Quarterly report pursuant to Section 13 or 15(d)

Revenues and Cost of Revenues

v3.21.2
Revenues and Cost of Revenues
 6 Months Ended
Jun. 30, 2021
Revenue from Contract with Customer [Abstract]  
Revenues and Cost of Revenues Revenues and Cost of Revenues
Disaggregation of Revenue
 
The following table presents the Company’s revenues disaggregated by major source:

Three Months Ended June 30,
2021 2020
Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated
(in thousands)
Revenues:
Asset-based $ 170,075  $ —  $ 170,075  $ 122,246  $ —  $ 122,246 
Subscription-based 66,663  45,841  112,504  61,410  43,569  104,979 
Total recurring revenues 236,738  45,841  282,579  183,656  43,569  227,225 
Professional services and other revenues 3,559  2,600  6,159  4,029  4,059  8,088 
Total revenues $ 240,297  $ 48,441  $ 288,738  $ 187,685  $ 47,628  $ 235,313 

  Six Months Ended June 30,
  2021 2020
  Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated Envestnet Wealth Solutions Envestnet Data & Analytics Consolidated
(in thousands)
Revenues:            
Asset-based $ 329,450  $ —  $ 329,450  $ 257,057  $ —  $ 257,057 
Subscription-based 130,675  91,658  222,333  121,733  87,797  209,530 
Total recurring revenues 460,125  91,658  551,783  378,790  87,797  466,587 
Professional services and other revenues 6,582  5,478  12,060  7,315  7,950  15,265 
Total revenues $ 466,707  $ 97,136  $ 563,843  $ 386,105  $ 95,747  $ 481,852 

One customer accounted for more than 10% of the Company’s total revenues:

  Three Months Ended Six Months Ended
  June 30, June 30,
  2021 2020 2021 2020
Fidelity 17  % 15  % 16  % 15  %
 
One customer accounted for more than 10% of the Envestnet Wealth Solutions segment’s revenues:

  Three Months Ended Six Months Ended
  June 30, June 30,
  2021 2020 2021 2020
Fidelity 21  % 18  % 20  % 18  %

No single customer accounted for over 10% of the Envestnet Data & Analytics segment’s revenue for any period presented.

The following table presents the Company’s revenues disaggregated by geography, based on the billing address of the customer:
  Three Months Ended Six Months Ended
  June 30, June 30,
  2021 2020 2021 2020
(in thousands)
United States $ 283,589  $ 230,102  $ 553,661  $ 470,554 
International 5,149  5,211  10,182  11,298 
Total revenues $ 288,738  $ 235,313  $ 563,843  $ 481,852 

Remaining Performance Obligations
 
The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2021: 
Years ending December 31, (in thousands)
Remainder of 2021 $ 136,052 
2022 204,602 
2023 124,747 
2024 65,749 
2025 34,779 
Thereafter 14,374 
Total $ 580,303 

Only fixed consideration from significant contracts with customers is included in the amounts presented above.

The Company has applied the practical expedients and exemption and therefore does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less; (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed; and (iii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligations or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation.

Contract Balances

Total deferred revenue as of June 30, 2021 increased by $2.9 million during the six months ended June 30, 2021, primarily the result of revenue growth, timing of cash receipts and revenue recognition. The majority of the Company's deferred revenue will be recognized over the course of the next twelve months.

The amount of revenue recognized that was included in the opening deferred revenue balance was $9.5 million and $10.4 million for the three months ended June 30, 2021 and 2020, respectively. The amount of revenue recognized that was included in the opening deferred revenue balance was $26.3 million and $25.8 million for the six months ended June 30, 2021 and 2020, respectively. The majority of this revenue consists of subscription-based services and professional services arrangements. The amount of revenue recognized from performance obligations satisfied in prior periods was not material.
Deferred Sales Incentive Compensation

Deferred sales incentive compensation was $11.1 million and $10.8 million as of June 30, 2021 and December 31, 2020, respectively. Amortization expense for the deferred sales incentive compensation was $1.1 million and $1.0 million for the three months ended June 30, 2021 and 2020, respectively. Amortization expense for the deferred sales incentive compensation was $2.1 million for both the six months ended June 30, 2021 and 2020, respectively. Deferred sales incentive compensation is included in other non-current assets on the condensed consolidated balance sheets and amortization expense is included in compensation and benefits expenses on the condensed consolidated statements of operations. No significant impairment loss for capitalized costs was recorded during the periods.

The Company has applied the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in compensation and benefits expenses in the condensed consolidated statements of operations.

Cost of Revenues

The following table summarizes cost of revenues by revenue category:
  Three Months Ended Six Months Ended
  June 30, June 30,
  2021 2020 2021 2020
(in thousands)
Asset-based $ 93,341  $ 61,875  $ 179,531  $ 130,467 
Subscription-based 7,027  6,807  13,631  13,084 
Professional services and other 126  167  201  231 
Total cost of revenues $ 100,494  $ 68,849  $ 193,363  $ 143,782