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, 2020

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 10—Debt”) on diluted net income 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 2023 and Convertible Notes due 2025 have no effect on diluted net income per share until the Company’s stock price exceeds the conversion price of $68.31 per share and $106.74 per share, respectively, and certain other criteria are met, 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 per share if they are settled in cash and will have an impact on dilutive net income per share if they are settled in shares upon conversion. See “Note 2—Summary of Significant Accounting Policies” for information regarding the adoption of ASU 2020-06.

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,
	2020		2019		2018
Basic income (loss) per share calculation:
Net income (loss) attributable to Envestnet, Inc.	$	(3,110)	$	(16,782)	$	5,755

Basic number of weighted-average shares outstanding	53,589,232		50,937,919		45,268,002
Basic net income (loss) per share	$	(0.06)	$	(0.33)	$	0.13

Diluted income (loss) per share calculation:
Net income (loss) attributable to Envestnet, Inc.	$	(3,110)	$	(16,782)	$	5,755

Basic number of weighted-average shares outstanding	53,589,232		50,937,919		45,268,002
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	53,589,232		50,937,919		47,384,085
Diluted net income (loss) per share	$	(0.06)	$	(0.33)	$	0.12

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


	December 31,
	2020	2019	2018
Options to purchase common stock	438,040	1,150,586	—
Unvested RSU's and PSU's	1,648,144	1,572,988	—
Convertible Notes (1)	9,898,549	5,050,505	7,793,826
Warrants	470,000	470,000	470,000
Total anti-dilutive securities	12,454,733	8,244,079	8,263,826

(1)For 2020, this amount includes 4,848,044 of additional potential common shares related to the Convertible Notes due 2025 which were issued in August 2020 (See “Note 10—Debt”). 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.