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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
 
Commission file number 001-34835
env-20220930_g1.jpg
Envestnet, Inc.
(Exact name of registrant as specified in its charter)
Delaware20-1409613
(State or other jurisdiction of
incorporation or organization)
(I.R.S Employer
Identification No.)
1000 Chesterbrook Boulevard, Suite 250, Berwyn, Pennsylvania
19312
(Address of principal executive offices)(Zip Code)
 Registrant’s telephone number, including area code:
(312) 827-2800
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of exchange on which registered
Common Stock, par value $0.005 per shareENVNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ý  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerý Accelerated filer
Non-accelerated filer 
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes   No 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes   No 
As of November 2, 2022, Envestnet, Inc. had 55,326,136 shares of common stock outstanding.



TABLE OF CONTENTS
Page
2




Envestnet, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share information)
(unaudited)
September 30,December 31,
20222021
Assets
Current assets:
Cash and cash equivalents$241,330 $429,279 
Fees receivable, net96,098 95,291 
Prepaid expenses and other current assets55,078 42,706 
Total current assets392,506 567,276 
Property and equipment, net60,061 50,215 
Internally developed software, net173,285 133,659 
Intangible assets, net398,082 400,396 
Goodwill996,267 925,154 
Operating lease right-of-use assets, net83,472 90,714 
Other non-current assets99,548 73,768 
Total assets$2,203,221 $2,241,182 
Liabilities and Equity
Current liabilities:
Accrued expenses and other liabilities$207,025 $225,159 
Accounts payable19,447 19,092 
Operating lease liabilities12,133 10,999 
Deferred revenue34,082 33,473 
Current portion of long-term debt343,581  
Total current liabilities616,268 288,723 
Long-term debt, net of current portion509,006 848,862 
Non-current operating lease liabilities109,749 105,920 
Deferred tax liabilities, net14,976 21,021 
Other non-current liabilities12,938 17,114 
Total liabilities1,262,937 1,281,640 
Commitments and contingencies
Equity:
Stockholders’ equity:
Preferred stock, par value $0.005, 50,000,000 shares authorized; no shares issued and outstanding as of September 30, 2022 and December 31, 2021
  
Common stock, par value $0.005, 500,000,000 shares authorized; 69,866,788 and 68,879,152 shares issued as of September 30, 2022 and December 31, 2021, respectively; 55,323,222 and 54,793,088 shares outstanding as of September 30, 2022 and December 31, 2021, respectively
349 344 
Additional paid-in capital1,195,624 1,131,628 
Accumulated deficit(82,422)(37,988)
Treasury stock at cost, 14,543,566 and 14,086,064 shares as of September 30, 2022 and December 31, 2021, respectively
(164,844)(134,996)
Accumulated other comprehensive loss(7,949)(1,899)
Total stockholders’ equity940,758 957,089 
Non-controlling interest(474)2,453 
Total equity940,284 959,542 
Total liabilities and equity$2,203,221 $2,241,182 

See accompanying notes to unaudited Condensed Consolidated Financial Statements.
3


Envestnet, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share information)
(unaudited)

Three Months EndedNine Months Ended
September 30,September 30,
2022202120222021
Revenues:
Asset-based$177,131 $184,008 $571,820 $513,458 
Subscription-based123,747 113,572 356,601 335,905 
Total recurring revenues300,878 297,580 928,421 849,363 
Professional services and other revenues5,817 5,473 18,489 17,533 
Total revenues306,695 303,053 946,910 866,896 
Operating expenses:
Cost of revenues110,108 109,836 361,872 303,199 
Compensation and benefits116,837 109,839 369,453 316,101 
General and administration47,388 39,393 157,867 117,463 
Depreciation and amortization33,408 29,850 97,208 88,252 
Total operating expenses307,741 288,918 986,400 825,015 
Income (loss) from operations(1,046)14,135 (39,490)41,881 
Other expense, net(5,346)(3,551)(9,691)(14,803)
Income (loss) before income tax provision (benefit)(6,392)10,584 (49,181)27,078 
Income tax provision (benefit)2,271 (854)(1,542)9,074 
Net income (loss)(8,663)11,438 (47,639)18,004 
Add: Net loss attributable to non-controlling interest1,373 302 3,205 401 
Net income (loss) attributable to Envestnet, Inc.$(7,290)$11,740 $(44,434)$18,405 
Net income (loss) per share attributable to Envestnet, Inc.:
Basic$(0.13)$0.22 $(0.81)$0.34 
Diluted$(0.13)$0.21 $(0.81)$0.33 
Weighted average common shares outstanding:
Basic55,226,777 54,547,858 55,109,387 54,400,247 
Diluted55,226,777 55,388,627 55,109,387 55,287,972 

See accompanying notes to unaudited Condensed Consolidated Financial Statements.
4


Envestnet, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
(unaudited)
 
Three Months EndedNine Months Ended
September 30,September 30,
2022202120222021
Net income (loss) attributable to Envestnet, Inc.
$(7,290)$11,740 $(44,434)$18,405 
Foreign currency translation gains (losses), net of taxes(1,479)270 (6,050)(1,618)
Comprehensive income (loss) attributable to Envestnet, Inc.$(8,769)$12,010 $(50,484)$16,787 

See accompanying notes to unaudited Condensed Consolidated Financial Statements.

5


Envestnet, Inc.
Condensed Consolidated Statements of Stockholders' Equity
(in thousands, except share information)
(unaudited)

Accumulated
Common StockTreasury StockAdditionalOtherNon-
CommonPaid-inComprehensiveAccumulatedcontrollingTotal
SharesAmountSharesAmountCapitalLossDeficitInterestEquity
Balance, December 31, 202168,879,152 $344 (14,086,064)$(134,996)$1,131,628 $(1,899)$(37,988)$2,453 $959,542 
Exercise of stock options38,681 — — — 658 — — — 658 
Issuance of common stock - vesting of restricted stock units514,319 3 — — — — — — 3 
Stock-based compensation expense— — — — 21,690 — — — 21,690 
Shares withheld to satisfy tax withholdings— — (170,992)(12,570)— — — — (12,570)
Foreign currency translation loss, net of taxes— — — — — (1,478)— — (1,478)
Other— — — — (84)— — 102 18 
Net loss— — — — — — (13,859)(849)(14,708)
Balance, March 31, 202269,432,152 $347 (14,257,056)$(147,566)$1,153,892 $(3,377)$(51,847)$1,706 $953,155 
Exercise of stock options2,503 — — — 84 — — — 84 
Issuance of common stock - vesting of restricted stock units232,328 1 — — — — — — 1 
Stock-based compensation expense— — — — 22,876 — — — 22,876 
Shares withheld to satisfy tax withholdings— — (78,506)(5,543)— — — — (5,543)
Share repurchases— — (152,020)(9,235)— — — — (9,235)
Foreign currency translation loss, net of taxes— — — — — (3,093)— — (3,093)
Other— — — — (89)— — 104 15 
Net loss— — — — — — (23,285)(983)(24,268)
Balance, June 30, 202269,666,983 $348 (14,487,582)$(162,344)$1,176,763 $(6,470)$(75,132)$827 $933,992 


-continued-
6


Envestnet, Inc.
Condensed Consolidated Statements of Stockholders' Equity (continued)
(in thousands, except share information)
(unaudited)

Accumulated
Common StockTreasury StockAdditionalOtherNon-
CommonPaid-inComprehensiveAccumulatedcontrollingTotal
SharesAmountSharesAmountCapitalLossDeficitInterestEquity
Balance, June 30, 202269,666,983 $348 (14,487,582)$(162,344)$1,176,763 $(6,470)$(75,132)$827 $933,992 
Exercise of stock options37,618 — — — 1,817 — — — 1,817 
Issuance of common stock - vesting of restricted stock units162,187 1 — — — — — — 1 
Stock-based compensation expense— — — — 17,265 — — — 17,265 
Shares withheld to satisfy tax withholdings— — (55,984)(2,500)— — — — (2,500)
Foreign currency translation loss, net of taxes— — — — — (1,479)— — (1,479)
Other— — — — (221)— — 72 (149)
Net loss— — — — — — (7,290)(1,373)(8,663)
Balance, September 30, 202269,866,788 $349 (14,543,566)$(164,844)$1,195,624 $(7,949)$(82,422)$(474)$940,284 


See accompanying notes to unaudited Condensed Consolidated Financial Statements.
7


Envestnet, Inc.
Condensed Consolidated Statements of Stockholders' Equity (continued)
(in thousands, except share information)
(unaudited)

Accumulated
Common StockTreasury StockAdditionalOtherNon-
CommonPaid-inComprehensiveAccumulatedcontrollingTotal
SharesAmountSharesAmountCapitalLossDeficitInterestEquity
Balance, December 31, 202067,832,706 $339 (13,739,171)$(110,466)$1,166,774 $(398)$(79,912)$(519)$975,818 
Adoption of ASU 2020-06, net of taxes of $7,641
— — — — (108,470)— 28,628 — (79,842)
Exercise of stock options27,043  — — 522 — — — 522 
Issuance of common stock - vesting of restricted stock units455,349 2 — — — — — — 2 
Stock-based compensation expense— — — — 14,013 — — — 14,013 
Shares withheld to satisfy tax withholdings— — (147,041)(9,541)— — — — (9,541)
Share repurchase— — (24,227)(1,672)— — — — (1,672)
Foreign currency translation loss, net of taxes— — — — — (624)— — (624)
Other— — — — — — — 118 118 
Net income (loss)— — — — — — 14,946 (11)14,935 
Balance, March 31, 202168,315,098 $341 (13,910,439)$(121,679)$1,072,839 $(1,022)$(36,338)$(412)$913,729 
Exercise of stock options4,082  — — 51 — — — 51 
Issuance of common stock - vesting of restricted stock units140,082 1 — — — — — — 1 
Stock-based compensation expense— — — — 17,161 — — — 17,161 
Shares withheld to satisfy tax withholdings— — (46,699)(3,479)— — — — (3,479)
Share repurchase— — (6,261)(425)— — — — (425)
Capital contribution - non-controlling interest— — — — (788)— — 811 23 
Foreign currency translation loss, net of taxes— — — — — (1,264)— — (1,264)
Other— — — — — — — 38 38 
Net loss— — — — — — (8,281)(88)(8,369)
Balance, June 30, 202168,459,262 $342 (13,963,399)$(125,583)$1,089,263 $(2,286)$(44,619)$349 $917,466 


-continued-

8


Envestnet, Inc.
Condensed Consolidated Statements of Stockholders' Equity (continued)
(in thousands, except share information)
(unaudited)

Accumulated
Common StockTreasury StockAdditionalOtherNon-
CommonPaid-inComprehensiveAccumulatedcontrollingTotal
SharesAmountSharesAmountCapitalLossDeficitInterestEquity
Balance, June 30, 202168,459,262 $342 (13,963,399)$(125,583)$1,089,263 $(2,286)$(44,619)$349 $917,466 
Exercise of stock options12,954 — — — 347 — — — 347 
Issuance of common stock - vesting of restricted stock units163,999 1 — — — — — — 1 
Stock-based compensation expense— — — — 18,760 — — — 18,760 
Shares withheld to satisfy tax withholdings— — (54,912)(4,294)— — — — (4,294)
Capital contribution - non-controlling interest— — — — 661 — — 2,517 3,178 
Foreign currency translation gain, net of taxes— — — — — 270 — — 270 
Other— — — — (167)— — 76 (91)
Net income (loss)— — — — — — 11,740 (302)11,438 
Balance, September 30, 202168,636,215 $343 (14,018,311)$(129,877)$1,108,864 $(2,016)$(32,879)$2,640 $947,075 


See accompanying notes to unaudited Condensed Consolidated Financial Statements.
9


Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
September 30,
20222021
OPERATING ACTIVITIES:
Net income (loss) $(47,639)$18,004 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization97,208 88,252 
Provision for doubtful accounts(468)2,051 
Deferred income taxes(4,380)7,078 
Release of uncertain tax positions(3,095) 
Non-cash compensation expense62,583 50,307 
Non-cash interest expense5,436 4,889 
Accretion on contingent consideration and purchase liability 656 
Payments of contingent consideration (2,360)
Fair market value adjustment to contingent consideration liability (1,067)
Fair market value adjustment to investment in private company (758)
Gain on settlement of liability (1,206)
Loss allocations from equity method investments5,332 5,553 
Dilution gain on equity method investee share issuance(6,934) 
Lease related impairments, including right of use assets14,050 1,537 
Loss on property and equipment disposals - office closures3,710  
Other319 249 
Changes in operating assets and liabilities, net of acquisitions:
Fees receivable, net1,546 (38,030)
Prepaid expenses and other current assets(8,610)569 
Other non-current assets(3,914)4,854 
Accrued expenses and other liabilities(23,168)26,637 
Accounts payable(867)4,122 
Deferred revenue(2,329)(1,065)
Other non-current liabilities(2,545)(298)
Net cash provided by operating activities86,235 169,974 
INVESTING ACTIVITIES:
Purchases of property and equipment(13,114)(15,779)
Capitalization of internally developed software(67,755)(49,024)
Acquisition of proprietary technology(15,000)(25,517)
Acquisitions of businesses, net of cash acquired(104,185)(32,794)
Investments in private companies(16,351)(8,926)