | ) | ||||||
Balance at December 31, 2013 | $ | 551 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
Summary of income before income tax provision | ' | ||||||||||||
Year ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Domestic | $ | 4,074 | $ | 2,702 | $ | 10,291 | |||||||
Foreign | 1,638 | 366 | 289 | ||||||||||
Total | $ | 5,712 | $ | 3,068 | $ | 10,580 | |||||||
Summary of components of the income tax provision charged to operations | ' | ||||||||||||
Year ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Federal | $ | 3,432 | $ | 1,280 | $ | 261 | |||||||
State | 699 | 235 | 459 | ||||||||||
Foreign | 468 | 946 | 94 | ||||||||||
4,599 | 2,461 | 814 | |||||||||||
Deferred: | |||||||||||||
Federal | $ | (2,059 | ) | (48 | ) | 2,243 | |||||||
State | (492 | ) | 170 | (60 | ) | ||||||||
Foreign | 4 | 20 | (22 | ) | |||||||||
(2,547 | ) | 142 | 2,161 | ||||||||||
Total | $ | 2,052 | $ | 2,603 | $ | 2,975 | |||||||
Schedule of net deferred tax assets (liabilities) | ' | ||||||||||||
At December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Current: | |||||||||||||
Deferred revenue | $ | — | $ | 346 | |||||||||
Prepaid expenses and accruals | 135 | (108 | ) | ||||||||||
Net operating loss and tax credit carryforwards | 2,702 | 2,563 | |||||||||||
Total current deferred tax assets | 2,837 | 2,801 | |||||||||||
Less valuation allowance | (375 | ) | (712 | ) | |||||||||
Net current deferred tax assets | 2,462 | 2,089 | |||||||||||
Non-current: | |||||||||||||
Deferred rent and lease incentives | 2,017 | 2,212 | |||||||||||
Net operating loss and tax credit carryforwards | 14,210 | 13,980 | |||||||||||
Loss on investments | (10 | ) | 2,157 | ||||||||||
Property and equipment and intangible assets | (10,193 | ) | (13,284 | ) | |||||||||
Stock compensation expense | 5,004 | 3,058 | |||||||||||
Other | (284 | ) | 180 | ||||||||||
Total long-term deferred tax assets | 10,744 | 8,303 | |||||||||||
Less valuation allowance | (2,377 | ) | (2,109 | ) | |||||||||
Net long-term deferred tax assets | $ | 8,367 | $ | 6,194 | |||||||||
Summary of expected tax provision | ' | ||||||||||||
Year ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Tax provision, at U.S. federal statutory tax rate | $ | 1,942 | $ | 1,043 | $ | 3,597 | |||||||
State income tax, net of federal tax benefit | 149 | 64 | 449 | ||||||||||
Effect of permanent items | 581 | 414 | 487 | ||||||||||
Change in assertion over permanent reinvestment of foreign earnings | — | — | (234 | ) | |||||||||
Effect of return to provision adjustment | (733 | ) | (81 | ) | (113 | ) | |||||||
Change in valuation allowance | — | (620 | ) | — | |||||||||
Effect of contract settlement | — | — | (1,186 | ) | |||||||||
Effect of change in state income tax rate | — | 691 | — | ||||||||||
Uncertain tax positions | 1,016 | 1,105 | (25 | ) | |||||||||
Foreign income taxes | (328 | ) | (93 | ) | — | ||||||||
State income tax adjustments | (24 | ) | 62 | — | |||||||||
Effect of repatriation of foreign earnings | 582 | — | — | ||||||||||
Research and development credits | (1,246 | ) | — | — | |||||||||
Other | 113 | 18 | — | ||||||||||
Income tax provision | $ | 2,052 | $ | 2,603 | $ | 2,975 | |||||||
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefit | ' | ||||||||||||
Year ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Unrecognized tax benefits balance at beginning of year | $ | 1,097 | $ | 364 | $ | 415 | |||||||
Additions based on tax positions related to the current year | 181 | 517 | 128 | ||||||||||
Additions based on tax positions related to prior years | 1,045 | 474 | 55 | ||||||||||
Reductions for settlements with taxing authorities related to prior years | (56 | ) | — | — | |||||||||
Reductions for lapses of statute of limitations | (209 | ) | (258 | ) | (235 | ) | |||||||
Unrecognized tax benefits balance at end of year | $ | 2,058 | $ | 1,097 | $ | 364 |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Stock-Based Compensation | ' | |||||||||||
Schedule of employee stock-based compensation expense | ' | |||||||||||
Year ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Employee stock-based compensation expense | $ | 8,738 | $ | 4,342 | $ | 3,062 | ||||||
Tax effect on employee stock-based compensation expense | (3,196 | ) | (1,643 | ) | (1,159 | ) | ||||||
Net effect on income | $ | 5,542 | $ | 2,699 | $ | 1,903 | ||||||
Schedule of weighted average assumptions used to value options granted | ' | |||||||||||
Year ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Grant date fair value of options | $ | 6.11 | $ | 4.96 | $ | 5.14 | ||||||
Volatility | 40.4 | % | 39.7 | % | 39.4 | % | ||||||
Risk-free interest rate | 1 | % | 1.2 | % | 2.37 | % | ||||||
Dividend yield | 0 | % | 0 | % | 0 | % | ||||||
Expected term (in years) | 6 | 6 | 6 | |||||||||
Summary of option activity under the Company's plans | ' | |||||||||||
Options | Weighted- | Weighted-Average | Aggregate | |||||||||
Average | Remaining | Intrinsic Value | ||||||||||
Exercise Price | Contractual Life | |||||||||||
(Years) | ||||||||||||
Outstanding as of December 31, 2010 | 4,998,337 | $ | 7.64 | |||||||||
Granted | 486,833 | 12.37 | ||||||||||
Exercised | (447,528 | ) | 6.14 | |||||||||
Forfeited | (173,924 | ) | 9.36 | |||||||||
Outstanding as of December 31, 2011 | 4,863,718 | 8.19 | 6.8 | $ | 18,704 | |||||||
Granted | 738,915 | 12.53 | ||||||||||
Exercised | (298,947 | ) | 6.92 | |||||||||
Forfeited | (26,274 | ) | 11.03 | |||||||||
Outstanding as of December 31, 2012 | 5,277,412 | 8.86 | 6.3 | 26,885 | ||||||||
Granted | 190,413 | 15.34 | ||||||||||
Exercised | (721,050 | ) | 8.86 | |||||||||
Forfeited | (109,304 | ) | 12.33 | |||||||||
Outstanding as of December 31, 2013 | 4,637,471 | 9.04 | 5.4 | 31,877 | ||||||||
Options exercisable | 3,417,153 | 8.08 | 4.6 | 110,111 | ||||||||
Schedule of other information | ' | |||||||||||
Year ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Total intrinsic value of options exercised | $ | 13,745 | $ | 1,611 | $ | 3,082 | ||||||
Cash received from exercises of stock options | 6,400 | 2,069 | 2,747 | |||||||||
Cash received from issuance of restricted stock | 1 | 2,759 | — | |||||||||
Summary of the activity for unvested restricted stock awards granted under the Company's plans | ' | |||||||||||
Weighted- | ||||||||||||
Average Grant | ||||||||||||
Number of | Date Fair Value | |||||||||||
Shares | per Share | |||||||||||
Balance at December 31, 2010 | — | $ | — | |||||||||
Granted | 77,224 | 12.38 | ||||||||||
Vested | — | — | ||||||||||
Forfeited | (3,404 | ) | 12.55 | |||||||||
Balance at December 31, 2011 | 73,820 | 12.37 | ||||||||||
Granted | 714,934 | 12.5 | ||||||||||
Vested | (24,568 | ) | — | |||||||||
Expired/cancelled | (1,064 | ) | 12.45 | |||||||||
Forfeited | (4,132 | ) | 12.49 | |||||||||
Balance at December 31, 2012 | 758,990 | 12.49 | ||||||||||
Granted | 386,245 | 19.54 | ||||||||||
Vested | (74,298 | ) | — | |||||||||
Forfeited | (169,386 | ) | 12.69 | |||||||||
Balance at December 31, 2013 | 901,551 | 16.5 | ||||||||||
Earnings_per_Share_Tables
Earnings per Share (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Earnings per Share | ' | ||||||||||
Schedule of reconciliation of the numerators and denominators used in computing basic and diluted net income per share attributable to common stockholders | ' | ||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Basic income per share calculation: | |||||||||||
Net income | $ | 3,660 | $ | 465 | $ | 7,605 | |||||
Basic number of weighted-average shares outstanding | 33,191,088 | 32,162,672 | 31,643,390 | ||||||||
Basic net income per share | $ | 0.11 | $ | 0.01 | $ | 0.24 | |||||
Diluted income per share calculation: | |||||||||||
Net income | $ | 3,660 | $ | 465 | $ | 7,605 | |||||
Basic number of weighted-average shares outstanding | 33,191,088 | 32,162,672 | 31,643,390 | ||||||||
Effect of dilutive shares: | |||||||||||
Options to purchase common stock | 1,979,474 | 954,056 | 974,192 | ||||||||
Common warrants | 378,282 | 177,257 | 211,495 | ||||||||
Restricted stock | 117,731 | 47,630 | 34,757 | ||||||||
Diluted number of weighted-average shares outstanding | 35,666,575 | 33,341,615 | 32,863,834 | ||||||||
Diluted net income per share | $ | 0.1 | $ | 0.01 | $ | 0.23 | |||||
Schedule of anti-dilutive securities excluded from computation of diluted net income per share | ' | ||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Options to purchase common stock | — | 1,209,748 | 121,000 | ||||||||
Unvested restricted stock | 432,272 | 559,551 | — | ||||||||
Total | 432,272 | 1,769,299 | 121,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Commitments and Contingencies | ' | ||||||||||
Schedule of future annual minimum lease commitments under operating leases | ' | ||||||||||
Years ending December 31: | |||||||||||
2014 | $ | 5,987 | |||||||||
2015 | 5,592 | ||||||||||
2016 | 6,540 | ||||||||||
2017 | 6,125 | ||||||||||
2018 | 6,166 | ||||||||||
Thereafter | 28,323 | ||||||||||
Total | $ | 58,733 | |||||||||
Schedule of rent expense for all operating leases | ' | ||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Rent expense | $ | 5,103 | $ | 4,008 | $ | 2,930 | |||||
Major_Customers_Tables
Major Customers (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Major Customers | ' | |||||||
Summary of fees receivable major customers | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Fidelity | * | 11% | ||||||
*The fees receivable amount for 2013 were less than 10%. | ||||||||
Summary of revenues major customers | ' | |||||||
December 31, | ||||||||
2013 | 2012 | 2011 | ||||||
Fidelity | 20% | 22% | 31% |
Benefit_Plan_Tables
Benefit Plan (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Benefit Plan | ' | ||||||||||
Schedule of voluntary employer matching contributions | ' | ||||||||||
Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Voluntary employer matching contributions | $ | 891 | $ | 660 | $ | 474 | |||||
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly Financial Data (Unaudited) | ' | |||||||||||||
Schedule of quarterly results | ' | |||||||||||||
2013 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Total revenues | $ | 46,625 | $ | 51,632 | $ | 69,880 | $ | 74,398 | ||||||
Income from operations (1) | 588 | 1,757 | 1,737 | 1,430 | ||||||||||
Net income | 541 | 1,118 | 1,306 | 695 | ||||||||||
Net income per share | ||||||||||||||
Basic | 0.02 | 0.03 | 0.04 | 0.02 | ||||||||||
Diluted | 0.02 | 0.03 | 0.04 | 0.01 | ||||||||||
2012 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Total revenues | $ | 32,642 | $ | 37,962 | $ | 42,283 | $ | 44,379 | ||||||
Income (loss) from operations (2) (3) | 1,232 | (1,132 | ) | 920 | 2,022 | |||||||||
Net income (loss) (4) | 740 | (668 | ) | 551 | (158 | ) | ||||||||
Net income (loss) per share | ||||||||||||||
Basic | 0.02 | (0.02 | ) | 0.02 | (0.01 | ) | ||||||||
Diluted | 0.02 | (0.02 | ) | 0.02 | (0.01 | ) | ||||||||
(1) Included in income from operations for the first quarter, second quarter, third quarter and fourth quarter of 2013 is $350, $705, $1,118 and $1,124, respectively, of restructuring and transaction related costs. | ||||||||||||||
(2) During the fourth quarter, the Company recorded a post closing adjustment that resulted in an increase of $305 to income (loss) from operations to adjust the vacation accrual. | ||||||||||||||
(3) Included in income (loss) from operations for the first quarter, second quarter, third quarter and fourth quarter of 2012 is $644, $1,353, $215 and $506, respectively, of restructuring and transaction related costs. | ||||||||||||||
(4) During the fourth quarter, the Company recorded certain post closing adjustments to income taxes including $848 related to additional India income taxes and $392 in additional income taxes primarily to correct deferred tax assets related to net operating loss carryforwards. |
Organization_and_Description_o1
Organization and Description of Business (Details) | 12 Months Ended |
Dec. 31, 2013 | |
state | |
item | |
Organization and Description of Business | ' |
Number of RIAs | 4 |
Number of states with which the broker-dealer is registered | 50 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of Significant Accounting Policies | ' | ' | ' |
Estimated period of customer relationship | '5 years | ' | ' |
Changes in allowance for doubtful accounts | ' | ' | ' |
Balance, beginning of year | $0 | ' | ' |
Add: Provisions for doubtful accounts | 203 | ' | ' |
Balance, end of year | 203 | 0 | ' |
Impairments to investments | 47 | 0 | 0 |
Impairments of internally developed software | 0 | 0 | 0 |
Impairment charges | 0 | 0 | 0 |
Impairments to long-lived assets | 283 | 0 | 0 |
Advertising costs | 1,028 | 1,504 | 1,388 |
Technology development expenses | 5,998 | 6,309 | 4,942 |
India | ' | ' | ' |
Long-Lived Assets | ' | ' | ' |
Long-lived assets | $997 | $764 | ' |
Business_Acquisitions_Details
Business Acquisitions (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 13, 2011 | Feb. 28, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 05, 2012 | 1-May-12 | Jul. 02, 2013 | Dec. 31, 2013 | Jul. 02, 2013 | Jul. 02, 2013 | Jul. 02, 2013 |
FundQuest | FundQuest | FundQuest | FundQuest | FundQuest | Prima | Tamarac | WMS | WMS | WMS | WMS | WMS | ||||
item | Level 3 | Customer lists | Proprietary technology | ||||||||||||
Business acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity of agreement with FundQuest Incorporated | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of up-front annual payment | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contractual term of FundQuest | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant to purchase shares | ' | ' | ' | ' | 1,388,888 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price (in dollars per share) | ' | ' | ' | ' | $10.80 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated fair value of warrant | ' | ' | ' | ' | $2,946 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contractual term of amortized value of assets under management or administration | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Customer inducement amortization | -483 | 1,389 | 332 | ' | ' | 0 | 0 | 4,568 | ' | ' | ' | ' | ' | ' | ' |
Imputed interest expense on contingent consideration | 787 | 3 | 786 | ' | ' | 0 | 0 | 771 | ' | ' | ' | 787 | ' | ' | ' |
Business combination charge arising from customer inducement agreement | ' | ' | ' | 1,183 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consideration transferred in acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash paid to owners | ' | ' | ' | 24,390 | ' | ' | ' | ' | 13,750 | 54,000 | 8,992 | ' | ' | ' | ' |
Favorable contract change in non-cash consideration | ' | ' | ' | 4,897 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other | ' | ' | 4,897 | 1,241 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-cash consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | 101 | ' | ' | ' | ' | ' |
Cash acquired | ' | ' | ' | -671 | ' | ' | ' | ' | -1,767 | -2,533 | ' | ' | ' | ' | ' |
Receivable from working capital settlement | ' | ' | ' | -2,061 | ' | ' | ' | ' | 1,942 | -3,141 | ' | ' | ' | ' | ' |
Total estimated fair value of consideration | ' | ' | ' | 27,796 | ' | ' | ' | ' | 13,925 | 48,427 | ' | ' | ' | ' | ' |
Decrease in goodwill | ' | ' | ' | ' | ' | ' | 889 | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration | 16,017 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,738 | ' | ' | ' | ' |
Contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,026 | 15,738 | ' | ' |
Consideration for acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,730 | ' | ' | ' | ' |
Estimated fair values of the assets acquired and liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts receivable | ' | ' | ' | 2,603 | ' | ' | ' | ' | 72 | 489 | ' | ' | ' | ' | ' |
Other receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | 681 | ' | ' | ' | ' | ' |
Prepaid expenses and other current assets | ' | ' | ' | 46 | ' | ' | ' | ' | 36 | 216 | ' | ' | ' | ' | ' |
Deferred income taxes - non current | ' | ' | ' | ' | ' | ' | ' | ' | 1,328 | 7,235 | ' | ' | ' | ' | ' |
Notes receivable | ' | ' | ' | ' | ' | ' | ' | ' | 860 | ' | ' | ' | ' | ' | ' |
Property and equipment | ' | ' | ' | 442 | ' | ' | ' | ' | 103 | 444 | ' | ' | ' | ' | ' |
Deposits | ' | ' | ' | ' | ' | ' | ' | ' | ' | 379 | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | 11,830 | ' | ' | ' | ' | 4,940 | 16,150 | ' | ' | ' | ' | ' |
Goodwill | 74,335 | 65,644 | 21,334 | 19,303 | ' | ' | ' | ' | 9,283 | 35,027 | 8,691 | ' | ' | ' | ' |
Accounts payable and accrued liabilities | ' | ' | ' | -1,364 | ' | ' | ' | ' | -171 | -2,356 | ' | ' | ' | ' | ' |
Deferred income tax liabilities | ' | ' | ' | -4,710 | ' | ' | ' | ' | -1,796 | -5,907 | ' | ' | ' | ' | ' |
Deferred revenue | ' | ' | ' | -354 | ' | ' | ' | ' | -730 | -3,931 | ' | ' | ' | ' | ' |
Total tangible assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,296 | ' | ' | ' | ' |
Total liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,257 | ' | ' | ' | ' |
Identifiable intangible assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,000 | 3,000 |
Total net assets acquired | ' | ' | ' | 27,796 | ' | ' | ' | ' | 13,925 | 48,427 | 24,730 | ' | ' | ' | ' |
Contingent consideration in cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,000 | ' | ' | ' | ' |
Contingent consideration, undiscounted liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,670 | ' | ' | ' | ' |
Liability discount rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' |
Contingent consideration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' |
Contingent consideration, future undiscounted payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
31-Jul-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,000 | ' | ' | ' |
31-Jul-15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,745 | ' | ' | ' |
31-Jul-16 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,925 | ' | ' | ' |
Estimated fair value adjustment on contingent consideration | $501 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $501 | ' | ' | ' |
Business_Acquisitions_Details_
Business Acquisitions (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 8 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 05, 2012 | Dec. 31, 2012 | Apr. 05, 2012 | Apr. 05, 2012 | Apr. 05, 2012 | 1-May-12 | Dec. 31, 2012 | Dec. 31, 2013 | 1-May-12 | Dec. 31, 2013 | 1-May-12 | 1-May-12 | 1-May-12 | 1-May-12 | Jul. 02, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 02, 2013 | Jul. 02, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 13, 2011 |
Prima | Prima | Prima | Prima | Prima | Tamarac | Tamarac | Tamarac | Tamarac | Tamarac | Tamarac | Tamarac | Tamarac | Tamarac | WMS | WMS | WMS | WMS | WMS | WMS | WMS | FundQuest | FundQuest | FundQuest | FundQuest | ||||||||||||
Customer list | Proprietary technology | Trade names | Minimum | Maximum | Maximum | Customer list | Proprietary technology | Trade names | Customer list | Proprietary technology | Customer list | |||||||||||||||||||||||||
Summary of intangible assets acquired, estimated useful lives and amortization method | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets acquired, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,940 | ' | $3,740 | $700 | $500 | $16,150 | ' | ' | ' | ' | ' | $8,680 | $5,880 | $1,590 | $17,000 | ' | ' | ' | ' | $14,000 | $3,000 | ' | ' | ' | $11,830 |
Intangible assets acquired, Weighted Average Useful Life In Years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | '5 years | '5 years | ' | ' | ' | ' | ' | ' | '12 years | '8 years | '5 years | ' | ' | ' | ' | ' | '12 years | '1 year 6 months | ' | ' | ' | '7 years |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 242,535 | 157,266 | 123,178 | ' | ' | ' | ' | ' | ' | 9,971 | ' | ' | ' | ' | ' | ' | ' | ' | 33,517 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,626 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | 695 | 1,306 | 1,118 | 541 | -158 | 551 | -668 | 740 | 3,660 | 465 | 7,605 | ' | ' | ' | ' | ' | ' | -1,236 | ' | ' | ' | ' | ' | ' | ' | ' | -1,056 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -791 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquired intangible asset amortization | ' | ' | ' | ' | ' | ' | ' | ' | 8,452 | 6,165 | 935 | ' | 1,005 | ' | ' | ' | ' | 1,304 | ' | ' | ' | ' | ' | ' | ' | ' | 2,164 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Imputed interest expense on contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | 787 | 3 | 786 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 787 | ' | ' | ' | ' | ' | 0 | 0 | 771 | ' |
Percentage of the aggregate proceeds of change of control payment required to be applied by senior management | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate proceeds of the Tamarac change of control payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,759 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase registered shares of Envestnet common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 232,150 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of the closing market price of Envestnet common stock on the day before the merger closed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unvested common stock grant (in shares) | 1,296,092 | ' | ' | ' | ' | ' | ' | ' | 1,296,092 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 559,551 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Service period for unvested common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options to acquire Envestnet common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 232,150 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options to acquire Envestnet common stock at an exercise price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $12.51 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition related costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $946 | $2,317 | $405 | ' | ' | ' | ' | ' | ' |
Business_Acquisitions_Details_1
Business Acquisitions (Details 3) (Prima, Tamarac and WMS, USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Prima, Tamarac and WMS | ' | ' |
Pro forma financial information | ' | ' |
Revenues | $274,983 | $223,838 |
Net loss | ($9,935) | ($25,351) |
Net loss per share: | ' | ' |
Basic (in dollars per share) | ($0.30) | ($0.79) |
Diluted (in dollars per share) | ($0.30) | ($0.79) |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Property and equipment, cost: | ' | ' |
Property and equipment, gross | $40,073 | $33,947 |
Less accumulated depreciation and amortization | -27,307 | -22,156 |
Property and equipment, net | 12,766 | 11,791 |
Office furniture and fixtures | ' | ' |
Property and equipment, cost: | ' | ' |
Property and equipment, gross | 4,266 | 3,613 |
Office furniture and fixtures | Minimum | ' | ' |
Property and equipment, cost: | ' | ' |
Estimated Useful Life | '5 years | ' |
Office furniture and fixtures | Maximum | ' | ' |
Property and equipment, cost: | ' | ' |
Estimated Useful Life | '7 years | ' |
Computer equipment and software | ' | ' |
Property and equipment, cost: | ' | ' |
Estimated Useful Life | '3 years | ' |
Property and equipment, gross | 26,910 | 22,098 |
Other office equipment | ' | ' |
Property and equipment, cost: | ' | ' |
Estimated Useful Life | '5 years | ' |
Property and equipment, gross | 598 | 598 |
Leasehold improvements | ' | ' |
Property and equipment, cost: | ' | ' |
Property and equipment, gross | $8,299 | $7,638 |
Property_and_Equipment_Details1
Property and Equipment (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Depreciation and amortization expense for property and equipment | ' | ' | ' |
Depreciation and amortization expense | $5,151 | $4,685 | $3,862 |
Internally_Developed_Software_1
Internally Developed Software (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Internally Developed Software | ' | ' |
Estimated Useful Life | '5 years | ' |
Internally developed software | $16,374 | $13,232 |
Less accumulated amortization | -10,634 | -8,908 |
Internally developed software, net | $5,740 | $4,324 |
Internally_Developed_Software_2
Internally Developed Software (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Internally Developed Software | ' | ' | ' |
Amortization expense | $1,726 | $1,550 | $1,579 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Jul. 02, 2013 | Dec. 31, 2012 | Apr. 05, 2012 | Dec. 31, 2012 | 1-May-12 |
In Thousands, unless otherwise specified | WMS acquisition | WMS acquisition | Prima acquisition | Prima acquisition | Tamarac acquisition | Tamarac acquisition | |||
Changes in the carrying amount of the Company's goodwill | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | $74,335 | $65,644 | $21,334 | ' | $8,691 | ' | $9,283 | ' | $35,027 |
Acquisition | ' | ' | ' | 8,691 | ' | 9,283 | ' | 35,027 | ' |
Balance at the end of the period | $74,335 | $65,644 | $21,334 | ' | $8,691 | ' | $9,283 | ' | $35,027 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components of goodwill and intangible assets | ' | ' | ' |
Gross Carrying Amount | $53,773 | $36,773 | ' |
Accumulated Amortization | -18,075 | -9,623 | ' |
Net Carrying Amount | 35,698 | 27,150 | ' |
Amortization expense for intangible assets | ' | ' | ' |
Amortization expense | 8,452 | 6,165 | 935 |
Future amortization expense of the intangible assets | ' | ' | ' |
2014 | 9,254 | ' | ' |
2015 | 6,354 | ' | ' |
2016 | 5,346 | ' | ' |
2017 | 4,059 | ' | ' |
2018 | 3,370 | ' | ' |
Thereafter | 7,315 | ' | ' |
Total | 35,698 | 27,150 | ' |
Customer lists | ' | ' | ' |
Components of goodwill and intangible assets | ' | ' | ' |
Gross Carrying Amount | 42,103 | 28,103 | ' |
Accumulated Amortization | -14,593 | -8,720 | ' |
Net Carrying Amount | 27,510 | 19,383 | ' |
Customer lists | Minimum | ' | ' | ' |
Components of goodwill and intangible assets | ' | ' | ' |
Useful Life | '4 years | ' | ' |
Customer lists | Maximum | ' | ' | ' |
Components of goodwill and intangible assets | ' | ' | ' |
Useful Life | '12 years | ' | ' |
Proprietary technologies | ' | ' | ' |
Components of goodwill and intangible assets | ' | ' | ' |
Gross Carrying Amount | 9,580 | 6,580 | ' |
Accumulated Amortization | -2,792 | -657 | ' |
Net Carrying Amount | 6,788 | 5,923 | ' |
Proprietary technologies | Minimum | ' | ' | ' |
Components of goodwill and intangible assets | ' | ' | ' |
Useful Life | '1 year 6 months | ' | ' |
Proprietary technologies | Maximum | ' | ' | ' |
Components of goodwill and intangible assets | ' | ' | ' |
Useful Life | '8 years | ' | ' |
Trade names | ' | ' | ' |
Components of goodwill and intangible assets | ' | ' | ' |
Useful Life | '5 years | ' | ' |
Gross Carrying Amount | 2,090 | 2,090 | ' |
Accumulated Amortization | -690 | -246 | ' |
Net Carrying Amount | $1,400 | $1,844 | ' |
Other_NonCurrent_Assets_Detail
Other Non-Current Assets (Details) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Other Non-Current Assets | ' | ' |
Investment in private company, at a historical purchase price | $1,250 | $1,250 |
Deposits: | ' | ' |
Lease | 1,751 | 1,655 |
Other | 286 | 264 |
Other | 1,642 | 366 |
Total other non-current assets | $4,929 | $3,535 |
Number of Preferred A Units owned | 1,250,000 | ' |
Cumulative interest rate (as a percent) | 8.00% | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Level 1, Recurring Basis, Money market funds, USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Level 1 | Recurring Basis | Money market funds | ' | ' |
Fair Value Measurements | ' | ' |
Cash and cash equivalents | $32,358 | $20,682 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in the fair value of Contingent Consideration Liability | ' | ' |
Fair value on WMS acquisition date of July 1, 2013 | $16,017 | ' |
Fair value asset transfers between Levels 1, 2 and 3 | ' | 0 |
Recurring Basis | Level 3 | ' | ' |
Changes in the fair value of Contingent Consideration Liability | ' | ' |
Fair value on WMS acquisition date of July 1, 2013 | 15,738 | ' |
Fair value of other liabilities | 279 | ' |
Fair value estimate adjustment for the period July 1, 2013 - December 31, 2013 | 501 | ' |
Imputed interest for the period July 1, 2013 - December 31, 2013 | 787 | ' |
Balance at the end of the period | $17,305 | ' |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Components of accrued expenses | ' | ' |
Accrued investment manager fees | $19,310 | $12,937 |
Accrued compensation and related taxes | 12,125 | 5,726 |
Accrued professional services | 694 | 408 |
Accrued restructuring charges | 551 | ' |
Other accrued expenses | 2,562 | 1,523 |
Total accrued expenses | $35,242 | $20,594 |
Accrued_Expenses_Details_2
Accrued Expenses (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Activity in accrued restructuring charges | ' | ' | ' |
Balance at the beginning of the period | ' | $290 | ' |
Restructuring provision incurred | 474 | 115 | 434 |
Lease termination payment accrued | 551 | ' | ' |
Payments | -474 | -405 | ' |
Balance at the end of the period | $551 | ' | $290 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of Income before income tax provision | ' | ' | ' |
Domestic | $4,074 | $2,702 | $10,291 |
Foreign | 1,638 | 366 | 289 |
Income before income tax provision | $5,712 | $3,068 | $10,580 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current: | ' | ' | ' |
Federal | $3,432 | $1,280 | $261 |
State | 699 | 235 | 459 |
Foreign | 468 | 946 | 94 |
Current income tax provision | 4,599 | 2,461 | 814 |
Deferred: | ' | ' | ' |
Federal | -2,059 | -48 | 2,243 |
State | -492 | 170 | -60 |
Foreign | 4 | 20 | -22 |
Deferred Total | -2,547 | 142 | 2,161 |
Total | $2,052 | $2,603 | $2,975 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current: | ' | ' |
Deferred revenue | ' | $346 |
Prepaid expenses and accruals | 135 | -108 |
Net operating loss and tax credit carryforwards | 2,702 | 2,563 |
Total current deferred tax assets | 2,837 | 2,801 |
Less valuation allowance - current | -375 | -712 |
Net current deferred tax assets | 2,462 | 2,089 |
Non-current: | ' | ' |
Deferred rent and lease incentives | 2,017 | 2,212 |
Net operating loss and tax credit carryforwards | 14,210 | 13,980 |
Loss on investments | -10 | 2,157 |
Property and equipment and intangible assets | -10,193 | -13,284 |
Stock compensation expense | 5,004 | 3,058 |
Other | -284 | 180 |
Total long-term deferred tax assets | 10,744 | 8,303 |
Less valuation allowance - non-current | -2,377 | -2,109 |
Net long-term deferred tax assets | 8,367 | 6,194 |
Valuation allowance for net deferred tax assets | 2,752 | 2,821 |
Valuation allowance related to capital losses | 2,085 | 2,157 |
Federal and state | ' | ' |
Operating Loss Carryforwards | ' | ' |
Federal and state net operating losses | $667 | $644 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of expected tax provision | ' | ' | ' |
Tax provision, at U.S. federal statutory tax rate | $1,942 | $1,043 | $3,597 |
State income tax, net of federal tax benefit | 149 | 64 | 449 |
Permanent items | 581 | 414 | 487 |
Change in assertion over permanent reinvestment of foreign earnings | ' | ' | -234 |
Return to provision adjustment | -733 | -81 | -113 |
Change in valuation allowance | ' | -620 | ' |
Effect of contract settlement | ' | ' | -1,186 |
Effect of change in rate | ' | 691 | ' |
Uncertain tax positions | 1,016 | 1,105 | -25 |
Foreign income taxes | -328 | -93 | ' |
State income tax adjustments | -24 | 62 | ' |
Effect of repatriation of foreign earnings | 582 | ' | ' |
Research and development credits | -1,246 | ' | ' |
Other | 113 | 18 | ' |
Total | $2,052 | $2,603 | $2,975 |
Income_Taxes_Details_5
Income Taxes (Details 5) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Operating Loss Carryforwards | ' |
NOLs that will not be utilized | $1,938 |
Alternative minimum tax credit carryforwards | 75 |
Federal income tax purposes | ' |
Operating Loss Carryforwards | ' |
NOL carryforwards | 35,837 |
State income tax purposes | ' |
Operating Loss Carryforwards | ' |
NOL carryforwards | $29,174 |
Income_Taxes_Details_6
Income Taxes (Details 6) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | |||
Reconciliation of unrecognized tax benefit | ' | ' | ' |
Unrecognized tax benefits balance at beginning of year | $1,097 | $364 | $415 |
Additions based on tax positions related to the current year | 181 | 517 | 128 |
Additions based on tax positions related to prior years | 1,045 | 474 | 55 |
Reductions for settlements with taxing authorities related to prior years | -56 | ' | ' |
Reductions for lapses of statute of limitations | -209 | -258 | -235 |
Unrecognized tax benefits balance at end of year | 2,058 | 1,097 | 364 |
Unrecognized tax benefits that would impact effective tax rate, if recognized | 1,794 | ' | ' |
Reasonably possible decrease in liability for unrecognized tax benefits in the next twelve months | 292 | ' | ' |
Number of states where the entity filed voluntary disclosure agreements | 6 | ' | ' |
Timeframe in which the voluntary disclosure agreements are expected to be settle | '12 months | ' | ' |
Potential interest and penalties related to unrecognized tax benefits included in income tax expense | 33 | 448 | 14 |
Accrued interest and penalties on unrecognized tax benefits | $636 | $642 | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | Feb. 28, 2010 | Jun. 24, 2013 |
FundQuest | Third party | |
Stockholders' Equity | ' | ' |
Percentage of initial public offering price per share | 120.00% | ' |
Warrant to purchase shares | 1,388,888 | ' |
Exercise price (in dollars per share) | $10.80 | ' |
Shares issued to third party on cashless exercise of warrant | ' | 761,902 |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Oct. 11, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | 1-May-12 | Dec. 31, 2013 | 1-May-12 | 1-May-12 |
Tamarac | Tamarac | Tamarac | Tamarac | |||||
Minimum | Maximum | |||||||
Stockholders' equity | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate proceeds from change of control required to be applied (as a percent) | ' | ' | ' | ' | ' | ' | 50.00% | 100.00% |
Aggregate proceeds of the Tamarac change of control payment | ' | ' | ' | ' | $2,759 | ' | ' | ' |
Purchase registered shares of Envestnet common stock | ' | ' | ' | ' | 232,150 | ' | ' | ' |
Percentage of the closing market price of Envestnet common stock on the day before the merger closed | ' | ' | ' | ' | 95.00% | ' | ' | ' |
Lock in period | ' | ' | ' | ' | '2 years | ' | ' | ' |
Percentage of the closing market price on the day before the merger closed for calculation of termination payment | ' | ' | ' | ' | ' | 5.00% | ' | ' |
Reversal of net operating loss tax benefit | ' | 690 | ' | 690 | ' | ' | ' | ' |
Shares sold under public offering including overallotment option exercised by the underwriters | 5,801,997 | ' | ' | ' | ' | ' | ' | ' |
Public offering price (in dollars per share) | $29.25 | ' | ' | ' | ' | ' | ' | ' |
Public offering costs incurred | ' | ' | $1,089 | ' | ' | ' | ' | ' |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2004 | Jun. 22, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Stock options for employees, consultants, and non-employee directors | Stock options for employees, consultants, and non-employee directors | Stock options for employees, consultants, and non-employee directors | Stock options for employees, consultants, and non-employee directors | 2004 Plan | 2010 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | ||||
Certain Tamarac employees | Restricted Stock | Restricted Stock | Restricted Stock | ||||||||||
Target Incentive Awards, performance conditions and subsequent service-based vesting | Target Incentive Awards, performance conditions and subsequent service-based vesting | Target Incentive Awards, performance conditions and subsequent service-based vesting | |||||||||||
Minimum | Maximum | ||||||||||||
Stock-Based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based awards, contractual term | ' | ' | ' | ' | ' | ' | ' | '10 years | '10 years | ' | ' | ' | ' |
Maximum number of shares of common stock that may be delivered under the 2010 Plan, excluding additional shares relating to the 2004 Plan | ' | ' | ' | ' | ' | ' | ' | ' | 2,700,000 | ' | ' | ' | ' |
Shares available for future issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,023,851 | 559,551 | ' | ' |
Unvested restricted stock, service condition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' |
Unrecognized compensation expense related to unvested stock options and restricted stock, weighted-average recognition period | ' | ' | ' | '10 months 24 days | ' | ' | ' | ' | ' | ' | ' | '3 years | '5 years |
Stock options to acquire Envestnet common stock | ' | ' | ' | 190,413 | 738,915 | 486,833 | 232,150 | ' | ' | ' | ' | ' | ' |
Stock options to acquire Envestnet common stock at an exercise price (in dollars per share) | ' | ' | ' | $15.34 | $12.53 | $12.37 | $12.51 | ' | ' | ' | ' | ' | ' |
Maximum number of stock options and restricted stock available for future issuance | 1,296,092 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary of employee stock-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee stock-based compensation expense | $8,738 | $4,342 | $3,062 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax effect on employee stock-based compensation expense | -3,196 | -1,643 | -1,159 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net effect on income | $5,542 | $2,699 | $1,903 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Summary of weighted average assumptions used to value options granted | ' | ' | ' |
Grant date fair value of options (in dollars per share) | $6.11 | $4.96 | $5.14 |
Volatility (as a percent) | 40.40% | 39.70% | 39.40% |
Risk-free interest rate (as a percent) | 1.00% | 1.20% | 2.37% |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Expected term | '6 years | '6 years | '6 years |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 3) (Stock options for employees, consultants, and non-employee directors, USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Options | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | 5,277,412 | 4,863,718 | 4,998,337 |
Granted (in shares) | 190,413 | 738,915 | 486,833 |
Exercised (in shares) | -721,050 | -298,947 | -447,528 |
Forfeited (in shares) | -109,304 | -26,274 | -173,924 |
Outstanding at the end of the period (in shares) | 4,637,471 | 5,277,412 | 4,863,718 |
Options exercisable (in shares) | 3,417,153 | ' | ' |
Weighted-Average Exercise Price | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $8.86 | $8.19 | $7.64 |
Granted (in dollars per share) | $15.34 | $12.53 | $12.37 |
Exercised (in dollars per share) | $8.86 | $6.92 | $6.14 |
Forfeited (in dollars per share) | $12.33 | $11.03 | $9.36 |
Outstanding at the end of the period (in dollars per share) | $9.04 | $8.86 | $8.19 |
Options exercisable (in dollars per share) | $8.08 | ' | ' |
Weighted-Average Remaining Contractual Life | ' | ' | ' |
Outstanding | '5 years 4 months 24 days | '6 years 3 months 18 days | '6 years 9 months 18 days |
Options exercisable | '4 years 7 months 6 days | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' |
Outstanding (in dollars) | $31,877 | $26,885 | $18,704 |
Options exercisable (in dollars) | $110,111 | ' | ' |
Additional disclosures | ' | ' | ' |
Aggregate difference between fair value of the Company's common stock (in dollars per share) | $40.30 | $13.95 | $11.96 |
Minimum | ' | ' | ' |
Additional disclosures | ' | ' | ' |
Exercise prices of stock options outstanding (in dollars per share) | $0.11 | ' | ' |
Maximum | ' | ' | ' |
Additional disclosures | ' | ' | ' |
Exercise prices of stock options outstanding (in dollars per share) | $15.34 | ' | ' |
StockBased_Compensation_Detail3
Stock-Based Compensation (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of exercise prices of stock options outstanding | ' | ' | ' |
Total intrinsic value of options exercised | $13,745 | $1,611 | $3,082 |
Cash received from exercises of stock options | 6,400 | 2,069 | 2,747 |
Cash received from issuance of restricted stock | $1 | $2,759 | ' |
StockBased_Compensation_Detail4
Stock-Based Compensation (Details 5) (Restricted Stock, USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Number of Shares | ' | ' | ' |
Balance at the beginning of the period (in shares) | 758,990 | 73,820 | ' |
Granted (in shares) | 386,245 | 714,934 | 77,224 |
Vested (in shares) | -74,298 | -24,568 | ' |
Expired/cancelled (in shares) | ' | -1,064 | ' |
Forfeited (in shares) | -169,386 | -4,132 | -3,404 |
Balance at the end of the period (in shares) | 901,551 | 758,990 | 73,820 |
Weighted-Average Grant Date Fair Value per Share | ' | ' | ' |
Balance at the beginning of the period (in dollars per share) | $12.49 | $12.37 | ' |
Granted (in dollars per share) | $19.54 | $12.50 | $12.38 |
Expired/cancelled (in dollars per share) | ' | $12.45 | ' |
Forfeited (in dollars per share) | $12.69 | $12.49 | $12.55 |
Balance at the end of the period (in dollars per share) | $16.50 | $12.49 | $12.37 |
2010 Plan | ' | ' | ' |
Stock-Based compensation | ' | ' | ' |
Award vesting rights proportion (as a percent) | 33.00% | ' | ' |
Number of vesting rights anniversaries | 3 | ' | ' |
StockBased_Compensation_Detail5
Stock-Based Compensation (Details 6) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 11, 2013 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Employee Stock Option | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Restricted stock with performance and subsequent service conditions | Restricted stock with performance and subsequent service conditions | Restricted stock with performance and subsequent service conditions | |
2012 Plan modification | Service-based vesting | First year performance condition achieved | Minimum | Maximum | ||||||
Stock-Based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation expense related to unvested stock options | $2,724 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation expense related to unvested stock options and restricted stock, weighted-average recognition period | '10 months 24 days | ' | ' | ' | ' | '1 year 9 months 18 days | ' | ' | '1 year 3 months 18 days | '3 years 3 months 18 days |
Unrecognized compensation expense related to unvested restricted | ' | ' | ' | ' | ' | $3,694 | ' | $5,448 | ' | ' |
Unvested restricted stock, service condition | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' |
Vested (in shares) | ' | ' | ' | ' | ' | ' | 181,625 | ' | ' | ' |
Number of performance awards valued due to modification (in shares) | ' | 901,551 | 758,990 | 73,820 | 113,249 | ' | ' | ' | ' | ' |
Awards voluntarily forfeited (in shares) | ' | 169,386 | 4,132 | 3,404 | 103,521 | ' | ' | ' | ' | ' |
Earnings_per_Share_Details
Earnings per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Basic income per share calculation: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $695 | $1,306 | $1,118 | $541 | ($158) | $551 | ($668) | $740 | $3,660 | $465 | $7,605 |
Basic number of weighted-average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 33,191,088 | 32,162,672 | 31,643,390 |
Basic net income per share (in dollars per share) | $0.02 | $0.04 | $0.03 | $0.02 | ($0.01) | $0.02 | ($0.02) | $0.02 | $0.11 | $0.01 | $0.24 |
Diluted income per share calculation: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | $3,660 | $465 | $7,605 |
Basic number of weighted-average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 33,191,088 | 32,162,672 | 31,643,390 |
Effect of dilutive shares: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options to purchase common stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 1,979,474 | 954,056 | 974,192 |
Common warrants (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 378,282 | 177,257 | 211,495 |
Restricted stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 117,731 | 47,630 | 34,757 |
Diluted number of weighted-average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 35,666,575 | 33,341,615 | 32,863,834 |
Diluted net income per share (in dollars per share) | $0.01 | $0.04 | $0.03 | $0.02 | ($0.01) | $0.02 | ($0.02) | $0.02 | $0.10 | $0.01 | $0.23 |
Earnings_per_Share_Details_2
Earnings per Share (Details 2) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Common share equivalents for securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share | ' | ' | ' |
Anti-dilutive securities excluded from computation of diluted earnings per share (in shares) | 432,272 | 1,769,299 | 121,000 |
Stock options for employees, consultants, and non-employee directors | ' | ' | ' |
Common share equivalents for securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share | ' | ' | ' |
Anti-dilutive securities excluded from computation of diluted earnings per share (in shares) | ' | 1,209,748 | 121,000 |
Unvested restricted stock | ' | ' | ' |
Common share equivalents for securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share | ' | ' | ' |
Anti-dilutive securities excluded from computation of diluted earnings per share (in shares) | 432,272 | 559,551 | ' |
Insurance_Recovery_Details
Insurance Recovery (Details) (USD $) | 0 Months Ended |
In Thousands, unless otherwise specified | Apr. 26, 2011 |
Insurance Recovery | ' |
Insurance carrier reimbursement for defense fees and expenses | $1,100 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2013 |
Lease termination | ' | ' |
Total termination fees | $1,142 | ' |
Termination fee paid | 551 | ' |
Restructuring charges net of deferred rent related to lease termination fees | ' | 474 |
Future annual minimum lease commitments under operating leases | ' | ' |
2014 | ' | 5,987 |
2015 | ' | 5,592 |
2016 | ' | 6,540 |
2017 | ' | 6,125 |
2018 | ' | 6,166 |
Thereafter | ' | 28,323 |
Total | ' | $58,733 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Rent expense for all operating leases | ' | ' | ' |
Rent expense | $5,103 | $4,008 | $2,930 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 3) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
item | |
Commitments and Contingencies | ' |
Number of previous claims experienced | 0 |
Future minimum unconditional purchase obligations to be incurred in 2014 | $1,403 |
Major_Customers_Details
Major Customers (Details) (Fidelity) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Customer | |||
Fees receivable | Credit concentration risk | ' | ' | ' |
Major Customers | ' | ' | ' |
Number of customers accounted for as major customer | 1 | ' | ' |
Major customer as a percentage of the company's total | ' | 11.00% | ' |
Revenues | Customer concentration risk | ' | ' | ' |
Major Customers | ' | ' | ' |
Number of customers accounted for as major customer | 1 | ' | ' |
Major customer as a percentage of the company's total | 20.00% | 22.00% | 31.00% |
Benefit_Plan_Details
Benefit Plan (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Benefit Plan | ' | ' | ' |
Voluntary employer matching contributions | $891 | $660 | $474 |
Net_Capital_Requirements_Detai
Net Capital Requirements (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Net Capital Requirements | ' |
SEC rule, maximum net capital ratio | 15 |
SEC rule, restrictions on equity and dividends, maximum net capital ratio | 10 |
Net capital of the company (in dollars) | $1,000 |
Excess of net capital (in dollars) | 900 |
Required net capital (in dollars) | $100 |
Company's net capital ratio | 0.1 |
Quarterly_Financial_Data_Unaud2
Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Data (Unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total revenues | $74,398 | $69,880 | $51,632 | $46,625 | $44,379 | $42,283 | $37,962 | $32,642 | ' | ' | ' |
Income (loss) from operations | 1,430 | 1,737 | 1,757 | 588 | 2,022 | 920 | -1,132 | 1,232 | 5,512 | 3,042 | 11,376 |
Net income (loss) | $695 | $1,306 | $1,118 | $541 | ($158) | $551 | ($668) | $740 | $3,660 | $465 | $7,605 |
Net income (loss) per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in dollars per share) | $0.02 | $0.04 | $0.03 | $0.02 | ($0.01) | $0.02 | ($0.02) | $0.02 | $0.11 | $0.01 | $0.24 |
Diluted (in dollars per share) | $0.01 | $0.04 | $0.03 | $0.02 | ($0.01) | $0.02 | ($0.02) | $0.02 | $0.10 | $0.01 | $0.23 |
Quarterly_Financial_Data_Unaud3
Quarterly Financial Data (Unaudited) (Details 2) (USD $) | 3 Months Ended | |||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 |
Quarterly Financial Data (Unaudited) | ' | ' | ' | ' | ' | ' | ' | ' |
Restructuring and transaction related costs | $1,124 | $1,118 | $705 | $350 | $506 | $215 | $1,353 | $644 |
Post closing adjustments to income taxes related to additional India income taxes | ' | ' | ' | ' | 305 | ' | ' | ' |
Post closing adjustments to income taxes related to additional India income taxes | ' | ' | ' | ' | 848 | ' | ' | ' |
Additional income taxes to correct deferred tax assets related to net operating loss carryforwards | ' | ' | ' | ' | $392 | ' | ' | ' |