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

Quarterly report pursuant to Section 13 or 15(d)

Revenue

Three Months Ended

Revenue

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue

Disaggregation of Revenue

The following table presents the Company’s revenues disaggregated by major source:



	Three Months Ended March 31,
	2020						2019
	Envestnet Wealth Solutions		Envestnet Data & Analytics		Consolidated		Envestnet Wealth Solutions		Envestnet Data & Analytics		Consolidated
Revenues:
Asset-based	$	134,811	$	—	$	134,811	$	108,934	$	—	$	108,934
Subscription-based	60,323		44,228		104,551		41,026		42,061		83,087
Total recurring revenues	195,134		44,228		239,362		149,960		42,061		192,021
Professional services and other revenues	3,286		3,891		7,177		2,745		4,900		7,645
Total revenues	$	198,420	$	48,119	$	246,539	$	152,705	$	46,961	$	199,666

One customer accounted for more than 10% of the Company’s total revenues:

Fidelity accounted for 19% and 20% of the Envestnet Wealth Solutions segment's revenues for the three months ended March 31, 2020 and 2019, respectively. No single customer accounted for over 10% of the Envestnet Data & Analytics segment's revenue 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
	March 31,
	2020		2019
United States	$	240,452	$	192,119
International ⁽¹⁾	6,087		7,547
Total revenues	$	246,539	$	199,666


⁽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 March 31, 2020:



Years ending December 31,
Remainder of 2020	$	169,680
2021	166,469
2022	121,386
2023	57,523
2024	32,908
Thereafter	27,043
Total	$	575,009

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 March 31, 2020 increased by $5,947 during the three months ended March 31, 2020, primarily the result of revenue growth, timing of cash receipts and revenue recognition. 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 $15,479 and $9,723 for the three months ended March 31, 2020 and 2019, 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 $9,218 and $9,387 as of March 31, 2020 and December 31, 2019, respectively. Amortization expense for the deferred sales incentive compensation was $1,029 and $651 for the three months ended March 31, 2020, and 2019, respectively. Deferred sales incentive compensation is included in other non-current assets on the condensed consolidated balance sheets and amortization expense is included in compensation and benefits expenses on the condensed consolidated statements of operations. No significant impairment loss for capitalized costs was recorded during the periods.

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 in the condensed consolidated statements of operations.