Envestnet, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Net Income (Loss) Per Share

Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 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 9—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 will 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.

The following table provides the numerators and denominators used in computing basic and diluted net income (loss) per share attributable to Envestnet, Inc.:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Basic net income (loss) per share calculation:
Net income (loss) attributable to Envestnet, Inc.	$	1,910	$	(3,080)	$	(10,350)	$	(20,372)

Basic number of weighted-average shares outstanding	53,800,048		52,215,469		53,464,101		50,414,427
Basic net income (loss) per share	$	0.04	$	(0.06)	$	(0.19)	$	(0.40)

Diluted net income (loss) per share calculation:
Net income (loss) attributable to Envestnet, Inc.	$	1,910	$	(3,080)	$	(10,350)	$	(20,372)

Basic number of weighted-average shares outstanding	53,800,048		52,215,469		53,464,101		50,414,427
Effect of dilutive shares:
Options to purchase common stock	331,728		—		—		—
Unvested restricted stock units	610,442		—		—		—
Convertible notes	730,267		—		—		—
Warrants	86,498		—		—		—
Diluted number of weighted-average shares outstanding	55,558,983		52,215,469		53,464,101		50,414,427
Diluted net income (loss) per share	$	0.03	$	(0.06)	$	(0.19)	$	(0.40)

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


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2020	2019	2020	2019
Options to purchase common stock	—	1,394,009	556,252	1,394,009
Unvested RSUs and PSUs	—	1,787,608	1,766,715	1,787,608
Warrants	—	470,000	470,000	470,000
Convertible Notes	4,848,044	7,793,826	9,898,734	7,793,826
Total anti-dilutive securities	4,848,044	11,445,443	12,691,701	11,445,443