false--12-31Q220190001337619P60DP16YP10Y414200051400034220001624000663200020170000.0050.005500000000500000000612388986541567048121800520701560.060.2530.253P16YP8YP7YP7YP4YP2Y219070000.0050.0055000000050000000P39YP7YP5YP7YP3YP3YP6MP1YP1YP1YP1YP3YP0YP0YP0Y1311709813345514 0001337619 2019-01-01 2019-06-30 0001337619 2019-08-01 0001337619 2018-12-31 0001337619 2019-06-30 0001337619 2019-04-01 2019-06-30 0001337619 2018-01-01 2018-06-30 0001337619 2018-04-01 2018-06-30 0001337619 env:RecurringRevenueMember 2019-01-01 2019-06-30 0001337619 env:AssetBasedRevenueMember 2019-04-01 2019-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember 2018-04-01 2018-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember 2018-04-01 2018-06-30 0001337619 env:RecurringRevenueMember 2019-04-01 2019-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember 2019-01-01 2019-06-30 0001337619 env:AssetBasedRevenueMember 2018-01-01 2018-06-30 0001337619 env:RecurringRevenueMember 2018-04-01 2018-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember 2019-04-01 2019-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember 2019-04-01 2019-06-30 0001337619 env:AssetBasedRevenueMember 2018-04-01 2018-06-30 0001337619 env:AssetBasedRevenueMember 2019-01-01 2019-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember 2019-01-01 2019-06-30 0001337619 env:RecurringRevenueMember 2018-01-01 2018-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember 2018-01-01 2018-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember 2018-01-01 2018-06-30 0001337619 us-gaap:RetainedEarningsMember 2018-06-30 0001337619 2018-01-01 2018-03-31 0001337619 us-gaap:TreasuryStockMember 2018-03-31 0001337619 us-gaap:RetainedEarningsMember 2018-03-31 0001337619 us-gaap:RetainedEarningsMember 2017-12-31 0001337619 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0001337619 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001337619 us-gaap:CommonStockMember 2018-04-01 2018-06-30 0001337619 us-gaap:CommonStockMember 2017-12-31 0001337619 us-gaap:NoncontrollingInterestMember 2017-12-31 0001337619 us-gaap:NoncontrollingInterestMember 2018-06-30 0001337619 us-gaap:NoncontrollingInterestMember 2018-01-01 2018-03-31 0001337619 us-gaap:CommonStockMember 2018-03-31 0001337619 2018-03-31 0001337619 us-gaap:TreasuryStockMember 2018-01-01 2018-03-31 0001337619 us-gaap:TreasuryStockMember 2017-12-31 0001337619 us-gaap:CommonStockMember 2018-06-30 0001337619 us-gaap:CommonStockMember 2018-01-01 2018-03-31 0001337619 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0001337619 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0001337619 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001337619 us-gaap:TreasuryStockMember 2018-04-01 2018-06-30 0001337619 us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0001337619 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0001337619 2017-12-31 0001337619 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0001337619 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0001337619 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0001337619 us-gaap:TreasuryStockMember 2018-06-30 0001337619 us-gaap:NoncontrollingInterestMember 2018-03-31 0001337619 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0001337619 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0001337619 2018-06-30 0001337619 us-gaap:NoncontrollingInterestMember 2018-04-01 2018-06-30 0001337619 us-gaap:TreasuryStockMember 2019-04-01 2019-06-30 0001337619 us-gaap:TreasuryStockMember 2018-12-31 0001337619 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001337619 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001337619 us-gaap:RetainedEarningsMember 2019-06-30 0001337619 2019-01-01 2019-03-31 0001337619 us-gaap:TreasuryStockMember 2019-01-01 2019-03-31 0001337619 us-gaap:NoncontrollingInterestMember 2019-03-31 0001337619 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001337619 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001337619 us-gaap:RetainedEarningsMember 2018-12-31 0001337619 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001337619 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0001337619 us-gaap:NoncontrollingInterestMember 2018-12-31 0001337619 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001337619 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001337619 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001337619 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001337619 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001337619 us-gaap:CommonStockMember 2019-03-31 0001337619 us-gaap:CommonStockMember 2018-12-31 0001337619 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001337619 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0001337619 us-gaap:TreasuryStockMember 2019-06-30 0001337619 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001337619 us-gaap:RetainedEarningsMember 2019-03-31 0001337619 us-gaap:TreasuryStockMember 2019-03-31 0001337619 2019-03-31 0001337619 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001337619 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001337619 us-gaap:CommonStockMember 2019-06-30 0001337619 us-gaap:NoncontrollingInterestMember 2019-06-30 0001337619 env:EnvestnetPortfolioManagementConsultantsProductsAndServicesSuiteMember 2019-06-30 0001337619 env:EnvestnetEnterpriseProductAndServicesSuiteMember 2019-01-01 2019-06-30 0001337619 us-gaap:OtherNoncurrentAssetsMember 2018-12-31 0001337619 us-gaap:OtherNoncurrentAssetsMember 2019-06-30 0001337619 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember 2018-12-31 0001337619 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember 2019-06-30 0001337619 env:PortfolioCenterAcquisitionMember 2019-04-01 0001337619 env:PortfolioCenterAcquisitionMember 2019-04-01 2019-04-01 0001337619 env:PortfolioCenterAcquisitionMember us-gaap:CustomerListsMember 2019-04-01 2019-04-01 0001337619 env:PortfolioCenterAcquisitionMember us-gaap:TechnologyBasedIntangibleAssetsMember 2019-04-01 2019-04-01 0001337619 env:PIEtechAcquisitionMember 2019-05-01 0001337619 env:PrivateCompanyAcquisitionMember 2019-01-02 0001337619 env:PIEtechAcquisitionMember 2019-01-01 2019-06-30 0001337619 env:PIEtechAcquisitionMember 2019-06-30 0001337619 env:PortfolioCenterAcquisitionMember 2019-04-01 2019-06-30 0001337619 env:PIEtechAcquisitionMember 2019-04-01 2019-06-30 0001337619 env:PIEtechAcquisitionMember 2019-05-01 2019-05-01 0001337619 env:RestrictedStockUnitsandPerformanceStockUnitsMember env:PIEtechAcquisitionMember env:EquityPlanMember 2019-05-01 2019-06-30 0001337619 env:PIEtechAcquisitionMember env:EquityPlanMember 2019-05-01 2019-05-01 0001337619 env:RestrictedStockUnitsandPerformanceStockUnitsMember env:PIEtechAcquisitionMember env:EquityPlanMember 2019-05-01 0001337619 us-gaap:RestrictedStockUnitsRSUMember env:PIEtechAcquisitionMember env:EquityPlanMember 2019-05-01 2019-06-30 0001337619 us-gaap:PerformanceSharesMember env:PIEtechAcquisitionMember env:EquityPlanMember 2019-05-01 2019-06-30 0001337619 env:EnvestnetPortfolioCenterAndPIEtechMember 2019-01-01 2019-06-30 0001337619 env:EnvestnetPortfolioCenterAndPIEtechMember 2018-04-01 2018-06-30 0001337619 env:EnvestnetPortfolioCenterAndPIEtechMember 2019-04-01 2019-06-30 0001337619 env:EnvestnetPortfolioCenterAndPIEtechMember 2018-01-01 2018-06-30 0001337619 env:PrivateCompanyAcquisitionMember 2019-01-02 2019-01-02 0001337619 env:PIEtechAcquisitionMember us-gaap:TechnologyBasedIntangibleAssetsMember 2019-05-01 2019-05-01 0001337619 env:PIEtechAcquisitionMember us-gaap:TradeNamesMember 2019-05-01 2019-05-01 0001337619 env:PIEtechAcquisitionMember us-gaap:CustomerListsMember 2019-05-01 2019-05-01 0001337619 env:PrivateCompanyAcquisitionMember us-gaap:TechnologyBasedIntangibleAssetsMember 2019-01-02 2019-01-02 0001337619 env:PortfolioCenterAcquisitionMember 2019-01-01 2019-06-30 0001337619 env:RestrictedStockUnitsandPerformanceStockUnitsMember env:PIEtechAcquisitionMember env:EquityPlanMember 2019-05-01 2019-05-01 0001337619 srt:MaximumMember env:PIEtechAcquisitionMember us-gaap:CustomerListsMember 2019-05-01 2019-05-01 0001337619 srt:MinimumMember env:PIEtechAcquisitionMember us-gaap:CustomerListsMember 2019-05-01 2019-05-01 0001337619 us-gaap:LandMember 2018-12-31 0001337619 env:ComputerEquipmentAndSoftwareMember 2018-12-31 0001337619 us-gaap:OfficeEquipmentMember 2019-06-30 0001337619 env:ComputerEquipmentAndSoftwareMember 2019-06-30 0001337619 us-gaap:FurnitureAndFixturesMember 2018-12-31 0001337619 us-gaap:BuildingAndBuildingImprovementsMember 2019-06-30 0001337619 us-gaap:LeaseholdImprovementsMember 2019-06-30 0001337619 env:ComputerEquipmentAndSoftwareMember 2019-01-01 2019-06-30 0001337619 us-gaap:BuildingAndBuildingImprovementsMember 2018-12-31 0001337619 us-gaap:OfficeEquipmentMember 2018-12-31 0001337619 us-gaap:LeaseholdImprovementsMember 2018-12-31 0001337619 us-gaap:FurnitureAndFixturesMember 2019-06-30 0001337619 us-gaap:LandMember 2019-06-30 0001337619 env:EnvestnetDataandAnalyticsMember 2019-01-01 2019-06-30 0001337619 env:EnvestnetWealthSolutionsMember 2019-01-01 2019-06-30 0001337619 env:EnvestnetWealthSolutionsMember 2018-01-01 2018-06-30 0001337619 env:EnvestnetDataandAnalyticsMember 2018-04-01 2018-06-30 0001337619 env:EnvestnetDataandAnalyticsMember 2018-01-01 2018-06-30 0001337619 env:EnvestnetWealthSolutionsMember 2018-04-01 2018-06-30 0001337619 env:EnvestnetDataandAnalyticsMember 2019-04-01 2019-06-30 0001337619 env:EnvestnetWealthSolutionsMember 2019-04-01 2019-06-30 0001337619 srt:MinimumMember us-gaap:FurnitureAndFixturesMember 2019-01-01 2019-06-30 0001337619 srt:MinimumMember us-gaap:OfficeEquipmentMember 2019-01-01 2019-06-30 0001337619 srt:MinimumMember us-gaap:BuildingAndBuildingImprovementsMember 2019-01-01 2019-06-30 0001337619 srt:MaximumMember us-gaap:FurnitureAndFixturesMember 2019-01-01 2019-06-30 0001337619 srt:MaximumMember us-gaap:OfficeEquipmentMember 2019-01-01 2019-06-30 0001337619 srt:MaximumMember us-gaap:BuildingAndBuildingImprovementsMember 2019-01-01 2019-06-30 0001337619 us-gaap:SoftwareDevelopmentMember 2019-01-01 2019-06-30 0001337619 env:PrivateCompanyAcquisitionMember env:EnvestnetWealthSolutionsMember 2019-01-01 2019-06-30 0001337619 env:EnvestnetWealthSolutionsMember 2018-12-31 0001337619 env:PortfolioCenterAcquisitionMember env:EnvestnetWealthSolutionsMember 2019-01-01 2019-06-30 0001337619 env:PrivateCompanyAcquisitionMember 2019-01-01 2019-06-30 0001337619 env:PIEtechAcquisitionMember env:EnvestnetWealthSolutionsMember 2019-01-01 2019-06-30 0001337619 env:PIEtechAcquisitionMember env:EnvestnetDataandAnalyticsMember 2019-01-01 2019-06-30 0001337619 env:PrivateCompanyAcquisitionMember env:EnvestnetDataandAnalyticsMember 2019-01-01 2019-06-30 0001337619 env:EnvestnetDataandAnalyticsMember 2018-12-31 0001337619 env:PortfolioCenterAcquisitionMember env:EnvestnetDataandAnalyticsMember 2019-01-01 2019-06-30 0001337619 env:EnvestnetDataandAnalyticsMember 2019-06-30 0001337619 env:EnvestnetWealthSolutionsMember 2019-06-30 0001337619 us-gaap:OrderOrProductionBacklogMember 2019-06-30 0001337619 us-gaap:TradeNamesMember 2019-06-30 0001337619 us-gaap:CustomerListsMember 2018-12-31 0001337619 us-gaap:TechnologyBasedIntangibleAssetsMember 2019-06-30 0001337619 us-gaap:CustomerListsMember 2019-06-30 0001337619 us-gaap:OrderOrProductionBacklogMember 2018-12-31 0001337619 us-gaap:TechnologyBasedIntangibleAssetsMember 2018-12-31 0001337619 us-gaap:TradeNamesMember 2018-12-31 0001337619 us-gaap:OrderOrProductionBacklogMember 2019-01-01 2019-06-30 0001337619 srt:MaximumMember us-gaap:TechnologyBasedIntangibleAssetsMember 2019-01-01 2019-06-30 0001337619 srt:MaximumMember us-gaap:TradeNamesMember 2019-01-01 2019-06-30 0001337619 srt:MinimumMember us-gaap:CustomerListsMember 2019-01-01 2019-06-30 0001337619 srt:MinimumMember us-gaap:TradeNamesMember 2019-01-01 2019-06-30 0001337619 srt:MaximumMember us-gaap:CustomerListsMember 2019-01-01 2019-06-30 0001337619 srt:MinimumMember us-gaap:TechnologyBasedIntangibleAssetsMember 2019-01-01 2019-06-30 0001337619 env:ConvertibleUnsecured1.75PercentNotesDueDecember2023Member 2018-12-31 0001337619 env:ConvertibleUnsecured1.75PercentNotesDueDecember2019Member 2019-06-30 0001337619 env:CreditAgreementMember 2018-12-31 0001337619 env:ConvertibleUnsecured1.75PercentNotesDueDecember2023Member 2019-06-30 0001337619 env:ConvertibleUnsecured1.75PercentNotesDueDecember2019Member 2018-12-31 0001337619 env:CreditAgreementMember 2019-06-30 0001337619 env:SecondAmendedAndRestatedCreditAgreementMember 2017-07-31 0001337619 env:ConvertibleNotesDueDecember2023Member 2018-05-31 0001337619 srt:MinimumMember env:SecondAmendedAndRestatedCreditAgreementMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-06-30 0001337619 env:ConvertibleNotesDueDecember2023Member 2019-06-30 0001337619 srt:MaximumMember env:SecondAmendedAndRestatedCreditAgreementMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-06-30 0001337619 env:ConvertibleUnsecured1.75PercentNotesDueDecember2019Member 2014-12-31 0001337619 env:ConvertibleNotesCreditAndAmendedAndRestatedCreditAgreementsMember 2019-01-01 2019-06-30 0001337619 env:ConvertibleNotesCreditAndAmendedAndRestatedCreditAgreementsMember 2018-01-01 2018-06-30 0001337619 env:ConvertibleNotesCreditAndAmendedAndRestatedCreditAgreementsMember 2018-04-01 2018-06-30 0001337619 env:ConvertibleNotesCreditAndAmendedAndRestatedCreditAgreementsMember 2019-04-01 2019-06-30 0001337619 env:ConvertibleUnsecured1.75PercentNotesDueDecember2019Member 2018-06-30 0001337619 us-gaap:FairValueMeasurementsRecurringMember 2019-01-01 2019-06-30 0001337619 us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001337619 us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001337619 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001337619 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001337619 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001337619 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001337619 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001337619 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001337619 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001337619 us-gaap:MoneyMarketFundsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001337619 env:TwoThousandTwentyThreeConvertibleNotesMember 2018-12-31 0001337619 env:TwoThousandNineteenConvertibleNotesMember 2018-12-31 0001337619 env:TwoThousandNineteenConvertibleNotesMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0001337619 env:TwoThousandTwentyThreeConvertibleNotesMember 2019-06-30 0001337619 env:TwoThousandTwentyThreeConvertibleNotesMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0001337619 env:TwoThousandTwentyThreeConvertibleNotesMember 2018-05-25 0001337619 env:SecondAmendedAndRestatedCreditAgreementMember 2018-12-31 0001337619 env:TwoThousandNineteenConvertibleNotesMember 2019-06-30 0001337619 env:SecondAmendedAndRestatedCreditAgreementMember 2019-06-30 0001337619 env:TwoThousandTwentyThreeConvertibleNotesMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-06-30 0001337619 env:TwoThousandNineteenConvertibleNotesMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-06-30 0001337619 env:TwoThousandNineteenConvertibleNotesMember 2014-12-15 0001337619 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001337619 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001337619 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001337619 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001337619 us-gaap:MoneyMarketFundsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001337619 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001337619 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001337619 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001337619 env:PrivateCompanyAcquisitionMember us-gaap:FairValueMeasurementsRecurringMember 2019-01-01 2019-06-30 0001337619 env:PortfolioCenterAcquisitionMember us-gaap:FairValueMeasurementsRecurringMember 2019-01-01 2019-06-30 0001337619 2021-01-01 2019-06-30 0001337619 2024-01-01 2019-06-30 0001337619 2019-07-01 2019-06-30 0001337619 2022-01-01 2019-06-30 0001337619 2020-01-01 2019-06-30 0001337619 2023-01-01 2019-06-30 0001337619 env:AssetBasedRevenueMember env:EnvestnetDataandAnalyticsMember 2018-01-01 2018-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember env:EnvestnetDataandAnalyticsMember 2018-01-01 2018-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember env:EnvestnetWealthSolutionsMember 2018-01-01 2018-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember env:EnvestnetDataandAnalyticsMember 2019-01-01 2019-06-30 0001337619 env:RecurringRevenueMember env:EnvestnetDataandAnalyticsMember 2018-01-01 2018-06-30 0001337619 env:RecurringRevenueMember env:EnvestnetWealthSolutionsMember 2018-01-01 2018-06-30 0001337619 env:RecurringRevenueMember env:EnvestnetDataandAnalyticsMember 2019-01-01 2019-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember env:EnvestnetDataandAnalyticsMember 2019-01-01 2019-06-30 0001337619 env:AssetBasedRevenueMember env:EnvestnetWealthSolutionsMember 2019-01-01 2019-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember env:EnvestnetWealthSolutionsMember 2018-01-01 2018-06-30 0001337619 env:RecurringRevenueMember env:EnvestnetWealthSolutionsMember 2019-01-01 2019-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember env:EnvestnetDataandAnalyticsMember 2018-01-01 2018-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember env:EnvestnetWealthSolutionsMember 2019-01-01 2019-06-30 0001337619 env:AssetBasedRevenueMember env:EnvestnetDataandAnalyticsMember 2019-01-01 2019-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember env:EnvestnetWealthSolutionsMember 2019-01-01 2019-06-30 0001337619 env:AssetBasedRevenueMember env:EnvestnetWealthSolutionsMember 2018-01-01 2018-06-30 0001337619 env:FidelityMember us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2018-04-01 2018-06-30 0001337619 env:FidelityMember us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2019-04-01 2019-06-30 0001337619 env:FidelityMember us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-06-30 0001337619 env:FidelityMember us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2018-01-01 2018-06-30 0001337619 us-gaap:NonUsMember 2019-04-01 2019-06-30 0001337619 country:US 2019-04-01 2019-06-30 0001337619 country:US 2018-01-01 2018-06-30 0001337619 country:US 2018-04-01 2018-06-30 0001337619 us-gaap:NonUsMember 2019-01-01 2019-06-30 0001337619 country:US 2019-01-01 2019-06-30 0001337619 us-gaap:NonUsMember 2018-04-01 2018-06-30 0001337619 us-gaap:NonUsMember 2018-01-01 2018-06-30 0001337619 env:FidelityMember us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember env:EnvestnetWealthSolutionsMember 2019-01-01 2019-06-30 0001337619 env:FidelityMember us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember env:EnvestnetWealthSolutionsMember 2018-01-01 2018-06-30 0001337619 env:FidelityMember us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember env:EnvestnetWealthSolutionsMember 2019-04-01 2019-06-30 0001337619 env:FidelityMember us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember env:EnvestnetWealthSolutionsMember 2018-04-01 2018-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember env:EnvestnetDataandAnalyticsMember 2018-04-01 2018-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember env:EnvestnetDataandAnalyticsMember 2019-04-01 2019-06-30 0001337619 env:RecurringRevenueMember env:EnvestnetWealthSolutionsMember 2018-04-01 2018-06-30 0001337619 env:AssetBasedRevenueMember env:EnvestnetWealthSolutionsMember 2019-04-01 2019-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember env:EnvestnetWealthSolutionsMember 2019-04-01 2019-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember env:EnvestnetDataandAnalyticsMember 2018-04-01 2018-06-30 0001337619 env:AssetBasedRevenueMember env:EnvestnetWealthSolutionsMember 2018-04-01 2018-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember env:EnvestnetWealthSolutionsMember 2018-04-01 2018-06-30 0001337619 env:RecurringRevenueMember env:EnvestnetDataandAnalyticsMember 2019-04-01 2019-06-30 0001337619 env:ProfessionalServicesAndOtherRevenuesMember env:EnvestnetWealthSolutionsMember 2018-04-01 2018-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember env:EnvestnetWealthSolutionsMember 2019-04-01 2019-06-30 0001337619 env:AssetBasedRevenueMember env:EnvestnetDataandAnalyticsMember 2018-04-01 2018-06-30 0001337619 us-gaap:SubscriptionAndCirculationMember env:EnvestnetDataandAnalyticsMember 2019-04-01 2019-06-30 0001337619 env:RecurringRevenueMember env:EnvestnetDataandAnalyticsMember 2018-04-01 2018-06-30 0001337619 env:AssetBasedRevenueMember env:EnvestnetDataandAnalyticsMember 2019-04-01 2019-06-30 0001337619 env:RecurringRevenueMember env:EnvestnetWealthSolutionsMember 2019-04-01 2019-06-30 0001337619 2019-06-30 0001337619 us-gaap:PerformanceSharesMember 2019-04-01 2019-06-30 0001337619 us-gaap:RestrictedStockUnitsRSUMember 2019-04-01 2019-06-30 0001337619 us-gaap:RestrictedStockUnitsRSUMember 2019-03-31 0001337619 us-gaap:PerformanceSharesMember 2019-01-01 2019-03-31 0001337619 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-03-31 0001337619 us-gaap:PerformanceSharesMember 2019-03-31 0001337619 us-gaap:PerformanceSharesMember 2018-12-31 0001337619 us-gaap:PerformanceSharesMember 2019-06-30 0001337619 us-gaap:RestrictedStockUnitsRSUMember 2019-06-30 0001337619 us-gaap:RestrictedStockUnitsRSUMember 2018-12-31 0001337619 env:EmployeeAndOtherStockOptionMember 2019-04-01 2019-06-30 0001337619 env:EmployeeAndOtherStockOptionMember 2019-01-01 2019-03-31 0001337619 env:EmployeeAndOtherStockOptionMember 2019-06-30 0001337619 env:EmployeeAndOtherStockOptionMember 2018-12-31 0001337619 env:EmployeeAndOtherStockOptionMember 2019-03-31 0001337619 env:EmployeeAndOtherStockOptionMember 2018-01-01 2018-12-31 0001337619 env:EmployeeAndOtherStockOptionMember 2019-01-01 2019-06-30 0001337619 us-gaap:PerformanceSharesMember 2019-01-01 2019-06-30 0001337619 srt:MinimumMember env:EmployeeAndOtherStockOptionMember 2019-06-30 0001337619 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-06-30 0001337619 srt:MinimumMember us-gaap:PerformanceSharesMember 2019-06-30 0001337619 srt:MaximumMember env:RestrictedStockUnitsandPerformanceStockUnitsMember env:PIEtechAcquisitionMember env:EquityPlanMember 2019-05-01 2019-06-30 0001337619 srt:MaximumMember us-gaap:PerformanceSharesMember 2019-06-30 0001337619 srt:MaximumMember env:EmployeeAndOtherStockOptionMember 2019-06-30 0001337619 srt:MinimumMember env:RestrictedStockUnitsandPerformanceStockUnitsMember env:PIEtechAcquisitionMember env:EquityPlanMember 2019-05-01 2019-06-30 0001337619 us-gaap:WarrantMember 2018-04-01 2018-06-30 0001337619 us-gaap:ConvertibleDebtSecuritiesMember 2019-01-01 2019-06-30 0001337619 us-gaap:WarrantMember 2018-01-01 2018-06-30 0001337619 us-gaap:RestrictedStockMember 2019-04-01 2019-06-30 0001337619 us-gaap:ConvertibleDebtSecuritiesMember 2018-04-01 2018-06-30 0001337619 env:EmployeeAndOtherStockOptionMember 2019-01-01 2019-06-30 0001337619 us-gaap:RestrictedStockMember 2018-04-01 2018-06-30 0001337619 us-gaap:WarrantMember 2019-04-01 2019-06-30 0001337619 us-gaap:WarrantMember 2019-01-01 2019-06-30 0001337619 us-gaap:ConvertibleDebtSecuritiesMember 2019-04-01 2019-06-30 0001337619 us-gaap:RestrictedStockMember 2019-01-01 2019-06-30 0001337619 us-gaap:RestrictedStockMember 2018-01-01 2018-06-30 0001337619 env:EmployeeAndOtherStockOptionMember 2018-01-01 2018-06-30 0001337619 env:EmployeeAndOtherStockOptionMember 2018-04-01 2018-06-30 0001337619 env:EmployeeAndOtherStockOptionMember 2019-04-01 2019-06-30 0001337619 us-gaap:ConvertibleDebtSecuritiesMember 2018-01-01 2018-06-30 0001337619 srt:MaximumMember 2019-06-30 0001337619 srt:MinimumMember 2019-01-01 2019-06-30 0001337619 srt:MaximumMember 2019-01-01 2019-06-30 0001337619 srt:MinimumMember 2019-06-30 0001337619 us-gaap:OperatingSegmentsMember env:EnvestnetWealthSolutionsMember 2019-04-01 2019-06-30 0001337619 us-gaap:MaterialReconcilingItemsMember 2019-04-01 2019-06-30 0001337619 us-gaap:MaterialReconcilingItemsMember 2018-04-01 2018-06-30 0001337619 us-gaap:OperatingSegmentsMember env:EnvestnetDataandAnalyticsMember 2018-01-01 2018-06-30 0001337619 us-gaap:OperatingSegmentsMember env:EnvestnetWealthSolutionsMember 2019-01-01 2019-06-30 0001337619 us-gaap:OperatingSegmentsMember env:EnvestnetDataandAnalyticsMember 2018-04-01 2018-06-30 0001337619 us-gaap:OperatingSegmentsMember 2018-01-01 2018-06-30 0001337619 us-gaap:OperatingSegmentsMember 2019-04-01 2019-06-30 0001337619 us-gaap:MaterialReconcilingItemsMember 2018-01-01 2018-06-30 0001337619 us-gaap:OperatingSegmentsMember env:EnvestnetWealthSolutionsMember 2018-04-01 2018-06-30 0001337619 us-gaap:MaterialReconcilingItemsMember 2019-01-01 2019-06-30 0001337619 us-gaap:OperatingSegmentsMember 2018-04-01 2018-06-30 0001337619 us-gaap:OperatingSegmentsMember env:EnvestnetDataandAnalyticsMember 2019-04-01 2019-06-30 0001337619 us-gaap:OperatingSegmentsMember env:EnvestnetDataandAnalyticsMember 2019-01-01 2019-06-30 0001337619 us-gaap:OperatingSegmentsMember 2019-01-01 2019-06-30 0001337619 us-gaap:OperatingSegmentsMember env:EnvestnetWealthSolutionsMember 2018-01-01 2018-06-30 0001337619 env:OtherCountryMember 2018-12-31 0001337619 country:US 2019-06-30 0001337619 country:IN 2018-12-31 0001337619 country:US 2018-12-31 0001337619 env:OtherCountryMember 2019-06-30 0001337619 country:IN 2019-06-30 env:state xbrli:shares iso4217:USD iso4217:USD xbrli:shares xbrli:pure env:advisor env:account_product env:proprietary_product env:executive env:investment_product env:segment env:claim


 
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 June 30, 2019
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission file number 001-34835
 
Envestnet, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
20-1409613
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S Employer
Identification No.)
35 East Wacker Drive, Suite 2400
Chicago,
Illinois
 
60601
(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 class
Trading symbol(s)
Name of exchange on which registered
Common Stock, par value $0.005 per share
ENV
New 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 ý  No ¨
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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 filer
ý
 
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. ¨
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes   No ý
 
As of August 1, 2019, Envestnet, Inc. had 52,182,228 shares of common stock outstanding.
 
 




TABLE OF CONTENTS

 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2





Envestnet, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share information)
(unaudited)
 
 
June 30,
 
December 31,
 
 
2019
 
2018
Assets:
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
77,717

 
$
289,345

Fees receivable, net
 
71,632

 
68,004

Prepaid expenses and other current assets
 
40,046

 
23,557

Total current assets
 
189,395


380,906

 
 
 
 
 
Property and equipment, net
 
51,016

 
44,991

Internally developed software, net
 
48,059

 
38,209

Intangible assets, net
 
509,159

 
305,241

Goodwill
 
908,686

 
519,102

Operating lease right-of-use assets, net
 
72,191

 

Other non-current assets
 
33,834

 
25,298

Total assets
 
$
1,812,340


$
1,313,747

 
 
 
 
 
Liabilities and Equity:
 
 
 
 
Current liabilities:
 
 
 
 
Accrued expenses and other liabilities
 
$
118,608

 
$
133,298

Accounts payable
 
15,165

 
19,567

Operating lease liabilities
 
12,918

 

Convertible Notes due 2019
 
169,182

 
165,711

Contingent consideration
 

 
732

Deferred revenue
 
37,601

 
23,988

Total current liabilities
 
353,474


343,296

 
 
 
 
 
Convertible Notes due 2023
 
300,078

 
294,725

Revolving credit facility
 
145,000

 

Contingent consideration
 
16,423

 

Deferred revenue
 
6,659

 
6,910

Non-current operating lease liabilities
 
77,431

 

Deferred rent and lease incentive
 

 
17,569

Deferred tax liabilities, net
 
31,292

 
640

Other non-current liabilities
 
28,193

 
18,005

Total liabilities
 
958,550

 
681,145

 
 
 
 
 
Commitments and contingencies
 


 


 
 
 
 
 
Equity:
 
 
 
 
Stockholders’ equity:
 
 
 
 
Preferred stock, par value $0.005, 50,000,000 shares authorized
 

 

Common stock, par value $0.005, 500,000,000 shares authorized; 65,415,670 and 61,238,898 shares issued as of June 30, 2019 and December 31, 2018, respectively; 52,070,156 and 48,121,800 shares outstanding as of June 30, 2019 and December 31, 2018, respectively
 
327

 
306

Additional paid-in capital
 
1,015,578

 
761,128

Accumulated deficit
 
(76,174
)
 
(58,882
)
Treasury stock at cost, 13,345,514 and 13,117,098 shares as of June 30, 2019 and December 31, 2018, respectively
 
(83,820
)
 
(67,858
)
Accumulated other comprehensive loss
 
(660
)
 
(994
)
Total stockholders’ equity
 
855,251

 
633,700

Non-controlling interest
 
(1,461
)
 
(1,098
)
Total equity
 
853,790

 
632,602

Total liabilities and equity
 
$
1,812,340


$
1,313,747

 
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
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
 
Asset-based
 
$
120,070

 
$
118,111

 
$
229,004

 
$
239,264

Subscription-based
 
92,258

 
71,779

 
175,345

 
141,474

Total recurring revenues
 
212,328


189,890


404,349


380,738

Professional services and other revenues
 
12,117

 
11,226

 
19,762

 
18,389

Total revenues
 
224,445

 
201,116

 
424,111


399,127

 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
Cost of revenues
 
72,080

 
67,627

 
133,725

 
130,561

Compensation and benefits
 
103,286

 
80,210

 
190,003

 
163,750

General and administration
 
42,421

 
34,089

 
82,945

 
66,818

Depreciation and amortization
 
26,915

 
19,185

 
46,432

 
38,731

Total operating expenses
 
244,702


201,111


453,105


399,860

 
 
 
 
 
 
 
 
 
Income (loss) from operations
 
(20,257
)
 
5

 
(28,994
)
 
(733
)
Other expense, net
 
(7,512
)
 
(5,430
)
 
(13,275
)

(10,684
)
Loss before income tax provision (benefit)
 
(27,769
)

(5,425
)

(42,269
)

(11,417
)
 
 
 
 
 
 
 
 
 
Income tax provision (benefit)
 
(28,382
)
 
566

 
(24,614
)
 
(13,428
)
 
 
 
 
 
 
 
 
 
Net income (loss)
 
613

 
(5,991
)
 
(17,655
)

2,011

Add: Net loss attributable to non-controlling interest
 
280

 
465

 
363

 
567

Net income (loss) attributable to Envestnet, Inc.
 
$
893


$
(5,526
)

$
(17,292
)

$
2,578

 
 
 
 
 
 
 
 
 
Net income (loss) per share attributable to Envestnet, Inc.:
 
 
 
 
 
 
 
 
Basic
 
$
0.02

 
$
(0.12
)
 
$
(0.35
)
 
$
0.06

Diluted
 
$
0.02

 
$
(0.12
)
 
$
(0.35
)
 
$
0.05

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
50,870,296

 
45,247,331

 
49,526,774

 
44,963,735

Diluted
 
52,982,688

 
45,247,331

 
49,526,774

 
47,156,205


See accompanying notes to unaudited Condensed Consolidated Financial Statements.

4



Envestnet, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
(unaudited)
 
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2019
 
2018
 
2019
 
2018
Net income (loss) attributable to Envestnet, Inc.
 
$
893

 
$
(5,526
)
 
$
(17,292
)
 
$
2,578

Other comprehensive income (loss), net of taxes:
 
 
 
 
 
 
 
 
Foreign currency translation gain (loss)
 
112

 
(1,036
)
 
334

 
(1,363
)
Comprehensive income (loss) attributable to Envestnet, Inc.
 
$
1,005


$
(6,562
)

$
(16,958
)

$
1,215


See accompanying notes to unaudited Condensed Consolidated Financial Statements.


5



Envestnet, Inc.
Condensed Consolidated Statements of Equity
(in thousands, except share information)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
 
 
Common Stock
 
Treasury Stock
 
Additional
 
Other
 
 
 
Non-
 
 
 
 
 
 
 
 
Common
 
 
 
Paid-in
 
Comprehensive
 
Accumulated
 
controlling
 
Total
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Capital
 
Income (Loss)
 
Deficit
 
Interest
 
Equity
Balance, December 31, 2018
 
61,238,898

 
$
306

 
(13,117,098
)
 
$
(67,858
)
 
$
761,128

 
$
(994
)
 
$
(58,882
)
 
$
(1,098
)
 
$
632,602

Exercise of stock options
 
200,326

 
1

 

 

 
3,162

 

 

 

 
3,163

Issuance of common stock - vesting of restricted stock units
 
479,479

 
2

 

 

 

 

 

 

 
2

Acquisition of business
 
15,755

 

 

 

 
772

 

 

 

 
772

Stock-based compensation expense
 

 

 

 

 
12,864

 

 

 

 
12,864

Purchase of treasury stock for stock-based tax withholdings
 

 

 
(160,456
)
 
(9,819
)
 

 

 

 

 
(9,819
)
Foreign currency translation gain (loss)
 

 

 

 

 

 
222

 

 

 
222

Net income (loss)
 

 

 

 

 

 

 
(18,185
)
 
(83
)
 
(18,268
)
Balance, March 31, 2019
 
61,934,458

 
309

 
(13,277,554
)
 
(77,677
)
 
777,926

 
(772
)
 
(77,067
)
 
(1,181
)
 
621,538

Exercise of stock options
 
114,109

 
1

 

 

 
1,750

 

 

 

 
1,751

Issuance of common stock - vesting of restricted stock units
 
182,390

 
1

 

 

 

 

 

 

 
1

Acquisition of business
 
3,184,713

 
16

 

 

 
222,468

 

 

 

 
222,484

Stock-based compensation expense
 

 

 

 

 
13,434

 

 

 

 
13,434

Purchase of treasury stock for stock-based tax withholdings
 

 

 
(67,960
)
 
(6,143
)
 

 

 

 

 
(6,143
)
Foreign currency translation gain (loss)
 

 

 

 

 

 
112

 

 

 
112

Net income (loss)
 

 

 

 

 

 

 
893

 
(280
)
 
613

Balance, June 30, 2019
 
65,415,670


$
327


(13,345,514
)

$
(83,820
)

$
1,015,578


$
(660
)

$
(76,174
)

$
(1,461
)

$
853,790



See accompanying notes to unaudited Condensed Consolidated Financial Statements.










6




Envestnet, Inc.
Condensed Consolidated Statements of Equity (continued)
(in thousands, except share information)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
 
 
Common Stock
 
Treasury Stock
 
Additional
 
Other
 
 
 
Non-
 
 
 
 
 
 
 
 
Common
 
 
 
Paid-in
 
Comprehensive
 
Accumulated
 
controlling
 
Total
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Capital
 
Income (Loss)
 
Deficit
 
Interest
 
Equity
Balance, December 31, 2017
 
57,450,056

 
$
287

 
(12,749,415
)
 
$
(47,042
)
 
$
556,257

 
$
624

 
$
(73,854
)
 
$
398

 
$
436,670

Adoption of ASC 606
 

 

 

 

 

 

 
9,217

 

 
9,217

Exercise of stock options
 
162,857

 
1

 

 

 
2,403

 

 

 

 
2,404

Issuance of common stock - vesting of restricted stock units
 
503,668

 
2

 

 

 

 

 

 

 
2

Stock-based compensation expense
 

 

 

 

 
8,495

 

 

 

 
8,495

Purchase of treasury stock for stock-based tax withholdings
 

 

 
(166,217
)
 
(9,296
)
 

 

 

 

 
(9,296
)
Issuance of non-controlling units in private company
 

 

 

 

 

 

 

 
873

 
873

Foreign currency translation gain (loss)
 

 

 

 

 

 
(327
)
 

 

 
(327
)
Net income (loss)
 

 

 

 

 

 

 
8,104

 
(102
)
 
8,002

Balance, March 31, 2018
 
58,116,581

 
290

 
(12,915,632
)
 
(56,338
)
 
567,155

 
297

 
(56,533
)
 
1,169

 
456,040

Exercise of stock options
 
12,166

 

 

 

 
136

 

 

 

 
136

Issuance of common stock - vesting of restricted stock units
 
253,279

 
1

 

 

 

 

 

 

 
1

Stock-based compensation expense
 

 

 

 

 
10,476

 

 

 

 
10,476

Purchase of treasury stock for stock-based tax withholdings
 

 

 
(90,800
)
 
(5,099
)
 

 

 

 

 
(5,099
)
Issuance of Convertible Notes due 2023, net of offering costs
 

 

 

 

 
46,611

 

 

 

 
46,611

Foreign currency translation gain (loss)
 

 

 

 

 

 
(1,036
)
 

 

 
(1,036
)
Net income (loss)
 

 

 

 

 

 

 
(5,526
)
 
(465
)
 
(5,991
)
Balance, June 30, 2018
 
58,382,026

 
$
291

 
(13,006,432
)
 
$
(61,437
)
 
$
624,378

 
$
(739
)
 
$
(62,059
)
 
$
704

 
$
501,138



See accompanying notes to unaudited Condensed Consolidated Financial Statements.


7



Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
 
Six Months Ended
 
 
June 30,
 
 
2019
 
2018
OPERATING ACTIVITIES:
 
 
 
 
Net income (loss)
 
$
(17,655
)
 
$
2,011

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
46,432

 
38,731

Deferred rent and lease incentive amortization
 

 
1,069

Provision for doubtful accounts
 
713

 
924

Deferred income taxes
 
(28,991
)
 
(17,093
)
Non-cash based compensation expense
 
27,852

 
18,971

Non-cash interest expense
 
9,896

 
5,630

Accretion on contingent consideration and purchase liability
 
742

 
196

Payments of contingent consideration
 
(578
)
 

Loss allocation from equity method investment
 
550

 
811

Changes in operating assets and liabilities, net of acquisitions:
 
 
 
 
Fees receivable, net
 
(536
)
 
(8,204
)
Prepaid expenses and other current assets
 
(15,507
)
 
(3,426
)
Other non-current assets
 
(3,241
)
 
(2,450
)
Accrued expenses and other liabilities
 
(19,060
)
 
(5,438
)
Accounts payable
 
(4,768
)
 
4,166

Deferred revenue
 
3,940

 
3,478

Other non-current liabilities
 
2,602

 
1,578

Net cash provided by operating activities
 
2,391

 
40,954

 
 
 
 
 
INVESTING ACTIVITIES:
 
 
 
 
Purchases of property and equipment
 
(8,815
)
 
(9,569
)
Capitalization of internally developed software
 
(15,583
)
 
(10,622
)
Acquisitions of businesses, net of cash acquired
 
(321,571
)
 
(188,345
)
Other
 
(2,000
)
 

Net cash used in investing activities
 
(347,969
)
 
(208,536
)
 
 
 
 
 
FINANCING ACTIVITIES:
 
 
 
 
Proceeds from issuance of Convertible Notes due 2023
 

 
345,000

Convertible Notes due 2023 issuance costs
 

 
(9,488
)
Proceeds from borrowings on revolving credit facility
 
175,000

 
195,000

Payments on revolving credit facility
 
(30,000
)
 
(276,168
)
Payments of contingent consideration
 
(171
)
 
(2,193
)
Proceeds from exercise of stock options
 
4,914

 
2,540

Purchase of treasury stock for stock-based tax withholdings
 
(15,962
)
 
(14,395
)
Issuance of restricted stock units
 
3

 
3

Net cash provided by financing activities
 
133,784

 
240,299

 
 
 
 
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
 
166

 
(572
)
 
 
 
 
 
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
 
(211,628
)

72,145

 
 
 
 
 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD
 
289,671

 
62,115

 
 
 
 
 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (See Note 2)
 
$
78,043

 
$
134,260

 
 
 
 
 
Supplemental disclosure of cash flow information - net cash paid during the period for income taxes
 
$
6,121

 
$
2,225

Supplemental disclosure of cash flow information - cash paid during the period for interest
 
5,952

 
4,271

Supplemental disclosure of non-cash operating, investing and financing activities:
 
 
 
 
Common stock issued in acquisition of business
 
222,484

 

Contingent consideration issued in acquisition of businesses
 
15,880

 

Purchase liabilities included in other non-current liabilities
 
5,468

 

Purchase of fixed assets included in accounts payable and accrued expenses and other liabilities
 
1,567

 
1,188

Membership interest liabilities included in other non-current liabilities
 
1,480

 

Common stock issued to settle purchase liability
 
772

 

Leasehold improvements funded by lease incentive
 
648

 
1,080

Purchase liabilities included in accrued expenses and other liabilities
 

 
1,422

 
See accompanying notes to unaudited Condensed Consolidated Financial Statements.

8

Table of Contents
Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(in thousands, except share and per share amounts)


1.
Organization and Description of Business

Envestnet, Inc. (“Envestnet”) and its subsidiaries (collectively, the “Company”) provide intelligent systems for wealth management and financial wellness. Envestnet’s unified technology enhances advisor productivity and strengthens the wealth management process. Through a combination of platform enhancements, partnerships and acquisitions, Envestnet empowers enterprises and advisors to more fully understand their clients and deliver better outcomes.

Envestnet is organized around two primary, complementary business segments. Financial information about each business segment is contained in “Note 18—Segment Information” to the condensed consolidated financial statements. The business segments are as follows:
 
Envestnet Wealth Solutions – a leading provider of unified wealth management software and services to empower financial advisors and institutions.

Within Envestnet Wealth Solutions, the Company offers these solutions principally through the following products and services suites:

Envestnet | Enterprise provides an end-to-end open architecture wealth management platform, through which advisors can construct portfolios for clients. It begins with aggregated household data which then leads to the creation of a financial plan, asset allocation, investment strategy, portfolio management, rebalancing and performance reporting.  Advisors have access to over 19,900 investment products. Envestnet | Enterprise also offers data aggregation and reporting, data analytics and digital advice capabilities to customers.

Envestnet | Tamarac provides leading trading, rebalancing, portfolio accounting, performance reporting and client relationship management software, principally to high‑end registered investment advisers (“RIAs”).

Envestnet | MoneyGuide provides leading goals-based financial planning solutions to the financial services industry. The highly adaptable software helps financial advisors add significant value for their clients using best-in-class technology with enhanced integrations to generate financial plans.

Envestnet | Retirement Solutions (“ERS”) offers a comprehensive suite of services for advisor-sold retirement plans. Leveraging integrated technology, ERS addresses the regulatory, data and investment needs of retirement plans and delivers the information holistically.

Envestnet | PMC® or Portfolio Management Consultants (“PMC”) provides research and consulting services to assist advisors in creating investment solutions for their clients. These solutions include over 4,500 vetted third party managed account products, multi-manager portfolios, fund strategist portfolios, as well as over 1,000 proprietary products, such as quantitative portfolios and fund strategist portfolios. PMC also offers portfolio overlay and tax optimization services.

Envestnet Data & Analytics – a leading data aggregation and data intelligence platform powering dynamic, cloud-based innovation for digital financial services, and includes product offerings from Envestnet | Yodlee and Envestnet | Analytics.

Envestnet operates four RIAs and a registered broker-dealer. The RIAs are registered with the Securities and Exchange Commission (“SEC”). The broker-dealer is registered with the SEC, all 50 states and the District of Columbia and is a member of the Financial Industry Regulatory Authority (“FINRA”).

2.
Basis of Presentation
 
The accompanying unaudited condensed consolidated financial statements of the Company as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 have not been audited by an independent registered public accounting firm. These unaudited condensed consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the year ended December 31, 2018 and reflect all normal recurring adjustments which are,

9

Table of Contents
Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)

in the opinion of management, necessary to present fairly the Company’s financial position as of June 30, 2019 and the results of operations, equity, comprehensive income (loss) and cash flows for the periods presented herein. The unaudited condensed consolidated financial statements include the accounts of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. Accounts for the Envestnet Wealth Solutions segment that are denominated in a non-U.S. currency have been re-measured using the U.S. dollar as the functional currency. Certain accounts within the Envestnet Data & Analytics segment are recorded and measured in foreign currencies. The assets and liabilities for those subsidiaries with a functional currency other than the U.S. dollar are translated at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates. Differences arising from these foreign currency translations are recorded in the unaudited condensed consolidated balance sheets as accumulated other comprehensive income (loss) within stockholders' equity.

The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the operating results to be expected for other interim periods or for the full fiscal year.

The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 1, 2019.
 
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates.
 
The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported within the condensed consolidated statements of cash flows:
 
 
June 30,
 
December 31,
 
 
2019
 
2018
Cash and cash equivalents
 
$
77,717

 
$
289,345

Restricted cash included in prepaid expenses and other current assets
 
158

 
158

Restricted cash included in other non-current assets
 
168

 
168

Total cash, cash equivalents and restricted cash
 
$
78,043

 
$
289,671


 
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements—In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases,” which amends the requirements for assets and liabilities recognized for all leases longer than twelve months. This standard is effective for financial statements issued by public companies for the annual and interim periods beginning after December 15, 2018. These changes became effective for the Company’s fiscal year beginning January 1, 2019 and have been reflected in these condensed consolidated financial statements (See “Note 17—Leases”).
In June 2018, the FASB issued ASU 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting.” This update clarifies the accounting for share-based payment transactions for acquiring goods and services from non-employees. Specifically, the update aligns the accounting for payments to non-employees to match the accounting for payments to employees, no longer accounting for these transactions differently. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2018. These changes became effective for the Company's fiscal year beginning January 1, 2019. This standard will be applied prospectively to all future non-employee share-based payments and is reflected in these condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force).” This update is intended to guide entities in evaluating the

10

Table of Contents
Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)

accounting for fees paid by a customer in a cloud computing arrangement by providing guidance for determining when the arrangement includes a software license. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2019. Early adoption of the standard is permitted. The Company early adopted this standard beginning January 1, 2019, noting that this standard will be applied prospectively. Adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements.
Not Yet Adopted—In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326).” This update significantly changes the way that entities will be required to measure credit losses. The new standard requires entities to estimate credit losses based upon an “expected credit loss” approach rather than the “incurred loss” approach, which is currently used. The new approach will require entities to measure all expected credit losses for financial assets based on historical experience, current conditions, and reasonable forecasts of collectability. The change in approach is anticipated to impact the timing of recognition of credit losses. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2019. Early adoption of the standard is permitted. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” This update aims to improve the effectiveness of disclosure requirements on fair value measurement as part of the disclosure framework project. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2019. Early adoption of the standard is permitted. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements. 

3.
Business Acquisitions

Acquisition of private company

On January 2, 2019, pursuant to an agreement and plan of merger dated as of January 2, 2019 between Envestnet and a private company, the private company merged into Yodlee Inc., a wholly owned subsidiary of the Company (the “Private Company Acquisition”). The private company provides conversational artificial intelligence tools and applications to financial services firms, improves the way Financial Service Providers (“FSPs”) can interact with their customers, and supports these FSPs to better engage, support and assist their consumers leveraging this latest wave of customer-centric capabilities.

The technology and operations of the private company is included in the Company’s Envestnet Data & Analytics segment.

The seller of the private company is also entitled to an earn-out payment based on the private company's revenue and other retention targets for the twelve-month period beginning January 1, 2021. The discounted amount of the contingent consideration liability is estimated to be $7,580 and is included as a long-term liability on the condensed consolidated balance sheets.

The consideration transferred in the acquisition was as follows:
 
 
Preliminary Estimate
Cash consideration
 
$
11,173

Purchase consideration liability
 
6,240

Contingent consideration liability
 
7,580

Working capital adjustment
 
70

Total
 
$
25,063



The estimated fair values of the deferred income taxes, identifiable intangible assets, contingent consideration liability, and goodwill balances are provisional and based on information that was available to the Company as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation and other studies and are in progress and not yet at the point where there is sufficient information for a definitive measurement. The Company believes the preliminary information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information

11

Table of Contents
Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)

necessary to finalize those fair values. Therefore, provisional measurements of fair values reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation of tangible assets acquired, liabilities assumed, identifiable intangible assets and goodwill balances and complete the acquisition accounting as soon as reasonably practicable but no later than January 2, 2020.

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

 
 
Preliminary Estimate
Total tangible assets acquired
 
$
144

Total liabilities assumed
 
(629
)
Identifiable intangible assets
 
4,100

Goodwill
 
21,448

Total net assets acquired
 
$
25,063



The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, primarily related to an increase in future revenues as a result of potential cross selling opportunities. The goodwill is not deductible for income tax purposes.

A summary of estimated intangible assets acquired, estimated useful lives and amortization method is as follows:
 
 
Preliminary Estimate
 
Estimated Useful Life in Years
 
Amortization Method
Proprietary technology
 
$
4,100

 
4
 
Straight-line


The results of the private company's operations are included in the condensed consolidated statements of operations beginning January 2, 2019 and were not considered material to the Company’s results of operations. 

For the three and six months ended June 30, 2019, acquisition related costs for the Private Company Acquisition were not material, and are included in general and administration expenses. The Company may incur additional acquisition related costs over the remainder of 2019.

Acquisition of PortfolioCenter business

On April 1, 2019, pursuant to an asset purchase agreement, Tamarac, Inc. (“Tamarac”), a wholly owned subsidiary of Envestnet, acquired certain of the assets, primarily consisting of intangible assets, and the assumption of certain of the liabilities of the PortfolioCenter business from Performance Technologies, Inc. (the “PC Seller”), a wholly owned subsidiary of The Charles Schwab Corporation. The PortfolioCenter Business provides investment advisors and investment advisory service providers with desktop, hosted and outsourced multicustodial software solutions. These solutions provide data-management and performance-measurement tools, as well as customizable accounting, reporting, and billing functions delivered through the commercial software application products known as PortfolioCenter Desktop, PortfolioCenter Hosted, PortfolioServices and Service Bureau.
Tamarac acquired the PortfolioCenter Business to better serve small and mid-size RIA firms. The PortfolioCenter Business is included in the Company’s Envestnet Wealth Solutions segment.
In connection with the PortfolioCenter Acquisition, Tamarac paid $17,500 in cash. Tamarac funded the PortfolioCenter Acquisition with available cash resources. The PC Seller is also entitled to an earn-out payment based on the PortfolioCenter Business’ revenue for the twelve-month period beginning April 1, 2020. The discounted amount of the contingent consideration liability is estimated to be $8,300.

12

Table of Contents
Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)

The preliminary consideration transferred in the acquisition was as follows:
 
 
Preliminary Estimate
Cash consideration
 
$
17,500

Contingent consideration liability
 
8,300

Total
 
$
25,800


The estimated fair values of the deferred income taxes, identifiable intangible assets, contingent consideration liability and goodwill balances are provisional and based on the information that was available to the Company as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation and other studies and are in progress and not yet at the point where there is sufficient infor