(State or other jurisdiction of incorporation or organization) | (I.R.S Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of exchange on which registered | ||||||
ý | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | |||||
June 30, | December 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Fees receivable, net | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property and equipment, net | ||||||||||||||
Internally developed software, net | ||||||||||||||
Intangible assets, net | ||||||||||||||
Goodwill | ||||||||||||||
Operating lease right-of-use assets, net | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable, accrued expenses and other current liabilities | $ | $ | ||||||||||||
Operating lease liabilities | ||||||||||||||
Deferred revenue | ||||||||||||||
Current portion of debt | ||||||||||||||
Total current liabilities | ||||||||||||||
Debt, net of current portion | ||||||||||||||
Operating lease liabilities, net of current portion | ||||||||||||||
Deferred tax liabilities, net | ||||||||||||||
Other liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (note 19) | ||||||||||||||
Stockholders' equity | ||||||||||||||
Preferred stock, par value $ | ||||||||||||||
Common stock, par value $ | ||||||||||||||
Treasury stock at cost, | ( | ( | ||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total stockholders’ equity, attributable to Envestnet, Inc. | ||||||||||||||
Non-controlling interest | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||
Asset-based | $ | $ | $ | $ | ||||||||||||||||||||||
Subscription-based | ||||||||||||||||||||||||||
Total recurring revenue | ||||||||||||||||||||||||||
Professional services and other revenue | ||||||||||||||||||||||||||
Total revenue | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Direct expense | ||||||||||||||||||||||||||
Employee compensation | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | ||||||||||||||||||||||
Other (expense) income, net | ( | ( | ( | |||||||||||||||||||||||
Loss before income tax provision (benefit) | ( | ( | ( | ( | ||||||||||||||||||||||
Income tax provision (benefit) | ( | ( | ||||||||||||||||||||||||
Net loss | ( | ( | ( | ( | ||||||||||||||||||||||
Add: Net loss attributable to non-controlling interest | ||||||||||||||||||||||||||
Net loss attributable to Envestnet, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Net loss attributable to Envestnet, Inc. per share: | ||||||||||||||||||||||||||
Basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||||||
Basic and diluted |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net loss attributable to Envestnet, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ( | |||||||||||||||||||||||
Total other comprehensive income (loss), net of tax | ( | ( | ( | |||||||||||||||||||||||
Comprehensive loss attributable to Envestnet, Inc. | $ | ( | $ | ( | $ | ( | $ | ( |
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional | Other | Non- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Paid-in | Comprehensive | Accumulated | Controlling | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Loss | Deficit | Interest | Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, vesting of RSUs and PSUs | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net cash paid related to tax withholding for stock-based compensation | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from the exercise of stock options | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of non-controlling units from third-party shareholders | — | — | — | — | ( | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | ( | ( | $ | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, vesting of RSUs and PSUs | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net cash paid related to tax withholding for stock-based compensation | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from the exercise of stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2023 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional | Other | Non- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Paid-in | Comprehensive | Accumulated | Controlling | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Loss | Deficit | Interest | Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, vesting of RSUs and PSUs | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net cash paid related to tax withholding for stock-based compensation | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from the exercise of stock options | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, vesting of RSUs and PSUs | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net cash paid related to tax withholding for stock-based compensation | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from the exercise of stock options | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Share repurchases | — | — | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended | ||||||||||||||
June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Deferred income taxes | ( | ( | ||||||||||||
Non-cash compensation expense | ||||||||||||||
Non-cash interest expense | ||||||||||||||
Loss allocations from equity method investments | ||||||||||||||
Dilution gain on equity method investee share issuance | ( | ( | ||||||||||||
Lease related impairments | ||||||||||||||
Other | ( | |||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Fees receivable, net | ( | |||||||||||||
Prepaid expenses and other assets | ( | ( | ||||||||||||
Accounts payable, accrued expenses and other liabilities | ( | |||||||||||||
Deferred revenue | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchases of property and equipment | ( | ( | ||||||||||||
Capitalization of internally developed software | ( | ( | ||||||||||||
Acquisitions of businesses, net of cash acquired | ( | |||||||||||||
Investments in private companies | ( | ( | ||||||||||||
Acquisition of proprietary technology | ( | ( | ||||||||||||
Issuance of loan receivable to private company | ( | |||||||||||||
Issuance of note receivable to equity method investees | ( | |||||||||||||
Other | ||||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Proceeds from borrowings on Revolving Credit Facility | ||||||||||||||
Payments related to Revolving Credit Facility | ( | ( | ||||||||||||
Payments related to Convertible Notes | ( | |||||||||||||
Payments on finance lease obligations | ( | ( | ||||||||||||
Proceeds from exercise of stock options | ||||||||||||||
Payments related to tax withholdings for stock-based compensation | ( | ( | ||||||||||||
Payments related to share repurchases | ( | ( | ||||||||||||
Purchase of non-controlling units from third-party shareholders | ( | |||||||||||||
Payments of contingent consideration | ( | |||||||||||||
Other | ||||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
Effect of exchange rate on changes on cash, cash equivalents and restricted cash | ( | |||||||||||||
Net change in cash, cash equivalents and restricted cash | ( | ( | ||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||
Supplemental disclosures of cash flow information | ||||||||||||||
Net cash paid for income taxes | $ | $ | ||||||||||||
Cash paid for interest | $ | $ | ||||||||||||
Supplemental disclosure of non-cash activities | ||||||||||||||
Conversion of equity method investee loan to shares | $ | $ | ||||||||||||
Right-of-use assets obtained in exchange for lease liabilities, net | $ | $ | ||||||||||||
Property and equipment acquired through finance lease | $ | $ | ||||||||||||
Purchase of property and equipment included in accounts payable, accrued expenses and other liabilities | $ | $ | ||||||||||||
Internally developed software costs included in accounts payable, accrued expenses and other liabilities | $ | $ | ||||||||||||
Membership interest liabilities included in other liabilities | $ | $ | ||||||||||||
June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
(in thousands) | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash included in prepaid expenses and other current assets | ||||||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
Preliminary Estimate | Measurement Period Adjustments | Revised Estimate | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cash consideration, net | $ | $ | $ | |||||||||||||||||
Estimated working capital adjustment | ( | ( | ||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
Preliminary Estimate | Measurement Period Adjustments | Revised Estimate | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Total current assets | $ | $ | $ | |||||||||||||||||
Other non-current assets | ( | |||||||||||||||||||
Identifiable intangible assets | ||||||||||||||||||||
Goodwill | ||||||||||||||||||||
Total assets acquired | ||||||||||||||||||||
Accounts payable, accrued expenses and other current liabilities | ( | ( | ( | |||||||||||||||||
Operating lease liabilities | ( | ( | ||||||||||||||||||
Deferred revenue | ( | ( | ||||||||||||||||||
Total liabilities assumed | ( | ( | ( | |||||||||||||||||
Total net assets acquired, net of cash received | $ | $ | $ |
Preliminary Estimate | Estimated Useful Life | Amortization Method | ||||||||||||||||||
(in thousands) | (in years) | |||||||||||||||||||
Customer lists | $ | Accelerated | ||||||||||||||||||
Proprietary technologies | Straight-line | |||||||||||||||||||
Trade names | Straight-line | |||||||||||||||||||
Total intangible assets acquired | $ |
June 30, | December 31, | |||||||||||||
2023 | 2022 | |||||||||||||
(in thousands) | ||||||||||||||
Prepaid technology | $ | $ | ||||||||||||
Prepaid insurance | ||||||||||||||
Non-income tax receivable | ||||||||||||||
Other | ||||||||||||||
Total prepaid expenses and other current assets | $ | $ |
June 30, | December 31, | |||||||||||||||||||
Estimated Useful Life | 2023 | 2022 | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Internally developed software | $ | $ | ||||||||||||||||||
Less: accumulated amortization | ( | ( | ||||||||||||||||||
Internally developed software, net | $ | $ |
June 30, | December 31, | |||||||||||||
2023 | 2022 | |||||||||||||
(in thousands) | ||||||||||||||
United States | $ | $ | ||||||||||||
India | ||||||||||||||
Other | ||||||||||||||
Total long-lived assets, net | $ | $ |
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
Gross | Net | Gross | Net | |||||||||||||||||||||||||||||||||||
Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | |||||||||||||||||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Customer lists | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Proprietary technologies | ( | ( | ||||||||||||||||||||||||||||||||||||
Trade names | ( | ( | ||||||||||||||||||||||||||||||||||||
Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ |
Remainder of 2023 | $ | |||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
Thereafter | ||||||||
Total | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Intangible asset amortization | $ | $ | $ | $ | ||||||||||||||||||||||
Internally developed software amortization | ||||||||||||||||||||||||||
Property and equipment depreciation | ||||||||||||||||||||||||||
Total depreciation and amortization | $ | $ | $ | $ |
Envestnet Wealth Solutions | Envestnet Data & Analytics | Total | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance as of December 31, 2022 | $ | $ | $ | |||||||||||||||||
Foreign currency translation | ||||||||||||||||||||
Balance as of June 30, 2023 | $ | $ | $ |
June 30, | December 31, | |||||||||||||
2023 | 2022 | |||||||||||||
(in thousands) | ||||||||||||||
Accrued investment manager fees | $ | $ | ||||||||||||
Accrued compensation and related taxes | ||||||||||||||
Accounts payable | ||||||||||||||
Accrued professional services | ||||||||||||||
Income tax payable | ||||||||||||||
Accrued technology | ||||||||||||||
Accrued treasury stock purchases | ||||||||||||||
Other accrued expenses | ||||||||||||||
Total accounts payable, accrued expenses and other current liabilities | $ | $ |
June 30, 2023 | ||||||||||||||||||||||||||
Issuance Amount | Unamortized Issuance Costs | Carrying Value | Fair Value (Level II) | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Revolving Credit Facility | $ | $ | $ | $ | ||||||||||||||||||||||
Convertible Notes due 2025 | ( | |||||||||||||||||||||||||
Convertible Notes due 2027 | ( | |||||||||||||||||||||||||
Total debt | $ | $ | ( | $ | $ |
December 31, 2022 | ||||||||||||||||||||||||||
Issuance Amount | Unamortized Issuance Costs | Carrying Value | Fair Value (Level II) | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Revolving Credit Facility | $ | $ | $ | $ | ||||||||||||||||||||||
Convertible Notes due 2023 | ( | |||||||||||||||||||||||||
Convertible Notes due 2025 | ( | |||||||||||||||||||||||||
Convertible Notes due 2027 | ( | |||||||||||||||||||||||||
Total debt | $ | $ | ( | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Convertible Notes interest | $ | $ | $ | $ | ||||||||||||||||||||||
Amortization of debt discount and issuance costs | ||||||||||||||||||||||||||
Undrawn and other fees | ||||||||||||||||||||||||||
Revolving Credit Facility interest | ||||||||||||||||||||||||||
Total interest expense | $ | $ | $ | $ |
June 30, | June 30, | |||||||||||||
2023 | 2022 | |||||||||||||
Convertible Notes due 2023 | N/A | % | ||||||||||||
Convertible Notes due 2025 | % | % | ||||||||||||
Convertible Notes due 2027 | % | N/A |
June 30, 2023 | ||||||||||||||||||||||||||
Fair Value | Level I | Level II | Level III | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | ||||||||||||||||||||||
Assets to fund deferred compensation liability | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Deferred compensation liability | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
December 31, 2022 | ||||||||||||||||||||||||||
Fair Value | Level I | Level II | Level III | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | ||||||||||||||||||||||
Assets to fund deferred compensation liability | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Deferred compensation liability | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Fair Value of Assets Used to Fund Deferred Compensation Liability | ||||||||
(in thousands) | ||||||||
Balance as of December 31, 2022 | $ | |||||||
Fair value adjustments and fees | ||||||||
Balance as of June 30, 2023 | $ |
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Consolidated | Envestnet Wealth Solutions | Envestnet Data & Analytics | Consolidated | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
Asset-based | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Subscription-based | ||||||||||||||||||||||||||||||||||||||
Total recurring revenue | ||||||||||||||||||||||||||||||||||||||
Professional services and other revenue | ||||||||||||||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ | $ | $ |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Consolidated | Envestnet Wealth Solutions | Envestnet Data & Analytics | Consolidated | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
Asset-based | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Subscription-based | ||||||||||||||||||||||||||||||||||||||
Total recurring revenue | ||||||||||||||||||||||||||||||||||||||
Professional services and other revenue | ||||||||||||||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
United States | $ | $ | $ | $ | ||||||||||||||||||||||
International | ||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Asset-based | $ | $ | $ | $ | ||||||||||||||||||||||
Subscription-based | ||||||||||||||||||||||||||
Professional services and other | ||||||||||||||||||||||||||
Total direct expense | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Stock-based compensation expense | $ | $ | $ | $ | ||||||||||||||||||||||
Tax effect on stock-based compensation expense | ( | ( | ( | ( | ||||||||||||||||||||||
Net effect on income | $ | $ | $ | $ |
Weighted- | Weighted-Average | |||||||||||||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||||||||||||
Options | Exercise Price | Contractual Life | Intrinsic Value | |||||||||||||||||||||||
(in years) | (in thousands) | |||||||||||||||||||||||||
Outstanding as of December 31, 2022 | $ | $ | ||||||||||||||||||||||||
Exercised | ( | $ | ||||||||||||||||||||||||
Forfeited | ( | $ | ||||||||||||||||||||||||
Outstanding as of June 30, 2023 | $ | $ | ||||||||||||||||||||||||
Options exercisable as of June 30, 2023 | $ | $ | ||||||||||||||||||||||||
RSUs | PSUs | |||||||||||||||||||||||||
Number of Shares | Weighted- Average Grant Date Fair Value per Share | Number of Shares | Weighted- Average Grant Date Fair Value per Share | |||||||||||||||||||||||
Non-vested as of December 31, 2022 | $ | $ | ||||||||||||||||||||||||
Granted | $ | $ | ||||||||||||||||||||||||
Vested | ( | $ | ( | $ | ||||||||||||||||||||||
Forfeited | ( | $ | ( | $ | ||||||||||||||||||||||
Non-vested as of June 30, 2023 | $ | $ | ||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(in thousands, except for effective tax rate) | ||||||||||||||||||||||||||
Loss before income tax provision (benefit) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Income tax provision (benefit) | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Effective tax rate | ( | % | % | ( | % | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Convertible Notes | ||||||||||||||||||||||||||
Non-vested RSUs and PSUs | ||||||||||||||||||||||||||
Options to purchase common stock | ||||||||||||||||||||||||||
Warrants | ||||||||||||||||||||||||||
Total anti-dilutive securities |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | $ | $ | $ | $ | ||||||||||||||||||||||
Envestnet Data & Analytics | ( | ( | ( | ( | ||||||||||||||||||||||
Nonsegment operating expenses | ( | ( | ( | ( | ||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | ||||||||||||||||||||||
Other (expense) income, net | ( | ( | ( | |||||||||||||||||||||||
Consolidated loss before income tax provision (benefit) | ( | ( | ( | ( | ||||||||||||||||||||||
Income tax provision (benefit) | ( | ( | ||||||||||||||||||||||||
Consolidated net loss | ( | ( | ( | ( | ||||||||||||||||||||||
Add: Net loss attributable to non-controlling interest | ||||||||||||||||||||||||||
Consolidated net loss attributable to Envestnet, Inc. | $ | ( | $ | ( | $ | ( | $ | ( |
June 30, | December 31, | |||||||||||||
2023 | 2022 | |||||||||||||
(in thousands) | ||||||||||||||
Envestnet Wealth Solutions | $ | $ | ||||||||||||
Envestnet Data & Analytics | ||||||||||||||
Consolidated total assets | $ | $ |
As of | ||||||||||||||||||||||||||||||||
June 30, | September 30, | December 31, | March 31, | June 30, | ||||||||||||||||||||||||||||
2022 | 2022 | 2022 | 2023 | 2023 | ||||||||||||||||||||||||||||
(in millions, except accounts and advisors data) | ||||||||||||||||||||||||||||||||
Platform Assets | ||||||||||||||||||||||||||||||||
Assets under Management (“AUM”) | $ | 325,209 | $ | 315,883 | $ | 341,144 | $ | 363,244 | $ | 384,773 | ||||||||||||||||||||||
Assets under Administration (“AUA”) | 352,840 | 350,576 | 367,412 | 379,843 | 394,078 | |||||||||||||||||||||||||||
Total AUM/A | 678,049 | 666,459 | 708,556 | 743,087 | 778,851 | |||||||||||||||||||||||||||
Subscription | 4,312,114 | 4,134,414 | 4,382,109 | 4,566,971 | 4,643,313 | |||||||||||||||||||||||||||
Total Platform Assets | $ | 4,990,163 | $ | 4,800,873 | $ | 5,090,665 | $ | 5,310,058 | $ | 5,422,164 | ||||||||||||||||||||||
Platform Accounts | ||||||||||||||||||||||||||||||||
AUM | 1,491,861 | 1,522,968 | 1,547,009 | 1,571,862 | 1,609,677 | |||||||||||||||||||||||||||
AUA | 1,061,484 | 1,135,302 | 1,135,026 | 1,142,166 | 1,144,375 | |||||||||||||||||||||||||||
Total AUM/A | 2,553,345 | 2,658,270 | 2,682,035 | 2,714,028 | 2,754,052 | |||||||||||||||||||||||||||
Subscription | 15,312,144 | 15,596,403 | 15,665,020 | 15,779,980 | 15,916,955 | |||||||||||||||||||||||||||
Total Platform Accounts | 17,865,489 | 18,254,673 | 18,347,055 | 18,494,008 | 18,671,007 | |||||||||||||||||||||||||||
Advisors | ||||||||||||||||||||||||||||||||
AUM/A | 38,394 | 38,417 | 38,025 | 38,611 | 38,809 | |||||||||||||||||||||||||||
Subscription | 66,838 | 67,348 | 67,520 | 67,843 | 68,439 | |||||||||||||||||||||||||||
Total Advisors | 105,232 | 105,765 | 105,545 | 106,454 | 107,248 |
Asset Rollforward - Three Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
As of March 31, | Gross | Net | Market | Reclass to | As of June 30, | |||||||||||||||||||||||||||||||||||||||
2023 | Sales | Redemptions | Flows | Impact | Subscription | 2023 | ||||||||||||||||||||||||||||||||||||||
(in millions, except account data) | ||||||||||||||||||||||||||||||||||||||||||||
AUM | $ | 363,244 | $ | 25,282 | $ | (16,630) | $ | 8,652 | $ | 12,877 | $ | — | $ | 384,773 | ||||||||||||||||||||||||||||||
AUA | 379,843 | 25,389 | (24,013) | 1,376 | 13,629 | (770) | 394,078 | |||||||||||||||||||||||||||||||||||||
Total AUM/A | $ | 743,087 | $ | 50,671 | $ | (40,643) | $ | 10,028 | $ | 26,506 | $ | (770) | $ | 778,851 | ||||||||||||||||||||||||||||||
Fee-Based Accounts | 2,714,028 | 44,244 | (4,220) | 2,754,052 |
Asset Rollforward - Six Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
As of December 31, | Gross | Net | Market | Reclass to | As of June 30, | |||||||||||||||||||||||||||||||||||||||
2022 | Sales | Redemptions | Flows | Impact | Subscription | 2023 | ||||||||||||||||||||||||||||||||||||||
(in millions, except account data) | ||||||||||||||||||||||||||||||||||||||||||||
AUM | $ | 341,144 | $ | 49,939 | $ | (32,307) | $ | 17,632 | $ | 27,136 | $ | (1,139) | $ | 384,773 | ||||||||||||||||||||||||||||||
AUA | 367,412 | 57,940 | (45,560) | 12,380 | 28,158 | (13,872) | 394,078 | |||||||||||||||||||||||||||||||||||||
Total AUM/A | $ | 708,556 | $ | 107,879 | $ | (77,867) | $ | 30,012 | $ | 55,294 | $ | (15,011) | $ | 778,851 | ||||||||||||||||||||||||||||||
Fee-Based Accounts | 2,682,035 | 160,493 | (88,476) | 2,754,052 |
As of | ||||||||||||||||||||||||||||||||
June 30, | September 30, | December 31, | March 31, | June 30, | ||||||||||||||||||||||||||||
2022 | 2022 | 2022 | 2023 | 2023 | ||||||||||||||||||||||||||||
(in millions, except number of firms data) | ||||||||||||||||||||||||||||||||
Number of paying users | 37.2 | 38.1 | 38.8 | 37.5 | 38.0 | |||||||||||||||||||||||||||
Number of firms | 1,731 | 1,815 | 1,827 | 1,851 | 1,873 |
Three Months Ended | ||||||||||||||||||||||||||
June 30, | $ | % | ||||||||||||||||||||||||
2023 | 2022 | Change | Change | |||||||||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||
Envestnet Wealth Solutions: | ||||||||||||||||||||||||||
Asset-based | $ | 185,762 | $ | 191,972 | $ | (6,210) | (3) | % | ||||||||||||||||||
Subscription-based | 75,509 | 73,568 | 1,941 | 3 | % | |||||||||||||||||||||
Total recurring revenue | 261,271 | 265,540 | (4,269) | (2) | % | |||||||||||||||||||||
Professional services and other revenue | 10,310 | 6,460 | 3,850 | 60 | % | |||||||||||||||||||||
Total Envestnet Wealth Solutions revenue | $ | 271,581 | $ | 272,000 | $ | (419) | — | % | ||||||||||||||||||
Envestnet Data & Analytics: | ||||||||||||||||||||||||||
Subscription-based | $ | 39,450 | $ | 44,552 | $ | (5,102) | (11) | % | ||||||||||||||||||
Total recurring revenue | 39,450 | 44,552 | (5,102) | (11) | % | |||||||||||||||||||||
Professional services and other revenue | 1,403 | 2,300 | (897) | (39) | % | |||||||||||||||||||||
Total Envestnet Data & Analytics revenue | $ | 40,853 | $ | 46,852 | $ | (5,999) | (13) | % | ||||||||||||||||||
Total consolidated revenue | $ | 312,434 | $ | 318,852 | $ | (6,418) | (2) | % | ||||||||||||||||||
Deferred revenue fair value adjustment | 17 | 54 | (37) | (69) | % | |||||||||||||||||||||
Total consolidated adjusted revenue* | $ | 312,451 | $ | 318,906 | $ | (6,455) | (2) | % | ||||||||||||||||||
Consolidated net loss attributable to Envestnet, Inc. | $ | (21,416) | $ | (23,285) | $ | 1,869 | 8 | % | ||||||||||||||||||
Net loss attributable to Envestnet, Inc. per share - basic and diluted | $ | (0.39) | $ | (0.42) | $ | 0.03 | 7 | % | ||||||||||||||||||
Adjusted EBITDA* | $ | 57,785 | $ | 57,126 | $ | 659 | 1 | % | ||||||||||||||||||
Adjusted net income* | $ | 30,391 | $ | 32,024 | $ | (1,633) | (5) | % | ||||||||||||||||||
Adjusted net income per diluted share* | $ | 0.46 | $ | 0.49 | $ | (0.03) | (6) | % |
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | $ Change | % Change | |||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
Asset-based | $ | 185,762 | 59 | % | $ | 191,972 | 60 | % | $ | (6,210) | (3) | % | ||||||||||||||||||||||||||
Subscription-based | 114,959 | 37 | % | 118,120 | 37 | % | (3,161) | (3) | % | |||||||||||||||||||||||||||||
Total recurring revenue | 300,721 | 96 | % | 310,092 | 97 | % | (9,371) | (3) | % | |||||||||||||||||||||||||||||
Professional services and other revenue | 11,713 | 4 | % | 8,760 | 3 | % | 2,953 | 34 | % | |||||||||||||||||||||||||||||
Total revenue | 312,434 | 100 | % | 318,852 | 100 | % | (6,418) | (2) | % | |||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Direct expense | 123,497 | 40 | % | 126,482 | 40 | % | (2,985) | (2) | % | |||||||||||||||||||||||||||||
Employee compensation | 117,097 | 37 | % | 125,767 | 39 | % | (8,670) | (7) | % | |||||||||||||||||||||||||||||
General and administrative | 53,346 | 17 | % | 66,144 | 21 | % | (12,798) | (19) | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 33,806 | 11 | % | 32,182 | 10 | % | 1,624 | 5 | % | |||||||||||||||||||||||||||||
Total operating expenses | 327,746 | 105 | % | 350,575 | 110 | % | (22,829) | (7) | % | |||||||||||||||||||||||||||||
Loss from operations | (15,312) | (5) | % | (31,723) | (10) | % | 16,411 | 52 | % | |||||||||||||||||||||||||||||
Other (expense) income, net | (7,402) | (2) | % | 1,622 | 1 | % | (9,024) | * | ||||||||||||||||||||||||||||||
Loss before income tax provision (benefit) | (22,714) | (7) | % | (30,101) | (9) | % | 7,387 | 25 | % | |||||||||||||||||||||||||||||
Income tax provision (benefit) | 418 | — | % | (5,833) | (2) | % | 6,251 | 107 | % | |||||||||||||||||||||||||||||
Net loss | (23,132) | (7) | % | (24,268) | (8) | % | 1,136 | 5 | % | |||||||||||||||||||||||||||||
Add: Net loss attributable to non-controlling interest | 1,716 | 1 | % | 983 | — | % | 733 | 75 | % | |||||||||||||||||||||||||||||
Net loss attributable to Envestnet, Inc. | $ | (21,416) | (7) | % | $ | (23,285) | (7) | % | $ | 1,869 | 8 | % |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | $ Change | % Change | |||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
Asset-based | $ | 362,694 | 59 | % | $ | 394,689 | 62 | % | $ | (31,995) | (8) | % | ||||||||||||||||||||||||||
Subscription-based | 232,038 | 38 | % | 232,854 | 36 | % | (816) | — | % | |||||||||||||||||||||||||||||
Total recurring revenue | 594,732 | 97 | % | 627,543 | 98 | % | (32,811) | (5) | % | |||||||||||||||||||||||||||||
Professional services and other revenue | 16,409 | 3 | % | 12,672 | 2 | % | 3,737 | 29 | % | |||||||||||||||||||||||||||||
Total revenue | 611,141 | 100 | % | 640,215 | 100 | % | (29,074) | (5) | % | |||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Direct expense | 232,486 | 38 | % | 251,764 | 39 | % | (19,278) | (8) | % | |||||||||||||||||||||||||||||
Employee compensation | 231,312 | 38 | % | 252,616 | 39 | % | (21,304) | (8) | % | |||||||||||||||||||||||||||||
General and administrative | 106,965 | 18 | % | 110,479 | 17 | % | (3,514) | (3) | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 66,747 | 11 | % | 63,800 | 10 | % | 2,947 | 5 | % | |||||||||||||||||||||||||||||
Total operating expenses | 637,510 | 104 | % | 678,659 | 106 | % | (41,149) | (6) | % | |||||||||||||||||||||||||||||
Loss from operations | (26,369) | (4) | % | (38,444) | (6) | % | 12,075 | 31 | % | |||||||||||||||||||||||||||||
Other expense, net | (15,337) | (3) | % | (4,345) | (1) | % | (10,992) | * | ||||||||||||||||||||||||||||||
Loss before income tax provision (benefit) | (41,706) | (7) | % | (42,789) | (7) | % | 1,083 | 3 | % | |||||||||||||||||||||||||||||
Income tax provision (benefit) | 24,187 | 4 | % | (3,813) | (1) | % | 28,000 | * | ||||||||||||||||||||||||||||||
Net loss | (65,893) | (11) | % | (38,976) | (6) | % | (26,917) | (69) | % | |||||||||||||||||||||||||||||
Add: Net loss attributable to non-controlling interest | 3,249 | 1 | % | 1,832 | — | % | 1,417 | 77 | % | |||||||||||||||||||||||||||||
Net loss attributable to Envestnet, Inc. | $ | (62,644) | (10) | % | $ | (37,144) | (6) | % | $ | (25,500) | (69) | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | $ | 23,399 | $ | 3,968 | $ | 46,862 | $ | 29,237 | ||||||||||||||||||
Envestnet Data & Analytics | (10,993) | (3,705) | (18,773) | (9,292) | ||||||||||||||||||||||
Nonsegment operating expenses | (27,718) | (31,986) | (54,458) | (58,389) | ||||||||||||||||||||||
Loss from operations | (15,312) | (31,723) | (26,369) | (38,444) | ||||||||||||||||||||||
Other (expense) income, net | (7,402) | 1,622 | (15,337) | (4,345) | ||||||||||||||||||||||
Consolidated loss before income tax provision (benefit) | (22,714) | (30,101) | (41,706) | (42,789) | ||||||||||||||||||||||
Income tax provision (benefit) | 418 | (5,833) | 24,187 | (3,813) | ||||||||||||||||||||||
Consolidated net loss | (23,132) | (24,268) | (65,893) | (38,976) | ||||||||||||||||||||||
Add: Net loss attributable to non-controlling interest | 1,716 | 983 | 3,249 | 1,832 | ||||||||||||||||||||||
Consolidated net loss attributable to Envestnet, Inc. | $ | (21,416) | $ | (23,285) | $ | (62,644) | $ | (37,144) |
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | $ Change | % Change | |||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
Asset-based | $ | 185,762 | 68 | % | $ | 191,972 | 71 | % | $ | (6,210) | (3) | % | ||||||||||||||||||||||||||
Subscription-based | 75,509 | 28 | % | 73,568 | 27 | % | 1,941 | 3 | % | |||||||||||||||||||||||||||||
Total recurring revenue | 261,271 | 96 | % | 265,540 | 98 | % | (4,269) | (2) | % | |||||||||||||||||||||||||||||
Professional services and other revenue | 10,310 | 4 | % | 6,460 | 2 | % | 3,850 | 60 | % | |||||||||||||||||||||||||||||
Total revenue | 271,581 | 100 | % | 272,000 | 100 | % | (419) | — | % | |||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Direct expense | 118,019 | 43 | % | 120,722 | 44 | % | (2,703) | (2) | % | |||||||||||||||||||||||||||||
Employee compensation | 75,988 | 28 | % | 78,759 | 29 | % | (2,771) | (4) | % | |||||||||||||||||||||||||||||
General and administrative | 29,665 | 11 | % | 45,001 | 17 | % | (15,336) | (34) | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 24,510 | 9 | % | 23,550 | 9 | % | 960 | 4 | % | |||||||||||||||||||||||||||||
Total operating expenses | 248,182 | 91 | % | 268,032 | 99 | % | (19,850) | (7) | % | |||||||||||||||||||||||||||||
Income from operations | $ | 23,399 | 9 | % | $ | 3,968 | 1 | % | $ | 19,431 | * |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | $ Change | % Change | |||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
Asset-based | $ | 362,694 | 69 | % | $ | 394,689 | 72 | % | $ | (31,995) | (8) | % | ||||||||||||||||||||||||||
Subscription-based | 151,994 | 29 | % | 142,105 | 26 | % | 9,889 | 7 | % | |||||||||||||||||||||||||||||
Total recurring revenue | 514,688 | 97 | % | 536,794 | 98 | % | (22,106) | (4) | % | |||||||||||||||||||||||||||||
Professional services and other revenue | 13,553 | 3 | % | 8,774 | 2 | % | 4,779 | 54 | % | |||||||||||||||||||||||||||||
Total revenue | 528,241 | 100 | % | 545,568 | 100 | % | (17,327) | (3) | % | |||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Direct expense | 222,068 | 42 | % | 239,530 | 44 | % | (17,462) | (7) | % | |||||||||||||||||||||||||||||
Employee compensation | 152,871 | 29 | % | 157,403 | 29 | % | (4,532) | (3) | % | |||||||||||||||||||||||||||||
General and administrative | 57,792 | 11 | % | 72,361 | 13 | % | (14,569) | (20) | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 48,648 | 9 | % | 47,037 | 9 | % | 1,611 | 3 | % | |||||||||||||||||||||||||||||
Total operating expenses | 481,379 | 91 | % | 516,331 | 95 | % | (34,952) | (7) | % | |||||||||||||||||||||||||||||
Income from operations | $ | 46,862 | 9 | % | $ | 29,237 | 5 | % | $ | 17,625 | 60 | % |
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | $ Change | % Change | |||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
Subscription-based | $ | 39,450 | 97 | % | $ | 44,552 | 95 | % | $ | (5,102) | (11) | % | ||||||||||||||||||||||||||
Professional services and other revenue | 1,403 | 3 | % | 2,300 | 5 | % | (897) | (39) | % | |||||||||||||||||||||||||||||
Total revenue | 40,853 | 100 | % | 46,852 | 100 | % | (5,999) | (13) | % | |||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Direct expense | 5,478 | 13 | % | 5,760 | 12 | % | (282) | (5) | % | |||||||||||||||||||||||||||||
Employee compensation | 21,749 | 53 | % | 23,994 | 51 | % | (2,245) | (9) | % | |||||||||||||||||||||||||||||
General and administrative | 15,323 | 38 | % | 12,171 | 26 | % | 3,152 | 26 | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 9,296 | 23 | % | 8,632 | 18 | % | 664 | 8 | % | |||||||||||||||||||||||||||||
Total operating expenses | 51,846 | 127 | % | 50,557 | 108 | % | 1,289 | 3 | % | |||||||||||||||||||||||||||||
Loss from operations | $ | (10,993) | (27) | % | $ | (3,705) | (8) | % | $ | (7,288) | * |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | $ Change | % Change | |||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
Subscription-based | $ | 80,044 | 97 | % | $ | 90,749 | 96 | % | $ | (10,705) | (12) | % | ||||||||||||||||||||||||||
Professional services and other revenue | 2,856 | 3 | % | 3,898 | 4 | % | (1,042) | (27) | % | |||||||||||||||||||||||||||||
Total revenue | 82,900 | 100 | % | 94,647 | 100 | % | (11,747) | (12) | % | |||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Direct expense | 10,418 | 13 | % | 12,234 | 13 | % | (1,816) | (15) | % | |||||||||||||||||||||||||||||
Employee compensation | 43,155 | 52 | % | 54,160 | 57 | % | (11,005) | (20) | % | |||||||||||||||||||||||||||||
General and administrative | 30,001 | 36 | % | 20,782 | 22 | % | 9,219 | 44 | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 18,099 | 22 | % | 16,763 | 18 | % | 1,336 | 8 | % | |||||||||||||||||||||||||||||
Total operating expenses | 101,673 | 123 | % | 103,939 | 110 | % | (2,266) | (2) | % | |||||||||||||||||||||||||||||
Loss from operations | $ | (18,773) | (23) | % | $ | (9,292) | (10) | % | $ | (9,481) | * |
Three Months Ended June 30, | $ | % | ||||||||||||||||||||||||
2023 | 2022 | Change | Change | |||||||||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Employee compensation | $ | 19,360 | $ | 23,014 | $ | (3,654) | (16) | % | ||||||||||||||||||
General and administrative | 8,358 | 8,972 | (614) | (7) | % | |||||||||||||||||||||
Nonsegment operating expenses | $ | 27,718 | $ | 31,986 | $ | (4,268) | (13) | % |
Six Months Ended June 30, | $ | % | ||||||||||||||||||||||||
2023 | 2022 | Change | Change | |||||||||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Employee compensation | $ | 35,286 | $ | 41,053 | $ | (5,767) | (14) | % | ||||||||||||||||||
General and administrative | 19,172 | 17,336 | 1,836 | 11 | % | |||||||||||||||||||||
Nonsegment operating expenses | $ | 54,458 | $ | 58,389 | $ | (3,931) | (7) | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Total revenue | $ | 312,434 | $ | 318,852 | $ | 611,141 | $ | 640,215 | ||||||||||||||||||
Deferred revenue fair value adjustment | 17 | 54 | 69 | 108 | ||||||||||||||||||||||
Adjusted revenue | $ | 312,451 | $ | 318,906 | $ | 611,210 | $ | 640,323 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Net loss | $ | (23,132) | $ | (24,268) | $ | (65,893) | $ | (38,976) | ||||||||||||||||||
Add (deduct): | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 17 | 54 | 69 | 108 | ||||||||||||||||||||||
Interest income | (1,656) | (713) | (3,014) | (1,034) | ||||||||||||||||||||||
Interest expense | 6,531 | 4,212 | 12,851 | 9,065 | ||||||||||||||||||||||
Income tax provision (benefit) | 418 | (5,833) | 24,187 | (3,813) | ||||||||||||||||||||||
Depreciation and amortization | 33,806 | 32,182 | 66,747 | 63,800 | ||||||||||||||||||||||
Non-cash compensation expense | 21,390 | 23,504 | 40,843 | 45,318 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 6,508 | 21,026 | 10,671 | 23,372 | ||||||||||||||||||||||
Severance | 8,234 | 7,148 | 14,422 | 10,254 | ||||||||||||||||||||||
Litigation, regulatory and other governance related expenses | 2,145 | 4,306 | 5,219 | 7,383 | ||||||||||||||||||||||
Foreign currency | 74 | 413 | 107 | 305 | ||||||||||||||||||||||
Non-income tax expense adjustment | (30) | 189 | (198) | 213 | ||||||||||||||||||||||
Fair market value adjustment to investment in private company | 67 | — | 67 | — | ||||||||||||||||||||||
Dilution gain on equity method investee share issuance | (546) | (6,934) | (546) | (6,934) | ||||||||||||||||||||||
Loss allocations from equity method investments | 2,932 | 1,400 | 5,872 | 2,945 | ||||||||||||||||||||||
Loss attributable to non-controlling interest | 1,027 | 440 | 1,805 | 817 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 57,785 | $ | 57,126 | $ | 113,209 | $ | 112,823 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(in thousands, except share and per share information) | ||||||||||||||||||||||||||
Net loss | $ | (23,132) | $ | (24,268) | $ | (65,893) | $ | (38,976) | ||||||||||||||||||
Income tax provision (benefit) (1) | 418 | (5,833) | 24,187 | (3,813) | ||||||||||||||||||||||
Loss before income tax provision (benefit) | (22,714) | (30,101) | (41,706) | (42,789) | ||||||||||||||||||||||
Add (deduct): | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 17 | 54 | 69 | 108 | ||||||||||||||||||||||
Non-cash interest expense | 1,427 | 1,415 | 2,869 | 3,474 | ||||||||||||||||||||||
Cash interest - Convertible Notes | 4,543 | 2,480 | 9,108 | 4,960 | ||||||||||||||||||||||
Non-cash compensation expense | 21,390 | 23,504 | 40,843 | 45,318 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 6,508 | 21,026 | 10,671 | 23,372 | ||||||||||||||||||||||
Severance | 8,234 | 7,148 | 14,422 | 10,254 | ||||||||||||||||||||||
Amortization of acquired intangibles | 15,720 | 17,645 | 32,660 | 35,165 | ||||||||||||||||||||||
Litigation, regulatory and other governance related expenses | 2,145 | 4,306 | 5,219 | 7,383 | ||||||||||||||||||||||
Foreign currency | 74 | 413 | 107 | 305 | ||||||||||||||||||||||
Non-income tax expense adjustment | (30) | 189 | (198) | 213 | ||||||||||||||||||||||
Fair market value adjustment to investment in private company | 67 | — | 67 | — | ||||||||||||||||||||||
Dilution gain on equity method investee share issuance | (546) | (6,934) | (546) | (6,934) | ||||||||||||||||||||||
Loss allocations from equity method investments | 2,932 | 1,400 | 5,872 | 2,945 | ||||||||||||||||||||||
Loss attributable to non-controlling interest | 1,027 | 440 | 1,805 | 817 | ||||||||||||||||||||||
Adjusted net income before income tax effect | 40,794 | 42,985 | 81,262 | 84,591 | ||||||||||||||||||||||
Income tax effect (2) | (10,403) | (10,961) | (20,722) | (21,571) | ||||||||||||||||||||||
Adjusted net income | $ | 30,391 | $ | 32,024 | $ | 60,540 | $ | 63,020 | ||||||||||||||||||
Basic number of weighted-average shares outstanding | 54,439,733 | 55,203,120 | 54,289,443 | 55,054,272 | ||||||||||||||||||||||
Effect of dilutive shares: | ||||||||||||||||||||||||||
Convertible Notes | 11,253,471 | 9,898,549 | 11,361,458 | 9,898,549 | ||||||||||||||||||||||
Non-vested RSUs and PSUs | 316,758 | 199,853 | 445,323 | 381,397 | ||||||||||||||||||||||
Options to purchase common stock | 57,902 | 129,217 | 73,271 | 142,510 | ||||||||||||||||||||||
Warrants | — | 22,170 | — | 37,473 | ||||||||||||||||||||||
Diluted number of weighted-average shares outstanding | 66,067,864 | 65,452,909 | 66,169,495 | 65,514,201 | ||||||||||||||||||||||
Adjusted net income per diluted share | $ | 0.46 | $ | 0.49 | $ | 0.91 | $ | 0.96 | ||||||||||||||||||
Three Months Ended June 30, 2023 | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Nonsegment | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Revenue | $ | 271,581 | $ | 40,853 | $ | — | $ | 312,434 | ||||||||||||||||||
Deferred revenue fair value adjustment | 17 | — | — | 17 | ||||||||||||||||||||||
Adjusted revenue | $ | 271,598 | $ | 40,853 | $ | — | $ | 312,451 | ||||||||||||||||||
Income (loss) from operations | $ | 23,399 | $ | (10,993) | $ | (27,718) | $ | (15,312) | ||||||||||||||||||
Add: | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 17 | — | — | 17 | ||||||||||||||||||||||
Depreciation and amortization | 24,510 | 9,296 | — | 33,806 | ||||||||||||||||||||||
Non-cash compensation expense | 12,043 | 2,727 | 6,620 | 21,390 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 5,414 | 69 | 1,025 | 6,508 | ||||||||||||||||||||||
Severance | 1,854 | 3,119 | 3,261 | 8,234 | ||||||||||||||||||||||
Litigation, regulatory and other governance related expenses | — | 2,210 | (65) | 2,145 | ||||||||||||||||||||||
Non-income tax expense adjustment | (25) | (5) | — | (30) | ||||||||||||||||||||||
Loss attributable to non-controlling interest | 1,027 | — | — | 1,027 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 68,239 | $ | 6,423 | $ | (16,877) | $ | 57,785 |
Three months ended June 30, 2022 | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Nonsegment | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Revenue | $ | 272,000 | $ | 46,852 | $ | — | $ | 318,852 | ||||||||||||||||||
Deferred revenue fair value adjustment | 54 | — | — | 54 | ||||||||||||||||||||||
Adjusted revenue | $ | 272,054 | $ | 46,852 | $ | — | $ | 318,906 | ||||||||||||||||||
Income (loss) from operations | $ | 3,968 | $ | (3,705) | $ | (31,986) | $ | (31,723) | ||||||||||||||||||
Add: | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 54 | — | — | 54 | ||||||||||||||||||||||
Depreciation and amortization | 23,550 | 8,632 | — | 32,182 | ||||||||||||||||||||||
Non-cash compensation expense | 13,364 | 1,852 | 8,288 | 23,504 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 16,897 | 753 | 3,376 | 21,026 | ||||||||||||||||||||||
Severance | 2,813 | (431) | 4,766 | 7,148 | ||||||||||||||||||||||
Litigation, regulatory and other governance related expenses | — | 4,306 | — | 4,306 | ||||||||||||||||||||||
Non-income tax expense adjustment | 184 | 5 | — | 189 | ||||||||||||||||||||||
Loss attributable to non-controlling interest | 440 | — | — | 440 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 61,270 | $ | 11,412 | $ | (15,556) | $ | 57,126 |
Six Months Ended June 30, 2023 | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Nonsegment | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Revenue | $ | 528,241 | $ | 82,900 | $ | — | $ | 611,141 | ||||||||||||||||||
Deferred revenue fair value adjustment | 69 | — | — | 69 | ||||||||||||||||||||||
Adjusted revenue | $ | 528,310 | $ | 82,900 | $ | — | $ | 611,210 | ||||||||||||||||||
Income (loss) from operations | $ | 46,862 | $ | (18,773) | $ | (54,458) | $ | (26,369) | ||||||||||||||||||
Add (deduct): | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 69 | — | — | 69 | ||||||||||||||||||||||
Depreciation and amortization | 48,648 | 18,099 | — | 66,747 | ||||||||||||||||||||||
Non-cash compensation expense | 23,285 | 5,389 | 12,169 | 40,843 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 6,552 | 313 | 3,806 | 10,671 | ||||||||||||||||||||||
Severance | 5,430 | 5,547 | 3,445 | 14,422 | ||||||||||||||||||||||
Litigation, regulatory and other governance related expenses | — | 3,534 | 1,685 | 5,219 | ||||||||||||||||||||||
Non-income tax expense adjustment | (127) | (71) | — | (198) | ||||||||||||||||||||||
Loss attributable to non-controlling interest | 1,805 | — | — | 1,805 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 132,524 | $ | 14,038 | $ | (33,353) | $ | 113,209 |
Six months ended June 30, 2022 | ||||||||||||||||||||||||||
Envestnet Wealth Solutions | Envestnet Data & Analytics | Nonsegment | Total | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Revenue | $ | 545,568 | $ | 94,647 | $ | — | $ | 640,215 | ||||||||||||||||||
Deferred revenue fair value adjustment | 108 | — | — | 108 | ||||||||||||||||||||||
Adjusted revenue | $ | 545,676 | $ | 94,647 | $ | — | $ | 640,323 | ||||||||||||||||||
Income (loss) from operations | $ | 29,237 | $ | (9,292) | $ | (58,389) | $ | (38,444) | ||||||||||||||||||
Add: | ||||||||||||||||||||||||||
Deferred revenue fair value adjustment | 108 | — | — | 108 | ||||||||||||||||||||||
Depreciation and amortization | 47,037 | 16,763 | — | 63,800 | ||||||||||||||||||||||
Non-cash compensation expense | 24,654 | 5,387 | 15,277 | 45,318 | ||||||||||||||||||||||
Restructuring charges and transaction costs | 17,181 | 750 | 5,441 | 23,372 | ||||||||||||||||||||||
Severance | 4,223 | 1,211 | 4,820 | 10,254 | ||||||||||||||||||||||
Litigation, regulatory and other governance related expenses | — | 7,383 | — | 7,383 | ||||||||||||||||||||||
Non-income tax expense adjustment | 291 | (78) | — | 213 | ||||||||||||||||||||||
Loss attributable to non-controlling interest | 817 | — | — | 817 | ||||||||||||||||||||||
Other | — | 2 | — | 2 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 123,548 | $ | 22,126 | $ | (32,851) | $ | 112,823 |
Six Months Ended | ||||||||||||||
June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
(in thousands) | ||||||||||||||
Net cash provided by operating activities | $ | 39,268 | $ | 52,642 | ||||||||||
Net cash used in investing activities | (96,667) | (98,008) | ||||||||||||
Net cash used in financing activities | (49,388) | (43,741) | ||||||||||||
Effect of exchange rate on changes on cash | 3,633 | (2,057) | ||||||||||||
Net change in cash, cash equivalents and restricted cash | $ | (103,154) | $ | (91,164) |
Exhibit No. | Description | |||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document * | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document * | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document * | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document * | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document * | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Abbreviations or Acronyms | Definition | |||||||
2010 Plan | 2010 Long-Term Incentive Plan | |||||||
2019 Equity Plan | 2019 Acquisition Equity Incentive Plan | |||||||
2022 Form 10-K | Form 10-K for the year ended December 31, 2022 | |||||||
AETR | Annual effective tax rate. | |||||||
ASC | Accounting Standards Codification™ | |||||||
ASC 310 - Receivables | Accounting Standards Codification Topic 310, Receivables | |||||||
ASC 606 | Accounting Standards Codification Topic 606, Revenue from Contracts with Customers | |||||||
ASC 740-270 | Accounting Standards Codification Topic 740, Income Taxes—Interim Reporting | |||||||
ASU | Accounting Standards Update | |||||||
ASU 2021-08 | ASU Business Combinations (Topic 805): Accounting for Contract Assets and Contract | |||||||
Board | Board of Directors | |||||||
Convertible Notes due 2023 | $345.0 million of aggregate principal amount of convertible notes issued in May 2018 with an interest rate of 1.75% per year that mature on June 1, 2023. During November 2022, the Company repurchased $300.0 million of the $345.0 million convertible notes resulting in a remaining aggregate principal amount of $45.0 million as of December 31, 2022. | |||||||
Convertible Notes due 2025 | $517.5 million of aggregate principal amount of convertible notes issued in August 2020 with an interest rate of 0.75% per year that mature on August 15, 2025. During November 2022, the Company repurchased $200.0 million of the $517.5 million convertible notes resulting in a remaining aggregate principal amount of $317.5 million as of December 31, 2022. | |||||||
Convertible Notes due 2027 | $575.0 million aggregate principal amount of convertible notes issued in November 2022 with an interest rate of 2.625% per year that mature on December 1, 2027 | |||||||
Convertible Promissory Note | $20.0 million convertible promissory note issued in January 2023 with a customer of the Company's business, a privately held company | |||||||
ETR | Effective tax rate | |||||||
Exchange Act | Securities Exchange Act of 1934, as amended | |||||||
FASB | Financial Accounting Standards Board | |||||||
FinancialApps | FinancialApps, LLC | |||||||
FinTech | Financial Technology | |||||||
GAAP | United States Generally Accepted Accounting Principles | |||||||
IRC Section 174 | Internal Revenue Code of 1986, Section 174: Amortization of Research and Experimental Expenditures | |||||||
Notes | Collectively the Convertible Notes due 2023, Convertible Notes due 2025 and Convertible Notes due 2027 | |||||||
PSU | Performance-based restricted stock unit | |||||||
Quarterly Report | Form 10-Q for the quarter ended June 30, 2023 | |||||||
R&D | Research and Development. | |||||||
Redi2 | Redi2 Technologies Inc. | |||||||
Redi2 acquisition | Stock purchase agreement between Envestnet and Redi2 Technologies, dated as of June 24, 2022 | |||||||
Revolving Credit Facility | Revolving credit facility of $500.0 million pursuant to the Third Amended and Restated Credit Agreement | |||||||
RIAs | Registered investment advisors | |||||||
RSU | Restricted stock unit | |||||||
SEC | Securities and Exchange Commission | |||||||
SOFR | Secured Overnight Financing Rate | |||||||
TCS | Tata Consultancy Services | |||||||
U.S. | United States | |||||||
Yodlee | Yodlee, Inc. |
ENVESTNET, INC. | ||||||||
By: | /s/ William C. Crager | |||||||
William C. Crager | ||||||||
Chief Executive Officer | ||||||||
Principal Executive Officer | ||||||||
By: | /s/ Peter H. D’Arrigo | |||||||
Peter H. D’Arrigo | ||||||||
Chief Financial Officer | ||||||||
Principal Financial Officer | ||||||||
By: | /s/ Matthew J. Majoros | |||||||
Matthew J. Majoros | ||||||||
Senior Vice President, Financial Reporting | ||||||||
Principal Accounting Officer |
Date: August 4, 2023 | /s/ William C. Crager | ||||
William C. Crager | |||||
Chief Executive Officer | |||||
(Principal Executive Officer) |
Date: August 4, 2023 | /s/ Peter H. D’Arrigo | ||||
Peter H. D’Arrigo | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) |
/s/ William C. Crager | ||
By: William C. Crager | ||
Chief Executive Officer | ||
(Principal Executive Officer) | ||
Dated: August 4, 2023 |
/s/ Peter H. D’Arrigo | ||
By: Peter H. D’Arrigo | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
Dated: August 4, 2023 |
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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
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, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (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) | 70,752,773 | 70,025,733 |
Common stock, shares outstanding (in shares) | 54,511,283 | 54,013,826 |
Treasury stock (in shares) | 16,241,490 | 16,011,907 |
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Revenue: | ||||
Total revenue | $ 312,434 | $ 318,852 | $ 611,141 | $ 640,215 |
Operating expenses: | ||||
Direct expense | 123,497 | 126,482 | 232,486 | 251,764 |
Employee compensation | 117,097 | 125,767 | 231,312 | 252,616 |
General and administrative | 53,346 | 66,144 | 106,965 | 110,479 |
Depreciation and amortization | 33,806 | 32,182 | 66,747 | 63,800 |
Total operating expenses | 327,746 | 350,575 | 637,510 | 678,659 |
Loss from operations | (15,312) | (31,723) | (26,369) | (38,444) |
Other (expense) income, net | (7,402) | 1,622 | (15,337) | (4,345) |
Loss before income tax provision (benefit) | (22,714) | (30,101) | (41,706) | (42,789) |
Income tax provision (benefit) | 418 | (5,833) | 24,187 | (3,813) |
Net loss | (23,132) | (24,268) | (65,893) | (38,976) |
Add: Net loss attributable to non-controlling interest | 1,716 | 983 | 3,249 | 1,832 |
Net loss attributable to Envestnet, Inc. | $ (21,416) | $ (23,285) | $ (62,644) | $ (37,144) |
Net loss attributable to Envestnet, Inc. per share: | ||||
Basic (in dollars per share) | $ (0.39) | $ (0.42) | $ (1.15) | $ (0.67) |
Diluted (in dollars per share) | $ (0.39) | $ (0.42) | $ (1.15) | $ (0.67) |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 54,439,733 | 55,203,120 | 54,289,443 | 55,054,272 |
Diluted (in shares) | 54,439,733 | 55,203,120 | 54,289,443 | 55,054,272 |
Total recurring revenue | ||||
Revenue: | ||||
Total revenue | $ 300,721 | $ 310,092 | $ 594,732 | $ 627,543 |
Asset-based | ||||
Revenue: | ||||
Total revenue | 185,762 | 191,972 | 362,694 | 394,689 |
Operating expenses: | ||||
Direct expense | 108,532 | 112,301 | 211,155 | 229,729 |
Subscription-based | ||||
Revenue: | ||||
Total revenue | 114,959 | 118,120 | 232,038 | 232,854 |
Operating expenses: | ||||
Direct expense | 6,933 | 7,241 | 13,295 | 15,052 |
Professional services and other revenue | ||||
Revenue: | ||||
Total revenue | 11,713 | 8,760 | 16,409 | 12,672 |
Operating expenses: | ||||
Direct expense | $ 8,032 | $ 6,940 | $ 8,036 | $ 6,983 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss attributable to Envestnet, Inc. | $ (21,416) | $ (23,285) | $ (62,644) | $ (37,144) |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (96) | (3,093) | 4,181 | (4,571) |
Total other comprehensive income (loss), net of tax | (96) | (3,093) | 4,181 | (4,571) |
Comprehensive loss attributable to Envestnet, Inc. | $ (21,512) | $ (26,378) | $ (58,463) | $ (41,715) |
Organization and Description of Business |
6 Months Ended |
---|---|
Jun. 30, 2023 | |
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 insight are delivered. Its mission is to empower financial advisors and service providers with innovative technology, solutions and intelligence. Envestnet has been a leader in helping transform wealth management, working towards its goal of expanding a holistic financial wellness ecosystem so that our clients can deliver an intelligent financial life to their clients. Envestnet is organized around two primary, complementary business segments. Financial information about each business segment is contained in “Note 18—Segment Information” to the condensed consolidated financial statements and is described in detail within the Company's Annual Report on Form 10-K. For a summary of commonly used industry terms and abbreviations used in this quarterly report on Form 10-Q, see the Glossary of Terms.
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Summary of Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022 have not been audited by an independent registered public accounting firm. These unaudited condensed consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the year ended December 31, 2022 and reflect all normal recurring adjustments which are, in the opinion of management, necessary to present fairly the Company’s financial position as of June 30, 2023 and results of operations, equity, comprehensive income (loss) and cash flows for the periods presented herein. The unaudited condensed consolidated financial statements include the accounts of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. Accounts for the Envestnet Wealth Solutions segment that are denominated in a non-U.S. currency have been re-measured using the U.S. dollar as the functional currency. Certain accounts within the Envestnet Data & Analytics segment are recorded and measured in foreign currencies. The assets and liabilities for those subsidiaries with a functional currency other than the U.S. dollar are translated at exchange rates in effect at the balance sheet date, and revenue and expenses are translated at average exchange rates. Differences arising from these foreign currency translations are recorded in the unaudited condensed consolidated balance sheets as accumulated other comprehensive income (loss) within stockholders' equity. The 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 condensed consolidated statements of operations. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results of operations to be expected for other interim periods or for the full fiscal year. The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. References to GAAP in these notes are to the FASB ASC and ASUs. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from these estimates under different assumptions or conditions. Reclassifications Certain amounts in the condensed consolidated balance sheets as of December 31, 2022 and the condensed consolidated statements of cash flows for the six months ended June 30, 2022 have been reclassified to conform to the current period presentation. These reclassifications did not change the previously reported total assets, total liabilities and equity, or net change in cash and cash equivalents and did not affect the condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss or condensed consolidated statements of stockholders' equity. Cash, Cash Equivalents and Restricted Cash The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported in the condensed consolidated statements of cash flows:
Related Party Transactions The Company has an approximate 3.8% membership interest in a private services company that it accounts for using the equity method of accounting and is considered to be a related party. Revenue from the private services company totaled $3.3 million and $4.3 million in the three months ended June 30, 2023 and 2022, respectively. Revenue from the private services company totaled $6.9 million and $9.0 million in the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023 and December 31, 2022, the Company recorded a net receivable from the private services company of $1.9 million and $2.0 million, respectively. Recent Accounting Pronouncements Not Yet Adopted In March 2023, the FASB issued ASU 2023-01, “Leases (Topic 842): Common Control Arrangements.” This update amends ASC 842 and the accounting for leasehold improvements associated with common control leases. This standard is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption of the standard is permitted. The Company is analyzing the impact of the adoption, but does not expect it to have a material impact on the consolidated financial statements.
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Acquisitions |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Acquisition of Redi2 Technologies On July 1, 2022, the Company completed the acquisition of all of the issued and outstanding shares of Redi2 Technologies ("Redi2"). Redi2 provides revenue management and hosted fee-billing solutions. Its platform enables fee calculation, invoice creation, payouts and accounting, and billing compliance. Redi2 has been integrated into the Envestnet Wealth Solutions segment. In connection with the Redi2 acquisition, the Company paid estimated consideration as follows:
The Company funded the Redi2 acquisition with available cash resources. In addition, certain executives may earn up to $20.0 million in performance bonuses based upon the achievement of certain target financial and non-financial metrics. These performance bonuses will be recognized as compensation and benefits expense in the condensed consolidated statements of operations. The Company recognized $1.1 million and $1.5 million related to these performance bonuses during the three and six months ended June 30, 2023, respectively. The following table summarizes the estimated fair values of the assets acquired at the date of acquisition:
The goodwill arising from the acquisition represents the expected benefits of the transaction, primarily related to the enhancement of the Company's existing technologies and increase in future revenue as a result of potential cross selling opportunities. Estimated goodwill of $40.7 million is deductible for income tax purposes. A summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows:
During the six months ended June 30, 2023 the Company completed the acquisition accounting related to the Redi2 acquisition, finalizing the valuation of tangible assets acquired, liabilities assumed, identifiable intangible assets and goodwill balances. No measurement period adjustments were made during the six months ended June 30, 2023. The results of Redi2 were included in the condensed consolidated statements of operations beginning July 1, 2022 and are not considered material to the Company’s results of operations. For the three and six months ended June 30, 2023, the Company’s acquisition related costs were not material, and are included in general and administrative expenses. The Company may incur additional acquisition related costs over the remainder of 2023.
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Prepaid Expenses and Other Current Assets |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following:
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Internally Developed Software, Net |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Internally Developed Software, Net | Internally Developed Software, Net Internally developed software, net consisted of the following:
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Geographical Information |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
See “Note 14—Revenue and Direct Expense” for detail of revenue by geographic area.
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Intangible Assets, Net |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets, Net | Intangible Assets, Net Intangible assets, net consisted of the following:
On April 1, 2022, the Company entered into a purchase agreement with a privately held company to acquire technology solutions being developed by this privately held company for a purchase price of $9.0 million, including an advance of $4.0 million. The purchase agreement was amended in January 2023 to include additional functionality and features for additional consideration of $5.0 million. The Company closed the transaction and paid the remaining $10.0 million during the three months ended March 31, 2023. This proprietary technology asset has been integrated into the Envestnet Data & Analytics segment and is being amortized over an estimated useful life of five years. On May 19, 2023, the Company entered into a purchase agreement with this same privately held company to acquire technology solutions being developed by this privately held company for a purchase price of $7.0 million, including an advance of $2.0 million. In addition, the prior purchase agreements that were entered into with this privately held company in June 2021 and April 2022 were amended in May 2023 to remove the earn-out payment provisions. During the six months ended June 30, 2023, the Company retired fully amortized proprietary technologies with a historical cost of $17.5 million. Future amortization expense of the Company's intangible assets as of June 30, 2023, is expected to be as follows (in thousands):
|
Depreciation and Amortization Expense |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and Amortization Expense | Depreciation and Amortization Expense Depreciation and amortization expense consisted of the following:
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Goodwill |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Goodwill Changes in the carrying amount of goodwill by reportable segment were as follows:
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Other Assets |
6 Months Ended |
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Jun. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets On January 31, 2023, the Company entered into a Convertible Promissory Note with a customer of the Company's business, a privately held company, whereby the Company was issued a convertible promissory note with a principal amount of $20.0 million and a stated interest rate of 8.0% per annum. The Convertible Promissory Note has a maturity date of January 31, 2026 and is convertible into common stock or preferred stock of the privately held company upon qualified financing events or corporate transactions. In connection with the Convertible Promissory Note, the Company concurrently entered into a call option agreement with the privately held company, which provides the Company an option to acquire the privately held company at a predetermined price as of the earlier of July 2024 or upon satisfaction of certain financial metrics. Subsequent to June 30, 2023, the financial metrics were met, however, the Company did not exercise the call option. The Company accounts for this loan receivable in accordance with ASC 310 - Receivables as it is not a security and includes it in other assets in the condensed consolidated balance sheets. Credit impairment is measured as the difference between this loan receivable’s amortized cost and its estimated recoverable value, which is the present value of its expected future cash flows discounted at the effective interest rate. There was no impairment for this investment during the six months ended June 30, 2023.
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Accounts Payable, Accrued Expenses and Other Current Liabilities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable, Accrued Expenses and Other Current Liabilities | Accounts Payable, Accrued Expenses and Other Current Liabilities Accounts payable, accrued expenses and other liabilities consisted of the following:
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Debt |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The following tables set forth the carrying value and estimated fair value of the Company's debt obligations as of June 30, 2023 and December 31, 2022:
Revolving Credit Facility The Revolving Credit Facility 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 total leverage ratio and a minimum interest coverage ratio. The Company was in compliance with these financial covenants as of June 30, 2023. As of June 30, 2023, the Company had $20.0 million of borrowings under the Revolving Credit Facility at an effective interest rate of 7.5%, with a remaining available balance on the Revolving Credit Facility of $480.0 million. On July 19, 2023, the $20.0 million outstanding balance under the Revolving Credit Facility was repaid and the remaining available balance on the Revolving Credit Facility was $500.0 million. As of June 30, 2023 and December 31, 2022, debt issuance costs related to the Revolving Credit Facility included in prepaid expense and other current assets in the condensed consolidated balance sheets was $0.7 million and $0.7 million, respectively and included in other assets in the condensed consolidated balance sheets was $1.8 million and $2.2 million, respectively. Convertible Notes due 2023 The Convertible Notes due 2023 matured on June 1, 2023. Upon maturity, the Company settled the remaining aggregate principal amount on the Convertible Notes due 2023 for $45.0 million. The Convertible Notes due 2023 were paid using a combination of cash on hand and borrowings under the Company's Revolving Credit Facility. No shares of the Company's common stock were issued upon settlement of the Convertible Notes due 2023. Interest Expense Interest expense was comprised of the following and is included in other expense, net in the condensed consolidated statements of operations:
The effective interest rate of the Notes was equal to the stated interest rate plus the amortization of the debt issuance costs and is set forth below:
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Fair Value Measurements |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022, based on the three-tier fair value hierarchy, as described in detail within the Company's Annual Report on Form 10-K:
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 caused the transfer, in accordance with the Company’s accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. There were no transfers between Levels I, II and III during the six months ended June 30, 2023 and 2022. Fair Value of Assets Used to Fund the Deferred Compensation Liability The table below presents a reconciliation of the assets used to fund the Company's deferred compensation liability, which is measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2022 to June 30, 2023:
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 assets in the condensed consolidated balance sheets, increased due to net gains on the underlying investment vehicles. These gains are recognized in the Company's earnings and included in in the condensed consolidated statements of operations. Fair Value of Debt Agreements The Company considered its Convertible Notes to be Level II liabilities as of June 30, 2023 and December 31, 2022, and used a market approach to calculate their respective fair values. The estimated fair value for each convertible note was determined based on estimated or actual bids and offers in an over-the-counter market on June 30, 2023 and December 31, 2022, respectively (See “Note 12—Debt”). Fair Value of Other Financial Assets and Liabilities The Company considered the recorded value of its other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable and accounts payable, to approximate the fair value of the respective assets and liabilities as of June 30, 2023 and December 31, 2022, based upon the short-term nature of these assets and liabilities.
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Revenue and Direct Expense |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue and Direct Expense | Revenue and Direct Expense Disaggregation of Revenue The following table presents the Company’s revenue by segment disaggregated by major source:
The following table presents the Company’s revenue disaggregated by geography, based on the billing address of the customer:
Remaining Performance Obligations As of June 30, 2023, the Company's estimated revenue expected to be recognized in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied is approximately $531.0 million. We expect to recognize approximately 24% of this revenue during the remainder of 2023, approximately 55% throughout 2024 and 2025, with the balance recognized thereafter. These remaining performance obligations are not indicative of revenue for future periods. Contract Balances Total deferred revenue as of June 30, 2023 decreased by $0.9 million from December 31, 2022, primarily the result of timing of cash receipts and revenue recognition. The majority of the Company's deferred revenue will be recognized over the course of the next twelve months. The amount of revenue recognized for the three months ended June 30, 2023 and 2022 that was included in the opening deferred revenue balance was $11.5 million and $10.2 million, respectively. The amount of revenue recognized for the six months ended June 30, 2023 and 2022,that was included in the opening deferred revenue balance was $28.2 million and $26.1 million, 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 $10.9 million and $11.0 million as of June 30, 2023 and December 31, 2022, respectively. Amortization expense for the deferred sales incentive compensation was $1.2 million and $1.1 million for the three months ended June 30, 2023 and 2022, respectively. Amortization expense for the deferred sales incentive compensation was $2.3 million and $2.2 million for the six months ended June 30, 2023 and 2022, respectively. Deferred sales incentive compensation is included in other assets in the condensed consolidated balance sheets and amortization expense is included in employee compensation expense in the condensed consolidated statements of operations. No significant impairment loss for capitalized costs was recorded during the six months ended June 30, 2023 and 2022. Direct Expense The following table summarizes direct expense by revenue category:
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Stock-Based Compensation |
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Stock-Based Compensation | Stock-Based Compensation The Company has stock options, RSUs and PSUs outstanding under the 2010 Plan and the 2019 Equity Plan. As of June 30, 2023, the maximum number of common shares available for future issuance under the Company's plans is 1,626,985. Stock-based compensation expense under the Company’s plans was as follows:
The tax effect on stock-based compensation expense above was calculated using a blended statutory rate of 25.5% for each of the three and six months ended June 30, 2023 and 2022. Stock Options The following table summarizes option activity under the Company’s plans:
As of June 30, 2023, there was an immaterial amount of unrecognized stock-based compensation expense related to stock options, which the Company expects to recognize over a weighted-average period of 0.1 years. Restricted Stock Units and Performance Stock Units The following table summarizes RSU and PSU activity under the Company’s plans:
As of June 30, 2023, there was $108.6 million of unrecognized stock-based compensation expense related to RSUs, which the Company expects to recognize over a weighted-average period of 2.0 years. As of June 30, 2023, there was $6.2 million of unrecognized stock-based compensation expense related to PSUs, which the Company expects to recognize over a weighted-average period of 1.2 years.
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Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The following table includes the Company’s loss before income tax provision (benefit), income tax provision (benefit) and effective tax rate:
Under ASC 740-270-25, the Company is required to report income tax expense by applying a projected AETR to ordinary pre-tax book income for the interim period. The tax impact of discrete items is accounted for separately in the period in which they occur. The ETR for the quarter is the result of the projected AETR applied to actual pre-tax book income plus discrete items as a percentage of pre-tax book income. Therefore, a change in pre-tax book income, either forecasted or actual year-to-date, from one period to the next will cause the ETR to change. For the three and six months ended June 30, 2023, the Company’s effective tax rate differed from the statutory rate primarily due to the increase in the valuation allowance the Company has placed on a portion of its U.S. deferred tax assets which includes the impact of IRC Section 174, permanent book-tax differences, uncertain tax positions and the impact of state and local taxes offset by federal and state R&D credits. For the three and six months ended June 30, 2022, the Company's effective tax rate differed from the statutory rate primarily due to the increase in the valuation allowance the Company has placed on a portion of its U.S. deferred tax assets which includes the impact of IRC Section 174, permanent book-tax differences, the impact of state and local taxes offset by federal and state R&D credits and the partial reserve release of an uncertain tax position due to the expiration of a statute of limitations. Inflation Reduction Act of 2022 On August 16, 2022, the U.S. enacted the IRA, which, among other things, implements a 15% minimum tax on book income of certain large corporations and a 1% excise tax on net stock repurchases. The provisions of the IRA became effective beginning in 2023. The Company does not anticipate a material impact on the consolidated financial statements.
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Net Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss Per Share Securities that were anti-dilutive and therefore excluded from the computation of diluted net loss per share were as follows:
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Segment Information |
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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 to enable them to deliver an intelligent financial life to their clients. •Envestnet Data & Analytics – a leading data aggregation, intelligence, and experiences platform that powers data connectivity and business intelligence across digital financial services to enable them to deliver an intelligent financial life to their clients. The information in the following tables is derived from the Company’s internal financial reporting used for corporate management purposes. Nonsegment operating expenses may include salary and benefits for certain corporate officers, certain types of professional service expenses and insurance, acquisition related transaction costs, certain restructuring charges and other non-recurring and/or non-operationally related expenses. Intersegment revenue was not material for the three and six months ended June 30, 2023 and 2022. See “Note 14—Revenue and Direct Expense” for detail of revenue by segment. The following table presents a reconciliation from income (loss) from operations by segment to consolidated net loss attributable to Envestnet, Inc.:
The following table presents a summary of consolidated total assets by segment:
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2023 | |
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 associated with these arrangements in the condensed consolidated balance sheets. The Company enters into unconditional purchase obligations arrangements for certain of its services that it receives in the normal course of business. Legal Proceedings The Company and its subsidiary, Yodlee, have been named as defendants in a lawsuit filed on July 17, 2019, by 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' 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' 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. Fact discovery closed on April 23, 2021, other than a few outstanding matters, and expert discovery concluded on September 30, 2022. The parties’ respective summary judgment and motions to exclude the presentation of expert testimony (a “Daubert Motion”) are fully briefed and are awaiting final ruling. On July 25, 2023, the Magistrate Judge issued a report and recommendation that the Court grant FinancialApps’ summary judgment motion on Envestnet’s defamation counterclaim. The Magistrate Judge did not make a ruling as to Yodlee’s defamation counterclaim. On July 28, 2023, the Magistrate Judge denied Envestnet and Yodlee's Daubert motion to exclude FinancialApps' technical expert, Isaac Pflaum. On July 31, 2023, the Magistrate Judge issued a report and recommendation that the Court grant in part and deny in part Envestnet's summary judgment motion. The Magistrate Judge recommended that the motion be denied as to FinancialApps' vicarious liability theory and direct liability theory but recommended that the motion be granted with respect to the unjust enrichment count. The reports and recommendations are not final rulings, however, and the Company is permitted and intends to object to their adoption. The Company believes FinancialApps' allegations are without merit and will continue to defend the claims against it 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. On March 15, 2021, Plaintiffs filed a second amended class action complaint re-alleging, among others, the claims the district court had dismissed. The second amended complaint did not allege any claims against the Company or Yodlee that were not previously alleged in first amended complaint. On May 5, 2021, the Company filed a motion to dismiss all claims asserted against it in the second amended complaint, and Yodlee filed a motion to dismiss most claims asserted against it in the second amended complaint. On July 19, 2021, the Court granted in part Yodlee’s motion, resulting in the dismissal of all federal law claims and two of the state-law claims. On August 5, 2021, the Court granted the Company's motion to dismiss, and dismissed the Company from the lawsuit. On October 8, 2021, Yodlee filed an early motion for summary judgment. On August 12, 2022, Plaintiffs moved for leave to file a third amended complaint, which Yodlee opposed. On September 29, 2022, the Court denied Plaintiffs’ motion to amend the complaint. On December 13, 2022, the Court granted in part and denied in part Yodlee’s early motion for summary judgment, narrowing the scope of issues that remain to be resolved. On January 30, 2023, the Court granted Yodlee’s motion for reconsideration and dismissed one additional claim. On July 20, 2023, the Court granted Yodlee’s motion for judgment on the pleadings and dismissed equitable monetary claims, allowing Plaintiffs leave to seek to amend by August 7, 2023. Yodlee will continue to vigorously defend the remaining claims against it.In addition, the Company is involved in legal proceedings arising in the ordinary course of its business. Legal fees and other costs associated with such actions are expensed as incurred. The Company will record a provision for these claims when it is both probable that a liability has been incurred and the amount of the loss, or a range of the potential loss, can be reasonably estimated. These provisions are reviewed regularly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information or events pertaining to a particular case. For litigation matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but if the matter is material, it is subject to disclosures. The Company believes that liabilities associated with any claims, while possible, are not probable, and therefore has not recorded any accrual for any claims as of June 30, 2023. 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.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2023 |
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Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (21,416) | $ (23,285) | $ (62,644) | $ (37,144) |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022 have not been audited by an independent registered public accounting firm. These unaudited condensed consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the year ended December 31, 2022 and reflect all normal recurring adjustments which are, in the opinion of management, necessary to present fairly the Company’s financial position as of June 30, 2023 and results of operations, equity, comprehensive income (loss) and cash flows for the periods presented herein. The unaudited condensed consolidated financial statements include the accounts of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. Accounts for the Envestnet Wealth Solutions segment that are denominated in a non-U.S. currency have been re-measured using the U.S. dollar as the functional currency. Certain accounts within the Envestnet Data & Analytics segment are recorded and measured in foreign currencies. The assets and liabilities for those subsidiaries with a functional currency other than the U.S. dollar are translated at exchange rates in effect at the balance sheet date, and revenue and expenses are translated at average exchange rates. Differences arising from these foreign currency translations are recorded in the unaudited condensed consolidated balance sheets as accumulated other comprehensive income (loss) within stockholders' equity. The 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 condensed consolidated statements of operations. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results of operations to be expected for other interim periods or for the full fiscal year. The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. References to GAAP in these notes are to the FASB ASC and ASUs. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023.
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Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from these estimates under different assumptions or conditions. |
Reclassifications | ReclassificationsCertain amounts in the condensed consolidated balance sheets as of December 31, 2022 and the condensed consolidated statements of cash flows for the six months ended June 30, 2022 have been reclassified to conform to the current period presentation. These reclassifications did not change the previously reported total assets, total liabilities and equity, or net change in cash and cash equivalents and did not affect the condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss or condensed consolidated statements of stockholders' equity. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In March 2023, the FASB issued ASU 2023-01, “Leases (Topic 842): Common Control Arrangements.” This update amends ASC 842 and the accounting for leasehold improvements associated with common control leases. This standard is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption of the standard is permitted. The Company is analyzing the impact of the adoption, but does not expect it to have a material impact on the consolidated financial statements.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported in the condensed consolidated statements of cash flows:
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Restrictions on Cash and Cash Equivalents | The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported in the condensed consolidated statements of cash flows:
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Acquisitions (Tables) |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | In connection with the Redi2 acquisition, the Company paid estimated consideration as follows:
The following table summarizes the estimated fair values of the assets acquired at the date of acquisition:
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Schedule of Intangible Assets Acquired, Estimated Useful Lives and Amortization Method | A summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows:
|
Prepaid Expenses and Other Current Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following:
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Internally Developed Software, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Internally Developed Software, Net | Internally developed software, net consisted of the following:
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Geographical Information (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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Intangible Assets, Net (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets, Net | Intangible assets, net consisted of the following:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future amortization expense of the Company's intangible assets as of June 30, 2023, is expected to be as follows (in thousands):
|
Depreciation and Amortization Expense (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Depreciation and Amortization Expense | Depreciation and amortization expense consisted of the following:
|
Goodwill (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill by Segment | Changes in the carrying amount of goodwill by reportable segment were as follows:
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Accounts Payable, Accrued Expenses and Other Current Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable, Accrued Expenses and Other Current Liabilities | Accounts payable, accrued expenses and other liabilities consisted of the following:
|
Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt Obligation | The following tables set forth the carrying value and estimated fair value of the Company's debt obligations as of June 30, 2023 and December 31, 2022:
The effective interest rate of the Notes was equal to the stated interest rate plus the amortization of the debt issuance costs and is set forth below:
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Schedule of Interest Expense | Interest expense was comprised of the following and is included in other expense, net in the condensed consolidated statements of operations:
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Assets and Liabilities Measured at Fair Value | The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022, based on the three-tier fair value hierarchy, as described in detail within the Company's Annual Report on Form 10-K:
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Schedule of Reconciliation of Assets | The table below presents a reconciliation of the assets used to fund the Company's deferred compensation liability, which is measured at fair value on a recurring basis using significant unobservable inputs (Level III) for the period from December 31, 2022 to June 30, 2023:
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Revenue and Direct Expense (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue by Major Source | The following table presents the Company’s revenue by segment disaggregated by major source:
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Schedule of Disaggregation of Revenue by Geography | The following table presents the Company’s revenue disaggregated by geography, based on the billing address of the customer:
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Schedule of Direct Expense by Revenue Category | The following table summarizes direct expense by revenue category:
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Stock-Based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense under the Company’s plans was as follows:
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Schedule of Option Activity under the Company's Plans | The following table summarizes option activity under the Company’s plans:
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Summary of RSU and PSU Activity | The following table summarizes RSU and PSU activity under the Company’s plans:
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Income Taxes (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loss before Income Tax Provision (Benefit) | The following table includes the Company’s loss before income tax provision (benefit), income tax provision (benefit) and effective tax rate:
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Net Loss Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 loss per share were as follows:
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 loss attributable to Envestnet, Inc.:
|
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Schedule of Consolidated Total Assets | The following table presents a summary of consolidated total assets by segment:
|
Organization and Description of Business (Details) |
6 Months Ended |
---|---|
Jun. 30, 2023
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 2 |
Summary of Significant Accounting Policies - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 59,019 | $ 162,173 | $ 338,115 | |
Restricted cash included in prepaid expenses and other current assets | 0 | 149 | ||
Total cash, cash equivalents and restricted cash | $ 59,019 | $ 162,173 | $ 338,264 | $ 429,428 |
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
Disaggregation of Revenue [Line Items] | |||||
Loss allocations from equity method investments | $ (5,872) | $ (2,945) | |||
Private Services Company | |||||
Disaggregation of Revenue [Line Items] | |||||
Ownership percentage | 3.80% | 3.80% | |||
Loss allocations from equity method investments | $ 3,300 | $ 4,300 | $ 6,900 | $ 9,000 | |
Due from related parties | $ 1,900 | $ 1,900 | $ 2,000 |
Acquisitions - Acquisition of Redi2 Technologies - Cash Consideration (Details) - Redi Technologies acquisition - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jul. 01, 2022 |
Jun. 30, 2023 |
Jun. 30, 2023 |
|
Business Acquisition [Line Items] | |||
Cash consideration, net | $ 69,406 | ||
Estimated working capital adjustment | (533) | ||
Total | $ 68,873 | ||
Total net assets acquired, measurement period adjustments | $ 932 | ||
Preliminary Estimate | |||
Business Acquisition [Line Items] | |||
Cash consideration, net | $ 69,406 | ||
Estimated working capital adjustment | (1,465) | ||
Total | $ 67,941 | ||
Measurement Period Adjustments | |||
Business Acquisition [Line Items] | |||
Cash consideration, net | 0 | ||
Estimated working capital adjustment | 932 | ||
Total | $ 932 |
Acquisitions - Acquisition of Redi2 Technologies - Narrative (Details) - Redi Technologies acquisition - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2023 |
Jul. 01, 2022 |
|
Business Acquisition [Line Items] | |||
Payments for performance bonuses | $ 1.1 | $ 1.5 | |
Goodwill, expected tax deductible amount | $ 40.7 | ||
Certain Executives | |||
Business Acquisition [Line Items] | |||
Additional contingent consideration | $ 20.0 |
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid technology | $ 15,387 | $ 16,649 |
Prepaid insurance | 5,473 | 2,881 |
Non-income tax receivable | 5,383 | 5,488 |
Other | 15,663 | 16,345 |
Total prepaid expenses and other current assets | $ 41,906 | $ 41,363 |
Internally Developed Software, Net (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Internally developed software, net | $ 207,235 | $ 184,558 |
Internally developed software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Internally developed software | $ 359,365 | 313,200 |
Less: accumulated amortization | (152,130) | (128,642) |
Internally developed software, net | $ 207,235 | $ 184,558 |
Geographical Information (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 273,903 | $ 247,001 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | 271,230 | 245,817 |
India | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | 2,665 | 1,093 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 8 | $ 91 |
Intangible Assets, Net - Intangible Assets, Net (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 728,837 | $ 733,004 |
Accumulated Amortization | (367,502) | (353,009) |
Net Carrying Amount | 361,335 | 379,995 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 604,080 | 604,080 |
Accumulated Amortization | (306,457) | (285,288) |
Net Carrying Amount | 297,623 | 318,792 |
Proprietary technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 109,057 | 113,224 |
Accumulated Amortization | (51,549) | (59,401) |
Net Carrying Amount | 57,508 | 53,823 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 15,700 | 15,700 |
Accumulated Amortization | (9,496) | (8,320) |
Net Carrying Amount | $ 6,204 | $ 7,380 |
Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|---|
May 19, 2023 |
Apr. 01, 2022 |
Jan. 31, 2023 |
Mar. 31, 2023 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Finite-Lived Intangible Assets [Line Items] | ||||||
Payments to acquire intangible assets | $ 12,000 | $ 19,000 | ||||
Proprietary technologies | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Consideration transferred | $ 7,000 | $ 9,000 | $ 5,000 | |||
Payments to acquire intangible assets | $ 2,000 | $ 4,000 | ||||
Payment to acquire assets | $ 10,000 | |||||
Estimated useful life | 5 years | |||||
Cost of fully amortized and retired assets | $ 17,500 |
Intangible Assets, Net - Future Amortization Expense (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Future amortization expense of the intangible assets | ||
Remainder of 2023 | $ 30,136 | |
2024 | 55,968 | |
2025 | 52,573 | |
2026 | 45,048 | |
2027 | 36,283 | |
Thereafter | 141,327 | |
Net Carrying Amount | $ 361,335 | $ 379,995 |
Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Property, Plant and Equipment [Abstract] | ||||
Intangible asset amortization | $ 15,720 | $ 17,645 | $ 32,660 | $ 35,165 |
Internally developed software amortization | 12,398 | 9,087 | 23,488 | 17,581 |
Property and equipment depreciation | 5,688 | 5,450 | 10,599 | 11,054 |
Total depreciation and amortization | $ 33,806 | $ 32,182 | $ 66,747 | $ 63,800 |
Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2023
USD ($)
| |
Changes in the carrying amount of the Company's goodwill | |
Balance as of period start | $ 998,414 |
Foreign currency translation | 22 |
Balance as of period end | 998,436 |
Envestnet Wealth Solutions | |
Changes in the carrying amount of the Company's goodwill | |
Balance as of period start | 679,739 |
Foreign currency translation | 0 |
Balance as of period end | 679,739 |
Envestnet Data & Analytics | |
Changes in the carrying amount of the Company's goodwill | |
Balance as of period start | 318,675 |
Foreign currency translation | 22 |
Balance as of period end | $ 318,697 |
Other Assets (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jan. 31, 2023 |
|
Other Asset [Line Items] | ||
Impairment of investments | $ 0 | |
Notes Receivable | ||
Other Asset [Line Items] | ||
Receivable with imputed interest, face amount | $ 20,000 | |
Interest rate | 8.00% |
Accounts Payable, Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued investment manager fees | $ 105,913 | $ 99,851 |
Accrued compensation and related taxes | 57,771 | 77,939 |
Accounts payable | 27,853 | 11,271 |
Accrued professional services | 17,622 | 10,762 |
Income tax payable | 13,102 | 260 |
Accrued technology | 8,331 | 6,393 |
Accrued treasury stock purchases | 0 | 9,289 |
Other accrued expenses | 9,244 | 18,101 |
Total accounts payable, accrued expenses and other current liabilities | $ 239,836 | $ 233,866 |
Accrued Expenses and Other Liabilities - Narrative (Details) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2023
USD ($)
|
|
Payables and Accruals [Abstract] | ||
Severance costs | $ 8.2 | $ 14.4 |
Accrued severance | $ 9.4 | $ 9.4 |
Debt - Credit Agreement (Details) - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jul. 19, 2023 |
Jun. 30, 2023 |
Jun. 01, 2023 |
Dec. 31, 2022 |
|
Convertible Notes Payable | ||||
Debt Instrument [Line Items] | ||||
Issuance Amount | $ 912,500 | $ 937,500 | ||
Revolving Credit Facility | Prepaid Expenses and Other Current Assets | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | 700 | 700 | ||
Revolving Credit Facility | Other Noncurrent Assets | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | 1,800 | 2,200 | ||
Revolving Credit Facility | Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Issuance Amount | $ 20,000 | 0 | ||
Effective interest rate | 7.50% | |||
Current borrowing capacity | $ 480,000 | |||
Revolving Credit Facility | Revolving Credit Facility | Line of Credit | Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Current borrowing capacity | $ 500,000 | |||
Debt settlement | $ 20,000 | |||
Convertible Notes Due 2023 | Convertible Notes Payable | ||||
Debt Instrument [Line Items] | ||||
Issuance Amount | $ 45,000 | $ 45,000 |
Debt - Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Debt Disclosure [Abstract] | ||||
Convertible Notes interest | $ 4,543 | $ 2,480 | $ 9,108 | $ 4,960 |
Amortization of debt discount and issuance costs | 1,427 | 1,415 | 2,869 | 3,474 |
Undrawn and other fees | 311 | 317 | 624 | 631 |
Revolving Credit Facility interest | 250 | 0 | 250 | 0 |
Total interest expense | $ 6,531 | $ 4,212 | $ 12,851 | $ 9,065 |
Debt - Effective Interest Rate of Notes (Details) - Convertible Notes Payable |
Jun. 30, 2023 |
Jun. 30, 2022 |
---|---|---|
Convertible Notes Due 2023 | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 2.40% | |
Convertible Notes due 2025 | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 1.30% | 1.30% |
Convertible Notes due 2027 | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 3.20% |
Fair Value Measurements - Level III (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2023
USD ($)
| |
Fair Value of Assets Used to Fund Deferred Compensation Liability | |
Beginning balance | $ 10,074 |
Fair value adjustments and fees | 561 |
Ending balance | $ 10,635 |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | General and administrative |
Revenue and Direct Expense - Obligation (Details) $ in Millions |
Jun. 30, 2023
USD ($)
|
---|---|
Remaining Performance Obligations | |
Remaining performance obligations | $ 531.0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Remaining Performance Obligations | |
Revenue, remaining performance obligation, percentage | 24.00% |
Revenue recognition period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Remaining Performance Obligations | |
Revenue, remaining performance obligation, percentage | 55.00% |
Revenue recognition period | 1 year |
Revenue and Direct Expense - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
Revenue from Contract with Customer [Abstract] | |||||
Increase in contract with customer, liability | $ (900,000) | ||||
Recognized deferred revenue | $ 11,500,000 | $ 10,200,000 | 28,200,000 | $ 26,100,000 | |
Deferred sales incentive compensation | 10,900,000 | 10,900,000 | $ 11,000,000 | ||
Amortization expense for the deferred sales incentive compensation | $ 1,200,000 | $ 1,100,000 | 2,300,000 | 2,200,000 | |
Impairment loss for capitalized costs | $ 0 | $ 0 |
Revenue and Direct Expense - Direct Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Product Information [Line Items] | ||||
Direct expense | $ 123,497 | $ 126,482 | $ 232,486 | $ 251,764 |
Asset-based | ||||
Product Information [Line Items] | ||||
Direct expense | 108,532 | 112,301 | 211,155 | 229,729 |
Subscription-based | ||||
Product Information [Line Items] | ||||
Direct expense | 6,933 | 7,241 | 13,295 | 15,052 |
Professional services and other | ||||
Product Information [Line Items] | ||||
Direct expense | $ 8,032 | $ 6,940 | $ 8,036 | $ 6,983 |
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Stock-Based compensation | ||||
Maximum number of shares available for future issuance (in shares) | 1,626,985 | 1,626,985 | ||
Statutory rate (as a percent) | 25.50% | 25.50% | 25.50% | 25.50% |
Options | ||||
Stock-Based compensation | ||||
Unrecognized compensation expense weighted-average recognition period | 1 month 6 days | |||
RSUs | ||||
Stock-Based compensation | ||||
Unrecognized compensation expense weighted-average recognition period | 2 years | |||
Unrecognized compensation expense related to shares | $ 108.6 | $ 108.6 | ||
PSUs | ||||
Stock-Based compensation | ||||
Unrecognized compensation expense weighted-average recognition period | 1 year 2 months 12 days | |||
Unrecognized compensation expense related to shares | $ 6.2 | $ 6.2 |
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Share-Based Payment Arrangement [Abstract] | ||||
Stock-based compensation expense | $ 21,390 | $ 22,876 | $ 40,843 | $ 44,566 |
Tax effect on stock-based compensation expense | (5,454) | (5,833) | (10,415) | (11,364) |
Net effect on income | $ 15,936 | $ 17,043 | $ 30,428 | $ 33,202 |
Income Taxes - Loss Before Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Loss before income tax provision (benefit) | $ (22,714) | $ (30,101) | $ (41,706) | $ (42,789) |
Income tax provision (benefit) | $ 418 | $ (5,833) | $ 24,187 | $ (3,813) |
Effective tax rate | (1.80%) | 19.40% | (58.00%) | 8.90% |
Segment Information - Reconciliation of Income (Loss) From Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2023 |
Mar. 31, 2023 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Segment Reporting Information [Line Items] | ||||||
Loss from continuing operations | $ (15,312) | $ (31,723) | $ (26,369) | $ (38,444) | ||
Nonsegment operating expenses | (327,746) | (350,575) | (637,510) | (678,659) | ||
Other (expense) income, net | (7,402) | 1,622 | (15,337) | (4,345) | ||
Loss before income tax provision (benefit) | (22,714) | (30,101) | (41,706) | (42,789) | ||
Income tax provision (benefit) | 418 | (5,833) | 24,187 | (3,813) | ||
Net loss | (23,132) | $ (42,761) | (24,268) | $ (14,708) | (65,893) | (38,976) |
Add: Net loss attributable to non-controlling interest | 1,716 | 983 | 3,249 | 1,832 | ||
Net loss attributable to Envestnet, Inc. | (21,416) | (23,285) | (62,644) | (37,144) | ||
Operating Segments | Envestnet Wealth Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Loss from continuing operations | 23,399 | 3,968 | 46,862 | 29,237 | ||
Operating Segments | Envestnet Data & Analytics | ||||||
Segment Reporting Information [Line Items] | ||||||
Loss from continuing operations | (10,993) | (3,705) | (18,773) | (9,292) | ||
Nonsegment | ||||||
Segment Reporting Information [Line Items] | ||||||
Nonsegment operating expenses | $ (27,718) | $ (31,986) | $ (54,458) | $ (58,389) |
Segment Information - Summary of Consolidated Total Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Assets | $ 2,053,905 | $ 2,112,165 |
Envestnet Wealth Solutions | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,479,455 | 1,503,646 |
Envestnet Data & Analytics | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 574,450 | $ 608,519 |
Commitments and Contingencies (Details) |
6 Months Ended | ||
---|---|---|---|
Jul. 19, 2021
claim
|
Oct. 21, 2020
plaintiff
|
Jun. 30, 2023
claim
|
|
Other Commitments [Line Items] | |||
Number of previous claims experienced | 0 | ||
Case No. 3:20-cv-05991-SK | |||
Other Commitments [Line Items] | |||
Number of plaintiffs | plaintiff | 9 | ||
Claims dismissed | 2 |
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