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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
 
Commission file number 001-34835
env-logo.jpg
Envestnet, Inc.
(Exact name of registrant as specified in its charter)
Delaware20-1409613
(State or other jurisdiction of
incorporation or organization)
(I.R.S Employer
Identification No.)
1000 Chesterbrook Boulevard, Suite 250, Berwyn, Pennsylvania
19312
(Address of principal executive offices)(Zip Code)
 Registrant’s telephone number, including area code:
(312) 827-2800
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of exchange on which registered
Common Stock, par value $0.005 per shareENVNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ý  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerý Accelerated filer
Non-accelerated filer 
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes   No 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes   No 
As of April 28, 2023, Envestnet, Inc. had 54,404,069 shares of common stock outstanding.



TABLE OF CONTENTS
Page
2




Envestnet, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share information)
(unaudited)
March 31,December 31,
20232022
Assets
Current assets:
Cash and cash equivalents$52,664 $162,173 
Fees receivable, net122,704 101,696 
Prepaid expenses and other current assets47,391 41,363 
Total current assets222,759 305,232 
Property and equipment, net64,144 62,443 
Internally developed software, net196,874 184,558 
Intangible assets, net377,055 379,995 
Goodwill998,428 998,414 
Operating lease right-of-use assets, net79,553 81,596 
Other assets117,644 99,927 
Total assets$2,056,457 $2,112,165 
Liabilities and equity
Current liabilities:
Accounts payable, accrued expenses and other current liabilities$195,983 $233,866 
Operating lease liabilities12,270 11,949 
Deferred revenue44,445 36,363 
Current portion of debt44,954 44,886 
Total current liabilities297,652 327,064 
Debt, net of current portion872,968 871,769 
Operating lease liabilities, net of current portion108,568 110,652 
Deferred tax liabilities, net21,445 16,196 
Other liabilities18,644 18,880 
Total liabilities1,319,277 1,344,561 
Commitments and contingencies (note 19)
Stockholders' equity
Preferred stock, par value $0.005, 50,000,000 shares authorized; no shares issued and outstanding as of March 31, 2023 and December 31, 2022
  
Common stock, par value $0.005, 500,000,000 shares authorized; 70,587,503 and 70,025,733 shares issued as of March 31, 2023 and December 31, 2022, respectively; 54,401,984 and 54,013,826 shares outstanding as of March 31, 2023 and December 31, 2022, respectively
352 350 
Treasury stock at cost, 16,185,519 and 16,011,907 shares as of March 31, 2023 and December 31, 2022, respectively
(264,283)(253,551)
Additional paid-in capital1,154,012 1,135,284 
Accumulated deficit(160,155)(118,927)
Accumulated other comprehensive loss(4,312)(8,589)
Total stockholders’ equity, attributable to Envestnet, Inc.725,614 754,567 
Non-controlling interest11,566 13,037 
Total equity737,180 767,604 
Total liabilities and equity$2,056,457 $2,112,165 

See accompanying notes to unaudited Condensed Consolidated Financial Statements.
3


Envestnet, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share information)
(unaudited)

Three Months Ended
March 31,
20232022
Revenue:
Asset-based$176,932 $202,717 
Subscription-based117,079 114,734 
Total recurring revenue294,011 317,451 
Professional services and other revenue4,696 3,912 
Total revenue298,707 321,363 
Operating expenses:
Direct expense108,989 125,282 
Employee compensation114,215 126,849 
General and administrative53,619 44,335 
Depreciation and amortization32,941 31,618 
Total operating expenses309,764 328,084 
Loss from operations(11,057)(6,721)
Other expense, net(7,935)(5,967)
Loss before income tax provision(18,992)(12,688)
Income tax provision23,769 2,020 
Net loss(42,761)(14,708)
Add: Net loss attributable to non-controlling interest1,533 849 
Net loss attributable to Envestnet, Inc.$(41,228)$(13,859)
Net loss attributable to Envestnet, Inc. per share:
Basic and diluted$(0.76)$(0.25)
Weighted average common shares outstanding:
Basic and diluted54,143,259 54,903,677 

See accompanying notes to unaudited Condensed Consolidated Financial Statements.
4


Envestnet, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)
 
Three Months Ended
March 31,
20232022
Net loss attributable to Envestnet, Inc.
$(41,228)$(13,859)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments4,277 (1,478)
Total other comprehensive income (loss), net of tax4,277 (1,478)
Comprehensive loss attributable to Envestnet, Inc.$(36,951)$(15,337)

See accompanying notes to unaudited Condensed Consolidated Financial Statements.

5


Envestnet, Inc.
Condensed Consolidated Statements of Stockholders' Equity
(in thousands, except share information)
(unaudited)

Accumulated
AdditionalOtherNon-
Common StockTreasury StockPaid-inComprehensiveAccumulatedControllingTotal
SharesAmountSharesAmountCapitalLossDeficitInterestEquity
Balance, December 31, 202270,025,733 $350 (16,011,907)$(253,551)$1,135,284 $(8,589)$(118,927)$13,037 $767,604 
Net loss— — — — — — (41,228)(1,533)(42,761)
Other comprehensive income, net of tax— — — — — 4,277 — — 4,277 
Stock-based compensation expense— — — — 19,345 — — 108 19,453 
Issuance of common stock, vesting of RSUs and PSUs524,316 2 — — — — — — 2 
Net cash paid related to tax withholding for stock-based compensation
— — (173,612)(10,732)— — — — (10,732)
Proceeds from the exercise of stock options37,454 — — — 367 — — — 367 
Purchase of non-controlling units from third-party shareholders— — — — (984)— — (24)(1,008)
Other— — — — — — — (22)(22)
Balance, March 31, 202370,587,503 $352 (16,185,519)$(264,283)$1,154,012 $(4,312)$(160,155)$11,566 $737,180 

Accumulated
AdditionalOtherNon-
Common StockTreasury StockPaid-inComprehensiveAccumulatedControllingTotal
SharesAmountSharesAmountCapitalLossDeficitInterestEquity
Balance, December 31, 202168,879,152 $344 (14,086,064)$(134,996)$1,131,628 $(1,899)$(37,988)$2,453 $959,542 
Net loss— — — — — — (13,859)(849)(14,708)
Other comprehensive loss, net of tax— — — — — (1,478)— — (1,478)
Stock-based compensation expense— — — — 21,690 — — — 21,690 
Issuance of common stock, vesting of RSUs and PSUs514,319 3 — — — — — — 3 
Net cash paid related to tax withholding for stock-based compensation— — (170,992)(12,570)— — — — (12,570)
Proceeds from the exercise of stock options38,681 — — — 658 — — — 658 
Other— — — — (84)— — 102 18 
Balance, March 31, 202269,432,152 $347 (14,257,056)$(147,566)$1,153,892 $(3,377)$(51,847)$1,706 $953,155 


See accompanying notes to unaudited Condensed Consolidated Financial Statements.

6


Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
March 31,
20232022
Cash flows from operating activities:
Net loss $(42,761)$(14,708)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization32,941 31,618 
Provision for doubtful accounts571 (1,747)
Deferred income taxes5,221 (18,955)
Non-cash compensation expense19,453 21,814 
Non-cash interest expense4,498 2,599 
Loss allocations from equity method investments2,940 1,545 
Other(103)(59)
Changes in operating assets and liabilities:
Fees receivable, net(21,579)8,661 
Prepaid expenses and other assets(9,858)(9,491)
Accounts payable, accrued expenses and other liabilities(32,917)(29,113)
Deferred revenue8,073 11,097 
Net cash (used in) provided by operating activities(33,521)3,261 
Cash flows from investing activities:
Purchases of property and equipment(4,402)(3,896)
Capitalization of internally developed software(23,664)(21,671)
Acquisition of proprietary technology(10,000)(15,000)
Investments in private companies(950)(3,000)
Issuance of loan receivable to private company(20,000) 
Other260 (2,500)
Net cash used in investing activities(58,756)(46,067)
Cash flows from financing activities:
Proceeds from exercise of stock options367 658 
Payments related to tax withholdings for stock-based compensation(10,732)(12,570)
Payments on finance lease obligations(152)(12,454)
Payments related to revolving credit facility (1,869)
Payments related to share repurchases(9,289) 
Purchase of non-controlling units from third-party shareholders(1,008) 
Other2 3 
Net cash used in financing activities(20,812)(26,232)
Effect of exchange rate on changes on cash, cash equivalents and restricted cash3,580 (627)
Net change in cash, cash equivalents and restricted cash(109,509)(69,665)
Cash, cash equivalents and restricted cash, beginning of period162,173 429,428 
Cash, cash equivalents and restricted cash, end of period$52,664 $359,763 
Supplemental disclosures of cash flow information
Net cash paid for income taxes$1,110 $716 
Cash paid for interest$1,822 $2,254 
Supplemental disclosure of non-cash activities
Conversion of equity method investee loan to shares$4,129 $ 
Right-of-use assets obtained in exchange for lease liabilities, net$206 $ 
Property and equipment acquired through finance lease$152 $12,454 
Purchase of property and equipment included in accounts payable, accrued expenses and other liabilities$2,018 $1,883 
Internally developed software costs included in accrued expenses and other liabilities$ $178 
Membership interest liabilities included in other non-current liabilities$ $124 
See accompanying notes to unaudited Condensed Consolidated Financial Statements.
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Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

1.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.

2.Summary of Significant Accounting Policies

Basis of Presentation
 
The accompanying unaudited condensed consolidated financial statements of the Company as of March 31, 2023 and for the three months ended March 31, 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 March 31, 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 expense, net in the condensed consolidated statements of operations.

The results of operations for the three months ended March 31, 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 items on the condensed consolidated balance sheets as of December 31, 2022 and the condensed consolidated statements of cash flows for the three months ended March 31, 2022 have been reclassified to conform to the current year
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Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
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:
March 31,March 31,
20232022
(in thousands)
Cash and cash equivalents$52,664 $359,614 
Restricted cash included in prepaid expenses and other current assets 149 
Total cash, cash equivalents and restricted cash$52,664 $359,763 

Related Party Transactions

The Company has an approximate 3.7% 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 $3.6 million and $4.7 million in the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023 and December 31, 2022, the Company recorded a net receivable from the private services company of $3.9 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.

3.Acquisitions

Acquisition of Redi2 Technologies

On July 1, 2022, Envestnet 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:

Preliminary EstimateMeasurement Period AdjustmentsRevised Estimate
(in thousands)
Cash consideration, net$69,406 $ $69,406 
Estimated working capital adjustment(1,465)932 (533)
Total$67,941 $932 $68,873 

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.
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Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
These performance bonuses will be recognized as compensation and benefits expense in the condensed consolidated statements of operations. The performance bonuses recognized during the three months ended March 31, 2023 were immaterial.

The following table summarizes the estimated fair values of the assets acquired at the date of acquisition:

Preliminary EstimateMeasurement Period AdjustmentsRevised Estimate
(in thousands)
Total current assets$1,985 $ $1,985 
Other non-current assets3,349 (28)3,321 
Identifiable intangible assets26,500  26,500 
Goodwill44,236 2,231 46,467 
Total assets acquired76,070 2,203 78,273 
Accounts payable and accrued expenses(1,157)(1,271)(2,428)
Operating lease liabilities(2,201) (2,201)
Deferred revenue(4,771) (4,771)
Total liabilities assumed(8,129)(1,271)(9,400)
Total net assets acquired, net of cash received$67,941 $932 $68,873 

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:

Preliminary EstimateEstimated Useful LifeAmortization Method
(in thousands)(in years)
Customer lists$14,000 
14 - 16
Accelerated
Proprietary technologies9,500 
6
Straight-line
Trade names3,000 
6 - 7
Straight-line
Total intangible assets acquired$26,500 

The estimated fair values of certain of the assets acquired and liabilities assumed are provisional and based on information that was available to the Company as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation procedures that are in progress and not yet at the point where there is sufficient information for a definitive measurement. The Company believes the preliminary information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair values reflected herein are subject to change and such changes could be significant. No measurement period adjustments were made during the three months ended March 31, 2023. The Company expects to finalize the valuation of tangible assets acquired, liabilities assumed, identifiable intangible assets and goodwill balances and complete the acquisition accounting as soon as reasonably practicable, though no later than July 1, 2023.

The results of Redi2 are 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 months ended March 31, 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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Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)

4.Prepaid Expenses and Other Current Assets
 
Prepaid expenses and other current assets consisted of the following:
March 31,December 31,
 20232022
(in thousands)
Prepaid technology$20,657 $16,649 
Elevate Summit prepayments and deposits6,447 528 
Non-income tax receivable5,484 5,488 
Prepaid insurance2,817 2,881 
Income tax prepayments and receivables 2,515 
Other11,986 13,302 
Total prepaid expenses and other current assets$47,391 $41,363 
  
5.Internally Developed Software, net

Internally developed software, net consisted of the following:
  March 31,December 31,
 Estimated Useful Life20232022
(in thousands)
Internally developed software5 years$336,607 $313,200 
Less: accumulated amortization (139,733)(128,642)
Internally developed software, net $196,874 $184,558 


6.Geographical Information

The following table sets forth certain long-lived assets including property and equipment, net and internally developed software, net by geographic area:
 March 31,December 31,
 20232022
(in thousands)
United States$258,263 $245,817 
India2,705 1,093 
Other50 91 
Total long-lived assets, net$261,018 $247,001 

See “Note 14—Revenue and Direct Expense” for detail of revenue by geographic area.

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Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
7.Intangible Assets, Net 

Intangible assets, net consisted of the following:
 March 31, 2023December 31, 2022
 Gross NetGross Net
 CarryingAccumulatedCarryingCarryingAccumulatedCarrying
 AmountAmortizationAmountAmountAmortizationAmount
(in thousands)
Customer lists$604,080 $(295,976)$308,104 $604,080 $(285,288)$318,792 
Proprietary technologies109,057 (46,894)62,163 113,224 (59,401)53,823 
Trade names15,700 (8,912)6,788 15,700 (8,320)7,380 
Total intangible assets$728,837 $(351,782)$377,055 $733,004 $(353,009)$379,995 

On April 1, 2022, the Company entered into a purchase agreement with a privately held company to acquire the 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.

During the three months ended March 31, 2023, the Company retired fully amortized proprietary technologies with a historical cost of $17.5 million. During the three months ended March 31, 2022, the Company had no material retirements of intangible assets.
Future amortization expense of the Company's intangible assets as of March 31, 2023, is expected to be as follows (in thousands):
Remainder of 2023$45,947 
202456,040 
202552,700 
202644,797 
202736,232 
Thereafter141,339 
Total$377,055 

8.Depreciation and Amortization Expense

Depreciation and amortization expense consisted of the following:
Three Months Ended
 March 31,
20232022
(in thousands)
Intangible asset amortization$16,940 $17,520 
Internally developed software amortization11,090 8,494 
Property and equipment depreciation4,911 5,604 
Total depreciation and amortization$32,941 $31,618 

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Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
9.Goodwill

Changes in the carrying amount of goodwill by reportable segment were as follows:

 Envestnet Wealth SolutionsEnvestnet Data & AnalyticsTotal
(in thousands)
Balance as of December 31, 2022
$679,739 $318,675 $998,414 
Foreign currency translation 14 14 
Balance as of March 31, 2023
$679,739 $318,689 $998,428 


10.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.
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 for the three months ended March 31, 2023.

11.Accounts Payable, Accrued Expenses and Other Current Liabilities
 
Accounts payable, accrued expenses and other liabilities consisted of the following:
March 31,December 31,
 20232022
(in thousands)
Accrued investment manager fees$98,419 $99,851 
Accrued compensation and related taxes42,120 77,939 
Accrued professional services14,188 10,762 
Accounts payable9,605 11,271 
Income tax payable9,459 260 
Accrued capital expenditures6,359 4,783 
Accrued interest6,147 3,091 
Accrued technology5,179 6,393 
Accrued treasury stock purchases 9,289 
Other accrued expenses4,507 10,227 
Total accounts payable, accrued expenses and other current liabilities$195,983 $233,866 

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Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
12.Debt

The following tables set forth the carrying value and estimated fair value of the Company's debt obligations as of March 31, 2023 and December 31, 2022:

 March 31, 2023
 Issuance AmountUnamortized Issuance CostsCarrying ValueFair Value (Level II)
(in thousands)
Third Credit Agreement$ $ $ $ 
Convertible Notes due 202345,000 (46)44,954 44,168 
Convertible Notes due 2025317,500 (4,318)313,182 284,220 
Convertible Notes due 2027575,000 (15,214)559,786 598,270 
Total debt$937,500 $(19,578)$917,922 $926,658 

 December 31, 2022
 Issuance AmountUnamortized Issuance CostsCarrying ValueFair Value (Level II)
(in thousands)
Third Credit Agreement$ $ $ $ 
Convertible Notes due 202345,000 (114)44,886 46,058 
Convertible Notes due 2025317,500 (4,765)312,735 293,688 
Convertible Notes due 2027575,000 (15,966)559,034 606,119 
Total debt$937,500 $(20,845)$916,655 $945,865 

Credit Agreement

The Third Credit Agreement contains customary conditions, representations and warranties, affirmative and negative covenants, mandatory prepayment provisions and events of default. The covenants include certain financial covenants requiring the Company to maintain compliance with a maximum total leverage ratio and a minimum interest coverage ratio. The Company was in compliance with these financial covenants as of March 31, 2023.

As of March 31, 2023 and December 31, 2022, there were no amounts outstanding under the Revolving Credit Facility and as of March 31, 2023 all $500.0 million was available to borrow. As of March 31, 2023 and December 31, 2022, debt issuance costs related to the Third Credit Agreement 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 $2.0 million and $2.2 million, respectively.

Interest Expense

Interest expense was comprised of the following and is included in other expense, net in the condensed consolidated statements of operations:
 Three Months Ended
 March 31,
 20232022
(in thousands)
Coupon interest$4,565 $2,480 
Amortization of debt discount and issuance costs1,442 2,060 
Undrawn and other fees313 313 
 Total interest expense$6,320 $4,853 
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Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
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:
 Three Months Ended
 March 31,
 20232022
Convertible Notes due 20232.4 %2.4 %
Convertible Notes due 20251.3 %1.3 %
Convertible Notes due 20273.2 %N/A

13.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 March 31, 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:
 March 31, 2023
 Fair ValueLevel ILevel IILevel III
(in thousands)
Assets:    
Money market funds$2,118 $2,118 $ $ 
Assets to fund deferred compensation liability10,380   10,380 
Total assets$12,498 $2,118 $ $10,380 
Liabilities:    
Deferred compensation liability8,667 8,667   
Total liabilities$8,667 $8,667 $ $ 

 December 31, 2022
 Fair ValueLevel ILevel IILevel III
(in thousands)
Assets:    
Money market funds$2,628 $2,628 $ $ 
Assets to fund deferred compensation liability10,074   10,074 
Total assets$12,702