Quarterly report pursuant to Section 13 or 15(d)

Revenue

v3.19.2
Revenue
6 Months Ended
Jun. 30, 2019
Revenue from Contract with Customer [Abstract]  
Revenue
Revenue

Disaggregation of revenue
 
The following table presents the Company’s revenues disaggregated by major source:
 
 
Three Months Ended June 30,
 
 
2019
 
2018
 
 
Envestnet Wealth Solutions
 
Envestnet Data & Analytics
 
Consolidated
 
Envestnet Wealth Solutions
 
Envestnet Data & Analytics
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Asset-based
 
$
120,070

 
$

 
$
120,070

 
$
118,111

 
$

 
$
118,111

Subscription-based
 
50,078

 
42,180

 
92,258

 
33,023

 
38,756

 
71,779

Total recurring revenues
 
170,148

 
42,180

 
212,328

 
151,134

 
38,756

 
189,890

Professional services and other revenues
 
6,742

 
5,375

 
12,117

 
5,794

 
5,432

 
11,226

Total revenues
 
$
176,890

 
$
47,555

 
$
224,445

 
$
156,928

 
$
44,188

 
$
201,116

 
 
 
Six Months Ended June 30,
 
 
2019
 
2018
 
 
Envestnet Wealth Solutions
 
Envestnet Data & Analytics
 
Consolidated
 
Envestnet Wealth Solutions
 
Envestnet Data & Analytics
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Asset-based
 
$
229,004

 
$

 
$
229,004

 
$
239,264

 
$

 
$
239,264

Subscription-based
 
91,104

 
84,241

 
175,345

 
65,608

 
75,866

 
141,474

Total recurring revenues
 
320,108

 
84,241

 
404,349

 
304,872

 
75,866

 
380,738

Professional services and other revenues
 
9,487

 
10,275

 
19,762

 
8,044

 
10,345

 
18,389

Total revenues
 
$
329,595

 
$
94,516

 
$
424,111

 
$
312,916

 
$
86,211

 
$
399,127



One customer accounted for more than 10% of the Company’s total revenues:
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2019
 
2018
 
2019
 
2018
Fidelity
 
15
%
 
16
%
 
15
%
 
16
%

 
Fidelity accounted for 19% and 20% of Envestnet Wealth Solutions revenues for the three and six months ended June 30, 2019, respectively. Fidelity accounted for 21% and 21% of Envestnet Wealth Solutions revenues for the three and six months ended June 30, 2018, respectively.

No single customer amounts for Envestnet Data & Analytics exceeded 10% of the segment total 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,
 
 
2019
 
2018
 
2019
 
2018
United States
 
$
217,462

 
$
193,237

 
$
409,581

 
$
381,552

International (1)
 
6,983

 
7,879

 
14,530

 
17,575

Total
 
$
224,445

 
$
201,116

 
$
424,111

 
$
399,127

(1)
No foreign country accounted for more than 10% of the Company's total revenues.

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, 2019:
 
Years ending December 31,
 
 

Remainder of 2019
 
$
122,303

2020
 
171,252

2021
 
106,389

2022
 
70,046

2023
 
32,354

Thereafter
 
41,237

Total
 
$
543,581



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, 2019 increased by $13,362, which is primarily the result of the PIEtech and PortfolioCenter acquisitions and an increase in deferred revenue related to subscription-based services during the six months ended June 30, 2019, the majority of which 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 $6,865 and $5,737 for the three months ended June 30, 2019 and 2018, respectively. The amount of revenue recognized that was included in the opening deferred revenue balance was $16,588 and $13,253 for the six months ended June 30, 2019 and 2018, 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 $9,598 and $7,014 as of June 30, 2019 and December 31, 2018, respectively. Amortization expense for the deferred sales incentive compensation was $753 and $536 for the three months ended June 30, 2019, and 2018, respectively. Amortization expense for the deferred sales incentive compensation was $1,404 and $1,018 for the six months ended June 30, 2019, and 2018, respectively. No significant impairment loss for capitalized costs was recorded during the period.

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 on the condensed consolidated statements of operations.