Quarterly report pursuant to Section 13 or 15(d)

Net Income (Loss) Per Share

v3.10.0.1
Net Income (Loss) Per Share
 9 Months Ended
Sep. 30, 2018
Earnings Per Share [Abstract]  
Net Income (Loss) Per Share
Net Income (Loss) Per Share
 
Basic income (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding for the period. For the calculation of diluted income (loss) per share, the basic weighted average number of shares is increased by the dilutive effect of stock options, restricted stock awards, restricted stock units and Convertible Notes due 2019 and 2023 (collectively “Convertible Notes”) using the treasury stock method, if dilutive. No items were included in the computation of diluted loss per share in the three and nine months ended September 30, 2017 because the Company incurred a net loss attributable to Envestnet, Inc. in those periods and therefore these items were considered anti-dilutive.
 
The Company accounts for the effect of the Convertible Notes on diluted earnings per share using the treasury stock method since they may be settled in cash, shares or a combination thereof at the Company’s option. As a result, the Convertible Notes have no effect on diluted earnings per share until the Company’s stock price exceeds the conversion price of $62.88 and $68.31 per share, respectively, or if the trading price of the Convertible Notes meets certain criteria (See “Note 12 – Debt” in Part II, Item 8 of our 2017 Form 10-K and “Note 12 – Debt” in this Form 10-Q). In the period of conversion, the Convertible Notes will have no impact on diluted earnings if the Convertible Notes are settled in cash and will have an impact on dilutive earnings per share if the Convertible Notes are settled in shares upon conversion.
 
The following table provides the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to Envestnet, Inc.:
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2018
 
2017
 
2018
 
2017
Basic income (loss) per share calculation:
 
 
 
 
 
 
 
 
Net income (loss) attributable to Envestnet, Inc.
 
$
2,954

 
$
(1,320
)
 
$
5,532

 
$
(20,925
)
 
 
 
 
 
 
 
 
 
Basic number of weighted-average shares outstanding
 
45,475,884

 
44,044,527

 
45,087,932

 
43,604,869

Basic net income (loss) per share
 
$
0.06

 
$
(0.03
)
 
$
0.12

 
$
(0.48
)
 
 
 
 
 
 
 
 
 
Diluted income (loss) per share calculation:
 
 
 
 
 
 
 
 
Net income (loss) attributable to Envestnet, Inc.
 
$
2,954

 
$
(1,320
)
 
$
5,532

 
$
(20,925
)
 
 
 
 
 
 
 
 
 
Basic number of weighted-average shares outstanding
 
45,475,884

 
44,044,527

 
45,087,932

 
43,604,869

Effect of dilutive shares:
 
 
 
 
 
 
 
 
Options to purchase common stock
 
1,323,712

 
—

 
1,348,699

 
—

Unvested restricted stock units
 
719,564

 
—

 
832,848

 
—

Diluted number of weighted-average shares outstanding
 
47,519,160

 
44,044,527

 
47,269,479

 
43,604,869

Diluted net income (loss) per share
 
$
0.06

 
$
(0.03
)
 
$
0.12

 
$
(0.48
)

 
Securities that were anti-dilutive for the three and nine months ended September 30, 2018 and 2017 were as follows:
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2018
 
2017
 
2018
 
2017
Options to purchase common stock
 
—

 
2,667,329

 
—

 
2,667,329

Unvested restricted stock awards and units
 
—

 
1,901,080

 
—

 
1,901,080

Convertible Notes
 
7,793,826

 
2,743,321

 
7,793,826

 
2,743,321

Total
 
7,793,826


7,311,730


7,793,826


7,311,730