Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 22, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ENVESTNET, INC. | ||
Entity Central Index Key | 1,337,619 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,507,416,864 | ||
Entity Common Stock, Shares Outstanding | 48,149,473 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 289,345 | $ 60,115 |
Fees receivable, net | 68,004 | 51,522 |
Prepaid expenses and other current assets | 23,557 | 19,470 |
Total current assets | 380,906 | 131,107 |
Property and equipment, net | 44,991 | 35,909 |
Internally developed software, net | 38,209 | 22,174 |
Intangible assets, net | 305,241 | 222,731 |
Goodwill | 519,102 | 432,955 |
Other non-current assets | 25,298 | 17,176 |
Total assets | 1,313,747 | 862,052 |
Current liabilities: | ||
Accrued expenses and other liabilities | 133,298 | 105,897 |
Accounts payable | 19,567 | 11,097 |
Convertible Notes due 2019 | 165,711 | |
Contingent consideration | 732 | 2,115 |
Deferred revenue | 23,988 | 21,246 |
Total current liabilities | 343,296 | 140,355 |
Revolving credit facility | 0 | 81,168 |
Contingent consideration | 0 | 666 |
Deferred revenue | 6,910 | 12,047 |
Deferred rent and lease incentive | 17,569 | 15,185 |
Deferred tax liabilities, net | 640 | 969 |
Other non-current liabilities | 18,005 | 15,102 |
Total liabilities | 681,145 | 424,482 |
Commitments and contingencies | ||
Redeemable units in ERS | 0 | 900 |
Stockholders’ equity: | ||
Preferred stock, par value $0.005, 50,000,000 shares authorized | 0 | 0 |
Common stock, par value $0.005, 500,000,000 shares authorized; 61,238,898 and 57,450,056 shares issued as of December 31, 2018 and December 31, 2017, respectively; 48,121,800 and 44,700,641 shares outstanding as of December 31, 2018 and December 31, 2017, respectively | 306 | 287 |
Additional paid-in capital | 761,128 | 556,257 |
Accumulated deficit | (58,882) | (73,854) |
Treasury stock at cost, 13,117,098 and 12,749,415 shares as of December 31, 2018 and December 31, 2017, respectively | (67,858) | (47,042) |
Accumulated other comprehensive income (loss) | (994) | 624 |
Total stockholders’ equity | 633,700 | 436,272 |
Non-controlling interest | (1,098) | 398 |
Total equity | 632,602 | 436,670 |
Total liabilities and equity | 1,313,747 | 862,052 |
Convertible Notes Due 2023 | ||
Current liabilities: | ||
Convertible Notes | 294,725 | 0 |
Convertible Notes Due 2019 | ||
Current liabilities: | ||
Convertible Notes due 2019 | 0 | |
Convertible Notes | $ 0 | $ 158,990 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 61,238,898 | 57,450,056 |
Common stock, shares outstanding (in shares) | 48,121,800 | 44,700,641 |
Treasury stock, shares (in shares) | 13,117,098 | 12,749,415 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Total revenues | $ 812,363 | $ 683,679 | $ 578,164 |
Operating expenses: | |||
Cost of revenues | 263,400 | 219,037 | 180,590 |
Compensation and benefits | 317,188 | 264,392 | 241,584 |
General and administration | 139,984 | 121,010 | 115,435 |
Depreciation and amortization | 77,626 | 62,820 | 63,999 |
Total operating expenses | 798,198 | 667,259 | 601,608 |
Income (loss) from operations | 14,165 | 16,420 | (23,444) |
Other income (expense): | |||
Interest income | 2,363 | 201 | 37 |
Interest expense | (25,203) | (16,347) | (16,600) |
Other expense, net | (487) | (1,963) | (483) |
Total other expense, net | (23,327) | (18,109) | (17,046) |
Loss before income tax provision (benefit) | (9,162) | (1,689) | (40,490) |
Income tax provision (benefit) | (13,172) | 1,591 | 15,077 |
Net income (loss) | 4,010 | (3,280) | (55,567) |
Add: Net loss attributable to non-controlling interest | 1,745 | 0 | 0 |
Net income (loss) attributable to Envestnet, Inc. | $ 5,755 | $ (3,280) | $ (55,567) |
Net income (loss) per share attributable to Envestnet, Inc.: | |||
Basic (in dollars per share) | $ 0.13 | $ (0.08) | $ (1.30) |
Diluted (in dollars per share) | $ 0.12 | $ (0.08) | $ (1.30) |
Weighted average common shares outstanding: | |||
Basic (in shares) | 45,268,002 | 43,732,148 | 42,814,222 |
Diluted (in shares) | 47,384,085 | 43,732,148 | 42,814,222 |
Recurring Revenue | |||
Revenues: | |||
Total revenues | $ 776,700 | $ 655,883 | $ 550,623 |
Asset-based | |||
Revenues: | |||
Total revenues | 481,233 | 410,016 | 352,498 |
Operating expenses: | |||
Cost of revenues | 232,145 | 194,894 | 160,842 |
Subscription-based | |||
Revenues: | |||
Total revenues | 295,467 | 245,867 | 198,125 |
Operating expenses: | |||
Cost of revenues | 25,192 | 19,818 | 16,113 |
Professional services and other revenues | |||
Revenues: | |||
Total revenues | 35,663 | 27,796 | 27,541 |
Operating expenses: | |||
Cost of revenues | $ 6,063 | $ 4,325 | $ 3,635 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) attributable to Envestnet, Inc. | $ 5,755 | $ (3,280) | $ (55,567) |
Other comprehensive income (loss), net of taxes: | |||
Foreign currency translation gain (loss) | (1,618) | 1,046 | (412) |
Loss on foreign currency contracts designated as cash flow hedges reclassified to earnings | 0 | 0 | (204) |
Total other comprehensive income (loss), net of taxes | (1,618) | 1,046 | (616) |
Comprehensive income (loss), net of taxes | $ 4,137 | $ (2,234) | $ (56,183) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Non-controlling Interest |
Balance at period start at Dec. 31, 2015 | $ 439,927 | $ 270 | $ (20,654) | $ 474,726 | $ 194 | $ (15,007) | $ 398 |
Balance at period start (in shares) at Dec. 31, 2015 | 53,925,415 | (11,946,289) | |||||
Increase (decrease) in shareholders' equity | |||||||
Exercise of stock options | 4,924 | $ 2 | 4,922 | ||||
Exercise of stock options (in shares) | 598,382 | ||||||
Issuance of common stock - vesting of restricted stock units | 6 | $ 6 | |||||
Issuance of common stock - vesting of restricted stock units (in shares) | 1,118,889 | ||||||
Stock-based compensation expense | 32,572 | 32,572 | |||||
Excess tax benefits from stock-based compensation expense | 4,455 | 4,455 | |||||
Purchase of treasury stock for stock-based tax withholdings | (10,966) | $ (10,966) | |||||
Purchase of treasury stock for stock-based tax withholdings (in shares) | (412,220) | ||||||
Common stock shares repurchased | (1,448) | $ (1,448) | |||||
Common stock shares repurchased (in shares) | (43,610) | ||||||
Foreign currency translation loss | (412) | (412) | |||||
Loss on foreign currency contracts designated as cash flow hedges reclassified to earnings | (204) | (204) | |||||
Net income (loss) | (55,567) | (55,567) | |||||
Balance at period end at Dec. 31, 2016 | 413,287 | $ 278 | $ (33,068) | 516,675 | (422) | (70,574) | 398 |
Balance at period end (in shares) at Dec. 31, 2016 | 55,642,686 | (12,402,119) | |||||
Increase (decrease) in shareholders' equity | |||||||
Exercise of stock options | 7,951 | $ 4 | 7,947 | ||||
Exercise of stock options (in shares) | 837,857 | ||||||
Issuance of common stock - vesting of restricted stock units | 5 | $ 5 | |||||
Issuance of common stock - vesting of restricted stock units (in shares) | 969,513 | ||||||
Stock-based compensation expense | 31,635 | 31,635 | |||||
Purchase of treasury stock for stock-based tax withholdings | $ (13,974) | $ (13,974) | |||||
Purchase of treasury stock for stock-based tax withholdings (in shares) | (347,296) | ||||||
Common stock shares repurchased (in shares) | 0 | ||||||
Foreign currency translation loss | $ 1,046 | 1,046 | |||||
Net income (loss) | (3,280) | (3,280) | |||||
Balance at period end at Dec. 31, 2017 | 436,670 | $ 287 | $ (47,042) | 556,257 | 624 | (73,854) | 398 |
Balance at period end (in shares) at Dec. 31, 2017 | 57,450,056 | (12,749,415) | |||||
Increase (decrease) in shareholders' equity | |||||||
Adoption of ASC 606 (See Note 4) | 9,217 | 9,217 | |||||
Exercise of stock options | 5,305 | $ 2 | 5,303 | ||||
Exercise of stock options (in shares) | 359,345 | ||||||
Issuance of common stock - vesting of restricted stock units | 4 | $ 4 | |||||
Issuance of common stock - vesting of restricted stock units (in shares) | 1,073,681 | ||||||
Stock-based compensation expense | 40,245 | 39,969 | 276 | ||||
Purchase of treasury stock for stock-based tax withholdings | $ (20,816) | $ (20,816) | |||||
Purchase of treasury stock for stock-based tax withholdings (in shares) | (367,683) | ||||||
Common stock shares repurchased (in shares) | 0 | ||||||
Issuance of non-controlling units in private company | $ 473 | 473 | |||||
Issuance of Convertible Notes due 2023, net of offering costs | 46,611 | 46,611 | |||||
Issuance of common stock and warrants - private placement, net of offering costs | 118,161 | $ 13 | 118,148 | ||||
Issuance of common stock - private placement (in shares) | 2,355,816 | ||||||
Purchase of non-controlling units in ERS | (6,560) | (5,160) | (1,400) | ||||
Reclassification of redeemable units | 900 | 900 | |||||
Foreign currency translation loss | (1,618) | (1,618) | |||||
Net income (loss) | 4,010 | 5,755 | (1,745) | ||||
Balance at period end at Dec. 31, 2018 | $ 632,602 | $ 306 | $ (67,858) | $ 761,128 | $ (994) | $ (58,882) | $ (1,098) |
Balance at period end (in shares) at Dec. 31, 2018 | 61,238,898 | (13,117,098) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING ACTIVITIES: | |||
Net income (loss) | $ 4,010 | $ (3,280) | $ (55,567) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 77,626 | 62,820 | 63,999 |
Deferred rent and lease incentive amortization | 671 | 1,027 | (438) |
Provision for doubtful accounts | 1,618 | 867 | 1,122 |
Deferred income taxes (benefits) | (23,629) | (4,597) | 5,584 |
Stock-based compensation expense | 40,245 | 31,331 | 33,276 |
Non-cash interest expense | 14,534 | 8,994 | 8,244 |
Accretion on contingent consideration and purchase liability | 222 | 512 | 150 |
Payments of contingent consideration | 0 | (357) | (124) |
Fair market value adjustment to contingent consideration | 0 | 0 | 1,588 |
Loss allocation from equity method investment | 1,146 | 1,469 | 1,420 |
Impairment of equity method investment | 0 | 0 | 734 |
Loss on disposal of fixed assets | 189 | 76 | 398 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Fees and other receivables | (12,890) | (8,121) | 1,646 |
Prepaid expenses and other current assets | (887) | (787) | (2,861) |
Other non-current assets | (3,336) | (1,690) | 1,473 |
Accrued expenses and other liabilities | 12,939 | 16,810 | 17,174 |
Accounts payable | 1,743 | (442) | (462) |
Deferred revenue | 345 | 1,191 | 2,014 |
Other non-current liabilities | 2,839 | 2,427 | 3,776 |
Net cash provided by operating activities | 117,385 | 108,250 | 83,146 |
INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (20,524) | (14,945) | (13,967) |
Capitalization of internally developed software | (24,068) | (12,624) | (8,609) |
Investment in private companies | (1,200) | (1,450) | (2,238) |
Acquisition of businesses | (194,617) | 0 | (31,613) |
Other | 1,270 | 0 | 1,500 |
Net cash used in investing activities | (241,679) | (29,019) | (57,927) |
FINANCING ACTIVITIES: | |||
Proceeds from issuance of Convertible Notes due 2023 | 345,000 | 0 | 0 |
Proceeds from borrowings on revolving credit facility | 195,000 | 35,000 | 40,000 |
Payments on revolving credit facility | (276,168) | (62,500) | (40,000) |
Payments of contingent consideration | (2,193) | (1,929) | (3,605) |
Payments of definite consideration | 0 | (445) | 0 |
Payments of purchase consideration liabilities | 0 | (235) | (3,256) |
Issuance of common stock and warrants - private placement, net of offering costs | 122,704 | 0 | 0 |
Payment of Term Notes | 0 | (35,862) | (8,000) |
Proceeds from exercise of stock options | 5,305 | 7,951 | 4,924 |
Purchase of treasury stock for stock-based tax withholdings | (20,816) | (13,974) | (10,966) |
Purchase of ERS units | (6,560) | 0 | 0 |
Common stock acquired under the share repurchase program | 0 | 0 | (1,448) |
Issuance of restricted stock units | 4 | 5 | 6 |
Net cash provided by (used in) financing activities | 352,294 | (72,083) | (22,345) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (592) | 375 | 0 |
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 227,408 | 7,523 | 2,874 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 62,263 | 54,740 | 51,866 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | 289,671 | 62,263 | 54,740 |
Supplemental disclosure of cash flow information - net cash paid during the period for income taxes | 5,531 | 3,261 | 1,114 |
Supplemental disclosure of cash flow information - cash paid during the period for interest | 10,409 | 7,353 | 8,356 |
Supplemental disclosure of non-cash operating, investing and financing activities: | |||
Transaction costs of issuance of common stock and warrants included in accrued expenses and other liabilities | 4,543 | 0 | 0 |
Purchase of fixed assets included in accounts payable and accrued expenses and other liabilities | 1,997 | 1,286 | 1,136 |
Leasehold improvements funded by lease incentive | 1,780 | 2,098 | 1,522 |
Non-cash debt issuance costs | 0 | 2,230 | 0 |
Purchase liabilities included in accrued expenses and other liabilities | 0 | 856 | 996 |
Contingent consideration issued in business acquisitions | 0 | 0 | 4,868 |
Convertible Notes Due 2023 | |||
FINANCING ACTIVITIES: | |||
Debt issuance costs | (9,982) | 0 | 0 |
Revolving credit facility | |||
FINANCING ACTIVITIES: | |||
Debt issuance costs | $ 0 | $ (94) | $ 0 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business 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. Through a combination of platform enhancements, partnerships and acquisitions, Envestnet empowers enterprises and advisors to more fully understand their clients and deliver better outcomes. The Company offers 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 19,100 investment products. Envestnet | Enterprise also sells data aggregation and reporting, data analytics, and digital advice capabilities to customers. • Envestnet | Tamarac™ provides leading trading, rebalancing, portfolio accounting, performance reporting and client relationship management software, principally to high‑end registered investment advisers (“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 and consulting services to assist advisors in creating investment solutions for their clients. These solutions include nearly 4,000 vetted third party managed account products, multi-manager portfolios, fund strategist portfolios, as well as over 1,200 proprietary products, such as quantitative portfolios and fund strategist 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, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 U.S. generally accepted accounting principles (“GAAP”) in these footnotes are to the FASB Accounting Standards Codification ™ , 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, fair value of warrants issued, commitments and contingencies 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 derives revenues from asset-based services, subscription-based services and professional services and other sources. Revenues are recognized when control of these services is transferred to our customers, in an amount that reflects the consideration that we expect to be entitled to in exchange for those services. All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers. Sales and usage-based taxes are excluded from revenues. Asset-based recurring revenues— Asset-based recurring revenues primarily consist of fees for providing customers continuous access to platform services through the Company’s uniquely customized platforms. These platform services include investment manager 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 and are made available to customers throughout the contractual term from the date the customized platform is launched. The asset-based fees the Company earns are generally based upon variable percentages of assets managed or administered on our platforms. The fee percentage varies based on the level and type of services the Company provides to its customers, as well as the values of existing customer accounts. The values of the customer accounts are affected by inflows or outflows of customer funds and market fluctuations. The platform services are substantially the same over each quarter and performed in a similar manner over the contract period, and are considered stand-ready promises. The platform services that are delivered to the customer over the quarter are considered distinct, as the customer benefits distinctly from each increment of our services and each quarter is separately identified in the contract, and are considered to be a single performance obligation under the new revenue standard. The pricing generally resets each quarter and the pricing structure is consistent throughout the term of the contract. The variable fees are generally calculated and billed quarterly in advance based on preceding quarter-end values and the variable amounts earned from the platform services relate specifically to the benefits transferred to the customer during that quarter. Accordingly, revenue is allocated to the specific quarter in which services are performed. The asset-based contracts generally contain performance obligations and revenue is recognized on a ratable basis over the quarter beginning on the date that the platform services are made available to the customer as the customer simultaneously consumes and receives the benefits of the services. All asset-based fees are recognized in the Envestnet segment. For certain services provided by third parties, the Company evaluates whether it is the principal (revenues reported on a gross basis) or agent (revenues reported on a net basis). Generally, the Company reports customer fees including charges for third party service providers where the Company has a direct contract with such third party service providers on a gross basis, whereas the amounts billed to its customers are recorded as revenues, and amounts paid to third party service providers are recorded as cost of revenues. The Company is the principal in the transaction because it controls the services before they are transferred to its customers. Control is evidenced by the Company being primarily responsible to its customers and having discretion in establishing pricing. Subscription-based recurring revenues— Subscription-based recurring revenues primarily consist of fees for providing customers continuous access to the Company’s platform for wealth management and financial wellness. The subscription-based fees generally include fixed fees and or usage-based fees. Generally, the subscription services are substantially the same over each quarter and performed in a similar manner over the contract period, and are considered stand-ready promises. Quarterly subscription services are considered distinct as the customer can benefit from each increment of services on its own and each quarter is separately identified in the contract, and services are considered to be a single performance obligation under the new revenue standard. The usage-based pricing generally resets each quarter and the pricing structure is generally consistent throughout the term of the contract. The fixed fees are generally calculated and billed quarterly in advance. The usage-based fees are generally calculated and are billed either monthly or quarterly based on the actual usage and relate specifically to the benefits transferred to the customer during that quarter. Accordingly, revenue is allocated to the specific quarter in which services are performed. Certain subscription-based contracts contain multiple performance obligations (i.e. platform services performance obligation and professional services performance obligation). Fixed fees are generally recognized on a ratable basis over the quarter beginning when the subscription services are made available to the customer, as the customer simultaneously receives and consumes the benefits of the subscription services. Usage-based revenue is recognized on a monthly basis as the customer receives and consumes the benefit as the Company provides the services. Subscription-based fees are recognized in both the Envestnet and Envestnet | Yodlee segments. Professional services and other revenues— The Company earns professional services fees by providing contractual customized services and platform software development as well as initial implementation fees. Professional services contracts generally have fixed prices, and generally specify the deliverables in the contract. Certain professional services contracts are billed on a time and materials basis and revenue is recognized over time as the services are performed. For contracts billed on a fixed price basis, revenue is recognized over time based on the proportion of services performed. Initial implementation fees are fixed and recognized ratably over the contract term. Other revenue primarily includes revenue related to the Advisor Summit. Other revenue is recognized when the events are held. Other revenue is not significant. The majority of the professional services and other contracts contain one performance obligation. Professional services and other revenues are recognized in both the Envestnet and Envestnet | Yodlee segments. Arrangements with multiple performance obligations — Certain of the Company’s contracts with customers contain multiple performance obligations such as platform services performance obligation and professional services performance obligation. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. Standalone selling prices of services are estimated based on observable transactions when these services are sold on a standalone basis or based on expected cost plus margin. Contract Balances —The Company records contract liabilities (deferred revenue) when cash payments are received in advance of its performance. The term between invoicing date and when payment is due is generally not significant. For the majority of its arrangements, the Company requires advance quarterly payments before the services are delivered to the customer. Contract assets would exist when revenues have been recorded (i.e. control of goods or services has been transferred to the customer) but customer payment is contingent on a future event beyond the passage of time (i.e. satisfaction of additional performance obligations). The Company does not have any material contract assets. Unbilled receivables, which are not classified as contract assets, represent arrangements in which revenues have been recorded prior to billing and right to payment is unconditional. Deferred revenue primarily consists of implementation fees, professional services, and subscription fee payments received in advance from customers. Deferred sales incentive compensation —Sales incentive compensation earned by the Company’s sales force is considered an incremental and recoverable cost to acquire a contract with a customer. Sales incentive compensation for initial contracts is deferred and amortized on a straight-line basis over the period of benefit, which the Company has determined to be five years. The Company determined the period of benefit by taking into consideration its customer contracts, life of the technology and other factors. Sales incentive compensation for renewal contracts are deferred and amortized on a straight-line basis over the related contractual renewal period. Deferred sales incentive compensation is included in other non-current assets on the consolidated balance sheet and amortization expense is included in compensation and benefits expenses on the consolidated statements of operations. The Company has applied the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in compensation and benefits expenses on the consolidated statements of operations. 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. 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, 2018 , and 2017 , the Company’s allowance for doubtful accounts was $826 and $407 , respectively. 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. Restricted Cash— The following table reconciles cash, cash equivalents and restricted cash from the consolidated balance sheets to amounts reported within the consolidated statements of cash flows: December 31, 2018 2017 2016 Cash and cash equivalents $ 289,345 $ 60,115 $ 52,592 Restricted cash included in prepaid expenses and other current assets 158 2,000 429 Restricted cash included in other non-current assets 168 148 1,719 Total cash, cash equivalents and restricted cash $ 289,671 $ 62,263 $ 54,740 Investments— The Company has investments that are recorded either at cost or using the equity method of accounting. 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 all 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% ownership and lack of control. The Company’s interest in the earnings or losses of the privately held companies will be reflected in other 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 $0 , $0 and $734 in impairments to investments during the years ended December 31, 2018 , 2017 and 2016 , respectively. Property and Equipment— Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of furniture and equipment is computed using the straight-line method based on estimated useful lives of the depreciable assets. Leasehold improvements are amortized on a straight-line basis over their estimated economic useful lives or the remaining lease term, whichever is shorter. Improvements are capitalized, while repairs and maintenance costs are charged to operations as incurred. Assets are reviewed for recoverability whenever events or circumstances indicate the carrying value may not be recoverable. 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, 2018 , 2017 and 2016 . 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 qualitative or quantitative process that is performed at least annually or whenever events or circumstances indicate that impairment may have occurred. The Company performs the annual impairment analysis on 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 quantitative 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 quantitative goodwill impairment evaluation. If it is determined that the carrying value may exceed fair value when considering qualitative factors, a quantitative goodwill impairment evaluation is performed. When performing the quantitative evaluation, if the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the difference will be recorded. No goodwill impairment charges have been recorded for the years ended December 31, 2018 , 2017 and 2016 . 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, 2018 , 2017 and 2016 . 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 2018 and 2017 , the Company estimated that a sales and use tax liability of $8,643 and $8,522 , respectively, was probable related to multiple taxing jurisdictions with respect to revenues in the years ended December 31, 2018 and December 31, 2017 , and prior years. This amount is included in accrued expenses and other liabilities on the consolidated balance sheets. For the same periods, the Company also estimated a sales and use tax receivable of $5,246 and $2,704 , respectively, related to estimated recoverability of a portion of the liability. This amount is included in prepaid expenses and other current assets on the consolidated balance sheets. For the years ended December 31, 2018 , 2017 and 2016 the Company recorded a net sales and use tax benefit of $1,176 including interest of $130 , and a net sales and use tax expense of $345 and $6,229 including interest of $244 and $914 , respectively. The sales and use tax adjustment was recorded in general and administration on the consolidated statements of operations. Additional future information obtained from the applicable jurisdictions may affect the Company’s estimate of its sales and use tax liability. 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. The Company estimates the expected life of its options using historical internal forfeiture data. The Company estimates stock-price volatility using historical third-party quotes of Envestnet’s common stock. 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. Convertible Notes —On December 15, 2014, the Company issued $172,500 of 1.75% convertible notes due December 2019 (the “2019 Notes”). In May 2018, the Company issued $345,000 of 1.75% convertible notes due June 2023 (the “2023 Notes”). Collectively 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. 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. Primarily due to the issuance of units related to the contributions of FinaConnect, Inc. (“FinaConnect”) and Castle Rock Innovations, Inc. and the purchase of additional ERS units acquired from the former owners of Klein Decisions, Inc. the Company’s ownership in ERS increased to 81.5% as of December 31, 2016. During the year ended December 31, 2018 , the Company purchased all remaining outstanding units for approximately $6,560 , which increased the Company’s ownership percentage to 100% as of December 31, 2018 . 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, 2018 , 2017 and 2016 , reflected as non-controlling interest in the consolidated statements of operations related to ERS. In March 2018, the Company purchased 4,000 units representing approximately 43% of the outstanding membership interests of a private company for cash consideration of $1,333 and granted the Company the ability to appoint two members to the private Company's board of directors. The appointment of two board members gives the Company the majority of the board's voting power, therefore the Company uses the consolidation method of accounting for this investment. The private company was formed to enable financial advisors to provide insurance and income protection products to their clients. Recent Accounting Pronouncements — In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which amends the existing accounting standards for revenue recognition. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2017. These changes became effective for the Company's fiscal year beginning January 1, 2018 and have been reflected in these consolidated 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 (“ROU”) 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 and will be applied using a modified retrospective approach with optional practical expedients. Early adoption of the standard is permitted. The Company will adopt the new standard on its effective date of January 1, 2019 using the cumulative-effect adjustment transition method with certain available transitional practical expedients. The Company has substantially completed the implementation of key changes to internal controls over financial reporting to allow it to timely compile the information needed to account for transactions under this new guidance. The standard will have a material impact on our consolidated balance sheets and related disclosures but will not have a material impact on our consolidated income statements. The most significant impact will be the recognition of ROU assets and lease liabilities for operating leases. The Company currently estimates adoption of ASU 2016-02 will result in the recognition of ROU assets and lease liabilities for operating leases of approximately $66,000 and $84,000, respectively, as of January 1, 2019. The difference between the ROU assets and lease liabilities primarily represents the existing deferred rent liabilities, resulting from historical straight-lining of operating leases, which was reclassified upon adoption to reduce the measurement of the ROU assets. 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. These changes became effective for the Company’s fiscal year beginning January 1, 2017 and have been reflected in these consolidated financial statements. As a result of the retrospective adoption of ASU 2016-09, for the year ended December 31, 2016 net cash provided by operating activities increased by $4,455 with a corresponding offset to net cash used in financing activities. The Company did not elect an accounting policy change to record forfeitures as they occur and will continue to estimate forfeitures at each period. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326)". This update significantly changes the way that entities will be required to measure credit losses. The new standard requires that entities estimate credit l |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions The following acquisitions are included within the Envestnet segment, except for Wheelhouse Analytics LLC (“Wheelhouse”) and the private company, which are included within the Envestnet | Yodlee segment. FinaConnect, Inc. On February 1, 2016, Envestnet acquired all of the outstanding shares of capital stock of 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 two years subsequent to the acquisition date, not to exceed a total amount of $3,500 . 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. During 2017 , the Company paid contingent consideration in the amount of $2,286 for the first year earnout. During 2018 , the Company did not pay any contingent consideration for the second year earnout. The consideration transferred in the acquisition was as follows: Cash consideration $ 6,425 Contingent consideration liability 1,929 Working capital adjustment 269 Cash acquired (1 ) Total $ 8,622 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ 430 Total liabilities assumed (400 ) Identifiable intangible assets 3,800 Goodwill 4,792 Total net assets acquired $ 8,622 A summary of estimated intangible assets acquired, estimated useful lives and amortization methods is as follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ 2,800 12 Accelerated Proprietary technology 900 5 Straight-line Trade names and domains 100 2 Straight-line Total $ 3,800 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 years ended December 31, 2018 , 2017 and 2016 , acquisition related costs for FinaConnect totaled $0 , $135 and $116 , respectively, 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. 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 Envestnet | 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. During 2018 , Company paid contingent consideration in the amount of $2,193 . The consideration transferred in the acquisition was as follows: Cash consideration $ 13,299 Contingent consideration liability 2,364 Purchase consideration liability 887 Working capital adjustment 110 Cash acquired (80 ) Total $ 16,580 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ 385 Total liabilities assumed (1,420 ) Identifiable intangible assets 6,600 Goodwill 11,015 Total net assets acquired $ 16,580 A summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ 4,000 15 Accelerated Proprietary technology 2,500 6 Straight-line Trade names and domains 100 2 Straight-line Total $ 6,600 The results of Wheelhouse’s operations are included in the consolidated statements of operations beginning October 3, 2016, and are not considered material to the Company’s results of operations. For the years ended December 31, 2018 , 2017 and 2016 , acquisition related costs for Wheelhouse totaled $1,763 , $874 and $383 , respectively, and are included in general and administration in the consolidated statements of operations. FolioDynamix On January 2, 2018, the Company acquired all of the issued and outstanding membership interests of FolioDynamics Holdings, Inc. (“FolioDynamix”) through a merger of FolioDynamix with and into a wholly owned subsidiary of Envestnet. FolioDynamix provides financial institutions, RIAs, and other wealth management clients with an end-to-end technology solution paired with a suite of advisory tools including model portfolios, research and overlay management services. FolioDynamix is included in the Envestnet segment. The Company acquired FolioDynamix to add complementary trading tools as well as commission and brokerage support to Envestnet’s existing suite of offerings. Envestnet expects to integrate the technology and operations of FolioDynamix into the Company’s wealth management channel, enabling the Company to further leverage its operating scale and data analytics capabilities. The Company funded the acquisition with a combination of cash on the Company’s balance sheet, purchase consideration liabilities and borrowings under its revolving credit facility. The consideration transferred in the acquisition was as follows: Measurement Preliminary Period Revised Estimate Adjustments Estimate Cash consideration $ 187,580 $ 12,297 $ 199,877 Purchase consideration liability 12,297 (12,297 ) — Working capital and other adjustments (3,893 ) (2,849 ) (6,742 ) Total $ 195,984 $ (2,849 ) $ 193,135 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Measurement Preliminary Period Revised Estimate Adjustments Estimate Cash and cash equivalents $ 4,876 $ — $ 4,876 Accounts receivable 4,962 — 4,962 Prepaid expenses and other current assets 1,600 2,173 3,773 Property and equipment, net 927 — 927 Other non-current assets 441 — 441 Identifiable intangible assets 117,700 18,000 135,700 Goodwill 97,248 (17,357 ) 79,891 Total assets acquired 227,754 2,816 230,570 Accounts payable (5,358 ) — (5,358 ) Accrued expenses (7,173 ) (734 ) (7,907 ) Deferred tax liability (18,245 ) (5,055 ) (23,300 ) Deferred revenue (930 ) 124 (806 ) Other non-current liabilities (64 ) — (64 ) Total liabilities assumed (31,770 ) (5,665 ) (37,435 ) Total net assets acquired $ 195,984 $ (2,849 ) $ 193,135 The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, primarily related to lower future operating expenses and the knowledge and experience of the workforce in place. The goodwill is not deductible for income tax purposes. During 2018, after obtaining additional information, the estimated fair value of the customer list intangible was revised due to a change in the assumed attrition rate of the customer base acquired. A summary of estimated identifiable intangible assets acquired, estimated useful lives and amortization method is as follows: Measurement Preliminary Period Revised Estimated Amortization Estimate Adjustments Estimate Useful Life in Years Method Customer list $ 95,000 $ 18,500 $ 113,500 13 Accelerated Proprietary technology 18,000 (500 ) 17,500 5 Straight-line Trade names and domains 4,700 — 4,700 6 Straight-line Total $ 117,700 $ 18,000 $ 135,700 The results of FolioDynamix’s operations are included in the consolidated statements of operations beginning January 2, 2018. FolioDynamix’s revenues for the year ended December 31, 2018 totaled $68,122 . FolioDynamix’s pre-tax loss for the year ended December 31, 2018 totaled $13,777 . The pre-tax loss includes estimated acquired intangible asset amortization of $17,908 for the year ended December 31, 2018 . For the year ended December 31, 2018 , acquisition related costs for FolioDynamix totaled $1,557 , and are included in general and administration expenses. The Company may incur additional acquisition related costs in 2019. Acquisition of private company In August 2018, the Company acquired all of the issued and outstanding membership interests of a private technology company that provides market research analytics. In connection with this acquisition, the Company paid estimated net consideration of $6,585 , subject to certain closing and post-closing adjustments. The preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition are not material. As a result the remaining balance was allocated to goodwill in the amount of $6,885 . The goodwill is not deductible for income tax purposes. Unaudited pro forma results for Envestnet, Inc. giving effect to the FolioDynamix acquisition The following pro forma financial information presents the combined results of operations of Envestnet and FolioDynamix for the year ended December 31, 2017. The pro forma financial information presents the results as if the acquisition had occurred as of the beginning of 2017 . The results of the private company acquisition are not included in the pro forma financial information presented below as they were not considered material to the Company's results of operations. The unaudited pro forma results presented primarily include adjustments for amortization charges for acquired intangible assets, stock-based compensation expense, transaction related expenses and interest expense. Pro forma financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place as of the beginning of 2017 . Year Ended December 31, 2017 Revenues $ 724,618 Net loss (21,194 ) Net loss per share: Basic $ (0.48 ) Diluted $ (0.48 ) |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue On January 1, 2018, the Company adopted ASU 2014-09 and all subsequent ASUs that modified Topic 606 (“ASC 606” or “new revenue standard”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. The Company recognized the cumulative effect of the initial application of the new revenue standard as an adjustment to the opening balance of accumulated deficit. The comparative information has not been restated and will continue to be reported under the accounting standards in effect for those periods. The Company does not expect the adoption of the new revenue standard to have a material impact to the results of operations on an ongoing basis. The majority of our revenues continue to be recognized when services are provided. The adoption of the new revenue standard primarily impacts timing of revenue recognition for initial implementation services, deferral of incremental direct costs in obtaining contracts with customers and gross versus net presentation related to certain third party manager agreements. The cumulative effect of the changes made to the Company’s consolidated balance sheets as of January 1, 2018 for the adoption of the new revenue standard was as follows: Cumulative Balance at Catch-up Balance at December 31, 2017 Adjustments January 1, 2018 Balance Sheets Assets: Other non-current assets $ 17,176 $ 5,315 $ 22,491 Liabilities: Deferred revenue, current 21,246 (1,122 ) 20,124 Deferred revenue, non-current 12,047 (2,780 ) 9,267 Equity: Accumulated deficit (73,854 ) 9,217 (64,637 ) In accordance with the new revenue standard requirements, the impact of adoption on the Company’s consolidated statements of operations and consolidated balance sheets was as follows: Year Ended December 31, 2018 Without Adoption of Effect of Change As Reported ASC 606 Higher/(Lower) Statements of Operations Revenues: Asset-based $ 481,233 $ 495,646 $ (14,413 ) Subscription-based 295,467 295,467 — Total recurring revenues 776,700 791,113 (14,413 ) Professional services and other revenues 35,663 35,840 (177 ) Total revenues 812,363 826,953 (14,590 ) Operating expenses: Cost of revenues 263,400 277,813 (14,413 ) Compensation and benefits 317,188 318,887 (1,699 ) Total operating expenses 798,198 814,310 (16,112 ) Income from operations 14,165 12,643 1,522 Net income 4,010 2,488 1,522 Net income attributable to Envestnet, Inc. $ 5,755 $ 4,233 $ 1,522 At December 31, 2018 Without Adoption of Effect of Change As Reported ASC 606 Higher/(Lower) Balance Sheets Assets: Fees receivable, net $ 68,004 $ 67,085 $ 919 Other non-current assets 25,298 18,284 7,014 Liabilities: Accounts payable 19,567 18,648 919 Deferred revenue, current 23,988 24,577 (589 ) Deferred revenue, non-current 6,910 10,046 (3,136 ) Equity: Accumulated deficit (58,882 ) (69,621 ) 10,739 The impact of adoption on the Company’s consolidated statements of cash flows is immaterial. Disaggregation of revenue The following table presents the Company’s revenues disaggregated by major source: Year Ended December 31, 2018 Envestnet (1) Envestnet | Yodlee (1) Consolidated (1) Revenues: Asset-based $ 481,233 $ — $ 481,233 Subscription-based 138,372 157,095 295,467 Total recurring revenues 619,605 157,095 776,700 Professional services and other revenues 13,000 22,663 35,663 Total revenues $ 632,605 $ 179,758 $ 812,363 Year Ended December 31, 2017 Envestnet (1) Envestnet | Yodlee (1) Consolidated (1) Revenues: Asset-based $ 410,016 $ — $ 410,016 Subscription-based 106,048 139,819 245,867 Total recurring revenues 516,064 139,819 655,883 Professional services and other revenues 11,841 15,955 27,796 Total revenues $ 527,905 $ 155,774 $ 683,679 Year Ended December 31, 2016 Envestnet (1) Envestnet | Yodlee (1) Consolidated (1) Revenues: Asset-based $ 352,498 $ — $ 352,498 Subscription-based 84,340 113,785 198,125 Total recurring revenues 436,838 113,785 550,623 Professional services and other revenues 10,794 16,747 27,541 Total revenues $ 447,632 $ 130,532 $ 578,164 (1) As noted above, prior period amounts have not been adjusted under the modified retrospective method. The following table presents the Company’s revenues disaggregated by geography, based on the billing address of the customer: Year Ended December 31, 2018 2017 (1) 2016 (1) United States $ 778,565 $ 617,835 $ 519,998 International (2), (3) 33,798 65,844 58,166 Total $ 812,363 $ 683,679 $ 578,164 (1) As noted above, prior period amounts have not been adjusted under the modified retrospective method. (2) No foreign country accounted for more than 10% of total revenues. (3) Upon adoption of ASU 2014-09, gross revenue recognition changed to net revenue recognition for one customer. One customer accounted for more than 10% of the Company’s total revenues: Year Ended December 31, 2018 2017 2016 Fidelity 17 % 17 % 15 % Remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2018 : Years ending December 31, 2019 $ 195,913 2020 127,516 2021 76,828 2022 56,378 2023 22,496 Thereafter 36,322 Total $ 515,453 Only fixed consideration from significant contracts with customers is included in the amounts presented above. The Company has applied the practical expedients and exemption and does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less; (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed; and (iii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligations or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation. Contract balances The opening and closing balances of the Company’s billed receivables, unbilled receivables, and deferred revenues are as follows: Receivables, Unbilled receivables, which are included in which are included in Deferred Revenue Deferred Revenue Fees receivable, net Fees receivable, net (current) (non-current) Opening balance as of January 1, 2018 $ 36,605 $ 13,229 $ 20,124 $ 9,267 Increase/(decrease), net 14,882 3,288 3,864 (2,357 ) Ending balance as of December 31, 2018 $ 51,487 $ 16,517 $ 23,988 $ 6,910 The increase in receivables is primarily a result of timing of payments for asset-based and subscription-based revenues relative to the year ended December 31, 2018 and the acquisition of FolioDynamix. The increase in unbilled receivables is primarily driven by revenue recognized in excess of billings related to asset-based services during the year ended December 31, 2018 . The increase in deferred revenue is primarily the result of an increase in deferred revenue related to subscription-based services during the year ended December 31, 2018 , most of which will be recognized over the course of the next twelve months. The amount of revenue recognized that was included in the opening deferred revenue balance was $18,620 for the year ended December 31, 2018 . The majority of this revenue consists of subscription-based revenue and professional services arrangements. The amount of revenue recognized from performance obligations satisfied in prior periods was not material. Deferred sales incentive compensation Deferred sales incentive compensation was $7,014 as of December 31, 2018 . Amortization expense for the deferred sales incentive compensation was $2,132 for the year ended December 31, 2018 . No significant impairment loss for capitalized costs was recorded during the period. The Company has applied the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in compensation and benefits on the consolidated statements of operations. |
Cost of Revenues
Cost of Revenues | 12 Months Ended |
Dec. 31, 2018 | |
Cost of Revenue [Abstract] | |
Cost of Revenues | Cost of Revenues The following summarizes cost of revenues by revenue category: Year Ended December 31, 2018 2017 2016 Asset-based $ 232,145 $ 194,894 $ 160,842 Subscription-based 25,192 19,818 16,113 Professional services and other 6,063 4,325 3,635 Total $ 263,400 $ 219,037 $ 180,590 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: December 31, 2018 2017 Prepaid technology $ 6,766 $ 1,843 Non-income tax receivable 5,628 2,704 Prepaid outside information services 1,515 1,395 Restricted cash 158 2,000 Income tax receivable — 1,684 Other 9,490 9,844 Total $ 23,557 $ 19,470 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment Property and equipment consists of the following: December 31, Estimated Useful Life 2018 2017 Cost: Computer equipment and software 3 years $ 64,346 $ 56,192 Leasehold improvements Shorter of the lease term or useful life of the asset 28,191 23,192 Office furniture and fixtures 3-7 years 9,291 8,110 Other office equipment 3-5 years 5,577 2,052 107,405 89,546 Less: accumulated depreciation and amortization (62,414 ) (53,637 ) Total property and equipment, net $ 44,991 $ 35,909 During 2018 and 2017 , the Company retired property and equipment that was no longer in service for the Envestnet segment in the amounts of $5,984 and $7,180 , respectively. During 2018 and 2017 , the Company retired property and equipment that were no longer in service for the Envestnet | Yodlee segment in the amounts of $5,387 and $532 , respectively. The following table presents the cost amounts and related accumulated depreciation written off by category: Year Ended December 31, 2018 Year Ended December 31, 2017 Accumulated Accumulated Cost Depreciation Cost Depreciation Computer equipment and software $ 10,733 $ (10,709 ) $ 7,528 $ (7,523 ) Office furniture and fixtures 32 (32 ) 184 (113 ) Other office equipment 309 (288 ) — — Leasehold improvements 297 (269 ) — — Total property and equipment retirements $ 11,371 $ (11,298 ) $ 7,712 $ (7,636 ) Depreciation and amortization expense was as follows: Year Ended December 31, 2018 2017 2016 Depreciation and amortization expense $ 15,737 $ 15,383 $ 14,838 |
Internally Developed Software
Internally Developed Software | 12 Months Ended |
Dec. 31, 2018 | |
Capitalized Computer Software, Net [Abstract] | |
Internally Developed Software | Internally Developed Software Internally developed software consists of the following: December 31, Estimated Useful Life 2018 2017 Internally developed software 5 years $ 70,410 $ 46,342 Less: accumulated amortization (32,201 ) (24,168 ) Internally developed software, net $ 38,209 $ 22,174 Amortization expense was as follows: Year Ended December 31, 2018 2017 2016 Amortization expense $ 8,033 $ 5,310 $ 3,646 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Changes in the carrying amount of goodwill were as follows: Envestnet Envestnet | Yodlee Total Balance at December 31, 2016 $ 163,751 $ 268,185 $ 431,936 Purchase accounting adjustments - Wheelhouse — 457 457 Foreign currency — 562 562 Balance at December 31, 2017 163,751 269,204 432,955 FolioDynamix acquisition 79,891 — 79,891 Private company acquisition — 6,885 6,885 Foreign currency — (796 ) (796 ) Other 167 — 167 Balance at December 31, 2018 $ 243,809 $ 275,293 $ 519,102 Intangible assets consist of the following: December 31, 2018 December 31, 2017 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Useful Life Amount Amortization Amount Amount Amortization Amount Customer lists 7-15 years $ 361,020 $ (102,077 ) $ 258,943 $ 259,350 $ (78,482 ) $ 180,868 Proprietary technologies 4-8 years 66,746 (36,151 ) 30,595 57,377 (31,067 ) 26,310 Trade names 2-7 years 27,990 (12,352 ) 15,638 24,840 (9,701 ) 15,139 Backlog 4 years 11,000 (10,935 ) 65 11,000 (10,586 ) 414 Total intangible assets $ 466,756 $ (161,515 ) $ 305,241 $ 352,567 $ (129,836 ) $ 222,731 During 2018 , the Company wrote off fully amortized intangible assets in the amount of $22,177 , including customer lists, trade names and proprietary technologies. The Company did not write off any intangible assets in 2017 . Amortization expense was as follows: Year Ended December 31, 2018 2017 2016 Amortization expense $ 53,856 $ 42,127 $ 45,515 Future amortization expense of the intangible assets as of December 31, 2018 , is expected to be as follows: Years ending December 31: 2019 $ 48,334 2020 44,380 2021 35,744 2022 33,266 2023 24,920 Thereafter 118,597 Total $ 305,241 |
Other Non-Current Assets
Other Non-Current Assets | 12 Months Ended |
Dec. 31, 2018 | |
Other Assets, Noncurrent [Abstract] | |
Other Non-Current Assets | Other Non-Current Assets Other non-current assets consist of the following: December 31, 2018 2017 Deferred sales incentive compensation $ 7,014 $ — Assets to fund deferred compensation liability 6,346 5,185 Lease and other deposits 4,341 4,906 Investments in private companies 2,862 2,731 Unamortized issuance costs on revolving credit facility 2,251 3,106 Other 2,484 1,248 Total $ 25,298 $ 17,176 The Company owns 538,776 common 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. This investment is included in the Envestnet segment. In November 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 . In September 2017, the Company purchased an additional 1,450,000 Class A units in this privately held company for cash consideration of $1,450 . The additional investment increased the Company’s ownership interest to 34.5% . 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 due to our less than 50% ownership and lack of control and does not otherwise exercise control over the significant economic decisions of the privately held company. The Company’s share in the loss of the privately held company was $1,146 and $1,469 during the years ended December 31, 2018 and 2017 , respectively, and is included in other expense, net on the consolidated statements of operations. This investment is included in the Envestnet segment. In November 2018, the Company acquired approximately 27% of the outstanding membership interests of a privately held company for cash consideration of $1,200 . In accordance with the agreement, the Company is required to make future capital contributions of $1,200 and $1,100 in 2019 and 2020, respectively, subject to certain conditions. 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 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 due to our less than 50% ownership and lack of control and does not otherwise exercise control over the significant economic decisions of the privately held company. This investment is included in the Envestnet segment. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following: December 31, 2018 2017 Accrued investment manager fees $ 50,635 $ 39,324 Accrued compensation and related taxes 50,598 43,724 Sales and use tax payable 9,733 9,037 Accrued professional services 4,517 4,985 Accrued transaction costs 4,543 — Definite consideration — 1,250 Other accrued expenses 13,272 7,577 Total $ 133,298 $ 105,897 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s outstanding debt obligations as of December 31, 2018 and 2017 were as follows: December 31, 2018 2017 Convertible Notes due 2019 $ 172,500 $ 172,500 Unaccreted discount on Convertible Notes due 2019 (5,890 ) (11,677 ) Unamortized issuance costs on Convertible Notes due 2019 (899 ) (1,833 ) Convertible Notes due 2019 carrying value $ 165,711 $ 158,990 Convertible Notes due 2023 $ 345,000 $ — Unaccreted discount on Convertible Notes due 2023 (42,641 ) — Unamortized issuance costs on Convertible Notes due 2023 (7,634 ) — Convertible Notes due 2023 carrying value $ 294,725 $ — Revolving credit facility balance $ — $ 81,168 Interest expense on the Convertible Notes due 2019 and 2023 and the Second Amended and Restated Credit agreement was comprised of the following: Year Ended December 31, 2018 2017 2016 Coupon interest $ 6,650 $ 3,019 $ 3,019 Amortization of issuance costs 2,771 3,279 2,875 Accretion of debt discount 11,134 5,472 5,237 Interest on revolving credit facility 3,994 4,153 5,128 Undrawn and other fees 654 424 341 Total $ 25,203 $ 16,347 $ 16,600 Convertible Notes due 2019 In 2014, the Company issued $172,500 of Convertible Notes due 2019. Net proceeds from the offering were $166,967 . The Convertible Notes due 2019 bear interest at a rate of 1.75% per annum payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2015. In connection with the issuance of the Convertible Notes due 2019, the Company incurred $4,651 of issuance costs in 2014, which are presented net in current debt on the consolidated balance sheets. These costs are being amortized and are recorded as additional interest expense over the life of the Convertible Notes due 2019. The Convertible Notes due 2019 are general unsecured obligations, subordinated in right of payment to our obligations under our Credit Agreement. The Convertible Notes due 2019 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 due 2019 will be structurally subordinated to the indebtedness and other liabilities of any of our subsidiaries, other than to the extent the Convertible Notes due 2019 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 due 2019 for cash at 100% of the principal amount of the Convertible Notes due 2019 being purchased, plus any accrued and unpaid interest. The Convertible Notes due 2019 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 one thousand principal amount of the Convertible Notes due 2019, which represents a conversion price of $62.88 per share, subject to adjustment under certain conditions. Holders may convert their Convertible Notes due 2019 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 due 2019 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 one thousand principal amount of the Convertible Notes due 2019 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 due 2019 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 due 2019 by allocating the proceeds from issuance of the Convertible Notes due 2019 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 due 2019 of $27,500 which will be accreted and recorded as additional interest expense over the life of the Convertible Notes due 2019. During 2018 , 2017 and 2016 , the Company recognized $5,690 , $5,472 and $5,237 , respectively, in accretion related to the discount. The effective interest rate of the liability component of the Convertible Notes due 2019 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 due 2019 for the years ended December 31, 2018 , 2017 and 2016 was approximately 6% . Convertible Notes due 2023 In May 2018, the Company issued $345,000 of Convertible Notes due 2023. Net proceeds from the offering were $335,018 . The Convertible Notes due 2023 bear interest at a rate of 1.75% per annum payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2018. In connection with the issuance of the Convertible Notes due 2023, the Company incurred $8,593 of issuance costs in 2018, which are presented net in non-current debt on the consolidated balance sheets. These costs are being amortized and are recorded as additional interest expense over the life of the Convertible Notes due 2023. The Convertible Notes due 2023 are general unsecured senior obligations, subordinated in right of payment to our obligations under our Credit Agreement. The Convertible Notes due 2023 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 obligations. The Convertible Notes due 2023 will be structurally subordinated to the indebtedness and other liabilities of any of our subsidiaries, other than our wholly owned subsidiary, Envestnet Asset Management, Inc., which will fully and unconditionally guarantee the notes on an unsecured basis, and other than to the extent the Convertible Notes due 2023 are guaranteed in the future by any of our other 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 due 2023 for cash at 100% of the principal amount of the Convertible Notes due 2023 being purchased, plus any accrued and unpaid interest. The Convertible Notes due 2023 are convertible into shares of the Company’s common stock under certain circumstances prior to maturity at a conversion rate of 14.6381 shares per one thousand principal amount of the Convertible Notes due 2023, which represents a conversion price of $68.31 per share, subject to adjustment under certain conditions. Holders may convert their Convertible Notes due 2023 at their option at any time prior to the close of business on the business day immediately preceding December 15, 2022, only under the following circumstances: (a) during any calendar quarter commencing after the calendar quarter ending on June 30, 2018 (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 due 2023 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 one thousand principal amount of the Convertible Notes due 2023 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; (c) if we call any or all of the Convertible Notes due 2023 for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (d) 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 due 2023 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 due 2023 by allocating the proceeds from issuance of the Convertible Notes due 2023 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 $46,611 to the equity component, net of offering costs of $1,389 . The Company recorded a discount on the Convertible Notes due 2023 of $48,000 which will be accreted and recorded as additional interest expense over the life of the Convertible Notes due 2023. During 2018 , the Company recognized $5,444 in accretion related to the discount. The effective interest rate of the liability component of the Convertible Notes due 2023 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 due 2023 for the year ended December 31, 2018 was approximately 6% . See “Note 18 – Net Income (Loss) Per Share” for further discussion of the effect of conversion on net income per common share. Credit Agreement In 2014, Envestnet and certain of its subsidiaries entered into a 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 . Since then the agreement has been amended several times and was last amended and restated in July 2017. On July 18, 2017, the Company and certain of its subsidiaries entered into a Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”) with the Banks, for which Bank of Montreal acted as administrative agent (the “Administrative Agent”). The Second Amended and Restated Credit Agreement amends and restates the Amended and Restated Credit Agreement, dated as of November 19, 2015, as amended, among the Company, the guarantors party thereto, the lenders party thereto and Bank of Montreal, as administrative agent (the “Prior Credit Facility”). Pursuant to the Second Amended and Restated Credit Agreement, the Banks agreed to provide to the Company revolving credit commitments (the “Revolving Credit Facility”) in the aggregate amount of up to $350,000 which amount may be increased by $50,000 . The Second Amended and Restated Credit Agreement also includes a $5,000 subfacility for the issuance of letters of credit. Obligations under the Second 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 Second 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 Second Amended and Restated Credit Agreement may be used to finance capital expenditures, working capital, permitted acquisitions and for general corporate purposes. The Company will pay interest on borrowings made under the Second Amended and Restated Credit Agreement at rates between 1.50% and 3.25% above LIBOR based on the Company’s total leverage ratio. Borrowings under the Second Amended and Restated Credit Agreement are scheduled to mature on July 18, 2022. There is also a commitment fee equal to 0.25% per annum on the daily unused portion of the facility. The Second Amended and Restated Credit Agreement contains customary conditions, representations and warranties, affirmative and negative covenants, mandatory prepayment provisions 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. On May 24, 2018, Envestnet Inc. and certain of its subsidiaries entered into a first amendment to the Second Amended and Restated Credit Agreement (the "Credit Agreement Amendment"). The Credit Agreement Amendment made certain technical changes to the calculations of various covenants contained in the Credit Agreement. As of December 31, 2018 , there were no revolving credit amounts outstanding under the Second Amended and Restated Credit Agreement. The July 18, 2017 amendment replaced the Term Notes and related excess cash flow payment obligations, which were issued in relation to a previous amendment, with a revolving line of credit. As of December 31, 2018 , the debt issuance costs related to the Second Amended and Restated Credit Agreement and the Prior Credit Facility are presented in prepaid expenses and other non-current assets which have outstanding amounts of $855 and $2,251 , respectively. The Second Amended and Restated Credit Agreement includes certain financial covenants and, as of December 31, 2018 , the Company was in compliance with these requirements. |
Other Non-Current Liabilities
Other Non-Current Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Other Non-Current Liabilities | Other Non-Current Liabilities Other non-current liabilities consist of the following: December 31, 2018 2017 Uncertain tax positions $ 10,394 $ 10,640 Deferred compensation liability 6,196 4,364 Other 1,415 98 Total $ 18,005 $ 15,102 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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 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 consolidated balance sheets as of December 31, 2018 and 2017 , based on the three-tier fair value hierarchy: December 31, 2018 Fair Value Level I Level II Level III Assets Money market funds and other (1) $ 265,554 $ 265,554 $ — $ — Assets to fund deferred compensation liability (2) 6,346 — — 6,346 Total assets $ 271,900 $ 265,554 $ — $ 6,346 Liabilities Contingent consideration $ 732 $ — $ — $ 732 Deferred compensation liability (3) 6,196 6,196 — — Total liabilities $ 6,928 $ 6,196 $ — $ 732 December 31, 2017 Fair Value Level I Level II Level III Assets: Money market funds (1) $ 39,400 $ 39,400 $ — $ — Assets to fund deferred compensation liability (2) 5,185 — — 5,185 Total assets $ 44,585 $ 39,400 $ — $ 5,185 Liabilities: Contingent consideration $ 2,781 $ — $ — $ 2,781 Deferred compensation liability (3) 4,364 4,364 — — Total liabilities $ 7,145 $ 4,364 $ — $ 2,781 (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 and time deposit accounts which mature on a daily basis. (2) The deferred compensation asset fair value is based upon the cash surrender value of the life insurance premiums. The Company recognized immaterial losses related to this asset within the statements of operations for the year ended December 31, 2018 , and immaterial gains related to this asset within the statements of operations for the year ended December 31, 2017 . (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. The Company recognized immaterial gains related to this liability within the statements of operations for the years ended December 31, 2018 and 2017 . Level I assets and liabilities include money-market funds not insured by the Federal Deposit Insurance Corporation (“FDIC”), deferred compensation liability, and the revolving credit facility. 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. Time deposit account fair values are determined by trade confirmations which mature daily and therefore are considered highly liquid investments. The outstanding balance on the revolving credit facility approximated fair value as the revolving credit facility bore interest at variable rates and we believe our credit risk quality was consistent with when the debt originated. Level III 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 the Wheelhouse acquisition at each reporting date until settlement. During 2017 , the FinaConnect contingent consideration liability was settled in the amount of $2,286 . During 2018 , Company paid Wheelhouse contingent consideration in the amount of $2,193 . 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 the assets to fund deferred compensation liability of which the Company measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2017 to December 31, 2018 : Fair Value of Assets to Fund Deferred Compensation Liability Balance at December 31, 2017 $ 5,185 Contributions and fair value adjustments 1,161 Balance at December 31, 2018 $ 6,346 The asset value increased due to funding of the plan partially offset by immaterial losses on the underlying investment vehicles, which resulted in an asset value of $6,346 as of December 31, 2018 , which is included in other non-current assets on the consolidated balance sheets. 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, 2017 to December 31, 2018 : Fair Value of Contingent Consideration Liabilities Balance at December 31, 2017 $ 2,781 Payment of contingent consideration liability (2,193 ) Accretion on contingent consideration 144 Balance at December 31, 2018 $ 732 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 ended December 31, 2018 . On December 15, 2014, the Company issued $172,500 of Convertible Notes due 2019. As of December 31, 2018 and 2017 , the carrying value of the Convertible Notes due 2019 equaled $165,711 and $158,990 , respectively, and represented the aggregate principal amount outstanding less the unamortized discount and debt issuance costs. As of December 31, 2018 and 2017 , the estimated fair value of the Convertible Notes due 2019 was $174,101 and $180,180 , respectively. The Company considered the Convertible Notes due 2019 to be a Level II liability as of December 31, 2018 and 2017 , and used a market approach to calculate the fair value. The estimated fair value was determined based on the estimated or actual bids and offers of the Convertible Notes due 2019 in an over-the-counter market on or near December 31, 2018 (see “Note 12 – Debt”). On May 25, 2018, the Company issued $345,000 of Convertible Notes due 2023. As of December 31, 2018 , the carrying value of the Convertible Notes due 2023 equaled $294,725 , and represented the aggregate principal amount outstanding less the unamortized discount and debt issuance costs. As of December 31, 2018 , the estimated fair value of the Convertible Notes due 2023 was $339,024 . The Company considered the Convertible Notes due 2023 to be a Level II liability as of December 31, 2018 and 2017, and used a market approach to calculate the fair value. The estimated fair value was determined based on the estimated or actual bids and offers of the Convertible Notes due 2023 in an over-the-counter market on or near December 31, 2018 (see “Note 12 – Debt”). As of December 31, 2018 and 2017 , there was $0 and $81,168 , respectively, outstanding on the revolving credit facility under the Second Amended and Restated Credit Agreement. As of December 31, 2017 , the outstanding balance on our revolving credit facility approximated fair value as the revolving credit facility bore interest at variable rates and we believed our credit risk quality was consistent with when the debt originated. The Company considered the revolving credit facility to be a Level I liability as of December 31, 2018 and 2017 (see “Note 12 – Debt”). 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, 2018 based upon the short-term nature of the assets and liabilities. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income (loss) before income tax provision (benefit) was generated in the following jurisdictions: Year Ended December 31, 2018 2017 2016 Domestic $ (18,242 ) $ (9,387 ) $ (47,059 ) Foreign 9,080 7,698 6,569 Total $ (9,162 ) $ (1,689 ) $ (40,490 ) The components of the income tax provision (benefit) charged to operations are summarized as follows: Year Ended December 31, 2018 2017 2016 Current: Federal 4,564 $ (1,201 ) $ 3,812 State 1,044 951 1,172 Foreign 4,849 6,438 4,509 10,457 6,188 9,493 Deferred: Federal (19,444 ) (4,439 ) 5,992 State (3,182 ) 146 117 Foreign (1,003 ) (304 ) (525 ) (23,629 ) (4,597 ) 5,584 Total $ (13,172 ) $ 1,591 $ 15,077 Net deferred tax assets (liabilities) consist of the following: December 31, 2018 2017 Deferred revenue $ 5,642 $ 5,723 Prepaid expenses and accruals 3,302 1,459 Deferred rent and lease incentives 4,255 3,419 Net operating loss and tax credit carryforwards 78,689 66,896 Property and equipment and intangible assets (73,778 ) (51,182 ) Stock-based compensation expense 7,667 6,894 Convertible Notes (11,918 ) (2,886 ) Other 1,032 1,221 Total deferred tax assets 14,891 31,544 Less: valuation allowance (15,531 ) (32,513 ) Net deferred tax liabilities $ (640 ) $ (969 ) On December 22, 2017 the Tax Cuts and Jobs Act (“the Act”) was signed into United States law. The Act significantly changes U.S. income tax law and is the first major overhaul of the federal income tax code in more than 30 years. Key provisions of the Act that may impact the Company include: (i) reduction of the U.S. federal corporate income tax rate from 35% to 21%, (ii) repeal of the Corporate Alternative Minimum Tax (“AMT”) system, (iii) replacement of the worldwide taxation system with a territorial tax system which exempts certain foreign operations from U.S. taxation but also taxes certain foreign income under a new regime, called Global Intangible Low-Taxed Income ("GILTI"), (iv) further limitation on the deductibility of certain executive compensation, (v) modification of earnings calculations for certain foreign subsidiaries that were previously tax deferred to a one-time tax, (vi) creation of a new base erosion anti-abuse tax (Base Erosion Anti-Abuse Tax, or "BEAT"), (vii) allowance for immediate capital expensing of certain qualified property, (viii) limitation on the deduction for net interest expense incurred by a U.S. corporation, and (ix) modification and/or repeal of a number of other international provisions. Due to the complexities involved in accounting for the enactment of the Tax Reform, SAB 118 allowed us to record provisional amounts in earnings for the year ended December 31, 2017. In 2017 and the first nine months of 2018, we recorded provisional amounts for certain enactment-date effects of the Act by applying the guidance in SAB 118 because we had not yet completed our enactment-date accounting for these effects. SAB 118 provides that where reasonable estimates can be made, the provisional accounting should be based on such estimates and when no reasonable estimate can be made, the provisional accounting may be based on the tax law in effect before the Tax Reform. SAB 118 allowed a measurement period of up to one year from the enactment date to identify Tax Reform impacts. As of the period ended December 31, 2018, we completed our analysis of the Tax Reform on our consolidated financial statements and recorded additional tax expense of $814 primarily related to the one-time tax on deferred foreign earnings in the tax provision. Our accounting for the final income tax effects of the Tax Reform has been finalized and the measurement period under SAB 118 ended during the period ended December 31, 2018. Despite the completion of our accounting for the Tax Reform under SAB 118, many aspects of the law remain unclear and we expect ongoing guidance to be issued at both the federal and state levels. We will continue to monitor and assess the impact of any new developments. Related to the Act's new provision on GILTI, under GAAP, the Company is allowed to make an accounting policy choice to either (i) treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the "period cost method"); or (ii) factor in such amounts into the measurement of our deferred taxes (the "deferred method"). The selection of an accounting policy related to the GILTI tax provisions depends, in part, on analyzing our global income to determine whether the Company expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. While the future global operations depend on a number of different factors, the Company does expect to have future U.S. inclusions in taxable income related to GILTI. Further, the Company has made a policy decision to record GILTI tax as a current-period expense when incurred. In addition, the BEAT provision has an impact on the Company in the current year. In accordance with FASB guidance, the incremental effect of BEAT is recognized in the year the BEAT is incurred and also there is no need to evaluate the effect of potentially paying the BEAT in future years. The current year estimated BEAT liability and therefore impact to the Company's tax expense is $3,760 . The valuation allowance for net deferred tax assets as of December 31, 2018 and 2017 was $15,531 and $32,513 , respectively. The change in the valuation allowance from 2017 to 2018 was primarily related to the acquisition of Folio and the Company's convertible debt incurred in 2018 in addition to the current year movement related to the amortization of book intangible assets. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some or all of the deferred tax assets will be realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence is the cumulative loss incurred over the three-year period ended December 31, 2018 . Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as of December 31, 2018 , a valuation allowance of $15,531 has been recorded to record only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence 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. Prior to December 31, 2017, the Company did not claim permanent reinvestment of our accumulated foreign earnings, and recorded taxes on these earnings. The amount of this estimated liability at December 31, 2016 was approximately $4,500 . As of December 31, 2017, the Company changed our position on this matter and claimed permanent reinvestment on accumulated earnings of approximately $20,600 . As of December 31, 2018, the Company has claimed permanent reinvestment on accumulated earnings of approximately $33,000 . Post Tax Reform, the primary deferred tax liability that is not being recorded by the Company relates to India withholding tax. The reinvested foreign earnings of the Company will be used to fund future foreign acquisitions, capital expenditures, headcount expansion and other operating expenses. As these earnings will be permanently reinvested in the foreign jurisdictions, deferred taxes were not recorded. The expected tax provision (benefit) calculated at the statutory federal rate differs from the actual provision as follows: Year Ended December 31, 2018 2017 2016 Tax provision (benefit), at U.S. federal statutory tax rate $ (1,559 ) $ (573 ) $ (13,767 ) State income tax provision (benefit), net of federal benefit (1,714 ) (1,251 ) (2,053 ) Effect of stock-based compensation excess tax benefit (7,782 ) (11,522 ) — Effect of permanent items 2,967 1,145 1,773 Change in valuation allowance (4,244 ) 2,151 26,269 Effect of change in federal income tax rate — 13,792 — Effect of change in state and foreign income tax rates (269 ) 537 279 Uncertain tax positions (2,062 ) 3,668 2,024 BEAT liability 3,760 — — Research and development credits (4,770 ) (2,815 ) (2,758 ) Change in permanent reinvestment assertion — (4,494 ) — State net operating loss adjustment, net of valuation allowance impact — 836 — Other 2,501 117 3,310 Income tax provision $ (13,172 ) $ 1,591 $ 15,077 At December 31, 2018 , the Company had NOL carryforwards, before any uncertain tax position reserves, for federal income tax purposes of approximately $267,000 which are available to offset future federal taxable income, if any, and expire through 2038. In addition, as of December 31, 2018 , the Company had NOL carryforwards for state income tax purposes of approximately $153,000 available to reduce future income subject to income taxes. The state NOL carryforwards expire through 2038. In addition, at December 31, 2018 , the Company had AMT credit carryforwards of approximately $1,455 for Federal purposes. As a result of tax reform, AMT credits are refundable for any taxable year beginning after 2017 and before 2022 in an amount equal to 50% ( 100% in the case of taxable years beginning in 2021) of the excess of the minimum tax credit for the taxable year over the amount of the credit allowable for the year against regular tax liability. Thus, the minimum tax credit was reclassified from a deferred tax asset to an income tax receivable. The Company also had AMT credits of $19 for California, which are available to reduce future California income taxes, if any, over an indefinite period. In addition, the Company had research and development credit carryforwards of approximately $15,259 for federal and $9,452 for California and Illinois, as well as foreign tax credits of $1,401 available to offset federal income tax. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows: Year Ended December 31, 2018 2017 2016 Unrecognized tax benefits balance at beginning of year $ 18,312 $ 16,476 $ 14,129 Additions based on tax positions related to the current year 1,907 1,691 1,153 Additions based on tax positions related to prior years (3,976 ) 145 1,257 Reductions for settlements with taxing authorities related to prior years (615 ) — — Reductions for lapses of statute of limitations — — (63 ) Unrecognized tax benefits balance at end of year $ 15,628 $ 18,312 $ 16,476 At December 31, 2018 , the amount of unrecognized tax benefits that would benefit the Company’s effective tax rate, if recognized, was $15,628 . 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, 2018 and 2017 , income tax expense included $126 and $1,690 , respectively, of potential interest and penalties related to unrecognized tax benefits. The Company had accrued interest and penalties of $5,977 and $6,018 as of December 31, 2018 and 2017 , 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 was notified by the Internal Revenue Service as of December 18, 2017 that the calendar year 2015 and 2016 federal income tax returns have been have been selected for audit by the Internal Revenue Service. As of the date of this report, no additional taxes had been assessed, as the audit has not yet concluded. The Company’s tax returns for the calendar years ended December 31, 2017, 2016, and 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, 2017, 2016, 2015, and 2014 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, 2005, 2008, 2011, 2012, 2013, 2014, 2015, 2016, and 2017. Based on the outcome of examinations of our subsidiary or the result of the expiration of statutes of limitations it is reasonably possible that the related unrecognized tax benefits could change from those recorded in the consolidated balance sheet. It is possible that one or more of these audits may be finalized within the next twelve months. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity 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 each of the years ended December 31, 2018 and 2017 , the Company purchased no shares of the Company’s common stock. As of both December 31, 2018 and 2017 , a maximum of 1,956,390 shares may yet be purchased under this program. On December 20, 2018, the Company issued and sold to BlackRock, Inc. (“BlackRock”) approximately 2,356,000 common shares at a purchase price of $52.13 per share, and warrants to purchase approximately 470,000 common shares at an exercise price of $65.16 per share, subject to customary anti-dilution adjustments. The warrants are exercisable at BlackRock’s option for four years from the date of issuance. The warrants may be exercisable through cash exercise or net issue exercise with cash settlement at the sole discretion of the Company. The gross proceeds received of approximately $122,788 were allocated to the common shares and the warrants and recorded within stockholders’ equity. In connection with this transaction, the Company incurred total transaction costs of approximately $4,627 and recorded them as a reduction in equity. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 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 canceled 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 and July 13, 2017, the shareholders approved the 2010 Long-Term Incentive Plan as Amended. The amendments increased the number of common shares of the Company reserved for delivery under the 2010 Plan by 2,700,000 shares and 3,525,000 shares, respectively. As a result of the merger between Envestnet and Tamarac, 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, 2017, all 559,551 shares of restricted stock had vested. 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, 2018 , the maximum number of options and restricted stock available for future issuance under the Company’s plans is 3,078,360 . Employee stock-based compensation expense was as follows: Year Ended December 31, 2018 2017 2016 Stock-based compensation expense $ 40,245 $ 31,331 $ 33,276 Tax effect on stock-based compensation expense (10,093 ) (11,906 ) (13,001 ) Net effect on income $ 30,152 $ 19,425 $ 20,275 The tax effect on stock-based compensation expense above was calculated using a blended statutory rate of 25.1% , 38.0% , and 39.1% for the years ended December 31, 2018 , 2017 and 2016 , respectively. However, due to the valuation allowance recorded on domestic deferreds, there was no tax effect related to stock-based compensation expense for the years ended December 31, 2018 , 2017 and 2016 , respectively. Stock Options The following weighted average assumptions were used to value options granted during the periods indicated: December 31, 2018 2017 2016 Grant date fair value of options $ — $ 14.51 $ 9.56 Volatility — 43.8 % 42.2 % Risk-free interest rate — 2.1 % 1.4 % Dividend yield — — — Expected term (in years) — 6.3 6.3 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, 2015 3,533,791 $ 15.03 4.7 $ 61,199 Granted 163,864 22.38 Exercised (598,382 ) 8.23 Forfeited (66,079 ) 35.08 Outstanding as of December 31, 2016 3,033,194 16.33 4.3 63,264 Granted 75,238 31.70 Exercised (837,857 ) 9.49 Forfeited (16,010 ) 37.42 Outstanding as of December 31, 2017 2,254,565 19.23 4.3 69,939 Granted — — Exercised (359,345 ) 14.76 Forfeited (7,251 ) 27.51 Outstanding as of December 31, 2018 1,887,969 20.05 3.4 56,046 Options exercisable 1,830,082 19.78 3.3 54,837 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, 2018 , 2017 and 2016 of $49.19 , $49.85 and $35.25 , 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. Other information is as follows: Year Ended December 31, 2018 2017 2016 Total intrinsic value of options exercised $ 15,667 $ 29,562 $ 14,165 Cash received from exercises of stock options 5,305 7,951 4,924 Exercise prices of stock options outstanding as of December 31, 2018 range from $7.15 to $55.29 . At December 31, 2018 , there was $632 of unrecognized compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 1.0 year s. Restricted Stock Units and Restricted Stock Awards Periodically, the Company grants restricted stock unit awards to employees. 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. For grants issued prior to February 2016, restricted stock units awards would vest ratably in three annual tranches from the date of grant. The following is a summary of the activity for unvested restricted stock units and awards granted under the Company’s plans: Weighted- Average Grant Number of Date Fair Value Shares per Share Outstanding as of December 31, 2015 2,153,211 $ 35.63 Granted 1,009,661 28.82 Vested (1,082,206 ) 29.12 Forfeited (185,907 ) 30.96 Outstanding as of December 31, 2016 1,894,759 30.40 Granted 959,591 32.38 Vested (969,513 ) 31.51 Forfeited (118,198 ) 30.11 Outstanding as of December 31, 2017 1,766,639 32.48 Granted 996,099 55.42 Vested (1,073,681 ) 32.62 Forfeited (103,269 ) 40.37 Outstanding as of December 31, 2018 1,585,788 46.33 At December 31, 2018 , there was $55,427 of unrecognized compensation expense related to unvested restricted stock unit awards, which the Company expects to recognize over a weighted-average period of 1.9 years . 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 has attributed 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, 2018 , the remaining amount of unrecognized expense totaled $767 . 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, and four of whom also received a total of 125,000 restricted stock units awards in August 2016 which vest quarterly thereafter. The Target Performance Measures for the Performance Periods, as defined in the employment agreements, were achieved as of December 31, 2016 and these shares will fully vest in May 2019. During March 2018 and July 2018, the Company granted approximately 26,000 and 30,000 performance-based restricted stock unit awards to certain employees, respectively. These performance-based restricted unit awards vest upon the achievement of certain pre-established business and financial metrics as well as service condition. The business and financial metrics governing the vesting of these performance-based restricted stock unit awards provide thresholds which dictate the number of shares to vest upon each evaluation date, which range from 50% to 150% . If these metrics are achieved, as defined in the individual grant terms, these shares would cliff vest three years from the grant date. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income or loss per common share is computed by dividing net income or loss 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 awards, restricted stock units and Convertible Notes using the treasury stock method, if dilutive. 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 and $68.31 per share, respectively, or if the trading price of the Convertible Notes meets certain criteria as described in “Note 12 – Debt.” In the period of conversion, the Convertible Notes will have no impact on diluted earnings per share if the Convertible Notes are settled in cash and will have an impact on basic and diluted earnings 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 (loss) per share attributable to common stockholders: Year Ended December 31, 2018 2017 2016 Basic income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ 5,755 $ (3,280 ) $ (55,567 ) Basic number of weighted-average shares outstanding 45,268,002 43,732,148 42,814,222 Basic $ 0.13 $ (0.08 ) $ (1.30 ) Diluted income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ 5,755 $ (3,280 ) $ (55,567 ) Basic number of weighted-average shares outstanding 45,268,002 43,732,148 42,814,222 Effect of dilutive shares: Options to purchase common stock 1,304,493 — — Unvested restricted stock units 811,590 — — Diluted number of weighted-average shares outstanding 47,384,085 43,732,148 42,814,222 Diluted $ 0.12 $ (0.08 ) $ (1.30 ) Securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share are as follows: December 31, 2018 2017 2016 Options to purchase common stock — 2,254,565 3,033,194 Unvested restricted stock awards and units — 1,766,639 1,894,759 Warrants - private placement 470,000 — — Convertible Notes 7,793,826 2,743,321 2,743,321 Total 8,263,826 6,764,525 7,671,274 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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: 2019 $ 15,997 2020 15,437 2021 14,705 2022 10,816 2023 9,910 Thereafter 39,449 Total $ 106,314 Rent expense for all operating leases totaled: Year Ended December 31, 2018 2017 2016 Rent expense $ 19,658 $ 18,084 $ 14,984 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, 2018 , the Company estimated future minimum unconditional purchase obligations of $41,112 . Legal Proceedings The Company is involved in legal proceedings arising in the ordinary course of its business. Legal fees and other costs associated with such actions are expensed as incurred. The Company will record a provision for these claims when it is both probable that a liability has been incurred and the amount of the loss, or a range of the potential loss, can be reasonably estimated. These provisions are reviewed regularly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information or events pertaining to a particular case. Legal proceedings 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, 2018 . Further, while any possible range of loss cannot be reasonably estimated at this time, the Company does not believe that the outcome of any of these proceedings, individually or in the aggregate, would, if determined adversely to it, have a material adverse effect on its financial condition or business, although an adverse resolution of legal proceedings could have a material adverse effect on the Company’s results of operations or cash flow in a particular quarter or year. Contingencies Certain of the Company’s revenues are subject to sales and use taxes in certain jurisdictions where it conducts business in the United States. During 2018 and 2017 , the Company estimated that a sales and use tax liability of $8,643 and $8,522 , respectively, was probable related to multiple taxing jurisdictions with respect to revenues in the years ended December 31, 2018 and December 31, 2017 , and prior years. This amount is included in accrued expenses and other liabilities on the consolidated balance sheets. For the years ended December 31, 2018 and 2017 , the Company also estimated a sales and use tax receivable of $5,246 and $2,704 , respectively, related to the estimated recoverability of a portion of the liability from customers. This amount is included in prepaid expenses and other current assets 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. |
Benefit Plan
Benefit Plan | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Benefit Plan | 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, 2018 2017 2016 Voluntary employer matching contributions $ 4,778 $ 4,038 $ 2,270 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Business segments are generally organized around our business services. Our business segments are: • Envestnet – a leading provider of unified wealth management software and services to empower financial advisors and institutions. • Envestnet | Yodlee TM – leading data aggregation and data analytics 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. Inter-segment revenues were not material for the year ended December 31, 2018 . The accounting policies of the reportable business segments are the same as those described in “Note 2 – Summary of Significant Accounting Policies.” The following table presents revenue by segment: Year Ended December 31, 2018 2017 2016 Revenue: Envestnet Asset-based $ 481,233 $ 410,016 $ 352,498 Subscription-based 138,372 106,048 84,340 Total recurring revenues 619,605 516,064 436,838 Professional services and other 13,000 11,841 10,794 Total Envestnet segment revenues 632,605 527,905 447,632 Envestnet | Yodlee Subscription-based 157,095 139,819 113,785 Professional services and other 22,663 15,955 16,747 Total Envestnet | Yodlee segment revenues 179,758 155,774 130,532 Consolidated revenue $ 812,363 $ 683,679 $ 578,164 Fidelity revenue as a percentage of Envestnet segment revenue: 21 % 22 % 19 % 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 (loss) attributable to Envestnet, Inc.: Year Ended December 31, 2018 2017 2016 Envestnet $ 75,491 $ 75,449 $ 41,678 Envestnet | Yodlee (10,013 ) (19,456 ) (38,547 ) Total segment income from operations 65,478 55,993 3,131 Nonsegment operating expenses (51,313 ) (39,573 ) (26,575 ) Interest expense, net (22,840 ) (16,146 ) (16,563 ) Other expense, net (487 ) (1,963 ) (483 ) Consolidated loss before income tax provision (benefit) (9,162 ) (1,689 ) (40,490 ) Income tax provision (benefit) (13,172 ) 1,591 15,077 Consolidated net income (loss) 4,010 (3,280 ) (55,567 ) Add: Net loss attributable to non-controlling interest 1,745 — — Consolidated net income (loss) attributable to Envestnet, Inc. $ 5,755 $ (3,280 ) $ (55,567 ) Segment assets primarily consist of cash, accounts receivable, prepaid expenses and other current assets, property and equipment, net, internally developed software, goodwill, intangible assets, net, deferred tax assets and other non-current assets. Segment capital expenditures consist of property and equipment and internally developed software expenditures. A summary of consolidated total assets, consolidated depreciation and amortization and consolidated capital expenditures by segment follows: December 31, 2018 2017 Segment assets: Envestnet $ 810,971 $ 353,048 Envestnet | Yodlee 502,776 509,004 Consolidated total assets $ 1,313,747 $ 862,052 Year Ended December 31, 2018 2017 2016 Segment depreciation and amortization: Envestnet $ 45,139 $ 26,223 $ 24,784 Envestnet | Yodlee 32,487 36,597 39,215 Consolidated depreciation and amortization $ 77,626 $ 62,820 $ 63,999 Year Ended December 31, 2018 2017 2016 Segment capital expenditures: Envestnet $ 36,406 $ 22,434 $ 17,120 Envestnet | Yodlee 8,186 5,135 5,456 Consolidated capital expenditures $ 44,592 $ 27,569 $ 22,576 |
Geographical Information
Geographical Information | 12 Months Ended |
Dec. 31, 2018 | |
Segments, Geographical Areas [Abstract] | |
Geographical Information | Geographical Information The following table sets forth property and equipment, net by geographic area: December 31, 2018 2017 United States $ 39,412 $ 30,647 India 3,969 4,907 Other 1,610 355 Total $ 44,991 $ 35,909 |
Net Capital Requirements
Net Capital Requirements | 12 Months Ended |
Dec. 31, 2018 | |
Regulatory Capital Requirements [Abstract] | |
Net Capital Requirements | 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, 2018 , the Company had net capital of $1,259 , which was $1,159 in excess of its required net capital of $100 . At December 31, 2018 , the Company’s net capital ratio was 0.03 to 1. Additionally, PBS is subject to net capital requirements of certain self-regulatory organizations and at December 31, 2018 , PBS was in compliance with such requirements. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Acquisition of private company On January 2, 2019, pursuant to an agreement and plan of merger dated as of January 2, 2019 between Envestnet | Yodlee and a private company that provides conversational artificial intelligence tools and applications to financial services firms, the private company merged with and into Envestnet | Yodlee (the “Acquisition”). The completion of the Acquisition on January 2, 2019 followed the receipt of all necessary regulatory approvals and third party consents. In connection with the Acquisition, the Company will pay estimated consideration of $18,500 for all the outstanding shares of the private company, subject to certain closing and post-closing adjustments. The private company improves the way Financial Service Providers (“FSPs”) can interact with their consumers, and supports these F SPs to better engage, support, and assist their consumers leveraging this latest wave of customer-centric capabilities. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) Quarterly results for the years ended December 31, 2018 and 2017 were as follows: 2018 First Second Third Fourth Total revenues $ 198,011 $ 201,116 $ 203,156 $ 210,080 Income (loss) from operations (738 ) 5 3,395 11,503 Net income (loss) attributable to Envestnet, Inc. 8,104 (5,526 ) 2,954 223 Net income (loss) per share attributable to Envestnet, Inc.: Basic (1) 0.18 (0.12 ) 0.06 — Diluted (1)(2) 0.17 (0.12 ) 0.06 — 2017 First Second Third Fourth Total revenues $ 157,786 $ 167,417 $ 175,614 $ 182,862 Income (loss) from operations (3,354 ) 2,743 4,348 12,683 Net income (loss) attributable to Envestnet, Inc. (13,135 ) (6,470 ) (1,320 ) 17,645 Net incomes (loss) per share attributable to Envestnet, Inc.: Basic (1) (0.30 ) (0.15 ) (0.03 ) 0.40 Diluted (1)(2) (0.30 ) (0.15 ) (0.03 ) 0.38 ________________________________________________________ (1) Quarterly values may not sum to annual values due to rounding. (2) Quarterly values may not sum to annual values due to differences in quarterly dilution compared to year to date dilution. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
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, fair value of warrants issued, commitments and contingencies 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 derives revenues from asset-based services, subscription-based services and professional services and other sources. Revenues are recognized when control of these services is transferred to our customers, in an amount that reflects the consideration that we expect to be entitled to in exchange for those services. All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers. Sales and usage-based taxes are excluded from revenues. Asset-based recurring revenues— Asset-based recurring revenues primarily consist of fees for providing customers continuous access to platform services through the Company’s uniquely customized platforms. These platform services include investment manager 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 and are made available to customers throughout the contractual term from the date the customized platform is launched. The asset-based fees the Company earns are generally based upon variable percentages of assets managed or administered on our platforms. The fee percentage varies based on the level and type of services the Company provides to its customers, as well as the values of existing customer accounts. The values of the customer accounts are affected by inflows or outflows of customer funds and market fluctuations. The platform services are substantially the same over each quarter and performed in a similar manner over the contract period, and are considered stand-ready promises. The platform services that are delivered to the customer over the quarter are considered distinct, as the customer benefits distinctly from each increment of our services and each quarter is separately identified in the contract, and are considered to be a single performance obligation under the new revenue standard. The pricing generally resets each quarter and the pricing structure is consistent throughout the term of the contract. The variable fees are generally calculated and billed quarterly in advance based on preceding quarter-end values and the variable amounts earned from the platform services relate specifically to the benefits transferred to the customer during that quarter. Accordingly, revenue is allocated to the specific quarter in which services are performed. The asset-based contracts generally contain performance obligations and revenue is recognized on a ratable basis over the quarter beginning on the date that the platform services are made available to the customer as the customer simultaneously consumes and receives the benefits of the services. All asset-based fees are recognized in the Envestnet segment. For certain services provided by third parties, the Company evaluates whether it is the principal (revenues reported on a gross basis) or agent (revenues reported on a net basis). Generally, the Company reports customer fees including charges for third party service providers where the Company has a direct contract with such third party service providers on a gross basis, whereas the amounts billed to its customers are recorded as revenues, and amounts paid to third party service providers are recorded as cost of revenues. The Company is the principal in the transaction because it controls the services before they are transferred to its customers. Control is evidenced by the Company being primarily responsible to its customers and having discretion in establishing pricing. Subscription-based recurring revenues— Subscription-based recurring revenues primarily consist of fees for providing customers continuous access to the Company’s platform for wealth management and financial wellness. The subscription-based fees generally include fixed fees and or usage-based fees. Generally, the subscription services are substantially the same over each quarter and performed in a similar manner over the contract period, and are considered stand-ready promises. Quarterly subscription services are considered distinct as the customer can benefit from each increment of services on its own and each quarter is separately identified in the contract, and services are considered to be a single performance obligation under the new revenue standard. The usage-based pricing generally resets each quarter and the pricing structure is generally consistent throughout the term of the contract. The fixed fees are generally calculated and billed quarterly in advance. The usage-based fees are generally calculated and are billed either monthly or quarterly based on the actual usage and relate specifically to the benefits transferred to the customer during that quarter. Accordingly, revenue is allocated to the specific quarter in which services are performed. Certain subscription-based contracts contain multiple performance obligations (i.e. platform services performance obligation and professional services performance obligation). Fixed fees are generally recognized on a ratable basis over the quarter beginning when the subscription services are made available to the customer, as the customer simultaneously receives and consumes the benefits of the subscription services. Usage-based revenue is recognized on a monthly basis as the customer receives and consumes the benefit as the Company provides the services. Subscription-based fees are recognized in both the Envestnet and Envestnet | Yodlee segments. Professional services and other revenues— The Company earns professional services fees by providing contractual customized services and platform software development as well as initial implementation fees. Professional services contracts generally have fixed prices, and generally specify the deliverables in the contract. Certain professional services contracts are billed on a time and materials basis and revenue is recognized over time as the services are performed. For contracts billed on a fixed price basis, revenue is recognized over time based on the proportion of services performed. Initial implementation fees are fixed and recognized ratably over the contract term. Other revenue primarily includes revenue related to the Advisor Summit. Other revenue is recognized when the events are held. Other revenue is not significant. The majority of the professional services and other contracts contain one performance obligation. Professional services and other revenues are recognized in both the Envestnet and Envestnet | Yodlee segments. Arrangements with multiple performance obligations — Certain of the Company’s contracts with customers contain multiple performance obligations such as platform services performance obligation and professional services performance obligation. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. Standalone selling prices of services are estimated based on observable transactions when these services are sold on a standalone basis or based on expected cost plus margin. Contract Balances —The Company records contract liabilities (deferred revenue) when cash payments are received in advance of its performance. The term between invoicing date and when payment is due is generally not significant. For the majority of its arrangements, the Company requires advance quarterly payments before the services are delivered to the customer. Contract assets would exist when revenues have been recorded (i.e. control of goods or services has been transferred to the customer) but customer payment is contingent on a future event beyond the passage of time (i.e. satisfaction of additional performance obligations). The Company does not have any material contract assets. Unbilled receivables, which are not classified as contract assets, represent arrangements in which revenues have been recorded prior to billing and right to payment is unconditional. Deferred revenue primarily consists of implementation fees, professional services, and subscription fee payments received in advance from customers. Deferred sales incentive compensation —Sales incentive compensation earned by the Company’s sales force is considered an incremental and recoverable cost to acquire a contract with a customer. Sales incentive compensation for initial contracts is deferred and amortized on a straight-line basis over the period of benefit, which the Company has determined to be five years. The Company determined the period of benefit by taking into consideration its customer contracts, life of the technology and other factors. Sales incentive compensation for renewal contracts are deferred and amortized on a straight-line basis over the related contractual renewal period. Deferred sales incentive compensation is included in other non-current assets on the consolidated balance sheet and amortization expense is included in compensation and benefits expenses on the consolidated statements of operations. The Company has applied the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in compensation and benefits expenses on the consolidated statements of operations. 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. |
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. |
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. |
Investments | Investments— The Company has investments that are recorded either at cost or using the equity method of accounting. 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 all 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% ownership and lack of control. The Company’s interest in the earnings or losses of the privately held companies will be reflected in other 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 $0 , $0 and $734 in impairments to investments during the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Property and Equipment | Property and Equipment— Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of furniture and equipment is computed using the straight-line method based on estimated useful lives of the depreciable assets. Leasehold improvements are amortized on a straight-line basis over their estimated economic useful lives or the remaining lease term, whichever is shorter. Improvements are capitalized, while repairs and maintenance costs are charged to operations as incurred. Assets are reviewed for recoverability whenever events or circumstances indicate the carrying value may not be recoverable. |
Internally Developed Software for Internal Use | 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. |
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 qualitative or quantitative process that is performed at least annually or whenever events or circumstances indicate that impairment may have occurred. The Company performs the annual impairment analysis on 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 quantitative 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 quantitative goodwill impairment evaluation. If it is determined that the carrying value may exceed fair value when considering qualitative factors, a quantitative goodwill impairment evaluation is performed. When performing the quantitative evaluation, if the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the difference will be recorded. No goodwill impairment charges have been recorded for the years ended December 31, 2018 , 2017 and 2016 . 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, 2018 , 2017 and 2016 . |
Operating 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 | 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 2018 and 2017 , the Company estimated that a sales and use tax liability of $8,643 and $8,522 , respectively, was probable related to multiple taxing jurisdictions with respect to revenues in the years ended December 31, 2018 and December 31, 2017 , and prior years. This amount is included in accrued expenses and other liabilities on the consolidated balance sheets. For the same periods, the Company also estimated a sales and use tax receivable of $5,246 and $2,704 , respectively, related to estimated recoverability of a portion of the liability. This amount is included in prepaid expenses and other current assets on the consolidated balance sheets. For the years ended December 31, 2018 , 2017 and 2016 the Company recorded a net sales and use tax benefit of $1,176 including interest of $130 , and a net sales and use tax expense of $345 and $6,229 including interest of $244 and $914 , respectively. The sales and use tax adjustment was recorded in general and administration on the consolidated statements of operations. Additional future information obtained from the applicable jurisdictions may affect the Company’s estimate of its sales and use tax liability. |
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. The Company estimates the expected life of its options using historical internal forfeiture data. The Company estimates stock-price volatility using historical third-party quotes of Envestnet’s common stock. 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. |
Convertible Notes | Convertible Notes —On December 15, 2014, the Company issued $172,500 of 1.75% convertible notes due December 2019 (the “2019 Notes”). In May 2018, the Company issued $345,000 of 1.75% convertible notes due June 2023 (the “2023 Notes”). Collectively 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. |
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. Primarily due to the issuance of units related to the contributions of FinaConnect, Inc. (“FinaConnect”) and Castle Rock Innovations, Inc. and the purchase of additional ERS units acquired from the former owners of Klein Decisions, Inc. the Company’s ownership in ERS increased to 81.5% as of December 31, 2016. During the year ended December 31, 2018 , the Company purchased all remaining outstanding units for approximately $6,560 , which increased the Company’s ownership percentage to 100% as of December 31, 2018 . 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, 2018 , 2017 and 2016 , reflected as non-controlling interest in the consolidated statements of operations related to ERS. In March 2018, the Company purchased 4,000 units representing approximately 43% of the outstanding membership interests of a private company for cash consideration of $1,333 and granted the Company the ability to appoint two members to the private Company's board of directors. The appointment of two board members gives the Company the majority of the board's voting power, therefore the Company uses the consolidation method of accounting for this investment. The private company was formed to enable financial advisors to provide insurance and income protection products to their clients. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements — In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which amends the existing accounting standards for revenue recognition. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2017. These changes became effective for the Company's fiscal year beginning January 1, 2018 and have been reflected in these consolidated 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 (“ROU”) 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 and will be applied using a modified retrospective approach with optional practical expedients. Early adoption of the standard is permitted. The Company will adopt the new standard on its effective date of January 1, 2019 using the cumulative-effect adjustment transition method with certain available transitional practical expedients. The Company has substantially completed the implementation of key changes to internal controls over financial reporting to allow it to timely compile the information needed to account for transactions under this new guidance. The standard will have a material impact on our consolidated balance sheets and related disclosures but will not have a material impact on our consolidated income statements. The most significant impact will be the recognition of ROU assets and lease liabilities for operating leases. The Company currently estimates adoption of ASU 2016-02 will result in the recognition of ROU assets and lease liabilities for operating leases of approximately $66,000 and $84,000, respectively, as of January 1, 2019. The difference between the ROU assets and lease liabilities primarily represents the existing deferred rent liabilities, resulting from historical straight-lining of operating leases, which was reclassified upon adoption to reduce the measurement of the ROU assets. 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. These changes became effective for the Company’s fiscal year beginning January 1, 2017 and have been reflected in these consolidated financial statements. As a result of the retrospective adoption of ASU 2016-09, for the year ended December 31, 2016 net cash provided by operating activities increased by $4,455 with a corresponding offset to net cash used in financing activities. The Company did not elect an accounting policy change to record forfeitures as they occur and will continue to estimate forfeitures at each period. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326)". This update significantly changes the way that entities will be required to measure credit losses. The new standard requires that entities estimate credit losses based upon an "expected credit loss" approach rather than the "incurred loss" approach, which is currently used. The new approach will require entities to measure all expected credit losses for financial assets based on historical experience, current conditions, and reasonable forecasts of collectability. The change in approach is anticipated to impact the timing of recognition of credit losses. This ASU will become effective for beginning January 1, 2020. Early adoption is permitted for fiscal years beginning January 1, 2019. The Company is currently evaluating the potential impact of this guidance on our consolidated financial statements. 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 statement of cash flows. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2017. These changes became effective for the Company’s fiscal year beginning January 1, 2018 and have been reflected in these consolidated financial statements. Retrospective adoption of ASU 2016-15 did not have a material impact on the Company’s presentation of the consolidated statements of cash flows In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) – Restricted Cash,” which amends ASC 230 to provide clarifying guidance on the classification and presentation of restricted cash in the statement of cash flows. Additional disclosure is required to reconcile between the statement of financial position and the statement of cash flows when the statement of financial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2017. These changes became effective for the Company’s fiscal year beginning January 1, 2018 and included $326 and $2,148 of restricted cash in the total of cash, cash equivalents and restricted cash in the consolidated balance sheets at December 31, 2018 and 2017, respectively. A reconciliation of restricted cash for each period is included within this footnote. In January 2017, the FASB issued ASU 2017-01, “Business Combinations: Clarifying the Definition of a Business (Topic 805),” which provides a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2017. These changes became effective for the Company’s fiscal year beginning January 1, 2018 and did not have a material impact to these consolidated financial statements. This standard will be applied to all future business acquisition and disposal transactions. In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350),” which removes step two from the goodwill impairment test. As a result, an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units’ fair value. This standard will be effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company has adopted this standard as of April 1, 2017, however it did not have a material impact on the Company’s consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” This update clarifies which changes to the terms and conditions of a share-based payment award require an entity to apply modification accounting. Specifically, an entity would not apply modification account if the fair value, vesting conditions, and classification as an equity or liability instrument are the same before and after the modification. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2017. These changes became effective for the Company’s fiscal year beginning January 1, 2018. This standard will be applied to all future modifications of share-based payment awards. In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting.” This update clarifies the accounting for share-based payment transactions for acquiring goods and services from non-employees. Specifically, the update aligns the accounting for payments to non-employees to match the accounting for payments to employees, no longer accounting for these transactions differently. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2018. Early adoption of the standard is permitted. This standard will be applied to all future non-employee share-based payments. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” This update aims to improve the effectiveness of disclosure requirements on fair value measurement as part of the disclosure framework project. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2019. Early adoption of the standard is permitted. The Company is currently evaluating the potential impact of this guidance on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force).” This update is intended to guide entities in evaluating the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance for determining when the arrangement includes a software license. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2019. Early adoption of the standard is permitted. The Company has elected to early adopt this standard beginning January 1, 2019. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Restrictions on Cash and Cash Equivalents | The following table reconciles cash, cash equivalents and restricted cash from the consolidated balance sheets to amounts reported within the consolidated statements of cash flows: December 31, 2018 2017 2016 Cash and cash equivalents $ 289,345 $ 60,115 $ 52,592 Restricted cash included in prepaid expenses and other current assets 158 2,000 429 Restricted cash included in other non-current assets 168 148 1,719 Total cash, cash equivalents and restricted cash $ 289,671 $ 62,263 $ 54,740 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information | Pro forma financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place as of the beginning of 2017 . Year Ended December 31, 2017 Revenues $ 724,618 Net loss (21,194 ) Net loss per share: Basic $ (0.48 ) Diluted $ (0.48 ) |
FinaConnect, Inc. | |
Business Acquisition [Line Items] | |
Summary of consideration transferred in the acquisition | The consideration transferred in the acquisition was as follows: Cash consideration $ 6,425 Contingent consideration liability 1,929 Working capital adjustment 269 Cash acquired (1 ) Total $ 8,622 |
Summary of the estimated fair values of the assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ 430 Total liabilities assumed (400 ) Identifiable intangible assets 3,800 Goodwill 4,792 Total net assets acquired $ 8,622 |
Summary of intangible assets acquired, estimated useful lives and amortization method | A summary of estimated intangible assets acquired, estimated useful lives and amortization methods is as follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ 2,800 12 Accelerated Proprietary technology 900 5 Straight-line Trade names and domains 100 2 Straight-line Total $ 3,800 |
Wheelhouse Analytics, LLC | |
Business Acquisition [Line Items] | |
Summary of consideration transferred in the acquisition | The consideration transferred in the acquisition was as follows: Cash consideration $ 13,299 Contingent consideration liability 2,364 Purchase consideration liability 887 Working capital adjustment 110 Cash acquired (80 ) Total $ 16,580 |
Summary of the estimated fair values of the assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ 385 Total liabilities assumed (1,420 ) Identifiable intangible assets 6,600 Goodwill 11,015 Total net assets acquired $ 16,580 |
Summary of intangible assets acquired, estimated useful lives and amortization method | A summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ 4,000 15 Accelerated Proprietary technology 2,500 6 Straight-line Trade names and domains 100 2 Straight-line Total $ 6,600 |
FolioDynamix | |
Business Acquisition [Line Items] | |
Summary of consideration transferred in the acquisition | The consideration transferred in the acquisition was as follows: Measurement Preliminary Period Revised Estimate Adjustments Estimate Cash consideration $ 187,580 $ 12,297 $ 199,877 Purchase consideration liability 12,297 (12,297 ) — Working capital and other adjustments (3,893 ) (2,849 ) (6,742 ) Total $ 195,984 $ (2,849 ) $ 193,135 |
Summary of the estimated fair values of the assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Measurement Preliminary Period Revised Estimate Adjustments Estimate Cash and cash equivalents $ 4,876 $ — $ 4,876 Accounts receivable 4,962 — 4,962 Prepaid expenses and other current assets 1,600 2,173 3,773 Property and equipment, net 927 — 927 Other non-current assets 441 — 441 Identifiable intangible assets 117,700 18,000 135,700 Goodwill 97,248 (17,357 ) 79,891 Total assets acquired 227,754 2,816 230,570 Accounts payable (5,358 ) — (5,358 ) Accrued expenses (7,173 ) (734 ) (7,907 ) Deferred tax liability (18,245 ) (5,055 ) (23,300 ) Deferred revenue (930 ) 124 (806 ) Other non-current liabilities (64 ) — (64 ) Total liabilities assumed (31,770 ) (5,665 ) (37,435 ) Total net assets acquired $ 195,984 $ (2,849 ) $ 193,135 |
Summary of intangible assets acquired, estimated useful lives and amortization method | A summary of estimated identifiable intangible assets acquired, estimated useful lives and amortization method is as follows: Measurement Preliminary Period Revised Estimated Amortization Estimate Adjustments Estimate Useful Life in Years Method Customer list $ 95,000 $ 18,500 $ 113,500 13 Accelerated Proprietary technology 18,000 (500 ) 17,500 5 Straight-line Trade names and domains 4,700 — 4,700 6 Straight-line Total $ 117,700 $ 18,000 $ 135,700 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of cumulative effect of the changes made to the Company’s condensed consolidated balance sheets as of January 1, 2018 for the adoption of the new revenue standard | The cumulative effect of the changes made to the Company’s consolidated balance sheets as of January 1, 2018 for the adoption of the new revenue standard was as follows: Cumulative Balance at Catch-up Balance at December 31, 2017 Adjustments January 1, 2018 Balance Sheets Assets: Other non-current assets $ 17,176 $ 5,315 $ 22,491 Liabilities: Deferred revenue, current 21,246 (1,122 ) 20,124 Deferred revenue, non-current 12,047 (2,780 ) 9,267 Equity: Accumulated deficit (73,854 ) 9,217 (64,637 ) In accordance with the new revenue standard requirements, the impact of adoption on the Company’s consolidated statements of operations and consolidated balance sheets was as follows: Year Ended December 31, 2018 Without Adoption of Effect of Change As Reported ASC 606 Higher/(Lower) Statements of Operations Revenues: Asset-based $ 481,233 $ 495,646 $ (14,413 ) Subscription-based 295,467 295,467 — Total recurring revenues 776,700 791,113 (14,413 ) Professional services and other revenues 35,663 35,840 (177 ) Total revenues 812,363 826,953 (14,590 ) Operating expenses: Cost of revenues 263,400 277,813 (14,413 ) Compensation and benefits 317,188 318,887 (1,699 ) Total operating expenses 798,198 814,310 (16,112 ) Income from operations 14,165 12,643 1,522 Net income 4,010 2,488 1,522 Net income attributable to Envestnet, Inc. $ 5,755 $ 4,233 $ 1,522 At December 31, 2018 Without Adoption of Effect of Change As Reported ASC 606 Higher/(Lower) Balance Sheets Assets: Fees receivable, net $ 68,004 $ 67,085 $ 919 Other non-current assets 25,298 18,284 7,014 Liabilities: Accounts payable 19,567 18,648 919 Deferred revenue, current 23,988 24,577 (589 ) Deferred revenue, non-current 6,910 10,046 (3,136 ) Equity: Accumulated deficit (58,882 ) (69,621 ) 10,739 |
Schedule of disaggregation of revenue by major source | The following table presents the Company’s revenues disaggregated by major source: Year Ended December 31, 2018 Envestnet (1) Envestnet | Yodlee (1) Consolidated (1) Revenues: Asset-based $ 481,233 $ — $ 481,233 Subscription-based 138,372 157,095 295,467 Total recurring revenues 619,605 157,095 776,700 Professional services and other revenues 13,000 22,663 35,663 Total revenues $ 632,605 $ 179,758 $ 812,363 Year Ended December 31, 2017 Envestnet (1) Envestnet | Yodlee (1) Consolidated (1) Revenues: Asset-based $ 410,016 $ — $ 410,016 Subscription-based 106,048 139,819 245,867 Total recurring revenues 516,064 139,819 655,883 Professional services and other revenues 11,841 15,955 27,796 Total revenues $ 527,905 $ 155,774 $ 683,679 Year Ended December 31, 2016 Envestnet (1) Envestnet | Yodlee (1) Consolidated (1) Revenues: Asset-based $ 352,498 $ — $ 352,498 Subscription-based 84,340 113,785 198,125 Total recurring revenues 436,838 113,785 550,623 Professional services and other revenues 10,794 16,747 27,541 Total revenues $ 447,632 $ 130,532 $ 578,164 (1) As noted above, prior period amounts have not been adjusted under the modified retrospective method. |
Schedule of disaggregation of revenue by geography | The following table presents the Company’s revenues disaggregated by geography, based on the billing address of the customer: Year Ended December 31, 2018 2017 (1) 2016 (1) United States $ 778,565 $ 617,835 $ 519,998 International (2), (3) 33,798 65,844 58,166 Total $ 812,363 $ 683,679 $ 578,164 (1) As noted above, prior period amounts have not been adjusted under the modified retrospective method. (2) No foreign country accounted for more than 10% of total revenues. (3) Upon adoption of ASU 2014-09, gross revenue recognition changed to net revenue recognition for one customer. |
Summary of revenues from major customers | One customer accounted for more than 10% of the Company’s total revenues: Year Ended December 31, 2018 2017 2016 Fidelity 17 % 17 % 15 % |
Schedule of estimated revenue expected to be recognized in the future | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2018 : Years ending December 31, 2019 $ 195,913 2020 127,516 2021 76,828 2022 56,378 2023 22,496 Thereafter 36,322 Total $ 515,453 |
Schedule of billed receivables, unbilled receivables and deferred revenues | The opening and closing balances of the Company’s billed receivables, unbilled receivables, and deferred revenues are as follows: Receivables, Unbilled receivables, which are included in which are included in Deferred Revenue Deferred Revenue Fees receivable, net Fees receivable, net (current) (non-current) Opening balance as of January 1, 2018 $ 36,605 $ 13,229 $ 20,124 $ 9,267 Increase/(decrease), net 14,882 3,288 3,864 (2,357 ) Ending balance as of December 31, 2018 $ 51,487 $ 16,517 $ 23,988 $ 6,910 |
Cost of Revenues (Tables)
Cost of Revenues (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cost of Revenue [Abstract] | |
Schedule of costs of revenues by revenue category | The following summarizes cost of revenues by revenue category: Year Ended December 31, 2018 2017 2016 Asset-based $ 232,145 $ 194,894 $ 160,842 Subscription-based 25,192 19,818 16,113 Professional services and other 6,063 4,325 3,635 Total $ 263,400 $ 219,037 $ 180,590 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following: December 31, 2018 2017 Prepaid technology $ 6,766 $ 1,843 Non-income tax receivable 5,628 2,704 Prepaid outside information services 1,515 1,395 Restricted cash 158 2,000 Income tax receivable — 1,684 Other 9,490 9,844 Total $ 23,557 $ 19,470 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property and equipment, net | Property and equipment consists of the following: December 31, Estimated Useful Life 2018 2017 Cost: Computer equipment and software 3 years $ 64,346 $ 56,192 Leasehold improvements Shorter of the lease term or useful life of the asset 28,191 23,192 Office furniture and fixtures 3-7 years 9,291 8,110 Other office equipment 3-5 years 5,577 2,052 107,405 89,546 Less: accumulated depreciation and amortization (62,414 ) (53,637 ) Total property and equipment, net $ 44,991 $ 35,909 |
Schedule of cost amount and related accumulated depreciation written off by category during the period | The following table presents the cost amounts and related accumulated depreciation written off by category: Year Ended December 31, 2018 Year Ended December 31, 2017 Accumulated Accumulated Cost Depreciation Cost Depreciation Computer equipment and software $ 10,733 $ (10,709 ) $ 7,528 $ (7,523 ) Office furniture and fixtures 32 (32 ) 184 (113 ) Other office equipment 309 (288 ) — — Leasehold improvements 297 (269 ) — — Total property and equipment retirements $ 11,371 $ (11,298 ) $ 7,712 $ (7,636 ) |
Schedule of depreciation and amortization expense | Depreciation and amortization expense was as follows: Year Ended December 31, 2018 2017 2016 Depreciation and amortization expense $ 15,737 $ 15,383 $ 14,838 |
Internally Developed Software (
Internally Developed Software (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Capitalized Computer Software, Net [Abstract] | |
Schedule of components of internally developed software, net | Internally developed software consists of the following: December 31, Estimated Useful Life 2018 2017 Internally developed software 5 years $ 70,410 $ 46,342 Less: accumulated amortization (32,201 ) (24,168 ) Internally developed software, net $ 38,209 $ 22,174 |
Schedule of amortization expense | Amortization expense was as follows: Year Ended December 31, 2018 2017 2016 Amortization expense $ 8,033 $ 5,310 $ 3,646 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill by segment | Changes in the carrying amount of goodwill were as follows: Envestnet Envestnet | Yodlee Total Balance at December 31, 2016 $ 163,751 $ 268,185 $ 431,936 Purchase accounting adjustments - Wheelhouse — 457 457 Foreign currency — 562 562 Balance at December 31, 2017 163,751 269,204 432,955 FolioDynamix acquisition 79,891 — 79,891 Private company acquisition — 6,885 6,885 Foreign currency — (796 ) (796 ) Other 167 — 167 Balance at December 31, 2018 $ 243,809 $ 275,293 $ 519,102 |
Schedule of components of intangible assets, net | Intangible assets consist of the following: December 31, 2018 December 31, 2017 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Useful Life Amount Amortization Amount Amount Amortization Amount Customer lists 7-15 years $ 361,020 $ (102,077 ) $ 258,943 $ 259,350 $ (78,482 ) $ 180,868 Proprietary technologies 4-8 years 66,746 (36,151 ) 30,595 57,377 (31,067 ) 26,310 Trade names 2-7 years 27,990 (12,352 ) 15,638 24,840 (9,701 ) 15,139 Backlog 4 years 11,000 (10,935 ) 65 11,000 (10,586 ) 414 Total intangible assets $ 466,756 $ (161,515 ) $ 305,241 $ 352,567 $ (129,836 ) $ 222,731 |
Schedule of amortization expense | Amortization expense was as follows: Year Ended December 31, 2018 2017 2016 Amortization expense $ 53,856 $ 42,127 $ 45,515 |
Schedule of future amortization expense of the intangible assets | Future amortization expense of the intangible assets as of December 31, 2018 , is expected to be as follows: Years ending December 31: 2019 $ 48,334 2020 44,380 2021 35,744 2022 33,266 2023 24,920 Thereafter 118,597 Total $ 305,241 |
Other Non-Current Assets (Table
Other Non-Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Assets, Noncurrent [Abstract] | |
Schedule of components of other non-current assets | Other non-current assets consist of the following: December 31, 2018 2017 Deferred sales incentive compensation $ 7,014 $ — Assets to fund deferred compensation liability 6,346 5,185 Lease and other deposits 4,341 4,906 Investments in private companies 2,862 2,731 Unamortized issuance costs on revolving credit facility 2,251 3,106 Other 2,484 1,248 Total $ 25,298 $ 17,176 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Schedule accrued expenses and other liabilities | Accrued expenses and other liabilities consist of the following: December 31, 2018 2017 Accrued investment manager fees $ 50,635 $ 39,324 Accrued compensation and related taxes 50,598 43,724 Sales and use tax payable 9,733 9,037 Accrued professional services 4,517 4,985 Accrued transaction costs 4,543 — Definite consideration — 1,250 Other accrued expenses 13,272 7,577 Total $ 133,298 $ 105,897 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of convertible debt obligations | The Company’s outstanding debt obligations as of December 31, 2018 and 2017 were as follows: December 31, 2018 2017 Convertible Notes due 2019 $ 172,500 $ 172,500 Unaccreted discount on Convertible Notes due 2019 (5,890 ) (11,677 ) Unamortized issuance costs on Convertible Notes due 2019 (899 ) (1,833 ) Convertible Notes due 2019 carrying value $ 165,711 $ 158,990 Convertible Notes due 2023 $ 345,000 $ — Unaccreted discount on Convertible Notes due 2023 (42,641 ) — Unamortized issuance costs on Convertible Notes due 2023 (7,634 ) — Convertible Notes due 2023 carrying value $ 294,725 $ — Revolving credit facility balance $ — $ 81,168 |
Schedule of interest expense | Interest expense on the Convertible Notes due 2019 and 2023 and the Second Amended and Restated Credit agreement was comprised of the following: Year Ended December 31, 2018 2017 2016 Coupon interest $ 6,650 $ 3,019 $ 3,019 Amortization of issuance costs 2,771 3,279 2,875 Accretion of debt discount 11,134 5,472 5,237 Interest on revolving credit facility 3,994 4,153 5,128 Undrawn and other fees 654 424 341 Total $ 25,203 $ 16,347 $ 16,600 |
Other Non-Current Liabilities (
Other Non-Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Other Non-Current Liabilities | Other non-current liabilities consist of the following: December 31, 2018 2017 Uncertain tax positions $ 10,394 $ 10,640 Deferred compensation liability 6,196 4,364 Other 1,415 98 Total $ 18,005 $ 15,102 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of changes in fair value of the Company’s financial assets and liabilities measured at fair value | The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value in the consolidated balance sheets as of December 31, 2018 and 2017 , based on the three-tier fair value hierarchy: December 31, 2018 Fair Value Level I Level II Level III Assets Money market funds and other (1) $ 265,554 $ 265,554 $ — $ — Assets to fund deferred compensation liability (2) 6,346 — — 6,346 Total assets $ 271,900 $ 265,554 $ — $ 6,346 Liabilities Contingent consideration $ 732 $ — $ — $ 732 Deferred compensation liability (3) 6,196 6,196 — — Total liabilities $ 6,928 $ 6,196 $ — $ 732 December 31, 2017 Fair Value Level I Level II Level III Assets: Money market funds (1) $ 39,400 $ 39,400 $ — $ — Assets to fund deferred compensation liability (2) 5,185 — — 5,185 Total assets $ 44,585 $ 39,400 $ — $ 5,185 Liabilities: Contingent consideration $ 2,781 $ — $ — $ 2,781 Deferred compensation liability (3) 4,364 4,364 — — Total liabilities $ 7,145 $ 4,364 $ — $ 2,781 (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 and time deposit accounts which mature on a daily basis. (2) The deferred compensation asset fair value is based upon the cash surrender value of the life insurance premiums. The Company recognized immaterial losses related to this asset within the statements of operations for the year ended December 31, 2018 , and immaterial gains related to this asset within the statements of operations for the year ended December 31, 2017 . (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. The Company recognized immaterial gains related to this liability within the statements of operations for the years ended December 31, 2018 and 2017 . |
Summary of changes in the fair value of the Company's Level 3 assets | The table below presents a reconciliation of the assets to fund deferred compensation liability of which the Company measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2017 to December 31, 2018 : Fair Value of Assets to Fund Deferred Compensation Liability Balance at December 31, 2017 $ 5,185 Contributions and fair value adjustments 1,161 Balance at December 31, 2018 $ 6,346 |
Summary of changes in the fair value of the Company's Level 3 liability | 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, 2017 to December 31, 2018 : Fair Value of Contingent Consideration Liabilities Balance at December 31, 2017 $ 2,781 Payment of contingent consideration liability (2,193 ) Accretion on contingent consideration 144 Balance at December 31, 2018 $ 732 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of loss before income tax provision (benefit) | Income (loss) before income tax provision (benefit) was generated in the following jurisdictions: Year Ended December 31, 2018 2017 2016 Domestic $ (18,242 ) $ (9,387 ) $ (47,059 ) Foreign 9,080 7,698 6,569 Total $ (9,162 ) $ (1,689 ) $ (40,490 ) |
Summary of components of the income tax provision charged to operations | The components of the income tax provision (benefit) charged to operations are summarized as follows: Year Ended December 31, 2018 2017 2016 Current: Federal 4,564 $ (1,201 ) $ 3,812 State 1,044 951 1,172 Foreign 4,849 6,438 4,509 10,457 6,188 9,493 Deferred: Federal (19,444 ) (4,439 ) 5,992 State (3,182 ) 146 117 Foreign (1,003 ) (304 ) (525 ) (23,629 ) (4,597 ) 5,584 Total $ (13,172 ) $ 1,591 $ 15,077 |
Schedule of net deferred tax assets (liabilities) | Net deferred tax assets (liabilities) consist of the following: December 31, 2018 2017 Deferred revenue $ 5,642 $ 5,723 Prepaid expenses and accruals 3,302 1,459 Deferred rent and lease incentives 4,255 3,419 Net operating loss and tax credit carryforwards 78,689 66,896 Property and equipment and intangible assets (73,778 ) (51,182 ) Stock-based compensation expense 7,667 6,894 Convertible Notes (11,918 ) (2,886 ) Other 1,032 1,221 Total deferred tax assets 14,891 31,544 Less: valuation allowance (15,531 ) (32,513 ) Net deferred tax liabilities $ (640 ) $ (969 ) |
Summary of expected tax provision | The expected tax provision (benefit) calculated at the statutory federal rate differs from the actual provision as follows: Year Ended December 31, 2018 2017 2016 Tax provision (benefit), at U.S. federal statutory tax rate $ (1,559 ) $ (573 ) $ (13,767 ) State income tax provision (benefit), net of federal benefit (1,714 ) (1,251 ) (2,053 ) Effect of stock-based compensation excess tax benefit (7,782 ) (11,522 ) — Effect of permanent items 2,967 1,145 1,773 Change in valuation allowance (4,244 ) 2,151 26,269 Effect of change in federal income tax rate — 13,792 — Effect of change in state and foreign income tax rates (269 ) 537 279 Uncertain tax positions (2,062 ) 3,668 2,024 BEAT liability 3,760 — — Research and development credits (4,770 ) (2,815 ) (2,758 ) Change in permanent reinvestment assertion — (4,494 ) — State net operating loss adjustment, net of valuation allowance impact — 836 — Other 2,501 117 3,310 Income tax provision $ (13,172 ) $ 1,591 $ 15,077 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefit | A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows: Year Ended December 31, 2018 2017 2016 Unrecognized tax benefits balance at beginning of year $ 18,312 $ 16,476 $ 14,129 Additions based on tax positions related to the current year 1,907 1,691 1,153 Additions based on tax positions related to prior years (3,976 ) 145 1,257 Reductions for settlements with taxing authorities related to prior years (615 ) — — Reductions for lapses of statute of limitations — — (63 ) Unrecognized tax benefits balance at end of year $ 15,628 $ 18,312 $ 16,476 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based compensation expense | Employee stock-based compensation expense was as follows: Year Ended December 31, 2018 2017 2016 Stock-based compensation expense $ 40,245 $ 31,331 $ 33,276 Tax effect on stock-based compensation expense (10,093 ) (11,906 ) (13,001 ) Net effect on income $ 30,152 $ 19,425 $ 20,275 |
Schedule of weighted average assumptions used to value options granted | The following weighted average assumptions were used to value options granted during the periods indicated: December 31, 2018 2017 2016 Grant date fair value of options $ — $ 14.51 $ 9.56 Volatility — 43.8 % 42.2 % Risk-free interest rate — 2.1 % 1.4 % Dividend yield — — — Expected term (in years) — 6.3 6.3 |
Summary of option activity under the Company's plans | 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, 2015 3,533,791 $ 15.03 4.7 $ 61,199 Granted 163,864 22.38 Exercised (598,382 ) 8.23 Forfeited (66,079 ) 35.08 Outstanding as of December 31, 2016 3,033,194 16.33 4.3 63,264 Granted 75,238 31.70 Exercised (837,857 ) 9.49 Forfeited (16,010 ) 37.42 Outstanding as of December 31, 2017 2,254,565 19.23 4.3 69,939 Granted — — Exercised (359,345 ) 14.76 Forfeited (7,251 ) 27.51 Outstanding as of December 31, 2018 1,887,969 20.05 3.4 56,046 Options exercisable 1,830,082 19.78 3.3 54,837 |
Schedule of other information | Other information is as follows: Year Ended December 31, 2018 2017 2016 Total intrinsic value of options exercised $ 15,667 $ 29,562 $ 14,165 Cash received from exercises of stock options 5,305 7,951 4,924 |
Summary of the activity for unvested restricted stock units and awards granted under the Company's plans | The following is a summary of the activity for unvested restricted stock units and awards granted under the Company’s plans: Weighted- Average Grant Number of Date Fair Value Shares per Share Outstanding as of December 31, 2015 2,153,211 $ 35.63 Granted 1,009,661 28.82 Vested (1,082,206 ) 29.12 Forfeited (185,907 ) 30.96 Outstanding as of December 31, 2016 1,894,759 30.40 Granted 959,591 32.38 Vested (969,513 ) 31.51 Forfeited (118,198 ) 30.11 Outstanding as of December 31, 2017 1,766,639 32.48 Granted 996,099 55.42 Vested (1,073,681 ) 32.62 Forfeited (103,269 ) 40.37 Outstanding as of December 31, 2018 1,585,788 46.33 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to common stockholders | The following table provides a reconciliation of the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to common stockholders: Year Ended December 31, 2018 2017 2016 Basic income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ 5,755 $ (3,280 ) $ (55,567 ) Basic number of weighted-average shares outstanding 45,268,002 43,732,148 42,814,222 Basic $ 0.13 $ (0.08 ) $ (1.30 ) Diluted income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ 5,755 $ (3,280 ) $ (55,567 ) Basic number of weighted-average shares outstanding 45,268,002 43,732,148 42,814,222 Effect of dilutive shares: Options to purchase common stock 1,304,493 — — Unvested restricted stock units 811,590 — — Diluted number of weighted-average shares outstanding 47,384,085 43,732,148 42,814,222 Diluted $ 0.12 $ (0.08 ) $ (1.30 ) |
Schedule of anti-dilutive securities excluded from computation of diluted earings per share | Securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share are as follows: December 31, 2018 2017 2016 Options to purchase common stock — 2,254,565 3,033,194 Unvested restricted stock awards and units — 1,766,639 1,894,759 Warrants - private placement 470,000 — — Convertible Notes 7,793,826 2,743,321 2,743,321 Total 8,263,826 6,764,525 7,671,274 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease commitments under operating leases | Future annual minimum lease commitments under operating leases were as follows: Years ending December 31: 2019 $ 15,997 2020 15,437 2021 14,705 2022 10,816 2023 9,910 Thereafter 39,449 Total $ 106,314 |
Schedule of rent expense for all operating leases | Rent expense for all operating leases totaled: Year Ended December 31, 2018 2017 2016 Rent expense $ 19,658 $ 18,084 $ 14,984 |
Benefit Plan (Tables)
Benefit Plan (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of voluntary employer matching contributions | The Company made voluntary employer matching contributions as follows: Year Ended December 31, 2018 2017 2016 Voluntary employer matching contributions $ 4,778 $ 4,038 $ 2,270 |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of revenue by segment | The following table presents revenue by segment: Year Ended December 31, 2018 2017 2016 Revenue: Envestnet Asset-based $ 481,233 $ 410,016 $ 352,498 Subscription-based 138,372 106,048 84,340 Total recurring revenues 619,605 516,064 436,838 Professional services and other 13,000 11,841 10,794 Total Envestnet segment revenues 632,605 527,905 447,632 Envestnet | Yodlee Subscription-based 157,095 139,819 113,785 Professional services and other 22,663 15,955 16,747 Total Envestnet | Yodlee segment revenues 179,758 155,774 130,532 Consolidated revenue $ 812,363 $ 683,679 $ 578,164 Fidelity revenue as a percentage of Envestnet segment revenue: 21 % 22 % 19 % |
Schedule of income (loss) from operations by segment | The following table presents a reconciliation from income from operations by segment to consolidated net income (loss) attributable to Envestnet, Inc.: Year Ended December 31, 2018 2017 2016 Envestnet $ 75,491 $ 75,449 $ 41,678 Envestnet | Yodlee (10,013 ) (19,456 ) (38,547 ) Total segment income from operations 65,478 55,993 3,131 Nonsegment operating expenses (51,313 ) (39,573 ) (26,575 ) Interest expense, net (22,840 ) (16,146 ) (16,563 ) Other expense, net (487 ) (1,963 ) (483 ) Consolidated loss before income tax provision (benefit) (9,162 ) (1,689 ) (40,490 ) Income tax provision (benefit) (13,172 ) 1,591 15,077 Consolidated net income (loss) 4,010 (3,280 ) (55,567 ) Add: Net loss attributable to non-controlling interest 1,745 — — Consolidated net income (loss) attributable to Envestnet, Inc. $ 5,755 $ (3,280 ) $ (55,567 ) |
Summary of consolidated total assets, consolidated depreciation and amortization and consolidated capital expenditures | A summary of consolidated total assets, consolidated depreciation and amortization and consolidated capital expenditures by segment follows: December 31, 2018 2017 Segment assets: Envestnet $ 810,971 $ 353,048 Envestnet | Yodlee 502,776 509,004 Consolidated total assets $ 1,313,747 $ 862,052 Year Ended December 31, 2018 2017 2016 Segment depreciation and amortization: Envestnet $ 45,139 $ 26,223 $ 24,784 Envestnet | Yodlee 32,487 36,597 39,215 Consolidated depreciation and amortization $ 77,626 $ 62,820 $ 63,999 Year Ended December 31, 2018 2017 2016 Segment capital expenditures: Envestnet $ 36,406 $ 22,434 $ 17,120 Envestnet | Yodlee 8,186 5,135 5,456 Consolidated capital expenditures $ 44,592 $ 27,569 $ 22,576 |
Geographical Information (Table
Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segments, Geographical Areas [Abstract] | |
Schedule of property, plant, and equipment, net by geographic area | The following table sets forth property and equipment, net by geographic area: December 31, 2018 2017 United States $ 39,412 $ 30,647 India 3,969 4,907 Other 1,610 355 Total $ 44,991 $ 35,909 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly results | Quarterly results for the years ended December 31, 2018 and 2017 were as follows: 2018 First Second Third Fourth Total revenues $ 198,011 $ 201,116 $ 203,156 $ 210,080 Income (loss) from operations (738 ) 5 3,395 11,503 Net income (loss) attributable to Envestnet, Inc. 8,104 (5,526 ) 2,954 223 Net income (loss) per share attributable to Envestnet, Inc.: Basic (1) 0.18 (0.12 ) 0.06 — Diluted (1)(2) 0.17 (0.12 ) 0.06 — 2017 First Second Third Fourth Total revenues $ 157,786 $ 167,417 $ 175,614 $ 182,862 Income (loss) from operations (3,354 ) 2,743 4,348 12,683 Net income (loss) attributable to Envestnet, Inc. (13,135 ) (6,470 ) (1,320 ) 17,645 Net incomes (loss) per share attributable to Envestnet, Inc.: Basic (1) (0.30 ) (0.15 ) (0.03 ) 0.40 Diluted (1)(2) (0.30 ) (0.15 ) (0.03 ) 0.38 ________________________________________________________ (1) Quarterly values may not sum to annual values due to rounding. (2) Quarterly values may not sum to annual values due to differences in quarterly dilution compared to year to date dilution. |
Organization and Description _2
Organization and Description of Business (Details) | 12 Months Ended |
Dec. 31, 2018stateitemproprietary_productaccount_product | |
Number of RIAs | item | 4 |
Number of states with which the broker-dealer is registered | state | 50 |
Envestnet Enterprise | |
Number of investment products | 19,100 |
Envestnet Portfolio Management Consultants (“PMC”) | |
Number of investment products | 4,000 |
Number of Proprietary Products | proprietary_product | 1,200 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Accounting Policies [Abstract] | |||
Amortization period of deferred sales incentive compensation | 5 years | ||
Allowance for doubtful accounts receivable, current | $ 826 | $ 407 | |
Impairment to investments | 0 | 0 | $ 734 |
Impairments of internally developed software | $ 0 | 0 | 0 |
Number of reporting units | 2 | ||
Goodwill impairment charges | $ 0 | 0 | 0 |
Intangible asset impairment charges | 0 | 0 | 0 |
Sales and use tax liability | 8,643 | 8,522 | |
Non-income tax receivable | 5,246 | 2,704 | |
Sales tax benefit | 1,176 | (345) | (6,229) |
Sales and use tax, interest | $ 130 | $ 244 | $ 914 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Restricted Cash) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | $ 289,345 | $ 60,115 | $ 52,592 | |
Restricted cash | 158 | 2,000 | ||
Total cash, cash equivalents and restricted cash | 289,671 | 62,263 | 54,740 | $ 51,866 |
Prepaid expense and other current assets | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | 158 | 2,000 | 429 | |
Other non-current assets | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 168 | $ 148 | $ 1,719 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Notes) (Details) | 1 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2018USD ($) | Nov. 30, 2018USD ($) | Mar. 31, 2018USD ($)unit | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | May 25, 2018USD ($) | Dec. 15, 2014USD ($) | Feb. 01, 2014 | |
Convertible Notes | |||||||||
Interest rate (as a percent) | 1.75% | ||||||||
Face amount | $ 172,500,000 | ||||||||
Ownership interest (as a percent) | 27.00% | 43.00% | |||||||
Cash consideration | $ 0 | $ 445,000 | $ 0 | ||||||
Net loss attributable to noncontrolling interest | (1,745,000) | 0 | 0 | ||||||
Investment in private companies | $ 1,200,000 | ||||||||
Convertible Notes | |||||||||
Convertible Notes | |||||||||
Face amount and over allotments | $ 172,500,000 | ||||||||
Interest rate (as a percent) | 1.75% | ||||||||
Face amount | $ 172,500,000 | 172,500,000 | 172,500,000 | ||||||
Convertible Notes Due 2023 | |||||||||
Convertible Notes | |||||||||
Interest rate (as a percent) | 1.75% | ||||||||
Face amount | 345,000,000 | 345,000,000 | 0 | $ 345,000,000 | |||||
ERS | |||||||||
Convertible Notes | |||||||||
Ownership interest (as a percent) | 64.50% | ||||||||
Net loss attributable to noncontrolling interest | $ 0 | $ 0 | $ 0 | ||||||
Private Company | |||||||||
Convertible Notes | |||||||||
Number of units acquired | unit | 4,000 | ||||||||
Investment in private companies | $ 1,333,000 | ||||||||
Klein | ERS | |||||||||
Convertible Notes | |||||||||
Ownership interest (as a percent) | 81.50% | ||||||||
ERS | |||||||||
Convertible Notes | |||||||||
Cash consideration | $ 6,560,000 | ||||||||
Percentage of interests acquired | 100.00% | 100.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Recent Accounting Pronouncement) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net cash provided by operating activities | $ 117,385 | $ 108,250 | $ 83,146 | |
Net cash provided by (used in) financing activities | 352,294 | (72,083) | (22,345) | |
Restricted cash | 158 | 2,000 | ||
Accounting Standards Update 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net cash provided by operating activities | 4,455 | |||
Net cash provided by (used in) financing activities | $ 4,455 | |||
Accounting Standards Update 2016-18 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Restricted cash | $ 326 | $ 2,148 | ||
Scenario, Forecast | Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, right-of-use asset | $ 66,000 | |||
Operating lease, liability | $ 84,000 |
Business Acquisitions (Details)
Business Acquisitions (Details) | Oct. 03, 2016USD ($) | Feb. 01, 2016USD ($) | Aug. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Consideration transferred in acquisition | ||||||
Fair market value adjustment to contingent consideration | $ 0 | $ 0 | $ 1,588,000 | |||
Cash consideration | 0 | 445,000 | 0 | |||
Acquired intangible asset amortization | 53,856,000 | 42,127,000 | 45,515,000 | |||
Goodwill | 519,102,000 | 432,955,000 | 431,936,000 | |||
Envestnet - Yodlee | ||||||
Consideration transferred in acquisition | ||||||
Goodwill | 275,293,000 | 269,204,000 | 268,185,000 | |||
FinaConnect, Inc. | ||||||
Consideration transferred in acquisition | ||||||
Upfront cash consideration paid | $ 6,425,000 | |||||
Multiplier for contingent consideration based on acquiree's incremental revenue | 4 | |||||
Contingent consideration period | 2 years | |||||
Contingent consideration, maximum | $ 3,500,000 | |||||
Fair market value adjustment to contingent consideration | 357,000 | |||||
Contingent Consideration first year | 0 | 2,286,000 | 1,929,000 | |||
Business acquisition costs | 0 | 135,000 | 116,000 | |||
Cash consideration | 6,425,000 | |||||
Consideration transferred | 8,622,000 | |||||
Goodwill | $ 4,792,000 | |||||
Wheelhouse Analytics, LLC | ||||||
Consideration transferred in acquisition | ||||||
Contingent consideration, maximum | $ 4,000,000 | |||||
Contingent Consideration first year | 2,193,000 | |||||
Cash consideration | 13,299,000 | |||||
Acquisition related costs | 1,763,000 | $ 874,000 | $ 383,000 | |||
Consideration transferred | 16,580,000 | |||||
Goodwill | $ 11,015,000 | |||||
FolioDynamix | ||||||
Consideration transferred in acquisition | ||||||
Cash consideration | 199,877,000 | |||||
Acquisition related costs | 1,557,000 | |||||
Revenue since acquisition | 68,122,000 | |||||
Net income (loss) since acquisition | (13,777,000) | |||||
Acquired intangible asset amortization | 17,908,000 | |||||
Consideration transferred | 193,135,000 | |||||
Goodwill | $ 79,891,000 | |||||
Private Company Acquisition | Envestnet - Yodlee | ||||||
Consideration transferred in acquisition | ||||||
Consideration transferred | $ 6,585,000 | |||||
Goodwill | $ 6,885,000 |
Business Acquisitions (Consider
Business Acquisitions (Consideration Transferred) (Details) - USD ($) $ in Thousands | Jan. 02, 2018 | Oct. 03, 2016 | Feb. 01, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||||
Cash consideration | $ 0 | $ 445 | $ 0 | |||
FolioDynamix | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration | 199,877 | |||||
Purchase consideration liability | 0 | |||||
Working capital adjustment | (6,742) | |||||
Consideration transferred | 193,135 | |||||
FinaConnect, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration | $ 6,425 | |||||
Contingent consideration liability | 1,929 | |||||
Working capital adjustment | 269 | |||||
Cash acquired | (1) | |||||
Consideration transferred | $ 8,622 | |||||
Wheelhouse Analytics, LLC | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration | $ 13,299 | |||||
Contingent consideration liability | 2,364 | |||||
Purchase consideration liability | 887 | |||||
Working capital adjustment | 110 | |||||
Cash acquired | (80) | |||||
Consideration transferred | $ 16,580 | |||||
Scenario, Previously Reported | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration | $ 187,580 | |||||
Purchase consideration liability | 12,297 | |||||
Working capital adjustment | (3,893) | |||||
Consideration transferred | $ 195,984 | |||||
Scenario, Adjustment | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration | 12,297 | |||||
Purchase consideration liability | (12,297) | |||||
Working capital adjustment | (2,849) | |||||
Consideration transferred | $ (2,849) |
Business Acquisitions (Schedule
Business Acquisitions (Schedule of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 02, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 03, 2016 | Feb. 01, 2016 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 519,102 | $ 432,955 | $ 431,936 | |||
FinaConnect, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 3,800 | |||||
Goodwill | 4,792 | |||||
Total tangible assets acquired | 430 | |||||
Total liabilities assumed | (400) | |||||
Total net assets acquired | $ 8,622 | |||||
Wheelhouse Analytics, LLC | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 6,600 | |||||
Goodwill | 11,015 | |||||
Total tangible assets acquired | 385 | |||||
Total liabilities assumed | (1,420) | |||||
Total net assets acquired | $ 16,580 | |||||
FolioDynamix | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents | 4,876 | |||||
Accounts receivable | 4,962 | |||||
Prepaid expenses and other current assets | 3,773 | |||||
Property and equipment, net | 927 | |||||
Other non-current assets | 441 | |||||
Identifiable intangible assets | 135,700 | |||||
Goodwill | 79,891 | |||||
Total net assets acquired | 230,570 | |||||
Accounts payable | (5,358) | |||||
Accrued expenses | (7,907) | |||||
Deferred tax liability | (23,300) | |||||
Deferred revenue | (806) | |||||
Other non-current liabilities | (64) | |||||
Total liabilities assumed | (37,435) | |||||
Total net assets acquired | 193,135 | |||||
Scenario, Previously Reported | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents | $ 4,876 | |||||
Accounts receivable | 4,962 | |||||
Prepaid expenses and other current assets | 1,600 | |||||
Property and equipment, net | 927 | |||||
Other non-current assets | 441 | |||||
Identifiable intangible assets | 117,700 | |||||
Goodwill | 97,248 | |||||
Total net assets acquired | 227,754 | |||||
Accounts payable | (5,358) | |||||
Accrued expenses | (7,173) | |||||
Deferred tax liability | (18,245) | |||||
Deferred revenue | (930) | |||||
Other non-current liabilities | (64) | |||||
Total liabilities assumed | (31,770) | |||||
Total net assets acquired | $ 195,984 | |||||
Scenario, Adjustment | ||||||
Business Acquisition [Line Items] | ||||||
Prepaid expenses and other current assets | 2,173 | |||||
Identifiable intangible assets | 18,000 | |||||
Goodwill | (17,357) | |||||
Total net assets acquired | 2,816 | |||||
Accrued expenses | (734) | |||||
Deferred tax liability | (5,055) | |||||
Deferred revenue | 124 | |||||
Total liabilities assumed | (5,665) | |||||
Total net assets acquired | $ (2,849) |
Business Acquisitions (Summary
Business Acquisitions (Summary of Intangible Assets Acquired) (Details) - USD ($) $ in Thousands | Jan. 02, 2018 | Oct. 03, 2016 | Feb. 01, 2016 | Dec. 31, 2018 |
FinaConnect, Inc. | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 3,800 | |||
Wheelhouse Analytics, LLC | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 6,600 | |||
FolioDynamix | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 135,700 | |||
Customer lists | FinaConnect, Inc. | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 2,800 | |||
Intangible assets acquired, Useful Life In Years | 12 years | |||
Customer lists | Wheelhouse Analytics, LLC | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 4,000 | |||
Intangible assets acquired, Useful Life In Years | 15 years | |||
Customer lists | FolioDynamix | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | 113,500 | |||
Intangible assets acquired, Useful Life In Years | 13 years | |||
Proprietary technologies | FinaConnect, Inc. | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 900 | |||
Intangible assets acquired, Useful Life In Years | 5 years | |||
Proprietary technologies | Wheelhouse Analytics, LLC | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 2,500 | |||
Intangible assets acquired, Useful Life In Years | 6 years | |||
Proprietary technologies | FolioDynamix | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | 17,500 | |||
Intangible assets acquired, Useful Life In Years | 5 years | |||
Trade names | FinaConnect, Inc. | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 100 | |||
Intangible assets acquired, Useful Life In Years | 2 years | |||
Trade names | Wheelhouse Analytics, LLC | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 100 | |||
Intangible assets acquired, Useful Life In Years | 2 years | |||
Trade names | FolioDynamix | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | 4,700 | |||
Intangible assets acquired, Useful Life In Years | 6 years | |||
Scenario, Previously Reported | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 117,700 | |||
Scenario, Previously Reported | Customer lists | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | 95,000 | |||
Scenario, Previously Reported | Proprietary technologies | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | 18,000 | |||
Scenario, Previously Reported | Trade names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 4,700 | |||
Scenario, Adjustment | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | 18,000 | |||
Scenario, Adjustment | Customer lists | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | 18,500 | |||
Scenario, Adjustment | Proprietary technologies | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | (500) | |||
Scenario, Adjustment | Trade names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 0 |
Business Acquisitions (Pro Form
Business Acquisitions (Pro Forma Data) (Details) - FolioDynamix $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Revenues | $ | $ 724,618 |
Net loss | $ | $ (21,194) |
Net loss per share: | |
Basic (in dollars per share) | $ / shares | $ (0.48) |
Diluted (in dollars per share) | $ / shares | $ (0.48) |
Revenue (ASC 606) (Details)
Revenue (ASC 606) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets: | |||
Other non-current assets | $ 25,298 | $ 22,491 | $ 17,176 |
Liabilities: | |||
Deferred revenue | 23,988 | 20,124 | 21,246 |
Deferred revenue | 6,910 | 9,267 | 12,047 |
Equity: | |||
Accumulated deficit | (58,882) | (64,637) | (73,854) |
Without Adoption of ASC 606 | |||
Assets: | |||
Other non-current assets | 18,284 | 17,176 | |
Liabilities: | |||
Deferred revenue | 24,577 | 21,246 | |
Deferred revenue | 10,046 | 12,047 | |
Equity: | |||
Accumulated deficit | (69,621) | $ (73,854) | |
Accounting Standards Update 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | |||
Assets: | |||
Other non-current assets | 7,014 | 5,315 | |
Liabilities: | |||
Deferred revenue | (589) | (1,122) | |
Deferred revenue | (3,136) | (2,780) | |
Equity: | |||
Accumulated deficit | $ 10,739 | $ 9,217 |
Revenue (Adoption) (Details)
Revenue (Adoption) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Revenues: | ||||||||||||
Total revenues | $ 210,080 | $ 203,156 | $ 201,116 | $ 198,011 | $ 182,862 | $ 175,614 | $ 167,417 | $ 157,786 | $ 812,363 | $ 683,679 | $ 578,164 | |
Operating expenses: | ||||||||||||
Cost of revenues | 263,400 | 219,037 | 180,590 | |||||||||
Compensation and benefits | 317,188 | |||||||||||
Total operating expenses | 798,198 | 667,259 | 601,608 | |||||||||
Income (loss) from operations | 11,503 | 3,395 | 5 | (738) | 12,683 | 4,348 | 2,743 | (3,354) | 14,165 | 16,420 | (23,444) | |
Net income | 4,010 | (3,280) | (55,567) | |||||||||
Net income (loss) attributable to Envestnet, Inc. | 223 | $ 2,954 | $ (5,526) | $ 8,104 | 17,645 | $ (1,320) | $ (6,470) | $ (13,135) | 5,755 | (3,280) | (55,567) | |
Current assets: | ||||||||||||
Fees receivable, net | 68,004 | 51,522 | 68,004 | 51,522 | ||||||||
Other non-current assets | 25,298 | 17,176 | 25,298 | 17,176 | $ 22,491 | |||||||
Liabilities: | ||||||||||||
Accounts payable | 19,567 | 11,097 | 19,567 | 11,097 | ||||||||
Deferred revenue | 23,988 | 21,246 | 23,988 | 21,246 | 20,124 | |||||||
Deferred revenue | 6,910 | 12,047 | 6,910 | 12,047 | 9,267 | |||||||
Equity: | ||||||||||||
Accumulated deficit | (58,882) | (73,854) | (58,882) | (73,854) | (64,637) | |||||||
Asset-based | ||||||||||||
Revenues: | ||||||||||||
Total revenues | 481,233 | 410,016 | 352,498 | |||||||||
Operating expenses: | ||||||||||||
Cost of revenues | 232,145 | 194,894 | 160,842 | |||||||||
Subscription-based | ||||||||||||
Revenues: | ||||||||||||
Total revenues | 295,467 | 245,867 | 198,125 | |||||||||
Operating expenses: | ||||||||||||
Cost of revenues | 25,192 | 19,818 | 16,113 | |||||||||
Recurring Revenue | ||||||||||||
Revenues: | ||||||||||||
Total revenues | 776,700 | 655,883 | 550,623 | |||||||||
Professional services and other revenues | ||||||||||||
Revenues: | ||||||||||||
Total revenues | 35,663 | 27,796 | 27,541 | |||||||||
Operating expenses: | ||||||||||||
Cost of revenues | 6,063 | 4,325 | $ 3,635 | |||||||||
Without Adoption of ASC 606 | ||||||||||||
Revenues: | ||||||||||||
Total revenues | 826,953 | |||||||||||
Operating expenses: | ||||||||||||
Cost of revenues | 277,813 | |||||||||||
Compensation and benefits | 318,887 | |||||||||||
Total operating expenses | 814,310 | |||||||||||
Income (loss) from operations | 12,643 | |||||||||||
Net income | 2,488 | |||||||||||
Net income (loss) attributable to Envestnet, Inc. | 4,233 | |||||||||||
Current assets: | ||||||||||||
Fees receivable, net | 67,085 | 67,085 | ||||||||||
Other non-current assets | 18,284 | 17,176 | 18,284 | 17,176 | ||||||||
Liabilities: | ||||||||||||
Accounts payable | 18,648 | 18,648 | ||||||||||
Deferred revenue | 24,577 | 21,246 | 24,577 | 21,246 | ||||||||
Deferred revenue | 10,046 | 12,047 | 10,046 | 12,047 | ||||||||
Equity: | ||||||||||||
Accumulated deficit | (69,621) | $ (73,854) | (69,621) | $ (73,854) | ||||||||
Without Adoption of ASC 606 | Asset-based | ||||||||||||
Revenues: | ||||||||||||
Total revenues | 495,646 | |||||||||||
Without Adoption of ASC 606 | Subscription-based | ||||||||||||
Revenues: | ||||||||||||
Total revenues | 295,467 | |||||||||||
Without Adoption of ASC 606 | Recurring Revenue | ||||||||||||
Revenues: | ||||||||||||
Total revenues | 791,113 | |||||||||||
Without Adoption of ASC 606 | Professional services and other revenues | ||||||||||||
Revenues: | ||||||||||||
Total revenues | 35,840 | |||||||||||
Accounting Standards Update 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | ||||||||||||
Revenues: | ||||||||||||
Total revenues | (14,590) | |||||||||||
Operating expenses: | ||||||||||||
Cost of revenues | (14,413) | |||||||||||
Compensation and benefits | (1,699) | |||||||||||
Total operating expenses | (16,112) | |||||||||||
Income (loss) from operations | 1,522 | |||||||||||
Net income | 1,522 | |||||||||||
Net income (loss) attributable to Envestnet, Inc. | 1,522 | |||||||||||
Current assets: | ||||||||||||
Fees receivable, net | 919 | 919 | ||||||||||
Other non-current assets | 7,014 | 7,014 | 5,315 | |||||||||
Liabilities: | ||||||||||||
Accounts payable | 919 | 919 | ||||||||||
Deferred revenue | (589) | (589) | (1,122) | |||||||||
Deferred revenue | (3,136) | (3,136) | (2,780) | |||||||||
Equity: | ||||||||||||
Accumulated deficit | $ 10,739 | 10,739 | $ 9,217 | |||||||||
Accounting Standards Update 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | Asset-based | ||||||||||||
Revenues: | ||||||||||||
Total revenues | (14,413) | |||||||||||
Accounting Standards Update 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | Subscription-based | ||||||||||||
Revenues: | ||||||||||||
Total revenues | 0 | |||||||||||
Accounting Standards Update 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | Recurring Revenue | ||||||||||||
Revenues: | ||||||||||||
Total revenues | (14,413) | |||||||||||
Accounting Standards Update 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | Professional services and other revenues | ||||||||||||
Revenues: | ||||||||||||
Total revenues | $ (177) |
Revenue (Disaggregation) (Detai
Revenue (Disaggregation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||||||||||
Total revenues | $ 210,080 | $ 203,156 | $ 201,116 | $ 198,011 | $ 182,862 | $ 175,614 | $ 167,417 | $ 157,786 | $ 812,363 | $ 683,679 | $ 578,164 |
United States | |||||||||||
Revenues: | |||||||||||
Total revenues | 778,565 | 617,835 | 519,998 | ||||||||
International | |||||||||||
Revenues: | |||||||||||
Total revenues | 33,798 | 65,844 | 58,166 | ||||||||
Asset-based | |||||||||||
Revenues: | |||||||||||
Total revenues | 481,233 | 410,016 | 352,498 | ||||||||
Subscription-based | |||||||||||
Revenues: | |||||||||||
Total revenues | 295,467 | 245,867 | 198,125 | ||||||||
Recurring Revenue | |||||||||||
Revenues: | |||||||||||
Total revenues | 776,700 | 655,883 | 550,623 | ||||||||
Professional services and other revenues | |||||||||||
Revenues: | |||||||||||
Total revenues | 35,663 | 27,796 | 27,541 | ||||||||
Envestnet | |||||||||||
Revenues: | |||||||||||
Total revenues | 632,605 | 527,905 | 447,632 | ||||||||
Envestnet | Asset-based | |||||||||||
Revenues: | |||||||||||
Total revenues | 481,233 | 410,016 | 352,498 | ||||||||
Envestnet | Subscription-based | |||||||||||
Revenues: | |||||||||||
Total revenues | 138,372 | 106,048 | 84,340 | ||||||||
Envestnet | Recurring Revenue | |||||||||||
Revenues: | |||||||||||
Total revenues | 619,605 | 516,064 | 436,838 | ||||||||
Envestnet | Professional services and other revenues | |||||||||||
Revenues: | |||||||||||
Total revenues | 13,000 | 11,841 | 10,794 | ||||||||
Envestnet - Yodlee | |||||||||||
Revenues: | |||||||||||
Total revenues | 179,758 | 155,774 | 130,532 | ||||||||
Envestnet - Yodlee | Asset-based | |||||||||||
Revenues: | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Envestnet - Yodlee | Subscription-based | |||||||||||
Revenues: | |||||||||||
Total revenues | 157,095 | 139,819 | 113,785 | ||||||||
Envestnet - Yodlee | Recurring Revenue | |||||||||||
Revenues: | |||||||||||
Total revenues | 157,095 | 139,819 | 113,785 | ||||||||
Envestnet - Yodlee | Professional services and other revenues | |||||||||||
Revenues: | |||||||||||
Total revenues | $ 22,663 | $ 15,955 | $ 16,747 |
Revenue (Major Customers) (Deta
Revenue (Major Customers) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | Customer concentration risk | Fidelity | |||
Major Customers | |||
Revenue as a percentage of the company's total | 17.00% | 17.00% | 15.00% |
Revenue (Obligation) (Details)
Revenue (Obligation) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 515,453 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 195,913 |
Remaining Performance Obligations | |
Revenue recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 127,516 |
Remaining Performance Obligations | |
Revenue recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 76,828 |
Remaining Performance Obligations | |
Revenue recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 56,378 |
Remaining Performance Obligations | |
Revenue recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 22,496 |
Remaining Performance Obligations | |
Revenue recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 36,322 |
Remaining Performance Obligations | |
Revenue recognition period |
Revenue (Recognized Deferred) (
Revenue (Recognized Deferred) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Deferred revenue | ||||
Receivables, balance | $ 68,004 | $ 51,522 | ||
Increase/(decrease), net | 12,890 | 8,121 | $ (1,646) | |
Deferred revenue | 23,988 | 21,246 | $ 20,124 | |
Deferred revenue, current, increase/(decrease), net | 3,864 | |||
Deferred revenue | 6,910 | $ 12,047 | 9,267 | |
Deferred revenue non-current, increase/(decrease), net | (2,357) | |||
Recognized deferred revenue | 18,620 | |||
Fees receivable, net | ||||
Deferred revenue | ||||
Receivables, balance | 51,487 | 36,605 | ||
Increase/(decrease), net | 14,882 | |||
Unbilled receivables, balance | 16,517 | $ 13,229 | ||
Unbilled receivables, increase/(decrease), net | $ 3,288 |
Revenue (Capitalized) (Details)
Revenue (Capitalized) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred sales incentive compensation | $ 7,014 | |
Amortization expense for the deferred sales incentive compensation | $ 2,132 | |
Impairment loss for capitalized costs | $ 0 |
Cost of Revenues (Details)
Cost of Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||
Cost of revenues | $ 263,400 | $ 219,037 | $ 180,590 |
Asset-based | |||
Disaggregation of Revenue [Line Items] | |||
Cost of revenues | 232,145 | 194,894 | 160,842 |
Subscription-based | |||
Disaggregation of Revenue [Line Items] | |||
Cost of revenues | 25,192 | 19,818 | 16,113 |
Professional services and other revenues | |||
Disaggregation of Revenue [Line Items] | |||
Cost of revenues | $ 6,063 | $ 4,325 | $ 3,635 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid technology | $ 6,766 | $ 1,843 |
Non-income tax receivable | 5,628 | 2,704 |
Prepaid outside information services | 1,515 | 1,395 |
Restricted cash | 158 | 2,000 |
Income tax receivable | 0 | 1,684 |
Other | 9,490 | 9,844 |
Total prepaid expenses and other current assets | $ 23,557 | $ 19,470 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property and equipment, cost: | |||
Property and equipment, gross | $ 107,405 | $ 89,546 | |
Less accumulated depreciation and amortization | (62,414) | (53,637) | |
Property and equipment, net | 44,991 | 35,909 | |
Cost written off | 11,371 | 7,712 | |
Accumulated depreciation written off | (11,298) | (7,636) | |
Depreciation and amortization expense | $ 15,737 | 15,383 | $ 14,838 |
Computer equipment and software | |||
Property and equipment, cost: | |||
Estimated Useful Life | 3 years | ||
Property and equipment, gross | $ 64,346 | 56,192 | |
Cost written off | 10,733 | 7,528 | |
Accumulated depreciation written off | (10,709) | (7,523) | |
Leasehold improvements | |||
Property and equipment, cost: | |||
Property and equipment, gross | 28,191 | 23,192 | |
Cost written off | 297 | 0 | |
Accumulated depreciation written off | (269) | 0 | |
Office furniture and fixtures | |||
Property and equipment, cost: | |||
Property and equipment, gross | 9,291 | 8,110 | |
Cost written off | 32 | 184 | |
Accumulated depreciation written off | $ (32) | (113) | |
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 | $ 5,577 | 2,052 | |
Cost written off | 309 | 0 | |
Accumulated depreciation written off | $ (288) | 0 | |
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 | ||
Envestnet | |||
Property and equipment, cost: | |||
Cost written off | $ 5,984 | 7,180 | |
Envestnet - Yodlee | |||
Property and equipment, cost: | |||
Cost written off | $ 5,387 | $ 532 |
Internally Developed Software_2
Internally Developed Software (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Internally developed software | $ 70,410 | $ 46,342 | |
Less accumulated amortization | (32,201) | (24,168) | |
Internally developed software, net | 38,209 | 22,174 | |
Amortization expense | $ 8,033 | $ 5,310 | $ 3,646 |
Internally developed software | |||
Estimated Useful Life | 5 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Changes in the carrying amount of the Company's goodwill | ||
Balance at period start | $ 432,955 | $ 431,936 |
Foreign currency | (796) | 562 |
Other | 167 | |
Balance at period end | 519,102 | 432,955 |
Wheelhouse Analytics, LLC | ||
Changes in the carrying amount of the Company's goodwill | ||
Purchase accounting adjustments - Wheelhouse | 457 | |
FolioDynamix | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 79,891 | |
Balance at period end | 79,891 | |
Private Company Acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 6,885 | |
Envestnet | ||
Changes in the carrying amount of the Company's goodwill | ||
Balance at period start | 163,751 | 163,751 |
Foreign currency | 0 | 0 |
Other | 167 | |
Balance at period end | 243,809 | 163,751 |
Envestnet | Wheelhouse Analytics, LLC | ||
Changes in the carrying amount of the Company's goodwill | ||
Purchase accounting adjustments - Wheelhouse | 0 | |
Envestnet | FolioDynamix | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 79,891 | |
Envestnet | Private Company Acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 0 | |
Envestnet - Yodlee | ||
Changes in the carrying amount of the Company's goodwill | ||
Balance at period start | 269,204 | 268,185 |
Foreign currency | (796) | 562 |
Other | 0 | |
Balance at period end | 275,293 | 269,204 |
Envestnet - Yodlee | Wheelhouse Analytics, LLC | ||
Changes in the carrying amount of the Company's goodwill | ||
Purchase accounting adjustments - Wheelhouse | $ 457 | |
Envestnet - Yodlee | FolioDynamix | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 0 | |
Envestnet - Yodlee | Private Company Acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | $ 6,885 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Intangible Assets) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of intangible assets | |||
Gross Carrying Amount | $ 466,756,000 | $ 352,567,000 | |
Accumulated Amortization | (161,515,000) | (129,836,000) | |
Net Carrying Amount | 305,241,000 | 222,731,000 | |
Write-off of fully amortized intangible assets | 22,177,000 | 0 | |
Amortization expense | 53,856,000 | 42,127,000 | $ 45,515,000 |
Customer lists | |||
Components of intangible assets | |||
Gross Carrying Amount | 361,020,000 | 259,350,000 | |
Accumulated Amortization | (102,077,000) | (78,482,000) | |
Net Carrying Amount | $ 258,943,000 | 180,868,000 | |
Customer lists | Minimum | |||
Components of intangible assets | |||
Estimated Useful Life | 7 years | ||
Customer lists | Maximum | |||
Components of intangible assets | |||
Estimated Useful Life | 15 years | ||
Proprietary technologies | |||
Components of intangible assets | |||
Gross Carrying Amount | $ 66,746,000 | 57,377,000 | |
Accumulated Amortization | (36,151,000) | (31,067,000) | |
Net Carrying Amount | $ 30,595,000 | 26,310,000 | |
Proprietary technologies | Minimum | |||
Components of intangible assets | |||
Estimated Useful Life | 4 years | ||
Proprietary technologies | Maximum | |||
Components of intangible assets | |||
Estimated Useful Life | 8 years | ||
Trade names | |||
Components of intangible assets | |||
Gross Carrying Amount | $ 27,990,000 | 24,840,000 | |
Accumulated Amortization | (12,352,000) | (9,701,000) | |
Net Carrying Amount | $ 15,638,000 | 15,139,000 | |
Trade names | Minimum | |||
Components of intangible assets | |||
Estimated Useful Life | 2 years | ||
Trade names | Maximum | |||
Components of intangible assets | |||
Estimated Useful Life | 7 years | ||
Backlog | |||
Components of intangible assets | |||
Estimated Useful Life | 4 years | ||
Gross Carrying Amount | $ 11,000,000 | 11,000,000 | |
Accumulated Amortization | (10,935,000) | (10,586,000) | |
Net Carrying Amount | $ 65,000 | $ 414,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Future Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Future amortization expense of the intangible assets | ||
2,019 | $ 48,334 | |
2,020 | 44,380 | |
2,021 | 35,744 | |
2,022 | 33,266 | |
2,023 | 24,920 | |
Thereafter | 118,597 | |
Net Carrying Amount | $ 305,241 | $ 222,731 |
Other Non-Current Assets (Detai
Other Non-Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Other Assets, Noncurrent [Abstract] | |||
Deferred sales incentive compensation | $ 7,014 | $ 0 | |
Assets to fund deferred compensation liability | 6,346 | 5,185 | |
Lease and other deposits | 4,341 | 4,906 | |
Investments in private companies | 2,862 | 2,731 | |
Unamortized issuance costs on revolving credit facility | 2,251 | 3,106 | |
Other | 2,484 | 1,248 | |
Total other non-current assets | $ 25,298 | $ 22,491 | $ 17,176 |
Other Non-Current Assets (Narra
Other Non-Current Assets (Narrative) (Details) - USD ($) $ in Thousands | Nov. 01, 2016 | Nov. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2018 |
Other Assets, Noncurrent [Line Items] | |||||||||
Ownership interest (as a percent) | 27.00% | 43.00% | |||||||
Upfront consideration | $ 0 | $ 445 | $ 0 | ||||||
Investment in private companies | $ 1,200 | ||||||||
Class B units | |||||||||
Other Assets, Noncurrent [Line Items] | |||||||||
Units owned (in shares) | 538,776 | ||||||||
Historical purchase price | $ 1,250 | ||||||||
Class A units | |||||||||
Other Assets, Noncurrent [Line Items] | |||||||||
Number of shares purchased (in shares) | 1,500,000 | 1,450,000 | |||||||
Ownership interest (as a percent) | 21.40% | 34.50% | |||||||
Upfront consideration | $ 1,500 | $ 1,450 | |||||||
Company's share of loss | $ 1,146 | $ 1,469 | |||||||
Maximum | Class A units | |||||||||
Other Assets, Noncurrent [Line Items] | |||||||||
Ownership interest (as a percent) | 50.00% | ||||||||
Scenario, Forecast | |||||||||
Other Assets, Noncurrent [Line Items] | |||||||||
Mandatory capital contribution payments | $ 1,100 | $ 1,200 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Components of accrued expenses | ||
Accrued investment manager fees | $ 50,635 | $ 39,324 |
Accrued compensation and related taxes | 50,598 | 43,724 |
Sales and use tax payable | 9,733 | 9,037 |
Accrued professional services | 4,517 | 4,985 |
Accrued transaction costs | 4,543 | 0 |
Definite consideration | 0 | 1,250 |
Other accrued expenses | 13,272 | 7,577 |
Total | $ 133,298 | $ 105,897 |
Debt (Summary) (Details)
Debt (Summary) (Details) - USD ($) | Dec. 31, 2018 | May 25, 2018 | Dec. 31, 2017 | Dec. 15, 2014 |
Outstanding debt obligations | ||||
Face amount | $ 172,500,000 | |||
Unaccredited discount on Convertible Notes | $ (48,000,000) | $ (27,500,000) | ||
Unamortized issuance costs | $ (2,251,000) | $ (3,106,000) | ||
Revolving credit facility | 0 | 81,168,000 | ||
Convertible Notes | ||||
Outstanding debt obligations | ||||
Face amount | 172,500,000 | 172,500,000 | ||
Unaccredited discount on Convertible Notes | (5,890,000) | (11,677,000) | ||
Unamortized issuance costs | (899,000) | (1,833,000) | ||
Convertible Debt | 165,711,000 | 158,990,000 | ||
Convertible Notes Due 2023 | ||||
Outstanding debt obligations | ||||
Face amount | 345,000,000 | $ 345,000,000 | 0 | |
Unaccredited discount on Convertible Notes | (42,641,000) | 0 | ||
Unamortized issuance costs | (7,634,000) | 0 | ||
Convertible Debt | 294,725,000 | 0 | ||
Credit Agreement | ||||
Outstanding debt obligations | ||||
Revolving credit facility | $ 0 | $ 81,168,000 |
Debt (Interest Expense) (Detail
Debt (Interest Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Total interest expense | $ 14,534 | $ 8,994 | $ 8,244 |
Convertible Notes, Credit and Amended and Restated Credit Agreements | |||
Debt Instrument [Line Items] | |||
Coupon interest | 6,650 | 3,019 | 3,019 |
Amortization of issuance costs | 2,771 | 3,279 | 2,875 |
Accretion of debt discount | 11,134 | 5,472 | 5,237 |
Interest on credit agreement | 3,994 | 4,153 | 5,128 |
Undrawn and other fees | 654 | 424 | 341 |
Total interest expense | $ 25,203 | $ 16,347 | $ 16,600 |
Debt (Conv) (Details)
Debt (Conv) (Details) | May 25, 2018USD ($)days$ / shares | Dec. 15, 2014USD ($)days$ / shares | May 31, 2018USD ($) | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($) | Sep. 30, 2018 | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | ||||||||
Face amount | $ 172,500,000 | |||||||
Net proceeds from offering | $ 166,967,000 | |||||||
Interest rate (as a percent) | 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 | |||||||
Threshold trading days (in days) | days | 20 | |||||||
Consecutive trading days | days | 30 | |||||||
Threshold percentage of stock price trigger (as a percent) | 130.00% | |||||||
Threshold business days | 5 days | |||||||
Threshold consecutive trading-day period | 5 days | 5 days | ||||||
Threshold percentage of trading price trigger (as a percent) | 98.00% | 98.00% | ||||||
Allocated to equity components | $ 46,611,000 | $ 26,618,000 | ||||||
Offering costs | 1,389,000 | 882,000 | ||||||
Discount | 48,000,000 | $ 27,500,000 | ||||||
Effective interest rate (as a percent) | 6.00% | 6.00% | 6.00% | |||||
Other non-current assets | ||||||||
Debt Instrument [Line Items] | ||||||||
Issuance costs | $ 4,651,000 | |||||||
Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 172,500,000 | $ 172,500,000 | ||||||
Interest rate (as a percent) | 1.75% | |||||||
Conversion price (in dollars per share) | $ / shares | $ 68.31 | $ 62.88 | ||||||
Discount | $ 5,890,000 | $ 11,677,000 | ||||||
Accretion of debt discount | 5,690,000 | 5,472,000 | $ 5,237,000 | |||||
Convertible Notes Due 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 345,000,000 | 345,000,000 | 0 | |||||
Net proceeds from offering | $ 335,018,000 | |||||||
Interest rate (as a percent) | 1.75% | |||||||
Issuance costs | 8,593,000 | |||||||
Repurchase percentage of principal (as a percent) | 100.00% | |||||||
Conversion rate | 0.0146381 | |||||||
Principal amount | $ / shares | $ 1,000 | |||||||
Conversion price (in dollars per share) | $ / shares | $ 68.31 | |||||||
Threshold trading days (in days) | days | 20 | |||||||
Consecutive trading days | days | 30 | |||||||
Threshold percentage of stock price trigger (as a percent) | 130.00% | |||||||
Discount | 42,641,000 | $ 0 | ||||||
Accretion of debt discount | $ 5,444,000 | |||||||
Effective interest rate (as a percent) | 6.00% |
Debt (Credit Agreement) (Detail
Debt (Credit Agreement) (Details) - USD ($) | Nov. 19, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 18, 2017 | Dec. 31, 2014 |
Debt | |||||
Revolving credit facility | $ 0 | $ 81,168,000 | |||
Credit Agreement | |||||
Debt | |||||
Credit facility amount | $ 70,000,000 | ||||
Voting equity of foreign subsidiary pledged (as a percent) | 66.00% | ||||
Non-voting equity of foreign subsidiary pledged (as a percent) | 100.00% | ||||
Commitment fee | 0.25% | ||||
Revolving credit facility | $ 0 | $ 81,168,000 | |||
Credit Agreement | Other non-current assets | |||||
Debt | |||||
Debt issuance cost, outstanding | 2,251,000 | ||||
Letters of credit | |||||
Debt | |||||
Credit facility amount | $ 5,000,000 | $ 5,000,000 | |||
Second Amended and Restated Credit Agreement | |||||
Debt | |||||
Credit facility amount | 350,000,000 | ||||
Right to increase credit facility, amount | $ 50,000,000 | ||||
Second Amended and Restated Credit Agreement | Prepaid expense and other current assets | |||||
Debt | |||||
Debt issuance cost, outstanding | $ 855,000 | ||||
Minimum | Credit Agreement | LIBOR | |||||
Debt | |||||
Spread on variable rate basis (as a percent) | 1.50% | ||||
Maximum | Credit Agreement | LIBOR | |||||
Debt | |||||
Spread on variable rate basis (as a percent) | 3.25% |
Other Non-Current Liabilities_2
Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Uncertain tax positions | $ 10,394 | $ 10,640 |
Deferred compensation liability | 6,196 | 4,364 |
Other | 1,415 | 98 |
Other non-current liabilities | $ 18,005 | $ 15,102 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring Basis - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Level 1 | ||
Assets | ||
Total Assets | $ 265,554 | $ 39,400 |
Liabilities | ||
Total liabilities | 6,196 | 4,364 |
Level 1 | Deferred compensation liability | ||
Liabilities | ||
Total liabilities | 6,196 | 4,364 |
Level 1 | Money Market Funds | ||
Assets | ||
Total Assets | 265,554 | 39,400 |
Level 3 | ||
Assets | ||
Total Assets | 6,346 | 5,185 |
Liabilities | ||
Total liabilities | 732 | 2,781 |
Level 3 | Contingent consideration | ||
Liabilities | ||
Total liabilities | 732 | 2,781 |
Level 3 | Asset To Fund Deferred Compensation Liability | ||
Assets | ||
Total Assets | 6,346 | 5,185 |
Fair Value | ||
Assets | ||
Total Assets | 271,900 | 44,585 |
Liabilities | ||
Total liabilities | 6,928 | 7,145 |
Fair Value | Contingent consideration | ||
Liabilities | ||
Total liabilities | 732 | 2,781 |
Fair Value | Deferred compensation liability | ||
Liabilities | ||
Total liabilities | 6,196 | 4,364 |
Fair Value | Money Market Funds | ||
Assets | ||
Total Assets | 265,554 | 39,400 |
Fair Value | Asset To Fund Deferred Compensation Liability | ||
Assets | ||
Total Assets | $ 6,346 | $ 5,185 |
Fair Value Measurements (Reconc
Fair Value Measurements (Reconciliation of Deferred Compensation Liability and Contingent Consideration Liability) (Details) - Recurring Basis $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Reconciliation of assets to fund deferred compensation liability | |
December 31, 2017 | $ 5,185 |
Contributions and fair value adjustments | 1,161 |
December 31, 2018 | 6,346 |
Changes in the fair value of Contingent Consideration Liabilities | |
December 31, 2017 | 2,781 |
Payment of contingent consideration liability | (2,193) |
Accretion on contingent consideration | 144 |
December 31, 2018 | $ 732 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | May 25, 2018 | Dec. 15, 2014 | |
Fair Value Measurements | |||||
Fair value asset transfers between Levels 1, 2 and 3 | $ 0 | ||||
Face amount | $ 172,500,000 | ||||
Revolving credit facility | 0 | $ 81,168,000 | |||
Convertible Notes | |||||
Fair Value Measurements | |||||
Face amount | 172,500,000 | 172,500,000 | |||
Convertible Notes | 0 | 158,990,000 | |||
Convertible Notes Due 2023 | |||||
Fair Value Measurements | |||||
Face amount | 345,000,000 | 0 | $ 345,000,000 | ||
Convertible Notes | 294,725,000 | 0 | |||
Credit Agreement | |||||
Fair Value Measurements | |||||
Revolving credit facility | 0 | 81,168,000 | |||
Carrying Value | Convertible Notes | |||||
Fair Value Measurements | |||||
Convertible Notes | 165,711,000 | 158,990,000 | |||
Carrying Value | 2023 Convertible Notes | |||||
Fair Value Measurements | |||||
Convertible Notes | 294,725,000 | ||||
Total liabilities | 339,024,000 | ||||
Fair Value | Convertible Notes | |||||
Fair Value Measurements | |||||
Convertible Notes | 174,101,000 | 180,180,000 | |||
Recurring Basis | |||||
Fair Value Measurements | |||||
Fair value, measurement with unobservable inputs, asset value | 6,346,000 | 5,185,000 | |||
Recurring Basis | Fair Value | |||||
Fair Value Measurements | |||||
Total liabilities | 6,928,000 | 7,145,000 | |||
Recurring Basis | Other non-current assets | |||||
Fair Value Measurements | |||||
Fair value, measurement with unobservable inputs, asset value | 6,346,000 | ||||
FinaConnect, Inc. | |||||
Fair Value Measurements | |||||
Contingent Consideration first year | 0 | $ 2,286,000 | $ 1,929,000 | ||
Wheelhouse Analytics, LLC | |||||
Fair Value Measurements | |||||
Contingent Consideration first year | $ 2,193,000 |
Income Taxes (Income (Loss) Bef
Income Taxes (Income (Loss) Before Income Tax Provision) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of Income before income tax provision | |||
Domestic | $ (18,242) | $ (9,387) | $ (47,059) |
Foreign | 9,080 | 7,698 | 6,569 |
Loss before income tax provision (benefit) | $ (9,162) | $ (1,689) | $ (40,490) |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Provision) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal | $ 4,564 | $ (1,201) | $ 3,812 |
State | 1,044 | 951 | 1,172 |
Foreign | 4,849 | 6,438 | 4,509 |
Current income tax provision | 10,457 | 6,188 | 9,493 |
Deferred: | |||
Federal | (19,444) | (4,439) | 5,992 |
State | (3,182) | 146 | 117 |
Foreign | (1,003) | (304) | (525) |
Deferred Total | (23,629) | (4,597) | 5,584 |
Income tax provision | $ (13,172) | $ 1,591 | $ 15,077 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred Tax Assets | |||
Deferred revenue | $ 5,642 | $ 5,723 | |
Prepaid expenses and accruals | 3,302 | 1,459 | |
Deferred rent and lease incentives | 4,255 | 3,419 | |
Net operating loss and tax credit carryforwards | 78,689 | 66,896 | |
Property and equipment and intangible assets | (73,778) | (51,182) | |
Stock-based compensation expense | 7,667 | 6,894 | |
Convertible notes | (11,918) | (2,886) | |
Other | 1,032 | 1,221 | |
Total deferred tax assets | 14,891 | 31,544 | |
Less valuation allowance | (15,531) | (32,513) | |
Net deferred tax (liabilities) | (640) | (969) | |
Tax Cuts and Jobs Act of 2017, income tax expense (benefit) | 814 | ||
BEAT Liability | 3,760 | 0 | $ 0 |
Valuation allowance related to capital losses | 15,531 | 32,513 | |
Foreign earnings, tax liability | $ 4,500 | ||
Undistributed earnings of foreign subsidiaries | $ 33,000 | $ 20,600 |
Income Taxes (Rate Reconciliati
Income Taxes (Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of expected tax provision | |||
Tax provision (benefit), at U.S. federal statutory tax rate | $ (1,559) | $ (573) | $ (13,767) |
State income tax, net of federal tax provision | (1,714) | (1,251) | (2,053) |
Effect of stock-based compensation excess tax benefit | (7,782) | (11,522) | 0 |
Effects of permanent items | 2,967 | 1,145 | 1,773 |
Change in valuation allowance | (4,244) | 2,151 | 26,269 |
Effect of change in federal income tax rate | 0 | 13,792 | 0 |
Effect of change in state income tax rate | (269) | 537 | 279 |
Uncertain tax positions | (2,062) | 3,668 | 2,024 |
BEAT Liability | 3,760 | 0 | 0 |
Research and development credits | (4,770) | (2,815) | (2,758) |
Change in permanent reinvestment assertion | 0 | (4,494) | 0 |
State net operating loss adjustment, net of valuation allowance impact | 0 | 836 | 0 |
Other | 2,501 | 117 | 3,310 |
Income tax provision | $ (13,172) | $ 1,591 | $ 15,077 |
Income Taxes (NOL) (Details)
Income Taxes (NOL) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Operating Loss Carryforwards | |
AMT credits | $ 1,455 |
Federal | |
Operating Loss Carryforwards | |
NOL carryforwards | 267,000 |
Federal | Research and development | |
Operating Loss Carryforwards | |
Tax credit carryforward | 15,259 |
State | |
Operating Loss Carryforwards | |
NOL carryforwards | 153,000 |
State | Alternative minimum | |
Operating Loss Carryforwards | |
Tax credit carryforward | 19 |
State | Research and development | |
Operating Loss Carryforwards | |
Tax credit carryforward | 9,452 |
Foreign | |
Operating Loss Carryforwards | |
Tax credit carryforward | $ 1,401 |
Minimum | |
Operating Loss Carryforwards | |
AMT credits refundable , Percent | 50.00% |
Maximum | |
Operating Loss Carryforwards | |
AMT credits refundable , Percent | 100.00% |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of unrecognized tax benefit | |||
Unrecognized tax benefits balance at beginning of year | $ 18,312 | $ 16,476 | $ 14,129 |
Additions based on tax positions related to the current year | 1,907 | 1,691 | 1,153 |
Decrease based on tax positions related to prior years | (3,976) | ||
Additions based on tax positions related to prior years | 145 | 1,257 | |
Reductions for settlements with taxing authorities | (615) | 0 | 0 |
Reductions for lapses of statute of limitations | 0 | 0 | (63) |
Unrecognized tax benefits balance at end of year | 15,628 | 18,312 | $ 16,476 |
Unrecognized tax benefits that would impact effective tax rate, if recognized | 15,628 | ||
Potential interest and penalties related to unrecognized tax benefits included in income tax expense | 126 | 1,690 | |
Accrued interest and penalties on unrecognized tax benefits | $ 5,977 | $ 6,018 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 20, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 25, 2016 |
Stockholders' equity | |||||
Shares authorized for repurchase | 2,000,000 | ||||
Common stock repurchased | 0 | 0 | |||
Remaining shares authorized for repurchase | 1,956,390 | 1,956,390 | |||
Issuance of common stock and warrants - private placement, net of offering costs | $ 122,704 | $ 0 | $ 0 | ||
Payments of stock issuance costs | 4,627 | ||||
Common Stock | |||||
Stockholders' equity | |||||
Issuance of common stock and warrants - private placement, net of offering costs | $ 122,788 | ||||
Private Placement | Common Stock | |||||
Stockholders' equity | |||||
Issuance of common stock - private placement (in shares) | 2,356,000 | ||||
Sale of stock, price per share (in dollars per share) | $ 52.13 | ||||
Warrant | Private Placement | Common Stock | |||||
Stockholders' equity | |||||
Sale of stock, price per share (in dollars per share) | $ 65.16 | ||||
Number of shares issued in transaction (in shares) | 470,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - shares | Jun. 22, 2010 | Jul. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 13, 2017 | May 13, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Maximum number of shares available for future issuance (in shares) | 3,078,360 | |||||||
U.S. federal corporate income tax rate (as a percent) | 25.10% | 38.00% | 39.10% | |||||
Target Incentive Awards | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vested (in shares) | 30,000 | 26,000 | ||||||
Unvested restricted stock units and awards | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vested (in shares) | 1,073,681 | 969,513 | 1,082,206 | |||||
Awards | 996,099 | 959,591 | 1,009,661 | |||||
2004 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based awards, contractual term | 10 years | |||||||
2010 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based awards, contractual term | 10 years | |||||||
Shares reserved for delivery (in shares) | 2,700,000 | |||||||
Maximum number of shares available for future issuance (in shares) | 3,525,000 | 2,700,000 | ||||||
2012 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares authorized for issuance (in shares) | 1,023,851 | |||||||
2012 Plan | Target Incentive Awards | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares authorized for issuance (in shares) | 559,551 | |||||||
Unvested restricted stock, service condition period | 2 years | |||||||
2012 Plan | Target Incentive Awards | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting rights | P3Y | |||||||
2012 Plan | Target Incentive Awards | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting rights | P5Y | |||||||
2012 Plan | Unvested restricted stock units and awards | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vested (in shares) | 559,551 | |||||||
2015 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares authorized for issuance (in shares) | 1,058,807 | |||||||
Awards | 0 |
Stock-Based Compensation (Compe
Stock-Based Compensation (Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of employee stock-based compensation expense | |||
Stock-based compensation expense | $ 40,245 | $ 31,331 | $ 33,276 |
Tax effect on stock-based compensation expense | (10,093) | (11,906) | (13,001) |
Net effect on income | $ 30,152 | $ 19,425 | $ 20,275 |
Stock-Based Compensation (Weigh
Stock-Based Compensation (Weighted Average Assumptions) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of weighted average assumptions used to value options granted | |||
Grant date fair value of options (in dollars per share) | $ 0 | $ 14.51 | $ 9.56 |
Volatility (as a percent) | 0.00% | 43.80% | 42.20% |
Risk-free interest rate (as a percent) | 0.00% | 2.10% | 1.40% |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Expected term (in years) | 0 years | 6 years 3 months 18 days | 6 years 3 months 18 days |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Options) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total intrinsic value of options exercised | $ 15,667 | $ 29,562 | $ 14,165 | |
Cash received from exercises of stock options | $ 5,305 | $ 7,951 | $ 4,924 | |
Weighted-Average Exercise Price | ||||
Granted (in dollars per share) | $ 0 | |||
Exercised (in dollars per share) | $ 8.23 | |||
Forfeited (in dollars per share) | $ 35.08 | |||
Weighted-Average Remaining Contractual Life | ||||
Outstanding | 3 years 4 months 24 days | 4 years 3 months 18 days | 4 years 3 months 18 days | 4 years 8 months 12 days |
Options exercisable | 3 years 3 months 18 days | |||
Aggregate Intrinsic Value | ||||
Outstanding (in dollars) | $ 56,046 | $ 69,939 | $ 63,264 | $ 61,199 |
Options exercisable (in dollars) | $ 54,837 | |||
Stock options | ||||
Options | ||||
Outstanding at the beginning of the period (in shares) | 2,254,565 | 3,033,194 | 3,533,791 | |
Granted (in shares) | 0 | 75,238 | 163,864 | |
Exercised (in shares) | (359,345) | (837,857) | (598,382) | |
Forfeited (in shares) | (7,251) | (16,010) | (66,079) | |
Outstanding at the end of the period (in shares) | 1,887,969 | 2,254,565 | 3,033,194 | 3,533,791 |
Options exercisable (in shares) | 1,830,082 | |||
Weighted-Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 19.23 | $ 16.33 | $ 15.03 | |
Granted (in dollars per share) | 31.70 | 22.38 | ||
Exercised (in dollars per share) | 14.76 | 9.49 | ||
Forfeited (in dollars per share) | 27.51 | 37.42 | ||
Outstanding at the end of the period (in dollars per share) | 20.05 | 19.23 | 16.33 | $ 15.03 |
Options exercisable (in dollars per share) | 19.78 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||
Intrinsic value per share (in dollars per share) | $ 49.19 | $ 49.85 | $ 35.25 | |
Unrecognized stock-based compensation expense related to unvested stock options | $ 632 | |||
Unrecognized compensation expense weighted-average recognition period | 1 year | |||
Stock options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||
Exercise prices of stock options outstanding (in dollars per share) | $ 7.15 | |||
Stock options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||
Exercise prices of stock options outstanding (in dollars per share) | $ 55.29 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock Units and Restricted Stock Awards) (Details) $ / shares in Units, $ in Thousands | Nov. 19, 2015USD ($)shares | Jul. 31, 2018shares | Mar. 31, 2018shares | Aug. 31, 2016shares | May 31, 2016shares | Dec. 31, 2018USD ($)tranche$ / sharesshares | Dec. 31, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares |
Unvested restricted stock units and awards | ||||||||
Number of Shares | ||||||||
Balance at the beginning of the period (in shares) | 1,766,639 | 1,894,759 | 2,153,211 | |||||
Granted (in shares) | 996,099 | 959,591 | 1,009,661 | |||||
Vested (in shares) | (1,073,681) | (969,513) | (1,082,206) | |||||
Forfeited (in shares) | (103,269) | (118,198) | (185,907) | |||||
Balance at the end of the period (in shares) | 1,585,788 | 1,766,639 | 1,894,759 | |||||
Weighted-Average Grant Date Fair Value per Share | ||||||||
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 32.48 | $ 30.40 | $ 35.63 | |||||
Granted (in dollars per share) | $ / shares | 55.42 | 32.38 | 28.82 | |||||
Vested (in dollars per share) | $ / shares | 32.62 | 31.51 | 29.12 | |||||
Forfeited (in dollars per share) | $ / shares | 40.37 | 30.11 | 30.96 | |||||
Balance at the end of the period (in dollars per share) | $ / shares | $ 46.33 | $ 32.48 | $ 30.40 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||||||
Unrecognized compensation expense related to shares | $ | $ 55,427 | |||||||
Unrecognized compensation expense weighted-average recognition period | 1 year 10 months 29 days | |||||||
Restricted stock with performance and subsequent service conditions | ||||||||
Number of Shares | ||||||||
Granted (in shares) | 125,000 | 205,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||||||
Number of executive officers who received performance based awards | 4 | 3 | ||||||
Replacement Awards | Yodlee, Inc | ||||||||
Number of Shares | ||||||||
Granted (in shares) | 1,052,000 | |||||||
Restricted Stock Units | Yodlee, Inc | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||||||
Unrecognized compensation expense related to shares | $ | $ 28,518 | $ 767 | ||||||
Unrecognized compensation expense weighted-average recognition period | 43 months | |||||||
Stock consideration | $ | $ 32,836 | |||||||
Attribution of the fair market value of replacement awards | $ | $ 4,318 | |||||||
Performance Shares | ||||||||
Number of Shares | ||||||||
Vested (in shares) | (30,000) | (26,000) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||||||
Number of annual tranches | tranche | 3 | |||||||
Minimum | Performance Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||||||
Number of shares to be vest upon each evaluation date (as a percent) | 50.00% | |||||||
Maximum | Performance Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||||||
Number of shares to be vest upon each evaluation date (as a percent) | 150.00% |
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 15, 2014 | |
Conversion price (in dollars per share) | $ 62.88 | |||||||||||
Earnings Per Share, Basic [Abstract] | ||||||||||||
Net income (loss) attributable to Envestnet, Inc. | $ 223 | $ 2,954 | $ (5,526) | $ 8,104 | $ 17,645 | $ (1,320) | $ (6,470) | $ (13,135) | $ 5,755 | $ (3,280) | $ (55,567) | |
Basic number of weighted-average shares outstanding | 45,268,002 | 43,732,148 | 42,814,222 | |||||||||
Basic (in dollars per share) | $ 0 | $ 0.06 | $ (0.12) | $ 0.18 | $ 0.40 | $ (0.03) | $ (0.15) | $ (0.30) | $ 0.13 | $ (0.08) | $ (1.30) | |
Earnings Per Share, Diluted [Abstract] | ||||||||||||
Net income (loss) attributable to Envestnet, Inc. | $ 5,755 | $ (3,280) | $ (55,567) | |||||||||
Effect of dilutive shares: | ||||||||||||
Options to purchase common stock (in shares) | 1,304,493 | 0 | 0 | |||||||||
Restricted stock (in shares) | 811,590 | 0 | 0 | |||||||||
Diluted number of weighted-average shares outstanding | 47,384,085 | 43,732,148 | 42,814,222 | |||||||||
Diluted (in dollars per share) | 0 | $ 0.06 | $ (0.12) | $ 0.17 | 0.38 | $ (0.03) | $ (0.15) | $ (0.30) | $ 0.12 | $ (0.08) | $ (1.30) | |
Convertible Notes | ||||||||||||
Conversion price (in dollars per share) | $ 68.31 | $ 62.88 | $ 68.31 | $ 62.88 |
Net Income (Loss) Per Share Ant
Net Income (Loss) Per Share Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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) | 8,263,826 | 6,764,525 | 7,671,274 |
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) | 0 | 2,254,565 | 3,033,194 |
Unvested restricted stock units and awards | |||
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) | 0 | 1,766,639 | 1,894,759 |
Warrants - private placement | |||
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) | 470,000 | 0 | 0 |
Convertible Notes | |||
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) | 7,793,826 | 2,743,321 | 2,743,321 |
Commitments and Contingencies_2
Commitments and Contingencies (Leases) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Future annual minimum lease commitments under operating leases | |
2,019 | $ 15,997 |
2,020 | 15,437 |
2,021 | 14,705 |
2,022 | 10,816 |
2,023 | 9,910 |
Thereafter | 39,449 |
Total | $ 106,314 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)claim | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 19,658 | $ 18,084 | $ 14,984 |
Number of previous claims experienced | claim | 0 | ||
Future minimum unconditional purchase obligations | |||
Estimated future minimum unconditional purchase obligations | $ 41,112 | ||
Sales and use tax liability | 8,643 | 8,522 | |
Non-income tax receivable | $ 5,246 | $ 2,704 |
Benefit Plan (Details)
Benefit Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Voluntary employer matching contributions | $ 4,778 | $ 4,038 | $ 2,270 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Information | |||||||||||
Total revenues | $ 210,080 | $ 203,156 | $ 201,116 | $ 198,011 | $ 182,862 | $ 175,614 | $ 167,417 | $ 157,786 | $ 812,363 | $ 683,679 | $ 578,164 |
Income (loss) from operations | 11,503 | 3,395 | 5 | (738) | 12,683 | 4,348 | 2,743 | (3,354) | 14,165 | 16,420 | (23,444) |
Operating expenses | (798,198) | (667,259) | (601,608) | ||||||||
Interest expense, net | (22,840) | (16,146) | (16,563) | ||||||||
Other expense, net | (487) | (1,963) | (483) | ||||||||
Loss before income tax provision (benefit) | (9,162) | (1,689) | (40,490) | ||||||||
Income tax provision | (13,172) | 1,591 | 15,077 | ||||||||
Net income (loss) | 4,010 | (3,280) | (55,567) | ||||||||
Add: Net loss attributable to non-controlling interest | 1,745 | 0 | 0 | ||||||||
Net income (loss) attributable to Envestnet, Inc. | 223 | $ 2,954 | $ (5,526) | $ 8,104 | 17,645 | $ (1,320) | $ (6,470) | $ (13,135) | 5,755 | (3,280) | (55,567) |
Assets | 1,313,747 | 862,052 | 1,313,747 | 862,052 | |||||||
Depreciation and amortization | 77,626 | 62,820 | 63,999 | ||||||||
Capital expenditures | 44,592 | 27,569 | 22,576 | ||||||||
Operating Segments | |||||||||||
Segment Information | |||||||||||
Income (loss) from operations | 65,478 | 55,993 | 3,131 | ||||||||
Segment Reconciling | |||||||||||
Segment Information | |||||||||||
Operating expenses | (51,313) | (39,573) | (26,575) | ||||||||
Envestnet | |||||||||||
Segment Information | |||||||||||
Total revenues | 632,605 | 527,905 | 447,632 | ||||||||
Assets | 810,971 | 353,048 | 810,971 | 353,048 | |||||||
Depreciation and amortization | 45,139 | 26,223 | 24,784 | ||||||||
Capital expenditures | 36,406 | 22,434 | 17,120 | ||||||||
Envestnet | Operating Segments | |||||||||||
Segment Information | |||||||||||
Income (loss) from operations | 75,491 | 75,449 | 41,678 | ||||||||
Envestnet - Yodlee | |||||||||||
Segment Information | |||||||||||
Total revenues | 179,758 | 155,774 | 130,532 | ||||||||
Assets | $ 502,776 | $ 509,004 | 502,776 | 509,004 | |||||||
Depreciation and amortization | 32,487 | 36,597 | 39,215 | ||||||||
Capital expenditures | 8,186 | 5,135 | 5,456 | ||||||||
Envestnet - Yodlee | Operating Segments | |||||||||||
Segment Information | |||||||||||
Income (loss) from operations | $ (10,013) | $ (19,456) | $ (38,547) | ||||||||
Revenues | Customer concentration risk | Fidelity | |||||||||||
Segment Information | |||||||||||
Fidelity revenue as a percentage of Envestnet segment revenue | 17.00% | 17.00% | 15.00% | ||||||||
Revenues | Envestnet | Customer concentration risk | Fidelity | |||||||||||
Segment Information | |||||||||||
Fidelity revenue as a percentage of Envestnet segment revenue | 21.00% | 22.00% | 19.00% | ||||||||
Asset-based | |||||||||||
Segment Information | |||||||||||
Total revenues | $ 481,233 | $ 410,016 | $ 352,498 | ||||||||
Asset-based | Envestnet | |||||||||||
Segment Information | |||||||||||
Total revenues | 481,233 | 410,016 | 352,498 | ||||||||
Asset-based | Envestnet - Yodlee | |||||||||||
Segment Information | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Subscription-based | |||||||||||
Segment Information | |||||||||||
Total revenues | 295,467 | 245,867 | 198,125 | ||||||||
Subscription-based | Envestnet | |||||||||||
Segment Information | |||||||||||
Total revenues | 138,372 | 106,048 | 84,340 | ||||||||
Subscription-based | Envestnet - Yodlee | |||||||||||
Segment Information | |||||||||||
Total revenues | 157,095 | 139,819 | 113,785 | ||||||||
Recurring Revenue | |||||||||||
Segment Information | |||||||||||
Total revenues | 776,700 | 655,883 | 550,623 | ||||||||
Recurring Revenue | Envestnet | |||||||||||
Segment Information | |||||||||||
Total revenues | 619,605 | 516,064 | 436,838 | ||||||||
Recurring Revenue | Envestnet - Yodlee | |||||||||||
Segment Information | |||||||||||
Total revenues | 157,095 | 139,819 | 113,785 | ||||||||
Professional services and other revenues | |||||||||||
Segment Information | |||||||||||
Total revenues | 35,663 | 27,796 | 27,541 | ||||||||
Professional services and other revenues | Envestnet | |||||||||||
Segment Information | |||||||||||
Total revenues | 13,000 | 11,841 | 10,794 | ||||||||
Professional services and other revenues | Envestnet - Yodlee | |||||||||||
Segment Information | |||||||||||
Total revenues | $ 22,663 | $ 15,955 | $ 16,747 |
Geographical Information (Detai
Geographical Information (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 44,991 | $ 35,909 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 39,412 | 30,647 |
India | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 3,969 | 4,907 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 1,610 | $ 355 |
Net Capital Requirements (Detai
Net Capital Requirements (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Regulatory Capital Requirements [Abstract] | |
SEC rule, maximum net capital ratio | 15 |
SEC rule, restrictions on equity and dividends, maximum net capital ratio | 10 |
Net capital of the company | $ 1,259 |
Excess of net capital | 1,159 |
Required net capital | $ 100 |
Company's net capital ratio | 0.03 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jan. 02, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Subsequent Events | ||||
Cash consideration | $ 0 | $ 445,000 | $ 0 | |
Subsequent Event | Abe AI | ||||
Subsequent Events | ||||
Cash consideration | $ 18,500 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 210,080 | $ 203,156 | $ 201,116 | $ 198,011 | $ 182,862 | $ 175,614 | $ 167,417 | $ 157,786 | $ 812,363 | $ 683,679 | $ 578,164 |
Income (loss) from operations | 11,503 | 3,395 | 5 | (738) | 12,683 | 4,348 | 2,743 | (3,354) | 14,165 | 16,420 | (23,444) |
Net income (loss) attributable to Envestnet, Inc. | $ 223 | $ 2,954 | $ (5,526) | $ 8,104 | $ 17,645 | $ (1,320) | $ (6,470) | $ (13,135) | $ 5,755 | $ (3,280) | $ (55,567) |
Net income (loss) per share: | |||||||||||
Basic (in dollars per share) | $ 0 | $ 0.06 | $ (0.12) | $ 0.18 | $ 0.40 | $ (0.03) | $ (0.15) | $ (0.30) | $ 0.13 | $ (0.08) | $ (1.30) |
Diluted (in dollars per share) | $ 0 | $ 0.06 | $ (0.12) | $ 0.17 | $ 0.38 | $ (0.03) | $ (0.15) | $ (0.30) | $ 0.12 | $ (0.08) | $ (1.30) |