Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 02, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ENVESTNET, INC. | |
Entity Central Index Key | 0001337619 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 51,870,583 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 245,735 | $ 289,345 |
Fees receivable, net | 66,365 | 68,004 |
Prepaid expenses and other current assets | 36,916 | 23,557 |
Total current assets | 349,016 | 380,906 |
Property and equipment, net | 46,794 | 44,991 |
Internally developed software, net | 42,771 | 38,209 |
Intangible assets, net | 296,813 | 305,241 |
Goodwill | 540,524 | 519,102 |
Operating lease right-of-use assets, net | 67,728 | |
Other non-current assets | 26,945 | 25,298 |
Total assets | 1,370,591 | 1,313,747 |
Current liabilities: | ||
Accrued expenses and other liabilities | 101,457 | 133,298 |
Accounts payable | 25,135 | 19,567 |
Operating lease liabilities | 12,309 | |
Convertible Notes due 2019 | 167,442 | 165,711 |
Contingent consideration | 744 | 732 |
Deferred revenue | 31,639 | 23,988 |
Total current liabilities | 338,726 | 343,296 |
Convertible Notes due 2023 | 297,392 | 294,725 |
Contingent consideration | 7,717 | 0 |
Deferred revenue | 6,580 | 6,910 |
Non-current operating lease liabilities | 73,377 | |
Deferred rent and lease incentive | 0 | 17,569 |
Deferred tax liabilities, net | 809 | 640 |
Other non-current liabilities | 24,452 | 18,005 |
Total liabilities | 749,053 | 681,145 |
Commitments and contingencies | ||
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; 61,934,458 and 61,238,898 shares issued as of March 31, 2019 and December 31, 2018, respectively; 48,656,904 and 48,121,800 shares outstanding as of March 31, 2019 and December 31, 2018, respectively | 309 | 306 |
Additional paid-in capital | 777,926 | 761,128 |
Accumulated deficit | (77,067) | (58,882) |
Treasury stock at cost, 13,277,554 and 13,117,098 shares as of March 31, 2019 and December 31, 2018, respectively | (77,677) | (67,858) |
Accumulated other comprehensive loss | (772) | (994) |
Total stockholders’ equity | 622,719 | 633,700 |
Non-controlling interest | (1,181) | (1,098) |
Total equity | 621,538 | 632,602 |
Total liabilities and equity | $ 1,370,591 | $ 1,313,747 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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) | 61,934,458 | 61,238,898 |
Common stock, shares outstanding (in shares) | 48,656,904 | 48,121,800 |
Treasury stock (in shares) | 13,277,554 | 13,117,098 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||
Total revenues | $ 199,666 | $ 198,011 |
Operating expenses: | ||
Cost of revenues | 61,645 | 62,934 |
Compensation and benefits | 86,717 | 83,540 |
General and administration | 40,524 | 32,729 |
Depreciation and amortization | 19,517 | 19,546 |
Total operating expenses | 208,403 | 198,749 |
Loss from operations | (8,737) | (738) |
Other expense, net | (5,763) | (5,254) |
Loss before income tax provision (benefit) | (14,500) | (5,992) |
Income tax provision (benefit) | 3,768 | (13,994) |
Net income (loss) | (18,268) | 8,002 |
Add: Net loss attributable to non-controlling interest | 83 | 102 |
Net income (loss) attributable to Envestnet, Inc. | $ (18,185) | $ 8,104 |
Net income (loss) per share attributable to Envestnet, Inc.: | ||
Basic (in dollars per share) | $ (0.38) | $ 0.18 |
Diluted (in dollars per share) | $ (0.38) | $ 0.17 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 48,237,265 | 44,782,982 |
Diluted (in shares) | 48,237,265 | 47,145,560 |
Recurring | ||
Revenues: | ||
Total revenues | $ 192,021 | $ 190,848 |
Asset-based | ||
Revenues: | ||
Total revenues | 108,934 | 121,153 |
Operating expenses: | ||
Cost of revenues | 53,842 | 57,572 |
Subscription-based | ||
Revenues: | ||
Total revenues | 83,087 | 69,695 |
Operating expenses: | ||
Cost of revenues | 7,677 | 5,226 |
Professional services and other revenues | ||
Revenues: | ||
Total revenues | 7,645 | 7,163 |
Operating expenses: | ||
Cost of revenues | $ 126 | $ 136 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) attributable to Envestnet, Inc. | $ (18,185) | $ 8,104 |
Other comprehensive income (loss), net of taxes: | ||
Foreign currency translation gain (loss) | 222 | (327) |
Comprehensive income (loss) attributable to Envestnet, Inc. | $ (17,963) | $ 7,777 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Non-controlling Interest |
Balance, December 31, 2018 (in shares) at Dec. 31, 2017 | 57,450,056 | 12,749,415 | |||||
Balance, December 31, 2018 at Dec. 31, 2017 | $ 436,670 | $ 287 | $ (47,042) | $ 556,257 | $ 624 | $ (73,854) | $ 398 |
Increase (decrease) in shareholders' equity | |||||||
Adoption of ASC 606 | 9,217 | 9,217 | |||||
Exercise of stock options (in shares) | 162,857 | ||||||
Exercise of stock options | 2,404 | $ 1 | 2,403 | ||||
Issuance of common stock - vesting of restricted stock units (in shares) | 503,668 | ||||||
Issuance of common stock - vesting of restricted stock units | 2 | $ 2 | |||||
Stock-based compensation expense | 8,495 | 8,495 | |||||
Purchase of treasury stock for stock-based tax withholdings (in shares) | (166,217) | ||||||
Purchase of treasury stock for stock-based tax withholdings | (9,296) | $ (9,296) | |||||
Issuance of non-controlling units in private company | 873 | 873 | |||||
Foreign currency translation gain | (327) | (327) | |||||
Net loss | 8,002 | 8,104 | (102) | ||||
Balance, March 31, 2019 (in shares) at Mar. 31, 2018 | 58,116,581 | 12,915,632 | |||||
Balance, March 31, 2019 at Mar. 31, 2018 | 456,040 | $ 290 | $ (56,338) | 567,155 | 297 | (56,533) | 1,169 |
Balance, December 31, 2018 (in shares) at Dec. 31, 2018 | 61,238,898 | 13,117,098 | |||||
Balance, December 31, 2018 at Dec. 31, 2018 | 632,602 | $ 306 | $ (67,858) | 761,128 | (994) | (58,882) | (1,098) |
Increase (decrease) in shareholders' equity | |||||||
Exercise of stock options (in shares) | 200,326 | ||||||
Exercise of stock options | 3,163 | $ 1 | 3,162 | ||||
Issuance of common stock - vesting of restricted stock units (in shares) | 479,479 | ||||||
Issuance of common stock - vesting of restricted stock units | 2 | $ 2 | |||||
Acquisition of business (in shares) | 15,755 | ||||||
Acquisition of business | 772 | 772 | |||||
Stock-based compensation expense | 12,864 | 12,864 | |||||
Purchase of treasury stock for stock-based tax withholdings (in shares) | (160,456) | ||||||
Purchase of treasury stock for stock-based tax withholdings | (9,819) | $ (9,819) | |||||
Foreign currency translation gain | 222 | 222 | |||||
Net loss | (18,268) | (18,185) | (83) | ||||
Balance, March 31, 2019 (in shares) at Mar. 31, 2019 | 61,934,458 | 13,277,554 | |||||
Balance, March 31, 2019 at Mar. 31, 2019 | $ 621,538 | $ 309 | $ (77,677) | $ 777,926 | $ (772) | $ (77,067) | $ (1,181) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (18,268) | $ 8,002 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 19,517 | 19,546 |
Deferred rent and lease incentive amortization | 0 | 385 |
Provision for doubtful accounts | 451 | 461 |
Deferred income taxes | 169 | (17,923) |
Stock-based compensation expense | 12,864 | 8,495 |
Non-cash interest expense | 6,880 | 3,209 |
Accretion on contingent consideration and purchase liability | 240 | 101 |
Loss allocation from equity method investment | 203 | 660 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Fees receivable, net | 1,198 | (10,191) |
Prepaid expenses and other current assets | (13,346) | (3,665) |
Other non-current assets | (1,060) | (2,461) |
Accrued expenses and other liabilities | (34,495) | (17,404) |
Accounts payable | 5,179 | 1,594 |
Deferred revenue | 7,039 | 7,056 |
Other non-current liabilities | 854 | 1,382 |
Net cash used in operating activities | (12,575) | (753) |
INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (5,247) | (4,988) |
Capitalization of internally developed software | (7,185) | (4,599) |
Acquisition of business | (11,061) | (178,583) |
Other | (1,000) | 0 |
Net cash used in investing activities | (24,493) | (188,170) |
FINANCING ACTIVITIES: | ||
Proceeds from borrowings on revolving credit facility | 0 | 195,000 |
Payments on revolving credit facility | 0 | (15,000) |
Proceeds from exercise of stock options | 3,163 | 2,404 |
Purchase of treasury stock for stock-based tax withholdings | (9,819) | (9,296) |
Issuance of restricted stock units | 2 | 2 |
Net cash provided by (used in) financing activities | (6,654) | 173,110 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 112 | (109) |
DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (43,610) | (15,922) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 289,671 | 62,115 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (See Note 2) | 246,061 | 46,193 |
Supplemental disclosure of cash flow information - net cash paid during the period for income taxes | 4,998 | 1,359 |
Supplemental disclosure of cash flow information - cash paid during the period for interest | 216 | 1,974 |
Supplemental disclosure of non-cash operating, investing and financing activities: | ||
Common stock issued to settle purchase liability | 772 | 0 |
Contingent consideration issued in business acquisition | 7,580 | 0 |
Purchase liabilities included in other non-current liabilities | 5,468 | 0 |
Purchase liabilities included in accrued expenses and other liabilities | 0 | 13,172 |
Accrued payment to fund deferred compensation liability included in accounts payable | 0 | 1,551 |
Purchase of fixed assets included in accounts payable and accrued expenses and other liabilities | 359 | 1,331 |
Accrued payment to fund deferred compensation liability included in accounts payable | $ 489 | $ 0 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
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. Envestnet is organized around two primary, complementary business segments. Financial information about each business segment is contained in “ Note 20—Segment Information ” to the condensed consolidated financial statements. The business segments are as follows: • Envestnet Wealth – a leading provider of unified wealth management software and services to empower financial advisors and institutions. Within Envestnet Wealth , the Company offers these solutions principally through the following products 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 19,500 investment products. Envestnet | Enterprise also offers 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 4,300 vetted third party managed account products, multi-manager portfolios, fund strategist portfolios, as well as over 1,100 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 Data & Analytics – a leading data aggregation and data intelligence platform powering dynamic, cloud-based innovation for digital financial services, and includes product offerings from Envestnet | Yodlee and Envestnet | Analytics. Envestnet operates four RIAs and a registered broker-dealer. The RIAs are registered with the Securities and Exchange Commission (“ SEC ”). The broker-dealer is registered with the SEC, all 50 states and the District of Columbia and is a member of the Financial Industry Regulatory Authority (“ FINRA ”). |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 have not been audited by an independent registered public accounting firm. These unaudited condensed consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the year ended December 31, 2018 and reflect all normal recurring adjustments which are, in the opinion of management, necessary to present fairly the Company’s financial position as of March 31, 2019 and the results of operations, equity, comprehensive income (loss) and cash flows for the periods presented herein. The unaudited condensed consolidated financial statements include the accounts of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. Accounts for the Envestnet Wealth segment that are denominated in a non-U.S. currency have been re-measured using the U.S. dollar as the functional currency. Certain accounts within the Envestnet Data & Analytics segment are recorded and measured in foreign currencies. The assets and liabilities for those subsidiaries with a foreign currency functional currency are translated at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates. Differences arising from these foreign currency translations are recorded in the unaudited condensed consolidated balance sheets as accumulated other comprehensive income (loss) within stockholders’ equity. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the operating results to be expected for other interim periods or for the full fiscal year. The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“ SEC ”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“ GAAP ”) have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 , filed with the SEC on March 1, 2019. The preparation of these unaudited condensed consolidated financial statements requires management to make estimates and assumptions related to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these unaudited condensed consolidated financial statements in conformity with GAAP . Areas requiring the use of management estimates relate to estimating uncollectible receivables, revenue recognition, the determination of the period of benefit for deferred sales incentive commissions, valuations and assumptions used for impairment testing of goodwill, intangible and other long-lived assets, fair value of restricted stock and stock options issued, fair value of contingent consideration, realization of deferred tax assets, uncertain tax positions, sales tax liabilities, fair value of the liability portion of the convertible debt and assumptions used to allocate purchase prices in business combinations. Actual results could differ materially from these estimates under different assumptions or conditions. The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported within the condensed consolidated statements of cash flows: March 31, December 31, 2019 2018 Cash and cash equivalents $ 245,735 $ 289,345 Restricted cash included in prepaid expenses and other current assets 158 158 Restricted cash included in other non-current assets 168 168 Total cash, cash equivalents and restricted cash $ 246,061 $ 289,671 Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements —In February 2016, the Financial Accounting Standards Board (“ FASB ”) issued Accounting standards update (“ASU”) 2016-02, “Leases,” which amends the requirements for assets and liabilities recognized for all leases longer than twelve months. This standard is effective for financial statements issued by public companies for the annual and interim periods beginning after December 15, 2018. These changes became effective for the Company’s fiscal year beginning January 1, 2019 and have been reflected in these condensed consolidated financial statements (See “ Note 19—Leases ”). 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. The Company has elected to early adopt this standard beginning January 1, 2019, noting that this standard will be applied prospectively to all future non-employee share-based payments and is reflected in these condensed 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, however it did not have a material impact on the Company's condensed consolidated financial statements. Not Yet Adopted —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 its condensed consolidated financial statements. 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 its condensed consolidated financial statements. |
Business Acquisitions
Business Acquisitions | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions Acquisition of private company On January 2, 2019 pursuant to an agreement and plan of merger dated as of January 2, 2019 between Envestnet and a private company that provides conversational artificial intelligence tools and applications to financial services firms, the private company merged into Yodlee Inc. (the “ Private Company Acquisition ”). The completion of the Private Company Acquisition on January 2, 2019 followed the receipt of all necessary and regulatory approvals and third party consents. In connection with the Private Company Acquisition , the Company incurred consideration of approximately $25,063 , including estimated contingent consideration of $7,580 , 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 customers, and supports these FSPs to better engage, support and assist their consumers leveraging this latest wave of customer-centric capabilities. The preliminary consideration transferred in the acquisition was as follows: Preliminary Estimate Upfront cash consideration $ 11,173 Purchase consideration liability 6,240 Contingent liability 7,580 Working capital adjustment 70 Total $ 25,063 The estimated fair values of deferred income taxes, identifiable intangible assets, and goodwill balances are provisional and based on the information that was available as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation and other studies and are in progress and not yet at the point where there is sufficient information for a definitive measurement. The Company believes the preliminary information proves a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair values reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation of working capital and goodwill balances and complete the acquisition accounting as soon as practicable but no later than January 2, 2020. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Preliminary Estimate Total tangible assets acquired $ 144 Total liabilities assumed (629 ) Identifiable intangible assets 4,100 Goodwill 21,448 Total net assets acquired $ 25,063 The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, primarily related to the knowledge and experience of the workforce in place. The goodwill is not deductible for income tax purposes. A summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows: Amount Estimated Useful Life in Years Amortization Method Proprietary technology $ 4,100 4 Straight-line For the three months ended March 31, 2019 , acquisition related costs for the private company totaled $90 , and are included in general and administration expenses. The Company may incur additional acquisition related costs over the remainder of 2019. The results of the private company's operations are included in the condensed consolidated statements of operations beginning January 2, 2019 and are not considered material to the Company’s results of operations. As such, no pro forma information is presented for the three months ended March 31, 2018 . |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, December 31, 2019 2018 Prepaid technology $ 7,835 $ 6,766 Advance payroll taxes 7,803 — Non-income tax receivable 5,893 5,628 Prepaid conference 2,805 — Prepaid outside information services 1,951 1,515 Restricted cash 158 158 Other 10,471 9,490 Total $ 36,916 $ 23,557 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consists of the following: March 31, December 31, Estimated Useful Life 2019 2018 Cost: Computer equipment and software 3 years $ 65,905 $ 64,346 Leasehold improvements Shorter of the lease term or useful life of the asset 28,817 28,191 Office furniture and fixtures 3-7 years 9,455 9,291 Other office equipment 3-5 years 5,791 5,577 109,968 107,405 Less: accumulated depreciation and amortization (63,174 ) (62,414 ) Total property and equipment, net $ 46,794 $ 44,991 During the three months ended March 31, 2019 , the Company retired property and equipment that was no longer in service for the Envestnet Wealth segment in the amount of $1,246 . During the three months ended March 31, 2019 , the Company retired property and equipment that was no longer in service for the Envestnet Data & Analytics segment in the amount of $2,481 . Gains and losses on asset retirements during the three months ended March 31, 2019 were not material. Depreciation and amortization expense was as follows: Three Months Ended March 31, 2019 2018 Depreciation and amortization expense $ 4,366 $ 3,918 |
Internally Developed Software
Internally Developed Software | 3 Months Ended |
Mar. 31, 2019 | |
Capitalized Computer Software, Net [Abstract] | |
Internally Developed Software | Internally Developed Software Internally developed software consists of the following: March 31, December 31, Estimated Useful Life 2019 2018 Internally developed software 5 years $ 77,616 $ 70,410 Less: accumulated amortization (34,845 ) (32,201 ) Internally developed software, net $ 42,771 $ 38,209 Amortization expense was as follows: Three Months Ended March 31, 2019 2018 Amortization expense $ 2,623 $ 1,693 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill & Intangible Assets, Net Changes in the carrying amount of goodwill were as follows: Envestnet Wealth Envestnet Data & Analytics Total Balance at December 31, 2018 $ 243,809 $ 275,293 $ 519,102 Private company acquisition — 21,448 21,448 Foreign currency — 71 71 Other (97 ) — (97 ) Balance at March 31, 2019 $ 243,712 $ 296,812 $ 540,524 Intangible assets, net consist of the following: March 31, 2019 December 31, 2018 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 $ (110,250 ) $ 250,770 $ 361,020 $ (102,077 ) $ 258,943 Proprietary technologies 4-8 years 69,396 (38,054 ) 31,342 66,746 (36,151 ) 30,595 Trade names 2-7 years 27,990 (13,336 ) 14,654 27,990 (12,352 ) 15,638 Backlog 8 years 11,000 (10,953 ) 47 11,000 (10,935 ) 65 Total intangible assets $ 469,406 $ (172,593 ) $ 296,813 $ 466,756 $ (161,515 ) $ 305,241 Amortization expense was as follows: Three Months Ended March 31, 2019 2018 Amortization expense $ 12,528 $ 13,935 Future amortization expense of the intangible assets as of March 31, 2019 , is expected to be as follows: Years ending December 31, Remainder of 2019 $ 36,831 2020 45,364 2021 36,740 2022 34,291 2023 24,920 Thereafter 118,667 Total $ 296,813 |
Other Non-Current Assets
Other Non-Current Assets | 3 Months Ended |
Mar. 31, 2019 | |
Other Assets, Noncurrent [Abstract] | |
Other Non-Current Assets | Other Non-Current Assets Other non-current assets consist of the following: March 31, December 31, 2019 2018 Deferred sales incentive compensation $ 7,081 $ 7,014 Assets to fund deferred compensation liability 6,746 6,346 Lease and other deposits 4,341 4,341 Investments in private companies 3,659 2,862 Unamortized issuance costs on revolving credit facility 2,032 2,251 Other 3,086 2,484 Total $ 26,945 $ 25,298 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following: March 31, December 31, 2019 2018 Accrued investment manager fees $ 38,367 $ 50,635 Accrued compensation and related taxes 28,847 50,598 Sales and use tax payable 10,214 9,733 Accrued transaction costs 6,149 4,543 Accrued professional services 5,334 4,517 Other accrued expenses 12,546 13,272 Total $ 101,457 $ 133,298 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s outstanding debt obligations as of March 31, 2019 and December 31, 2018 were as follows: March 31, December 31, 2019 2018 Convertible Notes due 2019 $ 172,500 $ 172,500 Unaccreted discount on Convertible Notes due 2019 (4,393 ) (5,890 ) Unamortized issuance costs on Convertible Notes due 2019 (665 ) (899 ) Convertible Notes due 2019 carrying value $ 167,442 $ 165,711 Convertible Notes due 2023 $ 345,000 $ 345,000 Unaccreted discount on Convertible Notes due 2023 (40,379 ) (42,641 ) Unamortized issuance costs on Convertible Notes due 2023 (7,229 ) (7,634 ) Convertible Notes due 2023 carrying value $ 297,392 $ 294,725 Revolving credit facility balance $ — $ — Interest expense was comprised of the following and is included in other expense, net in the condensed consolidated statement of operations: Three Months Ended March 31, 2019 2018 Accretion of debt discount $ 3,758 $ 1,418 Coupon interest 2,264 755 Amortization of issuance costs 858 450 Undrawn and other fees 216 48 Interest on revolving credit facility — 2,565 Total $ 7,096 $ 5,236 Convertible Notes due 2019 In 2014, the Company issued $172,500 of Convertible Notes due 2019 that mature on December 15, 2019. 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. The Convertible Notes due 2019 are general, unsecured obligations, subordinated in right of payment to the Company's obligations under its 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, under certain circumstances. 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. Beginning July 1, 2019 the Convertible Notes due 2019 become freely convertible and therefore are presented in current liabilities on the condensed consolidated balance sheet as of March 31, 2019 . 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 three months ended March 31, 2019 and 2018 was 6% . Convertible Notes due 2023 In May 2018, the Company issued $345,000 of Convertible Notes due 2023 that mature on June 1, 2023. 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. The Convertible Notes due 2023 are general unsecured obligations, subordinated in right of payment to the Company's obligations under its Credit Agreement. The notes are structurally subordinated to the indebtedness and other liabilities of any of the Company's subsidiaries, other than its wholly owned subsidiary, Envestnet Asset Management, Inc., which will fully and unconditionally guarantee the notes on an unsecured basis. The Convertible Notes due 2023 rank equally in right of payment with all its other existing and future senior indebtedness. 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 Company may redeem for cash all or any portion of the notes, at its option, on or after June 5, 2021 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days, consecutive or non-consecutive, within a 30 consecutive trading day period ending on, and including, any of the five trading days immediately preceding the date on which the Company provides notice of redemption. 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, under certain circumstances. 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 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 three months ended March 31, 2019 was 6% . See “ Note 17—Net Income (Loss) Per Share ” for further discussion of the effect of conversion on net income (loss) per common share. Credit Agreement In July 2017, the Company and certain of its subsidiaries entered into a Second Amended and Restated Credit Agreement (“ Second Amended and Restated Credit Agreement ”) with a group of banks (“ Banks ”). Pursuant to the Second Amended and Restated Credit Agreement , the Banks have agreed to provide to the Company revolving credit commitments (“ Revolving Credit Facility ”) in the aggregate amount of up to $350,000 which amount may be increased by $50,000 . The Company incurs interest on borrowings made under the Second Amended and Restated Credit Agreement at rates between 1.50 percent and 3.25 percent above LIBOR based on the Company’s total leverage ratio. Borrowings under the Second Amended and Restated Credit Agreement are scheduled to mature on July 18, 2022. Obligations under the Second Amended and Restated Credit Agreement are guaranteed by substantially all of the Company’s U.S. subsidiaries. The Second Amended and Restated Credit Agreement includes certain financial covenants and, as of March 31, 2019 , the Company was in compliance with these requirements. |
Other Non-Current Liabilities
Other Non-Current Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Other Non-Current Liabilities | Other Non-Current Liabilities Other non-current liabilities consist of the following: March 31, December 31, 2019 2018 Uncertain tax positions $ 11,084 $ 10,394 Deferred compensation liability 7,381 6,196 Accrued purchase liability 5,408 — Other 579 1,415 Total $ 24,452 $ 18,005 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
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 condensed consolidated balance sheet 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. The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018 , based on the three-tier fair value hierarchy: March 31, 2019 Fair Value Level I Level II Level III Assets: Money market funds and other (1) $ 214,715 $ 214,715 $ — $ — Assets to fund deferred compensation liability (2) 6,746 — — 6,746 Total assets $ 221,461 $ 214,715 $ — $ 6,746 Liabilities: Contingent consideration $ 8,461 $ — $ — $ 8,461 Deferred compensation liability (3) 7,381 7,381 — — Total liabilities $ 15,842 $ 7,381 $ — $ 8,461 December 31, 2018 Fair Value Level I Level II Level III Assets: Money market funds (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 (1) The fair values of the Company’s investments in money-market funds are based on the daily quoted market prices for the net asset value of the various money market funds. (2) The fair value of assets to fund the deferred compensation liability approximates the cash surrender value of the life insurance premiums and is included in other non-current assets in the condensed consolidated balance sheets. (3) The deferred compensation liability is included in other non-current liabilities in the condensed 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. Level I assets and liabilities include money-market funds not insured by the Federal Deposit Insurance Corporation (“ FDIC ”) and deferred compensation liability. 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 I and are included in cash and cash equivalents in the condensed 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. Level III assets and liabilities consist of the estimated fair value of contingent consideration as well as the assets to fund deferred compensation liability. The fair market value of the assets to fund deferred compensation liability is based upon the cash surrender value of the life insurance premiums. The fair value of the contingent consideration liabilities related to the prior year acquisition of Wheelhouse and the private company acquisition 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 the acquisitions of Wheelhouse and the private company 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 Wheelhouse and the private company, 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 and private company acquisitions at each reporting date until settlement. Changes to the estimated fair values of the contingent consideration will be recognized in earnings of the Company and included in general and administration on the condensed 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, 2018 to March 31, 2019 : Fair Value of Assets to Fund Deferred Compensation Liability Balance at December 31, 2018 $ 6,346 Fair value adjustments 400 Balance at March 31, 2019 $ 6,746 The asset value increased due to gains on the underlying investment vehicles, which resulted in an asset value of $6,746 as of March 31, 2019 , which is included in other non-current assets on the condensed 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, 2018 to March 31, 2019 : Fair Value of Contingent Consideration Liabilities Balance at December 31, 2018 $ 732 Private company acquisition 7,580 Accretion on contingent consideration 149 Balance at March 31, 2019 $ 8,461 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 three months ended March 31, 2019 . On December 15, 2014, the Company issued $172,500 of Convertible Notes due 2019. As of March 31, 2019 and December 31, 2018 , the carrying value of the Convertible Notes due 2019 equaled $167,442 and $165,711 , respectively, and represented the aggregate principal amount outstanding less the unamortized discount and debt issuance costs. As of March 31, 2019 and December 31, 2018 , the estimated fair value of the Convertible Notes due 2019 was $192,165 and $174,101 , respectively. The Company considered the Convertible Notes due 2019 to be a Level II liability March 31, 2019 and uses 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 March 31, 2019 (see “ Note 10—Debt ”). On May 25, 2018, the Company issued $345,000 of Convertible Notes due 2023. As of March 31, 2019 and December 31, 2018 , the carrying value of the Convertible Notes due 2023 equaled $297,392 and $294,725 , respectively, and represented the aggregate principal amount outstanding less the unamortized discount and debt issuance costs. As of March 31, 2019 and December 31, 2018 , the fair value of the Convertible Notes due 2023 was $397,544 and $339,024 , respectively. The Company considered the Convertible Notes due 2023 to be a Level II liability and uses 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 March 31, 2019 (see “ Note 10—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 March 31, 2019 based upon the short-term nature of the assets and liabilities. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of revenue The following table presents the Company’s revenues disaggregated by major source: Three Months Ended March 31, 2019 2018 Envestnet Wealth Envestnet Data & Analytics Consolidated Envestnet Wealth Envestnet Data & Analytics Consolidated Revenues: Asset-based $ 108,934 $ — $ 108,934 $ 121,153 $ — $ 121,153 Subscription-based 41,026 42,061 83,087 32,585 37,110 69,695 Total recurring revenues 149,960 42,061 192,021 153,738 37,110 190,848 Professional services and other revenues 2,745 4,900 7,645 2,250 4,913 7,163 Total revenues $ 152,705 $ 46,961 $ 199,666 $ 155,988 $ 42,023 $ 198,011 The following table presents the Company’s revenues disaggregated by geography, based on the billing address of the customer: Three Months Ended March 31, 2019 2018 United States $ 192,119 $ 188,315 International (1) 7,547 9,696 Total $ 199,666 $ 198,011 (1) No foreign country accounted for more than 10% of total revenues. One customer accounted for more than 10% of the Company’s total revenues: Three Months Ended March 31, 2019 2018 Fidelity 16 % 16 % 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 March 31, 2019 : Years ending December 31, Remainder of 2019 $ 159,916 2020 138,921 2021 83,286 2022 55,311 2023 24,807 Thereafter 36,640 Total $ 498,881 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 Total deferred revenue as of March 31, 2019 increased by $7,321 , which is primarily the result of an increase in deferred revenue related to subscription-based services during the three months ended March 31, 2019 , 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 $9,723 and $7,516 for the three months ended March 31, 2019 and 2018 , respectively. The majority of this revenue consists of subscription-based services and professional services arrangements. The amount of revenue recognized from performance obligations satisfied in prior periods was not material. Deferred sales incentive compensation Deferred sales incentive compensation was $7,081 as of March 31, 2019 . Amortization expense for the deferred sales incentive compensation was $651 and $482 for the three months ended March 31, 2019 , and 2018 , respectively. 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 expenses on the condensed consolidated statements of operations. |
Cost of Revenues
Cost of Revenues | 3 Months Ended |
Mar. 31, 2019 | |
Cost of Revenue [Abstract] | |
Cost of Revenues | Cost of Revenues The following table summarizes cost of revenues by revenue category: Three Months Ended March 31, 2019 2018 Asset-based $ 53,842 $ 57,572 Subscription-based 7,677 5,226 Professional services and other 126 136 Total $ 61,645 $ 62,934 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company has stock options and restricted stock units outstanding under the 2004 Stock Incentive Plan (the “2004 Plan”) and the 2010 Long-Term Incentive Plan (the “2010 Plan”). As of March 31, 2019 , the maximum number of common shares of the Company available for future issuance under the Company’s plans is 2,081,905 . Stock-based compensation expense under the Company’s plans was as follows: Three Months Ended March 31, 2019 2018 Stock-based compensation expense $ 12,864 $ 8,495 Tax effect on stock-based compensation expense (3,256 ) (2,149 ) Net effect on income $ 9,608 $ 6,346 The tax effect on stock-based compensation expense above was calculated using a blended statutory rate of 25.3% for the three months ended March 31, 2019 and 2018 . However, due to the valuation allowance recorded on domestic deferreds, there was no tax effect related to stock-based compensation expense for the three months ended March 31, 2019 . Stock Options The following weighted average assumptions were used to value options granted during the periods indicated: Three Months Ended March 31, 2019 2018 Grant date fair value of options $21.55 $ — Volatility 40.0 % — % Risk-free interest rate 2.5 % — % Dividend yield — % — % Expected term (in years) 6.5 — 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, 2018 1,887,969 $ 20.05 3.4 $ 56,046 Granted 81,807 49.02 Exercised (200,326 ) 16.91 Forfeited (1,100 ) 31.70 Outstanding as of March 31, 2019 1,768,350 21.74 3.5 77,197 Options exercisable 1,655,119 $ 20.23 3.1 $ 74,744 Exercise prices of stock options outstanding as of March 31, 2019 range from $7.15 to $55.29 . At March 31, 2019 , there was $2,050 of unrecognized stock-based compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 2.5 years. Restricted Stock Units and Restricted Stock Awards Periodically, the Company grants restricted stock unit awards to employees. 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, 2018 1,585,788 $ 46.33 Granted 940,614 61.18 Vested (479,479 ) 45.98 Forfeited (24,866 ) 51.27 Outstanding as of March 31, 2019 2,022,057 $ 53.26 At March 31, 2019 , there was $99,802 of unrecognized stock-based compensation expense related to unvested restricted stock units and awards, which the Company expects to recognize over a weighted-average period of 2.4 years. In February 2019, the Company granted approximately 69,000 performance-based restricted stock unit awards to certain employees. 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table includes the Company’s loss before income tax provision (benefit), income tax provision (benefit) and effective tax rate: Three Months Ended March 31, 2019 2018 Loss before income tax provision (benefit) $ (14,500 ) $ (5,992 ) Income tax provision (benefit) 3,768 (13,994 ) Effective tax rate (26.0 )% 233.5 % For the three months ended March 31, 2019 , our effective tax rate differed from the statutory rate primarily due to the impact of the Base Erosion and Anti-Abuse Tax (“BEAT”) and the valuation allowance the Company had placed on all US deferreds with the exception of indefinite-lived intangibles. For the three months ended March 31, 2018 , our effective tax rate differed from the statutory rate primarily due to the release of the Company's valuation allowance as a result of additional deferred tax liabilities recorded with the FolioDynamix Acquisition as well as the impact of the BEAT. For the three months ended March 31, 2019 , the Company's quarterly provision for income taxes is based on the discrete method. The Company's quarterly provision for income taxes also includes the impact of certain unusual or infrequently occurring items, if any, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur. In December 2017, the Tax Cuts and Jobs Act (“Tax Act”) was enacted into United States law. Beginning in 2018, the Tax Act includes the global intangible low-taxed income (“GILTI”) and BEAT provisions. We elected to account for GILTI tax in the period in which it is incurred. The GILTI provision requires us to include in our U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. We expect to fully offset any GILTI income with Net Operating Losses (“NOLs”). Additionally, BEAT requires us to calculate a minimum tax on our foreign earnings and profits; As a result of the BEAT provision our provision for income taxes for the three months ended March 31, 2019 , increased by $2,040 . The total gross liability for unrecognized tax benefits, exclusive of interest and penalties, was $16,147 and $15,628 at March 31, 2019 and December 31, 2018 , respectively. Of this amount, a portion of the unrecognized tax benefits was recorded as a reduction of deferred tax assets instead of a non-current liability. The portion of the unrecognized tax benefits, exclusive of interest and penalties, recorded as a non-current liability is $4,702 and $4,429 at March 31, 2019 and December 31, 2018 , respectively. At March 31, 2019 , the amount of unrecognized tax benefits, including interest and penalties, that would benefit the Company’s effective tax rate, if recognized, was $11,084 . At this time, the Company estimates that the liability for unrecognized tax benefits could decrease in the next twelve months as it is anticipated that reviews by tax authorities will be completed. The Company recognizes potential interest and penalties related to unrecognized tax benefits in income tax expense. Income tax expense includes $373 and $287 of potential interest and penalties related to unrecognized tax benefits for the three months ended March 31, 2019 and 2018 , respectively. The Company had accrued interest and penalties of $6,370 and $5,977 as of March 31, 2019 and December 31, 2018 , respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic income (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding for the period. For the calculation of diluted income (loss) per share, the basic weighted average number of shares is increased by the dilutive effect of stock options, common warrants, restricted stock awards, 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 earnings 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 due 2019 and Convertible Notes due 2023 will have no effect on diluted earnings per share until the Company’s stock price exceeds the conversion price of $62.88 and $68.31 per share and certain other criteria are met, respectively, or if the trading price of the Convertible Notes meets certain criteria as described in “ Note 10—Debt .” In the period of conversion, the Convertible Notes will have no impact on diluted earnings if the Convertible Notes are settled in cash and will have an impact on dilutive earnings per share if the Convertible Notes are settled in shares upon conversion. The following table provides the numerators and denominators used in computing basic and diluted net loss per share attributable to Envestnet, Inc.: Three Months Ended March 31, 2019 2018 Basic income (loss) per share calculation: Net loss attributable to Envestnet, Inc. $ (18,185 ) $ 8,104 Basic number of weighted-average shares outstanding 48,237,265 44,782,982 Basic net income (loss) per share $ (0.38 ) $ 0.18 Diluted income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ (18,185 ) $ 8,104 Basic number of weighted-average shares outstanding 48,237,265 44,782,982 Effect of dilutive shares: Options to purchase common stock — 1,396,091 Unvested restricted stock units — 966,487 Diluted number of weighted-average shares outstanding 48,237,265 47,145,560 Diluted net income (loss) per share $ (0.38 ) $ 0.17 Securities that were anti-dilutive and therefore excluded from the computation of diluted loss per share are as follows: Three Months Ended March 31, 2019 2018 Options to purchase common stock 1,768,350 9,045 Unvested restricted stock awards and units 2,022,057 8,510 Warrants - private placement 470,000 — Convertible Notes 7,793,826 2,743,321 Total 12,054,233 2,760,876 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Obligations and Indemnifications The Company includes various types of indemnification and guarantee clauses in certain arrangements. These indemnifications and guarantees may include, but are not limited to, infringement claims related to intellectual property, direct or consequential damages and guarantees to certain service providers and service level requirements with certain customers. The type and amount of any potential indemnification or guarantee varies substantially based on the nature of each arrangement. The Company has experienced no previous claims and cannot determine the maximum amount of potential future payments, if any, related to such indemnification and guarantee provisions. The Company believes that it is unlikely it will have to make material payments under these arrangements and therefore has not recorded a contingent liability in the condensed consolidated balance sheets. The Company enters into unconditional purchase obligations arrangements for certain of its services that it receives in the normal course of business. 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 March 31, 2019 . Further, while any possible range of loss cannot be reasonably estimated at this time, the Company does not believe that the outcome of any of these proceedings, individually or in the aggregate, would, if determined adversely to it, have a material adverse effect on its financial condition or business, although an adverse resolution of legal proceedings could have a material adverse effect on the Company's results of operations or cash flow in a particular quarter or year. Contingencies Certain of the Company’s revenues are subject to sales and use taxes in certain jurisdictions where it conducts business in the United States. As of March 31, 2019 and December 31, 2018 , the Company estimated a sales and use tax liability of $9,353 and $8,643 , respectively, related to multiple jurisdictions with respect to revenues in the three months ended March 31, 2019 and prior periods. This amount is included in accrued expenses and other liabilities on the condensed consolidated balance sheets. The Company also estimated a sales and use tax receivable of $5,510 and $5,246 , respectively, related to estimated recoverability of amounts due from customers. This amount is included in prepaid expenses and other current assets on the condensed consolidated balance sheets. Additional future information obtained from the applicable jurisdictions may affect the Company's estimate of its sales and use tax liability, but such change in the estimate cannot currently be made. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases On January 1, 2019, the Company adopted ASU 2016-02 and all subsequent ASUs that modified Topic 842 ("ASC 842") using the effective date transition method. We elected the available package of practical expedients. The Company has elected to apply the short-term lease exemption to all of its classes of underlying assets. The standard had a material impact on the Company's condensed consolidated balance sheets, but did not have an impact on the Company's condensed consolidated statements of operations. The most significant impact was the recognition of right-of-use (" ROU ") assets and lease liabilities for operating leases. Adoption of the standard had no impact to previously reported results. The Company determines if an arrangement is a lease at inception. Operating leases are included in ROU assets, current lease liabilities and non-current lease liabilities on our consolidated balance sheets. The Company does not have material finance leases. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the remaining lease term. As none of the Company's leases provide an implicit rate, the Company uses an estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes prepaid payments and excludes lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components. The Company has elected the practical expedient to account for non-lease components as part of the lease component for all asset classes. The majority of the Company's lease agreements are real estate leases. The Company has operating leases for corporate offices and certain equipment, some of which may include options to extend the leases for up to 20 years, and some of which may include options to terminate the leases within 90 days. The Company's leases have remaining lease terms of 1 to 14 years. For the three months ended March 31, 2019 , the total operating lease cost was $4,118 . The Company did not have significant sublease income, short-term lease cost, or variable lease cost for the three months ended March 31, 2019. Other information related to operating leases as follows: (in thousands, except lease term and discount rate) Three months ended March 31, 2019 Cash paid for amounts included in the measurement of operating lease liability $ 4,656 Weighted average remaining lease term (in years) 8.9 Weighted average discount rate 6.4 % Future minimum lease payments under non-cancellable leases, as of March 31, 2019 , were as follows: Operating Leases Years Ending December 31, Remainder of 2019 $ 13,117 2020 16,235 2021 14,696 2022 10,619 2023 9,920 Thereafter 47,430 Total future minimum lease payments 112,017 Less imputed interest (26,331 ) Total operating lease liabilities $ 85,686 As of March 31, 2019 , the Company has several additional operating leases that have not yet commenced but will commence in 2019 with lease terms of 1 to 14 years. For the year ended December 31, 2018 , the Company disclosed the following information related to its leases: The Company rents office space under leases that expire at various dates through 2030 . Future minimum lease commitments under these operating leases, as of December 31, 2018 , 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 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Business segments are generally organized around our business services. Our business segments are: • Envestnet Wealth – a leading provider of unified wealth management software and services to empower financial advisors and institutions. • Envestnet Data & Analytics – a leading data aggregation and data intelligence platform powering dynamic, cloud-based innovation for digital financial services. The 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 employees and 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 three months ended March 31, 2019 and 2018 . The following table presents revenues by segment: Three Months Ended March 31, 2019 2018 Revenues: Envestnet Wealth Asset-based $ 108,934 $ 121,153 Subscription-based 41,026 32,585 Total recurring revenues 149,960 153,738 Professional services and other 2,745 2,250 Total Envestnet Wealth segment revenues 152,705 155,988 Envestnet Data & Analytics Subscription-based 42,061 37,110 Professional services and other 4,900 4,913 Total Envestnet Data & Analytics segment revenues 46,961 42,023 Consolidated revenues $ 199,666 $ 198,011 Fidelity revenue as a percentage of Envestnet Wealth segment revenues: 20 % 20 % No single customer amounts for Envestnet Data & Analytics exceeded 10% of the segment total for any period presented. The following table presents a reconciliation from income (loss) from operations by segment to condensed consolidated net income (loss) attributable to Envestnet, Inc.: Three Months Ended March 31, 2019 2018 Envestnet Wealth $ 16,844 $ 15,861 Envestnet Data & Analytics (7,928 ) (4,409 ) Total segment income (loss) from operations 8,916 11,452 Nonsegment operating expenses (17,653 ) (12,190 ) Other expense, net (5,763 ) (5,254 ) Consolidated loss before income tax provision (benefit) (14,500 ) (5,992 ) Income tax provision (benefit) 3,768 (13,994 ) Consolidated net income (loss) (18,268 ) 8,002 Add: Net loss attributable to non-controlling interest 83 102 Consolidated net income (loss) attributable to Envestnet, Inc. $ (18,185 ) $ 8,104 Segment assets consist of cash, accounts receivable, prepaid expenses and other current assets, property and equipment, net, internally developed software, net, goodwill, and intangible assets, net, 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 follows: March 31, December 31, 2019 2018 Segment assets: Envestnet Wealth $ 836,043 $ 810,971 Envestnet Data & Analytics 534,548 502,776 Consolidated total assets $ 1,370,591 $ 1,313,747 Three Months Ended March 31, 2019 2018 Segment depreciation and amortization: Envestnet Wealth $ 11,267 $ 11,473 Envestnet Data & Analytics 8,250 8,073 Consolidated depreciation and amortization $ 19,517 $ 19,546 Three Months Ended March 31, 2019 2018 Segment capital expenditures: Envestnet Wealth $ 10,838 $ 8,192 Envestnet Data & Analytics 1,594 1,395 Consolidated capital expenditures $ 12,432 $ 9,587 |
Geographical Information
Geographical Information | 3 Months Ended |
Mar. 31, 2019 | |
Segments, Geographical Areas [Abstract] | |
Geographical Information | Geographical Information The following table sets forth property and equipment, net by geographic area: March 31, December 31, 2019 2018 United States $ 41,127 $ 39,412 India 4,174 3,969 Other 1,493 1,610 Total $ 46,794 $ 44,991 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Acquisition of PortfolioCenter business On April 1, 2019, pursuant to an asset purchase agreement, dated as of February 21, 2019, between Envestnet , Tamarac, Inc. (“ Tamarac ”), a wholly owned subsidiary of Envestnet , Performance Technologies, Inc. (“ Seller ”), a wholly owned subsidiary of The Charles Schwab Corporation (“ Schwab ”), and Schwab , Tamarac completed the acquisition (the “ PortfolioCenter Acquisition ”) of certain of the assets, primarily consisting of intangible assets, and the assumption of certain of the liabilities of Sellers’ PortfolioCenter Business. The PortfolioCenter Business comprised Seller’s business of providing to investment advisors: desktop, hosted and outsourced multicustodial software solutions that provide data-management and performance-measurement tools, as well as customizable accounting, reporting, and billing functions consisting of the software applications comprising the commercial products known as PortfolioCenter desktop application, PortfolioCenter Hosted, and PortfolioServices. Envestnet expects to integrate the technology and operations of the PortfolioCenter Business into the Company’s Envestnet Wealth segment. In connection with the PortfolioCenter Acquisition , Tamarac paid $17,500 in cash plus the assumption of certain liabilities. Tamarac funded the PortfolioCenter Acquisition with available cash resources. Seller is also entitled to an earn-out payment calculated based on the PortfolioCenter Business’ revenue for the twelve -month period beginning on April 1, 2020. Due to the lack of available information, the disclosures in relation to ASC 805 are currently not able to be included in this Form 10-Q. Acquisition of PIEtech On May 1, 2019, pursuant to an agreement and plan of merger (the “ Merger Agreement ”), dated as of March 14, 2019, between, among others, PIEtech, Inc., a Virginia corporation (“ PIEtech ”), Envestnet and Pecan Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Envestnet (“ Merger Sub ”), the Company completed the merger of PIEtech with and into Merger Sub , with Merger Sub continuing as the surviving corporation (the “ PIEtech Merger ”) and a wholly owned direct subsidiary of Envestnet. PIEtech , operating as Envestnet | MoneyGuide, will be included in the Envestnet Wealth segment. PIEtech empowers financial advisors to use financial planning to efficiently motivate their clients to create, implement and maintain financial plans that best meet their lifetime financial goals. The acquisition of PIEtech establishes Envestnet as a leader in financial planning solutions, providing advisors and their clients with access to a full spectrum of financial planning capabilities, and offering a broad range of data-driven, financial plan-informed financial wellness solutions, both domestically and internationally over time. Integration of PIEtech 's MoneyGuide software with the Company's integrated technology platform is expected to reduce friction and enhance productivity for advisors. Subject to the terms and conditions of the Merger Agreement , Envestnet paid $295,000 in cash and issued approximately 3,200,000 shares of common stock for all the outstanding shares of PIEtech . This totals to estimated consideration of approximately $500,000 , subject to certain post-closing adjustments. Envestnet also established a retention bonus pool consisting of approximately $30,000 of cash and restricted stock units to be granted to employees and management of PIEtech as inducement grants. Envestnet funded the acquisition with cash on hand and additional borrowings under its revolving credit facility. Due to the lack of available information, the disclosures in relation to ASC 805 are currently not able to be included in this Form 10-Q. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements —In February 2016, the Financial Accounting Standards Board (“ FASB ”) issued Accounting standards update (“ASU”) 2016-02, “Leases,” which amends the requirements for assets and liabilities recognized for all leases longer than twelve months. This standard is effective for financial statements issued by public companies for the annual and interim periods beginning after December 15, 2018. These changes became effective for the Company’s fiscal year beginning January 1, 2019 and have been reflected in these condensed consolidated financial statements (See “ Note 19—Leases ”). 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. The Company has elected to early adopt this standard beginning January 1, 2019, noting that this standard will be applied prospectively to all future non-employee share-based payments and is reflected in these condensed 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, however it did not have a material impact on the Company's condensed consolidated financial statements. Not Yet Adopted —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 its condensed consolidated financial statements. 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 its condensed consolidated financial statements. |
Leases | On January 1, 2019, the Company adopted ASU 2016-02 and all subsequent ASUs that modified Topic 842 ("ASC 842") using the effective date transition method. We elected the available package of practical expedients. The Company has elected to apply the short-term lease exemption to all of its classes of underlying assets. The standard had a material impact on the Company's condensed consolidated balance sheets, but did not have an impact on the Company's condensed consolidated statements of operations. The most significant impact was the recognition of right-of-use (" ROU ") assets and lease liabilities for operating leases. Adoption of the standard had no impact to previously reported results. The Company determines if an arrangement is a lease at inception. Operating leases are included in ROU assets, current lease liabilities and non-current lease liabilities on our consolidated balance sheets. The Company does not have material finance leases. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the remaining lease term. As none of the Company's leases provide an implicit rate, the Company uses an estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes prepaid payments and excludes lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components. The Company has elected the practical expedient to account for non-lease components as part of the lease component for all asset classes. The majority of the Company's lease agreements are real estate leases. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of cash and cash equivalents | The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported within the condensed consolidated statements of cash flows: March 31, December 31, 2019 2018 Cash and cash equivalents $ 245,735 $ 289,345 Restricted cash included in prepaid expenses and other current assets 158 158 Restricted cash included in other non-current assets 168 168 Total cash, cash equivalents and restricted cash $ 246,061 $ 289,671 |
Schedule of reconciliation of cash, cash equivalents and restricted cash | The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported within the condensed consolidated statements of cash flows: March 31, December 31, 2019 2018 Cash and cash equivalents $ 245,735 $ 289,345 Restricted cash included in prepaid expenses and other current assets 158 158 Restricted cash included in other non-current assets 168 168 Total cash, cash equivalents and restricted cash $ 246,061 $ 289,671 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Summary of consideration transferred in the acquisition | The preliminary consideration transferred in the acquisition was as follows: Preliminary Estimate Upfront cash consideration $ 11,173 Purchase consideration liability 6,240 Contingent liability 7,580 Working capital adjustment 70 Total $ 25,063 |
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: Preliminary Estimate Total tangible assets acquired $ 144 Total liabilities assumed (629 ) Identifiable intangible assets 4,100 Goodwill 21,448 Total net assets acquired $ 25,063 |
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: Amount Estimated Useful Life in Years Amortization Method Proprietary technology $ 4,100 4 Straight-line |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, December 31, 2019 2018 Prepaid technology $ 7,835 $ 6,766 Advance payroll taxes 7,803 — Non-income tax receivable 5,893 5,628 Prepaid conference 2,805 — Prepaid outside information services 1,951 1,515 Restricted cash 158 158 Other 10,471 9,490 Total $ 36,916 $ 23,557 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property and equipment, net | Property and equipment consists of the following: March 31, December 31, Estimated Useful Life 2019 2018 Cost: Computer equipment and software 3 years $ 65,905 $ 64,346 Leasehold improvements Shorter of the lease term or useful life of the asset 28,817 28,191 Office furniture and fixtures 3-7 years 9,455 9,291 Other office equipment 3-5 years 5,791 5,577 109,968 107,405 Less: accumulated depreciation and amortization (63,174 ) (62,414 ) Total property and equipment, net $ 46,794 $ 44,991 |
Schedule of depreciation and amortization expense | Depreciation and amortization expense was as follows: Three Months Ended March 31, 2019 2018 Depreciation and amortization expense $ 4,366 $ 3,918 |
Internally Developed Software (
Internally Developed Software (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Capitalized Computer Software, Net [Abstract] | |
Schedule of components of internally developed software, net | Internally developed software consists of the following: March 31, December 31, Estimated Useful Life 2019 2018 Internally developed software 5 years $ 77,616 $ 70,410 Less: accumulated amortization (34,845 ) (32,201 ) Internally developed software, net $ 42,771 $ 38,209 |
Schedule of amortization expense | Amortization expense was as follows: Three Months Ended March 31, 2019 2018 Amortization expense $ 2,623 $ 1,693 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 Wealth Envestnet Data & Analytics Total Balance at December 31, 2018 $ 243,809 $ 275,293 $ 519,102 Private company acquisition — 21,448 21,448 Foreign currency — 71 71 Other (97 ) — (97 ) Balance at March 31, 2019 $ 243,712 $ 296,812 $ 540,524 |
Schedule of components of intangible assets, net | Intangible assets, net consist of the following: March 31, 2019 December 31, 2018 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 $ (110,250 ) $ 250,770 $ 361,020 $ (102,077 ) $ 258,943 Proprietary technologies 4-8 years 69,396 (38,054 ) 31,342 66,746 (36,151 ) 30,595 Trade names 2-7 years 27,990 (13,336 ) 14,654 27,990 (12,352 ) 15,638 Backlog 8 years 11,000 (10,953 ) 47 11,000 (10,935 ) 65 Total intangible assets $ 469,406 $ (172,593 ) $ 296,813 $ 466,756 $ (161,515 ) $ 305,241 |
Schedule of amortization expense | Amortization expense was as follows: Three Months Ended March 31, 2019 2018 Amortization expense $ 12,528 $ 13,935 |
Schedule of future amortization expense of the intangible assets | Future amortization expense of the intangible assets as of March 31, 2019 , is expected to be as follows: Years ending December 31, Remainder of 2019 $ 36,831 2020 45,364 2021 36,740 2022 34,291 2023 24,920 Thereafter 118,667 Total $ 296,813 |
Other Non-Current Assets (Table
Other Non-Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Assets, Noncurrent [Abstract] | |
Schedule of components of other non-current assets | Other non-current assets consist of the following: March 31, December 31, 2019 2018 Deferred sales incentive compensation $ 7,081 $ 7,014 Assets to fund deferred compensation liability 6,746 6,346 Lease and other deposits 4,341 4,341 Investments in private companies 3,659 2,862 Unamortized issuance costs on revolving credit facility 2,032 2,251 Other 3,086 2,484 Total $ 26,945 $ 25,298 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Schedule accrued expenses and other liabilities | Accrued expenses and other liabilities consist of the following: March 31, December 31, 2019 2018 Accrued investment manager fees $ 38,367 $ 50,635 Accrued compensation and related taxes 28,847 50,598 Sales and use tax payable 10,214 9,733 Accrued transaction costs 6,149 4,543 Accrued professional services 5,334 4,517 Other accrued expenses 12,546 13,272 Total $ 101,457 $ 133,298 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of convertible debt obligations | The Company’s outstanding debt obligations as of March 31, 2019 and December 31, 2018 were as follows: March 31, December 31, 2019 2018 Convertible Notes due 2019 $ 172,500 $ 172,500 Unaccreted discount on Convertible Notes due 2019 (4,393 ) (5,890 ) Unamortized issuance costs on Convertible Notes due 2019 (665 ) (899 ) Convertible Notes due 2019 carrying value $ 167,442 $ 165,711 Convertible Notes due 2023 $ 345,000 $ 345,000 Unaccreted discount on Convertible Notes due 2023 (40,379 ) (42,641 ) Unamortized issuance costs on Convertible Notes due 2023 (7,229 ) (7,634 ) Convertible Notes due 2023 carrying value $ 297,392 $ 294,725 Revolving credit facility balance $ — $ — |
Schedule of interest expense | Interest expense was comprised of the following and is included in other expense, net in the condensed consolidated statement of operations: Three Months Ended March 31, 2019 2018 Accretion of debt discount $ 3,758 $ 1,418 Coupon interest 2,264 755 Amortization of issuance costs 858 450 Undrawn and other fees 216 48 Interest on revolving credit facility — 2,565 Total $ 7,096 $ 5,236 |
Other Non-Current Liabilities (
Other Non-Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Other Non-Current Liabilities | Other non-current liabilities consist of the following: March 31, December 31, 2019 2018 Uncertain tax positions $ 11,084 $ 10,394 Deferred compensation liability 7,381 6,196 Accrued purchase liability 5,408 — Other 579 1,415 Total $ 24,452 $ 18,005 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 on a recurring basis in the condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018 , based on the three-tier fair value hierarchy: March 31, 2019 Fair Value Level I Level II Level III Assets: Money market funds and other (1) $ 214,715 $ 214,715 $ — $ — Assets to fund deferred compensation liability (2) 6,746 — — 6,746 Total assets $ 221,461 $ 214,715 $ — $ 6,746 Liabilities: Contingent consideration $ 8,461 $ — $ — $ 8,461 Deferred compensation liability (3) 7,381 7,381 — — Total liabilities $ 15,842 $ 7,381 $ — $ 8,461 December 31, 2018 Fair Value Level I Level II Level III Assets: Money market funds (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 (1) The fair values of the Company’s investments in money-market funds are based on the daily quoted market prices for the net asset value of the various money market funds. (2) The fair value of assets to fund the deferred compensation liability approximates the cash surrender value of the life insurance premiums and is included in other non-current assets in the condensed consolidated balance sheets. (3) The deferred compensation liability is included in other non-current liabilities in the condensed 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. |
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, 2018 to March 31, 2019 : Fair Value of Assets to Fund Deferred Compensation Liability Balance at December 31, 2018 $ 6,346 Fair value adjustments 400 Balance at March 31, 2019 $ 6,746 |
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, 2018 to March 31, 2019 : Fair Value of Contingent Consideration Liabilities Balance at December 31, 2018 $ 732 Private company acquisition 7,580 Accretion on contingent consideration 149 Balance at March 31, 2019 $ 8,461 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue by major source | The following table presents the Company’s revenues disaggregated by major source: Three Months Ended March 31, 2019 2018 Envestnet Wealth Envestnet Data & Analytics Consolidated Envestnet Wealth Envestnet Data & Analytics Consolidated Revenues: Asset-based $ 108,934 $ — $ 108,934 $ 121,153 $ — $ 121,153 Subscription-based 41,026 42,061 83,087 32,585 37,110 69,695 Total recurring revenues 149,960 42,061 192,021 153,738 37,110 190,848 Professional services and other revenues 2,745 4,900 7,645 2,250 4,913 7,163 Total revenues $ 152,705 $ 46,961 $ 199,666 $ 155,988 $ 42,023 $ 198,011 |
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: Three Months Ended March 31, 2019 2018 United States $ 192,119 $ 188,315 International (1) 7,547 9,696 Total $ 199,666 $ 198,011 (1) No foreign country accounted for more than 10% of total revenues. |
Summary of revenues from major customers | One customer accounted for more than 10% of the Company’s total revenues: Three Months Ended March 31, 2019 2018 Fidelity 16 % 16 % Fidelity revenue as a percentage of Envestnet Wealth segment revenues: 20 % 20 % |
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 March 31, 2019 : Years ending December 31, Remainder of 2019 $ 159,916 2020 138,921 2021 83,286 2022 55,311 2023 24,807 Thereafter 36,640 Total $ 498,881 |
Cost of Revenues (Tables)
Cost of Revenues (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Cost of Revenue [Abstract] | |
Schedule of costs of revenues by revenue category | The following table summarizes cost of revenues by revenue category: Three Months Ended March 31, 2019 2018 Asset-based $ 53,842 $ 57,572 Subscription-based 7,677 5,226 Professional services and other 126 136 Total $ 61,645 $ 62,934 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based compensation expense | Stock-based compensation expense under the Company’s plans was as follows: Three Months Ended March 31, 2019 2018 Stock-based compensation expense $ 12,864 $ 8,495 Tax effect on stock-based compensation expense (3,256 ) (2,149 ) Net effect on income $ 9,608 $ 6,346 |
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: Three Months Ended March 31, 2019 2018 Grant date fair value of options $21.55 $ — Volatility 40.0 % — % Risk-free interest rate 2.5 % — % Dividend yield — % — % Expected term (in years) 6.5 — |
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, 2018 1,887,969 $ 20.05 3.4 $ 56,046 Granted 81,807 49.02 Exercised (200,326 ) 16.91 Forfeited (1,100 ) 31.70 Outstanding as of March 31, 2019 1,768,350 21.74 3.5 77,197 Options exercisable 1,655,119 $ 20.23 3.1 $ 74,744 |
Summary of the activity for unvested restricted stock units and awards granted under the Company's plans | Periodically, the Company grants restricted stock unit awards to employees. 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, 2018 1,585,788 $ 46.33 Granted 940,614 61.18 Vested (479,479 ) 45.98 Forfeited (24,866 ) 51.27 Outstanding as of March 31, 2019 2,022,057 $ 53.26 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of loss before income tax provision (benefit) | The following table includes the Company’s loss before income tax provision (benefit), income tax provision (benefit) and effective tax rate: Three Months Ended March 31, 2019 2018 Loss before income tax provision (benefit) $ (14,500 ) $ (5,992 ) Income tax provision (benefit) 3,768 (13,994 ) Effective tax rate (26.0 )% 233.5 % |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the numerators and denominators used in computing basic and diluted net loss per share attributable to common stockholders | The following table provides the numerators and denominators used in computing basic and diluted net loss per share attributable to Envestnet, Inc.: Three Months Ended March 31, 2019 2018 Basic income (loss) per share calculation: Net loss attributable to Envestnet, Inc. $ (18,185 ) $ 8,104 Basic number of weighted-average shares outstanding 48,237,265 44,782,982 Basic net income (loss) per share $ (0.38 ) $ 0.18 Diluted income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ (18,185 ) $ 8,104 Basic number of weighted-average shares outstanding 48,237,265 44,782,982 Effect of dilutive shares: Options to purchase common stock — 1,396,091 Unvested restricted stock units — 966,487 Diluted number of weighted-average shares outstanding 48,237,265 47,145,560 Diluted net income (loss) per share $ (0.38 ) $ 0.17 |
Schedule of anti-dilutive securities excluded from computation of diluted earnings per share | Securities that were anti-dilutive and therefore excluded from the computation of diluted loss per share are as follows: Three Months Ended March 31, 2019 2018 Options to purchase common stock 1,768,350 9,045 Unvested restricted stock awards and units 2,022,057 8,510 Warrants - private placement 470,000 — Convertible Notes 7,793,826 2,743,321 Total 12,054,233 2,760,876 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lease, cost | Other information related to operating leases as follows: (in thousands, except lease term and discount rate) Three months ended March 31, 2019 Cash paid for amounts included in the measurement of operating lease liability $ 4,656 Weighted average remaining lease term (in years) 8.9 Weighted average discount rate 6.4 % |
Lessee, operating lease, liability, maturity | Future minimum lease payments under non-cancellable leases, as of March 31, 2019 , were as follows: Operating Leases Years Ending December 31, Remainder of 2019 $ 13,117 2020 16,235 2021 14,696 2022 10,619 2023 9,920 Thereafter 47,430 Total future minimum lease payments 112,017 Less imputed interest (26,331 ) Total operating lease liabilities $ 85,686 |
Schedule of future minimum rental payments for operating leases | The Company rents office space under leases that expire at various dates through 2030 . Future minimum lease commitments under these operating leases, as of December 31, 2018 , 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 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of revenue by segment | The following table presents revenues by segment: Three Months Ended March 31, 2019 2018 Revenues: Envestnet Wealth Asset-based $ 108,934 $ 121,153 Subscription-based 41,026 32,585 Total recurring revenues 149,960 153,738 Professional services and other 2,745 2,250 Total Envestnet Wealth segment revenues 152,705 155,988 Envestnet Data & Analytics Subscription-based 42,061 37,110 Professional services and other 4,900 4,913 Total Envestnet Data & Analytics segment revenues 46,961 42,023 Consolidated revenues $ 199,666 $ 198,011 |
Summary of revenues from major customers | One customer accounted for more than 10% of the Company’s total revenues: Three Months Ended March 31, 2019 2018 Fidelity 16 % 16 % Fidelity revenue as a percentage of Envestnet Wealth segment revenues: 20 % 20 % |
Schedule of income (loss) from operations by segment | The following table presents a reconciliation from income (loss) from operations by segment to condensed consolidated net income (loss) attributable to Envestnet, Inc.: Three Months Ended March 31, 2019 2018 Envestnet Wealth $ 16,844 $ 15,861 Envestnet Data & Analytics (7,928 ) (4,409 ) Total segment income (loss) from operations 8,916 11,452 Nonsegment operating expenses (17,653 ) (12,190 ) Other expense, net (5,763 ) (5,254 ) Consolidated loss before income tax provision (benefit) (14,500 ) (5,992 ) Income tax provision (benefit) 3,768 (13,994 ) Consolidated net income (loss) (18,268 ) 8,002 Add: Net loss attributable to non-controlling interest 83 102 Consolidated net income (loss) attributable to Envestnet, Inc. $ (18,185 ) $ 8,104 |
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 follows: March 31, December 31, 2019 2018 Segment assets: Envestnet Wealth $ 836,043 $ 810,971 Envestnet Data & Analytics 534,548 502,776 Consolidated total assets $ 1,370,591 $ 1,313,747 Three Months Ended March 31, 2019 2018 Segment depreciation and amortization: Envestnet Wealth $ 11,267 $ 11,473 Envestnet Data & Analytics 8,250 8,073 Consolidated depreciation and amortization $ 19,517 $ 19,546 Three Months Ended March 31, 2019 2018 Segment capital expenditures: Envestnet Wealth $ 10,838 $ 8,192 Envestnet Data & Analytics 1,594 1,395 Consolidated capital expenditures $ 12,432 $ 9,587 |
Geographical Information (Table
Geographical Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, December 31, 2019 2018 United States $ 41,127 $ 39,412 India 4,174 3,969 Other 1,493 1,610 Total $ 46,794 $ 44,991 |
Organization and Description _2
Organization and Description of Business (Details) | 3 Months Ended |
Mar. 31, 2019statesegmentaccount_productproprietary_productadvisorinvestment_product | |
Products and Services [Line Items] | |
Number of operating segments | segment | 2 |
Number of RIAs | advisor | 4 |
Number of states with which the broker-dealer is registered | state | 50 |
Envestnet Enterprise | |
Products and Services [Line Items] | |
Number of investment products | investment_product | 19,500 |
Envestnet Portfolio Management Consultants (“PMC”) | |
Products and Services [Line Items] | |
Number of third party managed account products and portfolio | account_product | 4,300 |
Number of proprietary products | proprietary_product | 1,100 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | $ 245,735 | $ 289,345 | ||
Restricted cash | 158 | 158 | ||
Total cash, cash equivalents and restricted cash | 246,061 | 289,671 | $ 46,193 | $ 62,115 |
Prepaid Expenses and Other Current Assets | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | 158 | 158 | ||
Other Noncurrent Assets | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 168 | $ 168 |
Business Acquisitions (Narrativ
Business Acquisitions (Narrative) (Details) - Private Company Acquisition - USD ($) $ in Thousands | Jan. 02, 2019 | Mar. 31, 2019 |
Business Acquisition [Line Items] | ||
Consideration transferred | $ 25,063 | |
Contingent liability | $ 7,580 | |
Acquisition related costs | $ 90 |
Business Acquisitions (Details)
Business Acquisitions (Details) - USD ($) $ in Thousands | Jan. 02, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Estimated fair values of the assets acquired and liabilities assumed | |||
Goodwill | $ 540,524 | $ 519,102 | |
Private Company Acquisition | |||
Consideration transferred in acquisition | |||
Cash consideration | $ 11,173 | ||
Purchase consideration liability | 6,240 | ||
Contingent liability | 7,580 | ||
Working capital adjustment | 70 | ||
Total | 25,063 | ||
Estimated fair values of the assets acquired and liabilities assumed | |||
Total tangible assets acquired | 144 | ||
Total liabilities assumed | (629) | ||
Identifiable intangible assets | 4,100 | ||
Goodwill | 21,448 | ||
Total net assets acquired | 25,063 | ||
Private Company Acquisition | Proprietary technologies | |||
Intangible assets | |||
Intangible assets acquired, amount | $ 4,100 | ||
Useful life in years | 4 years |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid technology | $ 7,835 | $ 6,766 |
Advance payroll taxes | 7,803 | 0 |
Non-Income Tax Receivable | 5,893 | 5,628 |
Prepaid conference | 2,805 | 0 |
Prepaid outside information services | 1,951 | 1,515 |
Restricted cash | 158 | 158 |
Other | 10,471 | 9,490 |
Total prepaid expenses and other current assets | $ 36,916 | $ 23,557 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property and equipment, cost: | |||
Property and equipment, gross | $ 109,968 | $ 107,405 | |
Less: accumulated depreciation and amortization | (63,174) | (62,414) | |
Total property and equipment, net | 46,794 | 44,991 | |
Depreciation and amortization expense | 4,366 | $ 3,918 | |
Envestnet Wealth | |||
Property and equipment, cost: | |||
Cost written off | 1,246 | ||
Envestnet Data and Analytics | |||
Property and equipment, cost: | |||
Cost written off | $ 2,481 | ||
Computer equipment and software | |||
Property and equipment, cost: | |||
Estimated Useful Life | 3 years | ||
Property and equipment, gross | $ 65,905 | 64,346 | |
Leasehold improvements | |||
Property and equipment, cost: | |||
Property and equipment, gross | 28,817 | 28,191 | |
Office furniture and fixtures | |||
Property and equipment, cost: | |||
Property and equipment, gross | $ 9,455 | 9,291 | |
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 | $ 5,791 | $ 5,577 | |
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 |
Internally Developed Software_2
Internally Developed Software (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Internally developed software | $ 77,616 | $ 70,410 | |
Less: accumulated amortization | (34,845) | (32,201) | |
Internally developed software, net | 42,771 | $ 38,209 | |
Amortization expense | $ 2,623 | $ 1,693 | |
Internally developed software | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 5 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net (Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Changes in the carrying amount of the Company's goodwill | |||
Balance at period start | $ 519,102 | ||
Private company acquisition | 21,448 | ||
Foreign currency | 71 | ||
Other | (97) | ||
Balance at period end | 540,524 | ||
Gross Carrying Amount | 469,406 | $ 466,756 | |
Accumulated Amortization | (172,593) | (161,515) | |
Net Carrying Amount | 296,813 | 305,241 | |
Amortization expense | 12,528 | $ 13,935 | |
Customer lists | |||
Changes in the carrying amount of the Company's goodwill | |||
Gross Carrying Amount | 361,020 | 361,020 | |
Accumulated Amortization | (110,250) | (102,077) | |
Net Carrying Amount | $ 250,770 | 258,943 | |
Customer lists | Maximum | |||
Changes in the carrying amount of the Company's goodwill | |||
Estimated Useful Life | 15 years | ||
Customer lists | Minimum | |||
Changes in the carrying amount of the Company's goodwill | |||
Estimated Useful Life | 7 years | ||
Proprietary technologies | |||
Changes in the carrying amount of the Company's goodwill | |||
Gross Carrying Amount | $ 69,396 | 66,746 | |
Accumulated Amortization | (38,054) | (36,151) | |
Net Carrying Amount | $ 31,342 | 30,595 | |
Proprietary technologies | Maximum | |||
Changes in the carrying amount of the Company's goodwill | |||
Estimated Useful Life | 8 years | ||
Proprietary technologies | Minimum | |||
Changes in the carrying amount of the Company's goodwill | |||
Estimated Useful Life | 4 years | ||
Trade names and domains | |||
Changes in the carrying amount of the Company's goodwill | |||
Gross Carrying Amount | $ 27,990 | 27,990 | |
Accumulated Amortization | (13,336) | (12,352) | |
Net Carrying Amount | $ 14,654 | 15,638 | |
Trade names and domains | Maximum | |||
Changes in the carrying amount of the Company's goodwill | |||
Estimated Useful Life | 7 years | ||
Trade names and domains | Minimum | |||
Changes in the carrying amount of the Company's goodwill | |||
Estimated Useful Life | 2 years | ||
Backlog | |||
Changes in the carrying amount of the Company's goodwill | |||
Estimated Useful Life | 8 years | ||
Gross Carrying Amount | $ 11,000 | 11,000 | |
Accumulated Amortization | (10,953) | (10,935) | |
Net Carrying Amount | 47 | $ 65 | |
Envestnet Wealth | |||
Changes in the carrying amount of the Company's goodwill | |||
Balance at period start | 243,809 | ||
Private company acquisition | 0 | ||
Foreign currency | 0 | ||
Other | (97) | ||
Balance at period end | 243,712 | ||
Envestnet Data and Analytics | |||
Changes in the carrying amount of the Company's goodwill | |||
Balance at period start | 275,293 | ||
Private company acquisition | 21,448 | ||
Foreign currency | 71 | ||
Other | 0 | ||
Balance at period end | $ 296,812 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net (Future Expense) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Future amortization expense of the intangible assets | ||
Remainder of 2019 | $ 36,831 | |
2020 | 45,364 | |
2021 | 36,740 | |
2022 | 34,291 | |
2023 | 24,920 | |
Thereafter | 118,667 | |
Total | $ 296,813 | $ 305,241 |
Other Non-Current Assets (Detai
Other Non-Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other Assets, Noncurrent [Abstract] | ||
Deferred sales incentive compensation | $ 7,081 | $ 7,014 |
Assets to fund deferred compensation liability | 6,746 | 6,346 |
Lease and other deposits | 4,341 | 4,341 |
Investments in private companies | 3,659 | 2,862 |
Unamortized issuance costs on revolving credit facility | 2,032 | 2,251 |
Other | 3,086 | 2,484 |
Total | $ 26,945 | $ 25,298 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Components of accrued expenses | ||
Accrued investment manager fees | $ 38,367 | $ 50,635 |
Accrued compensation and related taxes | 28,847 | 50,598 |
Sales and use tax payable | 10,214 | 9,733 |
Accrued transaction costs | 6,149 | 4,543 |
Accrued professional services | 5,334 | 4,517 |
Other accrued expenses | 12,546 | 13,272 |
Total accrued expenses | $ 101,457 | $ 133,298 |
Debt (Summary) (Details)
Debt (Summary) (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2014 |
Outstanding debt obligations | |||
Unamortized issuance costs on Convertible Notes | $ (2,032,000) | $ (2,251,000) | |
Convertible Notes due 2019 | |||
Outstanding debt obligations | |||
Face amount | 172,500,000 | 172,500,000 | $ 172,500,000 |
Unaccreted discount on Convertible Notes | (4,393,000) | (5,890,000) | |
Unamortized issuance costs on Convertible Notes | (665,000) | (899,000) | |
Convertible Notes carrying value | 167,442,000 | 165,711,000 | |
Convertible Notes due 2023 | |||
Outstanding debt obligations | |||
Face amount | 345,000,000 | 345,000,000 | |
Unaccreted discount on Convertible Notes | (40,379,000) | (42,641,000) | |
Unamortized issuance costs on Convertible Notes | (7,229,000) | (7,634,000) | |
Convertible Notes carrying value | 297,392,000 | 294,725,000 | |
Credit Agreement | |||
Outstanding debt obligations | |||
Revolving credit facility balance | $ 0 | $ 0 |
Debt (Interest) (Details)
Debt (Interest) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Interest Expense, Debt [Abstract] | ||
Total | $ 6,880 | $ 3,209 |
Convertible Notes Credit And Amended And Restated Credit Agreements | ||
Interest Expense, Debt [Abstract] | ||
Accretion of debt discount | 3,758 | 1,418 |
Coupon interest | 2,264 | 755 |
Amortization of issuance costs | 858 | 450 |
Undrawn and other fees | 216 | 48 |
Interest on revolving credit facility | 0 | 2,565 |
Total | $ 7,096 | $ 5,236 |
Debt (Convertible) (Details)
Debt (Convertible) (Details) | 1 Months Ended | 12 Months Ended | |||
May 31, 2018USD ($)days$ / shares | Dec. 31, 2014USD ($)$ / shares | Mar. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | Mar. 31, 2018 | |
Convertible Notes due 2019 | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 1.75% | ||||
Repurchase percentage of principal (as a percent) | 100.00% | ||||
Conversion rate | 15.9022 | ||||
Principal amount | $ 1,000 | ||||
Conversion price (in dollars per share) | $ 62.88 | $ 62.88 | |||
Effective interest rate (as a percent) | 6.00% | 6.00% | |||
Face amount | $ | $ 172,500,000 | $ 172,500,000 | $ 172,500,000 | ||
Convertible notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 1.75% | ||||
Repurchase percentage of principal (as a percent) | 100.00% | ||||
Conversion rate | 14.6381 | ||||
Principal amount | $ 1,000 | ||||
Conversion price (in dollars per share) | $ 68.31 | $ 68.31 | |||
Effective interest rate (as a percent) | 6.00% | ||||
Face amount | $ | $ 345,000,000 | ||||
Threshold percentage of stock price trigger (as a percent) | 130.00% | ||||
Threshold trading days (in days) | days | 20 | ||||
Consecutive trading days | days | 30 | ||||
Preceding Days | days | 5 |
Debt (Credit Agreement) (Detail
Debt (Credit Agreement) (Details) - Second Amended And Restated Credit Agreement - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Jul. 31, 2017 | |
Debt Instrument [Line Items] | ||
Credit facility amount | $ 350,000,000 | |
Right to increase credit facility, amount | $ 50,000,000 | |
London Interbank Offered Rate (LIBOR) | Minimum | ||
Debt Instrument [Line Items] | ||
Spread on variable rate basis (as a percent) | 1.50% | |
London Interbank Offered Rate (LIBOR) | Maximum | ||
Debt Instrument [Line Items] | ||
Spread on variable rate basis (as a percent) | 3.25% |
Other Non-Current Liabilities_2
Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Uncertain tax positions | $ 11,084 | $ 10,394 |
Deferred compensation liability | 7,381 | 6,196 |
Accrued purchase liability | 5,408 | 0 |
Other | 579 | 1,415 |
Total | $ 24,452 | $ 18,005 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring Basis - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Level 1 | ||
Assets | ||
Total Assets | $ 214,715 | $ 265,554 |
Liabilities | ||
Total liabilities | 7,381 | 6,196 |
Level 1 | Contingent consideration | ||
Liabilities | ||
Total liabilities | 0 | 0 |
Level 1 | Deferred compensation liability | ||
Liabilities | ||
Total liabilities | 7,381 | 6,196 |
Level 1 | Money market funds and other | ||
Assets | ||
Total Assets | 214,715 | 265,554 |
Level 1 | Asset to fund deferred compensation liability | ||
Assets | ||
Total Assets | 0 | 0 |
Level 2 | ||
Assets | ||
Total Assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Level 2 | Contingent consideration | ||
Liabilities | ||
Total liabilities | 0 | 0 |
Level 2 | Deferred compensation liability | ||
Liabilities | ||
Total liabilities | 0 | 0 |
Level 2 | Money market funds and other | ||
Assets | ||
Total Assets | 0 | 0 |
Level 2 | Asset to fund deferred compensation liability | ||
Assets | ||
Total Assets | 0 | 0 |
Level 3 | ||
Assets | ||
Total Assets | 6,746 | 6,346 |
Liabilities | ||
Total liabilities | 8,461 | 732 |
Level 3 | Contingent consideration | ||
Liabilities | ||
Total liabilities | 8,461 | 732 |
Level 3 | Deferred compensation liability | ||
Liabilities | ||
Total liabilities | 0 | 0 |
Level 3 | Money market funds and other | ||
Assets | ||
Total Assets | 0 | 0 |
Level 3 | Asset to fund deferred compensation liability | ||
Assets | ||
Total Assets | 6,746 | 6,346 |
Fair Value | ||
Assets | ||
Total Assets | 221,461 | 271,900 |
Liabilities | ||
Total liabilities | 15,842 | 6,928 |
Fair Value | Contingent consideration | ||
Liabilities | ||
Total liabilities | 8,461 | 732 |
Fair Value | Deferred compensation liability | ||
Liabilities | ||
Total liabilities | 7,381 | 6,196 |
Fair Value | Money market funds and other | ||
Assets | ||
Total Assets | 214,715 | 265,554 |
Fair Value | Asset to fund deferred compensation liability | ||
Assets | ||
Total Assets | $ 6,746 | $ 6,346 |
Fair Value Measurements (Level
Fair Value Measurements (Level III) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Changes in the fair value of Contingent Consideration Liabilities | |
Payment of contingent consideration liability | $ 7,580 |
Recurring Basis | |
Reconciliation of assets to fund deferred compensation liability | |
Balance | 6,346 |
Contributions and fair value adjustments | 400 |
Changes in the fair value of Contingent Consideration Liabilities | |
Balance | 732 |
Accretion on contingent consideration | 149 |
Balance | $ 8,461 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | May 25, 2018 | Dec. 15, 2014 | |
Fair Value Measurements | ||||
Fair value asset transfers between Levels 1, 2 and 3 | $ 0 | |||
Convertible Notes due 2023 | 297,392,000 | $ 294,725,000 | ||
Recurring Basis | ||||
Fair Value Measurements | ||||
Asset value | 6,346,000 | |||
2019 Convertible Notes | ||||
Fair Value Measurements | ||||
Face amount | $ 172,500,000 | |||
Debt instrument, fair value disclosure | 192,165,000 | 174,101,000 | ||
2023 Convertible Notes | ||||
Fair Value Measurements | ||||
Face amount | $ 345,000,000 | |||
Debt instrument, fair value disclosure | 397,544,000 | 339,024,000 | ||
Carrying Value | 2019 Convertible Notes | ||||
Fair Value Measurements | ||||
Convertible Notes due 2023 | 167,442,000 | 165,711,000 | ||
Carrying Value | 2023 Convertible Notes | ||||
Fair Value Measurements | ||||
Convertible Notes due 2023 | 297,392,000 | $ 294,725,000 | ||
Other Noncurrent Assets | Recurring Basis | ||||
Fair Value Measurements | ||||
Asset value | $ 6,746,000 |
Revenue (Disaggregation) (Detai
Revenue (Disaggregation) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||
Total revenues | $ 199,666 | $ 198,011 |
United States | ||
Revenues: | ||
Total revenues | 192,119 | 188,315 |
International | ||
Revenues: | ||
Total revenues | 7,547 | 9,696 |
Recurring | ||
Revenues: | ||
Total revenues | 192,021 | 190,848 |
Asset-based | ||
Revenues: | ||
Total revenues | 108,934 | 121,153 |
Subscription-based | ||
Revenues: | ||
Total revenues | 83,087 | 69,695 |
Professional services and other revenues | ||
Revenues: | ||
Total revenues | 7,645 | 7,163 |
Envestnet Wealth | ||
Revenues: | ||
Total revenues | 152,705 | 155,988 |
Envestnet Wealth | Recurring | ||
Revenues: | ||
Total revenues | 149,960 | 153,738 |
Envestnet Wealth | Asset-based | ||
Revenues: | ||
Total revenues | 108,934 | 121,153 |
Envestnet Wealth | Subscription-based | ||
Revenues: | ||
Total revenues | 41,026 | 32,585 |
Envestnet Wealth | Professional services and other revenues | ||
Revenues: | ||
Total revenues | 2,745 | 2,250 |
Envestnet Data and Analytics | ||
Revenues: | ||
Total revenues | 46,961 | 42,023 |
Envestnet Data and Analytics | Recurring | ||
Revenues: | ||
Total revenues | 42,061 | 37,110 |
Envestnet Data and Analytics | Asset-based | ||
Revenues: | ||
Total revenues | 0 | 0 |
Envestnet Data and Analytics | Subscription-based | ||
Revenues: | ||
Total revenues | 42,061 | 37,110 |
Envestnet Data and Analytics | Professional services and other revenues | ||
Revenues: | ||
Total revenues | $ 4,900 | $ 4,913 |
Revenue (Major Customers) (Deta
Revenue (Major Customers) (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | Customer concentration risk | Fidelity | ||
Major Customers | ||
Revenue as a percentage of the company's total | 16.00% | 16.00% |
Revenue (Obligation) (Details)
Revenue (Obligation) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 498,881 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 159,916 |
Remaining Performance Obligations | |
Revenue recognition period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 138,921 |
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 | $ 83,286 |
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 | $ 55,311 |
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 | $ 36,640 |
Remaining Performance Obligations | |
Revenue recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Remaining Performance Obligations | |
Revenue recognition period |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Increase (decrease) in contract with customer liability | $ 7,321 | |
Recognized deferred revenue | 9,723 | $ 7,516 |
Deferred sales incentive compensation | 7,081 | |
Amortization expense for the deferred sales incentive compensation | $ 651 | $ 482 |
Cost of Revenues (Details)
Cost of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cost of revenues | $ 61,645 | $ 62,934 |
Asset-based | ||
Cost of revenues | 53,842 | 57,572 |
Subscription-based | ||
Cost of revenues | 7,677 | 5,226 |
Professional services and other revenues | ||
Cost of revenues | $ 126 | $ 136 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Maximum number of shares available for future issuance (in shares) | 2,081,905 | |
Statutory rate (as a percent) | 25.30% | 25.30% |
Tax effect on stock-based compensation expense after valuation allowance | $ 0 |
Stock-Based Compensation (Expen
Stock-Based Compensation (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Summary of employee stock-based compensation expense | ||
Stock-based compensation expense | $ 12,864 | $ 8,495 |
Tax effect on stock-based compensation expense | (3,256) | (2,149) |
Net effect on income | $ 9,608 | $ 6,346 |
Stock-Based Compensation (Assum
Stock-Based Compensation (Assumptions) (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Summary of weighted average assumptions used to value options granted | ||
Grant date fair value of options (in dollars per share) | $ 21.55 | $ 0 |
Volatility (as a percent) | 40.00% | 0.00% |
Risk-free interest rate (as a percent) | 2.50% | 0.00% |
Dividend yield (as a percent) | 0.00% | 0.00% |
Expected term (in years) | 6 years 6 months | 0 years |
Stock-Based Compensation (Optio
Stock-Based Compensation (Options) (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Options | ||
Outstanding at the beginning of the period (in shares) | 1,887,969 | |
Granted (in shares) | 81,807 | |
Exercised (in shares) | (200,326) | |
Forfeited (in shares) | (1,100) | |
Outstanding at the end of the period (in shares) | 1,768,350 | 1,887,969 |
Options exercisable (in shares) | 1,655,119 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 20.05 | |
Granted (in dollars per share) | 49.02 | |
Exercised (in dollars per share) | 16.91 | |
Forfeited (in dollars per share) | 31.70 | |
Outstanding at the end of the period (in dollars per share) | 21.74 | $ 20.05 |
Options exercisable (in dollars per share) | $ 20.23 | |
Weighted-Average Remaining Contractual Life | ||
Outstanding | 3 years 6 months | 3 years 4 months 24 days |
Options exercisable | 3 years 1 month 6 days | |
Aggregate Intrinsic Value | ||
Outstanding (in dollars) | $ 77,197 | $ 56,046 |
Options exercisable (in dollars) | 74,744 | |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||
Unrecognized stock-based compensation expense related to unvested stock options | $ 2,050 | |
Unrecognized compensation expense weighted-average recognition period | 2 years 6 months | |
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 | |
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) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Unvested restricted stock units and awards | |
Number of Shares | |
Balance at the beginning of the period (in shares) | 1,585,788 |
Granted (in shares) | 940,614 |
Vested (in shares) | (479,479) |
Forfeited (in shares) | (24,866) |
Balance at the end of the period (in shares) | 2,022,057 |
Weighted-Average Grant Date Fair Value per Share | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 46.33 |
Granted (in dollars per share) | $ / shares | 61.18 |
Vested (in dollars per share) | $ / shares | 45.98 |
Forfeited (in dollars per share) | $ / shares | 51.27 |
Balance at the end of the period (in dollars per share) | $ / shares | $ 53.26 |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |
Unrecognized compensation expense related to shares | $ | $ 99,802 |
Unrecognized compensation expense weighted-average recognition period | 2 years 4 months 24 days |
Performance Shares | |
Number of Shares | |
Granted (in shares) | 69,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |
Vesting period | 3 years |
Performance Shares | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |
Number of shares to be vest upon each evaluation date, percentage | 50.00% |
Performance Shares | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |
Number of shares to be vest upon each evaluation date, percentage | 150.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income tax provision and the effective tax rate | ||
Loss before income tax provision (benefit) | $ (14,500) | $ (5,992) |
Income tax provision (benefit) | $ 3,768 | $ (13,994) |
Effective tax rate (as a percent) | (26.00%) | 233.50% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Tax Cuts and Jobs Act of 2017, BEAT provision, income tax expense (benefit) | $ 2,040 | ||
Gross unrecognized tax benefits | 16,147 | $ 15,628 | |
Unrecognized tax benefits, exclusive of interest and penalties, recorded as a non-current liability | 4,702 | 4,429 | |
Unrecognized tax benefits that would impact effective tax rate, if recognized | 11,084 | ||
Potential interest and penalties related to unrecognized tax benefits included in income tax expense | 373 | $ 287 | |
Accrued interest and penalties on unrecognized tax benefits | $ 6,370 | $ 5,977 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | May 31, 2018 | Dec. 31, 2014 | |
Earnings Per Share, Basic [Abstract] | ||||
Net income (loss) attributable to Envestnet, Inc. | $ (18,185) | $ 8,104 | ||
Basic number of weighted-average shares outstanding (in shares) | 48,237,265 | 44,782,982 | ||
Basic net income (loss) per share (in dollars per share) | $ (0.38) | $ 0.18 | ||
Diluted income (loss) per share calculation: | ||||
Net income (loss) attributable to Envestnet, Inc. | $ (18,185) | $ 8,104 | ||
Effect of dilutive shares: | ||||
Options to purchase common stock (in shares) | 0 | 1,396,091 | ||
Unvested restricted stock units (in shares) | 0 | 966,487 | ||
Diluted number of weighted-average shares outstanding (in shares) | 48,237,265 | 47,145,560 | ||
Diluted net income (loss) per share (in dollars per share) | $ (0.38) | $ 0.17 | ||
Convertible Notes due 2019 | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Conversion price (in dollars per share) | 62.88 | $ 62.88 | ||
Convertible notes due 2023 | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Conversion price (in dollars per share) | $ 68.31 | $ 68.31 |
Net Income (Loss) Per Share (An
Net Income (Loss) Per Share (Antidilutive Securities) (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
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 loss per share (in shares) | 12,054,233 | 2,760,876 |
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 loss per share (in shares) | 1,768,350 | 9,045 |
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 loss per share (in shares) | 2,022,057 | 8,510 |
Warrants | ||
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 loss per share (in shares) | 470,000 | 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 loss per share (in shares) | 7,793,826 | 2,743,321 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)claim | Dec. 31, 2018USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of previous claims experienced | claim | 0 | |
Future minimum unconditional purchase obligations | ||
Sales and use tax liability | $ 9,353 | $ 8,643 |
Sales and use tax receivable | $ 5,510 | $ 5,246 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Term of contract | 20 years |
Option to terminate, term | 90 days |
Operating lease, cost | $ 4,118 |
Operating cash flows from operating leases | $ 4,656 |
Weighted average remaining lease term | 8 years 10 months 24 days |
Weighted average discount rate, percent | 6.40% |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Lease not yet commenced, term of contract | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 14 years |
Lease not yet commenced, term of contract | 14 years |
Leases (Future Minimum Lease Pa
Leases (Future Minimum Lease Payments) (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2019 | $ 13,117 |
2020 | 16,235 |
2021 | 14,696 |
2022 | 10,619 |
2023 | 9,920 |
Thereafter | 47,430 |
Total future minimum lease payments | 112,017 |
Less imputed interest | (26,331) |
Total operating lease liabilities | $ 85,686 |
Leases (Prior Year Lease Inform
Leases (Prior Year Lease Information) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 15,997 |
2020 | 15,437 |
2021 | 14,705 |
2022 | 10,816 |
2023 | 9,910 |
Thereafter | 39,449 |
Total | $ 106,314 |
Segment Information (Revenue by
Segment Information (Revenue by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Information | ||
Total revenues | $ 199,666 | $ 198,011 |
Customer concentration risk | Revenues | Fidelity | ||
Segment Information | ||
Fidelity revenue as a percentage of Envestnet Wealth Solutions segment revenue: | 16.00% | 16.00% |
Recurring | ||
Segment Information | ||
Total revenues | $ 192,021 | $ 190,848 |
Asset-based | ||
Segment Information | ||
Total revenues | 108,934 | 121,153 |
Subscription-based | ||
Segment Information | ||
Total revenues | 83,087 | 69,695 |
Professional services and other revenues | ||
Segment Information | ||
Total revenues | 7,645 | 7,163 |
Envestnet Wealth | ||
Segment Information | ||
Total revenues | $ 152,705 | $ 155,988 |
Envestnet Wealth | Customer concentration risk | Revenue from Contract with Customer [Member] | Fidelity | ||
Segment Information | ||
Fidelity revenue as a percentage of Envestnet Wealth Solutions segment revenue: | 20.00% | 20.00% |
Envestnet Wealth | Recurring | ||
Segment Information | ||
Total revenues | $ 149,960 | $ 153,738 |
Envestnet Wealth | Asset-based | ||
Segment Information | ||
Total revenues | 108,934 | 121,153 |
Envestnet Wealth | Subscription-based | ||
Segment Information | ||
Total revenues | 41,026 | 32,585 |
Envestnet Wealth | Professional services and other revenues | ||
Segment Information | ||
Total revenues | 2,745 | 2,250 |
Envestnet Data and Analytics | ||
Segment Information | ||
Total revenues | 46,961 | 42,023 |
Envestnet Data and Analytics | Recurring | ||
Segment Information | ||
Total revenues | 42,061 | 37,110 |
Envestnet Data and Analytics | Asset-based | ||
Segment Information | ||
Total revenues | 0 | 0 |
Envestnet Data and Analytics | Subscription-based | ||
Segment Information | ||
Total revenues | 42,061 | 37,110 |
Envestnet Data and Analytics | Professional services and other revenues | ||
Segment Information | ||
Total revenues | $ 4,900 | $ 4,913 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Information | ||
Income (loss) from operations | $ (8,737) | $ (738) |
Operating expenses | (208,403) | (198,749) |
Other expense, net | (5,763) | (5,254) |
Loss before income tax provision (benefit) | (14,500) | (5,992) |
Income tax provision (benefit) | 3,768 | (13,994) |
Net income (loss) | (18,268) | 8,002 |
Add: Net loss attributable to non-controlling interest | 83 | 102 |
Net income (loss) attributable to Envestnet, Inc. | (18,185) | 8,104 |
Operating Segments | ||
Segment Information | ||
Income (loss) from operations | 8,916 | 11,452 |
Segment Reconciling | ||
Segment Information | ||
Operating expenses | (17,653) | (12,190) |
Envestnet Wealth | Operating Segments | ||
Segment Information | ||
Income (loss) from operations | 16,844 | 15,861 |
Envestnet Data and Analytics | Operating Segments | ||
Segment Information | ||
Income (loss) from operations | $ (7,928) | $ (4,409) |
Segment Information (Summary of
Segment Information (Summary of Consolidated Total Assets, Depreciation and Amortization and Capital Expenditures) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Information | |||
Assets | $ 1,370,591 | $ 1,313,747 | |
Depreciation and amortization | 19,517 | $ 19,546 | |
Capital expenditures | 12,432 | 9,587 | |
Envestnet Wealth | |||
Segment Information | |||
Assets | 836,043 | 810,971 | |
Depreciation and amortization | 11,267 | 11,473 | |
Capital expenditures | 10,838 | 8,192 | |
Envestnet Data and Analytics | |||
Segment Information | |||
Assets | 534,548 | $ 502,776 | |
Depreciation and amortization | 8,250 | 8,073 | |
Capital expenditures | $ 1,594 | $ 1,395 |
Geographical Information (Detai
Geographical Information (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Geographical Information | ||
Property and equipment, net | $ 46,794 | $ 44,991 |
United States | ||
Geographical Information | ||
Property and equipment, net | 41,127 | 39,412 |
India | ||
Geographical Information | ||
Property and equipment, net | 4,174 | 3,969 |
Other | ||
Geographical Information | ||
Property and equipment, net | $ 1,493 | $ 1,610 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ in Thousands, shares in Millions | May 01, 2019 | Apr. 01, 2019 |
PIEtech Inc | ||
Subsequent Event [Line Items] | ||
Cash consideration | $ 295,000 | |
Equity interest issued or issuable (in shares) | 3.2 | |
Consideration transferred | $ 500,000 | |
Inducement grant reserve | $ 30,000 | |
Tamarac Inc | PortfolioCenter Acquisition | ||
Subsequent Event [Line Items] | ||
Cash consideration | $ 17,500 | |
Seller earn-out payment period | 12 months |