Envestnet, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Net Income (Loss) Per Share

Net Income (Loss) Per Share

12 Months Ended

Dec. 31, 2019

Basic net income (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding for the period. For the calculation of diluted net income (loss) per share, the basic weighted average number of shares is increased by the dilutive effect of stock options, common warrants, restricted stock awards, restricted stock units and Convertible Notes using the treasury stock method, if dilutive.

The Company accounts for the effect of its convertible notes (See “Note 9—Debt”) on diluted net income (loss) per share using the treasury stock method since they may be settled in cash, shares or a combination thereof at the Company’s option. As a result, the Convertible Notes due 2019 and Convertible Notes due 2023 have no effect on diluted net income (loss) per share until certain criteria are met, including the Company’s stock price exceeding the conversion price of $62.88 and $68.31 per share, respectively, or if the trading price of the convertible notes meets certain criteria. In the period of conversion, the convertible notes will have no impact on diluted net income (loss) per share if they are settled in cash and will have an impact on dilutive net income (loss) per share if they are settled in shares upon conversion. The Convertible Notes due 2019 were settled in cash upon maturity.

The following table provides the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to Envestnet, Inc.:



	Year Ended December 31,
	2019			2018		2017
Basic income (loss) per share calculation:
Net income (loss) attributable to Envestnet, Inc.	$	(16,782	)	$	5,755	$	(3,280	)

Basic number of weighted-average shares outstanding	50,937,919			45,268,002		43,732,148
Basic net income (loss) per share	$	(0.33	)	$	0.13	$	(0.08	)

Diluted income (loss) per share calculation:
Net income (loss) attributable to Envestnet, Inc.	$	(16,782	)	$	5,755	$	(3,280	)

Basic number of weighted-average shares outstanding	50,937,919			45,268,002		43,732,148
Effect of dilutive shares:
Options to purchase common stock	—			1,304,493		—
Unvested restricted stock units	—			811,590		—
Convertible Notes	—			—		—
Warrants	—			—		—
Diluted number of weighted-average shares outstanding	50,937,919			47,384,085		43,732,148
Diluted net income (loss) per share	$	(0.33	)	$	0.12	$	(0.08	)

Securities that were anti-dilutive and therefore excluded from the computation of diluted net income (loss) per share are as follows:



	December 31,
	2019	2018	2017
Options to purchase common stock	1,150,586	—	2,254,565
Unvested restricted stock units and awards	1,572,988	—	1,766,639
Convertible Notes ⁽¹⁾	5,050,505	7,793,826	2,743,321
Warrants	470,000	470,000	—
Total anti-dilutive securities	8,244,079	8,263,826	6,764,525

(1)

For 2019, this amount does not include 2,743,321 of potential common shares related to the Convertible Notes due 2019 as they were settled in cash at maturity in December 2019.