Quarterly report pursuant to Section 13 or 15(d)

Revenue and Direct Expense

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Revenue and Direct Expense
 6 Months Ended
Jun. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue and Direct Expense Revenue and Direct Expense
Disaggregation of Revenue
 
The following table presents the Company’s revenue by segment disaggregated by major source:

  Three Months Ended June 30,
  2024 2023
  Envestnet Wealth Solutions Envestnet Data & Analytics Total Envestnet Wealth Solutions Envestnet Data & Analytics Total
(in thousands)
Revenue:            
Asset-based $ 219,485  $ —  $ 219,485  $ 185,762  $ —  $ 185,762 
Subscription-based 84,734  33,254  117,988  79,744  35,215  114,959 
Total recurring revenue 304,219  33,254  337,473  265,506  35,215  300,721 
Professional services and other revenue 7,889  2,911  10,800  10,318  1,395  11,713 
Total revenue $ 312,108  $ 36,165  $ 348,273  $ 275,824  $ 36,610  $ 312,434 

  Six Months Ended June 30,
  2024 2023
  Envestnet Wealth Solutions Envestnet Data & Analytics Total Envestnet Wealth Solutions Envestnet Data & Analytics Total
(in thousands)
Revenue:            
Asset-based $ 422,101  $ —  $ 422,101  $ 362,694  $ —  $ 362,694 
Subscription-based 168,902  66,548  235,450  160,214  71,824  232,038 
Total recurring revenue 591,003  66,548  657,551  522,908  71,824  594,732 
Professional services and other revenue 10,915  4,757  15,672  13,565  2,844  16,409 
Total revenue $ 601,918  $ 71,305  $ 673,223  $ 536,473  $ 74,668  $ 611,141 

The following table presents the Company’s revenue disaggregated by geography, based on the billing address of the customer:

  Three Months Ended Six Months Ended
  June 30, June 30,
  2024 2023 2024 2023
(in thousands)
United States $ 342,749  $ 306,946  $ 662,320  $ 600,160 
International 5,524  5,488  10,903  10,981 
Total revenue $ 348,273  $ 312,434  $ 673,223  $ 611,141 

Remaining Performance Obligations
 
As of June 30, 2024, the Company's estimated revenue expected to be recognized in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied is approximately $546.9 million. The Company expects to recognize approximately 22% of this revenue during the remainder of 2024, approximately 56% throughout 2025 and 2026, with the balance recognized thereafter. These remaining performance obligations are not indicative of revenue for future periods.
Contract Balances

Total deferred revenue as of June 30, 2024 decreased by $4.0 million from December 31, 2023, primarily the result of timing of cash receipts and revenue recognition. The majority of the Company's deferred revenue as of June 30, 2024 will be recognized over the course of the next twelve months.

The amount of revenue recognized for the three months ended June 30, 2024 and 2023 that was included in the opening deferred revenue balance was $8.0 million and $11.5 million, respectively. The amount of revenue recognized for the six months ended June 30, 2024 and 2023 that was included in the opening deferred revenue balance was $23.9 million and $28.2 million, 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 $10.5 million and $11.5 million as of June 30, 2024 and December 31, 2023, respectively. Amortization expense for deferred sales incentive compensation was $1.2 million for the three months ended June 30, 2024 and 2023. Amortization expense for deferred sales incentive compensation was $2.4 million and $2.3 million for the six months ended June 30, 2024 and 2023, respectively. Deferred sales incentive compensation is included in other assets in the condensed consolidated balance sheets and amortization expense is included in employee compensation expense in the condensed consolidated statements of operations. No significant impairment loss for capitalized costs was recorded during the six months ended June 30, 2024 and 2023.

Direct Expense

The following table summarizes direct expense by revenue category:

  Three Months Ended Six Months Ended
  June 30, June 30,
  2024 2023 2024 2023
(in thousands)
Asset-based $ 130,116  $ 108,532  $ 248,519  $ 211,155 
Subscription-based 8,648  7,645  16,878  14,697 
Professional services and other 5,587  8,032  5,587  8,036 
Total direct expense $ 144,351  $ 124,209  $ 270,984  $ 233,888