Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 17, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | ENVESTNET, INC. | ||
Entity Central Index Key | 1,337,619 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
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 | Large Accelerated Filer | ||
Entity Public Float | $ 639,721,181 | ||
Entity Common Stock, Shares Outstanding | 43,433,388 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 52,592 | $ 51,718 |
Fees and other receivables, net | 44,268 | 46,756 |
Prepaid expenses and other current assets | 16,224 | 13,239 |
Total current assets | 113,084 | 111,713 |
Property and equipment, net | 33,000 | 28,681 |
Internally developed software, net | 14,860 | 9,897 |
Intangible assets, net | 265,558 | 292,675 |
Goodwill | 431,936 | 421,273 |
Deferred tax assets, net | 2,688 | |
Other non-current assets | 13,963 | 9,322 |
Total assets | 872,401 | 876,249 |
Current liabilities: | ||
Accrued expenses and other liabilities | 87,763 | 83,411 |
Accounts payable | 11,480 | 10,420 |
Current portion of debt | 37,926 | 6,064 |
Contingent consideration | 2,286 | 2,537 |
Deferred revenue | 16,499 | 15,089 |
Total current liabilities | 155,954 | 117,521 |
Convertible Notes | 152,575 | 146,418 |
Term Notes | 100,409 | 138,335 |
Contingent consideration | 2,582 | 1,506 |
Deferred revenue | 15,643 | 14,378 |
Deferred rent and lease incentive | 12,060 | 10,976 |
Deferred tax liabilities, net | 5,555 | |
Other non-current liabilities | 13,436 | 6,288 |
Total liabilities | 458,214 | 435,422 |
Commitments and contingencies | ||
Redeemable units in ERS | 900 | 900 |
Stockholders' equity: | ||
Preferred stock, par value $0.005, 50,000,000 shares authorized | ||
Common stock, par value $0.005, 500,000,000 shares authorized; 55,642,686 and 53,925,415 shares issued as of December 31, 2016 and December 31, 2015, respectively; 43,240,567 and 41,979,126 shares outstanding as of December 31, 2016 and December 31, 2015, respectively | 278 | 270 |
Additional paid-in capital | 516,675 | 474,726 |
Accumulated deficit | (70,574) | (15,007) |
Treasury stock at cost, 12,402,119 and 11,946,289 shares as of December 31, 2016 and December 31, 2015, respectively | (33,068) | (20,654) |
Accumulated other comprehensive income (loss) | (422) | 194 |
Total stockholders' equity | 412,889 | 439,529 |
Non-controlling interest | 398 | 398 |
Total equity | 413,287 | 439,927 |
Total liabilities and equity | $ 872,401 | $ 876,249 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 55,642,686 | 53,925,415 |
Common stock, shares outstanding | 43,240,567 | 41,979,126 |
Treasury stock, shares | 12,402,119 | 11,946,289 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Assets under management or administration | $ 352,498 | $ 333,684 | $ 294,223 |
Subscription and licensing | 198,125 | 75,280 | 48,787 |
Professional services and other | 27,541 | 11,955 | 5,738 |
Total revenues | 578,164 | 420,919 | 348,748 |
Operating expenses: | |||
Cost of revenues | 180,590 | 161,309 | 150,067 |
Compensation and benefits | 241,584 | 139,756 | 104,457 |
General and administration | 115,435 | 72,900 | 54,321 |
Depreciation and amortization | 63,999 | 27,962 | 18,651 |
Total operating expenses | 601,608 | 401,927 | 327,496 |
Income (loss) from operations | (23,444) | 18,992 | 21,252 |
Other income: | |||
Interest income | 37 | 338 | 139 |
Interest expense | (16,600) | (10,271) | (626) |
Other income (expense), net | (483) | (71) | 1,742 |
Total other income (expense) | (17,046) | (10,004) | 1,255 |
Income (loss) before income tax provision | (40,490) | 8,988 | 22,507 |
Income tax provision | 15,077 | 4,552 | 8,528 |
Net income (loss) | (55,567) | 4,436 | 13,979 |
Add: Net loss attributable to non-controlling interest | 195 | ||
Net income (loss) attributable to Envestnet, Inc. | $ (55,567) | $ 4,436 | $ 14,174 |
Net income (loss) per share attributable to Envestnet, Inc.: | |||
Basic (in dollars per share) | $ (1.30) | $ 0.12 | $ 0.41 |
Diluted (in dollars per share) | $ (1.30) | $ 0.12 | $ 0.38 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 42,814,222 | 36,500,843 | 34,559,558 |
Diluted (in shares) | 42,814,222 | 38,386,873 | 36,877,599 |
Consolidated Statements of Othe
Consolidated Statements of Other Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements of Other Comprehensive Income (Loss) | |||
Net income (loss) attributable to Envestnet, Inc. | $ (55,567) | $ 4,436 | $ 14,174 |
Other comprehensive income (loss), net of taxes | |||
Foreign currency translation loss | (412) | (2) | |
Gain (loss) on foreign currency contracts designated as cash flow hedges reclassified to earnings | (204) | 196 | |
Total other comprehensive income (loss), net of taxes | (616) | 194 | |
Comprehensive income (loss), net of taxes | $ (56,183) | $ 4,630 | $ 14,174 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Non-controlling Interest | Total |
Balance at Dec. 31, 2013 | $ 228 | $ (11,180) | $ 192,341 | $ (33,617) | $ 147,772 | ||
Balance (in shares) at Dec. 31, 2013 | 45,628,814 | (11,752,794) | |||||
Increase (decrease) in shareholders' equity | |||||||
Exercise of stock options | $ 3 | 5,187 | 5,190 | ||||
Exercise of stock options (in shares) | 573,298 | ||||||
Issuance of common stock - vesting of restricted stock units | $ 1 | 1 | |||||
Issuance of common stock units - vesting of restricted stock (in shares) | 143,264 | ||||||
Stock-based compensation expense | 11,228 | $ 195 | 11,423 | ||||
Excess tax benefit from stock-based compensation expense | 8,848 | 8,848 | |||||
Purchase of treasury stock for stock-based minimum tax withholdings | $ (2,062) | (2,062) | |||||
Purchase of treasury stock for stock-based minimum tax withholdings (in shares) | (47,929) | ||||||
Issuance of membership interest in ERS | 556 | 556 | |||||
Issuance of convertible notes, net of tax and offering costs | 16,284 | 16,284 | |||||
Net income (loss) | 14,174 | (195) | 13,979 | ||||
Balance at Dec. 31, 2014 | $ 232 | $ (13,242) | 233,888 | (19,443) | 556 | 201,991 | |
Balance (in shares) at Dec. 31, 2014 | 46,345,376 | (11,800,723) | |||||
Increase (decrease) in shareholders' equity | |||||||
Exercise of stock options | $ 5 | 8,274 | 8,279 | ||||
Exercise of stock options (in shares) | 1,047,911 | ||||||
Issuance of common stock - vesting of restricted stock units | $ 2 | 2 | |||||
Issuance of common stock units - vesting of restricted stock (in shares) | 434,292 | ||||||
Acquisition of businesses | $ 31 | 195,420 | 195,451 | ||||
Acquisition of businesses (in shares) | 6,097,836 | ||||||
Acquisition of business - attribution of the fair market value of replacement award | 4,318 | 4,318 | |||||
Stock-based compensation expense | 15,161 | 15,161 | |||||
Excess tax benefit from stock-based compensation expense | 17,607 | 17,607 | |||||
Purchase of treasury stock for stock-based minimum tax withholdings | $ (7,412) | (7,412) | |||||
Purchase of treasury stock for stock-based minimum tax withholdings (in shares) | (145,566) | ||||||
Purchase of ERS units | 58 | (158) | (100) | ||||
Foreign currency translation loss | $ (2) | (2) | |||||
Unrealized gain/ losses on foreign currency contracts designated as hedges | 196 | 196 | |||||
Net income (loss) | 4,436 | 4,436 | |||||
Balance at Dec. 31, 2015 | $ 270 | $ (20,654) | 474,726 | 194 | (15,007) | 398 | 439,927 |
Balance (in shares) at Dec. 31, 2015 | 53,925,415 | (11,946,289) | |||||
Increase (decrease) in shareholders' equity | |||||||
Exercise of stock options | $ 2 | 4,922 | 4,924 | ||||
Exercise of stock options (in shares) | 598,382 | ||||||
Issuance of common stock - vesting of restricted stock units | $ 6 | 6 | |||||
Issuance of common stock units - vesting of restricted stock (in shares) | 1,118,889 | ||||||
Stock-based compensation expense | 32,572 | 32,572 | |||||
Excess tax benefit from stock-based compensation expense | 4,455 | 4,455 | |||||
Purchase of treasury stock for stock-based minimum tax withholdings | $ (10,966) | (10,966) | |||||
Purchase of treasury stock for stock-based minimum tax withholdings (in shares) | (412,220) | ||||||
Common stock shares repurchased | $ (1,448) | $ (1,448) | |||||
Common stock shares repurchased (in shares) | (43,610) | (43,610) | |||||
Foreign currency translation loss | (412) | $ (412) | |||||
Unrealized gain/ losses on foreign currency contracts designated as hedges | (204) | (204) | |||||
Net income (loss) | (55,567) | (55,567) | |||||
Balance at Dec. 31, 2016 | $ 278 | $ (33,068) | $ 516,675 | $ (422) | $ (70,574) | $ 398 | $ 413,287 |
Balance (in shares) at Dec. 31, 2016 | 55,642,686 | (12,402,119) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
OPERATING ACTIVITIES: | |||
Net income (loss) | $ (55,567) | $ 4,436 | $ 13,979 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 63,999 | 27,962 | 18,651 |
Deferred rent and lease incentive | (438) | 1,819 | 275 |
Provision for doubtful accounts | 1,122 | 176 | 15 |
Deferred income taxes | 5,584 | (10,508) | (4,640) |
Stock-based compensation expense | 33,276 | 15,161 | 11,423 |
Excess tax benefits from stock-based compensation expense | (4,455) | (17,607) | (8,848) |
Non-cash interest expense | 8,244 | 10,271 | 626 |
Accretion on contingent consideration | 150 | 888 | 1,472 |
Fair market value adjustment on contingent consideration | 1,588 | (4,153) | (1,432) |
Loss allocation from equity method investment | 1,420 | ||
Impairment of equity method investment | 734 | ||
Loss on disposal of fixed assets | 398 | ||
Changes in operating assets and liabilities, net of acquisitions: | |||
Fees and other receivables | 1,646 | (9,297) | 1,788 |
Prepaid expenses and other current assets | (3,290) | 14,716 | 9,733 |
Other non-current assets | (98) | (6,025) | (873) |
Accrued expenses and other liabilities | 17,174 | (13,653) | 9,784 |
Accounts payable | (462) | 3,128 | (659) |
Deferred revenue | 2,014 | 10,906 | 4,677 |
Other non-current liabilities | 3,776 | (3,792) | 26 |
Net cash provided by operating activities | 76,815 | 24,428 | 55,997 |
INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (13,967) | (9,184) | (6,177) |
Capitalization of internally developed software | (8,609) | (5,532) | (3,382) |
Investment in private companies | (2,238) | (1,500) | |
Purchase of ERS units | (1,500) | (100) | |
Acquisition of businesses, net of cash acquired | (31,613) | (328,305) | (59,570) |
Net cash used in investing activities | (57,927) | (344,621) | (69,129) |
FINANCING ACTIVITIES: | |||
Proceeds from issuance of Convertible Notes | 172,500 | ||
Convertible Notes issuance costs | (5,533) | ||
Proceeds from issuance of Term Notes | 160,000 | ||
Payment of Term Notes | (8,000) | (10,000) | |
Proceeds from borrowings on revolving credit facility | 40,000 | 10,000 | 30,000 |
Payment on revolving credit facility | (40,000) | (10,000) | (30,000) |
Payments of contingent consideration | (3,729) | (7,219) | (6,000) |
Payments of purchase consideration liabilities | (3,256) | ||
Payment of promissory note | (1,500) | ||
Issuance of redeemable units in ERS | 900 | 1,500 | |
Proceeds from exercise of stock options | 4,924 | 8,279 | 5,190 |
Excess tax benefits from stock-based compensation expense | 4,455 | 17,607 | 8,848 |
Purchase of treasury stock for stock-based minimum tax withholdings | (10,966) | (7,412) | (2,062) |
Common stock acquired under the share repurchase program | (1,448) | ||
Issuance of restricted stock units | 6 | 2 | 1 |
Net cash provided by (used in) financing activities | (18,014) | 162,157 | 172,944 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 874 | (158,036) | 159,812 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 51,718 | 209,754 | 49,942 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 52,592 | 51,718 | 209,754 |
Supplemental disclosure of cash flow information - net cash paid during the period for income taxes | 1,114 | 1,700 | 2,131 |
Supplemental disclosure of cash flow information - cash paid during the period for interest | 8,356 | 3,877 | 299 |
Supplemental disclosure of non-cash operating, investing and financing activities: | |||
Common stock issued in business acquisitions | 195,451 | ||
Attribution of the fair market value of replacement awards | 4,318 | ||
Purchase consideration liabilities included in accrued expenses and other liabilities and other non-current liabilities | 996 | 13,676 | |
Contingent consideration issued in business acquisitions | 4,868 | 1,500 | 2,800 |
Issuance of promissory note for acquisition | 1,500 | ||
Leasehold improvements funded by lease incentive | 1,522 | $ 330 | 2,865 |
Purchase of fixed assets included in accrued expenses and other liabilities and accounts payable | $ 1,136 | $ 158 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization and Description of Business | |
Organization and Description of Business | 1. Organization and Description of Busines Envestnet, Inc. (“Envestnet”) and its subsidiaries (collectively, the “Company”) provide intelligent systems for wealth management and financial wellness. Envestnet’s unified technology enhances advisor productivity and strengthens the wealth management process, delivering unparalleled flexibility, accuracy, performance, and value. Envestnet enables a transparent, independent, objective, and fiduciary standard of care, and empowers enterprises and advisors to more fully understand their clients. Through a combination of platform enhancements, partnerships and acquisitions, Envestnet uniquely provides a financial network connecting software, services and data, delivering better intelligence and enabling its customers to drive better outcomes. We offer these solutions principally through the following product and services suites: · Envestnet | Enterprise provides an end-to-end open architecture wealth management platform, through which advisors can construct portfolios for clients. It begins with aggregated household data which then leads to a financial plan, asset allocation, investment strategy, portfolio management, rebalancing and performance reporting. Advisors have access to over 17,000 investment products. Envestnet | Enterprise also sells data aggregation and reporting, data analytics, and digital advice capabilities to customers. · Envestnet | Tamarac TM provides leading trading, rebalancing, portfolio accounting, performance reporting and CRM software, principally to high‑end RIAs. · Envestnet | Retirement Solutions (“ ERS ”) offers a comprehensive suite of services for advisor-sold retirement plans. Leveraging integrated technology, ERS addresses the regulatory, data, and investment needs of retirement plans and delivers the information holistically. · Envestnet | PMC ® , or Portfolio Management Consultants (“ PMC ”) provides research due diligence and consulting services to assist advisors in creating investment solutions for their clients. These solutions include more than 4,000 vetted managed account products, multi-manager portfolios, fund strategist portfolios, as well as proprietary products, such as Quantitative Portfolios. PMC also offers an Overlay Service, which includes patented portfolio overlay and tax optimization services. · Envestnet | Yodlee ™ is a leading data aggregation and data analytics platform powering dynamic, cloud- based innovation for digital financial services. Envestnet operates four RIAs and a registered broker-dealer. The RIAs are registered with the U.S. 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 Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
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 Codification TM , sometimes referred to as the codification or ASC. Principles of Consolidation —The consolidated financial statements include the accounts of Envestnet and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. 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. Areas requiring the use of management estimates relate to estimating uncollectible receivables, revenue recognition, valuations and assumptions used for impairment testing of goodwill, intangible and other long-lived assets, fair value of restricted stock and stock options issued, fair value of contingent consideration, realization of deferred tax assets, uncertain tax positions, sales tax liabilities, fair value of the liability portion of the convertible debt 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. · Subscription and licensing — Subscription— Subscription revenue is primarily derived from customers accessing the SaaS technology platform and includes subscription, support, and usage-based fees. Subscription revenue is recognized ratably over the contracted term of each respective subscription agreement, commencing on the date the service is provisioned to the customer, provided the four revenue recognition criteria have been satisfied. Usage-based revenue is recognized as earned, provided the four revenue recognition criteria have been satisfied. 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. · Professional services and other — The Company derives professional services fees from providing contractual customized service platform software development as well as implementation fees, which are recognized under a proportional performance model utilizing an output-based approach or are deferred and amortized over the estimated life of the customer relationship. The Company’s contracts generally have fixed prices, and generally specify or quantify 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. Multiple Element Arrangements —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 (a) vendor-specific objective evidence (“VSOE”) if it exists; or (b) 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. For revenues that are subject to sales and use tax, the Company’s records the tax net within the corresponding revenue category in the consolidated statements of operations. Deferred Revenue— Deferred revenue primarily consists of implementation and set up fees, professional services, and license fee payments received in advance from customers. For subscription agreements, the Company typically invoices its customers in monthly or annual fixed installments. Accordingly, the deferred revenue balance does not represent the total contract value of these multi-year subscription agreements. Deferred revenue also includes certain deferred professional services fees, which are recognized in accordance with the Company’s revenue recognition policy. Cost of Revenues— Cost of revenues primarily includes 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. The following summarizes cost of revenues by revenue category for the years ended December 31, 2016, 2015 and 2014: 2016 2015 2014 Assets under management or administration $ $ $ Subscription and licensing Professional services and other Total $ $ $ 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, 2016, 2015 and 2014, the Company’s allowance for doubtful accounts was $242, $221 and $76, respectively. The following table summarizes the changes to the allowance for doubtful accounts: 2016 2015 2014 Balance, beginning of year $ $ $ Add: Provisions for doubtful accounts Less: Write-offs Balance, end of year $ $ $ Segments— The Company’s chief operating decision maker is its chief executive officer, who reviews financial information of Envestnet and Envestnet | Yodlee on a segment and consolidated basis. The Company determined it has two segments as described below: · Envestnet – a leading provider of unified wealth management software and services to empower financial advisors and institutions. · Envestnet | Yodlee – a leading data aggregation and data intelligence platform powering dynamic, cloud-based innovation for digital financial services. Financial information about each business segment is contained in Note 20 to the consolidated financial statements. 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 and other liabilities 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. Restricted Cash— As required by the lease agreement for the Company’s facilities in Redwood City, California, the Company provided a certificate of deposit as collateral for a letter of credit issued for the benefit of the landlord in lieu of a security deposit. The letter of credit expires on July 31, 2022. The restricted certificate of deposit of $148 is included in other non-current assets in the accompanying consolidated balance sheets. The Company has restrictions as to the withdrawal or usage of its restricted cash until the completion of the contract term. The Company has $2,000 held in escrow related to the FinaConnect contingent consideration liability. The current amount of $429 and long term amount of $1,571 are included in prepaids and other current assets and other non-current assets, respectively, on the consolidated balance sheets. Investments— The Company has an investment that is 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. 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 has investments in which it uses the equity method of accounting to record its portion of investments in these privately held companies’ net income or loss on a one quarter lag from the actual results of operations. The Company uses the equity method of accounting because of its less than 50 percent ownership. The Company’s interest in the earnings or losses of the privately held companies will be reflected in other income (expense), net on the consolidated statements of operations. 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 $734, $0 and $0 in impairments to investments during the years ended December 31, 2016, 2015 and 2014, respectively. See Note 8 to the notes to consolidated financial statements. 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. Internally Developed Software for Internal Use— 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 for internal use during the years ended December 31, 2016, 2015 and 2014. Internally Developed Software for External Use — While most customer arrangements that are delivered to customers on SaaS technology platforms, whereby the customers do not have the ability to take possession of the software, customers could, and on occasion have, negotiated to purchase licenses to products that would not involve hosting by the Company. Accordingly, when determining which software development costs to capitalize, the Company follows the guidance for cost of software to be sold, leased, or otherwise marketed. The Company begins to capitalize software development costs upon the establishment of technological feasibility, which is generally the completion of a working prototype that has been certified as having no critical bugs and is available to be purchased by the customers. To date, software development costs incurred between completion of a working prototype and general availability of the related product have not been material and are expensed as incurred. 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. In 2015, the Company changed the date of the annual impairment analysis from December 31 to October 31 in order to provide management time to complete the analysis prior to year-end. The Company has concluded that it has two reporting units. Prior to performing the two step evaluation, an assessment of qualitative factors may be performed to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value. If it is determined that it is unlikely that the carrying value exceeds the fair value, the Company is not required to complete the two step goodwill impairment evaluation. If it is determined that the carrying value may exceed fair value when considering qualitative factors, the first of the two step goodwill impairment evaluation is performed. The first step reviews whether or not the fair value of the reporting unit exceeds its carrying value, and if not, goodwill is not impaired and no further testing is performed. If the carrying value of the reporting unit exceeds its fair value, then a second step must be performed, and the implied fair value of the reporting unit’s goodwill must be determined and compared to the carrying value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference will be recorded. No goodwill impairment charges have been recorded for the years ended December 31, 2016, 2015 and 2014. 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. No intangible asset impairment charges have been recorded for the years ended December 31, 2016, 2015 and 2014. Operating 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. Non-income Tax Liabilities —Certain of the Company’s revenues are subject to sales and use taxes in certain jurisdictions where it conducts business in the United States. During 2016, the Company determined that net sales and use taxes of $6,229, including interest of approximately $914, were probable of being assessed related to multiple jurisdictions with respect to revenues in the year ended December 31, 2016 and prior years. The sales and use tax adjustment was recorded in general and administration on the consolidated statements of operations. During 2016, the Company estimated a sales and use tax liability of $10,108. This amount is included in accrued expenses and other liabilities on the consolidated balance sheets. The Company also estimated a sales and use tax receivable of $3,879 related to estimated recoverability of amounts due from customers. This amount is included in prepaid expenses and other current assets on the consolidated balance sheets. Additional future information obtained from the applicable jurisdictions may affect the Company’s estimate of its sales and use tax liability. Advertising Costs— The Company expenses all advertising costs as incurred and they are classified within general and administration expenses in the consolidated statements of operations. Advertising costs totaled approximately $704, $645 and $675 for the years ended December 31, 2016, 2015 and 2014, respectively. Research and Development— The Company intends to continue to invest in its technology platforms 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, 2016, 2015 and 2014, our technology development expenses, which is comprised of salaries and benefits, totaled approximately $29,500, $10,300, and $8,200, 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. The Company determines the fair value of contingent acquisition consideration payable on the acquisition date using a discounted cash flow approach utilizing an appropriate discount rate. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value as adjustments to fair market value adjustment on contingent consideration in the Company’s consolidated statements of operations. Changes in the fair value of the contingent acquisition consideration payable can result from adjustments to the estimated revenue forecasts included in the contingent payment calculations. 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 solely 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. The Company entered into employment agreements with certain executive officers, three of whom received a total of 205,000 performance-based restricted stock unit awards in May 2016 which vest upon the achievement of certain “Target Performance Measures” as defined in the employment agreements, for the periods ending December 31, 2016, December 31, 2017 and December 31, 2018 and four of whom received a total of 125,000 restricted stock units awards in August 2016 which vest quarterly thereafter. Convertible Notes —On December 15, 2014, the Company issued $172,500 of 1.75% convertible notes due December 2019 (the “Convertible Notes”). The Convertible Notes are accounted for in accordance with ASC 470-20. The Company has determined that the embedded conversion options in the Convertible Notes are not required to be separately accounted for as a derivative under GAAP. The Company separately accounts for the liability and equity components of Convertible Notes that can be settled in cash by allocating the proceeds from issuance between the liability component and the embedded conversion option, or equity component, in accordance with accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The value of the equity component is calculated by first measuring the fair value of the liability component, using the interest rate of a similar liability that does not have a conversion feature, as of the issuance date. The difference between the proceeds from the convertible debt issuance and the amount measured as the liability component is recorded as the equity component with a corresponding discount recorded on the debt. The Company recognizes the accretion of the resulting discount using the effective interest method as part of interest expense in its consolidated statements of operations. Term Notes —On November 19, 2015, the Company borrowed $160,000 of term notes (“Term Notes”) under the Amended and Restated Credit Agreement in connection with the completion of the acquisition of Yodlee. As of December 31, 2016, the Company has repaid $18,000 of the Term Notes. The Term Notes are payable in quarterly installments of $2,000 per installment, with the final payment of all remaining Term Note principal due and payable on the scheduled maturity date of November 19, 2018. Within 90 days of each year end, an excess cash flow prepayment, as defined in the Amended and Restated Credit Agreement, may also be required if the company’s total leverage ratio is greater than 2.0 to 1.0 as of the end of the most recently completed two consecutive fiscal quarters of the Company. As of December 31, 2016, the Company has calculated this prepayment to be approximately $31,862. Foreign Currency— The assets and liabilities of the foreign subsidiary, where the local currency is the functional currency, are translated into U.S. dollars at the exchange rate in effect at the consolidated balance sheet date. Income and expense amounts are translated at average rates during the period. The resulting foreign currency translation adjustment is recorded in accumulated other comprehensive income (loss) in stockholders’ equity in the accompanying consolidated balance sheets. The Company is also subject to gains and losses from foreign currency denominated transactions and the remeasurement of foreign currency denominated balance sheet accounts, both of which are included in other income (expense), net in the accompanying consolidated statements of operations. Derivative Financial Instruments— The Company historically used and may use foreign currency forward contracts to reduce its exposure to foreign currency exchange rate changes of the Indian Rupee on certain forecasted operating expenses and on certain existing assets and liabilities. The contracts typically mature within 12 months, and they are not held for trading purposes. The Company may designate certain of its foreign currency forward contracts as hedging instruments subject to hedge accounting treatment. The Company records all of its derivative instruments at their gross fair value on the consolidated balance sheet, at each balance sheet date. The accounting for changes in the fair value of a derivative instrument depends on whether the instrument has been designated and qualifies as a cash flow hedge for accounting purposes. For foreign currency forward contracts that are designated and qualify as hedging instruments, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive loss in stockholders’ equity/(deficit) and reclassified into operating expenses and cost of revenue in the same period during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized in other income (expense), net in the accompanying consolidated statements of operations. To receive hedge accounting treatment, cash flow hedges must be highly effective in offs |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Business Acquisitions | |
Business Acquisitions | 3. Business Acquisitions The following acquisitions are included within the Envestnet segment, except for Yodlee and Wheelhouse, which comprise the Envestnet | Yodlee segment. Klein Decisions, Inc. On July 1, 2014, ERS completed the acquisition of Klein. In accordance with the stock purchase agreement, ERS acquired all of the outstanding shares of Klein for cash consideration of approximately $1,288, a promissory note in the amount of $1,500, and estimated fair value of $2,800 in contingent consideration (with a minimum guaranteed amount of $1,175), to be paid over three years. The promissory note was paid by ERS on July 31, 2014. Klein develops dynamic decision systems that incorporate investor preferences, goals, and priorities into the investment process. ERS acquired Klein for its capabilities in delivering personal participant solutions, as well as its personnel to further build out ERS’s business of serving advisors who support the small retirement plan market. The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, which relate to an increase in future ERS revenues as a result of leveraging Klein’s systems and expertise of its employees. The goodwill is not deductible for income tax purposes. The estimated consideration transferred in the acquisition as of the acquisition date was as follows: Cash paid to owners $ Promissory note Contingent consideration $ The contingent consideration liability of $2,800 is the present value of an undiscounted liability of $3,520, applying a discount rate of 9% and is considered a Level III fair value measurement as described in Note 9. The first undiscounted payment of $230 was paid on September 2, 2015. Changes to the estimated fair value of the contingent consideration are recognized in earnings of the Company. For the year ended December 31, 2015, the Company recognized imputed interest expense on contingent consideration of $117 and a decrease in the fair value of contingent consideration of $1,231, which are included in general and administration expense in the consolidated statements of operations. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ A summary of intangible assets acquired, estimated useful lives and amortization method is as follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Total $ The results of Klein’s operations are included in the consolidated statements of operations beginning July 1, 2014. Klein’s revenues and pre-tax net loss for the six-month period ended December 31, 2014 totaled $468 and ($926), respectively. The loss includes acquired intangible asset amortization of $286, accretion on contingent consideration of $75 and an estimated fair value adjustment to decrease the contingent consideration liability by $675. On July 9, 2014, the former owners of Klein (the “Klein Parties”) purchased an 11.7% ownership interest in ERS for $1,500. The Klein Parties have the right to require ERS to repurchase units issued anytime between 18 and approximately 36 months after July 1, 2014 for the amount of $1,500. In December of 2015, the Klein Parties exercised their right to require ERS to repurchase their units in the amount of $1,500. In addition, the Company reached a settlement agreement with the Klein Parties and agreed to pay the minimum guaranteed contingent consideration payment of $1,175 and a payment of $1,825 to eliminate all future claims. All amounts are included in accrued expenses and other liabilities on the consolidated balance sheet and an expense totaling $2,160 is recorded in general and administration in the consolidated statements of operations for the year ended December 31, 2015. Placemark Holdings, Inc. On October 1, 2014, Envestnet, Inc. completed the acquisition (the “Acquisition”) of Placemark Holdings, Inc., a Delaware corporation (“Placemark”). Under the terms of the Acquisition, total consideration was $58,282 for all of the outstanding capital stock of Placemark. Envestnet funded the Acquisition with available cash and borrowings under its Credit Agreement (see Note 12). Placemark develops UMA programs and other portfolio management outsourcing solutions, including patented portfolio overlay and tax optimization services, for banks, full-service broker-dealers and RIA firms. Envestnet acquired Placemark for its UMA and overlay capabilities, to strengthen the Company’s position as a leading provider of UMA offerings, and to expand its presence in the full-service broker-dealer and RIA markets. The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, which relate to an increase in future Envestnet revenues as a result of leveraging Placemark’s systems and expertise of its employees, and lower future operating expenses and technology platform-related costs due to the migration of Placemark’s clients to the Envestnet technology platform. The goodwill is not deductible for income tax purposes. The estimated consideration transferred in the acquisition as of the acquisition date was as follows: Cash paid to owners $ Cash acquired Receivable from working capital settlement $ The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ A summary of intangible assets acquired, estimated useful lives and amortization method is as follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Trade names Straight-line Total $ The results of Placemark’s operations are included in the consolidated statements of operations beginning October 1, 2014. Placemark’s revenues and pre-tax income for the three-month period ended December 31, 2014 totaled $6,157 and $209, respectively. The loss includes acquired intangible asset amortization of $1,254. Upside Holdings, Inc. On February 24, 2015, Envestnet, Inc. (the “Company”) acquired all of the stock of Upside Holdings, Inc. (including its subsidiaries “Upside”) for consideration totaling $2,641. Upside is a technology company that was previously registered as an Internet Investment Adviser under Rule 203A-2(f) of the Investment Advisers Act of 1940 (“Advisers Act”). Upside helps financial advisors compete against other digital advisors, or “robo advisors,” by leveraging technology and algorithms to advise, manage, and serve clients who want personalized investment services. The Company acquired Upside to integrate its technology within the Company’s unified wealth management platform, which will allow advisors to compete more aggressively to engage their clients online and reach a new class of investors. The goodwill arising from the acquisition represents the advantage of this integrated technology, 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. As a result of the acquisition of Upside, the Company provided for the future grant of unvested restricted stock unit awards to Upside employees at the end of each year in 2015, 2016 and 2017 upon Upside meeting certain performance conditions and then a subsequent two-year service condition (Note 15). If 100 percent of the awards are earned for 2015, 2016 and 2017, the maximum number of units that could be granted for 2015, 2016 and 2017 equals 22,064, 44,128 and 66,192 units, respectively. Each unit represents the right to receive one share of common stock of the Company, subject to the terms and conditions of the award. The Company has determined the payments to be categorized as compensation expense. As of December 31, 2016, no amounts have been recognized as the performance targets were not attained in 2016 or 2015. The estimated consideration transferred in the acquisition as of the acquisition date was as follows: Cash consideration $ Purchase consideration liability Cash acquired Total $ The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ The estimated useful life and amortization method of the intangible asset acquired is as follows: Estimated Amortization Amount Useful Life in Years Method Proprietary technology $ Straight-line The results of Upside’s operations are included in the consolidated statements of operations beginning February 24, 2015, and are not material to the Company’s results of operations. For the year ended December 31, 2015, acquisition related costs for Upside totaled $2 30 and are included in general and administration in the consolidated statements of operations . Oltis Software LLC On May 6, 2015, the Company acquired all of the issued and outstanding membership interests of Oltis Software LLC (d/b/a Finance Logix ® ), an Arizona limited liability company (“Finance Logix”). Finance Logix provides financial planning and wealth management software solutions to banks, broker-dealers and RIAs. The Company paid upfront consideration of $20,595 in cash, purchase consideration liability of $3,000, 123,410 in shares of Envestnet common stock with a fair value of $6,388 and 123,410 stock options to acquire Envestnet common stock at $52.67 per share with an estimated fair value of $2,542. The Company acquired Finance Logix to integrate its technology within the Company’s unified wealth management platform, which will allow advisors to offer financial planning that flows seamlessly into portfolio construction and ongoing management on a single platform. Finance Logix allows the Company to deliver that capability and increase the breadth of our platform and the functionality gap between our platform and competing platforms. The goodwill arising from the acquisition represents cross-selling opportunities, 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. In connection with the acquisition of Finance Logix, the Company is required to pay the former owner of Finance Logix future payments in a mix of cash, stock and stock options, based on Finance Logix meeting annual net revenue targets of $5,000, $10,000 and $16,000 for calendar years 2015, 2016 and 2017, respectively, with lower payments for performance below the three yearly targets and a higher payment in 2017 for performance above the target. The Company has determined the first payment related to the 2015 target to be categorized as compensation expense and the payments, if any, related to 2016 and 2017 targets, to be categorized as contingent consideration. The Company did not record compensation expense in 2015 and has not recorded a contingent consideration liability as of December 31, 2016, as future payments are not expected to occur at this time. Changes to the estimated fair value of the contingent consideration, if any, will be recognized in earnings of the Company. The estimated consideration transferred in the acquisition as of the acquisition date was as follows: Cash consideration $ Stock and stock option consideration Purchase consideration liability Cash acquired Total $ The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ A summary of intangible assets acquired, estimated useful lives and amortization method is as follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Trade names and domains Straight-line Total $ The results of Finance Logix’s operations are included in the consolidated statements of operations beginning May 6, 2015. Finance Logix’s revenues for the period ended December 31, 2015 totaled $1,892. Finance Logix’s net loss for the period ended December 31, 2015 totaled $999. The net loss for the period ended December 31, 2015 includes acquired intangible asset amortization of $974. For the period ended December 31, 2016 and 2015, acquisition related costs for Finance Logix totaled $548 and $465, respectively, and are included in general and administration expenses. Castle Rock Innovations, Inc. On August 30, 2015, the Company acquired all of the outstanding shares of capital stock of Castle Rock Innovations, Inc., a Delaware corporation (“Castle Rock”). Castle Rock provides data aggregation and plan benchmark solutions to retirement plan record-keepers, broker-dealers, and advisors. The Company combined the acquired Castle Rock assets with ERS on December 1, 2016. Castle Rock’s AXIS Retirement Plan Analytics Platform enables retirement plan fiduciaries to comply with 408(b)(2) and 404a-5 regulatory fee disclosure reporting requirements. The AXIS platform offers a single web-based interface and data repository to service the reporting needs of all types of retirement plans, and can be integrated with all record-keeping systems. AXIS also includes features for editing and generating reports for filings, reporting plan expenses, and comparing retirement plans and participants to those of their peers by industry, company size, and other characteristics. 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 estimated consideration transferred in the acquisition as of the acquisition date was as follows: Cash consideration $ Contingent consideration liability Cash acquired Total $ In connection with the acquisition of Castle Rock, the Company is required to pay contingent consideration of 40% of the first annual post-closing period revenues minus $100, 35% of the second annual post-closing period revenue minus $100 and 30% of the third annual post-closing period revenue minus $100. The Company recorded a preliminary estimated liability as of the date of acquisition of $1,500, which represented the estimated fair value of contingent consideration on the date of acquisition and is considered a Level III fair value measurement as described in Note 9. On December 1, 2016, the Company and Castle Rock amended the stock purchase agreement to fix the remaining post-closing period payments. The first post-closing payment was made during October 2016 in the amount of $805. The second post-closing period payment of $445 was paid in January 2017 and the third post-closing payment of $1,250 will be payable in January 2018. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ A summary of intangible assets acquired, estimated useful lives and amortization method is as follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Trade names and domains Straight-line Total $ The results of Castle Rock’s operations are included in the consolidated statements of operations beginning September 1, 2015. Castle Rock’s revenues and net income for the period ended December 31, 2015 totaled $1,011 and $109, respectively. The net income includes acquired intangible asset amortization of $178. For the period ended December 31, 2016 and 2015, acquisition related costs for Castle Rock totaled $110 and $170, respectively, and are included in general and administration expenses. On September 1, 2015, ERS accepted the subscription of certain former owners of Castle Rock (the “Castle Rock Parties”) to purchase a 6.5% ownership interest of ERS for $900. The Castle Rock Parties have the right to require ERS to repurchase units issued pursuant to the subscription in approximately 36 months after September 1, 2015 for the amount of $900. This purchase obligation is guaranteed by the Company and is reflected outside of permanent equity in the consolidated balance sheet. Yodlee, Inc. On November 19, 2015, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated August 10, 2015, among Yodlee, the Company and Yale Merger Corp. (“Merger Sub”), a wholly owned subsidiary of Envestnet, Merger Sub was merged (the “Merger”) with and into Yodlee with Yodlee continuing as a wholly owned subsidiary of Envestnet. Yodlee, operating as Envestnet | Yodlee is a leading data aggregation and data analytics platform powering dynamic, cloud-based innovation for digital financial services. Yodlee powers digital financial solutions for approximately 22 million paid subscribers and over 1,000 financial institutions, financial technology innovators and financial advisory firms. Founded in 1999, the company has built a network of over 15,000 data sources and been awarded 78 patents. Under the terms of the Merger Agreement, Yodlee stockholders received $11.51 in cash and 0.1889 of a share of Envestnet common stock per Yodlee share. Based upon the volume weighted average price per share of Envestnet common stock for the ten consecutive trading days ending on (and including) November 17, 2015, the second trading day immediately prior to completion of the Merger, Yodlee stockholders received total consideration with a value of $17.49 per share. Net cash consideration totaled approximately $375,658 and the Company issued approximately 5,974,000 shares of Envestnet common stock to Yodlee stockholders in the Merger. Holders of 577,829 shares of Yodlee common stock have exercised their statutory appraisal rights under Delaware law. As of December 31, 2015 the Company recognized a liability in the amount of $10,061, which represented $17.49 in cash for each share of Yodlee common stock held by them. Although the Company believed the fair value of these shares did not exceed the consideration paid in the Acquisition, nevertheless, during the first quarter of 2016, the Company settled the appraisal claim in order to avoid the costs, uncertainties, disruptions and distraction of potential litigation. The difference between the liability as of December 31, 2015 and the settlement amount resulted in an increase to goodwill and total consideration paid. The Company acquired Yodlee to enhance the Company’s wealth management solutions with a deeply integrated data aggregation capability, expand the Company’s addressable market by delivering the Company’s wealth management solutions to Yodlee’s clients and partners, and benefit from the revenue potential resulting from Yodlee’s fast growing data analytics solutions. The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, primarily related to an increase in future revenues as a result of potential cross selling opportunities and new lines of business, as well as lower future operating expenses. The goodwill is also related to the knowledge and experience of the workforce in place. The goodwill is not deductible for income tax purposes. The estimated consideration transferred in the acquisition was as follows: Cash consideration $ Stock consideration Attribution of the fair market value of replacement awards Cash acquired Total $ In connection with the Yodlee merger, the Company issued 1,052,000 shares of Envestnet restricted stock awards (“replacement awards”) issued in connection with unvested Yodlee employee equity awards. The Yodlee unvested stock options and unvested restricted stock units were canceled and exchanged for the replacement awards. See Note 14 for additional information related to the replacement awards. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed: Accounts receivable $ Prepaid expenses and other current assets Property and equipment, net Other non-current assets Identifiable intangible assets Goodwill Total assets acquired Accounts payable Accrued expenses Capital lease obligations FIN 48 liability Deferred tax liability Deferred revenue Other long term liabilities Total liabilities assumed Total net assets acquired $ As part of the final acquisition accounting, management assigned $24,613 of the total acquired goodwill of $282,429 to the Envestnet segment given the expected benefit to that segment related to the synergies resulting from the combination. A summary of intangible assets acquired, estimated useful lives and amortization method is as follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Backlog Accelerated Proprietary technology Straight-line Trade names Straight-line Total $ The results of Envestnet | Yodlee’s operations are included in the consolidated statements of operations beginning November 20, 2015. Envestnet | Yodlee’s revenues and net loss for the period ended December 31, 2015 totaled $14,081 and $5,963, respectively. The net loss includes acquired intangible asset amortization of $3,953. For the period ended December 31, 2016 and 2015, acquisition related costs for Yodlee totaled $2,186 and $6,624, respectively, and are included in general and administration expenses. FinaConnect, Inc. On February 1, 2016 Envestnet acquired all of the outstanding shares of capital stock of FinaConnect, Inc. (“FinaConnect”). FinaConnect is a software as a service (SaaS) platform that provides reporting and practice management capabilities to financial professionals servicing the retirement plan market and is the technology platform supporting the ERS service offering. FinaConnect is included in the Envestnet segment. On May 1, 2016, the Company combined the assets of FinaConnect with ERS. In addition to adding the client list serviced directly by FinaConnect, the goodwill arising from the acquisition represents the advantage of ownership of the technology powering the ERS solution, removal of ongoing licensing payments made to FinaConnect and the full integration of the knowledge and experience of the FinaConnect workforce. The goodwill is deductible for income tax purposes. In connection with the acquisition of FinaConnect, the Company paid upfront cash consideration of $6,425 and Company is required to pay contingent consideration of four times the incremental revenue on a certain book of business for the next two years, not to exceed a total amount of $3,500. The estimated consideration transferred in the acquisition as of the acquisition date was as follows: Cash consideration $ Contingent consideration liability Working capital adjustment Cash acquired Total $ As of December 31, 2016, the estimated fair market value of contingent consideration liability for FinaConnect increased from $1,929 to $2,286. As a result, the Company recorded a fair market value adjustment of $357 which is recognized in general and administration in the consolidated statements of operations. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ A summary of intangible assets acquired, estimated useful lives and amortization methods are as follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Trade names and domains Straight-line Total $ The results of FinaConnect’s operations are included in the consolidated statements of operations beginning February 1, 2016, and are not considered material to the Company’s results of operations. For the period ended December 31, 2016, acquisition related costs for FinaConnect totaled $116 and are included in general and administration in the consolidated statements of operations. Wheelhouse Analytics LLC On October 3, 2016, the Company acquired all of the issued and outstanding membership interests of Wheelhouse Analytics LLC (“Wheelhouse”). Wheelhouse is a technology company that provides data analytics, mobile sales solutions, and online education tools to financial advisors, asset managers and enterprises. Wheelhouse is included in the Yodlee segment. The Company acquired Wheelhouse to be integrated with Yodlee’s industry-leading data and analytics solutions to strengthen Envestnet’s data-driven insights to financial advisors, asset managers and enterprises enabling them to better manage their businesses and client relationships and deliver better outcomes to their clients. Envestnet expects to deeply integrate Wheelhouse’s tools, delivering robust online dashboards and reporting that provides actionable intelligence. In connection with the acquisition of Wheelhouse, the Company paid cash consideration of $13,299 and is required to pay contingent consideration with the aggregate amount not to exceed $4,000 and certain holdbacks upon release. Changes to the estimated fair value of the contingent consideration, if any, will be recognized in earnings of the Company. The preliminary estimated consideration transferred in the acquisition was as follows: Cash consideration $ Contingent consideration liability Purchase consideration liability Working capital adjustment Cash acquired Total $ The estimated fair values of certain working capital balances, contingent consideration, deferred revenue, identifiable intangible assets and goodwill are provisional and are based on the information that was available as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation and other studies and are in progress and not yet at the point where there is sufficient information for a definitive measurement. The Company believes the preliminary information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair values reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation of working capital balances, contingent consideration, deferred revenue, identifiable intangible assets and goodwill, and complete the acquisition accounting as soon as practicable but no later than October 3, 2017. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Preliminary Estimate at December 31, 2016 Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ A summary of preliminary estimated intangible assets acquired, estimated useful lives and amortization method is as follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Trade names and domains Straight-line Total $ The results of Wheelhouse’s operations are included in the consolidated statements of operations beginning October 3, 2016. Wheelhouse’s revenues and loss from operations for the period ended December 31, 2016 totaled $557 and $799, respectively. Income from operations includes estimated acquired intangible asset amortization of $240. For the period ended December 31, 2016, acquisition costs for Wheelhouse totaled $383 and are included in general and administration in the consolidated statements of operations. The Company may incur additional acquisition related costs during 2017. Acquisition related costs for all acquisitions, totaled $3,343, $9,792 and $2,430 for the years ended December 31, 2016, 2015, and 2014, respectively and are included in general and administration in the consolidated statements of operations. Unaudited pro forma results for Envestnet, Inc. giving effect to the Finance Logix, Castle Rock and Yodlee acquisitions The following unaudited pro forma financial information presents the combined results of operations of Envestnet, Finance Logix, Castle Rock, and Yodlee for the year ended December 31, 2015. The unaudited pro forma financial information presents the results as if the acquisitions had occurred as of the beginning of 2015. The results of Klein, Upside, FinaConnect and Wheelhouse are not included in the pro forma financial information presented below as these acquisitions were not material to the Company’s results of operations. The results of FinaConnect and Wheelhouse are not included in the pro forma financial information presented below as the FinaConnect and Wheelhouse acquisitions were not considered material to the Company’s results of operations and as such no pro forma information is presented below for the year ended December 31, 2016. The unaudited pro forma results presented primarily include adjustments for amortization charges for acquired intangible assets and stock-based compensation expense, imputed interest expense, and transaction-related expenses and the related tax effect on the aforementioned items. Pro forma financial information as of December 31, 2015 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 2015. As of December 31, 2015 Revenues $ Net loss Net loss per share: Basic Diluted |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment | |
Property and Equipment | 4. Property and Equipment Property and equipment consists of the following: At December 31, 2016 2015 Cost: Computer equipment and software 3 years $ $ Office furniture and fixtures 3-7 years Leasehold improvements Shorter of the lease term or useful life of the asset Other office equipment 3-5 years Less accumulated depreciation and amortization Property and equipment, net $ $ During 2016, the Company retired property and equipment that were no longer in service in the amount of $8,123 and recognized a loss of $398. During 2015, the Company retired fully depreciated property and equipment that were no longer in service in the amount of $5,944. The following table presents the cost amounts and related accumulated depreciation written off by category: Year Ended December 31, 2016 Year Ended December 31, 2015 Accumulated Accumulated Cost Depreciation Cost Depreciation Computer equipment and software $ $ $ $ Office furniture and fixtures Other office equipment Leasehold improvements Total property and equipment retirements $ $ $ $ During 2016, the Company recorded an increase in the cost of acquired Yodlee property and equipment related to a purchase accounting fair market value adjustment in the amount of $3,922. Depreciation and amortization expense was as follows: Year Ended December 31, 2016 2015 2014 Depreciation and amortization expense $ $ $ |
Internally Developed Software
Internally Developed Software | 12 Months Ended |
Dec. 31, 2016 | |
Internally Developed Softwares | |
Internally Developed Software | 5. Internally Developed Software Internally developed software consists of the following: At December 31, Estimated Useful Life 2016 2015 Internally developed software 5 years $ $ Less accumulated amortization Internally developed software, net $ $ Amortization expense was as follows: Year Ended December 31, 2016 2015 2014 Amortization expense $ $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets Changes in the carrying amount of goodwill were as follows: Envestnet Envestnet | Yodlee Total Balance at December 31, 2014 $ $ — $ Upside acquisition — Finance Logix acquisition — Castle Rock acquisition — Yodlee acquisition — Purchase accounting adjustments - Placemark — Balance at December 31, 2015 $ $ $ FinaConnect acquisition — Wheelhouse acquisition — Purchase accounting adjustments - Yodlee Purchase accounting adjustments - Castle Rock — Other Balance at December 31, 2016 $ $ $ Intangible assets consist of the following: At December 31, 2016 At December 31, 2015 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Useful Life Amount Amortization Amount Amount Amortization Amount Customer lists - years $ $ $ $ $ $ Backlog years Proprietary technologies - years Trade names - years Total intangible assets $ $ $ $ $ $ During 2016, the Company wrote off fully amortized intangible assets, specifically customer lists, in the amount of $4,159. Amortization expense was as follows: Year Ended December 31, 2016 2015 2014 Amortization expense $ $ $ Future amortization expense of the intangible assets as of December 31, 2016, is expected to be as follows: Years ending December 31: 2017 $ 2018 2019 2020 2021 Thereafter $ |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2016 | |
Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | 7. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: At December 31, 2016 2015 Non-income tax receivable $ $ — Income tax receivable Prepaid insurance Prepaid rent — Prepaid technology FinaConnect escrow - current portion — Other $ $ |
Other Non-Current Assets
Other Non-Current Assets | 12 Months Ended |
Dec. 31, 2016 | |
Other Non-Current Assets. | |
Other Non-Current Assets | 8. Other Non-Current Assets Other non-current assets consist of the following: At December 31, 2016 2015 Investment in private companies $ $ Deposits: Lease Other Deferred compensation — Other $ $ The Company owns 756,347 Class B Units in a privately held company at a historical purchase price of $1,250. The Company uses the cost method of accounting for this investment. In April 2015, the Company purchased 150,000 Class B units representing 10.3% of the outstanding membership interests of a privately held company for cash consideration of $1,500. In July 2016, the Company purchased an additional 738,463 Class B units of the outstanding membership interests of a privately held company for cash consideration of $738 bringing its total of the outstanding membership interests to 16.2%. The Company uses the equity method of accounting to record its portion of the privately held company’s net income or loss on a one quarter lag from its actual results of operations. The Company uses the equity method of accounting because of its less than 50 percent ownership. The Company’s share in the loss of the privately held company was $84 and $1,420 during the years ended December 31, 2015 and 2016, respectively. In December, 2016, the Company determined that its investment in this privately held company was other than temporarily impaired. Therefore, the Company reduced the carrying value of its investment to zero and recorded an impairment loss of $734, which was recorded in other income (expense), net on the consolidated statements of operations. On November 1, 2016, the Company purchased 1,500,000 Class A units representing 21.4% of the outstanding membership interests of a privately held company for cash consideration of $1,500 which is included in investments in private companies. Upon the approval by a majority of the Board of Directors of the privately held company in its sole discretion, prior to December 31, 2017, the privately held company may require that Envestnet purchase up to an additional 1,500,000 Class A units. The Company uses the equity method of accounting to record its portion of this privately held company’s net income or loss on a one quarter lag from the actual results of operations. The Company uses the equity method of accounting because of its less than 50 percent ownership. The Company’s interest in the earnings or losses of the privately held company will be reflected in other income (expense), net on the consolidated statements of operations. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | 9. Fair Value Measurements The Company follows ASC 825-10, Financial Instruments, which provides companies the option to report selected financial assets and liabilities at fair value. ASC 825-10 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect of the company’s choice to use fair value on its earnings. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the balance sheet. The Company has not elected the ASC 825-10 option to report selected financial assets and liabilities at fair value. 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 I: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date. Level II: 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 III:: 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 following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value in the condensed consolidated balance sheets as of December 31, 2016 and 2015, based on the three-tier fair value hierarchy . At December 31, 2016 Fair Value Level I Level II Level III Assets Money market funds(1) $ $ $ — $ — Deferred compensation asset(2) — — Total assets $ $ $ — $ Liabilities Contingent consideration — — Deferred compensation liability(3) — — Total liabilities $ $ $ — $ At December 31, 2015 Fair Value Level I Level II Level III Assets Money market funds(1) $ $ $ — $ — Liabilities Contingent consideration — — Foreign currency forward contracts(4) — — Total liabilities $ $ — $ $ (1) 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. (2) The deferred compensation asset fair value is based upon the cash surrender value of the life insurance premiums. The Company recognized gains of $66 within the statements of operations for the year ended December 31, 2016. (3) The deferred compensation liability is included in other non-current liabilities in the consolidated balance sheets and its fair market value is based on the daily quoted market prices for the net asset value of the various funds in which the participants have selected. (4) Included in prepaid and other current assets in the consolidated balance sheets. Level I assets and liabilities include money-market funds not insured by the FDIC, deferred compensation and 2019 Convertible Notes. 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. These money-market funds are considered Level 1 and are included in cash and cash equivalents in the consolidated balance sheets. The fair value of the deferred compensation liability is based upon the daily quoted market prices for net asset value on the various funds selected by participants. The fair value of the 2019 Convertible Notes was calculated using observable market data. Level II assets and liabilities consist of unrealized gain or loss on forward currency contracts, which are measured using the difference between the market quotes of trading currencies adjusted for forward points and the executed contract rate. For further details on the Company’s derivative financial instruments, refer to Note 22. Level III assets and liabilities consist of the estimated fair value of contingent consideration as well as the deferred compensation asset. The fair market value of the deferred compensation asset is based upon the cash surrender value of the life insurance premiums. The fair value of the contingent consideration liabilities related to the FinaConnect and Wheelhouse acquisitions were estimated using a discounted cash flow method with significant inputs that are not observable in the market and thus represents a Level III fair value measurement as defined in ASC 820, Fair Value Measurements and Disclosures . The significant inputs in the Level III measurement not supported by market activity included our assessments of expected future cash flows related to our acquisitions of FinaConnect and Wheelhouse during the subsequent periods from the date of acquisition, appropriately discounted considering the uncertainties associated with the obligation, and calculated in accordance with the terms of the agreement. The Company utilized a discounted cash flow method with expected future performance of FinaConnect and Wheelhouse, and their ability to meet the target performance objectives as the main driver of the valuation, to arrive at the fair values of their respective contingent consideration. The Company will continue to reassess the fair value of the contingent consideration for each acquisition at each reporting date until settlement. Changes to the estimated fair values of the contingent consideration will be recognized in earnings of the Company and included in general and administration on the consolidated statements of operations. The table below presents a reconciliation of contingent consideration liabilities of which the Company measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2015 to December 31, 2016: Fair Value of Contingent Consideration Liabilities Balance at December 31, 2015 $ Settlement of contingent consideration liabilities FinaConnect acquisition Wheelhouse acquisition Reclassification to definite consideration Fair market value adjustments, net Accretion on contingent consideration Balance at December 31, 2016 $ During 2016 the Company recognized a deferred compensation asset, identified as Level III, in the amount of $2,672 and recognized gains of $66 on general and administrative on the consolidated statements of operations which resulted in an asset value as of December 31, 2016 of $2,738. 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 I, II and III during the year. On December 15, 2014, the Company issued $172,500 of Convertible Notes. As of December 31, 2016 and 2015, the carrying value of the 2019 Convertible Notes equaled $152,575 and $146,418, respectively, and represents the aggregate principal amount outstanding less the unamortized discount and debt issuance costs. As of December 31, 2016 and 2015, the fair value of the Convertible Notes was $164,824 and $152,878, respectively. The Company considers the Convertible Notes to be a Level II liability and uses a market approach to calculate the fair value of the Convertible Notes. The estimated fair value was determined based on the estimated or actual bids and offers of the Notes in an over-the-counter market on December 31, 2016. As of December 31, 2016 and 2015, there was $142,000 and $150,000, respectively, of Term Notes and no revolving credit amounts outstanding under the Amended and Restated Credit Agreement. The outstanding value of our Term Notes and revolving credit facility approximated fair value as they bear interest at variable rates and we believe our credit risk quality is consistent with when the debt originated. As of December 31, 2016 and 2015, the carrying value of the Term Notes equaled $138,335 and $144,399, respectively, and represents the aggregate principal amount outstanding less the unamortized debt issuance costs. The Company considers the Term Notes and revolving credit facility to be a Level II liability as of December 31, 2016. As of December 31, 2015 the Company considered the Term Notes to be a Level I liability, due to the proximity to the date of origination. We consider the recorded value of our other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable and accounts payable, to approximate the fair value of the respective assets and liabilities at December 31, 2016 based upon the short-term nature of the assets and liabilities. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses and Other Liabilities. | |
Accrued Expenses and Otber Liabilities | 10. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following: At December 31, 2016 2015 Accrued compensation and related taxes $ $ Accrued investment manager fees Sales and use tax payable — Accrued professional services Definite consideration — Purchase consideration liabilities Accrued restructuring charges Other accrued expenses $ $ |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | 11. Income Taxes Income (loss) before income tax provision was generated in the following jurisdictions: Year Ended December 31, 2016 2015 2014 Domestic $ $ $ Foreign Total $ $ $ The components of the income tax provision charged to operations are summarized as follows: Year Ended December 31, 2016 2015 2014 Current: Federal $ $ $ State Foreign Deferred: Federal State Foreign Total $ $ $ Net deferred tax assets (liabilities) consist of the following: At December 31, 2016 2015 Deferred revenue $ $ Prepaid expenses and accruals Deferred rent and lease incentives Net operating loss and tax credit carryforwards Property and equipment and intangible assets Stock-based compensation expense Investment in ERS, LLC — Convertible notes Other Total deferred tax assets Less valuation allowance Net deferred tax assets (liabilities) $ $ The valuation allowance for net deferred tax assets as of December 31, 2016 and 2015 was $29,610 and $3,493, respectively. The valuation allowance as of December 31, 2016 was related to state/federal net operating losses and foreign tax credits. In assessing the realizability of deferred tax assets (“DTAs”), management considers whether it is more-likely-than-not that some or all of the deferred tax assets will be realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing DTAs. A significant piece of objective negative evidence is the cumulative loss incurred over the three-year period ended December 31, 2016. The Company has scheduled out its temporary differences to determine if the Company would have taxable income due to the reversal of temporary differences to support the realization of the deferred tax assets. The Company’s analysis shows that the DTAs will continue to grow for the foreseeable future even with net operating losses (“NOLs”) starting to expire in 2022. Most of the Company’s deferred tax liabilities (“DTLs”) will reverse or expire before the expiration period of the Company’s significant DTAs, mainly NOLs and credits. On the basis of this evaluation, as of December 31, 2016, a valuation allowance of $29,610 has been recorded to adjust DTAs to an amount that is more likely than not to be realized. The amount of the DTA considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth. Upon the exercise of stock options and vesting of restricted stock awards, 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 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 and 2013 tax return to reduce taxes payable. The benefits for the recognized windfall tax benefit 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, 2016 2015 2014 Tax provision, at U.S. federal statutory tax rate $ $ $ State income tax, net of federal tax provision Effect of permanent items Effects of return to provision adjustment Change in valuation allowance Capital loss write-off due to carryforward period expiration — — Effect of change in federal and state income tax rate Uncertain tax positions Research and development credits Federal and state NOL adjustments net of valuation allowance impact — — Other Income tax provision $ $ $ At December 31, 2016, the Company has NOL carryforwards (before any uncertain tax position reserves) for federal income tax purposes of $261,475, which are available to offset future federal taxable income, if any, and expire through 2035. In addition, as of December 31, 2016, we have NOL carryforwards for state income tax purposes of $164,397, which are available to reduce future income subject to income taxes. The state NOL carryforwards expire through 2035. In addition, the Company has alternative minimum tax credit carryforwards of approximately $1,174 for federal and $22 for California, which are available to reduce future federal income taxes, if any, over an indefinite period. The Company also has R&D credit carryforwards of approximately $8,393 for federal and $6,948 for California. The Company also has foreign tax credits of $2,326. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows: Year Ended December 31, 2016 2015 2014 Unrecognized tax benefits balance at beginning of year $ $ $ Additions based on tax positions related to the current year Additions based on tax positions related to prior years — Additions based on tax positions for acquired entities — — Reductions for settlements with taxing authorities — Reductions for lapses of statute of limitations Unrecognized tax benefits balance at end of year $ $ $ At December 31, 2016, the amount of unrecognized tax benefits that would benefit the Company’s effective tax rate, if recognized, was $16,476. The Company estimates it is reasonably possible that there will not be a material change to the liability for unrecognized tax benefits in 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, 2016, 2015 and 2014, income tax expense includes $880, ($158) and ($41), respectively, of potential interest and penalties related to unrecognized tax benefits. The Company had accrued interest and penalties of $4,328, $3,488 and $594 as of December 31, 2016, 2015 and 2014, respectively. The Company files a consolidated federal income tax return and separate tax returns with various states. Additionally, foreign subsidiaries of the Company file tax returns in foreign jurisdictions. The Company’s tax returns for the calendar years ended December 31, 2013 through 2015 remain open to examination by the Internal Revenue Service in their entirety. With respect to state taxing jurisdictions, the Company’s tax returns for calendar years ended December 31, 2011 through 2015 remain open to examination by various state revenue services. Our Indian subsidiaries are currently under examination by the India Tax Authority for the fiscal years ended March 31, 2006 and forward. 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. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt | |
Debt | 12. Debt The Company’s outstanding debt obligations as of December 31, 2016 and 2015 were as follows: At December 31, 2016 2015 Convertible Notes $ $ Unaccreted discount on Convertible Notes Unamortized issuance costs on Convertible Notes $ $ Term Notes $ $ Unamortized issuance costs on Term Notes $ $ Credit Agreement On June 19, 2014, Envestnet and certain of its subsidiaries entered into a credit agreement (the “Original Credit Agreement”) with a group of banks (the “Banks”), for which Bank of Montreal is acting as administrative agent, pursuant to which the Banks agreed to provide an unsecured revolving credit facility of $70,000 with a sublimit for the issuance of letters of credit of $5,000. Subject to certain conditions, Envestnet had the right to increase the facility by up to $25,000. The Original Credit Agreement was scheduled to terminate on June 19, 2017, at which time any aggregate principal amount of borrowings outstanding would become payable in full. Any borrowings made under the Original Credit Agreement accrued interest at rates between 1.25 percent and 1.75 percent above LIBOR based on the Company’s total leverage ratio. There was also a commitment fee equal to 0.25 percent per annum on the daily unused portion of the facility. On December 8, 2014, Envestnet and certain of its subsidiaries entered into a first amendment to the Original Credit agreement (collectively with the Original Credit Agreement, the “Credit Agreement”) dated June 19, 2014. Pursuant to the Credit Agreement, the amount of the unsecured revolving credit facility was increased from $70,000 to $100,000 with a sublimit for the issuance of letters of credit of $5,000. Any borrowings made under the Credit Agreement accrued interest at rates between 1.50 percent and 3.25 percent above LIBOR based on the Company’s total leverage ratio. There is also a commitment fee equal to 0.25 percent per annum on the daily unused portion of the facility. Subject to certain conditions, Envestnet has the right to increase the facility by up to $25,000. On November 19, 2015, the Company and certain of its subsidiaries entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with a group of banks (the “Banks”), for which Bank of Montreal is acting as administrative agent (the “Administrative Agent”). The Amended and Restated Credit Agreement amends and restates the Credit Agreement, dated as of June 19, 2014, as amended, among the Company, the guarantors party thereto, the lenders party thereto and Bank of Montreal, as administrative agent. Pursuant to the Amended and Restated Credit Agreement, the Banks agreed to provide (i) term loans (“Term Notes”) to be borrowed as of the closing of the Merger in the aggregate principal amount of $160,000, which were used to fund a portion of the cash consideration paid by the Company in connection with the acquisition of Yodlee, and (ii) revolving credit commitments in the aggregate amount of up to $100,000, which includes a $5,000 subfacility for the issuance of letters of credit. The Amended and Restated Credit Agreement is scheduled to mature on November 19, 2018. Obligations under the Amended and Restated Credit Agreement are guaranteed by substantially all of Envestnet’s U.S. subsidiaries, including Yodlee. In accordance with the terms of the Security Agreement, dated November 19, 2015 (the “Security Agreement”), among the Company, the Debtors party thereto, the Banks and the Administrative Agent, obligations under the Amended and Restated Credit Agreement are secured by substantially all of the Company’s domestic assets and the Company’s pledge of 66% of the voting equity and 100% of the non-voting equity of certain of its first-tier foreign subsidiaries. In addition to funding a portion of the cash consideration paid by the Company in connection with the acquisition of Yodlee, proceeds under the Amended and Restated Credit Agreement may be used to finance capital expenditures, working capital, permitted acquisitions and for general corporate purposes. Envestnet will pay interest on borrowings made under the Amended and Restated Credit Agreement at rates between 1.50 percent and 3.25 percent above LIBOR based on the Company’s total leverage ratio. Borrowings under the Amended and Restated Credit Agreement are scheduled to mature on November 19, 2018. The Term Notes are payable in quarterly installments of $2,000 per installment, commencing in March 2016, with the final payment of all remaining term loan principal due and payable on the scheduled maturity date. Within 90 days of each year-end, beginning December 31, 2016, an excess cash flow prepayment, as defined in the Amended and Restated Credit Agreement, may also be required if the Company’s total leverage ratio is greater than 2.0 to 1.0 as of the end of the mostly recently completed two consecutive fiscal quarters of the Company. As of December 31, 2016, the Company has calculated the 2017 prepayment to be approximately $31,862. This prepayment amount is presented within the current portion of debt line item on the consolidated balance sheets. The Amended and Restated Credit Agreement contains customary conditions, representations and warranties, affirmative and negative covenants and events of default. The covenants include certain financial covenants requiring Envestnet to maintain compliance with a maximum senior leverage ratio, a maximum total leverage ratio, a minimum interest coverage ratio and minimum adjusted EBITDA, and provisions that limit the ability of Envestnet and its subsidiaries to incur debt, make investments, sell assets, create liens, engage in transactions with affiliates, engage in mergers and acquisitions, pay dividends and other restricted payments, grant negative pledges and change their business activities. As of December 31, 2016, there was $142,000 of Term Notes and no revolving credit amounts outstanding under the Amended and Restated Credit Agreement . The Company was out of compliance with certain debt covenants of the Amended and Restated Credit Agreement as of December 31, 2016, however, has obtained waivers with respect to those covenants and has amended the Amended and Restated Credit Agreement as of March 23, 2017. Convertible Notes On December 15, 2014, the Company issued $172,500 of Convertible Notes. Net proceeds from the offering were $166,967. The Convertible Notes bear interest at a rate of 1.75 percent per annum payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2015. The Convertible Notes are general unsecured obligations, subordinated in right of payment to our obligations under our Credit Agreement. The Convertible Notes rank equally in right of payment with all of the Company’s existing and future senior indebtedness and will be senior in right of payment to any of the Company’s future subordinated indebtedness. The Convertible Notes will be structurally subordinated to the indebtedness and other liabilities of any of our subsidiaries, other than to the extent the Convertible Notes are guaranteed in the future by our subsidiaries as described in the indenture and will be effectively subordinated to and future secured indebtedness to the extent of the value of the assets securing such indebtedness. Certain of our subsidiaries guarantee our obligations under our Credit Agreement. Upon the occurrence of a “fundamental change”, as defined in the indenture, the holders may require the Company to repurchase all or a portion of the Convertible Notes for cash at 100% of the principal amount of the Convertible Notes being purchased, plus any accrued and unpaid interest. The Convertible Notes are convertible into shares of the Company’s common stock under certain circumstances prior to maturity at a conversion rate of 15.9022 shares per $1,000 principal amount of the Convertible Notes, which represents a conversion price of $62.88 per share, subject to adjustment under certain conditions. Holders may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding July 1, 2019, only under the following circumstances: (a) during any calendar quarter commencing after the calendar quarter ending on March 31, 2015 (and only during such calendar quarter), if the last reported sale price of our common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs, is more than 130% of the conversion price of the Convertible Notes in effect on each applicable trading day; (b) during the five consecutive business-day period following any five consecutive trading-day period in which the trading price per $1,000 principal amount of the Convertible Notes for each such trading day was less than 98% of the last reported sale price of our common stock on such date multiplied by the then-current conversion rate; or (c) upon the occurrence of specified corporate events as defined in the indenture. Upon conversion, the Company may pay cash, shares of the Company’s common stock or a combination of cash and stock, as determined by the Company in its discretion. The Company’s stated policy is to settle the debt component of the Convertible Notes at least partially or wholly in cash. This policy is based both on the Company’s intent and the Company’s ability to settle these instruments in cash. The Company has separately accounted for the liability and equity components of the Convertible Notes by allocating the proceeds from issuance of the Convertible Notes between the liability component and the embedded conversion option, or equity component. This allocation was done by first estimating an interest rate at the time of issuance for similar notes that do not include the embedded conversion option. The Company allocated $26,618 to the equity component, net of offering costs of $882. The Company recorded a discount on the Convertible Notes of $27,500 which will be accreted and recorded as additional interest expense over the life of the Convertible Notes. During 2016 and 2015, the Company recognized $5,218 and $4,932, respectively, in accretion related to the discount. The effective interest rate of the liability component of the Convertible Notes is equal to the stated interest rate plus the accretion of original issue discount. The effective interest rate on the liability component of the Convertible Notes for the year ended December 31, 2016 was 6%. In connection with the issuance of the Convertible Notes, the Company incurred $4,651 of issuance costs in 2014, which are presented net in current and non-current debt. These costs are being amortized and are recorded as additional interest expense over the life of the Convertible Notes. Interest expense on the Convertible Notes and the Credit and Amended and Restated Credit agreements was comprised of the following: Year Ended December 31, 2016 2015 2014 Coupon interest $ $ $ Amortization of issuance costs Accretion of debt discount Interest on credit agreement — Undrawn and other fees $ $ $ See Note 15 for further discussion of the effect of conversion on net income per common share. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity | |
Stockholders' Equity | 13. Stockholders’ Equity On May 6, 2015, in connection with the acquisition of Finance Logix, the Company issued 123,410 in shares of Envestnet common stock with a fair value of $6,388 and 123,410 stock options to acquire Envestnet common stock at $52.67 per share with an estimated fair value of $2,542. On November 19, 2015 in connection with the merger of Yodlee, Envestnet issued approximately 5,974,000 shares of Envestnet common stock with a fair value of $186,522 to Yodlee stockholders in the Merger. On February 25, 2016, the Company announced that its Board of Directors had authorized a share repurchase program under which the Company may repurchase up to 2,000,000 shares of its common stock. The timing and volume of share repurchases will be determined by the Company’s management based on its ongoing assessments of the capital needs of the business, the market price of its common stock and general market conditions. No time limit has been set for the completion of the repurchase program, and the program may be suspended or discontinued at any time. The repurchase program authorizes the Company to purchase its common stock from time to time in the open market (including pursuant to a “Rule 10b5-1 plan”), in block transactions, in privately negotiated transactions, through accelerated stock repurchase programs, through option or other forward transactions or otherwise, all in compliance with applicable laws and other restrictions. For the year ended December 31, 2016, the Company purchased 43,610 shares of the Company’s common stock and as of December 31, 2016, a maximum of 1,956,390 shares may yet be purchased under this program. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Stock-Based Compensation | 14. 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-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. On May 13, 2015, the shareholders approved the 2010 Long-Term Incentive Plan as Amended. The amendment increased the number of common shares of the Company reserved for delivery under the 2010 Plan by 2,700,000 shares. 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 Envestnet | 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 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 each reporting period and may change based upon new facts and circumstances. Changes in the assumptions impact the total amount of expense and are recognized over the vesting period. As of December 31, 2016, all 559,551 shares of unvested restricted stock have been performance vested and are subject to 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. As a result of the merger between Envestnet and Yodlee, the Company adopted the Envestnet, Inc. 2015 Acquisition Equity Award Plan (the “2015 Plan”). The 2015 Plan provides for the assumption of all unvested equity awards previously granted pursuant to the Yodlee employees and the conversion of such awards into equity awards of the Company pursuant to the 2015 Plan. No new awards are being made under the 2015 Plan. The maximum number of shares of stock which may be issued with respect to awards under the 2015 Plan is 1,058,807. As of December 31, 2016, the maximum number of options and restricted stock available for future issuance under the Company’s plans is 1,336,350. Employee stock-based compensation expense was as follows: Year Ended December 31, 2016 2015 2014 Stock-based compensation expense $ $ $ Tax effect on stock-based compensation expense Net effect on income $ $ $ Stock Options The following weighted average assumptions were used to value options granted during the periods indicated: At December 31, 2016 2015 2014 Grant date fair value of options $ $ $ Volatility % % % Risk-free interest rate % % % Dividend yield % % % Expected term (in years) The following table summarizes option activity under the Company’s plans: Weighted-Average Weighted- Remaining Average Contractual Life Aggregate Options Exercise Price (Years) Intrinsic Value Outstanding as of December 31, 2013 $ $ Granted Exercised Forfeited Outstanding as of December 31, 2014 Granted Exercised Forfeited Outstanding as of December 31, 2015 Granted Exercised Forfeited Outstanding as of December 31, 2016 Options exercisable The aggregate intrinsic values in the table below represent the total pre-tax intrinsic value (the aggregate difference between the fair value of the Company’s common stock on December 31, 2016, 2015 and 2014 of $35.25, $29.85 and $49.14, 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, 2016 range from $0.11 to $55.29. Other information is as follows: Year Ended December 31, 2016 2015 2014 Total intrinsic value of options exercised $ $ $ Cash received from exercises of stock options Cash received from issuance of restricted stock At December 31, 2016, there was $2,973 of unrecognized compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 1.8 years. Restricted Stock Units Periodically, the Company grants restricted stock unit awards to employees that vest one-third on each of the first three anniversaries of the grant date. Beginning with grants issued in February 2016, restricted stock units awards vest one-third on the first anniversary of the grant date and quarterly thereafter. The following is a summary of the activity for unvested restricted stock unit awards granted under the Company’s plans: Weighted- Average Grant Number of Date Fair Value Shares per Share Outstanding as of December 31, 2013 Granted Vested Forfeited Outstanding as of December 31, 2014 Granted Vested Forfeited Outstanding as of December 31, 2015 Granted Vested Forfeited Outstanding as of December 31, 2016 At December 31, 2016, there was $43,593 of unrecognized compensation expense related to unvested restricted stock unit awards, which the Company expects to recognize over a weighted-average period of 2.1 years. The Company entered into employment agreements with certain executive officers, three of whom received a total of 205,000 performance-based restricted stock unit awards in May 2016 which vest upon the achievement of certain “Target Performance Measures” as defined in the employment agreements, for the periods ending December 31, 2016, December 31, 2017 and December 31, 2018 and four of whom received a total of 125,000 restricted stock units awards in August 2016 which vest quarterly thereafter. In connection with the Yodlee merger, on November 19, 2015, the Company issued 1,052,000 shares of Envestnet restricted stock unit awards (“replacement awards”) issued in connection with unvested Yodlee employee equity awards. The Yodlee unvested stock options and unvested restricted stock units were canceled and exchanged for the replacement awards. In accordance with ASC 805, these awards are considered to be replacement awards. Exchanges of share options or other share-based payment awards in conjunction with a business combination are modifications of share-based payment awards in accordance with ASC Topic 718. As a result, a portion of the fair-value-based measure of the replacement awards, are included in measuring the consideration transferred in the Yodlee business combination. To determine the portion of the replacement award that is part of consideration transferred to acquire Yodlee, we have measured both the replacement awards granted by Envestnet and the historical Yodlee awards as of November 19, 2015 in accordance with ASC 718. The portion of the fair-value-based measure of the replacement award that is part of the consideration transferred in exchange for the acquisition of Yodlee, equals the portion of the Yodlee award that is attributable to pre-combination service. Envestnet is attributing a portion of the replacement awards to post combination service as these awards require post combination service. The fair value of the rollover consideration was estimated to be $32,836 of which $4,318 was attributable to pre-acquisition services. The remaining fair value of $28,518 is amortizing over the 43 month vesting period subsequent to the acquisition date. As of December 31, 2016, the remaining amount of unrecognized expense totaled $11,635. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Net Income (Loss) Per Share | |
Net Income (Loss) Per Share | 15. Net Income (Loss) 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, restricted stock and Convertible Notes using the treasury stock method. The Company accounts for the effect of the Convertible Notes on diluted net income per share using the treasury stock method since they may be settled in cash, shares or a combination thereof at the Company’s option. As a result, the Convertible Notes have no effect on diluted net loss per share until the Company’s stock price exceeds the conversion price of $62.88 per share, or if the trading price of the Convertible Notes meets certain criteria as described in Note 12. In the period of conversion, the Convertible Notes will have no impact on diluted net income if the Convertible Notes are settled in cash and will have an impact on basic and diluted net income per share if the Convertible Notes are settled in shares upon conversion. 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, 2016 2015 2014 Basic income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ $ $ Basic number of weighted-average shares outstanding Basic $ $ $ Diluted income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc $ $ $ Basic number of weighted-average shares outstanding Effect of dilutive shares: Options to purchase common stock — Unvested restricted stock units — Diluted number of weighted-average shares outstanding Diluted $ $ $ Securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share are as follows: At December 31, 2016 2015 2014 Options to purchase common stock — Unvested restricted stock units Ungranted unvested restricted stock units related to Upside — — Convertible Notes Total |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 16. Commitments and Contingencies Leases The Company rents office space under leases that expire at various dates through 2030. Future annual minimum lease commitments under operating leases were as follows: Years ending December 31: 2017 $ 2018 2019 2020 2021 Thereafter Total $ Rent expense for all operating leases totaled: Year Ended December 31, 2016 2015 2014 Rent expense $ $ $ 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, 2016, the Company estimated future minimum unconditional purchase obligations are $17,959. Litigation The Company is involved in litigation arising in the ordinary course of its business. Legal fees and other costs associated with such actions are expensed as incurred. The Company will record a provision for these claims when it is both probable that a liability has been incurred and the amount of the loss, or a range of the potential loss, can be reasonably estimated. These provisions are reviewed regularly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information or events pertaining to a particular case. Litigation accruals are recorded when and if it is determined that a loss is both probable and reasonably estimable. For litigation matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but if the matter is material, it is subject to disclosures. The Company believes that liabilities associated with any claims, while possible, are not probable, and therefore has not recorded any accrual for any claims as of December 31, 2016. Further, while any possible range of loss cannot be reasonably estimated at this time, the Company does not believe that the outcome of any of these proceedings, individually or in the aggregate, would, if determined adversely to it, have a material adverse effect on its financial condition or business, although an adverse resolution of litigation could have a material adverse effect on Envestnet’s results of operations or cash flow in a particular quarter or year. Contingencies Certain of the Company’s revenues are subject to sales and use taxes in certain jurisdictions where it conducts business in the United States. During 2016, the Company determined that net sales and use taxes of $6,229, including interest of approximately $914, were probable of being assessed related to multiple jurisdictions with respect to revenues in the year ended December 31, 2016 and prior years. As a result, in the fourth quarter of 2016, the Company estimated a sales and use tax liability of $10,108. This amount is included in accrued expenses and other liabilities on the consolidated balance sheets. The Company also estimated a sales and use tax receivable of $3,879 related to estimated recoverability of amounts due from customers. This amount is included in prepaid expenses and other current assets on the consolidated balance sheets. Additional future information obtained from the applicable jurisdictions may affect the Company’s estimate of its sales and use tax liability, but such change in the estimate cannot currently be made. |
Major Customers
Major Customers | 12 Months Ended |
Dec. 31, 2016 | |
Major Customers | |
Major Customers | 17. Major Customers One customer accounted for 10% or more of consolidated revenues: Year Ended December 31, 2016 2015 2014 Fidelity % % % |
Benefit Plan
Benefit Plan | 12 Months Ended |
Dec. 31, 2016 | |
Benefit Plan | |
Benefit Plan | 18. Benefit Plan The Company sponsors a profit sharing and savings plan under Section 401(k) of the Internal Revenue Code, covering substantially all domestic employees. The Company made voluntary employer matching contributions as follows: Year Ended December 31, 2016 2015 2014 Voluntary employer matching contributions $ $ $ |
Net Capital Requirements
Net Capital Requirements | 12 Months Ended |
Dec. 31, 2016 | |
Net Capital Requirements | |
Net Capital Requirements | 19. 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, 2016, the Company had net capital of $1,198, which was $1,098 in excess of its required net capital of $100. At December 31, 2016, the Company’s net capital ratio was .06 to 1. Additionally, PBS is subject to net capital requirements of certain self-regulatory organizations and at December 31, 2016, PBS was in compliance with such requirements. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Segment Information | 20. Segment Information Business segments are generally organized around our business services. Our business segments are: · Envestnet – provides leading unified wealth management software and services to empower financial advisors and institutions. · Envestnet | Yodlee – a leading data aggregation and data intelligence platform powering dynamic, cloud-based innovation for digital financial services. The information in the following tables is derived from the Company’s internal financial reporting used for corporate management purposes. Nonsegment expenses include salary and benefits for certain corporate officers, certain types of professional service expenses and insurance, acquisition related transaction costs, restructuring charges, and other non-recurring and/or non-operationally related expenses. There are no inter-segment revenues for the year ended December 31, 2016. The accounting policies of the reportable business segments are the same as those described in Note 2. The following table presents revenue by segment: Year Ended December 31, 2016 2015 2014 Revenue: Envestnet Assets under management or administration $ $ $ Subscription and licensing Professional services and other Total Envestnet segment revenues Envestnet | Yodlee Subscription and licensing — Professional services and other — Total Envestnet | Yodlee segment revenues — Consolidated revenue $ $ $ No single customer revenue amounts for Envestnet | Yodlee exceeded 10% of the segment revenue total. The following table presents a reconciliation from income from operations by segment to consolidated net income attributable to Envestnet, Inc.: Year Ended December 31, 2016 2015 2014 Envestnet $ $ $ Envestnet | Yodlee — Total segment income from operations Nonsegment operating expenses Interest expense, net Other income (expense), net Consolidated income (loss) before income taxes Income tax provision Consolidated net income (loss) Add: Net loss attributable to non-controlling interest — — Consolidated net income (loss) attributable to Envestnet, Inc. $ $ $ Segment assets primarily consist of cash, accounts receivable, prepaid expenses and other current assets, property, plant and equipment, internally developed software, goodwill, other intangibles, net, deferred tax assets and other non-current assets. A summary of consolidated total assets, consolidated depreciation and amortization and consolidated capital expenditures by segment follows: At December 31, 2016 2015 Segment assets: Envestnet $ $ Envestnet | Yodlee Consolidated total assets $ $ Year Ended December 31, 2016 2015 2014 Segment depreciation and amortization: Envestnet $ $ $ Envestnet | Yodlee — Consolidated depreciation and amortization $ $ $ Year Ended December 31, 2016 2015 2014 Segment capital expenditures: Envestnet $ $ $ Envestnet | Yodlee — Consolidated capital expenditures $ $ $ |
Geographical Information
Geographical Information | 12 Months Ended |
Dec. 31, 2016 | |
Geographical Information | |
Geographical Information | 21. Geographical Information Revenue by geography is based on the billing address of the customer. The following table sets forth revenue by geographic area: Year Ended December 31, 2016 2015 2014 United States $ $ $ International (1) Total $ $ $ (1) No foreign country accounted for more than 10% of total revenue. The following table sets forth property, plant, and equipment, net by geographic area: At December 31, 2016 2015 United States $ $ India Other Total $ $ |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 22. Derivative Financial Instruments Derivative instruments measured at fair value and their classification on the consolidated balance sheets are presented in the following tables: At December 31, 2016 At December 31, 2015 Notional Fair Notional Fair Amount Value Amount Value Derivative instruments included in accrued liabilities: Derivatives designated as hedging instruments $ — $ — $ $ Derivatives not designated as hedging instruments — — Total $ — $ — $ $ As of December 31, 2016, the Company had no outstanding derivative contracts. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events | |
Subsequent Events | 23. Subsequent Events In December 2014, Yodlee filed a complaint in the United States District Court for the District of Delaware alleging that Plaid Technologies Inc. (“Plaid”) had and was continuing to infringe on seven of Yodlee’s U.S. patents. The complaint sought unspecified monetary damages, enhanced damages, interest, fees, expenses, costs and injunctive relief against Plaid. In May 2016, Plaid filed its answer to Yodlee’s complaint as well as counterclaims seeking declaratory judgment that Yodlee’s patents were not infringed and were invalid and unenforceable. In addition, Plaid’s counterclaims also alleged, among other things, violation of federal antitrust and false advertising laws and unfair competition under California state law and common law. The counterclaims sought unspecified monetary damages, enhanced damages, interest, fees, expenses, costs and injunctive relief against Yodlee. During the course of the litigation, Plaid also filed petitions for review before the Patent Office’s Board of Patent Trials and Appeals against the seven Yodlee patents that were the subject of the lawsuit as well as a petition for reexamination against one of the patents. On January 31, 2017, Yodlee and Plaid agreed to resolve the lawsuit brought by Yodlee, the counterclaims brought by Plaid and the review petitions brought by Plaid before the Patent Office. Plaid also agreed not to participate further in the reexamination proceedings which the Patent Office may elect to continue without Plaid’s participation. As part of the resolution of the lawsuit, Plaid will license Envestnet’s worldwide patent portfolio. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data (Unaudited) | |
Quarterly Financial Data (Unaudited) | 24. Quarterly Financial Data (Unaudited) Quarterly results for the years ended December 31, 2016 and 2015 were as follows: 2016 First Second Third Fourth Total revenues $ $ $ $ Loss from operations Net loss attributable to Envestnet, Inc. Net loss per share Basic* Diluted* 2015 First Second Third Fourth Total revenues $ $ $ $ Income (loss) from operations Net income (loss) attributable to Envestnet, Inc. Net income (loss) per share Basic* Diluted* * Quarterly values may not sum to annual values due to rounding. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation —The consolidated financial statements include the accounts of Envestnet and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. |
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. Areas requiring the use of management estimates relate to estimating uncollectible receivables, revenue recognition, valuations and assumptions used for impairment testing of goodwill, intangible and other long-lived assets, fair value of restricted stock and stock options issued, fair value of contingent consideration, realization of deferred tax assets, uncertain tax positions, sales tax liabilities, fair value of the liability portion of the convertible debt 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. · Subscription and licensing — Subscription— Subscription revenue is primarily derived from customers accessing the SaaS technology platform and includes subscription, support, and usage-based fees. Subscription revenue is recognized ratably over the contracted term of each respective subscription agreement, commencing on the date the service is provisioned to the customer, provided the four revenue recognition criteria have been satisfied. Usage-based revenue is recognized as earned, provided the four revenue recognition criteria have been satisfied. 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. · Professional services and other — The Company derives professional services fees from providing contractual customized service platform software development as well as implementation fees, which are recognized under a proportional performance model utilizing an output-based approach or are deferred and amortized over the estimated life of the customer relationship. The Company’s contracts generally have fixed prices, and generally specify or quantify 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. |
Multiple Element Arrangements | Multiple Element Arrangements —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 (a) vendor-specific objective evidence (“VSOE”) if it exists; or (b) 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. For revenues that are subject to sales and use tax, the Company’s records the tax net within the corresponding revenue category in the consolidated statements of operations. |
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. For subscription agreements, the Company typically invoices its customers in monthly or annual fixed installments. Accordingly, the deferred revenue balance does not represent the total contract value of these multi-year subscription agreements. Deferred revenue also includes certain deferred professional services fees, which are recognized in accordance with the Company’s revenue recognition policy. |
Cost of Revenues | Cost of Revenues— Cost of revenues primarily includes 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. The following summarizes cost of revenues by revenue category for the years ended December 31, 2016, 2015 and 2014: 2016 2015 2014 Assets under management or administration $ $ $ Subscription and licensing Professional services and other Total $ $ $ |
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, 2016, 2015 and 2014, the Company’s allowance for doubtful accounts was $242, $221 and $76, respectively. The following table summarizes the changes to the allowance for doubtful accounts: 2016 2015 2014 Balance, beginning of year $ $ $ Add: Provisions for doubtful accounts Less: Write-offs Balance, end of year $ $ $ |
Segments | Segments— The Company’s chief operating decision maker is its chief executive officer, who reviews financial information of Envestnet and Envestnet | Yodlee on a segment and consolidated basis. The Company determined it has two segments as described below: · Envestnet – a leading provider of unified wealth management software and services to empower financial advisors and institutions. · Envestnet | Yodlee – a leading data aggregation and data intelligence platform powering dynamic, cloud-based innovation for digital financial services. Financial information about each business segment is contained in Note 20 to the consolidated financial statements. |
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 and other liabilities 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. |
Restricted Cash | Restricted Cash— As required by the lease agreement for the Company’s facilities in Redwood City, California, the Company provided a certificate of deposit as collateral for a letter of credit issued for the benefit of the landlord in lieu of a security deposit. The letter of credit expires on July 31, 2022. The restricted certificate of deposit of $148 is included in other non-current assets in the accompanying consolidated balance sheets. The Company has restrictions as to the withdrawal or usage of its restricted cash until the completion of the contract term. The Company has $2,000 held in escrow related to the FinaConnect contingent consideration liability. The current amount of $429 and long term amount of $1,571 are included in prepaids and other current assets and other non-current assets, respectively, on the consolidated balance sheets. |
Investments | Investments— The Company has an investment that is 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. 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 has investments in which it uses the equity method of accounting to record its portion of investments in these privately held companies’ net income or loss on a one quarter lag from the actual results of operations. The Company uses the equity method of accounting because of its less than 50 percent ownership. The Company’s interest in the earnings or losses of the privately held companies will be reflected in other income (expense), net on the consolidated statements of operations. 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 $734, $0 and $0 in impairments to investments during the years ended December 31, 2016, 2015 and 2014, respectively. See Note 8 to the notes to consolidated financial statements. |
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. |
Internally Developed Software | Internally Developed Software for Internal Use— 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 for internal use during the years ended December 31, 2016, 2015 and 2014. Internally Developed Software for External Use — While most customer arrangements that are delivered to customers on SaaS technology platforms, whereby the customers do not have the ability to take possession of the software, customers could, and on occasion have, negotiated to purchase licenses to products that would not involve hosting by the Company. Accordingly, when determining which software development costs to capitalize, the Company follows the guidance for cost of software to be sold, leased, or otherwise marketed. The Company begins to capitalize software development costs upon the establishment of technological feasibility, which is generally the completion of a working prototype that has been certified as having no critical bugs and is available to be purchased by the customers. To date, software development costs incurred between completion of a working prototype and general availability of the related product have not been material and are expensed as incurred. |
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. In 2015, the Company changed the date of the annual impairment analysis from December 31 to October 31 in order to provide management time to complete the analysis prior to year-end. The Company has concluded that it has two reporting units. Prior to performing the two step evaluation, an assessment of qualitative factors may be performed to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value. If it is determined that it is unlikely that the carrying value exceeds the fair value, the Company is not required to complete the two step goodwill impairment evaluation. If it is determined that the carrying value may exceed fair value when considering qualitative factors, the first of the two step goodwill impairment evaluation is performed. The first step reviews whether or not the fair value of the reporting unit exceeds its carrying value, and if not, goodwill is not impaired and no further testing is performed. If the carrying value of the reporting unit exceeds its fair value, then a second step must be performed, and the implied fair value of the reporting unit’s goodwill must be determined and compared to the carrying value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference will be recorded. No goodwill impairment charges have been recorded for the years ended December 31, 2016, 2015 and 2014. 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. No intangible asset impairment charges have been recorded for the years ended December 31, 2016, 2015 and 2014. |
Opearting Leases | Operating 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. Non-income Tax Liabilities —Certain of the Company’s revenues are subject to sales and use taxes in certain jurisdictions where it conducts business in the United States. During 2016, the Company determined that net sales and use taxes of $6,229, including interest of approximately $914, were probable of being assessed related to multiple jurisdictions with respect to revenues in the year ended December 31, 2016 and prior years. The sales and use tax adjustment was recorded in general and administration on the consolidated statements of operations. During 2016, the Company estimated a sales and use tax liability of $10,108. This amount is included in accrued expenses and other liabilities on the consolidated balance sheets. The Company also estimated a sales and use tax receivable of $3,879 related to estimated recoverability of amounts due from customers. This amount is included in prepaid expenses and other current assets on the consolidated balance sheets. Additional future information obtained from the applicable jurisdictions may affect the Company’s estimate of its sales and use tax liability. |
Advertising Costs | Advertising Costs— The Company expenses all advertising costs as incurred and they are classified within general and administration expenses in the consolidated statements of operations. Advertising costs totaled approximately $704, $645 and $675 for the years ended December 31, 2016, 2015 and 2014, respectively. |
Research and Development | Research and Development— The Company intends to continue to invest in its technology platforms 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, 2016, 2015 and 2014, our technology development expenses, which is comprised of salaries and benefits, totaled approximately $29,500, $10,300, and $8,200, 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. The Company determines the fair value of contingent acquisition consideration payable on the acquisition date using a discounted cash flow approach utilizing an appropriate discount rate. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value as adjustments to fair market value adjustment on contingent consideration in the Company’s consolidated statements of operations. Changes in the fair value of the contingent acquisition consideration payable can result from adjustments to the estimated revenue forecasts included in the contingent payment calculations. |
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 solely 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. The Company entered into employment agreements with certain executive officers, three of whom received a total of 205,000 performance-based restricted stock unit awards in May 2016 which vest upon the achievement of certain “Target Performance Measures” as defined in the employment agreements, for the periods ending December 31, 2016, December 31, 2017 and December 31, 2018 and four of whom received a total of 125,000 restricted stock units awards in August 2016 which vest quarterly thereafter. |
Convertible Notes | Convertible Notes —On December 15, 2014, the Company issued $172,500 of 1.75% convertible notes due December 2019 (the “Convertible Notes”). The Convertible Notes are accounted for in accordance with ASC 470-20. The Company has determined that the embedded conversion options in the Convertible Notes are not required to be separately accounted for as a derivative under GAAP. The Company separately accounts for the liability and equity components of Convertible Notes that can be settled in cash by allocating the proceeds from issuance between the liability component and the embedded conversion option, or equity component, in accordance with accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The value of the equity component is calculated by first measuring the fair value of the liability component, using the interest rate of a similar liability that does not have a conversion feature, as of the issuance date. The difference between the proceeds from the convertible debt issuance and the amount measured as the liability component is recorded as the equity component with a corresponding discount recorded on the debt. The Company recognizes the accretion of the resulting discount using the effective interest method as part of interest expense in its consolidated statements of operations. |
Term notes | Term Notes —On November 19, 2015, the Company borrowed $160,000 of term notes (“Term Notes”) under the Amended and Restated Credit Agreement in connection with the completion of the acquisition of Yodlee. As of December 31, 2016, the Company has repaid $18,000 of the Term Notes. The Term Notes are payable in quarterly installments of $2,000 per installment, with the final payment of all remaining Term Note principal due and payable on the scheduled maturity date of November 19, 2018. Within 90 days of each year end, an excess cash flow prepayment, as defined in the Amended and Restated Credit Agreement, may also be required if the company’s total leverage ratio is greater than 2.0 to 1.0 as of the end of the most recently completed two consecutive fiscal quarters of the Company. As of December 31, 2016, the Company has calculated this prepayment to be approximately $31,862. |
Foreign Currency | Foreign Currency— The assets and liabilities of the foreign subsidiary, where the local currency is the functional currency, are translated into U.S. dollars at the exchange rate in effect at the consolidated balance sheet date. Income and expense amounts are translated at average rates during the period. The resulting foreign currency translation adjustment is recorded in accumulated other comprehensive income (loss) in stockholders’ equity in the accompanying consolidated balance sheets. The Company is also subject to gains and losses from foreign currency denominated transactions and the remeasurement of foreign currency denominated balance sheet accounts, both of which are included in other income (expense), net in the accompanying consolidated statements of operations. |
Derivative Financial Instruments | Derivative Financial Instruments— The Company historically used and may use foreign currency forward contracts to reduce its exposure to foreign currency exchange rate changes of the Indian Rupee on certain forecasted operating expenses and on certain existing assets and liabilities. The contracts typically mature within 12 months, and they are not held for trading purposes. The Company may designate certain of its foreign currency forward contracts as hedging instruments subject to hedge accounting treatment. The Company records all of its derivative instruments at their gross fair value on the consolidated balance sheet, at each balance sheet date. The accounting for changes in the fair value of a derivative instrument depends on whether the instrument has been designated and qualifies as a cash flow hedge for accounting purposes. For foreign currency forward contracts that are designated and qualify as hedging instruments, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive loss in stockholders’ equity/(deficit) and reclassified into operating expenses and cost of revenue in the same period during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized in other income (expense), net in the accompanying consolidated statements of operations. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. The changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in other income (expense), net in the accompanying consolidated statements of operations. Gains and losses related to derivative instruments that do not qualify for hedge accounting treatment are recognized in other income (expense), net in the accompanying consolidated statements of operations. As of December 31, 2016 the Company had no outstanding derivative contracts. |
Non-controlling Interest | Non-controlling Interest —Effective February 1, 2014, the Company formed ERS with various third parties. ERS offers advisory and technology enabled services to financial advisors and retirement plans. In exchange for a 64.5% ownership interest in ERS, the Company contributed certain assets and has agreed to fund a certain amount of the operating expenses of ERS. As described in Note 3, primarily due to the issuance of units related to the contributions of FinaConnect, Inc. (“FinaConnect”) and Castle Rock Innovations, Inc. (“Castle Rock”) and the purchase of additional ERS units acquired from the former owners of Klein Decisions, Inc. (“Klein”), the Company’s ownership in ERS has increased to 80.8% as of December 31, 2016. The allocation of gains and losses to the members of ERS is based on a hypothetical liquidation book value method in accordance with the ERS operating agreement. There were no losses for the years ended December 31, 2016 and 2015, reflected as non-controlling interest in the consolidated statements of operations. |
Reclassifications | Reclassifications —Certain prior year balances have been reclassified to conform to current year presentation. Such reclassifications did not impact total revenues, operating income, net income, the consolidated statements of other comprehensive income, or consolidated statements of stockholders’ equity. For the year ended December 31, 2015, the consolidated statements of operations include a reclassification of $673 of restructuring charges to general and administration. Restructuring charges included within general and administration for the year ended December 31, 2016 were $596. As of December 31, 2016, deferred rent and lease incentives have been presented on the consolidated balance sheets as a single line item, and therefore the prior year balances have been consolidated. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements —In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires debt issuance costs related to a recognized debt liability be presented as a reduction to the carrying amount of that debt liability, not as an asset. The Company adopted the guidance for the Company’s fiscal year beginning January 1, 2016 and resulted in a decrease in current assets and current liabilities of $1,936 and decreases in non-current assets and non-current liabilities of $7,380 in the prior year. In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers,” which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. The original effective date for ASU 2014-09 would have required the Company to adopt beginning in its first quarter of 2017. However, in July 2015, the FASB voted to amend ASU 2014-09 by approving a one-year deferral of the effective date as well as providing the option to early adopt the standard on the original effective date. Accordingly, the Company will adopt the standard in its first quarter of 2018. In 2016, the Company began evaluating the impact of the adoption of the new revenue standard on its consolidated financial statements, including enhanced disclosures, as well as assessing the impact on systems, processes, controls. The Company expects the new revenue standard to have an impact on the estimation of variable transaction considerations, the allocation of variable considerations across distinct services, and the tracking and amortization of contract costs. We expect to begin capitalizing certain costs to obtain and fulfill a contract upon adoption of the new standard and are currently in the process of evaluating the period over which to amortize these capitalized costs. The Company has not yet quantified these amounts. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. Although the Company has not finalized the adoption disclosure approach, the Company currently anticipates applying the standard retrospectively with the cumulative effect recognized as of the date of adoption. In September 2015, the FASB issued ASU No. 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments”. This standard requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Entities were required to retrospectively apply adjustments made to provisional amounts recognized in a business combination. This standard is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. These changes became effective for the Company’s fiscal year beginning January 1, 2016 and have been reflected in these financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases”. This update amends the requirements for assets and liabilities recognized for all leases longer than twelve months. Lessees will be required to recognize a lease liability measured on a discounted basis, which is the lessee’s obligation to make lease payments arising from the lease, and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. This standard will be effective for financial statements issued by public companies for the annual and interim periods beginning after December 15, 2018. Early adoption of the standard is permitted. The Company is currently evaluating the potential impact of this guidance on our consolidated financial statements. In March 2016, The FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting”. This update is intended to reduce the cost and complexity of accounting for share-based payments; however, some changes may also increase volatility in reported earnings. Under the new guidance, all excess tax benefits and deficiencies will be recorded as an income tax benefit or expense in the income statement and excess tax benefits will be recorded as an operating activity in the statements of cash flows. The new guidance also allows withholding up to the maximum individual statutory tax rate without classifying the awards as a liability. The cash paid to satisfy the statutory income tax withholding obligation will be classified as a financing activity in the statements of cash flows. Lastly, the update allows forfeitures to be estimated or recognized when they occur. The requirements for the excess tax effects related to share-based payments at settlement must be applied on a prospective basis, and the other requirements under this standard are to be applied on a retrospective basis. This standard will be effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2016. We will adopt the standard effective January 1, 2017. Due to our valuation allowance, the Company does not expect the updated standard to have a material impact on the Consolidated Financial Statements and disclosures. We will not elect an accounting policy change to record forfeitures as they occur and will continue to estimate forfeitures at each period. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments,” which clarifies eight specific cash flow issues in an effort to reduce diversity in practice in how certain transactions are classified within the statements of cash flows. This ASU is effective for the Company January 1, 2018 with early adoption permitted. Upon adoption, the ASU requires a retrospective application unless it is determined that it is impractical to do so for which it must be retrospectively applied at the earliest date practical. Upon adoption, the Company does not anticipate significant changes to the Company's existing accounting policies or presentation of the consolidated statements of cash flows. |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Schedule of costs of revenues by revenue category | 2016 2015 2014 Assets under management or administration $ $ $ Subscription and licensing Professional services and other Total $ $ $ |
Schedule of changes to the allowance for doubtful accounts | 2016 2015 2014 Balance, beginning of year $ $ $ Add: Provisions for doubtful accounts Less: Write-offs Balance, end of year $ $ $ |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business acquisitions | |
Schedule of pro forma financial information | As of December 31, 2015 Revenues $ Net loss Net loss per share: Basic Diluted |
FinaConnect, Inc. | |
Business acquisitions | |
Summary of consideration transferred in the acquisition | Cash consideration $ Contingent consideration liability Working capital adjustment Cash acquired Total $ |
Summary of the estimated fair values of the assets acquired and liabilities assumed | Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ |
Summary of intangible assets acquired, estimated useful lives and amortization method | Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Trade names and domains Straight-line Total $ |
Klein | |
Business acquisitions | |
Summary of consideration transferred in the acquisition | Cash paid to owners $ Promissory note Contingent consideration $ |
Summary of the estimated fair values of the assets acquired and liabilities assumed | Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ |
Summary of intangible assets acquired, estimated useful lives and amortization method | Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Total $ |
Placemark | |
Business acquisitions | |
Summary of consideration transferred in the acquisition | Cash paid to owners $ Cash acquired Receivable from working capital settlement $ |
Summary of the estimated fair values of the assets acquired and liabilities assumed | Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ |
Summary of intangible assets acquired, estimated useful lives and amortization method | Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Trade names Straight-line Total $ |
Upside Holdings, Inc. | |
Business acquisitions | |
Summary of consideration transferred in the acquisition | Cash consideration $ Purchase consideration liability Cash acquired Total $ |
Summary of the estimated fair values of the assets acquired and liabilities assumed | Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ |
Summary of intangible assets acquired, estimated useful lives and amortization method | Estimated Amortization Amount Useful Life in Years Method Proprietary technology $ Straight-line |
Finance Logix | |
Business acquisitions | |
Summary of consideration transferred in the acquisition | Cash consideration $ Stock and stock option consideration Purchase consideration liability Cash acquired Total $ |
Summary of the estimated fair values of the assets acquired and liabilities assumed | Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ |
Summary of intangible assets acquired, estimated useful lives and amortization method | Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Trade names and domains Straight-line Total $ |
Castle Rock Innovations, Inc. | |
Business acquisitions | |
Summary of consideration transferred in the acquisition | Cash consideration $ Contingent consideration liability Cash acquired Total $ |
Summary of the estimated fair values of the assets acquired and liabilities assumed | Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ |
Summary of intangible assets acquired, estimated useful lives and amortization method | Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Trade names and domains Straight-line Total $ |
Yodlee, Inc | |
Business acquisitions | |
Summary of consideration transferred in the acquisition | Cash consideration $ Stock consideration Attribution of the fair market value of replacement awards Cash acquired Total $ |
Summary of the estimated fair values of the assets acquired and liabilities assumed | Accounts receivable $ Prepaid expenses and other current assets Property and equipment, net Other non-current assets Identifiable intangible assets Goodwill Total assets acquired Accounts payable Accrued expenses Capital lease obligations FIN 48 liability Deferred tax liability Deferred revenue Other long term liabilities Total liabilities assumed Total net assets acquired $ |
Summary of intangible assets acquired, estimated useful lives and amortization method | Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Backlog Accelerated Proprietary technology Straight-line Trade names Straight-line Total $ |
Wheelhouse Analytics, LLC | |
Business acquisitions | |
Summary of consideration transferred in the acquisition | Cash consideration $ Contingent consideration liability Purchase consideration liability Working capital adjustment Cash acquired Total $ |
Summary of the estimated fair values of the assets acquired and liabilities assumed | Preliminary Estimate at December 31, 2016 Total tangible assets acquired $ Total liabilities assumed Identifiable intangible assets Goodwill Total net assets acquired $ |
Summary of intangible assets acquired, estimated useful lives and amortization method | Estimated Amortization Amount Useful Life in Years Method Customer list $ Accelerated Proprietary technology Straight-line Trade names and domains Straight-line Total $ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment | |
Schedule of components of property and equipment | At December 31, 2016 2015 Cost: Computer equipment and software 3 years $ $ Office furniture and fixtures 3-7 years Leasehold improvements Shorter of the lease term or useful life of the asset Other office equipment 3-5 years Less accumulated depreciation and amortization Property and equipment, net $ $ |
Schedule of cost amount and related accumulated depreciation written off by category during the period | Year Ended December 31, 2016 Year Ended December 31, 2015 Accumulated Accumulated Cost Depreciation Cost Depreciation Computer equipment and software $ $ $ $ Office furniture and fixtures Other office equipment Leasehold improvements Total property and equipment retirements $ $ $ $ |
Schedule of depreciation and amortization expense | Year Ended December 31, 2016 2015 2014 Depreciation and amortization expense $ $ $ |
Internally Developed Software (
Internally Developed Software (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Internally Developed Softwares | |
Schedule of components of internally developed software | At December 31, Estimated Useful Life 2016 2015 Internally developed software 5 years $ $ Less accumulated amortization Internally developed software, net $ $ |
Schedule of amortization expense | Year Ended December 31, 2016 2015 2014 Amortization expense $ $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets | |
Schedule of changes in the carrying amount of goodwill by segment | Envestnet Envestnet | Yodlee Total Balance at December 31, 2014 $ $ — $ Upside acquisition — Finance Logix acquisition — Castle Rock acquisition — Yodlee acquisition — Purchase accounting adjustments - Placemark — Balance at December 31, 2015 $ $ $ FinaConnect acquisition — Wheelhouse acquisition — Purchase accounting adjustments - Yodlee Purchase accounting adjustments - Castle Rock — Other Balance at December 31, 2016 $ $ $ |
Schedule of components of intangible assets | At December 31, 2016 At December 31, 2015 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Useful Life Amount Amortization Amount Amount Amortization Amount Customer lists - years $ $ $ $ $ $ Backlog years Proprietary technologies - years Trade names - years Total intangible assets $ $ $ $ $ $ |
Schedule of amortization expense | Year Ended December 31, 2016 2015 2014 Amortization expense $ $ $ |
Schedule of Future amortization expense of the intangible assets | Years ending December 31: 2017 $ 2018 2019 2020 2021 Thereafter $ |
Prepaid Expenses and Other Cu38
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Prepaid Expenses and Other Current Assets | |
Schedule of prepaid expenses and other current assets | At December 31, 2016 2015 Non-income tax receivable $ $ — Income tax receivable Prepaid insurance Prepaid rent — Prepaid technology FinaConnect escrow - current portion — Other $ $ |
Other Non-Current Assets (Table
Other Non-Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Non-Current Assets. | |
Schedule of components of other non-current assets | At December 31, 2016 2015 Investment in private companies $ $ Deposits: Lease Other Deferred compensation — Other $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Schedule of changes in fair value of the Company’s financial assets and liabilities measured at fair value | At December 31, 2016 Fair Value Level I Level II Level III Assets Money market funds(1) $ $ $ — $ — Deferred compensation asset(2) — — Total assets $ $ $ — $ Liabilities Contingent consideration — — Deferred compensation liability(3) — — Total liabilities $ $ $ — $ At December 31, 2015 Fair Value Level I Level II Level III Assets Money market funds(1) $ $ $ — $ — Liabilities Contingent consideration — — Foreign currency forward contracts(4) — — Total liabilities $ $ — $ $ (1) 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. (2) The deferred compensation asset fair value is based upon the cash surrender value of the life insurance premiums. The Company recognized gains of $66 within the statements of operations for the year ended December 31, 2016. (3) The deferred compensation liability is included in other non-current liabilities in the consolidated balance sheets and its fair market value is based on the daily quoted market prices for the net asset value of the various funds in which the participants have selected. (4) Included in prepaid and other current assets in the consolidated balance sheets. |
Summary of changes in the fair value of the Company's Level 3 liability | Fair Value of Contingent Consideration Liabilities Balance at December 31, 2015 $ Settlement of contingent consideration liabilities FinaConnect acquisition Wheelhouse acquisition Reclassification to definite consideration Fair market value adjustments, net Accretion on contingent consideration Balance at December 31, 2016 $ |
Accrued Expenses and Other Li41
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses and Other Liabilities. | |
Schedule of components of accrued expenses | At December 31, 2016 2015 Accrued compensation and related taxes $ $ Accrued investment manager fees Sales and use tax payable — Accrued professional services Definite consideration — Purchase consideration liabilities Accrued restructuring charges Other accrued expenses $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Summary of income (loss) before income tax provision | Year Ended December 31, 2016 2015 2014 Domestic $ $ $ Foreign Total $ $ $ |
Summary of components of the income tax provision charged to operations | Year Ended December 31, 2016 2015 2014 Current: Federal $ $ $ State Foreign Deferred: Federal State Foreign Total $ $ $ |
Schedule of net deferred tax assets (liabilities) | At December 31, 2016 2015 Deferred revenue $ $ Prepaid expenses and accruals Deferred rent and lease incentives Net operating loss and tax credit carryforwards Property and equipment and intangible assets Stock-based compensation expense Investment in ERS, LLC — Convertible notes Other Total deferred tax assets Less valuation allowance Net deferred tax assets (liabilities) $ $ |
Summary of expected tax provision | Year Ended December 31, 2016 2015 2014 Tax provision, at U.S. federal statutory tax rate $ $ $ State income tax, net of federal tax provision Effect of permanent items Effects of return to provision adjustment Change in valuation allowance Capital loss write-off due to carryforward period expiration — — Effect of change in federal and state income tax rate Uncertain tax positions Research and development credits Federal and state NOL adjustments net of valuation allowance impact — — Other Income tax provision $ $ $ |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefit | Year Ended December 31, 2016 2015 2014 Unrecognized tax benefits balance at beginning of year $ $ $ Additions based on tax positions related to the current year Additions based on tax positions related to prior years — Additions based on tax positions for acquired entities — — Reductions for settlements with taxing authorities — Reductions for lapses of statute of limitations Unrecognized tax benefits balance at end of year $ $ $ |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt | |
Schedule of outstanding debt obligations | At December 31, 2016 2015 Convertible Notes $ $ Unaccreted discount on Convertible Notes Unamortized issuance costs on Convertible Notes $ $ Term Notes $ $ Unamortized issuance costs on Term Notes $ $ |
Schedule of interest expense | Year Ended December 31, 2016 2015 2014 Coupon interest $ $ $ Amortization of issuance costs Accretion of debt discount Interest on credit agreement — Undrawn and other fees $ $ $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Schedule of stock-based compensation expense | Year Ended December 31, 2016 2015 2014 Stock-based compensation expense $ $ $ Tax effect on stock-based compensation expense Net effect on income $ $ $ |
Schedule of weighted average assumptions used to value options granted | At December 31, 2016 2015 2014 Grant date fair value of options $ $ $ Volatility % % % Risk-free interest rate % % % Dividend yield % % % Expected term (in years) |
Summary of option activity under the Company's plans | Weighted-Average Weighted- Remaining Average Contractual Life Aggregate Options Exercise Price (Years) Intrinsic Value Outstanding as of December 31, 2013 $ $ Granted Exercised Forfeited Outstanding as of December 31, 2014 Granted Exercised Forfeited Outstanding as of December 31, 2015 Granted Exercised Forfeited Outstanding as of December 31, 2016 Options exercisable |
Schedule of other information | Year Ended December 31, 2016 2015 2014 Total intrinsic value of options exercised $ $ $ Cash received from exercises of stock options Cash received from issuance of restricted stock |
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 Outstanding as of December 31, 2013 Granted Vested Forfeited Outstanding as of December 31, 2014 Granted Vested Forfeited Outstanding as of December 31, 2015 Granted Vested Forfeited Outstanding as of December 31, 2016 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Net Income (Loss) 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, 2016 2015 2014 Basic income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ $ $ Basic number of weighted-average shares outstanding Basic $ $ $ Diluted income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc $ $ $ Basic number of weighted-average shares outstanding Effect of dilutive shares: Options to purchase common stock — Unvested restricted stock units — Diluted number of weighted-average shares outstanding Diluted $ $ $ |
Schedule of anti-dilutive securities excluded from computation of diluted net income per share | At December 31, 2016 2015 2014 Options to purchase common stock — Unvested restricted stock units Ungranted unvested restricted stock units related to Upside — — Convertible Notes Total |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Schedule of future minimum lease commitments under operating leases | Years ending December 31: 2017 $ 2018 2019 2020 2021 Thereafter Total $ |
Schedule of rent expense for all operating leases | Year Ended December 31, 2016 2015 2014 Rent expense $ $ $ |
Major Customers (Tables)
Major Customers (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Major Customers | |
Summary of revenues from major customers | Year Ended December 31, 2016 2015 2014 Fidelity % % % |
Benefit Plan (Tables)
Benefit Plan (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Benefit Plan | |
Schedule of voluntary employer matching contributions | Year Ended December 31, 2016 2015 2014 Voluntary employer matching contributions $ $ $ |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Schedule of revenue by segment | Year Ended December 31, 2016 2015 2014 Revenue: Envestnet Assets under management or administration $ $ $ Subscription and licensing Professional services and other Total Envestnet segment revenues Envestnet | Yodlee Subscription and licensing — Professional services and other — Total Envestnet | Yodlee segment revenues — Consolidated revenue $ $ $ |
Schedule of income from operations by segment | Year Ended December 31, 2016 2015 2014 Envestnet $ $ $ Envestnet | Yodlee — Total segment income from operations Nonsegment operating expenses Interest expense, net Other income (expense), net Consolidated income (loss) before income taxes Income tax provision Consolidated net income (loss) Add: Net loss attributable to non-controlling interest — — Consolidated net income (loss) attributable to Envestnet, Inc. $ $ $ |
Summary of consolidated total assets, consolidated depreciation and amortization and consolidated capital expenditures | At December 31, 2016 2015 Segment assets: Envestnet $ $ Envestnet | Yodlee Consolidated total assets $ $ Year Ended December 31, 2016 2015 2014 Segment depreciation and amortization: Envestnet $ $ $ Envestnet | Yodlee — Consolidated depreciation and amortization $ $ $ Year Ended December 31, 2016 2015 2014 Segment capital expenditures: Envestnet $ $ $ Envestnet | Yodlee — Consolidated capital expenditures $ $ $ |
Geographical Information (Table
Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Geographical Information | |
Schedule of revenue by geography | Year Ended December 31, 2016 2015 2014 United States $ $ $ International (1) Total $ $ $ (1) No foreign country accounted for more than 10% of total revenue. |
Schedule of property, plant, and equipment, net by geographic area | At December 31, 2016 2015 United States $ $ India Other Total $ $ |
Derivative Financial Instrume51
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Financial Instruments | |
Schedule of derivative instruments measured at fair value and their classification on the consolidated balance sheets | At December 31, 2016 At December 31, 2015 Notional Fair Notional Fair Amount Value Amount Value Derivative instruments included in accrued liabilities: Derivatives designated as hedging instruments $ — $ — $ $ Derivatives not designated as hedging instruments — — Total $ — $ — $ $ |
Quarterly Financial Data (Una52
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data (Unaudited) | |
Schedule of quarterly results | 2016 First Second Third Fourth Total revenues $ $ $ $ Loss from operations Net loss attributable to Envestnet, Inc. Net loss per share Basic* Diluted* 2015 First Second Third Fourth Total revenues $ $ $ $ Income (loss) from operations Net income (loss) attributable to Envestnet, Inc. Net income (loss) per share Basic* Diluted* * |
Organization and Description 53
Organization and Description of Business (Details) | 12 Months Ended |
Dec. 31, 2016stateitemproduct | |
Number of RIAs | item | 4 |
Number of states with which the broker-dealer is registered | state | 50 |
Envestnet Enterprise | |
Number of investment products | 17,000 |
Envestnet Portfolio Management Consultants (“PMC”) | |
Number of investment products | 4,000 |
Summary of Significant Accoun54
Summary of Significant Accounting Policies (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Aug. 31, 2016shares | May 31, 2016shares | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Significant accounting policies | |||||||||||||
Estimated period of customer relationship | 5 years | ||||||||||||
Cost of revenues | |||||||||||||
Assets under management or administration | $ 160,842 | $ 152,573 | $ 144,353 | ||||||||||
Subscription and licensing | 16,113 | 7,785 | 4,551 | ||||||||||
Professional services and other | 3,635 | 951 | 1,163 | ||||||||||
Total | 180,590 | 161,309 | 150,067 | ||||||||||
Changes in allowance for doubtful accounts | |||||||||||||
Balance, beginning of year | $ 221 | $ 76 | 221 | 76 | 203 | ||||||||
Add: Provisions for doubtful accounts | 1,122 | 176 | 15 | ||||||||||
Less: Write-offs | (1,101) | (31) | (142) | ||||||||||
Balance, end of year | $ 242 | $ 221 | $ 242 | 221 | 76 | ||||||||
Number of segments | item | 2 | ||||||||||||
Restricted certificate of deposit | 148 | $ 148 | |||||||||||
Impairment to investments | 734 | 0 | 0 | ||||||||||
Impairments of internally developed software | $ 0 | 0 | 0 | ||||||||||
Number of reporting units | item | 2 | ||||||||||||
Goodwill impairment charges | $ 0 | 0 | 0 | ||||||||||
Intangible asset impairment charges | 0 | 0 | 0 | ||||||||||
Net sales and use taxes | 6,229 | 6,229 | |||||||||||
Net sales and use taxes, accrued interest | 914 | 914 | |||||||||||
Sales and use tax liability | 10,108 | 10,108 | |||||||||||
Sales and excise tax receivable | 3,879 | 3,879 | |||||||||||
Total revenues | 155,480 | $ 149,155 | $ 141,708 | $ 131,821 | $ 118,435 | $ 103,367 | $ 102,663 | $ 96,454 | 578,164 | 420,919 | 348,748 | ||
Advertising costs | 704 | 645 | 675 | ||||||||||
Technology development expenses | 29,500 | $ 10,300 | $ 8,200 | ||||||||||
Restricted Stock Units | |||||||||||||
Changes in allowance for doubtful accounts | |||||||||||||
Granted (in shares) | shares | 125,000 | 205,000 | |||||||||||
Prepaid expense and other current assets | |||||||||||||
Changes in allowance for doubtful accounts | |||||||||||||
Restricted cash, current portion | 429 | 429 | |||||||||||
Sales and excise tax receivable | 3,879 | 3,879 | |||||||||||
Accrued Expenses and Other Liabilities | |||||||||||||
Changes in allowance for doubtful accounts | |||||||||||||
Sales and use tax liability | 10,108 | 10,108 | |||||||||||
Other non-current assets | |||||||||||||
Changes in allowance for doubtful accounts | |||||||||||||
Restricted cash, current portion | 1,571 | 1,571 | |||||||||||
FinaConnect, Inc. | |||||||||||||
Changes in allowance for doubtful accounts | |||||||||||||
Restricted certificate of deposit | $ 2,000 | $ 2,000 |
Summary of Significant Accoun55
Summary of Significant Accounting Policies (Notes) (Details) | Nov. 19, 2015USD ($) | Aug. 31, 2016person | May 31, 2016person | Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($)contract | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 15, 2014USD ($) | Jul. 09, 2014 | Feb. 01, 2014 |
Convertible Notes | ||||||||||
General and Administrative Expenses | $ 115,435,000 | $ 72,900,000 | $ 54,321,000 | |||||||
Payment of term notes | $ 8,000,000 | 10,000,000 | ||||||||
Ownership interest (as a percent) | 50.00% | |||||||||
Derivative contracts outstanding | contract | 0 | |||||||||
Net loss attributable to noncontrolling interest | $ (195,000) | |||||||||
General and administration | ||||||||||
Convertible Notes | ||||||||||
Restructuring charges | $ 596,000 | |||||||||
Executive Officer | ||||||||||
Convertible Notes | ||||||||||
Number of persons received restricted stock unit awards | person | 4 | 3 | ||||||||
Scenario, Adjustment | ||||||||||
Convertible Notes | ||||||||||
Restructuring charges | (673,000) | |||||||||
General and Administrative Expenses | 673,000 | |||||||||
Convertible Notes | ||||||||||
Convertible Notes | ||||||||||
Face amount | $ 172,500,000 | $ 172,500,000 | 172,500,000 | $ 172,500,000 | ||||||
Face amount | $ 172,500,000 | |||||||||
Interest rate (as a percent) | 1.75% | 1.75% | ||||||||
Term Notes | ||||||||||
Convertible Notes | ||||||||||
Face amount | $ 160,000,000 | 150,000,000 | $ 142,000,000 | 150,000,000 | ||||||
Face amount | 160,000,000 | |||||||||
Payment of term notes | $ 18,000,000 | |||||||||
Periodic payment | $ 2,000,000 | |||||||||
Credit Agreement | ||||||||||
Convertible Notes | ||||||||||
Debt Instrument Covenant Prepayment Term Following Current Fiscal Year End | 90 days | |||||||||
Debt Instrument, Debt Default, Amount | $ 31,862,000 | |||||||||
Debt Instrument Covenant Leverage Ratio | 2.00% | |||||||||
ERS | ||||||||||
Convertible Notes | ||||||||||
Ownership interest (as a percent) | 64.50% | |||||||||
Net loss attributable to noncontrolling interest | $ 0 | $ 0 | ||||||||
Klein | ERS | ||||||||||
Convertible Notes | ||||||||||
Ownership interest (as a percent) | 80.80% | 11.70% |
Summary of Significant Accoun56
Summary of Significant Accounting Policies (Recent Accounting Pronouncement) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Current assets | $ 113,084 | $ 111,713 |
Current liabilities | $ 155,954 | 117,521 |
Non-current deferred tax assets | 2,688 | |
ASU-Interest Imputation | Scenario, Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Current assets | (1,936) | |
Current liabilities | (1,936) | |
Noncurrent assets | (7,380) | |
Noncurrent liabilities | $ (7,380) |
Business Acquisitions (Details)
Business Acquisitions (Details) $ / shares in Units, $ in Thousands | Oct. 03, 2016USD ($) | Feb. 01, 2016USD ($) | Nov. 19, 2015USD ($)itemshares | Nov. 17, 2015$ / sharesshares | Sep. 02, 2015USD ($) | Sep. 01, 2015USD ($)$ / shares | Aug. 30, 2015USD ($) | May 06, 2015USD ($)$ / sharesshares | Feb. 24, 2015USD ($) | Oct. 01, 2014USD ($) | Jul. 09, 2014USD ($) | Jul. 01, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($) | Feb. 01, 2014 |
Consideration transferred in acquisition | |||||||||||||||||||
Payments of contingent consideration | $ 3,729 | $ 7,219 | $ 6,000 | ||||||||||||||||
Attribution of the fair market value of replacement awards | 4,318 | ||||||||||||||||||
Fair market value adjustment on contingent consideration | $ 1,588 | (4,153) | (1,432) | ||||||||||||||||
Issuance of redeemable units in ERS | 900 | 1,500 | |||||||||||||||||
Ownership interest (as a percent) | 50.00% | ||||||||||||||||||
Acquisitions | |||||||||||||||||||
Share-based compensation | $ 33,276 | 15,161 | 11,423 | ||||||||||||||||
Acquisition related costs | 3,343 | 9,792 | 2,430 | ||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | |||||||||||||||||||
Goodwill | $ 421,273 | $ 104,976 | $ 104,976 | $ 431,936 | 421,273 | 104,976 | |||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 9,800 | ||||||||||||||||||
Maximum number of stock options and restricted stock available for future issuance | shares | 1,336,350 | ||||||||||||||||||
Contingent consideration issued in business acquisitions | 1,500 | 2,800 | 2,800 | $ 4,868 | 1,500 | 2,800 | |||||||||||||
Pro forma financial information | |||||||||||||||||||
Accretion on contingent consideration | 150 | 888 | 1,472 | ||||||||||||||||
Acquired intangible asset amortization | 45,515 | 17,636 | $ 10,642 | ||||||||||||||||
Revenues | 517,891 | ||||||||||||||||||
Net loss | $ (54,915) | ||||||||||||||||||
Basic (in dollars per share) | $ / shares | $ (1.27) | ||||||||||||||||||
Diluted (in dollars per share) | $ / shares | $ (1.27) | ||||||||||||||||||
Customer lists | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 8,300 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 12 years | ||||||||||||||||||
Proprietary technology | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 1,000 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 4 years | ||||||||||||||||||
Trade names and domains | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 500 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | ||||||||||||||||||
FinaConnect, Inc. | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Cash consideration | $ 6,425 | ||||||||||||||||||
Cash acquired | (1) | ||||||||||||||||||
Contingent consideration liability | 1,929 | 2,286 | |||||||||||||||||
Total | 8,622 | ||||||||||||||||||
Working capital adjustment | 269 | ||||||||||||||||||
Fair market value adjustment on contingent consideration | 357 | ||||||||||||||||||
Acquisitions | |||||||||||||||||||
Upfront cash consideration paid | $ 6,425 | ||||||||||||||||||
Multiplier for contingent consideration based on acquiree's incremental revenue | 4 | ||||||||||||||||||
Acquisition related costs | 116 | ||||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | |||||||||||||||||||
Identifiable intangible assets | $ 3,800 | ||||||||||||||||||
Goodwill | 4,792 | ||||||||||||||||||
Total liabilities assumed | (400) | ||||||||||||||||||
Total net assets acquired | 8,622 | ||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 3,800 | ||||||||||||||||||
Contingent consideration period | 2 years | ||||||||||||||||||
Contingent consideration, maximum | $ 3,500 | ||||||||||||||||||
FinaConnect, Inc. | Customer lists | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 2,800 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 12 years | ||||||||||||||||||
FinaConnect, Inc. | Proprietary technology | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 900 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | ||||||||||||||||||
FinaConnect, Inc. | Trade names and domains | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 100 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 2 years | ||||||||||||||||||
Castle Rock Innovations, Inc. | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Cash consideration | $ 6,190 | ||||||||||||||||||
Cash acquired | (320) | ||||||||||||||||||
Contingent consideration liability | 1,500 | ||||||||||||||||||
Total | 7,370 | ||||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | |||||||||||||||||||
Identifiable intangible assets | 3,900 | ||||||||||||||||||
Goodwill | 4,581 | ||||||||||||||||||
Total liabilities assumed | (1,366) | ||||||||||||||||||
Total net assets acquired | 7,370 | ||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | 3,900 | ||||||||||||||||||
Pro forma financial information | |||||||||||||||||||
Revenue since acquisition | $ 1,011 | ||||||||||||||||||
Net income (loss) since acquisition | 109 | ||||||||||||||||||
Acquired intangible asset amortization | 178 | ||||||||||||||||||
Business acquisition costs | 170 | 110 | 170 | ||||||||||||||||
Castle Rock Innovations, Inc. | Customer lists | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 3,000 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 12 years | ||||||||||||||||||
Castle Rock Innovations, Inc. | Proprietary technology | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 800 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | ||||||||||||||||||
Castle Rock Innovations, Inc. | Trade names and domains | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 100 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 4 years | ||||||||||||||||||
Yodlee, Inc | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Cash consideration | $ 375,658 | ||||||||||||||||||
Cash acquired | (63,234) | ||||||||||||||||||
Contingent consideration liability | 10,061 | ||||||||||||||||||
Total | 503,264 | ||||||||||||||||||
Stock consideration | 186,522 | ||||||||||||||||||
Attribution of the fair market value of replacement awards | $ 4,318 | ||||||||||||||||||
Equity value issued (in dollars per share) | $ / shares | $ 17.49 | ||||||||||||||||||
Cash value issued (in dollars per share) | $ / shares | $ 11.51 | ||||||||||||||||||
Exercised statutory appraisal rights (in shares) | shares | 577,829 | ||||||||||||||||||
Acquisitions | |||||||||||||||||||
Consideration issued (in shares) | shares | 5,974,000 | 5,974,000 | |||||||||||||||||
Envestnet common stock per acquiree share (in shares) | shares | 0.1889 | ||||||||||||||||||
Number of full trading days prior to closing date of merger, on which weighted average of sales price per share is determined | 10 days | ||||||||||||||||||
Number of patents awarded | item | 78 | ||||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | |||||||||||||||||||
Accounts receivable | $ 16,882 | ||||||||||||||||||
Prepaid expenses and other current assets | 3,507 | ||||||||||||||||||
Property and equipment, net | 13,800 | ||||||||||||||||||
Other non-current assets | 1,959 | ||||||||||||||||||
Identifiable intangible assets | 244,000 | ||||||||||||||||||
Goodwill | 282,429 | ||||||||||||||||||
Total assets acquired | 562,577 | ||||||||||||||||||
Accounts payable | (2,424) | ||||||||||||||||||
Accrued Expenses | (28,173) | ||||||||||||||||||
Capital lease obligations | (1,527) | ||||||||||||||||||
FIN 48 liability | (5,450) | ||||||||||||||||||
Deferred tax liability | (16,693) | ||||||||||||||||||
Deferred revenue | (4,100) | ||||||||||||||||||
Other long term liabilities | (946) | ||||||||||||||||||
Total liabilities assumed | (59,313) | ||||||||||||||||||
Total net assets acquired | 503,264 | ||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | 244,000 | ||||||||||||||||||
Pro forma financial information | |||||||||||||||||||
Revenue since acquisition | 14,081 | ||||||||||||||||||
Net income (loss) since acquisition | (5,963) | ||||||||||||||||||
Acquired intangible asset amortization | 3,953 | ||||||||||||||||||
Business acquisition costs | 6,624 | 2,186 | 6,624 | ||||||||||||||||
Yodlee, Inc | Customer lists | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 177 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 15 years | ||||||||||||||||||
Yodlee, Inc | Proprietary technology | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 35 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | ||||||||||||||||||
Yodlee, Inc | Trade names and domains | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 21 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 7 years | ||||||||||||||||||
Yodlee, Inc | Minimum | |||||||||||||||||||
Acquisitions | |||||||||||||||||||
Number of paid subscribers | item | 22,000,000 | ||||||||||||||||||
Number of serviced financial institutions | item | 1,000 | ||||||||||||||||||
Number of data sources | item | 15,000 | ||||||||||||||||||
Finance Logix | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Cash consideration | $ 20,595 | ||||||||||||||||||
Promissory note | 3,000 | ||||||||||||||||||
Cash acquired | (909) | ||||||||||||||||||
Purchase consideration liability | 3,000 | ||||||||||||||||||
Total | 31,616 | ||||||||||||||||||
Stock consideration | 8,930 | ||||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | |||||||||||||||||||
Identifiable intangible assets | 9,800 | ||||||||||||||||||
Goodwill | 23,492 | ||||||||||||||||||
Total liabilities assumed | (2,628) | ||||||||||||||||||
Total net assets acquired | $ 31,616 | ||||||||||||||||||
Intangible assets | |||||||||||||||||||
Contingent consideration period | 3 years | ||||||||||||||||||
Pro forma financial information | |||||||||||||||||||
Revenue since acquisition | 1,892 | ||||||||||||||||||
Net income (loss) since acquisition | (999) | ||||||||||||||||||
Acquired intangible asset amortization | 974 | ||||||||||||||||||
Business acquisition costs | 465 | 548 | 465 | ||||||||||||||||
Finance Logix | Stock Options | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Stock consideration | $ 2,542 | ||||||||||||||||||
Equity value issued (in dollars per share) | $ / shares | $ 52.67 | ||||||||||||||||||
Acquisitions | |||||||||||||||||||
Consideration issued (in shares) | shares | 123,410 | ||||||||||||||||||
Finance Logix | Common Stock | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Stock consideration | $ 6,388 | ||||||||||||||||||
Acquisitions | |||||||||||||||||||
Consideration issued (in shares) | shares | 123,410 | ||||||||||||||||||
Wheelhouse Analytics, LLC | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Cash consideration | $ 13,299 | ||||||||||||||||||
Promissory note | 887 | ||||||||||||||||||
Cash acquired | (80) | ||||||||||||||||||
Contingent consideration liability | 2,582 | ||||||||||||||||||
Purchase consideration liability | 887 | ||||||||||||||||||
Total | 16,798 | ||||||||||||||||||
Working capital adjustment | 110 | ||||||||||||||||||
Acquisitions | |||||||||||||||||||
Acquisition related costs | 383 | ||||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | |||||||||||||||||||
Identifiable intangible assets | 7,300 | ||||||||||||||||||
Goodwill | 10,558 | ||||||||||||||||||
Total liabilities assumed | (1,459) | ||||||||||||||||||
Total net assets acquired | 16,798 | ||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | 7,300 | ||||||||||||||||||
Contingent consideration, maximum | 4,000 | ||||||||||||||||||
Pro forma financial information | |||||||||||||||||||
Revenue since acquisition | 557 | ||||||||||||||||||
Net income (loss) since acquisition | 799 | ||||||||||||||||||
Acquired intangible asset amortization | 240 | ||||||||||||||||||
Wheelhouse Analytics, LLC | Customer lists | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 4,100 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 12 years | ||||||||||||||||||
Wheelhouse Analytics, LLC | Proprietary technology | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 3,000 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | ||||||||||||||||||
Wheelhouse Analytics, LLC | Trade names and domains | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 200 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | ||||||||||||||||||
Upside Holdings, Inc. | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Cash consideration | $ 2,040 | ||||||||||||||||||
Promissory note | 615 | ||||||||||||||||||
Cash acquired | (14) | ||||||||||||||||||
Purchase consideration liability | 615 | ||||||||||||||||||
Total | 2,641 | ||||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | |||||||||||||||||||
Identifiable intangible assets | 1,450 | ||||||||||||||||||
Goodwill | 1,507 | ||||||||||||||||||
Total liabilities assumed | (404) | ||||||||||||||||||
Total net assets acquired | $ 2,641 | ||||||||||||||||||
Pro forma financial information | |||||||||||||||||||
Business acquisition costs | 230 | 230 | |||||||||||||||||
Upside Holdings, Inc. | Restricted stock with performance and subsequent service conditions | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Annual revenue target for contingent consideration (as a percent) | 100.00% | ||||||||||||||||||
Acquisitions | |||||||||||||||||||
Share-based compensation | 0 | ||||||||||||||||||
Intangible assets | |||||||||||||||||||
Unvested restricted stock, service condition period | 2 years | ||||||||||||||||||
Upside Holdings, Inc. | Proprietary technology | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 1,450 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 4 years | ||||||||||||||||||
Klein | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Contingent consideration liability | 2,160 | ||||||||||||||||||
Payments of contingent consideration | 1,175 | ||||||||||||||||||
Fair market value adjustment on contingent consideration | 675 | 1,231 | |||||||||||||||||
Additional consideration | 1,825 | ||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 2,900 | ||||||||||||||||||
Pro forma financial information | |||||||||||||||||||
Revenue since acquisition | 468 | ||||||||||||||||||
Net income (loss) since acquisition | (926) | ||||||||||||||||||
Accretion on contingent consideration | 75 | $ 117 | |||||||||||||||||
Acquired intangible asset amortization | $ 286 | ||||||||||||||||||
Klein | Customer lists | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 2,200 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 10 years | ||||||||||||||||||
Klein | Proprietary technology | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 700 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 3 years | ||||||||||||||||||
Klein | ERS | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Cash consideration | $ 1,288 | ||||||||||||||||||
Promissory note | 1,500 | ||||||||||||||||||
Contingent consideration liability | 2,800 | ||||||||||||||||||
Purchase consideration liability | 1,500 | ||||||||||||||||||
Total | $ 5,588 | ||||||||||||||||||
Payments of contingent consideration | $ 230 | ||||||||||||||||||
Placemark | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Cash consideration | $ 66,000 | ||||||||||||||||||
Cash acquired | (8,419) | ||||||||||||||||||
Receivable from working capital settlement | 701 | ||||||||||||||||||
Total | 58,282 | ||||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | |||||||||||||||||||
Identifiable intangible assets | 30,000 | ||||||||||||||||||
Goodwill | 27,077 | ||||||||||||||||||
Total liabilities assumed | (3,118) | ||||||||||||||||||
Total net assets acquired | 58,282 | ||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | 30,000 | ||||||||||||||||||
Pro forma financial information | |||||||||||||||||||
Revenue since acquisition | 6,157 | ||||||||||||||||||
Net income (loss) since acquisition | 209 | ||||||||||||||||||
Acquired intangible asset amortization | $ 1,254 | ||||||||||||||||||
Placemark | Customer lists | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 24,000 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 11 years | ||||||||||||||||||
Placemark | Proprietary technology | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 5,000 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | ||||||||||||||||||
Placemark | Trade names and domains | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Intangible assets acquired, Amount | $ 1,000 | ||||||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | ||||||||||||||||||
One | Castle Rock Innovations, Inc. | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Annual revenue target for contingent consideration (as a percent) | 40.00% | ||||||||||||||||||
Revenue target for contingent consideration adjustment | $ 100 | ||||||||||||||||||
One | Castle Rock Innovations, Inc. | ERS | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Annual contingent consideration payment amount | $ 805 | ||||||||||||||||||
One | Finance Logix | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Annual revenue target for contingent consideration | $ 5,000 | ||||||||||||||||||
One | Upside Holdings, Inc. | Restricted stock with performance and subsequent service conditions | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Maximum number of stock options and restricted stock available for future issuance | shares | 22,064 | ||||||||||||||||||
Two | Castle Rock Innovations, Inc. | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Annual revenue target for contingent consideration (as a percent) | 35.00% | ||||||||||||||||||
Revenue target for contingent consideration adjustment | $ 100 | ||||||||||||||||||
Two | Castle Rock Innovations, Inc. | ERS | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Annual contingent consideration payment amount | $ 445 | ||||||||||||||||||
Two | Finance Logix | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Annual revenue target for contingent consideration | 10,000 | ||||||||||||||||||
Two | Upside Holdings, Inc. | Restricted stock with performance and subsequent service conditions | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Maximum number of stock options and restricted stock available for future issuance | shares | 44,128 | ||||||||||||||||||
Three | Castle Rock Innovations, Inc. | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Annual revenue target for contingent consideration (as a percent) | 30.00% | ||||||||||||||||||
Revenue target for contingent consideration adjustment | $ 100 | ||||||||||||||||||
Three | Castle Rock Innovations, Inc. | ERS | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Annual contingent consideration payment amount | $ 1,250 | ||||||||||||||||||
Three | Finance Logix | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Annual revenue target for contingent consideration | $ 16,000 | ||||||||||||||||||
Three | Upside Holdings, Inc. | Restricted stock with performance and subsequent service conditions | |||||||||||||||||||
Intangible assets | |||||||||||||||||||
Maximum number of stock options and restricted stock available for future issuance | shares | 66,192 | ||||||||||||||||||
ERS | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Ownership interest (as a percent) | 64.50% | ||||||||||||||||||
ERS | Castle Rock Innovations, Inc. | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Equity value issued (in dollars per share) | $ / shares | $ 6.5 | ||||||||||||||||||
Issuance of redeemable units in ERS | $ 900 | ||||||||||||||||||
Period to repurchase issued units in the subscription agreement | 36 months | ||||||||||||||||||
ERS | Klein | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Total | $ 1,500 | ||||||||||||||||||
Discount rate (as a percent) | 9.00% | ||||||||||||||||||
Payments of contingent consideration | $ 1,500 | ||||||||||||||||||
Ownership interest (as a percent) | 11.70% | 80.80% | |||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | |||||||||||||||||||
Identifiable intangible assets | $ 2,900 | ||||||||||||||||||
Goodwill | 3,031 | ||||||||||||||||||
Total liabilities assumed | (396) | ||||||||||||||||||
Total net assets acquired | $ 5,588 | ||||||||||||||||||
Intangible assets | |||||||||||||||||||
Contingent consideration period | 3 years | ||||||||||||||||||
ERS | Klein | Minimum | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Period to repurchase issued units in the subscription agreement | 18 months | ||||||||||||||||||
Intangible assets | |||||||||||||||||||
Contingent consideration issued in business acquisitions | $ 1,175 | ||||||||||||||||||
ERS | Klein | Maximum | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Period to repurchase issued units in the subscription agreement | 36 months | ||||||||||||||||||
Level 3 | Castle Rock Innovations, Inc. | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Contingent consideration liability | $ 1,500 | ||||||||||||||||||
Level 3 | ERS | Klein | |||||||||||||||||||
Consideration transferred in acquisition | |||||||||||||||||||
Contingent consideration undiscounted | $ 3,520 |
Business Acquisitions (Yodlee)
Business Acquisitions (Yodlee) (Details) $ / shares in Units, $ in Thousands | Oct. 03, 2016USD ($) | Feb. 01, 2016USD ($) | Nov. 19, 2015USD ($)itemshares | Nov. 17, 2015USD ($)$ / sharesshares | Aug. 30, 2015USD ($) | May 06, 2015USD ($) | Feb. 24, 2015USD ($) | Oct. 01, 2014USD ($) | Jul. 09, 2014USD ($) | Jul. 01, 2014USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($) | Sep. 01, 2015$ / shares |
Business acquisitions | ||||||||||||||||
Acquisition of businesses, net of cash acquired | $ 31,613 | $ 328,305 | $ 59,570 | |||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Attribution of the fair market value of replacement awards | 4,318 | |||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Goodwill | $ 104,976 | $ 104,976 | 431,936 | 421,273 | 104,976 | |||||||||||
Acquisition related costs | 3,343 | 9,792 | 2,430 | |||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 9,800 | |||||||||||||||
Pro forma financial information | ||||||||||||||||
Acquired intangible asset amortization | 45,515 | 17,636 | 10,642 | |||||||||||||
Accretion on contingent consideration | 150 | 888 | 1,472 | |||||||||||||
Revenues | 517,891 | |||||||||||||||
Net income (loss) | $ (54,915) | |||||||||||||||
Basic (in dollars per share) | $ / shares | $ (1.27) | |||||||||||||||
Diluted (in dollars per share) | $ / shares | $ (1.27) | |||||||||||||||
Customer lists | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 8,300 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 12 years | |||||||||||||||
Proprietary technology | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 1,000 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 4 years | |||||||||||||||
Trade names and domains | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 500 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | |||||||||||||||
Yodlee, Inc | ||||||||||||||||
Business acquisitions | ||||||||||||||||
Number of patents awarded | item | 78 | |||||||||||||||
Cash value issued (in dollars per share) | $ / shares | $ 11.51 | |||||||||||||||
Envestnet common stock per acquiree share (in shares) | shares | 0.1889 | |||||||||||||||
Number of full trading days prior to closing date of merger, on which weighted average of sales price per share is determined | 10 days | |||||||||||||||
Equity value issued (in dollars per share) | $ / shares | $ 17.49 | |||||||||||||||
Acquisition of businesses, net of cash acquired | $ 375,658 | |||||||||||||||
Consideration issued (in shares) | shares | 5,974,000 | 5,974,000 | ||||||||||||||
Exercised statutory appraisal rights (in shares) | shares | 577,829 | |||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Cash consideration | $ 375,658 | |||||||||||||||
Stock consideration | 186,522 | |||||||||||||||
Attribution of the fair market value of replacement awards | 4,318 | |||||||||||||||
Cash acquired | (63,234) | |||||||||||||||
Total | 503,264 | |||||||||||||||
Contingent consideration liability | $ 10,061 | |||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Total liabilities assumed | (59,313) | |||||||||||||||
Identifiable intangible assets | 244,000 | |||||||||||||||
Goodwill | 282,429 | |||||||||||||||
Total net assets acquired | 503,264 | |||||||||||||||
Purchase accounting adjustment | (3,620) | |||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 244,000 | |||||||||||||||
Pro forma financial information | ||||||||||||||||
Revenue since acquisition | 14,081 | |||||||||||||||
Net income (loss) since acquisition | (5,963) | |||||||||||||||
Acquired intangible asset amortization | 3,953 | |||||||||||||||
Business acquisition costs | 2,186 | 6,624 | ||||||||||||||
Yodlee, Inc | Replacement Awards | ||||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Granted (in shares) | shares | 1,052,000 | |||||||||||||||
Yodlee, Inc | Customer lists | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 177 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 15 years | |||||||||||||||
Yodlee, Inc | Backlog | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 11 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 4 years | |||||||||||||||
Yodlee, Inc | Proprietary technology | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 35 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | |||||||||||||||
Yodlee, Inc | Trade names and domains | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 21 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 7 years | |||||||||||||||
Yodlee, Inc | Minimum | ||||||||||||||||
Business acquisitions | ||||||||||||||||
Number of paid subscribers | item | 22,000,000 | |||||||||||||||
Number of serviced financial institutions | item | 1,000 | |||||||||||||||
Number of data sources | item | 15,000 | |||||||||||||||
FinaConnect, Inc. | ||||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Cash consideration | $ 6,425 | |||||||||||||||
Cash acquired | (1) | |||||||||||||||
Total | 8,622 | |||||||||||||||
Contingent consideration liability | 1,929 | 2,286 | ||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Total tangible assets acquired | 430 | |||||||||||||||
Total liabilities assumed | (400) | |||||||||||||||
Identifiable intangible assets | 3,800 | |||||||||||||||
Goodwill | 4,792 | |||||||||||||||
Total net assets acquired | 8,622 | |||||||||||||||
Acquisition related costs | 116 | |||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | 3,800 | |||||||||||||||
FinaConnect, Inc. | Customer lists | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 2,800 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 12 years | |||||||||||||||
FinaConnect, Inc. | Proprietary technology | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 900 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | |||||||||||||||
FinaConnect, Inc. | Trade names and domains | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 100 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 2 years | |||||||||||||||
Wheelhouse Analytics, LLC | ||||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Cash consideration | $ 13,299 | |||||||||||||||
Cash acquired | (80) | |||||||||||||||
Total | 16,798 | |||||||||||||||
Contingent consideration liability | 2,582 | |||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Total tangible assets acquired | 399 | |||||||||||||||
Total liabilities assumed | (1,459) | |||||||||||||||
Identifiable intangible assets | 7,300 | |||||||||||||||
Goodwill | 10,558 | |||||||||||||||
Total net assets acquired | 16,798 | |||||||||||||||
Acquisition related costs | 383 | |||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | 7,300 | |||||||||||||||
Pro forma financial information | ||||||||||||||||
Revenue since acquisition | 557 | |||||||||||||||
Net income (loss) since acquisition | 799 | |||||||||||||||
Acquired intangible asset amortization | 240 | |||||||||||||||
Wheelhouse Analytics, LLC | Customer lists | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 4,100 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 12 years | |||||||||||||||
Wheelhouse Analytics, LLC | Proprietary technology | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 3,000 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | |||||||||||||||
Wheelhouse Analytics, LLC | Trade names and domains | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 200 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | |||||||||||||||
Castle Rock Innovations, Inc. | ||||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Cash consideration | $ 6,190 | |||||||||||||||
Cash acquired | (320) | |||||||||||||||
Total | 7,370 | |||||||||||||||
Contingent consideration liability | 1,500 | |||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Total tangible assets acquired | 255 | |||||||||||||||
Total liabilities assumed | (1,366) | |||||||||||||||
Identifiable intangible assets | 3,900 | |||||||||||||||
Goodwill | 4,581 | |||||||||||||||
Total net assets acquired | 7,370 | |||||||||||||||
Purchase accounting adjustment | (388) | |||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | 3,900 | |||||||||||||||
Pro forma financial information | ||||||||||||||||
Revenue since acquisition | 1,011 | |||||||||||||||
Net income (loss) since acquisition | 109 | |||||||||||||||
Acquired intangible asset amortization | 178 | |||||||||||||||
Business acquisition costs | 110 | 170 | ||||||||||||||
Castle Rock Innovations, Inc. | Customer lists | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 3,000 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 12 years | |||||||||||||||
Castle Rock Innovations, Inc. | Proprietary technology | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 800 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | |||||||||||||||
Castle Rock Innovations, Inc. | Trade names and domains | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 100 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 4 years | |||||||||||||||
Placemark | ||||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Cash consideration | $ 66,000 | |||||||||||||||
Cash acquired | (8,419) | |||||||||||||||
Total | 58,282 | |||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Total tangible assets acquired | 4,323 | |||||||||||||||
Total liabilities assumed | (3,118) | |||||||||||||||
Identifiable intangible assets | 30,000 | |||||||||||||||
Goodwill | 27,077 | |||||||||||||||
Total net assets acquired | 58,282 | |||||||||||||||
Purchase accounting adjustment | 280 | |||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | 30,000 | |||||||||||||||
Pro forma financial information | ||||||||||||||||
Revenue since acquisition | 6,157 | |||||||||||||||
Net income (loss) since acquisition | 209 | |||||||||||||||
Acquired intangible asset amortization | 1,254 | |||||||||||||||
Placemark | Customer lists | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 24,000 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 11 years | |||||||||||||||
Placemark | Proprietary technology | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 5,000 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | |||||||||||||||
Placemark | Trade names and domains | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 1,000 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 5 years | |||||||||||||||
Upside Holdings, Inc. | ||||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Cash consideration | $ 2,040 | |||||||||||||||
Cash acquired | (14) | |||||||||||||||
Total | 2,641 | |||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Total tangible assets acquired | 88 | |||||||||||||||
Total liabilities assumed | (404) | |||||||||||||||
Identifiable intangible assets | 1,450 | |||||||||||||||
Goodwill | 1,507 | |||||||||||||||
Total net assets acquired | 2,641 | |||||||||||||||
Pro forma financial information | ||||||||||||||||
Business acquisition costs | 230 | |||||||||||||||
Upside Holdings, Inc. | Proprietary technology | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 1,450 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 4 years | |||||||||||||||
Finance Logix | ||||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Cash consideration | $ 20,595 | |||||||||||||||
Stock consideration | 8,930 | |||||||||||||||
Cash acquired | (909) | |||||||||||||||
Total | 31,616 | |||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Total tangible assets acquired | 952 | |||||||||||||||
Total liabilities assumed | (2,628) | |||||||||||||||
Identifiable intangible assets | 9,800 | |||||||||||||||
Goodwill | 23,492 | |||||||||||||||
Total net assets acquired | $ 31,616 | |||||||||||||||
Pro forma financial information | ||||||||||||||||
Revenue since acquisition | 1,892 | |||||||||||||||
Net income (loss) since acquisition | (999) | |||||||||||||||
Acquired intangible asset amortization | 974 | |||||||||||||||
Business acquisition costs | 548 | 465 | ||||||||||||||
Klein | ||||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Contingent consideration liability | 2,160 | |||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 2,900 | |||||||||||||||
Pro forma financial information | ||||||||||||||||
Revenue since acquisition | 468 | |||||||||||||||
Net income (loss) since acquisition | (926) | |||||||||||||||
Acquired intangible asset amortization | 286 | |||||||||||||||
Accretion on contingent consideration | 75 | 117 | ||||||||||||||
Klein | Customer lists | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 2,200 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 10 years | |||||||||||||||
Klein | Proprietary technology | ||||||||||||||||
Intangible assets | ||||||||||||||||
Intangible assets acquired, Amount | $ 700 | |||||||||||||||
Intangible assets acquired, Useful Life In Years | 3 years | |||||||||||||||
Klein | ERS | ||||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Cash consideration | $ 1,288 | |||||||||||||||
Total | 5,588 | |||||||||||||||
Contingent consideration liability | 2,800 | |||||||||||||||
Level 3 | Castle Rock Innovations, Inc. | ||||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Contingent consideration liability | $ 1,500 | |||||||||||||||
Envestnet | ||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Goodwill | $ 104,976 | $ 104,976 | 163,751 | 135,224 | $ 104,976 | |||||||||||
Envestnet | Yodlee, Inc | ||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Purchase accounting adjustment | $ 24,613 | 24,613 | ||||||||||||||
Envestnet | Castle Rock Innovations, Inc. | ||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Purchase accounting adjustment | $ (388) | |||||||||||||||
Envestnet | Placemark | ||||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Purchase accounting adjustment | $ 280 | |||||||||||||||
ERS | Castle Rock Innovations, Inc. | ||||||||||||||||
Business acquisitions | ||||||||||||||||
Equity value issued (in dollars per share) | $ / shares | $ 6.5 | |||||||||||||||
ERS | Klein | ||||||||||||||||
Consideration transferred in acquisition | ||||||||||||||||
Total | $ 1,500 | |||||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||||
Total tangible assets acquired | 53 | |||||||||||||||
Total liabilities assumed | (396) | |||||||||||||||
Identifiable intangible assets | 2,900 | |||||||||||||||
Goodwill | 3,031 | |||||||||||||||
Total net assets acquired | $ 5,588 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property and equipment, cost: | |||
Property and equipment, gross | $ 78,485 | $ 66,061 | |
Less accumulated depreciation and amortization | (45,485) | (37,380) | |
Property and equipment, net | 33,000 | 28,681 | |
Cost written off | 8,123 | 5,944 | |
Accumulated depreciation written off | (7,725) | (5,944) | |
Loss on disposal | 398 | ||
Increase in cost of aquired property and equipment | 3,922 | ||
Depreciation and amortization expense | $ 14,838 | 7,668 | $ 5,910 |
Computer equipment and software | |||
Property and equipment, cost: | |||
Estimated Useful Life | 3 years | ||
Property and equipment, gross | $ 52,921 | 44,470 | |
Cost written off | 6,593 | 5,749 | |
Accumulated depreciation written off | (6,498) | (5,749) | |
Office furniture and fixtures | |||
Property and equipment, cost: | |||
Property and equipment, gross | 6,911 | 5,785 | |
Cost written off | 225 | 106 | |
Accumulated depreciation written off | $ (206) | (106) | |
Office furniture and fixtures | Minimum | |||
Property and equipment, cost: | |||
Estimated Useful Life | 3 years | ||
Office furniture and fixtures | Maximum | |||
Property and equipment, cost: | |||
Estimated Useful Life | 7 years | ||
Other office equipment | |||
Property and equipment, cost: | |||
Property and equipment, gross | $ 1,367 | 683 | |
Cost written off | 1,175 | 68 | |
Accumulated depreciation written off | $ (916) | (68) | |
Other office equipment | Minimum | |||
Property and equipment, cost: | |||
Estimated Useful Life | 3 years | ||
Other office equipment | Maximum | |||
Property and equipment, cost: | |||
Estimated Useful Life | 5 years | ||
Leasehold improvements | |||
Property and equipment, cost: | |||
Property and equipment, gross | $ 17,286 | 15,123 | |
Cost written off | 130 | 21 | |
Accumulated depreciation written off | $ (105) | $ (21) |
Internally Developed Software60
Internally Developed Software (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Internally developed software | $ 33,718 | $ 25,109 | |
Less accumulated amortization | (18,858) | (15,212) | |
Internally developed software, net | 14,860 | 9,897 | |
Amortization expense | $ 3,646 | $ 2,658 | $ 1,920 |
Internally developed software | |||
Estimated Useful Life | 5 years |
Goodwill and Intangible Asset61
Goodwill and Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands | Nov. 19, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Changes in the carrying amount of the Company's goodwill | |||
Balance | $ 421,273 | $ 104,976 | |
Other goodwill adjustments | (679) | ||
Balance | 431,936 | 421,273 | |
Upside Holdings, Inc. | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | 1,507 | ||
Finance Logix | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | 23,492 | ||
Castle Rock Innovations, Inc. | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | 4,969 | ||
Purchase accounting adjustment | (388) | ||
Yodlee, Inc | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | 286,049 | ||
Purchase accounting adjustment | (3,620) | ||
Balance | $ 282,429 | ||
Placemark | |||
Changes in the carrying amount of the Company's goodwill | |||
Purchase accounting adjustment | 280 | ||
FinaConnect, Inc. | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | 4,792 | ||
Wheelhouse Analytics, LLC | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | 10,558 | ||
Envestnet | |||
Changes in the carrying amount of the Company's goodwill | |||
Balance | 135,224 | 104,976 | |
Balance | 163,751 | 135,224 | |
Envestnet | Upside Holdings, Inc. | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | 1,507 | ||
Envestnet | Finance Logix | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | 23,492 | ||
Envestnet | Castle Rock Innovations, Inc. | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | 4,969 | ||
Purchase accounting adjustment | (388) | ||
Envestnet | Yodlee, Inc | |||
Changes in the carrying amount of the Company's goodwill | |||
Purchase accounting adjustment | $ 24,613 | 24,613 | |
Envestnet | Placemark | |||
Changes in the carrying amount of the Company's goodwill | |||
Purchase accounting adjustment | 280 | ||
Envestnet | FinaConnect, Inc. | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | 4,792 | ||
Envestnet | Other | |||
Changes in the carrying amount of the Company's goodwill | |||
Other goodwill adjustments | (490) | ||
Envestnet | Yodlee | |||
Changes in the carrying amount of the Company's goodwill | |||
Balance | 286,049 | ||
Other goodwill adjustments | (189) | ||
Balance | 268,185 | 286,049 | |
Envestnet | Yodlee | Yodlee, Inc | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | $ 286,049 | ||
Purchase accounting adjustment | (28,233) | ||
Envestnet | Yodlee | Wheelhouse Analytics, LLC | |||
Changes in the carrying amount of the Company's goodwill | |||
Acquisition | $ 10,558 |
Goodwill and Intangible Asset62
Goodwill and Intangible Assets (Intangibles) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Components of intangible assets | |||
Gross Carrying Amount | $ 353,267 | $ 339,028 | |
Accumulated Amortization | (87,709) | (46,353) | |
Net Carrying Amount | 265,558 | 292,675 | |
Write-off of fully amortized intangible assets | 4,159 | ||
Amortization expense | 45,515 | 17,636 | $ 10,642 |
Customer lists | |||
Components of intangible assets | |||
Gross Carrying Amount | 259,490 | 257,410 | |
Accumulated Amortization | (54,861) | (33,668) | |
Net Carrying Amount | $ 204,629 | 223,742 | |
Customer lists | Minimum | |||
Components of intangible assets | |||
Estimated Useful Life | 4 years | ||
Customer lists | Maximum | |||
Components of intangible assets | |||
Estimated Useful Life | 15 years | ||
Backlog | |||
Components of intangible assets | |||
Estimated Useful Life | 4 years | ||
Gross Carrying Amount | $ 11,000 | 11,000 | |
Accumulated Amortization | (6,456) | (703) | |
Net Carrying Amount | 4,544 | 10,297 | |
Proprietary technology | |||
Components of intangible assets | |||
Gross Carrying Amount | 57,770 | 53,928 | |
Accumulated Amortization | (20,214) | (9,833) | |
Net Carrying Amount | $ 37,556 | 44,095 | |
Proprietary technology | Minimum | |||
Components of intangible assets | |||
Estimated Useful Life | 2 years | ||
Proprietary technology | Maximum | |||
Components of intangible assets | |||
Estimated Useful Life | 8 years | ||
Trade names and domains | |||
Components of intangible assets | |||
Gross Carrying Amount | $ 25,007 | 16,690 | |
Accumulated Amortization | (6,178) | (2,149) | |
Net Carrying Amount | $ 18,829 | $ 14,541 | |
Trade names and domains | Minimum | |||
Components of intangible assets | |||
Estimated Useful Life | 2 years | ||
Trade names and domains | Maximum | |||
Components of intangible assets | |||
Estimated Useful Life | 7 years |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets (FutExp) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Future amortization expense of the intangible assets | ||
2,017 | $ 41,968 | |
2,018 | 35,948 | |
2,019 | 32,361 | |
2,020 | 28,615 | |
2,021 | 20,746 | |
Thereafter | 105,920 | |
Net Carrying Amount | $ 265,558 | $ 292,675 |
Prepaid Expenses and Other Cu64
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Prepaid Expenses and Other Current Assets | ||
Non-income tax receivable | $ 3,879 | |
Income tax receivable | 1,864 | $ 5,118 |
Prepaid insurance | 552 | 171 |
Prepaid rent | 881 | |
Prepaid technology | 1,318 | 472 |
FinaConnect escrow - current portion | 429 | |
Other | 7,301 | 7,478 |
Total prepaid expenses and other current assets | $ 16,224 | $ 13,239 |
Other Non-Current Assets (Detai
Other Non-Current Assets (Details) - USD ($) $ in Thousands | Nov. 01, 2016 | Jul. 31, 2017 | Apr. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Investment in private companies | $ 2,750 | $ 2,666 | |||
Deposits: | |||||
Lease | 4,262 | 3,198 | |||
Other | 2,083 | 515 | |||
Deferred compensation | 2,738 | ||||
Other | 2,130 | 2,943 | |||
Total other non-current assets | $ 13,963 | 9,322 | |||
Ownership interest (as a percent) | 50.00% | ||||
Company's share of loss | $ 84 | ||||
Carrying value of investment | $ 0 | ||||
Other Income | |||||
Deposits: | |||||
Impairment loss | $ 734 | ||||
Class B units | |||||
Deposits: | |||||
Units owned | 756,347 | ||||
Historical purchase price | $ 1,250 | ||||
Number of shares purchased | 738,463 | 150,000 | |||
Upfront consideration | $ 738 | $ 1,500 | |||
Ownership interest (as a percent) | 16.20% | 10.30% | |||
Company's share of loss | $ 1,420 | ||||
Class A units | |||||
Deposits: | |||||
Number of shares purchased | 1,500,000 | ||||
Upfront consideration | $ 1,500 | ||||
Ownership interest (as a percent) | 21.40% | ||||
Number of additional shares purchased | 1,500,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Nov. 19, 2015 | Dec. 15, 2014 | |
Fair Value Measurements | ||||
Convertible Debt, Noncurrent | $ 152,575 | $ 146,418 | ||
Term Notes | 100,409 | 138,335 | ||
Level 1 | Recurring Basis | ||||
Assets | ||||
Total Assets | 31,644 | |||
Liabilities | ||||
Total liabilities | 2,885 | |||
Level 1 | Recurring Basis | Deferred compensation liability | ||||
Liabilities | ||||
Total liabilities | 2,885 | |||
Level 1 | Recurring Basis | Money market funds | ||||
Assets | ||||
Total Assets | 31,644 | 24,422 | ||
Level 2 | Recurring Basis | ||||
Liabilities | ||||
Total liabilities | 140 | |||
Level 2 | Recurring Basis | Foreign currency forward contracts | ||||
Liabilities | ||||
Total liabilities | 140 | |||
Level 3 | Recurring Basis | ||||
Assets | ||||
Total Assets | 2,738 | |||
Liabilities | ||||
Total liabilities | 4,868 | 4,043 | ||
Level 3 | Recurring Basis | Contingent consideration | ||||
Liabilities | ||||
Total liabilities | 4,868 | 4,043 | ||
Level 3 | Recurring Basis | Deferred compensation asset | ||||
Assets | ||||
Total Assets | 2,738 | |||
Liabilities | ||||
Assets Fair value Disclosure Before Adjustments | 2,672 | |||
Fair Value | Recurring Basis | ||||
Assets | ||||
Total Assets | 34,382 | |||
Liabilities | ||||
Total liabilities | 7,753 | 4,183 | ||
Fair Value | Recurring Basis | Contingent consideration | ||||
Liabilities | ||||
Total liabilities | 4,868 | 4,043 | ||
Fair Value | Recurring Basis | Deferred compensation liability | ||||
Liabilities | ||||
Total liabilities | 2,885 | |||
Fair Value | Recurring Basis | Foreign currency forward contracts | ||||
Liabilities | ||||
Total liabilities | 140 | |||
Fair Value | Recurring Basis | Money market funds | ||||
Assets | ||||
Total Assets | 31,644 | 24,422 | ||
Fair Value | Recurring Basis | Deferred compensation asset | ||||
Assets | ||||
Total Assets | 2,738 | |||
Liabilities | ||||
Gain based upon cash surrender value of life insurance | 66 | |||
Fair Value | Recurring Basis | Deferred compensation asset | General and administration | ||||
Liabilities | ||||
Gain based upon cash surrender value of life insurance | 66 | |||
Convertible Notes | ||||
Fair Value Measurements | ||||
Convertible Debt, Noncurrent | 152,575 | 146,418 | ||
Liabilities | ||||
Total liabilities | 164,824 | 152,878 | ||
Face amount | 172,500 | 172,500 | $ 172,500 | |
Convertible Notes | Carrying Value | ||||
Fair Value Measurements | ||||
Convertible Debt, Noncurrent | 152,575 | 146,418 | ||
Term Notes | ||||
Fair Value Measurements | ||||
Term Notes | 138,335 | 144,399 | ||
Liabilities | ||||
Face amount | $ 142,000 | $ 150,000 | $ 160,000 |
Fair Value Measurements (Lev3 r
Fair Value Measurements (Lev3 rec) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Changes in the fair value of Contingent Consideration Liabilities | |
Fair value asset transfers between Levels 1, 2 and 3 | $ 0 |
Recurring Basis | |
Changes in the fair value of Contingent Consideration Liabilities | |
Balance | 4,043 |
Settlement of contingent consideration liability | (3,729) |
Reclassification to definite consideration | (1,695) |
Fair market value adjustments, net | 1,588 |
Accretion on contingent consideration | 150 |
Balance | 4,868 |
FinaConnect, Inc. | Recurring Basis | |
Changes in the fair value of Contingent Consideration Liabilities | |
Acquisition | 1,929 |
Wheelhouse Analytics, LLC | Recurring Basis | |
Changes in the fair value of Contingent Consideration Liabilities | |
Acquisition | $ 2,582 |
Accrued Expenses and Other Li68
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Components of accrued expenses | ||
Accrued compensation and related taxes | $ 35,287 | $ 29,493 |
Accrued investment manager fees | 31,278 | 28,179 |
Sales and use tax liability | 10,108 | |
Accrued professional services | 3,213 | 1,201 |
Definite consideration | 445 | |
Purchase consideration liabilities | 235 | 13,676 |
Accrued restructuring charges | 295 | 513 |
Other accrued expenses | 6,902 | 10,349 |
Total accrued expenses | $ 87,763 | $ 83,411 |
Income Taxes (Inc) (Details)
Income Taxes (Inc) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of Income before income tax provision | |||
Domestic | $ (47,059) | $ 7,059 | $ 21,437 |
Foreign | 6,569 | 1,929 | 1,070 |
Income (loss) before income tax provision | $ (40,490) | $ 8,988 | $ 22,507 |
Income Taxes (Exp) (Details)
Income Taxes (Exp) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 3,812 | $ 12,731 | $ 11,244 |
State | 1,172 | 1,644 | 1,389 |
Foreign | 4,509 | 685 | 535 |
Current income tax provision | 9,493 | 15,060 | 13,168 |
Deferred: | |||
Federal | 5,992 | (9,384) | (3,662) |
State | 117 | (1,288) | (858) |
Foreign | (525) | 164 | (120) |
Deferred Total | 5,584 | (10,508) | (4,640) |
Total | $ 15,077 | $ 4,552 | $ 8,528 |
Income Taxes (Deferred) (Detail
Income Taxes (Deferred) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Tax Assets | ||
Deferred revenue | $ 6,309 | $ 4,140 |
Prepaid expenses and accruals | 1,363 | 544 |
Deferred rent and lease incentives | 3,940 | 3,521 |
Net operating loss and tax credit carryforwards | 100,471 | 101,762 |
Property and equipment and intangible assets | (90,222) | (104,017) |
Stock-based compensation expense | 10,641 | 10,716 |
Investment in ERS, LLC | 75 | |
Convertible notes | (6,346) | (8,284) |
Other | (2,176) | (2,201) |
Total deferred tax assets | 24,055 | 6,181 |
Valuation allowance for net deferred tax assets | (29,610) | (3,493) |
Net deferred tax assets | $ 2,688 | |
Net deferred tax (liabilities) | $ (5,555) |
Income Taxes (RateRec) (Details
Income Taxes (RateRec) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of expected tax provision | |||
Tax provision, at U.S. federal statutory tax rate | $ (13,767) | $ 3,056 | $ 7,878 |
State income tax, net of federal tax provision | (2,053) | 247 | 648 |
Effects of permanent items | 1,773 | 1,899 | 552 |
Effects of return to provision adjustment | (45) | 118 | (127) |
Change in valuation allowance | 26,269 | 841 | (2,085) |
Capital loss write-off due to carryforward period expiration | 2,085 | ||
Effect of change in federal and state income tax rate | 279 | 283 | (54) |
Uncertain tax positions | 2,024 | (859) | 138 |
Research and development credits | (2,758) | (1,914) | (1,564) |
Federal and state NOL adjustments net of valuation allowance impact | 745 | ||
Other | 3,355 | 881 | 312 |
Total | $ 15,077 | $ 4,552 | $ 8,528 |
Income Taxes (NOL) (Details)
Income Taxes (NOL) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Federal | |
Operating Loss Carryforwards | |
NOL carryforwards | $ 261,475 |
Federal | Alternative minimum | |
Operating Loss Carryforwards | |
Tax credit carryforward | 1,174 |
Federal | Research and development | |
Operating Loss Carryforwards | |
Tax credit carryforward | 8,393 |
State | |
Operating Loss Carryforwards | |
NOL carryforwards | 164,397 |
State | Alternative minimum | |
Operating Loss Carryforwards | |
Tax credit carryforward | 22 |
State | Research and development | |
Operating Loss Carryforwards | |
Tax credit carryforward | 6,948 |
Foreign | |
Operating Loss Carryforwards | |
Tax credit carryforward | $ 2,326 |
Income Taxes (Unrec) (Details)
Income Taxes (Unrec) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of unrecognized tax benefit | |||
Unrecognized tax benefits balance at beginning of year | $ 14,129 | $ 2,092 | $ 2,058 |
Additions based on tax positions related to the current year | 1,153 | 576 | 365 |
Additions based on tax positions related to prior years | 1,257 | 142 | |
Additions based on tax positions for acquired entities | 12,780 | ||
Reductions for settlements with taxing authorities | (1,120) | (261) | |
Reductions for lapses of statute of limitations | (63) | (199) | (212) |
Unrecognized tax benefits balance at end of year | 16,476 | 14,129 | 2,092 |
Unrecognized tax benefits that would impact effective tax rate, if recognized | 16,476 | ||
Potential interest and penalties related to unrecognized tax benefits included in income tax expense | 880 | (158) | (41) |
Accrued interest and penalties on unrecognized tax benefits | $ 4,328 | $ 3,488 | $ 594 |
Debt (Summary) (Details)
Debt (Summary) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 19, 2015 | Dec. 15, 2014 |
Outstanding debt obligations | ||||
Convertible debt, total | $ 152,575 | $ 146,418 | ||
Term notes | 100,409 | 138,335 | ||
Convertible Notes | ||||
Outstanding debt obligations | ||||
Face amount | 172,500 | 172,500 | $ 172,500 | |
Unaccredited discount on Convertible Notes | (17,149) | (22,367) | $ (27,500) | |
Unamortized issuance costs | (2,776) | (3,715) | ||
Convertible debt, total | 152,575 | 146,418 | ||
Term Notes | ||||
Outstanding debt obligations | ||||
Face amount | 142,000 | 150,000 | $ 160,000 | |
Unamortized issuance costs | (3,665) | (5,601) | ||
Term notes | $ 138,335 | $ 144,399 |
Debt (CredAg) (Details)
Debt (CredAg) (Details) - USD ($) $ in Thousands | Nov. 19, 2015 | Dec. 08, 2014 | Jun. 19, 2014 | Dec. 31, 2016 |
Credit Agreement | ||||
Debt | ||||
Credit facility amount | $ 100,000 | $ 100,000 | $ 70,000 | |
Increase credit facility, amount | $ 25,000 | $ 25,000 | ||
Commitment fee | 0.25% | 0.25% | ||
Amount outstanding | $ 0 | |||
Voting equity of foreign subsidiary pledged (as a percent) | 66.00% | |||
Non-voting equity of foreign subsidiary pledged (as a percent) | 100.00% | |||
Debt instrument covenant, prepayment term | 90 days | |||
Debt instrument covenant, leverage ratio | 2.00% | |||
Estimated prepayment portion | $ 31,862 | |||
Letters of credit | ||||
Debt | ||||
Credit facility amount | $ 5,000 | $ 5,000 | $ 5,000 | |
Term Notes | ||||
Debt | ||||
Face amount | 160,000 | |||
Periodic payment | $ 2,000 | |||
Minimum | Credit Agreement | LIBOR | ||||
Debt | ||||
Spread on variable rate basis (as a percent) | 1.50% | 1.50% | 1.25% | |
Maximum | Credit Agreement | LIBOR | ||||
Debt | ||||
Spread on variable rate basis (as a percent) | 3.25% | 3.25% | 1.75% |
Debt (Conv) (Details)
Debt (Conv) (Details) - Convertible Notes | Dec. 15, 2014USD ($)item$ / shares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Debt | ||||
Face amount | $ 172,500,000 | |||
Net proceeds from offering | $ 166,967,000 | |||
Interest rate (as a percent) | 1.75% | 1.75% | ||
Repurchase percentage of principal (as a percent) | 100.00% | |||
Conversion rate | 0.0159022 | |||
Principal amount | $ / shares | $ 1,000 | |||
Conversion price (in dollars per share) | $ / shares | $ 62.88 | $ 62.88 | ||
Threshold trading days (in days) | item | 20 | |||
Consecutive trading days | 30 days | |||
Threshold percentage of stock price trigger (as a percent) | 130.00% | |||
Threshold business days | 5 days | |||
Threshold consecutive trading-day period | 5 days | |||
Threshold percentage of trading price trigger (as a percent) | 98.00% | |||
Allocated to equity components | $ 26,618,000 | |||
Offering costs | 882,000 | |||
Discount | $ 27,500,000 | $ 17,149,000 | $ 22,367,000 | |
Accretion of debt discount | $ 5,218,000 | $ 4,932,000 | ||
Effective interest rate on the liability component (as a percent) | 6.00% | |||
Other non-current assets | ||||
Debt | ||||
Issuance costs | $ 4,651,000 |
Debt (Int) (Details)
Debt (Int) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Interest expense on convertible debt | |||
Total interest expense | $ 8,244 | $ 10,271 | $ 626 |
Convertible Notes, Credit and Amended and Restated Credit Agreements | |||
Interest expense on convertible debt | |||
Coupon interest | 3,019 | 3,019 | 126 |
Amortization of issuance costs | 2,875 | 1,462 | 79 |
Accretion of debt discount | 5,237 | 4,932 | 242 |
Interest on credit agreement | 5,128 | 606 | |
Undrawn and other fees | 341 | 252 | 179 |
Total interest expense | 16,600 | 10,271 | $ 626 |
Convertible Notes | |||
Interest expense on convertible debt | |||
Accretion of debt discount | $ 5,218 | $ 4,932 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 19, 2015 | Nov. 17, 2015 | May 06, 2015 | Dec. 31, 2016 | Feb. 25, 2016 |
Stockholders' equity | |||||
Shares authorized for repurchase | 2,000,000 | ||||
Common stock repurchased | 43,610 | ||||
Remaining shares authorized for repurchase | 1,956,390 | ||||
Finance Logix | |||||
Stockholders' equity | |||||
Stock consideration | $ 8,930 | ||||
Yodlee, Inc | |||||
Stockholders' equity | |||||
Consideration issued (in shares) | 5,974,000 | 5,974,000 | |||
Stock consideration | $ 186,522 | ||||
Equity value issued (in dollars per share) | $ 17.49 | ||||
Common Stock | Finance Logix | |||||
Stockholders' equity | |||||
Consideration issued (in shares) | 123,410 | ||||
Stock consideration | $ 6,388 | ||||
Stock Options | Finance Logix | |||||
Stockholders' equity | |||||
Consideration issued (in shares) | 123,410 | ||||
Stock consideration | $ 2,542 | ||||
Equity value issued (in dollars per share) | $ 52.67 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - $ / shares | Apr. 11, 2013 | Jun. 22, 2010 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Stock-Based compensation | ||||||
Maximum number of shares available for future issuance | 1,336,350 | |||||
Restricted Stock | ||||||
Stock-Based compensation | ||||||
Awards | 1,009,661 | 1,508,796 | 360,834 | |||
Number of performance awards valued to modification (in shares) | 1,894,759 | 2,153,211 | 1,098,674 | 901,551 | ||
Awards voluntarily forfeited (in shares) | 185,907 | 19,967 | 20,447 | |||
Stock Options | ||||||
Stock-Based compensation | ||||||
Stock options to acquire Envestnet common stock | 163,864 | 358,087 | 214,253 | |||
Stock options to acquire Envestnet common stock at an exercise price (in dollars per share) | $ 22.38 | $ 48.38 | $ 42.92 | |||
2004 Plan | ||||||
Stock-Based compensation | ||||||
Share-based awards, contractual term | 10 years | |||||
2010 Plan | ||||||
Stock-Based compensation | ||||||
Share-based awards, contractual term | 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 | |||||
2012 Plan | ||||||
Stock-Based compensation | ||||||
Shares authorized for issuance | 1,023,851 | |||||
2012 Plan | Target Incentive Awards | ||||||
Stock-Based compensation | ||||||
Shares authorized for issuance | 559,551 | |||||
Unvested restricted stock, service condition period | 2 years | |||||
2012 Plan | Target Incentive Awards | Minimum | ||||||
Stock-Based compensation | ||||||
Vesting rights | P3Y | |||||
2012 Plan | Target Incentive Awards | Maximum | ||||||
Stock-Based compensation | ||||||
Vesting rights | P5Y | |||||
2012 Plan modification | ||||||
Stock-Based compensation | ||||||
Number of performance awards valued to modification (in shares) | 113,249 | |||||
Awards voluntarily forfeited (in shares) | 103,521 | |||||
2015 Plan | ||||||
Stock-Based compensation | ||||||
Shares authorized for issuance | 1,058,807 | |||||
Awards | 0 |
Stock-Based Compensation (Exp)
Stock-Based Compensation (Exp) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of employee stock-based compensation expense | |||
Stock-based compensation expense | $ 33,276 | $ 15,161 | $ 11,423 |
Tax effect on stock-based compensation expense | (13,001) | (7,678) | (4,434) |
Net effect on income | $ 20,275 | $ 7,483 | $ 6,989 |
Stock-Based Compensation (Assum
Stock-Based Compensation (Assump) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of weighted average assumptions used to value options granted | |||
Grant date fair value of options (in dollars per share) | $ 9.56 | $ 19.06 | $ 16.81 |
Volatility (as a percent) | 42.20% | 37.80% | 37.30% |
Risk-free interest rate (as a percent) | 1.40% | 1.80% | 1.90% |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Expected term (in years) | 6 years 3 months 18 days | 6 years | 6 years |
Stock-Based Compensation (Optio
Stock-Based Compensation (Options) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of exercise prices of stock options outstanding | ||||
Total intrinsic value of options exercised | $ 14,165 | $ 37,879 | $ 20,867 | |
Cash received from exercises of stock options | 4,924 | 8,279 | 5,190 | |
Cash received from issuance of restricted stock | $ 6 | $ 2 | $ 1 | |
Stock Options | ||||
Options | ||||
Aggregate difference between fair value of the Company's common stock (in dollars per share) | $ 35.25 | $ 29.85 | $ 49.14 | |
Outstanding at the beginning of the period (in shares) | 3,533,791 | 4,265,337 | 4,637,471 | |
Granted (in shares) | 163,864 | 358,087 | 214,253 | |
Exercised (in shares) | (598,382) | (1,047,911) | (573,298) | |
Forfeited (in shares) | (66,079) | (41,722) | (13,089) | |
Outstanding at the end of the period (in shares) | 3,033,194 | 3,533,791 | 4,265,337 | 4,637,471 |
Options exercisable (in shares) | 2,699,946 | |||
Weighted-Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 15.03 | $ 10.73 | $ 9.04 | |
Granted (in dollars per share) | 22.38 | 48.38 | 42.92 | |
Exercised (in dollars per share) | 8.23 | 7.90 | 9.05 | |
Forfeited (in dollars per share) | 35.08 | 41.10 | 18.12 | |
Outstanding at the end of the period (in dollars per share) | 16.33 | $ 15.03 | $ 10.73 | $ 9.04 |
Options exercisable (in dollars per share) | $ 13.97 | |||
Weighted-Average Remaining Contractual Life | ||||
Outstanding | 4 years 3 months 18 days | 4 years 8 months 12 days | 4 years 8 months 12 days | 5 years 4 months 24 days |
Options exercisable | 3 years 8 months 12 days | |||
Aggregate Intrinsic Value | ||||
Outstanding (in dollars) | $ 63,264 | $ 61,199 | $ 163,830 | $ 31,877 |
Options exercisable (in dollars) | 61,270 | |||
Additional disclosures | ||||
Unrecognized stock-based compensation expense related to unvested stock options | $ 2,973 | |||
Unrecognized compensation expense weighted-average recognition period | 1 year 9 months 18 days | |||
Stock Options | Minimum | ||||
Additional disclosures | ||||
Exercise prices of stock options outstanding (in dollars per share) | $ 0.11 | |||
Stock Options | Maximum | ||||
Additional disclosures | ||||
Exercise prices of stock options outstanding (in dollars per share) | $ 55.29 |
Stock-Based Compensation (ResSt
Stock-Based Compensation (ResSt) (Details) $ / shares in Units, $ in Thousands | Nov. 19, 2015USD ($)shares | Apr. 11, 2013shares | Aug. 31, 2016itemshares | May 31, 2016itemshares | Dec. 31, 2016USD ($)item$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014$ / sharesshares |
Additional disclosures | |||||||
Attribution of the fair market value of replacement awards | $ | $ 4,318 | ||||||
Yodlee, Inc | |||||||
Additional disclosures | |||||||
Stock consideration | $ | $ 186,522 | ||||||
Attribution of the fair market value of replacement awards | $ | $ 4,318 | ||||||
Restricted Stock Units | |||||||
Stock-Based compensation | |||||||
Award vesting rights proportion (as a percent) | 33.00% | ||||||
Number of Executive Officers Whom Received Performance Based Awards | item | 4 | 3 | |||||
Number of vesting rights anniversaries | item | 3 | ||||||
Number of Shares | |||||||
Granted (in shares) | 125,000 | 205,000 | |||||
Restricted Stock Units | Yodlee, Inc | |||||||
Number of Shares | |||||||
Granted (in shares) | 1,052,000 | ||||||
Additional disclosures | |||||||
Unrecognized compensation expense related to shares | $ | $ 28,518 | $ 11,635 | |||||
Unrecognized compensation expense weighted-average recognition period | 43 months | ||||||
Stock consideration | $ | $ 32,836 | ||||||
Attribution of the fair market value of replacement awards | $ | $ 4,318 | ||||||
Restricted Stock | |||||||
Number of Shares | |||||||
Balance at the beginning of the period (in shares) | 2,153,211 | 1,098,674 | 901,551 | ||||
Granted (in shares) | 1,009,661 | 1,508,796 | 360,834 | ||||
Vested (in shares) | (1,082,206) | (434,292) | (143,264) | ||||
Forfeited (in shares) | (185,907) | (19,967) | (20,447) | ||||
Balance at the end of the period (in shares) | 1,894,759 | 2,153,211 | 1,098,674 | ||||
Weighted-Average Grant Date Fair Value per Share | |||||||
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 35.63 | $ 33.72 | $ 16.50 | ||||
Granted (in dollars per share) | $ / shares | 28.82 | 34.55 | 41.99 | ||||
Vested (in dollars per share) | $ / shares | 29.12 | 29.26 | 15.83 | ||||
Forfeited (in dollars per share) | $ / shares | 30.96 | 38.58 | 28.39 | ||||
Balance at the end of the period (in dollars per share) | $ / shares | $ 30.40 | $ 35.63 | $ 33.72 | ||||
Additional disclosures | |||||||
Unrecognized compensation expense related to shares | $ | $ 43,593 | ||||||
Unrecognized compensation expense weighted-average recognition period | 2 years 1 month 6 days | ||||||
Replacement Awards | Yodlee, Inc | |||||||
Number of Shares | |||||||
Granted (in shares) | 1,052,000 | ||||||
2012 Plan modification | |||||||
Number of Shares | |||||||
Forfeited (in shares) | (103,521) | ||||||
Balance at the end of the period (in shares) | 113,249 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 15, 2014 | |
Basic income (loss) per share calculation: | ||||||||||||
Net income (loss) attributable to Envestnet, Inc. | $ (32,574) | $ (4,057) | $ (7,943) | $ (10,993) | $ (3,913) | $ 3,302 | $ 2,536 | $ 2,511 | $ (55,567) | $ 4,436 | $ 14,174 | |
Basic number of weighted-average shares outstanding | 42,814,222 | 36,500,843 | 34,559,558 | |||||||||
Basic (in dollars per share) | $ (0.75) | $ (0.09) | $ (0.19) | $ (0.26) | $ (0.10) | $ 0.09 | $ 0.07 | $ 0.07 | $ (1.30) | $ 0.12 | $ 0.41 | |
Diluted income (loss) per share calculation: | ||||||||||||
Net income (loss) attributable to Envestnet, Inc. | $ (55,567) | $ 4,436 | $ 14,174 | |||||||||
Effect of dilutive shares: | ||||||||||||
Options to purchase common stock (in shares) | 1,700,248 | 2,165,808 | ||||||||||
Unvested restricted stock units (in shares) | 185,782 | 152,233 | ||||||||||
Diluted number of weighted-average shares outstanding | 42,814,222 | 38,386,873 | 36,877,599 | |||||||||
Diluted (in dollars per share) | (0.75) | $ (0.09) | $ (0.19) | $ (0.26) | $ (0.10) | $ 0.09 | $ 0.07 | $ 0.07 | $ (1.30) | $ 0.12 | $ 0.38 | |
Convertible Notes | ||||||||||||
Conversion price (in dollars per share) | $ 62.88 | $ 62.88 | $ 62.88 |
Net Income (Loss) Per Share (An
Net Income (Loss) Per Share (AntiDil) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
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) | 7,671,274 | 3,383,281 | 2,834,113 |
Stock Options | |||
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) | 3,033,194 | 297,343 | |
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) | 1,894,759 | 210,233 | 90,792 |
Convertible Notes | Convertible debt | |||
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) | 2,743,321 | 2,743,321 | 2,743,321 |
Upside Holdings, Inc. | 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) | 132,384 |
Commitments and Contingencies87
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Future annual minimum lease commitments under operating leases | |||
2,017 | $ 12,203 | ||
2,018 | 12,774 | ||
2,019 | 13,203 | ||
2,020 | 13,035 | ||
2,021 | 12,181 | ||
Thereafter | 58,037 | ||
Total | 121,433 | ||
Rent expense | $ 14,984 | $ 8,893 | $ 7,488 |
Commitments and Contingencies88
Commitments and Contingencies (PurOb) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)item | |
Number of previous claims experienced | item | 0 |
Future minimum unconditional purchase obligations | |
Estimated future minimum unconditional purchase obligations | $ 17,959 |
Net sales and use taxes | 6,229 |
Net sales and use taxes, accrued interest | 914 |
Sales and use tax liability | 10,108 |
Sales and excise tax receivable | 3,879 |
Prepaid expense and other current assets | |
Future minimum unconditional purchase obligations | |
Sales and excise tax receivable | 3,879 |
Accrued Expenses and Other Liabilities | |
Future minimum unconditional purchase obligations | |
Sales and use tax liability | $ 10,108 |
Major Customers (Details)
Major Customers (Details) - Revenues - Customer concentration risk - Fidelity - customer | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Major Customers | |||
Number of customers accounted for as major customer | 1 | 1 | 1 |
Revenue as a percentage of the company's total | 15.00% | 18.00% | 19.00% |
Benefit Plan (Details)
Benefit Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Benefit Plan | |||
Voluntary employer matching contributions | $ 2,270 | $ 1,521 | $ 1,176 |
Net Capital Requirements (Detai
Net Capital Requirements (Details) $ in Thousands | Dec. 31, 2016USD ($) |
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) | $ 1,198 |
Excess of net capital (in dollars) | 1,098 |
Required net capital (in dollars) | $ 100 |
Company's net capital ratio | 0.06 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)customeritem | Dec. 31, 2015USD ($)customeritem | Dec. 31, 2014USD ($)customeritem | |
Segment Information | |||||||||||
Assets under management or administration | $ 352,498 | $ 333,684 | $ 294,223 | ||||||||
Subscription and licensing | 198,125 | 75,280 | 48,787 | ||||||||
Professional services and other | 27,541 | 11,955 | 5,738 | ||||||||
Revenues | $ 155,480 | $ 149,155 | $ 141,708 | $ 131,821 | $ 118,435 | $ 103,367 | $ 102,663 | $ 96,454 | 578,164 | 420,919 | 348,748 |
Income (loss) from operations | (3,063) | (1,291) | (6,330) | (12,760) | (2,484) | 8,328 | 6,466 | 6,682 | (23,444) | 18,992 | 21,252 |
Operating expenses | (601,608) | (401,927) | (327,496) | ||||||||
Interest (expense), net | (16,563) | (9,933) | (487) | ||||||||
Other income (expense), net | (483) | (71) | 1,742 | ||||||||
Income (loss) before income tax provision | (40,490) | 8,988 | 22,507 | ||||||||
Income tax provision | 15,077 | 4,552 | 8,528 | ||||||||
Net income (loss) | (55,567) | 4,436 | 13,979 | ||||||||
Add: Net loss attributable to non-controlling interest | 195 | ||||||||||
Net income (loss) attributable to Envestnet, Inc. | (32,574) | $ (4,057) | $ (7,943) | $ (10,993) | (3,913) | $ 3,302 | $ 2,536 | $ 2,511 | (55,567) | 4,436 | 14,174 |
Assets | 872,401 | 876,249 | 872,401 | 876,249 | |||||||
Depreciation and amortization | 63,999 | 27,962 | 18,651 | ||||||||
Capital expenditures | $ 22,576 | $ 14,716 | $ 9,559 | ||||||||
Operating Segments | |||||||||||
Segment Information | |||||||||||
Number of customers accounted for as major customer | item | 0 | 0 | 0 | ||||||||
Income (loss) from operations | $ 3,131 | $ 40,294 | $ 32,854 | ||||||||
Segment Reconciling | |||||||||||
Segment Information | |||||||||||
Operating expenses | (26,575) | (21,302) | (11,602) | ||||||||
Intersegment Eliminations | |||||||||||
Segment Information | |||||||||||
Revenues | 0 | ||||||||||
Envestnet | |||||||||||
Segment Information | |||||||||||
Assets under management or administration | 352,498 | 333,684 | 294,223 | ||||||||
Subscription and licensing | 84,340 | 63,719 | 48,787 | ||||||||
Professional services and other | 10,794 | 9,435 | 5,738 | ||||||||
Revenues | 447,632 | 406,838 | 348,748 | ||||||||
Assets | 341,602 | 323,292 | 341,602 | 323,292 | |||||||
Depreciation and amortization | 24,784 | 23,369 | 18,651 | ||||||||
Capital expenditures | 17,120 | 13,682 | 9,559 | ||||||||
Envestnet | Operating Segments | |||||||||||
Segment Information | |||||||||||
Income (loss) from operations | 41,678 | 43,278 | $ 32,854 | ||||||||
Envestnet | Yodlee | |||||||||||
Segment Information | |||||||||||
Subscription and licensing | 113,785 | 11,561 | |||||||||
Professional services and other | 16,747 | 2,520 | |||||||||
Revenues | 130,532 | 14,081 | |||||||||
Assets | $ 530,799 | $ 552,957 | 530,799 | 552,957 | |||||||
Depreciation and amortization | 39,215 | 4,593 | |||||||||
Capital expenditures | 5,456 | 1,034 | |||||||||
Envestnet | Yodlee | Operating Segments | |||||||||||
Segment Information | |||||||||||
Income (loss) from operations | $ 38,547 | $ 2,984 | |||||||||
Revenues | Customer concentration risk | Fidelity | |||||||||||
Segment Information | |||||||||||
Number of customers accounted for as major customer | customer | 1 | 1 | 1 |
Geographical Information (Detai
Geographical Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 155,480 | $ 149,155 | $ 141,708 | $ 131,821 | $ 118,435 | $ 103,367 | $ 102,663 | $ 96,454 | $ 578,164 | $ 420,919 | $ 348,748 |
Property, Plant and Equipment, Net | 33,000 | 28,681 | 33,000 | 28,681 | |||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 519,998 | 388,098 | 318,342 | ||||||||
Property, Plant and Equipment, Net | 28,713 | 24,423 | 28,713 | 24,423 | |||||||
International | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 58,166 | 32,821 | $ 30,406 | ||||||||
India | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Property, Plant and Equipment, Net | 3,596 | 3,687 | 3,596 | 3,687 | |||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Property, Plant and Equipment, Net | $ 691 | $ 571 | $ 691 | $ 571 |
Derivative Financial Instrume94
Derivative Financial Instruments (Details) $ in Thousands | Dec. 31, 2016contract | Dec. 31, 2015USD ($) |
Derivatives, Fair Value [Line Items] | ||
Derivative contracts outstanding | contract | 0 | |
Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | $ 11,870 | |
Derivative, Fair Value | (140) | |
Derivatives designated as hedging instruments | Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 9,702 | |
Derivative, Fair Value | (114) | |
Derivatives not designated as hedging instruments | Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 2,168 | |
Derivative, Fair Value | $ (26) |
Subsequent Events (Details)
Subsequent Events (Details) - patent | 1 Months Ended | |
May 31, 2016 | Dec. 31, 2014 | |
Subsequent Events | ||
Patents allegedly infringed upon, number | 7 | 7 |
Petition for reexamination | ||
Subsequent Events | ||
Patents allegedly infringed upon, number | 1 |
Quarterly Financial Data (Una96
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Data (Unaudited) | |||||||||||
Total revenues | $ 155,480 | $ 149,155 | $ 141,708 | $ 131,821 | $ 118,435 | $ 103,367 | $ 102,663 | $ 96,454 | $ 578,164 | $ 420,919 | $ 348,748 |
Income (loss) from operations | (3,063) | (1,291) | (6,330) | (12,760) | (2,484) | 8,328 | 6,466 | 6,682 | (23,444) | 18,992 | 21,252 |
Net income (loss) attributable to Envestnet, Inc. | $ (32,574) | $ (4,057) | $ (7,943) | $ (10,993) | $ (3,913) | $ 3,302 | $ 2,536 | $ 2,511 | $ (55,567) | $ 4,436 | $ 14,174 |
Net income (loss) per share: | |||||||||||
Basic (in dollars per share) | $ (0.75) | $ (0.09) | $ (0.19) | $ (0.26) | $ (0.10) | $ 0.09 | $ 0.07 | $ 0.07 | $ (1.30) | $ 0.12 | $ 0.41 |
Diluted (in dollars per share) | $ (0.75) | $ (0.09) | $ (0.19) | $ (0.26) | $ (0.10) | $ 0.09 | $ 0.07 | $ 0.07 | $ (1.30) | $ 0.12 | $ 0.38 |
Valuation allowance for net deferred tax assets | $ 29,610 | $ 3,493 | $ 29,610 | $ 3,493 |