Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets, Net

v3.22.4
Goodwill and Intangible Assets, Net
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, Net Goodwill and Intangible Assets, Net
 
Changes in the carrying amount of goodwill were as follows:

  Envestnet
Wealth Solutions		 Envestnet
Data & Analytics		 Total
(in thousands)
Balance at December 31, 2020 $ 603,350  $ 303,423  $ 906,773 
Harvest acquisition 18,526  —  18,526 
Foreign currency translation —  (145) (145)
Balance at December 31, 2021 621,876  303,278  925,154 
401kplans.com acquisition 11,396  —  11,396 
Truelytics acquisition —  16,217  16,217 
Redi2 acquisition 46,467  —  46,467 
Foreign currency translation —  (820) (820)
Balance at December 31, 2022 $ 679,739  $ 318,675  $ 998,414 
 
Procurement of Technology Solutions

On June 21, 2021, the Company entered into a purchase agreement with a privately held company to acquire the technology solutions being developed by this privately held company for a purchase price of $18.0 million, including an advance of $3.0 million. The Company closed the transaction and paid the remaining $15.0 million in February 2022. This proprietary technology asset has been integrated into the Envestnet Data & Analytics segment and is being amortized over an estimated useful life of five years. In addition, the agreement included an earn-out payment of $10.0 million based upon the achievement of certain target metrics within five years after the date of the Company’s launch of the technology solutions. The parties have agreed to renegotiate the terms of the earn-out payment.

Intangible assets, net consisted of the following:

  December 31, 2022 December 31, 2021
  Gross   Net Gross   Net
  Carrying Accumulated Carrying Carrying Accumulated Carrying
  Amount Amortization Amount Amount Amortization Amount
(in thousands)
Customer lists $ 604,080  $ (285,288) $ 318,792  $ 590,080  $ (241,189) $ 348,891 
Proprietary technologies 113,224  (59,401) 53,823  85,324  (43,004) 42,320 
Trade names 15,700  (8,320) 7,380  33,700  (24,515) 9,185 
Total intangible assets $ 733,004  $ (353,009) $ 379,995  $ 709,104  $ (308,708) $ 400,396 
 
During 2022, the Company had no retirements of intangible assets for the Envestnet Wealth Solutions segment. During 2021, the Company retired fully amortized intangible assets for the Envestnet Wealth Solutions segment with an historical cost of $5.0 million, including proprietary technologies and customer lists. During 2022, the Company had $27.6 million retirements of fully amortized intangible assets, including trade names and proprietary technologies for the Envestnet Data & Analytics segment. During 2021, the Company had no retirements of intangible assets for the Envestnet Data & Analytics segment.
 
Amortization expense was as follows:

  Year Ended December 31,
  2022 2021 2020
(in thousands)
Amortization expense $ 71,901  $ 68,587  $ 73,559 
 
Future amortization expense of the Company's intangible assets as of December 31, 2022, is expected to be as follows:

Amortization Expense
(in thousands)
Years ending December 31:
2023 $ 60,087 
2024 53,240 
2025 49,900 
2026 41,997 
2027 33,432 
Thereafter 141,339 
Total $ 379,995