Quarterly report pursuant to Section 13 or 15(d)

Revenue

v3.19.3
Revenue
9 Months Ended
Sep. 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 September 30,
 
 
2019
 
2018
 
 
Envestnet Wealth Solutions
 
Envestnet Data & Analytics
 
Consolidated
 
Envestnet Wealth Solutions
 
Envestnet Data & Analytics
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Asset-based
 
$
126,591

 
$

 
$
126,591

 
$
119,097

 
$

 
$
119,097

Subscription-based
 
57,353

 
43,230

 
100,583

 
36,228

 
39,966

 
76,194

Total recurring revenues
 
183,944

 
43,230

 
227,174

 
155,325

 
39,966

 
195,291

Professional services and other revenues
 
4,280

 
4,626

 
8,906

 
2,142

 
5,723

 
7,865

Total revenues
 
$
188,224

 
$
47,856

 
$
236,080

 
$
157,467

 
$
45,689

 
$
203,156

 
 
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
 
Envestnet Wealth Solutions
 
Envestnet Data & Analytics
 
Consolidated
 
Envestnet Wealth Solutions
 
Envestnet Data & Analytics
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Asset-based
 
$
355,595

 
$

 
$
355,595

 
$
358,361

 
$

 
$
358,361

Subscription-based
 
148,457

 
127,471

 
275,928

 
101,836

 
115,832

 
217,668

Total recurring revenues
 
504,052

 
127,471

 
631,523

 
460,197

 
115,832

 
576,029

Professional services and other revenues
 
13,767

 
14,901

 
28,668

 
10,186

 
16,068

 
26,254

Total revenues
 
$
517,819

 
$
142,372

 
$
660,191

 
$
470,383

 
$
131,900

 
$
602,283



One customer accounted for more than 10% of the Company’s total revenues:
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
Fidelity
 
15
%
 
17
%
 
15
%
 
17
%

 
Fidelity accounted for 19% of the Envestnet Wealth Solutions segment's revenues for the three and nine months ended September 30, 2019, respectively. Fidelity accounted for 21% of the Envestnet Wealth Solutions segment's revenues for the three and nine months ended September 30, 2018, respectively.

No single customer amounts for the Envestnet Data & Analytics segment 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
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
United States
 
$
228,427

 
$
195,063

 
$
638,008

 
$
576,616

International (1)
 
7,653

 
8,093

 
22,183

 
25,667

Total
 
$
236,080

 
$
203,156

 
$
660,191

 
$
602,283

(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 September 30, 2019
Years ending December 31,
 
 

Remainder of 2019
 
$
62,669

2020
 
182,307

2021
 
115,379

2022
 
76,483

2023
 
37,144

Thereafter
 
46,268

Total
 
$
520,250



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 September 30, 2019 increased by $10,653, primarily the result of the PIEtech and PortfolioCenter acquisitions and an increase in deferred revenue related to subscription-based services during the nine months ended September 30, 2019. The majority of the Company's deferred revenue 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 $4,434 and $3,250 for the three months ended September 30, 2019 and 2018, respectively. The amount of revenue recognized that was included in the opening deferred revenue balance was $21,022 and $16,503 for the nine months ended September 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 $9,431 and $7,014 as of September 30, 2019 and December 31, 2018, respectively. Amortization expense for the deferred sales incentive compensation was $1,099 and $552 for the three months ended September 30, 2019, and 2018, respectively. Amortization expense for the deferred sales incentive compensation was $2,503 and $1,570 for the nine months ended September 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.