Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 19, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
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 | ||
Entity Address, Address Line Two | 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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,533,230,983 | ||
Entity Common Stock, Shares Outstanding | 54,117,332 | ||
Documents Incorporated by Reference | Part III incorporates by reference portions of the registrant’s definitive proxy statement for the annual meeting of stockholders, which will be filed within 120 days after the close of the 2020 fiscal year. | ||
Entity Central Index Key | 0001337619 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 384,565 | $ 82,505 |
Fees receivable, net | 80,064 | 67,815 |
Prepaid expenses and other current assets | 40,570 | 32,183 |
Total current assets | 505,199 | 182,503 |
Property and equipment, net | 47,969 | 53,756 |
Internally developed software, net | 96,501 | 60,263 |
Intangible assets, net | 435,041 | 505,589 |
Goodwill | 906,773 | 879,850 |
Operating lease right-of-use assets, net | 105,249 | 82,796 |
Other non-current assets | 47,558 | 37,127 |
Total assets | 2,144,290 | 1,801,884 |
Current liabilities: | ||
Accrued expenses and other liabilities | 158,548 | 137,944 |
Accounts payable | 18,003 | 17,277 |
Operating lease liabilities | 13,649 | 13,816 |
Contingent consideration | 11,251 | 0 |
Deferred revenue | 34,918 | 34,753 |
Total current liabilities | 236,369 | 203,790 |
Convertible Notes | 756,503 | 305,513 |
Revolving credit facility | 0 | 260,000 |
Contingent consideration | 1,308 | 9,045 |
Deferred revenue | 1,813 | 5,754 |
Non-current operating lease liabilities | 112,182 | 88,365 |
Deferred tax liabilities, net | 34,740 | 29,481 |
Other non-current liabilities | 25,557 | 32,360 |
Total liabilities | 1,168,472 | 934,308 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.005, 50,000,000 shares authorized; no shares issued and outstanding as of December 31, 2020 and December 31, 2019 | 0 | 0 |
Common stock, par value $0.005, 500,000,000 shares authorized; 67,832,706 and 66,320,706 shares issued as of December 31, 2020 and December 31, 2019, respectively; 54,093,535 and 52,841,706 shares outstanding as of December 31, 2020 and December 31, 2019, respectively | 339 | 331 |
Additional paid-in capital | 1,166,774 | 1,037,141 |
Accumulated deficit | (79,912) | (75,664) |
Treasury Stock, Value | (110,466) | (90,965) |
Accumulated other comprehensive loss | (398) | (1,749) |
Total stockholders’ equity | 976,337 | 869,094 |
Non-controlling interest | (519) | (1,518) |
Total equity | 975,818 | 867,576 |
Total liabilities and equity | $ 2,144,290 | $ 1,801,884 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
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 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Preferred stock, issued (in shares) | 0 | 0 |
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) | 67,832,706 | 66,320,706 |
Common stock, shares outstanding (in shares) | 54,093,535 | 52,841,706 |
Treasury stock, shares (in shares) | 13,739,171 | 13,479,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||
Total revenues | $ 998,230 | $ 900,127 | $ 812,363 |
Operating expenses: | |||
Cost of revenues | 305,929 | 278,811 | 263,400 |
Compensation and benefits | 398,970 | 383,554 | 317,188 |
General and administration | 160,229 | 152,564 | 139,984 |
Depreciation and amortization | 113,661 | 101,271 | 77,626 |
Total operating expenses | 978,789 | 916,200 | 798,198 |
Income (loss) from operations | 19,441 | (16,073) | 14,165 |
Other income (expense): | |||
Interest income | 1,112 | 3,347 | 2,363 |
Interest expense | (31,504) | (32,520) | (25,203) |
Other income (expense), net | 2,906 | (2,849) | (487) |
Total other expense, net | (27,486) | (32,022) | (23,327) |
Loss before income tax benefit | (8,045) | (48,095) | (9,162) |
Income tax benefit | (5,401) | (30,893) | (13,172) |
Net income (loss) | (2,644) | (17,202) | 4,010 |
Add: Net (income) loss attributable to non-controlling interest | (466) | 420 | 1,745 |
Net income (loss) attributable to Envestnet, Inc. | $ (3,110) | $ (16,782) | $ 5,755 |
Net income (loss) per share attributable to Envestnet, Inc.: | |||
Basic (in dollars per share) | $ (0.06) | $ (0.33) | $ 0.13 |
Diluted (in dollars per share) | $ (0.06) | $ (0.33) | $ 0.12 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 53,589,232 | 50,937,919 | 45,268,002 |
Diluted (in shares) | 53,589,232 | 50,937,919 | 47,384,085 |
Recurring Revenue | |||
Revenues: | |||
Total revenues | $ 967,454 | $ 863,125 | $ 776,700 |
Asset-based | |||
Revenues: | |||
Total revenues | 540,947 | 484,312 | 481,233 |
Operating expenses: | |||
Cost of revenues | 278,569 | 243,913 | 232,145 |
Subscription-based | |||
Revenues: | |||
Total revenues | 426,507 | 378,813 | 295,467 |
Operating expenses: | |||
Cost of revenues | 26,934 | 28,904 | 25,192 |
Professional services and other revenues | |||
Revenues: | |||
Total revenues | 30,776 | 37,002 | 35,663 |
Operating expenses: | |||
Cost of revenues | $ 426 | $ 5,994 | $ 6,063 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) attributable to Envestnet, Inc. | $ (3,110) | $ (16,782) | $ 5,755 |
Other comprehensive income (loss), net of taxes: | |||
Foreign currency translation gains (losses), net | 1,351 | (755) | (1,618) |
Comprehensive income (loss) attributable to Envestnet, Inc. | $ (1,759) | $ (17,537) | $ 4,137 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Non-controlling Interest |
Beginning balance (in shares) at Dec. 31, 2017 | 57,450,056 | 12,749,415 | |||||||
Balance at period start at Dec. 31, 2017 | $ 436,670 | $ 9,217 | $ 287 | $ (47,042) | $ 556,257 | $ 624 | $ (73,854) | $ 9,217 | $ 398 |
Increase (decrease) in shareholders' equity | |||||||||
Exercise of stock options (in shares) | 359,345 | ||||||||
Exercise of stock options | 5,305 | $ 2 | 5,303 | ||||||
Issuance of common stock - vesting of restricted stock units (in shares) | 1,073,681 | ||||||||
Issuance of common stock - vesting of restricted stock units | 4 | $ 4 | |||||||
Stock-based compensation expense | 40,245 | 39,969 | 276 | ||||||
Purchase of treasury stock for stock-based tax withholdings (in shares) | (367,683) | ||||||||
Shares withheld to satisfy tax withholdings | (20,816) | $ (20,816) | |||||||
Issuance of non-controlling units in private company | 473 | 473 | |||||||
Issuance of Convertible Notes | 46,611 | 46,611 | |||||||
Issuance of common stock and warrants - private placement, net of offering costs (in shares) | 2,355,816 | ||||||||
Issuance of common stock and warrants - private placement, net of offering costs | 118,161 | $ 13 | 118,148 | ||||||
Purchase / transfer of non-controlling interests, net of tax | (6,560) | (5,160) | (1,400) | ||||||
Reclassification of redeemable units | 900 | 900 | |||||||
Foreign currency translation gains (losses), net | (1,618) | (1,618) | |||||||
Net income (loss) | 4,010 | 5,755 | (1,745) | ||||||
Balance at period end at Dec. 31, 2018 | $ 632,602 | $ 306 | $ (67,858) | 761,128 | (994) | (58,882) | (1,098) | ||
Ending balance (in shares) at Dec. 31, 2018 | 61,238,898 | 13,117,098 | |||||||
Increase (decrease) in shareholders' equity | |||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||||
Exercise of stock options (in shares) | 783,216 | ||||||||
Exercise of stock options | $ 10,592 | $ 4 | 10,588 | ||||||
Issuance of common stock - vesting of restricted stock units (in shares) | 1,098,124 | ||||||||
Issuance of common stock - vesting of restricted stock units | 5 | $ 5 | |||||||
Acquisition of business (in shares) | 3,200,468 | ||||||||
Acquisition of business | 223,256 | $ 16 | 223,240 | ||||||
Stock-based compensation expense | 54,436 | 54,436 | |||||||
Purchase of treasury stock for stock-based tax withholdings (in shares) | (361,902) | ||||||||
Shares withheld to satisfy tax withholdings | (23,107) | $ (23,107) | |||||||
Payment of Convertible Notes due 2019 | (12,251) | (12,251) | |||||||
Foreign currency translation gains (losses), net | (755) | (755) | |||||||
Net income (loss) | (17,202) | (16,782) | (420) | ||||||
Balance at period end at Dec. 31, 2019 | 867,576 | $ (1,138) | $ 331 | $ (90,965) | 1,037,141 | (1,749) | (75,664) | $ (1,138) | (1,518) |
Ending balance (in shares) at Dec. 31, 2019 | 66,320,706 | 13,479,000 | |||||||
Increase (decrease) in shareholders' equity | |||||||||
Exercise of stock options (in shares) | 705,333 | ||||||||
Exercise of stock options | 10,760 | $ 4 | 10,756 | ||||||
Issuance of common stock - vesting of restricted stock units (in shares) | 804,982 | ||||||||
Issuance of common stock - vesting of restricted stock units | 4 | $ 4 | |||||||
Acquisition of business | 56,292 | ||||||||
Stock-based compensation expense | 56,292 | ||||||||
Purchase of treasury stock for stock-based tax withholdings (in shares) | (260,171) | ||||||||
Shares withheld to satisfy tax withholdings | (19,501) | $ (19,501) | |||||||
Issuance of Convertible Notes | 61,859 | 61,859 | |||||||
Issuance of common stock and warrants - private placement, net of offering costs (in shares) | 1,685 | ||||||||
Issuance of common stock and warrants - private placement, net of offering costs | 126 | 126 | |||||||
Purchase / transfer of non-controlling interests, net of tax | 527 | 666 | (139) | ||||||
Capital contribution - non-controlling interest | 606 | (66) | 672 | ||||||
Foreign currency translation gains (losses), net | 1,351 | 1,351 | |||||||
Net income (loss) | (2,644) | (3,110) | 466 | ||||||
Balance at period end at Dec. 31, 2020 | $ 975,818 | $ 339 | $ (110,466) | $ 1,166,774 | $ (398) | $ (79,912) | $ (519) | ||
Ending balance (in shares) at Dec. 31, 2020 | 67,832,706 | 13,739,171 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Issuance of Convertible Notes due 2025, Offering costs and taxes | $ 8,694 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
OPERATING ACTIVITIES: | |||
Net income (loss) | $ (2,644) | $ (17,202) | $ 4,010 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 113,661 | 101,271 | 77,626 |
Deferred rent and lease incentive amortization | 0 | 0 | 671 |
Provision for doubtful accounts | 2,817 | 2,855 | 1,618 |
Deferred income taxes | (1,884) | (39,630) | (23,629) |
Release of uncertain tax positions | (7,101) | 0 | 0 |
Non-cash compensation expense | 59,637 | 60,444 | 40,245 |
Non-cash interest expense | 18,515 | 19,246 | 14,534 |
Accretion on contingent consideration and purchase liability | 1,688 | 1,772 | 222 |
Payments of contingent consideration | 0 | (578) | 0 |
Fair market value adjustment to contingent consideration liability | (3,105) | (8,126) | 0 |
Gain on acquisition of equity method investment | (4,230) | 0 | 0 |
Loss allocation from equity method investments | 5,399 | 2,361 | 1,146 |
Gain on life insurance proceeds | 0 | (5,000) | 0 |
Impairment of right of use assets | 2,661 | 0 | 0 |
Other | (729) | 0 | 0 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Fees receivable, net | (15,055) | 1,139 | (12,890) |
Prepaid expenses and other current assets | (9,666) | (6,440) | (887) |
Other non-current assets | (1,963) | (5,234) | (3,336) |
Accrued expenses and other liabilities | 22,109 | (811) | 12,939 |
Accounts payable | (187) | (2,863) | 1,743 |
Deferred revenue | (4,125) | 727 | 345 |
Other non-current liabilities | (5,962) | 4,795 | 3,028 |
Net cash provided by operating activities | 169,836 | 108,726 | 117,385 |
INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (12,088) | (19,847) | (20,524) |
Capitalization of internally developed software | (54,908) | (34,096) | (24,068) |
Investments in private companies | (15,640) | (5,250) | (1,200) |
Acquisitions of businesses, net of cash acquired | (20,257) | (320,915) | (194,617) |
Proceeds from life insurance policy | 0 | 5,000 | 0 |
Other | 2,897 | (600) | (1,270) |
Net cash used in investing activities | (99,996) | (375,708) | (241,679) |
FINANCING ACTIVITIES: | |||
Payment of Convertible Notes due 2019 | 0 | (184,751) | 0 |
Proceeds from borrowings on revolving credit facility | 45,000 | 345,000 | 195,000 |
Payments on revolving credit facility | (305,000) | (85,000) | (276,168) |
Capital contribution - non-controlling interest | 606 | 0 | 0 |
Payments of deferred consideration on prior acquisitions | (1,879) | 0 | 0 |
Payments of contingent consideration | 0 | (171) | (2,193) |
Issuance of common stock and warrants - private placement, net of offering costs | 0 | 0 | 122,704 |
Purchase of ERS units | 0 | 0 | (6,560) |
Proceeds from exercise of stock options | 10,760 | 10,592 | 5,305 |
Taxes paid in lieu of shares issued for stock-based compensation | (19,501) | (23,107) | (20,816) |
Issuance of restricted stock units | 4 | 5 | 4 |
Net cash provided by financing activities | 232,950 | 60,465 | 352,294 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (831) | (399) | (592) |
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 301,959 | (206,916) | 227,408 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD (See Note 2) | 82,755 | 289,671 | 62,263 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (See Note 2) | 384,714 | 82,755 | 289,671 |
Supplemental disclosure of cash flow information - net cash paid during the period for income taxes | 8,304 | 8,119 | 5,531 |
Supplemental disclosure of cash flow information - cash paid during the period for interest | 12,990 | 13,530 | 10,409 |
Supplemental disclosure of non-cash operating, investing and financing activities: | |||
Common stock issued in acquisition of business | 0 | 222,484 | 0 |
Contingent consideration issued in acquisition of businesses | 5,239 | 15,780 | 0 |
Transaction costs of issuance of common stock and warrants included in accrued expenses and other liabilities | 0 | 0 | 4,543 |
Purchase liabilities included in accrued expenses and other liabilities | 632 | 0 | 0 |
Purchase liabilities included in other non-current liabilities | 0 | 5,468 | 0 |
Purchase of fixed assets included in accounts payable and accrued expenses and other liabilities | 1,841 | 1,832 | 1,997 |
Membership interest liabilities included in other non-current liabilities | 3,345 | 5,920 | 0 |
Common stock issued to settle purchase liability | 126 | 772 | 0 |
Leasehold improvements funded by lease incentive | 1,806 | 1,816 | 1,780 |
Transfer of non-controlling units | 771 | 0 | 0 |
Convertible Notes due 2025 | |||
FINANCING ACTIVITIES: | |||
Proceeds from issuance of Convertible Notes | 517,500 | 0 | 0 |
Debt issuance costs | (14,540) | 0 | 0 |
Convertible Notes due 2023 | |||
FINANCING ACTIVITIES: | |||
Proceeds from issuance of Convertible Notes | 0 | 0 | 345,000 |
Debt issuance costs | 0 | 0 | (9,982) |
Revolving credit facility | |||
FINANCING ACTIVITIES: | |||
Debt issuance costs | $ 0 | $ (2,103) | $ 0 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Envestnet, Inc. (“Envestnet”) through its subsidiaries (collectively, the “Company”), is transforming the way financial advice and wellness are delivered. Its mission is to empower advisors and financial service providers with innovative technology, solutions and intelligence to make financial wellness a reality for everyone. Through a combination of platform enhancements, partnerships and acquisitions, Envestnet provides a unique financial network connecting technology, solutions and data, delivering better intelligence and enabling its customers to drive better outcomes. Envestnet is organized around two primary, complementary business segments. Financial information about each business segment is contained in “Note 19—Segment Information”. 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. Envestnet Wealth Solutions serves its clients principally through the following product and service suites: • Envestnet | Enterprise provides an end-to-end open architecture wealth management platform, through which advisors can construct portfolios for clients. It begins with aggregated household data which then leads to a financial plan, asset allocation, investment strategy, portfolio management, rebalancing and performance reporting. Advisors have access to nearly 21,000 investment products. Envestnet | Enterprise also offers data aggregation and reporting, data analytics and digital advice capabilities to customers. • Envestnet | Tamarac™ provides leading trading, rebalancing, portfolio accounting, performance reporting and client relationship management software, principally to high‑end registered investment advisers (“RIAs”). • Envestnet | 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 4,700 vetted third party managed account products, multi-manager portfolios, fund strategist portfolios, as well as nearly 900 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 five RIAs registered with the U.S. Securities and Exchange Commission (“SEC”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The Company follows accounting standards established by the Financial Accounting Standards Board (“FASB”) to ensure consistent reporting of financial condition, results of operations and cash flows. References to accounting principles generally accepted in the United States (“GAAP”) in these notes are to the FASB Accounting Standards Codification ™ (“ASC”) and related updates (“ASU”). Principles of Consolidation —The consolidated financial statements include the accounts of Envestnet and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Foreign Currency —Accounts for the Envestnet Wealth Solutions segment that are denominated in a non-U.S. currency have been remeasured 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 consolidated balance sheets as accumulated other comprehensive income (loss) within stockholders' equity. The Company is also subject to gains and losses from foreign currency denominated transactions and the remeasurement of foreign currency denominated balance sheet accounts, both of which are included in other income (expense), net in the consolidated statements of operations. Management Estimates —Management has made certain estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with GAAP. Areas requiring the use of management estimates relate to estimating uncollectible receivables, revenue recognition, valuations and assumptions used for impairment testing of goodwill, intangible and other long-lived assets, right of use assets, restricted stock and stock options issued, contingent consideration, realization of deferred tax assets, uncertain tax positions, sales tax liabilities, operating lease liabilities, fair value of the liability portion of the convertible debt, fair value of warrants issued, commitments and contingencies and assumptions used to allocate purchase prices in business combinations. Actual results could differ materially from these estimates under different assumptions or conditions. Revenue Recognition The Company derives revenues from asset-based and subscription-based services and professional services and other sources. Revenues are recognized when control of these services is transferred to our customers, in an amount that reflects the consideration that we expect to be entitled to in exchange for those services. All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers. Sales and usage-based taxes are excluded from revenues. Asset-Based Recurring Revenues— Asset-based recurring revenues primarily consist of fees for providing customers continuous access to platform services through the Company’s uniquely customized platforms. These platform services include investment manager research, portfolio diagnostics, proposal generation, investment model management, rebalancing and trading, portfolio performance reporting and monitoring solutions, billing and back office and middle-office operations and administration and are made available to customers throughout the contractual term from the date the customized platform is launched. The asset-based fees the Company earns are generally based upon variable percentages of assets managed or administered on our platforms. The fee percentage varies based on the level and type of services the Company provides to its customers, as well as the values of existing customer accounts. The values of the customer accounts are affected by inflows or outflows of customer funds and market fluctuations. The platform services are substantially the same over each quarter and performed in a similar manner over the contract period, and are considered stand-ready promises. The platform services that are delivered to the customer over the quarter are considered distinct, as the customer benefits distinctly from each increment of our services and each quarter is separately identified in the contract, and are considered to be a single performance obligation under ASC 606. The pricing generally resets each quarter and the pricing structure is consistent throughout the term of the contract. The variable fees are generally calculated and billed quarterly in advance based on preceding quarter-end values and the variable amounts earned from the platform services relate specifically to the benefits transferred to the customer during that month or quarter. Accordingly, revenue is allocated to the specific quarter in which services are performed. The asset-based contracts generally contain one performance obligation and revenue is recognized on a ratable basis over the quarter beginning on the date that the platform services are made available to the customer as the customer simultaneously consumes and receives the benefits of the services. All asset-based fees are recognized in the Envestnet Wealth Solutions segment. For certain services provided by third parties, the Company evaluates whether it is the principal (revenues reported on a gross basis) or agent (revenues reported on a net basis). Generally, the Company reports customer fees including charges for third party service providers where the Company has a direct contract with such third party service providers on a gross basis, whereas the amounts billed to its customers are recorded as revenues, and amounts paid to third party service providers are recorded as cost of revenues. The Company is the principal in the transaction because it controls the services before they are transferred to its customers. Control is evidenced by the Company being primarily responsible to its customers and having discretion in establishing pricing. Subscription-Based Recurring Revenues— Subscription-based recurring revenues primarily consist of fees for providing customers continuous access to the Company’s platform for wealth management and financial wellness. The subscription-based fees generally include fixed fees and or usage-based fees. Generally, the subscription services are substantially the same over each quarter and performed in a similar manner over the contract period, and are considered stand-ready promises. Quarterly subscription services are considered distinct as the customer can benefit from each increment of services on its own and each quarter is separately identified in the contract, and services are considered to be a single performance obligation under ASC 606. The usage-based pricing generally resets each quarter and the pricing structure is generally consistent throughout the term of the contract. The fixed fees are generally calculated and billed quarterly in advance. The usage-based fees are generally calculated and are billed either monthly or quarterly based on the actual usage and relate specifically to the benefits transferred to the customer during that quarter. Accordingly, revenue is allocated to the specific quarter in which services are performed. Fixed fees are generally recognized on a ratable basis over the quarter beginning when the subscription services are made available to the customer, as the customer simultaneously receives and consumes the benefits of the subscription services. Usage-based revenue is recognized on a monthly basis as the customer receives and consumes the benefit as the Company provides the services. Subscription-based fees are recognized in both the Envestnet Wealth Solutions and Envestnet Data & Analytics segments. Professional Services and Other Revenues— The Company earns professional services fees by providing contractual customized services and platform software development as well as initial implementation fees. Professional services contracts generally have fixed prices, and generally specify the deliverables in the contract. Certain professional services contracts are billed on a time and materials basis and revenue is recognized over time as the services are performed. For contracts billed on a fixed price basis, revenue is recognized over time based on the proportion of services performed. Initial implementation fees are fixed and are generally recognized ratably over the contract term. Other revenues primarily includes revenue related to the Advisor Summit. Other revenues are recognized when the events are held. Other revenues are not significant. The majority of the Company's professional services and other contracts contain one performance obligation. Professional services and other revenues are recognized in both the Envestnet Wealth Solutions and Envestnet Data & Analytics segments. Arrangements with Multiple Performance Obligations —Certain of the Company’s contracts with customers contain multiple performance obligations such as platform services performance obligation and professional services performance obligation. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. Standalone selling prices of services are estimated based on observable transactions when these services are sold on a standalone basis or based on expected cost plus margin. 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 obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation. Contract Balances —The Company records contract liabilities (deferred revenue) when cash payments are received in advance of its performance. The term between invoicing date and when payment is due is generally not significant. For the majority of its arrangements, the Company requires advance quarterly payments before the services are delivered to the customer. Deferred Revenue —Deferred revenue primarily consists of implementation fees, professional services and subscription fee payments received in advance from customers. Deferred Sales Incentive Compensation —Sales incentive compensation earned by the Company’s sales force is considered an incremental and recoverable cost to acquire a contract with a customer. Sales incentive compensation for initial contracts is deferred and amortized on a straight-line basis over the period of benefit. The Company determined the period of benefit by taking into consideration its customer contracts, life of the technology and other factors. Sales incentive compensation for renewal contracts are deferred and amortized on a straight-line basis over the related contractual renewal period. Deferred sales incentive compensation is included in other non-current assets in the consolidated balance sheets and amortization expense is included in compensation and benefits expenses in the consolidated statements of operations. The Company has applied the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in compensation and benefits expenses in the consolidated statements of operations. Cost of Revenues— Cost of revenues primarily includes expenses related to third party investment management and clearing, custody and brokerage services. Generally, these expenses are calculated based upon a contractual percentage of the market value of assets held in customer accounts measured as of the end of each quarter and are recognized ratably throughout the quarter based on the number of days in the quarter. Allowance for Doubtful Accounts— The Company evaluates the need for an allowance for doubtful accounts for potentially uncollectible fees receivable. In establishing the amount of the allowance, if any, customer-specific information is considered related to delinquent accounts, including historical loss experience and current economic conditions. As of December 31, 2020, and 2019, the Company’s allowance for doubtful accounts was $2,751 and $1,093, respectively. Cash and Cash Equivalents— The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair value. The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. Restricted Cash— The following table reconciles cash, cash equivalents and restricted cash from the consolidated balance sheets to amounts reported in the consolidated statements of cash flows: December 31, 2020 2019 2018 Cash and cash equivalents $ 384,565 $ 82,505 $ 289,345 Restricted cash included in prepaid expenses and other current assets — 82 158 Restricted cash included in other non-current assets 149 168 168 Total cash, cash equivalents and restricted cash $ 384,714 $ 82,755 $ 289,671 Investments —The Company has investments in private companies that are recorded using the equity method of accounting. The Company uses the equity method of accounting because of its less than 50% ownership and lack of control in these companies. These investments are included in other non-current assets on the consolidated balance sheets. The Company records the portion of its earnings or losses in these privately held companies’ net income or loss on a one quarter lag from the actual results of operations as a component of other income (expense), net on the consolidated statements of operations. The Company reviews all investments on a regular basis to evaluate the carrying amount and economic viability. This evaluation process is based on information that the Company requests directly from these investees and includes, but is not limited to, the review of the investee’s cash position, financing needs, earnings/revenue outlook, operational performance, management/ownership changes and competition. As this information is not subject to the same disclosure regulations as U.S. publicly traded companies, the basis for these evaluations is subject to the timing and accuracy of the data received from these investees. When a review of an investee’s operations indicates that there is a decline in its value and it has been determined that this decline is other than temporary, the Company assesses the investment for impairment. Impaired investments are written down to estimated fair value. Fair value is estimated using a variety of valuation methodologies, including comparing the investee with publicly traded companies in similar lines of business, applying valuation multiples to estimated future operating results and analyzing estimated discounted future cash flows. There were no impairments of investments for the years ended December 31, 2020, 2019 and 2018. Property and Equipment— Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of furniture and equipment is computed using the straight-line method based on estimated useful lives of the depreciable assets. Leasehold improvements are amortized on a straight-line basis over their estimated economic useful lives or the remaining lease term, whichever is shorter. Improvements are capitalized, while repairs and maintenance costs are charged to operations as incurred. Assets are reviewed for recoverability whenever events or circumstances indicate the carrying value may not be recoverable. There were no impairments of property and equipment for the years ended December 31, 2020, 2019 and 2018. Internally Developed Software for Internal Use— Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs are expensed as incurred. Internally developed software is amortized on a straight-line basis over its estimated useful life. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no material impairments of internally developed software for internal use for the years ended December 31, 2020, 2019 and 2018. Goodwill and Intangible Assets— Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. Goodwill is reviewed for impairment each year using a qualitative or quantitative process that is performed at least annually or whenever events or circumstances indicate a likely reduction in the fair value of a reporting unit below its carrying amount. The Company has concluded that it has two reporting units. The Company performs the annual impairment analysis on October 31 in order to provide management time to complete the analysis prior to year-end. Prior to performing the quantitative evaluation, an assessment of qualitative factors may be performed to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value. If it is determined that it is unlikely that the carrying value exceeds the fair value, the Company is not required to complete the quantitative goodwill impairment evaluation. If it is determined that the carrying value may exceed fair value when considering qualitative factors, a quantitative goodwill impairment evaluation is performed. When performing the quantitative evaluation, if the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the difference will be recorded. No goodwill impairment charges have been recorded for the years ended December 31, 2020, 2019 and 2018. Intangible assets are recorded at cost less accumulated amortization. Intangible assets are reviewed for impairment whenever events or changes in circumstances may affect the recoverability of the net assets. Such reviews include an analysis of current results and take into consideration the undiscounted value of projected operating cash flows. No intangible asset impairment charges have been recorded for the years ended December 31, 2020, 2019 and 2018. 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 and 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. Adoption of the standard had a material impact on the Company's consolidated balance sheets, but did not have an impact on the Company's 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 operating ROU assets, current operating lease liabilities and non-current operating lease liabilities in the Company's 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. The operating lease ROU asset also includes prepaid payments and excludes lease incentives. 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 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. 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 and also requires entities to display the fair value of the selected assets and liabilities on the face of the balance sheets. The Company has not elected the ASC 825-10 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. Financial assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the inputs used to measure fair value into the following levels: Level I: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date. Level II: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or inputs that are observable and can be corroborated by observable market data. Level III: Inputs reflect management’s best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments. Income Taxes— The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce deferred tax assets to an amount that is more likely than not to be realized. The Company follows authoritative guidance related to how uncertain tax positions should be recognized, measured, disclosed and presented in the consolidated financial statements. This requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained “when challenged” or “when examined” by the applicable tax authority. The tax benefits recognized in the consolidated financial statements from tax positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Business Combinations— The Company accounts for business combinations under the acquisition method. The cost of an acquired company is assigned to the tangible and intangible assets acquired and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires management to make estimates and use valuation techniques when market values are not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Transaction costs associated with business combinations are expensed as incurred. The Company determines the fair value of contingent consideration payable on the acquisition date using a discounted cash flow approach utilizing an appropriate discount rate. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value as adjustments to fair market value adjustment on contingent consideration in the Company’s consolidated statements of operations. Changes in the fair value of the contingent consideration payable can result from adjustments to the estimated revenue forecasts included in the contingent consideration calculations. Stock-Based Compensation— Compensation cost relating to stock-based awards made to employees and directors is recognized in the consolidated financial statements using the Black-Scholes option-pricing model in the case of non-qualified stock option awards, and intrinsic value in the case of restricted stock awards. The Company measures the cost of such awards based on the estimated fair value of the award measured at the grant date and recognizes the expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the fair value of stock options requires the Company to make several estimates, including the volatility of its stock price, the expected life of the option, forfeiture rate, dividend yield and interest rates. The Company estimates the expected life of its options using historical internal forfeiture data. The Company estimates stock-price volatility using historical third-party quotes of Envestnet’s common stock. The Company utilizes a risk-free interest rate, which is based on the yield of U.S. zero coupon securities with a maturity equal to the expected life of the options. The Company has not and does not expect to pay dividends on its common shares. The Company is required to estimate expected forfeitures of stock-based awards at the grant date and recognize compensation cost only for those awards expected to vest. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. Therefore, changes in the forfeiture assumptions may impact the total amount of expense ultimately recognized over the vesting period. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances. Convertible Notes —In May 2018, the Company issued $345,000 of 1.75% convertible notes due June 2023. In August 2020, the Company issued $517,500 of 0.75% convertible notes due August 2025. Collectively the “Convertible Notes” are accounted for in accordance with ASC 470-20. The Company has determined that the embedded conversion options in the Convertible Notes are not required to be separately accounted for as a derivative under GAAP. The Company separately accounts for the liability and equity components of Convertible Notes that can be settled in cash by allocating the proceeds from issuance between the liability component and the embedded conversion option, or equity component, in accordance with accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The value of the equity component is calculated by first measuring the fair value of the liability component, using the interest rate of a similar liability that does not have a conversion feature, as of the issuance date. The difference between the proceeds from the convertible debt issuance and the amount measured as the liability component is recorded as the equity component with a corresponding discount recorded on the debt. The Company recognizes the accretion of the resulting discount using the effective interest method as part of interest expense in its consolidated statements of operations. See “Recent Accounting Pronouncements” within this footnote. Non-controlling Interest —In March 2018, the Company initially acquired a 43% fully diluted interest in a private company for cash consideration of $1,333. In connection with the acquisition, the Company was granted the ability to appoint two members to the private company's board of directors. The appointment of two board members gives the Company the majority of the board's voting rights. As a result, the Company uses the consolidation method of accounting for this investment. The private company was formed to enable financial advisors to provide insurance and income protection products to their clients. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements —In February 2016, the FASB issued ASU 2016-02, “Leases,” which amends the requirements for assets and liabilities recognized for all leases longer than twelve months. This standard was 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 consolidated financial statements. See “Note 11—Leases.” 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. This standard requires that entities estimate credit losses based upon an “expected credit loss” approach rather than the “incurred loss” approach. The new approach requires entities to measure all expected credit losses for financial assets based on historical experience, current conditions and reasonable forecasts of collectability. This standard was effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2019. These changes became effective for the Company's fiscal year beginning January 1, 2020. Upon adoption, the Company recognized the cumulative effect of the initial application of ASU 2016-13 as an adjustment of $1,138, net of tax, to the opening balance of accumulated deficit. The Company does not expect the adoption of ASU 2016-13 to have a material impact to the results of its operations on an ongoing basis. 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 was effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The Company early adopted this standard beginning January 1, 2019, noting that this standard was applied prospectively. Adoption of this standard did not have a material impact on the Company's consolidated financial statements. Not Yet Adopted Accounting Pronouncements —In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This update aims to reduce complexity within the accounting for income taxes as part of the simplification initiative. This standard is effective for fina |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions FolioDynamix On January 2, 2018, the Company acquired all of the issued and outstanding membership interests of FolioDynamics Holdings, Inc. (“FolioDynamix”) through a merger of FolioDynamix with and into a wholly owned subsidiary of Envestnet. FolioDynamix provides financial institutions, RIAs, and other wealth management clients with an end-to-end technology solution paired with a suite of advisory tools including model portfolios, research and overlay management services. FolioDynamix is included in the Envestnet Wealth Solutions segment. The Company acquired FolioDynamix to add complementary trading tools as well as commission and brokerage support to Envestnet’s existing suite of offerings. Envestnet is continuing to integrate the technology and operations of FolioDynamix into the Company’s wealth management channel, enabling the Company to further leverage its operating scale and data analytics capabilities. The Company funded the acquisition with a combination of cash on hand and borrowings under its revolving credit facility. Total consideration transferred in the acquisition was $193,135. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Cash and cash equivalents $ 4,876 Accounts receivable 4,962 Prepaid expenses and other current assets 3,773 Property and equipment, net 927 Other non-current assets 441 Identifiable intangible assets 135,700 Goodwill 79,891 Total assets acquired 230,570 Accounts payable (5,358) Accrued expenses (7,907) Deferred tax liability (23,300) Deferred revenue (806) Other non-current liabilities (64) Total liabilities assumed (37,435) Total net assets acquired $ 193,135 The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, primarily related to lower future operating expenses and the knowledge and experience of the workforce in place. The goodwill is not deductible for income tax purposes. A summary of estimated identifiable intangible assets acquired, estimated useful lives and amortization method follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ 113,500 13 Accelerated Proprietary technology 17,500 5 Straight-line Trade names and domains 4,700 6 Straight-line Total intangible assets acquired $ 135,700 The results of FolioDynamix’s operations are included in the consolidated statements of operations beginning January 2, 2018. FolioDynamix’s revenues for the year ended December 31, 2018 totaled $68,122. FolioDynamix’s pre-tax loss for the year ended December 31, 2018 totaled $13,777. The pre-tax loss includes acquired intangible asset amortization of $17,908 for the year ended December 31, 2018. Acquisition of Private Artificial Intelligence ( “ AI ” ) Company On January 2, 2019, pursuant to an agreement and plan of merger dated as of January 2, 2019 between Envestnet and a private AI company, the private AI company merged into Yodlee Inc., a wholly owned subsidiary of the Company (the “private AI company acquisition”). The private AI 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 are included in the Company’s Envestnet Data & Analytics segment. The seller of the private AI company is also entitled to an additional unlimited earn-out payment with an estimated fair value of $7,580 as of the acquisition date. The unlimited earn-out payment is based on the private company's revenue and other retention targets for the twelve-month period beginning January 1, 2021. The consideration transferred in the acquisition was as follows: Cash consideration $ 11,173 Purchase consideration liability 6,240 Contingent consideration liability 7,580 Working capital adjustment 70 Total consideration transferred $ 25,063 In December 2019, the Company determined that revenue targets for this acquisition would not be met. As a result, the Company reduced the contingent consideration liability plus accrued interest associated with this acquisition by $8,126 and recorded this as a reduction to general and administration expenses. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ 144 Total liabilities assumed (688) Identifiable intangible assets 4,100 Goodwill 21,507 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 follows: Estimated Amortization Amount Useful Life in Years Method Proprietary technology $ 4,100 4 Straight-line The results of the private AI company's operations are included in the consolidated statements of operations beginning January 2, 2019 and were not considered material to the Company’s results of operations. For the years ended December 31, 2020 and 2019, acquisition related costs for the private AI company acquisition were not material, and are included in general and administration expenses. 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 (“PortfolioCenter”) from Performance Technologies, Inc. (the “PC Seller”), a wholly owned subsidiary of The Charles Schwab Corporation (“PortfolioCenter acquisition”). 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 PortfolioCenter's revenue for the twelve-month period beginning April 1, 2020. The discounted amount of the contingent consideration liability was estimated to be $8,200 at the acquisition date and is included as a non-current liability in the December 31, 2019 consolidated balance sheet and as a current liability in the December 31, 2020 consolidated balance sheet. The consideration transferred in the acquisition was as follows: Cash consideration $ 17,500 Contingent consideration liability 8,200 Total consideration transferred $ 25,700 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ 13 Total liabilities assumed (1,600) Identifiable intangible assets 11,700 Goodwill 15,587 Total net assets acquired $ 25,700 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 follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ 8,500 10 Accelerated Proprietary technology 3,200 5 Straight-line Total intangible assets acquired $ 11,700 The results of PortfolioCenter's operations are included in the consolidated statements of operations beginning April 1, 2019. PortfolioCenter's revenues for the year ended December 31, 2019 totaled $6,705. PortfolioCenter's pre-tax loss for the year ended December 31, 2019 totaled $2,568. The pre-tax loss includes acquired intangible asset amortization of $1,459 for the year ended December 31, 2019. For the years ended December 31, 2020 and 2019, acquisition related costs for the PortfolioCenter acquisition were not material, and are included in general and administration expenses. 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, are 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 $298,714, subject to a working capital adjustment, and issued 3,184,713 shares of Envestnet common stock 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”) (See “Note 15—Stock-Based Compensation”). The Company has 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 (“RSUs”) and performance stock units (“PSUs”) pursuant to the 2019 Equity Plan. As of December 31, 2020, the Company has issued approximately 177,000 RSUs and approximately 25,000 PSUs under the 2019 Equity Plan to legacy PIEtech employees. As of December 31, 2020, the Company expects to issue approximately 100,000 additional RSUs and PSUs. As part of the retention bonus pool, the Company also made cash retention payments in 2019 of approximately $8,800 to certain legacy PIEtech employees who joined Envestnet | MoneyGuide. At the time of acquisition, the Company expected to pay an additional $5,300 in cash bonus payments to legacy PIEtech employees over the next three years, for which approximately $3,050 has been paid through December 31, 2020. The Company also granted membership interests in certain of the Company's equity method investments to two legacy PIEtech executives with an estimated grant date fair market value of $8,900. These membership interests vested on May 1, 2020 and become exercisable on May 1, 2022, with the option to put the membership interests to the Company. As of December 31, 2020 and 2019, the Company has recorded approximately $3,345 and $5,920, respectively, as a component of compensation and benefits in the consolidated statements of operations with a corresponding liability in other non-current liabilities in the consolidated balance sheets. The consideration transferred in the acquisition was as follows: Cash consideration $ 298,714 Stock consideration 222,484 Less: cash acquired (6,360) Total consideration transferred, net of cash acquired $ 514,838 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: 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 2,012 Identifiable intangible assets 253,000 Goodwill 323,951 Total assets acquired 600,405 Accounts payable and accrued expenses (1,661) Operating lease liabilities (2,012) Deferred income taxes (68,534) Deferred revenue (7,000) Total liabilities assumed (79,207) Total net assets acquired $ 521,198 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 follows: Estimated Amortization Amount Useful Life in Years Method Customer lists $ 222,000 10-20 Accelerated Proprietary technologies 23,000 4 Straight-line Trade names 8,000 7 Straight-line Total intangible assets acquired $ 253,000 The results of PIEtech's operations are included in the consolidated statements of operations beginning May 1, 2019. PIEtech's revenues for the years ended December 31, 2019 totaled $30,315. PIEtech's pre-tax loss for the year ended December 31, 2019 totaled $12,374. The pre-tax loss includes acquired intangible asset amortization of $17,634 for the year ended December 31, 2019. For the year ended December 31, 2020, acquisition related costs for the PIEtech acquisition were not material. For the year ended December 31, 2019, acquisition related costs totaled approximately $16,738. Included in this 2019 amount is approximately $8,800 in one-time cash retention bonuses plus related tax withholdings, which are included in compensation and benefits in the consolidated statements of operations. The remainder is included within general and administration expenses in the consolidated statements of operations. Acquisition of Private Technology Company On February 18, 2020, the Company, through it's wholly owned subsidiary Yodlee, Inc. (“Yodlee”), acquired a private technology company (the “Private Technology Company Acquisition”). The private technology company enables the consent generation and data flow between financial information providers, such as banks and financial institutions, and financial information users, such as financial technology lenders and other financial services agencies, through a network of cloud-based interoperable interfaces or application programming interfaces. The technology and operations of the private technology company have been integrated into the Company's Envestnet Data & Analytics segment. In connection with the Private Technology Company Acquisition, the Company acquired all of the outstanding shares of the private technology company and paid cash consideration of $2,343, net of cash acquired, subject to certain closing and post-closing adjustments, plus up to an additional $6,750 in contingent consideration, based upon achieving certain performance targets. The Company recorded a liability as of the date of acquisition of $5,239, which represented the estimated fair value of contingent consideration on the date of acquisition. In 2020, we determined that certain performance targets for this acquisition would not be met. As a result, we reduced the contingent consideration liability plus accrued interest associated with this acquisition by $3,105 and recorded this as a reduction to general and administration expenses. Future changes to the estimated fair value of the contingent consideration, if any, will be recognized in our earnings. The Company recorded estimated goodwill of $7,019, which is not deductible for income tax purposes, and estimated identifiable intangible assets for proprietary technologies of $1,000. The tangible assets acquired and liabilities assumed were not material. The results of the private technology company's operations are included in the condensed consolidated statements of operations beginning February 18, 2020 and were not considered material to the Company’s results of operations. For the year ended December 31, 2020, acquisition related costs for the Private Technology Company Acquisition were not material, and are included in general and administration expenses. Acquisition of Private Cloud Technology Company On March 2, 2020, the Company acquired certain assets of a private cloud technology company (the “Private Cloud Technology Company Acquisition”). The private cloud technology company enables enterprises to design and implement the digital transition from legacy systems and applications to a modern cloud computing platform. The technology and operations of the private cloud technology company have been integrated into the Company's Envestnet Wealth Solutions segment. In connection with the Private Cloud Technology Company Acquisition, the Company paid estimated consideration of $11,968, net of cash acquired. In connection with the acquisition, the Company recorded estimated goodwill of $10,932, which is deductible for income tax purposes. The tangible assets acquired and liabilities assumed were not material. The results of the private cloud technology company's operations are included in the condensed consolidated statements of operations beginning March 2, 2020 and were not considered material to the Company’s results of operations. For the year ended December 31, 2020, acquisition related costs for the Private Cloud Technology Company Acquisition were not material, and are included in general and administration expenses. Acquisition of Private Financial Technology Design Company On March 3, 2020, the Company acquired the outstanding units of a private financial technology design company that were not owned by the Company and merged the acquired company into a wholly owned subsidiary of the Company (the “Private Financial Technology Design Company Acquisition”). The private financial technology design company designs integrated, intuitive digital technology applications for institutional financial services firms, bank wealth management organizations, independent advisor networks, and broker-dealers. The technology and operations of the private financial technology design company have been integrated into the Envestnet Wealth Solutions segment. The Company previously owned approximately 45% of the outstanding units in this private financial technology design company, and accounted for it as an equity method investment. Based upon the estimated value of the private financial technology design company of $11,026, the Company paid estimated consideration of $5,946, net of cash acquired, for the remaining outstanding units. As a result of the acquisition, the Company recognized a gain of $4,230 in the first quarter of 2020 on the re-measurement to fair value of its previously held interest, which is included in other income (expense), net in the condensed consolidated statements of operations In connection with the Private Financial Technology Design Company Acquisition, the Company recorded estimated total goodwill of $9,241, of which approximately $6,232 is deductible for income tax purposes, and estimated identifiable intangible assets for proprietary technologies of $2,000. The tangible assets acquired and liabilities assumed were not material. The results of the private financial technology design company's operations are included in the condensed consolidated statements of operations beginning March 3, 2020 and were not considered material to the Company’s results of operations. For the year ended December 31, 2020, acquisition related costs for the Private Financial Technology Design Company Acquisition were not material, and are included in general and administration expenses. The goodwill arising from these 2020 acquisitions represents the expected synergistic benefits of these transactions, primarily related to an increase in future revenues as a result of potential new business and cross selling opportunities, as well as enhancements to our existing technologies. Pro Forma Financial Information (Unaudited) The following pro forma financial information presents the combined results of operations of Envestnet, PortfolioCenter and PIEtech for the year ended December 31, 2019 and assumes the acquisitions of PortfolioCenter and PIEtech had occurred as of the beginning of 2018. The results of the Company's other acquisitions since January 1, 2019 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 below include amortization charges for acquired intangible assets, interest expense, stock-based compensation expense and income tax. The Company's pro forma information below includes the reversal of a valuation allowance on its deferred tax assets as of January 1, 2018 and the reversal of transaction costs 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. Year Ended December 31, 2019 Revenues $ 919,291 Net loss attributable to Envestnet, Inc. (16,860) Net loss per share attributable to Envestnet, Inc.: Basic $ (0.32) Diluted $ (0.32) |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2020 | |
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 consisted of the following: December 31, 2020 2019 Prepaid technology $ 13,165 $ 10,387 Non-income tax receivables 6,571 5,555 Advance payroll taxes and benefits 6,429 5,446 Prepaid insurance 1,777 1,919 Income tax prepayments and receivables 1,684 — Other 10,944 8,876 Total prepaid expenses and other current assets $ 40,570 $ 32,183 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consisted of the following: December 31, Estimated Useful Life 2020 2019 Cost: Computer equipment and software 3 years $ 72,443 $ 72,190 Leasehold improvements Shorter of the lease term or useful life of the asset 37,671 34,645 Office furniture and fixtures 3-7 years 11,249 10,832 Office equipment and other 3-5 years 7,151 6,850 Building and building improvements 7-39 years 2,669 2,647 Land Not applicable 940 940 132,123 128,104 Less: accumulated depreciation and amortization (84,154) (74,348) Total property and equipment, net $ 47,969 $ 53,756 During 2020 and 2019, the Company retired property and equipment that was no longer in service for the Envestnet Wealth Solutions segment with an historical cost of $8,495 and $8,264, respectively. During 2020 and 2019, the Company retired property and equipment that was no longer in service for the Envestnet Data & Analytics segment with an historical cost of $3,825 and $4,621, respectively. Gains and losses on asset retirements during 2020 and 2019 were not material. The following table presents the cost amounts and related accumulated depreciation written off by category: Year Ended December 31, 2020 Year Ended December 31, 2019 Accumulated Accumulated Cost Depreciation Cost Depreciation Computer equipment and software $ 9,844 $ (9,606) $ 12,597 $ (12,542) Leasehold improvements 1,775 (1,326) 229 (135) Office furniture and fixtures 320 (243) 42 (21) Office equipment and other 381 (348) 17 (17) Total property and equipment retirements $ 12,320 $ (11,523) $ 12,885 $ (12,715) Depreciation and amortization expense was as follows: Year Ended December 31, 2020 2019 2018 Depreciation and amortization expense $ 21,432 $ 20,777 $ 15,737 |
Internally Developed Software,
Internally Developed Software, Net | 12 Months Ended |
Dec. 31, 2020 | |
Capitalized Computer Software, Net [Abstract] | |
Internally Developed Software, Net | Internally Developed Software, Net Internally developed software, net consisted of the following: December 31, Estimated Useful Life 2020 2019 Internally developed software 5 years $ 159,619 $ 104,703 Less: accumulated amortization (63,118) (44,440) Internally developed software, net $ 96,501 $ 60,263 Amortization expense was as follows: Year Ended December 31, 2020 2019 2018 Amortization expense $ 18,670 $ 12,042 $ 8,033 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2020 | |
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 Envestnet Total Balance at December 31, 2018 $ 243,809 $ 275,293 $ 519,102 Private AI company acquisition — 21,507 21,507 PortfolioCenter acquisition 15,587 — 15,587 PIEtech acquisition 323,951 — 323,951 Foreign currency and other (100) (197) (297) Balance at December 31, 2019 583,247 296,603 879,850 Private Technology company acquisition — 7,019 7,019 Private Cloud Technology company acquisition 10,932 — 10,932 Private Financial Technology Design company acquisition 9,241 — 9,241 Foreign currency and other (70) (199) (269) Balance at December 31, 2020 $ 603,350 $ 303,423 $ 906,773 Intangible assets, net consisted of the following: December 31, 2020 December 31, 2019 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Customer lists $ 591,520 $ (198,555) $ 392,965 $ 591,520 $ (148,517) $ 443,003 Proprietary technologies 54,914 (26,949) 27,965 87,714 (44,165) 43,549 Trade names 33,700 (19,589) 14,111 33,700 (14,663) 19,037 Total intangible assets $ 680,134 $ (245,093) $ 435,041 $ 712,934 $ (207,345) $ 505,589 During 2020 and 2019, the Company retired fully amortized intangible assets for the Envestnet Wealth Solutions segment with a historical cost of $800 and $11,520, respectively, including proprietary technologies and trade names. During 2020 and 2019, the Company retired fully amortized intangible assets for the Envestnet Data & Analytics segment with a historical cost of $35,000 and $11,100, respectively, including proprietary technology, trade names and backlog. Amortization expense was as follows: Year Ended December 31, 2020 2019 2018 Amortization expense $ 73,559 $ 68,452 $ 53,856 Future amortization expense of the Company's intangible assets as of December 31, 2020, is expected to be as follows: Years ending December 31: 2021 $ 63,645 2022 59,900 2023 45,551 2024 38,751 2025 35,485 Thereafter 191,709 Total $ 435,041 |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments The Company owns equity interests in various privately held companies. As of December 31, 2020, the Company ’s ownership interests in these companies ranged from 4% to 44%. As of December 31, 2019, the Company ’s ownership interests in these companies ranged from 28% to 47%. Equity method investments are initially recorded at cost. Under the equity method of accounting, the investment is adjusted for the Company ’s proportionate share of earnings or losses, dividends, capital contributions and changes in ownership interests. As of December 31, 2020 and December 31, 2019, the carrying value of the Company’s equity method investments was $15,318 and $5,014 respectively, which are included in other non-current assets in the consolidated balance sheets. As of December 31, 2020, the Company has committed $5,740 in future funding to certain of these equity method investees. Summarized combined financial information for these investments is as follows (amounts represent 100% of investee financial information, except Envestnet ’ s proportional share of losses): December 31, Balance Sheets 2020 2019 Current assets $ 23,469 $ 2,457 Non-current assets 21,329 1,413 Current liabilities 11,325 775 Non-current liabilities 1,418 1,617 Year Ended December 31, Statements of Operations 2020 2019 2018 Revenues $ 35,603 $ 866 $ 1,327 Loss from operations (4,758) (6,192) (2,418) Net loss (5,062) (6,193) (2,438) Envestnet ’s proportional share of losses (5,399) (2,361) (1,146) Envestnet's proportional share of losses from the Company ’s equity method investments are included in other income (expense), net in the consolidated statements of operations. Investment in Private Services Company On January 8, 2020, the Company acquired a 4.25% membership interest in a private services company for cash consideration of $11,000. The private services company partners with independent network advisory firms to help them grow, become more profitable and run more efficiently. The Company uses the equity method of accounting to record its portion of the private services company’s net income or loss on a one quarter lag from the actual results of operations. The Company uses the equity method of accounting because of its less than 50% ownership and lack of control and does not otherwise exercise control over the significant economic decisions of the private services company. The private services company is and remains a client of the Company and has thus been determined to be a related party. Revenues from the private services company totaled $11,494 in the twelve months ended December 31, 2020. As of December 31, 2020, the Company had recorded a net receivable of $2,088 from the private services company. As of December 31, 2020, the carrying value of the Company ’s investment in the private services company exceeded its proportionate share of the net assets of the private services company by approximatel y $9,900 , which represents goodwill and amortizable intangible assets arising from acquisitions. The Company recognizes amortization on the basis difference allocated to intangible assets over a period between six to fifteen years. This amortization is included within Envestnet's proportional share of losses in other income (expense), net in the consolidated statements of o |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following: December 31, 2020 2019 Accrued compensation and related taxes $ 71,039 $ 53,627 Accrued investment manager fees 57,894 48,720 Accrued professional services 9,240 6,315 Non-income tax payables 8,398 11,040 Accrued technology 4,701 3,042 Accrued charitable contribution — 5,020 Other accrued expenses 7,276 10,180 Total accrued expenses and other liabilities $ 158,548 $ 137,944 In the fourth quarter of 2019, the Company offered a voluntary early retirement program to employees over a certain age, who have a combined age and years of experience with the Company of at least 65 years. Employees had until January 31, 2020 to voluntarily accept the program with separation of service no later than March 31, 2020. In connection with this program, the Company recorded approximately $12,500 of severance expense during the twelve months ended December 31, 2020. The Company accrued approximately $380 and $1,733 in accrued compensation and related taxes as of December 31, 2020 and 2019, respectively, and $1,524 and $599 in other non-current liabilities as of December 31, 2020 and 2019, respectively. These payments will extend through 2030. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s outstanding debt obligations as of December 31, 2020 and 2019 were as follows: December 31, 2020 2019 Revolving credit facility balance $ — $ 260,000 Convertible Notes due 2023 $ 345,000 $ 345,000 Unaccreted discount on Convertible Notes due 2023 (24,058) (33,491) Unamortized issuance costs on Convertible Notes due 2023 (4,306) (5,996) Convertible Notes due 2023 carrying value $ 316,636 $ 305,513 Convertible Notes due 2025 $ 517,500 $ — Unaccreted discount on Convertible Notes due 2025 (65,902) — Unamortized issuance costs on Convertible Notes due 2025 (11,731) — Convertible Notes due 2025 carrying value $ 439,867 $ — Interest expense was comprised of the following and is included in other income (expense), net in the consolidated statements of operations: Year Ended December 31, December 31, 2020 2019 2018 Accretion of debt discount $ 14,084 $ 15,040 $ 11,134 Coupon interest 7,442 8,917 6,650 Interest on revolving credit facility 5,786 4,065 3,994 Amortization of issuance costs 3,396 3,703 2,771 Undrawn and other fees 796 795 654 Total interest expense $ 31,504 $ 32,520 $ 25,203 Amended Credit Agreement In 2014, Envestnet and certain of its subsidiaries entered into a credit agreement with a group of banks (the “Banks”), for which Bank of Montreal is acting as administrative agent. Since 2014, the credit agreement has been amended several times, the latest of which occurred in September 2019 (the “Amended Credit Agreement”). Pursuant to the Amended Credit Agreement, the Banks have agreed to provide the Company with a revolving credit facility of $500,000, of which amount may be increased by $150,000 (the “Revolving Credit Facility”). The Amended Credit Agreement also includes a $5,000 sub-facility for the issuances of letters of credit. As of December 31, 2020, there were no amounts outstanding under the Revolving Credit Facility. Obligations under the Amended Credit Agreement are guaranteed by substantially all of Envestnet’s U.S. subsidiaries. In accordance with the terms of the Security Agreement, dated November 19, 2015, among the Company, the Debtors party thereto, the Banks and the Administrative Agent, obligations under the Amended Credit Agreement are secured by substantially all of the Company’s domestic assets and the Company’s pledge of 66% of the voting equity and 100% of the non-voting equity of certain of its first-tier foreign subsidiaries. Proceeds under the Amended Credit Agreement may be used to finance capital expenditures, working capital, permitted acquisitions and for general corporate purposes. In the event the Company has borrowings under the Amended Credit Agreement, it will pay interest on these borrowings at rates between 1.50% and 3.25% above LIBOR based on the Company’s total leverage ratio. Any borrowings under the Amended Credit Agreement will mature on September 27, 2024. There is also a commitment fee equal to 0.25% per annum on the daily unused portion of the Revolving Credit Facility. As of December 31, 2020, debt issuance costs related to the Amended Credit Agreement are presented in prepaid expenses and other non-current assets in the consolidated balance sheets which have outstanding amounts of $853 and $2,337, respectively. The Amended Credit Agreement contains customary conditions, representations and warranties, affirmative and negative covenants, mandatory prepayment provisions and events of default. The covenants include certain financial covenants requiring the Company to maintain compliance with a maximum senior leverage ratio, a maximum total leverage ratio, a minimum interest coverage ratio and minimum adjusted EBITDA. The Amended Credit Agreement also contains provisions that require the Company to maintain minimum liquidity levels, limit the ability of Envestnet and its subsidiaries to incur debt, make investments, sell assets, create liens, engage in transactions with affiliates, engage in mergers and acquisitions, pay dividends and other restricted payments, grant negative pledges and change their business activities. The Company was in compliance with these financial covenants and other requirements as of December 31, 2020. Convertible Notes due 2023 In May 2018, the Company issued $345,000 of convertible notes maturing June 1, 2023 (the “Convertible Notes due 2023”). Net proceeds from the offering were $335,018. The Convertible Notes due 2023 bear interest at a rate of 1.75% per annum payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2018. In connection with the issuance of the Convertible Notes due 2023, the Company incurred $8,593 of issuance costs in 2018, which are presented net in Convertible Notes in the consolidated balance sheets. These costs are being amortized and are recorded as additional interest expense over the life of the Convertible Notes due 2023. The Convertible Notes due 2023 are general unsecured senior obligations, subordinated in right of payment to the Company’s obligations under the Amended Credit Agreement. The Convertible Notes due 2023 rank equally in right of payment with all of the Company’s other existing and future senior indebtedness and will be senior in right of payment to any of the Company’s future subordinated obligations. The Convertible Notes due 2023 will be structurally subordinated to the indebtedness and other liabilities of any of the Company’s subsidiaries, other than its wholly owned subsidiary, Envestnet Asset Management, Inc., which will fully and unconditionally guarantee the notes on an unsecured basis, and other than to the extent the Convertible Notes due 2023 are guaranteed in the future by any of our other subsidiaries as described in the indenture and will be effectively subordinated to and future secured indebtedness to the extent of the value of the assets securing such indebtedness. Upon the occurrence of a “fundamental change”, as defined in the indenture, the holders may require the Company to repurchase all or a portion of the Convertible Notes due 2023 for cash at 100% of the principal amount of the Convertible Notes due 2023 being purchased, plus any accrued and unpaid interest. The Company may redeem for cash all or any portion of the notes, at our option, on or after June 5, 2021 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days, consecutive or non-consecutive, within a 30 consecutive trading day period ending on, and including, any of the five The Convertible Notes due 2023 are convertible into shares of the Company’s common stock under certain circumstances prior to maturity at a conversion rate of 14.6381 shares per one thousand principal amount of the Convertible Notes due 2023, which represents a conversion price of $68.31 per share, subject to adjustment under certain conditions. Holders may convert their Convertible Notes due 2023 at their option at any time prior to the close of business on the business day immediately preceding December 15, 2022, only under the following circumstances: (a) during any calendar quarter commencing after the calendar quarter ending on June 30, 2018 (and only during such calendar quarter), if the last reported sale price of our common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs, is more than 130% of the conversion price of the Convertible Notes due 2023 in effect on each applicable trading day; (b) during the five five indenture. On or after December 15, 2022, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may surrender their notes for conversion at any time, regardless of the foregoing circumstances. Upon conversion, the Company may pay cash, shares of the Company’s common stock or a combination of cash and stock, as determined by the Company in its discretion. The Company’s stated policy is to settle the debt component of the Convertible Notes due 2023 at least partially or wholly in cash. This policy is based both on the Company’s intent and the Company’s ability to settle these instruments in cash. The Company has separately accounted for the liability and equity components of the Convertible Notes due 2023 by allocating the proceeds from issuance of the Convertible Notes due 2023 between the liability component and the embedded conversion option, or equity component. This allocation was done by first estimating an interest rate at the time of issuance for similar notes that do not include the embedded conversion option. The Company allocated $46,611 to the equity component, net of offering costs of $1,389. The Company recorded a discount on the Convertible Notes due 2023 of $48,000 which is accreted and recorded as additional interest expense. During the twelve months ended December 31, 2020 and 2019, the Company recognized $9,434 and $9,150, respectively, in accretion related to the discount. The effective interest rate of the liability component of the Convertible Notes due 2023 is equal to the stated interest rate plus the accretion of original issue discount. The effective interest rate on the liability component of the Convertible Notes due 2023 for the years ended December 31, 2020 and 2019 was approximately 6%. Convertible Notes due 2025 In August 2020, the Company issued $517,500 of convertible notes that mature on August 15, 2025 (the “Convertible Notes due 2025”). Net proceeds from the offering were $502,960. The Convertible Notes due 2025 bear interest at a rate of 0.75% per annum payable semiannually in arrears in cash on February 15 and August 15 of each year, beginning on February 15, 2021. In connection with the issuance of the Convertible Notes due 2025, the Company incurred $12,558 of issuance costs in 2020, which are presented net in Convertible Notes in the consolidated balance sheets. These costs are being amortized and are recorded as additional interest expense over the life of the Convertible Notes due 2025. The Convertible Notes due 2025 are general unsecured senior obligations, subordinated in right of payment to the Company’s obligations under the Amended Credit Agreement. The Convertible Notes due 2025 rank equally in right of payment with all of the Company’s other existing and future senior indebtedness and will be senior in right of payment to any of the Company’s future subordinated obligations. The Convertible Notes due 2025 will be structurally subordinated to the indebtedness and other liabilities of any of the Company’s subsidiaries, other than its wholly owned subsidiary, Envestnet Asset Management, Inc., which will fully and unconditionally guarantee the notes on an unsecured basis, and other than to the extent the Convertible Notes due 2025 are guaranteed in the future by any of our other subsidiaries as described in the indenture and will be effectively subordinated to and future secured indebtedness to the extent of the value of the assets securing such indebtedness. Upon the occurrence of a “fundamental change,” as defined in the indenture, the holders may require the Company to repurchase all or a portion of the Convertible Notes due 2025 for cash at 100% of the principal amount of the Convertible Notes due 2025 being purchased, plus any accrued and unpaid interest. The Company may redeem for cash all or any portion of the notes, at our option, on or after August 15, 2023 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days, consecutive or non-consecutive, within a 30 consecutive trading day period ending on, and including, any of the five The Convertible Notes due 2025 are convertible into shares of the Company’s common stock under certain circumstances prior to maturity at a conversion rate of 9.3682 shares per one thousand principal amount of the Convertible Notes due 2025, which represents a conversion price of $106.74 per share, subject to adjustment under certain conditions. Holders may convert their Convertible Notes due 2025 at their option at any time prior to the close of business on the business day immediately preceding February 15, 2025, only under the following circumstances: (a) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs, is more than 130% of the conversion price of the Notes in effect on each applicable trading day; (b) during the five five Upon conversion, the Company may pay cash, shares of the Company’s common stock or a combination of cash and stock, as determined by the Company in its discretion. The Company’s stated policy is to settle the debt component of the Convertible Notes due 2025 at least partially or wholly in cash. This policy is based both on the Company’s intent and its ability to settle these instruments in cash. The Company has separately accounted for the liability and equity components of the Convertible Notes due 2025 by allocating the proceeds from issuance of the Convertible Notes due 2025 between the liability component and the embedded conversion option, or equity component. This allocation was done by first estimating an interest rate at the time of issuance for similar notes that do not include the embedded conversion option. The Company allocated $61,859 to the equity component, net of offering costs of $1,982 and taxes of $6,712. The Company recorded a discount on the Convertible Notes due 2025 of $70,552 which will be accreted and recorded as additional interest expense. During the twelve months ended December 31, 2020, the Company recognized $4,650 in accretion related to the discount. The effective interest rate of the liability component of the Convertible Notes due 2025 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 2025 for the year ended December 31, 2020 was approximately 4%. See “Note 18—Net Income (Loss) Per Share” for further discussion of the effect of conversion on net income per common share. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | 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. Terms of the Company's operating leases may change from time to time. The Company's leases have remaining lease terms of 3 months to 13 years. For the year ended December 31, 2020, the Company's total operating lease cost and short-term lease cost were $17,241 and $5,049, respectively. For the year ended December 31, 2019, the Company's total operating lease cost and short-term lease cost were $17,736 and $4,683, respectively. The Company did not have significant sublease income or variable lease cost for the years ended December 31, 2020 and 2019. As of December 31, 2020, the weighted average remaining lease term was 10.2 years and the weighted average discount rate was 5.1%. As of December 31, 2019, the weighted average remaining lease term was 9.2 years and the weighted average discount rate was 6.0%. Cash paid for amounts included in the measurement of the operating lease liability for the years ended December 31, 2020 and 2019 was $21,467 and $19,002, respectively. The ROU assets obtained in exchange for operating lease liabilities for the years ended December 31, 2020 and 2019 was $39,370 and $30,455, respectively. Future minimum lease payments under non-cancellable leases, as of December 31, 2020, were as follows: Operating Leases Years Ending December 31, 2021 $ 18,789 2022 15,993 2023 14,731 2024 13,654 2025 13,067 Thereafter 87,303 Total future minimum lease payments 163,537 Less imputed interest (37,706) Total operating lease liabilities $ 125,831 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity On February 25, 2016, the Company announced that its Board of Directors had authorized a share repurchase program under which the Company may repurchase up to 2,000,000 shares of its common stock. The timing and volume of share repurchases will be determined by the Company’s management based on its ongoing assessments of the capital needs of the business, the market price of its common stock and general market conditions. No time limit has been set for the completion of the repurchase program, and the program may be suspended or discontinued at any time. The repurchase program authorizes the Company to purchase its common stock from time to time in the open market (including pursuant to a “Rule 10b5-1 plan”), in block transactions, in privately negotiated transactions, through accelerated stock repurchase programs, through option or other forward transactions or otherwise, all in compliance with applicable laws and other restrictions. The Company has not repurchased any shares of its common stock since 2016. As of December 31, 2020, a maximum of 1,956,390 shares may yet be purchased under this program. On December 20, 2018, the Company issued and sold to BlackRock, Inc. (“BlackRock”) approximately 2,356,000 common shares at a purchase price of $52.13 per share, and warrants to purchase approximately 470,000 common shares at an exercise price of $65.16 per share, subject to customary anti-dilution adjustments. The warrants are exercisable at BlackRock’s option for four years from the date of issuance. The warrants may be exercisable through cash exercise or net issue exercise with cash settlement at the sole discretion of the Company. The gross proceeds received of approximately $122,788 were allocated to the common shares and the warrants and recorded within stockholders’ equity. In connection with this transaction, the Company incurred total transaction costs of approximately $4,627 and recorded them as a reduction in equity. On May 1, 2019, in connection with the PIEtech acquisition, the Company issued 3,184,713 shares of Envestnet common stock with a fair value of $222,484 to the sellers. See “Note 3—Business Acquisitions”. The Company has issued Convertible Notes due 2023 and Convertible Notes due 2025 that are convertible into shares of the Company’s common stock under certain conditions prior to maturity. See “Note 10—Debt”. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements 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 consolidated balance sheets as of December 31, 2020 and December 31, 2019, based on the three-tier fair value hierarchy: December 31, 2020 Fair Value Level I Level II Level III Assets: Money market funds $ 84,110 $ 84,110 $ — $ — Assets used to fund deferred compensation liability 9,961 — — 9,961 Total assets $ 94,071 $ 84,110 $ — $ 9,961 Liabilities: Contingent consideration liability $ 12,559 $ — $ — $ 12,559 Deferred compensation liability 8,720 8,720 — — Total liabilities $ 21,279 $ 8,720 $ — $ 12,559 December 31, 2019 Fair Value Level I Level II Level III Assets: Money market funds $ 37,730 $ 37,730 $ — $ — Assets used to fund deferred compensation liability 8,390 — — 8,390 Total assets $ 46,120 $ 37,730 $ — $ 8,390 Liabilities: Contingent consideration liability $ 9,045 $ — $ — $ 9,045 Deferred compensation liability 8,208 8,208 — — Total liabilities $ 17,253 $ 8,208 $ — $ 9,045 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 consolidated balance sheets. 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. 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 consolidated balance sheets. 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 used to fund the Company's deferred compensation liability approximates the cash surrender value of the Company's life insurance premiums and is included in other non-current assets in the consolidated balance sheets. The fair values 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 Company's Level III fair value measurement not supported by market activity included its assessments of expected future cash flows related to these acquisitions and their ability to meet the target performance objectives during the subsequent periods from the date of acquisition, which management believes are appropriately discounted considering the uncertainties associated with these obligations, and are calculated in accordance with the terms of their respective agreements. The Company will continue to reassess the fair values of the 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 administration expenses in the consolidated statements of operations. In 2020, the Company determined that certain performance targets related to the private technology company acquisition would not be met. As a result, the Company reduced the contingent consideration liability plus accrued interest associated with this acquisition by $3,105 and recorded this as a reduction to general and administration expenses. The table below presents a reconciliation of the Company's contingent consideration liabilities, which were measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2019 to December 31, 2020: Fair Value of Contingent Consideration Liabilities Balance at December 31, 2019 $ 9,045 Private technology company acquisition 5,239 Fair market value adjustment on contingent consideration liability (3,105) Accretion on contingent consideration liabilities 1,380 Balance at December 31, 2020 $ 12,559 The table below presents a reconciliation of assets used to fund deferred compensation liability, which was measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2019 to December 31, 2020: Fair Value of Assets Used to Fund Deferred Compensation Liability Balance at December 31, 2019 $ 8,390 Contributions 1,060 Fair value adjustments 511 Balance at December 31, 2020 $ 9,961 The fair market value of the assets used to fund the Company's deferred compensation liability is based upon the cash surrender value of the Company's life insurance premiums. The value of the assets used to fund the Company's deferred compensation liability, which are included in other non-current assets in the consolidated balance sheets, increased due to funding of the plan and gains on the underlying investment vehicles. These gains are recognized in the Company's earnings and included in general and administration expenses in the consolidated statements of operations. 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 when changes in circumstances cause the transfer, in accordance with the Company’s accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. There were no transfers between Levels I, II and III during the year ended December 31, 2020. Fair Value of Debt Agreements and Other Financial Assets and Liabilities The Company considered the Convertible Notes due 2023 and Convertible Notes due 2025 to be Level II liabilities as of December 31, 2020 and 2019, and used a market approach to calculate their respective fair values. The estimated fair value for each convertible note was determined based on the estimated or actual bids and offers in an over-the-counter market on December 31, 2020 and 2019 (See “Note 10—Debt”). In May 2018, the Company issued $345,000 of Convertible Notes due 2023. As of December 31, 2020 and 2019, the carrying value of the Convertible Notes due 2023 equaled $316,636 and $305,513, respectively, and represented the aggregate principal amount outstanding less the unamortized discount and debt issuance costs. As of December 31, 2020 and 2019, the estimated fair value of the Convertible Notes due 2023 was $460,817 and $414,852, respectively. In August 2020, the Company issued $517,500 of Convertible Notes due 2025. As of December 31, 2020, the carrying value of the Convertible Notes due 2025 equaled $439,867, and represented the aggregate principal amount outstanding less the unamortized discount and debt issuance costs. As of December 31, 2020, the estimated fair value of the Convertible Notes due 2025 was $540,788. As of December 31, 2020 and 2019, there was $0 and $260,000, respectively, outstanding on the revolving credit facility under the Amended Credit Agreement. As of December 31, 2019, the outstanding balance on the revolving credit facility approximated fair value as borrowings under the revolving credit facility bore interest at variable rates and the Company believes its credit risk quality was consistent with when the debt originated. The Company considered the revolving credit facility to be a Level I liability as of December 31, 2020 and 2019 (See “Note 10—Debt”). The Company considered the recorded values of our other financial assets and liabilities, which consist primarily of cash and cash equivalents, fees receivable and accounts payable, to approximate the fair values of the respective assets and liabilities at December 31, 2020 based upon the short-term nature of these assets and liabilities. |
Revenues and Cost of Revenues
Revenues and Cost of Revenues | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues and Cost of Revenues | Revenues and Cost of Revenues On January 1, 2018, the Company adopted ASU 2014-09 and all subsequent ASUs that modified Topic 606 (“ASC 606”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. The Company recognized the cumulative effect of the initial application of ASC 606 as an adjustment of $9,217 to the opening balance of accumulated deficit. Comparative information was not restated and will continue to be reported under the accounting standards in effect for those periods. In accordance with ASC 606 requirements, the impact of adoption on the Company’s consolidated statements of operations was as follows: Year Ended December 31, 2018 As Reported Without Adoption of ASC 606 Effect of Change Higher/(Lower) Statements of Operations Revenues: Asset-based $ 481,233 $ 495,646 $ (14,413) Subscription-based 295,467 295,467 — Total recurring revenues 776,700 791,113 (14,413) Professional services and other revenues 35,663 35,840 (177) Total revenues 812,363 826,953 (14,590) Operating expenses: Cost of revenues 263,400 277,813 (14,413) Compensation and benefits 317,188 318,887 (1,699) Total operating expenses 798,198 814,310 (16,112) Income from operations 14,165 12,643 1,522 Net income 4,010 2,488 1,522 Net income attributable to Envestnet, Inc. $ 5,755 $ 4,233 $ 1,522 The majority of the Company's revenues continue to be recognized when services are provided. The adoption of ASC 606 primarily impacted timing of revenue recognition for initial implementation services, deferral of incremental direct costs in obtaining contracts with customers and gross versus net presentation related to certain third party manager agreements. Disaggregation of revenue The following table presents the Company’s revenues disaggregated by major source: Year Ended December 31, 2020 Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Revenues: Asset-based $ 540,947 $ — $ 540,947 Subscription-based 248,810 177,697 426,507 Total recurring revenues 789,757 177,697 967,454 Professional services and other revenues 16,333 14,443 30,776 Total revenues $ 806,090 $ 192,140 $ 998,230 Year Ended December 31, 2019 Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Revenues: Asset-based $ 484,312 $ — $ 484,312 Subscription-based 207,606 171,207 378,813 Total recurring revenues 691,918 171,207 863,125 Professional services and other revenues 17,540 19,462 37,002 Total revenues $ 709,458 $ 190,669 $ 900,127 Year Ended December 31, 2018 Envestnet Wealth Solutions (1) Envestnet Data & Analytics (1) Consolidated (1) Revenues: Asset-based $ 481,233 $ — $ 481,233 Subscription-based 138,372 157,095 295,467 Total recurring revenues 619,605 157,095 776,700 Professional services and other revenues 13,000 22,663 35,663 Total revenues $ 632,605 $ 179,758 $ 812,363 (1) As noted above, prior period amounts have not been adjusted under the modified retrospective method. One customer accounted for more than 10% of the Company’s total revenues: Year Ended December 31, 2020 2019 2018 Fidelity 15 % 15 % 17 % Fidelity accounted for 18%, 19% and 21% of the Envestnet Wealth Solutions segment's revenues for the years ended December 31, 2020 , 2019 and 2018 , respectively. No single customer revenue amounts for Envestnet Data & Analytics exceeded 10% of the segment revenue total. The following table presents the Company’s revenues disaggregated by geography, based on the billing address of the customer: Year Ended December 31, 2020 2019 2018 United States $ 977,047 $ 871,456 $ 778,565 International (1), (2) 21,183 28,671 33,798 Total revenues $ 998,230 $ 900,127 $ 812,363 (1) No foreign country accounted for more than 10% of total revenues. (2) In 2018, upon adoption of ASU 2014-09, gross revenue recognition changed to net revenue recognition for one customer. Remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2020: Years ending December 31, 2021 $ 243,989 2022 172,981 2023 101,768 2024 53,620 2025 27,744 Thereafter 13,030 Total $ 613,132 Only fixed consideration from significant contracts with customers is included in the amounts presented above. Contract balances Total deferred revenue as of December 31, 2020 decreased by $3,776, primarily due to timing differences related to the satisfaction of outstanding performance obligations and the Company's billing cycles during the year ended December 31, 2020. Total deferred revenue as of December 31, 2019 increased by $9,609, primarily the result of the PIEtech and PortfolioCenter acquisitions and an increase in deferred revenue related to subscription-based services during the year ended December 31, 2019. The majority of the Company's deferred revenue 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 $34,261 and $23,714 for the years ended December 31, 2020 and 2019, 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 $10,814 and $9,387 as of December 31, 2020 and 2019, respectively. Amortization expense for the deferred sales incentive compensation was $3,936 and $3,452 for the years ended December 31, 2020 and 2019, respectively. Deferred sales incentive compensation is included in other non-current assets on the consolidated balance sheets and amortization expense is included in compensation and benefits expenses on the consolidated statements of operations. No significant impairment loss for capitalized costs was recorded during the periods. Cost of Revenues The following table summarizes cost of revenues by revenue category: Year Ended December 31, 2020 2019 2018 Asset-based $ 278,569 $ 243,913 $ 232,145 Subscription-based 26,934 28,904 25,192 Professional services and other 426 5,994 6,063 Total cost of revenues $ 305,929 $ 278,811 $ 263,400 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation On June 22, 2010, the Board of Directors approved the 2010 Long-Term Incentive Plan (“2010 Plan”), effective upon the closing of the Company’s initial public offering. The 2010 Plan provides for the grant of options, stock appreciation rights, Full Value Awards (as defined in the 2010 Plan agreement) and cash incentive awards to employees, consultants and non-employee directors to purchase common stock, which vest over time and have a ten-year contractual term. As approved by the Company’s shareholders, the 2010 Plan has since been amended whereby the maximum number of shares of common stock that may be delivered under the 2010 Plan is 8,925,000. Stock options and stock appreciation rights are granted with an exercise price no less than the fair-market-value price of the common stock at the date of the grant. As a result of the PIEtech acquisition, described in “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 RSUs and PSUs pursuant to the 2019 Equity Plan. The RSUs vest over time and the PSUs 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 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 assumptions impact the total amount of expense and are recognized over the vesting period. As of December 31, 2020, the maximum number of options and restricted stock available for future issuance under the Company’s plans is 1,375,747. Stock-based compensation expense under the Company's plans was as follows: Year Ended December 31, 2020 2019 2018 Stock-based compensation expense $ 56,292 $ 54,436 $ 40,245 Tax effect on stock-based compensation expense (14,354) (13,734) (10,093) Net effect on income $ 41,938 $ 40,702 $ 30,152 The tax effect on stock-based compensation expense above was calculated using a blended statutory rate of 25.5%, 25.2%, and 25.1% for the years ended December 31, 2020, 2019 and 2018, respectively. However, due to the valuation allowance recorded on the Company's domestic deferred tax assets, there was no tax effect related to stock-based compensation expense for the year ended December 31, 2018. Stock Options The following weighted average assumptions were used to value options granted during the periods indicated: December 31, 2020 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) 0.0 6.5 0.0 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, 2017 2,254,565 $ 19.23 4.3 $ 69,939 Granted — — Exercised (359,345) 14.76 Forfeited (7,251) 27.51 Outstanding as of December 31, 2018 1,887,969 20.05 3.4 56,046 Granted 81,807 49.02 Exercised (783,216) 13.52 Forfeited (35,974) 48.33 Outstanding as of December 31, 2019 1,150,586 25.66 3.4 50,590 Granted — — Exercised (705,333) 18.83 Forfeited (7,213) 48.70 Outstanding as of December 31, 2020 438,040 36.28 4.1 20,156 Options exercisable 397,861 34.99 3.7 18,817 The aggregate intrinsic values in the table below represent the total pre-tax intrinsic value (the aggregate difference between the fair value of the Company’s common stock on December 31, 2020, 2019 and 2018 of $82.29, $69.63 and $49.19, respectively, and the exercise price of in-the-money options) that would have been received by the option holders had all option holders exercised their options as of that date. Other information is as follows: Year Ended December 31, 2020 2019 2018 Total intrinsic value of options exercised $ 35,687 $ 40,893 $ 15,667 Cash received from exercises of stock options 10,760 10,592 5,305 Exercise prices of stock options outstanding as of December 31, 2020 range from $10.40 to $55.29. At December 31, 2020, there was an immaterial amount of unrecognized compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 1.1 years. Restricted Stock Units and Restricted Stock Awards Periodically, the Company grants restricted stock units and awards and performance stock units and awards to employees. Restricted stock units awards vest one-third on the first anniversary of the grant date and quarterly thereafter. Performance-based restricted units and awards vest upon the achievement of certain pre-established business and financial metrics as well as a subsequent 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% of the original grant number. If these metrics are achieved, as defined in the individual grant terms, these shares would cliff vest three years from the grant date. The following is a summary of the activity for unvested restricted stock units and awards granted under the Company’s plans: RSUs PSUs Weighted- Weighted- Average Grant Average Grant Number of Date Fair Value Number of Date Fair Value Shares per Share Shares per Share Outstanding as of December 31, 2017 1,629,971 $ 32.60 136,668 $ 31.03 Granted 940,113 55.24 55,986 61.25 Vested (1,005,347) 32.73 (68,334) 31.03 Forfeited (103,269) 40.37 — — Outstanding as of December 31, 2018 1,461,468 46.59 124,320 44.64 Granted 997,971 61.91 202,168 69.68 Vested (1,029,790) 45.11 (68,334) 31.03 Forfeited (110,779) 53.16 (4,036) 61.27 Outstanding as of December 31, 2019 1,318,870 58.88 254,118 67.96 Granted 970,390 74.61 81,689 83.47 Vested (804,982) 57.77 — — Forfeited (138,931) 62.14 (33,010) 64.70 Outstanding as of December 31, 2020 1,345,347 70.56 302,797 72.50 At December 31, 2020, there was $72,238 of unrecognized compensation expense related to unvested restricted stock units and awards, which the Company expects to recognize over a weighted-average period of 1.9 years. At December 31, 2020, there was $8,201 of unrecognized compensation expense related to unvested performance-based restricted stock units and awards, which the Company expects to recognize over a weighted-average period of 1.8 years. In connection with the unexpected death of our former CEO, the Company modified certain of his outstanding equity awards. The modifications included the extension of exercise periods for his outstanding stock options and the immediate vesting of his outstanding RSU s. All unvested PSUs were forfeited . As a result of these modifications, the Company recorded additional non-cash compensation expense of $4,286 in 2019. In 2020, the Company recognized a gain of $2,524 in other income (expense), net as a result of a fair value adjustment upon settlement of the former CEO’s stock options. |
Benefit Plan
Benefit Plan | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Benefit Plan | Benefit Plan The Company sponsors a profit sharing and savings plan under Section 401(k) of the Internal Revenue Code, covering substantially all domestic employees. The Company made voluntary employer matching contributions as follows: Year Ended December 31, 2020 2019 2018 Voluntary employer matching contributions $ 6,247 $ 6,044 $ 4,778 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Loss before income tax benefit was generated in the following jurisdictions: Year Ended December 31, 2020 2019 2018 Domestic $ (17,234) $ (61,047) $ (18,242) Foreign 9,189 12,952 9,080 Total $ (8,045) $ (48,095) $ (9,162) The components of the income tax expense (benefit) charged to operations are summarized as follows: Year Ended December 31, 2020 2019 2018 Current: Federal $ (1,086) $ 4 $ 4,564 State 2,111 2,803 1,044 Foreign (4,542) 5,930 4,849 (3,517) 8,737 10,457 Deferred: Federal (2,659) (33,952) (19,444) State 1,158 (5,603) (3,182) Foreign (383) (75) (1,003) (1,884) (39,630) (23,629) Total $ (5,401) $ (30,893) $ (13,172) Net deferred tax assets (liabilities) consisted of the following: December 31, 2020 2019 Deferred revenue $ 5,811 $ 5,148 Prepaid expenses and accruals 8,737 9,533 Deferred rent and lease incentives 255 273 Right of use asset (25,937) (18,507) Lease liability 30,752 22,983 Net operating loss and tax credit carryforwards 87,648 86,952 Property and equipment and intangible assets (113,041) (127,255) Stock-based compensation expense 9,122 8,033 Investment in partnerships 1,727 2,196 Convertible Notes (22,951) (8,471) Other 639 2,218 Total deferred tax liabilities, net (17,238) (16,897) Less: valuation allowance (17,502) (12,584) Net deferred tax liabilities $ (34,740) $ (29,481) 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 Base-Erosion Anti-abuse Tax (“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”). In 2019, the Company reevaluated the entity 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 also are no longer subject to GILTI. In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted into United States law. The CARES Act includes provisions which impact the Company, namely the temporary increase of the 163(j) limitation to 50% for tax years beginning in 2019 and 2020, the adjustment of qualified improvement property to a 15-year depreciable life, and a five-year carryback of any NOL generated in a taxable year beginning after December 31, 2017 and before January 1, 2021. A carryback of the 2019 NOL generated by the Company was filed in 2020 and the related refund of $1,224 is expected to be received in early 2021. The deferred tax liability that is not being recorded because of the Company's assertion to permanently reinvest the earnings of its India subsidiaries is $5,550 related to the withholding tax in India, net of an assumed foreign tax deduction for this amount in the U.S. The valuation allowance for deferred tax assets as of December 31, 2020 and 2019 was $17,502 and $12,584, respectively. The change in the valuation allowance from 2019 to 2020 was primarily related to additional R&D credits generated during 2020. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some or all of the deferred tax assets will be realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence is the cumulative pre-tax loss incurred over the three years ended December 31, 2020. Such objective evidence limits the ability to consider other subjective evidence such as the Company's projections for future growth. On the basis of this evaluation, as of December 31, 2020, a valuation allowance of $17,502 has been recorded to record only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as the Company's projections for growth. The expected income tax provision (benefit) calculated at the statutory federal rate differs from the actual provision as follows: Year Ended December 31, 2020 2019 2018 Tax benefit, at U.S. federal statutory tax rate $ (1,787) $ (10,012) $ (1,559) State income tax benefit, net of federal benefit (2,461) (5,390) (1,714) Effect of stock-based compensation excess tax benefit (9,349) (11,983) (7,782) Effect of permanent items 258 1,048 2,967 Effect of India partnerships 2,977 — — Change in valuation allowance 16,210 (3,364) (4,244) Effect of change in state and foreign income tax rates 1,323 2,449 (269) Uncertain tax positions (6,093) 4,478 (2,062) BEAT liability — — 3,760 Research and development credits (5,939) (6,756) (4,770) State net operating loss adjustment 31 (1,588) — Other (571) 225 2,501 Income tax benefit $ (5,401) $ (30,893) $ (13,172) At December 31, 2020, the Company had NOL carryforwards, before any uncertain tax position reserves, for federal income tax purposes of approximately $242,000 available to offset future federal taxable income, if any, of which $241,000 expire through 2040 and $1,000 are carried forward indefinitely. In addition, as of December 31, 2020, the Company had NOL carryforwards for state income tax purposes of approximately $211,000 available to reduce future income subject to income taxes. The state NOL carryforwards expire through 2040. In addition, at December 31, 2020, the Company had a federal income tax receivable of approximately $727 related to the Alternative Minimum Tax (“AMT”) refund which it expects to receive in early 2021. As a result of tax reform, AMT credits are refundable for any taxable year beginning after 2017 and before 2022 in an amount equal to 50% (100% in the case of taxable years beginning in 2021) of the excess of the minimum tax credit for the taxable year over the amount of the credit allowable for the year against regular tax liability. Thus, the minimum tax credit was reclassified from a deferred tax asset to an income tax receivable. The Company also had minimal AMT credits for California, which are available to reduce future California income taxes, if any, over an indefinite period. In addition, the Company had research and development (“R&D”) credit carryforwards of approximately $26,958 for federal and $11,799 for California and Illinois, as well as foreign tax credits of $886 available to offset federal income tax. Federal R&D credits begin to expire in 2022 through 2040. California R&D credits carryover indefinitely. A reconciliation of the beginning and ending amount of unrecognized tax benefit follows: Year Ended December 31, 2020 2019 2018 Balance at beginning of year $ 18,939 $ 15,628 $ 18,312 Additions based on tax positions related to the current year 1,420 2,261 1,907 Additions (reductions) based on tax positions related to prior years (2,793) 1,050 (3,976) Reductions for settlements with taxing authorities related to prior years (2,434) — (615) Balance at end of year $ 15,132 $ 18,939 $ 15,628 At December 31, 2020, the amount of unrecognized tax benefits that would benefit the Company’s effective tax rate, if recognized, was $15,132. At this time, the Company estimates that the liability for unrecognized tax benefits could decrease by an estimated $1,495 in the next twelve months as it is anticipated that reviews by tax authorities will be completed and voluntary disclosure agreements settled. The Company recognizes potential interest and penalties related to unrecognized tax benefits in income tax expense. For the years ended December 31, 2020 and 2019, income tax expense (benefit) included $(4,875) and $1,476, respectively, of potential interest and penalties related to unrecognized tax benefits. The Company had accrued interest and penalties of $1,383 and $7,336 as of December 31, 2020 and 2019, respectively. The Company files a consolidated federal income tax return and separate tax returns with various states. Additionally, foreign subsidiaries of the Company file tax returns in foreign jurisdictions. The Company was notified by the Internal Revenue Service (“IRS”) in December 2017 that the calendar year 2015 and 2016 federal income tax returns have been selected for audit by the IRS. The Company’s tax returns for the 2015-2019 calendar years remain open to examination by the IRS in their entirety. With respect to state taxing jurisdictions, the Company’s tax returns for the 2016-2019 calendar years remain open to examination by various state revenue services. The Company's Indian subsidiaries are currently under examination by the India Tax Authority for the fiscal years ended March 31, 2020, 2011 and 2010. Based on the outcome of examinations of the Company's subsidiaries or the result of the expiration of statutes of limitations, it is reasonably possible that the related unrecognized tax benefits could change from those recorded in the consolidated balance sheets. It is possible that one or more of these audits may be finalized within the next twelve months. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net 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 net 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 10—Debt”) on diluted net income per share using the treasury stock method since they may be settled in cash, shares or a combination thereof at the Company’s option. As a result, the Convertible Notes due 2023 and Convertible Notes due 2025 have no effect on diluted net income per share until the Company’s stock price exceeds the conversion price of $68.31 per share and $106.74 per share, respectively, and certain other criteria are met, 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 net income per share if they are settled in cash and will have an impact on dilutive net income per share if they are settled in shares upon conversion. See “Note 2—Summary of Significant Accounting Policies” for information regarding the adoption of ASU 2020-06. The following table provides the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to Envestnet, Inc.: Year Ended December 31, 2020 2019 2018 Basic income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ (3,110) $ (16,782) $ 5,755 Basic number of weighted-average shares outstanding 53,589,232 50,937,919 45,268,002 Basic net income (loss) per share $ (0.06) $ (0.33) $ 0.13 Diluted income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ (3,110) $ (16,782) $ 5,755 Basic number of weighted-average shares outstanding 53,589,232 50,937,919 45,268,002 Effect of dilutive shares: Options to purchase common stock — — 1,304,493 Unvested restricted stock units — — 811,590 Convertible Notes — — — Warrants — — — Diluted number of weighted-average shares outstanding 53,589,232 50,937,919 47,384,085 Diluted net income (loss) per share $ (0.06) $ (0.33) $ 0.12 Securities that were anti-dilutive and therefore excluded from the computation of diluted net income (loss) per share are as follows: December 31, 2020 2019 2018 Options to purchase common stock 438,040 1,150,586 — Unvested RSU's and PSU's 1,648,144 1,572,988 — Convertible Notes (1) 9,898,549 5,050,505 7,793,826 Warrants 470,000 470,000 470,000 Total anti-dilutive securities 12,454,733 8,244,079 8,263,826 (1) For 2020, this amount includes 4,848,044 of additional potential common shares related to the Convertible Notes due 2025 which were issued in August 2020 (See “Note 10—Debt”). For 2019, this amount does not include 2,743,321 of potential common shares related to the Convertible Notes due 2019 as they were settled in cash at maturity in December 2019. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Business segments are generally organized around the Company's business services. The Company's 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 – 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 operating expenses include salary and benefits for certain corporate officers, certain types of professional service expenses and insurance, acquisition related transaction costs, restructuring charges and other non-recurring and/or non-operationally related expenses. Intersegment revenues were not material for the year ended December 31, 2020. See “Note 14—Revenues and Cost of Revenues” for detail of revenues by segment. The following table presents a reconciliation from income (loss) from operations by segment to consolidated net income (loss) attributable to Envestnet, Inc.: Year Ended December 31, 2020 2019 2018 Envestnet Wealth Solutions $ 91,501 $ 67,713 $ 75,491 Envestnet Data & Analytics (9,943) (25,262) (10,013) Nonsegment operating expenses (62,117) (58,524) (51,313) Income (loss) from operations 19,441 (16,073) 14,165 Interest expense, net (30,392) (29,173) (22,840) Other income (expense), net 2,906 (2,849) (487) Consolidated loss before income tax benefit (8,045) (48,095) (9,162) Income tax benefit (5,401) (30,893) (13,172) Consolidated net income (loss) (2,644) (17,202) 4,010 Add: Net (income) loss attributable to non-controlling interest (466) 420 1,745 Consolidated net income (loss) attributable to Envestnet, Inc. $ (3,110) $ (16,782) $ 5,755 A summary of consolidated total assets, consolidated depreciation and amortization and consolidated capital expenditures by segment follows: December 31, 2020 2019 Segment assets: Envestnet Wealth Solutions $ 1,634,153 $ 1,297,891 Envestnet Data & Analytics 510,137 503,993 Consolidated total assets $ 2,144,290 $ 1,801,884 Year Ended December 31, 2020 2019 2018 Segment depreciation and amortization: Envestnet Wealth Solutions $ 80,714 $ 65,746 $ 45,139 Envestnet Data & Analytics 32,947 35,525 32,487 Consolidated depreciation and amortization $ 113,661 $ 101,271 $ 77,626 Year Ended December 31, 2020 2019 2018 Segment capital expenditures: Envestnet Wealth Solutions $ 46,891 $ 42,395 $ 36,406 Envestnet Data & Analytics 20,105 11,548 8,186 Consolidated capital expenditures $ 66,996 $ 53,943 $ 44,592 |
Geographical Information
Geographical Information | 12 Months Ended |
Dec. 31, 2020 | |
Segments, Geographical Areas [Abstract] | |
Geographical Information | Geographical Information The following table sets forth certain long-lived assets including property and equipment, net and internally developed software, net by geographic area: December 31, 2020 2019 United States $ 140,651 $ 108,992 India 2,970 3,988 Other 849 1,039 Total long-lived assets, net $ 144,470 $ 114,019 See “Note 14—Revenues and Cost of Revenues” for detail of revenues by geographic area. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
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 consolidated balance sheets. The Company enters into unconditional purchase obligations arrangements for certain of its services that it receives in the normal course of business. As of December 31, 2020, the Company estimated future minimum unconditional purchase obligations of approximately $56,000. 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. On September 17, 2019, the Company and Yodlee filed a motion to dismiss certain of the claims in the complaint filed by FinancialApps, including the copyright infringement, unfair competition and fraud claims. On August 25, 2020, the District Court granted in part and denied in part the Company and Yodlee’s motion. Specifically, the Company and Yodlee prevailed on FinancialApps’ counts alleging copyright infringement and violations of the Illinois Deceptive Trade Practices Act. And while the Court was receptive to Envestnet and Yodlee’s argument that several of FinancialApps’ other counts are based on allegations that amount to copyright infringement—and therefore should fail due to copyright preemption—the Court found that FinancialApps had alleged enough conduct distinct from copyright infringement to survive dismissal at this early stage. On October 30, 2019, the Company and Yodlee filed counterclaims against FinancialApps. Yodlee alleges that FinancialApps fraudulently induced it to enter into contracts with FinancialApps, then breached those contracts. FinancialApps has filed a motion to dismiss Yodlee’s counterclaims. On September 15, 2020, the District Court denied FinancialApps’ motion on all counts except for the breach-of-contract claim which was dismissed on a pleading technicality without prejudice. On that count, the Court granted Yodlee leave to amend its counterclaim, cure the technical deficiency, and reassert its claim. Yodlee and Envestnet filed amended counterclaims on September 30, 2020. The amended counterclaims (1) cure that technical deficiency and reassert Yodlee’s contract counterclaim; and (2) broaden the defamation counterclaims arising out of various defamatory statements FinancialApps disseminated in the trade press after filing the lawsuit. On January 14, 2021, the Court ordered that (i) FinancialApps’s claims against Yodlee—as well as Yodlee’s counterclaims against FinancialApps—must be tried before the judge instead of a jury pursuant to a jury waiver provision in the parties’ agreement; and (ii) FinancialApps’s claims against Envestnet (and Envestnet’s counterclaim) must be heard by a jury. The Court has scheduled the Envestnet jury trial to take place before the Yodlee bench trial. The Company believes FinancialApps’s allegations are without merit and intends to defend the action and litigate the counterclaims vigorously. The Company and Yodlee were also named as defendants in a putative class action lawsuit filed on August 25, 2020, by Plaintiff Deborah Wesch in the United States District Court for the Northern District of California. On October 21, 2020, an amended class action complaint was filed by Plaintiff Wesch and nine additional named plaintiffs. The case caption is Deborah Wesch, et al., v. Yodlee, Inc., et al., Case No. 3:20-cv-05991-SK. Plaintiffs allege that Yodlee unlawfully collected their financial transaction data when plaintiffs linked their bank accounts to a mobile application that uses Yodlee’s API, and plaintiffs further allege that Yodlee unlawfully sold the transaction data to third parties. The complaint alleges violations of certain California statutes and common law, including the Unfair Competition Law, and federal statutes, including the Stored Communications Act. Plaintiffs are seeking monetary damages and equitable and injunctive relief on behalf of themselves and a putative nationwide class and California subclass of persons who provided their log-in credentials to a Yodlee-powered app in an allegedly similar manner from 2014 to the present. The Company believes that it is not properly named as a defendant in the lawsuit and it further believes, along with Yodlee, that plaintiffs’ claims are without merit. On November 4, 2020, the Company and Yodlee filed separate motions to dismiss all of the claims in the complaint. On February 16, 2021, the district court granted in part and denied in part Yodlee’s motion to dismiss the amended complaint and granted the plaintiffs leave to further amend. The court reserved ruling on the Company’s motion to dismiss and granted limited jurisdictional discovery to the plaintiffs. The Company and Yodlee intend to vigorously defend the lawsuit. The Company’s subsidiary, Envestnet Asset Management, Inc. (“EAM”), has been named as a defendant in a putative class action lawsuit filed on December 28, 2020 in the United States District Court for the Northern District of Alabama. The case caption is Drake v. BBVA USA Bancshares, Inc. et al., No. 2:20-CV-02076-ACA. The plaintiff alleges that EAM, acting as investment advisor to BBVA USA Bancshares, Inc.’s Compass SmartInvestor 401(k) Plan (the “SmartInvestor Plan”), among others, breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”) in connection with the selection and maintenance of the SmartInvestor Plan’s investment options. The plaintiff seeks unspecified damages on behalf of a class of SmartInvestor Plan participants from July 17, 2013 through December 28, 2020. While EAM has not yet responded to the complaint, EAM believes that it is not properly named as a defendant in the lawsuit and it further believes, along with the Company, that the claims 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 December 31, 2020. Further, while any possible range of loss cannot be reasonably estimated at this time, the Company does not believe that the outcome of any of these proceedings, individually or in the aggregate, would, if determined adversely to it, have a material adverse effect on its financial condition or business, although an adverse resolution of legal proceedings could have a material adverse effect on the Company’s results of operations or cash flow in a particular quarter or year. Contingencies Certain of the Company’s revenues are subject to sales and use taxes in certain jurisdictions where it conducts business in the United States. During 2020 and 2019, the Company estimated a sales and use tax liability of $6,563 and $10,220, respectively, related to revenues in multiple jurisdictions. This amount is included in accrued expenses and other liabilities in the consolidated balance sheets. For the years ended December 31, 2020 and 2019, the Company also estimated a sales and use tax receivable of $2,087 and $3,346, respectively, related to the estimated recoverability of a portion of the liability from customers. This amount is included in prepaid expenses and other current assets in the consolidated balance sheets. Additional future information obtained from the applicable jurisdictions may affect the Company’s estimate of its sales and use tax liability, but such change in the estimate cannot currently be made. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation —The consolidated financial statements include the accounts of Envestnet and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. |
Foreign Currency | Foreign Currency —Accounts for the Envestnet Wealth Solutions segment that are denominated in a non-U.S. currency have been remeasured 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 consolidated balance sheets as accumulated other comprehensive income (loss) within stockholders' equity. The Company is also subject to gains and losses from foreign currency denominated transactions and the remeasurement of foreign currency denominated balance sheet accounts, both of which are included in other income (expense), net in the consolidated statements of operations. |
Management Estimates | Management Estimates —Management has made certain estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with GAAP. Areas requiring the use of management estimates relate to estimating uncollectible receivables, revenue recognition, valuations and assumptions used for impairment testing of goodwill, intangible and other long-lived assets, right of use assets, restricted stock and stock options issued, contingent consideration, realization of deferred tax assets, uncertain tax positions, sales tax liabilities, operating lease liabilities, fair value of the liability portion of the convertible debt, fair value of warrants issued, commitments and contingencies and assumptions used to allocate purchase prices in business combinations. Actual results could differ materially from these estimates under different assumptions or conditions. |
Revenue Recognition | Revenue Recognition The Company derives revenues from asset-based and subscription-based services and professional services and other sources. Revenues are recognized when control of these services is transferred to our customers, in an amount that reflects the consideration that we expect to be entitled to in exchange for those services. All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers. Sales and usage-based taxes are excluded from revenues. Asset-Based Recurring Revenues— Asset-based recurring revenues primarily consist of fees for providing customers continuous access to platform services through the Company’s uniquely customized platforms. These platform services include investment manager research, portfolio diagnostics, proposal generation, investment model management, rebalancing and trading, portfolio performance reporting and monitoring solutions, billing and back office and middle-office operations and administration and are made available to customers throughout the contractual term from the date the customized platform is launched. The asset-based fees the Company earns are generally based upon variable percentages of assets managed or administered on our platforms. The fee percentage varies based on the level and type of services the Company provides to its customers, as well as the values of existing customer accounts. The values of the customer accounts are affected by inflows or outflows of customer funds and market fluctuations. The platform services are substantially the same over each quarter and performed in a similar manner over the contract period, and are considered stand-ready promises. The platform services that are delivered to the customer over the quarter are considered distinct, as the customer benefits distinctly from each increment of our services and each quarter is separately identified in the contract, and are considered to be a single performance obligation under ASC 606. The pricing generally resets each quarter and the pricing structure is consistent throughout the term of the contract. The variable fees are generally calculated and billed quarterly in advance based on preceding quarter-end values and the variable amounts earned from the platform services relate specifically to the benefits transferred to the customer during that month or quarter. Accordingly, revenue is allocated to the specific quarter in which services are performed. The asset-based contracts generally contain one performance obligation and revenue is recognized on a ratable basis over the quarter beginning on the date that the platform services are made available to the customer as the customer simultaneously consumes and receives the benefits of the services. All asset-based fees are recognized in the Envestnet Wealth Solutions segment. For certain services provided by third parties, the Company evaluates whether it is the principal (revenues reported on a gross basis) or agent (revenues reported on a net basis). Generally, the Company reports customer fees including charges for third party service providers where the Company has a direct contract with such third party service providers on a gross basis, whereas the amounts billed to its customers are recorded as revenues, and amounts paid to third party service providers are recorded as cost of revenues. The Company is the principal in the transaction because it controls the services before they are transferred to its customers. Control is evidenced by the Company being primarily responsible to its customers and having discretion in establishing pricing. Subscription-Based Recurring Revenues— Subscription-based recurring revenues primarily consist of fees for providing customers continuous access to the Company’s platform for wealth management and financial wellness. The subscription-based fees generally include fixed fees and or usage-based fees. Generally, the subscription services are substantially the same over each quarter and performed in a similar manner over the contract period, and are considered stand-ready promises. Quarterly subscription services are considered distinct as the customer can benefit from each increment of services on its own and each quarter is separately identified in the contract, and services are considered to be a single performance obligation under ASC 606. The usage-based pricing generally resets each quarter and the pricing structure is generally consistent throughout the term of the contract. The fixed fees are generally calculated and billed quarterly in advance. The usage-based fees are generally calculated and are billed either monthly or quarterly based on the actual usage and relate specifically to the benefits transferred to the customer during that quarter. Accordingly, revenue is allocated to the specific quarter in which services are performed. Fixed fees are generally recognized on a ratable basis over the quarter beginning when the subscription services are made available to the customer, as the customer simultaneously receives and consumes the benefits of the subscription services. Usage-based revenue is recognized on a monthly basis as the customer receives and consumes the benefit as the Company provides the services. Subscription-based fees are recognized in both the Envestnet Wealth Solutions and Envestnet Data & Analytics segments. Professional Services and Other Revenues— The Company earns professional services fees by providing contractual customized services and platform software development as well as initial implementation fees. Professional services contracts generally have fixed prices, and generally specify the deliverables in the contract. Certain professional services contracts are billed on a time and materials basis and revenue is recognized over time as the services are performed. For contracts billed on a fixed price basis, revenue is recognized over time based on the proportion of services performed. Initial implementation fees are fixed and are generally recognized ratably over the contract term. Other revenues primarily includes revenue related to the Advisor Summit. Other revenues are recognized when the events are held. Other revenues are not significant. The majority of the Company's professional services and other contracts contain one performance obligation. Professional services and other revenues are recognized in both the Envestnet Wealth Solutions and Envestnet Data & Analytics segments. Arrangements with Multiple Performance Obligations —Certain of the Company’s contracts with customers contain multiple performance obligations such as platform services performance obligation and professional services performance obligation. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. Standalone selling prices of services are estimated based on observable transactions when these services are sold on a standalone basis or based on expected cost plus margin. 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 obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation. Contract Balances —The Company records contract liabilities (deferred revenue) when cash payments are received in advance of its performance. The term between invoicing date and when payment is due is generally not significant. For the majority of its arrangements, the Company requires advance quarterly payments before the services are delivered to the customer. Deferred Revenue —Deferred revenue primarily consists of implementation fees, professional services and subscription fee payments received in advance from customers. Deferred Sales Incentive Compensation —Sales incentive compensation earned by the Company’s sales force is considered an incremental and recoverable cost to acquire a contract with a customer. Sales incentive compensation for initial contracts is deferred and amortized on a straight-line basis over the period of benefit. The Company determined the period of benefit by taking into consideration its customer contracts, life of the technology and other factors. Sales incentive compensation for renewal contracts are deferred and amortized on a straight-line basis over the related contractual renewal period. Deferred sales incentive compensation is included in other non-current assets in the consolidated balance sheets and amortization expense is included in compensation and benefits expenses in the consolidated statements of operations. The Company has applied the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in compensation and benefits expenses in the consolidated statements of operations. Cost of Revenues— Cost of revenues primarily includes expenses related to third party investment management and clearing, custody and brokerage services. Generally, these expenses are calculated based upon a contractual percentage of the market value of assets held in customer accounts measured as of the end of each quarter and are recognized ratably throughout the quarter based on the number of days in the quarter. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts—The Company evaluates the need for an allowance for doubtful accounts for potentially uncollectible fees receivable. In establishing the amount of the allowance, if any, customer-specific information is considered related to delinquent accounts, including historical loss experience and current economic conditions. |
Cash and Cash Equivalents | Cash and Cash Equivalents—The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair value. The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. |
Investments | Investments —The Company has investments in private companies that are recorded using the equity method of accounting. The Company uses the equity method of accounting because of its less than 50% ownership and lack of control in these companies. These investments are included in other non-current assets on the consolidated balance sheets. The Company records the portion of its earnings or losses in these privately held companies’ net income or loss on a one quarter lag from the actual results of operations as a component of other income (expense), net on the consolidated statements of operations. The Company reviews all investments on a regular basis to evaluate the carrying amount and economic viability. This evaluation process is based on information that the Company requests directly from these investees and includes, but is not limited to, the review of the investee’s cash position, financing needs, earnings/revenue outlook, operational performance, management/ownership changes and competition. As this information is not subject to the same disclosure regulations as U.S. |
Property and Equipment | Property and Equipment— Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of furniture and equipment is computed using the straight-line method based on estimated useful lives of the depreciable assets. Leasehold improvements are amortized on a straight-line basis over their estimated economic useful lives or the remaining lease term, whichever is shorter. Improvements are capitalized, while repairs and maintenance costs are charged to operations as incurred. Assets are reviewed for recoverability whenever events or circumstances indicate the carrying value may not be recoverable. There were no impairments of property and equipment for the years ended December 31, 2020, 2019 and 2018. |
Internally Developed Software for Internal Use | Internally Developed Software for Internal Use—Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs are expensed as incurred. Internally developed software is amortized on a straight-line basis over its estimated useful life. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets— Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. Goodwill is reviewed for impairment each year using a qualitative or quantitative process that is performed at least annually or whenever events or circumstances indicate a likely reduction in the fair value of a reporting unit below its carrying amount. The Company has concluded that it has two reporting units. The Company performs the annual impairment analysis on October 31 in order to provide management time to complete the analysis prior to year-end. Prior to performing the quantitative evaluation, an assessment of qualitative factors may be performed to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value. If it is determined that it is unlikely that the carrying value exceeds the fair value, the Company is not required to complete the quantitative goodwill impairment evaluation. If it is determined that the carrying value may exceed fair value when considering qualitative factors, a quantitative goodwill impairment evaluation is performed. When performing the quantitative evaluation, if the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the difference will be recorded. No goodwill impairment charges have been recorded for the years ended December 31, 2020, 2019 and 2018. |
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 and 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. Adoption of the standard had a material impact on the Company's consolidated balance sheets, but did not have an impact on the Company's 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 operating ROU assets, current operating lease liabilities and non-current operating lease liabilities in the Company's 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. The operating lease ROU asset also includes prepaid payments and excludes lease incentives. 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 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. |
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 and also requires entities to display the fair value of the selected assets and liabilities on the face of the balance sheets. The Company has not elected the ASC 825-10 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. Financial assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the inputs used to measure fair value into the following levels: Level I: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date. Level II: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or inputs that are observable and can be corroborated by observable market data. Level III: Inputs reflect management’s best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments. |
Income Taxes | Income Taxes— The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce deferred tax assets to an amount that is more likely than not to be realized. |
Business Combinations | Business Combinations— The Company accounts for business combinations under the acquisition method. The cost of an acquired company is assigned to the tangible and intangible assets acquired and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires |
Stock-Based Compensation | Stock-Based Compensation— Compensation cost relating to stock-based awards made to employees and directors is recognized in the consolidated financial statements using the Black-Scholes option-pricing model in the case of non-qualified stock option awards, and intrinsic value in the case of restricted stock awards. The Company measures the cost of such awards based on the estimated fair value of the award measured at the grant date and recognizes the expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the fair value of stock options requires the Company to make several estimates, including the volatility of its stock price, the expected life of the option, forfeiture rate, dividend yield and interest rates. The Company estimates the expected life of its options using historical internal forfeiture data. The Company estimates stock-price volatility using historical third-party quotes of Envestnet’s common stock. The Company utilizes a risk-free interest rate, which is based on the yield of U.S. zero coupon securities with a maturity equal to the expected life of the options. The Company has not and does not expect to pay dividends on its common shares. The Company is required to estimate expected forfeitures of stock-based awards at the grant date and recognize compensation cost only for those awards expected to vest. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. Therefore, changes in the forfeiture assumptions may impact the total amount of expense ultimately recognized over the vesting period. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances. |
Convertible Notes | Convertible Notes —In May 2018, the Company issued $345,000 of 1.75% convertible notes due June 2023. In August 2020, the Company issued $517,500 of 0.75% convertible notes due August 2025. Collectively the “Convertible Notes” are accounted for in accordance with ASC 470-20. The Company has determined that the embedded conversion options in the Convertible Notes are not required to be separately accounted for as a derivative under GAAP. The Company separately accounts for the liability and equity components of Convertible Notes that can be settled in cash by allocating the proceeds from issuance between the liability component and the embedded conversion option, or equity component, in accordance with accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The value of the equity component is calculated by first measuring the fair value of the liability component, using the interest rate of a similar liability that does not have a conversion feature, as of the issuance date. The difference between the proceeds from the convertible debt issuance and the amount measured as the liability component is recorded as the equity component with a corresponding discount recorded on the debt. The Company recognizes the accretion of the resulting discount using the effective interest method as part of interest expense in its consolidated statements of operations. See “Recent Accounting Pronouncements” within this footnote. |
Non-controlling Interest | Non-controlling Interest —In March 2018, the Company initially acquired a 43% fully diluted interest in a private company for cash consideration of $1,333. In connection with the acquisition, the Company was granted the ability to appoint two members to the private company's board of directors. The appointment of two board members gives the Company the majority of the board's voting rights. As a result, the Company uses the consolidation method of accounting for this investment. The private company was formed to enable financial advisors to provide insurance and income protection products to their clients. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements —In February 2016, the FASB issued ASU 2016-02, “Leases,” which amends the requirements for assets and liabilities recognized for all leases longer than twelve months. This standard was 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 consolidated financial statements. See “Note 11—Leases.” 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. This standard requires that entities estimate credit losses based upon an “expected credit loss” approach rather than the “incurred loss” approach. The new approach requires entities to measure all expected credit losses for financial assets based on historical experience, current conditions and reasonable forecasts of collectability. This standard was effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2019. These changes became effective for the Company's fiscal year beginning January 1, 2020. Upon adoption, the Company recognized the cumulative effect of the initial application of ASU 2016-13 as an adjustment of $1,138, net of tax, to the opening balance of accumulated deficit. The Company does not expect the adoption of ASU 2016-13 to have a material impact to the results of its operations on an ongoing basis. 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 was effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The Company early adopted this standard beginning January 1, 2019, noting that this standard was applied prospectively. Adoption of this standard did not have a material impact on the Company's consolidated financial statements. Not Yet Adopted Accounting Pronouncements —In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This update aims to reduce complexity within the accounting for income taxes as part of the simplification initiative. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2020. The Company will adopt this standard beginning January 1, 2021, noting that this standard will be applied prospectively. Adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity.” This update simplifies the accounting for certain convertible instruments by reducing the number of accounting models available for convertible debt instruments and revises Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. Under the new guidance, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. In addition, the new guidance requires the if-converted method to be applied for all convertible instruments. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2021. Early adoption of the standard is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Adoption of the standard requires using either a modified retrospective or a full retrospective approach. The Company will early adopt this standard beginning January 1, 2021 using the modified retrospective approach. Adoption of this standard is expected to result in a decrease to accumulated deficit of approximately $28,000, a decrease to paid-in capital of approximately $115,000 and an increase to Convertible Notes of approximately $87,000. Interest expense recognized in future periods is expected to be reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost. The adoption will have no impact on the Company's consolidated statements of cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Restrictions on Cash and Cash Equivalents | The following table reconciles cash, cash equivalents and restricted cash from the consolidated balance sheets to amounts reported in the consolidated statements of cash flows: December 31, 2020 2019 2018 Cash and cash equivalents $ 384,565 $ 82,505 $ 289,345 Restricted cash included in prepaid expenses and other current assets — 82 158 Restricted cash included in other non-current assets 149 168 168 Total cash, cash equivalents and restricted cash $ 384,714 $ 82,755 $ 289,671 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
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: Cash and cash equivalents $ 4,876 Accounts receivable 4,962 Prepaid expenses and other current assets 3,773 Property and equipment, net 927 Other non-current assets 441 Identifiable intangible assets 135,700 Goodwill 79,891 Total assets acquired 230,570 Accounts payable (5,358) Accrued expenses (7,907) Deferred tax liability (23,300) Deferred revenue (806) Other non-current liabilities (64) Total liabilities assumed (37,435) Total net assets acquired $ 193,135 The consideration transferred in the acquisition was as follows: Cash consideration $ 11,173 Purchase consideration liability 6,240 Contingent consideration liability 7,580 Working capital adjustment 70 Total consideration transferred $ 25,063 The consideration transferred in the acquisition was as follows: Cash consideration $ 17,500 Contingent consideration liability 8,200 Total consideration transferred $ 25,700 The consideration transferred in the acquisition was as follows: Cash consideration $ 298,714 Stock consideration 222,484 Less: cash acquired (6,360) Total consideration transferred, net of cash acquired $ 514,838 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: 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 2,012 Identifiable intangible assets 253,000 Goodwill 323,951 Total assets acquired 600,405 Accounts payable and accrued expenses (1,661) Operating lease liabilities (2,012) Deferred income taxes (68,534) Deferred revenue (7,000) Total liabilities assumed (79,207) Total net assets acquired $ 521,198 |
Summary of intangible assets acquired, estimated useful lives and amortization method | A summary of estimated identifiable intangible assets acquired, estimated useful lives and amortization method follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ 113,500 13 Accelerated Proprietary technology 17,500 5 Straight-line Trade names and domains 4,700 6 Straight-line Total intangible assets acquired $ 135,700 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ 144 Total liabilities assumed (688) Identifiable intangible assets 4,100 Goodwill 21,507 Total net assets acquired $ 25,063 A summary of estimated intangible assets acquired, estimated useful lives and amortization method follows: Estimated Amortization Amount Useful Life in Years Method Proprietary technology $ 4,100 4 Straight-line The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Total tangible assets acquired $ 13 Total liabilities assumed (1,600) Identifiable intangible assets 11,700 Goodwill 15,587 Total net assets acquired $ 25,700 A summary of estimated intangible assets acquired, estimated useful lives and amortization method follows: Estimated Amortization Amount Useful Life in Years Method Customer list $ 8,500 10 Accelerated Proprietary technology 3,200 5 Straight-line Total intangible assets acquired $ 11,700 A summary of estimated intangible assets acquired, estimated useful lives and amortization method follows: Estimated Amortization Amount Useful Life in Years Method Customer lists $ 222,000 10-20 Accelerated Proprietary technologies 23,000 4 Straight-line Trade names 8,000 7 Straight-line Total intangible assets acquired $ 253,000 |
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. Year Ended December 31, 2019 Revenues $ 919,291 Net loss attributable to Envestnet, Inc. (16,860) Net loss per share attributable to Envestnet, Inc.: Basic $ (0.32) Diluted $ (0.32) |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consisted of the following: December 31, 2020 2019 Prepaid technology $ 13,165 $ 10,387 Non-income tax receivables 6,571 5,555 Advance payroll taxes and benefits 6,429 5,446 Prepaid insurance 1,777 1,919 Income tax prepayments and receivables 1,684 — Other 10,944 8,876 Total prepaid expenses and other current assets $ 40,570 $ 32,183 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property and equipment, net | Property and equipment, net consisted of the following: December 31, Estimated Useful Life 2020 2019 Cost: Computer equipment and software 3 years $ 72,443 $ 72,190 Leasehold improvements Shorter of the lease term or useful life of the asset 37,671 34,645 Office furniture and fixtures 3-7 years 11,249 10,832 Office equipment and other 3-5 years 7,151 6,850 Building and building improvements 7-39 years 2,669 2,647 Land Not applicable 940 940 132,123 128,104 Less: accumulated depreciation and amortization (84,154) (74,348) Total property and equipment, net $ 47,969 $ 53,756 |
Schedule of cost amount and related accumulated depreciation written off by category during the period | The following table presents the cost amounts and related accumulated depreciation written off by category: Year Ended December 31, 2020 Year Ended December 31, 2019 Accumulated Accumulated Cost Depreciation Cost Depreciation Computer equipment and software $ 9,844 $ (9,606) $ 12,597 $ (12,542) Leasehold improvements 1,775 (1,326) 229 (135) Office furniture and fixtures 320 (243) 42 (21) Office equipment and other 381 (348) 17 (17) Total property and equipment retirements $ 12,320 $ (11,523) $ 12,885 $ (12,715) |
Schedule of depreciation and amortization expense | Depreciation and amortization expense was as follows: Year Ended December 31, 2020 2019 2018 Depreciation and amortization expense $ 21,432 $ 20,777 $ 15,737 |
Internally Developed Software_2
Internally Developed Software, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Capitalized Computer Software, Net [Abstract] | |
Schedule of components of internally developed software, net | Internally developed software, net consisted of the following: December 31, Estimated Useful Life 2020 2019 Internally developed software 5 years $ 159,619 $ 104,703 Less: accumulated amortization (63,118) (44,440) Internally developed software, net $ 96,501 $ 60,263 |
Schedule of amortization expense | Amortization expense was as follows: Year Ended December 31, 2020 2019 2018 Amortization expense $ 18,670 $ 12,042 $ 8,033 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill by segment | Changes in the carrying amount of goodwill were as follows: Envestnet Envestnet Total Balance at December 31, 2018 $ 243,809 $ 275,293 $ 519,102 Private AI company acquisition — 21,507 21,507 PortfolioCenter acquisition 15,587 — 15,587 PIEtech acquisition 323,951 — 323,951 Foreign currency and other (100) (197) (297) Balance at December 31, 2019 583,247 296,603 879,850 Private Technology company acquisition — 7,019 7,019 Private Cloud Technology company acquisition 10,932 — 10,932 Private Financial Technology Design company acquisition 9,241 — 9,241 Foreign currency and other (70) (199) (269) Balance at December 31, 2020 $ 603,350 $ 303,423 $ 906,773 |
Schedule of components of intangible assets, net | Intangible assets, net consisted of the following: December 31, 2020 December 31, 2019 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Customer lists $ 591,520 $ (198,555) $ 392,965 $ 591,520 $ (148,517) $ 443,003 Proprietary technologies 54,914 (26,949) 27,965 87,714 (44,165) 43,549 Trade names 33,700 (19,589) 14,111 33,700 (14,663) 19,037 Total intangible assets $ 680,134 $ (245,093) $ 435,041 $ 712,934 $ (207,345) $ 505,589 |
Schedule of amortization expense | Amortization expense was as follows: Year Ended December 31, 2020 2019 2018 Amortization expense $ 73,559 $ 68,452 $ 53,856 |
Schedule of future amortization expense of the intangible assets | Future amortization expense of the Company's intangible assets as of December 31, 2020, is expected to be as follows: Years ending December 31: 2021 $ 63,645 2022 59,900 2023 45,551 2024 38,751 2025 35,485 Thereafter 191,709 Total $ 435,041 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Equity Method Investments | Summarized combined financial information for these investments is as follows (amounts represent 100% of investee financial information, except Envestnet ’ s proportional share of losses): December 31, Balance Sheets 2020 2019 Current assets $ 23,469 $ 2,457 Non-current assets 21,329 1,413 Current liabilities 11,325 775 Non-current liabilities 1,418 1,617 Year Ended December 31, Statements of Operations 2020 2019 2018 Revenues $ 35,603 $ 866 $ 1,327 Loss from operations (4,758) (6,192) (2,418) Net loss (5,062) (6,193) (2,438) Envestnet ’s proportional share of losses (5,399) (2,361) (1,146) Envestnet's proportional share of losses from the Company ’s equity method investments are included in other income (expense), net in the consolidated statements of operations. |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Schedule accrued expenses and other liabilities | Accrued expenses and other liabilities consisted of the following: December 31, 2020 2019 Accrued compensation and related taxes $ 71,039 $ 53,627 Accrued investment manager fees 57,894 48,720 Accrued professional services 9,240 6,315 Non-income tax payables 8,398 11,040 Accrued technology 4,701 3,042 Accrued charitable contribution — 5,020 Other accrued expenses 7,276 10,180 Total accrued expenses and other liabilities $ 158,548 $ 137,944 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of convertible debt obligations | The Company’s outstanding debt obligations as of December 31, 2020 and 2019 were as follows: December 31, 2020 2019 Revolving credit facility balance $ — $ 260,000 Convertible Notes due 2023 $ 345,000 $ 345,000 Unaccreted discount on Convertible Notes due 2023 (24,058) (33,491) Unamortized issuance costs on Convertible Notes due 2023 (4,306) (5,996) Convertible Notes due 2023 carrying value $ 316,636 $ 305,513 Convertible Notes due 2025 $ 517,500 $ — Unaccreted discount on Convertible Notes due 2025 (65,902) — Unamortized issuance costs on Convertible Notes due 2025 (11,731) — Convertible Notes due 2025 carrying value $ 439,867 $ — |
Schedule of interest expense | Interest expense was comprised of the following and is included in other income (expense), net in the consolidated statements of operations: Year Ended December 31, December 31, 2020 2019 2018 Accretion of debt discount $ 14,084 $ 15,040 $ 11,134 Coupon interest 7,442 8,917 6,650 Interest on revolving credit facility 5,786 4,065 3,994 Amortization of issuance costs 3,396 3,703 2,771 Undrawn and other fees 796 795 654 Total interest expense $ 31,504 $ 32,520 $ 25,203 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Future Minimum Lease Payments | Future minimum lease payments under non-cancellable leases, as of December 31, 2020, were as follows: Operating Leases Years Ending December 31, 2021 $ 18,789 2022 15,993 2023 14,731 2024 13,654 2025 13,067 Thereafter 87,303 Total future minimum lease payments 163,537 Less imputed interest (37,706) Total operating lease liabilities $ 125,831 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 consolidated balance sheets as of December 31, 2020 and December 31, 2019, based on the three-tier fair value hierarchy: December 31, 2020 Fair Value Level I Level II Level III Assets: Money market funds $ 84,110 $ 84,110 $ — $ — Assets used to fund deferred compensation liability 9,961 — — 9,961 Total assets $ 94,071 $ 84,110 $ — $ 9,961 Liabilities: Contingent consideration liability $ 12,559 $ — $ — $ 12,559 Deferred compensation liability 8,720 8,720 — — Total liabilities $ 21,279 $ 8,720 $ — $ 12,559 December 31, 2019 Fair Value Level I Level II Level III Assets: Money market funds $ 37,730 $ 37,730 $ — $ — Assets used to fund deferred compensation liability 8,390 — — 8,390 Total assets $ 46,120 $ 37,730 $ — $ 8,390 Liabilities: Contingent consideration liability $ 9,045 $ — $ — $ 9,045 Deferred compensation liability 8,208 8,208 — — Total liabilities $ 17,253 $ 8,208 $ — $ 9,045 |
Summary of changes in the fair value of the Company's Level 3 liability | The table below presents a reconciliation of the Company's contingent consideration liabilities, which were measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2019 to December 31, 2020: Fair Value of Contingent Consideration Liabilities Balance at December 31, 2019 $ 9,045 Private technology company acquisition 5,239 Fair market value adjustment on contingent consideration liability (3,105) Accretion on contingent consideration liabilities 1,380 Balance at December 31, 2020 $ 12,559 |
Summary of changes in the fair value of the Company's Level 3 assets | The table below presents a reconciliation of assets used to fund deferred compensation liability, which was measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2019 to December 31, 2020: Fair Value of Assets Used to Fund Deferred Compensation Liability Balance at December 31, 2019 $ 8,390 Contributions 1,060 Fair value adjustments 511 Balance at December 31, 2020 $ 9,961 |
Revenues and Cost of Revenues (
Revenues and Cost of Revenues (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | In accordance with ASC 606 requirements, the impact of adoption on the Company’s consolidated statements of operations was as follows: Year Ended December 31, 2018 As Reported Without Adoption of ASC 606 Effect of Change Higher/(Lower) Statements of Operations Revenues: Asset-based $ 481,233 $ 495,646 $ (14,413) Subscription-based 295,467 295,467 — Total recurring revenues 776,700 791,113 (14,413) Professional services and other revenues 35,663 35,840 (177) Total revenues 812,363 826,953 (14,590) Operating expenses: Cost of revenues 263,400 277,813 (14,413) Compensation and benefits 317,188 318,887 (1,699) Total operating expenses 798,198 814,310 (16,112) Income from operations 14,165 12,643 1,522 Net income 4,010 2,488 1,522 Net income attributable to Envestnet, Inc. $ 5,755 $ 4,233 $ 1,522 |
Schedule of disaggregation of revenue by major source | The following table presents the Company’s revenues disaggregated by major source: Year Ended December 31, 2020 Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Revenues: Asset-based $ 540,947 $ — $ 540,947 Subscription-based 248,810 177,697 426,507 Total recurring revenues 789,757 177,697 967,454 Professional services and other revenues 16,333 14,443 30,776 Total revenues $ 806,090 $ 192,140 $ 998,230 Year Ended December 31, 2019 Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Revenues: Asset-based $ 484,312 $ — $ 484,312 Subscription-based 207,606 171,207 378,813 Total recurring revenues 691,918 171,207 863,125 Professional services and other revenues 17,540 19,462 37,002 Total revenues $ 709,458 $ 190,669 $ 900,127 Year Ended December 31, 2018 Envestnet Wealth Solutions (1) Envestnet Data & Analytics (1) Consolidated (1) Revenues: Asset-based $ 481,233 $ — $ 481,233 Subscription-based 138,372 157,095 295,467 Total recurring revenues 619,605 157,095 776,700 Professional services and other revenues 13,000 22,663 35,663 Total revenues $ 632,605 $ 179,758 $ 812,363 (1) As noted above, prior period amounts have not been adjusted under the modified retrospective method. |
Summary of revenues from major customers | One customer accounted for more than 10% of the Company’s total revenues: Year Ended December 31, 2020 2019 2018 Fidelity 15 % 15 % 17 % |
Schedule of disaggregation of revenue by geography | The following table presents the Company’s revenues disaggregated by geography, based on the billing address of the customer: Year Ended December 31, 2020 2019 2018 United States $ 977,047 $ 871,456 $ 778,565 International (1), (2) 21,183 28,671 33,798 Total revenues $ 998,230 $ 900,127 $ 812,363 (1) No foreign country accounted for more than 10% of total revenues. (2) In 2018, upon adoption of ASU 2014-09, gross revenue recognition changed to net revenue recognition for one customer. |
Schedule of estimated revenue expected to be recognized in the future | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2020: Years ending December 31, 2021 $ 243,989 2022 172,981 2023 101,768 2024 53,620 2025 27,744 Thereafter 13,030 Total $ 613,132 |
Schedule of costs of revenues by revenue category | The following table summarizes cost of revenues by revenue category: Year Ended December 31, 2020 2019 2018 Asset-based $ 278,569 $ 243,913 $ 232,145 Subscription-based 26,934 28,904 25,192 Professional services and other 426 5,994 6,063 Total cost of revenues $ 305,929 $ 278,811 $ 263,400 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | Stock-based compensation expense under the Company's plans was as follows: Year Ended December 31, 2020 2019 2018 Stock-based compensation expense $ 56,292 $ 54,436 $ 40,245 Tax effect on stock-based compensation expense (14,354) (13,734) (10,093) Net effect on income $ 41,938 $ 40,702 $ 30,152 |
Schedule of weighted average assumptions used to value options granted | The following weighted average assumptions were used to value options granted during the periods indicated: December 31, 2020 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) 0.0 6.5 0.0 |
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, 2017 2,254,565 $ 19.23 4.3 $ 69,939 Granted — — Exercised (359,345) 14.76 Forfeited (7,251) 27.51 Outstanding as of December 31, 2018 1,887,969 20.05 3.4 56,046 Granted 81,807 49.02 Exercised (783,216) 13.52 Forfeited (35,974) 48.33 Outstanding as of December 31, 2019 1,150,586 25.66 3.4 50,590 Granted — — Exercised (705,333) 18.83 Forfeited (7,213) 48.70 Outstanding as of December 31, 2020 438,040 36.28 4.1 20,156 Options exercisable 397,861 34.99 3.7 18,817 |
Schedule of other information | Other information is as follows: Year Ended December 31, 2020 2019 2018 Total intrinsic value of options exercised $ 35,687 $ 40,893 $ 15,667 Cash received from exercises of stock options 10,760 10,592 5,305 |
Summary of the activity for unvested restricted stock units and awards granted under the Company's plans | The following is a summary of the activity for unvested restricted stock units and awards granted under the Company’s plans: RSUs PSUs Weighted- Weighted- Average Grant Average Grant Number of Date Fair Value Number of Date Fair Value Shares per Share Shares per Share Outstanding as of December 31, 2017 1,629,971 $ 32.60 136,668 $ 31.03 Granted 940,113 55.24 55,986 61.25 Vested (1,005,347) 32.73 (68,334) 31.03 Forfeited (103,269) 40.37 — — Outstanding as of December 31, 2018 1,461,468 46.59 124,320 44.64 Granted 997,971 61.91 202,168 69.68 Vested (1,029,790) 45.11 (68,334) 31.03 Forfeited (110,779) 53.16 (4,036) 61.27 Outstanding as of December 31, 2019 1,318,870 58.88 254,118 67.96 Granted 970,390 74.61 81,689 83.47 Vested (804,982) 57.77 — — Forfeited (138,931) 62.14 (33,010) 64.70 Outstanding as of December 31, 2020 1,345,347 70.56 302,797 72.50 |
Benefit Plan (Tables)
Benefit Plan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of voluntary employer matching contributions | The Company made voluntary employer matching contributions as follows: Year Ended December 31, 2020 2019 2018 Voluntary employer matching contributions $ 6,247 $ 6,044 $ 4,778 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Summary of loss before income tax benefit | Loss before income tax benefit was generated in the following jurisdictions: Year Ended December 31, 2020 2019 2018 Domestic $ (17,234) $ (61,047) $ (18,242) Foreign 9,189 12,952 9,080 Total $ (8,045) $ (48,095) $ (9,162) |
Summary of components of the income tax expense (benefit) charged to operations | The components of the income tax expense (benefit) charged to operations are summarized as follows: Year Ended December 31, 2020 2019 2018 Current: Federal $ (1,086) $ 4 $ 4,564 State 2,111 2,803 1,044 Foreign (4,542) 5,930 4,849 (3,517) 8,737 10,457 Deferred: Federal (2,659) (33,952) (19,444) State 1,158 (5,603) (3,182) Foreign (383) (75) (1,003) (1,884) (39,630) (23,629) Total $ (5,401) $ (30,893) $ (13,172) |
Schedule of net deferred tax assets (liabilities) | Net deferred tax assets (liabilities) consisted of the following: December 31, 2020 2019 Deferred revenue $ 5,811 $ 5,148 Prepaid expenses and accruals 8,737 9,533 Deferred rent and lease incentives 255 273 Right of use asset (25,937) (18,507) Lease liability 30,752 22,983 Net operating loss and tax credit carryforwards 87,648 86,952 Property and equipment and intangible assets (113,041) (127,255) Stock-based compensation expense 9,122 8,033 Investment in partnerships 1,727 2,196 Convertible Notes (22,951) (8,471) Other 639 2,218 Total deferred tax liabilities, net (17,238) (16,897) Less: valuation allowance (17,502) (12,584) Net deferred tax liabilities $ (34,740) $ (29,481) |
Summary of expected tax provision | The expected income tax provision (benefit) calculated at the statutory federal rate differs from the actual provision as follows: Year Ended December 31, 2020 2019 2018 Tax benefit, at U.S. federal statutory tax rate $ (1,787) $ (10,012) $ (1,559) State income tax benefit, net of federal benefit (2,461) (5,390) (1,714) Effect of stock-based compensation excess tax benefit (9,349) (11,983) (7,782) Effect of permanent items 258 1,048 2,967 Effect of India partnerships 2,977 — — Change in valuation allowance 16,210 (3,364) (4,244) Effect of change in state and foreign income tax rates 1,323 2,449 (269) Uncertain tax positions (6,093) 4,478 (2,062) BEAT liability — — 3,760 Research and development credits (5,939) (6,756) (4,770) State net operating loss adjustment 31 (1,588) — Other (571) 225 2,501 Income tax benefit $ (5,401) $ (30,893) $ (13,172) |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefit | A reconciliation of the beginning and ending amount of unrecognized tax benefit follows: Year Ended December 31, 2020 2019 2018 Balance at beginning of year $ 18,939 $ 15,628 $ 18,312 Additions based on tax positions related to the current year 1,420 2,261 1,907 Additions (reductions) based on tax positions related to prior years (2,793) 1,050 (3,976) Reductions for settlements with taxing authorities related to prior years (2,434) — (615) Balance at end of year $ 15,132 $ 18,939 $ 15,628 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to common stockholders | The following table provides the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to Envestnet, Inc.: Year Ended December 31, 2020 2019 2018 Basic income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ (3,110) $ (16,782) $ 5,755 Basic number of weighted-average shares outstanding 53,589,232 50,937,919 45,268,002 Basic net income (loss) per share $ (0.06) $ (0.33) $ 0.13 Diluted income (loss) per share calculation: Net income (loss) attributable to Envestnet, Inc. $ (3,110) $ (16,782) $ 5,755 Basic number of weighted-average shares outstanding 53,589,232 50,937,919 45,268,002 Effect of dilutive shares: Options to purchase common stock — — 1,304,493 Unvested restricted stock units — — 811,590 Convertible Notes — — — Warrants — — — Diluted number of weighted-average shares outstanding 53,589,232 50,937,919 47,384,085 Diluted net income (loss) per share $ (0.06) $ (0.33) $ 0.12 |
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 net income (loss) per share are as follows: December 31, 2020 2019 2018 Options to purchase common stock 438,040 1,150,586 — Unvested RSU's and PSU's 1,648,144 1,572,988 — Convertible Notes (1) 9,898,549 5,050,505 7,793,826 Warrants 470,000 470,000 470,000 Total anti-dilutive securities 12,454,733 8,244,079 8,263,826 (1) For 2020, this amount includes 4,848,044 of additional potential common shares related to the Convertible Notes due 2025 which were issued in August 2020 (See “Note 10—Debt”). For 2019, this amount does not include 2,743,321 of potential common shares related to the Convertible Notes due 2019 as they were settled in cash at maturity in December 2019. |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 consolidated net income (loss) attributable to Envestnet, Inc.: Year Ended December 31, 2020 2019 2018 Envestnet Wealth Solutions $ 91,501 $ 67,713 $ 75,491 Envestnet Data & Analytics (9,943) (25,262) (10,013) Nonsegment operating expenses (62,117) (58,524) (51,313) Income (loss) from operations 19,441 (16,073) 14,165 Interest expense, net (30,392) (29,173) (22,840) Other income (expense), net 2,906 (2,849) (487) Consolidated loss before income tax benefit (8,045) (48,095) (9,162) Income tax benefit (5,401) (30,893) (13,172) Consolidated net income (loss) (2,644) (17,202) 4,010 Add: Net (income) loss attributable to non-controlling interest (466) 420 1,745 Consolidated net income (loss) attributable to Envestnet, Inc. $ (3,110) $ (16,782) $ 5,755 |
Summary of consolidated total assets, consolidated depreciation and amortization and consolidated capital expenditures | A summary of consolidated total assets, consolidated depreciation and amortization and consolidated capital expenditures by segment follows: December 31, 2020 2019 Segment assets: Envestnet Wealth Solutions $ 1,634,153 $ 1,297,891 Envestnet Data & Analytics 510,137 503,993 Consolidated total assets $ 2,144,290 $ 1,801,884 Year Ended December 31, 2020 2019 2018 Segment depreciation and amortization: Envestnet Wealth Solutions $ 80,714 $ 65,746 $ 45,139 Envestnet Data & Analytics 32,947 35,525 32,487 Consolidated depreciation and amortization $ 113,661 $ 101,271 $ 77,626 Year Ended December 31, 2020 2019 2018 Segment capital expenditures: Envestnet Wealth Solutions $ 46,891 $ 42,395 $ 36,406 Envestnet Data & Analytics 20,105 11,548 8,186 Consolidated capital expenditures $ 66,996 $ 53,943 $ 44,592 |
Geographical Information (Table
Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segments, Geographical Areas [Abstract] | |
Schedule of property, plant, and equipment, net by geographic area | The following table sets forth certain long-lived assets including property and equipment, net and internally developed software, net by geographic area: December 31, 2020 2019 United States $ 140,651 $ 108,992 India 2,970 3,988 Other 849 1,039 Total long-lived assets, net $ 144,470 $ 114,019 |
Organization and Description _2
Organization and Description of Business (Details) investmentProduct in Thousands | 12 Months Ended |
Dec. 31, 2020proprietaryProductrIAsegmentmanagedAccountProductinvestmentProduct | |
Number of segments | segment | 2 |
Number of RIAs | rIA | 5 |
Envestnet Enterprise | |
Number of investment products | investmentProduct | 21 |
Envestnet Portfolio Management Consultants (“PMC”) | |
Number of investment products | managedAccountProduct | 4,700 |
Number of Proprietary Products | proprietaryProduct | 900 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) | 1 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2018USD ($) | Dec. 31, 2020USD ($)performanceObligationboardMemberreportingUnit | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 01, 2021USD ($) | Aug. 31, 2020USD ($) | May 31, 2018USD ($) | May 25, 2018USD ($) | Dec. 31, 2017USD ($) | |
Non-controlling Interest | |||||||||
Number of performance obligations | performanceObligation | 1 | ||||||||
Allowance for doubtful accounts receivable, current | $ 2,751,000 | $ 1,093,000 | |||||||
Impairment of investments | 0 | 0 | $ 0 | ||||||
Impairment of property and equipment | $ 0 | 0 | 0 | ||||||
Number of reporting units | reportingUnit | 2 | ||||||||
Goodwill impairment charges | $ 0 | 0 | 0 | ||||||
Intangible asset impairment charges | $ 0 | 0 | 0 | ||||||
Ownership interest | 43.00% | ||||||||
Number of board members | boardMember | 2 | ||||||||
Increase (decrease) to equity upon initial adoption | $ 975,818,000 | 867,576,000 | 632,602,000 | $ 436,670,000 | |||||
Accumulated Deficit | |||||||||
Non-controlling Interest | |||||||||
Increase (decrease) to equity upon initial adoption | (79,912,000) | (75,664,000) | (58,882,000) | (73,854,000) | |||||
Additional Paid-in Capital | |||||||||
Non-controlling Interest | |||||||||
Increase (decrease) to equity upon initial adoption | 1,166,774,000 | 1,037,141,000 | $ 761,128,000 | 556,257,000 | |||||
Cumulative Effect, Period of Adoption, Adjustment | |||||||||
Non-controlling Interest | |||||||||
Increase (decrease) to equity upon initial adoption | (1,138,000) | 9,217,000 | |||||||
Cumulative Effect, Period of Adoption, Adjustment | Subsequent Event | Forecast | Convertible Debt | |||||||||
Non-controlling Interest | |||||||||
Face amount | $ 87,000,000 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | |||||||||
Non-controlling Interest | |||||||||
Increase (decrease) to equity upon initial adoption | (1,138,000) | $ 9,217,000 | |||||||
Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | Subsequent Event | Forecast | |||||||||
Non-controlling Interest | |||||||||
Increase (decrease) to equity upon initial adoption | 28,000,000 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-in Capital | Subsequent Event | Forecast | |||||||||
Non-controlling Interest | |||||||||
Increase (decrease) to equity upon initial adoption | $ (115,000,000) | ||||||||
Convertible Notes due 2023 | |||||||||
Non-controlling Interest | |||||||||
Face amount | 345,000,000 | 345,000,000 | $ 345,000,000 | $ 345,000,000 | |||||
Interest rate | 1.75% | ||||||||
Convertible Notes due 2025 | |||||||||
Non-controlling Interest | |||||||||
Face amount | $ 517,500,000 | $ 0 | $ 517,500,000 | ||||||
Interest rate | 0.75% | ||||||||
Private Company | |||||||||
Non-controlling Interest | |||||||||
Investment in private companies | $ 1,333,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Restricted Cash) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | $ 384,565 | $ 82,505 | $ 289,345 | |
Total cash, cash equivalents and restricted cash | 384,714 | 82,755 | 289,671 | $ 62,263 |
Prepaid expense and other current assets | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted Cash and Cash Equivalents | 0 | 82 | 158 | |
Other non-current assets | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted Cash and Cash Equivalents | $ 149 | $ 168 | $ 168 |
Business Acquisitions (Details)
Business Acquisitions (Details) | Mar. 03, 2020USD ($) | Mar. 02, 2020USD ($) | Feb. 18, 2020USD ($) | May 01, 2019USD ($)executiveshares | Apr. 01, 2019USD ($) | Jan. 02, 2019USD ($) | Jan. 02, 2018USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2018 |
Business Acquisition [Line Items] | |||||||||||||
Acquired intangible asset amortization | $ 73,559,000 | $ 68,452,000 | $ 53,856,000 | ||||||||||
Fair market value adjustment to contingent consideration liability | 3,105,000 | 8,126,000 | 0 | ||||||||||
Goodwill | $ 879,850,000 | 906,773,000 | 879,850,000 | 519,102,000 | |||||||||
Ownership interest | 43.00% | ||||||||||||
Private Financial Technology Design Company | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Ownership interest | 45.00% | ||||||||||||
Folio Dynamics | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Cash consideration | $ 193,135,000 | ||||||||||||
Revenue since acquisition | 68,122,000 | ||||||||||||
Net income (loss) since acquisition | (13,777,000) | ||||||||||||
Acquired intangible asset amortization | $ 17,908,000 | ||||||||||||
Goodwill | $ 79,891,000 | ||||||||||||
Private AI Company | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Cash consideration | $ 11,173,000 | ||||||||||||
Contingent consideration liability | 7,580,000 | ||||||||||||
Fair market value adjustment to contingent consideration liability | $ 8,126,000 | ||||||||||||
Expected tax deductible amount | 0 | ||||||||||||
Consideration transferred | 25,063,000 | ||||||||||||
Goodwill | $ 21,507,000 | ||||||||||||
PortfolioCenter | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Cash consideration | $ 17,500,000 | ||||||||||||
Revenue since acquisition | 6,705,000 | ||||||||||||
Net income (loss) since acquisition | (2,568,000) | ||||||||||||
Acquired intangible asset amortization | 1,459,000 | ||||||||||||
Contingent consideration liability | 8,200,000 | ||||||||||||
Expected tax deductible amount | 15,587,000 | ||||||||||||
Consideration transferred | 25,700,000 | ||||||||||||
Goodwill | $ 15,587,000 | ||||||||||||
PIEtech | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Cash consideration | $ 298,714,000 | ||||||||||||
Revenue since acquisition | 30,315,000 | ||||||||||||
Net income (loss) since acquisition | (12,374,000) | ||||||||||||
Acquired intangible asset amortization | 17,634,000 | ||||||||||||
Retention bonus pool | $ 30,000,000 | ||||||||||||
Cash retention payments | 3,345,000 | 5,920,000 | |||||||||||
Expected cash bonus payment | 5,300,000 | ||||||||||||
Cash bonus payments | 3,050,000 | ||||||||||||
Number of executives granted membership interests | executive | 2 | ||||||||||||
Membership interests, grant date fair value | $ 8,900,000 | ||||||||||||
Acquisition related costs | $ 16,738,000 | ||||||||||||
Consideration transferred | 514,838,000 | ||||||||||||
Goodwill | 323,951,000 | ||||||||||||
Private Technology Company | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair market value adjustment to contingent consideration liability | $ 3,105,000 | ||||||||||||
Expected tax deductible amount | $ 0 | ||||||||||||
Consideration transferred | 2,343,000 | ||||||||||||
Additional contingent consideration | 6,750,000 | ||||||||||||
Contingent consideration | 5,239,000 | ||||||||||||
Goodwill | 7,019,000 | ||||||||||||
Acquired intangible assets | $ 1,000,000 | ||||||||||||
Private Cloud Technology Company | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Expected tax deductible amount | $ 10,932,000 | ||||||||||||
Consideration transferred | 11,968,000 | ||||||||||||
Goodwill | $ 10,932,000 | ||||||||||||
Private Financial Technology Design Company | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Expected tax deductible amount | $ 6,232,000 | ||||||||||||
Consideration transferred | 5,946,000 | ||||||||||||
Goodwill | 9,241,000 | ||||||||||||
Acquired intangible assets | 2,000,000 | ||||||||||||
Estimated value of acquiree | $ 11,026,000 | ||||||||||||
Remeasurement gain | $ 4,230,000 | ||||||||||||
Equity Plan | PIEtech | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Cash retention payments | $ 8,800,000 | ||||||||||||
Equity Plan | Restricted Stock Units and Performance Stock Units | PIEtech | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Future grant date | 60 days | ||||||||||||
Shares authorized for issuance (in shares) | shares | 301,469 | ||||||||||||
Equity plan shares authorized (in shares) | shares | 100,000 | ||||||||||||
Equity Plan | Restricted Stock Units (RSUs) | PIEtech | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Equity plan shares issued (in shares) | shares | 177,000 | ||||||||||||
Equity Plan | Performance Shares (PSUs) | PIEtech | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Equity plan shares issued (in shares) | shares | 25,000 | ||||||||||||
Common Stock | PIEtech | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Equity interest issued (in shares) | shares | 3,184,713 |
Business Acquisitions (Consider
Business Acquisitions (Consideration Transferred) (Details) - USD ($) $ in Thousands | May 01, 2019 | Apr. 01, 2019 | Jan. 02, 2019 | Jan. 02, 2018 |
Folio Dynamics | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 193,135 | |||
Private AI Company | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 11,173 | |||
Purchase consideration liability | 6,240 | |||
Contingent consideration liability | 7,580 | |||
Working capital adjustment | 70 | |||
Consideration transferred | $ 25,063 | |||
PortfolioCenter | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 17,500 | |||
Contingent consideration liability | 8,200 | |||
Consideration transferred | $ 25,700 | |||
PIEtech | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 298,714 | |||
Stock consideration | 222,484 | |||
Less: cash acquired | (6,360) | |||
Consideration transferred | $ 514,838 |
Business Acquisitions (Schedule
Business Acquisitions (Schedule of Assets Acquired and Liabilities Assumed) (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | May 01, 2019 | Apr. 01, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | Jan. 02, 2018 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 906,773,000 | $ 879,850,000 | $ 519,102,000 | ||||
Folio Dynamics | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 4,876,000 | ||||||
Accounts receivable | 4,962,000 | ||||||
Prepaid expenses and other current assets | 3,773,000 | ||||||
Property and equipment, net | 927,000 | ||||||
Other non-current assets | 441,000 | ||||||
Identifiable tangible assets acquired | 135,700,000 | ||||||
Goodwill | 79,891,000 | ||||||
Total assets acquired | 230,570,000 | ||||||
Accounts payable | (5,358,000) | ||||||
Accrued expenses | (7,907,000) | ||||||
Deferred tax liability | (23,300,000) | ||||||
Deferred revenue | (806,000) | ||||||
Other non-current liabilities | (64,000) | ||||||
Total liabilities assumed | (37,435,000) | ||||||
Total net assets acquired | $ 193,135,000 | ||||||
Private AI Company | |||||||
Business Acquisition [Line Items] | |||||||
Total tangible assets acquired | $ 144,000 | ||||||
Identifiable tangible assets acquired | 4,100,000 | ||||||
Goodwill | 21,507,000 | ||||||
Expected tax deductible amount | $ 0 | ||||||
Total liabilities assumed | (688,000) | ||||||
Total net assets acquired | $ 25,063,000 | ||||||
PortfolioCenter | |||||||
Business Acquisition [Line Items] | |||||||
Total tangible assets acquired | $ 13,000 | ||||||
Identifiable tangible assets acquired | 11,700,000 | ||||||
Goodwill | 15,587,000 | ||||||
Expected tax deductible amount | 15,587,000 | ||||||
Total liabilities assumed | (1,600,000) | ||||||
Total net assets acquired | $ 25,700,000 | ||||||
PIEtech | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 6,360,000 | ||||||
Accounts receivable | 3,782,000 | ||||||
Prepaid expenses and other current assets | 969,000 | ||||||
Property and equipment, net | 6,057,000 | ||||||
Other non-current assets | 4,274,000 | ||||||
Operating lease right-of-use assets, net | 2,012,000 | ||||||
Identifiable tangible assets acquired | 253,000,000 | ||||||
Goodwill | 323,951,000 | ||||||
Total assets acquired | 600,405,000 | ||||||
Accounts payable and accrued expenses | (1,661,000) | ||||||
Operating lease liabilities | (2,012,000) | ||||||
Deferred tax liability | (68,534,000) | ||||||
Deferred revenue | (7,000,000) | ||||||
Total liabilities assumed | (79,207,000) | ||||||
Total net assets acquired | $ 521,198,000 |
Business Acquisitions (Summary
Business Acquisitions (Summary of Intangible Assets Acquired) (Details) - USD ($) $ in Thousands | May 01, 2019 | Apr. 01, 2019 | Jan. 02, 2019 | Jan. 02, 2018 |
Folio Dynamics | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 135,700 | |||
PortfolioCenter | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 11,700 | |||
PIEtech | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 253,000 | |||
Customer list | Folio Dynamics | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 113,500 | |||
Intangible assets acquired, Estimated Useful Life In Years | 13 years | |||
Customer list | PortfolioCenter | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 8,500 | |||
Intangible assets acquired, Estimated Useful Life In Years | 10 years | |||
Customer list | PIEtech | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | 222,000 | |||
Proprietary technology | Folio Dynamics | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 17,500 | |||
Intangible assets acquired, Estimated Useful Life In Years | 5 years | |||
Proprietary technology | Private AI Company | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 4,100 | |||
Intangible assets acquired, Estimated Useful Life In Years | 4 years | |||
Proprietary technology | PortfolioCenter | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 3,200 | |||
Intangible assets acquired, Estimated Useful Life In Years | 5 years | |||
Proprietary technology | PIEtech | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 23,000 | |||
Intangible assets acquired, Estimated Useful Life In Years | 4 years | |||
Trade names and domains | Folio Dynamics | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 4,700 | |||
Intangible assets acquired, Estimated Useful Life In Years | 6 years | |||
Trade names | PIEtech | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Amount | $ 8,000 | |||
Intangible assets acquired, Estimated Useful Life In Years | 7 years | |||
Minimum | Customer list | PIEtech | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Estimated Useful Life In Years | 10 years | |||
Maximum | Customer list | PIEtech | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired, Estimated Useful Life In Years | 20 years |
Business Acquisitions (Pro Form
Business Acquisitions (Pro Forma Data) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / shares | |
Business Combinations [Abstract] | |
Revenues | $ | $ 919,291 |
Net loss | $ | $ (16,860) |
Net loss per share: | |
Basic (in dollars per share) | $ / shares | $ (0.32) |
Diluted (in dollars per share) | $ / shares | $ (0.32) |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid technology | $ 13,165 | $ 10,387 |
Non-income tax receivables | 6,571 | 5,555 |
Advance payroll taxes and benefits | 6,429 | 5,446 |
Prepaid insurance | 1,777 | 1,919 |
Income tax prepayments and receivables | 1,684 | 0 |
Other | 10,944 | 8,876 |
Total prepaid expenses and other current assets | $ 40,570 | $ 32,183 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment, cost: | |||
Property and equipment, gross | $ 132,123 | $ 128,104 | |
Less: accumulated depreciation and amortization | (84,154) | (74,348) | |
Total property and equipment, net | 47,969 | 53,756 | |
Cost written off | 12,320 | 12,885 | |
Accumulated Depreciation | (11,523) | (12,715) | |
Depreciation and amortization expense | $ 21,432 | 20,777 | $ 15,737 |
Computer equipment and software | |||
Property and equipment, cost: | |||
Estimated Useful Life | 3 years | ||
Property and equipment, gross | $ 72,443 | 72,190 | |
Cost written off | 9,844 | 12,597 | |
Accumulated Depreciation | (9,606) | (12,542) | |
Leasehold improvements | |||
Property and equipment, cost: | |||
Property and equipment, gross | 37,671 | 34,645 | |
Cost written off | 1,775 | 229 | |
Accumulated Depreciation | (1,326) | (135) | |
Office furniture and fixtures | |||
Property and equipment, cost: | |||
Property and equipment, gross | 11,249 | 10,832 | |
Cost written off | 320 | 42 | |
Accumulated Depreciation | $ (243) | (21) | |
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 | $ 7,151 | 6,850 | |
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 | $ 2,669 | 2,647 | |
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 | |
Office equipment and other | |||
Property and equipment, cost: | |||
Cost written off | 381 | 17 | |
Accumulated Depreciation | (348) | (17) | |
Envestnet Wealth Solutions | |||
Property and equipment, cost: | |||
Cost written off | 8,495 | 8,264 | |
Envestnet Data and Analytics | |||
Property and equipment, cost: | |||
Cost written off | $ 3,825 | $ 4,621 |
Internally Developed Software_3
Internally Developed Software, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Less: accumulated amortization | $ (63,118) | $ (44,440) | |
Internally developed software, net | 96,501 | 60,263 | |
Amortization expense | $ 18,670 | 12,042 | $ 8,033 |
Internally developed software | |||
Estimated Useful Life | 5 years | ||
Internally developed software | $ 159,619 | $ 104,703 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net (Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in the carrying amount of the Company's goodwill | ||
Balance at period start | $ 879,850 | $ 519,102 |
Foreign currency and other | (269) | (297) |
Balance at period end | 906,773 | 879,850 |
Private AI company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 21,507 | |
PortfolioCenter acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 15,587 | |
PIEtech acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 323,951 | |
Private Technology company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 7,019 | |
Private Cloud Technology company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 10,932 | |
Private Financial Technology Design company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 9,241 | |
Envestnet Wealth Solutions | ||
Changes in the carrying amount of the Company's goodwill | ||
Balance at period start | 583,247 | 243,809 |
Foreign currency and other | (70) | (100) |
Balance at period end | 603,350 | 583,247 |
Envestnet Wealth Solutions | Private AI company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 0 | |
Envestnet Wealth Solutions | PortfolioCenter acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 15,587 | |
Envestnet Wealth Solutions | PIEtech acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 323,951 | |
Envestnet Wealth Solutions | Private Technology company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 0 | |
Envestnet Wealth Solutions | Private Cloud Technology company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 10,932 | |
Envestnet Wealth Solutions | Private Financial Technology Design company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 9,241 | |
Envestnet Data and Analytics | ||
Changes in the carrying amount of the Company's goodwill | ||
Balance at period start | 296,603 | 275,293 |
Foreign currency and other | (199) | (197) |
Balance at period end | 303,423 | 296,603 |
Envestnet Data and Analytics | Private AI company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 21,507 | |
Envestnet Data and Analytics | PortfolioCenter acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 0 | |
Envestnet Data and Analytics | PIEtech acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | $ 0 | |
Envestnet Data and Analytics | Private Technology company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 7,019 | |
Envestnet Data and Analytics | Private Cloud Technology company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | 0 | |
Envestnet Data and Analytics | Private Financial Technology Design company acquisition | ||
Changes in the carrying amount of the Company's goodwill | ||
Acquisition | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net (Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Components of intangible assets | |||
Gross Carrying Amount | $ 680,134 | $ 712,934 | |
Accumulated Amortization | (245,093) | (207,345) | |
Net Carrying Amount | 435,041 | 505,589 | |
Amortization expense | 73,559 | 68,452 | $ 53,856 |
Envestnet Wealth Solutions | |||
Components of intangible assets | |||
Write-off of fully amortized intangible assets | 800 | 11,520 | |
Envestnet Data and Analytics | |||
Components of intangible assets | |||
Write-off of fully amortized intangible assets | 35,000 | 11,100 | |
Customer list | |||
Components of intangible assets | |||
Gross Carrying Amount | 591,520 | 591,520 | |
Accumulated Amortization | (198,555) | (148,517) | |
Net Carrying Amount | 392,965 | 443,003 | |
Proprietary technologies | |||
Components of intangible assets | |||
Gross Carrying Amount | 54,914 | 87,714 | |
Accumulated Amortization | (26,949) | (44,165) | |
Net Carrying Amount | 27,965 | 43,549 | |
Trade names | |||
Components of intangible assets | |||
Gross Carrying Amount | 33,700 | 33,700 | |
Accumulated Amortization | (19,589) | (14,663) | |
Net Carrying Amount | $ 14,111 | $ 19,037 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net (Future Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Future amortization expense of the intangible assets | ||
2021 | $ 63,645 | |
2022 | 59,900 | |
2023 | 45,551 | |
2024 | 38,751 | |
2025 | 35,485 | |
Thereafter | 191,709 | |
Net Carrying Amount | $ 435,041 | $ 505,589 |
Equity Method Investments - (Na
Equity Method Investments - (Narrative) (Details) - USD ($) $ in Thousands | Jan. 08, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest | 43.00% | |||
Equity method investments | $ 15,318 | $ 5,014 | ||
Future funding | 5,740 | |||
Excess value of equity method investment | $ 9,900 | |||
Minimum | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest | 4.00% | 28.00% | ||
Amortization period | 6 years | |||
Maximum | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest | 44.00% | 47.00% | ||
Amortization period | 15 years | |||
Private Services Company | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest | 4.25% | |||
Investment in private companies | $ 11,000 | |||
Revenue from related parties | $ 11,494 | |||
Due from related parties | $ 2,088 |
Equity Method Investments - (Sc
Equity Method Investments - (Schedule of Equity Method Investment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Balance Sheets | |||
Current assets | $ 505,199 | $ 182,503 | |
Current liabilities | 236,369 | 203,790 | |
Statements of Operations | |||
Revenues | $ 812,363 | ||
Loss from operations | 19,441 | (16,073) | 14,165 |
Net loss | (2,644) | (17,202) | 4,010 |
Envestnet’s proportional share of losses | (3,110) | (16,782) | 5,755 |
Equity Method Investments, Total | |||
Balance Sheets | |||
Current assets | 23,469 | 2,457 | |
Non-current assets | 21,329 | 1,413 | |
Current liabilities | 11,325 | 775 | |
Non-current liabilities | 1,418 | 1,617 | |
Statements of Operations | |||
Revenues | 35,603 | 866 | 1,327 |
Loss from operations | (4,758) | (6,192) | (2,418) |
Net loss | (5,062) | (6,193) | (2,438) |
Envestnet’s proportional share of losses | $ (5,399) | $ (2,361) | $ (1,146) |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - (Schedule of Accrued Expenses and Other Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Components of accrued expenses | ||
Accrued compensation and related taxes | $ 71,039 | $ 53,627 |
Accrued investment manager fees | 57,894 | 48,720 |
Accrued professional services | 9,240 | 6,315 |
Non-income tax payables | 8,398 | 11,040 |
Accrued technology | 4,701 | 3,042 |
Accrued charitable contribution | 0 | 5,020 |
Other accrued expenses | 7,276 | 10,180 |
Total accrued expenses and other liabilities | $ 158,548 | $ 137,944 |
Accrued Expenses and Other Li_4
Accrued Expenses and Other Liabilities (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accrued Liabilities [Line Items] | |||
Accrued compensation and related taxes | $ 71,039 | $ 53,627 | |
Other non-current liabilities | 25,557 | 32,360 | |
Early Retirement Plan | |||
Accrued Liabilities [Line Items] | |||
Severance expense | 12,500 | ||
Accrued compensation and related taxes | 380 | 1,733 | |
Other non-current liabilities | 1,524 | $ 599 | |
Organizational Realignment | |||
Accrued Liabilities [Line Items] | |||
Severance expense | 5,100 | ||
Accrued compensation and related taxes | $ 5,100 | ||
Organizational Realignment | Forecast | Subsequent Event | |||
Accrued Liabilities [Line Items] | |||
Severance expense | $ 5,300 |
Debt (Summary) (Details)
Debt (Summary) (Details) - USD ($) | Dec. 31, 2020 | Aug. 31, 2020 | Dec. 31, 2019 | May 31, 2018 | May 25, 2018 |
Outstanding debt obligations | |||||
Revolving credit facility | $ 0 | $ 260,000,000 | |||
Credit Agreement | |||||
Outstanding debt obligations | |||||
Revolving credit facility | 0 | 260,000,000 | |||
Convertible Notes due 2023 | |||||
Outstanding debt obligations | |||||
Face amount | 345,000,000 | 345,000,000 | $ 345,000,000 | $ 345,000,000 | |
Unaccredited discount on Convertible Notes | (24,058,000) | (33,491,000) | $ (48,000,000) | ||
Unamortized issuance costs | (4,306,000) | (5,996,000) | |||
Convertible Debt | 316,636,000 | 305,513,000 | |||
Convertible Notes due 2025 | |||||
Outstanding debt obligations | |||||
Face amount | 517,500,000 | $ 517,500,000 | 0 | ||
Unaccredited discount on Convertible Notes | (65,902,000) | $ (70,552,000) | 0 | ||
Unamortized issuance costs | (11,731,000) | 0 | |||
Convertible Debt | $ 439,867,000 | $ 0 |
Debt (Interest Expense) (Detail
Debt (Interest Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |||
Accretion of debt discount | $ 14,084 | $ 15,040 | $ 11,134 |
Coupon interest | 7,442 | 8,917 | 6,650 |
Interest on credit agreement | 5,786 | 4,065 | 3,994 |
Amortization of issuance costs | 3,396 | 3,703 | 2,771 |
Undrawn and other fees | 796 | 795 | 654 |
Total interest expense | $ 31,504 | $ 32,520 | $ 25,203 |
Debt (Credit Agreement) (Detail
Debt (Credit Agreement) (Details) - USD ($) | Nov. 19, 2015 | Dec. 31, 2020 | Jul. 31, 2017 |
Second Amended and Restated Credit Agreement | |||
Line of Credit Facility [Line Items] | |||
Credit facility amount | $ 500,000,000 | ||
Right to increase credit facility, amount | 150,000,000 | ||
Credit facility outstanding | $ 0 | ||
Letters of credit | |||
Line of Credit Facility [Line Items] | |||
Credit facility amount | $ 5,000,000 | ||
Credit Agreement | |||
Line of Credit Facility [Line Items] | |||
Voting equity of foreign subsidiary pledged | 66.00% | ||
Non-voting equity of foreign subsidiary pledged | 100.00% | ||
Commitment fee | 0.25% | ||
Credit Agreement | Prepaid Expenses | |||
Line of Credit Facility [Line Items] | |||
Debt issuance cost, outstanding | $ 853,000 | ||
Credit Agreement | Other non-current assets | |||
Line of Credit Facility [Line Items] | |||
Debt issuance cost, outstanding | $ 2,337,000 | ||
Credit Agreement | Minimum | LIBOR | |||
Line of Credit Facility [Line Items] | |||
Spread on variable rate basis | 1.50% | ||
Credit Agreement | Maximum | LIBOR | |||
Line of Credit Facility [Line Items] | |||
Spread on variable rate basis | 3.25% |
Debt (Convertible Notes) (Detai
Debt (Convertible Notes) (Details) | May 25, 2018USD ($)day$ / shares | Dec. 15, 2014 | Aug. 31, 2020USD ($)day$ / shares | May 31, 2018USD ($) | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |||||||
Accretion of debt discount | $ 14,084,000 | $ 15,040,000 | $ 11,134,000 | ||||
Convertible Notes due 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 345,000,000 | $ 345,000,000 | 345,000,000 | $ 345,000,000 | |||
Net proceeds from offering | $ 335,018,000 | ||||||
Interest rate | 1.75% | ||||||
Issuance costs | 8,593,000 | ||||||
Repurchase percentage of principal | 100.00% | ||||||
Conversion rate | 0.0146381 | ||||||
Conversion price (in dollars per share) | $ / shares | $ 68.31 | $ 68.31 | |||||
Threshold trading days | day | 20 | ||||||
Consecutive trading days | day | 30 | ||||||
Threshold business days | 5 days | ||||||
Threshold consecutive trading-day period | 5 days | ||||||
Threshold percentage of trading price trigger | 98.00% | ||||||
Allocated to equity components | $ 46,611,000 | ||||||
Offering costs | 1,389,000 | ||||||
Discount | $ 48,000,000 | 24,058,000 | $ 33,491,000 | ||||
Accretion of debt discount | $ 9,434,000 | $ 9,150,000 | |||||
Threshold percentage of stock price trigger | 130.00% | ||||||
Effective interest rate | 6.00% | 6.00% | |||||
Convertible Notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 517,500,000 | $ 517,500,000 | $ 0 | ||||
Net proceeds from offering | $ 502,960,000 | ||||||
Interest rate | 0.75% | ||||||
Repurchase percentage of principal | 100.00% | ||||||
Conversion rate | 0.0093682 | ||||||
Conversion price (in dollars per share) | $ / shares | $ 106.74 | $ 106.74 | |||||
Threshold trading days | day | 20 | ||||||
Consecutive trading days | day | 30 | ||||||
Threshold business days | 5 days | ||||||
Threshold consecutive trading-day period | 5 days | ||||||
Threshold percentage of trading price trigger | 98.00% | ||||||
Allocated to equity components | $ 61,859,000 | ||||||
Offering costs | 1,982,000 | ||||||
Taxes | 6,712,000 | ||||||
Discount | $ 70,552,000 | $ 65,902,000 | $ 0 | ||||
Accretion of debt discount | $ 4,650,000 | ||||||
Threshold percentage of stock price trigger | 130.00% | ||||||
Effective interest rate | 4.00% | ||||||
Convertible Notes due 2025 | Other non-current assets | |||||||
Debt Instrument [Line Items] | |||||||
Issuance costs | $ 12,558,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Lease renewal term | 20 years | |
Lease termination option | 90 days | |
Operating lease costs | $ 17,241 | $ 17,736 |
Short-term lease costs | $ 5,049 | $ 4,683 |
Lease weighted-average lease term | 10 years 2 months 12 days | 9 years 2 months 12 days |
Lease discount rate | 5.10% | 6.00% |
Net leasing activity | $ 21,467 | $ 19,002 |
ROU assets obtained in exchange for operating lease liabilities | $ 39,370 | $ 30,455 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term of contract | 3 months | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term of contract | 13 years | |
Term of contract, leases not yet commenced | 10 years |
Leases Future Minimum Lease Pay
Leases Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
2021 | $ 18,789 |
2022 | 15,993 |
2023 | 14,731 |
2024 | 13,654 |
2025 | 13,067 |
Thereafter | 87,303 |
Total future minimum lease payments | 163,537 |
Less imputed interest | (37,706) |
Total operating lease liabilities | $ 125,831 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | May 01, 2019 | Dec. 20, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 25, 2016 |
Stockholders' equity | ||||||
Shares authorized for repurchase (in shares) | 2,000,000 | |||||
Remaining shares authorized for repurchase (in shares) | 1,956,390 | 1,956,390 | ||||
Issuance of common stock and warrants - private placement, net of offering costs | $ 0 | $ 0 | $ 122,704 | |||
Payments of stock issuance costs | $ 4,627 | |||||
Common Stock | ||||||
Stockholders' equity | ||||||
Issuance of common stock and warrants - private placement, net of offering costs | $ 122,788 | |||||
Private Placement | Common Stock | ||||||
Stockholders' equity | ||||||
Issuance of common stock and warrants - private placement, net of offering costs (in shares) | 2,356,000 | |||||
Sale of stock (in dollars per share) | $ 52.13 | |||||
Common Stock | ||||||
Stockholders' equity | ||||||
Issuance of common stock and warrants - private placement, net of offering costs (in shares) | 1,685 | 2,355,816 | ||||
Warrant | Private Placement | Common Stock | ||||||
Stockholders' equity | ||||||
Sale of stock (in dollars per share) | $ 65.16 | |||||
Number of shares issued in transaction (in shares) | 470,000 | |||||
Warrants exercisable period | 4 years | |||||
PIEtech | ||||||
Stockholders' equity | ||||||
Stock consideration | $ 222,484 | |||||
PIEtech | Common Stock | ||||||
Stockholders' equity | ||||||
Equity interest issued (in shares) | 3,184,713 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Fair Value Assets and Liabilities) (Details) - Recurring Basis - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Level I | ||
Assets | ||
Assets to fund deferred compensation liability | $ 0 | $ 0 |
Total assets | 84,110 | 37,730 |
Liabilities: | ||
Contingent consideration liability | 0 | 0 |
Deferred compensation liability | 8,720 | 8,208 |
Total liabilities | 8,720 | 8,208 |
Level I | Money market funds | ||
Assets | ||
Money market funds | 84,110 | 37,730 |
Level II | ||
Assets | ||
Assets to fund deferred compensation liability | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration liability | 0 | 0 |
Deferred compensation liability | 0 | 0 |
Total liabilities | 0 | 0 |
Level II | Money market funds | ||
Assets | ||
Money market funds | 0 | 0 |
Level III | ||
Assets | ||
Assets to fund deferred compensation liability | 9,961 | 8,390 |
Total assets | 9,961 | 8,390 |
Liabilities: | ||
Contingent consideration liability | 12,559 | 9,045 |
Deferred compensation liability | 0 | 0 |
Total liabilities | 12,559 | 9,045 |
Level III | Money market funds | ||
Assets | ||
Money market funds | 0 | 0 |
Fair Value | ||
Assets | ||
Assets to fund deferred compensation liability | 9,961 | 8,390 |
Total assets | 94,071 | 46,120 |
Liabilities: | ||
Contingent consideration liability | 12,559 | 9,045 |
Deferred compensation liability | 8,720 | 8,208 |
Total liabilities | 21,279 | 17,253 |
Fair Value | Money market funds | ||
Assets | ||
Money market funds | $ 84,110 | $ 37,730 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2020 | May 31, 2018 | May 25, 2018 | |
Fair Value Measurements | ||||||
Fair market value adjustment to contingent consideration liability | $ 3,105,000 | $ 8,126,000 | $ 0 | |||
Convertible notes | 756,503,000 | 305,513,000 | ||||
Revolving credit facility | 0 | 260,000,000 | ||||
Convertible Notes due 2023 | ||||||
Fair Value Measurements | ||||||
Face amount | 345,000,000 | 345,000,000 | $ 345,000,000 | $ 345,000,000 | ||
Convertible Notes due 2025 | ||||||
Fair Value Measurements | ||||||
Face amount | 517,500,000 | 0 | $ 517,500,000 | |||
Credit Agreement | ||||||
Fair Value Measurements | ||||||
Revolving credit facility | 0 | 260,000,000 | ||||
Carrying Value | Convertible Notes due 2023 | ||||||
Fair Value Measurements | ||||||
Convertible notes | 316,636,000 | 305,513,000 | ||||
Total liabilities | 460,817,000 | $ 414,852,000 | ||||
Carrying Value | Convertible Notes due 2025 | ||||||
Fair Value Measurements | ||||||
Convertible notes | 439,867,000 | |||||
Fair Value | Convertible Notes due 2025 | ||||||
Fair Value Measurements | ||||||
Convertible notes | 540,788,000 | |||||
Private Technology Company | ||||||
Fair Value Measurements | ||||||
Fair market value adjustment to contingent consideration liability | $ 3,105,000 |
Fair Value Measurements (Reconc
Fair Value Measurements (Reconciliation of Deferred Compensation Liability and Contingent Consideration Liability) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Reconciliation of assets to fund deferred compensation liability | |
Contributions | $ 1,060 |
Recurring Basis | |
Changes in the fair value of Contingent Consideration Liabilities | |
Beginning balance | 9,045 |
Fair market value adjustment on contingent consideration liability | (3,105) |
Accretion on contingent consideration | 1,380 |
Ending balance | 12,559 |
Reconciliation of assets to fund deferred compensation liability | |
Beginning balance | 8,390 |
Fair value adjustments | 511 |
Ending balance | 9,961 |
Private Technology Company | Recurring Basis | |
Changes in the fair value of Contingent Consideration Liabilities | |
Acquisition | $ 5,239 |
Revenues and Cost of Revenues_2
Revenues and Cost of Revenues (Adoption of ASC 606) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity | $ 975,818 | $ 867,576 | $ 632,602 | $ 436,670 |
Total revenues | 998,230 | 900,127 | 812,363 | |
Cost of revenues | 305,929 | 278,811 | 263,400 | |
Compensation and benefits | 317,188 | |||
Total operating expenses | 978,789 | 916,200 | 798,198 | |
Income from operations | 19,441 | (16,073) | 14,165 | |
Net income | (2,644) | (17,202) | 4,010 | |
Net income attributable to Envestnet, Inc. | (3,110) | (16,782) | 5,755 | |
Accumulated Deficit | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity | (79,912) | (75,664) | (58,882) | (73,854) |
Cumulative Effect, Period of Adoption, Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity | (1,138) | 9,217 | ||
Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity | (1,138) | $ 9,217 | ||
Recurring Revenue | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 967,454 | 863,125 | 776,700 | |
Asset-based | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 540,947 | 484,312 | 481,233 | |
Cost of revenues | 278,569 | 243,913 | 232,145 | |
Subscription-based | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 426,507 | 378,813 | 295,467 | |
Cost of revenues | 26,934 | 28,904 | 25,192 | |
Professional services and other revenues | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 30,776 | 37,002 | 35,663 | |
Cost of revenues | $ 426 | $ 5,994 | 6,063 | |
Calculated under Revenue Guidance in Effect before Topic 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 826,953 | |||
Cost of revenues | 277,813 | |||
Compensation and benefits | 318,887 | |||
Total operating expenses | 814,310 | |||
Income from operations | 12,643 | |||
Net income | 2,488 | |||
Net income attributable to Envestnet, Inc. | 4,233 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | Recurring Revenue | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 791,113 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | Asset-based | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 495,646 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | Subscription-based | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 295,467 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | Professional services and other revenues | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 35,840 | |||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | (14,590) | |||
Cost of revenues | (14,413) | |||
Compensation and benefits | (1,699) | |||
Total operating expenses | (16,112) | |||
Income from operations | 1,522 | |||
Net income | 1,522 | |||
Net income attributable to Envestnet, Inc. | 1,522 | |||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | Recurring Revenue | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | (14,413) | |||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | Asset-based | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | (14,413) | |||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | Subscription-based | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 0 | |||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | Professional services and other revenues | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | $ (177) |
Revenues and Cost of Revenues_3
Revenues and Cost of Revenues (Disaggregation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||
Total revenues | $ 998,230 | $ 900,127 | $ 812,363 |
Total revenues | 812,363 | ||
United States | |||
Revenues: | |||
Total revenues | 977,047 | 871,456 | 778,565 |
International | |||
Revenues: | |||
Total revenues | 21,183 | 28,671 | 33,798 |
Recurring Revenue | |||
Revenues: | |||
Total revenues | 967,454 | 863,125 | 776,700 |
Total revenues | 776,700 | ||
Asset-based | |||
Revenues: | |||
Total revenues | 540,947 | 484,312 | 481,233 |
Total revenues | 481,233 | ||
Subscription-based | |||
Revenues: | |||
Total revenues | 426,507 | 378,813 | 295,467 |
Total revenues | 295,467 | ||
Professional services and other revenues | |||
Revenues: | |||
Total revenues | 30,776 | 37,002 | 35,663 |
Total revenues | 35,663 | ||
Envestnet Wealth Solutions | |||
Revenues: | |||
Total revenues | 806,090 | 709,458 | |
Total revenues | 632,605 | ||
Envestnet Wealth Solutions | Recurring Revenue | |||
Revenues: | |||
Total revenues | 789,757 | 691,918 | |
Total revenues | 619,605 | ||
Envestnet Wealth Solutions | Asset-based | |||
Revenues: | |||
Total revenues | 540,947 | 484,312 | |
Total revenues | 481,233 | ||
Envestnet Wealth Solutions | Subscription-based | |||
Revenues: | |||
Total revenues | 248,810 | 207,606 | |
Total revenues | 138,372 | ||
Envestnet Wealth Solutions | Professional services and other revenues | |||
Revenues: | |||
Total revenues | 16,333 | 17,540 | |
Total revenues | 13,000 | ||
Envestnet Data and Analytics | |||
Revenues: | |||
Total revenues | 192,140 | 190,669 | |
Total revenues | 179,758 | ||
Envestnet Data and Analytics | Recurring Revenue | |||
Revenues: | |||
Total revenues | 177,697 | 171,207 | |
Total revenues | 157,095 | ||
Envestnet Data and Analytics | Asset-based | |||
Revenues: | |||
Total revenues | 0 | 0 | |
Total revenues | 0 | ||
Envestnet Data and Analytics | Subscription-based | |||
Revenues: | |||
Total revenues | 177,697 | 171,207 | |
Total revenues | 157,095 | ||
Envestnet Data and Analytics | Professional services and other revenues | |||
Revenues: | |||
Total revenues | $ 14,443 | $ 19,462 | |
Total revenues | $ 22,663 |
Revenues and Cost of Revenues_4
Revenues and Cost of Revenues (Major Customers) (Details) - Revenues - Customer concentration risk - Fidelity | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Major Customers | |||
Revenue as a percentage of the company's total | 15.00% | 15.00% | 17.00% |
Envestnet Wealth Solutions | |||
Major Customers | |||
Revenue as a percentage of the company's total | 18.00% | 19.00% | 21.00% |
Revenues and Cost of Revenues_5
Revenues and Cost of Revenues (Remaining Performance Obligations) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Total | $ 613,132 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 243,989 |
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 | $ 172,981 |
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 | $ 101,768 |
Remaining Performance Obligations | |
Revenue recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 53,620 |
Remaining Performance Obligations | |
Revenue recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 27,744 |
Remaining Performance Obligations | |
Revenue recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total | $ 13,030 |
Remaining Performance Obligations | |
Revenue recognition period |
Revenues and Cost of Revenues_6
Revenues and Cost of Revenues (Contract Balances) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue, current, increase/(decrease), net | $ (3,776) | $ 9,609 |
Recognized deferred revenue | $ 34,261 | $ 23,714 |
Revenues and Cost of Revenues_7
Revenues and Cost of Revenues (Deferred Sales Incentive Compensation) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred sales incentive compensation | $ 10,814,000 | $ 9,387,000 |
Amortization expense for the deferred sales incentive compensation | 3,936,000 | 3,452,000 |
Impairment loss for capitalized costs | $ 0 | $ 0 |
Revenues and Cost of Revenues_8
Revenues and Cost of Revenues (Cost of Revenues) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Cost of revenues | $ 305,929 | $ 278,811 | $ 263,400 |
Asset-based | |||
Disaggregation of Revenue [Line Items] | |||
Cost of revenues | 278,569 | 243,913 | 232,145 |
Subscription-based | |||
Disaggregation of Revenue [Line Items] | |||
Cost of revenues | 26,934 | 28,904 | 25,192 |
Professional services and other revenues | |||
Disaggregation of Revenue [Line Items] | |||
Cost of revenues | $ 426 | $ 5,994 | $ 6,063 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - shares | May 01, 2019 | Jun. 22, 2010 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of shares available for future issuance (in shares) | 1,375,747 | ||||
U.S. federal corporate income tax rate | 25.50% | 25.20% | 25.10% | ||
Target Incentive Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
2010 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based awards, contractual term | 10 years | ||||
Shares authorized for issuance (in shares) | 8,925,000 | ||||
PIEtech | Equity Plan | Restricted Stock Units and Performance Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized for issuance (in shares) | 301,469 | ||||
Future grant date | 60 days | ||||
PIEtech | Equity Plan | Restricted Stock Units and Performance Stock Units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
PIEtech | Equity Plan | Restricted Stock Units and Performance Stock Units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 5 years |
Stock-Based Compensation (Compe
Stock-Based Compensation (Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of employee stock-based compensation expense | |||
Stock-based compensation expense | $ 56,292 | $ 54,436 | $ 40,245 |
Tax effect on stock-based compensation expense | (14,354) | (13,734) | (10,093) |
Net effect on income | $ 41,938 | $ 40,702 | $ 30,152 |
Stock-Based Compensation (Weigh
Stock-Based Compensation (Weighted Average Assumptions) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of weighted average assumptions used to value options granted | |||
Grant date fair value of options (in dollars per share) | $ 0 | $ 21.55 | $ 0 |
Volatility | 0.00% | 40.00% | 0.00% |
Risk-free interest rate | 0.00% | 2.50% | 0.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected term (in years) | 0 years | 6 years 6 months | 0 years |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Options) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total intrinsic value of options exercised | $ 35,687 | $ 40,893 | $ 15,667 | |
Cash received from exercises of stock options | $ 10,760 | $ 10,592 | $ 5,305 | |
Weighted-Average Exercise Price | ||||
Granted (in dollars per share) | $ 0 | |||
Exercised (in dollars per share) | $ 14.76 | |||
Forfeited (in dollars per share) | $ 27.51 | |||
Weighted-Average Remaining Contractual Life | ||||
Outstanding | 4 years 1 month 6 days | 3 years 4 months 24 days | 3 years 4 months 24 days | 4 years 3 months 18 days |
Options exercisable | 3 years 8 months 12 days | |||
Aggregate Intrinsic Value | ||||
Outstanding | $ 20,156 | $ 50,590 | $ 56,046 | $ 69,939 |
Options exercisable | $ 18,817 | |||
Stock options | ||||
Options | ||||
Outstanding at the beginning of the period (in shares) | 1,150,586 | 1,887,969 | 2,254,565 | |
Granted (in shares) | 0 | 81,807 | 0 | |
Exercised (in shares) | (705,333) | (783,216) | (359,345) | |
Forfeited (in shares) | (7,213) | (35,974) | (7,251) | |
Outstanding at the end of the period (in shares) | 438,040 | 1,150,586 | 1,887,969 | 2,254,565 |
Options exercisable (in shares) | 397,861 | |||
Weighted-Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 25.66 | $ 20.05 | $ 19.23 | |
Granted (in dollars per share) | 49.02 | 0 | ||
Exercised (in dollars per share) | 18.83 | 13.52 | ||
Forfeited (in dollars per share) | 48.70 | 48.33 | ||
Outstanding at the end of the period (in dollars per share) | 36.28 | 25.66 | $ 20.05 | $ 19.23 |
Options exercisable (in dollars per share) | 34.99 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||
Intrinsic value per share (in dollars per share) | $ 82.29 | $ 69.63 | $ 49.19 | |
Unrecognized compensation expense weighted-average recognition period | 1 year 1 month 6 days | |||
Stock options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||
Exercise prices of stock options outstanding (in dollars per share) | $ 10.40 | |||
Stock options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||||
Exercise prices of stock options outstanding (in dollars per share) | $ 55.29 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock Units and Restricted Stock Awards) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Stock-based compensation expense | $ 4,286 | ||
Fair value adjustment gain on settlement | $ 2,524 | ||
Restricted Stock Units | Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Vesting percent | 33.333% | ||
Restricted Stock Units | Tranche Two | |||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Vesting percent | 33.333% | ||
Restricted Stock Units | Tranche Three | |||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Vesting percent | 33.333% | ||
Unvested restricted stock units and awards | |||
Number of Shares | |||
Balance at the beginning of the period (in shares) | 1,318,870 | 1,461,468 | 1,629,971 |
Granted (in shares) | 970,390 | 997,971 | 940,113 |
Vested (in shares) | (804,982) | (1,029,790) | (1,005,347) |
Forfeited (in shares) | (138,931) | (110,779) | (103,269) |
Balance at the end of the period (in shares) | 1,345,347 | 1,318,870 | 1,461,468 |
Weighted-Average Grant Date Fair Value per Share | |||
Balance at the beginning of the period (in dollars per share) | $ 58.88 | $ 46.59 | $ 32.60 |
Granted (in dollars per share) | 74.61 | 61.91 | 55.24 |
Vested (in dollars per share) | 57.77 | 45.11 | 32.73 |
Forfeited (in dollars per share) | 62.14 | 53.16 | 40.37 |
Balance at the end of the period (in dollars per share) | $ 70.56 | $ 58.88 | $ 46.59 |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Unrecognized compensation expense related to shares | $ 72,238 | ||
Unrecognized compensation expense weighted-average recognition period | 1 year 10 months 24 days | ||
Performance Shares (PSUs) | |||
Number of Shares | |||
Balance at the beginning of the period (in shares) | 254,118 | 124,320 | 136,668 |
Granted (in shares) | 81,689 | 202,168 | 55,986 |
Vested (in shares) | 0 | (68,334) | (68,334) |
Forfeited (in shares) | (33,010) | (4,036) | 0 |
Balance at the end of the period (in shares) | 302,797 | 254,118 | 124,320 |
Weighted-Average Grant Date Fair Value per Share | |||
Balance at the beginning of the period (in dollars per share) | $ 67.96 | $ 44.64 | $ 31.03 |
Granted (in dollars per share) | 83.47 | 69.68 | 61.25 |
Vested (in dollars per share) | 0 | 31.03 | 31.03 |
Forfeited (in dollars per share) | 64.70 | 61.27 | 0 |
Balance at the end of the period (in dollars per share) | $ 72.50 | $ 67.96 | $ 44.64 |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Vesting period | 3 years | ||
Unrecognized compensation expense related to shares | $ 8,201 | ||
Unrecognized compensation expense weighted-average recognition period | 1 year 9 months 18 days | ||
Minimum | Performance Shares (PSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Number of shares to be vest upon each evaluation date | 50.00% | ||
Maximum | Performance Shares (PSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Number of shares to be vest upon each evaluation date | 150.00% |
Benefit Plan (Details)
Benefit Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Voluntary employer matching contributions | $ 6,247 | $ 6,044 | $ 4,778 |
Income Taxes (Loss Before Incom
Income Taxes (Loss Before Income Tax Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of Income before income tax provision | |||
Domestic | $ (17,234) | $ (61,047) | $ (18,242) |
Foreign | 9,189 | 12,952 | 9,080 |
Loss before income tax benefit | $ (8,045) | $ (48,095) | $ (9,162) |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||
Federal | $ (1,086) | $ 4 | $ 4,564 |
State | 2,111 | 2,803 | 1,044 |
Foreign | (4,542) | 5,930 | 4,849 |
Current income tax provision | (3,517) | 8,737 | 10,457 |
Deferred: | |||
Federal | (2,659) | (33,952) | (19,444) |
State | 1,158 | (5,603) | (3,182) |
Foreign | (383) | (75) | (1,003) |
Deferred Total | (1,884) | (39,630) | (23,629) |
Total | $ (5,401) | $ (30,893) | $ (13,172) |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)entity | Dec. 31, 2019USD ($) | |
Deferred Tax Assets | ||
Deferred revenue | $ 5,811 | $ 5,148 |
Prepaid expenses and accruals | 8,737 | 9,533 |
Deferred rent and lease incentives | 255 | 273 |
Right of use asset | (25,937) | (18,507) |
Lease liability | 30,752 | 22,983 |
Net operating loss and tax credit carryforwards | 87,648 | 86,952 |
Property and equipment and intangible assets | (113,041) | (127,255) |
Stock-based compensation expense | 9,122 | 8,033 |
Investment in partnerships | 1,727 | 2,196 |
Convertible Notes | (22,951) | (8,471) |
Other | 639 | 2,218 |
Total deferred tax liabilities, net | (17,238) | (16,897) |
Less: valuation allowance | (17,502) | (12,584) |
Net deferred tax liabilities | $ (34,740) | (29,481) |
Number of entities, subject to GILTI | entity | 2 | |
CARES Act, Operating loss, expected refund | $ 1,224 | |
Deferred tax liability related to dividend distribution tax | 5,550 | |
Valuation allowance related to capital losses | $ 17,502 | $ 12,584 |
Income Taxes (Rate Reconciliati
Income Taxes (Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Tax benefit, at U.S. federal statutory tax rate | $ (1,787) | $ (10,012) | $ (1,559) |
State income tax benefit, net of federal benefit | (2,461) | (5,390) | (1,714) |
Effect of stock-based compensation excess tax benefit | (9,349) | (11,983) | (7,782) |
Effect of permanent items | 258 | 1,048 | 2,967 |
Effect of India partnerships | 2,977 | 0 | 0 |
Change in valuation allowance | 16,210 | (3,364) | (4,244) |
Effect of change in state and foreign income tax rates | 1,323 | 2,449 | (269) |
Uncertain tax positions | (6,093) | 4,478 | (2,062) |
BEAT liability | 0 | 0 | 3,760 |
Research and development credits | (5,939) | (6,756) | (4,770) |
State net operating loss adjustment | 31 | (1,588) | 0 |
Other | (571) | 225 | 2,501 |
Total | $ (5,401) | $ (30,893) | $ (13,172) |
Income Taxes (NOL) (Details)
Income Taxes (NOL) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Operating Loss Carryforwards | |
NOL, offset future federal taxable income | $ 241,000 |
NOL, carried forward indefinitely | 1,000 |
AMT credits | 727 |
Federal | |
Operating Loss Carryforwards | |
NOL carryforwards | 242,000 |
Federal | Research and development | |
Operating Loss Carryforwards | |
Tax credit carryforward | 26,958 |
State | |
Operating Loss Carryforwards | |
NOL carryforwards | 211,000 |
State | Research and development | |
Operating Loss Carryforwards | |
Tax credit carryforward | 11,799 |
Foreign | |
Operating Loss Carryforwards | |
Tax credit carryforward | $ 886 |
Minimum | |
Operating Loss Carryforwards | |
AMT credits refundable | 50.00% |
Maximum | |
Operating Loss Carryforwards | |
AMT credits refundable | 100.00% |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of unrecognized tax benefit | |||
Unrecognized tax benefits balance at beginning of year | $ 18,939 | $ 15,628 | $ 18,312 |
Additions based on tax positions related to the current year | 1,420 | 2,261 | 1,907 |
Additions (reductions) based on tax positions related to prior years | (2,793) | (3,976) | |
Additions based on tax positions related to prior years | 1,050 | ||
Reductions for settlements with taxing authorities related to prior years | (2,434) | 0 | (615) |
Unrecognized tax benefits balance at end of year | 15,132 | 18,939 | $ 15,628 |
Unrecognized tax benefits that would impact effective tax rate, if recognized | 15,132 | ||
Decrease in unrecognized tax benefits is possible in next twelve months | 1,495 | ||
Potential interest and penalties related to unrecognized tax benefits included in income tax expense (benefit) | (4,875) | 1,476 | |
Accrued interest and penalties on unrecognized tax benefits | $ 1,383 | $ 7,336 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2020 | May 25, 2018 | |
Basic income (loss) per share calculation: | |||||
Net income (loss) attributable to Envestnet, Inc. | $ (3,110) | $ (16,782) | $ 5,755 | ||
Basic number of weighted-average shares outstanding (in shares) | 53,589,232 | 50,937,919 | 45,268,002 | ||
Basic net income (loss) per share (in dollars per share) | $ (0.06) | $ (0.33) | $ 0.13 | ||
Diluted income (loss) per share calculation: | |||||
Net income (loss) attributable to Envestnet, Inc. | $ (3,110) | $ (16,782) | $ 5,755 | ||
Effect of dilutive shares: | |||||
Options to purchase common stock (in shares) | 0 | 0 | 1,304,493 | ||
Unvested restricted stock units (in shares) | 0 | 0 | 811,590 | ||
Convertible Notes (in shares) | 0 | 0 | 0 | ||
Warrants (in shares) | 0 | 0 | 0 | ||
Diluted number of weighted-average shares outstanding (in shares) | 53,589,232 | 50,937,919 | 47,384,085 | ||
Diluted net income (loss) per share (in dollars per share) | $ (0.06) | $ (0.33) | $ 0.12 | ||
Convertible Notes due 2023 | |||||
Conversion price (in dollars per share) | $ 68.31 | $ 68.31 | |||
Convertible Notes due 2025 | |||||
Conversion price (in dollars per share) | $ 106.74 | $ 106.74 |
Net Income (Loss) Per Share Ant
Net Income (Loss) Per Share Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Common share equivalents for securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share | |||
Anti-dilutive securities excluded from computation of diluted earnings per share (in shares) | 12,454,733 | 8,244,079 | 8,263,826 |
Convertible Notes due 2025 | |||
Common share equivalents for securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share | |||
Shares converted (in shares) | 4,848,044 | ||
Convertible Notes Due 2019 | |||
Common share equivalents for securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share | |||
Shares converted (in shares) | 2,743,321 | ||
Options to purchase common stock | |||
Common share equivalents for securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share | |||
Anti-dilutive securities excluded from computation of diluted earnings per share (in shares) | 438,040 | 1,150,586 | 0 |
Unvested RSU's and PSU's | |||
Common share equivalents for securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share | |||
Anti-dilutive securities excluded from computation of diluted earnings per share (in shares) | 1,648,144 | 1,572,988 | 0 |
Convertible Notes | |||
Common share equivalents for securities that were anti-dilutive and therefore excluded from the computation of diluted earnings per share | |||
Anti-dilutive securities excluded from computation of diluted earnings per share (in shares) | 9,898,549 | 5,050,505 | 7,793,826 |
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 earnings per share (in shares) | 470,000 | 470,000 | 470,000 |
Segment Information Reconciliat
Segment Information Reconciliation From Income (Loss) From Operations By Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | $ 19,441 | $ (16,073) | $ 14,165 |
Nonsegment operating expenses | (978,789) | (916,200) | (798,198) |
Interest expense, net | (30,392) | (29,173) | (22,840) |
Other income (expense), net | 2,906 | (2,849) | (487) |
Consolidated loss before income tax benefit | (8,045) | (48,095) | (9,162) |
Income tax benefit | (5,401) | (30,893) | (13,172) |
Consolidated net income (loss) | (2,644) | (17,202) | 4,010 |
Add: Net (income) loss attributable to non-controlling interest | (466) | 420 | 1,745 |
Consolidated net income (loss) attributable to Envestnet, Inc. | (3,110) | (16,782) | 5,755 |
Operating Segments | Envestnet Wealth Solutions | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | 91,501 | 67,713 | 75,491 |
Operating Segments | Envestnet Data And Analytics | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | (9,943) | (25,262) | (10,013) |
Nonsegment | |||
Segment Reporting Information [Line Items] | |||
Nonsegment operating expenses | $ (62,117) | $ (58,524) | $ (51,313) |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Assets | $ 2,144,290 | $ 1,801,884 | |
Depreciation and amortization | 113,661 | 101,271 | $ 77,626 |
Capital expenditures | 66,996 | 53,943 | 44,592 |
Envestnet Wealth Solutions | |||
Segment Reporting Information [Line Items] | |||
Assets | 1,634,153 | 1,297,891 | |
Depreciation and amortization | 80,714 | 65,746 | 45,139 |
Capital expenditures | 46,891 | 42,395 | 36,406 |
Envestnet Data and Analytics | |||
Segment Reporting Information [Line Items] | |||
Assets | 510,137 | 503,993 | |
Depreciation and amortization | 32,947 | 35,525 | 32,487 |
Capital expenditures | $ 20,105 | $ 11,548 | $ 8,186 |
Geographical Information (Detai
Geographical Information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets, net | $ 144,470 | $ 114,019 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets, net | 140,651 | 108,992 |
India | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets, net | 2,970 | 3,988 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets, net | $ 849 | $ 1,039 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)previousClaim | Dec. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of previous claims experienced | previousClaim | 0 | |
Estimated future minimum unconditional purchase obligations | $ 56,000 | |
Sales and use tax liability | 6,563 | $ 10,220 |
Non-income tax receivable | $ 2,087 | $ 3,346 |
Uncategorized Items - env-20201
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2014-09 [Member] |