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, 2021

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, if dilutive.

Prior to January 1, 2021, the Company accounted for the effect of its convertible notes 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 had no effect on diluted net income per share until the Company’s stock price exceeded the conversion price of $68.31 per share and $106.74 per share, respectively, and certain other criteria were met, or if the trading price of the convertible notes met certain criteria. Pursuant to the adoption of ASU 2020-06 on January 1, 2021, the Company now accounts for the effect of its convertible notes on diluted net income per share using the if-converted method (See “Note 2—Summary of Significant Accounting Policies” and “Note 10—Debt”).

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,
	2021		2020		2019
	(in thousands, except share and per share amounts)
Net income (loss) attributable to Envestnet, Inc. (a)	$	13,296	$	(3,110)	$	(16,782)

Weighted-average common shares outstanding:
Basic (b)	54,470,975		53,589,232		50,937,919
Effect of dilutive shares:
Options to purchase common stock	206,022		—		—
Unvested restricted stock units	633,384		—		—

Warrants	73,715		—		—
Diluted (c)	55,384,096		53,589,232		50,937,919

Net income (loss) per share attributable to Envestnet, Inc common stock:
Basic (a/b)	$	0.24	$	(0.06)	$	(0.33)
Diluted (a/c)	$	0.24	$	(0.06)	$	(0.33)

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


	December 31,
	2021	2020	2019
	(in thousands)
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	9,898,549	5,050,505
Warrants	—	470,000	470,000
Total anti-dilutive securities	9,898,549	12,454,733	8,244,079

(1)From 2019 to 2020, this amount increased by 4.8 million potential common shares due to the Convertible Notes due 2025 (See “Note 10—Debt”).