Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-34835 | |
Entity Registrant Name | Envestnet, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-1409613 | |
Entity Address, Address Line One | 35 East Wacker Drive, Suite 2400 | |
Entity Address, City or Town | Chicago, | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60601 | |
City Area Code | 312 | |
Local Phone Number | 827-2800 | |
Title of 12(b) Security | Common Stock, par value $0.005 per share | |
Trading Symbol | ENV | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 52,182,228 | |
Entity Central Index Key | 0001337619 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 77,717 | $ 289,345 |
Fees receivable, net | 71,632 | 68,004 |
Prepaid expenses and other current assets | 40,046 | 23,557 |
Total current assets | 189,395 | 380,906 |
Property and equipment, net | 51,016 | 44,991 |
Internally developed software, net | 48,059 | 38,209 |
Intangible assets, net | 509,159 | 305,241 |
Goodwill | 908,686 | 519,102 |
Operating lease right-of-use assets, net | 72,191 | |
Other non-current assets | 33,834 | 25,298 |
Total assets | 1,812,340 | 1,313,747 |
Current liabilities: | ||
Accrued expenses and other liabilities | 118,608 | 133,298 |
Accounts payable | 15,165 | 19,567 |
Operating lease liabilities | 12,918 | |
Convertible Notes due 2019 | 169,182 | 165,711 |
Contingent consideration | 0 | 732 |
Deferred revenue | 37,601 | 23,988 |
Total current liabilities | 353,474 | 343,296 |
Convertible Notes due 2023 | 300,078 | 294,725 |
Revolving credit facility | 145,000 | 0 |
Contingent consideration | 16,423 | 0 |
Deferred revenue | 6,659 | 6,910 |
Non-current operating lease liabilities | 77,431 | |
Deferred rent and lease incentive | 17,569 | |
Deferred tax liabilities, net | 31,292 | 640 |
Other non-current liabilities | 28,193 | 18,005 |
Total liabilities | 958,550 | 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; 65,415,670 and 61,238,898 shares issued as of June 30, 2019 and December 31, 2018, respectively; 52,070,156 and 48,121,800 shares outstanding as of June 30, 2019 and December 31, 2018, respectively | 327 | 306 |
Additional paid-in capital | 1,015,578 | 761,128 |
Accumulated deficit | (76,174) | (58,882) |
Treasury stock at cost, 13,345,514 and 13,117,098 shares as of June 30, 2019 and December 31, 2018, respectively | (83,820) | (67,858) |
Accumulated other comprehensive loss | (660) | (994) |
Total stockholders’ equity | 855,251 | 633,700 |
Non-controlling interest | (1,461) | (1,098) |
Total equity | 853,790 | 632,602 |
Total liabilities and equity | $ 1,812,340 | $ 1,313,747 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 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) | 65,415,670 | 61,238,898 |
Common stock, shares outstanding (in shares) | 52,070,156 | 48,121,800 |
Treasury stock (in shares) | 13,345,514 | 13,117,098 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 224,445 | $ 201,116 | $ 424,111 | $ 399,127 |
Operating expenses: | ||||
Cost of revenues | 72,080 | 67,627 | 133,725 | 130,561 |
Compensation and benefits | 103,286 | 80,210 | 190,003 | 163,750 |
General and administration | 42,421 | 34,089 | 82,945 | 66,818 |
Depreciation and amortization | 26,915 | 19,185 | 46,432 | 38,731 |
Total operating expenses | 244,702 | 201,111 | 453,105 | 399,860 |
Income (loss) from operations | (20,257) | 5 | (28,994) | (733) |
Other expense, net | (7,512) | (5,430) | (13,275) | (10,684) |
Loss before income tax provision (benefit) | (27,769) | (5,425) | (42,269) | (11,417) |
Income tax provision (benefit) | (28,382) | 566 | (24,614) | (13,428) |
Net income (loss) | 613 | (5,991) | (17,655) | 2,011 |
Add: Net loss attributable to non-controlling interest | 280 | 465 | 363 | 567 |
Net income (loss) attributable to Envestnet, Inc. | $ 893 | $ (5,526) | $ (17,292) | $ 2,578 |
Net income (loss) per share attributable to Envestnet, Inc.: | ||||
Basic (in dollars per share) | $ 0.02 | $ (0.12) | $ (0.35) | $ 0.06 |
Diluted (in dollars per share) | $ 0.02 | $ (0.12) | $ (0.35) | $ 0.05 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 50,870,296 | 45,247,331 | 49,526,774 | 44,963,735 |
Diluted (in shares) | 52,982,688 | 45,247,331 | 49,526,774 | 47,156,205 |
Recurring | ||||
Revenues: | ||||
Total revenues | $ 212,328 | $ 189,890 | $ 404,349 | $ 380,738 |
Asset-based | ||||
Revenues: | ||||
Total revenues | 120,070 | 118,111 | 229,004 | 239,264 |
Operating expenses: | ||||
Cost of revenues | 60,293 | 56,748 | 114,135 | 114,320 |
Subscription-based | ||||
Revenues: | ||||
Total revenues | 92,258 | 71,779 | 175,345 | 141,474 |
Operating expenses: | ||||
Cost of revenues | 6,697 | 6,213 | 14,374 | 11,439 |
Professional services and other revenues | ||||
Revenues: | ||||
Total revenues | 12,117 | 11,226 | 19,762 | 18,389 |
Operating expenses: | ||||
Cost of revenues | $ 5,090 | $ 4,666 | $ 5,216 | $ 4,802 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) attributable to Envestnet, Inc. | $ 893 | $ (5,526) | $ (17,292) | $ 2,578 |
Other comprehensive income (loss), net of taxes: | ||||
Foreign currency translation gain (loss) | 112 | (1,036) | 334 | (1,363) |
Comprehensive income (loss) attributable to Envestnet, Inc. | $ 1,005 | $ (6,562) | $ (16,958) | $ 1,215 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Non-controlling Interest |
Balance at period start (in shares) at Dec. 31, 2017 | 57,450,056 | 12,749,415 | |||||
Balance, at period start 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 (loss) | (327) | (327) | |||||
Net income (loss) | 8,002 | 8,104 | (102) | ||||
Balance at period end (in shares) at Mar. 31, 2018 | 58,116,581 | 12,915,632 | |||||
Balance, at period end at Mar. 31, 2018 | 456,040 | $ 290 | $ (56,338) | 567,155 | 297 | (56,533) | 1,169 |
Balance at period start (in shares) at Dec. 31, 2017 | 57,450,056 | 12,749,415 | |||||
Balance, at period start at Dec. 31, 2017 | 436,670 | $ 287 | $ (47,042) | 556,257 | 624 | (73,854) | 398 |
Increase (decrease) in shareholders' equity | |||||||
Foreign currency translation gain (loss) | (1,363) | ||||||
Net income (loss) | 2,011 | ||||||
Balance at period end (in shares) at Jun. 30, 2018 | 58,382,026 | 13,006,432 | |||||
Balance, at period end at Jun. 30, 2018 | 501,138 | $ 291 | $ (61,437) | 624,378 | (739) | (62,059) | 704 |
Balance at period start (in shares) at Mar. 31, 2018 | 58,116,581 | 12,915,632 | |||||
Balance, at period start at Mar. 31, 2018 | 456,040 | $ 290 | $ (56,338) | 567,155 | 297 | (56,533) | 1,169 |
Increase (decrease) in shareholders' equity | |||||||
Exercise of stock options (in shares) | 12,166 | ||||||
Exercise of stock options | 136 | 136 | |||||
Issuance of common stock - vesting of restricted stock units (in shares) | 253,279 | ||||||
Issuance of common stock - vesting of restricted stock units | 1 | $ 1 | |||||
Stock-based compensation expense | 10,476 | 10,476 | |||||
Purchase of treasury stock for stock-based tax withholdings (in shares) | (90,800) | ||||||
Purchase of treasury stock for stock-based tax withholdings | (5,099) | $ (5,099) | |||||
Issuance of Convertible Notes due 2023, net of offering costs | 46,611 | 46,611 | |||||
Foreign currency translation gain (loss) | (1,036) | (1,036) | |||||
Net income (loss) | (5,991) | (5,526) | (465) | ||||
Balance at period end (in shares) at Jun. 30, 2018 | 58,382,026 | 13,006,432 | |||||
Balance, at period end at Jun. 30, 2018 | 501,138 | $ 291 | $ (61,437) | 624,378 | (739) | (62,059) | 704 |
Balance at period start (in shares) at Dec. 31, 2018 | 61,238,898 | 13,117,098 | |||||
Balance, at period start 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 (loss) | 222 | 222 | |||||
Net income (loss) | (18,268) | (18,185) | (83) | ||||
Balance at period end (in shares) at Mar. 31, 2019 | 61,934,458 | 13,277,554 | |||||
Balance, at period end at Mar. 31, 2019 | 621,538 | $ 309 | $ (77,677) | 777,926 | (772) | (77,067) | (1,181) |
Balance at period start (in shares) at Dec. 31, 2018 | 61,238,898 | 13,117,098 | |||||
Balance, at period start at Dec. 31, 2018 | 632,602 | $ 306 | $ (67,858) | 761,128 | (994) | (58,882) | (1,098) |
Increase (decrease) in shareholders' equity | |||||||
Foreign currency translation gain (loss) | 334 | ||||||
Net income (loss) | (17,655) | ||||||
Balance at period end (in shares) at Jun. 30, 2019 | 65,415,670 | 13,345,514 | |||||
Balance, at period end at Jun. 30, 2019 | 853,790 | $ 327 | $ (83,820) | 1,015,578 | (660) | (76,174) | (1,461) |
Balance at period start (in shares) at Mar. 31, 2019 | 61,934,458 | 13,277,554 | |||||
Balance, at period start at Mar. 31, 2019 | 621,538 | $ 309 | $ (77,677) | 777,926 | (772) | (77,067) | (1,181) |
Increase (decrease) in shareholders' equity | |||||||
Exercise of stock options (in shares) | 114,109 | ||||||
Exercise of stock options | 1,751 | $ 1 | 1,750 | ||||
Issuance of common stock - vesting of restricted stock units (in shares) | 182,390 | ||||||
Issuance of common stock - vesting of restricted stock units | 1 | $ 1 | |||||
Acquisition of business (in shares) | 3,184,713 | ||||||
Acquisition of business | 222,484 | $ 16 | 222,468 | ||||
Stock-based compensation expense | 13,434 | 13,434 | |||||
Purchase of treasury stock for stock-based tax withholdings (in shares) | (67,960) | ||||||
Purchase of treasury stock for stock-based tax withholdings | (6,143) | $ (6,143) | |||||
Foreign currency translation gain (loss) | 112 | 112 | |||||
Net income (loss) | 613 | 893 | (280) | ||||
Balance at period end (in shares) at Jun. 30, 2019 | 65,415,670 | 13,345,514 | |||||
Balance, at period end at Jun. 30, 2019 | $ 853,790 | $ 327 | $ (83,820) | $ 1,015,578 | $ (660) | $ (76,174) | $ (1,461) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ (17,655) | $ 2,011 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 46,432 | 38,731 |
Deferred rent and lease incentive amortization | 0 | 1,069 |
Provision for doubtful accounts | 713 | 924 |
Deferred income taxes | (28,991) | (17,093) |
Non-cash based compensation expense | 27,852 | 18,971 |
Non-cash interest expense | 9,896 | 5,630 |
Accretion on contingent consideration and purchase liability | 742 | 196 |
Payments of contingent consideration | (578) | 0 |
Loss allocation from equity method investment | 550 | 811 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Fees receivable, net | (536) | (8,204) |
Prepaid expenses and other current assets | (15,507) | (3,426) |
Other non-current assets | (3,241) | (2,450) |
Accrued expenses and other liabilities | (19,060) | (5,438) |
Accounts payable | (4,768) | 4,166 |
Deferred revenue | 3,940 | 3,478 |
Other non-current liabilities | 2,602 | 1,578 |
Net cash provided by operating activities | 2,391 | 40,954 |
INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (8,815) | (9,569) |
Capitalization of internally developed software | (15,583) | (10,622) |
Acquisitions of businesses, net of cash acquired | (321,571) | (188,345) |
Other | (2,000) | 0 |
Net cash used in investing activities | (347,969) | (208,536) |
FINANCING ACTIVITIES: | ||
Proceeds from issuance of Convertible Notes due 2023 | 0 | 345,000 |
Convertible Notes due 2023 issuance costs | 0 | (9,488) |
Proceeds from borrowings on revolving credit facility | 175,000 | 195,000 |
Payments on revolving credit facility | (30,000) | (276,168) |
Payments of contingent consideration | (171) | (2,193) |
Proceeds from exercise of stock options | 4,914 | 2,540 |
Purchase of treasury stock for stock-based tax withholdings | (15,962) | (14,395) |
Issuance of restricted stock units | 3 | 3 |
Net cash provided by financing activities | 133,784 | 240,299 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 166 | (572) |
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (211,628) | 72,145 |
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) | 78,043 | 134,260 |
Supplemental disclosure of cash flow information - net cash paid during the period for income taxes | 6,121 | 2,225 |
Supplemental disclosure of cash flow information - cash paid during the period for interest | 5,952 | 4,271 |
Supplemental disclosure of non-cash operating, investing and financing activities: | ||
Common stock issued in acquisition of business | 222,484 | 0 |
Contingent consideration issued in acquisition of businesses | 15,880 | 0 |
Purchase liabilities included in other non-current liabilities | 5,468 | 0 |
Purchase liabilities included in accrued expenses and other liabilities | 0 | 1,422 |
Purchase of fixed assets included in accounts payable and accrued expenses and other liabilities | 1,567 | 1,188 |
Membership interest liabilities included in other non-current liabilities | 1,480 | 0 |
Common stock issued to settle purchase liability | 772 | 0 |
Leasehold improvements funded by lease incentive | $ 648 | $ 1,080 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 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 18—Segment Information ” to the condensed consolidated financial statements. The business segments are as follows: • Envestnet Wealth Solutions – a leading provider of unified wealth management software and services to empower financial advisors and institutions. Within Envestnet Wealth Solutions , 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 the creation of a financial plan, asset allocation, investment strategy, portfolio management, rebalancing and performance reporting. Advisors have access to over 19,900 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 (“ RIA s”). • Envestnet | MoneyGuide provides leading goals-based financial planning solutions to the financial services industry. The highly adaptable software helps financial advisors add significant value for their clients using best-in-class technology with enhanced integrations to generate financial plans. • 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 over 4,500 vetted third party managed account products, multi-manager portfolios, fund strategist portfolios, as well as over 1,000 proprietary products, such as quantitative portfolios and fund strategist portfolios. PMC also offers 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 RIA s 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 | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company as of June 30, 2019 and for the three and six months ended June 30, 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 June 30, 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 Solutions segment that are denominated in a non-U.S. currency have been re-measured using the U.S. dollar as the functional currency. Certain accounts within the Envestnet Data & Analytics segment are recorded and measured in foreign currencies. The assets and liabilities for those subsidiaries with a functional currency other than the U.S. dollar are translated at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates. Differences arising from these foreign currency translations are recorded in the unaudited condensed consolidated balance sheets as accumulated other comprehensive income (loss) within stockholders' equity. The results of operations for the three and six months ended June 30, 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 financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates. The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported within the condensed consolidated statements of cash flows: June 30, December 31, 2019 2018 Cash and cash equivalents $ 77,717 $ 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 $ 78,043 $ 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 17—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. These changes became effective for the Company's fiscal year beginning January 1, 2019. 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 early adopted this standard beginning January 1, 2019, noting that this standard will be applied prospectively. Adoption of this standard 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 entities to 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 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. In August 2018, the FASB |
Business Acquisitions
Business Acquisitions | 6 Months Ended |
Jun. 30, 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, the private company merged into Yodlee Inc., a wholly owned subsidiary of the Company (the “ Private Company Acquisition ”). The private company provides conversational artificial intelligence tools and applications to financial services firms, 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 technology and operations of the private company is included in the Company’s Envestnet Data & Analytics segment. The seller of the private company is also entitled to an earn-out payment based on the private company's revenue and other retention targets for the twelve-month period beginning January 1, 2021. The discounted amount of the contingent consideration liability is estimated to be $7,580 and is included as a long-term liability on the condensed consolidated balance sheets. The consideration transferred in the acquisition was as follows: Preliminary Estimate Cash consideration $ 11,173 Purchase consideration liability 6,240 Contingent consideration liability 7,580 Working capital adjustment 70 Total $ 25,063 The estimated fair values of the deferred income taxes, identifiable intangible assets, contingent consideration liability, and goodwill balances are provisional and based on information that was available to the Company as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation and other studies and are in progress and not yet at the point where there is sufficient information for a definitive measurement. The Company believes the preliminary information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair values reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation of tangible assets acquired, liabilities assumed, identifiable intangible assets and goodwill balances and complete the acquisition accounting as soon as reasonably practicable but no later than 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 an increase in future revenues as a result of potential cross selling opportunities. 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: Preliminary Estimate Estimated Useful Life in Years Amortization Method Proprietary technology $ 4,100 4 Straight-line The results of the private company's operations are included in the condensed consolidated statements of operations beginning January 2, 2019 and were not considered material to the Company’s results of operations. For the three and six months ended June 30, 2019 , acquisition related costs for the Private Company Acquisition were not material, and are included in general and administration expenses. The Company may incur additional acquisition related costs over the remainder of 2019. Acquisition of PortfolioCenter business On April 1, 2019, pursuant to an asset purchase agreement, Tamarac, Inc. (“ Tamarac ”), a wholly owned subsidiary of Envestnet , acquired certain of the assets, primarily consisting of intangible assets, and the assumption of certain of the liabilities of the PortfolioCenter business from Performance Technologies, Inc. (the “ PC Seller ”), a wholly owned subsidiary of The Charles Schwab Corporation. The PortfolioCenter Business provides investment advisors and investment advisory service providers with desktop, hosted and outsourced multicustodial software solutions. These solutions provide data-management and performance-measurement tools, as well as customizable accounting, reporting, and billing functions delivered through the commercial software application products known as PortfolioCenter Desktop, PortfolioCenter Hosted, PortfolioServices and Service Bureau. Tamarac acquired the PortfolioCenter Business to better serve small and mid-size RIA firms. The PortfolioCenter Business is included in the Company’s Envestnet Wealth Solutions segment. In connection with the PortfolioCenter Acquisition , Tamarac paid $17,500 in cash. Tamarac funded the PortfolioCenter Acquisition with available cash resources. The PC Seller is also entitled to an earn-out payment based on the PortfolioCenter Business’ revenue for the twelve-month period beginning April 1, 2020. The discounted amount of the contingent consideration liability is estimated to be $8,300 . The preliminary consideration transferred in the acquisition was as follows: Preliminary Estimate Cash consideration $ 17,500 Contingent consideration liability 8,300 Total $ 25,800 The estimated fair values of the deferred income taxes, identifiable intangible assets, contingent consideration liability and goodwill balances are provisional and based on the information that was available to the Company as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation and other studies and are in progress and not yet at the point where there is sufficient information for a definitive measurement. The Company believes the preliminary information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair values reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation of deferred income taxes, liabilities assumed, identifiable intangible assets and goodwill balances and complete the acquisition accounting as soon as practicable but no later than April 1, 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 $ 13 Total liabilities assumed (1,600 ) Identifiable intangible assets 12,400 Goodwill 14,987 Total net assets acquired $ 25,800 The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, primarily related to an increase in future revenues as a result of expanding market opportunities within the mid-size and small RIA market, potential cross selling opportunities, and lower future operating expenses. The goodwill is deductible for income tax purposes. A summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows: Preliminary Estimate Estimated Useful Life in Years Amortization Method Customer list $ 9,100 10 Accelerated Proprietary technology 3,300 5 Straight-line Total $ 12,400 The results of PortfolioCenter's operations are included in the condensed consolidated statements of operations beginning April 1, 2019. PortfolioCenter's revenues for the three and six months ended June 30, 2019 totaled $2,017 . PortfolioCenter's pre-tax loss for the three and six months ended June 30, 2019 totaled $1,624 . The pre-tax loss includes estimated acquired intangible asset amortization of $514 for the three and six months ended June 30, 2019 . For the three and six months ended June 30, 2019 , acquisition related costs for the PortfolioCenter Acquisition were not material, and are included in general and administration expenses. The Company may incur additional acquisition related costs over the remainder of 2019. Acquisition of PIEtech On May 1, 2019, the Company acquired all of the outstanding shares of capital stock of PIEtech, Inc., a Virginia corporation (“ PIEtech ”). 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 technology and operations of PIEtech , which now operates as Envestnet | MoneyGuide, is included in the Envestnet Wealth Solutions segment. The acquisition of PIEtech (the “ PIEtech Acquisition ”) 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. In connection with the PIEtech Acquisition , the Company paid net cash consideration of $299,370 , subject to a working capital adjustment, and issued 3,184,713 shares of Envestnet common stock, par value $0.005 per share, to the sellers. The Company funded the PIEtech Acquisition with available cash resources and borrowings under its revolving credit facility. In connection with the PIEtech Acquisition , the Company 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. As a result, the Company adopted the Envestnet, Inc. 2019 Acquisition Equity Incentive Plan (the “ 2019 Equity Plan ”) in order to make inducement grants to certain PIEtech employees who will join Envestnet | MoneyGuide. Envestnet agreed to grant at future dates, not earlier than the sixty day anniversary of the PIEtech Acquisition , up to 301,469 shares of Envestnet common stock in the form of restricted stock units (“ RSU s”) and performance stock units (“ PSU s”) pursuant to the 2019 Equity Plan and made cash retention payments of approximately $8,800 to certain legacy PIEtech employees who joined Envestnet | MoneyGuide. As of June 30, 2019 , the Company has issued approximately 62,200 and 24,900 RSU s and PSU s, respectively, under the 2019 Equity Plan to legacy PIEtech employees. At this time the Company expects to issue approximately 214,000 additional RSU s and PSU s and expects to pay approximately $5,300 in cash bonus payments over the next three years in connection with the PIEtech Acquisition . The Company also granted membership interests in certain of the Company's equity method investments to two PIEtech executives with an estimated grant date fair market value of $8,900 . These membership interests will vest on May 1, 2020 and become exercisable in future periods. As of June 30, 2019 , the Company has recorded approximately $1,480 as a component of compensation and benefits in the condensed consolidated statement of operations with a corresponding liability in other non-current liabilities in the condensed consolidated balance sheets. The preliminary consideration transferred in the acquisition was as follows: Preliminary Estimate Cash consideration $ 299,370 Stock consideration 222,484 Less: cash acquired (6,360 ) Total estimated fair value of consideration transferred, net of cash acquired $ 515,494 The estimated fair values of the deferred revenue, deferred income taxes, identifiable intangible assets, and goodwill balances are provisional and based on the information that was available to the Company as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation and other studies and are in progress and not yet at the point where there is sufficient information for a definitive measurement. The Company believes the preliminary information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair values reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation of deferred revenue, deferred income taxes, identifiable intangible assets and goodwill balances and complete the acquisition accounting as soon as practicable but no later than May 1, 2020. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Preliminary Estimate Cash and cash equivalents $ 6,360 Accounts receivable 3,782 Prepaid expenses and other current assets 969 Other non-current assets 4,274 Property and equipment, net 6,057 Operating lease right-of-use assets, net 1,688 Identifiable intangible assets 217,000 Goodwill 353,085 Total assets acquired 593,215 Accounts payable and accrued expenses (2,166 ) Operating lease liabilities (2,012 ) Deferred income taxes (59,643 ) Deferred revenue (7,540 ) Total liabilities assumed (71,361 ) Total net assets acquired $ 521,854 The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, primarily related to an increase in future revenues as a result of potential new business and cross selling opportunities. 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: Preliminary Estimate Estimated Useful Life in Years Amortization Method Customer lists $ 181,000 10-16 Accelerated Proprietary technologies 25,000 5 Straight-line Trade names 11,000 6 Straight-line Total $ 217,000 The results of PIEtech's operations are included in the condensed consolidated statements of operations beginning May 1, 2019. PIEtech's revenues for the three and six months ended June 30, 2019 totaled $6,632 . PIEtech's pre-tax loss for the three and six months ended June 30, 2019 totaled $3,422 . The pre-tax loss includes estimated acquired intangible asset amortization of $4,142 for the three and six months ended June 30, 2019 . For the three and six months ended June 30, 2019 , acquisition related costs for the PIEtech Acquisition totaled approximately $11,269 and $16,189 , respectively, and are included in general and administration expenses. Included in these amounts are approximately $8,800 in one-time cash retention bonuses, which are included the Company's corporate non-segment operating expenses in the condensed consolidated statements of operations. The Company may incur additional acquisition related costs over the remainder of 2019. Pro forma financial information The following pro forma financial information presents the combined results of operations of Envestnet, PortfolioCenter and PIEtech for the three and six months ended June 30, 2019 and 2018 . The pro forma financial information presents the results as if the acquisition had occurred as of the beginning of 2018 . The results of the private company acquisition are not included in the pro forma financial information presented below as they were not considered material to the Company's results of operations. The unaudited pro forma results presented include amortization charges for acquired intangible assets, interest expense, stock-based compensation expense and income tax. The Company's 2018 pro forma information includes the reversal of a valuation allowance on its deferred tax assets, transaction fee payments and retention bonus payments that were incurred in 2019 as a result of these acquisitions and reverses these amounts from the appropriate periods in 2019. All intercompany revenues have been eliminated within this pro forma information. Pro forma financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place as of the beginning of 2018 . Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenues $ 228,522 $ 215,240 $ 443,275 $ 426,291 Net income (loss) attributable to Envestnet, Inc. (7,612 ) (1,661 ) (18,857 ) 5,186 Net income (loss) per share attributable to Envestnet, Inc.: Basic $ (0.15 ) $ (0.03 ) $ (0.37 ) $ 0.11 Diluted $ (0.15 ) $ (0.03 ) $ (0.37 ) $ 0.10 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 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: June 30, December 31, 2019 2018 Prepaid technology $ 9,801 $ 6,766 Advance payroll taxes and benefits 10,802 — Non-income tax receivables 8,279 6,240 Prepaid outside information services 1,989 1,515 Other 9,175 9,036 Total $ 40,046 $ 23,557 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consists of the following: June 30, December 31, Estimated Useful Life 2019 2018 Cost: Computer equipment and software 3 years $ 68,752 $ 64,346 Leasehold improvements Shorter of the lease term or useful life of the asset 31,482 28,191 Office furniture and fixtures 3-7 years 10,659 9,291 Office equipment and other 3-5 years 6,425 5,577 Building and building improvements 7-39 years 2,647 — Land Not applicable 940 — 120,905 107,405 Less: accumulated depreciation and amortization (69,889 ) (62,414 ) Total property and equipment, net $ 51,016 $ 44,991 During the three and six months ended June 30, 2019 , the Company retired property and equipment that was no longer in service for the Envestnet Wealth Solutions segment with an historical cost of $2,396 and $3,642 , respectively. During the three and six months ended June 30, 2019 , the Company retired property and equipment that was no longer in service for the Envestnet Data & Analytics segment with an historical cost of $1,640 and $4,121 , respectively. Gains and losses on asset retirements during the three and six months ended June 30, 2019 were not material. During the three and six months ended June 30, 2018 , the Company retired property and equipment that was no longer in service for the Envestnet Wealth Solutions segment with an historical cost of $1,126 , and $3,337 , respectively. During the three and six months ended June 30, 2018 , the Company retired property and equipment that was no longer in service for the Envestnet Data & Analytics segment with an historical cost of $2,525 and $3,401 , respectively. Gains and losses on asset retirements during the three and six months ended June 30, 2018 were not material. Depreciation and amortization expense was as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Depreciation and amortization expense $ 6,751 $ 3,920 $ 11,117 $ 7,838 |
Internally Developed Software
Internally Developed Software | 6 Months Ended |
Jun. 30, 2019 | |
Capitalized Computer Software, Net [Abstract] | |
Internally Developed Software | Internally Developed Software Internally developed software consists of the following: June 30, December 31, Estimated Useful Life 2019 2018 Internally developed software 5 years $ 85,993 $ 70,410 Less: accumulated amortization (37,934 ) (32,201 ) Internally developed software, net $ 48,059 $ 38,209 Amortization expense was as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Amortization expense $ 3,110 $ 1,846 $ 5,733 $ 3,539 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Changes in the carrying amount of goodwill were as follows: Envestnet Wealth Solutions Envestnet Data & Analytics Total Balance at December 31, 2018 $ 243,809 $ 275,293 $ 519,102 Private company acquisition — 21,448 21,448 PortfolioCenter acquisition 14,987 — 14,987 PIEtech acquisition 353,085 — 353,085 Foreign currency — 90 90 Other (26 ) — (26 ) Balance at June 30, 2019 $ 611,855 $ 296,831 $ 908,686 Intangible assets, net consist of the following: June 30, 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 7-16 years $ 551,120 $ (121,836 ) $ 429,284 $ 361,020 $ (102,077 ) $ 258,943 Proprietary technologies 4-8 years 96,694 (41,311 ) 55,383 66,746 (36,151 ) 30,595 Trade names 2-7 years 38,490 (14,027 ) 24,463 27,990 (12,352 ) 15,638 Backlog 8 years 11,000 (10,971 ) 29 11,000 (10,935 ) 65 Total intangible assets $ 697,304 $ (188,145 ) $ 509,159 $ 466,756 $ (161,515 ) $ 305,241 Amortization expense was as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Amortization expense $ 17,054 $ 13,419 $ 29,582 $ 27,354 Future amortization expense of the intangible assets as of June 30, 2019 , is expected to be as follows: Years ending December 31, Remainder of 2019 $ 37,887 2020 71,524 2021 61,555 2022 57,857 2023 46,748 Thereafter 233,588 Total $ 509,159 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following: June 30, December 31, 2019 2018 Accrued investment manager fees $ 43,966 $ 50,635 Accrued compensation and related taxes 44,411 50,598 Sales and use tax payable 12,006 9,733 Accrued transaction costs 4,812 4,543 Accrued professional services 2,599 4,517 Other accrued expenses 10,814 13,272 Total $ 118,608 $ 133,298 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s outstanding debt obligations as of June 30, 2019 and December 31, 2018 were as follows: June 30, December 31, 2019 2018 Convertible Notes due 2019 $ 172,500 $ 172,500 Unaccreted discount on Convertible Notes due 2019 (2,888 ) (5,890 ) Unamortized issuance costs on Convertible Notes due 2019 (430 ) (899 ) Convertible Notes due 2019 carrying value $ 169,182 $ 165,711 Convertible Notes due 2023 $ 345,000 $ 345,000 Unaccreted discount on Convertible Notes due 2023 (38,101 ) (42,641 ) Unamortized issuance costs on Convertible Notes due 2023 (6,821 ) (7,634 ) Convertible Notes due 2023 carrying value $ 300,078 $ 294,725 Revolving credit facility balance $ 145,000 $ — Interest expense was comprised of the following and is included in other expense, net in the condensed consolidated statement of operations: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Accretion of debt discount $ 3,784 $ 2,411 $ 7,542 $ 3,829 Coupon interest 2,264 1,366 4,528 2,121 Amortization of issuance costs 862 621 1,720 1,071 Interest on revolving credit facility 1,196 1,429 1,196 3,994 Undrawn and other fees 157 165 373 213 Total $ 8,263 $ 5,992 $ 15,359 $ 11,228 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. 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 and six months ended June 30, 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 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 and six months ended June 30, 2019 was 6% . See “ Note 15—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% and 3.25% above LIBOR based on the Company’s total leverage ratio. Borrowings under the Second Amended and Restated Credit Agreement are scheduled to mature on July 18, 2022. 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 June 30, 2019 , the Company was in compliance with these requirements. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 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 June 30, 2019 and December 31, 2018 , based on the three-tier fair value hierarchy: June 30, 2019 Fair Value Level I Level II Level III Assets: Money market funds and other (1) $ 40,016 $ 40,016 $ — $ — Assets to fund deferred compensation liability (2) 8,091 — — 8,091 Total assets $ 48,107 $ 40,016 $ — $ 8,091 Liabilities: Contingent consideration $ 16,423 $ — $ — $ 16,423 Deferred compensation liability (3) 7,974 7,974 — — Total liabilities $ 24,397 $ 7,974 $ — $ 16,423 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 fair market value of the deferred compensation liability is based on the daily quoted market prices for the net asset value of the various funds in which the participants have selected, and is included in other non-current liabilities in the condensed consolidated balance sheets. 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. Time deposit account fair values are determined by trade confirmations which mature daily and therefore are considered highly liquid investments. 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. Level III assets and liabilities consist of the estimated fair values of contingent consideration as well as the assets to fund the Company's deferred compensation liability. The fair market value of the assets to fund the Company's deferred compensation liability is based upon the cash surrender value of its life insurance premiums. The fair value of the contingent consideration liabilities related to certain of the Company's acquisitions were estimated using a discounted cash flow method with significant inputs that are not observable in the market and thus represents a Level III fair value measurement 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 these acquisitions during the subsequent periods from the date of acquisition are appropriately discounted considering the uncertainties associated with the obligation, and calculated in accordance with the terms of their respective agreements. The Company utilized a discounted cash flow method with expected future performance of these acquisitions, 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 values of its contingent consideration liabilities at each reporting date until settlement. Changes to these estimated fair values will be recognized in the Company's earnings and included in general and administrative expenses on the condensed consolidated statements of operations. The table below presents a reconciliation of contingent consideration liabilities, 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 June 30, 2019 : Fair Value of Contingent Consideration Liabilities Balance at December 31, 2018 $ 732 Private company acquisition 7,580 PortfolioCenter acquisition 8,300 Settlement of contingent consideration liability (749 ) Accretion on contingent consideration 560 Balance at June 30, 2019 $ 16,423 The table below presents a reconciliation of the assets used to fund deferred the Company's deferred compensation liability, which is measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2018 to June 30, 2019 : Fair Value of Assets to Fund Deferred Compensation Liability Balance at December 31, 2018 $ 6,346 Contributions and fair value adjustments 1,745 Balance at June 30, 2019 $ 8,091 The asset value, which is included in other non-current assets on the condensed balance sheets, increased due to funding of the plan and gains on the underlying investment vehicles. The Company assesses the categorization of assets and liabilities by level at each measurement date, and transfers between levels are recognized on the actual date of the event or 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 six months ended June 30, 2019 . On December 15, 2014, the Company issued $172,500 of Convertible Notes due 2019. As of June 30, 2019 and December 31, 2018 , the carrying value of the Convertible Notes due 2019 equaled $169,182 and $165,711 , respectively, and represented the aggregate principal amount outstanding less the unamortized discount and debt issuance costs. As of June 30, 2019 and December 31, 2018 , the estimated fair value of the Convertible Notes due 2019 was $193,983 and $174,101 , respectively. The Company considered the Convertible Notes due 2019 to be a Level II liability at June 30, 2019 and used a market approach to calculate the fair value. The estimated fair value was determined based on the estimated or actual bids and offers of the Convertible Notes due 2019 in an over-the-counter market on June 30, 2019 (See “ Note 9—Debt ”). On May 25, 2018, the Company issued $345,000 of Convertible Notes due 2023. As of June 30, 2019 and December 31, 2018 , the carrying value of the Convertible Notes due 2023 equaled $300,078 and $294,725 , respectively, and represented the aggregate principal amount outstanding less the unamortized discount and debt issuance costs. As of June 30, 2019 and December 31, 2018 , the fair value of the Convertible Notes due 2023 was $411,896 and $339,024 , respectively. The Company considered the Convertible Notes due 2023 to be a Level II liability at June 30, 2019 and used a market approach to calculate the fair value. The estimated fair value was determined based on the estimated or actual bids and offers of the Convertible Notes due 2023 in an over-the-counter market on June 30, 2019 (See “ Note 9—Debt ”). As of June 30, 2019 and December 31, 2018 , there was $145,000 and $0 , respectively, outstanding on the revolving credit facility under the Second Amended and Restated Credit Agreement . As of June 30, 2019 , the outstanding balance on the revolving credit facility approximated fair value as the revolving credit facility bore interest at variable rates and we believe our credit risk quality was consistent with when the debt originated. The Company considered the revolving credit facility to be a Level I liability as of June 30, 2019 and December 31, 2018 (See “ Note 9—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 June 30, 2019 based upon the short-term nature of these assets and liabilities. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 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 June 30, 2019 2018 Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Revenues: Asset-based $ 120,070 $ — $ 120,070 $ 118,111 $ — $ 118,111 Subscription-based 50,078 42,180 92,258 33,023 38,756 71,779 Total recurring revenues 170,148 42,180 212,328 151,134 38,756 189,890 Professional services and other revenues 6,742 5,375 12,117 5,794 5,432 11,226 Total revenues $ 176,890 $ 47,555 $ 224,445 $ 156,928 $ 44,188 $ 201,116 Six Months Ended June 30, 2019 2018 Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Revenues: Asset-based $ 229,004 $ — $ 229,004 $ 239,264 $ — $ 239,264 Subscription-based 91,104 84,241 175,345 65,608 75,866 141,474 Total recurring revenues 320,108 84,241 404,349 304,872 75,866 380,738 Professional services and other revenues 9,487 10,275 19,762 8,044 10,345 18,389 Total revenues $ 329,595 $ 94,516 $ 424,111 $ 312,916 $ 86,211 $ 399,127 One customer accounted for more than 10% of the Company’s total revenues: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Fidelity 15 % 16 % 15 % 16 % Fidelity accounted for 19% and 20% of Envestnet Wealth Solutions revenues for the three and six months ended June 30, 2019 , respectively. Fidelity accounted for 21% and 21% of Envestnet Wealth Solutions revenues for the three and six months ended June 30, 2018 , respectively. No single customer amounts for Envestnet Data & Analytics exceeded 10% of the segment total for any period presented. The following table presents the Company’s revenues disaggregated by geography, based on the billing address of the customer: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 United States $ 217,462 $ 193,237 $ 409,581 $ 381,552 International (1) 6,983 7,879 14,530 17,575 Total $ 224,445 $ 201,116 $ 424,111 $ 399,127 (1) No foreign country accounted for more than 10% of the Company's total revenues. 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 June 30, 2019 : Years ending December 31, Remainder of 2019 $ 122,303 2020 171,252 2021 106,389 2022 70,046 2023 32,354 Thereafter 41,237 Total $ 543,581 Only fixed consideration from significant contracts with customers is included in the amounts presented above. The Company has applied the practical expedients and exemption and therefore does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less; (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed; and (iii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligations or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation. Contract balances Total deferred revenue as of June 30, 2019 increased by $13,362 , which is primarily the result of the PIEtech and PortfolioCenter acquisitions and an increase in deferred revenue related to subscription-based services during the six months ended June 30, 2019 , the majority 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 $6,865 and $5,737 for the three months ended June 30, 2019 and 2018 , respectively. The amount of revenue recognized that was included in the opening deferred revenue balance was $16,588 and $13,253 for the six months ended June 30, 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 $9,598 and $7,014 as of June 30, 2019 and December 31, 2018 , respectively. Amortization expense for the deferred sales incentive compensation was $753 and $536 for the three months ended June 30, 2019 , and 2018 , respectively. Amortization expense for the deferred sales incentive compensation was $1,404 and $1,018 for the six months ended June 30, 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 | 6 Months Ended |
Jun. 30, 2019 | |
Cost of Revenue [Abstract] | |
Cost of Revenues | Cost of Revenues The following table summarizes cost of revenues by revenue category: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Asset-based $ 60,293 $ 56,748 $ 114,135 $ 114,320 Subscription-based 6,697 6,213 14,374 11,439 Professional services and other 5,090 4,666 5,216 4,802 Total $ 72,080 $ 67,627 $ 133,725 $ 130,561 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [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”), the 2010 Long-Term Incentive Plan (the “2010 Plan”) and the 2019 Equity Plan . As a result of the PIEtech Acquisition (See “ Note 3—Business Acquisitions ”), the Company adopted the 2019 Equity Plan in order to make inducement grants to certain PIEtech employees who will join Envestnet | MoneyGuide. Envestnet agreed to grant at future dates, not earlier than the sixty day anniversary of the PIEtech Acquisition , up to 301,469 shares of Envestnet common stock in the form of RSU s and PSU s pursuant to the 2019 Equity Plan . The RSU s vest over time and the PSU s vest upon the achievement of meeting certain performance conditions as well as a subsequent service condition. The Company is recognizing the estimated expense on a graded-vesting method over a requisite service period of three to five years , which is the estimated vesting period. The Company estimates the expected vesting amount and recognizes compensation expense only for those awards expected to vest. This estimate is reassessed by management each reporting period and may change based upon new facts and circumstances. Changes in the assumptions impact the total amount of expense and are recognized over the vesting period. As of June 30, 2019 , the maximum number of common shares available for future issuance under the Company’s plans is 2,233,604 . Stock-based compensation expense under the Company’s plans was as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Stock-based compensation expense $ 13,434 $ 10,476 $ 26,298 $ 18,971 Tax effect on stock-based compensation expense (3,504 ) (2,650 ) (6,859 ) (4,800 ) Net effect on income $ 9,930 $ 7,826 $ 19,439 $ 14,171 The tax effect on stock-based compensation expense above was calculated using a blended statutory rate of 26.1% for the three and six months ended June 30, 2019 . The tax effect on stock-based compensation expense above was calculated using a blended statutory rate of 25.3% for the three and six months ended June 30, 2018 . Stock Options The following weighted average assumptions were used to value options granted during the periods indicated: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 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 Granted — — Exercised (114,109 ) 13.36 Forfeited — — Outstanding as of June 30, 2019 1,654,241 22.31 3.4 76,187 Options exercisable 1,550,570 $ 20.80 3.1 $ 73,764 Exercise prices of stock options outstanding as of June 30, 2019 range from $7.15 to $55.29 . At June 30, 2019 , there was $1,806 of unrecognized stock-based compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 2.3 years. Restricted Stock Units and Restricted Stock Awards Periodically, the Company grants restricted stock unit awards and performance stock units and awards to employees. 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 that dictate the number of shares to vest upon each evaluation date, which range from 50% to 150% . If these metrics are achieved, as defined in the individual grant terms, these shares would cliff vest 3 years from the grant date. The following is a summary of the activity for unvested restricted stock units and performance stock units granted under the Company’s plans: RSUs PSUs Number of Shares Weighted- Average Grant Date Fair Value per Share Number of Weighted- Outstanding as of December 31, 2018 1,461,468 $ 46.59 124,320 $ 44.64 Granted 872,104 60.94 68,510 64.32 Vested (479,479 ) 45.98 — — Forfeited (20,830 ) 48.31 (4,036 ) 61.27 Outstanding as of March 31, 2019 1,833,263 53.67 188,794 51.42 Granted 48,032 68.50 123,812 73.60 Vested (114,056 ) 47.94 (68,334 ) 31.03 Forfeited (22,074 ) 56.55 — — Outstanding as of June 30, 2019 1,745,165 $ 54.40 244,272 $ 67.78 At June 30, 2019 , there was $82,846 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 2.2 years. At June 30, 2019 , there was $17,371 of unrecognized stock-based compensation expense related to unvested performance-based restricted stock units and awards, which the Company expects to recognize over a weighted-average period of 2.7 years. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Loss before income tax provision (benefit) $ (27,769 ) $ (5,425 ) $ (42,269 ) $ (11,417 ) Income tax provision (benefit) (28,382 ) 566 (24,614 ) (13,428 ) Effective tax rate 102.2 % (10.4 )% 58.2 % 117.6 % For the three and six months ended June 30, 2019 , the Company's effective tax rate differed from the statutory rate primarily due to the release of the Company's valuation allowance of $21,907 primarily as a result of additional deferred tax liabilities recorded from the PIEtech Acquisition , the windfall from share-based compensation, federal and state research and development credits, and additional accruals for uncertain tax positions. For the three months ended June 30, 2018 , the Company's effective tax rate differed from the statutory rate primarily due to the valuation allowance the Company had placed on all US deferreds with the exception of indefinite lived intangibles, additional accruals for uncertain tax positions, the impact of clarifying Base Erosion and Anti Abuse (“BEAT”) tax positions, as well as differences between the foreign tax rates and statutory US tax rate. For the six months ended June 30, 2018 , the Company's 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 acquisition of FolioDynamix, additional accruals for uncertain tax positions as well as differences between the foreign tax rates and statutory US tax rate. 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. The Company elected to account for GILTI tax in the period in which it is incurred. The GILTI provision requires the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company expects to fully offset any GILTI income with Net Operating Losses (“NOLs”). The Company has reevaluated the entity classification of certain of its Controlled Foreign Corporations (“CFCs”); and as such, has changed the classification of its Indian entities to a flow-through status. As a result, the Company does not currently expect to be subject to BEAT. Additionally, the two Indian entities are no longer subject to GILTI. The Company's total gross liability for unrecognized tax benefits, exclusive of interest and penalties, was $18,102 and $15,628 at June 30, 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 $6,411 and $4,429 at June 30, 2019 and December 31, 2018 , respectively. At June 30, 2019 , the amount of unrecognized tax benefits, including interest and penalties, that would benefit the Company’s effective tax rate, if recognized, was $12,116 . 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 $898 and $548 of potential interest and penalties related to unrecognized tax benefits for the six months ended June 30, 2019 and 2018 , respectively. The Company had accrued interest and penalties of $6,924 and $5,977 as of June 30, 2019 and December 31, 2018 , respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 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 its convertible notes (See “ Note 9—Debt ”) 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. In the period of conversion, the convertible notes will have no impact on diluted earnings if they are settled in cash and will have an impact on dilutive earnings per share if they are settled in shares upon conversion. The following table provides the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to Envestnet, Inc.: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Basic income (loss) per share calculation: Net loss attributable to Envestnet, Inc. $ 893 $ (5,526 ) $ (17,292 ) $ 2,578 Basic number of weighted-average shares outstanding 50,870,296 45,247,331 49,526,774 44,963,735 Basic net income (loss) per share $ 0.02 $ (0.12 ) $ (0.35 ) $ 0.06 Diluted income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ 893 $ (5,526 ) $ (17,292 ) $ 2,578 Basic number of weighted-average shares outstanding 50,870,296 45,247,331 49,526,774 44,963,735 Effect of dilutive shares: Options to purchase common stock 1,164,246 — — 1,360,300 Unvested restricted stock units 662,853 — — 832,170 Convertible notes 261,075 — — — Warrants 24,218 — — — Diluted number of weighted-average shares outstanding 52,982,688 45,247,331 49,526,774 47,156,205 Diluted net income (loss) per share $ 0.02 $ (0.12 ) $ (0.35 ) $ 0.05 Securities that were anti-dilutive and therefore excluded from the computation of diluted loss per share are as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Options to purchase common stock — 2,077,874 1,654,241 9,045 Unvested restricted stock awards and units — 1,880,744 1,989,437 — Warrants — — 470,000 — Convertible Notes — 7,793,826 7,793,826 7,793,826 Total — 11,752,444 11,907,504 7,802,871 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 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 and its subsidiary, Yodlee, Inc. (“ Yodlee ”), have been named as defendants in a lawsuit filed on July 17, 2019, by FinancialApps, LLC (“ FinancialApps ”) in the United States District Court for the District of Delaware. The case caption is FinancialApps, LLC v. Envestnet Inc., et al., No. 19-cv-1337 (D. Del.). FinancialApps alleges that, after entering into a 2017 services agreement with Yodlee , Envestnet and Yodlee breached the agreement and misappropriated proprietary information to develop competing credit risk assessment software. The complaint includes claims for, among other things, misappropriation of trade secrets, fraud, tortious interference with prospective business opportunities, unfair competition, copyright infringement and breach of contract. FinancialApps is seeking significant monetary damages and various equitable and injunctive relief. An unopposed scheduling motion is pending which, if granted, would require Envestnet and Yodlee to file their responsive pleadings, including counterclaims, by September 17, 2019. The Company believes the allegations in the complaint are without merit and intends to defend the action vigorously. In addition, the Company is involved in legal proceedings arising in the ordinary course of its business. Legal fees and other costs associated with such actions are expensed as incurred. The Company will record a provision for these claims when it is both probable that a liability has been incurred and the amount of the loss, or a range of the potential loss, can be reasonably estimated. These provisions are reviewed regularly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information or events pertaining to a particular case. For litigation matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but if the matter is material, it is subject to disclosures. The Company believes that liabilities associated with any claims, while possible, are not probable, and therefore has not recorded any accrual for any claims as of June 30, 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 June 30, 2019 and December 31, 2018 , the Company estimated a sales and use tax liability of $10,989 and $8,643 , respectively, related to revenues in multiple jurisdictions. 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 $5,139 and $5,246 , respectively, related to the 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 | 6 Months Ended |
Jun. 30, 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. At inception, the Company determines if an arrangement is a lease. 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 month to 14 years. For the three and six months ended June 30, 2019 , the total operating lease cost was $4,377 and $8,495 , respectively. The Company did not have significant sublease income, short-term lease cost, or variable lease cost for the three and six months ended June 30, 2019 . As of June 30, 2019 , the weighted average remaining lease term was 8.9 years and the weighted average discount rate was 6.3% . Cash paid for amounts included in the measurement of the operating lease liability for the three and six months ended June 30, 2019 , was $4,730 and $9,386 , respectively. Future minimum lease payments under non-cancellable leases, as of June 30, 2019 , were as follows: Operating Leases Years Ending December 31, Remainder of 2019 $ 9,096 2020 17,558 2021 15,975 2022 11,850 2023 10,571 Thereafter 52,862 Total future minimum lease payments 117,912 Less imputed interest (27,563 ) Total operating lease liabilities $ 90,349 As of June 30, 2019 , the Company has several additional operating leases that have not yet commenced but will commence in 2019 with lease terms of 1 to 3 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 | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Business segments are generally organized around our business services. Our business segments are: • Envestnet Wealth Solutions – a leading provider of unified wealth management software and services to empower financial advisors and institutions. • Envestnet Data & Analytics – a leading data aggregation and data intelligence platform powering dynamic, cloud-based innovation for digital financial services. The 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 and six months ended June 30, 2019 and 2018 . See “ Note 11—Revenue ” for detail of revenues 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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Envestnet Wealth Solutions $ 12,379 $ 16,359 $ 29,223 $ 32,220 Envestnet Data & Analytics (8,960 ) (3,296 ) (16,888 ) (7,705 ) Total segment income from operations 3,419 13,063 12,335 24,515 Nonsegment operating expenses (23,676 ) (13,058 ) (41,329 ) (25,248 ) Other expense, net (7,512 ) (5,430 ) (13,275 ) (10,684 ) Consolidated loss before income tax provision (benefit) (27,769 ) (5,425 ) (42,269 ) (11,417 ) Income tax provision (benefit) (28,382 ) 566 (24,614 ) (13,428 ) Consolidated net income (loss) 613 (5,991 ) (17,655 ) 2,011 Add: Net loss attributable to non-controlling interest 280 465 363 567 Consolidated net income (loss) attributable to Envestnet, Inc. $ 893 $ (5,526 ) $ (17,292 ) $ 2,578 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: June 30, December 31, 2019 2018 Segment assets: Envestnet Wealth Solutions $ 1,279,408 $ 810,971 Envestnet Data & Analytics 532,932 502,776 Consolidated total assets $ 1,812,340 $ 1,313,747 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Segment depreciation and amortization: Envestnet Wealth Solutions $ 16,376 $ 11,026 $ 27,643 $ 22,499 Envestnet Data & Analytics 10,539 8,159 18,789 16,232 Consolidated depreciation and amortization $ 26,915 $ 19,185 $ 46,432 $ 38,731 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Segment capital expenditures: Envestnet Wealth Solutions $ 10,027 $ 8,344 $ 20,865 $ 16,536 Envestnet Data & Analytics 1,939 2,260 3,533 3,655 Consolidated capital expenditures $ 11,966 $ 10,604 $ 24,398 $ 20,191 |
Geographical Information
Geographical Information | 6 Months Ended |
Jun. 30, 2019 | |
Segments, Geographical Areas [Abstract] | |
Geographical Information | Geographical Information The following table sets forth property and equipment, net by geographic area: June 30, December 31, 2019 2018 United States $ 45,759 $ 39,412 India 3,919 3,969 Other 1,338 1,610 Total $ 51,016 $ 44,991 See “ Note 11—Revenue ” for detail of revenues by geographic area. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 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 17—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. These changes became effective for the Company's fiscal year beginning January 1, 2019. 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 early adopted this standard beginning January 1, 2019, noting that this standard will be applied prospectively. Adoption of this standard 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 entities to 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 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. In August 2018, the FASB |
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. At inception, the Company determines if an arrangement is a lease. 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) | 6 Months Ended |
Jun. 30, 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: June 30, December 31, 2019 2018 Cash and cash equivalents $ 77,717 $ 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 $ 78,043 $ 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: June 30, December 31, 2019 2018 Cash and cash equivalents $ 77,717 $ 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 $ 78,043 $ 289,671 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Summary of consideration transferred in the acquisition | The preliminary consideration transferred in the acquisition was as follows: Preliminary Estimate Cash consideration $ 299,370 Stock consideration 222,484 Less: cash acquired (6,360 ) Total estimated fair value of consideration transferred, net of cash acquired $ 515,494 The consideration transferred in the acquisition was as follows: Preliminary Estimate Cash consideration $ 11,173 Purchase consideration liability 6,240 Contingent consideration liability 7,580 Working capital adjustment 70 Total $ 25,063 The preliminary consideration transferred in the acquisition was as follows: Preliminary Estimate Cash consideration $ 17,500 Contingent consideration liability 8,300 Total $ 25,800 |
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 Cash and cash equivalents $ 6,360 Accounts receivable 3,782 Prepaid expenses and other current assets 969 Other non-current assets 4,274 Property and equipment, net 6,057 Operating lease right-of-use assets, net 1,688 Identifiable intangible assets 217,000 Goodwill 353,085 Total assets acquired 593,215 Accounts payable and accrued expenses (2,166 ) Operating lease liabilities (2,012 ) Deferred income taxes (59,643 ) Deferred revenue (7,540 ) Total liabilities assumed (71,361 ) Total net assets acquired $ 521,854 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 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 $ 13 Total liabilities assumed (1,600 ) Identifiable intangible assets 12,400 Goodwill 14,987 Total net assets acquired $ 25,800 |
Summary of intangible assets acquired, estimated useful lives and amortization method | summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows: Preliminary Estimate Estimated Useful Life in Years Amortization Method Customer list $ 9,100 10 Accelerated Proprietary technology 3,300 5 Straight-line Total $ 12,400 A summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows: Preliminary Estimate Estimated Useful Life in Years Amortization Method Customer lists $ 181,000 10-16 Accelerated Proprietary technologies 25,000 5 Straight-line Trade names 11,000 6 Straight-line Total $ 217,000 A summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows: Preliminary Estimate Estimated Useful Life in Years Amortization Method Proprietary technology $ 4,100 4 Straight-line |
Business acquisition, pro forma information | Pro forma financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place as of the beginning of 2018 . Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenues $ 228,522 $ 215,240 $ 443,275 $ 426,291 Net income (loss) attributable to Envestnet, Inc. (7,612 ) (1,661 ) (18,857 ) 5,186 Net income (loss) per share attributable to Envestnet, Inc.: Basic $ (0.15 ) $ (0.03 ) $ (0.37 ) $ 0.11 Diluted $ (0.15 ) $ (0.03 ) $ (0.37 ) $ 0.10 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 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: June 30, December 31, 2019 2018 Prepaid technology $ 9,801 $ 6,766 Advance payroll taxes and benefits 10,802 — Non-income tax receivables 8,279 6,240 Prepaid outside information services 1,989 1,515 Other 9,175 9,036 Total $ 40,046 $ 23,557 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property and equipment, net | Property and equipment consists of the following: June 30, December 31, Estimated Useful Life 2019 2018 Cost: Computer equipment and software 3 years $ 68,752 $ 64,346 Leasehold improvements Shorter of the lease term or useful life of the asset 31,482 28,191 Office furniture and fixtures 3-7 years 10,659 9,291 Office equipment and other 3-5 years 6,425 5,577 Building and building improvements 7-39 years 2,647 — Land Not applicable 940 — 120,905 107,405 Less: accumulated depreciation and amortization (69,889 ) (62,414 ) Total property and equipment, net $ 51,016 $ 44,991 Depreciation and amortization expense was as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Depreciation and amortization expense $ 6,751 $ 3,920 $ 11,117 $ 7,838 |
Internally Developed Software (
Internally Developed Software (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Capitalized Computer Software, Net [Abstract] | |
Schedule of components of internally developed software, net | Internally developed software consists of the following: June 30, December 31, Estimated Useful Life 2019 2018 Internally developed software 5 years $ 85,993 $ 70,410 Less: accumulated amortization (37,934 ) (32,201 ) Internally developed software, net $ 48,059 $ 38,209 |
Schedule of amortization expense | Amortization expense was as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Amortization expense $ 3,110 $ 1,846 $ 5,733 $ 3,539 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 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 Solutions Envestnet Data & Analytics Total Balance at December 31, 2018 $ 243,809 $ 275,293 $ 519,102 Private company acquisition — 21,448 21,448 PortfolioCenter acquisition 14,987 — 14,987 PIEtech acquisition 353,085 — 353,085 Foreign currency — 90 90 Other (26 ) — (26 ) Balance at June 30, 2019 $ 611,855 $ 296,831 $ 908,686 |
Schedule of components of intangible assets, net | Intangible assets, net consist of the following: June 30, 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 7-16 years $ 551,120 $ (121,836 ) $ 429,284 $ 361,020 $ (102,077 ) $ 258,943 Proprietary technologies 4-8 years 96,694 (41,311 ) 55,383 66,746 (36,151 ) 30,595 Trade names 2-7 years 38,490 (14,027 ) 24,463 27,990 (12,352 ) 15,638 Backlog 8 years 11,000 (10,971 ) 29 11,000 (10,935 ) 65 Total intangible assets $ 697,304 $ (188,145 ) $ 509,159 $ 466,756 $ (161,515 ) $ 305,241 |
Schedule of amortization expense | Amortization expense was as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Amortization expense $ 17,054 $ 13,419 $ 29,582 $ 27,354 |
Schedule of future amortization expense of the intangible assets | Future amortization expense of the intangible assets as of June 30, 2019 , is expected to be as follows: Years ending December 31, Remainder of 2019 $ 37,887 2020 71,524 2021 61,555 2022 57,857 2023 46,748 Thereafter 233,588 Total $ 509,159 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Schedule accrued expenses and other liabilities | Accrued expenses and other liabilities consist of the following: June 30, December 31, 2019 2018 Accrued investment manager fees $ 43,966 $ 50,635 Accrued compensation and related taxes 44,411 50,598 Sales and use tax payable 12,006 9,733 Accrued transaction costs 4,812 4,543 Accrued professional services 2,599 4,517 Other accrued expenses 10,814 13,272 Total $ 118,608 $ 133,298 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of convertible debt obligations | The Company’s outstanding debt obligations as of June 30, 2019 and December 31, 2018 were as follows: June 30, December 31, 2019 2018 Convertible Notes due 2019 $ 172,500 $ 172,500 Unaccreted discount on Convertible Notes due 2019 (2,888 ) (5,890 ) Unamortized issuance costs on Convertible Notes due 2019 (430 ) (899 ) Convertible Notes due 2019 carrying value $ 169,182 $ 165,711 Convertible Notes due 2023 $ 345,000 $ 345,000 Unaccreted discount on Convertible Notes due 2023 (38,101 ) (42,641 ) Unamortized issuance costs on Convertible Notes due 2023 (6,821 ) (7,634 ) Convertible Notes due 2023 carrying value $ 300,078 $ 294,725 Revolving credit facility balance $ 145,000 $ — |
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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Accretion of debt discount $ 3,784 $ 2,411 $ 7,542 $ 3,829 Coupon interest 2,264 1,366 4,528 2,121 Amortization of issuance costs 862 621 1,720 1,071 Interest on revolving credit facility 1,196 1,429 1,196 3,994 Undrawn and other fees 157 165 373 213 Total $ 8,263 $ 5,992 $ 15,359 $ 11,228 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2019 and December 31, 2018 , based on the three-tier fair value hierarchy: June 30, 2019 Fair Value Level I Level II Level III Assets: Money market funds and other (1) $ 40,016 $ 40,016 $ — $ — Assets to fund deferred compensation liability (2) 8,091 — — 8,091 Total assets $ 48,107 $ 40,016 $ — $ 8,091 Liabilities: Contingent consideration $ 16,423 $ — $ — $ 16,423 Deferred compensation liability (3) 7,974 7,974 — — Total liabilities $ 24,397 $ 7,974 $ — $ 16,423 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 fair market value of the deferred compensation liability is based on the daily quoted market prices for the net asset value of the various funds in which the participants have selected, and is included in other non-current liabilities in the condensed consolidated balance sheets. |
Summary of changes in the fair value of the Company's Level 3 liability | The table below presents a reconciliation of contingent consideration liabilities, 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 June 30, 2019 : Fair Value of Contingent Consideration Liabilities Balance at December 31, 2018 $ 732 Private company acquisition 7,580 PortfolioCenter acquisition 8,300 Settlement of contingent consideration liability (749 ) Accretion on contingent consideration 560 Balance at June 30, 2019 $ 16,423 |
Summary of changes in the fair value of the Company's Level 3 assets | The table below presents a reconciliation of the assets used to fund deferred the Company's deferred compensation liability, which is measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2018 to June 30, 2019 : Fair Value of Assets to Fund Deferred Compensation Liability Balance at December 31, 2018 $ 6,346 Contributions and fair value adjustments 1,745 Balance at June 30, 2019 $ 8,091 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2019 2018 Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Revenues: Asset-based $ 120,070 $ — $ 120,070 $ 118,111 $ — $ 118,111 Subscription-based 50,078 42,180 92,258 33,023 38,756 71,779 Total recurring revenues 170,148 42,180 212,328 151,134 38,756 189,890 Professional services and other revenues 6,742 5,375 12,117 5,794 5,432 11,226 Total revenues $ 176,890 $ 47,555 $ 224,445 $ 156,928 $ 44,188 $ 201,116 Six Months Ended June 30, 2019 2018 Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Revenues: Asset-based $ 229,004 $ — $ 229,004 $ 239,264 $ — $ 239,264 Subscription-based 91,104 84,241 175,345 65,608 75,866 141,474 Total recurring revenues 320,108 84,241 404,349 304,872 75,866 380,738 Professional services and other revenues 9,487 10,275 19,762 8,044 10,345 18,389 Total revenues $ 329,595 $ 94,516 $ 424,111 $ 312,916 $ 86,211 $ 399,127 |
Summary of revenues from major customers | One customer accounted for more than 10% of the Company’s total revenues: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Fidelity 15 % 16 % 15 % 16 % |
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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 United States $ 217,462 $ 193,237 $ 409,581 $ 381,552 International (1) 6,983 7,879 14,530 17,575 Total $ 224,445 $ 201,116 $ 424,111 $ 399,127 (1) No foreign country accounted for more than 10% of the Company's total revenues. |
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 June 30, 2019 : Years ending December 31, Remainder of 2019 $ 122,303 2020 171,252 2021 106,389 2022 70,046 2023 32,354 Thereafter 41,237 Total $ 543,581 |
Cost of Revenues (Tables)
Cost of Revenues (Tables) | 6 Months Ended |
Jun. 30, 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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Asset-based $ 60,293 $ 56,748 $ 114,135 $ 114,320 Subscription-based 6,697 6,213 14,374 11,439 Professional services and other 5,090 4,666 5,216 4,802 Total $ 72,080 $ 67,627 $ 133,725 $ 130,561 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | Stock-based compensation expense under the Company’s plans was as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Stock-based compensation expense $ 13,434 $ 10,476 $ 26,298 $ 18,971 Tax effect on stock-based compensation expense (3,504 ) (2,650 ) (6,859 ) (4,800 ) Net effect on income $ 9,930 $ 7,826 $ 19,439 $ 14,171 |
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 Six Months Ended June 30, June 30, 2019 2018 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 Granted — — Exercised (114,109 ) 13.36 Forfeited — — Outstanding as of June 30, 2019 1,654,241 22.31 3.4 76,187 Options exercisable 1,550,570 $ 20.80 3.1 $ 73,764 |
Summary of the activity for unvested restricted stock units and awards granted under the Company's plans | The following is a summary of the activity for unvested restricted stock units and performance stock units granted under the Company’s plans: RSUs PSUs Number of Shares Weighted- Average Grant Date Fair Value per Share Number of Weighted- Outstanding as of December 31, 2018 1,461,468 $ 46.59 124,320 $ 44.64 Granted 872,104 60.94 68,510 64.32 Vested (479,479 ) 45.98 — — Forfeited (20,830 ) 48.31 (4,036 ) 61.27 Outstanding as of March 31, 2019 1,833,263 53.67 188,794 51.42 Granted 48,032 68.50 123,812 73.60 Vested (114,056 ) 47.94 (68,334 ) 31.03 Forfeited (22,074 ) 56.55 — — Outstanding as of June 30, 2019 1,745,165 $ 54.40 244,272 $ 67.78 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Loss before income tax provision (benefit) $ (27,769 ) $ (5,425 ) $ (42,269 ) $ (11,417 ) Income tax provision (benefit) (28,382 ) 566 (24,614 ) (13,428 ) Effective tax rate 102.2 % (10.4 )% 58.2 % 117.6 % |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 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 income (loss) per share attributable to Envestnet, Inc.: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Basic income (loss) per share calculation: Net loss attributable to Envestnet, Inc. $ 893 $ (5,526 ) $ (17,292 ) $ 2,578 Basic number of weighted-average shares outstanding 50,870,296 45,247,331 49,526,774 44,963,735 Basic net income (loss) per share $ 0.02 $ (0.12 ) $ (0.35 ) $ 0.06 Diluted income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ 893 $ (5,526 ) $ (17,292 ) $ 2,578 Basic number of weighted-average shares outstanding 50,870,296 45,247,331 49,526,774 44,963,735 Effect of dilutive shares: Options to purchase common stock 1,164,246 — — 1,360,300 Unvested restricted stock units 662,853 — — 832,170 Convertible notes 261,075 — — — Warrants 24,218 — — — Diluted number of weighted-average shares outstanding 52,982,688 45,247,331 49,526,774 47,156,205 Diluted net income (loss) per share $ 0.02 $ (0.12 ) $ (0.35 ) $ 0.05 |
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 Six Months Ended June 30, June 30, 2019 2018 2019 2018 Options to purchase common stock — 2,077,874 1,654,241 9,045 Unvested restricted stock awards and units — 1,880,744 1,989,437 — Warrants — — 470,000 — Convertible Notes — 7,793,826 7,793,826 7,793,826 Total — 11,752,444 11,907,504 7,802,871 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lease, cost | |
Lessee, operating lease, liability, maturity | Future minimum lease payments under non-cancellable leases, as of June 30, 2019 , were as follows: Operating Leases Years Ending December 31, Remainder of 2019 $ 9,096 2020 17,558 2021 15,975 2022 11,850 2023 10,571 Thereafter 52,862 Total future minimum lease payments 117,912 Less imputed interest (27,563 ) Total operating lease liabilities $ 90,349 |
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) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of income (loss) from operations by segment | The following table presents a reconciliation from income (loss) from operations by segment to condensed consolidated net income (loss) attributable to Envestnet, Inc.: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Envestnet Wealth Solutions $ 12,379 $ 16,359 $ 29,223 $ 32,220 Envestnet Data & Analytics (8,960 ) (3,296 ) (16,888 ) (7,705 ) Total segment income from operations 3,419 13,063 12,335 24,515 Nonsegment operating expenses (23,676 ) (13,058 ) (41,329 ) (25,248 ) Other expense, net (7,512 ) (5,430 ) (13,275 ) (10,684 ) Consolidated loss before income tax provision (benefit) (27,769 ) (5,425 ) (42,269 ) (11,417 ) Income tax provision (benefit) (28,382 ) 566 (24,614 ) (13,428 ) Consolidated net income (loss) 613 (5,991 ) (17,655 ) 2,011 Add: Net loss attributable to non-controlling interest 280 465 363 567 Consolidated net income (loss) attributable to Envestnet, Inc. $ 893 $ (5,526 ) $ (17,292 ) $ 2,578 |
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: June 30, December 31, 2019 2018 Segment assets: Envestnet Wealth Solutions $ 1,279,408 $ 810,971 Envestnet Data & Analytics 532,932 502,776 Consolidated total assets $ 1,812,340 $ 1,313,747 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Segment depreciation and amortization: Envestnet Wealth Solutions $ 16,376 $ 11,026 $ 27,643 $ 22,499 Envestnet Data & Analytics 10,539 8,159 18,789 16,232 Consolidated depreciation and amortization $ 26,915 $ 19,185 $ 46,432 $ 38,731 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Segment capital expenditures: Envestnet Wealth Solutions $ 10,027 $ 8,344 $ 20,865 $ 16,536 Envestnet Data & Analytics 1,939 2,260 3,533 3,655 Consolidated capital expenditures $ 11,966 $ 10,604 $ 24,398 $ 20,191 |
Geographical Information (Table
Geographical Information (Tables) | 6 Months Ended |
Jun. 30, 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: June 30, December 31, 2019 2018 United States $ 45,759 $ 39,412 India 3,919 3,969 Other 1,338 1,610 Total $ 51,016 $ 44,991 |
Organization and Description _2
Organization and Description of Business (Details) proprietary_product in Thousands | 6 Months Ended |
Jun. 30, 2019stateadvisoraccount_productproprietary_productsegmentinvestment_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 | 19,900 |
Envestnet Portfolio Management Consultants (“PMC”) | |
Products and Services [Line Items] | |
Number of third party managed account products and portfolio | account_product | 4,500 |
Number of proprietary products | proprietary_product | 1 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | $ 77,717 | $ 289,345 | ||
Total cash, cash equivalents and restricted cash | 78,043 | 289,671 | $ 134,260 | $ 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) - USD ($) $ in Thousands | Apr. 01, 2019 | Jan. 02, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Business Acquisition [Line Items] | ||||||
Amortization of intangible assets | $ 17,054 | $ 13,419 | $ 29,582 | $ 27,354 | ||
Private Company Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration liability | $ 7,580 | |||||
Cash consideration | $ 11,173 | |||||
PortfolioCenter Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration liability | $ 8,300 | |||||
Cash consideration | $ 17,500 | |||||
Revenue of acquiree since acquisition date, actual | 2,017 | 2,017 | ||||
Earnings (loss) of acquiree since acquisition date, actual | (1,624) | (1,624) | ||||
Amortization of intangible assets | $ 514 | $ 514 |
Business Acquisitions (Details)
Business Acquisitions (Details) - USD ($) $ in Thousands | May 01, 2019 | Apr. 01, 2019 | Jan. 02, 2019 |
Private Company Acquisition | |||
Consideration transferred in acquisition | |||
Cash consideration | $ 11,173 | ||
Purchase consideration liability | 6,240 | ||
Contingent consideration liability | 7,580 | ||
Working capital adjustment | 70 | ||
Total | $ 25,063 | ||
PortfolioCenter Acquisition | |||
Consideration transferred in acquisition | |||
Cash consideration | $ 17,500 | ||
Contingent consideration liability | 8,300 | ||
Total | $ 25,800 | ||
PIEtech Acquisition | |||
Consideration transferred in acquisition | |||
Cash consideration | $ 299,370 | ||
Stock consideration | 222,484 | ||
Less: cash acquired | (6,360) | ||
Total | $ 515,494 |
Business Acquisitions (Estimate
Business Acquisitions (Estimated Intangible Assets Acquired) (Details) - USD ($) $ in Thousands | May 01, 2019 | Apr. 01, 2019 | Jan. 02, 2019 |
PortfolioCenter Acquisition | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired, amount | $ 12,400 | ||
PIEtech Acquisition | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired, amount | $ 217,000 | ||
Customer list | PortfolioCenter Acquisition | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired, amount | $ 9,100 | ||
Useful life in years | 10 years | ||
Customer list | PIEtech Acquisition | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired, amount | 181,000 | ||
Proprietary technology | Private Company Acquisition | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired, amount | $ 4,100 | ||
Useful life in years | 4 years | ||
Proprietary technology | PortfolioCenter Acquisition | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired, amount | $ 3,300 | ||
Useful life in years | 5 years | ||
Proprietary technology | PIEtech Acquisition | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired, amount | $ 25,000 | ||
Useful life in years | 5 years | ||
Trade names | PIEtech Acquisition | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired, amount | $ 11,000 | ||
Useful life in years | 6 years | ||
Minimum | Customer list | PIEtech Acquisition | |||
Business Acquisition [Line Items] | |||
Useful life in years | 10 years | ||
Maximum | Customer list | PIEtech Acquisition | |||
Business Acquisition [Line Items] | |||
Useful life in years | 16 years |
Business Acquisitions (Assets A
Business Acquisitions (Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | May 01, 2019 | Apr. 01, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 908,686 | $ 519,102 | |||
Private Company Acquisition | |||||
Business Acquisition [Line Items] | |||||
Total tangible assets acquired | $ 144 | ||||
Identifiable intangible assets | 4,100 | ||||
Goodwill | 21,448 | ||||
Total liabilities assumed | (629) | ||||
Total net assets acquired | $ 25,063 | ||||
PortfolioCenter Acquisition | |||||
Business Acquisition [Line Items] | |||||
Total tangible assets acquired | $ 13 | ||||
Identifiable intangible assets | 12,400 | ||||
Goodwill | 14,987 | ||||
Total liabilities assumed | (1,600) | ||||
Total net assets acquired | $ 25,800 | ||||
PIEtech Acquisition | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 6,360 | ||||
Accounts receivable | 3,782 | ||||
Prepaid expenses and other current assets | 969 | ||||
Other non-current assets | 4,274 | ||||
Property and equipment, net | 6,057 | ||||
Operating lease right-of-use assets, net | 1,688 | ||||
Identifiable intangible assets | 217,000 | ||||
Goodwill | 353,085 | ||||
Total assets acquired | 593,215 | ||||
Accounts payable and accrued expenses | (2,166) | ||||
Operating lease liabilities | (2,012) | ||||
Deferred income taxes | (59,643) | ||||
Deferred revenue | (7,540) | ||||
Total liabilities assumed | (71,361) | ||||
Total net assets acquired | $ 521,854 |
Business Acquisitions (Narrat_2
Business Acquisitions (Narrative - PIEtech Acquisition) (Details) $ / shares in Units, $ in Thousands | May 01, 2019USD ($)executive$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / shares | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)$ / shares | Jun. 30, 2018USD ($) | Dec. 31, 2018$ / shares |
Business Acquisition [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.005 | $ 0.005 | $ 0.005 | $ 0.005 | |||
Amortization of intangible assets | $ 17,054 | $ 13,419 | $ 29,582 | $ 27,354 | |||
PIEtech Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Cash consideration | $ 299,370 | ||||||
Equity interest issued or issuable (in shares) | shares | 3,184,713 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.005 | ||||||
Accrued bonuses | $ 30,000 | ||||||
Payment of one-time retention bonuses | 1,480 | ||||||
Expected cash bonuses to be paid in the next three years | $ 5,300 | 5,300 | 5,300 | ||||
Membership interest granted, number of executives | executive | 2 | ||||||
Fair value, membership interest to be granted | $ 8,900 | ||||||
Revenue of acquiree since acquisition date, actual | 6,632 | 6,632 | |||||
Earnings (loss) of acquiree since acquisition date, actual | (3,422) | (3,422) | |||||
Amortization of intangible assets | 4,142 | 4,142 | |||||
Acquisition related costs | $ 11,269 | $ 16,189 | |||||
Equity Plan | PIEtech Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Payment of one-time retention bonuses | $ 8,800 | ||||||
Restricted Stock Units and Performance Stock Units | Equity Plan | PIEtech Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Shares to be granted anniversary date | 60 days | ||||||
Number of shares authorized (in shares) | shares | 301,469 | ||||||
Number of additional shares authorized (in shares) | shares | 214,000 | ||||||
Restricted Stock Units (RSUs) | Equity Plan | PIEtech Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Shares issued in period (in shares) | shares | 62,200 | ||||||
Performance Shares | Equity Plan | PIEtech Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Shares issued in period (in shares) | shares | 24,900 |
Business Acquisitions (Pro Form
Business Acquisitions (Pro Forma Information) (Details) - Envestnet, PortfolioCenter and PIEtech - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Acquisition [Line Items] | ||||
Revenues | $ 228,522 | $ 215,240 | $ 443,275 | $ 426,291 |
Net income (loss) attributable to Envestnet, Inc. | $ (7,612) | $ (1,661) | $ (18,857) | $ 5,186 |
Net income (loss) per share attributable to Envestnet, Inc.: | ||||
Basic (in dollars per share) | $ (0.15) | $ (0.03) | $ (0.37) | $ 0.11 |
Diluted (in dollars per share) | $ (0.15) | $ (0.03) | $ (0.37) | $ 0.10 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid technology | $ 9,801 | $ 6,766 |
Advance payroll taxes and benefits | 10,802 | 0 |
Non-income tax receivables | 8,279 | 6,240 |
Prepaid outside information services | 1,989 | 1,515 |
Other | 9,175 | 9,036 |
Total prepaid expenses and other current assets | $ 40,046 | $ 23,557 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Property and equipment, cost: | |||||
Property and equipment, gross | $ 120,905 | $ 120,905 | $ 107,405 | ||
Less: accumulated depreciation and amortization | (69,889) | (69,889) | (62,414) | ||
Total property and equipment, net | 51,016 | 51,016 | 44,991 | ||
Depreciation and amortization expense | 6,751 | $ 3,920 | 11,117 | $ 7,838 | |
Envestnet Wealth Solutions | |||||
Property and equipment, cost: | |||||
Cost written off | 2,396 | 1,126 | 3,642 | 3,337 | |
Envestnet Data and Analytics | |||||
Property and equipment, cost: | |||||
Cost written off | 1,640 | $ 2,525 | $ 4,121 | $ 3,401 | |
Computer equipment and software | |||||
Property and equipment, cost: | |||||
Estimated Useful Life | 3 years | ||||
Property and equipment, gross | 68,752 | $ 68,752 | 64,346 | ||
Leasehold improvements | |||||
Property and equipment, cost: | |||||
Property and equipment, gross | 31,482 | 31,482 | 28,191 | ||
Office furniture and fixtures | |||||
Property and equipment, cost: | |||||
Property and equipment, gross | 10,659 | $ 10,659 | 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 | ||||
Office equipment and other | |||||
Property and equipment, cost: | |||||
Property and equipment, gross | 6,425 | $ 6,425 | 5,577 | ||
Office equipment and other | Minimum | |||||
Property and equipment, cost: | |||||
Estimated Useful Life | 3 years | ||||
Office equipment and other | Maximum | |||||
Property and equipment, cost: | |||||
Estimated Useful Life | 5 years | ||||
Building and building improvements | |||||
Property and equipment, cost: | |||||
Property and equipment, gross | 2,647 | $ 2,647 | 0 | ||
Building and building improvements | Minimum | |||||
Property and equipment, cost: | |||||
Estimated Useful Life | 7 years | ||||
Building and building improvements | Maximum | |||||
Property and equipment, cost: | |||||
Estimated Useful Life | 39 years | ||||
Land | |||||
Property and equipment, cost: | |||||
Property and equipment, gross | $ 940 | $ 940 | $ 0 |
Internally Developed Software_2
Internally Developed Software (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||||
Internally developed software | $ 85,993 | $ 85,993 | $ 70,410 | ||
Less: accumulated amortization | (37,934) | (37,934) | (32,201) | ||
Internally developed software, net | 48,059 | 48,059 | $ 38,209 | ||
Amortization expense | $ 3,110 | $ 1,846 | $ 5,733 | $ 3,539 | |
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 | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Changes in the carrying amount of the Company's goodwill | |||||
Balance at period start | $ 519,102 | ||||
Foreign currency | 90 | ||||
Other | (26) | ||||
Balance at period end | $ 908,686 | 908,686 | |||
Gross Carrying Amount | 697,304 | 697,304 | $ 466,756 | ||
Accumulated Amortization | (188,145) | (188,145) | (161,515) | ||
Net Carrying Amount | 509,159 | 509,159 | 305,241 | ||
Amortization expense | 17,054 | $ 13,419 | 29,582 | $ 27,354 | |
Customer list | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Gross Carrying Amount | 551,120 | 551,120 | 361,020 | ||
Accumulated Amortization | (121,836) | (121,836) | (102,077) | ||
Net Carrying Amount | 429,284 | $ 429,284 | 258,943 | ||
Customer list | Maximum | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Estimated Useful Life | 16 years | ||||
Customer list | Minimum | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Estimated Useful Life | 7 years | ||||
Proprietary technology | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Gross Carrying Amount | 96,694 | $ 96,694 | 66,746 | ||
Accumulated Amortization | (41,311) | (41,311) | (36,151) | ||
Net Carrying Amount | 55,383 | $ 55,383 | 30,595 | ||
Proprietary technology | Maximum | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Estimated Useful Life | 8 years | ||||
Proprietary technology | Minimum | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Estimated Useful Life | 4 years | ||||
Trade names | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Gross Carrying Amount | 38,490 | $ 38,490 | 27,990 | ||
Accumulated Amortization | (14,027) | (14,027) | (12,352) | ||
Net Carrying Amount | 24,463 | $ 24,463 | 15,638 | ||
Trade names | Maximum | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Estimated Useful Life | 7 years | ||||
Trade names | 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 | 11,000 | ||
Accumulated Amortization | (10,971) | (10,971) | (10,935) | ||
Net Carrying Amount | 29 | 29 | $ 65 | ||
Envestnet Wealth Solutions | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Balance at period start | 243,809 | ||||
Foreign currency | 0 | ||||
Other | (26) | ||||
Balance at period end | 611,855 | 611,855 | |||
Envestnet Data and Analytics | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Balance at period start | 275,293 | ||||
Foreign currency | 90 | ||||
Other | 0 | ||||
Balance at period end | 296,831 | 296,831 | |||
Private Company Acquisition | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Acquisitions | 21,448 | ||||
Private Company Acquisition | Envestnet Wealth Solutions | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Acquisitions | 0 | ||||
Private Company Acquisition | Envestnet Data and Analytics | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Acquisitions | 21,448 | ||||
PortfolioCenter Acquisition | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Acquisitions | 14,987 | ||||
Amortization expense | 514 | 514 | |||
PortfolioCenter Acquisition | Envestnet Wealth Solutions | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Acquisitions | 14,987 | ||||
PortfolioCenter Acquisition | Envestnet Data and Analytics | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Acquisitions | 0 | ||||
PIEtech Acquisition | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Acquisitions | 353,085 | ||||
Amortization expense | $ 4,142 | 4,142 | |||
PIEtech Acquisition | Envestnet Wealth Solutions | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Acquisitions | 353,085 | ||||
PIEtech Acquisition | Envestnet Data and Analytics | |||||
Changes in the carrying amount of the Company's goodwill | |||||
Acquisitions | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net (Future Expense) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Future amortization expense of the intangible assets | ||
Remainder of 2019 | $ 37,887 | |
2020 | 71,524 | |
2021 | 61,555 | |
2022 | 57,857 | |
2023 | 46,748 | |
Thereafter | 233,588 | |
Total | $ 509,159 | $ 305,241 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Components of accrued expenses | ||
Accrued investment manager fees | $ 43,966 | $ 50,635 |
Accrued compensation and related taxes | 44,411 | 50,598 |
Sales and use tax payable | 12,006 | 9,733 |
Accrued transaction costs | 4,812 | 4,543 |
Accrued professional services | 2,599 | 4,517 |
Other accrued expenses | 10,814 | 13,272 |
Total accrued expenses | $ 118,608 | $ 133,298 |
Debt (Summary) (Details)
Debt (Summary) (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2014 |
Convertible Notes due 2019 | |||
Outstanding debt obligations | |||
Face amount | $ 172,500,000 | $ 172,500,000 | $ 172,500,000 |
Unaccreted discount on Convertible Notes | (2,888,000) | (5,890,000) | |
Unamortized issuance costs on Convertible Notes | (430,000) | (899,000) | |
Convertible Notes carrying value | 169,182,000 | 165,711,000 | |
Convertible Notes due 2023 | |||
Outstanding debt obligations | |||
Face amount | 345,000,000 | 345,000,000 | |
Unaccreted discount on Convertible Notes | (38,101,000) | (42,641,000) | |
Unamortized issuance costs on Convertible Notes | (6,821,000) | (7,634,000) | |
Convertible Notes carrying value | 300,078,000 | 294,725,000 | |
Credit Agreement | |||
Outstanding debt obligations | |||
Revolving credit facility balance | $ 145,000,000 | $ 0 |
Debt (Interest) (Details)
Debt (Interest) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Interest Expense, Debt [Abstract] | ||||
Total | $ 9,896 | $ 5,630 | ||
Convertible Notes Credit And Amended And Restated Credit Agreements | ||||
Interest Expense, Debt [Abstract] | ||||
Accretion of debt discount | $ 3,784 | $ 2,411 | 7,542 | 3,829 |
Coupon interest | 2,264 | 1,366 | 4,528 | 2,121 |
Amortization of issuance costs | 862 | 621 | 1,720 | 1,071 |
Interest on revolving credit facility | 1,196 | 1,429 | 1,196 | 3,994 |
Undrawn and other fees | 157 | 165 | 373 | 213 |
Total | $ 8,263 | $ 5,992 | $ 15,359 | $ 11,228 |
Debt (Convertible) (Details)
Debt (Convertible) (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | May 31, 2018 | Dec. 31, 2014 |
Convertible Notes due 2019 | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 172,500,000 | $ 172,500,000 | $ 172,500,000 | ||
Interest rate (as a percent) | 1.75% | ||||
Effective interest rate (as a percent) | 6.00% | 6.00% | |||
Convertible notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 345,000,000 | ||||
Interest rate (as a percent) | 1.75% | ||||
Effective interest rate (as a percent) | 6.00% |
Debt (Credit Agreement) (Detail
Debt (Credit Agreement) (Details) - Second Amended and Restated Credit Agreement - USD ($) | 6 Months Ended | |
Jun. 30, 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% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring Basis - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Level 1 | ||
Assets | ||
Assets to fund deferred compensation liability | $ 0 | $ 0 |
Total assets | 40,016 | 265,554 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Deferred compensation liability | 7,974 | 6,196 |
Total liabilities | 7,974 | 6,196 |
Level 1 | Money Market Funds | ||
Assets | ||
Money market funds | 40,016 | 265,554 |
Level 2 | ||
Assets | ||
Assets to fund deferred compensation liability | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Deferred compensation liability | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | Money Market Funds | ||
Assets | ||
Money market funds | 0 | 0 |
Level 3 | ||
Assets | ||
Assets to fund deferred compensation liability | 8,091 | 6,346 |
Total assets | 8,091 | 6,346 |
Liabilities | ||
Contingent consideration | 16,423 | 732 |
Deferred compensation liability | 0 | 0 |
Total liabilities | 16,423 | 732 |
Level 3 | Money Market Funds | ||
Assets | ||
Money market funds | 0 | 0 |
Fair Value | ||
Assets | ||
Assets to fund deferred compensation liability | 8,091 | 6,346 |
Total assets | 48,107 | 271,900 |
Liabilities | ||
Contingent consideration | 16,423 | 732 |
Deferred compensation liability | 7,974 | 6,196 |
Total liabilities | 24,397 | 6,928 |
Fair Value | Money Market Funds | ||
Assets | ||
Money market funds | $ 40,016 | $ 265,554 |
Fair Value Measurements (Level
Fair Value Measurements (Level III) (Details) - Recurring Basis $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Changes in the fair value of Contingent Consideration Liabilities | |
Balance | $ 732 |
Settlement of contingent consideration liability | (749) |
Accretion on contingent consideration | 560 |
Balance | 16,423 |
Reconciliation of assets to fund deferred compensation liability | |
Balance | 6,346 |
Contributions and fair value adjustments | 1,745 |
Balance | 8,091 |
Private Company Acquisition | |
Changes in the fair value of Contingent Consideration Liabilities | |
Payment of contingent consideration liability | 7,580 |
PortfolioCenter Acquisition | |
Changes in the fair value of Contingent Consideration Liabilities | |
Payment of contingent consideration liability | $ 8,300 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | May 25, 2018 | Dec. 15, 2014 |
Fair Value Measurements | ||||
Convertible Notes due 2023 | $ 300,078,000 | $ 294,725,000 | ||
2019 Convertible Notes | ||||
Fair Value Measurements | ||||
Face amount | $ 172,500,000 | |||
Debt instrument, fair value disclosure | 193,983,000 | 174,101,000 | ||
2023 Convertible Notes | ||||
Fair Value Measurements | ||||
Face amount | $ 345,000,000 | |||
Debt instrument, fair value disclosure | 411,896,000 | 339,024,000 | ||
Second Amended and Restated Credit Agreement | ||||
Fair Value Measurements | ||||
Revolving credit facility balance | 145,000,000 | 0 | ||
Carrying Value | 2019 Convertible Notes | ||||
Fair Value Measurements | ||||
Convertible Notes due 2023 | 169,182,000 | 165,711,000 | ||
Carrying Value | 2023 Convertible Notes | ||||
Fair Value Measurements | ||||
Convertible Notes due 2023 | $ 300,078,000 | $ 294,725,000 |
Revenue (Disaggregation) (Detai
Revenue (Disaggregation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 224,445 | $ 201,116 | $ 424,111 | $ 399,127 |
United States | ||||
Revenues: | ||||
Total revenues | 217,462 | 193,237 | 409,581 | 381,552 |
International | ||||
Revenues: | ||||
Total revenues | 6,983 | 7,879 | 14,530 | 17,575 |
Recurring | ||||
Revenues: | ||||
Total revenues | 212,328 | 189,890 | 404,349 | 380,738 |
Asset-based | ||||
Revenues: | ||||
Total revenues | 120,070 | 118,111 | 229,004 | 239,264 |
Subscription-based | ||||
Revenues: | ||||
Total revenues | 92,258 | 71,779 | 175,345 | 141,474 |
Professional services and other revenues | ||||
Revenues: | ||||
Total revenues | 12,117 | 11,226 | 19,762 | 18,389 |
Envestnet Wealth Solutions | ||||
Revenues: | ||||
Total revenues | 176,890 | 156,928 | 329,595 | 312,916 |
Envestnet Wealth Solutions | Recurring | ||||
Revenues: | ||||
Total revenues | 170,148 | 151,134 | 320,108 | 304,872 |
Envestnet Wealth Solutions | Asset-based | ||||
Revenues: | ||||
Total revenues | 120,070 | 118,111 | 229,004 | 239,264 |
Envestnet Wealth Solutions | Subscription-based | ||||
Revenues: | ||||
Total revenues | 50,078 | 33,023 | 91,104 | 65,608 |
Envestnet Wealth Solutions | Professional services and other revenues | ||||
Revenues: | ||||
Total revenues | 6,742 | 5,794 | 9,487 | 8,044 |
Envestnet Data and Analytics | ||||
Revenues: | ||||
Total revenues | 47,555 | 44,188 | 94,516 | 86,211 |
Envestnet Data and Analytics | Recurring | ||||
Revenues: | ||||
Total revenues | 42,180 | 38,756 | 84,241 | 75,866 |
Envestnet Data and Analytics | Asset-based | ||||
Revenues: | ||||
Total revenues | 0 | 0 | 0 | 0 |
Envestnet Data and Analytics | Subscription-based | ||||
Revenues: | ||||
Total revenues | 42,180 | 38,756 | 84,241 | 75,866 |
Envestnet Data and Analytics | Professional services and other revenues | ||||
Revenues: | ||||
Total revenues | $ 5,375 | $ 5,432 | $ 10,275 | $ 10,345 |
Revenue (Major Customers) (Deta
Revenue (Major Customers) (Details) - Revenue from contract with customer benchmark - Customer concentration risk - Fidelity | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Major Customers | ||||
Revenue as a percentage of the company's total | 15.00% | 16.00% | 15.00% | 16.00% |
Envestnet Wealth Solutions | ||||
Major Customers | ||||
Revenue as a percentage of the company's total | 19.00% | 21.00% | 20.00% | 21.00% |
Revenue (Obligation) (Details)
Revenue (Obligation) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Total | $ 543,581 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 122,303 |
Remaining Performance Obligations | |
Revenue recognition period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 171,252 |
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 | $ 106,389 |
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 | $ 70,046 |
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 | $ 41,237 |
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 | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | ||||
Increase (decrease) in contract with customer liability | $ 13,362 | |||
Recognized deferred revenue | $ 6,865 | $ 5,737 | 16,588 | $ 13,253 |
Deferred sales incentive compensation | 9,598 | 7,014 | 9,598 | 7,014 |
Amortization expense for the deferred sales incentive compensation | $ 753 | $ 536 | $ 1,404 | $ 1,018 |
Cost of Revenues (Details)
Cost of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Cost of revenues | $ 72,080 | $ 67,627 | $ 133,725 | $ 130,561 |
Asset-based | ||||
Cost of revenues | 60,293 | 56,748 | 114,135 | 114,320 |
Subscription-based | ||||
Cost of revenues | 6,697 | 6,213 | 14,374 | 11,439 |
Professional services and other revenues | ||||
Cost of revenues | $ 5,090 | $ 4,666 | $ 5,216 | $ 4,802 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - shares | 2 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | May 01, 2019 | |
Stock-Based compensation | ||||||
Maximum number of shares available for future issuance (in shares) | 2,233,604 | 2,233,604 | 2,233,604 | |||
Statutory rate (as a percent) | 26.10% | 25.30% | 25.30% | 25.30% | ||
PIEtech Acquisition | Restricted Stock Units and Performance Stock Units | Equity Plan | ||||||
Stock-Based compensation | ||||||
Number of shares authorized (in shares) | 301,469 | |||||
Minimum | PIEtech Acquisition | Restricted Stock Units and Performance Stock Units | Equity Plan | ||||||
Stock-Based compensation | ||||||
Vesting period | 3 years | |||||
Maximum | PIEtech Acquisition | Restricted Stock Units and Performance Stock Units | Equity Plan | ||||||
Stock-Based compensation | ||||||
Vesting period | 5 years |
Stock-Based Compensation (Expen
Stock-Based Compensation (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Summary of employee stock-based compensation expense | ||||
Stock-based compensation expense | $ 13,434 | $ 10,476 | $ 26,298 | $ 18,971 |
Tax effect on stock-based compensation expense | (3,504) | (2,650) | (6,859) | (4,800) |
Net effect on income | $ 9,930 | $ 7,826 | $ 19,439 | $ 14,171 |
Stock-Based Compensation (Assum
Stock-Based Compensation (Assumptions) (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Summary of weighted average assumptions used to value options granted | ||||
Grant date fair value of options (in dollars per share) | $ 0 | $ 0 | $ 21.55 | $ 0 |
Volatility (as a percent) | 0.00% | 0.00% | 40.00% | 0.00% |
Risk-free interest rate (as a percent) | 0.00% | 0.00% | 2.50% | 0.00% |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Expected term (in years) | 0 years | 0 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 | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Options | ||||
Outstanding at the beginning of the period (in shares) | 1,768,350 | 1,887,969 | 1,887,969 | |
Granted (in shares) | 0 | 81,807 | ||
Exercised (in shares) | (114,109) | (200,326) | ||
Forfeited (in shares) | 0 | (1,100) | ||
Outstanding at the end of the period (in shares) | 1,654,241 | 1,768,350 | 1,654,241 | 1,887,969 |
Options exercisable (in shares) | 1,550,570 | 1,550,570 | ||
Weighted-Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 21.74 | $ 20.05 | $ 20.05 | |
Granted (in dollars per share) | 0 | 49.02 | ||
Exercised (in dollars per share) | 13.36 | 16.91 | ||
Forfeited (in dollars per share) | 0 | 31.70 | ||
Outstanding at the end of the period (in dollars per share) | 22.31 | $ 21.74 | 22.31 | $ 20.05 |
Options exercisable (in dollars per share) | $ 20.80 | $ 20.80 | ||
Weighted-Average Remaining Contractual Life | ||||
Outstanding | 3 years 6 months | 3 years 4 months 24 days | 3 years 4 months 24 days | |
Options exercisable | 3 years 1 month 6 days | |||
Aggregate Intrinsic Value | ||||
Outstanding (in dollars) | $ 76,187 | $ 77,197 | $ 76,187 | $ 56,046 |
Options exercisable (in dollars) | 73,764 | 73,764 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||
Unrecognized stock-based compensation expense related to unvested stock options | $ 1,806 | $ 1,806 | ||
Unrecognized compensation expense weighted-average recognition period | 2 years 3 months 18 days | |||
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 | $ 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 | $ 55.29 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019USD ($)$ / sharesshares | Mar. 31, 2019$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | |
Performance Shares | |||
Number of Shares | |||
Balance at the beginning of the period (in shares) | shares | 188,794 | 124,320 | 124,320 |
Granted (in shares) | shares | 123,812 | 68,510 | |
Vested (in shares) | shares | (68,334) | 0 | |
Forfeited (in shares) | shares | 0 | (4,036) | |
Balance at the end of the period (in shares) | shares | 244,272 | 188,794 | 244,272 |
Weighted-Average Grant Date Fair Value per Share | |||
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 51.42 | $ 44.64 | $ 44.64 |
Granted (in dollars per share) | $ / shares | 73.60 | 64.32 | |
Vested (in dollars per share) | $ / shares | 31.03 | 0 | |
Forfeited (in dollars per share) | $ / shares | 0 | 61.27 | |
Balance at the end of the period (in dollars per share) | $ / shares | $ 67.78 | $ 51.42 | $ 67.78 |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Vesting period | 3 years | ||
Unrecognized compensation expense related to shares | $ | $ 17,371 | $ 17,371 | |
Unrecognized compensation expense weighted-average recognition period | 2 years 8 months 12 days | ||
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% | 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% | 150.00% | |
Restricted Stock Units (RSUs) | |||
Number of Shares | |||
Balance at the beginning of the period (in shares) | shares | 1,833,263 | 1,461,468 | 1,461,468 |
Granted (in shares) | shares | 48,032 | 872,104 | |
Vested (in shares) | shares | (114,056) | (479,479) | |
Forfeited (in shares) | shares | (22,074) | (20,830) | |
Balance at the end of the period (in shares) | shares | 1,745,165 | 1,833,263 | 1,745,165 |
Weighted-Average Grant Date Fair Value per Share | |||
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 53.67 | $ 46.59 | $ 46.59 |
Granted (in dollars per share) | $ / shares | 68.50 | 60.94 | |
Vested (in dollars per share) | $ / shares | 47.94 | 45.98 | |
Forfeited (in dollars per share) | $ / shares | 56.55 | 48.31 | |
Balance at the end of the period (in dollars per share) | $ / shares | $ 54.40 | $ 53.67 | $ 54.40 |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Unrecognized compensation expense related to shares | $ | $ 82,846 | $ 82,846 | |
Unrecognized compensation expense weighted-average recognition period | 2 years 2 months 12 days |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income tax provision and the effective tax rate | ||||
Loss before income tax provision (benefit) | $ (27,769) | $ (5,425) | $ (42,269) | $ (11,417) |
Income tax provision (benefit) | $ (28,382) | $ 566 | $ (24,614) | $ (13,428) |
Effective tax rate (as a percent) | 102.20% | (10.40%) | 58.20% | 117.60% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Valuation allowance | $ 21,907 | $ 21,907 | ||
Gross unrecognized tax benefits | 18,102 | 18,102 | $ 15,628 | |
Unrecognized tax benefits, exclusive of interest and penalties, recorded as a non-current liability | 6,411 | 6,411 | 4,429 | |
Unrecognized tax benefits that would impact effective tax rate, if recognized | 12,116 | 12,116 | ||
Potential interest and penalties related to unrecognized tax benefits included in income tax expense | 898 | $ 548 | ||
Accrued interest and penalties on unrecognized tax benefits | $ 6,924 | $ 6,924 | $ 5,977 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share, Basic [Abstract] | ||||
Net income (loss) attributable to Envestnet, Inc. | $ 893 | $ (5,526) | $ (17,292) | $ 2,578 |
Basic number of weighted-average shares outstanding (in shares) | 50,870,296 | 45,247,331 | 49,526,774 | 44,963,735 |
Basic net income (loss) per share (in dollars per share) | $ 0.02 | $ (0.12) | $ (0.35) | $ 0.06 |
Diluted income (loss) per share calculation: | ||||
Net income (loss) attributable to Envestnet, Inc. | $ 893 | $ (5,526) | $ (17,292) | $ 2,578 |
Effect of dilutive shares: | ||||
Options to purchase common stock (in shares) | 1,164,246 | 0 | 0 | 1,360,300 |
Unvested restricted stock units (in shares) | 662,853 | 0 | 0 | 832,170 |
Convertible notes (in shares) | 261,075 | 0 | 0 | 0 |
Warrants (in shares) | 24,218 | 0 | 0 | 0 |
Diluted number of weighted-average shares outstanding (in shares) | 52,982,688 | 45,247,331 | 49,526,774 | 47,156,205 |
Diluted net income (loss) per share (in dollars per share) | $ 0.02 | $ (0.12) | $ (0.35) | $ 0.05 |
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 | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 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) | 0 | 11,752,444 | 11,907,504 | 7,802,871 |
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) | 0 | 2,077,874 | 1,654,241 | 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) | 0 | 1,880,744 | 1,989,437 | 0 |
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) | 0 | 0 | 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) | 0 | 7,793,826 | 7,793,826 | 7,793,826 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 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 | $ 10,989 | $ 8,643 |
Sales and use tax receivable | $ 5,139 | $ 5,246 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Term of contract (up to) | 20 years | 20 years |
Option to terminate, term | 90 days | |
Operating lease, cost | $ 4,377 | $ 8,495 |
Weighted average remaining lease term | 8 years 10 months 24 days | 8 years 10 months 24 days |
Weighted average discount rate, percent | 6.30% | 6.30% |
Operating cash flows from operating leases | $ 4,730 | $ 9,386 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 1 year | |
Lease not yet commenced, term of contract | 1 year | 1 year |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 14 years | |
Lease not yet commenced, term of contract | 3 years | 3 years |
Leases (Future Minimum Lease Pa
Leases (Future Minimum Lease Payments) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2019 | $ 9,096 |
2020 | 17,558 |
2021 | 15,975 |
2022 | 11,850 |
2023 | 10,571 |
Thereafter | 52,862 |
Total future minimum lease payments | 117,912 |
Less imputed interest | (27,563) |
Total operating lease liabilities | $ 90,349 |
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 (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Information | ||||
Income (loss) from operations | $ (20,257) | $ 5 | $ (28,994) | $ (733) |
Operating expenses | (244,702) | (201,111) | (453,105) | (399,860) |
Other expense, net | (7,512) | (5,430) | (13,275) | (10,684) |
Loss before income tax provision (benefit) | (27,769) | (5,425) | (42,269) | (11,417) |
Income tax provision (benefit) | (28,382) | 566 | (24,614) | (13,428) |
Net income (loss) | 613 | (5,991) | (17,655) | 2,011 |
Add: Net loss attributable to non-controlling interest | 280 | 465 | 363 | 567 |
Net income (loss) attributable to Envestnet, Inc. | 893 | (5,526) | (17,292) | 2,578 |
Operating Segments | ||||
Segment Information | ||||
Income (loss) from operations | 3,419 | 13,063 | 12,335 | 24,515 |
Segment Reconciling | ||||
Segment Information | ||||
Operating expenses | (23,676) | (13,058) | (41,329) | (25,248) |
Envestnet Wealth Solutions | Operating Segments | ||||
Segment Information | ||||
Income (loss) from operations | 12,379 | 16,359 | 29,223 | 32,220 |
Envestnet Data and Analytics | Operating Segments | ||||
Segment Information | ||||
Income (loss) from operations | $ (8,960) | $ (3,296) | $ (16,888) | $ (7,705) |
Segment Information (Summary of
Segment Information (Summary of Consolidated Total Assets, Depreciation and Amortization and Capital Expenditures) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Segment Information | |||||
Assets | $ 1,812,340 | $ 1,812,340 | $ 1,313,747 | ||
Depreciation and amortization | 26,915 | $ 19,185 | 46,432 | $ 38,731 | |
Capital expenditures | 11,966 | 10,604 | 24,398 | 20,191 | |
Envestnet Wealth Solutions | |||||
Segment Information | |||||
Assets | 1,279,408 | 1,279,408 | 810,971 | ||
Depreciation and amortization | 16,376 | 11,026 | 27,643 | 22,499 | |
Capital expenditures | 10,027 | 8,344 | 20,865 | 16,536 | |
Envestnet Data and Analytics | |||||
Segment Information | |||||
Assets | 532,932 | 532,932 | $ 502,776 | ||
Depreciation and amortization | 10,539 | 8,159 | 18,789 | 16,232 | |
Capital expenditures | $ 1,939 | $ 2,260 | $ 3,533 | $ 3,655 |
Geographical Information (Detai
Geographical Information (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Geographical Information | ||
Property and equipment, net | $ 51,016 | $ 44,991 |
United States | ||
Geographical Information | ||
Property and equipment, net | 45,759 | 39,412 |
India | ||
Geographical Information | ||
Property and equipment, net | 3,919 | 3,969 |
Other | ||
Geographical Information | ||
Property and equipment, net | $ 1,338 | $ 1,610 |