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

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets, Net

Goodwill and Intangible Assets, Net

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in the carrying amount of goodwill were as follows:


	Envestnet Wealth Solutions		Envestnet Data & Analytics		Total

	(in thousands)
Balance at December 31, 2021	$	621,876	$	303,278	$	925,154
401kplans.com acquisition	11,396		—		11,396
Truelytics acquisition	—		16,195		16,195
Redi2 Technologies acquisition	44,236		—		44,236
Foreign currency translation	—		(714)		(714)
Balance at September 30, 2022	$	677,508	$	318,759	$	996,267

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 includes 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:


			September 30, 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	$	(274,310)	$	329,770	$	590,080	$	(241,189)	$	348,891
Proprietary technologies			119,824		(59,892)		59,932		85,324		(43,004)		42,320
Trade names			36,700		(28,320)		8,380		33,700		(24,515)		9,185
Total intangible assets	$	760,604	$	(362,522)	$	398,082	$	709,104	$	(308,708)	$	400,396

There were no material retirements of intangible assets during the three and nine months ended September 30, 2022 and 2021.

Amortization expense was as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021

	(in thousands)
Amortization expense	$	18,649	$	17,390	$	53,814	$	51,370

Future amortization expense of the Company's intangible assets as of September 30, 2022, is expected to be as follows:


Years ending December 31,	(in thousands)
Remainder of 2022	$	18,087
2023	60,087
2024	53,240
2025	49,900
2026	41,997
Thereafter	174,771
Total	$	398,082